- Reducing the amount of money required on a monthly basis, and
- Generating income to offset living expenses.
Bay Area living, in an excellent elementary public school district comes with its own suite of out sized living costs to which we are not immune . A residential area with excellent schools and low housing costs is a holy grail. Below is a look at our expenses in a typical month:
- Housing (Mortgage, HOA, Property Taxes) – 65%
- Basics - Food, Fuel, Attire, Utilities, etc. – 12%
- Travel and Entertainment – 10%
- Children's schooling, training, and misc. – 7%
- Others - Insurance (housing, personal, auto), Home Maintenance, etc. – 6%
Our plan to achieve financial independence can be summarized as follows:
- Relocate to the South of India (our native soil). Infrastructure is practically non-existent there, when pitted against Western standards, but the area offers some distinct advantages and below are a few highlights:
- Lower living costs.
- Proximity to our extended family.
- Immediacy to growing areas of the world.
- Opportunity to experience global living thanks to our US citizenship.
- Our primary residence there will be the house we bought outright a few years ago. Housing which accounted for 65% of our monthly expenses in the Bay Area should then account for a much lower portion of our total expenses – zero mortgage, much lower HOA and property taxes.
- The children will be attending private school and that is one area where the costs will be significantly higher than in the Bay Area. The kids now attend free public education and the decision to private school them comes with a higher price tag, although it will be less than private schooling in the US.
- As for passive income – slowly, but surely we have been adjusting our stock portfolio toward investments in companies with consistent dividend growth. By selling our house and realizing the equity tied up there, we should be able to increase the size of our stock portfolio, thereby increasing dividends (passive income). Developing other streams of passive income as time allows is always in the offing.
- How well will we deal with the new environment?
- How long will it take before the avocation becomes a vocation?
- How successful will our passive income strategies pan out to be?