Early Retirement in the Time of Covid | Steve Adcock's 2021 Update

Hey, fam! It’s been a while since I have written for Think Save Retire and want to check in about how retired life is treating us and to answer a few common questions we get.

First, yes, retirement is every bit as exciting as I had hoped. But, not everything went according to plan. This is especially true after Covid-19.

As many of you know, we bought a little 800 square foot house in the middle of the desert in 2019 (in cash!), just a few months before Coronavirus hit the United States full force.

We couldn’t have timed it any better.

Out in the middle of the desert, social distancing is a way of life. Our nearest neighbor is a half-mile away. We’ve come to appreciate the solitude.

Now, let’s move on to some great questions that we commonly get.

You lost more than $200K during the pandemic. Did you recover?

In April of 2020, our finances took a drastic dip into the red. And, it just so happened to be when MarketWatch sent a small film crew out to our little desert abode to create a short documentary on our life (we also filmed a similar feature with CNBC - more on this later).

Like I said in the MarketWatch video, our investments were down more than $230,000 at the height of the initial wave of Covid in the United States.

Friends asked me if I was going to cut my losses and sell everything. Several Twitter followers practically begged me to get out of the market because “everything is going to crash!”. They wanted me to try and time the market by getting out before the bottom dropped.

I’m glad we didn’t.

Here’s our actual net worth graph from the past two years or so.

That huge dip? Yup, that was in April of 2020. But, notice what happened shortly thereafter.

Not only did we recover everything we lost, but by staying in the market through 2020, we managed to tack on another $150,000 to our net worth.

Moral of this story? Timing the market doesn’t work, at least consistently. We consider 100% of our investments long-term, and by keeping our money in the market, we set ourselves up to ride the wave upward on the other side of the April collapse.

Have you made any adjustments to your financial strategy in the past year?

Actually, yes. We’re spending much more money now than we had anticipated. But, this is intentional. As index fund investors, our spending is tied - at least somewhat, to how well the market is doing. When the market is doing well (woohoo!), we spend more money and enjoy ourselves. When it’s down (like it was last year), we spend less.

In a typical year, we spend in the neighborhood of $40,000. Living off-grid without any utility bills and low property taxes (less than $100 a month), our required monthly expenses are quite low.

But this year, we’re on track to spend almost $70,000.

For instance, we dropped $6,500 on an AirBnB house in Oceanside, CA this year for the entire month of July. We also spent almost $30,000 on a brand new water well. And, we’re looking into buying a used shipping container and using that as my dedicated gym and “man cave”, which could set us back $10,000 or more.

Right now, we aren’t nearly as frugal as we usually are. With a hot market, now is the time to get some of these larger expenses out of the way. But once the market begins to “recess” (as we all know it will), our spending will adjust along with market conditions.

Do you still like your healthshare?

One of our major concerns pre-early retirement was the cost of healthcare. Without an employer shouldering the majority of the costs, health expenses can quickly get out of control.

In 2017 (the year after I retired), we signed up with Liberty Healthshare and paid about $500 a month for nationwide coverage for my wife and me. Luckily, we never had to use it.

This year, we jumped onto the Healthcare Exchange. To our surprise, we found traditional health insurance for less than we were paying for Liberty. So, we jumped ship.

Our health insurance plan costs $300 a month for both my wife and me. That’s $200 LESS than Liberty! Go figure.

How is it cheaper? Two primary reasons:

• We chose a high-deductible plan. We often don’t go to the doctor and are fortunate enough to enjoy good health, so a high-deductible plan is worth the potential risk.
• We get subsidies based on income. As early retirees, our income qualifies us for subsidies, which brings the price of health insurance down substantially.

With low-income subsidies, we found health insurance to be extremely affordable now. This is especially true if you are okay with a high-deductible plan.

What did you think of Mr. Wonderful’s critique of your FIRE strategy?

In August, Canadian billionaire Kevin O’Leary (aka “Mr. Wonderful”) critiqued our FIRE strategy after watching the documentary we did with CNBC. This is different than the MarketWatch film I talked about earlier.

I thought his reaction was pretty reasonable. He seemed most concerned with our savings strategy and using our larger-than-normal short-term savings account to help prevent us from selling stocks in down markets. But, whatever. We’re comfortable with our financial plan.

And, that’s all that really matters.

If you’re curious, we keep about $60,000 in an interest-bearing savings account for emergencies. We also use this money to cover our living expenses in a down market rather than selling stocks when they are low. Works swimmingly for us.

How is your eBook doing?

Big Money is something that I’m extremely proud of. It’s my eBook that chronicles our journey from a 9 to 5 job to early retirement. In it, I detail the exact steps I took to achieve financial independence and early retirement. The feedback I’ve seen has almost made me cry.  :)

Two of my favorite testimonials:

“Steve, I got my first raise at work today because I took your advice and asked for it!” As I like to say, if you never ask for a raise, the answer will always be “No”.

And, “I started my first emergency fund because of your eBook. I feel so much more confident and secure, now.”

This is what it’s all about.

I’ve sold over 600 copies and hardly advertise it. At its current price point, I’m not getting rich off of it. But, I don’t want to get rich off of my eBook. That’s not why I wrote it.

I wrote it to make a difference. I encourage everyone who buys a copy to give it away to someone who needs it, free of charge. I don’t care about the money.

I care about spreading financial freedom.

What does a typical day look like for you?

I get this question a LOT, and my answer probably isn’t all that glamorous.

The simple answer: Whatever I want.

The longer answer: I wake up without an alarm clock. My wife and I roll out of bed and pet our dogs for a few minutes, then we take them for a 2-mile walk down our dirt road. It’s rare when we see another car on the road while we’re walking.

Then, we brew some coffee and eat fruit as I pull up my email and open Twitter to check out what happened overnight. This is my favorite part of the day. I get to leisurely click around on the computer. No stress. No time limit. It takes me as long as it takes me.

The morning hours is my productive time of the day. I’ll write. I’ll work on a project. Anything that needs my full and undivided attention, I’ll do that in the morning.

Around 11 am we’ll make lunch. Then, the afternoon is really an open slate. I might go back to my computer. Or if we’re doing something around the house, I’ll tackle that after lunch. If nothing else is going on, I’ll take another walk to get more steps. The afternoon is a free-for-all.

At 4:00, my wife and I step away from the computer to enjoy happy hour. We try to sit outside unless the weather doesn’t permit it. If we’re forced to be inside, we’ll usually play a card game or two as we sip on our beverages. I’m a Gin & Tonic guy. Sometimes, a margarita.

Dinner is around 5:30. After, we take another walk with the puppies. The evening is my Netflix time. I’ll grab a beverage and pull up an episode of something. Right now I’m going through Breaking Bad (for the second time!).

Does anyone know if Ozark is coming back, by the way?

Do you think you would have retired as soon as you did if remote working options were available?

Believe it or not, the last job I held before retirement was a work-from-home position. While I didn’t enjoy the job, I loved the ability to work remotely. It gave me the freedom to do my job in a style that worked best for me, whether that meant working from home or at a coffee shop.

No, I can most assuredly say that remote working options would not have affected my desire to retire early - because I was already working from home. I do not like working full-time. I hate that full-time jobs demand so much of your time. I hate that the weekends were the only two days I had for myself. Full-time work just doesn’t “work” for me.

If there’s a positive element that came out of Covid-19, it’s the normalization of flexible working arrangements. The ability to work from anywhere gives workers much more control over their lives, and their finances.

For instance, no commute means less money spent on fuel and less wear-and-tear on cars. Remote work may also give some people the option of moving to a lower cost-of-living city. Imagine keeping your current salary but spending less on living expenses in a cheaper city?

Your financial situation improves instantly. You might even reach financial independence sooner.

What’s next?

We ask ourselves this question, too.

Here’s what we know: We have no interest in returning to full-time RV travel. We lived in an Airstream and traveled the country for three years, but we don’t want to do that anymore.

We’ve settled nicely into our little home out in the country. We love it here.

We installed a covered patio to provide shade for outdoor happy hours. We insulted the garage and turned it into my office and gym (until the shipping container shows up!). We installed a well for water. Our solar system provides ample power every day. And, we just started a project to fence in a portion of our property so our dogs can run around off-leash.

Here’s what we don’t know: Exactly what the future will hold.

But, it’s nice knowing that the world is our oyster. I love early retirement. I love controlling my day and my schedule. I love the freedom to get up without an alarm clock and go to bed whenever I’m tired (usually around 9pm). It’s a lifestyle I would not trade for the world.

Where can you find me? I write at steveadcock.us. I also spend a lot of time over on Twitter, at @SteveOnSpeed. I’ve also just started a small-ish money news website at TheDollar.us.