luxury – Fire Dad

Before the days of the Fat FI/RE movement that headline would have seemed like blasphemy. I say the notion of a second home in the context of the Financial Independence movement is a rare fringe, but I am here to make the case that, for a % of us in this movement, purchasing a vacation home is the best use of our resources and could even accelerate your FI/RE date. It’s going to take some work, research, energy and effort but it can be done and it can be done A LOT cheaper than you think.

Our FI/RE journey was built on investing capital aggressively in businesses and opportunities regardless of geography with very few limitations. This has led us to our current position of owning 3 businesses that operate in 17 states and internationally, 4 rental properties in 3 states and family far away from our primary residence. We have kids, dogs, equipment to work remotely, etc. We travel heavy and FI/RE dad has enough committments that I need to be able to connect on a regular basis. Those are the logical reasons to consider a second home somewhere near some of the items listed. It so happens that the most time consuming business and lots of family are all within a 150 mile radius.

The icing on the 2nd home cake is that I built an Event’s Consulting business on the back of travel. Lots and lots of travel that took me to multiple countries and 30+ states every calendar year. It will take decades before I willingly want to spend a vacation in a hotel. Air Travel and hotels are not things I associate with fun and that is just a product of being a million mile traveler before the pandemic of 2020. It’s been 15 months since I’ve been on a plane and if I never had to fly again I’d be happy.

Everything seems logical, but from the lens of FI/RE it seems illogical to buy a second home just so you can keep working. Looking at current real estate prices the most modest home in the cheapest places in the US are at least $100,000. The time it takes to earn that extra capital plus maintenance should outweigh any potential savings so much that there is no way it could actually speed up FI/RE?
This is fundamentally a math equation where the purchase needs to directly contribute to an increase in earnings or reduce future expenses enough to offset the initial outlay of capital. Turns out, that math isn’t as difficult as it sounds if you’re willing to spend the time and energy. Let’s look at our costs:

$55,000 – Cost of 2br/1b cabin on 1 acre
$5,500 – Initial repairs
$1,250 – furnishings

$61,750 – One time investment

Annual costs

$1,200 – Utilities
$2,100 – Tax and federal land lease
$1,500 – repairs fund

$4,800 – Annual expenses

The vacation home we purchased is a cabin with central air, heat, plumbing on a national wildlife preserve. it is 25 miles away from my retail business and 30 miles away from 3 of our rental properties with a ton of family in easy driving distance.

Given the opportunity we would spend 6-8 weeks each year in this general area either working on our investments, visiting family and now, vacationing. The cost of lodging for us on the vacation home market would be enormous (we were estimating $7-8,000/yr) and would easily exceed the annual expenses of the cabin each year which helps pay off the principal investment from year 1.

Did you know that the federal government owns tons and tons of land? Did you also know that this land has been leased out to citizens for over 100 years? These programs are extremely cost effective ways to enjoy some of the most beautiful parts of America, having access to a second home and helping to protect and preserve public land.

Going through the 10 month process of applying for a lease I learned that these applications are dropping by my generation and younger. The programs are hard to learn about, there is little information online and most of the process is paper and phone calls.

The goal of this post is not to try to convince everyone they need to lease public land. Rather to give another concrete example of what my blog is all about. The tagline of this blog is “A Frugal Life of Luxury” and I can’t think of a better example than buying and maintaining a vacation home for less money than hotel stays.

Here are some photos from the first 36 hours we had the cabin.

I still remember being a little kid and my grandpa driving through a full service car wash. We got to walk through and watch the car get blasted with these funny colored foams and then blasted with fans loud enough that conversation was impossible. I could just stare in awe as the army of guys armed with towels coming out of every pocket descended on the car and began wiping every surface. It was then and still is an impressive display of luxury in our world. For around $25 today you can experience this at your closest full service car wash. The one near me ranges from $25 – $45 for a much more clean and luxurious experience. These places do a great job, but what if you could get an even better looking car at the end and spend next to nothing? You might even get a little tan or some stronger muscles out of the deal.

Here is how my grandpa used to wash his cars before a parade. He built the cars himself from junk yard parts. When he washed the cars for parade day he was gonna make sure they were as close to perfect as they could, but also making sure he didn’t have to spend any more money than was necessary.

1930 Model A — 1930 Ford my grandpa built from a junk yard – also some very cool 90s teenagers

Here is your arsenal of consumables:

Wheel & Tire cleaner – anything that says degreases will do, get whatever is cheapest and on sale from your local auto parts store or online. I have a 64oz bottle I refill a spray bottle with. It has lasted more than a year at a price of $14.00
Wash fluid – Get the best price per ounce on a foaming concentrate wash fluid mine was another 64oz that typically lasts about one year washing three cars regularly. $6.49
Tire Shine foam – I always buy the No Touch brand just because my dad always did. This stuff is not necessary but does a great job on the final finish; it makes such a difference that it’s clearly one of the secrets to making cars look new. One can lasts 8 months on three vehicles – $6.99

One time purchases/acquisitions:

Microfiber towels – Get a bunch, 20 or so that are bought in bulk packages. I’ve found Costco and Autozone to make the best 3-10 packs. Also get 3-5 larger and much more high quality versions. When you are shopping for these you are looking for fluffy feeling and the packaging to say “finish”.
5 gallon buckets – I use 4 buckets, but that’s just because I have 2 that are permanently stuck together and one is my chair for when I’m doing wheels. You’ll be fine with 2 that are new or at least very clean inside.
Wheel brush kit – Just get a generic one, make sure the brush fits between your wheels and has bristles on all sides.

Here is the process – Let’s call it the clean bucket system.
The idea of this system is to never let a dirty towel touch the clean water or clean towels.

Fill your wash bucket with whatever the recommended amount on the container says and add water until ½ full (2.5 gallons)
Add your ¾ of your bulk microfiber towels and mix very well
Give your vehicle a gentle rinse to get any easy dust off (optional if you are in extremely limited space, you’ll just use more towels is all)
The towels should be pretty saturated at this point. Take 1 towel and begin scrubbing your car down. When it starts to feel like the towel has run out of soap and water mix then throw that towel in the dry bucket. Repeat this step until you have scrubbed all surfaces of the car, including the door jams
Rinse as needed, I live in a very dry place so typically I break this up into 4 equal parts during the whole process.
Scrub any foreign particles aggressively with the soapy towel until they come off.
After you have washed and rinsed you’ll need to start drying. Use the remaining bulk microfiber towels for this job and add them to the dry bucket.
Grab your clean, higher quality microfibers and wipe down all surfaces after the car is fully dry. (This is a crucial step if you want showroom quality)

If you lived in a place without access to a hose that can reach your vehicle this process still works with an additional bucket that is just full of water and a few extra towels. Your rinse process is using a clean and wet towel to rinse the soap off.

Alright so now the body of the car looks like brand new and you’ve spent nothing other than a small amount of water and a small amount of consumables. At this point most wash cycles you are done. However, when you are really going for that parade look you can’t leave those wheels with all that road and brake dust can you?

Here is how you get your wheels to be admired:

Wet the wheels, I will usually use the remaining wash bucket and equally dump it on all the wheels, careful to splash too much on the body or you’ll need to wipe that down.
Hit the wheels with the Wheel & Tire cleaner – do a good coat including inside of the wheel.
Go clean up – The cleaner needs to do its job and now is a perfect time to put your wash stuff away. (keep 2 towels very wet with the wash solution)
After 3 minutes or more your wheels will be ready for your 2 Tire Towels. Get in there and make sure you touch every surface you can with mild to medium force. Each wheel should take you at least 2 minutes. If it’s been awhile you may need more towels and a little more time.
Spray the wheel down with water to remove all the excess grime
Wipe any areas you missed now that the water did its job
When the tires dry spray on a thin layer of the Tire Shine Foam. Let dry
Once everything is totally dry go back and wipe the wheels (not tires) down with a dry microfiber

This is everything you need to make your car look like you spent $25+ on a car wash when in reality you spent around $1, got a decent workout and have a pride of ownership that you did it yourself.

The final product