Mini Retirement and Passive Income

I’m starting a new job in January 2021. 

This means that my mini-retirement is coming to an end. 

It has been 20 months of traveling, learning, frustrations, life-changing happenings, and experiences. 

I thought I would never say this but I’m looking forward to having a normal 9-5 structure again. 

The normal way to do a Mini Retirement

In Denmark, it is quite normal to go for a sabbatical year or two, either before your studies or post your studies. 

While this seems like a convenient time to do so. It is the stupidest thing you can do.

Many will end up in debt by doing so, and it will give you a negative start on claiming your financial freedom later in life. 

Your first 100.000 $

The first 100.000 $ is a bitch, but you gotta do it.  

Charlie Munger

Do whatever it takes to get your fingers on the first 100.000 $ and then go for a mini-retirement. 

There are several reasons why this will help you: 

  1. You will earn money while traveling

If you leave your home country with 100.000 $ invested, chances are that you will come home richer than when you left. 

  1. It will give you flexibility

Do you remember the time where you got picked up in kindergarten by your parents, and the last thing you wanted to do was go home? That is exactly how a mini-retirement can be. 

You can stay away longer, or if a life-changing opportunity shows up, but requires either time or money then you can still do it. 

  1. A cushion when you come home 

Having 100.000 $ (or even 50) will give you a cushion to come home with no stress at all. You can take your time for job seeking and suck in all of the experiences you must have had. 

It can also make room for approaching a whole new career where you have your financials in check and ready to pursue your new career. 

How I did it 

I finished my building constructor studies in January 2016. For there I worked in two different companies for the next three years. 

Some of that period was part-time as a building constructor because I was rowing +15 hours a week. But I did earn about 1.000 $/month doing that, so there was close to no cut in my earnings.

For those three years, I saved and invested about 60 % of my earnings which was about 550.000 DKK. 

I got the opportunity to follow a dream by being a captain on a sailing boat for 10 months, which led me to the sailing school in Oure where I started in April 2019. 

I was 28 years with 550.000 DKK to my name before I went for my sabbatical years (aka mini-retirement). 

There was a misunderstanding between the owner of the boat and me, because of that I had to live in the Philippines for two months on my own. 

With all the money invested, I could make a quick trip to France to visit my girlfriend. 

The two months of living in the Philippines and my trip to France cost me about 40.000 DKK. 

Even with selling shares worth 40.000 DKK, my portfolio still made me 113.000 DKK.

That only happens because I have worked three years before I left. 

Coast FIRE and Mini Retirements

What do you want the most? 

  1. A sabbatical year or two once in your life, or.
  2. A mini-retirement every three years for the rest of your life?

My 12 months of sailing cost me less than 50.000 DKK.

Which is money I could earn in three months as a building constructor.

Working only three months as a building constructor is not an option, but as a Mason, it wouldn’t be a problem. 

I can finance one year of sailing by working for 3-4 months.

In the meantime, my portfolio will compound into +50 years of living expenses when I become 65 years. 

A Mini-Retirement is Cheap

Mini Retirements are way less expensive than a normal vacation. Just like everyday living, going on a trip can be broken down into three major expenses.

  1. Transport
  2. Food
  3. Housing 

Transportation includes flying and going around in the country. When you travel for an extended period, you can choose to go there when the airplane tickets are less expensive than in season.

And when you have several months of traveling you are not in the same hurry as a normal tourist so you can either walk or rent a cheap vehicle to get around. 

Food can be done ridiculously cheap in some countries. In the Philippines, it can be done for less than 100 $/month.

When I was leaving the Philippines I invited three of my local friends out for nice food and all the beer that they could drink. Even that cost less than 100 $. 

Housing can also be super cheap. What is cheap for many people from the west, can be expensive for the locals.

Getting an apartment in major cities can be done for less than 500 $/month. I did a private room in a hostel for the two months I was in the Philippines and paid 500 $/month. 

So if you go to a place cheaper than your home country it will be a lot cheaper being on the road, rather than living your everyday life back home. 

I never spent more than 1500 $/month the two months I lived in the Philippines. And I didn’t pay any attention to spending. 

Be Creative

When you have +3 months to travel another good way to decrease your living expenses is to get a job. 

There are several ways you can do this: 

  1. Get a fun job 

Get a job that does pay something, but the main reason you are doing it is that it is fun. 

It could be:

  • Bartending 
  • Cooking
  • Diving instructor
  • Ski instructor

This can also provide a please or even a free place to live. And if you are into beers, bartending is a great way to eliminate expenses. 

  • Volunteer

Volunteering might be one of the best solutions to cut your housing and food expenses to zero. While it can be the most fulfilling at the same time. 

Doing stuff for free to help other people is underrated. I would encourage you to try it. 

Go for a Mini Retirement in 2021 

If you are new to FIRE and you are still working on saving and investing your first 100.000 $, then continue on that journey. 

If you are a couple of years into claiming your freedom, I will encourage you to go for a couple of months in 2021. It doesn’t have to be outside of the borders of your home country. 

Attend a school where you can learn a new craft. Or if you are into sports, try going “pro” in that for a short period. 

Explore how it feels not to work. It will either make you hungry for more and speed up your FIRE process.

Or it will make you miss your colleague’s and your old work. Which will make your work more enjoyable. 

It’s a win-win! 

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