Mini-retirement without income?

[dholowiski@yahoo.comdholo]

I live in Calgary, Canada and I bought a Condo about 4 years ago. Real estate prices have gone through the roof, and it is now worth enough that if I sold my condo I could pay my debts and still have $100,000 (Canadian). This works out to my expenses for about three years of living, including debt payments.

So my question is this- would it be wise to cash out and take a mini-retirement, without any other source of income? I plan on developing some kind of information product, but it's all very unknown right now & I wouldn't be making money until well into my mini retirement.

Any thoughts/comments?

[searstower]

Would it be wise? Not sure.

Would I do it if I was in your shoes? Maybe, though I wouldn't spend the entire thing on living expenses.

One of my financial coaches talks about the Wealth Cycle vs the Lifestyle Cycle. The lifestyle cycle is what most people do. They get paid, then they go out and spend most of their money. They may put some money into a savings account, but they have to go back to work again to get more money.

The wealth cycle is get paid, then put that money into some sort of investment that pays interest and live off of the interest. If you never dig into the principal, then you can never go broke and your money is working for you, rather than you working for your money.

If you sell your condo and use all of the equity to pay your expenses, they you are falling back into the lifestyle cycle.

Is that a bad thing?
That depends on how long you want to keep working for your money.

However, if I was in a stressful job (which I am) and I realized that I really needed a month or two of relaxing before I would be able to really focus on my muse (which I do), then yes, I would take some of that equity and make it happen. The keyword there is SOME.

Remember that with that much cash, you could basically buy a muse that is already producing income, or invest in other passive ideas, such as buying ATMs or wireless credit card terminals. (This was a big thing recently in Canada because so many people use credit/debit cards that they wanted to put them in taxis too.)

So, assuming your retirement account is already fat and happy, you might take 1 year's worth of expenses and put them in a liquidable account that pays decent interest, for instance an internet-based high yield savings at 5% with HSBC.

You don't want that much money sitting around in your checking account completely paralyzed, so make it grow for you while you still have it. Look for a muse to buy with the rest. If you can find a good company that you can automate better than it is already, that might be a very good start. Then you don't have to worry about setting up the

Heck, if you want to do things the NR way and set up insanely short deadlines to force focus, you may only give yourself 4 months of expenses.

Let us know how it goes!
Rebecca

[searstower]

Would it be wise? Not sure.

Would I do it if I was in your shoes? Maybe, though I wouldn't spend the entire thing on living expenses.

One of my financial coaches talks about the Wealth Cycle vs the Lifestyle Cycle. The lifestyle cycle is what most people do. They get paid, then they go out and spend most of their money. They may put some money into a savings account, but they have to go back to work again to get more money.

The wealth cycle is get paid, then put that money into some sort of investment that pays interest and live off of the interest. If you never dig into the principal, then you can never go broke and your money is working for you, rather than you working for your money.

If you sell your condo and use all of the equity to pay your expenses, they you are falling back into the lifestyle cycle.

Is that a bad thing?
That depends on how long you want to keep working for your money.

However, if I was in a stressful job (which I am) and I realized that I really needed a month or two of relaxing before I would be able to really focus on my muse (which I do), then yes, I would take some of that equity and make it happen. The keyword there is SOME.

Remember that with that much cash, you could basically buy a muse that is already producing income, or invest in other passive ideas, such as buying ATMs or wireless credit card terminals. (This was a big thing recently in Canada because so many people use credit/debit cards that they wanted to put them in taxis too.)

So, assuming your retirement account is already fat and happy, you might take 1 year's worth of expenses and put them in a liquidable account that pays decent interest, for instance an internet-based high yield savings at 5% with HSBC.

You don't want that much money sitting around in your checking account completely paralyzed, so make it grow for you while you still have it. Look for a muse to buy with the rest. If you can find a good company that you can automate better than it is already, that might be a very good start. Then you don't have to worry about setting up the

Heck, if you want to do things the NR way and set up insanely short deadlines to force focus, you may only give yourself 4 months of expenses.

Let us know how it goes!
Rebecca