The great thing about the community we’ve built in our Facebook Group is not just that we’ve created an environment where people feel comfortable asking personal questions, but that when they do, there are people there to answer them. Once such question was asked a few days ago and I felt compelled to answer. I wanted to give a more detailed answer than what is possible in a Facebook comment and I wanted my answer to be able to help more people than just in the Facebook group, so I decided that the blog was the perfect place to answer the concerns of the original poster. Here is a screenshot of the Facebook post with identities removed:
There is a lot in this post that needs attention. First, let’s consider that in this situation, the goal is two years. This should be completely doable if you really work at it. But as Dave Ramsey says, “You have to live like no one else, so that later, you can live like no one else.” I personally think there should be a couple words added in. My take on it is “You have to live like no one else WILL so that later, you can live like no one else CAN.” That’s really what he means. You are going to have to cut out many luxuries in your life and work harder than most people are willing to work. But it can be done.
Now, let’s focus on the easiest part of the whole situation: business. The best time to start your eBay/Amazon business was a few years back. The second best time is now. Since you included the words “keep trying to pay off debt,” I’m assuming you are making enough money at your jobs to do that, although maybe not as quickly as you’d like. Since that is the case, my advise is going to differ slightly from what good ol’ Mr Ramsey would recommend.
First, I want to make two things clear. First, do not add ANY debt for your business ventures. You may want to do that once your business has grown, but this is not the time. Second, don’t take ANY money away from what would be used to pay off debt and use it for business. So where do you get the money to start a business? Simple. Sell stuff.
Sell YOUR stuff.
Raid your closets. Scan your books. Pack everything you own up into boxes. After everything is packed up for two months, everything you haven’t had to unpack to use gets sold. You’re planning on the RV lifestyle anyway, might as well downsize now. If you haven’t used something in two months, you don’t need it. Sell it.
Just to be clear, if you were struggling to keep your head above water, with your bills, my advise would be different. In this case, I would follow Dave’s advise on cutting out all extras (movies, Starbucks, new clothes, etc) and put that money toward getting out of debt. Where we differ would be in the business. He would have you to use the money you get from selling your stuff and also put that towards bills. I want you to invest that money into product, whether that be yard sale finds to sell on eBay or it be used books to sell on Amazon. This money is for you to grow. Do not spend it except on inventory. You may want to keep it separate from regular household funds.
Now comes the hard part. Do you go into debt for an RV and begin your RV lifestyle immediately? This is a much more complicated question that I can’t answer. I can, however, help you think it through.
If you owned your current place, I would be likely to say no. Staying in a place you own is building equity. owning an RV is the exact opposite. It is a depreciating asset. Since you are renting and throwing your money down a bottomless pit anyway, it changes the way I think of your situation.
If you move into an RV, you would still be throwing your money away on lot rent and the rest on an RV payment on a depreciating asset, so the long term result may be financially similar. So what we need to focus on is two questions:
1- Will it be cheaper? It will not be worth doing if it is not significantly cheaper. You will be losing space, making it more difficult to run a business and even live day-to-day. Call around to all the campgrounds that are local to the area you are interested in staying. Ask them about the monthly rates and average electricity bill. Make sure your calculations include extras such as insurance on your new rig. If the difference is significant enough to really help you knock down some debt, DO IT. This extra money goes toward debt and nothing else.
2- Will you be able to buy the RV that you need? If you/your credit is in a position that you can get the RV you need, I’m still comfortable with you making the leap. This is not something you want to do if you will have to buy an older/cheaper/smaller rig than the one you will want once you hit the road. The reason goes back to depreciation. If you have to buy a rig than the one you’ll be hitting the road with, make sure it is at a price that you can easily make back upon selling the rig. This is NOT a place you want to lose money. If you are thinking of a 5th wheel and don’t have a truck, that is not a concern right now. Get someone to move it where you want it and worry about getting a truck in two years when you’re ready to jet.
Overall, there’s one thing to keep in mind. It’s not a good idea to hit the road with debt if you can help it. Hopefully you can use the money you are saving by cutting out things in your life to pay down debt, then use the money you have built up by growing the business to pay off the rig before hitting the road.
There is no foolproof way to tackle this subject with so many variables thrown in. I hope my thinking this situation through in writing has helped you make some of your decisions, but I can’t make them for you. It is impossible for me to fully understand the situation without being in it. It’s even less likely that this game plan is perfectly applicable to the wider audience who may be reading it. Don’t make any decisions just because “Jason told me to,” but use the ideas discussed in this article to help you think through your situation.
Good luck, and see you on the road!