Downsizing life: Family of 4 moving into tiny house

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TinyHouse
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Downsizing life: Family of 4 moving into tiny house

Post by TinyHouse »

Hi Bogleheads,

It’s a pleasure to be here. I’ve been a long time lurker, and have learned a ton from the wiki and forum over the years, and excited to finally make an account here to get your input. Here’s a little bit about my situation and specifics:

Background:
Wife and I have both worked pretty normal jobs over the last 15 years, got married young, traveled and waited to have kids, had tons of fun, didn’t start investing seriously till about 5 to 6 years ago (except we always put something in the 401(k)). Fast forward to now, we have a couple sweet kids, we both worked full-time, and my wife quit her job a few years back. I work remote in IT. The last two years we have realized that our time is short with our kids and we’d like an adventure. We are also interested in a more minimal and simple life, which maybe some of you aren’t interested in, but it fits our taste and goals for life. We also want to move closer to family so that I can take care of my mom whose mind/health is going bad. So we bought a property with cash a year and a half ago, and recently got the utilities set up on it, but it’s mostly just bare land. The location is great, because it’s near my family and near great outdoors activities.

Personal and financial details:
38-year-old male, married with two children (girl 6, girl 8)
Minimal state income tax
About $700,000 in VTI in brokerage account
About $500,000 in the 401(k) all pretax, in a mixture of total international and US funds
A little bit of cash and coins
Other than the plot of land, no real estate
We have no debt
Income is around $200k tc
We currently rented a nice area and our annual spend is about $65k
We have some money set aside for helping girls start a business or go to college
Have term life insurance
Two paid off cars, some other paid off toys
Inheritance will be sizable, but not banking on it

So we are pretty close to 90% equities 10% cash/coins totaling $1.3m nw. This does not include the property and paid off tiny house or education funds.

Future plans:
We decided to downsize and so we are building a tiny house on wheels. It’s pretty sweet and has been a lot of work. Over the last couple years we rented a couple of tiny houses and got a feel of what we like and if it would work for us, and we are really excited. It will be done before the winter, and we plan to move in the spring of 2023. We plan to park it on our land and live there and build a garden and enjoy the slower life. I should be able to get decent enough Internet to continue working and I may just go to the office or Internet café as needed. We plan to do this for 3 to 5 years, but maybe longer, and then build a permanent house. I’m pretty handy so I will probably do this in phases myself and get some help here and there. Plan to keep working for two more years if possible. Might take some time off and then pick up contract gigs later, but I have other income hustles if needed later on if I don’t want to go back to corporate America. I like my job, but I’ve always seen it as just a job and would like a different pace of life. Have some side hustle options. Really excited to focus on the family and being active! Life is too short to continue the rat race for too much longer.

We will spend about $40,000/year living in the Tiny House
Already researched our health benefits, won’t be a problem getting some on the exchange, especially once I quit my job, for now my job has good benefits for us

Questions:
-financially, how are we looking? with inflation, it’s a little scary, but we plan for 3-3.5% withdrawal rate, and I also plan to work for another couple years as needed. My goal is for my income the next couple years to pay for my permanent house
-any thoughts on the plan?

Thanks for all your support, cheers!
Last edited by TinyHouse on Fri Jun 03, 2022 3:33 pm, edited 1 time in total.
London
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Re: Downsizing life: Family of 4 moving into tiny house

Post by London »

This isn’t a financial decision, in my view. You can certainly make it work.

A few things stood out to me as I read the post.

With kids that age, I’m not sure how you’d have any feel for college.

Whenever I think of a tiny house with kids, I always wonder how the parents ever take part in “night time” activities.

Other than that, do whatever feels right.
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BrooklynInvest
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Re: Downsizing life: Family of 4 moving into tiny house

Post by BrooklynInvest »

Impressive and admirable plan!

What others have said. I'd lobby for documenting your ride somehow... will be a really interesting and valuable experience for yourself and perhaps for others. Your asset allocation seems a bit aggressive for my tastes given your needs and timing but you have work flexibility and a couple more years so probably no big.

My take - worst case is you don't like it and reverse course at some point. No permanent damage. Good luck OP!
Wanderingwheelz
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Wanderingwheelz »

I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
daheld
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Re: Downsizing life: Family of 4 moving into tiny house

Post by daheld »

TinyHouse wrote: Mon May 30, 2022 9:42 pm Our girls probably won’t go to college (they seem too entrepreneurial), but we have some money set aside for that or helping them start a business
I am a parent, so I promise you I respect the fact that nobody knows your kids like you do. However, my opinion is that it's entirely too early to know this with any sort of certainty. The only reason I mention this is that if you would like to pay for college, it is going to be a quite substantial sum of money.

Much respect to you for making this move. I always looked sideways at people who did this sort of thing, but after having a kid I always tell my wife, "I get why people would just quit their jobs and raise their kids in the woods." The time is so, so short.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by TomatoTomahto »

Good luck. If you need Internet, Starlink has added a portability option for an additional (iirc) $25/month. I use Starlink only for failover, but have been happy with the uptime and speed for this admittedly pricey option. It’s a game changer for rural folks.
I get the FI part but not the RE part of FIRE.
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Picasso
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Picasso »

The college thing stuck out to me also. Not that the plan is a bad one - I think it sounds great! Not paying for college is one thing, not encouraging it is another.
toomanysidehustles
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Re: Downsizing life: Family of 4 moving into tiny house

Post by toomanysidehustles »

Welcome! With a 17 year old son and 15 year old daughter...not sure how I would swing a tiny house TBH. The kids like more space an space away from parents as they get older...at least ours do! Also, we did save for college and my son (junior) said he has no plans for college (he's more of an entrepreneur like us) so if you can cash flow college when time that might be a better bet and save more for your own retirement. Kinda wish we went that route TBH.

(edit saw the 3-5 year plan on building something bigger)
Last edited by toomanysidehustles on Tue May 31, 2022 7:56 am, edited 1 time in total.
toomanysidehustles
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Re: Downsizing life: Family of 4 moving into tiny house

Post by toomanysidehustles »

Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Didn't go or never graduated? For true entrepreneurs that are business starters, college *might* actually be harmful. Although for those that are going to be managers of existing businesses it may be valuable to have degree. Time is valuable - to spend 4 years+ in school (outside of the market) for minor gains is a bad trade. There can be incremental things that entrepreneurs can learn in college but it is simply not worth the huge time expenditure.
Simply the negatives *might* outweigh the positives for a real entrepreneur when it comes to college.
Wanderingwheelz
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Wanderingwheelz »

toomanysidehustles wrote: Tue May 31, 2022 7:52 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Didn't go or never graduated? For true entrepreneurs that are business starters, college *might* actually be harmful. Although for those that are going to be managers of existing businesses it may be valuable to have degree. Time is valuable - to spend 4 years+ in school (outside of the market) for minor gains is a bad trade. There can be incremental things that entrepreneurs can learn in college but it is simply not worth the huge time expenditure.
Simply the negatives *might* outweigh the positives for a real entrepreneur when it comes to college.
All of the people that come to mind for me achieved at least a BA/BS. I live in a well known coastal resort area and most of the “successful” folks around here are entrepreneurs since the nearest metro area is 2 hours away. If you really wanted to get ahead in life most of us needed to figure out how to do it ourselves.

I agree that few of life’s lessons are learned in a classroom, but I was pointing out that for one reason or another the entrepreneurs that I’m familiar with (including my wife and I) achieved a college degree.

It’s important to bear in mind that almost all small businesses fail. That’s a fact. A college degree is an insurance policy, of sorts if you view it as mostly worthless if you’re not going to go into a traditional career track.
Greentree
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Greentree »

Super cool! I know a big change like this can be scary but with a low spend like you have, and a good chunk to start with, it's pretty tough to get into serious trouble.

I'm sure with your skills, bringing in $20k a year would not be a problem. I do contract engineering work, and compared to working for a company, it is easier mentally (low drama, no boss, etc). With a decent bill rate, you could largely not work and then get a few projects here and there to fill in and you might find that you actually enjoy it when they do come knowing that there's ups and downs. All this is to say that I don't know if it'd be possible with your line of work, but you might look into starting an LLC once you are ready to be done, keeping the same line of work but not working as much. You're not looking to save but to reduce or eliminate the withdrawal.

Also agree that it's too early to know about college. We all know people who didn't plan to go to college but did. I think that not saving for college to buy a fancy car is not admirable, but having a life experience like this and then figuring out how to pay for college later is a fair trade-off.

Please update the thread once you get going.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by CletusCaddy »

Wanderingwheelz wrote: Tue May 31, 2022 8:00 am
toomanysidehustles wrote: Tue May 31, 2022 7:52 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Didn't go or never graduated? For true entrepreneurs that are business starters, college *might* actually be harmful. Although for those that are going to be managers of existing businesses it may be valuable to have degree. Time is valuable - to spend 4 years+ in school (outside of the market) for minor gains is a bad trade. There can be incremental things that entrepreneurs can learn in college but it is simply not worth the huge time expenditure.
Simply the negatives *might* outweigh the positives for a real entrepreneur when it comes to college.
All of the people that come to mind for me achieved at least a BA/BS. I live in a well known coastal resort area and most of the “successful” folks around here are entrepreneurs since the nearest metro area is 2 hours away. If you really wanted to get ahead in life most of us needed to figure out how to do it ourselves.

I agree that few of life’s lessons are learned in a classroom, but I was pointing out that for one reason or another the entrepreneurs that I’m familiar with (including my wife and I) achieved a college degree.

It’s important to bear in mind that almost all small businesses fail. That’s a fact. A college degree is an insurance policy, of sorts if you view it as mostly worthless if you’re not going to go into a traditional career track.
It’s more than an insurance policy. It’s a myth that most successful entrepreneurs do nothing but start businesses.

Most successful entrepreneurs start their ventures later in life, after having accumulated years of experience working in a field. It takes that long to understand the competitive dynamics and value drivers of the field and identify unmet needs that could be better served with a new solution. All of which is to say, experience matters, and college is often a prerequisite to gaining that experience.
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Watty
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Watty »

TinyHouse wrote: Mon May 30, 2022 9:42 pm We plan to park it on our land and live there and build a garden and enjoy the slower life.
Don't underestimate the cost of setting up a legal septic system or sewer connection. It sounds like you already have utilities on the land but the septic system could cost about as much as the cost of the tiny house. Once you start making permanent connections like that you will need to meet the same zoning and code requirements as if you are putting a traditional mobile home on the property.

When I have read about tiny houses many of the people that live in them are sort of "free spirits" who tend to ignore things like permits and building codes but since you want to settle down there you will need to follow them correctly.

I would be curious to hear and understand why you want a tiny house before you build your permanent house instead of building a small cabin or cottage on your land that might be several times the size of a tiny house and more energy efficient too if it is built right. If you were building a small 400 square foot cabin/cottage on the land you could then keep it and expand it when you are ready to build a larger permanent home.

I know that they are cute but the tiny houses that I have seen on the internet all seemed real expensive compared to a traditional small cabin or a RV/Camper trailer.

I don't mean this to sound snarky but I feel like I am missing out on something about tiny houses but I don't "get it" and I am truly interested in their appeal when there seem to be more practical alternatives.
TinyHouse wrote: Mon May 30, 2022 9:42 pm So we are pretty close to 90% equities 10% cash/coins totaling $1.3m nw.
That is way too agressive for someone who expects to retire or semi-retire in a few years.
Last edited by Watty on Tue May 31, 2022 8:37 am, edited 1 time in total.
WhyNotUs
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Re: Downsizing life: Family of 4 moving into tiny house

Post by WhyNotUs »

To me, the key to your plan is that you have a portable job that pays well. That gives you many choices, including this one.

At some point, when you start your permanent home you will need to assess the the delta between the money you can make versus the money you would pay a framer or painter or drywaller to work on that home. You might find that selected tasks are the optimal mix of paid and self construction rather than thinking you will quit and build your home, maybe not.

If it was me, I would target having a home in place when my older daughter turned 12 or 13 at the latest. Taking out a mortgage to get it done sooner is not necessarily bad debt.
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Wanderingwheelz
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Wanderingwheelz »

CletusCaddy wrote: Tue May 31, 2022 8:34 am
Wanderingwheelz wrote: Tue May 31, 2022 8:00 am
toomanysidehustles wrote: Tue May 31, 2022 7:52 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Didn't go or never graduated? For true entrepreneurs that are business starters, college *might* actually be harmful. Although for those that are going to be managers of existing businesses it may be valuable to have degree. Time is valuable - to spend 4 years+ in school (outside of the market) for minor gains is a bad trade. There can be incremental things that entrepreneurs can learn in college but it is simply not worth the huge time expenditure.
Simply the negatives *might* outweigh the positives for a real entrepreneur when it comes to college.
All of the people that come to mind for me achieved at least a BA/BS. I live in a well known coastal resort area and most of the “successful” folks around here are entrepreneurs since the nearest metro area is 2 hours away. If you really wanted to get ahead in life most of us needed to figure out how to do it ourselves.

I agree that few of life’s lessons are learned in a classroom, but I was pointing out that for one reason or another the entrepreneurs that I’m familiar with (including my wife and I) achieved a college degree.

It’s important to bear in mind that almost all small businesses fail. That’s a fact. A college degree is an insurance policy, of sorts if you view it as mostly worthless if you’re not going to go into a traditional career track.
It’s more than an insurance policy. It’s a myth that most successful entrepreneurs do nothing but start businesses.

Most successful entrepreneurs start their ventures later in life, after having accumulated years of experience working in a field. It takes that long to understand the competitive dynamics and value drivers of the field and identify unmet needs that could be better served with a new solution. All of which is to say, experience matters, and college is often a prerequisite to gaining that experience.
That’s not true for the entrepreneurs that I’m familiar with locally. I don’t know what the actual stats are nationally, but my experience tells me that once a person starts a family it becomes harder to abandon a steady paycheck for being self employed. Most new business owners don’t make any sort of substantial income for a number of years after founding their company.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by CletusCaddy »

Wanderingwheelz wrote: Tue May 31, 2022 8:52 am
CletusCaddy wrote: Tue May 31, 2022 8:34 am
Wanderingwheelz wrote: Tue May 31, 2022 8:00 am
toomanysidehustles wrote: Tue May 31, 2022 7:52 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Didn't go or never graduated? For true entrepreneurs that are business starters, college *might* actually be harmful. Although for those that are going to be managers of existing businesses it may be valuable to have degree. Time is valuable - to spend 4 years+ in school (outside of the market) for minor gains is a bad trade. There can be incremental things that entrepreneurs can learn in college but it is simply not worth the huge time expenditure.
Simply the negatives *might* outweigh the positives for a real entrepreneur when it comes to college.
All of the people that come to mind for me achieved at least a BA/BS. I live in a well known coastal resort area and most of the “successful” folks around here are entrepreneurs since the nearest metro area is 2 hours away. If you really wanted to get ahead in life most of us needed to figure out how to do it ourselves.

I agree that few of life’s lessons are learned in a classroom, but I was pointing out that for one reason or another the entrepreneurs that I’m familiar with (including my wife and I) achieved a college degree.

It’s important to bear in mind that almost all small businesses fail. That’s a fact. A college degree is an insurance policy, of sorts if you view it as mostly worthless if you’re not going to go into a traditional career track.
It’s more than an insurance policy. It’s a myth that most successful entrepreneurs do nothing but start businesses.

Most successful entrepreneurs start their ventures later in life, after having accumulated years of experience working in a field. It takes that long to understand the competitive dynamics and value drivers of the field and identify unmet needs that could be better served with a new solution. All of which is to say, experience matters, and college is often a prerequisite to gaining that experience.
That’s not true for the entrepreneurs that I’m familiar with locally. I don’t know what the actual stats are nationally, but my experience tells me that once a person starts a family it becomes harder to abandon a steady paycheck for being self employed. Most new business owners don’t make any sort of substantial income for a number of years after founding their company.
One of many articles

https://knowledge.wharton.upenn.edu/art ... epreneurs/
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Re: Downsizing life: Family of 4 moving into tiny house

Post by humblecoder »

It's amusing to me that this thread is now dominated by reactions to a throwaway comment about college and entrepreneurship! I am going to do something radical and actually try to answer the OP's actual question :-)

"Financially, how are we looking"

A couple things stand out to me. First, you are highly invested in equities. If you are going to now be entering your withdrawal phase soon, you might want to consider whether this asset allocation matches your risk tolerance.

Second, you mention that you will need $40K/year for living expenses in your tiny house. But you say that you desire a 3-3.5% withdrawal rate. Obviously, that math works if you have $1.3M. You say that you have included health care, but what about taxes? With most of your money in pretax 401k, you still need to pay taxes on that.

Third, about that 401k, obviously being younger than 59.5, you'll be subject to the 10% penalty. However, you might want to consider some sort of Roth conversion ladder to avoid the penalty, if you need to access your 401k money.

Fourth, you mention building a permanent house in the next 3-5 years. What will your expenses be once you are living in this (presumably) larger house. I've got to imagine that it will be greater than the $40K you intend to spend in the tiny house. Need to take that jump in to expenses into consideration.

Finally, since it sounds like you have some flexibility to pick up additional work here and there, that provides you with some level of safety should you need additional income. But keep in mind that if you need the additional income, it could be because of a market correction, which could mean a bad economy, which could mean that your ability to pick up additional work may also be impacted.
mr_brightside
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Re: Downsizing life: Family of 4 moving into tiny house

Post by mr_brightside »

would never do that.

first off -- at 6 and 8 you have no idea yet how your kids' interests will change.

second -- people need space. we go camping -- its fun. but living on top of one another long-term will likely cause un-needed 'friction' over time. (not that you need a 5,000 sq ft house to be happy but there's a minimum that is desirable)

third -- consider the 'isolation' of the kids as they hit pre-teen and teen years. that's when they really start wanting to do things outside the family 'sphere', developing new friends, some independence, activities, etc.

but good luck whatever you decide -- i realize you mention its not a permanent proposition

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hoofaman
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Re: Downsizing life: Family of 4 moving into tiny house

Post by hoofaman »

Why is the size of the housing structure mentioned, but no mention of land value?

A tiny house in SF Bay area costs $2-3m
A 3 bedroom home in Iowa costs 150k
Californiastate
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Californiastate »

Children grow up fast. That cozy house with a wife and 2 young daughters sounds quaint. Fast forward to living in that same home with 3 women and you're the sole male. Fences make great neighbors and space makes a happy family.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Gnirk »

Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
I know some very successful entrepreneurs who didn’t go to college. And who are happily retired.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by CRC_Volunteer »

Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Off the top of my head, they attended but never graduated: Bill Gates, Larry Ellison and Mark Zuckerberg.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by KlangFool »

TinyHouse wrote: Mon May 30, 2022 9:42 pm
We have no debt
Income is around $200k tc
We currently rented a nice area and our annual spend is about $65k

We will spend about $40,000/year living in the Tiny House
TinyHouse,

Your numbers do not add up.

1) Your house/rent is not the major part of your annual expense. So, living in a tiny house would not down size anything.

2) If you quit your job, your medical expense/insurance should be higher.

3) If you have no debt and still spend 65K/40K per year, you are spending a lot of money on something else.

4) It is your money and you get to choose how to spend it. But, you probably should get a better handle as to where you spend your money. Then, you would know whether 40K per year is realistic.

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Re: Downsizing life: Family of 4 moving into tiny house

Post by randomguy »

Gnirk wrote: Tue May 31, 2022 10:04 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
I know some very successful entrepreneurs who didn’t go to college. And who are happily retired.
In my limited experience, the people who start lawn care business didn't go to college. The ones who started internet startups did. I think predicting the path for a 6 or 8 year old is madness. I think expecting an 18 year old to have the capital, network, and knowledge to start up a profitable business is a very rare thing. But college also doesn't have to be that expensive. Sure you aren't paying for a 60k/year private school but the local school where you kid lives at home is probably only 10-15k/year. Some tax credits, some summer jobs, and a few loans and you kid can do it. And odds are you portfolio will be big enough in 10 years that you can kick in a few bucks...

As far as a tiny house, the percentage of people that only make it a year or two is really high. It is one thing to live in one for a couple weeks. It is another to spend 6 months. You can read/watch all the failure cases but it is always hard to figure out if they apply to you. I am not sure I get the rational for not just building the permanent structure now? Other than zoning law hacking building a small ( say 600-1000 sq ft) house always seemed to make more sense.

At 40k spend, the two of you can always get jobs at McDonalds to make ends meet. You can debate taking on that type of risk versus working another year or two forever.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by muffins14 »

Gnirk wrote: Tue May 31, 2022 10:04 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
I know some very successful entrepreneurs who didn’t go to college. And who are happily retired.
These are cases of something like representation bias. Just because a person knows 1-5 people that have done thing X does not mean that thing X is the norm.

I’m sure that more than zero people have become a “successful entrepreneur” without going to college, but I’m sure way more have become successful with college, and I’m sure far more people have stable jobs after college working for a company rather than building their own business, and I’m even more sure that no one knows that a 6-8 year old has so much intrinsic talent that college is a “bad idea” for them because it will waste 4 years of their lucrative sure-fire business plan

I think it’s a good thing to encourage education, likely including college
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KlangFool
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Re: Downsizing life: Family of 4 moving into tiny house

Post by KlangFool »

Folks,

I come from a multi generational business family. 50% of my extended family is in one form of business or another. There are many self-made millionaires across multiple education and income levels in my family.

A) Folks within my family learn about doing business just by osmosis.

B) We actively discourage our children to go into business. Only those that cannot succeed by normal path would go into business.

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Re: Downsizing life: Family of 4 moving into tiny house

Post by hi_there »

College education is a fallback. Entrepreneurship is not for everyone. I don't think you want to discover this later, and not have a degree that qualifies you for plan B. Anyway, college is supposed to help you decide on a career path, make connections, and mature intellectually. This is all true, and valuable, if you approach education productively.

Anyway, regarding financials, looks like tiny house plan is fine, and you can figure out in 3-5 years whether you're really going to retire then. Circumstances will change. You will be over/under your portfolio projected performance. Your career might be different. What you want for yourself and your family financially might also change. Good luck.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by LittleMaggieMae »

TinyHouse wrote: Mon May 30, 2022 9:42 pm
Our girls probably won’t go to college (they seem too entrepreneurial), but we have some money set aside for that or helping them start a business.

-any thoughts on the plan?

Thanks for all your support, cheers!
I think your plan is good. half the battle for achieving what one wants in life is having a thought out plan.

TLDR; don't assume that additional training or courses or certifications will NOT be necessary for our daughters after HS - even if they start their own business. Also don't discount the value of low level business type courses (usually part of a AA degree from a Jr. College) being of value to a young entrepreneur.

As a woman - I'd make darn well sure my daughters had some sort of a 'degree' that preps for a work place - even it's a Associates Degree from a local jr. college. I wouldn't want my mid 20's daughter to have to figure out how to work 40 hours a week at some dead end job , maybe take care of their home and husband (yes, I'm jaded - my experience is men don't do 'housework' and if someone else will make sure their stuff (laundry, food, calendar, etc) is in order they won't do it themselves) AND go to "night school" and do well to get a degree (even an AA from a jr. college).

The only thing I say is don't assume your kids won't need some sort of college education. It might be at the Jr. College level OR some sort of a certificate program and there are expenses involved in that.

OK, my sibling is in his 60's - but he's the only one of us to not get a formal 4 year degree. He's got a stack of certificates from a career lifetime of having to get training/take tests that were NOT always paid for by his employer.

I have friends who also have had to take courses/training that wasn't specifically "college" and that takes time and a surprising amount of money.

Don't assume that because your kids won't be going to college they won't need to spend money on training/courses.

Also be aware that your kids will have to rely on the jr college or college educated to help run their business.

I'm thinking accounting, marketing, business administration, some types of Business IT survey courses, and the connection to others at even the Jr. College level would benefit a 19 year old who wants to start and run their own business.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by galawdawg »

OP...

Whatever you do, please come back after you and your family have lived in this tiny house for a year and let us know about your experience and perspective after some time and the novelty has passed.

Personally, I have contemplated purchasing a tiny house and a nice parcel of land in the mountains for a vacation spot but couldn't not envision just my wife and I spending more than a week at a time there and certainly couldn't envision having kids there too!

Hope that your plans work out and that you and your family enjoy the adventure! :beer
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Re: Downsizing life: Family of 4 moving into tiny house

Post by LittleMaggieMae »

I like the idea of living in a small house.

The thing about tiny houses is they are short term and there's all sorts of daily, weekly, monthly, seasonal routines/maintenance you need to do. Propane, water, a generator for electricity.

I suspect "upkeep" is an on going expense and a daily/weekly set of chores if it doesn't have a water/sewer hookup.

I'd almost rather have a small house (600 sqft or less) on a foundation with a well and septic/sewer connection. And possibly a connection to city electricity.

I get the 'coolness' of a Tiny mobile House. And get wanting the experience of living in one for some period of time. I don't see them as a "forever" kind of thing though - it's not something you can plan to "pass down" to the next generation like a cabin/land in the woods/on a lake.

Nothing wrong with a Tiny House or living in one. They are just a "different life path" kind of thing. :)
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Re: Downsizing life: Family of 4 moving into tiny house

Post by baldtaxguy »

OP - I wish you the best of luck.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by WhyNotUs »

There are lots of ways to live. A friend spent 8 months on a sailboat with wife and 8 year old and lived through a hurricane. Another did the same with two young girls. The space on the boat is about the same as a tiny home.

Other people live in RVs.

I grew up in a family of 6 in a 3/1 with 950 sf.

It is good that some people know it is not for them but does not respond to the original request. The OP says that a larger house is in the plan. They have the resources to move that schedule forward if they decide it is not working. Life is an adventure.....
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Re: Downsizing life: Family of 4 moving into tiny house

Post by sailaway »

My niece lives in a self build tiny home. We live on our sailboat. So I have no problem with the tiny home thing. Even better, you have a plan that can be moved forward this doesn't work so well for your family.

It sounds like you are keeping your job for the time being. That will give you a chance to see how well your budget projections play out. That is personally my biggest concern whenever we switch lifestyles: how well did we predict the changes?!

So, in my mind, you have a very reasonable plan, with fallbacks built in. Great!
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Wrench »

Wanderingwheelz wrote: Tue May 31, 2022 8:00 am
toomanysidehustles wrote: Tue May 31, 2022 7:52 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
Didn't go or never graduated? For true entrepreneurs that are business starters, college *might* actually be harmful. Although for those that are going to be managers of existing businesses it may be valuable to have degree. Time is valuable - to spend 4 years+ in school (outside of the market) for minor gains is a bad trade. There can be incremental things that entrepreneurs can learn in college but it is simply not worth the huge time expenditure.
Simply the negatives *might* outweigh the positives for a real entrepreneur when it comes to college.
All of the people that come to mind for me achieved at least a BA/BS. I live in a well known coastal resort area and most of the “successful” folks around here are entrepreneurs since the nearest metro area is 2 hours away. If you really wanted to get ahead in life most of us needed to figure out how to do it ourselves.

I agree that few of life’s lessons are learned in a classroom, but I was pointing out that for one reason or another the entrepreneurs that I’m familiar with (including my wife and I) achieved a college degree.

It’s important to bear in mind that almost all small businesses fail. That’s a fact. A college degree is an insurance policy, of sorts if you view it as mostly worthless if you’re not going to go into a traditional career track.
I am a HUGE proponent of higher education, but there a lots of successful people who never attended college or dropped out. Top of the list: Bill Gates. And then Ted Turner, Anna Wintour, Ellen DeGeneres,Larry Ellison, etc. etc. Every child and person is different, and who knows what the world will look like in 10-15 years. College may not be the ticket to success it has been for baby boomers. As long as OP encourages the children to pursue their dreams including college if they so desire, more power to him!

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Re: Downsizing life: Family of 4 moving into tiny house

Post by stoptothink »

LittleMaggieMae wrote: Tue May 31, 2022 11:58 am

As a woman - I'd make darn well sure my daughters had some sort of a 'degree' that preps for a work place - even it's a Associates Degree from a local jr. college. I wouldn't want my mid 20's daughter to have to figure out how to work 40 hours a week at some dead end job , maybe take care of their home and husband (yes, I'm jaded - my experience is men don't do 'housework' and if someone else will make sure their stuff (laundry, food, calendar, etc) is in order they won't do it themselves) AND go to "night school" and do well to get a degree (even an AA from a jr. college).
This thread is going in all kinds of unwanted directions...so I'll add. Completely 100% agree with the first part. Even if my daughter intends to be a SAHM, she is going to school and developing skills that are valuable in the workforce. It is important for everyone to develop their own identity, independent of their significant other. Too many examples in my circle of women who were dependent on a husband and it bit them in the butt. That being said, our culture is evolving; I am definitely not the only man around here who does the large majority of "housework" in their home. A partner will carry their weight if you demand that they do.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by mnnice »

You guys are in great financial shape to do something like this. Although I didn’t see any reference to our climate. The more ideal the climate the more appealing a tiny house is going to be. It will work because there are other places to be.

I would consider a travel trailer or fifth wheel over an actual tiny house because it’s more flexible and you can still use it for camping or sell it later. Not as HGTV or insta worthy but probably more cost effective.

We are semi retired and have been ~ eight years and currently have a 17 yo and. 20 yo. Our low income combined with some early 529 savings has made it relatively pain free to get the elder child through is 5 semester long associates degree. He wants to run his own business but needs a mid six figures of equipment to do it. He is going to have to work for someone else first. The younger one is earlier in the process and how expensive that will be is still an unknown.

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Re: Downsizing life: Family of 4 moving into tiny house

Post by Apathizer »

LittleMaggieMae wrote: Tue May 31, 2022 11:58 am As a woman - I'd make darn well sure my daughters had some sort of a 'degree' that preps for a work place - even it's a Associates Degree from a local jr. college. I wouldn't want my mid 20's daughter to have to figure out how to work 40 hours a week at some dead end job , maybe take care of their home and husband (yes, I'm jaded - my experience is men don't do 'housework' and if someone else will make sure their stuff (laundry, food, calendar, etc) is in order they won't do it themselves) AND go to "night school" and do well to get a degree (even an AA from a jr. college).

The only thing I say is don't assume your kids won't need some sort of college education. It might be at the Jr. College level OR some sort of a certificate program and there are expenses involved in that.
While it's important to develop practical, job-related skills, there are many paths to those. Getting practical training is the key, not just 'get a degree'. There are many of us with BAs who've never used them in work. This isn't to say I think no one should do it, but it isn't always the right path, and if someone goes the 4-yr route it important to get a practical degree.

In many cases a skilled-trades apprenticeship or, yes, a 1-2 year program for an associates degree might be a better option.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Yarlonkol12 »

What is the value of the land your tiny house sits on?
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Re: Downsizing life: Family of 4 moving into tiny house

Post by exodusNH »

TinyHouse wrote: Mon May 30, 2022 9:42 pm Hi Bogleheads,

It’s a pleasure to be here. I’ve been a long time lurker, and have learned a ton from the wiki and forum over the years, and excited to finally make an account here to get your input. Here’s a little bit about my situation and specifics:

Background:
Wife and I have both worked pretty normal jobs over the last 15 years, got married young, traveled and waited to have kids, had tons of fun, didn’t start investing seriously till about 5 to 6 years ago (except we always put something in the 401(k)). Fast forward to now, we have a couple sweet kids, we both worked full-time, and my wife quit her job a few years back. I work remote in IT. The last two years we have realized that our time is short with our kids and we’d like an adventure. We are also interested in a more minimal and simple life, which maybe some of you aren’t interested in, but it fits our taste and goals for life. We also want to move closer to family so that I can take care of my mom whose mind/health is going bad. So we bought a property with cash a year and a half ago, and recently got the utilities set up on it, but it’s mostly just bare land. The location is great, because it’s near my family and near great outdoors activities.

Personal and financial details:
38-year-old male, married with two children (girl 6, girl 8)
Minimal state income tax
About $700,000 in VTI in brokerage account
About $500,000 in the 401(k) all pretax, in a make sure of total international and US funds
A little bit of cash and coins
Other than the plot of land, no real estate
We have no debt
Income is around $200k tc
We currently rented a nice area and our annual spend is about $65k
Our girls probably won’t go to college (they seem too entrepreneurial), but we have some money set aside for that or helping them start a business
Have term life insurance
Two paid off cars, some other paid off toys
Inheritance will be sizable, but not banking on it

So we are pretty close to 90% equities 10% cash/coins totaling $1.3m nw. This does not include the property and paid off tiny house or education funds.

Future plans:
We decided to downsize and so we are building a tiny house on wheels. It’s pretty sweet and has been a lot of work. Over the last couple years we rented a couple of tiny houses and got a feel of what we like and if it would work for us, and we are really excited. It will be done before the winter, and we plan to move in the spring of 2023. We plan to park it on our land and live there and build a garden and enjoy the slower life. I should be able to get decent enough Internet to continue working and I may just go to the office or Internet café as needed. We plan to do this for 3 to 5 years, but maybe longer, and then build a permanent house. I’m pretty handy so I will probably do this in phases myself and get some help here and there. Plan to keep working for two more years if possible. Might take some time off and then pick up contract gigs later, but I have other income hustles if needed later on if I don’t want to go back to corporate America. I like my job, but I’ve always seen it as just a job and would like a different pace of life. Have some side hustle options. Really excited to focus on the family and being active! Life is too short to continue the rat race for too much longer.

We will spend about $40,000/year living in the Tiny House
Already researched our health benefits, won’t be a problem getting some on the exchange, especially once I quit my job, for now my job has good benefits for us

Questions:
-financially, how are we looking? with inflation, it’s a little scary, but we plan for 3-3.5% withdrawal rate, and I also plan to work for another couple years as needed. My goal is for my income the next couple years to pay for my permanent house
-any thoughts on the plan?

Thanks for all your support, cheers!
6 and 8 are far, far too young to make any sort of assessment of their futures. You can't even make that assessment at 18.

How tiny is tiny? 4 people on top of each other sounds like it's going to cause a lot of strife, especially as the girls enter the tween / teen years. Even if they get along perfectly now, that's not guaranteed to continue, especially with the upcoming hormonal changes.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by halfnine »

Anyone with 1 million can certainly make a go at a different adventure. Best of luck. This family with 2 daughters (a little bit older than yours) are doing a similar thing and are a fewer years ahead with the plan.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by ILnative »

One question I will ask is how safe is the tiny house in case of natural disaster. As someone who grew up in Tornado country - no way I would want to be in a house on wheels (otherwise known as a trailer!) in a wind storm or tornadic weather. This may not be an issue for you though.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by alfaspider »

The idea that you could tell at age 6 that someone is "too entrepreneurial" for college seems a bit strange. My 5-year old has, within the last month, told me that he wants to "study dinos", "do construction" and be a "tax lawyer" when he grows up (the latter idea I'm sure only because of his dad's career).

I'd also posit that many of those famous dropout entrepreneurs still benefitted immensely from having gone to college for even a relatively short time. Don't forget that Zuckerberg's initial team were all the folks he met at Harvard. He likely benefitted immensely from the Harvard brand name and the extended connections of the folks he and his team met there. Most of those famous dropouts only did so to seize what they (correctly) recognized to be a very unique opportunity. They didn't just drop out because they didn't like college or weren't seeing the value generally.

To each their own on the tiny house thing, but It doesn't sound like a long-term plan (even in your estimation). At the moment, it sounds like all you are doing is downsizing spend by moving into a smaller accommodations. Nothing wrong with that if you are happy with the accommodations. But I think you are a ways away from a comfortable "FIRE" type experience under that living arrangements. There's just no room for significant contingencies there.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by MindBogler »

TomatoTomahto wrote: Tue May 31, 2022 7:36 am Good luck. If you need Internet, Starlink has added a portability option for an additional (iirc) $25/month. I use Starlink only for failover, but have been happy with the uptime and speed for this admittedly pricey option. It’s a game changer for rural folks.
Any issues with uptime of the Starlink service? Does it suffer from any problems like rain fade on traditional satellite connections? I'm considering a move out into rural areas but after having 1gbps service it'd be hard to go back to anything with high latency or less than 100mbps.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Monsterflockster »

OP, my only thought here is to plan for the future, now necessarily the present. 3-5 years from now when you have an 11 & 13 year old they may not think the tiny house life is cool. You’re excited, but are they?
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Re: Downsizing life: Family of 4 moving into tiny house

Post by MindBogler »

Monsterflockster wrote: Tue May 31, 2022 4:59 pm OP, my only thought here is to plan for the future, now necessarily the present. 3-5 years from now when you have an 11 & 13 year old they may not think the tiny house life is cool. You’re excited, but are they?
+1

I can only speak to my own experience, but by the time your girls reach adolescence they are not going to want to hang around with you in close quarters all the time. I've seen many parents go through growing pains from ~13-18 y/o where living in arms length will be intolerable for everyone in your family.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by JoeRetire »

TinyHouse wrote: Mon May 30, 2022 9:42 pm Our girls probably won’t go to college (they seem too entrepreneurial)
At their ages, I don't understand how you could conclude that.
-financially, how are we looking? with inflation, it’s a little scary, but we plan for 3-3.5% withdrawal rate, and I also plan to work for another couple years as needed. My goal is for my income the next couple years to pay for my permanent house
-any thoughts on the plan?
Hard to tell. At 40 you are facing a 50+ year retirement period.
Have you estimated your expenses in retirement?

I don't think I understand the interim tiny house. (I'm not a fan of the "starter home" concept and this seems like an even worse twist on that) With growing children and working from home, why not just build a permanent house? Do you expect to be able to sell the used tiny house?

For me, I can't imagine working from home in a tiny home with a wife and two children.
Last edited by JoeRetire on Tue May 31, 2022 6:27 pm, edited 3 times in total.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by LilyFleur »

I was a teacher (although not working full-time when my children were younger). I felt it was a worthwhile financial investment to have a home large enough to host play dates after school, get-togethers on the weekends, and birthday parties. I was able to know that my children were safe, I was able to observe their social development as I saw them playing with friends, and thus I was able to coach them afterwards on how to be a friend and how to treat others.

I like the idea of a tiny house, though. I live in a small condo currently and it is just fine for me.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Mako »

+1 to maybe your kids won't be able to stand being around you in a couple years. A tiny house doesn't leave a lot of room. I am downgrading from 3200 to 2300 sq ft and I am concerned but hoping for the best, just be aware of the possible issues. A lot of times teenagers are tough.

Also +1 to you have no idea what a 6 year old and an 8 year old might think about college. My 10 year old was completely different than he was at 6, and I assume he will also be completely different at 14 and 18. You gotta keep an open mind with kids.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Gnirk »

muffins14 wrote: Tue May 31, 2022 10:50 am
Gnirk wrote: Tue May 31, 2022 10:04 am
Wanderingwheelz wrote: Tue May 31, 2022 7:27 am I know quite a few successful entrepreneurs and I’m struggling to come up with one who didn’t go to college.
I know some very successful entrepreneurs who didn’t go to college. And who are happily retired.
These are cases of something like representation bias. Just because a person knows 1-5 people that have done thing X does not mean that thing X is the norm.

I’m sure that more than zero people have become a “successful entrepreneur” without going to college, but I’m sure way more have become successful with college, and I’m sure far more people have stable jobs after college working for a company rather than building their own business, and I’m even more sure that no one knows that a 6-8 year old has so much intrinsic talent that college is a “bad idea” for them because it will waste 4 years of their lucrative sure-fire business plan

I think it’s a good thing to encourage education, likely including college
I’m quite sure these entrepreneurs are from the generation where many couldn’t afford to go to university, but learned through OJT before branching out on their own, risking just about everything, to develop, grow and expand to become very successful businesses. Several of their business models were copied by larger publicly-traded businesses in the same industry.
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Re: Downsizing life: Family of 4 moving into tiny house

Post by Gnirk »

Gnirk wrote: Tue May 31, 2022 6:34 pm
muffins14 wrote: Tue May 31, 2022 10:50 am
Gnirk wrote: Tue May 31, 2022 10:04 am [quote=Wanderingwheelz post_id=6703277 time=1654000061 user_id=

I know some very successful entrepreneurs who didn’t go to college. And who are happily retired.
These are cases of something like representation bias. Just because a person knows 1-5 people that have done thing X does not mean that thing X is the norm.

I’m sure that more than zero people have become a “successful entrepreneur” without going to college, but I’m sure way more have become successful with college, and I’m sure far more people have stable jobs after college working for a company rather than building their own business, and I’m even more sure that no one knows that a 6-8 year old has so much intrinsic talent that college is a “bad idea” for them because it will waste 4 years of their lucrative sure-fire business plan

I think it’s a good thing to encourage education, likely including college
The entrepreneurs I know are from the generation where many couldn’t afford to go to university, but learned through OJT before branching out on their own, risking just about everything, to develop, grow and expand to become very successful businesses. They were ambitious, dedicated, and persevered through the rough times, adapting their business models accordingly. Several of their business models were copied by larger publicly-traded businesses in the same industry.
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