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Idiot Millionaire sells house – not stocks, this time

Posted by on Aug 7, 2012 in Investments, Moneyville, Quality of Life | 0 comments

Read this blog and comments on moneyville
August 7, 2012

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Derek Foster with his wife Hyeeun Park and two sons in this 2009 file photo.

TOBIN GRIMSHAW/STAR FILE PHOTO

Many of us dream of selling everything and taking a year off to travel, but few of us are prepared to take the risk. That’s just what Derek Foster, the self-styled Idiot Millionaire and author of six  personal finance books has done. This spring, he sold his Ottawa home and took his wife and five children on the road for a year-long pan-North American adventure.

Foster retired from the rat race at age 34 to live  off his investments and his speaking and writing career. One of his worst  moves was selling his $500,000 portfolio about month before the market bottom in March 2009. In spite of this market timing fiasco, he’s fully invested again and says his holdings are worth more than ever.

Related: This man admits he’s an idiot millionaire

Foster decided to sell the house instead of renting it, because with prices high and interest rates low, it made more sense to him than becoming an absentee landlord. He plans to invest the proceeds from his home as opportunities arise.

Foster says he is not worried about being priced out of the Ottawa housing market when he returns, although he readily admits that he has been wrong before.

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I asked him why now was the right time to pack his seven-member family into an SUV towing a 31-foot camping trailer and follow the sun. He told me that it’s something he and his wife have always wanted to do, mainly because they want to spend more time with the kids. “The oldest is 12 now, and as any parent knows, as kids get into their teen years they aren’t so much interested in doing things with Mom and Dad.”

Foster figures he can live for the same or less than the $40,000/year that supported his family in Ottawa.  Camp sites cost around $300 a  week including utilities and he plans to avoid winter  by heading for the southern U.S. in the fall.

Foster isn’t interested in tech toys. He doesn’t have a cell phone and personal communications are conducted via  Internet and Skype using free Wifi at campsites, coffee shops and libraries.

The children are being home- schooled for the duration of the trip. This is the one aspect of their travels that Foster is still a little nervous about. “The school day is typically about six hours long but a lot of that time is wasted on opening exercises, lunch and recess. At the last campsite we’d start the day with a swim and then do about an hour and a half of teaching. We’ll see how that goes.”

Related: Buy and hold investing guru sells all he has

With one month of travel under his belt,  Foster says he loves the carefree lifestyle, but admits that seven people living in a confined space can be a challenge, particularly in bad weather.

Should you take the plunge? You bet says Foster. “I’ve met lots of seniors who are seasonal residents in campsites we visited and they say the lifestyle is cheaper than they originally thought. In many cases they wish they had made the decision sooner before health and other issues got in the way.”

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