Realistic Income Requirements

[everett]

What sort of income, realistically, would a couple with one child have to bring in to live comfortably on a rural piece of land of about 10 acres under the following circumstances:

$200,000 mortgage - 20% down - 6% interest
1 Child
Grow and put away most of our vegetables
Have to buy most of our fruit
Grid-tied, but energy costs minimal due to solar panels
Well water
Two goats - all of our milk needs
Chickens - all of our egg needs in summer. Have to buy in winter.
One newer truck and one newer car - 100% paid for
$300 per month in student loan payments
No credit card debt
Health insurance costs for self-employed family of three ($500 month?)
Car insurance costs ($50-$75 month for two)

There are all kinds of expenses that I haven't even thought of I'm sure.

I'm not asking for exact numbers or anything but - based on your experience - what would we have to make from our work-from-home businesses to live comfortably (as in enough to pay the bills, save a hundred a month and have enough left over for a night at the bar, movies or pizza now and then)?

[J-jay]

To be comfortable $50k.

[mldrenen]

what you just described requires a minimum of $30k. that does not include any food that you might need to purchase, out of pocket health care costs, clothing, car repairs, fuel, taxes (if you are self-employed, you are aware how burdensome those can be).

there are many, many variables that have to be factored in. $50k in some areas of the country can be stretched much farther than others.

[everett]

Thanks.

I know there are a lot of extra expenses and variables. Rather than list them all out (and I'd definitely miss a few - cable or sat. internet access for example) I'm just asking for a ballpark figure would be if all of those extra expenses are "average".

So it sounds like $25k each before taxes if both me and my wife are self-employed and working from home?

We wold be in North Carolina mountains (so far we've been looking mostly in Madison, CO).

[Cabin Fever]

Originally Posted by J-jay

To be comfortable $50k.

I'd go a little higher than that.

"They" (whoever "they" are) say that your mortgage payment should be about 25% of your gross income. 180K @6% for 30 years is $1080/mo (not including property taxes or homeowners insurance). If you follow "thier" advice, you'd need an annual income of $52K. Personally I'd add another 10%to 15% to this for retirement savings, rainy day savings, and college savings....making a goal of $57 to $60K per year.

[Mo-Town]

Everett:

Assuming you went with a traditional 30 year fixed mortgage, your payments on the mortgage alone would be $959 per month. To this you would need to add 1/12 of your yearly property tax (don't know how CO calculated property taxes, but in many states, it is a fixed percentage of the home's value). You would also need to add 1/12 of your annual homeowner's insurance premium. You're probably looking at $1,300-$1,400 a month just to cover this cost.

Based on this, the $30k per year number previously provided is probably a pretty good benchmark. You may be able to get by with less on paper, but I've found life is much easier when you overestimate your expected costs and underestimate your anticipated income. Good luck!

[mldrenen]

Originally Posted by everett

So it sounds like $25k each before taxes if both me and my wife are self-employed and working from home?

have you been self-employed yet? you may find yourself paying, realistically, $10k-$15k of that $50k toward taxes. now you're back down to $35k in money available to live on. will that be enough?

[Jim S.]

$50-60 k, you would be able to live comfortably but not ostentatiously. You would live better in the city on $50-60K, as far as creature comforts and conveniences (but not lifestyle).

Please don't think you will make $50-60K off 10 acres farming (or "homesteading"), and resist the Joel Salatin types who tell you that you can do that while they make most of their own cash off-farm doing lectures and selling books. Joel's calculator is wacky. He does say in his books how many long hours it will take to get $25,000 (gross, mind you, not net!) and all, but he disconnects the facts enough so as not to pop the dream bubble.

If you have city jobs and 10 acres you play with, that'll work. Plus you hopefully will have health insurance and bennies, a big plus. But farming of any kind is an extremely low return on investment enterprise that takes years to develop. That is why only 2% of US citizens are farmers.

Just so you know my experience, I have been farming 25 acres for 18 years, and helped at my FIL's place of 350 acres before that. I have seen so many dreamy back to the landers come out all starry-eyed and lose their shirts, it ain't funny. They leave broke financially and emotionally because they didn't do their homework, just followed the gauzy dream. So I started popping bubbles as a public service. BE REALISTIC. Keep your day jobs. It takes a hard nose and sharp pencil to live a farming (or "homesteading") life. That's why most folks only dream of it and don't act on it.

The lifestyle is awesome, but it is a lot of work and you will need the extra cash from jobs. If a guy in Iowa combining 2,000 acres has to drive truck to make ends meet, what's that tell ya? If a gal in Kansas needs 400 livebirths out of a herd of 420 cows to make $25,000 net for the farmhouse's use, what does that tell ya? All the "wealth" is tied up in the land and equipment and seed and stock.

[mldrenen]

Originally Posted by Cabin Fever

If you follow "thier" advice, you'd need an annual income of $52K. Personally I'd add another 10%to 15% to this for retirement savings, rainy day savings, and college savings....making a goal of $57 to $60K per year.

those figures sound a little more healthy to me.

[everett]

Thanks for your advice everyone!

Originally Posted by mldrenen

have you been self-employed yet? you may find yourself paying, realistically, $10k-$15k of that $50k toward taxes. now you're back down to $35k in money available to live on. will that be enough?

Yes I've been self employed before and know the taxes can be a killer, especially if you're not diligent about keeping receipts.

Jim S. I have no intention of completely "living off the land" or making any money from our land. I want to grow most of my own food because I don't trust the crap they sell in grocery stores. I want to live in the country and work from home because I can't take one more year of daily traffic james during my 1-hour commute to work each way, neighbors who can see into every window in my house, and laws that say I can't have a couple of hens in my backyard. I want to wake up and go milk the goat and feed the chickens while my wife makes breakfast. Then sit down at my home office desk in a robe and slippers with a cup of coffee, work until noon, have lunch, work the garden.... etc. As you can clearly see, I'm not expecting to live a HARDCORE homesteading life and I'm being honest with myself about that. While my "dreams" may be a little too "dreamy" the lifestyle goals have been mine for as long as I can remember. I have absolutely NO interest what-so-ever in living to work or keeping up with the Jones', or working more so I can buy more crap that I don't need so I can enjoy myself because I work too much buying crap that I don't need in an endless cycle.

We can make money by telecommuting but the question is How Much?


In terms of income, all of that will come over the internet. I do online marketing and my wife does graphic design. I currently have about $28,000 coming in from my own websites (not counting my full time job, which I'd have to give up) and my wife doesn't have any (because she just works a full time job and doesn't have side projects). So I'm trying to figure out how much MORE I'd have to make from my own projects from home and how much she'd have to make. Can my wife make $25,000 a year doing graphic design from home? I don't know, but it sounds like that's the question I need to be asking her.

Thanks again everyone!

[Nevada]

If you have $40K to put down then you have enough to relocate to a place where you can get land inexpensively and have a place to live for cash. Without needing to service a $200,000 mortgage you can live on a lot less, and have the security of never being homeless under any circumstances. I would think very carefully about taking on new debt in the face of a depression, regardless how how secure you think your employment might be.

[Mo-Town]

Yeah. After rereading the original post, I think I agree with the $50K-$60K suggestion.

If you aren't currently self-employed, I would recommend keeping the day job. In addition to the points Jim raised, it is much tougher for self-employed people to get a home loan, and health insurance is usually cheaper when you get it through your employer.

[plowjockey]

What you have alrealy listed, will run you over $25,000 per year in payments alone.

Perosnally I would sit down and tally up all realistic cost before deciding.

[Jim S.]

Originally Posted by everett

Jim S. I have no intention of completely "living off the land" or making any money from our land. I want to grow most of my own food because I don't trust the crap they sell in grocery stores. I want to live in the country and work from home because I can't take one more year of daily traffic james during my 1-hour commute to work each way, neighbors who can see into every window in my house, and laws that say I can't have a couple of hens in my backyard. I want to wake up and go milk the goat and feed the chickens while my wife makes breakfast. Then sit down at my home office desk in a robe and slippers with a cup of coffee, work until noon, have lunch, work the garden.... etc. As you can clearly see, I'm not expecting to live a HARDCORE homesteading life and I'm being honest with myself about that. While my "dreams" may be a little too "dreamy" the lifestyle goals have been mine for as long as I can remember. I have absolutely NO interest what-so-ever in living to work or keeping up with the Jones', or working more so I can buy more crap that I don't need so I can enjoy myself because I work too much buying crap that I don't need in an endless cycle.

That's great! You are more than halfway to the attitude it takes to make a real longterm go of it. I think it may work for you, though it probably won't be as rosy as you describe. Still, the lifestyle cannot be beat, even as much work as it is.

Be sure you cover the health insurance angle. One serious illness can wipe you out entirely. And make sure as you go along in the lifestyle to always remember you will never be this young again, and to plan for the old age that will come, in terms of your how you do your farming or homestead, and your finances.

I am familiar with NC and you can pretty much bank on $50-60K, probably closer to $60K to live comfortably with a family of 3 and the money it takes to maintain and pay off the farm. You must take into consideration the education of your child, as well.

Your livestock above will require about 25-60 hours per week to take care of, depending on season, stocking rates and how you farm them (easy way or hard way).

Good luck.

[everett]

Originally Posted by Jim S.

Your livestock above will require about 25-60 hours per week to take care of, depending on season and stocking rates.
Good luck.

WOW, up to 60 hours a week for two goats and six hens? I had no idea small farm livestock was so labor intensive. I was thinking more along the lines of a couple hours a day (i.e. 15-20 hours per week).

I've only been on this earth for 31 years, but that's long enough to know that nothing ever turns out as rosy as you plan it. Ahh, but we can try can't we!

Thanks again for all of your tips. It sounds like a three-member family without employee-paid health insurance, no credit cards, no car payments and some bills offset with elbow grease can expect to get by safely with each of two spouses making $30,000 before taxes or one person making $60,000 before taxes.

I was hoping for $50,000 but maybe we can get there if I manage to spend less on the house and land (+/- $150,000) and can put down 25%-30%.

Either way, I'm sure you'll be seeing more of me. Until then I'll keep being a wallflower in the forums and reading my Backwoods Magazines. ;P

[MorrisonCorner]

*laugh* I like the "popping dreams as public service." I'm a bubble popper too... it is really ridiculous how many people genuinely think they are going to make actual income off a few head of sheep. Anyone walking into a yarn shop can do the math on a skein of wool... seriously... do you really think you're going to make money on this if a skein sells at retail for $6-10? Sheep don't live on air...

I'm with whoever said $52,000-60,000. That's enough to save for retirement and unexpected expenses.. and I kind of consider that basic responsible budgeting.

[farmergirl]

Originally Posted by everett

Jim S. I have no intention of completely "living off the land" or making any money from our land. I want to grow most of my own food because I don't trust the crap they sell in grocery stores. I want to live in the country and work from home because I can't take one more year of daily traffic james during my 1-hour commute to work each way, neighbors who can see into every window in my house, and laws that say I can't have a couple of hens in my backyard. I want to wake up and go milk the goat and feed the chickens while my wife makes breakfast. Then sit down at my home office desk in a robe and slippers with a cup of coffee, work until noon, have lunch, work the garden.... etc. As you can clearly see, I'm not expecting to live a HARDCORE homesteading life and I'm being honest with myself about that. While my "dreams" may be a little too "dreamy" the lifestyle goals have been mine for as long as I can remember. I have absolutely NO interest what-so-ever in living to work or keeping up with the Jones', or working more so I can buy more crap that I don't need so I can enjoy myself because I work too much buying crap that I don't need in an endless cycle.

I like your dream....the picture of you or me or anyone, really, waking up, milking a goat, feeding some chickens and relaxing wtih a cup of coffee and a homemade breakfast sounds wonderful.
My DH and I have been farming our 10 acres for 5 years now. I can count the times on one hand that we have been able to have a morning like the one you are dreaming of. Instead, most of our mornings look like this: wake up, feed the animals and tend to any extra chores (sometimes laundry or other housechores, but usually livestock related ones like running to town to pick up supplies/ feed, mending broken fences, checking livestock for any signs of ill-health or pending partrition, bedding stalls, dumping and filling water troughs, stacking hay, cleaning pens...you get the idea). We rarely even eat breakfast, but our animals NEVER miss a meal. In the summer when it's hot, we water our gardens at night. Irrigation is work. Procurring supplies is work. Animal husbandry is work. I plan to live on our farm forever, but there is no denying that it's alot of work.

10 acres is alot of land to care for. If you only want a garden big enough to feed yourselves and only plan on 2 goats and 6 laying hens, you could get by on 1 acre quite nicely. If you have 10 acres, you will feel compelled to use them all.; your 2 goats will become 10, your 6 hens will turn into 20,30,40. You will feel guilty for the waste that any good size garden produces (if things go well, you will have too much to eat) and then you will feel the need for pigs to eat the garden leftovers. The farm takes on a life and character of its own. Ours is ever-evolving, and with each new venture comes extra responsibility and work. I'm not trying to talk you out of going for it, just sharing from personal experience the reality of small scale farming.

[cfabe]

I'd agree with the $50-60k but I think it will be tight at that level. Your new paid off cars will not be new forever, will eventually need repairs or replacement. Your biggest expense will be your mortgage so I would suggest not spending that much. Buy someplace cheaper or buy a more modest house. I also suggest forgetting about solar panels as the return on investment is just not there with them, if you're grid tied just use grid power.

[Nevada]

Originally Posted by everett

Thanks again for all of your tips. It sounds like a three-member family without employee-paid health insurance, no credit cards, no car payments and some bills offset with elbow grease can expect to get by safely with each of two spouses making $30,000 before taxes or one person making $60,000 before taxes.

I was hoping for $50,000 but maybe we can get there if I manage to spend less on the house and land (+/- $150,000) and can put down 25%-30%.

Either way, I'm sure you'll be seeing more of me. Until then I'll keep being a wallflower in the forums and reading my Backwoods Magazines. ;P

The advice I'm seeing here is without foundation. I can't predict the amount of deflation we're likely to see from the depression we're headed for. That's what you should be thinking about, not absolute income figures. Your goal should be to make yourself and financially independent as possible. In other words, get your monthly payments to as near zero as possible.

You've got a nest egg to invest. Spend it someplace where it will put you in a position to be as rent and mortgage free as possible. Investing it in a down payment for a mortgage you may not be able to afford two years from now is putting you on a road to disaster -- not freedom.

Think about affordable land, and a home you can either build yourself or buy with cash.

[shepmom]

I pretty much agree with most of what has been stated, except I don't see 2 goats and 6 chickens requiring 60 hours labor time. lol

We live on a severely restricted income since a car crash disabled me. I wish we had 50-60K a year. We do raise hair sheep, chickens and ducks. With the cost of hay these days and grain we will be reducing the numbers dramatically.

Goal is to keep a few hair sheep to mow the weeds and focus on chickens more than ducks. Dh works full-time and spends roughly 14 hours feeding and watering, now that it is hay season and few bugs. Does not include labor time cleaning the barns.

NC Mountains may not be the cheaper place to live. Gas is generally higher there not sure why...tourists? Lots of subdivisions buying out the farms in the Asheville area, not sure about other areas.