[DISCLAIMER: We are not certified financial planners or financial experts so please do not rely on these numbers and seek professional advice for all your financial decisions.]

There are many paths to financial independence, and a unique and intriguing one is the RV resort lifestyle. Combining the joys of resort living with the pursuit of financial freedom offers a unique and effective way to achieve your goals.

Is it really possible to live a resort life while having an accelerated path to financial independence in as little as 10 years? Or is this all a bit too good to be true?

Well, numbers don't lie, so let's dig into them a bit to see if it's actually possible.

We’ll first assume that you are either a Gen X, Gen Y, Millennial or Gen Z where you won’t be receiving any government income like CPP or OAS for a while and can’t rely on that income for the foreseeable future (don’t worry  Baby Boomers, we’ll get to you later, and the good news is that with that extra income this gets even easier).

We’ll also assume that you have a spouse or partner to take on this challenge with. If you’re single though, don’t worry, as it’s still doable. We’ll cover this later on in the article.

Let's start by laying out the lifestyle we’re imagining. We see it going something like this:

1. You purchase a sweet destination trailer or park model trailer to park at an extended season RV resort.

2. You spend the majority of the year (6-11 months) living at the RV resort. (Check out what it takes to live an RV resort life and also <what it’s like being at an RV resort>).

3. You have an affordable place to stay during the months the RV resort is closed (<check out some cool options here>).

4. You have a modest annual budget for your other living expenses beyond accommodation (transportation, food, entertainment, child expenses, medical, personal care, donations, etc).  

Next, let’s drill down into the details. Here is what we are assuming in this scenario:

1. You and your spouse/partner make an average of $65,000 each for a total household income of $130,000.

2. You buy a destination trailer for $100,000 plus HST ($113,000 total).

3. You finance the purchase with a loan of $90,400 (80% of the purchase price including HST) at a rate of 7% and amortized over a 20 year period, resulting in a monthly payment of $695.

4. You have $22,600 for the 20% down payment on the destination trailer.

5. You choose a site at an RV resort that is open for 9 months a year.

6. Your site fee is $6,000 a year + HST.

7. You spend $1,500 a year on other costs for your RV (insurance, utilities, maintenance, etc.).

8. You spend $1,500 a month on accommodations during the three months the RV resort is closed.

9. You spend $1,500 on your other living expenses throughout the year.

10. You focus on paying off your RV loan first with your extra savings, and then once the loan is paid off, you start investing your savings and are able to generate an annual return of 6%.

Based on these assumptions:

1. You’ll have your RV loan paid off in less than two years.

2. Be contributing over $70,000 to an investment portfolio by year 3.

3. You’ll require about $30,000 a year for your living expenses* once your RV loan is paid off. 

4. Based on a withdrawal rate of 4% a year from your investment portfolio, you’ll need a nest egg of just over $750,000 which you’ll have grown by year 10.

…and voila, you’re financially independent!

*Note: this assumes you’ll pay little to no income tax as you’ll each only draw about $15,000 a year in income from your investment portfolio and will make use of government vehicles such as the TFSA in Canada or Roth IRA in the US.

What can make you go even faster?

1. You’re household income is more than $130,000 a year

2. You have a larger down payment available and therefore require a smaller loan to pay off (or maybe even no loan at all!) and can start building up your investment portfolio sooner.

3. You’re able to generate a higher rate of return on your investment portfolio (<want to give being an Airbnb operator a try?>).

There are things that can slow you down as well unfortunately, such as:

1. Your income is lower (Don’t worry - <Here’s how you can still live the sweet life on just minimum wage>).

2. You want a more expensive unit like a park model trailer (<What unit is right for you?>).

3. You have a smaller down payment and need to borrow a larger loan and hence delay putting savings away (<we can help you buy with as little as 5% down>).

Nonetheless, striving for financial independence is still a good thing regardless of how long it takes, and hey, what’s really the rush anyway?

For the spring chickens out there, we need to ask the question “how long does a unit last?” because it's not going to last forever. There are things you can do to make it last a really long time though. Once it's finally time to say goodbye, you can always get another one. And we haven't factored in any government income. So by the time your unit conks out, you'll probably be close to getting some dough from the government which should more than offset the cost of financing a new unit. 

Alright, let’s switch gears now to the Baby Boomer scenario (thanks for being patient with us!).

The biggest change for you Baby Boomers is that you’ll have retirement income to rely on and therefore require less income to draw from your investment portfolio each year to cover your living expenses. And less annual investment income = a smaller nest egg required. 

So how much to be exact? Well, if we use the same numbers from above, where your average living expenses will be $30,000 a year, and you and your spouse/partner are each generating a combined $30,000 a year from government income (CPP and OAS alone averages about $1,400 a year per person), you essentially need a very small nest egg once your unit has been paid off (check out <how a retiree can live big on a small nest egg>).

Lastly, what about those who are single? The biggest changes here are that:

1. You’ll be required to make an income equal to two people to build up a sufficient nest egg.

2. You’ll pay more income tax, both while building up your nest egg (since you’d be in a higher tax bracket) and once you start drawing from your next egg (as you can’t “split” income like you could with a partner to stay in a lower tax bracket).

So overall, it is definitely a bit harder and will probably take more time but it’s still doable.

We realize there are lots of assumptions here and everyone’s scenario is different so feel free to check out our spreadsheet, make a copy of it and play around with the assumptions that fit your own unique situation.

We’re by no means financial experts, but check out our <guide to financial independence> to give an idea of what a financial plan could look like to help achieve this goal. 

Beyond their role as a budget-friendly path to financial independence, recreational vehicles offer the chance to stay at resorts that offer a really exceptional lifestyle. Many resorts are immersed in nature, with convenient amenities nearby and often close to friends, family, and all your favourite spots. It's a great way to escape the hustle and bustle of city life and find peace in beautiful surroundings. Not to mention that within the park, you'll find a variety of exciting amenities and a built-in community, creating a vibrant atmosphere where you can feel truly connected and engaged.

Also, the world is looking to a future that's greener, more sustainable, less wasteful, more mindful, and has a smaller footprint. Recreational vehicles check all these boxes. So this is another benefit to the resort lifestyle.

And how can this become even better?

<Buy Two, Save the HST> or <Become an Airbnb operator>.