Reader Case: Making our money make babies so we can travel

Follow me
Photo by micheile henderson on Unsplash

It’s time for another reader case! This one caught my eye because of the title “making our money make babies”. That’s exact how investing works. Your money can work harder than you because it never needs to eat, sleep, or workout. If only I could do this the whole parenting thing would be a breeze!

I’ve also been thinking of how investing is related to babies lately, and there are so many ups and downs when it comes to parenting on a day-to-day basis, that it really does remind me of the stock market! The good thing is on the whole you’re going in a positive trajectory in the long term since you can see your kid grow and progress over the months and years, even if it doesn’t feel like it sometimes within a single day. Anyway, I digress. Let’s get to the reader case!

Dear FIRECracker and Wanderer,

I got a hold of your amazing book a year ago and have been working on our portfolio ever since.

Why I’m reaching out:

We’re a couple in our early 40s and after losing a few same-aged friends, it is our goal to take 1+ year off of work and go see friends and family across the globe and travel the world. We’ve saved up $41,000 to make that happen, but wanted to get your ideas on how we can make our money make babies.

We’re not FIRE yet, but inching closer. The math isn’t mathing, so we need some help with making it work. Our investment income in 2023 was about $8,000.

Looking forward to your ideas, and thanks for sharing your knowledge. You’ve completely changed our lives already.


M + T

Gross annual income: ~ $180,000

Net annual income: ~ $142,000

Monthly family spending: ~ $3,400

Net worth: $370,000 (house and car value not included)

Fixed assets:

– Car resell value (Kelly Blue Book): ~ $30,000

– Home value (Zillow Zestimate): currently around $480,000


Car loan balance: $2,800 (our payment is $800/month) at 1.9% interest 

Home mortgage balance: $250,000 (our rate is $1,500/month) at 2.6% interest – the home will be rented out at a projected $3,000/month (Zillow rent estimate is at $3,400) once we’re on the road 


17% in cash

26% in bonds

33% in stocks

24% in REITS


High-yield savings accounts (4%+ interest): $70,000

Checking balance: $14,000 


50/50 intl and U.S. bonds


⅓ intl, ⅔ U.S. stocks

M + T

Well, from an initial glance, I can see that although M + T’s savings rate looks fantastic, the yield from their portfolio isn’t quite where it’s supposed to be. My first thought is that maybe it’s because they’re in the accumulation phase and not yet focused on yield, which is what we advocate in the beginning in order to supercharge your portfolio. Later when you become FI and retire, then you focus more on yield to have steady income. But that doesn’t look like what’s happening here. In order to figure out exactly what’s going on, let’s MATH THAT SHIT UP!

Income$142,000 (net)
Expenses$3400/month or $40,800/year
Debt$2,800 (car) + $250,000 (mortgage) = $252,800

Given that they spend only $40,800/year and earn $142,000 after taxes, they have an insane savings rate of 70%! They also have a starting net worth of $370,000 outside of car and home. This means that with their exceptional savings rate, they can expect to reach FI in:

YearBalanceContributionsROI (6%)Total

(Note: this calculation assumes a conservative 6% return and their income is keeping up with inflation)

Less than 5 years!

This is assuming that they don’t sell the house, which would free up even more equity to invest.

Given that they are doing well financially and close to FI, their plan to take a year off in their early 40s to travel the world is low risk. I don’t know what field of work they are in, but in engineering, a year gap in your resume is no big deal. And given that they lost friends at this age (that sucks, I’m so sorry to hear that), it makes sense they it would give them perspective and want to shift their priorities.

What’s interesting is that given their $370,000 net worth outside of car and house, they’re only getting $8000 in investment income. I’m assuming they mean the passive income generated from their portfolio in the form of interest and dividends. Based on their allocation of 17% in cash, 26% in bonds (1/2 US, ½ intl), 33% in stocks (2/3 US, 1/3 Intl), 24% in REITS, this what the yields look like on ETFs tracking all those indexes.


Put it all together and it should be a little over 3.3%. Yet they are only getting $8000/$370,000 = 2.2%. There’s something wrong there. Based on these ETFs we used to represent your portfolio, your yield should be closer to $12K. Our reader should check their own portfolio to see which ETF isn’t doing its job and swap it out if necessary.

Note that this may be a taxable event, so check with a tax professional before doing anything.

The yield ($12K) + the $41,000 they saved towards their gap year should be enough to go see their family and friends. Now, I don’t know exactly where their friends and family are, so they need to be careful about balancing experience places (like the UK, Switzerland, USA, Canada) with inexpensive places (Thailand, Portugal, Vietnam, Mexico, etc) to average out their travel costs. For example, if you want to only travel in the UK, given that it cost us $170 USD/day or $62,050 for the year, which would make their savings of $41,000 + $12000 yield = $53,000 a bit short.

However, if they were to for example only spend 40% of the year in an expensive place like the UK and the rest of the year in Portugal (which cost us around $65 USD/day or $23,725 USD/year), they could average that down to $62,050 x 40% + $23,725 x 60% = $39,055 which is less than their travel fund for the year. To see examples of how much it costs for a couple to travel to various in places around the world, check out the cost tables in our “Let’s Go Exploring” travel series.

Another thing they should do is travel hack. A tool I’ve been using lately to optimize my frequent flyer miles to get free flights is “” (this is NOT an affiliate link. I just like this tool and I want you to benefit from it). You can do some basic free searches to find good flights, and there’s also a paid version if you want more specific filters to be available.

If M&T quit for a year, it’ll open up their schedule to fly outside of weekends and high seasons which should reduce their travel costs drastically. They’ll also be able to take advantage of last minute flights to minimize the points they spend. This is different from using cash, when the closer to your flying date, the more expensive your flight will be. However, with points (and using to search), the closer you are to your flight date, the more last minute cheap flights there will be. For example, when we went to Mexico, our short 4 hour economy flight from Toronto Cancun was 30K points each since we were travelling during high season. But the week before flying out, we checked again, and found those same flights had dropped to only 11K each. If we hadn’t been travelling during the busy Jan-Feb high season, it would’ve cost us even fewer points.

Before quitting their jobs and travelling for the year, they should try to travel hack (sign up for credits card to get frequent flyer points sign on bonuses) as many points as possible to use for flights. Before we quit our jobs in 2015 to travel the world, we racked up over as 200K each, which was enough to get “round the world” plane tickets. Back then we didn’t have great points search tools and last minute business class discounts. Now, there is even more options for points deals than ever before.

This couple is in great financial shape. If they keep going at this rate, they’ll be FI in about 5 years. Taking a year off to travel shouldn’t negatively affect their FIRE plans too much and it’ll be something they’ll remember for the rest of their lives.

I say go for it!

What do you think? Should they keep working or quit to travel? Do you have any tips for how they can “make their money make babies?” Any tips for points hacking to give them free flights?

Hi there. Thanks for stopping by. We use affiliate links to keep this site free, so if you believe in what we're trying to do here, consider supporting us by clicking! Thx ;)

Build a Portfolio Like Ours: Check out our FREE Investment Workshop!

Travel the World: Get flexible worldwide coverage for only $45.08 USD/month with SafetyWing Nomad Insurance

Multi-currency Travel Card: Get a multi-currency debit card when travelling to minimize forex fees! Read our review here, or Click here to get started!

Travel for Free with Home Exchange: Read Our Review or Click here to get started. Please use sponsor code kristy-d61e2 to get 250 bonus points (100 on completing home profile + 150 after first stay)!

9 thoughts on “Reader Case: Making our money make babies so we can travel”

  1. ” Before we quit our jobs in 2015 to travel the world, we racked up over as 200K each, which was enough to get “round the world” plane tickets. ”

    200K points is not that much. How were you able to get “round the world” tickets? To where exactly? How many stops/layovers? Can you elaborate?

  2. Curious where this couple is from. 3400/month will not get too far in gta or Gva.
    Given the housing is in the 480k definitely not in big cities.
    Well done!

  3. I don’t think it’s a good idea to take a year off at this point. Their investible net worth seems low for this income. I’d invest more and build a better foundation.
    Also, the job market seems tough now. They might not be able to make this kind of money after taking a year off. Ageism is real and they are getting older.
    It’s probably best to save a few more years before considering taking a year off. IMO.

  4. Taking a year off sounds like a goal M T are really excited about, I agree that they should go for it! It’ll be unforgettable, and they’ve worked hard to moments like these. A couple of thoughts: Maybe they should consider an additional buffer for when they return home and need to find new jobs. It can take 4-6 months right now to find new employment and if they really want to make the most of their year off and be fully present, why spend part of it applying for jobs (buzzkill). Also, maybe it’s just me spending an insane amount of time on Portfolio Visualizer, but a 6% ROI on their portfolio does seem a bit high considering a good chunk of it is in cash, bonds, and international if you also need to inflation-adjust it (I didn’t do the math in the tool, so I could be wrong). Depends on the strength of the market in those years leading to retirement. Cheers FireCracker, I always love reading your case studies!

  5. Logistically, it may not make sense to take a year off and do this. Then again, this couple has first hand experience at loss, and as well all know, tomorrow is never promised. As long as they are aware of the opportunity cost, and have a plan to get back on track once they are done, why not? Maybe they won’t have the chance to do this in the future. Plenty of college grads take a year off or more when they have student loans, and yet have turned out fine.

  6. My only comment, does it have to be 12 months? Why not 6 or 9 months? Focus on some major priority countries. Not your entire dream list. I would agree, that organizations change far more frequently than in past decades. I don’t know their career /work experience areas but early 40’s is when people are ramping fast in their careers. No matter what we think, ageism exists.

    Just forget travelling to Europe nowadays in late June to Aug., since it will be hot, very crowded, long lineups to major sites, higher prices (remember kids + their families for their summer vacations, etc.) and Asia in (our ) summer months is not pleasant / monsoon since large chunks would be humid hot and think about the air quality at that time. That leaves planning a big time off from Sept. to May following yr. So you can travel during shoulder seasons.

    1. Or even three months. Lots of employers offer unpaid sabbaticals. It would be great if they take the leave and have jobs to come back to.

  7. It didn’t seem to be explained: are you ignoring the rental income they’ll get for the year renting their house while traveling? You questioned $4000 additional in portfolio yield but seemed to overlook the $1500/month rental income they expected to have? Curious if it was intentional.

  8. Hey. With its user-friendly interface and seamless navigation, accessing academic support has never been easier. From placing orders for custom essays to tracking the progress of my assignments, the app offers unparalleled convenience. I particularly appreciate the real-time notifications, which keep me updated on important milestones and deadlines. Whether I’m on the go or in the comfort of my own home, the mobile app ensures that I have everything I need to succeed academically. I highly recommend it to any student looking to streamline their academic workflow and achieve success.

Leave a Reply

Your email address will not be published. Required fields are marked *

Social Media Auto Publish Powered By :