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  1. I’ve been following Claudia and Garrett for some time and they definitely have it figured out!

    We downsized from 1900 square feet to 1100 square feet as a family of five and plan next to drop down to a 1000 square foot house that we’re building. With our plan, we should be able to build with a medium-sized mortgage and then aggressively pay it off in a few years.

    All told, we should be mortgage free in a matter of a few years and on-track to hit financial independence in another 10 years or so (maybe a bit later if we decide to take another mini-retirement).

    Spacial arbitrage is a great substitute and, I’d argue, may end up providing you with more happiness as you find yourself spending less time cleaning and caring for the space you gave up 🙂

    • Mr. Groovy

      “Spacial arbitrage is a great substitute and, I’d argue, may end up providing you with more happiness as you find yourself spending less time cleaning and caring for the space you gave up.”

      Nailed it, Chris. I couldn’t have summed up the glories of small living better. I love what you and Jaime are doing. In the olden days, 1,000 sq ft was suitable space for a family. Now it’s considered deprivation by many. Meh. Keeping on rocking, my friend.

  2. Joseph

    My wife and I have been living in a ~300 SF 5th wheel in FL. Even though our age (combined) meet the 55+ restriction! You just have to think unconveniently, and try to make changes. I hear so many times “oh I could never do that” or “I wish that was possible for me.” It’s a defeated mindset. If you want to do extraordinary things, you Have to be different. I plan too quit my job in Aug. 2020 at 33 when we’ll be FI ;).

    • Mr. Groovy

      “If you want to do extraordinary things, you HAVE to be different.”

      Amen, my brother. I don’t know which is more impressive. Living in a 300 sq ft 5th wheel? Or being FI at age 33?

      You got a keen mind and a great story, my friend. Why the hell aren’t you blogging? You’d be a perfect addition to our freakish cult of freakish money nerds.

  3. Our summer cottage is less than 600 sq. ft. and while I’d love a bigger bathroom in it, I think my husband and I could live there easily (if only it was winterized). However, with my stepson living with us part-time and my mom 6 months out of the year we need the bigger space for now.

    • Mr. Groovy

      Haha! I hear ya, Amy. Mrs. G and I are right there with you. Our problem is that I snore like an animal and we need at least two bedrooms for our marriage to survive. 900 sq ft is the probably the minimum for us. I guess the bottom line is this: going small isn’t for everyone. But most of us probably have more space than we need. Balance is the key. Thanks for stopping by, Amy. I really appreciate your contribution.

  4. I’ve basically done this my whole life. Lived with my parents a few years, bought a 500 sq ft condo, now live in tiny cape cod. For each move, any smaller would not have been worth it but I’m very happy I made the decisions that I did.

    • Mr. Groovy

      Nice, Jason. Going small gives one plenty of options. I wish I would have figured this out about 30 years ago. Would have saved myself a lot of heartache. Thanks for stopping by.

  5. Louise

    Read a great comment on buying a house with a spare bedroom for guests. Consider whether you ever have guests, and how long they stay for. Look at motel/hotel prices in your area. If it is the difference between a few hundred a year for motel rooms, or thousands and thousands of mortgage dollars for one extra room in the house, decide accordingly.

    • Mr. Groovy

      I like where you’re going with this, Louise. Spatial arbitrage via AirBnB does present some interesting possibilities. But like you pointed out, you got to do your homework before you jump into anything. Thanks for stopping by.

  6. This has always been my favorite way to keep costs down. When I bought my first place my Realtor talked me out of a studio and into a 1 bed. Naturally, for me to afford a 1 bed, I had to live in a location that was less than desirable for my 24-year-old self. A year later I sold and move to the city…into a 400 sq ft studio. It has always had everything I need. If your space is efficient it doesn’t matter the square footage. + it usually costs way less ( Claudia and Garrett found out!). Yeah for tiny living!!

    • When I met Mrs. Groovy, she was living in a 400 sq ft studio in Manhattan. And like you said, it had everything a normal adult needed to live comfortably. If I were working in Manhattan rather than Long Island when we got married, I would have had no problem calling that studio home. Thanks for proving the FIRE-related benefits of tiny living. A revolution is underfoot.

      • My studio was a rental (actually I lived in 3 different Manhattan studios, all rented for under $500/month. But that’s another story).

        There was a time in NY when buyers feared owning a studio because the resale value was not there. Everyone seemed to want at least a 1-bedroom. Then, there was an explosion of — you guessed it –Asian business folks who moved into Manhattan and bought property. And they didn’t mind living in studio apartments. So now the studio condo (or co-op) purchase in NY has less of a stigma.

  7. We’ve never lived in a big house so I can’t say that we have downsized living in our 900 sf place, but I can say that we feel no need to upsize. We could definitely go smaller still, but it is almost impossible to find something that is smaller in our area and still fit the criteria that we want. We absolutely love the fact that cleaning our place takes no time at all. Smaller space= less stuff= little cleaning= no stress!

    • “Smaller space= less stuff= little cleaning= no stress!”

      Thank you, Mrs. Wow. I have a friend who bought a 3,500 sq ft home for him and his wife. Two people! Cleaning a 2,000 sq ft home is a pain in the arse. I can’t imagine what cleaning a 3,500 sq ft home is like. No thank you. Give me less space, less stuff, and less cleaning.

  8. Well we’re living in a 24 ft travel trailer right now and it is definitely cozy 😉 That’s down from 1500 sf (plus garage, shed, etc) The house we’re renovating will be about 1350 sf when it’s done (hopefully!) Which will be just about right for the two of us and the kids when they are home for visits. I think spatial arbitrage is the next best thing to geoarbitrage if you’re seeking FIRE and can’t move. And Claudia and Garrett are great examples of that!

    • 24 ft travel trailer? Are you comparing notes with Steve and Courtney over at Think, Save, Retire? I love it. And you 1350 sf looks like the sweet spot of space to me. That’s our game plan as well.

  9. Spending a few years deployed taught me that living simple is not that bad. Your spouse definitely has to be on board though. I think it is an excellent option for many. It’s gaining popularity due to the “tiny house” phenomenon advertised everywhere. Great site BTW. Just found it from Financial Samurai.

    • Thanks, Brad. I really appreciate your kind words. And you’re absolutely right. The spouse definitely has to be on board. I think the biggest fear people have is that they equate simple living with deprivation. Those in the military, or those who have traveled extensively, seem to know better. More space and more stuff doesn’t mean more happiness. Perhaps the “tiny house” phenomenon is evidence that more people are figuring this out. That’s my hope, anyway. Again, thank you for your kind words, Brad, and thanks for stopping by.

  10. We downsized from 1400 sf to 670 sf almost 3 years ago, and 670 is probably too much for the two of us. Our Downsizing process has allowed us to reduce expenses and save a lot more money, even in Portland. Oregon, where there are no rent bargains. Good article, Mr. G.

    • Nice, Mr. G. 1400 to 670 is a dramatic cut. I’d like to go from our current 2000 to roughly 1000, but Mrs. Groovy wants a little more space (1200-1400). And she’s the boss. Anyway, I’m glad spatial arbitrage worked out for you and Mr. G. Thanks for sharing, my friend.

  11. I downsized quite a number of years ago when divorce not so kindly nudged me (and my teenage daughter) from the “Ponderosa” to a 2BR 2BA condo (about 1,100 SF). Now my daughter is out on her own and my wife and I live in a similarly sized condo in a somewhat reasonably-priced neighborhood. While I have a lot of admiration for what Claudia and Garrett are doing, I could see shaving off maybe 200 SF, but not going all the way down to 536 SF. My wife and I do have an “escape plan”, that if we needed to downsize further we could do so financially (moving to an older condo in a different neighborhood) without doing so spatially. But for now we’re comfortable where we are.

    • LOL! You and Mrs. G are like siblings separated at birth. She says the exact same thing. She wants to downsize, but not extreme downsize. In other words, she wants some wiggle room to downsize even further if the U.S. economy really tanks. Thanks for stopping by, Gary. I love the cut of your jib.

  12. It’s one of our future dilemmas. We’d love to take advantage of Geoarbitrage, but we’d like to see where are three kids land. We don’t want to move too far away. We’re thinking future costs, travel for all of us to visit each other, possible grandkids, holidays, etc. If we stay in the Northeast, downsizing would be the right call.

    • Kids are definitely the fly in the ointment when it comes to geoarbitrage. It would be great if they all relocate to the same city/state. But that doesn’t always happen. One solution might be to buy a condo next to one child and then spend a month with each of the other children. My parents were lucky. All three of their children relocated to the same state. So moving to NC was a no-brainer. But I have a funny feeling the Dept Discipline tribe will figure things out. Sensible parents + sensible kids = great life. Thanks for stopping by, Brian. It’s always great hearing from a fellow Lawn Guylander.

  13. My family (of 3 or 4 depending on whether I’m there or not) spends the better part of the summer in a 700-square foot cabin, and we’re perfectly happy there.

    Coming home to our house, which is 5 times bigger, makes us wonder why we have so much space (and so much stuff to fill that space). When I retire, we plan to “mid-size” into one place. Bigger than 700 square feet, but much smaller than our current home.


    • Hey, PoF. Mrs. G and I had a tough time in 600 sq ft. But we were fine in 900 sq ft. Our current home is 2,000 sq ft, and it’s way more than we need. Next year we hope to geoarbitrage and spatial arbitrage. We want to buy some land in the Wake Forest area and build a 1,200-1,400 sq ft home. Keep us posted on your spatial arbitrage adventure. Always a pleasure hearing from you, my friend.

  14. 536 sq ft sounds too small for 2 people. I wonder if they can keep it up for the long haul.
    We live in a 1,000 sq ft, 2 bd/2ba condo and it works pretty well for 3 people. My mom is staying with us more and it’s really tight for 4 people. There just isn’t enough space to get away from each other.
    We’ll probably move to a bit bigger place soon.
    Spatial arbitage is good if you can handle it. It worked for us for a long time, but we need more space now.

    • Haha! You’re not going to believe this, Joe. But Claudia and Garrett are actually considering moving to a tiny house (150-200 square feet). And here’s the beautiful part: they have the temperament and bond to pull it off. But such cramped living isn’t for everyone. Mrs. Groovy and I couldn’t go much lower than 900 square feet. We definitely need to get away from each other every now and then. Thanks for stopping by, my friend. Love your frankness.

  15. We thought about it, but ultimately decided it wasn’t for us. We both love our space, and I love to cook – something that I see as a big challenge to the truly ‘tiny house’ living.

    That being said I think it’s a great option for those who are comfortable with it. And you don’t need to be extreme about it, either. There’s no point in getting a 2000 square foot house when 1500 would do.

    At the end of the day, where you live is as much (or more) of an emotional decision than it is a financial one for many people, so long as the numbers still work out.

    Yes we undoubtedly extended the amount of time we have to work due to our home, but that’s something we were fully aware of and accept, and are extremely happy with our decision to do so. 🙂 In the end, that’s what everyone needs to do – whatever makes them happy.

    • Amen, brother. Personal finance is indeed personal. And for some people, putting up with high housing costs is the price they’re willing to pay to stay close to family and friends. I have friends back on Long Island who will never leave as long as their children and grandchildren live there. That’s something I wouldn’t do, but I completely understand and respect their decision. Thanks for stopping by, Dave. Insightful comment as always.

  16. Love the idea of spatial arbitrage. My wife and I Airbnb a spare room in our house, which is sort of a form of spatial arbitrage – turning unused space into used, profitable space. It’s an option for folks who are stuck in the too, big house.

  17. Dear Groovy,

    Ten years ago, we purchased a 960 square foot home. At the height of occupancy it housed; 2 adults, 2 kids, 2 dogs and a cat, all at the same time. The kids share a bedroom and the third bedroom was used as an office and animal room (to keep them safe from the kids, smile). It has a futon in it for (the rare occasion of) guests. I always say that it would be nice to have a second bathroom but we’ve never needed one (my kids aren’t teens yet so I reserve the right to change my mind). The house is more than big enough for all of us.

    We sold this house this month and are in the process of moving to a furnished rental (owned by family). We will live on the main floor of a house. I am enjoying the process of downsizing everything and cutting our living costs even further.

    Besos Sarah.

    • That’s awesome, Sarah. Most Americans don’t realize how greatly they’re sabotaging their financial advancement by buying more home than they really need. When I grew up, everyone had modest 3-bedroom, 1-bath homes. And most families back then had 3 or more kids. And no one thought they had too little space. But somewhere along the line, the real estate industry convinced us that we’re losers if we don’t live in a McMansion. Sigh. Keep doing what you’re doing, Sarah. You guys are kicking butt.

  18. We live in less space than we have, but that’s mainly because of too much stuff. I suspect, though, that we need at least 2 bedrooms and 2 full baths to be comfortable, at least til our Munchkin moves off into the world. Love her, but not sharing a bathroom with her, lol.

    One thing I’ve noticed, though, is that as I get older I am far less wedded to the idea of a yard. I can always go to a park and join a community garden. Jon, however, likes his space and his stuff.

    • Haha! Yard and plants is one of the only things that Mrs. G and I argue over. When we build in your area, I don’t want any plants or shrubbery. I just want grass I can cut once a week with my tractor. I don’t want to have to deal with weeding, planting flowers, or trimming hedges/bushes. Mrs. G on the other hand thinks that’s stupid. She’s used to plants and bushes surrounding her home. Sigh. Since she’s the boss, I guess I won’t be escaping yard work anytime soon.

  19. Spatial Arbitrage – never heard of the term until now and I love it! I may have to steal it. 🙂

    Mrs. Freaky Frugal and I are Empty Nesters so we downsized from our 2,100 square foot home to a 1,150 square foot apartment. We haven’t regretted doing it for a minute.

    I think we could get down to maybe 900 square feet, but not much smaller. I’m really impressed that Claudia and Garrett got down to 536 square feet!

    P.S. I love your writing voice and tone!

    • Feel free to “steal” it. “Side hustle” sounds much better than “second job.” And “spatial arbitrage” sounds much better than “downsizing.” If the FIRE community is good at anything it’s giving cool names to old concepts. Nothing wrong with that, of course. What better way is there to promote our cult? And I’m with you on house size. For our next home, Mrs. G and I are shooting for 1,000-1,200 square feet. I could go as low as 900, but I don’t think Mr. G is ready for that. Thanks for stopping by, Mr. FF. I so glad spatial arbitrage worked out great for you. Cheers.

  20. I think it’s definitely an option, but each person has to decide whether or not they can live with it. Some might be more prone to going nuts in a small space than others. 🙂

    • LOL! Mrs. Groovy was saying the same thing. When we first got married, we lived in my 600 square foot condo. That was a little rough. But that was before we developed our FIRE mentality. Perhaps we could handle it today. Anyway, I think we need a least two bedrooms. When we build a house in the Wake Forest area, we looking 1,000 to 1,200 square feet. That’s about half the size of our current house. Thanks for stopping by, Laurie. It’s always a pleasure hearing from you.

  21. Great post and theory. The problem is finding a small house. All of the new construction is geared toward 3,000 sq ft plus behemoths. If they could find one, a couple would be able to save a great amount of money if they bought a house smaller than 1000 sq ft. A townhouse is a nice option. In my town they are building nice townhouses that are 1200 sq ft. The only issue is that they are calling them “luxury townhouses” and they cost $280K.

    • MarciaB

      This cracked me up, because a townhouse (ANY townhouse) in Portland, OR that was listed for $280K would engender a bidding war and result in an all-cash offer for 500K or more. Holy crap this is a HCOL area…

    • I hear ya, Dave. So true. One of the things I like best about North Carolina, however, is that you can still find decent two-bedroom houses. And even though all the builders are building new homes in the 2,500-3,000 square foot range, you can build a 1,000 square foot home or less if you buy your own land and go with a custom builder. But in a lot of localities, especially in coveted cities like New York, Boston, San Francisco, etc., zoning laws make building small either unlawful or impractical. Sigh.

  22. Great profile on Claudia & Garrett, and proof that “Spatial Arb” works (I love their blog, too!). We did the same type of thing, tho to a smaller degree.

    We sold our “big” house in the city and moved to a cabin near the start of the Appalachian Trail. Then, we did it again with a second downsizing 13 months later! Smaller housing is definitely a boost to financial independence, as long as you’re comfortable going to a smaller place.

    You’ll have to trademark the “Spatial Arbitrage” phrase, that’s a new one to me! New twist on “Downsizing”, but sounds so much more exotic! 🙂