Retire Early: Have the Life that You Want to Have Now
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Financial Independence > Retire Early: Have the Life that You Want to Have Now
Making a life change ‘overwhelmingly’ makes people more content than those who don’t - according to a recent study by University of Chicago economist Steven Levitt.
Levitt’s study, involving 22,511 people, required people to make decisions like: “Should I start my own business?,” “Should I grow facial hair?,” “Should I propose?,” and many others based simply on a coin toss.
“Overwhelmingly, the people who made a change were more content than those who didn’t,” explains Levitt.
So, if you want to be happier, just make a change.
“The easiest way to find [the] balance [between spending and saving money] is to make a list of the things that make you happiest in life and figure out how much those things cost,” says Grant Sabatier, the author of “Financial Freedom” and one of the FIRE Movement’s prominent success stories. “Focus [your] spending on those things, and save on everything else.”
The FIRE Movement, if you haven’t heard of it, meaning “Financial Independence, Retire Early,” is a community of people who want to feel fulfilled in life and earn enough money to live the way that they want. It’s financial freedom in the real sense of the question: “If you had a million dollars, what would you do?”
As it turns out, apart from buying a house or a car, most people would travel. So, it’s no wonder that so many people are jumping at the opportunity to work remotely and travel the world these days, us included.
And if you think that sounds expensive, then you haven’t considered the cost of not doing it. We saved over $120,000 in 4 years simply by traveling the world non-stop instead of paying our regular expenses in Orlando, Florida.
The reality? You don’t need a million dollars to live like you have a million dollars.
After all, we’ve been living on a budget of about $2,000 per month since early 2019, while traveling the world non-stop, all expenses - plus the birth of our two children overseas (no insurance required) - all included. Mainly because the cost of living is so much less overseas than in the United States.
Sabatier states: “You’ll save the most money where you spend the most: housing and food,” he says. “Moving from a living situation that costs $3,000 a month to one that costs $1,000 a month is going to get you significantly [more] ahead of where you’d be [than] cutting out your Netflix subscription.”
Our rent since March of 2019, in places genuinely better than we could get in the United States, has been only $753 per month, on average, including all utilities. That for places that include 2-3 bedrooms, AC and/or heating, a washer, WiFI, a dedicated workspace, and a kitchen within walking distance to a grocery store.
Different “levels” of FIRE’s expanded Financial Independence definition
Spending Very Little and Having a Wonderfully Luxurious Life
Ray Dalio once said, “I think that success is having the life that you want to have as long as you’re earning more money than you spend, and that can be by spending very little and having a wonderfully luxurious life.”
Guess what? He’s talking about our lifestyle - the Travel Lifestyle. And that’s more obvious as he continues:
“I watch a lot of people that don’t have much money, of different ages, sometimes young, sometimes older, they travel around the world, they backpack, they go to different cultures and different places. They can live in a tent, and the most beautiful nature is available to you, or you can be in a hostel or you can meet in so many different places, and they have freedom.”
While the world has evolved a bit since the days of Nomadic Matt to allow for more than just single travelers to backpack and hostel their way around the world, the point is no different. Anyone, even families, couples, and anyone else that doesn't yet have a retirement account at full value yet, can live a life of freedom by traveling the world immediately - and they can do it by spending so much less than they might have expected.
“I think everybody should experience that [lifestyle] to know that they can have a great deal of freedom without a great deal of money and that the status thing is a silly thing,” says Mr. Dalio.
You seriously DO NOT need to have a million dollars to start traveling. It's crazy to think that at one point we were sold the idea that you need to have a million dollars before you can retire - and now they are selling us on the idea that we need two million before we can retire. In fact, you don’t have to have a million dollars. You don’t have to be Fat FIRE, Barista FIRE, or even Lean FIRE to start your traveling.
The reality is that you can SAVE even more BY TRAVELING, so you will end up reaching financial independence QUICKER by DOING IT NOW instead of after you attain a million dollars. Ray Dalio concludes by saying:
“Okay, [the status thing] that’s like being hung up on living your life for approvals, so don’t get on that track and lose sight of what it is that you really want in your life. What is a successful life for you? It’s not measured by how much money you have or how much status you have, or all/most of that other stuff, it’s measured in, you know, like I would say, meaningful work and meaningful relationships. If you have something as your work that you’re into - your craft - and it’s a thing you love, and you have meaningful relationships, I think those are the most important things to make a rich life.”
Let’s examine this a bit more, and discuss what possibilities await for you by starting early.
Save Quicker by Traveling than by Not Traveling
“Steve Jobs said, 'When you grow up you tend to get told that the world is the way that it is. And that your life is to live your life inside the world and try not to get into too much trouble, and maybe get an education and get a job and make some money and have a family. But life can be a lot broader than that when you realize one simple thing, and that is that everything around us, that we call life, was made up by people that are no smarter than you. And you can build your own things, you can build your own life that other people can live in. So build a life. Don't live one. Build one.’” - Ashton Kutcher
The truth is, if you have any more than the equivalent of about $2,000 per month coming in, you’ll likely be SAVING ALL OF THE REST by living life this way than by not doing it. After all, that’s how we saved an extra $120,000 in 4 years. And that was as a family of 4. Each adult likely only needs about $1,000.
On our “Cheapest Places to Live” page, we discuss how working a $94,000 per year remote job, provided in Kissimmee, Florida in the USA (which has a cost of living of $57,500 per year), while living in Malaysia (which has a cost of living of only $20,637 but an equivalent quality of living to Kissimmee, Florida), would allow us to save $73,373 per year instead of $36,500 - DOUBLING OUR SAVINGS!
That means that working the same job remotely from overseas, instead of staying put in the USA, we are able to retire TWICE AS FAST. In other words: We could either work for 40 years, or 20. It’s a staggering difference. And the reality is that the sooner you save up money, the LESS you have to work because of compound interest. So, maybe we’d only have to work for 10-15 years instead of 40. It’s a MASSIVE difference.
You don’t need 1-2 million dollars to retire. In fact, if you legitimately wanted to “retire” and not work at all, you could do it on about $250,000 (by investing this amount and earning just 5-10 percent in interest or dividends on it, you’d have enough to travel the world endlessly, forever). We know because we’ve been doing it since early 2018.
Here’s what’s necessary
If either one of these scenarios applies to you, you can quasi-retire right now, traveling the world endlessly for the rest of your life:
If you have any type of retirement income - think of Social Security, SS Disability Insurance, or SSI in the U.S. (or the National Insurance Scheme in the UK) that amounts to about $1,500 to $2,500 per month, you likely don’t need ANY ADDITIONAL MONEY - meaning ZERO Retirement Savings!
If you’re at least 18 years old and making $1,500 to $2,500 per month online, either doing something unique from your computer, or working a remote job (something anyone can do with as little as 8-24 weeks of training).
If you have $250,000 in savings and you’re ready to turn that savings into an income generating asset, to earn 7.5-10 percent in interest and/or dividends per year (easy to do with Preferred Stocks).
The theme here is simply to have $1,500 to $2,500 per month of income. That’s it.
We, as a family of 4, travel the world right now on a total budget of only $2,000 per month - and we are open to helping anyone else learn how to do it (just join our Facebook community - Nomadic Family: Budget & Family Travel - to ask questions).
If you earn any more than $1,500 to $2,500 per month, you’ll be able to save all of it - like our example above where we doubled our savings by living overseas. The more money that you save, the more money that you’ll have working for you and increasing your monthly income. So, if you’re getting $3,000 per month in retirement income, or earning $6,000 per month from your remote job, that extra $1,000 to $4,000 per month will be extra savings. And those savings will increase your monthly income every single month as well ($4,000 per month of extra savings will create about $300 per month of extra income without reducing your savings/investments at all). Once you start, you’ll find that everything really becomes easier financially!
"Like I can't say this enough, stop waiting! You could get hit by a bus next week. Do not waste your life waiting, worrying, or wishing for things to change. You gotta want it enough to do the work. Your dreams have a brick path that will get paved every single day, one brick at a time." - Mel Robbins
Decide what to do with the Time that is Given to You
J.R.R. Tolkien infamously wrote in The Fellowship of The Ring: “I wish it need not have happened in my time,” said Frodo. “So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”
Let’s assume that the average person works from age 18 until the age of 70. Some people work less, some work more. But under this scenario, this person works 52 years of their life.
It’s strange to think that during those 52 years, human beings don’t question trading away 8 hours of the time that is given to them in life, 5 days per week, 52 weeks per year, for an income. Assuming people need to sleep for about 8 hours per day, that means they are giving up about half of their awake time, more actually if they need time to get to work and back home, on over 71 percent of their lives (260 days out of 365 per year).
The remaining 29 percent gives them just under 15 years of their own time in the course of those 52 years - usually in 1-2 day increments on the weekends. That’s 15 for you and 37 for them.
In the United States, the average vacation time per year is 2-weeks, although none is actually required. So, after 52 years of work, they’d also receive an additional 2 years worth of vacation time to do what they wanted, typically in 1-2 week increments, if they use it before it expires.
So, a person will get 15 years of their own time - in 1-2 day increments - and 2 years of their own time - in 1-2 week increments - adding up to 17 piecemealed years to themselves and 35 years to some company - before retirement - to actually live their own lives as they wish during the best years of their lives. That’s a little less than one third of their lives (1 out of 3 days) to themselves, and piecemealed. To me, it kind of felt like the Good Behavior rules that Prisoners receive.
Now, if you actually realize this at any point during your working years and ask yourselves: “Why am I doing this?” you’ll be met with plenty of articles and financial advisors (like I once was) who will tell you that you need to save about 1-2 million dollars in order to retire - because how are you supposed to survive if you don’t have any money to support yourself?
That will likely be enough to keep you dedicated to working your job and reaching that goal, and unless you’re in tune with the FIRE community, that likely means that you’re trapped in the scenario above - working for 52 years and getting only 17 years of time to yourself (if you’re a citizen of the UK, you’ll be rewarded with just over 5 and a half years of vacation instead of 2, so you’ll have 20.6 years of your own time instead of 17).
“The trouble is, you think you have time.” - Buddha's Little Instruction Book, Jack Kornfield
People don’t live forever. You won’t live forever. If you really want a wake up call, check out this site to learn how much longer you have to live: How Long Will I Live? Let’s just say that, based on averages, I have less time left than I expected - and based on the mobility of my older family members, after the age 60-65, I don’t have much time left where I’ll be able to do anything adventurous. Time is running out.
And as J.R.R. Tolkien immortalized through Gandalf: “All we have to decide is what to do with the time that is given us.”
How much of your own life do you want for yourself and your family?
How Long Does it Take to Retire?
Let’s add up the numbers.
You only need $1,500 - $2,500 per month to travel the world. We do it as a family of 4 on a total budget of only $2,000 per month for our entire family.
If you do the training and get a remote job, then you should make about $75,000-$100,000 per year.
If you live overseas, your cost of living - including adventures and activities - will be less than $25,000 per year.
You’ll be saving at least $50,000 per year.
As I write this article, I-Bonds are earning 6.89%. That means that if you invest $250,000 into I-Bonds, you’d be earning $17,225 per year in interest alone - that’s $1,435 per month. The InfraCap REIT Preferred ETF earned 8.1%, meaning you’d get $20,250 per year in dividends- or $1,687 per month.
You can probably fully retire on $250,000 based on simple investment strategies, living only on the interest and dividends from that money (never depleting your $250,000 capital) and giving you an income of about $1,550 per month forever.
So, you only really need to work about 5 years to fully retire.
Each additional year that you work will add about $300 per month to your interest and dividends (and adding $50,000 to your capital).
Your work over those 5 years will be done while traveling the world. Today, known as “Work from Anywhere,” a lifestyle open to anyone.
Thus, even when starting with ZERO savings, you’d need to work just 5-8 years of your life - instead of 52 YEARS - from your computer while traveling the world, and then you’ll have more than enough money to completely stop working and continue traveling the world for the rest of your life. That’s the bottom line.
And there’s really only 2 steps you need to make that happen.
Retire Early in 2 Steps
Learn how to travel the world cheaply while working remotely.
There’s nothing more to it.
This might be a good place for the Nike swoosh. “Just do it.”
“One day baby, we'll be old
Oh baby, we'll be old
And think of all the stories that we could have told” - Reckoning Song by Asaf Avidan
The one thing that made us pull the trigger and finally do it was the movie “The Secret Life of Walter Mitty.” In it, a guy who works a desk job at Life Magazine loses the negative for a picture that one of their photographers took. After he re-lives a few memories of a time in his life that he almost set out to travel the world, he finally decides to pull the trigger and travel to Greenland, Iceland, and Afghanistan to look for the photographer who took the photo in hopes that he might have a duplicate. He becomes a completely different person through his adventure, with the underlying theme being the motto of Life: “To see the world, things dangerous to come to, to see behind walls, draw closer, to find each other and to feel. That is the purpose of life.” Amazing movie.
Not long after that, we found some one-way tickets from Orlando to Paris for just $200 each, and our adventure began. Learn how it turned out for us in Our Story.
Hear me out:
You can do this.
We will help you! Ask us anything in our group page and we’ll make it work for you. Your life can be so much more amazing. It really is easy.
“Here's the funny thing about life. You are not going to grow up and wish that you had traveled less. Traveling has taught me more about life than any book, movie, show, class, or anything else ever will. The reality is that you are only young for so long, and tomorrow is never promised. So at the end of the day, you might as well just make the most of it.”
Your new life is awaiting.
FAQs
How do you choose the best destinations for geographic arbitrage and what are some of the factors that affect the cost of living in different countries?
Geographic arbitrage is the practice of taking advantage of the differences in prices and exchange rates between different locations. To choose the best destinations for geographic arbitrage, you need to consider your income, expenses, and lifestyle preferences. Some of the factors that affect the cost of living in different countries are: housing, food, transportation, health care, education, entertainment, taxes, and inflation. You can use online tools such as Numbeo or Expatistan to compare the cost of living between different cities and countries.
How do you deal with the legal and tax implications of working remotely and earning income from multiple sources and countries?
The legal and tax implications of working remotely and earning income from multiple sources and countries can be complex and vary depending on your citizenship, residency, and income sources. You need to research the laws and regulations of the countries where you work, live, and earn income, and consult with a professional accountant or lawyer if necessary. Some of the things you need to consider are: visa requirements, work permits, tax treaties, tax residency, double taxation, foreign earned income exclusion, foreign tax credit, and reporting obligations. You can use online resources such as Nomad List or Taxback to get some guidance and assistance on these matters.
How do you cope with the emotional and social aspects of leaving behind your family, friends, and community and moving to a new place every few months or years?
The emotional and social aspects of leaving behind your family, friends, and community and moving to a new place every few months or years can be challenging and stressful. You need to find ways to maintain your relationships, cope with loneliness, and adapt to new environments and cultures. Some of the things you can do are: communicate regularly with your loved ones via phone, video call, or social media, join online or local communities of like-minded people, make new friends and connections in the places you visit, learn the language and customs of the local culture, and seek professional help or support if you experience any mental health issues. You can also use online platforms such as Meetup or Couchsurfing to find and join events and activities in your area.
“One day, my father, he told me
"Son, don't let it slip away"
He took me in his arms, I heard him say
"When you get older
Your wild heart will live for younger days
Think of me if ever you're afraid"
He said, "One day, you'll leave this world behind
So live a life you will remember"
My father told me when I was just a child
"These are the nights that never die"
Don’t let your life pass you by. You’re never going to get any younger - now is the time!
Thank you VERY much for reading our article. We actually created this website to help people reach financial independence. Did you know that by having a remote job and traveling endlessly, or living in a country that has low costs of living, you can actually reach retirement quicker? Plus, retirement abroad is up to 75 percent cheaper as well! Learn more by exploring our website: EatWanderExplore and REmotiFIRE.
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