23 year old dreams of South America.

[mindtrench]

Hi. My name is Tim. I'm 23 years old, and I'd like to retire somewhere between 30-35.

Why so young? I would rather do things I love like writing, exploring on the cheap, and making friends. I know I don't want to retire in the United States. I've been thinking of South America for a long time. The idea of still developing lands, and cheap cost of living speak to me.

Assets:

140k home (137 owed, just bought it)
2k cash.

Debts:

24k (car/credit cards)

Income:

sub-40k/year

Future Income:

90-120k (beginning May 2016 when I separate from the military)


What to do from here? I think the obvious is to build more significant savings and pay down debt. Figure things out.

 

[Jager]

Well, the good news is you're very young. And you've just bought a home that has a relatively low cost footprint. That bodes well.

The not-so-good news is that your present debt isn't suggestive of a LBYM mentality. And to get from where you are to where you want to be in the ten years you've set for yourself is a very tall order. I don't see it happening absent an extraordinary savings rate and incredible investing luck.

The other caution I'd offer is dreaming of some far-off place you've never been to. Until you've actually spent some serious time there you won't know for sure if it's going to work. Countless dreams have come slowly unglued as they met their reality.

What to do? Save like hell. Live way below your means. Pay off your consumer debt ASAP. Spend some serious time thinking about how you want to invest what you've saved. And do whatever you need to do to move from your present salary band to that 90-120K you anticipate. Getting quickly to a higher salary level will be key to any kind of hoped for ER.

Best of luck. And thanks for your service...

 

[retire2020]

Currently you've negative worth…pay this down asap --->24k (car/credit cards). Then LBYM and save as much as possible and your RE dream will become more clearer.

 

[ShortInSeattle]

Hey there!

Don't wait until you are retired to write. Writing is a great "side gig" in this era of eBooks and blogs. Good luck with your savings goals.

SIS

 

[mindtrench]

Well, the good news is you're very young. And you've just bought a home that has a relatively low cost footprint. That bodes well.

The not-so-good news is that your present debt isn't suggestive of a LBYM mentality. And to get from where you are to where you want to be in the ten years you've set for yourself is a very tall order. I don't see it happening absent an extraordinary savings rate and incredible investing luck.

The other caution I'd offer is dreaming of some far-off place you've never been to. Until you've actually spent some serious time there you won't know for sure if it's going to work. Countless dreams have come slowly unglued as they met their reality.

What to do? Save like hell. Live way below your means. Pay off your consumer debt ASAP. Spend some serious time thinking about how you want to invest what you've saved. And do whatever you need to do to move from your present salary band to that 90-120K you anticipate. Getting quickly to a higher salary level will be key to any kind of hoped for ER.

Best of luck. And thanks for your service...

I appreciate your very thoughtful response. You're right--I have to adjust my lifestyle to LBYM. The house purchase was so that I could have an asset to begin building on; though it would have been better to have concrete savings after the fact. Setting up my home hasn't been cheap. I'm feeling that now is about time to make the paradigm shift to that cheaper lifestyle.

I'm going to be investing a little ($1-2k) into a business I'm starting, but otherwise I'm keeping an open mind as to what else I will invest into.

I still feel that the retirement goal is a feasible option. It will certainly take hard work, and hopefully I can make my business idea my full time employment post-separation. If so, I could telework from wherever I decide to move to. Maybe perform a move of sorts to the place I plan to retire to, continue working, and slowly shift myself out of that role and into one of ER.

 

[mindtrench]

Currently you've negative worth…pay this down asap --->24k (car/credit cards). Then LBYM and save as much as possible and your RE dream will become more clearer.

I was pretty sure this would be the straightest path going forward. Thank you.

 

[mindtrench]

Hey there!

Don't wait until you are retired to write. Writing is a great "side gig" in this era of eBooks and blogs. Good luck with your savings goals.

SIS

I guess I should get started then.

 

[CaliforniaMan]

You didn't say how much of the 24K was credit card debt. All debt is bad but IMO a car payment is a bit different than credit card debt. You are using your car while you pay the debt, so it is kind of amortized over the years you use the car, which is may be a necessity for work etc. Credit card debt is usually just dead weight, something you bought in the past you have to pay with the future.

Assuming you can take care of your debt before you separate, afterwards you are giving yourself only 5 to 10 years to accumulate enough assets for ER. This may mean putting your life somewhat on hold for those years and saving at a very high rate, or getting a very high paying job. In the meantime, between starting to save for ER and retirement, life intervenes.

You meet someone, fall in love, have kids. All great things, but all have an impact on your plans now. You are 23, I would say, let life happen. Get out of debt, LBYM, save, try to get a great job you love (or at least like), and see what opportunities arise. In the meantime find some ways to take inexpensive trips to South America, get the feel for it. Your are young yet, lots will happen. Let it.

 

[FUEGO]

We visited Uruguay and Argentina for 9 days a few years ago. Nice places, and almost nice enough to entice me to live there. But I'm not sure they have a lot more to offer than the closer Latin American countries (like Mexico) if you're looking for "still developing".

Best of luck on your path. Like others said, hard core saving, debt reduction, and investing will put you on the path to financial independence pretty well. Who knows if you'll end up in S. America, but saving for FIRE will let you go wherever you want.

Spouse, kids, family, and friends might make staying in the States more attractive if you settle down somewhere. It did in our case. We thought about going expat to somewhere like Mexico or Thailand but we're pretty cozy right here in North Carolina. That doesn't mean we can't set off on multi-month trips if we want to explore other parts of the globe.

 

[crtreedude]

Well, I live in Costa Rica, been here for nearly 10 years now. Having seen lots of people come and go, don't move to a 3rd world country because it is cheaper, move because you like a less developed country. You really have to embrace the life, to live cheaper than the USA - and that takes an adjustment.

Always remember, living in a foreign country is not the same as taking a vacation there.

We enjoy our life here, and have no plans to move - but I sure see a lot of people after a few years packing up and going back home.

 

[Milton]

I know I don't want to retire in the United States. I've been thinking of South America for a long time. The idea of still developing lands, and cheap cost of living speak to me.

The idea speaks to you, but will the reality?

How much experience do you have in living - not visiting, but actually living, cheaply as the locals do - in third world countries?

Read crtreedude's post, above, very carefully.

What to do from here? I think the obvious is to build more significant savings and pay down debt.

Given your plan, I think the more obvious first step is to develop fluency in Spanish (or Portuguese, if Brazil appeals).

 

[crtreedude]

Just to tell you what really gets to you... or to us. One, you have to be used to no one "getting" you. Misunderstandings abound. You need to have a warped sense of humor to enjoy all the mistakes that happen due to misunderstandings. Knowing Spanish isn't enough, you could be fluent and you still won't think like the locals.

You need a LOT of humility. You are going to look like a fool most of the time. You will particularly look like one if you don't think of yourself as a wise fool.

You have to have enough to recover from the above errors. And remember, culture shock is real. If you don't know what I am talking about, start reading about it.

I agree, get fluent and immerse yourself in a local community from where you want to go. We found a group of Ticos in NJ and used to spend time with them before deciding to relocate. If you don't want to be around them now, why do you think you will later? If you are focused more in living cheaply, etc and NOT in the people, you are surely going to suffer.

Just being blunt, it might save you a lot of pain, etc.

One last thing, if you are married, make sure you BOTH really want to do this. Lots of couples get torn apart because one wanted to come, and the other wanted to stay back home.

Moving to another country can be one of most incredible experiences of your life - but it can either be good or bad, usually based on how well you prepare yourself. Whatever you do, don't do it because you want less stress. lol

 

[haha]

Just to tell you what really gets to you... or to us. One, you have to be used to no one "getting" you. Misunderstandings abound. You need to have a warped sense of humor to enjoy all the mistakes that happen due to misunderstandings. Knowing Spanish isn't enough, you could be fluent and you still won't think like the locals.

You need a LOT of humility. You are going to look like a fool most of the time. You will particularly look like one if you don't think of yourself as a wise fool.

You have to have enough to recover from the above errors. And remember, culture shock is real. If you don't know what I am talking about, start reading about it.

I agree, get fluent and immerse yourself in a local community from where you want to go. We found a group of Ticos in NJ and used to spend time with them before deciding to relocate. If you don't want to be around them now, why do you think you will later? If you are focused more in living cheaply, etc and NOT in the people, you are surely going to suffer.

Just being blunt, it might save you a lot of pain, etc.

One last thing, if you are married, make sure you BOTH really want to do this. Lots of couples get torn apart because one wanted to come, and the other wanted to stay back home.

Moving to another country can be one of most incredible experiences of your life - but it can either be good or bad, usually based on how well you prepare yourself. Whatever you do, don't do it because you want less stress. lol

Interesting post. On this board, everything tends to come up roses, ie. it is all good, all the time.

I figured I and all the failures and painful mistakes I have both seen and experienced were just aberrant. If I get off an airplane in a foreign culture I can just plan on experiencing painful culture shock shortly, and having it last for a longer period than I would like.

When I was in Latin America I was young, and always working. Still, even though I preferred many aspects of my life there, it was hard. I would hate to have to help manage a woman's unhappiness, since much of it would very likely fall on my head. Although I suppose if you can go upscale enough you would be well insulated from local reality, and having your familiar English speaking partner along might be comforting I believe that when you are living and speaking and gesticulating and dreaming in another language, you are becoming a different person, and this can be scary.

Also, it is sometimes hard to shake the feeling that you nothing but a mark. I think this is mainly because if it weren't for the money you bring and represent, many locals would generally prefer that you go home and not come back, other than to deposit anther boatload of money.

Ha