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Hi There. Is this a smart decision?
Old 04-21-2010, 12:40 PM   #1
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Hi There. Is this a smart decision?

Hi guys. I am new to these forums, however thought that it may be a good place to learn about and discuss the fact that I am contemplating making a major life decision. I am 32 years old, and am planning an early retirement this year. I know that many of you probably will not agree with this, and it goes against the norm, but I invest for a living, and am planning to live exclusivly off of my investments.

I currently have approxamately $325K USD in my total portfolio, which generates on average $10,000 - $40,000 NET per month. Sometimes more, very rarely less. The portfolio is comprised almost 100% of alternative investments. The portfolio is very nicely diversified, and I am happy with where all my funds are parked for the long-term, but also have contingency plans in place if performance starts to suffer. I constantly scout out new opportunities for further diversification (i will never retire from this).

To complete this plan, I am planning on making the transition to move to either Panama, or Uruguay (still undecided at this point). Mainly for a few reasons. The primary one being cost (twice the lifestyle, half the price), but also tax minimisation reasons. I would give up residency in my home country (Canada), which means I need to sever ties, and stay out of Canada for more than 6 months of the year. The plan is to reside in Panama/Uruguay (where my dollar goes much further) for the winter season, and then return to "visit" Canada in the summer months. My significant other and myself have been working on all the details of the snowbird details. We would basically rent while in Canada, and look to own, while in Panama/Uruguay, and renting out that residence while in Canada.

We both have no debt, and no kids. Based on our budget, and multiple travels to both Panama, and Uruguay, we are quite confident that we can both live fairly well off of $5000 USD per month. If we need to splurge and go over this, we can, however we would prever to continue to compound a good portion of our portfolio and build towards the purchase of a permanant residence down south.

This is the "quick n dirty" version of this. I know its not what the average joe looks to do at 32 years old, but we are very seriously considering this life and lifestyle change. I would like to hear any feed back, constructive criticsm, and more importantly, if there are any others who currently live a simliar lifestyle?

In my view the COMBINATION of a few things makes this very doable.
1. A solid portfolio I am happy with.
2. The the ability to live a much CHEAPER lifestyle in Panama or Uruguay (we have estimaget we can live for nearly half the cost.
3. The reduction of taxes (possibly complete ilimination of them, depending where we relocate to), which further increases #2
4. The ability to continually compound our portfolio over time.
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Old 04-21-2010, 12:49 PM   #2
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Quote:
Originally Posted by Sidekickeh View Post
Hi guys. I am new to these forums, however thought that it may be a good place to learn about and discuss the fact that I am contemplating making a major life decision. I am 32 years old, and am planning an early retirement this year. I know that many of you probably will not agree with this, and it goes against the norm, but I invest for a living, and am planning to live exclusivly off of my investments.

I currently have approxamately $325K USD in my total portfolio, which generates on average $10,000 - $40,000 NET per month. Sometimes more, very rarely less. The portfolio is comprised almost 100% of alternative investments. The portfolio is very nicely diversified, and I am happy with where all my funds are parked for the long-term, but also have contingency plans in place if performance starts to suffer. I constantly scout out new opportunities for further diversification (i will never retire from this).

To complete this plan, I am planning on making the transition to move to either Panama, or Uruguay (still undecided at this point). Mainly for a few reasons. The primary one being cost (twice the lifestyle, half the price), but also tax minimisation reasons. I would give up residency in my home country (Canada), which means I need to sever ties, and stay out of Canada for more than 6 months of the year. The plan is to reside in Panama/Uruguay (where my dollar goes much further) for the winter season, and then return to "visit" Canada in the summer months. My significant other and myself have been working on all the details of the snowbird details. We would basically rent while in Canada, and look to own, while in Panama/Uruguay, and renting out that residence while in Canada.

We both have no debt, and no kids. Based on our budget, and multiple travels to both Panama, and Uruguay, we are quite confident that we can both live fairly well off of $5000 USD per month. If we need to splurge and go over this, we can, however we would prever to continue to compound a good portion of our portfolio and build towards the purchase of a permanant residence down south.

This is the "quick n dirty" version of this. I know its not what the average joe looks to do at 32 years old, but we are very seriously considering this life and lifestyle change. I would like to hear any feed back, constructive criticsm, and more importantly, if there are any others who currently live a simliar lifestyle?

In my view the COMBINATION of a few things makes this very doable.
1. A solid portfolio I am happy with.
2. The the ability to live a much CHEAPER lifestyle in Panama or Uruguay (we have estimaget we can live for nearly half the cost.
3. The reduction of taxes (possibly complete ilimination of them, depending where we relocate to), which further increases #2
4. The ability to continually compound our portfolio over time.
Why not stay just a few years longer and leave when you are able to buy Uruguay or Panama?

Ha
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Old 04-21-2010, 12:52 PM   #3
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We have thought about that. But the urge is getting to strong, and we do not want to waste any years. We are both travellers at heart. Also, executing this plan would enable us to buy a place sooner than if we just stayed here. With a lower cost of living and no taxes we could save for this much easier down there, and also start getting a good feelign for the market by renting and living there for a while first.
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Old 04-21-2010, 12:54 PM   #4
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Wow, I wouldn't be trying that, and I'm one of the more aggressive investors here.

If you can make 18.5% or more consistently for 60 years while growing your portfolio to match inflation you'd be the envy of Wall Street!

While you may be doing well now, what happens when your winning strategies stop working? Can you pick the future winning strategies? How long are your current returns locked in for? What kind of risks and performance variations are you ready for?

I did very well picking tech stocks in 2001 and 2002 that did great in 2003 and beyond, but that was pretty much my one trick pony. When I wanted to diversify internationally and tech looked pretty well recovered, I gave up stock picking and moved to mutual funds.

Hey, you can always give it a try. You're young enough to recover if you screw up. You might even get lucky. It would be quite an experience.
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Old 04-21-2010, 12:57 PM   #5
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Originally Posted by Sidekickeh View Post
I currently have approxamately $325K USD in my total portfolio, which generates on average $10,000 - $40,000 NET per month. Sometimes more, very rarely less. The portfolio is comprised almost 100% of alternative investments. The portfolio is very nicely diversified, and I am happy with where all my funds are parked for the long-term, but also have contingency plans in place if performance starts to suffer. I constantly scout out new opportunities for further diversification (i will never retire from this).
Hum, I need to get some of 'em alternative investments with net yields of 148%... May I ask what those investments are?
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Old 04-21-2010, 01:03 PM   #6
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Hum, I need to get some of 'em alternative investments with net yields of 148%... May I ask what those investments are?
Me too! I have no idea how you are getting those returns!

Also - have you considered Costa Rica? Great health care, I've heard. I know you're invincible in your 30s but...
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Old 04-21-2010, 01:06 PM   #7
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In response to the question asked in your thread title: No.

You've said you have a contingency plan if your investment performance starts to suffer. I'd advise you also develop a "Plan C" in the event your contingency plan also doesn't work out.

Heck, at age 32 and with no kids you and your spouse will probably still be young enough to start all over again even if Plan C blows up on you....
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Old 04-21-2010, 01:09 PM   #8
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Me too! I have no idea how you are getting those returns!
I'm wondering if this is the opening act of some stealth spamming. We may begin hearing about "passive investments" and "Forex" at any time ...
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Old 04-21-2010, 01:15 PM   #9
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Wow, I wouldn't be trying that, and I'm one of the more aggressive investors here.

If you can make 18.5% or more consistently for 60 years while growing your portfolio to match inflation you'd be the envy of Wall Street!

While you may be doing well now, what happens when your winning strategies stop working? Can you pick the future winning strategies? How long are your current returns locked in for? What kind of risks and performance variations are you ready for?

I did very well picking tech stocks in 2001 and 2002 that did great in 2003 and beyond, but that was pretty much my one trick pony. When I wanted to diversify internationally and tech looked pretty well recovered, I gave up stock picking and moved to mutual funds.

Hey, you can always give it a try. You're young enough to recover if you screw up. You might even get lucky. It would be quite an experience.
Honestly my portfolio is the least of my worries. None of my investments are correlated to any of the regular "run of the mill" investments, markets or asset classes that most are accustomed to.

It doesnt matter to me about conditions such as a strong economy, low inflation, high interest rates, or a depressed stock market, real-estate boom n bust etc.. (until I start investing in realestate). My investments are focused on 5 and 15 minute time frames and charts only! They are only focused on technicals, zero fundamentals. I have also played a helping hend in developing a traingular arbitrage system which is as close risk free investing as one can get. Of course I have risk, but its all very well managed. I really do not like to discuss my portfolio with people not familiar with alternative investments as it usually always ends up in a war I find! I go through this enough with my girlfriend's co-workers and one of her friends who is a financial advisor.

My entire portfolio is NOT traditional investments, which what most people retire off. Hence why I am looking to do it, early, and with a much smaller nest egg. While I do realise that even though my portfolio is robust, it certainly may not last forever. Many factors playing a toll on its success. Which is why I have contingencies, but also, because I will always be looking for new, and testing new investments. When I say "retire", I guess that is a loose term. I am not looking to go "bird watching" every day. But live a really relaxed lifestyle, monitoring my investements, and always scouting out new ones, and looking for new and interesting opportunties. This is another reason why Panama is interesting to me. Because of the very business welcoming environment currently existing there.
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Old 04-21-2010, 01:17 PM   #10
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I'm wondering if this is the opening act of some stealth spamming. We may begin hearing about "passive investments" and "Forex" at any time ...

I am not spamming anything. Simply looking for holes in my plan. I do not want to really discuss my portfolio as I mentioned before. Lets just leave it at "i will generate a healthy incoming" from an average sized nest egg, and have contingencies in place, if somethign fails.
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Old 04-21-2010, 01:21 PM   #11
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In response to the question asked in your thread title: No.

You've said you have a contingency plan if your investment performance starts to suffer. I'd advise you also develop a "Plan C" in the event your contingency plan also doesn't work out.

Heck, at age 32 and with no kids you and your spouse will probably still be young enough to start all over again even if Plan C blows up on you....
Yes the plan is to move into various other avenues of business over time. Whlie at the same time not getting busier and busier and busier. WHich is why I really like the idea of real-estate being added to my portfolio. And which is also why I thikn that Panama isa prime location for this.
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Old 04-21-2010, 01:32 PM   #12
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Your plans pretty much rely exclusively on the dividends of your alternative investments (almost positive you mean day trading), at least for the next 10-15 years. It is extremely hard to assess how stable your situation is from the outside without any more information than that you have alternative investments of some sort (and familiarity with them). By default, it sounds like these alternative investments are actually extremely risky based on the extreme return. You need a very fleshed out plan B that you are both comfortable with if some transactions go wrong.
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Old 04-21-2010, 01:34 PM   #13
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Originally Posted by Sidekickeh View Post
Yes the plan is to move into various other avenues of business over time. Whlie at the same time not getting busier and busier and busier. WHich is why I really like the idea of real-estate being added to my portfolio. And which is also why I thikn that Panama isa prime location for this.
Disclaimer: I have absolutely no knowledge of Panama other than what I read on the internet.

You might want to do a forum search on "Panama" for posts by Arif, one of our members who moved there. This post summarizes why he returned to the US.


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Old 04-21-2010, 01:46 PM   #14
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Who was the poster who tried Panama for a while, then came back to the States?

Anyways, I recommend you give this early retirement thing a whirl. As already written in this thread, you are young enough that any failures should not be real problem. We cannot tell if the decision is smart or not, but it is certainly not irrevocable. Do it.

Good luck and welcome. I hope to read more about how Uruguay is the next big deal from you.
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Old 04-21-2010, 02:04 PM   #15
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I am not spamming anything. Simply looking for holes in my plan. I do not want to really discuss my portfolio as I mentioned before. Lets just leave it at "i will generate a healthy incoming" from an average sized nest egg, and have contingencies in place, if somethign fails.
Sooo, you are just asking whether you can move down south and live on $5,000 a month? Sure, go ahead! Sounds like fun. But I can't say whether this is a smart decision since you do not want to discuss specifics about your finances. There is no way to tell whether you plan is sustainable or not over the long term, but you seem to truly believe it is. So good luck and enjoy yourself!
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Old 04-21-2010, 06:00 PM   #16
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Welcome!

My only concern would be consistent access to reliable infrastructure, depending on closely you need to monitor your portfolio.

good luck!
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Old 04-21-2010, 07:07 PM   #17
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That is one heck of a return on your portfolio... I once had a buddy who had similar returns in Costa Rica, he said that he had money invested in money changers and also out as personal loans that paid these huge interest rates. Eventually the money changers shut down on him and the personal loans just stoped paying....if this is your route to $ and you have your money there, do be careful. My friend lost about $250k out of the whole thing and still wishes he would have stuck to standard investments.
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Old 04-22-2010, 12:39 AM   #18
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Originally Posted by Sidekickeh View Post
I am not spamming anything. Simply looking for holes in my plan. I do not want to really discuss my portfolio as I mentioned before. Lets just leave it at "i will generate a healthy incoming" from an average sized nest egg, and have contingencies in place, if somethign fails.
Here's a couple things to consider before you take the plunge:
- Have you read "How I Trade For A Living" by Gary Smith? You apparently can make it work just like he did, but is that how you really want to live your life? Perhaps a more important question would be "Is that how your significant other wants to live their life with you?"
- One critical lesson from Smith's book is that "Technical indicators work very well-- until they stop working." If you haven't experienced that problem yet, then you would do well to consider your response in that eventuality. Notice that I didn't use the word "possibility."
- Many expats report difficulty accessing their brokerage accounts from overseas. Issues include bandwidth, foreign IP addresses, poor connectivity, time zones. Have you tried doing this for a few months from your chosen location?
- Have you put together a way to access cash for living expenses? Again you may be moving largish sums of money among various accounts from an overseas location. That generally triggers a number of electronic banking alarms.
- Healthcare?
- Kids/family?

Let's assume that you've discovered the perpetual-motion golden-egg-laying goose. In that case perhaps you'd want to consider the answers to a couple other questions:
1. How much of a loss do you take before you decide to switch to Plan B?
2. If you keep piling up the capital gains, when do you quit? $5M? $10M? $100M? At some point the size of your system is going affect its performance, just like mutual fund bloat. Yeah, I know-- tough problem. I'm just pointing out holes.
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Old 04-22-2010, 07:35 AM   #19
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I say that 350K is too little --- If what you say is true then hold off for ONE year -- If you make the 10-40% you say then you should be over 1/2 mil. in a year apprx.

If your over a half mil in a year and your plan is still holding up then jump.... anyone can do a year....
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Old 04-22-2010, 07:50 AM   #20
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Do you remember the guy who tried to blow the whistle on Madoff? The tip-off to him was Madoff was advertising unrealistically high rates of returns.

To the OP: Go ahead. You are still young enough to start over when you learn that lesson after you go broke. And you will. Go broke.

If you have any sense of caution, consider waiting until after interest rates spike and see how well your method works then.

As dem Cajuns say, Bon chance, mon ami.
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