Man with a (rough) plan

[nototheman]

Crunched the numbers and the news is good.

2027 is my goldilocks year for how I prioritize my future opportunities vs roughing out my current employment. That makes for 10 years total in the labor force, not counting high school or college PT jobs.

210k portfolio, 100K pretax income, ~50K saved annually over four years. Sell the house & car in four years gives me another 100k profit. I didn't make a budget (cardinal sin!) but these are conservative estimates for my lifestyle and physical assets.

This gives me $18000 (1250/mo + 3000 contingency) for 10 years while I travel SE Asia, Mexico, South America, Eastern Europe....then $21000 (1500/mo + 3000 contingency) for me to spend in Western Europe onwards. Or to settle in whatever LCOL country I fancy but to help support a partner.

Then, at this spending rate my portfolio would grow enough by the time I'm eligible to withdraw my 401k and IRA at 60 to buy land and build a house with cash $200k upfront and $50k some years later....as a baseline! I love the idea of a, off-grid tiny house in a rural settings so it's like "yeah, that's doable lol"

So many places to see, people to meet, food to try, languages to learn. I can have full independence to go set my own schedule! I'll go where I want, when I want, and peacefully reflect time with the peace of mind knowing it's my own, not borrowed.

There's always a chance I'm being naive in my assumptions, or that some major event upsets everything, but that's life. Worth it

 

[O2Bfree]

Sounds exciting! You'd be wise to do a budget and run your numbers through FIRE Calc (link is in the lower-right corner under Quick Links). Also think carefully about taxes, medical insurance, and what you plan to do if you can no longer live off-grid because of health issues. Good luck!

 

[38Chevy454]

Seems a shoestring budget for the rest of your life. If that suits you, go have fun. The good thing is you are young and can always settle in and get a job if needed. I don't see any medical contingency? How will you deal with any illness or injury? How will you get around in the various countries? Train travel and busses? You might be full independence as you say, but it seems to me that you are really only slightly above poverty. Maybe my life and experiences can't see it being that good. But it is for you, not me. So go see the world and enjoy the time. You can always make changes and adapt as required.

 

[nototheman]

Seems a shoestring budget for the rest of your life. If that suits you, go have fun. The good thing is you are young and can always settle in and get a job if needed. I don't see any medical contingency? How will you deal with any illness or injury? How will you get around in the various countries? Train travel and busses? You might be full independence as you say, but it seems to me that you are really only slightly above poverty. Maybe my life and experiences can't see it being that good. But it is for you, not me. So go see the world and enjoy the time. You can always make changes and adapt as required.

It is a bit tight isn't it. Reassessing when I plug in 20,000 (1,500/mo +2000) for first cycle and then 23,600 (1800/mo + 2000) onwards, plus also going humbler on the homebuild I am still at 90% success rate which suits me. I see 90% as overly-rigid worst case scenario because I can adjust my lifestyle easily with the market or personal situations. Better to overbudget.

I will depend on the public transport infrastructure when traveling, mostly trains. I'll spend a year in one region of the world then pull from the contingency for a cheap international flight. Low cost for prescription is built into monthly budget, For non-routine healthcare I will pull from the balance of the contingency, naturally cut/rebalance expenses for some months while I recover, and possibly borrow from next year's contingency. Hopefully I don't have a major medical emergency every single year!

 

[The Cosmic Avenger]

I've recently realized that the reason a lot of us aim for 100% or really close to it is to feel that even in the worst predictable market we'd probably be OK. I built a lot of flexibility into my retirement budget, with a lot of optional expenses that can be dropped if needed. When your margins are thinner, you have less flexibility. That's why that 10% is important; for me, I could cut things if I was at 90% and the market fell in that lowest 10%. You might need to go back to work. But if you have contingencies planned, then you might as well give it a shot and play the odds!

 

[Car-Guy]

At just 28 there is a lot of "stuff" that can/will happen to you, and in the world, in the years to come that will affect you. Some planned but more that isn't... But as you say, that's life. Good luck.

 

[nototheman]

You might need to go back to work. But if you have contingencies planned, then you might as well give it a shot and play the odds!

Better odds than my coworker's "win the lottery" plan

 

[aaronc879]

Sounds like a good plan to me. I'd rather do your plan than work into my 50's and have so much saved that I die with millions like the majority of people on here will. I have lived on less than your projected spending for my whole life and expect to continue doing so so I say go for it. You can probably do some very part time work at some point along the way if you want to stretch the money further. Good luck.

 

[anothercog]

Rather than considering exiting the workforce for good, consider an extended sabbatical. Go explore the world while your young and healthy and are more likely to tolerate basic accommodations.

Be open to new income opportunities that present itself, maybe tutoring English. Maybe after of awhile of a nomad existence you may realize it's not right for you.

You'll likely realize you need more for the long haul. Another option to see the world while saving for the future is join the foreign service.

In any event, enjoy your adventure!

 

[COcheesehead]

Seems slim for all of what life can throw at you yet. Better to be poor young, than poor old.

 

[Koolau]

Better odds than my coworker's "win the lottery" plan

Or my BFF who is 79 and half a mil in debt. Wait. NO. He's doing just fine (until he dies.)

 

[RxMan]

Good luck to you! It sounds like you have a plan. My only concern would be if you haven’t factored inflation into your annual spending estimates.

 

[nototheman]

Good luck to you! It sounds like you have a plan. My only concern would be if you haven’t factored inflation into your annual spending estimates.

It's from fire calc which I believe adjusts for inflation.
As well as taxes, everything counted as income will either have been taxed previously or in tax deferred accounts, I won't ever make enough in capital gains to be subject to it.

 

[COcheesehead]

It's from fire calc which I believe adjusts for inflation.
As well as taxes, everything counted as income will either have been taxed previously or in tax deferred accounts, I won't ever make enough in capital gains to be subject to it.

Keep in mind penalties for early withdrawal from deferred accounts and all those zero years for social security.

 

[RxMan]

It's from fire calc which I believe adjusts for inflation.
As well as taxes, everything counted as income will either have been taxed previously or in tax deferred accounts, I won't ever make enough in capital gains to be subject to it.

Ah yes of course, I meant to say be sure you’re comfortable with the inflation assumptions in FIRECalc.

 

[matjung]

This gives me $18000 (1250/mo + 3000 contingency) for 10 years while I travel SE Asia, Mexico, South America, Eastern Europe....then $21000 (1500/mo + 3000 contingency) for me to spend in Western Europe onwards. Or to settle in whatever LCOL country I fancy but to help support a partner.

I thought I am good in understanding Slang - then I saw your writing.
How much do you intend to spend per month 1250, or 4250 ?
A lot of countries look affordable on the Paper, once you are there, you find out - they are not. You may loose money when hoping from landlord to landlord. Rental rates at airbnb are unpredictable at times. You rented something for 2 weeks. And 2 days before check-in the Host tells you - sorry, canceled, go elsewhere.



With 4250 you will be able to get a long and support a partner.
With 1250 you may need a partner to support you.
You may have to stay in shared apartments.


"100K pretax income" - do you expect to earn that money while living in other countries/continents?
If so, you will manage, without sharing.
At some airbnb places, rent went up like 50% compared with pre-covid prices.


If your budget is 1250 per month for the first 10 years,
and 1500 per month for the next 10 years.
Where exactly is that budget growth coming from?
If inflation stays at 4% for 10% --> your budget won't work out.
The next few years, the inflation might be beyond 4% especially in emerging market countries. How strong USD will be is hard to predict.
Another Biden/Trump government won't make USD stronger.

 

[The Cosmic Avenger]

I thought I am good in understanding Slang - then I saw your writing.
How much do you intend to spend per month 1250, or 4250 ?

I believe it's supposed to be $1,250 or $1,500 per month to live on, and then another $3K per year in discretionary spending.

 

[nototheman]

Apologies on being unclear, yes I meant it as 1250*12=15000 for routine monthly expenses and adding another 3000 flexible yearly spending makes 18k total annual budget. For whatever reason framing it like that made more sense in my head. Honestly I don't think I could spend $4250 a month even if I tried. I intended to get yearly leases and avoid Airbnb's except on special occasions.

I make 100k right now until I retire in however many years.

Still playing with different scenarios. But yeah after the feedback here I got a reality check so I'm adding another couple of working years. So instead I'll be at $23,600 annual "bumming it" period and later bump up to $27,000. So still not penthouse in NYC type money but realistically comfortable for Mexico

 

[Time2]

I'm not very positive on your plan. Don't let the adventure blind you to the reality of not having enough money. If you are saving $50k a year, 5 more years could give you a nest egg of $580k and then add in the house profit, you would have near $700k. At that amount with a minimal overseas spend rate, your money should grow faster than you are spending it. This allows a lot of flexibility that doesn't necessarily involve w*rking.

 

[marko]

I'm not very positive on your plan. Don't let the adventure blind you to the reality of not having enough money.

+1
It's a fine line between a $1250 a month "early retirement" and living like a homeless person, IMO. Good luck.

 

[marko]

Still playing with different scenarios. But yeah after the feedback here I got a reality check so I'm adding another couple of working years.

If the 18+ posts here encouraged you to work a few more years, that might tell you to take a bigger step back and rethink the overall plan.

What I means is, it sounds like your original plan may have been based more on flimsy hopes rather than solid information.

I'm glad we caught you in time!

 

[indiajust]

I like the flex as advocated by anothercog. You have time for at least 2 more mini careers if you find something interesting and stay in a place... especially if you choose to put down roots for a family.

 

[Koolau]

Or my BFF who is 79 and half a mil in debt. Wait. NO. He's doing just fine (until he dies.)

I was just rereading the thread and when I hit my previous post, it struck me that it must have been hours before this:

https://www.early-retirement.org/fo...ion-in-debt-at-79-has-passed-away-118258.html

What does that have to do with anything? I suppose it brings up a lot of "cute" sayings, like: Make every day count. Plan for the best but prepare for the worst. "Enjoy every sandwich." Are you ready? etc.

In any case, I didn't mean to upset the flow of the thread, but somehow I think we all have to keep in mind that (if we have some good friends) some day, they'll be writing something about how much they loved us, now that we're. gone.

Returning you now...