Early retirement without a fortune

That's all as a single person.

He's be needing a lot more with a partner or kids. Or both.

For a single person, that's pretty extravagant. $52K is about $10K more than I will need with partner, two dogs, one or two grown up kids living with us, a motorbike for recreation, holidaying for a couple of months a year and maybe even keeping our second car. Seriously, if people put one tenth of the effort they put into earning their money into how they spend it to get value for money, there'd be far more people retired and happy in the world right now. I will soon be one of them. :D
 
@china

surely you can see though that big a little less extravagant is hardly 'unfathonable'.

All you need is a nice dose and anti counsumerism (ie convice yourself that spending on crap is kida evil and killing the planet) and you should be fine.

Be a leader not a follower

Tip - people dont fly business class or first for that matter with their own money. For 20 years I onlt flew first and business but i never paid a cent.

Re Mercedes - Buy one thats 5 years old if you really need to

Buy a TV - its the cheapest entertainment in the world.
 
@china

surely you can see though that big a little less extravagant is hardly 'unfathonable'.

All you need is a nice dose and anti counsumerism (ie convice yourself that spending on crap is kida evil and killing the planet) and you should be fine.

Be a leader not a follower

Tip - people dont fly business class or first for that matter with their own money. For 20 years I onlt flew first and business but i never paid a cent.

Re Mercedes - Buy one thats 5 years old if you really need to

Buy a TV - its the cheapest entertainment in the world.

I must say that I do not spend much on "stuff" or "crap". My car is a ten year old corolla, my house is relatively cheap and almost my entire budget are spent on things that are not permanent, material possessions. Food and mostly experiences are the "indulgent" part of my spending.

If you are semi or fully retired, how do you get someone else to pay for your first or business class air tickets?
 
I'm siding with China on this one. This is an investing forum dedicated to the cause of making real money through property investing.

Personally, while I'm a fan of a lot of what the likes of MMM says, I don't really see the point of retiring to count my pennies when for a few extra years I could retire with a really nice yacht to sail in my spare time.

This is the nature of the investing capital snowball - in the later years you make far more money than in the early years so why not keep going for a few more years where you can save >100% of your salary so you can then truly enjoy your retirement? Sure bike riding and bush walking is fun but it gets old if that's all you are doing. Plenty of healthy food can be had cheap but quality fresh fish and salmon is healthy stuff to eat too and it is undeniably expensive - I don't want to have to think about the cost of it before buying it for my family on a regular basis. And I want to go sailing somewhere different rather than get stuck in crowded caravan parks every school holiday.

There's nothing wrong with aiming a little higher. For all the value of working out how to reduce your expenses, there is often equal or greater value in working out how to increase your income. You can only go so far in the former but the latter is effectively unlimited, as some on this forum have shown!
 
I'm siding with China on this one. This is an investing forum dedicated to the cause of making real money through property investing.

Personally, while I'm a fan of a lot of what the likes of MMM says, I don't really see the point of retiring to count my pennies when for a few extra years I could retire with a really nice yacht to sail in my spare time.

This is the nature of the investing capital snowball - in the later years you make far more money than in the early years so why not keep going for a few more years where you can save >100% of your salary so you can then truly enjoy your retirement? Sure bike riding and bush walking is fun but it gets old if that's all you are doing. Plenty of healthy food can be had cheap but quality fresh fish and salmon is healthy stuff to eat too and it is undeniably expensive - I don't want to have to think about the cost of it before buying it for my family on a regular basis. And I want to go sailing somewhere different rather than get stuck in crowded caravan parks every school holiday.

There's nothing wrong with aiming a little higher. For all the value of working out how to reduce your expenses, there is often equal or greater value in working out how to increase your income. You can only go so far in the former but the latter is effectively unlimited, as some on this forum have shown!

Bravo sir! hit the nail on the head. why decrease your expenses when you can increase your income.
 
There's nothing wrong with aiming a little higher. For all the value of working out how to reduce your expenses, there is often equal or greater value in working out how to increase your income. You can only go so far in the former but the latter is effectively unlimited, as some on this forum have shown!

MMM represents one end of the spectrum and China represents the other. Most here are advocating somewhere in the middle, and indeed China's retirement budget estimate can be easily satisfied on 2/3 of the amount of annual income he thinks he needs.

Increasing your retirement income is fine, if that's what you "need" to be happy. All MMM does is challenge whether you really "need" what you have been brainwashed by vested interest companies to believe you need, or whether true happiness can be bought for far less money.

If there's just one thing you should take away from the MMM archives it is this: for every $1K per year you need in retirement, you need to have at least $25K put away to generate it for you. The corollary to this is for each $1K you don't need, that's $25K less you need have squirreled away. That extra $35K per year China thinks he needs over his stated budget will need nearly a $900k pot of gold to fund it. Is that really worth the time and effort to create, just for a buffer? China seems to think so. I clearly do not.
 
I must say that I do not spend much on "stuff" or "crap". My car is a ten year old corolla, my house is relatively cheap and almost my entire budget are spent on things that are not permanent, material possessions. Food and mostly experiences are the "indulgent" part of my spending.

If you are semi or fully retired, how do you get someone else to pay for your first or business class air tickets?

Well - these days......

Part of my part time business is I offer an expert witness service.

I am an expert witness in a 120 million dollar trade deal gone wrong.

So if someone hires me they must pay all reasonable expenses...

@Hi Equity

Yes bit how much is 'just a little bit higher'?

The point about blogs like MMM is to show people who dont even realise (no consciousness) about what one really needs to live a nice middle class lifestyle. You envoke immages of "counting pennies"....im too busy for that.
 
I'm siding with China on this one. This is an investing forum dedicated to the cause of making real money through property investing.

Personally, while I'm a fan of a lot of what the likes of MMM says, I don't really see the point of retiring to count my pennies when for a few extra years I could retire with a really nice yacht to sail in my spare time. ...

Also agree with HiEquity. However this doesn't mean that we won't be using some of the principles/ideas discussed here. We have an acre or so in Maleny that we will be retiring to with the intention of growing most of our own food and effectively living a more self-sufficient productive lifestyle. Ironically given that I in particular hate travelling, this in combination with the above probably means it is likely that our lifestyle may not require a large income. However we do like to know that when we choose to live it up now and then that the funds will be there with no counting pennies required.

I think a lot also depends on one's current lifestyle. If you have been used to a high income for quite some time it is very difficult to think of heading into retirement with only enough income to meet mostly minimal needs.

But regardless of how much money one retires with I think there is a great deal of satisfaction achieved from using one's money wisely which includes being able to minimise costs and grow your own food etc. If nothing else being more self sufficient and active can certainly contribute too a more healthy lifestyle.
 
I think china's figures are quite accurate for what the average joe-blow pays to have a decent lifestyle. People tend to forget the incidentals that creep up like council rates, unexpected payments (like car accidents, insurance claims etc). It all adds up even if you just eat 2 minute noodles everyday.
 
My plan is to be able retire in 9 1/2 years time on an income of $100000/year (2010 dollars). That is the day I turn 40 and while I think that it's highly unlikely that I'll actually stop working, it'll be a nice thing to know that I can walk out that door at any time, if I want.

Currently I only have three properties, so I've got a long way to go, but as long as I follow my plan, I should get there.

Currently, after tax, rent and savings/investing expenses, I live on about $27000/year and I don't feel like I'm restricting myself too much, I still holiday (had three this year, including two overseas ones). I just make sure that I don't go over the top. Shop at Aldi, get my fruit and vege from the Chinese or Lebanese fruit shops, limit eating out to twice a week, buy things on special in bulk, drive a ten year old Honda Jazz, etc.
I could retain this lifestyle without feeling that I'm missing out, but I do want a larger passive income "just in case". What if I get sick, married and/or have kids? Would I be able to cope comfortably on $27000 then? Definitely not.

A lot of my friends can't understand why I choose to drive an old "feminine" car when I have got enough money in the bank to buy a nice flashy car right now. But it's all about delayed gratification; not that I'll ever buy a flashy car.

$100000 is just something to me that I'll always be able to live on extremely comfortably without having to worry whether I can pay for this or that.
 
My plan is to be able retire in 9 1/2 years time on an income of $100000/year (2010 dollars). That is the day I turn 40 and while I think that it's highly unlikely that I'll actually stop working, it'll be a nice thing to know that I can walk out that door at any time, if I want.

Currently I only have three properties, so I've got a long way to go, but as long as I follow my plan, I should get there.

Currently, after tax, rent and savings/investing expenses, I live on about $27000/year and I don't feel like I'm restricting myself too much, I still holiday (had three this year, including two overseas ones). I just make sure that I don't go over the top. Shop at Aldi, get my fruit and vege from the Chinese or Lebanese fruit shops, limit eating out to twice a week, buy things on special in bulk, drive a ten year old Honda Jazz, etc.
I could retain this lifestyle without feeling that I'm missing out, but I do want a larger passive income "just in case". What if I get sick, married and/or have kids? Would I be able to cope comfortably on $27000 then? Definitely not.

A lot of my friends can't understand why I choose to drive an old "feminine" car when I have got enough money in the bank to buy a nice flashy car right now. But it's all about delayed gratification; not that I'll ever buy a flashy car.

$100000 is just something to me that I'll always be able to live on extremely comfortably without having to worry whether I can pay for this or that.

oh to be single again.... I could save so much money... Just wait until you get married, have kids etc. The wife will have other ideas as to how you should spend your money....
 
W
Yes but how much is 'just a little bit higher'?

The point about blogs like MMM is to show people who dont even realise (no consciousness) about what one really needs to live a nice middle class lifestyle. You envoke immages of "counting pennies"....im too busy for that.

Agree.

When is enough, enough? It is for each person to answer that question level.

I came to that point and here is our story.

Married young to school sweetheart. In our twenties and thirties we were child free. Most cars were toys like MX5. We ate out heaps, really heaps, even breakfasts every second day because we both worked long hours. We went ot Gyms and Biked etc. Went to movies, clubs, etc.. Stayed at luxury BNB like Lillianfells, Chateau Yearing.

Loved our small inner city Terrace in Sydney, no yard etc. Had cleaner and full time laundry service. Wife did Pilates at $30 per session private studio, 3 times a week ( ok, i never did agree with this one but what do you do:rolleyes:) I went to gym. She had designer outfits befitting her job, office wear, I had suits, etc.. BUt we worked long hours and in stressful jobs.

As I approached late 30's I saw my future in a friend with similar business. Wealthy but still working 24/7 with staff stress. Never saw his kids or wife and then he had a heart atack at 48 (and he was slim where I like my food.;))

Then, almost at a trigger, we fell pregnant with our daughter. So I said LET STOP and consider our options!!!

We could have stayed in Sydney and continued our life.

  • moved to two cars to get around not one, less exercise
  • drive to kinder / childcare as they are all full in city
  • pay for private school because local was poor
  • pay for lots of flights to VIC to see family due to daughter
  • add kid social events involve spending money, kinder gyms, kid movies, cafes, etc.
  • designer kids wear because DD friends would have them ( and yes in sydney you must)
  • And our terrace would be too small so either suck up and have play dates and squealing or buy new house, around another $250k at least to stay in city

And

Wife would still have to work.

Or

Tree Change back to Family in Country VIC


We did that now:
  • We kept business but dialled it down to key clients and paid good staff more, I stress heaps less and we actually improved our return and income - working more on the business that in the business
  • We still have two cars, one is my Ute that cost $7k converted to gas for $3k.
  • Sports cars traded for Subaru Forester in 2005 still great, scratches? who cares?.
  • Kinder & Childcare we walked to and no waiting list. Small fee.
  • Now at great public school across the road, with free music program, dedicated teachers and even an off site country campus for grade 4 : all free
  • all flights are me only and for business, so deductible and we earned enough points to go the France with Wife, free, twice in 3 years.
  • Social events: we still hit our cafe but eat at home 80% not 20% and social events are local fairs and fetes and private parties/dinners were you simply have fun not pretentious glamour. Even in the bush we have free open air cinemas, carols in the park , Halloween Nights etc... all free and no parking costs.
    Daughter and now wife, wear smart simple wear and not designer focussed or Dora crazy, if anything DD wears the same stuff all the time. Wife gave up shoe and bag fetish and has one pair of designer gumboots and dress boots. Same in same out each day. T Shirts and Jeans is de rigour.

HOW DID WE DO IT?

Sold Sydney and bought heritage cottage in centre of country town 1hr fast train to Melb CBD. Renovated home and about to build new home at rear of large block and then rent cottage as BNB earning $400+ a week. All from sale of Sydney funds.

For exercise I cut wood, mow lawns, garden, and lead daughter on her Pony which cost $0 (a free gift) and $10 a week in medicine and care. Saddle $150 and Safety Gear another $250. Free agistment on neighbours land. Pony eat grass, all good.

Wife still goes to Pilates :rolleyes: but cheaper and less frequent and she works in our business doing the accounts. At best 2 days a week.

So we have more time and less stress, better lifestyle for less cost.

TYPICAL DAY NOW

Get up 8am (me) Wife 7am to do hair etc ( some things never change LOL). We walk Daughter to school at 8:45am. Hit local cafe for coffee, work few hours then pick up daughter at 3:30pm every day except when I am in Sydney for business which is 2 days every week or so. If at home, go for pony ride, garden, visit friends, read, whatever.

BONUS

Grandparents have moved to our town and part of her upbringing giving us breaks AKA three weeks in Paris in oct 2012.

SUMMARY

I write this to say "each to their own".

Personally never liked yachts being seasick. Like cars but like Ute as well. Would like tractor but wife says :mad:

Still like eating out and have time to eat in and to cook well for friends and us and browse local farmers market for produce and grow our own stuff ( very poorly I must add but we barter with neighbours for wood and jam wife makes).

This lifestyle means our daughter's favourite thing is books not TV. We never hooked the TV up, she only has DVDs. She thinks Mc Donald's is boring except for playground. She values our time to play and learning with us over possessions. i.e. One of her most precious toys is a home made , and decorated, cardboard sword and shield set I made, for her and I to battle "dragons and princesses" in the garden. PS she cheats invoking fairy magic clause each time I win.

TO CLOSE...

So as Christmas approaches (my daughter has no TV ads telling her buy the latest doll etc..) so when Daughter was asked what she wanted? She said only 1 thing please....... A Tree House.

So neighbour offered tree on boundary ( massive oak) and a friend helped 3 days for free and BINGO, she is about to get a massive two storey tree house complete with rope ladder, toy kitchen, lookout, lifting baskets and it cost me a free dinner for mate and wife say $100, $50 in screws, and $0 in Wood and Sheeting I already had 2nd hand.

this is Lifestyle, not retirement.

Regards Peter 14.7
 
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A lot of my friends can't understand why I choose to drive an old "feminine" car when I have got enough money in the bank to buy a nice flashy car right now. But it's all about delayed gratification; not that I'll ever buy a flashy car.

A friend is the same, he likes sports cars but he drives 10 year old Kia Rio.
He just bought his 12th Investment property.

Regards Peter 14.7
 
Excellent post Pete!

I agree we all need to answer this question ourselves. There is considerable value in focussing on what really makes you happy and investing in that rather than just going with the crowd. I'm all for blazing your own trail... whether that be a yacht or a place in the country!
 
Peter 14.7
It sounds like a step up :)
from your previous lifestyle.


It's a Wonderful Life

(I love this movie)

Hi Kathryn

I will not say the previous life was bad. We really enjoyed it at the time as it was what we wanted, the hustle the bustle, living in Sydney CBDm etc... and put us in the position we are now. I liked the suits and power meetings but once fulfilled It was time for change.

Yet always planning I don't see the present as our final resting place.

Wife and I love France Lifestyle Food, People Architecture. When grand parents are passed away in 5 to 10 years we propose to go there to live for 12 months. House swap PPOR for one in France. Nil Costs.

Let BNBs and IP run on remote and enjoy the Lifestyle.

Thanks Peter

PS yes great movie.
 
Peter 14.7 - wow awesome post and i must say a kindred spirit. Im not sure where you are but we almost bought near the township of macedon a few years back.

Once our current renovation is finished (in northcote) we intend to do a house swap (or just rent out our house) and live in rural Europe (France, spain, Italy) for 6 months or so...

Who Would of thought - a European holiday for 6 months and that will cost virtually nothing (we reckon we can get away with only 5-10k out of pocket for 6 months.

Great story - thanks for sharing!
 
Who Would of thought - a European holiday for 6 months and that will cost virtually nothing (we reckon we can get away with only 5-10k out of pocket for 6 months.

Great story - thanks for sharing!

Thanks.

Yeah. $10k will do it. Good Food is SO cheap in France. We put 1 bed sydney apartment on www.homeforexchange.com for France and got offered Pyrenees, Paris, Brittany, and A Large House on the Beach on a Resort Island in the middle of French Atlantic!

Seems there are many who do this. Germans particularly seem to have houses everywhere (i.e. Paris) they love to swap for Aussie.

Peter
 
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