Retire on as little as $22,000

A reader brought to our attention the fact that we have not updated our annual spending since producing this video: Adventures in Financial Independence about three years ago. As of the end of 2014,… Read more click here

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I’ll Start Monday

Guest post by Laverne H. Bardy whose humorous, often irreverent, slant on life in general, and aging in particular, draws a large readership. She has been syndicated with Senior Wire News Service since 2004 and you can find her columns on the Huffington Post. Her book, How The (Bleep) Did I Get This Old? was released in January, 2012, and is a compilation of the best of her columns.

LaverneMy heart goes out to Oprah. She has gained weight again. This woman is structured, committed and disciplined in every aspect of her life and she can’t conquer her eating addiction, so how can I be expected to? Other than showing up for meals on time, I don’t know what structured, committed or disciplined means.

I’ve been on countless diets. I once spent a fortune on one that required me to eat their pre-packaged food. Only after they had all my money did I realize that what they were feeding me was dog food.

I tried to eat it. I really did. But I couldn’t swallow what they were passing off as tasty. After two weeks and forty-two repeated attempts at swallowing their nauseating meals, I put the food out for my neighborhood feral cats who sniffed it, and walked away. Mind you, it was the middle of winter, when mice, birds and gophers were scarce, but the cats opted to starve rather than eat what I’d left them. Come to think of it, that may have been how I was expected to lose weight.

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Another popular diet I attempted came in book form and discouraged eating highly processed carbohydrates. Everyone but me was losing weight on this diet. Then I read the last page disclaimer that basically said hypoglycemic people will not be successful on this diet. I’m hypoglycemic. I had wasted a whole month on that damn diet so I rewarded myself with a hot fudge sundae, walnuts in syrup and sky-high whipped cream. No cherry. A cherry would have put me into the next month’s calories.

Remember the Drinking Man’s Diet? In 1964 it was the original no carb diet. You drank all the booze you wanted along with endless heaps of fatty meats, sauces and cheeses. I rather enjoyed that diet until I read reports of dieters dropping dead in front of deli counters.

Another diet I was on included support meetings,  once-a-week. I attended every single meeting for two solid weeks in a row. Then I quit, convinced I could do it on my own. I made their meatless meatloaf, and flour free, sugar free, oil free, milk free, taste free cake. At one of the meetings I was told that mustard on a lettuce leaf tastes exactly like a bologna sandwich. Honest. The two weeks my head was into it, I was convinced I was eating a bologna sandwich. Only on the fifteenth day when my motivation waned, did I realize that mustard on a lettuce leaf tastes exactly like mustard on a lettuce leaf. And, that’s not bologna.

It’s evident that there continues to be more of me than necessary so I’m trying, for the trillionth time, to lose weight. I know I need to have crunchy foods to keep me happy. I’m hoping carrots and cabbage will satisfy that need, although it never has before. I found myself in front of my refrigerator, yesterday, desperately searching for something sweet. I ended up downing a swig of gherkin pickle juice and, yes, it actually satisfied my craving – for the moment. I’ve raised my water intake to several quarts a day, which fills my stomach,  but sloshes when I walk, and keeps me housebound.

After a week on this no-nutrition diet I felt thinner, so I rummaged through my closet, where sizes range from Those Were The Days, to I Can’t Friggin’ Breathe, to You’re Kidding, Right? I tried on everything, toward a goal of keeping what fit, and giving the rest to Good Will. I was ruthless as I yanked each piece of apparel from its dusty, rusty hanger, some of which have hung there for decades, others with price tags still hanging, in hopes of one day coming out into the sunlight, wrapped around my body.

I had to face the sad reality that even if I fit into those clothes one day, they would no longer be in style; like the stunning navy blue sack dress, the black sheath, the June Cleaver shirtwaist, several pairs of culottes, bell bottom slacks, and a lovely beige suit with Mommy Dearest shoulder pads.

Maybe….just maybe….this will be the decade I lose the weight and treat myself to a new, updated wardrobe.

Maybe….just maybe….that last sentence is another example of bologna.

Other posts by this author

Dancing Through the Pain

Men and Women Throughout History

I Don’t See Well Anymore

Giddy Yup

Stop Telling Me I’m Old

Growing Up Dangerously

Watching Real Beauty

Hell, Not on the Map, but I Was There

Cellulite: A Rite of Passage

Camping: Not for Sissies

Don’t Count Me Out

Aging, Not All Fun and Games

Challenging My Legacy

Behind Closed Doors

Battle of the Bulge

How the Home Shopping Network Turned Me into a Zebra

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FATCA – Practical Guide

Guest post by John Ohe, IRS Enrolled Agent and chartered Financial Analyst.

John Ohe 1There are over 100 countries around the world that are now “FATCA-compliant.” This means that banks located in those countries will be sending to the IRS specific information regarding accounts held by U.S. persons. In this article, we’ll discuss how FATCA is affecting the average U.S. expat or dual citizen (including business owners), and the options for dealing with the requirements.

My bank is asking me to complete a W-9 form. What should I do?

In the United States, the W-9 is a basic form that people fill out when they start a new job or open a new bank account. The critical information captured on the W-9 is the Social Security Number. When foreign banks send over to the IRS your account balance and earned interest information, it will be attached to your name and Social Security Number. The IRS computers will be able to cross-reference the information sent by your bank against your U.S. income tax return and FBAR filing. Discrepancies will be red-flagged, although any action by the IRS will likely take several years. Keep in mind that penalties and interest accrue in the meantime.

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When the bank asks you to complete a W-9, you have 3 options:

  • Refuse – your bank will likely close your account for non-compliance
  • Delay – take the form home with you, and hope the bank doesn’t ask again. Depending on the country and bank, this may work (will not be the case in most developed countries)
  • Fill it out – you are being compliant with U.S. tax laws. It will be important that you are also compliant with your tax return and FBAR (foreign bank account) filing requirements.

Dual citizens have an additional option. If the bank inquires about their U.S. citizenship, they can deny having dual citizenship status. Of course, that would be an act not compliant with U.S. tax laws, and carries risks.

I have a business account at the bank. Should I be worried?

It’s unclear whether foreign banks will report business account information (foreign corporations owned by U.S. expats) to the IRS. The consequences would be severe. That is because there many Americans do not report their foreign businesses although it is required. Most report only the wage they pay themselves.

Each FATCA-compliant country and foreign banks are taking their own approach in dealing with U.S. expat customers. Recently, a client of Hola Expat in the Cayman Islands was told by her bank to provide proof of her Form 5471 (report on foreign corporation) and FBAR filings. Another client (in Mexico) was asked by his bank to complete a W-8 Ben-E. This form is used by U.S. companies that do business with foreign entities, so that they can withhold taxes correctly. In most case, the bank is incorrect in asking U.S. expats to complete a W-8 ben-E form. However, if the bank insists, make sure you check off “Active NFFE” on page 1 of the form.

The world is getting smaller, and privacy is increasingly hard to maintain. For U.S. expats, FATCA is a true “thorn-in-the-side,” one that is probably better to deal with earlier than later.

Other articles by this Author

Free Money From the IRS – Child Tax Credit

U.S. Expat Taxes – An Introduction

Buying and Selling Real Estate (Foreign or Domestic) from a Tax Perspective

This article was written by John Ohe (IRS Enrolled Agent and Chartered Financial Analyst). John is a partner at Hola Expat, which specializes in preparing tax returns for U.S. expats. If you would like to submit a tax-related question, email: info@holaexpat.com.

Disclaimer: The answers provided in this article are for general information, and should not be construed as personal tax advice. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved.

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How Is Retirement Defined?

As usual, I prize your newsletters. But as I scanned and read, in particular the article “8 Secrets of Success From Early Retirees“, I was struck by the modern usage of the word “retirement”.

Webster’s tells us something along the lines of withdrawal from position, occupation or from active working life. Please know that most people see retirement as just that, no more money from your labors. Thus the fear.

People who do this and that to make extra are not retired, and cannot write authoritatively about the ease of living in retirement. Most of the financial gurus I read always object to complete retirement, or retirement as it truly means, and encourage second careers, part-time work, etc. Genuine retirement, complete withdrawal from working, does terrify the working woman or man. The word, as it was defined, that is.

Best Wishes,

Paul

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Hi Paul,

Thank you for taking the time to write and for your kind words regarding our newsletters. We’re really glad you enjoy them!

You are not the first to write and question the word “retirement” and what it means in modern society. Boomers seem to be changing the concept of retirement and want to do more with their lives away from the conventional working world. They don’t want to sit in a rocking chair and watch the world go by. They want to utilize their talents in many different ways, and they want the freedom to be able to do this, whether or not they get paid to do it or by volunteering or mentoring.

Actually, we know very few people who do “nothing” in their retirement. “Complete withdrawal from work”? What if you do house repairs? or work in your garden? or babysit the grandkids? or manage some properties to finance your retirement? or manage your financial portfolio? or help a neighbor out by driving her around and she gives you $20? Or dog sit a friend’s pet and he pays you for your time and gas? I mean, the lines get blurry pretty quickly. We believe that “work” is part of being alive, part of any healthy lifestyle. Just because someone is no longer receiving a regular paycheck does not mean they can no longer be productive, paid or not.

Opportunities abound when one does not have to work, and a person can take advantage of these opportunities or not. To be sure, we have turned down countless possibilities during what we consider to be our “retirement” because we didn’t want to work that hard anymore, or because these opportunities didn’t suit us.

When we first left our jobs to live off our investments (and we did this for 15 years before we wrote our first book or had our website), there was no real word for what we were doing. Had we even thought about the words “financial independence” we would have selected those words to describe us (and our website). But mostly, those words described multi-millionaires, sports stars, Bill Gates, movie stars and such. It was not a word that was brought down to usage by the regular folk, whom we consider ourselves to be.

You might want to take a look at a piece we  wrote some time back called Our Money Our Lives which goes into this topic a little bit more.

Ultimately, we aren’t concerned with what label someone places on our lifestyle, and we don’t worry about fitting into a description by Webster’s Dictionary. We felt we had valuable information to share with others on how to save for their lifestyle outside of working for a living and how to manage their spending after they quit their jobs. This information has merit whether or not we are considered to be “retired” or “financially independent” and we felt moved to share it.

Thank you again for writing, Paul. You bring up a popular question and we are grateful to be able to respond to it from our perspective.

Wishing you all the best,

Akaisha and Billy

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Car Free Is the Way to Go

I read your article about living car free, and about two years ago after living in Costa Rica for 9 years decided to move to Chile, and sold my car there in CR. I have lived now in Central, South, and North America, Europe in a number of countries, Vietnam, and in two months am heading to Thailand to live permanently.

I find that what you have discovered is easily proven by anyone who loves to travel such as us, and anyone who wants to be real about being retired on less money.

I looked at the overall expense of owning a vehicle and decided that even using a taxi when I needed to get around was far less expensive than ownership of a car for the very reason of all the expenses involved with ownership. You can even find some really good rental deals on a short time basis if needed, and it is still far less than annual expenses of ownership.

Don’t be pushed by your problems. Be led by your dreams.

It has been interesting to read your site and compare my notes with your experiences. We do not always agree on places good to live but the general concept is great.

My research indicates that Chiang Mai, Thailand is one of the least expensive places in the world to live a high quality life, and I would recommend it to any of your readers for quality of life, great medical treatment for 20-55% less than the USA, and security and a great place to experience another culture while still having a strong expat community to support you. And who can complain about the Thai food? Right?

So anyway, I just wanted to reinforce your ideas about living car free…it is a challenge at first figuring out what to do about transportation wherever you live, but once that perception is overcome, then the rest if smooth sailing.

By the way, the figure of about $2000-$2500 resonates with me well because I have found that I can live for around $12-$1500 nearly everywhere I go now, and have some left over for the travel that I love…some areas are little more and some are a little less but what a great life!

I teach English classes online for a little supplemental income and can do that from anywhere in the world on my own schedule, so that is another suggestion for your readers to consider…It brings me from $400-$1500 per month working only a few hours per week from home or anywhere I have high speed internet access, even living in Thailand in a hotel for less than $500 per month total….

Best Regards,

Robert

Retire on $22,000 yr. Travel the World. FREE Report Click here

Hi Robert,

Thank you for your thoughtful email with all your observations about car ownership or the lack thereof. We are all on the same page on this topic! And your spending figures seem right on target also.

Your idea of teaching English online is an excellent one – We have recommended this option to people before, and the fact that you are doing it and it is supplementing your income so well just shows how great it works.

Thank you so much again for taking the time to write and we hope you stay in touch.

Be well,

Akaisha

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Comments on Getting Out of the Rat Race

Hello,

I am a 44 year old Australian women who has recently discovered your e-book, newsletter & blog and I have to say it has inspired me. I have started using your spreadsheet and documenting all of our spending. We have no children and love travel so are looking at ways to decrease the time we spend at work and increase our travel.

I was particularly moved by a letter written on your site by Peter a 61 year old (also Australian) wondering why he feels the need to escape the rat race and if other people feel like that too. Peter – I would say most readers of  Billy and Akaisha’s website probably feel the same. I also regularly think about quitting my job, sell everything and just escape the rat race. However I know that one day the money will run out so can’t afford to do this (not yet anyway!!!). My husband & I don’t earn big money and already lead a pretty simple life but I am now looking at ways to simplify more.

Simplify, simplify, simplify

Like Peter, I also struggle with why I feel this way – why do I want to just escape it all when others seem very happy to work 5 days a week and just have their 4 weeks annual leave. We are constantly reminded in Australia how we should feel lucky for our 40 hour weeks (however I know few people who work only 40 hours) and our 4 weeks annual leave. BUT – that is not enough for me. As Peter said in his letter I don’t want to wait until some life changing event such as major illness to realize this. I also wonder at times why do I feel this way – is there something wrong with me – why can’t I just be content with my friends, family, nice job, reliable car, and reasonable home??

Peter maybe there is nothing wrong with us – maybe we are the normal ones realizing there is more to life and having a never ending curiosity to see and experience the world. I work as a Social Worker and my husband a nurse – we meet many people who either never make it to retirement or once they reach it, they are too unwell to enjoy it. That is my biggest fear. Peter – just do it. Sounds like you are financially safe and at 61 I think it is more than reasonable to want leave the rat race behind. Convince your wife life is short – get out there & I look forward to meeting you out there in some far flung corner of the world.

Maree

Hi Maree,

Thank you for taking the time to write and to let us know how you like our website, book and newsletter. It is wonderful that you are already using the spreadsheet and that it is working for you! Excellent.

I thought your response to Peter was also really good – Not everyone wants to work all their lives and take a 4 week vacation. This might work well if you are raising children and want that sort of stability, but even so, we have seen many traveling families. The children are very flexible, have great self-confidence and speak several languages due to their travels. So there are different ways to live a life.

There is nothing “wrong” with people who want something different. I just think that is life. There have always been travelers – those who brought products from one culture and shared them or sold them to another. Look at the ancient Silk Road or the explorers who wanted to know what was just over that ridge.

Some people want security and sameness and others want variety and challenge, something new. There is no one way to live life.

Welcome aboard! Please feel free to write any time. We’d love to hear from you again, so do keep in touch.

Best!

Akaisha

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Q&A From an Aspiring Near-Term Retiree

Hi Billy/Akaisha

Craig: I have read your web site many, many times & researched my upcoming retirement from much of your tips.

Hi Craig,

Thank you for your kind words regarding our website, and we are happy you found our site to be helpful!

Craig: I am actually starting to visit different international sites to “recon” where to retire. My first trip is to Mazatlán, Mexico next month. Then every 4-6 months to check out as many places in the next 3-4 years. Thinking I’d like access to ex-pats to mix back home with new cultures. 100% committed to leaving the USA. Have a 6-8 point criteria of what I think I want.

Akaisha: It’s good that you have a 6-8 point criteria for what you are looking for. It’s much easier to find exactly that spot when you know what pleases you.

Simplify and set yourself free.

Craig: I vacationed recently in the USVI & loved the island but a little expensive. One question I have to ask is: what made you pick Nevis to retire and do you ever get “small island” phobia where you need to get off for a while or does your travels just naturally take care of that? Part of me thinks a 36 sq mi island would run out of options after a few years???

Akaisha: When we first retired, we moved to Nevis, but didn’t stay. We wanted to travel the world, so actually, we don’t really “live” any one particular place, and we live in many. We have a base in Chapala, Mexico, another one in Chiang Mai, Thailand, another in Panajachel, Guatemala and we have a small manufactured home which we rent out to a friend in Arizona.

We perfectly understand what you mean about getting small island fever and not having enough to do in a location. This is why, for us, we tend to choose large towns or small cities which have access to larger cities for all the benefits that larger cities bring, but without all the traffic and confusion. Since we don’t have a car, our locations must have good access to public transport to take us to markets, to doctor’s offices or to restaurants and theaters and so on. It’s also been beneficial to have access to an active Expat population, just for the camaraderie and to speak English with someone.

Craig: I think I’m doing all the right options to get to where you guys are at: however, I’m 58 years old so it took a little longer. Sold paid-off house last year, invested proceeds, no debt at all.

Akaisha: Congratulations on having no debt! That’s huge.

Craig: Renting now. Just shy of a million dollars in retirement & taxable accounts. I wonder the annual expense to live retired, $30K @ year, $40K, $50K. My goal was to create a dividend stream of ~$30K @ years and take social security @ 62 for little extra, perhaps $15K annual. Work is burning me out so not sure I can even make it to 62.

Akaisha: You might want to take a look at our Annual Spending Update which includes a link to  Adventures in Financial Independence. This might give you an idea of how it can be done.

Craig: Just looking for friendly advice. A friend of mine recently pointed me to a good site which gives great advice on how to expatriate & helps you with process of naturalizing to a new country.

Akaisha: I am happy to introduce you to an Immigration Attorney from the Dominican Republic who will answer any questions you might have about second passports, residency and even having a business in the Domincan Republic. I will send you this introduction email shortly. Her name is Maria Abreu and she is quite capable.

Craig: I recently Googled ex-pat blog sites to start writing to expats on their experiences. Have 3 I signed to.

Akaisha: You might also take a look at our Relocation Page which has many Expat blogs listed there.

Craig: My destination choices remain in the Central America / Caribbean area right now. Similar time zone to USA/Canada. Not ready to move to Europe or AsiaPac right now.

Akaisha: I understand. While Asia can be a great choice, it can seem to be very far away. Plus it takes much longer to get back to the States for visits or emergency family issues.

Craig: Keep up the great web site writings and advice to a growing boomer wave of upcoming retirees.

Akaisha: Thank you for your kind words and do feel free to write any time with questions you might have.

Wishing you all the best,

Akaisha

 If you are interested in receiving an email introduction to Maria to find out about residency in the Dominican Republic or how to obtain a second passport, send us an email to TheGuide@RetireEarlyLifestyle.com

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Simplistic Ways to Save More Money for Traveling

By Jane Brown

When I talk with friends or relatives about regrets or wishes as it pertains to their lives, the one topic that seems to come up most is the regret of not traveling more. In some form or another, they wish they had both the time and the money to be able to explore this beautiful world we live in. However, the distractions of maintaining a certain status quo or even maintaining enough money to supply their immediate needs makes accomplishing their inner most desires a lot harder than they imagined.

I for one certainly understood where they were coming from. I mean from paying the monthly bills to taking care of unexpected circumstances, the ability to save and find time for the things you enjoy the most is often hindered by one thing or another. How can you feel great about exploring Europe when you have a mortgage to pay or student loans with mounting interest? Naturally, we choose to pay the bills than to seek our own happiness.

Compare international retirement destinations, click here

However, in time, I learned to change my way of thinking and decided to learn how to live with less and still find the time and financial means to enjoy desires such as traveling the world.  I want to share some of these ideas with you…be warned that for those who are new to budgeting and sacrificing, this advice may come as a shock, and even be downright challenging to follow through on, however, I can promise you that if you do, you’ll find that sacrificing certain things we believe we need in life can afford you the life of your dreams.

Reevaluate Your Needs

The biggest part of the problem for many of us is that we believe we “need” certain things that we may essentially be able to live without. When you consider the fact that there are countries and individuals that go without much more than three square meals and a hut, you can really understand that we’ve redefined necessity from what it actually is. I’ll need you to be really honest, and as much as it might hurt you to sacrifice certain things when you see the abundance of income you’re wasting and the amount of money you could be putting towards traveling and creating experiences, you’ll be glad you made the sacrifices. Not sure what I’m referring to? Check this out:

  • Your Cell Phone Bills – According to Time Magazine, while the average mobile phone bill (basic) could cost about $47, the average American consumer pays double or even triple that amount each month. So why not cut back? Yes, it’s a convenience to be able to do everything from talk to shop on your phone, but is it a necessity? Cutting back on your cell phone services could save you $50 or more per month. Over the course of a year, you’re talking a savings of $600 or more! What a trip that could be.
  • Eating OutForbes Magazine reports that the average American goes out for lunch at least twice per week spending at least $10 on each meal. This means that they’re essentially spending $936 per year (and this doesn’t even cover eating out for dinner). I’m certainly one for fine dining and new cuisines, but if you took a fraction of that money and created these meals in your own home do you know how much you could save? Even cutting this cost in half would give you $468… so now your total for cutting back on cell phone bills and dining out puts you at a savings of $1,068.

I could go on for days on how we could reevaluate what we define as a necessity and save a ton of money, but these are the simplest and often easiest to cut back on. Now let’s get into ways you could actually save money on your traveling expenses so that you could stretch your $1,000 annual savings even further.

Research and Plan

It goes without saying that most Americans prefer instant gratification. We dream of going on tropical vacations, but won’t do what it takes to save. We long to quit our jobs and own our own businesses but won’t put forth the time it takes to develop and grow our ideas…. Do you know by simply researching and planning for your vacations, you can save yourself a boatload of money? Here are a few suggestions:

  • Booking Sites – Did you know that there are hotel booking sites that will offer you discounts for booking rooms through their sites? Hotels need tourists in order to sustain business. As such, they are often willing to give you great offers on rooms and other accommodations that you’ll need to enjoy your vacation.
  • Plan in advance – when you plan in trips in advance, it’s a lot easier to save for them. Trying to come up with $1,000 in a month is a lot more challenging than trying to come up with that much in a year. Start planning your trip for next year now and you’ll find it’s a lot easier to save. Not to mention it’s also very motivational because you’re saving towards something enjoyable.

I hope that I’ve been able to shed some light on how making certain sacrifices and really evaluating what you’ve defined as a need can help you to get a lot closer to traveling and exploring this beautiful world we live in. While it may take time and a bit of determination, in the end you’ll be glad that you made the decision.

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A Retiree Must Have: A Great Bike

by Jane Brown

One of the best things to do, if you’ve made the commitment to retiring early, is to downsize. Getting rid of clutter is cathartic and, studies show that people with less clutter are happier and more organized than those who live with a lot of mess. Another great reason to downsize is that it can be profitable. For example: downsizing from a big house to a small cottage or condo will give you a nice windfall to help pad your retirement accounts. Another great way to downsize is to trade in your four wheels in favor of something that runs on two.

Motorcycles: downsizing for the retired set. Seriously!

Motorcycles are cheaper, use less fuel and allow you to see the country in a way you just can’t accomplish from behind the wheel of a car. And, before you try to insist that “bikes are a young person’s game,” you should know that retirees are more likely to choose motorcycles than other age groups. According to an article in the Sacramento Bee, retirees make up more than half of California’s motorcycle riding population.

So what do you do? How do you make the leap from car driver to bike rider?

Get Your License

A car driver’s license is only applicable to cars. To be able to legally ride a motorcycle on the road, you are going to need to get a motorcycle license. A lot of the time, people who want to get a motorcycle license will have to take a class and learn how to ride a bike from a professional before they’re even allowed to take a written test. Of course, each state has different requirements for how to do this, so check with your local DMV about the specific procedures you will have to follow.

Not sure you can retire? Get answers here

Buy Your Bike

Almost everybody who decides that they want to buy a motorcycle thinks that they want a giant Harley Davidson bike; the kind you usually see in movies and on TV. This might, in fact, be the perfect bike for you depending on your personality and how much traveling you plan to do on two wheels. Before you plunk down a stack of cash, though, do some research. Take some test drives. You might find that a Yamaha or even a BMW (yep, they make bikes too) is a better fit.

Get Insurance

Motorcycles, just like cars, need to be properly insured before they are taken out on the road. The good news is that motorcycles typically cost less to insure than cars. And, just like with the bike itself, the more time you spend doing research and comparing rates, the better able you will be to get the cheapest motorcycle insurance California (or whatever state you live in) has to offer (with the best coverage, of course).

Plan Your Trip

There are a lot of great motorcycle trips to take in this country. A lot of them are right in California. The Pacific Coast Highway, for example, is one of the most famous and well loved motorcycle roads in the country. Of course, now that you’re retired, you don’t have to stick to local roads. You can take off and explore Going-to-the-Sun Road in Montana, Twisted Sisters in Texas, or the Tunnel of the Trees in Michigan.

Don’t Totally Give Up Your Car

It is going to be tempting to completely give up your car. After all, you have a bike to get you around now! Here’s the thing: while motorcycles are great for day trips and exploring and just getting out and enjoying the road, they are not so great for hauling groceries or taking someone to the doctor. And, unless you have a Zipcar membership and there’s a lot for them nearby, you should keep at least one regular car on hand for these sorts of trips. You don’t want to take a cab to stock up on groceries, do you?

There are lots of ways to downsize and to set up your life so that it is better suited to travel and spontaneity. Getting a bike is just one of them!

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Retiring Early? Yes You Can

 by Jane Brown

We all dream about retiring early. Unfortunately, for many people even to be able to retire at all has become a pipe dream. Social Security isn’t the robust funding mechanism it was intended to be. Interest rates are incredibly low and the economic boondoggle of 2008 decimated a lot of retirement savings accounts.

The good news is that retiring doesn’t have to be a pipe dream. It is something that can actually happen. And, if you’re careful, responsible and work hard, it can even happen early. Yes, being careful and responsible now seems really lame, but wouldn’t you rather put the work in now so that you can goof off later?

What does being careful, responsible and working hard look like? It looks like this.

Find a Job/Keep a Job

Our parents and grandparents might have found a job at 18 and stayed with the same company until they were ready to retire. This isn’t really how we do things these days. While the myth that adults will have as many as seven careers in their lifetimes might not be completely true(1), more and more people are choosing to start entirely new careers in their 40s, 50s and even 60s.

Don’t be pushed by your problems. Be led by your dreams.

We’re not going to advocate that you never switch jobs or careers. If you find something more stable with better earning potential and benefits somewhere else, go for it! Follow your bliss! We are going to advocate, however, that you do your best to avoid long periods of unemployment between those careers. Lengthy periods of time spent out of work are a drain on savings (aka your retirement fund) and can put potential retirement benefits (like pensions) in danger. So, yes, you might hate your job. And wanting to leave is understandable. But don’t quit until you line up something else.

Stay Healthy

This probably sounds unfair as your health is not completely within your control. Heredity and environment play a large role in terms of which “big” health risks you might encounter (like cancer, alzheimers, etc). At the same time, there are things you can do to keep the controllable ones at bay.

There are a few pillars of health that you really need to mind: your sleep, your eating and your movement. Making sure to get enough sleep each night, eat as healthfully as possible and exercising regularly go a long way toward maintaining your health (2). Yes, sometimes opting for fruit instead of candy feels boring, but your body will thank you for it–especially when you are older and trying to enjoy your retirement.

Stay Out of Trouble

There are lots of ways to get into trouble. Drug and alcohol addictions wreak havoc on your health, your employability, your relationships, everything. In fact there are some employers who will hesitate to employ people who have battled addictions. This is why “anonymity” is such an important facet of rehabilitation programs.

Drug and alcohol issues can also lead to criminal records. In California, for example, thanks to its “three strikes” rule, someone who gets in trouble for even minor crimes can find themselves facing lifetime prison sentences. Work is being done to change the law and reduce sentences and crime classifications(3), it is still best to stay as out of trouble as possible.

Save Save Save

This seems obvious, but you would be surprised by the number of people who get close to retirement age before they start crunching the numbers, only to be shocked to find out that their Social Security payments and retirement accounts are not going to afford them the retirement lifestyles they’d been dreaming of. It is vital that you do some “extra” saving on your own to help pad those accounts. You can open up your own IRAs, yes, but in addition to that, high interest savings accounts and investments are another corner stone to funding a really great retirement (4). And, the earlier you start doing all of this saving, the earlier you’ll be able to retire.

The point is, if you want to have a great retirement, you need to start working on it now. Retirement is not something over which you should procrastinate. Otherwise you won’t ever be able to accomplish it!

Sources

  1. Bialik, Carl. (2010, September 4). Seven Careers in a Lifetime? Think Twice, Researchers Say. Wall Street Journal. http://www.wsj.com/articles/SB10001424052748704206804575468162805877990
  2. Miller, Justin. (N.D.). The Habits of the Highly Healthy. Lifehack.org. Retrieved from http://www.lifehack.org/articles/lifestyle/the-habits-the-highly-healthy.html
  3. California Drug Laws. (N.D.). Michaelshouse.org. Retrieved from http://www.michaelshouse.com/palm-springs-addiction-treatment/california-drug-laws/
  4. Ultimate Guide to Retirement: How Much Do I Save? CNN.com. Retrieved from http://money.cnn.com/retirement/guide/basics_basics.moneymag/index7.htm
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