Retirement; like your parents, but way cooler
In 1991 Billy and Akaisha Kaderli retired at the age
of 38. Now, into their 4th decade of this
financially independent lifestyle, they invite you
to take advantage of their wisdom and experience.
How to Fail at Early Retirement
Billy and Akaisha Kaderli
First, let me say Billy and I don’t really use the word “fail.”
believe every situation offers learning opportunities, and calling that experience a failure just doesn’t jibe with who
we are. In our lives, we want to move forward with the knowledge and
wisdom we’ve gained - not benchmark it emotionally by calling it a failure.
read Financial Samurai’s
Sam Dogen's piece on
how he claims to have failed at
We have great respect for
anyone who puts their personal life out there to the public as
a source of
education and benefit for others, and Sam has done that.
retired at age 34 with 3 million dollars - six times
more than we had,
30 years ago. Now, at age 42, he claims that he
“failed” at early retirement (even with $250k passive annual income -
what the average retiree has, for the following reasons.
OPEN to your opportunities
had a child
(with all the costs involved including education at kindergarten level at
underestimated how low interest rates would go
(he’s invested in bonds, real estate and dividend-producing stocks)
Rising health insurance premiums for his healthy family
(which continue to rise in order to subsidize those who are less healthy)
bliss of early retirement didn’t last as long as he thought it would,
or in other words, he now wants to do more than play tennis and sleep in.
(This statement is bewildering to us for several reasons.)
Options, Choices, Opportunities
at Retire Early Lifestyle
have always focused on providing our readers with options. There is no
one-size-fits-all for anything, so why try to fit into a limited description
of your retirement?
don’t believe Sam has “failed” at early retirement, we think that he is
locked into his own personal version of “limited
Eliminate your Stinkin’ Thinkin’
the continuing education of our readers, let’s look at his reasons one at a
$250,000 annual passive income, (the average retiree
income in the US is $48,000 before taxes) Sam and his family could
live in countless places in the US - or in the world - for that matter.
Sure, San Francisco is an internationally-known, cutting-edge, beautiful
city. But it’s not the ONLY beautiful city, nor is it the only cutting-edge
location in which to live.
readers know that the most expensive category of spending in a household
budget is the cost of housing. Now in Sam’s case, he has his mortgage paid
but he is still responsible for maintenance, insurance and property
taxes which can be sizeable in California. AND, San Francisco is a
tremendously expensive location.
Sperling's Best Places
of living indices are based on a US average of 100. San Francisco’s cost of
living comes in at over 269, so you can clearly see that this choice of a
domicile places a lot of financial stress on anyone’s income. Even with
Sam’s mortgage paid off, and even with $250k annual income.
suggest to anyone wanting to learn from our experience that deciding on a
retirement location is one of the basics of building a successful
retirement. Saving on the cost of living and
the cost of housing is a
substantial factor in your financial independence planning.
world is a big place, and even if you don’t want to leave the US, there are
hundreds perhaps thousands of choices of towns and cities that are filled
with natural beauty, have leading-edge restaurants, and state-of-the-art
music, museums, and events. And today with the
internet available does it really matter where you are located?
advantage of our
consider possible places that will fit into your retirement budget.
Having Children changes everything
However, having a child does not necessarily limit one’s ability to retire
early. We see families all over the world who have retired and who manage
their family expenses without needing to go back to work.
The Johnsrud Family
employs several creative options to manage this, and in their case, chose to
be stay-at-home parents of five children instead of going back to work. –
Not that it’s terrible to go back to work. It simply
depends on your desires, priorities and values in your particular situation.
Chris Mamula of Can I Retire Yet? chose to relocate and
Jeremy and Winnie of Go Curry Cracker are still traveling the world with GCC
The Denning Family (now with 6 children) are choosing to travel the world in
order to give their children a world education and perspective.
of course, Mr. and Mrs. Money Mustache are raising their son without
returning to their previous careers.
We’re not knocking Sam's choice, only demonstrating that there are options available, should you be
open to them. With a little rearranging of some mental furniture, you might
still be able to have your financial independence, your children and
your free time. What could be better than
personally molding your child’s future rather than ship them off to a
daycare center where strangers will be raising your child? A luxury that few
Changing interest rates
No one can predict the future.
people say that
the stock market is dangerous, but the bond markets are not
guaranteed either. Sam found this out, when his bond investments began
yielding less than he prepared for, affecting his annual income.
though Sam is not keen on taking more investment risks, he is already taking
more risk than he realizes. His bond income is barely matching the national
inflation rate of 2.1% and most surely lagging Bay area numbers of 3%. At
his age of 42, we think he needs to have some growth equity holdings such as VTI,
Vanguard Total Market Index, offsetting inflation and
growing his portfolio.
Then he could sell off shares at a favorable capital gains rate making up
his lost income from his bond portfolio.
dang healthcare situation
cost of health care premiums, especially for a young couple with
children, can be a conundrum.
However, there are still options available. If
one spouse is working, then often that health care policy is an answer.
There are also health-share ministries and medical tourism, or – again –
one can move to a location where the cost of policies and medical procedures are
not sky high.
Health Savings account (official or private) is very helpful and
choosing a high deductible will lower the monthly premium costs. Some
now take cash (which lowers the cost of procedures) and there are
articles and websites online to help you locate one near you. Some doctors
even offer affordable annual memberships called concierge
medical services, which allow you so many doctor visits, x-rays, and
common procedures for a fixed affordable price.
While frightening to some, there are viable alternatives such as
medical tourism, and
Going Naked. We
have often mentioned the cheapest health insurance is a ticket to
Thailand, a city world renowned for its top notch medical care.
Retired or dead?
Sam’s last reason for his seeming “failure” at early retirement simply makes
no sense to us.
Perhaps calling one’s self
financially independent instead of “retired” carries less emotional
baggage with it. So many people feel that when they “retire”
never want to do another productive thing in their lives
because it sounds too much like work or because someone from the "Retirement
Police" will judge them.
they think they “shouldn’t” make any money selling their expertise or put
their energy towards
a volunteer project that continues to grow out of the
original small idea.
say there is no end to learning and no end to volunteering as there is need
everywhere. Personal growth doesn't need to stop, and who wants to do
“nothing” and only sleep in when you have 40 or 50 years left of your life
Sure, “sleeping in late” can be delicious… but what are you going to do
tomorrow? That's a recipe for listlessness and
financially independent lets you choose what you want to do with
your time, where you might want to live, and what you might want to create
or invent. There is no rule that says you have to drink Margaritas all day
on every beach in the world, or sleep in and only play tennis or golf.
Financial Independence is
freedom personified. Create
your own path of
yes, choosing to live in San Francisco or another very expensive location is
an option you may want to implement. We would simply suggest that you not
call your choice of going back to work as your “failure
of early retirement.”
Instead, take everything you have learned and all your wisdom into your next
interpretation of you.
About the Authors
Early Lifestyle appeals to a different
kind of person – the person who prizes their
independence, values their time, and who doesn’t
want to mindlessly follow the crowd.
Retire Early Lifestyle Blog
About Billy & Akaisha