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.
Years Old -- And Have Been Retired for Over Three Decades
Robert Brokamp, CFP of The Motley Fool
In the second issue of Rule Your
Retirement (published nearly 17 years ago), we profiled Akaisha and Billy
Kaderli. After careers in the restaurant and financial-services industries,
they retired in 1991 at the age of 38, enabled partially by living in exotic
but low-cost areas of the world. Every few years, we catch up with Akaisha
and Billy to see how their retirement is progressing. Here's the latest
Congratulations over 11,000 days of retirement! Not only were you able to
retire at age 38, but your portfolio is worth more than it was on the day
you retired. How have you been able to do it?
and Billy Kaderli: Thanks, Robert, it's been a great lifestyle -- one of
world travel, volunteering, meeting amazing people around the globe. We are
pleased with our decision of
so many years
For us to make this
work, we invested into low-cost stock index funds that have averaged about a
10% per year return including dividends and capital gains, specifically
SPDR S&P 500 ETF (NYSE: SPY) and Vanguard Total Stock Market ETF
(NYSE: VTI). From that 10%, we spend 4% or less, leaving the difference
to compound. Today, with both of us
receiving Social Security plus dividends
from the index funds, this covers our expenses, leaving our accounts to grow
changes to how you manage your portfolio or your budget these days?
and Billy: We continue to
our spending daily, monthly, and
annually, giving us the percentage of spending on a daily basis based on our
net worth. This tool has given us confidence at times of market turmoil or
when we have bigger spending outlays.
In 2008 we took
advantage of depressed stock prices and added the iShares Select Dividend
ETF (NYSE: DVY) to our portfolio mix, and Vanguard Information Technology
ETF (NYSE: VGT) last year. As we have grown older, now 65, we felt it was
prudent to protect our core assets and lightened up a bit on equities.
Currently we are balanced 50% stocks and 50% bonds/cash, but always looking
Also, as we are
approaching 72 with required minimum distributions around the corner and
with our low tax bracket, we started drawing down our traditional IRAs,
trying to minimize future tax liabilities. We then invest these monies back
into the market in our regular accounts using VTI.
Robert: How much
does your lifestyle cost a year?
Billy: We have been
spending $30,000 or less
annually throughout our retirement. As we are aging, and with our net worth
growing, we consider spending more.
Robert: If you could do it all over
again, is there anything you'd change?
Akaisha and Billy:
We would have started investing earlier and more often.
Not purchasing our home could have been a giant leap toward financial
Akaisha and Billy in Chiang Mai,
Robert: One strategy you've used is to
live abroad in countries with a relatively low cost of living. Where have
you been living over the past few years?
Akaisha and Billy: We have
been shuffling around Latin America, mostly basing out of
Lake Atitlan, Guatemala, and
Mexico. We have been to
the beach four times in the
last three months and visited Mexico's gorgeous
cities. Living with
the ancient culture of the
Maya in Guatemala has been an
unforgettable life-changing experience. From these countries, we also
visited Panama and the
Dominican Republic as well as the
Robert: We tend to avoid political
topics at The Motley Fool, but we're currently living through some
interesting times here in the U.S. Has that had any effect on you as
Americans traveling and living abroad?
Akaisha and Billy: None
whatsoever. We're currently living in
Mexico, and there is no
shortage of locals and expats with opinions on the politics in the U.S. as
well as the upcoming Mexican elections. We tend to avoid these divisive
conversations and go on living our lives.
One question we always ask ourselves, no
matter what administration is in office, is "How can we profit from their
We don't feel it's our mission to convert
anyone to anything and prefer to view ourselves as international goodwill
ambassadors. There is so much good going on everywhere, and we choose to
focus on that.
Robert: Do you still maintain a home
in the U.S.?
Akaisha and Billy: Yes, we
have what we call a humble abode in the Southwestern U.S. As an
housing solution, it covers all the bases.
Robert: Now that you are eligible for Medicare, how does that factor into
your plans for healthcare?
Akaisha and Billy: We both are on Medicare and look at it as a
catastrophic insurance plan, hopefully never using it. We still self-insure
in these low-cost countries, paying all expenses out of pocket. We have
received excellent, affordable care, even for
Medicare does not work outside of the
U.S. If something serious happened to either of us we could return to the
States and use Medicare. Otherwise we pay out of pocket.
In our opinion, the U.S. is missing an
opportunity to utilize lower-cost places such as
Thailand, which have
medical facilities that are as good or better than in
the U.S., thus saving Medicare millions of dollars. If Medicare was
available to be used at accredited places in such countries as listed above, expats could use them in the countries in which they live, and those who
live in the States could venture to countries that give excellent care.
Either way, the government would save countless millions of dollars and
everyone would benefit.
Robert: The FIRE (financial
independence, retire early) movement seems to have grown over the past few
years. You two were well ahead of your time! Have you noticed an expanding
interest in early retirement?
Akaisha and Billy: Yes,
definitely. We have met many of our readers
who have used us as a catalyst
to map out their own early retirements. It is a humbling experience to meet
these people in faraway places and hear personal stories of their journey to
We love the idea that more and more
people are becoming educated about finances. We maintain that becoming
financially independent is one of the best things you can do for yourself
and for the world.
Robert: Many proponents of the FIRE
lifestyle actually aren't truly "retired"; they supplement their portfolio
income with side businesses or part-time work. Is that your impression? Do
you have additional sources of income?
Akaisha and Billy: This
used to be a big deal with the "Early Retirement Internet Police" and we
on this topic, explaining the seeming difference between being "retired"
and being financially independent. The benefit of financial freedom is that
you can do whatever you want, including being a Wal*Mart greeter, and if
that includes making some money along the way, so be it.
In our case, our website does generate a small amount of cash flow, but we
were retired 15 years before it was born. We look at maintaining our website
as our volunteer
time helping others achieve financial independence. If it
ended tomorrow, it would not financially affect our lifestyle, but we would
miss all of the great people we meet through this venue.
Robert: In a recent episode of Motley
Fool Answers, we mentioned a New York Times article that discussed the
phenomenon of "un-retirement" – that is, people who retire but then go back
to work. The article quoted one woman who had this to say about life after
retirement: "I felt like I was free-floating, bobbing along on the ocean. I
felt very ungrounded." What advice do you have for people to make sure
they're ready for the transition to retirement – and the loss of identity
and social contacts that sometimes come with it?
Akaisha and Billy: Many
people think that retirement is a lifestyle of continuous leisure. While
everyone is different, we have always encouraged people to be engaged in
their retirement/financial independence.
One must plan for
of life away from the conventional working world.
We suggest to our readers to make a list
of all the things they want to do like mentoring, volunteering, learning a
new language or a musical instrument, getting involved in your community in
some capacity, re-homing abandoned animals, planning a motorcycle trip (or RV
trip) cross country, leaving a personally written historical legacy for your
grandchildren -- countless things.
When you do this, you will automatically
meet new people of common interests, and your own self-description and
identity are edified.
If someone moves into "retirement" (we
prefer the term
financial independence) without a list like that, they
absolutely will feel rudderless. Some have even written to us about "early
retirement depression," but once they learned to manage their newfound
freedom, their depression went away.
We would bet most financial planners do
not offer information on the emotional component of this new lifestyle.
Their clients may have the money, but without a plan to
self-expression and meaning in their lives, they will flounder. This is
something that can be avoided.
Robert: Any parting words of advice?
Akaisha and Billy: People
have commented to us that they cannot afford to travel.
With all that
travel offers, we'd suggest the viewpoint of "Can you afford not to travel?"
We would also suggest that you invest as
much as possible as soon as possible and let the market work for you. You
too can become financially independent, and it can be a very exciting,
meaningful time of your life!
Akaisha and Billy in Antigua,
To enroll in Motley Fool's Rule Your Retirement service:
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