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.
Billy and Akaisha Kaderli
Billy and Akaisha relaxing in Puerto
The challenge was not
realistic. No matter how hard or long we worked, we couldn't compete with Bill
Gates' net worth. It just wasn't going to happen.
Once we got that
fantasy out of the way, we asked ourselves:
How much money is enough to retire? What size of nest egg do we need?
Obviously, this is a
personal decision, and it's one that should be taken seriously.
When we first
retired, the amount we required to live per year was determined to be
$20,000 (in 1990 Dollars), and it needed to be generated from our financial holdings.
But what amount of capital would do that for us? And how would we allocate that
sum of money? Stocks? Bonds? CDs? Annuities?
How one invests his
or her money is a question of risk management. Many years ago, we learned that
we could be owners (equities) or lenders (bonds). Through business experience,
we realized that we could make more money owning a business than lending money
to one, though the risks are greater.
Working in the
brokerage business demystified the stock market for us. We had owned stocks for
years, so we decided to use equities for our portfolio.
The fact that stocks have produced a
compound annual growth rate of over 10% for
the past 70 years made investing in
equities a common-sense approach for us, as well as a risk we were willing to
Once we made this decision, the
math was easy. For every $100,000 invested,
approximately $10,000 in annual income could be
produced. So, bare-bones, we could meet our goal on just
$200,000 invested. But that's cutting things too
closely, and it did not allow for inflation,
emergencies, unexpected expenses, or market downturns.
In fact, a much safer withdrawal rate is in the
4% a year. But we did discover that we
were on the right track to achieve our financial
If stocks are too
risky for you, and if you prefer CDs or bonds, the size of your nest egg will
need to reflect your preference and the lower returns that it will generate.
There is no "one size fits all." When it comes to your portfolio, you must be
comfortable and confident with your personal risk tolerance.
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Do you ever have
When you reach the
amount that allows you not to hold a job any longer, your life opens up. You
might choose to work, but you no longer have to do so. When you reach this
stage, the income generated from your financial holdings supports your base
Once the funds for
comfortable living, gift-giving, and emergencies are covered, how much more do
you need? "You can't take it with you" is a common phrase, and it's true. In the
game of life, the one with the most money doesn't win anything different from
the one that came in last. We ultimately all get the same prize. So what we
choose to do with our time and money here is up to each one of us. How do you
want to spend your money and time?
realistically decide what lifestyle you want to live and what your desires are
for your future. If you want to buy yachts and fabulous cars, or utilize
high-end travel and dining options, then perhaps you need to keep working. If a
simpler lifestyle appeals to you, then you could need less than you think. Some
experts say that 25 times your current expenses is an excellent starting point.
If you're confident that your portfolio can produce enough income to cover your
expenses, plus inflation, we believe you're already there. It's really that
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