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. |
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Escape the
9-to-5: Is Early Retirement for You?
Billy and
Akaisha Kaderli
You can
retire early to spend free time as you want; travel, study and
learn, play sports, pursue a hobby…
We did!
In 1991, at the age
of 38, we left our fast track lives, packed it up, sold everything, and moved to
Nevis, a 36 sq
mile island in the Caribbean. From there we started traveling
and haven’t looked back.
Are we living the
life YOU want right now? Is this idea appealing? Or maybe you have your own
special retirement dream that you want to live.
Where
to start
In order
to tackle the notion of early retirement, there are several key
questions that need to be answered. There are the tangible issues of
money, the matters of personal time management while retired, and
the very crucial but intangible subjects of
fear and risk
management.

Many
people put off the intention of retirement into the “someday”
category, like it will just happen on its own. Meanwhile, the
thinking, planning and saving components are neglected all together
until that illusive day arrives. For some it never does appear, and
for others its attainment comes with a mixed bag of things never
quite sorted out.
Our retiring early
challenged the belief system of everyone we knew. We heard
all sorts of
comments such as:
“Retirement is for
old folks.” “I could never sit around and do nothing all day.” “I couldn’t
retire unless I had a gazillion dollars.” “You’re too young to retire.”
What does it take?
What does it take to
retire early?
It takes a mixture of
desire, a plan of action and self-knowledge. Ask yourself: “Do I have any of the
three ingredients mentioned here?”
Believe it or not, some people
never want to retire. To have a blank calendar in front of them is
scary. They like routine and knowing what is expected of them day to
day. This provides
a
certain security and knowingness in their
lives, and this is what they want. Questioning this whole set up
would fracture their foundations. These people would not be a
candidate for early retirement.

Biking on
beaches in Belize If having
large blocks of free time to fill as you choose sounds exciting, if
pulling out
maps of the
world stirs a wanderlust in you, or if
pursuing a hobby or sports activity more fully makes you breathe
easier and brings a smile to your face, then you could put a
checkmark next to the first qualification.
“That’s
great,” you say. “I want to do it, I just don’t know how.”
Financial questions
Well ask
yourself. Are you a spender or a saver? Can you put off immediate
gratification for a more long range goal? Do you have any idea of
the amount of money you spend in a month? In a year? Or in any
particular category, like groceries, gasoline, clothing? When we decided to
analyze the notion of not working for money any longer, we had to get a firm
answer to the question of
how much
money we spent on ourselves in a year. When
we excluded the
expenses of
working (stylish work clothing, restaurant lunches,
travel expenses, car parking, dry cleaning, etc.), the expenses of
maintaining a large house (gardener, house repairs, cleaning service, insurance), and the cost of stress
releasers like high priced vacations, shopping sprees for the fun of it, the
expenses for large parties, and so on, we found out the exact amount of money we
spent just on us.
It amazed us how small this amount was.
This is where you
start.
We decided we needed $20,000 a year to live (1990 dollars. Today, 34
years later, we consistently spend around $35,000 annually for all our
travel, housing, transport, taxes and medical expenses.) It is from here that
you need to look at the investments you've made, and figure out how you could
pull out
your
annual expenses, including inflation.
We chose
to be heavily invested in equities, and still are. In the
very tough market crash, (2008) we did reduce exposure, but not enough to
escape it entirely. However, our net worth today is higher than when
we started, after expenses and inflation. Our plan is simply,
reverse dollar cost averaging, selling shares as needed and we try
to prevent losses due to market downturns whenever possible by
holding a cash reserve.
Of
course we use
low cost tax advantaged ETFs
like VTI, Vanguard Total Market, to
facilitate this. The withdrawals could be set up automatically, but
we choose to direct it, and with today’s internet available
worldwide, it is easy. The money is then transferred to a money
market account with check writing, debit card and bill paying capabilities.
Also, because of our
71 years young we receive social security and dividends from iShares Select
Dividend ETF, DVY and SCHD, Schwab U.S. Dividend Equity ETF.
Between those two we pretty much cover our current expenses.

Sailing in Brindisi, Italy The
lifestyle
Ok, we’ve
got the bills paid, but how do we travel to exotic locations on
around 35K? Remember,
retirement is a lifestyle, not a two week
vacation. You are going to spend “X” Dollars per day staying at
home. But, why not fly or bus to some place interesting, get local,
and rent a furnished apartment, an AirBnB or stay in an inexpensive hotel?
You could even
house sit.
Getting local means
having fun shopping at local food stores, like a salumeria in Italy or France, trying their products, and meeting
folks who live there and learning where and what the “bargains” are. Make a game
of it, have fun and don’t take things so seriously. Remember, it’s a lifestyle
and you don't have anything to prove to anyone.
Online travel blogs,
like ours, are excellent sources of information ranging from hotels to interesting things
to do, most with prices quoted. The longer you stay in these locations, the more
your expenses will be amortized and soon you will find you’re spending the same
or less than at home.
Examples
For example, we have
been traveling the world for some time now. Certain countries cost more in every
category such as housing, food, transportation and entertainment. In these
locations, our daily average skyrockets. But then we will Geographically
Arbitrage our expenses to lower cost countries, and our cash output drops like a
rock. When you
track your
data, financially, you know where you are every moment.
Are you getting our drift?
Spending numbers
Because
we track our spending daily, a habit we formed from running our
business, we know that some days the average goes through the roof
(travel tickets etc. can spike these days), while on other days we
spend little or nothing. But when we add it up and divide by the
number of days we’ve been retired, our daily average is well within the
range of
$35,000 per year.
OK,
enough with the numbers…it’s time to take the leap of faith.

Boarding a
bus with a machete in Ecuador Tricky
third ingredient
The third
ingredient is a little trickier: self-knowledge. There are many ways
to do this and there is no one-size-fits-all. You’re in charge of
your life so make it what you want.
What kind of person
are you? Can you stand apart from the crowd? Do you need constant excitement?
What are your housing requirements? Do you want to keep up with the
Show-off-skis? Can you entertain yourself? Do you like nature? The city? High
priced toys? Is your spouse on the same page as you regarding this goal? What do
you like to do with your time, and do those things require high financial
maintenance? Do you enjoy variety?
Volunteering? People? Routine? Travel? What
would you do if you had a blank calendar ahead of yourself? Or if your phone didn’t ring? Or if
you didn’t receive a paycheck? Can you adapt to change?
Making the list
Part of our
Pre-retirement program was to list all the things we wanted to do and learn,
places we wanted to visit, books we wanted to read, and anything we were excited
about.
This list is very
important.
If you
cannot come up with a list, or if watching re-runs of TV shows is on
it, you are in trouble. The purpose of this list is if and when
there is ever a bored moment after retirement, or if you ever wonder
why you took this leap, then take that list out, look at it, and
remember why it is that you wanted to retire in the first place.
This
gives you the impetus to move forward, off any block of inertia.

Akaisha and Luigi, the boat
owner, having a laugh, onboard in Brindisi, Italy
The more
you know yourself, and your “requirements” for fulfillment, the rest
just falls into place. Once you are comfortable in your new
lifestyle of financial independence, and are self-assured in this
placement, all sorts of opportunities present themselves. The
possibilities are limitless, and
it is only you who
hold yourself back.
Over Three decades of
adventure
Since we have left
the conventional working world, we have visited dozens of countries, played
tennis worldwide, took foreign cooking courses, volunteered teaching English as
a second language,
built
tennis courts in a small city in Mexico,
taught Thai
massage to the locals in Mexico, imported a basketball scoreboard for the
gymnasium, taken thousands of photos,
written ten books and stories for
magazines and newspapers, hiked, biked, bussed, trekked, scuba’d and made many
lifetime friends along the way. No paycheck could have ever bought these
experiences for us nor given us the gratification we have received.
Because of our
lifestyle, and the freedom to design how we spend our time, we have also been
fortunate enough to do End
of Life Care for our parents. These occasions to do
so were priceless for the both of us.
Risk, safety and
guarantees
Some have said that
they admire what we are doing, but they think it is too risky for them.
Life
itself is a risk.
There are no guarantees for anything; health, marriage,
bear markets, the unexpected, weather, tragedy. Since we have been retired,
we have
"survived" all sorts of things including SARS, the Asian Bird Flu, the bear
market of 2000, the first Gulf War, the market crash of 2008, COVID, deaths of friends
and family, even some
emergency trips to
the hospital and some funny traveling debacles just to name a few.
Risk has a price,
and so does security.
Why not live the life
of your dreams? Do the mental and physical examination, have faith in yourself,
and perhaps we will meet on this Road Less Traveled.
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Retire
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.
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