Sunday, February 2, 2014

Retire by 30

I put in my two weeks notice at 29 and retired on my 30th birthday.

I've never used a retirement calculator without getting some sort of coding error. Retirement blogs set 65 as the target age, or a goal of >$1 million usd net worth. Retirement is not some sort of elusive dream or complicated math formula. It only requires that you prioritize retirement over material goods/services. I'll detail my finances below, but it's much like weight loss advice, if you burn more calories than you consume, you will lose weight.

save 1/2 of salary for 10 years.
have 5 salaries saved. (~6 counting interest)
buy an apartment worth ~5 salaries. 
rent it out for .35 salary per year. (.25 salary after taxes/HOAs)

so now you just have to live under 1/2 salary while working, and under 1/4 salary in retirement.

while working (big expenses):

housing (live with family or rent a garage)
food (don't eat out, eat less meat)
transportation (scooter, bicycle, or bus)
entertainment (drink before the bar, no smart phone)
clothes (goodwill, target)

while retired:

go to a country where 1/4 usd salary = the average salary.

from usa? go to brazil, costa rica.
from greece? go to el salvador or jordan.
from peru? go to nicarauga or cambodia.
from india? the philippines? go to nepal.

left: two garages i lived in

left: bike everywhere, shop at goodwill

***warning the following is political***

and once we're all living in nepal or somalia, global disparities will be understood.
if you fight for a place in influential society, you only make it more influential.
explore the world, live where it feels best, and fight for a place that you connect with.
by saving money you are using less resources and shrinking the human impact on the world,
and at the same time buying yourself more freedom in the future.


  1. I work with your dad and he sent me this link to look at. I have to say, these photos and your travels over the years are stunningly beautiful. I am envious of your nomadic existence. Enjoy every moment. As I set out on travels of my own, Id love to get input from you, as you have and are going to many destinations I am eager to see. Hope all is well on your end of the world. Cheers, Meredith

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  2. How old are you; have you done this or are you still saving up to do this? Because there are some problems with your theory, at least in the country where I'm living in.

    Firstly, if you save 5 salaries over 10 years you won't end up with 6 salaries counting interest because inflation is (almost everywhere at any time) higher than the interest.
    Secondly, with 5 salaries you can't buy and apartment in my country unless it's one that is half destroyed (by a fire for example) in which case the acquisition and renovation costs will be more than 5 salaries. You'll find a hard time buying a studio over here for 5 salaries.
    Thirdly, an apartment or studio worth 5 salaries won't net you .25 salaries in this country.
    Finally, I think it's really hard to efficiently let an apartment when you're on the other side of the globe. Over here when a tenant stops paying the rent you can't just evict him. You'll have to start a judicial procedure which can easily take up over 6 months, during which you have no income.

    The first three problems are easily solvable; since I'd clearly net less than .25 salaries I'd just have go to a country where the average living expense or salary is less than what I'd net. The last problem is, however, a real deal breaker since I might end up having no income and having judicial costs while having to live in a country where the living expense is high.

    1. (or having to travel back and forth all the time)

  3. Hey Steven, thanks for your post.

    I am 32, and have been doing this for 2 years. So the 'theory' has a long way to go, but so far so good. I actually have more in my bank account now than when I stopped working 2 years ago. I will try to address your concerns point by point. If you'd like specific information about your country, please let me know where you live.

    1. Interest vs. Inflation:
    S&P 500, Nasdaq annual return for the last 25 years has been ~6.5%, 8.5% respectively.
    This beats all but ~40 countries inflation rates.
    And that doesn't even matter because you will never need your own currency again, your accounts could be in USD, so you just need to beat the US inflation rate.

    2. PPP vs. Housing:
    Finding the average income for all countries has proven to be easier than finding housing prices. I will just use USA as an example, but would gladly research your country if you follow up.
    Average salary in USA $52,800.
    After tax ~$46,000 * 5 = $230,000.
    The average home in the USA is $189,000, here is a link to what type of house that can buy.
    On average the monthly rental price is ~1% of the price of the home. So in this case you would be making about $2,000 a month, minus HOAs, property tax, and income tax.

    So in USA it seems to work easily, for other countries I’d have to compare the average salary to home prices, but I assume the ratio between the two would stay pretty similar. But it doesn't really matter what the housing situation is in your country, just buy the property in a country where the prices work.

    3. Managing Property:
    True, it is tougher than if I was next door. My tenant pays online, so that part is simple. In the lease they agree to give 2 months notice or find a new tenant, so far the tenants have preferred to find a replacement than wait two months. I have a spare key with a neighbor if they get locked out. If I need to evict them I could just move into the unit, and then move out and rent it again. I also keep it slightly under market rate so it doesn't go vacant, and is easy for tenants to find replacements.

    1. Thank you for your reply. I'm from Belgium.
      The average income with a high school degree & no higher education is €1,453/month gross or €1,234/month net. This is €14,808/year net (=$18,510), multiplied by 5 gives €74,040 (=$92,550). The average price for an apartment is €226,560 (=$283,200) and for a house is €354,276 (=$442,845), both are considerably higher. The monthly rental price is 0.313% (in 2009, I couldn't find a more up to date number) of the price of the home.

      So, concluding; the salaries are lower, home & apartment prices are higher, and relative rent prices are lower. This means you'll get a much lower return in Belgium compared to the US.