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By Billy and Akaisha Kaderli, RetireEarlyLifestyle.com
Special to Financial Independence Hub
Once someone learns that we retired at the age of 38 in 1991 and have been traveling the world ever since, they ask, “How could you afford such a lifestyle? It must cost a fortune for airfare, to live in guesthouses, hotels, apartments and eating out!”
When we tell them that this lifestyle hasn’t cost us anything — in fact, we made money — they’re floored. Remember, it’s a lifestyle, not a vacation.
When we left the conventional working world in January, 1991, the S&P 500 Index was 312.49. Today it is over 5300. That’s an average of roughly a 10% per year return including dividends. See the calculator below.
The S&P 500 Dividends Reinvested Price Calculator
Sure, we had expenses, but our net worth has outpaced both spending and inflation because we created a money machine.
The cost of not retiring
Whenever we’re considering a trip, we ask ourselves, “Can we afford it?” Our answer shocks some: “We can’t afford not to go.”
We’re no spring chickens at 72. We’ve experienced enough in life to know that we will be more disappointed if we don’t try new things than if we make mistakes at the ones we attempt. We’re only getting one shot at this life, and find that our travel list is getting longer, not shorter.
Over the years many of our friends have passed on: some who never got a chance to retire from their jobs, and they had plenty of money. For the last 3 decades we have been spending about $30,000 per year. We have mentioned a few times about loosening the purse strings and this is what we have done.
We have seen dozens of countries, stayed in resort hotels, purchased new computer equipment and digital toys, refreshed our wardrobes countless times, drank fine wine, had maids, gardeners, and ate at some of the most fashionable restaurants in the world. We have hiked, biked, and scuba’d, lived on tropical islands and in million dollar homes, lived with the Maya, met musicians and magicians and generally enlarged our perspective about the world.
After all this traveling, spending and inflation, our net worth is still higher than when we retired.
So how much did this lifestyle really cost us?
Considering that we would probably have spent more on a complicated infrastructure per month working and having a life in the States, we could look at our traveling retirement lifestyle as actually saving us money.
Packing up your finances for travel
Even if you decide our particular lifestyle of wandering the globe doesn’t suit you, maybe you would like to include more adventure into your retirement. Where do you start?
First, you need to get your financial house ready for travel. Can you access your money at ATMs worldwide? Your local bank card won’t work in exotic lands, whereas major no-load fund brokerage firms have accounts that can accommodate this requirement. We even have ATM fees rebated through Fidelity Investments.
Are you signed up for BillPay or another automated bill paying system? Does your bank or brokerage firm allow you to write a physical check electronically and send it in the mail to any address where it’s needed?
Can you get all your banking statements online so that you can view them from anywhere in the world?
Make that change.
Secondly, you must get your U.S. residence in order. Can you let it be unattended for periods at a time? How about asking a relative to house-sit for you, watering your plants, cutting your grass, tending your pets and starting your car? Or you could join a house sitting organization and have the sitter do these duties. What services can you put on hold? And what about your mail?
Keeping in touch with family and friends is now easier than ever before. You can Skype or use WhatsApp, and send photos via email. Even though you may be on the road for months at a time, you can still conveniently contact your loved ones, and even your financial houses or insurance company if needed.
Affordable health care
What if you become ill? Chip a tooth, break your eyeglasses, need refills for prescriptions or have a medical emergency like we did?
You can take out traveler’s insurance or use local care. We have received excellent medical care in Mexico, Thailand, Vietnam, and Guatemala. Fortunately, we have had easy-to-reach, high-quality hospitals, dentists, eye professionals, pharmacies, and clinics.
English is the international language, so you will be able to fill your medical requirements without fear. Not only that, but the costs will be considerably less — another place where you could be saving money. You do not need a prescription for most meds, and in many cases you can walk into a pharmacy and buy what you need for much less than in the States.
Retirement through a different lens
Everyone looks at retirement differently. Some people have said to us, “We’re going to work a few more years. You never know what the future will bring.”
It’s hard to dispute that statement!
However, others have said to us just as firmly, “We’re going to retire now. You never know what the future will bring.”
We, of course, subscribe to the latter school of thought.
Travel has broadened our minds, giving us a perspective of the world and confidence that pervades daily living.
It’s a passport dividend.
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on Amazon.com.
