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30 Years Ago They Retired at 35: An Update

73 points by JacobAldridge 11y ago

nathan_f77 11y ago
Pretty awesome. Chiang Mai is a great city. We lived there for a month but just moved to Uthai Thani, which is even cheaper. It's a lot quieter, but pretty nice. Unfortunately, you can never really settle down in Thailand, unless you marry a Thai person. Foreigners aren't allowed to own land, although you can buy an apartment. But even so, it must get tiring to go on visa runs every 90 days for over 30 years.
- geomark 11y ago
  If you have a retirement visa (age 50 years and up) or spouse visa (married to a Thai citizen) you never have to do a visa run. For all others, it's a PITA. Also, it's not that cheap to live in Thailand. You can live cheap if you like. But if you want a car, TV, bottle of wine, a decent steak, etc. you pay far more in Thailand than in the U.S. I've been living in the Khao Yai area for more than 10 years. Added: Something is wrong with the story of that couple in the article re: their visa. Because the only one year visas are retirement, spouse and business visas. They could have retirements visas at their age but no visa run is required - you never have the leave the country at all, just renew it once a year. If they are in the country on tourist visas, well, there is no such thing as a one year tourist visa. There is a 60 day multi-entry tourist visa, valid for one year, extendable by 30 days one time after which you have to leave the country and re-enter getting another 60 days, rinse and repeat. (Added: maybe this is what they are referring to). And you used to be able to get 30 days visa exempt on arrival and do visa runs every 30 days indefinitely, but they put a stop to that recently.
  - nathan_f77 11y ago
    > Also, it's not that cheap to live in Thailand. That's an interesting perspective. My own perspective might be slightly skewed, since we moved from San Francisco, where we were splitting $4,400 per month for a 2 bedroom apartment. I see what you mean about luxury items costing more, so it definitely depends on your lifestyle. We're renting a house for $200 per month, and we've found great meals for under a dollar at local restaurants. Going out to eat at western restaurants rarely costs more than $5 per person. About the visa details, I met someone in Chiang Mai who was here on a retirement visa. He said he had to leave the country every 90 days, but I think he mentioned that they had recently changed the rules.
    - geomark 11y ago
      Well yes, that's a pretty hefty monthly rental. I just got back from Singapore which is even more absurdly priced. So you can definitely save a lot on housing in comparison to some places. On the other hand, if you want to buy then you find land prices are pretty high throughout the country, even in areas I wouldn't live if they paid me. I compare that to friends who bought ranch lands in the southwest U.S. - much cheaper and nicer. But a basic car is hardly a luxury item yet costs 2X to 3X the same car in the U.S. does due to high import tariffs. I eat at the local places for $2 (used to be $1) but when you want a pizza you pay $10 for a small one that is no bigger than one of those giant slices of Costco pizza in the U.S. Try a steak of local beef and break a tooth it's so tough, so if you want a decent steak you pay $30 at a restaurant for import. I suppose that is a bit of a luxury. The list goes on. Some things are cheaper, others more expensive. It's just not uniformly cheaper as many people think.
jpatokal 11y ago
In case you were wondering how they pulled this off at 35: The author retired from his CPA job at KPMG to live the life of world travel and financial freedom. When he retired in 1984 he was making in excess of $125,000 a year. The concept works best where you have a high priced personal residence in a hot real estate market. The premise is that you sell your high priced house and your status car. Then you take the proceeds and invest it in a SAFE, CONSERVATIVE investment living off the interest and never touch the principle. You move to a lower priced area, either in the US or outside. (from http://www.amazon.com/Cashing-American-Dream-Paul-Terhorst/dp/0553278150 http://www.amazon.com/Cashing-American-Dream-Paul-Terhorst/d...) Although that leaves it unclear how you got the high-priced house in the first place, much less the status car (why buy one if you're going to sell it anyway?). And the "safe, conservative" investment was cash deposits at a bank paying 8%/year, but good luck finding that these days...
- ville 11y ago
  They mention in the article that they moved from cash deposits to stocks: "At the time, bank CDs paid around 8 percent. Ah, yesteryear. “We had to change our investment strategy. Instead of living off our interest, we switched to buying stocks,” says Paul. “We cash in from time to time just before our next trip.”"
  - cozuya 11y ago
    I think you guys mean certificates of deposit..
- myth_drannon 11y ago
  "Although that leaves it unclear how you got the high-priced house in the first place," Get lucky and sell at the peak of the housing bubble. Let's say ten year ago you bought a house with a mortgage in Vancouver or Toronto for 300k, you can sell it now for 1mil if not more.
- rb2k_ 11y ago
  Plus they decided to have no children. Otherwise the equation is probably a bit more problematic :)
hnnewguy 11y ago
>the couple uses Washington state (where Paul’s brother lives) as their address for U.S. residential purposes because there’s no state income tax. >Plus our benefits are grandfathered in if Congress screws around with Social Security. >"But at least now, when we go to the United States, we have coverage and if we get sick, we won’t be devastated financially.” Not sure how I feel about people taking advantage of safety net, while doing whatever they can to avoid contributing.
- a3n 11y ago
  Their safety net is not provided by Washington State. They presumably worked the required number of quarters for their SS benefits, and played by the rules at the time.
  - owen_griffiths 11y ago
    but the rules don't work with people working for 10 years, and retiring for 60. of course this is not illegal, but such a life style choice would not be scalable.
  - pkaye 11y ago
    It is playing by the rules but if everyone did it, the whole SS benefit scheme will collapse.
    - dsr_ 11y ago
      It appears that you are misunderstanding Social Security, and you may think that the US federal government plays by the same set of fiscal rules that a household, a corporation or a state has to use. This article from the Washington Post can help: http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/08/social-security-a-guide-to-critical-questions/ http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/...
      - pkaye 11y ago
        So you are saying what I said is not true?
digi_owl 11y ago
Brings to mind the Victorian concept of "retire with competence". Problem is that it pretty much depends on getting in the door with the rentier economy, and not everyone can be there (unless you fancy trying to run the world on an eternal Ponzi scheme)...
im3w1l 11y ago
They didn't mention the real trick in the advice section: Don't have kids.
- deleted 11y ago
  [deleted]
- s3nnyy 11y ago
  The "early retirement community" has people who manage to retire early while having kids. Check out http://www.earlyretirementextreme.com http://www.earlyretirementextreme.com. The real trick is living way below your means. The main cost factors for most people are shelter, transportation and food. If you manage to lower these three recurring expenses considerably, you can retire within 5-10 years (even if you don`t make a six figure income).
  - titanomachy 11y ago
    You mean living well within your means?
    - deleted 11y ago
      [deleted]
  - vasilipupkin 11y ago
    The problem with early retirement and having kids, is that kids need to go to school and presumably, in one place. So you can't just bounce around the world when you have kids, or at least it's not as easy, finances aside.
    - ph0rque 11y ago
      Homeschooling gives you the opportunity to take school with you when you bounce around the world.
    - orasis 11y ago
      My unschool and homeschool friends bounce around with their kids just fine.
mitchi 11y ago
I read this and immediately thought of this : Retires at 35, explores the world for 30 years Claims Social Security at 62. http://weknowmemes.com/2015/05/25-ways-the-baby-boomers-had-it-easier-than-the-millennials/ http://weknowmemes.com/2015/05/25-ways-the-baby-boomers-had-...
- crdoconnor 11y ago
  http://www.nakedcapitalism.com/2013/10/who-should-young-people-throw-under-the-bus-granny-or-billionaire-hedgie-stan-druckenmiller.html http://www.nakedcapitalism.com/2013/10/who-should-young-peop... "Druckemiller’s latest cause is to foment generational warfare. He’s going to college campuses and telling students that things suck (which they know full well) and they need to go after Boomers who are gonna get too much in entitlements if things don’t change. Now from what I can infer, the presentation is sophisticated, since Druckenmiller throws other big Federal spending items into the mix, like defense. But the fact that he depicts tax rates as a problem is a major tell." Guess who planted those memes?
- cldellow 11y ago
  I assumed the social security benefits aren't that good if you only worked until 35? In Canada, e.g., the Canada Pension Plan (our version of social security) pays on a schedule based on how many years you worked. You must work for 39 years to get the maximum benefit. If you work fewer than 39 years, no consideration is afforded to whether you worked those years at the start of your life or the end of your life. i.e., the time value of money is completely ignored. Thus, I think the subjects of this article are likely being shortchanged by SS in some ways: they contributed, say, $200K to the coffers of SS. SS then had 30 years to grow that money, but will pay out ignoring the 30 years of growth.
  - manyhats 11y ago
    SS is scaled based upon the average income as computed over a person's working life. Since he's got lots of zeros in the calculation, and there's a cap on the SS wage computation ($37,800 in 1984) his SS-calculated income is lower over the entire period, and thus the benefit is heavily reduced. It's not linear, but there's a hefty penalty to do it this way.
hatheyn 11y ago
I really like the pragmatic focus on what they actually enjoy and want from life rather than chasing conventional 'task-oriented' achievements. Parents often push kids to be competitive and achieve, when actually there are plenty of other ways to a fulfilling life!
vasilipupkin 11y ago
I am not sure. This seems to me a very boring way to live. Sure, it's fantastic to travel around the world and explore different places. But, there is also a lot of satisfaction in meaningful work. Plus, a lot of things are really fun BECAUSE you are taking a vacation or rest away from a job.
- mcjiggerlog 11y ago
  I think that depends on your world-view. For some they see it as it's better to work to live, than to live to work.
falcolas 11y ago
Meta: The static headers and footer eat up about 50% of the screen real-estate. Makes reading this a real chore. On topic - If you can save up some 25x your living income, it's absolutely possible to retire from a normal job early and live off the interest of your investments. However, it's not a trivial amount of money to manage (it takes a savings of around 1 million to provide an "average" American household income), and your job can quickly become managing that money to ensure you get your interest on a regular basis.

73 points by JacobAldridge 11y ago

Pretty awesome. Chiang Mai is a great city. We lived there for a month but just moved to Uthai Thani, which is even cheaper. It's a lot quieter, but pretty nice. Unfortunately, you can never really settle down in Thailand, unless you marry a Thai person. Foreigners aren't allowed to own land, although you can buy an apartment. But even so, it must get tiring to go on visa runs every 90 days for over 30 years.

geomark 11y ago
If you have a retirement visa (age 50 years and up) or spouse visa (married to a Thai citizen) you never have to do a visa run. For all others, it's a PITA. Also, it's not that cheap to live in Thailand. You can live cheap if you like. But if you want a car, TV, bottle of wine, a decent steak, etc. you pay far more in Thailand than in the U.S. I've been living in the Khao Yai area for more than 10 years. Added: Something is wrong with the story of that couple in the article re: their visa. Because the only one year visas are retirement, spouse and business visas. They could have retirements visas at their age but no visa run is required - you never have the leave the country at all, just renew it once a year. If they are in the country on tourist visas, well, there is no such thing as a one year tourist visa. There is a 60 day multi-entry tourist visa, valid for one year, extendable by 30 days one time after which you have to leave the country and re-enter getting another 60 days, rinse and repeat. (Added: maybe this is what they are referring to). And you used to be able to get 30 days visa exempt on arrival and do visa runs every 30 days indefinitely, but they put a stop to that recently.
- nathan_f77 11y ago
  > Also, it's not that cheap to live in Thailand. That's an interesting perspective. My own perspective might be slightly skewed, since we moved from San Francisco, where we were splitting $4,400 per month for a 2 bedroom apartment. I see what you mean about luxury items costing more, so it definitely depends on your lifestyle. We're renting a house for $200 per month, and we've found great meals for under a dollar at local restaurants. Going out to eat at western restaurants rarely costs more than $5 per person. About the visa details, I met someone in Chiang Mai who was here on a retirement visa. He said he had to leave the country every 90 days, but I think he mentioned that they had recently changed the rules.
  - geomark 11y ago
    Well yes, that's a pretty hefty monthly rental. I just got back from Singapore which is even more absurdly priced. So you can definitely save a lot on housing in comparison to some places. On the other hand, if you want to buy then you find land prices are pretty high throughout the country, even in areas I wouldn't live if they paid me. I compare that to friends who bought ranch lands in the southwest U.S. - much cheaper and nicer. But a basic car is hardly a luxury item yet costs 2X to 3X the same car in the U.S. does due to high import tariffs. I eat at the local places for $2 (used to be $1) but when you want a pizza you pay $10 for a small one that is no bigger than one of those giant slices of Costco pizza in the U.S. Try a steak of local beef and break a tooth it's so tough, so if you want a decent steak you pay $30 at a restaurant for import. I suppose that is a bit of a luxury. The list goes on. Some things are cheaper, others more expensive. It's just not uniformly cheaper as many people think.

jpatokal 11y ago

In case you were wondering how they pulled this off at 35: The author retired from his CPA job at KPMG to live the life of world travel and financial freedom. When he retired in 1984 he was making in excess of $125,000 a year. The concept works best where you have a high priced personal residence in a hot real estate market. The premise is that you sell your high priced house and your status car. Then you take the proceeds and invest it in a SAFE, CONSERVATIVE investment living off the interest and never touch the principle. You move to a lower priced area, either in the US or outside. (from http://www.amazon.com/Cashing-American-Dream-Paul-Terhorst/dp/0553278150 http://www.amazon.com/Cashing-American-Dream-Paul-Terhorst/d...) Although that leaves it unclear how you got the high-priced house in the first place, much less the status car (why buy one if you're going to sell it anyway?). And the "safe, conservative" investment was cash deposits at a bank paying 8%/year, but good luck finding that these days...

ville 11y ago
They mention in the article that they moved from cash deposits to stocks: "At the time, bank CDs paid around 8 percent. Ah, yesteryear. “We had to change our investment strategy. Instead of living off our interest, we switched to buying stocks,” says Paul. “We cash in from time to time just before our next trip.”"
- cozuya 11y ago
  I think you guys mean certificates of deposit..
myth_drannon 11y ago
"Although that leaves it unclear how you got the high-priced house in the first place," Get lucky and sell at the peak of the housing bubble. Let's say ten year ago you bought a house with a mortgage in Vancouver or Toronto for 300k, you can sell it now for 1mil if not more.
rb2k_ 11y ago
Plus they decided to have no children. Otherwise the equation is probably a bit more problematic :)

hnnewguy 11y ago

>the couple uses Washington state (where Paul’s brother lives) as their address for U.S. residential purposes because there’s no state income tax. >Plus our benefits are grandfathered in if Congress screws around with Social Security. >"But at least now, when we go to the United States, we have coverage and if we get sick, we won’t be devastated financially.” Not sure how I feel about people taking advantage of safety net, while doing whatever they can to avoid contributing.

a3n 11y ago
Their safety net is not provided by Washington State. They presumably worked the required number of quarters for their SS benefits, and played by the rules at the time.
- owen_griffiths 11y ago
  but the rules don't work with people working for 10 years, and retiring for 60. of course this is not illegal, but such a life style choice would not be scalable.
- pkaye 11y ago
  It is playing by the rules but if everyone did it, the whole SS benefit scheme will collapse.
  - dsr_ 11y ago
    It appears that you are misunderstanding Social Security, and you may think that the US federal government plays by the same set of fiscal rules that a household, a corporation or a state has to use. This article from the Washington Post can help: http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/08/social-security-a-guide-to-critical-questions/ http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/...
    - pkaye 11y ago
      So you are saying what I said is not true?

digi_owl 11y ago

Brings to mind the Victorian concept of "retire with competence". Problem is that it pretty much depends on getting in the door with the rentier economy, and not everyone can be there (unless you fancy trying to run the world on an eternal Ponzi scheme)...

im3w1l 11y ago

They didn't mention the real trick in the advice section: Don't have kids.

deleted 11y ago
[deleted]
s3nnyy 11y ago
The "early retirement community" has people who manage to retire early while having kids. Check out http://www.earlyretirementextreme.com http://www.earlyretirementextreme.com. The real trick is living way below your means. The main cost factors for most people are shelter, transportation and food. If you manage to lower these three recurring expenses considerably, you can retire within 5-10 years (even if you don`t make a six figure income).
- titanomachy 11y ago
  You mean living well within your means?
  - deleted 11y ago
    [deleted]
- vasilipupkin 11y ago
  The problem with early retirement and having kids, is that kids need to go to school and presumably, in one place. So you can't just bounce around the world when you have kids, or at least it's not as easy, finances aside.
  - ph0rque 11y ago
    Homeschooling gives you the opportunity to take school with you when you bounce around the world.
  - orasis 11y ago
    My unschool and homeschool friends bounce around with their kids just fine.

mitchi 11y ago

I read this and immediately thought of this : Retires at 35, explores the world for 30 years Claims Social Security at 62. http://weknowmemes.com/2015/05/25-ways-the-baby-boomers-had-it-easier-than-the-millennials/ http://weknowmemes.com/2015/05/25-ways-the-baby-boomers-had-...

crdoconnor 11y ago
http://www.nakedcapitalism.com/2013/10/who-should-young-people-throw-under-the-bus-granny-or-billionaire-hedgie-stan-druckenmiller.html http://www.nakedcapitalism.com/2013/10/who-should-young-peop... "Druckemiller’s latest cause is to foment generational warfare. He’s going to college campuses and telling students that things suck (which they know full well) and they need to go after Boomers who are gonna get too much in entitlements if things don’t change. Now from what I can infer, the presentation is sophisticated, since Druckenmiller throws other big Federal spending items into the mix, like defense. But the fact that he depicts tax rates as a problem is a major tell." Guess who planted those memes?
cldellow 11y ago
I assumed the social security benefits aren't that good if you only worked until 35? In Canada, e.g., the Canada Pension Plan (our version of social security) pays on a schedule based on how many years you worked. You must work for 39 years to get the maximum benefit. If you work fewer than 39 years, no consideration is afforded to whether you worked those years at the start of your life or the end of your life. i.e., the time value of money is completely ignored. Thus, I think the subjects of this article are likely being shortchanged by SS in some ways: they contributed, say, $200K to the coffers of SS. SS then had 30 years to grow that money, but will pay out ignoring the 30 years of growth.
- manyhats 11y ago
  SS is scaled based upon the average income as computed over a person's working life. Since he's got lots of zeros in the calculation, and there's a cap on the SS wage computation ($37,800 in 1984) his SS-calculated income is lower over the entire period, and thus the benefit is heavily reduced. It's not linear, but there's a hefty penalty to do it this way.

hatheyn 11y ago

I really like the pragmatic focus on what they actually enjoy and want from life rather than chasing conventional 'task-oriented' achievements. Parents often push kids to be competitive and achieve, when actually there are plenty of other ways to a fulfilling life!

vasilipupkin 11y ago

I am not sure. This seems to me a very boring way to live. Sure, it's fantastic to travel around the world and explore different places. But, there is also a lot of satisfaction in meaningful work. Plus, a lot of things are really fun BECAUSE you are taking a vacation or rest away from a job.

mcjiggerlog 11y ago
I think that depends on your world-view. For some they see it as it's better to work to live, than to live to work.

falcolas 11y ago

Meta: The static headers and footer eat up about 50% of the screen real-estate. Makes reading this a real chore. On topic - If you can save up some 25x your living income, it's absolutely possible to retire from a normal job early and live off the interest of your investments. However, it's not a trivial amount of money to manage (it takes a savings of around 1 million to provide an "average" American household income), and your job can quickly become managing that money to ensure you get your interest on a regular basis.