How This Couple Retired In Their 30s To Travel The World

[les]

Early retirement is a hot topic on this board so I thought I would share this.


www.forbes.com/sites/laurashin/2015/03/30/how-this-couple-retired-in-their-30s-to-travel-the-world/?utm_campaign=ForbesWoman&utm_source=FBPAGE&utm_medium=social&utm_channel=Investing&linkId=13213426


How This Couple Retired In Their 30s To Travel The World

Jeremy graduated from college on a Friday, started working on cell phone design at Motorola on a Monday and worked 80 hours a week for the next four or five years. What fueled his work ethic was $40,000 in debt — $35,000 from student loans and $5,000 in credit card debt for food and other essentials.

But his desire to keep up with his peers led him, on his $40,000 salary, to buy a new car and a three-bedroom house, which turned his previous bike ride to work into a 40-minute commute. The added debt got him to focus on his finances, so he began making models of how he could pay it off, mapped out his trajectory to retirement at 65 and began investing. He then used credit card checks charging 0% interest for 12 months to pay big chunks of his mortgage, his student loan and car loan.

When he started working at Microsoft and moved from Chicago to Seattle, getting a salary bump up to $85,000, he made many of the same decisions (which he now calls mistakes) again: buying a house, having a long commute, and not taking a vacation. Three years in, a girlfriend convinced him to take his first real, multi-week vacation — to the Philippines. He spent the first week thinking about work, checking email. But the scuba diving, mangoes and and tropical drinks began to have an effect, and by the third week, he was wondering how he could live like this every day.

He sold his house, began renting close to work and biking to the office. With his costs slashed, he was able to save. At a conference in Beijing, he met his future wife, Winnie, who is from Taiwan and had been saving 50% of her salary in order to travel. Now, Jeremy, 40, and Winnie, 36, are financially independent, travel the world and blog about their envious lifestyle on GoCurryCracker.com. (The site is named for their rallying cry derived from their favorite snack on their honeymoon hiking Mt. Rainier in Washington, during which they endured bone-soaking rain and encountered mosquitoes as big as bats.)

Here’s the story of how they saved enough to retire in their 30s — Jeremy at 38 and Winnie at 33 — and how they’ve been spending their money and time since.

How did you achieve your early retirement?

J: While I was at Motorola, pretty much every penny of income went toward paying off my $40,000 in debt. If I had $10 at the end of the month, I paid an extra $10 to the student loan. I did contribute to my 401(k) but I took out a loan on it to buy a house and when I sold that house to move to Seattle, I had to pay that back.

By the time I changed jobs, I didn’t have much savings per se. But I was close to being debt free. At Microsoft, I started out at a high savings rate — I was contributing to my 401(k), maxing that out and saving more on the side. After I met Winnie and we decided to retire early, we started reading books like “Your Money or Your Life” and improved on that until we were saving upwards of 70% of income. My last two years working, we were depositing pretty much my entire paycheck into my brokerage account, because we were living off dividends and interest.

We lived close to the university and could walk everywhere, so we didn’t have a car. I was commuting by bicycle — 8 to 20 miles every day. We got most of our food at a farmer’s market and CSA. The biggest part of your income is housing, transportation and food, and those three things were cut really aggressively, so our monthly spend was less than $2,000 a month at the end.

I probably worked three years too long, or we saved too much. The goal was always that we wanted to travel, and once we quit, there was a year and a half of bouncing through Mexico and Central America, and then we came to Taiwan to have the baby.

How much were you earning?

Jeremy: When I started out of college, I was making about $40,000 a year, and that went up to more than $50,000 by the time I left. At Microsoft, I started at $85,000 a year and by the end of my 12 years there, I was at around $140,000.

Winnie: I worked in the same industry — phones and computers, and my last job was project manager at Dell. I was making about $32,000 in Taiwan.

Jeremy: We got married five years ago, so Winnie quit when we got married and moved to Seattle, so the last three or four years before we retried, when my salary was at its highest, she wasn’t working.

Winnie: I was a freeloader.

Winnie, when you were working for Dell in Taipei, what were your savings habits?

Winnie: The living cost here is quite cheap if you want to live cheaply, so I could save at least half of my income.

Just in a savings account?

We have something like a 401(k) but it’s run by the government, so I also maximized it, and the rest went to my personal savings account and my brokerage account.

So you invested it?

Yes.

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Did you have a specific target amount of money that you were trying to save before you retried?

Winnie: When we got married, the idea was that we’d quit that day and start traveling, so that’s why I quit my job here. But Jeremy said, I think we might need to wait another three years. He liked the project he was on.

Jeremy: I didn’t want to quit in the middle of it. The very original version of the plan revolved around being scuba bums — traveling to the best scuba diving sites around the world and having a partial income from working as scuba instructors.

Winnie: We were trying to think of what we could do for income while traveling.

Jeremy: Then, we talked to real scuba bums who were trapped in the developing world because they had no money and couldn’t afford a plane ticket home.

We would go to the library and get books on investing and learned about the 4% rule [which says that withdrawals from retirement saving of 4% will primarily be from interest and dividends, which would help maintain a balance from which funds can continue to be withdrawn for a number of years], so we built milestones on it. We could see when our investments could, for instance, support us living full-time in the Philippines. Then they would support us living full-time in Thailand. We worked our way up to the point where it could support our lifestyle in the U.S. That was just a straight up 25 times our annual expenses.

What was your lifestyle? And what did your friends think?

Winnie: We’d do potlucks where people brought their own food.

Jeremy: We also did happy hours. Some of our friends had a beautiful outdoor patio area where we did group dinners, and we also did quite a bit of hiking. There was a beautiful outdoor area 20-30 minutes away, and you’d go out there and have a full day’s entertainment for a few bucks of gas. A lot of our friends would spend ridiculous amounts of money compared to what we were spending. When we said, hey, would you want to come over to our small apartment near the university and have Winnie’s home-cooked food, they would rush over. Winnie could compete quite well on Master Chef. It was: Hey, do you want to spend $50 on brunch? Or would you like to come over our house and have this amazing six-course meal?

Our apartment was 900 square feet. We did, for a time, live in a 400-square-foot apartment. It was definitely too small. We were definitely testing our boundaries. Nine hundred square feet is a beautiful size for two people live in, but the average home size today is something like 2,400 square feet. I think we would just feel lost in something like that, like in a giant cave.

One of our friends has a 6,000-square-foot home on the lake. Our friend who did the outdoor party on the patio — his place is 1,800 square feet. For our friends’ places, 1,800 to 2,000 square feet was probably typical. We were paying $980. Rent for a smaller apartment in the hipster neighborhood would probably have been $1,800, and renting a house probably would have cost us $2,000-$3,000.

What was your investment strategy?

Jeremy: It evolved over time, but the vast majority of it was just index fund-invested. Much of our money is just in the Vanguard Total Stock Market Index Fund and the Vanguard Total International Stock Index Fund. I read some online forums for early retirement, some Jack Bogle, and Warren Buffett’s advice on focusing on passive index investing. And then you take standard modern asset allocation theory, which says, keep a small percent in bonds, a small percent in REITs [real estate investment trusts], and the rest invested in a split between in total market and total international. And partially because we are looking at a hopefully 60+ year retirement, we have the vast majority of our assets invested in stocks, to get long-term growth to ride us out for our lifetimes.

When the financial crisis hit, how did that affect your plan?

Jeremy: On paper, we lost $400,000, but I was mostly upset that I didn’t have more cash to buy more stock. I looked at it as a fire sale on stock, and I wanted to buy more at a discount. I had a little cash and used all of that to buy more stock. I even wondered, should I take out a loan to buy more stock? Two years later, we were far more wealthy than we were at the beginning of it. As long as you don’t panic and sell at the bottom and get out of the market completely, the overall market shouldn’t affect you much at all. We’re maybe even stronger for it. Maybe the psychological effect was that I worked a few years longer, and that’s why I said, hey, there’s this really interesting project at work. I partially wanted to ride the market crash out and save a little bit more.

When did you know you had enough to quit it all? How much did you have when you retired?

Jeremy: We knew we had enough after that three-year period. I’ve never talked about net worth publicly before, but we share every penny we spend and highlight how much of a net worth can support that. We can fund our whole lifestyle on $1 million. We’ve been spending $40K a year, minus one-time baby expenses last year.

Do you need to move to a foreign country to make this lifestyle work?

Winnie: Even in Seattle, we spent $40,000 a year.

Jeremy: When we were in Mexico, we were spending less than $3,000 a month, we had a three-bedroom house in the middle of San Miguel de Allende. We almost bought a house there to use as a base. We would eat out two to three times a day, go out for drinks with friends, we had a gardener and a housekeeper, and all of that was $2,500 a month. Trying to transport that lifestyle to the U.S. would certainly cost much more, but we’d substitute things — we wouldn’t go out for drinks. You don’t pay $15 for a martini. You make one on the front patio. Certainly taking that lifestyle to Manhattan would raise the price.

Do you have any income now?

Last year, the blog made $2,000. It’s a hobby that has the server fees paid for by the ad income. But all of our income comes from dividends and interest. We just live off them. I do a pretty active tax management of those assets, so in 2013 and 2014, we paid $0 tax while also converting about $20,000 a year to our Roth IRA to make that money tax-free forever. I’ve published our actual tax returns on the blog the last few years to show what that looks like in practice. Our plan is to, over the next 30 years, to convert our entire 401(k) into a Roth IRA so we pay no tax going in and no tax going out, so overall, we’ll be looking at $3 million in income over the next 30 years all tax-free.

We track expenses pretty closely, just so we can report them for information and education purposes on the blog, but otherwise, I never really pay attention to it. If we want something, we buy it, if we want to do an activity, we do it.

What have you done since retiring?

Jeremy: We went to Mexico with the idea that we would study Spanish and travel through Central and South America. We thought we’d be in Mexico for two months, but nine months later we were still in Mexico.

Winnie: We’d make friends with local people.

Jeremy: We’d practice the local language. When we were in San Miguel de Allende, which is a Unesco World Heritage City, we took Spanish classes for a month. Winnie took jewelry making and painting. The whole reason San Miguel de Allende developed was silver mining, so there are all these small silver jewelry artisans there, and Winnie was working with one of them. I was doing quite a bit of hiking, and we did a 900-kilometer bike ride around the island.

Winnie: In the beginning, we were very ambitious, like we’ll finish the whole continent in a year or two, but then we were like, we have 60 years.

Jeremy: It was an interesting change. Before then, all of our vacations had been two weeks long.

Winnie: I just threw away the list.

Jeremy: We went at a much slower, relaxed pace. We went to Guatemala for a few months, we went to Belize.

Winnie: Cuba.

Jeremy: Then we went back to the U.S., did camping and hiking around Western Washington and Oregon and then we went back to Mexico. Then we had the biological-clock-is-ticking conversation and then we came back to Taiwan to do in vitro fertilization, because here it costs 20%-30% of what it costs in the U.S. The thinking was we’d do IVF, start traveling again and have the baby in Europe, but we had some early miscarriage scare stuff, and Winnie was put on bed rest for a while, so we decided to play it safe and stay put till the baby was born. Our plan is not to stay here.

Winnie: We change our plan every 10 minutes.

Jeremy: We’ve been working through different ideas — spend a year in Spain, take an RV and drive around the U.S., or drive around Mexico. We’ll see how the pregnancy goes and see how our child’s personality is.

[hamster]

Haven't read yet but: @shoegal

[Lilac]

This is my husband's dream: "The very original version of the plan revolved around being scuba bums — traveling to the best scuba diving sites around the world and having a partial income from working as scuba instructors." But yes, I am jealous. Sounds like a nice life

I think it's interesting that they plan to raise a child with no added expenses. Good luck to them on that front.

[imojoebunny]

I can see how this can be done in a less expensive country. My dad retired at 46, he made decent money, but was also a really good investor. He and my mom are not living in a second world county, they have two homes, but my dad travelled a ton for work and he isn't into it, and they raised two kids and put them through college.

It would be interesting to see if they continue on this route, once their kid is older. I have two FB friends who home school and travel a lot with their littles, but now that the oldest little is 6, it will be interesting to see how it goes (both have opportunities because of their primary income earners work). It sounds fun to travel a lot, but it grows old for a lot of us. Health also plays a big roll as you age. You might not want to be in a third world country for a long time if you develop many of the conditions that effect older people.

[MrsE]

Very interesting - especially with a child!

[sillygoosegirl]

Sounds like they are just a few years ahead of us! :-)

Okay, not exactly. DH is too much of a homebody not to have a home base, and I'm too much of a mama's and daddy's girl for that home base not to be in my home town... But similar.

I hope having a baby now doesn't make us become too "normal." I should bookmark their blog.

I also want to point out that lots of families in the USA live on less than $40K.

[scout8]

We have always planned to retire in a foreign country (most likely Mexico) because we will be able to retire so much earlier.

[hamster]

Still didn't read, but we want to " follow swim trunk weather" as H calls it. I'd like to have 3-4 places to rotate through.

Montana or Idaho
Mexico
Maybe Texas
Not sure from there.

[WinterWine]

Such an awesome story!! It's really inspiring. I don't think I'm white this extreme... Love my 1,800 sf house and indulging in skiing. But it makes me think about what we need to set aside. I hadn't don't the calc on 25x expenses before. Does that account for inflation?

[WinterWine]

Such an awesome story!! It's really inspiring. I don't think I'm white this extreme... Love my 1,800 sf house and indulging in skiing. But it makes me think about what we need to set aside. I hadn't don't the calc on 25x expenses before. Does that account for inflation?

[sillygoosegirl]

Mar 31, 2015 22:54:27 GMT -5 WinterWine said:

Such an awesome story!! It's really inspiring. I don't think I'm white this extreme... Love my 1,800 sf house and indulging in skiing. But it makes me think about what we need to set aside. I hadn't don't the calc on 25x expenses before. Does that account for inflation?

Yes, it does. If you have 20% of your portfolio (5 years expenses) in something relatively low risk/low reward, you should still earn 8% of your portfolio's value annually. 4% of that goes to offset inflation, 4% to live on. The 20% low risk investments lets you buy more during a slump and weather the storms. Alternately, you can keep it all in stocks and you should earn about 10%, which is 4% for inflation, 4% to live on, and 2% to reinvest for bad years. It's a pretty common figure and in theory leaves you actually a really good bit of wiggle room for the bad years.

[crashgizmo]

This is ultimately our plan (retiring to another country, probably slightly earlier than normal). We are also planning on the ~4% to on being $40K, so we have the $1M goal as well.

I think it became easier to swallow the idea of living in another country when we realized that we are child free, all of our siblings are either childfree or have grown children, and our parents may or may not be around. So on that end it would be easier to be further away. To that end, our goals beyond saving for retirement have included strategic plans for being debt free.

[wise_rita]

For the love of god generating income from a blog and calling it "retiring" is not retiring! See also MMM.

/refuses to read out of protest

[elleblue]

/sits next to wise_rita

[Deleted]

wise_rita and elleblue - their blog only made $2k last year!!! That's hardly equivalent to a job!

But, I did side-eye this: "mosquitoes as big as bats" - uhhhh, the biggest mosquito in the world is 1.5".....ok, I'll put my judgement aside for a moment.

I love this couple (surprise, surprise). The thing that is such a pleasant part of their story is that, like others who have achieved financial independence, there's no magic to what they did. They saved aggressively, managed their expenses aggressively (particularly the big expenses), invested in straightforward Vanguard index funds, and managed towards a 4% SWR.

I like when articles like this share the details (how much they were making, how much of that they saved, what they live on) versus speaking in generalities. That really helps me wrap my head around the execution. I'm going to start reading their blog for inspiration!!!!

[jenstar]

Apr 1, 2015 1:21:33 GMT -5 wise_rita said:

For the love of god generating income from a blog and calling it "retiring" is not retiring! See also MMM.

/refuses to read out of protest

He says they only make $2k per year on the blog, so not really enough to make a big difference.. It wasn't clear whether the server expenses etc comes out of that or if that's what they net..

They talk about how they can make money while traveling though so it seems like they are looking to still have some income, just not dependent on it.

[Deleted]

PS I am suuuuper jealous that Winnie got to retire at 33! I'm that age right now. VERY JEALOUS.

[wise_rita]

Read it now, and I am left with one question:

WTF are they doing for healthcare?

Jetting back to Taiwan and paying cash 20-30% of what it would cost in the USA? I mean, their (failed) birth plan was to "have the baby in Europe". Um, OK?

[Deleted]

YEAH!

On second (third?) thought, these irresponsible globe-trotting hippies should absolutely return to their 40+ hour a week jobs because there is no way they can avoid financial ruin given unavoidable skyrocketing health care costs. They either need employer-subsidized healthcare or AT LEAST $10M in their nest egg to be able to remain insured. I can't wait to see the update on their story when their shoddy not-at-all researched plan falls apart!

[SJ]

Stories like this inspire me.

I have no interest in "retiring" to live a frugal and ordinary life at home.

But this? Traveling, exploring, wandering? This is so very appealing to me. I don't think we will ever actually jump ship, but it's fun to dream about.

They are basically living off their investment income, not the $2K in blog revenue. I am impressed with his Roth conversion strategy and that he is willing to publish their tax returns- I will definitely check out the blog.

[ssmjlm]

Apr 1, 2015 6:35:19 GMT -5 @shoegal said:

YEAH!

On second (third?) thought, these irresponsible globe-trotting hippies should absolutely return to their 40+ hour a week jobs because there is no way they can avoid financial ruin given unavoidable skyrocketing health care costs. They either need employer-subsidized healthcare or AT LEAST $10M in their nest egg to be able to remain insured. I can't wait to see the update on their story when their shoddy not-at-all researched plan falls apart!

DH says he'll never divorce me because feds get to keep their health insurance in retirement.

If I'm going to retire early and travel the world, sorry, but tent camping isn't going to be involve yall.  Unless it's something the kid really wants to do. 

[scout8]

I have been self employed for 15 years so I have been in charge of finding my own health insurance for that long. So finding it when I am "financially independent" doesn't worry me too much. As long as Obamacare remains, it has also made it much easier to get insurance.

If you want to get a sense of what it would cost as you age, you could go into a website and put in your age as 60 or whatever you want to see. Obviously, this won't account for inflation, but it will give you a rough idea of the costs. At least under the first year of Obamacare, my cost increase was minimal, about $20 (or 6%). I am sure lys will come in here and tell me it is going to start increasing by about 200% soon.

[yentl]

I love the idea of retiring to a less expensive country. There are a lot of areas of the world with an expat community of retirees that do this.

I have no interest in retiring at 30 or 40 but I know people are into it on this board. I would actually prefer to continue working part time pretty late into the game for a multitude of reasons...but there were still some interesting points in this article that were helpful takeaways for me.

[kershnic]

I'm much more impressed with this story than MMM. I'd love to be able to do this. But I still think the people who are able to do this have a lot of unrecognized privilege. Our HHI is far less than 140k, and neither of us will ever make that much alone. His magical living close to work would literally more than double our rent. Also, by far our biggest not necessary budget category is already travel - and it makes no sense to me to sacrifice that now in order to do it even in early retirement.

[fryjack2]

Nothing about this sounds that amazing to me.

Not having some sort of plan for when their kid gets here is a little naive. Kids are expensive if you can't breastfeed or aren't in a place that makes cloth diapering easy.

I don't want to spend retirement years traveling the way I did when I backpacked through Europe post college. I'd rather spend some money every year and travel now. Not when I may need a walker and dentures. I also enjoy my job, so retiring tomorrow doesn't interest me.

But if this makes them happy, good for them.

[Deleted]

I like this couple! I do wonder about the health care aspect.  But I'm in Canada, where you can only be gone 6 months/year or you lose your universal health care. Most Canadian retired snowbirds go away for the winters only, for this reason. I guess their plan is to buy it in a cheaper country, but the worst case scenario is buying health care in the US later on, just like they would have otherwise.

I think as far as 'kids are expensive' - people in the places they're travelling have kids and don't spend what we spend on them so I don't see that as an issue.

I would love to be inpired by this but I don't know how to change our lifestyle at this point. We love our middle class trappings too much. I would love to retire ten years from now, at 50 (when our youngest is finished high school), but DH is hoping to work PT/contract into our golden years.

[wise_rita]

Apr 1, 2015 6:35:19 GMT -5 @shoegal said:

YEAH!

On second (third?) thought, these irresponsible globe-trotting hippies should absolutely return to their 40+ hour a week jobs because there is no way they can avoid financial ruin given unavoidable skyrocketing health care costs. They either need employer-subsidized healthcare or AT LEAST $10M in their nest egg to be able to remain insured. I can't wait to see the update on their story when their shoddy not-at-all researched plan falls apart!

Being flippant about healthcare is short sighted, particularly if one plans to spend a majority of their adult life unemployed, thus reducing their later employability (which even in the best of circumstances is not great).

Brushing it off as a no big deal joke IS going to backfire.

[mbcdefg]

Mar 31, 2015 20:30:01 GMT -5 les said:

during which they endured bone-soaking rain and encountered mosquitoes as big as bats. 

[Deleted]

Apr 1, 2015 8:37:30 GMT -5 wise_rita said:

Apr 1, 2015 6:35:19 GMT -5 @shoegal said:

YEAH!

On second (third?) thought, these irresponsible globe-trotting hippies should absolutely return to their 40+ hour a week jobs because there is no way they can avoid financial ruin given unavoidable skyrocketing health care costs. They either need employer-subsidized healthcare or AT LEAST $10M in their nest egg to be able to remain insured. I can't wait to see the update on their story when their shoddy not-at-all researched plan falls apart!

Being flippant about healthcare is short sighted, particularly if one plans to spend a majority of their adult life unemployed, thus reducing their later employability (which even in the best of circumstances is not great).

Brushing it off as a no big deal joke IS going to backfire.

Isn't this pretty much covered under healthcare reform? The old days of being denied an independent insurance plan are long gone, as are preexisting conditions and all that jazz. Anyone can go onto a healthcare exchange and sign up.

And although not cheap, they're living off the interest of one million dollars. So even if they do have to draw off that for premiums and other medical costs, they'll still be in pretty good shape.

[LoveTrains]

Apr 1, 2015 6:56:50 GMT -5 SJ said:

Stories like this inspire me.

I have no interest in "retiring" to live a frugal and ordinary life at home.

But this? Traveling, exploring, wandering? This is so very appealing to me. I don't think we will ever actually jump ship, but it's fun to dream about.

They are basically living off their investment income, not the $2K in blog revenue. I am impressed with his Roth conversion strategy and that he is willing to publish their tax returns- I will definitely check out the blog.

This right here is what this makes me so much more interested in this couple than Mr. Money Moustache. This guy is actually sharing his tax returns and discussing his strategies that it seems like real people can use. I also thought it was interesting that they talk about the cost of living in other countries - for example, Mexico, being able to afford household staff on a budget of $2500 a month. 

It also sounds like they might have more options in terms of living in certain places because it sounds like Winnie might be able to work in Taiwan but not the US - which is why she had to "retire" at 33 when they moved to the USA. But it is an interesting concept to move to a country with socialized medicine and then not have to worry about healthcare costs.