Case Study: Quit work at 33yo with $300k nest egg

[LLCoolDave]

Hi all, thanks for taking the time to read my post. I work in food service in Las Vegas. I am burnt out and tired of working swing shift. I do enjoy travel and have always wanted to live in other cultures/countries. I would move to a low cost of living area where I can live comfortably on $1,000 per month. Puerto Rico is at the top of the list for now but I would like to try SE Asia (Thailand to Vietnam area), Latin and South America as well. I'm not opposed to picking up part time work so I don't drain the stash as much and travel a bit more.

Current net worth is around $276k
Home Value $231k
Investments $30k
Cars and Motorcycles $25k
Cash $5k

Mortgage debt is $12k
No other debts

Income is $67k including $5k in rental income
Spending is around $20k

No wife, no kids. Don't want any kids.

The plan would be to liquidate everything for the move. Invest in Vanguard funds, 75% Stocks/25% Bonds and keep $12k in cash. I've already researched asset allocation quite a bit but I have some reservations about investing a large lump sum when we are at market highs. I might DCA it.

Based on a $300k portfolio the 4% withdrawal rate would be $12k. Cutting it close but I don't mind working part time.

I was planning on working till 40 and have a net worth closer to $700k but I'm not sure I have it in me.
I appreciate any comments and thoughts.
Thanks,

Dave

[Fuzz]

If you left, how easy would it be for you to get your job back in Vegas? It seems like you could try out the break from work. Maybe after 4-6 months, you'd have motivation to stick it out; or maybe you'd be done for good.

Planning on never working again seems tough to me. Theoretically $300K is enough of a nest egg for a low cost of living place, but who knows whether that will be true in 25 years. The cost of living in Thailand could exceed the gains in the market. I think it's a great 1-3 year plan. For my risk tolerance, it's not a great "forever" plan.

[MayDay]

This would make me very nervous. 

1.  A bad market year early on would be hard to recover for since you have no buffer.
2.  with a 1000$ a month budget there isn't much room to reduce costs.
3.  One medium medical emergency (let alone a big one) and you are screwed. 

OTOH, all you need is to earn 12K a year and let your stash grow for a few more years.  Could you get a 1k a month job in one of the places you want to travel to?  Could you get a "better" (in hours and stress) but lower paying job in Vegas?  Could you teach English overseas? 

I sure as heck wouldn't stop working entirely, but you certainly are in a good position to quit your current job and get a different one.

[LLCoolDave]

It wouldn't be hard to move back to the US and find a job but I think I am done with Vegas. I've been here 8 years and the city really doesn't interest me much anymore. In fact I think it is a little detrimental to my well being. They call it vice city for a reason. lol. The nice thing about Puerto Rico is I get the tropical climate and I can work there legally. I was told that crime is a little high right now. I will probably take some self defense classes before making the jump.

You are right that inflation risk is a big factor when living outside the US. Inflation can average 8% and sometime hits double digits.

[expatartist]

Even better: have your 300K nest egg and don't touch it for a decade or two while it grows. Think of it as a giant emergency fund rather than a source of income until you're closer to retirement age. Save up an additional 10K or so to travel on a shoestring or get started in SE Asia (and of course ensure you're covered for catastrophes via World Nomads etc).

There are plenty of work options in SE Asia. Sure they won't pay as well as the US, and you may decide to work p/t in a 1st world country several months of the year to fund life in a low COL for the rest of it. But you've got the gift of time with the stache - let it grow rather than tapping into it at a young age.

[Dicey]

I say do it, but perhaps think of it as a sabbatical. Go for a year or five with the idea that you could go back to work if you wanted to. One of my favorite quotes is "Retiring too early is a mistake you can recover from. Too late and there is no recovery." Whatever you decide, please keep us posted.

[Annf]

I would do it!  I agree with letting your money grow and work just enough to cover your expenses. You don't need to keep contributing. And I know plenty of people who have done this sort of thing and ended up better off than they were before. It's just that most people focus on fear and all the stories of things not working out and never do the things they really want to. Don't be most people!  You can always go back to work full time.

And based on the looks of people you won't have a problem going back to the food industry!  We do like to eat here!

[CuencaSolo]

I wonder about Puerto Rico as a place to work.  Wages and salaries are low, often half the mainland if that, and the cost of living is a mixed bag.  Housing is reasonable, never having really recovered from the 2008 crash, but the 70% of the food supply that is imported is not.  If you like hot weather, it's often nice out.

A website with ads for stuff like rentals and used cars is www.clasificadosonline.com.  Mostly in Spanish.  There is a Craigslist, but it's much smaller.

[Calvawt]

I like the idea of working part time in a low COL country to let the nest egg grow.  If things don't work out you can always work full-time or move back to the US.

[LLCoolDave]

Thanks for the responses so far.

I have never worked in a foreign country but I think that working part time in a low COL will reduce my withdrawal rate from 4% to 3% at best. I will be making the wage of the locals.

[LLCoolDave]

Hot spots on my list are: Puerto Rico, I can work there, learn to surf.  Hawaii, work in a hostel for room and board and learn to surf. Panama, they use the dollar, Nicaragua (the best surf) Every SE Asian Country, Great food and cheap cheap cheap. Maybe I can wind surf.

[CommonCents]

You'll have transaction costs selling your house, so don't bank on that full amount going to your stash.

I'd be concerned about an emergency arising with retiring on that np-margin budget, but if you think you can work part-time afterwards to supplement, you should be ok.  (The issue though to bear in mind is if you have a medical emergency you may not be able to work then.)

[expatartist]

Be sure to check travel/work visa requirements when looking at countries to live in. They are different everywhere, and are getting more restrictive. In 20-30 years many of these 'developing' countries will be in a much better position vis a vis the US and your dollars may not be as appealing as they are now.

Here in China for example (not that you'd consider this country) one can't get a work visa over age 60. And to get a work visa in most countries around the world, a minimum requirement is a university degree. Wouldn't recommend you expatriate long-term without one, this can seriously limit your options long-term. Multi-year visas without putting down a chunk of $ for 'retiree' visas can be complicated (the Philippines has an appealing option for 'younger' retirees).

[surfhb]

Hmmmm.  I'm not sure you really understand how well off you are.    I don't understand wanting to leave a well paying lousy gig to go somewhere "tropical" to work at another lousy gig?   

Not to sound like an ass but when's the last time you had a relationship? :).

You sound like me 8 years ago before I lost my business in the economic crisis of 2007.   Was unemployed for almost 2 years before things look brighter.    It changed my outlook greatly.   

I learned to cherish everything that comes my way these days because it can easily be lost in a flash.   

You're just entering your 30s and have a net worth of 300k my friend!    Do you realized how good of shape this puts you in?   

Jeez!  Complainypants !   Haha

I say hammer away till your 40.   You will have close to $1 million and go surf your dick off forever!   Nicaragua does have good surf.... You're right about that.   But it tends to be heavy beach break....learn to duck dive.  :)

[LLCoolDave]

Yep, I plan on $14k in real estate commissions (6%). I didn't state this before but I will work in Vegas till I hit $300k after all costs. It will take me six months to a year (or till I get fired or say screw it.)

I am an atheist, with a BS in philosophy, and am not worried about a medical emergency. I eat a whole foods, plant based diet. If I get to a point where my health declines then I'll take my life.  If I can't take my life then I won't need to worry about it. I can always take out a "hit" on myself as well. I've watched a lot of "law and order." lol

I'm also amenable to 90 day visa runs when I need to.

[LLCoolDave]

Hmmmm.  I'm not sure you really understand how well off you are.    I don't understand wanting to leave a well paying lousy gig to go somewhere "tropical" to work at another lousy gig?   

Not to sound like an ass but when's the last time you had a relationship? :).

You sound like me 8 years ago before I lost my business in the economic crisis of 2007.   Was unemployed for almost 2 years before things look brighter.    It changed my outlook greatly.   

I learned to cherish everything that comes my way these days because it can easily be lost in a flash.   

You're just entering your 30s and have a net worth of 300k my friend!    Do you realized how good of shape this puts you in?   

Jeez!  Complainypants !   Haha

I say hammer away till your 40.   You will have close to $1 million and go surf your dick off forever!   Nicaragua does have good surf.... You're right about that.   But it tends to be heavy beach break....learn to duck dive.  :)

My favorite face punch.

[surfhb]

Hmmmm.  I'm not sure you really understand how well off you are.    I don't understand wanting to leave a well paying lousy gig to go somewhere "tropical" to work at another lousy gig?   

Not to sound like an ass but when's the last time you had a relationship? :).

You sound like me 8 years ago before I lost my business in the economic crisis of 2007.   Was unemployed for almost 2 years before things look brighter.    It changed my outlook greatly.   

I learned to cherish everything that comes my way these days because it can easily be lost in a flash.   

You're just entering your 30s and have a net worth of 300k my friend!    Do you realized how good of shape this puts you in?   

Jeez!  Complainypants !   Haha

I say hammer away till your 40.   You will have close to $1 million and go surf your dick off forever!   Nicaragua does have good surf.... You're right about that.   But it tends to be heavy beach break....learn to duck dive.  :)

My favorite face punch.

Lol!   Seriously man!    You are one fortunate mother fucker.   

[Monkey Uncle]

How confident are you that you can really live on $12k a year in all of your possible localities?  You kind of glossed over the fact that you're planning to cut your spending from $20k/yr to $12k/yr.  Granted, Vegas is an expensive place, but is it really almost twice as expensive as your possible ER locations?  Or are you planning to reduce your standard of living?  If so, you might want to try it out for a year or so first.

And is suicide really your plan for dealing with a medical emergency?  I have say that's the first time I've heard that one around here!

[limeandpepper]

I think $12k is doable. The thing is though, even if you're in a low-COL country, other things can add up - flights, travel insurance, vaccinations, visa runs. Taking into account these things, I think it's still possible if you live reasonably frugally, but there won't be much room for Western comforts / luxury. So perhaps the question is whether to tough it out for a bit longer in your current work, or would you prefer to rough it in a foreign country. Different considerations, different challenges. Personally, I can relate to your wanderlust, and hope to hear updates on whatever you decide to go with. :)

[I'm a red panda]

I am an atheist, with a BS in philosophy, and am not worried about a medical emergency. I eat a whole foods, plant based diet. If I get to a point where my health declines then I'll take my life.  If I can't take my life then I won't need to worry about it. I can always take out a "hit" on myself as well.

This is a really terrible plan, especially for someone who is young.
When I was 17, I broke my neck. At the time I was paralyzed, the doctors were unsure going into the surgery if I would walk again, but after the surgery with treatment and therapy I have recovered to 99%- you'd never know it had happened.  I have a multi-level fusion in my neck, and it will need to be replaced/extended as it causes the bones to degenerate around it at a higher rate.  I don't know what those surgeries will cost exactly, but I know they are going to happen so I need to pay attention to my insurance coverage, but the first surgery + treatment was around $500,000 billed (my parents had great insurance, so we just paid the out of pocket maximum that year- which still was a decent hit, like $10k).

My quality of life since the surgery has been totally normal, and at times fantastic.  I've had a few issues where I've needed more expensive care since then, but everyone has issues.

For something that is so easily curable (and has nothing to do with your health 'deteriorating" so much as just being a really unfortunate accident) if you have budgeted for medical care- why would you just take your own life due to poor planning?    You seem to only be thinking about long term, chronic conditions.

[LLCoolDave]

Sorry, my humor can get a little dark from time to time. Forget about the euthanasia and lets focus on the task at hand.

Thanks to everybody who has commented so far. Some valid points have been raised.

[Numbers Man]

Why don't you quit and try the foreign living for a year. I have a feeling that $1,000 a month might not go far. The only way to know is to actually do it. If it doesn't work then you can always get another job in the USA and try again.

[SUP]

Sell your stuff, except the house. Find a really good property manager in Vegas to rent out your house and direct deposit your rental income. Buy a plane ticket and quit your job. Use the rental income to live on supplemented with occasional work abroad (great way to meet people is by working, and you can do fun stuff). Look into Saipan. It's an Island US territory, close to Asia, not too much to live there, just costs a bit to get to. Make it all an adventure. Read Vagabonding by Rolf Potts.

Sorry in advance, and you can all punch me in the face for telling him to keep the house and rent it out, but that is a smart move in Vegas right now.  I have been reading these things for months. I finally joined. I am living an adventure with whole family. I read about guys like you that are single and think, "What are you waiting for?" Just go. Losing all your money and having to go back to work isn't the end of the world, losing all your time would be much worse. Plus you are in a career field that is not hard to jump back into.

I know this post has been dead for a few months but I'd love to hear you are already gone!

[electriceagle]

Sorry, my humor can get a little dark from time to time. Forget about the euthanasia and lets focus on the task at hand.

Thanks to everybody who has commented so far. Some valid points have been raised.

It sounds like you need a change of scenery. With your stash, you can afford to take time off and travel a bit, even if you don't think of it as permanent retirement.

As others have mentioned earlier, the problem with planning to retire in an developing country is that their inflation >> US inflation. Unless you can latch on to the local economy (for instance, by buying property in a good area and renting it out), your standard of living will degrade over time.

The good news is that (for now), you can work at US minimum wage rates while living somewhere like Thailand or the Philippines. Elance, Leapforce, Scribie, etc all pay $10-15/hr for being a native English speaker in front of a computer. Do "dumb" online work for 4 hrs a day and you'll just about reach your $1000/mo target without touching your stash.

[lpep]

Wow, not much support of quitting and trying living abroad.... I say go for it.

If you teach English abroad, you will be farrrr from "making the wage of the locals." Here in Hanoi the average salary is something like $200/month. I make $1500 teaching part time, 15 hours per week (more like 25 including planning). You can live on about $400/month here on the low end, some spend thousands per month. My average month is about $650, well within your withdrawal range, but if you travel around, have expenses at home (insurance) or relax your spending a bit you'd be safer to plan on $1000/month. 90 day visa runs are a necessity as work permits are not common (and rare for part time).

Even if you just see it as a break, DO IT. I know people who have left within a year's time (the vast majority) and others who've been here for 3-5 years. It's an experience you'll never forget.

One thing about Vietnam - a plant-based diet would not be easy here unless you cook everything yourself. Two words: fish sauce.

[Murse]

I agree, my vote is you sell the house and move somewhere else. It does not really matter where. Stick the house money into the market, and take a low stress easy enough job to just get by over the next decade or two. Hell, maybe even work only 20 hours a week. This plan only works though if you sell the house and put the money in the market

As to not being confident with anything more aggressive then 75/25, that is fine in my opinion if it helps you sleep at night. Thing is though if you look at the market over history, most years is a "new high." But at the end of the day what matters is whatever AA you pick you HAVE to stick to, to avoid market timing.

[LLCoolDave]

Since there are a few new comments, and thanks for those, I figured I would give an update.

I quit work a month ago and I'm now living off my savings. Soon after my initial post an ex-girlfriend offered for me to stay in Paris for the summer so I have been waiting for the official thumbs up from her before I bought a plane ticket. I was planning on a couple months in Paris and then walk the Camino de Santiago in Spain. A couple days ago I got the thumbs down instead so now I am working on plan B.

After re-reading all the comments I have adopted a lot of the ideas. Possible part time work while travelling so I don't deplete my NW or possibly working for six months in the US and then having six months to travel. I'm not sure which but that is the beauty of the situation.

Once again, thanks

[Bob W]

So here are some ideas since you have time on your hands.     1.   Make 4 k per year churning checking accounts.  See doctor of credit.com. 2.  Make another 2 k churning credit rewards cards.  3.  Earn 10 k in free air fair and hotels churning reward cards.  1 an 2 milesdividendmd.com.  4.  Invest in nice dividend stocks at 6% or refer to the dual momentum thread here to hit a realistic 8% swr.        1 + 2 + 3 + 4  = 24k income and 10k airfair.   You can pretty much do whatever you like for $65 a day and free air travel.    And you could do it for as long as you like!

[Suit]

LLCoolDave, I hope you'll be starting a journal here, I'd love to hear about how you're making it work!

[NolanCF]

Odd aside, but I played against somebody with that exact handle in Starcraft a couple days ago.

[StetsTerhune]

Dude. get yourself a 1 way ticket to southeast asia. You will not believe how much fun you can have over there for almost no money. After 6 months or a year over there, you'll know if this is a permanent thing  for you or not-- my bet is on not-- but your 'burn out' problem will almost certainly be gone.

[dsmexpat]

Odd aside, but I played against somebody with that exact handle in Starcraft a couple days ago.

The bad one or Brood War?

[LLCoolDave]

Odd aside, but I played against somebody with that exact handle in Starcraft a couple days ago.

Sorry but not me

[SUP]

So here are some ideas since you have time on your hands.     1.   Make 4 k per year churning checking accounts.  See doctor of credit.com. 2.  Make another 2 k churning credit rewards cards.  3.  Earn 10 k in free air fair and hotels churning reward cards.  1 an 2 milesdividendmd.com.  4.  Invest in nice dividend stocks at 6% or refer to the dual momentum thread here to hit a realistic 8% swr.        1 + 2 + 3 + 4  = 24k income and 10k airfair.   You can pretty much do whatever you like for $65 a day and free air travel.    And you could do it for as long as you like!

I read this and heard the sound of wonderlusters everywhere quitting their jobs and hitting the road!!! This information is awesome. I lived on the road in the US about 15 years a go on much less. This would have sent me farther and for much longer. Now I'm dragging my family around the globe. When it comes to travel: If they just want to talk about it, they will. If they just want excuses, there are millions. But, if they really want to go, they will see the millions of possibilities and just go.

I hope his next post is a plane ticket. Why the hell would you stay in Vegas on your savings with no job?

[SpicyMcHaggus]

the cars are not assets, they are liabilities.
Get out of them now if you don't NEED them. They will only cost you more money the longer you have them.
As for your plan, it's not for me, but I like it.

[KungfuRabbit]

Id suggest getting laid and seeing a therapist.

[BlueMR2]

You sound like me 8 years ago before I lost my business in the economic crisis of 2007.   Was unemployed for almost 2 years before things look brighter.    It changed my outlook greatly.   

I learned to cherish everything that comes my way these days because it can easily be lost in a flash.   

This, and don't count on being able to get a job in the future.  When my wife lost her job a couple years ago we didn't think it was any big deal.  Here we are now over 2 years later and other than a couple of day long temp jobs all she's been able to get is some 10 hour a week part time near minimum wage jobs.  In the new economy, you can't count on ever being able to find decent work again, there just aren't any jobs out there.  I wouldn't leave ANY job until I was 100% sure I didn't need it anymore, ever.

[Sibley]

You sound like me 8 years ago before I lost my business in the economic crisis of 2007.   Was unemployed for almost 2 years before things look brighter.    It changed my outlook greatly.   

I learned to cherish everything that comes my way these days because it can easily be lost in a flash.   

This, and don't count on being able to get a job in the future.  When my wife lost her job a couple years ago we didn't think it was any big deal.  Here we are now over 2 years later and other than a couple of day long temp jobs all she's been able to get is some 10 hour a week part time near minimum wage jobs.  In the new economy, you can't count on ever being able to find decent work again, there just aren't any jobs out there.  I wouldn't leave ANY job until I was 100% sure I didn't need it anymore, ever.

Blue, I'm going to disagree on you there. There are plenty of jobs. They may not be where you are, and you may not have the skills to do them. But they're out there.

[kd2008]

When it comes to big decisions like the one you are contemplating, it is best to turn it into a transition rather than an impulse. So take a week of vacation first to distance yourself from the work environment. Travel to some place quiet and think what you would like to fill into your empty day. Then come back to work and start executing it. Just the change of attitude at work where you push back can make a difference. It will give you space and confidence to march towards your independence, irrespective of whether you work at any other place or quit for good. Good luck!