Author Topic: Reader case study: do i have enough to drop out of the rat race?  (Read 5467 times)

Matumba

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Long time lurker, first time poster here.

A little background about me

Male, mid 30s. I grew up in a poor country and a poor family, so I am naturally frugal (e.g. cook at home most of the time, don't have a car, can do without luxuries). I have no family, no children, no plans or desire to have them in the foreseeable future. I live in the US (HCOL area) and have a pretty good professional job which I don't like. I never liked any corporate jobs I had in my life mainly because I value my freedom and hate reporting to other people. I want to retire or at least semi-retire as early as possible, ideally within the next couple of years.

When I semi-retire, my plan is to travel around South East Asia for awhile, maybe also visit other low cost destinations, such as Eastern Europe, then perhaps settle somewhere with nice weather and low cost of living. Based on my own experience (I travel quite a lot) and information I have from other people with similar lifestyles, I can travel/live pretty comfortably on about $1.5K/month in today's dollars. I could even manage on $1K/month, but that would be more like more like surviving than living. Using the 4% draw formula, I need $450K to get 1.5K/month. I already have over $300K for 1K/month to cover bare essentials. After initial few months of "detoxing", I am planning to start a part time freelancing gig or a low investment, bootsrtapped location independent business. The idea is to withdraw a baseline amount of living expenses from my nest egg and use anything else I earn to improve my lifestyle and add to that nest egg or compensate for market dips/portfolio deterioration if need be.

Detailed portfolio information:

Current total net worth Ė about $320K
No debt. No real estate.
Emergency Funds: $44K in checking accounts. I included them in net worth and asset allocation below.
Tax Filing Status: Single with no children
State of Residence: NJ
Age: 36
Desired Asset allocation: approx 85% stocks/15% bonds (flexible)
Desired International allocation: 20-30% (flexible)
Risk tolerance: relatively high

Assets:

Total net worth Ė about $320K (100%)

Cash and Cash Equivalents (total $44K, 14% of NW)
-Vanguard Tax-Exempt Money Market Fund (6.7K, 2%)
-US-based checking accounts: (24K, 7.5%)
-International checking account (13K dollar equivalent, 4%)

Taxable Investment Account
Vanguard Brokerage Account (total 118K, 37% of NW)
-VFIAX Vanguard 500 Index Fund Admiral Class, ER 0.05% (95K, 30%)
-VTMGX Vanguard Developed Markets Index Fund Admiral Shares, ER 0.09% (10K, 3%)
-VWO VANGUARD FTSE EMERGING MARKETS ETF, ER 0.15% (1.7K, 0.5%)
-RSX MARKET VECTORS ETF ER 0.61% (4.7K, 1.5%)

Tax Advantaged Investment Accounts
Vanguard ROTH IRA (total 24.4K, 7.7% of NW)
-VYM VANGUARD HIGH DIVIDEND YIELD ETF, ER 0.10% (19K, 6%)
-VNQ VANGUARD REIT INDEX ETF, ER 0.12% (5.4K, 1.7%)

401K (Provider Selected by Employer)
2040 target date retirement fund, ER 0.5% (109K, 34% of NW)
This is a relatively expensive target date fund which doesnít have a ticker. Approx. asset allocation: 30% intl stocks, 8% bonds, 62% US Stocks (large and mid cap). I am considering replacing it with an S%P500 ETF which is available for 0.15% ER from the same 401K provider. There are other funds as well, but they are relatively expensive, particularly international funds. To avoid paying high fees, I am considering rolling over the 401K to a Vanguard IRA when I quit my current job.

HSA account: almost all of it invested in VIIIX Vanguard Institutional Index (ER 0.41% including HSA providerís fee). (12.4K, 3.8% of NW).

Foreign Retirement Accounts:

Defined Benefit Pension from a former employer in Europe:
From age 65, I expect to be paid $260/month in today's currency, adjusted for inflation. If I take the pension at 55, I'll be paid approx $150/month in today's currency. I use $13K (4% of NW) as the current value of this pension because this is how much I would get if I transfered it to a different pension scheme, but Iím going to keep it as it seems to be worth considerably more.

Other Foreign Pension:
A state pension fund from an emerging market country, currently valued at $10K (3% of NW), can withdraw early or keep it until retirement age. This amount is invested in emerging market government bonds. I'm not going to cash it anytime soon because it's good for diversification.

Savings/Contributions:

I currently max out my 401K and ROTH IRA and HSA and contribute $3K/month to taxable accounts. Total target contributions are about $60K/year (including taxable, tax-advantaged and company match), currently higher because Iíve been dollar cost averaging extra cash and will reduce after tax contributions when Iím ok with my cash holdings.

Withdrawals plan:

First few years - use taxable accounts and savings from part time gig/business for living expenses. Roll over 401K to IRA immediately, then use the ROTH IRA conversion ladder.
After that, use part time business income + ROTH IRA principal until I can withdraw interest. Wind down the business/part time gigs, timing will depend on financial conditions.
After age 55, use the next egg, including tax advantaged accounts and small foreign pensions, for living expenses. Also add Social Security after age 65 (exact timing depends on financial conditions).

Questions:

1. How realistic is my goal to drop out of the rat race as soon as possible? Please feel free to critique it from the financial/risk as well as lifestyle perspective and point out its weaknesses.

2. How do I optimize my portfolio given my current situation and goals? What can be improved in terms of asset allocation and specific funds I invest in?

3. Regardless of the plan (which I can adjust based on feedback as well as financial situation going forward), are there any obvious mistakes or improvement opportunities in my portfolio?

Thanks a lot for taking a look! All advice is very appreciated!

dungoofed

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #1 on: October 19, 2015, 04:02:29 AM »
I'm doing something similar. In your scenario I'd be on the cusp between the detox (acclimatising my wife to Australia, in my case), and starting to hustle up some cash flow streams (selling puts for cash, ecommerce site, freelancing, translating, laboring, odd jobs, etc).

I believe you actually need a lot less than the 4% Rule would suggest, but there are a few compromises. The attitude that helped me pull the trigger was, "With the money I have saved now, even if all I manage to do for the next 30 years is part time work to cover my monthly expenses, at the end of the 30 years I'll be able to retire comfortably."

How confident are you that you can get something happening with your freelancing/bootstrapping?

You'll have to get some others to comment on your portfolio as tax/etc is different over here. In my case I'm a bit biased towards yield at the expense of capital growth.

Good luck!!

GGNoob

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #2 on: October 19, 2015, 07:07:11 AM »
Questions:

1. How realistic is my goal to drop out of the rat race as soon as possible? Please feel free to critique it from the financial/risk as well as lifestyle perspective and point out its weaknesses.

2. How do I optimize my portfolio given my current situation and goals? What can be improved in terms of asset allocation and specific funds I invest in?

3. Regardless of the plan (which I can adjust based on feedback as well as financial situation going forward), are there any obvious mistakes or improvement opportunities in my portfolio?

1. As long as you are willing to live in a low CoL country, it seems very realistic. A friend of mine is currently living/working in Manilla, Philippines (while getting paid a great US salary) and wants to retire there. He figures he could easily retire with about $300k.

2. Just pick your desired allocation for your entire portfolio and stick with it. Then when you start withdrawing from your portfolio, use your withdrawals to rebalance. Instead of RSX, I'd probably hold a US bond fund like BND. You could always add BNDX if you wanted International bonds. When you leave your job, roll your 401k into your IRA (or into a new IRA) and invest according to your desired overall allocation. As far as the pensions go, I'd personally withdraw them to invest myself, but that's just me. You'd end up with about the same amount of money in 30 years. I just don't trust that the pension won't get cut before I can withdraw. Not to mention, I just prefer to be in charge of my own money.

3. Kinda covered this in question 2.

Overall seems like a pretty good plan as long as you are certain you'll be able to get a freelance job. Otherwise you could always work 1-2 more years and not have to rely on working part-time.

Retire-Canada

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #3 on: October 19, 2015, 07:24:59 AM »
You have a lot of cash that's not really working for you so when you do your 4% rule calculations take that out or use cFIREsim to see how well your asset allocation would work will that much cash.

If you can save $60K/yr I'd stick out another year or two. The reward for doing so in terms of increasing your net worth is pretty substantial.

tooqk4u22

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #4 on: October 19, 2015, 10:06:14 AM »
I have no family, no children, no plans or desire to have them in the foreseeable future. I live in the US (HCOL area) and have a pretty good professional job which I don't like.

This is the only statement that matters......it cracks me up when people in this situation ask this question.  If you no obligation for anyone other than yourself and desire to keep it that way, you are more free than you know and it is only your demons/lifestyle that controls you.


LAGuy

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #5 on: October 19, 2015, 10:39:53 AM »
I have no family, no children, no plans or desire to have them in the foreseeable future. I live in the US (HCOL area) and have a pretty good professional job which I don't like.

This is the only statement that matters......it cracks me up when people in this situation ask this question.  If you no obligation for anyone other than yourself and desire to keep it that way, you are more free than you know and it is only your demons/lifestyle that controls you.

This is a pretty true statement. Especially for those that want to do as the OP does; I want to do something similar. But really, the hostels of the world are full of those who never really worked a day in their life. Not everybody or even most are that way, but the travel bum life has existed for a long time.

In my own research, assuming you don't want to live like the locals - there's a reason they're all trying to get to the US - I think your budget of $1500 a month is really at the lowest end of acceptable and leaves little margin for error. There's definitely singles that live abroad for that much, but it seems the most commonly accepted amount for frugal overseas living without having to live like the impoverished locals, is about $2000 a month. But don't expect to do much "traveling." That's the settle down and go nowhere rate. $3000 a month is probably a much more comfortable number, and it's what I'm going to budget for at a minimum, with the $2000 a month figure as my "go to ground and live in Cambodia for a few years" number.

Finally, I think you need to budget for a possible return someday. Your health needs may require you to be back in the US system. You don't need to budget for NYC/LA/SF living, but I think you do need the ability to live in your home country should you desire or need to. A LCOL area in the US is easily doable on $3000 a month...or less. So, for me, wanting to do something similar to you, I've targeted $720,000 total invested assets to be my FIRE number. That's a 5% withdrawl rate to reach $3000 a month in income ($36,000 a year) knowing have the ability to cut it down to $24,000 a year if need be.

Radagast

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #6 on: October 19, 2015, 01:49:54 PM »
I traveled around China for $1,000 per month, and that was spending far more than a local and getting nothing for free. But with inflation and unknown expenses $1,500 per year is a much better guess; cheap countries will probably continue to get more expensive so it is better to aim higher. In fact because of likely higher costs/standards of living even in poor countries I agree $3,000 per month is preferable. Eventually you will stop traveling and find that money is very useful to have.

dungoofed

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #7 on: October 19, 2015, 03:34:59 PM »
South East Asia with $1000/month allows you to live in relative luxury. Beyond that, all you're paying for are creature comforts that you miss from home.

OP is from a LCOL country, and doesn't seem to be indulging in HCOL trimmings except for travel.

Also OP you will be well-positioned to take advantage of any opportunities on the ground as they are happening. If you're a Western-trained developer on the ground in Myanmar, an uptick in the local economy could cause local demand for your services to skyrocket (not location-independent, I know, but if you're the only person locally who can do a job you can often set your price).

Matumba

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #8 on: October 19, 2015, 08:04:21 PM »
South East Asia with $1000/month allows you to live in relative luxury. Beyond that, all you're paying for are creature comforts that you miss from home.

OP is from a LCOL country, and doesn't seem to be indulging in HCOL trimmings except for travel.

Also OP you will be well-positioned to take advantage of any opportunities on the ground as they are happening. If you're a Western-trained developer on the ground in Myanmar, an uptick in the local economy could cause local demand for your services to skyrocket (not location-independent, I know, but if you're the only person locally who can do a job you can often set your price).

Unfortunately, I am not a developer of any kind. I work in Finance and have a skill set which is good for working for big companies but not so good for starting my own business. I can spend a few month and learn new skills which are more suitable for smaller companies or working independently.

I agree that 1000/month is doable in many low cost cities in Asia, but I would have very little room for error if I had to budget only 1K/mo.

dungoofed

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #9 on: October 20, 2015, 01:48:00 AM »
Ok here's how I'd do it. I'd give myself a 12-18 month runway, and in that time I'd 1) do as much study/preparation/planning trips/investing money/hustling/etc as I could, and 2) stop giving a shit about the job and just start using them out as it suited you.

After six months you should know whether you have what it takes to be your own boss. If you haven't made any significant progress on 1) above then you might need to reconsider your plan.

Financial.Velociraptor

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #10 on: October 20, 2015, 09:59:11 AM »
Do you know your lifestyle burn rate?  That is, how much income will you need a year in FIRE?  I went FIRE at 40 on not much more networth than you although that included a paid off house.

Agree with above poster that 4% rule is overly conservative.  With a higher bond allocation, allocation to high yield stocks, and cash allocation used to secure written puts; a much higher cash yield is sustainable and in my opinion actually safer than the conventional approach.  I've been blogging about such since January - most of MMM community seems to disagree with my analysis.  YMMV.

2Birds1Stone

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #11 on: October 20, 2015, 11:23:47 AM »
To answer your thread title, no not yet. I would wait 2-3 years to allow a safety margin.

aeroplane

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #12 on: October 21, 2015, 09:26:26 AM »
South East Asia with $1000/month allows you to live in relative luxury. Beyond that, all you're paying for are creature comforts that you miss from home.

OP is from a LCOL country, and doesn't seem to be indulging in HCOL trimmings except for travel.

Also OP you will be well-positioned to take advantage of any opportunities on the ground as they are happening. If you're a Western-trained developer on the ground in Myanmar, an uptick in the local economy could cause local demand for your services to skyrocket (not location-independent, I know, but if you're the only person locally who can do a job you can often set your price).

Unfortunately, I am not a developer of any kind. I work in Finance and have a skill set which is good for working for big companies but not so good for starting my own business. I can spend a few month and learn new skills which are more suitable for smaller companies or working independently.

I agree that 1000/month is doable in many low cost cities in Asia, but I would have very little room for error if I had to budget only 1K/mo.

Having lived in Thailand for about three months I can tell you that $1000 USD/month is plenty.  I stayed in a hotel (a really nice one with a pool, AC (don't underestimate the importance of AC in Thailand...), room cleans, and nice hot shower, ect. for about $250-$300).  I'd imagine if you were staying longer term you could get it for even cheaper (I moved around within Thailand and wasn't in one place for longer than a month).  Particularly in Northern Thailand, you can get a nice meal for about $1-$2 at a locals restaurants or $3-$5 at foreigner restaurants.  Interestingly, it's more expensive to buy and cook your own food from the supermarket, but you could probably find a local market to buy raw ingredients from for cheap if that's your cup of tea.  Besides that, theres plenty of English speakers in touristy areas like Chiang Mai so you won't be lonely.  You could also be an English teacher on a part time basis which would probably cover most of your expenses.  The jobs are pretty easy to come by and you don't have to speak Thai.  It's a good way to meet other foreigners too.  Just some food for thought...
« Last Edit: October 21, 2015, 09:29:58 AM by aeroplane »

brokescientist

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #13 on: October 29, 2015, 11:07:18 AM »
I have no family, no children, no plans or desire to have them in the foreseeable future. I live in the US (HCOL area) and have a pretty good professional job which I don't like.

This is the only statement that matters......it cracks me up when people in this situation ask this question.  If you no obligation for anyone other than yourself and desire to keep it that way, you are more free than you know and it is only your demons/lifestyle that controls you.

This is a pretty true statement. Especially for those that want to do as the OP does; I want to do something similar. But really, the hostels of the world are full of those who never really worked a day in their life. Not everybody or even most are that way, but the travel bum life has existed for a long time.

In my own research, assuming you don't want to live like the locals - there's a reason they're all trying to get to the US - I think your budget of $1500 a month is really at the lowest end of acceptable and leaves little margin for error. There's definitely singles that live abroad for that much, but it seems the most commonly accepted amount for frugal overseas living without having to live like the impoverished locals, is about $2000 a month. But don't expect to do much "traveling." That's the settle down and go nowhere rate. $3000 a month is probably a much more comfortable number, and it's what I'm going to budget for at a minimum, with the $2000 a month figure as my "go to ground and live in Cambodia for a few years" number.

Finally, I think you need to budget for a possible return someday. Your health needs may require you to be back in the US system. You don't need to budget for NYC/LA/SF living, but I think you do need the ability to live in your home country should you desire or need to. A LCOL area in the US is easily doable on $3000 a month...or less. So, for me, wanting to do something similar to you, I've targeted $720,000 total invested assets to be my FIRE number. That's a 5% withdrawl rate to reach $3000 a month in income ($36,000 a year) knowing have the ability to cut it down to $24,000 a year if need be.

I also have to disagree with this.    I have lived in Thailand for two years and did so on a salary of 1200 dollars a month.   I ate like a local (but that was awesome) and I lived on the 22nd story of a high rise with 2 balconies, had a swimming pool and gym in my building, and was right down the street from the city transit train. 

I was able to travel almost constantly to nearby beaches to Bangkok (which is basically any beach in Thailand), Vietnam, Laos, Nepal, India, and all over Thailand.

I would like to be impoverished again please!


LAGuy

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #14 on: October 29, 2015, 11:50:40 AM »
I have no family, no children, no plans or desire to have them in the foreseeable future. I live in the US (HCOL area) and have a pretty good professional job which I don't like.

This is the only statement that matters......it cracks me up when people in this situation ask this question.  If you no obligation for anyone other than yourself and desire to keep it that way, you are more free than you know and it is only your demons/lifestyle that controls you.

This is a pretty true statement. Especially for those that want to do as the OP does; I want to do something similar. But really, the hostels of the world are full of those who never really worked a day in their life. Not everybody or even most are that way, but the travel bum life has existed for a long time.

In my own research, assuming you don't want to live like the locals - there's a reason they're all trying to get to the US - I think your budget of $1500 a month is really at the lowest end of acceptable and leaves little margin for error. There's definitely singles that live abroad for that much, but it seems the most commonly accepted amount for frugal overseas living without having to live like the impoverished locals, is about $2000 a month. But don't expect to do much "traveling." That's the settle down and go nowhere rate. $3000 a month is probably a much more comfortable number, and it's what I'm going to budget for at a minimum, with the $2000 a month figure as my "go to ground and live in Cambodia for a few years" number.

Finally, I think you need to budget for a possible return someday. Your health needs may require you to be back in the US system. You don't need to budget for NYC/LA/SF living, but I think you do need the ability to live in your home country should you desire or need to. A LCOL area in the US is easily doable on $3000 a month...or less. So, for me, wanting to do something similar to you, I've targeted $720,000 total invested assets to be my FIRE number. That's a 5% withdrawl rate to reach $3000 a month in income ($36,000 a year) knowing have the ability to cut it down to $24,000 a year if need be.

I also have to disagree with this.    I have lived in Thailand for two years and did so on a salary of 1200 dollars a month.   I ate like a local (but that was awesome) and I lived on the 22nd story of a high rise with 2 balconies, had a swimming pool and gym in my building, and was right down the street from the city transit train. 

I was able to travel almost constantly to nearby beaches to Bangkok (which is basically any beach in Thailand), Vietnam, Laos, Nepal, India, and all over Thailand.

I would like to be impoverished again please!

Look, I'm not saying you can't. I'm saying would you really want to? And for how long? I mean, the fact is you can live for under $1500 a month right here in the States as well if you want to. Let's let look at some costs of living in the third world.

Food. Sure, you can buy street food for less then one dollar. You can go to Thai hole in the wall restaurants for a couple bucks. But sometimes, you just want a burger from Carl's Jr (or pick your poison). That'll still run you Western prices at 7 to 8 bucks for your combo meal.

Clothing/life amenities. Again, you can live cheap like the Thai's do. Of course, you'll be buying products that even Walmart rejected for being of inferior quality. Or, you can buy Chinese made products that could poison you. Or, you can go to one of their Western style shopping mecca's where you can get all the comforts of home. And pay more for it then you do back home too. You ever have visitors from some of these countries come see you in the States? Know what they stock up on for the trip home? Consumer household goods: detergent, bed sheets, stuff like that. They can't get affordable quality stuff in their countries. They don't do Target in Thailand.

Housing. Yup, you can get inexpensive housing in Thailand. But don't expect to be too close to Bangkok where you can still pay up to $1000 a month for a flat. Want to live super cheap out in rural Issan? Hope you like people burning their trash out in their yards and other quaint practices.

Finally, due to your low budget, you're essentially stuck in Thailand like the locals. You're not going to be doing much travel to the West on that kind of budget. And yes, yes...I know. Somebody will come on here and tell me how they backpacked across Europe for $500 a month or something. All sorts of things are POSSIBLE. Just look at the extreme early retirement blog. Guys over there living right here in the US for less then $7000 a year. But, if you want to DO things. You're going to need more money. To me, the allure of living in SE Asia, Central America, etc is that for a modest amount of money you can live like a king; not the ability to live like the impoverished locals. But that's just me.

ynotme

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #15 on: October 30, 2015, 05:07:18 PM »
It sounds like what you really want to do is downshift at this point and also spend time travelling. If you really want to do this, one approach would be:
  • Use the $44k cash you have to support you for 2 years travelling and living overseas. Give yourself permission to trial this lifestyle for 1-2 years to see if you want to do it long-term. Sometimes doing the long-term travel gets the bug out of your system.
  • Give yourself a 2 year deadline to set up alternative income streams that will fund your new lifestyle. If you get this going, great. However not everyone can and if you find that out, you may have to return to work for another few years until you are FI. This may or may not be at your current career. You could also look for finance roles in one of your preferred lifestyle destinations. There are plenty of finance roles in Asia.
  • Don't touch your investments and allow it to grow to meet your FI goal. Until it does, you won't be fully free. If you do work, continue to add to the stash until you are free.
The above is really dependent on whether you are willing to take the risk of having to return to work at some point or if you would prefer to wait and get to FI. People may say you won't get a job if you have a break but speaking from experience, it is possible as you would have solid experience behind you which is valuable to an employer.

I also agree with others that you may find at some point you want to return and your stash may not make this possible. That's why it may be safer to keep it intact and allow it to grow. Try and create a self-sufficient lifestyle rather than drawing down on your investments for now.

dungoofed

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #16 on: October 30, 2015, 05:54:25 PM »
  • Give yourself a 2 year deadline to set up alternative income streams that will fund your new lifestyle.


I'll just add, the time to be preparing for this is now. If you can spend 1-2 hours a day learning the skills you think you'll need (eg practice setting up a blog, actually writing blog articles, Mailchimp, stock photo royalties, online marketing etc) then you'll not only have a head start (and maybe even an income) at the time you quit, you'll also have a better idea as to whether you have the personality for it.

There is no shortage of people who simply cannot build a business on their own. They get set up with their shared learning space in Bali and their blog and their signup form, then sit there facebooking ("growth hacking") and checking stats and whatnot, wondering when the money is going to start rolling in. Next thing two years have passed.

Case in point, I did all the preparation but it still took me nearly six months to whittle down my list of ideas, start one, and finally get my first dollar in passive income.

Left

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #17 on: October 30, 2015, 06:23:51 PM »
is it me or do people ignore the visa issue when they say they can just work at the new country?

fairly sure even online work needs a visa... its near impossible to enforce but that doesnt make it legal... no different than being a prosititue overseas right? even those online poker players arent exactly legal workers either... they get overlooked because they spend money but still not legal

even if you start a business, that requires getting a business visa to do it in the other country if you want it to be legal
« Last Edit: October 30, 2015, 06:27:44 PM by eyem »

dungoofed

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #18 on: October 30, 2015, 06:40:46 PM »
(disclaimer: I'm stating my observations, not giving advice)

Visa and tax, mostly ignored.

There have been some cases of people getting caught, some crackdowns, etc. Being American doesn't help. Keeping a low profile is always a good idea.

For taxes the law is quite explicit, but there is a lot of grey when it comes to visas. And it's not just limited to freelancers/entrepreneurs in these countries - in the age of remote desktop a country's borders start to look rather quaint.

frugal_c

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Re: Reader case study: do i have enough to drop out of the rat race?
« Reply #19 on: November 10, 2015, 07:27:19 PM »
How much do you think you would make from your side business (be realistic)?   Would you be able to relax if you had to run a side business?

I would be really tempted to save a couple more years and get that number up to $450k.  At that point you can take $1500 / mo which is about the minimum I would be comfortable with.