Comments on: Stranger in a strange land http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html Financial independence, frugality, self-sufficiency, ecology, capitalism, and voluntary simplicity Sat, 11 Oct 2008 02:07:09 +0000 http://wordpress.org/?v=2.6.2 By: sonoben http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-820 sonoben Fri, 21 Mar 2008 06:28:37 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-820 I like your post - there is only one problem - have you ever tried to put in 80 hours a week in college. I have tried 21 credit hours and 18 hours of work and it almost killed me (granted the college I go to expects one credit hour to be from three to four actual hours of work) Can you tell me were I am support to get all of this money in college. I am currently a college student and I have been able to not take out student loans - with a bit of parental help but I had to work so hard to do it I could not keep it up for four years. This is my last year and I am burnt out and had to ask for some loans simply because I can not keep up with the work load I have been carrying. But I do not have any extra money to show for it (try getting a job that pays more then 10 dollars in hour in upstate ny well you are a college student.) So in the end I like your post but it seems a bit optimistic to me. I like your post - there is only one problem - have you ever tried to put in 80 hours a week in college. I have tried 21 credit hours and 18 hours of work and it almost killed me (granted the college I go to expects one credit hour to be from three to four actual hours of work) Can you tell me were I am support to get all of this money in college. I am currently a college student and I have been able to not take out student loans - with a bit of parental help but I had to work so hard to do it I could not keep it up for four years. This is my last year and I am burnt out and had to ask for some loans simply because I can not keep up with the work load I have been carrying. But I do not have any extra money to show for it (try getting a job that pays more then 10 dollars in hour in upstate ny well you are a college student.)

So in the end I like your post but it seems a bit optimistic to me.

]]> By: Sarah http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-795 Sarah Tue, 18 Mar 2008 23:00:43 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-795 I'm 21 yrs old, and I'm graduating from college in a few months and going in to a job and existing in a financial situation that leaves me where I could very easily do what you described in your blog post. To me really, I should feel excited, but I feel more scared by the possibilities ahead of me. I guess most of my apprehension is just the uncertainty of what I'm going to be starting on in a few months, up until now there's always been a structure, after high school, go to college, after college find a job. But I definitely don't want to work until I'm 60, and I'm gunning to "retire" between 35 and 40, or even sooner. As such, I can really appreciate your discussion of a strange living where most people work 9-5 and live a generally monotonous existence and you don't. It will also be interesting to see what kind of life I'm living and how much I'm spending, and what I'm spending my money on. I’m 21 yrs old, and I’m graduating from college in a few months and going in to a job and existing in a financial situation that leaves me where I could very easily do what you described in your blog post.

To me really, I should feel excited, but I feel more scared by the possibilities ahead of me. I guess most of my apprehension is just the uncertainty of what I’m going to be starting on in a few months, up until now there’s always been a structure, after high school, go to college, after college find a job.

But I definitely don’t want to work until I’m 60, and I’m gunning to “retire” between 35 and 40, or even sooner. As such, I can really appreciate your discussion of a strange living where most people work 9-5 and live a generally monotonous existence and you don’t.

It will also be interesting to see what kind of life I’m living and how much I’m spending, and what I’m spending my money on.

]]> By: Jacob http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-720 Jacob Tue, 11 Mar 2008 02:36:16 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-720 @Bob - I think the most frequent critique is that "there is no way one can live on $X/month". Naturally this number has to be adjusted to whatever one's personal X is. My $X in todays dollars could be as low as $400 which would include a shared apartment in some boring town and a frugal lifestyle. This is my number - one individual. If there are more than one individual, presumably everybody can pay their own fare. If not, naturally one person would have to work for the other - even further if kids are involved. Now $X is personal. Many people have higher numbers. A few have lower numbers (I don't know how they do it - actually I do). Anyway, this would correspond to $120,000 in present dollars assuming that I would never work again and save another dime. I don't consider that likely. My point was that after the initial decade there is a lot more freedom of choice if one has saved $100k (or more as I did). There are many opportunities for part time jobs, consulting or volunteering that can pay living expenses. In fact I would find it tough to earn only $4800/year even with a part time job and if you are free to choose whatever you want, why stop at 54? Thus the final amount is likely to be higher than projected. @Bob - I think the most frequent critique is that “there is no way one can live on $X/month”. Naturally this number has to be adjusted to whatever one’s personal X is. My $X in todays dollars could be as low as $400 which would include a shared apartment in some boring town and a frugal lifestyle. This is my number - one individual. If there are more than one individual, presumably everybody can pay their own fare. If not, naturally one person would have to work for the other - even further if kids are involved.
Now $X is personal. Many people have higher numbers. A few have lower numbers (I don’t know how they do it - actually I do). Anyway, this would correspond to $120,000 in present dollars assuming that I would never work again and save another dime. I don’t consider that likely. My point was that after the initial decade there is a lot more freedom of choice if one has saved $100k (or more as I did). There are many opportunities for part time jobs, consulting or volunteering that can pay living expenses. In fact I would find it tough to earn only $4800/year even with a part time job and if you are free to choose whatever you want, why stop at 54? Thus the final amount is likely to be higher than projected.

]]> By: Bob http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-719 Bob Tue, 11 Mar 2008 00:46:27 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-719 This sounds nice, but it is fatally flawed in many respects. First, $100,000 at age 30 isn't nearly enough. Using the rule of 72 and assuming a generous 9% return, you'd have $800,000 at age 54 (I choose 54 because it's a nice round number that enables the easy use of the rule of 72, and it's about the time when most people are fed up and want out of the rat-race altogether). The problem is, that $800,000 might buy, say... less than one-third of what $800,000 buys today. Don't believe it? Just go to an inflation calculator and you'll see that what cost $800000 in 1960 (24 years before 1984) would cost over roughly $2,800,000 in 1984. Or said another way, if you were to buy exactly the same products in 1984 and 1960, they would have cost you $800000 and $233,000 respectively. So... utilizing your plan could very well be like being 54 today with a nest egg of only $233,000... not nearly enough for someone who has been traveling around working here and there (so no pension and minimal Social Security)... forget about it! Under this scenario, you'd be able to buy about $776/month worth of goods in today's dollars. You'd need to work to support yourself; you'd die at your desk (or wherever you are working). Furthermore, your plan fails to account for a family, kids' college costs, illnesses and disabilities that might strike you (or your kids), investment knowledge, inflation... I am an early retiree. I ran the numbers a thousand ways before quitting, and there are no easy outs. And this this particular idea is seriously flawed. Nice try, but it's a recipe for failure. This sounds nice, but it is fatally flawed in many respects.

First, $100,000 at age 30 isn’t nearly enough. Using the rule of 72 and assuming a generous 9% return, you’d have $800,000 at age 54 (I choose 54 because it’s a nice round number that enables the easy use of the rule of 72, and it’s about the time when most people are fed up and want out of the rat-race altogether).

The problem is, that $800,000 might buy, say… less than one-third of what $800,000 buys today. Don’t believe it? Just go to an inflation calculator and you’ll see that what cost $800000 in 1960 (24 years before 1984) would cost over roughly $2,800,000 in 1984. Or said another way, if you were to buy exactly the same products in 1984 and 1960,
they would have cost you $800000 and $233,000 respectively.

So… utilizing your plan could very well be like being 54 today with a nest egg of only $233,000… not nearly enough for someone who has been traveling around working here and there (so no pension and minimal Social Security)… forget about it! Under this scenario, you’d be able to buy about $776/month worth of goods in today’s dollars. You’d need to work to support yourself; you’d die at your desk (or wherever you are working).

Furthermore, your plan fails to account for a family, kids’ college costs, illnesses and disabilities that might strike you (or your kids), investment knowledge, inflation…

I am an early retiree. I ran the numbers a thousand ways before quitting, and there are no easy outs. And this this particular idea is seriously flawed.

Nice try, but it’s a recipe for failure.

]]> By: The Executioner http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-671 The Executioner Fri, 07 Mar 2008 19:45:51 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-671 I'm arriving late to this discussion, but this post summarized very concisely some of my own thoughts. My goal is to get out of the working world as quickly as possible. My wife and I already have the retirement savings part covered in our late 20s (her) and early 30s (me) but we are hoping to eliminate our mortgage debt in the next 5 years so we can live rent-free. After that, we won't feel chained to a traditional job and will work only to pay our living expenses (food, etc) and maintain some type of employer-paid catastrophic health care coverage. Ideally I'd love to work part-time until we had enough of a cushion to wean ourselves off of traditional employment entirely. The health care coverage would still be an issue at that point, but I hope we can find a no-frills, high-deductible plan on our own, only to be used if one of us gets hit by a bus or something. What are you doing for health care coverage? I’m arriving late to this discussion, but this post summarized very concisely some of my own thoughts. My goal is to get out of the working world as quickly as possible. My wife and I already have the retirement savings part covered in our late 20s (her) and early 30s (me) but we are hoping to eliminate our mortgage debt in the next 5 years so we can live rent-free. After that, we won’t feel chained to a traditional job and will work only to pay our living expenses (food, etc) and maintain some type of employer-paid catastrophic health care coverage. Ideally I’d love to work part-time until we had enough of a cushion to wean ourselves off of traditional employment entirely. The health care coverage would still be an issue at that point, but I hope we can find a no-frills, high-deductible plan on our own, only to be used if one of us gets hit by a bus or something. What are you doing for health care coverage?

]]> By: Jacob http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-526 Jacob Mon, 25 Feb 2008 05:27:58 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-526 @Angela - I think the key to exploring in general is to remain unencumbered (move light and fast). Also there are different ways of exploring. Normally people grow roots in their 30s. Big and expensive ones. Such an upkeep is expensive, but if it does not exist one can travel for free. For instance, volunteer positions have room and board paid and might even cover the relocation and a small allowance (live of the land). I think kids are exactly as cumbersome as people make them. Some say a child costs $250k to raise. I'm not sure what could cost so much except 22 years of life in institutions (day care, pre-school, private school, private college). I am not a big fan of institutions. Kids will strive to emulate their surroundings. I think that this should be parents unless the parents think they would set a bad example. I think in all cases it depends on how skillful a person is. I mean, the importance and connection between being self-reliant and resource-full and not spending a lot of money is getting more and more clear to me. E.g. one can pay a nanny or a daycare center or one can DIY. One can pay an expensive preschool to pretend to teach the kid foreign languages or one can do it oneself while exploring the world, etc. I think that the general rule in all cases is .. if one follows the herd there are lots of enterprising people that are willing to take one's money. @Angela - I think the key to exploring in general is to remain unencumbered (move light and fast). Also there are different ways of exploring. Normally people grow roots in their 30s. Big and expensive ones. Such an upkeep is expensive, but if it does not exist one can travel for free. For instance, volunteer positions have room and board paid and might even cover the relocation and a small allowance (live of the land).
I think kids are exactly as cumbersome as people make them. Some say a child costs $250k to raise. I’m not sure what could cost so much except 22 years of life in institutions (day care, pre-school, private school, private college). I am not a big fan of institutions. Kids will strive to emulate their surroundings. I think that this should be parents unless the parents think they would set a bad example. I think in all cases it depends on how skillful a person is. I mean, the importance and connection between being self-reliant and resource-full and not spending a lot of money is getting more and more clear to me. E.g. one can pay a nanny or a daycare center or one can DIY. One can pay an expensive preschool to pretend to teach the kid foreign languages or one can do it oneself while exploring the world, etc. I think that the general rule in all cases is .. if one follows the herd there are lots of enterprising people that are willing to take one’s money.

]]> By: asrai0fire http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-524 asrai0fire Mon, 25 Feb 2008 04:32:04 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-524 Hi Jacob, Thought-provoking post. What struck me most was the idea of working hard throughout your twenties and then using your thirties to explore. That's the opposite of the current thinking where twenty-somethings are told to use this decade to "discover" ourselves. I'm twenty-five and I've practiced PF management throughout my life. I have no loans and significant retirement and savings funds. At the same time, my career track is meaningful and fulfilling to me. So instead of the typical "quarterlife crisis" I'm finding myself in a situation where I like my life but seeing the possibility that I will want to shake things up in a decade or so. At the same time, much as I want to travel for one to two years, I shudder at the thought of squandering a good chuck of my savings when I could have much more earning interest down the road, i.e., when my interest could be paying for that expedition. So thanks for this post. I'm glad I'm not the only one who sees thirties as a work-family-drone kind of life. As a female whose biological clock would be ticking at that age, I'm interested in how you think couples with young children would be able to manage the personal finance aspect of such a decade. After all, the main argument for exploring in one's twenties is that one is unencumbered with kids. Thanks again! Angela Hi Jacob,

Thought-provoking post. What struck me most was the idea of working hard throughout your twenties and then using your thirties to explore. That’s the opposite of the current thinking where twenty-somethings are told to use this decade to “discover” ourselves.

I’m twenty-five and I’ve practiced PF management throughout my life. I have no loans and significant retirement and savings funds. At the same time, my career track is meaningful and fulfilling to me.

So instead of the typical “quarterlife crisis” I’m finding myself in a situation where I like my life but seeing the possibility that I will want to shake things up in a decade or so. At the same time, much as I want to travel for one to two years, I shudder at the thought of squandering a good chuck of my savings when I could have much more earning interest down the road, i.e., when my interest could be paying for that expedition.

So thanks for this post. I’m glad I’m not the only one who sees thirties as a work-family-drone kind of life. As a female whose biological clock would be ticking at that age, I’m interested in how you think couples with young children would be able to manage the personal finance aspect of such a decade. After all, the main argument for exploring in one’s twenties is that one is unencumbered with kids.

Thanks again!
Angela

]]> By: Jacob http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-465 Jacob Wed, 20 Feb 2008 02:57:26 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-465 @antishay - stumble it, digg it, etc. :-) @antishay - stumble it, digg it, etc. :-)

]]> By: antishay http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-459 antishay Tue, 19 Feb 2008 21:52:48 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-459 THANK YOU for this! I used it as a reference in my recent post "Deciding What You 'Can' Afford": http://www.antishay.com/?p=35 I hope this post gets a lot of circulation. Thank you again :) THANK YOU for this! I used it as a reference in my recent post “Deciding What You ‘Can’ Afford”: http://www.antishay.com/?p=35

I hope this post gets a lot of circulation. Thank you again :)

]]> By: chef http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-263 chef Tue, 29 Jan 2008 18:32:52 +0000 http://earlyretirementextreme.com/2008/01/stranger-in-a-strange-land.html#comment-263 Same boat - got a card just to build credit, working on 9 months or so Same boat - got a card just to build credit, working on 9 months or so

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