Would giving up a car and living on a couple hundred dollars a month in a tropical island paradise be worth not having to spend an extra 30-40 years of your life working? I can see some people thinking that yeah...that would be a pretty good deal.
Take the minimum amount that you need to spend in a year. Multiply that by 25. That's the minimum amount you need to retire at a young age and not go broke within a couple decades. This number does not count large single ticket items such as housing, medical emergencies, college, etc.
So if you consider that 100k after spending 60k on housing (good find by the way. I would totally go for that place if I was retiring to hawaii.) That leaves $40k in investments or $1,600/yr to spend. That's around $4 a day.
$4 a day in disposable income, food and clothing isn't all that bad. But what about health insurance? What about utilities (you want water, electricity and internet presumably). What about health insurance? Medicaid is better then nothing but even a minor illness can be very expensive when you are on medicaid and have to meet deductables and copays. It's true that a lot of expenses can be avoided if you opt out of consumer spending habits. But a lot of other expenses can't be avoided unless you turn your back on civilization. Oh and there is the $333/yr that you'd be paying in
property taxes on that house on Hawaii island.
I think you'd have better luck if you take a step back, turn things around and talk about how much you need per month rather then how much you need in the bank. Tally up everything you need on a monthly basis because most of our bills work that way. Include everything you really want, e.g. electricity, healthcare, classes at community college to keep from getting bored. Include rental costs or add housing costs onto your final figure. Multiply by 300 (12 months and that 25 figure). That's the amount you need at minimum for your youthful retirement.
So suppose 350 for housing and utilities (assuming you are living rural), 150 for high deductable insurance for a young person, no car, 300 a month for food, clothing, etc. 50 for hobbies like community college classes and another 50 a month as a cushion for a total of 800/month. To live this lifestyle on your savings you'd need $240k saved up although that might be low. The idea makes a lot more sense however if you are married/long term relationshipping. In that case you are going to be paying a lot less per person. Housing the same, utilities only a little more, insurance around 220, food, clothes and the like maybe 450 and maybe 150 for hobbies and cushion. Call it $1020/month which requires a bit more then 300k saved up. So on a per-capita basis the cost shoots waaaay down.
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Topic: You have $100,000 and want to retire and/or expatriate. What do you do? (Read 28445 times)