Paul & Vicki
Paul and Vicki Terhorst, the authors of Cashing in on the American Dream, How to retire at 35, are the leaders in the early retirement movement. Within the last year, they purchased property and built a home outside of Buenos Aires, Argentina. Paul states “they are so far out of town they no longer live in the sticks but in the twigs.”
In May 2007, we met up with Paul and Vicki for a month in the beautiful tropical island paradise of Phuket, Thailand. They took time out of their busy schedule to answer a few of our questions.
You retired at 35 years of age, how many years ago was that?
We retired in 1984, 23 years ago. We both turned 58 this year.
Strolling at sunset, Kata Beach, Phuket, Thailand
How long have you been expatriates, living outside of the US?
We first moved abroad in 1981, before we retired. Since then we returned to live in the United States twice...18 months in Austin, Texas in the early 1990s and 2 years in Las Vegas in the mid 1990s.
Do you visit the US very often? Do you ever yearn to move back?
Vicki averages two visits a year while Paul goes every other year; we go mainly to see family. We constantly make choices and moves that make sense for our lives in the present moment, if we want to live somewhere, even the U.S., we move there.
Paul: We love visiting the U.S., such a dynamic economy, we always have a great time. But the U.S. presents special problems for us, because of crazy medical care costs and an even crazier tort system. From the point of view of financial security the U.S. amounts to the most dangerous place on earth. Thus, for my peace of mind, I generally try to live outside of the U.S.
In 1988 You wrote the groundbreaking book, Cashing in on the American Dream, How to Retire at 35. How has your life been different since that book came out?
The book created a marvelous opportunity to meet hundreds of incredible people, some who have become close friends. Like Billy and Akaisha!
In your book you explained your investing method using a CD ladder approach. Are you still using CD’s or have you modified your portfolio through the years?
We abandoned the CD strategy when rates fell. Now we're 95% stocks, with about half of those natural resource stocks.
Vicki and Akaisha clowning around for the camera
How did you handle the Bear Market of 2000-2002?
We cried a lot. All three years. We even extrapolated and figured if it got really bad we've have to move to Thailand full time. We love Thailand, so that actually cheered us up quite a bit. But the market turned around in late 2002, and by 2004 we'd recovered all our losses. We take comfort from having survived a terrible crash and come out whole.
You wrote in your book that you retired on a budget of 50 Dollars per day or about $18,000 USD per year. Excluding your new home expenses, how much has that changed over the last two decades?
Our budget was $18,000 for daily expenses, plus taxes and airfares totaling $22,000 to 24,000. We believe we can easily live on that today, although we never keep track of our living expenses. The last time we did a back-of-the-envelope calculation, when we were living in Paris in 1998, we were spending a bit more, something like $2,000 a month. Then again Paris was the most expensive place we've lived in.
We've done very well with our investments so when we find something that gives good value we're able to go for it. For example, for several years, there were terrific deals on Round-The-World Business Class tickets in Thailand, so that's how we traveled. And we built a house in Argentina, which ups our fixed costs.
Paul coming in hard from a big wave on his boogie board
Do you have a follow up book in the wings? Where can people read your sage advice these days?
Why, after all these years of being PT’s (Perpetual Travelers), did you decide to build a home? Why now? And why did you choose Argentina?
We temporarily lost our minds. Crazy. We have yet to figure out how to haul a house around the world in our carry-on luggage.
We owned a condo in Buenos Aires when we first retired, and have always felt at home in that city. We speak Spanish. And most importantly, we have many friends and activities we enjoy there. In 2005 we had an opportunity to buy land in a unique, private, secure, development in the countryside where several friends had already built weekend homes. We went for the deal even though we had never even considered building a house.
Has owning a home altered your lives or your traveling lifestyle in any way?
Owning a home has altered our life in Buenos Aires, since we live in the country rather than an apartment in the city. But having the home has had little impact on our travel. We consider this our second home, the world is still our first home. And we travel as much as ever, as we still consider ourselves to be PTs (perpetual travelers).
How do you deal with healthcare? Are you covered by a US insurer, or one in Argentina?
We find health care to be reasonable everywhere we visit except the US. In Argentina we are part of a plan offered by the British Hospital for citizens of English speaking countries. This plan offers huge discounts for most medical care. A doctor's visit is less than $20.00
Are there hardships being an Ex-Pat? If you had to name the single biggest challenge, what would it be?
No hardships come to mind. The internet has made our lives much easier, many of the old challenges no longer exist. Rather than challenges we have so many options. We love traveling to new places, living near Buenos Aires, visiting family and friends, and relaxing in Chiang Mai, Thailand.
Vicki: If I had to name a challenge I suppose it would be wanting to be in more than one place at the same time so I could be physically/personally available for family and friends.
What are the benefits of living in Argentina?
Buenos Aires has old world charm that no longer exists in today's world. Argentina offers great value, although that can quickly change with the exchange rate and inflation.
If someone wanted to retire in Argentina, what would be your advice? Would you recommend it as a retirement destination?
Advice: Learn Spanish. Remember it is very much a third world country even though it appears at first glance to be first world.
Participate in activities you enjoy with Argentines rather than other expats. Rent for the first few years.
Leaders in the ER Movement still enjoying life
More and more expats retire to Argentina, especially creative people like writers and artists. Sometimes Buenos Aires appears to be like Paris must have been in the 1920s.
We understand that you have become a winemaker, growing and crushing your own grapes and bottling the wine. This must be very rewarding to you. Can you share more about this?
Paul here: I make wine with two Argentine friends. We buy old-vine grapes in Mendoza, the country's premier wine region, and ship them to a friend's ranch near Buenos Aires. There we process and ferment the grapes, age the wine in French oak barrels for a year, and bottle it ourselves. My share comes to about 150 bottles a year. We want to improve quality every year, and we've managed that so far-- 2007 was our third year.
Do you have any regrets about retiring early? Looking back, would you have done it any differently?
No regrets and nothing we would do differently. We feel fortunate to live such extraordinary lives.
From your treasury of experiences, what would your main piece of advice be to those considering Early Retirement these days?
Be courageous. Leap. As Argentines say, "you can't take away the dance that's already been danced." Especially if you want to travel--if you want to enjoy the whole world rather than just a tiny corner of it--early retirement makes so much sense.
We want to thank Paul and Vicki for taking the time to share their lives here with us today, and for giving our readers a personal glimpse into their lifestyle.
For an interview up date with the Terhorsts click here
To read more interviews with Expats, Early Retirees and Interesting Characters, click here
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About the Authors
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance, medical tourism and world travel. With the wealth of information they share on their award winning website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible available on their website bookstore or on Amazon.com.
Retire Early Lifestyle appeals to a different kind of person – the person who prizes their independence, values their time, and who doesn’t want to mindlessly follow the crowd.