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On the Beach in Phuket,
Thailand
Some say it's impossible.
Others simply dismiss the notion outright even if they
are curious. How do
we live
on less than $30,000 per year while traveling through
Thailand,
Vietnam,
Mexico,
Central America and other exotic locations? We don't give up
luxury, nor do we deprive ourselves.
So what is our secret?
Our approach is very simple: We have chosen not to dedicate our time and money
to support a complicated infrastructure.
For almost three decades we have
wandered the globe living in countless countries. We have purchased new
computers and digital gadgets, refreshed our wardrobes many times over, received
extensive medical
care, and we have biked, hiked, scuba'd, taxi'd, bused, sailed and flown
endless miles.
How is this possible?
Downsize the house, car, and Uncle Sam
Our housing
expenses include our annual fees, maintenance, repairs, and utilities for our
home in the States, as well as hotel rooms or apartments we may rent while on
the road. To ameliorate this cost, sometimes
we house
sit. We have been
car free for years now, but our transportation costs include airline tickets, visas,
passport renewals, taxis,
boats, trains, and tuk-tuks.
If you look at your own expenses, you will see that
housing and
transportation
take a good chunk of your income. Becoming mindful of what goes in to support
these two areas of your life will be eye-opening. Take a close and honest
evaluation of this state of affairs for yourself. Understand precisely
where your
money goes and why.
Another area that takes fiscal
attention is taxes. Income taxes are something you can control by restructuring your portfolio. Interest from corporate bonds and short-term capital gains are taxed at
income rates that are higher than qualified dividends and long-term capital gains.
This restructuring is something to think about and can save you a significant
amount of money yearly.
In most cases, housing, transportation, taxes and food/entertainment are the top areas of
cash outlay in a person's economic life. Modifying any or all of them -- which
is exactly what we did -- will have a significant impact on your annual
expenses.
High living, low costs
All that being said, we have a great deal of fun living on
less than $30,000 per year.
Spending wisely, we get the most bang for our buck. For instance, living in a
resort location in the States, we have access to a swimming pool, tennis courts, and a workout
room without having to lay out cash for their maintenance. We eat high-quality
meats, fish, fruits, and vegetables because we shop at farmer's markets and
watch for the rotating grocery sales to purchase when prices are attractive.
When we visit foreign
countries, we live like the locals, eating fresh foods from
the open
markets, and we rent apartments, house sit or rent hotel rooms by the month.
In this way we have maid service, gardeners, Wifi, and no utility expenses.
Walking instead of driving whenever possible, we also choose low-cost
entertainment options such as tennis, hiking, biking, swimming, going to museums
and art shows, and enjoying
local festivals and celebrations.
Volunteering for projects
wherever we live, this provides us with new learning experiences and a sense of
fulfillment.
We share time with friends either cooking for them ourselves or going out to
lunch instead of opting for higher-priced dinners. And when it's time to hit the
road, we take full advantage of current airline deals and travel packages.
Reaping the
benefits of simplicity, we place more emphasis on
creating a life
of meaning rather than a life of "'stuff."
What about you?
So you think you can't make it on $30,000 yearly? How about $48,000 or more?
All this means is that your net worth will need to be high enough to maintain
these levels of spending.
No matter where you are in this continuum, you can profit from doing any of the
following:
Simplify your personal infrastructure. Know where your money is going, and
decide whether it's worth it to you. Do you want to keep up the pace of your
current spending? Make your funding priorities reflect your values.
Plan your retirement tax strategy now.
Know there is a balance in the exchange of
time and money. Do you want more money, or do you want more time? Your
choice here will affect your future. Be clear about what you want.
Remember, the best things in life are free.
Friendships and connection to society are based more on your attention and time,
rather than on your money. Watching the sun set with a loved one -- sharing life
experiences together -- creates memories that will far outlast anything you can
purchase.
About the Authors
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.
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