Retirement Has Already Cost Us At Least $5 Million



When the dessert cart rolls around after dinner, difficult decisions must be made.

“If I eat the tiramisu… then I won’t have room for gelato*… And what is this? A complementary serving of limoncello!?”

In economics parlance we might call this gastrointestinal dilemma the opportunity cost; When we choose one option, we lose any potential gain or enjoyment from alternatives.

A couple recent articles highlighted the financial opportunity cost of not working, either short term for raising children or long term for (early) retirement. These articles inspired me to recalculate the opportunity cost of our own decisions.

The Center for American Progress evaluated taking a few years off to raise children, and concluded that you should work instead, because parenting has zero financial value (and on those extra difficult days, maybe even negative value πŸ˜‰ ) Sounds like progress to me.

The Finance Buff discussed how early retirement is the ultimate luxury purchase.

I’ll buy that πŸ˜‰ When we decided to retire in our 30s, we chose to forego the income we could earn in our 30s, 40s… 80s…

After nearly four years of early retirement, this cost already exceeds $5 million.

Continue reading

Posted in Finances | Tagged | 62 Comments

Book Review: The Simple Path to Wealth

I’ve read a lot of books in my day. A large part of childhood was spent with my nose firmly between the pages of one tome or another. I loved how the Hardy Boys and Sherlock Holmes discovered the truths hidden behind deception and clever disguise, and the worlds where magic and sorcery were more powerful than science.

Whenever my mind grabbed hold of a new interest, it was the library that enabled me to share the experience and knowledge of my elders and superiors. Through books I learned about the brave adventurers who explored our planet and those nearby, the inventors who pioneered new industries and created the futuristic world of today, and how there is nothing more powerful than an idea whose time has come.

So it is no surprise that when I first started to think about investing and early retirement, I returned to the library. I’ve read hundreds of books on topics as broad as personal finances, taxes, stocks, bonds, stock options, clever real estate investing, and more.

Why then is my list of recommended books so short?

Continue reading

Posted in Finances | Tagged , , | 32 Comments

Snail Mail and Paper Checks in the 21st Century

You've Got Mail (photo credit)

You’ve Got Mail (photo credit)

Nearly 45 years ago the first email was sent. Around the same time, banks began transferring money electronically.

So it makes perfect sense that in the year Two Thousand and Sixteen we still chop down trees, process them into paper, print words on them, load them on to trucks and airplanes, move them around the world, and then pay people to carry them to our door through rain, sleet, & snow… where we drop them into the trash.

I’ve done my best to avoid this whole mess by opting out of all paper mail, and exclusively using email and online tools. Still, the USPS only cares about their main revenue source (bulk mailers), the IRS and other government agencies like licking stamps, and credit cards are physical (for now.) And some companies (even pure online businesses) are in love with paper checks, even though they cost more than ACH transfers.

So for the last few months we’ve been processing all of our mail with Traveling Mailbox.

Continue reading

Posted in Travel | Tagged , | 63 Comments

Reflections of 2015, And Then They Were Three

Selfie Time at Peace Park, Taipei, Taiwan

Selfie Time at Peace Park, Taipei, Taiwan

2015 was our 3rd full year as itinerant idlers.

Although… for most of the year we were in Taipei, Taiwan, where we welcomed our first child into the world.

Being in one location for an extended period provided a lot of time to think and write about financial interests. At least until the baby was born.

I explored the pros and cons of Roth IRAs for early retirees, planned how we will build the world’s longest Roth IRA conversion ladder, calculated how much money we lost selling our house for $102k more than we paid for it, and evaluated how Obamacare killed the Roth IRA Conversion for US residents. Fascinating stuff!

It turns out some people actually read those posts, and the blog grew by leaps and bounds. I was even invited to speak at the 2015 Chautauqua in Ecuador, an incredible experience! As a bonus, I was able to meet several of my favorite financial bloggers.

When our little guy was ready to don his own tiny backpack, we did a trial run to Japan (Kyoto, Osaka, Nara.) It was a great success! Being outside and exploring new places made for a happier kid and happier parents.

So we hit the road again. We spent the last 2 months of the year in Chiang Mai, Thailand, where we swam, did yoga and Crossfit, and ate excessive amounts of Thai food, and reduced our average cost of living through the grace of geographic arbitrage.

By all measures, 2015 was a great year.

Continue reading

Posted in Finances, Travel | 70 Comments

I Couldn’t Care Less About My Credit Score

Rainbow of Credit (photo credit, badumtss)

Rainbow of Credit (photo credit, #badumtss)

Prior to 3 weeks ago, I hadn’t seen my credit score in more than 12 years. I couldn’t care less about it. In fact, I don’t even need one.

And yet this strange and mysterious number seems to loom over the lives of people like the specter of death.

Comments and emails about credit score on a post about using credit card rewards programs to fund travel included words such as “damaged”, “ruined”, and “destroyed.”

Are these incredible adjectives warranted? Can applying for a few credit cards result in real world pain and suffering? Should we spend more real $ on travel instead of using rewards points?

Or is a credit score just a meaningless number?

Continue reading

Posted in Finances | Tagged , , | 65 Comments