TL, DR; 33 year old accountant is paying off apartment and wants to live off passive income to meditate in the hills or farm in the tropics and live off shoots and leaves living off less than $10k per year. Is he crazy? Does he need more cushion to buffer other big ticket financial items? What other things need to be considered?
Hi all,
My gratitude to the collective braintrust on bargains and all things frugal here. Been a silent watcher on this forum for a while but thought I should throw a question out there for the ozb community to get some ideas for life direction.
I have recently become a fan of early retirement extreme (http://earlyretirementextreme.com/) and "your money or your life" - Vicki Robins (https://en.wikipedia.org/wiki/Vicki_Robin) and have aimed to achieve financial independence as early as possible. Much of the consumeristic lifestyle doesn't appeal to me anymore and living the rat race is not my ideal way to spend my life energy.
I am currently saving 70% of my net income and due to pay off my apartment next year (at age 33). I am currently self employed and get in approx $150k per year. Burning candles at both ends but obviously with the goal that this isn't forever once financial independence is achieved. 80% savings is doable, just need to be mindful of all those impulse buys (torches and enelopes?).
Financial independence isn't hard once spending is controlled . I am a dual citizen and can live in another country(tropical paradise) rent free and arbitrage the cost of living, even if I get returns from renting out apartment in oz as my sole source of income, it is enough to get by as cost of living here is minimal. I can also work on a contractual basis as needs to be as professional bean counter. My joy in life and hobbies/interests don't cost much, meditation, permaculture gardening, and charity work. I am a vegan and love the plant based lifestyle and appreciate threading this world lightly (low maintenance).
I'm a single with no family/kids and would like to travel and go on a spiritual journey and travel. I can also abritrage whilst travelling on a shoestring, ideally would love to travel asia - myanmar (on a perpetual meditation visa)and thailand/malaysia to pratice meditation at monasteries with minimal input from passive investments ($2500 usd per annum for tickets/visa runs and travel, $3500 usd for donations for monasteries annually- but this gets covered by passive income anyways - might end up making saving money whilst travelling!).
Afterwards (enlightened? Bucketlist checklist ticked), maybe settle down and teach meditation and counsel on diet and lifestyle or become a permaculture gardener somewhere in the mountains.
There will be 'life events' - health disasters, old age. So this needs to be factored in.
The only question is how much longer to do this so that there is enough cushion to factor the cost of bigger ticket items (1)housing (apartment falling apart -strata issues?), (2)sickness (got medicare card, but no health insurance - my diet and low fat whole foods plant based lifestyle is probably my best insurance), (3) eventual demise (aged care deposit is around $500,000 Aud, but when it comes to this point can sell off apartment?).
I am thinking another $400k to be put in a share index(thanks Warren Buffett) - diversified across oz and the US and maybe another $100k cash just in case, which means another 6 years of work so I'm thinking retiring before 40 on a net worth of $1m aud? Or should I get another property (don't want to get on the debt threadmill again though, and property yields (capital gain and rental returns) are not the best)). Current apartment can be problematic in the future with the Strata at $1k, and increasing per quarter. So I'm considering selling apartment and getting rid of strata fees and getting dual income property in the blue mountains. Consider life expectancy of 85. How much is enough? What else do I need to plan? What are the gaps ? What do you think?
I think … you should make a TL:DR