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Feb 01
A while ago we established a concept, that it doesn’t take you necessarily heaps of money to retire early in your lifetime. If you don’t have high demands, are happy to live a simple but fulfilled life in a low-cost-of-living country, plan ahead and have some savings which will provide you with passive income in the form of interest, rent, dividends it might be even possible that you can retire already in your 30s.
You can read many tips and tricks on this site on how to plan ahead and retire early to enjoy what life really has to offer. So if you seriously plan to retire early, is there a chance that you can totally f*ck it up? But of course!
Just follow these surefire strategies to make sure, that you will have to work until the end of your days, or at least until you are too old or weak to fulfill your dreams:
- Consume, consume, consume – that’s the most common way people make sure, that they will be forever stuck in their misery. After all – most modern capitalist societies in our world are modeled based on the spending trap. You are held to buy your whole life things you don’t really need. But Advertising, media like TV, magazines and Hollywood, envy and peer pressure will keep you busy ‘keeping up with the Joneses’. Wait – make that ‘Keeping up with the Kardashians’ – they even make white-trash TV shows about it! People love it and have new idols to follow. Need a new Home-Gym to shed off those pounds, a multi-8.1-BlueRay-HD-LCD-Plasma-HiFi Theater, your 20th pair of branded jeans, 150th edition of Manolo Blanik shoes, the latest iPhone every 6 months, 2-for-1 electronic kitchen gadgets, happy-hour 5 Dollar Grande-Latte-Moccacino-Deluxe Starstruck Coffees? Welcome to the club! The ‘Pursuit of Happiness’ got mixed up long ago with Consumerism in the western world. The fatter the better, the more luxurious and expensive the happier. Doesn’t Britney sing “Gimme more” all the time; she must know something for sure? Oh well!
- Don’t worry about tomorrow – you can’t change it anyway. You have troubles living for today already. Your money is running through your fingers. You need 2 or 3 jobs keeping up with your needs and expenditures. So no need to plan ahead. It will cause you even more headache. You will have less time working. Yeah, there are rumors that compound interest can make you a Millionaire by the time you are 40 years old by simply saving a few hundred dollars a month. Investing in stocks, funds or rented-out real estate will make you lose your money in the long run. What goes up has to come down, right? Investing in different currencies? Doesn’t the mighty Dollar rule the world? But then – mathematics was always your weak point. And those number crunchers surely missed a thing or two. Better wait to win the lottery or discover that rich uncle of yours in Kazahkstan, who died recently and inherited you a nice fortune. Planning ahead is like visiting a fortune teller. God will ensure my future better instead.
- Buy a new Car every 2-3 years – what’s wrong with your old one? Ahhh – the neighbor has the latest Hondabishi-Dodge-SUV with 15 cylinders, 600 HP-engine and 50-inch-4×4-wheels? Understandable. That can’t stand. He shall not pass! Block his entrance with an even more overpowered vehicle, make it a mini-bus or luxury trailer, even though you live in a 2-person household and your grocery store is just 3 blocks away. It’s never to late to buy a better set of wheels. Maybe one day we have to flee our home and we better are mobile and well-motorized. Public transport is for wankers and bums and you will get robbed there anyway. If not robbed it will lower your self-confidence and ego and will set you on the same level like that security guard or Mexican Maid of yours. A big car will show who has the bigger balls and the more often you will visit that guy at the gas station – the more he will stand there in awe and respect you for what huge rolling fortress you can show off as yours.
Amass Debt with your Credit Card(s) – and pay back at most the minimum rate. It’s the best way to lose sight on what you spent already and how much you owe to the credit card company. To make matters more interesting – increase your credit limit whenever they offer you the chance to do so. That way you are even more flexible in spending more money. The best thing is that at the end of your salary there is still a lot of month left to not think about how you ever will be able to pay back that debt. What you don’t have nobody can take away from you. Is debt bad? Not necessarily. There is good and bad debt. Good debt will provide a return on your investment sooner than later. Although Credit Card debt is definitely an investment – it is unfortunately not one for your but for your bank or Credit Card Co. It’s you who will pay with an arm and a leg. They just don’t tell you, but you will find out in the end.
- Buy your own house on a 20-30 year mortgage – after all, you want small pay-back rates and long-term security. So make it a big house, 10.000 sqft at least. You are only living with your partner in it, but one can never know how big your family will be one day. You want to live forever in your own place. And with an own house you are forever secured. Of course you will have to invest again over time for maintenance, extensions, extra security, paint jobs and the electricity bills will eat you alive. But you could always go back and live in your house when things go wrong. Don’t forget to equip it with a bomb shelter, in case Iran is invading your home turf or the next hurricane will strike. The attached garage should have enough space for 2-3 more cars and to store all that stuff you bought, but doesn’t fit in your house anymore.
- Get married without a prenup – it’s real love this time, isn’t it? And it will last forever. For sure. Check out international divorce rates here and think for yourself, if there is a realistic chance that it couldn’t affect YOU. In most modern countries it doesn’t matter if you are a man or a woman. It will most likely reduce your wealth, if you were the high earner in your household. Go Directly back to Start. No need to pass jail. So much about future plans. But then, your partner will surely be offended when you propose such a step and all in all it’s not politically correct. So better don’t touch that subject or you may be divorced before you even get married.
- Accept your fate as a cubicle drone – I know you do that already. Your cubicle is your only small place where you can feel protected, equipped with a reason and purpose in life. You have to do at least something. How can people live without steady work anyway? Aren’t they bored all day? For sure they are. Just sometimes the Monday Morning Blues makes you wonder, if your cubicle is really the end of the rope. But then – what can you do anyway? Isn’t life supposed to consist of hard work and boring overtime? Someone has to pay all those taxes and care for the wellbeing of the community, right? There you go. Life is so easy when you accept the rules of your peers which are made to apply to all of us. Without exemption. Who are you anyway to cut through the ties and concrete manifestations of human society. You are not Sparta! Heretics should be persecuted and burned alive. Brave thinking. Keep up the good work!
- Accept the world out there as dangerous – that’s what CNN, Fox News and BBC are telling us everyday, right? War in old Eastern Europe. Arabs in Dubai who are striving for oil-based world domination. And the yellow plague in Asia ready to outsource all our jobs so you will soon be unemployed? How come Dubai, Singapore or Hong Kong pay higher salaries than the US and have the lowest unemployment rates worldwide? They have lower taxes as well. How unfair. There is even an increasing number of Europeans, Australians and Americans who work a few years there and earn more money during that time than in a whole decade back in their home country. That’s treason! Let’s make a law that nobody is allowed to work in a country with higher salaries than ours! Don’t let them go there – it will be our own downfall in the end. Globalization should only work one way, somehow we must be able to ensure that for all of us.
See Change as a threat – the world out there is for sure bad and dangerous. How good that you arranged everything so neatly that it will last for the next 100 years. You love your current job, your boss is likable and the economy is powering ahead. For sure you could earn more money in a shorter time someplace else, but then it would mean moving to a different city, region, maybe even country. Your company is planning to downsize? Those bastards! Indians outsource your job in manufacturing? Invade! Maybe you didn’t realize that they ‘Moved your Cheese’ already long ago, that you are running in the hamster wheel just to catch up with inflation, globalization and your neighbors. It will never be enough. And how about that boss of yours? Did he tell you about his golden parachute under his desk? Do you have one as well? Don’t worry. There will be others who lose more than you in rainy days.
So much about some strategies that almost always will work for you, if you are planning for lifelong work. Which ones would you add? Help us all by making use of the comment form below.
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February 2nd, 2008 at 1:51 pm
Hi all,
Thankfully I’ve been avoiding traps like this for a while, and if all goes well in the next couple of months I’ll be quitting the rat race at 38 and doing something far more interesting with my life. :D I’ll be moving to Bali (the most relaxing place on earth) and pursuing an internet based “career”, including of course the obligatory “How I did it / Nomad / Making Money on the Web / Tech Tools / Life on the Beach” blog. If mine is half as well written and interesting as this one, I’ll be happy. Nice job Chris!
Jeremy.
February 2nd, 2008 at 2:08 pm
Haha, nice job pulling my leg on this one, Jeremy! I think you have nothing to worry about, your blog has a great design already, just add the content and you are set!
February 2nd, 2008 at 11:49 pm
“Get married without a prenup ”
Bringing up the word “prenup” with your fiance is definitely a sure-fire way to remain single. Not only is it insanely offensive, it’s basically guaranteeing a future divorce. If you think you might get divorced, then you’re marrying the wrong person!
February 3rd, 2008 at 8:34 am
Great article and advice.
February 5th, 2008 at 3:26 pm
Great advice. If things go according to plan, my husband and I will be retiring in 4-5 years! =D> We will be moving to the Philippines of course. It takes a lot of determination to avoid temptations like buying a new laptop, going to the restaurant every week, and buying that “I must have it” Diesel jeans. The thing is, I don’t think we should completely avoid all these toys, but “dosage” is the key. We go to the restaurant for a nice dinner every month vs every week, and the branded jeans only when it is on sale. With this “dosage compensation” approach we are on track to retiring in 4 years without feeling too “poor”.:D
February 6th, 2008 at 9:40 pm
Great Advice. However, I would like some clarification on your recommendation to not buy a house. Could you explain why it is a bad idea to buy a house with a 20 – 30 year mortgage? I was lucky during the previous housing boom to build a lot of equity in home which I sold.
Thanks
February 8th, 2008 at 6:06 am
Thanks for all your additions! Sorry for the late comment approval, had some Login troubles with my WordPress installation lately.
Llama Money, I don’t want to say, don’t mention or don’t do it. But the fact remains that Divorce will certainly destroy a lot of wealth for one party and probably plenty of your future plans. How to get around this dilemma?
Cathy, you definitely have a point there. Dosage is the key! All the best for your plans and happy retiring in the Philippines! What would you recommend as a good and safe area to move to?
Steve, sure I can explain that a bit more – I even wrote a whole post about it. If you are interested, check it out here. In general I’m not completely against owning your house, everyone has to consider his/her situation. Though binding yourself to a 20-30 year-long commitment makes it usually more difficult to retire early. If your plan is anyway to sell the house or rent it out to someone else, things might look different.
February 8th, 2008 at 9:49 am
Believe that you have to work until 55 or 65 or whatever your government tells you you have to! Believe that if you retire your brain will go to much, like I use so much of brain at work as it is :))
I agree that the size and expense that some people put into their 1st and subsequent homes is stupid – remember all the new furniture and landscaping required too! However the house we owned outright as a couple – no pre-nup just arrogance knowing we are going to beat the odds, but then we ain’t married anyway- we’ve used to buy our retirement next egg which is doing very nicely thank you!
February 9th, 2008 at 9:45 pm
I don’t know how you fellas can do it.
1. Retire early.
2. Retire in a foreign country.
3. Survive on investment .. depending on interest, dividents,,bla..bla..bla.
No way for me. I always wanted to do the same, but it’s never sufficient even to survive for a year. And now. I am 47 ! Just let it be…
February 10th, 2008 at 12:34 pm
Lissie, thanks for your uplifting words. Going against the odds is what sometimes can make all the difference. So I’m happy to hear that you guys are on the right track and enjoying every minute of it! :D
kbguy – basically it is possible for most people, although I must admit, that this site focuses more on people from America, Europe, Australia – for whom it would be naturally easier, due to higher incomes and (usually) stronger currencies. Of course it depends on other things as well, e.g.
– when you start planning and changing your life (the earlier the better)
– if you have debt or how fast you can get rid of your (bad) debt
– how high your demands are to purchase plenty of amenities of our ‘modern’ societies
– what country you are from and where you plan to retire (cost of living now and then, the bigger the differences the easier)
– how many people you have to support or other long-term commitments
– what passive sources of income you can generate to support an early retirement
– if you plan full retirement and living from your savings only, or if you are simply planning to leave the ‘Rat Race’ and create something you LIKE, which could generate an income as well for you, but would make you feel that you are independent and retired
If that sounds too general, it’s probably because everyone has to assess his/her situation and find a path towards ones life goals. That is a pretty individual thing and might include drastic life changes.
It doesn’t work out for everyone, for sure – otherwise the whole world would consist of ‘Happy Retirees’. But everyone can work towards it, with a higher percentage of achieving it in the end.
I tried to give some suggestions on this site as well, maybe click on the ‘retire‘ category and scroll through the pages, if you are interested.
If you have any specific questions regarding your situation, please feel free to either submit another comment here or drop me an e-mail for a more private chat. I will try what I can to help finding a way, that might work for you.
February 11th, 2008 at 4:54 pm
Just to bring a very important point that one of the main reasons why people fail to retire early is because of the sudden large amount of their parent’s medical fees payment which usually drains out all your savings. This is especially true if your parents are still dependent on you (which is most of the case).
So if you really want to plan for it make sure you take account for the worst case scenario too.
Happy retirement!
February 13th, 2008 at 4:02 pm
Excellent words Chris! My family and I are leaving this consumer driven country (UK) on Saturday to go and live on a tropical island here. Our dream is finally becoming a reality.
We are definitely not materialistic people, but getting ready to leave we are amazed at exactly how much we have consumed over the last five years. It is such a great feeling to be shedding all our stuff. One things for sure, you don’t need it.
It amazes me that people want to ship their stuff our in containers when they move abroad. I find it hard to believe that people can become so attached to ‘things’.
All I need is my laptop, dive gear and a few threds!
February 16th, 2008 at 11:23 pm
[…] Interested in jumping off the hamster wheel? Consider reading Nomad4Ever’s 9 Surefire Strategies NOT to Retire Early. […]
February 19th, 2008 at 10:01 am
I like the last one: “See Change as a threat”. No kidding; I see this a lot these days with the new technologies coming out (I work in IT) that don’t pertain to the 50 and 60 year old people in the industry. They are mostly just riding the wave and unwilling to move to the next stage, so they’re not adapting and losing jobs faster than you’d think…
February 29th, 2008 at 7:08 am
Hey Chris:
First, execelent advice.
I semi-retired when I was in my early thirties and $30,000 in the red from student loans. That’s right, my net word was minus $30,000 when I semi-retired and I didn’t have to move to a foreign country. Basically, I have lived in line with all the advice that you give.
Check out the many ways to prepare for and enjoy retirement on my 1001 Ways to Enjoy Your Retirement webpage on Squidoo where I am posting the complete book of the same name (published in French, Spanish, and Korean but not in English).
Ernie Zelinski
Author of The Joy of Not Working and How to Retire Happy, Wild, and Free
March 1st, 2008 at 9:16 pm
ChampDog, you are right with medical costs for your parents. I didn’t see it this way, as in Europe those are usually covered by social security and old retirees and the elderly are basically well off. In Asia there is no such thing in most countries, with the exception of Singapore maybe.
Leigh Hunt – retiring in Honduras? Wow – congratulations! That sounds like paradise to me! I have very fond memories of Roatan, this is where I made my PADI Open Water, way back in 1996 or so. The small propeller plane from San Pedro Sula to Roatan had no seats on board, basically everyone had to sit on the ground and grab on something. Completely crazy and adventurous! I still believe that the marine life around Roatan, Utila and Guanaja beats the Great Barrier reef hands down. One year after there was a hurricane flattening Placido Domingo’s house on the island, but that was probably rebuild quickly. Wahhhh, when I think about it, swinging in my hang mat at the beach there, reading Forest Gump (which I got from a book exchange in the local library there), watching the coconuts fall off the trees….you are lucky, do you know? I can’t recall the name of the place I stayed there, it was somewhere on the north-western tip of the island, with a huge pier and a bar/disco building on it, close to a up-market resort right of it. Hmmmm….have to check other boxes in my memory…. :-/
hank – that’s really common in the IT industries, even one should suspect differently. I always thought that IT people should be able to embrace change, due to the nature of their job, but somehow that’s not the case. So IT or not – if you can get the drift of seeing change as a challenge and something that drives things forwards – you are basically set for a more positive life and closer to your dreams than you might think…
Ernie – many thanks for your story and I checked back on your site. That’s truly interesting material! I had to remove the other links, as your comment was caught by my spam filter. The books Ernie mentioned can be found via his main site (see link above).
May 22nd, 2008 at 12:00 pm
[…] 9 Surefire Strategies NOT to Retire Early posted at nomad4ever — Chris gives us an interesting perspective on personal finance. […]
June 28th, 2008 at 10:39 am
That’s a great list! I particularly like “Accept the world out there as dangerous…” I live in Taiwan, which has a pretty decent PPP ranking in a bunch of smaller countries, and isn’t far behind Germany, the UK and many larger competitors.
Fact is: the western countries are facing excruciating tax burdens for those who don’t know the tax system, ie. most people. Did you know Japan doesn’t have personal income tax?… the UK didn’t until the govt. started spending…
Kenneth
June 30th, 2008 at 7:26 am
Hi Chris,
once again, you really give us all something to think about. I have a really big problem with Christmas for consumerist reasons: why celebrate something that hardly anyone remembers the meaning of? It’s as if Christmas has joined the consumers’ religion of shop-till-you-drop, and banks love extending pre-Xmas credit so no one can afford to eat for a couple of months afterwards. Then they say that primary schools can’t have nativity plays anymore unless it upsets kids from other religions. I don’t know. The world has gone to the dogs. You, my friend, are the wise man for getting away from all this idiocy.
Meanwhile, my company (architecture industry) just started redundancies on Friday. The credit crunch has finally reached us. All the more reason to consider future escape plans!
Warm wishes, Epic.
June 30th, 2008 at 7:29 am
WOOPS! I meant “schools can’t have nativity plays anymore IN CASE it upsets kids…”
Gosh, how one little mistake like that can change the entire meaning… I really am a doofus.
July 2nd, 2008 at 9:01 am
Wow, this is pretty crazy to see there are other young people my age (I am 30) who think the same way. Really, I know very few people who share these ideals. I pretty much live by most of the above listed criterea. Within a year or two max, I will officially be “financially free,” however, I am not sure what I will do. I HATE corporate cube life. I may just get a part time job for benefits etc. Then I will still have a ton of freetime to spend with my family. Even in early retirement, I think it is important to alot a certain amount to save. By the way, I come from very humble beginnings and have got to where I am from nothing. Not a dime from my parents who passed away (they did not have money). The fact that most of my college was paid for by grants attests to my prior situation lol. Until next time…
Brad
October 1st, 2008 at 12:05 am
great article! Tongue in cheek – I like it.
It is so easy to get sucked into the whole 9 – 5 routine along with the spend spend spend mentality. If you do anything outside this ‘norm’ then you are in for some serious ridicule from your co-workers, so called friends and well meaning family members – of course they know better than you! They only have $80k in debt and they seem to be able to change their car every year. So yeah I think I will listen to them and be a good little worker bee.
Just remember – if you’re not working on your own goals you are working on someone else’s.
July 19th, 2010 at 8:28 am
Chris, is there an article on the mental aspect of transitioning to retirement? I’m mentally toast after 14 years of work. Actually it’s more than that, I started working part time when I was 13 years old and never really stopped except for during the semester in college. In any case, I find that I had a lot more of my ego invested in the fact that I’m a hard working guy then I know. You obviously wasn’t a slacker in your job, but how did you make the shift from full on to full off mode?
July 19th, 2010 at 11:17 am
PatrickW, I didn’t write an article about the mental aspects of retirement yet. So far I didn’t see that there was much to say. But maybe have to give it some thoughts and put them down here.
From my perspective, things will only improve for the better. I can feel you – after 14 years in the Rat Race I was burned out, concentrated too much on office politics, micro-managing my work and life, negative thoughts and OPP (Other people’s problems – TM) than my own wellbeing.
This will change once you drop juggling those balls. Today there is nothing much that can shatter me anymore. I take things easily, can laugh about mishaps, myself, don’t care about things like reputation, keeping up with the Joneses and other nitty-picky details. If you can start to enjoy every day then things will really look up and with a relaxed mind comes a relaxed body also. Just keep something to keep those brain juices fresh and flowing, but I’m sure there can be something found. Myself I enjoy hanging out with old and new friends much more, exploring my surrounding via motorbike or simply sitting at the beach and watching our beautiful world. Surely you can read all those books you always wanted to read, start that computer game now without any guilt, indulge in meeting new people or expanding your horizon in different ways. :D
May 10th, 2013 at 10:52 am
Great post!
I would add a few items to the list… Instead of not buying a car every 3 years, how about not buying a car at all? I live in Alaska where the public transport system is not so great, but I get by anyway because I’m motivated and I’m in the best shape of my life from bicycling to work.
Don’t do drugs excessively or habitually (includes alcohol and tobacco of course). The government wants you to mess up your life with drugs. If you use the legal ones they get paid directly in small quantities over time, if you use the illegal ones they get paid eventually in a huge lump sum when you get busted. And it goes without saying that jail time will throw your dreams off, especially if you get convicted of a felony…
Don’t have kids before you’re ready. That is, unless you’re interested in working excessively so you don’t get to spend enough time with them and/or if you want to go on welfare. Wrap that sh*t up fellas!! Investing in condoms must be considered a form of ‘good debt’ :-)
Here in the good old USA, an ambitious college graduate who doesn’t have kids, sold his/her car years ago and gave up hard drugs and booze long before that can still have to work 3 mind numbing jobs just to support themselves in a studio apartment with very basic furnishings, thrift store clothes and a cheap prepaid phone. That situation is entirely unacceptable and the time to correct the problem is now.