Authors Billy and Akaisha Kaderli retired at the age of 38 and have since traveled and lived all around the world. The Kaderlis are published authors on the subjects of personal finance and world travel.
At the age of 62, we're beginning our 25th year of financial independence. That's quite a feat!
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From the beaches on Nevis, West Indies, to the shores of Phuket, Thailand, we have traveled extensively through the past two-and-a-half decades, and what a ride it's been! Young and strong in those early years, we were willing and able to tackle just about anything. Now we tend to be a bit more cautious, but we're not letting up. We still climb into the backs of pickup trucks and soak in volcanic hot pools. No one can take away the wonderful memories we've made, and we are filled with gratitude for all the miles and smiles.
What about you? How do you want to live the next five, ten, 20 years or more? Only you can decide what is best and how to get to your goal.
We were often told that retiring early couldn't be done and that we would fail. These self-supported 24 years have proven the naysayers wrong, and we believe that since we have done it, you can, too. In our books and on our website we share the tools we have used to get us here so that you, too, can create your own successful retirement, early or not.
No matter where you are on your retirement path, here are some time-tested tools we have used. Take advantage of what we know.
Track spending This is basic and oh-so-essential. When you track what you are spending, you know exactly where your money is going, and you're able to make decisions clearly and in real time about your cash outlay.
Throughout the day, take note of everything you spend, either on paper or with a smartphone app such as HomeBudget or Mint. Tracking your spending will be a big stress reliever, and your data entry takes only a couple of minutes a day.
How much do you want to spend per year? If your goal is to spend $30,000 annually, this gives you an $82 a day average to maintain. If you can afford to live on $60,000 a year, you have $164 a day to spend.
How you want to manage that cost per day is up to you.
However, once you begin to see what you are spending on a daily basis, you will have the power to direct your annual outlay, and the procedure becomes fun. You will have total control over your finances, which is a wonderful feeling.
We have been retired for a full 24 years, and our annual spending for these years has been well under $30,000 per year.
Four categories of spending In any household, there are four categories of major spending: housing, transportation, taxes, and food. If you make adjustments here -- and there are lots of ways to do so -- you are on your way to financial independence. Open yourself up to options such as house-sitting, moving to a less costly area to live, paring down the number of vehicles you own, and being aware of your entertainment outlay.
For example, we have chosen to live in an Active Adult Community in a low-cost area of the American Southwest. Because we don't own the land where our home sits, our yearly property taxes are about $200 a year. When we travel, we house-sit, which lowers our housing costs by about 40%. Alternatively, we will contract with a hotel to rent a room with a kitchenette and full hotel services for a discounted price. We also choose to travel to low-cost countries of the world such as Mexico, Central America, and parts of Asia with great weather and unique lifestyles.
We have also been car-free since 2009, and we have never regretted this decision. This saves on the expenses of car maintenance, fuel, parking, a car loan, and insurance. Wherever we go, we take local transport, hire a driver, or ride a bicycle, which is far more affordable than owning our own vehicle.
When we travel, we choose to eat local foods, rather than going to expensive touristy locations and paying double or more for meals. Because we have access to kitchen facilities, we will often prepare our own meals.
If you are amenable to the options available, you can easily see how the expenses in these categories can be adjusted favorably.
The stock market is your friend If you want to retire early, one of the best ways to get there is to start investing as soon as possible in order to maximize your retirement savings.
On the date of our retirement, Jan. 14, 1991, the S&P 500 was at 312.5. It has averaged better than 8% yearly plus dividends over these decades. We maintain a core holding of index funds, which sends us a steady stream of dividends in our taxable accounts and tracks the market. But in our IRAs, where we have no tax issues regarding trading, we trade more actively.
While the market is unpredictable in the short term, over long periods of time it has proven to be an excellent vehicle for building wealth.
Positive attitude and mental flexibility Some people think having a positive and flexible mental attitude is inconsequential. But without a sense of wonder, an open mind to new things, and a willingness to change, making the transition to a satisfying new life of retirement is more difficult. There are so many different ways to live, travel, and experience life! Why get in your own way? Embrace your retirement dreams and get in the game!
As we begin our 25th year of financial freedom, we encourage you to turn that dream into a clear vision. Strengthen your will to start your new life and put your financial plan into action. If you do these simple things, you, too, can live the life of your dreams.
About the authorsBilly and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance and world travel. With the wealth of information they share on their popular 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.
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