A regular feature of theMotley Fool Rule Your Retirementnewsletter service is our success stories -- profiles of people who have become financially independent. One of the most remarkable stories is about Billy and Akaisha Kaderli, who, at age 38, left their fast-track lives, moved to the Caribbean, and started traveling the world. We caught up with Billy Kaderli as he was just returning to the U.S. from Thailand.
Once someone learns that we have recently returned to the U.S. after nine months running around Thailand and Laos, they ask, "How could you afford such an adventure? It must have cost a fortune to stay there that long, living in guesthouses and hotels, and eating out!" When I tell them that the trip didn't cost us anything -- in fact, we made money -- they're floored.
When we left for Thailand in August 2005, the Standard & Poor's 500 index closed at 1,219. Today, it closed at 1,274, for a total gain of 4.5% -- even after the 4%-plus drop over the past month. Sure, we had expenses, but our net worth still increased. Whenever I'm considering one of these trips, I ask myself, "Can I afford it?" My answer shocks some: "I can't afford not to go."
The cost of not retiring
I'm no spring chicken, even at 53. I'm experienced enough in life to know that I will be more disappointed if I don't try new things than if I make mistakes at the ones I attempt. I'm only getting one shot at this life, and I find that my travel list is getting longer, not shorter. The recent death of great investment sage Louis Rukeyser at age 73 -- still quite young in my estimation -- brought this point home even more strongly. He certainly had enough money.
"That all sounds good," you might be saying. "But I still have to pay the bills." OK, so let's look at the numbers. For example, say you have an invested net worth of $500,000 in an S&P 500 index fund. The last 10 months would have yielded you a return of $22,500, or approximately $2,250 per month. I'm sure there are some who could spend that much in Thailand monthly, but not us. We live very comfortably there on $1,500, including a swimming pool, maid service, restaurants, health care, shopping, and beaches in Phuket. But let's say you're a big spender and blow $2,000 per month, or $20,000 in 10 months. But as in the above example, your investments made $22,500, which more than covers your expenses. You'd also have to figure in taxes -- after all, no matter where you live, Uncle Sam wants his cut. But with the standard deduction and such low reportable income, the bite isn't very bad.
The bottom line is, you've now been to places most people will only see in books or magazines, tasted foods unlike anything in the States, and have new experiences that will last your lifetime -- and your net worth hasn't dropped. So, how much did this trip really cost you?
Considering that you're probably going to spend $2,000 per month or more in the States anyway, you could look at this excursion as actually saving you money. This is especially true if you approach it as a lifestyle instead of a vacation. I know there is the expense of airfare, but that is amortized over the entire trip -- one reason we do not visit faraway places for short periods of time.
I know the market doesn't always rise, and some have suggested that we were just lucky to benefit from the bull market of the 1990s. If that's the case, then we must have been unlucky through the stressful 2000-2002 bear market -- which we survived, as we wrote about in an earlier article. Yet history shows that the market increases about 70% of the time. Those are odds we're willing to take -- we've happily done so for the past 16 years.
Packing up your finances for travel
"This sounds great," you're now saying, "but where do I start?"
First, you need to get your various financial and living houses in order. Can you access your money at ATMs worldwide? Your local bank card won't work in Thailand, whereas major no-load fund firms have accounts that can accommodate this requirement. Make that change.
Secondly, you must get your U.S. residence in order. Can you let it be unattended for periods at a time? How about asking a relative to house-sit for you, or having a neighbor check on it periodically, watering your plants or cutting the grass? What services can you put on hold?
Your car needs attention, too, but that's easy. Just disconnect the battery. I know others disagree, but this works for us. Or you could arrange for someone to start it up and drive it short distances, just to keep the fluids running.
If you have family you want to be in touch with during this long period, it's much easier now due to Internet telephone services such as eBay's (Nasdaq: EBAY ) Skype or Vonage (NYSE: VG ) , which allow you to call via a computer. You can even use a webcam to see the people you're speaking with. This is a very affordable option compared to traditional phone service, and most of the Internet cafes we used in Thailand offer it.
Affordable health care
What if you become ill? Chip a tooth, break your eyeglasses, or need refills for prescriptions? Thailand, with its focus on "medical tourism," provides plenty of health-care options. Although you may find yourself wanting to see smaller towns and out-of-the way places, chances are you will spend a good bit of time in Bangkok, Chiang Mai, or Phuket. All of these cities have easy-to-reach, high-quality hospitals, dentists, eye professionals, pharmacies, and clinics.
English is the international language, so you will be able to fill your medical requirements without fear. Not only that, but the costs will be considerably less -- another place where you could be saving money.
Retirement through a different lens
Everyone looks at retirement differently. Some people have said to us, "We're going to work a few more years. You never know what the future will bring." It's hard to dispute that statement! However, others have said to us just as firmly, "We're going to retire now. You never know what the future will bring."
We, of course, subscribe to the latter school of thought.
Travel has broadened our minds, giving us a perspective of the world and confidence that pervades daily living. It's a passport dividend.
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In 1991, Billy and Akaisha Kaderli retired from the brokerage and restaurant businesses to a life of international travel. Visit their website at RetireEarlyLifestyle.com, and check out their new CD book, The Adventurer's Guide to Early Retirement.