Today's post is a guest post coming to us from Rob over at Getting Canned. It's amazing how many opportunities are out there now that we can travel easily and use the internet. If you have any questions about Rob's story, I'm sure he'd be fine with you reaching out to him through his blog. Thanks for sharing your story Rob!
You’re grinding away at the office looking to the day you can exit and go live your life. You’ve got a savings number in your head. When you hit that number, it’s safe to go. It will be safe to go and live your life. This is Financial Independence on Hard Mode.
If you’ve read the popular blogs on Financial Independence, you’ve heard the rule of thumb. Save up 25 times your annual expenses and you’re set to go. For many middle-class folks living in America, annual expenses might hover around $40,000 per year. This would translate to a financial independence savings goal of around $1,000,000.
There’s an Easier Way
Even with living frugally, a decent salary, and good investment returns this can easily take a decade. And market fluctuations could set you back even more. What’s an alternative solution to kick off financial independence earlier? You leave the country.
Several things contribute to very high cost of living in the US. If you go abroad you might be able to drastically cut down on your cost of living.
- Medical Care. US medical cost and insurance premiums are obscenely high. Go to another country and medical cost are so low you might be tempted to skip health insurance.
- Transportation. Car insurance, car maintenance, gas, tolls, parking, depreciation. Car expenses REALLY start to add up. Many countries have sufficient public transportation such that you can ditch the car.
- Housing, food and utilities. Apartments in Chiang Mai can be rented for $250 to $350 a month. Cellular data & Phone for under $30. Meals for $2.50.
Lower Expenses = Lower Target Goal
It’s definitely feasible to get by on around $1,500 a month or so in many parts of Asia. This translates to $18,000 annual living expenses. This translates to a Financial Independence target of $450,000. A much easier target to hit than a million.
$1,500 A month X 12 Months = $18,000
$18,000 X 25 = a FI goal of $450,000
Now, I’m certain that a life overseas might be a fun adventure for some duration of life, but later on you might want to return to your own country. So what’s the solution? Keep earning.
Just because you’re financially independent doesn’t mean you need to become totally unproductive. If you’re living overseas you can blog. You can start up a side hustle. You can spend about 20 hours a week teaching English in Asia.
If you can live off your earnings or even partially live off your earnings, your in coast mode. Your investments are likely to continue to grow and as you have some side hustle successes you can still contribute to savings.
I’ve lived it
I can say these things because I’ve been there. When I lost my job during the financial crisis of 2008, I spent around two years unemployed. Then out of desperation, I ended up moving to Taiwan to teach English. It was one of the best things that’s ever happened to me.
The life of an American English teacher in Asia is not a bad one at all. You’ll often work about 20 to 25 hours a week in late afternoons and make enough to sustain yourself and even save a little. This frees up a lot of time to work on side hustles or travel and explore new worlds.
When you’re in new exotic places, your creativity can flourish. Business opportunities present themselves. Recently I created a post on my blog about going to Costco. Now this wouldn’t get much interest generally if I was in the US. But because I was in Taiwan, my post ”A Trip to Costco in Taiwan” was fairly well received.
So I’m going to take a guess that the average person reading this is someone working in an office and focused on getting out. Office work is filling but it’s hard to grind it out day after day, year and year. It’s like Peter Gibbons said in the movie Office Space. “Human beings were not meant to sit in little cubicles staring at computer screens all day, filling out useless forms and listening to eight different bosses drone on about mission statements.”
If you’re feeling stuck and want to get out, do it. Unstick yourself. Go and live. After all the true wealth of life isn’t money. It’s time. So don’t waste it.
Nathan has been a personal finance writer since early 2018. He and his wife reached a net worth of one hundred thousand at the age of 25 and are on their way to financial independence. His favorite way to make money is selling things on eBay and has grown his eBay business to earn five figures selling part-time. He loves sharing what he learns about finance and any eBay tips he comes across. If you’re interested in becoming an eBay seller, check out his reseller Facebook group.