Category Archives: Early Retirement

Why $420,000 Dollars?

We’ve talked about what retirement means to us before, but we’ve never really addressed how we came up with $420,000 dollars as our target early retirement nest egg.

In this video we discuss why we chose $420k, why it’s probably not enough, and why that’s OK. Hopefully it answers some of your questions.

Links:
Retire Comfortably? https://goo.gl/ufZFR7
What Retirement Means To Us – https://goo.gl/VAeXfx
4% Rule – http://goo.gl/3LdxFy
Internet Retirement Police – http://goo.gl/eKdVmS

What About Health Care!?!

One of the biggest criticisms of early retirement is health care. How are we going to afford it? What about getting older? Now we’re forced to buy it!

Our plan for health care in early retirement is the ACA (Obamacare), medical tourism, and preventative care. What most people don’t know is that the United States is not a forerunner in quality of health care. By utilizing our ability to travel, we can get better care overseas for less money.

Why is Health Care So Expensive? https://goo.gl/oSafux
Go Curry Cracker – http://goo.gl/m5hyZx
Retire Early Lifestyle – http://goo.gl/R8n8lj

Pinch Pennies or Focus on Big Wins?

Everybody loves to take sides. In the personal finance world, you’re either for frugality or focusing on big wins. We think to build wealth, you need both. If it takes money to make money, then where does that money come from? And once you make money, how are you supposed to keep any of it if you can’t control your spending?

Further Reading:
http://goo.gl/hPSy82
http://goo.gl/i9qhdz
http://goo.gl/CuVNd4

Forget College, Learn a Trade

I got to thinking about what I would do differently if I could go back in time. Would I go to college or learn a trade? I went to 1 1/2 years of college before dropping out, and I think that was the right decision.

There seems to be a growing number of college graduates with no jobs and plenty of student loan debt. Maybe more young people should consider learning a skilled trade like electric, plumbing, masonry, drywall, HVAC, etc.

Just to be clear, I’m not saying college isn’t a good choice. I’m saying it shouldn’t be a default choice after high school.

Simple Dollar:
http://goo.gl/92p3Vs

There Are No Short Cuts to Wealth

 

Health and wealth are two things you have to work hard to get and keep. There are no shortcuts to wealth. And if you find one, studies have shown you won’t have it for long.

In this video we talk a little bit about the Millionaire Next Door, and the 7 traits that most wealthy people share:

1.They live well below their means.
2.They allocate their time, energy and money efficiently in wealth building activities.
3.They belief financial independence is more important that displaying high status.
4/5.They did not inherit their wealth and their adult children are economically self sufficient.
6. They are great at selecting and seizing opportunity.
7. They chose the right occupation.

Links:
Study 1: http://goo.gl/uOdF9E
Study 2: http://goo.gl/Lqnqzw
Mark Cuban: http://goo.gl/jJ8KYZ

Everyone Thinks About Money

People often assume we obsess over money. That’s actually pretty far from the truth. In fact, we propose you might think about money more than we do.

What’s more important is that you approach every financial decision from a place of strength and control, not weakness. In the video, we discuss a few reasons why our lifestyle lends itself to that mindset.

Retiring Before 59.5 – What About Penalties?

Ever wonder how you can access your retirement accounts without paying the 10% penalty? In this video we share our plan for avoiding IRA and 401k penalties by setting up a Roth Conversion Ladder.

Credit is due to the MadFientist who introduced us to the idea. Basically you rollover your old 401k into a traditional IRA, then convert that to a Roth IRA. The converted funds are considered “income” and therefore “contributions” so you may withdraw them at any time (after 5 years has passed) without tax or penalty.

More information can be found on his website:
http://www.madfientist.com/after-tax-contributions/
http://www.madfientist.com/retire-even-earlier/

Interestingly, President Obama’s 2016 budget proposal might close that loophole despite the IRS just putting out notice 2014-54 which seemed to confirm this is a viable and lawful strategy.

Link to the IRS Notice 2014-54:
http://www.irs.gov/pub/irs-drop/n-14-54.pdf

What Do You Mean Retire Comfortably?

When people ask “how much I need to retire comfortably”, most of the time they imagine traveling the world, staying in fancy hotels and golfing at the most luxurious resorts.

The question we’re asking is, are you willing to trade your freedom for that level of comfort?

Rather than save 1-5 million dollars for a “comfortable retirement” we are shooting for financial freedom. From there we can decide what truly makes us happy instead of trading the next 50 years for a a little luxury.

Who Manages Your Finances?

Mike is still feeling under the weather today, so it’s my first solo video!

I wanted to talk about, well, that I don’t really know what I’m talking about.

Mike has always been financially minded… me, not so much. I’ve always trusted Mike completely, and that led me to not always ask about what was going on with our money.

When we started making our YouTube channel about finance, I was a little nervous since I didn’t know what I would be talking about. So I started researching and reading and asking Mike the questions I might have been too embarrassed to ask before.

This brought up the question of whether it’s OK for one spouse to be in control of the finances?

For us, Mike enjoys all the personal finance stuff, so why not let him take care of it?

I think it’s OK for one spouse to be in control, but it’s important for the other person to still know what’s going on. (We talked about this in our Joint vs. Separate Bank Accounts video)

I came up with a few questions to ask to get started:

How much money do we save a month?
Are we in debt?
Do we have an emergency fund?
Where are our bank accounts?

In the video I answer those questions, and throw in a few more in depth questions. Asking these helped me to know exactly how much we save and why.

Fitting in Is the Hard Part

How could someone making $60k a year can say living on 50% of their income is impossible, yet there are many people who earn far less than that. We think it’s because fitting in is the hard part.

We discuss a few reasons why being frugal doesn’t mean you’re an outcast, as well as our weaknesses in fitting in.