If you are new to BareBudgetGuy.com, you probably don’t yet know that I am in love with Latin America. I lived in Mexico for a few years and haven’t been the same since.
A few years ago, I started reading a lot of expat blogs and thinking these people were so lucky. I was in dream mode. As time went on though, the conversations between my wife and I transitioned from “what if” to “when.”
Fast forward to the present, and I am no longer in dream mode. We are actually saving money for the very purpose of going to live in Central America for at least a year.
Did my boss discover my secret identity?
Not many people at work know about my secret barebudgetguy identity. Just the other day, however, my boss asked me out of the blue if I ever planned on taking my family to live in South America. He knows me well enough to know that I have a lot of interest in the area, but the question just came out of nowhere.
I stopped what I was doing, and I turned to look at him. I squinted my eyes and tilted my head a little as I studied his face to see if I could discover the motivation behind the question.
Had he discovered and been secretly reading my blog? Or was his random question purely coincidental?
“Yeessss…” I slowly answered, still searching for any sign of him having found me out.
“A few years down the road, maybe,” I quickly added.
I still believe his question was coincidental, but you never know…and uh, my boss is awesome.
A sign that it’s time to mini-retire?
Last week we had a rain storm and our power went out for about 18 hours. It went out again for a few hours a couple of days later. It went out twice the next day.
It’s been pretty unreal. I had to check and make sure we were still living in the states. We’re pretty sure it’s fate getting us ready for the occasional central American power outages.
Early retirement is generally not feasible
I realize this is a broad statement. That’s why I included the word “generally,” because people generally aren’t willing to practice extreme cost cutting techniques. Generally, U.S. households bring in an average of $70,000. And that’s skewed upward by the rich. The median is closer to $50,000. Generally, people have kids. Generally, life happens, and we just can’t retire when we’re 40.
Early retirement is a very popular topic these days, and rightly so. I admit that it is a very exciting concept to think about. I enjoy reading related blogs like ThinkSaveRetire, Slowly Sipping Coffee, & Frugalwoods, which are written by awesome people who all have plans to retire in their 30s or 40s.
For my family, however, and for most of you (let’s be honest), we are not retiring any time soon. Unless I were to have some drastic life changes such as transform overnight into a corporate golden boy and rising star or get into gear with a great business idea, we will just keep moving slowly and steadily forward.
Traditional retirement is a cruel irony
Given the fact that I’m not going to put all my energy into pursuing early retirement, the idea of mini-retirements is very appealing to me. I could work my butt off to maybe retire when I’m 50, having missed out on quality time with my children, or I could just take time off now to do it.
I had been telling my wife for years why I think the normal retirement model is so ironic. Retiring when we are older and potentially less active and able to take advantage things we always wanted to do is unfortunate. This is why when I finally got my hands on books like the the Millionaire Fastlane and the 4-Hour Workweek I would constantly yell out to Amanda as I read, “I’ve been saying this for years! These guys are geniuses!”
To borrow a phrase from the Millionaire Fast Lane, the traditional life model goes like this:
Go to school, get good grades, graduate, get a good job, save 10%, invest in the stock market, max your 401( k), slash your credit cards, and clip coupons . . . then, someday, when you are, oh, 65 years old, you will be rich!
This is an effective model, and I’ve essentially been following it my whole life (and you likely have as well to a certain extent). It’s just become so common that no one questions it. We just happily (or maybe unhappily) follow along believing it’s the only way.
I went to college, got decent grades, got married, saved money, had kids, went back to school, had another kid, graduated, saved more money, and so it goes…
The point is that it’s not the only model. Many people have found success in doing it differently. But being different carries additional risk, and some people are very risk averse.
Our mini-retirement from the 9 to 5
The realization that I wasn’t alone in my thinking really gave me encouragement to explore the idea of taking a mini-retirement from the traditional 9 to 5. Notice that I say “retirement from the traditional 9 to 5.”
I’m not talking about turning my brain off and lying on a hammock on the beach for a solid year. That is a whole separate topic.
That time has to be replaced with active engagement in other activities, whether that entails doing service, building my websites, focusing on another business, taking meaningful trips with our kids, or some other worthy endeavor.
The benefits of a mini-retirement
Between forgone savings and mini-retirement expenses, the opportunity cost of taking a year off could be well over $100K, especially when you take into consideration the time value of money. Thinking about that is painful. But thinking about the benefits quickly eases that pain.
Just a few the few benefits I can think of:
- My kids are in their prime memory-making ages. A unique family experience like this is something that they will ALWAYS remember, and hopefully they will look back on it fondly.
- They will all learn Spanish, and I’d be able to brush up.
- We will make amazing new friends, locals and fellow expats alike.
- Amazing and cheap food!
- Setting my own schedule for a change.
- Time to explore new business opportunities.
- Teach our kids to serve and to be more open minded.
It’s definitely not without its drawbacks, the biggest of which for us is uncertainty. There is something comforting about knowing (or thinking you know) what you are going to do for the rest of your life. Go to work, save, take 2-3 weeks of vacation each year. In this case, though, we don’t know what will happen in the future.
What’s holding you back?
Money. If we really wanted to, we could go right now. We could make a decent gain on our house if we sold, and we have plenty in cash savings. But I’d prefer not to tap our emergency or spend funds. And I’d like to hang on to any gain from the sale of a house for any potential future home down payments.
Career. I’d like to be a little further up the ladder before leaving the states. I’d have more peace of mind about coming back and getting a new job, though it’s not as important as the money aspect. Even if I hang around for promotions, there is no guarantee.
Saving for mini-retirement
Between contributing 15% for retirement, paying 10% tithing, and saving another 6% for the kids’ college education, we’re not saving a whole lot beyond that right now. What money we can manage to save is going to the mini-retirement fund.
The goal? $30,000. We could probably live on 30%-40% less than that in central America (where we’re looking), but I’m being financially conservative in doing a very nonconservative thing. I hope to save it in about 18 months. A lot of that will probably come from side jobs.
So that’s it. It’s still a ways off, but it’s given us a lot to think about and to be excited for. And who knows, maybe our mini-retirement will somehow be a catalyst for true early retirement, and I’ll get the best of both worlds! Yes, I think I’ll just go with that.
Have you ever considered any type of mini-retirement?