Let’s be real here, working can be very stressful at times. Following directions from superiors, managing employees, dealing with office politics, keeping up with deadlines, appeasing customers, I can go on and on. The worst part is that people often get stuck working for decades and well into their 60’s or 70’s to make ends meet. What if you didn’t have to settle for that lifestyle? Meet Eric and Katie who broke that stigma and was able to retire early in their 40’s and live a nomadic life traveling the world.
Meet Eric and Kate who retired April of 2019 to follow their passion-Love of Travel. They live a life full of adventure, traveling the world and experiencing different cultures. Currently, they are in Danang, Vietnam and will most likely be there for 6 months before moving on to the next new location.
Eric and Katie shares helpful tips on how they were able to retire early. Eric retired at 42 and Katie retired at 41. Truly amazing! That’s more than 2 decades worth of work they were able to shave off. They saved up $1,000,000 which they fund for their nomadic lifestyle. Eric and Kate shares how they were able to do just that. Check out Eric’s site Bonus Nachos where he documents all the countries he’s been to during his retired nomadic lifestyle.
Eric and Kate’s Early Retirement Story
Eric, 42, Retired Accountant made under $50,000 a year
Katie, 41, Retired from the Hotel Industry made around $50,000 a year
Resides: Previous residence in Silicon Valley now lives in Danang, Vietnam
Saved: $1,000,000
Retirement Age: Eric, 42 and Katie, 41
1 | Was there any specific moment that motivated you to retire early?
We had recently moved from the Midwest to California and I had to find a job during the Great Financial Crash.
While I was happy to be able to find work, the job only offered 2 weeks of paid vacation. I previously was spoiled with 5 weeks.
Work suddenly felt a lot more oppressive.
I knew that there had to be a better way. It wasn’t too long after this that I discovered popular early retirement blogger Mr. Money Mustache.
I had always thought about early retirement as an abstract concept, but until this point hadn’t realized how accessible it really was.
2 | What was your income range? Did you do any side hustles?
I never earned more than $50k/yr until I was 37 years old.
Katie always earned a little more than me, except for a couple of glorious months in 2015. 🙂
But neither of us ever made 6 figures, so our early retirement is much more a product of low spending than high earning. We never earned any other money, preferring to savor our time away from work.
3 | When did you start saving and investing?
We both started contributing to our 401k accounts immediately upon getting our first professional jobs.
This was before we had even met, so the idea was independent of one another. And from there, we would each increase our contribution percentage with every raise that we received.
Later we opened up IRAs and stashed money into a taxable account as well, but we mostly just focused on our 401k accounts until our early 30s.
4 | Did you have any debt? If so, what did it consist of?
Not really. Some minor credit card debt as young adults, but nothing much to speak of.
We were careful to avoid it. This certainly helped us get to early retirement more quickly.
5 | Were there any programs/tools that helped to achieve early retirement?
As a former accountant, I love Excel spreadsheets. I use them for everything from tracking expenses to retirement projections.
I have always preferred to track my finances manually as opposed to using automated trackers like Mint or Personal Capital.
I felt it gave me more control and allowed me to customize it to my personal situation. Which is somewhat ironic because when it comes to investing, I’m completely hands off.
I think it’s much, much more likely that an individual investor will make a mistake and suffer a setback than pick the next greatest company.
As such, I believe the best way to go is to invest solely in index funds.
To help explain why, I’d recommend two books. The first is The Bogleheads Guide to Investing by Taylor Larimore. The second is The Four Pillars of Investing by William Bernstein.
Both are excellent books that are written for the non-professional investor. They are also popular enough that they’re likely available at your local library.
6 | Were there any habits that helped you retire early?
Most of our habits were developed to spend less money.
We focused our spending on what brought us the most happiness and tried to cut out the rest.
We cooked at home almost exclusively.
We split one older car, so one of us was always commuting by public transit or by bike.
We lived in a small cheap apartment.
On the flip side, travel was something that we have always loved so we made sure to take as many vacations as work would allow.
By not living in a fancy place, driving a new car (let alone two) or eating out often, we were still able to do the things we liked best while also saving lots of money.
7 | Do you think you had to sacrifice a lot in your life to retire early?
I don’t think sacrifice is the right word.
Instead, I prioritized. Not spending every dollar shouldn’t be viewed as a sacrifice.
I would actually argue the opposite, that spending all of your money is a bigger sacrifice because you’re giving up compound investment gains that only increase over time.
I like the saying “You can have anything you want, but you can’t have everything.”
While I may not have been buying a million dollar house or driving a luxury car like many of my neighbors, I did get my passport stamped a lot.
Prior to retirement, I had been to Italy, France, Germany, Austria, Czechia, Jamaica, Grand Cayman, Aruba, and Mexico multiple times. There was lots of domestic travel too, including Hawaii, NYC, and many national parks. Travel has always been my priority.
8 | Did you ever receive a large sum of money that helped to propel you financially?
Well, the S&P 500 did go up over 20% in 2017 when we were already well on our way to early retirement. Does that count? But no start up windfalls, inheritances, or other things like that.
9 | What does your retired life consist of?
We now get to travel the world, experience different cultures, and eat lots of local delicacies. It’s not like our previous vacations though.
Prior to quitting, our longest stop in any one location was 10 days. So far, our shortest stop has been two weeks, but we prefer to stay longer. That really allows us to soak in the flavor of the area.
We get to frequent local markets and eat exotic produce. We swim in the ocean, explore cities and neighborhoods, visit temples and museums, and watch birds. We have nearly mastered the art of the leisurely breakfast.
I even occasionally write a blog post. And the best part is that it’s way cheaper than our previous life. We spend about half of what we did when living in Silicon Valley. I report all of our spending on the blog as well.
Things have been a little different since COVID-19 became a pandemic. However, for the moment, we’ve paused our travels as we wait to see how countries will deal with opening their borders and when/if a vaccine will be available.
We are currently waiting it out in Danang, Vietnam and will likely live here for at least 6 months. It’s a pretty nice city and there are definitely worse places that we could be. Vietnam as a whole did a great job handling the outbreak so there’s little risk of infection here.
10 | If you could offer any valuable advice to readers to retire early, what would it be?
Track your expenses. There’s nothing more powerful than that.
Once you know where all your money is going, it’s easy to figure out what spending is worthwhile and what is not providing value.
Then you can redirect that less than optimal spending towards investing. And once you get that investing ball rolling, it will pick up a lot of steam over time.
Einstein once called compound interest the most powerful force in the universe. Make sure it’s working for you.
Eric and Katie fulfilled their dream of being able to retire early. Their journey teaches us that no, you don’t have to earn a six figure income to achieve early retirement.
Compound interest is very powerful indeed and they used it to their full advantage by investing when they first started their careers.
They also focused investing primarily in index funds without the stress and hassle of handling single stocks. They read books like The Bogleheads Guide to Investing and The Four Pillars of Investing to familiarize themselves with how investing works.
Everyone dreams of the ability to retire early but often times we don’t implement the right steps to help us achieve the goal.
Eric and Katie is a prime example that it is possible simply by investing early, keeping track of your money, not comparing your life with others, set aside funds to still enjoy life, spending less money, and saving where you can.
Thank you Eric and Katie for sharing your inspiring story with us. Through your story, we see that it’s possible to retire early by implementing the right steps and having the right mindset to achieve a goal.
Don’t forget to check out Eric’s blog Bonus Nachos to see how they’re enjoying retired life traveling the world.
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