Can you Retire on $250,000 Dollars?
Ever wonder about people who step foot in some exotic destination and never come back? It happens all the time– the SCUBA instructors, the yachties, the bar owners, the beer drinkers, the criminals, the naturalists, the internet marketers, the retirees.
Bob is many of the above.
Bob started started a career with a high school education. 35 years later he had a great job at a little company that probably made the software you are using right now. He managed people, made 6 figures, and did relatively interesting stuff.
Bob was married for close to 25 years, but after a long haul they started to drift apart and have problems. In 1995, Bob got a divorce. Bob’s and his wife’s life savings were split in half.
Fast forward 5 more years and Bob lived alone in an apartment. His career was going well. Bob had a decent management job and $250,000.00 in the bank.
Not bad.
Of course, Bob was getting tired, and his life was more than just a little boring, but he plowed on. What else to do? If Bob played his cards right he could retire in another 10-15 years, ditch his office clothes, and play more golf.
Then life threw Bob a curve ball, or a high fast ball, depending on your perspective.
In 2000, Bob’s company set up an office in Manila. They were starting to outsource to the Philippines. He was invited to a team building retreat which landed him on the island of Mindoro in the Philippines.
Mindoro is a damn fine spot to land.
During the 2 weeks of meetings and festivities Bob had the time of his life.
He ate BBQ, played paint ball in the palms, told stories, went SCUBA diving, and floated in crystal clear tropical waters. Bob made more new friends in one week than he had back home in one year.
Bob talked to the folks who had retired here in the Philippines and determined he could leave his office job close to 10 years early if he lived here instead of the Pacific Northwest. It all clicked for Bob, and I’m sure you’ve heard the refrain before:
Bob never went home.
Bob called his boss and brother from the Philippines and tied up all the lose ends as best he could. Bob didn’t see the need to endure the 30 hour trip back home. He had found what he wanted to do with his life.
He did the expat math. He could live close to 15 years at a really fine level on that, plus he’d be making money in the market in the meantime (after all Bob’s life savings was invested in mutual funds) and if he did push on past 70, he could always trim his spending.
$250,000 in life savings isn’t a bad performance for a 35 year career that included a lot of ups and downs and a devastating divorce.
Of course, Bob didn’t expect the financial crisis of 2008. It got him particularly bad. After some investments in local real estate and some broadsides to securities he was advised to own, he was left with about 50K.
The situation forced Bob to get a job managing a local dive resort to ensure he doesn’t burn into the last of his savings.
The work isn’t super tough, but certainly not the place he’d hoped he’d be at his age.
So far Bob’s retirement cost him 35 years and 60K. The rest was taken by a black swan market crash that most portfolio managers weren’t expecting.
When I caught up with Bob the other day I asked him if he could go back and do anything differently if he could. He said that he didn’t want to think about it that way.
I asked what are some things that would be helpful to him given the situation. He said, more business understanding, a better understanding of the internet, and more youth.
All in all, Bob is still a happy guy, but in his own words, “I just miss my money.”
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I couldn’t help reflecting on this story while David and I from semester II had an absolutely magical day here on a private beach island in the Philippines. We grilled meat, swam in clear waters, and laughed a lot. I can understand a guy like Bob taking the plunge after only 2 weeks.
Everybody will draw their own conclusions from Bob’s story, I’m not sure I’ve got any of my own yet. At minimum, it’s always worth it to ask “what am I working for?” Even if the 4 Hour Work Week where a total piece of heap (which it isn’t), it would all be worth it for convincing me to ask the question and take it seriously.
Talk soon :)
Dan
We Cooked Great Food and Had a Magical Day
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