By Billy and Akaisha Kaderli,
Special to FindependenceDay.com
At the age of 62, we are beginning our 25th year of financial independence. That is quite a feat!
From the beaches on Nevis, West Indies, to the shores of Phuket, Thailand we have travelled extensively through these decades, and what a ride it’s been!
Young and strong in those early years, we were willing and able to tackle just about anything. Now we tend to be a bit more cautious but we’re not letting up. We still climb into the backs of pickup trucks, ride the chicken buses and soak in volcanic hot pools. The time has passed quickly from when we were the youngest, grayless couple in a group of retirees, to now where we blend in with the retiree crowd.
Still, no one can take away the dance we danced and we are filled with gratitude for all the miles and smiles.
You can do it too!
How do you want to live the next five, ten, twenty years or more? Only you can decide what is best on your path and how to get to your goal.
We were often told retiring early couldn’t be done successfully and that we would fail. These self-supported 24 years have proven the naysayers wrong, and we believe that since we have done it, you can too. In our books and on our website we share the tools we have used to get us here so that you, too, can create your own successful retirement, early or not.
We maintain that one must keep one’s dreams alive. No one will do it for you. Besides, it’s much more fun to be led by one’s dreams instead of being pushed by one’s problems.
No matter where you are on your path to Retirement (Findependence?), here are some time-tested tools we have used. Take advantage of what we know.
This is basic and oh-so-essential. When you track what you are spending you know exactly where your money is going and you are able to make decisions clearly and in real time about your cash outlay. This one habit will change your financial life.
Manage cost per day and annual net spending
Once you track your spending, you are able to figure out the yearly amount of money you are devoting to live the lifestyle you are currently enjoying. Divide your yearly amount by 365 days a year and you have your Cost per Day. Manage these figures assertively and you will be in control of your money. We have been retired for a full 24 years (beginning our 25th year January 14, 2015) and our annual spending for these years has been well under $30K per year.
4 categories of spending
In any household, there are four major spending categories: housing, transportation, taxes and food. If you make adjustments here – and there are lots of ways to do so – you are on your way to financial independence. Open yourself up to options such as house sitting, moving to a less costly area to live, paring down the number of vehicles you own, and being aware of your entertainment outlays.
Positive attitude and mental flexibility
Some people think having a positive and flexible mental attitude is small stuff and inconsequential. But without a sense of wonder, an open mind to new things and even to Change itself, making the transition into a satisfying new life of retirement is more difficult. There are so many opportunities and different ways to live, travel and experience life! Why get in your own way? Embrace your retirement and get a mitt and get in the game!
So, as we begin our 25th year we encourage you to dust off that dream and create a clear vision. Strengthen your will to move into your new life and put your solid financial plan into action. If you do these simple things, you, too, can live the life of your dreams.
Editor’s note: On the date of our retirement, January 14, 1991, the S&P 500 was at 312.49. It has averaged better than 8% yearly plus dividends over these decades. Our average annual spending is well below $30K yearly.
About the Authors
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance and world travel. With the wealth of information they share on their popular website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books, The Adventurer’s Guide to Early Retirement and Your Retirement Dream IS Possible.
Here is a 15-minute Internet interview about Findependence Day with Toginet Radio’s Steve Jorgenson, which aired this morning (Sunday, August 18th).
It you have difficulty accessing the clip, just go to Toginet.com and check the schedule for Sunday, August 18th: the 11 am time slot. It’s under Recent Shows over to the right.
The clip contains interviews with three authors: the Findependence Day interview with me is the second of three, and you can go directly to about the 19.48 minute mark on iTunes if you don’t have time to listen to them all.
The host does a nice job in teasing out where the name Findependence came from, to explain what the expression “Freedom, Not Stuff” means, the need for financial literacy, the difference between retirement and findependence and other things.
This week, I did a guest blog on Roger Wohlner’s blog, The Chicago Financial Planner, which you can find here. As I note there, Roger [pictured on the left] is the kind of fee-only financial planner I recommend in Findependence Day. By the way, Roger is a must-follow on Twitter as @rwohlner
As you can note in the comments section which follow that post, people are becoming more aware of this paradigm shift and the distinction the book makes between traditional “Retirement” and Financial Independence (or “Findependence”).
As one commented, by viewing the goal as Findependence rather than full-stop retirement, he was able to move his “retirement” date up by 15 years.
Related to this concept is a blog I did here a few months ago about Early Findependence being a more achievable goal than Early Retirement. I note in this weekend’s Financial Post, a package of stories about extreme saving (I’d call that ‘guerrilla frugality”) by Melissa Leong, including a profile of a couple who supposedly “retired” at 35.
We’ve seen these stories before of course: Derek Foster and Dianne Nahirny both wrote books describing how they retired in their 30s. But of course, they were really describing Findependence since if nothing else they were still “working” by writing books how about how they stopped working!
Tonight is the official launch party for the new U.S. edition of Findependence Day. The two main ingredients of the cover are fireworks and balloons, and here they are ready to be unleashed. It also happens to be the actual day I turn 60. I’m billing this as the world’s first Findependence Day party. Since we coined the term, we’re entitled to make that claim, right?
Does this mean I’m now financially independent enough not to show up to work on Monday at MoneySense magazine? In theory, yes, since in Canada you can collect the Canada Pension Plan (CPP) as early as age 60. In practice, however, it will be business as usual. But as I say in the book, the key point about Findependence is that you may choose to keep working, but because you want to, not because you perceive you must.
With many North American baby boomers turning 60 and 65 in the coming months and years, I expect there to be many Findependence Day parties — at least if the term catches on and the US edition of the book gets any traction. Here’s how you can help: please use your social media to spread the word, especially if you have American friends you think would benefit from the book if they just knew it existed.
And exist it does, as you can find elsewhere on this site. The paperback and hardcover editions are now available at Amazon.com, Barnes & Noble and Trafford. An e-book edition selling for $3.99 will be released in a few weeks. And of course, the first or “Canadian” edition is also available directly from me by clicking on the Buy Canadian edition button.
After a bit of a hiatus, the Investor Education Fund has resumed publishing of my blogs within its Masters of Money platform, now well into its second year. Here’s one of two recent posts on Early Retirement, which include some personal reflections on this topic in light of my recent job change to become Editor of MoneySense Magazine.
We’re now ramping up for a new series of blogs at IEF. Meantime, I’m also blogging at moneysense.ca. Last week, I reviewed a book — Managing the Bull — which also made the distinction between Retirement and Financial Independence. As I note in the blog titled “Another Vote for Financial Independence” there seems to be a growing recognition of the distinction between the two terms.
And just as you can distinguish between Findependence and traditional full-stop Retirement, similarly you can distinguish between Early Retirement and Early Findependence. As I’ve noted before, Findependence can often occur much earlier than traditional retirement: sometimes decades before. In fact, it’s never too early to establish financial independence: if you can pull it off in your teens so much the better. Of course, few of us have the good fortune of the Miley Cyruses of the world so most of us will have to settle not for Early Findependence but Findependence somewhere between mid-life and the traditional retirement age.
Retirement overrated, Findependence underrated?
In the current issue of MoneySense Magazine now on newsstands (Retire in Luxury for Next to Nothing), we include a story asking whether traditional Retirement is Overrated. One person who has retired at 59 insists that to the contrary, Retirement is UNDER-rated, but we also include two professionals who continue to work in their chosen fields well past their mid 60s.
Personally, I’m coming around to the view that it’s quite possible and perhaps desirable to aim for the seemingly contradictory goals of both Early Findependence but Delayed Retirement. Think of any rich and famous artist, musician or business person, be it Steven Jobs, Mark Zuckerberg, JK Rowling or Mick Jagger. All these people experienced early success and therefore Early Findependence.
But it’s telling what they chose to do with that Early Findependence: in almost every case, they continued to do what they loved and that had been the source of their worldly success and accompanying financial independence. Jagger is still rocking, Jobs was designing the next generation of Apple devices until his last few months of life, Zuckerberg is a billionaire but still engaged in his 20s at the social media giant he founded and Rowling has now branched out beyond her 7-part Harry Potter novels to pen a new adult novel that’s reviewed in the current New York Times Book Review.
Findependence as means, not end
This also tells us something important about the nature of work and wealth. If you’re really passionate about something and doing work that satisfies the soul and that the world benefits by, then wealth is merely a byproduct of that activity. Let’s not confuse the means and the ends. Financial Independence should not be viewed itself as the goal (or end) but merely the means to an end, which is whatever vocation, business or creative pursuit you are called to do.