30's and retired with $870k net worth?

[ua_guy]

Could you do it? Do you think they can sustain this?

https://www.cnbc.com/2021/05/27/this-millennial-couple-retired-in-their-30s-with-870k.html

[jenn_jenn]

Maybe it’s the optimist in me but I think they can! Especially since they still work a little here and there and seem very disciplined.

Would I do it? No. I don’t want to live in an Airstream and I’m not willing to move to a LCOL area. We have an early retirement plan that’s somewhere in the middle of extreme FIRE and work till we’re 65 and life has passed us by.

But I’m still impressed - good for them!

[plodding_investor]

Maybe it’s the optimist in me but I think they can! Especially since they still work a little here and there and seem very disciplined.

Would I do it? No. I don’t want to live in an Airstream and I’m not willing to move to a LCOL area. We have an early retirement plan that’s somewhere in the middle of extreme FIRE and work till we’re 65 and life has passed us by.

But I’m still impressed - good for them!

Agree. I wouldn't even do that now at 57 (with a kid in college and a little mortgage left). But it does give me some hope for future expenses as we live pretty basic for most other things -- provided our health costs don't soon hit the roof.

[kork13]

Could we do it? Easily.
We already live on roughly $40k-$45k annual expenses (not including taxes & tithing/charitable giving), so pulling our spending back further would basically mean less eating out, more deliberate spending, and eliminating childcare costs (we're retired!) -- so the money side would be easy.

Would we do it? Not like they are.
The isolation of their situation would be problematic for us, especially with/for our young kids. Also, I wouldn't want to be so close to the wire -- I'd want at least double their stash, to live off a 2% withdrawal rate, so that we'd be less impacted by market swings. And a tiny 800 sqft house? Bah... I like some space.

Can they sustain it? Probably.
Their stockpile is still growing, so money doesn't seem to be a problem. And it sounds like they're both invested in the freedom that their lifestyle offers. They also still have avenues to keep themselves meaningfully engaged while retaining that freedom.

IMO.... The hard part of early retirement is to find lasting meaning. They have that with volunteer work, project-centric contract jobs, etc. As long as your have meaning & money figured out, retirement is a no-brainer.

Honestly, we're already planning toward a similar route (though not as restrictive). Retire at ~42 (in 6yrs) targeting ~$3M net worth & $90k/yr income, normal expenses closer to $60k/yr. We just haven't totally figured out the "meaning" side yet.

[QuarterMillionMan]

Interesting, I'm 56 at their same $870K net worth and single, so I should be able to do it. I wish they mentioned how much they are paying for health insurance or are they uninsured?

[ua_guy]

Interesting, I'm 56 at their same $870K net worth and single, so I should be able to do it. I wish they mentioned how much they are paying for health insurance or are they uninsured?

I don't recall if it was in the text, or in the video, but I believe the figure was $499/month for health insurance. I assume that covers them both? But no details about what kind of plan that is. There are still many ways medical expenses could leave them high and dry - my biggest fear of an early retirement.

[QuarterMillionMan]

Yup ua_guy ditto about medical expenses which I fear myself. Also, they don't have kids which would squash many of us trying this early retirement plan for those who have kids. It looks enticing though to follow in their footsteps.

[kork13]

Interesting, I'm 56 at their same $870K net worth and single, so I should be able to do it. I wish they mentioned how much they are paying for health insurance or are they uninsured?

It said they spend $650/mo between home/auto insurance & the "health share" plan... So yeah, something between $400-$500/mo is probably a reasonable estimate for the health share costs. The danger of those health share plans is that they are basically a healthcare coop, and my understanding is that the actual cost varies month-to-month based on the medical expenses from everyone part of the 'coop'.

Being single, you could definitely make it work, because you don't need to get anyone else on board. But you need to have your expenses in your control. They're off-grid, so no utilities. They open their home & RV with no debt. They're in the middle of the desert, so property taxes are minimal.

[disneysteve]

For one thing, they've grossly misunderstood the "4% rule" which is based on minimizing the chances of running out of money during a 30-year retirement. Not a 60-year retirement.

Health share plans are NOT health insurance. They may get you reduced rates on various services but you can still have substantial out of pocket costs if anything serious occurs. My wife spent 19 days in the hospital this year. Her bills came to nearly $1 million. We paid exactly zero. What would that episode have cost under their plan?

Is it sustainable? It's hard to say just based on the article. Both of them are still working to some degree which obviously makes the plan must more solid. They aren't fully retired and aren't totally dependent on their $1.2 million nest egg. So I think that helps a lot. If they are spending 35K/year and he is making 15K/year from his books, YouTube, and what not, and she is also earning some income, then they are only about half of their spending from their portfolio. Let's say 18K which is only a 1.5% withdrawal rate which is totally sustainable.

I do note that this article and budget is from April 2021 which was before inflation really ramped up. It would be interesting to see what their budget looks like today. Just the $750 for groceries is probably closer to $900 now and many of the other costs have likely risen as well, and their portfolio has probably shrunk at the same time.

Would we do this? Absolutely not. Zero interest in ever living that way. I'd rather work.

[Like2Plan]

It said they spend $650/mo between home/auto insurance & the "health share" plan... So yeah, something between $400-$500/mo is probably a reasonable estimate for the health share costs. The danger of those health share plans is that they are basically a healthcare coop, and my understanding is that the actual cost varies month-to-month based on the medical expenses from everyone part of the 'coop'.

Being single, you could definitely make it work, because you don't need to get anyone else on board. But you need to have your expenses in your control. They're off-grid, so no utilities. They open their home & RV with no debt. They're in the middle of the desert, so property taxes are minimal.

"They spend about $500 combined for a health share plan, which gives them the ability to see any doctor at any time and be treated as a cash-paying patient. For dental, they periodically venture an hour south across the border to Mexico, where a cleaning costs around $25. "

This is from the article. They mentioned being off-grid, but I imagine there are costs involved with maintenance and upkeep on their solar array (they don't last forever) as well as the septic system (like periodically pumping it out). And, they also mentioned they use rainwater (but they are looking into adding a well).

[ua_guy]

I think what they are doing is admirable...it's just not on a margin which would bring me comfort if the situation was mine. I like their focus on health. Dude said he couldn't imagine working in an office for the rest of his life and it hit me right in the feels.

[ua_guy]

"They spend about $500 combined for a health share plan, which gives them the ability to see any doctor at any time and be treated as a cash-paying patient. For dental, they periodically venture an hour south across the border to Mexico, where a cleaning costs around $25. "

This is from the article. They mentioned being off-grid, but I imagine there are costs involved with maintenance and upkeep on their solar array (they don't last forever) as well as the septic system (like periodically pumping it out). And, they also mentioned they use rainwater (but they are looking into adding a well).

Reading between the lines, I have to imagine "Mexico" is a big part of their healthcare strategy. Also, one does not need a "health share" plan in order to be treated as a cash-paying patient Anyone without commercial or government-backed insurance is, by default, a cash-paying patient. "Private pay".

Relying on rainwater in Arizona could be a troublesome strategy for having a year-round supply of fresh water. Well drilling costs could be in the range of $20k-$30k depending on depth and other factors. Most septic systems require pump-out and inspection every 3-5 years. That costs us around $500 IIRC when we do ours. We also have our well tested annually ($200). Living off-grid isn't as cheap as it appears. Generally there's good cash savings until something needs major maintenance or work. Instead of calling the utility company, you have to get out the checkbook.

[Like2Plan]

For one thing, they've grossly misunderstood the "4% rule" which is based on minimizing the chances of running out of money during a 30-year retirement. Not a 60-year retirement.

Health share plans are NOT health insurance. They may get you reduced rates on various services but you can still have substantial out of pocket costs if anything serious occurs. My wife spent 19 days in the hospital this year. Her bills came to nearly $1 million. We paid exactly zero. What would that episode have cost under their plan?

Is it sustainable? It's hard to say just based on the article. Both of them are still working to some degree which obviously makes the plan must more solid. They aren't fully retired and aren't totally dependent on their $1.2 million nest egg. So I think that helps a lot. If they are spending 35K/year and he is making 15K/year from his books, YouTube, and what not, and she is also earning some income, then they are only about half of their spending from their portfolio. Let's say 18K which is only a 1.5% withdrawal rate which is totally sustainable.

I do note that this article and budget is from April 2021 which was before inflation really ramped up. It would be interesting to see what their budget looks like today. Just the $750 for groceries is probably closer to $900 now and many of the other costs have likely risen as well, and their portfolio has probably shrunk at the same time.

Would we do this? Absolutely not. Zero interest in ever living that way. I'd rather work.

There was a link in the article over to another article (from 2018) about the couple where they explained the Health Share system:

"Health share programs have become extremely popular in the RVing community. When you need the freedom and flexibility to see any doctor at any time (common among full-time travelers), regardless of where you are in the United States, health shares fill the need nicely. They provide health reimbursements at a fraction of the cost of a traditional insurance plan.

You are treated as a cash paying patient, and legally, health shares are under no obligation to cover your health expenses (especially for elective surgeries or anything that results from behavior that the health share does not condone, like smoking, skydiving, etc.). Many also won’t cover preexisting conditions, at least for the first several years. Even with these limitations, a health share program might still be right for you.
Health shares are not “health insurance” and quite frankly, that’s a part of what attracts us to this option. Less expensive. More streamlined. Easier to understand.
For the record, we use Liberty Health Share – one of the most popular options in the full-time RVing community. We pay $299/month combined for my wife and me. We have the $1m plan.
Once your health care is figured out (arguably the toughest part of this equation!), everything else becomes much easier."

https://www.cnbc.com/2018/08/09/steve-adcock-4-step-guide-to-an-early-retirement-strategy-that-works.html

I think young and healthy probably lets folks get by, but as an older person I, too, wonder what happens when you get to be older and/or "stuff" happens. Somehow, a lot of (maybe most?) people think they are going to outrun the aging process.

Also, I wonder about the human capital that is not available to a person anymore (because they are old). I have seen it played out. Extremely bright and gifted at a younger age, but maybe not as capable at age 60 or 70--it's hard to go back to work at that point if you have fallen short.....

Another aspect is social security--which is calculated on the high 35 years of earning.. Maybe folks in this scenario "might" be okay because they continue to work, but it might not provide much of a safety net (if they fall short).

I hope it works out for them, they seem to be living their dream.

[disneysteve]

Another aspect is social security--which is calculated on the high 35 years of earning.

Great point. I guess the super early retirees don't plan on needing SS or don't think it will exist. If you retire at 35 and started working after college at 21, you've likely only got 14 years of full employment on record at best.

[bjl584]

interesting.
not sure if I could do this sort of thing, at least not exactly like them, but good for them.
it is interesting that they aggressively put money into retirement accounts when they planned to retire in their 30's.
i'd probably be investing in taxable accounts so i had access to the funds.