Retired in their early 30's and now travelling the world

This couple had a combined income of AUD $187k, they lived a frugal lifestyle and put every spare cent into indexed funds (I have heard the term previously but don't know what they are). After 10 years investing they have retired in their early 30's and are travelling the world living on divendends:

This ordinary couple got rich by spending a decade investing every spare cent.

 

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Good on them.
Marg

 

Wish we had done this in our 20's! Exciting for them to now be enjoying the rewards of their early sacrifice

 

Thanks Radson, just looked up barefoot investor for an explanation. $5,000 initial buy in and then you can purchase lower amounts. We are close to max serviceability so indexed funds could be a good option for us.

 

Thats awesome. Hope it will be me one day.

 

Great way to invest, you couldn't spread the risk much more than indexed funds and like this couple showed it's more about sacrificing and saving as opposed to speculating on rises and falls with specific shares.

 

I've started to look into Index Funds after reading Pete Wargents book Get A Financial Grip (very good read) as he advocates IF's alongside property investing given its simplicity. Set amount of $'s straight from his wage every month into it and forgets about it.

Anyone else do something similar?

 

Yes and it might me my next move as I have some marks on my credit file from last investment which went belly up.

 

There is a bit of confusion here.

WIth ETFs or Index funds, one has to make the conscious effort to buy them on the sharemarket.

Managed funds on the other hand can be set up automatically to invest on a monthly basis but will incur slightly higher fees.

I have both but every month i have a set amount of money automatically go into managed funds to prevent me from spending. In my mind its like a mortgage payment. I pay that first along with rent before I pay myself.

Check out @austing and @The Falcon in Other Asset threads for some advice from some very astute investors.

Managed Funds vs. ETFs vs. SMAs

 

It says they saved 70% of income. That's over $1m dollars invested, if they used DRPs throughout that period I'm surprised their income isn't even higher than the 4k a month.

Very solid way to get out of the rat race and good on them for staying the course and getting it done.

 

I think they show you don't need a huge sum to "retire", depending on how you want to live. They are receiving about $66,000 in dividend income. So portfolio may only be in the 1-2 million range. Not a huge amount compared to what many on here aspire to.

Good luck to them.

 

Interesting during 2013 their daily expenses averaged $92 which covered everything, food, travel, accomodation, with most of their time spent in Mexico.

 

I did a similar thing, every continent over a few years after slaving/saving away. I imagine I travel in a similar fashion to the couple in the article; slowly and frugally. I try to learn languages, spend time with locals and do my best to see as much I can "behind the scenes", there are so many accessible experiences out there that no high-priced package or tour could ever come close to...

I kept a journal and a record of all expenses (I'm a travel nerd), spent an average of $33.33 per day which included short stints in NY, London, Amsterdam but mostly involved Eastern Europe, the Middle East, SE Asia, India, China, Sri Lanka, Central and South America . I was lucky because during most of that time the AUD was either at parity with the USD or very close to it...the month in Sri Lanka was $350 AUD and that included a flight to Chennai

I couldn't retire to that lifestyle (out of choice) but still can't wait to escape again.

 

Not to take away from their achievement but when/where its gonna get tricky is when they have more kids or want to return to Oz for kids education etc.

Lets say they have 60k div income by then in todays dollars. After rent and groceries there'll be nothing left over..in fact it'll probably be negative.

 

We had a discussion about this on another forum.

They are U.S. citizens and have a blog Go Curry Cracker! - Spend Little, Save More, Travel the World. Go Curry Cracker!

They now have a baby and are still travelling. The general concern us was "good on them, but they should be paying off a home base to return to at some point"

 

Good point but it depends on the people involved I think. I've met quite a few that never return, some of the most amazing people with knowledgeable, happy children (home/distance educated, bilingual and very worldly) that own Guesthouses (even whole islands!), Restaurants, Properties, Bars, Surf Camps....

Some are cut out for it, some aren't.

 

Renters For Life - Go Curry Cracker!

Interesting post as to why they prefer renting. The more I read , the more think they actually have the right balance.

 

Wow that was a really well written blog article and definitely gets you thinking.

Like any argument a rebuttle on all points can ofcourse be made. I personally believe the biggest fall down on the argument is around the children. They mentioned they have a 1year old so obviously at that point picking them up and moving them is no issue.
Renting becomes a problem when you have 1-3 children all going to school with friends. Moving even 5 minutes down the road can severely distribute a child. They require stability, there is simply no way I would be the person I am today if my mum just moved around renting.
My close friends and there parents helped shape me along with my mother.

My work colleague and I had this exact conversation the other day. He opened up to me and said because his parents moved around so much he basically gave up trying to make new friends and was bullied really bad at school in the end. He said at his first school he was very popular and knew a bunch of people he grew up with.

Now ofcourse this could be no issue if you move down the road but that may not always be a possibility.

 

You can always sign a long term lease if you're worried about keeping the location for your kids schooling.