Feeds:
Posts
Comments

Archive for the ‘Inspiration’ Category

Get A Life

I recently set a deadline for retiring at 40. I’ve worked out some scenarios, run the numbers and realised that financially it’s doable.

I’ve come to realise however, that there are really two sides to being ready to retire early. The first is financial preparation, but the second is mental readiness. When I really started to think about whether I was mentally prepared for retirement it became quite clear to me that the answer was no.

Firstly, I had no idea what I was going to do with my time. It couldn’t just be a replication of what I do on the weekends. The weekends are mostly about decompressing from the work week, domestic chores and family time. For me, retirement needs to be so much more than that if I’m to really enjoy it.

Secondly, I hadn’t yet worked out how to make the mental shift from an extreme saver to a spender. I realised I had some homework to do.

Since then, I’ve been reading through Ernie Zelinski’s book, How to Retire Happy, Wild and Free. One of the activities that has really resonated with me is the ‘Get a Life Tree’, where I brainstorm all the things I might like to do in retirement. It is still a work in progress, but it’s actually been such a wonderful exercise.

I now realise I have no shortage of things to do in retirement, and in fact I need to start incorporating more of these things into my life right now. So without further ado, here’s my ‘Get a Life List’.

Activities I Like Now

  • Spending time with my husband

  • Spending time with my son
  • Reading academic literature
  • Researching
  • Writing my thesis
  • Going to the movies
  • Personal Financial Planning
  • Reading about Economics and Investing
  • Reading about Peak Oil and energy descent
  • Watching movies and TV series online
  • Visiting Cafes for Brunch or Coffee

Activities I liked in the past

  • Spending time with good friends
  • Travelling the world
  • Photography – Travel

  • Photography – Dogs
  • Drawing
  • Running a Business
  • Going to the Theatre
  • Going to the Library
  • Creative writing
  • Playing cards
  • Having a dog
  • Buying houses
  • Renovating houses
  • Blogging – Travel
  • Blogging – Dogs
  • Blogging – Simple Living and personal finances
  • Playing computer games
  • Op Shopping
  • Reading – Literary Fiction
  • Reading – Historic Fiction
  • Reading -Science Fiction/Fantasy
  • Reading – Non-fiction
  • Being a member of a book club
  • Business Improvement Consulting
  • Growing vegetables and fruit
  • Preserving the bounty – Jams, pickles, chutney

Activities that will keep me fit

Travel

  • Camping trips
  • Train trips
  • Cruises
  • Slow travel
  • B&Bs for the weekend
  • Roadtrips to see family
  • RV trip across North America or Europe
  • Intrepid Family Travel

New activities I’ve thought of doing

  • Make new friends

  • Keep a journal
  • Write my autobiography
  • Write a novel
  • Publish a photo book
  • Hold an art exhibition
  • Run a B&B
  • Off-grid/sustainable living
  • Run a Hobby Farm
  • Get a PhD
  • Run a consultancy business
  • Learn to dance
  • Learn a language (or two)
  • Learn to ride a horse
  • Meditate
  • Learn Tai Chi
  • Become a coach – Life/Business
  • Become a renowned author/speaker
  • Learn an instrument – Ukulele, harmonica, drums
  • Research the Family Tree
  • Become involved in Transition Towns
  • Become involved in a Train Museum
  • Become involved in Energy transition – renewable energy/energy efficiency

 

 

 

Advertisements

Read Full Post »

11513997086_c0000b14fc_z

I’ve recently discovered Mr Money Mustache and have consumed all of his posts and delved headlong into the Forums. What a treasure trove!

One of the themes of his blog is The 4% Rule, which is essentially a rough guide to how much you need to retire. This little figure is based on The Trinity Study, a study to determine “safe withdrawal rates” from retirement portfolios that contain stocks and thus grow (or shrink) irregularly over time. This study defined ‘success’ as not going broke during a 30-year test period.

So if I accept that a 4% withdrawal rate won’t leave me broke in my old age, then the assumption is that I would need a portfolio of $1 Million to give me $40,000 per annum.

The interesting thing for me, is that (as MMM points out) the trinity study assumes a retiree will:

  • never earn any more money through part-time work or self-employment projects
  • never collect a single dollar from social security or any other pension plan
  • never adjust spending to account for economic reality like a huge recession
  • never substitute goods to compensate for inflation or price fluctuation
  • never collect any inheritance from the passing of parents or other family members
  • and never spend less as they age

I fully expect that we will do a bit in our retirement to keep some money trickling in; we expect to get a bit from superannuation in our old age (but when or how much is yet to be seen); and we know that we can downscale our life if circumstances require it. So, in short, the 4% rule is theoretically quite conservative.

After reading all of this, I started to feel like maybe it was possible to retire easily at 40. However being the careful person that I am, I wanted to test some assumptions by running a few scenarios. This is where some Early Retirement calculators came in very handy. You can check them out here:

I decided to base my simulations on the following set assumptions:

  • Starting portfolio $600,000
  • Property portfolio providing an income of $20,000 per annum
  • Superannuation or pension of $30,000 per annum starting when I turn 60.
  • Additional savings of $50,000 per annum until 40 (retirement age).

cFIREsim1

Scenario 1. In the first simulation, I assumed that we continued to spend like we currently do (minus things like childcare that we would no longer use), that we would continue to rent a house in our retirement and that we make no additional income. This scenario has a 63-71% chance of success (i.e. that we don’t go broke).

Scenario 2. On the second run, I cut our living expenses by 25%. This time, we have a 95-100% chance of success. Okay, that sounds better, but we don’t really want to rent forever. We want to buy ‘The Farm’ when we retire! Let’s see what happens.

Scenario 3. Ok, so this time we bought ‘The Farm’ for $500,000 upon retirement. I reduced our expenses by the equivalent of the rent we wouldn’t pay. This scenario has a 73-81% chance of success, which is not good enough for conservative old me.

Scenario 4. What if we bring in a small income of $10,000 per annum in retirement? Well, it looks like we have 97-99% chance of success! That will do!

So what does all of this mean? Essentially I can retire easily at 40 IF we reduce our current living expenses by 25% before then. If we want to buy ‘The Farm’ then we have to be prepared to find an additional $10,000 per annum from some side hustles, which I think is more than achievable.

That was a very worthwhile exercise and I feel like we now have something concrete to work towards:

  1. Develop a budget such that we can live comfortably on 25% less than what we currently spend (not including childcare and other work-related expenses that would disappear in retirement).
  2. Identify some opportunities for side hustles that could bring in $10,000 per year.

 Photo by: Matt Shalvatis 

Read Full Post »

2085541144_b925053054_mThis weekend I have been completely engrossed in watching The Crash Course, which is Chris Martensen’s best attempt to explain exactly how we got into this economic crisis. 

While The Crash Course is divided into small video sections of 3-18 minutes each, the whole thing runs just over 3 hours. We had it on DVD and watched the whole thing from beginning to end. While I already knew many of the themes in this presentation (Economic slump, Peak Oil, Environmental Problems, Baby Boomer Retirement, World Overpopulation), I found The Crash Course  an excellent way of summarizing it all and showing how they all relate.  

I’ve been dedicated to downshifting during the last few months, but somehow becoming aware of all this information has made the task more imperative and urgent for me. As I digest all of this more fully, I’m sure I’ll share my thoughts over the coming weeks and months.

If any of you have already seen this presentation, I’d love to hear your thoughts.

Photo by: azrainman

Read Full Post »

170440453_e389fd7633

The Prime Minister of Australia has just announced a new initiate to encourage Australians to pull together to beat the rapidly worsening economic downturn. 

KEVIN Rudd wants to recruit an army of young volunteers to help the elderly, feed the homeless, and clean up the environment. 

In exchange for giving up their time, members of the new Community Corps would get discounts on their university <..> debts. The proposal could attract tens of thousands of volunteers from the 1.3 million Australians with a higher education debt. 

Corps members could deliver meals on wheels, youth and Aboriginal services, become volunteer firefighters, or assist the disabled and elderly. Landcare and water projects could also benefit. 

It is understood the Corps would operate within Australia, unlike the US Peace Corps, which works on projects across the globe.  ~ news.com.au

Thankfully I received a scholarship to attend University. For those of you who had to take on student loans, would you consider volunteering if it meant you could reduce your debts?

Photo by: Mil

Read Full Post »

picture11

Like much of the world I watched yesterday’s Inauguration speech by President Obama. On my previous post, Tom from Escape from Suburbia left me the following comment:

I just finished watching the Inauguration and unfortunately, Obama said that we won’t apologize for our lifestyle. To me, this means that there will be little or no change in how Americans live their wasteful lives.

For some reason I got a very different opinion from listening to Obama’s speech. I guess we all see the speech through the lenses of our own experiences and take what we want from it and leave the rest. Here are a few passages from the speech and how I see them applying to my life.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

It gives me hope that he so succinctly summed up the problems of the USA and yet has a vision for correcting this in the future. To me, most politicians usually have one agenda to push, but Obama clearly has a strong vision of the future. I just hope he has the leadership to bring it to fruition. I also found it interesting that he made it clear that the failing economy was the result of greed and irresponsibility, but also a collective inability to make hard choices and prepare for a new age. Certainly I think we all know now that there are hard times ahead and everyone is going to have to buckle up.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted — for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things — some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

Once again, Obama indicates that the time has come for us to roll up our sleeves and get into it. People might have to start working in jobs they might previously have thought were beneath them. We will all need to consider that our way of life is not just handed to us. We have to earn it….and we have to deserve it, not just as individuals but as wealthy and prosperous nations.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act — not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. All this we will do.

Now, there are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

He has a grand vision, that is to be sure. I can see why there are many nay-sayers, but I choose to believe that grand visions can become reality. I think if a country has good leadership then many of the grassroots organisations will be empowered and will gain their own momentum. I’m certainly excited by the prospect.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world’s resources without regard to effect. For the world has changed, and we must change with it.

This is such an important point. The USA, and indeed many of the most prosperous nations have been living beyond their means at the expense of the poorest nations. Many documentaries I’ve been watching recently make this point over and over again. We can’t keep plundering the landscapes and people of these poorer nations as we seek more and cheaper stuff.

In all, I found President Obama’s inauguration speech to represent the sober reality of the world we are living in today, but also provides hope for the future. He says it’s possible to make the required changes but it will not be quick and it will not be easy. People are going to have to band together and work hard to make this happen. Although I’m not a citizen of the USA, I certainly think this is an excellent message for all Westernised nations.

Photo by: CSMonitor

Read Full Post »

2438238482_1b4a17978b

It’s inauguration weekend. As an Australian living in the USA, I have to say I am so happy to be living here and having the opportunity to experience this historic event. Truly I (and much of the world) have such high hopes for the next four years of Obama’s Presidency. I truly hope he can heal the deep divides that exist both in the USA and between the USA and the rest of the world. I also have hope that he can be the leader that the USA needs to drag the country out of the current financial mess. Lastly I truly hope that he can bring a change to the culture of the USA…a change to a more sustainable country who cares about the environment and the effects that American consumerism has on many of the less prosperous countries around the world.

So, onto some links that I found interesting this week: 

Photo by: baratunde

    Read Full Post »

    2512817215_fa4462a079

    Lately it seems I’ve been talking a lot about nitty-gritty personal finance stuff. It’s not what I had intended for this blog, but it seems that it’s what has had me pre-occupied since the beginning of the year. I need to get all that sorted out this month so I can think more about my journey towards voluntary simplicity and sustainability. These topics are very important to me, but I feel like I can’t adequately launch into them until I’ve done some housekeeping in my mind. So I’m sorry to say that there will probably be more personal finance discussions in the comings weeks. Please bear with me.

    Today however, I wanted to think more broadly. I want to talk about my dreams… the vision which drives me towards a future which is outwardly simple but inwardly rich (I’m sure I’ve taken that from somewhere, so apologies if I stole your phrase).

    Here’s how I want my life to look in five years:

    • I will be living in an Australian City which is big enough to have access to all the modern conveniences, but small enough to be close to nature and have a community minded spirit.
    • I will have a smallish home (3 bedrooms) which is free of clutter and stylishly furnished with reclaimed furniture and artifacts picked up during my travels. It will have polished timber floors and large windows which allow plenty of light and warmth into the home. The walls are white and covered in photographs I’ve taken around the world. There are outdoor living areas which flow seamlessly from the house. I imagine a deck surrounded by Australian natives which attracts plenty of local bird life.
    • I will have a large block to allow us to have fruit trees and a vegetable garden in addition to workspaces for hubby and I (a decent sized shed and perhaps a photography studio). I’d love to be able to keep chickens as well (but definately no rooster!)
    • I will be able to walk to the local park or nature reserve and cycle to a local grocery store and coffee shop.
    • I will be working part-time for my current employer and part-time on a number of business ideas I have.
    • I will have time to volunteer or be involved in community activities. I may even be studying a topic of interest.
    • I will be living as green/sustainably as possible.
    • I will have at least one child who will be cared for by hubby and I the majority of the time. I want my child to be raised with our values.
    • I will have a few close friends in the area and will ensure I visit family or have them visit us regularly.
    • I will go hiking regularly and live a fit and active life.
    • I will have the opportunity to travel overseas once per year and to take mini-breaks with the family a couple of times per year.

    That’s about all I can think of. Are there any others areas of life which I’ve failed to address?

    What about you? Do you have a dream that you constantly refer to to make sure you are heading in the right direction?

    Photo by: {Erik}

    Read Full Post »

    Older Posts »