Journal of 25 y/o American retiring to 3rd world country

[almostthere]

@ JeanPaul, since you are open to hijacking, I suggest you read up a bit in the three types of craving or desire (tanha in Pali) in Buddhism. The first is craving for sensual pleasures. THis is the craving for a chocolate bar, to look at a beautiful man/woman, etc. This is what most people associate craving with. The second is the craving to become. I didn't know this one existed until the last year or so. One manifestation of this is ambition. Your desire to progress is another manifestation. It feels like a hunger (without the empty stomach feeling) or thirst in terms of its sensations in the body. That's the reason we often refer to ambitious being people as being 'hungry'. The moments of contentment I have had in retirement have been those moments when this desire subsides for some time. Those were moments of true 'freedom'. Unfortunately this craving to become in all its guises is extremely strong and persistent. It is even considered an admirable character trait in the world, but it leads to enormous suffering.

(The third type of desire is desire not to be. Its not so relevant to the discussion but since I brought it up I thought I'd mention it.)

[JeanPaul]

We're really getting into Eastern philosophies here! Definitely interesting stuff, although it's funny that striving (Craving 2) and consumerism (Craving 1) has reached its highest form in those Eastern societies.

That was truly amazing and educational. It seems to me that you are essentially putting together a list of one way tickets that just happen to be the cheap options from one airport to the next and substituting bus routes where necessary and feasible.

As someone that always saw tickets as essentially round trip that is really an eye opener.

One last question, which countries in S. America have straighter roads for long bus trips? I don't do well on curvy roads for long trips.

For long bus rides, avoid the poorest countries and the Andes. Bolivia is terrible - mostly unpaved roads, often at the edge of cliffs, drinking drivers (they banned alcohol while driving, and the bus drivers went on strike... and won!). We were driving from the south of Bolivia to Uyuni and took a pee break by the side of the road. As everyone went out to find their bush, we saw into the driver's compartment of the bus - there were 4 guys drinking beers, listening to music, and having the time of their lives! But the north of Peru, south of Brazil,Argentina, Chile should be fine.

My example flights aren't quite just one way trips combined, since if you bought the flights separately, they'd be much more expensive. But in Europe, it's usually literally that, since the budget airlines sell everything as one way trips. A clever example of combing one-way trips, yet still coming arriving back where you started:

Vuelo 1 Madrid-Oslo 18/mayo - €29

Vuelo 2 Oslo-Los Ángeles 20/mayo - €161

Vuelo 3 Los Ángeles – Honolulu 29/mayo - €161

Vuelo 4 Honolulu – Sydney 05/Junio - €200

Vuelo 5 Sydney-Manila 09/Junio - €136

Vuelo 6 Manila – Dubai 20/Junio - €114

Vuelo 7 Dubai – Sofia 22/Junio - €55

Vuelo 8 Sofia – Madrid 23/Junio - €50

http://www.elviajerobuscon.com/?p=2456

[JeanPaul]

Just a quick update - I'm settled in Berlin, after touchdown on September 17th! (spent a couple months over the summer in California) I'm in Neukölln, the new hip frontier for artists and young people, taking over from Friedrichshain, which took over from Kreuzberg, which took over from Prenzlauer Berg, which took over from Schöneberg etc. - Berlin changes quickly! I moved around a bit at first, with a 2 week AirBnB, then a 1-month sublet, but this apartment is through September. Rent is within my budget - it's €550 ($584) per month all-inclusive (electricity, gas, water, internet). In comparison, Lima was 1600 soles ($474) all-inclusive, and Madrid was €525 + costs, which ended up around €625 ($663). It's a Turkish neighborhood, so food is cheap - €5 Vietnamese or Thai meals, €2 kebabs, cheap fruit and vegetable markets.

We had our house-warming party on Friday. I made a whole duck for the first time, basting it with a sauce of balsamic vinegar, honey and orange juice, and it was quite a success, sweet and crunchy skin, rich meat. Ended up with 13 people coming, but only 2 Germans, which highlights the difficulties in learning German in this city. It is incredibly international, and everyone speaks English. Often, even in a group with some Germans, there will be people who speak no German (despite maybe having lived here for 3 years), so the conversation ends up in English. In Peru or Spain, of course, learning Spanish is a bare necessity, since no one speaks English. But I've been doing one on one exchanges and insisting in groups, and my German is coming alone well - definitely comfortable in most 1 to 1 conversations now, and I can watch the Simpsons in German now without missing anything important, although certainly many of the subtler jokes.

A bit scared of going outside now, due to the cold, but fortunately, there is stuff nearby. On Sunday night, went to a free Courtney Barnett concert a few blocks away (fairly well-known Australian artist who made top 20 in the US). They have a "Berlin Live" concert series for this French television channel, so there are free concerts fairly often (four in the last two weeks) right in the 'hood. Typical Berlin venue, a gay club that was an old factory or warehouse, with giant pillars, peeling paint etc., but pretty good sound (has to be, since they are recording it). Unfortunately, it was the first cold day, and first snow of the year, and also happened to be our first time waiting for about 45 minutes in line outside!

Then last night, there was a Couchsurfing meetup, also a couple of blocks away. i went and ended up talking to this 23-yard old American who was interrogating me about Early Retirement, and how he could force himself to come to some kind of travel epiphany and ditch the unsatisfying corporate life. Also got a bit into the recent tangent in this thread about fulfillment and the like.

My sister was supposed to be joining me in January, after she graduates from college in December. She worked at a tech company over the summer, but decided to turn down her full-time offer of $108K + 10K bonus + 40K stock/3.5 years to come be a bum with me in Berlin instead. As big a fan of retirement as I am, not sure whether that was the right move - can't retire before you work at all... However, I hear from 3rd party sources that in January she's booked a flight to Australia instead! She's always been scared of the winter, but hopefully she'll come right after. She wants us to create some kind of video game together when she's here. And my girlfriend wants the three of us to do a project together, so maybe I'll be busier than I imagined.

So far I've been liquid enough to avoid selling any stocks low, so still feeling pretty good, despite the market retreating a bit from its peak. I'm still significantly over where I started three years ago.

[Kriegsspiel]

I just read through your journal again yesterday, glad to see another update from you. I thought Berlin would be a great place to live in for a while, there's so much to do there. I went up there for a concert (at Huxley's Neue Welt, pretty close to you I think) and a walk about and was really impressed. Great choice!

[sea]

The information you posted about flights is very helpful. I'm thinking about doing something similar for an upcoming trip where I fly into France or Holland and then go to Germany and the Czech Republic and back to the US. I hadn't thought about looping back to my original destination, so I'll have to see if that would be more economical. Thanks for the information!

[JeanPaul]

Yeah, I'm one Metro stop from Huxley's Neue Welt. Berlin really does have a lot to do - the variety is what's most impressive. it's a cheap city and a rebellious open-minded city, so people are doing everything imaginable, pretty much. Of course, there's a lot of electronic music and hedonistic clubs and stuff like that, but it's quite a small aspect (if you want it to be).

[JeanPaul]

Well, the big news is my sister is living here as well now, which is a lot of fun! Since she's not working either, I always have a playmate during the workday which, even in Berlin, can sometimes be light on activities. At the beginning her plan was not to work, because she wanted some time for artistic endeavors. But then after 1.5 months traveling in Australia, she was already getting restless, so she started looking for a job. But she got discouraged when she realized that in the US, a top CS degree gives you real value, while in Germany they care more about experience and specific skills, plus salaries are far lower in general. It's cheap here, and money is not her main concern, but she doesn't want to be doing website design or simple mobile apps, which is what she's mostly seeing, since Berlin is all about web start-ups. But just as she she had given up applying, she got a call-back and an interview, which reinvigorated her. So I may lose her to the working grind at some point.

My German is coming along pretty well - I actually just did a TV interview in German, in which I think I was reasonably eloquent, although I mangled some genders out of nervousness! And in day to day stuff like renting apartments or going to the doctor, I feel perfectly confident now. Keeping up my Spanish as well, since I do a fair amount of Spanish-German language exchanges (Germans already know English!), and I'm in a Spanish language book club.

Despite the horror stories people tell about Berlin housing, it was very easy for my sister to find an apartment (nearby in Kreuzberg) - she actually got the first place she visited. Which is fortunate, because we're going to have to look for our own apartment soon - we're getting kicked out, and have to move between July and early August. That will be almost a year already (time flies!), but looks like we are planning to stay a bit longer, since my girlfriend enjoys her job and wants to save up a bit more, plus my sister is here.

And i actually just got another apartment recently - for my parents! Having their entire brood in Berlin inspired them to rent their house out for two months and spend a week in New York, then come to Europe. I sublet a nice apartment for them here for one month in north Neukölln, (690/month with everything, better than a hotel!) about a 15 minute walk from both my and my sister's apartments. The rest of the time (and some of that month), they'll travel around, to Scandinavia (they're taking advantage of flight deals, so arriving in Copenhagen), north Germany, the Black Forest, Bavaria, Poland, etc. Obviously we'll be doing a fair amount of that with them, which will be nice, since we I haven't been traveling a whole lot. Besides a brief trip to Hamburg, and Spain over New Year's, we've just gone to Warsaw over Easter, which isn't a bad town - people are very friendly and it has surprisingly good food (compared to German or Czech cuisine!).

As you may have figured out by now, there's nothing I enjoy more than planning my retirement, and there's some new cost-of living data out there on the internet which seems really good. Expatistan now has a section for "Monthly rent for a 45 m2 (480 Sqft) furnished studio in NORMAL area" and this has proven much more accurate than Numbeo for my purposes. Even though I always get a 1-bedroom apartment, for my three data points, the prices are uncannily accurate

For combined rent and utilities:
Lima: Actual: €434. Expatistan: €459
Madrid: Actual: €625. Expatistan: €662
Berlin: Actual: €550. Expatistan: €627

And I would even agree that our deal is particularly good in Berlin.

I'm actually a bit surprised by how accurate it is - I thought it would vary somewhat between 1st and 3rd world countries, since in Europe, we feel safe in any part of the city, so we live in the cheaper, hipster part of the downtown, while we only would have felt safe enough to live in 7 of Lima's 42 districts. and in fact ended up living in the most expensive district of all, hardly a "normal area." But I guess it's sort of self-correcting, because people entering price data on a site called Expatistan are a more selected sample in a third-world country - they are not living in the favelas.

Of course I went on a binge of checking prices, and it was very encouraging. Basically outside of the US and major world capitals, almost everywhere is affordable - Kyoto, Japan for example is just €619, cheaper than Berlin, Florence, Italy is €621 (meanwhile, Detroit, MI is €817 - there's something wrong with rents in the US!). And other possible destinations in Asia are amazingly cheap - Chiang Mai, Thailand is €197, Penang, Malaysia €198, Taichung, Taiwan €253. After a year there, I could even afford to spend some time in the US...

My girlfriend has applied again to be a professor at the University of Namibia (would start in January), and her chances look pretty good this time, so I am also excited about that (but €412 for rent and utilities looks prohibitively expensive compared to Asia!)

[nitelight]

I really like the way you are doing FI, I want to do FI this way too. What I like the most is that it should shorten the time to FI significantly. Thanks for sharing your experiences !

[JeanPaul]

I really like the way you are doing FI, I want to do FI this way too. What I like the most is that it should shorten the time to FI significantly. Thanks for sharing your experiences !

Yeah, and I think I underestimated at the beginning how practical it really is (and perhaps my title scares some people). If you are from California or Norway or the UK, you don't have to move to a 3rd world country to save many years of working - even major world capitals are drastically cheaper, and 3rd world prices are to be found in 1st world countries, with 1st world infrastructure and security, like Southern Spain or Taiwan

[Ydobon]

I think 'developing world' is the preferred term, 3rd world is quite offensive to anyone who lives in a country where median incomes are lower than the US. Which is pretty much everywhere

Source: working for a major development agency in the olden days...

[jacob]

@Ybodon - It's a cold war term. The 1st world was NATO countries/alternatively market economies. The 2nd world was Warsaw Pact countries/alternatively communist economics. The 3rd world was everyone else/alternatively other forms of government. I know that "developing" has become the PC standard but in some sense it's almost more offensive and quite normative at that too implying "not yet fully developed into a market economy".

[JeanPaul]

I actually haven't done a precise accounting of my retirement until today, but today I decided to take a look, and it's a bit worse than I expected.

In 39 months, I've spent approximately $29800, or about $763/month. Obviously this exceeds my $667 target. Fortunately, I've also picked up a little bit of extra cash along the way, about $3600 (mostly about $1650 from AirBNB and $1620 from online poker). So my net expenses have been about $670/month, almost perfectly on target. My expenses for a normal month were always well below this, so it's a little disappointing. Obviously there are extra travel expenses, but in many case these were offset with AirBNB. Anyway, it's hardly a tragedy, but it would be a little more comfortable with a slightly greater margin. Unfortunately, I neither play poker nor rent with AirBNB at the moment, so if anything it's a bit tighter.

My net worth 39 months ago, when I started this thread, was $193,000 - now it is $191,500. That means my investment gains were about 23,700, or about 12.3% total. This is also not a great performance, considering that the US market has risen a lot in that time. However, my investments have always been skewed away from the US, with quite a bit in emerging markets, which have been pummeled. I don't regret that allocation just because of hindsight, though - I still feel like it is better to keep the US as a smaller part of my portfolio. Obviously spending 4%/year and returning about 4%/year, I almost broke even, but long-term returns average better than 4%, so I still feel confident.

[Kriegsspiel]

I came across this quote and I thought you'd enjoy it:

Another successful low-rent city is Berlin, which is now Europe's capital for contemporary culture and its most exciting bohemian youth city. Low rents in Berlin stem mainly not from deteriorating infrastructure, but rather from previous overbuilding relative to current needs. Berlin was once Germany's leading economic powerhouse, but the Nazis and the Communists wrecked the place. It is a city built to be a business capital but is no longer anything close to a business capital. That means overbuilding and that means lots of things are remarkably cheap, at least by European standards. It's easy to rent an acceptable apartment in a non-peripheral part of Berlin, not too far from a subway or streetcar stop, for a few hundred dollars a month. Food too is much cheaper than in the rest of Western Europe.. There are many thousands of people in Berlin simply living on low rent, to "get by." It's the ultimate slacker city.

- Tyler Cowen, Average Is Over

[JeanPaul]

Well, the next step is finally taking shape! We're leaving Berlin on December 1st, meandering to Madrid via Thessaloniki, Georgia and Italy (the four flights for a total of 65 Euros!) over the course of a few weeks, spending Christmas and New Years in Spain with my girlfriend's family (including her sister, who's coming in from Peru), flying to California in mid-January (180 Euros, 1-way), spending a few weeks with my family, then heading off to Asia!

Where exactly in Asia, though, is still up for grabs. Basically, there are two overarching possibilities - 1) Spent a year in one place, as before, 2) Spend 3-4 months in 4-5 difference places for more like a year and a half. I tend to support option 1, while my girlfriend supports option 2, or even more extreme, spending just a month or two in different places.

Option 2 makes sense in Asia because I think that, even in a year, it will be hard to really integrate, since the languages are much more difficult, the cultures much more different, and appearances much more distinctive. A year as a quasi-tourist would be too much, so exploration of different places would be more exciting. Plus, it's hard to find anywhere in Asia with bearable weather for the whole year.

Costs are generally low in Asia, so the main variables are weather (avoiding excessive heat, humidity, and monsoons), language, and variety of cultures. Our general shortlist of places is:

Penang, Malaysia
Taichung or Kaohsiung, Taiwan
Kochi or Trivandrum, Kerala, India
Chiang Mai, Thailand
Kyoto, Japan
Hanoi, Vietnam
Busan, Korea
Bandung, Indonesia

Even though each of these places has at least a few unbearable months individually (especially in summer), by spending shorter chunks in each place, I can design a pretty solid weather year (although many places in South America are better, just staying in one place):

Average low and high, hours of sunlight, inches of rain
January: Kaohsiung - 67-75 degrees, 175 hours, 0.6 inches
February: Kaohsiung - 62-77 degrees, 166 hours, 0.8 inches
March: Kaohsiung - 67-80 degrees, 187 hours, 1.5 inches
April: Kyoto - 48-68 degrees, 175 hours, 4.6 inches
May: Kyoto - 57-76 degrees, 181 hours, 6.3 inches
June: Kyoto - 66-82 degrees, 138 hours, 8.4 inches
July: Trivandrum - 74-86 degrees, 150 hours, 7.4 inches,
August: Trivandrum - 74-86 degrees, 167 hours, 6 inches
September: Trivandrum - 74-87 degrees, 173 hours, 6.7 inches
October: Chiang Mai - 72-89 degrees, 202 hours, 4.6 inches
November: Chiang Mai - 67-85 degrees, 216 hours, 2.1 inches
December: Chiang Mai - 60-84 degrees, 254 hours, 0.6 inches

The language issue is one I haven't quite been able to resolve, though. On the one hand, I do want to learn a language. However, there are two problems - the languages are much harder than European languages, and if we move around, I won't have time to really learn enoughg.

1) I could just say screw it, and stick with English - in India and Malaysia, English is a lingua franca, and in touristy places like Chiang Mai, it's obviously easy to get by with it.

2) Another option would be to learn Malay - it's one of the easiest languages in the world, written with a Latin alphabet, without tones, declensions, gender, conjugation etc. And it's quite useful, spoken by 200+ million in Malaysia and Indonesia. Still, that would probably require spending a year between Malaysia/Indonesia, which my girlfriend is not a big fan of.

3) Most obvious option would be to learn Mandarin - I could learn it in Taiwan, where it's the official language, Malaysia (where 40% of the population in major cities is Chinese), and practice everywhere in the world, since there's no shortage of Chinese. The problem is, I think it might just be too damn hard. It's not so much about the difficulty of learning to speak it well, but of speaking it mediocrely. Japanese, for example, is equally hard to master, but if you can hack out some pidgin-Japanese, putting simple words together with lousy grammar, you will be understood. The same is not true for Chinese, because of the tones - pidgin Chinese is simply incomprehensible. So at the moment I'm trying out studying a little Mandarin, to see if I think it's realistic.

Anyway, I've never even been to Asia, so I welcome any wisdom, whether about places to live, languages, etc! Has anyone else here retired to Asia?

[BRUTE]

the weather is probably not going to be that bad. yes, it gets hot and humid in the rainy season, but it's not unbearable. especially if JeanPaul doesn't HAVE to go anywhere like work.

language wise, yea, most of them are way harder than any European languages. brute has heard that to even achieve basic fluency (i.e. hold a 2 minute conversation, not just say the names of dishes and streets) takes at least a year in the tonal languages.

brute would be interested if JeanPaul achieves the cost of living he mentioned above in some of those places. in brute's experience, these places are 3-4x more expensive unless living without AC or hot shower, 2h one way from anything interesting, and already fluent to negotiate a price.

[JeanPaul]

OK, that would is worrisome, but important to know, since 3x-4x would be too expensive!

But from what I've seen, just glancing online for several minutes, prices really are low enough - e.g. http://www.mudah.my/Eden+Seaview+Middle ... 842334.htm
Negotiable list price is 310/Euros per month for a reasonably modern-looking 800 square foot place with AC, an ocean view, pool, gym etc. in one of the fanciest parts of Penang. Still more expensive than I said, but it's bigger, plus I wasn't looking for cheap - that was just a random selection from the first page of listings. The difference between 300 and 200 is pretty insignificant to me, anyway.

But Malaysia is already a developed country, so maybe the minimum standards are higher - which countries do you have that experience with? I would imagine apartments would be fine in Taiwan and Japan as well.

[Viktor K]

I double majored into Chinese in college and I can confirm it is very difficult compared to Western languages. The tones are the biggest difficulty, coupled with the regional variations. Some Chinese people couldn't even understand others from the next city over from ours. My girlfriend and I stayed only 6 months which made the biggest difference in my proficiency. Before China? My pronunciation was embarrassing even to my classmates. But after China my Chinese would last long enough in a conversation for the locals to suddenly assume I was fluent and take off speaking at break-neck speed, leaving me wide-mouthed and shaking my head.

We were also surrounded by English-speaking teaching assistants and of course my girlfriend and I only spoke English. That may have more or less of an effect on you. I think you'll benefit from the fact that the locals around you won't speak much English and you're used to learning different languages by this point (so you may have already worked around being surrounded by people who you don't need to speak the foreign language with).

Also, my girlfriend didn't know any Chinese when she went. She studied up, knows pretty much all the words I do, but didn't have much face-to-face practice, so her Chinese proficiency is still pretty low.

Everything about that language is hard, though. The tones are most killer, of course.

[BRUTE]

oops. brute had assumed those figures in the post above were for total cost of living for a month. for rents, they seem just about right, maybe a bit on the cheap side.

[UrbanHermit]

Hey JeanPaul, I've been following your journal since the beginning, and it's been a great read, thanks for not letting it slip into the archives like so many others (mine included, heh).

The Peru chapter was interesting in an adventure-travel kind of way, but not something I would seriously envision for myself long term. The recent details with budgets for Berlin however, have really got the wheels turning. I have more than enough cash to swing that, and there's a lot of Eastern Europe I haven't seen yet... :)

One thing I'm curious about: you're 3 years into ERE now and have been relatively settled in Berlin for a while, what does your day-to-day look like if you don't mind sharing? Are you actively working personal projects, hobbies, or side businesses, or just chilling? When you start the next leg of your journey in December, do you have any side-projects planned to work on as you go, or do you find the act of travelling involving enough to occupy your entire focus?

[Noedig]

Epic journal: you have done so much, and made some interesting and very independent choices. You certainly pulled the trigger early. I have an expectation that you will end up finding some other way to make money as your posts convey an awareness and opportunism in that direction.

Keep on feeding details, to those of us accumulating our escape funds: it provides vicarious enjoyment and a promise of the life to come. All the best to you.