Tag Archives: financial independence

Turquoise, blue and emerald

Fish beneath our Feet: A week in Bora Bora

After 10 years of tirelessly toiling everyday, we sold our business. As a celebratory vacation, we decompressed in Bora Bora for a week. It was like no other vacation we’d taken before.

Bora Bora

Bora Bora

After our jet sat down, we immediately boarded a boat that reminded me of something George Clooney would be cruising along in while visiting Venice.

Retro Boat

Retro Boat

In short order, we arrived at the Four Seasons hotel. It was no ordinary hotel. In fact, our home for the next week was a self-contained bungalow with sections of glass floor where fish swam beneath your feet.

Over water Bungalows

Over water Bungalows

We spent our days on the water. Mastering a Yolo board, sailing, swimming with sharks, or jet skiing.

Yolo

Yolo

Cameron mastering a watercraft

Cameron mastering a watercraft

Each morning we would wake up and take a dive into the ocean from the balcony of our over-the-water bungalow.

Our morning diving platform

Our morning diving platform

Mid week, we boarded a helicopter for an aerial view of the island where you can experience the expansive turquoise, blue and green.

Turquoise, blue and emerald

Turquoise, blue and green

The grounds of the Four Seasons were immaculate as if specifically designed for postcards.

Incredible flora

Incredible flora

Perfectly groomed beaches

Perfectly groomed beaches

Manicured grounds

Manicured grounds

A week came too soon. As we watched the sunset of our final night in paradise, I began to reminisce of how it all started 10 years earlier — with a dream of retiring early and enjoying lifestyle freedom while we were young and energetic enough to enjoy it.

Sunset in Bora Bora

Sunset in Bora Bora

I can’t believe we pulled it off.

About Us

Steve and Lynn Miller reached financial independence in 2012 at age 50 and now enjoy traveling, fitness, cycling, photography and lots of other hobbies.

In his spare time, Steve develops mobile apps. His latest project is an app that allows you to countdown the days to retirement or financial independence: http://www.CountUsDown.com/Retirement.

If you like this blog, you might also like Steve’s We Retired Early blog where he blogs about lifestyle freedom, financial independence, and cool mobile apps.

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How to Retire Early

I don’t normally promote other people’s books or wares but I have a friend (Bob and Robin Charlton) that just published a book entitled “How to Retire Early: Your Guide to Getting Rich Slowly and Retiring on Less“.  This book is sensational.

Sensational Book

I’ve known Bob and Robin for several years now and they are a great couple.  They retired the old-fashioned way at only 43 years old – they saved almost a million dollars in just over 12 years. And they did not have huge salaries — many of you will make more than they did during their working years.   I am not nearly as frugal as they are, but it is amazing what can be done to retire early if you really put your mind to it.

Enough said.  If you want to be inspired by a couple that bares all with a financial transparency that you have never seen before, you have to read this book.  They are fully open about what they had, how they made their money, and how you can do the same to retire early.

It is on sale at Amazon, here is the link: http://www.amazon.com/How-To-Retire-Early-Retiring/dp/1482653729/ref=sr_1_1?ie=UTF8&qid=1365809963&sr=8-1&keywords=retire+early.

Enjoy!

Odds of Becoming a Millionaire

I recently read an issue of Money magazine whose headline story was “How to reach $1 Million“.   I found it very interesting because it discussed several ways for reaching the status of millionaire and it said that the odds were one in 12.  For us mathematicians, that puts you at less than a 10% chance of pulling it off (8.33% chance sounds slightly more intimidating than one in 12).

A Million Dollars is not what it used to be

According to Money magazine, the main outlets for becoming a millionaire are from real estate, owning and selling a business, investing, climbing the corporate ladder, and becoming a super saver that lives on beans and rice, water and nothing much more than that.

I meet people all the time that have dreams of retiring early, making their own way and living the good life.  I think the biggest things that keep them from their dream is fear and risk of failure, so instead of pursuing their dream, they play it safe.   My wife always says if it were easy, everyone would do it.  She’s right — it takes lots of hard work, sacrifice and resilience.   So let’s talk about 3 strategies:

  1. Risk mitigation
  2. Realizing your fears
  3. Sweat equity

Risk Mitigation
So how do we mitigate risk?  First, identify the risk(s).  For us, building a new software business without any outside funding carried the risk of running out of money from being unprofitable which meant we would not be able to carry on.  To mitigate that risk, I continued software consulting as I was building the business — that brought in the required cash flow needed to fund the business until it was self-sustaining.   Even as Lynn did our company financials, she worked outside of our company to help fund our cash flow.

Taken at Shell Island, Panama City Beach

Realizing your Fears
We get freaked out about all kinds of stuff.  What happens if I don’t make it?  What happens if the economy tanks?  What happens if someone sues us?  Fear is not a bad thing — it keeps you in check and helps you make hard decisions.   The best way to come to grips with your fear is to plan for the worst case.

  • What would have happened if our software business model was wrong and unprofitable?  I would have went back to consulting and been just fine.
  • What happens if the economy tanks?  Well, it did in 2001 and 2008 and we came out fine.  We did it by refocusing and leaning out our expenses.   We even sold our larger house and more expensive cars, replaced by a smaller house and much older (paid off) cars to lean out our expenses — so that we could plow more money into the business.  That’s the commitment level that’s needed.
  • What happens if someone sues us?  We had good contracts in place with each of our clients and we owned an umbrella insurance policy to protect our personal assets from this type of risk.

Sweat Equity
As my wife says — if it were easy every one would do it.  It’s true, it takes a lot of really hard work and sacrifices.  When times were lean, we did more of the work rather than sub-contracting it out.   At times, we did our own marketing, Google search engine optimization, website design and refresh, programming, and helped with sales.  We renegotiated contracts for better rates, reduced our expenses, and kept laser focused on our daily cash flow and financial statements.  When times were good, we banked money to prepare for the rough patches.  All of this took much more than your normal 40 hour work week.  But we always celebrated our successes and spent quality memory-building vacations with our kids.

So how much is enough to retire?
Most people are not sure about how much it takes to retire.  It’s really a simple formula and depends on how much you need to live on from year to year.  You can figure it out from 2 different angles:

  • Do I have enough now to retire?  Take the amount you have saved up and multiple it by 4% and then by 5%.  That gives you the range you can live on because to ensure that you won’t have to work again, you need to keep your expenses within that range of spending per year.  If you had $1 million, that means you could spend between $40,000 and $50,000 per year and should not run out of money.  A million dollars is not what it used to be, but I know many early retirees that are living on that level of income without any hardship, travelling constantly and are enjoying life to the fullest.  Don’t believe it? Check out http://www.RetireEarlyLifestyle.com — Billy and Akaisha retired at 38 years old and are now in their late 50’s and live a very exciting life on less than $40,000 per year.
  • How much will I need to retire?  Figure out the amount you need to withdraw per year and multiple it by 20 and then by 25 and that gives you the range ($40,000 per year times 25 equals $1 million for the conservative range and $50,000 times 20 gives you $1 million for the slightly aggressive range).

Conclusion
Don’t let fear rule your life.  Create a plan, list and manage the risks, and move forward.  As an aside — I found a really good website that explains investing in layman’s terms.  It was written by early retirees Kevin and Valerie Cooper: http://coopsecondact.wordpress.com/investing-101/.  I hope you find it helpful.

About Us
Steve and Lynn Miller reached financial independence in 2012 at age 50 and now enjoy traveling, fitness, cycling, photography and lots of other hobbies. In his spare time, Steve develops mobile apps. His latest project is an app that allows you to countdown the days to retirement or financial independence: http://www.CountUsDown.com/Retirement.