Retiring Early – Or How To Go To Taco Bell and Save Half A Million Dollars

February 1, 2010

We have been asked frequently how we were able to retire as early as we did, at age 55.  Especially now that so many people have lost a considerable portion of their retirement savings in the current economic downturn, one asks the question of how in the world we can retire at all, let alone retire early.  The only way most of us can do this is to increase our bottom line so that we will have enough to live on when retirement time comes.  The thing to keep in mind is that there are two ways to increase your bottom line.  One is to make more money, something that the present economic situation is making more and more difficult.  The other, the one we so often forget, and the one that we still have some control over, is to spend less.

I never had a super high paying job.  Pikun, my wife, mostly had part time teaching jobs so she could take care of our two boys. So we were basically a one income family.  And unfortunately, no one died and left us with a chunk of change.  But we were able to save enough to retire early by being very careful with our spending.  And “time” was the secret ingredient.

For example, if you save $10 when your wife cuts your hair, that’s nice.  If you do it every month for 30 years, that’s a lot of money.  If you take your lunch to work you might save $5.  If you take your lunch to work every day, 200 days a year, for 30 years, then you are getting closer to retiring early.

Below is a list of 10 things we did that saved us more than half a million dollars. I have given very conservative costs and savings amount as you will see.  Still, the total savings number at the bottom surprised even me.

If you keep your eye on your goal and don’t spend what you save, you’ll be able to leave that 9 to 5 world sooner than you think.  And if you modify your lifestyle just slightly you’ll be able to do it without ever feeling that you are forgoing all the good stuff in life.

1.  College costs

My children went to good state colleges close to home.  The difference between a state college and a private college was about $15,000 per year at the time.  Depending on which private college you look at, the difference could be much more today.  Both boys graduated with no college loan debts.

For 2 children at $15,000 apiece for 4 years

Savings: $120,000

2.  Living at home during college

Because the children went to local colleges they were able to live at home.  We agreed that if they wanted to move out and live in off-campus housing that they would have to find jobs and pay for their own expenses, which they both willingly did by the time they were juniors.  It had the added benefit of helping them to learn independence earlier than they would have.

For 2 children at $10,000 apiece for 4 years

Savings: $80,000

3.  Car costs

In our life together we have never bought a car that was less than 4 years old.  We chose carefully when buying a used car so we had minimal extra car repairs over all the years.  We always had two cars.  We used to say “Our new car is 13 years old – so is our old car.”

Over our 30 years we bought 3 cars each for a total of 6 cars.  The difference (between a new and a used car) was about $15,000 each.

Savings: $90,000

4.  Auto insurance

Because we owned older cars all we needed was minimal liability insurance instead of full coverage.  You want to steal my car?  Go right ahead.  No one ever did.  They were too busy stealing our neighbor’s new car.  The difference in insurance costs were at least $100 per month for each car. We had 12 payments a year for each car for 30 years.

Savings: $72,000

5.  Pay the house off early

It is amazing how much you can save by paying a little extra each month on a 30 year mortgage.  My mortgage was $750 per month.  We paid the mortgage off 15 years early and saved $135,000 in payments.  To see how much we saved we need to subtract the $80,000 extra in payments that we made.

Savings: $55,000

6. Vacations

Over the years we went on many nice vacations, Mexico, Costa Rica, Hawaii, Italy.  But most years we would take car camping trips around the country.  It is difficult to be closer as a family than for all of us to sleep together in a small tent.  And we also saved lots of money.  The difference between going on a big vacation and car camping or just staying at home was about $1,750 each.  And we did this for about 20 years.

Savings: $35,000

7.  Lunches

A simple way to save a bunch of money over the long run is if you have really tasty leftovers that you can take to work for lunch.  We occasionally ate out with our coworkers but we usually made use of that most important piece of office equipment, the microwave.  The average savings at lunch time was about $5, and my food was much better than what I could have gotten outside.  There are about 200 work days a year and I took my lunch to work for 30 years

Savings: $30,000

8.  Haircuts

My wife worked really hard at learning to cut our hair and she became quite skilled.  I learned how to trim her hair.  A haircut costs $10, though you can pay lots more if you want.  Pikun and I cut our own hair for 30 years (for a savings of $8,640) and cut the boys hair for 20 of those years (for a savings of $5,760).

Savings: $14,400

9. Alcohol

When my first son was born I decided to give up alcohol.  That was a personal decision but it also saved me quite a bit of money over the years.  On a normal week (non holiday, non football, non boys night out week) I would buy at least 3 six packs of beer.  At $3 a six pack (cost of cheap beer) for 52 weeks for 30 years the savings added up.

Savings: $14,040

10.  Miscellaneous Savings

Video rentals (instead of going to the theater)

Six movies a year viewed on video instead of going to the theater, at $15 (cost of ticket, parking, popcorn, etc) for 4 people for 20 years.

Savings: $7,200

Transportation to work

For ten years I biked to work or took the bus even when I could have driven my car.  Parking was about $2 (I figure that the bus fare and gas costs cancel themselves out).  I did this for 200 working days a year for 10 years

Savings: $4,000

Eating Out

I have been to many good and fancy restaurants in my life.  But my favorite restaurant is Taco Bell, an American fast food, pseudo Mexican joint.  My wife and I love it and it is really cheap.  Let’s say that the differences between Taco Bell and a more expensive restaurant is $20.  Let’s say we substituted going to a “real” restaurant with Taco Bell only 5 times a year for each of the 30 years (in reality it was lots more often than that).

Savings: $3,000

Total savings over 30 years: $524,640

Non-quantifiable things we did

Here are some things we all can do but we can’t put a savings amount to.  Doing them saved us probably more than all of the above.

Don’t make any big mistakes.  Don’t make big investments in things you aren’t sure about.  Diversify your portfolio. Cut your investment risks as you get older.  We lost almost nothing in the last economic downturn since we had been out of the stock market for over a year.

Keep healthy with exercise, eat fresh foods, watch your weight, check your blood pressure often.  If you aren’t sick you aren’t going to be paying doctor bills.

Any extra money you get (pay raises, gifts, tax returns, government stimulus checks, etc.), save it instead of spending it.

We refinanced the house twice.  Each time we took the extra money the bank gave us and used it to remodel or upgrade the house (instead of paying for a new car or a fancy vacation, see above).  It really paid off later when we went to sell the house.

We always spent less than we had and never once in 30 years did we pay a credit card interest payment because we always paid off the card in full.

I always wanted, and dreamed of having, a nice big luxurious RV, with captains chairs, satellite TV, fake lawn that we could roll out when we stopped for the night, telescoping living rooms.  I never bought one.  But I occasionally still leaf through some of the brochures.  If I had ever given in and bought the RV of my dreams I would still be working at my office desk dreaming of retirement.

Most important of all, even though marriage and raising a family can be super stress producing, don’t even think of getting divorced if you want to have any hope of retiring early.  With lots of effort, and maybe a little professional advice, you can probably work out most of your problems, because if you do get divorced, all of the savings tips above will be a waste of time.  You’ll probably never have enough to retire, and retiring early will most likely be out of the question.

My hope is you will be able to retire when you want to.  Be frugal and keep your eye on the prize and you’ll be able to make that dream come true.

You’ll have to excuse me now.  Pikun is calling for me to get a haircut.  And then we have a date for Taco Bell.

Note:  If everyone took up my lifestyle then the country would be in perpetual recession.  But Taco Bell, Netflix, marriage counselors, and used car lots would be doing a booming business.

9 Responses to “Retiring Early – Or How To Go To Taco Bell and Save Half A Million Dollars”

  1. John said

    This is great information. How are you fairing saving in Chiang Mai! Have you found ways to cut costs while living here?

  2. I’ll write something in the future on costs of living here.

  3. tourist2010 said

    After all those years of saving and living frugally do you find yourself continuing to live that way in retirement?

    Do you plan to spend all that money you’ve saved over the years on yourselves..traveling or eating out more or buying “toys” for yourself, hiring a servant, getting massages or having someone else cut your hair…. or do you plan to pass it on to your children after you are gone?

    Money is, after all, just like stored energy. You store it now so you can use it later.
    But if you DON’T use it later and pass it on to your kids, is it really worth all the years of living frugally?

    For example, would you spend more on yourself now if you knew that the alternative would be to pass your inheritance on to your kids… who would then use it to buy a new car or a vacation home, or eat at fancy restaurants or buy expensive clothes…all the things that you didn’t get to do???

    Saving can be an addictive habit.

  4. […] For many though, it isn’t the money that keeps them from leaving the 9 to 5 existence.  Some just love the work they do.  I did.  As a computer consultant I loved my work.  But when my contract at Boeing got “outsourced” (Remember when that was all in vogue?) to India, I checked my bank account, saw that I had “enough”, and decided to leave corporate America for good, and nine years ago I “retired”. (See how I saved enough here.) […]

  5. EJW said

    After my divorce 11 years ago, I was living on unemployment while making house payments and with one teenage daughter at home. No savings and no job. What a way to start over! My ex let me buy his share of the house. We owed just as much as we had when we bought it. The bank figured it was better to let me stay. I gave my ex $8000 (figured the house was worth $16,000 more than we owed) and sent him on his way. I saved and saved until the stock market wiped out half in 2008. Well, I recouped my losses eventually but stopped saving. Started spending money like mad–until last year–got it out of my system I guess. Ironically, after those 11 years I figure that if I sell my house, my car and some of my antiques, I will have a quarter of a million dollars minus some taxes. However, I am still afraid to pull up stakes and make that big jump. This, in spite of the fact that I have lived all of my adult life abroad, starting in the Peace Corps in Korea, and the last 30 in Sweden. I guess it is that fear of, once I make that decision, it is hard to go back. I also don’t have a partner to share the decision with. So, I am wondering. How do older single ladies fair in and around Chiang Mai? I know that in some cities in Mexico, there are large populations of single expat women who get on quite well. I get the impression, though, that Thailand appeals more to men. Any opinion would be appreciated.

    • There are a number of retired Expat women here in Chiang Mai but you are right in thinking that Thailand appeals to men a lot more. Here is what I observe a lot of. Older guys, many who have had difficulties with relationships in their lives, come to Thailand with the express purpose of finding a mate. There are lots of younger woman available here who are more than willing to let an older foreign man, theoretically with lots of money, take care of them and their families financially. The older man gets companionship, sex with a woman the likes of which he would have no chance with back home, and many hope, someone who will take care of them when they get older and aren’t so good at caring for themselves anymore. It is a fair relationship in many people’s eyes, except that from what I have seen both parties are usually quite disappointed – the guy maybe not having as much money as the woman expected, and the women maybe not as faithful and the relationship not as long lasting as the guy had expected. And they are usually “shocked” when they find this out.

      So what does that say about a woman’s hopes of finding a companion (of the opposite sex) here? I myself like older women, and I am married to a 63 year old woman. Of course we have been married for 40 years now. The pickings aren’t great. But on the other hand there are lots of good Expat women around for friends. My website lists a number of Expat women’s clubs ( Drop them an email and see what they have to say. Good luck on your retirement.

  6. Hi ,
    I just found your site a couple of months ago, and have found it quite informative.. I met my Thai wife Dec 5 2009, and I knew in 10 min. that she was the one? Well it was pretty easy, as her nails were not painted, she was wearing flip flops with holes in her jean, she could drive standard shift , had her own car, had a sugar cane farm with her parents, and could tie a load down on her truck as good as myself.. fast forward.. I am getting to my question.. We arrived christmas eve in NH 2011 ( K-1 visa) So for the past year she has shoveled snow, Taken ESL courses, and shoveled more snow, cut and split many cords of wood, got her NH drivers license, planted beautiful veg. Garden, and continued to cook me fantastic thai dinners. And never a complaint ! Well I have just been contracted to work in Singapore for 2 years, ( I worked in Sing 2006-20011) the problem is that she can not stay with me full time, as she must be in the US more than 6 months/year or jepordize her Green card and citizenship. So she will stay with me 2 months, than go back 3 months to US, or a variation for the next 2 years,, than we or I retire 1/2 time in Thai and 1/2 in NH . Of course we could ditch the US Citizenship, but i figured as I am 30 years her senior, that having a citizenship could be of value to her after I am long gone? Even though that is questionable with the political climate.. I am rambling.. On one of your post you indicated that you did the Flea market with Thai products, so as I am looking for activities for her when I am gone, I wanted to get an idea what kind of products you sold? Surongs” or buddas?? any ideas would help. Also any suggestions for this predicament would be great,, although in reality it is really not so bad

    • Hi Ivan,

      A friend of mine and his Thai wife just finished up doing what you and your wife plan – so many months in the U.S. for a number of years to qualify for citizenship. They are back now and they have done the time and she will be a citizen once she get back. So the system does work.

      As for selling things at outdoor markets and flea markets, go with your gut feeling. If the item is something you’d be interested in buying then maybe you should try selling it. The problems with selling at markets are 1. You have to know when and where the markets are (thee are guides you can buy for this), 2. You have to transport you good to and from the market (good car, van, or pickup), 3. You have to set up, and break down your stall (after buying a tent, tables and chairs, etc.), 4. There stuff like sales taxes to deal with, 5. And market fees. Sometimes these are one day events, sometimes multiple day events, sometimes weekend markets.

      Best to get some books on selling in markets and talk to someone who is already doing it. My wife and I did it for 4 years and later it began to get to be too much physically for us. We started off very slowly with just about break even money, and later made enough per week to survive on, but only so. I would say that one person alone doing an open air market stall would be quite difficult. And remember, outdoor markets, especially in the northeast where you are, will have a very short selling season.

      Hope it all works out for you.

  7. […] able to save enough to retire early in a blog post from 2010 (when I was a strapping 65 year old), Retiring Early – Or How to Go to Taco Bell and Save Half a Million Dollars. The moral of that story is to keep your costs down and be frugal without denying yourself basic […]

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