Who doesn’t like the idea of retiring early? Financial independence means the freedom to do what you want, when you want. Even if you love your job and plan to work through your 70s and beyond, the financial insights offered by early retirees can be helpful.
Meet Billy and Akaisha Kaderli. They retired 27 years ago, when they were both 38. At the time, they were living busy lives in Santa Cruz, California. He was an investment manager while she managed the restaurant they owned. They were successful, financially secure — and they hardly saw each other.
When he was 36, Billy started researching the idea of early retirement and, eventually, Akaisha agreed to give it a try. They reduced their spending, and started carefully tracking where their money was going. Two years later, the Kaderlis, who don’t have children, sold just about everything and hit the road. They’ve been traveling the world ever since, generally staying a few months at a time in countries such as Mexico, Thailand, Laos and Guatemala.
Their experience with early retirement may help you figure out how and when to retire. We talked with them via Skype from their current home base of Chalapa, Mexico. Our Q&A has been edited for clarity.
How much had you saved when you quit working?
Billy: About $500,000.
How are your finances doing now?
Billy: We have more money in our account after spending and inflation than we did when we started.
What’s your advice for people who want to retire early?
Billy: My first response is to track their spending to see what they are spending today. If you don’t know what you’re spending today, you won’t know what you’re spending tomorrow. We track it by day, month and year. We have a spreadsheet that allows you to see what percentage of your net worth you’re spending on a daily basis. That lets us monitor that to make sure we’re well within our range. So my No. 1 suggestion for “how did we retire early” is we tracked our spending for a couple of years before we actually retired, and we saved like the dickens.
It kind of becomes a game. The first few weeks and months, [the spending] bounces all over the place, but as you add more data the numbers stabilize. Then you say, “I’m going to go see if I can spend less today than I did yesterday.”