Role Models : Financial Samurai

Here is a kindred spirit who blogs about his successful Early Retirement Journey.  The blog is called Financial Samurai and it covers Sam's journey from the financial industry into financial independence, and eventually early retirement.  

The blog again is focused on a US based retirement model, since the author is US based.  However, I still find several of the thoughts and strategy (if not actual tactics) to be relevant in the Indian context.  

It does sound like Sam derives some post-retirement income through work on his website, and royalties from a book that he has written.  However, for all practical purposes he is retired.

Read on, and derive encouragement from his story.  You are not alone!

Early Retirement in India : Extreme Style

Previously I had published a blog entry about one of my role models Jacob Lund Fisker.  Jacob is the driving force behind Early Retirement Extreme, a philosophy of living in general that espouses the concepts of simple living, aggressive savings, and an overarching desire to become financially independent as quickly as possible.  Jacob's also published a book about his early retirement experience that is a must read, if you can get your hands on it.  Now a lot of the examples that Jacob cites in his book are relevant only in the US, and would sound very out-of-place in India.  So I always looked upon his thoughts as more of a vision and guidance, than as specific steps to follow to reach my own financial independence and subsequent early retirement.  For example, Jacob suggests that instead of using a dryer to dry your laundry, you could "air-dry" your clothes after washing, to save on electricity.  Well guess what! none of us in India can benefit from this wisdom, since we all hang our clothes out to dry in the sun anyways.  There are several other examples like this one, which led me to believe that there isn't really much that we can takeaway here in India from Jacob's lifestyle and early retirement experiment.  However, recently I had some time to review several of his blog posts on Early Retirement Extreme, and here is something thought-provoking that I came up with.

There is a particular post on his website that is very relevant to us here in India.  But before I get into the specifics of the post, here is a little quiz question for you.  Which is the more expensive country to live in?  India or the United States?  Which country has the higher standard of living? India or USA?  Which country has the stronger currency, and where do you expect cost of services and general cost of living to be higher?  India or the US? 

If you answered the US for all of the above, you are no different from me, and a million other folks.  You naturally assume that since the US is the more developed country, and since the standard of living is higher there, the general cost of living (in Rupees to make it a fair comparison) should be much higher in the US.  So basically the salary or income that you get here in India, will never be sufficient to live in the US, right? 

WRONG!!  Here is a very very interesting post from Jacob that walks us through, in great detail, how he manages to live in one of the more expensive places in the US (the San Francisco Bay Area) for only $7000 per year.  That's right, you read it correctly, $7000 PER YEAR ONLY.  Convert that into Rupees assuming $1 = Rs50, and you get Rs3.5L PER YEAR expenses to live in the USA.  Now the San Francisco Bay Area is pretty expensive to live in, and it would qualify the same as living in one of the major metros in India.  In fact, if anything, the cost of living there should be much higher than it is here in any major metro or Tier 1 city.  However, Jacob for over 10 years, was able to live for only $7000 per year, or Rs3.5L per year, which in turn is less than Rs30000 per month. 

Now of course, even Rs30000 is a lot of money for the average Indian to earn per month in India.  However the point here is that it IS possible to significantly reduce your expenses to extremely low levels.  If it can be done in a high consumption economy like the US, then surely it can be done, in a much more aggresive fashion here in India.  This thought is the basis of my goal to save about 85% of my take home salary.  I have stated this goal before, and after re-reading Jacob's post, I am now even more committed to it.  Are you with me?

Early Retirement Extreme : Jacob Lund Fisker

Jacob has put together an extremely well written blog detailing his path to achieving early retirement at an accelerated pace.  You should browse his writings here at Early Retirement Extreme -The choice nobody ever told you about.  Here is a short synopsis:  Jacob got his PhD in Theoretical Physics by the age of 25, and then worked for 5 years in the US.  During this time, he saved upwards of 75% of his income, and invested it wisely (though not necessarily with great success)  At the age of 30 he was done with the rat race, and by 33 he had completely retired.  Some of his suggestions (like eating frugally, basically eating only one type of canned food) are very extreme, but then that is the entire thesis of his blog.  He has several other suggestions on frugal living, some of which I agree with, and several that I do not.  Jacob also does not have any kids, so that makes his situation very different from mine.  I think planning to retire early, when one has kids to take care off and raise poses some unique challenges that he wouldn't be aware off.  Finally his current lifestyle seems to be a little on the "edge", with a high risk medical insurance strategy, and extreme frugal living

In any case, his determination is what makes his early retirement possible, and there is a lesson to be learned there.  On the other hand, I postulate that his extreme approach is not necessary in the India context.  Our environment in India allows for a moderate lifestyle without incurring significant expenses.  I will try to provide some insight into how we plan to achieve similar savings goals as Jacob, without necessarily living a life as frugal as he did/does.

Early Retirement : Philip Greenspun

Who the heck is Philip Greenspun?  Well Phil has a PhD from MIT, has started several successful businesses, seems like an extremely articulate and witty guy, has his pilots license, and most importantly retired at the young age of 37.  If you'd like to read up more about him, here is where you go: Philip Greenspun on Early Retirement

Retire Early and Travel

Now that I have become "more involved" with my retire early planning, I have come across a lot of material out there, about people who have already trudged this path and taken the plunge.  I love reading about these "case-studies" as it helps to fine tune my own thinking.  One more such example is about Warren and Betsy, the folks at Married with Luggage.  They have retired at the age of 40, and plan to travel around the world.  They also document all their expenses here.  I think the learning for me here is (1) It is important to make a plan and then put in all my energies to execute to it (2) It pays to be methodical, particularly when it comes to documenting expenses (3) It helps to be internet web savvy.  You can churn out a lot of good material, if you are very comfortable with the medium. 

Retire Early Lifestyle

No discussion about early retirement can be complete with mentioning Bill and Akaisha Kaderli.  They could in some sense be considered as the pioneers of the early retirement lifestyle, both of them having retired at the young age of 38, back in 1991.  They currently blog their travel and retirement adventures at their Retire Early Lifestyle web page.  Take a look at it, if you are short of motivation.

Early Retirement : A kindred spirit

Here is a very interesting blog about a guy (and his family) who are living my early retirement dream.  Many of his examples and thought processes are very "American", but the basic concepts are the same, as some of the thoughts that I have. 

Hoping to get energized by his example, and pick-up a few tips along the way.

MMM