Can you Retire on $250,000 Dollars?

Can you Retire on $250,000 Dollars? post image

Ever wonder about people who step foot in some exotic destination and never come back? It happens all the time– the SCUBA instructors, the yachties, the bar owners, the beer drinkers, the criminals, the naturalists, the internet marketers, the retirees.

Bob is many of the above.

Bob started started a career with a high school education. 35 years later he had a great job at a little company that probably made the software you are using right now. He managed people, made 6 figures, and did relatively interesting stuff.

Bob was married for close to 25 years, but after a long haul they started to drift apart and have problems. In 1995, Bob got a divorce. Bob’s and his wife’s life savings were split in half.

Fast forward 5 more years and Bob lived alone in an apartment. His career was going well. Bob had a decent management job and $250,000.00 in the bank.

Not bad.

Of course, Bob was getting tired, and his life was more than just a little boring, but he plowed on. What else to do? If Bob played his cards right he could retire in another 10-15 years, ditch his office clothes, and play more golf.

Then life threw Bob a curve ball, or a high fast ball, depending on your perspective.

In 2000, Bob’s company set up an office in Manila. They were starting to outsource to the Philippines. He was invited to a team building retreat which landed him on the island of Mindoro in the Philippines.

Mindoro is a damn fine spot to land.

During the 2 weeks of meetings and festivities Bob had the time of his life.

He ate BBQ, played paint ball in the palms, told stories, went SCUBA diving, and floated in crystal clear tropical waters. Bob made more new friends in one week than he had back home in one year.

Bob talked to the folks who had retired here in the Philippines and determined he could leave his office job close to 10 years early if he lived here instead of the Pacific Northwest. It all clicked for Bob, and I’m sure you’ve heard the refrain before:

Bob never went home.

Bob called his boss and brother from the Philippines and tied up all the lose ends as best he could. Bob didn’t see the need to endure the 30 hour trip back home. He had found what he wanted to do with his life.

He did the expat math. He could live close to 15 years at a really fine level on that, plus he’d be making money in the market in the meantime (after all Bob’s life savings was invested in mutual funds) and if he did push on past 70, he could always trim his spending.

$250,000 in life savings isn’t a bad performance for a 35 year career that included a lot of ups and downs and a devastating divorce.

Of course, Bob didn’t expect the financial crisis of 2008. It got him particularly bad. After some investments in local real estate and some broadsides to securities he was advised to own, he was left with about 50K.

The situation forced Bob to get a job managing a local dive resort to ensure he doesn’t burn into the last of his savings.

The work isn’t super tough, but certainly not the place he’d hoped he’d be at his age.

So far Bob’s retirement cost him 35 years and 60K. The rest was taken by a black swan market crash that most portfolio managers weren’t expecting.

When I caught up with Bob the other day I asked him if he could go back and do anything differently if he could. He said that he didn’t want to think about it that way.

I asked what are some things that would be helpful to him given the situation. He said, more business understanding, a better understanding of the internet, and more youth.

All in all, Bob is still a happy guy, but in his own words, “I just miss my money.”


I couldn’t help reflecting on this story while David and I from semester II had an absolutely magical day here on a private beach island in the Philippines. We grilled meat, swam in clear waters, and laughed a lot. I can understand a guy like Bob taking the plunge after only 2 weeks.

Everybody will draw their own conclusions from Bob’s story, I’m not sure I’ve got any of my own yet. At minimum, it’s always worth it to ask “what am I working for?” Even if the 4 Hour Work Week where a total piece of heap (which it isn’t), it would all be worth it for convincing me to ask the question and take it seriously.

Talk soon :)



We Cooked Great Food and Had a Magical Day

We Rented this Boat and Drove it to a Quiet Beach

Published on 10.25.10
  • While you are not drawing any conclusions, I think some people may. I could easily see this as a reason for people to point their fingers and say, “See! This is why you need to continue working at your job and not pursue this ‘lifestyle design’ fad. This guy is spending his golden years working somewhere he doesn’t really care to.”

    Instead, I see it this way. The money he lost in investing could just as easily been lost while slaving away at a desk. Creating a nest egg retirement fund has wisdom, but putting all of your hope in it is not wise. I think of all the people who were at retirement age when the market shit itself the past few years and are now having to continue working jobs they’ve hated for decades. They had no bar-b-ques or paint ball games. There was no beach life that was compelling enough to migrate their lives to.

    We can live as slaves in fear of what the future holds…or we can realize that the future can affect us regardless of where we are. Yes, be wise in how you plan ahead (especially if you have a family like me), but we also need to be wise about how we are living now.

    More sad to me would be a story where Bob had loved his two weeks but returned to his job with the plans of living his retirement years in Mindoro…and then dying of a heart attack the week before retirement.

    We have one life. We’re either living it to its extreme or we are squandering it. (And yes, the “extreme” looks different for all of us.)

  • What I took away from it: figure out what you want to do and what you love as early as possible, then go for it.

    Bob could have saved $60K in far less than 35 years – let’s just say 10 years. After all, with the divorce, he put away about $500K in 35.

    So instead of 35 years of work, he’s 30 years old, living on the island, eating BBQ, playing paintball (random), and scuba diving.

    Sure, instead of a completely passive lifestyle, he’s working at a dive resort – but he’s doing what he really enjoys instead of in a cubicle wishing Monday-Friday away.

    Like David said, we have one life. Why not go after what we really want NOW instead of deferring dreams until 65?

  • brdtrpp

    I like this article. It is a good example of doing what you want, and adapting to the circumstances that life hands out. You could take the situation that Bob put him self into and say “See, that’s what wrong with this idea.” Or you could say he took a chance, it didn’t turn out the way he thought, but he still enjoys his life more now than he did.

    Any time someone says “No, that’s a bad idea.” It makes me think there might be some reasonable reason why it would be a good idea, for the right person. I would never retire to a foreign country I like my home a little to much. But for Bob he went for what he wanted and got more out of life than most people probably do.

  • Christoffer Ohlsson

    “Of course, Bob didn’t expect the financial crisis of 2008. It got him particularly bad. After some investments in local real estate and some broadsides to securities he was advised to own, he was left with about 50K.

    The situation forced Bob to get a job managing a local dive resort to ensure he doesn’t burn into the last of his savings.

    The work isn’t super tough, but certainly not the place he’d hoped he’d be at his age.”

    That’s the part I don’t really understand.

    It would seem the moral of the story could be that you shouldn’t spend your entire nest egg when you’re dependant on it when you don’t have a business sense?
    If the 250k were enough for him to live off of for the rest of his life, why did he have it invested in unsecure assets?

    It’s not the place he wants to be?
    What did he like about that place, if he doesn’t like working by the beach?

    I’d say the great moral would be to, do what you love, find out what you really love and do that now, not in 35 years.
    While doing what you love, don’t be stupid about it and make sure that if you are living off something finite.. make damn sure it can’t dissapear from you that easily.

    Or maybe it’s even easier. There is no moral, it’s just a story of finding something you like and then suffering something close to force majeure that just messes things up a bit.

    Seems to me though that he should be happy enough if he just found a job he likes.

  • I like your last line a lot! While I’m sure the job economy is nothing like it is for me here in Dallas, TX, if he doesn’t like what he is doing…do something else? There’s always the online arena so it’s not a valid excuse to me if he doesn’t like something.

    My biggest problem with the whole thing is that he made a significant life decision but based it on something that was not secure (i.e. the retirement fund being investment based). While I’m sure the poor guy is kicking himself now, it is a good lesson for any of us who seek this type of independence to be conscious of where our securities lie.

    And as a married man with 2 (almost 3) young children, this is something I find myself really conscious of. I don’t have the luxury of executing a plan spur of the moment (such as calling and saying I’m not coming back). Instead I find that I *have* to plan ahead.

    Interesting thoughts though!

  • Christoffer Ohlsson @z_ha_dum

    I feel fairly confident in guessing that you are already doing something you truly enjoy doing for a living though, yes?

    Ofcourse you have the possibility of doing spur of the moment things, David. (Maybe not that big like moving to a different country and not coming back, but that’s just a very extreme measure that didn’t turn out 100% well for him either)

  • David asked on Twitter about the moral of this story. I think Rudyard Kipling said it perfectly.

  • I would say that I have started doing something I truly enjoy, but it is not big enough just yet to be all of my income. The cool thing is the amount of freedom that comes from just changing your mindset.

    I actually want to do some fairly large scale things but will probably keep at least one foot in a secure location due to my family. My wife and I have discussed downsizing our home but still keeping one in the States while we travel for long term vacations around the globe.

    The cool thing is the adventure that comes with deciding to choose your path. I envy Bob for deciding to make a radical decision…even if the money situation tanked. :D

  • Dan, it looks like you’re going to need to start paying me as your advertising agent. ;)

  • So when are you announcing Semester 3 so i can go ahead and take that spot already! ;)

  • Dan

    You are a beast David you outrun me on my own blog!

  • Dan

    Great stuff there, he’s the entrepreneur’s phrase:

    “If you can make one heap of all your winnings
    And risk it on one turn of pitch-and-toss,
    And lose, and start again at your beginnings
    And never breathe a word about your loss;”

    Liked that.

  • Dan

    Thanks for that. Agreed this stuff is all very singular…. the Philippines def isn’t for most folks would be missing their home after a few weeks….

  • Dan

    Fo sho there is a big lesson to be learned here about our trust in the securities market, perhaps this has changed since 2008, but my whole life its been drilled in to my head that you just keep your money in a diversified portfolio for the long haul and presto! you’ll be good and make 12% a year…. i’ve met a lot of guys in the Philippines who just got wrecked because of that orthodoxy.

  • Dan

    You’ll probably be so baller that you’ll do reverse arbitrage and move to Sweden, where the dollar is weaker, because you are that baller.

  • Dan

    working working working :) !

  • Dan

    Bob’s story makes me think about life arch and luck, two things I’m really interested in. I think net net Bob’s story is pretty middle of the road, not an extreme example of success or failure, so maybe? more instructive for us younger folks …. Bob spent 35 thinking things one way then one day on a random beach, they just totally changed, then a year later, another complete change. Something awesome about that and something terrifying and something also just a little bit “meh?”…. :D

  • I am in NY for New Year’s as well, so maybe I will have to bribe you with a few cold craft beers!

  • Dan

    Bribes are totally acceptable form of conduct around here, especially when it involves beer!

  • Obrien_jeffrey

    When I read things like this it makes me wonder what I am doing with my life…

  • Dan

    I find myself wondering every day! That’s the fun of it ….

  • Guest

    Mike, you’re absolutely right.

    I have spent too much of my own life deferring things

    big mistake 

  • matt

    life is like a box of chocolate. save save save. invest wisely. spend less than u make. and get a prenuptial.

  • owen callagahn

    $250000 invested in crooks equals balance of $60000 . Now $60000 and working in dive shop. Question……. which is better # 1 $ 60000 working at dive shop. Or # 2 $ 250000 and working at dive shop. Now let me see who will i chose to answer this . Will it be a junior kindergarten student or a Harvard graduate………….. Very difficult choice ???????
    I’m going with the Kindergarten student.

  • Hyptiotes

    Life is like a box of chocolates. The outer box is well constructed and sturdy. It’s made to look like the chocolate inside is of the finest quality. When you open it, you find a few chocolates that are smashed and way too many that have some sort of fruit nougat that nobody really likes. The good stuff is picked over first leaving those nasty fruit-ones. The box sticks around longer than it should because it still has chocolates in it that nobody really likes and the taste isn’t as good as you expect. What does this mean? I guess it means that life really isn’t like a box of chocolates unless life is mostly about smashed fruit nougat that nobody wants sitting around the house longer than it should because you feel too guilty to throw out because it was a gift.

  • Inna Tobys

    No, you keep your money in gold, not 401K, not IRA, not stock market, but pure gold.

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