F.I.R.E (financial independence retire early)

[boyee]

Hi, I am a member of the F.I.R.E. community in the States.  For those that are unfamiliar this group is mostly made up of a husband and wife team who are sick of the rat race career latter and  consumerism lifestyle.  We follow blogs like "mr. money mustache" who teach us about frugality.  In a nutshell, we tend to be younger (30's and 40's), educated, live in cities and have middle income careers.  We live on less than 50% of our income so we can  invest the rest .  Usual in tax deferred buckets with low cost index funds.  The goal is to save enough money to reach our Financial Independent number or FIN.  Usually based on the 4% rule.  That is to have enough money in the bank and live off of 4% withdrawal rate.  Or simply figure out how much you need per year and multiply that number by 25.  Same thing.  Once we reach our FIN, quit job and enjoy life.  The idea is since we are used to a frugal lifestyle during our working years we stay frugal during our early retirement years.   This brings me to this forum.  I figured my FIN can be smaller if we retire outside the US.  It seems to me many folks here are living off a fixed pension.  I wonder if anyone here is living off their savings instead and utilize the 4% rule?  Maybe they can shed some light as to what a good FIN should look like in the PI?

 

Bo

[stevewool]

Living frugal for one person is never going to be the same for some one else .

If you have a young family thats  going to be hard, but i am sure you have covered all the figures for your future life where ever that may be.

Myself i am not retired yet and i will not be able to claim my state pension for another 7 years, so when the date for us to say sod it we are off it is going to be my savings and the rental coming from my home here in England.

I would like to class myself as frugal but others may think i am a tight git, but i dont want to live life after i retire thinking i cannot afford  this and that and so go without many things , but also i dont want to throw money away on  things that i do not want either, i just would like to live a simple but safe life doing everything i have ever wanted to do and have the money to do them all, what is that amount well its enough for our needs i am sure .

[Clermont]

Many on this forum have talked about how much money do I need: well I look at it this way, age when you retire + ready cash on hand, divided by amount of years left in you that you expect to live, say 85, then that is your budget, + a pension if your eligible. Nothing simpler than that, after all you can't take the change with you when the pearly gates open or old Nick does his calling.  

[Mike J]

2 hours ago, boyee said:

It seems to me many folks here are living off a fixed pension.  I wonder if anyone here is living off their savings instead and utilize the 4% rule?  Maybe they can shed some light as to what a good FIN should look like in the PI?

I think you will get better input if you can give members an idea of what life style you want to live here.

How large is your family, what age are your children, will they attend public or private school?

Where do you want to live and what amenities?  Large city, smaller city, province?

Do you intend to assist and/or help support extended Filipino family here?

What type of housing -  Nipa hut, mansion or somewhere in between?  House or condo?  Will you rent or buy?

Outside interests, travel, etc.

Is you wife Filipina, if yes is she dual citizen?  This will impact your choice of visa.

Depending on where you live, are you comfortable with public transportation or will you need a private vehicle?

 

 

 

[Old55]

I’m aware of the 4% plan and variations of it as part of a retirement plan.

If you’re asking a FIN number for Philippines 🇵🇭 as others have said it’s up to your expectations. We have members here who live a very simple basic life on a budget of ~$800 USD a month. Many Filipino families live on half that or less.

A very general lowest number would be about $1200 USD a month. For sure that’s my opinion others will differ.

[boyee]

Mike J and Old55.  Thank you for asking specifics.  I like the 4% rule because your nest egg never decreases.  Although it requires a larger nest to start with.  Although we are very frugal now during our investment phase.  We hope to make up for that in our no work phase.  The pic is old so daughter will be done with school.  My wife is Native born so she will get duel citizenship for land purchase.  We would like to live in the province on 1-2 hectares.  Large house with ya-ya.  Others have suggested to rent first just in case it does not work out although it seems to me paying cash for property makes more sense long term.  I'd imagine our largest expense would be air con and ya-ya fees.  We would travel in ph often but would look for lowest rates of course.  We'd have a van and driver unless I am brave enough to drive my self.  No need to support wifey family, they are mostly middle class in Manila.   Although they are so cool I'm trying to convince all of them to build a house on the property.  I'm closer to them than I am to my own extended fam.  Other than a somewhat expensive home with live in help and occasional traveling we wouldn't spend much on fancy restaurants or shopping.  Obviously more than $1200 per month but maybe less than $3000 USD?  Hope that helps.

[Old55]

A budget someplace between $2000 and $3000 month out in da Provences IMO would be much more reasonable.

What is your idea of "A somewhat expensive home"?

Rent or buy is a whole other topic. For sure rent at least a year or more most Expats would agree.

[Tukaram (Tim)]

The main reason people say to rent for a year is to make sure the area meets your needs. There is very little resale market here. When you buy it, you better plan on keeping it for a long time. As others have said your budget is up to you. I know guys here that live on well under $1,000 a month, and others on $4,000 a month.  Personally I recommend between $1,200 and $1,500... but that is me...  Right now my wife and I do ok on $800 a month. But I am still over a year from my first retirement (been here almost 5 years).

In the US I was  a single dad, raised 2 kids, owned a house & car in Texas, and we took annual week long vacations to Orlando every year (and numerous short vacations a year). I only made $3,000 a month there.  The only way I could imagine spending that much here would involve a lot of drinking and party girls ha ha

[boyee]

I was thinking $100,000 for the land and $300,000 for the house.   3,500 sf house

[ClearSky]

Congratulations on your choices. We have done similar and more or less followed the advice of this guy Dave Ramsey for some time. It results in something similar to what you tell, although sounds like you got with it earlier in life . You could find some jealous ppl, so just beware.

IMO, as young as you are, 3.5% is really safe. I think it is possible going forward to get into trouble on 4%. To think/plan for the future look about 4 generations back in time as that is about the cycle of things. The 3.5 or 4% rule doesn't work for some generations and for others 6+% was ok.  For sure what has worked for the immediate past generation is not going to for us. Then to think of the kids, usually kids don't exactly follow the parents example and teaching. Sometimes they do better, sometimes they need help.

As for the cost of living, it doesn't matter where the money comes from. There are a lot of threads already in history on costs of things. So just figure out how much you need to live each month or each day... and then separately how to get that money. It sounds like you have plan for how to get it already. So the info on how much to live is what you need. To do that you will list (yourself) all the items you need and then figure how much they cost. Sounds like you have been doing budgets for some time now, this is nothing different.  Folks on this forum know what most of the things cost.

If you decide to buy a house and or property really take your time. The legal landscape works much differently. For example the way you verify a title is to PERSONALY go the the relevant registry of deeds and check on it. If it is an existing house, the house might have a different title or tax dec than the property. Each can have there own issues. Don't be afraid, just be really careful.  Many times ppl that need to leave quickly for one reason or another will sell something nice for a low price.  If not in a hurry can end up with a great deal.  Maybe rent in an area for awhile and watch for one of the great deals.