When I got into the world of early retirement, my original plan was to retire in 7 years at the age of 35. After 2 months of experiments and research, I drastically updated my plan. Instead of 7 years, I decided to retire in 2 years and 8 months. That means, I'm going to retire before my 31st birthday. This plan is very extreme, but doable. I could retire at 31 or 32, but why not 30 just for the sake of it? I want to be able to say "I retired at 30". I know it's a silly reason, but if a silly thing motivates me to achieve a goal, it's worth it.
There are several key factors that make this plan possible.
When I look at my expenses, obviously the largest one is housing. Since I just moved from $1,500 mansion to $500 apartment, I didn't think about it too much for a while. But as time goes on I began to question whether or not I want to keep paying this. So I decided to buy a house.
You can buy a house for $30,000 or less in Japan. Even if I overestimate the monthly cost to be $200(for property management fee and tax), that's $300 cheaper than my current rent. I'm thinking of buying a villa in Izu. You might think villas are expensive right? How can a house with a large garden in a quiet place be cheaper than a normal house in a noisy neighborhood? I'm still amazed by this. Here is the reason. Izu used to be famous for villas. Back in 80s, many people bought a villa. Now the economy isn't as good as before and the population is shrinking rapidly, there are too many villas and not enough people willing to buy.
I seriously considered this option before. So why did I moved to Kanagawa? Well, I didn't have enough money for down payment. But there are a couple other reasons.
First, I had been living in Tokyo for 3 years, and I wasn't sure if I could completely move onto a new lifestyle. If I ended up going to Tokyo even twice a month, that would cost me $80, and I had to endure the long train ride. Luckily, I have only been to Tokyo once since I moved. And that was just to change my address for my investment bank account. This old-school bank required me to go to the branch to change address, which is so insane. I have to sell the property soon so that I will never have to deal with the stupid bank. Sorry for the rant. The point is, I have no reason to go to Tokyo anymore. I have some friends there, but I don't miss them much.
Second, I did not think I could live in the same place for more than 5 years, let alone 10 years. Ever since I left my parents' house at 18, I never lived in the same place for more than 3 years. Buying a house only makes sense if you live in it for quite a long time. So what changed my mind? When I think about what I want to do with my life, The first thing that comes to my mind it to create things. It was music when I was young, and now it's programming. I'm also interested in writing a book, creating an illustration, and making a game. None of this requires any physical materials. All I need is a computer.
Finally, the biggest reason was that I wasn't sure if I could find enough single women to date with. As I wrote in the last post, this is no longer an issue.
The contract for the current apartment ends in 10 months. Until then, I'm going to accumulate money and mentally prepare for a new lifestyle.
I've always been super frugal when it comes to food. Recently I have taken my frugality to a whole new level. There are several grocery stores in my area, so I went every one of them and took notes of the price of various grain products. It turns out that one of the stores has the lowest price for every grain product. Here is what I found:
|Price per meal(cents)|
What surprised me the most is how expensive rice is. We Japanese primarily eat rice, so I never questioned it. Sure I would sometimes eat other things, but I never get tired of eating rice. But looking at this result, I stopped buying rice. I'm never going to buy rice, at least until retirement. Am I going to miss it? Sure. But I'm sure the transition will be easier than becoming a vegan.
As you can see, somen noodle is the cheapest by large margin. It takes only 1.5 minutes to cook, so it even takes less gas to cook than pasta. Somen is not something you eat every day. Usually we only eat it in summer. But I'm going to challenge myself to eat somen as a primary grain food.
Adding vegetables, oil, sauce and seasonings, one meal should cost less than 65 cents. I only eat twice a day, so the monthly food expense will roughly be $39. That's way cheaper than my initial estimate, which is $150.
This is becoming a game to me. I find joy not in eating fancy food, but in eating cheap food.
This is less significant than the first two, but it's worth mentioning. Why? Because just like housing and food, haircut is a recurrent expense. It's what you should pay attention the most.
Recently I bought a brand new iMac for $2000 because my 4.5 year old macbook was overheating and I couldn't use it without cooling it with a cold towel. It was killing my productivity. I considered linux or windows, but I stuck with my favorite OS. It's expensive, but it's only one time purchase, and I use it more than 12 hours every single day. I cannot compromise the quality of something so essential to my life.
Compared to a computer, I don't care too much about the quality of haircut. Cheaper the better. I used to pay $45 for an expensive barber, and I switched to a popular $10 cut barber called QB house. That's huge reduction, so just like housing, I took it for granted. But I pushed myself to think hard about the value of haircut. Is this something I want to keep paying for the rest of my life? Technically I can cut my own hair. It's not going to be as good, but it gets the job done. And I can do it whenever I want. QB house might not be available around a new place I'm going to live in, or the price might go up. So it's not just about saving $10 a month. It's about self-reliance. It's about eliminating an uncontrollable variable. The less you rely on products and services, the more you simplify your life.
I'm going to watch some YouTube videos on haircut and try it tonight. Let's see what happens.
Here is the updated estimates of my expenses.
|Internet & cell phone||$63|
This is the best case scenario in the future, but less than $500 is definitely possible. Assuming the safe draw rate is 4%, the total asset you need to retire is $500 * 12 months * 25 = $150,000. Wow, this is laughably small!
So that's my plan! I'm really excited about retiring much earlier.