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Subject:  Retire Early & 4% Withdrawal Date:  3/2/2021  10:45 AM
Author:  tjscott0 Number:  101515 of 102797

At age 38 (1991) Billy and Akaisha Kaderli walked away from their jobs to travel the world. They had $500,000 in net worth. "I calculated our portfolio extracting 4% per year, with our first year withdrawal being $20,000." Twice, 2000-2003 & 2008-2009, their net worth halved. Their current net worth has increased to 373% ($1865330)of original net worth.

Again, this exercise is assuming that we were 100% invested in the S&P 500 Index through the entire market cycle, and that we withdrew 4% annually.

Today we have a more balanced portfolio. Our actual spending has been much less over the years*, so there is room for us to kick it up a bit. Maybe 5%?

The net worth value on the chart, is the amount after pulling out the 4% spending figure on January 1st of each year and illustrates the effect of compounding though these decades.

Generally speaking over these last 30 years, we have been utilizing Geographical Arbitrage, living in cost beneficial countries such as Guatemala, Mexico, Vietnam, and Thailand, thus positively affecting our numbers. The Peso-to-Dollar exchange right now is a great deal, making Mexico seemingly on sale.

We kept up a travel schedule in the Year of the Pandemic, adapting to changing regulations. When others chose to remain in place, we saw opportunities in bargain flights and empty hotels. We visited four countries on two continents.

In January we flew to Colombia, returning to Chapala, Mexico. Throughout the year we made six trips to our favorite beach, Chacala. Billy had a shortened trip to Guatemala due to COVID closures, and one trip to Puerto Vallarta was cancelled. Akaisha visited the US and then we flew and bused between Puebla, Cuernavaca and Oaxaca, only to return to Oaxaca a couple of weeks later. Billy flew to Puerto Vallarta then taxied up the coast to Sayulita and once again to Chacala.

Because of this great exchange rate, the year before we traveled from Chapala, Mexico to McAllen, Texas, Las Vegas, Nevada, Prescott Valley, Arizona, more travel through Mexico to Chacala Beach, Puerto Vallarta, and took the ETN bus to Morelia, and Patzcuaro.

We also enjoyed a much anticipated train ride through Mexico's Copper Canyon did some extensive traveling in the Mexican Highlands, visiting the cities of Tepatitlan, Atontonilco El Alto, Jesus Maria, and Arandas, tasting some of the best tequilas in the world.

We continue to self-insure for health care, taking advantage of medical services in the countries where we stay. Now, since we are 68, we qualify for Medicare and no longer need to take out a Traveler's Health Insurance Policy from World Nomads to cover our time in the USA. A few years ago at age 62, we decided to begin taking our Social Security. Billy has made some adjustments to our portfolio using ETFs which allows him to buy and sell in real time, and take advantage of market downturns, as well as market upswings.

House sitting from time to time has helped with housing costs.

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