Tuesday, October 2, 2007

Smart Money Article

In the October issue of Smart Money magazine there is a great article about people who have "cashed out" of ther 9-5 jobs. They have done this by saving a tidy nest egg and lowering there living expenses. This is a great article and I would recommend it to anyone reading this blog.

The article highlights a few different couples who for one reason or another got sick of the daily grind, focused on there savings habits and started on a life less traveled. The article mentions a few books, one of them being, Cashing in on the American Dream: How to Retire at 35. I have added this book to my amazon wish list and intend on checking it out when I get a chance.

This article is rare in my experience. Most traditional money magazines focus on traditional things. Like, working until you are 65, max out your 401K and then retire. This article really tapped into the large group of people who are interested in doing other things with there lives other than go to work in a job they don't love. Some of the people highlighted, if not all of them, took up some other type of occupation that gave them more flexibility and enjoyment but maybe not the same paycheck. However, when you are not in a desperate need for a paycheck why should it be the most important factor.

One of the themes of the article is definitely lowering your living expenses. The concept being that you don't need to save as much or earn as much if your living expenses are low. Many of the couples were traveling the wold spending lots of time in Thailand or parts of Europe where your dollar goes a little further. I'm not sure my wife and I are willing to move to Thailand any time soon but the lesson of being flexible is noted.

My wife and I currently live in one of the more expensive parts of the country. We have purchased a home hoping that this investment will pay off over the next 5-10 years. We have no illusions of trying to retire in this area. It is simply to expensive. The strategy of moving to a less expensive area is a good one and one that my wife and I plan on using. It would be nice to eventually cash out of our higher priced home by moving to a less expensive one in a different area of the country. Maybe even renting again...
Below is most of the article from http://www.smartmoney.com/cover/index.cfm?Story=october2007

NO, IT'S NOT your imagination: You're working too hard. Bucking the trend in most developed nations, the American workweek has been growing longer. We put in an average of 1,815 hours a year — longer hours than even the Japanese, who have a word, karoshi, for people who die from overwork. The extra labor often translates into bigger salaries and more-secure retirements, but it also pours fuel on a fire as old as work itself: the dream of cashing out early.
While there's no way to quantify how many of us are eyeing the exits, evidence suggests that more people are taking the idea seriously. Books about early retirement are steady sellers, and virtual communities of would-be escape artists thrive on the web. Fortunately, it doesn't take an enormous nest egg to fund a life-changing move. We interviewed financial experts and early retirees to find out how to get out while you're young.
SUPER SAVERSNext May, Jay Arnold of Nashville, Tenn., will retire from his position as project manager at an auto maker — at 43. His wife Corinne has already left her job. They've got two young children, but they're not fazed: they've been saving aggressively for two decades. "Debt-free before our first child? Did it," says the confident Jay. Their secret: Supplementing their management-level salaries with part-time, self-employed work. They saved 30% of their take-home pay; after they paid off their house in 1998, they bumped that rate to 50%. The fruit of their labor: a savings hoard that's approaching $2 million.
For more tips on how to save for and make the most of an early retirement, plus tips on taking a buyout, turn to the October issue of
SmartMoney Magazine.

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