One of the biggest criticisms of the FIRE movement is how we can’t possibly know if this financial strategy will work in 30-50 years, given all the unexpected calamities that life can throw at us. We’ve lived through 5 bear markets now through the past 7 years of retirement, but will that continue working in the next 10, 20, or 30 years?
Short of having a crystal ball, there’s no other way for us to see what the future holds…
Or is there?
Today, I have the pleasure of welcoming Akaish and Billy to the blog, a couple who FIRE’d before the acronym FIRE was even a thing. Hell, this was before ETFs was even a thing and they still managed to retire at age 38 and travel the world for the past 30 years! So needless to say, reading about their story was like looking into the future.
Here’s an even bigger shocker: they did it without having the so-called pre-requisite 6 figure salaried STEM jobs. Back in 1991, Billy was a French-trained chef turned portfolio manager (he got a job offer in finance from one of his restaurant customers) and Akaisha was a restauranteur, managing the restaurant they co-owned. They lived in Santa Cruz, Calif and owned a home. Even though on paper, they were living their dream, they were burned out and hardly had time for each other.
While managing his clients’ retirement portfolios, he had a lightbulb moment, realizing that if they sold their house, cars, downsized their lifestyles and move somewhere inexpensive, their $500,000 net worth at the time would be enough for them to retire. His clients had lower net worths and were still able to retire, so he figured, why not us?
So, they retired early and started living aboard on $20,000/year. This was before the 4% rule was popularized by the FIRE movement, but they’ve found throughout the past 30 years this was the appropriate withdrawal rate for them.
Now, 30 years later, their expenses have only inflated to $30,000/year but their portfolio has doubled to $1M, despite continuing to draw it down in the past 30 years.
Knowing that they’ve lived through many bear markets (especially 2008) on this portfolio, I’m super curious about what their 30 year retirement has been like, so without further ado, here’s Akisha and Billy:
You retired at 38 in 1991. This was before the FIRE movement even existed. How did you have the courage to know you weren’t making a huge mistake?
RetireEarlyLifestyle: The short answer is that we allowed no room for failure.
We are both independent individuals who traveled solo before we met each other.
Our 6-month trip to Europe in 1979 found French-Chef-trained Billy working in a Restaurant on the island of Isle de Re, France. We traveled throughout France in search of Michelin 3-star restaurants to sample these fine foods in order to know first-hand, what French gourmet food was all about and to examine the culture of famous chefs.
One memorable meal was at Eugénie-les-Bains with Chef/Owner, Michel Guérard, inventor of cuisine minceur. Our dinner for two with a split of wine came to $279.00. Today that is the equivalent of $1,159 USD. It was an amazing experience!
We returned home to Santa Cruz, California with $104USD in our pockets, no jobs and no place to live.
Akaisha talked her previous boss into hiring her again, and meanwhile, Billy searched that tourist beach town for a restaurant to buy. On December 18, 1979, we purchased our restaurant with “no money down” and some creative family financing.
We were 27 years old.
We had 15 employees and were completely in debt. The restaurant business is a very difficult career choice and we were forced to mature quickly.
To make a long story short, after running this business for a decade and Billy becoming a stock-broker-manager of the most profitable office in the Dean Witter Brokerage Corporation, we left the conventional working world January 14, 1991.
We were 38 years old and the S&P 500 Index was 312.49.
This decision of ours to FIRE (unexpectedly) rocked the world of everyone we knew.
Throughout our lives we took calculated chances and FIRE-ing in 1991 was just one of them.
2) Were ETFs even around back then? How did you invest?
RetireEarlyLifestyle: A catastrophic event in our city shut our restaurant down for a week, and it was at that time we decided that we needed another source of income. This is when we began to invest in the stock market.
We bought Exxon stock every chance we could. Mutual funds were around but no ETF’s. Eventually we sold the stock to purchase our home and looking back this was a bad financial move.
If we knew then what we know now, we would never have sold that stock to purchase our house.
3) What was your portfolio allocation when you retired?
RetireEarlyLifestyle: We were 100% long S&P 500 Index. We projected our portfolio to increase in value yearly so that we could pull our expenses out and still have growth. This has worked well for us.
4) Has your investment strategy changed in the past 30 years?
RetireEarlyLifestyle: Yes, as we have aged we started moving into some dividend ETF’s like DVY to increase our cashflow. Today, including our Social Security, we are roughly 50/50 growth to income and between dividends and Social Security covering our expenses, we can let our portfolio grow.
5) You went through some pretty scary stock market crashes like 2008/2009 while retired. How did you make it through with your retirement intact?
RetireEarlyLifestyle: Let’s start with the crash of 1987 where the market fell over 20% in one day. We survived. We also survived Y2K. The market downturn of 2008/09, is when we used this opportunity to move from the Index 500 mutual fund to DVY and into SPY and VTI. There is no doubt over the time that you are invested, markets are going to pull back. This is why we recommend a few years of cash to live on so you are not forced to sell in a declining market.
6) You started with $500,000 in 1991 when you retired and your portfolio has grown to $1 million, despite withdrawals, not working, and going through 2008. How did that happen?
RetireEarlyLifestyle: We utilized the power of Compounding and Geo-Arbitrage. We had enough cash to get through this 2008/2009 period and spent more time in countries with lower cost of living and a weaker currency than the USD. The S&P 500 Index has returned 10.36% annually since we began our adventure. We spend a fraction of the 4% rule, which was not yet invented, thus our assets have far outpaced inflation and spending.
Did you work on any passion projects after retirement?
RetireEarlyLifestyle: In 2005, fifteen years after we had been FIRE’d, we wrote our first book The Adventurer’s Guide to Early Retirement, A Common Sense Approach. It came out on a CD-Rom as that was the best format at the time for a digital book. Once again, we were on the cutting edge, this time for E-Books.
We now have a full ebook store on our website, RetireEarlyLifestyle.com.
Our retirement has been full of volunteer projects like Billy importing an electronic scoreboard from the USA for the gymnasium in our adopted town of Chapala, Mexico. He also built 2 new tennis courts in the city park of Cristiania.
Akaisha has taught English as a second language in Chapala, and taught the locals how to do Thai massage.
We are huge advocates of utilizing volunteer work to help others improve their lives. Sometimes we teach a useable skill or guide them in learning the language of finance.
8) I find it fascinating that you’ve been travelling the world for the past 30 years and you did it before Airbnbs, Uber, or even smart phones! Has your travelling style changed over the years?
RetireEarlyLifestyle: In “the old days” we’d lug around Lonely Planets and Rough Guides in our backpacks. We’d arrive in town without reservations and simply look for hotel rooms.
Now we do research online, book online, utilize Uber and love Google maps.
But we still ask hotels for a discount when we stay several nights and, in some locations, we have enjoyed monthly rates in higher-end hotels.
Also, because we have been traveling for over 30 years, we like a little more comfort today than before. We take first class buses, get premier seating on planes, and stay in more upscale hotels.
It only gets better.
Even today we have not yet used an AirBnb. We find them too restrictive to lengthen or shorten our stay. We like to be free to go when we want to go…
We had so many questions for them that this interview turned into a 2-parter, so stay tuned for the 2nd half of this interview next week, where we’ll find out what are they doing about the two biggest worries in retirement: healthcare costs and housing.
In the meantime, be sure to check out Billy and Akaisha’s blog RetireEarlyLifestyle.com
Hi there. Thanks for stopping by. We use affiliate links to keep this site free, so if you believe in what we're trying to do here, consider supporting us by clicking! Thx ;)
Build a Portfolio Like Ours: Check out our FREE Investment Workshop!
Travel the World: Get covid-19 coverage for only $45.08 USD/month with SafetyWing Nomad Insurance