Frequently Asked Questions (FAQs)
Do you still have CDs? If not, what kinds of investments do you have now?
No more CDs. When we retired in 1985 we wanted something safe and easy. CDs were paying high interest, and they fit the bill. We missed a run up in the stock market, but we were emotionally comfortable.
When rates fell Paul decided that he'd enjoy taking over our investments. We moved from CDs into a more traditional portfolio heavily weighted with low-cost index funds.
Is it still possible to live on only $50 a day?
Yes. But not in Paris, Buenos Aires, New York, or London. To live on $50 a day you could choose a place in Mexico, anywhere in Southeast Asia except Singapore, small cities and towns in Spain and Portugual, or someplace like Las Vegas or Phoenix in the United States.
But the question is not if it is possible to live on $50 a day. The question is, can you live on $50 a day? What is your comfort level? What can you give up? We lived on $50 a day in Las Vegas, but others don't. They rent large apartments, have expensive health insurance, own a car, eat out a lot, and gamble.
You need to spend less than your investment income, after setting aside something for inflation and taxes. We lived in Paris in 1998 and 1999 and spent a bit more than $50 a day, but less than our investment income.
What about health insurance?
When we first retired we lived in Argentina and belonged to an inexpensive HMO. When we left Argentina in 1992, we kept our coverage just in case we had a major medical problem. But by that time, the HMO was starting to get expensive and our net worth had grown well beyond the $500,000 minimum. A year later we decided we had enough money to self insure, as long as we sought our health care abroad.
Over the years our experience is that good health care at reasonable prices can be found outside of the United States. One or the other of us has been hospitalized in Argentina, Guatemala, and France. We have visited emergency rooms in Thailand, Argentina and Guatemala. We have had excellent primary care physicians in Argentina, Mexico, Thailand, and France.
When you first retire you will probably want to include in your budget some kind of health insurance, especially if you live in the United States. But get a high deductible with lower premiums.
Remember: just because you have health insurance does not mean you will live a healthier more comfortable, more carefree life. We believe we are responsible for our health. We try to eat well, exercise, and avoid stress--easy to do when you're retired. We know self-insuring involves risks, and sometime along the way we may have to make a tough decision. We're okay with that.
Have you thought about updating your book?
Yes. We even think we have publishers who would publish the book. However, the market for this kind of book is still small, rewriting is a lot of work, and promotion is not as much fun any more. So we put a home page on the internet to keep in touch with readers and other early retirees.
August, 1999