After sharing how one man retired at age 41 with a household net worth of $4 million, I thought it would be good to share another story about early retirement from a completely different situation. This story comes from money trauma and how it is being conquered.
One of the complaints about the $4 million retirement post was that it was unrelatable. For some old-fashioned people, it was hard to imagine having two kids and a high-earning wife. While others thought only working for 14 years after law school was an unreasonably short amount of time to amass wealth.
In my opinion, working 60-hour weeks for 14 years burns you out sooner than working 40-hour weeks for 21 years. I’m also very pro-women who want kids and a well-paying career. More than half my classmates in college were women. And the managing director at my last job of 11 years was a woman who also had three children.
Whatever the reasons people aren’t able to relate to others, I love reading about how people achieve their personal monetary goals. There are always some useful nuggets of wisdom to absorb.
The following is a guest post by 38-year-old Stacy on how she overcame money trauma, left America, and retired to Taiwan with only about $600,000.
Why I Retired Early: Hated My Job
Sam has written that money is psychological. If you think you’re financially independent but do nothing to change a suboptimal situation, you’re not financially independent.
Well, guess what? When my net worth hit $600,000 last year I handed in my notice and retired. After 16 years, I never want to do online marketing again.
It wasn’t just that I was sick and tired of doing the same work over and over again. I left because I didn’t believe in the purpose of my last company.
We were selling pipe dreams online to people who couldn’t really afford what we were selling. Specifically, my firm sold $2,000, $3,000, and even $5,000 e-courses about how to live healthy lives, how to have long-lasting loving relationships, and how to get rich. We hired ”gurus” to give lessons and gave them a percentage of profits.
After you bought one course, it unlocked a “discount” for you to buy another course so you could level up. Each year, our private company made the founders millions.
Taking Advantage Of Desperation Created By Money Trauma
We targeted desperate people who had just gone through a divorce, had lost a lot of money in their investments, gotten into an accident, or had an illness. In other words, we preyed on people’s desperation.
As a marketing expert, I understood the importance of connecting with people’s deepest emotions. I had to create an emotional connection in order to make our products attractive. But after a year, I realized we were going a little too far.
The products we provided were of decent quality. We put a lot of work into our content, which is one of the reasons why I kept marketing them. However, after I started analyzing the data, I began to feel guilty.
About 40% of the people who bought these expensive e-courses never finished them. And by the time they realized they couldn’t finish, our 30-day refund policy had already expired.
If our customers wanted to get their money back after 30 days, they couldn’t. Instead, we would upsell them to a cheaper $500 – $1,000 product to make them feel like they were getting a deal.
After a while, I began to feel gross about my work. Even though the products were helpful to those who finished them, the company had put systems in place that enriched itself at the expense of its clients. If all its clients could have gotten their money-back guarantee, I’d have less angst about continuing at my job.
I had one client who filed for bankruptcy six months after purchasing one of our courses. The course was supposed to help save her, but instead, it just accelerated her financial demise while the company kept winning.
Didn’t Have Respect For My Bosses
Besides feeling bad about what I did for a living, I also didn’t like my bosses. They were mostly money-hungry men who didn’t seem to mind preying on the most vulnerable. Instead, all they cared about was making as much money as possible.
Every time I heard them shout in triumph after a sale, I’d think of the movie Boiler Room or The Wolf Of Wall Street. They were scumbags who kept coming back like cockroaches for more.
My job added to my distaste for money and those who worshipped money above all else. Given I didn’t like my bosses and I no longer believed what I did was helpful, I decided to retire.
I had a little over $600,000 invested, which was more than enough for a single person like me with minimal expenses. I had always wanted to live abroad, so I relocated to Taipei, Taiwan.
You might think $600,000 is not enough. And if I really did have money trauma, I would want to work longer and save even more. But let me explain why I don’t need millions to feel secure.
Understanding My Money Trauma
When I was seven years old my dad left my mom for a family friend who used to babysit me. I ended up losing my dad and my babysitter in one instance.
It is probably due to his betrayal that I have a deep-seated distrust for men. It takes a long time for me to open up to men because I never know when they’re going to stab me in the back. Even if he is the nicest person, I can’t always help but think I will eventually be used.
My mom was left to raise me and my younger brother on a near minimum wage salary. Thankfully, my grandmother lived close by to help out. However, she too, found herself alone after an unsuccessful marriage.
Money was always tight in my family. While my friends were getting new toys every month, I continued to play with toys from when I was years younger. I felt like I was always watching re-runs while my friends were always watching the latest hits.
Then one year, my mother lost her job. The company she was working for shut down its office and relocated to Chicago. For six months, my mother was on unemployment benefits. And for a year after that, she worked at a couple of jobs earning barely enough to make ends meet.
The whole experience with my parents traumatized me enough to not take my studies or my income for granted. In a positive way, the money trauma I experienced propelled me to save and invest way more than I would have had I lived a more comfortable childhood.
I didn’t want to go through the constant stress my mother faced.
The Home As A Sanctuary And As A Burden
The only major asset my mother owned was a home. She didn’t trust the stock market, but she could trust a roof over her head that provided for me and my brother.
Today, the home is paid off. But it took 28 years and many surprise expenses to get there.
Just when my mom thought she was on a roll with her money a water heater would break. One year, a big storm caused shingles to blow off, which also resulted in a big leak and over $10,000 in repairs. Beware of vertical walls during windy rainstorms! They are likely your leak culprit.
My mother seemed to always be fixing something in our old house. Sometimes, she would have to choose between repairing the house over something fun, like going on a trip or going to an amusement park.
So you’ll forgive me if I decided to rent my entire time after college. Seeing my mother always worry about fixing our home made me never want to own. In retrospect, I should have bought eight years ago when I could have.
Despite all of my mom’s struggles, she’s proud to own her home free and clear. Today, it’s worth about $400,000 – $420,000 and she has enough tappable equity to take care of any emergency.
How Much Money I Made In Marketing
For those curious, here’s how much I made as an online marketer.
Year 1 at age 22- $28,000
Year 2 – $30,000
Year 3 – $33,000
Year 4 – $55,000 (changed jobs)
Year 5 – $60,000
Year 6 – $68,000
Year 7 – $70,000
Year 8 – $100,000 (changed jobs)
Year 9 – $105,000
Year 10 – $110,000
Year 11 – $115,000
Year 12 – $120,000
Year 13 – $140,000 (changed jobs)
Year 14 – $140,000
Year 15 – $145,000
Year 16 – $145,000 (retired at age 38)
Total earnings after 16 years: $1,464,000 gross, about $1,170,000 after taxes.
My saving rate averaged about 35% after-tax for my entire career, which means I saved about $407,750.
If you want to make more money, change jobs. You’ll never be fully appreciated if you stay at your firm for more than five years. Another upside to changing jobs every three-to-five years is that you develop a thicker skin when it comes time to move again or retire.
Also, if I do need to make extra money, I can always take up some freelance online marketing gigs in Taiwan if I want to. I was able to leave my job with about $10,000 on unpaid vacation and other benefits.
Net Worth Progression As A Marketer
Here’s my rough net worth progression as a marketer. I invested most of my savings in the S&P 500 and a couple other diversified funds. I also contributed to my 401(k) up to the maximum company match each year. The match ranged from 3% – 5% of salary or $4,000, whichever was lower.
Year 1: $0
Year 2: +$5,000
Year 3: +$10,000
Year 4: +$25,000 (changed jobs)
Year 5: +$50,000
Year 6: +$80,000
Year 7: +$120,000
Year 8: +$160,000 (changed jobs)
Year 9: +$200,000
Year 10: +$250,000
Year 11: +$310,000
Year 12: +$370,000
Year 13: +$410,000 (changed jobs)
Year 14: +$490,000
Year 15: +$550,000
Year 16: +$620,000
Out of the $620,000, about $400,000 is in taxable brokerage accounts and $120,000 is in my 401(k), which I won’t touch until 60 or later.
My taxable brokerage accounts generate about $8,000 a year in dividend and bond income. Meanwhile, my monthly expenses are only about $12,000 a year.
So how do I make up for my $4,000 yearly, or $334 monthly shortfall? I teach English part-time in Taiwan making $1,500 – $2,000 a month. And if I didn’t teach English, my investments would last me 50 years until they go to zero, assuming no growth.
Retiring To Taiwan With A ~$600,000 Net Worth
I moved to Taipei, Taiwan because I love the food, I love the people, and I like the lower cost of living. I visited years ago during a one-month trip to Asia between jobs and I immediately took a liking to the place. It was a country where I thought I could go to heal my money trauma.
The cost of living in Taipei is not as cheap as it is in Bangkok, Chiang Mai, or Saigon, the most popular cities for digital nomads. However, Taipei is still relatively cheap on a global scale. The infrastructure is fantastic as well.
Here are the average costs of various items in Taiwan.
1 US dollar equals about 30 New Taiwan Dollars (NT). The USD has appreciated over the past year.
Taipei Accommodation Averages:
One-bedroom apartment in city center: NT 15,000 – 30,000 ($500 – $1,000)
One-bedroom apartment outside city center: NT 8,000 – 20,000 ($267 – $667)
I rent a furnished one-bedroom apartment in the western part of Taipei called Banqiao for $550 a month. Nothing fancy, but good enough for me.
Taipei Groceries Averages:
Dozen eggs: NT 79 ($2.63)
1 Litre Of Milk: NT 92
1 kg of Rice: NT 96
Loaf Of Bread: NT 56
1 kg Chicken Breasts: NT 273 ($9.1)
I spend about $7 a day on food. My favorite food to buy are fruits from side vendors, lychee in particular when in season. I mainly eat fruit for breakfast and have a simple lunch box (bian dang) for about $2.5. Below is a typical lunch box example.
