How I retired at 39 (in beautiful Chiang Mai)

 | Fri 27 Dec 2013 11:49 ICT

A commonly held misconception is that retirement is exclusively for the old or rich; a privilege not bestowed on mere mortals. I’m living proof that you don’t need to be Bill Gates or a colostomy-bag-wearer in order to achieve financial independence. You do, however, require bagfuls of determination. I’ll provide a brief explanation of how anyone can achieve financial independence provided they follow the same simple rules I did.

I grew up as the eldest of six boys in Ashington, Northumberland in the northeast of England. Since the collapse of shipbuilding and coalmining the area has seen dramatic decline. High levels of unemployment exacerbate socio-economic issues that blight the area in this post-industrial age. It hardly needs highlighting that many live in debt-fuelled depravation as a consequence. I endeavoured to escape.

At the tender age of 16 I joined the Royal Navy as an Engineering Apprentice. After 10 years on ships and submarines I left to finish a BSc(Hons) with the Open University. I then spent 3 years as an IT Technician before studying an MSc at Newcastle University for a year. At 32 I made what I regard to be the best decision of my life and I left the UK to teach maths in Asia. By 39 I had retired.

The point I’m trying to make is that I don’t come from a wealthy background and I’ve never worked in lucrative industries like medicine, law or gas. You don’t need to.

My first step on the road to financial freedom was listening to some salty old seadogs warning me of the perils of marriage from the bowels of a Trident submarine. We were coming back from three months under the sea and I invited them for a beer. They declined saying that they had no money. I had three month’s pay in my account! They made me swear I wouldn’t consider marriage until I was 40. I’m still thankful for that advice as it’s afforded opportunities for extensive travel, further education and early retirement – things beyond my wildest dreams as a 16 year old.

The second step on the road to early retirement was the acknowledgement that debt is toxic. I remember looking on enviously as a colleague drove to work in a brand new VW Golf and parked it next to my worthless wreck. However, her car generated six years of future payments plus interest. I remember leaving that particular job and thinking about her working for the next six years to pay off a depreciating asset. She was effectively pouring money down a drain and expending a lot of energy (in the form of work) to do so. Never take on debt, learn to do without – a strange mantra in today’s world.

The third step was the realisation that living a frugal (or minimalist life) can lead to huge savings and a significant increase in one’s net worth. During my working life I did without luxuries. I always bought clothes from charity shops, drove a banger and travelled (extensively) with a tent. There are millions of tips and techniques on how to live frugally but the best piece of advice is to ask yourself “Do I really need this?” You have to neglect consumerism and embrace a frugal mindset. I always aimed to save 50% of my net income every month – difficult but not impossible. As a result I’ve discovered that less is more in life. Freedom trumps possessions.

Once you have a positive net worth (savings and/or other assets) you have to store this wealth somewhere. Savings not only need to be safe but should also generate a passive income. I personally stashed my lump into a Hong Kong based litigation funding scheme. This particular point takes huge amounts of research but nothing too intellectually demanding.

Finally, once you’ve embraced minimalism, saved and invested enough to generate a sufficient passive income, you need to find somewhere cheap to live and where better than Chiang Mai? I fill my time by writing and riding a Honda CBR 250 around the fantastic scenery of Northern Thailand. That’s my one material indulgence!

Why do so few succeed on the path to financial freedom? In the first paragraph I mentioned a few simple rules. Just because they’re simple doesn’t mean they’re easy. An important distinction! Many people today can’t adjust their psychology and learn to do without ‘things’. The YOLO attitude provides instant gratification at your future’s expense. I’ve always believed (like our Grandparent’s generation) that you should save up for the things you want in life.

This is a very brief but I hope inspirational piece to anyone dreaming of securing their future financial independence through minimalism. It takes huge amounts of motivation, determination and discipline but once you reach the goal (39 for me but there are no age limits) you’ll know the sacrifices were worth it. Good luck!

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