Author Archives: Pretired Nick

Great cities — a forgotten key to your pretirement

October 2, 2013 9:32 am , 45 Comments ,
Lovely Vancouver, BC -- photo from a recent trip. If you're looking for great cities, you can't do much better than Vancouver.

Lovely Vancouver, BC — photo from a recent trip. If you’re looking for great cities, you can’t do much better than Vancouver.

As infants we begin with barely a dim awareness of our surroundings. Eventually that blurry upward view of crib rails and ceiling lights turns into faces and walls. Shapes, colors, figures. Next an awareness that this is MY room. Then MY house.

We get older and learn to recognize our own street. We become familiar with our own schools and eventually our own neighborhoods and cities.

Some of us move away from these first towns and make our own homes elsewhere. A very small subset of the population identify specific criteria for the place they want to live and seek out that perfect place. Most of us, however, stay near where we grew up or move for employment.

Here’s the thing, though: For those in already pretired or driving toward pretirement, the city where you choose to settle matters. A lot. And, yet, it’s one of the most ignored keys to finding your freedom.

I think we tend to ignore this because it feels intractable. Maybe we don’t want to move away from family. We already own a home here. All our friends are here. I could ridicule each of those as excuses, but they’re actually all really great reasons to stay put.

But as I’ve said many times, pretirement calls for sacrifices. Even if you made a high salary, saved a massive percentage of it, and theoretically could pretire comfortably, it’s all for naught if you are set on living somewhere extremely expensive, such as Manhattan. It’s not just the expense of your home. Cities themselves have widely varying costs.

And it goes beyond cost as well. What’s the point of living inexpensively if you have to dodge bullets every day? Or have to breathe polluted air and drink polluted water?

What makes great cities great?

It’s impossible to make a comprehensive list of what makes a city great. But I’ll share a few things that top my list of things I find in most great cities. Feel free to add your own in the comments. It’s a topic I’m very passionate about, so the more ideas we can collect, the better.

Safety

I guess this one is obvious since it’s so fundamental to a place not sucking. But it’s not a binary element. You’re not “safe” or “not safe”. You’re more or less safe. And that can vary quite a bit even by neighborhood. Unfortunately there is some correlation (somewhat overblown, however) between the cost of an area and how safe it is. Because you’ll want to be living a low-overhead lifestyle AND be as safe as possible, it’s something of a balance. The way I look at it is there should be a reasonable level of safety and once that’s met, I’ll just move on to other factors. Besides you probably have about the same odds of being flattened by a latte-slurping soccer mom in her SUV as you are to get mugged in most cities.

Affordability

I won’t dwell on this because it’s somewhat obvious, but the cost of living and especially the cost of real estate is a key determining factor. This can be tough, though, because there’s a conundrum at work here: When a place is nice, rich people want to live there and thus drive up prices. If an area is a craphole, the people who can move away do so and you get self-selecting conditions for blight. Cities struggle with this all the time when they try to keep housing affordable. They allow cheaper construction and the area turns into a ghetto and they end up paying a fortune for police service and basic public safety. They make an area nicer and wealthier people move in and drive out the original residents. But if you’re pretired, you may be able to live farther from job centers and thus be able to keep your housing costs low while still enjoying a great area.

Walkability

This one is so often overlooked but it’s so important in allowing you to drop your car expenses. If you and your spouse no longer need to commute, you might be able to drop down to one or even zero cars. Plus you’ll enjoy your lifestyle more than ever as you don’t have to get in the car to go anywhere. Another thing to think about is your transition into traditional retirement, or to be blunt, think about when you’re old. Driving is difficult and scary for seniors. Build yourself a lifestyle now that takes that strain off your future self.

Transit

I’m a huge public transportation fan. Unfortunately I live in one of the worst cities for getting around without a car. Here in Seattle, they’ve had many opportunities to build robust transit systems and they’ve been voted down repeatedly by short-sighted voters. It’s surprising given how liberal we are here. It’s only been in recent years — decades after nearly every other major city has deployed at least a light rail system — that we’ve taken the plunge. Our bus system is OK, but depending on where you live and where you need to go, it could double your travel time. It was disheartening returning to Seattle from a trip to Tokyo a few years ago. Their system is mind-meltingly awesome and to step off the plane in Seattle to our rinky-dink system was just pathetic.

Bicycle friendliness

A Barcelona bike path. Note the grade separation from walking path to bike path to roadway. Picture taken from upper deck of tour bus. Also note the entrance to the underground subway.

A Barcelona bike path. Note the grade separation from walking path to bike path to roadway. Picture taken from upper deck of tour bus. Also note the entrance to the underground subway.

Bicycling is by far the most efficient way to travel short distances but so many cities and towns make this so difficult. Seattle has been improving its bicycle infrastructure in recent years, but I’ll be honest: it’s still ridiculously bad to the point where I do not feel it’s safe. A bicyclist dies here every couple months and our city leaders are still thrashing around and throwing tons of money at the car culture still. On top of the safety issue, we are renowned for our many steep hills. I’ve actually never seen a bike going up the hill I live on, although we see bikes going down quite often. The best way to end up in a bicycle friendly town currently is to move out of the U.S. or to a smaller town. Hopefully in a few years that changes drastically.

Take a look at my picture of the bicycle lanes from my recent trip to Barcelona. Cars, separated from buses, separated from grade-separated bike lanes, separated from a lovely walking path. Brilliant and simple. (And they have a wonderful underground subway system.) Contrast that to here where you’re lucky if you find a crosswalk that still has some paint on the road.

Cleanliness

We all like a clean city, but this goes beyond where there is litter blowing down the sidewalk (important as that is). Cleanliness extends to things like the air you breathe or the water you drink. It’s important to think about the long-term risks to your air and water. Are they fracking near your home? Are there coal-burning plants nearby? How clean is the water in your area? This is important not only for enjoying the many, many years of awesome life you have in front of you, but also for ensuring your health. What’s the point of living an amazing life of pretirement if you end up hobbled with chronic illness?

There’s another important point to finding an unpolluted city: Your home value. Those homes that had their wells poisoned by fracking are now valueless. Those people who thought they were being so clever by leasing some land to natural gas companies have wound up trapped in a house they can’t sell, suffering from devastating illness. It may not be as dramatic, though. Just in general, a rundown, dirty or polluted neighborhood can mean lower equity growth and a harder-to-sell property.

Weather

I used to always say that if I ever moved again, I wanted an upgrade from Seattle’s dreary weather. That’s actually becoming less important to me in recent years, although I still often long to live somewhere with more sun. As a native Washingtonian with webbed feet, however, I’m finding it harder to deal with the heat than the cold. Although I still hate being cold. Probably I’d adjust after a few months somewhere warmer and that’d probably be good for my overall health. The important point, though, is that I’m not moving somewhere where the weather sucks just because it’s cheaper. Nasty muggy summers and frigid snowy winters? No thanks! I do like the weather in many parts of California, for example. In Northern California, the weather is quite temperate and when I lived there I rarely remember being either too hot or too cold. That could be why it’s so overpopulated, though.

Infrastructure

What do I mean by infrastructure? I’m not necessarily referring to the classic governmental meaning or roads and bridges. Rather, I’m talking about the various functions that support your lifestyle. For example, transportation, medical facilities (you may not want to be too far from a hospital for instance), grocery stores or anything else you might need. This is probably the main reason I’ll likely stay within or near a reasonably large city instead of moving to a rural location. I once considered moving out to the country but I imagined rushing to a hospital an hour away in case of an accident, and the move just didn’t seem too wise. Add to that the need to drive nearly everywhere and country living just wasn’t as inexpensive as it first appeared. So I’m focused now mostly on medium- to small-sized cities.

Open space

Humans have a very real need to be outside. Beyond fresh air and exercise, there is something in us that needs the natural world to keep us functional. I think it’s safe to say that someone who is outside in nature every single day is highly unlikely to suffer from depression. Open spaces act as the lungs for cities clearing the air and softening the landscape. We have some great in-city areas here in Seattle, where you almost forget you’re in a city. And we can be deep in the mountains within a 30 minute drive. From an open space perspective, Seattle is hard to beat.

Culture

If your local town looks like a Long John Silver’s raped a Wendy’s it may be time to re-evaluate your life choices. Car-oriented, strip mall development is extremely hard on the psyche and is a very expensive way to live, especially if you’re still commuting to work. This cheap development also leads to a cultural desert, where there’s nothing to do and nowhere to go. Contrast that with a similarly-sized city with a cute downtown area, parks and open space. You’ll find charming restaurants opening in such an area, art galleries, plus many free entertainment options will sprout up in the shadow of the trees. You might say work and money are HOW we live, but culture and family are WHY we live. Don’t overlook it.

Aesthetic beauty

Not everyone will agree this is important, but to me it’s critical. Something about my temperament demands I live without being visually assaulted by atrocious surroundings. I paid way too much for my current house because I (thought I) needed to see the shimmering Puget Sound every day. Not unlike the importance of culture, living in a beautiful place brings a lot of light into your life and will make all those pretirement years that much more enjoyable.

I could probably come up with another 50 important things, but I’d rather hear from you about what you look for in a place to live. What am I missing? I’d really like to have a robust list of criteria because if and when I decided to move to a different locale, I want to make sure I approach my choice intelligently.

Let me know what you think in the comments! 

Posted in: Pretirement How To , 45 Comments , Tagged: , , , , , ,

Guest Post: The Awesome Magic of Investing Like An 8 Year Old

September 26, 2013 6:13 am , 12 Comments ,

Howdy everyone! Pretired Nick here. Both Pretired Baby and I ended up getting sick this week so I’m a little behind on my writing. I have some fun pieces I’m working on, but propping myself up at the computer hasn’t felt like a lot of fun. Fortunately, Joe Saul-Sehy of the very well-regarded Stacking Benjamins web site and podcast graciously offered to write a post about investing. Since I don’t consider myself an expert on investing (except for maybe in real estate), I jumped at the chance. Here is his post. Be sure to share your thoughts in the comments and hopefully Pretired Baby and I will be back in action next week! 

The Awesome Magic of Investing Like You’re An 8 Year Old

“Money is not the most important thing in the world. Love is. Fortunately, I love money.”
– Jackie Mason

Image courtesy of arztsamui / FreeDigitalPhotos.net

Image courtesy of arztsamui / FreeDigitalPhotos.net

One of the biggest complaints I hear about money management is, “I just can’t get into it” or “I’m really not into checking investments and statements.” It’s as if these people think that money management is something geeks sit around and do after they trade baseball stats and Magic the Gathering cards.

The simplicity of the financial markets surprised me. Previously, I’d assumed they were filled with magical investments that moved in ways I’d have trouble grasping. That wasn’t the case at all.

Really, it’s more like an eight-year-old kid and a bike. Remember learning to ride? You’d jump on and were terrified that you’d fall. The first several times you wobbled and your biggest nightmares came true — you fell. Then you realized that the price isn’t nearly as hard as the payoff. Riding a bike is awesome when you’re eight years old. It’s a no-brainer when you’re an adult.

Are You An 8 Year Old With Your Money?

When I began road biking seriously I asked a friend if he’d ever been hit by a car. He answered, “The question isn’t if you’re going to get hit… the question is when.”

Just like when riding a bike, it’s always better to think about the payoff than the hurt. Sadly, the media generally focuses on the roller coaster economy and on the downsides of investing (“the Dow Jones Industrial Average today…” …plummeted? When else do you use that word?). You need to reframe investing if you’re afraid so the payoff climbs to the top.

Here is what investors know:

  • There is no way to meet your goals without investing. Don’t think about the funds — think about them as fuel for those goals.
  • Falling down is a part of reaching happiness. How will you know the magic of success if the goal isn’t just a little dangerous and exciting?
  • By keeping that long term goal in mind, sure you might miss your mark, but look at all that you’ll achieve on the road to 95 percent of your hoped-for dream finish!

Your Investments And You

When I was in middle school I started saving for a bike. It had a saddlebag on the back and I was going to put a tent in the bag and ride it across the state.

When you want something badly, that’s where you begin. Not with “what can I do with these dollars?” Start with the bike you want. How much is it going to cost? How much will you need to put away to buy it by next spring?

It’s the same with pretirement, retirement, a new house, a sabbatical, whatever. How much will you need to live a year? What income can you count on? How much do you need to save to get there?

Pretirement, retirement, college, a new house — they all work better with this approach. If you want something special for yourself, start with the vision, translate that to money, and then do the simple math.

If you tell me, “I don’t like math”, I’ll tell you that, like investments, you need to look behind the weird formulas and instead focus on the giggles math can bring you. There’s an awesome power in knowing the answer to the question, “How much” for an adult. While a child will just get back up on the bike 1,000 times until they finally ride, an adult thrives on the answer to “How much pain before I’m secure.”

Once You’ve Answered How Much, You’re Nearly Home Free

I asked my mother, how much further? She answered, you’ll know when we get there. She was right every time.

Here’s the question: can you afford the cost of the bike? Is it currently possible for you to save enough money to get it by next spring? If not, now you have to ask an important question:

How can I lower my other expenses or raise enough revenue to get the bike? Maybe I have to cut out Big League Chew. Maybe I have to sell a little lemonade along the street for a few weeks. Maybe I can negotiate with mom for a bigger allowance. Whatever. Raise income or lower expenses — pretty easy, huh?

This makes shopping decisions easier. If I have no goals, I might accidentally shop at J. Crew. With goals, I become laser focused on my budget.

If your goal is big enough you know that you’ll need to invest your money. To get my big goal, I’m going to need an 8 percent return to make up for the money I can’t save.

….and that’s when the magic of investing happens

See what happens there? By the time I get to the investments, I could care less about them — except as fuel toward buying the bike. I know it’s going to take 8 percent to reach the bike goal, so guess what I’m going to do?

I’m going to search for investments that reach an 8 percent return with the least amount of risk.

It’s equally as important to recognize what I’m not gonna do. I’m not going to pay any attention to investments that pay 3 percent or those that pay 12 percent Think about how much work I saved myself, especially if I don’t really care about investments!

Now, when I get my statements, I know what the bottom line represents. Not some meaningless investment but my new bike, retirement, a new home, an education, whatever.

Less time, more fun, and with a bike at the end. What eight year old wouldn’t be happy with that approach?

Joe Saul-Sehy blogs about earning, saving and spending with a plan at Stacking Benjamins.com and is the cohost of the popular podcast series Stacking Benjamins. His first bike had a banana seat. Don’t be a hater about it. 

Now, tell us what you think! Does it help you to think like a kid when approaching your investments? Have you thought about investing like an 8 year old? Can you use this idea to help alleviate some of your fears? 

Posted in: Investing , 12 Comments , Tagged:

What is the best way to invest $100,000?

September 17, 2013 10:10 am , 65 Comments ,

What would you do if someone handed you $100,000?
Do you think you know the best way to invest this money?

money3Americans have a unique challenge in life and have developed an adaptive skill that people from many other countries can barely even conceptualize. Although it’s a very real problem for we Americans, in many parts of the world they’d give almost anything to have this problem.

The problem: Too much choice.

The other day I spent 30 minutes looking around on Netflix for the movie that was an exact fit for my mood at that exact moment. We walk into our grocery stores and have to apply our well-honed, complex analytical skills to decide which cheese to purchase. Want cereal? Flakes or biscuit? Sweet or savory? Real sugar or HFCS? Should my eggs be cage-free or vegetarian fed? Both? But those are $6! Time to paint the living room? Choose from 10,000 unique shades of light brown! Whatever the choice of the moment might be, we in America spend a lot of our time wading through various buying choices and these choices are a reflection of our person and a projection of our aspirations.

I would flip through catalogs and wonder, “What kind of dining set defines me as a person?”
-Jack, Fight Club

If you’ve ever seen a recent immigrant shopping in an American supermarket, it can be fascinating. Often it’ll take them forever to make a decision as they carefully wade into this sea of decision-making. Those of us who have been running this gauntlet for some time now have built up resistance to the sensory overload that is a modern store. We can usually zip through using well-tread criteria and remain unscathed.

When it comes to deciding the best way to invest, it’s not always so easy

Since I recently sold my fourplex, I now have some investment funds to redeploy. After cleaning up some other financial loose ends, I’ll have about $100,000 to invest elsewhere. Getting to this point was easy compared to the next step of actually pulling the trigger. (Incidentally, the first step in getting organized in investing is to sign up for a free account with Personal Capital so you can get a handle on your current situation. You can learn more here.)

Like a freshly arrived Somalian’s first visit to a Seattle Safeway, I’ll admit to being somewhat overwhelmed by my options. So I turn to you, readers, to help me out. What’s your advice for someone with a chunk of change in his pocket?

I’ve been considering a few different options over the past few years I’ve been trying to sell the fourplex. Many of them I was completely ready to move on at various points but since I couldn’t access the funds, they never happened. Some of those ideas have been completely dismissed while others are still being considered.

A few of my favorites:

Is more real estate the best way to invest this money?

Real estate is like a drug, and I’m hopelessly addicted. I love how it’s in my control (mostly) and I love how it’s tangible. With my own effort, I can enhance a property to increase its value. During the depth of the real estate crash, I was licking my chops at some very underpriced single-family homes, particularly in the city of my birth, Vancouver, Wash. Check out the inventory! There are a ton of decent houses available for less than $200,000 right now. Using my funds and tapping our home’s HELOC fund, I could pay cash* for one of these babies. Hard to resist! Rents in that area are pretty low, at maybe $1,200/month for something pretty nice. I could basically earn a 5%+ yield (although surprises always await with real estate!) and potentially also get some additional gain from equity growth as the market improves in that area.

(Interesting side note about this area: A few months back I was looking at what kind of inventory was available and I noticed almost every listing’s status was “short sale pending”. Page after page of listings. Then I read about how companies like the Blackstone Group were buying in big to the single family housing market and renting the homes out. I’m pretty sure these big investment firms were single-handedly driving up the prices. If I could have sold my plex a couple years ago and pounced, I could have already made well over $100,000 down there.)

So if I get lucky, I could earn something close to what I could earn investing more traditionally PLUS there is the potential to hit another jackpot. If the economy got quite hot in the Portland-Vancouver area, a price increase of $50,000 to $100,000 isn’t out of the question. But if the economy was doing that well, a stock market investment could do quite well also.

On the other hand, if I get unlucky, just a few repairs could wipe out every year’s income. Or, even worse, I could get dragged into negativeland and would need to cough up cash to support the endeavor. Additionally, the sporadic, unreliable income is what made rentals so unappealing with my fourplex. If I’m only going to earn 5% or less, I’d better not have to take a bunch of annoying phone calls to get it.

If I went this route, I’d plan to hold for three years minimum, and hopefully five years maximum.  Hmmm…

What about REITs?

Instead of buying real estate that I have to personally deal with, buying Real Estate Investment Trust funds might be the best way to invest this money. These funds let you be invested in real estate and as an investor with others instead of holding the bag all by your lonesome. I have a few REITs already but hadn’t bought in further because I was already so deep in real estate. I’m still considering this direction.

Why not just buy individual Dividend stocks?

If you read my post on Dividend Mapping, you know I’m somewhat entranced by dividend stock investing. Yes, like any investment it carries some risk and has its own share of pros and cons. My favorite things about dividend stocks are that they’ll continue paying as normal whether the price goes up or down. From an income standpoint, it’s a little more “controlled” in the sense that the dividends drip in like clockwork, helping me avoid some of the wild swings of real estate. That stability alone is worth something to me after dealing with the roller coaster of real estate income over the past decade.

I’ve done a bit of looking around at what individual stocks I could pick up, in a modified version of Dividend Mapping. Really it’s closer to creating my own mini mutual funds. I’m pretty happy with my selections so far. I found some stocks that I wouldn’t have otherwise noticed that I really like. So why not just buy in? Well, my track record of buying anything outside of a fund is atrocious. You know how it always rains after you wash your car? That’s how it is with me and stocks. I used to joke to my friends that they’d better sell because I was buying in, thereby guaranteeing a drop. Yes, it’s been that bad. So that eats at me when I consider pulling the trigger.

Could a good ol’ fashioned Vanguard fund be the best way to invest?

In what is probably the simplest approach, I could just buy into one or more Vanguard funds, such as the Total Stock Market Index (VTSMX). They are tried and true and in some ways this would be the lowest risk approach. They also have some managed payout funds that I haven’t really looked into yet. Probably the smartest thing to do from a traditional investing perspective would be the classic combination of total stock market, bonds, some international, etc. to provide the diversity needed down the line.

So on the plus side, there are solid, relatively safe investments available. On the negative side, I’ve felt like we’re overdue for a market correction and buying in now would almost guarantee it! If the market took a fairly big dip, that would certainly make my decision easier.

How about a combo platter?

Naturally combining several different approaches is often the best way to go. It gives you good solid diversity and also lets you catch a wave if a particular sector takes off. But what combination?

I could also dollar-cost-average my way in to some of these choices to protect myself from a sudden drop, but that entails leaving a big sum of money uninvested.

So how do I decide on the best way to invest this money?

I’ve (obviously) never been a very skillful investor. I did well investing in myself (education and career learning) and I got lucky more than once. My lack of confidence in market investing pushed me toward real estate and I was fortunate that my timing coincided with a low interest rate era that caused a big housing spike.

The interesting thing about my current conundrum is that had I received the same amount of money over a number of years, it would be much easier to decide where to put it. It’s the Power of the Chunk in action! Get a big chunk all at once, the stakes immediately seem much higher! Taking a big hit in the market would hurt much more after dropping in a big sum of money than it would before I was using it as income and when it was just a collection of smaller investments (if you follow me).

So here I am, looking at my various options, thinking about what to do next. I can tend to be an over-analyzer and the waiting carries its own danger as well. I’ll be sure to let you know what I decide!

What do you think? What is the best way to invest $100,000? What would you do if someone stopped by your house and handed you a check for $100,000?

Let me know your thoughts in the comments. And if anyone wants to write a guest post on this topic, send me a note through the contact form. I think it’d be great to have a few different voices weigh in on this topic. 

*Paying cash isn’t my first choice, but last time I checked, the credit market was so tight that getting a loan was near impossible even though I wouldn’t be using my income from working to pay for it even if I had a job. It might be possible these days, but I haven’t looked into it. 

Posted in: Investing, Pretirement How To , 65 Comments , Tagged: , , ,

Pretirement story: Planning a move to Spain

September 12, 2013 6:05 am , 52 Comments ,

Hey, everybody, today I’m sharing a guest post from Buck, the writer behind one of my favorite blogs, Bucking the Trend. One of my favorite things to do on Pretired.org is share interesting stories of pretirement, such as the recent story of my friend Rebecca who gave up her fancy corporate job to move to Mexico. 

Buck is planning to pack up his family and move to Spain and is well into the planning and preparation stage. Read on for his story and be sure to share your thoughts and advice for Buck in the comments! 

Introduction

buck-spain

Earlier this summer, Pretired Nick and I were comparing notes.  We share a goal of living abroad with our families and he asked if I’d do a guest post.  This is the latest on our story.

The tagline on my blog says “Save. Invest. Retire @ 42. Move family to Spain.”  If everything were to go exactly as planned, we would reach our goal in the year 2017 or thereabouts.  We all know things rarely go “as planned” but it’s good to set goals, right?

This was the plan up until about a month ago when my wife and I decided to turn everything on its ear.  The tagline should now read “Save. Invest. Pretire in 2014. Move family to Spain.”

The Goal

For as long as my wife and I have been married, we’ve had a goal of living abroad.  We tried to navigate our careers so that we could live and work in a place other than the U.S. but the stars just never aligned to allow us to do it.

Our plans were put on hold with the birth of our twin boys a little over 8 years ago. Now that they’ve grown and we have some money in the bank, we’ve been able to rekindle our dream to include the entire family.

Our goal is to move and immerse ourselves in a Spanish-speaking country for at least one year starting in June 2014. The following are some of the questions we’ve asked ourselves that have led us to this decision.

Why?

I went on my first trip abroad during my sophomore year in college. And while it was only a month-long whirlwind tour through some parts of Western Europe, I returned with a new appreciation of different cultures.  It also struck me how most everyone we met that was close to my age was able to speak English – at worst in a conversational way, at best with an authentic British accent.

I learned that many countries teach English at very young ages, most at the start of any sort of formal schooling around age 5. I thought this was wonderful and vowed to give my kids the gift of bilingualism and the time to take in a different culture and all the things that go with that (language, food, people, sites, etc.) I think this experience will go a long way into making our sons more well-rounded.

Why Now?

Like many big decisions in life, there is rarely the perfect time to do something like this.  The more relevant question when I first brought it up with the wife was why not now?

As we evaluated our original plan of waiting another 4 years to move, we started seeing bigger issues that would potentially be roadblocks. Two of the bigger considerations were:

  • Age of our boys. The twins just started 2nd grade and the thought of waiting until they were nearly teenagers seemed like it would be more impactful both from a schooling and social perspective.
  • Age of our boys’ grandparents. We are very fortunate to have both sets of grandparents with us. Everyone is in relatively good health but with ages already in their early-to-mid 70s, no one is getting any younger. To wait another 4 years to make this move would push the elder grandparents closer to their 80s. Besides, I think they are excited to have a new place to visit their kids and grandchildren as well.

Why Spain?

Because our twins are in their third year of a Spanish-English dual language immersion program at their school, it’s only logical that we seek out living in a Spanish-speaking country. This experience should cement their fluency in the language.

While we have several target countries in mind (most of which are in South America), Spain remains #1 on our list.  I spent some time studying and working in Madrid nearly two decades ago and my wife and I have been back a couple of times since. There is something about the Spanish lifestyle that appeals to us and I suspect it has something to do with siestas, jamón serrano, and the nearly 3,000 hours of sunshine that pours down on southern Spain every year.

How?

You know how most personal finance blogs at one point or another always mention the word ‘freedom’ that financial independence brings?

While we aren’t yet financially independent, we’re taking advantage of the freedom that our savings has enabled. We’ve fully funded our tax-advantaged retirement and are diligently saving almost everything going forward in cash to be able to qualify for the needed visa. More on this in the next section.

To get into some specifics, we have about $90K in taxable investments and another $50K in cash that is more than enough float us for a year or two while abroad.

As long as we don’t end up in one of Spain’s larger cities (Madrid or Barcelona), it appears that living in Spain may actually be cheaper than our current location in the U.S. Rents in Andalucía appear to be reasonable and my goal is to live in a town/city center where we can walk or bike as part of our daily routine without the need for a car.

Next Steps

At this point, we have a lot more questions than answers and are glad to have the better part of 9 months to put a plan in place and make it a reality. The following are the most immediate to-dos at the moment.

  • Visas – Figuring out the needed visas is the first priority. We’re leaning toward applying for a non-lucrative visa. This is a one-year visa typically granted to retirees who have ample savings (or passive income) to support themselves.  This visa does not allow you to work in Spain. We’ve done our best to save enough money to live on for a period of time that I’m hoping we can qualify.

While I haven’t found it spelled out in black and white, it seems the magic number is around $85K in savings plus an additional $15K needed for each dependent. If my math is correct, that means our family will need to prove a savings of around $130K to be able to qualify for this type of visa.

  • Schools – Apparently there are three main options when it comes to schooling in Spain:  public, semi-private, and private. We need to determine which option we can afford and which is going to be best for our boys given our goals (to learn the language and culture).
  • Immersion – Even though we have the luxury of not working, I still think it is important that my wife and I find ways to become part of the community. To this end, I’ve found several programs that hire native English speakers to be part-time language assistants in schools around the country. I’m thinking this may help us get some immediate contacts in the area that may be more difficult to obtain on our own.
  • Stuff – What are we going to do with our house and all the stuff it contains? Since we plan to return back to the U.S. at some point, the current thought is to rent out our house and put anything we want to keep in storage.

Fears

As with anything new, we have our list of fears and unknowns. Will we miss our friends? Will we hate it? Will we love it? Will we ever come back? (That last one is my mom’s fear and not necessarily mine).

Admittedly, this prospect “terrifies the bejeezus” out of my wife (her words). But at the same time she is up for the challenge and equates her fear to the nerves and anxiety that our children regularly have to face, but which we avoid as adults. It seems only fair that we should also be put in uncomfortable situations in the name of growth and new experiences.

Thanks for reading. If there is anyone out there who may have a bit of advice for us about Spain or any other Spanish-speaking country that you think should warrant our time in research, please comment or reach out to me directly via the Contact form on my blog. ¡Muchas gracias!

Pretired Nick here again. Well, what do you all think? Is Buck on the right track? Any advice for him as he plans this move? I was in Spain a couple years ago and also fell in love with the country. When I researched a move to Spain I found very challenging visa issues and a barely functioning bureaucracy to complicate matters even further. Buck has a lot of these issues figured out already and I know I can’t wait to read the posts when he packs up and makes his move to Spain!

Also, for anyone else considering a move to Spain, I do highly recommend the book Moon Living Abroad in Spain (affiliate link). I read it from cover-to-cover when I was seriously looking at making the same move. Although my plans to move to Spain are on hold, I still highly recommend this book.

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