My Retirement Journey
As of this writing, I am in Thailand exploring the possibility of retiring in Southeast Asia. I don’t want to make this a political blog, but you can’t help but watch and see that the United States has changed to the point where one could conclude that it has degraded to a point where it is not affordable to live here any longer.
I live in the State of New Jersey and the prices of things, the taxes, the ability to live has become almost impossible. The US Dollar has been devalued substantially, and the future may be bleak for those that are starting out. I don’t want to make it sound so glum, but I worry for my children.
Because of this, I have been doing extensive retirement planning. I first started by using forecasting software by looking at all the angles and potential possibilities of risk in a portfolio. The financial reason was driven by my desire to ensure that my children are taken care of for their needs during college. As a result, I started going a deep hole of analyzing and asking the question: “Do I have enough to retire?”
The second question I wanted to understand is “What is retirement?” Silly as it may sound, retirement is an occupation, a lifestyle, a milestone and an achievement. It is the culmination of the many years of working and finally saying, I think I am going to live out the rest of my life by enjoying it but on my terms and my own agenda. I call it trading money for experiences.
But if you are reading this blog, you are probably asking many questions about your own retirement. I understand that. It’s a very daunting task and it’s scary to make that jump off.
That’s one of the reasons I started my YT channel, (shameless plug). I want to help you in your journey because, it also helps me. Finding out all the weird nuances about retirement, whether it’s financial planning, lifestyle or mindset are all of the components needed to start thinking about a successful retirement.
Starting From the Beginning
This particular blog post is about a mindset and more directed to our youth because the advice that I want to share is something that all young people should learn. They don’t teach financial literacy in the education system yet it’s the primary thing we all think about after we get out into the working world. Everything boils down to living and surviving with money.
However, if you are coming to this post and you are over 40+ it’s not too late for you to walk away with these ideas for someone who wants financial freedom. That’s why I want to share one of my favorite books and one that I encourage you to read over and over again. “The Richest Man of Babylon“. This story and the advice it give, set me on a course that I am so thankful of. What Arkad talks about is true. I’m a living testament and the advice, notice I didn’t say strategy, is not mired with fancy financial information, jargon or gimmicks. It’s rooted in very sound principles of risk aversion and patience.
In this story, Arkad is the Richest Man in Babylon using a very common sensical approach to money management. Money is a strange thing. Before we had currency, we bartered but the value of a good is hard to translate. In today’s society, people who make money use money as a tool to make more money. They say that the hardest amount to make is $100,000. After $100,000, it becomes far easier.
What Arkad talks about is that when you use money to earn money, using the theories around compounding, you will find that you will make a lot more money than having to trade your time for money. You need to earn money, find opportunities that the money can work on your behalf and also passively and you will be on a track of wealth that most could never attain.
But let’s say you work for someone, like you would at a corporation. They have provisions to be able to save like the 401k but in my opinion, those are instruments to pad the wallets of Wall Street while potentially risking the possibility of being taxed a lot more later even if you are in a lower tax bracket. When you have to take Required Minimum Distributions, what Wall Street never told us is that Congress could raise the tax rate to well above what it is now, and that there are many baby boomers that will come online in the next several years that will take Social Security, thereby depleting the funds in that entitlement.
We don’t know this because who can predict the future especially if it’s 30 years down the line? So in the Babylonian times, before they had modern social programs, the wealthy saved, and they entrusted and invested in things that they understood, and which would pay them back with interest.
What Arkad talks about is getting into the mind set of saving but by paying yourself first. Pay 10% of all you earn to yourself, store it away and let it grow. .
“Impress yourself with the idea. Fill yourself with
the thought Then take whatever portion seems wise.
Let it be not less than one-tenth and lay it by. Ar-
range your other expenditures to do this if necessary.
But lay by that portion first. Soon you will realize
what a rich feeling it is to own a treasure upon which
you alone have claim.” – Richest Man in Babylon
Mindset
What this advice advocates is a change to your mental financial programming. We are so accustomed to paying our bills first and neglecting ourselves after. This is a mindset of the good citizen. It’s good to think this way and be responsible but it will also make you poor.
The idea that Arkad espouses is that if you reverse the order of operation of spending to saving by setting aside 10% of your income BEFORE paying everything else, you will always be operating with a budget that is 90% of what you make causing you to only work with that budget. If you forget that you have the 10% tucked away, invest it in something that pays you returns, then after many years, you will find that you will have millions or at least hundreds of thousands. Let’s look at this in a more simplistic fashion.
Put this in practice. Let’s say you earn $100,000 pre-tax and I set aside $10,000 (10%) of your gross income. If you invested it in an index, like the S&P500 what would you have after 20 years of investing 10,000 each year and reinvesting the returns of your nest egg?
Here’s a summary table of a $10,000 annual S&P 500 contribution over 20 years (assuming ~9.5% annual return with dividends reinvested):
| Year | Contribution | Portfolio Value |
|---|---|---|
| 2005 | $10,000 | $10,950 |
| 2010 | $10,000 | $87,121 |
| 2015 | $10,000 | $222,112 |
| 2020 | $10,000 | $385,680 |
| 2025 | $10,000 | $592,638 |
👉 So after 20 years, total contributions = $200,000, but compounding + reinvested dividends grew it to nearly $600k.
This is the theory of compounding and what Arkad discovered very early on in the ancient times. Using this theory of making money work for money, you will have that amount.
Here’s the chart 📈 showing how your portfolio value grows over 20 years.
You can see how the curve steepens in later years — that’s compounding power kicking in. Even though you put in the same $10k every year, the growth accelerates because your earlier contributions have had more time to compound.
Lesson Learned
So, the first lesson, that Arkad taught us is that by setting aside 10% of your money and letting the money work for you, you will have exploited the idea that money and its children will make more children in exponential fashion and you say this is such a simple idea? Is it?!?
This is what I want you to take away from this blog post. It takes patience and discipline to keep up the rhythm of saving 10%. Too many of us are in consumption mode. We want to have the latest and greatest of the nicest things. There is nothing wrong with doing or thinking this way, but would you rather be the squirrel, squirreling away all his nuts for the rainy day or for the time where he just cannot work any longer or would you rather be the guy that eats everything, he kills that day.
It’s like the person who kills the goose for a days’ worth of sustenance rather trying to cultivate more geese so that he can live for a life time. But the constant consumption or living outside of your means is what derails us over time and remember you cannot earn back time. This is why I am talking about trading time for money and then money for experiences. Your time is what you get back after saving so much.
Remember that if you save and set aside an amount by paying yourself first, you will be in a position where you will not have to worry and that is all common theme I have seen in many retirees. They never saved because they didn’t think they had enough but in fact they had enough but just didn’t look at the issue from the right direction.
In closing, there is one heartfelt piece of advice that Arkad gives that shouldn’t be overlooked since it’s the reason why we do what we do. It is this advice:
“Enjoy life while you are here. Do not overstrain
or try to save too much. If one-tenth of all you earn
is as much as you can comfortably keep, be content
to keep this portion. Live otherwise according to
your income and let not yourself get niggardly and
afraid to spend. Life is good and life is rich with
things worthwhile and things to enjoy.” – Richest Man in Babylon
Remember you are only on this earth once and you may only have 60-70 good years of health to do what is important to you so live it to your fullest but don’t become undisciplined in your goals of retirement.
Come check out my YouTube page at
@VincentPlansFreedom or my IG account TiredToRetire IG.
Where I talk about all things related to the retirement journey and a framework that I’m setting up for myself that incorporates something in SouthEast Asia.