Alright everybody – time to talk shop about finances, strategies, and ideas for early retirement. I’m going to share what I’ve been focusing on the past couple of years.
DISCLAIMER – I am not a registered financial planner, a fiduciary, or any kind of credentialed professional when it comes to the topic. I am simply sharing my journey into the FIRE movement and how it’s been working out so far.
All of that being said, here’s the backstory of how I came to this idea of retiring in the Philippines initially.
In 2015 I was working for a large multinational company as a GIS/BIM Manager. The work involved frequent domestic and international travel and I had the opportunity to see a lot of different countries in that duration. I was in my early 30’s at the time and had a very high income with very little expenses.
My first international vacation was in Thailand at 30 and I went with a good female friend at the time. We stayed in Bangkok and saw the temple, some museums, and just kind of meandered around the city soaking it all in. We then went and did the island hopping thing, staying a few weeks split between Ko Phi Phi and Koh Thao. We met a ton of interesting people and had some amazing experiences during those 2 weeks.
While I was there I couldn’t help but notice how powerful the dollar was in terms of purchasing power in some other countries. Another thing I noticed was how much I was enjoying the “stranger in a strange land” experience. Everyday was a challenge to adapt any my senses were fully engaged. I’ve always been a person that’s curious about things, so it felt like a natural fit to live that way. That’s when the idea of retiring to another country eventually began to form and take real shape.
When I got home I decided that one day I would escape the corporate rat race by taking control of my finances. I cut my budget even further and upped my savings rate to about 50%. My 401k was split evenly into the major indexes (S&P500, DJI1, NASDAG, and Russel2K.) The Roth was at Fidelity and 100% invested into FBGRX which worked out extremely during well for growing my capital.
Time passed and I was ready to check out another country.
On my next international trip (Philippines) I read three books on the plane over:
A Random Walk Down Wall Street
The Intelligent Investor
The Psychology of Money
Armed with my new financial knowledge, I played around with different stocks and ETFS in the brokerage account and eventually settled into two ETFS that are focused on monthly income – SWKRX and FPFD. These are not high growth ETFS and more suitable as an “old man” type of investment – your mileage or needs may vary. Between the two I’m earning anywhere between 4% and 6% monthly in dividend income. Here’s the really important part – when I’m finally relying on these funds for living, they are taxed at investment rates – not income rates. You can do the research yourself but it’s a hell of a deal compared to what income is taxed at. There some shortcomings to each fund, but between the 2 they compensate for each others weaknesses and sensitivities to certain market market conditions. I still max out my Roth IRA but have dialed down the 401k to minimum matching levels so I have my liquid to dump into the brokerage accounts.
I’m currently 42 and have been doing this for almost 10 years now.
At any rate – here is my total current savings rate and where each slice of the pie goes:
| Category | Ticker | Allocation | Yield |
|---|---|---|---|
| Total Savings % | N/A | 74% | N/A |
| 401k (pre-tax) | VTHRX | 4% (enough to get full match) | N/A |
| SWKRX | SWKRX | 45% | +5.7% to +6.35% |
| FPFD | FPFD | 45% | +0.7% to +1.2% |
| Cash / Money Market | VMRXX | 7% | Varies (~4%–5% yield, not YTD price gain) |
| BITQ (Crypto) | N/A | 3% | 51% |
At this point I’m confident if I stay the course, things will work out just fine. I’ve got enough diversification in investments to meet my short term goal for income (aka work deletion,) and long term goal of a big chunk of cash towards the end when I’m old and likely not as healthy.
I would like to note that while I’m implementing part of the FIRE strategy (high savings,) I will not be touching the capital at the 4% drawdown rate, but instead I’ll be relying on earning income targeting around 5% yield. Either strategy is perfectly viable. My goal is bridging the gap between 50 – 62 for SS while preserving capital basically.
The SWKRX/FPFD blend is strictly for the short term of goal of retiring in the Philippines. I still have some years and more saving to ahead of me, but the portfolio became viable for Philippines retirement around $300,000. When I get to $400,000 – I’m headed to the Philippines.
If you are younger and reading this, start saving and investing as much as you can, as early as you can. Time is on your side.
Feel free to share your investment strategies for early retirement in the Philippines (or another country.)
Cheers,
– Frank
Check out some my other content on the Philippines.