Early Retirement / Financial Independence
#61
I agree with OviOs. I was referring to Colombia in general. I don't have any experience with medical service in Indonesia but my experience going to a hospital in Thailand was better than any experience in the US before.

The other thing to remember is if a third world country offers good medical service people will money will get treated like royalty. I went to a specialty doctor here in Colombia before. I made the appointment online and went the next day with no waiting. Years ago I made an appointment with a specialty doctor in the US in the same field and I had to wait 5 weeks to get an appointment because they were extremely backed up and so was every other office.

Every doctor I've visited in the third world spoke perfect English and studied in the west. The only way I see the US being better is getting some kind of specialty treatment or surgery that is newer then the US will have more advanced technology or if you simply don't have the $ for proper treatment.
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#62
(05-04-2021, 06:30 PM)OviOs Wrote:
(05-03-2021, 12:18 AM)WombRaider Wrote: I'm glad to see the swooping community and the FIRE community intersecting a bit. There is a lot that is complementary, even though most of the FIRE community is pretty liberal/feminist. Both communities encourage ways of living that most people can't fathom. Both present a challenge to the established order.

I don't think trying to permanently live in the Third World is a good idea. Rest assured that at some point, you'll want to come back. Aging is a bitch, and you'll want your home country's infrastructure. Also, if you settle down and have kids, you'll want your kid educated in your home country. Trust me, you just will.

I think it's best to have a home base in your home country -- maybe own a condo or townhouse, or a small single-family home. Whether you save up $700,000 or $1 million is just a detail -- the important thing is that you have some security and freedom. Live in the U.S. a few months and abroad a few months -- the exact amounts of time will vary as you go through life. Any income you can earn online or through teaching will help protect your savings/investments. It doesn't even have to be consistent income.

I think this will vary from person to person.  I'm perfectly comfortable never returning to the U.S. save for family visits/funerals/events and business issues (house settlements, will updates, etc.)  How are older people viewed/treated in the West versus more "traditional" countries?  I'd say Western culture views older people as a burden more than anything. 

As for First World infrastructure... The times, they are a-changin':

Colombia has 24 of the Best Hospitals in Latin America (medellinguru.com)  Take away: If you can believe WHO data (who knows after CoronaChan) Colombia #22 versus U.S. #37 in worldwide rankings.

Would you/do you maintain a primary residence in the U.S. under those circumstances?
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#63
(05-05-2021, 01:16 PM)WombRaider Wrote:
(05-04-2021, 06:30 PM)OviOs Wrote:
(05-03-2021, 12:18 AM)WombRaider Wrote: I'm glad to see the swooping community and the FIRE community intersecting a bit. There is a lot that is complementary, even though most of the FIRE community is pretty liberal/feminist. Both communities encourage ways of living that most people can't fathom. Both present a challenge to the established order.

I don't think trying to permanently live in the Third World is a good idea. Rest assured that at some point, you'll want to come back. Aging is a bitch, and you'll want your home country's infrastructure. Also, if you settle down and have kids, you'll want your kid educated in your home country. Trust me, you just will.

I think it's best to have a home base in your home country -- maybe own a condo or townhouse, or a small single-family home. Whether you save up $700,000 or $1 million is just a detail -- the important thing is that you have some security and freedom. Live in the U.S. a few months and abroad a few months -- the exact amounts of time will vary as you go through life. Any income you can earn online or through teaching will help protect your savings/investments. It doesn't even have to be consistent income.

I think this will vary from person to person.  I'm perfectly comfortable never returning to the U.S. save for family visits/funerals/events and business issues (house settlements, will updates, etc.)  How are older people viewed/treated in the West versus more "traditional" countries?  I'd say Western culture views older people as a burden more than anything. 

As for First World infrastructure... The times, they are a-changin':

Colombia has 24 of the Best Hospitals in Latin America (medellinguru.com)  Take away: If you can believe WHO data (who knows after CoronaChan) Colombia #22 versus U.S. #37 in worldwide rankings.

Would you/do you maintain a primary residence in the U.S. under those circumstances?

I do still have several investment properties in the US in suburban D.C.  If they weren't jointly owned, I probably would sell them now but my partners want to wait until the mortgages are amortized.  I don't see a reversal in my lifetime of this major trend toward >50% taxation rates for anybody who has more $1 in assets and would rather not feed the beast.

Ideally, the only footprint I would retain is the U.S. passport and a P.O. box masquerading as a fixed address to keep some banks and government agencies happy.

Edit: Yes, I technically have a primary residence address in the U.S.
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#64
How does a roth IRA fit into the FIRE plan?
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#65
(05-06-2021, 04:04 PM)churros Wrote: How does a roth IRA fit into the FIRE plan?

It doesn't really fit into the RE part — i.e. 'retire early' but it does fit into a part of the puzzle for long-term planning.

The main benefit of a Roth IRA is tax sheltering a portion of your assets that you intend to withdraw at age 60+.

In a Roth IRA, you can make contributions up to $5K or so per year after taxes.

Those contributions can be invested and if they grow, you aren't taxed on any of the gains or when you withdraw — but only after age 60.

More advantageous to keep things like REITs and fixed income (bonds, treasuries, etc.) in a Roth, for example, since bond coupons and REIT dividends are taxed higher as ordinary income if held in a normal brokerage account. Inside the Roth IRA, they're not taxed, which allows them to compound more aggressively.

AFAIK, you can withdraw your contributions any time without penalty, but not the gains until age 60.

* Consult your financial planner, etc *
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#66
A couple of things I like about the Roth IRA:

-You can withdraw the principal at any time without penalty.
-Given that it's a retirement account, it's well protected against creditors or people suing you.
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#67
You can pull out contributions to a Roth IRA at any time without taxes or penalties.  You can pull out a Traditional IRA to Roth IRA conversion five years after the conversion occurs without taxes or penalties.

A common approach with FIRE people is to do a Roth conversion ladder.  Meaning they contribute to a Traditional IRA over the years, and then periodically convert amounts to Roth, paying applicable taxes on each conversion.  There is a five year countdown from the year of each conversion.  The idea with the ladder is that you minimize taxes by controlling which tax bracket you're in when doing the conversions.  And the five year countdown expires on each conversion over time, adding to your stack of cash in your Roth that you can take out at any time.

This works particularly well if you have some control or predictability of your tax brackets in the future.  For example, if you contribute to a Traditional in a high state income tax state like California, and then move to a zero state income tax state like Florida, and then do your conversions there, you are arbitraging and saving the state income taxes you'd have to pay.  Or if you are planning on not working at all at some point, that is also a strategic time to do the conversions.

With the Roth IRA, you can also pull out $10,000 in earnings tax and penalty free as a first time home buyer if you meet certain requirements.

In general, I recommend people to just contribute to Roth, as it's usually better.  If you have some more complex scheme, such as the above, you can also leverage Traditional.  Another thing to note is that Roth income limits are lower.  So if you are anywhere near the Roth income limits, you should do a backdoor Roth, which is basically an immediate Traditional to Roth conversion.  There is a specific way to do this so you don't get fucked though.  Also if your employer supports it, there is the Mega Backdoor Roth, which is amazing, but relatively rare.

Also, as far as real estate goes, it's possible to set up a self-directed IRA, which you can then make alternative investments in.  For example, real estate syndication.  This is a whole other involved topic that I haven't explored much though.
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#68
(05-06-2021, 05:22 PM)WombRaider Wrote: A couple of things I like about the Roth IRA:

-You can withdraw the principal at any time without penalty.
-Given that it's a retirement account, it's well protected against creditors or people suing you.
I used to think along the same lines until recently.  However, I am on the cusp of cashing out of my ROTH and my Trad IRAs to purchase a multifamily property that cash flows and multiplies my wealth more quickly.

Yes, I will have to pay a 10% penalty on both, but that is a small price to pay for turbocharging my cash flows.

Wall Street has a tendency to skillfully convince millions of people that they should hold their money in tax sheltered accounts until age 59.5.   There is no guarantee that we will live to age 59.5, and for those of us who do, 59 is pretty much past the time when you can enjoy it in ways you can do when you are younger.

So that is my contrarian reason for planning to cash out early and enjoy the monthly income fruits of that money.  I see the 105 tax penalty as just the cost of doing big business.
Have you ever noticed it is your haters who obsessively read your every post, comment on them with the most emotion, and expend so much energy desperately trying to engage you?  It's because haters are your greatest, most loyal, and dedicated fans; they just have not come to terms with it yet.  Enjoy them because they are the surest sign that you're slaying it in life!  Big Grin
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#69
(05-06-2021, 09:03 PM)Contrarian Expatriate Wrote:
(05-06-2021, 05:22 PM)WombRaider Wrote: A couple of things I like about the Roth IRA:

-You can withdraw the principal at any time without penalty.
-Given that it's a retirement account, it's well protected against creditors or people suing you.
I used to think along the same lines until recently.  However, I am on the cusp of cashing out of my ROTH and my Trad IRAs to purchase a multifamily property that cash flows and multiplies my wealth more quickly.

Yes, I will have to pay a 10% penalty on both, but that is a small price to pay for turbocharging my cash flows.

Wall Street has a tendency to skillfully convince millions of people that they should hold their money in tax sheltered accounts until age 59.5.   There is no guarantee that we will live to age 59.5, and for those of us who do, 59 is pretty much past the time when you can enjoy it in ways you can do when you are younger.

So that is my contrarian reason for planning to cash out early and enjoy the monthly income fruits of that money.  I see the 105 tax penalty as just the cost of doing big business.

You're not worried about the property bubble?
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#70
(05-06-2021, 09:47 PM)churros Wrote:
(05-06-2021, 09:03 PM)Contrarian Expatriate Wrote:
(05-06-2021, 05:22 PM)WombRaider Wrote: A couple of things I like about the Roth IRA:

-You can withdraw the principal at any time without penalty.
-Given that it's a retirement account, it's well protected against creditors or people suing you.
I used to think along the same lines until recently.  However, I am on the cusp of cashing out of my ROTH and my Trad IRAs to purchase a multifamily property that cash flows and multiplies my wealth more quickly.

Yes, I will have to pay a 10% penalty on both, but that is a small price to pay for turbocharging my cash flows.

Wall Street has a tendency to skillfully convince millions of people that they should hold their money in tax sheltered accounts until age 59.5.   There is no guarantee that we will live to age 59.5, and for those of us who do, 59 is pretty much past the time when you can enjoy it in ways you can do when you are younger.

So that is my contrarian reason for planning to cash out early and enjoy the monthly income fruits of that money.  I see the 105 tax penalty as just the cost of doing big business.

You're not worried about the property bubble?
Not at all because a housing bubble would work in my favor.   When homes become unaffordable to many, that's when multi properties can charge even more rent due to higher demand.
Have you ever noticed it is your haters who obsessively read your every post, comment on them with the most emotion, and expend so much energy desperately trying to engage you?  It's because haters are your greatest, most loyal, and dedicated fans; they just have not come to terms with it yet.  Enjoy them because they are the surest sign that you're slaying it in life!  Big Grin
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