Moments after opening the Skype video connection, Billy and Akaisha Kaderli smile at me from Chapala, a small town on Lake Chapala just outside of Guadalajara, Mexico. They live there much of the time, enjoying a near perfect climate close to what may be the largest expat colony in the world.
They smile a lot, and for good reason.
In their book, “The Adventurer’s Guide to Early Retirement”, they smile at you from Thailand (pages 7 and 8), Laos (page 9), New Zealand and Vietnam (page 10), America and Puerto Vallarta (page 11) and many other places and pages throughout the book. They share the story of their travels on their website as well.
In the book they make an important distinction —“Financial planners sell retirement as a destination, a fanciful end to all your problems and nervous strain. We say it’s a continuous journey of self discovery to be enjoyed every step along the way.” They see early retirement as a lifestyle, not a goal. They see it as a cornucopia of new possibilities.
I’ve called them because they know this territory. They have been exploring it since 1991 when they retired— although they were not yet 40. They made a fundamental decision: They would rather accumulate experiences than things. As successful careerists they examined the taxes they paid and the expenses they felt were necessary. They decided there had to be a better way. So they accelerated their savings and sold their house and business. They said goodbye to the world of paychecks and work. They have been traveling ever since.
In late April they finished 105 days traveling through Mexico, Guatemala, and Belize. A daily account of their trip and expenses is on their website. Over the entire 105 days their average daily expense was 623 pesos. At 13 pesos to the dollar, that’s about $48 a day.
Do that for a year and a couple would spend about $17,500. To be sure, that doesn’t include non-travel expenses like clothing, telecommunications, and medical care but it certainly keeps alive the idea of a low-cost retirement in another country.
According to the Social Security administration the average workers’ monthly Social Security check is now $1,168. The average benefit for a spouse is $576. That’s a total of $1,744 a month (before Medicare premiums) or about $20,900 a year.
So the dream of a comfortable retirement in another country— the dream I questioned in my recent column on Belize— need not be buried.
“We were disappointed in Belize,” Billy said. “We felt it was not a good value location as a retirement spot. For a vacation, it was great.”
While most expats in the Lake Chapala area live in Ajijic, the Kaderlis live in nearby Chapala. “We prefer Chapala because most of our friends are Mexican,” Billy said. “Also, there is a public park there with tennis courts and now the lake is up and full.” (On my visit there many years ago, a drought had taken the lake to dangerously low levels.)
“A lot depends on your lifestyle. If you try to bring your (U.S.) lifestyle here, it will be very expensive,” Akaisha said. “We try to buy local products rather than imported brand products. A lot of would-be expats like the idea that it’s just like living in the states, but less expensive. It isn’t (if you try to live that way).”
Living in another country, both observed, requires adaptation and flexibility. Part of that adaptation is a willingness to live in a genuinely removed area. They, for instance, prefer places like Caleta de Campo, a tiny village south of Manzanillo on the Pacific coast.
“We like to get involved with the culture. It expands our life,” Akaisha added.
When I mentioned friends who had left San Miguel Allende after a year because they wanted to do more and drink less, Akaisha had a quick response.
“You need to do something other than socialize at happy hour. You need to know what you are looking for.”
“If you want to be useful, there is plenty to do,” Billy said.
Scott Burns is the retired Chief Investment Officer of AssetBuilder, the creator of Couch Potato investing, and a personal finance columnist with decades of experience.