This is the first in a series of four blog posts on how I would structure my life if I had X number of dollars. For me retirement is all about enjoying traveling. So, I won’t leave that out of my plans, even with limited funds. I will walk you through my mindset on how I would travel, be free, and make some supplemental money along the way.

The first blog we will discuss how I would live on $100,000. I’ll then make it harder as we will discuss $50,000, $25,000 and $10,000 in upcoming blogs.

Here are the parameters, rules, and assumptions

  • Besides the money, the only thing I have in this scenario is my 2001 Lexus Lx470 which has 283,000 miles on it. I recently purchased it for $4,000. (I’m not much on spending money on cars these days. Matter of fact, the most I have spent on a car in the past 9 years is $6,500.)
  • I have sold all of my possessions for $1 and I’m starting out with an empty slate.
  • My skillset is that of a financial advisor. I have some computer skills and of course I have written a book. I have very basic electrician and plumbing skills. I have zero construction and carpentry experience. (I’ve always joked that I’m good at carrying heavy objects and demolition.) So I’ll have to stay within my skillset which is understanding the game of money.
  • This is just a fun exercise on how I would do it. Your way might be very different. With two teenagers still at home, I still have two years before I can take off and roam around. Plus, I have my long-time girlfriend, Deb, who I could never leave behind and she’d be with me.

How would I structure my early retirement if I had $100,000 to my name?

In my book, Retire Early… What are you waiting for?, I write about expats living in foreign countries and I’ve done a lot of research on living abroad. So the first thing I’m going to do is sell my car and buy a one-way ticket to Nicaragua. The cheapest flight I could find was on the website Momondo for $250 from Charlotte NC to Managua Nicaragua. When I searched Priceline and Expedia, I found the prices to be at least double and often times three times the price than what I found on Momondo. The reason is because all of the big travel sites are going to give you Delta, American and United quotes. Smaller travel sites like Momondo, will incorporate the smaller airlines. My trip to Managua will have me flying on Frontier and Spirit airlines.

Once I arrive in Managua, my goal is to end up in Granada. I’ll take a shuttle from Managua to Granada which is around $20. I find a studio apartment to rent near the center of town for $450 a month which includes water, electricity and wifi.

(Below is an apartment that was available while I was researching but has since been rented, so the listing isn’t linked but you can still check out a video tour of it.)

How to Retire on 100K

Cost of living

I discovered the website, Numbeo, last year. Numbeo can give you a pretty good idea how much certain items are going to cost you in a foreign country.

For example, a domestic beer is $1 in Nicaragua versus $4 in the United States. Utilities are 50% less in Nicaragua than in the United States. With the exception of apples and milk, the cost of groceries are substantially less.

Here is a link to the Numbeo site for the Nicaragua and United States comparison.

The average person in the United States makes $2,703.67 a month after taxes. The average person in Nicaragua makes $303.03.

Nicaragua is recognized as the safest country in Central America.

(Recently there happens to have been an temporary outbreak of violence due to demonstration against the Nicaraguan government. That wouldn’t stop me from going there and isn’t really part of the purpose of this exercise.)

My monthly budget in Nicaragua:

Rent: $450 (utilities included and the studio is furnished)

Cell phone: $20 (I have an iphone 6s – I could exchange out the sim card or just get a prepaid phone.)

Transportation: $30

Groceries: $200

Restaurants: $100

Miscellaneous: $200

Healthcare: $400 (I’d go with a global medical plan with someone like Cigna. Nicaragua is ok for the basic medical but if you need a major operation it might be best to be medically evacuated to another country.Cigna offers medical evacuation in their plans.)

Total: $1,400 a month

How far will my 100,000 go?

Using only the $100,000 I started off with, I would run out of money in about six years, so after a few years of relaxing I need to find a way to generate an income stream.

I’ve reduced my social security due to not paying much into it from age 49 to age 62. My pension got cut in half due to a divorce. So for the next 13 years, I need to generate an income stream to supplement the 100K to get me to age 62.

We all have certain skills that we can fall back on. In a foreign country you could teach english, partner with other expats on small ventures, or learn a new trade part time.

For example, how about buying a business like a hostel?

Buying a business is one option but that might have me working around the clock in the beginning, which I personally wouldn’t want to do. To cover my minimum budget, I’ll need to make $16,800/year ($1,400/mo) to supplement the $100K.

I also enjoy writing and I have a few other books and ebooks in the queue so that could help cover my monthly nut. Let’s say my plan is to write one book and and one ebook a year. This would allow me a lot of flexibility with my time. Having two books a year coming out, I feel like I could at least make $20,000 a year which would give me a bit of a cushion.

But even if I learned a new part time trade or cooperated in a venture to earn income, it wouldn’t be a permanent thing. I’d only need the extra income stream to get me to age 62 (I’m 49 years old now) when I could turn on my social security early and receive approximately $1600 a month in benefits. I also have a pension that I can start three years later at age 65 for another $1400 a month. I’d then have double the monthly income needed to kick back full time.

By moving out of the United States, my $100,000 would go much farther and would allow me a less stressful and more adventurous life.

I could say goodbye to winter and wear a t-shirt and shorts year round, which makes me happy.

Stay tuned for the next in the series of “How would I do it” when I discuss how I would live off of a total of $50,000.

Live free my friends