Millionaire Librarian

A Middle Class Path to Early Retirement

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  • Living on Your Portfolio in a Uncertain World.

    I invested roughly 50% of my income for about 15 years, and during that time, I actually welcomed recessions. Working a stable government job provided a sense of security; when the stock market fell, I saw it as an opportunity to buy stocks “on sale.” I vividly remember the sharp COVID-19 downturn, during which I increased my 401(k) contributions and worked toward maxing out all my tax-advantaged accounts. 

    For the last year and a half, we have been living primarily off my investment portfolio. I would say “entirely,” but a few months ago, my wife was offered a part-time, remote position that now covers much of our expenses.

    Being retired has felt different. There was a brief downturn around April 2025 triggered by new tariffs. I remember feeling more worried than usual and discussing those concerns with my wife and neighbor. Despite the anxiety, I stayed invested, and the market eventually rebounded. To prepare for such moments, I had already set aside a couple of years’ worth of expenses in bonds to help smooth out the ride during a downturn. 

    When you retire—whether early or at a traditional age—you have to contend with “sequence of returns risk.” This is the danger of the market facing a sustained decline early in your retirement. If a retirement plan fails, this risk is almost always the culprit. In April 2025, that was exactly what I feared.

    I use Projection Lab, which can run hundreds of scenarios using Monte Carlo simulations. It provides a percentage indicating how many of those scenarios your portfolio “survives.” Even before my wife returned to work, we had a 97% success rate, which accounted for extreme scenarios like depressions and stagflation. In hindsight, I shouldn’t have been worrying at all. 

    I believe your first major recession as an investor tests your psychology and knowledge. It is not unusual to lose more money in a short period than you managed to save the entire year. However, your first recession while retired is an even greater test because you no longer have the safety net of a steady income. You are forced to rely entirely on probabilities, numbers, and established guidelines.

    Roughly a week ago, the U.S. and Israel launched military strikes on Iran. Now, everyone is concerned about oil prices and global trade. I have spoken with people who believe “this time is different”—a famous, yet often shortsighted, phrase in the investment world. While this situation feels more serious than the tariff issues that worried me previously, I feel far better prepared for this potential downturn because I have been down this path financially before.

  • Worn out from the Galapagos.

    We just returned from 10 days in the Galapagos and a full 20 days with my in-laws, who first visited us in Cuenca and then went with us to the islands. Traveling was fun but exhausting. We had to spend two days traveling to and from the Galapagos; we had to fly from Guayaquil, and the flights and car rides didn’t line up in a way that allowed us to do it realistically in one day.

    This was our first time leaving Cuenca since we arrived seven months ago. One thing we came away thinking was how lucky we are to live in Cuenca. We loved the tortoises, sea lions, and marine iguanas. It was a nature lover’s paradise, but it was so hot. I think we have gotten used to the constant 50–70 degree weather in Cuenca. Our small hotels didn’t have central A/C, and going out for a coffee or a meal meant facing the heat, often without a localized A/C unit. After a few days, the heat—which we weren’t used to—fatigued us for much of the day.

    The Galapagos was also much more expensive. Almuerzos, which are $3.50 in Cuenca, were $6 in the Galapagos. Often, dinner entrees were similar to those in the U.S. at around $15–$20 each. Large beers at tiendas were about half the size and twice as expensive at $5 each.

    Cuenca also has much better infrastructure than either Guayaquil or the Galapagos. Buildings and roads look better. I also prefer looking at mountains than the ocean.

    Though I am complaining, it was an amazing experience and probably one that will only get harder the older we get, so I am glad we did it now and have some great memories like being chased off a bench by a sea lion and watching as two giant tortoises argue over territory.

  • Family of Three Cuenca, Ecuador Budget

    Family makeup: Two near 40 year olds with a three year old toddler.

    We moved to Ecuador around 6 months ago. We recently moved into a new house. This covers our day to day living. Larger one time expenses have been removed like purchasing beds and other large household goods.

    Expenses:

    Food and Many Household Goods 630

    Rent 450

    Transport 45

    Preschool 265

    Health 195

    Apparel 160

    Other 141.50

    Alcohol 132

    Restaurant 107

    Utilities and Phone 92

    Social Life 85

    Culture 50

    Gift 48.10

    Beauty 10

    Total:2410.60

    There are other expenses that must be paid less frequently than once a month, such as medication, which can be quite expensive. I discovered that one of my medications, which costs around $20 for a three-month supply in the States, costs about $150 for three months here. If you are concerned about these unexpected costs, you can use local pharmacies to check the price of individual pills. Here is a pharmacy we found to be slightly cheaper than the others: 

    https://www.farmaciassinai.com/

    If you can’t find the exact medication you are looking for, check to see if it goes by a different name in Ecuador. Your favorite AI might be able to help you find the local names for your prescriptions.

    I should note that I am planning for our future expenses to be around $2,500–$3,000. Aside from the furniture we purchased, I think we had an unusually lean month because we were tightening our belts in other areas to compensate for the additional spending.

    Updated January Budget (Furniture expenses removed): $2,974.40

  • An Argument Against Conservative Portfolios

    Something common among older generations is that they take little risk with their portfolios. Many people prefer the safety of CDs because they have worked hard for their money and do not want to risk it on investments that can drop dramatically.

    The problem with “safe” investments is that they lose money annually to inflation, as their returns often barely match inflation rates. Inflation destroys the purchasing power of your money over time; at 3% inflation, approximately half of your money’s value is lost after 24 years. To achieve growth, one must invest in assets that provide a sizable return, such as stocks.

    Over the last 15 years, the S&P 500 has returned 13.8%. To achieve this higher return, you must withstand the volatility of the stock market, which can experience sharp declines but has historically always returned to all-time highs. However, many economists argue that past returns are not indicative of future results.

    Whether you want to be more conservative or more aggressive with your portfolio, you manage this through asset allocation. This means adding more bonds to reduce risk or more stocks to increase growth potential. Regardless, I would be wary of holding less than 60% in stocks, as you would lose the growth engine that propels a portfolio forward.

    The problem with aggressive portfolios is that people sell when there portfolio falls. Like JL Collins says you must tie yourself to the mast and withstand the storm. If you can’t then our advice will leave you bloody and in the ditch.

  • Groceries and Food in Cuenca, Ecuador

    Every week we take two trips to the local mercado, or market, to buy fruits and vegetables. If we go early in the morning, we usually get breakfast there consisting of slow-roasted pig, or hornado, which costs around $3 a plate. After that, we get a pound of strawberries, a pound of cherries, a giant zucchini, 4 oranges, and around 15 small Pink Lady apples (my daughter loves them) for around $8. We do this twice a week, sometimes getting more items like mushrooms or tomatoes, and sometimes a little less. This habit keeps our house filled with inexpensive and fresh fruits and vegetables all week long.

    Another trip we take is to Tuti. Tuti closely resembles an Aldi. It has staples like chips, cookies, cheese crackers, cheap wine, spaghetti, and frozen meats like ground pork, chicken, ground beef, and shrimp. Everything at Tuti is inexpensive and shelf-stable. Even the milk here is ultra-pasteurized and only needs to be refrigerated when opened. Usually, a trip here where I walk out with two very heavy bags of groceries costs between $60–$80 for the week. You can also get paper products, toothpaste, and cleaning products here.

    The other favorite place for us to get food is dining in our local almuerzo spot. Almuerzo means lunch and is a national treasure. These lunches usually include a large soup and an entree with a smaller portion of meat, small salad, and large portion of rice with a tiny dessert like a cube of jello or piece of fruit. All together it is a large meal and usually costs between $3 and $3.50 per person. Almuerzo spots are everywhere in Ecuador. In our very residential neighborhood, we have an almuerzo spot about a 3-minute walk away. While walking there yesterday, we saw some lounging cows.

    Cuenca also has several great dinner spots. These are usually a bit more expensive but serve exotic meals like Indian, Thai, sushi, homemade pizza, and giant fried seafood plates. Though these range in prices, you can expect to spend between $10–$20 per person for most of them.

  • Residency in Ecuador

    My wife and I get a lot of questions about the residency process in Ecuador and how we chose this country.

    When choosing a country to move to, you need to research which countries will take you. Are you a digital nomad, or do you have a needed skillset? That may qualify you for one type of visa. Do you have a pension, or do you want to invest heavily in a country? Something to think about is how hard it will be to get your money back out. How risky are the new country’s banks, real estate, or stock markets?

    When we started looking, we originally researched Panama. Their Friendly Nations investment visa required a $200,000 investment, which was too expensive for us. We put our dreams of moving overseas on the back burner.

    Later, we heard about Cuenca, Ecuador. Ecuador had its own investment visa for around $50,000. This amount was much more doable for us. We contacted an immigration lawyer, and they told us about an even better option: the Professional Visa. This visa required a bachelor’s degree that was earned in person. Fortunately, either of our degrees could be used to get residency that way. We also had to prove about $1,200/month in income via our bank accounts. Your amount may vary depending on the size of your family.

    The hardest part of the process was getting all of our documents—including our degrees, marriage certificate, background checks, and birth certificates—apostilled. We also needed a letter from our university confirming our degrees were taught in person. Apostilling is a long process and is completed by different entities in each state. At one point, we were driving across state lines to gather documents and then driving across the state again to get them apostilled. I recommend talking with your lawyer’s office about the timeline because some documents are only valid for a short time. Overall, it’s a nerve-wracking experience.

    Something else to consider is that once you have temporary residency, you have 90 days where allowed out of the country over two years if you want to obtain permanent residency. If you spend too much time abroad, you have to start the whole process over again. In my experience, having an immigration lawyer to assist you with following all the rules is mandatory. For temporary residency, our lawyer cost around $3,600, which included all government fees. Once we have permanent residency then the rules surrounding our travel lessen dramatically.

  • Will We Go Back to the States?

    We have a visit to the states planned next December mainly for my nephew’s wedding. However, today my wife asked if with all the political turmoil if we still wanted to return and she asked what would have to happen to not return?

    I know that most of the political violence in the US is localized to a couple of cities. That would be the main thing that would have to change for us to not come back. Political violence would have to spread to more cities.

    Also I know that being able to go outside in the states and look around in your neighborhood does wonders. Ecuador currently is a dangerous place to live, but inside Cuenca and especially inside our neighborhood it is especially safe. See my post about Cuenca being one of the safest cities in the Americas. I know that the US is similar. Most places in the US are safe despite the political violence in a few select cities.

    Another aspect on visiting is that we would have to get insurance for the visit. This isn’t a huge deal but in Ecuador health insurance and care is affordable. It is just not in the states.

    This is all short term decision making. What about the long term? For the long term, I do not see us returning for a while. Life is sustainable here with my wife’s part-time job and our portfolio. Also the German private school Eleanor will attend is leagues ahead of anything that would be available to us in the states. That means we might be here for 15 more years.

  • Is Cuenca Safe? A 2026 Perspective

    When people ask us about our life in Ecuador, the most common question we get is: “Is Cuenca safe?”

    This question often stems from a lack of familiarity with South American geography and politics. It is easy for those outside the region to lump all these countries together, but safety varies significantly by location. While parts of Ecuador—particularly along the coast—struggle with safety issues due to drug smuggling routes, Cuenca remains a distinct and secure exception.

    Life on the Ground

    We walk almost everywhere and have never personally had a problem. Like any major city, pickpocketing occurs in high-traffic tourist areas, but these spots are regularly patrolled by police and private security. You will also notice a visible security presence at banks, malls, and high-end stores; rather than being a cause for alarm, most residents welcome this as a proactive deterrent.

    Community Justice and Vigilantism

    One unique aspect of the local culture is the concept of communal vigilantism or “community justice.” In areas where residents feel the law is too slow to act, they may take matters into their own hands. A local friend once told me that if someone were caught selling drugs near a school, the entire community might mobilize to physically punish the offender. While these “Citizen Brigades” are a part of the cultural fabric, the police frequently remind the public that such extralegal actions remain illegal.

    The Numbers: Cuenca vs. The U.S.

    Statistically, Cuenca is consistently rated as the safest city of its size in South and Central America. When compared to the United States, it is often safer than 95% of comparable cities.

    • Cuenca’s Homicide Rate: ~6 per 100,000 people.
    • Chicago: ~29 per 100,000 people.
    • Memphis: ~44 per 100,000 people.

    Despite these reassuring statistics, we still practice common-sense safety. We stay aware of our surroundings, research the neighborhoods we visit, and rarely venture far from home late at night. In 2026, Cuenca remains a beautiful, liveable city where the reality of safety far exceeds the negative stereotypes of the region.

  • Accessing Retirement Funds Early

    Imagine a path to financial independence, a road less traveled that lets you ditch the daily grind long before the “official” retirement age of 59½. It’s not magic, it’s knowing the rules and using them to your advantage. Think of your retirement accounts not as an untouchable fortress until some distant date, but as a resource you can strategically tap.

    One simple tool in your arsenal is the Roth IRA contribution withdrawal. Consider this your personal bridge money. The money you put in – your direct contributions – is always yours to take out, anytime, for any reason, without taxes or penalties. It’s like having a readily accessible emergency fund right there in your retirement account.

    Roth IRA Ladder

    Now, let’s talk about the bigger prize: the substantial savings you’ve built in a 401(k) or Traditional IRA. Accessing this pre-tax money early without penalty requires a strategy called the Roth Conversion Ladder.

    Picture this:

    • You take a portion of your pre-tax money, say from an old 401(k) rolled into a Traditional IRA.
    • You convert a specific amount of that Traditional IRA money into a Roth IRA. You’ll pay taxes on this conversion, but you choose the amount, controlling your tax bill.
    • That converted amount then needs to “season” in the Roth IRA for five full years.
    • After five years, that converted principal amount is free to withdraw, tax-free and penalty-free.

    It’s a step-by-step process that, over time, allows you to systematically access your retirement funds before 59½.

    Tax Optimization

    Another powerful concept to consider is optimizing your tax situation during these conversion years. By strategically managing your income and conversions, you can potentially utilize the standard deduction to significantly reduce or even eliminate the taxes owed on those conversions. It’s about being smart with the tax code, not avoiding it.

    Understanding these concepts is key to building your own path to financial independence. However, these strategies can be complex, and individual situations vary greatly. Some software I utilize is ProjectionLab.com. With ProjectionLab you can see the future money ramifications projected out into the future.

    Addendum 1: A video of Money with Katie explaining the strategy: https://www.youtube.com/watch?v=qlAGqQnly6I&t=168s

    Addendum 2: An article written by the Mad Fientist on the strategy: https://www.madfientist.com/how-to-access-retirement-funds-early/

  • Financial Expert Short Biography: Ramit Sethi

    Ramit has grown in popularity with his 2023 Netflix Series How to Get Rich and his book I will Teach You to Be Rich. His Netflix Series involves discovering the money patterns of couples that are preventing their prosperity. Ramit is very emotionally intelligent and leans on his education in Social Psychology for insights into his guests.

    One of Ramit’s key reoccurring ideas is his belief in selective frugality. He believes you should “Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t”.

    I agree with this idea but I would like to further categorize items into the extremely expensive categories like cars and houses. Items in this category you can really only afford to have one that is really nice. They just take too much money to maintain. For most people, having both a relatively expensive car and house will leave you in a situation where you will have payments forever. Ultimately, you want to pay off a car or house by possibly making extra payments so you can divert that cash into investments like index funds which have a high return.

    There are moderately expensive categories like clothes, vacations and hobbies where you can spend heavily on one or two without breaking the budget. Generally these don’t take much maintenance cost which means you aren’t obligated in paying them for years or decades. That is unless you buy them on credit which is another issue.

    The last category is things you should spend freely on like coffees, snacks, and some meals. Personally, I load myself up on these small indulgences whether that might be fresh fruit twice a week from the mercado or artisan breads. For Christmas, we got an artisan, smoked ham which would fall into this category. This doesn’t have to be food. It could be a convenience like our well-priced cleaning service.

    A category that stands alone from others is buying your financial independence and is what I buy with my money. This is the money used to buy investments so that you have the financial freedom to make bold moves. Financial independence isn’t an all or nothing thing. Having some financial independence may give you the bargaining leverage and aggressiveness to demand more money or take a few months when your new manager makes unreasonable demands.

    Which of Ramit’s ideas resonates with you? Comment or feel free to write me what you think.