Millionaire Librarian

A Middle Class Path to Early Retirement

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  • Tying Loose Ends in America.

    After months of selling household goods and cars, we are only a few weeks from taking a one way trip to Ecuador. Things are calm for now, but once we get in Ecuador more decisions will be made like where we want to live and if we will need car.

    Currently we are trying to decide if we want to live in the country or in the city. I enjoy living in the country and have never lived in a city before. However, if we choose the country then our daughter won’t be able to attend a daycare and we will need to buy a car which are shockingly more expensive in Ecuador. Living in the city means more walking and taking buses. Lately, my leg hasn’t been causing me pain, but I worry that the change of suddenly walking miles a day may aggravate it.

    My wife, Lauren, has done an amazing job researching neighborhoods and daycares and she mailed off our immigration paperwork a couple of weeks ago to our lawyer.

    The stock market has been floating frothy near all time highs for the last few weeks. The market has become somewhat calloused in regards to presidential announcements. Overall life is great and once some funds settle I plan to be at a stable 15% bonds that will help “smooth the ride” as JL Collins often says.

  • Cash Reserves and Emergency Funds

    One area of my finances I have been poor at managing personally are known as cash reserves and an emergency fund. This money is set aside for unexpected life occurrences. Car repairs, vet bills, and hospital bills all can dig into our cash funds and if there isn’t enough there then you may have to go into debt to float those bills. Therefore, every money guru I know recommends a cash set account aside usually designated in months of expenses. 3 months may be enough if you have steady job, no loans or other financial liabilities, and are single. However, the more financially complex your life is then you will usually want to increase this amount from three months up to a couple of years.

    Personally, I keep 6 months of expenses in cash and 18 months in a bond index fund. The bond index fund is more volatile than cash but it also will make some money over the long term. The rest of my money is in stocks which are very volatile but will make the most money over the long term.

    You may be asking how I know whether to draw down bonds or stocks in case I need the money? Its mostly common sense. Since I am living entirely off of my investments I spend cash and replace it with stocks if the market is at all time highs or less than 5% percent down. If the market is more than 5% down then I pull from bonds to replace spent cash. Once the market recovers I replace the bonds with stocks and we start again from new.

    By holding 2 years of conservative assets in bonds and cash then I should have 2 years for the market to recover. If you have a bleaker outlook on the future then you may wish to have 4 years in conservative assets.

    Either way is fine but I feel that for me 2 years of conservative assets protects me enough without giving up too much long term growth (stocks).

    If you are unsure what end of spectrum you may be at then try to picture yourself in a falling market due to a radical political environment, a global financial crisis, or a pandemic and keep in mind noone knows when it will change or end. How do you feel? Whatever the negative feeling in your gut you feel then magnify it a few times and that will probably be the reality for you.

    There’s no one clear answer for anyone and you will need to meditate on these thought exercises. Personal finance is personal.

  • Downtime in Southern Florida.

    For the last few months we have been selling, giving away, and throwing out all of our possessions in preparation for a move to Ecuador. It has been tough at times but each item removed from our grasp is a small step towards our new life. The last items we need to get rid of are our cars which were listed yesterday.

    Largely the stock market has rebounded back to all time highs after Trump’s tariffs inserted instability and volatility into the market and economy. Despite my own political ideas I have remained fully invested and have advised my friends to do the same. This time was different. but the market did the same thing it always does. There was a pullback and then the market marched upwards to new all time highs. Compared to a year ago I have diversified some out of a total market index fund into around 10% bonds and 20% international compared to being 100% in a total market index fund. This change has been in order to smooth the ride and have a variety of funds to go to pull from when I need money.

    According our Monte Carlo simulation in ProjectionLab.com we have a 100% chance to survive and thrive based on our financial needs in Ecuador. However, it always helps to have more money to inflate lifestyle with more dinners out, a home cleaner, and it looks like this is what our portfolio will provide.

    This last year with its pullback has been different mostly because I have not been investing large amounts of money in the economy. Previously I looked forwards to the market retreating and I would watch my contributions buy more and more shares every couple of weeks in my 401k. Having to sell those cheaper shares during this pullback to finance our lifestyle was difficult.

    It has been fun visiting many of my inlaw’s friends who are at traditional retirement age. It often gets mentioned that we are retiring and they ask how. Lauren’s mother often comments saying “Lauren and her husband are very frugal.” Though that is true only when we are compared to other Americans. Generally I would say the main difference is that we have cheaper houses and cars compared to a typical American. We also tend to shop at cheaper grocery stores like Costco or Aldi and try to each eat most meals in. However, especially on this trip many of our meals have been at restaurants because we have been traveling so much. I try to make our frugality something we lean towards and not an ironclad rule that is used to beat down the other person.

  • Combative Egos or Cooperation: A Fight of World Views.

    There’s a battle of world views that is happening on the world stage. The modern Republican view is that there is a winner and a loser in all negotiations. If you aren’t winning then you are losing. This worldview leads to needless combativeness. 

    The other worldview is that each side can win equally in every negotiation.  This worldview first came to me when studying capitalism. The idea is that productivity and goods are part of a pie of pizza. You don’t just get your slice but in real capitalism something is produced and the pie gets larger. Therefore everyone’s piece gets larger.

    If you insert this idea into current politics you may see what I am suggesting. Trump’s destruction of Federal service or international politics in hopes his pie slice is bigger than the other person’s is shortsighted. He is burning the pizza and gloating that his two slices are the best slices on the block. The world needs cooperation; not political toddler tantrums from our president.

  • Gutting the Military of Morale, Welfare, and Recreation.

    I read an article titled, DOD Sets Policies on Consolidating and Eliminating Offices and Civilian Jobs. In the article, they provide a standard where we ask ourselves the question: If we went to war tomorrow would we hire this person to end the war? If the answer is no then they want to privatize or downsize the position.

    I worked as a military librarian for Morale, Welfare, and Recreation (MWR) for most of my 11 years of civil service. That position would be removed under current guidance. 

    During my career, my library provided a host of services for the military community. We mostly served military families. Every week we had the same 30 families come into the library to educate and entertain their children.  They would come to story time, do a scavenger hunt and then each check out 30 books, and some board games and movies. 

    I prided myself on being part of the foundation for the Altus base community. Where we were located was very desolate and remote. It commonly was listed as one of the worst bases to be placed. To be fair, my family loved being there but mostly for the friends we made on base and how affordable it was. 

    All this to say that the base library served as a key area for trying to change that perception. Young airmen would show up during in-processing and I would give them a tour showing them our well-maintained video-games, board games, CLEP materials, and book and movie collections. For entertainment or education we had free materials to keep Airmen from getting too idle and in trouble.

    I don’t think the administration has thought this through. The only other library within an hour was terribly outdated. As a cost saving measure, the library was inexpensive to run. I was told more than once that a single plane airborne for a day was more fuel money than my director salary for a year. Providing materials for dozens of home-schooling mothers is a better use of resources. Without MWR, there will be more recidivism at a time when we can’t afford it.

  • Soon to be Home Sweet Home; Cuenca, Ecuador

    I shortly mentioned in a previous post that my family and I will be moving to Cuenca Ecuador. I want to use this post to share some of our excitement about the move. All of the information in this post will be second hand from watching videos of people already living there and from webpages so there may be some mistakes.

    So Cuenca…

    It was founded on April 12, 1557 has been called the “Athens of Ecuador.” This is primarily due to its old town which is a UNESCA World Heritage site. The old town has many hundreds of year-old buildings and cobblestone streets. These features make the city architecturally similar to Southern Spain with towering cathedrals. Additionally, some Incan ruins still remain in the city.

    The city is a geographical beauty with the Andes in the distance and four rivers crossing the city. The city is around 8k feet above sea level. This can lead to moderate to severe altitude sickness in many people. Cuenca has a highland subtropical climate and the locals say that its climate is “Forever Spring” with a mean temperature of around 60 degrees year round.

    Despite theese amenities the cost of living in Cuenca is extremely low and the barrier for permanent visa status is low as well. Therefore, it has become an expat hub where an estimated 8k-10k North American expats live and call home. As I have said before to friends, the road we are taking has been paved by thousands of others which makes it less daunting.

    We are excited for this move for several reasons, but we are especially excited that our daughter, Eleanor, will easily become bilingual in spanish and have an international experience. We have a daycare picked out and are researching the surrounding neighborhoods. My wife has worked tirelessly on researching daycares, schools, and neighborhoods.

  • The Big Decision I Made Five Years Ago that Allowed Me to Retire at 38.

    The above two houses are very similar. Both are around 1200 sq ft. Both have central air and were updated in the last 10 years. However there are two key differences; the price and the location.

    One house is in rural Oklahoma in a small city of 20k people and the other is in Nashville where housing prices have boomed in the last decade.. Unsurprising to many people, the Oklahoma house costs much less but how much less may be shocking. The Oklahoma house is $80k while the house in Nashville is an astonishing $389k. The old adage rings true “location, location, location,”

    However, what many people don’t truly realize is that by choosing Nashville over rural Oklahoma you are enslaving yourself to decades and decades of work. By picking rural Oklahoma you could retire early.

    In 2020, I chose to live in rural Oklahoma and retired late last year at the age of 38. Though possible for many but not all, I found a position paying 90% of what I would have made in a large city. I bought a cheap house like the one above, and I saved and invested exclusively into index funds until I could retire. I did this on a public servant income where I never made above $85k.

  • Moving Abroad With a Baby Girl.

    My family has tossed around the idea of moving to latin america for years. Initially we were looking at Boquete, Panama. I closed this pathway due to the government requiring a large deposit of 200k in their banks or real estate. That was too much for us.

    A few months ago we discovered Ecuador. We found out they only required a little less than $50k investment and upon further exploration we found out that our bachelor’s degree satisfy a requirement for a temporary visa.

    After much thought and hundreds of monte carlo simulations we have decided to move to Cuenca, Ecuador.

    With the influx of cash from selling cars and household goods we have decided to pay off lingering student loans that will no longer be forgiven.

    Part of my worry about this decision is that we will remain largely invested in the US centric S&P 500. We do not feel good about the future of America or its stock market. However, I try not to base my investment decisions on political changes no matter how extreme so I will remain fully invested mostly in the US.

    Despite these academic beliefs, I am worried. I believe we are the closest to severe recession or depression since the great recession. Tariffs cause inflation and effect the lower and middle classes most. I also worry that once foreign countries move their trade to other countries then they will be reluctant to move it back; especially during this presidency.

  • Learning More about Real Estate.

    Since moving last July we have been renting our house in Altus Oklahoma. That has been a great decision.

    As fate may have it that we will probably be moving back to Montgomery Alabama. There are better work opportunities there than anywhere else at this time for us. Montgomery is also a good area to buy and own rental property.

    Success with the Oklahoma property and us probably moving back to Montgomery has led me to be bitten by the real estate bug again. I have been reading retired Air Officer RIch Carey’s blog since 2019 who has been very successful investing in the area and reached out for some neighborhoods to limit my search. I’ve also found Coach Carson and a great spreadsheet he made about assessing the potential of a property. As a note, I plugged in my numbers for the Oklahoma house and they are excellent.

    All of this research has been entertaining as I have still a lot to learn about real estate. It is a financial frontier with areas I still need to explore. Also looking back at the other two properties I have owned in the past I regret having sold both of them.

    Our plan currently (which probably will change) is to purchase a house to live in and when we move and then use as a rental later. I also want to buy a new rental house every two years with 20% down until we have 4 or 5 total rentals. When I have modeled this scenario in ProjectionLab it has done much better than continuing to invest solely in index funds. The houses will be in traditionally blue collar neighborhoods.

  • Financial Expert Short Biography: Dave Ramsey

    There is a lot to say about Dave Ramsey. On one hand he is probably responsible for helping more people with debt in the US than anyone else.

    On the other hand his views lack nuance and he demands obedience from both his staff, fellow personalities, and viewers.

    Part of what makes him so successful is how he entertains by beating simple messages into followers. Part of this simplicity is because of the fundamental religious foundation of his views.

    There can be little nuance when you believe sin is being discussed.

    Despite this Dave is one of the best speakers against debt when 56% of Americans cannot afford a $1,000 emergency expense. However, he is a debt crusader even when vanquishing debt is not financially optimal like delaying investing to pay off low interest debt.

    After you are finished paying off debt comes the time to start investing and this is when his advice is especially poor. Dave recommends four types of funds with category names that are vague. All of which you can get through his SmartVestor Pros for very high costs. He also chooses these funds by historical returns. This is such bad advice that it is required by regulatory agencies that “Past returns are not indicative of future returns.”

    Also, his advice fails when he recommends a safe withdrawal rate. He recommends that you can withdraw 8% which is much higher than the Trinity studies proven and tested 4%. This advice is dangerous and his justification is that the market on average returns 10%. The problem with this advice is sequence of return risk. If you start withdrawing 8% during a market downturn you will run out of money in less than a decade. It reminds me of the parable of the 6 foot man who drowned in a river that was on average 4 feet high. Its not the average that you should fear but the extremes.

    Overall I think Dave is somewhat helpful. As a viewer you can also expect to see a good tongue lashing eventually. Honestly his debt advice isn’t terrible. and helps many people get the wake up call they need. However, once someone transitions to investing money they would do much better to listen to the Money Guys, Money with Katie, Kosher Money, or anyone considered a Boglehead,