Hello, I’m back! Thank you for all the comments and emails while I’ve been away, great to come back to

We had an absolutely wonderful time; we loved the Lisbon coast area, every thing about it; the beaches, the weather, the people, the towns, the proximity to Lisbon {30 minutes by train}.

So, after three years we have a real idea of where we want to live in Portugal. I think for me, who loves the city, being able to get into Lisbon and back for four euros was one of the main deciders.

We’ve come back with renewed vigour for attacking our goals {this always happens after a holiday doesn’t it?} and I’m really excited to getting saving money and get our house finished, after all there’s only two years to go!

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 {photo credit: Hans}

If you’ve been reading this site for the last few weeks you’ll probably know this already, but after thinking for a long time that we would rent our house out when we move abroad, we have now decided to sell it.

There are a few reasons why we are doing this, the main one being freedom; we want the ability to choose where we live, just for the short term, and we want to experience mortgage {debt} free living for a while; I should say I’m not against mortgage debt, and I’m sure in the future we will have a {small} mortgage again.

Other reasons; we don’t want the hassle of renting a house out in a different country; we’ve read too many problem filled stories. Also at the moment neither of  us utterly convinced that home ownership is the be all and end all, something recently confirmed by a matter affecting my mum and step dad; I don’t want to get into the environmental for’s and against of this subject but from a purely house ownership angle it’s not good. After living in their house for over 30 years they are now faced with high speed trains going past their back gate and through land they use for {income producing} haymaking,  if they wanted to, or needed to sell, it would be impossible at the moment, the planning etc is going to take months/years and residents are trapped.

So, please let me know your thoughts, good or bad

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{photo credit: padawan}

…dream big.

I like to live small and dream big. In my dream I’m running a small bed and breakfast/guest house, not too far from the sea in Portugal, and it’s simply decorated like this house.

What about you, what are you dreaming about today?

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{photo credit: david july}

I posted last week about how we were replacing the windows in our house ready to rent it out in 2012. This post lead to a very interesting discussion between Tony and Anna {regular readers} about the good and bad of renting versus owning your own home.

There was something that Tony said that has stuck with me,

I still think renting out is the right decision financially, but there is something remarkably liberating about the idea of selling up completely.

There have been countless debates about the financial ramifications of renting or owning your home, but to me this decision is becoming more about being free; free from the 9-5 and free from any debt, including mortgage debt.

Are we too conditioned in the UK to thinking that owning a home is what we must do, is renting a better option? – I say this as someone who has a had a mortgage for 24 of her 26 adult years!

{There are options of course to use the small amount of equity from our house sale, buy small in Portugal and still be mortgage free.  But is this what we want?  It would almost certainly be inland and further from the sea}

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{photo credit: Stewart}

This is the first guest post on this site and it’s entirely fitting that it’s written by Tony, a regular reader and commentator who is on a very similar path to our own.

Tony plans to move abroad in 2012, and like us he’s not doing it with millions in the bank. Reading his post highlights just what you can achieve if you put your mind to it.

In this guest article I’m going to talk about my plans to retire early to Asia. I first developed the plan a few years ago, after having travelled in Thailand, Malaysia, and Japan. In particular, after one trip to Thailand, I decided to look into the feasibility of early retirement to Thailand. Having researched visas, land ownership regulations and cost of living, I decided it was an idea that was certainly within the realms of possibility. Some of my research was actually done “on the ground” in Thailand – I rented an apartment in Bangkok for a few months, and remote worked. I estimated that I would need around 55,000 Baht per month to live comfortably in Bangkok – at today’s exchange rates that is around £1000 per month. A retirement visa can easily be obtained from age 50 in Thailand, as long as sufficient proof of funds is available. A retirement visa has the advantage of you not having to exit and re-enter the country every 90 days, something that is required with other types of visa. 

Having established the feasibility, and cost, the question arose – how was this income going to be generated? I decided that keeping a house in the UK,  and renting it out, would be the way to go. This not only gave me an income, but an appreciating asset. Property prices in Asia can be unpredictable at best, and tend not to follow the trends we have become used to in the UK. There are also no end of illegal properties, scams, and regulatory issues. It is not legal for foreigners to own land in Thailand for example, although there are several dodgy ways around this, it’s not worth it in my opinion, especially as excellent quality rented accommodation can be had at low cost. My penthouse apartment in Bangkok cost around £300 per month, negotiated down from £500 per month. It had fantastic views over Bangkok, 24-security, two very large swimming pools, balcony, two restaurants, maid service, bar, a mini-mart, a huge gym with saunas, plunge pools, massage, the latest exercise equipment, broadband, and a jazz quartet playing once a week in the lounge bar area! Try getting that for 300 quid a month in the UK!!

It was apparent that in order to maximize my rental income, I would need to pay down as much as possible on my mortgage (the practicalities of that would take another article!). Even so the rental income was projected to be around £700 per month, and more like £400 net, leaving a shortfall. I decided that this shortfall could be made up through an online business, and/or part-time remote working/consulting. Part-time English teaching would also be an option, but it’s poorly paid. OK, so now we were talking semi-retirement, rather than full retirement, but it was better than the alternative of working until I drop dead in the UK! If my online business and remote consulting work could bring in £600 per month I would be comfortable. Anything more would be a bonus. Having already had experience of remote working from Bangkok, I felt this would be the best option, and I would only need to work a couple of days a week to have more than enough income.

So the next question I faced was when to “retire”. I would be 50 in 2012, so that seemed a good target date, as I would qualify for the Thailand retirement visa at that time. In 2012 my outstanding mortgage balance is projected to be £9,000, and savings projected to be £32,000. The capital requirements for a retirement visa are currently around 800,000 Baht, about £14,500. Alternatively, you can demonstrate income of 65,000 Baht. If I was prepared to exit the country and re-enter every 90 days, I could forgo the capital/income requirement. As my fixed interest rate mortgage ends around 2012 I would also have the option of paying off the mortgage completely, giving me a slightly greater monthly rental income. If I delayed by one year I would have a mortgage balance of 0, and projected savings of around £41,000. In subsequent years I’ve calculated I would be able to save at a rate of £18,000 per year (with no mortgage). This would obviously build my capital rapidly. This leads to an interesting dilemma – keep working to build capital, or take time out to enjoy the delights of Thailand – especially the scuba diving? Tricky one. This did beg the question, how long would I need to continue working for, before I was financially independent via rental income and savings interest? I have not yet done that calculation in detail, as current interest rates on savings are far too depressing. However, £100,000 at 4% would be £4,000 per year, or £330 per month. Combined with the rental income that would just about be a live-able income, especially out on one of the islands. It would, however, take me until 2016 to save £100,000. Would the extra 4 years be worth it to become fully-retired, rather than semi-retired?

What I’ve found though are there are almost an infinite number of permutations in the retirement/relocation game. For example, staying in the UK and contract working, and then living (but not working) in Asia for six months of the year is also an option. I’ve already tested this out and it worked well. Also, relocating within Europe and continuing to work would be another option with its own pros and cons. At times it can be confusing, so I think this is where having a concrete idea of when and where you want to go to can really help narrow down the options. Sometimes though it’s like there are too many choices! That is actually a good thing though!

At the moment I’m still sticking with my 2012 retirement date. Back in 2004 I was left with a large debt and no assets due to divorce, so I think going from broke to semi-retired in just 8 years, or to fully-retired in 12 years, is not bad going at all. It’s also worth pointing out I earn a modest salary – I am no high-flier. When I first started really analyzing my finances I was about £100 in the red each month. I have turned that around to the point where I am saving £500 per month and overpaying on the mortgage by £500 per month – on more or less the same salary. I think that shows how much money I was wasting through a combination of a consumer mindset and bad management! If you had told me back in 2004 I could potentially be retired within a decade I would have thought you were mad. It still amazes me how financial situations can be rapidly turned around.

I think having objectives for retirement is important. I have a great interest in diving, so I know that will be part of my retirement. I would also like to get involved in travel writing, photography, and I have a couple of ideas for online businesses that I would like to launch. I’m also a keen swimmer and runner, so keeping fit would also keep me occupied for a good chunk of the day. Having these goals in mind leads to a more rewarding retirement.

Good Luck with your own retirement plans!

Thank you Tony!

{photo credit: IMP1}

My leaving work in a few weeks time is causing a such a rush of thoughts about our future , and how we see ourselves living it, that I thought it might be a good idea to transfer it all from brain to paper.

• Live near to the sea
• Live somewhere we can walk everywhere
• Shop local
• Live small and low maintenance
• Live on less than £1k per month
• Live easily on one salary, save or travel with any other
• Live frugally
• Be non consumers
• Cook from scratch
• Do it ourselves
• Live well on less
• Recycle and reduce
• Retire early
• Stay healthy
• Quality of life
• Live debt free including mortgage
• Live in the sun

The first things that came into my head, all a bit random but nearly all based on simple living in the sunshine.

{photo credit: beepbeep_car}

This week I’ve started to read a book called Getting A Life after it was recommended by Tony. The book is about real lives transformed by the nine steps of Your Money of Your Life. So far it’s great; it really sums up how we feel about escaping the rat race and simplifying our lives. The title of the book couldn’t be more appropriate.

We still have such a long way to go on the nine steps of the programme to reach Financial Independence, but we have made a start. We’ve banished consumerism and we live frugally, now we just have to save, save and save.

The steps in YMOYL recommend doing what you gotta do for a ‘finite period of time’ to achieve FI and we’ve adapted this slightly to fit our lives. We put a definite timeline on our move to Portugal because we didn’t want to keep drifting along, doing what we’re doing, with no end in sight. We also know that when you have a good salary it can be difficult to walk away into the unknown and not to keep thinking that one more year won’t hurt. We made a decision jointly that when July 2012 comes, we are going to Portugal.

Financial Independence will come later than 2012, but we plan on living very simply in Portugal and continuing towards it.

 {photo credit: sousagraphy}

I blogged about getting into the garden in April and it’s taken until now to make a little progress. We’re trying to get it back to (almost) zero so that it’s low maintenance; I have fence painting pencilled in for August and once that’s completed we can start to do little jobs inside the house.

We haven’t decided on a definite plan for our house yet, but we do like the idea of renting it out in the future.

Moneywise we’re still living frugally and saving as much as we can every month; I’m trying not to think about money all the time but it’s a big part of this journey. I’ve been reading the archives of this (UK) blog as it has some excellent (easy to understand) advice on investing and growing your money.

What have you been up to this week?

{photo credit:Ifaisco}

Hi everybody, hope you are all well

You would laugh if you knew how many times dh and I change our mind about Portugal; not moving there, but how to go about it and where to live.

Questions we ask ourselves-

1. City, beach or country? This would all depend on work anyway.
2. Mortgage or rental?
3. Do we sell up here in the next 12 months, rent (in the UK) and buy in Portugal?
4. Do we wait until nearer 2012 to buy in Portugal and risk not selling here for ages?
5. If dh struggles to get work, how will we get a mortgage in Portugal, bearing in mind we will still need one

I like number 3 at the moment; sell next spring when the fixed mortgage rate runs out, rent a small house here, buy a house in Portugal with potential to rent out and use for holidays.

What would you do? If we go with number three I’ll be extremely busy for the next 12 months!

{photo credit: hugo esteves}

The last couple of weeks have been all about work, work, work, but there is light at the end of the tunnel, Monday we’re off to Lisbon for a few days and I can’t wait. It looks beautiful in all the pictures and I’m really ready for a break.

I seem to be in a little slump at the moment and can’t get out of it.  I try to keep this blog happy and upbeat, but at the moment it’s proving difficult. Hopefully when I get back next week I’ll be feeling refreshed and ready to take on the next few months.

{photo credit: pedrosimoes}