Why I Love Going Backward

I have been told that rowing is the only Olympic sport where we cross the finish line backwards. I don’t know if it is true. But I like the idea of doing something different than anybody else.

Our “Normal” Lifecycle

A traditional life would look something like this:

1. Get born
2. Go to school
3. Get an education
4. Get a decent job (For the next 50 years)
5. Meet a spouse
6. Get some kids
7. Buy a house (We can’t afford)
8. Buy a car (We can’t afford)
9. Going on expensive vacations or getting expensive hobbies (Because your kids left the nest)
10. Retire
11. Die

The main thing as the we get a ton of debt in our young years in order to pay for a vehicle and a place to live.

But why do we do that?

Is it just because everyone else is doing it?

An “Optimized” Lifecycle

What if we turned our life around?

And started to go backward? Just like in rowing.

Yes – we might ending up being the only ones doing so. But what if it makes more sense?

An optimized lifecycle:

1. Get borned
2. Go to school
3. Get an education
4. Work (For the next 5 years)
5. Semi Retire (Either work part time, or seasonal)
6. Do whatever we like (Travel, start a business, etc)
7. Meet a spouse and get some kids
8. Have a 5 year maternity
9. Buy a place to live (We now can afford)
10. Buy a vehicle (We again now can afford)
11. Keep working on projects we love
12. Die

Can you see the difference?

Just Get To The First 100.000 $

Aim for the first 100.000 $ as fast as possible. Then compound interest is going to make sure that you are going to be more than all right.

From there we can do several things with the portfolio:

No Withdrawal

Work part time, or seasonal. And enjoy that you don’t have to work all day.

In 13 years your portfolio will grow to about 300.000 $, and you can now withdraw 5 % of it (15.000 $) which should would do for a semi frugal person.

Withdraw 3-4% Annual

If we feel like working just a bit less, then we can start withdraw a little bit of the portfolio.

3 % annual will make sure we have some passive income. And that we are more than likely to increase that amount every year.

In 30 years your withdrawals will go from 3.000 $/annual to 7.000 $/annual. (Adjusted for inflation).

And our portfolio will be about 230.000 $ instead. (Adjusted for inflation)

Withdraw 5-7% Annual

We can also withdraw even more. If we really don’t feel like working. Maybe because we are on the road travelling most of the time.

By doing so we are risking the whole portfolio is going to vanish within a couple of decades.

And our withdrawals are less likely to increase from year to year.

If we withdraw 5.5 % annual, we will keep up with inflation. And should be able to withdraw about 6.000 $ annual every single year.

Which can make you live like a king in asia for 6-10 months.

After 30 years our portfolio would still be around 100.000 $ adjusted for inflation.

Freedom When it Makes Sense

It makes sense that we have all (or most) of the time in the world to do whatever we like when we are young.

When there is no kids around we literally take the bag, and go for journey tomorrow. And stay away for the next 5 years. If we feel like it.

Being Around Your Kids When it Makes Sense

The only thing kids needs when they are small is attention from their parents.

When they start in school, their friends starts to be more exciting than the parents. Slowly and steadily the will become more and more independent. And in 18 years they will more or less handle things themselves.

Being around our kids when they are 0 to 5 years is not only nice. But a necessity. They can’t survive without their parents at this stage. So why not maximize the time we spent with them when they are small kids?

Buying Stuff When We Have the Money

If we wait to buy houses and vehicles to when we have the money (thanks to compound interest) makes so much more sense.

Our portfolio should grow at about 7 % annual, while the real estate market will grow the rate of inflation 2-3 %. That’s why we theoretically should come out ahead in the real estate market if we have a medium size portfolio as young.

Vehicles are also getting cheaper every year. And with the environmental problems we have at the moment, I personal don’t feel like contributing to that, by buying a gasoline fueled vehicle.