How traveling has helped me get rid of my expensive desires?

Vacations, new cars, fancy hotels, eating out! We all dream about such lavish desires at one point or another in life. We all love vacations. I like traveling and I always fancied traveling for a vacation. When I thought of vacations, I used to think of flying in airplanes, staying at hotels, eating out, going out for sightseeing, walking the beach etc. Planes, hotels, and eating out are a big part of travel experience and they are also a major part of your vacation budget.

I travel for my job

I travel for my job for few months in a year. During that time, I stay in hotels, fly on the airplane, drive rental cars. I also eat out every day. I also make some time to visit nearby attractions, meet friends that are in the area, and occasionally invite Mrs. Millionare Immigrant (MI) for a vacation and enjoy the off days with her. What a dream job, right? Yes and no, I do like my job and like the fact that I get a bigger paycheck when I travel. I also save on the cost of food and gas as all my expenses are paid for by my employer. But staying at a hotel, eating out every day, and driving fancy rental cars is not that fun after you do it for a while.

Hotels are not that special

We all look at fancy hotel rooms and say wow! During our vacations, Mrs. MI always makes sure to take pictures of the “beautiful” hotel room before I “make a mess”. But, after living in hotels for months, you realize that there is really nothing special about hotel rooms. It is not any different from your apartment or house. You get the cleaning staff and new towels every day, but that is not that exciting after weeks or months.

I also get free breakfast at the hotel and sometimes free drinks and snacks in the evening, and they also lose their charm after a while.

Flying on the airplane must be fun

Flying on an airplane is a nice adventure if you do not fly as much. You may love the experience if you were flying for a vacation. I still enjoy it most of the times. I like how in a matter of hours, you can get to an entirely different part of the country/world.

I also like the view from the sky. I always feel so powerful looking down on the land below. I especially like to look at houses and see how ‘tiny’ they look. It amazes me that people have to struggle all their life to own/pay for a ‘tiny’ house on a ‘tiny’ land, which looks really tiny from up there. I always think that all I need to do is to own a bunch of those ‘tiny’ houses and I will be set for life. It looks so doable and I feel motivated.

Back on the subject, I don’t mind flying once every week, which is what I do mostly when I travel for work. On longer flights and in long transits, I sometimes get impatient, but it is not that bad when you know you are getting paid for all of that.

What about food?

Food and drinks are a big part of travel and vacations. Some people travel just for food. I also enjoy eating and trying new food and travel allows you to do that. Eating out every day, twice a day, allows you to play with your test buds and explore the local restaurants to the fullest.

But like everything else, it is only fun for a while. After few weeks, it is not that fun. I almost got sick eating out on one of my first trips for work. I was having a lot of fun eating at local restaurants with my coworkers and after about a week, I did not feel like eating anything. I remember coming back home to Mrs. MI’s lovely home-cooked dinner, and I could not eat anything at all. It took a few days of the home-cooked meal before I gained my appetite back.

You will pretty soon realize that nothing can beat a good home-cooked meal. After eating the greasy breakfast for weeks, your oats and banana breakfast tastes so good. No matter how much you try to diversify your food choices, you start craving for simple home cooked lunch and dinner.

Ok, I get that. But rental cars are fun, right?

Picking up a car of your choice from the car rental aisle sounds so much fun. I have to agree that this is still fun even after years, especially if you have the elite membership. At home, I drive a used car that is 15 years old, so any rental car is an upgrade. But I always like to pick cars that I have not driven before. In the past, I always went for Sports cars. But since I realized the number of blind-spots they have, I rarely pick them these days. I also have some favorites, which are mostly based on how comfortable seating and driving is on those vehicles.

Although I enjoy driving them, I soon realized that even the fancier cars are not that different from a simple car. Yes, they are an upgrade but all they do is take you from point A to point B just like your simple used car. The difference in price between an older economic car and a fancy new car is too much compared to the difference in your driving experience.

Yes, the rental car aisles do not provide the fanciest cars. But I feel that I can extrapolate the results.

The result: I no longer desire for new cars or fancy restaurant food

I am sure you can tell by now that I lost my desires for fancy new cars, restaurant food or staying at a fancy hotel.

I was not always the same. I used to dream of driving a nice car. Before I bought my current car, I was planning on buying a truck or a sports car (thank goodness!).When we had just one car in our family, I was planning on buying a brand new second car.  But when the time came, we actually bought an even older used car. Thanks to my travel that I got rid of my expensive hobby.

I am so satisfied that my car does the same job a nicer car would do.

We have also cut down on eating out so much. We still eat out occasionally, mostly when we do not feel like cooking or just to get a break. Our choices are also less expensive. Eating out a lot makes you realize that pricier food does not mean it tastes better.

My vacation choices have changed

I also realized that what you enjoy on a vacation is not the fancy hotels, fancy restaurants or even the fancy beaches. It is who you are with that you enjoy the most. Beaches from Miami to Santa Monica all look the same on a warm day.

I still go on vacations, probably more than in the past. But my vacations are more focused on being close to nature, meeting friends and family, meeting the local people and knowing their culture. I think my vacation choices are more meaningful and satisfying these days.

In the meantime, I have also saved a lot by getting rid of a number of my expensive desires. Thanks to my work travel.

What about you?

How often do you travel? Has your travel choices and other life choices changed because of your travel experience?

 

 

 

 

How my Immigrant background geared me towards FI?

I grew up in rural Nepal, far away from big cities. My parents had a decent income in Nepali standard, I would say a middle-class income. How much is that in dollars? My dad’s highest salary was probably 250 dollars per month and my mom did not have an earned income.

I remember dad making 120-150 dollars a month when I was little. Not only he managed to feed the household of 5-7 people with that salary, he also saved enough to buy a decent amount of land. How did he do that? You need to understand Nepali lifestyle first.

My parents were farmers

Most people in Nepal are farmers (more so during my childhood) and most of them own lands inherited from their parents. There are also poor people who have no land of their own, but most people have a decent amount of land. They grow rice, vegetables, corn, fruits and raise animals in these farms. This is also their supermarket, whatever food they need grows on their own farm. In other words, whatever does not grow on their farm does not make it to their kitchen.

So basically, the cost of food is almost zero. Most people live in a wood, stone and mud houses which are cheaply built with the help of neighbors. It costs some money to build it but once it is built they do not have a mortgage or rent to pay. Electricity- we had none. We used kerosene lamps. Gas- none, we used firewood collected from local forests. Transportation- there were no roads big enough for vehicles. So we walked everywhere – it did not cost a dime.

Life was different

We lived a humble life. I am sure my parents worked hard in the fields and in the house. My dad had more than 2 hours’ commute on foot every day. But as a kid, I never felt poor. I had to walk 2 hours every day to go to school for 2 years. But I never hated it. I had tons of friends who did the same and these commutes were always fun. I had no toys, but we always found something or made something to play with.

We could pick our own fruits from the trees, pretty much from anyone’s farm. The whole village was our playground. I do not regret anything from my childhood.

These days many villages have roads, electricity, use propane gas for cooking. So the living cost may have gone up. More people have jobs, mostly through foreign employment, so lifestyle has probably changed. But a lot of what I experienced growing up is still there.

Self-sustaining lifestyle

Most people in my village lived with their farm’s yield. They sold the surplus to make some money that would buy them clothes, shoes, paper, and pencil for their kids.

My parents did the same. So my dad’s income from his job mostly went to savings. Farmland was cheap and he managed to buy few acres to add to what he had received from his parents. We kids went to public schools which were mostly free. Later our education cost him more as we went to private schools (my parents could afford private schools in 200 dollars a month income!).

My parents were Financially Free in their 30s

Even if they did not realize, they were financially free at a young age. In fact, my dad was eligible for the pension from his job when he was in his late 30s. Work was a choice for him after that.

You could say that they did not have securities for healthcare and did not have luxuries of the western world, but they live fairly well in Nepal. Now they have electricity, motorcycle and public vehicles for transportation, gas for cooking, television, computer! and smartphones! They have not compromised much. They have made all that possible on such a small income.

What I learned from my parents

This is what I learned from my parents:

1. It is possible to live on a small income. You just need to adjust your lifestyle to fit your income.

2. You can save on a small income. You need to make saving a priority and need to have goals.

3. You do not need more money to be happy.

4. FIRE (financial independence/early retirement) is possible on any income.

I lived away from my parents’ home since a young age, first in a big city in Nepal and now in the US. I have seen rich and middle-class families from the city in Nepal as well as in the US. My parents’ income is not enough to survive in both of these places but the principles they applied for savings and investments still work for anyone.

Guiding principle in life

I remember a lesson from a 5th-grade-course book in Nepal, “Break the bank for the right things, but do not spend a dime unnecessarily.” This has always been my guiding principle even before I knew anything about personal finance and savings. I live by the same principle even today.

I am never happy to pay a dollar extra at the grocery store, but I do not mind spending thousands on a plane ticket to my favorite destination. I do travel-hack when possible and buy cheaper tickets if available, but I am never worried about spending money for the right cause.

How did your parents influence you in your pursuit of wealth?

 

 

How did I graduate from college with zero debt?

Colleges are expensive in America and most people come out of them with a large debt. But it does not necessarily have to be that way. I went to college/university for 7 years of my life, obtained two engineering degrees, and came out with zero debt. How is that possible?

I did not have rich parents

No, I did not have rich parents, nor had big scholarships (for most years). I also did not have any sponsors who paid for it. Gosh, I am an immigrant from a poor country who came to America with not a lot of money. Believe it or not, I worked and paid my way through.

I did not go to Harvard or MIT, I went to an affordable 4-year university in the middle of nowhere for my undergrad. I deliberately searched and found a cheaper school and believe me there are many of these throughout the United States. They may not have the same aura as an IVY league school but if you graduate, you will still have a college degree. After that, it depends on you on how you can market yourself in the job market.

I researched for an affordable college

For me, college cost was around 6000-8000 a year in tuition. If you divide that in months, it is little over 500 a month. I also lived in shared apartments with roommates. This was in a town where rents were really cheap. My annual expense was around $15000 total including college fees.

I did not Have many bills to pay. The cell phone was the only personal bill. We had shared utilities and internet in the apartment, no cable TV. I also did not have a car at the beginning, so no car payment, maintenance cost, gas or insurance. Health insurance was through the university and I never saw that as a separate bill but part of tuition.

A glimpse of my expenses

I did not keep an accounting of my income and expenditure from that time. So I do not have exact figures of my expenditure or income. The numbers I put here are just my estimates. I think my take-home income at that time was around $20,000 and my regular expenses were around $15,000. I hardly saved anything during that time, so the extra $5,000 was used for other expenses like buying a laptop, road trips, vacations, and parties. I was also able to buy a used car for around $3,500 after two years.

If you are making $20,000 a year, taxes will be minimal. On top of that, you may be able to deduct the tuition and fees from your income. In addition, you may also receive tuition credits, if you qualify.

What does it take?

How much do you have to work to make $20,000 a year? If you make $10 an hour and if you work 40 hours a week for 50 weeks a year, you will make $20,000 a year. That also leaves you with two weeks of vacation time.

Since you are also going to school, 40 hours a week might be too much to keep up with. But you also have about 4 months of summer off. You can work 60 or 70 hours during this time and work 20 to 30 hours during school. If you are lucky, you may be able to get an internship which may pay you $20 an hour or more in the summer.

An old advice from an unknown butcher

There are many ways to skin a cat and you can find what works for you.

Personally, I was not lucky enough to obtain an internship. I did not have any connections in the US. I was also introverted and was not very good at networking. I also had a quite distinct foreign accent and did not have the best command of local slangs and overall English language. Due to all of these, I was not an ideal candidate for an internship position. But the even more important reason was probably that I did not try hard enough.

Working smart is better, but working hard will still get the job done

Nevertheless, I worked hard, both in school and at work. I did not get paid $10 for most of my jobs, it was often less. But I worked more hours to make up for that. In the summer, I worked two jobs close to 80 hours a week in total. It was only for 4 months at a time, so it was never difficult. Plus, I knew this was needed to pay for my college.

After completing my undergraduate, I went for a master’s degree from a different University. But I did not have to pay for most of it. I received an assistantship for most of my time there, which meant I had to work for a professor doing his research or teaching labs and grading papers. My tuition was paid for and I was paid a little more which was enough to pay my bills and living expenses.

 

What can you take from this story?

Through my story, I wanted to show you that there is a way to graduate from college without a debt. If you are afraid of debt or you worry that you may not be able to pay it back, you can consider doing it this way. Some people may not even qualify to get tuition loans and if that is you, you do not need to worry, since I have shown you that you can still do it.

Is debt bad?

But debt is not necessarily bad. After all, college debts are known to have low interests and have a long time to pay it back making your monthly installments amount smaller. If you think the loan you are taking for college is worth the degree and you will be able to pay it back without a big dent in your income, you do not need to be afraid of the loan.

But debt does not have to be the only way to get a college degree. If you want and are willing to work for it, you can always come out of college with zero debt.

Finally, it is your turn now

What do you think about college loans? Is the debt worth the degree? What do you think about a zero-debt college degree?

 

What I learned from walking in the Snow?

I live in Michigan and it snows quite a lot here. Recently, I moved to an apartment less than a mile away from work. Next thing, I started walking to work about two months ago and I am loving it.

The timing of when I started this is interesting, as it happens to be at the beginning of the winter. It was just a coincidence but I also started thinking that if I can do it in the winter I can do it anytime.

The First Week was not as fun

In the first week, I was not too sure about my decision. I knew it made so much sense logically, but I would still question my decision or get anxious. You see hardly any people walking around here during this time of the year. I would think, what if someone I know sees me walking, would that person think it is weird? I was so self-conscious.

But the actual walk was fun. Even in the past, I always enjoyed stepping on fresh snow. I get the same feeling as walking on the sand. Somewhat surprising, I also enjoyed some cold air and freshness that comes with it. I enjoyed getting some exercise on my limbs early in the morning. I would always be refreshed when I reached work, ready to start the day.

Real Enjoyment came afterward

After the first week, I was not as self-conscious. I am sure, almost nobody noticed me walking and even if they did, they probably did not care. I have actually told some of my colleagues that I walk to work. Now I do not think about it anymore. Just like I did not think much about driving to work before. I just do it. If I actually think about it, I pat myself on the back to say it was a great decision.

Now I have done it for a while, I enjoy it even more. It takes me 10-15 minutes to reach work from home and vice versa. It is such a short distance. I sometimes wish that I lived further away so I could keep walking.

I am turning into a winter lover

I was never a big fan of snow. Now I have started enjoying it and somewhat liking it. I sometimes miss the snowfall and walking on the fresh snow. We had some warm days recently and all the snow on the ground melted. So this week, when I was walking, I started wishing for snowfall again. Luckily, we are still in January and I am sure there is more coming.

I also realized that I did not really dislike winter in the past, what I did not like was driving in the winter. So less driving means more enjoyable winter.

The benefits are lucrative

Here are some of the benefits I received from walking in the snow.

• I hardly get out during the winter. This is a good excuse to do that. I get 20-30 minutes of free exercise just by choosing to walk instead of driving.I get recharged and refreshed with some walking and cold temperature.
• I do not have to scrape the car and I do not have to sit inside a cold car.
• Since I live so close, I reach work in same time as if I would drive. In the winter, it might be even faster walking than driving because of not having to scrape the car.
• I do not have to sit in traffic being anxious and impatient. Since I live close to work, this would not have been a problem anyways. But that was by choice as well.
• I save money on gas and car maintenance. I have not started calculating how much, but one day I might write a blog about it.

Finally, your thoughts

Do you live in an apartment? How far do you live from work? If you drive to work, have you given thoughts to walking or biking to work? What is preventing you from doing so?

If you live in an apartment still have to commute a long distance, why do you do it?

 

 

 

Retiring Early? 4% Withdrawal Rate may not work for you.

I have written before about 4% withdrawal rate. It is a considered to be a safe withdrawal rate for retirees. However, I admit that it is not perfect.

Historical data for ROI and inflation

I have made some charts to show how a 4% withdrawal would impact your net worth after retirement. I have used the S&P 500 annual rate of return from 1928 to 2017 and CPI USA historic inflation rate from 1956-2017 for my calculations.

There is no future data to show you what will happen in the future. So this is the best I could do with the past data.

 Basic assumptions regarding retirement spending

I did not use 4% rule in the traditional sense that you withdraw 4% of your net worth every year no matter how much your annual expenses are. Instead, I adjusted 4% rule with 4% inflation rates based on the amount you calculated for first year’s withdrawal.

For example, if you retire with 1 million dollars, you would want to withdraw $40,000 for your annual expenses in the first year using 4% rule. Next year, the stock market could go up or down significantly, but your expense would still be $40,000 plus inflation (say $41,600 at 4% inflation rate). This way, you are guaranteed that your expenses will be covered even if the market goes down significantly (say 30%). If you would just use 4% rule to withdraw that year, you can only withdraw $28,000 which may not be enough to cover your expenses.

In the reverse scenario, when the market will go up significantly, you would still withdraw $40K adjusted for inflation and keep the surplus invested.

Net worth without inflation adjustment

The following chart shows the present net worth in multiples of your net worth on the year you retired. For example, if you retired in 1928 with a net worth of 1 million dollars, your net worth in 2017 would be around 130 million.

It is difficult to see the data in above chart for years 1985 and forward due to the scale of the chart. So I have adjusted the chart to zoom into the 1985-2017 data which you can see below.

From these two charts, you can see that your net worth at present would be at least a million dollar, no matter what year you retire.

It looks great, but wait…

It looks very good, except that the net worth is not adjusted for inflation on the above charts. Only the withdrawals are adjusted for inflation. Since the 1 million dollar at present is significantly less than 1 million dollar in the past, the above charts do not tell you the full story.

For example, if you had retired in the year 2000 (worst year to retire in recent history) with a million dollar invested in an index fund, even after taking out inflation-adjusted $40,000 every year for your expenses, you would still have over one million in your investment account in the year 2017.  But since one million in the year 2000 is more than one million in the year 2017 due to inflation, this is not like for like comparison.

Just so you know, at 4% inflation rate $40,000 would amount to $78000 in 2017.

Let’s see how inflation will change the picture

Because of the inherent flaw in the above charts, I went ahead and adjusted the net worth based on the historical inflation rates in the US. I also adjusted the withdrawal amount based on the inflation rate.

For example in the above example of the year 2000 retiree, the inflation rate is less than 4% for every year except in the year 2007. Using the actual inflation rates, the year 2017 withdrawal amount for the above retiree would amount to $57,000.

Here are the inflation adjusted charts for both net worth and withdrawal. Instead of a single chart, I created three charts to adjust the scale, but it is the same data.

* Since I could not find the inflation data for years before 1956, I used 4% for my estimates.

Hmm, Inflation does change the picture

As you can see, the results are very different when you adjust for inflation. There are years where you would go into negative, which means you would run out of money in retirement. Even if you ignore the beginning of the chart (1928-1931) as these could be anomalies and since 4% inflation rate is probably not accurate, there are still more recent years (1966, 1968 and 1969) where you would go into negative in 2017.

If you were to retire in the year 1966, your money would only last until the year 2004. Similarly, you would only last until the year 2012 if retired in the year 1968 and 2008 if retired in 1969. This may not be a big deal if you were a regular 60+ retiree, but if you are an early retiree, you may run out of money while you are still alive.

What if I stick with 3% withdrawal  rate instead

Just out of curiosity, I went and did the same calculations for 3% withdrawal rate. Does a 3% withdrawal rate guarantee that you will not run out of money in retirement?

3% withdrawal rate is not perfect either

The results were better with 3% withdrawal rate. In none of the retirement years besides the first 3 years (1928-1931), you would go into negative. If you were to retire in the year 1966, you would still make it until the year 2017 with some (although not much) positive net worth. However, it looks worrisome for the year 1973, 1974, 1979, and 1980 retirees and your saving may not last for too long in the future. Again this would only be a problem for an early retiree, not a regular retiree.

More worrisome would be for years 1999 and 2000 retirees. For example, if you had retired in the year 2000 with 1 million dollars, you would be down to $550,000 by the year 2017 at 3% withdrawal rate. This would be even worse at 4% withdrawal rate, only $270,000 would be remaining at 3% withdrawal rate. These amounts are worrisome for regular retirees let alone early retirees. Years 1999 and 2001 are also not good, as you would have less than a million dollar in 2017 if you are retired in either of those years at 4% withdrawal rate.

Should I be worried?

As you can see, how well you will do in retirement depends on how good the investment returns are in immediate years after your retirement. Based on the historical data, some years are not good for early retirees. But these years are also known to be the worst years in financial history.

For example, 1999-2001 was when the dot.com bubble crashed.

1973-1974 was the years of infamous market crash compounded with double-digit inflation.

1979 and 1980 had double digits inflation.

Conclusion

In conclusion, 4% withdrawal rate or even a 3% withdrawal rate does not guarantee you to retire early without having to worry about money.

But if you plan well, you do not have to worry too much. For example, the result was only bad if you had chosen to retire at the peak of the bullish market or in the beginning bearish market. If you could avoid choosing those years, you need not worry much.

How well you would do in retirement depends upon what happens to the stock market in immediate years after your retirement.

But no one can correctly time the market and I do not recommend doing so for your retirement.

But you should not count all your money for retirement if the market has continued to be bullish for some years before your retirement. In such situations, although you can not time the market successfully, you can put a cushion to your retirement savings, so as to nullify any immediate market crash.

But best security for an early retiree is that you are still young and able to work. So be prepared to work for a few more years than your retirement date if things do not look as promising.

 

 

 

How to save on Taxes?

I do not follow the news media. But some of that still makes it to my world once in a while. Rich people being “greedy” and paying less in taxes is sometimes reported in them. I am sure you have heard that before. I am not rich (yet) but I do not really fault them for paying less on taxes if that is what they are doing legally. In fact, you should do the same too if you can unless you run a charity for the taxmen (and women).

I read somewhere that the job of the government is to try to get as much in taxes from you as possible and your job is to pay as little as possible. That is why you should take advantage of every tax breaks, deductions or strategies that will work for you. I have not seen or heard of anyone who is interested in paying more during tax time. So instead of blaming rich people for paying less tax, you should learn their strategy and use it in your favor.

Just so we are on the same page, I am not suggesting you cheat in any way, I would strongly condemn such behavior. But there are many legal ways to pay less in taxes, which you can take advantage of.

Ok, now that is out of the way, I want to discuss the simple ways which will help you pay less tax.

So how do you pay less tax?

There are many tax strategies. But I am not going to talk about all of them. I believe in simplicity and I will talk about the simplest ways. The simple way is you should put your saving in following tax-deferred accounts.

• 401k
• IRA
• HSA

What is 401k?

You are probably familiar with 401k. Many employers offer a 401k plan. Some of them may even match the contribution or part of the contributions you put on it. It is a tax-deferred saving for your retirement. Money goes in tax-free and grows tax-free, but you have to pay taxes when you take out after the age of 59 and 1/2.

If you are like me who wants to retire in your 30s or 40s, 59.5 seems too far in the future. But there are ways to take this out tax-free and at an earlier age which I will talk about in a little bit.

You can put up to $18,500 in your 401k in 2018 per individual. Remember, you have to do it through your employer and the money is deducted from your paycheck. There are other ways for self-employed and small business owners but that is not the scope of this post.

What about IRA?

IRA works similar to 401k except that your employer does not get involved like 401k. Money goes in tax-free and grows tax-free but you have to pay taxes when you take out. You can set up yourself and is not much difficult than opening a taxable investment account. I recommend using Vanguard but there are many other providers.

The maximum annual limit for IRA is $5,500 per individual and $6,500 if you are over the age of 50.

Is HSA the same?

Yes and no. HSA is a health saving account, unlike 401k and IRA which are retirement saving accounts. But it works similarly in a way that you do not need to pay income taxes on the amount you contribute to HSA. Money goes in tax-free, grows tax-free and comes out tax-free. On top of that, you do not have to wait until you reach age 59.5. That is even better than 401k and IRA because it comes out tax-free and there is no wait time.

The only caveat is that you can only use it to pay for your medical expenses, which includes health insurance premiums, vision, and dental expenses. This is not really a bad deal since medical expense is one of the factors that most retirees fear about. But you have to pay 10% penalty plus income taxes if you withdraw for any other reason.

But that is not a bad price to pay for a healthy life. If you did not need to use HSA for your medical expenses, it is probably because you did not incur a lot of medical bills. Which does not sound bad at all. In addition, there are still ways to avoid taxes on the withdrawal which I will discuss below.

The contribution limit for 2018 is $3,450 for individual and $6,900 for the family.

Some employer health insurance plans may contribute to HSA. If your employer does that, then it counts towards your limit. For example, on my health insurance plan, my employer puts $1,000 total for me and my wife in our HSA, so we can only contribute $5,900 in addition.

So what does that add up to?

• 401k – $18,500 + employer contribution
• IRA – $5,500
• HSA – $3,450
• Total: $27,450 + employee contribution

This is the amount you do not have to pay taxes on. That amounts to $ 4117 in federal tax savings if you are on 15% tax. Similarly, you might be saving on your state taxes depending upon the state you file your taxes in.

If you are married, multiply that by 2. It saves me more than $10,000 for my household just on income taxes. That is a lot of immediate tax savings but it does not end there. The money in your tax saving accounts grows tax-free as well. So I am saving future taxes as well.

What about withdrawal?

 Let me first introduce you to Roth IRA. Roth IRA is also a retirement savings account just like IRA. But unlike IRA you pay tax upfront and not when you withdraw. The money that goes in is your after-tax income, but it grows tax-free and you take out tax-free after you reach 59.5. But if you withdraw before that you will need to pay income taxes on the interests and dividend (growth) and only the amount you contributed (or already paid taxes upfront) is tax-free.

IT Does not sound appealing to an early retiree for whom 59.5 is too far in the future, does it? Not yet, but keep reading. There is something for you as well.

How do all these work for an early retiree?

That is a right concern. None of these tax savings were designed with an early retiree in mind. So it may seem like they are not for you.

But then there is a great technique called Roth Conversion or commonly known as “backdoor Roth”. Basically, you can convert your IRA and 401k to Roth IRA by paying income taxes on the amounts you convert. Once it is in Roth IRA, you can withdraw anytime after the waiting period of 5 years.

You must be saying, “All this is great, but I am still paying taxes.”

How you can avoid paying taxes as an early retiree?

Since you are a retiree, I am assuming you will not have an earned income after your early retirement. Earned income is the income you get from your active work, a.k.a. paycheck.

Now is the time to do your Roth Conversion. Since you have no earned income, your only income is the amount you take out from traditional IRA to put in Roth IRA. You pay income taxes on this amount and leave it in Roth account for 5 years.

How much income tax you pay depends on the amount you withdraw. You have to pay taxes at ordinary income rates. For example, if you were married filing jointly in 2018 and had no earned income, you could do Roth conversion on $24,000 tax-free with the standard deduction. Compare that to the rate you would be paying taxes on it during your working years.

After 5 years, it is your money to spend. Remember, you need to keep it in Roth account for 5 years before you can withdraw penalty-free. For reference, $24,000 will be $35,263 in 5 years at 8% annual growth, enough for the Millionaire Immigrant family for a year.

Did I make it more complicated?

No matter how you try to simplify, taxes may still seem complicated. This is why you should seek professional advice. A missed step could cost you heavily in penalties and fees.

Disclaimer: I am not a tax expert and I do not claim to be so. Always take tax advice from a CPA or qualified tax advisors.

How do I personally plan to use this strategy?

I and Mrs. Millionaire Immigrant both max out our IRA, 401k, and HSA accounts which will result in $54,900 in savings. We invest 401k and HSA through our employer retirement plans and IRA through Vanguard. We invest in low-cost index funds or similar investments (my company retirement plan does not provide index funds as options).

Any additional savings goes to our taxable accounts, also through Vanguard. This is the money we plan to live on during our first five years of retirement before we can dip into Roth converted money.

Bonus: Roth IRA

You can also contribute to Roth IRA in addition. I did not discuss this earlier, but you can start contributing to Roth IRA anytime. However, there is an income limit and you may not be eligible if you have a high income.

There is also a limit on how much you can contribute each year. This amount is $5,500 per individual in 2018. Although this is after-tax money (not a tax saving), any growth on it will also be tax-exempt in the future. Which means you do not need to pay capital gain tax, which you might have to pay otherwise. But you still have to wait for 5 years to take it out penalty free.

Contributing to the Roth account (except for Roth conversion) may not be of advantage for everyone. This is why I did not talk about it earlier. If you do not have to pay capital gain taxes anyway, which you may not if your income is less than $38,600 (x2 if married filing jointly). This is the income of the year you cash out your gains most likely after retirement.

Are there any Risks?

There are always risks associated with anything you do in life. The market may go down. The 8% rule is a long-term average, not a guaranteed return every year. Similarly, tax laws may change and tax rates and brackets may change. They may even stop you from allowing strategies like Roth conversion.

So you will have to be prepared for any such risks.

The best way to tackle risks is by being informed. The more you know what you are doing, the less risky it is. So get educated and get advice from professionals.

I do not want to worry about the US economy turning to Venezuela or the Aliens attacking the earth and wiping out the whole world. There is no way in my life I can prepare for such low probability events.

For more probable events such as market crash for an extended period, like in the early 2000s, 2008 or even 1970s or 1930s, you can always prepare for it to a certain extent. Hint: do not panic, it will most likely come back up.

What if it is worse than the worst in the history, which is beyond that you are prepared for. If you need to be back in the workforce for a couple of years, until it calms down, so be it. I can live with that risk for a low probability event like that.

Good luck on your pursuit to early retirement! Hope to see you on the other side some day. What do you think of my tax savings plan?

 

Simple Path to a Million Dollar

Most people think million dollars is enough savings for you to retire. Personally, when I reach my first million, I will pack my bags and leave for a new adventure. Others say a million is not enough. To them, you need more, 2 million, 5 million or 10 million to be able to say bye bye to your job. They may also say that it also depends on how old you are. But I think we can all agree that 1 million dollar is a large amount of money, and if you are not stupid, it can do a lot of things and may even buy you financial freedom. In fact, I will have long said adios to the rat race by the time I reach a million dollar mark.

How much is a million dollar? It is widely accepted that if you have a savings of 25 times your expenditure, you can retire from working at that point. It assumes that you invest that amount with a modest 8% return. 8% is the historical average on index fund investing. Basically, it assumes that you can expect 8% return in the long run on your investment. From this 8%, you can withdraw 4% for your expenses and keep 4% invested in the market. This way your investment will keep growing, and will also beat inflation which is assumed to be less than 4% in the long run based on historical average as well. Of course, no one can correctly predict the future and past indicators do not mean the future will be the same but you need certain metrics to plan for retirement. 4% withdrawal rate is considered as a conservative plan and is widely accepted in the investment community.

So let us look at the real numbers. What happens when you accumulate a million dollar in your investment account? At 8% rate of return, you will profit 80K a year. At the withdrawal rate of 4%, you can withdraw 40K from it. The other 40K stays in your investment account and adds to your principal. So next year, you will gain interest on 1 million 40 thousand ($1,040,000) which will be $83,200 out of which you will be able to withdraw $41,600 for your expenses. In 10 years, you will have $1,480,244 in the investment account and you can withdraw $59,209 for that year. In 20 years, you will have more than two million ($2,191,123) in your investment account and you can withdraw $87,644 for that year’s expenses. If you retire in the 30s and live for 50 more years, in your 90s, you will have more than seven million in your investment account and will allow you to withdraw $284,267 that year. So basically, you will never run out of money, both your wealth and investment income keeps growing each year.

So if you have a million dollar in your savings and you can live on 40K per year on expenses, you can retire. If your expenses will be higher than that, you will need more savings to retire. You can also do it on a lower amount if you have expenses lower than 40K. 40K may not be a lot of money for a lot of people in the US, especially you spend like a typical middle-class family. But that will put me among the highest wage earners in Nepal, above 95% of the population if not more. Do you see why I want to retire in my 30s and go back to Nepal? Actually, 40K can buy you a good living even in the US. But you need to come out of typical middle-class spending. You can read Mr. Money Mustache’s blogs on how to do it. My two people household had less than 25K of expenses last year and we went on vacations a lot more than an average American family. If you are still not convinced, sorry, I will try harder next time. But this is also not for everyone.

You may have noticed that I left taxes out of the discussion. There is a way you can legally avoid all or most of the taxes in retirement at these withdrawal rates. I will talk about these in a different post but you can research 401k, IRA, HSA, Roth IRA, Roth Conversion if you cannot wait.

But you probably do not have a million dollar in your bank account or investment account now. You are not alone and I do not have it either. But if you have a job like I do, you can get there soon. If you have a tech job like a lot of immigrants and if you are married, with two wage earners in the family, you most likely make more than 100K a year in wages. If you both have tech jobs you may be around or more than 200K. But let’s say you just make a modest 100K a year. If you are not in tech and/or have a lower income, please forgive me, but you can still do it. It may take you a little longer or may require more hard work or a combination of both, but it is still possible. It is easier to talk about someone in my own situation, that is why I am choosing 100K as an example.

If you can invest 57K now and add 57K each year to it, it will take you 10 years to reach a million with 8% annual rate of return. So if you start at the age of 25, you can retire by the time you reach 35 years old. If you are as aggressive saver as I am, this is possible. But if you think that is too much and you can only save 40K a year, it will still only take you 12.7 years to reach there. If you start at the age of 25, you will still be in your 30s when you reach there. What if you can only save a modest 25K a year, you can still reach a million dollar mark in 17 years or when you are 42 years old. That is still very young. In fact, 20 years younger than a normal retirement age of 62.

What if you had no idea about any of this when you were 25 years old or you are already older, you can still do it. You just need to add 10, 12 or 17 years from today. You just need to start saving and investing now if you have not already.

How do you maximize your savings?

1. Earn more and spend less: This is the simplest way. The difference between your income and expenses is the savings. So increasing your income and cutting down on expenditure is the first and foremost step. You can ask for a raise, switch jobs for higher income, take a part-time job or do a side hustle.

2. Reduce your taxes: Taxes are the highest expenses for most people. Most people do not think about taxes when thinking about savings but you can save a significant amount if you can utilize some tax savings strategies. Maxing on 401K, IRA, and HSA are the simplest way to save on taxes. In 2018, you can contribute up to $18,500 individually on 401K, $5,500 on traditional IRA and $3,450 of HSA. That is $27,450 per individual and if you have a two-person household like mine it will be $54,900 total. If you have an employee match on 401K, that can add another few thousand on top of that. Say your employee match amounts to 3K (3% match rate), your total tax-deductible savings for the year will be 57.9K, just above the 10-year savings plan I had discussed earlier. This also means significant tax saving (more than 10K in my situation).

3. Housing: Housing is another big expense. It depends on how big your house is. Most people think that your house is an asset. But actually, it is a big liability for most people. It is also the biggest trap that keeps you in the rat race forever. You should read “Rich Dad Poor Dad” book by Robert Kiyosaki if you want to know why your house is a liability and not an asset. So a smart way to save is by keeping a low mortgage or a low rent. We live in an apartment and pay rent around $700 monthly including utilities. If you live in an expensive city, this is probably not possible, but I am assuming you are making more in wages to compensate that. If you are not, then you should consider moving to the Midwest and lower your housing cost.

4. Food: You can save a significant amount if you do meal prepping and cook your own food. It will save your health as well as your wallet. Occasional eating out is fun but it is not for every day. You should invest in kitchen appliances like a slow cooker (crockpot) or a modern pressure cooker (instant pot) if you are lazy and bad at cooking like me.

5. Car: You should get rid of your expensive cars loans. I drive my Honda I had bought 5 years ago with cash. We also have a second car which we bought from craigslist for cheap, and helps when we need two cars. I am actually thinking of getting rid of the second car since I started walking to work which is less than a mile from my apartment.

6. Clothes/Furniture/Essentials: I stopped accumulating a lot of crap. Consumer society of today’s world makes us feel like more stuff you accumulate, happier you are. I found that it is actually the opposite. I do not spend a lot in clothes, furniture, and other crap. I only buy what I need and when I need them. You probably already have too many clothes in your closet like I do, so there is no need accumulate more like crazy.

7. Travel: This is our weakness (not really). We like to travel a lot, who do not, right? So we spend some dollars on plane tickets, car rentals, restaurant foods and other travel expenses. But we are also frugal travelers and we mostly do outdoor things like sight-seeing, hiking, spending time on the beach etc, which does not cost much. We also buy our tickets in advance, use points and deals when possible, and go to cheaper destinations. If you like to travel, there are many ways to save on your travel expenses.

8. Alcohol: I quit cigarette and coffee four years ago and have cut-down on drinking significantly but I enjoy a beer or wine and enjoy drinking with good friends occasionally. It has saved both my wallet and my health. You can always cut down on your booze, especially if you like to go to bars and order drinks at restaurants. It costs a lot less if you drink at home instead.

9. Miscellaneous: There are always miscellaneous expenses. Some are big and some are small. It is always best to evaluate if they are something you truly need or are they just your wants. Living a frugal life helps to cut down expenses and maximize your savings. Keeping a budget and tracking your expenses helps you save. Saving is also a mindset, the more you think about it, the more you do it. You can read about personal finance, FIRE etc. Reading will help you learn more from other people.

Good luck in your pursuit of Financial Independence/ Early Retirement (FIRE). If you have not already, you can still contribute to your 2017 IRA until April 2018. Sooner the better, as it will start working for you sooner. Million dollars may or may not be enough for you to retire, but you can use the same strategies to accumulate more.

If you know a little about retirement accounts like IRA and 401K, you probably know that you have to pay a penalty to withdraw your money early, or before reaching a “normal” retirement age. But there are ways to avoid the penalties and avoid/minimize paying taxes on that amount. In fact, using these retirement savings options, you can put your money tax-free, let it grow tax-free, and withdraw tax-free. I will write about that in a different post but you can research about Roth conversion if you want to know more about it yourself. HSA can only be used for eligible health-related expenses. But I am assuming you will get sick someday and will need to pay for medical expenses. You can also pay for your expenses that occurred outside of United States.

You may be worried about unknown health costs in the future like most people. I do not blame you and no one knows how much you may need to spend on your health in the future. But that is still the same if you were working. Best way to protect against that is through health insurance, although that still leaves you with a lot of unknowns. But you can pay your health insurance premiums with your HSA.

Good luck on your pursuit towards a million dollar savings and/or financial independence.

 

What is Financial Independence and how to achieve it?

Financial freedom is having enough passive income from your investment or businesses so that you can choose not to work if you don’t want to. Passive income is the income generated without having to work for it. Interests, dividends, rental property income and royalty from music or book sale are some of the examples of passive income. Financial independence and early retirement or commonly known as FI/RE (or FIRE) is a popular concept among personal finance bloggers. But it is not a commonly known concept among the general population, immigrants included.

It is also necessary to make a distinction between financial independence (FI) and early retirement (RE). RE is to stop working before the normal retirement age, say in the 30s or 40s. Being financially independent will enable you to retire early, but you do not have to stop working as soon as you achieve FI. At that point, even if you continue working, work becomes a choice and not a necessity or an obligation. A lot of people who have achieved FI say that just being in a position where work becomes a choice is very liberating.

Why do you need FI? Time is a great asset. Most people are trained to trade time with money. If you are a regular employee, this is what you are doing. You give 40 hours every week to your employer and you get a paycheck in return. This is not a necessarily a bad deal since it allows you to pay for your food, housing, clothes and other needs. But if you value your time for more than just a paycheck or if you have better ideas about how you would want to spend your time, a regular job almost feels like a trap. Being FI will allow you to skip this trap and let you use your time on your own terms.

Not everyone hates their job and I am not saying you should. In fact, I do not hate my job either. But I am also not a big fan of needing to have a job for life or until you are old. In fact, a number of people (for example doctors) who have spent a number of years of extensive work to prepare for their careers have also pursued the path of FI to be able to quit their job. Although I do not make anything close to a doctor’s salary, I went to school until I was 28 years old and when I finally started working the career of my dream, I realize that I do not like to work all my life. Somebody in the past designed that we should work a fulltime job until we are 60 or 65 years old and it was not my idea. It does not have to be yours either. But there is a way out if you want to work for it.

What prevents most people from achieving FI? I had an income of around 20K a year for six years in the US. What is even interesting is that I was also paying for college (around $7500 a year) with the same income. Although I was not living in a grand luxury, I was not miserable either. I shared apartments with my friends and lived on low-budget just like most college students. I could still occasionally party and go on vacations. I even made some expensive roundtrips to Nepal during those years. Although I did not save much during that time, I was still living a decent life. How did I manage it? My expenses were lower than my income and I only spent what I could afford to. Most people in the US live beyond their means and that prevents them from achieving FI.

I do not recommend that you to live on 12K a year budget, but you can definitely live comfortably with a budget of 20K. If you are married or have a roommate to share a living cost, you can live comfortably with the 25K-30K budget. Mr. Money Mustache of mrmoneymustache.com spends less than 32K a year for a family of four and he has millions on his net worth. My and my wife’s combined expenses for this year is around 25K not including taxes. This included three roundtrip plane tickets to Nepal and a number of domestic vacations. I understand that every person has their own expenses and your expenses may be 50K or 100K a year. That is ok as long as you have means to pay for it. For example, doctors having 100K in expenses can still save another 100K for their FI if they have an income of more than 200K.

If a household having a median income of 60K a year can retire at the age of 60 or 65 years, why can’t you retire around 45 years if your household income is double of that? What if your household has two software engineers with a combined salary of 200K or a doctor with even higher salary, why can’t you retire in your 30s? Theoretically, you will be able to save more money in 10 years compared to what a median household can save in 30 years. So why does it not work practically? Why don’t we see all the doctors retired in their 30s or software engineers retired in their 40s? Is it because all of them love their job that they do not want to stop working? We all know the answer. It is because their expenses go up as soon as their income goes up and they will never be able to save enough to retire early.

This is what they call “rat race”. Wikipedia defines rat race as “an endless, self-defeating, or pointless pursuit.” This is how most people live. As soon as their income rises, they find a way to raise their expenses. It could be in the form of a bigger mortgage, a car loan, or buying things that they hardly need or use. Personal finance bloggers call this a “lifestyle inflation”.

You do not have to do what everyone else does. After I got my first Engineering job, I started wondering what should I do next. At that time, I was already married to my wife and I did not know what should be my next step or goal. When I was in high school or in college, I focused on getting good grades so that I would get a good job. I was always striving to achieve this goal in life. Now I actually have achieved it, I did not know what to do next. I started talking to friends who were in the business longer than I was and were a few years older. Everyone pretty much had the same answer, “you don’t have a goal in life anymore. Buy a house, make some babies, and take care of them. You are not in college anymore, so you do not need any goals.” In other words, they were living just as any other American middle-class family and would recommend me doing the same.

I realized that this is where most people end their pursuit of better things in life. We look around us to see what everyone else is doing and we follow the same path. Don’t get me wrong, having a family and raising kids is a meaningful experience and I am thinking of having kids as well. In fact, I value family above everything but I was not satisfied that I had to stop there. This is how my pursuit of FI began. I heard a saying that most people are missing a great life just because they are satisfied with a good life. I truly believe that it is true and FIRE let you have a great life. After all, doesn’t retiring in your 30s let you have more time to spend with your family?

If you are still with me this far, you must be interested in FI as well. How do you achieve it? Earn more income, cut down your expenses including taxes, invest your savings and count your dollars. It is not that difficult. If you have 100K to 200K in annual household income, you can achieve it as early as 5 to 10 years. Although it helps, you do not need a high income to retire early. On the next post, I will write about how you can achieve FI in 5 to 10 years.

Why FI is so important for Immigrants?

Financial Independence (FI) gives you the freedom to do what you want in your life without having to worry about money. Unfortunately, not very many people have discovered this concept. Whoever has discovered it and eventually achieved it, is very happy with their life and would never want to go back. FI is even more important if you are an immigrant and that’s what I am going to talk about in this post.

I am writing this right after I finished talking to a fellow immigrant friend over the phone. It had been more than two years since we last talked, so we had a lot of catch-ups to do. Eventually, he asked me about my plans for the future. I told him that I do not plan to work for very long. He told me that he wishes to do the same but does not know how that is possible. So I shared him the basics of FI 101 and told him a little bit about my lifestyle, savings and investments. He got the idea but probably not enough to make him believe that it is achievable. I did not want to bore him with too many details. In the future, I may follow-up if he is still interested share more about it.

I also had a conversation with another immigrant friend yesterday and found out he was interested in frugal living as well. I did not ask him much but I could tell he is thinking about FI even if he may/may not know the concept yet. The point I am trying to make here is that most first generation immigrants are interested in becoming financially independent more than regular citizens, even if they do not know the concept of FI. I can not speak for everyone but a lot of immigrants that came to America for college/university education like I did. They did not come here with the intention of living here forever. I was 19 years old when I came here in 2005 to get a good education,  a high paying job, save some money and go back to Nepal and live/work comfortably there. But no matter why you came, life keeps a lot of us here for one reason or the other.

After living in the United States for more than twelve years, I do like this country very much. I have had my moments/phases of culture shock in the past when I probably did not like one or two things in the US. But I have a huge respect towards America and Americans. I do enjoy living here. Even the politics does not bother me like it does to some immigrants. But I also miss my home. Nepal is where I was born and raised and where my parents and families are. There are so many things I miss from home and I cannot fully let go being a Nepali or living in Nepal. I have sensed that other immigrants feel the same way. So a lot of times first-generation immigrants like me are living or trying to live in two worlds at the same time. We still love our native countries but cannot give up our new country.

The family is a big part of our lives. As an immigrant, you are separated from most of your family members. For me and my wife, both of our parents live in Nepal. Grandparents, most of the siblings, and cousins live either in Nepal or somewhere far from here. Most of our relatives live in Nepal as well. This is something not very easy to give up. Our parents have visited us here and we have considered the prospect of having them immigrate as well. But we came to a conclusion that it will not be easy for them to live here. Having to learn a new language, culture, and lifestyle at an old age, and giving up on the social circle they have accumulated for their whole life will be too much to give up. So this leaves with a choice that either we abandon them (kind of) or we live with/close to them in Nepal.

I do not want talk too much about the things we give up by living as immigrants. It is logical that we trade-off one lifestyle for the other, gaining some and losing some. A fair deal right? This is how most people think. Given two choices, most people evaluate them against each other and pick one or the other. Does this always have to be like this? I thought the same until I read a book”Rich Dad, Poor Dad” by Robert Kiyosaki. He says that when you are presented with two choices, you do not always have to choose between one or the other. Rather, you should think about how it will be possible to get both the options. How can you enjoy the income and lifestyle of the US and still be able to live in Nepal or stay close to your parents and relatives?

This is where financial independence does wonder and this is why most immigrants would become FI if they had the choice. Truth is, everyone has the choice and it is up to you if you want to make it a reality or not. I will discuss more about how you can become financially independent on the next post and why you do not have to wait until you are 65 years old to retire.

Welcome to the world of FI. Keep reading and stay tuned.

 

What makes Millionaire Immigrant special?

There are a lot of blogs on Financial Independence (FI) and Early Retirement (ER). If you spend some time on the internet, you can find a lot of these FI/ER blogs or communities. In fact, I am a regular visitor to some of these blogs and I really enjoy reading/listening to them. There is a quite big community of these entrepreneurs and have been growing and spreading the positive message throughout the internet and beyond. I have gained a lot and will continue to do so by getting connected to these blogs.

However, Immigrants are a different breed. I am not talking about the second or third generation immigrants, I am mostly talking about the first generation immigrants, who grew up in other parts of the world and have families and close affection to our native countries. We have to deal with many issues that a regular FI/ER-oriented person would not. We deal with things like visas, processes of becoming a permanent resident and citizens while also saving and investing to prepare for FI and ER. We also deal with supporting our families overseas. We also constantly battle between the love of the land we were born in and the land we are currently living.

I think there are a lot of FIs and ERs as well as a lot more aspirers of FI/ER from the immigrant community but I have not really found a dedicated community/blog for this group. I want to connect with these folks and explore our common goal.

For me, Financial Independence is not just about achieving freedom from my 9-5 job but to be free from being ‘forced’ to stay in the US for rest of my life. A lot of the first generation immigrants struggle with the choice between their native country and the new country. One common trend I have seen in most of my friends who came to the US as immigrants from Nepal is that they battle in their minds for a long time about returning to Nepal vs staying in the US. Eventually, most give up the dream of returning to Nepal and end up following the “American Dream”. Few give up the “American Dream” and go back to Nepal. For most people, staying in the US wins after they have families and kids.

I had been fighting the same battle in my head for years. I never came to America with the intention of staying here. My goal was always to get a good education, save some money and go back to Nepal and live rest of my life there. But life is not always that simple. Although I received good education/degrees, I have not been able to save enough money to go back permanently. I got married and we are planning to have kids soon. Now I have to convince my wife to go back as well (she is also an Immigrant from Nepal). Soon I will have to choose between raising kids in Nepal vs raising kids in America, healthcare and so on. The rat race will go on.

Fortunately, I found “Rich Dad Poor Dad”. Thank God! Actually, thank Robert Kiyosaki.  He says that when you have two options, you do not have to choose between one or the other. Instead, you should think about how you can achieve both. So came the goal of Financial Freedom and Early Retirement. Now I do not worry about making a choice between a Nepali Dream and an “American Dream”. In fact, as one of my friend told me, financial freedom is the real American dream. Now I can retire from my job in the US and live in Nepal comfortably and pursue a new career there if I want to. Wife and kids will be happy when you have enough money to buy everyone’s freedom, health, and education. I want to open a business in Nepal eventually. If I fail or do not enjoy my life there, I can come back to the US and stay here.

I am sure there are a lot of folks who are/can be in the same boat. But FI/ER does not work for us the same way as it works for regular Americans. All the investment/tax saving vehicles such as 401k, HSA, IRA, Roth IRA may not work for you or in fact, may work against you. Planning for healthcare or health insurance after retirement will not be the same. You may not get the loans to buy house/investment properties the same way as the US citizens. You may have to plan on helping your parents financially. You may also need to protect your wealth differently. So I want to explore this adventure, hopefully with inputs from you folks.

Of course, not everyone wants to return, and some may need more time to decide on what they want to do. But these are the things only immigrants have to deal with. I would like to connect with folks who are in a similar boat and explore the possibilities for us together. I think there are also a lot of millionaire immigrants who can share if/how they faced these issues.

Long live (not literally) the journey towards financial freedom.