The personal finance community loves talking about FIRE – financial Independence (FI) and early retirement (RE). Conventional wisdom is that you can achieve FI with savings and investments worth 25-30 times what you spend each year. For example, a married couple who spends $40,000 per year can thus achieve financial independence with $1M – $1.2M of investments, and they may safely choose to quit working, living off the income and earnings of their investments. Early retirement dreamers from coast to coast realize that in as little as 10-15 years of enduring the stressful commutes, petty office politics, and authoritarian executives, they too can achieve FIRE if they save and invest like a hero.
Well, let’s turn conventional wisdom on its head, for just a moment. What if I told you it’s all overkill? What if I told you that you don’t need to wait 10-15 years, and you don’t have to be a millionaire? Indeed, there are millions of ordinary people around the world who have already achieved FIRE with much, much less. Sound too good to be true? That’s up to you to decide. Here’s how to achieve FIRE with only $25,000. But a word of warning: it’s not for everyone.
Step 1: Move Somewhere Much Cheaper
This is a basic strategy commonly used by early retirement dreamers. Make your money in high cost areas like Silicon Valley or New York, and then retire to the countryside. Your money goes much further there. But to achieve FIRE with only $25,000, you’ve got to go extreme. The Texas hill country or Florida beaches just aren’t going to cut it.
How about popular international retirement destinations, like Costa Rica, Thailand, and Panama? Yes, this strategy can work there – but not the sanitized gated communities where expatriates flock. Even those places are too expensive. For this to work, you have to loosen your tie, tighten your stomach, and go “full local”.
My example is a small town in Southern Bolivia called Villa Abecia. That happens to be where I sit as I write this post. It’s a place where a family of four can live comfortably for only a few thousand dollars per year. But, this place is not unique. It could be in many places, in many countries around the world. The only requirement is that it be cheap – super cheap.
Oh yes, and it needs to have farms.
Step 2: Buy A Farm
But not just any farm. They need to be small farms. Those massive industrial farms you see in the U.S. require massive capital investments that lead straight to debt and stress. No thank you! We’re looking for freedom, not debt. Find a place where the farms are small and the people grow food primarily for their own consumption.
Here in Villa Abecia, where things are cheap, you can buy a small farm for around $10,000 – complete with soil, irrigation water, sunlight, and excellent year-round growing weather. If you’re lucky, you might have road access to your farm too – but if not, that’s OK, because walking makes you stronger. Besides, what do you need a road for? Tractors and machines are overkill for farms this size.
A $10,000 farm here would be maybe 1 acre. Here’s one right down the road from my house that I think you could snatch for 10 grand:
That’s more than enough land to grow all the fruit and vegetables you need for a family of four, plus you can raise chickens and pigs for protein.
Here’s another small farm with some fruit trees already in place. This one is all ready to FIRE. You don’t even have to wait 3-5 years for your trees to bear fruit.
With either of these small farms, you would even have plenty of leftovers to sell in the local market for cash. That’s good because if you don’t have a million dollars, you’ll need some cash to pay for things like your clothes, electricity, and anything else you need to buy.
But, But, But… isn’t this supposed to be an early retirement strategy? Farming is damn hard work! Besides, you’re just an office drone – you have no clue how to farm, amiright?
Step 3: Hire a Local Farmer
Well, you certainly don’t need any farming knowledge, and you don’t even have to work if you don’t want to. That’s because you can hire a local farmer to help you – and it won’t cost you a dime. You can even sit back in your hammock, and have your hired farmer do all the work, if that’s how you roll. Me personally, I like the physical work that comes with farming. It’s invigorating, and it keeps you busy… I just don’t like so much of it.
Here I am with my hired farmer planting seeds on my farm (which cost $10,000):
Your hired farmer will be as strong as an ox, and will come with all the local knowledge you’ll ever need – when to plant and harvest crops, how to do it, what fertilizers to use, even intimate knowledge of what grows best in different corners of your little farm.
So, how do you get all this without spending a dime? You share the harvest.
Here in rural Bolivia, for the low low price of 50% of your harvest, you can hire a farmer with all the knowledge, skills, and brute strength you’ll ever need for your little farm. If you prefer to pay him in cash instead, you can do that too, for just a couple hundred dollars per month. You may also need to let your farmer live on your little farm, so chose someone who’s a good neighbor.
Step 4: Build Your House
You need a place to live, right? Well, that’s where the remaining $15,000 comes in. Your farm may have come with a house already, but let’s assume you need an upgrade.
In a place like this, you can build a nice 2-3 bedroom brick house with electricity and running water for only $15,000. I should know, because I built a 6-bedroom, two-story house here for only a little bit more.
Here’s a photo of our house. No, I didn’t actually build it myself. All the labor was hired out, and I didn’t lift a thumb until I turned a key to open the door. It’s not totally finished, but so far this house has only cost us about $25,000. And you can build a smaller one for only $15k:
Step 5: Achieve FIRE
So now you’ve reduced your expenses to bits, you have your land, you have your house, and you have your farmer. You’ve spent $10,000 for the farm, and $15,000 for the house – $25k total. If you share half of your harvest with your farmer, that one acre plot of soil and sunlight will still give you enough fruits, vegetables, and meat to feed your family, plus enough leftovers to sell in the market for cash. It can be enough cash to cover your modest living expenses in a cheap place like Villa Abecia each year for as long as you wish.
So sit back and enjoy your FIRE for a total of $25,000.
Is It Worth It?
Is this for everyone? No way! Not only do you probably have to move to another country and perhaps learn a new language, but say goodbye to your favorite restaurants and doggie parks. Au revoir to your hot yoga classes and sayonara to the shopping mall. You’d probably lose some friendships too. No, this is not an easy path to financial freedom.
And this path is not for me. It is too much sacrifice to achieve FIRE in my opinion. I would rather put in a few more years of shitty bosses and petty office politics than commit to decades of a farming life in rural Bolivia. But, it is possible. And, there are millions of people around the world who live like this – free and independent. Many of those people think working in an office for 10-15 years so that you can keep your creature comforts is overkill.
So, the possibility is compelling to think about. It makes me realize that everything we put ourselves through in Corporate America – the long, long days at the office, the weekend fire drills, the dim lighting, and the vitamin D deficiencies – everything that early retirement dreamers dream to escape – that none of it is necessary.
None of it is necessary, because for a mere $25,000 plus a few good farming tools, any corporate drone can be financially independent if they are willing to make the sacrifices. The question is how bad do you want your freedom?