FIRIE: Financial independence, retire in Europe

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My husband and I are considering buying a house in Portugal. This still sounds insanely unrealistic when I say/ type it. I’ve never had the financial means to buy a house, much less a second house. Thanks to my husband’s equity from his condo, we were able to buy the townhome we now inhabit. On my own, there was no way.

Now, we have two decent incomes and growing investments, along with relatively low housing costs thanks to locking into a low interest rate before the pandemic. Though we could not afford to buy a vacation home at this moment, it is starting to seem within the realm of possibility in the next decade sometime.

The goal of investing in property in Europe would be twofold. One objective would be to set it up for vacation rentals with a local property management company and generate income while we are not using it. If we do this, we would probably reserve it for ourselves for a few weeks each year as well.

Secondly, we would like to retire there. At least that’s what we think now, though there are a lot of mixed feelings on my end. The idea of leaving behind family and friends in the Pacific Northwest is hard to consider, especially as someone who does not easily make new friends. The idea of being a semi-unwelcome expat with a language barrier is also a bit anxiety-inducing.

Setting fire to FIRE

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I know the FIRE (Financial Independence, Retire Early) community has gotten some flack lately, for basically being a bunch of bros who want to use their own wealth to escape from any social responsibility. I think that’s probably an unfair generalization, but of course there is a grain of truth to it.

I’ve always assumed I would be too poor to really retire, even at 65. As someone with a spotty financial history (thanks, the economy) and no inherited wealth to speak of, I just figured I would have to work until I can’t anymore. I have paid a boatload into Social Security, and I even have a small pension coming from my six-year government job. But that’s not enough money to be able to travel and maintain the lifestyle to which I would like to become accustomed.

I would not make a good candidate for FIRE because I am already 50 (how early is early?), and I also don’t want to live like a poor person. I did that for the first forty years of my life, and I would honestly like a bit more financial breathing room in the second forty. Living cheaply is a cornerstone of FIRE, and I’m just not into it. Not that I need a lavish lifestyle, I just want to buy organic groceries and stay in decent hotels when I travel.

Some people like the idea of downsizing and maybe moving to a small farmstead with goats and chickens. I am not trained for that, and not really interested in learning to farm in my sunset years. Others are happy to live in a cheap studio apartment in Bogota and try to avoid getting murdered in the foyer in order to save on rent. I want to live in a neighborhood with good restaurants and maybe an art gallery or something. I will pay more for my bougie requirements. Which means the fundamental “live cheaply” aspect of FIRE is not going to work for me.

My husband is more willing to give up lifestyle amenities in order to retire earlier, and to that I say, “show me the spreadsheet.” I’m not convinced that he can afford to retire as early as he would like to, but if he crunches the numbers and it works, I won’t stop him. But I do have a big caveat about early retirement for myself, my husband, and anyone else: don’t just retire in order to not work. Do something worthwhile.

This gets back to the FIRE critique. A lot of these folks seem to just want to escape the rat race in order to do nothing. Beyond the social implications of not contributing to society in some way, that just sounds boring. And depressing. Write a book, become scuba instructor, teach children how to build Lego civilizations, make a hand-carved canoe. Make it worthwhile, or it will start to feel like a long wait for the next Netflix binge and eventual death.

Lured by Lisbon

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Why Portugal, you may ask? My husband and I first visited Portugal in 2017, where we got engaged on a castle wall in Lisbon. I guess you could say there’s some sentimental attachment there, but that’s hardly enough reason to move to a new continent.

The Portuguese government is eager to have more expats come to Portugal to bring some wealth into the economy, so they make it easy(ish) to move there. The Golden Visa allows expats to stay indefinitely, if they invest enough in real estate. There’s now a new Digital Nomad Visa that makes it easier for those without a big investment to stay longer.

Real estate prices have been “frothy,” with all of the expats moving in, but it is still more affordable to buy property in Portugal than it is to buy our current house. I can think of few down sides to investing in real estate over there, apart from, “can we afford it?”

Portugal has nice weather, fresh seafood, delicious pastries, giant goblets of flavorful gin & tonics, and friendly people from all corners of the globe. As an early force of European colonialism, the Portuguese have brought back influences from far and wide. As terrible as that history is, it makes for a culturally rich place to live—with great food, art, music, and literature at every turn.

Portugal is also kind of out-of-the way as a European country. While the cities and beaches get swarms of tourists during high season, it’s nothing like Spain or the French Riviera. The population is relatively small compared to other nations nearby, and being surrounded by mountains and water means there are no fast trains in and out. It’s a good place to feel a bit disconnected, while still being very much connected.

Decisions decisions

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I’m good at having ideas, but bad at making decisions. To invest in real estate in Europe and eventually move there is the kind of decision I find hard to commit to. For one thing, it involves large sums of money. These kinds of financial decisions have been historically easy for me to avoid, by virtue of not having large sums of money. If we do manage to accumulate a sack of cash, it will be hard for me to let go of it.

Some of the decision-making will be done by the fickle stock market. If our investments go up and my employer-issued stock does well, then we may be able to afford this. If not, then do we take out a second mortgage and take the leap anyway?

I don’t particularly want to get old in the United States. Between the broken healthcare system and the debacle of privatized nursing homes, it’s not a place I’d wish for anyone to grow old. In Europe, they are generally better at this stuff. Of course, as expats we would still need to have health insurance, and pay for health care and assisted living, but it’s just…much cheaper. And cheap does not mean janky.

Also, Portugal is nice, but there are other nice parts of Europe that may still be affordable. I wouldn’t say no to some parts of Eastern Europe. Well, I might say no, but I’d have to visit first and assess the situation. I tend to like cool, rainy weather, but I can live without winter. Weather is going to be a big factor for me.

At a certain point, we are just going to have to decide to do it, or not. I can see us spending the next decade waffling and browsing online real estate listings. Maybe we need a relocation specialist, or maybe we just need to talk to some other expats who have done this already. I joined a Facebook group…but I don’t spend enough time on Facebook to get much info that way.

For now, I’m starting to learn Portuguese. We will be in Portugal next month to explore neighborhoods around Lisbon and Porto to see if we could envision ourselves living there. We weren’t looking at Portugal in that light the last time we visited. I’m excited to visit Porto for the first time and to discover how the locals live. And then, somehow, we have to decide.

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