Need 12% Cash Flow to walk away from our jobs. Possible?

[Jason Chmel]

My wife and I are contemplating an early retirement.  Very early.  We have saved well and have some money, but not enough to live on the 4% the mainstream retirement people say we need.

My question is this: Hypothetically If I had 1.0m and need to get 10-12% Cash Flow, after all expenses, including professional management, where I can go off-grid and travel, is it not only feasible but probable that I can do that with STR or LTR? Is this realistic, or unrealistic?

Thanks!

[Henry Clark]

Only if my family helps to pay for you and your wife's costs.  You will understand that if you have done your budget until you both die.

12% cash flow:

a.  Did you pay your income taxes yet in that figure?  Even if you live overseas you still have to pay US income taxes.  Assume 25% or 3% points.

b.  Your company is paying for 1/2 of your health insurance for both of you.  Plus, you still have to pay for your health insurance.  Yes, you can get a hip replacement for $15,000 in Guatemala, a broken arm set for $30 in Belize, and so forth.  But at some point, you will get nailed with Cancer or dialysis and have to come home and you won't have coverage.  Talk with your tax accountant about continuing to pay minimal US federal insurance premiums to stay eligible.  Check on Allianz Global insurance for overseas travel.

c.  Social Security, basically take it off the board, since your highest 30 years will be pretty low.  

d. Inflation: Will your financial investment or your REI keep up with Inflation. Say 5%. Not counting your 12% cash flow return which you're using to live on. That takes another 5% points off your 12% number.

e.  Kids????  Take some % points off if needed.

f.  Have you prepared for this?  Gardening, hunting, fishing, first aid training, house repair expertise?  Let's say you pick a spot and live fairly minimally for $2,000 per month.  Or $24,000 per year.  2.4% points.

g.  You still have to rent, buy or build a house.  Let's keep it simple at $800 rent and another $300 for utilities.  You won't go totally off grid, unless you have trained yourself.  Get a Berkey water filter either way.  $1,100 per month or $13,200  or 1.3% points.

Things are getting a little tight, your life expectancy is getting longer, and your $1mm is only worth about $200,000 in future dollars when you get to the rest home.   Then my family will start to help pay for your families medical and care.

Personally, I wouldn't look for the answer in a REI forum. REI tends to be active. This is more of a lifestyle and budget discussion versus how much you might make.