Our Number

As you may have read, our current plan for achieving financial independence involves a move to the Philippines at some point in the medium term. I’ve posted a lot of net worth updates showcasing how far along we are, but what I haven’t really stated explicitly is exactly what we’re aiming for.

With inflation it’s a moving target of course, but another part of why I haven’t shared an exact figure is because it’s hard to pin one down. The fact that we own a house freehold over there means Googling “Cost of living in the Philippines” isn’t very helpful as most articles include accommodation costs. And the Philippines has so many cost of living options. You can eat street food, shop at wet markets and spend hardly anything or you can go to supermarkets and shop at malls and spend nearly as much as you do here in NZ.

Factor in the fact that we’re a family of four and calculating just how much money we need is a bit of a guessing game. All up, anything between $500,000 and $750,000 should be enough. We’d like to have enough money to be able to afford to travel a bit each year as well. Exactly when we pull the trigger may come down to a simple need to get on with at rather than being in the perfect financial position, depending on how long we feel like hanging around in our jobs and how much Mrs. R2A misses her family in the Philippines.

But as an approximate situation, this is roughly what our number should be and what it will likely be made up of in the year 2026:

  • As a (very) rough guide, we should need around $625,000.
  • At that point in time, we can probably count on getting around $400,000+ for our house (very conservatively) unless a market downturn happens in the year or two before we pull the trigger. In that case we may have to look at tenanting it, at least for the time being. We will be mortgage-free.
  • We’ll probably have around $125,000 in our KiwiSavers combined. This money is available for anyone who leaves NZ for more than 12 months.
  • We should have at least $50,000 in Sharesies. Again, subject to there not being a bear market at the time (in which case we could delay if we needed to or just take an initial one or two year trip to the Philippines to see if it’s definitely what we want).
  • Obviously this leaves us $50,000 short, so if it’s not looking like our home equity will make up this shortfall, we can be more aggressive contributing to Sharesies.

There will be other money, such as not-insignificant thousands of dollars that would be paid out in leave when we quit our jobs, but that money would essentially just be moving costs for going to the Philippines so it all cancels out.

So that’s us (vaguely). I’d be keen to hear other people’s plans! If you’re planning to retire (or just be financially independent) overseas, how are you calculating how much your life will cost there and where you’ll get the money from?

Comment Policy: For this blog, I’ve implemented a Comment with Kindness policy. You can read more about it here, but the gist of it is: Follow what I call the “Grandma Rule”. If you wouldn’t take that tone with your grandma, your comment probably won’t make it through moderation.

2 Comments

  1. We don’t have a fixed FI number ourselves. Although we haven’t really sat down to figure it out. We just have the $1M figure based on the annual expenses.

    Have you factored in the healthcare and education costs of moving to the Philippines? It’s cheaper definitely but not free or subsidised like here in NZ.

    • Yeah we realise we will need health insurance and may need to help our kids pay for university. One of the upsides of this is that it means our annual expenses would actually drop off over time to an extent, once our kids have graduated. Just one more thing to muddy the waters!

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