In his book, The 4-Hour Workweek, Tim Ferriss proposes that we shift our focus from end-of-life “macro” retirement to more frequent mini-retirements, which might be spaced throughout a working career. Consider it a type of sabbatical, but one that you can take multiple times throughout your working life — and not reserved for academics or the super rich.
Ferriss took time to speak with me about his notion of mini-retirements. Last week, I published the first part of the interview, in which he discussed using mini-retirements to get more out of life. In today’s excerpt, he provides some real-life examples of how to put this concept in action.
Important note: In our conversation below, Tim describes methods that work for him, techniques that he’s developed over the past five years. Your techniques might be different. For example, Kris and I can’t just sell our house and move to London for 18 months, as much as we’d love to do so. If we were to start taking mini-retirements, our method would differ from Tim’s. Don’t get caught up on the specifics — consider the big idea, and view Tim’s examples as one way of making this a reality.
Related >> Retirement Strategies: How are you Doing?
It occurs to me that one way to approach the mini-retirements, at least financially, is to save for them, just as I might save for a new car. It’s not necessarily money I’m pulling from retirement then. It’s money I’m pulling away from a Mini Cooper and setting aside for a mini-retirement. I think the mini-retirement would actually provide more value to me at this point.
Well, sure. And I think one assumption that [you’re making] is that you spend and not save money on a mini-retirement. Let me offer a personal example. The personal stories in the book are mostly from experiences I had between 2004 and early 2006, traveling around the world for about 18 months. During the first twelve month period of time, I actually saved $32,000 when compared to sitting on my couch watching The Simpsons in my apartment in the Bay Area.
When you recognize that the costs of travel are mostly transportation and housing costs, and that you can rent a posh apartment for three to four weeks for the same price as staying in a mediocre hotel for four days, things start to get very, very interesting. You need to amortize the transportation and housing costs over the period of time that you’re in this specific location. So I saved $32,000.
There are some very interesting instances and quite simple approaches for actually making money — and let’s just look at making and saving as essentially the same thing, improving the balance. You can actually improve your financial balance by taking mini-retirements.
So if I saved $32,000 by taking a mini-retirement to Panama or to Argentina or to Thailand, and I do that once a year, that’s an additional $32,000 that I can invest into a 401(k) or a Roth IRA or a profit-sharing plan…You end up at break-even, but had a mini-retirement to Thailand and you have an additional $32,000. [J.D.’s note: Tim’s point is that it can cost less to live in another country — so much less, in fact, that you save a significant amount of money. He’s not implying that you earn money by traveling. That’s a separate issue.]
You say you had an apartment. Were you still paying for the apartment while you were on your mini-retirements? Or did you sub-let it? Or did you let the apartment go?
I was initially paying for the apartment and then I realized it made no sense, gave it up, and ended up putting my belongings into storage. I went from $1,500 a month to $150 or $200 a month. That’s what I did.
There are other cases where people who go on mini-retirements will do a house swap. Why not find a wealthy family in, let’s say, Panama who will let you use their house in exchange for them using your house for a four-week period?
If you happen to be on the younger side, or on the adventurous backpacking side, then you can do couchsurfing, where you’ll actually end up in volunteers’ homes where locals will show you around, all for free. There are options to fit every financial risk profile. [J.D.’s note: Tim recently featured a guest post about using mini-retirements to travel with an international volunteer organization.]
Photo from Tim’s blog.
The hardest part is deciding. Because until you decide, most people can’t plan. As soon as you say, “I’m going to go on Orbitz, and I’m going to buy this ticket” — once you make that decision then all of a sudden it’s pulled out of the realm of hopeful thinking and it goes into tactical mode.
This brings up another question. During the winter, you spent some time in South America for a mini-retirement. What were the logistics like of planning that trip? You say that deciding to go, that’s the tough part, but what do you do next? How does a person prepare for a mini-retirement?
I’ve met one of the top programmers at a company out here in Silicon Valley. He’s a very smart guy, but he tends to burn himself out because he works too much. So he takes what he calls “trips to nowhere”. If he feels himself getting burned out, he’ll just go on Orbitz and like roll a 20-sided die and pick a place to go. He’ll buy a ticket.
I don’t quite go that route, [but still] I’m a bit of an extreme example. It takes a bit of training and conditioning to get to the point where you can do what I’m about to describe from an emotional/psychological standpoint. It’s actually really simple to do. It’s a lot easier than what most people put themselves through.
So what did I do?
- The day after Christmas, I decided I am going to go to Uruguay, to Punta del Este, for a week or two, and then also have an apartment in Argentina on either side of that.
- I went on kayak.com, bought my ticket going down and coming back.
- I e-mailed my friend in New Zealand. I said, “You’re always talking a good game about Punta del Este, and how I don’t know what I’m talking about because I haven’t seen this, that, and the other thing. I’m going. You told me you’d come with me. Buy a ticket.”
- I send an e-mail to a German gentleman whom I found via Craigslist whom I’ve rented my past three apartments in Beunos Aires from. So that was lined up for me.
[Buenos Aires] was basically my fallback plan. I had flights in and out of Argentina because it’s extremely difficult to get housing in Punta del Este. […] That was the first time I’ve been to Uruguay, and probably the last time I’ll go to Punta del Este. It was fun and it was great, but it was a little on the snobby and expensive side. Now if I wanted to be in Buenos Aires or in Panama, you could spend $250 a week and have more fun than I did when I was in Uruguay.
As far as packing, I just took a week’s worth of clothing. [When you’re] going to a warmer climate, especially in the summer, you don’t need anything. When you get there, buy a $2 pair of flip-flops and a towel and a t-shirt and you’re fine. You really don’t need to buy much. I follow the B-I-T philosophy of travel: buy it there. Then leave it or sell it there. You just set a settle-in fund. You have a budget, let’s say, of $150 and you can take care of everything rather than bring five Samsonite suitcases with you.
When you go to these places, how do you build connections with the locals? I’m assuming that you’re getting out and you’re meeting people and you’re doing things while you’re there.
Right. I’m a language fan. The beauty of mini-retirements is they give you more time than you’d otherwise have to really immerse yourself in the culture and routine and language of your location.
I will generally go to a place where I’m learning the language. If not, then I will go out of my way to try to find a local. It’s really not that hard. In the U.S. we’re really bad at this, but in many places in the world, if you just walk up and say, “Hey, how are you? I’m sorry, I really don’t know the area. Can you recommend a good restaurant nearby?” or “What would you recommend I do this evening” or something like that.
When I was in Copenhagen, that’s all I did, and I had 15 or 20 friends by the end of five days who were all willing to help me out. Basically they’d say, “Hey, don’t worry about it. Just come with us. We’re going to this bar.” And then boom! I’d get there and there were like eight new friends. It’s really not that tough.
It’s easier, certainly, in a place like Copenhagen where they speak English, or in London, Australia, New Zealand. In Panama they speak English quite well. But if you’re going to Oslo, Scandinavia — very, very easy. If you’re willing to learn even 10 sentences in a language, you can also very easily find people who will help you. Make the effort and people will reciprocate.
For example, I was in London but went to a Lebanese restaurant, and while I was there, I learned how to say “nice to meet you” in Arabic. I don’t speak any Arabic — just a few words, that’s it. But I’ve had so many people offer to cook me meals at home, introduce me to their families, to their friends, show me around town — and this is not in Arabic-speaking countries, but simply people I met who are of Arabic descent or origin. I’d say “nice to meet you” and they’d go, “Oh my god, how’d you learn that?”
I also tend practice sports, and I like art — it’s not too terribly difficult to find a group of people with similar interests and simply ask them if you can tag along. Most people reflect your attitudes and behavior. If you’re friendly and kind of aloof and humble, then people will generally reciprocate that. It’s not too tough. You just have to get out.
A great way to do it is to take a map and then just start walking. Walk for 10 or 15 minutes without looking at the map, and just get totally lost, and then find your way back to wherever you came from.
One of my favorite things I did when we were in London was, one Sunday my wife’s family and I were going to go to the British Museum and we were clear across town. They took the Tube, and I decided I would walk. It was probably a three- or four-mile walk, but it was awesome. I got to see so much of the city that I wouldn’t have seen otherwise. I didn’t actually meet anybody because I was walking briskly to catch the party, but it was amazing. I can see how just getting out there and seeing the city, getting out of the normal tourist spots would help.
Yeah. Move slowly. Go out and walk around. Take a bike tour, also. Almost every major city has a bike tour.
If I decide to fly somewhere last minute — no preparation — I will reserve a hotel or a hostel for two days. As soon as I land, the very next morning or that afternoon, I’ll take a bike tour of the city, which will give you a very good feel for different neighborhoods, and a very good understanding of the city. I’ll ask all of my questions of the tour guide, as well as — if I’m in a hostel — the head of the hostel. People in hostels tend to be more knowledgeable staff-wise than people in hotels, as far as how to find apartments and so forth.
Let’s say I do the bike tour at one in the afternoon, one to four. Well, beginning at 6pm I’ll go on Craigslist and perhaps use a weekly magazine, like Bild in Berlin, and start sending e-mails out to potential apartments in the neighborhoods that I’ve already identified. Generally within 24 to 48 hours, I’ll have an apartment lined up for two weeks. What I might do in some cases is rent it for one day, if possible, to make sure there isn’t too much noise or a bus stop right next door. And then I’ll have it for two weeks. If I like it, then generally in that first week I’ll renegotiate for four weeks.
Bike tour photo by Areta.
At this point, our conversation was interrupted. When we reconnected, our discussion moved in a different direction — we began to talk about entrepreneurship. Look for that final part to this interview on Sunday.
You can read my previous articles about Tim Ferriss and The 4-Hour Workweek here:
- Tim Ferriss interview part one: Uncommon lifestyles and the truth about the 4-hour workweek
- Tim Ferriss interview part two: Using mini-retirements to get more out of life
- Book review: The 4-Hour Workweek
Timothy Ferriss, nominated as one of Fast Company’s “Most Innovative Business People of 2007,” is author of the #1 New York Times, Wall Street Journal, and BusinessWeek bestseller, The 4-Hour Workweek.
GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.