I was recently interviewed by J.D. Roth on planning and financing mini-retirements. Here is an excerpt:
J.D.
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.
Tim
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.
J.D.
That’s amazing.
Tim
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…