37-year-old millionaire reacts to couple who retired early with US$2.2 million in Portugal: It’s ‘like cheating’

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    Insert picture: Grant Sabatier

    CNBC

    4th December 2022 – (Lisbon) Dianne and Guillermo Rastelli retired in 2018 at ages 44 and 47, respectively, with US$2.2 million. The pair decided to move abroad, first to Mexico, and then to Lisbon, Portugal, where they currently reside.

    They spend their days running a Youtube channel where they document their financial journey and ongoing search for a “forever home” overseas, which still leaves them plenty of time to enjoy their hobbies and meet for happy hour every day at 5 p.m.

    It’s a lifestyle that’s tough to criticize — even for Grant Sabatier, creator of finance website Millennial Money and author of “Financial Freedom,” a book that helps guide people toward the kind of financial independence the Rastellis enjoy.

    For one, he thinks the couple were wise to move abroad to cut down their cost of living, a move known in the FIRE (financial independence, retire early) community as “geo-arbitrage.”

    “Portugal is like cheating when it comes to FIRE, because I think the cost of living is like 25% or 30% what it is in the U.S.” Sabatier tells CNBC Make It. “So if they’ve saved $2.2 million, that effectively means they have $6 or $7 million in U.S. dollars.”

    Sabatier also admires the Rastellis’ commitment to investing their savings. The couple’s 2018 net worth of $2.2 million had grown to $2.6 million as of June 2022.

    “They’ve been able to participate in the end of what was really one of the best bull markets in history,” Sabatier says.

    The market has since experienced a steep decline, making it tough for retirees to live off their portfolio, since any withdrawal from their accounts today means selling investments after they’ve slid in value. A silver lining for the Rastellis: They enjoy rental income from three properties they own in northern Virginia.

    Before they left the U.S., they sold the house they were living in for around $120,000, a move that Sabatier views as suboptimal. “That’s one of the fastest appreciating markets in the country,” he says. It would have been financially smarter to hang onto it as a rental for as long as possible.”

    Sabatier also wonders if the Rastellis have been too conservative with their day-to-day expenses. By moving to Lisbon, the couple slashed their living expenses to $3,700 a month, down from a $7,000 monthly budget in the U.S.

    “They have like 70 times their expected expenses based on where they’re living in Portugal,” Sabatier says. “My guess is they could have FIREd maybe three, four, five years earlier.”

    Overall though, they have done everything right — “maybe too much right.”

    “I would encourage them not to be too beholden to their spreadsheets, and maybe take a little bit more risk in their life,” Sabatier says. “Maybe spend a little bit more money if they can to see how it makes them feel.

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