[USER]

Just starting out here. I’d like to barista FIRE in 5 years, once I retire from US military, but I don’t think I’m positioned too well.

I have no savings, maybe $600 in a fidelity acct, $129k in consumer debt; truck, camper, $40k in credit cards, and a timeshare I still owe $14k on. Not to mention anxiety and panic disorder.

For the positives, I have a healthy take home income of $14.7k, and duplex we rent out in addition to a primary home. We have paid off 2nd vehicle.

I’m 35yo with 5 years from a military pension, and currently VA rated at 90%, with an estimated retirement income of $5.5k/mo. My wife receives $979/mo from SSDI

I keep an extremely detailed budget on a spreadsheet which gives me a good view of things.

I like the idea of generating an extra $2,000/mo on top of our estimated income.

We intend to move overseas, either Mexico or Spain

What questions should I be asking, and things to consider changing? I’m tired of trying to fix everything myself…

TIA

[Julia]

I think you should try some of Ramit Sethi’s videos on YouTube. He would definitely tell you to get rid of the time share ASAP.

I like his approach to the monthly budgeting and it sounds like you’ve already got your numbers so it would be easy to figure out.

[Sean]

You make 14.7k plus wife’s $979 per month, I’m assuming both are post tax. So, you spent over 16k per month since you’re in the red every month.

Your retirement will be $5500 you are nowhere close to what you need, I’m sorry to tell you.

You need to start selling junk. Camper needs to go for sure. See if you can sell that timeshare for at least most of what you owe on it. Do you need two vehicles?

If so, sell the truck and buy another cheap used vehicle.

Are you making money on the duplex? How much and how much equity do you have?

Where else can you cut costs, look at subscriptions, dining out, housing etc.

I’d recommend looking into Dave Ramsey as well.

[William]

15k take home pay and you have no savings? Not only that but 129k in consumer debt tell me that you can’t live within your means.

Retiring before you get your spending and debt controlled is not realistic.

[Tom]

Retired Army here… If you live overseas, what impact will that have on your health care expenses?

VA care may not be available overseas and medical care will become an out-of-pocket expense (granted, most likely at less cost than what you would pay out-of-pocket in the US, but still an expense).

I don’t have a VA rating (personal choice) so I don’t know the impact.

[Tonya]

Question #1 is, you are making decent money, where is it going that you have no savings and such significant debt?

[Shawn]

How do you have your VA rating already? Most retirees can’t start until 6 months before retiring. Even if you think you qualify, until you go through the process, you won’t know for sure.

And being only 40 at retirement means you are enlisted, so your pension may not be as high as you are projecting.

Aside from what everyone else has said (use Ramsey to pay off the debt, etc), you still may have a PCS before you retire, which would throw a wrench in your plans.

As I see it, your take home is $14k, but you want to go down to $5k a month (estimated) without the resources to tap into if you need it.

Start at least contibuting to the TSP to get the match while you pay down your debt.

Try living on your $5k projected, using the balance to pay off your debt to see how realistic that is for you.

[Anjoli]

Something isn’t adding up here. You keep a detailed budget and you have a high income, but you’re carrying 40k in credit card debt? You need to pay that off immediately. You also have no savings.

If you’ve been spending almost 15k/month, then 6k is a big drop.

Even with barista FIRE and an extra 2k per month, you’re virtually cutting your income in half.

Are you and your wife able to live off of that?

It *shouldn’t* be a problem, especially in another country, but it will be a problem if you don’t have your spending under control.

[Lindsey]

If you’re planning to move to Mexico/Spain in 5 years maybe look to offload camper/truck/timeshare sooner than later so you can pay off credit cards and assemble some savings.

Does the 5.5k include disability?

Is your 90% a self estimate or have you been rated while in service?

[Steve]

Do you have right to work in Spain? I went to graduate school in Barcelona and it’s not very easy to get a work visa, certainly not in a barista type job.

[Dennis]

You need to Dave Ramsey baby step before you even consider retirement. Unload all the toys and get rid of that debt.

Beyond that you need a hard look in the mirror to understand why you are in that debt to begin with and never spend like that again.

[Noa]

Are you planning to sell the real estate when you move? That alone might be enough to clear the debt and build your savings.

You therotically need 600k to generate 24k/year.

We live in Mexico, and 6.5k is not a bad income.

Do you have kids you need to think about?

[Jasmine]

You like the idea of an extra 2k per month? What does that mean? From what?

[Paige]

I’m not familiar with military pensions or what it means to be VA rated at 90% so I apologize if I’m missing key information with this advice but I don’t see how you could barista fire in 5 years with no liquid savings and so much debt.

It sounds like you currently have take home pay of $15.7k and you’re spending about that much each month so living off of $2,000 per month or $2,000 in addition to the military pension if you’re able to get that at age 40 doesn’t sound feasible.

FIRE is intended to include financial independence so that you can retire early.

I’d work on the debt first and see what you can save as well

[Hahn]

Have you actually looked into what it would take to emigrate? Not alot of countries are looking to allow low income retirees migrate

[Lori]

So, after some research, I now know what it means to barista FIRE! I also know now what Coast FIRE is. In addition, I discovered that I did barista FIRE at age 47 from my government job and am on my way to Coast FIRE in my current position!

Having said that, I can see your situation more clearly. If you’re planning to Barista FIRE, paying off most or all your debt is essential.

With your monthly income of 15K alone, that should be doable. Determine how long it will take and how much money you are able to allocate toward the $185,000.00 of debt.

Once you have that figured out, you can wipe out the debt and reallocate the money toward building the funds needed to cover your monthly expenses for barista FIRE.

If this is a goal to accomplish within 5 years, you may have to do some serious hunkering down to eliminate the debt with lightening speed in order to intensify your savings goal.

With your panic and anxiety situation, you may need to really give the 5 year timeline some serious thought.

Health over wealth always. My best to you and thank you for your service!

[Nicole]

You keep a detailed budget and have $129k in consumer debt? I think you need to create a monthly budget you stick to.

Paying off your debt alone will take years, so I think you’re a bit ahead of yourself if you’re planning to retire in 5 years.

You need to get a handle on that debt

[Aaron]

Without commenting on the financial situation I would suggest you read the book by Kathleen pedicord, how to retire and live overseas.

It provides some great frameworks for how to approach planning to retire abroad.

[Author]

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