Rome There is no beach in the background, no palm trees, no mountain panorama. Kristy Shen and Bryce Leung video call from an Airbnb in their native Toronto. This is highly unusual for the couple: they have both been in early retirement for seven years.
At the age of 31, they quit their well-paid jobs as software developers – and have been living their dream of eternal nomad existence ever since. They lived in Vietnam, Portugal or Taiwan, all financed by interest and profits, which their portfolio, which is mainly based on bonds and diversified equity funds (ETFs), distributes.
In the past two years, an illness in the family and the pandemic have forced the two back into a state they were no longer used to: living in one place permanently. “We want to go back to our backpack life,” says Shen.
Traveling around, meeting friends all over the world, that makes her happy. Shen and Leung are among the most well-known representatives of the “Fire” movement. The abbreviation stands for “Financial Independence, Retire Early”.
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Behind it is an ever-growing following that no longer defines itself by lifelong work – but by how to get off the job hamster wheel as quickly as possible. And then, finally free, to do exactly what is important to you.
Kristy Shen & Bryce Leung: Quit Like a Millionaire
Financial Book Publisher
Munich 2022
384 pages
18 euros
For Shen and Leung, it was always travel. They meticulously documented their path to financial freedom on their blog “Millennial Revolution”. Almost exactly three years ago, they released their first book, Quit Like A Millionaire.
A lot has happened since then: Donald Trump was voted out of office as US President, a pandemic swept the planet, and then there was the Ukraine war and energy crisis. For the German translation that has just been published, they haven’t changed anything, except for the foreword. “We only address the current market situation there,” says Leung. The rest stayed the same. “So far, our strategy has proven to be timeless and very resilient.”
Their portfolio was one million Canadian dollars when Shen and Leung took the step towards financial freedom in 2015. From a young age, the two invested much of their salary in ETFs and bonds, lived frugally and climbed the salary ladder by switching jobs quickly.
At that time, they calculated with the four percent rule, which is very common in the Fire world: the assets saved must be so large that four percent of them per year are enough to live on.
Since the capital markets grow by an average of seven percent over the long term and inflation has to be subtracted from this, this four percent buffer is theoretically enough for a lifetime. Shen, who comes from a poor background and grew up in China, kept detailed records of her expenses. $40,000 a year should be enough – they had saved up 25 times that at the time.
Hardly affected by inflation due to travel
Today their portfolio, the structure of which the two describe in the book with many graphics and tables, is worth 1.7 million dollars. For this year, they’re going to get roughly $52,000 in interest and dividends. “There are many banks in our funds. Rising interest rates have made people’s mortgages more expensive — and banks have made more money,” Leung said.
Your dividend has already increased by ten percent in the current year. “That’s more than our actual inflation.” In any case, inflation hardly bothers them. “If you don’t drive to the office, you save money on fuel and also have time to cook for yourself.”
Travel and digital nomadism are the best defenses against inflation. “It’s always cheap somewhere in the world,” says Leung. For example in Japan, which has recently become much cheaper. It goes without saying that the country is on her travel plan for the coming year.
In any case, the couple is no longer shocked by crises or bear markets. “We’ve had about four stock market lows since the beginning of our adventure,” Shen lists: In 2015 it was the oil crisis in Saudi Arabia, in 2018 it was Trump, then came the pandemic, now it’s the Ukraine war. “The argument for Fire gets stronger with every crisis.” They are living proof that the plan works.
They don’t even have cryptocurrencies. “For us, the speculative portion of the portfolio may not exceed five percent,” explains Leung. In order to become financially free, you need a stable passive income. With stocks, you can look at financial reports and try to somehow evaluate the investment. “There’s no math in cryptocurrencies, it’s like gambling.”
The Fire couple from Canada on the road. With accumulated assets and a good investment strategy, both can finance their lifestyle.
(Photo: Private)
Her lifestyle hasn’t changed in seven years. They still spend less than $40,000 a year. And this despite the fact that they were last living in Canada – and no longer in cheaper places than before. “The slump in the stock market at the beginning of the corona crisis made Toronto much cheaper,” says Leung.
In the end, the prices for Airbnb apartments even fell below those of long-term rentals. In addition, saving money has become part of her personality. Even if they wanted to, they could hardly increase their expenses. Recently, Shen bought a new pair of jeans for $120 — “After that I was stressed all the time about what happens if I sit on a piece of gum or drip juice on it.”
She then went back to the thrift store – where she can get pants for ten bucks. “Being frugal is a lifestyle choice — and not a sacrifice for us.”
They prefer to spend the money on experiences, on hiking tours and good food. Sometimes they also splurge: they want to go to Peru in the fall. “In the capital, Lima, there is a famous star restaurant that is fully booked for months and costs around $300 per person,” says Shen.
You have a lunch reservation, you’re on the dinner wait list. Otherwise, the two cook a lot themselves, using the “Too Good To Go” app, in which restaurants and supermarkets sell leftover groceries cheaply.
Your lifestyle becomes more accessible to the average person
After two years, your wanderlust is great: apart from a trip to Croatia in the spring, you have only been to Canada. In addition to Peru, they have also planned Colombia for the fall and want to climb Machu Picchu. In 2023 they want to go to Thailand for several months – if Leung’s father’s health allows it.
Your future model could therefore also be one of “semi-nomads”: on the road for half the year and with the family for the rest. “We shouldn’t complain if we’re only traveling for six months,” says Leung. You know enough people who only have two weeks of vacation – and still have to beg for the two weeks.
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The Fire movement is also growing in Europe. “You have a tool that you don’t have in North America: you can just move to where it’s cheapest to live and where you have the greatest tax advantages,” says Leung. The pandemic has also broken many thought patterns.
Nomadism and frugalism used to be ridiculed. There are now 23 countries with visas for digital nomads. “Our lifestyle is still as relevant as it was many years ago,” says Shen. However, with more home office and home schooling, it has now become more accessible to the average citizen without a portfolio worth millions.
Leung’s ex-boss was also always skeptical.
Then the pandemic came – and his kids only learned online. “He wondered why he should pay so much money for a private school,” says Leung. He began teaching them himself, moved to Costa Rica with the family. “The pandemic forced him to try it, and suddenly he found out: It works.” Albeit belatedly: Now even Leung’s ex-boss is thinking about Fire.
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