10 Nov

Bruno’s Path to Financial Freedom

Hi everyone, Amanda and Travis here! We’re a young couple in our early thirties and we saved $1,000,000, quit our jobs, and began our journey of financial independence. We planned our first big adventure: driving from California to Costa Rica. We bought a used 2000 Toyota 4Runner and aptly named him Bruno. We fixed him up so that we could sleep in the back, then we hit the road to camp and travel our way through Central America!

costa_rica_river_cross

Crossing a river with Bruno (our Toyota 4Runner) near Sámara, Costa Rica!

After moving from Canada to the U.S. and working at our careers for about 7 years, an idea was germinating in our minds. Life is simply too amazing and precious to burn away the majority of it working for someone else, commuting into a generic office like sheep herded into a corral. Staring at a computer screen for eight hours a day like motionless potatoes, comfortably positioned in a rolling office chair as decades upon decades fly by. Life is short! Waiting for the full social security retirement age of 67 just doesn’t leave much time for all the things we want to do in life.

Cruising along a smooth road near Oaxaca, Mexico

Cruising along a beautiful road near Oaxaca, Mexico

The Taste of Freedom

It all started a few years ago when Travis got laid off from his job in Berkeley, California:

“Suddenly, instead of waking up early and going to work everyday, I could instead do whatever I wanted! Sure, I needed to hunt for a new job, but that task was only eating up 30 mins per day. I could now sleep in, work on personal projects, exercise, read books, hang out with my cat, enjoy some cannabis, listen to music and go for a wonderful bike ride around Oakland… life was great! I could have dinner ready for Amanda when she got home from work, and maybe even bake some chocolate chip cookies!”

Sadly, after a couple months it all came to an end: he got another job.

It was at this point that the financial numbers were furiously crunched. Exactly how much money would we need to stop working, presuming we moved somewhere with a low cost of living? The answer ended up being $1,000,000. Living on a 4% safe withdrawal rate would give us $40,000 per year to live on. If you don’t live in the most expensive cities, this amount can go a long way.

We started reading Mr. Money Mustache‘s blog and were both hooked. We embraced the idea of mustachianism wholly and completely. Expenses were slashed and we ramped up our savings. We moved our money to Vanguard and optimized our portfolio with the Lazy Portfolio recommendations from Bogleheads. Eating at our favorite restaurants was saved for special occasions only, and instead we focused on making routine healthy meals at home. We hung our clothes out on the line instead of using the dryer. In the winter we wore sweaters around the house instead of jacking up the thermostat. We used bikes to get around town whenever possible and tried to use public transportation for our commutes. All of these little things added up and we were well on our way to saving for our goal!

View of beautiful Guanajuato, Mexico

The colorful, vibrant town of Guanajuato, Mexico

On Autopilot: Working Hard and Saving Money

We were both lucky to have grown up in a wealthy, democratic country and have stable, loving families. With this solid foundation, we each got university degrees and aggressively jumped into our careers making the big bucks. Amanda has a Chemical Engineering degree and Travis has an Information Systems degree. We started out with less than $10,000 in student debt thanks to the affordability of Canadian universities, part-time work and generous families.

Financial independence is achieved by two means: maximizing income and minimizing spending.

To maximize income, we hustled and advanced our careers. Applying for promotions, and working hard to receive raises and bonuses when available. Here is a table we put together for a post on Early Retirement with Zero Income Taxes, showing our income and taxes over the last seven years:

Year Income (AGI) Federal Tax CA State Tax Total Tax Paid Effective Tax Rate
2008 $177,863 $26,290 $11,445 $37,735 21.22%
2009 $158,857 $26,192 $9,713 $35,905 22.60%
2010 $146,863 $23,407 $8,574 $31,981 21.78%
2011 $149,305 $24,775 $8,229 $33,004 22.11%
2012 $207,581 $38,892 $13,507 $52,399 25.24%
2013 $204,718 $38,241 $13,729 $51,970 25.39%
2014 $234,992 $43,428 $16,368 $59,796 25.45%
Total $1,280,179 $221,225 $81,565 $302,790 23.65%

As previously mentioned, we also reduced our expenses as aggressively as we could. Here is a chart from our post Financial Independence – How We Saved $1M that shows the monthly spending we had in our last full year of working:

2014_spending_chart

2014_spending_table

Note that this shows our monthly expenses for everything except our two-story rental home in North Oakland, CA. We lived there for the last six years of working and this was an additional monthly cost of $2,200/mo. So our total cost of living for 2014, including our rented home, was $47,576. Moving forward, our budget is less than $40,000, which is the main reason we’ve moved away from the very expensive San Francisco Bay Area.

Once we optimized our lifestyle to maximize income and minimize spending, things were basically on auto-pilot. To keep track of our savings, in June 2012 we started checking our Mint.com balance monthly and updating a spreadsheet to track our progress. Our frugal actions, combined with a bull stock market during these years, meant we rapidly approached our goal of $1,000,000!

Here is a chart showing the growth of our portfolio over the last few years of aggressive saving and expense slashing:
savings

Ongoing Travels

After quitting our jobs, we took 2.5 months to drive down to Costa Rica from California. We camped in Bruno along the way, practiced our Spanish, and met others traveling the Americas overland.

We signed a five-month lease for a house next to the beach in Nosara, Costa Rica and have since enjoyed our free time. During our first six months of retirement we also took some other short trips to Panama, Washington, D.C., and New York City. We’re now getting ready to head back up to the U.S. in a few weeks. We’re planning to be on the road for about 10 weeks camping with Bruno. We’ll travel to areas we haven’t seen yet, like Honduras, Belize, and Mexico’s Yucatan Peninsula, all the while documenting our experiences!

If you’re interested in learning more about our finances or following our ongoing travel adventures, check out some of the other posts at Freedom With Bruno. We recommend starting with these two categories:

Trip I: Driving from California to Costa Rica
Trip II: Backpacking Panama, DC, and NYC
Trip III: Driving Costa Rica to Nova Scotia
Financial Independence

Thanks for reading! If you have any questions, just ask!

Travis and Amanda

  • This is a great post and shows exactly what you can do with an outsized salary IF you focus on saving it instead of spending it all like so many tend to do.

    This post (well, the one at Budgets are Sexy) was also shared at reddit and it’s amazing how negative the comments are over there. I don’t get how people can look at an awesome achievement of someone else and crap on it. Unless they are ridiculously jealous. Which I assume to be the case. Who wouldn’t want your lifestyle today? 🙂

    Great job!

    • Travis

      Thanks Justin! When you boil it down, the internet is really just a bunch of people who love cat pictures. Occasionally you’ll bump into an angry person on the internet, but for the most part everyone seems pretty friendly!

      • Ha ha, true enough. 🙂

      • PC

        I think some folks at Reddit can be a bit critical of the “anyone can do it” mentality when it comes to incomes and extended travel. Just like Expedition Portal has lots of people running around the world in million dollar Earthroams, not all of us make $100k+, especially if we don’t live in California. Therefore, it takes much longer to save the neccesary funds for extended travel, and some of the financial planning outlined above isn’t quite as easy.

  • Matt @ The Resume Gap

    Right on! You guys are awesome! We’re planning a similar adventure starting next spring. Just found your blog, but we’ll be following for inspiration.

    • Travis

      Thanks!! You planning on traveling Central America? I’ll be checking your blog for updates as you grow it!

      • Matt @ The Resume Gap

        Absolutely. We’re going to start with some road trip time in North America (western US, BC/Alberta, and Alaska), but Central America is high on our list. Whether we drive or fly, I’d like to spend a significant chunk of time slow-traveling in Guatemala, Nicaragua, and Costa Rica, at least.

        • Travis

          Sounds great! Let me know if you start a blog to share pictures/stories!

  • Frea Kroeze

    what love what you do, I’m going to follow as far as possible. This they can never take away your great adventure, lots of safe miles and seize the day, greetings from Holland, Frea Kroeze

    • Travis

      Thank you Frea!!

  • Markita @SweshFit

    Just discovered your blog and love it! Could you share how you guys saved money with food when you were saving? That’s where hubby and I tend to struggle. Did you meal prep weekly or follow a certain schedule?

    • Travis

      Thank you Markita! We would get our fruits/vegetables/eggs from our local farmers market every week, and most everything else from the occasional trip to Costco. The main savings was making our own food at home, and not eating out at restaurants. Often we would plan a day ahead for a dinner meal and maybe take some meat out of the freezer to thaw over night, but aside from that there was not much meal planning. Hope that helps!

  • Fynn

    Hey, I just found this Blog through another website which told your
    story (well, that’s not really important I guess xD). It’s just amazing
    how you 2 made your dreams come true with all this planning and
    execution.

    Actually after I’ve read all this I just wanted to
    give you a huge thank you, not just for sharing everything so detailed
    but for inspiring me so much! As I’m just 20 at the moment I think
    that’s a very good time for me to think about those kind of things for
    my future (I’m known in my circle for being thrifty). It actually burned into my brain already…

    I wish you guys the best for the future & enjoy your trips to the fullest! This Blog is just awesome, I can’t wait to see more of your adventures.
    Thank you and greetings from Germany (hopefully my english is readable)!

    • Amanda

      Hello Fynn! Your English is excellent and your comments put a big smile on our faces! We were also inspired by a blog when we were in our 20’s, so we wanted to give back. Plant the seed of an idea of a different way of life for some people… Happy to have you reading and Glückliches neues Jahr!

  • SC

    Hey there – we live in Canada and have about 1MM NW. I just got laid off and considering just looking for fun PT work once my EI runs out. I have this fear that we will run out of money – do you have that fear? Any plan B?

    • Travis

      Hi SC! Instead of using a fixed budget that doesn’t fluctuate (like the Trinity Study does), we’re aiming to be extra conservative and live on 3-4% of our portfolio even when it drops in value. So we check our portfolio balance at the end of each month and use this to plan ahead for the next month’s budget. This means if the markets self-destruct and our portfolio is cut in half, then we simultaneously need to tighten our belts and cut our expenses in half. We’re confident that we can do this (the main expenses we would likely trim would be travel, organic fancy foods, etc). If you have fears about running out of money, you could adopt a similar strategy! It’s more annoying to constantly fluctuate your budget, but it does provide more peace of mind.

  • Found your blog from a link in another blog. Loving it! My fiance and I have a similar income to your starting income and your story totally inspires me! I feel like we can get there too! Thank you!

    • Travis

      Yes, you can definitely do it! It’s comments like yours that make this whole blog worth it!! Thank YOU!

  • Kay777

    Very inspiring.. Good luck! Wish I had a similar minded partner as I love to do something similar..

    • Amanda

      Thanks Kay! Maybe if there was some aspect of the plan your partner could get excited about, they’d be on board? I know when Travis started talking about quitting forever just to travel that wasn’t enough of a draw for me. I was lured in thinking about how much easier it would be to have both of us home when/if we ever decided to start a family. Everyone’s got to have their own goal in mind to make it work 🙂

  • Gary Valdez

    Hi Travis, what advise can you give someone who makes half your old salary? What can we do to save $1 Mil? We currently don’t have debt, other than our $1700/mo mortgage and the utility payments that come with owning a home. Also, we have a one year old and my wife will be leaving her job after our 2nd is born…. any ideas/advise?

    • Amanda

      Hi Gary, Travis may want to weigh-in as well, but I can give you my two cents!

      First consider that maybe $1M is not your magic number. On average, do you know how much you spend per year? We used tools like Personal Capital and Mint.com to track how much our lifestyle cost us, before we calculated that we needed $1M to sustain us. We were spending $40,000/yr and using a safe withdrawal rate of 4% for the rest of our lives: $40k/0.04 = $1M. Maybe your expenses are $25k/yr, then you would need $25k/0.04=$625k. More on the 4% SWR here: http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

      There’s no magic formula for saving up $1M, other than investing every penny we could into low-fee index funds with Vanguard! So many of our frugal ideas came from online blogs. We tried to trim down everywhere we could and invest the savings: driving less/biking more, drying clothes outside, low heat in winter/no AC in summer, making our own food, buying ingredients in bulk, clothing swaps and Craigslist everything. Biggest suggestion is to make sure any spare cash you have is being invested, instead of sitting in a bank account. It’s really easy to open a Vanguard account online and move money over from your bank any chance you get. Best of luck!

  • Razack Irshad

    Hi Travis,
    I happened to go through your blog and amazed how you two have planned your life. At twenties I started my first Job and still working. In fact I too want an early retirement but with three kids schooling i don’t know how this is possible. What I learn from your blog is planning and having the courage to make a move.
    Im from Sri Lanka and wishing you both all the very best.

    • Travis

      Thank you Razack! Early retirement basically achieved through two options: increasing your income and/or decreasing your spending. Sometimes moving to a new city is needed to increase your income, but this depends upon the career and the country. I wish you luck!

  • CMor

    Hi Amanda and Travis,
    My partner and I are planning to retire early as well. What do you do for your health coverage, e.g. dental, vision, medical expenses? Did you also include in your plans any life/critical illness/disability insurance? This is the most worrisome part of taking the leap/breaking away from the corporate life.

    • Travis

      CMor – apologies for my late reply, somehow I missed your comment! We currently have health insurance through the marketplace in North Carolina, and with subsidies from the ACA our monthly payment is $134/mo for both of us.

      Dental and vision, we plan to shop around and pay cash for those services whenever we need them. Aside from standard health insurance, we’ve not opted to sign up for any extra insurance. You may be interested in reading this post from Mr. Money Mustache on insurance: http://www.mrmoneymustache.com/2011/06/02/insurance-a-tax-on-people-who-are-bad-at-math/

      Looks like you’re on the right path, and I wish you luck on your journey to early retirement!

  • Pingback: Advice for beginning investors? | Dividend Mill()

  • Pingback: 10 Questions with Freedom With Bruno - 1500 Days to Freedom1500 Days to Freedom()

  • Common sense

    This is some bullshit, you didn’t even say what jobs you had. No way you got that much in that time frame.

    • Common Sense

      edit: especially with those degrees

      • C.S.

        edit: nvm.. unless one of you became a computer engineer, but still

        • C.S.

          nvm, i think I see it now