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He’s one of an increasing number of people joining the FIRE (Financial Independence, Retire Early) community – people who make extreme savings while investing, with the goal of retiring much earlier than the average person. People in the community often start by calculating their FIRE number (generally 25 times their annual expenses), which is the amount of money they expect they’ll need to retire comfortably. FIRE followers usually withdraw 3 per cent to 4 per cent of their savings each year to cover living expenses in retirement. The FIRE method is controversial and very few people ultimately manage to retire early – but Naz is one of them. Now he spends his time living by the mountains in Chiang Mai, northern Thailand, and taking up hobbies like surfing, jiu-jitsu and yoga. Naz says he worked hard and made sure he spent very little to get where he is. After winning a US government scholarship as a teenager, he got a well-paying job in an American software development company. “I figured out, living like a student and getting a software developer’s salary, I could put away 60 to 70 per cent of my salary into investments,” he said. “So I lived modestly and saw my account ballooning.” Never miss the latest wealth and culture news from Australia and around the world — download the news.com.au app direct to your phone. Throughout his twenties he tried to spend as little as he could, living on $1,500 ($A2,550) to $2,000 ($A3,400) a month. Luckily he was able to work remotely so he was living all across the world. Naz spent time in Poland, the US, Dubai, Spain, Portugal, Germany, Indonesia, Malaysia, Thailand, Sri Lanka and New Zealand – all while earning American dollars. It meant he had enough money for a good life, especially in Asia. “You can have an apartment for $500 dollars ($A850) and then eat takeaway and that doesn’t break your budget,” he says. He estimates his current rented flat – a one-bedroom serviced apartment – would cost him about £3,000 ($A6,300) in London. In Thailand, it’s costing him about $500 ($A850) a month. It includes cleaners who come in and change the bed sheets, as well as a gym, pool, concierge and 24-hour security. And he doesn’t own much stuff. His only expensive item besides his laptop is a scooter, affectionately named Susan. “I don’t want to be owned. I want to be free. The more you own the more things own you,” he said. He can now afford luxury, but it doesn’t do much for him. “Last year I was at a five star resort for my birthday,” he said. “It was nice. We had a good time. But I felt just fine, no different than if I was somewhere camping or something.” Naz says he’s always had a frugal mindset because of his background. “I grew up in Ukraine in the 90s and though we didn’t have much, we had enough. We never splurged. I’m just wired that way,” he said. Eventually he had saved enough to buy a flat in Ukraine and one in Poland, both of which he rents out as AirBnBs. Both of these give him a passive income. The rest of his money sits in funds he can forget about. “I invested in ETFs (exchange-traded funds). Bonds, and stocks. That’s the lowest maintenance. Set and forget. It just works,” he said. Naz says his investments are making him even more money because of where he lives now. “In Thailand it’s a territorial tax system,” he says. “My stock portfolio is not taxed. It’s growing faster than for someone who lives in the UK or in Germany.” Investing can often give you greater returns than if you put your money into a cash savings account, if you’re willing to leave your money alone for at least five to 10 years. You should be aware that your money can go up or down with investing, and you could end up with less than you put in. You can read our full beginner’s guide to investing here. By the time he reached 32, Naz had reached his “magic number” – savings that meant he had enough to retire. At the time, he was earning about $120,000 ($A204,000) a year. So he told his boss he was handing in his notice. They tried to keep him on and his colleagues were dumbfounded at the fact he was retiring, but Naz was set. He closed his laptop, boarded a flight to Bangkok, and marked the moment with a five-day festival. “It was kind of like this big entry into the new chapter in life through a massive party. I felt horrible after five days. I realised I wasn’t 22 anymore. But I made good memories,” he said. Naz says retiring young hasn’t all been easy and the first weeks of freedom were disorienting. “We are creatures of habits and my work habit was destroyed all of a sudden,” he said. “I didn’t have to do anything. That took about three months to settle down and completely retire my brain from thinking about work.” But then he got into the flow of things and spent slow mornings with coffee or reading and surfing. He also works out and is into endurance events, and blogs about his adventures. Realising much of his socialising was with colleagues, he was lonely for a little while. But soon he made friends elsewhere and now spends his afternoons scooting into the mountains and having long lunches. He has since started a new project called Feedback Pulse, a tool that companies can use to survey their employees. It’s currently in development and he works on it for as many hours as he wants, and enjoys it. He says he could return to work in a more formal role if necessary, but he says he has made himself “unemployable” because he is so used to his freedom. This story first appeared in The Sun and was republished with permission.
