Grant Sabatier reacts to retired couple in Portugal with $2.2 million

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Dianne and Guillermo Rastelli retired in 2018 at ages 44 and 47, respectively, with $2.2 million. The couple 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 their continued search for a “forever home” abroad, which still leaves them plenty of time to enjoy their hobbies and find each other. for happy hour every day at 5 p.m.

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

On the one hand, he thinks the couple were wise to move overseas to reduce their cost of living, a decision known in the FIRE (financial independence, early retirement) 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% of what it is in the United States,” Sabatier told CNBC Make It. “So if they saved $2.2 million, that effectively means they have $6 or $7 million in US dollars.”

Sabatier also admires the Rastelli’s commitment to investing their savings. The couple’s net worth of $2.2 million in 2018 had risen to $2.6 million by June 2022.

“They were able to participate in the end of what was truly one of the best bull markets in history,” says Sabatier.

The market has since fallen sharply, making it difficult for retirees to live off their wallets, as any withdrawal from their accounts today means selling investments after their value has fallen. A silver lining for the Rastellis: They benefit from rental income from three properties they own in northern Virginia.

Before leaving the United States, they sold the house they lived in for around $120,000, a decision Sabatier considers suboptimal. “It’s one of the fastest growing markets in the country,” he says. It would have been financially smarter to keep it rented for as long as possible.”

Sabatier also wonders if the Rastellis weren’t too careful in their daily expenses. By moving to Lisbon, the couple reduced their living expenses to $3,700 per month, compared to a monthly budget of $7,000 in the United States.

“They have about 70 times their expected expenses depending on where they live in Portugal,” says Sabatier. “I guess they could have fired maybe three, four, five years earlier.”

Overall though, they did everything right – “maybe too good”.

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

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