Kristy Shen retired in her early 30s. Now, she and her husband, Bryce Leung, travel the world. We spoke to the co-author of “Quit Like a Millionaire,” about being a follower of the ‘financial independence, retire early’ (FIRE) movement. She shared advice on everything from investing to figuring out health insurance to saving $$$ money while living abroad. Her answers have been edited and condensed for clarity.
Why are index funds so popular with FIRE adherents? Should people interested in FIRE avoid investments like crypto or real estate?
Especially when people are investing in the very beginning, they're mostly looking for a quick win. To them, it’s about getting the biggest return in the shortest amount of time. But that’s very short-sighted. What happened with crypto? Bitcoin went from over $60,000 all the way down to below $20,000.
You can make money with real estate investing. People confuse real estate investing with buying their primary residence, but the difference is that a primary residence doesn’t generate passive income. People wait for their home to appreciate, and then they sell. The problem with that is knowing when to get out of the market — it’s the same with Bitcoin.
Successful long-term investing is not about predicting when to sell and when to buy. It's about getting in, holding it, and then getting passive income. That’s one of the reasons why we do index investing.
Could you tell us about geographic arbitrage? Why do people who follow FIRE use it?
I believe this term came from Tim Ferriss’s "4-Hour Workweek." Here’s an example: If you work in New York and have a remote job, you can earn a high salary in USD. Then, you take that salary to a place where the currency isn’t as strong — and your money will go a lot further.
After the pandemic, the idea of digital nomadism and remote work became a lot more mainstream. It makes sense to take advantage of geographic arbitrage to get to early retirement faster.
How do you deal with health expenses when you participate in FIRE?
We initially bought health insurance from a company called IMG. Recently, we switched to SafetyWing. They provide insurance for digital nomads. I think we spent no more than $150 for two people, and the coverage was for up to $1,000,000.
In terms of health care needs for an emergency, you’ll want ex-pat insurance if you're living a nomadic life. My husband had a really bad rash when he was in Germany, and then we went to Malta to see a doctor. They basically just waived the fee, because we said we're not European citizens — they were like, “Ah, forget about it.”
The cost of health care outside of the US is not nearly as scary as some people think it is. You just need to mitigate emergency expenses with ex-pat insurance, which is not that expensive.
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