‘We cut our expenses by 50%’

In 2011, at 41-years-old, I retired early from my six-figure profession in regulation. My spouse joined me in retirement 4 years later after quitting her job as a nurse.By the time she retired in 2015, our portfolio of high-yielding shares and mutual funds paid roughly $130,000 a yr in dividends, which lined most of our dwelling expenses in Washington, D.C.That yr, we took a household trip to Lisbon, Portugal with our daughter, who’s now 16 years previous. We instantly fell in love with the town.That’s when it hit us: Why not depart the U.S. and spend our retirement life in Lisbon?Without losing any time, our household of three packed up our belongings and booked one-way tickets to Portugal. The plan was to lease out our home within the U.S., cut our dwelling expenses whereas dwelling in Lisbon, then reinvest these financial savings into extra dividend-paying shares to compound our passive earnings. The Miradouro de São Pedro de Alcântara is an ideal spot to admire Lisbon at nightfall. Alex Trias and his household purchased an house within the metropolis for slightly over €500,000 in 2015.Photo: Alex TriasWe’ve been dwelling right here for about six years now, and we’re nowhere close to prepared to depart. Here’s how a lot we spend per thirty days — and why we love dwelling in Portugal:1. Living expenses are a lot decrease than within the U.S.Portugal is taken into account one of many least expensive nations to reside in Western Europe.On common, in comparison with life again within the U.S., we have cut our expenses by 50%. We’re lucky to personal our two-bedroom, one-bathroom, 1,300-square-foot house, which we bought in 2015 for slightly over €500,000 with no mortgage.Our favourite Portuguese cut price: Multiple baggage of contemporary fruit and veggies. A heat loaf of bread from Gleba Bakery — made with its very personal homegrown heirloom wheat — prices solely $4, and is price each penny.Portugal is legendary for its scrumptious seafood, and you will discover a number of the freshest on the Mercado de Campo de Ourique. If you do not really feel like cooking, a number of of the restaurant cubicles on the Mercado choose their seafood provides from the fish counter.Photo: Alex TriasOne of our largest month-to-month expenses is eating out at eating places. A typical lunch on the Mercado de Campo de Ourique, a gourmand meals market, can run about $16 per individual. A glass of wine prices an additional $4.Here’s a breakdown of our month-to-month expenses:Health insurance coverage (for the whole household): $258Groceries: $407Basic family necessities: $250Transportation (fuel, automobile insurance coverage, public transportation): $250Housing (property taxes, insurance coverage, upkeep): $430Water and electrical energy: $175Phone and web: $80Eating out (10 to 12 meals per thirty days): $600Total: $2,4502. A really beneficiant tax systemEuropean taxes are usually very excessive, however in contrast to nations like France and Italy, Portugal does not impose wealth, inheritance or property taxes (though there’s a 10% “stamp responsibility” on Portuguese belongings which can be inherited or gifted outdoors of the direct household).As an expat, you’re thought-about a Portuguese taxpayer should you reside greater than 183 days in a single calendar yr in Portugal or, topic to sure situations, if in case you have a everlasting residence accessible on your private use in Portugal.And due to the non-habitual resident tax regime, foreigners can profit from a tax exemption (or a diminished tax price) on most international supply earnings for 10 years.As U.S. residents, we’re all the time responsible for U.S. earnings taxes, however we save on state and native earnings taxes. Plus, our property tax invoice in Portugal is a fraction of what we paid in the united states3. Low-cost, high-quality healthcareIn addition to Portugal’s nationwide well being companies protection, which provides sponsored or free well being companies to all authorized residents of Portugal, my household’s personal medical health insurance by way of Multicare is complete and reasonably priced.Our premium is $258 per thirty days, however our plan has a $0 deductible and $16 co-pays for physician visits at a non-public hospital. I as soon as had an in a single day emergency room go to that concerned a number of checks and consultations; the whole value was lined by our insurance coverage, and I paid nothing apart from my co-pay.Prescription drug costs additionally are usually dramatically decrease in Portugal than within the U.S. One generic prescription that might sometimes value me $600 a month again house is just $21 in Portugal — for the model title treatment. 4. Low crime chargesPortugal is the fourth most secure nation on this planet, in response to the 2021 Global Peace Index, which considers terrorism, violent crime and political instability, amongst different components, in its methodology.And the Portugal News reported that 2020 had the bottom crime charges in Portugal because the nation began reporting its crime knowledge in 1989.Beyond the statistics, my household and I really feel very secure in each a part of Lisbon at nearly all hours. Locals even declare tables on the Mercado by leaving their purses unattended on a chair whereas they go meals purchasing.You can store for contemporary produce or choose up lunch on the Mercado de Campo de Ourique. The market is noticeably secure, with prospects leaving their purses at their tables as they go meals purchasing.Photo: Alex TriasOnce we first moved right here, my spouse observed there is no such thing as a “cat calling,” and she or he has by no means felt harassed strolling down the road. The Portuguese are inclined to prize good manners. “Bem educado” means “well mannered” in Portuguese, which comes as very excessive reward.That stated, pickpocketing is a real menace in congested vacationer areas, so we’re all the time on guard once we trip the tram.5. Consistently nice weatherTemperatures in Lisbon vary from a median excessive of 82 levels Fahrenheit in July to a median low of 47 levels Fahrenheit in January, which compares favorably to the sweltering warmth and piles of snow typical in Washington, D.C.Guincho Beach, situated about 25 minutes by automobile outdoors of Lisbon, varieties a part of the Sintra National Park.Photo: Alex TriasIn Lisbon, we hardly ever use an air conditioner in the summertime. The thick stone of our house partitions assist reasonable temperature indoors. And we by no means hassle with hats or gloves within the winter.6. Getting off the hamster wheelLiving overseas has fully modified our outlook and priorities in life. We considerably streamlined our belongings once we moved to Portugal. We now focus way more on how we spend our time.I attempt to construct downtime into my day and spend a number of time in nature. Some of my happiest moments are when I’m strolling alongside the seashore at Guincho Beach or mountain climbing by way of eucalyptus forests within the hills of Sintra and Colares.I additionally take each alternative to journey with my household. Backpacking by way of Europe is our daughter’s favourite factor about dwelling in Portugal. She treasures each second, whether or not she’s attending a math competitors in Geneva or taking a household drive to Seville for the weekend.Alex Trias is a retired legal professional. He and his spouse and daughter have been dwelling in Portugal since 2015. He is the creator of the “Investment Pancake” collection on SeekingAlpha.com and has revealed almost 500 articles about tax planning, investing, early retirement, and the place to seek out the perfect meals in Lisbon.Don’t miss:


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