Worldly Philosophers Club

The Worldly Philosophers, Vol.1, Number 18	September 24, 2007
THE Worldly Philosophers Club For Individualists Who Seek Worldly Wisdom

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PAUL & VICKI TERHORST:
FOUNDERS OF THE "EARLY RETIREMENT" MOVEMENT
By Mark Skousen

In this issue . . . -

	The astonishing story of a man who retired at 35
	How to live like a king on $25,000 a year
	The pleasures of being a PT ("permanent traveler")
	The downside to early retirement

"O wise humanity, terribly wise humanity! How inscrutable is the civilization where men toil and work and worry their hair gray to get a living and forget to play!"
--Lin Yutang, The Importance of Living (1937)

Dear Worldly Philosophers,

Let me tell you the story of the man who quit work at the age of 35. On my way down to Argentina in the late 1980s, I picked up a little paperback, Cashing In on the American Dream: How to Retire at 35, by Paul Terhorst (Bantam Books, now out of print). It was a fascinating account of a Stanford CPA and partner at the giant accounting firm of Peat Marwick. After only ten years of working, Paul got fed up with the 9-to-9 rat race. He simply quit, sold all his assets, including his home, and moved abroad with his wife, Vicki.

As luck would have it, Paul and Vicki had moved to Buenos Aires. Surprisingly, his name was in the B. A. telephone directory when I visited there, so I called him and we spent two delightful days talking about life, philosophy and retirement. Paul said the most traumatic part of his decision was the response of his family, friends and business associates. Most said, "Are you crazy?" Many told him how irresponsible he was for "dropping out" and throwing away a great career and education. His parents didn’t speak to him for several years!

Investment Philosophy: Be Your Own Money Manager

After selling all their assets, Paul and Vicki had half a million dollars, which he converted to bank CDs. From that, he earned on average around $40,000 a year in the 1980s, enough to live comfortably in Argentina, and to start traveling the world. When CDs rates fell in the early 1990s, Paul switched to investing in stocks and bonds online, carrying his PC everywhere. He manages his own portfolio and did extremely well until the crushing bear market of 2000-03, when he lost half his portfolio ("we cried a lot"). But he has since made it all back and more, and is heavily invested in natural resource stocks. Now, with the internet and online investing, it's easy to manage his portfolio from anywhere in the world.

For the next twenty years, they spent most of the time moving from place to place, discovering new friends, and seeing how other people live. Paul occasionally gives accounting and business advice to friends, and writes an occasional "early retirement" column for International Living, but has resisted working full time. He even refuses to update his out-of-print but in demand book, Cashing in the American Dream (you have to buy it from a used bookstore). When not traveling, Vicki teaches classes on meditation, and gives advice on spiritual living. Both are two of the most friendly, intelligent people you will ever meet.

They have lived in some unpredictable places: Thailand, Mexico, Austin, Las Vegas (!), and Paris, France. Wherever they live, they learn the language and meet many locals. So far they speak Spanish, French, and Thai. Living and seeing the world has taught them to have a "live and let live" non-judgmental attitude and to be political libertarians.

Why Living Abroad is Better than the USA

Once or twice a year, they return to California to see relatives, but they prefer living abroad. Paul states: "We love visiting the U.S., such a dynamic economy, we always have a great time. But the U.S. presents special problems for us, because of crazy medical care costs and an even crazier tort system. From the point of view of financial security the U.S. amounts to the most dangerous place on earth. Thus, for my peace of mind, I generally try to live outside of the U.S."

Now that they are in their late fifties, how do they cope with health issues? Vicki states, "We find health care to be reasonable everywhere we visit except the US. In Argentina we are part of a plan offered by the British Hospital for citizens of English speaking countries. This plan offers huge discounts for most medical care. A doctor's visit is less than $20.00."

Where is Home?

The Terhorsts call themselves PTs (permanent travelers). Is there a downside to their lifestyle? It’s easy for them because they don’t have children, and can pick up and move whenever they wish. They have to be careful about belongings. Shipping furniture, books, and personal items all around the world can be expensive. They simply rent a furnished apartment wherever they go, and Paul says that after he reads a book, he gives it away. No materialistic lifestyle for them!

But can a permanent traveler eventually become bored with it all? Most PTs eventually miss "home," and a couple years ago, the Terhorsts decided to buy property and build their own home outside Buenos Aires. But they still have the flexibility of traveling elsewhere as they please for months at a time.

To keep up with the Terhorsts, check out their website at www.geocities.com/thetropics/shores/5315/. It’s been several years now since I’ve seen them, but keep in touch via email. I’ve invited them several times to speak at FreedomFest, trying to lure them back to Las Vegas.

Good living, AEIOU,

Marcus Aurelius

P. S. Speaking of FreedomFest, we are now taking "early bird" reservations for FreedomFest 2008, the world’s greatest show on earth: July 10-12, 2008, at Bally’s/Paris Resort. 7-11 in Las Vegas! By registering early, you get $100 off per person, and the first 100 to sign up receive a American Eagle silver dollar. Call Tami Holland at 1-800-266-5101, or go to http://www.freedomfest.com.