Product Reviews

Cashing In On The American Dream
- How to Retire at Age 35 -

by Paul Terhorst

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Rating: ☻☻☻KK

In its time, this would have been a five-smiley book.  But now it is dated, and the author has no plans to update it.  Much of the advice on retirement investments and average daily expenditures are not now sustainable.


Nevertheless, for certain people with high incomes early in their working career, socking it all away to retire early is still a distinct possibility, as Paul and his wife Vicky have aptly demonstrated in real life.

After converting all their assets to cash, and investing it in income-producing financial instruments, The Terhorsts live strictly off the interest of their investment portfolio, and do not draw down the investment principal. In fact they grow the investment principal by the amount of inflation. That makes their retirement formula ultra conservative, and results in less income to enjoy their retirement life than they could have. But on the upside, it also greatly simplifies the retirement income strategy. And for such a very long retirement period, as much as 60 years or more, it is better to be conservative. But at the end of their lives, that means if they never draw down the principal, they will have all their investment principal unused, and wasted. They also have no children to leave it to.

Paul Terhorst does not have a formula for a draw down of his wealth based on probable life span, net yield on investments, and estimated average future rate of inflation. His rules of planning are simple, and of necessity extra conservative. There is an inflation adjusted formula, based on the geometric gradient finite series. But you won't find it here.

Despite these shortcomings, this book is an interesting read, though their rules of thumb of $50 a day average expenditures is far out of date. Nowadays, that figure is more like $100 a day.  The Terhorst's also live overseas for the most part, which if done properly can result in a much lower overall cost of living -- for just a little lower standard of living.

The Terhorst's have not updated this book, and don't plan to. But they do maintain a website where you can follow their experiences. The best way to find it is just do Google search.

I myself retired early, at age 53, and lived overseas on much less than the Terhorst's. So I can vouch for the do-ability of it. But I don't envy their flit-about lifestyle, and find myself much happier with a pretty, young Asian wife half my age, with our little kids running around my feet. Which also means we don't travel around that much. All in all, all things considered, I find that the best place to live is the US. But there are many foreign locations that come in a close second, and for some people, would be first choice.

If you have kids, and plan to send them to college, you can pretty much forget about retiring early. But if you are childless, and plan to remain so, then I think this might be a book full of valuable tips for you.

First posted 5 May 2012 at

2012  Simon Revere Mouer III, PhD, PE, all rights reserved