The 4-step strategy that helped a millennial pay off $10,000 in debt, build an emergency fund, and move to Indonesia for a year on savings
- Wicitra Mahotama, age 27, experimented with early retirement for a year in Indonesia.
- But he wouldn't take the leap without first achieving three goals: paying off $10,000 in debt, saving $10,000 in an emergency fund, and saving $7,000 for his early retirement.
- He did this in just over two years by following savings strategies from financial experts and investing in Bitcoin.
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Wicitra Mahotama wanted to play with FIRE.
That would be the financial independence, retire early movement. After listening to early retirement podcasts, he was skeptical that retiring early was as great as early retirees made it out to be, the 27-year-old told Business Insider. The best way find out, he said, was to try it for a year.
In April 2018, he left his environmental analyst job in Iowa to "test the waters of financial freedom, early retirement, and geoarbitrage" he said (the latter involves relocating to take advantage of a lower cost of living). Mahotama's destination: Indonesia.
Mahotama said that during this yearlong early retirement (which some may call a mini-retirement), he wanted to spend time with his parents, who lived there; fulfill his dream of touring Indonesia by motorcycle; and volunteer for a mango dehydration company to learn what sustainable economic development looked like.
But he wouldn't do it until he completed three financial goals:
- Paying off all his debt
- Establishing a 6-month emergency fund in a high-yield savings account
- Saving enough money for a year of expenses in Indonesia, around $500 a month
He was able to achieve these with a lot of hard work and a bit of luck. He combined three different savings strategies from financial experts, diligently tucking money away.
Mahotama then took a fourth step that goes against typical financial wisdom: investing his $4,000 emergency fund in Bitcoin, which he sold six months later at a profit.
In just over two years, Mahotama had paid off $10,000 in debt, saved $10,000 in an emergency fund, and saved $7,000 for a yearlong early retirement in Indonesia. Here's how he did it.