Post: #26

It's not how much money you have saved that answers the question, it's how much passive or near-passive income you have coming in (and the dependability of that passive/near-passive income) compared to your lifestyle's needs.

Even then, you need something that keeps you active and/or allows you to grow as a person and/or be involved with your community. Passive activities like watching TV and reading books eventually get old, especially for the kind of man that achieves financial independence at a young age.

Nothing wrong with chilling on the beach for a year or a decade, as long as your mind's active and you feel happy, but if you start getting restless, then you need to come up with something to invest that extra energy into.

It could be something like learning web development and launching new apps or learning copywriting and becoming a part of advertising campaigns, or opening a physical business so you can spend your days minding it and growing it, or teaching at a university, or launching a BPO business, or starting a charity, for example, if you're successful enough.

It just depends on your personality, but I would advise you to assume that you will be restless without a project to focus your excess energies on. Plan ahead of time what those energies will be invested in, don't wait until after you "retire" to run into this challenge, because these projects may require capital to launch, and if they do, you want to know that before you eliminate the income your job provides.

Great answers so far in this thread.

Post: #27

So I have a scenario that Id like some input on regarding retirement/semi-retirement. In about 5-6 years, my last two kids will be done college. I'm thinking I should have about 400-450K set aside if things go according to plan (yeah I know that's always a wild card, especially in my life). Now I could sell my main business( which I'm including in those figures above) and just work 3-4 days a week making just over 100K with my side gig or I could keep jamming away like I am now and go until I'm 60-65 and have a ton more money set aside. The side gig is easy and I could easily keep doing it for many years, live below my means so I can continue to save some but still enjoy myself but doing both my main biz and the side gig together are really starting to take a physical and mental toll on me.

Question is what should I do. What would you guys do? Keep working away or sell the main business when I'll be 55 and work less with more free time but half the income. Any thoughts greatly appreciated.

Post: #28

Before selling the business, consider grooming a replacement to manage for a W2 salary while you chill on passive distributions.

Even if it is subpar, you should eventually profit more than the 2 - 5x multiple you’d likely receive on a sale, over several years. Low interest rates make the present value of this strategy a little higher.

Post: #29

I'm mid-40s and free time is worth more to me than money. Life is short.

If "main biz and the side gig together are really starting to take a physical and mental toll" you should get the fuck out.

No point in being the richest guy in the cemetery.

Post: #30

(01-19-2018 11:25 AM)edlefou Wrote:  I'm mid-40s and free time is worth more to me than money. Life is short.

If "main biz and the side gig together are really starting to take a physical and mental toll" you should get the fuck out.

No point in being the richest guy in the cemetery.

Yeah that's in line with what I'm thinking. Got to get my last kids through college first but more and more, I think I'm done with the main biz after that.

Post: #31

If you’re willing to go developing world on a budget you can retire pretty early. 20s 30s even.

You’ll have tell your kids they’re on their own for college. But maybe that’s the best way to combat having them grow up spoiled westerners.

Post: #32

(01-20-2018 01:41 AM)Travel Museums Wrote:  If you’re willing to go developing world on a budget you can retire pretty early. 20s 30s even.

You’ll have tell your kids they’re on their own for college. But maybe that’s the best way to combat having them grow up spoiled westerners.

No its fine, I don't want my kids stuck with stupid ass student loan debt so I'll help them like my parents helped me. If things go according to plan which is always a crapshoot but if they do, 5-6 years and I should be able to sell and get out. Definitely agree that a place like Thailand or even a place like Portugal would be a cool, inexpensive place to go after, even if for just part of the year.

Post: #33

For the last few months I’ve been kicking around the idea of retiring early and I genuinely don’t know what to do. Here are the potential scenarios.

Retire now. I can tighten my belt a little and move to SE Asia (really wouldn’t have to tighten much at all). In a few years when I’m 60 I’ll start collecting a gov’t pension in addition to eventual social security, if that’s still a thing.
Wait til age 60. About 4 more years.
Move to Bogota or Santo Domingo and make the weekly commute to Houston or Orlando. This would enable me to work a few more years and save a bunch more money while simultaneously improving my social life. The drawback is the weekly slog back and forth would wear me out probably.

I’m an airline pilot so my job is usually enjoyable with a lot of flexibility and good pay and benefits. The drawbacks are that at times it can be stressful and flight attendants aren’t all that and after completing a few flights over a period of 3 or 4 days I feel physically drained and unhealthy, probably from the effects of stale air and gamma rays and whatever germs are swirling in the mix. And I’m effectively tied to the US barring the painful aforementioned commute.

Most of my friends think I’d be crazy to quit early. I’m torn. It’s the proverbial golden handcuffs. I can take them off any time but I wouldn’t be able to go back if I changed my mind. Thanks for listening.

Post: #34

The choice of early retirement, or at least not working for a living, comes down ultimately to lifestyle choice.

for example - if you don't have really any interests, social life, or pursuits outside of your every day life revolving around work, then you might find yourself pretty lost if you cash out. Unless of course if you're like Peter Gibbons and are content with doing nothing.

I for one would not retire with just enough money to "get by." I would only retire if I had a fat stack of cash to fuck off with and had more coming in. I don't want to retire early so I can live on a shoe string and be super frugal - I want to retire early so I can party-the-fuck-on without the burden of a daily 9-5 getting int he way. Without having to worry about my PTO balance if I want to take a trip.

Your choice to get out of the rat race young (or, relatively young) is entirely up to you and your lifestyle.

@Duke - what would you do if you didn't work all the time? Would you have enough money to live the life you want to without more income flowing in from normal work? Also, I'd like to add if you are almost 60 and you are talking about retiring after 60, I wouldn't exactly call that "early" retirement. I mean technically it is by like 5 years, but it's not like you are ducking out before you are middle aged or anything.

Post: #35

I agree with the 1 mil USD mark - one mil in a well diversified portfolio should yield enough to live a non-luxurious but comfortable life in most places barring certain expensive cities.

I fully expect the euro to dissolve within the next decade, at which point the amount of countries you can live on a shoestring budget will dramatically increase (e.g. PIGS countries getting even cheaper).

To bad, I'm a long way off that amount.

Post: #36

So many people get stuck on the idea of wanting "income", or "passive income" from their investments. This is literally instant gratification mentality and nothing more, yet there is mass amounts of information on the internet about this "style" of investing...

In ALL investment cases, the only thing you should be worried about is the TOTAL RETURN on your investment, and maximizing the total return.

IF you have some need for "income" directly from your investment, then the correct mindset is "how do I extract sufficient CASH FLOW from my optimally arranged total return investment."

Dividend addiction is strong these days in the internet investing world. I get it all the time and have to make sure it doesn't creep into my assessment of an investment selection - "Holy fuck Enbridge is yielding 6.5% !?!" But thinking about dividends/income is wrong wrong wrong.

The other dangerous downside to this income mindset is taking the dividends during market downturns. "It's ok, the dividend is safe and keeps paying my bills no matter what Mr market is doing" has got to be one of the most detrimental things a retiree can say, for portfolio longevity.

Post: #37

(Especially when companies lever up via debt to give dividends)

Post: #38

What are you suggesting would be better then? I'm a firm believer in emerging markets myself.

(07-16-2018 11:41 AM)christpuncher Wrote:  So many people get stuck on the idea of wanting "income", or "passive income" from their investments. This is literally instant gratification mentality and nothing more, yet there is mass amounts of information on the internet about this "style" of investing...

In ALL investment cases, the only thing you should be worried about is the TOTAL RETURN on your investment, and maximizing the total return.

IF you have some need for "income" directly from your investment, then the correct mindset is "how do I extract sufficient CASH FLOW from my optimally arranged total return investment."

Dividend addiction is strong these days in the internet investing world. I get it all the time and have to make sure it doesn't creep into my assessment of an investment selection - "Holy fuck Enbridge is yielding 6.5% !?!" But thinking about dividends/income is wrong wrong wrong.

The other dangerous downside to this income mindset is taking the dividends during market downturns. "It's ok, the dividend is safe and keeps paying my bills no matter what Mr market is doing" has got to be one of the most detrimental things a retiree can say, for portfolio longevity.

Post: #39

More or less this. One of the richest people I know never seems to eat out. He's currently retired but I have never seen him order prepared meals and he always makes his own coffee. Someone of his stature could easily order from Starbucks everyday but I've never seen him with a Starbucks cup. Maybe he ate out when he had to wine and dine important people but that's probably on occasions. I unfortunately had a falling out with the guy but the nest egg advice probably applies to him. He's anti-Trump and is way too concerned about events that are out of his control.

Also with retired people you have to realize they collected on government funded benefits that most people here will probably not receive (President Trump might reverse that but I don't know if he will). The social security fund is gone and it was only a genius move for our government and politicians to keep importing people to collect on a finite resource. God forbid I live to see the day we go full blown socialism in this country.

401ks: I used to work for Whole Foods and while I do have about $100 in their 401k (never figured out how to stop the contribution) I didn't rely on the matching promise to help me retire. When you're making a little over minimum wage and a company is using the lure of a 401k maybe an even smarter thing would be to find a higher paying job. Some of my dumber, extremely broke relatives claim I'm missing out on "free money" but when you add everything up (theoretically for the sake of argument) it's coming out to less than $20/hour. Lose-lose opportunity cost. Find that job that pays $50/hour! The icing on the cake is the present value of your money is worth more compared to its future value.

Even if you retire you don't just lay down on your bed or on a hammock in some deserted island. You stagnate, which is why many take up new hobbies. You always will be working to some degree. I personally don't want to retire.

(01-06-2018 04:27 PM)Duke Main Wrote:  There are some interesting FIRE (Financial Independence Retire Early) blogs out there, Mr Money Mustache being one of the best (a bit preachy, but he's a good writer). The tl;dr is be very frugal, then when the interest on your nest egg (around 4% is considered a fairly safe withdrawal rate historically) is equal to your expenses, you can retire. This might be desirable if you have some soul-sucking cubicle job, or a high risk short life span job.

I like my job, so I don't feel the need to be very frugal. However, if some of my mining stocks do what cryptos have done lately I might bail.

Post: #40

Great post Seadog. Thanks.