38 in SoCal, not sure how to make ER a possibility

[Senator]

Keep saving; possibly buy a high cash flow rental property.

Keep you money in the market. 85% of money managers cannot beat the market, why do you think you can? Most stock pickers cannot beat a monkey. Maybe you can buy a monkey?

Divorce is a killer. You are better off finding a woman you hate, and buy her a house.

50% or marriages end in divorce, the other in death. No good options...

My uncle used to say "My ex-wife made me a millionaire; I used to have two million, now I only have one".

[38Chevy454]

You are doing great on changing your savings and having a plan to make your goal. So many people at your age do not have any plan, and a very vague goal if any.

I also had a bit of rental property in my past, around the same age you are ironically. While it was beneficial from tax and money standpoint, it is just a part-time job and you need to look at it as this. I was glad the day I got out of it. I would rather just invest in market and be happy without the hassles of property mgmt.

Not sure I have anything else to add besides keep up the good work!

[dvalley]

Thanks guys, your responses always have some nugget of useful info to me even when you think your responses aren't adding to the subject.

38Chevy454, your name and avatar look familiar, I used to be on several car related msg boards. Small world!

[dvalley]

Quote:

Originally Posted by dvalley A little self-motivational post so feel free to ignore it Today, about 6mos into restarting my aggressive savings plan I'm really pleased (and thankful) to see that I actually added a total of $65k to my savings+investment accounts. My current savings+investments balance now stands at $305k - up from the $240k when I started this thread. Not counting mortgage/equity etc. Random thoughts/wishes/regrets: 1. Only if I had done this for the past 5 years 2. Only if I didn't lose what I did 3. I hope the stock market continues to be as nice to me as it has the past 6mos...for the next 10 years 4. There's still some room to increase my contributions because I did buy a few non-essential things but cutting out everything non-essential will also make it taste like a bitter pill on a day to day basis. 5. If I can manage to keep adding $60k to my portfolio every year for the next 10 years and somehow pay off the house I can be FI if not completely RE. 6. Still feels like long ways to go and anything can happen. However, I hear after the first 500k the next 500k seems easier...I really hope that is true

So a 1yr update since my post above- just crossed the $400k mark in cash and investments

10% cash
90% investments (80/20 stocks/bonds)

My biggest issue right now is the current job, it's taking a toll on my mood/health due to the stress. I'm thinking about starting some sort of a business and ideally not a high-tech IT related business (my current day job) so I don't know how things will change financially

[meekie]

I'm moving from a high stress IT job to running my own company, and while I'm having a great time, and my business is looking to be very successful, I wouldn't really recommend it to most people. I've had a couple of other hobby businesses, so I know how hard it is to have a good product, the right market, and the right timing.
One reason I don't have to worry too much is that DH is continuing to work, and with 1.5m in the bank, we're more than half way to our retirement number. If we can make a small profit for about 5 years in this business, and let our investment grow, we'll be in good shape.

If you do want to run your own company someday, start looking into things you can do in your spare time to start building a small business. But don't quit your day job. Even with all the prep I've done, the stress is way higher than working my horrible job.


Sent from my iPhone using Early Retirement Forum

[dvalley]

Meekie, congrats on your savings/investments and also on striking out on your own!

I wholeheartedly agree with your advice. As much as I've always wanted to start my own business for years I never did it because of the nice and consistent paychecks I got from jobs. My IT field has been infrastructure -though I have a degree in CS and have done development and programming, the last 15 years have been infrastructure i.e. servers, windows/linux/unix, storage, networks, cloud solutions/migrations etc. Out of those 12years I've been in middle upper management for about 8). So if started something on my own it would be consulting in those areas. A few other ideas I have are, take an open source product, remove the complexity and turn it into a turn-key product. Yet another idea is to start an IT placement business since i've done enough hiring and firing and come from a hands-on technical background I can tell pretty easily if someone's a good fit for a given technical position. Or get out of IT/tech altogether and run a store/shop/franchise, Togos/Subway etc.

[daylatedollarshort]

Quote:

Originally Posted by dvalley My IT field has been infrastructure -though I have a degree in CS and have done development and programming, the last 15 years have been infrastructure i.e. servers, windows/linux/unix, storage, networks, cloud solutions/migrations etc. Out of those 12years I've been in middle upper management for about 8). So if started something on my own it would be consulting in those areas.

I went back to school as an adult after being in IT management to go back to being more of a techie. I have done mainly 1099 work since and found it a lot less stressful and better suited to my personality type. Some of the top techies in my group made as much and one more than me, so I didn't think for me the extra responsibility of being in management, loss of technical skills and lack of mobility were worth the extra money. I think I have made much more per hour, especially after tax, on the 1099 work. I never really had a dream of climbing the corporate ladder so management really wasn't a good fit for me - just something I got pushed into along the way.

[LitGal]

Quote:

Originally Posted by daylatedollarshort I went back to school as an adult after being in IT management to go back to being more of a techie. I have done mainly 1099 work since and found it a lot less stressful and better suited to my personality type. Some of the top techies in my group made as much and one more than me, so I didn't think for me the extra responsibility of being in management, loss of technical skills and lack of mobility were worth the extra money. I think I have made much more per hour, especially after tax, on the 1099 work. I never really had a dream of climbing the corporate ladder so management really wasn't a good fit for me - just something I got pushed into along the way.

DH and I also found ways, throughout our careers, to move into job changes that reduced stress while maintaining the good paychecks. It didn't require going back to school or changing fields: we simply changed work sites.........but also made a cross-country move to a lower-cost and lower-stress area.

We weren't in IT, so this may not be pertinent advice. But, the original purpose of this post was to congratulate you on your ER-planning success at such a young age. Along with that, though, I'm a little concerned about you taking a chunk of your hard-won nest egg and investing it in your own paycheck-earning enterprise. (FWIW, a dear cousin, down-sized from bank management, used part of his nest egg to buy a pizza franchise in which he invested years of heart, soul, blood, sweat and tears. Despite his business acumen, the local economy won.........and now he is out of a major part of his nest egg after having to give up the franchise.)

But he is just one example, of course.

I'm just hoping you can use your current skill set in a setting that still guarantees a paycheck (for your ER plans and DD's education) while also reducing your stress. It would also be very nice if you could find a setting that you really like and where you feel appreciated. (Those places do exist; can vouch for it from DH's and my own job changes over the years.)

This is just the "mother hen" in me speaking. You have accomplished so much and have so much to be proud of. Please don't require yourself to jump any huge obstacles, just in an effort make your own job. There are probably many employers out there who would appreciate what you have to offer.

IMHO, of course!

[daylatedollarshort]

One thing I did was to just take different classes and see what I could succeed at - mostly just personal services type stuff so there wasn't a big capital investment like opening a store or hiring employees. I tried accounting and taxes but neither one was really my calling and ended back in IT related work but not as a manager.

[dvalley]

@LitGal, @daylatedollarshort - thanks so much for the advice and sharing your personal experiences.

@LitGal, believe me I don't feel the 'young age' part, I'm hitting 40 in a month or so! I'm so far behind when I see others on here but I'll keep plugging away at it and see where I end up.

I've always wanted to have a business, employees etc failing that I wanted to be in a VP/CxO position, now I'm pretty close to those, in 2-5 years those positions could happen but I'm running out of steam. You're right though, the work env makes a difference. However, the good positions at these level are hard to come by, most people already in them stay through retirement not to mention for every 30-50 positions there's one VP/CxO position.

Anyway, I joke and say yep I'll go work at home depot and when people ask me what I did previously I'd have to say "I was Sr. Dir of IT for a multi-billion dollar company...nah I'm just messing with you"

As for going back to being a techie, yes that's a good possibility too if I can figure out what to specialize in. There are too many people in this field now especially the lower end of the spectrum (fixing pcs, malware/virus removal, pc troubleshooting etc). I'm thinking for me it'd have to be something like cloud, security or a niche product.

[daylatedollarshort]

Quote:

Originally Posted by dvalley As for going back to being a techie, yes that's a good possibility too if I can figure out what to specialize in. There are too many people in this field now especially the lower end of the spectrum (fixing pcs, malware/virus removal, pc troubleshooting etc). I'm thinking for me it'd have to be something like cloud, security or a niche product.

I don't know a lot about cloud computing but the Berkeley extension has certificates in cloud computing:

Professional Series in Virtual and Cloud Computing | UC Berkeley Extension

Maybe you have something comparable down South to look into.

This book is out of date but it has some timeless, basic concepts on niche products and looking for paradigm shifts for creating your own business (and it is also the right price - free ):
http://www.tinaja.com/ebooks/ismm.pdf

[LitGal]

Quote:

Originally Posted by dvalley @LitGal, @daylatedollarshort - thanks so much for the advice and sharing your personal experiences. @LitGal, believe me I don't feel the 'young age' part, I'm hitting 40 in a month or so! I'm so far behind when I see others on here but I'll keep plugging away at it and see where I end up. I've always wanted to have a business, employees etc failing that I wanted to be in a VP/CxO position, now I'm pretty close to those, in 2-5 years those positions could happen but I'm running out of steam. You're right though, the work env makes a difference. However, the good positions at these level are hard to come by, most people already in them stay through retirement not to mention for every 30-50 positions there's one VP/CxO position. Anyway, I joke and say yep I'll go work at home depot and when people ask me what I did previously I'd have to say "I was Sr. Dir of IT for a multi-billion dollar company...nah I'm just messing with you" As for going back to being a techie, yes that's a good possibility too if I can figure out what to specialize in. There are too many people in this field now especially the lower end of the spectrum (fixing pcs, malware/virus removal, pc troubleshooting etc). I'm thinking for me it'd have to be something like cloud, security or a niche product.

It certainly sounds like the world is wide open to you........and it's a world WAY beyond donning an apron for Home Depot.

If you can steel your nerves for the unknown, this could turn into quite an adventure. And you'd still have time to withstand any "bumps in the road" before you hit your sixties.

Best of luck, dvalley!

[daylatedollarshort]

Quote:

Originally Posted by LitGal It certainly sounds like the world is wide open to you........and it's a world WAY beyond donning an apron for Home Depot.

+1. Experts are made not born, except for maybe athletics. It takes 10,000 hours of deliberate practice to be a world class expert in a given domain. Most people watch 34 hours of TV a week. Substitute something you enjoy doing for the TV and there you go. World class expert at (your new lower stress, higher paying career) in 6 years.

An Expert Guide to Expertise
The Expert on Experts | Fast Company | Business + Innovation

[dvalley]

Quote:

Originally Posted by dvalley So a 1yr update since my post above- just crossed the $400k mark in cash and investments 10% cash 90% investments (80/20 stocks/bonds) My biggest issue right now is the current job, it's taking a toll on my mood/health due to the stress. I'm thinking about starting some sort of a business and ideally not a high-tech IT related business (my current day job) so I don't know how things will change financially

It's past Feb 2016 so I guess it's time for my annual update. Unfortunately, and despite the same savings rate, AA etc as the previous years my cash+investments barely crossed the $420k mark as of this past week- the stock market performance in 2015 and so far in 2016 are to blame. The previous goal was to surpass $450k in 2015 and $500k in 2016. My FIRE target is $1.2M to 1.4M by 2025 - hoping the remainder of 2016 fares better!

The home equity improved (approx $200k) but I don't count it in the numbers towards the $ goal.

[mickeyd]

I heard Jane Bryant Quinn on NPR this AM (pushing a new book) and she had an easy way to look at this retirement income question. What she recommended is taking time to accurately estimate how much income your assets will generate when you retire taking into account: SS, pensions, IRA, 401(k), 403(b), taxable accounts etc. After you come up with a number, make your monthly expenses less than that number. Seems like an easy way to estimate it.

She also mentioned that RE investments should not be considered retirement investments but another J*B.

[rodi]

Quote:

Originally Posted by mickeyd I heard Jane Bryant Quinn on NPR this AM (pushing a new book) and she had an easy way to look at this retirement income question. What she recommended is taking time to accurately estimate how much income your assets will generate when you retire taking into account: SS, pensions, IRA, 401(k), 403(b), taxable accounts etc. After you come up with a number, make your monthly expenses less than that number. Seems like an easy way to estimate it. She also mentioned that RE investments should not be considered retirement investments but another J*B.

That works if your nest egg is big enough to live off its dividends and interest but many of us are planning on consuming our nest egg if need be. As for real estate investments... If you are a hands off landlord with a property manager.... Then it's not a job.

[dvalley]

End of Q1 update.
The savings+investments now stand at $460k, thanks to a small 2015 bonus that just came in and the market uptick.

$500k is my next big milestone so hopefully that happens soon.

Visual of my progress since I started this thread:

[LitGal]

Notice that your first post was in July of '13. Then look at your numbers today. Very impressive!

[dvalley]

Thanks LitGal to be honest though when I see others' intros and progress here I feel like I'm at a party at Eden Rock where everyone's dressed to the nines but I showed up in t-shirt, shorts and a baseball cap lol

[YeahNo]

Quote:

Originally Posted by dvalley Thanks LitGal to be honest though when I see others' intros and progress here I feel like I'm at a party at Eden Rock where everyone's dressed to the nines but I showed up in t-shirt, shorts and a baseball cap lol

You become the average of the people you befriend. You are in good company for your future prospects