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Any other VERY early retirees? (in your 30's)
Old 05-22-2012, 07:40 PM   #1
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Any other VERY early retirees? (in your 30's)

Hi All,

Glad to be new to the forums. Looks like a great place to see what others have done or are planning to do. All the posts I've read so far have been filled with those generous with advice and best wishes.

I'm curious.... Anyone retire VERY early? I'm 33 and looking to "retire" at 34. I know I've been very lucky so far and I'm exceptionally grateful for that every day, but it's hard to find people who can relate and share advice for others in that situation. Maybe this is a good place to try. Background:

Started a business at 25, looking to sell later this year, should receive between $5m and $6m *after* taxes. Current assets:

$1.2M (non-retirement accounts, split 70/30 in equities and bond/income generating funds)
$200k (retirement accounts; 401k's and IRAs)
$350k (cash on hand)

Excluding the house (for asset purposes, it's a townhouse est. at $300k), I have approximately $1.5 in assets. Counting the sale of my business, I should have around $6.5M by year's end. I already have a financial advisor for asset allocations and investments in general. It's unlikely that I'll stop working altogether, but I will switch to doing what I want to do versus what I have to do for a living. I'm sure I'll take a year off and then get bored and go back to work, but until then, I'm doing my planning that I won't go back.

Has anyone been in a similar situation, or close to it (late 30's, early 40's)? Have you been able to retire altogether? It's worrisome with such a long time ahead of me to stretch it and ride the ups and downs of the markets. I have 50+ years, on average lifespan, to grow my principal even with annual income taken out. I'm planning on $150k annually to travel, pay my bills, and do whatever, within reason.

Healthcare is a large part of retirement, but being retired military (long story, but yes, full retirement from military at 22 including pension and benefits), I have Tricare Prime for $500/year. That's my backup though... because of active-duty disability leading to my retirement, the Veteran's Administration covers all my healthcare since I'm a 95% disabled rating.

I'm curious if anyone else has been in a similar situation, perhaps through selling a business, inheriting money, stock options, etc. Do you find yourself worried it'll run out in 30 years? Are you taking enough out to live a good time without going overboard? Anything you wish you could've done differently? Any advice?
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Old 05-22-2012, 08:57 PM   #2
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Welcome to the forum and thanks for your service. Congratulations on overcoming serious adversity and doing VERY well. I was at the advanced age of 56 before I retired so no help there. The one thing I do see in your post is that you have a financial advisor. IMO anyone smart enough to build a 5 million dollar business probably does not need too much help from a financial planner. If you are using a fee only planner and the fees are not too high then it is probably not an issue. If your financial planner is taking a percentage of your portfolio then it can be alot of money for something that you can learn about on your own and perhaps do better.
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Old 05-22-2012, 09:10 PM   #3
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I would advise working on more education so you can make another $5M doing what you love doing. Congrats!!!!
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Old 05-22-2012, 09:12 PM   #4
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Thanks, jclarksnakes. It's been a long, interesting road for the last 10 years. No doubt about that! I do have a financial advisor that I recently brought on, and they are percentage based, but that was by design based on the advice of others in my field who sold and used the same guys to initially get their portfolio up and running and deal with related tax issues. I've read much between the argument on fee vs percentage planners and can't imagine sticking with them too long, but they've already paid for themselves for the next 3 years with setting up trusts and some other things to [legally] reduce my tax burden. All in all, they've been great assets to have on-hand for these next few months.
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Old 05-22-2012, 09:18 PM   #5
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Funny you mention the education part, skipro3! I was going part time to college after my military service, got ~2 years in, but as the business took off I had a choice to make on whether to drop it or not. I chose to drop it and focus on growing the business because I couldn't do both at once. Going back to college for a year or two to finish my degree is on the top of my list to do. Amusingly, going full time for two years sounds like a GREAT way to spend my time rather than running a business. I'm really looking forward to doing just that. It's always personally bothered me that I never finished my degree
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Old 05-22-2012, 10:01 PM   #6
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I'm really looking forward to doing just that. It's always personally bothered me that I never finished my degree
I'll trade you one of my diplomas for one of your millions.
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Old 05-23-2012, 12:40 AM   #7
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Funny you mention the education part, skipro3! I was going part time to college after my military service, got ~2 years in, but as the business took off I had a choice to make on whether to drop it or not. I chose to drop it and focus on growing the business because I couldn't do both at once. Going back to college for a year or two to finish my degree is on the top of my list to do. Amusingly, going full time for two years sounds like a GREAT way to spend my time rather than running a business. I'm really looking forward to doing just that. It's always personally bothered me that I never finished my degree

Oops! Somehow I deleted my post you replied to here. Along with the formal education, don't forget the 'fun' stuff. Stuff like learning to play a musical instrument, learn a second language, or get your pilot's license. I hope to get to the controls of a helicopter in my retirement. I ride in one a lot for my job; enough that the pilot let's me take over the controls occasionally. Lots of FUN!!
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Old 05-23-2012, 01:12 AM   #8
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Oops! Somehow I deleted my post you replied to here.
I restored your post.
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Old 05-23-2012, 03:12 AM   #9
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Hi 23Red,

Congratulations on your success. I retired at age 41 and I was not nearly as rich as you. I ended up traveling around different parts of the world (primarily SE Asia, Mexico, and Colombia). I have lived in 4 different countries in retirement. I am now 46.

My first suggestion would be to take some time to educate yourself about investing, particularly passive investing (which means mainly index funds) and asset allocation (diversification). You can start by reading any recent book by Larry Swedroe or William Bernstein. And take a look at the discussion board at bogleheads.org. There can be a big danger in using financial advisers. Many of them (but not all) will steer you to high cost funds or loaded funds (ones that charge you to buy and sell) or individual stocks. The total expense ratio of your portfolio should be below 0.2% annually to give you an idea. You should structure your portfolio around your ability, willingness, and need to take risk. In your case, this will probably mean a conservative portfolio because you have already "won" the game.
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Old 05-23-2012, 07:13 AM   #10
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Uh, what are you going to do all day?
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Old 05-23-2012, 07:41 AM   #11
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Quote:
Originally Posted by 23Red
I'm curious if anyone else has been in a similar situation, perhaps through selling a business, inheriting money, stock options, etc. Do you find yourself worried it'll run out in 30 years? Are you taking enough out to live a good time without going overboard? Anything you wish you could've done differently? Any advice?
Google "Philip Greenspun early retirement". And read Ernie J. Zelinski, "How to Retire Happy, Wild and Free".
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Old 05-23-2012, 07:47 AM   #12
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Hi 23Red, I retired in late 2008 at age 45 so I can surely appreciate anyone who can retire earlier than I did . I have my investments in two broad categories - current assets which generate income which covers my expenses with a surplus or cushion which can be used to pay for unforeseen expenses or, usually, reinvested, and what I call my "reinforcements," namely my IRA, my frozen company pension, and Social Security. This makes my overall projections using Fidelity's Retirement Income Planner program improve once I near age 60 when the first of these items open up. So my biggest challenge is simply getting to age 60 intact, and my spreadsheet has me in good shape to get there just fine.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 05-23-2012, 08:34 AM   #13
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Old 05-23-2012, 10:37 AM   #14
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I'm curious if anyone else has been in a similar situation, perhaps through selling a business, inheriting money, stock options, etc. Do you find yourself worried it'll run out in 30 years? Are you taking enough out to live a good time without going overboard? Anything you wish you could've done differently? Any advice?
I am not too worried about running out of money in 30 years. But my confidence level is perhaps deceptive because it finds its roots in a somewhat unique set of experiences and circumstances.

With a broadly diversified asset base and plans to live solely on the income generated by those assets, I have a hard time coming up with a scenario that leaves me penniless in 30 years. Even healthcare is only somewhat of a concern for me at this point since I can always move back to Europe for access to quality, affordable services. I also have zero worry about a possible lack of access to basic necessities. So, as far as I am concerned, the greatest risk to my retirement is that I may not be able to maintain a suitable level of discretionary spending. Given that I don't care much for overseas travel, fast cars, and fancy restaurants, I am not overly worried about that either. Finally, I come from a pretty modest milieu. I cannot conceive failing where others have succeeded on so much less.
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Old 05-23-2012, 11:03 AM   #15
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Hi...

I regards to a planner...If care to click the link below you will find OUR EXPERIENCE, posted on this site, showing the costs. Thanks to the fine people here, this is what opened our eyes to Vanguarding.

The Good, The Bad, The Ugly...(Inside the following post.)

45 - Want to Retire - Nervous - Have Questions! (Vanguard, Insurance, Home)

Welcome to the site.
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Old 05-23-2012, 11:08 AM   #16
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Spending sounds way high. Other than health care, without a big house I can't imagine how you'll spend $150k annually while being 95% disabled.
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Old 05-23-2012, 11:10 AM   #17
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33 and change in 1987, got my degree in the mid 90's never picked up my diploma. It's been a great ride so far including several trips "down the rabbit hole"! Enjoy!
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Old 05-23-2012, 02:17 PM   #18
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Spending sounds way high. Other than health care, without a big house I can't imagine how you'll spend $150k annually while being 95% disabled.
With a 6.5M portfolio he is planning to spend 150 thousand a year. That seems very reasonable to me.
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Old 05-23-2012, 03:49 PM   #19
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If you're into schadenfreude, I am looking to retire early-ish (39 or 40) with liquid assets of +/- 1.8MM and truthfully yes, I am terrified of running out of money before going under the grass.

Ours was also made through owning/selling a small business.
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Old 05-23-2012, 04:03 PM   #20
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With a 6.5M portfolio he is planning to spend 150 thousand a year. That seems very reasonable to me.
The question is not the affordability but rather the accounting. I'd expect someone whose health care is paid for by the government and is 95% disabled would not ordinarily have enough ways to spend $150k per year.
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