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Hello, nice to meet you guys
Old 09-20-2005, 03:48 PM   #1
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Hello, nice to meet you guys

New to the ER idea, and considering options.* Reading through posts, I suspect I know what Iím going to hear, but please be patient with me.* I promise this is not a joke.* My situation has happened pretty quickly and I havenít had too much time to consider options.* Thanks in advance.

Iím the COO (and minority partner) of a company I helped found and run for 12 years.* Weíve recently sold the business and Iím ready to leave behind the day to day stress of growing and running a very successful business.

Iím 47, my wife is 45, and we have 2 children, 16 and 11.* Everyone is in excellent health.* Wife is a stay at home mom with a fun part time job.* College is definitely in both kids future.

After taxes, we will have 3,600,000 in cash;* 250,000 in a IRA and 200,000 in the company* 401(k) plan.

I also have the opportunity to be a consultant/special projects guy for 2 to 3 days per week for the new owners of the company, although itís not clear for how long.* Iíd have health insurance and would make around 45,000 per year.

I have outside interests.* Iím very active in youth soccer, both on a local and state level.* Iím very family oriented and try and attend each and every athletic event for both kids, especially the older one who is a sophomore in high school.* Only 2 years left before this one goes off to college.* A busier schedule with the younger child, who is into 4 different sports, but mostly on the weekends.* Iíve also seriously considered running for the local school board.

Any advice would be gratefully accepted and appreciated.* I guess Iím nervous because Iíve worked hard since I was 17, and now that it has paid off, Iím not sure how I will handle not having to get up for work each morning.* Both my wife and I agree that I have to do something or Iíll get bored and cranky around the house.

Thanks so much in advance.

Wheel
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Re: Hello, nice to meet you guys
Old 09-20-2005, 04:02 PM   #2
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Re: Hello, nice to meet you guys

Welcome Wheel. (I used to know some wheels when I was still working.... ).

Two recommendations:

- Retire
- Find something to do so you won't get bored and cranky around the house.

That sounds filippant, but you must realize you are financially better off than the vast majority of the posters on this board. Plus you have health insuance, solving one of the biggest hurdles facing most in their quest to ER.

And as far as that bored thing, I had some similar concerns (and so did my DW), but 4 months into retirement and nothing approaching boredom has shown up in the REW household.

Come on in...the water is fine.

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Re: Hello, nice to meet you guys
Old 09-20-2005, 04:06 PM   #3
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Re: Hello, nice to meet you guys

Quote:
Originally Posted by Wheel
New to the ER idea, and considering options.* Reading through posts, I suspect I know what Iím going to hear, but please be patient with me.* I promise this is not a joke.* My situation has happened pretty quickly and I havenít had too much time to consider options.* Thanks in advance.
Welcome to the board, Wheel! *I can see where your story would evoke a "Well, duh" reaction from some of the other members. *Not that there's anything wrong with being in that position!

You don't mention expenses. *Most of us ERs are doing fine on expenses of $24-45K/year (some less, a few more) so, unless your expenses run into six figures, your numbers make ER a financial slam-dunk. *If your current expenses do run into six figures they'll probably drop drastically in ER anyway. *No worries.

So the finances look fine. *But if you haven't already, you & spouse need to start reading about the ER life. *It looks like the buyout has given you a great opportunity to downshift but you should avoid jumping into new activities for yourself. *Paul Terhorst advocates changing nothing for at least two years and others say to take it easy for at least a year. *By "changing nothing" they mean no new projects, no new volunteer work, no rebuilding the house or relandscaping the yard, and probably no world cruise. *Keeping up with the kids' activities will be more than enough challenge while you rest, read, & reflect. *(Besides you're probably going to start making a lot of college tours soon anyway.) *Bob Clyatt's new Nolo book "Work Less, Live More" probably has your picture on the cover and will be out early next month.

I guess this windfall will give you plenty of quality time with the tax professionals. *And you might want to consider rolling over that 401(k).

Keep reading the board, especially the threads that discuss "But waddya DO all day?" *It's not the problem that it seems...
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Re: Hello, nice to meet you guys
Old 09-24-2005, 12:17 PM   #4
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Re: Hello, nice to meet you guys

Welcome, Wheel!

Your post here is the one that actually got me to come out of "lurking" mode.*
My husband and I were recently given an offer on property we have owned for years, and hadn't thought to sell for a long time.* It appears that the Real Estate boom may make it very feasible for us to sell out and retire early on the profits.* While we did not accept the offer, it got us thinking about our options, and led me to this forum.* (You can read my introduction post at
http://early-retirement.org/forums/i...p?topic=4310.0 if you want)* I can relate to your situation as it came upon you suddenly (as it did us) and all of a sudden you realize you don't have to stay in this rat race!* It's rather amazing yet daunting!


If you don't mind, I would like to comment on your situation:

First, from your post, it sounds as though you do not yet have the cash in hand from the sale of your company.* I think that may be good, since almost everyone on this board seems to recommend that you do nothing with a large windfall (just park it in a safe place) in the beginning until you first get yourself well-educated about investing and safe withdrawal rates (SWR) from your nestegg.* Your post was a little vague as to whether or not you are well versed on this subject.* I just think it bears repeating here - so many people have jumped into* investments and later realized they went the wrong way (myself included!) and it's a lot harder to remedy after the fact.*

There are many books and websites you can read through to better educate yourself.* Search here and ask questions here under "Fire & Money" - people are very friendly and helpful.

As to wheteher or not you should do the consulting gig or not - you really need to do some soul searching.* Financially, you really should be set (as Nords already said), once you figure out your asset allocation and how to pull out your investment income.* If you figure a low (conservative) rate of 2.5-3% withdrawal rate from your 3.6m (not including your money in the IRA or 401K), you come up with an annual income of 90-108k.* That's before taxes.* Have you sat down and come up with a realistic annual budget of what you spend now?* Deduct out any items that would no longer pertain after you leave the work field.* Add anything like health insurance, travel!, hobbies (golf, fishing ....) and other items that will be new expenses after RE.*

Health insurance issue - I have questions myself on this, so I am not in a place to advise.* My thoughts are that maybe you can do what we have done:* Family of four* - all healthy, each of us has an individual policy (Blue Cross/Blue Shield) so that our kids can carry on their policies once they leave the nest.* Other than the fact that premiums may will go up, what more can an independent person do.* I suppose you could find a group to join through ... Anyway, I personally wouldn't let that issue keep me in the work field!* Other members - please chime in here! You may also want to look into long term care insurance - that is relatively cheap at your ages - and will help protect our nestegg.

Talk with your wife!* What is her opinion (besides the fact you can't sit around and drive her nuts!)?* I agree with Nords advice not to commit yourself to anything for awhile.* You will need time to adjust and you also may find that you have interests in things you haven't even thought about!

Keep reading here and on other sites - it's great to be able to pick up so much insite and knowledge (for FREE no less!).*

Just my (free) two cents worth!*

Wishing you well,

Jane
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Re: Hello, nice to meet you guys
Old 09-24-2005, 12:57 PM   #5
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Re: Hello, nice to meet you guys

With a 4 million portfolio, there is really not much to worry about. You can easily get by on a high deductible health insurance policy. Looks like you have plenty of outside interest to keep you busy so I say retire and enjoy it! Travel and see the world.* Good luck!
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Re: Hello, nice to meet you guys
Old 09-24-2005, 01:01 PM   #6
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Re: Hello, nice to meet you guys

All I can offer is congratuations, Wheel!

If you're concerned about what to do with your time, start hanging around this forum. Either you'll decide on a new hobby or make posting a full time job!

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Re: Hello, nice to meet you guys
Old 09-24-2005, 06:56 PM   #7
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Re: Hello, nice to meet you guys

You could always photograph animals with pancakes on their heads.

Judy

and Congratulations!
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Re: Hello, nice to meet you guys
Old 09-25-2005, 07:29 PM   #8
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Re: Hello, nice to meet you guys

Way to go wheel, you're turning in the right direction. Welcome to the forum. With your kind of loot, you've got it made. As to what to do, read the forum. There's plenty of ideas here.
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Re: Hello, nice to meet you guys
Old 09-29-2005, 01:31 PM   #9
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Re: Hello, nice to meet you guys

Thanks to everyone that posted a response. I really appreciate the feedback. Been kind of a hectic few months, but at least things are getting back to ďnormalĒ. For now Iím using up a ton of accrued vacation and working 3 to 4 days a week. Iíve also decided to try the consultant gig as of the first of the year. I guess that means Iíve semi-ERíed. We will see how long it lastsóI suspect the siren song of full ER will be calling my name sometime in mid to late 2006, if not sooner.

Just having a couple days off each week has been a fantastic feeling. Took some advice from this board and just enjoyed the mornings, walked with my wife and took the kids to school. I havenít done that in years. Kids thought Iíd lost my mind.

Answers to questions posted:
Nord: Currently expenses run about $60M per year. By the end of the year we will have a pretty good working budget going forward. Iíve also ordered the Clyatt book you mentioned. Thanks for the tip.

Jane: The cash is parked safely away. Iíve worked a close friend in the banking industry who has been extremely helpful in giving me ideas and strategies. Iím confident I have a good plan to go forward with. Also, our lifestyle is by no means extravagant. I plan on this windfall being something substantial that I can pass on to my kids.

To everyone else that posted: I truly appreciate the advice, and hope that I can contribute something meaningful to this community in the months and years to come.

Again, thanks to everyone that responded. If anyone else has anything to add, I'd love to hear it.

--Wheel
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Re: Hello, nice to meet you guys
Old 09-29-2005, 07:41 PM   #10
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Re: Hello, nice to meet you guys

Quote:
Originally Posted by Wheel
Answers to questions posted:
Nord: Currently expenses run about $60M per year. By the end of the year we will have a pretty good working budget going forward. Iíve also ordered the Clyatt book you mentioned. Thanks for the tip.
$60M per year Holy *&^% !!
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Re: Hello, nice to meet you guys
Old 09-29-2005, 08:00 PM   #11
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Re: Hello, nice to meet you guys

Quote:
Originally Posted by just_hatched
$60M per year* Holy *&^% !!
Some posters use the Roman "M" to indicate thousands instead of the letter "K". I don't think that "M" is intended to mean millions!

Enjoy that free wheelin'!
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Re: Hello, nice to meet you guys
Old 09-30-2005, 09:33 AM   #12
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Re: Hello, nice to meet you guys

Yup, in the manufacturing business, M is the common abbreviation for thousand. Sorry for any confusion

Wheel
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Re: Hello, nice to meet you guys
Old 09-30-2005, 09:49 AM   #13
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Re: Hello, nice to meet you guys

Great! That should make your savings last longer. It's amazing how quickly you can
trim $59,940,000 off your annual budget if you put your mind to it!
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Re: Hello, nice to meet you guys
Old 09-30-2005, 12:45 PM   #14
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Re: Hello, nice to meet you guys

Wheel, don't let the windfall change you.* *Follow the example of Michael Carroll, $15 million lotto winner:

NY Times
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