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Hi I am almost 41 years old...
Old 02-15-2019, 09:19 AM   #1
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Hi I am almost 41 years old...

And I am planning on retiring in exactly 13 months, after my final ESPP sale and yearly bonus from my job.

My initial plan was to retire 1 year ago, but fear, greed, and some other stuff made me rethink my plans and delay things.

Honestly I'm not sure if I am even going to follow through with retirement next year. My biggest issue is, FOMO - Fear of Missing out.

I have about 1.6 mil saved up in real estate and savings. I DO NOT invest in the stock market. Long term or short term, I've been burned too many times, and refuse to put money into a risky investment instrument so the only investing I do is real estate which I rent out, mortgage free.

Speaking of mortgage, I have 0 debt. I have a wife and one school aged child.

My fear is, missing out on future promotions, bonuses, salary, growth etc. However, I also hate my job, the industry I work in, and just missing out of being with my family, being in nature, and traveling.

After I retire I will have income from two rental properties of about 3000 a month, plus interest, and probably a couple more rentals soon, so it could go somewhere around 5000 a month, which I will be handing over to a property management if I move abroad to save money on living expenses.

Anyway just here to say hello, and I welcome any comments from people who were or are in the same situation I am in.. I just need someone to nudge me forward to make the move. Thanks!
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Old 02-15-2019, 10:19 AM   #2
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Welcome!

What's your split between real estate and savings?
Is the $3k/month gross or net (including money set aside for maintenance and capex)?

I was thinking initially that you were set, but seeing $3k income from only two properties made me pause. What happens when you have a vacancy for two months?

Provide more information and I'm sure the people on the board can provide more useful input.
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Old 02-15-2019, 10:29 AM   #3
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Welcome!

What's your split between real estate and savings?
Is the $3k/month gross or net (including money set aside for maintenance and capex)?

I was thinking initially that you were set, but seeing $3k income from only two properties made me pause. What happens when you have a vacancy for two months?

Provide more information and I'm sure the people on the board can provide more useful input.
3k is gross, but no mortgage so really just taxes/insurance/hoa/maintenance
So even at lets say 2k net, plus another two rentals i plan on buying with proceeds of sale of my primary home, I'll then be at about 4k. Yes vacancy is an issue, but I still have savings to help if needed.
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Old 02-15-2019, 11:20 AM   #4
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We live our lives in chains, and we never even know we have the key

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Originally Posted by tearsforfears View Post
And I am planning on retiring in exactly 13 months, after my final ESPP sale and yearly bonus from my job.

My initial plan was to retire 1 year ago, but fear, greed, and some other stuff made me rethink my plans and delay things.

Honestly I'm not sure if I am even going to follow through with retirement next year. My biggest issue is, FOMO - Fear of Missing out.

I have about 1.6 mil saved up in real estate and savings. I DO NOT invest in the stock market. Long term or short term, I've been burned too many times, and refuse to put money into a risky investment instrument so the only investing I do is real estate which I rent out, mortgage free.

Speaking of mortgage, I have 0 debt. I have a wife and one school aged child.

My fear is, missing out on future promotions, bonuses, salary, growth etc. However, I also hate my job, the industry I work in, and just missing out of being with my family, being in nature, and traveling.

After I retire I will have income from two rental properties of about 3000 a month, plus interest, and probably a couple more rentals soon, so it could go somewhere around 5000 a month, which I will be handing over to a property management if I move abroad to save money on living expenses.

Anyway just here to say hello, and I welcome any comments from people who were or are in the same situation I am in.. I just need someone to nudge me forward to make the move. Thanks!
I bid a warm welcome to a fellow OMYer, for that is what we both are.

Your introductory post could be summarized in two words: Golden Handcuffs. "I hate my job but I love the money" is the guiding principle of the reluctant retiree. Maybe we should get T-shirts printed up and sell them to all other OMYers here; the profits might put us over the top so we'd retire now instead of waiting!

Seriously, if I knew what the key was to unlock those golden handcuffs, I'd happily share it with you. You say you just need a nudge out the door. I wonder if the best person to provide that nudge might be your dear wife? My own DW has been bringing up the subject of my RE, so it won't be much longer (she possesses a mighty superpower that ultimately will overcome any resistance I could muster).

I'll close by posing a question of my own. You indicate you have done well on the resource side of the equation, but it's essential to know whether you've covered your expenses. Have you put your numbers into FIRECalc to see if your plan is reasonable?

Once again, welcome! I look forward to reading your future posts.
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Old 02-15-2019, 11:25 AM   #5
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I bid a warm welcome to a fellow OMYer, for that is what we both are.

Your introductory post could be summarized in two words: Golden Handcuffs. "I hate my job but I love the money" is the guiding principle of the reluctant retiree. Maybe we should get T-shirts printed up and sell them to all other OMYers here; the profits might put us over the top so we'd retire now instead of waiting!

Seriously, if I knew what the key was to unlock those golden handcuffs, I'd happily share it with you. You say you just need a nudge out the door. I wonder if the best person to provide that nudge might be your dear wife? My own DW has been bringing up the subject of my RE, so it won't be much longer (she possesses a mighty superpower that ultimately will overcome any resistance I could muster).

I'll close by posing a question of my own. You indicate you have done well on the resource side of the equation, but it's essential to know whether you've covered your expenses. Have you put your numbers into FIRECalc to see if your plan is reasonable?

Once again, welcome! I look forward to reading your future posts.
Golden Handcuffs! Yes! Perfect name for it. Do you have the key?

My wife yes, she has been urging me. She actually doesn't work, and she wants us to go retire in her home country in southeast asia.

As far as expenses go, we live cheap, and are truly happy that way. We do love to travel however.. but still we do it on the cheap always.

We basically live off of about 25k a year if that.. if we move to SE asia, it will be cut in half easily!
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Old 02-15-2019, 03:27 PM   #6
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Originally Posted by tearsforfears View Post
I DO NOT invest in the stock market. Long term or short term, I've been burned too many times, and refuse to put money into a risky investment instrument so the only investing I do is real estate which I rent out, mortgage free.
Welcome! I know a 70-year old who thinks like you...he was burned in the stock market, and so all of his non-cash investments are in real estate. To me, real estate is a risky investment for many reasons. The property may lose its renter; the property may be damaged; the property value may go down; the property may burn to the ground; the tax rate may go up....the list goes on and on.

That said, you need to do what makes you comfortable. But, without investing in the markets, how are you protecting yourself from inflation risk? In 20 years, when $1.6M has the spending power of $0.8M today, will your real estate/rents and cash investments have appreciated enough to keep you even with, or ahead of inflation?

It's hard to know what your real ROI is for the real estate, withought knowing captial invested, taxes paid on property, HOAs, income tax on rents, etc. So, it's hard to evaluate whether you are making enough to cover your investments, and keep up with inflation.

Best wishes!
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Old 02-15-2019, 05:57 PM   #7
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Welcome! I know a 70-year old who thinks like you...he was burned in the stock market, and so all of his non-cash investments are in real estate. To me, real estate is a risky investment for many reasons. The property may lose its renter; the property may be damaged; the property value may go down; the property may burn to the ground; the tax rate may go up....the list goes on and on.

That said, you need to do what makes you comfortable. But, without investing in the markets, how are you protecting yourself from inflation risk? In 20 years, when $1.6M has the spending power of $0.8M today, will your real estate/rents and cash investments have appreciated enough to keep you even with, or ahead of inflation?

It's hard to know what your real ROI is for the real estate, withought knowing captial invested, taxes paid on property, HOAs, income tax on rents, etc. So, it's hard to evaluate whether you are making enough to cover your investments, and keep up with inflation.

Best wishes!
The way I look at it, real estate should move with inflation. As far as risks of lower rents.. Can't recall the last time rent ever went lower.. But yes anything is possible.. Which then leads to why I dont do stocks. Over time stocks have always gone up.. But so has real estate. Stocks are risky too. Reason i like real estate is well.. Its real. U can touch and see it vs stocks is all imaginary. I prefer something i cam see and touch and can generate cash flow. As I have said I own rentals with no loans so that also helps me worry less about risk.
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Old 02-16-2019, 09:59 AM   #8
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How much of the 1.6 million is in your personal house and savings and how much is in your two rental properties?
1.6 million generating 3k per month gross seems low to me.
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Old 02-16-2019, 10:24 AM   #9
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Estimated 1.6mill generating 48k gross (30k net?) seems a bit low. If thatís what a house was netting me Iíd look more into the bogleheads approach. Property management company will cut into that more.

My main concern with a house for long term is houses seem to have a max life of 60 years and that requires a few major upgrades. (Thatís with owners living in houses - maybe a bit more gentle than renters). If your rentals are 10-20 years old now how long do you hold vs how do you transition to the next property?

Your comments on stocks seem to have an emotional component that doesnít match actual performance. Iíd take some time digesting why you let emotions control your investments (work on an investment plan) for housing or stocks so you donít make impulse decisions that can hurt you since you donít have a large cushion.

Also if you end up wanting to move back to US after 20 years, how are you going to afford health insurance, etc.
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Old 02-16-2019, 10:24 AM   #10
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How much of the 1.6 million is in your personal house and savings and how much is in your two rental properties?
1.6 million generating 3k per month gross seems low to me.
750k personal house --- will be sold to buy at least two more rentala which would gross 3k a month no mtg.

400k cash

So in the end i would have about 1 mil in cash and 600k in rentala generating 6k gross rent . no mortgage.
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Old 02-16-2019, 10:54 AM   #11
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The way I look at it, real estate should move with inflation. As far as risks of lower rents.. Can't recall the last time rent ever went lower.. But yes anything is possible.. Which then leads to why I dont do stocks. Over time stocks have always gone up.. But so has real estate. Stocks are risky too.
You're old enough to remember 2007-09, the RE bust. Many homes lost half their value, taking the past decade to recover in many markets. RE was not in sync with inflation there for a while. It's also very different market by market.

It really has always taken its own path. In the 80's, inflation was pretty high, but housing prices mainly stayed flat.

Of course, rents and RE sale prices don't go directly hand in hand, but when there is any economic downturn, you have a higher rate of defaults, late pays, evictions, and vacancies to deal with.
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Old 02-16-2019, 04:02 PM   #12
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750k personal house --- will be sold to buy at least two more rentala which would gross 3k a month no mtg.



400k cash



So in the end i would have about 1 mil in cash and 600k in rentala generating 6k gross rent . no mortgage.


Wait so youíre going to sit on 1mm cash? Do you at least mean bonds/tips or something? How do you plan on that money keeping up with inflation?

Speaking of inflation, my understanding in foreign countries with current low COL is that inflation there is > established economies. You might see 3% inflation on your 24k/yr living costs in the US but might be 6% on that 12k in SE Asia. Make sure you evaluate and account for this risk.
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Old 02-16-2019, 05:00 PM   #13
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I didn't retire until 63. I really liked my job. But after I retired, I found I liked retirement a lot more.


It seems to me that health care will be one of your major expenses. We had retiree healthcare. We paid almost $1100 per month in premiums, but then our deductible was just $300 each and our out-of-pocket max was $2500 each.
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Old 02-16-2019, 05:33 PM   #14
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Wait so youíre going to sit on 1mm cash? Do you at least mean bonds/tips or something? How do you plan on that money keeping up with inflation?

Speaking of inflation, my understanding in foreign countries with current low COL is that inflation there is > established economies. You might see 3% inflation on your 24k/yr living costs in the US but might be 6% on that 12k in SE Asia. Make sure you evaluate and account for this risk.
No i am not going to sit on 1 mil. I will be looking for rentals to buy .
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Old 02-16-2019, 05:42 PM   #15
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Markets in FLA got crushed in 2007/2008. Most folks who bought in my complex in 2005/06 still haven't reached their original values 13 years later.
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Old 02-16-2019, 06:36 PM   #16
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And I am planning on retiring in exactly 13 months, after my final ESPP sale and yearly bonus from my job.

My initial plan was to retire 1 year ago, but fear, greed, and some other stuff made me rethink my plans and delay things.

Honestly I'm not sure if I am even going to follow through with retirement next year. My biggest issue is, FOMO - Fear of Missing out.

I have about 1.6 mil saved up in real estate and savings. I DO NOT invest in the stock market. Long term or short term, I've been burned too many times, and refuse to put money into a risky investment instrument so the only investing I do is real estate which I rent out, mortgage free.

Speaking of mortgage, I have 0 debt. I have a wife and one school aged child.

My fear is, missing out on future promotions, bonuses, salary, growth etc. However, I also hate my job, the industry I work in, and just missing out of being with my family, being in nature, and traveling.

After I retire I will have income from two rental properties of about 3000 a month, plus interest, and probably a couple more rentals soon, so it could go somewhere around 5000 a month, which I will be handing over to a property management if I move abroad to save money on living expenses.

Anyway just here to say hello, and I welcome any comments from people who were or are in the same situation I am in.. I just need someone to nudge me forward to make the move. Thanks!
Hey Tears. I'm in a similar situation as you. I turn 40 next month, and I'm about to leave the work force as I live in Asia. My current company is changed a lot over the last two years, and I have a new boss in which we don't get along very well.

I net 5500 USD each month on rental homes I own outright in South Florida. The total value is around 1.55 mil USD, but over the last 5 years or so, I've built up my equities to around 600K. Personally, I wouldn't feel comfortable retiring so early only on rentals or only on stocks/funds/bonds. I feel a balance between the two is best. Our plan is to move back to the U.S. in a year or two and live off the rental income, and never touch the stocks to let them grow over the years. As to what the above posters said, your rental properties will not appreciate in value as much as stocks would long term, and this is important. You need to keep growing your wealth, not just live off of it for today. Inflation will creep up quickly over the years, when your old and can't find work even if you wanted to.

I'm not saying don't buy more properties, but what I would do is work for another two or three years, and save as much as possible to build up your equities in the market. Invest in simple mutual funds like VDAIX and never touch it.

Lastly, as an expat who's lived in Asia for a very long time, do you really want to live in Asia for the rest of your life? Do you want to raise your daughter in SE Asia? Really? How about schools? Local schools in any SE Asian country are not very good, plus there is a language issue. U.S. schools for the most part are much better, and the quality of life for a young child, as well as sports, art classes, and so on are something to think about. International schools are VERY expensive in places like Thailand, Philippines, China and so on.

Personally, I wouldn't want to live in SE Asia for many years just because its cheap. A year or two for the experience, ok, but not for the rest of my life, esp if I wasn't making any money while doing so.

Congrats on your success. I know work sucks sometimes, but I would think more long term, esp in regards to your daughter and what's best for her.
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Old 02-18-2019, 11:16 AM   #17
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Different strokes for different folks. We honeymooned in SEAsia in 2017. Enjoyed the visit but there is no way I would permanently live here.

Do you speak the local language? Do you really want your child growing up there?

Being an absentee landlord doesn't sound great either.

400k and real estate you won't be around to manage doesn't sound like a doable plan for the next 50 years, and that's if you only make it to 91.

I wish you luck......
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Old 02-18-2019, 03:09 PM   #18
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400k and real estate you won't be around to manage doesn't sound like a doable plan for the next 50 years, and that's if you only make it to 91.
I agree...as one gets older (as demonstrated in these forums), most here divest themselves of real estate, as paying management companies 10% and dealing with tentant headaches may be difficult/impossible as you age, especially if there's significant mental and/or physical decline. I'd respectfully suggest you consider the time when you're 75 or 80...how will you deal with your rentals then?

I had friends who owned multiple rentals in California, moved to Maui, and bought more there. After about a decade, they started to sell them off, because they were too much work, too much hassle....

Best of luck!
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