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Hi, I am verygoodthings.
Old 02-06-2011, 10:45 AM   #1
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Hi, I am verygoodthings.

I came to this forum to continue my education on money management and associate with people with similar goals and outlook.

I am 29 years old.


-401k balance 65k
-Wife has no 401k
-I currently earn $35,000 part time
-Wife currently earns $40,000 full time
-Non tax advantaged portfolio of $5,150,000


I just exited from my career, so my earnings have only recently fallen to where they are.

My 2009 spending was around $235,000
My 2010 spending was around $200,000 (2nd half 2010 was $80,000, as I began implementing some better spending habits)

I would like to get my 2011 and 2012 spending much lower (~100k ideally).
2011 may be a difficult year to pull this off as I am aiming to downsize into a different home and there will be extra cost going into that, while I cover both mortgages, plus moving expenses and such. By 2012 I am trying to set myself into a situation where I can live on around 100k (after tax dollars).

My investing style is largely passive indexing. My target allocations are 75% equity, 25% bond.

My goals in life are living a healthy lifestyle, having a lifestyle not built around material possessions, finding and learning new things every year, and contributing to charitable causes (Both financially and physically).
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Old 02-06-2011, 10:50 AM   #2
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Welcome aboard. You're way ahead of the game, congrats. Not sure what your goals are, but you might enjoy this site Early Retirement Extreme: — written by Jacob Lund Fisker, Freelancer. A very interesting and legitimate approach IMO.
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Old 02-06-2011, 12:14 PM   #3
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but you might enjoy this site Early Retirement Extreme: — written by Jacob Lund Fisker, Freelancer. A very interesting and legitimate approach IMO.
Quote:
Non tax advantaged portfolio of $5,150,000
Yes, with this tiny protfolio he will need to live in a mobile in a trailer park. How else might he survive?

Ha
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Old 02-06-2011, 12:20 PM   #4
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welcome! the world can certainly use another service minded individual with $$$. I look forward to reading about your philanthropic efforts.

best of luck!
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Old 02-06-2011, 01:04 PM   #5
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Rather than describing how (and why) you are downsizing, I think members of this forum would be far more interested in hearing how you amassed a $5 million taxable portfolio by age 29. I know I would.
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Old 02-06-2011, 01:13 PM   #6
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So you have er'd ("exited from my career")? Congratulations. Three percent of your nest egg should more than cover your projected 2012 expenses. Can you get rid of the old house before committing to the downsized house so you'll only have the one mortgage?
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Old 02-06-2011, 01:16 PM   #7
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Rather than describing how (and why) you are downsizing, I think members of this forum would be far more interested in hearing how you amassed a $5 million taxable portfolio by age 29. I know I would.
+1

I think I finally quit choking over the $200k annual spending.... that's ten years of spending for us. The Millionaire Next Door might be a worthwhile book to read.
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Old 02-06-2011, 01:41 PM   #8
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Welcome to the forum. If you get your spending down to $100K/year by 2012, that means your $5.1 million stash will last for 51 years with 0% return. Using fiecalc with an expected age of 100, I am 100% confident you only need to work 19 more years. Wish they were all this easy.

PS. Re: "having a lifestyle not built around material possessions". Where did the 200K go the last 2 years?
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Old 02-06-2011, 07:23 PM   #9
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Answering some of the above questions, the money is from the sale of a business I have been involved in for many years. On a personal level, I need to move on.

As for the 200k+ spending, it is just bad financial habits. I will try to categorize everything and put it into a spreadsheet to contribute to the 2010 tally thread that is ongoing (a very interesting read for me!). One big area of expense in 2009 and 2010 was that I got my pilot's license, which I think may have cost around 30-40k total in lessons. I also purchased an airplane (150k), which I put about a 70k downpayment. Between those upfront expenses, and the ongoing expenses of the ownership (5k annual hangar, 4.5k annual insurance, and fuel and travel related expenses), it has been a big piece of that budget. I have decided to sell that plane, it is currently listed for sale. I have no regrets, I am happy I got my license and some flying experience, but I'd prefer to wait until later in life to splurge on something like this.

As far as the suggestion to read the Millionaire Next Door, I have read Millionaire Mind and Stop Acting Rich and Start Living Like it, I enjoyed both books (same author for those unaware). It is a wake up call, and much of what is talked about does apply to me.
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Old 02-06-2011, 07:25 PM   #10
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Welcome to the forum. If you get your spending down to $100K/year by 2012, that means your $5.1 million stash will last for 51 years with 0% return. Using fiecalc with an expected age of 100, I am 100% confident you only need to work 19 more years. Wish they were all this easy.

PS. Re: "having a lifestyle not built around material possessions". Where did the 200K go the last 2 years?

Hmm, silly way of looking at it though (51 years of income assuming 0% return). I wonder what 100k will be worth in 51 years.
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Old 02-06-2011, 07:30 PM   #11
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So you have er'd ("exited from my career")? Congratulations. Three percent of your nest egg should more than cover your projected 2012 expenses. Can you get rid of the old house before committing to the downsized house so you'll only have the one mortgage?


I am not looking at this as retirement, as I would still like to earn. I have exited from the career that gave me high earning potential, so it is a soft retirement.

My attitude towards a future career is that I would like to find something rewarding and meaningful, even if it means taking a financial sacrifice to achieve that.

I'm not planning to do a home sale contingency. I don't want to have to time everything out perfectly, it is a difficult process. It will be easier to market my current home once I have moved on. Furthermore, it involves a coast to coast move. (East to West)
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Old 02-06-2011, 07:52 PM   #12
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I'm not planning to do a home sale contingency. I don't want to have to time everything out perfectly, it is a difficult process. It will be easier to market my current home once I have moved on. Furthermore, it involves a coast to coast move. (East to West)
Given your solid financial situation I can see exactly why you would be doing that. When we had a similar situation moving from England to Scotland we moved into a rented house for 6 months while we sold first, and then and built a new house.

I got an e-mail from my brother in Australia last week who I know is planning to build a new house and had purchased the land. Rather than have 2 mortgages his e-mail was to tell me that they had closed on the sale of his house and they have moved in with 2 of their kids (daughters who share a house that their parents helped them buy) .
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Old 02-07-2011, 07:18 AM   #13
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Hmm, silly way of looking at it though (51 years of income assuming 0% return). I wonder what 100k will be worth in 51 years.
30 year treasury is 4.73%. 5.1 million will generate 241K /year. A little less in tax free muni. My point was doing nothing will last 51 years. Congratulations. You are set for life.
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