Hi.... I have no clue!

[er dr]

The only thing I'd worry about on your detailed plan is waiting till a certain year to start selling your real estate, and then needing to sell on a regular basis for income. Real Estate is so variable that I'd be keeping an eye on the markets and selling places when it's a good market, and not when you need the money.

Very good point and you're absolutely right! My thought was keeping a year or two cash reserves in a short term CD or something similar just for those occasions when the timing isn't right for selling a home or maybe if we go through another dip in the market and I may not want to touch the money in my IRA for a couple of years to allow it to possibly build back up. That is the problem with relying on investments when retiring early. Don't want to keep it in too safe of a investment vehicle because will miss out on some good growth but obviously can be nerve wracking in too aggressive of an investment. I have a lot of research and thought to put in before I take the plunge. Thanks for you input!

 

[SandsofTime]

May I suggest a little bit different approach: here is goes.... you should sell your assets when the market is strong for said assets, not on some time of a time-table (even a flexible time-table). Therefore, all the assets should be sold when the market is good. Now, as for all the real estate that you own but which has minimal positive cash-flow, it appears that such a situation could become a source of significant headaches in the future. Perhaps you ought to consider selling all of your real estate, as well as your business, and put all the equity into a truly PASSIVE system such as a very diversified portfolio, that includes precious metals, emerginig markets, broad US market funds, did I say Gold, silver, some foreign currencies, AND a paid off house. I am a great believer in having as many of your necesseties of life FULLY paid off. It may not be economically the smartest thing, but it is often emotionally (psychologically) a very strong thing.
So, those are my 2cents. Good Day.

 

[er dr]

May I suggest a little bit different approach: here is goes.... you should sell your assets when the market is strong for said assets, not on some time of a time-table (even a flexible time-table). Therefore, all the assets should be sold when the market is good.

Unfortunately I really do not have any other assets (besides business and real estate ... see below) to sell.

Now, as for all the real estate that you own but which has minimal positive cash-flow, it appears that such a situation could become a source of significant headaches in the future. Perhaps you ought to consider selling all of your real estate, as well as your business, and put all the equity into a truly PASSIVE system such as a very diversified portfolio, that includes precious metals, emerginig markets, broad US market funds, did I say Gold, silver, some foreign currencies, AND a paid off house. I am a great believer in having as many of your necesseties of life FULLY paid off. It may not be economically the smartest thing, but it is often emotionally (psychologically) a very strong thing.
So, those are my 2cents. Good Day.

I've thought about selling all my real estate in 2 years when I sell my business but the two issues I have with that is it may not be a good time for selling real estate and so I would be taking quite a hit on all my properties plus I would be paying all the capital gains all at once and secondly... managing that real estate is really all I have left to do so I kinda want to keep it around for the time being until I get sick of managing it! I definitely don't want to be dealing with it when I'm in my 60's! It is an interesting thought though and who knows... in 2 years the real estate market might be hot and I may do as you suggest and get out while the getting is good!!!!

 

[Nords]

Unfortunately I really do not have any other assets (besides business and real estate ... see below) to sell.

I've thought about selling all my real estate in 2 years when I sell my business but the two issues I have with that is it may not be a good time for selling real estate and so I would be taking quite a hit on all my properties plus I would be paying all the capital gains all at once and secondly... managing that real estate is really all I have left to do so I kinda want to keep it around for the time being until I get sick of managing it! I definitely don't want to be dealing with it when I'm in my 60's! It is an interesting thought though and who knows... in 2 years the real estate market might be hot and I may do as you suggest and get out while the getting is good!!!!

What I'm hearing from SOT is:
"You need to develop an exit strategy so that you're ready to implement it when the time is right."

Now that you're checking your portfolio against FIRECalc's historical performance, you need to develop an asset allocation that comforts you with the optimal combination of performance and low volatility. You don't want to be constantly thinking that the grass is greener for just a little more risk.

When you've developed an AA that survives FIRECalc's history, you could also buy a membership in FinancialEngines.com and run it by their Monte Carlo calculator. Although Monte Carlo has a number of issues of its own, the FE advantage is that you have a wider selection of assets to run through their algorithm.

 

[er dr]

When you've developed an AA that survives FIRECalc's history, you could also buy a membership in FinancialEngines.com and run it by their Monte Carlo calculator. Although Monte Carlo has a number of issues of its own, the FE advantage is that you have a wider selection of assets to run through their algorithm.

Will check it out!