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Old 01-27-2008, 06:48 PM   #21
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I took a look at your blog, which is excellent. You are so well informed about personal finance that I wonder whether you are in fact a financial professonal.
Thanks! I'm flattered. Truth be told, I never liked math until it had something to do with my money! No, I've never been a finance professional. The only finances I've ever managed have been my own. I have an inquisitive mind and am a motivated self-learner, so everything I've learned has been through bazillions of books, web pages, and plenty of life experience.
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Old 01-27-2008, 06:59 PM   #22
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Hmmm... so how did you make your money? You make it sound so 'easy'... but in reality MAKING a million is not... why do you think there are so few people who get there...
We earned money from our small in-home businesses: I taught dog-training classes and managed my husband's plumbing biz. Our income was reasonable but never sensational ($60,000 to $128,000 a year during our 30's).

We made a little money buying and remodeling a couple fixer-uppers while we lived in them (net profit about $30k total). Then we built a home, sold it, downsized, rented and invested our equity. We still rent to this day.

Renting and investing in mutual funds instead of owing a home has made the biggest impact in growing our wealth. Plus the power of compounding growth on our investments.

I say it was easy because we never worked more than 40 hours a week doing it. We didn't do anything extraordinary to "strike it rich". We were frugal, avoided debt, invested wisely and consistently.
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Old 01-27-2008, 07:00 PM   #23
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Try listing 'investor' as your profession. It's a more or less accurate description for any ER'd folks.
Great idea. I'll try it!
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Old 01-27-2008, 07:20 PM   #24
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Welcome. I agree with you about to need to demystify finances and that most people don't learn much about finances in this society. The need is there, just look how popular Dave Ramsey is. My friends and I were talking about finances at parkday the other day. They are all amazed that we retired (DH, I'm a SAHM) at 40, so now the budgeting and investing questions are starting to roll in. I'm so frugal I make them all feel guilty. I don't want them to, but I'm glad that my example make them think. In fact, I pointed them to this group, plus told them my fav books on the subject. However, family certainly never asks for help or advice. They just think we're crazy.

I hope that your DH will eventually join you in retirement. With little ones there is no boredom factor. Crazy maybe Tonight I said, "Just wait, one day they'll be off to college". It's been one of those days where the questions and comments never stopped. My DH has been home only for 1 month, but the kids (7 & 4) love his being home all the time.

In reality it's not typical retirement when your kids are still young. It's just having 2 stay at home parents which is WONDERFUL. I really think our society has it backwards with its' strong push on long work weeks that sacrifice the little family time there is, and then a typical retirement after the kids are grown. Before we realized that we would make it till 60 (pension) without working again, we were going to do what we called "reverse retirement" and take off 10 years to be with the kids while they were young.

I'd love to see your blog. You could PM me if you can't post it.
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Old 01-27-2008, 07:33 PM   #25
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.... However, family certainly never asks for help or advice. They just think we're crazy.

(and)

...I really think our society has it backwards with its' strong push on long work weeks that sacrifice the little family time there is, and then a typical retirement after the kids are grown...
My parents and siblings are the same way! In fact, I was recently invited to appear on a national daytime talk show about money and my family NEVER EVEN BOTHERED TO WATCH ME on the show! :confused: Either they aren't at all interested, they're too envious of our financial freedom to talk about it, or they think I'm nuts...

I completely agree with what you're saying about society pushing long work hours on parents. This is precisely my initial motivation for achieving FIRE. I didn't want work or money to interfere with my family relationships and enjoyment. At 30, my goal was FIRE at 40, adopt our child and raise her together.
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Old 01-27-2008, 08:09 PM   #26
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Nice blog.

I think it will be fun to hear from an active mutual fund trader, since we don't have any of those. Pretty much any other type from the very conservative to the pure index folks, to the pure individual stock pickers, and a zillion folks in between.
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Old 01-27-2008, 08:16 PM   #27
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Welcome, I saw your blog...if anyone is looking to check it out....it is in her profile so dont need a hyperlink anyway...Curious about your budget and how much income you are living off retiring so early...
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Old 01-27-2008, 08:52 PM   #28
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Welcome, I saw your blog...if anyone is looking to check it out....it is in her profile so dont need a hyperlink anyway...Curious about your budget and how much income you are living off retiring so early...
I use Microsoft Money's Lifetime Planner tool and plug in the following annual expense allowances:

$89,000 now until 2025 (until our daughter turns 20)
$68,000 age 61 to 80 (drops after our child is on her own)
$65,000 age 80 to end

With these budgets, we do plan to spend our principal investment amount at the end of our lifespan. I use 3% ave. annual inflation and 10% average annual ROI in my calculations.

This said, we've been spending less than $89k per year. Plus my husband insists on keeping his business going so he can work 2 or 3 days a week (afraid he'll get bored), so we haven't had to tap into our investment portfolio yet for living expenses. His part-time income still covers our current budget.
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Old 01-27-2008, 09:04 PM   #29
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2-3 days a week work nets $89000 (or thereabouts...you didn't say exactly how much less than this you live on currently) for a plumber!?

Ok, now I *know* I wasted far too many years pursuing higher ed degrees....


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Old 01-27-2008, 09:07 PM   #30
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I use 3% ave. annual inflation and 10% average annual ROI in my calculations.
If you allow for 10% ROI (and many think it will be lower for a decade, but who knows), are you thus assuming that you will be 100% in equities for the rest of your life? If you are proposing 10% on a diverse stock/bond portfolio, you'd have some convincing to do.

Many allocate much less to equities as they get within 10 years of retirement or beyond, so a total ROI will, in fact, be a blended return of perhaps 7.5% or even less.

You might find FireCalc to be interesting. Link at the top of the page.
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Old 01-27-2008, 09:39 PM   #31
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Our income was reasonable but never sensational ($60,000 to $128,000 a year during our 30's).

We were frugal, avoided debt, invested wisely and consistently.
Welcome to the forums.

Your last statement---bingo!!!

That is what I also found looking back on a career where I never made more than $60000. And now I am a multimillionaire

*Consistency----invest----no debt----LBYM.*

It is a no so secret formula.
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Old 01-27-2008, 10:26 PM   #32
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If you allow for 10% ROI (and many think it will be lower for a decade, but who knows), are you thus assuming that you will be 100% in equities for the rest of your life? If you are proposing 10% on a diverse stock/bond portfolio, you'd have some convincing to do.

Many allocate much less to equities as they get within 10 years of retirement or beyond, so a total ROI will, in fact, be a blended return of perhaps 7.5% or even less.

You might find FireCalc to be interesting. Link at the top of the page.
We are invested almost 100% in equities using a no-load mutual fund upgrading strategy that has an average ROI of 18% since 1980 (vs S&P 500 w/ divs at 13%). I know, that time spans only 9 recessions and just 16 stock market crashes, but hey, at least I can feel reasonably confident that my portfolio might outperform just a little. I choose to diversify my portfolio by investing in 20 different funds - rather than by mixing it up with bonds. Not everyone's style, but it works well for me. Remember, at age 43, I have a long investment future ahead of me. Therefore, I can (and need) to think long-term growth.

Thanks for the FireCalc link. Interesting, but I didn't find it nearly as user-friendly or flexible as the one I use in MS Money. I couldn't find ways to incorporate all of the variables of my financial plan. (Closest I could come to matching my input indicated a 77% success rate, but I don't trust it because, as I said, I couldn't figure out how to put all my data in.)
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Old 01-27-2008, 11:47 PM   #33
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Welcome to the board, MMND.

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I use 3% ave. annual inflation and 10% average annual ROI in my calculations.
I understand that the Fed likes to keep inflation low, and maybe 3% is a good number for the foreseeable future, but over the last 30 years it's averaged closer to 5%. That might have an important effect on a data set starting in 1980, when Volcker had to whomp hard on interest rates to get double-digit inflation back under control.

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This said, we've been spending less than $89k per year. Plus my husband insists on keeping his business going so he can work 2 or 3 days a week (afraid he'll get bored), so we haven't had to tap into our investment portfolio yet for living expenses. His part-time income still covers our current budget.
Speaking as another ER whose spouse is still bringing in $17K/year, perhaps a more accurate description than "fully retired" would be "stay at home parent". Especially since your budget is within your spouse's part-time income.

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Originally Posted by MillionaireMommyNextDoor View Post
We are invested almost 100% in equities using a no-load mutual fund upgrading strategy that has an average ROI of 18% since 1980 (vs S&P 500 w/ divs at 13%). I know, that time spans only 9 recessions and just 16 stock market crashes, but hey, at least I can feel reasonably confident that my portfolio might outperform just a little.
16 stock market crashes in 28 years? I can recall 1987 and 2000-2002, and maybe 2008, but what else am I missing here?

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I choose to diversify my portfolio by investing in 20 different funds - rather than by mixing it up with bonds. Not everyone's style, but it works well for me. Remember, at age 43, I have a long investment future ahead of me. Therefore, I can (and need) to think long-term growth.
Thanks for the FireCalc link. Interesting, but I didn't find it nearly as user-friendly or flexible as the one I use in MS Money. I couldn't find ways to incorporate all of the variables of my financial plan. (Closest I could come to matching my input indicated a 77% success rate, but I don't trust it because, as I said, I couldn't figure out how to put all my data in.)
I don't know anything about the data or assumptions used by MS Money. For 20 different funds, it'd be interesting to see what you get out of FinancialEngines.com or ESPLanner or some other extremely detailed calculator.
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Old 01-28-2008, 07:55 AM   #34
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Thanks for the FireCalc link. Interesting, but I didn't find it nearly as user-friendly or flexible as the one I use in MS Money. I couldn't find ways to incorporate all of the variables of my financial plan. (Closest I could come to matching my input indicated a 77% success rate, but I don't trust it because, as I said, I couldn't figure out how to put all my data in.)
Careful about distrusting the results you don't like, and trusting the projections you do like. There's a lot of wisdom in FC, and it has been boldly and widely tested, critiqued, etc.

You are right, of course, if your input data are not valid all bets are off. What kinds of variables did you find difficulty entering in a FC model? Often there's a workaround that others with a similar situation have solved.
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Old 01-28-2008, 08:41 AM   #35
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Welcome ,
I think you may need to read some of the old discussions to get a handle on this group . They are a great bunch who'll challenge all your claims but they will give you information you'll never find elsewhere .Most are millionaires and multi millionaires who operate below the radar like the millionaire next door .
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Old 01-28-2008, 09:27 AM   #36
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wow, awsome. i am very happy for you. however, living on your husband income from WORKING is not really an early retirement. it's just that you're a one income family and you're a stay home mom.... right?

do you mind sharing your mutual funds holding?? don't answer the question if you don't want to.

thanks and congrats in your success.

enuff
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Old 01-28-2008, 09:40 AM   #37
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Enuff, see this thread: http://www.early-retirement.org/foru...tml#post607295
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Old 01-28-2008, 09:43 AM   #38
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In fact, for convenience I'll lock this "Hi, I am..." thread so we don't keep cross-posting. Interested members can continue posting at Question for Millionaire Mommy....

P.S. Never mind. OP wants both threads to remain open.
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Old 01-28-2008, 11:13 AM   #39
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P.S. Never mind. OP wants both threads to remain open.
Thank you Rich_in_Tampa. I appreciate your initial intent - and your willingness to reopen my thread so that I can respond to these posts.
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Old 01-28-2008, 11:22 AM   #40
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Welcome, new member.

Since many very knowledgeable people have already posted on this thread, perhaps my quibbles and observations are dead wrong. Please take them in the spirit of discussion and helpfulness.

1. When reading "new posts" I skipped over your’s many times because I took your handle as falling on a continuum which would include mimicry and possibly copyright infringement. Hopefully you don’t have a "Bernie Ward" problem.

2. I’m a little surprised that you would take a well-known cliched book title and insert "mommy" rather than "couple" or "family." Maybe because millionaire is not plural?

3. Your blog states a NW just north of 1.6 million. Therefore, perhaps as individuals, neither you nor your DH would qualify for the idea of millionaires.

4. Disclosure: I work for a law firm that specializes in family law appeals so I subconsciously scanned your posts and blog for hints of assets derived from separate property. A full trace might reveal an even lower NW for one of you.

5. 100% in anything scares me, whether its 100% in stocks, 100% in bonds or 100% out of those markets.

6. From personal experience I would say you can only get so far trading on a weak background. A pushy suggestion: You have an enviable opportunity to finish your degree now and can choose subjects that interest you rather than to concentrate on something that will help you make money; I believe a master’s degree is the floor now, I would go for it!

I also got to FI on a relatively low income, albeit helped along by a great bull market; and think its useful to get that word out; it’s a message that seems under-represented on this forum. Again, welcome.
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