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Targeting FIRE @ 28
Old 03-02-2007, 11:57 AM   #1
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Targeting FIRE @ 28

Hello everybody!

Iíve been lurking around on this forum for about a year now, and have finally decided to introduce myself. Aged 26, Iím born, raised and have so far lived in an East European country. Graduated at 22 in Finance, I have been working afterwards in the same field.

My interest in FIRE has arisen, I guess, quite unconsciously during high school and college, but then it was just something very far away, for which I didnít have any concrete plan, and thus no immediate goal. However, passionate about stock market investments, I have started saving and investing on the local stock exchange immediately after graduating and getting the first real job, at 22. I was putting money monthly into my account, although not as much as I could, or with a specific goal in mind. Then the revelation came about 2 years ago, from reading a maybe surprising book for the people here Ė David Kortenís ďWhen Corporations Rule the WorldĒ. This book has really opened my mind, and structured many of my thoughts and feelings on work and the overall world that I didnít yet consciously perceive. I have thus begun reading more materials and discussing with people on several topics, including early retirement. FIRE under the meaning of this forum (living from proceeds of your personal investments) is basically unheard of in the country that I live in. From then on, I started saving as much as I could (in 2006 for example I saved approx. 85% of my net salary), and focused even more on managing my investments. For the past 4 years since I begun investing, I have realized an yearly average return of approx. 100%, compared with around 40% for the overall market. I currently manage a portfolio of around USD 400k, of which my personal money is about USD 200k. I donít have any other assets, and have never had any debts, so this basically is my personal net worth.

This has been significantly helped by my having a far above average paying job and frugality. Although many of my friends think that I throw away most of lifeís pleasures by being that frugal, I have never felt that way. I find pleasure in enjoying the free things of life, like sports and nature, and am not at all attracted in having the latest car (or any car for that matter), watch, clothing or whateva. To give you an idea about my lifestyle, perhaps it is worth mentioning that I donít own a car - cycle to work (cheapest, healthiest, most environmental friendly, and, in my city, fastest means of transportation), do not eat out, donít go out to movies (always download them freely from the Internet and watch them home), donít have memberships in expensive health clubs (used to do Karate, which was like USD 15/month Ė 12 lessons), always chosen the cheapest vacation types (backpacking, staying in tent etc.). This was very much helped by my current wife (known each other for 5 years now), which shares the same lack of attraction to the expensive pursuits of life. I am currently living in London for a limited period of abt 6 motnhs. Just to give you an example, my spending for food in the middle of this city is at around GBP 120 per month Ė perhaps this means something for those of you who are familiar with this city.

Anyway, having never been a fan of taking or giving orders, since my revelation I have started looking more into this FIRE matter. Once I return in the country, my wife and I will be living in our fully paid apartment, for what I approximate to be USD 400 monthly expenses (this includes everything Ė food, utilities, clothing etc.). I have thus conservatively estimated that we will be very much able to live on USD 1,000/month, even if we decide at some point to have a child. Btw, all schools here are free of charge, including universities. Being of course familiar with what average return I can expect over the long run, I thus plan to FIRE at end of 2008, with what will probably be a portfolio of USD 300-400k. I plan to remain involved in managing this portfolio after ER, since it is one of my passions. In terms of what else to do after ER, I donít plan to change our lifestyle, maybe only in pursuing our current hobbies Ė for me Karate (plan to get black belt), cycling (plan to do some important tours, such as whole Europe), reading, chess etc.

Although I understand that my situation is highly different than that of most of you, especially since you live (and maybe work) in the US, I was interested in having any of your opinions on this plan.

Thank you!
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Re: Targeting FIRE @ 28
Old 03-02-2007, 12:08 PM   #2
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Re: Targeting FIRE @ 28

Quote:
Originally Posted by mishtone
This has been significantly helped by my having a far above average paying job and frugality. Although many of my friends think that I throw away most of lifeís pleasures by being that frugal, I have never felt that way. I find pleasure in enjoying the free things of life, like sports and nature, and am not at all attracted in having the latest car (or any car for that matter), watch, clothing or whateva.
Welcome mishtone! I'm a 30-year young fellow FIRE-hopeful in a few years, and also share your super-frugal mindset. I couldn't begin to count the number of times people have (or would have) told me to 'live a little' or 'loosen up', when they hear that I lived at home with my parents for a number of years to save money, or that I don't enjoy spending $200 every weekend doing things that they consider to be 'having a good time', or blow my money in some other "American" way.

What long-run return are you assuming on your portfolio once you retire? Also, I'm very curious what country you are referring to, since it sounds like it could be a great vacation destination for a FIREd person/couple.

By the way, your greatest 'asset' is that wonderful wife of yours. You have no idea how rare it is to find women who don't laugh at you for your frugal ways, while subsequently saying how much they want to do this or see that (never activities involving little/no expenditures).
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Re: Targeting FIRE @ 28
Old 03-02-2007, 01:18 PM   #3
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Re: Targeting FIRE @ 28

"I currently manage a portfolio of around USD 400k, of which my personal money is about USD 200k."

I'm curious about what the other $200k USD is? Are you trading on margin/borrowed money?

$1000/month would be under 3% per year of a USD$400,000 portfolio. Your plan should work based on this metric.
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Re: Targeting FIRE @ 28
Old 03-05-2007, 01:03 AM   #4
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Re: Targeting FIRE @ 28

Thanks for your replies!

Moore:

Yes, I've also been living with my parents until the beginning of this year - saves lots of money indeed

On the long run return, we will definitely cap our yearly expenses at 4% of the portfolio once in ER. However, my personal forecast is that the local market will continue to return 20-30% yearly for the next 3-5 years, after which will revert to the mature market long term return of 8-10%. Valuations are still on the low side compared to developed markets but are catching up fast.

Thanks for the appreciation on my significant other - frugality was one of the qualities for proposing her

Justin:

No, rest up to 400k is family and friends money, with whom I have a profit sharing agreement. As mentioned, I run like hell from debt, and this also applies to stock market investments

Btw, if I wasnt clear, all the returns mentioned were obtained on ol' plain common stocks, no derivatives etc.
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Re: Targeting FIRE @ 28
Old 03-05-2007, 05:40 AM   #5
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Re: Targeting FIRE @ 28

Just wondering, are there any early retirees below 35, lets say, on this forum? Would be interesting to have their views on how they got there and how's life if one retires at such an early age.
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Re: Targeting FIRE @ 28
Old 03-05-2007, 06:59 AM   #6
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Re: Targeting FIRE @ 28

I'm 35 and retired. I live in Estonia.
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Re: Targeting FIRE @ 28
Old 03-05-2007, 12:24 PM   #7
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Re: Targeting FIRE @ 28

Trek, congrats for bailing out so early!

Check your private messages, I hope we can exchange some opinions on this.

All the best!
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Re: Targeting FIRE @ 28
Old 03-05-2007, 02:30 PM   #8
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Re: Targeting FIRE @ 28

Quote:
Originally Posted by mishtone
Just wondering, are there any early retirees below 35, lets say, on this forum? Would be interesting to have their views on how they got there and how's life if one retires at such an early age.
Still have 4 1/2 (short ) years until I hit the 35 year milestone, but hoping to be able to start my lifetime sabbatical at that time (with or without a significant other, and barring a complete market meltdown).

There were several items that all contributed a great deal to my journey on the yellow brick FIRE road. One helped more than the others, but all were essential components:

1) Saving up about $20k from caddying and mowing lawns as a teenager, starting when I was 12 (and not splurging it away like my peers would have done). Saved up another $25k during college working during the summers/Christmas Break

2) Having parents that paid for college tuition

3) Living at home after college (and watching over my parents place when they're out of town 7 months out of the year), making my utilities and housing costs zero. Food costs are reduced.

4) LBYM in all areas of my life, especially when it comes to dating (I do tend to splurge in that area, but limit it to meals out, and perhaps a little entertainment)

5) Working my butt off for a relative's construction company, and earning a decent salary (compared to what he pays a brother-in-law and other people and what they do for him, I'm not getting special treatment by any means)

6) Working even harder for 2 1/2 years on a project that was 3x as large as any other project my relative ever did, and running the entire job all by myself. Due to my superhuman efforts, the job was extremely profitable, despite all of the problems that my family members, co-workers, and general contractor created. It led to a compensation package that was "fair" (could have been a little higher), but was definitely the capstone in my FIRE pyramid (or the largest base section, depending on how you want to look at it).

7) Although my initial years of investing (93-99) saw my portfolio seesaw from break-even to 30%/40%/50% losses 3 times, I managed some dumb luck by going for the relative steady 6% after-tax Muni CEFs, some 8% preferreds and REITs in 2000. I was tempted to join in the .com mania, but I knew as soon as I bought in, the 2.0157 x 10^10 PE ratios would no longer be in vogue, and I'd see my holdings plummet even more. Since then, I've made a few decent moves so far, and have averaged about 8% (pre-tax) returns from about 2000 till earlier this year, including a decent chunk in CDs/I-Bonds.

8) Having my relative's company pay for as much as possible to save both myself in income taxes, as well as my employer in matching SS/Medicare taxes (as well as increase employee morale). My car, car insurance, gas, maintenance, and property tax is paid by the company (as well as owned by the company). Same with my cell phone and laptop.

9) Had an inheritance in 2000 ($80k).

When taking all of the above into account, and merging with my frugality that would (at times) make UncleMick's record look like an extravagant lifestyle, it's placed me within reach of a goal that I never thought would be possible. Now I just have to submit myself to the market and hope we don't get some mean reversion in the next 5 years, as I slowly loosen the belt loop and start to "enjoy life", as my peers would say.

As for what I'd do if retired? Primary goal is to find that special someone to spend the rest of my life with (sure hoping I find her before I turn 35, though ). Then, it's doing whatever I damn well please.
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Re: Targeting FIRE @ 28
Old 03-06-2007, 08:13 AM   #9
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Re: Targeting FIRE @ 28

Quote:
Originally Posted by mishtone
Trek, congrats for bailing out so early!

Check your private messages, I hope we can exchange some opinions on this.

All the best!
No problem. Check your PMs.
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Re: Targeting FIRE @ 28
Old 03-07-2007, 08:16 PM   #10
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Re: Targeting FIRE @ 28

good luck to you. i retired by age 30 so it can be done! i always say that the number one factor in economic security is your choice in a spouse. i don't mean to marry rich though that is always nice. but a lbym lifestyle. congrats to a great attitude and wonderful future.
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Re: Targeting FIRE @ 28
Old 03-11-2007, 10:34 PM   #11
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Re: Targeting FIRE @ 28

hi mishtone

you forgot to specify the name of the country
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Re: Targeting FIRE @ 28
Old 03-12-2007, 01:11 AM   #12
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Re: Targeting FIRE @ 28

enexcu:

That was purposefully - trying to preserve a bit of confidentiality, I have to keep my job till FIRE
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Re: Targeting FIRE @ 28
Old 03-20-2007, 02:45 AM   #13
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Re: Targeting FIRE @ 28

lol
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