to retire or not that is the question

[ratraceout]

from England! hope to get to know a lot of you.

ok so i have trawled the web and seen the calculations etc on how and when to retire. none seem to make much clear sense to me.

im currently working in a sales job which pays very well and has huge commission potential! lucky me right

but.... i can't stand it anymore. i have been doing it for 20 years, set up and sold a business and then came back into the industry working for another firm. i have suffered with anxiety and depression over the years and most have been linked to the job i think.

im 38 years old and have managed to buy a house in the uk which is worth about £650k and has 150,000 mortgage. i also have a holiday home which i bought for cash and is worth about £1.25m. savings wise im sitting on about 800,000 of which about 400,000 is invested in funds / stocks etc.

the way i see it the holiday home can probably net me about 50-60 k a year in rental. im still young so i wouldnt stop work but just want to get out of the 8-7 daily slog.

problem is i dont know if i can do it and am worried about inflation and many years of retirement. im married but we dont have any kids yet although we will want to have 1 or 2....

any thoughts on what you all believe i should / could do? can i just quit? i have nothing lined up work wise but as i said would want to do something so as not to just fade away... but not high stress work, just something i enjoy...

thanks for reading and looking forward to all your sensible thoughts!!!!

[Texas Proud]

First Hi to you...

You do not talk anything about expenses... without that nobody can give you any useful infomation...


But to me, it looks like you are real estate 'rich'... some here has done it that way... others (like me) tend to invest in stocks and bonds...


Good luck in your pursuits...

[ratraceout]

thanks for your reply. at the moment we live on about £ 70,000 a year!

the numbers i have put in my top post are in uk pounds so multiply by 1.6 to get usd. sorry.

[Aiming_4_55]

Welcome to the forum.

Beside expenses, do you have access to reliable affordable health care especially if you plan on starting your family.

Is your spouse working or will she continue to work?

Any upcoming large expense, i.e. new auto, home repairs, etc?

Just looking at your nest egg, it looks good.

[ratraceout]

thanks a lot Aiming. we have health insurance and in the uk this is free anyway but we both have it. The holiday home is in the caribbean and can make us a good living and we could sell it. It was bought at a steal so couldnt not do it. My wife doesnt work but is about to start after finishing college Masters. I will def do something but just feel i need to get out of the slog. just concerned as we are both young and its a long time ahead (i hope) also im not perhaps as agressively invested in stocks as i should be

[Aiming_4_55]

That's great on the healthcare for you. That is my biggest worry when I pull the plug.

There will be others that will reply to your thread for suggested readings. I'm a Vanguard Target Fund investor and Total Stock Market Index guy, so it's kind of the lazy person way of asset allocation. I have $$ deposited every month, I consider it a bill I have to pay. It's worked out pretty good for me. I'm light on bonds, but I'm accepting the risk.

Perhaps you can take the edge off your job just knowing that you will be leaving that behind soon. Any internal jobs at your current company that you might be able to transition to on a part time basis?

Depending on how your rental goes, you might be able to increase your marketing and increase your income from that. It's amazing what you can pocket if you reduce expenses and rent out during off-season for a discount.

Take a little time reading up on investing and a strategy on how you will fill your days if you do quit.

[Midpack]

Welcome to the forum.

I'm surprised no one has suggested FIRECALC yet, there are links on this page. You can enter as much or as little detail as you want to see how your plan would fare. I suspect you can enter pounds instead of $ too as long as you're consistent throughout. Would be a great place to start...best of luck.

[ratraceout]

thanks but i think the firecalc does not take into account any property or rental income from property. it seems to me it works only on cash invested.

thanks anyway - or am i wrong and missed something?

[67walkon]

Probably you can quit work any time you want. You don't say what the rental property expense is, but if you are getting 50-60,000 net and your expenses are 70,000, you have enough money. Your 800,000 should easily generate another 30,000 to 40,000 annually, so your total non working income would be 80,000 to 100,000 annually. That is significantly more than the 70,000 in expenses.

It sounds like you are pretty young, so you might need to give some thought to how you will find purpose in your life if you don't report to a job you dislike. What do you like doing? How can you help others? You have lots of options because you are relatively well off.

[CoolChange]

Quote:

Originally Posted by ratraceout ...The holiday home is in the caribbean and can make us a good living and we could sell it. It was bought at a steal...

Welcome.

Can you give us some details about how you found and bought the house? Your due diligence, deciding on location, etc. Possibly start another thread. (I am starting to look for something either in Latin America or on a Caribbean island; probably won't buy for quite a while if ever unless I can find a steal.)

[Midpack]

Quote:

Originally Posted by ratraceout thanks but i think the firecalc does not take into account any property or rental income from property. it seems to me it works only on cash invested. thanks anyway - or am i wrong and missed something?

You're right it doesn't directly, but the OTHER INCOME/SPENDING tab allows you to enter up to 3 "pension" incomes. It could be any income source, including from property.

And if you want to build in eventual sale of any or all properties, the PORTFOLIO CHANGES tab allows entry of 3 lump sums to your portfolio. If you have more than 3 properties, you can simply combine them provided the start/end years coincide.

FIRECALC is not absolute, but it does a pretty good job of getting you in the ballpark. Give it a whirl, best of luck...

[photoguy]

Quote:

Originally Posted by ratraceout total comes to about 4,300,000 usd. currently we spend my wife and me about - 90,000 usd per year

Congrats on doing extremely well on your nest egg. At 90k/year withdrawal on 4.3M you are looking at about a 2.3% withdrawal rate which should be extremely safe (most people are looking at 3-4% I think). Of course, much of your assets are in real estate which may or may not be more difficult to extract an income stream than from investable assets, but certainly your portfolio value is more than adequate. My concern would be the lack of diversification by having so much in two houses.

[mexico]

Kind of a late reply to your post but thought I would add some quick thoughts. I am also in sales, and while the income is excellent, along with additional potential, it is a stressful way to make a living. I am 46 and looking at an exit of a yr or 2 after 20 and at point where it's not worth it. It's hard for people that have never done it to relate to business quotas, travel, higher goals every yr, and clients that spend less every yr.
I congratulate you on your accomplishments at such a young age and would also recommend calculators such as firecalc and flexibleretirementplanner.com to run numbers. Your future kids add a variable to this but looks like you are in good shape.