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We are geting there, slowly.
Old 08-07-2018, 01:05 PM   #1
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We are geting there, slowly.

HI. I've been lurking here for about a year now and thought I would finally introduce myself. my wife and I are both 42 and have recently been thinking about FIRE. Our goal is to be able to call it quits the day our second child graduates from high school (The youngest is about to start kindergarten) so it really is a ways away. There are some interim goals in there also such as being able to reduce our work schedules so we can do more of the things that we would like to do.

We have been pretty decent savers most of our lives together, but it is just recently that we are really starting to ramp things up. We were probably saving about 15-20% of our income, but I wanted to try to save more so we decided to make a few changes. For the last year and a half we did it Dave Ramsey-like. I didn't turn off 401K like he said, but I did get rid of whole life that I had since I was a baby and get term life. I then sold some individual equities to pay off both cars, student loans, home equity loan, fully funded emergency fund, and now just have our mortgage ( I have enjoyed reading all the mortgage threads) and a small bit on a rental property. Once everything was paid off we started living off of one income and the other one goes into investments. Our current investable portfolio is about $650,000 with most of that in 401ks and IRAs so part of the plan is to increase contributions to taxable investments

We have several FIRE dreams. I would like to actually open a small business making gourmet peanut, almond, cashew etc. nut butter cups. Right now I make a bunch at Christmas time for friends and family and every year I hear ‘you should sell these’. I have no idea how to start or run a business, but when I get closer to FIRE I may start looking into that a little more seriously.
We have also thought about selling the house once the kids are in college and then being nomads for a couple years to figure out where we want to live (which would of course put on hold the aforementioned nut butter cup business).

It’s been enlightening to read a lot of the threads here. My 7 year old son and I even started a new hobby based on a mention here. Someone had mentioned beekeeping and it piqued my interest so I did a little research and this year we got our first beehive. He enjoys going out to the bees in his suit and inspecting the frames. This past weekend he harvested his first honey. He is ready to add more hives next year. At night when it is time to read he sometimes asks to read Beekeeping for Dummies


Right now ER is just a dream so we haven't done a lot of the budgeting and expense tracking that are recommend for several years before pulling the trigger, but the plan is in place and once things start to get closer I will do more preparation. In the meantime I’ll just keep saving and learning and maybe make a few posts around here.
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Old 08-07-2018, 01:54 PM   #2
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Welcome, Filetmerlot! Glad you've signed on and hope you'll contribute your perspective and experience.

It sounds like you've done a lot of things right to prepare for FIRE, so congratulations on taking action soon enough to make it a reality. We also did the "live on one income" strategy (although we didn't stick to it strictly in some years) and it really pays off to have that mentality. It also reduces the stress about losing a job.

You should find your available income going up with reduced child care expenses, so you might look into starting 529s for the kids.

Very cool story about the beekeeping!
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Old 08-07-2018, 02:00 PM   #3
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Welcome to the forum. Great intro post. I love your handle. But then I like filet and merlot.
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Old 08-07-2018, 02:01 PM   #4
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Welcome aboard. You sound like fun, I mean it. You would be fun to know. Also, I like your screen name. It sounds tasty.

We did not start really saving until I was in my late 30's (husband is older, and retired many years before I could). Certain life events caused us to rethink whether our pensions were going to be enough. Although we could not afford to stash one whole income as you're doing, we fully funded our Thrift Savings Plan accounts (which are our 401K's), even though we did not get matching employer funds - TSP was just too good of a savings vehicle.

This was also when we started buying index mutual funds. If you are putting one whole income into those, you will be amazed how fast the pot grows during good years.

Sometimes, we look back and think, "We should have spent more money on vacations and fun when we were younger," but that is water over the dam, and the fatter retirement accounts certainly are nice.

Some ventures into rental property turned out to be unfortunate. Getting out of a real estate investment can be painful.

Tracking expenses is very important and should not be hard, once you get into the habit. Many of us use the simplest spreadsheets - months across the top, type of expense down the side.

Again, welcome aboard.

Quote:
Originally Posted by Filetmerlot View Post
HI. I've been lurking here for about a year now and thought I would finally introduce myself. my wife and I are both 42 and have recently been thinking about FIRE. Our goal is to be able to call it quits the day our second child graduates from high school (The youngest is about to start kindergarten) so it really is a ways away. There are some interim goals in there also such as being able to reduce our work schedules so we can do more of the things that we would like to do.

We have been pretty decent savers most of our lives together, but it is just recently that we are really starting to ramp things up. We were probably saving about 15-20% of our income, but I wanted to try to save more so we decided to make a few changes. For the last year and a half we did it Dave Ramsey-like. I didn't turn off 401K like he said, but I did get rid of whole life that I had since I was a baby and get term life. I then sold some individual equities to pay off both cars, student loans, home equity loan, fully funded emergency fund, and now just have our mortgage ( I have enjoyed reading all the mortgage threads) and a small bit on a rental property. Once everything was paid off we started living off of one income and the other one goes into investments. Our current investable portfolio is about $650,000 with most of that in 401ks and IRAs so part of the plan is to increase contributions to taxable investments

We have several FIRE dreams. I would like to actually open a small business making gourmet peanut, almond, cashew etc. nut butter cups. Right now I make a bunch at Christmas time for friends and family and every year I hear ‘you should sell these’. I have no idea how to start or run a business, but when I get closer to FIRE I may start looking into that a little more seriously.
We have also thought about selling the house once the kids are in college and then being nomads for a couple years to figure out where we want to live (which would of course put on hold the aforementioned nut butter cup business).

It’s been enlightening to read a lot of the threads here. My 7 year old son and I even started a new hobby based on a mention here. Someone had mentioned beekeeping and it piqued my interest so I did a little research and this year we got our first beehive. He enjoys going out to the bees in his suit and inspecting the frames. This past weekend he harvested his first honey. He is ready to add more hives next year. At night when it is time to read he sometimes asks to read Beekeeping for Dummies


Right now ER is just a dream so we haven't done a lot of the budgeting and expense tracking that are recommend for several years before pulling the trigger, but the plan is in place and once things start to get closer I will do more preparation. In the meantime I’ll just keep saving and learning and maybe make a few posts around here.
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Old 08-07-2018, 02:58 PM   #5
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Welcome to our forum. Sounds like you are on your way.
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Old 08-07-2018, 03:03 PM   #6
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Welcome. I do have a quick question: Filet o' fish, or cow?


You sound like a delightful person and your plan is brilliant. Join in the conversations - it's a great group.


I joined a few years back, and am retiring at 61 in 24 days. Seriously, it seems like just yesterday we were getting our kids out of college and making plans that are just about to materialize. It will go by quickly - enjoy those kiddos. You can't get these days back.
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Old 08-08-2018, 07:36 AM   #7
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Thank you for the responses.

SumDay: It is cow, although I did spend a couple years during high school serving filet o'fish in the afternoon

Amathyst: As far as rental property, I'm still not sure it is for me. When my DW and I moved in together we decided to rent out her condo, so we became landlords by default. She had purchased her place near the top of the bubble so when we moved in together it would have been a large loss to sell. We rented it for 10 years maybe breaking even in the long run or a little loss, but when the tenant told us he was leaving last year we decided to put it on the market. It wasn't in an area that we couldn't see ourselves moving back to (it was near a giant shopping mall and traffic from October through new year was horrendous). We had an all cash offer 10% over asking within hours so we took it. It was an older condo, built in the 70s, so it would probably need some capital improvements in the future. We didn't really want the hassle especially since we have moved about an hour away from it

We still have one that we purchased 5 years ago with the intent to rent out and maybe move there in the future. This one is closer to our house. One seems like enough, though. I don't want to manage several properties.
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Old 08-08-2018, 09:32 AM   #8
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Welcome Filet! Congrats on your progress! My wife and I are Dave Ramsey grads as well. She made me stick to it probably more than I wanted to. We still do a budget even though it is a lot looser now.


We are roughly the same age and roughly in the same position. We are hoping to Fire in 2030. It is a long ways away but started a thread to keep motivated if you wanted to join down the road. 2030 Fire Thread- Who's in? ; Good luck on your journey! Love the new business with Bee's. Sounds like a great Father son project. Take Care.
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Old 08-09-2018, 06:33 PM   #9
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Good start! So, if I interpreted you post correctly, you're 42 and would like to FIRE at 55. Have you run any retirement calculators to determine your potential retirement assets at that time, and to determine what a SWR might yield, and whether your assets might be adequate to meet the budget needs? There are a TON of variables between now and then, but at least this would give you a realistic idea of whether you might achieve your target date, and what the retirement income might look like!
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Old 08-09-2018, 07:23 PM   #10
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Quote:
Originally Posted by Filetmerlot View Post

My 7 year old son and I even started a new hobby based on a mention here. Someone had mentioned beekeeping and it piqued my interest so I did a little research and this year we got our first beehive. He enjoys going out to the bees in his suit and inspecting the frames. This past weekend he harvested his first honey. He is ready to add more hives next year. At night when it is time to read he sometimes asks to read Beekeeping for Dummies
Could it be me!? I am an avid beekeeper.

Your plan looks good. I would track expenses monthly and set a percent savings target. e.g. 50% of gross income.

PS: We are in the similar boat in terms of current age and fire age.
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Old 08-10-2018, 05:07 AM   #11
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Originally Posted by Filetmerlot View Post
Right now ER is just a dream so we haven't done a lot of the budgeting and expense tracking that are recommend for several years before pulling the trigger, but the plan is in place and once things start to get closer I will do more preparation. In the meantime I’ll just keep saving and learning and maybe make a few posts around here.
It is more than a dream when you have a solid plan that is working, it is just a matter of time.

Quote:
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Welcome. I do have a quick question: Filet o' fish, or cow?
I also like filet (of both), and merlot, but I found that I like pinot noir better.
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Old 08-10-2018, 06:21 AM   #12
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Tracking expenses regularly helps you control/reduce the expenses because of the subconscious effect of seeing money leave your pocket. At least it works for me. The same effects can be seen by spending cash instead of credit but we like to use credit cards for ease of tracking expenses automatically.
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Old 08-10-2018, 08:04 PM   #13
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Old 08-10-2018, 09:23 PM   #14
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Originally Posted by Filetmerlot View Post
Thank you for the responses.



Amathyst: As far as rental property, I'm still not sure it is for me. When my DW and I moved in together we decided to rent out her condo, so we became landlords by default. She had purchased her place near the top of the bubble so when we moved in together it would have been a large loss to sell. We rented it for 10 years maybe breaking even in the long run or a little loss, but when the tenant told us he was leaving last year we decided to put it on the market. It wasn't in an area that we couldn't see ourselves moving back to (. We had an all cash offer 10% over asking within hours so we took it. It was an older condo, built in the 70s, so it would probably need some capital improvements in the future. We didn't really want the hassle especially since we have moved about an hour away from it
.
Welcome! Your experience with the condo mirrors ours. When DW and I married, we moved to our new home and rented my condo. It was OK for a while, with a long term tenant, but the next ones did not stay as long and the rehab costs were a killer.
I also put it on the market, and got a 10% over the asking price offer the next day.
I am glad I got rid of it. The only sad part it severed the last physical link to my late wife.
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Old 08-11-2018, 09:19 AM   #15
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Welcome,

I am also a fellow beekeeper, been doing it for four years now. It is a lot of fun and I have three young kids who also get a kick out of it. Really fun hobby that I hope to enjoy a long time.
I have toyed with the idea of a rental/VRBO place in the past, because I live in the perfect town for it. I always concluded though that I probably don't have the best mindset to be a profitable landlord (I think I might be too lenient on things) and I have enough trouble managing and maintaining my own house with three young children and two working parents. Equities and bonds are the best. Invest, allocate, and forget. You then focus more on the things in life you can really enjoy. Like taking your kids out in the back to check on the bees.
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Old 08-13-2018, 07:35 AM   #16
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Originally Posted by HNL Bill View Post
Good start! So, if I interpreted you post correctly, you're 42 and would like to FIRE at 55. Have you run any retirement calculators to determine your potential retirement assets at that time, and to determine what a SWR might yield, and whether your assets might be adequate to meet the budget needs? There are a TON of variables between now and then, but at least this would give you a realistic idea of whether you might achieve your target date, and what the retirement income might look like!
Yes. 42 with the hope of FIRE at 55. I've done some FireCalcing with SWR between 3 and 4 and the results seem promising so far. I keep seeing reference to IORP, but have yet to try that one.

I agree, there are a ton of variables such as college, increased activities for the kids, ability to get reasonable health insurance for the family if DW and I leave the corporate jobs that provide insurance, etc. We are still unsure how we are going to pay for college for the kids. They each have a few thousand dollars stashed away in index funds, but we aren't yet sure that we are going to say "We will pay for everything". We will continue to add to that pot.

I've done a very basic budget that seems to come in at about 50% of our current income. It isn't very refined since about 60% of that is categorized as health insurance and miscellaneous. I'll be refining this over the coming years when I learn about how much health insurance may cost and I keep better track of spending.
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Old 08-13-2018, 07:42 AM   #17
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You are doing well and on your way. FWIW, Firecalc at its default settings produces 100% success at 3.59% WR.
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Old 08-13-2018, 07:53 AM   #18
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Tracking expenses regularly helps you control/reduce the expenses because of the subconscious effect of seeing money leave your pocket. At least it works for me. The same effects can be seen by spending cash instead of credit but we like to use credit cards for ease of tracking expenses automatically.
I do like using cash. It does make me think more about it if I am handing over a few $20s instead of just seeing $60 subtracted from my bank account which can feel like just a number instead of actual money.

I find my ability to track expenses ebbs and flows. Kind of like a new years resolution. I'm gung ho for a while and then I let it wane. DW and I have been going along with the pay yourself first mentality where the day the paycheck hits the bank account there is also an auto debit for cash savings, IRAs, and brokerage. Whatever is left is there to spend however we see fit.

There are areas I'm sure we could cut back, but we are hitting our savings goals and we don't want to deprive ourselves or the kids too much. We try to be frugal without going overboard. e.g. for our upcoming vacation we did VRBO house. We could have saved a little money and just had a hotel room for a week, but It's just more pleasant if the kids have their own beds and rooms and there is separation between the sleeping kids and awake adults, a yard to play in, and a kitchen to actually cook instead of eating out every night.
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Old 08-13-2018, 07:59 AM   #19
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Originally Posted by Filetmerlot View Post
....Right now ER is just a dream so we haven't done a lot of the budgeting and expense tracking that are recommend for several years before pulling the trigger, but the plan is in place and once things start to get closer I will do more preparation. In the meantime I’ll just keep saving and learning and maybe make a few posts around here.
i suggest that you get a copy of Quicken... use Quicken Lifetime Planner to design your plan and then use Quicken to monitor your progress.
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Old 08-13-2018, 12:08 PM   #20
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Hi there - new poster here and have a lot in common. We are little older than you guys (I am 47 and wife is 50), but you are guys are definitely ahead of us when we were 42, so nice job! Ramsey fan here too and also down to just the mortgage...I didn't go "scorched earth" as he likes to say, but we still were able to get to a good spot. I got to tell you, it feels nice to have everything paid off but the mortgage and so looking forward to being completely debt free down the road. Keep it up and I think it is fair to say that the "stage" we are in; we are finally starting to see some inertia take over and the nest egg getting big enough to do some heavy lifting. Won't be long before you have that $750K in your sights and we are anxiously awaiting the day we hit $1MM. Welcome again and oh yeah...love me some filet and merlot too!
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