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Re: ER article: *"American Fairy Tale"
Old 06-25-2004, 03:33 AM   #41
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Re: ER article: *"American Fairy Tale"

I expect I would still be "livin' large" if I was
sitting on a big pile of money. I enjoyed those days.
When what was required to support the lifestyle
became a chore, my ER compass swung
180 degrees pretty fast. I wouldn't call it an
epiphany but it was close.

John Galt
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Re: ER article: *"American Fairy Tale"
Old 06-28-2004, 06:14 AM   #42
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Re: ER article: *"American Fairy Tale"

Just curious - many here who retired early report earning very large salaries, owning companies, working their tails off, etc. Did anyone just work for average wages, in a regular 40 hour per week job, raise a family, and still manage to save enough to retire early?

In response to Bob Smith's question, here's our story:

Just got my SS lifetime earnings statement, and it shows my annual income over the past 20 years in my regular 40hr/week engineering jobs. 1984: started at $25K (first engineering job after college), inching up to $35K after a few years, then $45K after a few more years, then $55K for a few more years, and finally $60K for the last few years. Pretty much the same earnings for my wife (thankfully NOT an engineer!).

We have no kids by choice, our modest house was purchased for $85K about 13 years ago (now paid off and worth ~$350K due to gangbuster housing market). No other special income or windfalls. We now sit on a portfolio worth ~$800K (not including house or other material assets).


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Re: ER article: *"American Fairy Tale"
Old 06-28-2004, 06:17 AM   #43
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Re: ER article: *"American Fairy Tale"

FWIW, here's our "secrets" to getting ahead and hopefully being ER soon:

-No kids (it wasn't a financial decision at all, but certainly helped out with our finances!)
-Be frugal with purchases (not necessarily "cheap" - big difference!).
-Minimize expenses, especially recurring ones. (we haven't been very good at this - our annual expenses have been between $35K and $42K since we got married in 1980 - with $42K being more recently. We don't buy a lot of "stuff", but the daily costs of living and prorated costs (taxes, heat, power, insurance, etc) just keep rolling in. We'd love to see the expense ledgers of couples who live on $24K/year - how do you do it so inexpensively?!)
-Save as much as possible before receiving the paychecks (401K, etc.).
-Make additional automatic deposits of a good chunk of post-tax money into the portfolio. (Besides 401Ks, this has been one of our biggest ways to save. Just pay ourselves first and we never miss it).
-Invest everything saved in a well-distributed fashion.
-Between qualified and non-qualified money, we've managed to squirrel away between $25K-$45K/year over the past 14 years.
-Be thoughtful of purchases. i.e., be mindful of how much life energy it takes to make xx money to buy something worth yy. (We read Your Money Or Your Life about 10-12 years ago, and it got us onto this manner of thinking - and it's helped us a lot. Also we still keep a hand-written graph/chart of our income, expense, and portfolio values. It's really neat to see the 3 lines clearly showing us living below our means for the past 12 years. It's not a budget, but if we were to get off track it would clearly show up and make us figure out what happened. Thoughtful purchases just becomes a habit or second-nature.)
-Be aware and concerned about maintenance costs of owning things, especially when they have motors and/or they require never-ending "consumables".
-Keep eyes on the ball ("the ball" in our case was to pile up the money steadily and heavily and then let it do the work for us as we enjoy ER!!)

BTW, the pundit's statements about needing 70%-100% of income for retirement is clearly not appropriate for us. It would be more like 30%-40% maybe, at our current incomes.


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Re: ER article: *"American Fairy Tale"
Old 06-28-2004, 06:53 AM   #44
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Re: ER article: *"American Fairy Tale"

Good post CFCF! I have posted our "budget" before,
and so for brevity (and for any like Steve who tire of my
pontificating) I won't relist here. We can get along just fine on $24,000, which is about 25% of my peak earning years. I went back over the checkbook (again) and that
is the number. Plus, I still say we could make the $50.00
per day (for a couple) with a little creativity.

John Galt
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Re: ER article: *"American Fairy Tale"
Old 06-29-2004, 05:49 AM   #45
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Re: ER article: *"American Fairy Tale"

Well here is my dads story.

He joined the marines at 17 and got his GED there. Got out after a few years and ended up a electrician at the steel mills in Chicago in the mid 60's. Got sick from something at the mill, everytime he went to work he would break out in welps. The doctors though mercury poisen but wern't sure. So he couldn't work there anymore and never though about any compensation from the mill.

We moved to the midwest in the late 60's and he started building houses on his own. Used all of his savings and we were living in a two bedroom rent house at this time. There were four of us.

He did well but never made what some would call big money. Built about 5-10 houses a year.

We lived well, my sister and I both attended college with help from my dad. My mother did not work outside the home. We had new cars and a nice 1900 sf ranch house in a nice subdivision.

The big thing is dad would not buy anything on credit and always lived below his means before it was popular.
I dought if he has a credit card to this day.

My mother passed away at 55, twenty years ago. Dad quit working at this time. He was 56. You never know when something like this is going to happen.

His only investments were CD's and rental properties. He golfs dailey at a local club and in the winter goes to florida to fish. This is his dream retirement. He is 68 now and said he should have quit sooner. He says he didn't retire, he quit.

Just a data point that normal people can do it.
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Re: ER article:  "American Fairy Tale"
Old 08-16-2004, 08:20 PM   #46
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Re: ER article:  "American Fairy Tale"

You also find a lot of these "Don't You Dare Retire Early" articles in the Wall Street Journal, a good financial paper, but one whose conservative slant I find increasing tiresome.

The same theme comes in several guises. One is usually stories that are thinly disguised envy toward the Europeans' definition of work, life, and retirement -- about how wonderful but unsustainable the European systems are and about how the rest of the world better become more American. (Or else what? They'd have a non-functional Social Security System?) The second disguise is usually homilies concerning 401(k) plans. They usually trot out the stat that the "average" 401(k) plan has only 50K in it. That's just total B.S. The average 401(k) may simply be the latest plan that a worker has joined after having worked at 5 or 6 different companies. Anyone with two brain cells will want to roll over any old 401(k) plan into an IRA, unless your old 401(k) allows you to buy 1986 Microsoft shares.

I guess the investment industry mis-calculated. After they have scared us shitless by telling us that we need to save 45% of our gross income, they have created a bunch of people who are able to retire early, and they are running out of willing slaves, so they have their mouthpieces tell us that retiring early is nothing but a fantasy.

I say, what the heck, my company eventually will outsource my job to China anyways, so why can't I pack my own parachute during my off hours? I know my CEO had his packed before he even took his current job.

Got retiree health care through your company? What if the company goes bankrupt? Retire and go RVing full time? RVs are not structurally sound. You'll die in a fiery crash. Retire and live overseas? What if you die? Aren't you worried about your body? No, I don't think I will be able to seeing how I am dead.
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