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11-29-2010, 11:26 PM
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#2
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gone traveling
Join Date: Oct 2010
Posts: 141
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hmmm...borrows from broker on margin, uses credit cards for capital...
sounds like a very low risk strategy.
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Do I hear $90,000? $90,000, $90,000, somebody give me $90,000!
11-29-2010, 11:57 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Do I hear $90,000? $90,000, $90,000, somebody give me $90,000!
This is whole new direction for the board. It makes old JG_1st look like an insurance actuary.
I like it! It should broaden our appeal to the world at large.
One thing I guess I don't quite get about these "extreme" guys- why the PhD? Why not just retire out of high school? One could live in Mom's basement, maybe even eat out of her refrigerator. A little baby-sitting and grass cutting in the neighborhood and the pork rinds and beer are covered.
He could even retire at 18 or so, with no needed capital at all.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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11-30-2010, 01:59 AM
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#4
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Recycles dryer sheets
Join Date: Mar 2008
Posts: 410
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Quote:
Originally Posted by haha
This is whole new direction for the board. It makes old JG_1st look like an insurance actuary.
I like it! It should broaden our appeal to the world at large.
One thing I guess I don't quite get about these "extreme" guys- why the PhD? Why not just retire out of high school? One could live in Mom's basement, maybe even eat out of her refrigerator. A little baby-sitting and grass cutting in the neighborhood and the pork rinds and beer are covered.
He could even retire at 18 or so, with no needed capital at all.
Ha
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I imagine in some cases, the parents are paying for the PhD, and it beats w*rking. When the degrees and the money run out, it's time to get creative.
I don't think many parents just let the kids hang out once they're 18. I know a couple of examples where that has happened though. The problem with doing that long term, is the parents better be leaving an FI style inheritance. Otherwise, the kid is going to end up on the streets in middle age, with no skills/employment history. Kind of like that old Peter Sellers' movie "Being There".
__________________
ACC USN-(Ret)
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11-30-2010, 07:12 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,331
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I see a lot of these extreme ERers sleeping on the grates in DC. A number of them have PHDs. Not a life style I would choose nor many of them.
__________________
Idleness is fatal only to the mediocre -- Albert Camus
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11-30-2010, 08:15 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 7,746
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Very heavily margined on long term debt? That should all turn out well if rates increase moderately.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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11-30-2010, 08:24 AM
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#7
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Full time employment: Posting here.
Join Date: Apr 2005
Posts: 807
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Living proof that "an idiot with a PhD" is not always an oxymoron. Sheesh!
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11-30-2010, 10:29 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,812
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I was reading the very same blog entry myself recently. However, you have to agree that it is working for him, though I would say it must take some cojones to adopt his chosen strategy and it's not one that would work for the majority.
However, he does say that the worst that could happen is he would have to return to the workforce if it goes badly.
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I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
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11-30-2010, 10:37 AM
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#9
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by Onward
This is indeed early-retirement extreme. Some questionable strategies but also some food for thought.
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Jacob has finally found someone who makes his own ERE strategy seem both opulent and conservative.
At least the guy estimates that he has a 60-75% chance of success, although I couldn't help wondering how that's an improvement over "put it all on red". He also admits that he'd rather screw this up in his 30s (and return to the workforce) than to have to apply for a Wal-Mart job in his 70s.
I bet he gets married, perhaps starts a family, and suddenly finds out that investing on margin for money to buy diapers makes it kinda hard to sleep at night.
__________________
*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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11-30-2010, 10:54 AM
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#10
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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A touch of idealism, some naivete, and a complete lack of responsibilities makes many young, unattached people feel invincible. Then comes the wake-up call...
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11-30-2010, 11:27 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 7,746
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Quote:
Originally Posted by Nords
At least the guy estimates that he has a 60-75% chance of success, although I couldn't help wondering how that's an improvement over "put it all on red". He also admits that he'd rather screw this up in his 30s (and return to the workforce) than to have to apply for a Wal-Mart job in his 70s.
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That is sort of my rationale as well. Front load the risk, as he says, right now and hope I can ER around 35 (with still a non-zero risk of failure).
I'll probably know my ER plans are going to fail early on, and I can then choose to find some relatively well paid work at a relatively early age instead of saying "Welcome to Walmart" or "Do you want fries with that" at age 70.
But I am shooting for a success rate much higher than 60-75% for sure. And the way he was investing on margin, I would put the success rate much lower IMHO.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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11-30-2010, 11:49 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,519
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Power to him! Hope he succeeds. I'd die from stress if I tried to copy his strategy.
All of us ER'ing based on historical studies of market returns take a risk of failure. To each their own.
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11-30-2010, 12:17 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Mar 2007
Posts: 3,323
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Quote:
Originally Posted by FD
A touch of idealism, some naivete, and a complete lack of responsibilities makes many young, unattached people feel invincible. Then comes the wake-up call...
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+1
__________________
Please consider adopting a rescue animal. So very many need a furr-ever home and someone to love them! And if we all spay/neuter our pets there won't be an overpopulation to put to death.
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11-30-2010, 01:56 PM
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#14
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Full time employment: Posting here.
Join Date: Apr 2005
Posts: 807
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Okay I was unduly harsh in my earlier response to this, mostly because the investment (gambling) approach is so appalling. In an effort to make amends, if I were in my 30's I'd look for ways to craft a lifestyle of long-term semi-retirement. Ernie Zalinski writes wonderfully about this in his book "The Joy of Not Working," and there's another good writer who summarizes the approach here:
http://www.whywork.org/about/feature...etirement.html
In a nutshell, have clear discernment about the things you love to do that don't bring in money, have a bunch of things you don't mind doing (or better yet, love doing) that do generate $, save like crazy, live frugally, plan on working part-time forever rather than slaving away at work you hate and keeling over from a heart attack on the golf course at age 65 or whatever.
Early Semi-Retirement as a goal makes sense no matter what one's age. OTOH investing 700K on margin with 100K in net assets sure sounds crazy at any age.
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12-03-2010, 10:36 AM
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#15
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Recycles dryer sheets
Join Date: May 2010
Posts: 131
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Quote:
Originally Posted by haha
One thing I guess I don't quite get about these "extreme" guys- why the PhD? Why not just retire out of high school? One could live in Mom's basement, maybe even eat out of her refrigerator. A little baby-sitting and grass cutting in the neighborhood and the pork rinds and beer are covered.
Ha
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There are very few people who gets the chance to consider alternative ways of living before locking themselves into the educational path of college-student loan-internship to pad resume-job-car loan-30 year mortgage-random spouse-new job-children-divorce-job-next spouse, next job, furniture-loan, first cholesterol lowering drug, promotion, beta-blockers, fourth car, first heat-attack, etc...
Most people who seek early retirement come to realize that maybe they don't like 9-5 work at some point during that path. For instance, I didn't realize that I didn't like career work until management started pushing more and more to "network" rather than "work". Or maybe they decide they simply have other goals than being "employee of the year."
We got a couple of precocious teenagers on the ERE forums, but that's out of a few hundred people. It's rare to have that level of insight in how the socioeconomic system really works when you're 18.
So it's mainly a question of not knowing what opportunities there are in advance and then to some degree being smart and high-earning enough to act on it once it becomes clear.
__________________
FI@30, ERE@33.
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12-03-2010, 10:46 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Posts: 1,934
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Quote:
Originally Posted by jacob
college-student loan-internship to pad resume-job-car loan-30 year mortgage-random spouse-new job-children-divorce-job-next spouse, next job, furniture-loan, first cholesterol lowering drug, promotion, beta-blockers, fourth car, first heat-attack
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You left out the nervous breakdown and the mid-life crisis.
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And if I claim to be a wise man, it surely means that I don't know.
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12-03-2010, 10:49 AM
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#17
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Moderator Emeritus
Join Date: Sep 2007
Posts: 17,774
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No joy at all?
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
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12-03-2010, 12:13 PM
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#18
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Recycles dryer sheets
Join Date: May 2010
Posts: 131
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I think the best way to see extreme early retirement is simply to think of the person working as private asset manager with his own money(*). (Reading the guest post and the following comments in detail it becomes clear that he's more sophisticated than the typical investor with a handful of funds and a standard asset allocation plan.) In that sense, being an investor with $110k in assets is risky in the same way that having an education as a doctor with $100k in student loans is risky or being an carpenter with $110k worth of shop tools. Yes, the investor can lose his money, but the carpenter can lose his hand or his business and the doctor can get hit by a lawsuit or simply die of a heart attack at 55.
(*) Of course any defined contribution plan can be seen like that.
Maybe the key difference is that asset management only takes a few hours a week tops (especially when you don't have to write performance reports) and thus it could be confused with retirement.
As stated, the worst thing that can happen to the guest poster is that he ends up $50k in debt. Being able to live on $12000 a year (a big asset when you think about it) makes it possible to pay such a debt off in a relatively short amount of time, compared to most people.
__________________
FI@30, ERE@33.
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12-03-2010, 01:31 PM
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#19
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Thinks s/he gets paid by the post
Join Date: May 2007
Posts: 1,251
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Quote:
Originally Posted by haha
This is whole new direction for the board. It makes old JG_1st look like an insurance actuary.
I like it! It should broaden our appeal to the world at large.
One thing I guess I don't quite get about these "extreme" guys- why the PhD? Why not just retire out of high school? One could live in Mom's basement, maybe even eat out of her refrigerator. A little baby-sitting and grass cutting in the neighborhood and the pork rinds and beer are covered.
He could even retire at 18 or so, with no needed capital at all.
Ha
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Simply, the more educated you are, the more likely "living life on your own terms" and pursuing enlightenment would appeal to you.
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12-03-2010, 01:56 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Jan 2004
Posts: 1,502
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Quote:
Originally Posted by Bestwifeever
No joy at all?
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The politician in me tell me I should say that reading the wide spectrum of opinions on ER on e-r.org is one my life's great joys.
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