Originally Posted by eta2020
I would work another 4-6 years.
I think you had done great job, but once you have what you have you know it is not really
all that big pile of money especially if you are relatively young.
Man, you've got a point....I've been thinking a lot about the prospect of working full time another 4-6 years. I could add materially to my portfolio by then, but my kids will be in their mid-late teens. Currently, after tax, my income adds ~9% to my NW annually. Deferred comp is helping that a lot.
For the group, here's how I'm slicing my portfolio as I forecast it for early '17 when equity vests:
non-invested (529s) - $200,000 Cash gen: $0
First Home: $635,000 Cash gen: $0
Cash: $350,000 Cash gen: $0
Company Stock: $50,000 Cash gen: (3%) $1500
Deferred Comp: $250,000 Cash gen: (3%) $7500
Retirement accounts $800,000 Cash gen: (2.0%) $16,000
Cash equities $850,000 Cash gen: (2.0%) $17,000
Personal Loan $100,000 Cash gen: (5.5%) $5,500
Real estate equity $760,000 Cash gen: (7.0%) $53,000
Total Net worth $3,995,000
Total Invested portfolio $3,160,000 Cash Generation ~$101,000
Withdrawal rate across the portfolio of about 3.3%, much more conservative on the stock portfolios. I modeled them that way partly in order to account for the fact that I can't withdraw from retirement accounts for another decade and a half, so there's material SOR risk in the taxable account. My dividend and distributions equal roughly that amount in my taxable account annually. I could see myself increasing these marginally as I got more comfortable over time, but don't want to plan on it.
I'd still be carrying about $655K in mortgages on investment real estate across 3 properties. I could pay off portions of that to increase cash gen, but won't do so if it means reducing cash reserves to less than 3 years' living expenses. The real estate at 7% is pretty heavily burdened by my pro-forma holdbacks for maintenance. Actual cash returns on real estate equity over the last few years have been closer to 9% or so.
Given my orientation around risk, I'd probably try to figure out how to put $30-50K on top of this by consulting, or doing something part time. I'd use that to cushion the portfolio, or spend more on vacation travel.
Prospect of traveling for an extended time and renting out the first home is really high, and unaccounted for in here.
The question is whether my quality of life is better working and not having to worry about money, or budgeting a little more aggressively than I have over the last few years and getting a bunch of time back.
Not sure if there's a question in there.....typing it out is therapeutic.