I admit it, I do not see the purpose in FIREcalc

[FmrLurker]

"p.s. Buying and selling rental properties, setting up and running a LLC, etc doesn't sound like being retired to me..."

+1

Also, w*rking the farm...

[harley]

I have a post hole digger. I'm not digging any more postholes if I can help it. I'd like to sell it or give it away, but I guess since I don't need it it's useless and nobody else will want it.

[COcheesehead]

Quote:

Originally Posted by harley I have a post hole digger. I'm not digging any more postholes if I can help it. I'd like to sell it or give it away, but I guess since I don't need it it's useless and nobody else will want it.

The OP is what is known as a humble brag. Once you understand that, the rest makes sense.

[Offgrid Organic Farmer]

Quote:

Originally Posted by Newventurer Congratulations on planning very well. Care to share how it happened? It’s not intuitive or everyone would have done it. Who was your mentor - great parents, the military, friends? Perhaps you should teach a class to help the youngsters gain a leg up.

My career field [subs] has an extremely high divorce-rate. I have served on subs where the entire crew [minus myself] were divorcees. So I was very careful about who I dated. When I thought that a girl might be wife material, I would tell her about my vision of my future [a small farm in the woods, gardening, raising livestock, selling farm produce, etc]. In most cases that would be the last date that any girl would go on with me. This was the 1970s, when the back-to-land movement was not popular. Then one girl I dated [an accountant very much into Home Economics] responded with "I could see dedicating my life to that goal". We were married in 1981 and we are still together. I served 20-years on Active Duty, out of the thousands of crewmen I served with I saw 3 that had successful marriages.

In 1985 we bought our first Multi-Family-Residence [MFR] a Tri-plex. We lived in one and we had two rentals. The rental income carried the mortgage, insurance and taxes, so my income was not needed for our housing expenses. At our next duty station we bought a five-plex MFR, then another tri-plex, then a four-plex. Any extra cash each month went into extra principal-only payments to buy down the mortgages. Since I spent 7-months a year living underwater, my wife managed the rentals for me, as her career.

Having mortgages kept us from paying income taxes, and I have always viewed the principal-only payments as building our Net Worth.

The only time that my salary money went into any mortgage was via those principal-only payments. Otherwise our MFRs paid for themselves.

Every year, we had discussions about what skill-sets we would need for when we reached our farm. We selected new hobbies each year that we needed proficiency in, with that end goal in mind.

Both of us took courses on budget counseling, she volunteered on-base in a counseling center, and I was assigned that duty as one of the many hats I wore on the boats I served on. We also both became certified tax-preparers, and we taught tax-planning strategies for 10+ years.

We lived on strict written monthly budgets, which complied with our projected tax filings a year in advance.

When I was 42, the US Navy booted me out onto pension, and we cashed out our holdings and used the cash to buy and set-up our farm.

It is a very low COL area, we have been here as 'farmers' for 13 years.

We both hate the stock market, but we have built-up some extra cash, so we decided that we were ready to go back into rentals again. We recently bought a big commercial building on a downtown block and we are remodeling it. We currently have four tenants [a church, a printing company, a day-care, and a residential couple]. We will soon have ten more apartments for university students.

[GravitySucks]

If you're a nail a screwdriver doesn't look like a useful tool.

[Dtail]

Message to OP - As you are starting to see, many people on this site (and other sites) use or have used Firecalc to assist in their retirement decisions. It might not be useful to you, but perhaps there could have been a different way of expressing this thought.

[FANOFJESUS]

I think you are right if you are living on half a pension you should be golden. Even if you had no apartments or not even a lot of cash. I see pensions on this forum I could live on very well even if I had saved no money during my life. My S.S. will be around $500 a month so I had to save. I am frugal but not that frugal. LOL

[GTFan]

Quote:

Originally Posted by Offgrid Organic Farmer There I said it. I have a pension from the US Navy, we live on half of my pension.

You do realize that a lot of folks live off of investments/savings alone, right? FIREcalc was a very valuable tool for me to decide when to ER, because I'm one of those.

[Newventurer]

Quote:

Originally Posted by Offgrid Organic Farmer My career field [subs] has an extremely high divorce-rate. I have served on subs where the entire crew [minus myself] were divorcees. So I was very careful about who I dated. When I thought that a girl might be wife material, I would tell her about my vision of my future [a small farm in the woods, gardening, raising livestock, selling farm produce, etc]. In most cases that would be the last date that any girl would go on with me. This was the 1970s, when the back-to-land movement was not popular. Then one girl I dated [an accountant very much into Home Economics] responded with "I could see dedicating my life to that goal". We were married in 1981 and we are still together. I served 20-years on Active Duty, out of the thousands of crewmen I served with I saw 3 that had successful marriages. In 1985 we bought our first Multi-Family-Residence [MFR] a Tri-plex. We lived in one and we had two rentals. The rental income carried the mortgage, insurance and taxes, so my income was not needed for our housing expenses. At our next duty station we bought a five-plex MFR, then another tri-plex, then a four-plex. Any extra cash each month went into extra principal-only payments to buy down the mortgages. Since I spent 7-months a year living underwater, my wife managed the rentals for me, as her career. Having mortgages kept us from paying income taxes, and I have always viewed the principal-only payments as building our Net Worth. The only time that my salary money went into any mortgage was via those principal-only payments. Otherwise our MFRs paid for themselves. Every year, we had discussions about what skill-sets we would need for when we reached our farm. We selected new hobbies each year that we needed proficiency in, with that end goal in mind. Both of us took courses on budget counseling, she volunteered on-base in a counseling center, and I was assigned that duty as one of the many hats I wore on the boats I served on. We also both became certified tax-preparers, and we taught tax-planning strategies for 10+ years. We lived on strict written monthly budgets, which complied with our projected tax filings a year in advance. When I was 42, the US Navy booted me out onto pension, and we cashed out our holdings and used the cash to buy and set-up our farm. It is a very low COL area, we have been here as 'farmers' for 13 years. We both hate the stock market, but we have built-up some extra cash, so we decided that we were ready to go back into rentals again. We recently bought a big commercial building on a downtown block and we are remodeling it. We currently have four tenants [a church, a printing company, a day-care, and a residential couple]. We will soon have ten more apartments for university students.

Thanks for your sacrifice! DW and I just visited my son in NY and did the Intrepid and the sub tour. Being on that sub made me glad I could get off in 1/2 hour and not the normal tour of duty. Can see how it would make you appreciate open spaces.

[Offgrid Organic Farmer]

Quote:

Originally Posted by rec7 I think you are right if you are living on half a pension you should be golden. Even if you had no apartments or not even a lot of cash. I see pensions on this forum I could live on very well even if I had saved no money during my life. My S.S. will be around $500 a month so I had to save. I am frugal but not that frugal. LOL

We have many neighbors who are on SSDI or SS, of $600 to $800 a month. These are all people who own their homes with no debt. So obviously they are doing fine.

$500/month is certainly cutting it close. I hope you are okay.

[pb4uski]

The reason OP sees no purpose in FIRECalc is because FIRECalc is principally a tool to assess sequence of returns risk for those with a significant portion of their retirement assets in stocks. Since OP doesn't own ay stock, then he has no sequence of returns risk.

However, there are probably significant concentration and geographic and property type risk in his real estate portfolio that he is blissfully unaware of... but that is fine since he can live off 1/2 of his military pension.

[Chuckanut]

Quote:

Originally Posted by pb4uski However, there are probably significant concentration and geographic and property type risk in his real estate portfolio that he is blissfully unaware of... but that is fine since he can live off 1/2 of his military pension.

+1


Thankfully, Many of us are also blissfully unaware of stock market ups and downs though that bliss is harder to maintain. I have never seen a local newscast where the anchor said "Your home went down 3.2% last week thanks to a rise in interest rates and higher property taxes to finance the new Big League sports stadium."

[Offgrid Organic Farmer]

Quote:

Originally Posted by pb4uski The reason OP sees no purpose in FIRECalc is because FIRECalc is principally a tool to assess sequence of returns risk for those with a significant portion of their retirement assets in stocks. Since OP doesn't own ay stock, then he has no sequence of returns risk. However, there are probably significant concentration and geographic and property type risk in his real estate portfolio that he is blissfully unaware of... but that is fine since he can live off 1/2 of his military pension.

People in investment forums often like to frame their discussions as if the stock market is the only type of investment.

Since I do not buy stocks, I am often left outside of those conversations.

Though I have seen FIREcalc mentioned many times, in the same context.

If someone buys a house, there often seems to be some idea that it is an investment, assuming that it will appreciate. But sometimes a house does not appreciate.

Mortgages I have had have all been for income properties. I never cared if they appreciated. My gain is in having a home to live for free, in buying down the principal, and the tax-sheltering. [We hate paying income taxes].

If home values go up, or down, it has little effect on me, or on my rentals.

[marko]

Quote:

Originally Posted by Offgrid Organic Farmer If home values go up, or down, it has little effect on me, or on my rentals.

A dividend/interest investor might say the same thing.

My portfolio value has gone up and down but my dividends/interest have remained about the same for a decade; slightly up over time.

In fact, I've often compared dividends to owning rental property.

[Calico]

Quote:

Originally Posted by pb4uski ....However, there are probably significant concentration and geographic and property type risk in his real estate portfolio that he is blissfully unaware of... but that is fine since he can live off 1/2 of his military pension.

Based on this exchange in another thread, it appears that one-half of the military pension is not sufficient for the OP when there is no back-up plan:

[Letj]

How useful would FIRECalc be if someone followed the financial advise, “don’t spend more than 2% of your portfolio”.

[Hermit]

Quote:

Originally Posted by Offgrid Organic Farmer People in investment forums often like to frame their discussions as if the stock market is the only type of investment. Since I do not buy stocks, I am often left outside of those conversations. Though I have seen FIREcalc mentioned many times, in the same context. If someone buys a house, there often seems to be some idea that it is an investment, assuming that it will appreciate. But sometimes a house does not appreciate. Mortgages I have had have all been for income properties. I never cared if they appreciated. My gain is in having a home to live for free, in buying down the principal, and the tax-sheltering. [We hate paying income taxes]. If home values go up, or down, it has little effect on me, or on my rentals.

If you read the info in FireCalc, you will find that it is based on the performance of stocks and bonds over the last hundred years or so. This historical information is available for anyone to use. Real estate data, on the other hand, would be much harder to collect and correlate from long past history. I think it could probably be done over the last 25 years or so, but would be a monumental task, because there is no single set of marketable products. Each piece of real estate is bought and sold independently. I don't think you will see, in your lifetime, an ability to model real estate the way that the stock and bond markets are currently modeled, which is what FireCalc and many other tools do. If you are not invested in stocks or bonds, it will not be very useful to you, which many of the above posts have said.

The one thing I can suggest is that the housing market will go up and will go down.

[FANOFJESUS]

Quote:

Originally Posted by Offgrid Organic Farmer We have many neighbors who are on SSDI or SS, of $600 to $800 a month. These are all people who own their homes with no debt. So obviously they are doing fine. $500/month is certainly cutting it close. I hope you are okay.

I am ok. I saved other money when I was working.

[Another Reader]

I think the OP is being smug, which is not a nice way to behave. I have a nice rent roll, survived the big downturn just fine, thanks to all the people that were foreclosed on or had to short sale, bought more properties, and so on. Next time the stars may not align and I will suffer some serious pain.

Of course FIREcalc is not of use to those of us that have pensions and real estate. Our risks are different - the pension funds go bankrupt or the pensions are inflated away, the real estate market changes, employers move elsewhere, etc. There really isn't any compiled historical data from which to draw conclusions about the future for us.

Since we are still around after a couple of decades or more, we are probably at least decent business people and our business management has worked out. I figure I have a good chance of continued success with what I'm doing. My retirement income "stool" has more legs than a spider, my income sources and assets are diversified, so I just don't worry about it now.

The OP might want to think about what will happen as he and his wife age and eventually can no longer farm. An "exit strategy" might be something to put on the future "to do" list.

[ERD50]

Quote:

Originally Posted by Offgrid Organic Farmer .... If home values go up, or down, it has little effect on me, or on my rentals.

Quote:

Originally Posted by Calico Based on this exchange in another thread, it appears that one-half of the military pension is not sufficient for the OP when there is no back-up plan:

Good catch, that other comment was posted by the OP just a few days ago. Sure paints a different picture from "home values have little effect on me... ".

Heck, the stock market fall didn't drive me into bankruptcy, and I'm not even working to collect rents or anything.

Quote:

Originally Posted by Offgrid Organic Farmer Yes, it looked bad in 2009. We had to file bankruptcy. Our tenants all lost their jobs and moved away. We had to carry mortgage payments from our savings, until we ran out of savings. Then the mortgage company foreclosed and sued us....

-ERD50