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07-19-2008, 03:32 PM
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#1
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Full time employment: Posting here.
Join Date: Jan 2008
Posts: 798
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Invest and Stop Working
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07-19-2008, 08:45 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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I would not stop working with a portfolio value of $400K at 34 years of age. The dividends from stocks may not be enough to support living expenses even if medical care is free.
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May we live in peace and harmony and be free from all human sufferings.
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07-20-2008, 07:42 AM
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#3
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Full time employment: Posting here.
Join Date: Jan 2006
Location: Boston
Posts: 620
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"Invest and Stop Working"
... and earn your living selling books about how you stopped working!
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07-20-2008, 08:00 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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1993 - I was canned which is a form of stop working - did not feel a screaming motivation to write books let alone read them - did not carry health insurance - had no idea of the risks I was taking - oh and slipped in a little temp work along the way.
Cheap bastardhood, a different period of history, and a buck was a buck back in 93( naner naner couldn't resist).
heh heh heh - er ah past performnace is is - well you know.
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07-20-2008, 08:38 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Location: North of Montana
Posts: 2,769
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Derek Foster is Canadian and some of his theories apply best here (no health insurance requirement). Here is a link to a Canadian site with a very long thread on his book: Financial Webring Forum :: View topic - Stop Working: Here's How You Can!
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
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07-20-2008, 11:06 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: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by kumquat
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Great link! I read page 1, and page 19 of 19. Thee folks are mostly not too enamored of Derek or his honesty.
It is easy to forget that even a moderate selling book can be a big help to low income or any retired person living on moderate capital. If you don't market the dream, you aren't going to find many buyers, so not so much help for the 'ol budget.!
Another thing that doesn't seem to be real popular about Derek is his taking advantage of some Canadian Child Support System.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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07-20-2008, 01:52 PM
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#7
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,126
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Quote:
Originally Posted by kumquat
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Just read through the discussion on the link - thanks.
Truth is he has an an income from multiple sources - his dividend paying portfolio, the Canadian government income support for children of low income parents, rent from a property he owns plus book sales.
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Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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The power of dividend growth
07-20-2008, 07:07 PM
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#8
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Recycles dryer sheets
Join Date: Apr 2006
Posts: 143
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The power of dividend growth
Dividend-growth stocks can pay off big over a period of many decades ( The Power of Dividend Growth).
One of the paragraphs in the book The Dividend Growth Investment Strategy: How to Keep Your Retirement Income Doubling Every Five Years is the following, which shows what half a century of compounding can do:
Quote:
In 1944 Anne Scheiber, a lifelong federal employee whose income never surpassed $3,150 a year--yes, the figure is correct!--invested $5,000 in blue-chip stocks. When she died in 1995 her stocks were worth $22 million--that figure is also correct!--and she was receiving an annual income of over $1 million in dividends from them. The Dividend Growth Investment Strategy tells how she did it and how others can invest long-term in stock for retirement income.
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Compounding works wonders when left to do its magic over a period of many decades (which is why it's important to start when one is young). It might be possible to retire on one's investment income after only a couple of decades when starting from scratch by using the strategy of LBYM and investing the rest intelligently (assuming good health and few family responsibilities). It may take others a decade or two longer, but it doesn't matter how long it takes once you arrive (i.e., the supermarket checkout clerk doesn't care how long it took you to be able to live on the investment income you are using to pay for your groceries).
The book The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich probably describes how many people on this list were able to FIRE. I was using the principles described in this book long before it was written because the book is about basic financial common sense. The book reinforced what I was doing and helped me steer clear of the "get rich quick" schemes (such as trying to time the market) that were a temptation when the market took its tumble after the dot-com bust.
Combining the approaches described in these two books should result in a winning strategy anyone can use to FIRE. I was able to FIRE using the "total return" approach (with managed accounts) described in the book Work Less, Live More. Now I'm putting fresh money into dividend growth stocks to get a margin of safety so that my FIRE situation is that much stronger (the current volatile market conditions are providing a strong motivation to stick to my plan, in addition to allowing me to buy good dividend growth stocks on the cheap).
The recently-published book The Ultimate Dividend Playbook: Income, Insight and Independence for Today's Investor describes what to look for in a good dividend-paying stock. I've found that investing $20 in a good personal finance book provides a very high ROI once its principles are digested and practiced (and one can raise that ROI even higher by borrowing these kinds of books from the local library).
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07-20-2008, 08:25 PM
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#9
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Full time employment: Posting here.
Join Date: Jan 2008
Posts: 798
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Quote:
Originally Posted by rogersteciak
Dividend-growth stocks can pay off big over a period of many decades ( The Power of Dividend Growth).
One of the paragraphs in the book The Dividend Growth Investment Strategy: How to Keep Your Retirement Income Doubling Every Five Years is the following, which shows what half a century of compounding can do:
Compounding works wonders when left to do its magic over a period of many decades (which is why it's important to start when one is young). It might be possible to retire on one's investment income after only a couple of decades when starting from scratch by using the strategy of LBYM and investing the rest intelligently (assuming good health and few family responsibilities). It may take others a decade or two longer, but it doesn't matter how long it takes once you arrive (i.e., the supermarket checkout clerk doesn't care how long it took you to be able to live on the investment income you are using to pay for your groceries).
The book The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich probably describes how many people on this list were able to FIRE. I was using the principles described in this book long before it was written because the book is about basic financial common sense. The book reinforced what I was doing and helped me steer clear of the "get rich quick" schemes (such as trying to time the market) that were a temptation when the market took its tumble after the dot-com bust.
Combining the approaches described in these two books should result in a winning strategy anyone can use to FIRE. I was able to FIRE using the "total return" approach (with managed accounts) described in the book Work Less, Live More. Now I'm putting fresh money into dividend growth stocks to get a margin of safety so that my FIRE situation is that much stronger (the current volatile market conditions are providing a strong motivation to stick to my plan, in addition to allowing me to buy good dividend growth stocks on the cheap).
The recently-published book The Ultimate Dividend Playbook: Income, Insight and Independence for Today's Investor describes what to look for in a good dividend-paying stock. I've found that investing $20 in a good personal finance book provides a very high ROI once its principles are digested and practiced (and one can raise that ROI even higher by borrowing these kinds of books from the local library).
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That sounds like very good advice to me.
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07-21-2008, 07:31 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by haha
Another thing that doesn't seem to be real popular about Derek is his taking advantage of some Canadian Child Support System.
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This is what happens when benefits are strictly means-tested for current annual income. Even young, able-bodied folks with substantial assets can suckle from the public teat.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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07-21-2008, 07:33 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: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by Alan
Just read through the discussion on the link - thanks.
Truth is he has an an income from multiple sources - his dividend paying portfolio, the Canadian government income support for children of low income parents, rent from a property he owns plus book sales.
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So..........a Canadien version of Suze Orman?? How trite.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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07-21-2008, 08:22 AM
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#12
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Full time employment: Posting here.
Join Date: May 2008
Posts: 546
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Couldn't see myself retiring with only $400,000 even without the free healthcare, it seems more people on this forum need closer to a million, even with social security and a paid off house.
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07-21-2008, 08:37 AM
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#13
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Recycles dryer sheets
Join Date: Mar 2006
Posts: 54
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Actually the $400,000 portfolio might work out for him. Why? In Canada dividend income is given a low tax rate, when you get down to the lowest tax bracket your tax credit becomes greater than your dividend. So Mr. Foster isn't paying ANY income tax. None, zero, zip, $0.
If I didn't have to pay any income tax and had a low cost of living this just might work. Not to mention that books sales I imagine has given him a nice buffer now. Likely he is closer to $500,000 for a portfolio.
__________________
Warming up to FIRE while trying to avoid the cold!
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07-21-2008, 08:41 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by Canadian FIRE
Actually the $400,000 portfolio might work out for him. Why? In Canada dividend income is given a low tax rate, when you get down to the lowest tax bracket your tax credit becomes greater than your dividend. So Mr. Foster isn't paying ANY income tax. None, zero, zip, $0.
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Nice loophole there. I don't fault someone for using legal means to "game the system" like this, but it does show that perhaps some laws and tax breaks/credits need to be tightened up a bit...
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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07-21-2008, 09:00 AM
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#15
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Full time employment: Posting here.
Join Date: May 2008
Posts: 546
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I understand it is probably acceptable for him, with a paid off house, a rental property, $0 taxes and free healthcare. I think it would be perfectly fine for me or anyone else to retire IN HIS situation. Most Americans, however, do not have even close to the situation that he has and it would be irresponsible to suggest that anyone can retire at age 34 with $400,000.
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07-21-2008, 09:36 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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In the first place, toss away 100k, us Americans are tougher, 300k is more challenging, I'm the only guy that could/did pull it off( a legend in my own mind), not recommended for anyone else - although a few posters here beat my all time 12k, one yr. budget.
'Do or do not - there is no try' Yoda
'Never tell me the odds' - Han Solo.
heh heh heh - Canadian woosie probably uses heat in winter. . 'Don't read books!' - unclemick.
BTW - retire on 300k - boy! I'd never try THAT again. All praise to balanced index and Mr Bogle.
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07-21-2008, 09:38 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by unclemick
In the first place, toss away 100k, us Americans are tougher, 300k is more challenging, I'm the only guy that could/did pull it, not recommended for anyone else - although a few posters here beat my all time 12k, one budget.
'Do or do not - there is no try' Yoda
'Never tell me the odds' - Han Solo.
heh heh heh - Canadian woosie probably uses heat in winter. . 'Don't read books!' - unclemick.
BTW - retire on 300k - boy! I'd never try THAT again. All praise to balanced index and Mr Bogle.
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In retrospect, you retired at perhaps the best time possible. From 1993-1999, you made an absolute killing in the market, but I am sure back in 1993, you were CERTAIN that would NOT happen.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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07-21-2008, 09:57 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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07-21-2008, 10:59 AM
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#19
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Recycles dryer sheets
Join Date: Dec 2007
Posts: 62
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Quote:
Originally Posted by unclemick
In the first place, toss away 100k, us Americans are tougher, 300k is more challenging, I'm the only guy that could/did pull it off( a legend in my own mind), not recommended for anyone else - although a few posters here beat my all time 12k, one yr. budget.
BTW - retire on 300k - boy! I'd never try THAT again. All praise to balanced index and Mr Bogle.
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Well unclemick, we are following in your cheap bastardhood footsteps. We 're around 40 and hope to make it 20 yrs until a reduced pension kicks in. We live on about 18.5k for a family of 4. It's all about defining what is enough for YOUR situation. WE can do this because we are very frugal and wanted DH home instead of working 60-80 hr weeks. We have a paid for house that we will sell if the market ever picks up, paid for cars, and pay for our own health insurance. If we need to do something for money again, we will.
Couldn't get to 12 k though, so you're still the king.
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07-21-2008, 11:26 AM
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#20
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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In the late nineties I used to live on about $700 a month (though health insurance was covered by employer). I have kept my old checkbook registers to remind myself that it can indeed be done. Off course back then sharing an apartment with a psycho roommate and some giant roaches did not faze me much... Income was $1283 net. Rent $320 a month. Food was around $150, Utilities about $70, About $160 cash to pay for miscellaneous (gifts, movies, etc...). No car for a long time, I used public transportation and walked to most places which is what I had done most of my life anyways (I got my first car when I was 24). I saved the rest. Would I do I again? Probably not, though those were pretty exciting years in my life. Could I do it again? yes, though I would rather live alone in a clean shoebox rather than the spacious roach-infested love nest I used to rent back then. Prior to the love nest, I lived in a 150 sq. ft. "apartment" ($200 a month rent, very very clean, no TV), and quite frankly if my wife ever left me, I could very well do it again. I kinda miss it sometimes. I do come from a long line of frugalistas though. Until her death last year my grand mother lived on less than $500 a month, saving almost half of her social security check each month. And her brother lived on even less that that claiming my grandmother was wasting money when she installed central heating in her house.
But living in a country that provides its citizens with a wide range of social benefits is definitely an advantage for the people who retire on less. I know a few people who retired early in western Europe with much less than a million dollar. Somebody with a 400,000 euros portfolio can generate an income of around 1350 euros a month (right on par with minimum wage). If you own your home and you are single, you can live a good but simple life on that amount in many parts of western Europe.
Such an income, in the countries I am more familiar with, is low enough to exempt you from taxes and to qualify you to receive a bunch of government benefits (you can get money to help you pay your rent, you can get money to help you raise a child, etc...). So if your not ashamed to play the system, your net income might actually be much higher than $1350. It could actually start to rival the average net income earned by working people with decent qualifications!
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