Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 05-05-2010, 10:12 AM   #21
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
I would not RETIRE
I would downsize hours considerably and semi retire

If your business can be sold for 200k, I would ask this question
how much would you have to work for 8k per year?


$1.2M at 4% withdraw rate is $48k per year
however $1 M at 4% withdraw rate is 40k per year.

How much work would you have to do to take home 8k per year? That is about 700 per month?

My thoughts would be hire someone to do day to day business, and you take a cut of the profits, and eventually sell business to this person (later) in life.


How is the $1 M currently invested? Would retiring change this? If you could handle taking 3% of the money, with most of the investments in dividend paying stocks, I could see this lasting a long time (40-60 years).

The reason why most americans do not have $1 M is they do not save, and when they retire they live social security check to social security check for 30 years (age 65-death). That is a considerable downsize for most americans. I saw my grandparents do that, and its not a good thing IMO.

If your expenses of 3k per month (36k per year) are accurate, you can probably retire on the $1 M you have now, if the $1 M is invested right. The biggest risks you have are drawing the portfolio down too fast early in retirement (from either market going down, or your expenses being too high).
__________________

__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-05-2010, 10:18 AM   #22
Recycles dryer sheets
 
Join Date: Dec 2009
Location: Cleveland
Posts: 343
Quote:
Originally Posted by jakester View Post
i live in a townhome,i have no debt,,cost of living on east coast is about 3000 a month not including varying costs in daycare
If your expense are truly only $3,000 per month, then I think you can easily retire on that amount of money and feel safe about it.

You could defer Social Security till 70 and guarantee yourself the max monthly amount from that point till you die should you live really long.
__________________

__________________
skyvue is offline   Reply With Quote
Old 05-05-2010, 10:50 AM   #23
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
cash flow is one issue,,,and some solve that with products like annuties,,,they dont have the money anymore but are guareenteed income.
I have recently been presented with the oppurtunity to buy a small gym,,,it one of those 24 hr gyms,,,much smaller than typical golds,ballys,ymca,etc,,,,it s about 1.5 yrs old and they are making more than overhead w potential to grow,,,,
price may be 150,000,,,there is risk,,,,however,,this business does not require me to be involved more than a few hours a week,,,,unlike my current business that requires me to be there for every transaction
i dont think it s far off topic,,,,trying to figure how to retire or semi retire ,,,perhaps some here have experience w something like this
any income producing investment has an element of risk,,,dividend paying stocks can lose value too
__________________
jakester is offline   Reply With Quote
Old 05-05-2010, 11:40 AM   #24
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,677
I suggest you start exercising / taking care of your health now. Sitting around wilfing (look that up) is a lot easier than exercising or sticking to a diet. I think it is wishful thinking that once you have time, you will magically start taking care of your health. Look around and you'll see many retirees with all the time on their hands and bad life habits.

The time to build those good lifestyle habits is now - and doing it will also serve as an example to your child.
__________________
walkinwood is offline   Reply With Quote
Old 05-05-2010, 12:47 PM   #25
Full time employment: Posting here.
 
Join Date: Oct 2009
Posts: 943
Quote:
Originally Posted by jakester View Post
I dont comprehend that one cannot retire on an amount of money that 99% of the pop will never have. I m missing something.

Like someone else said, 99% of people don't retire early and 99.9% of those that do DON'T have a two year old child, and all the future expenses that raising and educating a child imply. Moreover, it is irrelevant what others do: what matters only is your specific set of facts.

While I can understand your desire to retire (and the fact that you have thought on it for 10 years) that pales in comparison to the obligation you took on by becoming a father. IMHO, your obligations to the child trump your desires to retire at this stage in your life. Your kid had no choice in being born, but you do...

Don't mean to be harsh, but kid outweighs rolling the dice on ER.
__________________
LARS is offline   Reply With Quote
Old 05-05-2010, 12:57 PM   #26
Recycles dryer sheets
 
Join Date: Dec 2009
Location: Cleveland
Posts: 343
Quote:
Originally Posted by walkinwood View Post
I suggest you start exercising / taking care of your health now. Sitting around wilfing (look that up) is a lot easier than exercising or sticking to a diet. I think it is wishful thinking that once you have time, you will magically start taking care of your health. Look around and you'll see many retirees with all the time on their hands and bad life habits.

The time to build those good lifestyle habits is now - and doing it will also serve as an example to your child.
I agree. I am actually worried my health will decline once I retire. Since I won't be getting up for work five days a week, I will be tempted to have a few extra drinks than I normally would. Plus, as one ages, i would think you begin to worry less about things like cholesterol and blood pressure when you know the end is insight anyway.
__________________
skyvue is offline   Reply With Quote
Old 05-05-2010, 01:09 PM   #27
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
disagree regarding exercise. I used to exercise regularly,including belonging to basketball league,riding bicycle 20 miles and racing the last 10,weights,etc,,,it s in me to do that,,,however,i no longer have the time nor energy to do that regularly.
Sometimes when i have free time I ll go hike a few miles or jog on the treadmill.
I m sure it s per individual,,,i ve witnessed people getting healthier and others detiorate,,i know in my heart,I would be healthier.
Regarding my child, we already have 12000 in her college fund. All my decisions include her.She will be taken care of.
__________________
jakester is offline   Reply With Quote
Old 05-05-2010, 01:40 PM   #28
Full time employment: Posting here.
 
Join Date: Oct 2009
Posts: 943
Quote:
Originally Posted by jakester View Post
Regarding my child, we already have 12000 in her college fund.
Estimate for four year public college (non commute, but state resident) is $160,000 for a kid matriculating in 2016: private would be substantially more (as may public given the need to hike tuition given state deficits-- think CA university system).

Still,without regard to compounding/returns of money saved that means you need to add to your $3,000 monthlt expense approximately $670 a month to "amortize" the cost of college, or a 22% increase in your monthly expenditures.

Personally, I would feel much better of my chances to ER if I had already funded a substantial portion of college expenses, seperate from my ER funds. YMMV...

FYI a college cost estimator: MEFA : Calculators and Tools : College Cost Estimator
__________________
LARS is offline   Reply With Quote
Old 05-05-2010, 05:44 PM   #29
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
Ok,there are many opinions but I think the distilled collective advice is to work part time,,,two days a week.
I thank you for your advice.
today our weather was about 80 degrees,clear blue skies with a light breeze,,,sure wish i wasnt working today
J
__________________
jakester is offline   Reply With Quote
Old 05-05-2010, 07:39 PM   #30
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,619
Quote:
Originally Posted by walkinwood View Post
Sitting around wilfing (look that up) is a lot easier than exercising or sticking to a diet.
Is there any other way to surf the web?

Of course you could always approach it this way:
Attached Images
File Type: jpg Workplace treadmill.jpg (18.9 KB, 0 views)
__________________
Nords is offline   Reply With Quote
Old 05-05-2010, 07:47 PM   #31
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,677
Quote:
Originally Posted by Nords View Post
Is there any other way to surf the web?

Of course you could always approach it this way:
I wonder if his efforts on the treadmill power the computer. That would be productive surfing or maybe just internet walking.

I heard the word "wilfing" just last week for the first time.
__________________
walkinwood is offline   Reply With Quote
Old 05-05-2010, 08:22 PM   #32
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 242
Can you retire with your 1.2M and then experience a 2008-2009 market drop? Where your 1.2M goes to 300K? That's what happened to me - I panicked, applied for a couple of jobs (didn't get them), and now have come out the other side, realizing that, even at that level, I can make it without a terrible sacrifice. You must own your property outright or rent cheaply, have catastrophic health insurance (for now), own your vehicle outright and you must be able to lower your monthly expenses if needed. I'm now at 1999 levels and am finally realizing that I'm okay and don't have to have a job.

However, I've spent a tremendous amount of time panicking and worrying if I needed to get a job or not. I made a huge move and renovation in 2006 and spent a lot of time regretting my actions.

Not sure I'd wish that on anyone.
__________________
Sparky is offline   Reply With Quote
Old 05-06-2010, 07:42 AM   #33
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
i m own my home outright,,,owe nothing on my 2008 honda,,,my portfolio is conservative
when i asked the same question on morningstar investor site,the majority think i can do it,,,,
reminds me of what some have said,,,,something like if you wait until all circumstances appear perfect/secure you may never get there
another perfect weather day here and i m off to work
__________________
jakester is offline   Reply With Quote
Old 05-06-2010, 08:35 AM   #34
Recycles dryer sheets
 
Join Date: Jun 2007
Location: Oklahoma City
Posts: 275
I would sell the business the moment I had a good offer and try the ER for a year. Get in shape -- and see where I was then -- A year or two would shed light on whether I could truly live on the 3k / year.

I wish you the best.
__________________
USAF Veteran -- Retired Air National Guard -- OSW -- ONW -- OIF
militaryman is offline   Reply With Quote
Old 05-06-2010, 08:41 AM   #35
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 994
How about retiring and moving. In the Midwest you could get down under $2000 a month for the cost of living. In the Midwest most people have less than you do now. Houses in a good safe neighborhood can go for as little as 50k. House taxes start at about 1k.
__________________
Proverbs 15:22 Designs are brought to nothing where there is no counsel: but where there are many counsellors, they are established.
rec7 is offline   Reply With Quote
Old 05-06-2010, 08:52 AM   #36
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by jakester View Post
Ok,there are many opinions but I think the distilled collective advice is to work part time,,,two days a week.
I thank you for your advice.
today our weather was about 80 degrees,clear blue skies with a light breeze,,,sure wish i wasnt working today
J
I'll agree with the "distilled collective advice" on part time work. You may be able to go part time with your current job while discover what you will do with the extra time. You might quit entirely for a year or two then look at the part time possibilities. You might sell the business and go directly to part time. Any of those are possibilities, which would work for you depends on your unique mix of skills.

I'll also agree that if the $3,000/mo is realistic (it might be for me, depends on medical costs) then you should be okay on $1.2 million. I'll disagree college costs need to be huge. If you you're comfortable paying tuition and books only at a public college, that shouldn't be a big hit to your nest egg.
__________________
Independent is offline   Reply With Quote
Old 05-06-2010, 07:02 PM   #37
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
i state 1.2 mm not including that my home is paid for,,,,it s current worth is 250K ,, cant i include that as potential cash in the future
__________________
jakester is offline   Reply With Quote
Old 05-06-2010, 07:12 PM   #38
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,156
Quote:
Originally Posted by jakester View Post
i state 1.2 mm not including that my home is paid for,,,,it s current worth is 250K ,, cant i include that as potential cash in the future
Not unless you're willing to sleep in a cardboard box in the alley. If you sell the house, you will need to pay rent. Using a 4% SWR, $250k will support cash flow of $10k per year or $833/mo. for rent (although you could probably redirect your property tax to rent as well).
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 05-06-2010, 07:17 PM   #39
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
i believe as a reverse mortage banks have option to pay you a lump sum in full and allow you to live there until you die,,,that in addition to 1.2 mm current and hopefully skillfully invested
__________________
jakester is offline   Reply With Quote
Old 05-06-2010, 07:31 PM   #40
Dryer sheet wannabe
 
Join Date: Jun 2005
Posts: 21
question
if you had to chose between having lots of free time between age 50-70 or being broke between ages 70-90
which would you chose
sorry if question is morbid
__________________

__________________
jakester is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 10:38 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.