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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 11:46 AM   #41
 
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Re: How Much is Needed To Retire? (A Twist)

Quote:
I kinda feel discouraged, seeing that most folks who do ER are already multi-millionaires, which will be a long way for me. *Kudos to those who have made it.
It's hard work and luck. You work hard and because you work hard and good at what you do, luck favors you one day and you grab it and hang on for the ride. So you may think it's a long way today but it may not be that long tomorrow. Just one scenario to consider... OR if you are not into hard work, but into luck, there is the lottery. OTOH, if you are into hard work but luck avoids you.....so many things come to mind that it's hard to pick just one.

Seriously, I do believe in hard work if your goal is ER, without it you will be less prepared for luck when it comes calling.
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 12:09 PM   #42
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Re: How Much is Needed To Retire? (A Twist)

Well, the lotto is $280 million tonight
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 02:34 PM   #43
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Re: How Much is Needed To Retire? (A Twist)

Really interesting posts. A lot of y'all are swinging pretty heavy bats.

Mikey
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 02:59 PM   #44
 
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Re: How Much is Needed To Retire? (A Twist)

Re. "swinging heavy bats", not me. Man, I look at those
numbers and think "Damn! If I'd had half of that base
I could have retired at 40. My wife wouldn't be workin'
either". On the other hand, I have a great life, so........

John Galt
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 03:32 PM   #45
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Re: How Much is Needed To Retire? (A Twist)

Quote:

Be patient and keep the faith. *It could take you twenty years too. *You'll still be young. *You have a big advantage over me - I didn't know about any of this.

Thanks for the encouragement. We're still in 30's, so I guess time is on our side. Any folks (beside Unclemick) who ERed at under 1 m?
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 04:06 PM   #46
 
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Re: How Much is Needed To Retire? (A Twist)


I think we will.

After we've relocated and bought a home I can see us having $700K (post tax) left to live off - which works out at $30K p.a. for the next 65 years. Should cover the mandatory stuff, and our fun little hobby business (no TPS reports required) will cover the other stuff.
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 04:51 PM   #47
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Re: How Much is Needed To Retire? (A Twist)

Quote:
It's hard work and luck.
I'll second that. Be good at what you do, save like crazy, take calculated risks, and take advantage of any luck that comes your way.

Looking back at some decisions I made, I turned down three gigs that would have made me a multi-millionaire, and I left options on the table that would have been worth $1M+. Which just goes to show that you can blow it several times and still come out OK
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 05:08 PM   #48
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Re: How Much is Needed To Retire? (A Twist)

We have about $600k in income producing financial
assets plus a small business worth about $75k.

Lyn and I live very comfortably (to much so?) on
$21k SS plus $25k IRA withdrawal. The business
generated about $5k cash flow last year.

My IRA is worth more today than it was when I
retired at age 55 in 1989. That is after withdrawal
of about $470k through 2003. I figure the compound
annual return was about 8.7% during that time.

If not for the grace of God, the boom years of the 90s
and a small inheritance from Lyn's folks, we might be
eating alpo about now. OTOH, we are pretty flexible
and could have cut expenses a lot if necessary.

So far, so good.

Cheers,

Charlie
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 07:09 PM   #49
 
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Re: How Much is Needed To Retire? (A Twist)

Quote:
I guess if my wife and I kept slogging away at our well paying but soul destroying jobs for the next 20 years we could retire at 50 with multi-millions. I don't think we could bear it.
I don't think you should. Your souls are worth more than millions. Had we known about Trinity at the end of 1998, which is as close as I can tell the first time the portfolio hit $1m, we might have bailed there and then. I am prone to analysis paralysis, so it might have been another couple of years anyway and most everything would have paid off in any case.

Quote:
So, if the first mil is hard, how did you make the following ones so quickly? Just investment income starting to snowballl?
Some of it, yes. I knew nothing about investing until the late 90s. I screwed around, thinking I was smart, buying this, selling that, making basically nothing. If I had had even two neurons earlier, we could have passively ridden the bull market and made tons more before I got religion. We made nothing in the Internet runup but we lost nothing in the collapse. Since 2000, about $1m.

The rest was just a bunch of things that all paid off around the same time.

- We know zip about houses and we are not handy but we lucked into buying at two dead times in two different locales, hired competent people to reno them to our taste, and then had both markets get hot and vindicate both our choice of location and taste. Pure dumb luck. $700k.
- Both of our employers wanted to turn DB pensions into DC pensions at a time when interest rates were low. $250k.
- Employer got into hot water by buying another company which was (my opinion, y'unnerstan, cuz I worked in a different division) a borderline fraud. Nobody went to jail but the stock price went down 60% in a rocketing bull market. Owned stock, owned options, and we were sick to our stomachs. The great thing about a lower stock price is that, next time bonus time comes around, the stock and option grants have to be a lot bigger. If you can ride it out, you get to cash in. $250k.
- Education plus experience plus continuing ed plus doing what's required and on time gets noticed eventually. Our joint AGI grew 10x in 20 years. Our spending roughly doubled. We banked the difference. $500k.
- We maxed out 401ks and took the employer matches. Both of our employers had stock purchase plans, mine capped at 15% of gross, hers at 10%. We maxed those. We both worked with people who spent next January's bonus this September. We waited until January and banked it all. $400k.
- At most employers, you lose your stock and option awards when you leave. Ours both had provisions that awards survived being laid off, plus you got severance. A combo of luck (a recession) and engineering (quietly holding up your hand) and we were both laid off. $250k so far, another $50-100 still possible.

I don't know where the rest is from. I suppose it's things like washing Ziploc bags instead of tossing them, hanging clothes to dry on the cherry tree, using frequent flier miles to book business class tickets and then bunking with friends temporarily posted to Rome, having no or one car, telling the youngest that she should get a job if she wants a car, mowing my own lawn, contentedly using 5 year old computers and 10 year old software.
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 08:40 PM   #50
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Re: How Much is Needed To Retire? (A Twist)

Quote:
We have about $600k in income producing financial assets plus a small business worth about $75k.

Lyn and I live very comfortably (to much so?) on $21k SS plus $25k IRA withdrawal. The business generated about $5k cash flow last year.
Thanks Charlie! While it's interesting to hear from folks who have managed to accumulate millions, that's more of a reflection on their success at making money while they were employed. I'm interested in hearing more details from some of the folks like yourself who live very well despite the fact that they ER'd without the ironclad security of 1.5 million plus. That is a terrific accomplishment, and it provides hope to many who want to follow in your footsteps, yet aren't earning six/seven figure incomes. Congratulations!
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Re: How Much is Needed To Retire? (A Twist)
Old 07-02-2004, 09:26 PM   #51
 
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Re: How Much is Needed To Retire? (A Twist)

Quote:
We have about $600k in income producing financial
assets plus a small business worth about $75k.

Lyn and I live very comfortably (to much so?) *on
$21k SS plus $25k IRA withdrawal. * The business
generated about $5k cash flow last year. *

Charlie
Don't get me wrong. I'm happy for you. I admire you. I really do but some of us don't have the luxury of 21K SS in our 30s,40s or even 50s. So planning for a 30K-40K budget of which if only we have the SS cushion of 21K is a really BIG deal.
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 05:47 AM   #52
 
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Re: How Much is Needed To Retire? (A Twist)

I totally understand the thing about folks trying
to ER in their "30s, 40s, 50s" looking at that long wait
until SS kicks in, I went through it myself and managed
to fill in the gap with some part time work/consulting
and some luck. Now I am close enough to max SS
(less what they reduce me for dipping in at 62) that I
know I can make it no matter what happens in the
interim. Back when I ERed at 49 though, SS looked like
a pretty far off end of the rainbow.

John Galt
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 05:55 AM   #53
 
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Re: How Much is Needed To Retire? (A Twist)

Okay, apologize (again) for repeating, and I realize
I am unusual, but here it is. I "semiretired" ( meaning
working part time) in 1993 at age 49. I had a non-working spouse and a 10 year old at home. Our total
net worth was under $250,000. I did not use this as
my "trigger". I just wanted to do it and quit. In 1998
when I fully retired (after my divorce), my TOTAL net worth
was still well under $400,000. Have not done a lick of work since and have lacked for nothing.

John Galt
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 07:21 AM   #54
 
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Re: How Much is Needed To Retire? (A Twist)

Quote:
*Our total
net worth was under $250,000. *.... *In 1998
when I fully retired (after my divorce), my TOTAL net worth
was still well under $400,000. *
John Galt
O.K. I'll bite. Having just ER fairly recently, I'm still trying to figure out the financial side of thing (how to live on my established budget, investing for fixed income, etc. ah.. the whole ball of complicated wax). I'll admit that I would not have the nerve/savvy/know-how to 'pull the trigger' when my net worth was at your 1998 level let alone 1993.

So best I can tell browsing through some of your posts and do correct me if I'm wrong here because I'm relying on my memory and not going back to check the facts: You are risk adverse so you're not in the market. You have the money in the bank at 3% so that's approx. 12,000 annual income that you have to live on. I don't think I can do it at that income level but at the risk of missing something here I just have to ask. Thanks
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 07:35 AM   #55
 
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Re: How Much is Needed To Retire? (A Twist)

Few more things to the previous post: I'm with the gutless majority of 1M+ asset and have approx. 20+ years before SS if it still there for me to collect.
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 07:39 AM   #56
 
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Re: How Much is Needed To Retire? (A Twist)

Gosh anonx, I was hoping someone was paying attention. You get an A++ for asking that
question. First, all my money is not in the bank at 3%.
Far from it. Secondly, I have a working spouse. Thirdly, after my
divorce I worked/consulted for several years up until 1998. Fourth, the winding down of my small company
(which was not completed until after 1998)
produced much better results than anticipated, and
the assets owned by that company (now a small
holding company) produce a much better return than
anticipated. Still, the net worth numbers are accurate
and the reason they work is mostly due to cutting back
our total spending to about 25% of what it was
in the early 90s when I was married to my former spouse. Look at it this way. $400,000 at 4% is
$16,000 a year. Add the wife's salary and for us it's a walk in the park. But, I did it mostly with guts and luck. Not
for everyone I know.

John Galt
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 09:10 AM   #57
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Re: How Much is Needed To Retire? (A Twist)

I think I may have mentioned this before, but when
I "retired" in 1989 it was to a consulting job with the
same company that I set up before quiting. It pissed
HR so much that they changed the rules later but
grandfathered me. Anyway, the 1 year job continued for about 3.5 years before ending. It was like heaven
going from a high pressure mid-level manager job to
an individual contributor with little supervision.

It is another subject, but I think companies are very
stupid for not allowing persons like myself, who can
still produce, to "retire" gracefully, The "up or out"
philosophy has not been helpful to company morale
and loyalty.

Not knowing how long the job would last, I started
the 72(t) option after about 1 year. The "double"
income allowed me to enlarge and remodel my
laundromat. This business was generating about
$30k cash flow per year until the recent recession and
excessive competition killed the golden goose.

So that's the rest of the story (so far).

Cheers,

Charlie
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Re: How Much is Needed To Retire? (A Twist)
Old 07-03-2004, 02:37 PM   #58
 
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Re: How Much is Needed To Retire? (A Twist)

Hi Charlie! Your story is similar to mine in that I also
took a 3.5 year job after semiretirement. I would be doing it still except the company decided they wanted full time and I wouldn't do that. I've always felt that
a well located laundromat would be an excellent
investment. Now, the time has passed for me.

John Galt
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Re: How Much is Needed To Retire? (A Twist)
Old 07-29-2004, 02:20 PM   #59
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Re: How Much is Needed To Retire? (A Twist)

I was hoping we would get a few more data points, but here is what we have (or my interpretation of it anyway) comma delimited.

,Age,Spouse Age,Year,Post Tax Assets,Pre Tax Assets,Home,Spending,Other Inc,Net Spending,SS,Kids
Anon,49,44,2002,1000,560,0,40,,40,,
john galt,54,,1998,400,0,0,,spouse,,,grown
unclemick,49,,1993,50,300,40,21,22% work,21,,
anon3,58,,2004,97,385,115,24,9,15,17 at 62,grown
OK - I'll Bite,51,49,2004,1035,0,85,40,20 for 4,40,,
rsboone,51,57,2001,380,1700,750,60,health,60,,
Anon5,55,50,2004,750,500,247,33,,33,,grown?
anon5,41,,2003,1000,160,70,35,30 at ???,35,24 at ???,
anonimouse,33,32,2005,1100,0,0,30,,30,,none
okay here's data,49,48,2003,1000,1000,0,,23 at 55 COLA,,,
anonother,51,50,2003,900,800,300,82,36,46,,
anon511,46,46,2003,3500,1000,1000,80,,80,,some
Chuck-Lyn,70,,2004,675,0,0,46,,25,21,
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Re: How Much is Needed To Retire? (A Twist)
Old 07-29-2004, 02:32 PM   #60
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Re: How Much is Needed To Retire? (A Twist)

Here is the median response:

Age ER'd: 51 (Spouse 49)
Year: 2003
Assets: 900k post tax, 385k pre-tax, 70k home
Spending: 40k

Interestingly with all the arguments about withdrawal rate the median WR is only 2.6%, and only unclemick reported a WR over 5%. Also, with all the talk of extreme frugality, most people had $1-2 million, and several had significant other income.
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