Nice Article on Early Retirement! Debunking Top 5 Myths

[Freedom56]

Today from Marketwatch.

https://www.marketwatch.com/Story/wh...of2&yptr=yahoo

The comments to this article from early retirees were pretty impressive.

[ExFlyBoy5]

I didn't read the entire article, especially since it's a "Marketwatch" piece (which I really don't hold in the highest regard).

I did glance at it and saw that it is yet another regurgitation of a FIRE blogger's blog entries. I also couldn't help but notice a couple of things...

Quote:

For near the entire year of 2016, I worked closely with J$ as his primary technical resource. I built out the entire Rockstar Directory from scratch (with J$ delivering the vision, of course). Today, I manage the operational side of Rockstar Finance after ESI Money bought Rockstar Finance, and I couldn’t be happier. [ESI Money columns also appear on MarketWatch.] YouTube channel. My wife and I spend time running a growing YouTube channel. I’m the one filming the majority of the videos, and I’m also the guy who edits the videos and puts together the final product. Our talking videos only take about 30 minutes to edit, but hiking and exploration videos can take hours to edit with music. It’s fun, though!

And his wife does "passion projects"...I guess this is a new phrase for "side hustle"...which I call "part time j*b".

Call me the retirement police if you will, but this isn't my idea of being retired.

[Texas Proud]

I saw that awhile back and thought the same thing... they did not retire but found a job that they really like... no problem in that, but do not call it retirement...




NOW, if they did everything they do now but without the IT stuff, the youtube channel etc. then they would be retired...

[REWahoo]

Quote:

Originally Posted by Texas Proud I saw that awhile back and thought the same thing... they did not retire but found a job that they really like... no problem in that, but do not call it retirement...

And they spent a significant part of the article defending that, saying you can work and be retired, too - if your work isn't a "job".

Whatever floats your boat.

[Freedom56]

Read the comments to the article at the bottom. It sounds a lot like this forum.

[ExFlyBoy5]

Quote:

Originally Posted by Freedom56 Read the comments to the article at the bottom. It sounds a lot like this forum.

Nah, can't bring myself to read comments. It's usually way too painful.

[Red Badger]

Quote:

Originally Posted by ExFlyBoy5 I didn't read the entire article, especially since it's a "Marketwatch" piece (which I really don't hold in the highest regard). I did glance at it and saw that it is yet another regurgitation of a FIRE blogger's blog entries. I also couldn't help but notice a couple of things... And his wife does "passion projects"...I guess this is a new phrase for "side hustle"...which I call "part time j*b". Call me the retirement police if you will, but this isn't my idea of being retired.

+1.
Not a fan of MW.
Nothing against doing what you enjoy for income in lieu of being pimped by a corporation, but ya ain't retired.
The blanket statements don't help either; "your going to spend more in retirement." Many do not.
All that said, at least it wasn't another article dissing us and suggesting we're all impoverished, starving louts seeking a return to the safety of a paycheck. Disclaimer - - - while not starving, DW might suggest that we are now impoverished since there is no paycheck hitting the bank at the end of each month.

[Red Badger]

Yeah, the comments were refreshingly positive. Kinda caught me off guard.

[Offgrid Organic Farmer]

Everyone has their own idea of what a perfect retirement should look like.

I have a pension, We spent our portfolio to buy a farm. We live with zero debt. Our home is powered by Solar-power, our monthly expenses are very low. We raise chickens, pigs and honeybees. My wife and/or I sit at a Farmer's Market once a week offering pork, maple, honey, etc.

If we stopped all farming efforts we would be fine just living on my pension. But since we produce 99% of our food, our COL would go up if we suddenly had to start buying groceries.

Each of us has an ideal retirement picture in our minds. Those pictures look a lot different from one person to another person.

[Freedom56]

Quote:

Originally Posted by Offgrid Organic Farmer Everyone has their own idea of what a perfect retirement should look like. I have a pension, We spent our portfolio to buy a farm. We live with zero debt. Our home is powered by Solar-power, our monthly expenses are very low. We raise chickens, pigs and honeybees. My wife and/or I sit at a Farmer's Market once a week offering pork, maple, honey, etc. If we stopped all farming efforts we would be fine just living on my pension. But since we produce 99% of our food, our COL would go up if we suddenly had to start buying groceries. Each of us has an ideal retirement picture in our minds. Those pictures look a lot different from one person to another person.

We didn't go off-grid but installing solar panels was one of the best investments for our situation. We were paying about $320 per month on average for electricity (mostly in the summer months due to A/C usage). We installed a 5.38 KW solar grid tied solar system with net metering (22 Kyocera panels and 22 micro-inverters) back in 2012. It generates just over 10 megawatts of power annually. The system cost us $23K and we received a $1800 rebate from Edison (our power company). With the 30% tax credit, our net cost was just under $16K. We also changed all our interior lighting to LED (from Ebay and Amazon) and installed a variable speed pool motor. That cost us an additional $620. For the last 5 years we have been receiving a check for about $90-$120 annually as our power consumption is below what we generate. So the $16.6K investment that would yield about $166 per year in a savings account was saving us about $3830 annually on electricity bills. You can't get that kind of return from the market. The system paid for itself after 4.5 years and we continue to eliminate our electricity bill and have no exposure to increasing electricity rates. The panels have another 15 years of life.

[scrabbler1]

The comments are better than the article. That includes the comments here, of course.

[Texas Proud]

Quote:

Originally Posted by Freedom56 We didn't go off-grid but installing solar panels was one of the best investments for our situation. We were paying about $320 per month on average for electricity (mostly in the summer months due to A/C usage). We installed a 5.38 KW solar grid tied solar system with net metering (22 Kyocera panels and 22 micro-inverters) back in 2012. It generates just over 10 megawatts of power annually. The system cost us $23K and we received a $1800 rebate from Edison (our power company). With the 30% tax credit, our net cost was just under $16K. We also changed all our interior lighting to LED (from Ebay and Amazon) and installed a variable speed pool motor. That cost us an additional $620. For the last 5 years we have been receiving a check for about $90-$120 annually as our power consumption is below what we generate. So the $16.6K investment that would yield about $166 per year in a savings account was saving us about $3830 annually on electricity bills. You can't get that kind of return from the market. The system paid for itself after 4.5 years and we continue to eliminate our electricity bill and have no exposure to increasing electricity rates. The panels have another 15 years of life.

Interesting... I have a curiosity question... what happens if the power grid goes out?


Does your system automatically disconnect from the grid but continues to provide you with power?



Does it provide enough to run the AC by itself?


Have you thought about a battery such as Tesla wall unit to cover night time power outages?


I do not have enough sun to have solar and I am not sure I would buy one anyhow... my bills averaged less than $100 a month the last couple of years and with a rate increase about to happen will be about $120... so does not make any sense to my situation... OH, also I do not think the tax credit is refundable so I would also lose that...

[Offgrid Organic Farmer]

Quote:

Originally Posted by Freedom56 We didn't go off-grid but installing solar panels was one of the best investments for our situation.

Yes, Solar-Power can be one of the best investments you can make.

Quote:

... We installed a 5.38 KW solar grid tied solar system with net metering (22 Kyocera panels and 22 micro-inverters) back in 2012. It generates just over 10 megawatts of power annually. The system cost us $23K and we received a $1800 rebate from Edison (our power company).

You can buy systems that are all pre-wired in a box and UL-tested. In my area 'net-metering' has a lot of additional layers of restrictions in place, which make those systems significantly more expensive, than off-grid systems with battery-banks.

Quote:

... With the 30% tax credit, our net cost was just under $16K

Off-grid solar-power systems also get to take advantage of the tax credits.

Quote:

... The system paid for itself after 4.5 years and we continue to eliminate our electricity bill and have no exposure to increasing electricity rates.

The IRS wants for you to depreciate your system out over 7 years. Whatever you spent to install your system you can write-off 1/7 of that cost each year. So the longest that any individual 'pay-back' could be, should be something less than 7 years.

Quote:

.... The panels have another 15 years of life.

Photovoltaic panels do not 'die' after 15 years. It is generally estimated that after 20 years of service their power generation will be reduced to 80% of what they made new. So your system should still be producing power even after 50 years.

One of our neighbors installed his system in the mid-1980s, that system is still functioning. It produces a bit less than what it did in 1980, but he seems very happy with it.

[Freedom56]

Quote:

Originally Posted by Texas Proud Interesting... I have a curiosity question... what happens if the power grid goes out? Does your system automatically disconnect from the grid but continues to provide you with power? Does it provide enough to run the AC by itself? Have you thought about a battery such as Tesla wall unit to cover night time power outages? I do not have enough sun to have solar and I am not sure I would buy one anyhow... my bills averaged less than $100 a month the last couple of years and with a rate increase about to happen will be about $120... so does not make any sense to my situation... OH, also I do not think the tax credit is refundable so I would also lose that...

If the power goes out on the grid, the inverters shut down. During the day, I gererate excess power and it goes to the grid. At night I draw power from the grid. The rates are high and even higher now in Southern California. I didn't consider batteries because of additional costs. Power failure events are rare where we live. We have had one in the last 2 years that lasted more than 1 hour. The pool and spa consume most of our energy. Right now electricy is free, so I'm not considering any other options.

[Freedom56]

Quote:

Originally Posted by Offgrid Organic Farmer Yes, Solar-Power can be one of the best investments you can make. You can buy systems that are all pre-wired in a box and UL-tested. In my area 'net-metering' has a lot of additional layers of restrictions in place, which make those systems significantly more expensive, than off-grid systems with battery-banks. Off-grid solar-power systems also get to take advantage of the tax credits. The IRS wants for you to depreciate your system out over 7 years. Whatever you spent to install your system you can write-off 1/7 of that cost each year. So the longest that any individual 'pay-back' could be, should be something less than 7 years. Photovoltaic panels do not 'die' after 15 years. It is generally estimated that after 20 years of service their power generation will be reduced to 80% of what they made new. So your system should still be producing power even after 50 years. One of our neighbors installed his system in the mid-1980s, that system is still functioning. It produces a bit less than what it did in 1980, but he seems very happy with it.

When we installed the system in 2012, the 30% refundable tax credit was applied to the entire amount less rebates on our 2012 return. There was no depreciation expense for us after that. I calculated my break-even based on my net capital expenditure divided by my nevious annual bill for electricty. The warranty on my panels are 20 years. I'm 5 years into my warranty. I expect these Kyocera panels will last much longer. I also expect panels will be much more efficient in 20 years.

[Freedom56]

Quote:

Originally Posted by Freedom56 When we installed the system in 2012, the 30% refundable tax credit was applied to the entire amount less rebates on our 2012 return. There was no depreciation expense for us after that. I calculated my break-even based on my net capital expenditure divided by my nevious annual bill for electricty. The warranty on my panels are 20 years. I'm 5 years into my warranty. I expect these Kyocera panels will last much longer. I also expect panels will be much more efficient in 20 years.

Here is my energy generation history so far.

[PoorOldCountryBoy]

Payback on solar is usually 7-15 years if done right. Crystalline photovoltaics last 50+ years with a slow degradation curve (1980's arrays around my area in New England are at 90 to 95% of their original output).
We have a passive solar home that is 78 degrees when it is sunny in February, and a solar hot water system in service since 1985 that works wonderfully. Installing PV cells have been an issue due to the architecture of the house and upgraded snow load guidelines, but the breakeven here would be 12 years roof mounted and 17 years ground mounted (we have no good place to do this option so have declined up to this point.). That and possible move to a sun belt state is holding us back.

[Offgrid Organic Farmer]

Quote:

Originally Posted by Freedom56 When we installed the system in 2012, the 30% refundable tax credit was applied to the entire amount less rebates on our 2012 return. There was no depreciation expense for us after that.

If you were to hire an accountant, they may insist that you do a depreciation table.

Quote:

... I calculated my break-even based on my net capital expenditure divided by my nevious annual bill for electricty. The warranty on my panels are 20 years. I'm 5 years into my warranty. I expect these Kyocera panels will last much longer. I also expect panels will be much more efficient in 20 years.

That is possible.

[Texas Proud]

Quote:

Originally Posted by Offgrid Organic Farmer If you were to hire an accountant, they may insist that you do a depreciation table. That is possible.

If you do not have a business you do not have a depreciation table...

[Offgrid Organic Farmer]

Quote:

Originally Posted by Texas Proud If you do not have a business you do not have a depreciation table...

I have always filed Schedule Cs, Es, and Fs. Even during my 20-years on Active Duty. So I may tend to just assume that everyone else does that also.

My bad.