When did you see the light?

[astromeria]

I didn't have a clue about FI or investing, let alone RE, until my neighbor mentioned the new book she was reading: "The Millionaire Next Door."

 

[Danny]

http://wokeuptoday.blogspot.com/2007/03/my-early-retirement-role-models.html

 

[unclemick]

Parents premanently scared by the Great Depression.

Circa 1957 my Dad inherited some mutual funds from an Aunt(aka the Swedish maid) - he promptly sold those 'evil stocks' and bought a house 'in town with sidewalks'.

A maid who obviously made way less than my Union card, big bucks earning log train mechanic father. I went to the library and got a book on mutual funds - the start of enlightenment.

And we watched Ozzie and Harriet in black and white while getting well in the post WWII age. Took years before I could eat Swanson TV dinners again - big once a week treat then.

Parents always squirreled away money(never stocks) in case the shoe should drop and the good times end.

1966 - first year out of college - started buying mutual funds and stocks.

heh heh heh heh - still like Ricky Nelson over Elvis.

 

[brewer12345]

Growing up, we hadn't a care in the world for money. Dad was a very successful entrepreneur and while we didn't live particularly extravagantly, there was plenty to go around. For my parents' 25 anniversary, they and all 4 of us kids spent two weeks in Hawaii. Dad was and remains very conservative about money and we learned little or nothing about managing money.

When I got out of school I worked several sh!t jobs for people who were beneath me. DW and I ended up crashing at my parents' house for almost two years after barely making it for a while. This allowed us to save up enough to buy a condo. Once we bought the place, we had gotten into the savings mode. About that time I had had it with sh!t jobs (oh, the stories I could tell you...), so I began to wonder "is this it?" We didn't and don't care about consumer crap. Not long afterwards, I stumbled across john greaney's site and the light went on. That was at about age 26.

 

[Danny]

http://intelligentspeculation.blogspot.com/2007/03/retiring-early-taping-your-irs-early.html

 

[brewer12345]

I've been having this nagging question for John though...I think I remember he had a truckload of Dell - maybe 100% of his equity position - he had gotten it so very very cheap that he wasn't worried about fluctuations - maybe it was the reason he could er so young - 30s? - I want to know if he still has that one egg in his basket...

Presumably you could ask him directly. AFAIK, he has never bothered to sell any of it. His cost basis is like a dollar a share, and his withdrawal rate is a miniscule proportion of the max SWR, so I think he is unlikely to ever sell.

 

[Danny]

Presumably you could ask him directly. AFAIK, he has never bothered to sell any of it. His cost basis is like a dollar a share, and his withdrawal rate is a miniscule proportion of the max SWR, so I think he is unlikely to ever sell.

Yeah I guess I can ...I'll send him a message...

 

[astromeria]

I believe John Greaney has mentioned pharmaceutical stocks as well as Dell. He also lives WAY below his means (~2% WR IIRC, maybe less).

He was an additional inspiration to me, but I didn't discover him till I was already semi-retired. It was through his Motley Fool board that I found this place. (I let my subscription to the Fool lapse--I kinda miss those guys, though the politics wore on me and I was reading too many different boards over there--stressful and time-consuming.)

 

[Scrooge]

heh heh heh heh - still like Ricky Nelson over Elvis.

Hey, Ricky will be forever remembered for the one good movie that he was in, which is more than can be said about Elvis!  

As far as Rich's question goes, I'll recycle a part of my first post on these forums:

I wasn't always my current frugal self, I was actually quite the free spender 20 years ago. My money management skills were poor to non-existent and I was more interested in liberal arts pursuits than anything else. I ended up with a science degree almost by accident and stumbled into the IT field also by accident. I wasn't really interested in my work in my early 20s, it was just a way to make a living and finance my -- in retrospect unwise -- spending decisions and various self-imposed obligations.

Naturally, I had a rude awakening in a couple of years when I found myself on the verge of losing my job and no money in the bank to fall back on. That turned out to be a very good thing since it made me think about my finances and get rid of the obligations that I had accumulated. It also made me work harder and pretty soon I discovered that I was enjoying my work. Over the following 15 years I was a borderline workaholic, traveling all over the country, sometimes working up to 100+ hours/week and sacrificing social life for the sake of my career. I didn't make the millions that some IT people made in the late 1990s, but then again I dind't lose my shirt or have a heart attack like some other people that I know did. Granted, it irks me some that I am making $100K while my customers are paying my employer $300-500K for my services, but overall I have no regrets.

Another good thing that happened to me when I was around 25 was a revealing experience that I had when I was given an unexpected 20%+ raise. I remember studying my checkbook a few months later and wondering where all that extra money had gone. Apparently, my spending habits automatically adjusted themselves to accommodate the raise. It was quite a revelation at the time, although now it seems obvious.

The next day I went out and bought a ledger. I entered every single expense that I incurred over the next two years into that ledger and pretty soon I knew exactly where my money was going. (I still have that ledger and in a way it reads like a diary). Next I put myself on a budget, which proved to be more painful than I had anticipated, but by and large I managed to stick to it. Soon I noticed that my bank account was -- for the first time in my life! -- growing. In a couple of years I had $25K in the bank, bought a house, began contributing to 401k and, most importantly, kept my spending flat while my income was rising. Here I am, 15 years later, almost able to retire at 40, something that I would have never thought possible in my 20s.

I should also note that my existence hasn't been exactly Spartan, I just tried to be smart about which ones of my interests I pursued and how I pursued them. For example, I spent 9 days in Hawaii (all 4 major islands) a few years ago and the whole thing cost me under $1.5K. I drive a reliable, safe and roomy mid-size sedan, but I paid only $17K for it and not $25K+ that my make/model usually goes for. I had done my homework, knew what I wanted, didn't need any of the options, waited for a manufacturer rebate, set up automatic e-mail notifications for that exact configuration and so on. I'll drive it until it falls apart 15 years from now.

 

[justin]

I probably got the light while in utero. I can't remember a time when I didn't save some or most of what little money I received through gifts, allowance or earned income.

When I figured out the secret of "interest", it clicked for me. You mean someone will actually pay you every month just to keep your green paper for you? What a revelation for a little kid in elementary school.

I think I've always been pretty lazy when it comes to hard work. I figure I'd rather have my money working for me instead of wasting it away.

When did the idea of FIRE as a goal in life get crystallized in my mind? Probably either paper route I had at 11 ($30/month for all this hard work? Gotta be an easier way!). I know for certain that at 16 (in 1996) when I worked at a sub shop for $5.25/hr, I had budgeted out what it would cost to live (in my naive mind) and how much I would need to save to provide a stream of interest payments sufficient to live off of (I think I estimated around $800/month or $9600/yr). I figured I could skip college and work at the sub shop forever and still bank a good bit of my pay, slowly getting richer.

Good thing some of my friends went to college and I thought it would be fun (and potentially very rewarding) too.

So, age 16. Since then it has been a goal to do things that will enhance my long term net worth while enjoying a reasonable quality of living in the meantime.

 

[CCdaCE]

I remember my Grandpa helping me count change as a kid.  He, or my parents opened up a savings account.  He'd bring me to the bank whenever I had a "substantial" sum of $20 or $50 or whatever.  He was always telling me stories about how he made money as an early teen during the depression.  That must of sunk in.

I had over $10k ratholed as I graduated high school.

By the end of college, that was gone.  But, I had an education for it, and more.

So, I got a job at 24-ish.  Wondered what to do with "all this money".    Go from living on $7k/school year to having 3 or 4 times that!  Then get raises, overtime, etc.  Whew, I was awash in cash!  Or so it seemed.  So I started reading books on the Market on my own.  I guess that was the eye opener.  If I save now, I can play later.

My parents always encouraged saving, but were sparse on details.  Of course, Grandpa always stayed away from that "gambling" sort of thing called the Market.  After working five years, it'd be nice to be able to pull the plug on a job long into the future, if I wanted to.

I figured if I wanted to buy something or retire, I'd need some cash.  After starting a Roth and buying a house and all the other cash intensive stuff, it's nice to see the assets accumulate.  

I don't know if my wife gets the same satisfaction, but it's working out so far.  This thread may help me understand what it takes to convince her.

-CC

 

[uncledrz]

RIT
This is a good question.

When I left the safety of the Federal Government and went out on my own, it quickly became apparent that if I didn't do it, it wouldn't get done. That goes all the way from paper clips to health insurance to retirement. So we LBOMs and started saving/investing right then for house/college/retirement.

Nothing like a few weeks without any income to teach you that a cushion is a nice thing to have!

Uncledrz

 

[MasterBlaster]

Well probably what motivated me was that my father was laid off from a good paying job when I was just a freshman in high school. My father made good money but spent it all. They had very little savings and some relatively big debts. My father was out of work for eight months. The finances were a disaster and we almost lost the house.

That had a tremendous effect on me and I have always been a saver all of my life. I never ever want to go through what they went through.

So I saved and invested and saved and invested. Fast forward 25 years and now I'm worth some real money. I have stepped up the spending over the years and we live a very comfortable but quiet lifestyle that we enjoy. As others have posted on this forum, I feel that the more money that I have the less I want all the cars/stuff/fancy clothes etc. Once you decide that you don't need all that junk It's pretty easy to sock alot away and not feel deprieved at all.

Megacorp has those golden handcuffs making it really worth while to hang on for another 5 years or so to make their early retirement date. My job is not stressful, it is work, but I enjoy it. My thinking right now is that I really don't want to not work. If they'll have me I may just keep working beyong Megacorps minimum retirement date.

As I have posted before on a number of occasions, My work attitude really changed when I figured that I had enough money to hang it up if I wanted to and live our modest lifestyle. The boss wasn't a jerk anymore, the co-workers weren't idiots anymore. I accepted and am now thankful that I would never be promoted to the corner office with all its issues. Really - Life is good and I am thankful for everything that I have.

When I have some days off we sometimes go over to one of the local coffeehouses. There are some early retirees that made money in real estate investments and hang out at the coffee house. I do not envy them and hope that my life has more to it than playing checkers/chess all afternoon.

 

[Cal]

I came from a working class (not quite middle class) family. Every relative (if they worked) had a blue collar job. The "good" ones lived paycheck to paycheck and paid their bills on time, the rest were always running/hiding from various debt collecters. My only "rich" relatives were my paternal grandparents. They were "rich" because their entire savings consisted of $12,000.

The upside to this background is that I never developed any "expensive tastes". I am quite content living a rather frugal lifestyle although in my early twenties I did get caught up playing "keep up with the Joneses". Had a negative net worth all thru my 20's and expected to work until I died or could subsist on social security (like the rest of the family did).

About six years ago, I was going thru the meat grinder at megacorp. Very high stress job, good position, good money. Megacorp decided to close the division I was at and dangled huge "stay bonuses" if people stayed until they were paroled laid-off. There were a few great results from this that made me "see the light":

• Hated working for megacorp and all the political BS. Vowed to get next job outside of megacorp even if it meant a substantial pay cut
• Was able to pay off all outstanding debt with bonus
• Decided to travel for a year before returning to the workforce. If I was going to have to work until I croak, especially if I was going to be taking a pay cut, I was going to enjoy some time off while I was still "young"

Obviously, at the time, the idea that I should invest that lump sum instead of blow it on travel never occured to me. Nobody in my family had even gotten such a large "windfall".

I spent most of the time in Australia and while traveling, I was extremely frugal because I was trying to make the money last as long as possible. This was where I first experienced that I could be perfectly happy while living an extremely frugal lifestyle.  

When I came back to the states and started looking for a job, I stumbled across "Your Money or Your Life". It gave me a new way to think about money, spending my time versuses spending my money and just opened up a whole new perspective for me. I had deliberately chose to settle in an area with decent public transportation so I wouldn't have to buy a car. I've been a real zealot this past few years with my savings, but at the same time, I don't feel deprived. Every dollar I squeeze into my savings account is cutting off the time I have to sell my soul at a job. And that peace of mind - that someday I will be able to say hasta la vista to my job- is absolutely "priceless".

 

[justin]

Yeah, I went through the experience of my sole breadwinner father being laid off in the mid/late 80's from the textile mill. He spent six months unemployed, doing contract work out of town, or living out of town searching for work. It was a pretty stressful time for the family (even though I was 7-8 at the time, I still remember it pretty well). Didn't see my father much during that period and we ended up "homeless" for a while between houses (living in a pull camper in a state park) because we really didn't have the money for a lot better accomodations at the time.

I don't want that to happen to my family if things get bad in our present-day economy and layoffs occur.

 

[peggy]

I always knew the value of savings - my parents were Depression-era kids (Dad born 1929; Mom born 1938) and the concept of saving was hugely important to them and to me throughout my life.

The big difference is that, like many of their generation, they were reluctant to invest those savings in the stock market. Mom made up for that a little by chasing interest rates, etc., but they got started investing too late (and of course Dad had a minor case of get-rich-quick fever back in the 1980's, which didn't help) to ever be truly wealthy.

So I always knew that I needed to save a good chunk of what I made for a rainy day. Then in the very early 1990's, I read YMOYL and the concept of financial independence was like a 2x4 to the brain. Yes, I thought. I can do that.

As I expanded my reading in finances, the concept of early retirement just took hold. Took a bit longer to convince DH of the idea, but we've been actively working toward FIRE since the late 1990's.

 

[Nords]

My thinking right now is that I really don't want to not work.

There are some early retirees that made money in real estate investments and hang out at the coffee house. I do not envy them and hope that my life has more to it than playing checkers/chess all afternoon.

I must admit that I take exception to your characterization of the lifestyle.

First, if you want to work then work!  Especially if you'll be paying Social Security & Medicare taxes!!  However I'd hope that you'd be working at your avocation instead of just for the purpose of imposing some structure on your life.  If you can't believe that you're getting paid to have so much fun, then work as long as you want... if you need the commute and the office environment to feel that your life is has a purpose and is worth living, then there may be a problem.

Second, there are times I whinily wistfully look back to my office days when I could be entertained with shipmates & sea stories, a few meetings, a workout, a good cup of coffee, and an hour or two teaching in the classroom.  Once in a while I'd have to read e-mail and make a few decisions.  Those rose-tinted times seem especially attractive when today you have eight feet of surf to contend with*, tae kwon do, overdue car maintenance, a mango tree to prune, sewing, books to read, insurance paperwork to review, and three weeks of bills to catch up on.  Then I remember all the crap I had to put up with to achieve that few hours of office nirvana, and suddenly the mango pruning seems like a lot of fun.  Especially if I can squeeze in a nap between the surfing and the tae kwon do...

Third, you may be looking at national checkers/chess** champions in training.  Those guys may have spent their entire morning looking forward to spending an afternoon their way, and they probably enjoy it while feeling sorry for you.  If/when you ER then you can spend the rest of your life being responsible for your own entertainment, and someday you may have some worker-bee feeling sorry for you, too!

* White Plains Beach has been at least eight feet since last Friday.  This will be my fourth surf trip in six days and there's another swell coming this Friday.  I'm not sure how much longer I can take this.  Whine, snivel.

** Yes, I was a high-school chess geek.  When the day comes that I can't paddle out anymore then I'll dust off my old chess books, learn the latest twists on the Ruy Lopez, and start hanging out at the neighborhood club.  There might even be a few overconfident players willing to wager a frosty beverage or two on my skills...

 

[MasterBlaster]

Nords:

I didn't mean to offend you about relating to the coffee-house crowd.

Chess and Checkers aside, the people that I refered to seem to be missing something, to be longing for something and it shows. Their lives strike me as empty and I do not want their lifestyle. Actually it is one individual in particular that I would never (nor would you) aspire  to be.

Maybe you have a more balanced ER than they do. You seem to have a variety of things to do, The coffeehouse crowd does not. That's the BIG difference in a nutshell. And believe me, these people that I refer to are not and will never be chess/checkers champions. My personal take on the coffeehouse crowd is that they long for some sense of community, and they take what they can get down at the coffeehouse.

Per your comments about work, I agree there are some some undesirable issues to working. However since the work itself is interesting, and Megacorp pretty much lets me work by myself. It is, on balance pretty good work if you can get it.

I'll quit working when I decide that it's time to hang it up.

 

[Rich_by_the_Bay]

I must admit that I take exception to your characterization of the lifestyle.

Maybe what Nords means in part is that FIRE doesn't meain "forced failure to work" but rather the ability to work gainfully if that is what makes you happy. Emphasis on the INDEPENDENT part, not the "no more work" part. The latter is a personal preference.

 

[brewer12345]

Chess and Checkers aside, the people that I refered to seem to be missing something, to be longing for something and it shows. Their lives strike me as empty and I do not want their lifestyle. Actually it is one individual in particular that I would never (nor would you) aspire  to be.

Maybe you have a more balanced ER than they do. You seem to have a variety of things to do, The coffeehouse crowd does not. That's the BIG difference in a nutshell. And believe me, these people that I refer to are not and will never be chess/checkers champions. My personal take on the coffeehouse crowd is that they long for some sense of community, and they take what they can get down at the coffeehouse.

I guess I would be hesitant to read too much into some breif encounters with people at a coffeehouse.

That aside, I think that you greatly underestimate the appetite some of us have for simple leisure time. I don't need structure or community imposed on my life. I would be pretty happy left to my own devices. Whiling away days, weeks, months puttering around and relaxing would keep me pretty appy and fulfilled for quite some time, especially after a hectic pace for so many years.

 

[kcowan]

Always had a good appreciation for the value of money thanks to Dad working in a simple job and mom staying at home and managing the money. So as my earning grew, I took on larger houses and mortgages as forced savings plans. Never wasted lots of money on cars. Took lots of trips though.

As the earning grew, so did the savings. Retired from a big company early on a pension in 1992, and seriously planned for early retirement for 10 years, finally pulling the pin in 2002. Most important factor is LBYM IMHO.

 

[REWahoo]

There's a light? Where?

 

[REWahoo]

Whiling away days, weeks, months puttering around and relaxing would keep me pretty appy and fulfilled for quite some time...

If you would like a testimonial, let me know....

REW, appily fulfilled by doing nothing

 

[Rich_by_the_Bay]

I guess I would be hesitant to read too much into some breif encounters with people at a coffeehouse.

Yep, a lot of projection going on. Hard to make value judgments about others' choices.

I imagine that I may someday be the person that my high-powered colleagues look at and think, "What a waste..." I'll know I'm doing something right .

 

[Texas Proud]

Yes, I was a high-school chess geek.  When the day comes that I can't paddle out anymore then I'll dust off my old chess books, learn the latest twists on the Ruy Lopez, and start hanging out at the neighborhood club.  There might even be a few overconfident players willing to wager a frosty beverage or two on my skills...

Hmmm.. another chess geek!!!  I was on a great chess team in high school...  we won almost every tournament in Houston for two years running... I was second board... the guy who was #1 went on to play for The University of Texas... and is a lot better than me...  but I held my own..

It was funny that I stumbled across a tournament when I was in college... signed up just when they were starting... found out it was the college tournament to see who would represent the school in the regional...  won the dang thing...  but, got my a$$ handed to me in regionals... I am maybe a class B, and sometimes held my own with experts.. but never wanted to 'study' to get better...

So, I will take the challenge someday...