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When You KNEW You Had Arrived!
Old 08-26-2004, 06:05 PM   #1
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When You KNEW You Had Arrived!

During your you recall the moment (if there is such a thing), when you knew that you were going to hit your goal?

I think I know now...especially when I get comfort looking @ my budget and playing with the numbers looking @ ways to cut time!


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When the Navy made us an offer we couldn't refuse.
Old 08-26-2004, 06:37 PM   #2
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When the Navy made us an offer we couldn't refuse.

My first epiphany on ER was during the Navy's retirement transition briefings. I was griping to my father that it was a thinly-disguised job fair for someone whose only strong aptitude was nuclear engineering, and that there weren't too many fun jobs in Hawaii in that field. He took it one step further: "Why do you need a job-- didn't you save any money?!?"

It turned out that the pension would support our lifestyle. Or we'd adapt our lifestyle to support the pension.

Later when we realized that spouse's career was probably going to require a move that she wasn't willing to make, it drove me into a frenzy of financial analysis. Saying "no" would certainly delay her pension.

Lo & behold, FinancialEngines lit up its >95% light. When we made some more pessimistic assumptions about inflation & taxes, it turned out that I could always get a job. It also turns out that you CAN refuse the Navy's offer, but that's another story.

9/11 was six months later. When the stock market re-opened, our portfolio dropped by 40%. "Breathtaking" is hardly an adequate word to describe the impression, and I went back to the financial analysis.

It turned out that we could cut back our expenses a bit and I still didn't need a job.

I haven't really spent any time on the financial analysis since then. Every December I refill our two-year expense bucket and check that the cashout is less than 4%. All of my remaining financial focus has been on IRA conversions & hobby stocks!


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Re: When You KNEW You Had Arrived!
Old 08-26-2004, 10:23 PM   #3
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Re: When You KNEW You Had Arrived!

For me it was a "perfect storm". We had been saving/planning for 13 years. Several things converged at about the same time (August 2003 - May 2004):

--My youngest daughter was about to graduate from high school. She would soon leave home and I wanted to spend more time with her.
--New management at work. This was a mean bunch - bullies really - and they went after some very decent, competent people who were my friends. I defended my friends and in the process I pushed them - hard. I was good at what I did, so they couldn't get me, but I was in their sights.
--Along with new management came a great escalation of politics. The fear and chaos created by the new management team brought out the worst in people. Productivity plummeted which panicked management and caused them to react in the dumbest ways, causing even more problems. Even the state's largest newspaper took notice of a few things.
--My financial number crunching reached a fever pitch. The tea leaves looked OK. Not as good as we wanted, but reasonably doable.
--Out of the blue an early retirement package was put forth that included a cash payout and access to a health plan for life (just access, not premium payment, but having access was huge for us).

So for me it all came together very suddenly. It wasn't planned to go down like it did, it just happened. I think you'll find that's fairly common here.
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Re: When You KNEW You Had Arrived!
Old 08-27-2004, 06:28 AM   #4
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Re: When You KNEW You Had Arrived!

So for me it all came together very suddenly. It wasn't planned to go down like it did, it just happened. I think you'll find that's fairly common here.

Yup, the politics drove me out also. I had planned on working another 5 years at least, but things got so bad I had to leave. When I was assigned a job to 'manage' a problem department, it also sent me into a fever pitch of number crunching. After discussions with my wife, we decided that I should bag it then and there.

Don't know that I ever knew I had arrived. No one can predict the future of investments etc., so I think it's a lifelong process.

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Re: When You KNEW You Had Arrived!
Old 08-27-2004, 08:48 AM   #5
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Re: When You KNEW You Had Arrived!

I started this ER process many years ago. I've had a year by year goal of where I wanted to be (actually month by month and sometimes week by week, but I don't want to sound too neurotic). My original goal was to retire at 50, but I've been able to exceed my goals through mostly hard work and a little luck to make age 36 my semi-semi-ER point, 40 my semi-ER point, and 42 my complete ER point. I have been on track almost every month for the past decade, so (knock on wood) I know that I am arriving.
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
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Re: When You KNEW You Had Arrived!
Old 08-27-2004, 03:21 PM   #6
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Re: When You KNEW You Had Arrived!

that's awesome Retire@40... gives me hope.
Diggin' my way to financial freedom, one buck-at-a-time
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Re: When You KNEW You Had Arrived!
Old 08-28-2004, 05:17 AM   #7
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Re: When You KNEW You Had Arrived!

Most of my Early retire friends here in town (who like everyone who works on Wall Street generally hate it and/or know they will get pushed out one day) have "The Number" in their heads for many years. "The Number" is the amount that they assume they will put into muni bonds at prevailing interest rates and cover all their annual lifestyle expenses. Leaving aside the fact for now that it is a dumb strategy (doesn't keep up for inflation, don';t need muni bonds when your taxes are so low,), the principle of having an assets target is sound.

I had my own "nuimber' in mind for many years, used a too-high SWR (5%) and ended up raising my number by 50% before I stopped (lifestyle creep, and arguably still not quite high enough) but the basic method worked. Never had a pension and it never entered into my calculations.

Realizing that I couldn't get to my number on a safe route of saving at employment incomes (and never had a safe job anyway), I knew I had to take on more risk and do something audacious to ever make it to my number. So I started two companies. Somewhere in the middle of the dotcom blur we sold the first one to a public company and its share price zoomed up, so knowing my number meant I sold steadily into that insanity. I am still one of the few people I know who walked away with the lion's share of my dotcom gains, and I attribute it solely to having known what i wanted and needed to get, and then just taking action when I got there.

The value of the number for me was knowing I wasn't going to reach it on the path I was on (regular employment even in the escalated risk-reward role I moved myself to -- sales and sales management), which provided the clear spur for me to go out into the cold and be an entrepreneur. (which also involved investing meaningful sums in the startup phases of my companies -- 100k for the first one, 500k for the second -- something that would have been impossible to pull the trigger on if I hadn't known where I was going to and why.)

The Millionaire Next Door research bears out that many people who accumulate 1m+ take a similar self-employment path.

ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)
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Re: When You KNEW You Had Arrived!
Old 08-28-2004, 07:16 AM   #8
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Re: When You KNEW You Had Arrived!

Hey Bob! Another great post. Keep 'em coming.

You have inspired me to list the purely financial
occurances which got me to my "number", even though when I ERed, I had no idea what that number was.
BTW, these are in chronological order.

Bought my own manufacturing business (tiny) and ran it for 3.5 years. I did not make much money running it but
it paid off big time when I shut it down and dismantled
it piece by piece. Incidentally, a business founder might have been unable to do this (too much emotion
involved). It was all $ to me though.

Took a consulting contract which lasted four (4) years,
mostly part time. Low stress, high pay.

Maxed out all available tax deferred retirement accounts.

Sold off some real estate (non-income producing)
which I had held for some time. Got 5X my investment
and put all the money into income producing property.

I still never have had a "number" other than my
income/outgo (mostly in my head), and my net worth
(tracked obsessively).

John Galt
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