Could you retire at 38?

[Bimmerbill]

I did at age 40, but it was from my part time job in the Army National Guard. Cola pension starting at age 60, but pretty puny. I call it my beer and pizza money.

 

[ziggy29]

I call it my beer and pizza money.

That's about what my Megacorp #1 pension will be, having frozen the pension at "beer and pizza" levels while I was still employed there.

 

[landover]

In 2007 a guy I knew was passed over twice for O-4, so he knew he would have to get out as of Oct that year, and that he would be receiving about $70,000 as severance pay (no retirement for him). Then in the Spring of the same year, the Navy put out a message saying that certain officers were eligible for 'voluntary separation pay' if they would resign. Their incentive was money, and this guy was eligible for about $160,000 or so, provided that he would resign in the summer. The idea was that the Navy would get rid of some officers and avoid paying them a 20-year retirement for the rest of their lives. Bottom line for that LT was that he got $90,000 extra for leaving a couple of months earlier.

Does it mean that he left a COLA pension for just this extra money and working 2 months less?

 

[ziggy29]

Does it mean that he left a COLA pension for just this extra money and working 2 months less?

I believe he said that this person already knew he'd be forced out before he was eligible for retirement, but by jumping on this "incentive" he gained an extra $90,000 for leaving a couple months earlier. There wouldn't have been a pension either way; if he gave up a COLA'd pension for life for only $90K he would have had to have rocks in his head.

 

[BunsGettingFirm]

At 38 I just embarked ion a second career in the head office of a technology company, after a career in technology, sales and sales management. I would never had the enjoyment I got from influencing corporate direction.

At 49 I was given a golden handshake and immediate reduced pension. Ten years and an extra wife later, I finally retired.

I think the Kalderlis are a model for people who will take drastic action in order to reduce the risk of early retirement. They write books to sell them so, in a sense they just traded a 9 to 5 job for freelancing (granted for much less $). The nice thing is that they have gained some real experience that can help all those who follow.

The opportunity you had would have been good reason for anyone with an ounce of ambition to stick around for another 10 years. Coming out of business school, I was pretty gung-ho about knocking one out of the park, but 3 years later, I'm still stuck in the same crappy entry management position. Of course, having a boss who was essentially a short timer the day he started probably didn't help that much.

I believe the Kiderlis didn't write their first e-book until 2003, some 12 years after they had first retired, so I believe that they wrote the book more for passing on the wisdom than for making money.

There is always trade off. For me, the trade off is the prolong periods of bad sleep for more money.

 

[kcowan]

...I believe the Kiderlis didn't write their first e-book until 2003, some 12 years after they had first retired, so I believe that they wrote the book more for passing on the wisdom than for making money...

There is no question that they were pioneers and have lighted the path for many that followed. However, getting royalties on books and speaking for $ is not a part of retirement. Perhaps they got tired of doing it for free. I am pretty sure they did not undertake it to make money.

The nice thing about retirement is that you can do whatever interests you at the time. Being retired for 50 years (38 to 88) does present some challenges for staying alert and active.

 

[Keim]

No way I could. I'm 38 now. My wife and I have saved responsibly. In fact, we have 7-10 times yearly expenses saved up (depends on whether you count house equity). We've done that by saving 20% or more of each paycheck, used cars, relatively cheap house, etc. With nonprofit and stateworker jobs the income will never be large. But I'm figuring early retirement won't come until the kids are out of school. Our frugality has allowed us to have one parent work half-time, spening the other time with the young kids.

So-mid 50s for us.

 

[Billy]

You bring up an interesting question, Kcowan.

If you trade stocks and make money are you retired? If you have rental properties and all of the headaches that go with being a landlord, are you retired? If you create art and are fortunate enough to sell it, are you retired? What about playing in a band and receiving compensation? Is it a passion or a job? What about remodeling old Victorians and flipping them? Or charging your neighbors for handyman work?

When is following your dreams, your passions or utilizing your talents qualify you as being ‘un-retired’?

Akaisha
Author, The Adventurer's Guide to Early Retirement
The Adventurer's Guide to Chapala Living

 

[Onward]

There is no question that they were pioneers and have lighted the path for many that followed.

You can say that again. Billy & Akaisha were my primary inspiration and model during the years I was slogging it out toward freedom, and also now that I´m free. There is a short video they did from Chaing Mai, talking about the pros of early retirement, that has been like a beacon in the dark for me. Sorry, don´t have the link.

Their e-book, Adventurers Guide to ER, is excellent, though I didn´t read it until I had reached FIRE.

One of my goals is to visit Chapala, or revisit Chaing Mai, one day and buy B & A a drink!

 

[NW-Bound]

As said earlier, we would not have enough to retire at 38. Our children were also too young. Even entering our 50s, when my wife was getting burnt out and I did not want to return to a full-time work with a megacorp, we still wondered if it was OK for us to stop working. Not knowing any friend or relative who has ER'ed, we felt really weird. What do we do all day? What do our children think, seeing that we are goofing off everyday, while their friends' parents go to work?

I was glad when I stumbled across this forum 2 years ago, looking for a SWR number. I was relieved to know that we are not as much weirdos as we thought, and 50 is not that young an age to ER compared to others.

Long live the "lumpen slum" (I just love the term, don't you?

 

[BLS53]

Does it mean that he left a COLA pension for just this extra money and working 2 months less?

He was being forced out prior to 20 years because he was passed over for advancement. Hence no pension.

I saw this happen to a Chief at 18 1/2 because he couldn't meet the weight standards. He didn't get any separation money like this guy.

 

[kcowan]

You bring up an interesting question, Kcowan.

If you trade stocks and make money are you retired? If you have rental properties and all of the headaches that go with being a landlord, are you retired? If you create art and are fortunate enough to sell it, are you retired? What about playing in a band and receiving compensation? Is it a passion or a job? What about remodeling old Victorians and flipping them? Or charging your neighbors for handyman work?

When is following your dreams, your passions or utilizing your talents qualify you as being ‘un-retired’?

Akaisha
Author, The Adventurer's Guide to Early Retirement
The Adventurer's Guide to Chapala Living

I think it only qualifies if it is essential to generate those revenues. If they are gravy and sustain a little buffer, then it is not a part of an ER plan.

I think there is a fine line between pursuing a hobby for its own perks and generating revenue from a hobby as a requirement to ER. The latter starts to feel like w*rk. I wash my own car because I enjoy it. But I consider washing someone else's car as w*rk. BTW the locals will wash my car for 40 pesos ($3).

I manage my own portfolio as a fun hobby. But no one holds me to making my targets yet.

Interesting thing here in Mexico. The locals look at many of the things we do for ourselves and say: "Why are you doing that? You are depriving a local from the extra money!" And our Mexican National friends are also amazed at all the things we are capable of doing. Walking the dog and picking up its poop? The servants do that! Painting the railing? Or the walls. Installing an AC. What they fail to realize is that being self-sufficent is what has enabled many of us to ER in the first place.

 

[NW-Bound]

The locals look at many of the things we do for ourselves and say: "Why are you doing that? You are depriving a local from the extra money!" And our Mexican National friends are also amazed at all the things we are capable of doing. Walking the dog and picking up its poop? The servants do that! Painting the railing? Or the walls. Installing an AC. What they fail to realize is that being self-sufficent is what has enabled many of us to ER in the first place.

I submit that it is more than that. The typical American loves to be DIY'er. An office worker can take pride that after coming home from a desk job, he can play a mason, a carpenter, or a gardener. We feel proud to possess these skills outside of our vocation. That's the American way.

I have posted here that I am a naturalized citizen. Growing up in our old country, I observed my father doing a lot of DIY projects around the house. I remember him saying "The Americans like to do things themselves, just like this".

But lacking the requisite skills, he turned out works that were less than stellar and my mother used to make fun of the results, and often nudged him to hire real craftmen. Still, his comment about "the American way" stuck with me.

 

[kcowan]

....But lacking the requisite skills, he turned out works that were less than stellar and my mother used to make fun of the results, and often nudged him to hire real craftmen. Still, his comment about "the American way" stuck with me.

My Dad being a union guy seemed to build things that needed constant maintenance. I followed his lead about being self-sufficient, but used professional quality materials. They lasted for a minimum of ten years.

 

[Billy]

kcowan

I think it only qualifies if it is essential to generate those revenues. If they are gravy and sustain a little buffer, then it is not a part of an ER plan.

I can understand that viewpoint. We generally agree then!

To hold one's self back from Life's opportunities seems silly to me. If it generates a bit of income, good deal. Being financially independent allows one to choose to do something or not, follow a passion or quit doing something just because they choose to do so.

Akaisha
Author, The Adventurer's Guide to Early Retirement
The Adventurer's Guide to Chapala Living

 

[GoodSense]

I totally agree. I think if I FIRE or semi-FIRE at 38 or 40, I will be doing things that I love, such as singing, painting, and other artsy stuff. If I can make it into the Opera and get paid for it, or if people are willing to buy my pottery, all the better. In my mind, the freedom to not do it is the key distinction between work and FIRE.

 

[kcowan]

In my mind, the freedom to not do it is the key distinction between work and FIRE.

And it is amazing the things I have decided NOT to do even though:
- they were not my job, but
- I developed the skill to do them.
This was a part of LBYM but now that I am FI, I often delegate them to third parties. This helps the economy while helping me to be truly retired.

 

[ziggy29]

And it is amazing the things I have decided NOT to do even though:
- they were not my job, but
- I developed the skill to do them.
This was a part of LBYM but now that I am FI, I often delegate them to third parties. This helps the economy while helping me to be truly retired.

Oil changes come to mind here. I mean, I know perfectly well how to change my own oil. I could buy five quarts of oil and a filter for maybe $12 and get grimy and greasy and have spent oil to dispose of, or I can pay $20 and have a "pro" do it. Seems to me $8 is a small price to pay to have someone else deal with the getting dirty and disposing of used oil and filter.

Sometimes there just isn't enough savings in DIY to bother.

 

[NW-Bound]

For me, it's not the $8, but the problem of driving to a shop and wait. I could care less about the $8, but I found doing it myself actually more convenient. I also took the occasion to look under the hood for other potential problems.

And then, I have had friends who had these "pros" over-tightening the oil drain plug and stripping the thread. One even had the drain plug not tightened at all due to neglect, resulting in it coming loose later on the road, him losing all oil and running the engine dry for a little while. They came to tow the car back to redo it, but of course could not reimburse him for potential damage to his engine. And this was a new car dealership!

 

[ziggy29]

For me, it's not the $8, but the problem of driving to a shop and wait. I could care less about the $8, but I found doing it myself actually more convenient. I also took the occasion to look under the hood for other potential problems.

And then, I have had friends who had these "pros" over-tightening the oil drain plug and stripping the thread. One even had the drain plug not tightened at all due to neglect, resulting in it coming loose later on the road, him losing all oil and running the engine dry for a little while. They came to tow the car back to redo it, but of course could not reimburse him for potential damage to his engine. And this was a new car dealership!

Somehow I knew this was going to roughly be the rebuttal. I certainly don't trust this to *anyone*.

 

[NW-Bound]

I certainly don't trust this to *anyone*.

If I could do my own dental work, I would!

 

[aaronc879]

For me, it's not the $8, but the problem of driving to a shop and wait. I could care less about the $8, but I found doing it myself actually more convenient. I also took the occasion to look under the hood for other potential problems.

I always go to a shop to get my oil changes done. It's only 2 miles from where I live and never takes over 30 minutes. Much easier than doing it myself. They also check tire pressure and add washer fluid. They also check the battery and wash the windshield. It costs me $27 and is well worth it. I only go once every 6 months since I only put on 5000-6000 miles per year.

To keep on thread, maybe doing it myself would allow me to retire at 38 but i'll work a little longer for the added convenience.

 

[NW-Bound]

No, it would take more than doing own oil change to retire at 38.

Proof: I did my own oil changes, and I was still working at 38.

 

[Nords]

Sometimes there just isn't enough savings in DIY to bother.

... and that's when I turn to my daughter to say "Hey, would you like to learn how to do this?"

 

[Milton]

I'm in one of the lower paid engineering professions. Nothing techie. But in the private side, not government work. DW started entry level at an investment bank 4.5 years ago, and has worked her way up a few notches, but still not making a ton. She does back office stuff away from the traders, not the $500,000 a year jobs that "investment bank" connotes. Our total salaries (not counting fringe benefits) just barely pushes our earned income into six figures (and that first happened in 2008 IIRC).

We are both law school grads, and have the full student loans from that as well. Neither of us receives an income from practicing law, and it has helped very little in terms of compensation at either of our jobs. So factor in that we have a bunch of student loan debt, and "wasted" three years not working, and not getting experience in our current careers.

Unusual that both of you would incur the substantial time, trouble and expense of law school with no intention of practicing (not that I think that private law practice is a great gig, but at least it pays pretty well and would provide some return on your investment). May I ask why you made that decision?

But we have been focused on wealth building all along. We bought a small (by today's standards) 4 bedroom house in a working class/gentrifying neighborhood that will meet our family raising needs. We drive 10 year old well maintained cars. We make some sacrifices here and there, but nothing that really matters much to us. We could always buy a nicer house in a better neighborhood, and nicer cars, and more/nicer things for our kids. But we chose not to since what we have is "good enough".

Our net worth has grown due to keeping costs of living contained and saving about 1/2 our income (and saving big time on taxes as a result). Overall, I think the kid expenses are almost a wash. Not to understate the expenses involved with kids (which may be higher in the future), but our spending is different now, not necessarily just higher. Through 2010, we saved a bunch on taxes, and 2011 forward we will continue to do so, to a lesser extent.

Good work!