How we did it

[ESRBob]

Grumpy,
Welcome to ER and congrats on an inspiring story.

Curious as to whether, in rough numbers, you could tell us:
a) what % of your savings came from divs/capital appreciation vs
b) what % from the actual initial dollars put in. Would you guess 50-50 or in fact has the appreciation been more than half. It might be instructive for young people to see how much those hard-won savings dollars can grow into over a 30-year career -- ease the pain a bit of foregoing consumption.

also, does this include appreciation in home equity, too, or are you counting that separately in another 'column'?

Did you get the 'Grumpy" part from telling your kids they couldn't have every toy all the other kids had? ;-) I am learning how to growl and do that and find I really enjoy it!

thx,
ESRBob

While we are waiting for Grumpy to respond,
I have some thoughts on hobbies and filling your ER
time. There is an old rule about work exxpanding to fill the time available. I am not sure that I experienced that
but I have surely experienced the filling up of all my hours in ER. I have even dropped a couple of hobbies
and still each day is full, my calendar loaded. This is why
I say, although I would like to spend time just "doing
nothing" it rarely happens.

John Galt

[azanon]

Quote:

What are mmorpg's?

It stands for massively-multiplayed online roleplaying games. * Two incredible ones are about to be released by mid November; *Everquest 2 and World of warcraft. *In short, its a virtual world where you become a fantasy character and kill goblins, dragons, etc, and get to fight with other real people all over the world. * These games are incredibly fun and addictive and tend to appeal to adults.

for more info:
http://everquest2.station.sony.com/
http://www.blizzard.com/wow/

[grumpy]

Carol,

The over 55 community is in a distant suburb of D.C. in Virginia. It is closer to Fredricksburg than Washington. We have many friends in the D.C. area and are not ready to move too far away. Also my father-in-law lives in Philadelphia and we need to stay within reasonable travel distance.

I would eventually like to move somewhere warmer and less congested (e.g Tucson Ariz.) but that will have to wait. In the meantime, we hope to spend the winter months renting elsewhere. This will let us try out a few different warm weather locations before considering permanent relocation.


Grumpy

[grumpy]

Quote:

Grumpy, Welcome to ER and congrats on an inspiring story. Curious as to whether, in rough numbers, you could tell us: a) what % of your savings came from divs/capital appreciation vs b) what % from the actual initial dollars put in. *Would you guess 50-50 or in fact has the appreciation been more than half. It might be instructive for young people to see how much those hard-won savings dollars can grow into over a 30-year career -- ease the pain a bit of foregoing consumption. also, does this include appreciation in home equity, too, or are you counting that separately in another 'column'? Did you get the 'Grumpy" part from telling your kids they couldn't have every toy all the other kids had? *;-) *I am learning how to growl and do that and find I really enjoy it! thx, ESRBob

ESRBob,

In 1986, when I got serious about ER and investing I had a net worth of approx $150K (excluding home equity). My portfolio tracker shows that over the ensuing 18 years my average annual return has been about 8%. That includes bank acccounts, money market accounts, bond funds, as well as stocks and stock mutual funds. Not that impressive a result but I have always been a pretty conservative investor. A quick spreadsheet shows that, if I hadn't added any new savings I would have had about $600k by now. This means I have added something over $400k net of new money. So, it looks like it is about 50/50 appreciation vs. savings.

I am not including about $320K of home equity in the figures above.

While I did tell my kids that I wouldn't buy them every toy that the other kids had (their grandparents were another story altogether), that's not where the "Grumpy" part comes from.


Grumpy

[wabmester]

Quote:

Did you get the 'Grumpy" part from telling your kids they couldn't have every toy all the other kids had? ;-) I am learning how to growl and do that and find I really enjoy it!

My kid is 18-months old and she's recently become very demanding. I asked myself "how would my mentors deal with this?" So, I borrowed a trick from Bugs Bunny:

her: "more!" me: "no more!" her: "more!" me: "no more!" ... me: "more!" her: "no more!" me: "ok."

[bow-tie]

BRILLIANT!

[ESRBob]

Quote:

*This means I have added something over $400k net of new money. *So, it looks like it is about 50/50 appreciation vs. savings.

Grumpy,
thx for the follow-up,and for keeping great records over the years. Very instructive. So over 18 years, looks like you socked away 20-25k each year, on average and received more-or-less long term market returns (8%) on your investments.

I think this could make a very good set of targets for younger members of the forum looking to ER-- basically save 25k+ each year from income (probably want to be on the high end to account for inflation -- grumpy was putting the $ away in the 80s when a dollar was worth more).

What is inspirational is that it was done without hitting it big-time in the Nasdaq or inheriting $ or selling your company etc, but with a slow-steady approach over a reasonable (20 year or so) stretch.

Presumably you are also vested in a pension, but even a couple without any additional pension could live on the proceeds of a 1m financial portfolio, (maybe drawing at a full 4% instead of your very-safe 3%) especially if they were willing to relocate (inland?) to less expensive US-based digs.

Congrats again,
ESRBob

[grumpy]

[quote]


Presumably you are also vested in a pension, but even a couple without any additional pension could live on the proceeds of a 1m financial portfolio, (maybe drawing at a full 4% instead of your very-safe 3%) especially if they were willing to relocate (inland?) to less expensive US-based digs.


ESRBob,

You are right. I am very fortunate to be covered by the old Civil Service Retirement System (CSRS) rather than the newer Federal Retirement System (FRS). I was able to retire at age 55 with 56% of my average high three salary years (indexed to the CPI). That pretty much will cover all of our regular expenses. Any withdrawals from our nestegg will be for the "extras". We will continue to be conservative in our withdrawals as it is our intention to fully fund 529 plans to cover the cost of college education for our grandchildren (when we have them).

Clearly my employment situation with Uncle Sam made all of this alot easier to accomplish. However, many of my peers at NASA, with the same opportunities, failed to take advantage of them. They will be working well into their late 60's and may never have the financial security they could have had.

Grumpy