Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-29-2013, 12:04 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
I would also recommend reading The Millionaire Next Door book. You are income statement affluent but not balance sheet affluent. A family able to live well on $40K with $500K has more freedom because they have 12.5 years of living expenses in savings.

You can get a summary of the main ideas of the book on Wikipedia -
The Millionaire Next Door - Wikipedia, the free encyclopedia

While there are many doctors who post here who are wealthy, in general doctors get picked on a lot in the book because even though they tend to have high incomes, they are expected by society to also live the part, which leads to high levels of conspicuous consumption and lower net worth than PAWs (prodigious accumulators of wealth).

A guy who owns a scrap metal business may have a doctor type income, but he is less likely to have any peer pressure to send his kids to private school or live in a gated community, which allows him to save and invest more of what he earns.
__________________

__________________
daylatedollarshort is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-01-2013, 01:40 PM   #22
Recycles dryer sheets
Cassius King's Avatar
 
Join Date: May 2010
Location: Cincinnati
Posts: 190
I'm less concerned with the FIRE concept than I am with the idea of working 80-100 hours a week and having a family at home that includes two teen age children.

These children will soon be grown up and gone in a couple of years. No amount of money will buy back their childhoods and the time you could have spent with them.

I would adjust my expenses by every means necessary to spend as much time with family as I could.
__________________

__________________
Cassius King is offline   Reply With Quote
Old 10-03-2013, 07:28 PM   #23
Thinks s/he gets paid by the post
Milton's Avatar
 
Join Date: Apr 2007
Posts: 2,078
Quote:
Originally Posted by pb4uski View Post
$1 million of retirement savings is inadequate in relation to your living expenses/standard of living.
Entirely correct.

Quote:
Originally Posted by pb4uski View Post
One suggestion is to do some analysis of your spending and what is essential and not essential and get realistic about what you need to live the lifestyle you want in retirement (or part-time work).
Good advice.

If I would you, I'd think long and hard about whether the $35,000 p.a. spent on private school fees would not be better allocated towards retiring the $200,000 mortgage debt.
__________________
"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)
Milton is offline   Reply With Quote
Old 12-05-2013, 08:37 PM   #24
Confused about dryer sheets
 
Join Date: Sep 2013
Posts: 9
These are all very good points. I am accelerating the savings plan now and buckling down on the budget. Thanks for all your ideas. If we can demonstrate the ability to live on less, then that is the time to do it.
__________________
Partimewannabe is offline   Reply With Quote
Old 12-05-2013, 10:16 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
Good luck, partimewannbe. Keep us posted. In my family I think our expenses just kind of crept over the years along with our income, without really buying a lot of extra happiness. When we really took a good look at our budget, there was a lot we could cut out, even without moving, downsizing or changing our basic lifestyle.
__________________
daylatedollarshort is offline   Reply With Quote
Old 12-05-2013, 11:37 PM   #26
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,649
I'd also like to add that during the years of stressful work and raising children, I blew more money than I was aware of because I did not have the time to pay attention. Checks flew out of the check book. Things like $3,000 for homeowners and car insurance...where they sent me the renewal and I just paid the check. Now my homeowners and car together are only $1,212 (major deductible increases, shopping quotes from other companies, etc. ).

When I made the decision to change my work status when my daughter was 14, I was actually a bit horrified at how much I was not paying attention and what I was paying for things. That was 12 years ago. I made it part of my job to see how cheaply we could live and how much we could save.

One really needs "time" to pay attention to these things. It can really balloon out of proportion with a life of it's own before you know it. Good luck partimewannabe.
__________________
sheehs1 is online now   Reply With Quote
Old 12-05-2013, 11:53 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,432
I missed this thread when it started. The key for the OP to be able to retire early is expense control, as many posters have commented.

Even at the best years of my engineering career, I made a bit short of $200K. And I spent a few years working without pay in a futile attempt to keep our start-up alive. Of course I did not spend as many years for schooling as an MD, and hit the workplace sooner, but my lower expenses were what enabled me to hit the $1M mark before the age of 45, as the OP did. As many have noted, even at $2M mark, that will only safely support an annual expense of $70K. And I have more than that at the present time, even after putting my two children through college. They are 24 and 27 now, and fully self-supporting. I am fully retired now for a year after working part-time consulting (less than 1000 hrs/yr) for the previous 10 years. I own two homes, and for the last 15 years have spent quite a bit of time traveling, which is of course budget-oriented.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-11-2013, 08:00 AM   #28
Recycles dryer sheets
 
Join Date: Jun 2012
Posts: 489
NW bound, what was your gross savings rates during your FT employment and during your PT "wind down"?
__________________
someguy is offline   Reply With Quote
Old 12-11-2013, 09:27 AM   #29
Confused about dryer sheets
 
Join Date: Oct 2013
Location: Chicago
Posts: 7
Quote:
Originally Posted by Cassius King View Post
I'm less concerned with the FIRE concept than I am with the idea of working 80-100 hours a week and having a family at home that includes two teen age children.

These children will soon be grown up and gone in a couple of years. No amount of money will buy back their childhoods and the time you could have spent with them.

I would adjust my expenses by every means necessary to spend as much time with family as I could.
+1
This was exactly my situation and I did exactly that, took a lower paying job that kept me at home at nights. I have had a job with travel, anywhere from 50% to 100% for many years. I could not be happier now with time to spend with children & family. On the financial sides, I've been a prodigious saver and a value investor(don't follow anything conventional like AA, diversification etc.) and have over $1M in net worth, which is also growing nicely. That helped a lot to do what I'm doing now, but I would have done it even without the cushion. Like the OP has noted, "it has to stop". The next step is ER (54 now), when exactly is TBD based on kids' college plans but surely can see ER by 2020, hence the moniker.
__________________
free2020 is offline   Reply With Quote
Old 12-11-2013, 01:11 PM   #30
Recycles dryer sheets
jetpack's Avatar
 
Join Date: Aug 2013
Posts: 320
Quote:
Originally Posted by daylatedollarshort View Post

A guy who owns a scrap metal business may have a doctor type income, but he is less likely to have any peer pressure to send his kids to private school or live in a gated community, which allows him to save and invest more of what he earns.
This is certainly accurate, as I know a multi millionaire scrap metal dealer. He certainly doesn't look the part... He is a very warm and generous man though.
__________________
jetpack is offline   Reply With Quote
Old 12-11-2013, 01:16 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by jetpack View Post
This is certainly accurate, as I know a multi millionaire scrap metal dealer. He certainly doesn't look the part... He is a very warm and generous man though.
So all scrap dealers are warm and generous folks who live modestly and save a lot? I'll make a note of that.......
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is online now   Reply With Quote
Old 12-11-2013, 01:41 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by youbet View Post
So all scrap dealers are warm and generous folks who live modestly and save a lot? I'll make a note of that.......
Like most of us, they care only to serve mankind...
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-11-2013, 01:54 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
Quote:
Originally Posted by youbet View Post
So all scrap dealers are warm and generous folks who live modestly and save a lot? I'll make a note of that.......
Jetpack said he knew one person like that. Why apply those attributes to all scrap dealers when that isn't what he posted? I don't understand your reasoning.
__________________
daylatedollarshort is offline   Reply With Quote
Old 12-11-2013, 01:57 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by daylatedollarshort View Post
Jetpack said he knew one person like that. Why apply those attributes to all scrap dealers when that isn't what he posted? I don't understand your reasoning.
He isn't reasoning, he is joking. These pages can get dreary at times.
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-11-2013, 02:13 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
Quote:
Originally Posted by haha View Post
He isn't reasoning, he is joking. These pages can get dreary at times.
I guess I missed the punchline. It just seemed sarcastic to me for no apparent reason.
__________________
daylatedollarshort is offline   Reply With Quote
Old 12-11-2013, 02:30 PM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,432
Quote:
Originally Posted by someguy View Post
NW bound, what was your gross savings rates during your FT employment and during your PT "wind down"?
I never really planned to retire early, hence did not pay that much attention to our savings rate, nor had any goal to save xx% of income like many posters here. We just practiced LBYM and had plenty of money left over, which would have grown our portfolio a lot higher if I paid more attention to financial matters than my work.

During my decade of part-time work, with my wife already retired near the end and the two children in college, I had to dip into my savings I am sure. However, as I paid more attention to the portfolio balance than the in/outflow, I could not tell how much we drew from the savings. Some years I had a surplus, some years a deficit. If the balance was growing, it did not worry me too much, except for the crash in 2009 of course.

It is only within the last 3 years when I decided that I might not want to continue the part-time consulting further that I tracked my expenses religiously with Quicken. When I found out that my expenses were right at 3.5% WR and I was a bit fed-up with people I was working with, I pulled the plug.

Yes, I had a really cavalier attitude compared to most people here, but I now realize that I should not push my luck and must pay more attention to financial matters.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 12-11-2013, 02:47 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by daylatedollarshort View Post
I guess I missed the punchline. It just seemed sarcastic to me for no apparent reason.
I don't know enough to accurately comment, but to me at least., sometimes the stereotypes that we hold dear can get kind of cloying. And also very likely misleading, since they shortcut thought. We have phrases that seem to jump out of our computers-similar to the health writers artery-clogging-saturated fats. The wealthy barber is certainly one. For example, though doctors in private practice face pressures that many lower profile occupations do not, my confident guess is that there are more wealthy doctors than barbers. The wealthy barber, along with the scrap dealer with a good heart are just comforting narratives for frugal people. Sometimes accurate (particularly the rich scrap dealer), but not often enough to want to make book on it. Like the quote attributed to Damon Runyon, "The race is not always to the swift, nor the battle to the strong, but that is the way to play it."

In particular, the millionaire but sweet scrap dealer would only be remarkable if it were deemed to be unusual, perhaps like "the ravishing librarian".

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-11-2013, 03:14 PM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
Quote:
Originally Posted by haha View Post
I don't know enough to accurately comment, but to me at least., sometimes the stereotypes that we hold dear can get kind of cloying. And also very likely misleading, since they shortcut thought. We have phrases that seem to jump out of our computers-similar to the health writers artery-clogging-saturated fats. The wealthy barber is certainly one. For example, though doctors in private practice face pressures that many lower profile occupations do not, my confident guess is that there are more wealthy doctors than barbers. The wealthy barber, along with the scrap dealer with a good heart are just comforting narratives for frugal people. Sometimes accurate (particularly the rich scrap dealer), but not often enough to want to make book on it. Like the quote attributed to Damon Runyon, "The race is not always to the swift, nor the battle to the strong, but that is the way to play it."

In particular, the millionaire but sweet scrap dealer would only be remarkable if it were deemed to be unusual, perhaps like "the ravishing librarian".

Ha
I have never read the Wealthy Barber. My initial comment about scrap dealers was based on the research from the Millionaire Next Door author about the scrap dealers versus doctors -

"Simply put doctors could and should accumulate much more and at a much younger age.......for every one high income producing doctor who is in the balance sheet affluent category, there are two in the income statement affluent category. It's just the opposite for self employed business owners."

From -
Emphasize Net Worth-Part I

and

"Auto salvage/scrap metal dealer has been on my top 20 blue collar millionaire business list since the first year I started conducting research on the millionaire next door."

One Man's Junk, Another Man's Treasure
__________________
daylatedollarshort is offline   Reply With Quote
Old 12-11-2013, 03:20 PM   #39
Full time employment: Posting here.
 
Join Date: May 2011
Location: Marco island
Posts: 813
Quote:
Originally Posted by NW-Bound View Post
I never really planned to retire early, hence did not pay that much attention to our savings rate, nor had any goal to save xx% of income like many posters here. We just practiced LBYM and had plenty of money left over, which would have grown our portfolio a lot higher if I paid more attention to financial matters than my work. During my decade of part-time work, with my wife already retired near the end and the two children in college, I had to dip into my savings I am sure. However, as I paid more attention to the portfolio balance than the in/outflow, I could not tell how much we drew from the savings. Some years I had a surplus, some years a deficit. If the balance was growing, it did not worry me too much, except for the crash in 2009 of course. It is only within the last 3 years when I decided that I might not want to continue the part-time consulting further that I tracked my expenses religiously with Quicken. When I found out that my expenses were right at 3.5% WR and I was a bit fed-up with people I was working with, I pulled the plug. Yes, I had a really cavalier attitude compared to most people here, but I now realize that I should not push my luck and must pay more attention to financial matters.
My story is very similar. I was just punching along doing what I liked to do and making investments that interested me. One day a letter came across my desk asking if I wanted to sell my practice and 90 days later, I was out of a job. I've read most of the investment books recommended over the years. I could highlight the important stuff in less than 30 seconds. Tav strategies are more complex and rewarding. By far the biggest surprise is how egregious the tax code was when I was working and how accommodating it is now. For example, if I had worked until 67, I would have paid an additional 225 thousand dollars into the SS system and would only have gotten a handful of dollars more per month.
__________________
Gatordoc50 is offline   Reply With Quote
Old 12-11-2013, 03:58 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by daylatedollarshort View Post
I have never read the Wealthy Barber. My initial comment about scrap dealers was based on the research from the Millionaire Next Door author about the scrap dealers versus doctors -

"Simply put doctors could and should accumulate much more and at a much younger age.......for every one high income producing doctor who is in the balance sheet affluent category, there are two in the income statement affluent category. It's just the opposite for self employed business owners."

From -
Emphasize Net Worth-Part I

and

"Auto salvage/scrap metal dealer has been on my top 20 blue collar millionaire business list since the first year I started conducting research on the millionaire next door."

One Man's Junk, Another Man's Treasure
I don't doubt that there are some wealthy scrap dealers, perhaps a high portion of them They deserve it, spending their lives in cold metal scrap and auto salvage yards. I spent a lot of my youth scrounging around junk yards, and I certainly would not been attracted to it as a career. Also, it takes some heavy capital to get into the business today, mostly because there are higher use competing usages for the land needed. And don't forget zoning. Not many suburbanites wan to live next door to wrecking yard and auto compactor. Ranks right up there with a hog farm or slaughterhouse.

I don't trust these books. They are written to find a ready market. But on a blind bet, I would never expect to find for example, more NW$5mm scrap dealers than $5mm doctors in any city of at least medium size. Another thing that I might mention is that much balance sheet affluence on the part of mundane businesses comes from the fact that the owners need that investment to operate their business, and also from the frequent fact that the entire family is pressed into service. Likely not a bad idea at all, but a hard sell to non-immigrant Americans today. An anesthesiologist for example basically needs a stethoscope and a couple of nice suits to be in business, in contrast to the dedicated balance sheet of some of these other operations Plus his hands stay clean. Let us not forget that most people like to live life today, not at some future time when they will be ER. The message is somewhat like the early Christian message, be good and behave and think good thoughts and don't have too much fun and you shall find your reward in ER.

I can't quarrel with this, but if I had had a reasonably secure business that spun off a lot of cash, I would not have been as easily sold on frugality. For me, it is a necessity, not a desired virtue.

Anyway, my favorite part about your post what about what a mensch your friend is. I am glad for both of you, and for the community at large. Better than a bunch of smart alecks like me.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 05:03 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.