One Million in Retirement Funds, Can I go Part time now?

[sheehs1]

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.

 

[NW-Bound]

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.

 

[someguy]

NW bound, what was your gross savings rates during your FT employment and during your PT "wind down"?

 

[free2020]

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.

 

[jetpack]

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.

 

[youbet]

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.......

 

[haha]

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...

 

[daylatedollarshort]

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.

 

[haha]

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.

 

[daylatedollarshort]

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.

 

[NW-Bound]

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.

 

[haha]

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

 

[daylatedollarshort]

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

 

[Gatordoc50]

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.

 

[haha]

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

 

[daylatedollarshort]

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 didn't really get any of that message from the book at all, but of course you are free to think what you want. I think the message is that the people who are really balance sheet affluent are often the people you least suspect, people in dull normal businesses, precisely because they save their money and have their money make money, instead of spending it on conspicuous consumption goods. I don't think that is too different than how a lot of people who post here live and were able to reach FI earlier in life than most.

The original TMND was written by two university professors with experience in marketing and surveys. That would be a pretty big story if all the data, charts and surveys in the book and successor books were all just made up numbers.

I didn't see anything about not having too much fun, just that fun doesn't have to cost a lot, like museum visits or attending kids sports games, or if it does cost a lot it should be a tax deductible business expense, like a business trip to Paris.

 

[mn54]

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

Now you've done it!! The librarians of the world will join forces and make your life a living hell! I hope for your sake you don"t have any overdue books.

 

[NW-Bound]

... 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...

Most people would rather be a millionaire doctor than a millionaire scrap metal dealer. However, many doctors also forget that their human capital is susceptible to accidental losses and also not transferable. They can certainly buy insurance for that risk, and I wonder how much that would cost.

 

[daylatedollarshort]

Most people would rather be a millionaire doctor than a millionaire scrap metal dealer.

I wouldn't sell the scrap dealers short. No degree required, a possible early start on the career (more earning years), no tuition debt or expense, no responsibility for human lives, no keeping up with the Joneses factor from the other scrap dealers, no malpractice insurance required, scalability and a job that can potentially operate without their on site presence every day.

 

[NW-Bound]

No, not selling anybody short. People can make money in many different ways, and that takes different temperaments and mindsets.

Like many other businesses, to be a scrap dealer requires a certain entrepreneurial mind and also skills which many booksmart people lack. And if you ask a youngster if he knows the steps to become a scrap dealer, you would draw a blank. I myself would not know where to start.

 

[haha]

Scrap Metal Business-Get it While It's Hot!

Scrap Metal Dealers For Sale | Buy a Scrap Metal Dealer For Sale at MergerNetwork.com

To forestall difficulties about nakedness, be advised that the above link will take you to listings of scrap dealers for sale.

I might add that there are much lower capital requirements for certain business niches. For example, there is a homeless guy who passes my building every so often with a couple sacks full of aluminum cans. He often checks our recycling bin to see if he can top up his other findings with what might be there.

Also, I have personal experience in this business. During and just after WW2 when the economy was short of everything, my mother told me whatever I could haul home we would drive to a scrap dealer about 4 miles away. I had my trusty red wagon, and I brought back good quantities of newspaper most days I went out. Prices were high, and we took ourselves to some movies and stopped for some malted milks, compliments of this business. I steered clear of metal, for various reasons, not the least of which that the lacerations from messing with it were painful.

I had other boyhood businesses, many of which inform my attitudes toward much of this today. I operated a fruit and vegetable stand at my GP's farm, and when I came home my mom would haul some produce back and again using my trusty red wagon I took it around and sold it. The proceeds were mine, and I enjoyed this part. What I found less pleasant was the surprising number of housewives who set out to beat me on price. A good lesson perhaps, but not a pleasant one.

Ha

 

[NW-Bound]

I dunno. I don't think the purchase of a scrap metal business comes with a user operating manual, which somebody like myself would need. It looks as tough to me as going to school for an MD degree.

Wait a minute! Why are we talking about this? Aren't we all retirees that are done with our career and just coasting down? Or is this talk spurred from the market action the last few days?

 

[haha]

I dunno. I don't think the purchase of a scrap metal business comes with a user operating manual, which somebody like myself would need. It looks as tough to me as going to school for an MD degree.

Wait a minute! Why are we talking about this? Aren't we all retirees that are done with our career and just coasting down? Or is this talk spurred from the market action the last few days?

None of the above. Sheer fantasy, like moving to Tierra del Fuego, which is reported to have an amazingly low COL.

My kids rightly did what they wanted to, not some goofball idea that I might have had. But in the spirit of imagining new beginnings, for pure safety and a good living that even if you live very well day to day will give you a comfortable early out, go Federal young person!

How about a bright typical bookish but not particularly original or creative kid trying this plan. Find a state school with a good law school, and reasonable prices and contrive to establish residency. If you graduate high in your class, head to some DC regulatory arm, or even Justice. If you are hot, enjoy the old revolving door and you may wind up very wealthy. If this is not your bag, grind away in DC and enjoy the abundant social life for young people there.

If you don't make the DC grade, there are 50 states and Puerto Rico. All these states have capitols full of lawyers.

I once had a friend who was so nervous during law school that she vomited regularly. Still, she found a very nice well paying low key job working for some utility commission doing rate hearings and is snug as a bug in a rug there.

And let us remember, these white collar jobs position us for the kind of social life that suburban high schools and most colleges lead us to expect. Why stop partying at high school graduation? Plus they are physically clean, warm in winter and cool in summer, and we often get a nice grey government car.

Ha

 

[NW-Bound]

None of the above. Sheer fantasy, like moving to Tierra del Fuego, which is reported to have an amazingly low COL.
...
How about a bright typical bookish but not particularly original or creative kid trying this plan. Find a state school with a good law school, and reasonable prices and contrive to establish residency. If you graduate high in your class, head to some DC regulatory arm, or even Justice. If you are hot, enjoy the old revolving door and you may wind up very wealthy. If this is not your bag, grind away in DC and enjoy the abundant social life for young people there...

Just joking about any of us pursuing another career this late in our life.

About becoming a lawyer, my daughter was thinking about it after getting her BS degree in accounting. The law school professor at the state university talked her out of it. Said only graduates from the top schools could get anywhere, and many lawyers did not make that much. So, she took her graduate studies in another program, and just had a promotion to a management position along with a nice raise. I never ask my children what they make, but she volunteered that she is making as much as my son's engineering job now. They are both doing OK, though not making as much as either MDs nor scrap metal dealers.

 

[Dawg52]

Just joking about any of us pursuing another career this late in our life.

About becoming a lawyer, my daughter was thinking about it after getting her BS degree in accounting. The law school professor at the state university talked her out of it. Said only graduates from the top schools could get anywhere, and many lawyers did not make that much. So, she took her graduate studies in another program, and just had a promotion to a management position along with a nice raise. I never ask my children what they make, but she volunteered that she is making as much as my son's engineering job now. They are both doing OK, though not making as much as either MDs nor scrap metal dealers.

I always thought being an ambulance chaser might be fun. But like my dog, sniffing and peeing on the tires is about all I would be qualified to do.

One of my old golfing buddies is a lawyer. Mainly handles real estate transactions, collections, simple wills, etc. I never got the impression he made a lot of money. He's a solo act, doesn't even have a secretary. Goes in the office on Sunday afternoons to do his billing. Drives a 15 year old car his Dad left him. Says he will will have to work for many years to come. Kind of sad because I know he's a smart guy. But I know another lawyer who made a killing on a couple of cases. And he retired in his early 50's.

So like many fields, there can be a wide range of income in the legal profession.