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Old 11-01-2012, 10:39 AM   #41
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Originally Posted by NW-Bound View Post
I never heard of Joe Dominguez and his book until I came to this forum. I guess that was because I did not aspire to retire early until a few years ago. I still wanted to accumulate more money, as I still liked to work.

Anyway, Joe was said to retire in 1969 at the age of 31 with $100K. That is equivalent to $631K today. A lot less than many people in this forum would consider sufficient, but he did have some money. He died in 1997. I am curious to know how his stash held up during his retirement years.
I believe he had everything invested in treasury bonds, and lived solely off of the interest. That is what earlier versions of YMOYL plugged. It has since been updated since this approach was just too conservative for most. So his stash probably held up quite well.
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Old 11-01-2012, 10:47 AM   #42
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With conservative investments like that, he would not be able to draw all the interests, and must allow for inflation, else his principal would have shrunken dramatically in buying power.

In Jan 1997, his initial $100K would be equivalent to $28.9K in Jan 1969! So, he would have to live on just a fraction of the interests. That made it that much harder.
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Old 11-01-2012, 11:02 AM   #43
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If you really don't like what you are doing at age 28, I think it makes sense to pivot and find your passion. You only get one life.

X 2! The is a little book called "Working Smart" by Michael LeBoeuf. It is mostly about time management, but the first couple of chapters walk you through a system to help you figure out your priorities and what you really want out of life (and therefore what should be the most important priorities on your calendar).
I would start with that.

There are many jobs that fit the description of what you like (including some that could benefit from an MBA, like resort management).
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Old 11-01-2012, 11:43 AM   #44
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Joe died of cancer at a relatively young age -- is that what you are referring to?
Of course not. If you are familiar with Joe's financial position through his life, and feel good about emulating that path, then it's for you.

Ha
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Old 11-01-2012, 02:36 PM   #45
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Joe died of cancer at a relatively young age -- is that what you are referring to? Other than that unfortunate and untimely end, I don't see a lot of difference between his lifestyle and that lived by many members of this forum.
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Originally Posted by NW-Bound View Post
Anyway, Joe was said to retire in 1969 at the age of 31 with $100K. That is equivalent to $631K today. A lot less than many people in this forum would consider sufficient, but he did have some money. He died in 1997. I am curious to know how his stash held up during his retirement years.
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Originally Posted by catccc View Post
I believe he had everything invested in treasury bonds, and lived solely off of the interest. That is what earlier versions of YMOYL plugged. It has since been updated since this approach was just too conservative for most. So his stash probably held up quite well.
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Originally Posted by NW-Bound View Post
With conservative investments like that, he would not be able to draw all the interests, and must allow for inflation, else his principal would have shrunken dramatically in buying power.
In Jan 1997, his initial $100K would be equivalent to $28.9K in Jan 1969! So, he would have to live on just a fraction of the interests. That made it that much harder.
Here, let me get that for you.

From 2011 Update: Real-Life Retiree Investment Returns :
Quote:
Two prominent early retirees have followed the 100% fixed income approach. Your Money Or Your Life author Joe Dominguez invested in only US Treasury securities when he retired in 1969 at age 31 and continued to champion that approach up until his death in 1997. Dominguez retired in 1969 with a $100,000 portfolio and $7,000 per year in living expenses. An August 1996 Kiplinger's Personal Finance Magazine article revealed that Dominguez was then living on about $13,000 per year. To keep pace with inflation, $7,000 in 1969 would need to grow to $30,360 by 1996 to maintain the same purchasing power. Dominguez managed this loss of spending power with unusual living arrangements (he lived in a group home with about 30 other people) and a lot of composting and the washing and reusing of tin foil and wax paper -- a strategy that few early retirees would tolerate.

Paul Terhorst, author of Cashing in on the American Dream: Retire at 35 limited his investments to a laddered portfolio of FDIC-insured Certificates of Deposit (CDs) when he retired in 1984. His web site ( http://www.geocities.com/TheTropics/Shores/5315/ ) reveals he holds "a more traditional portfolio heavily weighted with low-cost [equity] index funds" today.
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Old 11-01-2012, 07:32 PM   #46
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Here, let me get that for you.

From 2011 Update: Real-Life Retiree Investment Returns :
That Web page contains excellent info on how different portfolios would fare in the recent years, including the Great Recession we just went through.

I have bookmarked it, and will study it some more. The info on how a pure fixed-income portfolio fared in the past will still be dismissed by some people as impossible to recur in the future, but hey, it's their money. I can and will only worry about my own.
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Old 11-01-2012, 07:56 PM   #47
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Here, let me get that for you.

From 2011 Update: Real-Life Retiree Investment Returns :

Thanks for the link - I'll definitely spend some time investigating and understanding the data. I've long been a YMOYL proponent for everything except the fixed income approach. The stock market is the way to go for me and DW.
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Old 11-01-2012, 08:35 PM   #48
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Of all the plans I have read people considering on this board this looks like the worst one. The chances of success would be vanishingly small.
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Old 11-02-2012, 07:36 AM   #49
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Thanks for the link - I'll definitely spend some time investigating and understanding the data. I've long been a YMOYL proponent for everything except the fixed income approach. The stock market is the way to go for me and DW.
+1. As I'd mentioned before, I think the newer versions of the book dismiss the fixed income approach. But yeah, there's no way I'd get to FI or sustain a comfortable retirement investing only in bonds.

I actually didn't know how Joe's life turned out... bursted my bubble a bit to find out. But still, since his life was relatively short, it must have been nice to spend much of it in retirement, even if those last years don't sound so ideal.
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Old 11-02-2012, 07:46 AM   #50
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That's the key. At some point in a few years, maybe 5 when you get vested, you will look back and say "wow I have a few hundred thousand dollars". Having a little wealth will give you peace of mind and options that most of your peers won't have. I doubt you will reflect back and say "I wish I never accumulated all this wealth".
A few hundred thou after 5 years?? I want in on that! Took me longer than that to just get in the 6 figures. In the current environment it may take longer.
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Old 11-02-2012, 08:46 AM   #51
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1. You live and work in Boston (I went to college there and miss it tremendously).

2. You only work 9 to 5 and earn at least enough money to max out a 401k.

For what it's worth, I'm envious of your quality of life, as I imagine it. As ShortInSeattle said, the grass is always greener...

I'm a couple years younger and make pretty good money (enough to max out all of my own retirement accounts) doing what many people think would be a cool job, but it involves living in a "city" that is dominated by 45 mph roads and big-box shopping centers (no culture or sidewalks), and the hours are more like 6 to 6 plus phone calls at any hour of the day or night. And that's when I'm not "working overseas," which I'd rather not even think about right now. But I'll stick with it knowing that I'll eventually transfer to another city, and hoping that my 6 to 6 will eventually become more like 9 to 5.

Over the last few years I've arrived at this philosophy: A job is a job, and if it were truly fun and fulfilling we wouldn't be getting paid to do it. Having one that is tolerable and pays me well enough to do what I enjoy outside of work, and ultimately retire, is probably the best case scenario.

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Old 11-02-2012, 09:48 AM   #52
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A few hundred thou after 5 years?? I want in on that! Took me longer than that to just get in the 6 figures. In the current environment it may take longer.
It seems reasonable. Per the OP:

Quote:
I currently have about $24k in a traditional 401k (I started working late). I have budgeted and believe I can fund the allowed $17.5k annual contribution beginning next March, once I've finished paying down revolving debt. Assuming that I continue contributing what I do now, max out my contribution beginning in March, that I remain until the 5 year mark, and that my investments earn 8% annually during that period, I will have just over $160k in retirement. Forecasting conservative annual raises, no promotions, and using my current spending rates, I think that I would have about $30k cash, as well as about (15k) remaining in student debt @ 6.8% - monthly payments of about $150.
He just needs to keep saving and investing per his plan and he will probably be around $200k (cash + 401k) in 5 years or so. Looking back at our investment growth over the first five years of post university employment, it was a bit more than a "few hundred thousand", so definitely doable (depending on your income of course).
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Old 11-04-2012, 06:17 PM   #53
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Denefi,

I don’t check into this board often anymore, so I just discovered your 10/29 post. Our situation long ago was similar to yours, and while I can’t tell you what to do, I can tell you what my wife and I have done.


We both graduated from college in ’73; me with a BS in chemical engineering, she with a BA in English. I went to work in the chemical arm of Kodak. She first taught school then became an insurance agent. We both enjoyed hiking in the nearby mountains and bought our first sailboat (a 14’ Flying Fish) when we bought our house in ’75. Pre-kids (and for some time after) we talked about chunking it all and going hiking or sailing. In preparation we lived below our means and stuck money away whenever we could. At age 29 we had our first of daughter, work was fun, I got my masters degree, my USCG six pack, and we kept saving. We bought a Tanzer 22 and a used Blazer to tow it, kept the boat on a nearby lake, and vacationed on the NC or VA coasts. I spent time as an Appalachian Trail Maintenance Team member and later as leader. We had a second daughter, added onto the house, and continued to put money away. In ’90 I took a foreign assignment in England for eighteen months that grew to five years giving us a chance to see Europe and broadening the kids' horizons (and ours). At age 43 we returned to the US where my wife picked up a job with a different agency and I came back to a company that had changed and where I had lost my contacts. I thought about leaving, but stayed for the money, for the kids, and because the lakes and AT were here. We continued to travel with the Tanzer on the coast down to Florida and down the Tennessee River from Knoxville to the Ohio River. Ten years later the total kitty had grown to the place that 4% would replace my salary less the expenses that were work related. My wife retired to manage our first daughter’s wedding, and I retired a year later when I was offered a year’s pay to retire with benefits. That was 2004. We bought a Pacific Seacraft 34, berthed it in NC, and began splitting our time between home in Tennessee and afloat on that sailboat. The first two years we made trips into the Chesapeake Bay for a couple of months each. the third year we toured the coasts of North and South Carolina for two months. We have gone to the Bahamas each of the last five years leaving in January and returning in June. I still do AT maintenance work and have section hiked in 75 to 150 mile trips from Springer Mountain to Williamstown, MA. Both daughters are married with children (two for one and three for the other). One daughter is a nurse practitioner and the other works for a major newspaper. My wife knits, reads, volunteers, and is on the board of the local Imagination Library. We still have the two smaller sailboats (and the ’78 Blazer which still runs). We won the local sail club’s Commodore’s Cup race this year picking up our trophy last night at the annual meeting.


Although it has had its ups and downs, it has not been a bad life. Having a dream drove us to put money away from the beginning. Having the savings gave us the flexibility to leave work behind after the kids were on their own.

Bill
(The address of my wife's sailing blog is in my profile, just click on my name to the left.)
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Old 11-04-2012, 09:24 PM   #54
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Fact is I'm not sure that I like to work, period.


You don't work because you love doing it. Some people eventually find their way into something challenging that they like, but most people were not made for a 9-5. But what happens if you meet a woman, and want to get married and start a family? I'm guessing you may want a few more dollars in the bank, and I'm guessing you'll wish you didnt spend a few years in Alaska "finding yourself."

Money gives you the freedom to adjust your life plan as your priorities change. Don't plan around a minimalist lifestyle when your priorities can easily change.
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Old 11-05-2012, 11:07 AM   #55
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Originally Posted by wsmurdoch View Post
Denefi,

I don’t check into this board often anymore, so I just discovered your 10/29 post. Our situation long ago was similar to yours, and while I can’t tell you what to do, I can tell you what my wife and I have done.


We both graduated from college in ’73; me with a BS in chemical engineering, she with a BA in English. I went to work in the chemical arm of Kodak. She first taught school then became an insurance agent. We both enjoyed hiking in the nearby mountains and bought our first sailboat (a 14’ Flying Fish) when we bought our house in ’75. Pre-kids (and for some time after) we talked about chunking it all and going hiking or sailing. In preparation we lived below our means and stuck money away whenever we could. At age 29 we had our first of daughter, work was fun, I got my masters degree, my USCG six pack, and we kept saving. We bought a Tanzer 22 and a used Blazer to tow it, kept the boat on a nearby lake, and vacationed on the NC or VA coasts. I spent time as an Appalachian Trail Maintenance Team member and later as leader. We had a second daughter, added onto the house, and continued to put money away. In ’90 I took a foreign assignment in England for eighteen months that grew to five years giving us a chance to see Europe and broadening the kids' horizons (and ours). At age 43 we returned to the US where my wife picked up a job with a different agency and I came back to a company that had changed and where I had lost my contacts. I thought about leaving, but stayed for the money, for the kids, and because the lakes and AT were here. We continued to travel with the Tanzer on the coast down to Florida and down the Tennessee River from Knoxville to the Ohio River. Ten years later the total kitty had grown to the place that 4% would replace my salary less the expenses that were work related. My wife retired to manage our first daughter’s wedding, and I retired a year later when I was offered a year’s pay to retire with benefits. That was 2004. We bought a Pacific Seacraft 34, berthed it in NC, and began splitting our time between home in Tennessee and afloat on that sailboat. The first two years we made trips into the Chesapeake Bay for a couple of months each. the third year we toured the coasts of North and South Carolina for two months. We have gone to the Bahamas each of the last five years leaving in January and returning in June. I still do AT maintenance work and have section hiked in 75 to 150 mile trips from Springer Mountain to Williamstown, MA. Both daughters are married with children (two for one and three for the other). One daughter is a nurse practitioner and the other works for a major newspaper. My wife knits, reads, volunteers, and is on the board of the local Imagination Library. We still have the two smaller sailboats (and the ’78 Blazer which still runs). We won the local sail club’s Commodore’s Cup race this year picking up our trophy last night at the annual meeting.


Although it has had its ups and downs, it has not been a bad life. Having a dream drove us to put money away from the beginning. Having the savings gave us the flexibility to leave work behind after the kids were on their own.

Bill
(The address of my wife's sailing blog is in my profile, just click on my name to the left.)
What, to busy to visit the forum?
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