Retire Early with a fun $30K job?

[Shabber]

OK, new theory. I am 39 with $250K saved in money mkts, own half a business that I work my tail off in but makes about $300k/year for me. New idea is to sell my half to my partner for 250-300K and take the half million. Retire early, draw out 27K a year, get a "fun" job making 30K a year and live my life with no stress in partial retirement. Any thoughts?

Oh, and I will get a large inheritence when I am approximately 58 that will set me up for life. Main concern is capturing and enjoying the next 20 years.

Your thoughts are wanted. Am I crazy.

One other note, my business is a very stressfull, 12 hour a day, high turnover business that isn't much fun to go to anymore. Or perhaps I work one more year and tough things out for another 200K in savings.

- Shab

 

[Mwsinron]

Must be pretty bad if you need to tough it out for 300k a year.... :

 

[macdaddy]

Shabber I would say tough it out for another year and double your savings. Maybe setting an exit date would help it seem less stressful in the meantime. What kind of business are you in? If it's something like mortgage banking that might be hit hard in the near future, then maybe it would be better to sell out now while the valuation is higher.

 

[rs0460a]

I will get a large inheritence when I am approximately 58 that will set me up for life.
- Shab

- Shab,

I would recommend that one never includes any "assumed inheritence" in their plan.  That's one of the main things in life that can change in the next 20 minutes, let alone 20+ years (been there, done that...)

- Ron

 

[becca]

That's so true, my assumed inheritance is slipping right out the window, my extremely healthy 87 year old widowed father has hooked up with a 71 year old divorcee who (along with her children and grandchildren) are sucking every cent he has out of him and we (his children and grandchildren) are sitting by watching it happen, unable to do a thing about it. We never saw that one coming.

 

[Rich_by_the_Bay]

You have an interest in a business grossing $300K/y for you that you would sell for $250-$300K?

 

[maddythebeagle]

my extremely healthy 87 year old widowed father has hooked up with a 71 year old divorcee who (along with her children and grandchildren) are sucking every cent he has out of him and we (his children and grandchildren) are sitting by watching it happen, unable to do a thing about it.

...that must be so hard watching others spend your hard earned money

 

[setab]

"Fun job" is an oxymoron.

setab

 

[SteveR]

As with any financial decision, you need data. 
Can you live on $57k for the next 20 years?  Do you really want to based on your current income of $300k?  That is quite a difference.

Would you be able to fund health insurance?

Are you married of have a patner?  How do they feel about this?

Kids?  College?  Health insurance?  Other?

Housing situation.  Rent? Own? can you afford the mortgage or rent?

What do you want to do instead of what you are doing?  Can you do that for the next 20 years? 

Like Rich said...seems odd to only get one years income from selling your half of the business. 

 

[Leonidas]

You're not crazy to want to enjoy life rather than be a slave to work. But, as most of the other posters have pointed out, it seems like your dream and your reality have some conflict. Not that they can't be brought into alignment, but it looks like the dream is to live on $57K a year and up to now you've been living on several times that amount. Seems like a mighty big adjustment to make.

I saw someone suggest this idea elsewhere on this board. I didn't do it, but it has some appeal. Figure out what you will be able to spend in ER and, while still working, cut your expenses to that amount for a year. If you pull it off you will know that you can make the necessary changes and will have saved some extra cash for ER - especially in your case it would seem.

 

[kaudrey]

I'm with SteveR - I'd ask more questions.

The business makes $300k a year, you say you can save $200k if you work another year, which implies that you spend $100k a year now.

Your plan gives you $57K a year.  That's a big difference.  Have you crunched the numbers based on expenses instead of income?  

What if the inheritance doesn't happen?  

Some additional information would help us better think about your scenario.

Karen

 

[Jarhead*]

That's so true, my assumed inheritance is slipping right out the window,  my extremely healthy 87 year old widowed father has hooked up with a 71 year old divorcee who (along with her children and grandchildren)  are sucking every cent he has out of him and we (his children and grandchildren) are sitting by watching it happen, unable to do a thing about it.  We never saw that one coming.

Well, your 87 year old father still has an eye for the "young" chicks.

Good for him. 8)

 

[sendbaht]

I'd say if you made $400 now a year I'd retire not skimping by on $300.

Be a park ranger and enjoy your savings. You'll be 58 in no time.

 

[TromboneAl]

If you're willing to take some risk, I say your plan is doable. Here's my thinking:

1. You're only 39.

2. You have the skills necessary to start a successful business. So if things don't work out you could get a better paying job or start a new business.

3. If you invest your 500K and get 4% over inflation, you'll have 1,095,561.57 (today's dollars) when you're 59.

Problems:

1. You're assuming you can find a fun job. I think you're reasoning is "If a job that pays me $300,000 is hard and not fun, one that pays only $30,000 will be only 1/10th as hard."

2. You might find that you don't like working for someone else, start a new business, and have it fail.

For less risk, follow MacDaddy's advice (however, I think that setting an exit date will make it feel more stressful, not less).

 

[WRBT]

You have an interest in a business grossing $300K/y for you that you would sell for $250-$300K?

My thoughts exactly.

PM me dude, If due diligence comes thru maybe I'll buy it for $305k

 

[Texas Proud]

I am with a number of the posters with many questions...

You say you only have $250,000 at age 39, but are making $300,000 per years... where did you spend all the rest of the money

If you can save $200,000 in one year, then again, why only $250,000 in savings?

If it really is making $300,000 per year, then it would be worth a lot more than that to sell... at least over $1 million... but, is it really? Does you partner have to work twice as hard to get the $300,000 that you make?? If someone goes, someone else has to come in and do the work.. maybe he can not and your share is worth zero..

Like someone else said, can you live on $57K Not likely if you have been making $300K...

What is a fun job to you And why do you think there will be no or low stress in that job. Most of the low paying jobs I know of the people have to work like you are today but are low pay... so, you can do the same or similar, but earn on 10% of what you make now..

 

[Scrooge]

The business makes $300k a year, you say you can save $200k if you work another year, which implies that you spend $100k a year now.

Well, there is that thing called "taxes" as well   However, even ignoring the tax implications for now, the OP wrote that his/her savings were at $250K (at age 39) and that s/he could save another $200K in one year. Almost doubling one's savings in one year would be a sign of either drastically changed earnings or drastically changed saving habits. In either case, it's a sign of volatility, which usually makes giving advice difficult.

 

[Scrooge]

TexasProud made a number of good points, but as far as the following comment goes:

And why do you think there will be no or low stress in that job.  Most of the low paying jobs I know of the people have to work like you are today but are low pay... so, you can do the same or similar, but earn on 10% of what you make now..

it is conceivable that the OP has a particular job in mind that s/he knows well and is sure that it will be a low stress and satisfying one. Of course, s/he may still find out that s/he was wrong about that 

 

[HFWR]

work <> fun...

 

[SteveR]

work <> fun...

Very true. If it were fun they would not call it work.

 

[CybrMike]

My opinion is you are out of your freaking mind. Work at the 300K per year job until it runs out or you've saved up a couple million or more.

 

[laurence]

Why would a business grossing 300k for you only sell for 300k Wouldn't you be able to sell it for 7 figures?

 

[Kronk]

Depends on how tough it would be for a new owner to step in. If the job requires a whole lot of contacts and/or specialized knowledge, that drives the selling price down.

 

[yakers]

Why would a business grossing 300k for you only sell for 300k Wouldn't you be able to sell it for 7 figures?

Consulting job in Iraq?

 

[just_hatched]

work <> fun...

Hey - what happend to that filter? I'm seeing the whole word again! NO!!!