Intro and how I FIRE'd "the man"

[DewTX]

As a frequent reader of this site, I decided it was time to introduce myself.

I am 51 and had been in the high-tech industry about 25 years after graduating in engineering. I was aggressive in my career growth and eventually was one of the first employees of a small technology company as an executive and VP of worldwide sales. Yes, I had stock options and we had a wildly successful IPO. Over +8 years, we grew the company from $500k to $200 million/year in sales.

The pressure of running sales, constantly having to meet/beat market expectations, flying all over the world to meet with customers and suppliers and running a multinational business took a heavy toll on me and my family.

Throughout my career, I dreamed of firing "the man" and retiring by the time I was 50. I finally pulled the trigger about 5 years ago...I quit w*rk and I sold ALL my stock at it's peak. I wanted all the assets under my own control, so I kept no "souvenir" shares. Over the course of the next few years, without me, the stock dropped to 1/20th of what it was when I sold, making me very glad I jumped when I did.

But what to do? First, I immediately started an international charitable foundation, which I continue to run and donate to. Through the years it has provided nearly $1 million to victims of natural disasters.

Despite my career, I had always owned rental properties and decided that was the best way to allow my assets to work for me. I diversified about half my assets into real estate and have several properties now. Most importantly, I don't work for "the man".

I have no debt and all of my properties are fully paid for.


A snapshot of my financial picture is as follows:

*7 properties total (total value about $1.5 million) as follows:

-4 rental properties, generating about $6k/month in rent, netting about $4k/month after taxes, insurance and repairs. All are usually rented and pretty low work. I do many repairs myself and also have a good source of skilled labor as needed. I don't intend to buy any more properties as these four seem to be the sweet-spot for managing them myself-I stay busy, but not too busy.

-My sons live in one property, located close to their university. They take care of it and have a couple of roommates who pay rent-which then pays for most of their college tuition with no dorm living. They also maintain good jobs while going to school.

-A small house that my mom lives in.

-A beautiful ten-acre property with a simple home where just my wife (a teacher) and I live. All of my rental properties are within 15 mins of where we live, so I am able to easily manage them from my home office. Part of the property could be developed for yet another rental house or two, but hopefully will remain as is. My wife intends to continue to work for at least another 10-15 years.


*About another $1.5 million in securities, with about a 50-50 mix of diverse equities and fixed-income investments, managed by a top, well-known financial group.

With the current recession, I took a hit of about $500k in my securities but would have lost easily twice that if I had not diversified my portfolio and purchased real estate. The rental market in my city is strong and although values are down, I don't intend to sell, so I have a nice, steady cash flow.

Unlike most people, my dream was to retire and NOT travel. Although I still travel some with my foundation, it is on my terms.

The very worst thing for me would be to have to go back to traditional w*rk.

In summary:

$1.5 million in real estate.
$1.5 million in securities.

Total assets: $3 million

Real estate net income: $50k/year

Securities income: assumed $0/year
Due to the recession, I have paid no income taxes for 3 years now as my losses have continued to carry over. If I ever start making money again in the markets, any upside will be re-invested and not drawn down as I want to be able to fully live on the real estate income alone.

Social security income: $0 now
Probably $1500/mo in 15 years.

Wife's income: $50k/year

Total debt: $0

Family health insurance: $6000/year
Total living expenses: $60k/year


Typical days include working out, doing most of the cooking and household chores (which I love to do), playing on my tractor on our beautiful property, driving my (old but classic) sports car, some office work, and keeping up with my real estate biz.

So, my questions for this forum are what do you think of my plan and any suggestions how I can ensure that this plan continues to support my chosen, "semi-FIRE'd" lifestyle? Any other things I may have missed or need to pay attention to?

Otherwise, I encourage everyone: FI can be achieved. But it requires work and sacrifice every step of the way. New cars, big homes and fancy vacations are the surest way to NOT make it. Quick-rich and low-effort schemes rarely happen. A big key is diversity and active involvement in managing your affairs. If done carefully, there is also plenty of room to give back to the world, to help others.

I look forward to contributing to this excellent forum in the future. Any comments are greatly welcomed.

Thanks!

A

 

[Beryl]

Sounds like you did it all just right, A. Bravo!! It sounds like you've quit "the man" and established your own low-maintenance business in real estate. Since you own the properties, you don't have to worry as much about occupancy. Too many people with investment properties were hit by the economic downturn. I'm looking forward to reading more about how you manage your investments.

I have a BIL who never gives up on "quick-rich & low-effort schemes". They see him coming and he falls for them every time. As a result, he stays broke and in debt. FI does require hard work, sacrifices and wisdom. Sounds like you've got all of these factors working for the benefit of you and your family. I trust your sons will also make good financial decisions with you as a mentor.

I believe luck (or blessings) also plays a part in the road to FI. You were fortunate enough to be able (intellectually) to obtain an engineering degree and land a position in a company that did well. You were also smart enough to get out at the right time. It doesn't sound like you've been hit with any major illnesses (either yourself or a loved one) that could have had a negative impact on your finances.

When reading that your wife is a teacher, I remembered the few years I taught secondary and college mathematics prior to joining a major IT Corp. If I had remained in teaching, I doubt I'd be FI so early. (It is a pity that we pay our teachers so little. If I was Queen of the USA, I'd change that.)

I've been asked to play "Suze Orman" to some of my friends and relatives. As I counsel them, I often find that they've made poor decisions but also they've been hit by things that were outside of their control. It motivates me to count my blessings.

 

[Htown Harry]

Welcome DewTX!

A very nice nestegg, charitable interests, a tractor, a wife with summers off, just enough of a business to keep you busy, and an outlook that clearly shows you are comfortable with who you are...

No, I don't have any advice for you. Feel free to jump right in and become one of the advice givers here on the forum.

 

[aaronc879]

. (It is a pity that we pay our teachers so little.

He said his wife earns $50K/yr. That's not "little". That's more than the average individual income in the US and she get 3 months in the summer plus spring and christmas breaks along with sick and vacation days off plus a generous pension and healthcare. I'm not saying teachers are living large but after the first few low paying years they do pretty well.

-A beautiful ten-acre property with a simple home where just my wife (a teacher) and I live.
Wife's income: $50k/year
Family health insurance: $6000/year

If your wife is a teacher then why do you pay 6000/yr for healthcare. Isn't that paid for mostly by her employer?

 

[obgyn65]

Thank you, DewTX, for giving back to the community. I do not think there is any happy retirement without some form of giving back.

But what to do? First, I immediately started an international charitable foundation, which I continue to run and donate to.

 

[Beryl]

He said his wife earns $50K/yr. That's not "little". That's more than the average individual income in the US and she get 3 months in the summer plus spring and christmas breaks along with sick and vacation days off plus a generous pension and healthcare. I'm not saying teachers are living large but after the first few low paying years they do pretty well.

Yes, $50K/yr is more than the average income in the US but teachers have invested in a higher education level than the average worker.

I guess "little" is all relative, no? I agree that it does depend on the subject area though. For example, teachers with math & science (including computer science) degrees are paid considerably lower than average. The OP has a degree in engineering so he can relate to this comment.

My degrees were in mathematics and related areas and I could not afford to stay in teaching but the joke around my office was that I was on a 30 year sabbatical from teaching. I stayed relatively current with the profession but I also know that compensation varies greatly by location.

1. You are right about healthcare and the fact that pensions still exist but that also depends on where you teach. Few private schools are as "generous" so shall I assume that you are referring to to public school teachers?

2. Many public school teachers don't get the 3 summer months off anymore. They are lucky if their district gives them 30 or at most 45 days now. Also they don't get the entire winter and spring breaks off as they did in the past. They are not compensated for this additional work time.

3. The better teachers work 10-12 hour days. It gets easier after the first few years but the hours you spent planning lessons are later used to help coach those who need/want/deserve your uncompensated time. In the corporate world, I worked 12 hour days but I could take off a few days after several 80 hour weeks or start work late after working all night on a project. You can't do that as a teacher.

4. Don't get me started on the "out of pocket" expenses that are not reimbursed. Districts are so scrapped that many teachers spend their own money for teaching supplies. I did that in the corporate world for technology (cell phones, better laptops, printers, etc.) but that technology benefited me as much as it did my employer.

I can go on but I hope this better explains my comment about teaching. I maintain that teachers are not paid nearly what they are worth and I have a lot of respect for them.

 

[Letj]

I agree with you Beryl. I don't think the US will ever catch up to the rest of the Western World in terms of teacher pay. It's a shame that our society considers teaching less valuable than many other professions.

 

[BigNick]

I agree with you Beryl. I don't think the US will ever catch up to the rest of the Western World in terms of teacher pay. It's a shame that our society considers teaching less valuable than many other professions.

I'm not aware of any European country where public school teachers are compensated as well as those in many parts of the US. French teachers make about $30K/year.

 

[Nords]

Welcome to the board!

But what to do? First, I immediately started an international charitable foundation, which I continue to run and donate to. Through the years it has provided nearly $1 million to victims of natural disasters.

What made you decide to start your own foundation instead of using a charitable gift fund or giving it to some other charity? It's hard to tell whether you've done a Charles Feeney, but I've read that the process of starting a foundation is becoming prohibitively expensive/cumbersome for anything under eight figures.

So, my questions for this forum are what do you think of my plan and any suggestions how I can ensure that this plan continues to support my chosen, "semi-FIRE'd" lifestyle? Any other things I may have missed or need to pay attention to?

Reminds me of my first post here-- the feeling that you're missing something or that it's "too easy" or that the ER jungle is "too quiet".

At this point I'd say the biggest danger is restlessness and the temptation to tinker with the status quo... starting another business seems to tempt a lot of people at this stage of their ER. But I suspect your tenants will keep you from feeling bored, unfulfilled, or lonely.

 

[ERD50]

I agree with you Beryl. I don't think the US will ever catch up to the rest of the Western World in terms of teacher pay. It's a shame that our society considers teaching less valuable than many other professions.

I'm not aware of any European country where public school teachers are compensated as well as those in many parts of the US. French teachers make about $30K/year.

Maybe Letj and Beryl mean to to say "catch down to"?

2. Many public school teachers don't get the 3 summer months off anymore. They are lucky if their district gives them 30 or at most 45 days now. Also they don't get the entire winter and spring breaks off as they did in the past. They are not compensated for this additional work time.

I'm curious how you come to that conclusion?

-ERD50

 

[Beryl]

I'm curious how you come to that conclusion?

-ERD50

I was planning to return to teaching after retiring early and my employer offers a bridge to teaching program. My conclusions are based on information from school districts of interest and statements from existing teachers and those in the aforementioned program.

Perhaps your "catch down to" comment was just a joke and you are aware that BigNick's comparison of US teacher salaries and European ones is flawed on many levels.

 

[ERD50]

I was planning to return to teaching after retiring early and my employer offers a bridge to teaching program. My conclusions are based on information from school districts of interest and statements from existing teachers and those in the aforementioned program.

Perhaps your "catch down to" comment was just a joke and you are aware that BigNick's comparison of US teacher salaries and European ones is flawed on many levels.

Not a joke - neither of you provided backup data. I have no way of knowing which (or if any) statement is more accurate. I thought that maybe my comment would bring out some data.

But you provided an anecdote, not data. I fail to see how BigNick's comparison could be considered any more or less flawed than your own.

And if you do decide to provide data, please include the value of the full compensation package, not simply salary.

edit/add: Sorry, without the embedded quotes I realize I wasn't sure which quote of mine you were responding to. I wrote my response as if "that conclusion" referred to BigNick's comments on US versus Euro teacher pay. But maybe it was to the 'uncompensated additional time'. I'll just say that I'd be a bit surprised that the Union allowed hours to be added to the schedule. I'm not aware of Spring or Winter or Summer breaks being cut short in our area. That doesn't mean it isn't happening somewhere, but I'd be interested in a reference if you have it. Maybe I could use it as ammunition to get more teaching time for our students here, with little added cost. That should be good for our children.

-ERD50

 

[Beryl]

ERD30 - clearly you entered this thread to debate and/or argue. I'm not participating. You can either do your own research like I did or wait for someone to indulge you.

All is positive and blessed out my way and it will remain that way. Take care.

 

[ERD50]

Beryl - OK, I'll bow out. Please recall the subject was started by yourself in posts #2, and continued in 6 & #7. I don't think it's unreasonable to ask for backup to statements like that.

-ERD50

 

[brewer12345]

OP, you missed one thing: you should immediately put your entire net worth into an Equity Indexed Annuity.


Just kidding. Congratulations.

 

[DewTX]

Teacher salaries vary wildly based on location, experience, tenure and education. Beryl and Letj understand this and made excellent points.

My wife has a master's degree and several special training certificates. She is a reading specialist and a trainer of teachers. She started out with a marketing degree, worked for a bank for several years right out of college and was not fulfilled, so she took a pay cut to follow her passion.

Medical insurance is available, but extremely expensive for the whole family, so we have separate, private insurance.

Pensions and retirement-what is that? Summer's off?-yes, but no pay if no work. Reimbursement for costs of supplies?-nope.

I chose engineering because it pays well and I had a knack for it. I could whine about doctor's pay-"they make so much money!". But, I don't want to do what they do, so let them make what the market will pay. As with ANY job, it is based on the market-the pay adjusts until there is a saturation of workers.


Otherwise, I started the foundation, instead of just writing a check, because we had the skills and time to do it very efficiently, turning more of the benefit to the people. Our message is that everyone can help-whether in your families and communities, or across the world. And it doesn't matter how much money you have either!