Lisa99
Thinks s/he gets paid by the post
- Joined
- Aug 5, 2010
- Messages
- 1,440
This is long, but I wanted to share a one year update since finding E-R.org and leaving Ameriprise has literally changed our lives.
Before E-R.org, I superficially understood investing terms like asset allocation, risk tolerance, and expense ratios and I thought investing was so hard that I could never do it myself. Then, a year ago this week I found this site and quickly realized how staying ignorant of investing was costing us a small fortune.
I asked for help in learning how to leave Ameriprise and manage our own investments. We got tremendous advice and have made such great progress toward FIRE that I wanted to share both a financial and personal update since the most unexpected part of this journey has nothing to do with FIRE!
The Financial Picture
Aug 2010 – all non-qualified investments were with Ameriprise and included a VUL. Even though 2009 was a good year for the market we were still underwater by $27,000 (10% of the Ameriprise portfolio) due to frequent shifting in and out of funds. We were in a total of 19 funds, had wrap fees of 5% on most and had an average ER of 1.9%. Our 401k choices were self-selected by past return and not part of any asset allocation. I’m sure you’re cringing about now, but we didn’t know these stats/facts were bad!
Aug 2011 - We’re now in a total of five funds across the entire portfolio (qualified and non-qualified), all of which are Index funds. Average expense ratio is 0.09% which is a fraction of last year! Our AA is 60/40 with equities being 35% large cap, 15% small cap and 10% Intl. The bond portion is in a single Fido Total Bond Market Index which is held in my 401K. We also cashed out all of DH’s options and ESPP from CSCO and put them into Vanguard. We made this move because of the ongoing underperformance of the stock.
The Financial Result One Year Later
Until the market drop this week we had increased our total portfolio by 25% in one year and met one of our milestones for total investable assets. The 25% increase is higher than market returns because we had a good amount of cash languishing in the credit union that I didn’t want to give to Ameriprise. Most importantly we're in control of our financial destiny and every penny we scrape up goes into Vanguard.
The FIRE Plan
Aug 2010 – We HOPED to retire when I turned 59 and DH was 55 (11 years away at the time). I knew about FireCalc and had run scenarios that showed it was possible. Why 59/55? It never occurred to us that ER could be any age as long as you have the funds to support it.
Aug 2011 – We KNOW we can retire at 55/51 (now only five years away) IF the market doesn’t stay in a swan dive. That’s a big IF, but we know how to tweak the variables and if retiring at 55/51 doesn’t come to pass it really is ok. We know we’re doing everything possible to retire as early as possible.
The Unexpected – Our Health
As part of our plan to retire at 55/51 we started looking into health care insurance. I thought my company subsidized HC at 55, but I had never read the fine print. Turns out we pay the full premium but we get a group rate which is still higher than COBRA. Since learning about the high cost of health care on this site if you’re not in virtually perfect health, we finally had two motivating factors to get serious about getting healthy; 1) we wanted to be healthy in early retirement so we could have fun and 2) we needed our healthcare premiums to be as affordable as possible.
Aug 2010 – While we were in good health for now, we were both overweight, didn’t exercise consistently and probably drank more than we should. DH had been on BP medicine for more than 10 years.
Aug 2011 – DH has lost 30 pounds. His BP meds have been cut in half and when he gets to goal (another 30 lbs) his doc expects him to be off medication. I’ve lost 20 pounds and have a normal BMI for the first time in years. We have taken up serious bike riding and are training for a Century ride in Fallon, NV in October. We have also started playing racketball again and taken up yoga.
And the best part of getting healthy has been that it helped define one our ER goals – ride a Century in each of the 50 United States.
Thank you for sharing your words of wisdom throughout this last year. As you can see, my statement that you wonderful folks at E-R.org changed our lives was not an exaggeration.
Before E-R.org, I superficially understood investing terms like asset allocation, risk tolerance, and expense ratios and I thought investing was so hard that I could never do it myself. Then, a year ago this week I found this site and quickly realized how staying ignorant of investing was costing us a small fortune.
I asked for help in learning how to leave Ameriprise and manage our own investments. We got tremendous advice and have made such great progress toward FIRE that I wanted to share both a financial and personal update since the most unexpected part of this journey has nothing to do with FIRE!
The Financial Picture
Aug 2010 – all non-qualified investments were with Ameriprise and included a VUL. Even though 2009 was a good year for the market we were still underwater by $27,000 (10% of the Ameriprise portfolio) due to frequent shifting in and out of funds. We were in a total of 19 funds, had wrap fees of 5% on most and had an average ER of 1.9%. Our 401k choices were self-selected by past return and not part of any asset allocation. I’m sure you’re cringing about now, but we didn’t know these stats/facts were bad!
Aug 2011 - We’re now in a total of five funds across the entire portfolio (qualified and non-qualified), all of which are Index funds. Average expense ratio is 0.09% which is a fraction of last year! Our AA is 60/40 with equities being 35% large cap, 15% small cap and 10% Intl. The bond portion is in a single Fido Total Bond Market Index which is held in my 401K. We also cashed out all of DH’s options and ESPP from CSCO and put them into Vanguard. We made this move because of the ongoing underperformance of the stock.
The Financial Result One Year Later
Until the market drop this week we had increased our total portfolio by 25% in one year and met one of our milestones for total investable assets. The 25% increase is higher than market returns because we had a good amount of cash languishing in the credit union that I didn’t want to give to Ameriprise. Most importantly we're in control of our financial destiny and every penny we scrape up goes into Vanguard.
The FIRE Plan
Aug 2010 – We HOPED to retire when I turned 59 and DH was 55 (11 years away at the time). I knew about FireCalc and had run scenarios that showed it was possible. Why 59/55? It never occurred to us that ER could be any age as long as you have the funds to support it.
Aug 2011 – We KNOW we can retire at 55/51 (now only five years away) IF the market doesn’t stay in a swan dive. That’s a big IF, but we know how to tweak the variables and if retiring at 55/51 doesn’t come to pass it really is ok. We know we’re doing everything possible to retire as early as possible.
The Unexpected – Our Health
As part of our plan to retire at 55/51 we started looking into health care insurance. I thought my company subsidized HC at 55, but I had never read the fine print. Turns out we pay the full premium but we get a group rate which is still higher than COBRA. Since learning about the high cost of health care on this site if you’re not in virtually perfect health, we finally had two motivating factors to get serious about getting healthy; 1) we wanted to be healthy in early retirement so we could have fun and 2) we needed our healthcare premiums to be as affordable as possible.
Aug 2010 – While we were in good health for now, we were both overweight, didn’t exercise consistently and probably drank more than we should. DH had been on BP medicine for more than 10 years.
Aug 2011 – DH has lost 30 pounds. His BP meds have been cut in half and when he gets to goal (another 30 lbs) his doc expects him to be off medication. I’ve lost 20 pounds and have a normal BMI for the first time in years. We have taken up serious bike riding and are training for a Century ride in Fallon, NV in October. We have also started playing racketball again and taken up yoga.
And the best part of getting healthy has been that it helped define one our ER goals – ride a Century in each of the 50 United States.
Thank you for sharing your words of wisdom throughout this last year. As you can see, my statement that you wonderful folks at E-R.org changed our lives was not an exaggeration.