32 and wanting to retire in a few years

[Jack_Key]

Quote:

Originally Posted by needtoretireearly Jack, That is a really great blog.* I normally don't like blogs as a lot of them are boring.* But I will be coming back to yours to read more.*

Well, thank you*

Quote:

You think the same way I do, especially about your job.* Sure I could quit and pursue art or writing, which would be fun.* But who knows if I would be able to survive at all on that.* Probably not.* Better to suffer a few years at a stressful job and then have the rest of your life to enjoy doing what you please.

Exactly. I have friends who are professional artists (particularly in the writing and musical domains). While they are doing what they like, all of them work elsewhere to pay the bills (McJobs for most of them). They often feel bitter about life in general, since they work at minimum wages during the day and don't have much time for their artist careers the rest of the time.

I do rather enjoy my work, even if its stressful, sometimes too demanding, but at least, I'm well paid for the drawbacks, and given that, I should be able to retire and then, be financially independant for life.

Quote:

I do take at least 1 week vacation each year.* It is unpaid, but I feel it is necessary and healthy for me to take it.* I will be going next week actually, to a fitness spa which I really enjoy.

Enjoy This summer, we visited UK for two weeks, we had to do some sacrifices all year long in order to be able to afford this travel while saving enough according to my plan. But these sacrifices were greatly rewarded, and I see early retirement just as that: small sacrifices and great rewards. For me, a small sacrifice is not buying the latest plasma TV and a great reward is a travel to London. Or having a small, used car, a rather small condo or house, no unnecessary devices, letting the car in the park lot whenever possible, etc., and the great reward: retiring early, being financially independant and do things that please me .

Quote:

But I don't know if there are many men (or people at all) who think like you.* At least not any I know.* The friends I have are great but they definatly do NOT think like I do, about money.

Same for me and if I could have a suggestion for you: don't talk too much about your ER plan to relatives. First, they'll try to convince you that you are wrong. I don't know why they are doing that, but they are. Maybe it's because they are trying to rationalize their own choices regarding money, savings and purchases. Actually, I think that most people don't like seeing others living differently than their own lifestyle. When everybody is making the same choices, you don't have to question yourself. This is a commonplace, but sometimes, commonplaces are plain true

Again, good luck and I hope to hear more from you on this board or on my blog.

Jack

[wildcat]

Quote:

Same for me and if I could have a suggestion for you: don't talk too much about your ER plan to relatives. First, they'll try to convince you that you are wrong.

Agree and I would throw in your fellow employees as well. I think it happens b/c 1) It's not normal in our society 2) jealously b/c they can't 3) some people find their identity in a job and feel unimportant or bored without it. Point being is that most people will think your crazy and it's prob best to quietly go about your business.

Quote:

Firecalc is a good start, but even better, if you are able to play with Excel, is to put down the numbers and try some scenarios. For instance, I put my real gain (gains minus inflation) on investments at 4% a year, then I try to estimate my salary increases (since I'm young, for instance, I plan bigger increases in the first years).

Quicken has an retirment planner, that does this and a lot more. You can play with 'what if' scenarios to your hearts content! Nice Graphs also. If you track your investments with Quicken, Most all of the input data is already there.

[Billy]

Jack_Key said:

Quote:

I could have a suggestion for you: don't talk too much about your ER plan to relatives. First, they'll try to convince you that you are wrong. .. Maybe it's because they are trying to rationalize their own choices regarding money, savings and purchases. ...When everybody is making the same choices, you don't have to question yourself.

wildcat said:

Quote:

Agree and I would throw in your fellow employees as well.*

You have put your finger on it.* * It's called Peer Pressure. Even though we might think we are making a decision about our own lives (to retire early) it upsets a kind of (unspoken) balance between peers. Doing something so radically different is threatening to others. It may not have anything to do with them, but they will see it that way.

If they are truly your friends, they will be happy for you. If they are your peers, they will feel challenged.* It can be uncomfortable...* :P

When we retired 15 years ago, this issue was a surprising one for us.* 8)

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

[wildcat]

Akaisha -

You are pretty famous among the ER crowds. Just wanted to say that I enjoy your website. I just met a celebrity

[thefed]

i might be mathematically inmpaired, but I think the OP needs to save more than she's planning on for an ER.

Inflation is a mother.....

Good luck though! I'm hoping on a 45 yr old ER....but we'll see.

[Billy]

wildcat said:

Quote:

Akaisha - You are pretty famous among the ER crowds.* Just wanted to say that I enjoy your website.* I just met a celebrity* *

Ha ha.. Thanks, Wildcat -- I don't know about the "celebrity" part, but we are very happy you find our site fun and informative.*

There are lots of components that make up Retirement or Early Retirement. Money is a big one, but it's not the only one. The effects of Peer Pressure, the differences in how men and women approach ER, Health Care, Fear -- all that "stuff" plays a part.* *8)* (We talk about all of that in our book....)

Someone can have all the money it takes to retire, but still can't make the leap, because they are held mentally hostage to something - what their friends think, the need to buy new toys all the time, or just plain fear of making the leap - taking the chance...* *

Feel free to write any time, our email address is on our site.

Thanks again for your support! The best to you all ways.

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

[Billy]

Jack_Key said:

Quote:

I have friends who are professional artists (particularly in the writing and musical domains). While they are doing what they like, all of them work elsewhere to pay the bills (McJobs for most of them). They often feel bitter about life in general, since they work at minimum wages during the day and don't have much time for their artist careers the rest of the time.

Jack_Key, I have been rolling this statement around in my mind for awhile...* since this is an opinion board, I'm gonna let you know what I think of this.* Take it for what it's worth ...* *8)

IMHO, these people feel bitter about life because they are not committed either way --* Not to their job and not to their creativity. They are in the miserable middle ground, feeling unhappy in both places. :P

They need to take the lumps on either side of the fence. They have options, they simply don't see them.

1.) They could* commit to their* jobs and save enough cash to "afford" creative time to themselves.
2.) They could commit to their creativity and "do or die, sink or swim" make a go of it.* *
3.) Free lance themselves out utilizing their talents and skills and which gives them considerable down time between jobs.
4/) Work 6 months out of the year (seasonal work presents this opportunity very well) and then the other 6 months they dedicate to their creative expressions. (and these are just 4 examples...)

What employer wants a miserable half committed employee? I'm sure these people will be getting raises right and left by their wonderful attitude... * *And what kind of substantive creative project can come from a miserable artist? Well.... maybe something.. and how will that project benefit the world, if it comes from despair and bitterness?

The world does not reward half hearted efforts. Get in the boat or swim on your own... otherwise you will simply be dragged along....* This is an internal issue for them that needs sorting out.

Again, ... IMHO...

Akaisha
Author, The Adventurer's Guide to Early Retirement
www.RetireEarlyLifestyle.com

[Nords]

Quote:

Originally Posted by Jack_Key Exactly. I have friends who are professional artists (particularly in the writing and musical domains). While they are doing what they like, all of them work elsewhere to pay the bills (McJobs for most of them). They often feel bitter about life in general, since they work at minimum wages during the day and don't have much time for their artist careers the rest of the time.

Hey, T-Al, you have a similar background but a different outlook. Is it because you're self-employed, or some other reason?

[bosco]

Quote:

Originally Posted by Billy [ 4/) Work 6 months out of the year (seasonal work presents this opportunity very well) and then the other 6 months they dedicate to their creative expressions. (and these are just 4 examples...)

I have found that this is a much better option than I realized. After working for a professional engineer (bridge designer) for many years, I found that I was burnt out. It was incredibly stressful to look myself in the mirror and feel that I wasn't putting out my best work (I mean best work in terms of output--nothing has ever collapsed ) These feelings are damaging to one's self-esteem and are of form of violence to one's self IMO.

last spring I transferred to a seasonal construction position. I find that it is much easier for me to give my all when I know that in October I can stop for 6 months. Even though I was working 60 hour-weeks, the time flew by. Plus, I make as much money in 6 months as I did before in 12.

This is a much better arrangement for me. I have my season pass in hand and will be skiing hard all winter.

2 more construction seasons and I can hang it up permanently at 54. Although this is not real early by this board's standards, I am still healthy and feel that the 6 months off are helping me become psychologically geared to full-time ER.

As an aside, I can honestly say that the most financially devastating thing I ever did (which undoubtedly delayed my ER by many years) was getting a divorce. That being said, it was totally worth it as what's the point of being retired if you are not happy? For that matter, what's the point of working if you are not happy?

[haha]

Quote:

Originally Posted by bosco I have found that this is a much better option than I realized.* After working for a professional engineer (bridge designer) for many years, I found that I was burnt out.* It was incredibly stressful to look myself in the mirror and feel that I wasn't putting out my best work (I mean best work in terms of output--nothing has ever collapsed* )* These feelings are damaging to one's self-esteem and are of form of violence to one's self IMO. last spring I transferred to a seasonal construction position.* I find that it is much easier for me to give my all when I know that in October I can stop for 6 months.* Even though I was working 60 hour-weeks, the time flew by.* Plus, I make as much money in 6 months as I did before in 12.

Can you tell me what kind of work you are able to find for a 6 month gig? Do you go back to your same employer in spring? Can you keep health insurance somehow? I have a son who toys with going full time as a snowboarder, but I think he realizes that he would likely never really have any money. He has math/ comp sci degree, and none of your construction experience. But I suppose there might be seasonal opportunities for him also.

Haha

[bosco]

Quote:

Originally Posted by HaHa Can you tell me what kind of work you are able to find for a 6 month gig? Do you go back to your same employer in spring? Can you keep health insurance somehow? I have a son who toys with going full time as a snowboarder, but I think he realizes that he would likely never really have any money. He has math/ comp sci degree, and none of your construction experience. But I suppose there might be seasonal opportunities for him also. Haha

sorry it took me so long to respond--I've been off cruising around and haven't checked in here for a while.

To answer your questions, I am a construction engineer in a far-north (above the Arctic circle) community. Construction typically shuts down during the winter. My employer (the State of Alaska) figured out that it saved them money to allow people like me to bugger off during the winter if they wanted--assuming the contractor shuts down. Some kinds of jobs they might not in which case I would have to stay, but usually human productivity is low at 40 below. So yes, I go back to my same employer in the spring. There are opportunities, even for people without engineering degrees but you pretty much have to be in the area to take advantage of them.

As for health insurance during my layoff, I can use COBRA but the premium is pretty high (my employer will not cover the premium while I am laid off). After shopping around, I discovered that there is a such thing as temporary medical insurance. It is high deductable, but only costs about $100 per month. The catch is that you must specify in advance how many months you want it and pay up front. In my case, I must return to work May 16, so this is easy. The risk is that if I purchase insurance through May 15 and get run over by a beer truck on May 10th and am lying in my hospital bed, on May 16 the coverage ends, period. So if I cannot report back to work because I am in intensive care, I have a problem.

However, I am 52 years old and if I was that stove up, I could claim early retirement and my retirement medical would kick in. So I feel I am covered although I feel I had better get a power of attorney into the hands of my wife (a good idea anyway).

[haha]

Quote:

Originally Posted by bosco sorry it took me so long to respond--I've been off cruising around and haven't checked in here for a while. As for health insurance during my layoff, I can use COBRA but the premium is pretty high (my employer will not cover the premium while I am laid off).* After shopping around, I discovered that there is a such thing as temporary medical insurance.* It is high deductable, but only costs about $100 per month.* The catch is that you must specify in advance how many months you want it and pay up front.* In my case, I must return to work May 16, so this is easy.* The risk is that if I purchase insurance through May 15 and get run over by a beer truck on May 10th and am lying in my hospital bed, on May 16 the coverage ends, period.* So if I cannot report back to work because I am in intensive care, I have a problem. However, I am 52 years old and if I was that stove up, I could claim early retirement and my retirement medical would kick in.* So I feel I am covered although I feel I had better get a power of attorney into the hands of my wife (a good idea anyway).

Thanks Bosco. This is a funny reply.* Sounds like you have just about the ideal set-up.

Ha

[bosco]

Quote:

Originally Posted by HaHa Thanks Bosco. This is a funny reply. Sounds like you have just about the ideal set-up. Ha

yes, it is very ideal, for me at least. Also, due to the benefit calculation formula, working seasonally and making overtime while I do work will increase my DB pension when I finally do ER, approximately 2 years from now.

[vic]

Uggh.... Prudhoe Bay, AK. Had a one year stint there until oil dropped to $9/barrel. We worked through the winter. My job was mainly *outside*. They would only stop work when it was to cold for the steel and it would get brittle (don't worry about us human beings).

Some interesting experiences too. Toby the bear was cute. Especially when the workers were making faces through the window in the steel shop door and figured they were safe. Toby was a smart cookie, opened the door and start roaming around. Gone were the funny faces.

Vicky

[wstu32]

isnt it just wonderful that you are in such a position... a lot to be thankful for during this Christmas season.... angel:

[needtoretireearly]

Update:
Thanks for all your responses.

Just bought a house with the extra space that I need and want. I close in 3 weeks! I put 20% down. The seller was motivated, needed out fast. They had trouble selling it because the walls and ceilings of the ENTIRE HOUSE are all painted LIME GREEN (which I will paint). It has tons of upgrades and the inspection I had done went well.

After some bargaining, I got a REALLY good deal on it. It is located in a growing area on the outskirts of Atlanta and will likely appreciate in value. It is also 10 minutes from my work so will save me a LOT of stress, time, and gas as I now drive almost 2 hours round trip for work each day. My interest rate is 5.875, 30 yr fixed. I did the calculations and I would be better off taking the extra cash for investing, rather than getting a 15 yr fixed. The interest rate is not that much different for a 15 yr fixed. I will invest the extra cash and make a higher return. Also the rate was not low enough on an interest only loan to justify it, even though that would have freed up more cash for investing. So I went with the 30 yr. My payment is about $816 a month, $1000 per month when you add the taxes and insurance.

I do not know how long I will stay in that house as I can't predict the future. But at present I am thinking I will stay a long time. At least 5 years. Maybe 20 years. Who knows.

I will be keeping my condo as rental property. The rent will be enough for me to break even after upkeep expenses. Plus I'll get the tax deduction. These condos are renting great but selling poorly. That is why I am renting it instead of selling.

If I enjoy renting my condo, then one day I might decide to rent my house and move again. This would not be for SEVERAL years however. I may not do that at all, it was just a thought, for the far off future once I've lived there several years.

When you calculate saved gas costs, I am not paying that much more for my house than I am for my condo. Maybe $100 more a month. Plus I will have a lot less stress, living closer to work. This will definatly help me to make more money, as I work in 100% commission sales. When I am tired from all the driving and frustrated due to traffic, I definatly don't make as much money selling.

So even though retirement is my ultimate goal, I am certain that this house purchase was a good idea.

My one bedroom condo does not leave me any room for entertaining during the holidays.

My new house has a guest room so I can welcome my out-of-town friends and not feel like there is no space for them.



My boss's husband is VERY successful at real estate investing. They finance by owner several properties.

I was thinking of getting into that, just with my condo, since I have enough income that I can carry two mortgages.

I am not sure if I want to do that or just rent. But they said lots of times pple pay a large (several thousand dollars) down payment, then live in the house a few months and can't pay the bills. So you get to keep the deposit money and they have to move out.

Another option would be lease to own.

I believe I'd make more money doing this than just renting the place.

Does anyone know much about this?

I definatly will get with my boss's husband. He REALLY knows his stuff and will tell me how to do this.

The only thing is, he said, you must be able to pick up the mortgage if your tenant can not. Which I can do. Also if they damage the place, in a owner finance situation, and they can't make the payments and move out, I would be stuck with the bill. It is a risk.

[Martha]

If you are thinking of selling the condo on a contract or with a "lease to own," with the mortgage still on the property, you have a number of issues to look at. The major issue is with your mortgage lender. Nearly all residential mortgages provide that the entire mortgage loan balance is due in full if the property is sold. So if you sell on a contract, your lender could require you to pay off the mortgage. This would make potential buyers very nervous.

Many mortgages also require you to live on the property and prohibit its use as rental property. In your case, it might be no harm, no foul, because the lender never finds out you aren't using it as your home and tenants, unlike buyers, wouldn't care.

[justin]

Quote:

Originally Posted by Martha Many mortgages also require you to live on the property and prohibit its use as rental property. In your case, it might be no harm, no foul, because the lender never finds out you aren't using it as your home and tenants, unlike buyers, wouldn't care.

Most of the mortgages around North Carolina I've seen (the standard ones) require between 6 months and 2 years of use as a residence. After that, you can do what you want (as long as you don't violate other terms of the loan/mortgage/deed of trust). I think that is to prevent the rental RE investor from using loans with favorable rates for principal residences as investment property loans.

Also, in NC (don't know the law in GA), if the seller of a house also makes a mortgage loan on the house, then that seller can't collect any deficiencies from the buyer in event of default. In other words, you can foreclose on your collateral (the house), but you won't get back any amounts still due under the loan if the sale of the house doesn't satisfy all amounts owed. This is a minority law, and may not apply in GA, but beware. Not a big issue if you're getting a 10% downpayment or so, since there's an equity cushion to protect you in the event of a default and foreclosure.

[Nords]

Quote:

Originally Posted by needtoretireearly I will be keeping my condo as rental property.* The rent will be enough for me to break even after upkeep expenses.* Plus I'll get the tax deduction.* These condos are renting great but selling poorly.* That is why I am renting it instead of selling. If I enjoy renting my condo, then one day I might decide to rent my house and move again.

Have you been a landlord before? It's worth reading this thread and perhaps even (1) Investing in Real Estate, 4th edition or later, by Andrew McLean & Gary W. Eldred (who's taken over the new editions) & (2) Landlording by Leigh Robinson (7th edition or later).