32YO, and I'm so close I can taste it.

[SeminalSuliman]

Hello there, SeminalSuliman at your service.

I'm so glad to have found this forum. I'm a born and raised gutter group home kid who was pretty much abandoned by a terrible single parent at 13, and... well, its almost two decades later. Thanks to my service humping a rifle around the Middle East in the 2000's I got college paid for, and then after I was done with school I ended up working in a startup that has been pretty successful all things considered. For the first few years it was just funny money, worth... nothing. People were selling them back to the company at 10$ a share.

But one thing led to another, and a successful IPO came. Once the options I was granted became real money, my diligence kicked in and I knew I had to get smart with my money. This is why I became aware of FIRE, and it was almost a life saving revelation for me. I, like a lot of my peers, hate my job with a fiery passion despite being skilled at it. Its like digging a hole every day with my mind, absolutely no happiness or sense of achievement gained despite constant promotions and pats on the back. I couldn't believe this money I was coming into made it possible for me to do what I do best: live frugally and spend my life reading philosophy and taking courses and spending my life happily.

I live with my partner of seven years who I don't plan to marry (we both discussed it, its just not our thing) nor do we plan to have children. Pretty frugal, we both drive >15 year old cars. We do travel at least twice or three times a year, and I splurge points and cash on business class once a year for our anniversary. She's going to go to law school soon, and I plan to be retired as soon as my total accounts hit $2.3M. After that, I'm riding a variable SWR of ~3.8% (give or take, adjustable down or up depending on market conditions).

For the nitty gritty, I got two major packages of options. My first package I immediately liquidated as soon as I had the chance and yielded about $1M after taxes around September of 2021. I immediately threw it all into a Vanguard taxable and put it into VT. God that felt good! Unfortunately today its been shaved to around $800K thanks to this bear market. But when in doubt, zoom out right!

I now have my second option package kicking in which is hitting its year long maturation after I bought them. Its a dilemma for me. Do the right thing, diversify out of the company that signs my paychecks and sell the package, take the small(er) yield of about $300K and throw it into the market . Or wait for the price to rise (I have... reasonable confidence it will) and then sell it hoping I can retire earlier. Good problems to have.


So, in total:

Taxable: $800K currently.
Non-taxable or Tax Deferred: None, I don't plan to retire late enough. I plan to be done well before 59.
Stock options: At current prices, $300K.
Property: None, will not be buying a home at least not anytime soon.
Emergency fund: Six months of living expenses in cash.

My last point guys, so glad I found this forum. As I mentioned, I'm a simple guy. Group home kid. Infantryman. The underachieving smart kid in high school who rode my mind to millions of dollars, and I just want to have enough to finally be left alone. But money... I am thankful for these problems but I feel so overwhelmed. No parents to help me understand, no one. I hope this place can help me, and vice versa.

Thanks, glad to be here.

[Life_by_Fire]

Welcome to the forum! I found this place around 3 years ago when I turned 30 and it has been immensely helpful and motivational. Congrats on taking control of your life and being so successful in the face of such harsh adversity. It takes a strong person to do that.

I'm sure you will get a lot of advice from the much smarter and wiser people here but here is my idea. Why don't you DCA out of your company stock? That way if the price goes up, you capture it but if it goes down, you are already getting out and don't lose as much.

If you haven't already, prepare a detailed analysis of your spending. When i posted about retiring so young I received a lot of questions regarding historical, current, and projected expenses and how I would fund such a long retirement during down times. It is a great exercise to really nail down the expenses and fun to try to predict the future.

I hope you stick around and keep us updated. Best of luck!

[euro]

Welcome to the forum, thank you for your service, and congratulations on you first million!

Let's see if I understand your numbers correctly. It sounds like your current net worth is made up of the proceeds/expected proceeds of stock options, plus you have managed to save a 6 month cushion of emergency reserves. While you say you live frugally, you have not amassed any other regular savings as of yet. So, what is your plan to go from $1.1MM to the required (for FIRE) $2.3MM? Are you anticipating additional stock options in the near future? Are you prepared to cut back on your travel expenses?
How long did it take you to accumulate that 6 month reserve? I don't know your income or expenses, but let's assume that 6 month reserve is $100'000 and it took 3 years to accumulate - that means it would take you many more years or even decades to get to FIRE (unless you receive more options or the stock market is extremely kind to you). That's OK because you are very young. However, it sounds like you expect to retire in a matter of a few years, and personally, I don't see how you will get there without cutting expenses or bumping income. This is all based on what limited info is in your original post and how I understand it. I could be missing something or you may have other sources of $$$ that you didn't mention.
If the situation is as I think, I would try to ramp up savings or look into a side hustle to turbo charge the portfolio.
Best of luck and congrats again!

[pacergal]

welcome to the Forum, there are so many very knowledgeable folks here who will provide lots of advice and answer questions.

Under the Forums tab is a ER FAQ subform : Early Retirement & Financial Independence Community > Community Forums > Early Retirement FAQs
Some Important Questions to Answer Before Asking - Can I Retire?
Answer those questions honestly and it will help to make sure you have thought of just about everything you may need to account for in your budgeting and retirement life.

There are also some great books listed in the Boglehead forum

Congratulations on your success so far. Hope to hear more from you.

[rodi]

Welcome to the forum. You'll get a lot of advice *and* though questions. You're doing far better than I was at your age, but this forum helped me figure out spending saving budgeting, planning on order to retire at age 52.

As for hanging into the options.... I was glad to "churn and burn" my options and ESPP shares to mitigate risk. The suggestion to dollar cost average out of the option shares is a good one if you are certain the trend if the stock is upward.

[Spock]

I didn't glean out exactly when you were targeting to FIRE nor years in the military
and maybe its just because 32yo seems so long ago now (never thought I'd be saying THAT)
but the first thing that went through whats left of my brain was: Have you worked the 40 quarters/10 years paying in enough to qualify for SS?
No need to answer... just a checkbox for those FIRE'ing really early.

[stepford]

I know you've probably thought about it, but make very sure your partner is cool with you being a long term retiree while they work as a lawyer. That can cause more friction over time than you might think.

[ivinsfan]

Your are doing well. At you age, with no spouse, no kids, no house don't plan the rest of your life around FIRE (because well $h%t happens) Ideas change, partners can change, a lot can change. People that don't want kids can suddenly want a child more then anything in the world.


Think about looking for a different job that you might not hate with "a fiery passion". Your happiness today is important too. Does your company do a company match on tax deferred if they do you letting free money go by.


Did you ever factor in an inflation rate for renting an "acceptable" place now factor in no partner and you needing 100% of that rent coming for you. Does anything in your military service allow you access to VA health care this could vital to ER plans.


My sympathy that you have such a difficult childhood, no child should have to go through that. FIRE is great but at your age you should have some joy in the journey as well. You deserve your best life not only in FIRE but now. Good luck

[SeminalSuliman]

@Stepford Thanks very much for the sentiment, I hope to get that same usefulness and community. As far as your suggestion about DCA'ing my remaining company stock, that's a great idea. Because of my disillusionment with work and my hope for FIRE as soon as possible, I guess I've been holding onto the possibility that it jumps in the next two years and propels me into FIRE. Especially seeing as I know how my company is doing and such, its hard to let go of that possibility. But taking a deep thought this afternoon about it, I think the DCA plan may be right. But thank you!

@euro

When I say I live frugally, I do mean it. The things I've spent my amassed savings from my salary on is mostly the tax fallout from my two stock options being bought, which triggered massive tax bills from AMT. I also bought my grandparents some very needed house renovations and necessities at one point given that was my first thought whenever I had some spare pocket change. I actually have my next tax bill coming up here this year, which is looming heavily. Thankfully the next batches I am vesting into are smaller and should be helped with the AMT tax credit.

But I also am heavily aware that I live once, so I also travel and am trying to enjoy the health my thirties brings me.

As far as my plan to actually get to $2.2M, mostly compound interest and this second batch of options. When this next massive tax bill gets done, I'll have more money coming in than I could possibly spend so I'll probably just be throwing that into my Vanguard account.

Quote:

However, it sounds like you expect to retire in a matter of a few years, and personally, I don't see how you will get there without cutting expenses or bumping income.

My salary is quite high, scratching $200K. Combined with the cash I plan to throw into my Vanguard, with the compound interest from my stock options I don't see retiring as out of my reach within five-six years at a reasonable 7% returns once this market turns back around.

FireCALC returns me a 96% chance of success with $2.2M with $75,000 a year as spending. That is all I desire really. I also suspect work becomes infinitely more tolerable when I start being that guy from "Office Space". I'll milk that salary for all its worth at that point.

@pacergal Thank you! I'll check all that out.

@rodi

Quote:

As for hanging into the options.... I was glad to "churn and burn" my options and ESPP shares to mitigate risk. The suggestion to dollar cost average out of the option shares is a good one if you are certain the trend if the stock is upward.

You're the second person in the thread to suggest it, I most likely will be doing that now. Thank you for the welcome as well.

@spock

Quote:

I didn't glean out exactly when you were targeting to FIRE nor years in the military

I guess I didn't target a specific time given how everything is so up in the air. If my company stock hit a certain price tomorrow morning, I'd be putting my feet up the second the sale went through. But accounting for today's bear market, the market trends following that sort of market... I don't see five years being unreasonable to expect it. I guess that's my target.

As far as the military, I did a three year stint.

Quote:

but the first thing that went through whats left of my brain was: Have you worked the 40 quarters/10 years paying in enough to qualify for SS?

****, I didn't even think about that. Military was three years, I've worked in the professional field for six years now. I think I'll be clear especially by the time I hit my number.

Thank you for the heads up Spock.

@stepford

Quote:

I know you've probably thought about it, but make very sure your partner is cool with you being a long term retiree while they work as a lawyer. That can cause more friction over time than you might think.

That's exactly my worry. We've talked about it, she's quite clear about my plans. And of course, we don't see a problem now. This will be something I'll be asking around on this forum as far as experiences go.

But... I take great care of her. Expensive stuff, through my choice I take those burdens on. Greater share of rent, some utilities, trips. I don't see why, when this partly flips and she's taking in the greater income it wouldn't be fine. Then again... we'll be different people in five years as we all should be. Yeah, its a good call Stepford.

@ivinsfan

Quote:

Your are doing well. At you age, with no spouse, no kids, no house don't plan the rest of your life around FIRE (because well $h%t happens) Ideas change, partners can change, a lot can change. People that don't want kids can suddenly want a child more then anything in the world.

I appreciate your counsel, just like the rest of your post. Sensible and sage advice, basically to appreciate how much I'll change and grow in the next years. I will say though, I am a hardened man at my age now. I am also a fan of philosophy, which very much helped me find myself as I still do. I guess I just foresee myself staying firm on some of these things. What I will say though ivinsfan, is that I also recognize that when I FIRE and have no survival concerns... I'll have to really look myself in the mirror and see what's what.

Quote:

Think about looking for a different job that you might not hate with "a fiery passion". Your happiness today is important too. Does your company do a company match on tax deferred if they do you letting free money go by.

The combination of salary, actual work pressure (I wake up at 11, work until 4PM), and stock options kind of... my younger self would whoop my ass for leaving this career. And as a former grunt, I can endure. My own feelings are irrelevant to my goals, as long as I do have an exit window. If I didn't... I'd be gone yesterday. I appreciate that though, that my happiness today is important too. Maybe it is, but my travels and my own hobbies keep me happy enough outside of work. If that changes... I'm taking your advice.

Quote:

Did you ever factor in an inflation rate for renting an "acceptable" place now factor in no partner and you needing 100% of that rent coming for you. Does anything in your military service allow you access to VA health care this could vital to ER plans.

So yes, combat veterans receive free health care for life. My partner pays nearly $300 a month for healthcare so I'm aware how blessed I am. I also receive $350 a month from Uncle Sam for service related disability (tinnitus and arthritis at my young age, ha!).

As far as the inflation rate for renting... yeah, I guess I haven't factored that. Thank you for the heads up.

Quote:

My sympathy that you have such a difficult childhood, no child should have to go through that. FIRE is great but at your age you should have some joy in the journey as well. You deserve your best life not only in FIRE but now. Good luck

Thanks pal, truly. I was always the type of person to grit it out, as I have my whole life. It is slightly getting to me now though, so...yeah. I appreciate the sentiment.

[PlayinwithFIRE]

At 32, man you've got a long road ahead - congrats on that!

You've done well at your age, but I have the feeling exiting too early could hurt in the long run.

With a 2.2M start point, you have to assume at least 50 years to cover (maybe its less if that point is sometime in the future) . On average thats a $44K per year without appreciation of the investments beyond 2.2M. (Call me a pessimist ! )

Is that comfortable for you to cover everything?

If you havent tried it out, have a look at FireCalc to help inform you of how different scenarios might look. Things like, delaying a few years to retire to build $$.


b

[DawgMan]

OP, love the FIRE passion of you young folk! IF you stay the course... single, no kids, lower spending and perhaps keep your job skills relevant/do something perhaps part time, why not give it a go. However, as others have said, you got allot of life ahead of you and things WILL change. I remember being a young buck like you with early FI goals and a number of financial objectives only to move the goal posts multiple times as "life" played out and financial and non-financial goals changed. Heck, when I was in college my plan was have banked a $1M by 30, get married, and have maybe 1.7 kids! Well, I got married at 25 and proceeded to have 4 kids! So much for original plans!

Keep the passion, keep the goals, but give yourself the flexibility to make changes. It sounds like exploring some other lines of work might be a cure.

Good luck!

[steiny]

Welcome and THANK YOU for your service

[joesxm3]

Just one word of advice. Don't sit on your stock option stock all in one company. Back just before the dot com bust my friend had $3MM in option stock that peaked at $60. There was a screw up vesting while the upper levels dumped. He was able to sell at $30, but held on. The bubble popped and it dropped to $0.50.

Maybe cash some and put into t bills until you see how things go in 2023.

You can keep some in your company, but advise not all. Plus you may get more options in the future.

[ILikeStarTrek]

Welcome to the forum!

Congratulations on getting to where you are today, especially after your difficult family background.

I will just make one suggestion for your situation:

Quote:

Originally Posted by SeminalSuliman Taxable: $800K currently. Non-taxable or Tax Deferred: None, I don't plan to retire late enough. I plan to be done well before 59. Stock options: At current prices, $300K.

I think you should be contributing to a 401k/IRA, particularly if it is a Roth.

You are 32 now and it seems like you expect to work another 5-6 years and retire age 37-38 (more or less). You definitely need enough money to get from there to age 59.5, but that's only about 22 years. Even though life is uncertain, in a retirement plan you should be planning to live to at least age 85-90. So you should be planning as if you will have more years to withdraw money after age 59.5 than before age 59.5!

If you can max out a contribution of $20-25K / year to a Roth 401k for the next 6 years, you will have contributed about $140K by age 38. You will still have 80-90% of your overall assets in taxable accounts, which should easily get you to age 59.5. But you will also have a modest Roth account which will grow tax-free for the rest of your life, to be available if or when you eventually need it. You will save money in income tax each year, and moreso as more years go by.

Another nice thing about a Roth is, if you do need to withdraw from it before age 59.5, you can always withdraw the original contributions (which have already been taxed) without penalty. You just can't withdraw the growth without penalty. But given the rest of your assets, I see it as extremely unlikely that you would need to touch anything in your Roth before age 59.5.

[jurgs01]

If treasuries spike above 4%, I would move some money there in the 20-30 year range. $1M earning 4% is $40k, which is a decent low risk income for someone who is frugal.

Treasuries are also highly liquid, so if interest rates go way down you can sell them for a profit.

There are also a lot of high quality corporate bonds paying over 5%.

[ut2sua]

Quote:

Originally Posted by SeminalSuliman No parents to help me understand, no one. I hope this place can help me, and vice versa. Thanks, glad to be here.

OP, you have done extremely well. Congrats
Members in this forum are generally much more educated on financial matters (than your or my parents), so read the various discussions in the forum and ask your questions. I have learned a ton in the past few years.
So far, I think you have done the right things investing in VT (or any diversified low cost index funds). I have no doubt you will get your investing $ back (and more) in the next few years (if not sooner). Boggle heads is another forum that will help with financial questions. Hints: the best advices tend to come from folks who don't want to collect 1 or 2% of your total net worth. You will not get any of that here in this forum. Welcome.

[Koolau]

Welcome to the forum. Please keep us updated on your progress.

Feel free to pick our brains but remember that we are amateurs and don't charge a fee so YMMV.

[RVplusDog]

No one has mentioned I-bonds yet, so do check those out. You can open up the account online and invest up to $10k annually. Recent interest rates were over 8%. If you contribute annually starting now, it’ll make a nice little pocket of stable $ in your portfolio.

I agree with everyone else about getting the majority of your funds out of your employer stock.

[madman]

Regarding stock options, it can go both ways. Depending on your company, you could do really well and come out way ahead to retire in your 30's or 40's. Or, you could work for a start up that collapses and wipes out all your option $. Only you can make that call depending on what you know about your company and long term growth expectations. I am 43 and plan to FIRE next year with ~$3M in investments, ~4M net worth. ~60% of the $ is from holding onto stock options long term and buying them and continuing to hold. I have averaged a ~23% annual return over the past 15+ years. I still have ~80% of my retirement funds in my company stock where any financial advisor and many people on this forum would tell me I am crazy and should have sold off and diversified years ago. If I listened to them, I would be working for another 15 years. My company is not a start up though, been publicly traded for a long time with conservative management and a good growth path so a lot less risky than a start up or tech company. Just throwing it out that sometimes to retire before 95% of the population, you have to take a different path than a financial planner will tell you. Could my company stock tank and I take a massive hit, sure. But even if it lost 50% of the value this year I would still come out ahead vs a well diversified portfolio over the last 15 years. Best of luck!

[Badger]

Quote:

Originally Posted by ivinsfan Your are doing well. At you age, with no spouse, no kids, no house don't plan the rest of your life around FIRE (because well $h%t happens) Ideas change, partners can change, a lot can change. People that don't want kids can suddenly want a child more then anything in the world. Think about looking for a different job that you might not hate with "a fiery passion". Your happiness today is important too. Does your company do a company match on tax deferred if they do you letting free money go by. Did you ever factor in an inflation rate for renting an "acceptable" place now factor in no partner and you needing 100% of that rent coming for you. Does anything in your military service allow you access to VA health care this could vital to ER plans. My sympathy that you have such a difficult childhood, no child should have to go through that. FIRE is great but at your age you should have some joy in the journey as well. You deserve your best life not only in FIRE but now. Good luck

Quote:

FireCALC returns me a 96% chance of success with $2.2M with $75,000 a year as spending. That is all I desire really. I also suspect work becomes infinitely more tolerable when I start being that guy from "Office Space". I'll milk that salary for all its worth at that point.

While you read through the thousands of posts here you may notice that there have been quite a few people who thought they had enough when Firecalc indicated what they deemed a reasonable chance for success yet had to unretire for additional income and/or health benefits. There were many reasons that they didn't consider that came into play after they left a regular paycheck. As ivansfan said, "$h%t happens"
Personally I don't trust life to always go the way I would have liked. With that in mind I did not retire until FireCalc indicated a success rate that exceeded 100%. But then I am a belt and suspenders kind of man. I also found a work environment that I enjoyed.
In 10-15-20 years from now that $75k will not take care of your needs and those years of a down market, inflation, etc can have a negative impact on your success potential.
After reading many posts (I went back a great number of years) I have found a good number of members here that I trust and have faith in that give excellent suggestions/guidance. I have also found some that are not so well informed and maybe with less experience that post here as well. You may want to make that determination for yourself and be selective on whose posts you consider that are most reasonable for you.
In the meantime you are doing well and I am glad you have found this site. Whatever your plans I hope they result in an early retirement that is everything you hope for.

Cheers!