38 in SoCal, not sure how to make ER a possibility

[dvalley]

Q3 - 2017 update

Total of Savings+investments: $575k (+55k YTD)
- Cash position (included in the above total): $257k I know, I know

Looks like I'll close out the year with $580k-585k and then cross the $600k milestone in Q1 2018.

 

[dvalley]

Q4 - 2017 update
Total of savings+investments: $601k

2017 Summary: This was an expensive year in multiple ways. Primarily I had pulled a lot of money out of the market in late 2016, that was a BAD move on my part so my money didn't grow at the rate as others'. I also paid off a $4600 car loan, and spent $9k on expensive clothes, trips and toys etc. Despite all that I managed to (barely) meet my stretch goal of breaking into the $600k in investments and savings! I'm pretty happy about that Even towards the end of Nov I didn't think it was going to happen!

Total 2017 network increase was $601k-$522 = +$79k

Looking ahead in 2018 I should be able to add $60k unless things change drastically one way or the other. I really don't think it's going to happen but it'd be awesome if I could break into the 700k by the end of the year!

 

[Exit 2024]

dvalley, excellent progress!!!
Looks like you could join “two comma” club for total NW this year
Will be watching your progress going forward as our target ER dates are very close, I assume you are still looking at 2025?

 

[dvalley]

@Exit2024 - thanks!
Hey you're right about the two comma club! I never really pay much attention to the home equity because my plan is to use that to buy a house out right in a LCOLA but for the sake of NW milestones I think I should celebrate it when I get there! A million dollars is a million dollars!

My main target was/is 2025 (age 50) but I may have the OMY syndrome until 2030 (age 55) to get to a more comfortable NW number. My current job is much better than my last one in that my BS bucket isn't filling up quite as quickly, so far. My original target was a paid for house and $1.25MM but now I'm thinking a paid for house and at least $1.5-2MM.

 

[Exit 2024]

My main target was/is 2025 (age 50) but I may have the OMY syndrome until 2030 (age 55) to get to a more comfortable NW number.

I also afraid that OMY syndrome may infect our minds, especially if markets will be in some kind of turmoil at that time. Will see what it will be when we get there.

 

[Scout]

2017 Summary: This was an expensive year in multiple ways. Primarily I had pulled a lot of money out of the market in late 2016, that was a BAD move on my part so my money didn't grow at the rate as others'. I also paid off a $4600 car loan, and spent $9k on expensive clothes, trips and toys etc.



Glad to see your enjoying yourself along the way!!!

 

[HawkeyeNFO]

$600k ? CRUSHED

HELL YEAH!!!

 

[Golden sunsets]

Dvalley; Interesting thread, which I just read through completely for the first time. I have to complement you for your focus on saving and "eyes on the prize" for so many years. Unfortunately you have been trying to accomplish your goals while timing the market. Others have posted that your attempts to market time are short sited. The only reason to reduce exposure to equities is when the funds will be needed in the short to mid term, say five years or less. Even then one doesn't jump out of the market entirely; one just adjusts AA to a more conservative number, unless the cash is needed for a specific purpose, like college tuition or a down payment.

You started this string in 2013, when you had twelve years to reach your goal. You would be much closer to that goal if you had continuously been fully invested. Even now your time horizon is 7 years. I think you should do some reading on long term investing. I don't think you would be able to point to a single book or article that would support market timing as a tool to achieve wealth. In fact, continued investing during times of market pullbacks is what largely contributes to ones overall wealth. Think about all of those bargains you're acquiring. So invest continuously, rebalance periodically, rinse and repeat.


Sent from my iPad using Early Retirement Forum

 

[dvalley]

@Scount and @HawkeyeNFO - thanks!

@Golden sunsets - agreed! Sometimes we have to learn the life lessons the hard way and I seem to have a knack for it lol Appreciate you taking the time to read and respond!

For the record my AA as of right now stands at 66/34, used to be 80/20 and I've been moving approx $10k per month from cash to equity.

 

[dvalley]

Just journaling my Q1 2018 update:
Age: 43 now (eek!)
Networth (savings+investments) = $615k
Primary home equity = $350k
AA = 77% equity / 23% cash

 

[dvalley]

My Q2 2018 update:
Networth (savings+investments) = $642k
Primary home equity = $367k
AA = 77% equity / 23% cash

The big news this quarter is that the Total NW passed the $1,000,000 mark for the first time thanks to the hot RE market.

 

[NgineER]

Congrats-awesome progress from your first post!

 

[Exit 2024]

Congratulations on such huge milestone and welcome to the two-comma club

What do yo use to gauge property value? I include our RE in the NW calculation but both accounted at purchase price.

 

[dvalley]

Congrats-awesome progress from your first post!

Thanks NgineER!

Congratulations on such huge milestone and welcome to the two-comma club

What do yo use to gauge property value? I include our RE in the NW calculation but both accounted at purchase price.

Thanks!
I simply use Zillow for the current value. Where I live the values have historically gone up so I feel fairly safe using it. In fact, we're now past the highest values just before the 2009-10 RE meltdown era.

 

[YeahNo]

Two comma NW club...congrats. Big step!! Hard work is paying off my friend.

 

[Scratchy]

My Q2 2018 update:
Networth (savings+investments) = $642k
Primary home equity = $367k
AA = 77% equity / 23% cash

The big news this quarter is that the Total NW passed the $1,000,000 mark for the first time thanks to the hot RE market.

Just read this interesting thread from its beginning. Thanks for sharing your story here. Congratulations on your steady progress and hard work. I see that you started out with W-2 income of about 125k. Would be interested to know your current income and yearly expenses, if you're willing to disclose those. Anyway, good luck going forward and please continue to update!

 

[dvalley]

@YeahNo, thank you!

@Scratchy, thank you. To answer your questions my W2 went up temporarily but the new responsibilities were killing my work vs. life balance. So I took a step back. I'm now making approx $130k but my work/life balance is so much better and relaxed that to me it's well worth the pay cut. According to Personal Capital over the last 5 yrs my AVG annual expenses were $55k which includes (vacations, toys, house repairs, roof etc). I'm targeting approx $50k per yr in retirement. At 4% SWR I need approx $1.25M but I'll try to hit 1.4/1.5M just to be on the safe side. Hope that answers your questions, let me know if you have any other questions.

 

[UnrealizedPotential]

I think it's fine if you want to use Zillow to guesstimate your total net worth. However, I certainly would not base any retirement decision based on what Zillow says your home is worth. My experience has been that Zillow tends to over estimate . Atleast that was my experience.


I would use additional sources other than just Zillow as you get closer to pulling the plug to get a good estimate of what your real estate is worth.

 

[Scratchy]

@YeahNo, thank you!

@Scratchy, thank you. To answer your questions my W2 went up temporarily but the new responsibilities were killing my work vs. life balance. So I took a step back. I'm now making approx $130k but my work/life balance is so much better and relaxed that to me it's well worth the pay cut. According to Personal Capital over the last 5 yrs my AVG annual expenses were $55k which includes (vacations, toys, house repairs, roof etc). I'm targeting approx $50k per yr in retirement. At 4% SWR I need approx $1.25M but I'll try to hit 1.4/1.5M just to be on the safe side. Hope that answers your questions, let me know if you have any other questions.

Appreciate your response. 1.5M would mean a 3 % SWR which is probably a reasonable target for a retirement at age 50-most people here would probably consider 4 % WR at age 50 risky. What are your plans for health insurance once you retire? COBRA/CAL COBRA may be available to you for eighteen months or three years but the premiums may be high. After that, depending on the landscape for health insurance, you could be looking at premiums of 15k/year or more (conservatively speaking, assuming no subsidies available), if policies are even available on the individual market. I have no solutions, obviously, but it's something to keep in mind as a potential serious wrench in your plans for ER.

 

[dvalley]

@UnrealizedPotential - you're right. I usually take off a few grand just to be on the conservative side but also since I have a fairly long time horizon still I'm not too concerned about the exact amounts...yet.

@Scratchy - Yes, I'd be pretty happy with anything under 4% like 3.7% or 3.5% but anything beyond that is icing on the cake.
As for healthcare when I look at the ACA plans and put in $30k of income (under $10k I can get medical) the plan premiums range from less than $400 to $2500 annually. Even with the deductibles I'm less than $10k per year.

As far as the ACA viability, who knows what will happen in the next 10yrs or even beyond that. I'm sure I won't be the only one facing that situation. Then there's always Mexico, Thailand...or the lead pill as the backup options

 

[Scratchy]

@Scratchy - Yes, I'd be pretty happy with anything under 4% like 3.7% or 3.5% but anything beyond that is icing on the cake.
As for healthcare when I look at the ACA plans and put in $30k of income (under $10k I can get medical) the plan premiums range from less than $400 to $2500 annually. Even with the deductibles I'm less than $10k per year.

As far as the ACA viability, who knows what will happen in the next 10yrs or even beyond that. I'm sure I won't be the only one facing that situation. Then there's always Mexico, Thailand...or the lead pill as the backup options

I agree with what you point out-who knows what will happen with health care (or for that matter the financial markets). The best we can do is act prudently, have some plan in mind, and be flexible and ready to adapt to whatever comes our way. I'm guessing you will land on your two feet and not be pulling out that lead pill

 

[dvalley]

My Q3 2018 update:
Networth (savings+investments) = $690k
Primary home equity = $360k
AA = 79% equity / 21% cash

The stretch goal of reaching $700k in 2018 seems like a possibility now IF the market continues its upward trend.

 

[gauss]

My Q3 2018 update:
Networth (savings+investments) = $690k
Primary home equity = $360k
AA = 79% equity / 21% cash

The stretch goal of reaching $700k in 2018 seems like a possibility now IF the market continues its upward trend.

The first 100k is the toughest - so is the first M.

 

[dvalley]

The first 100k is the toughest - so is the first M.

Haha, so true! and then when you do reach the first M you realize it's not even that much money these days! Here's the list of my major milestones:

100k - done
250k - done
500k - done
750k - in progress
1MM
1.2MM
1.5MM <--this is about where I'll retire and my guess is I'll be 52 or so then

 

[Dtail]

Haha, so true! and then when you do reach the first M you realize it's not even that much money these days! Here's the list of my major milestones:

100k - done
250k - done
500k - done
750k - in progress
1MM
1.2MM
1.5MM <--this is about where I'll retire and my guess is I'll be 52 or so then

Keep it going. Great to have a goal in mind to offset any potential work situations that you don't like.