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Old 11-03-2009, 08:02 PM   #21
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Originally Posted by benb331 View Post
Thanks! I was leery of the "work for startups" advice. I've set up my whole life to be a quick but steady tortoise rather than a burnt out hare (sorry for the cliche). I've even turned down a promotion because I didn't like the amount of "off-hours" required by the position.
Good that you are avoiding small companies. You definitely would not match.

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Old 11-03-2009, 08:32 PM   #22
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Ben, it's great that you have such an ambitious plan for early retirement. My own plan is not nearly as ambitious; I am 27 and am hoping to be FI by 55. One other thing to keep in mind is the volatility of stocks over the short term. A bear market near retirement or early in retirement could have a profound effect on the sustainability of your portfolio over such a long retirement. I think you have a great plan and it certainly sounds attainable if you stay the course.
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Old 11-05-2009, 03:20 PM   #23
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Originally Posted by benb331 View Post
Any YMOYL readers here? The authors of that book are nonchalant about inflation for the most part.
You are quite correct. IMO that is a weakness in an overall excellent book.

However, I wouldn't worry too much about the fine details: a lot of changes can and likely will happen over the couple of decades, and it is impossible to anticipate them all. Whether you actually meet your targeted date is of less importance than the fact that you are laying a solid foundation for FI.

Having children would increase your future expenses quite significantly, and would likely postpone your retirement by several years. Only you can decide whether any anticipated non-financial benefits would outweight the negative financial consequences. Just be aware that a compromise will be necessary (contrary to what some people believe, there is no such thing as a free lunch).
"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)
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Old 11-23-2009, 12:07 AM   #24
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As a single and childfree male, I applaud your decision to not have any kids. That will greatly boost your chances of retiring early. I retired last year at the age of 45, in great part due to my not wanting to have children. As a DINK couple, you can get there, too.
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Old 11-23-2009, 01:27 AM   #25
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I second comments from Rich_in_Tampa - you are dealing with a long time frame and things can (and almost certainly will) change. I also started out not wanting children, a resolve that lasted until my mid thirties.

One thing that (IMHO) will not change is that costs of necessities will go up over time - inflation will bite and the longer the time frame the worse the damage. It is all too common to see people who retire comfortably on fixed incomes to find themselves with a declining standard of living as the age.

You are off to a great start, have a partner who is on the same page as you and have developed a plan. Keeping focused on the goal of FI will help keep on on track.

Good luck.
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Old 11-23-2009, 01:55 AM   #26
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Hey there,

I also am in a similar age range, 25, with the same goal, retiring in my early 40s. I also started getting serious about researching and mapping out a long term investing and work strategy around 20. So I am very similar to you, but just a few years further along.

I also work in a technical field, I am an electrical engineer, patent agent, and expect to soon be a patent attorney.

I think you are off to a good start, you seem to have a strong grasp of a lot of the basics needed in order to lay out a detailed long term plan investment plan, and you seem to have decided on how you will earn the necessary income in a way that will make you happy. You also have found a good partner in life, which I hope to do myself at some point.

I think you should look up something called the "Generation-X Retirement Calculator", I think that will give you a quick idea of how inflation is going to affect your plans. I found it very useful, it accounts for inflation, taxes, and the effects of an aggressive savings strategy. I plugged your numbers in, and your numbers do account for inflation, for the most part. I think your salary increases expected is a little too conservative, it should at least match inflation (I plugged this in as 3.5%). Also, your investment returns are fine, plug in an average of 7 or 8%, which is before taxes, and that should be conservative enough.

The remaining two big considerations are having a paid off house by the time you retire, and having enough excess income to pay for private health insurance, which I would say needs to be about at least $10k/year (+ inflation adjustments for each year). The only way you are going to be able to easily afford that, and perhaps some unexpected increases, is to have your house paid off by the time you retire. So, that will require a house you can pay off in about 20 years, so most likely, no more than a $250k house, at the largest, or, you can get a more expensive house (e.g. if you live in California where 250k is impossible), and then downgrade to the equivalent of whatever a 250k in that times inflation adjusted dollars.

Students loan interest is tax deductible, by the way, under a certain income limit, and you are easily under the income limit. I don't recommend paying them off quickly.

All of that should be pretty feasible, the biggest problem is go to be lifestyle creep, or if stuff happens, which it may. Your plan doesn't allow for much lifestyle creep. I am certainly hoping stuff doesn't happen to my plan either...but it is inevitable some adjustments will have to be made (e.g., the next 10 years are as bad as the last 10 years). Keep working on ways to improve your income, I think that will be your best bet for providing a little more breathing room in your plan. I think, if nothing else, your wife has a lot of income growth potential still to realize.
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Old 11-24-2009, 11:32 AM   #27
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Here you go: "Millennium Edition" Generation-X Retirement Calculator.

I was under the impression that "Generation X" and "Generation Y" (aka the "Millennial Generation") were two different things; but I suppose it doesn't reallt matter here because the o/p is only 22 and would prefer a calculator targeted at his age group.
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