I think im doing it, suddenly

[shasta]

Hi-

I am 38

No kids, no marriage, no property except a car. (I prefer renting nice modern lofts as a single guy)

I worked in the technology sector for years as an engineering exec.

I have had many jobs over the last 15 years and always hated the politics involved in the workplace to make a good 100-200K per year or more.

An old company I was at in the early 90's just sold where I held a sizable payment from stock. I have 2.5M cash after taxes.

Right now I plan to;

- Drop all of the $$ into Vanguard with a 85% stock / 10% bonds / 5% cash split
- Live off of my 100K in savings till next year
- Make first draw on the investment portfolio next year and see how long I can do it?

I do not have many monthly expenses so I can draw low and higher / lower with a flux market. I wouldn't intend to spend more than 4% per year and likely can get by with 3% or 2%

I feel pretty free right now and think I should just go for it.

I would move from Nevada to Washington. Thinking about just going into business for myself doing technology consulting when I can stomach it and using the investment portfolio income as my "base executive salary" making my own bonuses on the side in consulting when I feel like buying something big or get bored (like do a bunch of consulting the year before I need a new car)?

Firecalc says I would do well under many conditions.

Plus I have other private company stock out there that could return an additional 1-5M cash in the next 2-3 years given how its going.

I think I am ready to do this.

Of course its new so scary.

Am I daft?

Am I ready?

I feel like already making great income for years and knowing the value of working hard for money and what it cost my soul to live in that corporate political space has well prepared me to manage this budget / portfolio well and not ruin myself.

I feel like I should be able to grow my core cash to 7M or so before I need to retire-retire. I have even already made a budget thru to 2020

So ask me the hard questions - what havent I thought of?

BTW - hi everyone. I have read some posts, this place seems lovely

 

[pb4uski]

At your young age, I would shoot for a 3% WR rather than 4%. Vanguard can do a financial planning session for you. Given the flexibility in your expenses, you're good to go. Try it for a year and see how it goes.

Welcome and congratulations!

 

[obgyn65]

If FIREcalc says you are good to go, then you are good to go.

 

[shasta]

Firecalc said I could draw 100K the first year and then 4% each year based on how the portfolio +/- using the 95% rule for WD's on loss years.

I budged to draw 81,814K or so the first year which is below FireCalcs 100K

I am very frugal. I drive <100K car and travel well for vacations using my experience from decades of business travel. I can get around and have a lot of fun for little.

 

[Htown Harry]

Welcome, Shasta.

I agree you are there financially.

Questions:

1. have you checked ehealthinsurance.com and the Washington health insurance exchange calculator for your HI budget number? Washington Healthplan Finder

2. How realistic / conservative is your consulting business plan? (Not that it matters that much with your stash and withdrawal rate). Do you have business contacts in Washington?

3. You have listed many things you are ready to leave behind. Have you developed a list of things you are looking forward to?

Book recommendation: Work Less, Live More by forum member ESRBob (Clyatt). It is specifically oriented to semi-retirement.

 

[MichaelB]

Welcome aboard, Shasta, and congratulations on your achievements. While FIRECalc gives a thumbs up to 4%, over such a long period I would second pb4uski's suggestion to keep it at 3% or less. Your other private stock could be a game changer, but that has to happen first.

 

[Ready]

Shasta, you're quite young to have achieved such success - congratulations!!

I see no problem with you quitting your job, but at 38 you will need something to do to find a purpose. Perhaps you already have that and haven't shared that with us. Doing some consulting might be a good solution to ease into ER for you. In any case, welcome to the forum!

 

[shasta]

The forum member status status for new users is hilarious.

 

[ER Eddie]

Awesome that you have so much socked away at 38. Congratulations!

I would just quibble with calling yourself "very frugal" because the car you drive costs less than 100K. j/k, welcome to the forum.

 

[scrabbler1]

I agree with the others who suggested the following:

(1) FIRECalc.

(2) Keep your SWR no higher than 3%.

(3) Get your health insurance ducks in a row first, especially if you are moving to another state.

(4) Make sure you have a few things to do when you make the leap, whether it is volunteer work, traveling, pursuing new hobbies and interest, etc. If you can line these thigns up before you move to another state, so much the better.

 

[shasta]

Awesome that you have so much socked away at 38. Congratulations!

I would just quibble with calling yourself "very frugal" because the car you drive costs less than 100K. j/k, welcome to the forum.

Its that most of the guys from MegaCorp past want to have 250K Aston Martins and be able to afford that kind of stuff their whole life if they are to get out of the game.

Ill settle for warm long summers.

 

[F4mandolin]

If you are looking for warm LONG summers....Washington (state,I assume?) is not likely the place. Nice summers.....yes. But if you are heading to this state....welcome.

 

[omni550]

shasta,

Welcome aboard. Sounds like you are good to go.

With your new free time, I'd suggest looking into meetup.com (in whatever area you are living or even vacationing) as a means of meeting others who self-select to get out and do fun things.

omni

 

[ER Eddie]

Its that most of the guys from MegaCorp past want to have 250K Aston Martins and be able to afford that kind of stuff their whole life if they are to get out of the game.

Sheesh, that's another world to me. Yeah, I guess "under 100K" would be frugal, compared to that. Me, I'm driving a '03 Honda Civic I paid 7K for, lol (but then, I'm retiring next year).

Anyhow, sounds like you're set, so pull the plug and enjoy.

I have heard many times that the key to a happy, successful retirement is planning, so I agree with others who've suggested giving a lot of thought to what you want to be doing with your newfound freedom.

 

[hausfrau]

Is there a contingency plan in there for marriage/kids? You're only 38. With all your free time, you may actually have time to meet someone and fall in love. You never know. My DH was a bachelor until his early 40's. He never expected to get married. Now we're parents.

 

[shasta]

Thanks for the feedback everyone.

3% is certnly doable as I should take it easy the first year anyway. Do things I haven't had the time to do when working / traveling like lounging aroundn with and visiting my senior family.

It will be exciting to see what the 85% stocks get me the first few years for my 3% at rebalance.

Question - as I get the cash payments on schedule, should I receive them at my personal bank and then transfer to custodian or have the paying agent send the funds directly to my custodian account ? Is there a tax penalty either way?

I have plenty of things to do with my time and am involved in many groups and efforts. I was married years ago in my 20s so not sure I'm doing that again.

 

[shasta]

Also should I hold out any additional 1st year cash before I transfer to vanguard and it becomes a cash assett or just transfer it to my personal spending accounts when needed over the next year? I'm guessing vanguard will just put the 5% in money market accounts at my main bank I use for personal spending / savings?

 

[shasta]

NM - I got all of this sorted. It feels like there is so much to do over the next 6-10 months adjusting to everything.

 

[shasta]

Ok - I am officially floating this year.

No action till next summers rebalance.

It feels scary.

I guess now that I am done playing finance manager I can go take some trips or visit family or look for some new "semi-work" projects.

 

[Brat]

Congratulations!

Don't hang back to long on 'semi-work' projects. As you doubtless know an absence of over a year can make your resume stale. Just keep your commitments short because you have a great to-do list.

I don't know where you want to live in WA but a bunch of MS employees in your age group recently 'retired' so there may be an overabundance of software folks looking for semi-work projects (my nephew's wife wants him to get out of the house and their 'grand tour of France' is expensive). If you relocate in WA but convenient to PDX you can hop a plane for projects easily while remaining reasonably available to Seattle. Intel employees shuttle between SJC and PDX. I hear that Portland's tech employers are recruiting.

 

[shasta]

What I really wanna do is move to Japan I think I'll settle into this new life in the US first then look to make the jump.

 

[GrayHare]

With non-w*rk time, it's not only your resume that gets stale, it's your skill set too. As you likely know, tech evolves so fast that the less you stay in the game, the more you fall behind. Within a year or two you won't be as sharp as others, beyond 5 you can still do "legacy" projects, after about 10 you are officially a dinosaur.

 

[daylatedollarshort]

I wouldn't worry about the resume going stale. If you are FI you can always go back to school to bring your skills up to date. I did that after being off for years with kids.

It can be quite an advantage because if you have a regular job you usually have to work 40 hours a week on that. But if you are off you can take classes and work on projects on your own on and acquire skills in whatever is in demand.

 

[CoolChange]

Stale skills may not be such a bad thing. My personal plan B (actually probably more like C or D) involves maintaining IBM 370 assembler, COBOL, PL/I, and other legacy systems after all the other folks who know anything about these systems are no longer able or willing to do so.

 

[MRG]

Stale skills may not be such a bad thing. My personal plan B (actually probably more like C or D) involves maintaining IBM 370 assembler, COBOL, PL/I, and other legacy systems after all the other folks who know anything about these systems are no longer able or willing to do so.

Nice gig, buddy of mine(who will never ER) is mantaining a bunch of legacy 370 assembly code, much of which I had a hand in developing. I asked about long term, I had thought the need for some of that code would be deprecated. He laughed, apparently Megacorp decided it would be the correct place to enhance security, as every online transaction ran through it.

He's actually doing new development in this 30 year old legacy code. And since it's all assembly, has the corporate security rules embedded all through it, probably a safe bet.

MRG