New Old Member

[Culture]

Hello World! I am a long-time reader (about three years) with a moderate post-count (about 250). As a result of my decision to implement an ER scheme in the near future, I have decided to get a new handle. Here is my story:

My wife and I have both worked and/or been full-time students since age 16. Since we married at 23, we practiced LBYM in order to achieve ER. We currently save about 50% of our after-tax income (which is equal to what we pay in taxes ), and our current SWR would be about 3.5% at our current spending (we want to spend a lot more in retirement on travel and hobbies). We invest in Vanguard index funds using the slice-and-dice approach. Currently we have about a 60/40 Equity/Bond+Cash ratio.

We figured that this would put us out of the workplace around 55. Fortunately, we have done much better than expected and find ourselves ready RE in our mid-40s. However, with children in school, we have decided that we need to semi-RE to provide stability until they are in college. Plus, I can't backpack the CDT while they are still at home anyway.

The solution? We have decided to both quit work and start a consulting practice. My wife has graciously agreed to become the "office manager," in charge of accounting, billing, collections , proof reading, calender, phone service and other misc. task. We figure she will work about 20 hours per week. I plan to work about 30-40 hours depending on how things go. I have a 600 SF home office (detached building) that I built for this purpose, which will save us 20 hours! per week in commuting. Thirty minute lunches in the kitchen will save us another 5 hours per week. Awesome! I have enough clients that I am confident I can work 20 hours without even attempting to build a client base, with 40 hours easily achievable if I want to market. I will break even with our current combined salary (net) at about 30 billable hours per week, but will match what we spend (net) at about 15 hours. My big concerns? Professional liability and health care. I have enough assets that it would be worth it to sue me.

We figure this to last five years. If it does not work out, no big deal, we can re-enter the workplace. I feel that there is a 99% change I will hit my marks, however.

In summary, things are looking wonderful, I have no complaints about my life, except lack of free time. I can't even really complain about that as my employer provides effectively unlimited schedule flexibility. Just get the work done. I grew up lower middle class and have felt wealthy since the day I got my first paycheck after graduate school. I even like my job, just don't feel like working full-time anymore. I actually dread resigning as I like my boss very much and I am going to feel like I am letting him down (he will have to train a new successor).

Anyway, we are giving notice on January 15, two weeks after bonus distributions at my office (this looks like a record breaking year, just like the last three have been). This has forced a change in user name because several of my employees know the relatively unusual user name that I used on this board and others. They have tracked down a few post on professional boards to give me a hard time about. While I have never posted anything here before that would really cause concern in the office, I would like to be able to discuss my move with the board without worrying about it. It do not mind dropping my old user name as I do not think anyone here really knows me anyway (Sir, I served with Nords; I knew Nords; Nords was a friend of mine. Sir, you're no Nords!). OTOH, IMHO, I've never said anything to stupid either .

Since I have never introduced myself before, I figure this would be a great chance to do so. I look forward to discussing my new move with the boards.

[Nords]

Welcome back, Culture.

Quote:

Originally Posted by Culture However, with children in school, we have decided that we need to semi-RE to provide stability until they are in college.

Sounds like you guys are doing fine, but I wouldn't overestimate the effect of ER on your kids.

Jarhead mentioned once that after he'd ER'd he spent months pretending to go to work in order to not ruin his teenage daughter's impression of him and the family routine. He didn't want her to worry or to ruin her work ethic.

The joke was on him. Years later when he talked about it with her, she said that she was so busy getting through being a teenager that she didn't notice anything, and wouldn't have cared even if she did notice.

As far as our teen's work ethic goes, this week she says she wants to ER after college. I don't think she's thought that through...

[Culture]

Quote:

Originally Posted by Nords Sounds like you guys are doing fine, but I wouldn't overestimate the effect of ER on your kids.

Nords,

While I think you are correct, none-the-less I am paranoid as I do not want the kids to think things are easier in life than they really are.

[Nords]

Quote:

Originally Posted by Culture While I think you are correct, none-the-less I am paranoid as I do not want the kids to think things are easier in life than they really are.

Our daughter is pretty much convinced that anything has to be easier than living with her parents...

[Culture]

Funny story this morning. My son has state mandated achievement testing today. They were told to bring bottled water to drink. I filled two clean empty bottles with tap water for him to drink. He refused to take them and wanted to go by the store to purchase bottled water. I don't think so. He took nothing instead. He told me when he got out of the car that he was going to fail the test.

[73ss454]

What's that old saying, when your become 13 yours parents get very dumb and when you hit 22 they get very smart again.

[Caroline]

Quote:

Funny story this morning. My son has state mandated achievement testing today. They were told to bring bottled water to drink. I filled two clean empty bottles with tap water for him to drink. He refused to take them and wanted to go by the store to purchase bottled water. I don't think so. He took nothing instead. He told me when he got out of the car that he was going to fail the test.

Does he fancy himself an environmentalist? Several upscale restaurants out this way have stopped serving bottled water because the shipping and bottling costs (we're getting some of that water from Armenia, fergawdsakes!) are terrible for the environment.

Might he like the tapwater approach better if he thinks he's saving the environment rather than saving you a few bucks?

[Culture]

Quote:

Originally Posted by Caroline Does he fancy himself an environmentalist? Several upscale restaurants out this way have stopped serving bottled water because the shipping and bottling costs (we're getting some of that water from Armenia, fergawdsakes!) are terrible for the environment. Might he like the tapwater approach better if he thinks he's saving the environment rather than saving you a few bucks?

Actually, he is somewhat of an environmentalist, but not enough to carry this. Nice suggestion, however.

[Niko]

Quote:

Originally Posted by Culture My big concerns? Professional liability and health care. I have enough assets that it would be worth it to sue me.

Set up an LLC/S-Corp and keep it capitalized, get a good liability insurance policy, and, most importantly, CYA all the time!

Good luck, and it sounds like you're well on your way.

[Culture]

Quote:

Originally Posted by Barry Set up an LLC/S-Corp and keep it capitalized, get a good liability insurance policy, and, most importantly, CYA all the time!

Thanks. We are setting up an PLLC (Professional LLC, required in Texas) and obtaining E&O insurance. What do you mean about keeping the LLC capitalized?

I am a pro at CYA!

[firewhen]

Culture,

Did you son tell you why he insisted on the bottle water? Does he think the tap water is dirty or does not want to be "cheap"?

This would kill me. We have free water coolers at w*rk, yet people line up at the $1.25 soda machine, which is either high calories, or with chemicals in the diet stuff, not to mention the $1.25.

Our children are still young enough not to give too many battles about this stuff yet, other than not wanting to wear hand-me-downs.

[Culture]

Quote:

Originally Posted by firewhen Did you son tell you why he insisted on the bottle water? Does he think the tap water is dirty or does not want to be "cheap"?

He cannot explain, and but it is pretty clear that it is because he does not want his friends to know that he is drinking tap water in recycled bottles. However, he is young, and still in training. I noted that my SIN appeared to not understand the LBYM that was modeled by her parents, but in fact the problem was that it was not HER MEANS. Once she got out of the house, she immediately became the pro that my wife is.

[Niko]

Quote:

Originally Posted by Culture What do you mean about keeping the LLC capitalized?

Whether you set up an LLC, PLLC (we don't have em in Oregon), or a corporation, you have to keep the entity adequately capitalized to maintain the liability shield with the entity. Basically, if you set up an entity but do not fund it, do not get adequate insurance, don't put LLC property into the name of the LLC, etc, a creditor of the LLC might be able to "pierce" the liability shield and go after the personal assets of the members. In short, you can't use your LLC as a shell and expect to keep the liability benefits. As long as you put LLC money and property into the name of the LLC, keep it insured, don't commingle personal and LLC assets, and hold your practice out as an LLC, you'll probably be fine. If you have doubts, just run your set-up by your attorney.

[Culture]

Quote:

Originally Posted by Niko Whether you set up an LLC, PLLC (we don't have em in Oregon), or a corporation, you have to keep the entity adequately capitalized to maintain the liability shield with the entity. Basically, if you set up an entity but do not fund it, do not get adequate insurance, don't put LLC property into the name of the LLC, etc, a creditor of the LLC might be able to "pierce" the liability shield and go after the personal assets of the members. In short, you can't use your LLC as a shell and expect to keep the liability benefits. As long as you put LLC money and property into the name of the LLC, keep it insured, don't commingle personal and LLC assets, and hold your practice out as an LLC, you'll probably be fine. If you have doubts, just run your set-up by your attorney.

Ahh. However, this does not appear to help me (I think, that is why I am seeing an attorney). In Texas, any person who is required to be licensed by the state to practice their profession must set up a PLLC, not an LLC. The law then specifically states "This Act does not remove or diminish any rights at law that a person receiving professional service has against a person rendering the service for an error, an omission, negligence, incompetence, or malfeasance."

Anyway, I am getting E&O and will do whatever my attorney directs me to do.