growing_older
Thinks s/he gets paid by the post
- Joined
- Jun 30, 2007
- Messages
- 2,657
Please let me introduce myself. I am an aspiring Early-Retiree, though the exact meaning of "Early" may be changing for me. I'm glad to have found this community and look forward to reading all the discussions here. I had intended to retire earlier (so I'd already be retired by now) but life didn't turn out that way for me.
I appreciate this interesting forum and will try not to get too depressed by the folks with six figure salaries or seven figure net worths. More power to you all. Especially kudos to the younger posters with serious retirement savings plans. Better to start as young as possible because you never know what the future might hold, but the freedom and options you gain are priceless.
When I was just out of college in the early 1980s I was gung ho on savings for retirement. As sole breadwinner, my salary was 18,000 and I figured that if we could reach a net worth of just under 80,000 we would be set for life. Remember these were the days of 15% to 18% prime rates, so even safe safe CD investments could earn fantastic rates of return. Unfortunately our expenses for the year were about 23,000 so our net worth went from zero to -5,000 that year. My wife and I got a serious case of remorse and took action. In retrospect it's a good thing I didn't get anywhere close to the 80,000 goal, as that plan was completely flawed, although it seemed sensible at the time. I can at least say the shock of realizing we'd dug ourselves into a hole had a positive effect on making us more responsible going forward.
We moved to a less expensive place, she went to work so we had two salaries, and we started serious savings through IRAs, 401k and anything else we could think of. Twenty years later we had traded residences twice and lived in a nice (fully paid for) house, had combined salary nearly 200,000 and net worth (excluding the house) of just over $2 million. Having reached our new savings goal, we were ready to retire but hesitated. And got slammed by the bursting tech bubble and a nasty divorce.
The overly aggressive investment plan that got us such a nice nest egg gave back more than 50% in a year. Both of our employers went out of business in the same month and jobs became very difficult to land. Ex-wife walked away from me and kids, but divorce laws here don't recognize fault, so she took the lion's share of remaining portfolio in order for me to keep the house and provide some measure of stability for kids. I had to pay her more than the original price of the house to "buy out" her half and ended up with a big mortgage, and almost 6 months of unemployment before I landed a job at about a 40% pay cut (70k), but at least I had something. Some of the guys I worked with went over 2 years without finding work.
I regret the overly risky asset allocation, but am glad I had the savings to support recovery from such a bad situation without any worse impact. Indeed, I had expected to be FIRE by now and had been working toward it for a long time. It's disheartening to see that goal move so far into the future. OTOH, I was able to support kids in same house, in same schools, in same neighborhood without having to move them away from friends. I pushed out my retirement significantly, but I will still be able to recover and save enough to have a decent retirement eventually. I weathered a bad investment plan, a serious industry slowdown, a horrible divorce and an extended jobless spell by having enough savings. Others I worked with who were less prepared had a much harder time and several were forced to move or lost houses to foreclosure. Having the savings gave me options and freedom when I really needed them.
Current situation:
Age: 49 single dad (kids 15 & 10)
Salary: 86K
Profession: Project Manager for software company
Monthly Expenses: $5400
Net Worth: 300K + about 100k equity (and 270k mortgage)
AA: mostly Vanguard index and bond funds with slice and dice to give slight value and small cap tilt
FIRE: at least 10 years away, maybe 15
Not looking for any advice just now, but pleased to meet you all. I'll probably want to ask questions and talk about FIRE plans later.
I appreciate this interesting forum and will try not to get too depressed by the folks with six figure salaries or seven figure net worths. More power to you all. Especially kudos to the younger posters with serious retirement savings plans. Better to start as young as possible because you never know what the future might hold, but the freedom and options you gain are priceless.
When I was just out of college in the early 1980s I was gung ho on savings for retirement. As sole breadwinner, my salary was 18,000 and I figured that if we could reach a net worth of just under 80,000 we would be set for life. Remember these were the days of 15% to 18% prime rates, so even safe safe CD investments could earn fantastic rates of return. Unfortunately our expenses for the year were about 23,000 so our net worth went from zero to -5,000 that year. My wife and I got a serious case of remorse and took action. In retrospect it's a good thing I didn't get anywhere close to the 80,000 goal, as that plan was completely flawed, although it seemed sensible at the time. I can at least say the shock of realizing we'd dug ourselves into a hole had a positive effect on making us more responsible going forward.
We moved to a less expensive place, she went to work so we had two salaries, and we started serious savings through IRAs, 401k and anything else we could think of. Twenty years later we had traded residences twice and lived in a nice (fully paid for) house, had combined salary nearly 200,000 and net worth (excluding the house) of just over $2 million. Having reached our new savings goal, we were ready to retire but hesitated. And got slammed by the bursting tech bubble and a nasty divorce.
The overly aggressive investment plan that got us such a nice nest egg gave back more than 50% in a year. Both of our employers went out of business in the same month and jobs became very difficult to land. Ex-wife walked away from me and kids, but divorce laws here don't recognize fault, so she took the lion's share of remaining portfolio in order for me to keep the house and provide some measure of stability for kids. I had to pay her more than the original price of the house to "buy out" her half and ended up with a big mortgage, and almost 6 months of unemployment before I landed a job at about a 40% pay cut (70k), but at least I had something. Some of the guys I worked with went over 2 years without finding work.
I regret the overly risky asset allocation, but am glad I had the savings to support recovery from such a bad situation without any worse impact. Indeed, I had expected to be FIRE by now and had been working toward it for a long time. It's disheartening to see that goal move so far into the future. OTOH, I was able to support kids in same house, in same schools, in same neighborhood without having to move them away from friends. I pushed out my retirement significantly, but I will still be able to recover and save enough to have a decent retirement eventually. I weathered a bad investment plan, a serious industry slowdown, a horrible divorce and an extended jobless spell by having enough savings. Others I worked with who were less prepared had a much harder time and several were forced to move or lost houses to foreclosure. Having the savings gave me options and freedom when I really needed them.
Current situation:
Age: 49 single dad (kids 15 & 10)
Salary: 86K
Profession: Project Manager for software company
Monthly Expenses: $5400
Net Worth: 300K + about 100k equity (and 270k mortgage)
AA: mostly Vanguard index and bond funds with slice and dice to give slight value and small cap tilt
FIRE: at least 10 years away, maybe 15
Not looking for any advice just now, but pleased to meet you all. I'll probably want to ask questions and talk about FIRE plans later.
