Too early?

[Masher]

First I wanted to say that I love this forum and appreciate all the opinions and advice given. I lurk quite a bit, but wanted to take time to introduce myself and also ask a few questions.

I am 37 years old, single and not really cut out for this whole 'work' thing. I like to dabble and try out new things, but I get bored easily and long for the freedom to do whatever I want whenever I want. Most people don't seem to understand this. I just don't think I got the gene to be a good worker. I didn't like school at all either. All said, I think I have finally accepted this about myself and feel good about it. Tinkering, brainstorming, trying out new hobbies, etc...thats all fun, but as soon as it becomes an obligation...blech!

So I have to FIRE. Or at least reduce work obligation as much as possible. My concerns are about having such a long retirement. I could easily live into my 90's if family history is an indicator and I like the idea of science finding cures for aging (although I think I might be a generation or three early for that benefit). That means I need my investments to keep on giving in perpetuity for all intents and purposes. A 50-60 year retirement for me is not that far fetched.

My question is what kind of asset allocation works well for such a long retirement. It seems like a larger equity weighting would be good to beat inflation, but I risk a big down turn early on.

Or, can I just use the same rules that would apply for a 55 year old?

I know there are no set answers to this question and that it will always be a risk to bail early, but I am just wondering what advice would be unique for somebody retiring before 40 years old?

Thanks!

 

[chinaco]

Look at the Kaderli's site

http://retireearlylifestyle.com/

and Paul Terhorst's site

http://www.geocities.com/TheTropics/Shores/5315/][url]http://www.geocities.com/TheTropics/Shores/5315/[/url]

Each have books out. They each retired in their late 30's.

 

[Masher]

Thanks for the links...what an inspiration these folks are. I really like that they seem to really want to help others down the same path without trying to make much money off of it. I wonder if they had lower than 4% SWR's since they started so young, or if the bull market of the 90's let them do 4% or more? It looks like they might make some money from book royalties and other odd jobs as well? That could be helpful.

Having said that, the perpetual traveler lifestyle is not for me. I am a homebody although I do like traveling to national parks and other beautiful places near by. Just not into the cultures and people so much. That bug may hit me in the future though.

Thanks again...its good to be out of the shadows.

 

[wildcat]

My question is what kind of asset allocation works well for such a long retirement. It seems like a larger equity weighting would be good to beat inflation, but I risk a big down turn early on.

Hey Masher.

With your situation I do believe a heavy equity allocation is reasonable although you didn't provide us with your starting point. What I mean is, if you have a huge pile now, you may not have to take excessive risk in your portfolio to keep up with inflation.

So assuming you are kind of a tweener, why not hold apprx 3 yrs worth of living expenses in cash - cds, high yield saving accts., allocate a 10-15% portion towards TIPs & the bulk towards equities? The 3 yrs of cash related investments should cover most (I say most according to history) bear markets, TIPS provides fixed income with an inflation hedge & equities for the long haul needs of the portfolio.

 

[Goonie]

Masher, I like your "Topic"...."Too Early?" Kinda like "Too Rich" "Too Free" "Too Happy"

 

[donheff]

I am 37 years old, single and not really cut out for this whole 'work' thing. I like to dabble and try out new things, but I get bored easily and long for the freedom to do whatever I want whenever I want. Most people don't seem to understand this. I just don't think I got the gene to be a good worker. I didn't like school at all either. All said, I think I have finally accepted this about myself and feel good about it. Tinkering, brainstorming, trying out new hobbies, etc...thats all fun, but as soon as it becomes an obligation...blech!

That was me for 50 years. Then I discovered I had ADD and started on Ritalin. The last 5 years of work were a relative breeze. As soon as I ERd I dropped the crutch and went back to my footloose ways.

 

[Masher]

Good stuff.

I think a 3 year cash stash will work nicely for me. Not sure about TIPS, but they do seem like a good hedge in case inflation really really goes up (are they capped at all?). I currently use cash and a closed equipment leasing fund for the fixed income portion of my portfolio. I also have a junk bond fund, but not sure if it goes in the same category? As for assets, I am a bit shy of 1.6M with the house paid off. I am thinking of pulling the trigger at between 1.7 and 1.8. I can do a 3-4% sensible withdraw on that and be well within my budget. Sometimes I think I should stay at a 3% initial for the first few years and see if the port grows and then maybe bump it up to what would be a 3.5-4% initial rate if things look good. Just not sure?

Someone else suggested I have ADD....seems like a stretch, but who knows. In certain ways, much of my success has come from being interested in lots of different things as well as trying them out. I like to think of it as being very curious, but once the curiosity is satisfied I am on to the next thing.

Thanks!

 

[chinaco]

...
Someone else suggested I have ADD....seems like a stretch, but who knows. In certain ways, much of my success has come from being interested in lots of different things as well as trying them out. I like to think of it as being very curious, but once the curiosity is satisfied I am on to the next thing.

Don't know about ADD... But apparently you have ADG. Aversion to the Daily Grind!

 

[jdw_fire]

I can do a 3-4% sensible withdraw on that and be well within my budget. Sometimes I think I should stay at a 3% initial for the first few years and see if the port grows and then maybe bump it up to what would be a 3.5-4% initial rate if things look good. Just not sure?

Have you considered Gummy's sensible withdrawals plan?
http://www.gummy-stuff.org/sensible_withdrawals.htm

 

[HobbyDave]

Someone else suggested I have ADD....seems like a stretch, but who knows. In certain ways, much of my success has come from being interested in lots of different things as well as trying them out. I like to think of it as being very curious, but once the curiosity is satisfied I am on to the next thing.

Hmm.. this sounds exactly like me. I actually haven't heard ADD mentioned, but at 29 I've had a silly number of hobbies, and I can't seem to stick with a single one. As soon as I think I've seen what the hobby is like, I move on. It's somewhat expensive too, because trying out some hobbies is tough without buying gear first (So says my 5k diving gear, 1k woodworking gear, 1k stain glass stuff, 2k gardening stuff, etc etc)

Well, I'd hate to drug myself up, but I wonder what it would be like if I could actually stick with something?

 

[Masher]

Thanks jdw-fire...I love Gummy's stuff! I can't imagine not doing some version of this. My spending over the last 3 years (thats how long I have used Quicken to track it) has been all over the place and I don't think that it makes sense to spend precisely 4% or 3.5% plus inflation every year. Thats just not the way my spending works, especially since I plan to have enough money so that my yearly budget has plenty of optional expense items included.

Ceberon...the first step to solving our problem is admitting that we have one...maybe 12 steps could be a new hobby! I won't even go into all the crazy tangents I have gone into and I agree that tooling up for the hobby can be costly. One of the benefits of recognizing my behavior has been to be a little more sensible about spending money on any particular bug I have at the time. If I do tool up now, I make sure I won't lose much if I have to sell, or I spend more time building and less time buying. Its tough though...the current bug is to build an electric vehicle...that can be expensive.

Thanks for the welcome everybody!

 

[runchman]

For those jumping around with hobbies and interests, and not fitting the 'cut out for a job' mold, you might want to do one of those personality-type quizzes and see if you happen to be an INTP.

Don't ask me how I know.....

- John

 

[getoutearly]

For those jumping around with hobbies and interests, and not fitting the 'cut out for a job' mold, you might want to do one of those personality-type quizzes and see if you happen to be an INTP.

Don't ask me how I know.....

- John

Funny you should mention this. I was going to suggest the same thing. I know, because I am.... and I suspect many on this board are...

 

[donheff]

For those jumping around with hobbies and interests, and not fitting the 'cut out for a job' mold, you might want to do one of those personality-type quizzes and see if you happen to be an INTP.

Don't ask me how I know.....

- John

I took an online Myers Briggs a couple of weeks ago when we had the lazy personality quiz and I came out INTP. When I skimmed the description I didn't see anything about jumping around. Should I re-read? I did have some sort of Executive coaching inventory years ago and the interpretor described me as having a little search light on my head that swiveled around focusing on one thing after another but never staying put for long. Ideal for high level management but not for getting anything specific done.

 

[donheff]

This thread has me worried. Without my meds will paying attention to investments just be a short term hobby? Does that mean I will go down the financial tubes shortly Masher -- you sound like me. My dive gear is thirty years old, my windsurfers have been sitting idle lately, although my snowboard got a lot of use this year, and I just haven't gotten fired up for upgrading my webserver OS. Interestingly, a thread here somewhere got me interested in glasswork but the training times at the place near me have not been convenient. One positive note on my many hobbies/pastimes is I tend to stay with them for a matter of years before I loose interest.

 

[tiredofwork]

That was me for 50 years. Then I discovered I had ADD and started on Ritalin. The last 5 years of work were a relative breeze. As soon as I ERd I dropped the crutch and went back to my footloose ways.

Donheff and Masher - what kind of work do you do? My 15-year has just been diagnosed and has started with meds. He hates school and is failing most of his classes. He thinks of himself as 'lazy' and can't think into the future beyond "today". I'd like to steer him to work that will keep his interest and not require college.

 

[donheff]

Donheff and Masher - what kind of work do you do? My 15-year has just been diagnosed and has started with meds. He hates school and is failing most of his classes. He thinks of himself as 'lazy' and can't think into the future beyond "today". I'd like to steer him to work that will keep his interest and not require college.

First, let me caution you that I questioned if I actually had ADD and, if so, to what degree. The diagnosis was borderline. But the description of problems associated with it certainly fit my school career and I figured that if I had been able to compensate and be successful for 25 years at work it might be fun to try the meds and see if it actually made work easier --- in fact, it did.

That said, it is not possible to know what sort of work will be "good" for someone with ADD. For mild cases like mine I understand that it is fairly typical for people to have a hard time focusing on things that don't interest them - we can't "stay on task." On the other hand, we can often focus intently on things that do interest us, putting in long hours on studies, hobbies, or job tasks that we find appealing. Simply challenging isn't the issue -- it needs to interest and engage us. A challenge that doesn't engage our interest is very difficult for us to stay with. So the bottom line is it depends on the individual.

I spent 20 years in HR and 10 in IT. For 15 years I was a senior executive so I was able to focus deeply on matters that interested me and detail much of the stuff that didn't. That is probably the main reason I was successful. Even with the ability to delegate I had to deal with stuff that I didn't like -- the typical management BS everyone here complains about like strategic planning, mission, vision, values, etc. Those parts of the job were becoming almost impossible for me to do well by around 2000 when I was put on Ritalin. The effect was that I found it much easier to focus on stuff I would otherwise have faded out on -- it was great in senior staff meetings The down side is that it wires you a bit - it is, after all, speed. So when I quit work I quit Ritalin. I also never used it outside of work -- weekends or vacations. My son uses it and has reacted the same way but I still worry about the potential for abuse.

For a kid starting out it would be very helpful if he can find something that he really likes. For many (including me) that includes things like computers - for example programing or engineering. In my case I got interested in networking when I got into IT even though I didn't have a technical background. I ended up very popular with my network engineers because I liked what they did and could talk with them about setting up routing tables and configuring firewalls. The problem was that as a manager I couldn't spend work time on that sort of thing.

If I were to do things over, I would probably go into some sort of engineering.

 

[tiredofwork]

donheff- Thanks for the feedback. He does like computers, but only for the games, IM, and myspace.

 

[HobbyDave]

donheff- Thanks for the feedback. He does like computers, but only for the games, IM, and myspace.

I have the same types of issues, I moved from a software engineer position into management. In some ways, management has been great, as I can focus on those things that interest me and delegate those that don't. However, as has been mentioned, there are boring things in every job, and I often find myself struggling to force myself to do tasks I am avoiding.

However, I've always been interested in computers, and I've often managed to focus pretty heavily on programming work. As donheff mentioned, a person with ADD can often focus very heavily on a task, as long as it's interesting. I found programming interesting, so I was able to easily sit for 10 hours programming, and at the end of the 10 hours be surprised at how much time had flown by (and how many cokes I'd drank).

Personally, I was one of the early internet adopters, so there weren't a lot of myspace / IM type distractions when I was online. I found those later, which causes me problems now Instead of working on my personal coding project in the evenings, I'll find myself reading stories on Digg, or something else of that nature.

I guess the main thing he'll need to do is find things that he can get absorbed in. Perhaps remove access to all those internet distractions and see if coding actually is interesting once he tries.