Portfolio and and retirement plan critique. Do I have enough?

[Starper]

Wow, you don't even have any idea of what side business you'd like to get into, and you already have 10 clients lined up that you can whittle 2-3 away because they aren't a "perfect" client.

Of course, in your own words:



So, by extension, you can expect it to be "more and more common" that your @**hole clients in that very same corporate world will be more and more prevalent. But somehow, so many more 'good' clients will be beating a path to your door so you can just turn your back on everyone who doesn't meet your definition of business perfection.

Just trying to add a dose of realism to what sounds like hypersensitivity to "perfection" and what you are willing to put up with in the wide world of business.

And out of curiosity, what are all of the types of jobs you've held so far, and in what industries?

I work in financial services. Perhaps I'm being a little paranoid here, but I'd rather not get into the specifics of what I do given how much I have already disclosed about myself. What's relevant here is that I have acquired most of my technical skills while working for big companies, so my skill set is best suited for this type of work rather than starting my own business, joining a startup or working as a freelancer. It would take at least a few months to acquire similar skills which are more common in the small business/freelancing space in my line of work.

As for your other comments, I get the point. Of course, many customers are also a-holes and some of them may be worse than most corporate bosses. However, if I am location independent, I'll only need a fraction of the money I am making now which means that I'll able to be more selective with clients than I am now with bosses and colleagues.

 

[jim584672]

Hmmm, mid 30s with $320K. Nice start. No where near enough to retire.

 

[Closet_Gamer]

Starper -

An observation: it's really important in life to know whether you're running from something or towards something. My sense from your posts is that you're running from something -- a work environment that you don't like -- but that you don't have a coherent idea of what you're running towards. You've articulated some characteristics of what you'd like (freedom, income stream diversification, not dealing with jerky people, etc.) but you don't really have it nailed down.

At your age and in your circumstance there is no reason to just hunker down and take the beating for the next 20 years, but I do think a little "suck it up" life coaching may be I order. People are people no matter where you go and it's rare indeed to find a perfect situation. If you're a born, conflict averse introvert, no problem -- there are lots of successful people with those traits, but then be honest and consider that running your own biz will involve a lot of personal interaction and selling.

My suggestion: continue to save hard. This creates the flexibility and risk capacity to take a risk at jumping towards something specific you really want to do. Don't think about this as semi-retirement, think of it as taking a focused, intelligent and planful risk on something. But then know that you'll need to work your tail off to make that risk pay off. Getting away from something being hard isn't the point -- look for something where the environment and your own enthusiasm create the energy for you to do that hard thing each day with vigor and often (but not always) a smile on your face.

I've taken the big leap/risk three times in my career. I'm 1-for-3. All worth it and I'm better for the efforts, but none were easy and all were (frankly) scary.

Good luck.

 

[cooch96]

I have, and you are correct. Mid 80s prob of success is what I get.

Don't be too scared of a sub 99% success rate on this model. There is a school of thought that there is a 20% chance of a catastrophe in your lifetime. Anything from WWIII, to a natural disaster, to falling off a ladder and becoming paralyzed. There is no asset allocation or amount that can protect against these reliably, so hoarding for years to make this model say you're good to go 100% of the past isn't really all that useful.

FWIW, my current plan is to get to 80% chance of FireCalc success and then just be flexible to adjust as necessary to what life really throws my way.

 

[Starper]

Don't be too scared of a sub 99% success rate on this model. There is a school of thought that there is a 20% chance of a catastrophe in your lifetime. Anything from WWIII, to a natural disaster, to falling off a ladder and becoming paralyzed. There is no asset allocation or amount that can protect against these reliably, so hoarding for years to make this model say you're good to go 100% of the past isn't really all that useful.

FWIW, my current plan is to get to 80% chance of FireCalc success and then just be flexible to adjust as necessary to what life really throws my way.

I'll never aim for 100% or even 95% success rate. However, it would be nice to be able to cut discretionary expenses and/or have some room to cover emergency costs such as medical. On $1500/month, it's not impossible but very difficult. So, if I manage to save let's say $600K, I'll aim for 2K/month expenses and keep in mind that I might have to cut them to 1.5K or less at some point.

 

[aaronc879]

Contract work/temping is possible in my line of work and may even pay very well. I'll definitely look into it.

You're not ready to retire but I think you're a good candidate for semi-retirement. I quit full time work at age 31 with less net worth than you and now (age 36) am self employed contract worker and only work about 80 days per year to make about $12-15K in AGI which is enough to cover my expenses and let my investments grow. I think you could do something similar. I'd limit your travels though. You should have at least some sort of income/employment every year so you don't have a gap in your resume in case you need to go back to working for someone else. You could still travel a few months per year. I've spent at least part of the winter in Florida 4 of the last 5 years and then worked part time the rest of the year. It can be done, you just need to make sure there's contract work in the field you want to work in. Good luck.

 

[Starper]

You're not ready to retire but I think you're a good candidate for semi-retirement. I quit full time work at age 31 with less net worth than you and now (age 36) am self employed contract worker and only work about 80 days per year to make about $12-15K in AGI which is enough to cover my expenses and let my investments grow. I think you could do something similar. I'd limit your travels though. You should have at least some sort of income/employment every year so you don't have a gap in your resume in case you need to go back to working for someone else. You could still travel a few months per year. I've spent at least part of the winter in Florida 4 of the last 5 years and then worked part time the rest of the year. It can be done, you just need to make sure there's contract work in the field you want to work in. Good luck.

Yes, this is one of the options I am considering. The difficult part is, though, having to find a place to stay while you work part time, especially in the HCOL area where I live. I don't have any family here, so I can't just crash at their place while working and keep some of my stuff there while traveling. I'd need to get a hotel or airbnb while I have a temp job and also keep my things in self storage while traveling. How do you manage this? Or do you stay at your own place all the time and only work occasionally? For me, the whole point of not working is being able to travel, particularly overseas. If I can't travel I'll just keep my office job and make money while I can.

 

[Rick_Head]

I'll admit to not reading the entire thread. My guess is, if you have to ask, the answer is no.

 

[Ed_The_Gypsy]

Hmmm, mid 30s with $320K. Nice start. No where near enough to retire.

I am afraid that I agree.

A side job seems difficult in your situation and may actually be forbidden by your employment agreement. It is really hard to leave regular employment and jump into self-employment successfully. Highly unlikely to virtually impossible, actually. And it sounds like contract work may not be feasible in your business. In addition, it may be very hard to get back into your line of work if you leave and want to return (especially if you have antagonized someone on the way).

If memory serves, it might not be possible for a single person (and there may be an age requirement I am not aware of--other countries certainly have them) to get a residence permit for Mexico (my standard) with only $1,200/month, which would need $360,000 at 4%. It has been pointed out here before, there are places in the US where it may be cheaper to live, if you can adapt to the location. Some of these, I would not care to be stuck in.

This question from you is interesting. Usually, it is someone who says, "I have $5MM, do I have enough to retire?"

Starting on a 60-year retirement with your present assets is extremely risky.

It is time to make plans, but not time to jump, I think.

 

[daylatedollarshort]

If you can live off $20K a year you have 15 years of living expenses saved up. That is not enough to retire but enough to think about downshifting and checking out some more enjoyable career options:

https://en.wikipedia.org/wiki/Downshifting

 

[Starper]

I am afraid that I agree.

A side job seems difficult in your situation and may actually be forbidden by your employment agreement. It is really hard to leave regular employment and jump into self-employment successfully. Highly unlikely to virtually impossible, actually. And it sounds like contract work may not be feasible in your business. In addition, it may be very hard to get back into your line of work if you leave and want to return (especially if you have antagonized someone on the way).

If memory serves, it might not be possible for a single person (and there may be an age requirement I am not aware of--other countries certainly have them) to get a residence permit for Mexico (my standard) with only $1,200/month, which would need $360,000 at 4%. It has been pointed out here before, there are places in the US where it may be cheaper to live, if you can adapt to the location. Some of these, I would not care to be stuck in.

This question from you is interesting. Usually, it is someone who says, "I have $5MM, do I have enough to retire?"

Starting on a 60-year retirement with your present assets is extremely risky.

It is time to make plans, but not time to jump, I think.

There is also an early retirement program in the Philippines for persons over 35 y.o. You can either put $20K in a bank account as a collateral (don't know if they pay interest) or invest $50K+ in local real estate to get a retirement visa. A foreigner can buy apartments but not land there.

As for work, I agree it would be hard to get back especially after anything longer than a few months sabbatical. Not because I have antagonized people. I just haven't heard of anybody who did it.

Good point about the contract, I'll check it out.

 

[hnzw_rui]

There is also an early retirement program in the Philippines for persons over 35 y.o. You can either put $20K in a bank account as a collateral (don't know if they pay interest) or invest $50K+ in local real estate to get a retirement visa. A foreigner can buy apartments but not land there.

Interesting. I wasn't actually aware of the special visa so I decided to research.

http://money.usnews.com/money/blogs...of-retirement-in-thailand-and-the-philippines

Four types of special resident retiree visas are offered, starting with the SRRV smile program that allows you to remain in the Philippines for as long as you want provided you deposit $20,000 in a Philippine bank and keep it there for the duration of your stay. This visa is available to anyone who is 35 or older. There is no minimum income requirement.

You qualify for the SRRV classic visa program by depositing $50,000 in a Philippine bank or purchasing a condominium costing $50,000 or more if you are between ages 35 and 49. If you are age 50 or older, you need invest only $10,000, provided you have an individual pension of at least $800 per month. A couple must be able to show pension income of at least $1,000 per month.

Seems like the deposit requirement is to any Philippine bank so yes, that would be paying interest (albeit at abysmal rates). Guessing they just want foreigners bringing in money to the country to help the economy.

 

[Starper]

The Philippines program is probably one of the easiest in the world for early retirees right now. I am considering it, but I am still not sure whether or not I would retire in the Philippines. It's a nice place to visit (parts of it anyway), not sure about living there long term.

 

[old woman]

You are at a point where everything about work becomes better soon. You will be the boss or so good the boss won't want you to leave. Even if that isn't true you have enough money already not to fear termination so you can work fearlessly. If terminated collect unemployment while enjoying some down time. If you can keep working until you have more money than you think you will ever need it will relieve stress forever. Working a single extra year will net you 60K so you can dole that out to yourself at 1K a month for 5 years letting your current nest egg grow or at $500 a month while getting your start up started for 10 years. Take other jobs other places if offered like teaching English in other lands but have money to come home or make choices like marry someone where you are and have a baby when you are 50. One more year can fix the first 5-10 and two more years let you see if you retire into an up or down market. I retired in 2014 and this year am up only about .7% it would be scary if I hadn't worked a couple extra years.

 

[Starper]

You are at a point where everything about work becomes better soon. You will be the boss or so good the boss won't want you to leave. Even if that isn't true you have enough money already not to fear termination so you can work fearlessly. If terminated collect unemployment while enjoying some down time. If you can keep working until you have more money than you think you will ever need it will relieve stress forever. Working a single extra year will net you 60K so you can dole that out to yourself at 1K a month for 5 years letting your current nest egg grow or at $500 a month while getting your start up started for 10 years. Take other jobs other places if offered like teaching English in other lands but have money to come home or make choices like marry someone where you are and have a baby when you are 50. One more year can fix the first 5-10 and two more years let you see if you retire into an up or down market. I retired in 2014 and this year am up only about .7% it would be scary if I hadn't worked a couple extra years.

I don't think anybody will beg me to stay in my current job or offer any significant promotions anytime soon, but I agree with you that I can already breathe easier having the resources I have and being frugal.

I also agree that in my current situation, one year of working equals a few (3+) years of financial independence which is a good reason to stay put at least for a couple of years.

I don't think I'll get married, though, because marriage could completely derail my early retirement plan. Back in the old days, a man could make a couple of serious mistakes (expensive divorce, failed career choice) and still retire early if he played his cards right. These days, I feel that guys from my generation and younger have very little if any room for error. One big mistake in my life and I can kiss good bye my early retirement.

 

[Ed_The_Gypsy]

A point to consider:
In my industry, part-time work is hard to find. It is either overtime or laid-off. Consulting is also boom-or-bust.

If you are unfamiliar with consulting in your line of work, you could really be hurting if you try to become independent.

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