scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,699
Back in the late 1990s, I had the dual fortunes of being in my peak earnings years at my old job and peak investment gains in both my 401k and taxable accounts. I was also getting most of the shares in my company stock (ESOP) program and those shares would explode in value in the mid-2000s, enabling me to ER at the end of 2008.
Refinancing my mortgage back in 1992 helped put me on a path to being able to save an extra $200 per month and that, combined with the beginning of the 1990s boom soon gave me enough savings to take some of those market gains and pay off my mortgage by early 1998. Even though my non-retirement savings took a small hit, the huge market gains at the time more than offset the hit to my portfolio. I had just hit the $100k mark in my non-retirement portfolio but dropped below it temporarily before going back over that mark within a few months.
For the next few years, I was living on 1 biweekly paycheck and saving/investing the other one. Wow, that was pretty awesome! It took only 3 years to go from $100k to $200k in my non-retirement portfolio. My 401k was slightly lower but its value had also doubled in that time.
The seeds to achieving an ER had been planted.
Greatly reducing my monthly expenses along with my nice portfolio allowed me to switch to working PT by mid-2001. I was already living on one paycheck, so reducing my net pay by 40% still allowed me to save while easily covering my expenses.
The stock market slowed for a few years in the early 2000s but then my ESOP took off, so by the middle of 2004 the 401k had overtaken my non-retirement portfolio. It was rising 20%-25% and the next seed for my ER was being planted. I would cash out the stock a few years later (at favorable tax rates) when its value had grown by 3,000% (yes, three THOUSAND) compared to 1997.
I took a hit in 2008 like everyone else did but I also used the down market to buy in at some bargain basement prices, further enhancing the start of my ER. So even falling asset prices turned out well for me.
These days, in my 8th year of ER, even earning zero in wages I have seen increases in my portfolio despite pulling out nearly $30k each year in (unreinvested) dividends.
Life is good.
Refinancing my mortgage back in 1992 helped put me on a path to being able to save an extra $200 per month and that, combined with the beginning of the 1990s boom soon gave me enough savings to take some of those market gains and pay off my mortgage by early 1998. Even though my non-retirement savings took a small hit, the huge market gains at the time more than offset the hit to my portfolio. I had just hit the $100k mark in my non-retirement portfolio but dropped below it temporarily before going back over that mark within a few months.
For the next few years, I was living on 1 biweekly paycheck and saving/investing the other one. Wow, that was pretty awesome! It took only 3 years to go from $100k to $200k in my non-retirement portfolio. My 401k was slightly lower but its value had also doubled in that time.
The seeds to achieving an ER had been planted.
Greatly reducing my monthly expenses along with my nice portfolio allowed me to switch to working PT by mid-2001. I was already living on one paycheck, so reducing my net pay by 40% still allowed me to save while easily covering my expenses.
The stock market slowed for a few years in the early 2000s but then my ESOP took off, so by the middle of 2004 the 401k had overtaken my non-retirement portfolio. It was rising 20%-25% and the next seed for my ER was being planted. I would cash out the stock a few years later (at favorable tax rates) when its value had grown by 3,000% (yes, three THOUSAND) compared to 1997.
I took a hit in 2008 like everyone else did but I also used the down market to buy in at some bargain basement prices, further enhancing the start of my ER. So even falling asset prices turned out well for me.
These days, in my 8th year of ER, even earning zero in wages I have seen increases in my portfolio despite pulling out nearly $30k each year in (unreinvested) dividends.
Life is good.