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Need Guidance From The Pros
Old 09-14-2004, 05:27 AM   #1
Confused about dryer sheets
Join Date: Sep 2004
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Need Guidance From The Pros

I've been lurking on this (and other) RE board for years now, but early retirement remains illusive. I'd appreciate any and all feedback on my situation:

Married 12 years, two sons (ages 4 & 9). I'm 39, my wife is 33. I've been working for county gov't for three years now - have $5K in pension, will become 100% vested at 5 years, can get full pension after 20 years. No health benefits upon retirement. I make $34,500/yr, my wife works PT as an assistant preschool teacher (full time mom-unpaid) and makes about $4K/yr.

I have $1K in a 457 plan thru work in addition to pension. Also have $8K in a Roth IRA. No additional savings.

Only debt is our house. We are 15 years into our 30 mortgage and have $55,000 remaining.

I think I would be good at ER and would like to try my hand at it as soon as possible. Any thoughts?
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Re: Need Guidance From The Pros
Old 09-14-2004, 06:16 AM   #2
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Re: Need Guidance From The Pros

Hello trailblazer! Well, you have a few hurdles
but it can be done. Raising kids is quite expensive no matter how you slice it. I am 60 and still paying
(they are worth it though).

If you are handy and think you could stand being a
landlord, I would suggest real estate. Knowing what I know now and being 39 again, that's what I would do.
A creative person can make a fortune. I see deals EVERY DAY. Seriously! But, I am all done working
and it is work for sure. Also, you need lots of
knowledge, but there are many ways to acquire it.
Consider this. I have owned raw land, single family homes,
duplexes, multifamilies, retail buildings, a manufacturing
plant, a hunting club, a condo, farm land,
vacation cottages, and I never lost a dime on anything.
True, I had to scramble to breakeven a couple of times,
but in real estate creativity and leverage can make you rich. Carlton Sheets ain't kidding

John Galt
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Re: Need Guidance From The Pros
Old 09-14-2004, 08:38 AM   #3
Thinks s/he gets paid by the post
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Join Date: Feb 2004
Posts: 2,670
Re: Need Guidance From The Pros

You didn't mention at what age you wanted to ER, but frankly, unless you hit the lottery, ER is not going to happen soon for you.

You will either need to get a second job, quit your current job and find a much higher paying job, leverage with real estate, or start your own business. The key is to be creative and take some risk. Essentially, you need to take more risk or just plain work harder or both to make ER happen.

It's great that you have $8K in a Roth IRA with the income you have because I know people that make double you income with no retirement savings. So keep saving as much as you can and paying down your mortgage as fast as you can without causing hardship to your family. It's OK to sacrafice, but not to exagerate.

Plus don't forget that having 2 great kids is much more important than ERing, and believe me, I'm a fanatic about ERing. In a sense, you are already a multimillionaire by having 2 children. So, don't get too concerned with taking invaluable time away from your kids just to earn an extra buck for ER. It is much easier to ER without kids, but being a parent myself, I would work till I died (shivers) if it were a choice between working and raising a great child.
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
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Re: Need Guidance From The Pros
Old 09-14-2004, 11:54 AM   #4
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Re: Need Guidance From The Pros

retire@40 makes good sense. I also am a fanatic about
ER. Truly! But, nothing is more important than my kids
and only people who are parents can fully appreciate

John Galt
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Re: Need Guidance From The Pros
Old 09-15-2004, 08:48 AM   #5
Confused about dryer sheets
Join Date: Sep 2004
Posts: 4
Re: Need Guidance From The Pros

Thank you John and Retire@40 for your recommendations, and I agree that being a parent has its own rewards. At age 32 I set a goal to ER at 39, but some health issues arose along the way.

We just finished paying off our non-mortgage debts this week, and thought about putting aside a three month ($9000) emergency fund next.

It's funny that you mentioned Carlton Sheets, John, because I bought his program eight years ago when we bought our house. We are interested in real estate, but wanted to pay off that debt and have an EF cushion first.

I forgot to mention that my wife is also an artist and would like to start her own business doing what she likes most.

I am teaching myself how to develop a website and done three free sites so far for my day job, but am having difficulty choosing what type of business to start.
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Re: Need Guidance From The Pros
Old 09-16-2004, 12:57 PM   #6
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Re: Need Guidance From The Pros

It is going to be tough to retire soon on that level of income. The positive side is that you are 17 years away from a defined benefit retirement and (reading between the lines) you have a stable job that will support your family. With children in the family, security is worth a lot. Your best outcome may be to put aside enough in the Roth and 457 plan to give you additional income after your defined benefit plan kicks in.

Remember that it takes most people well over 10 years to ER even when they are making big bucks and trying to sock away as much as possible. So 17 years is not too bad.

I would suggest that you try to increase your income somehow, either through getting additional skills or moving up into management in your county govt. Sometimes the only way to get a big raise is to move to another organization. But it is hard to walk away from a defined benefit pension. 20 years and out is a good deal.

If you are interested in making some money on the side, and you can write well, consider writing websites and advertising with Adsense. It is not big money but it seems to keep coming in. Take a look at my site as an example.
Skylark<br />Time flies like an arrow.<br /><br /><br />Poverty is not the absence of goods, but rather the overabundance of desire. <br />- Plato<br />
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