AnIntentionalRoad
Recycles dryer sheets
Hi,
We've been lurking on these boards for the past 6-7 months and have found your insights very valuable (and entertaining at times) and thought I would introduce ourselves. I was an old Motley Fool fan in the early 2000's and like the common sense, DIY vibe on this forum.
I'm 43 and my wife, er DW, is 42. We have two kids, 12 and 9. And, I plan to give notice to my employer on August 5th and join all of you fine FIRE'd folks!
My life's goal has always been financial independence. Not because I don't want to work but because I don't want to have to work. I've always strived to get to a critical mass as Bob Brinker says where I could choose how to live my life, working or not. Now, I live the phrase FIRE even more.
DW and I are very blessed that I started a company 7 years ago that was very successful (and very stressful). We sold the company last August 4th. Now, you understand why August 5th is such an important date--it is when I've completed my 1 year requirement to stay aboard the company after it was sold.
Then, on Sept 1st or thereabouts, we'll be moving onto a 42' sailboat with our kids and sailing the Florida Keys, Bahamas, etc for a 1 year Family Sabbatical--homeschooling our kids. After 7 years of stress on our family and marriage from building a company, we feel we need to do something really big and both physical and symbolic to mark our transition from being working drones to FIRE'd. This was a very tough decision to embark on such an epic (for us) trip--we've done very little traveling in our lives and have always LBYM and been very conservative. But now that moving onto the boat is only 6 weeks away, we are very excited and glad we've decided to challenge ourselves.
Another thing about FIRE that I am so excited about is that I am not one of those people who won't know what to do with my time. I have so many interests and hobbies that choosing which ones to spend time on will be the only hard part.
Financially, here is how things are shaping up:
Assets:
- $4.5MM portfolio in 3 buckets (using Buckets of Money approach):
- $677K cash
- $1.7MM bonds (mostly short term municipals and TIPS right now)
- $2.1MM Equities (mostly SP500 index, a value fund, an international fund)
- $500K in RE equity (primary home and a FL beach rental house)
- Over next 12 mos, expecting additional $2MM before taxes from business
Liabilities:
- $40k in student loads (yes, still)
- Two mortgages of $400k and $285k on the two properties
WR:
- We are planning a 3.5% WR from what is currently in our portfolio. This is abt $150k/year.
- The estimated $2MM we are supposed to receive this Aug 5th and in 2013 we are not counting as part of our retirement portfolio and when we receive this we plan to put it in a "Bucket 4" to be used for investing in RE or private placement investments or buying toys...whatever we want. Even if we donate it all, we'll have comfort that our "retirement portfolio" of buckets 1-3 will still be there.
Distribution:
We will annual distributions out of the large cash holding. Once the cash is expended (every 4 years), we will sell bonds to replenish the cash bucket. Once the bonds are expended, we will take the equity holdings and redistribute it into cash, bonds, and equities all over again.
One concern that we have is our 3.5% WR. Being only 43 and 42, we are worried that we are being to aggressive. I've run FIRECalc projections and it shows a 96.6% chance of success with my approx 48/37/15 AA with the worst case being I run out of money in 45 years. I figure if we are tracking our portfolio and we see things are not sustainable we can reduce our spending to match.
Of course, we are very, very fortunate to have such as portfolio at a relatively young age. But, I am dedicated to managing this ourselves. We want to be in charge of our finances and our lives. Believe me, there have been many financial managers and private banks that have sought our business. Being a DIY'er, though, I do have the fear of making some bonehead mistake and/or develop on projections that are just not solid because of a mistaken assumption.
Does this seem reasonable? What level of projected success do others seek in their FIRECalc projections? Obviously 100% would be better and if I tweaked my cash down to around 10% and equities up to 53%, I would be at 100% according to FIRECalc.
Thanks for listening,
AIR
We've been lurking on these boards for the past 6-7 months and have found your insights very valuable (and entertaining at times) and thought I would introduce ourselves. I was an old Motley Fool fan in the early 2000's and like the common sense, DIY vibe on this forum.
I'm 43 and my wife, er DW, is 42. We have two kids, 12 and 9. And, I plan to give notice to my employer on August 5th and join all of you fine FIRE'd folks!
My life's goal has always been financial independence. Not because I don't want to work but because I don't want to have to work. I've always strived to get to a critical mass as Bob Brinker says where I could choose how to live my life, working or not. Now, I live the phrase FIRE even more.
DW and I are very blessed that I started a company 7 years ago that was very successful (and very stressful). We sold the company last August 4th. Now, you understand why August 5th is such an important date--it is when I've completed my 1 year requirement to stay aboard the company after it was sold.
Then, on Sept 1st or thereabouts, we'll be moving onto a 42' sailboat with our kids and sailing the Florida Keys, Bahamas, etc for a 1 year Family Sabbatical--homeschooling our kids. After 7 years of stress on our family and marriage from building a company, we feel we need to do something really big and both physical and symbolic to mark our transition from being working drones to FIRE'd. This was a very tough decision to embark on such an epic (for us) trip--we've done very little traveling in our lives and have always LBYM and been very conservative. But now that moving onto the boat is only 6 weeks away, we are very excited and glad we've decided to challenge ourselves.
Another thing about FIRE that I am so excited about is that I am not one of those people who won't know what to do with my time. I have so many interests and hobbies that choosing which ones to spend time on will be the only hard part.
Financially, here is how things are shaping up:
Assets:
- $4.5MM portfolio in 3 buckets (using Buckets of Money approach):
- $677K cash
- $1.7MM bonds (mostly short term municipals and TIPS right now)
- $2.1MM Equities (mostly SP500 index, a value fund, an international fund)
- $500K in RE equity (primary home and a FL beach rental house)
- Over next 12 mos, expecting additional $2MM before taxes from business
Liabilities:
- $40k in student loads (yes, still)
- Two mortgages of $400k and $285k on the two properties
WR:
- We are planning a 3.5% WR from what is currently in our portfolio. This is abt $150k/year.
- The estimated $2MM we are supposed to receive this Aug 5th and in 2013 we are not counting as part of our retirement portfolio and when we receive this we plan to put it in a "Bucket 4" to be used for investing in RE or private placement investments or buying toys...whatever we want. Even if we donate it all, we'll have comfort that our "retirement portfolio" of buckets 1-3 will still be there.
Distribution:
We will annual distributions out of the large cash holding. Once the cash is expended (every 4 years), we will sell bonds to replenish the cash bucket. Once the bonds are expended, we will take the equity holdings and redistribute it into cash, bonds, and equities all over again.
One concern that we have is our 3.5% WR. Being only 43 and 42, we are worried that we are being to aggressive. I've run FIRECalc projections and it shows a 96.6% chance of success with my approx 48/37/15 AA with the worst case being I run out of money in 45 years. I figure if we are tracking our portfolio and we see things are not sustainable we can reduce our spending to match.
Of course, we are very, very fortunate to have such as portfolio at a relatively young age. But, I am dedicated to managing this ourselves. We want to be in charge of our finances and our lives. Believe me, there have been many financial managers and private banks that have sought our business. Being a DIY'er, though, I do have the fear of making some bonehead mistake and/or develop on projections that are just not solid because of a mistaken assumption.
Does this seem reasonable? What level of projected success do others seek in their FIRECalc projections? Obviously 100% would be better and if I tweaked my cash down to around 10% and equities up to 53%, I would be at 100% according to FIRECalc.
Thanks for listening,
AIR