Hi Everyone --
I just discovered this site, and am really blown away by all the great advice and life experience here. I thought I'd share my own story and situation, and see what ideas people might have. Please forgive what will probably be a very long post!
I'm 39, have been employed for 17 years (school took a while, with advanced degrees). I love the work I do (solving technical challenges, helping people), but I hate the stress and deadlines that come along with it. If it wasn't for those aspects, I'd keep working forever. Maybe I just want to know that I can ER whenever I want, and that will help reduce the pressure of the job. I'm not sure.
I've been married for 16 years. My husband is in the same line of work I am in, and we both have been living below our means for a long time--although we are not totally frugal. We own two homes, which is definitely a luxury. But they are paid off, and the maintenance costs are low on both of them.
I'm looking to be able to ER in three or so years. We have saved about 2M in investable assets. I had always thought, before the big crash in 2008, that the best investment plan was a diversified holding of stocks and bonds. Buy and hold, get the average market return, and plan to withdraw about 4% per year.
However, with the scandals that happened, I became worried that there is not enough oversight of the financial markets, and I just don't trust the system enough to have a lot of my money tied up in it. So, my investment allocation now looks like this: 15% stocks, 60% rental real estate, 25% cash/CD's. All the stocks and cash are in a Roth IRA. We have no debt.
Over the past three years, we've bought several rental properties for cash. We totally renovated all of the properties, so that there are no deferred issues. Wiring, roofs, plumbing, HVAC, windows, flooring, everything is new and of a quality that should last for a very long time. We pay for professional management, and the return after all expenses is about 7%
I chose rental property as the main way to obtain income for a few reasons: 1) it's somewhat indexed to inflation 2) I have more control over it than over the stock market 3) the costs are more transparent. I have chosen properties in established neighborhoods that have rented quickly. Of course, there's always risk. The neighbodhoods could decline, the towns could become less desirable, earthquakes can happen, someone could decide to manufacture meth in one of the units etc.
There's always risk.
Right now, the net income from the rentals is $3500/month. We have two properties we're in the process of purchasing/renovating. If those both pan out, and the renovation is successful, we should see about $7000/month which is more than plenty for us. It will probably take 9 months or so to get these projects finished. My plan is to continue to work through that time, and then for another year or so to build up a cash cushion outside of the Roth to cover repairs on the properties, and emergency stuff.
Well, that's a lot of info -- and it feels very good to write it all down. Thanks for reading and I would be so grateful for any ideas, questions, or criticisms.
I just discovered this site, and am really blown away by all the great advice and life experience here. I thought I'd share my own story and situation, and see what ideas people might have. Please forgive what will probably be a very long post!
I'm 39, have been employed for 17 years (school took a while, with advanced degrees). I love the work I do (solving technical challenges, helping people), but I hate the stress and deadlines that come along with it. If it wasn't for those aspects, I'd keep working forever. Maybe I just want to know that I can ER whenever I want, and that will help reduce the pressure of the job. I'm not sure.
I've been married for 16 years. My husband is in the same line of work I am in, and we both have been living below our means for a long time--although we are not totally frugal. We own two homes, which is definitely a luxury. But they are paid off, and the maintenance costs are low on both of them.
I'm looking to be able to ER in three or so years. We have saved about 2M in investable assets. I had always thought, before the big crash in 2008, that the best investment plan was a diversified holding of stocks and bonds. Buy and hold, get the average market return, and plan to withdraw about 4% per year.
However, with the scandals that happened, I became worried that there is not enough oversight of the financial markets, and I just don't trust the system enough to have a lot of my money tied up in it. So, my investment allocation now looks like this: 15% stocks, 60% rental real estate, 25% cash/CD's. All the stocks and cash are in a Roth IRA. We have no debt.
Over the past three years, we've bought several rental properties for cash. We totally renovated all of the properties, so that there are no deferred issues. Wiring, roofs, plumbing, HVAC, windows, flooring, everything is new and of a quality that should last for a very long time. We pay for professional management, and the return after all expenses is about 7%
I chose rental property as the main way to obtain income for a few reasons: 1) it's somewhat indexed to inflation 2) I have more control over it than over the stock market 3) the costs are more transparent. I have chosen properties in established neighborhoods that have rented quickly. Of course, there's always risk. The neighbodhoods could decline, the towns could become less desirable, earthquakes can happen, someone could decide to manufacture meth in one of the units etc.
There's always risk.
Right now, the net income from the rentals is $3500/month. We have two properties we're in the process of purchasing/renovating. If those both pan out, and the renovation is successful, we should see about $7000/month which is more than plenty for us. It will probably take 9 months or so to get these projects finished. My plan is to continue to work through that time, and then for another year or so to build up a cash cushion outside of the Roth to cover repairs on the properties, and emergency stuff.
Well, that's a lot of info -- and it feels very good to write it all down. Thanks for reading and I would be so grateful for any ideas, questions, or criticisms.