Anyone ever 'want more'?

[MichealKnight]

I'm almost 46. Wife, 2 young kids. I've never been to college even a day so no 'fallback' job as a doctor lawyer Indian Chief or plumber or dog catcher.

Anyhow, I had a mostly successful small business career....mostly set records, mostly did well - - until the very end where some things were my fault, and certainly a lot of it was bigger better competitors, and market forces that cut my run more prematurely than I'd have liked.

Basically, I have $3.4mm in liquid cash-stocks plus, own personal residence outright that easily is worth $1.0mm. I've been kicking back for 5 months now, plotting my overall strategy to stay retired ie asset allocation, possible real estate buys, etc.

Darnit, part of me wants my mini-empire back. I usually had a decent sized business - -a few acres and a building on a nice main road, staff of 40 full time people, lovely unique perks , choice seats at the hockey game, the whole nine yards. BUT - a big part of me is relieved. No more employee stuff. No more customer crap. No more sitting duck, waiting for the newest e-commerce fad to take a bite out of my bum bum.

But at times - I want it back. Many of my staff nucleus were with me 20+ years in what is a high turnover business. And a few of my best people - visit with me once a week, telling me that the minute I start a new business - - they'll take a huge pay-cut and join me in a heartbeat.

So the last month I was on a piece of property - - freaking choice location. BUT....would've taken some time vis a vis tearing down buildings, paving lots, getting permits, establishing lines of credit, hiring a few people (would've been just 8 of us, a tiny army all of us hands-on ), construction of a new facility....THEN, some decent losses while the business establishes and I learn the new market.

Total cash needed was $2.3 million.

I punted. I certainly made a good faith offer, but deep down I was scared of the risk. Had things gone well - - I'd have only made $210k per year which is only 9% returns. ALOT of things would have to go right for that to happen and frankly, it's less than I used to make at my apex. One one hand it's not "worth it" to risk 2.3 mill, get back into a cut-throat business, and hope it goes well not to mention the 70 hour weeks are back which I'm used to, and would happily do because the people. that are ready to join - - are a pleasure. BUT, I knowingly put in an offer that was good - -but I sorta knew someone would beat me out by just a little....and sure enough it happened today.

BUT if things didn't work out in the new business - I think I'd lose a good $400k of my total investment - - I can't lose $400k with no hopes of recouping it.

Darnit, I'd love to show my kids my new place, even see them work in it to learn things.....but then I'm thinking, if I fail, how cute would it be if I had to tell kids that the whole college expense thing is not gonna happen right?

So here I am.

Bottom line, if over the long term, large-cap stocks can return me an *average* of 5.5%..... and if my real estate investments return 4.5% - - I can live a rather nice lifestyle, handle college costs, weddings, etc, and then probably have enough to live comfortably till we croak. Not the lofty way I had envisioned, but nevertheless....something to be thankful for and satisfied with.

I look at historical S@P500 returns and feel over the long term , my 5.5% is realistic.

My 4.5% would mean a long term investment in a property. leased to a TacoBell, 7-11, etc, OR rental homes....making a modest 3% net return on yearly rent, plus an average yearly appreciation of 2.5%. (Much of the appreciation is gone after real estate commissions when you sell the house hence I'm not counting the full 2.5 appreciation towards profits). Again - history shows about 3.5% average appreciation. And while there's ups and downs to come..... for the next 10-15 years, anywhere from Atlanta to Raleigh to Sarasota is gonna have more population growth and more housing demand so at very least I feel realistic in my expectations.

But darn. Part of me is relieved today.

But part of me is gut punched.

And the holy trinity of Dunkin double chocolate, McDonald's double cheeseburger value meal, and blasting music in the car (Peter Gabriel and REO).....hasn't cured me yet.

Comments, questions, insults, anything is appreciated.

 

[RetiredHappy]

Great post. I would say you were pretty gutsy to have made an offer on that piece of property.

I do miss working, alot. We ran a business and sold it after 8 years. I won't ever want to risk a dime of our retirement savings to start another business. If I want to get back to making money in a work place, I will go back to work for a company.

If you miss the adrenalin rush of working, making deals etc, and continue to make money, you can do something that costs next to nothing. No retail space, just online presence. Mergers & Acquisitions brokers, realtors etc.

 

[NW-Bound]

Anyone ever 'want more'?

More money, always. More work, no.

But then, I am 20 years older than the OP. I have worked enough. Time to rest.

 

[rk911]

Anyone ever 'want more'?

More money, always. More work, no.

But then, I am 20 years older than the OP. I have worked enough. Time to rest.

not really except in our accumulation phase. but once we reached "critical mass" we were more focused on retaining what we had and still growing a portion. we're now set to inherit a bunch...our NW is about to double. we're discussing the good we can do with that money while we're around to see it happen. lots of ideas. it's a great problem to have.

 

[RobbieB]

66, retired, plenty of dough, not looking to work, gonna buy a boat -

 

[Mr. Tightwad]

I quit working when I was 45. I found better things to do with my time.

None of us is promised tomorrow.

 

[Gumby]

I offer you this poem by the famous writer Kurt Vonnegut (first published in the New Yorker, May 2005):

Joe Heller

True story, Word of Honor:

Joseph Heller, an important and funny writer
now dead,
and I were at a party given by a billionaire
on Shelter Island.

I said, “Joe, how does it make you feel
to know that our host only yesterday
may have made more money
than your novel ‘Catch-22’
has earned in its entire history?”
And Joe said, “I’ve got something he can never have.”
And I said, “What on earth could that be, Joe?”
And Joe said, “The knowledge that I’ve got enough.”
Not bad! Rest in peace!

 

[Enuff2Eat]

46 is too young to retire and too old to risk losing your money to get 9% return plus 70 hours work week to make your loyal friends happy.

I do admire you for even tempting to put in a offer. Maybe you should find some other meaningful work, have fun, give back, mentor and teach your kids about business + life lesson.

Retaining your assets, get a moderate return on your already massive asset is the key. Just my opinion

good luck

Enuff

 

[Chuckanut]

Have you considered joining one of those organizations that match experienced successful business people such as yourself with young (or maybe not so young) people who are starting their own business for the first time? You mentor them and help them see traps and opportunities that an inexperienced person might miss. Of course, they are ultimately responsible for their success.

 

[NW-Bound]

not really except in our accumulation phase. but once we reached "critical mass" we were more focused on retaining what we had and still growing a portion. we're now set to inherit a bunch...our NW is about to double. we're discussing the good we can do with that money while we're around to see it happen. lots of ideas. it's a great problem to have.

I don't really need more money at this point, because I already underspend what I have and spending more does not necessarily bring me happiness.

But if I can get more money without doing a lot of work, then why not? I can give it away as I see fit later. And that's why I will not say no to money, unless it's illegal or unethical, or requires me to work hard.

 

[RobbieB]

I over spend what I have (according to the 4% thing) and I have more dough than ever.

Yeah, I want more! A boat and a slip -

 

[Ronstar]

OP made the right move IMO. Although young at 46, it could take a while to get a new venture rolling. Sure you want to do it now. But how will you feel about this 10 years from now? Will you still want to press on at 56?

One has to assess whether something like this has an adequate ROI. Not only return on $ invested. But also return on personal time spent. Since you are financially secure now, I don't see how spending 70 hours a week is worth it just to add more money to the pile.

 

[Nick12]

During the 2008 layoffs of the company I was at I wanted more work. I got it and survived the layoffs that year.

 

[FlaGator]

I'm almost 46. Wife, 2 young kids. I've never been to college even a day so no 'fallback' job as a doctor lawyer Indian Chief or plumber or dog catcher.

Anyhow, I had a mostly successful small business career....mostly set records, mostly did well - - until the very end where some things were my fault, and certainly a lot of it was bigger better competitors, and market forces that cut my run more prematurely than I'd have liked.

Basically, I have $3.4mm in liquid cash-stocks plus, own personal residence outright that easily is worth $1.0mm. I've been kicking back for 5 months now, plotting my overall strategy to stay retired ie asset allocation, possible real estate buys, etc.

Darnit, part of me wants my mini-empire back. I usually had a decent sized business - -a few acres and a building on a nice main road, staff of 40 full time people, lovely unique perks , choice seats at the hockey game, the whole nine yards. BUT - a big part of me is relieved. No more employee stuff. No more customer crap. No more sitting duck, waiting for the newest e-commerce fad to take a bite out of my bum bum.

But at times - I want it back. Many of my staff nucleus were with me 20+ years in what is a high turnover business. And a few of my best people - visit with me once a week, telling me that the minute I start a new business - - they'll take a huge pay-cut and join me in a heartbeat.

So the last month I was on a piece of property - - freaking choice location. BUT....would've taken some time vis a vis tearing down buildings, paving lots, getting permits, establishing lines of credit, hiring a few people (would've been just 8 of us, a tiny army all of us hands-on ), construction of a new facility....THEN, some decent losses while the business establishes and I learn the new market.

Total cash needed was $2.3 million.

I punted. I certainly made a good faith offer, but deep down I was scared of the risk. Had things gone well - - I'd have only made $210k per year which is only 9% returns. ALOT of things would have to go right for that to happen and frankly, it's less than I used to make at my apex. One one hand it's not "worth it" to risk 2.3 mill, get back into a cut-throat business, and hope it goes well not to mention the 70 hour weeks are back which I'm used to, and would happily do because the people. that are ready to join - - are a pleasure. BUT, I knowingly put in an offer that was good - -but I sorta knew someone would beat me out by just a little....and sure enough it happened today.

BUT if things didn't work out in the new business - I think I'd lose a good $400k of my total investment - - I can't lose $400k with no hopes of recouping it.

Darnit, I'd love to show my kids my new place, even see them work in it to learn things.....but then I'm thinking, if I fail, how cute would it be if I had to tell kids that the whole college expense thing is not gonna happen right?

So here I am.

Bottom line, if over the long term, large-cap stocks can return me an *average* of 5.5%..... and if my real estate investments return 4.5% - - I can live a rather nice lifestyle, handle college costs, weddings, etc, and then probably have enough to live comfortably till we croak. Not the lofty way I had envisioned, but nevertheless....something to be thankful for and satisfied with.

I look at historical S@P500 returns and feel over the long term , my 5.5% is realistic.

My 4.5% would mean a long term investment in a property. leased to a TacoBell, 7-11, etc, OR rental homes....making a modest 3% net return on yearly rent, plus an average yearly appreciation of 2.5%. (Much of the appreciation is gone after real estate commissions when you sell the house hence I'm not counting the full 2.5 appreciation towards profits). Again - history shows about 3.5% average appreciation. And while there's ups and downs to come..... for the next 10-15 years, anywhere from Atlanta to Raleigh to Sarasota is gonna have more population growth and more housing demand so at very least I feel realistic in my expectations.

But darn. Part of me is relieved today.

But part of me is gut punched.

And the holy trinity of Dunkin double chocolate, McDonald's double cheeseburger value meal, and blasting music in the car (Peter Gabriel and REO).....hasn't cured me yet.

Comments, questions, insults, anything is appreciated.

At least once a month, probably more often.

Had a great career-well paid, interesting, intellectually stimulating work. Family circumstances caused me to step back. Had "enough" to make everything work. 6+ years on, it has. But as the family circumstances changed, I began to realize what I had left behind.

It's not just "work", it is the interaction, the daily problem-solving challenge, the routine and knowing what tomorrow and next week will look like.

Those things may not be typical in this ER crowd, but maybe not uncommon.

I pulled the plug at 55. Kids are older and now more independent, and my days are no longer filled with keeping them moving, chauffeuring, etc. New wife has a full calendar every day, something I facilitated and fully support. At this point I'm trying to figure out what I do next.

I don't have an opinion about if you should jump into another venture. At 46, you have a long horizon. Your resources seem close to making it work if you never work again. OTOH, you have time to work through any failures.

My advice is to do your math on making it work financially, but don't ignore the psychological consequences walking away from "the game"

 

[gamboolman]

MichealKnight - Sounds to me like you still have a deep yearning to be in the game. The thrill of the hunt is still strong in you - just my opinion based on your Post.

Nothing wrong with that - embrace the fire and enjoy the challenges and going balls to the wall.

Your young yet - at your age I was Offshore Superintendent and hard charging and loved it.

At your age with 2 X youngins - I would be leary that you have enough piled up. Kids and College are expensive and you would be looking at ~50 year retirement window ish.....

You have expenses coming at you - that you cannot predict or even comprehend yet.... that is life....

I retired at at age 61 this year and after 43 years of pushing hard in the Oilfields - it was time to hang it up.

You will know when it's time to go to pasture.

All the best and please keep us posted on your path forward decision.

gamboolman.....

Lifes A Dance And You Learn As You Go

 

[MichealKnight]

Too many ppl to name but thank you all for the replies I've read multiple times.

The property was around $1mm. PLUS another $1mm of construction. PLUS losing about $275,000 worth of initial losses. THEN I'd have to do pretty darn well, hit all metrics on the "high side" of good performance, and hope for no major slowdowns for 5 years. Sort of daunting.

Whereas - ALL investments have risks but I'm thinking .... perhaps Blue Chips are a 'smarter' risk in that if they go down (and they will), historically they come back up. Not to mention....putting oodles of money in a "maybe successful business".....is risky. BUT..... putting money in the hands of Satya Nadella, Timmy Cook, Mary Barra, and then hoping that people will eat McDonalds, and drink Pepsis...... and then on the real estate side of the portfolio, just hope that enough people in growing metro areas will need to rent 3bed/2bath homes under $1900 per month. Sure there's risk....but it seems my risk is LESS there -- versus this business venture.

Now, does anybody wanna be a sweetheart?

Tell me that my 5.5% stock market long term annualized average returns are realistic

I"m 45 male , overweight and I'll wear a plunging neckline for anyone who can tell me that.

 

[NW-Bound]

Sure, 5.5% long-term annualized return is no problem. The late Bogle kept telling us that.

But, remember, inflation may eat 3% of that, leaving you with 2.5%.

You are welcome. But don't post any photo of yourself.

Please. Otherwise, I would have to ask a moderator to delete this post of mine.

 

[Telly]

So... who is raising those "2 young kids" with you working 70 hours a week?

Years from now, when it is far far too late, they may wish that you would have spent more of your time, and less of your money, on them. They only grow up once. Don't miss it. You can't get it back. Money, and power, although nice, are not end-alls of life.
Also sprach [-]Zarathustra[/-] Telly.

 

[MichealKnight]

Thanks NW

Sure, 5.5% long-term annualized return is no problem. The late Bogle kept telling us that.

But, remember, inflation may eat 3% of that, leaving you with 2.5%.

You are welcome. But don't post any photo of yourself.

Please. Otherwise, I would have to ask a moderator to delete this post of mine.

Hi NW - ok your reward for verifying my 5.5% fantasy is you get no picture of me being alluring.

Yes on inflation. My plan is hoping for 5.5% nominal, and I use a yearly inflation of 3.1% Hoping that will be the average.

(Also, if needed, 6% of my yearly spending can be cut and still have what many would consider a decent lifestyle)

 

[Sunset]

OP - Don't risk your money.

If you feel the need to solve/win/get rich, then do like my relative.

He is old, worked in oil most of his life.
He put his ear to the ground and heard of a group of fellows needing some help to find/collect land/drill for oil.
It spanned a few years of occasional work for him at zero pay.
He had negotiated a 1% ownership for zero dollars.
Recently he told me they finally drilled their first well, hit paydirt, will be drilling a bunch more.
His 1% is now worth $1M.

 

[MichealKnight]

True

So... who is raising those "2 young kids" with you working 70 hours a week?

Years from now, when it is far far too late, they may wish that you would have spent more of your time, and less of your money, on them. They only grow up once. Don't miss it. You can't get it back. Money, and power, although nice, are not end-alls of life.
Also sprach [-]Zarathustra[/-] Telly.

I heard once : "Money doesn't buy happiness, but it's a great downpayment".

I guess I kind of agree. Certainly - back in my 'hayday' making very good business profits, we'd be on vacations at 5 diamond resorts where the average room was easily $1500 per night. And honestly- while everyone looked pretty, so many seemed buried in their phones, and really just not happy.

Daily me and DW would walk the beach....and within 10 minutes would be hotels charging, say $500 per night and honestly -- the people staying there seemed honestly more happy.

I have, and am making some lifestyle adjustments, I think it's a great trade and I don't have to be on the freaking treadmill each day, trying to make sales and deal with all the crap. BUT certain things - I want to hold on to. And yeah, I've accepted (sadly) that I can't leave my kids with a nice security blanket. Cripes, my main mentor (he's 70), has succeeded in similar businesses -- but well beyond what I ever did. His 2 girls....will have a guaranteed $60,000 per year for their whole lives....and I sadly won't have that for my kids.

I have a son who is ADHD and yeah, I wanna keep eyes on him to catch any stench of hanging with the wrong crowd as he gets to teens. DD is a great student but I want to keep working on her grit, and street-smarts because in our upscale schools - it's filled with NorthFaceBarbies and BMWs and I'd *love* to have a family business for them to gain those skills.....I had that as a child. But yes, also advantages to no more 70 hours per week.

So my travels won't be as top shelf, but I still want travels - somewhat nice.

My kids won't have the fanciest of this or that, but I want them to have *some*

Maybe this describes it in a nutshell, lifestyle-wise in ALL categories:

*Came from a K-mart world. My parents were fresh immigrants, saved every dime to buy a business.

*My adult life was a Neiman Marcus life.

*Me and DW never made that our identity. Cripes, we still gobble down Olive Garden to the last crumb and love us a nice drive-thru meal

*So Neiman is gone. Ok, great. BUT - I don't want the Kmart life. I want to at least cling to a Macy's life, with niblets of Nordstroms tossed in now and then.

So yeah a pitiful 9% return, with 70 hours per week business would really be a nice top off to insure that. BUT - - the $400k loss I think id' incur if I fail....is a lump that would really just have me hoping to feed my wife, and hope that we croak earlier. Not a good way to live.

JHence, here I am. No 2nd hurrah on business - -- just hoping for sound stock and physical real estate investments, that earn me returns that are considerably *less* than historical averages.

 

[RobbieB]

I'mma kinda Target guy when it comes to clothes. Wife has to drag me kicking and screaming to Nordstrom. Biggest hotel room was the Cyrill Magnin suite at the Mark Hopkins when we got married. Only $800/day.

And I only started spending that kind of dough after I retired. Yes, my spending increased after I quit working.

 

[big-papa]

It was probably only a few years into my post-college working life when it hit me that I wanted work to only be a means to an end, not the end itself. Yeah, I have to be interested in what I do, otherwise it's just a slog to the finish line. And some days work has been quite the adrenalin rush when things go well. Other days, not so much.

I'm sitting less than a year from retirement (maybe even closer depending on a lot of things) and I can say that when I pull the ripcord I'm done, at least in the industry I've been in for 37+ years. After that, I suppose anything is possible, but a 40 hour grind is highly unlikely.

Cheers.

 

[DawgMan]

Others have touched on it... 1) the cost of kids (planned and unplanned) may surprise you through and beyond the college years. I have 4 grown self-sufficient kids at this point (24 - 31), but they are not always fully "off the books" and there have been plenty of unplanned financial obstacles along the way. As an example, I grew up very middle class and when my kids were young, made certain assumptions for "raising kid costs" and one thing I promised myself/wife "we will NEVER have 6 cars in our driveway"... well guess what, I had 6 cars in my driveway. One example of many other unplanned expenses which followed. Talk to as many people as you can who have raised their kids to get the war stories on their kid expenses and plan according.

2) At 46, it sounds like you have some gas in the tank and have at least experienced some of the finer things in life... nothing wrong with that. I would suggest by your posts that you are not quite ready to punt at 47 and truly settle on Macys vs Nordstrom's? I moved the goal posts many times as my DW and I tried to find our sweet spot as it relates to our desired retirement spend (FatFire). My plan was to retire at 55 when the last kid was out on her own and all systems were a go. BUT, I chickened out, not having something on the other side to sink my A personality teeth into. My solution... slowly unwind my business, which i expect to be completed at the end of this year (57). This slow unwind has really helped me take baby steps and unwind some of my natural "warrior" mentality. Maybe explore a roll that does not require capital (i.e. 1099 sales guy?) that helps you fulfill your drive?

Personally, I think it's harder for people who are more driven, accustomed to higher lifestyles, have had success in accumulating a high level of assets, to retire super early (before say 55). Unless your health or work experience has you so beaten down, settling in on your sweet spot of desired spend/lifestyle can take a min, and prematurely shutting down the financial engine without a good plan that can truly sustain many years of this lifestyle, can perhaps create some remorse if it doesn't work out. I found that once my heavy lifting with the kids was (mostly) done, the picture was MUCH clearer and both DW and I are in a good place as it relates how we are going to spend our 2nd half playing/living and funding it.

Good luck!

 

[Koolau]

I'm almost 46. Wife, 2 young kids. I've never been to college even a day so no 'fallback' job as a doctor lawyer Indian Chief or plumber or dog catcher.

Anyhow, I had a mostly successful small business career....mostly set records, mostly did well - - until the very end where some things were my fault, and certainly a lot of it was bigger better competitors, and market forces that cut my run more prematurely than I'd have liked.

Basically, I have $3.4mm in liquid cash-stocks plus, own personal residence outright that easily is worth $1.0mm. I've been kicking back for 5 months now, plotting my overall strategy to stay retired ie asset allocation, possible real estate buys, etc.

<SNIP>

Had the above been the extent of your post, I think I would have suggested the following:

Invest your 3.4mm in something like 40/60 bond/stock to 60/40 bond stock in Vanguard or Fidelity index mutual funds with very low investment costs. You can get them "off the shelf" with little hassle.

Run FIRECalc on your situation and determine if your current spend rate is sustainable. I don't know how FIRECalc will come out for you, but let's just use the so-called "4% rule" and say 4% of 3.4mm = $136K per year. Could you live on that (upping for inflation as needed)?

If not, would you consider downsizing the house or even moving to a lower cost of living area? Honestly, with your assets, most folks could live "comfortably" on roughly 4%.

I left out the remainder of your post because I simply have no feel for it. I grew up with parents who depended on a small business and I had no interest in it (Ironically, DW ended up running the "family" business as the "kids" inherited it from my parents.) It all went quite well but DW was very glad to sell the business (at a deep discount) to the third generation who are making a "go" of it.

I personally never "missed" the thrill of the business - nor the thrill of w*rking for Megacorp (as it turned out for me.) When DW and I each ended up no longer enjoying what we were doing, we retired and never looked back.

SO... Only you can decide (hopefully with input from your DW) whether taking the chance to get back into the "game" is worth the risk. Honestly, if it were me with your assets, I'd say "game over" and enjoy the time God grants you to raise your family and enjoy the fruits of your labor.

As always, YMMV so good luck in your decisions. Keep us posted.