Hi All, how much longer should I wait...

[impulse]

Hi All,

I'm keen to call it a day and walk away, but know that it aint the most sensible of options. Mentally, I'm there; financially, I think I have some way to go....

I have a part share in a business, that although I'm sure could and would continue happily without me, my partners (and staff) see a need for me to continue to hang around. I've been introducing myself to the idea of ER by taking longer and more frequent vacations, and I can picture my life without ever having to come in to the office again. Plan to be away for the whole of the summer, which will be the longest stint so far, but I'm getting off the point.

Selling the business in the current economic environment would be unwise, and like most small business owners, the majority of my wealth is tied into the business. However, based on history, at some point in the next few years someone will make an offer for the business. In the past we have had many unsolicitated offer and I'm assuming this will happen again in the future.

I have about $1.5m in cash (yes cash, not invested at present), no pension provision and we have three houses that are all paid for, our main house, vacation house and one that an elderly relative is living in. So if needed could sell either of the first two and live in the other, but the third one is tied up.

So (eventually) the question is, do I:

(1) Call it a day and walk away;
(2) Continue to increase vacation until I can slide away unnoticed;
(3) Just keep working till the business is sold; or
(4) Any other suggestions.

I'm 38, married, have two kids under 5.

All suggestions welcome.

 

[REWahoo]

Not enough financial information to provide a response to any of your four options. At a minimum, these three key questions need answered before anyone can give you even an educated guess:

1. What will your living expenses be once you walk away?
2. What income do you realistically expect you can generate from your savings, the sale of your portion of the business and your real estate?
3. How will you provide health coverage for you and your family?

 

[impulse]

Not enough financial information to provide a response to any of your four options. At a minimum, these three key questions need answered know before anyone can give you even an educated guess:

1. What will your living expenses be once you walk away?
2. What income do you realistically expect you can generate from your savings, the sale of your portion of the business and your real estate?
3. How will you provide health coverage for you and your family?

1. Expenses really depend on what option i take. At the moment annual expenses are around $90k. If continue with all properties, then they would be the same.
2. (a) Income from investments: Realistically, I'm conservative, so wouldn't expect any more than 3% so would cover about half of my current expenses.
(b) Income from business: Regardless of staying, walking away, half and half, I would be drawing at least $200k from the business annually from profits.
(c) Sale of house: could in a fire sale realise $500k on either main or vacation home.
(d) Sale of business: Who knows. Last offer my share was $7.5m. This was pre-crash, so being realistic a sale today could be as low as $2m.
3. Health Coverage: will always be covered by the company until any sale.

Thanks in advance

 

[REWahoo]

Impulse, I suggest you now plug the numbers from the information you posted into FIRECalc to see what it says about your chances of running out of money before you run out of time. Take some time to understand how the calculator works by reviewing both the intro page and by clicking on the "How It Works" link also on that page.

 

[REWahoo]

(b) Income from business: Regardless of staying, walking away, half and half, I would be drawing at least $200k from the business annually from profits.

One more thought - at age 38 you can reasonably expect to live an additional 50 years or more. Is it realistic to expect your annual income from the business to continue for that long?

 

[jdw_fire]

based on

(b) Income from business: Regardless of staying, walking away, half and half, I would be drawing at least $200k from the business annually from profits.

given that

At the moment annual expenses are around $90k. If continue with all properties, then they would be the same.
...
3. Health Coverage: will always be covered by the company until any sale.

you will have enough income to hold out for a sale

(d) Sale of business: Who knows. Last offer my share was $7.5m. This was pre-crash, so being realistic a sale today could be as low as $2m.

and the $7.5m would be enough to easily provide the replacement income ($225k annually at a 3% WR) without even touching

2. (a) Income from investments: Realistically, I'm conservative, so wouldn't expect any more than 3% so would cover about half of my current expenses.
...
(c) Sale of house: could in a fire sale realise $500k on either main or vacation home.

which would be a total of $2m in potential income producing assets over and above what you get from the sale of your business, making a nice cushion


sounds like the real problem is how you make the move to retirement and that is something that can be answered by someone who knows all the principles and how they would react to your leaving

 

[73ss454]

Sounds to me that you can put together about 10M. I don't know, it might be a little tight, I'd keep working. (heh)