Hi, I am ESRBob


Thinks s/he gets paid by the post
Mar 11, 2004
New to Board, (Thank you WSJ), 45 years old and am now in 4th year of ER. Well actually, I call it ESR (for Early Semi-Retirement) because after the first year or so i realized that my calculations were off and 5% withdrawals were going to make me toast (I have long genes in my family and base my planning on living to 120 just to be safe). SO cranking that back to 3.75% means I am still doing some part-time consulting work which is actually great and not stressful or too time-consuming.

Starting 10 or 15 years ago, I, too, got great inspiration from Joe Dominguez (though I and certainly my wife and kids would never consent to live like that) and more importantly Paul Terhorst (does anyone know where he is these days? I want to thank him!-- although I'd love to hear how he is finding 8% T-Bond investments today, and his calculations seem a bit off for life with kids in suburbia). More recently, I have become a fan of William Bernstein and have totally bought the concept, found a guy who can get me into DFA funds to fill out the holes in Vanguard, and am very happy with the yield/volatility tradeoffs.

For me, this has become a Men's Mental/Health issue -- ER or ESR is about freeing men from living like slaves, unhealthy, unhappy, economic machines with no "Off" switch. Getting balance in my life, getting fit (yoga) and volunteering a lot in my community have been the big dividends.

I also have a sailboat, which in itself practically requires you to retire just to take care of it! We live on the Long Island Sound and have taken it to Chesapeake and Maine in recent years.

My biggest worry is rising property taxes for a house we love in a community we are totally committed to. They are out-of-sight (doubling over 5 years) and have caused me a lot of anguish in recent years. I get involved at the local level to protest and organize and push for restraint but I sense the tide is against me...

Looking forward to sharing the journey with you all... Bob

I think you are the first person to join after the WSJ and Newsweek articles forced us to make an emergency server switch around lunchtime today -- we were getting so much traffic that all the other sites using that server were complaining about us.

For being first, you are awarded an honorary dryer sheet. (You'll have to read a lot of posts here to figure out what that means!)

Thanks, Jay;
Just sent them a note. Been meaning to do that for about 5 years... They really blazed the trail for me, and I think for a lot of us.
I sent them an email last year and Vicki sent back a very nice reply. They seem to be genuinely good people.

I have never written the Terhorsts without receiving a
prompt and courteous reply. Interesting as they must
receive a lot of correspondence.

John Galt
I have never written the Terhorst's, but I have to pipe up and agree that they have probably paved the way for a lot of us. I had the thought and a rough plan about ER, but until I read "Cashing In..." the plan wasn't clear. I have to admit though, I found the retireearlyhomepage.com first, and that's what pointed me to the Terhorst's. Amazing the things you find on the web when you are sick of work and trying to find a way to NOT work !


Just curious about your property tax.

In 1979 the taxes in Calif. were so punitive, that many retired folks were forced to sell home because of their increase in property value.
Prop 13 was passed, and taxes can only increase 1 and half percent per year regardless of increase in value. When a home is purchased in Calif. your property tax is 1% of amount paid for home . (If you pay $200,000, your first years tax bill is $2,000.) I used that example because that was what I paid 15 years ago for my home. It would now sell for about $650,000.00 and my last tax bill was for $2800.00. When I sell, the new owners tax bill would be about $6500.00
None of my business, just curious, what is your property worth, and how much is your current tax bill?
Property taxes in california look like a huge bargain for retirees of any stripe, though the state's fiscal crisis may somehow be related to that! ;-)

New York has no such Prop 13 equivalent, so local governments are free to raise taxes each year by whatever their city councils approve, and schools are free to raise taxes by whatever voters approve (or a few percent less, by state fiat, if the voters reject the budget).

So we end up supporting a gold-plated municipal class here -- the real secret to early retirement is probably to get a municipal job early in your career and retire with full pension and health benefits from an employer that can pass laws and raise taxes to pay the bills decades from now! GM doesn't hold a candle to our little town in terms of security of paying health benefits to retirees...

but to let you wince: my property taxes are about 1.5% of the market value of the house, every year, and about 3% of the price I paid for the house. They have doubled in the last 5 years and they are scheduled to keep rising at about 15% per year in the years ahead.

Homes have appreciated, but unless I sell (and I never wanted to sell), that doesn't help me. In our town, the average home last year sold for a million dollars (well, 950k) and it would be a very ordinary home indeed: 1/4 acre lot, thrown up in the post-war building boom, small bathrooms, maybe a remodelled kitchen, one-car garage. And that home would pay 15k of annual property taxes. A 'nice' home by any prosperous american's standards would cost you 2.5 million plus, and its taxes wold be brushing up against the 40k per year range, especially if it were on the water. (my taxes are even higher) The schools are good, however, and we all justify this mess by comparing our taxes to private schoold tuitions and feeling like we're getting a bargain... sick, isn't it!

So the only question is, how do you turn back the clock and buy 1979 california real estate? :D

Btw, I have pasted in the reply message I got back from Vicki Terhorst -- they are leaving Buenos Aires around now and heading to Paris, then on to Thailand. She and Paul are the trailblazers! Wonder if she knows about this forum -- i'll be sure to tell her about her fan club over here...

Hi Bob,

What a delight to read your email....thanks so much for writing.

Over the years we've heard from 100s of readers and as it turns out, no
follows 'every' line. On hindsight, what our book did for readers was
them to think out-of-the-box and make a paradigm shift rather then
deliver a
gameplan. There are as many ways to retire early as there are early

> Interesting to hear you got into commodities investments: I have,
though not to the 40% level...

It sort of sneaked up in value because the broker who takes care of us,
good friend and brilliant investor, has made so much money for us over
years. Thanks for the DFA tip.

> My early retirement days are ...

Sounds terrific. Congratulations. Your joy and enthusiasm for your
weaves through your email.
> If you ever find yourselves in NY, please give a call. Would love to
hi and hear about your travels!

Thanks for the invitation and you never know...we've even been to
the 70s - practically another lifetime ago!
> With my deepest thanks to you, again, for blazing the trail!

You are very welcome.

We have very much enjoyed our 6 month stay in Buenos Aires. We lived
for many years so we have had a full social life plus the cultural life
is very rich. And after living in Paris it has been a relief that the
of living is reasonable right now. Still, on March 31st we head to
for a couple of months and after that Thailand.

warm regards, Vicki
You can sorta get 1979 prices or a move in deal by picking an area that hasnt had the price appreciation run up of LA, SF or more recently Arnoldland...errrr...Sacramento.

I moved to the Sacramento area about 8 years ago and had my 312k house run up to a half mil, but was still paying prop taxes on the 312k.

I sold that and moved about 45 minutes north where the property values have popped a little, and lots of people are migrating to from the SF and Sac areas for cheaper homes. Hundreds of thousands of homes and supporting retail are planned within a 10-12 mile radius.

I'm guessing my prop values will hit 350-400k (from 250) within 5 years. I'll still be paying for 250. Then I'll probably shuffle off another 40-60 minutes north, east or west to the edge of the new sprawl. Maybe move to an area thats pretty but has weak employment prospects and hence lower property values.

Yep, california is good at spending more than they have, then declaring that higher taxes are the only option. Gosh, for most of my life if I spent more than I made I had to pay it back with interest...so I spent less than what I had. Seeing that they just bought a new jet boat for the cops to patrol the river (my neighbors can only afford used boats with a *little* less horsepower) and brand new top of the line harleys for the CHP (while my neighbor would have liked one of those, he had to live with a cheaper kawasaki), I think I see the root of the problem...
Damn, TH, if you are so smart howcum you've spent
so much time behind bars?? It's a rhetorical question

John Galt
Hey, never more than 8 hours...

Actually I think its because when I have a conversation with the cops, my tongue gets in the way of my eye teeth and I cant see what it is that I'm saying.

Prop 13 wasn't enough to keep me in California. I'd lived in the SF bay area all my like but finally said enough in 2001. Sold the house for .5 mil and moved to the Reno area. The home I purchased is newer, half again as big, on 11 acres, with 2/3 the property tax I was paying and I still put 150k in my pocket. Add to that ZERO state income tax and that makes it as near a no brainer as I could ever ask for.

I'm not alone either. This area is jumping with new home construction and it seems most of the people I meet are, like me, refuges from California.
Same with the people in Sacramento and up here a bit further north - - extensive bay area refugees.

A lot of people "house retired" from there when the house they bought for 50 or 70k twenty years ago appraised for 750k or more.

I thought about moving out of state, but I didnt want to go far, I like the weather, Arizona and most of Nevada are too damn hot, and I wasnt excited about taking another driving test in yet another state ;)

And to think that in 1997 I almost bought a 2200 sq foot house on 1/3 of an acre in Saratoga for $425. It'd easily be worth 750-850k right now. (Saratoga is one of the more expensive towns in the SF south bay area for out of towners)

You mentioned that the area you live in is about 45 minutes from Sacramento. (North). Must be around Yuba City, Marysville.
I currently live in San Diego, and as everyone is probably aware, the weather is great. But because of the crowds, congestion, etc. it is not worth the price of admission any longer. (In my opinion).
About two weeks ago, we took a trip up north to the city of Chico. A friend of mine lives there (for past 20 years), and really loves it. (Also a transplant from So. Calif). He showed my a copy of Kiplinger that was dated about 2 years ago, and Chico was on the cover, and was rated the best mediam size city, (50,000 to 100,000) for quality of life in the country.
It certainly has a lot to offer (the largest municipal park in the country), easy access to all kinds of outdoor activities, etc.
However, we were shocked at the price of real estate in Chico. We stopped a couple of days in the Sacramento area, and looked around at Real Estate. Too big for us, but interestingly, Chico is just as expensive.
Apparantly, the cost of quality of life has gone up. We are still planning on moving there, as I could hardly stand going back to fight the traffic, and etc. in the San Diego area.
I have lived all over Calif. and we think the north state is the best that you can do.
I like San Diego. Would never live there though.
Consider this. I live in a nice house on a large river in
Illinois. Great fishing - great scenery - little traffic.
100 feet of
water frontage; 1000 square foot house. You could buy this place for about 95K. The only drawback is the winters IMHO.

John Galt
gRe: Hi, I am ESRBob

John Galt:

I doubt if there is a building lot in Calif. for $95,000.00

I don't envy the winters in the midwest, but there should b e a lot of places where you could spend 3 or 4
months during the freeze.
Years ago, I spent about two years in the Elkheart Indiana area. There isn't enough money in the world, at this stage to get me to spend another winter back there.
The solution for me would be to get the hell out of dodge for the winter. (Sounds like you have most of the good months covered, by your apparantly stress free location.
Haven't figured out how to do the little box with previous quote but TH wrote:

"I thought about moving out of state, but I didnt want to go far, I like the weather, Arizona and most of Nevada are too damn hot, and I wasnt excited about taking another driving test in yet another state."

I had many of the same concerns. I found out though that Reno weather rarely gets into the 100s or below the 20s and the hot days aren't so bad since the humidity is much lower than you valley people experience. Also, Nevada didn't require me to take a driving test. Since I'm still working (not for much longer I hope) it's also nice that I can get to my office in Roseville in a coupe hours every 6 months or so.
Mr. Guest. Yep, you're in the right place. Chico is expensive because its a "nicer town" in the area, and home to several universities. If you hunt around the area, the prices are more reasonable. They are up a bit though.

You can score a 1500 sq foot 1950's home on a .3-.5 acre lot in marysville in the 120-140 range. They were just about 80-90 two years ago though. Lots of newer homes in very nice middle class neighborhoods in Yuba City. $200k gets you a 10 year old 1500 sq footer on a .15-.2 lot, $250 gets you a nearly new 1800-2000 sq ft on .25 lot. Not too bad considering its close to town, all the amenities, and a short drive to a lot of interesting places.

If you go a little more north and east, towards the base of the sierras, about another 30 minutes or so...places like Brownsville, Oroville and whatnot, the prices are a lot lower, good hunting and fishing, but not as much "city" stuff.

I spent a long summer in La Jolla ohhh...about 25 years ago. Loved it. But it was expensive even then and jobs were tough to find unless you wanted to be in the military or work with them. I hired a whole passel of kids out of colleges from down there though...they all worked out well.
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