How confident were you when you left your job?

[Senator]

How confident were you when you left your job?


There comes a time when you have to either jump out of the plane, or not. The parachute you assembled is projected to open, and generally does. You can look at the financials until you see cross eyed. You can get all the financial planners to give you 100% chance of succeeding. You can run the plans 1000x a day, but sooner or later you need to jump out of the perfectly good flying airplane, or take another lap around.

Some people do not have a choice, they got laid off, or medical reasons forced them out of work. When you do not have a choice, it may be easier. Others could stay on forever.

For me, I think my finances are pretty good. I also think I can adapt, by spending less or creating an entrepreneurial opportunity that will bring in a few dollars, more than if I was working for someone. I can keep busy, without any problem. I do find it is certainly more of a mental challenge to FIRE, than a financial one. I am leaving on or before July 5th, 1000% sure. I am 100% confident I can survive, but less confident that I will be able to live the lifestyle I have envisioned, even though the finances say I can.

How confident were you, when you left your full time job? What made you the most confident (or hesitant), the financial situation you had, or the ability to jump back in? Or maybe it was the mental confidence that you could “make it work” no matter what situation was thrown your way. Or maybe it was because your SO was still working? Or maybe it was something else?

 

[W2R]

I was financially confident, absolutely.

My SO and I do not live together, mix our money, or depend on one another financially, and high paying jobs in my occupation rarely open up, so I had to be sure. I knew that nobody was going to do this calculation for me, so I could not make a mistake. I beat my calculations to death and then set a retirement date. It helped to know that I can LBYM and could cut back my expenses a lot if necessary.

Then I DID IT, and wow, what an exhilarating feeling.

How exciting that you are going to retire by July 5th! Independence Day will be especially sweet for you.

 

[euro]

I only have 6 weeks of experience since FIRE (at 56), so not much history to judge how it is going (subjectively, it's going GREAT though! ). Like W2R, I walked away from a very unique job opportunity, so there is no option to reconsider, although I'm fairly confident that I could generate SOME supplementary income, if I absolutely had to.
I crunched a lot of numbers and got an independent opinion from a financial advisor ( mostly to calm my DW's nerves...), gave 3 months notice at work, and I haven't looked back since.

 

[bingybear]

Senator, with the numbers you have shown over and over, I would not be concerned. You have shown spending numbers the are way under you rental income generation. Now if those spending numbers don't reflect your "envisioned lifestyle", then you might want to re-evaluate.
For me, I think I could get back into a job in my field. I'm coming to the conclusion that I probably was under paid for my capabilities and contributions. I am still getting offers to contract, come back full time, consult, etc. However, I have not bit yet. I'm doing to engineering as a hobby to keep my mind active and for the sense of accomplishment. But I have many interests outside of engineering too.
Our planned spending on the tight side was 1.5% WR, but we thought we'd try to spend more as 1.5% just leaves lots on the table. With the flaky market, DW has put the frugal on and and dropped spending. This is not a conscious thing, she just does it naturally. And you know... life is great. We don't feel like we a missing out. Not everyone could do this without feeling strapped... deprived.
The one thing I would suggest is looking at how much self worth you derive from you job and how broad your social life is beyond work. This is a huge for many people as you can read on this forum... those who get bored or have trouble finding things to do. Look critically at where you derive enjoyment and how you define yourself worth... from an internal sense or from others.

Good luck with your chilly feet. Look for a high, medium and low spending plan if you are jittery about the numbers. But be honest with yourself on what you need and what you'd like to live on. Some do a really tight budget so the numbers work, but never expect to live to that plan in reality.

Good luck convincing yourself.

 

[Another Reader]

With the real estate, it's going to be a question of how much is "enough." You are very astute at finding deals, doing rehabs, and managing your rentals. With no job to occupy your mind and time, you may find yourself doing more of that. You may end up duplicating your W-2 income with your new business income in a couple of years if you aren't careful.

The one thing I would do in your shoes is to do everything I could to protect myself from being sued and the consequences of losing a lawsuit. Umbrella insurance, maintenance at a higher level than you would do for your own house, and your continued good landlord policies will help. You will eventually be a target if you grow large enough, so just assume that it's going to happen.

In your case, it's not about the numbers, it's about the risk.

In my case, I had enough, but I was still trying to build the portfolio. When I inherited a sizable estate, and the decedent's estate proved to be complicated and time consuming, I bailed. I neither liked nor respected the people I worked for and I was very happy to say goodbye.

 

[bclover]

I'm not a stable mabel on a good day.

LOL, google my name Senator underneath it you'll see a the clinical definition of anxiety.

I was a hot mess (many ways still stressing)! lol, financially I'm alright ran every scenario on all kinds of simulators and came up good, my biggest concern was medical. Now in the interest of full disclosure I'm a natural Nervous nellly and change is really hard for me.

I'm two months in and still worry some days that I'm spending too much money even though I've stuck pretty close to my budget so I definitely think I'll find me "sea legs" so to speak.
I do love the "opportunity" it's open up. I'm taking a 10 week course on entrepreneurship given by the small business administration. I'm also taking a real estate investment class given by Univ of Penn wharton school of business. both things I've always wanted to do but I never seemed to find the time for while working.

like others I left mega corp when my job started to give me ulcers from the stress. I hated my job.

 

[Senator]

Senator, with the numbers you have shown over and over, I would not be concerned. You have shown spending numbers the are way under your rental income generation. Now if those spending numbers don't reflect your "envisioned lifestyle", then you might want to re-evaluate.

I want to have a few US vacations every year, maybe 12 weeks over 4-6 trips. Some drive, some fly. If I budget ~$24K a year, that should be enough. I also want to save ~$5K a month, until I am 62. Buy a new truck and used 5th wheel (~$85K total). Then, start switching rentals to bonds income or some other way to manage them. If I have to, I can cutback a bit. Rents are up over $450 a month just in 2016 alone. Add in my new rental purchase, and it's a bit more. But easy come, easy go. the people you meet on the way up, are the same ones you meet on the way down. So I like double redundancy, like traveling in a spaceship.

I think if I watch what I am spending, and take my time on purchases, I will be OK. I am definitely not a spendthrift.

With the real estate, it's going to be a question of how much is "enough." You are very astute at finding deals, doing rehabs, and managing your rentals. With no job to occupy your mind and time, you may find yourself doing more of that. You may end up duplicating your W-2 income with your new business income in a couple of years if you aren't careful.

The one thing I would do in your shoes is to do everything I could to protect myself from being sued and the consequences of losing a lawsuit. Umbrella insurance, maintenance at a higher level than you would do for your own house, and your continued good landlord policies will help. You will eventually be a target if you grow large enough, so just assume that it's going to happen.

I am looking forward to it 100%.

I have a business liability policy, a business umbrella, a personal umbrella, Workers Comp insurance, in case I hire a laborer/contractor that gets hurt and claims they are an employee.

The rentals are maintanined much better than my own home...lol. My DGF's leg fell through a rotten board on the deck at my house a couple of years ago. So that is one of my projects this year (or next). I did screw a board over the hole.

I have thought about a flip (or two), after I get my own projects done. I think I would rather visit all 58 national parks instead. Time will tell.

 

[MichaelB]

How confident were you, when you left your full time job? What made you the most confident (or hesitant), the financial situation you had, or the ability to jump back in? Or maybe it was the mental confidence that you could “make it work” no matter what situation was thrown your way. Or maybe it was because your SO was still working? Or maybe it was something else?

When I quit my job I wasn't thinking ER, just "I need a break". If I had been aware of the tools such as FIRECalc I would probably have stayed on the job at least one more year. Perish the thought. A couple of years later I finally got the courage to formally retire, and it wasn't because of the money, it was because retirement was so sweet I had the confidence to make it work.

The tools and calculators only show you the math and point to a range of scenarios. What matters now is your flexibility and resiliency, and how you react to the challenges and opportunities from here on. The same aptitudes that bring us to this point don't suddenly leave, they're still here to help us navigate retirement.

 

[euro]

I think I would rather visit all 58 national parks instead. Time will tell.

I'm with you there - I'd love to travel most/all National Parks. It's high up on the bucket list

 

[athena53]

I'd planned on working till age 65 but ended up walking away from toxic politics at age 61. Under some pretty reasonable assumptions I would have had another $1 million in the pot at age 65. We were saving a huge % of what I made and had enough saved already that investment income in an average year was a significant addition.


Interestingly, shortly before I quit, my employer offered one-on-one consultations with the provider of our 401(k). They offered brownie points in the Wellness program if you did. I laid out all the numbers- not just the 401(k), since I'd been there less than 2 years, but our other accounts, too. She ran it through the models and pretty much said I could retire any time I wanted. I had my own spreadsheets, of course, so it was no surprise.


I never looked back. When I think about it, I'd been starting to get twinges of jealousy when slightly older actuaries I knew were retiring. That was probably a sign that I was mentally on my way out. I loved the work I did and the people I worked with (most of the time)- but 38 years was enough. Twelve months after retirement, our net worth had gone up by $100K. The 12 months after that were tougher; we downsized but spent more than anticipated fixing up the previous house and improving the new one, and the market has not been kind. I'll always worry about money- that's how I'm wired- but now we're settled, the house has a new heating AND A/C system and a 50-year roof (fortunately that was there when we bought it) and monthly expenses are now significantly below what they were in the old place.


So yes, I was ready, mentally and financially, even though it wasn't timed as expected.

 

[RE2Boys]

The financial part was borderline-ish at the time I retired in 2000 at age 50, not all things were fully covered, but the opportunity to be virtually a full-time Dad with a one and three year old boys out-weighted.
Always have been LBYM and when I had the opportunity to take an early retirement with COLA'D pension, it turned out that the pension equalled what my take home pay was, after retirement plan contributions, taxes, and "pay yourself first" savings of $1K per pay period or $26K per year out of gross salary of $86K. So the pension would support our daily lifestyle.

When DW and I got married, we decided to set our lifestyle based on only one income, the other went straight into savings, When when the first boy was born, my wife stopped working, we custom built a home, and the saved salary was used to pay cash for the home. So no mortgage.
In addition to the pension, had about $800K in tax and tax deferred investments so at 4%, could supplement pension by about $30K a year if needed to cover travel, unexpected expenses, car replacement, possibly college for the boys.

Often stated that I was pretty sure we could maintain our lifestyle but could do little to increase our standard of living.

Sixteen years later, we have maintained our lifefstyle, still wired for LBYM, never have paid over $20K for an auto or bought new. Have worked each tax season for last 15 years. Will be faced with college expenses this Fall and the younger boy is visiting schools, and FAFSA say my expected family contribution is just at six figures.

Life's been good.

In hindsight, I wished we had done more family trips and could have lived a bit larger, even though we have traveled to Maine, Florida, Wyoming and points in between with our pop-up camper. And we had a blast floating down the Grand Canyon two years ago. But the boys got involved in Boy Scouts and travel soccer such that many summers in the last 6 years had little room for much "family" travel. It's a minor regret as I'm so much the proud Dad in enjoying their regular activities and accomplishments. Both are Eagle Scouts, have regular summer jobs, take all Honors courses in school, play on varsity soccer team (the older one played virtually every minute of every game for three years despite being the smallest kid on the field==as a defender). His younger brother is an A student looking at actuarial programs.

 

[Fedup]

After having an accident that nearly killed both of my husband and I in 2011. I had been plotting and planning to retire in 2015. I went into cash the last 2 years just to see if purchasing on credit card actually make me spend more.
On the income front, unexpected bonus since planning is 25% rise in rental income. My husband's extra work month in Jan 2016, we planned to retire in 2015 together, but I ended up retired first and then husband followed one month later. He also has consulting work that could earn some money in 2016 and 2017. This money will be added to Solo 401k. So nest egg goes up.
On the expense side, insurance cost went down, travel cost down slightly due to award points.
We have not LBYM yet. We spend what we want to spend but we don't waste.
It's been good so far but I think 6 months of retirement is too early to tell.

 

[Danmar]

I was very confident. Retired in 2006. As if turned out that confidence was a little misplaced during the 2008-2009 crises period. Everything worked out pretty well in the end though. Income in retirement and net earning assets ended up being a little lower than I expected but pretty close. Personal use real estate ended up being a lot more.

 

[scrabbler1]

I was confident everything would turn out okay when I left my job. But I was a little nervous for a few days after I left but before all the money from my 401k and cash-out of the company stock arrived. The cash arrived electronically in a few days and the 401k rollover check took about a week. In those days, the account on line showed a zero balance. The following week, I went to my local Fidelity office, deposited both items, and my ER was up and running. I had also received my last paycheck from work and deposited that, too.

 

[Scubamax]

My master plan was to retire at 55 by or $ X.X MM, whichever came first. I was fed up with the job the last 18 months and was going to leave but megacorp beat me to the punch a few months early and made my position redundant. Worked out fairly well all things considered. I was 50 at that time.

My master plan had a huge amount of redundancy to account for things like a spike in the inflation rate (growing up in the 1970's leaves that imprint on you), and to a lesser degree market variations and deep economic downturns.

I decided that I was comfortable with a bit less redundancy and have shunned full-time employment since early 2014, but have done some consulting and am still engaged in a business pursuit which keeps me with my feet in the water and mentally engaged but also does not have any current economic benefit, but if successful will be worth something in a few years time.

So in essence I got comfortable with less redundancy, but still am at 100% on all of the various planners with fairly reasonable (mainstream) assumptions. I have seen persons who are in their 70's forced out of retirement and having to go back to work and I don't ever want to be in that position. I also don't want to alter my lifestyle in response to market volatility.

So yes, I took the plunge but have not cut all of the strings, but certainly am fine to do so financially...it would make no difference in my ability to be comfortable.

All of this reminds me of the Apollo missions to the moon in the 1960's. Wernher von Braun who was one of the "fathers" of modern U. S. space engineering was always concerned with having redundancy on the rockets for the mission that he would always be adding more and delaying the timeline. Finally he was convinced, reluctantly that the additional redundancies were providing only marginal benefit and the program went forward and was a success.

 

[eytonxav]

When I retired back in 2003, I was financially confident, and was further buoyed by what was the first very attractive voluntary retirement offer to come out from mega-corp in many years. While I basically enjoyed work, the environment created by a so-called merger of equals a few years prior was horrendous, and I was sick and tired of letting perfectly good people go as the new corp right-sized. So I left. What I wasn't prepared for was that I really missed working, so went back to work until finally retiring 3 years ago.

 

[Options]

I was totally confident at the time (a year ago). Immediately thereafter, an unnconscious "what have I done?" feeling overtook me that I only recently realized had been preventing me from totally decompressing after retirement. That feeling is totally irrational, however, as my retirement is very much over funded (probability is high I'm going to leave some pretty happy heirs given my PF and spending habits).

Based on personal experience, I strongly recommend not overthinking the whole thing (as much as possible).

What you'll find is: a) retirement will work out because you'll make it work out, just as you made pre-retirement work out; b) what you thought post-retirement would look like and the reality of it won't match, despite all efforts to plan every last detail (it's indescribably better, in my experience); and c) retirement is like a lot of things in life in that it's actually "learning while doing". You can read exhaustively, (over) prepare, run spreadsheets and calculators until you wear out the laptop keyboard, but like learning to ride a bike, it's only once you start doing it that you gain the experience and confidence to know it will all work out. The contradiction lies in the fact that all your preparation before retirement is what actually allows you to actually take your hands off the bike handlebars and relax after retirement.

That's what I'm finding, anyway.

 

[tmm99]

Confident? That is such a strong word.

I had been LBYM'ing the last several years, and all retirement calculators I used told me I could survive OK with the same level of LBYM'ing I was used to (plus some), even if SS is reduced by 30% and I ended up living until 100. I would have liked to w*rk a few more years, but personal circumstances changed, and I just had to pull the plug.

 

[kcowan]

I was done with a 7 year project and I would have had to commit to another startup. It was 2002 and the portfolio had melted down. So I decided to become a full-time personal portfolio manager. DW ratcheted back and joined me fully in 2004. In another 5 years, I was able to back off the active portfolio management. Never looked back.

In your case, there is always the landlord business. Both DW and I could have returned to gainful employment if we had not made it (with some difficulty). Friends often ask to me get involved with them. I tell them I will give them all the free advice they want and that is it!

(The Mexicans have a good word for retirement: jubilado!)

 

[rodi]

Intellectually, I was confident. Emotionally.... I was scared as hell. It's a big leap of faith to cut the income stream.

However - in your case you have rental income that exceeds your spending.... So cutting off the salary should be a lot less scary. An income stream that more than covers your expenses should give you total confidence to pull the plug.

We have a small rental income stream (20% of our spend) and DH gets SS (17%) of our spend... the rest comes from savings for now. I have a small pension that will be turned on later this year (6% of our spend), and will get SS as soon as 7 years from now (22% of our spend). At that point - we'll only need to cover 35% of our annual budget from our savings... And our budget should drop as the kids launch (although my plans assumed steady spending, adjusted for inflation).

 

[Midpack]

With a 2.5% WR (without factoring in Soc Sec), I was confident when I retired.

However, ask me after the next extended recession/depression for a truly meaningful answer...

Few can give a credible answer until they've been through many years/cycles IMO.

 

[jkern]

I was laid off in July 2009, right in the middle of the recession, stock market crash, housing crash etc. I was originally planning to retire in about 2 or 3 years, so I was very concerned about being financially capable of retiring at that time. Along with severance and unemployment, I did retire and it turned out great.

 

[daylatedollarshort]

I suggest reading the book, What Happy People Know for the antidote to the OMY or one more dollar syndrome. You might also feel more secure with a baseline income in a matching portfolio. There is a limited upside potential with this strategy but the ability to cover retirement expenses with near certainty. And for some peace of mind and a pleasant lifestyle are more important than more money.

 

[RobbieB]

I was very confident when I left, no second thoughts at all. I was really looking forward to beginning my "new life" and I had much I wanted to address.

Not only had my wife lost both of her parents, I had lost my Ma and soon after my wife followed by my father. I was quite alone and I didn't want to live like that anymore.

My desire to "get out there and live", find a girlfriend and restart "life as I knew it" was compelling and far more so than stacking a few more bucks.

Have fun, don't worry and enjoy your new life!

 

[FIREd]

I was pretty confident. I had two main concerns: 1) availability of affordable healthcare in the US and 2) a permanent drop in wealth, our only source of income since we have no pension and still are many years away from Social Security. But I have the EU citizenship and would not mind in the least living in Europe again, so I know that I can have secure access to quality healthcare and, even if my portfolio is permanently cut in half, I'd still be able to maintain a comfortable lifestyle there (DW is totally on board with a move to Europe as well).