grumpy
Thinks s/he gets paid by the post
- Joined
- Jul 1, 2004
- Messages
- 1,321
For the young dreamers out there I offer the following description of how my wife and I did the early retirement thing:
Background - tomorrow is my last day of work. I am 57 and my wife is 56. She retired from teaching in July. I have worked two days a week as a consultant to NASA for the last two and a half years. Prior to that I worked as a civil servant for 32 years. We have zero debt. My wife stayed home for 10 years to raise two children. We sent both kids to college and helped our daughter financially through graduate school. We own our current home free and clear and will pay cash for a new (smaller) house we are having built in a "55 or better" community with every amenity you can think of. We have a net worth of over $1M. We should be able to live the lifestyle we desire with a SWR of around 3%.
How did we do this? The number one factor was to always live below our means. Along with this we avoided ALL debt except the mortgage. That meant paying cash for cars (or just not buying a car if we didn't have the money), paying off credit cards each month and paying off the mortgage early. This allowed us to save and invest. We contributed the maximum to IRA's/403(b)'s. I maxed out contribution to the Thrift Saving Plan. I used DRIPs to build a portfolio of dividend paying stocks and used automatic monthly investments into low cost, no load mutual funds.
Now obviously, this meant living a somewhat more austere lifestyle than our friends and neighbors, especially during the years when my wife stayed home with the kids. But we still enjoyed our lives and our friends and neighbors are now deep in debt and facing the prospect of many more years of work. Also, having gotten used to living frugally, when my wife went back to work and I hit my peak earning years we were able to enhance our lifestyle and still sock away a large percentage of our income. Even with the market downturn in 2000 our net worth has more than doubled since 2000.
Perhaps all of this was easier for us since our parents l grew up during the Great Depression. We were raised without the sense of entitlement that some younger people seem to have. I have to shake my head when I see a young couple who are mortgaged to the hilt to buy a huge house, who have luxury cars they can't really afford with large loan or lease payments and no money being saved for kids education or retirement. I guess they are entitled to make those choices but I wonder if they realize what they are going to be giving up later.
We recently returned from a glorious 10 day cruise to Alaska celebrating our 35th anniversary. We are taking a cruise to the Panama Canal in November. We are going to enjoy ourselves as long as our health permits. With the time and energy I used to spend at work I intend to swim or walk every day. I look forward to developing new interests and new friends.
So, the message is: it can be done. You don't need to be a dot.com millionaire. You don't need to take big investment risks. You do need to be clear about your goals, be disciplined in you spending, and live below your means and save, save, save.
I hope this story helps to encourage those of you who are starting down this path. Good luck.
Grumpy
Background - tomorrow is my last day of work. I am 57 and my wife is 56. She retired from teaching in July. I have worked two days a week as a consultant to NASA for the last two and a half years. Prior to that I worked as a civil servant for 32 years. We have zero debt. My wife stayed home for 10 years to raise two children. We sent both kids to college and helped our daughter financially through graduate school. We own our current home free and clear and will pay cash for a new (smaller) house we are having built in a "55 or better" community with every amenity you can think of. We have a net worth of over $1M. We should be able to live the lifestyle we desire with a SWR of around 3%.
How did we do this? The number one factor was to always live below our means. Along with this we avoided ALL debt except the mortgage. That meant paying cash for cars (or just not buying a car if we didn't have the money), paying off credit cards each month and paying off the mortgage early. This allowed us to save and invest. We contributed the maximum to IRA's/403(b)'s. I maxed out contribution to the Thrift Saving Plan. I used DRIPs to build a portfolio of dividend paying stocks and used automatic monthly investments into low cost, no load mutual funds.
Now obviously, this meant living a somewhat more austere lifestyle than our friends and neighbors, especially during the years when my wife stayed home with the kids. But we still enjoyed our lives and our friends and neighbors are now deep in debt and facing the prospect of many more years of work. Also, having gotten used to living frugally, when my wife went back to work and I hit my peak earning years we were able to enhance our lifestyle and still sock away a large percentage of our income. Even with the market downturn in 2000 our net worth has more than doubled since 2000.
Perhaps all of this was easier for us since our parents l grew up during the Great Depression. We were raised without the sense of entitlement that some younger people seem to have. I have to shake my head when I see a young couple who are mortgaged to the hilt to buy a huge house, who have luxury cars they can't really afford with large loan or lease payments and no money being saved for kids education or retirement. I guess they are entitled to make those choices but I wonder if they realize what they are going to be giving up later.
We recently returned from a glorious 10 day cruise to Alaska celebrating our 35th anniversary. We are taking a cruise to the Panama Canal in November. We are going to enjoy ourselves as long as our health permits. With the time and energy I used to spend at work I intend to swim or walk every day. I look forward to developing new interests and new friends.
So, the message is: it can be done. You don't need to be a dot.com millionaire. You don't need to take big investment risks. You do need to be clear about your goals, be disciplined in you spending, and live below your means and save, save, save.
I hope this story helps to encourage those of you who are starting down this path. Good luck.
Grumpy