Hello everyone!
I've been reading these forums for about a year now (and posted a couple of times), but thought it was about time for me to introduce myself. My name is Scott, my wife and I are in our mid-30s (no kids yet), and we're planning to ER in about a year. Interestingly, my father ER'd, too (in his early 50s).
As one of the younger ones here, I thought it might be interesting to share how I did it. About a month after I graduated from college, I started my own business (which was a bit strange; everyone else was getting a job). I tried several things related to computers, and finally thought I hit it big when I was making about $60K/year (compared to the $15K or so I was living off of before, between income from the business and a part-time job) -- but that good year was just one year. The business went downhill; I then spent two years employed as a software engineer. Then, about 4 years ago, I developed a couple of programs that did really well -- well enough that I was able to save up just about enough to ER early this year.
I sold the business about 6 months ago, as I was approaching burnout, and saw that I wouldn't be able to grow the company further myself (I made very little money from selling it -- under 1x sales, which is low for a software company, especially one in a 'hot' field with a very high profit margin like mine). I've now got enough saved so that my wife and I should be able to ER at any time.
The one catch is that when I sold the business, I had to sign an employment agreement. Although I can technically get out of it ahead of time (kudos to my lawyer!), I've essentially got a year that I'm morally obligated to them. That's why I say we're a year away from ER'ing. My wife could ER now, but doesn't mind working another year.
I believe one of the main reasons it took me about 10 years to get my business to be extremely successful is that I had an attitude towards money that our society (United States) helped form. I couldn't imagine making more money than I needed to live off of. The year I made $60K, I was thinking to myself 'This is all the income I really need'. Just like you're expected to spend all you make (and then some), I figured that you're only supposed to make what you spend. One day, I had an "aha!" moment where I realized that making more than you spend is OK, and early retirement became my goal at that time.
How did I manage to run my own business in such a way that it allowed me to retire after just 4 good years? The 6 years beforehand were vital -- it's hard to run a good business without learning from your mistakes first-hand, and I made plenty of mistakes. The most important thing, though, was efficiency -- I did almost everything myself, thanks to the Internet. All contact with customers was done via E-mail, my credit card processor had a website that took care of the ordering process, and I found lots of little ways to save time (or expand time, by multi-tasking, such as reading an E-mail instead of watching the printer for the 30 seconds it takes to print something out). I went for some small niche markets, where the total possible customer base was in the 10,000s, which allowed for word-of-mouth marketing, and attention to customers provided an extremely loyal customer base.
Running your own business isn't for everyone, and while it can be very rewarding, it can take a lot of patience and hard work. There is no guarantee that you'll succeed, even if you spend as much time trying as I did. I tried my hand at about 5 different (but related) businesses before finding the right one for me.
As for ER, I can't wait. I think one of the biggest challenges, as a younger ER, will be figuring out how to raise kids without raising our income. We'll manage somehow.
I expect that after ER'ing, I will spend a lot of time volunteering (I used to volunteer on the local American Red Cross Disaster Action Team, going to local fires, which I really enjoyed).
As for investing, my initial thought is to take the majority of the money I've saved and place it in a living revocable trust, which would be managed by professionals (the rest I would invest myself). While I know that most people here would recommend index funds, the professionals (if chosen *extremely* carefully) should be able to help protect against many potential problems (stock market crash, failing US dollar, inflation, deflation, better performance in foreign markets, etc.), which is even more important for me as the money has to last longer. I also like the idea of investing some of the money myself, as I think that I have a good feel for investments and their potential (and would consider it to be fun, not a chore). By investing only a relatively small portion of the money myself, I help minimize the risk of my ego causing problems, if my investments do well.
That pretty much sums it up.
-Scott
P.S. As for the name "IDunno", I chose that when there was a post I wanted to respond to, and my first choices for names were already taken, so I came up with a name hastily!
P.P.S. I'll admit I *am* confused about dryer sheets -- I have no idea why someone would spend money on dryer sheets and then rip them up; why buy 'em in the first place?
I've been reading these forums for about a year now (and posted a couple of times), but thought it was about time for me to introduce myself. My name is Scott, my wife and I are in our mid-30s (no kids yet), and we're planning to ER in about a year. Interestingly, my father ER'd, too (in his early 50s).
As one of the younger ones here, I thought it might be interesting to share how I did it. About a month after I graduated from college, I started my own business (which was a bit strange; everyone else was getting a job). I tried several things related to computers, and finally thought I hit it big when I was making about $60K/year (compared to the $15K or so I was living off of before, between income from the business and a part-time job) -- but that good year was just one year. The business went downhill; I then spent two years employed as a software engineer. Then, about 4 years ago, I developed a couple of programs that did really well -- well enough that I was able to save up just about enough to ER early this year.
I sold the business about 6 months ago, as I was approaching burnout, and saw that I wouldn't be able to grow the company further myself (I made very little money from selling it -- under 1x sales, which is low for a software company, especially one in a 'hot' field with a very high profit margin like mine). I've now got enough saved so that my wife and I should be able to ER at any time.
The one catch is that when I sold the business, I had to sign an employment agreement. Although I can technically get out of it ahead of time (kudos to my lawyer!), I've essentially got a year that I'm morally obligated to them. That's why I say we're a year away from ER'ing. My wife could ER now, but doesn't mind working another year.
I believe one of the main reasons it took me about 10 years to get my business to be extremely successful is that I had an attitude towards money that our society (United States) helped form. I couldn't imagine making more money than I needed to live off of. The year I made $60K, I was thinking to myself 'This is all the income I really need'. Just like you're expected to spend all you make (and then some), I figured that you're only supposed to make what you spend. One day, I had an "aha!" moment where I realized that making more than you spend is OK, and early retirement became my goal at that time.
How did I manage to run my own business in such a way that it allowed me to retire after just 4 good years? The 6 years beforehand were vital -- it's hard to run a good business without learning from your mistakes first-hand, and I made plenty of mistakes. The most important thing, though, was efficiency -- I did almost everything myself, thanks to the Internet. All contact with customers was done via E-mail, my credit card processor had a website that took care of the ordering process, and I found lots of little ways to save time (or expand time, by multi-tasking, such as reading an E-mail instead of watching the printer for the 30 seconds it takes to print something out). I went for some small niche markets, where the total possible customer base was in the 10,000s, which allowed for word-of-mouth marketing, and attention to customers provided an extremely loyal customer base.
Running your own business isn't for everyone, and while it can be very rewarding, it can take a lot of patience and hard work. There is no guarantee that you'll succeed, even if you spend as much time trying as I did. I tried my hand at about 5 different (but related) businesses before finding the right one for me.
As for ER, I can't wait. I think one of the biggest challenges, as a younger ER, will be figuring out how to raise kids without raising our income. We'll manage somehow.
I expect that after ER'ing, I will spend a lot of time volunteering (I used to volunteer on the local American Red Cross Disaster Action Team, going to local fires, which I really enjoyed).
As for investing, my initial thought is to take the majority of the money I've saved and place it in a living revocable trust, which would be managed by professionals (the rest I would invest myself). While I know that most people here would recommend index funds, the professionals (if chosen *extremely* carefully) should be able to help protect against many potential problems (stock market crash, failing US dollar, inflation, deflation, better performance in foreign markets, etc.), which is even more important for me as the money has to last longer. I also like the idea of investing some of the money myself, as I think that I have a good feel for investments and their potential (and would consider it to be fun, not a chore). By investing only a relatively small portion of the money myself, I help minimize the risk of my ego causing problems, if my investments do well.
That pretty much sums it up.
-Scott
P.S. As for the name "IDunno", I chose that when there was a post I wanted to respond to, and my first choices for names were already taken, so I came up with a name hastily!
P.P.S. I'll admit I *am* confused about dryer sheets -- I have no idea why someone would spend money on dryer sheets and then rip them up; why buy 'em in the first place?