Post: #1

One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

Post: #2

(01-06-2018 03:40 PM)treypound Wrote:  One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

Since I'm still relatively young, a few million. But once I reach "financially secure for life", I don't plan on stopping work. In fact, I'll probably be more productive since I won't be hamstrung by corporate requirements of being at specific location xyz for 8 hrs a day even if there is nothing to be done since I'm being paid for "8 hrs". I can use my hours more effectively, on things I'm more interested in.

Post: #3

There are some interesting FIRE (Financial Independence Retire Early) blogs out there, Mr Money Mustache being one of the best (a bit preachy, but he's a good writer). The tl;dr is be very frugal, then when the interest on your nest egg (around 4% is considered a fairly safe withdrawal rate historically) is equal to your expenses, you can retire. This might be desirable if you have some soul-sucking cubicle job, or a high risk short life span job.

I like my job, so I don't feel the need to be very frugal. However, if some of my mining stocks do what cryptos have done lately I might bail.

Post: #4

Retirement kills. Never. https://t.co/jI36yGuuaW

Post: #5

Yeah I'm not going to retire just rearming ,reloading and re engaging

Post: #6

Never gonna retire here. Always be working on making money even when I don’t need it anymore.

Post: #7

(01-06-2018 03:40 PM)treypound Wrote:  One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

A better way of looking at it would be that when you have 25 times your yearly expenses you can retire (i.e. you get a 4% investment return).

Hence, having low expenses allows earlier retirement.

Post: #8

(01-07-2018 05:53 AM)remarkable vigour Wrote:  

(01-06-2018 03:40 PM)treypound Wrote:  One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

A better way of looking at it would be that when you have 25 times your yearly expenses you can retire (i.e. you get a 4% investment return).

Hence, having low expenses allows earlier retirement.

Interesting take on it. His expenses I know are very low, as he doesn't have a house payment (he boasts about paying off his condo that he bought during the recession in 4 yrs).

Post: #9

Also depends greatly on just how retired you want to be.

Never look at your bank balance again retired is very different to still actively investing and generating returns but not working retired.

Post: #10

(01-06-2018 04:27 PM)Duke Main Wrote:  There are some interesting FIRE (Financial Independence Retire Early) blogs out there, Mr Money Mustache being one of the best (a bit preachy, but he's a good writer). The tl;dr is be very frugal, then when the interest on your nest egg (around 4% is considered a fairly safe withdrawal rate historically) is equal to your expenses, you can retire. This might be desirable if you have some soul-sucking cubicle job, or a high risk short life span job.

I like my job, so I don't feel the need to be very frugal. However, if some of my mining stocks do what cryptos have done lately I might bail.

No, Mr Money Moustache is one of the worst.

Firstly, he is an environmentalist masquerading as FIRE in order to get his message out.

Secondly, its easy to live a middle class lifestyle and still save loads if you earn 4 times the average. (The dirty little secret of FIRE blogs is that earnings are highly correlated with IQ and it is easy to save enough if you live like other people but make much more than they do if you have the brains to get a highly paid job).

Thirdly, his blog generates 400,000 usd /year.

Fourthly, his blog is actually nothing more than motivation for normies.

A better place to go is Early Retirement Extreme where both the blog and forum focus on the philosophy behind it.

Having said that, Peter Adeney (Mr MM) is actually a good writer, its a pity most of his writing is bollocks.

Post: #11

(01-07-2018 05:56 AM)treypound Wrote:  

(01-07-2018 05:53 AM)remarkable vigour Wrote:  

(01-06-2018 03:40 PM)treypound Wrote:  One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

A better way of looking at it would be that when you have 25 times your yearly expenses you can retire (i.e. you get a 4% investment return).

Hence, having low expenses allows earlier retirement.

Interesting take on it. His expenses I know are very low, as he doesn't have a house payment (he boasts about paying off his condo that he bought during the recession in 4 yrs).

Factual reality.

His investment income is higher than his expenses, ergo he doesn't need a job.

Post: #12

dupe

Post: #13

In the last few years there has been a big boom in the early retirement idea. Many of them still look to produce in retirement so they call it financial independence or FIRE for financial independence retire early.

Its not about retiring early to sit on your ass, it is about getting out of the rat race early to do your own thing, if you choose to. If you are in a decent situation at 30 then there is no reason you should be working for the man, again, unless you want to. It is nice to have that F You option.

Its also doesn't have to be about trying to live in a shithole and eat ramen noodles, I certainly don't do that bs. There are just ways to live smarter.

There are a lot of great sources for this info and you would not believe all the ways you can move 401ks/Trad IRAs into Roth IRAs. tax free. Which would then give you a mountain of options.

http://www.mrmoneymustache.com/2012/01/1...etirement/ (this guys whole blog is good, mainly the old stuff though... Warning: He is a raging liberal)

https://www.choosefi.com (this guys have a great podcast but mainly the older episodes with big names such as Jim Collins, Big Ern, JD Roth, Mad Fientist, and others)

https://earlyretirementnow.com

http://www.getrichslowly.org

https://www.madfientist.com (great simple breakdowns of LEGAL IRS loopholes)


Play around with this compounding interest calculator just to give a good idea of how easy it is go grow 500k-1mil.
http://www.moneychimp.com/calculator/com...ulator.htm

Post: #14

My financial advisor for GenX and later assumes a lifespan of 92 years. Based on his firm's research, people who take care of themselves and baring accidents, cancer, etc. will likely live into their early 90s. The goal is to not run out of money before then as Social Security and Medicare will exist in name only (if at all).

Post: #15

(01-07-2018 06:10 AM)remarkable vigour Wrote:  

(01-06-2018 04:27 PM)Duke Main Wrote:  There are some interesting FIRE (Financial Independence Retire Early) blogs out there, Mr Money Mustache being one of the best (a bit preachy, but he's a good writer). The tl;dr is be very frugal, then when the interest on your nest egg (around 4% is considered a fairly safe withdrawal rate historically) is equal to your expenses, you can retire. This might be desirable if you have some soul-sucking cubicle job, or a high risk short life span job.

I like my job, so I don't feel the need to be very frugal. However, if some of my mining stocks do what cryptos have done lately I might bail.

No, Mr Money Moustache is one of the worst.

Firstly, he is an environmentalist masquerading as FIRE in order to get his message out.

Secondly, its easy to live a middle class lifestyle and still save loads if you earn 4 times the average. (The dirty little secret of FIRE blogs is that earnings are highly correlated with IQ and it is easy to save enough if you live like other people but make much more than they do if you have the brains to get a highly paid job).

Thirdly, his blog generates 400,000 usd /year.

Fourthly, his blog is actually nothing more than motivation for normies.

A better place to go is Early Retirement Extreme where both the blog and forum focus on the philosophy behind it.

Having said that, Peter Adeney (Mr MM) is actually a good writer, its a pity most of his writing is bollocks.

I find his financial advice to be pretty reliable. He's very liberal; preachy, as I pointed out before. The site has a forum and if you want some entertainment, find a thread started by a guy who discovered the red pill. Maybe it's a LARP, but he describes how he goes from Beta Loser to not quite Chad T-cock. The outrage and pearl clutching in the replies is hilarious. MMM has definitely attracted a mob of PC SJW sycophants.

Post: #16

There are a lot of threads regarding financial independence on this forum, but if you don't want to dig through the archives, then a lot of the ideas behind it have already been cited in this thread.

Financial independence is what you make of it, but it's a good point that retirement kills. Retiring by the time you're 45 sounds pretty harsh to me if you don't know what you want to be doing with your time all day besides sitting on your ass. That's why, if you decide that you want to "retire" early, you have to start working now not only on wealth accumulation, but more importantly on developing who you are and what you want to be. We are what we repeatedly do, and god help the man who sits on his ass all day after retiring - for most people, obesity and listlessness would surely follow.

By the time that you reach financial independence, you want to have a good idea of what motivates you in life (besides being free from the rat race). What do you like to do? What makes you happy? Even if you reach financial independence at a very early age, you need more than money and freedom to be satisfied/happy with life, even if freedom makes you happy to some degree. What are you going to do with that money and freedom? You have to figure that out well before retirement, or else face a hard bump once you do as you find that you were chasing an empty dream. In my experience, satisfaction will only follow if you find meaning in your daily life while in your working/accumulation stage.

Some men might find that meaning through their family and friends. But when you retire young, all of your friends will be at work during the day and will only have some (if any) time for you on weekends - so, again, you can easily find yourself sitting on your ass in a quiet house. Family? Sure, put time into your LTR, if you're in one, but spending all day, every day with the same person is a long time and you'll need other things to keep yourself occupied. Raising your children - say, through homeschooling? Sure, but eventually they'll grow up and you'll need something else to work toward in life.

I'm not sure of what the answer is, since we live in a world where meaning and a sense of purpose are hard to find. Retiring early won't change that, but you won't really be happy until you have them.

Post: #17

(01-06-2018 03:40 PM)treypound Wrote:  One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

This is a subject that is near and dear to me, and have been reading/thinking/listening to podcasts on it for the better part of the last year as I found myself in the same boat (and even made a post about it a couple months back). Apologies in advance for the long post.

First off, due to the rapidly improving quality of life, you need to make some paradigm shifts which were true since basically forever up until 50 years ago. While less true now, most jobs were dangerous, repetitive, boring, dirty etc. The only reason you'd spent half your life in a coal mine hacking at rocks, or hunched over in a rice paddy, is because it was better than spending your whole life freezing and starving. Jobs were extremely taxing, and no one would do these sorts of things for the hell of it. Hence the idea of retirement came about. It was something for when you were physically unable to continue, and ideally be able to look after yourself through savings. Now however, you can literally earn a lifetime of "not starving/freezing" in a decade thanks to improvements in efficiency, and if you also happen to have above average income, or a minimalist slant, you can definitely live a pretty decent life.

To answer your exact question, a million is probably enough for most people. If you're in early 30s, that's 40k/year that is as likely to last as your body is. Since it's all capital gains and divs, you're paying little tax, so your after tax income would be the equivalent of around 60k from a job, or right around average. Given you have no work expenses and could live anywhere, I don't understand not being able to make that work. I chuckle at the "I'd need a few million" comments. Basically at 4%, that's 120k of tax advantaged income, after tax equivalent to close to a 200k salary - almost a 1%er. Humans are great at adapting to good and bad things, so losing a leg or buying a Ferrari generally leaves you at the same happiness point in a few months. Any issues you still have at a 40k aren't solved with more money. Lots of millionaires off themselves. How many lobster and steak dinners can you eat in a night? How many rooms in your house can you realistically use? Warren Buffet seems perfectly content in his middle class home, and his idea of a great meal is going to Mcdonalds. Poor people love to say "Money doesn't buy happiness" which is true - but incomplete. Lack of money also contributes hugely to stress, worry, and a host of other things best avoided. A better version might be: All else being equal, it's probably better to have more money than less, but it wont magically solve issues beyond "I have no food or shelter".

That said, retirement, and the idea of a job/career I think needs to be redefined. People generally put up with shit from work because otherwise they starve. Now this new cohort, by virtue of merely being happy to live like the average person from 1980 realized they can do so working 10 hours a week. .

That however begs the question, "Then What?". So many people I know live their lives on autopilot. Go to school, university, apply to whatever jobs they're remotely qualified for, spend everything they make on shiny baubles they think will make them happy, have kids. All their time is literally spoken for, and they do not have to make a single decision or have time to think about the hard questions. Getting to this point in a sense is a bit scary because you're forced to look at yourself and answer to questions like "Are you happy?" "what do you truly love?" "Are you fulfilled?"

Like many, I tried the hedonistic world traveller party fiend thing for a while, but that just left me overweight, with a borderline alcohol dependency, a handful of interchangeable girls slayed and single serving friends added on facebook. Now, I'm working again (although more than I'd like - so might be time to explore the fuck you part of fuck you money) and since I've always been a bit of the introverted intellectual, I honestly find myself reading a ton, and going for 6 hour hikes through the woods.

A story that really nails it for me is the story of the Mexican fisherman.

Quote:An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while. The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “15 – 20 years.”

“But what then?” Asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”

“Millions – then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

(01-07-2018 06:10 AM)remarkable vigour Wrote:  No, Mr Money Moustache is one of the worst.

Firstly, he is an environmentalist masquerading as FIRE in order to get his message out.

I absolutely love the guy. Preachy sure, but I agree with what he says. To say the whole thing is a scam based around environmentalism seems a bit tin foil hatty to me, and perhaps it's that I too am an engineer that I see a certain beauty in efficiency. Being able to bike 100km to go camping, using something like 2500 KCals (1/3rd a liter of gas) of energy and knowing that someone else required 20 times that is simply neat.

A lot of these things (minimalism, efficiency optimization, environmentalism, early retirement) are inter-related, and one often segues into another. I'd say he's primarily about efficiency, and early retirement / environmentalism are by naturally occurring consequences of that.

Post: #18

I agree that Mr. MM is great. I don't like his politics or bike pushing but he has helped many financially. He is a great resource for beginners.

Post: #19

(01-07-2018 05:53 AM)remarkable vigour Wrote:  

(01-06-2018 03:40 PM)treypound Wrote:  One of the guys in my gym this morning was telling me about how he plans on "retiring" from actively working at year-end to pursue his investment interests (managing his rental real estate and doing indy consultant work). He is 40, and when I asked how long he had been working at his current company, he said it will be 9 yrs this summer.

I know based on the life decisions you make (i.e kids, marriage), it may be virtually impossible to financially retire for most at 40, but how much money would be enough for you to walk away from your job?

A better way of looking at it would be that when you have 25 times your yearly expenses you can retire (i.e. you get a 4% investment return).

Hence, having low expenses allows earlier retirement.

I hear this alot, the one thing I don't understand is 25x yearly expenses is different if your 30 versus 50. Can you explain how this relates?

Basically if I'm 30 I have 20 more years that money needs to last than if I'm 50

Post: #20

Here's my take. So I'm 35, really pissed away my 20's getting in trouble, being an idiot, wasting money. It was about 28 that I started getting my shit together, started earning decently, left my job and pursued my business as well as grew some side hustles, did decent in crypto.

My retire early number is pretty low, for me once I bank about 500K I'm going to seriously look at retiring. My idea of retirement is different than most and I'm pretty frugal by nature. I have affiliate marketing and some other passive income stuff that brings in easily 30K per year and honestly 30k to 40k I can live fairly comfortably as I don't really buy clothes, I don't eat out alot and I don't travel a ton, at least not internationally more local and driving distance stuff.

When i say retire I'm not going to go fishing everyday, really just sell my business and only do passion projects so writing, video production stuff, and really anything that interests me, trying to turn hobbies into revenue streams etc.

I for the most part wouldn't be touching my cash, I could probably live almost entirely off passive income comming in, would hope to continue to grow that but could live off it as is.

I'm definitely a believer in the lean fire lifestyle. I would much rather enjoy my time with leisure activities, reading, learning and pursuing things I like doing regardless of how much money they bring in, that would be much more attractive to me than driving a nicer car or taking an extra trip per year.

Only thing that might throw a wrench in my plans is I think I would like to have kids and that definitely requires money.

Post: #21

(01-08-2018 02:37 PM)jamaicabound Wrote:  I hear this alot, the one thing I don't understand is 25x yearly expenses is different if your 30 versus 50. Can you explain how this relates?

Basically if I'm 30 I have 20 more years that money needs to last than if I'm 50

Simply because the vast majority of income is from profit. It the same reason that a "forever mortgage" would only be like 10% cheaper on a per month basis than a 25 yr one.

When you run the numbers you look at the expected returns as if you retired in each of the last 117 or so years. https://www.firecalc.com/

The distribution is something like this. On average, you could have pulled like 6% inflation adjusted per year. Obviously if you try this, you're basically betting on a coin flip if you'll run out of money in 30 years. If you pull out 4%, than 6 out of 117 years would have seen you go bust, or 5%. Keep in mind as an average 35 year old, you're more than 5% likely to die before 30 years, so just keeps odds in perspective.

Bump it up to 60 year retirement, and you only have an 83% chance of not running out of money at 4%. Maintaining equal 95% confidence would mean you can only pull out 36k or so.

Lets say you invest in a Canadian bank. CIBC (most others are about same) currently pays a 4.8% dividend. Generally which has only ever moved in one direction, which is up.

Most of the time why these schemes fail, is because you've retired going into a bear market. Since you're still pulling out 4% inflation adjusted of the initial amount, its a bigger percentage of the total amount. When the market recovers, you've depleted your capital so much you can't enjoy the gains. Now obviously the simple way to avoid is if we go into another 2008, don't sell $40k worth of stock that was worth $120k 3 months ago for 40k. Have an intrinsic idea of what the stock is "worth" regardless of the price, and more than that, don't be in a financial place where you can't afford to wait it out.

Post: #22

Most can retire at a younger age if they relocate to a place like SEA or Latin America.

Post: #23

Seadog is dropping some knowledge. A million is enough. You can do it with less. De-program yourself from thinking you need to buy iphones and unnecessary junk and start to live now.

I read some MMM acticles a long time ago and I was already doing most of what he said. Learn to use tools and fix stuff. Aggressively save up most of your income and you can retire early.

I did it in my late 30s, but that doesn't mean I'm living in a retirement home playing shuffleboard. It means I'm no longer trading my time for money.

People have a very different idea of what retirement is. For me it's the independence to go and do what I want when I want where I want. That includes business ventures as much as it does travel and leisure.

Asking someone in HR for permission to take a couple weeks off? Fuck that.

Post: #24

edit

Post: #25

Although the media and the people in your surroundings would love to make you believe otherwise, anyone living in a Western country is able to retire at age 40. If you're willing to live modestly from that age that is. And it's simple. Put aside a significant amount of your income aside each month. Make sure to invest it with a yield of +/- 7% interest per annum. Let compound interest do the rest of the work for you. At age 40, unplug and move onto new horizons.