Wondering if there is anyone on here that has retired early (FIRE Movement)

[dreamingWest]

I'll listen to the Bigger Pockets Real Estate podcast. I'm genuinely curious because I don't see how to make it work for short term cash flows at current interest rates and valuations. Sure if you snowballed things at ultra low rates for the last 10-20 years and had great property managers and renters. I'm open minded with finance and don't want to be short sighted. I could see RE as further diversification. I put a lot into 401k, Roth, and post tax. I could change some of that to RE. But I'm simply not seeing 8% cash flow (as mentioned in this thread as a goal) after maintenance, property managers, property taxes, mortgage interest, and insurance. I'll do some more research.

 

[cb122]

Currently, wife and I will target age 50-52 as retired (13 years to go). I don't know if that is what OP considers early or not. We'll have plenty to keep us busy. This can all change with the expansion of our family. I also don't bet on anything ever going according to plan. If not, part-time work and nursing contracts can always come into play.

The path to get there will include a diversified portfolio + pension (pension will cover expenses). This diversified portfolio includes filling tax advantaged space (457b, 401k, Roth *2, HSA) and a brokerage account. I am currently researching expanding into real estate and how this looks within our portfolio and what kind of income stream it can provide. However, the foundation is built on equity index funds and will remain so.

It's too bad, when financial discussions come up, people want to pontificate given finance is very personal. Their valid arguments become gimmicky and can easily dissuade people, new to finance, to follow. I've seen this in both real estate and indexing communities.

Real estate leverage can cut both ways and the stock market isn't risk free. People succeed and fail in both spaces. Successful business owners and real estate investors that I personally know, continue to utilize tax advantaged space as they diversify their portfolios and take advantage of the tool. They also buy a new rental property when it makes sense.

There are many ways to skin a cat given a person's need for an income source, ability to fund and grow that source, and what their risk tolerance is.

 

[txjustin]

Plan to retire from the corporate world within 4 years. I’m 41 now. I invest in real estate and own several rentals.


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[bozeman]

One strategy I found to include in overall plan is the dividend per bill in retirement...for instance:
Dividend from Stock X is enough to pay power bill
Dividend from Stock Y is enough to pay cell phone bill
Dividend from Stock Z is enough to pay for $100/month in gas for car
Using historic data, this seemed liked a 'close enough' strategy and give a target to shoot for.

 

[cnelk]

I will add….

A divorce will definitely change your plans -

For the better and for the worse

 

[NRA4LIFE]

One strategy I found to include in overall plan is the dividend per bill in retirement...for instance:
Dividend from Stock X is enough to pay power bill
Dividend from Stock Y is enough to pay cell phone bill
Dividend from Stock Z is enough to pay for $100/month in gas for car
Using historic data, this seemed liked a 'close enough' strategy and give a target to shoot for.

BINGO!!!

 

[Rifleman86]

Currently 43 and I plan to semi retire at 50, January 1, 2030 to be exact.
I will have 26 years between fire/EMS and LE. both professions are a young man’s game. I don’t care if I have to mow lawns, work at Home Depot, be a damn door greeter at Walmart. I’m going to get out at the first opportunity. I know it’s difficult to predict the job market in seven years, but if it’s anything like today there will be plenty of work for someone who wants to work.
Between KP&F and my kpers 457 plan, any extra money should just be gravy.
You do have to consider your health insurance options. What is going to cost to be added to your spouses insurance, pay out of pocket, or just find a job strictly for the insurance.

Glockster26 same exact plan/scenario. Out of the fire service at 48/49 (depending on how much sick time I have to burn.)

If I have to work at an Ace Hardware or Home Depot in some small to mid size western town for health insurance and supplemental income until the military pension hits I’ll still be happy as a clam.

 

[southLA]

30 y/o. Been saving 43% of my net income for the last 10 years or so and plan to "retire" (start whatever other job I want) at 45ish.

 

[Idaboy]

What an absolutely pathetic and senseless existence some people must live when they have to have a job to give their life meaning.

Talk about having over-conformed and given up any sense of individual purpose and identity…. Sheesh.

If you need a job to not be bored, you are a pathetic excuse for a human being: have no sense of passion or creativity and just sleepwalked through your life. I reckon these must be the same people who apparently lack an inner dialogue.

Yeah man, no kidding...

What an absolutely pathetic and senseless existence some people must live when they have to have a job to give their life meaning.

Talk about having over-conformed and given up any sense of individual purpose and identity…. Sheesh.

If you need a job to not be bored, you are a pathetic excuse for a human being: have no sense of passion or creativity and just sleepwalked through your life. I reckon these must be the same people who apparently lack an inner dialogue.

yeah, those damn pastors are pathetic....man dude that's harsh

 

[Idaboy]

Age 55. Thats my number. I will answer to no man after tha

Age 55. Thats my number. I will answer to no man after that.

No "man"after that....interesting choice of words

 

[Idaboy]

I completely understand what you're saying.

Main point of this thread was getting to financial independence/retirement as early as possible.

Tying money up in a Roth isn't the play for that. I'll add some long-winded details below to help guys that might be following along willing to entertain both approaches:

For a young investor that same $6,500, or a couple years worth of it in an expensive market, could be used to get into a 3.5% down FHA loan on an owner-occupied 4-plex (or duplex, or triplex, or sfr where you rent the rooms, doesn't matter). Legally required to live there for a year, during that time you'd be getting paid to live there and increasing your net earnings and reducing your DTI.

Now you have more income freed up to buy a) a nicer place to live b) qualify for more investment properties c) stick more money into other investment vehicles. This stuff snowballs fast because of leverage...I know, that's a dirty word for some.

The same advantages of a Roth exist in real estate. Each property is a mini-bank that you can take tax-free withdrawals from (within reason). A bank will lend up to 80% LTV on just about any piece of real estate in the country that isn't a POS. Run your worst case scenario numbers for potential corrections, stick to them, cash out that tax free money and go buy more. Don't use it to buy a truck, boat, etc. early on.

If you have enough principal in your Roth, it'll replenish itself after a withdrawal...when you're 60. Cool.

If you have a good equity position in a property, your tenants will replenish that position post re-fi. Any equity pulled is still tax free money because it's either a loan or line of credit....but now you can double dip on depreciation, claim real estate professional status, a whole slew of write-offs etc. that do not exist in the world of Roth IRAs.

Most folks will/should eventually pay a handful of properties off in-full as a security blanket, but aggressive growth is ALWAYS done with leverage. Whether that's bank money, other people's money, etc.

The tax rules are there to be taken advantage of, and if a fella was focused on speed...the trajectory through various types of real estate investing is exponentially faster than playing the long game.

When you take into account the fact that there is an estimated 4 MILLION unit shortage in housing in this country TODAY...you can see the opportunity for what it is...and there is a reason institutional money (hedge funds, family offices etc) are scooping resi. at unprecedented rates...

I don't believe that real estate is the holy grail for financial independence because I'm in real estate, I'm in real estate because I know it's the holy grail for financial independence. Big difference.

I'll leave that as my last contribution to this thread, if it helps one guy hunt more and spend more time with his family...worth the 5 minutes it took to type it up.

And if any of you know of any RV or mobile home parks in a red state that may be for sale...hit me up, and I'll make sure you're paid a handsome bird dog fee.

We get it, you do not believe a ROTH should be part of a retire early plan.

 

[PNW bow hunter]

For the guys planning early retirement, I’m curious what your target income gross income level is in retirement, and do you plan to be completely debt free as well?

The closer I get to meeting my goals, I have to keep readjusting and raising the end goals. The amount fixed costs has gone up the last 5 years has been pretty shocking

 

[Fowl Play]

There are many strategies discussed above so I will present another. ISO's (stock options) are essentially the pensions of our current generation. Find yourself a decent startup working something truly novel. Make sure they are willing to pay market rate for your job, solid benefits, PLUS a nice 5 year vest with hefty stock option numbers. Make sure the leadership is solid and you have a vested interest in the work the company is doing. Work your butt off and enjoy the rewards that come with part ownership of the company you are working hard for. If it's not what you thought after 2 years, rinse/repeat until you are part of a company with a solid future. I am 33 and can legitimately retire following this method (and am currently taking steps to do so). Yes there are other ways to do it, but this is one of the fastest methods if you are in technology right now. It is hard to beat 6000%+ gains on stock price if you get with the right companies at the right time. You might catch some stink eye "jumping ship" every 2 years, but you need to keep your and your families future as top priority.


My personal strategy is (some conservatism built in):
* Accumulate 30x of my yearly need
* Invest approx 35% bonds (low risk investments), 65% stocks initially (heavily diversified)
* Pay off everything (this helps me take advantage of as much of the 0% Long Term Capital gains tax rate as possible)
* Withdrawal approx 3.5% per year https://www.madfientist.com/safe-withdrawal-rate/
*Still need to figure out health insurance options (last step)
* If it all goes to shit, go back to work (in reality I'll likely do contract work anyways for some extra fun money, as I truly enjoy what I do)

 

[MCS]

I'll listen to the Bigger Pockets Real Estate podcast. I'm genuinely curious because I don't see how to make it work for short term cash flows at current interest rates and valuations. Sure if you snowballed things at ultra low rates for the last 10-20 years and had great property managers and renters. I'm open minded with finance and don't want to be short sighted. I could see RE as further diversification. I put a lot into 401k, Roth, and post tax. I could change some of that to RE. But I'm simply not seeing 8% cash flow (as mentioned in this thread as a goal) after maintenance, property managers, property taxes, mortgage interest, and insurance. I'll do some more research.

I looked at a single family house today that has a 10.08% cash on cash return. Every market is different some have good cash flow others do not. I can send you details on it if you want it's on zillow.

 

[Crowmangler]

For the guys planning early retirement, I’m curious what your target income gross income level is in retirement, and do you plan to be completely debt free as well?

The closer I get to meeting my goals, I have to keep readjusting and raising the end goals. The amount fixed costs has gone up the last 5 years has been pretty shocking

One of the hardest things for stubborn & independent minded people (like myself) is to let someone else do what they're much better at than me. Find a good financial planner to help you find your number based on your situation & life goals. Then let them work their magic to get you there. You'll be amazed at how many "tools" there are out there from one end of the spectrum to the other.
TO answer one of your questions, yes being debt free is one of the most important benchmarks you can achieve (for obvious reasons).
One of the most eye opening things he taught me is how inflation can decimate the power of your savings in the future. Pedo Joe is currently demonstrating that to a lot of people.

 

[Fowl Play]

One of the hardest things for stubborn & independent minded people (like myself) is to let someone else do what they're much better at than me. Find a good financial planner to help you find your number based on your situation & life goals. Then let them work their magic to get you there. You'll be amazed at how many "tools" there are out there from one end of the spectrum to the other.
TO answer one of your questions, yes being debt free is one of the most important benchmarks you can achieve (for obvious reasons).
One of the most eye opening things he taught me is how inflation can decimate the power of your savings in the future. Pedo Joe is currently demonstrating that to a lot of people.

One thing I will say about financial planners. Do not blindly let them put your money into a fund they manage. Many financial planners are essentially robbing people blind charging 1.5%-2% per year management fees. Compound that over a lifetime and it's ridiculous. Vanguards VOO will get you the entire S&P500 for roughly .03% per year and very few funds privately managed will beat that when you account for their management fees as well. Find a financial planner who will instead charge you a flat rate, say $1000-$1500 to look at your situation and actually provide you with a plan for you to manage your own money. And then charge an hourly rate for pop ins/check ups every now and then. Even if they charge $200 an hour for consultations for a good one, it's still WAYYYY cheaper than the conventional route. And then you actually know what you are doing with your own money...


Or if you don't feel confident managing your own money, even with professional help, at least do a litmus test and ask to see their funds numbers over the last 10 years and have them prove how they are worth it, vs just averaging in your money into the S&P, etc.

 

[MCS]

For the guys planning early retirement, I’m curious what your target income gross income level is in retirement, and do you plan to be completely debt free as well?

The closer I get to meeting my goals, I have to keep readjusting and raising the end goals. The amount fixed costs has gone up the last 5 years has been pretty shocking

I have a net income goal. I need $3800 a month to live comfortable $1000 of it goes to health coverage and I have zero personal debt. I'll also extend my emergency fund from 6 months to 1 year before I quit working.

 

[hflier]

I am going to retire at 62. Next year, I have had it with corporate America. I have made good money but it’s going to kill me. I don’t have enough, but I am going to figure it out. I can make enough day trading to supplement my income. Yea, I know. I am one of the 10% that figured it out. My advice to anyone younger, make stashing your cash number one priority over all else. You don’t need a new truck, big house and a boat. I had it all and I was a slave. F….. that. The simple life is happiness.

Ron


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[NRA4LIFE]

One thing I will say about financial planners. Do not blindly let them put your money into a fund they manage. Many financial planners are essentially robbing people blind charging 1.5%-2% per year management fees. Compound that over a lifetime and it's ridiculous. Vanguards VOO will get you the entire S&P500 for roughly .03% per year and very few funds privately managed will beat that when you account for their management fees as well. Find a financial planner who will instead charge you a flat rate, say $1000-$1500 to look at your situation and actually provide you with a plan for you to manage your own money. And then charge an hourly rate for pop ins/check ups every now and then. Even if they charge $200 an hour for consultations for a good one, it's still WAYYYY cheaper than the conventional route. And then you actually know what you are doing with your own money...


Or if you don't feel confident managing your own money, even with professional help, at least do a litmus test and ask to see their funds numbers over the last 10 years and have them prove how they are worth it, vs just averaging in your money into the S&P, etc.

But when they are making you 8% in a 2% market, worth every penny.

 

[Fowl Play]

But when they are making you 8% in a 2% market, worth every penny.

If they consistently beat the market, then yes they are definitely worth their money. Very very few do. I'm just saying be careful and have them prove to you beforehand with actual hard numbers that they are worth it, before you actually give them your money. I had meetings with 4x different HIGHLY recommended financial planners from friends and family who funds either did not perform as well as the S&P or who's funds essentially exactly tracked the S&P.... meaning they were probably just putting your money in the S&P and charging you 2% for it.

For the common person just trying to make their money work for them, it's actually pretty hard to beat most of Vanguards offerings honestly.