Thank you, I appreciate that. It means a lot coming from you, I really enjoy your posts and opinions here on Pinside. No sarcasm, that's sincere.

If I could do it all over again I would have bought less house and more investment/rental property...and more pinball machines when they were cheap! Owning pinball machines in the mid-2000s changed my life for the better, I'd rather have had them than retired early.

And I wouldn't have taken that stupid 401k loan.

This thread is awesome. Nice thing is on most of the topics outside of certain health issues you can course correct like on spending, 401k, etc. Never too late.

Where in Corolla are you? I've been considering buying a rental house in Duck.

I'm in the Currituck Club, north of Duck. I rented for 10 years and now here full time. All rentals are pretty much full. The market has been crazy the last year or so. My house is open for all pinsiders so PM me if in the area.

Buy one! We currently own a beach house in Southern Shores, just south of Duck. It’s a great area and the town of Duck is so nice. Inventory of homes is low because people have been buying them with the low interest rates.

Thanks, that's a very generous offer. We've stayed in Currituck Club a few times, it's very nice. Like the location and being close to the Harris Teeter, Duck Donuts, and Urban Kitchen!

Yeah I've been watching the inventory closely. We've stayed in Southern Shores a couple of times, it's very nice, also like crossing the bridge and being close to home on a Saturday and not needing to be in bumper to bumper traffic for 1-2 hours heading north. Who do you use as your rental agent?

I've always rembered a simple rhyme that I heard at a retirement seminar at the beginning of my career. "ownership pays more than loanership". This was specifically talking about long term market investment.

Someone said you should make sure you have hobbies to keep your time occupied. Like they said you should have 2 or 3 hobbies on steroids.

I’ve seen my parents and others who have retired who’s day consists of getting up eating 2-3 meals and sitting on the couch for 10 hours. It’s a little depressing, my parents never had any hobbies or occupations outside of work and the kids. Once both were no longer around they never did much. My dad doesn’t even watch any sports. They’re not on the internet or reading books.

Mine are doing that now. They are ill with terminal conditions, and it's kind of disherting to just watch them do that and watch TV.

I am so much more busy then when I was "working". So are those around me that have also retired. Must be a lifestyle from being a child right on up. I was always on the go.

( I will say, I was always hyperactive and even though I/we caused our parents to go crazy..we don't sit around) and usually workaholics as we came to age.

I always embraced that condition as positive.

I hope like hell it does, I have no debt AND my investments may take a nice hike!!

With hyperinflation and rising interest rates, most investments will tank. Unless you have a rare, single investment. Of course most financial advisors say you should not have only a single investment. Unless it is in cash or a government secured deposit.

Cash is trash, hyperinflation will make cash worthless.

What makes anyone think we will have hyperinflation? Inflation has been and forecast to be very modest.

I think because the government is so far in debt. When that debt comes due, for now we pay it off by just issuing more debt. Other countries and our US citizens are inclined, at this present time in history, to continue buying that new debt. But at some point, people are going to question the validity of US bonds as an investment.

Once there's nobody buying the new debt, the US govt. will have to find another way to pay back the bonds coming due. The feds way to solve that problem is to print more money. They're the only ones that get to do that. Once the US is about to default on a loan, they'll print more money, devaluing the currency, and away inflation will go.

One of my good ROI activities this winter. 40$ worth of lumber, get good exercise, get some Vitamin D, entertain the kids.

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Our house is listed in AirBnB. We have rented homes from Twiddy and Southern Shores Realty. Lots of options for rental companies for beach vacation. I think more and more owners are moving their listings to AirBnB.

I think you partially answered your question. It’s the ‘new’ money. Problem is that it’s all borrowed. Sure, someone may say ‘I don’t owe any debts’, but the problem is most of the world does (the government owes a lot, the company you may work for, the person thinking of buying whatever you’re selling, the company your 401k is invested in). Someday it’s going to come due, and when enough is due all at once everyone starts cashing out all at once, and all that value on paper becomes worthless when nobody is buying.

Your graph isn't necessarily accurate though in terms of retirement. I ran the numbers with the returns from 00 to 08. If you retired with 1mil and took out 40k a year, you would have been just fine from 00-08 and just fine from 08-2020. If you withdrew 50k you'd be fucked. That's without SS.

If you had 2mil in retirement, you could have taken 75k out from those periods and been just fine, based on the yoy returns.

If you have 2mil you can pretty much take out 75k indefinitely btw with 6% return. - 6% rate average from 00-20.

The markets never ended in a 50 percent decline. -46% 00-02. -38% in 08. Just saying.

If anyone had the secret to early retirement, they’d already be retired, and probably not posting here.

If your withdrawals increased with inflation at 4% you'd have $406k left going from 2000-2020, drawing out $62k/year. Super screwed pretty soon. And your withdrawals really need to increase with inflation. A 4% withdrawal "rule" is dangerous without being able to adjust it. Something closer to 3-3.25%/yr is more sustainable.

The easier way to think of this as an analogy called "Mr. Market". Investor sentiment (Mr. Market), not fundamentals, is what makes the market move up and down so much. If Mr. Market gets optimistic and greedy he'll bid prices up higher than they might otherwise be worth. If he gets pessimistic and fearful he'll bid prices lower than their might otherwise be worth. Mr. Market, btw, is you and me. You and I get fearful and greedy and act accordingly.

I retired at 42. Just read the previous few pages to unleash such secret secrets! Or visit Mrmoneymustache.com IF you really want to understand better. If not, keep on scrolling...

I get it. Live below your means. Pay off you debt. Don’t acquire new debt. Use index funds to avoid volatility.

These are all very reasonable principles that most can’t or won’t follow. I often say that most people have the same problems with money, just different numbers of zeros in the problems. I think there are many ways to achieve the goals of early retirement, but most require structure and discipline. I don’t really want early retirement, as I enjoy my work. I do want financial independence. I will have that by following goals suited to my situation for many years now.

Depends on how all that is financed. Is it through leverage? Interest rates are low now, which encourages borrowing, but what happens when they go up. Stock market looks less attractive when the cost of capital rises. Lots of people haven’t experienced high interest rates.

The problem is that as your investments rise so do costs so it’s a false sense of growth.

In this case debt like a mortgage is great to have before the inflation. Only downside is my options with my paycheck come down to two choices. 1)mortgage payment of $2200 2) groceries that now cost $2200

For anyone that isn't sure what early retirement is about, here's an entertaining Ted Talk from Mrmoneymustache. 1100 thumbs up, 18 thumbs down. Yeah, it's that good.

Not true at all, not everybody that can retire early chooses to do so.

This discussion has mixed financial independence and retirement as the same.

That’s a good presentation.

Everything he said is what I did as well.

The only issue I’d have is the 64% .. that would be unobtainable here (or in any big city) due to housing costs.

Unless you lived with your parents... that would be an option. But no way you could save that much due to rent or mortgage repayments. Unless you were on a massive salary .. which maybe he was. He said he worked in Seattle, aren’t the housing costs there astronomical?

Otherwise, a very good philosophy to live by.

rd

Mr Market! Did you read this book? I think it was the first book I read about stocks and it is indeed a good place to start. I think I remember they used the "Mr Market" idea in here.

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Great forum post!

Been doing a lot of research on the subject, most topics have been covered. (As previously mentioned) Social Security only uses your best 35 years, and "working to increase your benefit" is in most cases not going to increase your benefit. The 8% gain in benefit for every year your forgo at age 62, can be looked at an 8% yearly gain in benefit. Not many investments can do that.

I've seen the break even point for taking SS benefits at either 62 or 67 shown as age 76.5. If you live past 76.5 years, you make out better. That said, you have to look at your current health, and family history when considering when to start taking SS.

The Simple Path to Wealth by JL Collins is a fantastic read. The stock market always goes up over time. Corrections happen, but it always goes up over time. The forward is done by MMM.

Check the book out!

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I was talking to my wife about if we can afford to retire. Yes we can but both feel like working is easy money and or fun enough now that we both cut back to working half time.

The extra income plus letting our savings grow will afford us more enjoyment. I understand Mr Mustache is happy without luxuries, eating out, Starbucks, cleaning and lawn service, nice cars etc. but we’d actually prefer nice stuff.

Also Mr Mustache bringing in a lot of income from blogs and speaking etc. just looking it says he’s making $400k per year. Just keep in mind people like him, Dave Ramsey etc are multi millionaires. Sure listen to their advice but be aware that they are able to buy luxury cars, houses etc. if the choose to.
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Rai if there is one thing to summarize all of your posts here, it is that you'll never retire, you don't want people to ever retire early, and retirement means eating canned beans and wearing dirty undies.

Canned beans are actually very healthy for you.

I have been working for the Gov for the last decade (40 now). In another 10yrs, I'll be eligible early retirement. Granted; they have to be offering it, but has been offered in my organization consistently. I would be able to take my pension immediately, and maintain my current health plan (at the same price) for the rest of my life! I don't know that I will pull the trigger then, but I have been saving ~30% of my income in the market in an aggressive portfolio, own 2 vacations rentals with my brother, and my wife and I live well below our means. I would like to be in a position to consider taking the early out whenever it's offered.
My biggest planning concern is bridging the gap from an early retirement to penalty free withdraws from my TSP (401k equivalent) and IRA. My pension will take care of bills and health insurance, and we do pretty good on our rentals. I just haven't figured out how to get that extra couple/few g's a month to get that traveling in... Loving the tread, glad I found it this evening

Thanks for the thread, DadofTwins - just stumbled upon it yesterday after the Ted Talk post. After watching the video and reading a good bit of the thread it seems many here who have shared are, whether intentional or not, in one way or another on a vector aligned to the talk's basic advise of "live below your means." What wasn't in the talk and I didn't see mentioned yet in the thread was a discussion of a tax plan. Understanding your tax payouts and considering how to reduce them are a valid part of a strategy. Income taxes, sales taxes, property taxes, utility taxes, rain tax (yes, we have it here), VAT and/or whatever other hands reach into your pockets. Where you live, where you shop, what you choose to buy/own and what you do all can be looked at through a lens of tax optimization.

-Rob
-visit https://www.kahr.us to get my daughterboard that helps fix WPC pinball resets or my replacement LED display boards for model H & model S Skee Ball

I fully admit I am not as well versed in FIRE and Mrmoneymustache as others, although I did research it a bit based upon this thread. Are there correlations between income and the type of career that you have wether or not you are and adherent of these methodologies? My supposition is that high earners in white collar careers are less likely to fit into these camps, but do not have any firm basis for this.

I did not, but I did read Benjamin Graham's "The Intelligent Investor" which is where Mr. Market originated. It's a bit heavier reading (and old) but quite good.

That's 100% true. And he still spends about $30k a year, the same as he did when he had "only" $700k saved. He posts his yearly spending (and some income info) on his blog. And that's him trying to maximize happiness, not wearing used undies. Speaking of...

USED dirty undies. You forgot that they're always used. That's why you have to retire early - so you can make it to Goodwill early Monday morning and get dibs on the used dirty undie selection.

There's a high percentage of male engineers in the FIRE community. I think that's because a) They make good money, and b) they understand the math. Although plenty of people NOT making lots of money on are the path to FIRE. There are blogs by doctors doing it, and blogs by single moms doing it. It's pretty interesting to hear their stories and see how (and why) they're doing it. Mostly so they can get to Goodwill early. You know, for the dirty undies.

Watch the mrmoneymustache video in post #327.

Same principles apply no matter one's income. He compared a $40k income with a $400k income.

It's more how you live, save and invest than how much you earn. A high earner could have nothing at retirement age if he doesn't plan.

I asked a different question. My question is what is the make up of FIRE/Mrmoneymustache adherents, not if it is applicable. arcyallen provided some insight into that.

This is key, and what most people are missing this knowledge.

As an example, is there any hack on how to obtain residency in a no tax income state like FL before drawing from a 401k?

Well, that's not exactly what you asked originally. You asked nothing of the make up.

But I see it's what you're asking now in order to clarify.

I watched it, but one thing that wasn't mentioned was the cost of healthcare. According to my ADP retirement planner calculator thing (take it for what it's worth), my healthcare is going to run me upwards of $4k/month at retirement.

Healthcare is huge, glad I'm in the position I am in. Without that concern, I am working to build some income to bridge the gap from RE to penalty free withdraws from tax advantaged accounts. Outside of real estate (already operating vacation rentals), or blogging (not much of a writer) what are some ways people are planning to generate income? I have a decent amount in brokerage accounts, that could be put into dividend portfolio, but I'd rather diversify from the market... Male engineer btw

It was, but no need to quibble. Directly, is it 60K a year mechanics, 125K a year engineers, or 300K+ professionals that make up the bulk of this movement? As arcyallen said, I could see engineers being in that sweet spot of income and personality traits for doing this but wanted to ask the question. I get that these principles are applicable to any income level, but wanted to see where the rubber meets the road. I would think that too low of a income would not allow for the percentage of savings to allow you to reach this type of plan, and if you are making a bunch you might have other spending habits and career ambitions where this type of lifestyle would not be as attractive. Just genuinely curious with what types of people this lands with and make up the core of the movement.

Someone posted this on Facebook the other day.

Ironically, the person who posted it does pretty much exactly what the thing says. Lol

When you actually break it down and think about it, it is pretty crazy.

rd

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I have a question on a topic that has always baffled me. Why would someone, in the current low rate environment, pay of their mortgage early? I understand if you are imminently retiring, and don't want the nut. However, for those 5, 10, 15 yrs out, why put extra money towards a mortgage at a sub-4% rate (if your mortgage is more than that, refi now). I have always thought that I could do better than with my money than my mortgage rate, and other than a couple down years I've killed the rate in returns. Is it the guaranteed returns, reduced burden of having a big debt, or something else I'm missing?

The quicker you pay it, the less you pay.

If you pay it off 10 years early, you save 10,000s of bucks.

Of course, the rates are so low now ... you can get 3.5% here.

When I bought my first house in 1987/88 (I was 17/18) the mortgage rate was 18.8%. Lollll. Crazy.

rd

Whoa. We just pulled the trigger on a refi at 2.75%.

At 18.8%, this would be me.

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