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Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by Monello
You have to build income streams. These work for you, even while you are at leisure.
It helps if you are debt free.
1 thing that helped me was accepting what I have. I don't have any desire to impress the Jones family.
I turn 65 this month. I have been retired for over a decade. In that time I traveled extensively.
A lot of how I got where I am at today was pure luck. By that, I mean it wasn't deliberate, especially in my early years. Here's how my journey went. FWIW, if I can achieve this, no reason why others can't also.
Was in the military. Bought homes along the way. I kept them as rentals as I was transferred. Rental income = income stream #1. (Being a landlord isn't as simple as it sounds)
Retired from the military. Military pension = income stream #2.
I qualified for VA benefits. VA benefits = income stream #3.
Social security = income stream #4.
IRA disbursements = income stream #5
If done properly, income stream #1 also yields appreciation. IS1 & IS5 are variable. IS2, IS3 & IS4 are pretty much guaranteed.
I was on bigger pockets and there was a guy who did what you did. Maybe it was you. He kept every property he bought as a rental each time he got transferred in the military.
How do you manage them spread out?
I know financial independence is a dream that many people have, but few are able to attain. The reality is that most people have to work for someone else, and finding a good job in this economy is extremely challenging.
Have any of you managed to escape the rat race and build a reliable income source so you can leave your 9-5 job?
If so, what do you do and how did you get there?
If you're not 100% financially independent, do you have a consistent side income?
Looking for some ideas.
This has to be AI with that goofy question and font.
I think one must define terms a little bit first. To me, true financial independence is a net worth of at least $5M such that you could live a reasonable and fairly carefree middle-class lifestyle just off some low-risk earnings from that wealth, like the interest on savings. At 5% interest on $5M, you would have $250K/yr to live off basically in perpetuity. Toward the end of your life if you didn't care about heirs, you could draw it down further as needed. In that situation you would not be dependent on Social Security, either.
I don't see a scenario where we'll ever make it there ... I had some heavy medical expenses 20 years ago that netted out to a very late start in retirement savings. But I could probably get by if I stopped working now (age 67). Happily, I'm enjoying my work too much and I'm at an all-time high in earnings. And we've been debt-free for about 12 years now. So for example we can live in our 2,000 sq ft home for substantially less than we could rent anywhere. Every year I work we save a bit more, etc. I'm sure that in the context of today's Western economies, that could be considered "financial independence". It's just that if they manage to gut Social Security or Medicare, or we have a really huge medical situation again, we could end up forfeiting our assets to the state and moving into a state-subsidized senior home, or in some conceivable political scenarios, something worse than that.
I think REAL financial independence and self-determination requires more padding than we have. Still -- I'm certainly grateful for what we have and understand that it's more than an increasing number of people will ever have, given my understanding of current economic and political trends in the West.
As to my career arc -- I work in software architecture and development and have been an independent consultant most of my adult life, starting in 1983 with a couple of brief forays over the years into W2 work (both of which I regret). I made a point to find work niches that were not amenable to offshoring or other cheapening influences. I am currently one of a dozen or so people on the planet with experience in a particular fintech vertical at a senior level, so if someone wants to build or improve business in that realm, I can demand top dollar. And I'd calculate that 75% of that was dumb luck (personality characteristics and interests that fit well with the work), 20% persistence / "perspiration" and 5% skill (although that 5% is very honed).
Yes, retired at 57. Overfunded, can’t spend all that we make. Currently 30% equities, 70% bonds. No pension. The bonds throw off 150%+ of our expense needs.
Work hard, save til it hurts. Best to be poor young, than poor old.
So true!!!!
We are financially independent since retiring 9 years ago at 70. We still travel, enjoy 2 theater subscriptions as well as subscription to Cincinnati Pops. Our investments have steadily grown since retirement.
But, can I say we are truly FI? Only time will tell. Everything depends on what inflation and our health do to us in the future. We planned for this, but let's see what happens.
Baring something catastrophic, our financial advisor and both of us strongly believe we will be OK
It isn't about the economy, it's about having a skill that pays well, and one that people want. I made really good money as a Toyota/Mazda/Volvo/Fiat/Alpha Romeo dealership technician back in the day. It was a job I was good at and loved too, since I was apparently born a car guy. But I've had other jobs I loved that paid well too, and I've had jobs that paid poorly but I still loved. That's really the secret. It's not a 9-5 grind if you're happy and paid well.
Pay isn't important if you enjoy what you're doing. There is a huge gulf between being financially independent and being happy. One does not necessarily lead to the other.
You have to build income streams. These work for you, even while you are at leisure.
It helps if you are debt free.
1 thing that helped me was accepting what I have. I don't have any desire to impress the Jones family.
I turn 65 this month. I have been retired for over a decade. In that time I traveled extensively.
A lot of how I got where I am at today was pure luck. By that, I mean it wasn't deliberate, especially in my early years. Here's how my journey went. FWIW, if I can achieve this, no reason why others can't also.
Was in the military. Bought homes along the way. I kept them as rentals as I was transferred. Rental income = income stream #1. (Being a landlord isn't as simple as it sounds)
Retired from the military. Military pension = income stream #2.
I qualified for VA benefits. VA benefits = income stream #3.
Social security = income stream #4.
IRA disbursements = income stream #5
If done properly, income stream #1 also yields appreciation. IS1 & IS5 are variable. IS2, IS3 & IS4 are pretty much guaranteed.
I agree with this. My early retirement went pretty much the same way. My DH and I retired in our early to mid 50s. It didn't happen overnight, and in the early years was not really according to any plan, just how life went. As I got into my late 30s, things began to come into focus, and I could build on my early successes by continually finding ways to eventually get ahead.
I started in the military, although not for long enough for a pension, just 4 years. After that I worked for a municipal employer for 25 years and earned a defined benefit pension (income stream #1). I got divorced about 5 years into that job.
After my divorce, I eventually met and married a man who lived debt-free and owned a small home "almost outright" in his 40s. He lived a frugal lifestyle and didn't aspire to live beyond his means. He worked as a wage slave to a government entity and earned a defined benefit pension (income stream #2) while funding his own 457 account (income stream #3).
Prior to this marriage, I purchased a home and sold it at a high appreciation not once, but twice, by timing the housing market, and he moved into my larger home when we married and rented out his little home (income stream #4).
When we decided to retire, at 51 and 56. I did the math and figured out that with a move cross-country to a lower COL state we would save at least $17k per year (pseudo-income stream #5).
At retirement, 11 years prior to taking SS, I purchased a temporary annuity (income stream #6) to bolster my income between retirement and SS by leveraging a portion of my pension, essentially reducing my long-term pension to cover the pre-SS gap.
At 62, my annuity ran out (as planned) and IS#6, ended, just as my SS (income stream #7) began. We had been using my husband's 457 as his bridge to SS, and it had benefitted from stock market gains allowing him to delay SS until 67. As the 457 (IS#3) ended, his SS (IS #7) began.
We grew tired of owning a property cross-country (his rental house) and we sold it and rolled the money in a 1031 rollover to purchase a small vacation rental for cash in a resort area near us. This made IS #4 (rental income) much more lucrative and gave us a place to vacation. We eventually grew tired of owning a vacation rental and decided that the market timing was right for us to sell the rental at double what we paid for it (we made many small improvements). That profit is now invested as income stream #8, so IS #8 replaces IS #4.
Basically, it was a matter of accumulating streams of income as you go and phasing them in and out when the timing is right. Some things, like buying and selling a home or rental property based upon the housing market, rather than a person's actual need or desire to move, is not on some people's radar, but one needs to be analytical about money, rather than sentimental. We looked at our whole financial picture of income and assets and how to layer them and shift them, turning them on and off as needed, to form a levelized income over the 30+ years of our future retirement. With the pensions and SS, our basic "needs" are paid for with COLA protection, and our "wants" (travel, renovation, hobbies) come out of our investments (rental, stock market, and fixed income). The better our investments do, the more fun we can have in retirement. After these 14 years of retirement, we are living a much better lifestyle than when we were working, and we're still in our 60s. Neither of us were wealthy, in fact I grew up quite poor, and until my divorce lived barely paycheck to paycheck. Neither of us inherited anything. We each never made over 6 figures in our career, although I was very close at retirement, DH's working income was significantly lower. The same process could be accomplished with 401Ks rather than pensions, but requires diligent saving, where our defined benefit contributions were mandatory rather than voluntary.
Last edited by TheShadow; 05-05-2024 at 09:50 AM..
...but one needs to be analytical about money, rather than sentimental. We looked at our whole financial picture of income and assets and how to layer them and shift them, turning them on and off as needed, to form a levelized income over the 30+ years of our future retirement. .
You've done a great job. As you point out, the key is application of your IQ points to the problem, rather than just floating though life with a "whatever" mindset.
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