Random question...
This is a knowing then what I know now question...
Pretend you are 18 years old and you know everything that we talk about here that pertains to ERE. What would you do?
For instance, where would you live, what would you do for work, would you go to college, what skills would you start learning, what life experiences would you have while you are young, etc, etc, etc?????
Hope this one provokes some good discussion!
Excellent thread idea.
I'd sign up as a union carpentry apprentice at $17/hr. Much contrary to ERE principles, I'd own a truck, but that would be required for work. I'd get a 28' boat and live aboard eventually doing some long cruises. The experiences here will beat anything you can do with a plane ticket and a backpack.
After 4 years, I'd be a journey man, now at $35-40/hour. I'd build and live in a tiny house and contract around the country pulling my house around; after selling the boat.
I'd think very carefully about children and marriage: delay, delay! [People really do get wiser with age.]
Once I got tired of hammering houses together, I'd go to college for an engineering degree; likely in a field that somehow relates to civil engineering---basically anything where your end-product is self-explanatory to your mom. ("I write reports and talk on the phone a lot" isn't it.)
Also, learn to brew beer. This is perhaps the most important ;-D
"Pretend you are 18 years old and you know everything that we talk about here that pertains to ERE. What would you do?"
Oooh, I love these things because I'm in a position to act on the advice :) Excited to see other answers.
I'd go to the best engineering school I could get into (MIT, Stanford, CMU, Caltech, Berkeley, or a top state school) and study Computer Science. If I didn't get into any of those, I would get a 4.0 freshman year somewhere else and then transfer in. I would live in the dorms all four years (important for building relationships) and focus all of my excess energy on starting companies with my classmates. Rather than committing to any one idea, I would roll the dice many times with many small groups of people -- and alone. I would not go out of my way to "network" or consider VCs. I would just work with my friends and the people I liked working with from class projects. I would work on web/mobile startups, and other projects that require no startup capital.
I would graduate in exactly four years, unless one of the startups goes big time, in which case I'd drop out. During college summers I'd go all out on a startup... and/or get a "big name" internship at a place like Microsoft, Google, Facebook, etc. By the end of college, I'd make sure I had at least one or two of these internships.
I would probably save studying abroad and traveling for after ERE. But I would make time for hanging out with friends and dating. I would not be concerned with my GPA during college, but instead I would make sure I learned things that would help my startups or that were interesting.
Best case: one of the 10+ startups I try during school solves the money thing.
Medium case: move to San Francisco and consult at $50-150/hr in a niche that I become an expert in during a startup attempt
Worst case: leverage the internships and startup experience into a software engineering job at a big name place and a $80k/yr salary. Pay off debt immediately and then live off 80% of that until ERE (give up on startups at this point if it still hasn't happened).
PS: In case you couldn't tell, I'm pretty annoyed at myself for not being more entrepreneurial during college. It's seriously the perfect environment! Surrounded by smart, bored people who would eagerly work on a fun project for free... yet will cost you $100k/yr to employ later in life.
PPS: I think engineering is fun. If you don't, this would be hard.
So far I have lived my "PERFECT ERE" (minus some life circumstances that I took out debt for) life so far! I am 22 now but had my own conception to retire early (though not as clear and concise until finding Jacob's blob and reading the ERE book!) since 17-18. I decided to forego the expensive university education for Lawrence conservatory (in wisconsin) and enrolled in a community college to become a registered nurse. During my prerequisite classes I took a free course to become "nurse's aide" for free and was making $11 an hour instead of minimum wage during my schooling. I paid my through school mostly and the only thing I would change about my course is to simply work more hours instead of taking on debt. Of course, you can't always tell what'll happen in life! But nevertheless, I have graduated nursing school (RN) at 22 and due to the economy have had to move for a job but now I am living on about $800-850 a month, live 3 blocks from work, 1 block from the bank, and 1/2 mile from the grocery store. In fact my apartment is even more than I need so in the future hopefully I can even reduce that expense. Starting out at 22 I am making 20.74 plus $1/hr for evening hours (past 3 pm). After my 6 weeks or so of orientation that should go up and after a year that will go much higher (30-45) when I either get a different job, negotiate a higher wage, or take a travel contract. Though I will work longer than 5 years because I like working as a hospital nurse, I know that most nurses burn out after 5-10 years, which will be perfect cause then I will have the resources to get out. Also nursing offers an unusually higher level of pay and autonomy of lifestyle. For instance, after I am a 5 years experienced RN in the ER (my main area), I will be able to take one 3 month contract with housing paid for, travel paid for, plus $35-50 an hours base pay working 3 days (12 hours a day) a week. That one contract alone would cover 2 years expenses but if I simply work that one contract a year I will increase my nest egg substantially travel for free (I love traveling for sure) and have everything paid for. It is sad because Soooo many nurses are HORRIBLE with money but they make a good wage. I think it's the emotional nature of nurses tied in with the constant message that to feel better you must buy shit.
Now I have not done everything perfect but here is how I would lay out a plan for an 18 year old to do everything PERFECT to retire by 28 minimum (or less if they are more frugal or more willing to put in crazy overtime). And yes I think becoming a RN is the perfect career path for ERE:
1. Don't take ANY debt no matter what
2. Go to a community college to become an RN. It only take 3 years minimum, you have your license 1 year earlier, it's cheaper (can work your way through), and if you want your BSN (bachelors in nursing) you can have the hospital pay for it for you AFTER you get a job.
3. Drop out of high school at 16 get a GED and take the 2 years of nursing school prereqs (or 1 year if you are REALLY motivated, but I would recommend 2 since you will still only by the time you ENTER nursing school).
4. Apply for nursing schools by 18 (make sure you become a CNA, have straight A's, relevant volunteer work experience, etc.)
5. Get into RN school and pass by 19-20.
6. Get a HOSPITAL nursing job, apply and move anywhere in the country you have to, but just take the first hospital job you can find.
7. Making 20-25 an hour at this point. After the 1st year your options skyrocket: can take travel contracts, start or have finished a BSN, move to a different and higher paying city (SF or NYC).
8. DO NOT spend your money as you will be making a lot of it and WILL be under stress. DO NOT spend money to "make yourself feel better."
9. Live very cheaply, find an apartment close to work and grocery, once in the new town park your car at the hospital and WALK everywhere, cancel your insurance until you move to the next job or town.
10. When you start to feel burnt out or have other career ambitions or want to take a year off DO so. You will have the nest egg by 25-27 for this.
11. If you find another young nurse then that's even better, just make sure she's along with the plan. Then that's great though cause both can take a travel contract in the same place, travel there, work 3 months and make 4-5 years of living expenses with just a little overtime!
12. For your speciality make SURE you are staying in the hospital in bedside nursing care with a high level of acuity. This pays the highest. Think labor and delivery, ICU, trauma, ER, surgery, etc.
13. DO NOT buy a house or a new car as soon as you graduate and are "making the big bucks" STUPID STUPID STUPID (half my class of 2010 has already done this!!!).
14. DO NOT tell your co-workers what you are doing, they simply won't understand.
15. Last but not least, at 28 you can laugh at anything that happens at work because when you see the 50-60 year old doctors and nurses slogging through a tough shift, burnt out to hell, you know you can walk away tommorow if you start feeling like they do!
I cannot honestly say I would have changed anything on my life.
I would not trade anything I have done, for something else I could have done instead.
Maybe add this: Concentrate more on helping the less fortunate.
Possibly have more compassion for my fellow man.
Well there was this girl on the bus ... oh, different subject...
OK, I would still go to college (after all, I graduated from a polytechnic high school, so had lots of exposure to various trades), but I would cut down the course work hours so I could better cope with it and/or change my major sooner.
Realize this is in the '80s, so we've just seen massive inflation rates and very high unemployment, so going to college and being flexible in career choices is a winning strategy even if we can't find jobs related to our majors.
If I didn't go to college, then becoming a machinist or an electrician are the ways to go. Machinist first as it's less likely to be a fatal occupation.
Fun question!
I would have skipped school and the military and learned how to do computer systems work first. I would have gotten a job at a startup like the one I have now and learned enough to start the business I'm about to start now, at 27.
I would have started by buying a van while I still had a job and learning how to live in it. Then once I had the techniques down, I would have quit the job and focused on the business. Once I built up enough passive income, I would learn how to live with just the stuff I'm carrying, leave the van in the States and travel the world.
Once I found my soul mate, I'd bring her back and buy a big house in a city suburb and rent out the other bedrooms. I'd buy more houses as I could afford them, and settle into a nice, comfortable landlording/computer business.
VinceG, your first two paragraphs closely resemble my plan. Although I am (reluctantly) staying in school..
The reason for my suggestions, i.e. not computer science, is the risk that anything that can travel via phone, fax, and network is likely ultimately to go the same way as anything that could travel via shipping container.
Eventually, it will even be possible to outsource surgery (via robotic interfaces). I have a harder time imagining it will be possible to outsource plumbing.
I think the middle class office jobs are going to same way as the manufacturing jobs. So the pertinent vocation question is:
Do you foresee global competition?
@ Jacob - So would you say that engineering, one of the trades, or something like nursing as MichaelAndrew mentioned, would be the best choice for an ERE job?
@jeremy - It depends on what kind of engineering, trade, etc.
Vocations that can't be outsourced.
Petroleum engineering
Plumbing
EMT
Vocations that can [eventually] be outsourced.
Electrical engineering
Machining
Surgery
It's a question of speed and scale.
Some vocations are protected by legislative trade barriers (accounting, law, medicine)... I wouldn't count on those holding up.
Good insight Jacob. Boy, I wish I could start over and enter carpentry. Heck, I might just do that. Right now I'm stuck in university and have no idea what to pursue as my major.
Doesn't anyone think that as currencies around the world rise against the dollar that we will eventually see a return of manufacturing in the US?
And as we get closer to peak oil? Which is what transports our "cheap" goods around the world?
I think part of how I started was good, but hit a few bumps (or 1 big one now called EX-) along the way.
DO - drop HS and dual enroll, have AA and EMT cert @ 18. What they don't tell you is that its nearly impossible to get an EMT job until your 21 for insurance reasons. (at least in my area)
DID - Go Army, chose National Guard.
DO - Join Airforce & volunteer to go overseas. The $ is pretty nice. Sign for 6 years then transfer to air guard. Save the combat bonuses, its all tax free. The Airforce generally has nicer living conditions and are in safer areas. Yeah Iraq and Kuwait arn't all that fun but last time I went I saved enough to buy and renovate my new home, no mortgage is great. Only $800/yr in taxes.
DO - Stay in the guard, 1 weekend a month 2 weeks a year. In a few years it will be my only "real" job. I only have 8 more years to qualify for retirement benefits so why not?
DON'T - Listen to parents saying you HAVE to get a 4 year degree & sign up for online classes for business management thinking that a degree in something your not interested in will yield a high paying job.
DON'T - Get student loans & credit cards in only your name then let affore mentioned EX charge them up, move out taking virtually everything you own while your helping clean up after a hurricane and leave you with all the debt. It takes a while to pay it all off.
DO - Watch cooking shows, not on cable but over the airwaves, after you see enough combos you can start to make things up while seeing whats on sale at the grocery store.
DO - Start taking classes that you ARE interested in, let your GI bill pay for it all.
DO - Take care of you body.
DON'T - Go off and do stupid things that require surgery to fix.
DO - Talk to SO about finances and goals. It takes time to find "the one" and causes heartache when you think you have but can't come to a middle ground on finances.
Good Luck!
No matter where you go the advice is always the same...
Marry someone that has the same financial beliefs as you...
And never get divorced...
Divorce wipes out wealth like no other...
After looking at a lot of stats and research it seems best to get married after the age of 25...
I like how Jacob put it best in his first comment of this thread..... "delay, delay, delay" ;-)
I don't know, the journey is more important than the destination... At 18 I wouldn't have appreciated freedom because I never experienced slavery. [Of topic, any ever read "Richest Man in Babylon"? There is a great chapter about a slaver earning his freedom.]
Buuuut, I probably would have got on a hot shot fire crew, make 20-30k for 5 months, then go to either college (mostly just to drink and chase girls) and/or work at a ski area.
Would buy an acre and a dirty wooden shack right on the border of public land... Cut firewood and write manifestos and short stories. :D
> Doesn't anyone think that as currencies around the world
> rise against the dollar that we will eventually see a
> return of manufacturing in the US?
Only if we become the source of ideas worth continuing to manufacture. Historically, the US edge is a combination of stable government and better ideas. We've still got a stable (but contentious) government, but other nations have the capacity for better ideas (Poland, for example).
> And as we get closer to peak oil? Which is what transports
> our "cheap" goods around the world?
Arabic dhows and Chinese junks still ply the waters of the Indian Ocean. Do not underestimate the ability for cargo to continue being transported across the sea!
What will change is the speed & reliability of delivery.
I both like Melissa and Jacob's ideas.
I think getting hands-on experience before continuing to getting theoretical credentials would pay off immensely.
I think this could be applied to many fields: mechanics/mechanical engineering, EMT/nurse/doctor, social services (not versed in the specific options), etc.
Disclaimer: I have seen this path go wrong multiple times and it was because of drugs. So I suppose like all ventures, keep a level head.
@Jeremymday--Love this thread idea, I've actually thought about this many times in my head before...the perpetual "What if" roller coaster. :)
I'd have to echo the sentiments of many others that posted above--hindsight is 20/20, the fun is in the journey, etc, yada-yada. At the "ripe old age" of 26, I'm able to look back and reflect a bit now. I have a 19 year old brother I'm trying to advise on the same principles mentioned here, actually. Would I have gone to college? My parents paid for it (lucky me, I know), so I probably still would have done college. My degree was in Economics, and I truly enjoyed it--I took a few C.S. courses and hated every minute of it, so engineering and C.S. would not be an option. I would possibly do accounting, but that field would be terribly boring as a career for even a few years.
Now that I've said all of that, what would I do? I would do one of the following plans:
a.)Learn a trade such as: Electical, plumbing, or carpentry (in that order), save 80-90% of my income, then start/buy a business pertaining to that trade once I'm 27-28. By the time you're 30, you have everybody working for you and you could "work" 5-10 hours per week checking on things and being more or less retired making six-figures every year for as long as you wanted. You could then sell the business for a nice profit at the time of your liking.
b.)Go to college, go in the military afterwards and start as an officer, save your $$, come back, start a business of your choice, possibly pertaining to said trade(s) stated above in section a. There's a plethora of things you could be trained for in the military, on their dollar.
c.)If you can stomach it, work in restaurants, preferably in a state where all minimum wage workers are paid the same (i.e. not California, Arizona, etc.). Some states allow workers that are compensated with tips to be paid a lower hourly wage, sometimes in the $2-3/hr range. I'd start as a server/busser making $35-40k a year at a decent restaurant, and work my way into bartending. As a bartender you should be able to make a minimum of $50-60k per year, or more working 4 days a week or less. Additionally, a good chunk of your money is cash, and is difficult to be taxed by Uncle Sam. Live a frugal lifestyle, save your income, no student loans to speak of, and you're done by 30+/-. At a bar I used to work at, most of the bartenders were making $6-7k per month AFTER taxes.
I've always been a fan of the trades, such an applicable skill and you get paid while you learn...does it get better than that???
This is a tough one. I have absolutely no regrets about going to university or my six years as a monk. But if I could advise my younger self, I would have suggested taking a pass on law school and investing in stocks much earlier (I had $25K saved by 22 that I used for tuition.) I probably would have been better served studying zymurgy at UC Davis and opening a brew pub because then I could have made a living drinking beer and eating pub grub to my hearts content. Ultimately, I don't think it matters so much what you do to establish your savings as it does to save a lot. I would tell my younger self to save 50% of my take home at a minimum, and learn to live on the other half.
Once a plumber or carpenter gets a good set of tools and a truck paid for, his major overhead is done. Of course insurance and normal business costs must be factored. If the plumber or carpenter is really well skilled, he commands excellent wages and is sought after through his reputation. From that point on, he is driving his own train. He can make as much or as little as he wants. He probably will have a helper that he uses on the bigger jobs. He faces aging, which will eventually limit his physical abilities to do the job.
Lets see some of his earnings potentials:
New Water Line from Meter to House---
Dig trench with trencher, 75' long and 36" deep. Lay 1" PEX line from meter to house valve. Install yard faucet (since the line is dug up anyway). Install shutoff's and cover trench.
Time Required: Six Hours Charge: $1,750.00 parts and labor
Install New Shower/Tub Faucet----
Open wall, remove old faucet, prepare and install lines for new faucet and shower head, solder and assemble, test faucet.
Time Required: Two Hours Charge $450.00 parts and labor
Install New Water Heater----
Disconnect, drain, and remove old heater. Inspect gas or electric supply and install new heater. Light or turn on, and test after filling.
Time Required: Two Hours Charge: $500-$900.
So you see in a couple of days our friendly plumber has earned himself around $3000.00 after paying his helper and expenses.
Plumbing only requires a little training and theory, and some experience with a licensed plumber to learn.
The Carpenter has a similar way to go. These days, a lot of people have absolutely no clue on how to do this stuff. No one's dad taught them how. Many of the more enlightened ones learned it on their own.
Look at the potential in doing it.
Right on Jacob!!!!
Plumber and carpenter can't be outsourced, yes. But they are somewhat tied to housing growth and availability of capital... The vast majority of contractors in my neighborhood are grossly underemployed and always complaining about lack of work.
There are so many now, due to the overgrowth and oversupply of housing (at least in the west US). Lots of competition now that the belt is tightening.
EMTs and nurses seem very stable... But am I the only one who thinks a full on collapse and complete reform (real, not the mandated monopoly of current "reform") of health care is coming?
Can anyone else think of something that is not likely to change rapidly (ie: currently in boom, like heath), not saturated with competition (post boom, contracting), not likely to become obsolete (auto-mechanic) and not in danger of outsourcing?
This is fun. It seems clear that vocational training's opportunity cost is worth it, but college's isn't. The sweet spot seems to be in the skilled trades; carpentry and nursing are good but I'd go for master auto mechanic.
A perfect game would also work the system to avoid ever paying rent or income tax.
16-18: high school, work in a job that teaches building maintenance (handyman's assistant, janitor, etc). Read the ERE book or equivalent. Buy a durable bike and learn to ride it. Live with family in a city or town where real estate is cheap.
19-20: associate's degree at a community college in automotive mechanics and coursework in business management. Continue working as a handyman, avoid debt, and save $15k+ cash.
20: Pay (<$5k) for certification as a luxury car tech. Buy a used set of tools in cash ($10k, deductible). Get a job at a dealership within biking distance. Stockpile cash. Read a book about landlording.
21: Use a first time homebuyer program to buy a quadplex. Operate the property as a rental, live in the smallest unit, manage it yourself, and aim to at least break even. Put in a garden and a workshop.
22-25: Work through the mechanic ranks and invest $50k+/year. Use 401ks, IRAs, and real estate depreciation to stay in the 0% tax bracket.
25: 200k+ invested; retire, live on $8k/year investment income (4% SWR) which is still in the 0% tax bracket, and lavish by ERE standards since housing is covered. If rents have increased the quadplex will be solidly in the black by now, but you still have the depreciation deduction. Sell the mechanics tools and recoup the $10k. Either stay in the rental unit or sell it and use the equity to buy a tiny house. Do something nice for the family you crashed with earlier :)
@JohnnyH - A morbid suggestion of something that's not going to out of style and probably will see boom times no matter how well the future is looking: funeral services.
@ KevinW: I looked into buying a quad instead of a single unit, part of the problem was, that the 1st time homebuyers credit didn't cover multiple units. So I ended up buying 1/4 of a quad. Now I have 1 promise and one maybe from other owners to sell to me when they're ready to leave. It's not a bad location but no room for a shed/workshop or garden :( I do intend on buying more units in my area for rentals, 3-4 should be enough to live off (given the current prices vs current and future projected rental values) without spending all my time running around to fix what tenants break.
I'll echo the 'good thread' sentiment. Really has me thinking in more detail about plans for the future.
@Melissa
I wasn't thinking of the credit, but rather something like a FHA, HUD, or state-run mortgage insurance program. My recollection was that you could use those for a multifamily unit as long as you lived there yourself. I could be mistaken on that point, though, I looked that up a few years ago and the rules change all the time.
Another consideration for self employment that requires no formal education, minimal tools, and virtually no overhead is computer support.
Pluses:
Can be started at any age.
Most tools are free software.
Microsoft provides all of their software for about $300/year.
If you're patient, marketing can be via pro-bono and word-of-mouth.
The client market is still growing. Very few folks want to know how their computer works - they just want it to work.
When you're ready to ERE, you can scale back your clients as much as you want.
Minuses:
Can be risky. You don't want to be the tech that wipes the hard drive without ensuring the data is backed up first.
If you get into servers, you can hold the life of the business in your hands.
The biggest minus is with "cloud computing". I do see a day where computer techs will not be needed anymore. Cloud devices (iPad like devices) will proliferate and will be easily replaceable. For the same reason that you can't find a TV repair guy anymore, soon, you won't be able to find a computer tech. That said, I think there is still plenty of money to be made in this field.
KevinW: Gotcha, my plan for financing my next unit is to use VA loan. Move into it while finishing the renovating. The other units in my area are renting for $500-$600, the ones I'm looking to buy are all under 50K and don't need significant fixing up. The rental from the paid for unit should cover the mortgage on the new unit and then some. The new one gets paid off in just a few years at a very reasonable interest rate & I start looking for a new unit. Repeat a few times & done. :)
Added bonus: the little one is getting old enough to actually help instead of saying shes helping. I'm trying to teach her the same stuff (and more!) that I learned about fixing things from my Dad. Keeps her options open.
@RMuir: Yes, but doing this for individuals is also one of the most annoying professions... Spending 4 wait filled hours de-crappifying someone's $300 DELL Windows XP Home install (because a fresh boot install terrifies them [they'll have to reinstall their pirated RealPlayer Gold!]) is not rewarding. And don't even think about charging them more than $40... If you live in a fairly population dense area, and have ample space (where you can work on 5 at once) it would be great for an enterprising teen... I could make a living at it no doubt, but I'd probably have rage issues. ;)
@Jacob: lol, excellent point. Undertaker, what a remarkably stable position. ;)
This is a great discussion, and I don't mean to interject, but I was thinking about the advice you guys are giving and how it relates to my situation.
50% of my university education is covered by scholarships and the other 50% is covered by my parents. My parents also pay for my housing. If I were not in university (i.e. in the trades), they would not support me like this.
Given that, is university worth the opportunity cost for me? I'm guessing it is, especially if I get a degree in a high-paying field. I'm leaning towards comp-sci or economics (although my interest in economics has been slipping. I'm starting to realize how messed up our economy is).
What do you think?
Keep this discussion going! It's great reading. Thanks everyone.
@Jacob
It's already gone DIY
a few friends could put you in it, have few beers in your honor, and then all take a leak on it before planting.
@gibberade - "Free" is worth it. You got two years to go? Stick it out (unless you're going crazy currently). Is there any possibility to convince the parents to support you if you went with a trade? A salary comparison maybe?
@HSpencer - I guess it's a recession proof business, but not depression proof.
More than that unfortunately. I only started university this September. So 3.5 - 4 more years.
@gibberade, In those circumstances, I'd recommend sticking it out, too. College is one of the easiest times to pick up tips to learn about living on the cheap. In other environments, everyone has a job so "why not go spend money?!"
I enjoyed college the most when I was deeply involved in a club that was completely independent to my major. So, I'm inclined to recommend what I enjoyed most ;-)
@gibberade-Definitely stick with it if it only costs you time. Unless you can't stand it, college is worth it for you. Just pick an applicable major (sorry, art history might be interesting but it won't make you $$), and have a plan. Being on these forums and knowing the ERE way of life should have you well on your way. I majored in economics and I'll be honest--if you want a job in the field a bachelor's rarely cuts it. If you like CS there is a pile of money to be had at the end of that rainbow.
@gibberade: also could you get a part-time job so you could save some while you're in school?
My recommendation -
1. Forget trying to predict the future of what jobs will be around.
2. Follow your passion, if you love your work, you won't need to retire. Trades, arts, start your own company, etc. Never, ever quit because determination is the main predictor of success many ventures (and intelligence is a very bad predictor).
3. Do your passion right out of school - start your own company, make art, etc. Don't *settle* for an office job to *pay the bills*.
4. Have a cost of living less than x% of your income, where x% lets you save up rapidly.
5. Don't take debt for dumb personal things as it makes 4 very difficult.
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