Resign on a small sum

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thrifty++
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Resign on a small sum

Post by thrifty++ » Tue Jan 24, 2017 4:42 am

I am wondering whether any people on here have resigned on a "smaller" sum of money. In saying smaller I am thinking something less than say $150k. This is no small sum of money by any means but perhaps compared to many on here who seem to retire with something like $700k or more of net worth, which is quite comfortable, so I am wondering if anyone has unplugged earlier> And if so how have you found it?

Did
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Re: Resign on a small sum

Post by Did » Tue Jan 24, 2017 5:11 am

Loads of people quit with nothing. Heaps of ways of escaping without saving. Many escapees don't ever touch their stash. You can try a so-called lifestyle business, or more realistically work remotely, or in something you enjoy, commercalise hobbies, work for a while and then time off: heaps of options. The ERE side of it dare I say would enable you to do these things due to your increased efficiency and lack of waste.

JanFromBelgium
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Re: Resign on a small sum

Post by JanFromBelgium » Tue Jan 24, 2017 5:19 am

We (myself 56, wife 49) are considering to pull the plug at about 300000 euro net worth (hopefully in about 2 years from now). As soon as I've left the cubicle, I will start as a city & travel guide (following certificate courses now) which is something I'd love to do and which should also generate some extra income. My wife has no plans yet but she'll find plenty of activities, no worries there!

At the 4% WR rule, we'll be able to pay our rent & related expenses indefinitely. As we are Europeans (still) benefiting from a reasonably generous social security buffer (2 pensions, health insurance fully provided, employer pension plan), the social security sum covers the rest of our expenses and even leaves us a small monthly savings sum. However, this might only be doable over here. I reckon you would need a lot more in the US to just cover for lower pensions, high health costs, etc?

Hope to hear from others too that are already ERE on a below 500000 $/€ sum !

greetings from Belgium!

Jan

Did
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Re: Resign on a small sum

Post by Did » Tue Jan 24, 2017 5:30 am

@Jan That's about where we are as a couple. So not loads. You can read my journal if you are interested. What does it mean practically? If you want to spend more you just earn it. My wife does some remote work. I am looking at reskilling to work remotely as I need to. One thing is for sure: I'm not returning to the tower of terror.

trailblazer
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Re: Resign on a small sum

Post by trailblazer » Tue Jan 24, 2017 11:06 am

@Jan/thrifty++ I also hope to hear from others. This is a great question. At some point going above 300 to 500k (or even 150k) starts to feel less like ERE and more like bogleheads light :D (no offense to bogleheads - still far better than the approach taken by the masses and was my gateway to ERE)

@Did "tower of terror" is good term for it

I'm getting very close to resigning with about 330k usd - see journal for details. I think of 150k of that as being core survival fund and plan to be frugal but not overthink things with the >150k portion until/if it is gone. Something about 150k makes me feel just secure enough.

I've twice quit "good" full-time jobs with no backup in place and no real savings. Both times an innate problem solving/opportunity spotting ability kicked in (kind of like an adrenaline shot) and I quickly figured out a path. This heightened ability went a away as soon as I found the next full time gig. It wouldn't have kicked in without taking the leap of faith.

Curious to see what kicks in now that I'll be quitting with some modest assets to my name. I think of the funds more as "working capital" as opposed to never earn again funds.

thrifty++
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Re: Resign on a small sum

Post by thrifty++ » Tue Jan 24, 2017 11:07 pm

JanFromBelgium wrote:We (myself 56, wife 49) are considering to pull the plug at about 300000 euro net worth (hopefully in about 2 years from now). As soon as I've left the cubicle, I will start as a city & travel guide (following certificate courses now) which is something I'd love to do and which should also generate some extra income.

At the 4% WR rule, we'll be able to pay our rent & related expenses indefinitely. As we are Europeans (still) benefiting from a reasonably generous social security buffer (2 pensions, health insurance fully provided, employer pension plan), the social security sum covers the rest of our expenses and even leaves us a small monthly savings sum.
Wow thats pretty awesome you can meet 4% at that. You must be quite extreme frugal. But also I am thinking rent. Is rent quite cheap where you are?

JanFromBelgium
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Re: Resign on a small sum

Post by JanFromBelgium » Wed Jan 25, 2017 2:49 am

@thrifty To be clear on the 4%: we need about 1000 euro/month to pay for rent, electricity and heating. 4 % of 300k euro would about cover that. For the rest of our living costs: we both will have pensions (we're still the 'lucky' ones, civil servant pensions are better than others). My wife can take up to 7 years of absence with still a basic allowance paid, and after that she can go on pre-pension. I'm planning to quit the job in two years and earn some income as a city guide. If for some reason, that would not work out, I'll take interim jobs as a librarian (my expertise). The library sector here is getting rid of long-term contracts, and hires more and more temps, so why not take advantage of this situation and call the shots myself :) Temporary contracts are a blessing for people who don't need the full-time paycheck anymore and are just looking for an extra euro here and there.

Rent in Belgium is cheap in the countryside (but very very hard to find a decent place), and quite expensive in cities (800 euro gets you a small 2-bedroom appartment; a house with small garden and garage will cost you +1000 euro). Add the costs for heating electricity and cleaning (250-300 euro). Belgium is home-owners country. More and more people can't afford to buy, but they still prefer huge loans and mortgages for life... It's not unusal for families to let more than 50 % of their income go to the mortgage payments alone...

As for frugal living: with a total monthly budget of about 2000-2300 euro (rent etc. included), we're far from the 'extreme' zone of frugality, and we're not planning to cut further on our expenses. We're very happy with our current lifestyle and as long as we can pay for this and are still able to save and invest some, we're happy.

chenda
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Re: Resign on a small sum

Post by chenda » Wed Jan 25, 2017 1:06 pm

@janfromBelgium I recall reading Belgians have a legal right to self-build a dwelling in the countryside. Is this still the case ?

thrifty++
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Re: Resign on a small sum

Post by thrifty++ » Thu Jan 26, 2017 4:14 am

@janfrombelgium - awesome! It sounds like your plan should work. Belgian civil servant pensions sound pretty good :)

slowtraveler
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Re: Resign on a small sum

Post by slowtraveler » Thu Jan 26, 2017 6:19 am

Love the thread. Props to anyone who can FI at under 10k expenses a year.

I plan on living off dividends from broad indexes (mutual fund or privately constructed), having surplus cash flow to accommodate for the increase in costs when I move out, and being able to provide for my family if I choose that path. This, for me, means reaching the double commas first to have around 25k in annual dividends.

That said, I admire everyone here who's more skilled at stretching a dollar. I'm working my way there.

JanFromBelgium
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Re: Resign on a small sum

Post by JanFromBelgium » Thu Jan 26, 2017 6:27 am

chenda wrote:@janfromBelgium I recall reading Belgians have a legal right to self-build a dwelling in the countryside. Is this still the case ?
If this has ever been the case in our country, that's history now :(
Every acre of Belgian territory has been assigned possible 'functions' (agriculture, nature, industry, housing, recreation, etc.). It doesn't matter if it's your property or not: the state decides what can and cannot be done on your land.

JanFromBelgium
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Re: Resign on a small sum

Post by JanFromBelgium » Thu Jan 26, 2017 6:31 am

thrifty++ wrote:@janfrombelgium - awesome! It sounds like your plan should work. Belgian civil servant pensions sound pretty good :)
You would think so, but actually these civil servant pensions are at/just below the level of the average pension in our neighbouring countries like the Netherlands, Germany and France. It is the private pensions in our country that are brutally low (average 1200 euro per person/month after 45 years of full-time toiling...). It is really surprising to me that almost no Belgians are jumping on the FIRE-wagon...

Ayanka
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Re: Resign on a small sum

Post by Ayanka » Sun Jan 29, 2017 2:41 pm

Jan, I think the reason so little of our countrymen and women are jumping on the FIRE train is a combination of not knowing it and that net wages are relatively low. For non-Belgians, we have an insane amount of income tax on higher wages up to 50% is not unusual on the highest scales (similar system to the USA btw). This is compensated by a good health insurance. But the paperwork gets very complicated when you want to do something else than work when it comes to the healthcare system as we have no governmental box for early retiree.

@ Chenda: If it is in the area designated for housing and you have a building permit, you might be able to theoretically build your own house. But unless you are a contractor or have serious inspirations in becoming one, it is very inadvisable. Because of the tons of building code of new houses, buying a bad fixer upper and doing as much work as you can yourself, is probably going to be cheaper because while you have to put insulation in it, they don't have to be built according to the nearly zero-energy building rules. We do have a right and tradition to do it yourself though.

classical_Liberal
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Re: Resign on a small sum

Post by classical_Liberal » Tue Jan 31, 2017 1:18 pm

Moving back to the OP, I’m curious that so few have provided feedback to this post. Admittedly, I am relatively new here and have read a few similar threads; however, even those responses on other posts were generally opposed to the idea of resigning on less. Why the opposition? My attraction to ERE vs other personal finance plans is the web of goals/renaissance man/ skill building framework of ERE. So, put another way, if a person is actively building the ability to effectively live in four or five different mutually reinforcing ways and each of these is currently providing a mean of say 40-50 percent of perceived needs, why is it necessary for each of them to independently provided for 100 percent? The cumulative effort of the total is likely enough to provide double the support required for lifestyle, hence remaining relatively antifragile. Additionally, if an ERE’er is seeing continued year over year gains from some or all of these skills (obviously, over time returns will diminish, one would have to make accurate projections of S curve placement on each), then the lifestyle would continue to provide even more over time.

A fictional, yet reasonable example of such an ERE lifestyle... If one has all of the following:
  • A higher spend rate of say 20K annually, but has seen consistent 10% or more year over year spending reductions due to skill increases.
  • 10X current annual spending invested (200K “good” money), providing dividend income to cover a third of current lifestyle cash needs.
  • Experience with scalable (up to say, 300% of current needs full-time) part time work in multiple fields with the ability to cover 100% expenses at half time or less, along with the desire to work part time in one or more of these fields.
  • A small and growing income from a hobby/side business providing another 25 percent of current spending.
  • A desire to attempt a lower cost lifestyle which is not conducive to full time work ie travel RVing/Van living, slow travel to less expensive locations, homesteading, etc.
  • A desire to leave current position because it is no longer a satisfying use of time.
I have not read any particularly compelling arguments that a person in this situation should not resign. Why should an ERE'er focus the majority of quality time on the accumulation of monetary capital vs other, more satisfying goals?

Thanks

thrifty++
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Re: Resign on a small sum

Post by thrifty++ » Tue Jan 31, 2017 10:25 pm

Thanks Classical Liberal - I suppose the argument against might be the opportunity cost of growing capital more quickly.

But yes - would be good to hear from anyone who comes into this category to embarking at a lower level of capital. Thought there might be a couple of such people out there. Would love to hear

Bobby McGee
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Re: Resign on a small sum

Post by Bobby McGee » Wed Feb 01, 2017 12:22 am

Hello classical_Liberal,

I am in a situation quite close from what you described and will resign this spring. My net worth is equal to 15x annual expenses, it is not enough to cover all my financial needs but with a (very) part-time gig, some hobby money (art) and rental income, it will.
I am pulling the plug because I am done with the corporate world, fed up ad nauseam and I don't have any financial reasons to keep my high wage, full time job. I am not looking to live 100% off investment income, at least not now. I am giving myself another 5 years to ponder on this. I am happy knowing that I just need to maintain a part-time job from time to time. I have an "Enough" feeling, more money just won't bring much on the hapiness table. I call it a semi-retirement.
I guess it all depends on the individual and situation. If the time period of capital accumulation seems too long because of low wage/low saving rate, maybe seeking a compromise between full fledge ERE and semi-retirement is feasible.
I prefer to be semi-retired at 30 (after 6 years on the job market) than FI at 40 and having a sense that I wasted another decade of my life.

Some people just have more grit than others.

thrifty++
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Re: Resign on a small sum

Post by thrifty++ » Wed Feb 01, 2017 2:45 am

Bobby McGee - cool sounds like you are on the cusp. 15x living expenses sounds like quite a bit, unless you are extreme frugal. Are you comfortable sharing the NW figures?

classical_Liberal
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Re: Resign on a small sum

Post by classical_Liberal » Wed Feb 01, 2017 5:43 pm

@Bobby Mcgee, Congrats! I believe your plan will ultimately be a success, probably more so than you think. Certainly, you are less fragile than salaryman, likely much happier as well. I hope you have a journal, having an honest data point from one in this ERE situation will help others nearing your position to make good decisions.

2Birds1Stone
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Re: Resign on a small sum

Post by 2Birds1Stone » Wed Feb 01, 2017 7:08 pm

Bobby McGee wrote:Hello classical_Liberal,

I am in a situation quite close from what you described and will resign this spring. My net worth is equal to 15x annual expenses, it is not enough to cover all my financial needs but with a (very) part-time gig, some hobby money (art) and rental income, it will.
I am pulling the plug because I am done with the corporate world, fed up ad nauseam and I don't have any financial reasons to keep my high wage, full time job. I am not looking to live 100% off investment income, at least not now. I am giving myself another 5 years to ponder on this. I am happy knowing that I just need to maintain a part-time job from time to time. I have an "Enough" feeling, more money just won't bring much on the hapiness table. I call it a semi-retirement.
I guess it all depends on the individual and situation. If the time period of capital accumulation seems too long because of low wage/low saving rate, maybe seeking a compromise between full fledge ERE and semi-retirement is feasible.
I prefer to be semi-retired at 30 (after 6 years on the job market) than FI at 40 and having a sense that I wasted another decade of my life.

Some people just have more grit than others.
I too am very curious to hear your specifics!

Bobby McGee
Posts: 14
Joined: Wed Jan 04, 2017 4:02 pm

Re: Resign on a small sum

Post by Bobby McGee » Thu Feb 02, 2017 3:08 pm

Here it is :

(I live in Canada, by the way)

16 Went to local college, got a diploma 3 years later in a high demand field. No debt, college was very cheap ($200/year) and was living with my parents.
19 Moved to my current location. High wage, high living cost, but always possible to game the system.
21 Got a full time, high wage job . I was making $55 000 at 21 years old ! I bought a used car with the first $10 000 I earnt. I still drive that car.
21 to 27 work full time in that same job. Bought first fixer-upper with boyfriend of the time, we paid cash. Broke up with boyfriend, bought another fixer-upper, bought vacant land (cash), built on vacant land (cash).
27 After many raises, income at $68 000
28 Had some serious soul-searching. Decided to work 4 days/week and move toward semi-retirement.
29 Semi-retired ?

I did all that without even thinking about early retirement. I discovered Jacob's blog last year. I was being frugal without knowing what that word meant. I always thought material weatlh was such a waste of time and resources. From the start, I was saving 50% of my income, that percentage grew in the last couple years. I now save close to 70% of my income. With the savings, I bought the fixer-upper and vacant land, always cash. I live in the now renovated fixer-upper and will rent the new construction next year. I am planning to also rent a room in my home.
I still like my work but not the setting (cubicle/office BS/ 9-5). I started a small home base business 4 years ago. I intend to keep running it and get some income from it.

So, net worth of 240K (majority in real-estate), mostly because I understand real-estate, I know how to game the system. Net worth also include 70K at the bank for future projects.
Yearly expenses : 16K, I am single. Could be closer to 12k if I was to move in a more affordable town, but I love where I live.
Future source of income : home based business, rental income, part-time gig, hobby money (I am a landscape painter).

I have many options and projects on the back burner that could lead to full fledge ERE in the next 5-10 years but I want to experience semi-retirement first.

Hope this helps.

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