Create the PERFECT ERE Life...

Simple living, extreme early retirement, becoming and being wealthy, wisdom, praxis, personal growth,...
Redsted1
Posts: 79
Joined: Thu Jul 22, 2010 11:03 pm

Post by Redsted1 »

@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???


Maus
Posts: 505
Joined: Thu Jul 22, 2010 10:43 pm

Post by Maus »

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.


HSpencer
Posts: 772
Joined: Wed Jul 21, 2010 11:21 pm

Post by HSpencer »

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!!!!


JohnnyH
Posts: 2005
Joined: Thu Jul 22, 2010 6:00 pm
Location: Rockies

Post by JohnnyH »

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?


KevinW
Posts: 959
Joined: Mon Aug 02, 2010 4:45 am

Post by KevinW »

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 :)


jacob
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Post by jacob »

@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.


Melissa
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Joined: Mon Aug 23, 2010 11:14 pm

Post by Melissa »

@ 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.


Ralphy
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Joined: Wed Jul 21, 2010 11:41 pm
Location: Iowa

Post by Ralphy »

I'll echo the 'good thread' sentiment. Really has me thinking in more detail about plans for the future.


KevinW
Posts: 959
Joined: Mon Aug 02, 2010 4:45 am

Post by KevinW »

@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.


Robert Muir
Posts: 280
Joined: Thu Jul 22, 2010 10:15 pm

Post by Robert Muir »

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.


Melissa
Posts: 41
Joined: Mon Aug 23, 2010 11:14 pm

Post by Melissa »

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.


JohnnyH
Posts: 2005
Joined: Thu Jul 22, 2010 6:00 pm
Location: Rockies

Post by JohnnyH »

@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. ;)


gibberade
Posts: 92
Joined: Wed Sep 22, 2010 1:53 pm

Post by gibberade »

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.


HSpencer
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Joined: Wed Jul 21, 2010 11:21 pm

Post by HSpencer »

@Jacob
It's already gone DIY
http://www.squidoo.com/coffin
a few friends could put you in it, have few beers in your honor, and then all take a leak on it before planting.


jacob
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Post by jacob »

@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.


gibberade
Posts: 92
Joined: Wed Sep 22, 2010 1:53 pm

Post by gibberade »

More than that unfortunately. I only started university this September. So 3.5 - 4 more years.


aquadump
Posts: 278
Joined: Fri Jul 23, 2010 9:28 pm

Post by aquadump »

@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 ;-)


Redsted1
Posts: 79
Joined: Thu Jul 22, 2010 11:03 pm

Post by Redsted1 »

@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.


AlexOliver
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Joined: Tue Aug 03, 2010 7:25 pm

Post by AlexOliver »

@gibberade: also could you get a part-time job so you could save some while you're in school?


dpmorel
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Post by dpmorel »

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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