FI in 10 years

Where are you and where are you going?
steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Feb 02, 2015 2:47 am

andystkilda wrote:Steveo have you considered moving to a cheaper residence - perhaps further out from the city? - especially if you can downsize to less bedrooms in the future as the kids leave home.

I know this would be a significant (perhaps unworkable) disruption to your wife/kids but it could potentially free up a lot of capital to add to your retirement/savings funds.
Its an option post FIRE but not at this point. I can walk to work but typically ride my bike. The area that I live in is in my opinion fantastic in that there are so many bike tracks and parks so it means there is heaps of free outdoor activities for us. The kids are settled.

My lifestyle now is great and I don't think it makes any real sense to move. So we could have less of our assets tied up in our property but it would come with the downside of traveling further for work and possibly moving to an area that we don't want to retire in.

I view our house as providing a back-up post FIRE as well. If something goes against us we have buffer in selling the house.

Other people have mentioned this and it is an option but I don't think its an option that is worth taking at this point.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Feb 02, 2015 5:04 am

I just fixed one of the toilet seats in my house. This was just so easy but its something years ago I probably wouldn't have done.

I also went to a funeral today for a guy I used to work with. He was probably about my age (early 40's) and was working last year up too about July/August on a project with me. He left work a month or so later on sick leave and now he is dead. I have no idea what he died of. I assume cancer but I honestly don't know. It makes me realize how short life can be and how unimportant work really is.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Feb 02, 2015 9:44 pm

I'm not sure how the rest of you feel but for those not retired do you get moments of absolute longing to retire.

I have a yearning to retire right now. I know that it will pass and come again. I suppose that it is part of the journey. My wife would say suck it up and keep going.

leeholsen
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Re: FI in 10 years

Post by leeholsen » Mon Feb 02, 2015 10:24 pm

good journal. i re-read it every now and then as we are on about the same 10 year plan; you'll get there a year sooner than me because you found ere a year sooner.
steveo73 wrote:I have a yearning to retire right now. I know that it will pass and come again. I suppose that it is part of the journey. My wife would say suck it up and keep going.
i have this bad this year, i keep looking at expenses over and over again to see if i'd be willing to cut some to be able to retire sooner. i'm sure it'll pass in the next few months too, but its a real grind now.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Feb 02, 2015 11:53 pm

leeholsen wrote:good journal. i re-read it every now and then as we are on about the same 10 year plan; you'll get there a year sooner than me because you found ere a year sooner.
Thats good. We can race towards it. I'll be jealous if you get there first but cool with it.
leeholsen wrote:i have this bad this year, i keep looking at expenses over and over again to see if i'd be willing to cut some to be able to retire sooner. i'm sure it'll pass in the next few months too, but its a real grind now.
I just get sick of work. I manage projects and I don't really care about it especially the intensity of it. I can handle it but I get sick of handling it. You are right in that it is just a grind. To add to that I don't want a lot of stuff. Its more about paying off my house and making sure the kids are alright.

leeholsen
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Re: FI in 10 years

Post by leeholsen » Tue Feb 03, 2015 1:42 pm

i'm pretty sure you'll beat me, I tend to drop money on impulse travel ironically to get away from the daily grind; always sets me back a little,

steveo73
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Re: FI in 10 years

Post by steveo73 » Tue Feb 03, 2015 3:20 pm

leeholsen wrote:i'm pretty sure you'll beat me, I tend to drop money on impulse travel ironically to get away from the daily grind; always sets me back a little,
I don't really spend that much on impulse buying but geez I want to take a long holiday to get a break from work.

steveo73
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Re: FI in 10 years

Post by steveo73 » Sat Feb 07, 2015 5:43 pm

I posted these monetary goals on the MMM forum but I'll put them here because this forum suits me better. Its easier to read everything.

End of 2015
1. No debt which consists solely of the mortgage (we might not make this but we will be close)
2. Super - $200k. This is assets that we can't use until we are about 65. We already have this amount but I couldn't be bothered to create a target here.
End of 2016
1. $100k in non-super assets. This will be really tough.
End of 2017
1. $200k in non-super assets. Again tough.
End of 2018
1. $300k in non-super assets. Again tough.
End of 2019
1. $400k in non-super assets. Again tough.
2. Super say $300k.

It'll be interesting how this goes. My wife wants to quit work when we get to $500k in non-super assets. I figure at that point we will definitely be FI. I'm also tracking to get to $1 million in assets excluding our house. That to me would be really good.

The problem is that I have 2 goals that don't work together - the goal to retire as quickly as possible and the goal to get to about 3% WR (I think about $1mill).

DutchGirl
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Re: FI in 10 years

Post by DutchGirl » Sun Feb 08, 2015 3:45 am

I think adding $100k more in 2019 is easier than adding $100k in 2016. In 2019, you should have $300k in there already working for you, maybe creating $20k-30k of growth on its own... Then you will "only" need to add $70-80k of your own.

Anyway: nobody can predict the future. Good luck reaching your goals!

steveo73
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Re: FI in 10 years

Post by steveo73 » Sun Feb 08, 2015 3:46 pm

DutchGirl wrote:I think adding $100k more in 2019 is easier than adding $100k in 2016. In 2019, you should have $300k in there already working for you, maybe creating $20k-30k of growth on its own... Then you will "only" need to add $70-80k of your own.

Anyway: nobody can predict the future. Good luck reaching your goals!
I agree with this. Over time it should get easier and easier. At some point it will become meaningless to our life and I suppose that is when I can consider myself FI.

You are right in that no one can predict the future. All you can do is take it one step at a time.

steveo73
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Re: FI in 10 years

Post by steveo73 » Wed Mar 04, 2015 6:06 am

I've been playing around with http://www.cfiresim.com/ and its interesting.

If I retire in 2020 and live for 60 years past that point with a spending of $30k per year with a 70/30 equity/bonds split and a portfolio of $800k the simulator provides a 100% success rate. In my opinion that is fairly conservative.

We do have some problems with spending more than right now but we also have 3 young kids and I think $30k for myself and my wife would be plenty.

I sort of would like to get to a cool $1million but really who cares.

leeholsen
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Re: FI in 10 years

Post by leeholsen » Wed Mar 04, 2015 10:39 am

i'm right there with you one those thoughts, 30k looks perfect for most costs with a buffer included in that 30 for unseen expenses; but that one million is a goal I want to hit too; even though I don't need to with a sub-3 SWR.

steveo73
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Re: FI in 10 years

Post by steveo73 » Wed Mar 04, 2015 2:49 pm

leeholsen wrote:i'm right there with you one those thoughts, 30k looks perfect for most costs with a buffer included in that 30 for unseen expenses; but that one million is a goal I want to hit too; even though I don't need to with a sub-3 SWR.
Its interesting isn't it. If you get to one million you can spend 35k without any chance historically of running out of money.

Looking at those figures I'm starting to think getting to one million is pointless. Even if you budget for 30k but you expect to spend less than that you will probably end up getting to a million dollars. The average ending portfolio is about $8 million.

steveo73
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Re: FI in 10 years

Post by steveo73 » Wed Mar 25, 2015 4:42 pm

I've come up with some more figures that I'm tracking at the moment:-

FI date: "2022-03-07"
WR: 21.55233
Savings Rate: 0.7453851
Dividends % of living expenses: 6.474238
Working Days To FI: 1553

It'll be interesting how these figures change over time. Its a long way to go based on current spending however I think we can reduce spending. Its really the 3 kids that cost a lot of money.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Apr 20, 2015 4:14 am

I thought I would give another update. Work isn't bad at the moment but there is so much on. I don't know if anyone reads http://livingafi.com/ but I can relate to that blog so much because I work in a similar environment although mine is much better.

Still the general theme on that blog and where I'm coming from are completely in sync. I like my job but there is also a lot of suckiness in it.

My wife has a much worse job (its basically a call centre) and she had the double because she had terrible management. She just got another job though - same pay but hopefully less crap.

One thing that I really notice about work sucking is that I train jiu-jitsu a lot less. Last week I went twice and the week before it was only once. I then put on weight although its probably not much. Anyway I'd rather be doing other stuff than working.

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Apr 20, 2015 5:18 am

Another update with regards to thoughts on my finances and what FI will mean to me from a metric perspective:-

FI = 800k predominantly share based investments + 5 years no drawdowns + paid off house

I am thinking of investing this as follows:-
400k super (Australia's tax advantaged account that you cannot draw on until 60 in my case) - 90/10 shares/bonds
400k outside super which consists of:-
300k Australian shares - generates 15k per year dividends with franking credits
50k USD Shares
50k Non USD Shares

I intend to use low cost index investments basically vanguard ETF's for the funds outside of super and just stick with my current super account which although the fees are relatively high they are as good as what I can see that is available to me.

5% drawdown per year which is above our current spending but save excess cash to counter for any down years.

I think that this looks fairly safe even though it also appears aggressive in some ways.

Carlos
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Re: FI in 10 years

Post by Carlos » Mon Apr 20, 2015 7:51 am

steveo73 wrote:I thought I would give another update. Work isn't bad at the moment but there is so much on. I don't know if anyone reads http://livingafi.com/ but I can relate to that blog so much because I work in a similar environment although mine is much better.

Still the general theme on that blog and where I'm coming from are completely in sync. I like my job but there is also a lot of suckiness in it.
I found the blog recently and spent several hours reading it. His posts, especially the recent ones, resonate with me. The three of us must be in similar places in our careers (mentally at least).

steveo73
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Re: FI in 10 years

Post by steveo73 » Mon Apr 20, 2015 4:50 pm

Carlos wrote:
steveo73 wrote:I thought I would give another update. Work isn't bad at the moment but there is so much on. I don't know if anyone reads http://livingafi.com/ but I can relate to that blog so much because I work in a similar environment although mine is much better.

Still the general theme on that blog and where I'm coming from are completely in sync. I like my job but there is also a lot of suckiness in it.
I found the blog recently and spent several hours reading it. His posts, especially the recent ones, resonate with me. The three of us must be in similar places in our careers (mentally at least).
Its interesting isn't it. I really like the management within my team but the culture of stupid crap has I think invaded IT.

steveo73
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Re: FI in 10 years

Post by steveo73 » Tue May 12, 2015 2:21 am

I chucked a sickie today and spend the day playing chess, doing jiu-jitsu, cooking and reading all sorts of crap on the Internet.

One thing I just did is reassess where we are at and the FI goals and I seriously think that I could lower my target and be okay. I also think that a lower target might be a better goal to aim for.

I could change my target to something like:-

1. Paid off house
2. 600k
3. 5 years no drawdowns

The house will be paid off hopefully this year and the 600k based just on saving should he obtainable by the end of 2018. This drops the timeframe back from 5 years post the house being paid off to 3 years post the house being paid off. We would still need enough money to live for 5 years post that point however that should be fairly easily obtainable.

The reason I think that this is achievable is based on drawing down 5% of the portfolio every year post the no drawdown phase. The average spend based on this via cFIREsim is about 40k per year. This is more than what we are spending. I think that there is also some buffer in those figures because I am not assuming any inheritance (potentially a lot) or any social security etc.

steveo73
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Re: FI in 10 years

Post by steveo73 » Fri Jun 12, 2015 4:37 am

Some interesting points today. My company just restructured and I'm not sure how many but 20-30 people were retrenched. The team did look massive when we all caught up but I assume its about 100-150 people. That is a lot of people being let go. I also caught a bus home with another guy from work and we were discussing finances. He is 55 with a mortgage of 280k. Apart from that I assume that he has minimal assets.

It makes me wonder how people survive at all. I feel sorry for the guys that are in that position but what can you do.

I'm truthfully not ready to lose my job just yet however I'm concerned that I will not be able to have it as good as I have it now. At this point I can ride my bike to work in 5-10 minutes and I can work from home whenever I want.

I have a job and I seem to have a bigger team and it all looks good for me personally but it makes me realize that we really need to keep on the path that we are on. If I lose my job in 3-5 years time its probably not a big issue. I could of course get another job now as well and a retrenchment wouldn't really bother me. I'm more concerned about moving work locations and now having it as good.

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