We bailed from the corporate life (financial sector) after 20 years of steadily increasing misery. What we did was just pay everthing off, mortgage included, banked as much as we could, and work parttime jobs that are really pretty nice. We've never touched our portfolio as our parttime jobs give us enough money to live on and even a little to invest. We fund our daughter's out of state college tuition from her college fund.
My impression is pretty much everyone lives off of their portfolio and doesn't need very much, if any, employment income. Is anyone else doing what we did?
I thought we were pretty much unique as we live in a smallish town in the Great Lakes region. Finding Jacob's blog was GREAT and I'm slowly going through all of the posts.
PS The hardest part of extreme early retirement isn't necessarily the financial part---its coping with society and swimming against the tide...
djc
Has anyone else done this...
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jacob
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I am slowly going through the various ways supporting myself. People keep asking me about investing and what if the market crashes, and I keep saying that as long as one can live well on little, there's little to worry about.
In 2009, I supported all my expenses through freelance work. About 4 hours per week. (Compared to a salaried job this is taking back control over my time.)
My current project is monetizing the blog and eventually selling the book. (This is an asset based approach. Build the asset; it makes money for you.) I think this too is possible.
I use the portfolio/savings as a fallback.
The next project will likely be to reduce outlays to almost zero. This will be done by buying a house, installing off grid utilities as much as possible and growing as much as possible myself.
In 2009, I supported all my expenses through freelance work. About 4 hours per week. (Compared to a salaried job this is taking back control over my time.)
My current project is monetizing the blog and eventually selling the book. (This is an asset based approach. Build the asset; it makes money for you.) I think this too is possible.
I use the portfolio/savings as a fallback.
The next project will likely be to reduce outlays to almost zero. This will be done by buying a house, installing off grid utilities as much as possible and growing as much as possible myself.
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Steve Austin
- Posts: 177
- Joined: Thu Jul 22, 2010 12:17 am
Outlays To Zero; I'm tentatively predisposed to that course as well, including the off-gridding forest-farming aspects. Though I believe that Zero is not impossible, I don't expect to realistically ever obtain Zero. But it's the vector that matters here. Actually getting to Zero would be Gravy(tm).
I'm attempting to make connections and do research locally, but hope to find a few really good collaborators here as well.
I'm attempting to make connections and do research locally, but hope to find a few really good collaborators here as well.
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JustChristine
- Posts: 19
- Joined: Wed Jul 21, 2010 11:01 pm
LOL Outlays to zero? owning a house? Those are 2 phrases that don't fit very well in the same sentence. In the right circumstance, I could see owning a home being much cheaper than renting but as this week has proven to me, owning a home ain't cheap. Due to all this flipping rain we've been socked with here in WI, I've discovered the need to adjust the grading a bit next to my house in the front and back as well as a few other water drainage issues. I'll be doing the work myself, if we ever get some dry weather, but it'll still put a dent in my home maintenance fund.
As for going off grid, that's something that I've thought alot about this year. I spent the winter freezing my behind off and reading articles about passive solar and zero energy houses. I would love to be warm all winter without the gas bill to prove it. The costs of such houses is dropping so much that soon I think they will be much more common place. A Habitat for Humanity chapter(in Colorado, I think), built a zero-energy home not too long ago for just a bit more than one of their regular homes.
As for going off grid, that's something that I've thought alot about this year. I spent the winter freezing my behind off and reading articles about passive solar and zero energy houses. I would love to be warm all winter without the gas bill to prove it. The costs of such houses is dropping so much that soon I think they will be much more common place. A Habitat for Humanity chapter(in Colorado, I think), built a zero-energy home not too long ago for just a bit more than one of their regular homes.
At age 54, I woke up on an airplane one morning, flying back from Frankfurt, Germany, for the second time in three weeks. (US Army Warfighter Exercises). I noted my 30 years was in, and decided I had paid my dues, and did not want to be seeing the sandbox again at age 55. (I knew being in the desert at 45 was tough (desert storm), so 55 would be a pretty unpalatable. Wife had 25 in the school system and was ready clean her desk drawer. So we both did, and bought into four apartment complexes for the elderly and disabled, along with three silent partners, and wife and I ran those for the next seven years. We have retirements and investments, yet we live on money flowing from those apartment complexes. There is good money in property management, if done right. So now we are totally retired and doing things we shelved for years. Looking back we could have easily retired at age 45. But we loved our first careers, and really enjoyed the property management. All that equals passive income today, but I wonder if I wish I was still "running" something? I have no boredom, but miss the day to day activities of business transactions. NAAAAAAAAAAAAAAA!!!!
@ djc - that's kind of where I'm at, though on a smaller scale. No more debts, some money in the bank, and earning a small income doing something I really enjoy (coaching high school runners). I don't plan to quit that job anytime soon (if ever), so I'm in the process of building up enough savings to provide enough interest income to cover the difference between my coaching salary and my expenses.
@ HSpencer - I'm curious if you'd expand on how to do property management 'right'. I have about 3 years experience doing property maintenance, including time at both a poorly managed property and a very well run place, so I have some ideas, but would like to hear what you have to say.
@ HSpencer - I'm curious if you'd expand on how to do property management 'right'. I have about 3 years experience doing property maintenance, including time at both a poorly managed property and a very well run place, so I have some ideas, but would like to hear what you have to say.
@Ralphy
We got into Tax Credit properties. These are through USDA-Rural Development, where the tenant is qualified and subsidized with Rental Assistance. We kept our properties in excellent condition, well manicured lawns, prompt services, and extremely attractive buildings and areas. In USDA-Rental assistance, the tenant pays 30% of their gross monthly income towards the rent. The rents on the units are set at basic and market rent by polling the median income for the locality in which your operating, This establishes the qualifier for the gross income of the tenant to reach eligibility. For example a one bedroom unit would have a market rate rent of $600.00. The qualified tenant would pay 30% of their AGMI or Adjusted Gross Monthly Income as rent. USDA Rural Development would then deduct from that, an allowance for utility (electric) of around $46.00 from the tenant's cost and pay the balance of the rent. So, you have one tenant in the apartment maybe paying $125.00 on the rent, and USDA-RD paying the balance. Tax credit properties DO NOT stand empty very long, so you see the advantage to the owner. Along with this is a VERY strict list of rules and regulations for both the tenant and the owners. These must be followed and you want them followed to protect your properties and give them the best reputation. USDA-RD are especially drug free communities. We "poured" the labor and money into curb appeal, and kept them at tip top at all times. Our vacancy rate was less than 2% at any given time. You see, the scumbags don't feel comfortable living in an up scale appearing property and seldom would apply for an apartment. You are of course under close supervision by USDA-RD on all the equal opportunity stuff and such, but you want to be in compliance and it is really pretty easy. Most of your scumbag applicants will bomb anyway due to prior police or credit problems.
At any rate if you follow thing closely and do the right thing on your management all works very well!!
Wife and I ran four of these until we got them in great condition, and then contracted with a property management company, so we could retire.
This is a broad-brush run down, I hope it is what you requested.
We got into Tax Credit properties. These are through USDA-Rural Development, where the tenant is qualified and subsidized with Rental Assistance. We kept our properties in excellent condition, well manicured lawns, prompt services, and extremely attractive buildings and areas. In USDA-Rental assistance, the tenant pays 30% of their gross monthly income towards the rent. The rents on the units are set at basic and market rent by polling the median income for the locality in which your operating, This establishes the qualifier for the gross income of the tenant to reach eligibility. For example a one bedroom unit would have a market rate rent of $600.00. The qualified tenant would pay 30% of their AGMI or Adjusted Gross Monthly Income as rent. USDA Rural Development would then deduct from that, an allowance for utility (electric) of around $46.00 from the tenant's cost and pay the balance of the rent. So, you have one tenant in the apartment maybe paying $125.00 on the rent, and USDA-RD paying the balance. Tax credit properties DO NOT stand empty very long, so you see the advantage to the owner. Along with this is a VERY strict list of rules and regulations for both the tenant and the owners. These must be followed and you want them followed to protect your properties and give them the best reputation. USDA-RD are especially drug free communities. We "poured" the labor and money into curb appeal, and kept them at tip top at all times. Our vacancy rate was less than 2% at any given time. You see, the scumbags don't feel comfortable living in an up scale appearing property and seldom would apply for an apartment. You are of course under close supervision by USDA-RD on all the equal opportunity stuff and such, but you want to be in compliance and it is really pretty easy. Most of your scumbag applicants will bomb anyway due to prior police or credit problems.
At any rate if you follow thing closely and do the right thing on your management all works very well!!
Wife and I ran four of these until we got them in great condition, and then contracted with a property management company, so we could retire.
This is a broad-brush run down, I hope it is what you requested.
Thanks for the response!
As a property maintenance worker, I enjoy your perspective on striving for curb appeal and good maintenance. I've seen what happens when this is done well and when it's ignored.
The company I started with used to penny-pinch everywhere they could, to the point of letting the grass grow ridiculously long in the summer and dragging their feet on snow removal in the winter. Our maintenance 'shop' for a 198-unit complex was a one-stall garage; shelving for the few parts we kept on hand consisted of bookcases picked from the dumpsters.
Anyway, the good tenants got fed up and left, management had to drop their rental rates to fill the vacancies, low rent attracted plenty of shady characters, and the downward spiral was on.
After I got sick of being embarrassed to go to work, I found a job at a place that does it right. They put the money into making sure we have the tools, parts and equipment to make the place look sharp and keep residents happy. End result - high renewal rates (for a college town, anyway), low vacancies, profitable rents.
As a property maintenance worker, I enjoy your perspective on striving for curb appeal and good maintenance. I've seen what happens when this is done well and when it's ignored.
The company I started with used to penny-pinch everywhere they could, to the point of letting the grass grow ridiculously long in the summer and dragging their feet on snow removal in the winter. Our maintenance 'shop' for a 198-unit complex was a one-stall garage; shelving for the few parts we kept on hand consisted of bookcases picked from the dumpsters.
Anyway, the good tenants got fed up and left, management had to drop their rental rates to fill the vacancies, low rent attracted plenty of shady characters, and the downward spiral was on.
After I got sick of being embarrassed to go to work, I found a job at a place that does it right. They put the money into making sure we have the tools, parts and equipment to make the place look sharp and keep residents happy. End result - high renewal rates (for a college town, anyway), low vacancies, profitable rents.
@Ralphy
I implemented a parts department SOP for my four properties.
It was based on a minimum low stock (MLS) quanity. For instance I required we keep enough of each item on hand according to the number of units. IE: 72 units. I would keep a total of 7 (seven) garbage disposals on hand and on order at all times. I did not want a parts truck on the road for supplies each day every day. I ordered my stuff from Maintenance USA and got it mostly overnight by UPS. I got good prices from MaintUSA by buying their suggested quanities (6 instead of 1).
At almost anytime, I could pull nearly any part I needed off the shelf. IE: Faucets, Light Fixtures, Electricals. ETC.
I had a really good middle aged maintenance man who helped me every day. He could do HVAC and Plumbing on his own, and we bought a sewer machine. I tried to do all I could to float the bottom line myself as well. I did lots of grounds work, and hired a few people on that but was not too satisfied with them.
I put in around 12 hours on some days. I also contracted a lot of painting as that is a time killer. I had a good carpet guy.
I finally bought a 10,500.00 Kubota Zero Turn mower and loved it so much I wasted a lot of time using it myself. My biggest problem with it was I was way too much of a perfectionist. That is a waste of time and effort in the apartment business.
I learned a lot and the hard way a lot, but I dearly did enjoy it.
I implemented a parts department SOP for my four properties.
It was based on a minimum low stock (MLS) quanity. For instance I required we keep enough of each item on hand according to the number of units. IE: 72 units. I would keep a total of 7 (seven) garbage disposals on hand and on order at all times. I did not want a parts truck on the road for supplies each day every day. I ordered my stuff from Maintenance USA and got it mostly overnight by UPS. I got good prices from MaintUSA by buying their suggested quanities (6 instead of 1).
At almost anytime, I could pull nearly any part I needed off the shelf. IE: Faucets, Light Fixtures, Electricals. ETC.
I had a really good middle aged maintenance man who helped me every day. He could do HVAC and Plumbing on his own, and we bought a sewer machine. I tried to do all I could to float the bottom line myself as well. I did lots of grounds work, and hired a few people on that but was not too satisfied with them.
I put in around 12 hours on some days. I also contracted a lot of painting as that is a time killer. I had a good carpet guy.
I finally bought a 10,500.00 Kubota Zero Turn mower and loved it so much I wasted a lot of time using it myself. My biggest problem with it was I was way too much of a perfectionist. That is a waste of time and effort in the apartment business.
I learned a lot and the hard way a lot, but I dearly did enjoy it.
Thanks again for sharing all that - I'd agree that you did it 'right'.
Sounds quite a bit like our place (though we're owned by an out-of-state company). We have a well-stocked parts warehouse; a wood shop for working on doors, trim, cabinets, etc; paint/drywall storage and equipment area; two-stall garage for lawn and snow removal equipment. I've enjoyed the work up to now just because I've learned so many different skills, and I'm hoping to eventually experience the business from an owner's perspective.
Sounds quite a bit like our place (though we're owned by an out-of-state company). We have a well-stocked parts warehouse; a wood shop for working on doors, trim, cabinets, etc; paint/drywall storage and equipment area; two-stall garage for lawn and snow removal equipment. I've enjoyed the work up to now just because I've learned so many different skills, and I'm hoping to eventually experience the business from an owner's perspective.
@ Q
Real estate, yes. Pizza ownerships...huh? That's a good income stream? Please explain. If it's a good opportunity I'd love to hear about it. I'm on the verge of purchasing a food and beverage establishment (albeit more toward the beverage side of things). Not as crazy as it sounds actually. I have never considered pizza establishments.
Real estate, yes. Pizza ownerships...huh? That's a good income stream? Please explain. If it's a good opportunity I'd love to hear about it. I'm on the verge of purchasing a food and beverage establishment (albeit more toward the beverage side of things). Not as crazy as it sounds actually. I have never considered pizza establishments.
Pizza has a high profit margin compared to cost of ingredients and easy entry. My so-so "partner" that I talk to about everything for businesses ran two pizza places until his divorce.
Good drivers is part of the key, and of course that comes up more since we have a former driver in the forums
I want to own a bar too, definitely a nice cushion there.
Good drivers is part of the key, and of course that comes up more since we have a former driver in the forums
I want to own a bar too, definitely a nice cushion there.
@ Q
I have a decent background in F & B operations, none pertaining to pizza, most pertaining to bars. I never gave the pizza idea much thought, but you're very correct in the easy entry part. The only concern I'd have is the amount of work/managing required. With certain bars I'm looking at there is an incredibly high ratio of money coming down to the bottom line for hours put in--which jives very well with the ERE lifestyle.
Is it possible to have a pizza place that runs well and is non-owner operated?
I have a decent background in F & B operations, none pertaining to pizza, most pertaining to bars. I never gave the pizza idea much thought, but you're very correct in the easy entry part. The only concern I'd have is the amount of work/managing required. With certain bars I'm looking at there is an incredibly high ratio of money coming down to the bottom line for hours put in--which jives very well with the ERE lifestyle.
Is it possible to have a pizza place that runs well and is non-owner operated?