Michael, I don't see why you couldn't retire with that amount. My personal target amount is only $225,000 before I hit 40..which is in 12 years. This will be invested in dividend growth producers so I hope to have my YOC around 12% by then. It all depends on your returns. If you're very good with your money and even better at managing your expenses it's possible. Also, with investing that money just right and working even a few hours a week like a lot of fellow posters have mentioned I can easily see that working out for you. The only question is unforeseen incidences and expenses, which even for the best executed plan can come into play. Good luck!
Change of plans: Is this enough?
I'd say 150K is enough, as long as you don't withdraw any of it. I semi-retired 3 years ago when I passed 100K net, and started only working part-time (2-3 hours/day) to cover living expenses. I'm 38 now, and although my goal is full ERE, Partial ERE is obviously great, too. So as long as you have a basic capital egg of +100K, don't withdraw it, grow it, and can cover your living expenses (which, given your apparent talents, shouldn't be a problem), you'll be good to go.
Along the way, I strongly recommend you learn how to invest and make your 100K-150K grow. The initial investment of time & energy might be undesirable (since you clearly know what your passions are), but down the road you reap more benefits. I'd say it takes an initial 100-300 hours of basic self-education (all you need is on the internet, but you have to sift through quite a bit of junk & BS) to become a semi-competent investor.
Unlike most other ERE investors, I would recommend capital growth instead of dividend/income growth. You're young, so you have time to build your capital instead of rely on it for income. And since you're good at chess, your learning curve with investing will likely be shorter - the stock market is just one big chess game: analyzing problems/situations, learning your opponent's patterns, projecting potential outcomes, readjusting to unexpected situations, all of that is necessary for investing.
I'm no genius, but I've doubled my investment capital (individual stocks only) in the last 3-4 years. That's not really likely with dividend stocks. I'm not against dividend growth stocks - I plan on switching a large % to them myself after I've hit my capital target. But when you're young, your aim should be growth. Don't ever let anyone tell you that it's impossible or risky. I'm actually quite a risk adverse person - never yet gambled in a casino before in my life.
Simple observation of the stock market (and basic math) will show you that when a $20 stock goes up to $22, that's a 10% gain, which may take only days or weeks. Do that with all 5-8 stocks in your portfolio, and your account is up 10%. Hold some stocks longer-term, they may go up even more. So all you have to do is find stocks that have a very high probability of going from $20 to $22 (in the case of a $20 stock, I prefer upside to $30-$40). This is a simplification, but you probably get the idea.
Along the way, I strongly recommend you learn how to invest and make your 100K-150K grow. The initial investment of time & energy might be undesirable (since you clearly know what your passions are), but down the road you reap more benefits. I'd say it takes an initial 100-300 hours of basic self-education (all you need is on the internet, but you have to sift through quite a bit of junk & BS) to become a semi-competent investor.
Unlike most other ERE investors, I would recommend capital growth instead of dividend/income growth. You're young, so you have time to build your capital instead of rely on it for income. And since you're good at chess, your learning curve with investing will likely be shorter - the stock market is just one big chess game: analyzing problems/situations, learning your opponent's patterns, projecting potential outcomes, readjusting to unexpected situations, all of that is necessary for investing.
I'm no genius, but I've doubled my investment capital (individual stocks only) in the last 3-4 years. That's not really likely with dividend stocks. I'm not against dividend growth stocks - I plan on switching a large % to them myself after I've hit my capital target. But when you're young, your aim should be growth. Don't ever let anyone tell you that it's impossible or risky. I'm actually quite a risk adverse person - never yet gambled in a casino before in my life.
Simple observation of the stock market (and basic math) will show you that when a $20 stock goes up to $22, that's a 10% gain, which may take only days or weeks. Do that with all 5-8 stocks in your portfolio, and your account is up 10%. Hold some stocks longer-term, they may go up even more. So all you have to do is find stocks that have a very high probability of going from $20 to $22 (in the case of a $20 stock, I prefer upside to $30-$40). This is a simplification, but you probably get the idea.
sky2evan: "I'd say it takes an initial 100-300 hours of basic self-education (all you need is on the internet, but you have to sift through quite a bit of junk & BS) to become a semi-competent investor."
I've found it hard to determine objectively what is the junk and what is solid advice. Even at what appears to be reputable sites, there is often conflicting information. For instance, many here advocate investing for income, while you advocate investing for capital gains. Can you recommend a good place to start?
Also, you nonchalantly mention that you've gotten 100% returns over a period when every major index has been negative. Yet you also say that you are not a genius and are risk averse. Have you considered the possibility that you have been very lucky? Do you really believe that any reasonably intelligent investor can essentially "beat" the market through straightforward analysis? How much time do you spend managing your investments?
These questions aren't meant to be rhetorical or adversarial -- I'm genuinely curious after recently confronting my own lackluster performance. And I completely agree with the approach of building a nest egg and then letting it grow while you pay your minimal expenses with part-time jobs, odd jobs, or fulfilling but low paying work.
I've found it hard to determine objectively what is the junk and what is solid advice. Even at what appears to be reputable sites, there is often conflicting information. For instance, many here advocate investing for income, while you advocate investing for capital gains. Can you recommend a good place to start?
Also, you nonchalantly mention that you've gotten 100% returns over a period when every major index has been negative. Yet you also say that you are not a genius and are risk averse. Have you considered the possibility that you have been very lucky? Do you really believe that any reasonably intelligent investor can essentially "beat" the market through straightforward analysis? How much time do you spend managing your investments?
These questions aren't meant to be rhetorical or adversarial -- I'm genuinely curious after recently confronting my own lackluster performance. And I completely agree with the approach of building a nest egg and then letting it grow while you pay your minimal expenses with part-time jobs, odd jobs, or fulfilling but low paying work.
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Robert Muir
- Posts: 280
- Joined: Thu Jul 22, 2010 10:15 pm
I think luck is a huge factor! Anyone could have bought a bunch of BP stock a year ago as a solid income play. I prefer buying the stock of a solid company after it's been beat down. When I find one like that, I put a good amount of money into it. If a stock goes up 30%, you want it to be 30% of a substantial amount.