Gus' road to retirement

Where are you and where are you going?
User avatar
jennypenny
Posts: 6577
Joined: Sun Jul 03, 2011 2:20 pm
Location: Stepford USA

Re: Gus' road to retirement

Post by jennypenny »

Welcome! You sound like you fit in here just fine. MMM is good, but I think it's mostly about the money and anti-consumerism. ERE is broader than that. As a systems guy, it doesn't surprise me that ERE appeals to you on a philosophical level.

That childcare number is pretty big. I read what you said, but can you find another solution? Do you have the room to offer up free housing to someone in exchange for childcare duties? A local student maybe or a young relative?

George the original one
Posts: 5356
Joined: Wed Jul 28, 2010 3:28 am
Location: Wettest corner of Orygun

Re: Gus' road to retirement

Post by George the original one »

Your real estate plan is sensible because you're comfortable & experienced with real estate, but relying on only 2 rental units seems risky because if something happens to one, then your income is cut in half.

Forskaren
Posts: 188
Joined: Sat Nov 07, 2015 4:04 pm

Re: Gus' road to retirement

Post by Forskaren »

"Total: 4785"
Was that your total expenses or just the part that you pay yourself? Does real estate take alot of time compared to for example investing in an index fund with low fees?

Your health costs and nanny costs seem high, but you seem to be earning alot. Here in Sweden healthcare is nearly free and childcare is cheap, but you pay higher taxes instead. If you make good money, your marginal tax is almost 70% in Sweden if you include payroll tax. It should also be noticed that here you get no additional benefits from the payroll tax over a certain income (no extra pension, no extra pay during sick leave or unemployment). As self employed there is also a sales tax on your services, so basically if you make an extra $400 from a client, the taxman will take $300. Also Sweden got the lowest spread in earned income in the world, so you would probably be paid less.

IlliniDave
Posts: 3035
Joined: Wed Apr 02, 2014 7:46 pm

Re: Gus' road to retirement

Post by IlliniDave »

You are certainly not alone here in letting a number of relatively high income years go by with inefficient behavior due to lack of focus. You can only start from where you are now, so there's no point worrying too much about the coulda-shouldas. I can't offer much besides general encouragement regarding a real estate-based plan.

Noedig
Posts: 190
Joined: Tue Aug 26, 2014 10:15 pm

Re: Gus' road to retirement

Post by Noedig »

' letting a number of relatively high income years go by with inefficient behavior due to lack of focus' just about nails it for me. The best thing is to start, from now: and because you are here you know that already. Well done with the comprehensive statement of your situation now, and what you want to achieve in the medium term.

Good point about MMM vs Jacob : MMM is all hedonic muscular FI, Jacob is more the king of infinite space in a nutshell kind of chap - I had not really considered this before.

I am with you on deciding consciously not to be a mere consumer, liking fixing things, and being a sort of urban Waldenite. In the heart of London, that is a tad pretentious but then again, no it is exactly the right approach: in a city more than other places, forces are constantly at work to sell you stuff, but the opportunities for good interactions and experiences are also high.

Risk is part of real estate investment: it can be mitigated if you have done your homework, as you evidently know how to do. If the tax structure is favourable, it is the easiest way to FI. Many of us here are risk averse people. It has taken me a long time to both understand and feel, that risk can be managed and is strongly associated with reward. Like, doh!

Noedig
Posts: 190
Joined: Tue Aug 26, 2014 10:15 pm

Re: Gus' road to retirement

Post by Noedig »

' letting a number of relatively high income years go by with inefficient behavior due to lack of focus' just about nails it for me. The best thing is to start, from now: and because you are here you know that already. Well done with the comprehensive statement of your situation now, and what you want to achieve in the medium term.

Good point about MMM vs Jacob : MMM is all hedonic muscular FI, Jacob is more the king of infinite space in a nutshell kind of chap - I had not really considered this before.

I am with you on deciding consciously not to be a mere consumer, liking fixing things, and being a sort of urban Waldenite. In the heart of London, that is a tad pretentious but then again, no it is exactly the right approach: in a city more than other places, forces are constantly at work to sell you stuff, but the opportunities for good interactions and experiences are also high.

Risk is part of real estate investment: it can be mitigated if you have done your homework, as you evidently know how to do. If the tax structure is favourable, it is the easiest way to FI. Many of us here are risk averse people. It has taken me a long time to both understand and feel, that risk can be managed and is strongly associated with reward. Like, doh!

Dragline
Posts: 4449
Joined: Wed Aug 24, 2011 1:50 am

Re: Gus' road to retirement

Post by Dragline »

You're giving me bad memories of struggling with this stuff at Caltech.

If you want a quick and entertaining romp through lots of classical and modern literature, I'd highly recommend the "Thug Notes" series on YouTube, where you can learn about everything from MacBeth to the Hunger Games in a "what does it say" and then "how has it been interpreted" format. It's like a combination of Ice Cube and Alistair Cooke. Direct link: http://www.wisecrack.co/thug-notes/

For another useful and interesting summary of many Western classics, you might read this: http://www.amazon.com/Self-Soul-A-Defen ... -1-catcorr

It was very good for the raw content, even if I didn't always agree with the conclusions.

theanimal
Posts: 1588
Joined: Fri Jan 25, 2013 10:05 pm
Location: AK
Contact:

Re: Gus' road to retirement

Post by theanimal »

I just began the reading list for students at St. John's College (as mentioned at the end in Investing:The Last Liberal Art). It's a fairly comprehensive romp through the classics ideally giving their students a multidisciplinary view.

I'd like to join you. I probably won't start until early winter (late Sept.). How'd you decide upon the books in your last paragraph? I was looking through the pages for the EE and CS online courses and only saw online notes and other materials.

Dragline
Posts: 4449
Joined: Wed Aug 24, 2011 1:50 am

Re: Gus' road to retirement

Post by Dragline »

You might like "The Mindful Geek": https://www.amazon.com/Mindful-Geek-Min ... B0155FWYBW

It takes a lot of the woo out of various meditation practices, explains why/how they work and provides practical choices and guidance.

bryan
Posts: 1068
Joined: Sat Nov 29, 2014 2:01 am
Location: mostly Bay Area

Re: Gus' road to retirement

Post by bryan »

Augustus wrote: Q1 2016: Computer Architecture by Hennessey & Patterson
One of my favorite textbooks from uni! One of my favorite courses (embedded systems was great too). Have you finished it? Lent my copy to a sort-of-polymath friend years ago and haven't gotten it back yet :/

Jason

Re: Gus' road to retirement

Post by Jason »

Man, for that nanny fee I hope she flies around like Mary Poppins.

Question: I don't count cars or non-real estate property as assets. I'm guessing our paid off Subaru might be worth 5k and we probably have 30-40K in jewelry but that's not something I include. To me its strictly house and money.

Zanka
Posts: 101
Joined: Tue Aug 01, 2017 2:33 am

Re: Gus' road to retirement

Post by Zanka »

Great journal! it takes a while to shift your mindset im sure, but you seem to be the kind of person that enjoy learning and finding solutions. Im sure you will find your own path forward.

For me, meditation have been huge.

wolf
Posts: 1085
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Gus' road to retirement

Post by wolf »

Hi Augustus. Just found your journal and reading it. Your journey is interesting so far and I do appreciate your experiences with self-employment, freelancing. I am als looking forward to read more about your recent "retirement" experiences because I think I can learn some lessons here. Thanks and I wish you all the best with your sad feelings. As Zanka have said also, meditating works also for me. But I guess you do also know your best practices.

wolf
Posts: 1085
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Gus' road to retirement

Post by wolf »

Augustus wrote:
Sun Aug 13, 2017 4:49 pm
I've been pondering whether to pay off a house down there or to invest elsewhere and use the income to pay the mortgage. Surprisingly enough it seems like you come out ahead by buying rentals out of state to pay the mortgage in CA, plus at the end of 30 years, you have double the property.
I think the decision depends on the outcomes of both options. You should decide for the best option with the highest outcome.
Which one is that?

bryan
Posts: 1068
Joined: Sat Nov 29, 2014 2:01 am
Location: mostly Bay Area

Re: Gus' road to retirement

Post by bryan »

Dooo it! Kick ass!

Mister Imperceptible
Posts: 1353
Joined: Fri Nov 10, 2017 4:18 pm

Re: Gus' road to retirement

Post by Mister Imperceptible »

Hi Augustus, I finally got around to reading your journal after receiving some valuable input from you in multiple community threads. Awesome journal. Glad you are making so many strides. I hope you can work thru your recent setbacks. Hopefully your wife doesn’t torpedo your budget with “clothes purchases necessary to compete in the workplace.”

Curious, where were you before moving back to SoCal? I’m guessing Denver, by the Subaru purchases, and the unwillingness of many Californians I have known to leave the western US, because after all “the west is the best.” :roll:

I repeatedly advise my friend in SF to buy rental real estate in a low cost of living area, and remain a renter in California. I wouldn’t want that state hammering me for income and property taxes. Also, you yourself have acknowledged how the Chinese have bid up the real estate there to unsustainable levels. His objective is to get to $200k (he is ALL IN on FAANG stocks), so he can make a 20% down payment on a $1mil house. Any strategy where success means getting an $800k mortgage seems like a bad plan to me.

Where are you moving to?

suomalainen
Posts: 736
Joined: Sat Oct 18, 2014 12:49 pm

Re: Gus' road to retirement

Post by suomalainen »

Sounds like you've come around to your own version of money is a solved problem. Congrats and enjoy a newly designed life!

suomalainen
Posts: 736
Joined: Sat Oct 18, 2014 12:49 pm

Re: Gus' road to retirement

Post by suomalainen »

Augustus wrote:
Wed Apr 11, 2018 3:20 pm
I realized that I could stop obsessing over accumulation right now, it felt like a tremendous stress had been removed from me. It's hard to enjoy life when you feel like you're behind.
...
I am trying to come to terms with what my change of plans means to me.
...
I then proceeded to have ZERO interest in these things I had bought, i.e. video games, books, plans for adventures, plans for what I'd do on my first day/week/month with no work, etc when I was actually not working. They were a fantasy I had concocted while working, that did not apply in the mental state I entered when I stopped working.
...
If I went too far in either direction, i.e. i became too focused on productivity or enrichment, or I became a couch bound lazy ass, I started to get depressed.
I feel each of these quotes. My reach had far exceeded my grasp and my fantasy crumbled, so figuring out what to replace it with is what I'm grappling with now myself. Best of luck in drafting this new chapter in your life's story.

Mister Imperceptible
Posts: 1353
Joined: Fri Nov 10, 2017 4:18 pm

Re: Gus' road to retirement

Post by Mister Imperceptible »

Well, you’ve said again and again that you want to dry run retirement. I’m going to play devil’s advocate and say that eating into the principal of your FI egg might conflict with your web of goals, and you’ll waste a lot of time trying to find new gigs as you move in and out of being employed. I was reading ffj’s journal and it struck me that he took a 4-day gig and realized even that was too long for him. He’s working blue collar jobs and he has to be there physically, while you work from home, but I don’t know how comfortable I would be with the idea that employment will be so easy to find. If we have some dreadful financial calamity a la the Great Depression, your employment gaps could really work against you and you might be forced to take non-remote work. That would make you really unhappy.

I’m relatively new here so I’m still figuring it all out, but I’m inclined to lean toward racing to FI as soon as possible, THEN taking your foot off the gas. But that’s easy for me to say, I have no children or plans to live in uber-expensive California, so that date might seem farther away for you. I would just hesitate to think you’ll always have access to such a high income.

Mister Imperceptible
Posts: 1353
Joined: Fri Nov 10, 2017 4:18 pm

Re: Gus' road to retirement

Post by Mister Imperceptible »

I think also that your wife will continue to come up with creative reasons to keep you working. My grandmother just pressured my grandfather into buying a wood pellet stove they couldn’t afford. “I have to keep him working” she said with wide eyes and a sweet tone, her feet in bunny slippers toasting by the fire, as my grandfather continues to lurch forward like a mule.

https://m.youtube.com/watch?v=-tRdBsnX4N4

Post Reply