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Author: Rocannon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5069  
Subject: How much is enough? the sequel Date: 6/13/2010 11:25 AM
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Back in Nov of 2003, I posted "How much is enough?" to this board. It was a pretty cool thread:
http://boards.fool.com/Message.asp?mid=19859445&sort=who...
At the time, I had reached $100K, and I was trying to get a handle on how little people need to get by.

After thinking about it more, I decided I wanted a minimum of $500K, and that I'd work till the age of 45 if necessary to get there, and revisit the idea later. I'm now in the neighborhood of 45, and I'm revisiting.

There have been some rocky periods. In 2007 I was laid off, and was unemployed for almost half the year. I had just bought a new car for $20K (0% loan with 0 down, which was nice, but still, ouch, bad timing). While unemployed, I was paying about $500/mo for COBRA, an added expense. However, despite months of unemployment, my net worth actually grew, evidence of how much the market drives the number now. My net worth began to dive in Oct 2007, and continued to plummet until 2009. This, despite the fact that I found a new job in 2008 and have been saving handily ever since.

If you look at a graph of my net worth vs time, you see something approximating a pretty straight line from 2003 to 2007. If you extend that line out to 2010, it'd be at around $600K. Instead, there's a great big valley between 2007 and 2010, and in 2010 I'm back to where I was in 2007 - at $350K.

I always like to see concrete numbers when people post. So here are some numbers:

year | salary | saved | all expenses, excluding taxes
2003 | $75K | $30K | $30K <-- hit $100K mark
2004 | $75K | $30K | $25K
2005 | $100K | $45K | $30K
2006 | $75K | $25K | $30K
2007 | $60K | $0 | $45K <-- hit $350K net worth
2008 | $80K | $15K | $50K
2009 | $90K | $30K | $40K <-- finally back to $350K

I was sick of working back in 2003. Fortunately, in 2008, I finally found a better job, one that's more tolerable. But I'm still sick of spending my time on work which is meaningless to me, and I wonder how many more healthy years I have ahead of me to do the stuff that I want to do. I also notice that my enthusiasm for that stuff has waned. I may have delayed gratification for too long.

Recently I started reading the "Retire Early Extreme" blog^*, and a bunch of other blogs by people who hate their jobs and are looking to "retire" on very little. This got me wondering again about how much I really need to live on. In 2008, RER claimed his costs were $12K/year, but his numbers are dodgy, see footnote.

So I'm wondering what other people are doing? Is there anyone out there who just got fed up and decided to leave work temporarily and wing it? Are most people just hanging in there and hoping they'll still be able to retire early, but gave up for now? What's your experience?

Rocannon

^*Re the "Early Retirement Extreme" blog: FWIW I do not consider this guy to be financially independent; he works and gets his health insurance through work, has a wife who brings in income. Also, he's not open about his actual numbers. But his posts can be interesting, if you can ignore the arrogant tone -
http://earlyretirementextreme.com/
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