Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next
Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5068  
Subject: Re: A FIRE idea that may evolve into a plan Date: 10/9/2009 12:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
There is a more active retirement investing board, you might want to repost this there to get more responses. Here is a link to an unrelated post on that board.

http://boards.fool.com/Messages.asp?bid=100154&mid=28017...

...I’d have to remain very disciplined with my spending, which I’m not worried about. I’ve been living below my means for years,...

I didn’t crunch the numbers but it only looks like your net worth is only about three years of your salary. Even with inflation and raises that doesn’t come out to a real high annual saving rate when you have probably been working for 25 years.

To really qualify as “living below your means” you also have to consider your basic retirement savings as a required necessity so putting five to ten percent of your money in a retirement fund each year only gets you to the break even point. For example if you make $100K, spend $90K and save $10K, then you are really living right at you means, not below your means. To live 5% below your means you would need to really save $15K,

There are people who live comfortably on half your salary or less, you might try living on half of it to save a lot more money and to see if retiring early is worth the reduction in lifestyle that you will need to do. If you can have your pay automatically deposited into multiple accounts then you could split it between these three accounts;

1) Just enough to cover the condo costs that will go away when you retire.
2) $20K to live on like you planning on earning (500 hours * $40=$20,000). This would be the only money you touch, including your trip.
3) The rest: Pure savings.

If you are serious about doing this then does it make sense to keep the condo for five more years if you can rent someplace for less? You are able to sell it sooner and rent a cheaper place you would be able to save more money. Even though prices have dropped in most areas of the country, mortgage interest rates are still phenomenally low. If they go back up to 8% or higher when you are ready to sell the condo in five years then the housing market could be even worse.

If the numbers work, then the biggest problem that I see is that you are depending on continuing to work at that company. Once you become part time you will quickly become replaceable and if there is a management change they may not want to continue letting you work that way. You also need to take look to see how employable you would be if you have to find work with another company after working part time for a few years.

...an annual trip to Europe being my only real splurge...

I don’t know what your job is but once your “retire” you might be able to work in Europe or elsewhere around the world, even if it doesn’t pay that much it could be fun. You might crunch the numbers to see if could “retire” at 52 then work overseas for 10 years earning enough to at least cover your expenses so that your retirement savings would have ten more years to grow before you have to tap them. If you current company has overseas operations then you might be able to transfer to a job with that company.

I have looked into what it would take to teach English as a foreign language overseas and it seems to be very doable. It doesn’t pay much and lots of the open positions are not in areas that would attract a lot of tourists but as I get closer to retirement I will look into this more.

Greg
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement