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No. of Recommendations: 9
2014 Update:
Net worth up 15% in 2013. [S&P +12%]

Current Portfolio:
27% Picked Stocks (7% net worth in PFE, BMY ,WMT) (7% company stock, after tax)
32% 401k Mutual Funds (70% S&P500 index fund)
7% Fixed Income (Cash Savings, Money Market, I-bonds)
79% California Real Estate (Our House Value*0.93) [conservative estimate, not Zillow]
-45% Mortgage 3.625% fixed 30yr

2014: 40 years old now. Another great year in the market, and more importantly our local housing market. Last year we passed 1E6 and now made it to the next quarter mark. And the big news is that we have pulled in our FIRE date to Sept 2015! This has been a huge decision for us, and we started a 12 month plan last September to reach our goal.

The key strategy for us lies in the local housing market boom thanks to Facebook, Google, Twitter, Apple, etc. A large portion of our net worth is locked into our home, so starting this spring we will rent out a portion of our house that we are basically only using for storage at the moment. We currently live in a very large, for the bay area, home and this will downsize us to a 4/3, with well over 2000 ft^2 remaining. The rental market is absurd around here, and renting out this portion of our home will pay, after cost and taxes, a very significant portion of the mortgage interest and property taxes. Then when I “retire” in Sept’15 we plan to rent out the whole house and go slow travel or whatever other options become available at the time. In the future we will be able to come back home, and still have the one portion rented out keeping us nearly debt free due to the passive income.

We are 3 months into this plan and everything is on target. The other side of the equation is reducing expenses, where we have made great strides. Our spending had become sloppy and with the end goal in sight. Our goal is to hit 1.5e6 by the FIRE date.

Honestly my inspiration came while binge reading the Money Moustache blog, which opened up a whole slew of ideas including his entries on renting out part of one’s home. Also the concept of the Roth Conversion Ladder to tap into your 401k penalty free. That along with spending advice really got me motivated to make the decision, and our kids are still young 6&9 so it is a bit easier to move around at the moment, as we would like to settle back home for the high school years.

We call it the “stay at home Dad” plan. Of course after a few years off I may go back to "work" but having this flexibility is what I have been targeting since I started my career.

Also we are doing this in a stealth manner. However, renting out a portion of our house makes our friends think we are strapped for cash, so this is a bit awkward at the moment.

2013 Update: NW +37% [S&P +30%]

2012 Update: NW +20% [S&P +13%]

2011 Update: NW +9% [S&P +0%]

2010 Update: NW +31% [S&P +13%]v

2009 Update: NW +6% [S&P +23%]

2008 Update: NW (-31%) [S&P -40%]

2007 Update: NW +15% [S&P +6%]

2006 Update: NW +23% [S&P +14%]

2005 Update: NW +46% [S&P +3%]

2004 Update: NW +82% (mostly home value increase) [S&P +9%]

2003 Update: Net worth (NW) baseline = 1.0 (about 1.5X annual income at the time)

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