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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%]
http://boards.fool.com/fire-update-2013-31051940.aspx

2012 Update: NW +20% [S&P +13%]
http://boards.fool.com/fire-update-2012-30479985.aspx

2011 Update: NW +9% [S&P +0%]
http://boards.fool.com/fire-update-2011-29755919.aspx

2010 Update: NW +31% [S&P +13%]v
http://boards.fool.com/fire-update-2010-28994598.aspx

2009 Update: NW +6% [S&P +23%]
http://boards.fool.com/Message.asp?mid=28279332

2008 Update: NW (-31%) [S&P -40%]
http://boards.fool.com/Message.asp?mid=27349532

2007 Update: NW +15% [S&P +6%]
http://boards.fool.com/Message.asp?mid=26243566

2006 Update: NW +23% [S&P +14%]
http://boards.fool.com/Message.asp?mid=24999370

2005 Update: NW +46% [S&P +3%]
http://boards.fool.com/Message.asp?mid=23507890

2004 Update: NW +82% (mostly home value increase) [S&P +9%]
http://boards.fool.com/Message.asp?mid=21842676

2003 Update: Net worth (NW) baseline = 1.0 (about 1.5X annual income at the time)
http://boards.fool.com/Message.asp?mid=20380221

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whyohwhyoh
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whyohwhyoh
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.

Congrats on another great year!

I'm a fan of Money Moustache's blog as well. I found his Roth conversion ladder interesting as well. One recent idea of his I'm thinking about looking into is a Republic Wireless phone plan. $25 per month for a smart phone plan. I'd be curious if anyone else has ever considered them.

Metal
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I found his Roth conversion ladder interesting as well.

This concept also allows one to dial in their precise income for the year to maximize tax and other benefits available. For example for Obamacare, as you can "select" your total income in late December to meet whatever the best subsidy level available was you are using.

Republic Wireless phone plan. $25 per month for a smart phone plan.

I am interested in this as well. I don't yet have a smart phone, but would be interested in this plan as well.

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whyohwhyoh
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A quarterly update this year as we approach FIRE in Sept 2015...

Successfully rented out ~600sqft of our house for a little over $2500/month 12-month lease, tenants have moved-in. Spent about $15k so far to get the 2 units ready. We still have well over 2000sqft to live-in 4bed/3bath, and are now focused on getting the back 1/1 ~600sqft unit ready to rent, which will cost around another $5k. We plan to rent this 2nd portion out closer to our FIRE date, but I want it ready to show in August to give us time to find the right tenants. We are hoping to get as close to another $2k/month as possible. Then the remaining portion of the house will be for a close family member who will act as our property manager and pay a modest monthly rental payment. PITI is around $3700/month, so we will be cash-flowing perhaps close to $1k/month to cover repairs/vacancies/profit etc. This house is turning into a great investment for us.

My side business has kept steady each month earning about $300/month for about 3 hours of work. Hoping to keep this solid as a side income in the future, as I can do this work from anywhere in the world, as long as I have an internet connection. I could easily expand as well in the future, but want to keep this as low key as possible.

Then it looks like we are off to Europe for a year or more in September! Already booking various travel segments.

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whyohwhyoh
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Quick update as my FIRE date is approaching...

We have successfully signed leases on both the front and back units of our home. Cash flow after all expenses should be around $500/month, that puts us essentially debt free with still having half the house (3bed/2 bath) to ourselves and some extra cash. A bit of an adjustment having tenants, but well worth the freedom in a few weeks more time.

Turning in my 2 weeks notice after this Labor Day weekend.

My side business has seasonally picked up to $800/month.

Overall everything is looking quite solid to enter into the unknown world of financial independence at the age of 41. Curious how long I'll last before I am ready for another 9-5 day job.

Heading off to Europe with the family next month for at least 12 months.

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whyohwhyoh
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Good luck why-oh-why. Enjoy yourself!
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No end of year financial update yet, as I haven't had the urge to count up our net worth yet. I know that not much has changed, except that the housing market did continue to grow during 2015 in the Silicon Valley, which affects both net worth, and a solid growing rental income.

We moved to Europe in Oct last year, kids are in the local school here, and we are enjoying the adventure of living in a new country. My wife did get a part time job*, which helps out on our ongoing expenses, but we are also living our typical below our means lifestyle, of course with selected expenditures like spending the summer in the south of France this coming summer.

* My wife's part time job allows us to utilize various benefits here including free healthcare.

Still planning on heading back to the States by the end of this year. But we are setting some roots here for the possible future.

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whyohwhyoh
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