No. of Recommendations: 2
Washington Post has an interesting story on a Canadian engineer who moved to the US and retired at age 30.

http://www.washingtonpost.com/business/meet-mr-money-mustach...

intercst
Print the post Back To Top
No. of Recommendations: 0
Okay, so once you’ve paid off debt and piled heaps of money into savings, what do you do with it?

You’ve already gotten off track, in my book. Instead of thinking of “savings,” think of “investments.” You invest every bit of spare money you can get your hands on, as soon as you can. Like little green employees, each dollar bill needs to be kept at work for you at all times.

Back in the day, I would just empty out my bank account after each paycheck and distribute it into my investments of choice: Vanguard’s S&P 500 index fund, their small-cap value index fund, a bit went into paying off my mortgage early as well.


Terrible "advice" IMHO. He got lucky...
Print the post Back To Top
No. of Recommendations: 5
Maybe the best advice is find a career you actually enjoy.

He's not retired - he just isn't exactly employed by someone else.
Print the post Back To Top
No. of Recommendations: 4
Still, the concept of saving heavily allowing you the option to retire very young is a good one. The article mentions saving 50%. To me the optimum is live on one-third of gross, invest one-third, and use the other third for taxes and benefits.

Of course, many reject that as being impossible. I think its easiest for those like Julia Roberts who make $12MM per picture. But too often people fall into the trap of spending what they make--often for frivolous stuff.

Giving careful thought to what you need for happiness often reveals that much of what you spend is virtually wasted. "Stuff" is purchased, used briefly, and discarded. Saving more is not difficult for those who are serious about it.

And as I recall, one who did that successfully is the OP, Intercst.
Print the post Back To Top
No. of Recommendations: 4
Paul Wrote I think its easiest for those like Julia Roberts who make $12MM per picture.

Well it would be much harder than you think for people like Julia Roberts to follow your 1/3, 1/3 and 1/3 rule. For starters taxes on the last $11 million are well beyond 33%. Taxes could be 45% of total income in some locations. Most such people have agents who take between 5% and 10%.

But back to normal people - my approach was very simple when I was working. Every time I got an increase in pay, I saved half the take home portion - used the rest for spending. I even applied that when social security payments ending during a work year. Over time I did take the funds I had saved and made investments.

There is one unintended consequence of this approach - one slowly gets into a position of living below your means without feeling like a deprived individual. Of course this approach works best when one is in a mildly inflationary period, so take home pay increases.

Gordon
Atlanta
Print the post Back To Top
No. of Recommendations: 1
..Giving careful thought to what you need for happiness often reveals that much of what you spend is virtually wasted. "Stuff" is purchased, used briefly, and discarded. ...

Well said, Paul!

Reminds me of a post I made in response to a question regarding how to invest once many initial investment objectives have been reached:

http://boards.fool.com/hi-paul-rather-than-give-you-specific...

Cheers!
Murph
Home Fool
Print the post Back To Top
No. of Recommendations: 1
I enjoyed reading your previous post that you shared a link to Murph :)
Print the post Back To Top
No. of Recommendations: 1
Giving careful thought to what you need for happiness often reveals that much of what you spend is virtually wasted. "Stuff" is purchased, used briefly, and discarded. Saving more is not difficult for those who are serious about it.



So very true. I'm probably happier at this point in my life than I've ever been. It took moving to be closer to family, taking a job that still pays well but gives me WAAAAY less stress, getting rid of over half my stuff, and buying a tiny house for cash.

I've been able to increase my retirement contributions considerably over the last year, and while I'm still looking forward to an early retirement, I don't hate work nearly as much as I used to.

Also having more time to do other stuff has caused further stress reduction--for example, I've chosed to start doing my own yard. I used to think it was easier to have someone else do it, but now I don't have to worry if I left the gate unlocked, did I put the fence around the plant I wanted to make sure he didn't mow over, did he mow it too short/too tall, did I leave money for him, etc.

I thought I was simplifying along time ago, but until I got more radical about it, I didn't realize how great it would be.
Print the post Back To Top
No. of Recommendations: 0
Uh, chosen, not chosed....
Print the post Back To Top
No. of Recommendations: 0
And as I recall, one who did that successfully is the OP, Intercst.

There was some luck involved.

PSU
Print the post Back To Top
No. of Recommendations: 1
PSUEngineer writes,

<<<And as I recall, one who did that successfully is the OP, Intercst.>>

There was some luck involved.

</snip>


Absolutely!

As Warren Buffett says, "I won the ovarian lottery." I was born a white guy in America -- and that puts me ahead of 99% of the world.

In my case, I was born to Irish emigrant parents (a construction laborer and a nurse) who had come to America 6 or 7 years before. I was lucky enough to grow up in a town (Hartford, CT) where though the schools were already in decline, taxpayers were still spending enough to provide a decent education. When the time came to go to college, both my brother and I were able were able to put together enough savings, scholarships and loans to attend top-flight private colleges (RPI and WPI.) Once there, I put my nose to the grindstone and got my degree in three years -- saving a year's worth of the exorbitant tuition and earning a big engineering salary a year earlier.

Here's my "Career Advice for Budding Early Retirees." that I wrote back in 1999.
http://retireearlyhomepage.com/careeradv.html

I just completed my annual review of Real-Life Retiree Investment Returns.
http://www.retireearlyhomepage.com/reallife13.html

For folks who retired as I did in 1994, you didn't need to do anything exotic to get wealthy. Just taking a 4% withdrawal from a 60% S&P500/ 40% bond portfolio would leave you with 2-1/2 times your starting balance after 18 years of inflation-adjusted annual withdrawals. Heck, even if you retired at the market top in 2000, a 60% stock/40% bond portfolio still has 80% of it's starting value after 12 years of withdrawals.

intercst
Print the post Back To Top
No. of Recommendations: 0
Thanks much, mj!

Glad you found it of interest.

Cheers!
Murph
Home Fool
Print the post Back To Top
No. of Recommendations: 0
<<,Heck, even if you retired at the market top in 2000, a 60% stock/40% bond portfolio still has 80% of it's starting value after 12 years of withdrawals.>>>

I left off the last part of that sentence.

Heck, even if you retired at the market top in 2000, a 60% stock/40% bond portfolio still has 80% of it's starting value after 12 years of withdrawals, the bursting of the internet and housing bubbles, and the economic collapse in the waning days of the Bush Administration.

intercst
Print the post Back To Top
No. of Recommendations: 1
There was some luck involved.

Some people make better use of "luck" than others. Perhaps they make their own luck.

I prefer the view that he took the opportunity to exploit a situation to his best advantage.

Too many spot the opportunities and fail to react. Others are not even aware of the opportunities.
Print the post Back To Top
No. of Recommendations: 0
There was some luck involved.

Some people make better use of "luck" than others. Perhaps they make their own luck.

I prefer the view that he took the opportunity to exploit a situation to his best advantage.


some luck..
opportunity is (mostly?) luck;
seeing it is smarts;
exploiting it (usually?) hard work *



Too many spot the opportunities and fail to react. Others are not even aware of the opportunities.



yup




* in my own case, I figure 85/10/5%
Print the post Back To Top
No. of Recommendations: 4
Absolutely!

As Warren Buffett says, "I won the ovarian lottery." I was born a white guy in America -- and that puts me ahead of 99% of the world.


That's not the luck that I was referring to. It was your investment in Dell. At that time, there were numerous PC makers. The Computer Shopper was the size of a Sears Catalog - several hundred pages long. Other computer manufacturers included Zeos, Northgate, and Gateway. Of the dozens of manufacturers to invest in, you happen to pick the winner. If you had picked Northgate, you may have had to work longer. Not much different than today where some people who bought Apple in the teens will say they knew great things were ahead way before the iPod was even on the drawing board.

Now I do agree with paul that you make your luck - in your case living way below your means and investing a large percentage of your income - but the size of your returns was helped out by some luck.

PSU
Print the post Back To Top
No. of Recommendations: 5
PSUEngineer writes,

Absolutely!

As Warren Buffett says, "I won the ovarian lottery." I was born a white guy in America -- and that puts me ahead of 99% of the world.

That's not the luck that I was referring to. It was your investment in Dell.

</snip>


While I bought Dell and Pfizer in the early 1990's (some would say that's the equivalent of winning the lottery) those two stocks didn't really take off until after I retired in 1994. Prior to my retirement, my investment returns only exceeded the S&P500 by about 1%. I can't say that it was "beating the market" that allowed me to retire early (though it made me wealthy after I retired). Minimizing my living expenses and saving played a much larger role.

Even if you just invested in a 60% S&P500/40% fixed income portfolio when I retired in 1994 instead of the much more volatile mix of individual stocks I held, you'd still have 2-1/2 times your initial portfolio value today after 18 years of inflation-adjusted withdrawals. I believe most retirees would call that more than comfortable.

intercst
Print the post Back To Top
No. of Recommendations: 0
I am soooo happy for you. I remember the stress you were under, and lately, stress caused by your concern for your mother. You certainly made the best decision for yourself as well as your family. I now see a "lightness" in your posts, showing the underlying contentment.

I still need to get rid of "stuff", and started with filling a 1-800-GOT-JUNK truck, but there's still more to be removed, hopefully in early 2014.

God Bless You,

Donna
Print the post Back To Top
No. of Recommendations: 0
Thanks, Donna! It's all good!
Print the post Back To Top