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ksmithFingers crossed I have one, the Slavic fatalist in me says, but besides that...
Received two books in the mail yesterday: HOW TO RETIRE ON LESS THAN YOU THINK and HOW TO LIVE WELL ON LESS THAN YOU THINK. Forgot the author's name, but iirc, he is now living well in Lawrence KS after having left the NYC rat race for a slower pace/lower cost of living/dream job. He's happy, and he wants to spread it around.
Read the books pretty much bing-bing, which means I was able to catch all the overlaps. The author favors moving from expensive areas of the country to less expensive areas, and offers links to various sites that allow you to calculate costs of living. He also has useful info about health insurance, taxes, and whatnot. The trick is to move to a less expensive part of the country that doesn't tax the hell out of your retirement income and offers health care/insurance that won't break you. Since some areas of the country offer one or two of these, but not all three, trade-offs need to be made and things get tricky. This may seem obvious, but sometimes it isn't...especially if you're settled in an area and loathe to leave family/friends and whatnot.
He offered shorter term suggestions as well, the old 'take your lunch to work and invest the money you save' which I have to say sounds a little unrealistic. My cafeteria lunch is subsidized, I get the sorts of veggies/salads/fish that I need to eat more of instead of the PB&J I'd no doubt wind up bringing, and the comment that you could take the money you don't spend on lunch, invest it at 6%, and at the end of 5, 10, 15 years...
Find me an account that offers 6% that isn't a mutual fund with a minimum investment requirement or an IRA that will tie up your money for years. I'm sure there are people who do this, and they can laugh at me right now if they wish, but sometimes you reach the point where you sit back and go wait a minute...
And I say that even though I may start bringing in a box of higher quality oatmeal and making it myself in the office microwave because the stuff they sell downstairs is like wallpaper paste by the time I get to it. That'll save $10 or so a week on breakfast, or about $480 a year which if invested in a CD paying 5%...
He also suggests scaling back to one vehicle, which I doubt I will do because it's so damned handy to have the truck. Makes a good argument for buying newer used vehicles or buying new and holding on for 10 years or until repair bills reach a certain point. Recommended high-quality secondhand shops and ebay and such for nicer things--I try to do this because I like to avoid paying full retail whenever possible. Made other recommendations I might try because I am not always the smartest person when it comes to short-term spending. One tends to fritter.
Some news that did surprise me was that he felt that the investment counselor standard of telling people that they need to be able to replace 75-80% of their income in order to retire was incorrect. He feels its mainly a ploy to get people to sign on with investment counselors and brokerage houses. I confess I've done that, but all it's costing me at this point is a $40/yr custodial fee for a Roth IRA, so I don't really mind. I like getting a second opinion, and I trust these guys.
Anyway, the author feels that it's not the gross you need to replace, but the take home. With some reservations, I think he has a point. The only reason I'm even considering bailing in 3 years is because I'm looking to replace 50-55% of my gross, not 75-80%. If I have to work, fine, but I would like it to be at something else.
The point of this ramble is that I think I may still be on track to retire in three years--barring a market freefall of Black Monday proportions--and the thought makes me happy. I have also worked out how much I would need to set aside in order to make up for the money I wouldn't be putting into the 401(k) should the dream...or even the semi-dream...contract ever drop in my lap, and I think I could make it. In other words, gentle reader, I think things are going ok. Knock wood and all that. Just give me good health, and I think I can handle the rest.
And, to be honest, the fact that I pretty much did it on my own makes me feel pretty good.
Received two books in the mail yesterday: HOW TO RETIRE ON LESS THAN YOU THINK and HOW TO LIVE WELL ON LESS THAN YOU THINK. Forgot the author's name, but iirc, he is now living well in Lawrence KS after having left the NYC rat race for a slower pace/lower cost of living/dream job. He's happy, and he wants to spread it around.
Read the books pretty much bing-bing, which means I was able to catch all the overlaps. The author favors moving from expensive areas of the country to less expensive areas, and offers links to various sites that allow you to calculate costs of living. He also has useful info about health insurance, taxes, and whatnot. The trick is to move to a less expensive part of the country that doesn't tax the hell out of your retirement income and offers health care/insurance that won't break you. Since some areas of the country offer one or two of these, but not all three, trade-offs need to be made and things get tricky. This may seem obvious, but sometimes it isn't...especially if you're settled in an area and loathe to leave family/friends and whatnot.
He offered shorter term suggestions as well, the old 'take your lunch to work and invest the money you save' which I have to say sounds a little unrealistic. My cafeteria lunch is subsidized, I get the sorts of veggies/salads/fish that I need to eat more of instead of the PB&J I'd no doubt wind up bringing, and the comment that you could take the money you don't spend on lunch, invest it at 6%, and at the end of 5, 10, 15 years...
Find me an account that offers 6% that isn't a mutual fund with a minimum investment requirement or an IRA that will tie up your money for years. I'm sure there are people who do this, and they can laugh at me right now if they wish, but sometimes you reach the point where you sit back and go wait a minute...
And I say that even though I may start bringing in a box of higher quality oatmeal and making it myself in the office microwave because the stuff they sell downstairs is like wallpaper paste by the time I get to it. That'll save $10 or so a week on breakfast, or about $480 a year which if invested in a CD paying 5%...
He also suggests scaling back to one vehicle, which I doubt I will do because it's so damned handy to have the truck. Makes a good argument for buying newer used vehicles or buying new and holding on for 10 years or until repair bills reach a certain point. Recommended high-quality secondhand shops and ebay and such for nicer things--I try to do this because I like to avoid paying full retail whenever possible. Made other recommendations I might try because I am not always the smartest person when it comes to short-term spending. One tends to fritter.
Some news that did surprise me was that he felt that the investment counselor standard of telling people that they need to be able to replace 75-80% of their income in order to retire was incorrect. He feels its mainly a ploy to get people to sign on with investment counselors and brokerage houses. I confess I've done that, but all it's costing me at this point is a $40/yr custodial fee for a Roth IRA, so I don't really mind. I like getting a second opinion, and I trust these guys.
Anyway, the author feels that it's not the gross you need to replace, but the take home. With some reservations, I think he has a point. The only reason I'm even considering bailing in 3 years is because I'm looking to replace 50-55% of my gross, not 75-80%. If I have to work, fine, but I would like it to be at something else.
The point of this ramble is that I think I may still be on track to retire in three years--barring a market freefall of Black Monday proportions--and the thought makes me happy. I have also worked out how much I would need to set aside in order to make up for the money I wouldn't be putting into the 401(k) should the dream...or even the semi-dream...contract ever drop in my lap, and I think I could make it. In other words, gentle reader, I think things are going ok. Knock wood and all that. Just give me good health, and I think I can handle the rest.
And, to be honest, the fact that I pretty much did it on my own makes me feel pretty good.
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no subject
Date: 2005-08-02 09:05 pm (UTC)When I tried to make it as a writer (in my early 20s) it became obvious quickly that it wasn't going to make me financially secure, or even solvent, any time soon. So I ended up doing something completely different (programming, then investing, then financial planning and portfolio management for others.) In theory I was just doing those things to reach a point where I could get back to writing, but since I retired a few years ago I've discovered I no longer have the frame of mind (or the uninterrupted time) to write anything longer than this comment.
While one could luck out like my doctor (whose first book, The Kite Runner, was on the NY Times bestseller list for a year and enabled him to retire to writing), the best way to assure early financial security is to always live below your means. The Millionaire Next Door (http://www.amazon.com/exec/obidos/tg/detail/-/0671015206/104-2848539-3583930?v=glance) looked at how most people who've done this actually live, and it can be summed up as keeping your eye on the ball (rather than status goods) and being willing to defer gratification for many years. My car, for example, is a '94 Geo Prizm I bought when it was three years old; the car itself has cost me about $100/month over the period I've owned it, and the savings over the $500/month I would have spent on the typical Silicon Valley vehicle (a leased Lexus or BMW) has been invested at about 10% return over the 10 years of ownership.
I know many people who can't imagine any different kind of life, but when I point out to them they could retire right now if they were willing to accept a downsized life in someplace like Costa Rica or Thailand, they start to think. Soon they'll realize they don't have to go so far, but by simplifying their lives they not only free up the time they spend working, they can pursue activities which don't pay the kind of salary needed to buy the latest toys.
no subject
Date: 2005-08-02 10:43 pm (UTC)*envy*
I do have a plan. It may not be the wisest plan, but it's mine and I want to stick with it. The goal is Out at 50. If I wanted to play it safe, I'd wait until 55, but I keep hearing that writing production takes a downward turn after age 60 and I'm 47 now. Losing 3 years is bad enough--I don't want to sacrifice 5 more on top of that, and I learned the hard way that a fulltime job and a book a year do not a happy Kris make. I can push for short periods of time, but when the months stretch into years...I know writers who do it, and all I can say is that they're better men than I am, Gunga Din. I've done burnout and it's not fun. I don't want to reach the point where I hate to write, and that's what I saw happening.
Deferred gratification is an issue. Once I started making a decent salary, I stopped making do with beater cars and bought new. First the pickup truck, which I turned over to my Dad after his beater van turned up its toes, and the Forester that I bought to take its place. After Dad passed, I got the truck back. I'm still paying off the Forester--a 401(k) loan, maybe not the wisest move, but I'm paying myself interest--and hope to finish that off next year. I keep telling myself that I should take that money that I had used for the payment and shovel it into a CD or money market. After all, I've done without it for this long.
My weaknesses are nice handbags, skincare, and computers--two new Macs last year, but I've started to look for the handbags and skincare on ebay. I've reached the point where I'm shoveling about 23% of my gross into retirement accounts, but I wish I had begun this exercise in diligence 10 years ago. That sort of thinking, unfortunately, didn't run in my family, and I tend to think that it helps to have exposure to that mindset at an early age. I felt fairly directionless in that regard until my 30s and even my 40s, and I know coworkers in their 20s who are much farther along than I could ever hope to be. I try not to think about it, because it can get a little depressing.
I should get a copy of TMND.
Simplicity is a key. A writer friend who recently retired from the day job found that she no longer felt the urge to buy once she started writing fulltime. She was able to do what she wanted, and she no longer needed to fill in the need with something else.
I'm glad you like my wriitng, and appreciate hearing that it's getting better. Much relief felt in Mudville, as I stare at the blasted iBook screen and struggle to form coherent sentences when once the paragraphs flowed. It harkens back to a discussion in
That's <lj user="matociquala">
Date: 2005-08-02 10:47 pm (UTC)no subject
Date: 2005-08-02 11:06 pm (UTC)no subject
Date: 2005-08-03 01:20 am (UTC)I think I'm aging on a gradient. My face is 30, my back and knees are 64, and my ankles died 10 years ago.
no subject
Date: 2005-08-03 04:20 am (UTC)Fortunately, I live far below my means and I put money in the IRA when I was in my 20s. I rolled it all over to a ROTH and paid the taxes, and am happily watching it grow tax free. 9/11 and the current doldrums aren't helping, which is why I'm about to do an analysis.
I agree, an educated opinion is useful--my financial counselor has had mostly good advice, over the years. I've done well with mutuals, not being able to watch stocks constantly.
But now I have a big problem. My health is sucking money at 33-50% of earnings, and I have no idea how the next six months will go. So I'm not expecting to be able to retire any time soon. In fact--I expect to be back in school, if the treatment gets my brain firing properly again.
So...may I suggest a little bit more of a pad than 50%? In case illness pulls a fast one on you? I'm but 49--but illness makes me feel much older, some days. And because of it, I've lost five years of writing time.
I didn't expect something to muck with my brain this much...
no subject
Date: 2005-08-03 11:42 am (UTC)I use the calculator on my company's 401(k) website to figure out savings projections. These calculations don't figure in the matching funds my company throws in, so all else being equal, the total in three years should be higher than I'm figuring. I also had the counselor guy go over my fund mix. He thought it was well-balanced--he wouldn't make any changes. He did say that it was a tad on the aggressive side, which might come back to bite me. But they're all quality funds, and seem well-behaved--they don't fly up quickly as the market goes up, but they don't plummet as quickly when the market falls, either.
Another thing I don't know is whether my company will offer any form of subsidized health insurance. Being under 50, some things aren't grandfathered in.
*Another* thing I don't know is where my company pension stands. I'm not including it in my savings projections. It should be there, but I'm not taking it for granted.
I'm not going to commit financial suicide. If things aren't right in three years, I'll stick it out longer.
no subject
Date: 2005-08-03 12:57 pm (UTC)But like I said, I won't be idiotic about it. I also figure I will have to work. I hope the work will be fiction writing, but I'm prepared to do something else if necessary.
no subject
Date: 2005-08-03 02:44 pm (UTC)I hope the new area you've transitioned into will make that possibility more enjoyable.
no subject
Date: 2005-08-03 04:46 pm (UTC)Hummm....
Date: 2005-08-03 07:41 pm (UTC)Re: Hummm....
Date: 2005-08-04 12:21 am (UTC)For me, the question is, how far can I stick my head in the gift horse's mouth?
Re: Hummm....
Date: 2005-08-04 02:09 am (UTC)I know someone who got their dream job in a work sense--but the people were a nightmare. Finally had to leave. So trade-offs happen all the time...