Hocus/others: an update on your FIRE status?

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ben
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Hocus/others: an update on your FIRE status?

Post by ben »

Hi Hocus! :D
I just re-read your "my plan" post and I think it is an interesting learning experience for the FIREes out there. Many of us (me included) use a well diversified portfolio with more equity exposure than you - so your more conservative approach (bonds/CDs/TIPs) is an alternative for some out there wanting less risk.

I enjoy to read info from people already FIREd and would appreciate if you add some comments on the emotional part too.

So save you some typing and others some reading:
Using (very) round nos you had $400k invested as per above and a paid off house. You have not (yet) cashed in on Passion Saving book or homepage. You have some CDs coming up for renewal. You are currently considering purchasing some dividend paying stocks.

Can you give us some status and comments on your current financial/investing status as well of course on the Passion saving project and when you expect it to be up and running (book and homepage).

My own status is that I recently reached my FI target ($1mill) invested mostly in a well diversified portfolio being about 50% in equity. As for the RE part I am not rushing it as every month adds padding to the nest egg.

Cheers! Ben
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Post by JWR1945 »

Ben wrote:As for the RE part I am not rushing it as every month adds padding to the nest egg.
This is a good comment.

Let me add that it is important for a person to retire to an improved lifestyle and not just to retire from gainful employment.

I have seen too many cases where it is obvious that an early retiree simply wanted out of the working world and had nothing else in mind. Some of them have been able to adjust, usually after six months or so. Others have become disillusioned and bitter (or so it seems).

I placed a great deal of emphasis on figuring out what I would be doing on a continuing basis after retirement. I was not concerned about any backlog of things that I wanted to do but never had time for. All of that can be done in two or three months. It is the daily routine that matters.

It seems to have worked out for me. I have had a great time during retirement from the very first day. My biggest adjustment was to look forward to Mondays, when the stores are open and when there are no crowds, instead of weekends.

Have fun.

John R.

P.S. In terms of hocus2004's finances, he could turn about half of the price of his current house into investment funds without cutting his standard of living if he were to move down the the Florida panhandle. A possible exception might be the quality of the public schools. (Okaloosa County now has the best public schools in Florida, which causes me concern about the other counties.)
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ElSupremo
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Post by ElSupremo »

Greetings ben :)
an update on your FIRE status?
5 years away and looking good! :D There are a few things that can upset my apple cart though. Those things have a small chance of happening but things have a way of happening just when you don't want them too. :roll:

ES
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Post by Mike »

I placed a great deal of emphasis on figuring out what I would be doing on a continuing basis after retirement.
My retirement was a complete surprise to me. My job unexpectedly closed down, and started paying me a small pension. I don't have any master plan, just take life one day at a time.
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Post by hocus2004 »

"I just re-read your "my plan" post and I think it is an interesting learning experience for the FIREes out there. "

Thanks, Ben.

"Your more conservative approach (bonds/CDs/TIPs) is an alternative for some out there wanting less risk. "

In ordinary circumstances, that would be a painfully obvious point. Given the controversy we have experienced, it is an observation that very much needs to be put forward. So thanks for saying that. With the words above you are putting your finger on the key thing that this is all about.

There's more than one way to win financial freedom early in life, and people should be able to hear about a variety of approaches on these boards. My approach may make little sense to some, but it may also make a great deal of sense to others. It is for those others to decide for themselves what they think, and to do that, they need first to be able to hear what I say and to engage in a reasoned back-and-forth re my ideas. It does not make me a "troll" that I have put forward an alternative approach.

"I enjoy to read info from people already FIREd and would appreciate if you add some comments on the emotional part too. "

I experience lots of emotions re the book and the publishing business that I am building in assoication with it. My sense is that that is not what you are asking about here, that you want to know about emotions I have experienced re the financial side of things. I rarely experience too much in the way of emotion re the financial side. My emotional energies are tied up on the writing side of things.

"Can you give us some status and comments on your current financial/investing status as well of course on the Passion saving project and when you expect it to be up and running (book and homepage). "

The book is in the hands of a woman who is designing the cover and the layout of the pages. When she is finished her work, it goes to the printer. I don't expect to have copies in my hand for several months yet.

2005 will be a year in which my focus will be on publicity efforts. The book is going to sell or not sell based on word-of-mouth support. I can't get any word-of-mouth until people know that the book exists. So I need to do things to draw people's attention to it. Of the people who come to know that the book exists, a percentage will check out the web site and a percentage of that percentage will purchase the book. That group will generate the word-of-mouth support that will bring others in over time. My job is to get the ball rolling, and that means generating publicity.

My expecation is that things will go very slow in the early months and then gradually pick up over time. Big publishers do it the opposite way. They usually aim for a big splash at the launch. I am following a methodical brick-by-brick strategy. It won't concern me if there is a small number of sales in the early going so long as those who buy are intense in their appreciation of the learning experience they enjoy. For my strategy, intensity of support is more important than numbers. If I get the intensity, the numbers will take care of themselves somewhere down the road.

I view the book and the business built around it as an asset that I am building over time. The asset had some value when all I had was a plan to write a book about financial freedom, but not too much. There are lots of people who have plans to write books who never complete them. Now that I have completed the book that I set out to write and taken care of most of the administrative steps that must be handled to get it up for sale, the value of the asset has increased. When my wife and I redo our plan in January, my expectatiion is that I will be increasing the figure that we use as the minimum annual income I will be generating from my writing ventures.
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Post by ben »

Hi Hocus :D .
You did not cover the "Can you give us some status and comments on your current financial/investing status"-part.

How have your cost picture remained - still a bit above budget? What have you done with CDs maturing? Any bonds maturing? Ready to pick some dividend payers Etc. Cheers!
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Post by hocus2004 »

"How have your cost picture remained - still a bit above budget?"

My sense at to what you are getting at here is that I have increased spending over time. My spending today is certainly "above budget" if you mean the budget that I had when I handed in my resignation from my corporate job. But when I redid my plan in earlier years I always covered the increased spending. So I was never "above budget" after the adjustments were made.

When we redo our plan in January, we will follow the same procedure. If the inflow numbers do not match the outgo numbers, we will need to make adjustments in the plan until they do. We can do that by increasing or decreasing the outflow or by increasing or decreasing the outflow, depending on the circumstances that apply. We have never had the same budget two years in a row. I don't expect that we ever will.

"Any bonds maturing?"

The bonds that I have are ibonds. There is a penalty if you sell these too quickly but there is not a penalty if you continue to hold them. My intent is to continue to hold the ibonds (as well as the TIPS) for a good bit of time.

"Ready to pick some dividend payers"

I will probably put a small amouint of money in some high-dividend stocks. I see some appeal in the strategy.

"What have you done with CDs maturing? "

I view the CD portion of my portfolio as the fluid portion. I use this portion to cover living expenses (I have never sold any TIPS or ibonds, and, when I purchase stocks, my intent will be not to sell for a long time). So some of the CDs were converted to cash when they matured.

I renewed a few CDs at lower interest rates than the ones that applied when I initially purchased them. I went for shorter-term maturities when I did this. I want to use this money to purchase stocks when they are available at more appealing price points. So I don't want to lock myself into the current CD rates for too long a time-period.

I have several CDs that have come due just recently and that I coverted to cash. That money needs to be put to work somewhere. I am leaning towards the high-dividend stock idea. My only problem with pulling the trigger on that one is finding the time needed to do the research that I want to do before committing money to it.

I have hopes that some time will open up in the next month or two. Probably I will allow a few ideas to perculate for the month of December, then I will run my ideas past my wife when we redo the plan in early January. If I get her buy-in, then I will go ahead and complete a transaction sometime in the month of January.

Got any hot stock tips, Ben? (that's a joke.)
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Post by ben »

He,he - Here is a hot tip: SOYL being a soil improvement company that have spotted the golf course market. A penny stock selling at 50 cents per stock! Load up the truck with this one (say $400k) and watch it double or triple++ within the next 10 months!! (at least that is what my day trader friend is telling me! :D ).

Lets check back on this post in Oct 2005 and see if he was right! :D
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Post by unclemick »

Another real screamer, I've been watching is FPL, Florida Power and Light - to see if the price dips below 70 and the yield passes 4%. With a beta of under 0.3 vs S&P -it's a real swinger, heh,heh. It's one of those I've been waiting on and off for ten years for it to get 'cheap'.
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Post by BenSolar »

unclemick wrote:Another real screamer, I've been watching is FPL, Florida Power and Light - to see if the price dips below 70 and the yield passes 4%. With a beta of under 0.3 vs S&P -it's a real swinger, heh,heh. It's one of those I've been waiting on and off for ten years for it to get 'cheap'.
FPL is a backdoor play on alternative energy, too, IINM. They have some of the largest investments in wind energy in the country. Link

B.
"Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things only hoped for." - Epicurus
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Post by ben »

Guys! your stock tips are lacking badly! :D SOYL now doubled since my recommendation and am told it should hit $2 within the given year (Oct 2005). :lol: :lol:
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Post by hocus2004 »

"SOYL now doubled since my recommendation "

This one may have the potential to go all the way, in my assessment. Of course, given how far it has come in so short a time, it would not surprise me to see the price stablize or perhaps enter a period of retrenchment that could last for some time.

Please feel free to check back with us in coming months to report on how my stock-picking advice is holding up in its first real-world test, Ben. If the price of SOYL either goes up or down or stays the same, I'm thinking that you and me might want to combine our energies into the creation of a "Crush, Stomp, Punish, Humiliate, and Obliterate the Market!" Board.

Don't get your hopes up, JWR1945. I don't think Ben and I are going to be looking for too much participation from Numbers Guys. My sense of things is that you would probably just slow us down.
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Post by ben »

SOYL takes some manly guts! :D No nos needed I agree! :lol:
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Post by JWR1945 »

hocus2004 wrote:If the price of SOYL either goes up or down or stays the same, I'm thinking that you and me might want to combine our energies into the creation of a "Crush, Stomp, Punish, Humiliate, and Obliterate the Market!" Board.

Don't get your hopes up, JWR1945. I don't think Ben and I are going to be looking for too much participation from Numbers Guys. My sense of things is that you would probably just slow us down.
I have copied one of my old posts from the FIRE board. You might find it helpful.

How to become an investment genius dated Fri Jan 24, 2003.
viewtopic.php?t=387
JWR1945 wrote:How to become an investment genius

Recently, on the Town Center/Have Fun thread, WiseNLucky said:

Glad to see you weren't just making fun of the more intellectually challenged among us, myself included!

I think that it is necessary to provide some shortcuts towards becoming an investment genius. I got most of these ideas from Mark Hulbert of the Hulbert Financial Digest. Hulbert once wrote about how Newsletter writers and others misrepresent their own performance. Almost all Newsletter advertisements will show that they are rated number one according to the Hulbert Financial Digest. Some of those claims are out and out lies. But others are subtle misrepresentations. In the spirit of Newsletter promoters everywhere, I offer you some tips as to how you too can become and investment genius.

1. Choose the right benchmark.

Usually, it is easier to ignore benchmarks. Just tell people that your investments are way up. But every now and then, someone will demand that you justify your claims. In that case, there is always some benchmark that you can point to that you have beaten. Just look through the various indices and pick out the most plausible. If you really have trouble, combine two or three so that it looks as if you have done well by varying your allocations. That is, if your portfolio has behaved almost as poorly as the S&P 500 for the past two years...in spite of your having been 100% in bonds for the entire period...make yours a balanced stock and bond portfolio. It only has a high current allocation in bonds. If that doesn't do it, throw in a high tech allocation as an aggressive growth component.

2. Choose the right peer group.

This is very common among Newsletter promoters. They compare their own performance against other Newsletter writers who have done worse according to the Hulbert Financial Digest. If you paid top dollar for a lot of dot coms, find others who did the same. Avoid making any comparisons with those who bought Microsoft or Cisco or Dell when they were cheap. If you cannot find anyone else who did worse, add some distinction or qualifier that rejects all of the others. Show that you had comparable performance in spite of your unique constraint.

3. Choose the right time frame.

This is one of the reasons that Hulbert seldom draws attention to misleading advertisements. In almost all cases, every Newsletter is number one...in some respect...at least once while it is tracked by the Hulbert Financial Digest. Yes, that may have been the single month of July 1993, but it is a month to remember and to advertise. The Newsletter promoter will avoid jail time.

In a similar manner you can always find a couple of specific dates for quoting your performance. So you do not use January 1 and December 31. So what? It takes time and effort to do that kind of accounting. You just get curious every now and then. You want to make sure that you are still doing OK. The fact that your starting date corresponds to a portfolio low is nothing more than an interesting coincidence. Actually, you only have to make sure that it is close to that date. There is always something that you can point to that just happens to be within a couple of weeks of that low. A financial statement is only supposed to show a snapshot. No single statement is supposed to give the total picture.

4. Make more than one portfolio.

Mutual fund companies do this all of the time. Identify your worst investments. Isolate them. Put them into their own portfolio and discontinue that portfolio. Absorb any left over assets into a new portfolio.

When you do this for yourself, it is much easier than for a mutual fund family. You do not have to have separate accounts or anything like that. You just need a distinction on paper. Survivorship bias is on your side.

5. Identify your winners as your failures.

Take your best two or three stocks and tell others that you bought them too early or that you bought them for the long term and that you are sure that they will do better over the next two decades. Nobody else has to know that these are your best choices. They will assume that they are your losers.

Notice that you do not have to complain. You do not have to blame others. (That is always dangerous because they might defend themselves.) You can take the high road. You can afford to be gracious. After all, you are an investment genius.

Have fun.

John R.
P.S. And yes: Index Fund investors on these boards can and do consistently beat the market.

I think that us numbers guy can contribute.

I checked. There really is a company SOYL and it does what Ben said it does.

Have fun.

John R.
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