Getting of the hamster wheel

ben · Post by **ben** » Wed Jul 21, 2004 3:47 am

Again I had one of those days in office where Dilbert episodes seemed to appear in real life in front of me!

Impossible deadlines, no respect for peoples free time, telephone conference with lots of buzz words and no action Etc.

In those instances I long for FIRE, and my medicine is normally to open my FIRE excel spread sheet to see my standing and progress towards my FI target. Same is $1mill. At least in my current circumstances (life happens!) - being single with girl friend having own income/savings.

I am on target to reach my FI target end this year and if RE i have 3 budgets - good, better, best - starting at about 2% W/R (living in Asia).

I feel that my well diversified portfolio will handle most - but still I believe I will have a hard time jumping from the hamster wheel even if reached FI and the job becomes to silly....

Also; leaving at my peak earnings time means that 1 year working NOW could be MANY years later if need to catch up after a horrible stock market having devastated my portfolio.

I see some having a count down almost to the DAY (and with years to go) so how did/do you handle this fear of the unknown?

Post by **ElSupremo** » Wed Jul 21, 2004 5:01 am

Greetings ben

I feel that my well diversified portfolio will handle most - but still I believe I will have a hard time jumping from the hamster wheel even if reached FI and the job becomes to silly....

If you have other interests you'll be fine. It seems like the ones who have the most trouble are those that lived for their work. You never know, but most folks also have some sort of income from part time work after retirement. I would think that could make a difference.

I see some having a count down almost to the DAY (and with years to go) so how did/do you handle this fear of the unknown?

Guilty as charged!

I have this big calendar hanging right by my desk that today says five years, 10 months and counting. I have no fear because my job has always been a forced necessity of my life. I do it as a means to an end and all of my passions lie in other areas. Which in five years and ten months I will be free to pursue to my hearts content.

Another pleasant development has been that due to developments unforeseen in my portfolio and elsewhere my count down continues to shorten.

It may only be three or four more years.

BenSolar · Post by **BenSolar** » Wed Jul 21, 2004 8:04 am

ben wrote:Also; leaving at my peak earnings time means that 1 year working NOW could be MANY years later if need to catch up after a horrible stock market having devastated my portfolio.
...
I see some having a count down almost to the DAY (and with years to go) so how did/do you handle this fear of the unknown?

I'm nowhere near as precise as ES and you with your spreadsheets and calenders. Boy, if I could have a good level of living at 2% WR, I would jump ship so fast they couldn't say 'man overboard' before I was out of sight. You are so well diversified that I can't imagine 2% failing. No fear!! I say go for it whenever you feel ready - you have planned well, don't waste years in the prime of your life building up a fortune you will never spend.

Regards,

Post by **ElSupremo** » Wed Jul 21, 2004 8:32 am

Greetings Ben

don't waste years in the prime of your life building up a fortune you will never spend.

That should be somebody's motto.

unclemick · Post by **unclemick** » Wed Jul 21, 2004 9:24 am

Fear/apprehension/worry is normal. In my case they took away my wheel(layoff). After being in the looking for a 'good' job mode for about a year - I noticed somewhere along the way the 'gears in my brain' had shifted to 'you don't have to work anymore' That was 1993 and counting her assets (Er financial) me and the SO had a net worth of 300-350k. Then she left her job in 1994. So far so good.

I seem to remember the comment - retirement ranks third behind death in the family and divorce on the stress scale.

Mike · Post by **Mike** » Wed Jul 21, 2004 10:42 am

In my case they took away my wheel(layoff).

Me too, my employer went bankrupt. I planned to retire at age 49 when I would have put in my 30 years, but retired instead at age 44 when the bankruptcy judge approved a small pension to supplement my portfolio.

Mike

ben · Post by **ben** » Thu Jul 22, 2004 1:37 am

ES: he,he - I like my spread sheets too for the motivational factor!

As for finding thing to do in FIRE my list is already so long that I am covered for many years - some of it relate to finance/fitness where I might have some income potential, while other like language and pilot training are pure cost - well guess my dive master certification can be used a bit. Congrats on the maybe 3-4 years to target!

Also; I do not have the whole identity crises going (we are what we do!) - so that is also not the block.

My block is purely the "do I have enough" block. If I had $2mill I (at least now) think I would be FIREd as fast as Ben2(he,he) indicates!

Thanks for the encouragement ben - point well taken.

Only issue I have is if I want to live in my Scandinavien home country... Then $1mill - even at 5% W/R would still only give me $25K AFTER tax. Not much in Scandinavia... (but a LOT in most South East Asien countries!).

Actually if what happend to Mick or Mike happened to me now - I again see myself FIRE too.

I guess I just feel like squeezing the lemons into a bit more lemonade before taking the jump. $1.2 mill?

Will keep the board updated!

Post by **ElSupremo** » Thu Jul 22, 2004 4:21 am

Greetings ben

My block is purely the "do I have enough" block.

No worries mate. Wal-mart is always looking for greeters.

ben · Post by **ben** » Thu Jul 22, 2004 5:05 am

No Walmart here... but Atomic-a-go-go-Bar need staff....

Post by **ElSupremo** » Thu Jul 22, 2004 6:15 am

Greetings ben

No Walmart here... but Atomic-a-go-go-Bar need staff....

LOL!

Now I wonder what goes on in the Atomic-a-go-go bar?

Sounds like more fun than Wal-Mart.

JonnyM · Post by **JonnyM** » Thu Jul 22, 2004 12:14 pm

Curious about those of you that are close and vasilating on the edge of ER. Would the decision be easier if you were approaching a specific payout, i.e. a certain permanent income forever after rather than trying to achieve a nebulous large pot of money that you will then draw from at what you "hope" will be a SWR. I ask because it seems that most of the FIRE contributors on the various boards talk endlessly of markets, allocations, swr's, etc. I appear to be in the minority in that my goal, my spreadsheet that I peer at every few weeks is about a monthly payout based on years of service, age, and the highest 12 months of salary I achieve during my career with the company.

Inflation Adjusted Pension seems to be what most of you call it, my company calls it a Defined Benefit Plan. It just takes all the inexactness out of the equation. It becomes very black and white. I pick how much I think is enough, work till I get there then leave. The plans are commonly called 2%/55. In reality I started rather late in life, yet I can still claim better than 30K in a couple years at age 52, and DW has already FIRE'd at same rate of payout (with COLA's). We think we can get along ok on this amount. If SS survives and gives us both a raise a decade later, cool, but not part of the planning. Did I mention medical is fully paid forever as well? Are you starting to think public service careers aren't so bad? The way you guys calculate SWR's at 2 to 4 percent wouldn't we have needed to save 60k times 25 or 50 to achieve same?

Wowsers that would have been a lot a dough? My calculator doesn't have that many digets. I'm getting between 1.5 and 3 million smackers. I need to go count my lucky stars now.

JonnyM

ataloss · Post by **ataloss** » Thu Jul 22, 2004 4:11 pm

johnnym, good point about the db pension plan with cola (and guaranteed health care benefits probably) takes a lot of the guess work away
best to have the plan from a reliable source (with taxing authority +- ability to print money)

peteyperson · Post by **peteyperson** » Thu Jul 22, 2004 6:50 pm

Jonny; fully agree. Congrats on your set-up!

Meanwhile don't take for granted that I at age 35 can pull any money from any retirement plans!

While a bit of my total net worth is in a company pension the rules state that I can touch them when 60 at the earliest. Even if stop working.

Have been playing with the thought of having an annuity as part of FIRE income - they pay about 5% inflation adjusted - but the fees and charges plus the lack of access to the money is not something I like.

Kramer · Post by **Kramer** » Thu Jul 22, 2004 9:14 pm

Hey Ben,

As a fellow single 30-something, I'm going to advise against pulling the trigger too soon.

You are earning a great income, and be careful about giving up such a good gig. Yes, working is hard. But you are benefiting greatly -- each additional year you work has a dramatic effect on your finances -- you save 2-3 years additional FIRE budget money, you build up your government pension a little more (if you have one), you don't withdrawal from your port, your port grows through interest and capital gains, and yes, you get one year closer to dying meaning one less year of FIRE to pay for.

So why cut it too close and quit as soon as you can when you are flying past and beyond your financial goals for little additional effort? Each year you work you are gaining equivalent five years FIRE income or so. Of course, there are diminishing returns for working more, but why cut it close?

You may get married (and divorced). You may have children. You may want to move back to your homeland someday. You may get tired of living in a foreign country on $20K per year (or your girlfriend/wife might). In 30 years it might get a lot more expensive to live there. It is always nice to have options.

Although I think a 2% withdrawal is safe for someone your age, I definitely do not believe a 4% withdrawal is safe (you are looking at 60 years, not 30 years). I think even 3% could be marginal in your situation (although I agree that you do have the best possible investment philosophy/implementation).

Unexpected things happen. People change. Circumstances evolve. Give yourself some margin.

Thanks for letting us give our two cents

Kramer

ben · Post by **ben** » Fri Jul 23, 2004 1:13 am

Great points Kramer, and I tend to agree on most of your points. Especially the "rack it in while you can" point!

But NOBODY should have to work after hitting 40!

ben · Post by **ben** » Fri Jul 23, 2004 1:22 am

Oh forgot to add: the 25K budget is just an initial budget - should my nest egg (hopefully!) grow I will adjust upwards.

For another view on cost of living in BKK (english teacher level!) - see this: http://www.philipwilliams.freeservers.c ... iving.html

Great homepage in general but the above is case study on 3 different life styles where the 3rd gets close to mine:

Martin has taken some good advice on board - "spend decent money on accommodation and you'll spend less on entertainment' simply because you'll enjoy relaxing in the comfort of your home with a video and a glass of brandy. Martin rents a serviced apartment on the outskirts of Bangkok for 15,000 baht a month. For this he does at least get a living room and bedroom and an apartment building with full facilities. Unfortunately, for the sake of convenience he spends rather too much time in the apartment restaurant, where meals are in the 80-150 baht price range. At the end of the month, apartment and food alone account for about 26,000 baht.
Martin never takes the public bus, preferring taxis at all times (7,000 baht) and likes to go out at least three times a week to either the movie theater, a pub, or a nice restaurant with friends (8,000 baht)
In addition, his weekly supermarket shopping sets him back another 2,500 baht a month. Martin is pretty well-traveled around Asia and can't really conjure up the enthusiasm for weekends away, but his one extravagance is reading. A regular browser in the international bookshops, newspapers, magazines, and paperbacks add another 3,500 baht to his monthly accounts.
Martin's monthly living costs are 47,000 baht ($1150) a month.

Bangkok Phil says
"Martin lives well. No doubt about that. He lives a lifestyle that your average Bangkok English teacher can only dream about. However, in my opinion he's spending far too much on accommodation. He could find a terrific house for considerably less than he's paying for that serviced apartment in the sky. I bet it's nice though.
I think that you have good examples here of the three main 'bands' - the 25,000, the 35,000 and the 50,000 lifestyles. As I said at the beginning, those people earning way over 50,000 baht a month won't be interested in this crap anyway.

Post by **ElSupremo** » Fri Jul 23, 2004 5:16 am

Greetings ben

But NOBODY should have to work after hitting 40!

100% correct!

There should be a law. Mandatory retirement at age 40 with minimum SS for survival needs and a national health plan. Yea, I'm sure we'll see something like that.

(Oh, and one free round of golf per week too!

)