Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview took place in October. Note: the photo in this post was taken by the interviewee.
My questions are in bold italics and her responses follow in black.
Let’s get started…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
49 years old, turning 50 in December 2020. Single female.
Do you have kids/family (if so, how old are they)?
No kids.
What area of the country do you live in (and urban or rural)?
Suburban. Just 15 minutes drive from the downtown Denver, Colorado.
What is your current net worth?
$2.75MM Net Worth
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
Financial Investments (Excludes home):
- $1,290,501 – 401K
- $262,184 – Roth IRA
- $525,224 – After-tax investments
- $43,560 – Cash
- $172,950 – Lump Sum Pension if I retire in Dec 2020
Total: $2,294,419
- Property: $459,671 – Primary Home (100% Paid off in May 2019. No mortgage)
I don’t count Social Security in my retirement calculations. But if I did, I anticipate $3,891/month starting at age 70.
Upon separation from my employer, I plan to do a direct rollover of lump sum pension payment into my Fidelity Rollover IRA.
I plan on using my after-tax investments and cash on hand when I retire at 50 with approximately $568K-$630K.
In early 2021, my plan is to allocate $150K of this bucket into cash/bonds so it acts as a 3 year savings account. The rest will continue to be invested in low/no cost index funds and dividends/capital gains will be going to the $150K account.
After I deplete my after tax accounts and when I’m 59.5 years old or older, I will use my 401K until it depletes. Then, use my Roth IRA.
I do plan to downsize my large house and yard to a 2 bedroom/2 bath patio home or townhome after I turn 60 years old.
EARN
What is your job?
Senior Healthcare Consultant.
What is your annual income?
$133K includes SUV ($1200 personal use fee yearly).
My salary is now about 77% fixed base income and 23% variable bonus. Historically, it has started early in my career as a 60% base/40% bonus and can shift to 77% base/23% bonus structure. The last 10 years has followed the latter structure.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
I graduated in June 1994 with a BS in Electrical Engineering and earned $36,600 at my first job out of college as a Sales Consulting Engineer. I thought it was a dream come true.
Here are earnings per my social security statement:
- 1994 – $18,480
- 1995 – $42,737
- 1996 – $55,564
- 1997 – $63,386
- 1998 – $52,793
- 1999 – $70,316
- 2000 – $73,531
- 2001 – $80,400
- 2002 – $64,881
- 2003 – $50,586
- 2004 – $15,925 *
- 2005 – $51,626 **
- 2006 – $80,851
- 2007 – $72,574
- 2008 – $80,557
- 2009 – $89,959
- 2010 – $83,771
- 2011 – $104,906
- 2012 – $100,162
- 2013 – $113,700
- 2014 – $116,407
- 2015 – $112,521
- 2016 – $113,108
- 2017 – $115,508
- 2018 – $124,631 Higher base by switching lateral position and superior 2017 performance
- 2019 – $131,676
- 2020 – $145,000 anticipated due to one-time superior 2019 performance
- 2021+ – $133,000 anticipated yearly
*In Spring of 2004, I quit my job and took a sabbatical for nearly a year to travel to 7 countries. My preview to FIRE.
**In early Spring of 2005, I came back to work in Corporate America but changed to healthcare industry.
What tips do you have for others who want to grow their career-related income?
I don’t know if I’m in a position to give career tips. However, I have only been affected once by a layoff in the last 26 years of employment so I think I was saved for a reason. In my case, it was a combination of being dependable, putting in the work, patience, taking calculated risks, and upskilling.
Dependability…just showing up on time on face to face meetings, online WebEx meetings, getting reports done on time, communicating when you anticipate being late are common courtesy but I’m always surprised by those that score low marks.
Putting in the work…sometimes, you just have to dedicate extra time in a new role even if it mean extra 4 hours/day to learn a new role, system, or client’s business processes. These hours of investment early on will pay dividends in the long haul.
Taking calculated risks…don’t be afraid to transfer your lateral skills in a new industry or take on new roles in same industry. In hindsight, I stayed in same role for over a decade in the same industry and it was a dead end job. I was young enough to make the leap but did not. However, I was much more willing to do that the last 5 years and it has paid off for me.
Upskilling…Take the lateral moves into a new role to acquired new insights which exposes you to new ways of working with other colleagues, clients, and work processes. I never realized how these lateral moves have been beneficial to me until I look backwards. They help me to identify business problems with a new lens and I often can come up with more sophisticated, streamlined solutions due to my exposure.
I also did a lot of networking, reading and research on my own time for work which gave me an edge.
What’s your work-life balance look like?
So much better since March 2020 due to COVID and now working from home.
I get to water the garden in the early morning or exercise. No long commutes. No overnights. No constant restaurant food while on the road.
I can hike, bike, and stand up paddle during weekdays when there are no crowds and pick the best weather time slots. Grocery shopping mid-week around lunch time is a pure joy. Meal prepping for the week is so much healthier.
This is intro to FIRE and I love it thus far and wondering if I should just pull off FIRE end of this year permanently.
I actually found out I’m more introverted than I thought so I really haven’t missed the social connections since March work from home situation.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
I was a landlord for 10 years up until May 2019 when I sold the rental townhome at above listing price.
Bought it for $115K in 1997 and lived in it and rented it out in 2009 for $200 monthly positive cash flow on day 1.
Sold it for $330K in May 2019.
In hindsight, I timed the sale perfectly before COVID.
My interests, dividends, and capital gains comes to approximately $6K/year.
SAVE
What is your annual spending?
$27K for core spending.
I had a detailed spending tracker from March 2020 to October 2020. The previous 6 years was via a tracker on Mint.com.
What are the main categories (expenses) this spending breaks into?
CORE SPENDING:
- Home (Property tax, Lawn/Garden service, supplies, maintenance, improvements, cleaning service): $9138
- Health/Medical: $6K
- Utilities (Cell, Internet, Sewer, Heat/Gas, Water, Trash): $3513
- Auto (Insurance, registration fees, gas, maintenance): $3500
- Food & Dining: $3222
- Entertainment (Sports, outdoor activities, hobbies, movies): $3000
- Personal: $2000
TOTAL: $30,373
DISCRETIONARY SPENDING:
- Travel: $10K
- Technology: $1K
- Charity/Gifts: $1K
- Education: $500
TOTAL: $12.5K
There is a lot of extra padding in all the spending above.
Do you have a budget? If so, how do you implement it?
I never had a budget. I always believe that money should provide options and freedom. Having a strict budget on a spreadsheet is a turn off for me.
What has worked well over the decades for me is the overarching theme of striking the balance to live debt-free (mortgage is paid off), living beneath my means, enjoying the here and now, and paying it forward with a stable future.
I started investing at least 6% of my pay into my 401K plan with my 1st job out of college to maxing both 401K and Roth IRA the last 8 years. I also regularly invest in my non-retirement account which is $2400/month this year.
This year as I turn 50, I’m also contributing the max of $26K to my 401 K using catchup contributions. I can do a backdoor Roth IRA contribution, but am hesitant since I have more than sufficient funds after I turn 59.5 years old.
What I’m more concerned about is having enough non-retirement funds for a comfortable FIRE from 50 to 59.5 years old.
How do you think I’m doing thus far?
For the last 6 years, I’ve used the Mint App as a budgeting tool which I monitor daily.
What percentage of your gross income do you save and how has that changed over time?
38% savings expected in 2020.
20% in my early 20s and 30% in most recent years.
What’s your best tip for saving money?
Read bit by bit some financial content daily to learn more about money.
Unsubscribed to your favorite vendors website (Ann Taylor, Sports Gear website, Amazon Prime, etc).
Turn off the ads on Facebook and other social networking websites.
Throw out those DSW Shoes coupons that come in your mail.
Buy your home as young as possible so you are committed to save and invest early. The fear of the bank taking it away from me for loan default is real. This causes you to build the mindset of earn, save, and invest early on. Also, the benefits of having real estate has been fully covered here on ESI blog.
What is your favorite thing to spend money on/your secret splurge?
Travel is #1 biggest category followed by Entertainment (Sports, hobbies, gear, season ski passes, state park pass, local lakes pass).
INVEST
What is your investment philosophy/plan?
Through trial and error, I found that no cost to low cost index funds are the way to go and I prefer large cap and technology sectors.
I still have some funds that are 0.82% in fees which I plan to turn into no cost Fidelity index funds by next year.
Over the last five years, I’ve slowly consolidated different accounts and merged it into Fidelity. I also have a Fidelity debit card which costs nothing in ATM fees since they refund me the ATM fee.
I also use a credit union account since it is convenient to withdraw lots of small bills while traveling overseas for tips and such (Vietnam, Laos, etc).
What has been your best investment?
My best investment was my Electrical Engineering degree.
My school loan was $10.5K which I paid off in the 1st year with the 1st job out of college.
Having a solid degree with a tough academic track is attractive to many employers. Also, it is one of those degrees that can launch you in many career tracks and not just engineering paths.
What has been your worst investment?
My worst are individual stocks such as PALM.
Remember Palm Pilot devices that we all thought were HOT? 🙂 I estimate I lost $20K over the years on these individual stocks.
What’s been your overall return?
Hard to say because I have consolidated from several institutions down to 2 and I don’t track it very closely so I would say 9%.
Most of it is with Fidelity and it says 11%.
How often do you monitor/review your portfolio?
Daily. MINT app primarily.
Fidelity401K.com as most of my assets resides there.
NET WORTH
How did you accumulate your net worth?
My pace is steady and I took calculated risks.
As you can see, my income is mostly my career job and I didn’t dramatically increase it over the years. However, regular investments over the decades has paid off.
I also bought my 1st townhome in 1997 at a good time and sold it at a good time in May 2019.
During the recession, I bought my current home back in August 2009 during a buyer’s market for a great deal ($265K) and now it is valued at $459K. Everyone told me not to buy but I went ahead anyways. I figured if I lost my job back in August 2009, then I would just find another gig.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
Earning is #1.
I’m not really high, but I think I’m above average for my peer group.
If I earned less, then it would be challenging for me to contribute over 30% yearly.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
I really got sick of Corporate America in 2004 and took almost a year sabbatical. I was living off of my savings, paid $500/month for COBRA medical insurance, and not contributing to my 401K.
I had only $300K net worth at the time and lived pretty decently on $24K/year. It was a temporary setback but I had a taste of FIRE.
I realized that a combination of lean FIRE and a lack of a structured daily life plan was not going to work. I learned then that I wanted true freedom financially and needed to formulate a plan for mental/physical engagement the next time I would FIRE.
What do you ESI readers think? Do you think my finances, hobbies, and self-education plans are sufficient for the long haul? Anything else I may be missing?
What are you currently doing to maintain/grow your net worth?
I’m putting my head down to focus on the job until the COVID layoff severance/medical package is offered and both parties accept.
I’m on auto investment path now.
I hope to no longer work beyond March 2021.
Do you have a target net worth you are trying to attain?
My goal back in 2015 when I came across FIRE concept was to be debt free by 50 and retire at 52 with at least $2.5M. I randomly selected 52 years old because that’s when my subsidized company medical insurance would kick in and they offer to bridge me to retirement AND if they have a layoff. Lots of “ifs”. Also, 52 years old is young enough to do lots of living but old enough to have accumulated a diverse range of work experience.
I found out they once again moved the minimum age from 52 to 55. Now, I’m thinking I need to just pull the plug since I achieved my goals and will not work for 5 more years. The only reason why I’m hanging in there is that there may be a nice severance package should they announce a layoff end of year that always comes with 1-2 years of subsidized medical insurance, collect annual bonus, offer to buy company car at reduced price, and collect unemployment insurance.
How old were you when you made your first million and have you had any significant behavior shifts since then?
Hard to say when because I didn’t track it that closely before using MINT.com which was December 2014.
I definitely had $1.45M net worth on January 2015 at 44 years old. But I would say at age 42 for $1 million?
I definitely crossed the $2M on April 2019 and at age 48.
My guess is that I would cross the $3M at 51 years old which is December 2021.
$1M at 42, $2M at 48, and $3M at 51.
Like everyone said before that it took a long time to get to the 1st million but much quicker for 2nd million and much faster to the next million.
What money mistakes have you made along the way that others can learn from?
I bought an used Jeep as my leisure vehicle while I had access to a company car.
Really dumb when you think of the extra car insurance, gas, maintenance fees, license fees, and etc.
Then, I sold it to a Jeep dealership and lost money. ($15K loss)
I dated some men that didn’t share my values, FIRE perspectives, aspirational goals for way too long. During this period, I wasted money, time, and energy. But, at least I didn’t marry them.
Various types include highly ambitious/spendy; fear of risks/very frugal; medium risk/not a planner. Thank goodness. I wished I recognized how much I value ambitious and planner types of men with FATFIRE way of life. Your life partner is key to a quality life so choose carefully.
What advice do you have for ESI Money readers on how to become wealthy?
The biggest purchase you will ever make is your home. Buy wisely based on your needs, good location, and stay there a long time.
Pick a career in an industry segment that has lots of immediate and long-term potential growth that will pay you well with benefits, provide stability, and still offer a good work life balance.
Little things do add up over time. Think of investing earlier rather than buy that awesome car right out of college.
Learn how to cook, meal prep, and good nutrition early on for it will be friendly on your waistline and purse strings. You have no idea how much I spent eating out in my 20s and 30s.
This may not be attractive to ESI audience. I’m not very good with my hands and do not enjoy mechanically building things. I wished I outsourced frustrating, mundane, and time consuming tasks earlier on in my career so I can recharge and focus on my career rather than spend 6 hours on weekends doing housecleaning, yard work, or YouTube video on how to’s and etc. I now gladly pay for these services and I gain extra 6 hours per week.
I use online shopping with no shipping fees for almost everything but groceries to save me time.
FUTURE
What are your plans for the future regarding lifestyle?
I had a sticker taped to the old fridge with the motto “50 and BE FREE”. To me, that’s the visual aspiration to retire by 50 years old with no debt. At least $2.5 million in net worth.
I achieved the debt free goal in May 2019 at around 48.5 years old when I paid off the mortgage and I crossed the $2.5M in January 2020 at 49 years old. I’m really close and may pull the trigger now that I’ve achieved my goal.
With the options that ACA medical insurance plans present to early retirees, I’m finding it very attractive to retire now as I know I have more than enough in safety cushion from a healthcare and financial perspective. Corporate BS is harder to stomach once you know you reached financial independence.
What are your retirement plans?
I plan to use my after-tax investment/cash funds ($528K currently) from 50 years old – 59.5 years old.
I don’t know when I will FIRE but it could be end of 2020 or March 2021 depending on the corporate severance/medical package I’m anticipating end of this year.
I estimate that my non-retirement funds bucket will grow from $528K to $630K.
Then, withdraw from 401K in my 60s, 70s, 80s. Take social security at 70 but I’m not counting on it. Then, finally withdraw from my Roth IRA.
I have many hobbies even now and I plan to continue to garden, cook, hike, mountain bike, paddle, ski, snowshoe, yoga, learn and travel. I have traveled to 32 countries already and intend to travel much slower during FIRE. Even if I retire this year, there probably won’t be travel plans until 2022 at the earliest.
One of my dreams is to take 6 weeks to walk the famous Camino de Santiago, spend a month in the summer in Whistler or Banff in Canada by car with mountain bike, hiking poles/gear, and stand up paddle in backseat, and take 2 weeks to travel in Europe.
I don’t own a road bike but I intend to get one and join local cycling groups for exercise and for social benefits.
Foreign languages is something I’m good at and I am multi-lingual so I can see myself spending a month in Spain being submersed in language school part of the day and touristing the remainder of the day. I have taken Spanish classes for over 7 years and plan to re-enroll.
I probably can see myself renting 1 month at a time in Philippines, Panama, Costa Rica. The idea of spending 2 weeks in July skiing in Chile is very high on the list along with returning to Whistler/Blackcomb or Banff, Canada to ski.
From a mental engagement perspective, I’ve been in awe during COVID at how many free educational online tools we have access to such as Microsoft Learn, YouTube, Yale University courses through Coursera in audit mode, etc…There are plenty of free book clubs on the internet to further drive intellectual stimulation.
I also plan to do another round of purging and minimalizing. The first thing I will ditch are work clothes and work materials.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
Healthcare is #1. However, I did run the calculators on the health exchanges and it is very affordable for me. But, for how long is the question?
Finding volunteer or activities that comprises of all 3 elements (pleasure, engagement, and meaning). I already signed up as a volunteer puppy raiser that matches service dogs with disabled veterans so they can live independently.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
My parents fought all the time when I was young over money. Both were spenders and lack the education and discipline to save and invest.
Their narrative wasn’t going to be my narrative. They always said they would travel when they retire but never did due to health reasons as they aged.
I really have the power to change this narrative and optimize the options in front of me.
Who inspired you to excel in life? Who are your heroes?
Both my parents were hard working folks without a college degree. They just put their head down and grind it out in some of the most mundane tasks.
I’m not sure if I remembered them ever complaining. They just did it because there were mouths they needed to feed.
Do you have any favorite money books you like/recommend? If so, can you share with us your top three and why you like them.
The Millionaire Next Door
is a 1996 book by Thomas J. Stanley and William D. Danko. I read it in my 20s and it opened up my eyes to what kind of life I wanted to build.
Aside from that, I like to glance at Forbes and Money magazines as well as browse through various FIRE blogs and investment blogs.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
I donate around $500 in non-cash contributions to charity yearly.
Another $100 yearly to certain causes for friends charity races, climbs, runs, and etc.
I will be giving significant amount of my time and ~$1K to my puppy raising volunteer project starting in 2021.
Do you plan to leave an inheritance for your heirs (how do you plan to distribute your wealth at your death)? What are your reasons behind this plan?
No, my plan is to live well and contribute to causes I believe in.
I have no children and my siblings are well off. My parents died a few years ago. So, no family members really need my money.
The charities that I would donate to in the future revolve around the great outdoors, animals, education, and immigrants.
Questions for ESI readers:
- Do you think my draw down buckets are reasonable? Any considerations that I hadn’t thought of?
- Is there anything else that I haven’t considered for a successful retirement?
Thank you for sharing your journey! I think you hit upon som every important parts – especially that if you want to get ahead in your career and if you want to earn more income, sometimes you’ll just have to put in the extra hours for a new role, learning new systems, etc.
You make another great point that small things add up over time – either good or bad. This point reminds me of a book I read recently, Atomic Habits. In this book, you realize how your daily habits can really change the trajectory you are on – either for the better or for the worse. Things in your life really do compound, no matter how small or seemingly insignificant they are.
Thank you so much for sharing, and assuming that you were able to stop working as of March 2021, I wanted to say congratulations to you as well 🙂
Cheers,
Fiona
“What do you ESI readers think? Do you think my finances, hobbies, and self-education plans are sufficient for the long haul? Anything else I may be missing?”
I feel that the ideal is not to retire from something (work) but to retire to something. When I retired at almost 56, I had many activities, including volunteer options, to go to. Through the years I have changed(?), evolved(?), moved on(?) to many other, different things. I find I am happiest when I am busy, perhaps even a little overbooked. I will be 73 this year and things are better than ever. Best of luck in retirement.
You are on the spot with your advice. It is something I came to a conclusion post my sabbatical in my 30s. I volunteered back in December 2020 to be a puppy raiser for a non profit organization that trains service dogs for free and match them with disabled veterans to enable them to live independently. I’m learning a lot and it provides structure hourly. Puppies have small bladders and they need consistency for training all the time. It has been the most fulfilling project (both corporate and volunteer) I have taken on and it has opened up many more social outlets with other raisers, trainers, ancillary staff, and neighborhood dog owners. I also have yoga, Spanish classes on ZOOM, hiking, biking, gardening and cannot seem to fit it all in.
Excellent story. Our paths and careers are very similar. Except for the fact that you are a tad ahead of me. As I said in my interview, no rock star stuff here, so and steady wins the race. Congrats. Your planning looks solid. Now that we are in April of 2021 we’d love to hear what you decided to do on the work front?
Thank you. I did retire early January 2021 and I’m really enjoying my early retirement. I’m on vacation right now and booked a “workation” special lodging package but the only work I’m doing is swimming, hiking, and sightseeing. 🙂
M122 asked the question I was curious about. Congratulations on retiring and thank you for sharing your story.
Congratulations! Your financial path I can tell is very well done, as I heard from a banker very “intentional”. At 50 you can retire and you did this all by yourself. Among all the postings that I have read in this site, I see a lot of areas we have in common and including the worst investment of the Palm ! I truly want to hear your plans, health insurance and retirement journey.
Thank you. Palm…what a pure joke! As part of the corporate package, I have 1 year of health/dental/vision insurance at the same rate as an employee. Nothing changes this year as compared to when I was working. Starting February 2022, I can start 18 months of COBRA or go on the ACA. I will evaluate things at the end of this year but I’m not worried based on my evaluations. My 3 months of retirement has been nothing but splendid and my net worth has significantly increased since this post was written in the Fall of 2020.
Congratulations you have worked hard and you deserve your success. You listened to your gut when you bought your house and ignored the nay sayers. I love all the things you enjoy, very similar to me. If you get to Banff, take an extra 2 hours and meander out to the East Kootenay Valley – Invermere, Fairmont Hot Springs. Weather is amazing, lakes are beautiful, bike trails amazing and way less crowded than Banff. I am not well versed on how the US accounts work but We were originally told to live off non-registered funds first but since our retirement plans in Canada are taxable we will take $ out of those between 58-71 so we will pay less tax as we draw them down in the future. This is now a recommended strategy from fee only financial planners. Leaving the $ in those plans pays nice fees, grows tax free but would eventually put us a at 50% tax rate. Again not sure how things work for tax on your restatement accounts.
Enjoy!
Thank you for all your travel tips. I never heard of those places you mentioned and will definitely look them up. The tax code is very fluid. You are right in assessing and re-evaluating all the choices in front of us.
Well done EE colleague! Can identify with being sick of Corporate America, so started a consulting firm at age 41. (Often say I retired then, just not FI yet but it worked.) Something you might want to consider if you get bored – the need and demand is there. You can do as much or as little as you like, and a great way to augment income if needed. Still dabbling at it here. Wishing you all the best!
Well hello there EE! I read your post and kudos to your tenacity and starting your own consulting firm. I will consider your option if I do get bored but I have been fully engaged in this early retirement since January and I don’t know how I had time to work. I just looked at my net worth today and compared it to what I had wrote in my post back in Fall 2020. It has grown significantly to the tune of after tax + cash bucket of $700K. This is my drawdown bucket for next 9 years and 3 months until I turn 59.5. My net worth is now at $3.2M. I’m not concerned about augmenting my income but more maximizing my quality of life and living life fully. What does concern me is having too much money once I turn 72. Who in the world wants to be the richest person in the cemetery? Not me.
Can you please please please!!! Go over how you negotiated a year of sabbatical? Was it just that you quit or did you negotiate a year off with your current job? I’m literally in the exact same spot as when you were. I’m 26, around $300k in NW, with maybe $20 – $24k in annual expenses if need be.
I want to take a year off to try my hand at my own projects and if it doesn’t work out, would always love the opportunity to come back to a job and get that steady cash flow.
Can you walk through the conversation? I would love to learn.
Yeah I would be curious to hear about this as well.
Maybe it was built into a corporate policy or something, but I would be interested in the details.
Also from an Employers perspective of how to structure and retain a good employee!
I closed a multi-year deal and I had the relationships and knew all the nuances of multiple stakeholders. I knew it would take them at least 6 months minimum to find my replacement and longer to get them up to speed. I offered to be of service during my sabbatical if they could keep me on as an employee on paper. I did not want nor did the company promised to not backfill my opening and retain the role for me when I returned. I knew I was not going to come back to that role nor even that industry. However, it is important to me at the time to not have an employment gap. I did not have sufficient funds to FIRE and knew i would return to work eventually.
Excellent story! Congrats have you pulled the plug and retired?
This should be an inspiration to all readers, slow and steady wins the race. I am amazed by your 401k balance. Unfortunately I didn’t max mine out early on, lots of noble reasons why but still didn’t prioritize it. I did maximize the match from my employer but not the total allowed and it shows in my balance all these years later.
Love your thoughts on travel! Have a blast you have earned it. I am 5 years out.
Yes, I pulled the plug in January 2021 and I’m so happy. I’m also surprised at how 401K can generate a million or more. If I had been working until 65, there’s no doubt in my mind that it would make me into a multi-millionaire 401K investor. Don’t worry about the past. Just keep on trucking and you will get to your desired destination in due time. Best of luck.
Oh I have more than made up for it but what I would emphasize to younger investors and readers is that once those years are gone you can’t get money in the tax advantaged accounts fast enough. It’s not just the compounding but the lost window of opportunity.
Again great job!
Great interview and this shows the progress one can make when you do start early. $27k for core spending demonstrates the difference having a paid off mortgage makes. The fact you still have $9k in associated housing expenses (above and beyond utilities) should really make one think about the cost of having a house above and beyond the mortgage payment.
Lots of good principles followed by MI234 in this interview.
Post 60, you’ll probably also have some excess cash after you downsize from your current home 😉
You are right that it is a significant cost to own a house. However, it is hard for me to put a dollar figure to the happiness I derive from it…1. Watching my dog do zoomies in the snowed in large fenced backyard. 2. Enjoying meals from fresh herbs and vegetables you nurtured in your home garden 3. Watching the sunlight reflect off the oak floors that I had installed 10 years ago 4. The light fixtures and upholstery is pleasing to my eyes. This is a short list but you get the idea how much peace and happiness a paid off house can bring.
MI234, I’m right there with you. My comment is probably more appropos for folks on the more extreme end of the FIRE spectrum.
Even if a house is not paid off (nearly 300 lbs of dogs at this guys home), it should be our sanctuary. The place where you can get away from the hustle and bustle of a busy life, not all of the time but when you want to.
We have a big decision to make later this year with the opportunity to potentially buy a home that is going up for sale which could be our forever home. A big southern home with the high ceilings, pocket doors etc. Kind of home where you expect the men to wear seersucker suits and the ladies to have parasols..lol. But it will be more expensive than anything we have owned to date. Decisions, decisions but not terrible ones to be in a position to make.
You got your stuff straight 😉
LOL. Seersucker suits, huh? Ladies with parasols? I can only imagine. If it is a house your family falls in love with, then go for it. I never regretted buy ingredients a house that has more amenities than I need or tailoring the upgrades to my desire. It is a sanctuary and one that I have spent more time in during early retirement and during COVID. It has brought immense pleasure and quality of life. The only downside to a house in a 4 seasons climate is that it isn’t a lock and leave when I plan to travel 1-2 months at a time. For instance, the sprinklers need to be blown out during the Fall and turn back on in May. The bushes and trees need extra water by hand. There’s also snow shoveling in the Winter. If I ever downsize, it would be not to save on housing costs but to enable my love of slow traveling which is new to me as a retiree.
Well, the seersucker suits life is out 🙂 That was short lived after I found out that without major renovations to the tune of 300-400k, monthly gas bills could be as high as $600 and electricity as high as $500, yeah…I didn’t fall with the last rain shower.
Good points on the house with reference to travel. The same can be true of pets especially if you have more than 1. I see from another comment you are not from the US. Where are you from originally?
this was great. If you know what things didn’t work previously (lack of structure), then hopefully you’ll be prepared for it this time around. I find I similarly need structure, but I also love having some form of income despite net worth being more than supportive of everything. There is something psychological about income > expenses so you can do impulsive purchases (not that you end up doing them). So you might find you like earning the occasional $ even if FIRE’d.
Things change, and in many ways it’s great to evolve and change your interests, your work, your hobbies and countries, and just keep growing the net worth. I think the issue around enough interests comes up when you feel that you’re stagnating.
Enjoy the workation, and the new hobbies and good friends to do them with =)!
You are right about the psychological about income vs expenses. I find myself looking and tracking my investment income much more closely since retirement. If it is significant, then it serves as a green light to proceed with home remodeling projects or leisurely pursuits. It is crazy but I have more than I need even without the investment income. In terms of stagnation, I never had a day since retirement that I felt bored. Quite the opposite. I developed this retirement monkey brain that jumps at all these ideas and things to do and not enough time slated to do them. I started a list before I retired to keep my monkey brain in check. Thanks for your comments and your insights are invaluable.
Congratulations on your early retirement! I always enjoying reading about women succeeding with FIRE. We have A LOT in common (retirement interview 15). Camino is on my list too! You definitely have more than enough $ given your annual spend. One area I think about is having too much $ in tax deferred accounts. At the rate your investments will grow by RMD time, perhaps this concerns you too. I’m thinking of starting Roth conversions in a couple of years.
You are right that it does concern me. My 401K account is now at $1.72M and I’m 50 years old. It doesn’t take a rocket scientist to do the calculation to predict the amount when I turn 72. I made too much money this year due to the severance package and I plan to do some Roth conversions next year. This is of course a great problem that you and I have in common. Congrats and Buen Camino as they say.
WOW!!! WONDERFUL INTERVIEW! One of my favorites! Single female with nice chunk of money who at 50 just retired. You WILL have a great life as you have enough money, young with your health, has the right priorities. I love that you did this all on your own and also that you love outdoor recreation. I am impressed that you have traveled to so many countries and speak so many languages. Also, do not be afraid to stay single if the right person does not come your way. You will have a blast with your priorities and your wealth. You do have enough to live on without taking out from your principal dollars as you are not a big spender although travel could take lots. Your stocks if left in should grow enough to take care of that.
You are very interesting to me, I would love to follow your life. I you so choose, you could give ESI your Facebook address so I could watch your life. They could give that to me. Thanks for the wonderful interview. I leave very few comments but had to on this one.
A big Thank You to ESI for the wonderful website.
Thank you for the kudos. If I can do it as a foreigner to this country, then almost anyone can do it if they make the right choices in life. I have more options in life now than I ever did before in all aspects of living. I plan to stay happy and single. Thanks for comments.
My wife is an adjunct professor at a local college and this hit home:
“Dependability…just showing up on time on face to face meetings, online WebEx meetings, getting reports done on time, communicating when you anticipate being late are common courtesy but I’m always surprised by those that score low marks.”
75% of my wife’s college students are total slackers that can’t (or won’t) follow the simplest instructions like getting projects in on time. Their writing is atrocious and they have no drive whatsoever. When they hit the workforce. reality slaps them in the face because that attitude does not fly in the real world. I don’t know if it’s a combination of how kids are raised these days and being coddled by their teachers, but I really do worry how they are going to make it.
Wonderful interview and congrats on pulling the plug! Any tips you could share on making sure you were able to get and negotiating the severance? It’s my dream to have something similar to help ease me me into retirement.