Today I have an update for you from a previous millionaire interview.
I’m letting three years pass from the initial interviews to the updates, so if you’ve been interviewed, I’ll be in touch. š
Today we chat with Millionaire 27.
You can/should read his initial post for specifics before you read this one, just so you have the proper background.
This update was submitted in October.
As usual, my questions are in bold italics and his responses follow…
OVERVIEW
How old are you?
I am 63 and my wife is 59.
We have been married 27 years.
Do you have kids?
We have one daughter who is 22 and a senior in college majoring in Nursing at a well-known Public University in the Northeast.
Upon graduation, she hopes to get into a 2-year Nursing Residency program and then perhaps graduate school thereafter.
What area of the country do you live in (and urban or rural)?
We live in a popular suburb of a large city in the Southwest.
What was your original Millionaire Interview on ESI Money?
My original story was MI #27.
Is there anything else we should know about you?
In my original interview I was pretty detailed about our life, career, and financial journey up to that point, and I also tried to respond to a number of questions in greater detail about what worked and didnāt work in several areas.
If you want a comprehensive background leading up to this interview, I would suggest going back and reading Millionaire Interview #27 before proceeding.
NET WORTH
What is your current net worth and how is that different than your original interview?
Current NW: $10,775,698 vs. $9,049,000 3 years ago.
I do these calculations at the end of every quarter so this is the latest as of 9/30/20.
Some people include a calculated value of company pensions in their net worth but I have chosen not to do this. My wife and I have combined pensions worth ~10K/month. Mine started paying out 3 years ago when I turned 60 and hers will start paying out in April, 2021 when she turns 60.
If I factored the value of these in our net worth, I feel like it would create a distorted view so I choose not to include it.
What happened along the way to make these changes?
Our NW is up roughly 6% per year since my original interview but was held back by one significant event.
In my original interview, I mentioned one of the big mistakes I made through the years was holding too much stock in one of the companies I worked for. In fact, both my wife and I worked for the same company (GE) and had significant company stock in our 401Ks. We compounded that problem by not reducing that exposure as the company performance began to decline through the years.
I mentioned in my original interview you should never āfall in loveā with your company stock which is exactly what we did and that made it very hard to let go. You have so much faith in the company and you mistakenly keep thinking they are just one more quarter away from a turnaround.
Over the course of the last 3 years we did systematically move out of the company stock but we did so at significant losses which undermined the overall growth in our net worth.
Our Home Equity is actually flat to 3 years ago even though we have paid down our principle. The reason for this is the market 3 years ago in our area was at a peak and probably over-valued at the time and has declined to more realistic values, but now appears to be coming back, and higher end homes are seeing a resurgence of interest in our area. I factored in the current value at about $250,000 less than what we showed 3 years ago.
On the plus side, a startup venture I helped get off the ground has done well and our equity, now fully vested, has appreciated substantially. Time will tell if we will be able to realize the value of this stock in a future liquidity event but the trajectory is positive and looking good for that to become a reality in the next 2-3 years.
What are you currently doing to maintain/grow your net worth?
From a savings & investment perspective, we continue to max out my wifeās 401K, including catch up funds, invest additional after-tax contributions which receive a company match, as well as contributing fully to her HSA.
This year she is eligible to participate in her companyās deferred compensation program, which acts as a second 401K with company match, but pays out as a future annuity. We will defer 25% of her compensation into this program in 2021 and may increase that to the max of 50% in 2022 and beyond. This perk may become even more valuable if the Democrats take control of government and taxes rise for higher incomes.
We continue to invest fairly aggressively for our age. Our portfolio maintains a growth focus with about 80% of our investible assets in equities.
EARN
What is your job?
I retired from my 36-year corporate career as a Sales VP in Medical Devices in 2015 at the age of 57 and, as mentioned above, became a startup entrepreneur with some former colleagues who asked me to help them start a healthcare technology company.
I stayed engaged through July, 2020 and was able to exit with fully vested stock after a merger and formation of a new company.
I continue to do some project work on a part-time basis as an advisor and investor in early stage companies but generally take equity instead of fees in these ventures.
My wife is a Sales VP with a large Medical Device company and says she plans to work another 5-6 years, assuming she continues to enjoy what she is doing and can put up with the stress.
What is your annual income?
2019 Income:
- Wife: $316,443
- Me: $76,681
- Dividends/Interest on investments: $149,465
Total Gross Income: $542,589
2020 appears to be about the same, based on YTD numbers.
My wife and I married in 1993. According to Social Security, my average annual income from 1993-2015 (when I retired) was ~$280,000 and her average annual income from 1993-Present is ~$170,000.
How has this changed since your last interview?
Our combined work-related income is up considerably from three years ago based on my wifeās career progression.
I originally had a contract with the startup for a salary and bonus of $300,000/year but that never materialized. It took us longer to get to revenue than we anticipated so I agreed to take equity instead of salary. The future will tell us if this was the right tradeoff.
My income now is from my pension and deferred salary from my executive plan at GE.
Fortunately, my wifeās income since the original interview has nearly doubled and our investments continue to throw off a nice amount of dividends and interest. She will also begin her GE pension in April, 2021 which will amount to an additional $5,000/mo.
Have you added, grown, or lost any additional sources of income besides your career?
I had just started my pension when the original interview was conducted and as I mentioned above, my wife will start her pension in April.
These are the only additional income sources outside of career at the moment, other than dividend and interest which continues to grow but is very market dependent.
SAVE
What is your annual spending and how has it changed since your interview?
OK, I have a couple of caveats in this area which many may or may not agree with.
We spend about $20,000/month of which $7,700 per month is P&I on the mortgage and another $800/month on taxes & insurance. I highlighted in my original interview that one of our potential mistakes was purchasing too much home and I went into great detail about our thinking on that subject.
For many reasons, I now look back and donāt feel quite the same way about this being a mistake for a number of reasons. We love our home and have been here for more than 16 years. In a COVID world, where we are forced to spend more time at home, we have really enjoyed the extra space and amenities. We are benefiting from some recent appreciation and growth in our part of the country and an uptick of interest and increase in prices of larger homes in our area.
I also have a different view on the mortgage and how much of it to attribute as a real expense when we look at how much is going toward interest versus principle. We originally started with a 30-year mortgage but after 5 years we refinanced to a 15-year mortgage at 3.5% and we make bi-weekly payments. We have 4 years left.
When I run an amortization schedule for the remaining 4 years, it obviously comes out that the majority of our remaining payments will go to principle and very little toward interest. Next year about 89% of the payment goes toward principle and that percentage grows each remaining year.
Since payments toward principle increase our Home Equity, it seems to me this is simply taking money from earnings and moving it over to Home Equity, almost like a forced savings plan. The only real expense is the remaining interest so I would argue the majority of what remains on our mortgage increases our equity and only the interest should be considered a real expense.
In addition, I do not consider our daughterās college tuition, room and board into our annual expenses. Any non-qualified expense we pay outside of the 529, I have included in our annual expenses.
We saved diligently for years in a 529 to cover the qualified costs so when each semester comes due, we simply tap the 529 to pay for it. Her 529 was well funded and when we make the last payment next semester, she will still have ~$140K in the plan. She does intend to go to graduate school at some point so she should be covered for that when the time comes.
I do include the 529 in our Net Worth calculations so NW does tend to drop when we make a payment but the 529 also appreciates in value if the market is doing well.
What happened along the way to make these changes?
I would say the biggest change is that we are spending more on our daughter and more on home maintenance.
Up until this home, I had never owned a home more than 5 years. Now that we have been in this one for over 16 years, I am learning what it is like to maintain a home once it gets some age on it.
Some expenses have gone down as a result of my retirement and me being able to do more around the house.
One change we did make a couple of years ago is our view on tithing to our church and charity giving. This has become a fairly significant added expense but it is one we now feel strongly about because of how much we have been blessed in our finances.
We tithe 10% of our combined job and pension related pre-tax earnings, exclusive of investments, to our church and we give additional dollars to the following:
- Monthly support for 3 orphaned children in India and 1 in Colombia
- Quarterly support for an African mission and 2 domestic missionaries here in the US
- Monthly support for Christian radio
- Regular support of volunteer hours and money to a local ranch whose mission is to integrate rescue horses with at-risk & special needs children/adolescents and PTSD military/first responders. The ranch is maintained entirely by volunteers and philanthropic financial support and is a real blessing to everyone involved
- Various other charities throughout the year in one-time annual donations
In total, we are allocating over $40,000 per year in these areas. This accounts for a large part of the increase in expenses from our original interview.
In summary, our expenses are up about $3,000/month from the original interview and most of this comes from our tithing/charity, home maintenance and our daughterās non-qualified college expenses. As I mentioned, some expenses have dropped so this reflects the net increase from 3 years ago.
INVEST
What are your current investments and how have they changed over the years?
- Joint Retirement Accounts: $4,428,272, (Employer Deferred Compensation, (6) 401Ks, IRAs, Bonds, Lump sum portion of a pension that my wife can take at 60 or roll into an annuity and take higher monthly pension payments)
- Joint After-tax Accounts: $3,168,319, (Company Stock & Vested Options/RSUs, Mutual Funds, ETFs, PE funds, REITs, Gold)
- Health Savings Accounts: $31,662
- Savings Bonds (EE & I-Series): $160,651, (Decreased from 3 years ago by about half to supplement emergency fund and make other investments)
- College 529 for daughter: $158,682, (Decreased from 3 years ago as we have made tuition payments)
- Angel companies Equity: $707,581ā¦ largest portion is my own healthcare startup. Increased from 3 years ago for new investments/equity and conversion of promissory notes to priced rounds and stock
- Cash & Money Market: $207,152 (Increased from 3 years ago to supplement emergency fund and future investments)
- Universal Life Insurance Cash Value: $77,379, (Increased from 3 years ago as annual premiums continue to fund the account)
- Home Equity: ~$1.4M (Appraised value ~$1.75M and remaining mortgage is ~$350K. As mentioned, this is the same as the equity value shown in my original interview. At that time, we noted an appraised value of $2M on a mortgage balance of $600K)
- Art and Coin Collection, plus other large-item personal belongings: ~$436,000. I left the value the same as 3 years ago even though some of the collectibles most likely would have higher appraisals today
- No other long-term debt other than the remaining $350K mortgage which is under a 15-year, fixed-rate loan at 3.5% and will be paid off by 12/31/24
- Iāve also made some changes in the portfolio mix to make it a little less aggressive. For years we were 90+% invested in equities and I have brought that down over the last 3 years to around 80%.
What happened along the way to make these changes?
I discussed what increased, decreased or stayed the same from 3 years ago and why in the previous question.
The retirement account returns were negatively impacted when we sold the company stock.
Our after-tax account performance has been mostly in line with market index growth.
Alternative investments have grown as our angel equity positions have increased and also increases in our investments in Private Equity & REITs.
MISCELLANEOUS
What other financial challenges or opportunities have you faced since your last interview?
I canāt really think of too many additional challenges or opportunities we faced since the last interview but I do know of a few things we still need to address. We did estate planning in 2011 but I recognize that a lot has changed and we need to schedule an appointment to update our plan. I keep putting this off and I know we need to get it done.
One of the things we are going to have to look at for the future are tax ramifications on our tax-deferred accounts and come up with a plan to minimize the future RMD tax impact, i.e. looking at Roth conversions.
I have given a lot of thought to Long Term Care and whether or not we should purchase a policy. For now, I have decided to self-insure.
I have a corporate Universal Life Policy that was paid by GE and I picked up the annual payments after I left the company. My last payment is in 2021. I have a death benefit of about $783,000 through age 65 and then it drops to $587,000 at 66, $392,000 at 67, and thereafter will pay out about $261,000 whenever I pass. The way I look at it, when I pass, my beneficiaries can use this money to replace some of the money we spent if we used LTC while I was alive.
As far as social security, we are still planning to defer until 70 for me and then we need to decide what to do for my wife. She hits her FRA at 67 and if we can still get her spousal continuation on 50% of my SS at that point, while continuing to defer her SS until 70, that may be the way to go. If not, we may just start hers at 67 but a lot depends on where we are with taxes and cash flow at that point in time.
I think one of our biggest financial challenges may be figuring out a plan to simplify our portfolio. We need to consolidate all the 401Ks with one firm and we are probably too diversified among many assets and need to think about pairing some of this back and also deciding on a risk tolerance that makes sense for our ages and financial situation.
I have plenty of advisors who would love to help me but Iām taking my time on finding someone Iām really comfortable with that I think I can trust to really do whatās right for us. I donāt think I would ever just turn everything over to someone else but I donāt mind paying for good advice, and knowledge I donāt have, to help me along the way.
The last change we made recently was to set up a Home Equity Line of Credit (HELOC). When the market started to fall apart in March, I was concerned about having another available source of funds that I could use rather than having to sell stocks or bonds as prices were declining in a downturn.
We were able to secure a $400,000 LOC @ the prevailing Prime rate with no adder, so the current rate is 3.25%. We had no fees or closing costs for this as long as we keep the LOC open for at least 3 years. I only plan to use this for short term cash flow management, or an emergency. It is just a nice safety net to have in place that lets me sleep a little better at night knowing it is there.
Overall, what’s better and what’s worse since your last interview?
My overall stress level seems a lot lower now than before. It really took me a while to get comfortable with being retired. I was so used to a fast-paced life, full of non-stop excitement and travel, that coming to an abrupt stop was very harsh to my system.
It also takes some adjustment when one of you is retired and the other one isnāt. Both my wife and I are comfortable with our roles and have found a good balance. She loves the freedom to be able to focus almost exclusively on her career advancement, knowing that I pretty much have everything else under control. I love being out from under all the work pressure and stress and being excited about what each new day brings.
Another thing that is much better is my physical health. Iāve tried to be more conscious about my fitness and about getting regular checkups so that anything that might pop up could be caught early. Now that I have passed 60, I understand I have to take these things more seriously.
I go to the doctor every six months for bloodwork and have an annual physical. I do have hypertension and take one pill a day for that. Earlier this year, I did my first colonoscopy and everything was clear so I am good for another 5 years.
I started a 6 day a week workout program on 1/20/20 that I have maintained up to the date of this interview and will continue on. I basically do six days of cardio on various pieces of equipment and I also have a 5.5-mile trek through my neighborhood that I try and do 3x a week. I alternate between 3 indoor workouts and 3 outdoor workouts, taking a day off in between.
On the indoor days, I add weight training to the workout. I have converted a bedroom to an exercise room that has an exercise bike, elliptical, HIT stepper, treadmill and a Universal Weight machine.
I track all my workouts and chronicle everything, including my steps recorded on my Fitbit. I am averaging 85,000 steps and 38 miles per week since starting in January. Iām not focused on weight reduction; Iām focused on fitness and making sure all the things the doctor tracks in my bloodwork are within normal limits.
The only time I am ever weighted is twice a year when I go for my bloodwork and physical. At my last check up in August, I had lost 15 pounds, my blood pressure was 122/80 and my cholesterol in 6 months had dropped from 198 to 181. The only thing out of the normal range were my HDL and LDL levels. My HDL needs to come up a little bit and my LDL needs to come down a little bit. I hope to be on track by my next appointment in February.
What are your plans for the future?
My immediate plans are focused around my yearly goals which I categorize as the 4Fs: Faith, Family, Fitness & Finances.
I want to continue to grow in my faith, love God with all I have, and be a good neighbor to others. I want to be counted on by my immediate family and extended family and help out with whatever they need. I want to continue the regular workout program that I have started, and become optimally fit and healthy. And last, I want to try and do the right thing with our finances to provide a worry-free retirement for my wife and me but also a lasting financial legacy to support our daughter and those who come after us.
In between, we will hopefully mix in some travel and I would like to take up golf again. Both of our mothers are still alive and they keep me kind of busy with things they need and I am happy to help them out. We may wind up having to move one or both of them closer to us and that may add to some of my āchores.ā
I also plan to spend more volunteer hours at the ranch I mentioned previously.
Given that you have a bit more wisdom and experience, what advice do you have these days for ESI Money readers?
You mean, given that Iām older than dirt what have I learned? š
I think some of the best advice I could give would be to try and avoid the big potholes in life. You can survive the small bumps and move forward but the big mistakes can have devastating consequences. I would categorize this as:
Avoid/Prolong the 4Dsā¦ Debt, Divorce, Downsizing & Death
Debt
This is something my wife and I made a conscious effort throughout our marriage to avoid. We pretty much have paid cash for everything weāve ever bought with the exception of our mortgage.
We pay off our credit cards every month to avoid interest charges. I bought a 1998 Jeep in 1999 and we still have it. I drove it until my daughter turned 16 and then passed it down to her and we will get her another car when she graduates from college in the Spring, and say goodbye to āOld Charlieā as she lovingly named him.
Charlie somehow lasted almost 23 years and we took good care of him, probably spending a little more on repairs than we should have, but he kind of became like a member of our family. I have a āyoungerā 12-year old BMW that I drive and my wife has a company car.
I would say that we are not frugal and not frivolous either. For the most part, we purchased whatever we wanted, even though at times we may have waited to make some of the larger purchases until we felt we could afford them without taking on debt. We tend to hang on to things a little longer before upgrading and we also try and avoid the āimpulseā purchases as much as we can. That has been a little more difficult since my daughter and wife discovered internet shopping but I donāt worry about that as much now.
In my original interview, I made one statement that seemed to draw more attention in the follow up comments than any other, āDelay instant gratification for future gratification.ā If I boiled everything down to one statement of success, this would probably be it.
Divorce
Iām sure I donāt have to spell out the advantages of staying married from both an emotional and a financial perspective. This can be the most difficult time in a personās life and one that can carry long-term consequences.
Having to split our assets would be very challenging for us, even though we would both come out OK financially. It is the emotional turmoil that would be hard to get past.
I did not get married until I was 35 and I am glad I waited to become a more mature person who had a better handle on what I wanted in life at that time than I did in my 20ās. I feel like I married my best friend. We were friends for a year and then dated for 2 years before we got married so I felt I knew her about as well as I could without living with her before marriage.
My best advice on staying married is never go into a marriage thinking either one of you is going to change the other. It rarely happens and making the effort will just create tension and animosity. What you see is what you get so you need to decide before taking that step that you can live with that person just as they are for the rest of your life.
Downsizing
What I mean by this is doing everything you can to avoid losing your job, and your income, and if you do lose your job, be in a great position to pick up something else as soon as you can.
People who execute, produce, stay positive and donāt complain, find other opportunity when times are tough. I went through this several restructurings in my career and quickly landed a new role when it happened.
Also, it is important to be as financially prepared as you can be, the older you get. Ageism is real and there does come a point where you wonāt be as attractive to prospective employers, no matter how well you performed in previous roles.
Death
I know this one probably sounds kind of funny but sticking around is kind of mandatory in order to have a pleasant retirement and a high net worth.
Take care of yourself physically, be kind to others, be careful in life, donāt do stupid stuff or take too many unnecessary risks.
Donāt text and drive or drink and drive. Look both ways before crossing the street. Get regular checkups.
In closing, Iād just like to touch on what I feel it has taken to achieve our net worth over the years. Ours is not the story you typically see when someone is able to attain a fairly high net worth.
From the stories of people that I have read about on ESI who really do well, it seems like they either owned their own businesses or they had an enviable real estate portfolio. When I married my wife at 35, we had a fairly small net worth, or another way to put it, over 97% of the net worth we currently enjoy was accumulated after we got married. I had around $200K in my 401K and maybe $100K in after-tax savings, and my wife had a small negative net worth. I remember paying off her car and her credit cards right after we were married, just so we didnāt have that debt to deal with.
We both worked really hard, mostly for large corporations. We took advantage of all of the deferred compensation programs that were available to us. We were blessed to have both pensions and defined benefits programs that we could contribute. We started to contribute monthly to our daughterās 529 college fund not too long after she was born and right up until she was ready to go to college.
We maxed out our 401Ks and after-tax IRAs, HSAs, and I took advantage of executive compensation programs that were pretty generous at the time. We made extra payments on the mortgage when we could and added to our after-tax savings whenever a bonus or a higher than usual commission check came through.
There were many trade-offs to getting in position for higher paying promotions. We moved several times and not always to places we were that fond of. We only had 1 child which to this day is probably my biggest regret. I would love to have had at least 1 more but we had concerns over how we would manage everything with two of us chasing very challenging careers.
We took some tough assignments that involved a lot of work to turn them around. We didnāt spend a lot of time developing social relationships outside of work. Our faith suffered because we werenāt very involved with church. Sundays were true days of rest for us. We both worked full-time but went back to school, my wife to finish her BS degree and me to get an MBA. I went back first and when I finished, she went back.
What worked for us was being diligent about the ESI principles which is nothing magical. It is mainly having the discipline to earn as much as you can, save as much as you can, invest as much as you and do it for a really long time. The magic of compounding and time work wonders for your Net Worth. The key is to stick with it and donāt touch it once youāve invested it!
Regarding Investing, I think the advice I will pass on to my daughter as she graduates from college and takes on her first full time job is to ākeep it simple.ā Just keep up with market returns and keep your costs low through index investing and let time and compounding be your friends.
I know there is a big debate on whether passive index investing and using a buy and hold strategy is really the best, but looking back, I would have been a lot better off if I simply used a few, well-diversified index funds and not worried as much about asset allocation across multiple sectors like the financial services industry tries to convince you to do.
I have tracked our mutual funds for more than 20 years and when I see those actively managed returns compared to the Index Funds we have owned over the same period; it really makes me sad to see how far below the actively managed funds are in overall performance. But I also have to remind myself of our overall net worth and not look back too much and dwell on what might have been. We are blessed and I never want to take that for granted.
So thatās it; 3 years later life is still pretty good in these crazy times. Onward and upward and best of luck to everyone.
Stay safe and healthy and God Bless!
The Millennial Money Woman says
Thank you so much for your sincere and candid insight. Congratulations on your daughter’s fantastic career path – and for reducing your stock exposure in GE. I completely agree that it’s important to avoid becoming emotionally attached to stocks. Emotions, from personal experience, can certainly cause you to make decisions that may not always be in your best interest (trust me, I know).
I think it’s incredible to see how after retiring, you continue to stay involved in the business world and start-up a new company. Incredible – and it proves that great minds always stay active.
Good luck on your continued journey!
Cheers,
Fiona
Paper Tiger (aka MI-27 & MIU-8) says
Hi Fiona, thank you for your feedback; I always enjoy reading your comments, both here and on your well-written blog, MMW. I agree with you that staying involved and keeping a good balance throughout retirement are keys to enjoying a healthier, happier life. I was busy in my work life so it just seems natural for me to keep busy in my retired life. The difference is, I get to pick and choose what I want to do and when/if I want to do it, which is true freedom in retirement. Each day can go as planned or as un-planned as I want it. The only thing that will make it even better is when my wife decides to join me in retirement.
Steveark says
I’m a fellow past millionaire interview subject, you have a great story. You might consider a donor advised fund. We also have been tithers on our gross income, which always made that our single biggest expense since our house payment was small. I think giving generously is a big factor in putting money in perspective, which leads to making more money.
Paper Tiger (aka MI-27 & MIU-8) says
Steveark, setting up a DAF is a great idea. I’ve been aware of this as an option but have not looked into it in any detail. I have someone who can help me with this and I appreciate the reminder that I should add this to my to-do list. Always enjoy your comments and appreciate your suggestion!
JeffB MI20 says
Vanguard has a DAF program you could investigate. At this point, I would just self insure for Long Term Health. You have the money to ride out $70K-$80K a year in care.
Paper Tiger (aka MI-27 & MIU-8) says
Hi Jeff, good suggestion on checking out the Vanguard DAF since we do have a brokerage account with them. This has been one of those things that I have been aware of but never dug into the details. I guess I just added a new goal for 2021 š
I appreciate your feedback and always enjoy your insights!
MI-192 says
MI-27, thanks so much for sharing your update. Life seems to be going great. I have two quick follow-up questions:
1.) Do you mind sharing what financial institution you used for your HELOC? Getting a HELOC at prime is really excellent
2.) Iām sending my daughter off to college in the fall. She will be about a 6-hour drive (or 1-hour flight) away. We have a good 529 in place to handle her qualified expenses. How much should I plan for the non-qualified or other expenses? Iām trying to prepare a budget and would like to know how much more I will spend beyond what the 529 plan can cover. I know it will vary, but getting a ballpark sense for this would be great. Thx
Paper Tiger (aka MI-27 & MIU-8) says
Hi MI-192, you may get two responses to your questions. I sent something out earlier but it does not seem to have posted. I used a link in my original response so perhaps that is an issue? Responses to your questions below:
1) We found Bethpage Home Lending on the internet. You can google their name and HELOC and you should go right to their site. I see they are still offering the same program which is great!
2) I will cut to the chase on this one vs. my previous response. My ballpark figure for planning purposes would be an additional $500-$1000 per month during the school year. I would say the lower amount works if your daughter lives on campus but if she moves into an apartment, those expenses tend to rise.
Good luck to her and you. I hope she has an amazing college experience and enjoys it as much as my daughter has.
ESI says
It went to my spam folder.
If there’s a link in a response it almost always triggers it.
I deleted it since you’ve answered here and we don’t need two of the same answers. š
RI26 says
Excellent interview! Thanks for sharing the details of your current life. After many decades of hard work and wise financial practices, it seems that you and your family have wound up in a great place. It is nice that you are able to enjoy the fruits of your efforts and retirement life, while also giving back to your community.
One reason I like the ESI Money site is the chance to gain insights from others who are in a position similar to mine. I have a similar net worth and pensions, took a similar path to wealth creation, have similar views on estate planning and financial management, pursue similar exercise routines, and even drive a car about the same age! At the same time, I am pursuing quite different paths on asset allocation, Social Security claiming strategy, tax optimization, and post-retirement work, among other things. It is invaluable for me to see what similar others (like you) are up to, so I can continually evolve and refine my thoughts on these topics. Thanks again for taking the time to write your interview.
I am the author of Retirement Interview 26 and the article on a Case for Claiming Social Security Early, on the off chance you may be interested in seeing how someone else in a similar position is approaching things.
Paper Tiger (aka MI-27 & MIU-8) says
Wow, we are kindred spirits in many ways! I look forward to re-reading your interview and gaining some additional valuable insights. It truly is great to be able to learn from others. None of us have all of the right ideas and I do appreciate these additional insights that allow me to benefit.
Zac says
Wow thatās a big olā NW. I can only dream of having 8 figures.
Paper Tiger (aka MI-27 & MIU-8) says
Hi Zac, our NW of 8 figures never started out as our goal. I thought if we could hit $5M we would be very happy. We were blessed to hit $5M when I was 55 so I thought if we could double that in 10 years, or when I originally planned to retire, that would be awesome. Because of the market growth over the last 2 years, we were able to achieve our goal a couple of years earlier than planned.
I will say the higher the number goes, the more nervous I get. Small fluctuations to the downside now mean big dollars so I have to be careful with maintaining our plan and perspective and not let my emotions dictate future decisions.
Chuck Kohout says
Congratulations on a well planned and journey. I love that you and your wife both want to be generous with your wealth and help others in need. Also, I have noted a theme among those that have reached a higher level of retirement wealth, that they tend to invest with higher levels of equities than the āprescribedā 50/50 or 60/40 plan. I think this is because they can weather a financial storm and still have plenty to live on. Just curious about where that level starts.
Paper Tiger (aka MI-27 & MIU-8) says
Yes, in our case, we feel we have enough passive income streams to cover expenses plus, my wife is still working, making a great income, and covering our benefits. Our goal is to create generational wealth to help out at least two generations that follow us. When the time is right to sit down with our daughter to explain to her the responsibilities of inheriting our estate, I hope to instill in her the desire to do for the generations that follow her exactly what we have tried to do. Who knows what the world is going to look like in years to come and if each generation will take the gift they have been handed and be good stewards of what they inherited then, our family tree can create a lifetime legacy of financial independence for those that follow.
At least, this is my dream and I am real enough to understand that at some point, someone will probably step off the path and take their own liberties with what they have been given. All we can do is create the vision, set the stage, and pray the good Lord will give those that follow us the common sense and purpose to do the right thing so that many generations can benefit.
Regarding our investments, as I mentioned, we are about 80% in Equities. Fidelity put out a study that showed going much beyond 80% doesn’t add much incremental return for the additional risk you take on so this seems like a good benchmark to maintain.
charlie @ doginvestor.com says
Congrats on continuing to grow the net worth. Things are never a straight line and even as we get older and wiser we still seem to make mistakes and learn!
Well done on the super impressive wealth you’ve built up over the years. Really a great example of ESI in action in your story.
Paper Tiger (aka MI-27 & MIU-8) says
Thank you, Charlie. It is most definitely a marathon and not a sprint. I think when it comes to investing, patience may be the most important attribute.
M-124 says
This is a really great share. When I realized that it was Paper Tiger , it made sense. Iāve enjoyed some of your comments throughout the years and itās no surprise to see the share. Youāve been a sort of defacto ābig brother ā being about 10 years or so older and having a net worth / corporate path that is very similar. Iām pretty good at taking good advice so your comments arenāt missed on me.
What I take away from this is ābalanceā. You have an incredible balance in retirement due largely to the choices you were able to make when you were younger (and older ). These are conversations Iām having with my son since he just took his first job out of undergrad. Discern between want/ need throughout life and KEEP a portion of what you earn – always.
Also the fitness and charity is critical ! Bravo.
Keep up the great work and thanks for the comments.
Paper Tiger (aka MI-27 & MIU-8) says
Thanks, Bro! On this day of inaugurating a new President the words, “united we stand and divided we fall” come to mind. We are all in this together. We seek great futures for ourselves and our children and being financially secure is an aspiration that lifts all boats. The more we can share and learn from each other the more we can lift each other. I thank the good Lord for ESI and this great forum we have to share ideas and dreams. God Bless!
JayCeezy says
“The end of all argument is results” – Tsifodze Ernest
Total King. Awesome. You are truly a ‘man for others’, Paper Tiger. Thank your for sharing your progress and solutions. Always look forward to your comments because they are so real, actionable, and unpretentious. The takeaway your shared here will be something I think about, and share again.
“…never āfall in loveā with your company stock which is exactly what we did and that made it very hard to let go. You have so much faith in the company and you mistakenly keep thinking they are just one more quarter away from a turnaround.” – MI27
This wisdom can be applied to so many things in life, and I have had many instances of difficulty in ‘letting go.’ Will take your example, going forward. Continued success to you and your wonderful family!
P.S. – most impressive of all is your blood pressure! So jelly, it is like a teenager! Well done, sir!:-)
Paper Tiger (aka MI-27 & MIU-8) says
JC, you are much too kind but it is much appreciated. Through the years I have come to realize that we have to take things as they are and not only as we wish them to be. Work for good change to make the future what you want it to be but also live and act in the present reality.
I always enjoy your thoughtful comments chalked full of wisdom and experience and look forward to continuing our interactions through ESI.
Woody says
MI-27 and JayCeezy…..Such great advice on company stock. I work in a Fortune 500 and receive a decent portion of my compensation in company equity. We have had great stock performance over the last decade in a stable industry. However, I only hold around what the company recommends for someone in my position and re-allocate each year’s distribution to reduce my portfolio risk. One of my MBA finance professors recommended this approach when studying the Markowitz efficient frontier referencing the use case of employees at Enron.
Paper Tiger (aka MI-27 & MIU-8) says
Hi Woody, I think you have a healthy outlook and plan for your company stock. In my first 7 years with GE, Jack Welch was our CEO. At that time we were the most valuable company in the world. We were the only remaining company that was part of the original Dow Jones. It was quite disheartening to see the fall of such a great institution and I think the bottom was when GE was finally removed from the Dow.
No matter how infatuated one becomes, there are no absolutes in life. This was one of those hard lessons I learned and I hope hearing my story helps others avoid the same mistakes.
JayCeezy says
Appreciate you and Woody’s observations on risk-mitigation, and glad Markowitz’ MPT is working well for him. Your note “no matter how infatuated one becomes, there are no absolutes in life” reminds me of this quote…
“Don’t fall in love with a hooker!” – Jay Leno
Paper Tiger (aka MI-27 & MIU-8) says
LOL, priceless!
JeffB MI20 says
Living in Houston, I saw first hand the Enron debacle of people having everything in Enron stock. I also know plenty of people with high portfolios tied up in Exxon stock as well. It’s never bad until it becomes bad. Any company can crash for almost any reason. It just takes one bad incident to crash the stock. Thank god my wife has many restrictions on what I can own, and 98% of our stuff in in Vanguard funds. I have 1 share of AIG and 100 shares of RCL and those are the only two individual stocks I hold.
Paper Tiger (aka MI-27 & MIU-8) says
Never too big to fail. I learned that the hard way. I still have a very small stake in GE and another small stake in my wife’s company, a little bit of Apple, and some stock in one of their major suppliers. These are the only public, individual stocks I own.
FYI, my wife is also from Houston!
Jane says
Congratulations on such a high NW. I think your 4Fs( Faith, Family, Fitness & Finances) are all it takes to have a happy and healthy life.
Enjoy all the wonderfull things that are coming your way.
Paper Tiger (aka MI-27 & MIU-8) says
Thank you, Jane. Life comes at you hard and fast and takes a long time to figure out how to best maneuver all of the twists and turns that come our way. We make mistakes and hopefully, learn from them. And hope none of them blow us up until our natural appointed time comes. Take care and thanks again!
Lambo says
Great update!!!
I have similar situation with Company stock, and looking back and thinking why didnāt I just buy index funds, it would have diversified risk and provided market returns!!!!
Also good advice on adjusting with one spouse retired… the transition includes more unknowns than expected but soon we will both be retired looking forward to what each day brings.
Paper Tiger (aka MI-27 & MIU-8) says
Thanks, Lambo. As I mentioned, the retirement adjustment was more challenging than I ever expected. But now, I am so thankful for this time in my life. I find myself not wanting to commit my time any more than I have to. The freedom of waking up every morning and letting the day just kind of unfold is absolutely awesome! And I think it will be even more rewarding when my wife and I can do it together.
Mark Clemens says
Thank you for sharing your story. I love your honesty and your life philosophy, the four F’s Faith, Family, Fitness & Finances are awesome!
Congrats to your daughter on her career choice, being an RN myself for the past 30 plus years has been nothing but fantastic.
God Bless you and your family on your continued journey!
Mark
Paper Tiger (aka MI-27 & MIU-8) says
Mark, thank you for your service to patients all of these years. I know it is one of the most difficult, albeit rewarding occupations one can have. I’ve been a part of patient care all of my life on the vendor side and I can attest firsthand to the difference a good nurse can make in a patient’s attitude and outcome. You guys are the true heroes and I feel very proud that our daughter has chosen to follow in those footsteps.
Best of luck to you and God’s blessings upon you as well!
NeuroProf says
Loved this post, and it so is nice to see someone grow their NW this high without owning a business or being really active in real estate. You sound like such a nice guy – someone anyone would be lucky to call a friend. š What I loved most about this interview (which was full of wonderful nuggets) is the way you and your wife supported each other. It reminds me of my parents. My dad went back to school (reluctantly) to get his PhD, and he told my mom that if he was going to do it, she should too! They both ended up with PhDs and went from being completely broke to retiring as millionaires. The key to their long marriage was the type of emotional support you and your wife seem to provide each other, something I’m lucky to have with my current partner. I did go through a messy and expensive “divorce” but as same-sex marriage wasn’t legal at the time, I lucked out. One of few times inequality benefited me lol (not funny, but kind-of funny I this particular case)! At any rate, really nice work creating a huge nest egg and rich emotional and financial life. Very inspiring.
Paper Tiger (aka MI-27 & MIU-8) says
Your family sounds awesome and one that I am sure would share a lot in common with my own. I too had awesome, hard-working parents as great role models. Both parents had their own careers and shared in the household and child-raising responsibilities. They were equal partners in every sense.
I do feel like I hit the “partner lottery” with my wife. No relationship is perfect but this really was one of the things where I think we both felt “failure was not an option” so we worked hard to manage through the difficult times together. I do consider success or failure as a shared responsibility; neither of us deserves full credit or full blame. We just try and deal with life as it comes at us and do our best to focus on one day at a time.
I’ve learned over the years to try and not take anything for granted. I try to make sure I tell my wife and daughter I love them every day. When my father passed away 6 years ago, I was fortunate to call him about an hour and a half before he passed of a sudden heart attack. We always ended every conversation with “I love you” and those were the last words we said to each other on that day. Ever since then, I try and always remember to stay in the moment and treat time as the precious commodity it is.
Thank you for your kind comments and best of luck on your financial and life journey.
Frugaloli says
That is an awesome NW!!! Congratulations to you and your wife. I hope to retire in the next few years and live off dividends. Can you please share your dividend strategy and a few of your favorites. Is your portfolio of dividends in index funds or individual company stocks?
Paper Tiger (aka MI-27 & MIU-8) says
Hi Frugaloli, I appreciate the good well wishes. I have not yet delved into individuals dividend stocks but certainly, the Dividend Aristocrats is a great place to start. Also, I remember a while back John did a lot of work to assemble a dividend portfolio of stocks that he invested in and that would also be worth looking up. In the ESI archives is a two-part article on “How I added Dividend Stocks to my Portfolio,” Parts I and II dated 3/27-28/20.
All of our current Dividends/Interest is coming from mutual funds, REITs, PE Funds, and some promissory notes through our Angel investments. We don’t have a defined Dividend Strategy that I consider a separate revenue stream but this will be something I look at when I am ready to reconfigure our portfolio for more income once my wife retires and we lose her salary/benefits. Some of our current funds are DVY, VNQ, FDGFX, XLU, PFF.
I hope this is helpful and wish you all the best as you gear up for retirement in a few years.
Frugaloli says
Thank you for your prompt response and for sharing fund names. I will check out the archives. My earlier post failed so hopefully this is not posted twice.
MI202 says
Awesome update! I currently have about 10% of my NW in company stock, and I sell off about $20,000 each year to keep that number down. I worked in downtown Houston when Enron blew up and remember people walking out of the building with a box and thousand yard stare. I don’t want that to happen to me.
On the 529 front, did you pay the qualified expense and take out a disbursement from the 529 or pay directly from the 529? My oldest is starting college next year, and I’m trying to find out one way is better than another.
Woody says
MI-202,
After the first couple of years of getting company equity as a direct part of my compensation paired with 5 or 6 years of 401K match in company equity, my exposure to company equity got to 29% of our NW. I have now paired it down to under 7%. I’m also very interested in a response to your 529 question, as my oldest starts college in the fall, too.
Paper Tiger (aka MI-27 & MIU-8) says
Hi MI202 and Woody, I can’t say for sure if there is a better way but what I do is wait to get the invoice from the university, and then I simply transfer the money from my 529 into my checking account, and once it is posted I then electronically transfer it from my checking account to the university. You have to look closely at the invoices as sometimes they slip some non-qualified expenses in the invoice and you have to break those out so you don’t take non-qualified money out of your 529.
I believe my 529 would have allowed me to transfer it directly to the university but I didn’t have all of the information I needed at the time my first-semester payment came due when she was a Freshman so I’ve just kept doing it this way.
JeffB MI20 says
My wife was with Arthur Andersen in Tax during the Enron debacle. The audit team was like 2 floor above her. Not a fun time in Houston. Downtown was decimated for a few years.
Phillip says
Paper Tiger,
“I highlighted in my original interview that one of our potential mistakes was purchasing too much home and I went into great detail about our thinking on that subject. For many reasons, I now look back and donāt feel quite the same way about this being a mistake for a number of reasons.”
I share this sentiment. I look back 16 years when we first bought our house and think I could have bought a cheaper place that was good enough and invested the difference. In hindsight, we may have had close to $1M more in NW. But we’ve enjoyed this nicer house more so I see it as a prudent indulgence. At least we didn’t spend the money on Porches and BMWs. We’re far from 8 figures but have enough to retire so enjoying the fruits of your labor along the way to FIRE makes a lot of sense to me.
Thanks for the follow-up interview and all your comments in past ESI articles. I enjoy your comments as much as ESI’s articles.
Paper Tiger (aka MI 27 & MIU8) says
The other day, out of the blue, my wife looked at me and said, āI really do love this house,ā. I realized right then that after 16.5 years if she still feels that way then every dollar we have put into it has been worth it.
You humble me with your comments and they are much appreciated!
MI-160 says
What a great interview. I remember reading your original interview and went back and read again before reading this. As MI-124 said, you are kind of like a “big brother” to me as well. Our younger daughter is a junior in HS and wants to go to school for Nursing, would love to know how she decided to pick the school she did. I also love your 4 F’s. I actually have a similar guiding document that I call the 7 F’s – Family, Faith, Fun, Fitness, Finances, Future, Friends. It really does help keep me centered on all things important to me. We are also struggling with the “big house” issue and can’t wait to move once our younger daughter heads off to school. We love the house, the view, our neighbors but it kind of stresses me out just knowing there is always something to do. Keep up the good work and exercise regime and I can’t wait to read more of your responses as “Paper Tiger” š
Paper Tiger (aka MI-27 & MIU-8) says
Thank you MI-160, you and your wife have an awesome story as well and great success for someone still in the prime of their lives. Regarding the house, I’m not sure what we will do once my wife retires for good. I kind of have this idea of downsizing to a couple of winter and summer condos or townhouses, maybe one near water and the other near mountains. For now, we appreciate what we have and will address that when the time comes.
Deciding on Nursing school was an interesting process. I don’t mind sharing with you that she is a Senior at Penn State. She was also accepted at the Universities of Florida, Arizona, Washington, Wisconsin-Madison, and Michigan State. The biggest difference was being able to go right into the Nursing School at Penn State rather than waiting to apply after your Sophomore year. In all the other schools they accept you for admission into the University but you ultimately still have to be accepted into the College of Nursing and there were no guarantees that you would be accepted.
At Penn State, they were more selective on the front end but they would accept her immediately into the College of Nursing if she were accepted into the University. Also, they do not allow transfers into Nursing so you have to be accepted from Day 1. You don’t have the option of changing majors into Nursing because they follow a very specific regiment all 4 years. They had about 2500 applications for 170 slots and she was fortunate enough to be accepted. We just didn’t like the idea that she might get halfway through another university and have to change majors if she didn’t get into the College of Nursing at the other schools.
I always believe God directs our steps and this was certainly a great choice for her. She has done awesome and had an amazing college experience. We are very proud of her and look forward to seeing what she will accomplish in her life.
Best wishes and continued success in your endeavors. I am confident your daughter will find the right spot that is specifically meant for her.
Clay says
Iām only at about just over half your wealth, age 50 with only the basic federal pension. I am not worried financially, but Iāve basically been working 7/days a week, 12 hours a day during the week (auditor) and this is what worries me most:
āIt really took me a while to get comfortable with being retired. I was so used to a fast-paced life, full of non-stop excitement and travel, that coming to an abrupt stop was very harsh to my system.ā
How long did it take you to get comfortable and did you have to make changes to get comfortable? If I donāt work I start to feel nervous about not working after a few days.
Iāll wait covid out, but when things get back to normal I would like to say goodbye to my career,
ESI says
I would suggest you begin developing fun activities/hobbies you enjoy or else retirement is likely going to be a rough go for you.
And you could always take another job in retirement — maybe something part-time in a field you really enjoy — if that helps soften the blow.
Paper Tiger (aka MI-27 & MIU-8) says
LOL, I just responded and we both have similar thoughts š Great minds think alike.
Paper Tiger (aka MI-27 & MIU-8) says
Hi Clay, I can certainly empathize with what you are thinking about. My wife feels the same way. She works crazy hours but is afraid to pull the plug on her career until she really “feels” ready to retire. She is concerned about not having enough to do in retirement and probably needs to hit maximum burnout to convince herself she is ready.
To answer your question, I think transitioning to retirement in my case had more to do with how it came about than the process itself. In my case, I did not choose retirement, it chose me through a job elimination. I was 57 and really didn’t worry about it that much at the time. I had a great track record and just assumed I would take a month or two off and then easily jump right back into something new and exciting. What I did not take into account was age discrimination. I wrote in detail about this in my original interview. The reality is companies don’t want a 57-year-old sales VP when they have plenty of candidates half your age waiting in the wings with a lot more tread left on the tires. In fact, most companies don’t want to hire a 57 yo from outside of the company for ANY position.
When this happened, I was fortunate to be prepared financially but I was not ready mentally or emotionally because I had not prepared myself in advance to think much about this next chapter of my life, beyond the financial side. You have the benefit of designing your plan and your exit so I would expect that to be much easier. Yes, you will still have to figure out how to allocate your time but the world is your oyster and there are many great ways to live the rest of your life, sans work.
I would start by doing some research. Simply Google, “Emotionally preparing for retirement” and you will have a wealth of information at your fingertips. I saw one from AARP on the list that looked pretty good. Also, click on ESI’s retirement link as John has written some great articles on the subject including a recent 3-part series.
In my case, I was lucky to be asked to help with a startup that was a part-time opportunity over the last 4+ years. It was nice because it still kept me in work mode but allowed me to get used to being semi-retired and then fully retired. I don’t know if it is possible to take a short term sabbatical as a trial run or to retire and hire yourself back as a consultant where you can pick and choose the number of engagements and time you want to still do work, but that could be a good option to help with the transition.
In my case, I wanted to fill my time with getting healthier, volunteering, home maintenance projects, helping out my family, re-engaging with my faith by joining a couple of small group bible studies, taking up golf again, managing our portfolio, support my wife by handling most of the household chores, etc. On some days I just want to lie around by the pool and do nothing and I enjoy afternoon naps on occasion. The nice thing about retirement is you can do as much or as little as you want and you really don’t lack for options if you are willing to put yourself out there a little bit and see what is attractive to you.
Again, I think my transition was tougher because retirement was thrust upon me and I had no time to prepare. I fully expect that your transition will be much easier but I do encourage you to do some pre-retirement planning and then when the time is right GO FOR IT. In sky-diving, the hardest part is taking that first step but the journey after that is AWESOME!
Take care, God Bless, and Good luck.
Clay says
Thanks for the detailed response, thanks to covid there is no way Iām taking the decision now. Hopefully covid ends before I build my wealth up to yours, then Iād have a new problem, how to spend it all before I die š
Jane Hladky says
Great story. Very inspirational. Our stories are very similar but we are not near where you are financially. I, too was in the medical device and pharma world, can’t say here in Canada our retirement benefits amount to much but my husband and I have saved diligently. We have close to 1.4 million in retirement savings. I am 58 and was forced to retire due to a work computer overuse injury. Good thing I qualified for a small disability amount to age 65. My husband is 61. He is retiring in March but starting another job. Current job is just too boring. New job will give him flexibility. Summers off, and eventually some 6 week periods so we can do some big travel. We will also have medical benefits which include travel insurance which saves us approximately $7000 annually. We raised 4 children. I believe my career could have progressed much more but I stayed primarily in sales because I refused to move to head office, etc would have been too tough with 4 kids so that was the trade off. I would not change a thing though. Our 2 eldest(25 & 30) are single, living together in a prior rental property. They cover insurance, utilities, taxes. We are not charging them rent as we want them to save diligently for their own homes. In Canada best to pay as much toward the principle upon purchase as we can’t write the interest off on our taxes. They both have over 120,000+ saved thus far. Our 3rd is in nursing school (she does want to go to med school but we will see, nearly impossible to get in, in Canada and will be a fortune to go to the US we will see what she decides and of course we will help financially) and 4th graduate grades 12 in the spring and has been accepted into Engineering for the Fall. Both have education funds so no liabilities there but only enough for undergrad. While in school we contribute $3000 annually to their investment accounts. This $ will be used for first homes , a wedding, etc. We want no surprises in retirement,
We have a fair amount of $ in real estate. 2 rental properties which bring in approx 2700 monthly after taxes, etc. We would like to divest of all properties in the next few years. We just don’t want the work anymore. We will have to pay some capital gains on these but will end up with nearly 1 million $ from the sales. Of that we want to contribute $150,000 to each of our kids to purchase a home. We’d rather give them $ now than later. Our primary residence is worth approx $700,000 and we purchased a nice vacation home in a place we love for $450,000 pre-Covid, got the deal of the century and could likely sell for around $600,00 but no way we love it too much. We have no debt so our net worth is around 3.8. Not bad for a sales rep and mechanic with 4 kids It was through hard work, diligent savings and debt aversion we got here. I, like you, paid off my husband’s loan when we got married. I graduated with an MSc, worked 6 jobs during school and graduated debt free, I have always been as my family would call it ‘cheap’. I was very poor as a kid and started working before I was 12. We definitely live below our means. My husband insists on still driving a 1992 Jetta but the safety is my concern so I’d like him to get a 2014 at minimum. We do mountain driving to get to our vacation home.
While we feel financially secure we get hammered in Canada with taxes and a financial strategy is definitely needed. I recently hired a fee only Financial Advisor who will help with a plan. I need to learn if index investing is tax favorable in Canada. I also chickened out pre-Covid and removed most of our $ from investments.I was nearly 100% in equities. I had done exceptionally well in the markets (22%+ returns) and didn’t want to loss all those gains. I have 1/2 back in but not sure how to get back into the market. Hopefully the financial advisor will have some ideas. Next step is to also hire an accountant. I have been DIY thus far but really need advice on sale of properties, etc. Re: charities – I do some volunteer work, will do more post Covid. We don’t give much away but I have some set up in our wills, for now we prefer to get our kids et up financially first.
Any suggestions on getting back into the market warmly welcome!
Paper Tiger (aka MI-27 & MIU-8) says
WOW, Jane, you have an amazing story. If you haven’t done a Millionaire Interview, you certainly should! I think you guys are doing AWESOME financially. To have amassed nearly 4M in NW and raising 4 kids, getting them through school (mostly), and continuing to financially support them on occasion is really admirable. Some folks may balk at that but I am entirely in your corner. I will continue to subsidize our daughter where it makes sense. Like you, I’d rather give her a hand up along the way than have to wait until we are parked six feet under to financially benefit.
Your husband’s new job sounds like a dream scenario. I would definitely continue on with work if I had a situation like that. I hear you about the work related to your real estate and understand the desire to get out from under that.
I think hiring a fee-only planner and getting some advice at this stage of your life makes a lot of sense. I have a couple of brokerage advisors that I work with. I just pulled some money out of a 401K and put it in a Traditional IRA and Roth IRA (after-tax dollars) and I am in the process of selecting funds back into the market. I plan to do it in tranches over the next few months so I will take my time putting it all back to work. With expected volatility in the short run, I am hoping a dollar-cost averaging approach and buying the dips will work. I do think the second half of the year and into 2022 could be a real boom to the market so I do want to get that money back in before it starts to accelerate. Obviously, I could be wrong but I’m still in it for the long term with this money so I am not too worried.
In terms of segments/sectors, I plan to invest in some of the areas that have not risen as much and should also do well under a Biden Presidency, i.e. Value, Industrials, Clean Air, Materials, Energy, Consumer Discretionary, Finance, and Healthcare. I am also looking to focus some on Mid-Small Cap and Emerging Markets, rather than Large and Developed.
Again, love your story and wish you all the best with your plans. God Bless!
MI-119 says
You’re story parallels mine in a lot of ways.
I too once regretted the big house purchased 15 years ago not from a financial perspective, but from a hassle perspective related to a lot more to repair, maintain and furnish. However I appreciate the joy it gave my wife, and our kids who lived in it essentially from birth to now high school years.
I felt the same way about the $300K+ spent on our 5 current vehicles (purchased lightly used) at one point too, but in the end it’s really not a big deal in the grand scheme of things, again outside of the maintenance and repair hassles given that time seems to be our most valuable asset especially when we’re working long, hard hours. We drive our cars about 10 years on average. I too don’t feel we spend too much or are too frugal – intentional spending helps avoid regrets.
Totally agree with tithe and faith, this connected with me the most. I tithe in time as well offering free medical services at a charity clinic again given the value of time, since I’ve been given more than I deserve.
Agree about divorce not only from the financial costs of the act, but also from the standpoint of the financial benefits of complementing each other in a successful marriage as my spouse is integral the the continued growth of our business, which has not seen a negative year since inception 14 years ago.
Your combined value in your retirement and after tax accounts are very admirable, as is a healthcare startup in your retirement. Thanks for all the great advice in your posts here.
Paper Tiger (aka MI-27 & MIU-8) says
Hi MI-119, first and foremost, thanks to you and your wife for your service to your patients and the medical community. You have dedicated much to the service of your patients. I was blessed to provide diagnostic imaging equipment to doctors like yourself for over 30 years and it was a very gratifying career. Your story is also very inspiring and one I enjoyed reading again.
The older I get, the fewer regrets I have. At some point, you just have to forgive your own mistakes in life and move on. Like they say, “It’s not how you drive but how you arrive” and I think that has to always be my takeaway. Being grateful for the blessings, no matter how they came about, is what really matters.
I wish you and your family continued success and thanks for reaching out and commenting!
Papa Jaypes (aka MI-254) says
Paper Tiger, what a wonderful update! Glad to hear everything is going well in retirement, and that you’re transitioning into this new chapter of your life.
I’ve always enjoyed your thoughtful comments in the ESI articles, and your original millionaire interview has been one of my favourites for years! In particular your first bullet point under ‘path to success’ advice deeply resonated with me, “Marry and stay married to your best friend. Invest time with your spouse/family just like you invest time in yourself and your investments” Not just a recipe for financial success, but also for long term life happiness, joy, and contentment.
From this update, my favourite quote was, “I want to try and do the right thing with our finances to provide a worry-free retirement for my wife and me but also a lasting financial legacy to support our daughter and those who come after us”. This gave me chills. Your level of support for family, charities and worthy causes is truly inspiring. As my wife and I continue to build our nest egg, and prepare to transition to early retirement, I can only hope we are able to attain the levels of generosity and giving you have shown.
Thanks so much for sharing your story!
Paper Tiger (aka MI-27 & MIU-8) says
Hi PJ, thank you so much for your kind commentary. I really appreciate it more than you know. My thinking has evolved on many topics as my life moves on. I think as we gain maturity we really do begin to realize that life should be more than just about ourselves and our own desires. Serving really is much more fulfilling than being served, just as joy provides a much greater level of satisfaction than happiness.
I can tell you are someone of conviction and strong beliefs and I have no doubt you will continue to be successful in your pursuit of early retirement and thereafter as well. God Bless you and blessings, good fortune, and good health to you and your family!