Author Topic: Is Early Retirement even a possibility for me?  (Read 912 times)

Dibgoat

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Is Early Retirement even a possibility for me?
« on: October 12, 2017, 04:31:05 PM »
Hi all,

I'm brand-spanking new to the forum, and I'm a teeny bit overwhelmed by the number of posts... but I'm hoping I can find a supportive and constructive audience here. I've been reading MMM obsessively for maybe a month, starting from post #1. (I'm still somewhere in 2013, because I'm determined to read every single one.)

I badly want to be able to make changes in my life so I can retire early (I'm currently 27), but the more I dig into the reality of my situation, the more doubt and worry creeps in. Hoping some of you wiser Mustachians can shed some light on how feasible ER would actually be for me.

Right now I work for the public library, making $22.85/hr full-time (which is 77.5 hours every two weeks). However, I have always wanted to be a creative writer, and have been planning to transfer to a 70% position at the same pay rate (about 54.25 hrs every 2 weeks) in order to give myself more time to, you know, actually write. Added bonus: my current job requires me to drive, since I'm essentially a substitute librarian, whereas the 70% gig would allow me to bike. It'd be about a 40 minute ride, but it's almost entirely bike path, and I am fiercely determined to make it a reality.

But the drop in take-home pay is going to be rough. I don't foresee myself spending more than I earn (I've always been frugal, if not at MMM levels), but having done some basic math, I'm not sure if I could save 50% of what I earn... and even if I did, how long it'd take for my savings to actually allow me to retire, given I'd be saving less than 10k/year.

Neither my partner nor I currently have any debt, I have about $35k in various accounts, and a year's worth of contributions to the state pension plan. We split expenses 50/50, and I pay about $600/month for rent/utilities/internet.

Oh, and we want to buy a house soon. Prices in the area (Madison WI) vary, but we'd probably get something in the 200k-350k range.

My partner's job is salaried, and before taxes his yearly income is about $70k. If I could get him on board, I'm pretty sure we'd been on easy street to ER... but I don't think he's open to the idea right now, so I'm currently trying to figure out if I could make this work out on my own.

I hope this wasn't a huge info dump! Please let me know what you think, and if there are any crucial pieces of info I left out.

Thanks, all <3

CNM

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Re: Is Early Retirement even a possibility for me?
« Reply #1 on: October 12, 2017, 04:56:06 PM »
Hello and welcome!
In order to see what your situation is, can you please write out your monthly income, your monthly expenses, and the value of any assets?  Then, do the same with your 70% employment?  That'll be way easier!

lifeanon269

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Re: Is Early Retirement even a possibility for me?
« Reply #2 on: October 12, 2017, 05:20:06 PM »
The fact that you have no debt, $35k saved up in various accounts and a pension all at the age of 27 means you're already ahead of the vast majority of Americans. So yes, early retirement is definitely a possibility for you. It is just a matter of how early you'd like it to be.

Without knowing much else about your budget and income, I'm going to say that purchasing a house worth $200k-350k would put a serious damper on your early retirement aspirations. That's quite a hefty mortgage for a home and I'm sure in Madison, WI you could probably find a cheaper house for much less that wouldn't be as large of a financial burden. I'm not sure how much searching you've done, but I'd suggest you open your mind to some of the cheaper options out there when you start getting serious about house hunting. You'll probably be able to find some very nice homes for much less than that.

Also, talk with your partner to at least come up with a plan so that you're working together. Even if he's not onboard with early retirement, if you can make an agreement to work together on a budget so that both of your goals are being met, then that will go a long way toward making you both happy. Finances are a big part of a relationship and it would suck if your retirement aspirations fell short because of someone else or if you wanting to retire early caused a rift in your relationship. Especially if you two are looking to purchase a home together.

At first, my wife wasn't completely on board with early retirement, but after the first year I showed her how much we saved up together and she really saw that it could actually be a reality and I wasn't just making stuff up. She is totally on board with it now and that just makes things so much easier from a financial perspective. We're now both on a comfortable budget together and that makes saving up a big chunk of our income (+60%) so much easier (it doesn't even feel like we're being frugal).

I didn't get into this early retirement thing until I was 33. So you've got about 5 years on me already. The biggest factor in retiring early is to not caught up in lifestyle inflation from the beginning. So if you can keep that under control, then you'll always be ahead of everyone else. Being young like you are is a big bonus.

slappy

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Re: Is Early Retirement even a possibility for me?
« Reply #3 on: October 12, 2017, 06:04:00 PM »
200-350k is a huge range. When I bought my house, I was making a bit more than you, and our top end was 180k. We ended up paying $160k and our mortgage was $160k. Why do you guys wants a house?

Is your writing eventually going to produce income?

ixtap

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Re: Is Early Retirement even a possibility for me?
« Reply #4 on: October 12, 2017, 06:19:16 PM »
You plan to cut your work hours to have more time, but add half of that back in with the commute?

kpd905

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Re: Is Early Retirement even a possibility for me?
« Reply #5 on: October 12, 2017, 06:26:01 PM »
Buying a house for $350k with a combined salary of $100k would probably kill your early retirement chances.  Don't forget about the property tax, maintenance and utilities.  We bought a house for under 2x our salary near Milwaukee and it is still costing me more than I want to pay.
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Laura33

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Re: Is Early Retirement even a possibility for me?
« Reply #6 on: October 12, 2017, 07:04:05 PM »
First, I suggest you go to the Case Studies sticky and follow the template there -- there is a lot more detailed info in that template that will give us (and you!) a better sense of your true income/expense.

At the highest level, FIRE is almost always an option; you just need to decide if you want it badly enough to make the requisite tradeoffs.  The key thing to remember is that life is typically an "or," not an "and":  you can work part-time to free up time for something else you enjoy; OR you can buy an expensive house; OR you can save at a high enough rate to FIRE in 10-20 years; etc.  But you can't do all of that.  So you need to decide what combination of time/money/stuff suits your particular goals and priorities.
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Bicycle_B

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Re: Is Early Retirement even a possibility for me?
« Reply #7 on: October 12, 2017, 08:01:00 PM »
Yeah, post a case study.  On the level of immediate responses, guessing based on you wrote:

You can have any one thing you want, but if you try to combine three factors at once, you're going to run into trouble, and no, you can't just get what you want based on what you have now.

Example:  you can write, but you can't also cut hours, buy an expensive house and expect to be on your way to FI.  You'd need one or two changes at least, such making real money from writing, or having your partner suddenly conform to your dreams.  Or write after your 40 hour job. Or reclassify your partner as not a partner since they're not on board with FI, determine that you will only act in accordance with FI, and therefore you will not buy the expensive house.  Skill improvements (ride bike vs drive car, cook cheap meals, etc) will help but you also have prioritization/triage decisions to make. 

Re writing, I am acquainted with a heavyweight arts-and-income mentor, but the person I could connect you with accepts mentees on one criterion:  you must produce.  If you are serious about creating your art, it costs a dollar, but you have to keep doing it and communicating, plus honestly accept no-BS feedback.  Otherwise you're out.  If you're interested in that, PM me. 


MaaS

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Re: Is Early Retirement even a possibility for me?
« Reply #8 on: October 12, 2017, 08:03:07 PM »
I think you're being too pessimistic.  For 27, to have no debt and 35k saved, you're doing pretty well.  Most are still in the red at 27.

By putting your rough numbers in here, https://www.calcxml.com/calculators/savings-calculator-growth, (35k to start, save 8k per year, 3% increases, 8% average return over 20 years) you'd have 656k by 47. Enough for a simple retirement in Madison.  The savings numbers in this are pretty conservative, basically assuming you never get a raise besides inflation.

On a less cheery note: Are you sure the reduced hours will lead to more writing, or is work simply the excuse for your current procrastination? At less than 40 hours a week, I find it hard to believe work is why you're not writing enough.  Not trying to be rude, it's just a mental trap many (including myself) tend to fall into from time to time.

Exflyboy

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Re: Is Early Retirement even a possibility for me?
« Reply #9 on: October 12, 2017, 08:19:20 PM »
Welcome aboard..:)

I was 36 when we started saving and made not much more than you are making now when we started.. 20 years later our networth is roughly $2.8m

So yes.. YOU CAN do this!

As to the other half.. well, you have just "got religion" and he is wondering if you have gone nuts! Remember if he is like most Americans he has no idea what you're talking about! My Wife certainly was not fully on board to start.. took me 7 years to get rid of the landline and set her up with a $10/m cell phone.

So take a breath, show him gently that it can be done.. Plenty of journals to show you that it can.

Sadly of course, if he never gets on board you will have to decide if you two have a future together or if you can work around your differences.

I agree with others.. Becoming the starving artist/writer will never get you to FIRE, if you want to retire early then the faster you can earn $$ and invest the sooner you will get there.

Bicycle_B

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Re: Is Early Retirement even a possibility for me?
« Reply #10 on: October 12, 2017, 08:28:30 PM »
MaaS has a good point.  Since he/she had the courage to address the issue directly, I'll be blunt.  Hopefully this will be taken as respecting your dreams and your finances enough to name the elephant in the room.  Speaking as an experienced procrastinator/dreamer, the plan of cutting hours to write would be a lot more convincing if it said "increase my writing hours from three per day to six" instead of implying that you are, you know, not writing now.

One idea:  if you can write an hour per day on weekdays between now and the proposed day when you tender your transfer to lower hours, it's reasonable to tell yourself the writing hours will double.  If you can't write one hour, is the writing a dream that recedes endlessly into the future like the green light on Daisy's dock in the Great Gatsby, or a thing you are really going to do?

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martyconlonontherun

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Re: Is Early Retirement even a possibility for me?
« Reply #11 on: October 13, 2017, 03:00:38 AM »
First, always remember trying and failing is still better than not trying. Failing to retire at 45 means you retire at 50. Still better than most of the populations. Aim high and miss, not too low and hit - Attributed to Michelangelo

I would take a step back and define what is early retirement for you and what the math says. Is ER 35 or 50? Then rank realistically what is most important to you as a couple. 1. ER, 2. House, 3. Writing 4. Type of supplement job, etc. or 1. Writing, 2. House, 3. Type of supplement.

Also consider:
1. Is he on board with early retirement? Does he want to ER, too, or will he be fine working? Cuts the needed stache in half if he keeps working.
2. Do you like being a librarian? Can you lean FI at 40 and just work part-time after?


It's totally possible but you seem to prioritize other aspects of your life and your husbands desire. That's totally fine, but don't frame it as "It's not possible for me to retire early." It seems like you have a job in a field you like and don't desperately want to get out.

boarder42

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Re: Is Early Retirement even a possibility for me?
« Reply #12 on: October 13, 2017, 04:24:24 AM »
You bring in 100k in a lcol area you should be able to save 50% post a case study. That's the best way to get help. 
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chasesfish

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Re: Is Early Retirement even a possibility for me?
« Reply #13 on: October 13, 2017, 05:49:14 AM »
Welcome!   Of course you can achieve financial independence, your habits are already outstanding.

At the risk of sounding like a jerk, I have to ask this question about writing:

How many hours a week are you spending on writing today?  Assuming you sleep eight hours a night, you have 112 hours that you're awake during the day.   If you work 38 of them, what are you doing with the other 74?  Most people who get into writing start doing it on the side while working a full time job and saving.  There's a lot of outlets for writing you can monetize between blogging and ebooks.  Once of the benefits of your 20s is you have the energy/ability to work 60,70,80 hours a week developing skills and a side hustle. 

My second boss reminded me if I work really hard at my career, I'll be putting in half-days in no time.  Then what I do with the other 12 hours of my day is up to me.  It was half of a joke, but the point was that I had an opportunity to build a skill set that would triple my income in five years.
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FLBiker

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Re: Is Early Retirement even a possibility for me?
« Reply #14 on: October 13, 2017, 07:42:32 AM »
Agree with the advice you're getting.  That seems like an awful lot of house.

I can also relate to wanting more time to write.  I really got into my profession (teaching English overseas) for that very reason.  And it did give me lots of time (I worked 16-25 hours a week).  And I wrote very little.  Then I came back to the states and got a 40 hour a week job (something I swore I'd never do) and wrote more than ever before.  Who knew?

Of course, your experience may be different but, for me, removing constraints / creating large swaths of time didn't help.

One other thing -- navigating a relationship without a somewhat compatible orientation to spending / savings can be very tricky.  My wife and I weren't exactly on the same page, but we were pretty close and both willing to compromise.

MrsPete

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Re: Is Early Retirement even a possibility for me?
« Reply #15 on: October 14, 2017, 06:53:39 PM »
At the risk of sounding like a jerk, I have to ask this question about writing:

How many hours a week are you spending on writing today?  Assuming you sleep eight hours a night, you have 112 hours that you're awake during the day.   If you work 38 of them, what are you doing with the other 74?  Most people who get into writing start doing it on the side while working a full time job and saving.
If you're a jerk, so am I.  I was thinking along those same lines:  The OP isn't quite working 40 hours a week now -- with no kids, no second job, what's stopping him/her from writing NOW? 

OP, my best suggestion:  Create a schedule for yourself.  Figure out how many hours you want to write each day, and make it happen.  I read somewhere that successful writers tend to write first thing in the morning.  Why?  Because if they don't sit down and DO IT, they tend to find that they've fiddled away the day and haven't put pen to paper.  A great deal of writing is self-discipline. 

As for the house ... which do you want more?  A house NOW or writing NOW?  Pick one and make it your primary goal TODAY.  Keep the other goal on the back burner; by that, I mean, don't forget it, but make it secondary for the moment.


pbkmaine

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Re: Is Early Retirement even a possibility for me?
« Reply #16 on: October 14, 2017, 09:01:38 PM »
If you are a writer, you write. I co-authored two books while working 60 or more hours per week as a consultant. I wrote when I got up in the morning, on my commute, on my lunch hour, after dinner, and on weekends. I kept a notepad beside my bed in case I had thoughts at night. All you need to do is require from yourself a certain number of words per day. They don’t have to be good words. The good stuff comes in the rewriting. You just have to get something down. If you can’t do it now, with the schedule you have, perhaps you are not cut out to be a writer.