Author Topic: Can I retire now? I need expert Money Mustache Community advice  (Read 1184 times)

retiremesoon

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Age: 31

Monthly expenses: $2,000 (this on the high end, I can keep it as low as $1,600. I live in NYC, so expensive rent)

Job: I'm working very hard on writing a book but am not getting paid for it (but I love it and it's important I do it). I could knock it out of the park or statistically fall among the most books that never make a cent. Since I'm willingly writing a book I might be retired already, sort of.

Debt: None

Assets:

Cash--$141,500 (I'm an entrepreneur and have been holding the cash for the past 6 months-1 year for possible investments or to buy a house in cash/big downpayment. However, I'm now living in NYC and it's looking less likely I'm going to buy a place or need $141,500 for a business, so I can invest some of my cash. I'd like to keep about 40-50k in cash or have it somewhere I could easily get it back without risking major loses)
IRA roth--$48,000
Simple IRA--$39,000 ($19,000 of this is being average cost invested at $1,000 a month in SWTSX, I suppose I've been waiting for a dip in the market to drop a bigger lump sum)
Individual taxable investment account--$56,000
Toyota corolla with 100k miles--$5,600

I also own a business and my equity is worth roughly 172k. This year my business partner may buy a % from me that would value 100k. Because of a tax deduction I won't have to pay taxes on that 100k. Important note: should he buy it I would retain 30% which would still create possible future profits and passive income.

In the business I have an additional $73,000 (already taxed) in cash which I withdraw $1,800 a month right now that covers my living expenses. I can not withdraw it any faster than the $1,800 a month however.

I'd like to set this up the most Mustachian way possible with these additional factors:

1) I'm single. What if I get married some day? I suppose my wife needs to be a Mustachian that pulls her weight?
2) I'll always work on side projects. While I could go get a job at $60-80k to build the stache, I want/need to get this book done, and it could take up to one more year. It could hit a home run or flake, but I agree w/ Mr. Money Mustache that if work on things I love I'll ultimately make them more profitable in the long run, anyways, even if there are some swings and a miss along the way.
3) I can loan up to 120k back to the business at 6%. However, this would be putting more of my eggs in one basket.

If you have any other questions, please ask! I appreciate and value your input/advice!











daverobev

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #1 on: July 16, 2017, 02:43:34 PM »
Simple: 2k a month = 24k a year, x 25 = $600k invested to retire @ 4% SWR.

Roughly adding up all your numbers gets you to less than $600k I think.

If you're a hustler (businesses, books, 'could just get a job for 60-80k'), I wouldn't worry about it; sounds like (assuming you don't go bonkers) you have enough to live on for a long time if you earned *nothing*, AND you are unlikely to DO nothing and earn nothing.
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retiremesoon

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #2 on: July 16, 2017, 06:41:07 PM »
Thanks, daverobev!

I appreciate your input.

Yes, and if I can keep my expenses closer to the $1,600 mark, then I'm already within range. Because I do have some variables, whether or not I sell part of the business or if owning 30% provides any passive income, I am hoping to make the best decisions with the range of outcomes that could happen that would best position me to be able to retire from passive income.

Thanks for your help!

onewayfamily

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #3 on: July 17, 2017, 08:36:41 AM »
Have you accounted for potential future children?

Either way I'm a big fan of FIRE'ing sooner rather than later, so I think you'll be fine given you have the entrepeneurial genes.

You could also try searching for some higher-yield investments (direct real estate, P2P etc. - I'm not recommending these without knowing your specifics, but they are part of our portfolio and help increase the overall yield).
We FIRE'd at age 28 (me) and 29 (Mrs. OneWayFamily) and are now trying to travel to every country on Earth - it takes longer with 2 toddlers!

If you'd like to keep track of where we're at - check out our photos @ Instagram or our lame attempt at a blog at onewayfamily.com

Moustaches

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #4 on: July 17, 2017, 10:06:37 AM »
I would say no if you want to get married and have kids.  There is too much uncertainty in your future right now to pull the plug completely.  That doesn't mean you have to take a 9-5 paycheck job, there is nothing wrong with pursuing a career in writing and/or business ownership like you are currently doing.

You may want to hold on to your house down payment as well if you want to get married.  Would be nice to be able to get a good place together.

What type of business do you own?
Live like a badass, so that later you can live like a badass.

retiremesoon

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #5 on: July 17, 2017, 11:59:19 AM »
Thanks, onewayfamily and Moustaches!

I appreciate your input. Couple quick thoughts/questions:

1) I have not accounted for future children. I did read a post "What is the Real Cost of Raising Children?" where MMM, I believe, suggested to budget $300 per kid per month.

2) It's not in my character/personality/dare I even say, moral fiber, to sit around and do nothing. It's highly likely that, like MMM suggests, I'll do things that create some income. I might have projects of 2-3 years that create none and then suddenly a book I make $100k from or something, but I can't imagine me staring at my belly button all day. I also started my company with less than 5k and grew it to $3 million + in revenue. I can't see me putting more than 25k of my own money (and that's a stretch) beyond my sweat equity in time to start a business which would hopefully minimize chances of future losses. Based on what I'm hearing from both of you, it sounds like you're comfortable with me pursuing whatever I want to pursue with this in mind at a reasonable pace. That's really the "retirement" I'm looking for, so that's encouraging to hear.

3) Onewayfamily, can you share more info about how you do P2P lending? Do you use a site or is it with friends and family? Do you have a legal contract you use that requires a personal guarantee from the person you lend to? As far as real estate goes, I'm pretty adverse. I'm not handy whatsoever. While I envy the idea of making money through real estate, for me, I think, it wouldn't fit my passions or skill set, and I'd probably be crazy ready to get out of it, unless I could just lend capital to somebody else who I TRUSTED to run this ship.

4) Moustaches, I think that what I'd like to do is move 45k into investments of my $145k in cash, keeping the downpayment temporarily. Then, if I sell part of my company for 100k, I can put that 100k in investments too (increasing investments to $300k roughly at that point) and still hold the 100k potential downpayment. I live in NYC, so I'm not sure 100k will get me very far, but due to my real estate adverse mentality I'm relatively comfortable renting and not having to fix things.

In regards to the type of business I own, I'll PM you directly.

Thanks for everybody's help!

onewayfamily

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #6 on: July 18, 2017, 01:10:23 AM »

1) I have not accounted for future children. I did read a post "What is the Real Cost of Raising Children?" where MMM, I believe, suggested to budget $300 per kid per month.

...

3) Onewayfamily, can you share more info about how you do P2P lending? Do you use a site or is it with friends and family? Do you have a legal contract you use that requires a personal guarantee from the person you lend to? As far as real estate goes, I'm pretty adverse. I'm not handy whatsoever. While I envy the idea of making money through real estate, for me, I think, it wouldn't fit my passions or skill set, and I'd probably be crazy ready to get out of it, unless I could just lend capital to somebody else who I TRUSTED to run this ship.

...

Thanks for everybody's help!

1) I agree kids don't have to be that expensive if you don't want them to (thrift-stores/hand-me-downs for clothing/shoes, healthy home-cooked meals etc.) but where this breaks down is childcare. If you're happy to spend all day with the kid(s) then yes, there is essentially no childcare expense for the first few years before (nearly) free school starts, but not everyone wants to do that - us included. When we're not travelling we put the kids in childcare - both to give us a breather and also just simply to enable us to do other things with our time - like side-hustles, study advanced degrees at university, read, work on health/fitness etc.

3) The P2P lending that I do is all through a site in Australia - think Lending Club, but better. The yields there currently are 8-10% and all borrowers are what you'd call an A or maybe B rated risk on Lending Club. Real Estate is definitely not for everyone but yeah the returns like I mentioned can be quite high if you're willing to take on the risk - like 10-20% after taking into account the leverage that is available on property.
We FIRE'd at age 28 (me) and 29 (Mrs. OneWayFamily) and are now trying to travel to every country on Earth - it takes longer with 2 toddlers!

If you'd like to keep track of where we're at - check out our photos @ Instagram or our lame attempt at a blog at onewayfamily.com

retiremesoon

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #7 on: July 18, 2017, 10:00:40 AM »
Thanks, onewayfamily!

The bit on the childcare being the biggest expense makes a ton of sense.

As far as the P2P, do you mind sharing what site you use so I can check it out? I also just read MMM blog on REITs. That looks like a good option for somebody like me who would like to be hands off with real estate. Thanks so much!


mozar

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #8 on: July 18, 2017, 10:32:31 AM »
If you are looking to get married, my 2 cents is that you wait until you do so before you buy property. I am also interested to hear more about how you started your company.
Embracing the absurd condition of human existence while also defiantly continuing to explore and search for meaning

onewayfamily

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #9 on: July 18, 2017, 10:52:33 AM »
Thanks, onewayfamily!

The bit on the childcare being the biggest expense makes a ton of sense.

As far as the P2P, do you mind sharing what site you use so I can check it out? I also just read MMM blog on REITs. That looks like a good option for somebody like me who would like to be hands off with real estate. Thanks so much!

Yeah. Childcare can really add up, depending on where you live and how many kids you have.

For P2P we use ratesetter.com.au mostly.
We FIRE'd at age 28 (me) and 29 (Mrs. OneWayFamily) and are now trying to travel to every country on Earth - it takes longer with 2 toddlers!

If you'd like to keep track of where we're at - check out our photos @ Instagram or our lame attempt at a blog at onewayfamily.com

retiremesoon

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #10 on: July 18, 2017, 11:56:32 AM »
If you are looking to get married, my 2 cents is that you wait until you do so before you buy property. I am also interested to hear more about how you started your company.

Thanks for the feedback, Mozar! I'll private message you some info around the company. I appreciate the ability to speak frankly about finances on this forum, but I think for now I'd like to keep my personal identity separate form the $.

Thanks!


retiremesoon

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Re: Can I retire now? I need expert Money Mustache Community advice
« Reply #11 on: July 18, 2017, 05:12:33 PM »
I've been using the Schwab Intelligent Advisory and have been pleased. After chatting with my financial advisor today he told me I can tell people that I own a business, am writing a book, and am kind of retired. That's cool. About where I want to be! :)