Author Topic: Case Study, How Close to living the dream FIRE?  (Read 2498 times)

dabears847

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Case Study, How Close to living the dream FIRE?
« on: March 08, 2016, 04:42:35 PM »
Anxiety is kicking in...

Please take a look at the short excel sheet attached. Sheet One/Plan one is for 1/1/17 projected savings etc. and sheet two is for 1/1/18 target fund balance.

Question: How close is plan one to success in your eyes?  299 Days
2. What would you enhance to ensure success.
3. How could I best defend a down market 40% drop



            
            
Age 35,36            
   Ceiling    Floor       
Spending    $38,500.00     $30,000.00       
                         
            
Rentals: Cash Out Value   1/1/2017    $53,000.00       
Wait to sell for market to increase   1/1/2019    $125,000.00       
Sell once Renters payoff properties   1/1/2028    $300,000.00       
              Family would like to relocate South for warmer weather but wont happen with the rentals and work needed to be done            
              The longer we hold onto the properties the better off we are, they cash flow and have 12 years remaining each on their mortgages.            
            
Investments   1/1/2017    $860,000.00       
              Planned Value on 1/1/17            
             401k Rollover 3/4 and 1/4 Vanguard Joint Account Total Stock Market Fund            
             Planned to do Roth Conversion of $40,000 Yearly or 72t             
              80% Stocks 20% Bonds….. With a year of operating cash in checking             
            
Kids College In State    2028    $40,000.00       
   2030    $40,000.00       
            
   Loan         
Kids College Loans, Grants, Scholarships    $4,000.00    20years   2028   
              We want to provide College support with time and money            
              Might cost less or more, but Income will be low allowing for College Grants and Scholarships.            
            
            
Social Security    2042    $18,000.00       
Social Security    2041    $18,000.00       
            
            Calculated future income via SS website based on current credits            
            
            
House Paid Off 4-1-2016   Value    $300,000.00       
Downsize cash out 2041   Downsize    $150,000.00    2035-2041   
        Home Equity for Emergency currently at zero            
         Would consider getting new heloc with 80% loan to value for those down markets as needed            
                     
            
Strategies            
Variable spending range shown above            
Social Security projections            
            
Kids College Plan with Loans vs Lump sum increases cfiresim success rate            
Kids College Could potential cost significantly less with Grants, Local College, and Scholarships            
Potential for spending reduction later in life            
Part Time work is an option but not preferred part of the plan,            
Jon - I hold a Real Estate License as a backup plan            
            
4% Rule    $860,000.00    25    $34,400.00    
Actual Spending 4.5% Withdrawal Rate    $860,000.00     $38,500.00    4.477%   
Floor    $30,000.00    25    $750,000.00    
Wait another year see plan 2: 1.2MM Savings            
         Note: My Wife probably wouldn't be too happy to start off in the first five years spending the floor.             
Down Market???? What to do?            
Market Drop            
Annual Rebalance   Automatic         
Dip 10%    Do Nothing, keep spending, don't watch         
20%   Start cutting spending, to floor or 4% withdrawal         
40%   Floor spending $30,000         
50%   Floor spending, Side Income Search target $10,000 Income         
60%   Floor spending, Side Income Search target $10,000 Income         

dabears847

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Re: Case Study, How Close to living the dream FIRE?
« Reply #1 on: March 12, 2016, 05:09:08 PM »
Just curious if the members online think I'm close to Fire or what else you would do? The rental and college thing has us concerned mostly.

Thanks!

ohsnap

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Re: Case Study, How Close to living the dream FIRE?
« Reply #2 on: March 12, 2016, 06:45:42 PM »
I saw your post a few days ago but didn't understand your formatting.  For example, the kids college with years listed by it - is that annual spending for those years, or a lump sum, or ??? 

lhamo

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Re: Case Study, How Close to living the dream FIRE?
« Reply #3 on: March 12, 2016, 07:10:52 PM »
I also found your formatting/way of describing things in the main post confusing, and I don't typically open excel sheets from people I don't know.

Maybe you can reformat things using MDM's Case Study template? It is pretty fun to experiment if you haven't already.

GrowingTheGreen

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Re: Case Study, How Close to living the dream FIRE?
« Reply #4 on: March 12, 2016, 09:38:31 PM »
I had to stop at the top to ask this burning question: what is leading you to believe that your rental is going to more than double in value by 2019? That's 2.5 years away...

dabears847

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Re: Case Study, How Close to living the dream FIRE?
« Reply #5 on: April 01, 2016, 02:26:10 PM »
I had to stop at the top to ask this burning question: what is leading you to believe that your rental is going to more than double in value by 2019? That's 2.5 years away...

Rentals net distribution from a sale will increase due to the amortization schedule on the properties and with a goal of 6% property value increase over that period of time. 6% is very real and probably conservative knowing how far below the top of the market they once were.