Author Topic: Forced into retirement at 28  (Read 4540 times)

Headachelad

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Forced into retirement at 28
« on: October 16, 2017, 12:12:12 PM »

Hey Mustachiens!

After a severe mental breakdown due to overworking + bipolar type 2, Dyslexia, and a recent severe concussion I am no longer to work. I have accumulated some assets and quite a bit of wealth relative to my age and I'm looking at a way to turn it into passive or semi passive income streams in order to sustain myself indefinitely until i am able (or willing) to return to work again.
I currently live in Canada, but have no family. After extensive traveling and living abroad I may end up emigrating elsewhere in time and would like to structure my assets for that possibility.
Current expenses are inflated due to Therapy (both physical and mental) but I hope to eventually not require those in time which I will outline below.
Note: I also have a few businesses launching in 2017 which I have made hires based on rev share to delegate most responsibilities sans larger calls, but these in no way guarantee a successful outcome due to the market saturation and lack of overall startup capital invested, so the below will reflect a likely scenario in which these do not yield any profit.

Life Situation:
 28 year old entreupenuer, living in high COL area in BC, Canada, currently not able to work. 

Deductions:
Physio therapy - $1080 / month (3x$90 sessions per week)
Other (medical)- $900 / month ญญ
Real Estate -  $2900 / month -> work live zoning //// investment property
-This includes insurance, interest, work live zoning, utilities etc.
$58560 deductions/year


Rental Income:

$4200 / month from rental properties

Current expenses:
Expenses primary residence
Mortgage - $550,000 @ 2.69 30 years $2,223 / month
Other unavoidable (total) - $643 / month $7720 / year
$34,392/year
Rental properties:
Mortgage $480,000 @ 2.69 25 years 2,195 / month $26,862/year
Other unavoidable (total) - $612 / month $7344/ year
Misc expenses (rounded up based on 2 year averages)
Food: $1000 / month $12,000 / year
Transportation: $80 / month $960/year
Medical
$23,760 / year

rounding up slightly $100,000 / year


Assets: Amount & description -

Condo 1
$800,000 - $250,000 equity
Condo 2
$530,000 - $50,000 equity
Cash
$573,000 CAD
$270,000 USD
Crypto
300 BTC
Office stuff (computers):
$15,000


Extra:
-Nothing invested in my TFSA or RRSP as of yet which both have a $52,000 ($104,000) limit on them.
-My primary can be rented out @ $3900 a month down the road in todays market


Goals:
-Become Financial independent with "stable" sources of passive or semi passive income that can be managed remotely
-Hold as much of my crypto as possible
-Portfolio that is flexable enough to not take a massive hit if I choose to emmigrate from Canada

Comments:

-I've researched a lot about FIRE the last year, but have serious Analysis paralysis and the amount of information is overwhelming. Looking for any and all input.
-Right now my frugality is taking a back seat to adress my current  concerns, these should go down in time but its so mething I can't really budge on, health comes first.
-Despite the cap rate, i'm not looking to sell my properties at the moment
-I've read Canadian coach potato
Questions:
-What investment vehicles would best suit my goals?

Appreciate all help, thanks for reading.


shotgunwilly

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Re: Forced into retirement at 28
« Reply #1 on: October 16, 2017, 01:06:14 PM »
You have 300 BTC? Or $300 in BTC?

boarder42

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Re: Forced into retirement at 28
« Reply #2 on: October 16, 2017, 01:10:40 PM »
You have 300 BTC? Or $300 in BTC?

yeah this could be a huge difference.

Headachelad

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Re: Forced into retirement at 28
« Reply #3 on: October 16, 2017, 01:14:19 PM »
300 btc so exchange x300

boarder42

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Re: Forced into retirement at 28
« Reply #4 on: October 16, 2017, 01:16:39 PM »
istn bitcoin worth 5300 right now.  making that 1.59MM dollars.

shotgunwilly

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Re: Forced into retirement at 28
« Reply #5 on: October 16, 2017, 01:17:25 PM »
Let me get this straight...

You have $1,700,000 in BTC, a wildly volatile and speculative asset.... like 62% of your net worth.... and you're worried about becoming "Financial independent with "stable" sources of passive or semi passive income that can be managed remotely."?


Headachelad

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Re: Forced into retirement at 28
« Reply #6 on: October 16, 2017, 01:17:59 PM »
Let me get this straight...

You have $1,700,000 in BTC, a wildly volatile and speculative asset.... like 62% of your net worth.... and you're worried about becoming "Financial independent with "stable" sources of passive or semi passive income that can be managed remotely."?


Quote from: boarder42

Yea, kinda why i am here. Looking to sell as little as possible.

link=topic=80331.msg1735165#msg1735165 date=1508181399
istn bitcoin worth 5300 right now.  making that 1.59MM dollars.

Yeap
« Last Edit: October 16, 2017, 01:19:56 PM by Headachelad »

BiochemicalDJ

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Re: Forced into retirement at 28
« Reply #7 on: October 16, 2017, 01:20:49 PM »
I think you might be in the wrong forum, dude. You have $2 million. the 4% SWR on that is 80 Gs a year.

You say you've read Canadian Couch Potato.

Well, if you've read it... Act on it? Move all the BTC to one of his more conservative couch potato portfolios and then laugh your way to the bank for the rest of your life...?

dandarc

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Re: Forced into retirement at 28
« Reply #8 on: October 16, 2017, 01:26:08 PM »
Yep.  Sell the BTC and be done with it.  You've already won the lottery - the only way to lose now is to continue playing.

Laura33

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Re: Forced into retirement at 28
« Reply #9 on: October 16, 2017, 01:57:33 PM »
Holy shit.  I read that as $300 BTC.

Straight up:  you need to sell the BTC.  Now.  This instant.

You are clearly someone with a high risk tolerance, and you probably get a real kick out of the ups and downs of aggressive investments.  And that is fine when you are 28 and making a buttload of money.  But that's not you any more.  Your *actual* risk tolerance (as compared to your *perceived* risk tolerance) is now more like a 65-year-old's -- except, unlike many 65-yr-olds, you don't have the safety net of RRSPs/pensions, AND you have to plan for probably 60+ years in retirement.  Basically, your diagnosis means that aggressive, speculative investing is an itch you cannot afford to scratch right now. 

Take a look at this article:  http://grizzlymomanddad.com/2017/09/22/bitcon-bubbles-and-massive-fraud.  Now imagine that is true, and the BTC crashes.  You now have $100K in expenses, about half of which is covered by your current rental properties.  You have about another $850K in cash, which, if it were invested in a stock/bond portfolio, would likely allow you to draw somewhere around $34K/yr.*  So you are still $16K short of making ends meet.  You might be able to make some of that up by renting out your current home -- but then you'll need to add rent to the expense side of the ledger as well.  Now what do you do?  At this point, your only options are to sell some of the property, cut your expenses, draw from your cash stash even faster, or find some kind of work you can do.

Tl;dr:  You have a shit-ton of money.  But you can't afford to lose it on speculation, nor can you afford to let it stagnate in cash.  Sell the BTC, and put that money and most of the cash in VTSAX or something comparable.  The 4% rule says you could safely withdraw over $80K/yr from that kind of 'stache, which is more than enough to cover your needs with the rental income.

*You have the strangest portfolio I have ever seen.  You are aggressive enough to be comfortable with a massive amount in a purely speculative investment -- and yet you also have over $800K just sitting in cash, doing absolutely nothing for you.  You need to get that cash invested, because if you don't get some significant compounding out of that money, it'll cover your current spending for no more than 20 years -- and then you'll be almost 50, with even fewer employment options, so now what will you do?

Jaayse

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Re: Forced into retirement at 28
« Reply #10 on: October 16, 2017, 03:37:44 PM »
I'll add my voice to those saying sell the BTC.  Retirement requires more stability than your current investment strategy.  Once you're meeting your needs for fairly stable passive income, above and beyond that you can be more speculative.  At the very least, diversify your investments, almost all of your eggs are in the crypto basket.

Bicycle_B

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Re: Forced into retirement at 28
« Reply #11 on: October 16, 2017, 03:51:02 PM »
Agree with previous posters.

Headache, good luck with your health.  Re your goals:
1. "Stable passive income" and "hold as much of my crypto as possible" are in direct conflict.
2.  Your hundreds of thousands of cash mean the short term is taken care of, you only have to sell crypto to secure more income than the real estate provides.
3.  Roughly, you have enough capital to cover your expenses with Canadian Couch Potato or some similar strategy if you're willing to sell the crypto.  If you don't sell it, you either need lower expenses or you are taking a risk.
4.  Choose the goal that's more important and act accordingly.

In your shoes, I'd estimate what I really thought my life would probably end up costing - maybe 60k including long term medical - and then sell enough crypto to make a Couch Potato portfolio that would cover it.  Roughly, I'd sell half the bitcoin, allocate the Bitcoin proceeds and current cash into Canadian Couch Potato (CCP).  But the numbers I'm giving aren't based on the slightly more detailed analysis you should give your own life.  Determine minimum costs, at least sell enough crypto to cover those using CCP.
« Last Edit: October 16, 2017, 03:54:51 PM by Bicycle_B »

JAYSLOL

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Re: Forced into retirement at 28
« Reply #12 on: October 16, 2017, 04:31:20 PM »
Bitcoin hit $7300 CAD the other day, that's well over $2M, I would sell all but 10-20 and put that money into a portfolio of stocks and bonds, for you maybe 50/50 or 60/40 or something like that.  This will give you the peace of mind you NEED.  Seriously, I would have a mental breakdown too if I had your asset allocation. 

chasesfish

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Re: Forced into retirement at 28
« Reply #13 on: October 16, 2017, 05:06:13 PM »
I'm going to add to the fire...sell that BTC immediately!!  I've watched these bubbles twice before, once with silver and once with tech stocks, just bail please.   You're close to financially independent depending on your long-term expense rate.

On another note, I'm really sorry for what you're going though, I'm dealing with something similar in my family.  Nerve/brain injuries take time to heal and the mental/physical health aspect of it is awful.  If you don't have it already, a good support group on facebook for your injury/condition is helpful.

robartsd

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Re: Forced into retirement at 28
« Reply #14 on: October 16, 2017, 05:30:20 PM »
Here's the most risk tolerant option I could approve:

Keep operating your rentals (semi-passive), hold $50k in cash (emergency fund), sell enough BTC to invest about $1.25 million in portfolio of low cost index funds (60-80% stock, 20-40% bonds). You'll still have a decent size stake in BTC, but not be relying on it too much.

2Birds1Stone

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Re: Forced into retirement at 28
« Reply #15 on: October 16, 2017, 06:28:10 PM »
Lol

PharmaStache

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Re: Forced into retirement at 28
« Reply #16 on: October 16, 2017, 07:44:44 PM »
Nice that people are responding like this is a real question. 

Letj

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Re: Forced into retirement at 28
« Reply #17 on: October 16, 2017, 08:46:55 PM »
I smell a troll.

Freedomin5

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Re: Forced into retirement at 28
« Reply #18 on: October 17, 2017, 08:12:12 AM »
I smell a troll.

OP says they have a diagnosis of Bipolar II. This type of risky financial decision is not uncommon for people with Bipolar Disorder. While they may be trolling, I wouldn't write them off so quickly, as it could also be legitimate.

OP, sounds like you have a bit of a consensus regarding where to start (I.e., bitcoin, etc.). If you are in therapy, you can also bring up the analysis paralysis with your therapist to work through it.

Headachelad

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Re: Forced into retirement at 28
« Reply #19 on: October 17, 2017, 10:13:48 AM »
Holy shit.  I read that as $300 BTC.

Straight up:  you need to sell the BTC.  Now.  This instant.

You are clearly someone with a high risk tolerance, and you probably get a real kick out of the ups and downs of aggressive investments.  And that is fine when you are 28 and making a buttload of money.  But that's not you any more.  Your *actual* risk tolerance (as compared to your *perceived* risk tolerance) is now more like a 65-year-old's -- except, unlike many 65-yr-olds, you don't have the safety net of RRSPs/pensions, AND you have to plan for probably 60+ years in retirement.  Basically, your diagnosis means that aggressive, speculative investing is an itch you cannot afford to scratch right now. 

Take a look at this article:  http://grizzlymomanddad.com/2017/09/22/bitcon-bubbles-and-massive-fraud.  Now imagine that is true, and the BTC crashes.  You now have $100K in expenses, about half of which is covered by your current rental properties.  You have about another $850K in cash, which, if it were invested in a stock/bond portfolio, would likely allow you to draw somewhere around $34K/yr.*  So you are still $16K short of making ends meet.  You might be able to make some of that up by renting out your current home -- but then you'll need to add rent to the expense side of the ledger as well.  Now what do you do?  At this point, your only options are to sell some of the property, cut your expenses, draw from your cash stash even faster, or find some kind of work you can do.

Tl;dr:  You have a shit-ton of money.  But you can't afford to lose it on speculation, nor can you afford to let it stagnate in cash.  Sell the BTC, and put that money and most of the cash in VTSAX or something comparable.  The 4% rule says you could safely withdraw over $80K/yr from that kind of 'stache, which is more than enough to cover your needs with the rental income.

*You have the strangest portfolio I have ever seen.  You are aggressive enough to be comfortable with a massive amount in a purely speculative investment -- and yet you also have over $800K just sitting in cash, doing absolutely nothing for you.  You need to get that cash invested, because if you don't get some significant compounding out of that money, it'll cover your current spending for no more than 20 years -- and then you'll be almost 50, with even fewer employment options, so now what will you do?

Portfolio was never able to be given attention because I used to work 16 hour days. Now, since I no longer can work I'm trying to make a FIRE oriented profile. I was holding crypto because FOMO, but now circumstances have changed.

I smell a troll.

OP says they have a diagnosis of Bipolar II. This type of risky financial decision is not uncommon for people with Bipolar Disorder. While they may be trolling, I wouldn't write them off so quickly, as it could also be legitimate.

OP, sounds like you have a bit of a consensus regarding where to start (I.e., bitcoin, etc.). If you are in therapy, you can also bring up the analysis paralysis with your therapist to work through it.

Yea, people with BPII typically go through cycles where they can be impulsive and borderline manic, getting multiple opinions no matter how obvious they are is helpful in alleviating investors anxiety, I'm just trying to not find myself in a situation where I read a few blogs, pull the trigger and forget one important step such as finding the most optimal MER (which I just learned a week ago).


If I intend on moving in the future would VTSAX be the most ideal index? I'm having trouble grasping how local currencies and international funds interact.

Bicycle_B

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Re: Forced into retirement at 28
« Reply #20 on: October 17, 2017, 01:16:49 PM »
Arguably VTWSX. 

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT

Exchange rates and such can be a complex topic.  VTWSX tries to balance pretty much all stock markets.  More diversification than a US-only fund.

boarder42

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Re: Forced into retirement at 28
« Reply #21 on: October 17, 2017, 02:20:36 PM »
Arguably VTWSX. 

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT

Exchange rates and such can be a complex topic.  VTWSX tries to balance pretty much all stock markets.  More diversification than a US-only fund.

why not just make your own AA with vti and vxus to lower the ER  .21 is really high i dont know what benefit you're getting from that. but i'm willing to be convinced its worth 5-6x the cost of VTSAX

doctor_octopus

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Re: Forced into retirement at 28
« Reply #22 on: October 17, 2017, 03:54:17 PM »
OP, get real. If this is a serious post, you have enough total assets to qualify as "fuck you" money in any flyover state and a good standard of living almost anywhere else.
Get like $500 dollars together, find and call a reputable financial advisor who charges by the hour, hand them it, and have them talk some sense into you for a few hours and get the ball rolling on a portfolio that isn't going to drop 50% in net worth overnight for literally no reason. Procrastinating on your problems with the MMM forums is not going to cure you of analysis paralysis.

I also have bipolar and part of the reason why you should call a professional (again, find a guy who charges hourly even if it's 300$/hr, do not agree to any of them who demand a 1% asset return fee or anything ridiculous like that) is because even with medications, or occasionally due to medications, it can be very hard to think clearly or follow through with a sensible plan without somebody else there making sure you're not making very irrational decisions due to mood irregularity. If you have no self awareness of your own behavioral irregularity, that can worsen existing problems significantly.
« Last Edit: October 17, 2017, 03:55:55 PM by doctor_octopus »

Bicycle_B

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Re: Forced into retirement at 28
« Reply #23 on: October 17, 2017, 04:56:16 PM »
Arguably VTWSX. 

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT

Exchange rates and such can be a complex topic.  VTWSX tries to balance pretty much all stock markets.  More diversification than a US-only fund.

why not just make your own AA with vti and vxus to lower the ER  .21 is really high i dont know what benefit you're getting from that. but i'm willing to be convinced its worth 5-6x the cost of VTSAX

Good idea, B42.  If the OP were of stable mind and seeking to squeeze out the the last penny, I agree the two funds can give a lower expense ratio with similar diversification.  Real money, with the large amounts in the portfolio! 

However OP seems to be seeking to cut analysis paralysis with one fund.  I gave him one fund.

He can make modifications later.  Moving some money into that fund will accomplish 90% of the safety/diversification goal in one stroke.  As OP's health improves, there will be time to optimize gradually.  The risk of staying in crypto is far larger than the difference between fund choices.  If he sells half the crypto and puts the $ into one tolerable fund, essentially he secures his future. 
« Last Edit: October 17, 2017, 05:56:06 PM by Bicycle_B »

affordablehousing

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Re: Forced into retirement at 28
« Reply #24 on: October 17, 2017, 06:03:26 PM »
You're rich! Hooray! I hope you find some good psychiatric help. You could probably do anything with your money and be just as likely, or unlikely, to lose it all or double it. Take care of your health first, then deal with your wealth. And hey, all these people telling you to sell your coins, we don't have the stones to bet on an immaterial fiction and we lost out on millions, so maybe you should be doubling down?

The wealthy BP person I knew had his wife manage assets conservatively, then one day he thought using pyrex as household glassware would hit big, bought $800K of inventory, and unloaded it for pennies.

frugaldrummer

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Re: Forced into retirement at 28
« Reply #25 on: October 18, 2017, 12:49:42 AM »
You're getting plenty of financial advice, I'm going to give you some medical advice.
Get a book (just released in the US in August) called The End of Alzheimer's by Dr Bredesen. No, you don't have Alzheimer's, but hear me out.
Dr. Bredesen is a long-time brain researcher who started reversing mild to moderate Alzheimer's by simply implementing a large number of common sense brain health interventions at once. They've mostly not specific to Alzheimer's and so I suspect they will turn out to be equally effective for other brain disorders. I've been to a few medical conferences where this work has been presented and it's groundbreaking.

Also this link is to a high dose fish oil protocol for concussion recovery: http://www.brainhealtheducation.org/resources/brain-injury-protocol/

Recently, my 85 year old mother sustained a serious concussion (with broken nose and several teeth) and had such seriously impaired memory and thinking afterwards that a new neurologist mistakenly diagnosed her with Alzheimer's. She couldn't drive, work (yes, she worked 3 days a week as a librarian) and was not functioning well at home.
I put her on the high dose fish oil protocol, implemented most of the Bredesen protocol, and sent her for LENS  neurofeedback. 3 months later she is back to work, driving, and as mentally sharp as ever.

Pregnenolone has been especially helpful, as she ran out for a few days, noticed a decline that resolved when she started taking it again.

You're a lot younger than my mom so don't assume your brain can't recover. Get that book!

pbkmaine

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Re: Forced into retirement at 28
« Reply #26 on: October 18, 2017, 02:12:35 AM »
Sell at least 90% of the Bitcoin. If you enjoy its wild roller coaster ride, keep 10%.