Hey there. So I'm not necessarily a new MM reader, but I'm new to investing in things other than my savings account. I have embraced buying Vanguard stocks (currently own about 6k in the Vanguard Tech fund), I have read a ton on investing in dividends (seems like a ton of money needs to be invested in order to generate a small return).
My question for those of you who are FIRE or who understand how FIRE is possible, is how do you physically plan to get the money out of your investments? I know this is a very basic question, but for those of you who have invested in ETFs or index funds, do you just plan to sell a certain amount of your investment each month (or quarterly?) to cover your regular expenses, and hope you are selling high? Is there some automated way to do this, or some type of account I can setup? I looked into the Vanguard distribution options, but of course they all say I need like $700k invested to make like $1100 per month...which doesn't seem right to me. And, I like the idea of dividends, but just don't feel like they offer a comparable rate of return as ETFs and other investments. I've been getting frustrated because this seems like I can understand lots of higher level things but get hung up on tiny details like this.
Note...if you don't want to do a bunch of extra reading, go no further and just answer the above, please. Extra reading/venting below, if you care:
I'm 28 years old, married. I'm good at many things, but have yet to find any career that I actually enjoy, or much of anything that I'm passionate about other than spending time outside in nature with my wife. Currently working as a sales manager (good at sales but hate it). Current income (pretax) is $55k per year from my job, plus between $1500 to $2500 per month in side income (will not get into the details of the side income, but it is basically passive but not guaranteed to sustain forever). Wife is between jobs but has her master's in social work (terrible terrible career field which pays nothing and difficult to find jobs in that field). She might just stay home if we get pregnant this year, as working in a mental hospital with a baby inside of you is incredibly risky. Currently have about $40k just sitting in a savings account until we find a house to buy. We have no outstanding debt. We sold our house a few months ago and moved from a higher cost of living area to a lower cost of living area, and are staying with parents for free until we find a place to live. Our only monthly expenses are car insurance, health insurance through my job, food, gas, and cell phone bill (shared family plan with my parents, our portion is $54 per month). We are currently banking pretty much all of what I make each month, however we will not be able to stay living here for free forever.
I live in a relatively low cost of living area (Missouri), where we could realistically buy a "forever" house to raise a family in for between $100k and $150k. Possibly less if the stars align and we get lucky finding the right place.
My plan is as follows: Find suitable house and pay it off as quickly as possible (with $30k down on a $100k house, our payments would be very low, even if we did a 15 year loan, so we could feasibly live off of just our passive income. However that income is not stable enough for me to feel 100% safe doing so, especially with both of us and some potential kids). Wife could stay home to raise theoretical kids while I either keep working full time or we both find part time jobs that we don't hate doing to make some additional income. We have family nearby, so that's free child care, however the goal would be to retire as early as possible so we can actually raise our own kids (I know, crazy, right?!). I honestly feel like we are frugal as hell while still living a good life, I just can't wrap my head around working for even another 10 years and missing so much of my hypothetical kids growing up. A lot of my concern about the future comes from me just never finding a purpose in life (so far). I know my purpose is not to go out and build someone else's dream by working for them forever, and I am relatively entrepreneurial, yet somehow have become very risk averse since discovering MM and realizing that every mistake I make could equal years and years more enslavement to a job. So, I'm just trying to figure out how my investments would turn into cash flow without depleting them. Do I just cash out the amount I need each month, and hope I'm selling high at that time? As far as a part time income, I LOVE the idea of running a web based business with residual ad revenue, but honestly feel like I don't have anything of value to contribute that would be better than the experts already blogging on that topic, or generate clicks (Plus, I've read you should never start a blog with the intent to make money).
Anyway, even if nobody reads this, I feel a little better just getting it all out there. Sometimes I feel like I'm trying to finish a puzzle with a blindfold on. I have a pretty good idea what the puzzle should look like when it's done, but I just cant see all of the pieces yet. Thanks for listening, sorry for the rant.