Author Topic: Young, wealthy and still working / advice  (Read 14337 times)

ddm5

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Young, wealthy and still working / advice
« on: January 18, 2015, 08:31:11 AM »
Hey, everybody.

For some background, there's this thread: http://forum.mrmoneymustache.com/ask-a-mustachian/advice-for-weird-financial-situation-mid-20s-with-$1mm-of-real-estate/

I am 29 with a net worth of roughly $750-800k. Since that post, my Internet business collapsed (it's ok, I saved all the money). It only generates $500-1000 a month now.  I've added quite a bit more rental property to my portfolio, so I now collect gross rents of $11,200 with expenses of about $5,000 including PITI, evictions, vacancy, repairs. I have had basically every horrible situation imaginable happen (comes with the territory when you have 30ish units) and am confident that I can continue to weather any storms thanks to great property management, insurance, and a badass legal team.

I also decided that having over 60% of my expenses attributed to housing was stupid. I rented out my residence and moved into an RV (volkswagen rialta) financed at 4% over 12 years for a total housing cost of $100/mo no matter where in the country I am. I have goals of international travel later, and this will allow me to park it in RV storage at $15/mo instead of paying for an empty apartment back home or breaking a lease. It has really given me tons of freedom.

My personal expenses for everything including housing are now $500/mo, $400 of which is food and toiletries. I would spend more on concerts, going out etc except...

I quit my old job, took 8 months off, and got another. I'm still working for the man, which sucks, but it pays much better than the old $50k job....$120k at minimum to be exact. I plan on doing this for 2-3 years (if the oil and gas industry does not collapse) and then finally realizing my dream of backpacking around the world for probably 2 years. At that point, I will probably move to an awesome location and get another less stressful job that offers a lot of free time. Although I am not sure if that exists in the US. This current job has me working 12 hour night shifts every day...weekends, holidays, every day...in freezing weather. However, it is the only way I can see to generate that kind of income for someone as young as I am, even with my fancy degrees.

I am basically going to endure 720-1080 days of misery to reach the pot of gold at the end of the rainbow.

I am wondering how to allocate funds to set myself up for secure financial independence at that point. I should have roughly $15,000 a month of investable assets while I am at this job and have no life and thus am not spending money.

I would like to max out my residential mortgages at get 5 more at 30% down, 30yr fixed 4%. This should boost my income an additional $2,000 a month. Leveraged, I get 25-75% cash on cash returns.

At that point, I will be using commercial or portfolio loans to acquire more property. They usually have 5 year adjustable rates, so I will probably do a fatter down payment for these. Do you think this is wise or at this point should I buy in cash or buy another asset class?

I have 10% of income (max) going into an ESPP that discounts at 15% and it's good timing due to the state of the oil industry.

I have another 15% (10% of that is match) going into a traditional 401k. My allocation is 35% US small cap value, 35% us large cap, 15% foreign (incl emerging) large cap, 15% foreign (incl emerging) small cap. I am not interested in bond returns and if I was going to buy an REIT I would just buy a rental property.

For whatever is left over, what is the best investment vehicle? I have thought about a taxable stock account with an allocation matching my 401k, notes purchased through a broker in states with good foreclosure laws like Texas or Georgia, even oil and gas leases.

From what I can tell, most RTW travel budgets are about $2000 a month for backpackers. I will obviously exceeding that but I would like to have a big safety margin and also do remote investing and saving while I travel.

As an additional safety net, I found a way to make $10k per month working only one month a year. Or more if you can stand it, but I would only want to do it for a month. I would probably do this the first couple years of FI to cover living expenses, so whatever else I make is saved.

Am I exposing myself to too much risk? I am about 50% leveraged and will be more like 60% if I continue buying property. 30 year terms, 4% rates. My expenses are $6k a year, probably double that if I didn't have a job and had free time.  I am healthy, single, no kids and no interest in ever having them. When I see landlords go under, most of the ones I see have families, kids, new cars and live a nonmustachian lifestyle, have more leverage at worse terms than I do, etc so I would LIKE to think I'm ok, but what is the consensus?

Do I even really need to be putting myself through this?

I am posting this here because you are the only people crazy enough to understand what I am doing and why I do it.  Is this a solid plan or unrealistic?


[Mod Edit: Fixed URL.]
« Last Edit: January 21, 2015, 08:13:52 AM by arebelspy »

waltworks

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Re: Young, wealthy and still working / advice
« Reply #1 on: January 18, 2015, 09:01:20 AM »
You have a cash flow of $6k a month or more from the rentals? You have monthly expenses of $500?

You won, quit. Jesus. Why are you even asking us? If anything, your situation is one that inspires pity. Working 12 hours a day? F that!

Have a nice life!

-W
« Last Edit: January 18, 2015, 09:05:43 AM by waltworks »

ddm5

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Re: Young, wealthy and still working / advice
« Reply #2 on: January 18, 2015, 09:05:31 AM »
Looks like the actual number is 24, I was just ball parking.  I have class C properties at $400/mo and class b as high as $700/mo. These are mostly multifamily, so each property has multiple units.

ddm5

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Re: Young, wealthy and still working / advice
« Reply #3 on: January 18, 2015, 09:11:17 AM »
I would kind of feel badly to quit at $6k a month from real estate, though. It has changed my life and opened up so many more options. I have 30-70 years left to live, and although I have mustachian tastes, if I can set myself up to live out those years in luxury, I feel like I might as well, as long as it's not too much of a sacrifice. So I was willing to accept sacrificing ages 29-31 or 32 to be able to do awesome shit afterwards.

I've found that I really like business, but I can't stand working for an employer, at least your typical US corporate type. I think buying property and investing in businesses is fun, and I would like to continue doing it forever. Having $6k a month coming in is OK, but I can't acquire property as quickly as I'd like. I would also be unlikely to be able to leverage them, as traditional mortgages basically require a w-2 job.

And speaking of leverage, that is the other thing that makes my $6k a month not quite equal to a portfolio of index funds generating the same. The volatility and risk are much greater.  This seems to be acceptable due to my lifestyle factors I mentioned, but it worries me. I have never had this much money and don't really have any concept of it.

ddm5

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Re: Young, wealthy and still working / advice
« Reply #4 on: January 18, 2015, 09:15:08 AM »
You have a cash flow of $6k a month or more from the rentals? You have monthly expenses of $500?

You won, quit. Jesus. Why are you even asking us? If anything, your situation is one that inspires pity. Working 12 hours a day? F that!

Have a nice life!

-W

Well, I can work 12 hours a day every day and hit my number in 2-3 years or work a 9-5 with weekends off and work for the next decade and backpack around the world at 40.  That doesn't appeal to me.  I want to set myself up perfectly for what I view as the prime of a man's life: 30s.

You certainly shouldn't pity me given my financial situation.  The work is hard but tolerable.  I am basically channeling Edmund Dantes / Henry Charriere / Andy Dufresne

surfhb

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Re: Young, wealthy and still working / advice
« Reply #5 on: January 18, 2015, 09:18:28 AM »
You either have serious ADD or don't realize your situation.     You're FI already!   Slow down and enjoy life....get a girlfriend and fucking go on your backpacking trip already!  Jeesh!   :)

ddm5

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Re: Young, wealthy and still working / advice
« Reply #6 on: January 18, 2015, 09:24:32 AM »
LMAO yes, most likely severe, unmedicated ADD.

I have been in this situation for less than a year so it hasn't really sunk in.

I know I am technically FI, but it's nice to have options, isn't it? I certainly wouldn't suddenly decide I want a yacht or something in the future, but eventually if the RV / backpacker life no longer does it for me, it would be cool to be able to loosen up a bit and still be stacking enough dollars to invest and grow.

surfhb

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Re: Young, wealthy and still working / advice
« Reply #7 on: January 18, 2015, 09:40:14 AM »
LMAO yes, most likely severe, unmedicated ADD.

I have been in this situation for less than a year so it hasn't really sunk in.

I know I am technically FI, but it's nice to have options, isn't it? I certainly wouldn't suddenly decide I want a yacht or something in the future, but eventually if the RV / backpacker life no longer does it for me, it would be cool to be able to loosen up a bit and still be stacking enough dollars to invest and grow.

I say you loosen up now :).    You have an entire life ahead of you.....or it could be over tomorrow

waltworks

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Re: Young, wealthy and still working / advice
« Reply #8 on: January 18, 2015, 09:44:23 AM »
You are just going to pitied/mocked here. Sit down and figure out what your life is going to be about and then make it happen. There is not much sympathy here for just accumulating money for no reason.

-W

frugaldrummer

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Re: Young, wealthy and still working / advice
« Reply #9 on: January 18, 2015, 09:49:45 AM »
With investment income of $6000 a month you could live comfortably.  Or you could take a couple of years off then come back and work some low stress job for $30k a year and live on that while reinvesting your rental income.

Or can you do what you're doing now for a couple years but cut the hours back a bit so you're not killing yourself? 

What are your long term goals? You're financially independent right now. Any further work is about inflating your lifestyle or about pursuing dreams. How exactly will the current job help you?

frugaldrummer

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Re: Young, wealthy and still working / advice
« Reply #10 on: January 18, 2015, 09:53:05 AM »
And btw, I don't get the feeling that you're accumulating money for no reason. But I'm not sure you're completely clear on your goals and priorities. Try spelling them out more clearly.

ddm5

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Re: Young, wealthy and still working / advice
« Reply #11 on: January 18, 2015, 10:22:53 AM »
Hmm, this has caused me to think.

In the short term, my number one goal is to see the world. I have never really done any traveling and I grew up in the boring midwest. It's a big world out there and I want to see it. There is nothing I like more than being surrounded by natural beauty or seeing amazing sights. Before you suggest parking my RV in the middle of nowhere and living out my days there, as a young single man I basically have the option of 5-10 cities in the US where I can date, have a life, and meet new people who aren't cliquish / set in their social circles.

I may spend the rest of my life wandering, but I think it is more likely that I will get it out of my system after a couple years. I have some other things I want to accomplish, like doing the Appalachian trail, getting a pilot's license, etc.

After all that is done and I'm nearing my 40s, I think I would like to become a businessman.  I know I technically already am, but I want it to be on a much larger scale.  I view it as a game now and it is fun to play...I just wish I could fund it all with passive income instead of having to inject active income to speed it up as I am doing now. If I make multimillions, what will I do with it? Well, I have no idea. But it's fun to play the game anyway and keeps me occupied. When I took 8 months off, it was refreshing but I found that living in a mustachian fashion in a fixed location (this was pre RV) on $6k a month is not super fun.  Everyone else is working 24/7, so I think the only way to make it fun would be to a) travel extensively or b) have a hobby like building a real estate empire.

Also, I can't build an active business in the sense of selling my services for money, as I have no real marketable skills.

This is about as clear as I can make my life goals.  It's still pretty foggy to be honest, and there are an overwhelming amount of paths I could go down. I think it's called option overload.

waltworks

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Re: Young, wealthy and still working / advice
« Reply #12 on: January 18, 2015, 10:25:49 AM »
Bwahaha!

Go try mountain biking. Or actually go hike the AT. Learn to make things out of wood. Swing dance.

You just haven't done shit, so you don't know of anything fun but making money.

-W

ddm5

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Re: Young, wealthy and still working / advice
« Reply #13 on: January 18, 2015, 10:34:52 AM »
You could very well be correct. I've worked ever since I was legally able (15 years old I believe) including through college.  Demanding jobs on finance and now oil and gas, as well as starting Internet and real estate businesses simultaneously. I have sacrificed a shit ton of personal goals to do this and if I'm honest, kind of feel like a stunted person because of it.  I was hoping it would smooth out a couple years after I finish this gig and quit for good.

I will try to focus on what you said. The only issue I can see is that most of the time, this awesome stuff would be a solitary pursuit since everyone else's schedule is work-sleep-work-sleep. I am actually pretty OK with being alone most of the time, but I think an activity like backpacking where everyone has the next couple months/years free would make it much easier to socialize.

waltworks

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Re: Young, wealthy and still working / advice
« Reply #14 on: January 18, 2015, 10:41:28 AM »
There are LOTS of young people in the world with a lot of free time, both wealthy/FI and not, who you can meet and go hang out with.

Seriously, you won the money making game. You can keep playing it if that's what you want. But it would make sense to see if there are other things you'd like. Romantic partners are not going to be very impressed with your personality or lifestyle if all you do is work and accumulate money, either.

Quit tomorrow. Book a ticket to New Zealand and go trek.

-W

You could very well be correct. I've worked ever since I was legally able (15 years old I believe) including through college.  Demanding jobs on finance and now oil and gas, as well as starting Internet and real estate businesses simultaneously. I have sacrificed a shit ton of personal goals to do this and if I'm honest, kind of feel like a stunted person because of it.  I was hoping it would smooth out a couple years after I finish this gig and quit for good.

I will try to focus on what you said. The only issue I can see is that most of the time, this awesome stuff would be a solitary pursuit since everyone else's schedule is work-sleep-work-sleep. I am actually pretty OK with being alone most of the time, but I think an activity like backpacking where everyone has the next couple months/years free would make it much easier to socialize.

bigalsmith101

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Re: Young, wealthy and still working / advice
« Reply #15 on: January 18, 2015, 11:00:41 AM »
Waltworks is preaching the real life gospel.

I'm 28, but spent the last 5 years being semi retired. Only worked about 28 of the past 54 months. Have been to 20 countries, visited 25 states, lived in 5 of them, etc.

I can tell you right now, from personal experience that you do NOT want to wait to do the shit you're "planning on doing". I use those quotation marks because you don't seem to have a concrete plan. Lots of talk, not much action.

Backpacking the world can be done on whatever income you want, from 10/day to $100/day. Even if you spent $3k a month, you'd have passive income of $36k a month left over to reinvest in assets. Hit the road for 3 years, and that's $100k+ of net income after expenses.

You don't know how to actually ENJOY your life besides earning money, because as Waltworks has said, you're young and know nothing different as of yet.

I'm on the other end of the spectrum. I just turned 28 but have a negligible net worth as it's been spent in the opportunity cost of traveling.  But I have a concrete plan to reach financial independence, because I have already experienced the positives of the semi-retired life style. I can't go back to that lifestyle until I've got the finances to permanently support it.

YOU have already reached that threshold.

It's time to realize that you have the opportunity to embark on one of the greatest new episodes of your life, but that you are putting it off, and for no valid reason that a real Mustachian would admit to. Amassing more unnecessary wealth. WHY WOULD YOU WAIT?

Your reasons for continued wealth amassment are superficial, hedonistic, and not worth your time. Trust me. You're time is irreplaceable.

I promise that once you hit the road, you won't look back.
« Last Edit: January 18, 2015, 11:06:28 AM by bigalsmith101 »

thedayisbrave

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Re: Young, wealthy and still working / advice
« Reply #16 on: January 18, 2015, 03:16:37 PM »
I will try to focus on what you said. The only issue I can see is that most of the time, this awesome stuff would be a solitary pursuit since everyone else's schedule is work-sleep-work-sleep. I am actually pretty OK with being alone most of the time, but I think an activity like backpacking where everyone has the next couple months/years free would make it much easier to socialize.
You've come a long way and your dedication is really admirable.  But at this point I think you're just making excuses.  I promise you, there are PLENTY of twentysomethings whose schedules are NOT "work-sleep-work-sleep".  Join some meet up groups.  Do some volunteer work in areas that you feel passionate about.  Life is not all about accumulating money just for the sake of it - it seems like you're on the hamster wheel and can't get off.  Some of it may well be fear.

To put it bluntly, tomorrow is not guaranteed.  Do something that will make you happy today. 

ddm5

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Re: Young, wealthy and still working / advice
« Reply #17 on: January 18, 2015, 03:23:57 PM »
It probably is fear.  My family's main breadwinner died while I was young, leaving us broke.  Then, I graduated with a finance related degree in 2008 and spent 2 years underemployed in retail. Now, the second I get this oil job the price of oil halves.

So I have come not to be wary of, but to outright EXPECT financial catastrophe at every opportunity.

I will definitely consider all you guys have said, it's been very insightful.
« Last Edit: January 18, 2015, 03:33:02 PM by ddm5 »

travelbug

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Re: Young, wealthy and still working / advice
« Reply #18 on: January 18, 2015, 07:29:56 PM »
I hear where you are coming from. My family had it, lost it x3. So I am conservative.
If I were you, I would do the 12-18 months, make the extra coin and then go. Use the extra from the oil job and go until you have none left. Who know how long (3,5,10 years?) Accumulate the rest of your wealth and buy/pay off loans after you have had some fun.
Good on you for working it out!
We are 10 years older than you with 2 children, but we are gearing up to travel the world as well and enjoy that passive income!
Congratulations!

waltworks

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Re: Young, wealthy and still working / advice
« Reply #19 on: January 18, 2015, 07:48:04 PM »
OP is not in debt and has NW of $800k and $70k/year passive income.

-W

I hear where you are coming from. My family had it, lost it x3. So I am conservative.
If I were you, I would do the 12-18 months, make the extra coin and then go. Use the extra from the oil job and go until you have none left. Who know how long (3,5,10 years?) Accumulate the rest of your wealth and buy/pay off loans after you have had some fun.
Good on you for working it out!
We are 10 years older than you with 2 children, but we are gearing up to travel the world as well and enjoy that passive income!
Congratulations!

genselecus

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Re: Young, wealthy and still working / advice
« Reply #20 on: January 18, 2015, 08:17:41 PM »
I think you are in an awesome spot and want to echo the congrats that you are getting from other folks. Nice job!

I tend to be pretty conservative as well, but I think you are in a spot where you are bordering being irrational (some may say you're well past that point). Given your viewpoint, I would set a hard date, no more than 2 years out, at which time you will quit and travel the world. During your non work/sleep phases, plan out your trip. Figure out where you are going, how long you'll be there, look at pictures on the internet and print them out to put on your wall. Surround yourself with your plans and you may find that your hard date is harder to justify.

As people have said, you've made it, and already have a nice stache. If you live a backpacking life for a few years, that stache is only going to grow bigger. You have the rest of your life to build a real estate empire, but you don't appear to have considered an alternative. Perhaps you'll realize that the real estate plans are just not as important as other factors.

ddm5

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Re: Young, wealthy and still working / advice
« Reply #21 on: January 18, 2015, 08:38:12 PM »
You know, you guys are right. Some things  in life are more important than money and this lifestyle really isn't worth it. It would be easier to tolerate if I needed the money. I will set a target: when I reach the point where I am socking away 8k/month on savings on top of $1500/mo allotted for personal and travel expenses, I'm out. Conservatively, this will take 18 months if I am financing properties. Definitely not 2 years and definitely not 3.

I looked at the prices of flights and I struggle to find one over $500. If I do, there is usually a nearby city for under $500 that I could then take a train from. I guess the backpacker life doesn't take much.

By the way, that's amazing that you are traveling with a wife and two kids.  Incredible that you accomplished that...I actually think that would be a lot harder than what I've done. Good for you.

Daffy

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Re: Young, wealthy and still working / advice
« Reply #22 on: January 18, 2015, 09:07:44 PM »
Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

ddm5

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Re: Young, wealthy and still working / advice
« Reply #23 on: January 18, 2015, 09:41:50 PM »
Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

Any recommendations on the camera?

waltworks

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Re: Young, wealthy and still working / advice
« Reply #24 on: January 18, 2015, 09:46:08 PM »
Now that's more like it! :)

-W

Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

Any recommendations on the camera?

Daffy

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Re: Young, wealthy and still working / advice
« Reply #25 on: January 18, 2015, 09:55:35 PM »
Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

Any recommendations on the camera?
I know nothing! I'd have to ask the experts at Google and Amazon.com reviews. :)

bigalsmith101

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Re: Young, wealthy and still working / advice
« Reply #26 on: January 18, 2015, 10:48:56 PM »
Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

Any recommendations on the camera?

Yes! I can personally recommend the Canon Powershot G12. The G series camera is the go to point and shoot camera for the full professional photographer. Seriously, if they carry a hand held camera along with their DSLR, it's a Canon G series camera.

The G12 offer a totally automatic point and shoot camera, with full manual operation (if you desire), and takes fantastic photos.

I carried the G11 camera for 8 months from Seattle, WA to Argentina in the tank bag of my motorcycle. It performed flawlessly. I sold it to the man who bought by motorcycle.

I carried the G12 camera for 12 months in Australia, Thailand, Laos, Cambodia and again was very happy with the camera. Here are some of the shots, with way more in the storage.


frugaldrummer

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Re: Young, wealthy and still working / advice
« Reply #27 on: January 18, 2015, 11:15:41 PM »
Quote
It probably is fear.  My family's main breadwinner died while I was young, leaving us broke.  Then, I graduated with a finance related degree in 2008 and spent 2 years underemployed in retail. Now, the second I get this oil job the price of oil halves.

Ohhhhhh.......NOW it all makes sense!

You HAVE experienced some financial instability!  So it makes more sense, that you want more security than most young people your age would need.

Still, I like the stability of your finances so far - usually rental income will be pretty stable, and even if the value of your properties on paper declines, the rents are likely to stay pretty stable or increase.  The one possible exception - are your rental properties part of the fracking boom?  If so, I would consider trying to diversify to some properties in more stable markets.

I heard a talk the other day which mentioned that the anticipation of a vacation was as valuable and enjoyable as the actual event.  So pick a quit date and start enjoying your trip by planning, visualizing, preparing for it.

But also, don't forget to hang out with friends in the meantime too.  Try Meetup if you are having a hard time meeting people.


NICE!

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Re: Young, wealthy and still working / advice
« Reply #28 on: January 19, 2015, 01:00:59 AM »
Bro, you can literally do whatever you want now. You have no obligation to sacrifice to earn income. If you want to work, take a job at a nonprofit helping build wells in the developing world, or whatever suits your particular ideals.

Or, go travel. Meet people. Heck, gamble in Macau or go on a trip to chase foreign women in Thailand and...I don't know? Poland? Honduras? Doesn't matter.

If I had that $6k coming in years ago I would've been out of the military, trying to bag Kilimanjaro and other mountains, doing some NGO work, experiencing new cultures, learning new languages, and chasing Eastern European and Southeast Asian women.
« Last Edit: January 19, 2015, 01:15:53 AM by NICE! »

Rosbif

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Re: Young, wealthy and still working / advice
« Reply #29 on: January 19, 2015, 02:09:07 AM »
Yeah, just go travelling. Only get one go at life, and what if your number's up before you have chance to go?

Oh, and the rest of you:

* Girl in bikini.jpg (290.16 kB, 1024x768 - viewed 10 times.)
* Grain Bin.jpg (106.64 kB, 1024x768 - viewed 4 times.)
* Ocean.jpg (171.92 kB, 1024x768 - viewed 3 times.)

You're all perverts.

lhamo

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Re: Young, wealthy and still working / advice
« Reply #30 on: January 19, 2015, 02:15:21 AM »
You could also look at getting an expat assignment as a way to travel -- big oil and gas firms are now pretty much everywhere in the world (including here in China, most of Central Asia and much of SE Asia). 

NICE!

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Re: Young, wealthy and still working / advice
« Reply #31 on: January 19, 2015, 03:07:24 AM »
Yeah, just go travelling. Only get one go at life, and what if your number's up before you have chance to go?

Oh, and the rest of you:

* Girl in bikini.jpg (290.16 kB, 1024x768 - viewed 10 times.)
* Grain Bin.jpg (106.64 kB, 1024x768 - viewed 4 times.)
* Ocean.jpg (171.92 kB, 1024x768 - viewed 3 times.)

You're all perverts.

Not sure I'm a fan of the term, I prefer sex positive. You could've just read my post to figure that one out, though.

chasesfish

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Re: Young, wealthy and still working / advice
« Reply #32 on: January 19, 2015, 06:05:38 AM »

I've found that I really like business, but I can't stand working for an employer, at least your typical US corporate type. I think buying property and investing in businesses is fun, and I would like to continue doing it forever. Having $6k a month coming in is OK, but I can't acquire property as quickly as I'd like. I would also be unlikely to be able to leverage them, as traditional mortgages basically require a w-2 job.


You're way past traditional mortgages.  Congrats on your success, be conservative and keep enjoying the real estate game.  We all decide to spend our post "working because we have to" time differently.

TN_Steve

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Re: Young, wealthy and still working / advice
« Reply #33 on: January 19, 2015, 12:42:11 PM »
For another set of eyes/comments, you might want to visit http://www.early-retirement.org/

Although most of the participants over there are older than you, there have been a few posters in a similar situation.

Overall, I think most of the comments here are right; with your spending levels, you probably are good to go, once you get comfortable with the idea.  Then again, working feverishly for a few more years to accumulate some non-real estate assets would provide you with additional margin of safety.

boarder42

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Re: Young, wealthy and still working / advice
« Reply #34 on: January 19, 2015, 12:47:46 PM »
i havent read thru everything ... but you're still banking 60K+ a year while only spending 6k ... you can greatly up your lifestyle to ultra luxurious whenever you want to.  and then scale it back down. 

Daffy

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Re: Young, wealthy and still working / advice
« Reply #35 on: January 19, 2015, 01:33:38 PM »
* Girl in bikini.jpg (290.16 kB, 1024x768 - viewed 10 times.)
I... uh... was admiring the nice reflections in the water...

bigalsmith101

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Re: Young, wealthy and still working / advice
« Reply #36 on: January 19, 2015, 02:21:33 PM »
* Girl in bikini.jpg (290.16 kB, 1024x768 - viewed 10 times.)
I... uh... was admiring the nice reflections in the water...

I'll make sure to tell dear wifey that she's got at least 3 more vocal admirers and a few more less vocal ones!

ddm5

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Re: Young, wealthy and still working / advice
« Reply #37 on: January 19, 2015, 04:42:26 PM »

I've found that I really like business, but I can't stand working for an employer, at least your typical US corporate type. I think buying property and investing in businesses is fun, and I would like to continue doing it forever. Having $6k a month coming in is OK, but I can't acquire property as quickly as I'd like. I would also be unlikely to be able to leverage them, as traditional mortgages basically require a w-2 job.


You're way past traditional mortgages.  Congrats on your success, be conservative and keep enjoying the real estate game.  We all decide to spend our post "working because we have to" time differently.

What kind of financing would you recommend then? I don't believe I qualify for conventional lending and many portfolio lenders won't even help me, due to the fact that my base at the new job is 24k even though all in is 150k.  I hate to imagine how bad it would be if I didn't have a job.

ddm5

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Re: Young, wealthy and still working / advice
« Reply #38 on: January 19, 2015, 08:23:48 PM »
Bro, you can literally do whatever you want now. You have no obligation to sacrifice to earn income. If you want to work, take a job at a nonprofit helping build wells in the developing world, or whatever suits your particular ideals.

Or, go travel. Meet people. Heck, gamble in Macau or go on a trip to chase foreign women in Thailand and...I don't know? Poland? Honduras? Doesn't matter.

If I had that $6k coming in years ago I would've been out of the military, trying to bag Kilimanjaro and other mountains, doing some NGO work, experiencing new cultures, learning new languages, and chasing Eastern European and Southeast Asian women.

You're talking about doing exactly what I plan to do. Plenty of common ground there. Do you think you can get up Kilimanjaro significantly cheaper if you have boots on the ground in Tanzania? Booking stateside through the Internet is $2500. Which is decidedly nonmustachian. I have heard legends of the women in EE and SEA and am basically holding off on long term relationships with American women until I have a look

ddm5

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Re: Young, wealthy and still working / advice
« Reply #39 on: January 19, 2015, 08:25:14 PM »
Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

Any recommendations on the camera?

Yes! I can personally recommend the Canon Powershot G12. The G series camera is the go to point and shoot camera for the full professional photographer. Seriously, if they carry a hand held camera along with their DSLR, it's a Canon G series camera.

The G12 offer a totally automatic point and shoot camera, with full manual operation (if you desire), and takes fantastic photos.

I carried the G11 camera for 8 months from Seattle, WA to Argentina in the tank bag of my motorcycle. It performed flawlessly. I sold it to the man who bought by motorcycle.

I carried the G12 camera for 12 months in Australia, Thailand, Laos, Cambodia and again was very happy with the camera. Here are some of the shots, with way more in the storage.

Super informative, dude. Thanks. I know nothing about electronics. I've thought about nature/wildlife photography as a side gig/hobby but until that post I would have just been snapping pics on my iPhone.

JLee

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Re: Young, wealthy and still working / advice
« Reply #40 on: January 19, 2015, 08:53:19 PM »
Dude. Congrats.

You better buy a nice camera because you're gonna have plenty of sweet pictures of your travels.

Start a blog! lol

Any recommendations on the camera?

For what it's worth, I really like my Sony A5000. I have the 16-50mm and 55-210mm lenses.

http://www.squashingrocks.com/trip-reports/
http://www.squashingrocks.com/wp-content/uploads/2015/01/baja-day4-2.jpg
http://www.squashingrocks.com/wp-content/uploads/2015/01/baja-day5-3.jpg

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Re: Young, wealthy and still working / advice
« Reply #41 on: January 20, 2015, 08:52:45 AM »
You're talking about doing exactly what I plan to do. Plenty of common ground there. Do you think you can get up Kilimanjaro significantly cheaper if you have boots on the ground in Tanzania? Booking stateside through the Internet is $2500. Which is decidedly nonmustachian. I have heard legends of the women in EE and SEA and am basically holding off on long term relationships with American women until I have a look

Point 1: yes, absolutely you can do everything cheaper in Africa once you have boots on the ground. This is pretty much always the case in the developing world. If you go too Western you're going to pay more for things than you'd even pay at home. Since you're young and single you can take more calculated risks with local deals. I no longer have this option because I'm married and my occupation forces me to strongly consider security. Thus, I have to pay more to have a more guaranteed situation.

Point 2: you're a smarter man that I was. I wish I would've done a gap year to travel EE and SE when I was super young, in super good shape, and single. Just take the necessary health precautions.

Side Note: this is slightly related to #2, but is more overall advice. People will think you're rich just because you're American (or outside of Europe, if you're white). Avoid overt displays of wealth and just accept this fact. If you're just looking to have fun with women, that will work out great for you. If you're looking for love, be aware of the fact that many people are chasing money and/or visas.

Spondulix

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Re: Young, wealthy and still working / advice
« Reply #42 on: January 21, 2015, 01:49:34 AM »
Priorities can change a LOT between 28 and 33. The early 30s are when the brain fully finishes developing and that little voice gets stronger that says, "Is it really a good idea to take a year off/backpack/jump off a cliff/quit my job?" You could meet someone next year and want to settle down or find yourself in a startup that you can't get a day away from (let alone a month)... point is, life circumstances will likely change in the next 5-10 years for you, so waiting 2-3 years is silly when you have ALL the resources you need to do it now. Carpe Diem. Not everyone gets an opportunity like you've made for yourself here.

arebelspy

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Re: Young, wealthy and still working / advice
« Reply #43 on: January 21, 2015, 08:22:43 AM »
Here's the thing.. you're at the point where you aren't sure if you're done yet, or when you will be.

But you have enough financial security that you can take some time off and see.

You have dreams of travel.  Go do them for a year, or two.  You'll have your RE income coming in all that time.  After a year or two of travel, decide if you want to go back and sacrifice another year or two of working.  You'll have much more data to pull from at that point to know if it's worth it, rather than just giving up those years "in case."

As for cameras, it depends on what you want.. something with lenses, or no?

The wirecutter has the best reviews on the Internet.  I recommend for travel getting the RX100 M3: http://thewirecutter.com/reviews/best-point-and-shoot-camera-under-1000/

If you want lenses (which I wouldn't for space/weight reasons for travel, but to each his own), go mirrorless over DSLR: http://thewirecutter.com/reviews/best-affordable-mirrorless-camera/#
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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blainem13

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Re: Young, wealthy and still working / advice
« Reply #44 on: January 21, 2015, 07:03:20 PM »
Quote
It probably is fear.  My family's main breadwinner died while I was young, leaving us broke.  Then, I graduated with a finance related degree in 2008 and spent 2 years underemployed in retail. Now, the second I get this oil job the price of oil halves.

Ohhhhhh.......NOW it all makes sense!

You HAVE experienced some financial instability!  So it makes more sense, that you want more security than most young people your age would need.

Still, I like the stability of your finances so far - usually rental income will be pretty stable, and even if the value of your properties on paper declines, the rents are likely to stay pretty stable or increase.  The one possible exception - are your rental properties part of the fracking boom?  If so, I would consider trying to diversify to some properties in more stable markets.

I heard a talk the other day which mentioned that the anticipation of a vacation was as valuable and enjoyable as the actual event.  So pick a quit date and start enjoying your trip by planning, visualizing, preparing for it.

But also, don't forget to hang out with friends in the meantime too.  Try Meetup if you are having a hard time meeting people.

I am very worried about your exposure to the oil and gas industry as well (no pun intended!).   You've got your day job and your investments tied to the same industry/macroeconomics if your properties are in an area where you are renting to other oil and gas workers.  I'm just thinking about the fact that your highly-leveraged but cash-flowing real estate could lose all kinds of cash flow if drilling activity slows dramatically and there are many fewer renters.  Given the leverage that you may have, you could have no choice but to strategically default.  While others are saying you are FI due to your cashflows, I don't think you have the same level of safety that others may think.  I would work the next few years and invest your massive savings into a low-cost broad market index fund.  I'm not a financial advisor, but that's what I would do.  Your risk profile scares me...

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Re: Young, wealthy and still working / advice
« Reply #45 on: January 21, 2015, 08:11:36 PM »
I am very worried about your exposure to the oil and gas industry as well (no pun intended!).   You've got your day job and your investments tied to the same industry/macroeconomics if your properties are in an area where you are renting to other oil and gas workers.  I'm just thinking about the fact that your highly-leveraged but cash-flowing real estate could lose all kinds of cash flow if drilling activity slows dramatically and there are many fewer renters.  Given the leverage that you may have, you could have no choice but to strategically default.  While others are saying you are FI due to your cashflows, I don't think you have the same level of safety that others may think.  I would work the next few years and invest your massive savings into a low-cost broad market index fund.  I'm not a financial advisor, but that's what I would do.  Your risk profile scares me...

100% disagree. Even if you think this is a problem he can diversify it away right now. Why does he have to wait?

bigalsmith101

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Re: Young, wealthy and still working / advice
« Reply #46 on: January 21, 2015, 08:14:02 PM »
I am very worried about your exposure to the oil and gas industry as well (no pun intended!).   You've got your day job and your investments tied to the same industry/macroeconomics if your properties are in an area where you are renting to other oil and gas workers.  I'm just thinking about the fact that your highly-leveraged but cash-flowing real estate could lose all kinds of cash flow if drilling activity slows dramatically and there are many fewer renters.  Given the leverage that you may have, you could have no choice but to strategically default.  While others are saying you are FI due to your cashflows, I don't think you have the same level of safety that others may think.  I would work the next few years and invest your massive savings into a low-cost broad market index fund.  I'm not a financial advisor, but that's what I would do.  Your risk profile scares me...

100% disagree. Even if you think this is a problem he can diversify it away right now. Why does he have to wait?

Agreed, if this is indeed a problem that needs to be rectified, the solution would not have to wait 3 years to be enacted.

frugaldrummer

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Re: Young, wealthy and still working / advice
« Reply #47 on: January 21, 2015, 09:12:57 PM »
I agree too. If the rentals are fracking-related (and we don't know if they are) he could sell some and buy rentals in some other less volatile market to reduce his risk

blainem13

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Re: Young, wealthy and still working / advice
« Reply #48 on: January 22, 2015, 05:47:11 PM »
If the real estate is in fracking territory, it may not be possible to unload those properties in a timely manner at this point.  Oil prices are down 60% YOY and rig counts are dropping. 

However, I agree that the sooner he could diversify the better.  Given his low living expenses, he's already FI, but it would be way more secure if the nest egg were more diversified.  Also, I think continuing to work for a few years would solidify the RE future, but I personally wouldn't have the appetite for the hours of a roughneck...  Life is too short for that.

Bob W

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Re: Young, wealthy and still working / advice
« Reply #49 on: January 23, 2015, 12:40:29 PM »
Whatever you decide is fine.  You could have a great time hiking in Europe or you could be murdered.  You could keep your current job and situation and meet the person of your dreams.   

Anything can happen.

Find your own comfort level.   Personally I don't think 6K a month is not a luxury lifestyle number.  If you whack it out for another 3 years you might bump that to 10K.  Still that isn't buying much in todays numbers.  I could imagine you working and loving it for many many years and never regretting not doing the hiking gig. 

You appear to love the business end and I bet you would be bored shitless doing pointless travel.  For those unaware sunsets and hot girls are pretty much everywhere.   

Have fun either way!