Case Study: Early retirement or what?

[seanpizzle]

Here's my story.   I worked in tech industry in high stress job on a never ending treadmill of bigger sales goals and quotas.   Last year I threw in the towel at age 47.    I had been making $400-500K/year, but thankfully we never lived to that income level.   I started a small business to bring in some money doing the same thing I had been doing, but it's really a lifestyle business and I haven't put a ton of effort into it and I certainly am not passionate about what I do.

Some relevant facts:
47 year old Mrs. Seanpizzle, stay at home mom
13 year old kid.

Spending per month....Embarrassingly we don't track our spending.   I estimate its about 7K a month:
Health Insurance:  1500 month
Property taxes:   450/mo
Electric/Gas/Sewer/Water/Trash 600/mo
Food/eating   800 month
Insurance (Life $166, Property $100, Cars $250)  516
Cell phone/cable modem/netflix/amazon   195
Property maint and Pool(done by myself):   300/mo
Gas and car upkeep:  $500/mo
Vacations (amortized) $600/mo

This totals $5461.  There are some other misc expenses I am sure I am missing here, but total should be under $7K mo.

Assets:
Zero Debt. 11 and 12 year old cars.
Primary residence value $575K
half of vacation condo $400K.
$512K investment account
$130K misc IRAs
$310K business cash
$400K checking balance
$1M in equity in family home being sold this year to be invested
$400K illiquid half of land parcel (shared with family member)
$120K in 529 education plan (to be used in 5.5 years)
$75K in savings account

Misc Income:
$1500 month from vacation condo
$1100 month oil royalties

Honestly, I am at career burnout and hate the idea of ever going back to the grind.   I kind of just want to hang it up and live a healthier life.   It's been very hard psychologically the last year in not working, I feel guilty and shameful for stepping off the treadmill.   They say comparison is the thief of joy, and I fall into the comparison trap too often.  We have never "kept up with the jonses" per se, but working and earning the W2 was how I defined myself.   

I would love to hear from others that have gone through an early retirement, whether voluntary or involuntary and what their quality of life is like.  Right now I'm feeling a bit lost.

thanks
Seanpizzle

[nereo]

Assets:
Zero Debt. 11 and 12 year old cars.
Primary residence value $575K
half of vacation condo $400K.
$512K investment account
$130K misc IRAs
$310K business cash
$400K checking balance
$1M in equity in family home being sold this year to be invested
$400K illiquid half of land parcel (shared with family member)
$120K in 529 education plan (to be used in 5.5 years)
$75K in savings account

Misc Income:
$1500 month from vacation condo
$1100 month oil royalties

Congratulations - you enough in assets to generate far more annual income than the 95% of US households in perpetuity. 
At first blush, you have just over $2.5MM in liquid assets (ignoring your primary and vacation condo).  At 4% WR that's $101k/year, which is far higher than what you *think* your annual spending is.

Adding to that, you have $2600/mo in income (another $31.6k/yr).

To improve: 
1) Holy cow you have too much cash and cash equivalent.  Those green-soldiers needs to be invested pronto, according to your ISP.
2) your expenses are high in very category.  You could cut most of these in half with NO decrease in your quality of life.
for example: you don't need life insurance (you are FI, aka self-insured).  No idea how you can spend $500/mo on two cars with no loans - how much do you drive each month??  stop!

now all you have to do is jump! what is stopping you?
g'luck

[toucansurfer]

Hi Sean,

2nd the view you can fire whenever you want.  You may want to do each big step slowly but main recommendation.  Take vacation asap.  Spend the entire time sorting out your investments.  I.e get a solid plan together as it appears to be a bit random at the moment with lots of cash not working for you. 

Once you have that in order begin checking your expenses.  Should be a day dump out of the cc's into excel and organise.  You'll find everyone underestimates their expenses. 

Once you realise where you're bleeding, start cutting.  It'd start with the cable and life insurance.  Sell 1 car as you'll both be at home now. 

Once you return throw in the flag when you're comfortable but soon.  Once you get more free time you'll find it a lot easier to optimise your life.

Good luck

You can always work again if it all goes south but you'd really have to start burning cash for that to happen.

[SwordGuy]

I saw that $500/month car expense (with no car loans) and thought, "Golly!  He must have nubile women wearing bikinis waxing his cars and hand-buffing them with rose petals.

Seriously, you've got expenses that are a lot higher than they need to be.   Once you stop working, relax and recover, and think about it, you'll see that some of that spending is just plain unnecessary.

You have everything you need to live on already.

Your current cash and stock balances, if invested in low-fee index funds, should easily bring in $60,000 at the 4% withdrawal rate.    Convert that $1M equity to $900k+ ('cause realtors cost money and so do pre-sale repairs) and you've got close to another $40,000 coming in.   

Another $13,200 for oil revenue.

And another $9k to $18k in vacation rental money (not clear whether you're discussing gross rents or net profit).

If you take the time to control expenses and get your assets working for you, you'll have more money than you need.

[MDM]

We have never "kept up with the jonses" per se, but working and earning the W2 was how I defined myself.   

I would love to hear from others that have gone through an early retirement, whether voluntary or involuntary and what their quality of life is like.  Right now I'm feeling a bit lost.

Seanpizzle, welcome to the forum.

As others have noted, financially you should have no worries even at current spending, and you can probably reduce that spending without much if any pain.

You now have the opportunity to redefine yourself.  That can be a tougher row to hoe, particularly if you can't let go of the old measuring sticks: annual performance evaluations, salary increases, bonuses, etc.  The nice thing is that you have already won that game, so you don't need to play it anymore.  Find a different game, one in which you set the rules and keep the score.  For me, success is "doing what I want."  So each day I can ask myself, "did I do what I wanted to do?" and the vast majority of the time the answer is "yes!".  Best wishes that you find the same success.

[2Birds1Stone]

$ wise you are golden, which begs the question....what are you retiring to?

[nereo]

Find a different game, one in which you set the rules and keep the score.  For me, success is "doing what I want."  So each day I can ask myself, "did I do what I wanted to do?" and the vast majority of the time the answer is "yes!".  Best wishes that you find the same success.

This may be the best metric of what being FI really means.  Sadly in my current situation I come home everyday and ask "did I accomplish what I wanted to today" and the vast majority of the time the answer is "not even close". 
So I have a ways to go

[Car Jack]

$ wise you are golden, which begs the question....what are you retiring to?

A very wise question.

A starting question.....what would you enjoy doing?  Just an example....if you love woodworking, maybe go work at a hardware store or Home Depot.  Make enough so you can max out a Roth.  Get sick of it?  Go get a job at Starbucks or whatever.  I am more of a normal retirement age and plan to do these silly jobs where I'll quit whenever I decide to.  I also plan to go take some college courses to understand finance better.  Maybe sit for the CFP.  But that's my plan.....make your own plan.