Congrats. I think I remember your WR was really high. Has it come down ?
Congrats!!!
I recall reading that you were under the 25x threshold at the time of retirement...are you there now since you FIRED into a raging bull market?
Withdrawal rate at FIRE date was about 10.5%. It was around 5% before COVID and currently 6.27%.
Passive income (interest, dividends, distributions) equal 72.23% of annual budget. Options trading income comes to 225.87% of budget for total budget coverage of 298.11%. All an "closed positions" basis and before taxes of course.
wow - that is pretty high! I didn't think that could be doable, so I am very intrigued!
I'm a bit confused about the total budget coverage of 298% with the options trading. So - you are working as a trader with your stache?
Any details you can share about making it work with such a high withdrawal rate initially?
I keep about 70% of my taxable account in fixed income, preferred, REIT, CEFs, and individual bonds bought at a discount to par (used to have MLPs but the tax headache at year end wasn't worth the extra yield, I was basically working for a paltry wage as a tax accountant once a year). This produces passive income of 13,002/yr (all divs, distributions, and interest) which is currently 72.23% of my 18,000 annual budget (it's not as dire as it sounds, House and car are paid for.)
The remaining taxable account is in options targeting around 6-8 weeks to expiry. My annualized earnings on closed positions is 44,051 (e.g. 36,709 in closed positions through 10 months). October was a very good trading month. I'm positioned much more defensively for now and through November because of election based uncertainty and will probably see that average decline. But I'm in good shape for covering the budget. As my cash balance climbs, I'll ocassionally add more "income" investments. Eventually my entire budget will be met passively and I can position myself ever more defensively.
To be honest, I expected to go Barista-FIRE doing something trivial part time as consistently trading for income seemed a tall order. It just hasn't been necessary due to a very kind market. I started toying with finding non-profit work part time in February. Had a couple interviews and have been waiting on follow up interviews in March (Zoom) that are on indefinite hold due to COVID.
I'm currently in a de-risking period with my trading. I'll be trading in the money bear put spreads on mature dividend growing companies going forward.