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General Discussion => Post-FIRE => Topic started by: LiseE on March 20, 2016, 11:15:33 AM

Title: Has your networth grown since you Fired?
Post by: LiseE on March 20, 2016, 11:15:33 AM
For those that are POST-FIRE, I was wondering if your net worth has grown since you starting drawing from it?  Also, how what does it look like when you first pull the trigger?  Do you keep a years worth of expense $$ in the bank and replenish your bank account monthly with what you draw from investments?

How common, do you think it is for your net worth to continue to grow after retiring early?

Thx,
Lise
Title: Re: Has your networth grown since you Fired?
Post by: DaveSch on March 20, 2016, 07:22:57 PM
My job that I had for 34 years ended about 9 years ago when the owner decided to close the place, due to poor business conditions, and that the boss was quite a bit older than I. Since it was a small place, there were no pensions or 401k plans. But I always was good at saving and ok at investing. I had about 30x my yearly pay in savings and investments.

Moving 9 years ahead, and through a bad market in my early FIRE, my portfolio is about 25% ahead of what it was in 2007, after spending what I needed. I've always held a larger cash portion than many others I see on here.

I was scared, but the fears were unfounded.

I wished I could have continued to work as I never wanted to retire.

Dave


Title: Re: Has your networth grown since you Fired?
Post by: Frankies Girl on March 20, 2016, 08:47:29 PM
I am FIREd, but the husband isn't and his salary is just enough to cover our basic expenses, so we haven't started drawing off our investments (other than the required distribution on an inherited IRA).

That being said, sure, our net worth has grown a bit in the last year even though the market got a bit bumpy. Net worth includes things like real estate and our neighborhood is very hot right now, so just the insane gain in equity knocked us up quite a bit. Net worth will very likely continue to grow even after the husband quits and we use our investments to fully fund our expenses. I'd expect that to be the norm rather than the exception. Most of us on here are not high dollar spenders, so our yearly expenses are going to be much less than the annual market growth percentage pretty often.

Our plan is to keep about 1-2 years worth of expenses in cash earning 1%. In years the market is doing well, pull from investments. Years the market is doing poorly, we'll use that cash reserve to allow the investments a chance to recover and avoid drawing them down. In the event that there is a longer bear market than 1-2 years, we'll probably end up cutting all expenses to the bone (we have lots of fat to cut actually) and then get part time jobs as needed to ride it out.

You should check out Dr. Doom's blog (Living A FI) for his excellent drawdown series: http://livingafi.com/2014/05/09/drawdown-part-1-the-basics/
(or just read his whole blog - it's uniformly awesome)

Title: Re: Has your networth grown since you Fired?
Post by: Dicey on March 21, 2016, 05:24:13 AM
I am FIREd, but the husband isn't and his salary is just enough to cover our basic expenses, so we haven't started drawing off our investments (other than the required distribution on an inherited IRA).

That being said, sure, our net worth has grown a bit in the last year even though the market got a bit bumpy. Net worth includes things like real estate and our neighborhood is very hot right now, so just the insane gain in equity knocked us up quite a bit. Net worth will very likely continue to grow even after the husband quits and we use our investments to fully fund our expenses. I'd expect that to be the norm rather than the exception. Most of us on here are not high dollar spenders, so our yearly expenses are going to be much less than the annual market growth percentage pretty often.
Frankies Girl and I are apparently living parallel lives. I pulled the plug just over three years ago and our NW is up at least 20% since then. If I count equity in our properties, the percentage is significantly higher than that. I don't, because we're not planning on selling anything any time soon. We are still buying rental properties and fixing them up, but that's as close to working again as I ever hope to get.

Also, welcome to the forum, DaveSch. It looks like you have some interesting stories to tell.
Title: Re: Has your networth grown since you Fired?
Post by: NorcalBlue on March 21, 2016, 10:27:57 AM
I FIRE'd 13 months ago at 42.  I had a HUGE cash position that I've DCA'd into the market over the last 13 months.  Almost 60% equities now.  And yes, my Net worth is up a few % as I did some buying during the recent swoons.
Title: Re: Has your networth grown since you Fired?
Post by: dude on March 21, 2016, 12:06:39 PM
My networth has grown since I FIREd at 42. Mostly because I ended up spending less once retired than I thought I would by a lot, and because the value if my paid off house has increased.   I'm selling it and will be downsizing so much of that money will be added to the stash.

You're not leaving Cali, are ya?  Planning to buy something smaller, or rent?  Lower COL area (i.e., away from the coast) or same general area?
Title: Re: Has your networth grown since you Fired?
Post by: iris lily on March 21, 2016, 12:34:32 PM
Yes. Annually we do a snapshot of our assets, and the 2015 asset number was higher than the 2014 asset number.

 But I have pension income,  though it does not nearly cover all of our expenses.

I am mentally preparing  myself for our stash to decrease. Thats ok, it is there ito support our life, it can shrink. Its ok. really, it will be ok! I keep telling myself this. :)

Edited to say: doh. No, our assets did not increase. Our assets went down a tiny bit in the past year, this first year of fire. 2016 will be the same.
Title: Re: Has your networth grown since you Fired?
Post by: dude on March 21, 2016, 01:11:08 PM
My networth has grown since I FIREd at 42. Mostly because I ended up spending less once retired than I thought I would by a lot, and because the value if my paid off house has increased.   I'm selling it and will be downsizing so much of that money will be added to the stash.

You're not leaving Cali, are ya?  Planning to buy something smaller, or rent?  Lower COL area (i.e., away from the coast) or same general area?
Yeah leaning towards leaving but still on the fence. Started a couple if whine-threads here about it asking for advice but generally....just whining... about the smog, the heat, the people, the urban sprawl and concrete jungle, the traffic ;). Been ready to leave for a long time but it's so cheap for me to live here ,and easy with the dog, that I haven't pulled the plug yet. But my whines are getting louder so will probably sell soon. Plan to combined e travel and renting until I know where/if I want to buy again. Probably a small apt or condo or house in northern New England or the PAC NW.

Wow, good luck!  Keep us posted!  You're one of the longer-tenured FIREee's on this site, so your experiences are very valuable to the MMM crowd!
Title: Re: Has your networth grown since you Fired?
Post by: Cassie on March 21, 2016, 03:13:05 PM
Yes but mainly because our home value is going up.
Title: Re: Has your networth grown since you Fired?
Post by: Spork on March 21, 2016, 04:15:53 PM
Ours is "roughly the same" but...
* only been FIRE about 9 months.  I'm not sure that's a long enough period to judge.
* a bit of a market slip at the tail end of 2015 (and mostly recovery)
* a lot of extra expenses dealing with sick/dying family member

I'm relatively confident our "normal" expenses are in line for net to grow slightly under normal circumstances.
Title: Re: Has your networth grown since you Fired?
Post by: soccerluvof4 on March 28, 2016, 05:17:46 PM
Will be a year April 3rd. If the Market doesnt tank drastically I will be up 6 figures or adding about a year and a half to my withdrawl rate.

The second part of your question I have more cash than usual but am comfortable with that for now. I am about 20% cash but that is what I am living on for a few years unless I buy a rental or ???? just something I did for comfort reasons.
Title: Re: Has your networth grown since you Fired?
Post by: dude on March 29, 2016, 11:46:16 AM
My networth has grown since I FIREd at 42. Mostly because I ended up spending less once retired than I thought I would by a lot, and because the value if my paid off house has increased.   I'm selling it and will be downsizing so much of that money will be added to the stash.

You're not leaving Cali, are ya?  Planning to buy something smaller, or rent?  Lower COL area (i.e., away from the coast) or same general area?
Yeah leaning towards leaving but still on the fence. Started a couple if whine-threads here about it asking for advice but generally....just whining... about the smog, the heat, the people, the urban sprawl and concrete jungle, the traffic ;). Been ready to leave for a long time but it's so cheap for me to live here ,and easy with the dog, that I haven't pulled the plug yet. But my whines are getting louder so will probably sell soon. Plan to combined e travel and renting until I know where/if I want to buy again. Probably a small apt or condo or house in northern New England or the PAC NW.

Wow, good luck!  Keep us posted!  You're one of the longer-tenured FIREee's on this site, so your experiences are very valuable to the MMM crowd!
Is that your polite way of saying I'm old ;)! 

I've been travelling around a lot looking at other areas and there are so many I think I'd like better than here. Plus with the value of my house increasing it makes me want to sell and downsize/move to a LCOL area even more so. Like that it will greatly increase my networth too. Not being attached to the area, house, kidless and single makes it easier for me to move and downsize then it is for others probably. Plus if I miss it I can always move back. I think it's a good way to increase your NW once FIREd, or a way to attain FIRE earlier for people who aren't quite there yet.

Nope, not old, just FIRE experienced!

Curious, do the other areas include close proximity to beaches, assuming beach volleyball is still something you spend a lot of time doing?
Title: Re: Has your networth grown since you Fired?
Post by: retired? on March 29, 2016, 08:30:07 PM
Just coming up on 2 years.  It hit a peak last August and, when I checked last month, it was almost exactly the same as when I quit.  It's a nice feeling, but still some concern since children are 12 and 14 (support for another 10 years) and we are not really that good at containing costs......my approach when working was to save a significant percent, but that also left a decent amount of $$.  There are some habits developed over two decades that are hard to break (for my wife).

The peak NW was about 10% over the starting point.  All investments are in stocks (I'm 46 and feel comfortable with that) and a rental home.

The "cash on hand" is probably equivalent to about two years of expenses.  I could probably do with less, but I don't feel like putting more into stocks right now. 

Title: Re: Has your networth grown since you Fired?
Post by: arebelspy on April 03, 2016, 02:07:47 AM
For those that are POST-FIRE, I was wondering if your net worth has grown since you starting drawing from it?

Only approaching one year in, but yes, it has.

Quote
Also, how what does it look like when you first pull the trigger?  Do you keep a years worth of expense $$ in the bank and replenish your bank account monthly with what you draw from investments?

We have cash flow from rentals, but for a more traditional WR, there are lots of withdrawal strategies.  Some favor several years in cash, some favor replenishing monthly, some favor a once/yr. withdrawal, etc.  Lots of blog posts and literature on this.


Quote
How common, do you think it is for your net worth to continue to grow after retiring early?

Very, very common.

The longer your ER, and more aggressive your investment strategy (i.e. more equities), the more likely it is.

For example, using cFIREsim default numbers (40k spend, 1MM portfolio for a 4% SWR, 75/25 allocation, 30 year retirement--95.69% success rate), out of 116 total 30-year periods, after 30 years:
In nominal dollars, 19 of them ended with less than the 1,000,000 you started with.  97 ended with more.
In real (inflation adjusted dollars), 41 ended with less, 75 ended with more.

So if you're just looking at straight dollar amounts (which most of us tend to do, we don't naturally, intuitively discount for inflation), about 84% of the time your portfolio would have risen (and, in real dollars, 65% of the time it would have risen).

That's with you spending down on it year after year, not earning another dollar, not adjusting your withdrawals down in bad years (down markets) or as you get older and spend less.

The majority of the time, portfolios go up if you're using a 4% WR and have a decent (> 33%) amount in equities, with us doing nothing (and we tend to do something if things start going wrong).

If my net worth wasn't growing (not every year, but over multi-year periods), I'd look at that as a caution sign to take a closer look.
Title: Re: Has your networth grown since you Fired?
Post by: Metric Mouse on April 06, 2016, 10:51:37 AM
For those that are POST-FIRE, I was wondering if your net worth has grown since you starting drawing from it?  Also, how what does it look like when you first pull the trigger?  Do you keep a years worth of expense $$ in the bank and replenish your bank account monthly with what you draw from investments?

How common, do you think it is for your net worth to continue to grow after retiring early?

Thx,
Lise

Net worth has grown. I kept some cash on the side, with quarterly withdrawls from the 'stache. All automated - much less time spent worrying about money and much more living life!
Title: Re: Has your networth grown since you Fired?
Post by: deborah on April 07, 2016, 03:42:13 AM
If you're frugal, it is difficult to spend everything, so you are STILL saving after retirement - or at least that's how it's worked for me
Title: Re: Has your networth grown since you Fired?
Post by: jim555 on April 07, 2016, 08:46:57 AM
17 months in and net worth is about the same.
Title: Re: Has your networth grown since you Fired?
Post by: gardenarian on April 22, 2016, 01:12:29 PM
Yes. I have a pension that covers expenses, and investments have grown. I also work part-time (by choice, for fun) and that helps too. I'm not so mustachian that I don't want to go to a movie once in a while.
Title: Re: Has your networth grown since you Fired?
Post by: astephens94 on April 26, 2016, 02:48:40 PM

Our plan is to keep about 1-2 years worth of expenses in cash earning 1%. In years the market is doing well, pull from investments. Years the market is doing poorly, we'll use that cash reserve to allow the investments a chance to recover and avoid drawing them down. In the event that there is a longer bear market than 1-2 years, we'll probably end up cutting all expenses to the bone (we have lots of fat to cut actually) and then get part time jobs as needed to ride it out.

You should check out Dr. Doom's blog (Living A FI) for his excellent drawdown series: http://livingafi.com/2014/05/09/drawdown-part-1-the-basics/
(or just read his whole blog - it's uniformly awesome)

Great idea - gives you maximum flexibility on things (ie - markets) out of your control
Title: Re: Has your networth grown since you Fired?
Post by: Metric Mouse on April 27, 2016, 03:51:49 AM
If you're frugal, it is difficult to spend everything, so you are STILL saving after retirement - or at least that's how it's worked for me

Yeah that 'Spend more than you make, worry about it later' switch doesn't really mash in frugal people...
Title: Re: Has your networth grown since you Fired?
Post by: Dicey on April 27, 2016, 07:39:03 AM
Purchasing another rental house , so reviewing financials right now. NW has definitely crept into the Ho-Lee Shit! category. Looks like our income in retirement will exceed that of our working years, including inflation. Mind boggling.
Title: Re: Has your networth grown since you Fired?
Post by: Mr. Green on April 27, 2016, 08:18:32 AM
If you're frugal, it is difficult to spend everything, so you are STILL saving after retirement - or at least that's how it's worked for me

Yeah that 'Spend more than you make, worry about it later' switch doesn't really mash in frugal people...
I can totally see this happening with me over the next couple years. I know I can spend X but there's still an ingrained behavioral pattern to try to spend less than X. It's like another safety net.
Title: Re: Has your networth grown since you Fired?
Post by: iris lily on April 27, 2016, 05:59:39 PM
The number is finalized for 2015: our net worth is down .00182. So, not a lot, but it will be down more in 2016.
Title: Re: Has your networth grown since you Fired?
Post by: Financial.Velociraptor on April 28, 2016, 05:08:23 PM
It's been up and down.  I'm up a little at the moment.
Title: Re: Has your networth grown since you Fired?
Post by: Metric Mouse on April 28, 2016, 06:15:14 PM
The number is finalized for 2015: our net worth is down .00182. So, not a lot, but it will be down more in 2016.

You get several decimal points more accurate than I do.  Hope 2016 goes even better than you imagine!
Title: Re: Has your networth grown since you Fired?
Post by: gman on April 29, 2016, 08:50:38 PM
Been FIREd a little over a year. Overall networth has gone down .96 % . We have pensions that easily cover all our expenses so have not had to drawn down the stash which is invested in all stock funds. Have some cash on the side that we have been slowly throwing into the market during the dips.
Title: Re: Has your networth grown since you Fired?
Post by: bigalsmith101 on April 30, 2016, 08:47:51 PM
Purchasing another rental house , so reviewing financials right now. NW has definitely crept into the Ho-Lee Shit! category. Looks like our income in retirement will exceed that of our working years, including inflation. Mind boggling.

This is similar to my parents situation. My dad retired at 55, and now at 62 has started drawing his social security dispersement which is equal to a 33% raise in disposable income. Of course, he also refuses to spend down any of his principal investments. Meanwhile the equity in his properties is increasing at about 25% greater than his annual expenses. Thus, if he lives to be 82, his net worth will quadruple within his retirement. Mom will outlive him another 10 years... You get the point.