Author Topic: First post - retiring from work at age 39  (Read 3950 times)

salesguy

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First post - retiring from work at age 39
« on: June 12, 2014, 10:49:50 AM »
Second post on MMM.  The "what FI feels like" thread drew me out.

I am officially done with work this week after being in a high stress sales role for 15 years.  I'm 39 years old, married (wife is 35) with one kid on the way. 

My situation is pretty secure, many folks here would want to punch me in the face for not leaving work sooner.  If I waited any longer my wife was going to punch me as well because work was literally killing me and affecting my health in serious ways. 

W2-income (that I just turned off):  $250 to $400k/year (depending on sales, etc)

Debt = Zero
Passive income = $110k/yr
Deferred income (from commercial real estate & carried interest) = $50 to $100k
Monthly expenses = $3k to $4k at the very most, last year was closer to $2k/month
Wife still works at ~ $40k/year with decent health insurance

So without my income we are earning about $160k/year with much of it tax-advantaged (depreciation on RE) and another $50 to $100k per year of deferred gains.  Should be saving at least $50k/year after taxes if not a good bit more. 

If we needed to I could cut out close to $1k/month in expenses by ditching the second car, reducing some lavish expenses like directv and full-price cell services, second car, etc.  But with our passive income I'm comfortable with the level of expense.

We invest primarily in real estate - commercial & residential including distressed debt, multifamily & development projects.  Some fixed income (trust deeds), small amount in stock market (wife's 401k) but mostly real estate.

Ok, that's my story and I look forward to contributing to the community!

BuzzardsBay

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Re: First post - retiring from work at age 39
« Reply #1 on: June 12, 2014, 10:51:56 AM »
You're my hero!

Cheddar Stacker

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Re: First post - retiring from work at age 39
« Reply #2 on: June 12, 2014, 11:07:19 AM »
Welcome to the forum.

Congrats on the badass accomplishments!

I'm sure it was hard to turn off that income stream, but you clearly don't need it anymore so good job. I'm sure you will be fine.

Enjoy the kid for a while, they grow up fast. You are fortunate to be free to enjoy it however you decide, and to have realized you've already accumulated enough.

AssetGrinder

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Re: First post - retiring from work at age 39
« Reply #3 on: June 12, 2014, 11:29:20 AM »
Welcome and Congrats. Very nice passive income stream. I am of similar age and family situation with 2 kids. I am financially independent right now as well but I worry about the future. I want to provide a full life for my children and also pay for a high quality education for them which means costly private schools.

Real estate is steady passive income but it requires maintenance and often unforeseen costs like repairs and at times periods of vacancy which eat up your returns. Also downside to having a 100% real estate portfolio is liquidity. I too was whole invested into real estate at one time and I came across several liquidity issues. It strapped me from other lucrative investments I could have made at times. I think some short term bonds and and an increased equity portfolio will provide you with some more liquidity and diversification cutting down your risk of having all your eggs in one basket.

Overall you are in 99% better shape than most and your savings and reinvestment yearly portion is huge. You are going to snowball that amount to crazy levels.

salesguy

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Re: First post - retiring from work at age 39
« Reply #4 on: June 12, 2014, 11:46:21 AM »
Thanks!

I do also worry a little about providing a great life for our kid(s) but I don't think it needs to cost a fortune as many would agree here.  I do think that being around much of the time and not being stressed out is a huge advantage, more so than any expenditure could replicate.

I agree that residential real estate can be a real hassle.  We haven't owned residential rentals for about 10 years.  We moved into commercial multifamily which have had a much better IRR and is 100% passive - professionals do the onsite property management.  In the right markets with a great onsite property manager I don't think you can come remotely close to the same IRR with residential. 

As for liquidity I completely agree.  One thing I did was increase all our credit cards and LOCs before I quit work, and did so with full documentation and balance sheet statements.  We could live off credit cards and LOCs for a long time, probably years. 

Johnny Aloha

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Re: First post - retiring from work at age 39
« Reply #5 on: June 12, 2014, 04:44:09 PM »
Wow, congrats!  Now get ready for the hard part: being a parent!!  Just kidding, the first few months are challenging but then it gets to be a blast.

Numbers Man

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Re: First post - retiring from work at age 39
« Reply #6 on: June 12, 2014, 04:56:25 PM »
Congratulations salesguy - I could never figure out why folks earning over $250k for ten or more years were still working in their fifties and sixties.

salesguy

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Re: First post - retiring from work at age 39
« Reply #7 on: June 12, 2014, 05:00:40 PM »
Thanks guys, I really do love it around here.

I talked to a guy the other day, without being too specific, who made almost 7 figures per year (w2) yet had a net worth well less than mine.  I almost choked on my beverage in disgust.  It really doesn't matter how much you make, you an outspend it.

Dr. Doom

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Re: First post - retiring from work at age 39
« Reply #8 on: June 13, 2014, 11:17:52 AM »
Big congratulations.  Your numbers look very healthy and I have virtually no doubt that you'll be fine financially.   

I'm always very interested to hear how high-powered people who have dedicated themselves to a career for, say, 20 years, adjust to suddenly not working.  If you have any time in the future I would absolutely love to read some details about how things are going. 

Best of luck with everything!