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An Investigation Into the 10 Year Retirement Plan

An Investigation Into the 10 Year Retirement Plan

I've gotten to the age where I think I should start planning my retirement.  But I don't want to retire at 65, no.  I'm only been in the rat race for a few years and I already want to get the hell out.  I have a sign hung above my desk at work. "A target that doesn't exist can't be hit."  I don't know if I had heard that somewhere along the course of my life or came up with it on my own, but its profound to me so I try to look at it every day.  It sounds like a lame management motivational poster.  Some people do cocaine, I put up dumb posters on my wall.  We all have our vices.  So in order to hit my target, I have to create it.  How can I expect to retire in 10 years?  Well, it starts by figuring out how little I can live on if I were to retire.  I think being a hermit and never communicating with anyone or going anywhere I could pretty easily get by on 10K a year, as most of us could.  That figure also doesn't include a family. But I don't want to live like that.  I think 30K a year would be reasonable for me to do all the things I want to do without working, and support a family.

1.) I need to be debt free.  This includes mortgages from the home that I will eventually live in, as well as rental properties.  It would be reasonable for me to place an average value of 250,000 on any of the 3 properties I intend to have, which would be two rental properties and the home I live in.  We're already up to 750,000 in real estate alone.  Those rental properties should be able to produce about 1200 per month (speaking in today's dollars), and leaving a liberal 30% for repairs and renovations each year (perhaps an underestimate if you are an experienced homeowner) puts me at an income of 17,280 on rentals alone.  Hot dog!  I only need to make another 13K to live what I would consider comfortably!

2.) Have a diverse investment profile in more than just real estate.  We're deep in a bull market right now, and I don't want to ankle bite, but it will go down eventually.  Perhaps really hard.  As I would personally predict that has a 99% certainty of happening in the next 10 years, it will present a huge opportunity for people that have a lot of liquid assets when the crash happens.  I wouldn't want to deter anyone from investing, but if you're reading our finance blog you're probably more educated than to pull all your chips out on a prediction from one guy.  Having a healthy quantity of cash invested in the stock market would provide the necessary passive income required to fill the remaining 13,000 void.  Depending on market conditions that could be as little as about 150,000 or as much as 400,000, and of course you always have the probability of losing money in the market.  In the last year, the DJIA has averaged over 10%, but we can't know for sure if that trend will continue.  Since there is really nothing to do but speculate there isn't much point in this-or-that type scenario.  Since I can live on 10K, I can adjust my habits up or down depending on YOY market performance.

Now I'm the type of person who gets exceedingly bored and depressed when I'm not busy, so I will no doubt be doing some kind of work.  It might even be for someone else, but it will likely be on my own schedule and rates that I deem worthy.  When I'm not doing work for other people I will likely be designing and building products, learning about business, and getting endeavors off of the ground.  It's interesting to me that the real quest of building wealth (I'm talking millions, now) comes after I plan to retire.  I really don't see a way of getting rich working for someone else.  I'd either have to be some kind of over-compensated genius, or get extremely lucky in landing a high paying job that I can keep for a long time.

Back to the topic at hand, retiring in 10 years means being strategic and involved in my finances at all times.  It means striking in real estate when the iron is hot (which is NOW, in my opinion), and saving and investing in markets.  Having three mortgages paid off in 10 years is going to require me to put cash on top of rental tenant income, perhaps double or triple the mortgage for each place.  If I can obtain my second rental property in the next year, and the 3rd one in 3-4 years, I think that is a lofty goal, but attainable, to be staged for payoff in 10 years.

What is your 10 year retirement plan?  Have you considered what it would take, or have you been conditioned by society that you can't retire until you're old and gray, lacking energy to do the things you worked so long to be able to do freely?

Expand your horizons, realize that in this bountiful land of opportunity we call America, that it is possible.

How much does it cost to get shredded? We tell you right here

How much does it cost to get shredded? We tell you right here

Prioritization in a Storm

Prioritization in a Storm