Retiring Early

Tuesday, August 29, 2006


Hate to say it, but I will be off the grid for the next week or so. If I manage to find a PC to post with, I'll add an update or two, but I won't be fully back in action for about a week.

Friday, August 25, 2006

Who am I and how did I get here?

Getting back to the point of the blog, I guess it makes sense to take a step back and spend some time discussing how I got to where I am today, then discussing my goals for the immediate and long term. And since I tend to read a lot about this topic, I'm sure I'll post about related topics that I find interesting, but generally in the direction of retirement, investing, personal finance, LBYM, or the like.

Let me start with my background and a quick summary on how I got to my current "retirement readiness" (ie. net worth).

I grew up in a middle class family with 5 children. I worked my way though public school and finally made my way to a Big-10 University, where I paid my way through the engineering program with a number of side jobs. In 1995, after college, I made $35,000/yr slaving away at a Big-6 (now Big-4) management consulting company. After only a few years and lots of travel (sound familiar to anyone?), I moved on to a high tech company, where I have worked for the past 9 years. I am reasonably well paid now and have had access to small amounts of profit sharing and stock options (although, these options have not contributed as much to my net worth as most people think.)

I am married with no kids, and no plans for kids. Both my wife and I drive used cars between 9 and 11 years old each. Cars and other depreciating assets are obviously are not important to us. (see book 2 below)

I purchased my first condo at age 23 for $67,000 and after 11 years and moving three more times, my current home that is worth over a half million dollars. I was lucky to have started early and rolled equity and appreciation into subsequent houses. I contemplated landlording a few times, and only wound up renting one condo for a year. Each other time, I decided that it wasn't the best option for me.

To be fair, I have also made a number of mistakes over the years. I've taken loans against my 401(k), I've had over $12,000 in credit card debt while living paycheck to paycheck, I've purchased overly expensive cars, I've not contributed to retirement accounts and I got caught up in the internet bubble and day trading (and lost money in both cases). I've learned a number of lessons -- all learned the hard way.

I was lucky to have mentors that helped show me the way. In particular, I was shown the way through books. Had someone tried to instill these lessons in me, I guarantee I would not have listened. The following three books that have had the largest impact on my current view of retirement, money, and investing:
  1. How to Retire Early and Live Well
  2. The Millionaire Next Door
  3. Smart Couples Finish Rich
Well, there you have it. This is a pretty good summary as of August 2006.

In subsequent posts, I'll dive down into certain parts of my past and dissect how I really got here. The most important points of discussion will be around those handful of decisions that I made over time that changed the course of my life forever. Some call these decisions "life inflection points". I believe the choices you make at these critical junctures can significantly impact your future successes and are worth understanding.

Thursday, August 24, 2006

Boston Gal's Open Wallet: Blogging for big bucks

Boston Gal's Open Wallet: Blogging for big bucks

Jane Dough makes an interesting comment about blogging: essentially do you do it for Love or Money? While money would be nice, it's not too practical for most of us. Her comment that blogging is all about the community -- leaving comments, recieving comments and having shared-interest dialogues is dead on. This is not my first foray into blogging, just a new blog on a topic that i spend a lot of time thinking and reading about.

Wednesday, August 23, 2006

401(k) enrollment now automatic!

In a great move, the government has finally enacted a law to allow companies automatically enroll employees into their retirement savings plans in an effort to boost retirement savings. Read the full article here.

Most people know that being in an employer sponsored retirement plan is a great way to ensure a suitable nest egg, especially when your employer matches some or all of the contributions. Although it's not a mandate for companies, this has the potential to get a lot more people in the fold.

Although I have been very active in a 401(k) plan for most of my career, I have made a few mistakes along the way. 1) Not contributing at all for periods at a time, 2) Moving from investment to investment trying to time the market, but ultimately losing money, and finally, 3) taking a "loan" out of my 401(k) to fund the down payment on a condo.

Some might say that 3rd one is questionable, but it probably would have been better had I saved for the downpayment instead of living a highly consumption-oriented bachelor lifestyle. To be fair, that was at age 23.

Tuesday, August 22, 2006

About this blog...

I am starting this blog to discuss all things related to becoming financially independent. I know there are a lot of blogs out there that discuss the topic of personal finance, investing and all aspects about retirement. While these are often times very related, my focus in this blog will be on how they relate to retiring early. By "Retiring Early", I don't mean moving south, booking endless tee times and wearing out the rocking chair. When I refer to retiring early, I mean leaving the hectic pace and politics of corporate America. It means finding a more simple existence, finding ways to be less consumption driven and figuring out how to do more with less.

In short, the goal is to become financially independent to allow for truly interesting, leisurely and rewarding pursuits at an early age. Life is short.