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Old 06-22-2019, 01:10 PM
 
Location: Forests of Maine
30,671 posts, read 49,423,020 times
Reputation: 19124

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Quote:
Originally Posted by adjusterjack View Post
Pay off your house.
Pay off your cars.
Pay off all your credit cards.
Keep zero debt forever.

Meantime, accumulate $1,000,000 in cash by the time you are 40 and you'll be able to retire.

That's the answer to any question about early retirement. Money. Lots of money in savings. Period.

Otherwise it doesn't happen.
I disagree.

When I was working, my Dw and I owned four homes. [one at each of four duty stations] Each of those homes was a multi-family-residence [Tri-plex, Four-plex, Five-plex property]. We had one apartment to live in ourselves, and we had 2 to 4 tenants who paid us rent that covered the mortgage, insurance, taxes, and maintenance.

So none of my salary income was needed for any of the monthly bills.

With my income, we made a monthly principal-only payment to buy down the outstanding mortgage notes.

The first time that we owned a single-family house was after I retired. We cashed out our apartment complexes and used that cash to buy our farm. [no mortgage].

We accumulated a huge Net Worth, but we have never had much cash savings. We have never invested in the stock market, no mutual funds.
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Old 06-22-2019, 01:13 PM
 
Location: Spring, Texas
136 posts, read 65,238 times
Reputation: 267
teaolive3

Other posters have given good advice.

Understand your expenses and what you will need in retirement.

Suggest you join the following Forums and read/study - and post questions in a format that will allow folks to give you very good feedback.

Early Retirement & Financial Independence Community

https://www.bogleheads.org/forum/index.php

i imagine once you read and study up, and most importantly are honest with yourselves about the numbers; you will find that you will need to work longer to reach your goals.
But it is good that you are asking the questions now at your age.
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Old 06-22-2019, 01:16 PM
 
11,425 posts, read 8,428,542 times
Reputation: 7079
DH retired at 52. He was able to do that due to his employer paying his health insurance forever. What paid for everything in 1992 now covers the employer provided Medicare Advantage. We have no deductibles and can see any Dr. we want.

Plan on the price of everything doubling every 10 years.

All that leisure time is expensive. Better have a heavy duty checkbook. As you age, the money requirements diminish. I'm thinking around 75. Our biggest expense after property taxes is baseball tickets and spring training. Our team moved to a more expensive place.

DH is ADHD. He finally got bored after 3 years and got some part time jobs.
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Old 06-23-2019, 10:50 AM
 
Location: Haiku
4,056 posts, read 2,568,125 times
Reputation: 5975
Quote:
Originally Posted by teaolive3 View Post
If you have been able to retire early what is the best advice you think someone would need? My husband and I would like to retire early and we know we need income each month coming since it will a while before we can claim social security or start cashing out our 401ks with no penalty. I am 36 and my husband is in his early forties. I would like to completely retire by the time Im 40. Thank you for any advice.
You need to research the heck out of your finances, spending habits, sources of income, and what you plan on doing for the next 40-50 years. There are many tools for modeling the finances. Bogleheads is probably one of the better (more knowledgeable) places to look. There is a very good spread sheet there that is very comprehensive about inflation, taxes and lots of other gotchas. One thing very different for early retirees is that the 40's and 50's are high-spend years since you are still young and will be more active. For many retirees pushing 70, we have slowed down and travel less and just do less.
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Old 06-23-2019, 11:07 AM
 
Location: Williamsburg, VA
3,551 posts, read 1,647,282 times
Reputation: 10162
Re: counting on rental properties, real estate investments, or owning vacation rentals as a way to subsidize retirement.


My one piece of advice here is to get all your advice from people in real life. Preferably people that you personally know, and preferably people who have actually retire and are having success following this plan. It's amazing how many people out there give lectures on how you can retire doing this, but you'll notice they haven't actually done it themselves.


Also, I hope you're aware that a lot of people on the internet who brag about their many investment properties are completely full of it. There is at least one on the city-data real estate forum who frequently has me rolling my eyes.



Now, if your relatives or friends who you know personally have done this, they're more likely to have valuable advice.


Best of luck with this, but to be honest I'm not sure it's a good idea. What do I know, though? If you decide to do it I hope you continue to post so we can follow your adventures, and see how it works out for you.
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Old 06-23-2019, 12:39 PM
 
Location: Scottsdale, AZ
7,596 posts, read 4,674,480 times
Reputation: 27796
Quote:
Originally Posted by Piney Creek View Post
Re: counting on rental properties, real estate investments, or owning vacation rentals as a way to subsidize retirement.

My one piece of advice here is to get all your advice from people in real life. Preferably people that you personally know, and preferably people who have actually retire and are having success following this plan. It's amazing how many people out there give lectures on how you can retire doing this, but you'll notice they haven't actually done it themselves.

Also, I hope you're aware that a lot of people on the internet who brag about their many investment properties are completely full of it. There is at least one on the city-data real estate forum who frequently has me rolling my eyes.

Now, if your relatives or friends who you know personally have done this, they're more likely to have valuable advice.

The OP's husband apparently has some experience managing rentals. He is not doing that now, however, and I don't think he owned all the rentals he managed.
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Old 06-23-2019, 01:20 PM
 
Location: Tennessee
23,541 posts, read 17,535,380 times
Reputation: 27576
Aside from some edge cases, this isn’t going to be achievable for the vast majority of folks.
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Old 06-23-2019, 01:24 PM
 
Location: Loudon, TN
5,767 posts, read 4,825,615 times
Reputation: 19387
Quote:
Originally Posted by Piney Creek View Post
Re: counting on rental properties, real estate investments, or owning vacation rentals as a way to subsidize retirement.


My one piece of advice here is to get all your advice from people in real life. Preferably people that you personally know, and preferably people who have actually retire and are having success following this plan. It's amazing how many people out there give lectures on how you can retire doing this, but you'll notice they haven't actually done it themselves.....

Yeah, they make their money selling folks that attend the lectures "education courses" on how to do it.

Many people lost their money by following the "passive income" lessons they learned from these folks. They bought cheap homes with borrowed money, and then when they couldn't keep long term renters (for whatever reason) they end up having to make mortgage payments themselves, and then when the RE market went down, they found themselves upside down, can't sell, and end up with foreclosures, short sales, etc.

On the other hand, many people make nice money owning several vacation rentals, but typically they buy one with cash, then use the profits to save and buy another, wash/rinse/repeat. This might take more than 4 years unless you have a big nest egg to get started. It's important to understand the overhead involved may include any or all of the following....

initial cost of home and furnishings/decor/linens/dishes/kitchenware/etc
property taxes
homeowners insurance
at least a million, preferably two mil, in umbrella insurance
water/sewer/trash
electricity/gas
cable
internet
cleaning after each rental (can be charged to renter) including washing all the bed linens and towels, sometimes multiple times per week if you get short 2-3 night rentals

yard maintenance
24 hour answering service/maintenance person
credit card fees
hotel taxes (passed on to renters, but must be accounted for and paid)
advertising (VRBO alone is $500/yr)
property management fees (from 20 to 40% of gross)
repairs and replacement of hvac/appliances/carpet/amusement amenities,like hot tub or video games, and damaged/stolen property on an ongoing basis

On a vacation rental property OWNED OUTRIGHT with no mortgage, overhead can easily equal 50% of the gross receipts.
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Old 06-23-2019, 02:05 PM
Status: "The nicest curve on a woman's body is her smile" (set 13 days ago)
 
Location: Florida/Tennessee
2,360 posts, read 4,302,446 times
Reputation: 1255
The math is the easy part. living' the dream... now that takes planning.
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Old 06-23-2019, 03:36 PM
 
Location: Williamsburg, VA
3,551 posts, read 1,647,282 times
Reputation: 10162
Quote:
Originally Posted by fluffythewondercat View Post
The OP's husband apparently has some experience managing rentals. He is not doing that now, however, and I don't think he owned all the rentals he managed.

That's a great start . Especially good for finding some good people to talk to who have been on the other side of it (owning the properties). We've owned multiple properties and acted as landlord and there's a reason we only did it for a short time; owning is not always as easy as you might think. But, with good guidance it's doable. Getting advice from people who have been successful at it would be very helpful if that's the road you wish to take.
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