Occupation: I do R&D for a tech company that is almost as paranoid about social media as I am, so that's all I can say.
Age: Early 40s
Goal: Enough to retire in 7-10 years.
Favorite company: Glatfelter (GLT)
Favorite pet? cat-eating dogs
I must first point out, that my blog is a shameless copy of www.youngdividend.com - I suggest you check it out first. The kid has goals I wish I did when I was his age. However, I did get all of the family/house/career satisfaction stuff out of the way starting at his age. I am hoping that a 60-something Baby Boomer will create an "Old Dividend" blog for the late starters.
My investing began in 1996 when I was relocated to work for a tech company straight out of school. They had a phenomenal SPP I couldn't ignore. However, the stock was too successful, it spoiled me. When the tech bubble burst, it was disappointing - but I still came out ahead selling it as it rose and split repeatedly for the next 4 years. I don't abide with keeping your eggs all in one basket, i.e. your employer goes bankrupt and you lose your job, meanwhile their stock goes down. I couldn't contribute too much, as it was a percent of my salary, but it was great for a young single guy. I had a school loan, 60% of which had been paid for by an inheritance. I had a new car loan - my parents weren't wise enough to teach me about depreciating assets, but that I should "buy a new car, you have a good job". I bought a house as an investment in 1998, so I had a mortgage. Not a bad start, but could have been better if I had guidance.
I was married in early 2000. Sold the house with a small profit and bought a newly built home in 2001. I bought some airline stock post-911, assuming "it had to bounce back", and it did. Sold it to furnish my new daughter's bedroom in our newly built house, which brought back some confidence in the stock market. I then thought I could "play the market" in my spare time. I learned some hard lessons with amounts of money that doesn't seem like a large amount now, but it was at the time to a young couple starting out. Nevertheless, it was an amount I could afford to lose, and I still was in the black overall during my time in the market.
I had invested in some stocks and bonds of companies and funds that "I believed in". They sat around flat for years, and worse yet, they had no dividends to speak of. Meanwhile raising 2.5 kids with my lovely, wonderful wife, I implemented an ROI strategy with life. Not just financial, but emotional, academic, spiritual, etc. We dropped cable for streaming about 10 years ago, and am now spoiled by no commercials. Started researching becoming savvy about cars and buying "disposable" cars on craigslist for about 2-4k. My wife is a splendid cook, so eating out was more or less eliminated. I spend about 90 hours a year planning our travel itinerary for our annual trip so I get some good deals (I enjoy researching things). Didn't buy anything unless I could justify getting its worth, and got rid of anything I didn't use for 6 months (ok, except for the Christmas Tree). The result? Completely debt-free by age 37.
I am not poor, the U.S. government would consider me upper/middle class, but I am also not a miser. I am a minimalist by nature (shout out to Thoreau!) and assessed everything in life for its Return on Investment.
I had been slowly ramping up my 401k contributions to the max starting from my first year of employment. Then a few years ago, I stopped.
I did the math. Men in my family don't live very long, and due to a birth defect I had learned of in late 2013, I could safely bet I won't see the 401k money or social security. I'm not a fatalist, just a realist. Spoke with my wife and I made sure she understood that this would be her nest egg, and it is shaping up to be a very nice one. So now I have this extra income coming to me instead of into my 401k, and I needed a place to put it. For the above reasons, I wasn't too keen on the "65 year old" income strategies. I became determined to retire early to enjoy my retired life, assuming it could be short, so now I needed to figure out how to obtain some income until the other stuff kicks in. My situation is a little unique, being against the clock, but for anyone interested in retiring early, this might be beneficial.
Considerations on the table for income post-retirement investment were/are: Buying property (a Bed & Breakfast seemed a good idea), precious metals, having my wife work (I had her quit her job early in our relationship, and she has no issues "taking over" for a modest income), or the stock market. I did research on them all, and we decided that the best idea would be the market in the current economic and political environment.
Why? Well, after some research (In fact, I found Young Dividend during my research), the best way to handle the market would be dividend stock investments, with dividend reinvestment. That way, we could have some income from dividends at the other end, our assets would be more diversified than it would be tied up in some property, and assuming we never sell the investment, I now have a nice little nest egg to pass on to my children. The dream is they continue the investment strategy and live off the dividends at some point - my son has already invested in a dividend stock - maybe he will start a blog titled "Little Dividend".
I have yet to receive a windfall after the small inheritance which was specifically to go towards my school loan, and I do not expect one - our parents grew up poor. I do have no issue borrowing heavily against my 401k, and I seriously considered taking out ALL of it at a penalty & taxes since I probably won't see it, so I'm a bit cavalier about it. I will be borrowing part of the initial 20k from the 401k, and I can explain some strategies with this later. The rest is just what I've accumulated the past few months while waiting for a place to put it.
So here I go! Initially, I will most likely be relying heavily on Young Dividend's starting strategy (20k initial) with some minor changes due to my current position (more initial diversification, reassessment of the market today vs. 2 years ago). I daily keep one eye on www.drudgereport.com for quick changes in a particular market due to "news". My goal is to generate enough income via dividends to retire, and I will be aiming for 7-10 years from now as the jumping off point. It may be small so I would have to retire to central America with the income, but I have no issue with that - I might do that anyway. This isn't an experiment out of greed, but work-free income. If I was greedy, I'd work until my company got rid of me AND invest everything, and probably day-trade.
I hope this may be of some benefit to someone. Follow me on my journey to retirement!
Disclaimer: This site and the site owner will not be held liable for any financial damages that may occur to the reader. All readers should exercise due diligence before purchasing equities. Information and opinions posted on this site are of my own and it is up to the reader to guarantee the accuracy of all claims. I am not paid or sponsored by any organization to post material on this website. I am not a financial advisor. I am merely an engineer who publishes what he is doing with his personal finances.
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