Inspired by youngdividend's last post, this is mine as well. I'll keep the blog here in case I get hit by a truck and my wifenkids can use it to continue the trend. My son is especially into dividends.
I did it. Over a year ago, I was offered a severance check to leave my company. I applied for it, I got it, and dropped the check into dividends. Today, I am happy to report that retiring on dividends works (over a year, anyways).
Now, I am a cautious person, and due to many FIRE folks my age dealing with the "messy middle" of my kids, my wife took a job. This was mostly because she was having a hard time dealing with empty nest syndrome, but also as a cushion in case this dividend thing didn't work. Well it worked. She is working to "borrow" my daughter tuition, but this is short lived, as my daughter will graduate before the end of 2024. My daughter will then pay us back without interest, and we will use that for my son's education, which is for a less expensive school. Ok, so that part of the "messy middle" is taken care of.
Just switched from my COBRA to my wife's medical coverage, but she will probably have to quit in 3 months because we want to stay inside a certain tax bracket. Then we will move to a health-share we have used in the past (keep reading for a better scope on this). Next year, I want to use the buffer in the tax bracket to move stocks from my Traditional IRA to a Roth IRA. This year (and last), I am moving stocks from my taxable account to my Roth. I used dividends from my taxable account, and my traditional IRA in 2023 to pay bills and enjoy leisure activities. In 2024, I will also be pulling from my Roth and my wife's retirement accounts to increase income.
"But what about the 10% early withdrawal penalty?" Well, thanks to having a child in college, I avoid that penalty (for now). My son will help with that when he starts college and my daughter leaves. Once he leaves, I will probably lock up my traditional IRA with a 72t until I'm 59.5 to avoid the early withdrawal penalty. After that it will be all about converting the taxable into the Roth and avoid taxes as much as possible.
So, what did I do with the severance check? I bought some stinkers (MPW, MED, & WBA), but I also bought some (unexpected) winners: IBM(biggest gainer), UVV, OMF, UNB, VZ(shocker), & WMB. The rest have been fair to middlin' or more of what I have, and some are just me waiting for the rates to drop (ABR/AGNC/REITS). It is true that my best years were the Trump years, so I can expect the Biden years to not live up to it, but if Trump gets back in, the market will likely roar back. And even if that doesn't happen, lowering rates will do that as well. This is me being optimistic, of course.
I have my HSA dividends, and now my wife's HSA dividends helping with medical costs (and buying Excedrin and gel shoe inserts). I have both of our Roths, both of our Tradition IRAS, and the taxable account supplementing income. We are also toying with the idea to sell our home (which almost doubled in 5 years) when rates start to drop to take advantage of the profits, put them into dividends, and then travel/rent using that income. Our current state has insane inflation post-pandemic, and we need to take advantage of being flexible by going to countries (6 months) and states (6 months) where the dollar does best. And not accumulating material items - well that should keep us flush with cash. We've also been offered to stay rent-free at a snowbird's home, so if any "messy middle" life events happen, we could always sit there and accumulate, or just annoy my parents in a worst-case scenario. Our children will just be starting out, so we want to leave them alone, but that is the worst-worst-case scenario. I may be optimistic, but I am also cautious.
So, every day is Saturday for me. I am involved in my church, I attend a "retirement" club, and the guy running it is in his 90s, and did exactly what i did when he turned 50 and has been living off dividends. I don't think his was self-directed, but back then it was harder to do that. I am running two D&D games with my friends online (so I can do it anywhere), I belong to a walking group, a hiking group, a pub trivia group, and I fill in the rest with hot tub time, reading, crossword puzzles, and supporting my son in his interests. I travel with my son for his interests, and travel with my wife, leaving for weeks at a time. I have lunch every quarter with fellow dividend investors I used to work with and those we left behind who are also working on their "plan".
I am excited at achieving this, and I encourage others to find their way to this spot as well. Everyone's situation is different, and sometimes it is hard to make decisions when friends & family are involved, but you can always 1) get out of debt, 2) cover your bills with dividends, 3) have a plan if you ever get laid off, and 4) determine your retirement plan. Do the hard work now, then you can sleep well at night knowing your stocks are dropping coins into your piggy bank. Make your principle work for you, and even switch jobs to control your retirement funds (i.e. roll fidelity controlled 401k into a self-controlled IRA). A little discipline, some research, then kick back and enjoy the fruits of your labors. I am blessed, and God, my wife, and my kids get all the credit.
As youngdividend said, I won't be posting anymore because of doxing. Selling my home and going nomadic will help ensure my financial safety, along with umbrella insurance and a VPN. Time for the next phase...
