My Path to Retirement

I recently stumbled upon an interesting blog, Millionaire Mommy Next Door.  She retired at 40--very impressive, huh?  She discusses financial issues surrounding the path to financial independence.  While I will also be a young retiree at 44, I feel I really can't, in good conscience, offer too much in the way of financial advice on this blog.

The truth is, I can't claim to have scrimped and saved to reach this goal.  Nor can I say I've given up much in the way of luxuries to achieve retirement.  I do not profess to be some sort of investing genius, nor have I made much in the way of hard choices along the way.  The way it happened for us is really, mostly, non-transferable.  (And no, I'm not a trust fund baby--that one would make my dad laugh out loud, I'm sure!)  Our path to retirement looked like this:

My job made it easy:

Seventeen years ago, I landed the job of my dreams.  I was excited to leave the world of public accounting for a new and interesting job in venture capital.  The environment was wonderful, my job was challenging in new ways, and the people I worked with were fun, interesting, and appreciative.  It also turned out to have a lot of up-side potential (which was not actually apparent until after I had already been there for five years).  As you can see, there's no advice I can really offer here except to say go get a job you really like and hope for the best . . .

My husband lost his job:

Obviously, this is not an approach I would recommend.  My husband worked for a dot-com which bombed and he found himself without a job.  The experience was a tough one and so he took some time off to decide what to do next.  What we then learned during that time was that we not only could live comfortably on just my income, it was how we wanted to continue living our life.  (The advantages of a stay-at-home husband are beyond the scope of this post, but you can imagine how easy my life is because of it!)  It was a forced way for us to find ways to live on less, which I guess is a good exercise for anyone considering retirement (if, like for us, retirement will provide for a fixed budget within which you must live).

We don't have kids:

Another obviously non-transferable method, either you want kids or you don't.  You can't really use this one as a retirement planning tool.  It's just something that wound up, indirectly, putting us at a financial advantage.  We didn't have the day-to-day expense of kids or the financial burden of saving for college (that money went to buy a vacation home--which will be sold to help finance retirement!)  But here, we didn't feel like we were giving up anything because neither of us ever wanted kids.  So, no take home message here either.

We saved all the gravy:

Which brings me back to my job and the upside I mentioned.  The only real advice I can offer that applies to most everyone is to sock away the gravy.  You know, the unexpected windfalls, bonuses, and other remuneration beyond regular salary.  Not everyone has gravy, so this may not be possible for everyone.  But I do observe that for many people, as there is more money available, more money gets spent.  I include myself to a certain extent here because I never was one to "save the raises" and continue living a lifestyle of the previous year's income.  But we did save the gravy.  Saving the raises is certainly also a good approach, but we opted to grow our lifestyle with each raise.  We've enjoyed many luxuries because of that.  If we had not done that, we would certainly have a bigger nest egg now, but everyone has to balance their own current level of enjoyment with their future goals.  Striking that balance is an art, not a science, and requires a different formula for each of us.

The big challenge now will be living within the new budget.  But that's a subject for a future post . . .

Comments

[Millionaire Mommy Next Door]

Hi! I found you through your link to my blog (thank you!). I love finding stories of early retirement - the choices one makes, the lifestyle choices, the thought process.

I just read all of your posts to date. Not only are you insightful, but you have a great writing style. I'd love to introduce you to my blog's readers. Would you be interested in submitting a guest post to publish on my blog, with a recommendation intro and a link to follow to your blog?

Maybe I missed it - but are you retired already or are you in the planning stages? (My reading was interrupted several times this morning...)

I look forward to following your life story - sewing or skydiving!?

[Retired Syd]

Millionaire Mommy:

Thanks again for your comments. Of course I would love to do a guest post on your blog. I've sent you an email directly about that one.

Thanks!

Sydney

[Lise]

Hi there - I discovered your blog thanks to MMND, and I wanted to just mention I've been following it eagerly. I'm currently 27 and I want to retire in my early 40s myself, so I find what you write inspirational.

I have the no kids thing down pat, and the socking away the gravy, but not so much with the job I love. Still trying to figure out what I want to do when I grow up ;)

Maybe you mention it somewhere else, but how exactly do you sock away the gravy? I'm curious to know what kind of investments are necessary for this goal.

[Retired Syd]

Lise:

Thanks for stopping by and letting me know you are there. Maybe I should do a post in the future about my investments, but I think I'm more lucky than smart, so hesitate to do that.

In those early years, I dollar-cost-averaged into index funds and bond funds (all at the low-cost leader Vanguard). In my retirement accounts I had a mishmash of actively managed funds somewhat randomly chosen by reading Money Magazine--in large, mid, and small cap funds, international funds, and a hand full of stocks I probably had no business investing in. Then I never questioned those decisions for the next 10 years. As luck would have it, I did ok (only on the funds, NOT the individual stocks)--maybe would have done better if I knew what I was doing.

Now I accept that I really don't know what I'm doing with regard to picking funds and have an investment advisor--so I do take a haircut of 1%. But the truth is he has forced us to diversify much more than I ever did (which is really protecting us right now).

Now that I'm retired, I'll have more time to pay attention, and perhaps will start managing things myself, but for now, I'll just say that I didn't get to be retired because I was so smart with investing, just really good about not frittering away "found" money--and it all added up.

[Linda]

Hi Syd,

I just started to read your blogs and they struck a core with me that no other blogs of the same subject had. I feel finally the truth about early retirement came out, i.e. they could be in all shapes and forms. I am tired of reading that one has to be extremely frugal during their working years(to the point of being crual to one self) to realize that dream. You had a balanced life pre-retirement and are enjoying retired life within your financial means by being flexible. To me, that's success!

I am 47 years old and I am constantly planning retirement with my husband. We started to be retirement minded at the age of 35 but never set an age to be retired. After leaving the Big 6 I co-owned a CPA practice with another woman for 11 years. Four years ago I sold the practice (my husband also quit his job) and went to China where we originally from to experience life there. Shortly we started working in China for 2+ years. I became an investment banker. We have traveled leisurely extensively during the last 3+ years, but still kept our eyes on our finances to achieve our retirement goal.

Your blog is real and insightful. Don't let anyone tell you that it is not, just because their own life experience does not reach that level.

Linda

[Retired Syd]

@Linda: Thanks so much for your nice comments and welcome! I love to hear of others that are going for it. Our backgrounds are very similar--maybe there's something about working for those Big 6 (or 4 or 8) that makes us want to work at getting out early!

[Engineer]

It is not surprising that you and your husband "made" your money in fields where no one actually makes anything. Enjoy your retirement while our society suffers the ridiculously ignorant (who also figured out they can "make" more making nothing except trips to the welfare line) pumping out kids as fast they can. You are symbol to me for all that is wrong with our generation. It is depressing that you don't really give a damn about future generations. Of course - at least you will be out of the gene pool.

[Retired Syd]

@Engineer: Do you really think that not wanting to have children means one doesn't give a damn about future generations? (To everyone else--do you see what we have to put up with--this kind of reaction is typical.)

[Engineer]

I don't care if you don't have kids but you should be scorned for your choice and for suggesting your choice is reasonable. That is how cultures maintain themselves. I'm not so much depressed by your individual choice as by the fact that I sense the culture I grew up in evaporating before my eyes when I hear those chearing you on.
You are the product of countless generations and you abandon your duty of procreation to your ancestors and culture. Why shouldn't you be ashamed?

[Retired Syd]

@Engineer: Oh my, aren't you just the nicest person! So glad you had kids!

[Engineer]

I am nice and to prove it consider yourself invited over for barbeque when in Georgia. Would love to debate you in person. You surely have plenty of time and money to visit. I promise I will make time.
You can do a writeup on my kids also once you meet them. I spank them when they do bad things, expect them to over-achieve, buy them clothes at goodwill and am their parent - NOT their friend. I'll be their friend when they start paying taxes. You can put in words what you see in them that you don't want in your life. That would be good reading also.
Alternatively if you don't vist - write your next article on how you can save money by putting your parents assets in your name before they get feeble and then sluff them off on the medicaid funded retirement home while you enjoy the fruits of their labor.
If you do we can ride around the countryside and look at all the houses paid for buy selling Grandpa's back 40. We may agree those people are short sighted selfish bastards - or not.

[Lynne]

Just found this blog and it is so interesting. I am a similar age, worked for 20 years and "retired" to a much less stressful position that works with young people. Note - the salary is also much, much less. My husband farms and has for years and even though I had the "big job" we have kept the family farm and nursed all 4 of our parents at home until they passed away. Did I mention we also have children? :) We have been very fortunate; but we have also made choices with how to spend or not spend our money and have worked very hard to find the appropriate balance for us. Everyone deserves their own choices about children, jobs, retirement and how to spend their money -- there are many different paths to a successful retirement (and a successful life) and I appreciate hearing other peoples stories and suggestions. Thank you for sharing your story and thoughts. Wishing you well in your retirement years!

[LifeSpirals]

I just found your blog and tried to link to millionaire mommy next door through your links and blogspot says it can't be found. Has it been taken down? I really appreciate your sharing of your lifestyle choices, then and now. Every in America has a right to pursue happiness as they define it. No one should be obligated to have children, for any reason, or called selfish for planning to take care of themselves. Look what it did to the Romanians. For the record I am a parent, by choice, and it is both the most difficult thing I have ever done and the most rewarding, and it does require ongoing personal sacrifices in many areas. All freely chosen with love and joy, but with full awareness of what is given up in cost and consequences. You are not taking away anything from anyone, so You Go, Girl!

[LifeSpirals]

Okay, I found the Millionaire Mommy blog that works, but everything is password protected. And no obvious directions for registering to get a password, just to subscribe to an email notification for new entries. I don't know how useful a link it is when a new visitor can't read anything, not even 'her story' or archives. Can you explain the value to our readers of a dead end link? Thanks in advance and I don't mean to sound snarky, just frustrated. I find your story inspiring and am looking for as much inspiration as I can find as I begin my own journey. I've never run into a recommended blog you can't read.

[Retired Syd]

@LifeSprials: Hmmm, I'm not sure the problem, when I click on the MMND link it works fine.