Early Retirement

Too Late to Retire Early?

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Over the last few weeks, I’ve been thinking a lot about early retirement. The major reason I blog about dividend investing is to keep me motivated and on track to retire early. But, over the last few weeks, I’ve been struggling with my plans and progress. So, since I keep this blog to talk about this stuff and flesh out my thoughts, here I go.

Here is a post I wrote about 5 years ago about why I wanted to retire early.  Funny, nothing has changed.  Good to know I’m consistent 😉

The Situation at Work

I have had a love / strongly dislike relationship with my work for awhile. I suspect everyone does, except for those lucky few unicorns that love their jobs and don’t consider going to work, work. Anyway, I’m not one of those guys. My work requires me to travel quite a bit. As with all things new, the travel was very exciting at first, but now that I’ve done it for over a decade, it has long last its magic.

My desire to retire early, other than to have full control over my time, is to spend more time with my family. *please excuse the whining* My child is growing up so quickly. I have missed a little over a YEAR of my kids life due to travel. That’s a bit more than a tenth of the piglet’s time on earth – because of work – that I have been gone and will never get back. Now, 10% might not sounds like a lot, but to me, it sure feels like a lot.

On the flip side, my job has also given me the opportunity to provide well for my family, travel and allowed me to save and invest for early retirement. I am extremely thankful for and appreciate my job.

But, here I am at almost 40 years old with a ten year old kid and wondering how much more time am I going to miss with my family over the next 5 years (45 is my forecasted FIRE age). I can guarantee I will be on the road at least 6 months cumulative over the next 5 years, several time zones away from my family during that time. The more I think about it, the longer 5 years seems!

After almost losing my wife to a complication during surgery last year, I’ve had a hard time justifying what I earn versus the time spent away. It’s been difficult to focus and my work productivity has diminished. While I’m not in jeopardy of losing my job, I feel terrible about not doing my best and being distracted.  I am not currently enjoying my work/life balance at the moment.

I suspect all of these thoughts could stem from me approaching middle age. That’s what happens, right? Maybe this is a weird phase that I will get over soon. I hope so.

My Current Early Retirement Plan

Until then, here are my thoughts. I realize I am one, big, hard decision from an entirely new life. I need to refocus at work and dedicate myself to trimming our budget.

Housing is the big variable. I could sell my house now and use the proceeds to purchase a more affordable home, for cash. This would reduce our monthly budget to roughly $3,000 a month. My FIRE number (amount of money invested that I will live off of) has always been 1.2M. This will produce almost 50k a year of growing dividend income.

Where I am Now

Adding up all my accounts and cash sitting on the sidelines, I have roughly 775k of investable assets. My dividend portfolio is currently producing almost 15k a year.

If I were to move all of my liquid assets into the market now, it could safely and easily yield 3.5% or 27k a year (average $2,260 a month). We also have a rental that will net us roughly 6k a year once the mortgage (about 40k left to go) is paid off.  So, we could have a little over 33k of passive income if we didn’t have the mortgage on the rental. That’s cutting it too close, I need a larger buffer.

I could take the 200k I have sitting in cash and invest it into higher yielding assets. Preferred stocks are an option, but I don’t have a lot of experience here, and this is a large step away from dividend growth investing. So, if I went this route I would choose a preferred ETF (diversification is key), $PFF is an option and is currently yielding a bit over 6%. That 200k would then produce 12k a year in dividends. That would bring the total income up to 32k from 27k (before the rental). That’s a step in the right direction, but still not close enough.

Work Longer

I am not in a place where I can retire just yet.  I need another few years of saving, investing and cost cutting before I can retire safely and comfortably.   While I don’t mind sacrificing now for later, I do hate that I’ll miss so much time with my family.

I don’t have a solution other then taking a less stressful and lower paying job.  That would push my early retirement date back considerably and most likely put me in a job where I wouldn’t be challenged or enjoy very much.  This is an option, just not a good one.  Like I said, I’m one big, really hard decision away from a new life.  Unfortunately, I’m not quite ready to make that decision just yet.

I would love to hear your thoughts and opinions on this.  What would you do in this situation?  Or what are you doing?  Would you quit your job, take a less stressful job and push your retire date back years?  Should I quit my moaning and just man-up?  Please let me know in the comments below.  I appreciate your feedback!

I'm a dividend growth investor who is aiming to retire early in 6 years at the age of 45. My goal is to live off the income my dividend portfolio and rental property produce exclusively and leave the corporate rat race. I hope you will join me in this journey!

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