JSnyder wrote: ↑
Fri Dec 01, 2017 8:18 am
I am reluctant to share my financial information. But without letting you know my situation I do not think I can receive good advice.
Please let me know your thoughts and any or all of what I write below. Thanks in advance.
Today I met my first threshold. 4 million. I celebrated this by changing all dividends and cap gains of my vanguard funds to Vanguard's short term corporate bond index (VTCLX)
I have two thresholds. 4 million of 5 million. At 4 million with a 4% withdrawal rate that is 160K a year. Even if the stock market goes down 50% to 2 million, with a 4% withdrawal rate that is 80K.
Actually I am probably at the 5 million. I expect to inherit $1 million. My parents are mid 80s. But I do not like to think about this as I do not want them to die and counting on inheritance seems a little morbid to me.
At 5 million with a 4% withdrawal rate we are at 200K and if the market tanked by 50% at 2.5 million we are at 100K.
I figure I need 100K a year to live the type of lifestyle I want to live.
I am 49 years old. My wife is 54. One kid is 19 and at the local jr college. The other is 16. They will also go to the local jr college. I figure I will need 50K a year for their jr and senior years of college. Basically I am budgeting 200K for their education.
My other costs, I live in a house that I consider to large. It is 3,400 square feet. Once my kids go to college, my wife has already agreed to live in a smaller place. I also want to move at that time because I live in a high tax area where the economy is not so good. My monthly mortgage, insurance, taxes is $4,250. Real estate taxes alone are over 16K.
I drive a toyota with 160K plus miles and my wife drive's a honda with 100K plus miles. I am not really into cars. I hope to keep my vehicle until my youngest goes to college (2.5-4.5 years from now).
I guess I am getting to the point where I could retire but I have no interest in this. Nor would I want my wife to retire. I l have a corporate job and I like it well enough. I have decided that I am not very good at not being busy. I tell myself I plan to work until I am 70 unless I am disabled. I have read studies that show those who work live longer.
I volunteer at my church which is important to me, but I have no interest in spending my time volunteering all day. I guess I feel that at work, what I do matters.
I do not have much interest in traveling. Flying scares me. I have visited 42 of the 50 states in the U.S. I plan to see them all over time. But in terms of flying to some exotic location as an early retiree, I am not really interested.
I am pretty boring. I am not into cars, I eat simple, outside of U.S. travel I don't like flying. I joke that my hobby is fixing things around the house. I am pretty handy. But that is about it.
I have about 100K in cash. 150K in vanguard short-term bond. 300K in vanguard total bond index. The rest is in U.S. stocks.
I have 84.3% in stocks, 11% in bonds, and 2.5% in short term reserves. Over time I want to change this mix to 80% stocks, 15% bond, 5% shot term reserves.
I am pretty 86% in U.S. stocks, 71% of which are large cap. I am not really interested in international stocks. I figure I get international exposure through my large caps. Over time I would like to increase my mid cap %. I am not really interested in small cap.
I am overweight on health care. it is 30.1% of my portfolio. I have a large holding of vanguard healthcare index. Yet I am comfortable with this. I think the advances in healthcare over the next 20 years will be impressive.
I guess I am literally the millionaire next door. I never really set out for this. I always lived below my means and saved. It is the stock market which has made me rich. I thank God and I feel blessed every day.
As I said above I am not really interested in spending a lot or having a lavish lifestyle. In face I want to work. I am in a field that is at risk of being outsource. I may end up doing something else. But I would like to work.
One upcoming expense I might have is that my son is interested in being an entrepreneur. He is a sophomore in college so this may change. But if it does not I would like to provide him with 100K in seed money to start a company. I would just write this amount off. If he makes it great. If he doesn't it would be a good learning experience. I am close to my son and I would actually like to start a business with him. Though families and business do not necessarily mix well.
If you read this far, I want to thank you! Sorry if I have been wandering all over the place on my topic.
One of the biggest risks we have as humans is not knowing what we don't know. We have a bias based on our existing knowledge. So, what I am missing? Thank you in advance.