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At the age of 35, I decided to retire by the time I
reached 50. I got there two years early.
It was actually when I first came out of college that I got the idea to
retire early. I was unsure of when it would actually materialize, but I
knew it was what I wanted to do. By the age of 35, I was an Electronics
Engineer, living in southern California. I was working in Technical
Sales Support for a small software company, earning about $75,000, and I
decided to go for it. "Let's shoot for 50" I said to my wife Brenda, who
agreed it was an achievable goal. We always bounce any major decisions
off each other, from purchases to anything that would affect our lives.
First we made the difficult decision not to have children. We estimated
that we could trim about $250,000 out of our living expenses over the
next 15 years. Then we started by saving all of Brenda's salary, who was
earning about $45,000 at the time. Brenda was a Project Coordinator with
a company that made severe service valves for the nuclear power
industry. When we made any bonuses, they always went to pay down our
$200,000 mortgage or to bolster our retirement nest egg. At the time we
figured we'd need at least $500,000 net worth to retire comfortable and
live off the interest and investment returns. That changed over the
years and we estimated we really needed between 1 and 2 million. We also
maximized our company 401k savings plans and in addition I saved on
average about 15% of my after tax income and put it into a variety of
investments. I was a very modest investor and did not risk too much in
stocks. We probably only really invested 30 to 40 percent of our nest
egg in stocks, the rest was in fixed income and money market accounts.
Since I traveled a lot with work, I put all of my expenses on my
personal credit card, then paid it off with our personal funds. Why let
the company get the good credit rating and all those air miles. Then
when I was reimbursed by the company, I saved as much as was practical.
Our policy was to have $100 in our checking account at the end of each
month after all the bills were paid. Anything over that went into our
retirement bucket. We only ever had to dip into our savings to pay large
bills such as insurance, house taxes and large purchases. As our
salaries increased we continued to contribute towards our nest egg
accordingly.
As we closed in on retirement we became more
diligent about our goal. We switched from banks to credit unions, which
offer much higher interest rates for deposits and much lower for loans.
When we both finally retired, we sold our home and all the items that we
could live without or easily replace. Most of the selling was done
courtesy of eBay. I retired in 2002 at the age of 48, seven years
younger than my father was when he retired. My wife Brenda retired when
we sold the house in 2003. Then we went off on a 2 year sailing
adventure in the Caribbean, which is also documented in the "Cruising
The Caribbean" section of this web site.
Our new mantra is "Preserve Your Capital".
Currently we are renting in St. Augustine, Florida instead of owning. We
may buy later when the real estate bubble finally bursts or a least
levels off a little. We buy catastrophic health coverage and drive our
trusty old '88 Ford Bronco II XLT, which is the only car we did not sell
when we left California. I do not buy suits any more, to tell the truth,
I'm in shorts and T-shirt most of the time. I had to dress up for the
photo in Money Magazine.
Now all this sounds as if we were really frugal
all our life after our early retirement decision in 1990. Well along the
way we managed to have new cars every 3 years, even the odd toy car such
as the Lotus Esprit TT (also featured on this web site) and a Ferrari
328 GTS, not to mention the Acura Legend, Lexus 400 and Audi S4 TT.
"How did they manage it, living in expensive
Southern California?" You may ask. Well that is a story for another
section in the Retirement Pages of this site.
The Retire Before 50 Home Page
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