Planning

I’ve been a bit lax in updating the blog, since so many things have been changing over the last month or so. What basically happened was that I went through the interview process with one of the big internet companies, and ended up getting a job offer.

So here I am in Seattle now, and my wife is back in Chicago working on selling the house. Just a few days ago I put down money on a new apartment, so we will be stretching ourselves very thin until the house is sold. However, in the long run I think this could be a good financial opportunity.

As with many tech companies, beyond my normal salary, I also received a stock bonus upon hire, and will theoretically receive one every year. My plan is for us to live off of the salary (contributing to 401k of course), and keep (or sell/invest) the stock bonuses for retirement. I figure that should give a decent boost to the retirement plan. My stock bonus upon hire was about 45% of my total salary, so if that continues I should be doing quite well in the savings arena. Once I put 15% in my 401k, I’ll end up saving over 50% of my salary, which is pretty good at my income level.

Our networth will change dramatically over the next few months I imagine. We will need to sell our home, my wife will need to quit her job and find a new one. So for awhile our networth will be damaged, but hopefully within a year or two we’ll have made up the damage and get moving upwards again.

So it will be an interesting next few years, we’ll see what happens.

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Planning towards our dream early retirement

Categories: Planning | August 27th, 2007 | by Dave | no comments

I am a bit of a sucker for websites that talk about “living your dream”, “seizing the day”, etc. Anything that provides a bit of inspiration towards our goals. On this site, there was a checklist of 22 secrets to discovering your dream. I thought I’d go through them here. I’m skipping some random ones where I didn’t have anything interesting to say.

What are your hobbies? - Well, it makes sense that our dream should match our hobbies. It would be silly if we loved gardening and then decided to go sailing on the ocean (likely one of the more difficult places to raise cucumbers). We both enjoy reading and writing. Lately we’ve gone on a couple of travel vacations (driving around the U.S. randomly) which we enjoyed quite a bit. These hobbies match a vagabond lifestyle pretty well.

Who do you like to work with? - I dislike working with people in a hierarchy. Of course this is something you deal with in almost any company. It’s simply a fact of “work life” that people who have a higher rank in the company feel that their opinion is worth more than yours. I think that getting out of the workplace would get rid of those type of people. I enjoy spending time with people who are not afraid to go against the mainstream. People who have quit their jobs, who work interesting jobs, who don’t eat meat, who sleep during the day and are awake at night.. I think these people are very interesting.

When have you been happiest? - In general, I’ve always enjoyed those times when I was free to do whatever I wanted. On vacation, when we’d have nothing planned, and had all our options open.

Try online tools. - I don’t really think an online test is going to tell me what my dream is. I know in general I’m an introvert (go personality tests!), so I’ll enjoy the alone time on the boat. I know my wife is an extrovert, so she’ll enjoy meeting new people. As with most activities, we’ll each have those things we enjoy, and those things we deal with.

Create a clear vision. - That’s exactly what this website is for. I have quite a lot of data and plans, and I’m putting them all in one place. As someone said (can’t find the original author), “Failing to plan is planning to fail”. I hope that having a strong vision of where we’re going will make it more likely to happen. Now I’m well aware that the plan itself isn’t what is important. Eisenhower said: “In preparing for battle I have always found that plans are useless, but planning is indispensable.” I think the key is that you’re planning, and moving in the right direction. The exact plan is very unlikely to happen, but you’re much more likely to end up in the right ballpark. For example, looking at our finances, I’m not positive we can retire before I hit 40. But looking at the possible scenarios, it’s almost guaranteed that we could retire before age 50, because of our planning.

Create a roadmap. - The website will contain the roadmap, as detailed as possible. We already have the financial milestones laid out. Now I’m working on how to make it more likely that we’ll hit our goals, and determine what obstacles may be in our path.

Do research. - This is certainly something I’m not skimping on. I’ve read a huge number of books on the sailing lifestyle, about the Appalachian trail, and personal finances. I’m hoping that my knowledge will enable us to overcome any difficulties down the road. I might even be able to help a few people along the way.

Get motivated. - I think this website is one of those motivation factors. I also read financial and sailing forums fairly often, to keep my mind on the right track. 10 years is a long time to keep focused, but I figure I’ve been on this train of thought for around 5 years so far, so it will probably stick.

Simplify: one purpose. - Focusing on a single goal is pretty important. I am currently focused on our finances. Making certain that our savings rate does not go down, and that we get a cushion in our monthly expenses vs income. This is the goal that will make the largest difference in the long run. We have 10 years to learn guitar, figure out what boat to buy, etc.

Use a mantra. - I really do want a mantra, mainly because it would be cool to have one. I had been thinking “do better” for a long time. Mainly because I have all these good ideas, but I tend to not follow them consistently. But “do better” is awfully negative, and I imagine a positive mantra would be better. Maybe “focus on goals”. I have goals, I just don’t have focus. That seems more positive. I’ll have to think on it.

Set aside time each day. - I haven’t gotten to setting aside time each day, but I try to take a small step each day. Making a post, updating finances, checking on networth progress, etc. Something where I can say that I made progress towards our goals. I’ve been able to keep this up for a few years, so I think it’s a bit of a habit by now.

Pretend you can’t fail. - I really believe in this one. The power of positive thinking. Plus, I think that our goals are all very reasonable. If I keep an eye on our finances, we can take measures to make sure we succeed. If we start spending too much in retirement, we can cut back. We can always learn to sail, as plenty of old stupid people sail. We can walk the Appalachian trail, as 80 year old people have done it, people with fake knees, etc. It’s all a matter of determination.

Live as you want to be remembered. - I think this is about what you want out of life. When I’m sitting around at age 80, I want to say that I took advantage of life. That I did things that many people only dream about. I want people to be amazed at how far we’ve gone, the things we’ve seen, what we accomplished.

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