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Our Early Retirement Plan: My Personal Income (Part 2)

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If you are just starting this, I suggest you start at The Introduction - Part 0. Alternatively, you can jump to Our Early Retirement Plan: Where We Are Now (Part 1).

My income and my wife's income are dramatically different from most people. I don't have a 9-5 job. Yesterday I mentioned how I make money from websites and from a small business.


I run a few websites, but the one you are reading is by far my most successful. While I've put numerous hours into it, it's starting to pay off well. In fact, the websites scale quite well. While it takes me awhile to get the websites going and producing income, but once they do, they can work without much time or effort on my part. Of course if I want them to continue to grow, I have to put significant effort in. However at some point, I might just say, I'll spend a day and write a weeks worth of content and then vacation for the rest of the week.

The small business that I work on with my partner is a service. We do some work in acquiring clients as well as some start-up. However, once things get going, there's very little day-to-day work with providing this service. We are keeping the business in stealth mode for now, so I'm not at liberty to discuss the details. Sorry.

It's hard to believe that I could have these businesses 33 years from now. I've been at each of them for a very short time now. However, if these incomes were to last until then, I could live an essentially "retired" lifestyle. In fact, in my weird definition of retirement these two businesses are almost an ideal fit. I would have a sense of accomplishment, but still the freedom to travel and conduct my business from anywhere... or I could outsource these businesses to others and keep large percentage of the profits for myself.

Some may ask what they can do to duplicate the businesses I have. Sometimes it's simply a matter of keeping your ears open for money making opportunities. I wish I could say that I planned these business from scratch. However, I accidentally fell into both businesses. In addition, network and surround yourself with smart people.

Retirement Nest Egg

In addition to those businesses, I have $125,000 in retirement accounts invested in stocks. If I were able to invest this money and make an 8% return, it's possible to make 5% after inflation. Compounding this money for 33 years would seem to produce a potential $625,000 nest egg. I would need to pay taxes on some of this money (it's a mix of Roth IRAs and 401Ks), but perhaps I'd still have $500,000 in equivalent to today's dollars (since I factored in inflation). Experts estimate that you can withdraw 4% of that nest egg in retirement without impacting the nest egg itself. This would be $20,000 a year.

In addition to this, if my businesses take off, I can shelter some of the income in self-employed retirement accounts. I might even be able to put as much as $40,000 in a SEP-IRA. In addition, my tax attorney is saving me a lot of money by pointing out how many things are now a deduction with these businesses. These two extra tools will also help.

Rental Property

I mentioned in part 1 that I have a rental property. It's currently worth less than I pay for it. I barely make back my expenses on it at this point. However, in 30 years it will be paid off and any income that it earns after that be a nice supplemental income.


It's difficult to impossible to estimate what the businesses will make so far in the future. However, my websites currently make around $40,000 a year. My other business makes around $24,000 a year at this moment. Add in the $20,000 cash flow from the nest egg and it looks like I have a decent chance of having $84,000 when I retire. And while I don't count on social security, it would be a solid bonus. I could definitely sustain myself on $84,000 a year. In some areas of the country, both my wife and I could live off that money.

Last updated on November 1, 2008.

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4 Responses to “Our Early Retirement Plan: My Personal Income (Part 2)”

  1. kiwibloger says:

    Sounds like a good plan. Especially I like the idea of web page income. It gets you same money (quite decent amount I hope) even when you sleep. Well done!

  2. Start-Up says:

    Very interesting series, as I would not mind retiring early as well. One question regarding your self-employed retirement account. Why are you using a SEP-IRA instead of a solo 401k? I currently have tutoring income that is self-employed and am looking into my retirement account options. I am under the impression that solo 401ks allow you to put more money away. I linked my website with solo 401k information to my name above. What are your thoughts?

  3. Lazy Man says:

    I’m not using a SEP-IRA yet. I use too much of my money to live on for now while I grow my businesses. I have to look into all the options out there, but the SEP-IRA was an example off the top of my head of one type of retirement vehicle for the self-employed.

  4. marci says:

    Yes – I would think one could make it just fine on $84,000 LOL! For me, that would be a fortune!

    I do fine on under $20,000/yr. I am actually looking forward to a financial retirement, as all my stuff together will about double that figure! I won’t know what to do with that kind of money – except reinvest it …again!

    I’m set for retirement, but still work 30 hrs wk/for the free health insurance, cell phone, gas, matching 401K,and some other freebies.
    But this job is like being mentally retired already. Nice flexible hours, plenty of free time, internet at work no problem…. I just need to show up, keep the doors open, answer the phone, and do a minimum of paperwork. The rest of the time at work is mine to do as I please …. and only 10 minutes from home. Who wouldn’t like such a job :)

    Until I find a low cost health insurance plan, for the ‘just in case’ factor, I’ll probably continue in this quasi-job that I really enjoy ‘not’ working :)

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