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Our Early Retirement Plan: Where We Are Now (Part 1)

November 1, 2008 by Lazy Man 10 Comments

If you are just starting this, I suggest you start at The Introduction – Part 0

You can’t figure out where you are going if you don’t know where you are…

My wife and I are each 32 years old. To some degree our finances are separate – we never felt the need to combine them other than opening up a join savings account. I have around $200,000 in assets. My wife has about the same. My money is mostly in a retirement accounts (things like 401Ks, IRAs) and equity in my old home (now an investment property that just about breaks even). Her money is invested in much the same way, but more in mutual funds and money markets than equity (though she does have some equity in the property she had before she met me).

Our Current Income

  • My Wife’s Income – She’s a pharmacist working with the military. She gets a tax-free housing stipend, which for San Francisco is quite healthy.
  • My Wife’s Extras – She is required to travel from time for work. When she does travel she gets money for meals. Rather than a reimbursement system, they simply just give her the cash. If she’s frugal with her meals that extra money adds up. She also gets the standard 58.5 cents a mile for her driving. For 20 miles, they’ll pay her $11.70. Since that’s about a gallon a gas, it’s $8.70 to cover maintenance costs. I think we make out well with this.
  • My Income – I make some money from my websites. What I like about this income is that I can do it from anywhere that has an Internet connection. I can also write it at any time. For instance, by the time you read this, it’ll be at least a week since I’ve written it. In addition to this, the start-up business that me and my business partner have is making us each around $2,000 at this point. For a company that’s about 5 months old, we are quite happy with it.

Our Current Necessary Expenses

  • Home – We rent our current place. It currently doesn’t pay to own in our area. Rents are proportionally cheap. We spend $2075 a month on rent, which may sound like a lot, but it’s San Francisco. For the year that’s roughly $25,000.
  • Transportation – My wife and I each own our cars outright. My wife gets a free bus pass from her work. I work from home. This makes our gas expenditures extremely cheap. We still have to pay for maintenance and insurance. I would estimate that this is around $5,000 a year, and that might be on the high side.
  • Food – We save a lot of money shopping at military commissaries. I wish this were an option for everyone but it simply isn’t. I think we typically spend about $125 every two weeks. That rounds up to about $3,500 a year
  • Utilities – Our Internet and cable prices are pretty standard. We have intro deals with Comcast and save a little money that way. Our cell phone plans are around $40 each for almost everything Sprint has to offer. Our heat and electricity expenses are very minimal – the weather in Silicon Valley is fantastic requiring no air condition and very little heat. Our phone service is a $15 plan with Vonage. Adding all this up, it looks like it’s around $3,500 a year (again rounding up)
  • Insurance – We have standard insurance – home, rental. We don’t currently pay for any extra life insurance as we don’t have any dependents. However, our insurance company, USAA wins awards each year for it’s great rates and customer services. It’s another military benefit that I wish I could share with the rest of you. The cost for this is insurance is around $2,000 or less for the year. I have to admit that I don’t have the actual numbers on this and I’m too Lazy to look it up.
  • Additional Stuff – There’s always going to other costs to factor in. I’m probably forgetting more than a few things here already. I’ll build in another $6,000 for these miscellaneous things.

That’s a rough outlook. I intention didn’t want to get too bogged down in the details at this stage. It looks like we spend around $45,000 a year. Our income covers this and leaves us with enough money to build up significant savings.

Filed Under: Retirement Tagged With: investment property, necessary expenses, Retirement, savings account, start up business

Alternative Income Streams – October 2008

October 3, 2008 by Lazy Man 8 Comments

Another month is done and it’s time to take a look at my alternative income for the previous month. In past months, I’ve given a number that was very specific, down to the cents. This month, I can’t be as specific – the power cord on my laptop is broken, so I have to make a battery last a week, until the person from Ebay ships my replacement. (While I am happy to have saved around $40, I would have paid full price to get it faster – it simply wasn’t an option that I could see.)

So this past month, my websites and other dividend income (which is minor) netted me around $2100 in profits. I’m sure some will come and say that I should be quite happy with that number, but it hasn’t gone up in some time. Then again, I spent much of last month in Australia and Thailand, so I can hardly complain. The dollar per hour worked was actually quite high. Most months that would be the biggest piece of news…

This month, my business partner, had been selling the poo out the start-up business. Though I had the contact for the biggest client, the rest were all him and his contacts. I came back and found that he set our company up with a competitive recurring profit to my websites and dividends. I’m not quite sure how to classify the income though. It’s a little like a manager’s job, where you have to be around to make sure the excrement isn’t hitting the fan. However on most days, I’m just making sure that everything else is running smoothly, which is fairly passive. I suppose there’s the making of new sales as well.

I don’t know whether to consider to consider it alternative income based on the definition at that link or not. I’m pretty tempted to say that it is, because the amount I’m paid is not tied to how many hours I work. Let me know your thoughts (even if they are that I need to come up with new words for doody) in the comments.

Filed Under: Alternative Income Tagged With: australia, dividend income, ebay, start up business, thailand

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