Hi Mac, Great idea for a thread. I've been essentially "retired" since 1986. I was at a point where it appeared I could continue to make more money from investing than I was with my job. My job, however, took all my time.
It was with significant energy and enthusiasm that I embraced not taking a pay check. It allowed me the time to do better research into those investments I did want. Also, as you mentioned, it gave me incentive to create a plan by which I could live reasonably well and be somewhat secure that my investment model.
I started with what I call my "tight belt" income needs. I summed all the expenses I'd have annually and chose that, plus a cushion, as the base requirement. Did I have enough total principle to generate that amount of income and still have some left over for growth? For "growth" I'm mostly interested in beating inflation over very long periods of time, on average. The analysis showed that I did, in deed, have the required capital if properly deployed.
While living the "tight belt" life style wasn't what I, or my family wanted, I figured that most years I'd do enough better than that so we wouldn't feel pinched. The part of the portfolio that I designated for "growth" could also generate some income if I chose investments well.
I've had many hobbies over the years. Most have been pocket drainers. Only investing has been a pocket liner! So, it went from avocation to vocation about 18 years ago. So far, so good!
You'll do fine. Just make sure that you're not in a giant hurry to "get rich" or some such. It's best to take two steps forward and only occasionally any steps back in retirement. Giant leaps forward sometimes lead to skinned knees in investing.
Best regards, Tom |
