November 8, 2007

Newly Retired

At a first glance, you might think my blog about (extremely) early retirement is about a lazy guy trying to find a loophole in the system so he can keep on being lazy. I assure you, that is not the case. To explain, I will give my readers a little background on how this came to be.

I'm 24 years old and I am retired. I didn't invent a new search algorithm or create a new video game and I didn't inherit anything. In fact, I'm kind of poor. I just decided that there is no point in working. My history would show that I led a very standard life for a privileged middle-class American. I studied hard, got good grades, and went to college and got an Engineering degree. I found my first job and I hated it but I got work experience under my belt. I found my second job and it was great...for a job. I was doing a little bit of sales, marketing, sales engineering, finance, and many other business mumbo jumbo. I did very well and saved a little bit of money and I left the company. And here I am, ready to move on to the next phase of my life.

Currently, I reside in San Francisco, I reluctantly have an iphone, and I like to go to nice places to eat on weekends. I like playing basketball, playing music, traveling, and other mid-20s-young-singles stuff. You might think that with little-to-no income coming in, this lifestyle would start draining my savings. The goal is to try to make it so that it won't. During my time of studying hard, working hard, and sleeping little, I learned a lot about making wise financial decisions. I believe that with a small but strong set of assets, a network of people, and just being smart with money, I can pull this off.

So the first step towards making this retirement work is to see what I have. My money is in a diverse portfolio spread across many different investments or holdings. I was able to make a Google Doc to keep track of all my money and it seems that I saved up 70k. I paid off all my student loans and I don't have any other large payments to take care of. That means I have 70,000$ to play with for whatever I need to do to make this work.

The next step is to find out how much money I need and this part was highly entertaining. If I'm going to retire miserably, I might as well keep working miserably and get money. So I did not cut expenses. I want to live my life the way I would if I was working, except without the working part. To quickly sum up the math (no pun intended), lets say my rent will cost me 1000/month, cell phone bill will cost 60/month, other bills will cost 100/month, food will cost 200/month, and other unforeseen luxuries or emergencies will cost 50/month. That comes out to be $17,000/year!!

So that means every year, with my 70,000$, I have to find a way to get 25% return (after taxes) through wise financial investments. I'm not going to lie to you. 25% is a lot. But hey, you know what? I have all the time in the world to figure out how I'm going to do that. I'm retired.

Disclaimer: Even though this blog heavily emphasizes the financial aspects of retiring with nothing, I won't really give out tips or investment advice. It's really more about exploring the possibility of doing this and the tips and tricks I find to help.


Alexanda said...

Am I right in guessing that you have no health insurance? Even given that you are young and assuming that you are healthy, I have a hard time imagining your having a policy within the budget you've listed.

H-Bomb said...

Wow, I wish I would have thought of this before it was way to late to start.

Soup Parrish said...

Alexanda - You are correct in that I do not have a long-term plan for health insurance. I still have a temporary plan from my previous employer. I will likely post about this aspect of my life in detail later along with other large ticket items that makes my current plan unrealistic. Part of this venture is adjusting to the challenges that come my way.

H-Bomb - Thats my sentiment, exactly. I'm young, I can afford to be (extremely) risky and I still have a lot to give if everything falls through.

Anonymous said...

so how's the job going?