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Oh that's right, I forgot that Garth was involved in all this.

I don't want to sound overly negative. I think it's totally possible to completely stop working and "retire" in the 30s, especially for people like twowheeled, and the couple in the articles, who have very high incomes. It's possible!

But from a financial security standpoint, I think one should stay below a 3% withdrawal rate because of the very long time horizon (see post #44 above). My own calculation looks like this:

Current annual spending: 38k per year
Estimated 'retired' spending: 45k per year (margin of safety)
Withdrawal rate: 3.0%
After tax capital required: 45 / 0.03 = $1.5 million

I've already gave my opinion on SWR and drawing down capital vs. living on ONLY the income your capital can generate and not touching capital, so I won't repeat that. However, I will comment on an expectation that planning for only a 'cushion' of $7k between spending($38k) and income($45k) which is only a cushion of less than 20% is a recipe for disaster.
 

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thanks for all the responses. I have been reading along even though I haven't had the chance to respond yet. There's a lot of valid points and I do agree with some of the numbers suggested. I do believe I would need approx 2-2.5M for the passive income to retire on around 50k per year.

Sleeping in a hammock is an exaggeration. But I wouldn't be bored in early retirement. As someone suggested it is not the allure of being lazy and doing nothing. It is the freedom of having my time entirely to myself, to use as I please that gives me the most satisfaction. I tend to engross myself in my hobbies and learning new skills, but I don't care to mix pastimes and work. On my sabbatical I dedicated about 10 hours a week to professional photography, doing gig work. While not challenging it completely destroyed the passion I ever had for that. Once I am doing something for someone else for compensation, that activity completely changes.

My wife is a recent immigrant from Vietnam. She has dived into the same "work to death" pattern since moving here. I'm away from the apartment for 12 hours a day, and she works 40 hours a week and takes care of the house work. This lifestyle is bizarre to her as well. The most frustrating aspect of this is despite earning a good combined income of ~220k a year, sacrificing our spare time for shift work, we do not at all feel the least bit wealthy. I'm a frugal person by nature and I don't want silly material things like a Mercedes or a country club membership. But things that do bring us real value, being able to claw back our time, seems out of reach.

For example, my evenings consist of getting home and having about 3 hours to myself, eating a microwaved dinner, walking the dog, packing my lunch and doing some chores with maybe 30 mins of TV or down time for myself. I can't free up time, the most valuable thing to me. Things like a house cleaner/maid, using uber/cabs, eating out a few times a week still feel out of reach for our income level.

Don't get me wrong, I don't feel entitled to any of these things. I happily do them when I'm off work. But the frustration I'm feeling is that despite earning, what? double the median household income? not having any kids, not having debt hanging over our heads, we still feel like we are only slightly above poverty.

My work isn't physically or mentally demanding. I have a very simple job that I can do well. It is not "burn out". The commute, giving my employer an undivided attention span of 10 hours a day, just maintaining that presence is the majority of the effort. I don't feel that the compensation is adequate for giving away my time in such large chunks. IOW I value my time so highly that to give it away to an employer, I should be able to afford to hire or source out such other necessities as house keeping, cooking, transportation, grocery shopping, etc while still having enough for our inflated housing, retirement savings, etc.
Twowheeled, I'm sure you don't mean to be vague but you are being. Do you want to retire or not? Yes or no? If you do, what do you intend to DO about it?

You say you would be willing to retire on $50k per year and to do so you would need $2-2.5 million. Clearly, you like others here, are only looking at an SWR based plan. Why?

Here's how the equation works. Capital generates income based on how it is invested. People usually use that to determine the capital required for the income they want based on some idea of what return they can expect to generate with the capital they have.

I suggest a different question being asked than 'how much capital do I have to have?' Ask the question, 'how much return must my capital provide to give me the income I want?' THAT is an entirely different question and will take you down an entirely different road.

You say that you now have $500k in capital. You say you would be willing to retire on an income of $50k. Can you see where I am going here? IF you can generate a return of 10% on your $500k, then you could retire today with an income of $50k.

People get so hung up on SWR and how much capital they would need to follow that type of plan, that they cannot see it is not the ONLY way to fund retirement. Change the paradigm. Instead of assuming SWR is the only possible way to fund retirement, decide what return you want to get and then find a way to get it.

When I retired 31 years ago, numbers were obviously different then but the goal was just the same. How to retire as soon as possible with enough income being generated by as little capital as possible. I saw two separate needs. One to generate enough income for the immediate future and two, how to continue to be able to grow the income to stay ahead of inflation. How to do that then were my TWO questions.

The first answer I came up with was to accumulate capital by simply spending less than I earned. You are already doing that. Then invest that capital to get the returns I needed to get to provide the income I needed to retire. In my case, I originally invested in industrial and commercial real estate into which I had a means of gaining entry. This is important, not everyone should be looking to follow the same path in how they generate income but all too often when early retirement is discussed, the only method talked about is SWR.

Again, going back 31 years, I figured I could easily live on an income of $12k (roughly $24k in today's dollars) in a lower cost country but to allow for inflation, I would need to keep increasing my capital to generate the increased income needed, my second question I had to have an answer for.

So I aimed for an income of $36k following the Rule of 3s for budgeting I explained above. One third for living costs, 1/3 for discretionary spending and 1/3 to ADD to my capital and invest to produce the necessary increased income inflation would require.

Next was how much capital would I need to accumulate to generate that $36k income? Again remember this was over 30 years ago when I was going through this. I could reasonably expect to generate 12% on my investments in real estate at that time. So, simple calculation, I would need $300k to generate $36k in year ONE.

And that is what I did, when I reached $300k invested I was 7 years into a plan that started out as a 10 year plan to get there and that's when I retired, seven years after deciding that is what I wanted to do, starting from near zero capital. Then came year TWO.

In year two and three and four, etc. things would obviously change. But each year what I had to do was look at the income my capital was generating, how the capital was growing as I continue to add 1/3 of my income to my capital, whether I was still able to live on 1/3 of the income or not and how to change whatever I needed to change to make it continue to work.

It is not a 'set it and forget it' proposition any more than anything else in life is. But SWR proponents seem to think that is exactly what the best way to fund retirement is. Get so much capital that it will last forever even though you are making no attempt to grow your capital, you are just drawing it down every year and expecting it to last till you die.

Now go to your own words twowheeled which some here really don't seem to be able to grasp. "But things that do bring us real value, being able to claw back our time, seems out of reach." TIME is what I am talking about here. How to retire as soon as possible in order to have the maximum amount of time spent in retirement.

SWR plans in fact require the exact OPPOSITE of that from my perspective. They require you to accumulate so much capital that it takes a long time to do so. How long will it take you at your present rate of saving, to accumulate $2.5 million? Then ask yourself if you could figure out how to make $1 million generate the income you want, how long it would take you to accumulate the $1million? Obviously, quite a bit less time.

So then ask yourself, why am I fixating on accumulating $2.5 million to put in an SWR plan instead of fixating on how to get better returns on my investments and therefore needing less capital and less time to get to my goal of retiring? Change the paradigm!

I saw retirement as no different than working. Each year, you have to decide what to do with your income. Some you have to spend on living costs, some you can spend as discretionary and some you have to save and invest for your future.

Now look at my way and do a simple compound interest calculation here:

Suppose I started with $300k, lived off the income it provided in year one of $36k while adding $12k of that to my capital for year two and to simplify the calculation, continuing to add $12k each year for 30 years and managed to have an average return of the 30 years of just 3%, how much capital would I have today? Answer, $1.3 million. But I didn't just earn an average of 3% for 30 years and I didn't just add $12k per year to my capital. In some good years I did quite a bit better than that and in no year have I done poorer than that.

Now consider someone who retired 30 years ago using an SWR plan and where they are likely to be in terms of capital. They may have managed to continue to generate the income they wanted but they had to spend more TIME accumulating their capital than I did and it is dwindling by the day while mine is still growing.

Retirement is not an ENDING, it is just like any other period in your life and yet so many people seem to think when you retire, you fix everything in stone regarding your finances and then just wait to either die or run out of money before you do die.
 

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This is for someone in the accumulation phase. Someone adding to their portfolio. There is no point in taking out of the portfolio to then add to it.

That tells me that your withdrawal rate is low, which is a good thing. You have also ridden on the coattails of long a bull market in stocks and bonds.
You are not listening to what I am saying Topo. Why should you not be in the accumulation phase as you call it, throughout your life? Answer, because YOU cannot see beyond SWR and withdrawing capital. I continue to add to capital as I have for 30 years and THAT is what allowed me to retire far sooner than most here will manage to do following SWR thinking.

I do not have a 'withdrawal rate', Topo. I have an income from my capital (as well as pension income these days) and I live on less than that income. I do not even invest in stocks Topo. Are you not aware there are other ways to invest capital and generate income? I've invested and generated income for 30 years without ever having to work and without ever having bought one stock share. Go figure.
 

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Ultimately there are no guarantees of market performance (ever) no matter how well things worked in the past. This is why there is a certain inescapable danger of early retirement if you barely have enough capital.
There again we see the assumption that early retirement, the stock market and SWR are necessarily all linked together.
Don't invest in stocks, don't rely on a SWR and what happens to that prediction? It's irrelevant. All that matters is how much income the capital you have generates for you. Some might be amazed at how that can motivate someone to find ways to invest their capital that will generate the income they want and how they can plan to continue to grow their capital at the same time.
 

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You are not listening to what I am saying Topo. Why should you not be in the accumulation phase as you call it, throughout your life? Answer, because YOU cannot see beyond SWR and withdrawing capital. I continue to add to capital as I have for 30 years and THAT is what allowed me to retire far sooner than most here will manage to do following SWR thinking.

I do not have a 'withdrawal rate', Topo. I have an income from my capital (as well as pension income these days) and I live on less than that income. I do not even invest in stocks Topo. Are you not aware there are other ways to invest capital and generate income? I've invested and generated income for 30 years without ever having to work and without ever having bought one stock share. Go figure.
Longtimeago, thank you for clarifying this. We are talking apples and oranges. As far as I know, SWR does not apply to a real estate portfolio. I was specifically commenting on a passive portfolio of securities. But I get it when you say you are not a fan of SWR, you mean you do not like a portfolio of stocks and bonds as a source of income. You prefer to invest in real estate.

As you know better than many of us, real estate is not a passive business. There is some work involved, albeit not the typical 9 to 5. However, OP states his goal is to:

.....spend my days sleeping in a hammock by the beach, drinking beer, and laughing a lot.
If he would be willing to start a business, whether real estate, a coffee shop, or something related to his expertise, then SWR would be less important as he would not be relying on his portfolio that much.
 

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Longtimeago, thank you for clarifying this. We are talking apples and oranges. As far as I know, SWR does not apply to a real estate portfolio. I was specifically commenting on a passive portfolio of securities. But I get it when you say you are not a fan of SWR, you mean you do not like a portfolio of stocks and bonds as a source of income. You prefer to invest in real estate.

As you know better than many of us, real estate is not a passive business. There is some work involved, albeit not the typical 9 to 5. However, OP states his goal is to:



If he would be willing to start a business, whether real estate, a coffee shop, or something related to his expertise, then SWR would be less important as he would not be relying on his portfolio that much.
Don't get hung up on absolutes Topo. I wrote that everyone should find their own way of generating their income just as we all did when we got our first job. Did we all stay with that first job for the rest of our working lives? Not likely. I invested in RE initially, that does not mean that has never changed in 31 years. I have changed how I generated my income quite a few times since then. Some such as Greek government bonds that paid 21% were entirely passive while others such as owning a bar were quite hands on.

The OP does state his goal but has returned to clarify that 'laying in a hammock' is just his way of saying what he wants is the FREEDOM to do that if he wants or to do anything ELSE that he wants to do at any given point in time. That is the point of financial freedom, the freedom to CHOOSE.

Let me give you some real life examples of what can happen once you have FIREd. I ended up on a Greek island more or less enjoying the 'beach bum life my Mother worried about. Sitting around one day in my local kafenion (coffee shop), a couple of acquaintances asked me what I planned to do when the upcoming tourist season began again. I replied, I didn't plan to do anything in particular except enjoy my life. They said, 'oh no, you can't do that. You'll end up sitting in bars, chasing women, etc.' I said I didn't see much wrong with that but they kept pestering me saying 'you have to have something to do'. So then I thought, OK, how can I sit in a bar, meet women, enjoy myself but at the same time get paid and LOOK like I was doing something. The answer was to open my own bar with a local partner and that's what I did. Year one was fun, year two was OK and year 3 it was becoming less enjoyable and more like work. So I sold out my half to my business partner at a profit.

Now, during that time Topo, was I 'working'? The answer is no, I was not. As soon as it started to be 'work' I got out. I was free to choose to do that or not do that every day. I was 'lying in a hammock', just a different definition of a hammock.

About the same time as I gave up the bar, my landlord asked me if I would give him a hand around the property, doing various projects like building a new diving board for the pool. I figured 3 layers of plywood, screwed and glued plus a coating of glue on top with sand sprinkled on it to give grip. Then paint it and voila, you have a diving board. Then we built what you could call a garage but was intended as a laundry room for doing all the laundry (sheets, towels, etc.) for his vacation rental apartments. Maybe spend an hour trimming his prize bed of roses. In return for 2 hours a day of this kind of thing, I ended up living rent free for 5 years.

During those same years, another bar owner I knew asked me to spend my evenings in his bar socializing and playing pool with the tourists. In return he paid me 'pocket money' and all my drinks were free. So in the tourist season (Apr-Oct), I got paid to enjoy my evenings. The closest to work that got was having to let the tourists win on the pool table without making it obvious when I was letting them win.

In those same years again, I was living with an English woman who was an English teacher. I contributed the rent so to speak, although I wasn't paying any and she contributed the groceries. So picture it. I got paid to enjoy a social life and had no real expenses for most of the year, every year. As you might guess, it was only costing me a couple of thousand a year to live. All my excess income was just added to my capital.

So there I am living on an 'tropical island paradise', going to the beach in my classic little red MG convertible that I bought in England and drove back to the island and enjoying the companionship of a woman 19 years my junior. You bet I was living life in a 'hammock' Topo.

I could go on Topo with other examples of how in my own case, things just happened and with some I was happy to become involved at least for a period of time and others I just ignored. At no time was I not free to 'lay in a hammock' if that was what I wanted to do.

Life after retirement is no different than life before retirement. The only difference is you are free to choose what you will do or not do. Changes still happen just as they did before and you have to make decisions when changes happen, just as you did before. Some are lifestyle changes, some are financial changes. Some see you spending more and some see you accumulating more. I think this is the part that people contemplating early retirement often don't understand as I have said. They think they will retire with a 'plan' and that plan will then remain the same till they die. I can guarantee it will not. As the saying goes, 'man plans, God laughs.'

So what the OP says his goal is, is to have financial freedom and the resulting freedom to lie in a hammock all day if he chooses to but what will happen in reality is something that no one can predict at all. Life will unfold as it will, the only difference is that if someone has FIREd and is able to adapt to the changes when they happen, then they may well never need to work to eat again in their life.
 

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I think there are a couple of 'home truths' that should be said in regards to early retirement.

Most people are more risk averse than not.
Some people do not perceive risk where others do.
We don't get to choose where we fall on the risk aversion to risk tolerance scale.

Simple example. When my wife told her work colleagues, friends and family that she was retiring at 52 and at the height of a career in healthcare where she had reached a national level, most were shocked first and then had comments that were all more or less along the lines of, 'oh, I couldn't do that'. Then when she said we were going to sell up and move to another country (Canada), they said, 'oh, you are so brave, what if you don't like it there, I couldn't do that.'

My wife perceived no risk in it at all. Why wouldn't she like being retired and moving to Canada? Why would she worry about our money running out or her hating life in another country or miss the excitement and challenge of her work in a high profile national level position, etc. All the 'what ifs' that people came up with simply didn't occur to her to think about. What she perceived was a new beginning in a new country and that was far more exciting than daunting.

Risk is defined by the individual and as such, each of us will perceive the same thing differently. Early retirement brings up all kinds of 'what ifs' in most people's minds. They perceive all kinds of risks and want to have all kinds of assurances before they even contemplate it. That's why SWR appeals to so many. It appears to remove the risk of going broke before you die if you believe it. It also appears to remove the risk of failure and having to go back to work with your tail between your legs. Don't underestimate the power of the fear of that risk. Humiliation is a big deal for people.

Most people want a 'safe' and 'predictable' life. Early retirement doesn't really offer that even when people think they have figured out how to do it, have enough money, etc. they may still see the risks as daunting. If someone wants 'safe' then perhaps a government job and a good government pension at 65 is what they should be looking for. Early retirement is more likely to require perceiving the risks as exciting, not daunting.
 

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Discussion Starter #68 (Edited)
LTA, you're clearly very wise and have some very good points. I have spent many many hours thinking about what you speak of. Yes I would like to retire early, I'd love to be retired in my early 40's. But, this isn't a pipe dream. I have to be a realist and find a way to get from point A to point B as you describe.

"I suggest a different question being asked than 'how much capital do I have to have?' Ask the question, 'how much return must my capital provide to give me the income I want?' THAT is an entirely different question and will take you down an entirely different road.

You say that you now have $500k in capital. You say you would be willing to retire on an income of $50k. Can you see where I am going here? IF you can generate a return of 10% on your $500k, then you could retire today with an income of $50k"


This is a very complicated question. I could write a great deal on it but I would sum it up as briefly as possible. I believe we are in such an overextended bull market with high valuations by most measures in all asset classes, that achieving 10% on a forward basis is impossible. Be it in real estate, bonds, or equities, I think the "everything bubble" is a good term to describe the environment we are in to deploy capital. In that regard I would not be surprised if we went nowhere for a decade like Japan. Yes I could live on 10% on my 500k, but I don't think I could realistically obtain that, anywhere. I believe based on measures such as CAPE ratios I can expect around 0-3% in a passive portfolio weighted towards equities, going forward from today. I understand your view, which to me is two sides of the same coin. They differ only in the risk parameters. It is a sliding scale of how much return I require out of an ever smaller net worth. In your example I do not see a difference in withdrawing 36k out and depositing 12k back in for savings vs a reduction of living costs to 24k.

And in regards to the massive accumulation needed for "SWR" or any early retirement, yes I also realize that. And the return I would need to hit my goal in 7-10 years is 20% per year plus saving 50-75k after tax income each year. So there is the realist part, there is no way I can outperform the market like that. As a retail investor, the probability is the longer I take an active role in trying to outperform the market the higher the chances of me underperforming the index. I am likely not the next market wizard they will write a book on.

But there's the dilemma. I want to get from 500k to ~1.5-2M in a short time. It is impossible that I have the talent to outperform the market on even an annual basis let alone a continued batting average of a decade. Yet I have defined the goal and must find a solution to achieving the outcome. As you say bluntly:

"If you do, what do you intend to DO about it?"

Therefore the only strategy that I have with some probability of success is to:
-find an asset class where a retail investor has less of a disadvantage
-employ copious amounts of leverage to make up for lack of time horizon
-speculate for as little time as possible to minimize the probability of average performance.

In other words I have no dreams of being able to play in the NBA. But I might have one shot at making a single free-throw.

As before, I'm hesitate to share this because of the reactions it elicits. I like how you brought risk into the conversation. I spent a lot of time thinking about risk too. Specifically how I do measure risk of financial ruin by making such a "bet" compared to other risks in my life. What I've come to realize is that many people will assign too much risk to financial setback but not enough risk to other decisions that happen on a very regular occurrence. For example, if I told you that I used 300k of margin on top of my 500k of life savings on a single speculation. I think everyone in this forum would say that is an unacceptable risk of losing everything and foolish. And yet if I were to give the example of where a driver had felt fatigued after a long shift at work, or was driving in between cities and felt exhausted but decided to push on for just another half hour to their destination instead of stopping to spend the night in a hotel. I think we can all relate or have been in that situation ourselves and consciously taken that risk. Despite knowing that the failed outcome of falling asleep at the wheel would be serious debilitation or death. Which decision was worse?

Inevitably this will lead most to say, well why don't you just extend your retirement age to 60 years old? And to that I would answer is not solving the problem as it was defined. If I told you to come up with a plan to evacuate your house in 24 hours for an incoming tsunami and your response was that you could be out in 36 that is rather pointless.
 

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@twowheeled I haven't read all the replies, but I have read your initial post. I understand your feeling, I have the exact same feeling and many other people do. I don't think it's the mid-life crisis, it's more about the boredom of not having a career to be passionate about. I mean, I've had that feeling ever since I'm out of school. I changed job every 2 years. I continue my path just because of the salary. Meanwhile, I'm desperately looking for other solutions I would be passionate about while providing about the same salary.

You are lucky though. You have a really high income, no debt and you have a pile of cash. Time is money, but money is time. You had the chance to take 3 sabbaticals of one year each. You have a high income that will allow you to retire early if you start living a frugal life.

Not everybody have that chance. My income is not even half of your salary, I'm loaded with my mortgage, I have no money left in my bank account and yet I feel lucky because I plan on retiring early, which in my case means maybe 55, which is still a long way to go. But then I recall myself that most people do half of my salary (a fourth of yours), they also have a mortgage, they have 2 or 3 kids, they also hate their job, they have only 2 weeks of vacation and they will retire at 65.

Therefore, I'm being careful when talking about hating my career while talking about money in the same sentence. I have a friend who absolutely hates his job, but he'll be able to retire at 40 or even before. There are lots of people hating their job, but we are not all equal if you start talking about money. I don't understand where do people see it as taking a risk when they are in a overly healthy financial situation.

Even though this is a money forum, I don't think we should talk about the issue of hating a career and financial freedom in the same thread. If you have a high income and you plan to follow the FIRE movement, that's one thing. If you hate your job and you want to talk about advice on how to live on through your current career or how to find a meaningful career that you will be passionate about, that's another thing.

Mixing both subjects in the same thread brings another kind of response. Knowing your financial situation, my honest advice would be that I'd just stick to that kind of job and retire in 5-10 years. If the financial situation were not mentioned, I'd suppose you do 40k$ a year, you have 2-3 kids and a mortgage and that there's no way for you to retire before 65, so I'd answer with advice on how to live through it.

I was raised on a farm where my stepdad was working 85h a week, 365 days a year, earning 30k$ a year and taking one week of vacation every 5 years. He could finally retire at 63 from selling the farm. 63 is not old and yet his body is physically totally exhausted because of more than 45 years working too hard. Do you really think the FIRE movement could've been an advice given to him? Definitely not, absolutely impossible. He had to learn to live on during hard times.

Be grateful of your current situation. Do you want advice on how to retire early (since it's possible to you, lucky you) or do you want advice on learning how to live through your current job or do you want advice on how to find a meaningful career to be passionate about?
 

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LTA, you're clearly very wise and have some very good points. I have spent many many hours thinking about what you speak of. Yes I would like to retire early, I'd love to be retired in my early 40's. But, this isn't a pipe dream. I have to be a realist and find a way to get from point A to point B as you describe.

"I suggest a different question being asked than 'how much capital do I have to have?' Ask the question, 'how much return must my capital provide to give me the income I want?' THAT is an entirely different question and will take you down an entirely different road.

You say that you now have $500k in capital. You say you would be willing to retire on an income of $50k. Can you see where I am going here? IF you can generate a return of 10% on your $500k, then you could retire today with an income of $50k"


This is a very complicated question. I could write a great deal on it but I would sum it up as briefly as possible. I believe we are in such an overextended bull market with high valuations by most measures in all asset classes, that achieving 10% on a forward basis is impossible. Be it in real estate, bonds, or equities, I think the "everything bubble" is a good term to describe the environment we are in to deploy capital. In that regard I would not be surprised if we went nowhere for a decade like Japan. Yes I could live on 10% on my 500k, but I don't think I could realistically obtain that, anywhere. I believe based on measures such as CAPE ratios I can expect around 0-3% in a passive portfolio weighted towards equities, going forward from today. I understand your view, which to me is two sides of the same coin. They differ only in the risk parameters. It is a sliding scale of how much return I require out of an ever smaller net worth. In your example I do not see a difference in withdrawing 36k out and depositing 12k back in for savings vs a reduction of living costs to 24k.

And in regards to the massive accumulation needed for "SWR" or any early retirement, yes I also realize that. And the return I would need to hit my goal in 7-10 years is 20% per year plus saving 50-75k after tax income each year. So there is the realist part, there is no way I can outperform the market like that. As a retail investor, the probability is the longer I take an active role in trying to outperform the market the higher the chances of me underperforming the index. I am likely not the next market wizard they will write a book on.

But there's the dilemma. I want to get from 500k to ~1.5-2M in a short time. It is impossible that I have the talent to outperform the market on even an annual basis let alone a continued batting average of a decade. Yet I have defined the goal and must find a solution to achieving the outcome. As you say bluntly:

"If you do, what do you intend to DO about it?"

Therefore the only strategy that I have with some probability of success is to:
-find an asset class where a retail investor has less of a disadvantage
-employ copious amounts of leverage to make up for lack of time horizon
-speculate for as little time as possible to minimize the probability of average performance.

In other words I have no dreams of being able to play in the NBA. But I might have one shot at making a single free-throw.

As before, I'm hesitate to share this because of the reactions it elicits. I like how you brought risk into the conversation. I spent a lot of time thinking about risk too. Specifically how I do measure risk of financial ruin by making such a "bet" compared to other risks in my life. What I've come to realize is that many people will assign too much risk to financial setback but not enough risk to other decisions that happen on a very regular occurrence. For example, if I told you that I used 300k of margin on top of my 500k of life savings on a single speculation. I think everyone in this forum would say that is an unacceptable risk of losing everything and foolish. And yet if I were to give the example of where a driver had felt fatigued after a long shift at work, or was driving in between cities and felt exhausted but decided to push on for just another half hour to their destination instead of stopping to spend the night in a hotel. I think we can all relate or have been in that situation ourselves and consciously taken that risk. Despite knowing that the failed outcome of falling asleep at the wheel would be serious debilitation or death. Which decision was worse?

Inevitably this will lead most to say, well why don't you just extend your retirement age to 60 years old? And to that I would answer is not solving the problem as it was defined. If I told you to come up with a plan to evacuate your house in 24 hours for an incoming tsunami and your response was that you could be out in 36 that is rather pointless.
Two things stand out for me twowheeled. You seem to be fixated on the stock market and on accumulating enough capital to employ an SWR plan.

Whatever it is we want to DO, we have to find a way to do it in the world we currently live in. You say, "It is impossible that I have the talent to outperform the market" In regards to that statement, I would suggest two things. One, self-fulfilling prophecies usually turn out to be true. If you don't believe you can, then you probably won't. Second, you are looking only at the stock market as if it was the only way to invest your capital. That's simply not the case.

Then, having said you can't do it, you go on to say, " Yet I have defined the goal and must find a solution to achieving the outcome." That I can agree with but you immediately then return to the stock market for an answer after having said, "It is impossible that I have the talent to outperform the market" How do you reconcile those two things? If it is impossible for you to outperform the market, you cannot look there for an answer. You must look ELSEWHERE.

I wrote earlier that each individual must find their own way to accumulate the capital they want. I did not write that each individual must find their own way in the stock market. I gave the example of my own way initially being commercial and industrial real estate. I could do that because I had an 'in', a way of investing relatively small amounts ($25-50k) in multi-million dollar properties that were ether flipped for a quick capital gain or a portion held and most of the property flipped for both an immediate capital gain (from the flipping) as well as an ongoing income stream. It worked well for me.

However, today I would not advise it because we have to find a way to DO what we want to do in the world we currently live in and due to the pandemic, I don't see that path as likely to be a good way to go in the next few years.

I know someone who I do not think has ever 'worked' a day in his life. All he does is buy and sell wine. I've dabbled in that myself a few times with his advice. He started in his 20s, why I don't know but obviously he somehow developed an interest in wine and one thing led to another. Someone could argue he has never retired and someone else like me, could argue he has never 'worked'. In his earlier years I am sure he was putting in the hours while he built up capital but nowadays I think he only does a couple of trades a month if that.

People find all kinds of ways to invest money and build capital, outside of the stock market. There are two things I believe in that regard. No one is likely to grow capital quickly working for someone else and it is highly unlikely they can do it in the stock market either. It requires some other method of investing in something directly. Often that path requires some specialized knowledge (or access like my 'in') and often that knowledge comes from having an interest in something, like an interest in wine as per the example above.

Take a look at this link and scroll down about a third of the way to 'Lego'. Top 10 Amazing Ways to Earn a 10% Rate of Return on Your Investments Who would think to invest in Lego? Yet those doing so have had returns of at least 11% on average between 1987 and 2015.

I'm not suggesting you start buying Lego or wine but I will go back to your comment that, "Yet I have defined the goal and must find a solution to achieving the outcome." I do not believe you will find it in the stock market in a time period you will consider acceptable. It is more likely you will need to find a path outside of that which means you have to change your thinking. It doesn't mean you have to gamble your $500k plus a $300k of leverage in one throw of the dice either. But it does mean you will probably need to start thinking 'out of the box'.

Otherwise, you are probably going to be the one who, 'If I told you to come up with a plan to evacuate your house in 24 hours for an incoming tsunami and your response was that you could be out in 36 that is rather pointless."
 

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Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace
 

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Not sure if this has been mentioned, but what does your wife think? You mentioned future children. Do you want to raise them in a "poor country?" Does your wife? If you were single I would say work towards that goal of yours. Consider taking more vacations especially vacations that more closely mimic the type of life you think you want to live at this moment. Since you have been on sabbaticals I assume that more frequent vacations or less working time isn't really going to help. So think things through, do the math, and develop the courage to make the big move.

But with a wife and thought of future kids then I would suggest you think about what they want. Decisions need to be made together unless you don't care about the consequences which is selfish but it is your life. Your wife may not want to spend her life in a "poor country" or raise kids in one. Combined that with her husband sitting in a hammock all day sipping beer and that might become unbearable for her. Life is a balance. You can but don't have to sacrifice your happiness for anyone else.
 

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Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace
That's similar to how my wife and I approach things. What are we working for? Just money really. I don't care about career development. She doesn't care about promotions that only pays a little bit more. Why bother with the added stress? Then again, like the OP, I don't have a passion for working. I am not looking for a fulfilling job. When asked whether I rather be talented or lucky I always choose to be lucky.
 

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Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace
Accountants are not noted for their imagination. Understanding why someone might care is probably not your strong suit.

While you are 'not caring and leaving it all behind at 4.30', I am enjoying ALL my days, evenings and weekends with the hobbies I have. Perhaps the math of that is something you can relate to. You enjoy less than 100% of your total time available and in fact admit that the time you spend working is 'boring, annoying and at times soul crushing', while I enjoy ALL of my time available by having found a way to retire as soon as possible.

So from a purely logical and mathematical point, my use of time is obviously a better choice than yours. The difference is that I made the choice.
 

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That's similar to how my wife and I approach things. What are we working for? Just money really. I don't care about career development. She doesn't care about promotions that only pays a little bit more. Why bother with the added stress? Then again, like the OP, I don't have a passion for working. I am not looking for a fulfilling job. When asked whether I rather be talented or lucky I always choose to be lucky.
Then my question to you Pappa Tigger would be, so why are you continuing to choose to follow that path? You do realize it is a choice right?

Try considering this saying, 'you can be the architect of change or the victim of change. What is inevitable is that change will occur.' Most people go through life being the victim of change, they just let things happen to them and when a change is a negative one, they blame it on their 'bad luck.'
 

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Dude, who cares. I'm a CPA, it's boring, annoying and at times soul crushing. I leave it all behind at 4:30 and enjoy my evenings and weekends with the hobbies I have. Also at a high salary I can retire 10-15 years before others or perhaps just do something I enjoy somewhat and make a few bucks. "Follow your passion" is bullcrap for 99% of the populace
I agree. I hate computers, and I'm stuck working with them. Big deal. I get paid well and as I get wealthier, I'm able to work less and less. I think the key thing is to remember that work is not life, so you have to make time for life.

The amount of work I have to do has steadily reduced over time:
60 hours/week, initially - this sucked
40 hours/week - doable but tiring
10 hours/week - currently

I do the work to make money. The OP has a high salary (185k) and can definitely do the same thing. In five or ten years, he should be working less than 40 hours.
 

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I enjoy ALL of my time available by having found a way to retire as soon as possible.

So from a purely logical and mathematical point, my use of time is obviously a better choice than yours. The difference is that I made the choice.
Then my question to you Pappa Tigger would be, so why are you continuing to choose to follow that path? You do realize it is a choice right?

Try considering this saying, 'you can be the architect of change or the victim of change. What is inevitable is that change will occur.' Most people go through life being the victim of change, they just let things happen to them and when a change is a negative one, they blame it on their 'bad luck.'
First off, good for you. Second of all, I think you're conflating "choice" (as in absolute free will) with realistic or desirable choice. You found a way to retire as soon as possible but you assume that anyone can do it or want to do it. I have friends who made a lot of money flipping properties and running AirBNBs. I have older friends who made money collecting rent from commercial real estate. Most people starting to plan their retirement do not have that type of capital to get into that in Vancouver or Toronto over the past few years. There are others who faced with the same "choice" you did who would have retired earlier than you did by cutting back more. There are others who faced with the same "choice" you did who would choose to work a few more years because they think you retired with too little. But sure, I chose to not live a more frugal lifestyle. I'm enjoying life now.

As for your question, I'm not sure I fully understand the question. But I follow that path for many reasons. I think I'm too young to retire so even if I won the lottery I will still continue working. I also don't have enough to live comfortably to retire now. And even if I can retire now, the money I make now allows me to spend in ways that I can't do in retirement. So for me, the "choice" you are thinking of isn't realistic or desirable.

The point I agreed with robfordlives is the idea of work life balance. Our work is relatively easy for us because of both job demands and our abilities. I could move to a bigger company and earn more money but that would surely require more hours and add additional stress to my life. When my wife and I get off work we try not to think about work and we are mostly successful in it. Of course we would spend some time talking about "work" as work and colleagues is a big part of our lives.

But like you said, a lot of it is "choice." That's why I told OP to consider his wife and his future children since the "choice" is he thinking of making will impact most people's marriage and children.
 

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Not sure if this has been mentioned, but what does your wife think? You mentioned future children. Do you want to raise them in a "poor country?" Does your wife? If you were single I would say work towards that goal of yours. Consider taking more vacations especially vacations that more closely mimic the type of life you think you want to live at this moment. Since you have been on sabbaticals I assume that more frequent vacations or less working time isn't really going to help. So think things through, do the math, and develop the courage to make the big move.

But with a wife and thought of future kids then I would suggest you think about what they want. Decisions need to be made together unless you don't care about the consequences which is selfish but it is your life. Your wife may not want to spend her life in a "poor country" or raise kids in one. Combined that with her husband sitting in a hammock all day sipping beer and that might become unbearable for her. Life is a balance. You can but don't have to sacrifice your happiness for anyone else.
I struggle with this too. My wife is an immigrant from Vietnam as I mentioned. She came here thinking it would be a better life, but after seeing how hard we have to work, our standard of living, absolutely terrible weather 1/2 the year, she also has second thoughts. She would not be against returning home and we could comfortably live on that 4% a year, start a business, travel, etc.

Moreover I think we are really on a secular shift here. I've come to realize that the West's time of prosperity and wealth will likely come to an end and shift back towards Asia by the time my children grow up. Some of the advancement and infrastructure in Asia positively make Canada seem like a developing country. A lot of coworkers from other countries also have also shared the same sentiment. I'm not sure if I have the courage to act on this and uproot our lives, or just watch it unfold in front of me. As a first generation Canadian whose parents immigrated here to escape poverty, leaving the country to pursue a better life seems so bizarre.
 

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I struggle with this too. My wife is an immigrant from Vietnam as I mentioned. She came here thinking it would be a better life, but after seeing how hard we have to work, our standard of living, absolutely terrible weather 1/2 the year, she also has second thoughts. She would not be against returning home and we could comfortably live on that 4% a year, start a business, travel, etc.

Moreover I think we are really on a secular shift here. I've come to realize that the West's time of prosperity and wealth will likely come to an end and shift back towards Asia by the time my children grow up. Some of the advancement and infrastructure in Asia positively make Canada seem like a developing country. A lot of coworkers from other countries also have also shared the same sentiment. I'm not sure if I have the courage to act on this and uproot our lives, or just watch it unfold in front of me. As a first generation Canadian whose parents immigrated here to escape poverty, leaving the country to pursue a better life seems so bizarre.
It is definitely a big decision. If you don't plan to have kids, one option would be to spend time at both places. Be here when the weather is nice. If you plan to have kids, you might want to think about what you want to do when you have kids. You don't need to make life decisions based on your kids but many do. I have friends who long have plans to come back to Canada for the kids to start elementary school here and following through with it.

I'm actually a bit confused about your priorities but that's probably cause you haven't figured out what you truly want? For someone who doesn't covet nice things should a nation's "prosperity" be the driving force behind your decision? You mentioned you hate working but you also want to start a business? If you're looking to go to a "poor" country so you can live comfortably with what you have is a fast developing economy even a good thing?

I'm obviously biased and I am not familiar with Vietnam but I think life in Canada is simply different. You would know this better than I do since you know both Canada and Vietnam. If Vietnam is home for your wife and you have family and friends then it's certainly normal to prefer life over there. It's actually kind of boring here but it's less crowded. I know that here kids are still growing up pretty stress free compared to many parts of Asia. As your own experience has attested if you work hard you actually can make a decent living. So if you plan to have kids, it sounds like that if you continue to put your head down and work your kid is going to grow up pretty comfortably. They will grow up comfortably in Vietnam too but in about 20 or so years time will you want your kid to study University in Vietnam or in Canada?

Again, I don't know Vietnam but in many Asian countries it's actually desirable to have a foreign education. I have friends who try their best to keep the door open for their kids to either stay and work in Canada or go back to the country where their parents or grandparents grew up.
 

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Let's not forget that Canada has some major advantages, and many people immigrate here because of these reasons:

We are a stable country with a well functioning government. There is minimal corruption in our government, and generally, things work very well - meaning that property rights and individual rights are valued and protected. The systems are operating well; we don't have dictators; we don't get hyperinflation. We have great infrastructure and social services and safety nets. One should not overlook how important all of these things are... they result in a higher quality of life.

Secondly, Canada is part of a group of allied nations (US, UK, Europe, Australia) which have a lot of military and economic power. Again, this is very important even though many of us don't think of it in day to day life. There is mutual protection within this group and we all benefit from it.

They will grow up comfortably in Vietnam too but in about 20 or so years time...
I would not say that so confidently. There are risks to children being raised in Vietnam.

China could actually attack Vietnam, so that's a major downside to living there. The economic situation is also more tenuous, and I would imagine that Canada's government operates more smoothly and predictably.

You might say these kinds of things don't matter to you, but I know that they matter to many other people and know many immigrants who chose Canada, sometimes fleeing from war zones and oppressive regimes (examples off the top of my head: Poland, USSR, Chile, Vietnam, Iran...)
 
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