Taking Early Retirement - I Retired Early

November 28, 2013
by Jeremiah
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Taking Early Retirement – Thanksgiving 2013

It’s Thanksgiving Day in the United States. It’s a time when the whole family gets together, catches up with all of the goings on in everyone’s life. We all sit at the table, hold hands and tell all present, what we are thankful for this year.

This year we are not doing Thanksgiving at 1:00 PM like we have done in years past. This year we are having dinner at 5:30 PM. We’ll have the candles on the table lit and our pottery dinnerware on the table. This year we are having Champagne for our beverage. We’re celebrating.

This has been an incredible year for my family. We are all healthy. We all have incomes coming in; my two sons, my daughter, my wife and myself. All of our children have their college educations out of the way and (thanks to their father – me) are college debt free. We all have health insurance; no small feat in these times. We all have fairly new cars that are in good mechanical condition. I still have my 1999 Ford Ranger, and it’s in good shape too.

This year, I am thankful for you, my reader. I’m thankful for the comments you have left and thankful I have made a difference in your lives, or so you tell me. Some of you are closer to retirement than you were when I started this blog. Some of you have retired this past year and are doing better than you would have thought.

Thank You!

For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!

Jeremiah John

November 3, 2013
by Jeremiah
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Average Monthly Retirement Budget = $899

He was born in 1958 and she was born in 54. So he is a year older than me and she is three years younger. As a matter of fact, she’s the same age as my wife. So we are all close to the same age. Meet Ron and Theresa.

We are in the same age group. But our financial situations are a lot different. Not that they are any different from a lot of people, but we don’t have that in common. I didn’t have a lot of faith in the economy in 2007 and 2008 and was in money market funds for most of my portfolio except for some silver and gold mining stocks. Lots of people were fully invested in common stocks. And during those two years, lots of people lost ½ of their portfolio. That’s what happened to Ron and Theresa.

They both worked for a car dealership in Sacramento and it went under. And long story short, they went under too. The thought of starting all over again at new jobs, only two weeks vacation, no seniority, with people thirty years younger, was more than they could handle. But rather than start all over, they took early retirement.

They didn’t sit down when they first got married and plan to retire in 2008. They really retired much the same way that I retired. They both went into work one day and found out the car dealership was closing and they were out of work. They got busy really fast, did some research, and came up with a plan. They found someplace where they could live for around $900 a month, including health care premiums.

How did they do it? They became expats. Expat is short for expatriate. According to Wikipedia, an expat is a person temporarily or permanently residing in a country other than that of the person’s upbringing. There are more and more people leaving the US to go and live someplace else every year. Ron and Theresa are just two of a growing number of people doing this.

Why? Well let’s look at what they spend every month

Electricity	$50
Water	$8
Propane Gas	$3
Telephone	$5
Direct TV	$75
Internet	$50 downtown $130 at the coast
Groceries	$350 (Includes wine)
Transportation	$25 (buses & taxis)
Entertainment	$50
Condo Dues	$130 (Total for both condos)
Health Plan	$113 ($53.42 each, which covers doctor's visits and meds)
Total	$859 to $939 per month (depending if they are downtown or at the beach)

Something about their budget hit me right away. Note the Internet and Condo dues. Yup. They own two places. I had to ask; propane? Well they use propane for heating their hot water and also for cooking. Buses and taxis? They don’t have a car. Everything is within walking distance and for what’s not nearby, they get a cab or take the bus. Condo dues? They own their own places at the beach and downtown. They pay $30 a month at the beach and $100 a month downtown for the HOA fees. That’s pretty low if you ask me. And they bought the two places for less than $114,000 total. Pretty good, I’d have to say.

What surprised me the most was the health care costs. Granted, the prices are age dependent and the older you get the more you pay. But I found out that Ron and Theresa qualified for a national health plan and the price was the same no matter what your age. And as you can see by looking at their budget, they each pay just over $50 a month.

Talking with friends, this past weekend, over wine, the big question came up. “When are you moving to Ecuador?”

I’ll answer that question in another post.

For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!

Jeremiah John

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October 18, 2013
by Jeremiah
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Taking Early Retirement – Part Time Jobs II

I haven’t been around the Taking Early Retirement (TER) blog very much this year. I guess I could make up some story about where I have been or what I have been doing. But telling the truth is easier. If you have read My Life Story Page 2 I had a sort of bucket list of what I thought I wanted to do in retirement. And over the past couple of years I have been working at some of these things. But before I get into all of that, let me tell you about an interesting development that happened quite unexpectedly. My wife got a part time job.

It’s not a real job. Let me tell you what she doesn’t do. She doesn’t go someplace every day for a couple of hours, five days a week. She doesn’t get a regular pay check. She doesn’t get any health benefits or perks. She doesn’t sell something door to door. So what is it?

Until the middle of last year, our youngest, our daughter, was living at home. Like a lot of younger people who had graduated from college with a four year degree, she was not having any success finding a job. One day when the family was all together for a Sunday meal at our home, her job hunting topic came up. She asked our youngest son how he had found his job so quickly.

He told her that he thought it was the resume and cover letter he had. “Where did you get it done?” she asked. “Mom did it for me.” The look on my daughter’s face was so funny that we all broke out in laughter. She looked at our oldest son and asked, “You too?” He nodded his head up and down. “Yup.”

She looked at her mother and said, “Mom – why didn’t you say anything?” And my wife replied, “You didn’t ask.”

Since my daughter had moved back home, after her college graduation, there had been some tension between them. When she moved back in she told her mother that she was a woman now. She wasn’t a child any more. She could stand on her own two feet. She had her college degree. She only needed a place to stay until she could get a job and then she was moving out. I chalked the behavior up to being a “girl thing”. When I asked about the tension in the air she said our daughter was on her high horse. I left it at that.

Well we agreed not to talk any more about the job search at the dinner table and they would visit on Monday about it. Long story short, my wife rewrote the resume my daughter had and also did a stellar cover letter that my daughter could modify for what ever the position was.

Within four weeks she had a job. Then she got a better job. Four months later, we were empty nesters again. No more kids at home. Two of my daughter’s friends came to my wife for a resume. While she was working on the first one, I told her she needed to start charging for this little skill she had. So she did. Our daughter’s first friend paid $80 for a resume and $20 for a cover letter. Friend number two paid $175 for the combo package. It was done on better paper, which cost more, and this friend had a color portfolio which my wife helped her make into a PDF from Adobe; so it was more involved.

Time spent? About three hours – 30 minutes for the first friend and 2½ hours for the second friend. That was at the beginning of last year, 2012, around Valentine’s Day. She spends about 15 hours a week writing resumes for people all over town. And she’s been averaging about $150 an hour in income. We set up an LLC for her mostly because our accountant said an LLC would help us maximize our deductions at tax time.

Would you like a job that could pay over $50,000 a year part time? If you’re retired, this would be a perfect way to supplement your retirement income. Here’s a link to a course that costs less than $100 and will teach you how to get started. Please don’t let the price fool you. After my wife had been doing this for four months, she found this web site and bought the course. She raised her rates and took the advice given in the course. It’s produced by AWAI, a well known national company. The Pro Resume Program You should check it out as soon as you can. There are plenty of people looking for jobs and need a good resume. This course also comes with a strong guarantee. If within 30 days you’re not making the kind of part-time income you dreamed you would make — or if the resume business just isn’t your cup of tea — simply let them know, and AWAI will refund every penny of your purchase price.

For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!

Jeremiah John

P.S. I’ll be back next week to tell you what I have been doing this year and bring you up to date.

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January 4, 2013
by Jeremiah
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2013 Is Here

This year, 2013, I finally have my ducks in a row. Well, I think I do anyways. I turned 55 last year. There were no black balloons and no black birthday cards. Just a few hugs and kisses and a nice dinner on the back deck. It was three years ago, back in October 2009, I got the layoff package and I “retired”. It was meant to be – but not what I wanted it to be.

Oh – now I get a special rate on coffee at the pancake house in the next town. Pancakes usually give me acid, so I usually only order coffee. Coffee usually gives my wife acid. So she eats the pancakes and I drink the coffee. The last time we were there, I noticed a sign that said, “Ask about our over 55 discounts.” The waitress wanted to see my drivers license and then told us about the over 55 discounts. My wife said she was flirting with me, but I didn’t notice. Poeple always tell me that I look like I am in my late forties. Maybe I should subtract 10 years from my real age and pretend that I am 47 and not 57.

Last summer, in 2012, my wife ran into my old boss and my wife said that she, my old boss, was actually nice to her (my wife). They exchanged pleasantries and my old boss asked how I was (“Fine.”) and asked what I was doing (“He’s working on a study course on investments and how to pick stocks that go up.”) “He was always pretty good at that.”, she admitted. “Do you know how much he is going to charge for it?”. “He’s probably going to charge around $47 or $49 a month. Something reasonable”, she said. She asked if I was doing any retirement planning for younger people and my wife answered that I was.

When she got home, almost as an after thought, she said she ran into “TSB”. I laughed and said, “Really?, What is she up to?” TSB was the name that my wife gave to my boss when it was just the two of us talking. She never used the initials when we were with anyone else, just between us. TSB is kind of like SOB, only the TS stood for That Stupid B. You probably get the idea. My wife was always PO’d that she got the director job and not me.

Anyway she told me all of the above and when she told me that now I was doing retirement planning for younger people, I sat down on the couch and had a good laugh. My wife said “What’s wrong with that? You can add it to your bucket list!” To be honest, I have quite a few things on my bucket list. And, all but one, I have added myself. Now my wife is helping to add stuff. I’ll probably never complete the bucket list.

She said I was a natural teacher. “All the kids at the sand lot listen to you when you coached softball last summer over there.” “Over there” was the sand lot that Rick Martinez donated to the town as long as the town didn’t sell it for development. It was supposed to have been a sports park or somethng like that before the economy went south. The neighborhood kids turned it into a place for pick up softball games and I watched the games and then coached a little last summer. It was fun and it got me out of the house and into a little sunshine and fresh air.

I heard it a lot – “You need to get away from those stocks on the computer and get outside. All you do is sit in front of the computer and watch the tape. Go take a walk or something.” With all of the snow this winter, I haven’t been getting out much. I’ll be glad when spring comes and we start playing ball again.

For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!

Jeremiah John

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November 4, 2012
by Jeremiah
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Is Your Retirement Portfolio Making 16% – Update

This is an update on my post of July 23rd. I bought Riverbed Technologies (RVBD) on June 12, 2012 at $16.76 per share. Then I sold a call option for income of $18 on June 13th. After commissions of $7.95 I got $145.01 deposited into my account.

You can go back and read the post to get all of the details. On August 9, 2012, RVBD was trading at $19.86. I had sold an option to sell my shares in September for $18. I figured that the stock was going higher than $18 and I might be leaving some money on the table.

So on August 9th, I bought an option to cancel my original trade. This trade cost me $287.73 with the commission. I had already received $145.01 when I sold the option so my net loss on the trade was $142.72. So I bought it for $287 (I bought it high) and sold it for $145 (I sold it low) so the difference was a loss.

On September 21, the stock was trading at $22.26. So my original hunch that the stock was going higher than $18 was correct. I sold my 100 shares for $2226 and after commission I wound up with $2218.10.

So what is the bottom line? I sold the stock for $2218.10. I paid $1675.75. The difference was $542.35. To figure out my gains, I need to subract my loss on the options trade which was $142.72. So $542.35 – $142.72 = $399.63. Then I divide the $399.63 by my original purchase price of $1675.75 to get a gain of 23.85%.

The trade did not work out like I expected. For one thing, the stock didn’t stay below $18 like I thought it might. When it went to almost $20, I decided to get out of the option I sold for income. That cost me some profit, but I felt it was worth it. I was planning on getting 7.39% if the option got exercised. Instead I made almost 24%. My time in the trade was about 13 weeks – from June 12 to September 21.

Another thing was that my stock analysis software is better than I thought. It showed that I could make some good growth on the trade, but not the size of growth that I eventually made. Doing it again, I will probably buy 200 or more shares to get better transaction costs.

My problem is that I limited the amount I would devote to this trading strategy since I was a newbie at writing covered calls and really was just getting my feet wet writing covered calls. You might be wondering, “How am I doing in my account?” Well I am happy to say that my account is doing just fine. But let me back up.

When I was planning on my retirement, it was back in the 80s and 90s. Interest rates were a lot higher then. If you told me that the interest rates paid by money market funds was going to be under 1%, I would have laughed out loud. How can you plan your retirement around money markets paying .005%? Never, never in my wildest dreams did I figure that I was only going to make .005% on my money that was sitting in a money market account. But that is today’s reality.

So I had to find other investment options. I always planned on a low rate of return. You will laugh when I tell you that I planned on a rate of return of 7%. I just knew that I could make 7% on my money. Heck I thought I could make that with some small dividend stocks and money market accounts.

You now know the reality. You know why I was lookoing at part time jobs, when I first retired. I did a short stint at my old job as a consultant on contract as needed. But it wans’t for me. I knew more than the people who I was working for and they knew it. I didn’t realize it but I embarassed them in meeting after meeting. Until, they finally took me aside and told me that my time was up. I didn’t realize they didn’t know what they were doing and that I was telling them what to do. But I was and they got rid of me.

O.K. So I was out of the consulting business. I’m glad I didn’t fall for going back full time. I would have really been screwed. So I needed to make at least 7% on my investments to complete my plan as I planned it back in 1980. Am I doing that?

I put aside a small amount of money into this “writing covered calls” plan. It was a test. I opened an options account with Fidelity.com and got started about the first part of June. Since June, as of today, my account is up 9.23%. So count the moneths on your hand; June, July, August, September, and October. 5 months and I am up 9.23%. If I divide that by 5 and multiply that by 12 to get a yearly rate, I come up with 22.152%.

So ask your question, “How am I doing in my account?” And I will say, “Just fine, thank you.”

For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!

Jeremiah John