Net Worth (April 2017) and (Too) Early Retirement- #9

 

Wise Guy’s Net Worth

There’s an odd fascination amongst the financial independence/early retirement community to share specific details on personal finances, net worth, projected retirement date and age, etc. Basically, we all love the numbers. The more specific and plentiful the numbers, the better, it would seem. Well, here you go … 3 … 17 … even 42.57224! Free numbers, just for you. Limited time only!

Okay, okay, okay. If you recall in a previous post, I calculated that my family would need roughly $1.25 million (based on the 4% safe withdrawal rate) if we were to retire and maintain the same level of annual expenses (~$50,000 per year). Well, how close are we to reaching our mark?

As of April 3rd, 2017, we’re right around 26% of the way there. That’s roughly 325,000 marching green soldiers, ready to do battle. Stand down, soldiers. We’re not ready yet.

Our Net Worth includes the value of our house (minus our outstanding mortgage), our cash and investments, and subtracts debts like credit cards and a car loan (THAT was dumb). You could argue that the house value shouldn’t be included since it’s not an “account” that we can withdraw cash from to pay for our living expenses. You could argue it, but let’s not. Instead, assume we sell our house, use the proceeds to pay off the rest of our mortgage balance, and then use the remaining cash to rent a place during retirement. 

 

So What If I Retired Now?

Whenever I reach financial independence, I have no idea what I’ll focus on from 9 a.m. to 5 p.m. to fill up the hours I would normally be working. It’s a fascinating thought process. The myriad of possibilities is entertaining to explore:

  • I could devolve back to my college days where I sunk solid 6-hour shifts into video games on a regular basis. Eh, not very fulfilling.
  • I could bust out my jorts (that’s jean-shorts to my less cultured readers) and sunhat and garden all day long. A little too creepy for my taste. Besides, I already have a terrible back at 31. I can’t imagine I’d last very long kneeling in the dirt.
  • Perhaps I’ll invest in a pottery wheel and give wet ceramic bowls to all of my friends on their birthdays. “You’ll have to fire this yourself since I don’t have a kiln. You’re welcome!” Bingo, we have a winner!

Maybe I’m getting ahead of myself since, clearly, we’re not there yet. But it is intriguing to imagine what life would be like if I threw in the (work) towel and retired anyways. I constructed a graph to display how much we would be allowed to spend on various categories based on our 325,000-soldier army and the 4% withdrawal rate:

 

Net Worth plot showing the difference between my retirement needs and what I currently have.
I left off the $6000/month that I dedicate towards underwater basket weaving… It blows up my graph and brings more attention to my pastime than I’d prefer.

 

The blue columns designate our current monthly expenses. Distributing the monthly withdrawals (4%) that our $325,000 portfolio would provide make up the green columns. It looks like we’d have to tighten our belts quite a bit!

  • “Hey, Mom and Dad! Can we dust off the ol’ Basement Lease Agreement we had all those years ago?”
  • I know! I’ll trade in my car for a sturdy goat! My CAR can’t eat the blackberries in my backyard! What a waste!
  • “Wife? Sons? Whose turn is it to get a haircut this year?” (This would’ve been easier with daughters …)
  • “Okay, utilities – heat, electricity, water, sewer, garbage, internet – four of you have to go … No, no, no, internet. Not you. You’re staying!”

That went downhill fast. I’m glad you readers can’t see the tears when I write. I’m ugly when I cry.

 

Chin Up, Wise Guy!

So April 2017 isn’t the date. Ah well. I guess I’ll continue recruiting green soldiers to strengthen my cash army. Until then, perhaps I should work on figuring out what the heck to do to fill up the 9 a.m. to 5 p.m. blocks that retirement will vacate. How much IS a pottery wheel anyway? What other fantasies can I dream up? Whatever I come up with, I’ll need to estimate the “cost” of having all that free time and budget for it. Hopefully my new hobbies will be cheap …

xkcd
Cheap hobby – mispronouncing words. No one is safe (the folks over at xkcd are bralliant).

 

 

I’ll be back again next quarter with a Net Worth update. Until then, I march on and continue to save …

 

Have some questions on our Net Worth or how it’s split between different investments? Ask away in the comments below! 


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