Sunday, August 28, 2016

400 weeks

Coming up with a successful pre-retirement strategy involves detailed planning. For starters, you need to list down some goals. Not just one goal but many goals. For us, the ultimate financial goal is to retire comfortably, so we're able to live our dreams before the age 60. But this goal is too broad to be useful. Breaking this down into many sub-goals at midpoint should help provide details that make it more tangible.

In a healthy relationship, the wife should always be involved. So in my case, I had to sit and talk to my wife before coming up with the following:

  • We want to have the option to quit our jobs and start our own business by age 52
  • We want to have at least 2 million dollars in investible assets.
  • We want our mortgage paid off by the time our eldest daughter, Maddie, goes to college.

All three, I believe, can be accomplished in 400 weeks!

Paying off our mortgage is key. However, I don't want to get too crazy paying it off because the interest is a miniscule 3%. In comparison, the stock market has returned more than 10%, on the average, between 1970 to 2015 (here's a calculator).

The only reason I'd like to have some additional money to cover the principal is to provide some diversification as we're already heavily invested in stocks (I will cover the asset allocation of our portfolio in a future blog).

Here's a projection of when our 15-year mortgage will be paid off if I keep paying an additional $300 towards the principal:

On May 1, 2024 the outstanding balance will be $0.0. The year that Maddie goes to college, our mortgage will be paid off.

Her little brother goes to college 4 years later. So there should be no overlap of college expenses on our part:

Should they decide to attend private school (which I will strongly discourage them to do so), it wouldn't be a problem. We've already saved up more than $90K in their 529 accounts, and we have no mortgage to worry about by then.

This is why how we spend, save and invest our money within the next 400 weeks is crucial.  It's a huge step towards our lifelong dream to become truly financially independent.

But this is just half of the 800 week journey. We'll both be 60 after the next 400 weeks (of the first 400 weeks). I'm confident that by then, we'll be more than ready to retire completely from being self-employed. If the past 12 years can be used as an indicator, my guess is that our net worth would be somewhere between 10 to 15 million dollars.

That folks is an example of how you do long-term planning!

Do you think this is too ambitious? Let me know what you think.

Sunday, August 21, 2016

About this blog

Thanks for stopping by Millionaire Before 50. Hope you enjoy your stay.

Some interesting facts about me...

I'm a Filipino-American software engineer who moved to the U.S. in the middle of the dot-com boom and eventual bust, which caused many layoffs in the tech industry. While the recession did not necessarily leave me in financial ruins, the events acted as the impetus for me to start saving religiously- at a late age of 30.

I'm now happily married to a beautiful registered nurse who also mothers my 2 children. Together we work as a team to achieve our dream to become financially independent from our employers by the age of 52. I hope to chronicle our journey through this blog.

We successfully funded my eldest son's college education (it helped that he finished his degree in 3 and a half years) with very little help from the government or his real mother.

Our combined income before taxes throughout the past dozen of years range from $120K-$200K.
You might think that's a lot, but the income supported 7 people if you include my in-laws. It is typical for immigrant families to bring their parents with them.

I know, having in-laws living with you supposed to suck. But I get along with them quite well plus they provide some economic value (they help us save money on childcare). It also helps us to become very focused realizing that we could become DUNKIN-- Dual UNemployed with Kids and IN-laws to support after we retire. It's a matter of investing now or eat donuts for the rest of our retirement lives!

I regret naming named this blog with "Millionaire" in the title as some people might think I'm bragging, or worst bombard me with and welcome solicitations. For this reason, I am no longer writing anonymously. I simply don't want this blog to interfere with my relationships with friends and family.

I plan to become outrageously generous to the needy someday.

This was me when my house was being built. So excited that I forgot to zip my fly.

Rockstar Finance