Thursday, September 26, 2013

Could I Semi-Retire in 5 Years?

I believe I might be able to pull off an early exit from full time work within the next five years.  Man it would be awesome to own more of my time!  Here's how it might look.

Passive Income Stream: 
I currently expect to receive about $460 per month (on average) from my investments.  This figure includes dividends from the portfolio listed on this public blog plus a small amount of interest from Lending Club.  I believe that by early 2018, this figure will balloon to $800-$1,000 per month based on conservative dividend growth assumptions (4.5% dividend growth), and a moderately aggressive savings target ($1,000 per month + annual tax return).  I might hit the high end of the target if my name is called for another combat zone deployment. 

Army Reserve/National Guard
Pay: $400 for one weekend per month; full time pay two weeks per year.
Benefits: Inexpensive healthcare, pension, military perks
Other: Transfer accumulated service, opportunity to lace my boots

Not Enough: 
I'm up to roughly $1,200 - $1,400 income per month so far, have health insurance, and am working towards a pension.  Not a bad place to be, but unfortunately I can't live off a sum this small.  I would need to find supplemental income sources.

Option 1: 
Work I enjoy/part time job.  This could be seasonal work as a ski instructor or maybe as a raft guide.  Can't get any better than that as far as paid work goes.  I might have to settle for a lousy $10/hour job if the fun jobs don't pan out.  Maybe 20 hours per week doing something like retail or as a Subway cashier if it comes to that.  I would only need to earn enough to cover the rest of my bills, perhaps $800 - $900 per month or so.  My stress level would be tiny plus I would own the majority of my time. 

Option 2:
Between the Montgomery GI Bill and the Army College Fund in my contract, I am set to receive roughly $65,000 of college money.  I don't want to get into the details (because it doesn't matter), but basically I would choose the old option and would receive this amount over a three year period.  I'm not really interested in furthering my education... however, I am open to receiving ~$22,000 per year for taking 10 credit hours of underwater basket weaving at a cheap community college, then pocketing the rest.  Lasts three years tops.

Possibilities! hmm...


  1. First I'm glad you enjoy putting on the uniform and I thank you for your service to our Country! You are definetly in a good situation with a solid amount of dividends coming in every month indefinetly. They will only continue to grow from here. If only the fun jobs that we all enjoy the most gave enough hours and pay would it be a nice setup.

    Yet I am still thankful to at least be employed during these tough economic times. Nice to see how well you are doing and are still pretty young and will most likely own your own time in the not too distant future.

    1. Thanks DSI.

      I had been drinking a bit of bourbon when I originally wrote that post. After reading what I wrote, I went back and toned it down a notch.

      I was down on my luck in mid 20's, I know how it feels. The military has been great for me, but I promise you the sacrifices have been high. It's not a cupcake career, especially in the Army or the Marine Corp. Makes for good stories though.

  2. 10 credits a year and pocket the rest from the G.I. bill?
    Wow that'll give a nice boost to an investment account.

    Roger Nusbaum of RandomRoger often talks about redefining our idea of retirement. Most people see it as quit all jobs and enjoy 24 hours a day of your free time. He offers the notion to find a way to make money from your hobby.
    If you love dogs and would want to spend your time taking care of them then why not go get a low paying or minimum wage part time job at an animal shelter?
    $7 x 4 hours a day = $560 a month. The enjoyment of what you are doing with your time is the main motivator but $560 of income a month takes a nice load of your portfolio needs.

    1. I was embellishing a bit there, I think you need full time student status (10-12 credit hours per semester). There are all kinds of restrictions, but I'd simply choose some type of AA at a community college. No way it would cost $22K per year.

      I agree with redefining retirement, and am honestly pretty committed to the plan I laid out here. Of course I also want to have children, so this is not set in stone!

  3. Get yourself into a position where you don't have to work a retail job. With the hours they schedule you, it sometimes cost more in gas to run into work for 1 hour to fill in for a peak period or a couple hours when someone gets sick. My brother works retail, he has no idea his schedule from week to week and it has constant changes.

    1. Thanks for the heads up.

      I'm pretty used to getting called in when I'm off, working 24 hour shifts on my weekend, getting sunburned, not being allowed to wear winter hats when it's cold, not being able to call in sick (ever), having to file police reports on the weekend because my subordinate lost his ID card, tattoo restrictions, and lists of things outside parties would never understand. I don't understand it half the time to be honest.

      As a civilian, if I don't like my job I can quit and do something else. Right now I don't have that luxury.

      However there are awesome parts to the military as well!

  4. It's awesome to have choices. Buying freedom one dividend check at a time is great! No matter what you decide the answer is correct. I to want to enjoy more time doing the things I love instead of the things I have to do. That's what dividend growth investing is teaching me. Your portfolio is way ahead of mine. Yes, in 5 years semi-retirement looks like the answer for me....Good luck with whatever you decide to do.

  5. Interesting... lately I've been thinking about semi-retirement as well. I should clear $2000/month by the end of the year or so, which would make the whole idea really intriguing. I really do LOVE the idea of seasonal work... just taking on random jobs for the FUN of it, like snowboarding.

    Good luck!