Comments for My Money Design Designing Financial Freedom Sun, 05 Jul 2015 00:19:33 +0000 hourly 1 Comment on How to Retire By 55 (or Sooner) on a Salary of $50,000 or Less by MMD Sun, 05 Jul 2015 00:19:33 +0000 While I do strongly agree you need other income producing assets outside your job if you really want to accelerate your early retirement progress, I wouldn’t be so quick to write off increasing your 401k contributions as a viable strategy or even singular strategy.

You’ve got to remember: Everyone is just a little different in what works for them.

In other conversations I’ve had with people about how to retire early (age 55 or sooner), the very thought of starting a blog, writing an ebook, getting a rental home, or knowing which dividend stocks to invest in was as far-fetched of a task as asking them to fly to the moon. Those types of tools aren’t going to work for them. But when I asked them if they thought they could bump their 401k savings rate from 5 to 10 and perhaps 15%, it was something they felt was well within their grasp.

It all just depends on how bad you want financial freedom and what you feel you’re prepared to do.

No matter how you get there, I am glad to hear you’re doing something about your early retirement by trying to build up your blogging assets, P2P lending, and dividend income. I can totally identify with you in the joys of receiving dividend income – it’s really a great way to do absolutely nothing and make four figures per year!

Have you ever considered or looked into buying dividend stocks on a margin? I don’t use this strategy, but some of the more established dividend stock blogs I read in the past used to talk about it as a means of accelerating their portfolio growth.

Comment on How to Retire By 55 (or Sooner) on a Salary of $50,000 or Less by MMD Sat, 04 Jul 2015 23:59:58 +0000 Definitely. Social Security, whether its in one form or another, will exist in the future and pad the amount we need to save for our nest eggs. There’s no need for anyone to write it off from their retirement plan.

Comment on How to Retire By 55 (or Sooner) on a Salary of $50,000 or Less by MMD Sat, 04 Jul 2015 23:57:38 +0000 Well put!

Comment on How to Retire By 55 (or Sooner) on a Salary of $50,000 or Less by MMD Sat, 04 Jul 2015 23:56:40 +0000 You know, as ridiculous as a 90% savings rate sounds, I can totally see how it would be possible in some circumstances. Say you’re a young 23 year old professional who still lives at home with mom and dad. Many of my colleagues fit this bill when I first started working. If you’re really focused on early retirement, then there’s no reason a person in that situation couldn’t make it work in 10 years or less with an ultra aggressive savings rate. You just got to keep your expenses low and stick to it.

Comment on How to Retire By 55 (or Sooner) on a Salary of $50,000 or Less by MMD Sat, 04 Jul 2015 23:52:04 +0000 Interesting argument Eric … I’ll have to check your post out.

Normally every personal finance blogger in the world is ready to scream bloody-murder and fowl when you present a retirement plan when it doesn’t include some sort of inflation-indexing or compensation for future-value. You’re the first person I’ve ever heard of who has ever debated in the other direction! It never hurts to think outside of the box.

Comment on Niche Website Income Report 30 – $983 for May 2015 – The HOTH Platinum Package by MMD Sat, 04 Jul 2015 23:46:58 +0000 You’re welcome, Derek.

Comment on Niche Website Income Report 30 – $983 for May 2015 – The HOTH Platinum Package by MMD Sat, 04 Jul 2015 23:46:15 +0000 Thanks for keeping my affiliate link on record. I do appreciate it!

Welcome back to blogging. Having a previous career of flipping two sites isn’t bad! I find it to be quite an accomplishment when anyone builds something from nothing and then turns it over for a profit.

Be sure to check back to these Niche Website updates. These are the posts where I add in as much good stuff as I can find about blogging.

Comment on How to Retire By 55 (or Sooner) on a Salary of $50,000 or Less by ARB Sat, 04 Jul 2015 19:54:35 +0000 Haven’t been online for a few days. Came back to see this post and my shout out in the beginning. Holla!

And now after reading this, it looks like “early retirement” for me will be when I’m 75………………..Holla!

You are right about the conventional system being rigged, moreso nowadays than ever. I’d have to get a couple more promotions and increase my 401k savings rate just to be able to retire at 62 if I take the conventional route to retirement! Fortunately, I’m not planning to go the conventional route (I consider simply increasing your 401k contributions to be the conventional route).

Call me childish, but to me, 55 is not early retirement. 35-40 is early retirement. And even that’s a little too long to wait (a quick look at my blog would show anyone that waiting more than a couple years for retirement would require a level of endurance on my part that no human is capable of). And while saving is important, it can only get you so far (even contributing 6% to my 401k simply does not afford me enough per paycheck to live on and meet my financial goals, even after my recent promotion. Of course, I don’t make $50,000/year). At some point, you have to make more money, and not just from your job. Those passive income streams are what will make or break your early retirement strategy.

For me, my retirement vehicle is dividend growth investing. Rather than the traditional 4% safe withdrawal rate, the bulk of my investments are in income-generating blue chips with a history of rewarding shareholders with a growing share of the profits. And a small part of my overall portfolio is P2P lending, as you may have guessed from my recent guest post here. But mainly dividend investing, and ALL income producing assets. I’m not a fan of equity, capital gains, and other “paper wealth” forms of investing that require you to sell assets for money. How valuable was the asset if you had to get rid of it in order to see income (and only one single time), and what do you do when you need MORE money? How valuable is an asset that only makes a hallow promise to pay you in the future, or has a fluctuating value that only promises to pay you more money if you offload it RIGHT NOW (because it could bottom out a year from now). No, I’m only interested in assets that spit cash at me. If I have to get up and do something for my money, than I don’t like it.

But if dividend growth investing is my vehicle, then that vehicle needs fuel. And that vehicle is my current income. Dividend investing requires you to put in a lot of money and wait a number of years to get a good income, and so you need to make more money to invest. Right now I’m filling up using a cheap, low quality fuel called a paycheck. But I prefer high quality premium fuel–passive income rather than active income–fueling that dividend investing vehicle. And so I’m looking to build up my blog income–and start developing niche sites–that will supplement my paycheck funding my dividend portfolio.

With that, I’m also looking to combine that with something else: The backdoor Roth IRA conversion you spoke about! By turning my 401k over to a Traditional IRA and then slowly converting THAT into a Roth IRA (paying taxes as I go), I’ll be able to access my money before 59.5. That will make up for any shortcomings in my dividend growth investing. That information alone has made it possible for me to potentially retire a couple years earlier than I otherwise would have.

I’m glad you took me up on the “challenge” I made to you when I reviewed your book, MMD! Though I may have taken away a different message from the one you were trying to give us. For me, early retirement depends on one’s ability to build up streams of passive income and turn them into an income-generating machine. Simply increasing your 401k contributions, working more hours, and all the other conventional approaches won’t get you out of the rat race earlier than 55 years old (though that’s not to say that they are useless wastes of time; they can very much contribute to an early retirement strategy, but they can’t BE the strategy).

Thanks for the shout out and for taking up the challenge of outlining an early retirement strategy for those who aren’t making a ton of money.

ARB–Angry Retail Banker