Book Review – The Millionaire Next Door by Tom Stanley and William Danko

I have a confession to make. I love this book. I really love this book. I have it in soft cover, hardback, and as a book-on-CD. I always go back and re-read/re-listen to it once a year. If I would say I aspire to anything, it would be a representative of the people is this wonderful tome. I think everyone should read it, and the world would be a better place if more people followed the lessons in it, instead of just consuming like crazy.

I picked the softcover of this up in 1999 on the remainder shelf of a Border’s bookstore. Read through it while Mrs. 39 months and I enjoy coffee at their snack area. Couldn’t stop reading it, and eventually bought it before we left. It truly was the “kick in the pants” that I needed to start getting serious about living frugally and saving money. Before that, I was only doing the minimal (only put the matching $ in my 401K, no IRA, etc.). After going through this, my savings went into overdrive (see my April 2017 post “A little context” for my timeline).

Written in 1996, the book covers information on Millionaires that the two PhD’s have collected over the previous 20 years. When it first came out, the data surprised a tremendous number of people, and dramatically altered how many companies marketed to the wealthy. For the most part, the lessons learned here, and the millionaires (and they’re habits) remain valid today.

The typical millionaire, according to their research:

  • 57 years old, married, with 3 kids.
  • About 2/3 of those working are self-employed, in “dull-normal” businesses (contractors, pest controllers, rice farmers, etc.)
  • Median household net worth around $1.6M
  • About half have occupied the same house for over 20 years
  • Live below their means (inexpensive suites, drive older cars, etc.)
  • Invest nearly 20 percent of household realized income, on average

The book also gives the reader a “goalpost” where they can see how they measure up. Take your annual realized income, multiply by your age, and divide by 10 (example, $55K a year for you and your wife, 34 years old = $55,000 * 34 / 10 = your net worth should be $187,000 or more. To be considered “wealthy” you should be twice that (i.e. $374,000)

The book then breaks down the seven factors that they believe contribute to individuals being able to accumulate over a million dollars in their lifetimes. Their chapters go into details on each of these seven factors.

  1. They live well below their means (Frugal, Frugal, Frugal!)
  2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth
  3. The believe that financial independence is more important than displaying high social status (they don’t try to keep up with the joneses)
  4. Their parents did not provide them economic outpatient care (i.e. no money from Mom & Dad, or major inheritance)
  5. Their adult children are economically self-sufficient
  6. They are proficient in targeting market opportunities
  7. The chose the right occupation

The biggest takeaway I got from the book was the importance of being frugal. The book classifies it in football terms. If someone makes a lot of money at their job, they play good “offense”. But if they spend it all, they are playing lousy “defense.” As it is often said in sports, defense wins championships – or frugality makes you a Millionaire Next Door.

I would rate it 5 out of 5, because I just love this book.

 

Kevin

Real Estate  – starting to do further research

I have always been interested in real estate, and real estate investing. I’ve got a ton of books on houses, remodeling, layouts, etc. As an engineer, I have been fascinated by calculating costs (and remodeling costs), drawing things up, and imagining how it could be built or altered.

I’ve “puttered” some around my house, built a deck (twice), did a bathroom remodel and a kitchen remodel, and also did some work with Habitat for Humanity. Still, I have the “bug” and have it bad. Plenty of time spent online and YouTube looking at videos and shows. Probably could have used the time more productively.

Unfortunately, the one chance I’ve had in my life to really do a remodel, back in 2006, was when we added a second story to our house (made our rancher a cape cod). We worked with an architect, hired a builder, set up our funding, and got everything ready. Then my job came to me and asked me to do them a big favor, and help run a warehouse out in KY for 3-4 months because it was having trouble. I did it, coming back every 2-3 weeks for the weekend. I got to see the work in increments, instead of being able to “live it” every day. I still regret this – but I was a dedicated employee, working for a good company. Ah well.

Now we are closing in on financial independence, and we have a sufficient amount of funds to the side that I could consider getting involved in real estate. However, as an engineer, I now have to start digging into the numbers again, and do my reading and research. I know, I’m boring at times, but I am a planner, so that is the way it goes.

Luckily for me, there is a local real estate club in my area, one that meets regularly and has spin off groups for each county in my state, and for new investors. I took the opportunity to attend their monthly main event at a local hotel last night, and see what they had to offer. They let you attend the first one for free, but then charge non-members a fee. Membership runs around $150/yr.

The group has a “meet and greet” from 6pm – 7pm, where there are snacks, vendors (insurance, banks, contractors, etc.) and an opportunity to talk to similar folks. At 7pm they do announcements (upcoming events, things members get like discounts, folks you can talk to, etc.) then the speaker goes for another 45 minutes. Depending on the speaker, they can be quite informative.

I think it’s a potential source of real estate knowledge. I will probably go on a month-to-month basis to see if its worthwhile. Depending on that, I’ll sink in for an annual membership. My timeline is to look at a potential flip in 2018, so we will see how the market goes.

 

How are your real estate experiences going?

Mr. 39 months.

Stick-to-it-ism

Well, my investments, like many folks, have nose-dived a bit since the start of the month. While the S&P 500, and most of my index funds have stayed even, my dividend portfolios are down about 2% so far. Remember, this is my “fun money” accounts where I tried to purchase bonds, stocks and REITs to generate maximum dividends. It seems like I have been shoveling money into these all year, only to have the market eat the money up by the time the month ends.

Now granted, 50% of these accounts are in bonds, and the rising interest rate environment has not done me a lot of favors here. In addition, the rising interest rates and the retail meltdown have punished REITs in a major way (or at least some REITs). Still, even though I have some explanation, it still makes me unhappy.

Yet I intend to keep with the plan I laid out, investing in dividend paying assets, and using my monthly funds and quarterly dividends to reinvest in the assets necessary to reach a 50% bonds/25% REITs/25% dividend stocks setup.

That is why I chose the title, stick-to-it-ism. There are always times in your push towards financial independence when your direction appears to be going nowhere (or potentially backward). Folks in 2007 and 2008 were double-paying their mortgage down on their house, only to see its value crash down and lose all the value that they had paid into it. Many home prices are only now getting back to where they were, ten years later. Some aren’t even there.

Still, by paying down the mortgage, getting rid of any remaining debt, and continuing to save, most FIRE folks find themselves in better shape now than they were before the crash nine years ago. That is because the concepts and principles we follow are timeless, and in the long run, they are bound to place us in a better position. We just have to have the “stick-to-it attitude” that lets us keep working on it, even during the times it doesn’t seem to help.

So how about you? What have you done to “stay on target” as you move towards independence?

 

Mr. 39 months

Book review – The Total Money Makeover by Dave Ramsey

This classic book, written in 2003 and then updated after the crash of 2008/2009, often gets disrespected amongst the FIRE community. Many note that the math doesn’t exactly add up on his investment advice, or that his debt snowball isn’t the most efficient way to get rid of debt (see below). My opinion is that the book isn’t written for folks who are in the midst of following the FIRE philosophy; instead, it is written for those who haven’t embraced it yet, and it shows them why many of the tenants we all believe in (eliminate debt, invest, budget, plan, etc.) will help pull folks out of a money spiral and set them on the path to a debt-free, happy life.

Throughout the book are testimonials and stories of various people who started out in bad shape, but are using Dave’s steps to build a better life. Chances are you will see someone who is similar in one of them.

The first chapter of the book details Dave’s personal journey. Many folks don’t know that he and his family went bankrupt about 30 years ago. While he doesn’t go into too many details, it appears he got overextended and couldn’t pay his bills. The timing of it (late 80’s) makes me think it was due to real estate investing – changes in the laws in the late 80’s killed a lot of real estate investors. He does take responsibility for screwing it all up, and having to dig himself out and learn some painful lessons. He relates that he felt he had let his wife and family down, and wasn’t doing his job as a provider.

The next four chapters, he uses to explode a lot of money “myths,” and many of them have been shared on the FIRE blogs for years:

  • College graduates graduating not just with student loan, but with credit card debt
  • Used cars paid for in cash vs. new cars paid with a car loan
  • Get rich quick schemes
  • Cash value life insurance vs Term
  • Keeping up with the Joneses

He then spends the next seven chapters going through his 7-point plan for digging yourself out of the hole and creating a successful financial life.

  1. Create a $1,000 emergency fund. Folks often get into trouble because they don’t have ready cash to deal with life’s emergencys (dryer breaks, car repair, etc.). Dave says do whatever you need to (sell items, 2nd job, etc.) and build up a $1,000 emergency fund. If you have to use it for an emergency (sale at the shoe store is not an emergency) then stop subsequent steps till you rebuild the emergency fund
  2. Get your credit paid off
    1. Cut up all your credit cards (or if you have to have one, freeze it in a block of ice so it will take a while to get it).
    2. Now that you won’t be adding to your debts, figure out all your debt, and rank order them in quantity owed, from small to large. Example would be $1,800 in credit cards, $9,000 for car loan, $30,000 in student loan debt, and $150,000 for home.
    3. Figure out what the minimal payments are for all of them, and make sure you pay the minimum for all of them regularly from now on. If necessary, sell items (car, exercise equipment, etc.) or take a 2nd job to help with this
    4. Now take any excess money and put all of it to paying down your smallest bill. Not the one with the highest interest rate, but the smallest amount owed. Note: this is where many FIRE folks have issue with Dave. If you look at the numbers, the smarter play is to pay down the one with the highest interest rate. Psychologically, Dave wants people to get early wins, so they pay off the smaller ones first, and start eliminating debt accounts as soon as possible.
    5. Once you get rid of a debt account (i.e. the first credit card) take that money and immediately apply it to the next debt, along with that debt’s minimum payment. This starts Dave’s “Debt Snowball” where you keep feeding the money into each account as you close them up. This accelerates over time and gets the debt paid off. Again, this has shown to be successful with normal folks, though FIRE people may not choose to follow, because they are already paying off debts.
  3. Finish the emergency Fund. As you get your debts paid off, you eventually may end up with only the home loan left. Rather than going whole hog paying that down, Dave suggests you build your emergency fund up higher with the money you used to pay down your credit card, car and other loan payments. He typically recommends 3-6 months in the fund, in something that is fairly easy to liquidate (savings account, short term notes/bonds, etc.)
  4. Maximize retirement spending. Now with debt eliminated (except for home) and emergency fund fully funded, you want to maximize any retirement spending you have. Max out the 401K, and any IRA you can (in US). Dave suggestion, like so many others, is a minimum of 15 percent should go into saving for retirement, and he does emphasize  Index funds. Again, many FIRE folks are saving significantly more than that (30%, 45%, 55%, etc.). Again, the book is written more for folks just starting on the journey.
  5. College funding for the kids. An important item of note here. Make sure you are fully funding your own retirement before you begin saving for kid’s college. If worse comes to worse, the kids can pay for their own, but you need to save for retirement now. Dave isn’t a fan of student loans, he wants folks to pay cash for college, and/or have the kids work jobs to pay for it. He hates having folks graduate with a mountain of debt hanging over their heads
  6. Pay off the home mortgage: If everything else is funded sufficiently, then put extra money towards the home mortgage to pay that off and become truly debt free. One thing most FIRE folks can agree with Dave Ramsey on is that, when you are debt free, it is a truly liberating experience! It also dramatically increases your chances of retiring early.
  7. Build wealth like crazy: Here is the final step on the journey, and the one most in line with FIRE folks. If you have no debt, are fully funding and investing for retirement, then push additional funds into investments, build them up, and enjoy life. Which is what many of us are either doing or planning to do.

While I don’t think this book is good for folks who are already on their financial independence journey, I do believe its good for folks who are just starting, or as a gift from one of us to explain to others how to get started on their own move towards independence.

I would rate it 3.5 out of 5, mostly because it doesn’t apply as much to FIRE folks.

 

Kevin

Six Month review of my investment strategy

I typically look at my investments every 3 months to see how they are doing. I also take the opportunity at the six-month point to rebalance if things have gotten way out of whack. This lets me get a good idea of how I am progressing and make adjustments. I don’t like to rebalance more than that – I think it would drive you nuts to do it more frequently.

If you remember my investment strategy, Mrs. 39 months and I each have an IRA (money we transferred from our company 401Ks when we left them) and a Roth IRA (which we’ve been investing in fairly regularly since 2001). For each of these, we have it split like this:

  • Bonds: 30% (was 20%, but we bumped it up at the start of 2017, as we are closing in on retirement)
  • S&P500 Index: 17.5%
  •  REIT Index: 17.5%
  • International Index : 17.5%
  • US small cap: 17.5%

For these, we are up about 6.6% total (capital gains + dividends), with International, Small Cap and S&P500 leading the way. REITs and bonds didn’t do very well (rising interest rates, anyone?). I will need to do a little rebalancing, but not much.

For my 401K and deferred account, I don’t have a REIT option, so it’s split up as

  • Bonds: 30%
  • S&P500 Index: 23.3%
  • International Index : 23.3%
  • US small cap: 23.3%

For these, we are up about 9.2% total (capital gains + dividends), with International, Small Cap and S&P500 leading the way. With only bonds not doing well, the 401K did better. However, I will also have to do some rebalancing.

Finally, I have two brokerage accounts that I have setup with Bond index funds and my own stock and REIT picks. I tried to set them up to maximize dividends, as an attempt to research how I might invest to get the most passive income out (see earlier post on this).

  • Pop’s Inherited IRA (50% bonds/25% stocks/25% REITs): 3.6% gain, mostly from dividends
  • Personal investments (41% REITs/29% bonds/30% stocks): 2.6% gain, again mostly from dividends

I put in $1,376 into personal investments each month, and I try to use that to get it to the 50/25/25 level of the inherited IRA. Still working to get there.

For rebalancing purposes, the mutual fund and 401K companies (Vanguard, TRowePrice) make it fairly easy to sell off funds and reinvest in others. I will just sell enough and buy enough to get somewhat close to the split that I want.

Overall, I am fairly happy with what I’ve got so far. I’m coming in around 5.6% gain at the mid-year point, so baring any major disasters, it should be a good year!

I hope your midway points are equally good!

 

Mr. 39 Months

 

Updated personal files/disaster files

It is halfway through the year, and one of the things I wanted to work on was my personal files, or as ESI money often refers to them as, my Disaster files (https://esimoney.com/category/estate-planning/). We all keep records, either online or in paper form in a file cabinet. The key is to keep them organized in such a way that you (or your significant other) can quickly get the information that you need.

Typically, folks deal with these things when they first get the “setting up” bug, then let them lie for a significant period of time (sometimes years). I am very guilty of this, and the last time I updated them was back in 2013.

So as part of my mid-year review (and with the opportunity for a 4-day weekend for July 4th in the US), I took the time to dig in and see what I needed to work on. For everyone’s help, I’ve attached two pdf’s to this that I used when I was first setting up back in the 90s.

  • Something written for military personnel to show a file setup situation, by Lt. Cmdr. T. Connors
  • Something provided by USAA (the military insurance Co) for organizing records.

I hope they help everyone.

After going through, here were the deficiencies/tasks that I see I need to work on in the next 30 days to get myself back up to speed.

No Description
1 Update Master List from 2013
2 Send Master list to Mrs. 39 months
3 Price out updating wills – don’t need to update, no change from 2003
4 Redo filing cabinet with Master List & Disaster file #1
5 Letter of Last Instructions
6 Household budget folder (budget goals, income statement, balance sheet, income/expense forecasts)
7 Housing Information (Title, insurance, receipts for work, property taxes)
8 Online passwords
9 Location of keys to safe deposit box
10 Credit records: Resolution of past debts (auto, home)
11 latest credit report
12 Home Insurance Policy
13 Net Worth’s 2009 to present
14 Annual updates for Jan 1, 2017 into investments
15 Updated list of personal property
16 Pictures of personal property
17 Investments (list of accounts, goal planning, annual balance sheet)
18 Taxes: Tax records for previous year, current year documents
19 Guarantees & warranties (appliances, cars, etc.)
20 Personal background info (Education, personal history, resume)
21 Credit: Resolution papers of past debts, credit card names, numbers & 1-800 number
22 Auto Info: Insurance coverage, policies, auto registration, repair/maintenance records
23 Health insurance (Booklet from work, health history, medications, etc.)
24 Life Insurance (Insurance policies, etc.)
25 Safe Deposit: Title to auto, DD214, marriage certificate, letter of last instructions, copy of will, personal property inventory, zip disk with photos of personal property, passport)
26 Instruction letter (where to find everything, computer passwords, etc.)
27 Setup dates for regular updates to the files (so I never have to do this again)

Ouch. I have a lot of work ahead of me. Still, it will be good to have this done, especially as I progress towards financial independence.

Good luck with your mundane tasks.

Setting up your personal record file

Master List

Mr. 39 months

Mid Year Update

July 2017

Well, its early July, halfway through the year, and a perfect time to compare my goals for 2017 to what I’ve actually done, both financial and personal/other. A lot of folks don’t like to do this sort of thing, but as an engineer and amateur financial junky, I actually love taking a look at these sort of things. Even when I’ve had a bad quarter (or bad year) I like to look at the numbers and see what my situation is, and the future outlook.

Ok, I’m a numbers geek.

So how am I doing in comparison to my goals for 2017 (the ones that I listed on April 30th)?

My Goals for 2017 (some financial, some not):

  1. Put in $33,000 in tax-advantaged accounts throughout the year. Grade A. I have put in $20,200 so far this year (including some bonus money) and am on track to hit my goal by December.
  2. Put in all bonuses, gifts, and our previous house payments into regular accounts (estimate of $26,000 year): Grade A. I have put in $18,250 so far this year, and I am on track to hit my goal by December.
  3. Increase dividend income from our investments to $18,000/year (and reinvest them): Grade C. I have $8,877 in dividends so far this year. Going to be touch and go to see if I hit this.
  4. Get Passive income up to 65% of living expenses: Grade D. I am currently at 61.9%. To hit the goal I have to hope for some major dividend payouts in December.  We do continue to keep our living expenses low, though we did have to spend some money on home repairs which bumped it up a bit.
  5. Beat at 6% growth rate on our net worth: Grade A. I am at 6.2% so far, with only half the year gone by. Even if the markets come back with 0 growth for the rest of the year, I’m good.
  6. Begin attending local real estate investment association meetings, to learn about and begin preparing for real estate investing in 2018: Grade n/a. Plan was to start in July, and I have the date marked in my calendar. Not sure when I will start investing in it, because all you hear right now is that the market is too hot. We will see. My goal here is to start studying and learning.
  7. Start a blog (i.e. this one). Grade A. Done
  8. Fitness: Increase weight lifted by 10% over the year. Grade D. Currently appear to have hit a wall, as I haven’t gone up hardly any for the last 3 months. Need to work on this.
  9. Average 3 hours of cardio each week. Grade D. Currently only averaging a little over 1.
  10. Go on an international trip. Grade n/a. Wanted to do something bigger this year, but Mrs. 39 months job situation killed chances for larger trip. Plan to go to Quebec or Montreal in October.
  11. Visit one national park. Grade n/a. Again, job situation hurt this. Have never been to Ellis Island, so may try for this.

So in looking at this, I think I am tracking well for the first half of the year. Still got some work to do (especially in terms of personal fitness).

How were your first six months of 2017?

 

Mr. 39 months

Mr. 39 Months “Drawdown” plan

Draw Down Plan

Several FIRE-related blogs (see below) have started a blog chain on how they are/plan to draw down their savings over their retirement. There are an infinite number of ways to do this, and a lot of its based on your own particular issues/resources.

It’s a topic that isn’t covered very much, and when I stumbled onto it today, I read just about every link I could.

I thought I’d join the chain and list my plan.

Expected resources at time of retirement (July 2020)

  • Savings: $132K
  • Deferred Income from work: $179K**
  • Brokerage Account: $94K
  • Inherited IRA from my father: $137K
  • 401K/IRAs: $546K
  • Roth IRAs: $257K
  • Total: $1,345K liquid assets
  • House: $298K (not depending on it unless absolutely necessary, i.e. no reverse mortgage)

** My company allows you to “defer” income from work (i.e. don’t get paid it) until a later date, up to a certain percentage. Once you leave the company, you can take it as a lump sum or as regular monthly payments over a 5 year span. You pay taxes on it as you are paid it. In the meantime, you can invest it just like a 401K

The plan

Plan is to take out $72,000 a year/$6,000 a month. We will draw this back the equivalent when we start taking social security in 2024 (Mrs. 39 months) and 2031 (Mr. 39 months). I’ve used the FireCalc to determine that, even without social security, we have over a 90% chance to go till 95, so Social Security is a bonus here.

  1. Year 0: Setup savings as base of 2X annual salary. Plus that up at the beginning of each year from investment accounts.
  2. Year 1-3: Use Deferred income to pay for withdrawals till exhausted. Note that I still have to take a portion of my father’s inherited IRA ($5K a year)
  3. Year 4-5:  Draw down brokerage account to 0. It is here that we could start getting Social Security for Mrs. 39 months
  4. Year 6-8: Draw down my father’s IRA to 0 while continuing (if possible) to get SS for Mrs. 39 months
  5. Year 9 – 25: Draw down 401K/IRA to 0. It is here that we would finally start taking Mr. 39 months social security
  6. Year 26+: Still plenty of money left over in the Roth IRA to last us, plus we have the 2X money in savings and the house, so it should enable us to be OK.

Overall, we could retire right now if I had confidence that Social Security (or at least 75% of Social Security ) would be there for us. I just don’t know, so I intend to work till July 2020 (Independence day!) to make sure we will be OK no matter what.

More Withdrawal Strategies

Here are more retirement strategies from the PF blogger community. Some of these are much more detailed than mine. Check them out!

Anchor: Physician On Fire: Our Drawdown Plan in Early Retirement
Link 1: The Retirement Manifesto: Our Retirement Investment Drawdown Strategy
Link 2: OthalaFehu: Retirement Master Plan
Link 3: Plan.Invest.Escape: Drawdown vs. Wealth Preservation in Early Retirement
Link 4: Freedom Is Groovy: The Groovy Drawdown Strategy
Link 5: The Green Swan: The Nastiest, Hardest Problem In Finance: Decumulation
Link 6: My Curiosity Lab: Show Me The Money: My Retirement Drawdown Plan
Link 7: Cracking Retirement: Our Drawdown Strategy
Link 8: The Financial Journeyman: Early Retirement Portfolio & Plan

Link 9: Retire by 40: Our Unusual Early Retirement Withdrawal Strategy (http://retireby40.org/unusual-early-retirement-withdrawal-strategy/)

 

 

Mr. 39 months

You’ve got to have hobbies 2

Sorry for the lack of postings, but I’ve spent the last week backpacking the Appalachian Trail (AT) in Shenandoah National Park, Virginia. In seven days, a group of six of us hiked 69 miles southbound on the AT. The group had a wide variety of ages and experience – from 31 to 61, from only having hiked before (no backpacking) to 14+ years of backpacking experience.

 

For those of you unfamiliar with the AT, it was originally created back in the 1920s and 1930s as a series of trails and small wooden 3-sided shelters (capable of holding 7-14 people) for people to be able to use on the weekends to get away to nature, get to the outdoors. Shortly after it was created, someone came up with the idea of hiking the series of trails in some connected fashion, and thus was born the idea of “through hiking” the AT.

 

The AT stretches from Georgia to Maine, running along the Appalachian Mountain chain for over 2,100 miles. Backpacking its length has become a sort of “rite of passage” for some people, where folks who are facing significant changes in their life (graduations from school, going out into the work world, retirement, job loss, death of a spouse or loved one, etc.) go to travel alone and experience nature. Many folks have called it “America’s Camino” (http://www.nationalgeographicexpeditions.com/expeditions/spain-walking-el-camino/detail).

 

Another way to through hike it, which I’ve chosen, is to section hike it, where you hike portions of the trail on the weekends and for weeks at a time, over a period of time. I’ve spent the last 14 years doing parts of the trail, and have racked up almost 800 miles so far. It’s a good way to experience the trail, without committing to the 4-6 months that it would take to through hike it.

 

I’ve said before that you have to have something to do (hobbies, part-time work, volunteer work, etc.) to keep yourself occupied once you “retire” or you will go nuts with boredom. I have woodworking, backpacking and some other interests. Whatever you want to spend time on, go for it. It’s one of the primary reasons to become financially independent – to get your time back.

 

Have fun out there.

 

Mr. 39 months

 

Book Review – Work Less, Live More by Bob Clyatt

Bob Clyatt wrote this book in 2007 to detail his journey through early retirement (at age 42) back to semi-retirement. His definition of “semi-retirement” seems to be in line with a lot of FIRE writers – a part time or temp position that allows you to earn additional hours performing work that you generally enjoy. He is another individual who achieved financial independence, but after retiring early, he found that his worry about money and his desires to stay involved led him back to the work world – but only partially.

 

The books starts out with working on the “whys” of early/semi-retirement (stale work, new ideas, etc.) and then goes into how to prepare for it. He covers some of the difficult steps of moving from work to semi-retirement. A significant portion of the book is dedicated to setting your spending plan and living beneath your means (determining annual spending, retiring outside the US, etc.)

 

He then goes into investing strategies for the semi-retired, including portfolio theory, rational investing and rebalancing. He provides concrete examples of various portfolios, based on the individuals he interviewed. He also discusses the 4% safe withdrawal rate, and provides backup for the data and results.

 

Finally, he goes through other aspects of early/semi-retirement. He talks about the advantages of part-time/temp work, volunteer work, health care, etc. In the end, he urges everyone to take simple steps to make their life well-lived.

 

One of the best parts of the books  are the numerous resources, links and web pages  for the various topics covered. It is here where the  book really proves its value, and it becomes a good read for those of us seeking financial independence and an early or semi-retirement.

Rating 4 stars out of 5