Well I’m Beginning To See The Light

I'm beginning to see the light

My retirement goal is still 15 years away. That may seem like a long time if you’re young. But ask any parent of teenagers and they’ll tell you it goes by in a flash.

Retirement is closing in on me. I think about it with urgency.

Some people work very hard, but still they never get it right. Well, I’m beginning to see the light. – Lou Reed, The Velvet Underground

I Wanna Tell You, Ooh-Oh-Oh!

Many readers have asked me what my target investment portfolio amount is for retirement. Reasonable question. If I expect to spend X annually in retirement, I should aim to have something like (X/target average yield) in investments.

For example, if my yearly expenses are expected to be $60,000 at age 55, and my target yield on capital investments is 4%, I’d need $1.5 million worth of investment assets to cover my expenses. Of course, this is a simplistic way to look at it. The actual calculation takes into account many variables.

I have an elaborate spreadsheet projecting total investable assets in the future and the income generate. It’s a work in progress and needs to be refined, but I can somewhat guess what my assets will be worth in 2031, within a healthy margin of interest. Each year that passes, the projection becomes more accurate.

The bigger difficulty is calculating our future expenses. I can estimate most expenses using an inflation rate and come up with some numbers. Line items like diaper expenses will dissolve in a few years. Things like gas, food, kids activities, and entertainment will fluctuate as we and our kids age. But not too wildly.

If we never pay extra on our mortgage, and we don’t move, that expense is easy to estimate too. Won’t change much aside from the escrow for insurance and taxes. However, even though we have a low mortgage rate of 3.875%, we still do not intend to have a mortgage when I retire. With 27 years left on the loan, we’ll need to start making early payments now, pay it off in a lump sum in the future, or do some combination of the two. Including the escrow, our total monthly home payment is somewhere around 30% of my take home pay.

Having a mortgage payment or not in retirement significantly affects future monthly expenses. If we don’t solidify our plans to keep the mortgage or not, estimating total investable assets needed at age 55 is a tough challenge.

While I intend to pay off the mortgage early, I haven’t fully committed to it yet. It’s a future financial promise to myself. Who’s made one of those before? At some point soon I need to commit to it or start planning for the alternative. I generally accept that keeping a mortgage for as long as possible is mathematically superior over the long term. But there’s comfort in being mortgage free.

Hey Now Now Baby

Mrs. RBD gave birth to a healthy and beautiful baby girl this summer. One of the many joyful gifts kids bring to parents is clarity.

Before meeting Mrs. RBD, my future was uncertain from a financial planning standpoint. I knew I wanted to start a family, but all the dates and details were unknown. How could I plan to save for a kid’s college education without even having a wife yet?

Now, here we are with three kids. Talk about clarity. It’s clear our family room will never be clean again. Kids cannonball into your life. It’s hard to believe how much free time I wasted before I became a Dad.

At a group work lunch recently, one of my bosses casually asked me if we were done having kids. I responded rather snidely with something like “having kids is one of the most important and intimate decisions a married couple will ever make… and here you are bringing it up at our work lunch”. FYI, complicated life-changing decisions of a married couple are not your business even though you might be curious.

Side note, here’s three questions you should avoid asking a married couple in their 30’s:

  • When are you having kids? 
  • How many kids do you want?
  • Were you trying to get pregnant?

If they want to share, they’ll bring it up! Back to money… that all said, three is a nice number. If we stop here, the big retirement picture really comes into focus. Namely, the cost of three in-state college educations is relatively predictable. Considering college expenditures is the greatest risk to my retirement goal, I want as much clarity on that cost as possible.

Our day to day living costs are expected to grow over the next decade, especially as the kids age and devour more than just cereal and apple sauce. Then sports, camps, and family travel of course – raising a family has significant costs.

All of this factors into some big strategic decisions I’ll be making in the next few years. Such as, should I sell my condo rental or keep renting it? Is it smart to utilize home equity to invest? Do I need this stinkin’ job or should I shop around for a job I’d like better? Should I start making extra mortgage payments now or wait and pay a lump sum in fifteen years?

When the baby-making is complete, most of the components are in place and the spreadsheet can be fine tuned. The above questions are easier to answer because a big chunk of the calculation input is finalized.

Wine in the Mornin’ and Some Breakfast at Night

Last week’s post marked the two year anniversary of this blog. When I started writing this thing, I didn’t know where it would take me. I feared I might quit right away. Turns out it became something worthwhile.

This past weekend my blog actually took me somewhere, to Charlotte, NC to attend the FinCon Expo. FinCon is an annual conference for bloggers and other media in the personal finance space, “where money and media meet”. Since I skipped last year, it was easier to convince Mrs. RBD that it was a good idea this time around. This was my first time away from the kids. I missed them, big time.

My main goal for attending was to meet up with other bloggers to learn about the trade and make some contacts. From a broader perspective, after two years of writing and maintaining this site, I needed some help determining where to take this blog in the future.

During the days there were influential speakers, informational breakout sessions, opportunities to troll the booths for swag (I got a free selfie stick), and endless conversations with other bloggers. FinCon also has its share of sponsored events by companies wanting bloggers to write about and endorse their products.

In the last twelve years of my current job, I haven’t traveled once. No need to, my customer is in D.C. I’m content with that as a Dad with young kids. Even as someone who loves to travel, work travel just doesn’t appeal to me. Anyone that does it frequently says it gets old fast.

Nonetheless, I was excited for this conference as a break from being home and from my normal work environment. Instead of being around my retirement-aged coworkers, I interacted with all kinds of enthusiastic bloggers, authors, internet entrepreneurs, and established companies and startups in the personal finance space.

So much to learn and so many people to meet. So many new ideas and inspiration. That was the theme of the conference for me.

How Does it Feel to be Loved?

About a month ago, I was stunned to learn that I was a finalist for the 6th Annual Plutus Awards at FinCon. Fellow “Best Retirement-Focused Personal Finance Blog sponsored by Stocks For the Week” finalists Our Next Life informed me in the comments section of one of my recent posts. Neither of us ultimately won, but during the conference I found out that we were selected from among many, many nominees.

It was quite an honor to be recognized for all the work I’ve put into this blog. Thanks to the Plutus Award panelists for this distinction, it’s given me a significant sense of validation.

Searching for clarity and direction of this blog was a goal going into the conference. Coming out on the other end of it, I think I’ve found some.

What does all this mean for the Retire Before Dad blog? Well, I’m only beginning to see the light and where I’m going. But I expect you’ll be seeing some changes, especially regarding the look and feel of my website, and perhaps in the frequency of posting and topics of discussion.

The most popular posts have always been the ones with broader reach. Dividend stock investing is a fairly small subset of all potential readers. As much as that will remain a part of my retirement plan, I want to think bigger from a writer’s perspective.

Instead of hurrying to write a new post every week, I may cut back some so that I can write longer and more meaningful posts. These will appeal to a broader readership, focusing on my financial situations and the tools I use, and will be posted when they are ready to be posted. Writing one great post will impact more people than lots of good posts. Income updates may eventually become less frequent, and overall topics will narrow. As much as I love the investing blog community, there’s a lot of noise. I want to try to reach others, including non-investors, who need inspiration and a sympathetic voice.

The bones of this site also deserve some serious maintenance. By hammering out articles every week, some of the technical aspects of the blog have been forgotten. I need to spend some time updating old posts, interlinking, retagging, deleting, and redesigning the interface. This will all be meant to improve the user experience over the coming years. But it takes time, and I’m solo here.

What I want is to be more thoughtful and deliberate with the path of this blog. That will take more behind the scenes work up front, but will lead to better content and more focused and in-depth posts in the future. Don’t think I’m backing off or slowing down. I’m excited for where this is going.

Check out the video below to hear the song Beginning to See the Light by the Velvet Underground, accompanied by the visuals of the 1968 movie The Color of Pomegranates. YouTube has restricted direct embedding of this video, but you can easily click through to see it. 

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26 Responses to Well I’m Beginning To See The Light

  1. Income Surfer September 24, 2015 at 7:31 am #

    Glad you enjoyed FinCon and we nominated for an award buddy. A couple of my friends said they enjoyed meeting you for the first time. You, and your wife, are more brazen than me. I don’t want to be outnumbered by kiddos…..two will be plenty.

    For the record, I really enjoy your blog’s content mix. I hope the rest of your week turns out well
    -Bryan

    • Retire Before Dad September 24, 2015 at 7:57 am #

      IS,
      I know one of them. Spent a lot of time with him. Ha, three can be tough, although the third is kind of just along for the ride now. The other two take up a lot of energy. My wife was a hero being at home alone with all three this weekend. Thanks, I think people do like a mix. Finance isn’t a one way street, there’s a lot of components.
      -RBD

  2. Chad September 24, 2015 at 9:03 am #

    Retire Before Dad,
    I enjoyed hanging out at FinCon. I am looking forward to following your blog, seeing the changes you make, and being part of the awesome community you are building.

    I hear you on those questions not to ask 30-somehtings with kids. It seems like we get asked daily if 2 is enough in our world. We tell them that when we are traveling around the world each parent can grab one kid before they run in front of a bus, jump off a cliff, or something other misadventure;) seems to finish the conversation.

    I look forward to some posts about deciding if and how to keep your rental condo. We can have some good real estate discussions.

    Have a great week.

    • Retire Before Dad September 24, 2015 at 9:11 am #

      CC,
      Likewise, really enjoyed hanging out this past weekend. Thanks for stopping by and commenting.

      I’m impressed you’ve already taking the kids traveling. We really want to eventually, but we want them all to be potty trained before going overseas. Flying to see relatives will be challenge enough.

      I may pick your brain a bit about real estate. As I wrote about, still not sure what to do with the condo. It wasn’t a good investment from the start. But over the long term, it is helping me to build wealth. I’m also now considering a rent increase.
      -RBD

      • Chad Carson September 24, 2015 at 11:26 am #

        I plan to write a couple posts about our travel with 2 and 4 year-olds. We went to Mexico for 2.5 weeks earlier this year and it had dramatic highs and lows.

        I specifically remember one low moment when my 4-year old blew up as we tried to put on sun screen at a playground, and I had to carry her off under my arm as she screamed bloody-murder, kicked, and spit. The stunned local moms must have thought I was kidnapping her:) Yeah, it was bad.

        They sell diapers anywhere, so the potty training hasn’t been as big of an obstacle.

        I forgot to say congrats on the Plutus nomination. Obviously well deserved!

        • Retire Before Dad September 24, 2015 at 1:54 pm #

          CC,
          Those kinds of blowups are coming inside our house, but for some reason in public they are rare, thankfully. What is it about kids and sunscreen? They hate it!
          Diapers I guess aren’t a big deal. It’s the lugging everything around. Can’t wait until the kids can pack and carry their things. I do think the travel bug will hit me again in the next few years though. We’ll start easy with a Disney cruise or something. Thanks!
          -RBD

  3. B September 24, 2015 at 9:25 am #

    Like you, I had a dream of FI and earlier with the birth of my son, it really brings FI dream to a whole brand new level upwards since the end goal is clear and light to it.

  4. Kate Dore September 24, 2015 at 9:27 am #

    I really enjoyed chatting with you at FinCon. Isn’t it amazing how that conference totally changes your perspective? I don’t remember feeling quite this motivated last year. But I had different goals at that point. What a difference a year makes!

    • Retire Before Dad September 24, 2015 at 9:36 am #

      Kate,
      Good talking to you as well. I went into the conference ready to find some direction. After two years of writing, I needed some outside influence and there was plenty of it there. I hope the motivation that comes from it doesn’t were off. I feel like my to do list has multiplied by about 20!
      -RBD

  5. roadmap2retire September 24, 2015 at 10:02 am #

    Looks like you had a good break at FinCon…congrats on the nomination again.

    I hear you on not asking married ppl if they are planning-to or done having kids. I cant believe your boss brought it up at work lunch. Looks like you had a good response to that.

    Best
    R2R

  6. typeoh060882 September 24, 2015 at 1:47 pm #

    Great to meet you in person at FinCon this year, I agree that it was one hell of a learning experience!

    • Retire Before Dad September 24, 2015 at 1:52 pm #

      Brian,
      Likewise. Great hanging out!
      -RBD

  7. brian503 September 24, 2015 at 8:50 pm #

    When we had our twins, people would ask us all the time are you done having kids? Really is that any of your business. Great post and great to connect with you at FinCon! Looking forward to great things to come.

    • Retire Before Dad September 25, 2015 at 1:54 pm #

      DD,
      Twins…. I can’t imagine. Our hands are always so tied with one little one! Yeah, people just don’t get it with the personal questions.
      -RBD

  8. Maggie September 24, 2015 at 9:20 pm #

    I’m excited to see where the changes take you. They sound like thought-out changes. Three kids is a handful. But fun. And agreed on the three questions never to be asked.

    • Retire Before Dad September 25, 2015 at 1:55 pm #

      Maggie,
      Love your blog name. Very clever.
      I’m excited too. I don’t expect it to be a sudden change. More of a getting organized with my message kind of thing.
      -RBD

      • Maggie September 25, 2015 at 3:52 pm #

        Thanks! It’s great to connect!

  9. Dividend Gremlin September 25, 2015 at 1:42 pm #

    RBD,
    Good post. I have to echo work travel sentiment, it does get old fast. Otherwise awesome year you’re having with kids, investments, your blog, and life in general it would seem. I know those questions about kids too, and the appropriate people have asked us – her mother, my mother, and siblings. Other than those people and close friends it is the kind of question that makes me want say something snide as well.
    – Gremlin

    • Retire Before Dad September 25, 2015 at 1:58 pm #

      Gremlin,
      When I was younger, I really wanted to travel for work and only had a handful of opportunities. I thought it would be a great way to make extra cash by bloating the expense report and eating ramen noodles. That was probably naive!
      -RBD

      • Dividend Gremlin September 28, 2015 at 10:10 am #

        RBD,
        It is a good way to save cash though: I save $ on driving my car, gas, etc. and I go to a grocery store and spend way under the per diem and that includes a nice mixed 6-pack for sipping. Its not a ton of extra $, but I intend to make every cent count.
        – Gremlin

  10. JC September 25, 2015 at 1:51 pm #

    Really hope to make it to FinCon in the future, hopefully next year. This past year was way too crazy to try and fit that into the schedule. And congrats on the nomination, even if you didn’t end up winning. Considering how many blogs there are out there that’s pretty amazing. I’ve always enjoyed you blog because you cover so many varying topics. Every now and then an idea pops into my head that’s not about DGI and I probably need to actually start developing those posts. Looking forward to the changes and hope you have a great weekend!

    • Retire Before Dad September 25, 2015 at 2:03 pm #

      JC,
      Crazy year for you, without a doubt. Very few investor bloggers made it to fincon. Mostly more general PF blogs. Would be awesome to meet up there next year. I’m not for sure yet because it’s still a year away and it’s far away. But I really got a lot out of it this year, definitely want to go back.

      Thanks for being a reader and supporting me the past two years. Been a huge help. Glad people like the randomness of what I cover here.
      -RBD

  11. our next life September 27, 2015 at 8:11 pm #

    I’m excited to see where you take the blog. And I’ll definitely validate the point on income, dividends, etc. — even as a finance blogger, I’m just not interested in that stuff, mainly because it’s so personal. Also because we mostly invest in index funds, and there’s never any news to share there! Thanks again for making my day the other day with your kind email. 🙂 We just registered for FinCon16, so maybe see you there!

  12. Tawcan September 30, 2015 at 11:40 am #

    Great post, work travel can get old very fast, especially if you have to go to the same place over and over again. Missed FinCon this year, would love to go next year.

  13. Get Rich Brothers October 16, 2015 at 10:50 am #

    RBD,

    Great post.

    I definitely resonate with your feelings regarding children. My brother just had his first child this January and it has been a wonderful experience for everyone. Back a few years, we were saving and investing but always had that nagging feeling in the back of our minds that it would “end with us” someday. Now we are able to go forth with a greater purpose and meaning than we ever realized was possible.

    Keep up the hard work, striving toward that retirement goal that is fast approaching!

    – Ryan from GRB

    • Retire Before Dad October 16, 2015 at 10:55 am #

      Ryan,
      Thanks a lot. Yeah, kids are such a huge variable. Your financial plan changes by $250,000 with one pee on a stick. Crazy. With three now, we have a better idea of what we need to accomplish in the next 15 years.
      -RBD

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