Thinking out loud (FIRE stuff)

[RetireJapan]

I'm in a similar position in that I could probably frugally FIRE now or barista fire but I work 4-days a week as it is and with the covid situation there doesn't seem much point giving myself extra free time now if it will mean penny pinching later. If I was in your position and my contract wasn't renewed in 2022, I'd probably use that as an excuse to travel for a year (if things are normal again) or just build up RJ more while seeing how living a FIRE life works for a year. Then get a bit of work to cover expenses while the nest egg grows if you think barista FIRE is more sensible. It would be a good excuse to take a well-earned break.

I'm idly considering just claiming unemployment (as I'll be involuntarily unemployed, I will be eligible immediately). I think I'll get the max for about 11 months, and use that time to get some qualifications (FP3 and 2?) and draft some books.

We'll see though. My wife (fingers crossed) will probably still have her school so that might take priority. And something entirely unexpected might come up. After all, we still have twenty-odd days left of 2020 to go. I'm fully expecting an alien invasion or something

[TokyoWart]

I recently came across the information that Joe Dominguez, who was the co-author with Vicki Robin of “Your Money or Your Life,” retired at age 30 something in 1969 he did so with just $75,000 (about $250,000 today) all invested in US Treasury bonds earning 8% (so a $20,000 income today). The other legs of his stool would have been very short or missing since he would have had a minimal US Social Security benefit at 65 (he unfortunately died from cancer at age 58). More money is of course more but that example suggests to me that financially it is possible to do what you propose here:

The thinking here is that we probably have enough saved up that if we let it ride for another decade or so we'd be in a decent financial situation (especially as we will have three pensions in old age -nenkin for my wife and I, and the UK state pension for me). Reducing our 40-50% saving/investing rate means we could work less, spend more, or both, while giving our investments time to compound for a decade or two.

I think if I made this choice that I would keep the high equity allocations for my investments because you are not proposing actually accessing those funds for “a decade or two.”

[RetireJapan]

I recently came across the information that Joe Dominguez, who was the co-author with Vicki Robin of “Your Money or Your Life,” retired at age 30 something in 1969 he did so with just $75,000 (about $250,000 today) all invested in US Treasury bonds earning 8% (so a $20,000 income today). The other legs of his stool would have been very short or missing since he would have had a minimal US Social Security benefit at 65 (he unfortunately died from cancer at age 58). More money is of course more but that example suggests to me that financially it is possible to do what you propose here.

I think if I made this choice that I would keep the high equity allocations for my investments because you are not proposing actually accessing those funds for “a decade or two.”

That's amazing about Joe Dominguez. A bit like Jakob Fisker (the ERE guy), he retired on a miniscule annual income (but ended up going back to work for fun).

I suspect I am going to find it difficult to start spending our money after putting all this effort into accumulating it

[Spa06Jc]

I suspect I am going to find it difficult to start spending our money after putting all this effort into accumulating it

That has always been at the back of my mind - after having adjusted my whole way of life and thinking about money to save and prepare for the future, am I going to able/willing to change when that future finally arrives?

[taneandy]

Here are a few random thoughts that you should probably take with a pinch of salt considering that I'm at a much earlier point in my FIRE journey than you.

* I assume that you are looking for something to work on for at least the next 10 to 15 years. With that in mind, I think it's a good idea to give yourself plenty of time to figure out what you want to do and try new things. Don't panic and take up a new job just to cover your expenses if it's going to limit your freedom to try out new things. It could also be a good opportunity to visit family and friends depending on the covid situation then.

* If you have about 2 years of expenses in cash I don't see any need to overly panic about how the stock market is going to move. Even if the stock market drops by 50%, as long as you can find a job that will cover your expenses within a year or two, you won't actually have to take any money out of the market while prices are down.

* Where do you want to live for the next 10~20 years. Are you happy where you are or would you like the freedom to move closer to family, travel regularly, etc. Taking on private pupils might give you a relatively easy way to earn money with minimal time commitment, but will limit your freedom to travel more than earninh money through your website, books, consulting, etc.

[RetireJapan]

Here are a few random thoughts that you should probably take with a pinch of salt considering that I'm at a much earlier point in my FIRE journey than you.

Part of the (potential) problem is that we are not quite where I would like us to be in terms of net worth/investments. Hopefully this isn't one of those 'vanishing goals' that you can never reach

If money were not an issue, I would work on RetireJapan and try to build out the coaching/advising service more. I find this interesting and it makes me feel useful. It also fits how I like to work, which is to have few regular commitments and rather focus on short- to medium-term projects.

Don't intend to ever have a 'job' again. Fingers crossed.

Sendai is a good base and barring disasters/big changes I can see myself staying here for good.

If my contract is renewed I'll stay there at least another 5-10 years and hope that results in us having 'enough'. Getting older will definitely help with this, as it reduces the number of years before we get our pensions.

[mighty58]

I'm sure you must have considered this before, but I'm wondering how much serious thought you've put into obtaining a professional financial planner certification? It seems like the perfect qualification you could get "on-the-side" while your employment contract runs down.
Getting a Japanese CFP qualification would help turn what you've accomplished so far with this site into something potentially bigger. I can't imagine that there are too many native-English speakers with a Japanese CFP qualification, so there's the niche factor too (you could corner the market on a certain demographic!)

There are several ways you could parlay a CFP into a new gig, but one observation I would make is that there is definitely a need for a financial advisor that is a trusted, fair and non-biased advisor, who acts as a fiduciary would, is independent of commission sales, and who charges hourly-fees rather than % of AUM, and who can work in English. From what you said, you wouldn't need this business to generate a full replacement of your current annual income, so no real need to worry too much about the limited potential client market of English-speakers in Japan, as a small number of clients would likely be "enough". Just getting the CFP will go a long way in boosting your credibility in a credential-obsessed country, which could lead to other things like, say, books... or if you're really bold, you could even try cracking the Japanese market with your "radical foreign ideas". And as a bonus, I imagine you'd get a lot of satisfaction out of helping people get their financial lives in order.

But even if none of that comes to pass, this is obviously a topic you're interested in, and the perfect opportunity to learn more about complex or niche topics like taxation, insurance, wills, etc.

Anyway, just some random thoughts that came to mind having read your musings.

[RetireJapan]

I'm sure you must have considered this before, but I'm wondering how much serious thought you've put into obtaining a professional financial planner certification?

Bingo. I tried taking the FB3 test a couple of times before, but failed due to not studying enough and not having quite enough of a reading level.
https://www.retirejapan.com/blog/taking ... er-test-2/

I'm planning (heh) to take the FP3 test again next year, and then if I end up losing my job and going on unemployment, taking the FP2 test then. I think there may be some retraining support too as part of unemployment, which would be nice

I think there are a lot of people out there who want someone to manage their money for them, and there are not many good options in English or Japanese. Lots of potential clients, and people to save from the usual scammy (scummy) 'advisors' out there...

[kuma]

Two viable paths, and the financial footing to embrace contract non-renewal, should it come. Congratulations!

I wonder if you are empowering your employer to make your next choice for you. If the non-renewal option is preferable to you, could you engineer this? Not through slacking off / slagging off the managers / arson etc, but via amicable dialogue? Might not be possible, and don’t know how it would affect severance pay. A former colleague in the UK engineered a win-win in somewhat similar circumstances.

Re unemployment money, I imagine you’d have to be careful to navigate any rules regarding freelance / miscellaneous income.

[RetireJapan]

I wonder if you are empowering your employer to make your next choice for you. If the non-renewal option is preferable to you, could you engineer this? Not through slacking off / slagging off the managers / arson etc, but via amicable dialogue? Might not be possible, and don’t know how it would affect severance pay. A former colleague in the UK engineered a win-win in somewhat similar circumstances.

Sadly employer is a national university, so no negotiation possible. No severance pay either, although I would get my retirement bonus (about 5m yen for the 13 years served). My reading of the tax on retirement bonuses leads me to think it should be mostly or entirely tax-free.

To be honest, I would rather stay there for now, as the stable/generous salary would allow us to pay off the mortgage and save a bit more. I wouldn't choose not to get renewed at this point, but I'm not going to run around suing them (even though I might have somewhat of a case). Just sit back and see how the dice fall!