How Does 47% Sound?

April 11, 2011 by Jeremiah | 0 comments

We were sitting around having some wine over the weekend. I don’t want you to think that this was a special event. We get together with two or three other couples every three or four weeks to catch up and we enjoy each other’s company. Last week was THE weekend to do that. We rotate houses where we will go, so we don’t have the get togethers at the same house each time. And, most importantly, we all live in the same neighborhood so there is no driving involved. No chance for a DUI. I expect that we will be in real trouble once they start enforcing a WUI – Walking While Intoxicated. 🙂

We haven’t seen Richard and his wife since last fall and he was not aware of my early retirement curve ball that I wrote about on November 7th, 2010. I brought him up to date. He was always pumping me about stocks and this past weekend was no different. I asked when he first started noticing my blog and he said he had been checking it for over a year. I asked him if he could tell me if there was something on the blog that was on the front page that changed every time he visited but was essentially the same? He laughed and said “Not really.” I told him that I had a stock chart on the main page and it was the same week after week, but that the price and the graph changed every day. The stock was Starbucks – SBUX.

If Richard had looked into the stock when he first visited the page, he could have started some research and seen that this stock was $12 about two years ago and last year the price increased to $24. Now it was upwards of $35+.

So you are recommending that the people who read your blog buy Starbucks?, he wanted to know. Maybe, if they want. I have increased my profits by over 50% since I bought it. It’s done very well for me. I put the chart on the blog to show people that they need to look at other investments when retiring, so they can stretch their retirement funds no matter how long they live.

What about the dividend? Actually, I didn’t buy Starbucks for the dividend. It only pays about 2% which, for me is not enough to buy for a small quarterly payout. We talked stocks some more and I asked him what he needed for a return on his portfolio every year to maintain his standard of living. He couldn’t tell me.

Don’t get me wrong. A lot of people like Richard don’t know their numbers. They don’t know what they spend, on average, each month and how much each month they need to save to pay for annual expenses like house insurance, car insurance, real estate taxes, etc. He asked me what our expenses were and I told him that the number was confidential, but I told him that I needed a minimum of 12% per year on investments, to keep up with the Joneses. He started laughing, since Jones was his last name, he thought that was pretty funny.

Richard is still working and like a lot of people he has not thought about retirement, even though he is almost 60. I asked him if he wanted to do some retirement planning with me – sit down, come up with a budget, figure out how much he had in savings, what he could expect from his portfolio, and get a grip on when he could retire. He thought maybe I should put the retirement planning on my blog as a course for him and my readers. I thought about it and decided that I would take that on.

So starting this weekend, we’l start. I’ll develop an outline and a course schedule and make it available to everyone for no charge. There is a catch. I think that I might sell the course later, so I will not be putting it on the blog in posts like I have done in the past. I’ll let you know this weekend how to get it at no charge.

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For Taking Early Retirement (TER), I hope you are enjoying a great retirement or are close to that day!