Retirement: One Year Later

Retirement is not just about financial advice, you need good health, someone who loves you, and time to enjoy it all!

Last year about this time I was returning home from my two week stay in Nicaragua, at an awesome surf and yoga eco retreat with the sweet name of Costa Dulce. As a youngster growing up in SoCal, I learned to surf and actually spent quite a bit of time perfecting my surfing skills on a 6-month journey to Hawaii, Guam, and Australia when I was in my late teens (actually spent my 20th birthday in New Zealand). So when I retired from my full-time career of over 40 years as an information technology specialist, I decided to escape the real world and spend two weeks surfing and doing yoga. It was one of the best decisions that I have made since I asked my third wife to marry me. No, she did not join me to stay in an open air cabin on the beach with no AC, bugs, and with no five star hotels down the street.

Fred, not me surfing, but this was the spot that I could walk to from my cabin.

I was inspired to write this post as I watch the US Open and was reading Finite Jest from now retired tennis player Andrea Petkovic. As a tennis player myself (but not a professional), I could relate when she mentioned that she is now celebrating year two of retirement, and nobody throws you a party to celebrate your second year of retirement. And that is OK as long as you are making good use of your time. For me, what is important in order to consider myself wealthy comes down to this equation that my friend Daddy Stockbucks on Seeking Alpha shared with me:

Wealth = Money + Health + Love + Time

For me, what I enjoy doing in retirement is sharing some of the things that I have learned that give me pleasure, and it helps me to feel that I am giving something back to those who need or at least could use, some good advice. Some of the things that I do now in retirement besides writing and investing (and writing about investing) includes coaching high school tennis (which is fulfilling to help boys and girls improve their tennis and social skills), playing tennis (for my health and enjoyment). traveling (both with my wife to nice places like Carmel-By-the-Sea and places I like to go to ski or surf), and helping raise our two kids to be nice humans.

The time part comes into play when I have forty hours (plus) per week that I am not commuting to the office, slaving away for an employer or boss whom I may or may not always agree with, and living paycheck to paycheck with no time for fun. I am only 65 and there is longevity in my family (Mom just turned 91) so I may be around for 20 or 30 more years.

I met with a financial planner before I retired and he helped me run multiple Monte Carlo simulations based on my total wealth at the time, which included a partial lump sum pension upon retirement, plus a monthly annuity in addition to Social Security. At the time, I was 63 and had been with my latest employer for just over 12 years, which meant that I met the “rule of 75” (age plus years of service) to be eligible for a full pension so in my case it actually made sense financially, for me to retire as soon as possible. I gave my notice and retired nine months later and am incredibly glad that I did.

Money, Money $$$$

OK, so here is some money advice for my readers. You may need to sign up for a subscription to Seeking Alpha to read these latest two articles that I published on my Income Compounder portfolio.

Review Of My 2024 Income Picks, Part 1: Fixed Income And Alternative Strategies

Review Of My 2024 Income Picks, Part 2: Taxable Income Picks To Consider

We are in a bull market so far in 2024 and I think it may not last past the election, so now may not be the best time to be doing a lot of buying. However, I have provided over 20 different ideas to consider between the two articles that you may be interested in following in preparation for the next market crash, aka “buying opportunity”. Have some dry powder (cash) available to take advantage of market dips of -5% or more, which tend to happen at least once every few months or so.

If you were investing in the market in September and October last year, it was a great time to be buying. Fortunately for me, that was when I received my lump sum pension payout and I put about $150K to work buying low priced shares of many of the income holdings in my portfolio and now have an unrealized cost basis of +25% on several of those holdings.

My average yield is a ridiculous 15% on my overall portfolio and I reinvest the majority of my monthly distributions (many funds offer a discount to DRIP) which helps to continue growing my portfolio and increases the future income stream.

Despite taking substantial distributions this year from my Income Compounder portfolio, my account balance is just slightly lower than it was at the beginning of the year due to compounding of those reinvested dividends, along with capturing some capital gains and buying more shares of even higher yielding securities. And even when the overall account balance fluctuates, the annual income remains steady and even growing over time.

Below is an actual screenshot from my Schwab IRA (which represents about one third of my total investment portfolio) as of the end of August.

Thanks for reading, and I hope that you have enjoyed the content and possibly even learned something. Feel free to share this with your friends, lovers, and enemies.