Money Monday: We Retired Early

My friend and fellow Burner, Amazing Affinity, has recently retired and gosh, am I envious. Despite her “life of leisure,” she is a fervent supporter of the arts and has been a rockstar volunteer for the Black Rock Arts Foundation and the Burning Man Project. She is such an asset to our community that she was recently bestowed the honor of having an award named after her: the Affinity Award. The Burning Man Project vision hopes to lift the human spirit, address social problems and inspire a sense of culture, community and cultural engagement. Affinity is this vision in human form. She never ceases to amaze me! I admire her so much, I asked if she would inspire us with her advice on how to retire early just like her! Here is her well thought-out post.

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My friend Catherine asked me to write a post for Money Monday because my husband and I each retired at 63, and she thought you might like to know how we did it.

When I met my husband I was 45 and about $45,000 in debt including a $5,000 student loan from law school that had blossomed thru the years to about $17,000. The first thing he encouraged me to do was make a debt plan and start making double payments. I was only making $57,000 at the time so we went on a “paying the debt off binge”. It took me about 3 years to get out of debt. And the only debt I have had since is a mortgage; I use credit cards for purchases but pay them off every month .

The second year of our relationship, 1994, an apartment became available in our neighborhood. We lived on Russian Hill so it had never occurred to me that I might be able to buy there. It was a walk up (70 stairs) and a tenants in common building so they required 25% down on the price of $150,000, so we each had to come up with $20,000, and I was in debt still and he did not have any savings. We each borrowed the money from our friends and family for the down payment, and paid them back over time, and sold the apartment in 2006 for $550,000. Let’s be clear that was luck, we bought at the bottom of the market and sold at the top of the market, everyone would love to do that.

But what was not luck was our being satisfied with our one bedroom apartment for 12 years. The first time my best friend came to visit she said, “This is nice, but it is a starter apartment, you will want a larger apartment or house soon.” We replied, “No, we intend to live here as long as we can, and love it, we want to retire early.” “We do not want to overbuy a home, then if the market plunges we will not be in over our heads.” I also suggest you pay the mortgage off if you can. Then you have the option of living in it or selling it to move where you might retire, and use the money to buy elsewhere.

And I think the best thing we did was take full advantage of our 401(k)s. When I was paying off my debt I only made a deferral to the extent of the matching contribution my company was making. But after my debt was paid I maxed out my 401(k) every year. If you can afford to put it into the Roth portion of your 401(k) then do that. If you make a Roth contribution you will not receive a tax deferral for your contribution but all of the gains you earned will come out tax free. There are two kinds of “free money” out there; the matching contribution to your 401(k) plan and the Roth gains that are never taxed. Take the most advantage possible of these features.

I know you already know all of this, but let me tell you what a joy it is to be retired, and traveling and not worrying about work while on vacation. Good luck.

So my early retirement tips are:

1. No debt except your mortgage.
2. Don’t overbuy your home,
3. Pay into your 401(k) as much as possible, especially in your early years, but always at least to the extent of any matching contribution.
4. My final suggestion is that you see any financial windfalls (bonuses, etc.) as ways to get ahead rather than splurge. Take 75% of the windfall and save it, or if it is from your job you may be able to put it in your 401(k) if you had not maxed it out that year. And then take the 25% and splurge.

It has been fun talking about money, feel free to contact me if you have questions: affinitymingle@gmail.com

I also have a plus size fashion blog and I would love for you to stop by and check it out if you have an interest or know someone who might enjoy it. It is more of a D.I.Y., how to make it work and a resource blog than a true fashion blog. http://affatshionista.com/

Celebrity Sighting

CNS photo/Grzegorz Galazka

CNS photo/Grzegorz Galazka

Unlike Dean who has story after story of, not just celebrity sightings, but celebrity hang-outs, I can think of no one. Hmmm, I did see Pope John Paul II (the best Pope ever) in the pope-mobile when I went to the Philippines for a medical mission in January 1995. I went to high school with basketball star Jason Kidd who now plays for the New York Knicks. But that’s all I’ve got. Wait, there’s one more. I did wait in line at the The Jug Shop in Russian Hill to get a bottle of Devotion vodka signed by Mike The Situation. That was pretty awesome. He’s my big celebrity crush. Those abs? Mmmmhmmmm!

While I’m obsessed with celebrity gossip, I’m not one to stalk them (except for The Situation) or go visit their homes in Hollywood or what have you. That’s just silly. But I did, unknowingly, meet a celebrity on Sunday after working all day.

I, in fact, worked all weekend. Because I want all of you to feel sorry for me, I’ll repeat: I worked almost 20 hours this weekend. This is in addition to battling illness (the never-ending cold) since December 27th.

Anywho, at about 9pm on Sunday night after work, I headed to L’Ottavo which is an Italian restaurant a block away from our apartment. We have no food in the house since we just returned from vacation and still have yet to go grocery shopping. Hence, we’ve resorted to eating out. L’Ottavo is like Cheers, but a restaurant. Everyone has worked there forever. The patrons are regulars. It’s like a family, so much so they feel bad taking your money. Here’s an example: After Dean joined me mid-way into my meal, we decided to order one more glass of wine. I told the waitress one glass was enough for us to split. She set out a new glass for Dean, then proceeded to pour each of us full glasses of wine to the brim. Obviously, she only charged us for a glass.

There’s this older man at the bar sitting by himself, eating a full meal, drinking wine. His face looks like its deteriorating with pockets of skin sagging. He must be in his seventies. He’s slightly hard of hearing and takes a couple seconds longer than normal to respond, but otherwise academic-looking and dapper in his glasses and houndstooth suit. We all got to talking about where in the city we lived, which sushi restaurant in the neighborhood is best, then we branched into politics and his time on the SF Board of Supervisors and as District Attorney. Lucky for me, he handed me his business card, saying, “If you ever need a lawyer, give me a call.” I couldn’t wait to google this guy when I got home. Lo and behold, the man has his own Wikipedia page and comes from a storied family. Unbelievable.

Dean said, “We can’t leave the city. You don’t bump into these kinds of characters anywhere else.”

Out and About on Polk Street, San Francisco

Last Thursday, we had a good time hanging out with friends in Russian Hill at Amelie—a special place for us since that’s where Dean and I met.  It is such a romantic and lively French wine bar. Perfect date spot. Later on at night, we ended up at Kimo’s watching and dancing to a surprisingly good band called YNOT & Asian Diva Girls. They mashed up hits from Nirvana, Michael Jackson, U2. The female lead vocalist asked how many of us played the piano and I started cracking up. Almost the whole Asian crowd threw their hands up. Gotta love the robotic Asian culture. Piano, tennis, Lowell, UC Berkeley, optometrist. So friggin predictable!

Monday night, I went to my first ever Porchlight series at the Hemlock Tavern on lower Polk. Porchlight gets highlighted by literary blogs and calendars, but it is so not a literary event. It’s “literally” open comedy mic. There’s a theme for the night, you sign up, and tell your 5 minute story. 7-8 people typically sign up. Prior to the start, the host anonymously picks an audience member who will determine the winner; the winner gets $50. Props to the co-founders for this method of choosing the winner. I really like it. So much better than applause which always makes some speakers feel good, while others feel bad. That feel-good/feel-bad applause is like being at a baby shower and everyone oohing and aahing at the most expensive gifts.

It also reinforced that there are people in the world who will like what you do, for being you, and telling your story. Others won’t like you, but I guarantee you someone does appreciate and enjoy your talent. The winner was not someone I would have chosen myself; I thought her story was annoying—my personal opinion.

The theme Monday night was Kitchen Confidential—food-related stories about restaurants, waitressing, catering. The stories were a hoot. I thoroughly enjoyed at least half of them. Porchlight has been around for almost ten years and I have been missing out. Definitely a good time.

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