Category Archives: My Story

My long, strange relationship with money


We moved here when I was five years old

Money and I have always had an odd relationship.

After all, how is it that I, your humble host, have come so far as to wind up writing a blog about my attempt to reach pretirement?

While I’ve had some good luck, some bad luck, learned from a lot of mistakes and was smart enough to make adjustments when needed, the real reason I’m here isn’t really any of those. I had one thing on my side that has been with me through it all: I have always been well-grounded in what life is really about. I never fell in love with money.

We moved to a little family farm when I was five years old, leaving behind a suburban rental house. I guess my parents were excited to be back-to-the-landers, something that was in vogue at the time and seems to come back into fad with every bad economy. Dad worked at the local plant and spent all his free time fixing the shack of a house. One year we had two feet of snow in our kitchen. Mom was a housewife and eventually sold Avon (leaving me in the backseat during sales calls).

My first memory of money of any kind came with the fifty-cent pieces my grandma would tuck into birthday cards. It sure felt like a lot of money! But since there was nothing for me to spend it on, it was irrelevant.

Money began to take on real meaning when the local convenience store put in an Asteroids and a Centipede game. Ah, so the more quarters I find, the more fun I can have! The money hoarding began in earnest. Quarters mysteriously disappeared from my parent’s change jar.

When my parents finally divorced, we went from poor to dirt poor. Mom was trying to make it as a real estate agent, just as things were collapsing. She waited tables at a local diner in the evening to make ends meet. We ate government cheese (not recommended!).

A whole other aspect of money struck me when I took my first official “job” at 14 years old, cleaning the gym at school, including the nasty locker rooms. That’s when I realized that, “THIS SUCKS!”

My mother was relatively savvy with money, but still never reached any level of financial independence. My father always wanted to be rich and so spent himself into deep debt many times trying to keep up with the Jones’s. I’ve lost track of how many times he went bankrupt, but I’m sure it’s at least four.

In my teens, I was probably rebelling against his mindset by deciding chasing dollars wasn’t for me. Naturally I went too far to the other extreme and almost intentionally chose a life of poverty. I was happiest when everything I owned fit in my car. And I was never uncomfortable. I gradually made more money, but the more I made, the more I spent. Fortunately I did learn from some teachers and others and never had any debt.

I always knew I would go to college, but I had no idea how it would be possible. When my dad moved to California, I went along since it was more of an adventure than staying where I had been with my old friends and also college is much cheaper there. Aside from those first few years where I lived with him, I put myself through college with no help from my parents otherwise.

Writing was the only thing I was really good at and enjoyed doing so I chose a career in journalism. It went fine, although advancement was nearly impossible as newspapers were shedding jobs rapidly. So at age 29, it finally hit me that it was a dead-end. I moved into marketing, nearly doubling my salary (from nearly nothing to almost twice that) and finally leaving the poverty line behind.

But then, suddenly I found myself strapped to a roller coaster.

Timing is everything sometimes. Just as I moved into marketing, the dotcom boom went off. I went from one dotcom to another (literally laid off from one on the day that was to be my final interview at another). Well next thing you know, hundreds of thousands in stock options were coming my way. My cube-mates and I would giggle to ourselves as we ended days $50,000 richer than we started them.

As you might guess, I screwed that up, too. Well, maybe screwed up is too strong, I did much better than many and worse than some. It benefited me greatly and I would not be writing here today without that money. However, had I understood then what I know now I would be looking at retirement, not pretirement and I could have reached pretirement without that money (and so can you!). And that’s why I feel I can contribute to the pretirement discussion.

Anyway, when the money started to roll in, I read up on investing and listened to all sorts of experts. My best move, it seemed, was real estate. Now you might assume after reading this section that the next thing to happen was I lost it all. Fortunately, no. I actually did quite well. But I could have done much better. And I committed two mortal sins I didn’t know I was committing at the time: I over-improved my properties and I used principal to do it. But I made money, too.

The great recession cost me hundreds of thousands of theoretical dollars but fortunately I always remained solvent and above water on equity. I was even making nice money from rent when many were being turned out of their homes!

I finally settled down, got married and we bought a larger house with a view of the water. I sold the house I owned before I met my wife and used that money to pay off my half of our house. We also added to our family last year so now I have college funds to think about.

Now I’m a stay-at-home dad and I do consulting to cover my remaining bills. I’m not yet financially independent but I’m close. I’ve learned so much on my journey. I’m looking forward to sharing some of what I’ve learned and a little about my next few steps as well. Hopefully I can avoid too many more big mistakes in the future. After all, I’ve already made enough mistakes for a lifetime.

My situation

Monopoly_houseI’ve been putting off writing this post since, like I said, I’m always a little uncomfortable talking about myself, and with money issues it’s even worse. But to reach my goals, I have to face my own situation with open eyes and laying it all out here methodically helps me focus and plan.

Remember, for *me* pretirement is when ALL my monthly bills are covered with passive income. For others, it may mean just getting close enough for a part-time job to cover the gap.

I’ll spare you all the details for now, but here’s the quick overview:

  • I owe nearly $50,000 on a HELOC (to be explained later) but otherwise my half of our mortgage is paid off. My wife is working on her half separately (also to be explained later).
  • I own a fourplex that I’ve been trying to sell for a few years now. Income from the fourplex is a reliable $1,300 on paper. In reality it’s much lower in recent days (mostly related to some fixes in preparation for sale and some long vacancies). When it sells, I should net around $140,000.
  • Other real estate: I own other real estate with a family member that runs a deficit of $250/month (plus lots of surprise expenses). I’ll spare you the details for now.
  • No other debt (woohoo!)
  • Raw monthly bills clock in at around $1,000/month.
  • I have nearly $50,000 in the market, but am not taking any distribution yet.
  • I’m 45 years old and a stay-at-home dad. I quit my horrible job last year (pre-pretired) mostly to get ready for the new baby who was on the way and also because I couldn’t work with crazy idiots any longer. I’ve just begun consulting which I fit in around my dad duties and currently brings in around $1,000/month.

So that’s the landscape. Am I pretired? Let’s total it up with some easy-to-read rounded numbers:


  • Fourplex: $800 (not really accurate, but a reasonable proxy given how unstable it has been)
  • Potential income from current investments: $200 (not taking a distribution currently)
  • Consulting: $1,000

TOTAL: $2,000


  • HELOC loan: $130
  • Monthly bills: $1,000
  • Other property costs: $250

TOTAL: $1,380

Woohoo, looks like I’m pretired! Suck it, corporate America! Oh, but wait, let’s look a little deeper:


  • Fourplex: $800 (While this is a pretty realistic number on average, expenses and vacancies have made this jump around drastically. When a perfect storm such as sudden expenses coinciding with a couple vacancies, it can be a cashflow nightmare. And I always feel like a surprise is waiting around the corner.)
  • Potential income from current investments: $0 (When it’s theoretical money, it’s best not to count the cash until it’s in your pocket. For now it’s still being reinvested, so it shouldn’t count as income — yet. Let’s put zero for now.)
  • Consulting: $0 (For me and my strict goals, I don’t want to count ANY work. Also, this could end — or go up — at any time. Let’s put zero just to see what happens.)

TOTAL: $800 (on a good month)


  • HELOC loan: $130 (would go up if I had to rely on this stash for fourplex or other needs)
  • Monthly bills: This doesn’t count anything beyond core bills. One car repair or leaky roof and this goes up quickly. Let’s move it up to $1,500 so we have some cushion.
  • Other property costs: Additional expenses happen here all the time with rental vacancies and repairs. Let’s guess the coming months average $500.

TOTAL: $2,130 (And could even get worse in a hurry.)

Looks like I’m not quite free yet. In reality the situation isn’t as dire as the most negative scenario (although I worry continually about that happening). Nor is the most positive situation stable enough to rely upon. I easily break even right now with my consulting money and I am in no danger of getting tipped over from an expense spike because I have the HELOC to use if needed.

Which brings me to my point about the inflection point. With some key strategic moves and potentially going back and snagging a few more paychecks, I think I can get there.

My rough strategy right now is:

  • Sell my fourplex and move those funds into dividend producing funds or something similar so I have relatively reliable income. I have also considered simply buying some lower maintenance real estate and that’s still on the table, but I’m pretty sick of the rental game at this point. If the property isn’t sold, I need to get this running more smoothly so it’s a more reliable cash generator.
  • Cut expenses wherever possible. Not sure I can cut much further than I have, but we will see. Actually we could move to a smaller/cheaper home and the extra cash would set me up nicely, but this blog is about living in the real world. We may move at some point but we like where we live and we’re in decent shape overall. We’ll see.
  • Build up the cash-generating nest egg much further to close the gap and eventually reach pretirement!

I don’t know how long this will take, but I have feel great that the journey has begun.

Why I’m pursuing pretirement

No way I can work at a dead-end job until I'm 65

No way I can work at a dead-end job until I’m 65

It’s difficult for me to talk about my own situation.

In addition to my many embarrassing financial mistakes, there’s a worry of being a know-it-all among people I know or just being judged for every crazy move I make. Not to mention issues of privacy and security.

So I’ll be a bit vague on some of the details, but will try to provide enough information to explain where I’m at and where I’m going.

Your first question is: Are you “pretired” currently? And the answer to that is no by my own definition.

For myself, I try to be pretty strict about the definition: ALL monthly expenses are covered by passive income. (For others, it may mean being just close enough to work part-time to cover the bills.) Now I’ll get into some numbers and complicating issues soon (such as inflation), but for now it’s the concept that is important. Many (many!) have written about this before, most notably Robert Kiyosaki in Rich Dad Poor Dad.

Unfortunately most of what is out there is either fairly benign advice about saving relatively small amounts of your income, and trying to game the tax system OR it’s selling get rich quick schemes, usually in real estate.

What I have learned is the standard investment advice (401K, Roth IRA, mutual funds, etc.) may be great advice if you want to be a wage slave for several decades, but if you want to get out of the rat race, you’ll need to do much more. (NOTE: I’m not saying those investments are bad ones, just that the standard level at which we’re advised to invest at will be nowhere near enough to let you opt out of the game.) What’s more, retirement accounts that lock away your savings until you’re old will be great to have when you reach that age (although I doubt there will be many people who can actually live on a 401K) but you won’t be able to use that money in the meantime.

Put more simply, the mainstream advice is this: put aside a small amount of money from your paycheck, let it grow in the market as you age and through the magic of compounding, you’ll have enough cash to live on in your golden years. And you know what? They’re absolutely right. It can work quite well, especially if you make a decent wage and start early enough. (Although even then, I have my doubts about whether a 401K will be enough, especially as Generation X gets screwed over yet again with cuts to social security and Medicare.)

But what if you don’t want to spend 45 years WORKING? I know I don’t. That’s where pretirement comes in. By making strategic adjustments as early as possible, it is possible to short-circuit the game and live the life you want to live. I’m not there yet, but I’m close enough that I think I can see how to get there. But, very worst case, I should have an even more comfortable situation when I’m older and will be able to look at my social security (if any) as a bonus, not as critical survival funds.

I may choose to work even after I reach pretirement. Perhaps I’ll want to feather my nest a little bit or maybe I’ll decide I need a little more breathing room on my monthly income/expense ratio. Or maybe not. I’ve never had trouble finding things to keep me busy so maybe I’ll never go back. Either way it’ll be up to me. And that’s why I’m pursuing pretirement.

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