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.

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2 Thoughts on “My situation

  1. I like the sound of this a lot. My current situation places all my invested income in retirement accounts, but the more I think about the it the more I’m thinking I need to diversify and place some in taxable accounts. The 9-5 cubicle mindset definitely needs to go.

    Great blog, and goodluck. I look forward to reading along.

    • Pretired Nick on July 16, 2013 at 10:23 am said:

      Thanks, Rob! Glad to have you along for the ride. I’m working on a post now that should make this concept even more clear. Keep checking back!

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