"Retiring" at 33. Too early?

[Adam Haman]

Good afternoon!

I'm a Realtor and RE investor here in Denver feeling burned out after a 5 year push. I've made decent incomes for the past 5 years (80-120k), and invested more than half of it each year in the best, newest rentals I could find. I'm considering "retiring" and doing something else.

I don't love being a Realtor; the hours in particular are difficult, I often don't feel like I can keep my mind from wandering to clients and pending deals, and I don't feel I've had domain over my own mind, or gotten away from work completely, in more than 3 years. I have 2 young kids that deserve better from me, and I want to give them my full attention.

We're established in a great home we remodeled in Denver with a $1300 mortgage. By the end of 2014 I should have monthly cash flows of about $4,500 after vacancy and expenses. This is roughly equivalent to our monthly cost of living, minus expensive vacations. I have 9 outstanding mortgages, including our principal residence. My wife does not work. As such, I think I could pursue a job with less stress, more coworkers, and more job satisfaction. Regardless of pay, I think we could make a run of it. Retirement should be taken care of with 8 investment properties fully paid off when I am 62, and increases in rent in the meantime will grow our monthly income with inflation.

What am I missing? Am I jumping the gun on this? Does anyone live happily on a similar monthly income? Has anyone "retired" and then regretted it? Is it difficult to get back in the game?

Thanks everyone for your input. How can I help you?

[Joel Owens]

"in more than 3 years"

So you haven't taken a break for yourself in 3 years?? I don't care what you do as a profession it's important to get away.

I do commercial real estate and not residential. Even though I do not drive clients around I am more processing numbers on complex transaction investments all day long. I still need a vacation every 3 to 6 months and exercise multiple times a week to clear the mind.

Even if you love what you do if you burn candles at both ends you will flame out. I think you need to take a few weeks vacation and leave the cell phone at home. Spend time on yourself and your family. Then when you get back see how you feel. You can't make such a large life changing decision not thinking clearly being worn out without a break. 

I love what I do and want to keep doing forever in commercial real estate. There is no absolute yes or no. As the years progress you can be more selective on what clients you take to reduce your stress level. The ones that are too much drama you won't need to work with them as your residual income from investments will provide steady cash flow. Look at if real estate is not what you enjoy or is it the residential part. So if you switched to investors would you like that better, or commercial, or leasing etc.?? So many agents start in residential and they can't stand it. Many quit not knowing all the other avenues in real estate they can take that is different.

I personally like to go to the beach on vacation and listen to the waves roll in at dark with peace and quiet and the moon hitting off the ocean. It really clears my mind and rejuvenates me.  

Hope it helps.

[Phil B.]

Sometimes when you step away for a little bit you make your biggest strides forward.  You need a break.  33 is a little young to "retire" even if you were a bazillionaire.  You need to occupy your mind.

Step back a bit, automate whatever you can automate and smell the roses.  While you do, contemplate what you want to do with yourself.  Im 44.  Usually that burnt out feeling doesn't hit until around 38 or so - you are a little young to be so stressed.  You obviously need to step back. 

Money doesn't mean jack if you don't have time to see your kids grow up - trust me on this one.  I learned the hard way and thankfully I caught my own workaholism early enough to make up for a little lost time while my kids were still young and could appreciate me.  Im tighter than ever with my boys and now I dictate the way my work goes - not the other way around like it used to be.

[Simon Campbell]

Work is a means to live. We should never live to work - especially if you have a family. If you can maneuver your finances in a way that your investment properties generate enough income stream to cover all monthly expenses and give you a little extra for emergencies then go for it. Your children need a father and your wife needs a husband. 

If you are having your properties managed by a PM company, consider retiring into this business. Self-management will give you a part-time job and you can consider the 10% you are paying the PM as income to yourself. 

Worst case scenario: You find out your can't make it without having to work FT in real estate and you go back into the business. Meanwhile you had a nice vacation. Go for it! 

[Adrian Tilley]

@Adam Haman I think you're absolutely on the right track.  If I were you, I would continue to try to find deals as time allows, and take listings when convenient for a few extra bucks.  You can always go back to work if you need/want to.  Enjoy the time with small kids who still want you around.

[Jean Bolger]

Is there a specific "something else" that you're thinking of? If so, you're in a great place to pursue that, since you'd have some solid rental income to back you up while you develop a new career. As for living happily on that amount: Personally, I could live on that just fine- but I don't have kids and all that entails (college? eek). I think you'd find yourselves stressing about money if you tried to get by on just that for the four of you.

Joel's advice about taking time off to recharge and clear your mind is right on. Get some rest, and then start exploring ideas about what would be energizing for you, from a work perspective. You're super smart to have gotten yourself into a position where you have these options at such a young age, BTW, so congratulations on that!

[Matthew L.]

I hate the term "retire". Retirement is for people that hate their jobs and have this artificial date 30 years from now that they can leave the job they hate. 

Everyone should strive to be financially free so they can pursue whatever interests them; it sounds like you are close to doing that. I doubt, at 33, you are going to never want to do anything considered work again so don't consider yourself "retired". The work you do from now on should be work you love doing. If you don't enjoy being a realtor, don't do it. If you want to spend all your time raising your kids, do it (that's a job IMO). If there are hobbies you love, focus on them and maybe they will turn into a business.

As far as $4,500 a month being enough to live on, I could absolutely live a great life with that. But, I don't have a wife and 2 kids. Only you can decide if that's enough to live on. If it's not, get a part time job doing something you are more interested in to supplement your income instead of letting being a realtor drain you and take away your time to spend with your kids.

This is a great problem to have and I hope to have it someday!

[Mike Moles]

It sounds to me like you have done very well for yourself, and you are looking at "retiring" from real-estate and pursuing another career for all of the right reasons.  You are very fortunate that you are in a position to do it (because of your hard work!).  Of course you still need to manage those properties, you don't mention whether you have systems and property managers included in your expenses but once you get another job you may find you need that.  Congratulations and good luck!

[Adam Haman]

Thanks everyone for the replies, these forums are an incredible way to connect with people who have "been there" when most cannot identify with Realtor Problems.

A few things seem evident in all the great responses:

1) A true vacation is a must before larger decisions are made. I've been away from Denver 4 or 5 times in the past 3 years, but have never been relieved of duty. My last "vacation" I ended up selling 3 homes on the road. Not fun. Not relaxing.

2) Thanks for the support from people who identify with wanting to be more present with family. I can't put  a price on it, but I'm done with the sinking feeling that comes every time my son asks me to play baseball or Candy Land but I can't because I'm on the phone or on the way out the door at 7 in the evening. "The Cat's in the Cradle" is always hovering over me as it is, and it's nice to see affirmation from people who have made bigger investments in their family. Thank you for that.

3) Perhaps $4,500 per month is not a comfortable number for a family of 4. I need to keep this in mind if I search out another career instead, or do as @Adrian Tilley  and @Joel Owens suggest and either revamp my business to work only with clients I want to, or find another field within Real Estate to pursue. 

Thank you all for the insight and suggestions, hopefully I can return the favor one day on BP!

[Bill S.]

@Adam Haman - I'm a few years ahead of you. My kids would be at least 10 years older than yours. Kids are not cheap. My expenses have grown at a rate greater than inflation and rents over the last 10 years and my kids don't have any expensive hobbies like hockey. I'm all for quality of life and knowing what you are getting into ahead of time. What would you life be like if you did half the volume? Also take serious stock in your skills, is there really a job out there in the workforce for you? Also, what would you do that would charge your batteries while you do it? Think about doing half your volume and using half your rental income. Take the other half and start paying off debt. Think of how much you would need if your primary residence was paid for. What about 2 or 3 of your other properties?

[George P.]

$4500 isn't a lot. i'd think about retiring if i was making ~15k after expenses.

[Brad T.]

@Adam Haman 

I am trying to go down the same path that you are.  I currently have a stressful job in engineering that I would like to be done with by age 40 (in 3 1/2 years).  I should end up with about $4,500 per month income and a paid off personal residence.  I am planning to work as a home inspector along with managing 10-12 rentals.  The rental income is great to let you only take the clients that work into your schedule, so that we can spend time with our kids.  Best of luck to you!

[J Scott]

Here's the way I would look at it...

You're a successful real estate agent.  If you left the industry for a year or two or five and then had no better options, you could likely come back and again be a successful real estate agent.  

Given that, your risk of walking away right now doesn't seem to be tremendously high (of course, I don't know anything else about you, but that would seem to be the case).  So go for it.  Pursue something you love; spend more time with your kids; do your best to eke out every penny from your investments; and see what happens.

Hopefully you find something you love and can be even more successful at.  Worst case, you come back to being a successful real estate agent just to provide for your family...

[Andrew Syrios]

nothing wrong about taking a break. I love to go backpacking in different parts of the world. Give that a shot. But if you completely 'retire' I think you'll get bored. I know I would.

[Adam F]

Sounds like you need a break. 

[James Park]

@Adam Haman

Thanks for sharing. I am also a broker and RE investor in Northern Suburbs of Atlanta and have similar thoughts as you time to time. Personally, i think being a realtor is a great retirement career if you enjoy it. In the beginning i would take on every client that came my way, but now i realize how important it is to work with clients who value you and your time and say "no" to the clients who emotionally drain you.

I think it is very important to plan your vacations and take time off, reflect, and recharge. I also love going to the beautiful beaches especially in the Tampa area (Clear Water, Siesta Beach) like @Joel Owen and just watch and listen to the waves in order to reflect and recharge.

All of us are given only one life, and there is no rehearsal to life. I am only 4 years older than you, but i don't want to waste time pursing things that have no value or meaning to me. I guess i am lucky to see first hand my father's life who passed away two years ago. His priority in life was his business, everything else took second place. It is was only the last 5 year of his life that he realized what was truly valuable to him. His health started to fail and God took him to heaven at the young age of 65. 

I see my 2 little twin boys growing up so fast and realize that i can't go back in time. They deserve more of my undivided attention. My wife and I often talk about how happy we would be to have a daughter. I believe that my most valuable asset and gift from God is children, not the real estate that i hold.

Success is more than reaching a certain networth or passive income. It is not about owning 100 SFRs or a making a million dollars a year or reaching a certain status in life. It is about becoming the person you are meant to become. It is about being a great husband, a great father to your children, having a wife who loves you and supports you, helping and influencing the lives of others, and having great friends who truly care for you. When i see a man who possesses the qualities i had just mentioned, i consider that man to be a successful man with full of wealth.

My wife and I both have a heart for under privileged children and serving in a orphanage. We see such a great need just in our backyard here in Atlanta.

Time is too short not to spend our precious time in areas that are truly important to us.    

 



Originally posted by @Adam Haman:

Good afternoon!

I'm a Realtor and RE investor here in Denver feeling burned out after a 5 year push. I've made decent incomes for the past 5 years (80-120k), and invested more than half of it each year in the best, newest rentals I could find. I'm considering "retiring" and doing something else.

I don't love being a Realtor; the hours in particular are difficult, I often don't feel like I can keep my mind from wandering to clients and pending deals, and I don't feel I've had domain over my own mind, or gotten away from work completely, in more than 3 years. I have 2 young kids that deserve better from me, and I want to give them my full attention.

We're established in a great home we remodeled in Denver with a $1300 mortgage. By the end of 2014 I should have monthly cash flows of about $4,500 after vacancy and expenses. This is roughly equivalent to our monthly cost of living, minus expensive vacations. I have 9 outstanding mortgages, including our principal residence. My wife does not work. As such, I think I could pursue a job with less stress, more coworkers, and more job satisfaction. Regardless of pay, I think we could make a run of it. Retirement should be taken care of with 8 investment properties fully paid off when I am 62, and increases in rent in the meantime will grow our monthly income with inflation.

What am I missing? Am I jumping the gun on this? Does anyone live happily on a similar monthly income? Has anyone "retired" and then regretted it? Is it difficult to get back in the game?

Thanks everyone for your input. How can I help you?

[Account Closed]

Another thing to consider...most other industries or corporate type jobs that pay over $80-100k are going to require some long hours as well. Not at night per se, but you won't have control of your time the way you sort of do now. When you have a boss and they say jump, you usually have to answer how high. Just something to think about as you evaluate your options.

[Erik Drentlaw]

I am curious how you have generated a cash flow of $4500 a month? Assuming you are leveraging the properties a good deal is about $200 a door. 4500/200 is 23 properties assuming SFR. That is incredibly impressive for five years and roughly $250,000 invested.

Im not doubting you, I am looking to follow a similar path and was hoping you could share how you got there!

Again congrats!

[Jay Hinrichs]

@Adam Haman 

I had similar circumstances.. started selling RE at 18 making 60k a year in 1975 when my buddies were pumping gas in CA for 1.35 and hour. But by the time I was 32 ish I had had enough of selling folks... Did well ... But I just went into other areas of RE that interested me.. HML Development Building... etc etc. So now 25 years later that's what I do I lend money to JV partners.. I develop RE and build houses. And have a lot of fun doing it.. I don't work with buyer or sellers anymore.. I do still have my CA brokers LIcense and OR brokers license and MS brokers license along with NMLS Mortgage bankers license in Oregon and even tomorrow I am taking the UST test that will allow me to be in 41 states. But the funny thing is I don't use any of them.. I just do deals have fun.. And living in ORegon its all about taking vacations to the sun....

Lastly everyone has their own threshold of expenses and what it takes to live.. but as time goes on that number goes up.. So what may seem attractive now 4500 a month I can pretty much tell you won't be attractive in later years. HELL my Obama care is 1500 a month for me and my wife alone. And if you have kids that are going to college etc etc. Unless you have trust fund or family money to help with that. Maybe you stay in RE but look at some other end of it..

I know it took me a few years to not feel weird if I was not working on the weekends. But developing lending and building require little to no nights and weekends.

[Sharad M.]

Hi @Adam Haman 

Congratulations on your success. It's a very personal decision. If you don't love being a Realtor, then you might want to take a break from it for a while. IMO, it will be a little unfair to your clients if you have to take them out on a day when you are really feeling burned out.

Honestly, $4,500/mo is not a whole lot of money. I agree with @George P. that it were $15,000 net that you were taking home, then that makes the decision much easier. You have couple of bad contingencies hit and before you know it you are in a bad situation.

I would take a break from it for some time. Give yourself some time to think more about what you want to do and then make a decision with a clear mind. You will never make a sound decision when your mind is not relaxed.

Great job on achieving this success and best wishes for your future success!

[Jeff S.]

I would spend some time adjusting your spending and see if being frugal appeals to you. You might be able to put money in the bank. If, after a while the desire for more income is growing then you can do some deals.

I personally like living on what I bring in w/o working but their are others out there that like the outflow. That could be the same for you.

[Account Closed]

Sounds like you don't want to be a Realtor anymore. But, you don't have to throw the baby out with the bath water. Try not to think of this "retirement" thing in black and white, all or nothing terms. You could step aside from being a Realtor, take time off (a year perhaps) to clear your head and pursue other possible avenues of income. Perhaps work part time at something.  Or, find something with more time freedom where *you* can decide when to spend time at work or spend time with you family and kids. Your kids are young.. but when they get older, more expenses come. Life also has a way of throwing curves and you'll need money you thought were going for *retirement years* to cover them. I would not all together *stop* working for years to come, if I were you. My advice, take some time off - my friend, it sounds like you need it! During that time, find something you love to do that can earn some extra income at. Explore other options that fit you and your lifestyle better. But don't *retire* from continuing to contribute to, grow and add to your income and savings during these fleeting *young* years of your life. It's better for you mentally and emotionally as well to continue to work, take on challenges and stay busy at some level. 

[Bradley Benski]

@Adam Haman 

Congratulations on your accomplishments!

From my experience it sounds like you are wanting a change of careers not a "retirement".  I'd say go for it!  Find what you like to do and do it.

At your age you are too young to retire.  When I was at that age I had the opportunity to do "nothing" for 6 months, and another friend could do "nothing" for 2 years.  You can only play golf everyday for about 2 weeks before going crazy!  Same with hanging out at the lake, anything more than a week and boom, get me out of here.

[Sharad M.]

Originally posted by @Jeff S.:

I would spend some time adjusting your spending and see if being frugal appeals to you. You might be able to put money in the bank. If, after a while the desire for more income is growing then you can do some deals.

 Jeff, I would slightly disagree with the above. IMO, voluntary retirement is getting to a point where you no longer need to work and can continue to have a comfortable lifestyle. 

If the OP will need to make changes to his lifestyle in order to reach his early retirement goal, then I believe it won't work out very well for the long term. 

I am not suggesting that he should be able to go on a daily shopping spree after he retires, but he and his family should be able to continue the lifestyle that they have gotten used to.

[Philip Cutting]

What a great bunch of posts.

Retire!  Take a few years (or months) off, do a sabbatical with the family.  Working for so long in a career that you don't like is a sure way to get burnt out before you know it.  

I think you might find that after 6 months or a year, you will get nuts (aka Board) and want to do something interesting and fun.  

Why did you pick RE?  Others have mentioned it, money isn't really why anyone works.  It's the needs that are met through money that we work for.  When you know what your needs are you can then work with your family to make real satisfaction for the lot of you!

Good luck @Adam Haman !

Phil

[Ed L.]

I kinda know the feeling.  I've been doing this for going on 10 years.  

If I were just acting in the capacity of a Realtor I would probably have burnt out by now.  Luckily the investing and rehabbing is complimentary and is highly rewarding to me.  

Keep your RE license.  You apparently are doing well as a agent, so don't throw it away.  Many people would love to have your earning capacity.  

Maybe consider hiring a assistant.  It takes off a tremendous amount of pressure and allows you to better serve your clients.  

If that doesn't work, scale back your business, refer off new clients, and take a nice long vacation once things are more manageable.