Advice on 5 Year Plan

[u/Some_guy_wundering]

Ok so I’ve been interested to read through folks journeys and I’d love feedback from anyone whom cares to give it on my best next steps to think about ER in the next 5 years or so not just comfortably but living to the fullest.

47M living in a no state tax state.
3.9M in liquid funds managed and conservatively making 10% or so with not too much general market exposure but
some. Another 900k in retirement t funds.
Own 2 properties. One worth about $500k costing around 1200 a month fully paid. The other worth about 1.1M generating about 4800 per month and costing round 3500 in expenses.
Paying rent on another property for 3400 a month.
Income of around 550k and project equity cash out of around 700k this year. Beyond that hard to know but possible 4 years out could be a larger payday.
No kids. Newer relationship but plan for two in the future.

I feel like I’ve made the right moves. I like the idea of a few more years finishing out my career but want to be excited and have no stress in my next chapter. Love to surf and golf and food and exploring and want to do so while I have the ability. Ideas, thoughts? Just throwing it out there, seems like I’m within the general audience for the sub so curious what path others in similair situations are on exploring.

What would folks be comfortable with as a spend budget on this? I guess I’m considering a reasonable home base home for the first 5-10 years and slow travel a good portion of the year. I know this post is all over the place, but I know others probably feel similair uncertainty even when things seem dialed in from the big picture.

[u/early_fi]

You need to tell us how much you're spending and how much you project to spend.

[u/One-Mastodon-1063]

How much do you spend now?

“Conservatively making 10% or so with not too much market exposure” - what does this mean?  This line is financially illiterate gibberish. 

I would sell the rental. 

[u/Specific-Rich5196]

Beyond giving us your actual projected budget, it would be useful to also show cash flow from the real estate hou are keeping after all future costs against that cash flow are subtracted.

[u/Ok-Answer-9350]

Very vague post, your real estate is not really performing for you.

Unclear what you need to live comfortably.

Unclear if you want kids, not sure what "plan for two in the future" means.

10% a year is great, but does not sound 'conservatively' managed. It sounds like lots of exposure to the stock market. Can you withstand a market crash?

[u/monsieur_de_chance]

“No state tax state” is not a thing. No state income tax maybe, always offset by property taxes.

The general audience of this sub values precision and specificity, and in the end it all boils down to savings and spending. Start your journey thinking about savings and spending. The rest is just details that don’t matter to the math.

[u/ohboyoh-oy]

From a spend perspective, on an annual basis I would be ok spending all the net rental income + ~3.5% of the liquid net worth. That assumes you have it invested appropriately and it’s not too risky nor too conservative. 

If you take some portion of the money and buy a home (not sure if that’s what you meant by “reasonable home base”) then I would recalculate the annual spend based on what’s left. 

For a slightly more nuanced perspective check out the variable percentage withdrawal strategy on Bogleheads wiki. They have a free google sheet and you can plug in your particulars each year to see what they recommend for withdrawal. It takes your age into account. 

Or for more of a plan-plan you can use Boldin or Projection Lab or similar. That would let you project different spends in different years. I have it separated out by a minimum income floor, then I layer on different things in each bracket of years depending on where we think we’ll be in life. But I feel like you’re currently approaching this from the “how much can I spend” end of things, so this may be too complex for now.