No, I’m not going to retire anytime soon… if ever. Last week I made the call and cashed in my retirement account. I emptied it, zero, I have no more retirement account. Based on everything I have been taught, this was a bad move, but I felt that it had to be done.
Growing up, I was always taught about the 25 year old who put $3000 in a mutual fund every year until he was 30 and then he stopped putting money in the account. He had a friend who procrastinated and didn’t start putting money in his retirement until he was 30 and he then put $3000 in the account every year until retirement. With 12% compounding interest, the guy who started putting money in his account when he was 25 would have more money at retirement than his procrastinator friend even though the early starter only put in $15,000 and his friend put in $90,000 of their own money.
I’ll be honest, I don’t know if those numbers work out. That is what I was taught and I remember the lesson well. I also know the power of compounding interest, etc. etc. To this day, I firmly believe that there are two types of people in this world, those who understand interest and those who pay it.
Switching gears a bit, I was taught that I am to follow my dreams and do what I feel is the right thing to do. It may not always be logical and it may even have an adverse effect sometimes, but you have to follow your heart. I believe strongly in a local economy that is dependent on people who generally know one another and support each other economically and socially. I believe that the solution to many of our economic woes is to support businesses that we believe in and that are transparent. I believe that we are much better able to do that when we know the people involved with the businesses we are supporting. I recognize that isn’t always possible, but the more we make it possible and really support our local community, the better we will be prepared for the problems that the big businesses (especially banks) are currently facing and are sure to face in the future.
I have a fair amount of confidence that my money in the S&P 500 index fund didn’t do much to support the local economy here in Toledo WA.
Last week I followed my hear instead of my logic and I pulled all the money out of my retirement fund. There will be a penalty, and I’ll be taxed on the earnings, but I’m excited about the opportunities. The next step is to sell our house in Kentucky (anyone want it?) and buy some property to start farming. The current property that we are looking at we would be able to own outright within 5 years, we’ll see if that goes through.
Currently we live in a travel trailer. We don’t have a lot of room. I don’t have a full time job. People think it looks pretty grim for us. Here is what I see: I get to spend loads of time with my family, doing things we really enjoy. We make considerably more each month than we spend. I’m as happy and stress free as I have ever been. You may say I’m trailer trash, I say that I’m living the dream.