How To Retire Early And Live Well With Less Than A Million Dollars
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How To Retire Early And Live Well With Less Than A Million Dollars [Bargain Price] [Paperback]

Gillette Edmunds
4.2 out of 5 stars  See all reviews (35 customer reviews)

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Editorial Reviews


A rare 5 star offering -- worth reading. Retire Early has yet to review a book that gets essentially everything right on the subject of early retirement, but Gillette Edmunds', How To Retire Early and Live Well comes very close. This is a very personal book by a former tax attorney and journalist who retired in 1981 at age 29. He details what he has learned about "living off his investments" and provides some personal examples of how to ride out the ups and downs of the market. All in all How To Retire Early and Live Well is an excellent book and offers some very thought provoking ideas on the merits of diversification. It's one of the few volumes that merit 5 Stars from Retire Early's reviewers. -- The Retire Early Home Page

From the Publisher

Millions of readers have amassed nest eggs in savings, retirement plans, stock options or company stock, real estate, inheritances, or businesses they have built up over the years. According to the September 20, 1999 issue of Barron's there are six million households with $1 million dollars or more. The author estimates there are 15 million households with $500,000 or more. Most of these people can retire right now and do not know it.

HOW TO RETIRE EARLY AND LIVE WELL WITH LESS THAN A MILLION DOLLARS tells readers if they have enough to retire, and once they retire, how, step-by-step, they should invest to be certain their money will last the rest of their life. The author did not want anyone just starting retirement today to go through the confusion and learning process he went through. Therefore, he set out exactly what they need to do to live the rest of their lives on their investments. The author's message is encouraging. You can retire early in style with less than a million dollars and over the years, you will watch your nest egg grow larger and larger. Just follow the instructions in the book. You won't out live your money; you won't be forced back into a job you hate; taxes will not hurt you; you will survive market crashes; you do not have to pray that your rich relatives die soon. Enjoy your early retirement and if you want to worry, worry about where you are going on your next trip not about money. The money will grow and support you better and better over time.

This book is intend for any reader who wants to retire early and wants to know what it takes as well as all current retirees, savers within five years of retirement, anyone who has put together a decent size nest egg, anyone living partially off investments and partially off social security, pension payments, part-time work, consulting, or other forms of income, and the professionals who are advising these people but have no personal experience with living off investments. There are many professionals today who tell people they need two million dollars or more to retire early. This book refutes that myth. The book will also be of interest to people who are just now thinking about retirement and wondering what it takes to get there and what it is like when they are there. However, this is not a book for people looking for hot stocks, internet IPOs, day trades, shorts, options, derivatives, leveraged strategies, investments named after animals. This book is about long-term investing. Long-term here means 30 years not 30 days or 30 minutes.

From the Author

In 1981, when I was 29 years old, the company I was working for fell apart and all the employees were laid off. At the time, I did not know if my wife and I had enough investments to live off for more than a few years. Though a tax expert, I was not then an expert on investing during retirement. Not only did I not know if I had enough to last five years, ten years, or a life time, I could not find anyone else who knew. When the money started to run out or when an interesting job came along, I figured I would just go back to work. Over the years, I read books, talked to professional investors, took classes, studied every type of investment I came across, and learned to repeat my successes and stop making mistakes. My investment skills improved, and, even though my spending increased, my assets kept growing. By the time I had doubled our assets I realized I was not going back to work. HOW TO RETIRE EARLY AND LIVE WELL WITH LESS THAN A MILLION DOLLARS is the distillation of all the knowledge I gained over the last 19 years. It is my wish that no reader go through the painful learning process I endured. The system set out in this book will minimize your financial fears during retirement and maximize your serenity.

From the Inside Flap

"Gillette gives clear, simple, yet sage advice. Having witnessed the positive results of his investment skills over a number of years, I know the plan outlined here will work for me just as it has for him." AL HIRSHEN, JD SENIOR POLICY ADVISOR, US AID This is one of the first guides to a prosperous retirement written by an author who has more than prospered in retirement. How to Retire Early and Live Well contains both simple and advanced strategies that show the benefits and perils of investing in stocks, bonds, international stocks, real estate, private businesses. It also shows you how to achieve outstanding, steady returns every year. Master the secrets of this real-life guide to investing and you will:

Learn, using a personal equation guide, when you can retire

Maximize the return and minimize the instability of your portfolio

Reduce your living expenses, not your lifestyle

Have fun investing during retirement

Reduce your taxes to as low as zero

Increase your nest egg during retirement "How to Retire Early and Live Well is necessary reading for those of us who are smartly strategizing for our financial freedom. I will recommend this book to clients and colleagues alike." CAROL SOLOMON, PH.D., SUCCESSFUL AUTHOR, FOUNDER OF TRANSACTrONAL ANALYSIS COMMUNITY SERVICES, INC.

About the Author

Gillette Edmunds graduated from Stanford University with a B.A. in English. He received a law degree from University of New Mexico and a Masters of Law in Taxation from New York University. He has practiced tax law and estate planning and written a monthly newsletter for high-income investors. He ghosted with B. Ray Anderson the bestseller How You Can Use Inflation to Beat the IRS. Edmunds has studied every possible investment solution for a lifetime investment. He learned from experience that investment returns are much more important than taxes. It is better to have high returns and high taxes than low returns and no taxes. In HOW TO RETIRE EARLY AND LIVE WELL WITH LESS THAN A MILLION DOLLARS he shows retirees how to have both high returns and low taxes. Over the last 19 year, Gillette has invested in U.S. stocks of his own selection, and used money managers and mutual funds to invest in stocks. He has bought and managed real estate, set up and purchased real estate limited partnerships, and bought real estate investment trusts, hired real estate managers, and put together real estate investment syndicates. He has invested in individual foreign stocks, foreign stock mutual funds, and index funds. He has also invested in small businesses, owned oil and gas interests, and invested in many types of bonds. About the emotional aspects of investing, he learned the hard way; from experience. Being an expert on the emotional aspects of investing is like being an expert on surviving multiple divorces. You become the Liz Taylor of investing. You wish you did not have to go through the learning process but it is valuable experience and for Gillette has always lead to higher long-term returns and greater peace of mind. This is valuable experience that he passes on in HOW TO RETIRE EARLY AND LIVE WELL WITH LESS THAN A MILLION DOLLARS so readers do not have to go through the same ups and downs he did. It is Gillette's hope that all r! ! eaders will benefit from his experience and have a serene and prosperous retirement. Gillette Edmunds is married, has two children, and lives in Northern California. For more information go his web site,

Excerpt. © Reprinted by permission. All rights reserved.

Chapter One Can You Retire Today?

For anyone wanting to live off their investments, the big question is, "do I have enough to last the rest of my life?" I answer that most middle-class Americans-including me- could live comfortably on the investment returns from $500,000. Of course, the precise answer is a function of your lifestyle and investment return.

If you have $100,000 to invest and no other source of income, you will only make it if you can live very modestly. Indeed, at the level you would on welfare! An average, educated, experienced investor can reasonably expect to make 10% a year for life. This would mean $10,000 total return per year. Due to inflation, living expenses will go up over time. So some of the $10,000 must be reinvested to cover future increased expenses. Taxes must also be paid from the $10,000 income. A genius could be hired to invest the $100,000 and with luck a 20% lifetime return could be achieved. But the genius would have to be paid a genius's wages. And most investment geniuses become average investors over 20 to 50 year periods. Few people other than beach-combers can realistically make it on $100,000.

At the other extreme, $1,500,000 is more than adequate for a family of four to live comfortably with only average investment results. Beginning with considerably less money, I and my ex-wife and our two children lived extremely well for 18 years. Between us, we now have three times as much capital as we began with in 1981.

There are five variables which determine whether or not you have enough to live on the rest of your life. The five things you need to know are:

Total expenses per year including taxes,

Total capital to invest,

Future increases in expenses,

Investment management fees,

Annual total return from investments.

The first four of these are reasonably predictable. The fifth, annual total return from investments, will depend on the strategy you adopt and how you are able to execute it and live with it. The higher-return strategies also involve higher risk and, for some, an emotional roller coaster.

Begin by figuring out how much cash you will need each year to pay all your expenses including taxes, money management fees, if any, and reinvestments to cover future expense increases. Then calculate the net amount of investments you have to live on. Divide the expense figure by the net investments to arrive at the annual percentage return you will need from your investment. Easy, right? Now comes the hard part.

Having calculated this target investment return, you must now invest to produce this return every year. For example, if the Thompson family needs $80,000 a year to cover all their expenses, taxes, reinvestments and money managers, and they have $900,000 in net investments, they will need to average almost 9% a year from their investments. If they follow the suggestions in Part II, they have a very good chance of living for generations off their investments. The formula for determining what investment return you will need is found in the box on page 19. Each part of the formula will be explained below beginning with your expenses.

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