The following is a guest post from David, a Financial Samurai reader and ex-government bond strategist in his 60s. We had a fantastic exchange over e-mail and I invited David to share his wisdom about money. After all, the best way to learn is to learn from someone who has been there before. Take it away David!

I sent a long e-mail to Sam with various musings on aging, retirement, debt and all somewhat relevant to the Financial Samurai audience. As punishment for the missive, Sam asked if I’d be willing to write a guest column or, alternatively, do community service. I opted for the former.

I spent the bulk of my working life as a strategist for various investment firms, essentially forecasting the direction of US interest rates for institutions like central banks, pension funds and anyone else with a few billion in assets who would listen. I did that for better than 30 years. For a large chunk of that I was the top-rated strategist in the field, on financial news programs a hundred times, and getting around the world.

Business class had its advantages, like at the end of one trip that in the space of five days found me in Riyadh, Zurich, Rome, London and finally Reykjavik. Reykjavik was not on the schedule, nor was the heart attack I had on the flight home that forced my flight to land Mid-Atlantic. Still, I got to stretch out nicely on the bed in business class.   

Retirement moment came just past 60, not entirely by self-determination, but not unwelcomed either. I decided to take the career down a notch, writing from home versus commuting three hours a day, five days a week, for the equivalent of 16 weeks of vacation, to a job I’d grown tired of.

Don’t you know it, shortly after that I was diagnosed with multiple myeloma, an incurable blood cancer. There are treatments, and oncologists say I could go on for years and new treatments are coming that hold promise.  

Then there’s the dark side of 50% five-year survival rates. And to think my biggest retirement worry was my money lasting into my 90s. Myeloma puts things in perspective, especially the time I have. Maybe what follows will give others some perspective on that. 

Although, after eight years, I failed to stay retired, my plan is to return to early retirement glory with two kids by September 1, 2022.

From now until September 1, 2022, our plan is to accumulate either $1,500,000 in new capital or figure out a way to consistently generate $5,000 a month in additional gross retirement income.

As of now, according to data provided by the California Association of Realtors, my family has a ~$60,000 a year income shortfall to live a middle-class lifestyle in San Francisco.

Based on the median home price of $1,600,000, one real estate group estimates that a household needs to earn at least $310,000 a year to comfortably afford a median-priced home. The calculation is based on a 20% downpayment and spending no more than 28% of monthly gross income on a mortgage.

Is there any wonder why I’ve been aggressively investing in heartland real estate since early 2016? Affordability is an issue here. But given I’m unwilling to move to a lower cost area of the country, I best hedge by making sure I benefit from the obvious demographic shift.

If we can accumulate an additional $1,500,000 in capital or consistently generate $60,000 a year in additional gross retirement income, then my family should have the means to stay in San Francisco after September 1, 2022.

If we fail at achieving either financial goal, then we will admit defeat and banish ourselves to Honolulu, Hawaii where the median home price is roughly 40% cheaper. Based on the lower cost of living in Honolulu, a family with two kids should be able to live a comfortable lifestyle off less than $200,000 a year. Further, I’ll also be able to more consistently tan my cheeks.

If you want to retire early, feel free to emulate my early retirement master plan to get things going.

Happy 2020! May this new decade be better than the last.

One of the things I enjoy about the Financial Samurai community is that you guys keep it real. After announcing that I plan to be more entrepreneurial and less focused on retirement, you guys gave an outpouring of support and encouragement. This means a lot.

When I was trying to survive the investment banking meat grinder in my 20s and early 30s, I always saved in a special folder personal thank you e-mails I got from colleagues or clients. Their words of encouragement were more valuable than money.

On the flip side, one of the realities of keeping things real is that I’ve also got to face hard truths. And the latest hard truth given to me by some regular readers and many casual observers is that I’m an early retirement failure.

The Setting Every Community Up For Retirement (SECURE) Act recently passed and it will go into effect for all Americans in 2020.

The goal of the SECURE Act is to make it easier for Americans to save for retirement and live comfortably in retirement. Based on the data, we know that the median and average American is severely lacking in retirement funds.

At the same time, we also know that the average American is truly living the good life by spending $61,224 a year of their $78,635 income. When you’ve got Social Security, a belief that the government will save you, and a YOLO mentality, it’s logical to live it up with your one and only life.

Just the other day, I decided to order a sangria at my favorite tapas restaurant instead of a plain lemon water because I was feeling the YOLO in my veins. Damn, it feels good to go a little crazy with my money sometimes due to aggressive retirement savings.

In a previous article, I highlighted the negatives of early retirement nobody likes talking about. It might have seemed like the negatives of early retirement outweighed the positives, but I assure you that’s not the case at all.

Retiring early has by far been my “best career move.” Originally, I thought I would just live a frugal lifestyle off of roughly $80,000 a year in investment income in 2012.

My wife joined me three years later when she also turned 34 so we could both live free and frugal together. We thought we’d rent or buy a small two-bedroom, one-bathroom apartment near or on the beach in Hawaii and live out our remaining days.

Instead, our lives turned out a little differently. Let me share with you all of the surprising benefits of early retirement I never anticipated.

To make sure you’re being financially responsible, always look at the latest economic data to determine whether you’re saving enough, investing enough, and earning enough to take care of your family. The last thing you want to do is wake up 10 years from now and realize you didn’t plan properly.

Given housing cost is usually the biggest cost for a family, I’m aways paying attention to the median home price and interest rates.

When the Q2 2019 data came out showing that a San Francisco household needs a minimum $343,400 income to buy the median sales priced house, I was floored.

For years, I thought a $250,000 a year household income was enough to live a middle class lifestyle for up to a family of four in San Francisco. After all, I’ve been living in San Francisco since 2001 and intimately know how much I need to lead a comfortable lifestyle through my musings on Financial Samurai.

It disappoints me that after deciding $250,000 was a enough for a family of three to live a happy early retirement lifestyle in 2012, and finally getting there in 2019, Compass Real Estate through data provided by the California Association of Realtors decided to move the goal post!

I was scratching my head at the $343,300 figure because my family lives just fine off less than $200,000 gross a year. It also helps that our investment income is taxed at a more favorable rate than W2 job income.

Instead of complaining, I faced reality that perhaps my income was simply not enough. I got motivated to try and accumulate more money.

Then something funny happened. The numbers changed again.

As President Obama said in a July 13, 2012 campaign election speech, “If you’ve got a business, you didn’t build that.“

When I first heard Obama say this sentence, I was taken aback. I had been working on Financial Samurai for three years from about 5 am – 7 am and from 10 pm – 12 pm after working 12 hour days in finance. If I wasn’t building Financial Samurai, who was?!

I had also recently left my finance job because I wanted to be absolutely free. All I really wanted to do was write while traveling around the world, so that’s what I did.

But as I’ve gotten older, I’ve come to understand more of what President Obama was talking about. Just like it takes a village to raise a child, it takes a lot of help along the way to achieve your goals. Besides, Obama was referring to not building the roads and bridges that helped your business prosper along the way.

I firmly believe that it was mostly luck (~70%) that helped me reach financial independence at age 34. Of course, effort is also required to get ahead, but it’s not the main reason. There are plenty of people who work much harder than you or I, yet will not achieve what we have.

The more we can recognize our luck and not take our luck for granted, the more prosperous we’ll become. I encourage you to list as many fortuitous events that have happened in your life. This way, you’ll appreciate more of what you have and fight harder to achieve your goals and freely help others.