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Early Retirement Case Study: Doug Nordman

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Wealth Mentor have a series of really good podcast on financial planning and wealth building.

Being busy at work its great to be able to choose to read or download the podcast to listen.

I am really envious of folks who have a good pension for retirement. We don’t get that now in the US or Singapore. The last I heard was 1 month ago at the cafeteria where they say some civil servant are under this pension scheme.

Here are some of the key takeaways after I read the transcript

  • 20 year military career. As long as you serve 20 years you can get a inflation linked pension. The wife is also in the military and on pension as well
  • They do have a rental property but don’t look at it that way since relatives were staying in it. There was mortgage on that rental property still
  • Highlight the problem of rental property that are faraway as having expensive problems
  • Both of them spend their earning years having things fully paid for (on a submarine), and that they don’t succumb to the urge of spending big when they retire
  • Values based spender: Tend to enjoy experiences more than tangible stuff. They enjoy surfing and reading more than travelling, which are really low cost enjoyment versus travelling which can be expensive
  • There seems to be a heavy focus on cash flow, rather than the amount of assets and cash saved up. Against the idea of “how much I need to have to go into retirement?”
  • Psychological tendency of military men to think that since they lived a dangerous life, they should indulge in certain expensive material things, which they seldom would use
  • Retirement Investing Journey: Tried active investing in mutual funds (unit trusts) with high expense ratios, picking stocks and shorting stocks as well as technical analysis but in the end chose to do passive investing and another portion in Warren Buffett’s Berkshire Hathaway (BRK/A, BRK/B). He does not have bonds allocation, following research that shows for folks with pensions they do not need a bond allocation.
  • He only uses a portion of his assets to satisfy his active management  curiosity
  • He also talks about immersing in Angel Investing and the lessons learnt along the way
  • Psychological behavior of retirees to be more conservative in spending during a recession or bear market even though theoretically they are able to draw down a X% amount. If you cut back, it increases your survival rate as well
  • Talk about the mistakes in buying tech mutual funds and stocks in the dot com boom and crash and switching to exchange traded funds that are broadly diversified and riding it down all the way
  • Talk about giving back to the military now by writing  very focused articles for them
  • Goal Management and Self Management in retirement

[Podcast | Transcript ]

To learn more about planning for retirement, wealth building and issues related to retirement, do take a look @ Planning your retirement right now

Kyith
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