The Bingo Bobbins 5 Year Plan

My plan for early retirement

Why should you job stack? Some people do it in the hopes of snorting cocaine off a hookers ass on their 100 ft yacht one day. And that’s fine, you do you homie. But, consumption-maxxing is not the only reason one might have to stack multiple jobs. For those that are content to live the simple life, I offer instead the prospect of early retirement. This is my current “5 year plan” for being “Financially Independent, Retired Early.”

When I say retired, I just mean able to live off of passive income and not be required to work for money. It’s true that many people actually report feeling less satisfied once they retire, because they no longer have a direction in their life, and they don't really know what to do with themselves. I don't foresee having this problem. I actually have a lot of things that I would like to do, but they don't necessarily pay well. Like writing. I'm actually a very self-directed person. To me, being financially independent is more about having the freedom to pursue things that I find interesting, rather than what might be most lucrative.

So with that out of the way, let's look at where I am now. The first thing I regret to inform you is, for the past year or so, I have been slacking on my stacking. Part of this was the fact that the job market has been pretty shitty, but mostly it was having a newborn and being more focused on that then on hyper-optimizing my income. Basically, the start-up I was working for as my J2 went tits up right as my daughter was born. In fact, I was actually still on paternity leave when I got the word that we were all being laid off. You could imagine if it had been my only job, that could have been quite stressful! This is why job stacking is key to success in the modern economy, by the way.

But for awhile I had only one job. This job is my ol' reliable, I've worked there now for over 4 years. It was the first legitimate contract I got when I first started my "consulting" business back in 2021. The workload has always been extremely low, it's basically the perfect job for stacking. I consider it my back-pocket UBI while I pursue other work. So, for about six months I did basically nothing in my fake email remote work job, while spending time with my new baby and helping out around the house. Then, finally, I got a new J2 as a government contractor, but this job was uniquely terrible. I bitched about this job a little bit in my Notes at the time, so I won't go into detail on here, but I ended up just rage quitting after about 2 months. Again, another advantage to job stacking is that you can just quit a job you don’t like without necessarily having to line something else up first.

So anyway, for the past three or four months, I have been working my one job while pursuing potential J2's. The fact that it took me, as a fairly experienced developer with lots of relevant work experience, almost 4 months to find a job is an indication of the current job market. Although I will say the LinkedIn spam has been picking back up just in the last week or two. Anyway, I did finally end up getting a J2 a few weeks ago, and so now that I am back in the stack life, I thought it was time to "update" my early retirement plan.

First, I'll review my budget from when I only had one job. It's contract work, and it pays $70 an hour - which isn't fantastic, but in terms of effort-to-compensation ratio it's pretty amazing. It ends up being $2800 a week, which I budget thusly:

Because this is corporate income, I don't have withholdings, so for the first paycheck of the month I just keep the entire thing in reserve to pay my taxes. This is 25% of my income, which is actually a little more than I need, because my effective tax rate usually ends up being around 20%. But, it's better to have a little padding than to come up short at the end of the year.

With the next two paychecks I pay $4500 on my mortgage, and put the remaining $1000 or so in my investment accounts (more on that later). My mortgage is not actually $4500 a month, it's only $2000 a month, but I am paying extra towards the principle so that I can pay it off faster and eventually live rent free. This is a key component of the early retirement strategy. Housing is the single largest line item on most peoples budgets, if you can pay off your house and live rent-free you've drastically reduced your cost of living, and thus you need less money to live on.

Currently, I have about $120k left on my mortgage, and the way mortgages are structured, a much higher percentage of your payment goes to interest early in the life of the mortgage, and as you get closer to paying it off, the majority of the payment ends up going to principle. These days, only about $300 worth of my mortgage payment goes to interest, so I am effectively paying around $50k a year towards principle. This means, I will have my mortgage paid off in roughly three years.

With my final $2800 check of the month, I am typically able to cover the remainder of my cost of living. This covers paying off my credit card for the month, paying my utilities, and so on. There have been a few times over the past year that I overspent a little bit, usually due to incidentals like when my AC broke last month and I had to call a repairman. In these cases I could have simply paid a little less on the mortgage to cover it, but I've opted instead to just use some of my savings. Because I've been job stacking for awhile, I do have a pretty good chunk of cash on hand. But, obviously this would be unsustainable in a retirement scenario.

Based on this current budget, I've tried to come up with the minimum amount of passive income that I would need to be generating in order to not work. If I was not making corporate income, I wouldn't have to pay corporate taxes, so I wouldn't need the $2800 a month that I am currently setting aside for that purpose. I also won't have to pay capital gains taxes on investment dividends unless I make more than $96k a year in dividends. Once my house is paid off, I won't need the $4500 a month I am putting towards the mortgage. And obviously, if I am living off investment income, I don't need to be reinvesting that $1000 a month that I am currently doing. So really, it's just the $2800 for living expenses that I would need.

But, I think $2800 a month would be a little tight, especially considering incidentals. And just because you don't have a mortgage doesn't mean you don't have to pay property tax. Right now, about $500 of my mortgage payment goes to escrow, and the state just readjusted the valuation on my house, which means it's probably about to become $1000 a month. So, I've adjusted my goal upwards to $5000 a month in passive income just to play it conservative.

$5000 a month ends up being $60k a year, which is around the average national household income, so I feel like I would be able to maintain a comfortable middle-class life on that income considering I won’t have a mortgage. Plus, remember, I also don't have to pay capital gains on those divvies. So how to get there from here?

My strategy has been mainly to put money into low growth but high dividend investment vehicles. Mostly I've been interested in QYLD, which is an ETF that tracks the Nasdaq and uses a covered call strategy to produce dividends. More recently, I've been putting money into SPYI as well, which is a similar ETF but tracking the S&P. Now, as an aside, there are some laws about providing "financial advice" that people misunderstand, leading to retards on r/wallstreetbets posting all caps THIS IS NOT FINANCIAL ADVICE at the bottom of their schizo poasts, as if anybody was confused. The law is designed to go after people who are involved in "pump and dump" schemes. You are totally allowed to tell people what stocks you are buying and why, you don’t need to explain that it’s not financial advice. We all know it’s not financial advice.

So this is my plan. I done much less due diligence than I should, and determined it to be a strategy consistent with my personal risk tolerance. Guh.

If you know, you know

Anyway, at 12% interest, I would need about $500k in QYLD/SPYI in order to get my $5000 a month in dividends. I currently have a little over $200k in these ETFs, mostly in QYLD but like I said, I've been acquiring SPYI as well lately. Obviously, adding a measly $1000 a month to this is not going to get me to $500k. Luckily I got a second job.

The new J2 is a little less money. It's only $65 an hour. It's also a W2, which means they take out withholdings from my paycheck. So, in theory I should be making $2600 a week off J2, but they are taking about ~$700, or 25%. So, my weekly take-home is $1900, which ends up being just about $100k a year in take-home pay. If I yeet this entirely into QYLD/SPYI, then I will reach my goal of $500k in three years.

But, if I'm being realistic, I'm going to blow some of that second paycheck on frivolities. Of course I am. So, let's use a conservative estimate and say that I will put half of my J2 income towards my investments, or roughly $50k. That means that, in three years, I will only have added $150k to my dividend portfolio, for a grand total of $350k. But, remember, in three years I will have paid off my mortgage. So, that 50k a year that I'm paying towards the mortgage principle I can put instead towards dividend investments. So, for the final two years, I can safely calculate that I can put 100k towards QYLD/SPYI. So that will get me to $550k, hitting my goal with even a little cushion.

But, of course, this plan relies on me continuing to work these same two jobs for the next 5 years. The J1 I've already worked for 4 years. I'm continuously baffled that I've worked there this long, and the project that I'm currently working is wrapping up. But, despite what it sounds like, I'm actually a great employee for them, based on exceeding the aggressively low expectations. So they may decide to keep me around and move me to another project, or maybe I luck out and they leave me as the "maintainer" of this current project.

J2 is a six month "contract to hire" position, and while I've never not been offered a job at the end of a contract to hire arrangement, it definitely seems, based on what I've seen so far, that they over-hired for this particular project. So, if I were them, I wouldn’t renew my contract. They probably will, but I don't want to count on it.

It's also been a bit of a terrible job market in tech lately, and I don’t want to be in the position again where I only have one job and I have to job hunt for months. So, I've been continuing to interview for any remote position that floats through my inbox. I currently have one in the pipeline which, if I get an offer, I will probably accept. I don't know if I can juggle three jobs and maintain my current work-life balance. However, if I get this new potential J3, it is at a higher bill rate than my current J2, so between the two of them, I would probably drop the current J2. But, if I did keep three jobs going at once, that would also obviously speed up my retirement timeline considerably.

Also, as an aside, I forgot to roll my SPY calls yesterday so, as of this writing, I just sold 100 shares of SPY for $562 a piece. I will probably just take that $50k and drop it all into SPYI as well.