Thread: Semi Retirement

I am 52 years old, Ive been in the same job (manufacturing) for over 20 years, real estate has been good to me the last few years, Im in a rut in life and considering pulling the pin on it all and semi retiring.

I think I may be in a position where I can take the risk of leaving 'work' as I know it and do something for myself to earn a bit of an income.

Has anyone else done this? Especially at my age?
Looking for thoughts on the subject.

My passion has always been fabrication of all sort of things. Every time I build something or fix something I always get people wanting them or suggesting "you should do this for a living" etc etc. Im sure most of you have heard it all before.

Up until now Ive always liked the idea but Ive never been in a position financially to be able to take the risk.

I have a fair amount of workshop equipment but I am seriously considering adding a decent sized metal folder and guillotine to my gear and perhaps dabble in making the odd 4WD canopy, perhaps a trailer or two every now and then and even some other larger camper style projects.....all of which ive done in the past so none of it is foreign to me.

I dont think for a second Id be making a consistent and high income that comes with a regular job but I do think I could make enough selling the odd project.

What are your thoughts? Risky? Poor decision? Great idea?

Yes, I am 51, it takes planning and a clear view of what you need and want in life.
I will give a short description of how I have explained this to a few people.
Please don't take to much notice of the numbers, they are just for explanation purposes. Your numbers will be different to my numbers. My numbers may be different to the example. Also I am not providing financial advice, just an idea for you to consider.

I have come up with an amount that for me, I believe my wife and I can live a basic life on. Lets say it is an average of $100 a day. So for $36500 a year I can cover all my bills, eat, own a very modest car and update as required and have basic entertainment. If I index this for inflation I have a worst case scenario of what I need to exist.

I have a second amount, lets say $200 a day or $73000 a year. This would give me, what for me would be a very comfortable life.
I have a third amount, lets say $300 a day or $109500 a year after tax. For me this would cover everything that I would want for the best life I want to live.

As I said don't take to much notice of the numbers, if you like to travel first class, update your Aston Martin each year you may need different numbers. Also if you want to live self sufficient in a small hut in the Tasmanian wilderness your three numbers may be quite low.

To take the jump, in my opinion you have to have an understanding of what the basic life will cost and is it achievable. Lets say you have some savings, some rental income and super you can access at 60 and no debts. Using a program like this https://www.calcxml.com/calculators/...kn=#calcoutput you can see if you think you can survive ($100 a day) until 80. A lot of over 80's tend to spend less on entertainment and such. In ten years time you can review and maybe aim for 85.

You can also have an idea of how much you need to earn to achieve your ($200 a day) lifestyle.
The ($300 a day) is to keep you grounded. If I had to I could spend $1000 a day but I don't think I would be any happier. As your assets or super grows, maybe an inheritance or lotto win, you can taper of your earnings and still achieve your ($300 a day) lifestyle.

Now you know what you need you can work out how you can achieve it, and is it realistic. If it means making 200 + trailers a year, you may need to consider other ways.

My strong advice is be very honest with yourself. Decide what you want out of life before working out the dollar value. When I say yourself, if you have a significant other, make sure you know what sort of life they want.

There is a bit more to this and how to achieve it, but it is an introduction.

Steve

I am the same age as you and also have a decent amount behind me financially with a modest passive income. I have tried what you are looking at with mixed results. I did manufacture one product that I sold around 250 grands worth, but over an 8 year period. Other than that not much success.

In my experience when people say I should make stuff and they would buy it, the bit they don’t mention is that they assume I can make it for nothing and sell it for less.

I have found working for someone else part time has been the best bet for me to be semi retired. I have a lot of skills, done lots of welding to make a crust but have spent most of my life driving trucks or operating earthmoving equipment. So I am always in demand and can pick and choose when I work and how much.

Cheers Andrew

I fully retired when I was 58 and had all sorts of plans, including to work part time and making a few things for sale to make a bit of money on the side. Instead I ended up doing volunteering for about 5 years and found that more satisfying, although that eventually went a bit sour as I found I didn't have enough time to do my own projects. Then I developed a bunch of health issues which slowed things down a fair bit.

I still make a few things for sale but but find I get really bored if I have to make more than a couple of the same thing . Unless its very simple I also find the money doesn't really make up for the stress of getting the product just so for the client, getting product finished to within an agreed time scale and the fact that this takes time from other projects. As a result I usually end up doing stuff in my own time and giving my stuff away. My inheritors are doing well enough not to need any money from us so I figure I will spend away.

I too started out as a hobbyist, made a few things for my 4WD, stuff the other manufacturers wouldn't make for toy 4WD's. People saw and liked my stuff and wanted similar, but as AJ? mentioned, people don't want to pay what it costs.
Same as trailers, there was a place selling trailers cheaper than I could buy the components for, mind you they didn't have front or rear tailgates, mudguards were held on by 10mm tacks, very lightweight metal, you get the picture. Still they sold heaps of them, I did reasonably well doing the repairs/modifications to them, but it still wasn't enough to keep me going full time at it. I ended up working for someone else, just to pay the rent on the shed, and put food on the table.
Someone asked me recently what they would need to be self employed, I said all the equipment that you'll need, PAID FOR, and $100K in the bank, because someone will give you an order, maybe pay a deposit, and then go bust on you or skip out leaving you with something that no one else wants.
Even coming up with a unique product, someone WILL copy it, and undercut you. As an example, back in about 1992, I had some one come to me with a product he wanted manufactured, we did a few and they sold, but there were a few drawbacks with the design. There was a spot for the fridge, but it was too high for the little lady to a beer out of the fridge, so I redesigned the frame and made a slide for the fridge to sit in, everyone loved it. I ended up with an order from a well known portable fridge distributor for 100 units every other month, when I gave way my business there were 14-15 places making a similar product, some better some worse.
So you really have to watch what you're doing, give someone a basic idea and they'll improve it somehow.
If you decide to go ahead, you'll need to create a ROLLS ROYCE of whatever it is, jobbing work doesn't really pay the bills.
We have people come where I'm still working and want a quote for repair, say a replacement mudguard, or a tailgate, when we tell them $300 plus GST, they think they're being robbed, it's only a bit of sheet metal, they say, with a couple of folds. They forget that we have to pull a man off a production line, he has to find the sheet metal for it, grab a forklift if ones available, cut and fold the sheet and put the offcut back in the rack, then has to make the hinges, OH can we fit a tie rail to it too, you get the story, before you know it 3hours is GONE.
HTH
Kryn

Originally Posted by BobL

As a result I usually end up doing stuff in my own time and giving my stuff away....Instead I ended up doing volunteering about 5 years and found that more satisfying

Good on ya BobL !!

Originally Posted by AJ.

In my experience when people say I should make stuff and they would buy it, the bit they don’t mention is that they assume I can make it for nothing and sell it for less.

Yes. I get that a bit too.

Michael

I look at this in a simplistic fashion. You started work at about 18 years old and by 52 have worked for 34 years give or take a few years. At 52 you have a life projection of about 38 years, do you think you have accumulated enough wealth to last longer than you have worked?

Originally Posted by Reidy41

Yes, I am 51, it takes planning and a clear view of what you need and want in life.
I will give a short description of how I have explained this to a few people.
Please don't take to much notice of the numbers, they are just for explanation purposes. Your numbers will be different to my numbers. My numbers may be different to the example. Also I am not providing financial advice, just an idea for you to consider.

I have come up with an amount that for me, I believe my wife and I can live a basic life on. Lets say it is an average of $100 a day. So for $36500 a year I can cover all my bills, eat, own a very modest car and update as required and have basic entertainment. If I index this for inflation I have a worst case scenario of what I need to exist.

I have a second amount, lets say $200 a day or $73000 a year. This would give me, what for me would be a very comfortable life.
I have a third amount, lets say $300 a day or $109500 a year after tax. For me this would cover everything that I would want for the best life I want to live.

As I said don't take to much notice of the numbers, if you like to travel first class, update your Aston Martin each year you may need different numbers. Also if you want to live self sufficient in a small hut in the Tasmanian wilderness your three numbers may be quite low.

To take the jump, in my opinion you have to have an understanding of what the basic life will cost and is it achievable. Lets say you have some savings, some rental income and super you can access at 60 and no debts. Using a program like this https://www.calcxml.com/calculators/...kn=#calcoutput you can see if you think you can survive ($100 a day) until 80. A lot of over 80's tend to spend less on entertainment and such. In ten years time you can review and maybe aim for 85.

You can also have an idea of how much you need to earn to achieve your ($200 a day) lifestyle.
The ($300 a day) is to keep you grounded. If I had to I could spend $1000 a day but I don't think I would be any happier. As your assets or super grows, maybe an inheritance or lotto win, you can taper of your earnings and still achieve your ($300 a day) lifestyle.

Now you know what you need you can work out how you can achieve it, and is it realistic. If it means making 200 + trailers a year, you may need to consider other ways.

My strong advice is be very honest with yourself. Decide what you want out of life before working out the dollar value. When I say yourself, if you have a significant other, make sure you know what sort of life they want.

There is a bit more to this and how to achieve it, but it is an introduction.

Steve

Thank you very much for that simple approach Steve, it very much does just come down to that for the most part.

I have always had a very simple budget system in my household. We do know exactly what comes in and out and what we need to earn to achieve our lifestyle.
I guess while two people are working its always been very easy...... the outgoings going out have always been a lot less than what's coming in, hence the bank accounts grow. Its when you stop the incomings or a significant amount that you look very closely at it.

$100 a day for my 'retired' life is actually quite a comfortable life down here. That would be saving a little bit of money. I am only talking about me retiring but I think its important that I look at this as only me because you never know what life holds. So assuming the other half wants to retire also then we or I need to look at achieving that $100 a day baseline.

So I did look long and hard at it and I am quite certain its easily achievable one way or another. My son is a builder and he pays his labourers $25 an hour if get desperate

Thanks again.

Originally Posted by AJ.

I am the same age as you and also have a decent amount behind me financially with a modest passive income. I have tried what you are looking at with mixed results. I did manufacture one product that I sold around 250 grands worth, but over an 8 year period. Other than that not much success.

In my experience when people say I should make stuff and they would buy it, the bit they don’t mention is that they assume I can make it for nothing and sell it for less.

I have found working for someone else part time has been the best bet for me to be semi retired. I have a lot of skills, done lots of welding to make a crust but have spent most of my life driving trucks or operating earthmoving equipment. So I am always in demand and can pick and choose when I work and how much.

Cheers Andrew

Thanks Andrew and yes I can relate to the "you should make that for a living thing" , then wanting it for nothing!

Most of where I have heard that is doing fun little projects that I have done, none of which were really what I was proposing to earn an income in retirement. I just think I am over working for someone else. That daily commitment of having to go to work for 8-10 hours has just worn me thin.

I find it really odd that when I am doing a job in my own workshop I bounce out of bed and can't wait to get out there to start work and I find myself still in there 12 hours later just as keen as the moment I bounced out of bed. Yet to do that for someone else im struggling!! Perhaps it'll also wear thin after a while when I am doing it for myself and its a necessity rather than a labour of love?

Originally Posted by BobL

I fully retired when I was 58 and had all sorts of plans, including to work part time and making a few things for sale to make a bit of money on the side. Instead I ended up doing volunteering about 5 years and found that more satisfying although that eventually went a bit sour and I found I didn't have enough time to do my own projects. Then I developed a bunch of health issues which slowed things down a fair bit.

I still make a few things for sale but but find I get really bored if I have to make more than a couple of the same thing . Unless its very simple I also find the money doesn't really make up for the stress of getting the product just so for the client, getting product finished to within an agreed time scale and the fact that this takes time from other projects. As a result I usually end up doing stuff in my own time and giving my stuff away. My inheritors are doing well enough not to need any money from us so I figure I will spend away.

Thanks Bob. I get bored if I am making the same thing over and over as well. And I have taken that into consideration.

I was hoping to make certain items that I know will sell and I know there is a gap in the market for a low volume low overhead manufacturer and simply sell them after they are made. Rather than putting myself out there as a person who makes this stuff and takes orders. That way I can make what I want when I want. Great idea in theory I guess.

Originally Posted by KBs PensNmore

I too started out as a hobbyist, made a few things for my 4WD, stuff the other manufacturers wouldn't make for toy 4WD's. People saw and liked my stuff and wanted similar, but as AJ? mentioned, people don't want to pay what it costs.
Same as trailers, there was a place selling trailers cheaper than I could buy the components for, mind you they didn't have front or rear tailgates, mudguards were held on by 10mm tacks, very lightweight metal, you get the picture. Still they sold heaps of them, I did reasonably well doing the repairs/modifications to them, but it still wasn't enough to keep me going full time at it. I ended up working for someone else, just to pay the rent on the shed, and put food on the table.
Someone asked me recently what they would need to be self employed, I said all the equipment that you'll need, PAID FOR, and $100K in the bank, because someone will give you an order, maybe pay a deposit, and then go bust on you or skip out leaving you with something that no one else wants.
Even coming up with a unique product, someone WILL copy it, and undercut you. As an example, back in about 1992, I had some one come to me with a product he wanted manufactured, we did a few and they sold, but there were a few drawbacks with the design. There was a spot for the fridge, but it was too high for the little lady to a beer out of the fridge, so I redesigned the frame and made a slide for the fridge to sit in, everyone loved it. I ended up with an order from a well known portable fridge distributor for 100 units every other month, when I gave way my business there were 14-15 places making a similar product, some better some worse.
So you really have to watch what you're doing, give someone a basic idea and they'll improve it somehow.
If you decide to go ahead, you'll need to create a ROLLS ROYCE of whatever it is, jobbing work doesn't really pay the bills.
We have people come where I'm still working and want a quote for repair, say a replacement mudguard, or a tailgate, when we tell them $300 plus GST, they think they're being robbed, it's only a bit of sheet metal, they say, with a couple of folds. They forget that we have to pull a man off a production line, he has to find the sheet metal for it, grab a forklift if ones available, cut and fold the sheet and put the offcut back in the rack, then has to make the hinges, OH can we fit a tie rail to it too, you get the story, before you know it 3hours is GONE.
HTH
Kryn

I am 100% hearing everything you just said. I was having this conversation with my son only a few days ago. He said just make box trailers dad you'll sell heaps of them!!
I pointed out to him how competitive that market is, how little money there is in them and how quickly I would get sick of making the things hahaha

So a couple of points to make here. I won't be renting a workshop or any equipment. And I do have a budget in mind in terms of cash flow to start what I am doing and your figure is very near spot on. Also I am lucky in that initially at least I dont really have to make an income....sure that will wear thin quite quickly but I am not putting myself in a position where I would be 100% committed to making a certain amount per year.

And finally in terms of the product I am reasonably confident I have found a gap in the market for a few items based on price of manufacture. I never want to be over confident but I think I can earn an income by manufacturing a few things that are selling very well for a better price than the big boys with big overheads. Of course id be a very small volume but I feel there's a gap in the market for the price point.
The Chinese are doing it and the importers are selling these things by the dozens but they are not doing the middle to high end versions because there are just too many things that need to be made on site to suit the individual.

I could be wrong but I think I am willing to take a punt.

Thanks for your reply.

Originally Posted by Chris Parks

I look at this in a simplistic fashion. You started work at about 18 years old and by 52 have worked for 34 years give or take a few years. At 52 you have a life projection of about 38 years, do you think you have accumulated enough wealth to last longer than you have worked?

I do get those theories or similar ones quite a bit when I seriously consider what I am doing here and I like the simple approach. However I think each persons circumstance can vary so much. Its a bit like the superannuation calculators that tell you that you need 1-2 million when you are 65 to be able to live until you are 85.

But to answer your question, if you calculate what you have earned over that period......what you have spent on interest or wasted then you could come up with a figure that is a little more realistic

I think our second half of our life looks quite a bit different to the first half......

It is not a theory just a simple view I have of the problem. Calculators & theories all got thrown out the window during the low period of interest rates we have just been through and might now slowly recover.

Originally Posted by danshell

I was hoping to make certain items that I know will sell and I know there is a gap in the market for a low volume low overhead manufacturer and simply sell them after they are made. Rather than putting myself out there as a person who makes this stuff and takes orders. That way I can make what I want when I want. Great idea in theory I guess.

Once a month for a couple of years a local wood turners club ran a stall inside the mall of our local shopping centre. It was the usual bowls, vases, kitchen items etc, some stuff that they thought might sell but most of it was what their members liked doing eg bowls It was all highest quality stuff so it wasn't like it was their discards. I haven't seen them for a while but that could be because I have stopped shopping.

I knew a couple of the blokes who manned the stall and asked them how much stuff they sold. They said they sold very little and in most cases did not even cover costs but that was only part of why they did it - the other reason was to drum up members and they said they did OK at that.

OTOH I know our mens shed does really well at local markets and craft fairs but that money all goes back into the shed and they admit if everything is factored in they're working on average for about $5 an hour. Part of the reason for their success is that craft fair buyers probably feel better about forking over money for a mens shed as community service as opposed to an individual making a few bob on the side. Their biggest seller are small foldable timber picnic tables with holes cut out to hold winds glasses. This is not the one they sell but its similar.
One member has made over two hundred of these tables - I don't know how he does it - this would drive me nuts.
Screen Shot 2022-06-08 at 5.02.13 pm.png

There have been very successful forum members I've met that have been selling niche stuff. One member of these forums did well for a while at numerous local markets selling bread boards with associated bread knives made out of bandsaw blades. I've done markets with my wife trying to sell her craft stuff, apart from "YAWN" . . . . . she always seemed to come home with more stuff than she sold so she never made a single $ worth of profit!