Do the math
My wife and I trace the roots of our approaching retirement to Christmas 1972, when my brother showed me his fancy new calculator. "Not bad!" I thought, while summing our annual salaries. "But wait; let's figure out our take home.... Ugh, that's less than I realized! Now subtract rent, utilities, groceries, and car expenses. Hmm, what else? Eating out, um, four times a week, and then lunches with the guys. Yikes!" We had a baby on the way and were talking about buying our first home. But at the rate we were burning through paychecks, there was no down-payment in our future.

That calculator inspired us to do some serious economizing. Lunch became a peanut butter sandwich, eating out a monthly treat. Nine very strict months later we had our down payment. We'd learned to budget, and we'd also discovered that eating out is more enjoyable when it's special. We didn't know it at the time, but we were adopting a live below your means (LBYM) lifestyle 20 years before we first heard the phrase.

The inflationary spiral
1973 was an extraordinary year. In June I finished my Ph.D. and was promoted to Assistant Professor; in July our son was born; in September we moved into our first home. But then October brought the Arab oil embargo. Gasoline prices doubled and lines formed at the pump. Thus began a decade of runaway inflation. Within 10 years, the purchasing power of a dollar would erode to about 39 cents. The stock market performance was equally horrific. The S&P 500 declined as much during the '73-'74 bear market as it did in 2000-03 after the Internet bubble burst. Our taste for peanut butter proved essential!

Adventures in real estate
Somehow we survived "stagflation" (stagnant economy + inflation) and even managed two big gains in home equity, the first a mere 18 months after buying our first home. We made an "as is" offer to the bankrupt builder of a nearby new construction. His acceptance prompted a crash course on do-it-yourself plumbing and HVAC. Five years later we moved again, this time to our dream house, for sale by the owner-builder. Real estate was stagnant in 1980, thanks to 13.75% mortgage rates. But because of the "sweat equity" in our previous home, we could sell at an attractive price and make a 100% gain. On the buy side we qualified, just barely, for a 30-year 11.5% ARM — with maybe enough cash left for a case of peanut butter.

Invest in your career
When I began teaching, I envisioned a career as an English professor until mandatory retirement. But in the early '80s the microcomputer changed everything. My early work in instructional computing was noticed by IBM, which lead to an offer I couldn't refuse. One May morning in '84, I posted final grades, put on a navy suit and reported to "Big Blue". I didn't have a clue what a "Senior Academic Consultant" was. But I soon found that IBM didn't either. Over the years we learned together.

Payoff your mortgage
With commissions and bonuses, the new career brought a welcome increase over my academic income. We expanded the diet beyond peanut butter and even treated ourselves to some new furniture. But that scary 11.5% ARM kept me up at night. So using my IBM training on financial calculators, I worked on strategies to pay it off. It didn't happen overnight, but with a combination of double payments and refinancings as rates eased, we paid off our 30-year loan in 15 years. The mortgage-burning ceremony took place a in 1995.

Understanding the time value of money influenced us in other important ways. It convinced us to maximize our contributions to our company plans, to establish IRAs. and to fund an investment account with income formerly consumed by mortgage expense.

Adventures in real estate, part 2
In 2000, as our net worth grew, we decided to invest in an ocean-front condo in Emerald Isle, North Carolina. It's been a triple win: the diversification reduced our exposure to the Internet bubble; the rental income has been excellent, and the property has appreciated beyond expectation.

Remember that 1980 dream house? After 23 years, we downsized to a lovely little condo a few miles away, investing the surplus equity. Our experience with ocean-front property taught us the advantages of a condo — the freedom from maintenance and the lock-and-go convenience for people who love travel.

We sold the Emerald Isle condo last year in a like-kind exchange for an ocean-front condo, at pre-construction prices, in Myrtle Beach. We then bought a second Myrtle Beach condo seven blocks up the beach in May 2006. We use Myrtle Beach condos for rental income, but we occasionally use them ourselves during the off-season (of course, with careful attention to IRS rules on personal use of rental property).

Share the (educational) wealth
We've exceeded our financial goals for retirement, but I'm still working full-time in computer technology —now in the same big pharma company as my wife. Work remains a pleasure, but I sense an approaching change at some point in 2006.

I enjoy helping others sharpen their financial skills and plan for retirement. So over the past two years I've been enrolled at the College for Financial Planning and have now earned my AAMS^® and AWMA^SM disignations (Accredited Asset Management Specialist and Accredited Wealth Management Advisor). I'm planning next to study for the CRPC^® (Chartered Retirement Planning Counselor) designation. Sounds like the makings of an ideal post-retirement career, starting sometime in 2006.

Postscript Doug did retire on June 30, 2006, a few days after passing the exam to become a Chartered Retirement Planning Counselor. He continues to participate at the Motley Fool Rule Your Retirement subscription service, is beginning his 10th year as webmaster for the Raleigh Chamber Music Guild, and he hangs out five or six times a week at the Devon Fitness Club. He and his wife sold one of the Myrtle Beach condos in June 2007. They plan to make the remaining one their permanent residence at the end of 2008 when his wife retires.

A condensed version of this article appeared in the December 2005 Motley Fool Rule Your Retirement newsletter.