Author Topic: $4M investible assets, $1M paid off house, married w/2 kids - what would you do?  (Read 3286 times)

Cranky

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I will just throw in here that CU Boulder isn't really a commuter school where people typically live at home - I think you'd miss out on a lot of campus life if you didn't spend your freshman year in the dorms.

Case

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Thanks everyone, I was wondering if posting here, would help me get feedback through my thinking and it really did.

I should have made a few things clearer than I did in my original post.

I totally agree that a 6,000 square foot house is too much, and I my wife and I feel a 2,500 or 3,000 square foot house with a finished basement is more than enough room. We see, that in Fort Collins, CO, with good public schools, we can get a new house, for half the price ($500,000), and 80% less property taxes (a $20,000/year savings...). We like the idea of getting a house that is just big enough for a family of 4, but also small enough that when my wife and I become empty nesters we can stay in the same house and 2,500 - 3,000 square feet with a finished basement should do just fine.

To those who asked about hiring someone to run the business, or get help to take some of the work off my shoulders - good point. My wife and I go back and forth on that. Hiring someone to "run" the business - well, I really would probably be OK to have someone handle a lot of the sales follow up/admin tasks. I do have someone who does a lot of that now, though they are not a salesperson. I suspect if I can get a salesperson to take some of the more routine/day-to-day sales stuff, I'd be a lot happier.

My wife does all the financial stuff. The MMM "thing" made me look at our spending, and we realized that our "required" spending is about $9,800/month, with about $2,000 of that being our property taxes - and that is why the whole "property tax thing" sprang up. So nearly 20% of our required spending was property taxes, whereas if I lived in other places it would be about 5%--similar house, similar schools ect.

Now, after seeing what other people were reporting with property taxes elsewhere in the US, I was surprised. Illinois is high (or at least my school district is high), though I can see there are plenty others that are as high as what I'm dealing with - and, surprisingly, not as frustrated about it as me.

It seemed to me that if I could live somewhere near the mountains, good public schools, and perhaps half the house - and near a good public university, I could really stretch my money further and enjoy my life more. Getting half the house returns $500,000 to savings (or about that), and reduces my property taxes by about $20,000/year, and then going to a town with a public university in town, reduces my kids college expense by half. I believe the deal I'll make with my kids are: mom and dad have X amount of money for your college. If you complete your bachelors or masters degree, whatever is left - you keep, ideally, to use to start a small business of their own. This is my current thinking anyway...

Boulder seems CRAZY expensive - I mean, NUTS expensive. Boulder has really excellent schools, looks very pretty and is a big college town, but 800 square foot houses go for $800 - $900k. Crazy. Boulder seems like going right back into the rat race to me.

And by the way, this whole thing started because my wife and I got frustrated with our business a few months back and though, well, what if we retired? What could we generate in income, and what would our expenses be? Another thing happened, was that this year was the first year that our dividends alone in our savings came very close to $100,000 by themselves -not even counting the gain in value. Again, this is when I though...what the F am I still grinding things out with my business for? I'm 44, is there something else I'd like to do?

I asked myself the question - would 70 year old me be annoyed with the 44 year old me for not taking a little risk and changing course, trying something else at this state, especially with finances in good shape? I think 70 year old me would. 44 year old me likes hunting/fishing/skiing/hiking, ect.

My business, though while generating a comfortable income and a nice "stache", is probably worth at most $500k to $1M and I wouldn't get the money all at once.

There are things I do enjoy about the company. I get to work with my wife, we built it together from nothing. She has been with me the whole way and we get along fine running the business together (people always ask how it is running a business with my wife- assuming it is not good). There are certain employees that we have that really cause me to want to hard, and create opportunities for them because they are loyal and good at what they do. Challenging employees and challenging clients make it awful, though, I'm trying to be much more selective on both these days.

The thing about downsizing my house and staying in the same school district is that I'd have a house, half the space, older, with an older layout, but still $12,000/year in property taxes. It seems nuts to me that a $500,000 house should have $12,000/year in property taxes.

Thanks again everyone - super helpful input. I read everyone's posts 3 times and am going to share with my wife.

We are already bought tickets to do our family summer vacation in Colorado, specifically to visit Fort Collins, Colorado Springs, and Vail (just to get a few days in the mountains in the summer during off season). We plan to visit some of the schools (if possible) and a few other things that are important to us. We want to rent Airbnb and "live" there for a few days each. From there we want to determine if what we see, we like better than what we have. Is the pull, off an early retirement lifestyle in Colorado, stronger than staying where we live in the community we live in. We just won't know unless we go. If we are going to move, we realized it has to be after this next school year (sell the house, deal with the business, ect.), so we either get moving on this, or we are just all talk.

One other issue is neither my wife or I know what we would do if we were retired. We worry we'll have deep regret letting go of a profitable business that we built together. Neither of us has real hobbies. Though, the idea of clearing my head and letting other things comes in, really sounds very intriguing.

It sounds like perhaps you are starting to realize that there can be more to life having a successful business and getting rich.  The whole point to this site, which sometimes get lost in the works, is not to safe as much money in order to retire early.  The point is to be happy.  For many people that involves leaving jobs which make them unhappy and/or making their new 'job' to pursue parts of life that do make them happy.

You have probably far more money than you need... maybe you should figure out what will actually make you happy.  When you look back on your life in old age, will your successful bring you a deep sense of satisfaction, dwarfing everything else?  If yes, then great.  But if no, then you should probably reevaluate your life.

Beyond that, you have enough money that you really don't need the advice of this forum to get you to retirement.  All financial problems of yours can be solved on your own easily with very little thought.  Your bigger challenges are figuring out what makes you happy.

Dicey

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Slightly contrarian view here. What I would do is sell the house and business and buy a much smaller and more expensive house on the Southern California coast, some place with its own boat dock. Property taxes are pretty low in California, but you could buy expensive enough that the propery taxes would be about the same. No worries, you have planty of money. And you really don't need a house too big to even clean by yourself. You would probably be spending less time in your house when it is 72 degrees in February, and your sailboat is calling.
Another vote for CA! Thanks to Prop. 13, property taxes are capped at 1.125% of purchase price, with tight restrictions on annual increases. The longer you own, the lower the tax % becomes. Another option is to buy a house in, say, Palm Springs/Palm Desert and then grab a condo near the beach in North County San Diego. You could AirBnB whichever one you're not using, if you wanted and pay your taxes from that. Mountains, oceans, good schools if you buy in the right place, and relatively low property taxes. Best of all, no snow! You're surrounded by mountains, so easy access to skiing, hiking, etc, but you don't have to shovel or slog through cold, heavy white stuff. CA traffic can suck, and gas is expensive, but you won't care because you won't be commuting.

FWIW, taxes on my $1.3M house are about $11.5k, but it "only" has 2600 sf. No basement, but the 1050 sf attached garage is nice consolation.

As to your daughter, what kid doesn't want to move to California? As long as you move before HS, she'll be fine.
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boarder42

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i think i said it earlier but OP you're FI you just have to decide where you want to live and what you want to do but if you like where you're at now there is no reason to change anything just have to hang up the slacks and put on the flip flops.
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SnackDog

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You sound happy just as you are. The grass is NOT greener. I would not change a thing. Forget about your property taxes. Try to find ways to minimize things you don't like about your business.

Fuzz

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Jackson Hole would satisfy the itch for skiing and mountains. You might find it's worth the crazy expensive real estate for you.

waltworks

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We had a similar list of requirements to you (ski/bike town, great schools, near decent public university, etc) and ended up in Park City. Bonus - our ~$900k house has property taxes of (no joke) about $2500 a year. That's a weird case because it's a resort town with tons of vacation homes (which are taxed at something like 4x the year-round resident rate).

Boulder has Eldora ~45 minutes away which is decent skiing. At your NW, you could also get a place in Breck or something and beat the I70 traffic by going up/staying on weekdays at non-rush hours. Summit CO schools are meh though, you wouldn't probably want to be up there year round.

-W

waltworks

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Jackson Hole would satisfy the itch for skiing and mountains. You might find it's worth the crazy expensive real estate for you.

Jackson has mediocre schools and is super isolated. Rad place, though.

If you're ok with isolated, Steamboat has the ski town thing going and good schools to boot.

-W
« Last Edit: April 21, 2017, 08:25:39 PM by waltworks »

gaja

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I would start with employing someone to do the tasks at work that you hate, and try renting a cabin in the mountains to spend all that extra time you get off. If it turns out you like the mountain life, you can decrease the working hours even more, and increase the time spent in the mountains.

We moved to the other side of the country a couple of years ago. It was the right choice overall, but it has not been easy for the kids. It took them a while to get new friends and understand the local culture and norms. We went back for easter, to let little sister visit her grandparents and friends. I haven't seen her so happy since we moved.
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