Author Topic: Case Study: newbie trying to gauge my situation...  (Read 4365 times)

howie29

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Case Study: newbie trying to gauge my situation...
« on: December 31, 2014, 07:30:08 AM »
My income 150-200k, wife is 40-50k but she travels for a living so all depends on how long she can be gone.
No debt, expenses run around 65-75k yr (8 and 13 year old..food 1k/mo home/car insurance and prop tax other biggie, 3000 yr and 4500 yr respectively)
Assets-home +/- $380k no mtg-Taxable acct $600k IRA $500k ROTH $100k 401k 20k (only been at job 2 yrs)  College tuition is prepaid and roughly $65k set aside in 529 plans for other college expenses.  Cars-older but paid for.

so, assets roughly 1.65mm
expenses roughly 75k, can do better but we live pretty frugally I think.

Looking to ditch my job as it is super high stress and my industry has been consolidating for some time now.  We need to have more family time with my wife away and me working 7am-6pm---kids need more attention specifically my daughter.

posted elsewhere but encouraged to to post here--got some good feedback from cpl people there so sorry for the repeat

Fishingmn

  • Bristles
  • ***
  • Posts: 334
  • Location: Twin Cities
  • You never have to recover from a good start
Re: Case Study: newbie trying to gauge my situation...
« Reply #1 on: December 31, 2014, 07:45:55 AM »
You're doing great financially.

Really need to know more about your goals. Sounds like you are torn between high incomes & more family time.

Do you aspire to retiring early? Is it worth trying to work at a high stress, high income job for a longer time to FIRE earlier?

Do you aspire to much less stress and not worrying about whether you are saving at a high rate? With your wife's income and a much smaller one from you it should still be easy to cover your expenses and give you the family lifestyle you describe.

You could always play around with different scenarios using something like www.cfiresim.com and see what impact different incomes/savings have on your retirement.

In the end, you and your wife need to decide what works best for your family. Keep in mind that whatever decision you make today can be changed again - if you choose path A today you can decide at any time that you need to make a change.

oldfierm

  • 5 O'Clock Shadow
  • *
  • Posts: 47
  • Age: 39
Re: Case Study: newbie trying to gauge my situation...
« Reply #2 on: December 31, 2014, 07:48:03 AM »
I recommend you read "how to write a case study" and then re-do this post.  People will be happy to give you some constructive feedback if they can really understand what's going on.  From what it looks like, you could FIRE now with some adjustments to your expenses, but there's no way for people to offer suggestions without a lot more granularity.

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3056
  • Location: Emmaus, PA
Re: Case Study: newbie trying to gauge my situation...
« Reply #3 on: December 31, 2014, 08:15:19 AM »
$1k/month on food seems a little crazy, even with a 13-year-old. When's the last time you used a slow cooker?

howie29

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Re: Case Study: newbie trying to gauge my situation...
« Reply #4 on: December 31, 2014, 11:24:25 AM »
Thank you Fishingmn, very insightful and thought provoking.  I do want to ditch the job but need to find something with a little income and that will keep me busy.  I will dig deeper in the posts to find cost cutting ideas, particularly in the entertainment/grocery department.  I have used a bunch of calcs but have not seen that one yet.  Love this forum.  Happy New Year.

bugbaby

  • Bristles
  • ***
  • Posts: 387
Re: Case Study: newbie trying to gauge my situation...
« Reply #5 on: January 01, 2015, 12:41:20 PM »
Wouldn't it be a lot more efficient for your wife to ditch her $50k away job and care for the kid/family for a few years? Then she can focus on paring down costs while you aggressively work your $200k job to build the stache.

MacBury

  • 5 O'Clock Shadow
  • *
  • Posts: 40
Re: Case Study: newbie trying to gauge my situation...
« Reply #6 on: January 01, 2015, 05:11:22 PM »
Using rule of 25 based on retirement expenses 75k you need around 1.875m round this up to 2m to retire + freehold house.

Another way to think about it is you have roughly

1.65m - 380k (house) = 1.27m assets

This can buy you roughly 50k per year.

RelaxedGal

  • Bristles
  • ***
  • Posts: 349
  • Age: 42
  • Location: 495 corridor, Massachusetts, USA
Re: Case Study: newbie trying to gauge my situation...
« Reply #7 on: January 01, 2015, 06:13:28 PM »
Using rule of 25 based on retirement expenses 75k you need around 1.875m round this up to 2m to retire + freehold house.

Another way to think about it is you have roughly

1.65m - 380k (house) = 1.27m assets

This can buy you roughly 50k per year.

And your wife brings in more than 75K-50K /year. You're there. Pull the plug on your high stress job if she plans to stay put.

chasesfish

  • Magnum Stache
  • ******
  • Posts: 3479
  • Age: 38
  • Location: South Carolina
Re: Case Study: newbie trying to gauge my situation...
« Reply #8 on: January 01, 2015, 06:24:25 PM »
I think you're in an interesting predicament and its going to take some conversations with your spouse..

You can easily quit and pickup a couple of side hustles while taking care of the kids.  You can withdraw 25k/year to supplement living expenses and your assets will still grow if your wife keeps her job.

She could also quit hers and you could put in another couple years and retire together - Would your life be less stressful if she stayed at home? 

Do you have any options within your industry where you can work less for less pay?

You're in the good situation of having options and flexibility.  You could also work on expenses and live on 4k/mo and both stop working!


howie29

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Re: Case Study: newbie trying to gauge my situation...
« Reply #9 on: January 01, 2015, 07:13:19 PM »
Wouldn't it be a lot more efficient for your wife to ditch her $50k away job and care for the kid/family for a few years? Then she can focus on paring down costs while you aggressively work your $200k job to build the stache.
Good point, but hers in much more secure.  My industry is in decline.  I like the longevity route with less money better.  But point well put.

howie29

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Re: Case Study: newbie trying to gauge my situation...
« Reply #10 on: January 01, 2015, 07:15:14 PM »
Great responses by all.  THANK YOU!