Author Topic: Case study—Am I ready to FIRE?  (Read 1241 times)

JoSo

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Case study—Am I ready to FIRE?
« on: June 11, 2019, 05:35:48 PM »
To me, FIRE looks like not working a full-time job and having more time to spend with my 10 yo son and husband and more time for myself for reading, exercising, music, travel, and hobbies.  I will definitely work part time side hustles for at least a while.

Life situation:

Married (file joint), one 10 yr old kid.   I'm 42 and spouse is 50. Kid’s college and dorm is paid for with a pre-paid college program. 

Gross wages:

last year we brought home $130,000.  I work full-time and bring home the large bulk of this amount.  Spouse doesn’t work full time but wants to work more.  With our part time jobs, we’ll continue to make at least $2000 per month.

pre tax deductions

I have always maxed my work retirement plan at approx 18k this year (employer matches about 5%)
medical insurance is pretty cheap at $200 through part time employer

adjusted gross income

I expect that this year we'll take home less than 100k per year after deductions because I plan to FIRE soon
 
Other income

About $3000 per month in rental income

Current expenses


Here's is the average monthly spending so far for 2019:
Rent/Mortgage        $1,650
Water              $59
Electric And gas $150
home maintenance     $50
dining out         $200
Groceries         $500.00
internet and cell phones $300 (written off as small business expense)   
pets               $300 (we have lots of them)   
gasoline        $200
auto insurance    $150
auto Maint.        $100           
life insurance     $50
Misc   $200
entertainment     $100
Vacation       $400


Assets

4 rentals paid for total value $860,000
Owe $60,000 on rental that’s probably worth about $100,000
we have a home we are paying for.  Mortgage is down to $272,000 @ 3.5 interest.  We bought in 2015 with a 30 year mortgage

in total we have $60,000 cash and just over 1 million in various retirement accounts.

Liabilities

we owe

 $272, 000 on the house
$60,000 on rental
no other debt

Even after I quit my full time job, we’ll have at least $2000 coming in from guaranteed part time jobs plus rental income, and spouse wants to work more. After spouse quits work but before I’m 60, I plan to use a GI bill which will provide an extra $1700 per month for 3 years.  At 60, we’ll both draw pensions.  Spouse’s will be about $1,000.  Mine will be over $3,000. 

My biggest concerns are the big whoopsy moments life throws at you.  In 2017 alone, I had to replace a car I totaled, buy another vehicle for the spouse, make an expensive foundation fix that wasn’t covered by insurance on a rental property, and a car crashed on a rental and damaged it.  We’ve also survived 2 natural disasters in the last 5 years. I often wonder if a dark cloud is following me around, but I guess that’s just life. 

What do you think?  Am I ready to FIRE?
« Last Edit: June 12, 2019, 01:46:27 PM by JoSo »

Linea_Norway

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Re: Case study—Am I ready to FIRE?
« Reply #1 on: June 12, 2019, 02:46:07 AM »
Your spend is 49,308 per year, not including phone/internet, which you write off.

You don't write how much your rentals bring in. But can we assume that they bring in 4% profit? If they bring in less, I think you should consider to sell them and invest in index funds instead.

Those paid for rentals would then bring in 34,400$ per year. You also get in 24,000$ from your parttime jobs. This makes a total of 58,400$ per year. That would leave you with a good margin. And your SO can earn a bit more.

If your car breaks down, you buy another cheap car. Just in general, all sorts of things that break down can usually be replaced by second hand cheaper stuff. In case of hard times, you can save up to 2400 a year on eating out and 4800 on vacations. And probably also some on groceries.

The thing you should think of is whether you have enough to live off when you can no longer so your part time jobs. Do you have enough saved up in your retirement plan?

Freedomin5

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Re: Case study—Am I ready to FIRE?
« Reply #2 on: June 12, 2019, 04:29:37 AM »
Most Americans on this board are concerned with how much health insurance is going to cost once they FIRE. If I'm reading your post correctly, it looks like your health insurance comes through your part-time employer, and you plan to keep your part-time job after leaving your full-time job. Have you factored in whether or not you will have enough to stay FIRE'd should you also quit your part-time work and lose the health insurance?

I guess that would be the "dark cloud" I would consider -- if for some reason, you can no longer work your part-time job.

JoSo

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Re: Case study—Am I ready to FIRE?
« Reply #3 on: June 12, 2019, 05:13:29 AM »
Thank you for your thoughts. 

The rental income is under “other income” at $3000 per month.    We are doing rent to own on 2 of them because we were unable to sell them commercially.  Apparently, we live in an undesirable location!  Eventually, we plan to sell all the real property except for a rental in FL that’s paid for.  We plan to retire there.

We have over 1 million saved in retirement, and when we can’t work, we’ll be drawing approximately $4,000 per month in pensions plus hopefully social security if it still exists.
« Last Edit: June 14, 2019, 07:34:13 AM by JoSo »

JoSo

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Re: Case study—Am I ready to FIRE?
« Reply #4 on: June 12, 2019, 05:17:41 AM »
Yes, health insurance is a big concern for us.  We plan to work for the part time employer until one of us is 60, and then we can still carry their health insurance at a cheap rate after that.  Spouse is also a vet, so there’s the VA.  I’m still holding out for universal healthcare though!

MrThatsDifferent

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Re: Case study—Am I ready to FIRE?
« Reply #5 on: June 12, 2019, 12:53:41 PM »
Yep, you’re fine. FIRE away.

2Birds1Stone

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Re: Case study—Am I ready to FIRE?
« Reply #6 on: June 12, 2019, 03:27:22 PM »
You're good to go, congratulations!

What are you retiring to?

Watchmaker

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Re: Case study—Am I ready to FIRE?
« Reply #7 on: June 13, 2019, 10:57:42 AM »
Yep, you're good to go.

JoSo

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Re: Case study—Am I ready to FIRE?
« Reply #8 on: June 13, 2019, 04:26:51 PM »
Thanks everyone!!!  I appreciate your insight.  That’s sooooo exciting to read.   I’m retiring to:

1) Sleep in past 6 am
2) Exercise daily
3) Become a master gardener
4) Learn martial arts
5) Read for pleasure
6) Help my child more with his homeschooling
7) Study abroad in a few years
8) Travel more
9) Enroll in and complete Air War College in 1 year
10) Join community band
« Last Edit: June 13, 2019, 07:30:12 PM by JoSo »