case study

[aristophanes]

Early 40's, family of 5
Track expenses on mint
Last year, mint says we spent $168,000... went up a lot after we moved to the suburbs and had kids a few years back
Mint says our assets are $6,100,000
That includes a 700k house, so $5,400,000 in stocks and bonds

That's a 3.11% WR so that seems good, but the following would need to be considered:

1.  Taxes--don't think I'll pay much in retirement, but probably a bit.  Not factored in above.
2.  College--more than 10 years away, but three kids so...
3.  Unanticipated costs:  Do kids get more expensive as they get older?  A lot of the $168 is child care (say 40k or more).  Seems like they might get cheaper without all the childcare
4.  Stock Market seems high and geopolitical risk high, but I am pretty widely diversified

On the plus side, I think I can save some money after retirement by lowering commuting costs and doing my own lawn and cooking more.  On the negative, I may travel more, although my tastes are not expensive traveling with 5 people probably can add up.

So I seem pretty good financially, now the question is what do I want to do next and do I want to get paid for it.  Any other thoughts on the financial side?  I know I didn't give much detail but does the math add up based on the healine numbers?  I'll give you one line from Mint, which is food--25k last year.  I work in a big city and lunch probably costs on average $15 a day, so that is like $5k right there.  Restaurants is probably another 3 or 4k so I think we're spending $1,300 or more a month on groceries.  But I think the biggest cost right now is childcare because one of the kids is not yet in school.  So this all seems pretty good, although maybe it is prudent to wait to change gears until after the next recession.

[efree]

Let me be the first one to state the obvious: you are financially independent and can retire tomorrow. If you do that you will not need to spend $5k a year on buying lunch and you will not need to spend $40k a year on child care because you'll be able to care for your children yourself. Isn't that a win-win? Besides, a 3.11% WR is very, VERY low anyway. You don't need to wait for the next recession.

Your expenses are obviously extremely high but you can afford that. You have five million dollars! I don't know what you are waiting for. Go and live life the way you want to. You don't have to work.

[frugal_c]

If you are not comfortable to retire now, you basically never will be.

As you said, kids get a bit cheaper after day care and then start to get more expensive as they grow older but it's not too bad.  They need some allowance, they eat more, maybe they are in more expensive activites (or maybe not).  I am not there yet but I can see the last couple years of high school being more expensive if you get them a car but then it's only a couple of years.   You have enough to just set some funds aside separately for your additional child related expenses, you can just put 400-500k on the side for that and budget without kids.  I think if you did that you will see how set you are.

[marty998]

Perhaps you could share with the forum how you made $6 million?

Seems like we have something to learn from you too.

[Linea_Norway]

You are spending probably 100.000$ a year more than most people. Please post a detailed case study with how much you spend in each category. I think we can at least half your expenses by suggesting cuts.

[former player]

The only thing I don't understand here is that you are using the name of a tragedian when the story you are telling is anything but!

Congratulations on being financially independent and no longer having to do paid work in the city to support your family.

What do you want to do with your financial freedom?

[JGS1980]

Does the 168K include taxes?

If you retire today, your expenses will drop (40K childcare, 5K lunches, 5K commute).

That gets you to 118K already with no real effort. 

You're fine.

What you need to focus on is --> what makes you happy! The sky is the limit. Sit down with the boss and make a plan. Enjoy the process.

JGS

[waltworks]

Time to do something fun part time and be an awesome dad.

-W

[insufFIcientfunds]

If I had $5.4M in the bank right now I wouldn't be doing a damn thing!

Sure, kids get more expensive, but they are only as expensive as you allow them to be. When your kid hits 12/13, do they need a new iphone Pro, wear nothing but Vineyard Vines clothes and play their playstation all day? F No! Get off your ass and do something! House won't cost more because your kids are older, food will cost more because they eat more. Even if that goes up 50%, who cares?

My 12 year old son asked if could take a (free) class to ref rec soccer. 45 min game and pays $15 a game, paid in cash. I said sure, knock yourself out. He makes his own money and the stupid things he wants are on him. Basic needs are on me. Don't let your kids grow up and be leeching F-tards or they will never leave and expect new phones, cars, F'ing Vineyard Vines shit all the time.

Slow down, have a beer. Life is good!

[aristophanes]

Slow down, have a beer. Life is good!

Great advice--I will take that up right now!  Happy Thanksgiving to all

[aristophanes]

The only thing I don't understand here is that you are using the name of a tragedian when the story you are telling is anything but!

Thanks!  It's a good point--I've now changed my name to aristophanes.  Maybe in my middle age here I should start channeling more comedy 

[former player]

Much better!

[aristophanes]

Perhaps you could share with the forum how you made $6 million?

Seems like we have something to learn from you too.

I'm not sure my story is very colorful / interesting, but sure--started work right out of college at a salary of $30k in a very hierarchical organization with defined levels and career paths.  Worked long hours every week, climbing corporate ladder for 20+ years.  Had an aptitude for many parts of the work (the intellectual / problem solving part), developed skills in other parts (dealing with people, public speaking), and so my salary went up over time... a lot.  Spent very little money (used to feel guilty spending money on even little things) and lived with minimal furniture etc, renting studio apartments (just had a mattress on the floor for about 15 years).  Savings rate probably well over 75% in many years.  Drove a car with 200k+ miles on it for many years, also had no car at all for many years.  You get the idea.  Make lots of money, spend very little.  Invest in a diversified portfolio of stocks and bonds any time money shows up.  Now that I have a big stash and a bunch of kids (and a high income) I don't sweat the small stuff anymore.  But on the way up I was pretty diligent.  I grew up without financial security (my parents went bankrupts and we were kicked out of my childhood home) so stashing cash and always being in the black was very important to me, maybe neurotically so.  I've worked hard, saved hard, and without a doubt been super fortunate. 

[kei te pai]

Your case study makes more sense now. Nothing to do with numbers-everything to do with anxiety, security, stability, protecting your family and yourself from adversity.
Its not unusual here to find really smart people who have worked very hard and achieved a level of financial security far above the norm, yet feel quite uncertain at the prospect of actually stopping work.

Best wishes for the future. You may find it an unsettling process, but stepping out of the mainstream now and investing in your family will be great.

[Villanelle]

Perhaps you could share with the forum how you made $6 million?

Seems like we have something to learn from you too.

I'm not sure my story is very colorful / interesting, but sure--started work right out of college at a salary of $30k in a very hierarchical organization with defined levels and career paths.  Worked long hours every week, climbing corporate ladder for 20+ years.  Had an aptitude for many parts of the work (the intellectual / problem solving part), developed skills in other parts (dealing with people, public speaking), and so my salary went up over time... a lot.  Spent very little money (used to feel guilty spending money on even little things) and lived with minimal furniture etc, renting studio apartments (just had a mattress on the floor for about 15 years).  Savings rate probably well over 75% in many years.  Drove a car with 200k+ miles on it for many years, also had no car at all for many years.  You get the idea.  Make lots of money, spend very little.  Invest in a diversified portfolio of stocks and bonds any time money shows up.  Now that I have a big stash and a bunch of kids (and a high income) I don't sweat the small stuff anymore.  But on the way up I was pretty diligent.  I grew up without financial security (my parents went bankrupts and we were kicked out of my childhood home) so stashing cash and always being in the black was very important to me, maybe neurotically so.  I've worked hard, saved hard, and without a doubt been super fortunate.

This is all the more reason to think you will be juuuuust fine if you FIRE.  You've shown that you can be disciplined and logical about your spending.  Now, clearly some hedonistic adaptation has kicked in, but likely if the market tanks, you can suck up the mild discomfort and  cut back your spending a bit (or a lot, even!) in order to compensate.  If you survived in a bare studio apartment, you can "survive" on $150k, instead of $168k.  (Although in reality it would probably be $110k vs $128 k since I would assume at least most of those childcare expenses will evaporate, which makes an already rosy picture even more so.  That's assuming your $168k accounts for all other changes that are likely post FIRE--perhaps decrease in fancy work clothes, increase in health care, decrease commute costs, etc.)