Case Study - Annoying Rich Folk

[boarder42]

i mean we dont all starve ourselves of things - but in your case i would be limiting my discressionary - particularly due to loan size - i'm all for keeping the student loan at 5% but thats if you're leveraging that money to invest if you're using it to spend thats just backwards.

My wife and i are in our barely 30s' but have a networth approaching 1MM - but yet we live in a lake front home with a boat and travel frequently. - our house was purchased as affordably as possible our wake boat is almost 20 years old - and we travel by travel hacking with credit cards to make it almost free.  you can have your cake and eat it too but you either need to eliminate the loans or invest or your statement about unsecured debt holds no water.  - everything we have we have b/c we choose to have it and we choose to forego other things like eating out, cable tv, and expensive cars - we purchase things mindfully and optimize our wants and our needs as much as possible.

You're taking the i want happiness NOW way too far - if you want something bad enough figure out how to get it as optimally as possible, then you'll know if you truly wanted/needed it in your life or not.

[Dancin'Dog]

I'm surprised such a smart guy got married.  ;)

[formerlydivorcedmom]

@Happy_Lyfe , if you do stick around...first, Congratulations on paying off so much debt already!  It's satisfying to see so much of the debt disappear.

I think you're shaping the comments as a false dichotomy - save everything or spend everything.  That's not the case at all.

You're right that the journey is just as important as the destination.  I could scrimp and save everything and retire in 5 years or less.  Or I can spend everything and retire in 20 years.  We chose to target retirement in 8-10 years.

I second the recommendation to read Your Money or Your Life.  I'm reading it again this year as part of a book club.  It asks you to look at your spending and your values and make sure that they align.  That's it.  No judginess on how much you choose to spend and on what, because it's based on YOUR values.  My spending wasn't based on my values, so I'm changing it.

For us, that means I get to take a cruise or other vacation every year. It means we eat out a few times a month.  It means I bought a brand-new car a few years ago...with a loan! AND I bought brand-new furniture. AND I'm planning to do some major work in the backyard to the tune of > $10k.

However, it also means my new car is a Prius - great gas mileage and not that expensive for a new car - which I plan to drive for 10 years or more (like the last car).  It means my new furniture wasn't from Ethan Allen or Bassett, which I LOVE, but I don't want to pay those prices.  It means I'm saving cash to pay for the remodeling...and not at the expense of my retirement funds.  It means I don't cruise in a suite from a port I have to fly to.  It means we choose what our splurges are and how splurge-y they are.

We save 35-40% of our current gross income.  That's our minimum threshold.  The splurges have to come out of the rest.  That way we're taking care of both of our goals.

Like most of the people who posted, I was once like you.  Late 20s/early 30s, making a combined income > 200k. I bought the fancy furniture and the fancy car and the fancy remodeling and had a housekeeper and a lawn guy.

Then my husband left and my income (and my savings) got cut in half.  At 32, after a divorce, my net worth was roughly what yours is now.

Then I was a single mom who wanted to spend more time with the kids (since they were gone half the time), but I needed to work to pay the bills because our lifestyle was scaled to two incomes.
Then I got a new director at work and my job satisfaction went into the toilet....and my job security wasn't great.
Then I got mono and couldn't work for 6 months (Fun fact: 98% of people get mono as kids.  It causes a runny nose and a sore throat and is promptly caught by parents who somehow managed to avoid only this disease as kids, at which point it is AWFUL.  Kids are walking germ factories.)

Now, our goal is freedom.  It doesn't necessarily mean retiring early (although I plan to do so).  It means we had the flexibility for my husband to quit work and go back to school/be a SAHD for 3 years....while cash-flowing tuition and still saving a lot.  It means I stood my ground in front of yet another evil director and dared him to fire me....because I had enough in cash and my taxable accounts to cover our expenses for more than a year.

From an outsider's perspective, it doesn't look like you have that freedom yet...and you have NO IDEA what the future holds for you. 

Figure out what actually provides value to your life (seriously, read the book).  Build your FU and emergency fund.  Then you'll better be able to answer your own questions about where the line is.

[charis]

I am surrounded by high earning folks with the mentality that they need to maintain a certain level of consumption to enjoy their lives.  They are certainly entitled to their spending, and they do it.  But trying to discuss any sort of cutting back (even travel hacking vacations or eating out less) is met with resistance.  It's had to explain to someone why they should cut back if they don't want to and don't have to.  They have an arsenal of reasons to justify the spending.

[Laura33]

Out of fear of angering the MMM gods I won’t mention some of the upsides of long-term moderate rate unsecured debt.

I assume OP is gone from this thread now, but two more thoughts just in case.

1.  The upsides of long-term moderate-rate unsecured debt exist only to the extent that the freed-up cash is invested, not used for consumption.  And 7% doesn't qualify as moderate-rate.*  And it's pretty egotistical to assume that folks here are too stupid to understand leverage -- read any mortgage-related post by boarder42.** 

2.  The reason you are getting significant pushback is because you haven't identified specific "now or never" things that you want to do with your money.  I think if you said something like, "our parents are getting up there and want us to come with them on this trip next summer," a lot of folks here would say oh hell yeah, you can afford it.  I certainly would have. 

But the first thing you mentioned was "upgrading" your cars, right before you said you were "trying to reconcile our frugal tendencies with our income."  And that sounds distinctly like you want permission to inflate your lifestyle, just for the sake of inflating your lifestyle.  And that is massively contrary to the ethos here.  It's not about self-deprivation, it's about being thoughtful with your money and making sure you spend it in ways that actually improve your long-term happiness. 

Oh, and FWIW, I make a lot more than you, and I spend a lot more than you.***  Like I said, it's not about self-deprivation.  I am not particularly Mustachian myself -- so if I am telling you that you are nuts to inflate your lifestyle, please recognize that it comes not from some rigid ideology, but from 30 years of figuring out what made me happy and what didn't. 

Fundamentally, not spending on things that don't matter frees you up to spend on the stuff that does.  Like the two European vacations I got to take with my stepdad before he unexpectedly died, which I wouldn't trade for the world.  Or not having to worry about how we're going to pay for DD's college in another year.  Or the peace of mind to know that I can walk away from this job any time I want.****  Like the commercial says:  priceless.

* It might end up as a good long-term deal if we revert to the hyper-inflationary times of the late '70s.  But that seems extremely unlikely, especially over the @5-year payback schedule.

** I am conservative and risk-averse, but even I have zero intention of pre-paying my ridiculously low 2.875% mortgage.  I mean, come on, that's practically free money.

*** Of course, I also save 50% of my income, am FI, and have no debt except for the aforementioned ridiculously low mortgage.

**** Presuming I can convince DH to cut back to what I consider a reasonable budget -- but that's another post entirely.

[Dicey]

Out of fear of angering the MMM gods I won’t mention some of the upsides of long-term moderate rate unsecured debt.

I assume OP is gone from this thread now, but two more thoughts just in case.

1.  The upsides of long-term moderate-rate unsecured debt exist only to the extent that the freed-up cash is invested, not used for consumption.  And 7% doesn't qualify as moderate-rate.*  And it's pretty egotistical to assume that folks here are too stupid to understand leverage -- read any mortgage-related post by boarder42.** 

2.  The reason you are getting significant pushback is because you haven't identified specific "now or never" things that you want to do with your money.  I think if you said something like, "our parents are getting up there and want us to come with them on this trip next summer," a lot of folks here would say oh hell yeah, you can afford it.  I certainly would have. 

But the first thing you mentioned was "upgrading" your cars, right before you said you were "trying to reconcile our frugal tendencies with our income."  And that sounds distinctly like you want permission to inflate your lifestyle, just for the sake of inflating your lifestyle.  And that is massively contrary to the ethos here.  It's not about self-deprivation, it's about being thoughtful with your money and making sure you spend it in ways that actually improve your long-term happiness. 

Oh, and FWIW, I make a lot more than you, and I spend a lot more than you.***  Like I said, it's not about self-deprivation.  I am not particularly Mustachian myself -- so if I am telling you that you are nuts to inflate your lifestyle, please recognize that it comes not from some rigid ideology, but from 30 years of figuring out what made me happy and what didn't. 

Fundamentally, not spending on things that don't matter frees you up to spend on the stuff that does.  Like the two European vacations I got to take with my stepdad before he unexpectedly died, which I wouldn't trade for the world.  Or not having to worry about how we're going to pay for DD's college in another year.  Or the peace of mind to know that I can walk away from this job any time I want.****  Like the commercial says:  priceless.

* It might end up as a good long-term deal if we revert to the hyper-inflationary times of the late '70s.  But that seems extremely unlikely, especially over the @5-year payback schedule.

** I am conservative and risk-averse, but even I have zero intention of pre-paying my ridiculously low 2.875% mortgage.  I mean, come on, that's practically free money.

*** Of course, I also save 50% of my income, am FI, and have no debt except for the aforementioned ridiculously low mortgage.

**** Presuming I can convince DH to cut back to what I consider a reasonable budget -- but that's another post entirely.

Even if OP is gone, this is a great post. Thanks for taking the time, @Laura33. Out of the park, as usual.

[doggyfizzle]

It went toward the house, and is likely not fully valued in estimated home value.

Well you're still paying 5% interest on this "equity" in your home; since this debt is definitely non-deductible, I'd knock this out first.  You can get rid of this (depending on if the loan terms allow prepayment?) pretty much by the end of this year if you put most of your extra monthly cash flow towards the personal loan.

I'm less bothered by others about your lack of e-fund; it seems like you've got between $15-20k in checking savings and that seems adequate.  While I personally keep about $50k in savings (and my wife and I both have extremely safe/stable jobs) a 401k loan can always be an e-fund backstop in a true emergency and you've got a large-enough balance that you should be okay for all but the worst of circumstances

Kids would  only require part-time care (20hrs per week) , and we may have some support from family.

I'd plan on having a bit more of an open mind on this; as Laura33 stated earlier, shit can get old really, really fast, especially once you throw kids into the mix.  I was (and still mostly am) in the only FI rather than RE camp.  But now that my son is 2, I find myself more and more thinking about pulling the ripcord before my golden-handcuffs retirement age of 57 to spend more time with him and less with work.  My wife and I are in a similar earnings situation as you and your SO, and one thing we are working towards is both dropping to part time to be around more as our kiddo grows up.  If you're serious about having kids, I'd try and optimize your finances to live on one of your (present) incomes, because your feelings about work may very well change as soon as you have a kid.

If you can knock out your Personal and Student Loans (which you are doing great on paying down the SL btw), you've got an extra $2k/ month of breathing room that you can use to build up a good financial war chest to either continue to 59.5 or scale back in the future.

Unrelated, but Laura33 your avatar really, really is great/unnerving/creepy all at the same time.

 

[Happy_Lyfe]

Thanks for the additional responses. There’s been a lot of good stuff in the latest posts.

Here are some numbers behind my thinking...

Attack Debt Full Force + Snowball:

Non-Mort gone in 4 years (500k in invested assets excl house)
Mortgage gone in 10 years (1M inv assets excl house)

Enables us to retire in 10 years.

Save and Invest Full Force:

480k debt (140k non-mort) in 4 years
650k inv assets excl house in 4 years

300k debt (70k non-mort) in 10 years
1.5M Inv Assets excl house in 10 years

Enables us to retire in 10 years.

Spend 2 years and then Invest Full Force:

480k debt (140k non-mort) in 4 years
570k inv assets excl house in 4 years

300k debt (70k non-mort) in 10 years
1.4M Inv Assets excl house in 10 years

Enables us  to retire in 10 years.

Spend 2 years and then Attck Debt Full Force:

410k debt (75k non-mort) in 4 years
500k inv assets excl house in 4 years

35k debt (0k non-mort) in 10 years
1M Inv Assets excl house in 10 years

Enables us  to retire in 10 years.


I don’t think any of the plans significantly derisk any long-term unemployment. Really no movement in the earliest retirement date (which we don’t currently desire). Difference would be buffer/increased spending in 10 yrs or possible need to work an extra year or two. Biggest downside is additional life style inflation sticks (because after all we could live in a trailer). Current spend plan would be vacation rentals with family (lakehouse), once in a lifetime trips. Maybe 1 (possibily 2) more reliable non-MMM but not spendy cars. Or maybe we decide save for some time off, or to take paycuts for lifestyle reasons. Don’t really have specific plans, as that will require family planning but good to know the discussion is reasonably realistic.

One of my favorite parts of this thread has been the attack on my use of the word “rich”. In MMM world assets = rich, most people in the US income = rich, rest of the world US =rich. All about perspective.

[boarder42]

yes save and invest full force derisk long term unemployment above all other options.  and you have a wide range in invested assets to debt there 100k is an additional 4k in spending annually so in scenario 2 you have 200k more than the others.  this is 8k in spending thats not small.  also you cant go back and and reinvest money you've missed in past years. 

[Ben Kurtz]

You're starting from a baseline of around $70,000 net-worth improvement per year, meaning additions to investments plus debt principal paydown -- I haven't seen your amortization tables so I'm estimating a bit on the latter. On your income that's not bad progress at all, and in dollars-and-cents the whole debate on this thread seems to boil down to whether you should push that figure to ~$100,000 per year or spend the $30,000+ on other things. At the same time, there is no law preventing you from splitting the difference, and making this year the one in which you improve net worth by $80,000 instead of $70,000, while spending only a portion of the "surplus" you've identified in your present budget.

Of course, most of the actual debate on this thread has more to do with the philosophy and worldview that seemed implicit in your writing, rather than terrible habits or massively erroneous financial projections. And it does sound like you have been smart and thoughtful enough to understand and internalize at least some of the message, which is appreciated.

With the attitude adjustment out of the way, my concrete advice is this:

1. Make sure you've done your best to optimize the tax position of your investments, including finding out whether it is at all possible to have 401ks for both spouses, and executing backdoor Roth IRAs. In my view, in your tax bracket, you probably will benefit a lot from deductible 401ks and backdoor Roth IRAs for tax diversification in retirement. Your retirement balances are not nearly high enough yet for you to seriously worry about oversized RMDs and the possibility that your retirement tax bracket will be onerously high.

2. Get your emergency fund -- in a checking account or a short-term muni fund -- up to at least $30,000; $50,000 would be better.

3. Spend the next 3-6 months getting 1 and 2 done, and making some of your spending even more concrete: Research different nicer but non-silly cars that you might want to buy. Bounce the ideas off friends or the forum here. Research different lake-house rentals and figure out which one is best for your family this summer. Then, come summer, blow $10,000 to $20,000 on those things.

4. By the end of the year, retire that silly 7% loan. In today's still relatively low rate environment, I just find that annoying.

Not everyone here is dead-set on retiring early. There are even some folks here who are not dead-set on saving maniacally until they are fully financially independent before loosening the purse strings a bit. But the common denominator here is trying to adopt the right attitudes and approaches towards one's personal relationship with money: understanding how to use money more efficiently, understanding how to invest effectively and have the forces of finance working on your side instead of against you, and understanding how to use money to make oneself more happy and secure. That is, to understand better the numerous relationships between income, spending, wealth, power, happiness, security, family and community.   

You have a very good income and have done some good things for yourself so far, in terms of paying down debt and building net worth. It was a bit frustrating to me, and I think others here, to see someone get so close yet at the same time seemingly miss some fundamental elements of what we consider the right philosophy towards money. It seems like you have started to turn the corner on this one; I hope that you spend the time reading some of the books and articles that people here have recommended and reflecting on these points, because a lot of folks here think doing so will help you lead a happier and more secure life.

Good luck!

[Dianalou]

Well, like others have said, it about your perspective on things. Do you think having the shiny new car in the driveway will bring you happiness? Maybe. For me being able to write, '0' after the liabilities line would make me happier. And if you're not interested in retiring early, why don't you take all that extra cash and throw it at some charities that you're passionate about. I would rather have my name on a plaque on a wall than said shiny new car as well. But, those are what would make me happy.

You're obviously not hurting, you're saving a ton. I don't make nearly the amount that you do, but I also only have a mortgage for debt. My husband just bought a $6,000 mountain bike. That's not mustachian, and I wasn't totally for it, but we're allowed to have some toys and 'live a little' as you've mentioned. There's a middle ground, you can save and be responsible and conservative, and also spend on the things that make you happy. My husband finds no joy in clothes, or shiny cars, or video games or whatever, so he has goodwill clothes, an old Prius and a really nice mountain bike that he rides ALL THE TIME. We have this conversation often as I lean more towards saving every penny because, 'what if' and he leans towards YOLO. Maybe we retire at 50 instead of 45. It works for us.

I think the best bet would be to ask your friends who are in the same boat as you if it's OK to blow money before kids. They likely will give you the answer you want. But asking a bunch of people who are (mostly) proponents of saving aggressively with the intent to retire very early by traditional standards if it's OK to upgrade to the newest car is likely not going to get the reaction you're wanting.

[affordablehousing]

Happy to provide some YOLO support. MMM isn't religious evangelism, it's just a distinct perspective, histrionic in some ways as no moderate viewpoint would ever yield such a big following. I think there's plenty of reason to just be MMM-curious and spend lots of money, you're still saving more than most. Yes, you aren't mustachian by wanting to spend more money, but WHO CARES? The whole point of MMM is to show one lifestyle extreme that makes the savers feel better and more justified than the spenders. There's popular media to make the spenders feel better and more justified than the spenders. Follow your gut.

[eliza]

I'm glad you are still around --- there has been a lot of good advice in this thread, even if you ultimately choose a different path.  I'm not quite following your math on spending 2 years, and then turning full-force, but you seem smart, so I'm going to assume your numbers are reasonable.  That said, I think the chances of spending freely for two years and then just turning that spending off are slim to none.  That's not really how hedonic adaptation works, especially as your family grows  --- and cutting back your lifestyle can be quite tough once you are used to a certain level.  I hope it works for you and I'll be interested to see how things shake out for you in the future.

It doesn't sound like you are interested in Mustachianism, which is totally OK - it's a lifestyle choice not a mandate.  Have you done any reading about Consumption Smoothing?  It sounds closer to what you seem interested in; advocating holding (/taking out) long term debt to allow higher levels of consumption in younger years than is actually justified by salary/wealth level at that point.  Its assumptions rely on salary levels rising through a career until coming to a peak in early 50's and on working until/past traditional retirement age, but the model allows you to spend a lot more over the course of your life (particularly in your younger years).  It's not a model I buy into, but it seems closer aligned to what you are proposing in your post --- Bogleheads forum or even early-retirement.org forum might have folks who are taking that path that can give you some insight.

[savedough]

Honestly, I don't care what you do with your money.   

BUT I would like to add one perspective.   Kids do not have to be expensive and result in cost inflation.  But sometimes they are, not because of poor planning or poor parenting just because of fate.    My son requires a lot of money to care for his needs.   I am lucky that I can still work.   I am also lucky that we made the decisions we made before we had children so that if I or my husband wanted to stay home to care for him/if that was the best decision for our family we had and have that option.

I think what you are giving up is flexibility and options and those are highly valued in the MMM community.    If those don't rank highly on your personal list, there is going to be a disconnect with this forum.

[reeshau]

Majority of folk say “hair on fire, all extra cash to debt”, some say “most extra money to debt, a little splurge”. No one thinks we should spend freely (for a couple years  without additional debt) to see if there is room to improve our quality of life.

I think the nature of the disagreement is exactly in defining quality of life.

QOL = more stuff?
QOL = experiences?
QOL = sleeping soundly at night, even during a market correction?
QOL = no boss?
QOL = more time with family / friends?

That's also why the question does not match the purpose of these forums.  Good question, bravely placed if in order to explore possible answers.  But if you really had in mind the answer already, and sort of knew already what kind of answers you get, I don't really know what the point was to ask.

[Bee21]

I think the best thing about this forum (even though some posters are quite harsh) is a different perspective and questioning the standard point of view. You think you are rich (certainly have a lot of money to spend), they say you are asset poor in comparison to your income. They also suggest that you are not using your money as efficiently as you could. That is also worth considering.

 The other suggestion was that though you enjoy your work right now, this might change in the future. You never know. It did change for us and we hate our jobs at this stage but not ready to pull the plug yet. Having no debt and a reasonable asset base (over 1mil) gives us options. I can work part time and laugh the annoying boss in the face. My husband (the high income earner) can put up with the daily work dramas knowing that if he can't do it any longer, we could live on my meager part time income. Hell, if i went back to work full time it will maintain our lifestyle. Or move to a low cost of living area and be done with it. It is liberating. And we got to this point while only making the big bucks in our thirties. The twenties were a writeoff. And to be honest, we do not use our money efficiently either,  we are hopeless at investing and we spend lavishly in comparison to some folk here, because kids are expensive, visiting overseas parents is expensive, having fancy vehicles is expensive. So what. I personally don't regret spending on these (though the man's car needs are a sore point), i am happy to spend on experiences, buy time with faraway family members, not things or restaurant meals. Something has to give.

and the truth is, until I have enough passive income to support us I don't feel rich. I am just a drone with money.  My inner bag lady is strong. It is all about perspective. If a large chunk of that 250k is taken away by the taxman or eaten up by servicing debt, you are not there yet.

I was once told by a supervisor to listen to all sort of criticism with an open mind, because among all the noise I might find some information useful enough to help me move forward to a better direction. I hope that you will be able to take away something from this conversation which will improve your life.

[Happy_Lyfe]

Let me address my thinking on a few of these more recent comments:

Taxes: rates are currently low (possibly unsustainably low). I expect rates to rise and I also expect our income to rise. Past savings 100% tax deferred, current savings 50% tax deferred, future savings - we’ll see. If we don’t diversify and tax law reverts and we work to 59.5 without major issues we could be facing tax rates between 28-33% on this money without recourse. Additionally, if we defer tax diversification until it’s clear we’ll need it we may find our selves  needing to pay 33% to contribute to a ROTH. By making the move now, I think we’ll be able to control our income better in retirement and not pay a rate any higher than today’s regardless of tax law.

Emergency Fund: Currently consider this to be $30k = 10k + 20k (vanguard index) + 5k (extra checking). 30-50 seems to be the most common suggestion, I think we’re already on the low end but will consider raising to 50 over some period of time.

Planning: we’re definitely no impulsive so we will beat the dead horse on whatever we decide. I think this is summed up in our current situation: 40k planned savings, 20k principal repayment, and ~50k undecided.

7% Loan: not likely to pay this off faster. It’s gone in 5 years, we can easily afford it and it was a decision we spent a lot of time deciding what to do, when and how to pay for it. Options included: waiting and paying cash, HELOC - lower rate, but secured, Unsecured - higher rate. We will reopen the discussion to see if it still makes sense.

Mustachianism in general: I’m not against it, I actually like it. I think a lot of my life to the point has been much closer to it than any other philosophy. But I want to stay adaptable and optimize our entire life. My main ???s are around whether it’s still the right philosophy for our  current situation... recognizing things could turn against us and force us to come crawling back. Keeping current baseline save, and not financing our existing cash flow is the middle ground I want to entertain. Ie keep on track and do not inflate life style in any way that can’t immediately be reversed going forward.

Consumption Smoothing: I’m not a fan of consumer debt. I feel comfortable at our current debt levels and would be happy to amortize what we have and do any additional spending in cash. I’m not sure I’d want to eat up cash flow with any more debt, but I’ll add it to the conversation.

Lots of fear of jobloss, disability, death, sick kids etc.: we protect what we can with insurance, We don’t want to live our  whole lives afraid of what could go wrong. We’ll stay adaptable, hope for the best and tackle life’s challenges as they come

Quality of Life: this is a personal perspective we’re working through

Open Mind: I think we’re pretty open-minded. If it didn’t come off like that it has more to do with the long-term lurker aspect to our post and a lot of our overg analysis that wasn’t articulated in our first post. The jist was that we think we’re on track to meet our goals, possibly 20 years faster than we really want, is it time to reanalyze the Spend portion of the equation. What it came off as was, “we have lots of money, help us blow it”

Still internalizing a lot of this. Spending is hard for savers

[boarder42]

E fund - i'm in the camp they are overrated once you have assets they should be invested

7% loan - i'm in the very far camp of investing over paying off a loan but this rate is absurd - even if you were to choose invest in taxable this should be paid down first.  and the term is 5 years?

your choices with 50k annually of surplus are invest/paydown CONSUMER DEBT you already have/go spend some more

something is very wrong if your answer is go spend some more - as many have pointed out your only security you have now is really your income level - you're in a bad spot if you get laid off - i dont know how a person who has found this site can rationally look at your current situation and choose to spend.

[NoraLenderbee]

If even boarder42 is telling you to pay off the loan, you really should listen. :)

Your earlier posts showed very black-and-white thinking. The only options seemed to be living like paupers or living like kings. With your income, you can increase discretionary spending moderately *and* save. You are asset-poor and you really need to build up some more, for reasons already covered.

we think we’re on track to meet our goals, possibly 20 years faster than we really want

This is a Mustachian People Problem if ever I heard one.

[Bee21]

Look, if you have a 50k surplus every year, the easiest solution would be to knock off that personal loan (@7%) this year and spend the rest on a holiday. Instantly, you got rid off a large chunk of your debt, saved 7% in interest and also saved mental energy as you don't have to spend too much time figuring out what to do with this surplus.(this was our reasoning for paying off our 5.7% mortgage early. Because we are lazy. If boarder42 wants to jump at this and deliver facepunches, please don't,  we discussed this before😋).

If you still have the frugal mindset, keep it working in your favour for an other 2_3 years before proper lifestyle inflation kicks in. You did well in paying off a large chunk of your student loans, it just shows that you are good at managing debt when you want to. It would be good if you could keep these tendencies. If you socialise with fellow 250k earners you will lose your perspective quickly. you don't need permission from us to spend it all. But if you do have the frugal mindset(rationally economical vs miserly), combined with your large income, you will be way ahead of the other high income earners who spend it all.
 
Just a tip- 50 k is a lot of money. It might look like chicken feed from the perspective of 250k, but it is a lot. Just as a 5 dollar coffee is ridiculously overpriced. It is not just 5 spent on a delicious hot beverage, but the cost of a decent dinner for 4 prepared at home. I read it somewhere that 10 dollars a month feeds a kid in an orphanage in Romania. I am not trying to guilt you, you buy what you want, I'm  just asking to put things in perspective when reevaluating your existing frugal tendencies. You drive 5k cars but spend 1k on food. Hm.

[GOFU]

The OP sounds like a doctor. So typical is the attitude among doctors: "I've worked so hard and so long to enter this profession and garner this high income I am going to 'enjoy' it, i.e., spend like a fool." Twenty years in they have consumed almost all of it and have little wealth accumulated and must keep going full bore long after they would have preferred to slow down or even quit to do something else with their lives.

As others have pointed out, high income is not wealth. It certainly provides the opportunity to accumulate wealth, but it is not wealth unless you capitalize on the opportunity.

To the OP I recommend reading "The Millionaire Next Door." The stats and data may be out of date, but the essential concepts are not.