Author Topic: Case Study: Fulfill my life purpose or tough it out for FI?  (Read 1675 times)

Blue22floyd

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Here is my situation: Female,38, Married with husband,44, and one 6-year-old son in the Midwestern U.S. The cost of living in our area is about 85% of the national average.

My dilemma is a tale of two goals. The first goal is fulfilling my life purpose. This is where I have saved enough money to be able to do the work I intended to do all along without impacting anyone's quality of life. I am scheduled to reach this goal in one year (8/2018) when my son turns eight years old. The second goal is complete FI which I am scheduled to reach in five years (8/2022) when my son turns 12 years old.

The first goal is based on having enough savings to cover monthly expense of up to $2,500, monthly contributions to a college fund of $187 and future replacement of my car and the purchase of one for my son ($28,620), while working for as little as $35,000 per year at a 65% take-home rate (after taxes, insurance, and retirement) until I turn 55 and qualify for pension payments.

The second goal is based on a monthly budget of $2,500 requiring savings of $750,000. If I jump for that first goal, which I really want to do, I may never hit the second goal. Do I start planning to fulfill my life purpose in one year, or do I stop being a wussy pants and tough it out for five years for true freedom?

Here are the specifics:
Gross Salary: $78,000 (whether I work 8-4:30pm or until 11pm with regular night meetings and some Saturdays)
-$5,300 pension contribution (+$5,300 match)
-$2,298 health & dental insurance
-18,142 taxes
$52,260 take-home pay or $4,355/month

Expenses: $2, 052/month
-$771 Joint Expenses (includes mortgage ($1,134), electricity/gas ($130), water ($67), Netflix/Hulu ($19), internet ($50), & home investments /maintenance ($142) = $1,542. We each contribute half plus I pay for our family’s health & dental insurance thru work.)
-$60 Christmas Gifts
-$60 Gifts/donations
-$110 Daycare set aside for summer, Spring Break & Winter Break
-$45 Cell phone
-$65 Insurance: Subaru, Harley Davidson motorcycle, & Life Insurance
-$1,111 Fixed expenses

-$200 Groceries
-$51 Transportation (gas/car maintenance)
-$100 Social/Entertainment
-$50 Medical/Personal (shampoo/feminine products!)
-$40 Misc (usually toner cartridges for my printer!)
-$400 After school care, school lunch, school fees and supplies (yes, it’s a public school)
-$100 All other kid expense including medical, classes, allowance, toys, clothes
$941 Variable expenses

Monthly Savings (from take-home pay):
-$187 College Fund
-$286 Roth IRA
-$1,489 Taxable Vanguard investments (Domestic, Global, REIT, High-Yield Dividend)
$1,962

Wait a minute…that doesn’t add up, you say? That’s right. We get paid every two weeks, so I only budget for two paychecks per month. Those extra two go straight into a vacation fund – about $4,092 per year or $341/month.

-If I work full-time to 55, my pension will be $2,851/month. If I never work again, it will be $972/month at 55 or $1,415 at 65. (Yes, it’s a fully-funded pension.)
-My SSI estimate four years ago (because they don’t send statements anymore) was $2,184/month if I work to 67 or $1,517/month if I work to 62.
 
Assets:
$19,799 Money Market/Cash equivalents
$67,297 Roth IRA
$88,998 Vanguard Taxable
$156,365 Pension account (vested)
$332,439

$35,000 College savings account (6-year-old).  (Yes. I really love him, and I don’t want him to be hungry or tired or working every minute of his life.)

2011 Subaru
2001 Harley Davidson motorcycle
House assessed at $180,000
 
So, you’re probably asking yourself “why are you planning for a $2,500/month budget when your actual budget is $2,052?) It’s because I want vacation money (currently $341/month) and I would like a little more wiggle room (to prevent life suck).

I drag myself to work every day because of these goals in front of me, not because I enjoy what I’m doing. I’m very good at my job, but it’s not what I intended to do with my life and it’s not what I would choose to do if I were FI. If I’m being honest, my job negatively impacts my health, my relationships, and my overall joy. I can tough it out for five more years to become FI – when my son is 12 and probably won’t need me anymore – or I can make a career change in one year and start doing what I’m actually passionate about. Jobs in this area actually pay from $35,000 to more than I make now, but I wanted to cover myself on the low-end. Part of me says, “You never give up before reaching your goals. Stick it out!” I started seriously working on my money mustache in 2014. What would you do?

 Thank you in advance! 

Because you asked...My husband was married with children and divorced before we ever met. He still has minor children. So, we have a prenup, we agree on joint expenses each year, and we don't fight about money ever. Yes, we are planning a joint future, and we're definitely on the same page when it comes to debt aversion, doing everything ourselves, working hard, and leading simple lives.

My husband makes roughly $55,000/year, but due to child support obligations, taxes, retirement, and insurance deductions, he only takes home 52% of his pay - $28,600. He has zero debt other than our shared mortgage. He also has a 2009 Jeep and a 2002 Harley Davidson motorcycle. WHAT?! Yes, we have four motorized vehicles. But, but..we also have several bicycles, a pair of kayaks, and a canoe! (gasp). His 401k was about $150k last time we ran joint numbers.

One other thing on working in my passion - I was already working in the field up until shortly after our child was born.  I loved it. I still love and miss it today. I have all of the education for the work. I've just been absent for an extended period of time. Plus, we're no longer located in the mecca of jobs in the field. The opportunities are fewer and further between here, and they don't pay as much. But that doesn't mean I love the work any less!! (sigh)
« Last Edit: July 30, 2017, 07:34:21 PM by Blue22floyd »

MDM

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #1 on: July 28, 2017, 11:14:35 PM »
Blue22floyd, welcome to the forum.

The post does raise the question: are you and your husband planning a joint future (in which case it might make more sense for his income, expenses, assets, etc., to go into the mix) or will you soon be filing single or HOH?

Villanelle

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #2 on: July 29, 2017, 12:10:19 AM »
So much of this is just personal preference and tolerance. 

Is there some hybrid option?  Work 2 years instead of only 1 more at the current job, in order to pad the accounts a bit more?    Would that new job leave you time and energy for a side hustle, and if so, do you have any skills or other assets that would help create one? Or could you work part time or doing consulting in your current field to supplement the income from the "passion" job?

 You say that there are jobs for well more than $35k doing the "purpose" thing.  Why not start looking now so that if you find one with a great salary, you can jump and have both things?  If you find one that pays, say $50k, it is less than you make now, but probably enough that your numbers will look better over time than they would with only 1 more year at your current salary and then $35k/yr, which you've projected.   

Are there any expenses that would or could be reduced if you downsize your job?  Would you spend less on after school care, for example?  Would you have more time to pack lunches, cutting that expense?  Likely increase in transportation?

Are both the vehicles negotiable?  You could definitely sell them and bank some cash, and probably cute insurance a bit as well.

Also, I am curious about your husband.  Where does his income come in to play?  How does he feel about you taking this drastic step? 

dreams_and_discoveries

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #3 on: July 29, 2017, 03:19:21 AM »
If you want to share what the life purpose is, we can offer some more tailored suggestions.

Can you keep current job, and do some night courses on the life purpose job, to enable a more sideways move than starting at the bottom?

There was an article somewhere very recently, abotu someone whose passion was baking....until she started working as a baker  - here we go: http://www.financialsamurai.com/how-much-are-you-willing-to-sacrifice-to-change-your-career/

I suppose the question is how sure are you it's your passion, and that doing it for money won't ruin your passion?

Monkeytennis

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #4 on: July 29, 2017, 10:16:44 AM »
PLEASE PLEASE PLEASE tell us what this life's purpose is, I was expecting you to share all at the end, come on spill the beans!

kenaces

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #5 on: July 29, 2017, 11:27:03 AM »
Can you start doing the "life"s purpose" work as side hustle?  To at least test the waters to be sure it is what you really want, be sure you can make at least the 35K........?

Davids

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #6 on: July 29, 2017, 01:47:31 PM »
I am going to say get to FI in 5 years then do your life purpose work.

Lady SA

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #7 on: July 29, 2017, 02:46:37 PM »
Here's what my Dh and I are doing. We are saving up ~1/2 or a bit more of our needed stash in investments. Then, the Rule of 70 states that generally, it will take ~10 years for our investments to double. As long as we don't touch our stash until it hits our FIRE number by working to at least cover our living expenses, we should still have much more freedom to pursue our interests during that decade.

Of course, that plan depends on the decade -- if we enter a decade of slow or negative growth, that obviously impacts things a bit. But our plan is simply work to just cover living expenses until our investments grow to where they need to be, whether thats in 10 or 20 years. Between the two of us, it would be relatively easy to come up with $35k (inflation adjusted of course) every year. Or if things got really desperate, even earning just $20-25k with side hustles and pare things down to the bone.

So, you don't share what your plans are re: income after you pursue your life purpose. Will you be able to earn enough cover your living expenses until your assets grow to the required FIRE number? If yes, then I think you could pull this off. If you don't have any plans for earning any sort of supplemental income, I think you're going to have a hard time. Half of your assets are tied in your pension which you can't access for like 15 years, correct?
https://www.earnest.com/invite/lillian2 --> Use this referral to refinance your student loans with Earnest and get a $200 bonus!

Blue22floyd

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #8 on: July 30, 2017, 07:59:02 PM »
All - Thank you for your great responses-to-date! "Davids" wins so far! I've been working so hard at FI with spreadsheets and graphs and reading Mr. Money Mustache posts daily, etc., I just can't see myself giving up before I've crossed the finish line. At that point, everything I earn from working in my area of passion will just be going to paying off the mortgage and then to setting up a foundation or otherwise investing in my beloved area. It will be money I don't really need.

I do like the idea of looking for passion jobs now in case something shows up that is similar to what I earn now. You never know...

czr

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #9 on: July 31, 2017, 11:39:27 AM »
I can't follow your math on how you reach FI in 5 years goal of $750k in taxable when you are only contributing $22.2k annually. In 5 years that is only $111k + $89k existing funds = $200k total. Is there something missing?

Blue22floyd

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #10 on: August 15, 2017, 06:13:21 AM »
I used WAY too many words in my original post! I have about $340k saved for retirement now. I actually save about $32k/year with my contributions through work and outside of work. I have a very handy spreadsheet that tracks progress monthly and has me on track to hit $758K in July, 2022. (It's based on returns of 0.9%-1.5% on cash equivalents and 10% on other investments.) Yes, 10% is a high assumption these days!! But, the printed the charts I keep handy (no, not on the fridge) remind me to auto-correct whenever I fall below the goal line. I put all of my extra money in investments (bonuses, freelance revenues, craigslist/Facebook sales, rebates, etc.) and that has helped keep me on track also. Thanks for challenging me!!

FIREby35

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Re: Case Study: Fulfill my life purpose or tough it out for FI?
« Reply #11 on: August 15, 2017, 07:33:26 AM »
You said you are a "wuss" if you change jobs before meeting your self-imposed financial goals to go fulfill your life's purpose.

I see things differently. You are a wuss if you don't fulfill your life's purpose. Seriously. Think about it - long and hard.

One thing I've learned by following my life's purpose is the rewards for doing so, if you have correctly identified your purpose, are far greater than you imagine while sitting on the sidelines. Go for it.