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Case Study - Recently laid off - need help to review financial situation

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bornInFlorida:
Life Situation:
Married
Me - 44,
DW - 37
Two kids, ages, 7, 8

Income:
My Gross salary per year (prior to layoff): $160,000
Wife’s Gross salary per year: $115,000


Approx Current Expenses (yearly).

Auto, $7,000 (no car payments, gas, maintenance and comprehensive car Insurance)
Clothing, $6,400
Dining out, $ 6,400
Education, $ 12,000 (kids camp during summer, some private tutoring, childcare, kids do go to public school)
Groceries, $10,000
Life Insurance, $1,100
Housing, $2,500 (shampoo, laundry detergent, new furniture/replacement of anything breaking etc. )
Medical, $1,200
Personal Care, $3,000
Recreation, $8,000 (personal travel, vacation related etc.)
Rent Expense, $25,200 (decent deal on my rent from a family member who is the landlord. Market rate would be $48K per year)
Subscriptions, $6,000 (group fitness classes, kids swimming, kids tennis classes etc.)
Telephones and Internet, $2,088
Utilities, $4,000

Total expenses per year are $94,100 per year


Assets:

Tax Advantage accounts (Rollover IRA, Roth IRA, Health Equity, 401K):
$666,000

Brokerage (non tax advantage):
$650,000

The assets in Tax advantage accounts and Brokerage are invested with an Asset allocation of (80% stocks, 20% bonds). Funds being VTSAX and VBTLX. The bond fund is only in tax advantage accounts due to tax efficiency.

Former Primary Home now a rental property (about 6 hours driving distance from current residence). Still in a position where I can sell this and avoid paying capital taxes since I have lived there for two years out of the past five years.
Market Value $550,000
Mortgage outstanding  $260,000
Cash flow - Breaks even on a yearly basis (considering vacancy, repairs etc.)
I am keeping the above property mainly because it is in a top notch neighborhood and expect decent appreciation overtime (not beyond stock market historical returns). May sell this property once we purchase a new home around the area we currently rent and use the equity in the rental to pay towards the new home mortgage.

Cash
$250,000
The cash above is sitting in a Money Market account. I am keeping it there as a down payment on a primary residence. For the time being, I am deferring the purchase of a primary residence (which will cost about $700K) because not only will it make our expenses go up but will also increase my wife’s work commute and my proximity to quality jobs.

Liabilities:
No other liabilities, apart from the mortgage on the rental property listed above.

Summary of Assets:
Current Investments in Stock Market: $1,316,000
Equity in Rental Property: $205,000 (after selling expenses - real estate commission etc., fix up etc.)
Cash reserves to purchase primary residence: $250,000

Other info:
Currently renting in a HCOL area.
While I consider myself as Mustachian, my Wife not so much. She rather enjoy the material luxuries of life and doesn’t mind working longer in the corporate world. For me, I value my time & freedom over being forced to work.

Questions:

1. Please provide optimizations on the above? Since my wife is not a mustachian, I can’t trim the budget much. I have tried methods/ideas recommended by others on this forum but DW is not ready for any major/decent shift in cutting any costs.

2. I am considering taking a few months off from work before going back to work. However, a part of me also tells me to defer freedom and gratification for later once I achieve the FIRE number. My FIRE number (for me and wife) assuming we purchase a new home (about $700K) would be $2,775,000. The home purchase will mean a new mortgage, property tax, HOA and insurance. My yearly expense will increase to $111,000. FIRE number calculated = 25 years * 111,000 = $2,775,000. Any comments here?

3. Any other constructive financial feedback would be appreciated.

gpyros85:
What part of Florida has a market rate rent of $4,000/month? I think this might be your problem here, surrounded by large spenders...  Big lavish lifestyle all around.


Florida is a wonder state, I was born and raised there, can be extremely expensive or very cheap.. i.e. 750k homes next to 150k homes in certain parts...

Paul der Krake:
Well, you can't sustain your current spending with just your wife's income. Something has to give.

The good news is that you can trim $1,000-3,000 in almost every line item of this ridiculous budget of yours, with little effort.

bornInFlorida:
@lhamo Thanks for the feedback. I consider myself mustachian. However, my spouse is not. I have tried converting her over but I can't force her to. From time to time, I do leverage the suggestions posted in another thread on how to convert your SO but it hasn't made too much of a difference to her.

@gpyros85 Thanks for reviewing the content. I never said I currently reside in Florida. I am far from Florida in HCOL area.

@Paul der Krake Thanks for the suggestion.

gpyros85:

--- Quote from: bornInFlorida on July 12, 2018, 08:11:33 PM ---@lhamo Thanks for the feedback. I consider myself mustachian. However, my spouse is not. I have tried converting her over but I can't force her to. From time to time, I do leverage the suggestions posted in another thread on how to convert your SO but it hasn't made too much of a difference to her.

@gpyros85 Thanks for reviewing the content. I never said I currently reside in Florida. I am far from Florida in HCOL area.

@Paul der Krake Thanks for the suggestion.

--- End quote ---


Made a slight assumption due to username!

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