Author Topic: Case Study: Retiring in 2020 looking for some advice  (Read 4416 times)

sterlingmossy

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Case Study: Retiring in 2020 looking for some advice
« on: January 28, 2018, 04:34:37 PM »
Hi,  new to the site hoping for some advice from the wisdom of this crowd.

Life Situation: 52, male, married (26 years) two boys (one 24 working, one 21 a Junior at College), one dog (Lab) living in the north suburbs of Chicago, IL.  Sold my company in 2016, earnout complete end 2019.

Gross Salary/Wages: $250,000 salary $100,000 annual bonus.

Other Ordinary Income: Rental Income $1,000 per month ($12,000 per year) share in a property.

Investments:  $4,118,507.43 invested in Cash, bonds, stocks, commodities, REITS and Alternatives.

House:  $1,114,000 (according to Zillow),  No mortgage.  Property taxes: $20,000 per year.

Other property:   Estimated value $232,548.07 (% share)

Other Assets:  About $200,000

Future income:  $1,785,353  due during 2018 and 2019 remaining payments on business sold  (all except $350k guranteed, last part dependent on performance).

Debt:  None, pay off credit cards each month, no mortgage.

Other:  Will pay for the last year of son's college out of 2017 bonus.

Current expenses:

Category                January   Annualized
Shopping                $1,188.11    $14,257.32
Kids                        $5,115.93    $61,391.16
Auto & Transport    $985.76    $11,829.12
Food & Dining        $1,562.05    $18,744.60
Education                $1,000    $12,000.00
Travel                $750.38    $9,004.56
Health & Fitness        $1,317.92    $15,815.04
Bills & Utilities        $874.02    $10,488.24
Home                $1,289.64    $15,475.68
Gifts & Donations    $720.00    $8,640.00
Pets                        $47.69    $572.28
Entertainment        $485.17    $5,822.04
Business Services    $281.01    $3,372.12
Fees & Charges        $34.00    $408.00
Personal Care        $30.00    $360.00
Uncategorized        $260.00    $3,120.00
Total                        $15,941.68    $193,300.16

Expected ER expenses: (optional, if relevant):  Expect health costs and travel to go up in retirment expect Kids costs to go down after last one graduates college.

Specific Question(s): Clearly we have been very fortunate and has amassed a decent chunk of wealth. We also clearly spend too much. When I retire I have these questions for the wise Mustacians:

1.  What advice do you have for investing in happiness vs pleasure?
2.  I feel that my expenses are way high and don't really need to be,  what are the three biggest areas you would cut back on?
3.  I am thinking about renting the house out and sailing around the world, has anybody done that, any good threads to follow?

Much thanks.


« Last Edit: February 08, 2018, 06:32:58 AM by sterlingmossy »

GetSmart

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #1 on: January 28, 2018, 04:58:12 PM »

Quote
3.  I am thinking about renting the house out and sailing around the world, has anybody done that, any good threads to follow?

Have some friends who did this - sailed just the south Pacific for over 2 years with kids at same point as yours are now and even left the dog with the house tenant.  Not sure what their current situation is, but I'd say go for it.  Chance of a lifetime.  And I doubt they were as flush as you are. 

Also you might want to look at what your expenses will be post school fees and with renting out the house -- looks like it will drop a lot.

Do you already own the sailboat ?

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #2 on: January 28, 2018, 05:37:24 PM »
Thanks,  sounds like a dream trip.  I donít have a boat right now (but have sailed a fair bit over the years).  Currently doing some research on the best tool for the job.

zeli2033

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #3 on: January 28, 2018, 05:43:06 PM »

Current expenses:

Category                January   Annualized
Shopping                $1,188.11    $14,257.32
Kids                        $5,115.93    $61,391.16

Auto & Transport    $985.76    $11,829.12
Food & Dining        $1,562.05    $18,744.60
Education                $1,000    $12,000.00
Travel                $750.38    $9,004.56
Health & Fitness        $1,317.92    $15,815.04
Bills & Utilities        $874.02    $10,488.24
Home                $1,289.64    $15,475.68
Gifts & Donations    $720.00    $8,640.00
Pets                        $47.69    $572.28
Entertainment        $485.17    $5,822.04
Business Services    $281.01    $3,372.12
Fees & Charges        $34.00    $408.00
Personal Care        $30.00    $360.00
Uncategorized        $260.00    $3,120.00
Total                        $15,941.68    $193,300.16

Expected ER expenses: (optional, if relevant):  Expect health costs and travel to go up in retirment expect Kids costs to go down after last one graduates college.

Specific Question(s): Clearly we have been very fortunate and has amasses a decent chunk of wealth. We also clearly spend too much. When I retire I have these questions for the wise Mustacians:

1.  What advice do you have for investing in happiness vs pleasure?
2.  I feel that my expenses are way high and don't really need to be,  what are the three biggest areas you would cut back on?
3.  I am thinking about renting the house out and sailing around the world, has anybody done that, any good threads to follow?

Much thanks.

I know you asked for input from wise mustachians. As a starter mustachian with no wisdom, I'll take a shot at the expense section anyway:

1. Kids. I'm definitely making some assumptions so I may be incorrect but it seems like your kids may be somewhat independent (one is working, the other is nearing the end of college). What all is $5k going to on a monthly basis? I would imagine that at least one kid would be self-sufficient at this time. And from your post, it sounds like tuition will be taken care of with a bonus (not to mention there's an additional education fund line item so I'm not sure if this goes toward any of those costs). I'm wondering what this money is really allocated toward and why. I would take a deeper look at this line item to know what's going out the door now to better understand what will change in retirement so you can make educated and calculated decisions about how much this number will be impacted in retirement. The amount spent on kids is twice what my husband and I spend annually - and that's with living in a moderate to high cost of living coastal city with a penchant for spending absurd amounts of money on food. And speaking of...

2. Food & Dining. This is an area with room for improvement. Not sure if this is for just 2 of you or includes one or both kids so making some assumptions here. As someone who spent an average of $1377 monthly on food last year for two people, I can sympathize. It's also the area it seems like people can impact the fastest just by being cognizant of what they're eating, making a plan to do better and than sticking to the plan. I recommend taking a hard look at this to understand why it's this high and then making adjustments accordingly.

3. Shopping. What all is this going to and why? Is this just mindless consumption? Purposeful? What is it?

I guess the biggest things I'd say are take a harder look at money being spent currently and ask yourself if it's proportional to what actually makes you happy. Obviously you're in a great spot for what you have accumulated and you may have never had to pay much attention to what's gong out the door because you have more than enough. But since you specifically called out your high spending, those are the line items I'd scrutinize first.

monstermonster

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #4 on: January 28, 2018, 05:46:27 PM »
Your net worth is admirable. But your spending, holy schnickes!

Big areas to cut back on:

Food spending - that's 2.5 the average for a family of your size, especially considering your kiddos are out of the house. Try tracking and see where you spend the most - dining out, buying snacks, alcohol, etc. You are clearly doing a lot of dining out with that kind of budget - you spend as much on food in a year as I spend TOTAL (food, international travel, rent, clothing, everything) in a year.

"Shopping" - what exactly is this? Clothing? Dish soap? This is too broad, so if you don't know what it is, start tracking it to figure out what it is.

"Health and fitness" - does this include health insurance or medical co-pays? Otherwise, it's very very high. I work at a high-end boutique gym and even then don't see that level of spending.

Also, business services shouldn't be in your personal budget. Are they going away when the business is sold? Or are they not in fact business services?

Have you considered selling the house? At $20K in property taxes per year, you could rent a very nice place for that amount + maintenance, not even considering the amount that your cash from sale would make in VTSAX. If you're considering a sail around the world scenario, the house might be more of a burden than a blessing.
« Last Edit: January 28, 2018, 05:58:07 PM by monstermonster »
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ysette9

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #5 on: January 28, 2018, 09:12:56 PM »
I second what others have said. Your spending is breathtaking and that is a lot coming from profligate me. You spend as much on your adult kids as I spend on housing  and my house is valued as much as yours. Once college is paid for this line item should be $0, right?

I’m curious what you are spending $15k a year on for a paid-off house that isn’t utilities. Is that property taxes?

are you buying a new car every other year? Why do you spend so much on cars?

What brings you pleasure? What do you look forward to doing?
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sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #6 on: January 28, 2018, 09:35:18 PM »

I know you asked for input from wise mustachians. As a starter mustachian with no wisdom, I'll take a shot at the expense section anyway:

1. Kids. I'm definitely making some assumptions so I may be incorrect but it seems like your kids may be somewhat independent (one is working, the other is nearing the end of college). What all is $5k going to on a monthly basis?

Actually good call out.  This number was high for january and I annualized it (which I shouldn't have).  The january costs included college accomodation and food plan for our youngest.

2. Food & Dining. This is an area with room for improvement. Not sure if this is for just 2 of you or includes one or both kids so making some assumptions here. As someone who spent an average of $1377 monthly on food last year for two people, I can sympathize. It's also the area it seems like people can impact the fastest just by being cognizant of what they're eating, making a plan to do better and than sticking to the plan. I recommend taking a hard look at this to understand why it's this high and then making adjustments accordingly.

Yeah this is bad.  We took out family and friends a couple of times in January and had some big bills.  The irony is that I really don't even like eating out at restaurants.  Your observation is good and I will use it as an excuse to go out less!

3. Shopping. What all is this going to and why? Is this just mindless consumption? Purposeful? What is it?

Some is mindless but the biggest amounts in January where gifts.


Thanks for the helpful thoughts.

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #7 on: January 28, 2018, 09:40:49 PM »
I second what others have said. Your spending is breathtaking and that is a lot coming from profligate me. You spend as much on your adult kids as I spend on housing  and my house is valued as much as yours.
Ouch :)

Once college is paid for this line item should be $0, right? Yes.

Iím curious what you are spending $15k a year on for a paid-off house that isnít utilities. Is that property taxes? Actually that is my wife redecorating!, oh dear.

are you buying a new car every other year? Why do you spend so much on cars?  The biggest number is auto Insurance (about $9k per year)

What brings you pleasure? What do you look forward to doing?  Great question.  I love learning new things.  The last thing that I really loved was learning how to fly and getting my pilot's license.  I also love to travel and discover new places.  I am hoping that the sailing trip will cover both bases for a while.

Thanks for the great observations.

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #8 on: January 29, 2018, 02:06:00 PM »
Even if you don't change your lifestyle at all, and you keep paying for college forever, you are fine. What advice do you need? With the ~$6 million you'll have in 2020 plus a million dollar paid-off house, you can actually start spending quite a bit *more* and still be well within the 4% rule.

I mean, unless there is some considerable emotional attachment to the house, I'd probably sell it just since it sounds like it's a pain in the neck. But you don't need to. And you don't need to rent it, either.

Go sail around the world. Keep eating out if you enjoy it. Ask your wife what she wants to do?

-W

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #9 on: January 29, 2018, 02:15:26 PM »
;). Thanks.

MrThatsDifferent

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #10 on: January 30, 2018, 08:29:52 AM »
Congrats on what youíve achieved, you clearly worked hard for it. Nothing youíve written seems particularly mustachian and thatís ok. My philosophy now is focusing on experiences, not things. Maybe if you and your wife travel the world and have adventures it will fill the voids that shopping and home redecorating are addressing? I can imagine that your business took you away from home a bit, so would be good to rediscover each other. What brings people pure joy is helping others and maybe there are ways you can volunteer your time and wisdom to people who would benefit from what you know?  I think if you get out of the house a lot of the excess consumerism will disappear.

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #11 on: January 30, 2018, 09:00:05 AM »
Congrats on what youíve achieved, you clearly worked hard for it. Nothing youíve written seems particularly mustachian and thatís ok. My philosophy now is focusing on experiences, not things. Maybe if you and your wife travel the world and have adventures it will fill the voids that shopping and home redecorating are addressing? I can imagine that your business took you away from home a bit, so would be good to rediscover each other. What brings people pure joy is helping others and maybe there are ways you can volunteer your time and wisdom to people who would benefit from what you know?  I think if you get out of the house a lot of the excess consumerism will disappear.

Thanks for the response and the wise thoughts.  The phrase "Nothing youíve written seems particularly mustachian"  rings true.  I feel a little embarrassed posting at the end of the journey vs along the way.  That said as we grew our wealth we did it by never having a car payment, having a 15 year vs a 30 year mortgage that we payed of in full, maxing out our 401k every year and investing a very high percentage of our savings (although in my case the investments went into the business I was building vs the market).  We have also, always, tried to give back to the world in money and time.  So perhaps a sprinkle of mustache along the way.

That said clearly our spending today is not very mustacian right now, hence the post.  I am looking for a nudge to help us rein things in and focus on experiences vs things as we set sail (literally and figuratively) into RE.
« Last Edit: January 30, 2018, 09:09:40 AM by sterlingmossy »

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #12 on: January 30, 2018, 03:49:53 PM »
I am curious.  If there where three mustacian rules to live a Post retirement life by, what would they be?

GOFU

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #13 on: January 30, 2018, 04:47:35 PM »
I am curious.  If there where three mustacian rules to live a Post retirement life by, what would they be?

Spend a few hours browsing the articles written by Mr. Money Mustache himself and you will be enlightened.

Impressive accumulation of wealth. Congratulations and I wish you every success.

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #14 on: January 30, 2018, 04:52:02 PM »
I am curious.  If there where three mustacian rules to live a Post retirement life by, what would they be?

Spend a few hours browsing the articles written by Mr. Money Mustache himself and you will be enlightened.

Impressive accumulation of wealth. Congratulations and I wish you every success.

I have read around 50% of the MMM posts (in a crazy binge).  I was just curious to see how you guys synthesized them.  I also sense that I am on the "Fat FIRE" side of the aisle vs the "Lean FIRE" side.  At least for now.

GOFU

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #15 on: January 30, 2018, 06:29:33 PM »
I am curious.  If there where three mustacian rules to live a Post retirement life by, what would they be?

Spend a few hours browsing the articles written by Mr. Money Mustache himself and you will be enlightened.

Impressive accumulation of wealth. Congratulations and I wish you every success.

I have read around 50% of the MMM posts (in a crazy binge).  I was just curious to see how you guys synthesized them.  I also sense that I am on the "Fat FIRE" side of the aisle vs the "Lean FIRE" side.  At least for now.

Heh. If you ever get to the lean side we should all study you as the most cautionary of tales.

You'll figure it out. My view of what's most important once the money thing is conquered is to be with people who make you happy and stay disciplined with health and personal habits. Enjoy it all in good health.

wordnerd

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #16 on: January 30, 2018, 06:32:18 PM »
To me, the blog emphasizes self-reliance, taking joy in doing things for less through one's own "badassity," environmental stewardship, stoicism, and a rejection of consumerism. These values likely result in lower spending and financial freedom. Perhaps, it's also possible to embody these values on a $200K/yr budget, but I have difficulty imagining it.

fuzzy math

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #17 on: February 01, 2018, 02:03:49 PM »
Echoing what others have said about talking to your wife. You want to rent the house out and sail around the world, and your wife wants to spend lots of $$ redecorating it.
Seems it would be difficult to find a tenant who would take care of your property well enough if there is truly an ongoing up-keep process occurring on an annual basis. If you make the place too nice, you've effectively shut out many of your options. Also, is all of the shopping going towards buying tchotchkes to fill the house? Because they are going to have to be packed up in storage to rent out the home. Just like the old saying "you can't take it with you" (when you die), you also can't take it with you on a sailboat.

Impressive savings I must say! But your spending is outdoing what you're bringing home after taxes. Hopefully you can severely cut down or you will always require $300k + a year in income and that does not allow for only $4 mill in assets.
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SugarMountain

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #18 on: February 01, 2018, 04:11:55 PM »
Hi,  new to the site hoping for some advice from the wisdom of this crowd.

Life Situation: 52, male, married (26 years) two boys (one 24 working, one 21 a Junior at College), one dog (Lab) living in the north suburbs of Chicago, IL.  Sold my company in 2016, earnout complete end 2019.

Gross Salary/Wages: $250,000 salary $100,000 annual bonus.

Other Ordinary Income: Rental Income $1,000 per month ($12,000 per year) share in a property.

Investments:  $4,118,507.43 invested in Cash, bonds, stocks, commodities, REITS and Alternatives.

House:  $1,114,000 (accroding to Zillow),  No mortgage.  Property taxes: $20,000 per year.

Other property:   Estimated value $232,548.07 (% share)

Other Assets:  About $200,000

Future income:  $1,785,353  due during 2018 and 2019 remaining payments on business sold  (all except $350k guranteed, last part dependent on performance).

Debt:  None, pay off credit cards each month, no mortgage.

Other:  Will pay for the last year of son's college out of 2017 bonus.

Current expenses:

Category                January   Annualized
Shopping                $1,188.11    $14,257.32
Kids                        $5,115.93    $61,391.16
Auto & Transport    $985.76    $11,829.12
Food & Dining        $1,562.05    $18,744.60
Education                $1,000    $12,000.00
Travel                $750.38    $9,004.56
Health & Fitness        $1,317.92    $15,815.04
Bills & Utilities        $874.02    $10,488.24
Home                $1,289.64    $15,475.68
Gifts & Donations    $720.00    $8,640.00
Pets                        $47.69    $572.28
Entertainment        $485.17    $5,822.04
Business Services    $281.01    $3,372.12
Fees & Charges        $34.00    $408.00
Personal Care        $30.00    $360.00
Uncategorized        $260.00    $3,120.00
Total                        $15,941.68    $193,300.16

Expected ER expenses: (optional, if relevant):  Expect health costs and travel to go up in retirment expect Kids costs to go down after last one graduates college.

Specific Question(s): Clearly we have been very fortunate and has amasses a decent chunk of wealth. We also clearly spend too much. When I retire I have these questions for the wise Mustacians:

1.  What advice do you have for investing in happiness vs pleasure?
2.  I feel that my expenses are way high and don't really need to be,  what are the three biggest areas you would cut back on?
3.  I am thinking about renting the house out and sailing around the world, has anybody done that, any good threads to follow?

Much thanks.

Finally someone on this site with worse spending habits than myself! lol.  Sterling Mossy....do you drive a Lotus by any chance?  Further down in the thread, did you say you spend $9k on car insurance?  If so, I'd start by getting some cheaper cars or possibly shop insurance companies.  Health & Fitness seems really high.  Only $47 on poor Fido?  Come on man, get the dog a bone once in a while! (I did last year's numbers and we spend over $400/month on a dog and a cat. Still not sure how.)

ysette9

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #19 on: February 01, 2018, 04:47:43 PM »
I’m curious how one spends $9k on car insurance.
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former player

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #20 on: February 01, 2018, 06:08:47 PM »
1.  Happiness for me is keeping it simple.  Less house and less things in the house is not just less to pay for, it's less to have to manage, and pay for, and keep in repair.  Which means more time for friends and family, more time and money for getting out and about and doing things.

2.  A lot of your expenses are either about or dependent on your kids and your wife.  You might check out this thread about getting your significant other on board -

https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/

Also, are your sending your kids out into the world with sound ideas about money?

3.  Your expenses tell me that nearly all your spending at the moment is about being tied to home - the big house, the wasteful utilities, the expensive dťcor, the shopping and spending and dining, the expensive cars.  The people I know who've sailed around the world didn't care about any of those things.  Plus, how much sailing have you currently doing?  You live in Chicago: how often have you been getting out on the lake?  People who want to sail to the extent of sailing around the world are usually people who do sail, at every opportunity, or are only not sailing because they are working on getting the boat outfitted.  (Personally, if I were inclined to spend my retirement sailing I'd probably do it in a series of long charters in interesting places.  Crossing oceans in small boats is mostly boring and occasionally frightening.  Much better to charter a boat in New England for the summer, then during winter (their summer) in New Zealand, then in the Mediterranean for summer, and so on.)
Be frugal and industrious, and you will be free (Ben Franklin)

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #21 on: February 01, 2018, 06:53:24 PM »
Iím curious how one spends $9k on car insurance.

OK  you asked:

500/500 Comprehensive.  $1,000 deductable   
   
Item            Annual
Car 1    $1,490
Car 2    $1,144
Car 3    $1,807
Car 4    $989
Motorcycle    $613
            $6,043
Plus
House    $2,430
Valuables    $117
Umbrella     $1,065
Total            $9,655

Two males in their 20's doesn't help.

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #22 on: February 01, 2018, 07:00:37 PM »
1.  Happiness for me is keeping it simple.  Less house and less things in the house is not just less to pay for, it's less to have to manage, and pay for, and keep in repair.  Which means more time for friends and family, more time and money for getting out and about and doing things.

Makes sense

2.  A lot of your expenses are either about or dependent on your kids and your wife.  You might check out this thread about getting your significant other on board -

https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/


Good idea.


3.  Your expenses tell me that nearly all your spending at the moment is about being tied to home - the big house, the wasteful utilities, the expensive dťcor, the shopping and spending and dining, the expensive cars.  The people I know who've sailed around the world didn't care about any of those things.  Plus, how much sailing have you currently doing?  You live in Chicago: how often have you been getting out on the lake?  People who want to sail to the extent of sailing around the world are usually people who do sail, at every opportunity, or are only not sailing because they are working on getting the boat outfitted.  (Personally, if I were inclined to spend my retirement sailing I'd probably do it in a series of long charters in interesting places.  Crossing oceans in small boats is mostly boring and occasionally frightening.  Much better to charter a boat in New England for the summer, then during winter (their summer) in New Zealand, then in the Mediterranean for summer, and so on.)

I grew up racing and sailing in the UK.  Did some ocean sailing in my 20s (Indian, aegean, Med.) and raced on the great lakes for 8 years.  I haven't owned a boat for a few years but the wife and I are off to Greece in September on a cat with a friend.  Luckily my wife is a great sailor with an iron stomach.  One of my best friends live in NZ, was a, recently retired, proffesional skipper and has invited me to spend the "summer" sailing around Fiji and Tonga with him so that should shake out the cobwebs.  Right now it is a dream, we will see how things unfold.

ysette9

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #23 on: February 01, 2018, 07:04:02 PM »
That makes much more sense that it is all of your insurance, not just auto.
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SugarMountain

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #24 on: February 01, 2018, 07:04:22 PM »
Iím curious how one spends $9k on car insurance.

OK  you asked:

500/500 Comprehensive.  $1,000 deductable   
   
Item            Annual
Car 1    $1,490
Car 2    $1,144
Car 3    $1,807
Car 4    $989
Motorcycle    $613
            $6,043
Plus
House    $2,430
Valuables    $117
Umbrella     $1,065
Total            $9,655

Two males in their 20's doesn't help.

That makes more sense.  Just for tracking purposes, I'd separate out car/motorcycle insurance from the others.  Do you need Comp & Collision on all 4 cars & the bike? 

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #25 on: February 01, 2018, 07:06:23 PM »

Finally someone on this site with worse spending habits than myself! lol.  Sterling Mossy....do you drive a Lotus by any chance?  Further down in the thread, did you say you spend $9k on car insurance?  If so, I'd start by getting some cheaper cars or possibly shop insurance companies.  Health & Fitness seems really high. 

I don't drive a lotus but have raced cars at an amateur level and need to kick the habit.  Agreed cars and car insurance are a good place to start cutting.

Health & Fitness seems really high.  Only $47 on poor Fido?  Come on man, get the dog a bone once in a while! (I did last year's numbers and we spend over $400/month on a dog and a cat. Still not sure how.)

This year the numbers will be higher.  Poor girl just had eye surgery :(


sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #26 on: February 01, 2018, 07:08:11 PM »

That makes more sense.  Just for tracking purposes, I'd separate out car/motorcycle insurance from the others.  Do you need Comp & Collision on all 4 cars & the bike?

I think the better question is "do you really need four cars and a bike!"  :) The good news is that if we are sailing around the world we don't need any of them!

TreeTired

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #27 on: February 01, 2018, 07:27:12 PM »
I was going to ask you if your wife was fully onboard with the round-the-world sailing trip, but it sounds like she is an avid sailor. Still, I would make sure she is up for it,  vs a shorter but perhaps equally exotic sailing trip.

You asked, what gives you (me) pleasure,   

Well,  certainly 
Quote
We have also, always, tried to give back to the world in money and time.
   It was mostly "time" 10 years ago when I stopped working and did not feel financially secure, but recently have been able to give both.

I enjoy spending time and doing stuff with my wife, especially travelling.  We both like roadtrips, but I have to compromise at times.  Her idea of a dream trip was a river cruise, so we did that. I didn't suffer, but I am not wild to do it again. I hope I can convince her to take a bicycle trip sometime.
Accidentally retired in 2007.

eliza

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #28 on: February 05, 2018, 01:39:21 PM »
Financially you are fine.   You spend a ton of money (holy shitballs, so much money!), but you can afford it.  If you feel like you aren't comfortable with some of that spending, I'd strongly recommend reading Your Money or Your Life by Joe Dominguez and Vicky Robin.  You aren't the target audience, but the exercise on identifying your core values and comparing your spending to your values might be very helpful if you're feeling a general unease with your lifestyle.

A long-term sailing trip sounds AMAZING!

If you go forward with it, I would seriously consider selling the house and the majority of your belongings and putting what remains in storage.  Not necessarily for the money (you're rich - you can afford it!), but because of the difficulty and hassle of maintaining a property while you are full time traveling, especially on a sailing trip where you likely will be largely out of contact for long stretches of time.

Or, if you do decide you need to keep the house, I volunteer as house/cat sitter.  :-D

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #29 on: February 05, 2018, 01:41:52 PM »
Haha,  Holy shitballs is right! 

I think our son is going to move back to Chicago from Boston and rent the house while we are gone which will be perfect,  however, if that falls through you will be my first call :)  Thanks for the book recco.

Bicycle_B

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #30 on: February 07, 2018, 02:09:54 PM »
So if car insurance is where you're going to start chipping away at the ice sculpture...

Why comprehensive?  You have $4M in assets.  You wreck a car, you decide whether to replace it or not.  Your kid wrecks a car, they don't have a car any more.  Just pay liability, eh?

Fwiw - you have the money to maintain your current lifestyle (just barely IMHO, because at your income level, you have taxes... the 4% rule doesn't account for those).  If you're going to sail, renting out the castle is cost inefficient.  Decide which one.  Ask you're wife if wants an adventure enough to sell the house.  If yes, look for a small craft to use as a houseboat while you put the castle on the market.  Commute from the lake to your company while you finish your earnout!

sterlingmossy

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #31 on: February 08, 2018, 05:18:28 AM »
So if car insurance is where you're going to start chipping away at the ice sculpture...

Why comprehensive?  You have $4M in assets.  You wreck a car, you decide whether to replace it or not.  Your kid wrecks a car, they don't have a car any more.  Just pay liability, eh?

Fwiw - you have the money to maintain your current lifestyle (just barely IMHO, because at your income level, you have taxes... the 4% rule doesn't account for those).  If you're going to sail, renting out the castle is cost inefficient.  Decide which one.  Ask you're wife if wants an adventure enough to sell the house.  If yes, look for a small craft to use as a houseboat while you put the castle on the market.  Commute from the lake to your company while you finish your earnout!

Two solid ideas.  Thanks much.

Xenantaya

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #32 on: February 27, 2018, 09:34:10 AM »
Wow, I have a lot of parallel statistics to sterlingmossy, except for no kids and fewer cars.  My wife and I live in Chicago, have $4.3-4.4M in investments, and have terrible spending habits of around $200k annually, including spending far more on food than what's acceptable to Mustachians.  If our house were paid off, I'd be pulling the trigger on FIRE myself.

To answer one of your questions about three biggest areas to cut back on, I'd definitely start with cars and then food.  Unless you really get a lot of enjoyment from driving your different cars, hard to see how the insurance and yearly maintenance cost is worth keeping all of them and the motorcycle.  We currently have two cars (one new station wagon, one older sports car) we don't drive much (though since we're in the city we have public transport options), and if we RE I'll definitely get rid of my sports car.  If I were you, I'd think about whether it's possible to have no more than 2 cars.  For food, while there's a lot of great restaurants to eat in Chicago, still seems like this could be cut back to $1000 or less per month, which should still mean you can eat at a nice restaurant once a week and maybe eat out for brunch on the weekends.

For the third category, since people already have mentioned the redecorating, I'll ask about Health & Fitness, which seems extremely high at over $1300 a month.  What's going in that number--Weekly chiropractor visits, massages, what?  Consider whether what's in this category is necessary or whether some of it can be skipped.

msmargarita

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #33 on: February 27, 2018, 11:59:32 AM »
So if car insurance is where you're going to start chipping away at the ice sculpture...

Why comprehensive?  You have $4M in assets.  You wreck a car, you decide whether to replace it or not.  Your kid wrecks a car, they don't have a car any more.  Just pay liability, eh?

Fwiw - you have the money to maintain your current lifestyle (just barely IMHO, because at your income level, you have taxes... the 4% rule doesn't account for those).  If you're going to sail, renting out the castle is cost inefficient.  Decide which one.  Ask you're wife if wants an adventure enough to sell the house.  If yes, look for a small craft to use as a houseboat while you put the castle on the market.  Commute from the lake to your company while you finish your earnout!

Two solid ideas.  Thanks much.
Some insurance companies require comprehensive auto coverage in order to qualify for an umbrella policy, so you might want to double check that before making any changes

CloserToFree

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Re: Case Study: Retiring in 2020 looking for some advice
« Reply #34 on: February 27, 2018, 12:43:19 PM »
Just adding another thought to all the others -- one thing that might help motivate you to cut down your spending is to think about what you could/would do with that money philanthropically if you weren't spending it.  How fun would it be to give away even $1k a month to the charity or cause of your choice? Or to send an inner city Chicago kid to college, solely from the savings you would achieve by cutting down non-meaningful spending?  I find going down this thought path is really helpful when I get stuck in a "eh, it's not so bad, I can afford it" mentality.

And one more thing.  The support for your kids in their early 20's.  I would do some hard thinking about whether you're really helping them out in the long run by subsidizing their lives right now (thinking in particular of the car situation).  What's your end game?  Are you going to continue paying for month to month things for them indefinitely? into their 30's? Do they appreciate it?  But more importantly, do they really understand the value of money, or are you setting them up for entitlement/dependency/a perceived "need" for nice things they can't afford on their own?  I say this with love.  I have close family members whose dad paid for all kinds of things for them -- college yes, but also vacations, cars, shopping sprees, NYC rent in full, monthly credit card bills, pretty much anything they'd ask him for -- and it seemed maybe OK right after college but now they're in their late 20s and early 30s and the subsidization is *still* going on.  They're now used to living in fancy apartments that they couldn't possibly afford on income from their normal jobs, living lifestyles that involve eating out and lots of everyday luxuries, and I see no end in sight for the financial support.  I realize some people feel strongly about helping their kids out in this way, but I'd do some thinking about this now while you're focusing on your budget.

Congrats on being in such an awesome place financially, and best of luck with the sailing trip or whatever else you decide to pursue in retirement!