Author Topic: CASE Study: when are we ready for FIRE?  (Read 10535 times)

ReadyOrNot

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CASE Study: when are we ready for FIRE?
« on: January 16, 2020, 04:31:48 AM »
Topic Title: Reader Case Study – are we ready to FIRE? If not now, when?

Background I am an avid reader of financial independence but since I am the major breadwinner of our family, I would like some review of our financial situation to see if we are close to FIRE.  My partner has had health issues (high blood pressure, sleep apnea, early diabetes, etc) so we keep our finances separate, although I pay the majority of the bills.  Due to the medical issues, we probably will not plan to marry and intertwine our finances to protect against unforeseen medical costs.

Life Situation: IRS filing status – head of household.  My partner (age 48) and I (age 48) live in the western US in a Low to MCOL city, with a 16 year old child who will attend community college after HS and transfer to a local university to complete undergrad degree.

Gross Salary/Wages: Me $200k annually, partner $25k annually

Individual amounts of each Pre-tax deductions


401k: $19k
HSA: $6k
Limited FSA: $1k
medical premiums: $11k

Other Ordinary Income: N/A

Qualified Dividends & Long Term Capital Gains: N/A

Rental Income, Actual Expenses, and Depreciation: N/A

Adjusted Gross Income: $225k annually, take home after pre-tax & post-tax deductions: $140k

Taxes: Federal $27k, state/local $5k, and FICA $22k. 

Current expenses: All numbers are annual:

Annual current expenses:

* Mortgage: $20k  (just refinanced with new 30 year loan with rate of 3.8%)
* Taxes & Insurance: $4k
* HOA: $1k
* property maintenance / landscaping: $3k
* Utilities: $3k (this could be trimmed to $2k post-FIRE)
* Internet: $1.5k (this could be trimmed to $600 post-FIRE)
* mobile phone for family: $1.5k
* vehicle maintenance / taxes / gas: 3.5k (this could be trimmed to $1.5k post-FIRE)
* auto insurance / umbrella insurance:  $2k  (this could be trimmed to $1k post-FIRE)
* pets: $1k (this could be trimmed to $300 post-FIRE)
* groceries / dining: $14k (we do tend to eat out a lot since we both hate cooking and don’t have time to shop groceries / cook often) this could be trimmed to $6k post-FIRE
* memberships: $1k ( gym, AAA, mailbox service, Amazon, Netflix, Disney+, Youtube Red) - this could be trimmed to $500 post-FIRE
* medical / dental premiums: $11k (already deducted in paycheck)
* medical / dental expenses: $2.5k
* Gifts / Charity: $1k
* Travel & Entertainment: $2k (this could be incorporated in the total travel expense of $10k which is purely optional post-FIRE)
* clothing / shopping: $2k (this could be trimmed $1k post-FIRE)
* term life insurance: $1k (this could be cut totally post-FIRE)
* Misc expenses:  $3k (this could be trimmed to $1.5k post-FIRE)

Total expenses (including medical premiums) ~ $78k  [could trim $17.6k to $19k post-FIRE depending on how we calculate travel or how much we travel / entertain, for a lean expense number of $60k per year]

Other contributions that go away post-FIRE: 
* max 401k / Roth IRA contributions:  $19k (me – deducted in paycheck), $5.5k (partner – manual contribution annually)
* max HSA contributions: $6k (deducted in paycheck)
* Limited FSA contributions: $1k (deducted in paycheck)

Expected ER expenses: expect to travel more during ER, maybe around $10k - $20k per year, depending on the type of travel we do.

Assets:

Majority of assets are in my name (85%)

* 401k  $200k (70% stocks 30% bonds)
* IRA $700k (aggressively invested in stocks > 80%)
* Roth IRA: $170k (aggressively invested in stocks > 80%)
* S529: $40k
* HSA: $55k
* cash: $100k
* Home equity: $100k
* cars: $40k
* VUL: $240k  (I know VULs are expensive, but these were set up well before Roth IRAs were available as a way to max fund it to maximize tax savings and also as an estate planning tool to pass something along to child in future if we burn through all else).

Total Assets (including $100k in home equity): $1.65m

Liabilities:

Mortgage: $380k @ 3.8% interest for 30 years


Specific Question(s):   Wanted to know where we stand in relation to FIRE norms.  I’m aiming for roughly 30X annual expenses to give us a safety margin, in case child has a “failure to launch” or medical costs go through the roof.

We love our jobs and I have no problem working 5 – 7 more years until age 55 (strategically child will be done with college), but I also love the idea of ER if we can devote our time to more worthy causes and fun. 

Also considering worst case scenario – we get burned out from our jobs when is the earliest we could RE?

« Last Edit: January 16, 2020, 09:53:03 AM by ReadyOrNot »

oswin

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Re: CASE Study: when are we ready for FIRE?
« Reply #1 on: January 16, 2020, 07:47:04 AM »
Well, I've got good news and bad news. Good news is your only debt is your mortgage! And you're spending well below your income.

The bad news is that at your current level of spending, you're not all that close to FIRE. At your current spending levels, 30X expenses means investments of $2.34m. Since you can't use home or car equity to live on, and you probably want to spend that 529 on college stuff, you'll need $2.34m-$1.47m=$870k more in investments to reach that 30x number. Now, assuming that the money going into your HSA is being saved and not spent, you're currently in a position to save:
401k: $19k
HSA: $6k
Take-home pay minus expenses: $140k-$78k=$62k
Total yearly savings: $87k
Years to save up $870k at this rate: 10

However, if you're willing to try to tweak your spending, we can make the numbers look a little better. I bet that you could trim off $10k if you tried - spend a lot less on dining, trim some clothing/shopping, watch out for misc expenses. Your phones and internet seem crazy expensive too, maybe shop around. If you only need $68k/year, then your 30x number is $2.04m, leaving you only $570k away from your goal. Spending $10k less/year means you can save $10k more/year, and saving $90k/year lets you hit your 30x number in ~5.9 years.

Best of luck to you!

waltworks

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Re: CASE Study: when are we ready for FIRE?
« Reply #2 on: January 16, 2020, 08:05:06 AM »
Your 401k, HSA, etc contributions are not expenses. Take those off the expense side of the ledger. I show you spending roughly $40k/year, with assets over $1.5million. Congratulations, you already hit your 30x number.

Now, you are going to need to figure out a plan for health insurance for the 20 years you have to Medicare. But I'm guessing you're still fine.

-W

RWD

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Re: CASE Study: when are we ready for FIRE?
« Reply #3 on: January 16, 2020, 08:06:53 AM »
If you can cut back your expenses (to under ~$50k) you can FIRE today. You can run numbers through cFIREsim to simulate the effects of the finite number of mortgage payments and future social security, pensions, etc. Without changes you're probably looking at 6 years before you can FIRE (assuming a predictable stock market).


Annual current expenses:

* Mortgage: $20k  (just refinanced with new 30 year loan with rate of 3.8%)
* Taxes & Insurance: $4k
* HOA: $1k
* property maintenance / landscaping: $3k
* Utilities: $3k
* Internet: $1.5k
* mobile phone for family: $1.5k
* vehicle maintenance / taxes / gas: 3.5k
* auto insurance / umbrella insurance:  $2k
* pets: $1k
* groceries / dining: $14k (we do tend to eat out a lot since we both hate cooking and don’t have time to shop groceries / cook often)
* memberships: $1k ( gym, AAA, mailbox service, Amazon, Netflix, Disney+, Youtube Red)
* medical / dental premiums: $11k (already deducted in paycheck)
* medical / dental expenses: $2.5k
* max 401k / Roth IRA contributions:  $19k (me – deducted in paycheck), $5.5k (partner – manual contribution annually)
* max HSA contributions: $6k (deducted in paycheck)
* Limited FSA contributions: $1k (deducted in paycheck)
* Gifts / Charity: $1k
* Travel & Entertainment: $2k
* clothing / shopping: $2k
* term life insurance: $1k
* Misc expenses:  $3k
Dang that is a lot of money. You're spending $31k/year on your residence alone, that is pretty nuts. At least the mortgage will go away after 30 years but that doesn't help early portfolio survivability.

How big is your house? We're spending roughly half as much on utilities. Depending on how the utilities expenses break down you may want to consider energy efficiency upgrades and maybe even solar panels.

Your internet cost is so high! $125/month! Ours is $80/month and that is for gigabit fiber. You should easily be able to halve this.

How many phone lines do you have? In a few years your kid can pay for their own phone bill and then two lines should be plenty and only cost $60/month tops (we use Google Fi but there are cheaper options too).

Your grocery / dining bill is killing your budget. Fortunately once you retire you will have plenty of time to prepare your own meals. We're personally only spending $4k in this category. Is hating cooking enough reason to require an extra $300k in investments in order to retire? This line item alone means you'll need to work an extra year and a half.

Everything else is mostly nickel-and-diming you. Nothing crazy by themselves (though perhaps on the high side) but there are a lot of optional spending items. I tallied up about $9k per spending per year, another $270k you'll need to save up to cover.

Some minimal impact changes could easily shave years off your mandatory working career. A full Mustachian makeover could allow you to retire tomorrow.


Your 401k, HSA, etc contributions are not expenses. Take those off the expense side of the ledger. I show you spending roughly $40k/year, with assets over $1.5million. Congratulations, you already hit your 30x number.

Now, you are going to need to figure out a plan for health insurance for the 20 years you have to Medicare. But I'm guessing you're still fine.

-W
If you tally up the expenses list it comes out to $78k with the 401k, HSA, etc. excluded. Add on the desired additional $10k-$20k in travel and you have a necessary ~$3 million FIRE number...

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #4 on: January 16, 2020, 08:53:26 AM »
Well, I've got good news and bad news. Good news is your only debt is your mortgage! And you're spending well below your income.

The bad news is that at your current level of spending, you're not all that close to FIRE. At your current spending levels, 30X expenses means investments of $2.34m. Since you can't use home or car equity to live on, and you probably want to spend that 529 on college stuff, you'll need $2.34m-$1.47m=$870k more in investments to reach that 30x number. Now, assuming that the money going into your HSA is being saved and not spent, you're currently in a position to save:
401k: $19k
HSA: $6k
Take-home pay minus expenses: $140k-$78k=$62k
Total yearly savings: $87k
Years to save up $870k at this rate: 10

However, if you're willing to try to tweak your spending, we can make the numbers look a little better. I bet that you could trim off $10k if you tried - spend a lot less on dining, trim some clothing/shopping, watch out for misc expenses. Your phones and internet seem crazy expensive too, maybe shop around. If you only need $68k/year, then your 30x number is $2.04m, leaving you only $570k away from your goal. Spending $10k less/year means you can save $10k more/year, and saving $90k/year lets you hit your 30x number in ~5.9 years.

Best of luck to you!
Thank you for the analysis.  I agree there is a lot of room for trimming.  Food could probably be cut in half with fairly low effort.  We do have a soft spot for sushi so I do allow for roughly $3.5k per year for a good meal 3-4 times per month.  All other food expenditures could be greatly reduced.

Internet / phone can probably go down post-FIRE, since we won't need it to sustain our work (I telecommute from home 3 days per week and need good internet to attend video conference calls and be available for ad-hoc calls, etc.).  I do get partial reimbursement to the tune of $800 per year for phone/internet combined so it's not all bad, but I wanted to put the worst case expense on it to see what it would look like.

Clothing budget can go down drastically post-FIRE, since we won't have to dress to impress for work.  We could trim that to pretty much a few hundred I think.  So just off the top of my head, if we trim dining by $7k, clothing / shopping by $1.5k, get rid of term life insurance for $1k, pet expenses by $500, we would have $10k in spending slashed.  That could give us some wiggle room to travel without increasing our expenses.

I think we could also get rid of 1 car, and that would save another $1.5k, cut internet to $600, cut some membership to $500, that would be another $2k saved.  Our annual expense would be $66k, then 30x that would be around $2m, and we would need 5 more years to get to that with 0% return from our investments (just pure savings).  So the math is similar to your calculations.

I will noodle on this more and see how we can trim the fat elsewhere. Thanks!

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #5 on: January 16, 2020, 08:54:58 AM »
Your 401k, HSA, etc contributions are not expenses. Take those off the expense side of the ledger. I show you spending roughly $40k/year, with assets over $1.5million. Congratulations, you already hit your 30x number.

Now, you are going to need to figure out a plan for health insurance for the 20 years you have to Medicare. But I'm guessing you're still fine.

-W
Thanks for the input.  I think our expenses are still in the $60k - $70k if we keep our mortgage as is, so we have a bit to go. 

waltworks

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Re: CASE Study: when are we ready for FIRE?
« Reply #6 on: January 16, 2020, 09:07:32 AM »
Thanks for the input.  I think our expenses are still in the $60k - $70k if we keep our mortgage as is, so we have a bit to go.

You may want to rewrite the expenses portion of this case study. Where is the extra $20-30k coming from when retired?

-W

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #7 on: January 16, 2020, 09:08:55 AM »
If you can cut back your expenses (to under ~$50k) you can FIRE today. You can run numbers through cFIREsim to simulate the effects of the finite number of mortgage payments and future social security, pensions, etc. Without changes you're probably looking at 6 years before you can FIRE (assuming a predictable stock market).
Thanks for the link, I'll definitely study that to see what it can tell me.
Quote
Dang that is a lot of money. You're spending $31k/year on your residence alone, that is pretty nuts. At least the mortgage will go away after 30 years but that doesn't help early portfolio survivability.

How big is your house? We're spending roughly half as much on utilities. Depending on how the utilities expenses break down you may want to consider energy efficiency upgrades and maybe even solar panels.
My house is pretty average for where we live, about 2600 sq feet with a pool.  I over-estimated on utilities just so I'd be more conservative, but realistically that could be around $2k if we were a bit stingier on our thermostats.
Quote
Your internet cost is so high! $125/month! Ours is $80/month and that is for gigabit fiber. You should easily be able to halve this.
Agreed, we have gigabit fiber, and it costs around $120 per month with no other options.  I do telecommute from home so it is important to have good internet speeds.  After FIRE I think we could cut it down to $600 per year.
Quote
How many phone lines do you have? In a few years your kid can pay for their own phone bill and then two lines should be plenty and only cost $60/month tops (we use Google Fi but there are cheaper options too).
We have 4 lines, including one for my mom to help her out.  We have a prepaid plan with 20Gb  data each for roughly $30 per line, including hot spot which I take advantage when I'm telecommuting when traveling.  I feel this is pretty reasonable, although I have budgeted roughly $500 per year for phone replacement for whoever needs new phones every 2-3 years per line
Quote

Your grocery / dining bill is killing your budget. Fortunately once you retire you will have plenty of time to prepare your own meals. We're personally only spending $4k in this category. Is hating cooking enough reason to require an extra $300k in investments in order to retire? This line item alone means you'll need to work an extra year and a half.
Agreed, we definitely have tons of fat to trim here.  I think cutting it in half is more than likely, about I think we probably can't go lower than $5.5k due to our love for sushi.
Quote

Everything else is mostly nickel-and-diming you. Nothing crazy by themselves (though perhaps on the high side) but there are a lot of optional spending items. I tallied up about $9k per spending per year, another $270k you'll need to save up to cover.

Some minimal impact changes could easily shave years off your mandatory working career. A full Mustachian makeover could allow you to retire tomorrow.

...

If you tally up the expenses list it comes out to $78k with the 401k, HSA, etc. excluded. Add on the desired additional $10k-$20k in travel and you have a necessary ~$3 million FIRE number...
Really appreciate the analysis and questions.  I put up the worst case spending on there so we have plenty of room to scale back.  I think we could downsize to one car after our child moves on, so auto / insurance expenses can go down drastically.  I will chop the life insurance as we will have sufficient savings to sustain us once our child moves out as well.  It is possible to downsize our house but I think we really enjoy where we live and wouldn't move unless we really needed the cash.

It's kind of sobering how fast money can disappear even when we strive to save 40% on our $225k income.  We definitely can do a lot more and I'll be analyzing this in more detail a lot. 
« Last Edit: January 16, 2020, 09:11:54 AM by ReadyOrNot »

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #8 on: January 16, 2020, 09:15:33 AM »
Thanks for the input.  I think our expenses are still in the $60k - $70k if we keep our mortgage as is, so we have a bit to go.

You may want to rewrite the expenses portion of this case study. Where is the extra $20-30k coming from when retired?

-W
I think we will need to work another ~5 years to pay off the mortgage, or save equivalent amount and put it in the market to make greater than 4% to pay for the mortgage post-FIRE. 

I could also work part time and earn about $30k - $40k post-FIRE, for another 3-5 years, in worst case scenario.
« Last Edit: January 16, 2020, 09:27:15 AM by ReadyOrNot »

ysette9

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Re: CASE Study: when are we ready for FIRE?
« Reply #9 on: January 16, 2020, 11:59:00 AM »
You are getting good input from others on the finance side. When I first read your post I couldn’t see the finances because all I could see was how precarious a position your SO is in. He/she/they earn very little, have very few assets, and can not afford the life you are living together should you choose to up and leave. I’m not at all implying that you are the sort of person who would do that; clearly your relationship has some longevity if you are raising a teenager together. However if my entire foundation rested on the goodwill of the person sharing my bed, a person who could turn my life on its head and upend everything we had built together if he woke up one day and decided he wanted out, I’d have ulcers and high blood pressure and anxiety from the riskiness of the situation.

I hope you have named  your SO as beneficiary on all of your retirement accounts at least.

Quite frankly I don’t understand your reasoning there. Your SO has less than great health so you want them to be destitute on paper should something medically go wrong so.... you don’t have to fork over any money to meet deductibles or coinsurance? With the ACA there are limits to yearly and lifetime out of pocket medical expenses so the days of being wiped out entirely due to a heart attack or brain cancer (which you also could get) should be more in the history books than not. I absolutely realize our system is less than perfect, but it still feels like a shitty position you are putting this person in.

Dee18

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Re: CASE Study: when are we ready for FIRE?
« Reply #10 on: January 16, 2020, 12:11:18 PM »
$ 3000/ year for landscaping with a teen in the house?

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #11 on: January 16, 2020, 01:35:30 PM »
You are getting good input from others on the finance side. When I first read your post I couldn’t see the finances because all I could see was how precarious a position your SO is in. He/she/they earn very little, have very few assets, and can not afford the life you are living together should you choose to up and leave. I’m not at all implying that you are the sort of person who would do that; clearly your relationship has some longevity if you are raising a teenager together. However if my entire foundation rested on the goodwill of the person sharing my bed, a person who could turn my life on its head and upend everything we had built together if he woke up one day and decided he wanted out, I’d have ulcers and high blood pressure and anxiety from the riskiness of the situation.

I hope you have named  your SO as beneficiary on all of your retirement accounts at least.

Quite frankly I don’t understand your reasoning there. Your SO has less than great health so you want them to be destitute on paper should something medically go wrong so.... you don’t have to fork over any money to meet deductibles or coinsurance? With the ACA there are limits to yearly and lifetime out of pocket medical expenses so the days of being wiped out entirely due to a heart attack or brain cancer (which you also could get) should be more in the history books than not. I absolutely realize our system is less than perfect, but it still feels like a shitty position you are putting this person in.
My SO discussed this over the years, and we agreed this would be the best setup for us.  My SO is listed as beneficiary on all of my financial accounts and vice versa.  The life insurance is only mine and the SO is 100% the beneficiary should something happen to me. 

The other small wrinkle is my SO is not the most responsible person when it comes to health, and recognizes that.  As a example, my SO suffers from potential sleep apnea, and I have asked many times over the last few months to go see a sleep specialist to get diagnosed so we can get a CPAP if needed (completely paid for by me, as usual for all medical expenses).  My SO has firmly but politely declined to do so because of the lack of belief that the sleep apnea could be so serious.  Even the primary physician has filled out referral forms for the sleep apnea study and my SO refuses to go.  My SO also refuses to exercise, citing tiredness after work.  So my SO comes home from work, often takes a nap, will ask for food (which I generally get), relaxes most of the evening, instead of taking advantage of some free time to go for a walk or go to the gym with me.  Generally much prefers relaxing at home than any motivation to do something physical and strenuous. 

I've recognized that is the core of who my SO and is nothing external can change that, so we agree to our mutual situation and let it be at that.  Obviously I would be delighted if my SO would take better charge of health and be as proactive as me, but that just isn't going to happen, despite the many years of financial and emotional support from me to lead a better, more active life.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #12 on: January 16, 2020, 01:37:55 PM »
$ 3000/ year for landscaping with a teen in the house?
That is a bucket for house maintenance reserve as well as the minimal landscaping costs.  I believe the guidance is to plan about 1% per year for maintenance, and this is a bit below that.  I think it is on target to cover a new roof in 25-30 years, new AC system in 15-20 years, and repainting the house every 10-15 years.

This has been an eye opening exercise and I appreciate the question.

I'm looking hard to see where else we could realistically cut expenses.   It seems like we make a ton of income relative to the average household, but expenditure wise I don't see many areas that are obscene except for food.   We spend about $38 per day on food for a family of 3, which I think is not out of line for relatively healthy food from our local healthy restaurants.

This makes it shockingly clear why most Americans are living paycheck to paycheck and don't have much saved. The expenses are probably similar to mine if not higher in a lot of cases.  We don't have any fancy material possessions, and we use cheaper devices like Chromebooks, 1-2 year old flagship phones bought on sale during Black Friday, have a fairly low cost pre-paid cellular plan, etc.  I am astounded that we still have such a high expense amount in spite of that.

I see so many people out there with shiny new iPhones, super expensive post-paid plans that cost $70 per line or more, lots of luxury cars like BMW's, Mercedes, Lexus, etc., that we have never splurged on.  We drive mundane non-luxury cars, eat at cheaper restaurants (entire meal is less than $35 if we eat out, except for sushi which can be double that once per week or every other week).  I'm thinking there must be a lot of people who make a lot more than me, or are in a lot more debt, because superficially we appear to be rather under-average in our spend except for the food (but again that doesn't feel extravagant because we go to cheaper fast casual places to eat).
« Last Edit: January 16, 2020, 02:32:44 PM by ReadyOrNot »

ysette9

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Re: CASE Study: when are we ready for FIRE?
« Reply #13 on: January 16, 2020, 01:47:21 PM »
That sounds like a frustrating position for you to be in but also that you are controlling what you can.

I’m curious whether you’ve looked at the trade offs of max out of pocket medical expenses if married versus tax savings for federal income taxes? With two very disparate salaries like you two have you would actually benefit financially from being hitched, unlike those of us who earn similar amounts as our spouses.

But I’ll let it drop. It clearly is a challenging situation.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #14 on: January 16, 2020, 02:12:20 PM »
That sounds like a frustrating position for you to be in but also that you are controlling what you can.

I’m curious whether you’ve looked at the trade offs of max out of pocket medical expenses if married versus tax savings for federal income taxes? With two very disparate salaries like you two have you would actually benefit financially from being hitched, unlike those of us who earn similar amounts as our spouses.

But I’ll let it drop. It clearly is a challenging situation.
Yes it has been a challenging situation, and my greatest fears are that we will retire early and something medically bad happen to my SO and I'll end up spending our early retirement taking 100% care of my SO's health.

Our medical plans have changed so much over the years it's been a challenge to understand it fully, to be honest.  My medical plan now has a significant spousal surchage if I were to cover my SO on my plan, so I ended up switching us on our own employer sponsored plans, with me fully covering my SO's medical premiums for the deluxe medical plan since it turned out to be cheaper than me covering everyone with the high spousal surcharge.

I appreciate the questions about this because it is such a significant issue, but I'm not sure there's a better way to arrange things given the wild swings in health costs & health insurance.  I'll definitely be keeping a close eye on this topic as we move towards FIRE and beyond.

GoCubsGo

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Re: CASE Study: when are we ready for FIRE?
« Reply #15 on: January 16, 2020, 02:36:15 PM »
A quick thought on your non-financial situation (coming from a random person on the internet so please don't take offense).  Your SO doesn't make a whole lot of money after taxes, commuting expenses, clothing costs etc.  You make a very solid income. Would they be willing to quit working and focus on their health (you mentioned they are too tired after work)? 

I fear that by the time your are 55, you are going to have a bunch of money to retire and nothing to do in retirement due to a disabled spouse.  It also sounds like some lifestyle changes could really make a difference in their health. Just focusing on their health and doing the shopping, cooking and ability to generally help out more at home is worth way more than $25k  (given you are basically paying most of the bills anyway).

Not sure if they would be offended by the question but it could change the trajectory of your relationship and your retirement.


ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #16 on: January 16, 2020, 02:44:52 PM »
A quick thought on your non-financial situation (coming from a random person on the internet so please don't take offense).  Your SO doesn't make a whole lot of money after taxes, commuting expenses, clothing costs etc.  You make a very solid income. Would they be willing to quit working and focus on their health (you mentioned they are too tired after work)? 

I fear that by the time your are 55, you are going to have a bunch of money to retire and nothing to do in retirement due to a disabled spouse.  It also sounds like some lifestyle changes could really make a difference in their health. Just focusing on their health and doing the shopping, cooking and ability to generally help out more at home is worth way more than $25k  (given you are basically paying most of the bills anyway).

Not sure if they would be offended by the question but it could change the trajectory of your relationship and your retirement.
This is a good and interesting question, so no offense at all.

When our child was born, my SO basically stayed at home for the first 10 years.  My SO attended online school to keep her partially busy while taking care of our child, and I happily covered all expenses.  My SO got really bored when our child started going to school full-time, as being at home was not really all that exciting.  Despite that, my SO preferred staying at home watching TV and doing socializing with other stay at home parents, rather than going to the gym or doing something active.  I paid for both our gym memberships and gym child care during this entire time but I recall my SO only went less than 10 times over the course of 5 years.

My SO found a supervisory role at a non-profit and loves the job.  It provides purpose, social interaction, and relatively low stress for the relative low pay as well.  I don't think my SO would prefer to go back to staying at home since it was relatively boring, although I have no problem with that at all, if my SO wanted to do that to work on health.  I think my SO really enjoys the status / respect with the supervisory role and will be loathe to leave that.

So in summary, she's happy, and I'm happy that she's happy, but also concerned for physical health but I can only do so much to encourage her to seek better care for herself.
« Last Edit: January 16, 2020, 02:47:33 PM by ReadyOrNot »

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #17 on: January 17, 2020, 11:20:52 AM »
One item I am pondering, is if I should eliminate the life insurance policy now.  I have a $1m term policy that is pretty well priced and has another 20 years to go.  When our NW was worth less than $500k and our child was much younger, it made a lot of sense.

Now we have well over $1m NW and child is not too far away from going to college and being an adult, that $1m life insurance is looking more like a luxury.  I was planning to kill the policy once we go FIRE, but I'm wondering if it might be more sensible to kill it now rather than keep paying for it until FIRE.


MrThatsDifferent

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Re: CASE Study: when are we ready for FIRE?
« Reply #18 on: January 17, 2020, 11:24:41 AM »
OP, sure cut the insurance if you want. Bigger question, do you have a will and an estate plan?

ysette9

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Re: CASE Study: when are we ready for FIRE?
« Reply #19 on: January 17, 2020, 11:33:57 AM »
How much would the insurance save versus other luxuries? Maybe it would make sense to look at all luxuries together and weigh cutting them versus the benefits you feel you get from them.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #20 on: January 17, 2020, 11:34:39 AM »
OP, sure cut the insurance if you want. Bigger question, do you have a will and an estate plan?
Yes I and my SO have a will, transfer on death deeds on house / autos, beneficiaries on all financial accounts.  We also have end of life / medical power of attorneys (very important since we are not married).  So I think we are pretty well covered from that regard.  Thanks for asking!
« Last Edit: January 17, 2020, 11:48:53 AM by ReadyOrNot »

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #21 on: January 17, 2020, 11:36:33 AM »
How much would the insurance save versus other luxuries? Maybe it would make sense to look at all luxuries together and weigh cutting them versus the benefits you feel you get from them.
Insurance is about $1k annually.  I don't mind paying for it as we are still saving 40% net paycheck but I think it is now a real luxury compared to other small luxuries we actually enjoy.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #22 on: January 17, 2020, 02:34:07 PM »
I'm hoping for more folks to chime in.  I'm pleasantly surprised by the relative lack of face punches. 

I think from an appearances level it seems we should be rolling in the dough and living high on the hog, but this exercise really helped me break down all the key expenses and analyze in more detail to see what it cut be reasonably trimmed to.

So in short of doing something extreme, it seems that it is really expensive to live in modern times. We live in a reasonable house in a low - MCOL area, and it still seems like a struggle to save more. I can't fathom how the average family making average family income of $63k can possibly save and get ahead in life without extreme measures.   Yet I see so many average workers with fancy phones, gadgets, cars, trucks, and other expensive toys that I can't comprehend it.

I have never had a current generation flagship phone, but I see iPhone X/s/R/max/blah blah blah everywhere I go, especially younger people who use them without screen protectors / cases and often with smashed screens for such expensive gadgets.  I have never broken a phone (knock on wood) even though they are not the most expensive, by using good cases / screen protectors with them, and I don't have fancy iPad Pro's or huge big screen TVs. 

We lived with a 10 year old 40" TV we bought from CostCo, until this last black Friday when I bought a 55" LCD TV for $200, our first splurge in years.  I saw masses of people buying 65", 75", 85" big screen TVs everywhere this holiday shopping season, loading up their big trucks to take home. We don't have any gaming consoles, but I see the popular PS4's, XBOX Ones, Nintendo Switches fly out the door at hundreds of dollar per pop, not to mention the monthly fees and games associated with them.  We simply don't splurge that much in contrast to all the consumerism I see around me. 

Folks around me must be loaded.  They must all be making $300k, $400k per year to afford all these extravagant toys!  We must be the impoverished ones only making $200k.

If anyone has any more thoughts on our expenses and FIRE path, I'd be glad to hear it.
« Last Edit: January 17, 2020, 02:45:48 PM by ReadyOrNot »

Freedomin5

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Re: CASE Study: when are we ready for FIRE?
« Reply #23 on: January 17, 2020, 02:56:37 PM »
You’ve already gotten good feedback from some of our heavy hitters — waltworks, RWD, ysette9. Sure, according to FIRE standards, your expenses are exorbitant, but you are also a high earner so people aren’t really going to face punch you too much, because you already live well below your income.

If you’re really serious about the whole FIRE concept - simplifying/optimizing life expenses, minimizing your carbon footprint, DIY-ing, etc. — there’s a lot more you can do. For example, we make quite a bit more than you and spend about $1500 a month in living expenses. But that required drastic changes to our lifestyle, which most people here on the forums are not interested in doing.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #24 on: January 17, 2020, 03:08:11 PM »
You’ve already gotten good feedback from some of our heavy hitters — waltworks, RWD, ysette9. Sure, according to FIRE standards, your expenses are exorbitant, but you are also a high earner so people aren’t really going to face punch you too much, because you already live well below your income.

If you’re really serious about the whole FIRE concept - simplifying/optimizing life expenses, minimizing your carbon footprint, DIY-ing, etc. — there’s a lot more you can do. For example, we make quite a bit more than you and spend about $1500 a month in living expenses. But that required drastic changes to our lifestyle, which most people here on the forums are not interested in doing.
Wow, can you share how you go about spending only $1500 per month?

I really wish I felt our expenses were exorbitant.  I look at what we have and we have nothing fancy, in reality.  We have far less materially than the fellow parents at our kid's school.  Most of them have boats, really nice vacations, kids have nicer cars than us, bigger houses, fancy toys, etc. 

I just can't reconcile the numbers of what we spend, what we have, and what we see, from people that I believe mostly make less money than we do.  We live in an decent middle-class neighborhood and a good public school system, but I feel we may be making a lot more than my peers based on the types of jobs I hear that they have - a lot of mundane, regular office type jobs that max out around $70k - $80k.  Even with dual incomes at $80k they are making less than me, and yet manage to have a lot more shiny toys and stuff that I could never imagine buying.

oswin

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Re: CASE Study: when are we ready for FIRE?
« Reply #25 on: January 17, 2020, 03:19:14 PM »
You’ve already gotten good feedback from some of our heavy hitters — waltworks, RWD, ysette9. Sure, according to FIRE standards, your expenses are exorbitant, but you are also a high earner so people aren’t really going to face punch you too much, because you already live well below your income.

If you’re really serious about the whole FIRE concept - simplifying/optimizing life expenses, minimizing your carbon footprint, DIY-ing, etc. — there’s a lot more you can do. For example, we make quite a bit more than you and spend about $1500 a month in living expenses. But that required drastic changes to our lifestyle, which most people here on the forums are not interested in doing.
Wow, can you share how you go about spending only $1500 per month?

I really wish I felt our expenses were exorbitant.  I look at what we have and we have nothing fancy, in reality.  We have far less materially than the fellow parents at our kid's school.  Most of them have boats, really nice vacations, kids have nicer cars than us, bigger houses, fancy toys, etc. 

I just can't reconcile the numbers of what we spend, what we have, and what we see, from people that I believe mostly make less money than we do.  We live in an decent middle-class neighborhood and a good public school system, but I feel we may be making a lot more than my peers based on the types of jobs I hear that they have - a lot of mundane, regular office type jobs that max out around $70k - $80k.  Even with dual incomes at $80k they are making less than me, and yet manage to have a lot more shiny toys and stuff that I could never imagine buying.

For some people, the answer is debt and not saving for retirement (or anything). It's really scary. But some of your expenses are quite extravagant - we spend $650/month on food for a family of 5 (oldest kid is 6, so no teenagers who do eat quite a bit more). We do this by rarely eating out. So the extra money you're spending on food, others might be spending on fancy phones, etc. Everyone makes different choices.

Freedomin5

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Re: CASE Study: when are we ready for FIRE?
« Reply #26 on: January 17, 2020, 03:22:51 PM »
You’ve already gotten good feedback from some of our heavy hitters — waltworks, RWD, ysette9. Sure, according to FIRE standards, your expenses are exorbitant, but you are also a high earner so people aren’t really going to face punch you too much, because you already live well below your income.

If you’re really serious about the whole FIRE concept - simplifying/optimizing life expenses, minimizing your carbon footprint, DIY-ing, etc. — there’s a lot more you can do. For example, we make quite a bit more than you and spend about $1500 a month in living expenses. But that required drastic changes to our lifestyle, which most people here on the forums are not interested in doing.
Wow, can you share how you go about spending only $1500 per month?

I really wish I felt our expenses were exorbitant.  I look at what we have and we have nothing fancy, in reality.  We have far less materially than the fellow parents at our kid's school.  Most of them have boats, really nice vacations, kids have nicer cars than us, bigger houses, fancy toys, etc. 

I just can't reconcile the numbers of what we spend, what we have, and what we see, from people that I believe mostly make less money than we do.  We live in an decent middle-class neighborhood and a good public school system, but I feel we may be making a lot more than my peers based on the types of jobs I hear that they have - a lot of mundane, regular office type jobs that max out around $70k - $80k.  Even with dual incomes at $80k they are making less than me, and yet manage to have a lot more shiny toys and stuff that I could never imagine buying.

That’s because you’re comparing yourself to the wrong folks. You have a house in a middle class neighborhood. That’s fancy (I’m assuming your house has more than 2 bedrooms.) You spend $1.5k a month on phones. That’s fancy. You have pets. You have a vehicle. You spend $14k a year on food. You also spend on travel, memberships, and clothing - a lot more than we spend.

I can share how we do it. Again, it’s drastic and most people would never do what we do, but then again, most people don’t save 80-90% of their take home income.

First, we use geographic arbitrage. We’ve moved to the other side of the world on expat packages. Cost of living is cheaper here. This allows us to househack. The company pays for our USD$5 million condo, tuition, travel airfare, and health insurance. Meanwhile, renters pay our mortgage at home.

We chose a home that was close to work and school, which gets rid of the need to have a car. We purchased bikes and push scooters. For longer distances, we use Uber or taxi. We try not to go long distances. The grocery store is across the street from our apartment. We buy produce that are in season and minimize purchase of exotic out of season fruits/veggies. We don’t eat much meat.

We have iPhones (which DH won at a raffle). If he hadn’t won it, I’d be using a basic smartphone. We are on the cheapest phone plan. No data plan. I go to Starbucks or a mall with free wifi.

Our clothing comes from the thrift store. We drive to wealthy neighborhoods and shop at thrift stores there. That we can get name brand, good quality, gently worn clothing for a fraction of the cost.  All our furniture is secondhand. Our expensive electronics - computer, camera, etc - are either provided by work or are secondhand.

So because we found ways to hack our major expenses, the $1500/month just involves food, a couple taxi rides, utilities, and phone and internet.

Because our savings is high, we purchased a cottage. It gets rented out when we are not using it, so it mostly covers its own costs.

When choosing a vacation spot, we sometimes choose Southeast Asia (Thailand, Cambodia) because flights are cheap from Asia where we live.

So basically, on the surface, we live in a $5 million home, fly and travel multiple times a year, spend summers at our lakefront cottage, own expensive gadgets, but really get these things for “free” or for very cheap. 
« Last Edit: January 17, 2020, 04:18:26 PM by Freedomin5 »

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #27 on: January 17, 2020, 03:27:41 PM »

That’s because you’re comparing yourself to the wrong folks. You have a house in a middle class neighborhood. That’s fancy. You spend $1.5k a month on phones. That’s fancy.
Small correction, that's $1.5k per year on phone lines for 4 people, or $125 per month, or $31.25 per line, which is quite cheap in my opinion for decent carrier with 20gb data and hotspot so I can work remotely as needed away from home. The data plan / phone service is in anticipation of the more extensive travel we hope to do post-FIRE and still have good connectivity whlie away from home.  Company currently reimburses $30 of that, monthly, for my line but I left it out because I wanted to be more conservative.

I actually have spent a fair amount of time researching the best / cheapest plans with the best coverage / data / hotspot and believe it's hard to do better than what I pay for service as good as ours.
« Last Edit: January 17, 2020, 03:32:53 PM by ReadyOrNot »

ysette9

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Re: CASE Study: when are we ready for FIRE?
« Reply #28 on: January 17, 2020, 04:58:55 PM »

I really wish I felt our expenses were exorbitant.  I look at what we have and we have nothing fancy, in reality.  We have far less materially than the fellow parents at our kid's school.  Most of them have boats, really nice vacations, kids have nicer cars than us, bigger houses, fancy toys, etc. 

I just can't reconcile the numbers of what we spend, what we have, and what we see, from people that I believe mostly make less money than we do.  We live in an decent middle-class neighborhood and a good public school system, but I feel we may be making a lot more than my peers based on the types of jobs I hear that they have - a lot of mundane, regular office type jobs that max out around $70k - $80k.  Even with dual incomes at $80k they are making less than me, and yet manage to have a lot more shiny toys and stuff that I could never imagine buying.

My husband has marveled and asked the same types of questions on many occasions. I think it comes down to the fact that we save money whereas other people must not have 40-70+% savings rates. It also has to do with willingness to buy those shiny toys.

We are in a similar spot that due to our ridiculous incomes we can both save a ton and still spend what is considered a lot around here. I sort of wish I had insight into what an average family in our area has for a budget and investments, just out of curiosity.

freya

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Re: CASE Study: when are we ready for FIRE?
« Reply #29 on: January 17, 2020, 08:49:48 PM »
For a low cost of living area, your spending across the board is on the high side - but not outrageously so, except for that grocery bill.  $1200/month for 3 people...eek.

Assuming you do need to fund the full $78K from savings, you're probably within 5-6 years of FIRE. Your investments at this point should be returning, on average, almost what you're saving every year.   This time frame is exactly what you proposed, so maybe that's a perfectly good plan.  You also are close enough to Social Security ages that you can consider it to be a backstop also.  I would only suggest that you get some practice between now and then at actually cutting your spending as envisioned, so that you can know and not just guess that you'll be able to do it.  One thing you can relax about:  the really expensive problems that could happen to your partner would most likely be complications of diabetes, which would make him/her eligible for Medicare and SSI.  Based on your posts it seems like your partner is halfway to being disabled now.

If I were you I would focus not so much on FIRE (for which you're practically on autopilot) as on correcting your partner's metabolic disease and perhaps other conditions you haven't mentioned.  Do your own research on this but I strongly urge you to look into low carbohydrate diets, i.e. eliminating sugar, grains, and starchy foods.  Get help, e.g. counseling, if it's needed.  The mismatch between your income and your partners, in and of itself, could be a source of serious stress.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #30 on: January 20, 2020, 03:02:38 PM »
For a low cost of living area, your spending across the board is on the high side - but not outrageously so, except for that grocery bill.  $1200/month for 3 people...eek.
I'm curious what a realistic budget is, incorporating time involved as well for cooking healthy delicious meals that are not monotonous, per month.

$1200 seems high, but it's $40 for 3 people per day, or less than $13.33 per person per day of eating out, which is not that much if you consider how pricey food can be.  And we're not talking junk food / fast food here either.

If anyone does the cooking, it would have to be me.  My SO hates shopping and cooking, only knows how to make pasta and mac & cheese, etc., simple unhealthy foods.  So I'd have to allocate hours per week for shopping, prepping, cooking meals, and then my SO and child would do the cleaning.  I make roughly $100 per hour, so if it takes me 8 hours per week to shop & cook, it would cost me roughly $800 per week, or $3,200 per month, plus the cost of the groceries - so maybe bump that to $4k per month of real cost to cook / eat at home.  So I feel that I am actually being economical with my time and hourly cost to outsource the shopping / prepping / cooking to the restaurants that we enjoy.

I just don't have the time while working full time to allocate to the proper amount of shopping, prepping, and cooking (& learning to cook) right now.  After we FIRE I will love to spend my idle time shopping, prepping, cooking delicious food that we enjoy.  I'm really curious what grocery bills will be even if we value my hourly labor at $0.
 
Quote
Assuming you do need to fund the full $78K from savings, you're probably within 5-6 years of FIRE. Your investments at this point should be returning, on average, almost what you're saving every year.   This time frame is exactly what you proposed, so maybe that's a perfectly good plan.  You also are close enough to Social Security ages that you can consider it to be a backstop also.  I would only suggest that you get some practice between now and then at actually cutting your spending as envisioned, so that you can know and not just guess that you'll be able to do it.  One thing you can relax about:  the really expensive problems that could happen to your partner would most likely be complications of diabetes, which would make him/her eligible for Medicare and SSI.  Based on your posts it seems like your partner is halfway to being disabled now.

If I were you I would focus not so much on FIRE (for which you're practically on autopilot) as on correcting your partner's metabolic disease and perhaps other conditions you haven't mentioned.  Do your own research on this but I strongly urge you to look into low carbohydrate diets, i.e. eliminating sugar, grains, and starchy foods.  Get help, e.g. counseling, if it's needed.  The mismatch between your income and your partners, in and of itself, could be a source of serious stress.
I've been hooked on health & finance for my entire life.  I've tried low carb diets, and do intermittent fasting regularly (in fact I get so busy at work that most days I don't eat until 5pm, and finish eating for the day at 10pm.  I love veggies, fruits, fresh foods.  My SO and child unfortunately love carbs.  They were raised to love pasta, pizza, burgers, etc.  I have had a good influence on them, but I cannot change their fundamental mindset on diet / food because they just refuse to eat as healthy as I do.  It's a quandary many people have, I'm sure, as evidenced by the growing obesity in America. Whoever can resolve this dilemma will be the richest person in history.
« Last Edit: January 20, 2020, 03:05:10 PM by ReadyOrNot »

RWD

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Re: CASE Study: when are we ready for FIRE?
« Reply #31 on: January 20, 2020, 03:13:31 PM »
I make roughly $100 per hour, so if it takes me 8 hours per week to shop & cook, it would cost me roughly $800 per week, or $3,200 per month, plus the cost of the groceries - so maybe bump that to $4k per month of real cost to cook / eat at home.  So I feel that I am actually being economical with my time and hourly cost to outsource the shopping / prepping / cooking to the restaurants that we enjoy.
How much time does it take to choose restaurants, transport yourselves there, wait for the waiter to take your order, wait for your food, wait for the check when you're done eating, and drive yourselves home per week?

freya

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Re: CASE Study: when are we ready for FIRE?
« Reply #32 on: January 20, 2020, 03:45:00 PM »
For a low cost of living area, your spending across the board is on the high side - but not outrageously so, except for that grocery bill.  $1200/month for 3 people...eek.
I'm curious what a realistic budget is, incorporating time involved as well for cooking healthy delicious meals that are not monotonous, per month.

$1200 seems high, but it's $40 for 3 people per day, or less than $13.33 per person per day of eating out, which is not that much if you consider how pricey food can be.  And we're not talking junk food / fast food here either.

It is a problem if your SO doesn't like to cook.  It sounds like they like comfort foods though - which can be economical AND low carb AND easy to cook!  All at the same time, I promise!   I hear you on the time thing...I have no time to cook during the week either.

The secret is to make big pots of whatever on the weekends for intentional leftovers.  Right now I'm making a pot of Beef Ragu.  You throw together the ingredients into a Dutch oven, and let it bubble away on the stovetop while you lounge with your laptop or in front of the TV (like I'm doing right now).  The main part of the work is chopping the onions, carrots and celery, but if you get one of those Cuisinart mini food processors you can semi-automate that.   You can serve it over pasta, but being low carb I just eat it as is topped with ricotta cheese, parmesan, and mozzarella.  YUM.   Cost was, let's see:  2.5 lbs beef at $6/lb, a can of tomatoes (let's say $4), maybe $5 for the vegetables and spices. total $24 and it will feed your family for a good 2 dinners (probably with some leftovers for lunch).   Better yet, double the recipe and freeze half.

There are lots of recipes like that.  Meat loaf, cheeseburger casserole, butter chicken.  Make one of these every weekend and teach your family how to make them too.  Hopefully they'll like these and start getting a little more adventurous with food.

Also, waiting for someone to say the word "Costco".  They sell lots of pre-packaged foods that you can pop in to the oven and voila, dinner, for a lot less than $40/day.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #33 on: January 20, 2020, 04:07:29 PM »
I make roughly $100 per hour, so if it takes me 8 hours per week to shop & cook, it would cost me roughly $800 per week, or $3,200 per month, plus the cost of the groceries - so maybe bump that to $4k per month of real cost to cook / eat at home.  So I feel that I am actually being economical with my time and hourly cost to outsource the shopping / prepping / cooking to the restaurants that we enjoy.
How much time does it take to choose restaurants, transport yourselves there, wait for the waiter to take your order, wait for your food, wait for the check when you're done eating, and drive yourselves home per week?
Actually not much at all.  Since I work from home more and more, I usually never even get out of the house unless it's to run errands / eat.  So it's mentally healthy for me to get out of work, change my environment, go somewhere with family / friends, socialize, decompress, and eat something nutritious. 

I usually group all of my errands together.  For instance today I went to the cleaners to drop off some dry cleaning (I spend about $10 per month on this), stop by the store to pick up some household items, and then on the way back stop by a fast casual place to eat.

All of my errands / restaurants are within a 5 mile radius, one of the perks of living in a master planned community with plenty of amenities in a close radius.  So I really don't waste that much time doing this.  Besides, I'm in front of the screen too much as is, so anytime I can get away and be with people in a social environment is really nice.

ysette9

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Re: CASE Study: when are we ready for FIRE?
« Reply #34 on: January 20, 2020, 04:08:37 PM »
If they love carbs then switch to whole grain at least. That way they can have what they like but it isn’t nearly as bad for you.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #35 on: January 20, 2020, 04:09:39 PM »
For a low cost of living area, your spending across the board is on the high side - but not outrageously so, except for that grocery bill.  $1200/month for 3 people...eek.
I'm curious what a realistic budget is, incorporating time involved as well for cooking healthy delicious meals that are not monotonous, per month.

$1200 seems high, but it's $40 for 3 people per day, or less than $13.33 per person per day of eating out, which is not that much if you consider how pricey food can be.  And we're not talking junk food / fast food here either.

It is a problem if your SO doesn't like to cook.  It sounds like they like comfort foods though - which can be economical AND low carb AND easy to cook!  All at the same time, I promise!   I hear you on the time thing...I have no time to cook during the week either.

The secret is to make big pots of whatever on the weekends for intentional leftovers.  Right now I'm making a pot of Beef Ragu.  You throw together the ingredients into a Dutch oven, and let it bubble away on the stovetop while you lounge with your laptop or in front of the TV (like I'm doing right now).  The main part of the work is chopping the onions, carrots and celery, but if you get one of those Cuisinart mini food processors you can semi-automate that.   You can serve it over pasta, but being low carb I just eat it as is topped with ricotta cheese, parmesan, and mozzarella.  YUM.   Cost was, let's see:  2.5 lbs beef at $6/lb, a can of tomatoes (let's say $4), maybe $5 for the vegetables and spices. total $24 and it will feed your family for a good 2 dinners (probably with some leftovers for lunch).   Better yet, double the recipe and freeze half.

There are lots of recipes like that.  Meat loaf, cheeseburger casserole, butter chicken.  Make one of these every weekend and teach your family how to make them too.  Hopefully they'll like these and start getting a little more adventurous with food.

Also, waiting for someone to say the word "Costco".  They sell lots of pre-packaged foods that you can pop in to the oven and voila, dinner, for a lot less than $40/day.
Actually CostCo has been my downfall for a while.  I used to go in just to buy toilet paper and rotissere chicken, and come out with $300 in stuff I never knew I needed!  I have bought a lot of packaged food from CostCo but over the years I've gotten a little tired of them. 

Once I do FIRE I'll enjoy the slow shopping / prep / cooking experience as it really should be.  It shouldn't be a chore, it should be fun and enjoyable.

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #36 on: January 20, 2020, 04:12:28 PM »
If they love carbs then switch to whole grain at least. That way they can have what they like but it isn’t nearly as bad for you.
Yup, we only buy whole grain, and I try to read all ingredients when grocery shopping, and try to learn about all the nutritional research.  I think because of this, my SO and child are not as unhealthy as they could be...but if they would internalize it life would be wonderful.

I listen to a lot of healthy food podcasts when I am working.  I share them with my SO and child but you can guess how many they have listened too.... more than zero would be wonderful. :)

eyesonthehorizon

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Re: CASE Study: when are we ready for FIRE?
« Reply #37 on: January 25, 2020, 06:21:04 PM »
I really wish I felt our expenses were exorbitant.  I look at what we have and we have nothing fancy, in reality.  We have far less materially than the fellow parents at our kid's school.  Most of them have boats, really nice vacations, kids have nicer cars than us, bigger houses, fancy toys, etc. 
(emphasis mine)

The thing I keep seeing in your posts is that big-ticket items - the video game systems and the big TVs in your other comment - dominate your idea of consumption, yet your habitual spending is death by a thousand cuts. Occasional big-ticket items don't break a budget; passively, habitually consuming more than you even get joy from will. That, if anything, sounds like the problem. To eliminate it would put your FI date much closer, or even behind you.

You have so much routine consumption that my hunch is you can't possibly be using it all - as a small but low-hanging example, if you say you both work full-time, how are you able to make use of four media subscriptions? Imagine cutting down to just one subscription at a time and rotating them - an extra $30/mo = $360 a year. I can't tell if you're describing those fancy big-ticket items with envy or just puzzlement, but an extra few hundred from several line items is several thousand, every year, and would buy a lot of fancy things you could enjoy for a long time - or, you could just stash the cash and put it to work. Look for what is actually actively making you happy, and cut the rest - you can always add back, but once you sign up for a monthly expense it becomes hard to see, which is the problem you describe at the start of the quote. You're spending lavishly, but not getting value back.

The elephant is undoubtedly food. You cite the idea of eating sushi at a ticket of $70ish every other week. That's only $1.8k, and while costly, not really a problem, as it's clear it's a priority for you (this is good self-knowledge). The issue with a $14k food spend is it's mostly not paying for food - it's paying for the staff to wait on you and the swanky environment to eat in - so it's not that the cost of food is high, it's that you're consuming service & real estate without noticing.

I understand wanting both a very nice house and a lot of time out of it. But the time out of it could be gotten free a dozen ways that don't involve dining out, and in what you describe as an LCOLA you could produce great food at home for 1/3-1/2 of your $1200/mo estimate. Picture gorgeous pizzas & burgers the SO & kid would like but also veggie bowls & roasted greens - throwing something under the broiler is not effortful but delicious & cheap. I'd be inclined to say you'd benefit from investing in a cooking class, as learning the tricks/ techniques early on makes the process much more fun & less frustrating. (It is almost certainly true that even at healthier restaurants your family is not eating as healthfully as they would at home.) Then, when you did go out, it'd feel special; better not to blur that expense into everyday life.

Re: average income people with nice stuff... excluding rent (for COL reasons), $1100/mo covers a very fancy life for my SO & myself combined, including the latest gaming consoles and imported luxury food/alcohol without a blink - because those are select areas we know will return happiness on the expense. We have chosen to avoid recurring expenses whenever possible, and for that reason are very flexible.

Laura33

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Re: CASE Study: when are we ready for FIRE?
« Reply #38 on: January 27, 2020, 09:09:37 AM »
For a low cost of living area, your spending across the board is on the high side - but not outrageously so, except for that grocery bill.  $1200/month for 3 people...eek.
I'm curious what a realistic budget is, incorporating time involved as well for cooking healthy delicious meals that are not monotonous, per month.

$1200 seems high, but it's $40 for 3 people per day, or less than $13.33 per person per day of eating out, which is not that much if you consider how pricey food can be.  And we're not talking junk food / fast food here either.

If anyone does the cooking, it would have to be me.  My SO hates shopping and cooking, only knows how to make pasta and mac & cheese, etc., simple unhealthy foods.  So I'd have to allocate hours per week for shopping, prepping, cooking meals, and then my SO and child would do the cleaning.  I make roughly $100 per hour, so if it takes me 8 hours per week to shop & cook, it would cost me roughly $800 per week, or $3,200 per month, plus the cost of the groceries - so maybe bump that to $4k per month of real cost to cook / eat at home.  So I feel that I am actually being economical with my time and hourly cost to outsource the shopping / prepping / cooking to the restaurants that we enjoy.

I just don't have the time while working full time to allocate to the proper amount of shopping, prepping, and cooking (& learning to cook) right now.  After we FIRE I will love to spend my idle time shopping, prepping, cooking delicious food that we enjoy.  I'm really curious what grocery bills will be even if we value my hourly labor at $0.

First, the math there is rationalization, pure and simple -- I can tell you that with 100% certainty, because I used to rationalize a ton of frivolous spending the same way.  The reality is that grocery shopping and cooking only "costs" you $800/wk if you take time away from your paying job to do it.  Most of us don't do that -- we take time away from our free time to do it.  We just don't want to -- we have structured our lives so we have very little free time, and we damn sure don't want to spend it standing over the stove, so we do funny math to show how much we're "saving" by eating out.  But if you're going to insist on the silly math, at the very least, you do have to count the eating out time the same as the groceries/cooking time; after all, that's time you could be working, right?  You'd just rather spend it at the restaurant than at the stove. 

If you don't want to devote some of your free weekend/evening time to grocery shopping and cooking, that's your choice.  But recognize that that is your choice, and not something that you are doing because it is the most financially beneficial.  You could easily cut $300 off your food bill just by planning meals and shopping/cooking on the weekend.  I know because I've done it.  And, yes, I also have a more-than-full-time job and two kids.

Second:  the big issue here is your partner's health.  Eating out is the worst.  At least at home, you can control the ingredients and portion sizes -- and you can try to make things delicious without all of the extra crap that restaurants throw in (after all, fat, salt, and sugar carry flavor).  Your partner's health is infinitely more important than saving a couple hundred bucks a month. 

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #39 on: January 27, 2020, 11:57:21 AM »
I really wish I felt our expenses were exorbitant.  I look at what we have and we have nothing fancy, in reality.  We have far less materially than the fellow parents at our kid's school.  Most of them have boats, really nice vacations, kids have nicer cars than us, bigger houses, fancy toys, etc. 
(emphasis mine)

The thing I keep seeing in your posts is that big-ticket items - the video game systems and the big TVs in your other comment - dominate your idea of consumption, yet your habitual spending is death by a thousand cuts. Occasional big-ticket items don't break a budget; passively, habitually consuming more than you even get joy from will. That, if anything, sounds like the problem. To eliminate it would put your FI date much closer, or even behind you.

You have so much routine consumption that my hunch is you can't possibly be using it all - as a small but low-hanging example, if you say you both work full-time, how are you able to make use of four media subscriptions? Imagine cutting down to just one subscription at a time and rotating them - an extra $30/mo = $360 a year. I can't tell if you're describing those fancy big-ticket items with envy or just puzzlement, but an extra few hundred from several line items is several thousand, every year, and would buy a lot of fancy things you could enjoy for a long time - or, you could just stash the cash and put it to work. Look for what is actually actively making you happy, and cut the rest - you can always add back, but once you sign up for a monthly expense it becomes hard to see, which is the problem you describe at the start of the quote. You're spending lavishly, but not getting value back.
I actually share my subscriptions with my siblings.  I put it all in there because I want the worst case in case we stopped sharing subscriptions (but honestly I'd probably kill the subscriptions in that case than pay for it alone). The only streaming subscription I actively pay for is Disney Plus, which I got a 3 year special deal for $150 (due to special deal before it went live), and will kill it after that. 

Quote
The elephant is undoubtedly food. You cite the idea of eating sushi at a ticket of $70ish every other week. That's only $1.8k, and while costly, not really a problem, as it's clear it's a priority for you (this is good self-knowledge). The issue with a $14k food spend is it's mostly not paying for food - it's paying for the staff to wait on you and the swanky environment to eat in - so it's not that the cost of food is high, it's that you're consuming service & real estate without noticing.
I actually rarely eat at swanky restaurants, except at the sushi restaurants.  Most are fast casual places where we order at a cash register and then get the food to take to a table.  We rarely eat at a place that has full service.  Most of the money is going into the food and the food prep, rather than wait staff for service.  In addition, we have a lot of spoilage when I tried to grocery shop and make food at home.  I don't have a good estimate on the amounts of food to buy, and I tend to buy fresher ingredients rather than processed food, and it's hard to use it all efficiently.  So until I can devote more time to studying how to shop, cook a decent variety of food, and eat it efficiently, I found we have wasted too much time and food cooking at home.  This will change post-FIRE since it will be a main task to perform with no regular work to be concerned with.

Quote
I understand wanting both a very nice house and a lot of time out of it. But the time out of it could be gotten free a dozen ways that don't involve dining out, and in what you describe as an LCOLA you could produce great food at home for 1/3-1/2 of your $1200/mo estimate. Picture gorgeous pizzas & burgers the SO & kid would like but also veggie bowls & roasted greens - throwing something under the broiler is not effortful but delicious & cheap. I'd be inclined to say you'd benefit from investing in a cooking class, as learning the tricks/ techniques early on makes the process much more fun & less frustrating. (It is almost certainly true that even at healthier restaurants your family is not eating as healthfully as they would at home.) Then, when you did go out, it'd feel special; better not to blur that expense into everyday life.
Yes, I do want to take cooking lessons and experiment with better cooking / food after FIRE.

Quote
Re: average income people with nice stuff... excluding rent (for COL reasons), $1100/mo covers a very fancy life for my SO & myself combined, including the latest gaming consoles and imported luxury food/alcohol without a blink - because those are select areas we know will return happiness on the expense. We have chosen to avoid recurring expenses whenever possible, and for that reason are very flexible.
Amen.  I try to avoid recurring expenses as well, within reason.  One controllable expense is cutting hair. My partner cuts all of our hairs so we don't pay for expensive hair cutting over the last 10 years and have saved thousands due to that.
« Last Edit: January 27, 2020, 12:50:14 PM by ReadyOrNot »

ReadyOrNot

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Re: CASE Study: when are we ready for FIRE?
« Reply #40 on: January 27, 2020, 12:02:53 PM »
First, the math there is rationalization, pure and simple -- I can tell you that with 100% certainty, because I used to rationalize a ton of frivolous spending the same way.  The reality is that grocery shopping and cooking only "costs" you $800/wk if you take time away from your paying job to do it.  Most of us don't do that -- we take time away from our free time to do it.  We just don't want to -- we have structured our lives so we have very little free time, and we damn sure don't want to spend it standing over the stove, so we do funny math to show how much we're "saving" by eating out.  But if you're going to insist on the silly math, at the very least, you do have to count the eating out time the same as the groceries/cooking time; after all, that's time you could be working, right?  You'd just rather spend it at the restaurant than at the stove. 

If you don't want to devote some of your free weekend/evening time to grocery shopping and cooking, that's your choice.  But recognize that that is your choice, and not something that you are doing because it is the most financially beneficial.  You could easily cut $300 off your food bill just by planning meals and shopping/cooking on the weekend.  I know because I've done it.  And, yes, I also have a more-than-full-time job and two kids.

Second:  the big issue here is your partner's health.  Eating out is the worst.  At least at home, you can control the ingredients and portion sizes -- and you can try to make things delicious without all of the extra crap that restaurants throw in (after all, fat, salt, and sugar carry flavor).  Your partner's health is infinitely more important than saving a couple hundred bucks a month.
Good points.  We eat at pretty healthy places with a lot of salad, and zero dressing (I always say no dressing, or have it on the side so I never use it).  My partner dislikes eating healthy foods whether it's prepped at home or out.  I'll make a nice steak salad and she'll touch none of it.  I'll order a healthy salad wrap and she'll touch none of it.  It makes no difference sadly, where it's prepared.  We at least try to take a meal, eat half of it, take the rest home and eat it for another meal.  That's how we are able to live on $13 per day per person, as opposed to $30 per person per day (breakfast, lunch, dinner at $10 each).

I would advocate that the time eating out doesn't overlap with grocery shopping / cooking time much, since we still need time to actually sit down and eat at home, even after grocery shopping / cooking, and we still have dishes to clean at home.

When we do eat out, we order it in advance via calling in, an app, or quickly at a cash register and then taking it to eat at a table or at home.  And we always bundle it with other errands nearby, so we honestly don't spend that much extra time eating out compared to eating at home.

The good thing here is I think we have room to cut back post-FIRE, and I intend to fine tune this area a ton over the future.  I think we've managed it to a pretty lean level for now, but it's good to have room to cut more in the future.
« Last Edit: January 27, 2020, 12:51:51 PM by ReadyOrNot »

freya

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Re: CASE Study: when are we ready for FIRE?
« Reply #41 on: January 29, 2020, 08:25:27 AM »
It's a matter of rethinking not only your priorities, but your social programming.  We've all been trained for decades (or from birth, if you're young enough) to value consumption, activity for the sake of being active, and long work hours.  Spending time at home and cooking your own food has been stigmatized.  This has even extended to kids:  when I was growing up, we played in the streets with neighbors, with no adult supervision.  Now, everything a child does has to be planned and supervised - they now have scheduled "play dates" and formal activities to fill their time.  I think this is not at all a good thing.

Are you in fact happier eating out all the time and using your home effectively as an overnight pit stop?  Or do you just think that's how you're supposed to live?  I knew early on that while I value friends, activities etc, I also really, really like being a "homebody".  And I felt guilty about it for years.  One of the great things about FIRE and frugality is that it implies that you need to center your existence on being at home - essentially, the way of life that humans have had for hundreds of thousands of years, and that only changed a few decades ago when "consumerism" started to dominate.  Now, I could care less what society thinks.  I happily cook at home for 99% of my meals, and in the past year I've been learning to really love "staycations" too.  I travel so much for work that I just can't wrap my head around the idea of traveling for fun.

You could still stay on the frugal path while continuing to limit home time to overnight pit stop territory, by getting a place that serves basically that purpose and no more.  i.e. a studio apartment with a bed, a closet, and a postage stamp sized kitchen.  Then it might make sense to eat out all the time.  I have a friend who truly enjoys eating every meal out and going to jazz clubs every night, and that's exactly what he did.  He's married now to a like-minded individual and they're living happily in that tiny studio - because they pretty much only go there to sleep.

wonkette

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Re: CASE Study: when are we ready for FIRE?
« Reply #42 on: January 29, 2020, 11:51:41 AM »
You seem resistant to focusing on the "little" things like grocery expenses - what about focusing on your biggest expense? A 2600 square foot house with a pool is a luxury for three people, especially if you plan to travel in retirement. If you could lower the first five expenses you list you could probably be close to FIRE. And what about the $40k in vehicle assets? Maybe there is some fat to trim there.

For a high-earning individual like yourself you probably have the luxury of focusing on smaller but more frequent variable expenses (eating out, groceries, travel) OR larger more fixed expenses (housing, transportation). If you're able to do both you could probably FIRE now. If you're willing to do neither you will not change your trajectory.

Runrooster

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Re: CASE Study: when are we ready for FIRE?
« Reply #43 on: January 29, 2020, 07:24:01 PM »
Are you in fact happier eating out all the time and using your home effectively as an overnight pit stop?

OP works from home most of the time, so he likes getting out of the house for dinner.

freya

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Re: CASE Study: when are we ready for FIRE?
« Reply #44 on: January 31, 2020, 07:14:12 AM »
Are you in fact happier eating out all the time and using your home effectively as an overnight pit stop?

OP works from home most of the time, so he likes getting out of the house for dinner.

Oh, missed that.  However - now I'm really mystified.  Working from home is manna from heaven as far as being able to easily cook.  You can make something in little bits of time during breaks from your computer, and since your commute time is zero you don't have to worry about getting home at 7:30 pm and needing to get something on the table pronto.   I'd probably do a slow cooked something or other during work from home days, and save leftovers for office days.

As for getting out of the house...what about going for a walk instead?  Or, meet friends for happy hour, and get a drink and whatever snack is on special?  Serves the same purpose but it's much less costly.

I also agree wholeheartedly with the idea that cooking at home is far healthier.  Restaurant meals are mostly going to be laden with things like trans fats, sugar, industrial oils, factory farmed meats, MSG, non-organic (pesticide-laden) veggies, and all those things I personally like to avoid.  Plus, the people I know who eat out a lot regularly get sick, MUCH more often than I do.  Not only might you get food poisoning, but you'll get whatever bugs the food preparers happen to be carrying.

Hirondelle

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Re: CASE Study: when are we ready for FIRE?
« Reply #45 on: January 31, 2020, 09:24:34 AM »
You seem resistant to focusing on the "little" things like grocery expenses - what about focusing on your biggest expense? A 2600 square foot house with a pool is a luxury for three people, especially if you plan to travel in retirement. If you could lower the first five expenses you list you could probably be close to FIRE. And what about the $40k in vehicle assets? Maybe there is some fat to trim there.

For a high-earning individual like yourself you probably have the luxury of focusing on smaller but more frequent variable expenses (eating out, groceries, travel) OR larger more fixed expenses (housing, transportation). If you're able to do both you could probably FIRE now. If you're willing to do neither you will not change your trajectory.

This is what I was thinking as well. OP says he doesn't have 'nice things' yet he has a 480k massive house in a LCOL with 2600 sqft for only 3 people (what's even in a house that big for so few people??) with a PRIVATE POOL. If that isn't the biggest luxury of luxuries (+ high recurring costs) I don't know what else can be.

formerlydivorcedmom

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Re: CASE Study: when are we ready for FIRE?
« Reply #46 on: February 03, 2020, 09:30:07 AM »
Food spending is my nemesis as well.  I have 3 kids with lots of activities, I work at home and want to get out of the house, and my H works full time too.  It's sooo easy to go pick up dinner, or take myself out to lunch.

I'm trying to do better.  To make it work, I have to plan meals, and I have to prep produce the day I grocery shop.  Otherwise we have lots of waste.  I cook 2-3 days a week.   Last night, I made tacos, PLUS I roasted a bunch of cauliflower and made parmesan green beans for later this week.  The veggies won't go bad now, and I have a quick and easy side dish for other meals.  With the 3 meals I have planned to cook this week, there ought to be enough food for 5 dinners.  One night is "scrounge for yourself day", which often includes cereal or sandwiches, and one night will either be eating out or frozen pizzas.

Some weeks when I'm particularly busy, I cook 2 days and put my H in charge of one night.  That night might be fish sticks or something really unhealthy, but he took ownership, the kids like it, and everyone ends up fed.

My goal this year is to cut my food budget by about 20%.  I am hoping that I am creating new habits for myself so that it won't be so hard within a few months.

a-scho

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Re: CASE Study: when are we ready for FIRE?
« Reply #47 on: February 04, 2020, 10:57:28 PM »
The 16 year old is old enough to get involved in the shopping and cooking process. Let them know how much is currently being spent on food, which is about 1166.00 every month. If 166.00 is earmarked for sushi every month, then there's 1000.00 left for groceries. Offer the 16 year old the opportunity to do the grocery shopping and meal making. If they only spend 400.00, the remaining 600.00 would be split between you and them. So, they could be making 300.00 per month, you aren't doing the shopping or the cooking, and you save some money. Plus your child gets practice at cooking, budgeting, and finding meals that are inexpensive.


fuzzy math

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Re: CASE Study: when are we ready for FIRE?
« Reply #48 on: February 05, 2020, 04:52:26 PM »
I'm hoping for more folks to chime in.  I'm pleasantly surprised by the relative lack of face punches. 
So in short of doing something extreme, it seems that it is really expensive to live in modern times. We live in a reasonable house in a low - MCOL area, and it still seems like a struggle to save more. I can't fathom how the average family making average family income of $63k can possibly save and get ahead in life without extreme measures.   Yet I see so many average workers with fancy phones, gadgets, cars, trucks, and other expensive toys that I can't comprehend it.

I have never had a current generation flagship phone, but I see iPhone X/s/R/max/blah blah blah everywhere I go, especially younger people who use them without screen protectors / cases and often with smashed screens for such expensive gadgets.  I have never broken a phone (knock on wood) even though they are not the most expensive, by using good cases / screen protectors with them, and I don't have fancy iPad Pro's or huge big screen TVs. 

We lived with a 10 year old 40" TV we bought from CostCo, until this last black Friday when I bought a 55" LCD TV for $200, our first splurge in years.  I saw masses of people buying 65", 75", 85" big screen TVs everywhere this holiday shopping season, loading up their big trucks to take home. We don't have any gaming consoles, but I see the popular PS4's, XBOX Ones, Nintendo Switches fly out the door at hundreds of dollar per pop, not to mention the monthly fees and games associated with them.  We simply don't splurge that much in contrast to all the consumerism I see around me. 

Folks around me must be loaded.  They must all be making $300k, $400k per year to afford all these extravagant toys!  We must be the impoverished ones only making $200k.

If anyone has any more thoughts on our expenses and FIRE path, I'd be glad to hear it.

For the $3.5k in sushi you eat you could have bought 9 switches, Xbox ones etc. Or 4 iPhone X, 65" TVs each and every year. The only difference is people publicly load those items into their trucks at Costco where you can see it and you privately unload yours into the toilet the next day. A lot of people do not have fancy dining habits like yours.

Also we have 25MB internet because it's half the price of 100MB internet here and my spouse has no issue telecommuting even when the kids are streaming TV.

Captain FIRE

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Re: CASE Study: when are we ready for FIRE?
« Reply #49 on: February 07, 2020, 07:15:32 AM »
First, it seems to me that you think you only have the option of going from 0 to 100% for eating at home.  Either you eat out all the time or you need to spend time researching good recipes, planning how to not waste any of the food, shopping, cooking, etc. which will take you untold hours.*  That's a false choice.  You just need to start somewhere, and it can be small.  Plan to cook just one new meal a week.  If you like it, repeat it (possibly a few times) so you can see how much time it really takes to make (first few times it'll take you longer), and then put it into a 2-3 week rotation.  And pick easy meals!  You already like salads - great!  Chop up some ingredients on Sunday to have on hand to throw together easy salads on Monday/Tuesday.  Over time, you can try to incorporate easy time saving hacks such as tossing some extra plain chicken on the grill for salads while you're already grilling that night's teriyaki chicken.  As MMM hammers away at, frugality is a muscle.  By cooking meals, you'll learn how to be more efficient, so while it'll take you more time in the beginning, it won't always take that amount of time.  And I like a-scho's suggestion to involve your daughter in the cooking process (with or without the cash bonus).  Make it a family activity so it's enjoyable, and you'll also help her gain useful skills in the future.

*I agree with other posters you are deliberately exaggerating the time it will take, and not accurately comparing it to the time you spend going out, even for fast casual food.

Second, I echo other posters that even for healthy seeming dishes, restaurants are often less healthy than cooking at home.  It was quite eye opening to watch cooking reality shows and realize just how much butter is on that steak for example.

Finally, I just want to gently note that as an outside reading your post, I am seeing a lot of resentment or frustration with your SO for what you perceive as her lack of healthy eating and exercising.  You can't control her choices.  I wonder if you blame her for some of the health issues due to these choices.  It seems to me that if this is a high priority for you, a better way of eliciting change is to listen to her about what (if any) lifestyle changes might work for her rather than imposing your ideas on her.  Ok, she doesn't want to eat salads, fine.  She doesn't need to eat how you think is the healthiest or "best" way.  Look up recipes to make comfort food healthier (try www.skinnytaste.com, I find some tasty recipes there).  If she doesn't want to exercise, will she go for a nice romantic walk with you instead?  That solves two problems - your desire to get out of the house occasionally with a scenery break, and her getting some exercise.  A sustainable approach is better than the most calorie burning one that she won't enjoy.(A lot of people don't like the gym.  I consider myself a fairly healthy person and I hate going to the gym - but have no problem doing activities like soccer, skiing, or walking.)

On a separate note, I'm really worried for your SO's financial security.  She took 10 years off to raise your child, which will have substantially impacted her finances.  She's 10 years behind on experience, raises, paying into social security, etc. - and she can't even collect on your social security as you are not married.  I'm less worried about you dying, as you seem to have the necessary legal paperwork done to take care of her.  I'm more concerned that you could walk away at any point and she would have no recourse.  No one thinks they'll leave a relationship until they do.  She's sacrificed a lot over the years, but you hold all of the cards.