Author Topic: FIRE in 6 years?  (Read 1447 times)

plostyle31

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FIRE in 6 years?
« on: October 30, 2018, 06:02:44 PM »
Hey everyone. Recently married in April of this year. Our goal is to be independent in 6 years.

Only debt: $540k on a home worth $680k
Income:
2017- $160k
2018- $165-175k
2019(pro.)- $250k

IRAs, 401ks- $164k
Mutual Funds (non retirement)- $49k
Funded emergency fund
$25k worth of cars

After that we plan on the wife being a stay at home mother and our household income should dip to about $175k.

We want 2-3 kids (have none currently).

Wife my wife quitting in about two years, would I be able to do the same in 6? I'm willing to sell my house and move to a cheaper area (we live in the SF bay area).

Our dream is to have four tiny properties in the americas and rent out whichever ones were not in.

Any advice or input would be appreciated! Thanks for reading.
« Last Edit: October 30, 2018, 06:05:58 PM by plostyle31 »

Gronnie

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Re: FIRE in 6 years?
« Reply #1 on: October 30, 2018, 06:08:07 PM »
What assets do you have? 401k, IRAs, mutual funds, savings, etc?

How much do you spend annually?

Not nearly enough info here to go on.

plostyle31

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Re: FIRE in 6 years?
« Reply #2 on: October 30, 2018, 08:02:26 PM »
You're right, I edited it shortly after. :)

MDM

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Re: FIRE in 6 years?
« Reply #3 on: October 30, 2018, 08:55:55 PM »
Wife my wife quitting in about two years, would I be able to do the same in 6?
What do you see if you use the simple "Time to FI" calculation in the case study spreadsheet and/or more sophisticated calculations in one or more of Best and/or Recommended Retirement Calculator - Bogleheads.org?

lhamo

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Re: FIRE in 6 years?
« Reply #4 on: October 30, 2018, 09:01:33 PM »
What do you spend?  You don't have much of a stash and it will be harder to build one once you drop to one income.  Even if you have very low spending rates (unlikely since that mortgage has got to be what, at least 4k/month) six years would be a challenge.  I seriously doubt you are going to accumulate 25x annual spending in investable assets in that amount of time (remember this does not include your home equity).

foobaz

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Re: FIRE in 6 years?
« Reply #5 on: October 31, 2018, 12:32:35 AM »
I put some of your numbers into a planner and guessed at some other numbers (your age, spending, tax rates, etc.):
https://www.lifetimepotential.com/worksheet/1b1vei44k42m6k2m1237w2r6l

It looks like you're going to run out of savings and be forced to sell your home, at which point housing costs will be more than you can afford without more income. You'll have a large amount of cash when you sell your home and maybe you can do something with it to cover your shortfall, but this is not a very secure plan.

reeshau

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Re: FIRE in 6 years?
« Reply #6 on: October 31, 2018, 02:40:37 AM »
Simply looking at your first post, with the amount of information missing, and seeing you did not follow the "How to post a case study" topic, or really almost any other case study example: you aren't ready.  You haven't thought deeply enough about it.  Don't commit a "ready, fire, aim" error with a question this big.  Stop, take a deep breath, and think about it systematically, in detail.  Then, write it all down, again in detail.  With your spouse.

plostyle31

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Re: FIRE in 6 years?
« Reply #7 on: November 01, 2018, 09:14:32 PM »
Thank you for the responses.

Our mortgage currently is $3800 and our spending about $6k a month.

We would be open to selling our home and moving to where we can buy all cash.

I'm going to spend more time thinking this out and using the sheets. The last poster is correct. I've taken two promotions in 9 months that involved me switching companies and industries. Caused some disruption in the short term, but we will allocate a lot of time for planning as I ramp up. I just got excited with my pay increase and already started thinking how I might have accelerated my freedom!

MustacheAnxiety

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Re: FIRE in 6 years?
« Reply #8 on: November 02, 2018, 09:04:12 AM »
You need a detailed plan eventually. But as far as back of the napkin goes, if you want to have your wife FIRE in 2 years and you FIRE in 6 years you would need: (1) the stock market to provide 7% per year after inflation (unlikely given current valuations), (2) your expenses would have to stay the same after having kids (difficult but maybe doable with one spouse staying home), and (3) to sell your house, leave the SF area and cut your expenses in half to 3K a month post FIRE (I assumed your total monthly expenses are 6K not 6K plus the mortgage payment).  That 3K a month would also need to cover increased health insurance/health care costs once you don't have an employer sponsored plan--so you probably need single payer healthcare to happen or ACA to stick around unmodified.  I didn't give you any kind of bump from property appreciation, so that could help the cause some.  But much of that equity could be eaten up by a house in the new location.

Not probable but possible if FIRE in 6 years is the priority and a few unknowns break your way.  If you want to have your 4 tiny properties dream, you likely need to set at least a few up during the next 4 to 5 years so you can get mortgages while you have a w2 income and have them up and running and profitable before retirement.

Worst case scenario you can work a year or four more.

plostyle31

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Re: FIRE in 6 years?
« Reply #9 on: November 04, 2018, 09:20:15 AM »
Outside of the tiny property rentals I plan on running side businesses after I reach FIRE. I don't want to count on them being anything but slightly profitable hobbies. Most likely in less regulated countries where I plan on having the small properties.

We are currently looking into buying the first property in Salvador, Brazil. I have family to look over it and the cost is about $40,000 US. Would pay all cash and rent it out for about 8 months out of the year when my mother isn't there.

This is both an investment and fits the needs of my mother. She houses sits and takes care of elderly in home, and hasn't really had a place of her own to store her things and rest in about 11 years. She earns enough to pay for the general maintenance, I would pocket the returns from renting.

I appreciate this community and look forward to engrossing myself with all the content here. Being newly married and in "mercenary for hire" mode in my career has had my time and focus elsewhere, but it's time to plan how I can slow down and enjoy the fruits of my labor.