I have lurked here for some time and would like to use this excellent forum to draw some good advice – and undoubtedly some severe face punching. We are mid/late 40s couple, married, one child in high school. No health issues. Looong educations, both started working at 30. Last year we blew up our live situation completely, in part because what I have read here. We were in a HCOL area, owned a 1.5M house that sucked up a huge part of our income between mortgage, aggressively paying down the principal (so missed much of bull market), endless high-end house renovations and crazy taxes (10k+). Talking about the hamster wheel! We now sold it, not making a dime on it but no loss either. Lesson learned, face punches merited and deserved. Last summer we moved to even more expensive COL area BUT also doubled our net salaries along the way, as we both took bigger positions with all the travel and stress that comes with it. My spouse took some convincing as we were admittedly living a very comfortable life in a beautiful house. The prospect of a smallish rented apartment and more intense work hours did not immediately spark a lot of excitement – but after outlining how these changes could turbo-charge our FIRE plans she converted completely. We are now working as a team to finance a great future.
Liabilities: none what-so-ever
Assets: total of 2.05M
Tax-deferred pension accounts: 270k
Low cost ETFs: 1.6M
RSUs: 150k
Cash: 30k
Income: Our new situation looks as follows:
Salary, me: 318k.
Bonus, me: I expect 110k paid out, max is 180k
RSUs, me: 75k
Salary, spouse: 210k
Bonus, spouse: expect 50k paid out, max is 65k
Total annual gross is 763k, max attainable 848k. Net salary: 27.5k per month plus 7.5k from bonus on average after medical insurance and pension plans. So 35k net pay per month plus an additional 75k in RSUs (stable large company). In comparison before our relocation we netted just around 18K per month. I think we are close to maxing out our potential, I may get to 350k base salary within next 3-4 years. Very uncertain if I can make it to last management layer and sometimes I wonder if I even want it, given the politics.
Expenses: 8000 per month (3800 in non-rent expenses)
Rent & utilities: 4200 (1500 sqft apartment, in short distance from school and work)
Food & household: 800
Lunch at work: 200 (combined for both of us)
Restaurants: 150 (lots of business dinners so we don’t do this much at own expense)
Travel: 1500. (this is what we live for, read on..)
Clothes, shoes: 200
Car insurance: 100 (one car only)
Gas, car maintenance: 150 (7 year old luxury sedan with 35k miles bought in cash for 30k)
Public transport: 50
Internet, cell phone, cable, Spotify, Netflix: 100 in total
Kid’s allowance (50% goes directly to savings): 300
Personal care (hair cuts, etc): 100
Sports: 150 (skiing, club memberships)
I realize this is a far cry from mustachian spending pattern, and we arguably have not done any real trimming but simply carried over our old life style while now earning more cash. Rent is insane here, but we will stay put at least until our kid moves out in 2 years for college, we could then downsize needed be. Still we aim at plowing in 320k each year into our taxable investment accounts for a saving rate of 77% (excludes RSU’s/ tax deferred accounts and medical insurance).
Our aim: We actually enjoy our jobs and getting paid so well sparks the one-more-year syndrome. However, we are very conscious about the passing of time and especially as we are into travel in a major way. What we want in retirement is to travel, plain and simple. First a couple of years slow-travel with backpacks exploring the best hiking trails in the world. After that we’d like to get a (used) VW California and cruise North America, Europe, Australia thin. Camping when and where we can. We have not really mapped out such a lifestyle expense-wise yet, but imagine 100k pr year should large do it. So the target is 3.5M invested and a paid-for house. We are done with expensive homes, but as we wish a waterfront property as a last residence we think we need 500k for this - even in a more remote place for a 1000-1200 sqft place. So total is 4M, which I hope we can achieve in 4.5 years
Some questions we struggle with:
• Does 100k pr year for such a life style sound reasonable?
• Are we crazy for staying in the circus for another 4.5 years? It took us 20+ years education to get there and tons of sacrifice. We are harvesting now and a small push gets us to a very comfortable place – while we actually enjoy what we do. The shadow is the passing of time!
• Risk exposure. We happen to cash out the house at top of a bull market. My reasoning is that we can plow so much into the market that even if things tanked now, we could catch up. The ETFs are a mix of US (most), World, Europe and a few individual stocks (very limited). No CDs, no bonds, no REITS, no real estate
• One option is my spouse retires in 3-4 years and I (highest earner & 5 years younger) continue a bit longer. Spouse could then plan out trips and manage things better on the home front. Anybody has done this to ease into retirements?