Author Topic: What are my options for FIRE  (Read 2336 times)

whywork

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What are my options for FIRE
« on: May 16, 2018, 02:35:47 PM »
38 year old male here, single income family with two kids. My current networth is 600k. All in investment / retirement accounts, no home, I rent. I am in a good IT job that pays well and can increase my networth about 100-120k (including investment returns) per year. If I lose / leave this job, getting another like this pretty difficult and my networth will increase much slower. I I stay put in this job for another 7-10 years, I am all set to retire for good.

It's all good so far. The problem is this. I have an increasingly growing frustration about going to work, associated social interactions, work politics, not having my freedom, the stress of being a single income earner for the family. Every weekend I keep looking at my spreadsheet estimating if I could retire now. I hate every monday going to work. Not that anything is hugely wrong with my workplace either. I feel it is just me.

What are my options here?

a) In a low COL area, rent will be 1K, utilities 500$, groceries 500$, ACA healthcare premiums plus cost 500$, clothing and unexpected expenses 500$ with a total of 3000$. If I can get to 800k in 2 years, I can call it quits and live off the interest and using future social security and medicare.
b) Quit tomorrow. (Really love this idea). Rest for 2 years. Then go back to workforce for 3-4 years till networth comes back to 700k when I will be 44 and then retire fully with this and future social security benefits.
c) Both the above might be tight on expenses especially with kids. So continue to work for next 7-10 years and hit 1.5 to 2 mill and then retire and even save some for kids. I really don't like this option but thinking about kids this seems to be the safest option.

Let me know what you think. Thanks all.

- Sam
« Last Edit: May 16, 2018, 02:42:51 PM by whywork »

nereo

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Re: What are my options for FIRE
« Reply #1 on: May 16, 2018, 05:32:37 PM »
option d) you find a job you like that meets your expenses (perhaps a bit more), then let your investments compound naturally.  With $600k in investments you'll get there soon enough even if you don't add to it. It might take 3 years, it might take 10... all depends on the market.  BUt in the meantime you can do something you love, probably with much better hours, and still retire sometime in your 40s.

"Do not confuse complexity with superiority"

Freedomin5

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Re: What are my options for FIRE
« Reply #2 on: May 17, 2018, 12:26:52 AM »
No spouse who can work part-time to take some of the pressure off of being a single-income family?

I was the single earner for our family for three years when kiddo was young, and I was a bit burned out by my job. However, once spouse went back to work my burnout lessened, even though my job hadnít changed. I think it was just the unconscious pressure of thinking that I Could Not Lose This Job Or My Family Will Be Homeless.

Classical_Liberal

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Re: What are my options for FIRE
« Reply #3 on: May 17, 2018, 02:56:59 AM »
or e) Make your current job more enjoyable by not putting up with/caring about BS. Talk to supervisor to concentrate your duties on what you like and limit what you don't.  If supervisor is uncooperative, inform him/her that you intend to take option b or d and see how quickly the tune changes.

Classical_Liberal

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Re: What are my options for FIRE
« Reply #4 on: May 17, 2018, 02:57:46 AM »
or f) reduce spending so you are closer to FIRE

2Cent

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Re: What are my options for FIRE
« Reply #5 on: May 17, 2018, 03:25:32 AM »
e2) Make your job more enjoyable by reducing your hours. Half a day off on Wednesday really makes a huge difference for me. It feels like I have 2 day work weeks.
I don't think you are really in the wrong job. What you describe is probably the same in any job. I think your main problem is that you lack free time and resent your work for it. You'd be amazed how much more enjoyable work is when you're properly rested and have enough leisure time. If FIRE is still years away, don't spend too much time dreaming about it. That will just spoil the years you still have to work.

SpreadsheetMan

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Re: What are my options for FIRE
« Reply #6 on: May 17, 2018, 05:30:45 AM »
Some good other options there I think. Change the situation and mindset, not necessarily the job - it's very rare to find a job that doesn't suck to some extent, but quite often the suckyness can be minimised with a bit of effort.

whywork

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Re: What are my options for FIRE
« Reply #7 on: May 17, 2018, 07:06:35 PM »
Thank you all for your replies. I started working when I was 23 and have been in the workforce for 15 years. Imagining I have to do it for another 10-15 just kills me. I feel the biggest mistake I have made is not thinking of a working spouse when getting married. My wife won't be able to get a high paying job and even if she does some basic job, with the child care costs it won't add much.

Had I not married, my life would have been great. I always dreamt of freedom and not working. It would be so cool to have retired and have that freedom to do whatever I want rather than feel like a slave.

2Cent

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Re: What are my options for FIRE
« Reply #8 on: May 18, 2018, 01:42:51 AM »
Thank you all for your replies. I started working when I was 23 and have been in the workforce for 15 years. Imagining I have to do it for another 10-15 just kills me. I feel the biggest mistake I have made is not thinking of a working spouse when getting married. My wife won't be able to get a high paying job and even if she does some basic job, with the child care costs it won't add much.

Had I not married, my life would have been great. I always dreamt of freedom and not working. It would be so cool to have retired and have that freedom to do whatever I want rather than feel like a slave.
The good news is that your sensation of time passing decreases as you age, so the next 15 years will seem to pass much faster than the previous 15.

And don't discard the possibility to get your wife to work. Maybe not a regular job, but you could start a side gig that she runs from home. When the kids go to school she should have the time for it. Also this way she can leverage your IT skills as you could put in the know how to get it online and she puts in the time to run it.

2Cent

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Re: What are my options for FIRE
« Reply #9 on: May 18, 2018, 02:06:57 AM »
Oh, also don't make any big decisions at the moment. It is very common for people around 40 to look in shock at what their life is and feel like they missed out on things. The best thing that you can do is to take stock of what you do have (count your blessings) and rather than trying to get back the lost years or wallowing in self pity, think what you can still do with your life and focus on your progress.

Like you have already a huge stash. You actually have a wife and kids. And adding 100k a year is awesome. Also, you have enough FU money, so you don't actually need to participate in the office BS and are way more free than most people on the planet. You can cherry pick the work you want and if they end up firing you, so what. You'd probably get severance which would add to your stash. But more likely you'd do a good job at those tasks so they might even promote you.

Poobearius Maximus

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Re: What are my options for FIRE
« Reply #10 on: May 18, 2018, 07:49:37 AM »
option d) you find a job you like that meets your expenses (perhaps a bit more), then let your investments compound naturally.  With $600k in investments you'll get there soon enough even if you don't add to it. It might take 3 years, it might take 10... all depends on the market.  BUt in the meantime you can do something you love, probably with much better hours, and still retire sometime in your 40s.

Seconding option D with a mixing in of option try to heal your mindset or adjust your current job to fit your life and lessen your stress.  Also emphasizing the don't make a big decision without thinking on it for an extended period of time as it appears you have that option at the moment. 

You're in a great position as others have mentioned with your stash already.  Not knowing any specifics of the situation here, but with 15 years in the IT industry I think maybe it would be an least worth it to see what else is out there.  Based on the $600k without reducing your expenses at all you could cover the remaining expenses with a part-time gig of some sort.

As someone recently suggested to me.  Sit back and make a plan of exactly where you want to be and how you want to live and then make a plan of how to get there.  Maybe you'll find you already can!

Good luck!

whywork

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Re: What are my options for FIRE
« Reply #11 on: May 18, 2018, 10:18:08 AM »
I was frustrated yesterday, went home and looked deep into my situation. With my current job I am able to save 100k per year and this will take me 10 years (when my elder kid will start college) to hit 2M and will enable me to pay college tuition for my kids and even save some post my death for them. This is a comfortable FIRE.

If I quit my job and take IT contracting where I save 50k per year, it would take me 20 years and I am sure I wont be able to take that. Then I looked into our expenses and saw there were two that are outstanding: 3300 rent for a 2BR in a good school district closer to my work, 600 eating out (this is the only entertainment for us). Then I realized, if I can aim to get the remaining 50K which is roughly 4k per month then I don't need my current job. So here is what I thought of

a) cut down eating out to 100 by keeping only to fast foods like mcds, subway etc., Move to a place that makes my commute 1 hour (now it is 20 min) where schools are decent and the rent is 2300. So I would save 1500 more per month.
b) more extreme. cut down eating like above. Move to a 1BR in the above place where rent is like 1800. Ask my wife to do a part time job when kids are in school between 9 - 2, which can give us like 1000 bucks. So this will make the total saving to 3000 per month
c) really extreme. add part time uber driving for myself to take the total saving to 4000 per month.
d) not sure of this, if i can buy a manufactured home for 250-300k, my rent would be 300 per month but I would lose on the returns on capital which would be another 700. overall i would save 1300 per month but not sure if it is worth it.

If I can stick to these with my current job it will speed up the retirement. In the meantime if I get frustrated with my job, then I can quit and take the lower paying job and still retire in the same time frame. Please let me know what you think

Classical_Liberal

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Re: What are my options for FIRE
« Reply #12 on: May 18, 2018, 01:54:29 PM »
I think @2Cent has some good advice about taking stock and not jumping the gun.  I would just like to add to that. 

While taking stock, look at your spending habits.  I dont have kids and never will, but I get the proclivity to provide them with every advantage.  However, this has gotten out-of-control in the US! 

You are talking about a 2 million dollar stash, likely throwing off near six figures, plus eventual SS and probably other factors.  This a a metric shit-ton of spending.  It's your life, do what you want, but I vouch for the fact that living off of $1000-$1500 per adult household member in 90+% of the US is totally doable.  Meaning you could be FI in a year if you change priorities.

Take stock, decide if you actually hate your job or are just in a phase.  Read Your Money or Your Life, decide if your spending actually matches your values.  You don't have to live the live your peers are living!  How much of what you do/spend on actually provides value to your life and how much of it is habit and creep?

Finally,  start a journal here or a blog and lead us through your process.  It'll help you with feedback and help others here in your exact situation.  Good luck!

Edit:  I just want to add that changing from upper middle class spending to MMM level frugality (at least originally) is a not a change of degree, it's a change of kind.  Meaning dont think "cut down $100 on eating out".  Think, why do I spend $600 a month (enough to cover my entire families food X 2) on eating out when I'm still miserable?  YMOYL will help with this.
« Last Edit: May 18, 2018, 02:00:30 PM by Classical_Liberal »

whywork

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Re: What are my options for FIRE
« Reply #13 on: May 18, 2018, 05:58:09 PM »
I agree with you that frugality is the way. But I don't think I can get by 1.5k per adult in Bay area where I live. With a family of four, I would need 60K per year or 5k per month. And I want to be able to pay for my kids college which I estimated as 50K per year for each kid (Let me know if this is too high). With 2 kids for four year college that's 400k total which is what makes it difficult for me to call it quits in an year at 700k.

Adding SS benefits, it looks like I need 1.3 mill atleast to pay for their college and retire frugally after. This will take me 4.5 years from now. If I work for 4 years further from there then I will hit the 2 mill mark which will let me leave 2 mill per kid when I am 84. I am sure my kids will feel the same as me in terms of work so I would like to work for an additional four years to save them from working forever.

Classical_Liberal

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Re: What are my options for FIRE
« Reply #14 on: May 19, 2018, 12:09:39 AM »
So, the answer to your username question is: you are working to live in the bay area (the most expensive area in the US, top 5 in the world), and to give your kids a free pass on college and probably life, since 2mil makes them potentially FI as well..  That's fine, if it's what you want, but then deal with the consequences... more work. 

Someone could argue providing kids with a free pass on life is actually more harmful than helpful and time with parents is more important than money.  Also that living in the Bay area is firehouse of wasted resources and relocation should be a #1 priority after employment becomes optional...  But those people would FIRE in a year in your situation.

nereo

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Re: What are my options for FIRE
« Reply #15 on: May 19, 2018, 08:14:58 AM »
I agree with you that frugality is the way. But I don't think I can get by 1.5k per adult in Bay area where I live. With a family of four, I would need 60K per year or 5k per month. And I want to be able to pay for my kids college which I estimated as 50K per year for each kid (Let me know if this is too high). With 2 kids for four year college that's 400k total which is what makes it difficult for me to call it quits in an year at 700k.

Adding SS benefits, it looks like I need 1.3 mill atleast to pay for their college and retire frugally after. This will take me 4.5 years from now. If I work for 4 years further from there then I will hit the 2 mill mark which will let me leave 2 mill per kid when I am 84. I am sure my kids will feel the same as me in terms of work so I would like to work for an additional four years to save them from working forever.

There's a few things wrapped up in here.
First, what are the ages of your children?  If they are about to go off to college in the next couple of years and if you are determined to pay their full share than yes, you might need anywhere between $20k-$50k/year/kid.  But it depends very much on where they go and what financial options (e.g. scholarships) are available to them.  I see you are in California; Cal State (CSU) students pay $5k/year; adding room & board would bring it to about $20-25k depending on which campus you choose.  The UC schools are just over $12k (and include some of hte best colleges anywhere). Private colleges like USC can top $50k for tuition alone, but that's often mitigated by scholarships.
BUT - if your children are 10+years away, you don't need to save nearly as much now due to compounding.

Second - there's a personal choice of whether you should pay for your childrens' entire college experience, or if there should be limits and obligations on their part. Given that you live in a state with some of the best public universities, one approach could be to promise to pay tuition at any of the UCs (or a similar amout somewhere else) plus the cost of on-campus housing.  Social outings or fancier living conditions they make up the difference. If they want to attend a more expensive school they have to make up the difference. With those conditions you'd be looking at about $100k/kid for their four years.  If they young(ish) now you might need only to sock away $50k now for each to pay for it. Plus, they will get better financial aid options if you aren't earning a high wage the years before they start.

Then there's the option of moving to a low(er) COL area.  I've lived in the bay area, and I lvoed it, but consider whether staying there is worth continuing to work for 4+ more years.  You could live like a king in a lot of other places with much less. Also - is your estimate considering a paid-off house or not?  That makes a big difference int he final figures.

Finally there is the idea of giving your kids a large inheritance.  It's very tempting, but probably misguided. Hopefully you will live into your 80s, which means your kids will be in at least their 50s.  With even marginally good financial sense they could be financially independent themselves by then.  also, there's the idea that most people who retire and follow a 4% WR wind up with far more money at their end of their life than when they retired, given its historical conservative nature. So they will probably wind up with today's equivalent of at least half of your retirement 'stach each.
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whywork

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Re: What are my options for FIRE
« Reply #16 on: May 20, 2018, 02:56:55 AM »
Thanks both, that's helpful. I have also found the below link of a family with 6 kids that talks about similar ideas about funding kids' college

http://www.budgetsaresexy.com/family-budget-6-kids/

lhamo

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Re: What are my options for FIRE
« Reply #17 on: May 20, 2018, 06:31:35 PM »
Don't increase your commute -- it will make you even more miserable than you are already.

Your eating out budget is really high.  We don't spend that much and we're FIREd with a hefty stash.  Learn to cook the stuff you like to eat at restaurants -- I'm making steak, sweet potato fries and roasted asparagus as I type this.  Got the steaks for $2.68/lb as a Fred Meyer loss leader.  Asparagus was 1.99/lb.  The sweet potato was probably a dollar.  So for about $10 tops I'm feeding four people an elegant, tasty meal that would cost $200-300 in a restaurant.  We do the same with other foods we like -- Chinese, Indian, Mexican, Korean all regularly rotate on our menu.  Our grocery bill for two adults and two teens is roughly 600-700/month and that includes a couple of bottles of wine a week (we like the cheap stuff).
Wherever you go, there you are

Irateplatypus

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Re: What are my options for FIRE
« Reply #18 on: May 20, 2018, 09:03:31 PM »
d) not sure of this, if i can buy a manufactured home for 250-300k, my rent would be 300 per month but I would lose on the returns on capital which would be another 700. overall i would save 1300 per month but not sure if it is worth it.

I live in the bay area as well and have looked into this as an option. The home itself is 250 - 300k and they're very nice. But, you don't own the land. The HOA fees last time I looked are over 1k a month. And there's always the possibility that the landowner can choose to sell their land to build townhomes/condos. And congrats you are the owner of an overpriced mortgaged manufactured home that you have no where to put.

formerlydivorcedmom

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Re: What are my options for FIRE
« Reply #19 on: May 23, 2018, 03:12:31 PM »
I'm seeing a pattern of software developers/IT people around age 40 who are just totally over the idea of doing this job anymore.  Count me in!  I hate my job - not because the job is bad, but because I'm SO OVER working in IT.  There's not a challenge anymore.   But the money....the money is good, and I'm not even saving what you are.

I'm also the primary breadwinner (my husband has been in college full-time for the last 3 years...to go into IT), and it does add a layer of stress.  We've just decided to build up our cash to a higher level to give me more peace of mind.  Would that help you too?

What are your financial goals?  All those crappy SMART goals you had to set at work - do the same at home.  We have a goal of saving $X per kid by the time they graduate high school, a goal for our retirement stash, etc. You need actual numbers, and goals that you and your wife agree on. Then you can figure out what you need to do to get there.

We're having a lot of family discussions about priorities for how we function as a family.  We are baby-stepping the changes in our spending. We finally got rid of cable two months ago, and so far no one has missed it.  We play board games and listen to music and - gasp! - play outside.

I second (third?) reading Your Money or Your Life.  I pretty much stopped buying crap cold-turkey after reading that book.  We have also started reduced our eating out spending - by being extremely picky about where we go.  There aren't a lot of fast food meals anymore.  Instead, we go out as a family once a month to a place where the food is good...and more memorable.  That one meal might cost our family of five $75...but to us that's better than a lot of trips to Taco Bell.  There is a LOT more meal planning involved, and that falls on me too.  I'm learning to cook more types of meals.

If I exclude medical bills (it's been a perfect storm), we are averaging $500/month lower spending this year than last year, and there is so much more fat in our budget, even without moving (we seriously discussed that and then nixed the idea).

It seems overwhelming.  Take baby steps with your expenses, set goals with your wife, and come back with specifics.
Boldly leading a blended family into (future) financial independence

kei te pai

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Re: What are my options for FIRE
« Reply #20 on: May 24, 2018, 12:28:24 AM »
Hi there, I am wondering where your wife is in all this. Are you two a team? Does she understand how you feel? What are her expectations?
Sounds like you are contemplating some major changes to the status quo, and I suspect this will not go well unless you have shared goals.
Best wishes for the future.

whywork

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Re: What are my options for FIRE
« Reply #21 on: May 24, 2018, 07:54:49 AM »
Thanks all. As per your suggestions, I posted my earnings and expenses (in a new thread) here: https://forum.mrmoneymustache.com/case-studies/my-expenses-and-earnings/

frugal_c

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Re: What are my options for FIRE
« Reply #22 on: May 24, 2018, 08:29:24 AM »
I would definitely hold out longer.  Your savings rate (100k+ / yr) is so high relative to your net worth, I think you need to stick it out a bit longer.

For you people with these extremely high savings rates, I think it's important to stay in the job and so the extreme frugality may not apply quite as  much.  In other words, would spending a little more money make you happier?  If you spent an extra $10k on some hobby would that make it easier to stick it out for a few years?

whywork

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Re: What are my options for FIRE
« Reply #23 on: May 24, 2018, 09:12:52 AM »
I would definitely hold out longer.  Your savings rate (100k+ / yr) is so high relative to your net worth, I think you need to stick it out a bit longer.

For you people with these extremely high savings rates, I think it's important to stay in the job and so the extreme frugality may not apply quite as  much.  In other words, would spending a little more money make you happier?  If you spent an extra $10k on some hobby would that make it easier to stick it out for a few years?

Very good point. I actually dint include the ROI on investments, with it, my total savings is 130k. Yes pretty high for a single income. I sometimes contemplate whether spending bit more would make it easier to bear this. If I hit 2m, there is no need to think anymore and I can FIRE immediately. But that seems a long way away. So may be, continue frugality till I hit 1 mill in 3.5 years and then feel safe and take more risks by switching jobs and / or contracting for less and spend more money that way?