Author Topic: Dealing with the mental aspect of no "real" income post FIRE  (Read 1886 times)

kjulez_83

  • 5 O'Clock Shadow
  • *
  • Posts: 86
  • Age: 35
  • Location: Melbourne Australia
Dealing with the mental aspect of no "real" income post FIRE
« on: January 11, 2018, 05:02:01 AM »
Hi all,

It is creeping closer and closer to my date to quit my job.

The situation is that I wanted my husband and I to "retire" by selling our house, moving somewhere where houses are much cheaper and reaching our FIRE goal. He wasn't into it and in the end he said "well why don't you just quit your job and I'll keep working"? So he is not ready for FIRE, I am.

As such, I won't have my own personal income stream anymore. I currently work 3 days a week (have kids), mostly salary sacrifice (superannuation - Aus) and only have about $500 per fortnight hitting our joint everyday bank account. I control our finances. We will not miss the money but I feel weird about for the first time ever pretty much since I was 15 not having any income and before I have even quit I'm looking on online job boards to see what's out there in the way of casual/temp work! I have a volunteer project I'll be working on to keep me busy (plus all the other stuff I wanted to do once retired!) and don't "need" the money but it just feels strange...I guess it is also the fact that although my husband said to go for it, he might start to feel resentful or start making stupid comments when I spend money on stuff (joking of course but it will irk me nonetheless if he does).

Did anyone experience this in the lead up to FIRE?

TIA :)

MrThatsDifferent

  • Pencil Stache
  • ****
  • Posts: 653
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #1 on: January 11, 2018, 08:33:52 AM »
Hmmm, ok. When I FIRE the plan is that the money Iíve invested will make money I can live off. So there will be an income stream coming in. I would imagine that you will have money from your investments, otherwise, how were you going to FIRE with your husband? If so, then thatís your income, which, youíve earned. Great. Now you can live your life quilt free, cause that was always your plan. If not, keep working until you reach that point.

bacchi

  • Magnum Stache
  • ******
  • Posts: 2763
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #2 on: January 11, 2018, 11:06:50 AM »
Right. Won't you be withdrawing from your invested assets?

It's been difficult for me to withdraw money compared to sending in monthly deposits. Luckily, the account has gone up due to the market even with the withdrawals.

ozbeach

  • Bristles
  • ***
  • Posts: 257
  • Age: 54
  • Location: Australia
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #3 on: January 11, 2018, 02:42:01 PM »
I'm not quite retired, but coming to the end of 14 months of Long Service Leave and hoping for a redundancy package when I go back to work at the end of the month, so I've been thinking about this a fair bit.

For the last five years or so I have been living off $700 per fortnight. I've salary sacrificed the maximum into super, and funnelled the rest into high-interest online only accounts until the balance is enough to invest. The only money I see out of my fortnightly salary is that $700 and I just make it work. This is about $20K per annum.

My FIRE number is AU$1M, which theoretically gives me $40K per year, or twice what I have accustomed myself to. I am 53, so seven years until I can access super, but 30% of my stash is outside super so I could still make this 40K work.

I have decided to "pay myself" $24K per year in the form of a $1,000 transfer into my everyday transaction account on the 1st and 15th of every month. No reason I couldn't just dump the entire amount into my transaction account in one go, but having had a fortnightly pay cheque for the last 37 years this is just what I'm used to!

If I have a large expenditure requirement at some stage that I can't manage within the $24K budget, I have a $16K per year buffer that has stayed within my investment accounts earning money in the meantime.
FIREd @ 52

happy

  • Magnum Stache
  • ******
  • Posts: 3971
  • Location: NSW Australia
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #4 on: January 11, 2018, 03:45:55 PM »
OP, I think the issue is that you will effectively become a SAHM, even though you've contributed heavily to the household stash. You won't have FIREd in the sense that most here would understand, since your plan involves geographic arbitrage  i.e. selling and reaping capital from your PPOR.

That being said feelings are feelings - I suspect you've got a mix of discomfort over you and DH not being on the same page about this, and how will you both feel once you are SAHM.  Have you and DH had a really good talk about this?

As others have said, you will have real income from investments once you are fully retired. For me, in my 59th year, the idea of no earned income, after working over 4 decades, is pretty scary.  Plus in more recent times I'm used to having a fair surplus as a high income earner working part-time. I've come to rely on the idea  that I've a big income buffer if I ever needed it. 

Like Ozbeach, I'm going on LSL  on half pay later this year for 6 months. This will get me used to the feeling of a real life truncated income. I've a bit of a project going on that might change how I derive my income, but previously I had intended on living on super - which you can draw down in a variety of ways. If I find I need to pay myself regularly, thats what I'll do.

I suspect I'll spend a fair bit of time at the beginning going over the figures in my head to reassure my self all is well.
Journalling at Happy Aussie Downshifter

geekette

  • Handlebar Stache
  • *****
  • Posts: 1736
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #5 on: January 11, 2018, 04:32:36 PM »
It sounds like you're not worried about household money, but personal money, for things that are just for you.  I have had that same odd feeling, myself (I quit working long before he did).  You're still contributing to the household, even if you aren't getting a paycheck from someone else. 

Can you agree to a set amount per week/month/whatever to go into your own account to do with as you wish? 


kjulez_83

  • 5 O'Clock Shadow
  • *
  • Posts: 86
  • Age: 35
  • Location: Melbourne Australia
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #6 on: January 12, 2018, 02:56:44 AM »
Hi all,

Thanks for your replies! I guess I didn't really title my post correctly as what I'm doing isn't really FIREing in the strict sense.

Hmmm, ok. When I FIRE the plan is that the money Iíve invested will make money I can live off. So there will be an income stream coming in. I would imagine that you will have money from your investments, otherwise, how were you going to FIRE with your husband? If so, then thatís your income, which, youíve earned. Great. Now you can live your life quilt free, cause that was always your plan. If not, keep working until you reach that point.

I won't be drawing down on anything as we share finances and there will still be around $100K per annum of income from his salary. We were going to FIRE together only if we sold the house and moved to a cheaper area, thus adding about $500K to our investments (my idea which i researched and tried to sell to him for a number of months but ultimately he didn't go for so I was like OK...well I'm still gunna quit)

OP, I think the issue is that you will effectively become a SAHM, even though you've contributed heavily to the household stash. You won't have FIREd in the sense that most here would understand, since your plan involves geographic arbitrage  i.e. selling and reaping capital from your PPOR.

That being said feelings are feelings - I suspect you've got a mix of discomfort over you and DH not being on the same page about this, and how will you both feel once you are SAHM.  Have you and DH had a really good talk about this?

Yep, many people would just call me a SAHM lol but my daughter who is 3 will still be looked after by people other than myself for 3 days of the week (daycare for 2, my parents for one day) and my son will be in school. So for someone who has always worked and not had very much time to myself (as i'm either working or looking after my kids) it's my version of FIRE because I am stopping work coz I can. We haven't really had a good talk about it...it's hard to have a serious conversation with him I find it kind of hard to bring it up. But he knows I'm doing it and hasn't expressed any real concerns so should be fine ;)

For me, in my 59th year, the idea of no earned income, after working over 4 decades, is pretty scary.  Plus in more recent times I'm used to having a fair surplus as a high income earner working part-time. I've come to rely on the idea  that I've a big income buffer if I ever needed it. 

Like Ozbeach, I'm going on LSL  on half pay later this year for 6 months. This will get me used to the feeling of a real life truncated income. I've a bit of a project going on that might change how I derive my income, but previously I had intended on living on super - which you can draw down in a variety of ways. If I find I need to pay myself regularly, thats what I'll do.

I suspect I'll spend a fair bit of time at the beginning going over the figures in my head to reassure my self all is well.

Yeah I think for me it's mainly just a mental thing. I'm so used to focusing on this (adding to the stash to retire early) that when I actually broke down what I earn including super (as being in my 30s I always tend to just look at the base amount!) I was like holy shit that's a lot of cash I'll be missing out on each year!!

Frugal-Investor

  • 5 O'Clock Shadow
  • *
  • Posts: 17
  • Location: central Virginia, US
Re: Dealing with the mental aspect of no "real" income post FIRE
« Reply #7 on: January 12, 2018, 10:25:41 AM »
A couple of thoughts from when I FIREd a few years ago.

(1) Having a super definitive and clear conversation in advance of retiring or semi-retiring is REALLY important -- This step helped me and my partner bring up concerns and figure out how to tackle them. In fact, for each serious concern, we defined the specific steps we would take to address (almost like a formal risk management plan).
(2) Having a budget is everything -- Prior to my retiring, we had no detailed budget. We had designated portions of our income to household needs, mortgage, to retirement accounts, to non-taxable investment accounts. As part of planning for my retirement, we did a specific and detailed budget. Running our household a bit like a business with an eye to long-range planning acts like a framework for collaborative decision-making. Most of our discussions and decisions involve shifting spend from one area to another based on what we value the most, but staying at the agreed-upon spend level.
(3) I retain the flexibility to change my mind -- Having experienced the sheer joy of an early morning spent gardening while my dog sleeps in the sun, free time with my partner or an afternoon working as volunteer coach, I doubt I'll change my path. But, I continue to learn to be flexible. if parts of my situation or my family situation changes, I can start a business, consult a little, get a job, etc. if that's what I need to have a life I value.