Author Topic: Little Support and Helpful Advice, please!  (Read 4053 times)

Bolshevik Artizan

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Little Support and Helpful Advice, please!
« on: May 09, 2017, 12:18:31 PM »
Hi All

So these last few months my wife and I have been slammed by what feels like bill after bill after bill. First our water main went - $4000; then my car needed serious repair - $3500; now we have property taxes on the way ($2600). Obviously we have a stash, and we can deal with all of them. Oh - and our washing machine and dryer went. Another $1600.

But it got me thinking about shifting from my new career of my dreams as a freelance writer to going back to the cubicle. Don't get me wrong, we're getting through every month with the occasional treat and even a trip to Europe. When you go through six months like this, though, where you're getting slammed left and right financially, it makes you wonder if enough is ever enough.

Snapshot background: net worth C$2.2m, <50% in property. $200,000 in near-cash investments, rest in pensions. Wife (40) earns C$105K, I (47) made a huge C$6000 last year and C$11,000 so far this year (my target is C$30,000 this year and C$45,000 next). I FIREd to freelance/start a new career and look after our son 16 months ago.

Grateful for any advice or observations. No-one wants to go back to the cubicle but maybe needs must? Like I said, we're surviving, thriving even. But periods like this make me wonder.

Thanks team mustache!

BA

Cwadda

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Re: Little Support and Helpful Advice, please!
« Reply #1 on: May 09, 2017, 02:59:26 PM »
You have a net worth of $2.2 million and you're worried about $12k? No, don't go back to your cubicle.

Mr. Green

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Re: Little Support and Helpful Advice, please!
« Reply #2 on: May 09, 2017, 05:38:46 PM »
I can relate to this a bit. I FIRE'd, then went back to work, then dropped to half-time at the beginning of the year. I've had a lot of unexpected medical expenses that have eaten up every spare dollar we've earned this year, outside of 401k contributions. We're still technically thriving when you consider the 36k in 401k money but having every dollar go out is something we're not used to. Of course, we'll have to get used to this when we both fully FIRE. For me, I think it's just part of the struggle to change mentality from accumulating dollars to living off a fixed amount of dollars.

Consider this your low point, like a market correction. Your income is low because of the transition and you've hit that magic string of bills that makes you think you might not be earning enough. You're at the bottom of the trough, but if you ride it out, just like you would a market correction, you'll find your income rising, those one time bills will cease, and you'll be riding the wave up the other side. You'll be feeling great. Market corrections take a little time to complete their cycle and I've found so can a low point for personal finances.
FIRE, Take Two.

Bolshevik Artizan

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Re: Little Support and Helpful Advice, please!
« Reply #3 on: May 09, 2017, 08:11:16 PM »
I can relate to this a bit. I FIRE'd, then went back to work, then dropped to half-time at the beginning of the year. I've had a lot of unexpected medical expenses that have eaten up every spare dollar we've earned this year, outside of 401k contributions. We're still technically thriving when you consider the 36k in 401k money but having every dollar go out is something we're not used to. Of course, we'll have to get used to this when we both fully FIRE. For me, I think it's just part of the struggle to change mentality from accumulating dollars to living off a fixed amount of dollars.

Consider this your low point, like a market correction. Your income is low because of the transition and you've hit that magic string of bills that makes you think you might not be earning enough. You're at the bottom of the trough, but if you ride it out, just like you would a market correction, you'll find your income rising, those one time bills will cease, and you'll be riding the wave up the other side. You'll be feeling great. Market corrections take a little time to complete their cycle and I've found so can a low point for personal finances.

Bless you and thank you. I know these are small woes and I am humbled by some of the stuff I see people going through on here. But you understand my point: we've gone for it and I've made the leap, and then we get a beating to our cash account from all this stuff. I like your analogy of a market correction, too.

Cheers -


BA

redrocker

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Re: Little Support and Helpful Advice, please!
« Reply #4 on: May 09, 2017, 09:23:25 PM »
Hi All

So these last few months my wife and I have been slammed by what feels like bill after bill after bill. First our water main went - $4000; then my car needed serious repair - $3500; now we have property taxes on the way ($2600). Obviously we have a stash, and we can deal with all of them. Oh - and our washing machine and dryer went. Another $1600.


I'd second what the previous two posters said. While I don't know your own personal context I'd note (since this is a MMM forum after all) that your car repair cost as much as I've paid for several used cars in my life, and that must've been a pretty nice W/D set. These (and your property taxes, if you think about it) are lifestyle choices that you're making. Can you afford them? Seems like it. But would you really trade your freedom for such choices?

Personally, I'd live a more spartan life for a few months (or years) to make up for the unexpected expenses WAAAY before I'd consider moving myself into a cubicle for 40+hrs a week of tireless meetings, useless computer based training, endless accidental reply-all emails to the entire global network asking to be removed from the distribution, incompetent coworkers who can't flush a toilet or brew coffee without it overflowing, sifting through pdfs of acronyms just to understand one of my 100 emails that day...you get the picture.

lhamo

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Re: Little Support and Helpful Advice, please!
« Reply #5 on: May 09, 2017, 09:36:35 PM »
Your wife makes 105k and you are adding over 2k/month on top of that -- why is it a challenge to cashflow these expenses?   

You don't need to go back to a cubicle.   You are on track to meet your income target this year.   If you can't cash flow this kind of stuff, you should build up a bigger emergency fund that you keep in cash.  Stuff breaks.  Sometimes all at once.  You have plenty of money to deal with it.  As others suggested, maybe rachet down the lifestyle stuff.  And plan better.   For example, we just spent $240 on a sewer scope and identified a major problem that the sellers of our house are fixing.   But we know that at some point in the next 1-5 years, we are going to have to pay 10-20k to get the rest of the sewer line replaced.  No big -- we'll plan for it, and incorporate the changes we want to do to the front landscaping.   And I am going to suggest to every Seattle area homeowner I know that they do a sewer scope and start planning to replace their sewer line if their house is 60 years old or older.  The old concrete lines are failing all over town due to root intrusion (our issue) and just plain old age.   LOTS of people get hit with a huge urgent bill because they don't plan ahead and stay on top of this kind of maintenance stuff.  Same with your car and the washer dryer.   That stuff doesn't last forever.  Build up the slush fund to deal with it and THEN plan your vacations.  Maybe with the excess you earn over your targeted amount -- rewards you for meeting and exceeding your goal, and avoids lifestyle creep over the more mundane stuff.
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Mmm_Donuts

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Re: Little Support and Helpful Advice, please!
« Reply #6 on: May 10, 2017, 07:25:22 AM »
With over $1MM invested you're earning essentially $40k + $105k + $30k = $175k/year. I would not be worried about 12k in unplanned expenses with that level of income.

Maybe check in with why you are feeling this way. Is there another reason you're wanting to go back? Is your wife planning to quit soon, so you'll be losing this income? Are you feeling unsettled by things you can't control in a more general sense, and projecting this feeling into your finances? Are you nervous about freelance life where your income is unpredictable? It seems like you're going through OMY syndrome and need to do some soul searching.

FWIW I am in a very similar situation financially, except neither I nor my husband are pulling in significant incomes (his 0, mine an unpredictable low 5 figures). We're living mostly off of investment income from our stache and our expenses are nowhere near Mustachian-level low. We haven't been hit with any major expenses yet, though I see some expensive home repairs coming our way soon. I'm not too worried.

I think your fears will pass.


LAGuy

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Re: Little Support and Helpful Advice, please!
« Reply #7 on: May 10, 2017, 07:29:11 AM »
The property taxes shouldn't even be unplanned expenses. You know they're coming every year and should have an idea of how much too.

Bolshevik Artizan

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Re: Little Support and Helpful Advice, please!
« Reply #8 on: May 10, 2017, 10:23:24 AM »
With over $1MM invested you're earning essentially $40k + $105k + $30k = $175k/year. I would not be worried about 12k in unplanned expenses with that level of income.

Maybe check in with why you are feeling this way. Is there another reason you're wanting to go back? Is your wife planning to quit soon, so you'll be losing this income? Are you feeling unsettled by things you can't control in a more general sense, and projecting this feeling into your finances? Are you nervous about freelance life where your income is unpredictable? It seems like you're going through OMY syndrome and need to do some soul searching.

FWIW I am in a very similar situation financially, except neither I nor my husband are pulling in significant incomes (his 0, mine an unpredictable low 5 figures). We're living mostly off of investment income from our stache and our expenses are nowhere near Mustachian-level low. We haven't been hit with any major expenses yet, though I see some expensive home repairs coming our way soon. I'm not too worried.

I think your fears will pass.

This is a great point, thank you. Yes indeed, there's certainly some anxiety in the mix about leaving the comfort of what I knew (and disliked) for more than 20 years for the unknown. To be honest, I've felt like face-punching myself as a wake-up call; not over stupid expenditure, but just to stop and think of how lucky I am in so many ways, being able to raise my son myself, living in a beautiful place, doing work that interests me.

And as earlier posters have said, net worth of 2.2M does put $12.5K of costs in perspective. I would say, though, that one way of staying retired is not to eat in to your capital (of course)...

Thanks again -



BA

Bolshevik Artizan

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Re: Little Support and Helpful Advice, please!
« Reply #9 on: May 10, 2017, 10:24:26 AM »
You have a net worth of $2.2 million and you're worried about $12k? No, don't go back to your cubicle.
short and to the point, and gave me a wake up call. Thank you.

Bolshevik Artizan

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Re: Little Support and Helpful Advice, please!
« Reply #10 on: May 10, 2017, 10:25:59 AM »
Hi All

So these last few months my wife and I have been slammed by what feels like bill after bill after bill. First our water main went - $4000; then my car needed serious repair - $3500; now we have property taxes on the way ($2600). Obviously we have a stash, and we can deal with all of them. Oh - and our washing machine and dryer went. Another $1600.


I'd second what the previous two posters said. While I don't know your own personal context I'd note (since this is a MMM forum after all) that your car repair cost as much as I've paid for several used cars in my life, and that must've been a pretty nice W/D set. These (and your property taxes, if you think about it) are lifestyle choices that you're making. Can you afford them? Seems like it. But would you really trade your freedom for such choices?

Personally, I'd live a more spartan life for a few months (or years) to make up for the unexpected expenses WAAAY before I'd consider moving myself into a cubicle for 40+hrs a week of tireless meetings, useless computer based training, endless accidental reply-all emails to the entire global network asking to be removed from the distribution, incompetent coworkers who can't flush a toilet or brew coffee without it overflowing, sifting through pdfs of acronyms just to understand one of my 100 emails that day...you get the picture.

A pithy reminder of the inanity of corporate life, thank you. Re: expenses, I do live in Canuckistan, rather than in the US, so everything is around 30% more expensive - for context only...

Bolshevik Artizan

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Re: Little Support and Helpful Advice, please!
« Reply #11 on: May 10, 2017, 10:27:05 AM »
The property taxes shouldn't even be unplanned expenses. You know they're coming every year and should have an idea of how much too.

True, though again I live in BC where they are announced late and given the rocketing property prices can go up by as much as 30% year on year...

Peter Gibbons

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Re: Little Support and Helpful Advice, please!
« Reply #12 on: May 12, 2017, 05:48:26 PM »
I'd suggest you start using a monthly budget if you are not already.  In the monthly budget you can include a line item for unplanned repairs and expenses (say its $300 per month).  In months that you don't need this cash, you set it aside in a little separate fund (I use my savings account).  Then when something comes up you feel prepared because you have anticipated this and already have a little separate fund to pull from.  You know eventually you are going to have car repairs, need new tires, need to replace your roof, etc.

Bolshevik Artizan

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Re: Little Support and Helpful Advice, please!
« Reply #13 on: May 12, 2017, 08:14:59 PM »
I'd suggest you start using a monthly budget if you are not already.  In the monthly budget you can include a line item for unplanned repairs and expenses (say its $300 per month).  In months that you don't need this cash, you set it aside in a little separate fund (I use my savings account).  Then when something comes up you feel prepared because you have anticipated this and already have a little separate fund to pull from.  You know eventually you are going to have car repairs, need new tires, need to replace your roof, etc.

Sound advice - thank you. We keep $1000 in our current account as a "float" for contingencies but maybe we should raise this to $2000.

Livingthedream55

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Re: Little Support and Helpful Advice, please!
« Reply #14 on: June 26, 2017, 11:21:16 AM »
I'm two years away from retiring, but my plan will be to start with a $30,000 emergency fund and add $600 a month of savings (basically I will designate $600 a month from what I will be withdrawing monthly from my IRA with Vanguard to be added to my emergency fund for "stuff hits the fan" expenses).

I think the challenge is to develop a mindset of" That's what the money is for!"

As others have said, appliances break, houses and cars need repair, and we will face medical expenses so our goal should be to plan for these expenses and when they occur, deal with them with equanimity. I know, easier said than done, but really, it's about peace of mind and enjoying the lives we are giving ourselves.



 



BTDretire

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Re: Little Support and Helpful Advice, please!
« Reply #15 on: July 04, 2017, 04:16:38 PM »
Just sounds like a few delay maintenance items. The water main, not so much, but it's time came. I attempted retirement in Jan. and found I was very busy doing a bunch of delayed maintenance on the house, cars, and business. I got caught up, now our business is busy, so I'm back to working 20 to 30 hrs a week. I'll try again next year.