Author Topic: My FIRE number is over $2.0m - am I just not a moustachian....  (Read 24174 times)

edgema

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I am moustache ‘lite’ and live in a HCOL country (UK). When I run my numbers I get to a FIRE number way higher than is proposed by MMM because we will spend more and I believe market returns will be lower than commonly assumed. Unfortunately the reverse of the powerful maths that if you spend less you need far less to FIRE than you imagine, when reversed, and including lower return expectations, means that the FIRE number inflates aggressively.

I love the fundamental ideas of MMM but wonder if there are others who think similarly. I believe I am 2-years from FIRE but I fear the loss of income and my conservative nature risks me pushing out my date further than perhaps necessary. My life right now is necessarily complex and expensive as this allows me to over-earn so very hard for me to live the RE life first (e.g. $8,000, yes $8,000, in commuting costs) to know whether we will enjoy the spending restrictions (family of four, kids ages 6 and 5). I can see what I ‘should’ spend post FIRE on a spreadsheet (excluding a whole bunch of expenses I currently have) but I cannot live them so that produces fear.

Interested whether others who might feel the same on the bigger numbers. Also very interested to hear stories from those who felt they ‘hit the button’ too early or too late. 

Fomerly known as something

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #1 on: June 01, 2017, 04:05:02 AM »
Not necessarily not Mustacian, just way more conservative.  There are many of use here we just aren't as vocal. 

Also I think those of us with higher numbers also feel that once we FIRE we don't want to side hustle or have retaking a job if the make goes bad.

Khaetra

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #2 on: June 01, 2017, 04:07:11 AM »
I would suggest doing a case study and post your numbers there.  You also have small kids, who will grow into bigger kids who will want to do things (either cheap or expensive) or need things (braces?) so you need to add those numbers into the mix as well.

Linea_Norway

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #3 on: June 01, 2017, 04:20:12 AM »
I wouldn't calculate FIRE numbers based on what you're supposed to be spending in the future after FIRE, following MMMs lead. Rather use the number you spend today.
What you could do however, is adjusting your spending level today within your personal comfort levels and after a year calculate a new FIRE number, based on your new spending level. Let's first check if you really want to live this way.

For my FIRE number I have used the rounded up spending level from 2016 and hope that this is a realistic number.

About hitting the button too early: I get the impression that most people on this site are saving at least 1 more year, just to be on the safe side.

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #4 on: June 01, 2017, 04:40:26 AM »
I will do the numbers in USD (used to me bigger before GBP collapsed)

I have $2.3m in investment assets. $2.6m in value in investment properties with about $1.75m in equity and with around $840k in mortgage debt. I have a self invested pension which is $600k that I can access in 15 years (I am 40) but in the meantime is very flexible and invested mostly in equities. I do have a mortgage which is around $1500 a month (I know!) but it is super cheap at 2.1% so >50% of that number is paying down principal so really just a saving mechanism. I earn about 6% on the investment properties so worth keeping this debt for me.

I am in the fortunate position that I build on this quite quickly as I have been getting equity in the company I work for issued to me over time and gets released over time which means I can add to the pile about $150k a year after tax for the next two years just by sitting tight. I wholeheartedly do not want to be pushed into boring side gigs as time now spent working is highly likely worth so much more than whatever side gig I might find myself doing in the future.

I am very fortunate but nevertheless find it had to know when is the right time to pull the rip cord. My job is something that when out, particularly if for a couple of years, there is not likely to be a comparable way back in (investment management).

The tough (and great!) thing to evaluate is the (hopefully) long stretch ahead of life and costs of kids growing up. It is obviously unusual (except in these pages) to be even considering RE at this age, but would also be true in 5 years time when I am 45 when there would be virtually no scenario ends up badly. Mostly I just get to a conclusion to stick around but the life I am currently living is quite hard emotionally as to make these finances happen my working weeks are spent away from my family. I feel I am 100% in 'paying into future life' mode.

I have done the main moustachian things 1) downsized house and move to a LCOL location away from London (the ultimate HCOL) although the UK is comparatively expensive everywhere 2) I have never had expensive cars. That said, life seems to cost a lot. We like to eat out, we like to travel (in school holidays - ouch), we have family travel needs (Dad in Florida in school holidays - ouch). There is a lot which will get hacked out when I stop working and my tax situation will be massively improved but it is the spreadsheet that tells me this - not a bank statement!

What I fear is that to many we are already FI and am I just doing mental gymnastics out of fear and will just be doing the same with larger numbers in 2 years time. Just one more year...... it makes so much sense.....





UKMustache

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #5 on: June 01, 2017, 05:01:59 AM »
My wife and I live in the UK and our FIRE number is £700k (plus income from a rental property we already own).  I know you say repeatedly that it's a HCOL, London certainly is, but based on your current net worth I'd say you're using that as an excuse.

We live comfortably on £30k per year and save everything we earn above that (savings rate at present is circa 60%).
The budget includes a lot of holidays, we're going to Canada for 3.5 weeks later this year and we've already been to both Hamburg and Sorrento this year.

You obviously earn very good money (congrats) but hedonistic adaptation has set in and it seems you can't see the wood for the trees.

You would probably find a case study helpful, I would imagine there's costs you haven't even considered cutting which don't bring you any enjoyment at all.


former player

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #6 on: June 01, 2017, 05:03:48 AM »
The 4% rule works for USA but not the UK, where the rule is 3% - there was a table of the rates for different countries floating around here a while back, but I've lost track of it.

You would be FIRE if your expenses were moderated, and I think you know that.  So what is stopping you from moderating your expenses?  That's a family discussion.  I suspect that the big problem is the very comfortable life you as a family have become accustomed to.  If I'm right, it's a problem that is only going to become more entrenched the more years you work.

Personally, I could have retired earlier than I did (50) but just didn't realise it.  The actual realisation came with an out of the blue voluntary redundancy offer which has left me with an income two or three times what I usually spend.  When my now elderly dog departs this world I will be travelling widely on it.

Dicey

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #7 on: June 01, 2017, 05:39:50 AM »
Personally, I could have retired earlier than I did (50) but just didn't realise it.
Boom. FP nailed it.

You are simply afraid of failure. Perhaps because RE isn't exactly a societal norm (yet). Try reframing the question. Ask yourself how cool it would be to spend huge chunks of time with your family while your kids are young. If that doesn't do it for you, then just resign yourself to being a drone and get on with it. But remember, life is short, and nothing is guaranteed.

On another note, there are thousands of Americans who have enough money to pull the trigger, but are reluctant to do so because of our shitty healthcare system. From our perspective, you are rich indeed to have that base covered.

Linea_Norway

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #8 on: June 01, 2017, 05:47:41 AM »

I am in the fortunate position that I build on this quite quickly as I have been getting equity in the company I work for issued to me over time and gets released over time which means I can add to the pile about $150k a year after tax for the next two years just by sitting tight. I wholeheartedly do not want to be pushed into boring side gigs as time now spent working is highly likely worth so much more than whatever side gig I might find myself doing in the future.


This is exactly the way my husband thinks. Working in his field of expertise as a consult, either in a consultancy company or privately, earns better pay than any potential side-gig probably would. Our plan therefore is to live somewhere after FIRE where he can still do this work occasionally, a few hundred hours a year. He recently met an old pensioned colleague who still works 200 hours a year, but never in the summer. 200 hours is only 5 weeks a year. Our conclusion is that, instead of FIREing fully in 2019 on a minimum amount, we will rather be working parttime for a couple of years. We can easily live of 40% of our current income. So this way, working parttime (50%) would feel very much like FIRE, but still not reduce any stash that we have saved. And therefore leave more for the years after.

Playing with Fire UK

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #9 on: June 01, 2017, 07:01:41 AM »
The 4% rule works for USA but not the UK, where the rule is 3% - there was a table of the rates for different countries floating around here a while back, but I've lost track of it.

I remember seeing a table like that, it assumed that you only invested in your home country. If you invested in the US then 4% would be fine (if inflation was very different then that would need to be considered) living in the UK. It makes sense to have a slight home bias, but investing 100% in the UK is a bad idea for most people IMO.

I support excluding costs that are related to working, but not excluding costs that involve cutting back or 'sacrifice'. I can't see Edgema buying a season ticket in FIRE for the fun of riding the trains (or is it parking fees, hotels?), so there is no need to account for it in the stache. On the other hand, if you currently pay for a cleaning service and eat every meal in a restaurant then you may intend to start cooking and cleaning in FIRE, but you don't know whether you'll actually make the change so safer to account for the costs in the stache. Even more so when there is a family involved, you might be fine with cooking but find that your family don't enjoy eating it.

I lean towards FIREing sooner rather than later - I can fix running out of money by going back to work but I can't fix running out of life by spending more money. I would have FIREd a long time ago on those numbers. Edgema is certain about not going back to work, so needs to have a bit more of a buffer. I think the spending is having more of an impact on delaying FIRE than the estimate for investment returns.

Spending the entire week away from my family would make me miserable, I'd probably overspend to compensate for this. But I suspect (I hope!) that my family would happily give up some comforts if it meant that they got to see me. I cannot fathom what I could buy with a $3M stache that I couldn't buy with a $2M stache that would give me more joy than having complete control of my time. I'd be interested to know more about what you spend and what value it brings to your life.

Having said all that, if you honestly review your spending and decide that your spending is making you happier than FIRE then crack on. You do you. MMM is about being aware and mindful of money as much as it is about cutting costs.

boarder42

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #10 on: June 01, 2017, 07:40:12 AM »
every person thats FIREd around here that i've seen post about it has said they didnt pull the plug early enough.  everything has been far safer and people earned income typically even after FIRE.  that said our number is pushing 2MM we just use the concepts here to cut back in areas we dont get value and to save the correct ways, also for the withdrawal startegies.  that said we have high income jobs in LCOL so we will hit our number by 37 at the latest.

patchyfacialhair

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #11 on: June 01, 2017, 07:41:31 AM »
Our FIRE number is $1.5MM invested (in 2017 dollars) and a paid off house. Don't feel bad just because you're not giving it up at $600k. However, please continue to optimize as you see fit. Do we have waste in our budget right now? Absolutely, but we'll slowly continue to optimize while at the same time enjoying life and doing the best we can at work.

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #12 on: June 01, 2017, 07:55:34 AM »
Boarder 42. Agreed, most wish they did it early, however this has probably been assisted by the fact that equity markets have moved up a lot over the last few years and more than can be expected over the long term, so the equity heavy strategies generally recommended by FIRE have been particularly fruitful.

The "class of 2018" thread I find very interesting sort of on this issue as there are lots of people writing that if markets rise 10% they are done. My view is that if you are that sensitive to equity market moves (i.e. if markets move down 10% are you then not done? What if they go down 20%) then you are nowhere near FIRE.

boarder42

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #13 on: June 01, 2017, 08:11:51 AM »
Boarder 42. Agreed, most wish they did it early, however this has probably been assisted by the fact that equity markets have moved up a lot over the last few years and more than can be expected over the long term, so the equity heavy strategies generally recommended by FIRE have been particularly fruitful.

The "class of 2018" thread I find very interesting sort of on this issue as there are lots of people writing that if markets rise 10% they are done. My view is that if you are that sensitive to equity market moves (i.e. if markets move down 10% are you then not done? What if they go down 20%) then you are nowhere near FIRE.

on this notion i subscribe a bit to kitces and then the Mad Fientists analysis on Kitces analysis.  basically if you take the inverse of the shiller PE -.05% you get a good historic representation of what the SWR would have been historically for you at that given shiller PE ratio to make your money last forever.  i'd take this as an indicator and not a 100% rule to follow but i plan to evaluate the shiller PE when i plan to retire and decide from there what to do.  my current assessment if i were at my number today is that i'd work til the end of this year. and probably work 50% of next year ... b/c i get huge perks for working half a year and retiring on the 2nd day of a year.   and it would build up another 2-400k in my stash by just working that much longer at that point.  1 year for possibly 400k in wealth .. thats hard to pass up. but again i'm in a unique situation where i have to retire on the 2nd or give up a lot of money. and by working half a year i can get a pile more.

wenchsenior

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #14 on: June 01, 2017, 08:21:37 AM »
Meh. We are in the United States and our FI number runs between 1.5 and 2.0 million, depending on our circumstances (health care situation and location where we are likely to move) in about 5 years when we get into that 'stache territory.  I think a lot of young people on this board underestimate how much health care and long term care might cost.  Or maybe they don't, but personally I won't be able to relax and enjoy FI without accounting for it.  Also, we have family we are helping to support, which adds a couple hundred thousand on to our needs.

I am hating my job with a passion right now, and really wish we could bring ourselves to bail on less, but it just isn't happening.

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #15 on: June 01, 2017, 08:26:17 AM »
Imagining spending now is the sum of;

1)   Post FIRE spending
2)   Spending indirectly related to living our current life
3)   Direct spending related to living our current life

The 3) is definitely a bigger number of 2) and 3). The driving / commuting / lodging costs of coming up to London from Devon come in at about £1,350 a month. I swallow this as part of the FIRE stash came from selling and expensive house near London and halving the house cost by buying in Devon. The short (ish) cost of doing this move is my crazy travel schedule at the moment. Because I am a high tax bracket earner 3) is equivalent to £28,800 in gross earnings annually (painful to write)! But my salary covers this and current living costs so my bonus payments and stock amounts can get tucked away.

No doubt there is a portion of 2) but way less than many of my peers who have continued to see massive lifestyle inflation. 2) also comes about as my wife is a single mum in the week so we both have a fraction of the time to optimize in the way I believe we will after FIRE. My view has been that the present is not the time to wring out time consuming efficiencies given that this is often what the trade-off is (don’t eat out – plan your weeks meals and cook yourself) even if I believe in these efficiencies post FIRE. Going too far now would be bad for my marriage.

All that said I still struggle to nail down 1) or what portion of 2) we will actually extract. How much will we save by optimizing? Our kids are obviously at school so holidays are during school holidays which is expensive. Some of the travel hacks just aren’t relevant when you are nailed to the school schedule. Furthermore, I have been lucky enough to enjoy some amazing experiences growing up myself: I have skied, sailed and other expensive pass times that I want my kids to enjoy. We went skiing with them this year for the first time and it was an absolute joy for them (and for me watching). Perhaps some would say the kids would have just as much fun on a cheap local holiday, and perhaps they would be right, but I don’t believe there is a fixed line which decides what is the ‘right’ or ‘wrong’ way to spend.

On the family point I hate not seeing the little ones in the week but the whole idea of  this is to be fully engaged at a still relatively young age (say 7/8) rather than the ‘commuter’ standard for London where many families have essentially absent Dads (or both parents) in the week anyway as they leave at 7am and return at 8pm (very common). Sacrifice now for reward later. What gives more at the moment is my adult friendships as the weekends are fully family dedicated.

I am more scared of worrying about money in 10 years having been retired 10 versus being even more comfortable and ‘only’ having been retired 7/8 years when I am 50. All great problems to have and I certainly hope none of this comes across as a whinge. I am very lucky but want to live a mindful life.

trollwithamustache

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #16 on: June 01, 2017, 08:31:48 AM »
nope you're not alone. I get the sense a lot of people on the boards here are in a similar position.

MMM is a an extreme, but a very possible and reasonable extreme. For me he formalized a boundary condition and I while I had a relatively high savings rate/frugal habits I didn't have a plan and philosophy the way he does.   Also with multiple kids and a desire to help with college, yeah I am looking at needing a bigger number too.

Regardless, at the end of the day, your number and your spreadsheet have to make sense to you.

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #17 on: June 01, 2017, 08:40:11 AM »
Wencsenior. I agree on the underestimation on some of the costs later in life and would also throw in kids (if people want them) as well. The fact that a 27 year old is even thinking about all this is great but I think a lot is missed thinking you are FIREd at $700k or whatever. While financially literate at that age I would have missed a lot of spending to come (or maybe that is the point – if I never had it, I wouldn’t be spending it – argh brain circularity). It may never come to it but I would like to at least be able to help out my kids with college or buying their first flats. I have been very fortunate to earn what I earn and I would like to pass on some of that luck so that perhaps they will be able to look past purely money when choosing what they do with their life. If that means another couple of years at the grindstone that is fine. Just don’t what it to be a rolling two years away at all times!

Neverrun. The thought of matched betting or some other horrible pursuit to skim a few dollars is very unappealing. Staying in my job is far more preferable.

Boarder42. I am in a similar boat where there are a couple of key dates (Dec23 and Mar 31) where financial things unlock for me roughly at the amounts you also have. I know I cannot take the volatility having too much equity, hence the property (which maybe just hides the volatility). So I actually have pretty good visibility on a good part of my income (assuming they stay relatively rented). My issue is more about what my spending reduction will actually look like.

Generally, quite glad not to be run out of town as I know the numbers are much bigger then much of the MMM or similar writings. 

boarder42

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #18 on: June 01, 2017, 08:42:52 AM »
MMM tends towards a younger higher income crowd and i would say many are in a FIRE range higher than 1.5MM ... cord pulling is one of the largest risks to FIRE when you have golden handcuffs.

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #19 on: June 01, 2017, 08:53:03 AM »
trollwithmustache. Perfectly put. A boundary condition generated and a philosophy to follow/adapt to be mindful of spending / spending inflation and the reasons for it happening. Has had a huge impact on my life (downsizing house for example) and cemented an existing desire not to trundle on until 65 while presenting ways to do that. I want to be 2017 MMM where I can drop $30k on an out house and $20 risked on Etsy, as that is fun. Less fun if you are 'model' MMM that is nearly 10% of your FIRE money.

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #20 on: June 01, 2017, 09:12:38 AM »
Dicey – “You are simply afraid of failure”. I am indeed afraid of failure when it is currently my choice when to do this.

My nightmare scenario is say 5-7 years from FIRE that we work out that we don’t have enough. This wouldn’t be running out of money at that point, but some other calculation (say a recession and decline in asset prices) which starts to make you worry about money (extremely corrosive). Cue lack of sympathy from friends and family who always thought you were a crackpot for thinking you could retire in your early 40s. Cue “I told you so” from ex-colleagues who resented your ‘retirement’ anyway and enjoy informing you that there is no route back in. Cue scraping around for side gigs or jobs which pay a fraction of what I currently earn/save. I could go on.

Don’t get me wrong. If I was fired tomorrow I reckon I could make this all work and in most situations it would be great but I get back to the whole… just one more year and the above becomes less and less likely.

There is no correct answer but as I am fortunate that my pile builds quite quickly due to high pay I end up at buckling in for a little longer.

dreams_and_discoveries

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #21 on: June 01, 2017, 09:20:14 AM »
I agree there are different levels of observance, it's not yet an all or nothing cult.

I'm UK based, single and aiming to FIRE on £750k @ 40, to be honest if you've got a family your numbers aren't that far away from mine.

Personally I'm not too worried about running out of money, I can live cheaply, or get a job if needed, I can be very flexible. It's likely I'll be uber-careful with money for the first few years, and see how things work out. I'll badge my RE as a sabbatical, which isn't that unusual and would allow me to jump back into the job market if I felt like it.

AnswerIs42

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #22 on: June 01, 2017, 09:38:04 AM »
I have a self invested pension which is $600k that I can access in 15 years (I am 40) but in the meantime is very flexible and invested mostly in equities.
Do be careful of the lifetime allowance. If it's at £465k already, and we get 5% real returns over the next 15 years, then that'll be £968k in today's money then, and you're getting pretty close to the £1m limit, even with no further contributions. It might be worth continuing to make contributions if there's a really good reason (employer matching, avoiding top rate tax or personal allowance withdrawal), but keep an eye on it, and do the sums.

Presume you're also using S&S ISAs?

edgema

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #23 on: June 01, 2017, 09:58:56 AM »
Good advice. I hope you are right and we get 5% real and I would look to de-risk then but for the reason you say I am unlikely to put much more in for the moment.  Presently concentrating on paying down the mortgages on the investment properties rather than ISAs given the initial tax position is the same, have plenty of equity exposure and don't much like the equity market level, and don't want to get caught by the risk of a full removal of mortgage deductibility on investment property (even in a company). 

I just refreshed my self on the protections available and saw this in a report "A 28-year-old might reasonably expect to retire at age 70, as increasing life expectancy means Britons work longer and have an additional wait for their state pension". Funny how this looks so crazy from my current point of view.

FireHiker

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #24 on: June 01, 2017, 10:18:30 AM »
Our FIRE number is 2.5M not including our home equity (we will sell the house, retire to something much smaller, paying cash with the home equity...and probably paying for two kids' college out of that equity as well). I would probably be comfortable with 1.25M, but my husband's number is 2.5M so that's where we are now. You are definitely not the only one here with a higher target for your FIRE number. There is no one-size fits all plan here.

scantee

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #25 on: June 01, 2017, 10:53:23 AM »
Quote
I agree on the underestimation on some of the costs later in life and would also throw in kids (if people want them) as well.

People underestimate the later-in-life costs, but they also underestimate the income they end up bringing in even after they've retired. Most people here don't just retire, full-stop, with no other income earned ever again. More often, they have a partner who is still working full- or part-time or they end up continuing to make at least some money through low effort endeavors.

I think this phenomenon is why a lot of people here end up feeling like they should have left earlier. Let's say you have $80k/yr in expenses. That seems like a lot on its face, at a minimum it requires the $2MM stash you already have. But now consider a scenario where you (and your partner, for those that have one) aim to earn just $20k each year. That's not a lot, most professionals can do that fairly easily without a ton of effort. At that point, you only need a $1.5MM stash to support your expenses. And if you can earn $40k? You only need a stash of $1MM.

This phenomenon is why I am aiming to downshift as soon as possible, rather than retire fully.  I would rather build up my stash to meet a basic threshold, downshift to work as a little as possible to cover just my expenses, and let my stash sit and grow until I need it, even if I'm not adding much or anything at all to it.

shawndoggy

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #26 on: June 01, 2017, 11:05:30 AM »
cord pulling is one of the largest risks to FIRE when you have golden handcuffs.

This is the most succinct statement in the whole thread, and hits the nail perfectly!

To be SURE of fire, my number is somewhere north of $2.5M... though that's a conservatively high number and could well result in oversaving.  But I want to be able to spend and travel in retirement and not eek by on a pitance (not moustachian, I know!)

Problem being if I leave my current position for a few years, "getting back in the game" would be VERY difficult, and I'd probably have to work just as hard to make 25-35% of what I do now.  Shoot even more than a week at a time is actually not really possible.  A part time "side hustle" just isn't in the cards.

So knowing that we have nearly enough now to make a go of it (we are marginally FI right now), and that hanging on for a few more years will provide a much greater margin for error, makes hanging on a little longer totally worth it.

When I pull the cord, there's no turning back.

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The "class of 2018" thread I find very interesting sort of on this issue as there are lots of people writing that if markets rise 10% they are done. My view is that if you are that sensitive to equity market moves (i.e. if markets move down 10% are you then not done? What if they go down 20%) then you are nowhere near FIRE.

zactly.  I want to know that a 30% decline in years 1-5 won't materially interfere.

RedmondStash

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #27 on: June 01, 2017, 11:08:44 AM »
Edgema, are you sure you want to retire? I think some people chase FI for peace of mind, but not RE so much, either because not working makes them nervous or because they fear running out of money.

I wonder if some of your hesitancy comes from not being sure what a post-FIRE life would look like, not just financially but daily.

Beyond all that, though, there's nothing wrong with padding your stash a bit more and succumbing to OMY (one more year) syndrome. The point of FIRE is to maximize happiness, and if it's making you fret, it's not accomplishing that goal. Maybe when you do finally retire, you'll kick yourself for not doing it sooner, but maybe not. We're all different.

My suggestion is to stop wondering what other people will think or whether you have enough money for the lifestyle you want, and just ask yourself: "What kind of life will make me happy?" Taking into account your family's needs and desires too, of course. It's important to identify the real goal of happiness, not the artificial sub-goal of collecting enough money.

Good luck.

honeybbq

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #28 on: June 01, 2017, 11:23:49 AM »
Not necessarily not Mustacian, just way more conservative.  There are many of use here we just aren't as vocal. 

Also I think those of us with higher numbers also feel that once we FIRE we don't want to side hustle or have retaking a job if the make goes bad.

I agree. My number is higher than many for many reasons - being more conservative, wishing to leave an estate, having goals or dreams that require money (e.g. sailing around the world, etc), wishing to pay for children's college. It doesn't mean you don't have a mustache. Just means your mustache is different.

EnjoyIt

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #29 on: June 01, 2017, 11:32:26 AM »
Not necessarily not Mustacian, just way more conservative.  There are many of use here we just aren't as vocal. 

Also I think those of us with higher numbers also feel that once we FIRE we don't want to side hustle or have retaking a job if the make goes bad.

I agree. My number is higher than many for many reasons - being more conservative, wishing to leave an estate, having goals or dreams that require money (e.g. sailing around the world, etc), wishing to pay for children's college. It doesn't mean you don't have a mustache. Just means your mustache is different.

Same here.  I actually expect slow lifestyle creep over the years after FIRE as I get older and unwilling or worse unable to do certain things. I don't want to sleep in a youth hostel at 65 years old nor do I want to go on a ladder and clean my gutters. Plus who knows if healthcare costs will keep rising faster than inflation so I am trying to build that into my FIRE.  If all it takes is just another 1-2 more years than I think it is worth it.  If I am wrong and die a multimillionaire I don't think it will be the end of the world.

Rife

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #30 on: June 01, 2017, 11:33:24 AM »
As suggested, I also tend to look at FI and RE as separate. FI means our jobs have less control over our lives than they do now cause we can walk away and be ok if needed. That doesn't mean we will pull the trigger and retire the moment our spreadsheet declares us FI. As you mentioned risk is a big part of it. Another is just a desire for a higher standard of living beyond the minimum. The second is not mustachian, but is realistic. I don't want to feel I am just scraping by the rest of my life cause I didn't work a few more years.

I also think people become much more conservative toward retirement as they get older. At 30, you retire but also know you could rejoin the workforce, ramp up a side hustle, or otherwise compensate if it doesn't work out perfectly. Most will probably end up with some sort of business or money making hobby anyway. If you retire at 60 it is far more difficult to fix if you are off course 5-10 years later.

arizonawildcats

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #31 on: June 01, 2017, 11:44:47 AM »
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Our FIRE number is 2.5M not including our home equity (we will sell the house, retire to something much smaller, paying cash with the home equity...and probably paying for two kids' college out of that equity as well). I would probably be comfortable with 1.25M, but my husband's number is 2.5M so that's where we are now. You are definitely not the only one here with a higher target for your FIRE number. There is no one-size fits all plan here.

I can very much relate to this response.  The $1.25m in investible assets floor gives you approximately $37k to $50k a year in inflation adjusted income.   This will be our lower band FIRE.   The higher band FIRE will be $2.5m - $3.0m in investible assets that will provide $75k to $120k in inflation adjusted income.  We are however half way through the college expenditures and will not consider FIRE until it’s behind us. 
« Last Edit: June 01, 2017, 11:47:55 AM by arizonawildcats »

shawndoggy

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #32 on: June 01, 2017, 11:51:20 AM »
I can very much relate to this response.  The $1.25m in investible assets floor gives you approximately $37k to $50k a year in inflation adjusted income.   This will be our lower band FIRE.   The higher band FIRE will be $2.5m - $3.0m in investible assets that will provide $75k to $120k in inflation adjusted income.  We are however half way through the college expenditures and will not consider FIRE until it’s behind us.

Yep.  I say I'll know I've been a successful when my kids are paying for their own phones, but in reality that should be that they have their own health insurance.

arizonawildcats

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #33 on: June 01, 2017, 12:06:58 PM »
Quote
To be SURE of fire, my number is somewhere north of $2.5M... though that's a conservatively high number and could well result in oversaving.  But I want to be able to spend and travel in retirement and not eek by on a pitance (not moustachian, I know!)

Problem being if I leave my current position for a few years, "getting back in the game" would be VERY difficult, and I'd probably have to work just as hard to make 25-35% of what I do now.  Shoot even more than a week at a time is actually not really possible.  A part time "side hustle" just isn't in the cards.

So knowing that we have nearly enough now to make a go of it (we are marginally FI right now), and that hanging on for a few more years will provide a much greater margin for error, makes hanging on a little longer totally worth it.

I totally agree.  I have worked my entire life to be in the current “golden handcuffs” situation.   If I left now, I would be lucky to make 30% of my existing compensation after being away for a long time frame.  In addition, I really enjoy my job which places me in the FI camp for "peace of mind" purposes.   I learned very early on if you are in a job you do not like, make a career change.   You then can then consider early retirement for the right reasons. 
« Last Edit: June 01, 2017, 12:09:08 PM by arizonawildcats »

SnackDog

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #34 on: June 01, 2017, 12:22:16 PM »
C'mon over to bogleheads.org.  One guy there says he needs $75MM to retire.  Many others are in the $5-10MM range.  Different strokes for different folks.

honeybbq

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #35 on: June 01, 2017, 01:16:08 PM »
C'mon over to bogleheads.org.  One guy there says he needs $75MM to retire.  Many others are in the $5-10MM range.  Different strokes for different folks.

Hahaha I missed the 75MM thread. Link? Most are in the 3-5 range I'd say but yes, in general, add a 0 to a MMM'rs number to equal a BH'r.

Cassie

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #36 on: June 01, 2017, 02:07:19 PM »
We semi-retired at 58 and 53. We both work some doing consulting, etc (about 10 hours/week) for me. His tends to be full-time and then long periods with no work. WE have found in the past 5 years that we are spending less in some categories but lots more in others like health insurance, traveling, going out to eat, etc. This is because we are not tired all the time from working. WE want to enjoy while we can because we have seen people die in their 50's-60's.  I think it is better to work a little longer then necessary then to quit to soon and be sorry.

meadow lark

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #37 on: June 01, 2017, 02:12:10 PM »
For me, I got to the point where I really really really wanted to RE.  More than the things a higher NW  could give me.  And that is how I made the decision.  Of course I had numbers to support it, but if I didn't really, really, really want to, I would wait a couple more years.  You don't really, really, really want it.  That's fine.  There is nothing wrong with you working 2 more years.  Or 10.  Or 50.  Just figure out what you (and your wife, of course) really want.  You've got FI.  You get to decide the RE part.

daverobev

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #38 on: June 01, 2017, 05:57:57 PM »
UK isn't HCOL. The South East maybe, but ONLY because of housing costs. Go anywhere else in the country and you'll find that the UK is pretty damn cheap, overall. I mean, petrol? Sure. But it's not that much if you don't drive all over the place all the time.

Remember, you have the NHS. You have the state pension.

So, don't do 4%? Sure. Do 3.5%. Or do adjusted - keep a year or two of cash, and pull your 4% only in good years, to replenish your cash supply; in down years run the cash down.

Yes you need to post a budget.

Playing with Fire UK

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #39 on: June 02, 2017, 12:44:57 AM »
It is totally okay to be afraid of failure, but it sounds like you're afraid of something else as well:

Dicey – “You are simply afraid of failure”. I am indeed afraid of failure when it is currently my choice when to do this.

My nightmare scenario is say 5-7 years from FIRE that we work out that we don’t have enough. This wouldn’t be running out of money at that point, but some other calculation (say a recession and decline in asset prices) which starts to make you worry about money (extremely corrosive).
This is a real problem, and if you know that you are the type to get worried if there was a recession, then your stache needs more padding.

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Cue lack of sympathy from friends and family who always thought you were a crackpot for thinking you could retire in your early 40s.

So what? Either don't tell them or tell them to go and fuck themselves.

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Cue “I told you so” from ex-colleagues who resented your ‘retirement’ anyway and enjoy informing you that there is no route back in.

Your stache needs padding if you can't get back into your industry. But who cares what your colleagues think? They sound like arses.

If you go down the MMM route, people are going to think you are a crackpot (my family tell me this to my face, but they love me and we have friendly disagreements on how essential Sky is), and they will resent you (my colleagues resent when I suggest going for a drink the day before payday), and they might even tell you that your plan is doomed to fail. But that only changes your plan if you let it.

If you are afraid of the mean things people might say then try to work on that first. Give fewer shits; see the fear and insecurity that is behind their doubt; make friends with nicer people - whatever works for you. But don't let your fears of what some arse MIGHT say about a scenario that MIGHT occur stop you from doing what you really want. Most people are not arses, they either want you to succeed or are too caught up in their own shit. Arses will find something awful to say to you anyway, don't live in fear of them.

Your commute sounds brutal. I commend the effort that must take. If it was me doing that I'd be looking to quit yesterday. If it was my parent doing that I'd prefer to see them more and have fewer presents.

Linea_Norway

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #40 on: June 02, 2017, 05:06:12 AM »
In worse case, when it turns out in a few years of FIRE that you don't have enough stash, you could always work in some parttime job. It wouldn't be the end of the world to work 2 days a week, would it? And I'm thinking any kind of job would do.

Dicey

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #41 on: June 02, 2017, 01:01:34 PM »
^^She's right.^^

Oh, hey, Linda, I was just looking for you. I think you're needed on this thread:

https://forum.mrmoneymustache.com/welcome-to-the-forum/trip-to-norway/

Bateaux

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #42 on: June 02, 2017, 07:15:11 PM »
2M invested with no debt is the current goal.  We're now 85% of the way.  June 2019 is the target date.  Unaffordable health care or a deep recession is about the only possible derail to that goal.  The original goal was 1.5M and FIRE 2018.  We're past 1.7M now and no debt. Decided to add 500k to the goal for health care in the future.   Hope to live on 3% withdrawal we'll see.

undercover

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #43 on: June 03, 2017, 03:42:54 PM »
This phenomenon is why I am aiming to downshift as soon as possible, rather than retire fully.  I would rather build up my stash to meet a basic threshold, downshift to work as a little as possible to cover just my expenses, and let my stash sit and grow until I need it, even if I'm not adding much or anything at all to it.

+1. Currently doing the same and will even likely go back to work full time (or try to start something) as a result of gaining so much energy by having much more time to do what I want to be doing. Semi-FI and coasting to full-FI while retaining most of your free time is the way to go in my opinion.

It doesn't need to be all or nothing. If you do flat out "retire", there's nothing saying you can't or won't ever go back to work. If you like active income as security but despise your current commute/current situation, there's nothing saying you can't go part time or find a more flexible gig to go ahead and enjoy the fruits of your labor now. OP is well over the $2M mark, so what's even stopping them?

frugledoc

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #44 on: June 03, 2017, 05:38:57 PM »
I am moustache ‘lite’ and live in a HCOL country (UK). When I run my numbers I get to a FIRE number way higher than is proposed by MMM because we will spend more and I believe market returns will be lower than commonly assumed. Unfortunately the reverse of the powerful maths that if you spend less you need far less to FIRE than you imagine, when reversed, and including lower return expectations, means that the FIRE number inflates aggressively.

I love the fundamental ideas of MMM but wonder if there are others who think similarly. I believe I am 2-years from FIRE but I fear the loss of income and my conservative nature risks me pushing out my date further than perhaps necessary. My life right now is necessarily complex and expensive as this allows me to over-earn so very hard for me to live the RE life first (e.g. $8,000, yes $8,000, in commuting costs) to know whether we will enjoy the spending restrictions (family of four, kids ages 6 and 5). I can see what I ‘should’ spend post FIRE on a spreadsheet (excluding a whole bunch of expenses I currently have) but I cannot live them so that produces fear.

Interested whether others who might feel the same on the bigger numbers. Also very interested to hear stories from those who felt they ‘hit the button’ too early or too late.

Apart from London and the south of england, most of the UK is not HCOL.
Also, you get free healthcare, major money saver.

So many londoners/southers could easily FIRE just buy relocating, and they are not even rich in London.

Fomerly known as something

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #45 on: June 03, 2017, 05:46:00 PM »
I'm also in a career that when I pull the cord there is no going back.  I could find another job if necessary but I'd also have to figure out what job that would be.  I haven't figured it out yet.  I don't have my 'stach up to my conservative preferences so I stay employed. 

ETA:  I am also in a position/industry where you can't do part time so it's all or nothing or find a new job if I want to do that.
« Last Edit: June 03, 2017, 05:52:25 PM by neverrun »

Tyson

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #46 on: June 03, 2017, 09:08:10 PM »
$100k expenses per year and no house payment?  What the hell are you people spending your money on?

CCCA

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #47 on: June 03, 2017, 11:09:01 PM »
$1.5M is our minimum FIRE number but $2M is our safe number.  We are in a HCOL area in the SF Bay Area.  We've been close for awhile so I've downshifted to part time work.  We're close to our safe number now so I'll be going to zero-time at the end of 2017!

Our spending is about $80k/yr but last year about $50K of that is housing and childcare.  But we also want to pay for college for the two kids which is currently an unknown expense and healthcare is also a big unknown, hence the desire for a bit of a buffer. 
« Last Edit: June 03, 2017, 11:11:27 PM by CCCA »

skip207

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #48 on: June 04, 2017, 04:46:04 AM »
I am in the north of England and my target is £1M NW (excl primary residence) for FIRE. 
I can see how you could easily need £2M in the London area.


oneyear

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Re: My FIRE number is over $2.0m - am I just not a moustachian....
« Reply #49 on: June 13, 2017, 12:24:08 AM »
Just reading through this now and in a fairly similar situation. I'd rather work one more year now than worry about money in 10. Our target and current amount is a lot less than yours but we live in the armpit of the UK and our costs other than a few luxury items have never really inflated since Uni.

I've only been investing the guts of 5 years now and in that time the markets have only been in bull mode. My big and probably only concern is retiring into a bull market, so I'd rather be completely cautious or ride some of it with a continuation of earning. Currently 34 with 110% of my FIRE target saved.

Does your wife have a SIPP? If not even as a non-earner, she can put £2880 in there tax free and the government adds their bit. Also make sure you're both filling up your S&S ISA's. You're probably doing both, but its often overlooked.

 

Wow, a phone plan for fifteen bucks!