Author Topic: Addicted to cash - too many options  (Read 1539 times)

drachma

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Addicted to cash - too many options
« on: May 10, 2018, 03:40:32 PM »
So I have been maxing my IRA, 401k and HSA for years now and all of it is invested. In the past year or two I got out of student loan debt and so all of my extra cashflow has been going to beef up my emergency account... but I can't bring myself to invest the extra! I've got over 40k sitting idly now.

Emergency Fund is 15k (covers 1 year expenses) and the rest of it (additional 28k now) I have been earmarking for various life-changing expenses, and leaving as cash. Problem is, I'm not sure about any of them. So I just keep saving cash. Some of the options are:

1. house down-payment
2. back-to-school fund (software)
3. alternative housing paid in full (full time #vanlife or property for offgridding)
4. alternative career training (mountain guiding)

each of these items costs about 20k. so I don't have enough to do both (or all 4!) and maintain an emergency fund.

you will also see that there are really 2 priorities here; housing and career switching. And each of those priorities has the practical/safe option and the unconventional option.

I plan to be frugally FI in about 5 years if I stick with this job. if I wanted to be FI at a level that would allow me to pursue all of my primary interests in a full capacity it would be about 9 more years though, and that's too long in this shitty job undesired career. I'd be 40. Hence the hedge-my-bet plan of getting additional education in software

I originally intended to put this in the Investing forum, but since I already understand the financial drawbacks of having a large cash position decided to move it here. My problem is really that I don't know WTF to do with my life and I keep telling myself "well just a little bit more cash so you can do that thing" and every time I get close to my next savings target I move the goalposts another 5 or 10k.

stoaX

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Re: Addicted to cash - too many options
« Reply #1 on: May 10, 2018, 04:12:15 PM »
I can see how it's tough to take cash that's sitting idle and invest it - the stock markets all seem pretty high right now, if interest rates go up bond prices will fall, and cash investments like CDs have underwhelming interest rates.   But if you're cash is earning next to zero now, a 2% CD is better than nothing.

I suppose buying a property that you could rent out might be an option - if you want to be a landlord and if you buy it where you want to pursue  your FIRE dream of mountain guiding.    And tell me more about mountain guiding - can you really make a living doing that?

robartsd

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Re: Addicted to cash - too many options
« Reply #2 on: May 10, 2018, 05:26:54 PM »
15K annual expenses is really low. I'm assuming that is the bare-bones level that you can reach in 5 years at your current job. Since you must already have a low cost housing solution to keey our expenses that low and certainly want to earn more money in a new career, I'd lean heavily towards choosing one of your new career paths and investing the money in your education. If 28k is more than you need for this education, I'd look to stick the remainder in an investment until you've had a chance to start your new career and decide which way you want to go with housing.

2Birds1Stone

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Re: Addicted to cash - too many options
« Reply #3 on: May 10, 2018, 05:45:14 PM »
Oh boy, I can certainly relate to you. For many years I didn't make enough to max out my 401k, so when I finally did, I thought it was good enough. Then I got to a point where I was maxing all possible tax deferred space, and the cash kept building up. Now I'm sitting on a pile of it, and I have an aversion to dumping it into the stock/bond market.

This is more of an emotional hurdle than a logical one. Best of luck with whatever you decide!

SwordGuy

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Re: Addicted to cash - too many options
« Reply #4 on: May 10, 2018, 06:08:06 PM »
I hope you aren't thinking of going back to college full time for additional software training.   If you're a "regular application programmer" it would be a waste of money.   Get specific spot training and practice at home.

If you're in a very specialized field or switching to same, then ... maybe.  But probably no good payback unless you're grossly underpaid now or work in the field longer than you seem to want to.

drachma

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Re: Addicted to cash - too many options
« Reply #5 on: May 11, 2018, 08:05:52 AM »
thanks for the replies all.

I hope you aren't thinking of going back to college full time for additional software training.   If you're a "regular application programmer" it would be a waste of money.   Get specific spot training and practice at home.

If you're in a very specialized field or switching to same, then ... maybe.  But probably no good payback unless you're grossly underpaid now or work in the field longer than you seem to want to.

I am an engineer but electrical, not software. I get a small amount of coding exposure at work but nothing professional-level. The field I am in simply doesn't have the kind of work opportunities I am looking for to live the kind of lifestyle I want. I think I would be happier doing a (high quality) software bootcamp and getting a bottom-rung coding job. At least then I can find jobs in locations that I want to live near. If they pay less (probably far less), so what, at least I'll be happier.

@stoaX, to buy property is to tie myself to this location or a similar location near where electrical engineering work is; these are often high-cost areas (e.g. literally silicon valley) and nearly ALL of the ones that I have experience for are pretty far from the mountains. You can make a living mountain guiding. Not usually one that allows you to buy a house with the white picket fence and 2.5 kids. The kind of living where you are living in a tent or vehicle 6-9 months out of the year guiding and climbing. I know a guy in his 50s who's been doing it professionally for years and earns decently middle-class wages, but he's the real deal (summitted/guided everest multiple times), been doing it since he was 20, started his own guiding company which was successful, etc.

@robartsd 15k is my emergency level of expenses - enough to keep a roof over my head and food while job-hunting. Right now I spend about 24k, but that would drop significantly if I wasn't working (and then you have to add healthcare back in so it's a wash). My 5-year FIRE target is assuming ~25k expenses. Career change is more or less giving up on FIRE in exchange for more enjoyable work and a better lifestyle.

civil4life

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Re: Addicted to cash - too many options
« Reply #6 on: May 11, 2018, 08:49:02 AM »
So I have been maxing my IRA, 401k and HSA for years now and all of it is invested. In the past year or two I got out of student loan debt and so all of my extra cashflow has been going to beef up my emergency account... but I can't bring myself to invest the extra! I've got over 40k sitting idly now.

Emergency Fund is 15k (covers 1 year expenses) and the rest of it (additional 28k now) I have been earmarking for various life-changing expenses, and leaving as cash. Problem is, I'm not sure about any of them. So I just keep saving cash. Some of the options are:

1. house down-payment
2. back-to-school fund (software)
3. alternative housing paid in full (full time #vanlife or property for offgridding)
4. alternative career training (mountain guiding)

each of these items costs about 20k. so I don't have enough to do both (or all 4!) and maintain an emergency fund.

you will also see that there are really 2 priorities here; housing and career switching. And each of those priorities has the practical/safe option and the unconventional option.

I plan to be frugally FI in about 5 years if I stick with this job. if I wanted to be FI at a level that would allow me to pursue all of my primary interests in a full capacity it would be about 9 more years though, and that's too long in this shitty job undesired career. I'd be 40. Hence the hedge-my-bet plan of getting additional education in software

I originally intended to put this in the Investing forum, but since I already understand the financial drawbacks of having a large cash position decided to move it here. My problem is really that I don't know WTF to do with my life and I keep telling myself "well just a little bit more cash so you can do that thing" and every time I get close to my next savings target I move the goalposts another 5 or 10k.

You have some very polarizing goals/ideas.

Buying a home vs van life
Software education vs mountain guide

I think the bigger questions is probably what you want in life as a whole.  Are you an adventure traveler (van life & mountain guide) or a more typical 9-5 with house.  I think exploring which of these you feel more passionate about.  I am guessing here...but are you really wanting the adventure traveler, but afraid of leaving your comfort zone of working and having a home?  Maybe start exploring the traveling pieces with some camping vacations to possible destinations you are considering.

I would say hold off on the house buying just because it is very permanent for someone considering big changes.

It seems like your FIRE goals are on a fairly short horizon 5 years out.  To me that would not seem worth it to start a career change.

I would consider maybe taking your time learning the software stuff on your own and maybe look into creating a side hustle that may become your FIRE career.  I am thinking that if you have a computer type job there are more chances to work remotely.  You would be able to have both the adventure traveler with the software.

BrightFIRE

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Re: Addicted to cash - too many options
« Reply #7 on: May 11, 2018, 09:36:22 AM »
My 5-year FIRE target is assuming ~25k expenses. Career change is more or less giving up on FIRE in exchange for more enjoyable work and a better lifestyle.

This is unlikely to be true - it sounds like the kind of thing you tell yourself so that you don't seriously consider that option. You're not going to be making minimum wage.

If I mathed right, you're 31. Your definition of FIRE seems to mean "by 40", but retiring early is anytime before traditional retirement age. Changing career now to have a better life for the next decade sounds like a good choice to me - if you end up FIREing at 42 (or 45) instead of 40, you're still way ahead of the curve. I'm not sure why you think you'd never advance or be paid more than starting salary either.

OR you can take a hybrid approach instead of all or nothing. If you learn how to code, you can work in that industry for the 5 years you already had planned, then do freelance projects to partially support yourself while being a mountaineer.

robartsd

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Re: Addicted to cash - too many options
« Reply #8 on: May 11, 2018, 10:20:31 AM »
if I wanted to be FI at a level that would allow me to pursue all of my primary interests in a full capacity it would be about 9 more years though, and that's too long in this shitty job undesired career. I'd be 40. Hence the hedge-my-bet plan of getting additional education in software
I guess I read a little too much into this. If you stick it out to FIRE in 5 years, you can then relocate close to mountains and pursue your interests in ways that make money on your own terms. You'd probably be 50 by the time you hit "FI at a level that would allow me to pursue all of my primary interests in a full capacity" but that decade and a half would be full of great experiences.

drachma

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Re: Addicted to cash - too many options
« Reply #9 on: May 11, 2018, 01:02:27 PM »
basically I am unable to commit to any path for what I want to do, and investing my spare cash seems like committing to this career for 5+ more years which strikes me as awful. which is why I haven't done it. simply because I might have to sell at a loss to fund any of the above options. so that part of the question at least, I know the answer to.

the classic golden handcuffs dilemma.

@BrightFIRE - this is an important point. But yes, I know I'm not giving up on FIRE completely by changing careers and starting over, but it would no longer be a primary (singular... all-consuming...) focus if I found decent work in a tolerable location. I am of course naturally frugal and a saver, but the timeline would just push way out, which is OK if the work/life balance is good. I already have enough saved to likely cover retirement at a traditional age, if I let it grow for 35 more years. I certainly don't think I'd "never advance" in a new career, I just tend to assume the worst when making projections about the future, part of the engineers habit of always making extremely conservative estimates. Perhaps this is not a useful way to look at life all the time. Thanks for pointing that out.

My only issue is that work + side-hustle + training for my hobby is simply too much. I am at a point where I basically have to pick 2. I have done some self-learning and built my own simple projects and it is very difficult to balance all 3. I always fall flat at monetizing them. I have a hard time understanding how to make money outside of the paradigm of "company pays me money to think about their problems for 40 hours a week." Another bias in my way of thinking I am trying to self-learn around, it's just extremely difficult to make progress in this area with only 24 hours per day. 8 job, 8 sleep, ~4 training leaving 4 hours for building a business, and also cooking/cleaning/commuting/having any form of social life. I just have not been able to make it work. Yet?

@civil4life good insights. My FIRE goals are on a short time horizon specifically because I do not like my work and honestly never have, and it doesn't allow me to live where and how I want to live. I know which option I am more passionate about, have spent a very large amount of time "exploring" it and definitely know I could do it. But I don't have enough resources to pull it off yet and I have very little in the way of a safety net / fallback plan - because of "reasons" it would be very difficult for me to get a job in my field again if I were to leave this one. Nor would I really want to except out of necessity. It certainly feels like a 1-way trip.

I am also looking at negotiating a year off with my current company. I could use that time to focus on my guiding skills and also building some kind of internet side-income business while not spending 50+h a week on my job. So that's one option. I'm not convinced they'd go for it, but stranger things have happened.

civil4life

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Re: Addicted to cash - too many options
« Reply #10 on: May 11, 2018, 01:17:10 PM »
Another option if a sabbatical is not possible is convincing them for part time or teleworking?

What are the "resources"?  What actions can you start today to obtain the resources?

I am an engineer as well.  Engineers in general have highly marketable skills even outside their area of expertise.  Alternate career options for engineers are probably limitless. 

I am very similar in getting stuck in analysis paralysis.  Sometimes we just have to take the leap of faith.

drachma

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Re: Addicted to cash - too many options
« Reply #11 on: May 11, 2018, 01:34:46 PM »
@civil4life well I realized I was being entirely irrational about where I was keeping my money, as long as I'm still working here I can replenish my "cash" reserves within a few months and none of these decisions are ones that will be made in a timeframe shorter than that. So I just stuck 10k of my cash into my vanguard account. Doesn't use up all of my excess reserves but a good start. leap of faith?

still doesn't answer the greater life questions but it is one small step towards gaining the "resources" to quit and go to guide school. I literally meant "resources" as in Money. In my ideal world I have a small cabin on some property in the mountains and am FI enough to have the free time to climb and/or guide the majority of the time.

I don't have a degree in engineering; I sort of fell into a highly specialized MS++ niche field before graduating and dropped out; losing both undergrad and grad degrees in the process due to some beaurocracy on their side and mismanagement on my side. Other than my "soft skills" (project management, communication, problem solving etc, which I am good at) I have few technical skills useful outside of this niche that I trained for and my general knowledge of engineering concepts outside what I use at work are fading fast with little desire to re-learn them. Most of the time spent / skills I develop at work involve learning the frustrating details of insanely complex proprietary CAD software and strange ISO standards. It's like I do less and less actual engineering work every day and my marketable "engineer" skills are atrophying in favor of the bullshit skills which aren't transferable outside of this industry, which is where I want to go. Because there are no job opportunities in this niche that are significantly different from what I do now, and I don't want to do it any more, and NONE of the companies in this niche are in locations that are favorable to me. And very little chance of remote work either due to there being a hardware aspect of the job, little chance of contract work either due to the large scale and long-term nature of the projects. I've gone on long enough but it feels quite fruitless. I am really struggling with how to pivot out of this predicament.

civil4life

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Re: Addicted to cash - too many options
« Reply #12 on: May 11, 2018, 05:29:44 PM »
I always consider myself a glorified paper pusher.  I have been in my career for 10 years.  I designed about 2 projects in my career before I was permanently relegated to project management. 

The skills you mentioned as not being important project management, problem solving, and communication are the skills companies are looking for.  Have you considered taking the PMP?

I figured resources meant money, but I was hoping you would see it as the many other resources needed for change.

Hey if the cabin in the woods climbing and guiding is the dream start working on it now.  Enjoy the journey.