Author Topic: anyone over 40 and trying to catch up?  (Read 29939 times)

psychomoustache

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anyone over 40 and trying to catch up?
« on: February 18, 2013, 01:59:01 PM »
Hi everyone

I remember reading YMOYL way back in the early 90's, then doing the Tightwad Gazette, then never giving up the mall/diet coke/hair highlights/new cars (you name it) until about 10 years later. What's done is done.

I would like to know if anyone on here is over 40 and trying to catch up/get more intense and mustachian in spite of years of stupidity.

We started doing Dave Ramsey back in 2007. Finally paid off our used car - and our only debt is our mortgage. But we kind of petered out on DR - I still like him mostly (aside from the Christian right-wing diatribes). But I think in the long run, his message (IMHO) has been a sort of bait-and-switch approach, rather than the radical facing of reality that I find so refreshing here. What I mean...Dave says...save today so that tomorrow you can "live like no one else" implying somehow that a limitless paradise of consumption will follow your efforts in deprivation. I found this site about 10 days ago, and find my whole outlook on everything changing, and with it, an immense relief and release from the idea that I *should* aspire to "someday" return to   owning a lot of crap.

I grew up upper-middle-class in the States, have a paid-for Ivy education, and am one of those who could never have attained financially what my father did. I am an old Gen-Xer on downward mobility compared to my father who grew up poor in the Bronx. It has maybe taken me 20 years to admit that and be okay with it...maybe a bit more than 20 years - okay to be perfectly honest - listening to Dave Ramsey kept the promise that I could somehow catch up with my parents' wealth alive. I am finally willing to not aspire to the same vision of wealth, and of life, that they did.

OK all this to say (let's get down to brass tacks, i.e. numbers) that we still have about 198K euros left on our mortgage, at about 4.3% and will be done with it at this rate in 2026. Yuck. My husband is an engineer and makes about 80K euros a year. Understand that the system here in Europe is quite different - the government takes out a big chunk of his check, in return our healthcare is very cheap, and he will get a nice pension at the end. We also have practically free universities for our kids (three kids) and we get a check for 360 euros every month from the government because we have those three kids. That's socialism for you. No other debt besides the house, but very, very little savings for retirement - we have an IRA that has been sitting in the States for over 20 years with about 130K dollars in it - this is with Vanguard and has done absolutely horribly for us. We are thinking of rolling it over into a fund with a group called Rebalance http://www.rebalance-ira.com/

As for me, I'm a therapist in private practice. I recently found out (and this is the shock, or punch in the face, that got me to this site) that the government is going to charge me VAT tax on my gross earnings. Normally this is not done for healthcare providers, but because I have foreign (American) degrees, I cannot work in hospitals or clinics here, and therefore cannot be officially considered a healthcare provider. I should have of course found this out beforehand, but of course, I wasn't on anyone's radar until my practice started to take off about 3 years ago. I am booked (the good news) but I only make 800 euros a month (the bad). I am also going to have to reimburse back VAT tax, according to my accountant. This was quite a shock to my system - also considering that as a small business owner, I don't get the nice pension benefits my DH has. The government is NOT going to take care of moi. And if my DH passes away before me, I will only get HALF of his pension. Due to moving here to France and having babies, my own work history has a big gap - I stopped working for about 8 years - of course all the while we were spending as if we were freakin' ordinary DINKS or something... (all right not going there...)

We have gotten in some bad habits too with our children that are going to be difficult/impossible to fix. For example, the three of them are in private schools - understand that here that costs very little compared to the states, but still. Per child, it's about 80 euros a month. My second son is a pianist - music school is 500 euros a year. Again, not expensive compared to the States... the third son is into the Ecole des Beaux Arts and bowling (of all things). We have talked to the kids about going to public school, but they have been with their friends in these schools from Pre-K -  they really don't want to change. The eldest, age 18 will be going to University for about 300 euros (that is not a typo) tuition for the year (I know); but we will still have to find him an appartment, etc.


I would love to hear any and all of your thoughts - my idea so far is that we reduce our expenses enough so that we can at the least save my entire tiny salary...

What I find the most inspiring and liberating, for me, is the idea that from this point on I am no longer working in my practice to spend my money on keeping up, but to provide for something more meaningful and important. I want to protect myself and provide for myself in the future.

Thanks for reading, sorry this was so long.
« Last Edit: February 18, 2013, 02:03:31 PM by psychomoustache »

James

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Re: anyone over 40 and trying to catch up?
« Reply #1 on: February 18, 2013, 02:14:39 PM »
I am 3 months past 40, does that count?  :)

Like you I only started turning things around over the past 3-4 years.  We got rid of all of our debt except mortgage, though we are underwater and that and trying to sell the house.  It certainly can be depressing to think about the waste over the past 10-15 years, and how much further ahead we could be if we had only started earlier.  But that is water under the bridge, I'm just focusing on getting things where they should be right now. 

The key is probably in your monthly spending.  How much are you spending each month, and how much are you saving?  How much are you eating out, buying stuff, driving, etc?  That is what I keep repeating to myself, it's not about the numbers, it's about the lifestyle.  If you don't spend it, you will be saving it and can put it toward the mortgage or retirement.

Also, start challenging the status quo.  Why are you finding an apartment for your eldest?  Can he live with you?  If he does need an apartment, shouldn't he be expected to work and pay for it?  Some things aren't worth changing, I can understand the desire to maintain the private school, etc.  But question each of those expenses and many others within the light of what MMM would say.  Challenge them and make them justify their expense.  And keep repeating that for all your expenses, since your "normal" will change as you continue to read MMM and adapt your thinking from the consumerist norm.

kendallf

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Re: anyone over 40 and trying to catch up?
« Reply #2 on: February 18, 2013, 08:40:56 PM »
You're not alone.  :-)

I'm 46, my wife is 41, and I just started reading MMM a few months ago.  I'm making an effort to do exactly what James recommends above, and that is to review every aspect of our spending and make cuts that build over time.

Short version: it's working.  I have cut everything from car insurance, to recently selling my wife's Lexus and buying a Prius, to eating out less, and I'm currently DIYing some renovations on an old, small home we bought cheaply so that we can downsize, rent out our current house, and basically kill our mortgage expense.

All this and I'm not making a dime more (I work for the US Navy; I may actually get sequestered later this year.  Now, if that happens, I can actually survive).  This has given me a feeling of optimism and control that I lacked before; you can do the same, I'm sure!

Working things out with the kids' expenses can be tough; I try to remember that having parents who are financially responsible for the long term trumps a momentary luxury in the short term.  That's one of the most valuable things you can teach them as well, in my opinion.

Paul der Krake

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Re: anyone over 40 and trying to catch up?
« Reply #3 on: February 18, 2013, 09:08:19 PM »
Now that your eldest is about to move out, have you considered downsizing your house? I don't know much about the housing market in Britanny, but depending on when you purchased your house it could have appreciated quite nicely. Assuming that your sons will be going to a large city for their studies, you most likely won't need that space much longer.

You mentionned that you only make 800 euros a month (pre-tax or post-tax?), how many hours does that represent? Last time I checked, the minimum salary for a 35hour week in France was around 1,100 euros post-tax. With your professional skills, there has to be room for improvement there.

Good luck!

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #4 on: February 19, 2013, 12:23:53 AM »
Thank you guys so much - a pleasure to read your hopeful optimism  : ), and you were very kind, considering how wimpyass we are   ; )

I totally agree that the changes that need to happen are lifestyle, baby steps (not in DR sense) and speak to keeping up that hopeful optimism in MMM-style. So far - I'm taking  the bike much more often... where I live, it's kind of really embarrasing to admit the distances I was driving (like okay, I'll admit it...500 meters or so... I know, I know). Good thing - we own one ten-year-old car- and we live right in town. My amazing DH has taken his bike everywhere for years. We practically never need to drive, living here (medium-size town in French standards, tiny-tiny in American). I have stopped buying lunches out (yeah I did that too !!) and cut out my fairly generous Dave-Ramsey-inspired clothes/make-up budget. I know, I know...

Appartement (I spell French, I know that too) for eldest...because he's going to school 2 hours from home...because what he's interested in studying (Philosophy! Need I say it again...."I know") isn't taught at the University here. I very much like the idea of making dear-kiddo work during his college career. Jobs for young people have been really hard to come by, but now that he's 18 this should be less of an issue. Besides, qu'il se débrouille as we say here (let him figure it out!)

House - we have a way-too-big house for sure. We were very un-mustache and sourced-out a lot of work on the thing. Now we are here. Spoke to DH about downsizing, but changing houses means basically getting a lot less house for the same amount of money. This is because we got our house really cheap 9 years ago, we are in a neighborhood where everything is REALLY close to us (as said before) and to get in this neighborhood in a smaller house, with the moving costs, means it would all get cancelled out. OK I sound excuse-y even to myself, but moving right now anyway is not in the cards today. But I'm not attached to the lousy house so - ask me again in 3 or 4 years and voilà, it's gone.

My "salary" (LOL).. I'm in private practice. I bring home 800euros Net. (thank goodness). Since my degrees are American, the only way I could practice my métier was to open the practice. Not allowed by the Gov't of France to practice in clinics, hospitals or other institutions (that being said, I have snuck under the radar and teach some classes at the nursing school...SHHHH!) OK here is where I am going to be more revealing - I'm a psychoanalyst. (I know, it's such an Un-mustache métier). This means a HUGE huge part of what I earn in my practice goes to my personal analysis and supervision. Think of it as never-ending Grad School. To most people (out of our nebulous psychoanalytic world) this sounds crazy and it pretty much is - there's a similiar values-quality issue to Mustachian-ism. In analysis, there are not quick-easy "fixes" to human psychic pain (can't just apply a positive thought and voilà you're fine). Anyway that's a whole other post I guess  ; D

Lastly - we are locked into our current way-too-high car insurance until October because of an accident I had in 2010, but that should go way down then. Lastly lastly, I would like to take down the lifestyle in all manner of incremental not-too-painful-for the-kids ways before I get scary-radical on them -that being said, in the past ten days, "being mustache" has been officially adopted into their mishmash Frenchy-English.

OK lastly lastly lastly - still have y'all beat in terms of age - I just turned (gasp !!) 47! DH is 53. But he's totally on board because at heart, he's really really Badass ; ) !

Merci beaucoup everyone.




kythuen

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Re: anyone over 40 and trying to catch up?
« Reply #5 on: February 19, 2013, 01:48:12 PM »
I'm 41, and just started getting my financial house in order.  I haven't even begun to turn the corner - but thanks to a lot that I've learned here, I can finally see the corner in the distance, from where I'm standing now.  :)

I'm not sure I can ever catch up enough to early-retire -- right now, my goal is just to retire "on time."  But being here has given me all the tools I need to feel like my old age will be comfortable and secure, even if my middle-age will have to involve a lot of 9-5 to catch up.

needmyfi

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Re: anyone over 40 and trying to catch up?
« Reply #6 on: February 19, 2013, 02:37:05 PM »
Hah!  55 years old here, dh will be 58 tommorrow.  Better late than never.  I made my move too soon.  Quit my high paying job almost a decade ago now and various forces have us back working for another 3 years to bridge the gap to SS.

Pluses are that your husband will get a nice pension, you will have healthcare and you can afford kids in college.  But down to the real question-why only 800 euros for your income if you are booked, this seems mighty out of kilter.  I get the whole US educated not qualified in France thing,  but I kind of didn't understand your explanation of salary.  Do you make only 800 euros and then spend that on your own therapy, or do you make only 800 euros net after you pay for your own therapy?  If you are booked-can you charge more?

You could post your budget but I'm afraid many of us will have a hard time making good suggestions on specific items since there seem to be alot of fundamental differences between US and France, but you could give it a try.

BPA

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Re: anyone over 40 and trying to catch up?
« Reply #7 on: February 19, 2013, 04:34:31 PM »
Hello!  I am 44 and have been playing catch up for much of my life.  I started university two years later than my friends for reasons beyond my control, graduated into a recession which put off finding a job in my field by three years and didn't start my career until I was 28.  Then I was suddenly made a single mother of two small children at 32 and struggled financially on my income, but succeeded in surviving.  I finally paid off my student loans at 35 and bought a house at 36 (by myself). 

Since then I've cut back my hours at work to be around more for my kids, so my game plan is more "be frugal to be around more" rather than to retire super early.  However, if all works out the way I hope it does, I should be on track to retire at 50. 

Good luck.  Nothing wrong with starting late although there is the whole "if I'd gotten things together sooner, I'd be further ahead" thought that runs through my head from time to time.

WhatMomWears

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Re: anyone over 40 and trying to catch up?
« Reply #8 on: February 19, 2013, 06:26:15 PM »
Turning 44 next month and the husband is 43 :)
You're not alone. We're playing catch up too - we did too much of 'keeping up with the Wall Streeters' with my Investment Bank bonuses and now we're wishing we had banked all of them rather than spending. Sigh.

Jamesqf

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Re: anyone over 40 and trying to catch up?
« Reply #9 on: February 19, 2013, 10:08:22 PM »
Don't know if you could call it "catching up", but I didn't get a college degree until I was in my mid-30s.  Before that, I had worked my way up from field labor sorts of things to a fairly successful construction business, then lost about everything through a concatenation of mishaps.  (Not all my own doing - never go into business with two excessively macho guys who have attractive wives :-))

happy

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Re: anyone over 40 and trying to catch up?
« Reply #10 on: February 20, 2013, 01:36:27 AM »
Yes, I'm 54....and I have moved between periods of  frugality and periods or consumption creep. Learning to be happy  with low expenses is a great life skill to have.... I've learnt some and am still learning. I'm also  gradually winding in the spending on the family feeling it inappropriate to suddenly make dramatic changes. My approach is to make no more silly mistakes, and rectify past ones in the most timely fashion appropriate..some can't be quickly fixed.

I've declared myself semi-retired according to MY definition.. ie I only work half-time (semi = half) and the rest of the time I am retired. It will take me longer to be fully retired, but one of the problems of playing "catch-up" is that every year spent working for The Man, becomes a more precious life year wasted.

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #11 on: February 20, 2013, 05:46:02 AM »
Pretty great stuff.

Thank you MrsKensington for your inspiration and thoughtfulness, and thanks to all of you - there is just so much hopeful wisdom here - I just love it. I'm gushing  ; )


Pluses are that your husband will get a nice pension, you will have healthcare and you can afford kids in college.  But down to the real question-why only 800 euros for your income if you are booked, this seems mighty out of kilter.  I get the whole US educated not qualified in France thing,  but I kind of didn't understand your explanation of salary.  Do you make only 800 euros and then spend that on your own therapy, or do you make only 800 euros net after you pay for your own therapy?  If you are booked-can you charge more?

You could post your budget but I'm afraid many of us will have a hard time making good suggestions on specific items since there seem to be alot of fundamental differences between US and France, but you could give it a try.


OK ...thanks for everyone's really amazing, hopeful responses... I am so glad to see I'm not alone in "catching up".
Let me try to answer this as best I can...

I am booked, yes. In France, there is no health insurance reimbursement for psychotherapy, so everyone sets their prices as they want to. I charge what other therapists in my area charge roughly, that's to say, 45€ a session. Out of that, 20% goes to the government as VAT tax (that's what's hard to take.) So I'm down to 36-ish euros a session.

I have about 25 sessions a week (the rest of the time is taken up by teaching, running therapy groups - these in other places - that's actually just dumb luck for me). Let's round it down to 25 sessions a week for the ups and downs of private practice. For example, if I take a week off (which I'm going to do next week) - no pay. So that makes about 1125€/week without the VAT, 900 a week with... that being said, because I live in a small town and some people have a really hard time paying for their therapy, there are some people I see for less money. So - it's not exactly 900€, it's about 850€ -ish. Again, it all depends on the week - in this business, every single week is different.

Then, I have to take out the other taxes. In this case, healthcare costs that I'm required to pay the Gov't for are no where near as expensive as in the States, to be sure, but still. About 1000€ a year. Then there are the other charges - charges you have just beacuse you're in business for yourself and that's the way it is. These come to about 3000 € a year. So 4000€ for the other taxes, per year.

Then, there's my rent for the office, and electricity, internet access/telephone. These all come to roughly 600€ a month.

Then there's the big huge bite that my personal analysis and supervision take out - this is what's of course the most difficult for civilians (including my poor accountant, and my husband) to understand. Because I live basically in a tiny Brittany town - I have to travel to get what I need for myself. This is also in a large measure due to anonymity issues. So, I take a train, which costs me 75€ a week for two round trips to a town 1.5 hours away. Once there, the nice thing is they have a set-up where you can rent a bike for an annual subscription (35€) so that's what I do to get where I need to go. I have to pay 180€ a week for my analysis/supervision. Yes that's huge, but in the States, it's much worse...FYI...

I pay for these things out of my gross income.

I am also in an analytic institute for the next 2.5 years studying child therapy/analysis - this costs 200 a month.

SO...After all is said, and done and paid for, THEN I pay myself 800€ a month, you see...

SO obviously, yes, once the analysis/supervision/institute stuff is through (but we have to pay for supervision forever in our jobs...it's part of the deal, but it won't be as expensive as the whole package) things should start to get a bit easier. So things should be better in about 3 years or so...

That - and I am going to fight all the same over the next few years to have my American degrees validated. I say "the next few years" because for a colleague of mine, this took 12 years. You can't make this stuff up...!!

I started a journal on here where I hope to get more precise on the numbers - like I said there, I have been a bit of an ostrich about things, and my DH is an engineer and I've kind of been leaning on him way too much in that department... he just LOVES his Excel sheets, LOL...

Thanks, all...

« Last Edit: February 20, 2013, 07:15:38 AM by psychomoustache »

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #12 on: February 20, 2013, 07:12:40 AM »
Back - crunching numbers again a bit (understand math is Not My Thing, so feel Free to Totally correct me at will)

I make then, about 3800€ a month taking out just the VAT tax right away. But, since I told you I pay expenses on the gross, add back 20%  - we're back up to 4,560€. (round it down to 4400 because of ups, downs...every month is different too). Monthly expenses then are rent/internet/telephone/electricity = 600€, Institute expenses: 200€, Analysis/supervision = 420€, Train = 300€. That's then 1520€, a month, just off the top of the gross.

 I forgot that the Yellow Pages called me yesterday to renew my business listing at 640€ a year. Add up the taxes then that I listed above...

Then - if the numbers still don't work - there is also that in France, there is a LOT of vacation, where no one is around to come to any appointments at all. During the summer, this is about a month to six-week period with very few appointments. I have to plan for it of course, and this being France I myself take a month off. Every six weeks here there are two weeks of school vacation. That means, starting from the beginning of the school year, there are two weeks in Oct-Nov, two weeks over Christmas, two weeks in Feb (next week), two weeks at Easter, and then we end the school year. There are a lot of people out of town who don't come in at those times.

My DH does my accounts, along with my accountant. I am trying now to dig into this deeper (so please be patient, you math-heads! ) He (DH) tends to be really conservative and pessimistic about my earnings (then I outperform his dire predictions, so much the better...!) It's his decision right now to pay me very little  - with the idea that (remember this part) I owe VAT tax that I haven't been paying since 2010 - and that we just found out about this - which is what brought me to this lovely site  : )...

That being said, in 2010 I didn't make as much as now. So - somehow this mishmash will come together...


clutchy

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Re: anyone over 40 and trying to catch up?
« Reply #13 on: February 20, 2013, 05:47:03 PM »
Just an FYI you might want to look into this but there's a form called the FBAR TdF 90-22.1.

It's a financial disclosure form for foreign bank accounts in excess of $10,000.

You might want to see if it applies to you b/c the penalties are extreme.

Not sure if you care though or if you're ever coming back to the states.

Captain and Mrs Slow

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Re: anyone over 40 and trying to catch up?
« Reply #14 on: February 21, 2013, 10:17:24 AM »
Hey Greetings to a fellow expat (CDN living in Madrid soon moving to Munich) not much to add other than the principles of frugality can be applied anywhere and anytime.

The wife and I cycled in and out of debt for almost 25 years before finally getting everything turned around. An inheritance helped and now we are planning mode for retiremet 60-65.

So it's never too late!

good luck

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #15 on: February 21, 2013, 01:20:58 PM »
thank you again everyone for your replies.

Clutchy - US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

Captain and Mrs Slow   Thanks for piping in - we aren't in debt but we are in no way going to be able to retire OK unless things come together - so we too are aiming for a "normal" retirement age at this point - the issue is especially salient for me because I myself have about 7K dollars in my IRA in the States - that is IT.

All right, keep on keepin' on - I have started a journal http://www.mrmoneymustache.com/forum/journals/psychomoustache's-incremental-journey-journal

so if you all want to keep up with the ongoing saga, feel free...

Merci encore,

SoftwareGoddess

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Re: anyone over 40 and trying to catch up?
« Reply #16 on: February 21, 2013, 01:29:48 PM »

US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

But did you not say that you are a US citizen? I'm a US expat living in Canada (dual citizen), and it's my understanding that all US citizens must file not only the FBAR but also a US tax return, regardless of whether they earned money in the US during the tax year. You may want to look into that a bit more closely.

TN_Steve

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Re: anyone over 40 and trying to catch up?
« Reply #17 on: February 21, 2013, 01:35:28 PM »
[SNIP]

Clutchy - US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

[SNIP]


Ouch.  You really need to look at FBAR and, to a lesser extent, FATCA.  They are truly terrible/nasty/execrable laws for expat US citizens.  US (along with Eritrea) has a worldwide tax regime, so any income you make in France is subject to US taxes (after credits, of course).  These rules go further and mandate filings showing your foreign assets, if they exceed a relatively low amount in the aggregate.  The penalties are draconian.   Here is a google search result page for "FBAR impact on Expatriates":  http://tinyurl.com/FBAR-Results  Here is a Forbes article on FATCA: http://www.forbes.com/sites/robertwood/2011/09/06/expats-call-for-fatca-repeal/ 

Bottom line, this is some serious stuff that you need to get up to speed on quickly. 

Spork

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Re: anyone over 40 and trying to catch up?
« Reply #18 on: February 21, 2013, 02:25:37 PM »

US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

But did you not say that you are a US citizen? I'm a US expat living in Canada (dual citizen), and it's my understanding that all US citizens must file not only the FBAR but also a US tax return, regardless of whether they earned money in the US during the tax year. You may want to look into that a bit more closely.

...and I had a friend that did 5-6 years in Sweden without filing a US return.  When he returned he was fortunate enough to do so while under the umbrella of a corporation that *really wanted* him back in the States and was willing to sort out the tangle for him.

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #19 on: February 22, 2013, 09:29:22 AM »
I was informed of the tax issues affecting us by two different sources - an American tax lawyer in Paris, and the American consulate. I am pretty confident in their advice. I read the link on the FBAR, and my impression - (which is what I was told by the above two sources) is that they are especially looking for those expats who make a lot of money here and who plan to return to the States to work... but especially those who are making a large income here.

To be perfectly honest - I was told by both of those sources to just stay under the radar - that our little salaries were not going to be of interest to the IRS - that we would have little or nothing to pay tax-wise anyway and it would just be sending in the return every year to be on their good side - but the biggest risk we have is not being allowed to vote, in not sending in returns at all. Again, the last part comes from my American consular general in Brittany, whom I know pretty well.

Thank you though for reading, and my formulation was obviously incorrect  - of course US tax law concerns us !

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #20 on: February 22, 2013, 10:23:42 AM »
http://www.taxplannercpa.com/WP/foreign-earned-income-exclusion/fbar-penalty-for-non-filers/

I think this is how my two sources are thinking this through. I agree with you all - it's FAR from ideal, and I will have to look into it more...but one challenge at a time, please, I'm busy dealing with the nasty French taxes FIRST.

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #21 on: February 25, 2013, 01:10:54 PM »
OK we are looking into these tax issues - i recontacted the same tax lawyer I saw back in 2007 to get started on filing again.

We may owe some penalties for failing to file. We probably don't owe tax per se because we are paying tax here (and they don't double tax you thank God - at least that's my understanding)
I prefer to get this information now, and get this straightened out today, rather than dealing with some nasty tax surprise if one day we decide to go back to the States, or when we pull out our American IRA's, or if and when I inherit something from my Dad.

I have to thank you guys for pointing this out to me - obviously I was in denial and didn't want to deal. But Mustaches Deal, Damn it. so I'm dealing.

clutchy

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Re: anyone over 40 and trying to catch up?
« Reply #22 on: February 25, 2013, 03:54:49 PM »
and you're welcome :)

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Re: anyone over 40 and trying to catch up?
« Reply #23 on: February 25, 2013, 05:22:22 PM »
My husband is 44 and we just started getting serious about retirement savings when he was 40 and I was 29.  So are we over 40?  Yes and no :-)  Are we trying gamely to catch up?  Yes!!!

We have about 3 times our annual expenses in retirement accounts, save 44% of our take home pay, and have between 4 and 5.5 years before we will be completely debt free (we have about double our annual expenses in debt).  By the time the debt is paid off I hope to have more like 6-7 times annual expenses in retirement account, then really ramp up the savings!

On a related note, I love the way of thinking of savings by comparing it to net income!  That was just an eqiphany to me, and it takes out the 30-35% of our income that goes to various taxes!  Of course some of those will still be paid when our income goes down like the property taxes, but others will be gone or diminished greatly.

psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #24 on: February 27, 2013, 10:21:44 AM »
I  now spend time playing math games in my head (now THAT means this site has really, really gotten to me, I was an English major) and am hoping I can have a small but decent stash, on the low side, of about 160K euros in 20 years - and that's being pessimistic.

We are now trying to put aside, as a beginning step, 1000 euros a month (out of a salary of about 5500 euros, but with three kids).

I found the Vanguard France site, and am looking into what the minimum is to open an account - probably depends on the account?

Teeny-tiny steps...

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Re: anyone over 40 and trying to catch up?
« Reply #25 on: February 27, 2013, 05:47:01 PM »
I've just turned <gulp> 50 and DH is 45 and we are determined to catch up and retire by normal retirement age.  I went through a breakup/divorce 10 years ago and was really caught off-guard financially.  I was a SAH mom and had to rebuild a career in my 40s.  I wish I had been smarter with so many things in my life, but I'm learning more every day.  I'm so glad I found MMM! 

We've got a small start in 401k and some debt to pay off (all relating to college tuition, DH and DS) and great plans to grow a 'stache. 

ETA:  I was a YMOYL and Tightwad Gazette reader also back in the day.  I still have my original copies of the Tightwad Gazette newsletter in 3-ring binders.

Us2bCool

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Re: anyone over 40 and trying to catch up?
« Reply #26 on: March 25, 2013, 12:54:52 PM »
I'm with you as well. 45, married with a teenager.

We were actually doing pretty well, living an ultra-consumption life with a huge house, a sparkly new pool, and new cars every couple of years, and having no trouble paying the bills. I'm actually pretty frugal, but my husband grew up dirt poor and has a pretty unhealthy view of money and consumption.  The first 15 years of our marriage, he tended to win out on buying whatever he thought would make him happy.

He finally blew it, though. We got a large windfall, he decided to pursue his dream, quit his job and opened a bar.   Two years later we were bankrupt and in debt for half a mil.  It's a miracle we stayed married, but we did.

Four years later, we are out of debt and well on our way to recovery. We don't own a house at the moment, and can't buy one until next year due to the bankruptcy.  The good news is that he has learned that he needs to listen to my opinion when it comes to finances and not try to buy happiness. 

What's really amazing is that we had an extra challenge as well: we relocated with our jobs from a very affordable city to a very expensive one, and with our new lifestyle, we actually have a lot more extra money than we had before our nosedive. Every last dime is being put away, and we're on track to get into a house (this time a nice, small, manageable one) next year.  Once we have the house, we can keep putting money away.  At this rate we are still on track for early retirement.

I Love Cake

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Re: anyone over 40 and trying to catch up?
« Reply #27 on: March 26, 2013, 11:52:10 AM »
[SNIP]

Clutchy - US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

[SNIP]


Ouch.  You really need to look at FBAR and, to a lesser extent, FATCA.  They are truly terrible/nasty/execrable laws for expat US citizens.  US (along with Eritrea) has a worldwide tax regime, so any income you make in France is subject to US taxes (after credits, of course).  These rules go further and mandate filings showing your foreign assets, if they exceed a relatively low amount in the aggregate.  The penalties are draconian.   Here is a google search result page for "FBAR impact on Expatriates":  http://tinyurl.com/FBAR-Results  Here is a Forbes article on FATCA: http://www.forbes.com/sites/robertwood/2011/09/06/expats-call-for-fatca-repeal/ 

Bottom line, this is some serious stuff that you need to get up to speed on quickly.

I would trust a tax lawyer too but I have heard that every American citizen is affected in this. I am in Canada and know a few American ex-pats. One was a baby when his family moved to Canada and even he had to pay back some taxes for income he earned here in Canada-and he never worked in the States-never even went to school there. He hired someone to work it out for him. I also know a woman who moved to Canada as a child. She, like you, is going to try to stay under the radar and hope they don't sniff her out

I Love Cake

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Re: anyone over 40 and trying to catch up?
« Reply #28 on: March 26, 2013, 11:59:48 AM »
Salut psychomoustache!
I think you are doing quite well. I wouldn't take the kids out of private school-the cost isn't exorbitant and switching schools is tough on children.

I am a late bloomer too-in more ways than one. I am 47 and have a 7 year old and an 8 year old



I'm not too worried because I have always maxed out my CPP and I know I will get that every month when I retire (it's guaranteed for the next 75 years or so) plus RRSP and RPP we'll be fine-not rich, but fine

This year we are dedicated to saving more than ever. Our problem is being too risk adverse to ever really 'catch up'

When I read about people having close to a million in retirement-wow!


psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #29 on: March 26, 2013, 02:53:40 PM »
Salut to you! I love cake too  : ) !!

No, we aren't taking the little Psychos out of their beloved schools. In my journal today (another thread), I kvetched quite heartily about my current angoisse about whether or not to go get the lousy f-ing diplôme de psychologie... I could plan and spare the time to do it in about 3 years or so - when my current training ends and the mini-Psychos are a bit bigger. But ...

I'm looking at the classes required and they make me Wince in Misery. Misère. Cognitive variance models, and memory retention confabulations. You know. Has a whole lot of relevance to my work...

SO - is it worth it to say F-it to the degree, and accept that I will pay a 20% tax for my saying "F-You, Degree", for the rest of my life (another 20 years of work or so, no ER happening here)...

OR- do I bite the bullet and return to school for painful classes for 3 to 4 years?? School isn't expensive here, but the time, and effort, and getting there - IS.

I am thinking that mustachianism is maybe preferable to the pain of this degree...???  Je ne sais pas. Anyway, this will take some time and some reflexion.

Time for bed here in Brittany... ça suffit.

lhamo

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Re: anyone over 40 and trying to catch up?
« Reply #30 on: March 26, 2013, 04:23:10 PM »
The smart financial choice would be to suck it up and get the degree, painful as it might be.  You'd be giving yourself a 20% raise for the rest of your working career.  That is huge.  How old are your younger kids?  If they are in school full time then I don't see the need to wait --if I were you, I  would get started on this as soon as possible. 

We're in an excellent financial position now (DH 55, me 44) but we didn't start our real professional careers until I was 30 and DH was 40 -- that's when we finished grad school.  Expat life has been very good to us, as we live in a comparatively lower cost country and have been able to save.  The last 4 years has been phenomenal because we have been plowing money into our retirement accounts at the maximum levels AND seeing that benefit from a rising market.  It really is about getting to clarity about what you value and where to direct your limited funds to maximize that value. 

Is this something you can address in your personal therapy?  Maybe having some encouragement/support from that side as well as some very different types of support here will help you figure things out.  It does seem like you are still doing a lot of self-justification and that you kind of have an attitude that all of this has happened TO you rather than being the result of choices you have made. 

lhamo



psychomoustache

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Re: anyone over 40 and trying to catch up?
« Reply #31 on: March 27, 2013, 02:00:02 PM »
Attitude, schmatitude! I have No Idea what you mean! Of course all of this has happened to *moi*, and I am just a passive Victim of the Evil System! Obviously!

OK, taking deep meaningful breaths and calming down, and not shooting nasty looks in the direction of China to *you* Ihamo (can you feel my eyes sending nasty looks)

OK - you are putting down exactly what my thoughts these days are... is it worth it (the 20%?) given I'll be about 50 when I can start doing this program, it will take about 4 years, and then I'll have about 10 to 15 years of work left? Given what it's going to cost to do the program (given that it costs very little to do here...France has that going for it)...

And yeah, part of me would like to jump in with both feet *today* but I can't handle the training program I'm in plus University classes (plus my practice, plus my family...) But- I *would* like to find out if I could just begin taking a couple of classes and start breaking it down that way...

And yeah, I'm in my own psychoanalysis, where my wonderful analyst says most of the time "Oui", to much of what I say  : ) Not that it's not helpful, it's essential, but he is doing the Profoundly Neutral Analytic Stance thing, y'know.

Expat life - I think in China it must be quite different from here... In France  -on the news this evening- a report how in this country there are more piddling, obnoxious rules than in any other country on the planet. Seriously. Like, you can only serve apples in schools that weigh *exactly* 100 grams. That sort of thing. Or you are fined.

Thanks for your comments (sending nasty look anyway ; b )

Freckles

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Re: anyone over 40 and trying to catch up?
« Reply #32 on: September 02, 2013, 03:52:07 PM »
Me!  I'm 41 and my husband's 43.  I just discovered MMM a couple weeks ago and have been reading like crazy.  I've never understood money and my husband and I have been tragically bad at managing it.  We have a lonnnnng way to go.  So I don't know about retiring early but at least now retirement at a normal retirement age seems possible.  We haven't really started saving much yet, but I signed up for mint and am tracking where the money goes to make better decisions in the near future.  We decided to sell our financed 2012 minivan (of course!) and my husband even agreed to sell his classic car that I never thought he'd let go. We both bought used bikes and I'm going to be commuting to work on mine.  I want to cry when I think of how wasteful and stupid we've been, but what's done is done.  Better late than never, right?

I realize the original post was from this past winter.  How are things going for you, psycho?

MKinVA

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Re: anyone over 40 and trying to catch up?
« Reply #33 on: September 02, 2013, 05:09:58 PM »
Don't know if you decided to go back to school or not, but I wanted to suggest perhaps changing professions. Not completely but maybe using your education for a job without those practice restrictions (and maybe more income). What about a life counselor at university? Or general counseling at a retirement community? I'm using counseling in the broadest possible terms, obviously.

Overall, I look at my challenge as traveling down the road. Does this purchase move me toward retirement or hold me back? Look even at the small expenditures. They may not be a lot of money, but saving even a small amount is motivating. I'm spending the entire holiday weekend cleaning out closets, getting rid of stuff (mostly donations and trash). Very liberating and inspiring which prevents me from wanting to bring any more junk into my life.

By the way, I'm 53, two in college, and I pretty good shape to retire in five years (with a pension).

oldtoyota

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Re: anyone over 40 and trying to catch up?
« Reply #34 on: September 02, 2013, 07:57:47 PM »

US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

But did you not say that you are a US citizen? I'm a US expat living in Canada (dual citizen), and it's my understanding that all US citizens must file not only the FBAR but also a US tax return, regardless of whether they earned money in the US during the tax year. You may want to look into that a bit more closely.

I think SoftwareGoddess is correct that the US requires citizens to pay taxes even if they live in other countries. A work colleague of mine moved to Australia and has been (and probably will be) upset at all the tax she has to pay to a country where she doesn't live. I would look into it too.


Left

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Re: anyone over 40 and trying to catch up?
« Reply #35 on: September 02, 2013, 08:11:00 PM »
I'm playing catch up at 27 :( or at least I feel like I am. Even though I'm not really expecting early retirement (earlier than 40s anyways). My main goal is to be FI instead, so I can say screw this if my boss ever makes me unhappy with the job. This hasn't happened yet, but my old job did try to cut my hours, and a week later I gave my two weeks and was working somewhere else. I currently have PRN positions at a few places as well as a full time job. So if I have to cut my job, I just sign up for more hours somewhere else until I settle into a new job. So I don't worry about being "out of work" but I want to be able to know I don't have to "expect a paycheck" hence I want to be FI.

edit: and I'm fairly sure like above, US citizens have to file taxes even if they don't live in US or earn money in US. You might not have to "pay" taxes, but you still have to file it. It's a reason why people drop their dual citizenship if they dont' plan on coming back to US.
« Last Edit: September 02, 2013, 08:28:40 PM by eyem »

lhamo

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Re: anyone over 40 and trying to catch up?
« Reply #36 on: September 02, 2013, 11:32:28 PM »

US tax law doesn't apply to me at all, haven't lived in the States in 15 years and haven't made any money there since 2006 (as a writer). But thanks anyway for your thoughts.

But did you not say that you are a US citizen? I'm a US expat living in Canada (dual citizen), and it's my understanding that all US citizens must file not only the FBAR but also a US tax return, regardless of whether they earned money in the US during the tax year. You may want to look into that a bit more closely.

I think SoftwareGoddess is correct that the US requires citizens to pay taxes even if they live in other countries. A work colleague of mine moved to Australia and has been (and probably will be) upset at all the tax she has to pay to a country where she doesn't live. I would look into it too.

If you have established residency abroad and meet the requisite criteria (either having the foreign country as your "tax domicile" or spending a relatively few number of days each year physically present in the US), you can exclude up to 90k+ per person from US federal income taxes under the Foreign Earned Income Exclusion.  In the 10+ years we have been overseas residents, we have only had to pay US federal income tax one year due to a fellowship I earned that was taxable (ouch!  that was a nasty surprise at the time).  You do have to pay tax on any income earned through work in the US, but in our case that is never enough to push us over the taxable threshold -- does give us a little bit of US earned income to throw at Roth IRA accounts every year, though, which is nice.

Mark B

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Re: anyone over 40 and trying to catch up?
« Reply #37 on: September 02, 2013, 11:38:38 PM »
Really glad I found this thread, I'm surprised it's not much longer.  Gotta get up early but I'll chime in tomorrow.

hybrid

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Re: anyone over 40 and trying to catch up?
« Reply #38 on: September 03, 2013, 04:26:06 AM »
Really glad I found this thread, I'm surprised it's not much longer.  Gotta get up early but I'll chime in tomorrow.

Maybe it will be now that it has been revived.  I am 47, missus is 59, we've been married 27 years and have raised two kids.  Our daughter is 25 and has embraced many of the ideas from this site.  She and I sat down the other day and compared financial notes.  It was funny.  What worked well for MMM was that he made good coin at an early age and saved most of it early on, setting up his lifestyle today.  Neither of us can achieve that.  My daughter isn't making enough coin to attain financial independence by 31, and for her parents with larger incomes that ship has long sailed.  Daughter was looking at our income with mouth half open, and I was seeing 21 years of opportunity that had long passed.  It was a perfect example of "Is your glass half empty or half full?"  Because, from an MMM perspective, the both of us are only(?) about halfway there.  The better answer is, of course, half full.  That's what I told her to embrace.  She's figured out frugality, the stash will follow in time.  Her parents are in a position to improve upon a decent, if unspectacular in MMM terms, foundation.

IMO a notion that one must be financially independent by age XX is missing the forest for the trees.  By changing our habits we are improving upon our financial security fairly dramatically.  In the case of the missus we hope she will retire at age 62 instead of "normal" retirement age.  In my case the long term goal is to retire at age 60.  While that will not sound particularly early at all to a twenty-something reading this thread, here are the two takeaways financially independent that work for us.  Any extra time is good time, and we should be financially independent when a whole host of other people will never enjoy that kind of security.  That's what is getting me on a bike at age 47 when the joints are protesting more than they would have a mere 10 years ago. 

NinetyFour

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Re: anyone over 40 and trying to catch up?
« Reply #39 on: September 03, 2013, 05:11:35 AM »
Um, yes, I am over 40.  Have been for 12 years!  And yes, I am now trying to catch up.  I have always been fairly frugal, mostly just because I never made a lot of money.  The teaching profession.  Sigh.

In 2006, I bought a house for $320K with no money down and interest rates that were out of this world.  But within the last couple of months, I have made improvements to that situation:  I borrowed money against my retirement and paid off my second mortgage (which had a rate of 7.5%--I know) and then I refinanced my big mortgage.  In the process, I had an appraisal which showed that the value of my house had rebounded (from '08 and '09) to $298K.  I owe $236K.  Nice to know I am no longer underwater.

I have a 2003 Toyota Tacoma, which has been paid off for several years.  Since April, I have done NO clown car driving.  I commute to my job on foot or on bike, and have done so for 15 years.

I am a tenured Associate Professor, and, after 15 years, am finally making a comfy living ($68,000).

Other changes I made recently:  called my internet company and got my monthly fee changed from $55 to $30, switched from Verizon to Ting (monthly phone bill should change from $50 to $25-30), and am considering changing insurances.

I hope to attack the loan against my retirement and my mortgage and retire within the next 10 years.

Yes, many of us have made mistakes in the past, but now, with the help of the MMM community, we can use our collective wisdom, flex our frugality muscles, and progress towards FI.

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Re: anyone over 40 and trying to catch up?
« Reply #40 on: September 03, 2013, 05:31:21 AM »
Yes! My husband and I are mid-40's. We had zero debt for years in our 30's, but fell back into the trap. Finally made the decision to bang out our current debt (approximately $60,000 at the beginning of the summer). If all goes well, in 2016 we will be 100% debt free again!

Prioritizing debt payoff was hard (especially with my car loan at 2%) but it's silly to have debt when we just simply can't handle it.

I'm just glad we never took out a mortgage on our house....

Daleth

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Re: anyone over 40 and trying to catch up?
« Reply #41 on: September 03, 2013, 03:34:56 PM »
Psychomoustache, one thing that jumps out at me is the 600 euros you pay for your office. Isn't it possible for you to have your office--yes, including the room where you see clients--in your own house? Especially since your house is larger than you need, and is also located in such a convenient area--I assume if it's convenient for you to get from home to shopping/town, it's probably also convenient for others to get to your house.

Perhaps some rearranging of furniture and/or minor renovations might be necessary to make this workable, but especially since your children are in school and your husband works--in other words if I understand correctly the house is empty much of the day--couldn't you save a lot of money (600 euros/month, to be exact) by seeing your clients there? Such an arrangement is permitted even in the US, which has much more draconian zoning laws than France does.

As for US taxes, I remember having to file when I lived in France, and not paying because (you are correct) they don't double-tax. There is an amount of income--not gross income--that is excluded every year, in other words if you make less than that amount (which these days is around $90,000) there is not even a possibility that you would owe any US income tax. And if you make more than that, then the taxes paid in France would be credited against any tax you could theoretically owe in the US, so you're once again generally not going to owe anything. This is a very simplistic sketch but hopefully it will help reassure you somewhat.

pachnik

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Re: anyone over 40 and trying to catch up?
« Reply #42 on: September 03, 2013, 10:34:01 PM »
I'm definitely over 40 (49).  I found out about the MMM website 4 months ago. 

Clearly, too late for early retirement but I will be able to retire in 10 years or so making me 59 or 60 years old at retirement.  Basically, I don't have to add much to my RRSP/TFSA's for this to happen.   However, my spending patterns have changed dramatically because of what I have learned here so who knows. 

What I get from being here is the ability to live on less money and have a good life while doing so.  This gives me a double-whammy of financial security - saving more money and needing less to live on.   This website has completely changed my perspective on money.  I am willing to look at things with an open mind and see if there is an inexpensive way of dealing with the situation.  I used to just spend without thinking about it.  And actually, some of the inexpensive ways of dealing with things are more fun to do - such as baking someone a birthday present rather than just buying something at the mall. 

I really can't catch up (for an early retirement) but I sure have a new way of doing things which will serve me well regardless of what happens.  That is the gift here for me.




Mark B

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Re: anyone over 40 and trying to catch up?
« Reply #43 on: September 04, 2013, 05:20:58 PM »
Sigh, I am 55 years old, and I can't believe I'm writing this, or I should say I can't believe I'm in a position to be writing this.  Although I'm glad I found the MMM site, and I'm totally bought into the lifestyle, I find that I have to constantly fight feelings of hopelessness over my situation.  I don't think catching up is really an option.

I didn’t start earning a nice salary until my late 39's, but since that time I’ve done ok.  I’ve worked in several areas of the Information Technology field for about the last 18 years or so, from pretty technical stuff to management. My last (contract) job as a Network Engineer paid about $130k.

In 1999 I hired on with a large company that I thought I’d stay with until retirement--and along with retirement would be a nice pension.  Then in 2008 I got laid off in a big outsourcing move that was totally out of the blue.  I still had several years to go before getting fully vested for a pension, so that was that.  Since then I’ve jumped around quite a bit, mostly doing long term contracts, most of which were negative experiences in terms of being worked to death or having to endure environments where politics took precedence over, well, everything. 

I’ve been interested in the stock market for over a decade, and over the last 2-3 years I’ve done a lot of day trading in my off hours (I worked mostly swing shift so my mornings were free).  I worked hard at honing my trading skills, and started to consistently make money.  I made nice money from September 2012 through May of this year.  Meanwhile, my regular job required 70+ hours a week in a very stressful environment, plus a long commute (in fact, my entire IT career averaged 65+ hours a week).  I decided in April that just couldn't stand it anymore and would step off of the corporate hamster wheel to day trade for a living. My last day of work was this last May 17th.

Well, that has only gone so-so.  In fact, "so-so" is probably optimistic.  I’m not sure I’m going to make it as a day trader.  I’m really concerned. 

The thing is, at this point in my life I’m just so, so sick of the corporate world I’d endure almost anything to not go back.  And if does come down to having to go back to a job, I have lots of experience but my skills are pretty obsolete and run of the mill at this point.  I don't think I'd be competitive in the job market.  So, I'd have to mount a re-education program for about the 5th time in my life.  Also, I had two jobs over a 17 year period, but since 2008 I've had six jobs.  It can be all be explained, four of the six were contract positions at the same large company from which I got laid off, but

Regarding my personal habits, I’ve never been exactly spendy, never wanted to buy big, showy, expensive things, but until not too long ago I lived my financial life totally unconsciously. I did all the dumb things MMM talks about.  I bought my lunch every day; I commuted almost 40 miles to work one way; if I wanted something, I bought it;  I financed new cars (nothing fancy, ever, but new).  I took money out of my house to buy an “investment property” in 2006 (perfectly timed to hit the top of the market), which I had to short sell last year. 

One more thing:  my wife and I divorced in 2012, after 24 years of marriage.  My now ex-wife worked this to perfection, and as a result I had to pay a six figure sum of money to her, and I further pay a significant amount in alimony.  In California, any marriage lasting 10 years or more is considered a “long term marriage,” which means there is no set end to the alimony.  So, unless she gets remarried, starts earning significant money (not too likely) or dies, I’m on the hook for alimony ($1850/mo.!) for the foreseeable future.  This was a savagely fought divorce--my ex stated to my face that she was out to take everything I had--so it cost a ton in legal fees on top of everything else [Feeling defensive here--no, I didn't cheat on her, LOL].  I can challenge her claim to alimony periodically, but that in itself can be expensive and I'd have to have good inside information on her current situation. It's a tough, tough position to be in.

At this point I live a pretty effing frugal life.  I started riding my bike locally, I’m going to get a scooter, I have no debt other than my house, I don’t have cable TV, I have a relatively pricey mobile phone plan but will be changing to Republic Wireless in the next month, I have AAA car insurance but will be changing that in the next month as well.  My car is relatively economical (a 2008 Honda Accord 4 cyl), and I own it.  I almost never eat out.  I have two room renters who contribute a total of $1150 a month.  I watch the utilities like a hawk, or as much as I can with two tenants.

Still, though, I can’t stop wondering what the use is of all of this frugality, since there's so little time left to change things significantly.  If I didn't have to pay alimony, maybe I could live on next to nothing and save a ton of cash for 10 years, until I was 65.  But, I DO have to pay alimony, and with that and my mortgage payment, even if I start making good money trading again or I (god forbid) go back to a regular job, my expenses are a huge headwind.  Just my combined alimony and mortgage payment are $4480/mo., which means I have to gross around $70k/year just to pay those two items.  My room rental income brings that down to $3330/mo., but that is still a large chunk of cash. It's very discouraging (trying not to use the other "D" word).  It seems like I’m destined to bust my ass until the very end--I have this vision of my coworkers finding my 76 year old body in my worker bee cubicle, slumped over my computer.

Just a few numbers: 

I have about $150k equity in my house (I owe $360k), $50k in my trading account, and a tiny IRA ($90k).  I live in southern California, and my only family, my daughter and grandson, are nearby, so I'm reluctant to move away from them to a cheaper housing market. 

My other bills (other than mortgage and alimony) come to about $1200/mo, including $300/mo. for miscellaneous.  So, it'd be pretty much impossible to get my monthly responsibilities under about $5200-$5300/month.

As far as income...shit I don't even know.  When I was trading part time I was making about $8k/mo, but for the last couple of months it seems that every button in my trading software should say "donate $500".  Trading is very lucrative if you're good, but I've gotten frustrated and down on myself, and have done dumb things just out of being obstinate.  When you try to get into a pissing match with the market you almost always lose. 

Anyway, I'm not even sure what the purpose of this post is, other than to get it off my chest and because, by God, there's a category in the MMM forum called "anyone over 40 and trying to catch up?".
I'll take any feedback, though, if it's offered with positive intention.

Argyle

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Re: anyone over 40 and trying to catch up?
« Reply #44 on: September 04, 2013, 05:40:06 PM »
Mark B., I'm sorry for your situation.  It sounds as if something drastic is going to have to happen for something to change.

I'll just say that I know a lot of people who've tried day trading -- but not one has succeeded longterm.  I'm sure there are some people who have, just by the luck of the draw.  But I do think it's pure chance (though no doubt the successes think it's under their control), and the chances are small.  In short, as you've experienced, I don't think day trading is a way out of the hole.  It's most likely a way of digging the hole deeper.  Like gambling, you have to know when to stop -- and most people don't stop till the losses have started to mount.

I don't know how portable your other skills are.  I do know that you could live in many rural areas in the midwest with a rent of around $300 a month, and fly in to southern California to see your daughter and grandchild one weekend a month -- heck, two weekends a month -- and come out thousands better than you're doing now.

I think to turn this situation around, you can't take any option off the table.  Or else you end up in a corner with no options, as you are now.

If I understand correctly, at this rate you're never going to come out on top with this mortgage, that is, you're not going to pay it off before you're retired.  Is it time to let go of the house? 

Is it possible to start over in a much lower-paying but more tolerable profession?  With a much lower earning potential, conceivably you could reduce the $1850 alimony payment as well.

It sounds to me as if it's time to take the plunge into some entirely different options.  Maybe brainstorm twenty or thirty, and take the ones that sound the most exciting.

Hugh H

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Re: anyone over 40 and trying to catch up?
« Reply #45 on: September 04, 2013, 05:53:05 PM »
Mark,

Seems like you may have to suck it up and go back to work. Like Argyle mentioned, I would move somewhere in the mid West to pay little rent (assuming you can find a job there). I would sell that house and grab the equity to assist you with your plan.

That alimony payment is PURE BS!! I don't know the options but I would devote a significant amount of time and effort on figuring out how to get rid of it. I mean, perhaps since you have no stable income right now the court can take a look at that again?

Roland of Gilead

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Re: anyone over 40 and trying to catch up?
« Reply #46 on: September 04, 2013, 05:59:39 PM »
Started really saving at age 35, so a bit before 40 and went from negative net worth to 1.1 million in the past 8 years by extreme saving.  Imagine if we had not wasted the 15 years before that!

I don't think 40 is too late to start, but might take you until 50 or so to get to where you want to be.

Mark B

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Re: anyone over 40 and trying to catch up?
« Reply #47 on: September 04, 2013, 10:44:26 PM »
Mark,

Seems like you may have to suck it up and go back to work. Like Argyle mentioned, I would move somewhere in the mid West to pay little rent (assuming you can find a job there). I would sell that house and grab the equity to assist you with your plan.

That alimony payment is PURE BS!! I don't know the options but I would devote a significant amount of time and effort on figuring out how to get rid of it. I mean, perhaps since you have no stable income right now the court can take a look at that again?

First, thanks everyone for the supportive and constructive comments.

Here's the thing about the alimony--all attorneys and divorce court judges in California use the same alimony calculating software.  They use the previous year's salary, and expenses are generally not even looked at.  When we went through the divorce, I had made about $110k the previous year and she showed a zero income (that is a very long story).  I had a forensic accountant go through her finances, and same result.  There was just nothing to be done.  My attorney, her attorney, and the judge were all in agreement about the amount of alimony.  Well, mine wasn't in agreement, exactly, but he said the figures were the figures.

Now, regarding my current income, an ex-spouse who is paying alimony can't just quit his/her job and say "sorry, can't pay you alimony because I'm not making as much money".  That's a voluntary change of status.  If I got laid off from my job that would be another matter entirely as it's not voluntary, and I'd be able to negotiate a modification.

So, my last job was officially a two year contract, and there was no option to be hired on permanently after the two years.  Follow me on this...I quit before the two years were up.  They would have been up in about 13 months (October 2014).  So, I'm thinking that after that time has gone by, if I'm making less money I can say that no matter what, this $130k/yr job would be over.  That might be a legitimate way to get a reduction, at the very least.

I really, really, don't want this thread to be about my divorce, but the reason my ex showed a zero income in 2011 was that she was awarded the business we had started (I got the house and my IRA).  She was devoted full time to the business and was able to show zero income basically because of an accounting anomaly.  What she's continuing to do, though, is pay her two sons, whom she lives with, nice salaries while taking no salary herself.  She's essentially funneling money through her sons.  We still share the same accountant, and he told me that he warned her this would not fly, that it was a common but easily discovered trick, but she continues to do it.  So, that's something I'll be looking into at the end of this year.

I've been thinking seriously about selling my house, but staying here in southern Cal and doing a very cheap option like renting a room.  I want to try making the rent even cheaper by offering to do some work around the house.  I do everything around this house now, so it would be no problem to do yard work or something for someone.  This solution would also eliminate utilities and home insurance.  It would be hard to swallow giving up my house, though, and I've got two big dogs, one of which I'm very close to. We rescued each other--I rescued him from a shelter and probable death, he rescued me from my funk at the lowest point of my divorce. 

About the trading--I know most of you have no experience with it, and looking at it from the outside it looks like gambling, but really it's not.  Yes, like gambling, you can lose money.  But you can also lose money, or not make any money by starting a business.  Is that gambling?  There is randomness in it and no one can make money 100% of the time, but markets are not random no matter what you've heard. And I don't actually trade stocks, I trade futures, which are a bit different.  Over a 10 month period when I really focused on my trading I traded most days and averaged 8-10 trades per day.  That was a total of around 1200 trades, and 89% of those were profitable. Much better than what random chance would dictate.  Anyway, I'm sure this could be a thread all by itself, but I'm going to continue to trade for the time being. 

So...after the exercise of writing about my situation, then reading the excellent comments, here's what I'm going to do starting tomorrow:

1. Start upgrading my skills by studying for some industry certifications.
2. Start looking for a job (f*ck!).
3. Continue to trade every morning.
4. The house...I had wanted take advantage of the rising market for a little while longer while also paying down the mortage a bit, but I guess I should sell it.  It's gonna take me a little while to be able to pull the trigger on this one though, I've been in this house for a long time.
5. Do a consultation with another divorce attorney.

Thanks again for the input. 

Spork

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Re: anyone over 40 and trying to catch up?
« Reply #48 on: September 05, 2013, 08:30:37 AM »
About the trading--I know most of you have no experience with it, and looking at it from the outside it looks like gambling, but really it's not.  Yes, like gambling, you can lose money.  But you can also lose money, or not make any money by starting a business.  Is that gambling?

For the purpose of this exercise: Sure.  They're both gambling.   They're gambling in the sense they both have a very high risk/reward ratio.  And if I understand your situation: it sounds like you really don't have the cash to risk either.

In general, there are a ton of experienced day traders out there that are 100% convinced that they can time the market properly... up until the point that they cannot.

If you are going to do this: do it with money you can afford to lose.  Don't rely on this as your sole investment income.  Do it with the philosophy that you're 100% sure you are going to lose every penny and that you have enough money to cover if that is the case.  Don't do it on margin.

If you make money: awesome.  Take a good percentage off the table and move it into a lower risk vehicle like an index fund and try again -- still with the idea that you will lose it all.

MelodysMustache

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Re: anyone over 40 and trying to catch up?
« Reply #49 on: September 05, 2013, 09:43:44 AM »
I am 45 and making up for lost time.

I was widowed at the age of 39 after being a caregiver to my late husband for his ten year long illness.  I was also raising my kids during that time and working full time.  My LH didn’t much care about saving for the future because he knew he did not have one.  However, I do and he left me quite a mess to clean up.  Plus the timing of his death was right at the beginning of the recession.  Note that whoever dies with the most toys is still dead.

Since that time I have gotten myself into much better financial shape.  I have not been a MMM level saver, but the debt is gone, my retirement accounts are much healthier, and my current job pays more.  The kids are now grown and almost gone. (The younger one just boomeranged back.)

With a bit of luck and lots of hard work I should be FI in about ten years.  I will probably continue to work in some form, but I want to have the freedom of choices that FI will give me.