Author Topic: Help me reinvent my life  (Read 4002 times)

regaphysics

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Help me reinvent my life
« on: May 31, 2017, 01:49:10 PM »
Hi all,

I realize you must all see tons of posts like this, but I am hoping you can help me out with some wisdom.  I'll try and be as concise as possible.  My long-time GF and I are in our early 30s, have been working corporate jobs at big law firms in a major city for the past 4 years, and are sick of it.  We are not big city people.  (We hate the stress and traffic and pollution and noise.  We like nature and quiet and a slower pace of living.) 

So we are planning our escape.  Over the past months, we have been identifying smaller cities that have jobs that can support us, outdoor amenities we enjoy, and a lower cost of living.  For now the plan is for at least one of us to stay in the legal profession (we enjoy it decent enough, and we have big $$ sunk into our educations).   We are looking at mid-sized cities like Colorado Springs, Tuscon, Boise, and Fayetteville AR, for example.  We are home-bodies, and plan on putting a large % of our money into our home and property, where we spend most of our time.

We are not frugal like you all, but we have managed in the last 4 years to pay off all of our student loans (and all other debts), and now have some ~450K in total combined cash assets.  About 150K of that is in our 401K, and the rest has been sitting in a 1% savings account (I know this is terrible, but the plan is to use a big portion on a down payment and we are nervous to dump it into the stock market). 

If one of us gets a job and the other does not (the most likely scenario), our income should be in the 100-150K region.  We do not spend much on luxury items such as clothes or fancy food or cars, but we do spend money on groceries, netflix/amazon prime, hobbies, and some travel.   Our current spending is probably around ~65K per year combined, but I imagine we could cut that down to 55K or so with some slight changes + moving to a less expensive location.  I'd say a house in the areas we are looking at would run us about 550K.  Kids are in the not-to-distant future - perhaps two.

So: my question for you all is:  assuming my GF gets the "stable" job, what can I, in conjunction with our nest egg, do to help accumulate some wealth?   

My goal is to (1) get out from behind a computer screen all day, (2) be my own boss, and (3) increase our wealth.  Obviously, some portion of our nest egg will go to our home down payment -
 maybe 100k.  That leaves me with 200k or so that isn't wrapped up in our 401K. 

One option is to simply invest the 200K and work odd jobs that don't cost too much, like freelance writing or tutoring.  Another option would be to invest in some tools and increase my DIY skills (which are meager but existent), and use them to fix up our house (and perhaps make/sell things on etsy).  I have also considered using part of the nest egg to buy some rental properties,or perhaps opening my own small business (perhaps growing medical marijuana if the state permits it, since I enjoy gardening).  Ultimately, I have no clue comparatively which of these options are a good way to accumulate wealth efficiently.  I know this is somewhat all over the place, but that's why I am here.

Finally, a vague question.  What nuggets of wisdom do you all have for someone making such a move?  What pitfalls do you see? 

Thank you!

charis

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Re: Help me reinvent my life
« Reply #1 on: May 31, 2017, 02:07:33 PM »
It sounds like you are planning to quit being a lawyer but your wife will continue working and have a couple of kids in the near future.  Is she on board with this plan?  You can be your own boss and practice law, btw.

Vindicated

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Re: Help me reinvent my life
« Reply #2 on: May 31, 2017, 02:08:48 PM »
I'm sure you'll get much better advice than anything I can give, but I'll try.

First, determine where you want to live.  It looks like your options are wide open, but you really need to consider the long-term living location.  Do you want to be close to family and/or friends?  If that's not important, then climate may be your driver.  This choice will greatly affect any other decision you make, in regards to jobs, hobbies, or rentals.

Are you sure your GF wants to work while you pursue other interests?  Be careful not to breed resentment by expecting her to work while you do fun stuff.  Since you don't mind Law, maybe you should establish a niche practice and take on a low volume of clients.  Just enough to make some money, but not dominate your life. 

Once you know where you want to live, $550k is a mansion in the cities you listed.  How big of a home do you need?  My "dream home" in Indianapolis is ~$250k.

Next, put 20% down on your mortgage, and put the rest into Vanguard VTSAX or similar.

Cutting your spending down from $65k should be pretty easy for you if you just start tracking your spending, and realizing where it's all going.

Good luck!

2Birds1Stone

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Re: Help me reinvent my life
« Reply #3 on: May 31, 2017, 02:31:42 PM »
If you are not married I would consider the implications of a breakup.

If one of you keeps the high paying career with the other quitting, how would you divide the pot and get back into the work force after not practicing for an extended period of time?

regaphysics

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Re: Help me reinvent my life
« Reply #4 on: May 31, 2017, 02:36:11 PM »
Thanks for the replies.  My SO is supportive if I want to do something else, as long as I am not being a lazy deadbeat.  If I am doing what I enjoy and earning only 40K, she supports that.  Re: location, we have spent a long time identifying cities we enjoy - so now the question is really where can we find at least 1 good job between us, so that we have something reasonably stable.  Also,  I am entirely open to being my own boss in the legal profession, but based on research and talking to folks my takeaway is that its a risky and difficult proposition (malpractice insurance + building out an office + litigation financing etc involves a lot of upfront costs and an unsteady income stream).   (finally, re: breaking up, we will be married in the next year or two.)

Edit: just to be clear, the goal is not for me to be "having fun" and her to be working.  Rather, the question is how can I, without a regular 9-5 job for a corporate employer, leverage our nest egg or some of my skills to make $ in a non-traditional fashion that will give me some more autonomy, satisfaction, and perhaps greater earning potential.
« Last Edit: May 31, 2017, 02:45:33 PM by regaphysics »

Shanksy

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Re: Help me reinvent my life
« Reply #5 on: May 31, 2017, 02:51:45 PM »
I'm from Tucson, AZ and it's a great town. You can easily find a mansion there for 350k. It's a very low cost of living place. It also has some of the best food anywhere! Especially if you love authentic Mexican food. I have nothing to add except I miss Tucson sometimes. I'm in Phoenix now, which is a bigger metropolitan and has a lot more job options, plus you could still get a mansion for 350k. Good luck!

Dee

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Re: Help me reinvent my life
« Reply #6 on: May 31, 2017, 03:27:53 PM »
Have you thought about being a research lawyer? Not sure what the demand would be where you're going (and presumably neither do you, since you don't know where you're going)? Or teaching continuing legal education to other lawyers? Are you dismissing the idea of working as a lawyer like your GF based on the premise that you are only likely to get one job offer in an appropriate location?

Maybe the approach to take would be for both of you to be seeking law jobs in suitable locations and when one of you gets an offer they want to accept, for the other to then keep seeking employment in the same location?

I think your brainstorming makes sense, btw, and that you will arrive at appropriate sources of income when you are in your new location. For example, as you say in relation to the feasibility of growing medical marijuana, this would really depend on local regulations, soil conditions, etc. and whether or not it's likely to be a profitable pursuit will depend on *where* you are. So until you know *where* it might be difficult to evaluate the merit of various ideas.

Please keep us posted - I'd love to hear where you wind up and what you wind up doing : )

regaphysics

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Re: Help me reinvent my life
« Reply #7 on: May 31, 2017, 03:41:53 PM »
Have you thought about being a research lawyer? Not sure what the demand would be where you're going (and presumably neither do you, since you don't know where you're going)? Or teaching continuing legal education to other lawyers? Are you dismissing the idea of working as a lawyer like your GF based on the premise that you are only likely to get one job offer in an appropriate location?

Maybe the approach to take would be for both of you to be seeking law jobs in suitable locations and when one of you gets an offer they want to accept, for the other to then keep seeking employment in the same location?

I think your brainstorming makes sense, btw, and that you will arrive at appropriate sources of income when you are in your new location. For example, as you say in relation to the feasibility of growing medical marijuana, this would really depend on local regulations, soil conditions, etc. and whether or not it's likely to be a profitable pursuit will depend on *where* you are. So until you know *where* it might be difficult to evaluate the merit of various ideas.

Please keep us posted - I'd love to hear where you wind up and what you wind up doing : )

Thanks for the encouragement!   As you might imagine - it is very hard to find 2 good paying jobs simultaneously in a smaller city, which is why we have been considering the possibility of only one of us getting a job at the outset.  Once we started considering that possibility, I started to consider the fact that I might be able to use this opportunity to do something other than just a law firm-type job.  I have started to consider either opening my own business, or developing some new skills.   I have not dismissed a legal job.  As I said earlier, I don't hate being a lawyer, but I don't love it either.  I really would like to get out from behind a desk all day where I have to bill for every 6 minutes of my time (among other things).  That is why I am coming here - to explore the possibility that perhaps I can use the money I have accumulated to propel myself into something more gratifying and, at the same time, lucrative.   

Smokystache

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Re: Help me reinvent my life
« Reply #8 on: May 31, 2017, 06:24:21 PM »
Others have already mentioned this, but I'm going to do it again. Unless you absolutely hate the legal field, it seems like the best way to leverage your education and experience is to become a narrow specialist where you can charge solid (or crazy) rates so that you can make $40-90k+ working half time or less. Read, interview, and google everything you can on lawyers who work in non-traditional situations away from big law firms.

I have a family member who does this - specializes in a specific niche of international law (so it doesn't matter which state he's in) and gets paid crazy wages (to me) and could easily scale down, but still make major bucks without working more than 15-20 hours a week. That gives you time to get outside, be healthy, spend time with future kids, be able to move again if wife finds a great opportunity, etc. I know lawyers who only work with recycling centers, crematoriums, forestry companies  ... you get the idea. In a niche market, people are looking for someone who understands their jargon and work situation.

Lady SA

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Re: Help me reinvent my life
« Reply #9 on: May 31, 2017, 07:28:13 PM »
if you are going to be moving to a new area, I highly recommend renting for at least a year to get a feel for the area, scope out potential neighborhoods, and just enjoy the new town. All these smaller cities you can scope out the market, but at most I think you could get away with a 250-350k house, so a 60k downpayment.

so you have 300k just hanging out in a savings account? yikes. I would keep 60k for a downpayment, and then invest the rest. Do you qualify for an IRA? Max your 401ks first, then IRAs (traditional if you qualify for the deduction, roth if not), then everything left over put into a taxable brokerage account. Invest everything in low cost index funds. The best time is now, waiting for the "right" time to enter the market is trying to time the market which is just gambling.

Even if you put it all in today and the market takes a nosedive tomorrow, you're not planning on selling for many years, so it really doesn't matter how the market behaves in the short term. Actually, if it does tank, that means everything is on sale and you should celebrate by buying MORE! Read this: http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Try to get over the fear of the market and start getting that ~250k working for you.

regaphysics

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Re: Help me reinvent my life
« Reply #10 on: June 01, 2017, 08:17:20 AM »
Others have already mentioned this, but I'm going to do it again. Unless you absolutely hate the legal field, it seems like the best way to leverage your education and experience is to become a narrow specialist where you can charge solid (or crazy) rates so that you can make $40-90k+ working half time or less. Read, interview, and google everything you can on lawyers who work in non-traditional situations away from big law firms.

I have a family member who does this - specializes in a specific niche of international law (so it doesn't matter which state he's in) and gets paid crazy wages (to me) and could easily scale down, but still make major bucks without working more than 15-20 hours a week. That gives you time to get outside, be healthy, spend time with future kids, be able to move again if wife finds a great opportunity, etc. I know lawyers who only work with recycling centers, crematoriums, forestry companies  ... you get the idea. In a niche market, people are looking for someone who understands their jargon and work situation.

Thanks - that is good advice and I have in fact been looking into this.  The difficult part is finding a city that has work in my niche area of law and also has a job for my SO.  The international law niche seems useful from that prospective - but I haven't (thus far) been involved in that area of the law.     

regaphysics

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Re: Help me reinvent my life
« Reply #11 on: June 01, 2017, 08:20:46 AM »
if you are going to be moving to a new area, I highly recommend renting for at least a year to get a feel for the area, scope out potential neighborhoods, and just enjoy the new town. All these smaller cities you can scope out the market, but at most I think you could get away with a 250-350k house, so a 60k downpayment.

so you have 300k just hanging out in a savings account? yikes. I would keep 60k for a downpayment, and then invest the rest. Do you qualify for an IRA? Max your 401ks first, then IRAs (traditional if you qualify for the deduction, roth if not), then everything left over put into a taxable brokerage account. Invest everything in low cost index funds. The best time is now, waiting for the "right" time to enter the market is trying to time the market which is just gambling.

Even if you put it all in today and the market takes a nosedive tomorrow, you're not planning on selling for many years, so it really doesn't matter how the market behaves in the short term. Actually, if it does tank, that means everything is on sale and you should celebrate by buying MORE! Read this: http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Try to get over the fear of the market and start getting that ~250k working for you.

Thank you.  I know this is perhaps not the correct forum - but is there a consensus for a good index fund around these parts?  I see so many different vangaurd funds thrown around - but I can't decide if they are all just variations on a theme or if some are really better options than others.  My 401(k) is heavily invested in the US stock market, so I think I would prefer something a bit more diversified (and conservative) at this point (perhaps 25% bonds, 50% US stock, 25% international/real estate?).  I would prefer something lower risk (5-10 year time horizon), since I still think opening a small business may be in my future. 

Edit: also, re: IRA, my understanding is that I do not qualify for either the traditional or roth, since I make over 200K at the moment.  Is that not accurate? 

Lady SA

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Re: Help me reinvent my life
« Reply #12 on: June 01, 2017, 10:31:29 AM »
if you are going to be moving to a new area, I highly recommend renting for at least a year to get a feel for the area, scope out potential neighborhoods, and just enjoy the new town. All these smaller cities you can scope out the market, but at most I think you could get away with a 250-350k house, so a 60k downpayment.

so you have 300k just hanging out in a savings account? yikes. I would keep 60k for a downpayment, and then invest the rest. Do you qualify for an IRA? Max your 401ks first, then IRAs (traditional if you qualify for the deduction, roth if not), then everything left over put into a taxable brokerage account. Invest everything in low cost index funds. The best time is now, waiting for the "right" time to enter the market is trying to time the market which is just gambling.

Even if you put it all in today and the market takes a nosedive tomorrow, you're not planning on selling for many years, so it really doesn't matter how the market behaves in the short term. Actually, if it does tank, that means everything is on sale and you should celebrate by buying MORE! Read this: http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Try to get over the fear of the market and start getting that ~250k working for you.

Thank you.  I know this is perhaps not the correct forum - but is there a consensus for a good index fund around these parts?  I see so many different vangaurd funds thrown around - but I can't decide if they are all just variations on a theme or if some are really better options than others.  My 401(k) is heavily invested in the US stock market, so I think I would prefer something a bit more diversified (and conservative) at this point (perhaps 25% bonds, 50% US stock, 25% international/real estate?).  I would prefer something lower risk (5-10 year time horizon), since I still think opening a small business may be in my future. 

Edit: also, re: IRA, my understanding is that I do not qualify for either the traditional or roth, since I make over 200K at the moment.  Is that not accurate? 

Most people around here do Vanguard's Total Stock Market Index fund, but your allocation is entirely personal based on your risk tolerance and your goals. Read more here: https://www.bogleheads.org/wiki/Asset_allocation
Sounds like you just need to do a bit more research to figure out what allocation and funds best meet your needs.

For the IRA, if you make too much to qualify for a roth ira, you can do a backdoor roth (essentially, contribute un-deductable funds to a trad ira then convert into a roth) https://www.bogleheads.org/wiki/Backdoor_Roth_IRA

MsSindy

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Re: Help me reinvent my life
« Reply #13 on: June 01, 2017, 11:34:12 AM »
I strongly second renting in your new area first - gives you some time to check out neighborhoods / commutes, etc.  Also, before you sign a mortgage, be sure that you're married.

You also really need to do some honest soul searching to determine if you would be good at running your own business.  The fact that you are so risk-adverse (i.e. basic investing), would be a concern for being a successful entrepreneur.  Successful entrepreneurs are driven, they hustle, and they take risks.  Other entrepreneurs just work a lot of hours and make a decent wage (think of your average pizza shop).  You really need to identify if this business is something that you're passionate about, or that you have a unique market position, or something else that's going to ensure success.   I would hate to see you invest your nest egg in a business then realize that you're really not cut out to be an entrepreneur.

Consulting is a good way to bridge between full entrepreneur and cubicle drone - relatively low risk, but you still have to hustle for clients.

The ideas that you've listed (Etsy, gardening) are not money makers on an hourly basis; would be hard pressed to make $40k  (unless you're a full-time carpenter or something).  Your GF may support the idea now, but I suspect that once she's been doing the drudgery office work for a couple years and you have some freedom, resentment will start to set in.  Maybe this works for a bit, but be prepared to change roles so she gets a break, too.  Also, if you plan on kids, how do they fit in with this picture of her being the FT structured worker?

I know I haven't been entirely helpful, but hopefully gave you a few more things to think about as you're mulling all this over.

regaphysics

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Re: Help me reinvent my life
« Reply #14 on: June 01, 2017, 11:50:14 AM »
I strongly second renting in your new area first - gives you some time to check out neighborhoods / commutes, etc.  Also, before you sign a mortgage, be sure that you're married.

You also really need to do some honest soul searching to determine if you would be good at running your own business.  The fact that you are so risk-adverse (i.e. basic investing), would be a concern for being a successful entrepreneur.  Successful entrepreneurs are driven, they hustle, and they take risks.  Other entrepreneurs just work a lot of hours and make a decent wage (think of your average pizza shop).  You really need to identify if this business is something that you're passionate about, or that you have a unique market position, or something else that's going to ensure success.   I would hate to see you invest your nest egg in a business then realize that you're really not cut out to be an entrepreneur.

Consulting is a good way to bridge between full entrepreneur and cubicle drone - relatively low risk, but you still have to hustle for clients.

The ideas that you've listed (Etsy, gardening) are not money makers on an hourly basis; would be hard pressed to make $40k  (unless you're a full-time carpenter or something).  Your GF may support the idea now, but I suspect that once she's been doing the drudgery office work for a couple years and you have some freedom, resentment will start to set in.  Maybe this works for a bit, but be prepared to change roles so she gets a break, too.  Also, if you plan on kids, how do they fit in with this picture of her being the FT structured worker?

I know I haven't been entirely helpful, but hopefully gave you a few more things to think about as you're mulling all this over.

All useful advice - thank you.  And you are right about consulting - I think that would be a great happy medium of risk vs. reward - the hard part is breaking into it and establishing clients without being in the industry for 25+ years first.  Regarding kids, my SO has already said she would prefer to work while I take care of the kids, since she is more career driven than I.  That is part of the reason I am looking to begin establishing something that can easily ramp down to part time (and then back up down the road).  If I could make 30-40K while also taking care of the kid(s), that would be extremely helpful financially.  Legal consulting, or some other sort of home business (freelance writing, tutoring, etc), would be a great way to do that.  Less upfront cost versus a traditional small business as well, which is a boon. 

regaphysics

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Re: Help me reinvent my life
« Reply #15 on: June 01, 2017, 11:54:20 AM »
Several people have suggested that you get married but I haven't seen any response.  In my opinion getting married is less of a significant step as is quitting your jobs, moving to a new city together, living together, raising kids, and getting a mortgage.  You are going to get married, right?

Yes - we will in the next year.