[EDIT] - This is a cleaned up, much less confusing and more informative than my original post. It might be that it'll make the first thirty or so replies read funny, in that case I apologize to the people that patiently answered my original diatribe. Especially swissmade, for helping me figure out the parallels between swiss systems and US ones.
Hi. I've found MMM only about a couple weeks ago, been devouring everything since the beginning since, and I actually feel like crying a little bit. I'm 38 years old, SO's 37. We were working for very little in Portugal until our mid-twenties, then we got a golden opportunity to come live and work in Switzerland. Our job has paid a shitton of cash for years. But we've made a bunch of really silly financial mistakes, which all served to effectively zero out our cash reserves each time. The last of these was two years ago, so we've gotten a bit of cash back. But until Mr Double M came along, we wasted so much money on random shit, videogames, buying expensive crap as therapy, etc that the reserves I have right now to plan my future with are relatively low. Also at 38 I'm not sure I can call my plan "early" retirement anymore, my current hope is that I can do it by 45. I have a newborn son, a bunch of fat I can cut off my expense sheet, and an amazing salary that can (hopefully) help me get there that soon. We'll see.
So here's my current financial situation. Note that this is after I've made some changes already to become more Mustachian, while some special circumstances (inlaws living with us for a few months now, taking care of groceries themselves) mean that other info needs to wait a while before I have actual data. So it's the situation *now*, not the situation that led me to this place.
All values are in CHF, but it's enough of an equivalency to USD that you can just take it at that.
Income:
Salary for both of us (after taxes) 210,000
Notes: our salary is our only source of income. Our 'roth' and '401k' appreciate, pay dividends, and compound, but it's all automatically reinvested so it's not real disposable income, just a thing that makes 65 year old me richer.
Expenses (yearly):
car insurance 2450
tv tax 460
Heat 1200
health insurance 6500
Tire change 240
Yearly Inspection 540
accountant 300
road tax 360
rent 33000
Net/TV/Phone 1300
gas 1300
club membership 1200
Gym Membership 1200
Groceries 12000
Total 62050
Notes: Groceries are estimates. The problem with the way I was living my life up until VERY recently is that I didn't have a clue where the money was going. Videogames, expensive crap, gadgets, restaurants/takeout/lattes/etc were basically melting our money. Now it's getting slowly but surely nailed down, so without the stupidity hemorrage, I have about 70k or so I can save extra per year.
Savings (yearly):
2 pillar (401k) 12000
3A pillar (roth) 13632
3B pillar (roth) 26712
Low Risk Funds 24000
Total: 76344
Notes: This is the automated saving I had going before finding MMM. Some like the 401k come from way back, others I've started much more recently (I've started buying funds a couple months ago).
Assets:
fully paid Mazda CX-7 30000
roth 200000
Funds 5000
401k 150000(?)
Funds in son's name 100000
Notes: I *have* money on my 401k, but I'm not sure how much. Statements are yearly, I'll get mine in a few weeks. But it should be around that.
Liabilities:
None. Thankfully, even though I've spent money like an absolute idiot, I've never believed in getting into debt for anything. My car is fully paid, I rent an apartment, my credit cards are fully paid each month, etc.
Goals/Questions:
My goal is to get financial independence and leave the desk I'm nailed to. This is going to take a while, because (as it's visible from the discrepancy between by large income and my low assets) I'll be starting mostly from scratch. In the past few weeks I've slimmed down considerably already (my expenses were about 2k a month higher than this before I started reading MMM) and have finally relinquished the stupid attitude I had, where I was an engineer, not an economist, knew nothing about money and was fine that way because my salary was so big I didn't need to care. The expenses can still be cut considerably, and as you saw I have 70k I can save per year. Future should be OK if this was all.
But now there's the newborn. All these plans and such are assuming my wife and I worked 100%. But neither of us want that now, we'd like to not completely miss our son's early years. So that means reduced income. I don't think we can afford for one of us to quit entirely (and to be frank we don't want to) which means a babysitter. We also finally started talking about our apartment, the rent, a new house, and slowly losing the fear of real estate that our previous costly mistake raised in us.
This is then the reason I'm writing this: I'm too new at this shit to be able to add all this new information to my plan. Can you more experienced people guide me through the near future? What should i do to keep my goal of FI at 45? Should we get the babysitter, do you think we can still do it if one of us drops out of work, any advice? I've read the MMM articles on how little a baby costs, but that's not my fear. He was already retired and FI when he had the kid, I have to now start planning for mine with this extra difficulty added on. Also, what about renting vs owning? If I do own, I expect the advice is to keep paying just the interest and invest the money on investments that pay more than the interest rate? Or would it be better to stay where I am, and ammass a big enough stash that I can just buy a house by the time I retire?
Thank you all for your responses so far, and I hope this edited post clarifies and crystallizes what I actually mean to ask.