For the past few years, I've enjoyed a job as a programmer for a company in the Oil & Gas sector. This grew to a $95k salary working from home. I've maintained a 60+% savings rate during that run. Then last fall, oil prices fell. Layoffs began in January, and finally reached me last Thursday.
I think I'm going to try at make a go at ER/semi-retirement. I know I'm going to go for it for 3-6 months, and that may be enough to convince me one way or another about how to proceed past that point. Below are the current plans and numbers, as they sit. I welcome thoughts and criticisms. Note that I do not have an itemized/categoried budget, as I've never felt that was necessary for exceeding a 60% savings rate. But I do know overall expense numbers from Feb 2013 onward.
So, the income side:
I'll be getting another $4k by the time everything is said and done.
On top of that, I have a side business focused on low stakes poker training through
www.Grinderschool.comIt's a small site, with relatively low costs, but also a small audience that I haven't been able to grow significantly over the years. I have some plans for things to try to remedy that, but for now, let's assume that the pattern from the last several years continues unchanged. The site nets me around $1k a month.
On top of that, I have some outstanding business loan investments that provide a pretty sweet return: ~18k invested providing a reliable $500 per month with no impact on the principal. Eventually this will be paid back in chunks that reduce the balance, but we're 6-months to a year out from the first reduction.
The rest of my stash is in various stocks and index funds, totaling about $600k. That looks roughly like:
TSP: $350k (2 accounts)
401k: $50k (3 accounts)
Roth IRA: $67k (3 accounts)
Taxable: $110k
Cash: $17k
On the expense side of things:
We have a $250k mortgage, with $180k left, and payments of $1200 (including principal, interest, tax and insurance). One paid off car (2008 Altima w/ 70k miles). Our non-mortgage expenses over the past years have averaged $1700, prior to this year. That included fewer than normal home-repair / auto-care expenses, but an absurd amount of eating out, and a 120-mile 1x per week round-trip commute.
This year has included a lot of one-time expenses, due to my wife being pregnant with our first child. At this point, we've satisfied all deductibles for her insurance, so we'll be using COBRA to continue coverage through the birth of our child in the next month. Then we'll switch to something cheaper. I don't yet know the cost for COBRA coverage, but I expect it to be pricey as the plan we had was a pretty nice one. In the past, we had non-employer coverage for the both of us for just under $400 / month, though that will clearly go up once it's covering a third family member.
We also don't really know how much our monthly expenses will increase with the addition of a child. We have strong frugality muscles, so I expect it to be on the low end of the spectrum, but that's all I can say for sure.
Am I crazy to try to make this work?