Author Topic: Fear of FIRE  (Read 10162 times)

mobileagent

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Fear of FIRE
« on: May 28, 2016, 11:28:52 AM »
I would like to get Mustachian advice on how most people in FIRE are walking away from jobs and are content with savings. I am 42 and DW is 38, with two kids 11 and 7. We are very fortunate to have a networth of $1.75M, including the house. We have a high income of around $400K. However, the job drains my positive energy frequently. I love the idea of financial independence and retiring early. My wife is not buying that idea as much and has concerns about retirement and kids. I am also not confident that I can provide well for my family after FIRE with young kids at home. In order to FIRE, we will need to downgrade our lifestyle or move to a cheaper location, as we live on the US west coast. It is in my nature to worry about unforeseen events and want to plan for additional savings. I think we can live under $60K if we move to some other cheaper location while maintaining good lifestyle. The cost of health insurance is pretty high for a family of 4. At the same time, I find it hard to walk away from good income with five weeks of vacation a year, even with the stress. I can probably take a less stressful job with lower income, but I find it harder to move down in income. Besides, every job will have its share of politics and stress. As our networth is growing, my willingness to put up with crap is getting lower, but not enough to completely walk away from any job. How did you come to terms with your savings goals and that it is enough for FIRE? What would you do in my situation? Thanks for your advice.

ShortInSeattle

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Re: Fear of FIRE
« Reply #1 on: May 28, 2016, 12:00:45 PM »
This sounds simplistic, but we got comfortable by literally living on our FIRE budget for a few years before quitting. Well, except for things like taxes which we knew would change after FIRE.

Prove to yourself you can do it, before you do it.

That's how we knew we were ready.

SIS

AlmstRtrd

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Re: Fear of FIRE
« Reply #2 on: May 28, 2016, 12:11:43 PM »
Damn, $400K is a lot of income. I'd have trouble walking away from that as well! One of the reasons for me would be the issue of sunk cost. In order to make that much, you and your wife must have had to invest a lot of time and energy in your education. Maybe work a couple more years and see if having a higher stash makes you feel better/more secure or about the same as now.

Hopefully you realize it's a good problem to have!

Tyson

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Re: Fear of FIRE
« Reply #3 on: May 28, 2016, 12:13:38 PM »
What are the specific concerns regarding the kids?  Are you going to pay for their college?  If so, how much?  Do you have that saved for?  If so, then what else? 

Is the house paid off?  That can be a huge source of stress if not paid for before FIRE.  Maybe don't plan to FIRE before house and kids college is fully paid for.

Other than those 2 things, what are the concerns? 

Exflyboy

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Re: Fear of FIRE
« Reply #4 on: May 28, 2016, 12:30:37 PM »
Damn, $400K is a lot of income. I'd have trouble walking away from that as well! One of the reasons for me would be the issue of sunk cost. In order to make that much, you and your wife must have had to invest a lot of time and energy in your education. Maybe work a couple more years and see if having a higher stash makes you feel better/more secure or about the same as now.

Hopefully you realize it's a good problem to have!

Yes well of course lots of people invest a lot in their education, end up with PhD's and don't make anything close to that much.. But the point is well made, walking away from that kind of firehose of cash is hard to do.

Part of the problem though is "high income" is a law of dimishing returns as the taxes are probably eating you alive at that level.

The OP does not say what the value of the house is (is that net equity included in NW, or do you have to take out some for mortgage payments?) and how much is spent on maintenance, HOA fees (I just gouged my eyeball out saying "HOA" out loud), RE taxes etc etc.

It was mentioned above that you really need to figure out what your real cost of living is. As an  example, when my Wife and I actually measured what we spent for a year it was less than $30k.

So as our NW (including house) is close to about $2.4M then what the heck are we working for?.. we still do some work BTW, but not because we need the money.

Secondly, the cost of healthcare, when you quit if you have after tax savings your income can be $zero if you want it to be... But actually you need about $24k of income to get enough to be covered by the affordable care act and get maximum subsidies.

The cost of HC is very reasonable with max subsidies.. at least until Trump gets into the Whitehouse!

Look at taxes.. a married couple with no kids can make $20,600 and pay zero Zero Fed taxes... The State taxes (at least here in Oregon will still nail you for about 9% on everything, minus about $700.. But still a very small number.

To answer the OP's question.. its hard to do.. I wasn't making $400k but I still earned pretty well. In fact as I was brought up by Parents that did just about everything wrong you could do with money I have a deep seated fear of not having enough.

I have discussed it at length in my blog if you are interested in my journey.
« Last Edit: May 28, 2016, 12:37:07 PM by Exflyboy »

ender

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Re: Fear of FIRE
« Reply #5 on: May 28, 2016, 12:33:11 PM »
This sounds simplistic, but we got comfortable by literally living on our FIRE budget for a few years before quitting. Well, except for things like taxes which we knew would change after FIRE.

Prove to yourself you can do it, before you do it.

That's how we knew we were ready.

SIS

+1

This is the way to go, particularly if your plans involve downsizing.

mobileagent

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Re: Fear of FIRE
« Reply #6 on: May 28, 2016, 12:39:38 PM »
We don't have any debt and house is mortgage free. However, the house is a big portion of our portfolio at $1M. It will be hard to FIRE in the current house with $750K savings. The property taxes are close to $11K itself. If we have to FIRE now, we do need to move to a different house and location.

Regarding kids, we like to pay for their college. The estimates per kid are around $200K now itself with tuition and living expenses (total $400K). This looks like a big chunk unless we pay only for in state tuition and ask them to cover for their living expenses or commute from our home.

Frankly, a big issue is to readjust to a life style where every dollar has a name in the budget, whereas we now have the freedom to spend more discretionarily without a tight budget. The advice to see if we can live some time on FIRE budget is a good one (except for property taxes and health insurance which will change later). It is also hard to walk away from the income given the amount of effort and time we had to put into our education.

Thanks for the advice.

mozar

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Re: Fear of FIRE
« Reply #7 on: May 28, 2016, 12:43:45 PM »
How does your wife feel about moving?

mobileagent

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Re: Fear of FIRE
« Reply #8 on: May 28, 2016, 12:52:28 PM »
How does your wife feel about moving?

Having been used to living in a community with highly educated neighbors and inclusive environment, she puts some restrictions around only moving to similar communities and towns. She is open to move if I can demonstrate that we can indeed live good lifestyle in a good community with our savings.

EscapeVelocity2020

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Re: Fear of FIRE
« Reply #9 on: May 28, 2016, 12:58:15 PM »
I'm a big fan of breaking complex problems down and tackling them in pieces.  FI is the easier one for me.  The bare bones definition is having passive, dependable income greater than your expenses.  A nice thing about FI has many moving parts that you can control (asset allocation, expenses that you can research, additional safety factors -OMY, hobby job, cutting back).

ER is less easy to tackle.  Will your wife be OK losing the income, benefits, and having a stay at home husband?  Is ditching your job going to make family life better both short term and long term (I wonder about this now that my kids are becoming angsty teens, they don't always want us around...).

It's a good question OP.  All I can contribute is that I was really surprised that FI didn't automatically lead to ER for me, and I'm much more comfortable with that then I used to be, but my job is also not stressful and lately quite beneficial.  We have lots of friends and neighbors navigating unplanned layoffs these days...

Good luck, you're doing great whatever you decide!
« Last Edit: May 28, 2016, 02:19:18 PM by EscapeVelocity2020 »

SwordGuy

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Re: Fear of FIRE
« Reply #10 on: May 28, 2016, 01:01:39 PM »
Ways you could know you are ready:

1) Live on the post-FIRE expected income for a year (adjusting for taxes/healthcare).
2) Set aside all excess money that same year for moving expenses and college for the kids.
3) Sell your $1M home and buy a nice home in a low tax area you would enjoy living in that has several local colleges or universities to choose from nearby.   Now you don't have to save so much for college for your kids because they can go locally or work and save up to go somewhere else  (It will do them a world of good to have to work thru college.   Responsibility doesn't generally magically manifest itself, it has to be taught.)  Plus, the college fund will grow until it's needed...

You can easily have a paid off home, two fully stocked college funds, and 1.5M in income-earning assets a year from now if you do this.


Exflyboy

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Re: Fear of FIRE
« Reply #11 on: May 28, 2016, 01:13:49 PM »
There are lots of highly educated communities around too. We live in Corvallis Oregon and a lot of of my friends are University profs and Drs I am one of many engineers in town... Our RE taxes are $2000/year on 5.5 acres including our rentals... Property is worth around $400k at a guess.

Only one of our friends are FI.

Another thought, the ER thing is a process.. as much psychological as anything. You don't just suddenly turn off a firehose of cash, figure out what you want to do with your lives and feel happy about it..:)

Anything that gets easured gets controlled, so start measuring your spending and being mindful of where your dollars are going. This has the benefit of increasing your savings rate. You have plenty of time.. take 5 years and see how much you can jack up your networth by saving more (maybe investing a little more agressively) .. This is a fun part of the process.

In the meantime have conversations about what ER would look like, what would you do with all that free time? What can you give back to your community and the world at large?

The real benefit of FI is to stop worrying about money.. What if you lost your job right now?.. Would you be fearful?

Maybe you should sell your McMansion, live somewhere more humble and get that RE tax bill down?.. Put the excess into savings.

If the economy does another 2008.. then you you will be far less stressed than you otherwise might be.
« Last Edit: May 28, 2016, 01:15:52 PM by Exflyboy »

prognastat

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Re: Fear of FIRE
« Reply #12 on: May 28, 2016, 02:20:13 PM »
In most of the US you can get a nice family home for 500k or less.

If your wife thinks neighborhoods with about 500k homes are not nice enough then she is a little out of touch. That kind of price range would put you in extremely low crime and good school neighborhoods.

As others have mentioned I would set a goal to see if you can live off 4% annually at this time.

Without moving it is very unlikely. With 750k invested you are only talking about 30k per year, which after subtracting your property taxes would be less than 20k. Very little for a HCOL area with a wife and 2 kids.

However if you moved to a 500k house your taxes would drop dramatically and your investment returns would rise substantially. It would give you 1,250,000 * 0.04 = 50k per year and probably almost half the amount of taxes. Leaving you with 44k per year to spend. At well over twice the amount that is quite a difference. Now say you worked a little longer on top of the move allowing you to save more of your income you could increase your stache even faster than before. It wouldn't be hard to get to 2 million invested in a matter of a few years. which would be about 80k a year.

Now you could of course take this further, but this would likely require a lot more convincing of your wife. If you moved to a state where house prices are lower and the taxes are lower too you could potentially buy a nice large 4 bedroom 3 bathroom or so home for 250k paying almost no property taxes, compared to your current 11k that is. If you stopped working immediately that would still leave you with about 1.5m invested allowing for 60k and only a few thousand in property taxes. You would likely Have at least 55k a year even after those taxes are taken out.

There are plenty of places in the US that would put you in quite a nice neighborhood at 250k, just probably not in HCOL areas.

As far as ways to convince the wife depending on how demanding your current job is on your wife you might be able to sell her on it if you can convince her you not having to work and being able to focus on your kids development would be a mayor benefit to them which studies show is the case. Being there to engage with them and partake in healthy and intelligent hobbies along with a good amount of academic support by helping with homework and projects.

As for myself for example if you take my house payment out of the equation I would only need about 25-30k a year to support my family's current lifestyle. I don't live in a HCOL nor LCOL area and it is just me and my wife and we could be much more frugal than we are. If you stop living in a HCOL area and have a paid off house you should be able to easily provide for a whole family on 60k a year.
« Last Edit: May 28, 2016, 02:25:22 PM by prognastat »

AlmstRtrd

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Re: Fear of FIRE
« Reply #13 on: May 28, 2016, 02:28:20 PM »
Is ditching your job going to make family life better both short term and long term (I wonder about this now that my kids are becoming angsty teens, they don't always want us around...).

Gosh, that is an excellent point. Our daughter actually likes us, but she just doesn't want to be around us very much. She likes the security that we offer, and even sometimes our advice, but man, she's in her room most of her free time unless she comes downstairs to eat! We get about ten minutes of quality time each day at dinner.

mobileagent

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Re: Fear of FIRE
« Reply #14 on: May 28, 2016, 04:30:39 PM »
Thank you all for your advice and perspectives. If we have to FIRE now, we have to move to a house under $500K by moving 30 minutes further from where we live or relocate to another state with much cheaper houses (~$250K) with good public education. This is doable with some budget control. I don't think it makes sense to live in a big house with high property taxes after FIRE. However, we can continue to live in the current place as long as I am still working, given the high income. Until, we are clear about where we would live in FIRE, it doesn't seek like a good idea to relocate or sell the current house.

Tyson

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Re: Fear of FIRE
« Reply #15 on: May 28, 2016, 04:32:41 PM »
I make a decent income (although not $400k!!! Congrats on the awesome cashflow!).  What I found is this - its really, really hard to dial down your budget and lifestyle unless you REALLY have to.  It's simply too easy to solve problems and inconveniences by throwing money at it.  Tightening the belt and living on less seems like an unnecessary hardship that you are forcing on your family for no reason.  For me it took long term unemployment to really force my lifestyle down significantly. 

But I can say this with certainty - once you dial down your lifestyle, it's awesome for 2 reasons.  First, you save a lot more money and you can see your savings go up enormously in a very short period of time.  Second, when you spend a lot of money every year, it makes you feel trapped.  It's the mentality of "I HAVE to earn a high income because it costs so much to live!".  By focusing on dialing down your costs, you eliminate that completely.  And that, my friend, is a huge weight. 

Anyway, I agree with others here, focus on FI first and get a good understanding of the #'s involved. 
 
And since this is the MMM forum, I can't let you get by without at least one face punch - $200k per kid for college is ridiculous and unnecessary.  In state schools are fine and no one gives a crap if you go to any other school outside of Princeton and/or Harvard.  And even if you go to a "good" school, your kid would have to graduate at the very top of their class for it to mean anything.  In other words its a very, very poor investment. 

human

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Re: Fear of FIRE
« Reply #16 on: May 28, 2016, 04:39:53 PM »
To accomplish what you want with the kids and 60k a year in expenses you need close to 2 million in investments. 400k plus 60k x 25. Looks like even with the house sold off you are not quite there yet. With 400k income, I bet your yearly expenses are not 60k or your current net worth of 1.75 million would be much higher. Is that salary very recent? How much do you actually spend per year? Can you sell the house, move and continue working for a year or two, or would that plan end in divorce?

Most people here could easily live on 60k a year with a family of four, not sure if you can . . .

Cyaphas

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Re: Fear of FIRE
« Reply #17 on: May 28, 2016, 05:42:28 PM »
When I think of a decent house in a decent neighborhood with good schools, $250k seems pretty reasonable. I've lived in CA, WA, WI & TX to give you an idea. Granted, I'm sure I have a very different idea of what would qualify as a "decent" house.

Cassie

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Re: Fear of FIRE
« Reply #18 on: May 29, 2016, 11:05:29 AM »
Does your wife work and how much of that income is hers from a job? Maybe you should work a few more years and then you could quit and take care of home, meals, etc if this something you want to do and wife is agreeable.

redbird

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Re: Fear of FIRE
« Reply #19 on: May 29, 2016, 10:58:15 PM »
$1.75M networth feels low to me for a ~$400k/year combined salary. It makes me concerned about what major changes you would have to make to retire early. It's mostly concerns relating to lifestyle costs.

How much do you currently spend per month? Do you have enough passive income to support that? Some of your expenses do go down in early retirement. Gas for your car will be the biggest savings. But other things might go up a bit, like toilet paper usage and electricity usage since you might be home more. If you do have enough passive income to support that, then how long would that money last? Social security, pensions, 401k, IRAs, and other post-normal retirement age money could supplement or (depending on amount you'll get) replace your passive income once you can start taking them. But you need to make sure you have enough money to last you AT LEAST until then, preferably longer so you have some wiggle room.

Yes, you can probably downgrade your lifestyle from whatever it is now. However, if you try to change too much too fast just for the sake of early retirement, it'll probably cause unhappiness (for both you and your wife) and strife in your relationship.

hodor

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Re: Fear of FIRE
« Reply #20 on: May 30, 2016, 12:39:09 AM »
You could sell and move to free up 500k or you could work for an extra couple of years to add it to your stache, living on 60k as a trial and saving the rest. Could even go crazy and work for 4 years and save those huge school fees.

Work out your priorities, a few extra years work to stay where you live or retire sooner and move somewhere else.

Exflyboy

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Re: Fear of FIRE
« Reply #21 on: May 30, 2016, 11:08:31 AM »
You could sell and move to free up 500k or you could work for an extra couple of years to add it to your stache, living on 60k as a trial and saving the rest. Could even go crazy and work for 4 years and save those huge school fees.

Work out your priorities, a few extra years work to stay where you live or retire sooner and move somewhere else.

Yes I would agree.. In all honesty you really are very close to FIRE but there are a few unknowns and it took us a surprisingly long time to figure those things out.. Namely just what are our costs of living?.. If your real answer is "60k" then it sounds like you need a bit more of a cushion At an income of $400k that cushion won't taake very long to build but you need time to get used to the idea that you won't all die if forced to live on a budget.

Besides which it is fun gettig the monthly costs down... Cable TV, replaced with rabbit ears, shop around for car insurance, $10 a month cell phone plans etc... But once again this all takes time and some analysis.

Take a year or so to get comfortable on a reduced budget and if you find you can easily live on say $45k.. well then you have just padded your stash by $200k or so in the meantime and it will be far less scary..:)

mobileagent

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Re: Fear of FIRE
« Reply #22 on: May 30, 2016, 02:02:13 PM »
Thanks everyone for your feedback and advice. I had to think about it over the weekend and also had a couple of discussions with my wife. At this point, my wife is not ready to move to a different house as she really likes the current house and community. She is willing to move when kids leave for college, which is still another 11 years. She is also supportive of FIRE after kids go to college, when we will be 53 and 49. Meanwhile, we have an opportunity to reduce expenses around vacations, kids activities, and groceries. We are currently saving around $200K a year from my income (wife is a recent SAHM) and will try to improve it from optimizing expenses. In the current house, we will most likely need an investment of $1.75M for FIRE, which is another $1M away. We can get there in the next 4-5 years if everything goes well. I will be able to have another discussion once we reach FI in the current house.

Cassie

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Re: Fear of FIRE
« Reply #23 on: May 30, 2016, 02:21:14 PM »
So your Wife effectively retired herself but you must keep working? That does not sound fair.  Also I could see staying home if kids aren't in school but once in school there really is not enough to do. She has the life.  I would revisit this situation with her working f.t. until both fire or moving to more affordable area where you both could fire now.

mobileagent

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Re: Fear of FIRE
« Reply #24 on: May 30, 2016, 02:32:27 PM »
So your Wife effectively retired herself but you must keep working? That does not sound fair.  Also I could see staying home if kids aren't in school but once in school there really is not enough to do. She has the life.  I would revisit this situation with her working f.t. until both fire or moving to more affordable area where you both could fire now.

I don't think she is retired as her hands are full with kids and home. Even when she was working, her income was 20% of the overall income. I also supported her to quit her job as it is adding lot of stress to our family life without adding significant savings.

Cassie

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Re: Fear of FIRE
« Reply #25 on: May 30, 2016, 05:50:21 PM »
I am all for a SAHP but realistically by the time the kids are in school there is lots of free time. Therefore, it doesn't feel fair that she won't compromise so you both can go together. With the amount of $ you have it seems like you should both have what you want if there is some compromising.

RichMoose

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Re: Fear of FIRE
« Reply #26 on: May 31, 2016, 09:20:13 AM »
This isn't a case of Fear of FIRE, but rather a situation where you and your spouse are totally not on the same page about lifestyle issues.

This might sound a bit harsh, but my read of this is quite simple: you are stressed out and want to slow down and live a more fulfilling life on a personal level. Your wife on the other hand wants to keep the big house and higher-end lifestyle, even if it means you are burning yourself out. You guys need to get on the same page and have a discussion about what your lifestyle should be in consideration of all things, including your well-being. I'm sorry, but if my wife was kicking my ass out the door every morning just so she can remain in her bubble of McMansions, high-end schools, and completely ridiculous college dreams for your kids I would be pissed.

With a NW of $1.75M, you can live a very comfortable lifestyle in 90% of the US. A paid off house and $4500/month of after-tax spending money is pretty good. If you RE, your cost of living will go down in many respects. No need for two vehicles, no need to replace your vehicle with a high end model every couple years to keep up with the neighbors, reduced home maintenance costs since you will do it yourself and will likely live in a smaller more efficient house, lower vacation costs as your travelling time becomes more flexible and you don't feel the need to take "stress vacations", lower child activity expenses as you don't feel you have to keep up with your neighbors and you will have plenty of time to lead activities with your own kids instead of paying for someone else to do it, and the list goes on. As a bonus, you could always work part-time or contract if you wish and could boost your income even more.

For some perspective my wife and I earn a combined $170,000. Not including housing costs, we spend $2000/month. Things cost more in Canada, so in most areas of the US that would easily drop to $1500/month. Our lifestyle is very comfortable!

prognastat

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Re: Fear of FIRE
« Reply #27 on: May 31, 2016, 10:33:30 AM »
I would agree once all your kids are in school for about 8 hours a day being a stay at home parent is not a full time job. It also does seem unfair for the expectation to be that you all have to work for 11 more years when she doesn't. My mom worked part time days throughout my life. She would get home when we got off school. One can easily work 6 hours a day while the kids are at school and then come home take care of them and do some work around the house once the kids are over 4-5 years old. The kids become more independent and school leaves a massive window every day where the care is not needed. If she could swing a part time job for just 40k a year and work at most 20-30 hours a week and all that extra money went directly to your savings after just 5 years that would be 200k extra. meaning 1 year less off your retirement right there. It would reduce your retirement from 11 years to 9 years if you did nothing to change your situation.

I myself would not be ok with my wife refusing the reduce her expectation, while at the same time not willing to contribute equally. While the kids aren't going to school I would say the contribution could be considered equal, but now that they are out of the house for 8-9 hours a day depending on their commute time to school the situation is very different and not equal.

If you are ok with that arrangement that's up to you though. I can definitely understand not wanting to rock the boat too much. It would be building up resentment over the long run if I were in that position though.

dinkhelpneeded

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Re: Fear of FIRE
« Reply #28 on: May 31, 2016, 01:03:25 PM »
wow, I am surprised by the number of comments.

FACT:
HCOL living is very different from LCOL areas. 250K, even 500K aint gonna get you any reasonable housing if you want to stay.
Moving to a LCOL area with a miserable wife/kids is worse. LCOL areas are LCOL for a reason.

Here are my realistic suggestions
-Take a long break (sabbatical) long vacation call it what you want
-Understand that this is a problem of bad asset allocation (too much of your money is stuck is one asset, your primary home)
-Start a more diversified investment strategy
-Once your wife is SAHP for a few months, re-visit the idea of going back to work to shorten time to FIRE.

prognastat

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Re: Fear of FIRE
« Reply #29 on: May 31, 2016, 01:12:16 PM »
wow, I am surprised by the number of comments.

FACT:
HCOL living is very different from LCOL areas. 250K, even 500K aint gonna get you any reasonable housing if you want to stay.
Moving to a LCOL area with a miserable wife/kids is worse. LCOL areas are LCOL for a reason.

Here are my realistic suggestions
-Take a long break (sabbatical) long vacation call it what you want
-Understand that this is a problem of bad asset allocation (too much of your money is stuck is one asset, your primary home)
-Start a more diversified investment strategy
-Once your wife is SAHP for a few months, re-visit the idea of going back to work to shorten time to FIRE.

If you think 250k or 500k are in LCOL areas in most the US you are living in a bubble. LCOL areas you would be living in a place under 100k in the countryside.

dinkhelpneeded

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Re: Fear of FIRE
« Reply #30 on: May 31, 2016, 01:16:46 PM »
wow, I am surprised by the number of comments.

FACT:
HCOL living is very different from LCOL areas. 250K, even 500K aint gonna get you any reasonable housing if you want to stay.
Moving to a LCOL area with a miserable wife/kids is worse. LCOL areas are LCOL for a reason.


If you think 250k or 500k are in LCOL areas in most the US you are living in a bubble. LCOL areas you would be living in a place under 100k in the countryside.

My bad writing this out, I meant he isnt going to find a 250K or 500K if he wants to stay where he is currently.

prognastat

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Re: Fear of FIRE
« Reply #31 on: May 31, 2016, 01:21:00 PM »
wow, I am surprised by the number of comments.

FACT:
HCOL living is very different from LCOL areas. 250K, even 500K aint gonna get you any reasonable housing if you want to stay.
Moving to a LCOL area with a miserable wife/kids is worse. LCOL areas are LCOL for a reason.


If you think 250k or 500k are in LCOL areas in most the US you are living in a bubble. LCOL areas you would be living in a place under 100k in the countryside.

My bad writing this out, I meant he isnt going to find a 250K or 500K if he wants to stay where he is currently.

Sorry about the misunderstanding. I would agree that he won't be able to get any place much lower in a good area without moving further away. They are currently probably living in one of the most expensive areas to live in within the US. My guess would be something along the lines of bay area California given the costs and income.
« Last Edit: May 31, 2016, 01:28:16 PM by prognastat »

RichMoose

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Re: Fear of FIRE
« Reply #32 on: May 31, 2016, 01:32:23 PM »
wow, I am surprised by the number of comments.

FACT:
HCOL living is very different from LCOL areas. 250K, even 500K aint gonna get you any reasonable housing if you want to stay.
Moving to a LCOL area with a miserable wife/kids is worse. LCOL areas are LCOL for a reason.

Wow, I am surprised this by comment. There are countless Lower cost areas that would arguably offer a much better lifestyle than most HCOL areas. The biggest problem is that many don't offer the same lucrative job opportunities. If culture and activities are important to you, there are dozens of great college towns/cities with moderate populations located in areas with superb outdoor recreation. Off the top of my head I can name a few on the west side of the country: Corvallis, Lewiston, Moscow, Walla Walla, Bellingham, Tucson, and Santa Fe.

If you want to know where more of these great LCOL areas are, just use the search function of this forum. There are literally threads upon threads in the Ask A Mustachian and General Discussion sections with topics such as "great places to live in retirement", "cheap places to live", "best retirement towns", etc.

dcozad999

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Re: Fear of FIRE
« Reply #33 on: May 31, 2016, 03:15:36 PM »
I think you should consider a new job.  You have the skills and experience to land a 400k job but you don't like it.  Do you think you'd be happier with a different job?  Or is your entire industry not fun?  Even if you make $350k you'd still have a massive income.  Since you already have the net worth to retire but your family doesn't support it, even if you made $100k until the kids go to college you could still retire then.

For those posters criticizing the SAHM, I ask that you with-hold judgment unless you have actually done that job.  My wife did it for a few years and it was MUCH harder than going to regular job.  Even if the kids are in school there is always something to do assuming you don't have a maid, gardener, food procurement specialist, cook, etc.



They're not criticizing her for being a SAHM. They are criticizing her for her seemingly complete disregard for her husband's misery. Though to be fair, we've only heard one side of the story and perhaps he hasn't explained to her how bad the job is affecting him.

I am miserable at my job and make a little over $80k a year in a LCOL area, and I know that if I switch I will probably making significantly less (I'm overpaid). My wife knows I'm miserable and has said she is fine with me taking a lower paying job even though it would mean cutting back on expenses. I'm actively searching, but still not sure I want to take a significant pay cut. However, it's nice to know that I have her support and that she cares more about my sanity than the money.

little_brown_dog

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Re: Fear of FIRE
« Reply #34 on: May 31, 2016, 03:27:57 PM »
I think you should consider a new job.  You have the skills and experience to land a 400k job but you don't like it.  Do you think you'd be happier with a different job?  Or is your entire industry not fun?  Even if you make $350k you'd still have a massive income.  Since you already have the net worth to retire but your family doesn't support it, even if you made $100k until the kids go to college you could still retire then.

For those posters criticizing the SAHM, I ask that you with-hold judgment unless you have actually done that job.  My wife did it for a few years and it was MUCH harder than going to regular job.  Even if the kids are in school there is always something to do assuming you don't have a maid, gardener, food procurement specialist, cook, etc.



They're not criticizing her for being a SAHM. They are criticizing her for her seemingly complete disregard for her husband's misery. Though to be fair, we've only heard one side of the story and perhaps he hasn't explained to her how bad the job is affecting him.

I am miserable at my job and make a little over $80k a year in a LCOL area, and I know that if I switch I will probably making significantly less (I'm overpaid). My wife knows I'm miserable and has said she is fine with me taking a lower paying job even though it would mean cutting back on expenses. I'm actively searching, but still not sure I want to take a significant pay cut. However, it's nice to know that I have her support and that she cares more about my sanity than the money.

Yes, as a sahm I completely agree that if someone else is financially supporting you, you have to be willing to live on what they can and want to provide. My husband earns a generous income and we live very well. However, I have told him repeatedly that if he doesn't want to work as much, or if he wants to do something less demanding, I will happily move to a cheaper area, or live in a home that isn't as nice. Material things don't matter much to me - I want a happy, healthy marriage and family. And if I need to live in a less prestigious area or live in a plain house then I will do so gladly. Honestly, I would much rather downsize my already pretty modest life than go back to work if I had to choose one.

prognastat

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Re: Fear of FIRE
« Reply #35 on: May 31, 2016, 03:53:50 PM »
I think you should consider a new job.  You have the skills and experience to land a 400k job but you don't like it.  Do you think you'd be happier with a different job?  Or is your entire industry not fun?  Even if you make $350k you'd still have a massive income.  Since you already have the net worth to retire but your family doesn't support it, even if you made $100k until the kids go to college you could still retire then.

For those posters criticizing the SAHM, I ask that you with-hold judgment unless you have actually done that job.  My wife did it for a few years and it was MUCH harder than going to regular job.  Even if the kids are in school there is always something to do assuming you don't have a maid, gardener, food procurement specialist, cook, etc.



They're not criticizing her for being a SAHM. They are criticizing her for her seemingly complete disregard for her husband's misery. Though to be fair, we've only heard one side of the story and perhaps he hasn't explained to her how bad the job is affecting him.

I am miserable at my job and make a little over $80k a year in a LCOL area, and I know that if I switch I will probably making significantly less (I'm overpaid). My wife knows I'm miserable and has said she is fine with me taking a lower paying job even though it would mean cutting back on expenses. I'm actively searching, but still not sure I want to take a significant pay cut. However, it's nice to know that I have her support and that she cares more about my sanity than the money.

Yes, as a sahm I completely agree that if someone else is financially supporting you, you have to be willing to live on what they can and want to provide. My husband earns a generous income and we live very well. However, I have told him repeatedly that if he doesn't want to work as much, or if he wants to do something less demanding, I will happily move to a cheaper area, or live in a home that isn't as nice. Material things don't matter much to me - I want a happy, healthy marriage and family. And if I need to live in a less prestigious area or live in a plain house then I will do so gladly. Honestly, I would much rather downsize my already pretty modest life than go back to work if I had to choose one.

I would agree that most dislike the idea of a spouse arguing to maintain an admittedly very high standard of living at the expense of their spouses happiness. It would be one thing if she was working too or if she was willing to compromise in other ways.

Now of course we have limited information since we only hear one side. However it sounds like the OP is willing to compromise from a high standard of living towards a more regular standard of living, but his wife isn't. This isn't causing her to need to maintain a job she dislikes, but she is ok with saddling the OP with this responsibility.

Also once kids are going to school being SAHM becomes significantly easier. These days if you have kids that should be asleep 10+ hours a day and at school another 8+ hours. So 18+ hours of the day require little attention. Also I assume they have a dishwasher, washer, dryer and vacuum meaning housework is much easier than it used to be. I would agree that being a stay at home parent is absolutely a full time job and then some until the kids go to school. However once that happens it is equivalent to a part time job. It is also important to get your kids used to contributing around the house with chores which should alleviate some work too.
« Last Edit: May 31, 2016, 04:17:15 PM by prognastat »

mobileagent

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Re: Fear of FIRE
« Reply #36 on: May 31, 2016, 04:49:45 PM »
Thanks everyone for your feedback. I think this thread is being unfair to my wife. So, let me add more information. I was the one who asked and supported her to be SAHM as we both were too busy to focus sufficiently on family and home, and her income was not adding sufficiently to make up for the effort. Her income was close to $100K, while mine is around $400K. Financially, it made sense for her to be SAHP than me. My wife's preference is to stay in the current home and community, but if I am miserable, she will support any decision I make. Second, I also feel guilty about quitting a job with high income as I do take some pride in being a provider for the family. So I wonder if I should just suck up the misery (first world problems) so that my family is taken care of. As long as I have to earn money from a job, it seems rational that we live in the current place as there are plenty of jobs with high incomes ($300K+). Even if I go to another job with slightly less income, but better job satisfaction, we can still live in the current place and keep accumulating savings. Once we are ready to FIRE, we can move to a different location and house. I am confused about the right path to take as there is not a single path. I am sure my wife will support any decision I make, although she has preferences, but I add more pressure to my decision as I want to provide the best life for the family that I could. Looks like I haven't fully unchained material things from my definition of quality of life. Thanks

ender

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Re: Fear of FIRE
« Reply #37 on: June 01, 2016, 05:15:28 AM »
Wow, I am surprised this by comment. There are countless Lower cost areas that would arguably offer a much better lifestyle than most HCOL areas. The biggest problem is that many don't offer the same lucrative job opportunities. If culture and activities are important to you, there are dozens of great college towns/cities with moderate populations located in areas with superb outdoor recreation. Off the top of my head I can name a few on the west side of the country: Corvallis, Lewiston, Moscow, Walla Walla, Bellingham, Tucson, and Santa Fe.

Also, I wouldn't discount the significance of housing and tax differences between HCOL and LCOL.  If you are able to find salaries close to or above $100k in lower COL areas it makes a huge difference when comparing the areas.

While at $400k the OP probably won't, there are a lot of opportunities for folks in the $100k-$150k range in HCOL to get upper five figure or even low six figure jobs in much lower cost of living areas. If you compare $100k in the LCOL area I live in (Iowa) vs $150k in San Francisco, according to this calculator it's another $20k in taxes for a single ($17k for married couple). If you guesstimate housing costing $2k/month more.... that's nearly the entire difference salary difference right there ($44k and $41k out of the $50k salary difference accounted for just in additional taxes/housing costs). Many apartments/duplexes can be had here for around $1000 total monthly cost.

I would want more than $150k, realistically, since if I make our lifestyle a 1-1 comparison the likelihood of finding a newish and nice house with ~2000 total finished square feet on a nearly 1/3 acre lot that backs up to a park/wooded area where you cannot see neighbors houses from the back of your house (you can from the yard) and is two miles from my work in most HCOL areas is practically impossible.

I think people are quick to discount lower cost of living areas prematurely. There are a lot of LCOL areas you can still have reasonably high incomes, too. Not as high as CA or Seattle, but more than enough to make the math work. There are plenty of jobs within a 30-45 min radius of me too.

And for me? The more relaxed pace of life and green space associated with living in a more rural area is worth a lot of money anyways.

mobileagent

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Re: Fear of FIRE
« Reply #38 on: February 24, 2019, 03:28:26 PM »
I would like to update everyone on the latest status as it has been more than two years since this thread was started by me. We are still not early retired, but are a lot closer to FI. Our networth in US has increased substantially from $1.75M to $2.95M, thanks to additional savings, investment growth, and increased house value. $1.6M is in the liquid form between retirement and taxable investment accounts The house is valued at $1.35M without any mortgage. We have additional $600K worth of real estate in another country, but we are not counting on it in our networth to plan for FIRE.

This is a far better state financially for us than before. When the job gets stressful or becomes risky, it feels good to know that I can still take care of my family without the job. Perhaps, it is the FU feeling that people talk about. I am still not ready for FIRE as the income has been good at $400K-$500K and we are able to increase the savings at a high velocity. We do have a upper bound for FIRE in 10 years as our youngest kid will be out of the home for college and I will be 55 by then. We would like to move out of our current location to more warmer and LCOL place when we do FIRE. We may still FIRE earlier, but it would be to lead a less stressful life with more savings. It has been tough to say enough is enough when it comes to savings.
« Last Edit: February 24, 2019, 03:34:44 PM by mobileagent »