Just another burnout post - Help me crunch numbers! (Update - Talked to my boss)

[hoodedfalcon]

Hello! I am a long time lurker and infrequent poster! But I need the hive mind. My questions revolve around my ability to cover my expenses with current investments.
Because I am burned. TF. out. 

By way of background, 43 yo, living with a partner and 2 teenagers. Our finances are separate, kids are partner’s dependents. For purposes of this thought experiment, I don’t want to consider my partner bailing me out/paying my way. I currently make significantly more than they do.

Current Monthly expenses $2K
$1000 housing (my portion, paid to partner - mortgage & utilities)
$80 auto insurance + gas
$35 phone
$250 groceries
$50 pet expenses (dog, 2 cats, 6 chickens)
$25 entertainment (Hulu, Netflix)
$300+ discretionary - gifts, clothes, garden supplies, etc

Income 121K
Day job - $115K. High stress, bad fit (extreme introvert in an extrovert’s role)
Take home: around $6K/month after 401K

Rental income ~ (my former primary residence, in another state): $6K/year after expenses
Rent: $1200
PITI + expenses: $700
Interest rate: 3.25%
Mortgage balance: $20K
Home value: $125,000
Rental e-fund balance: 12K

Current annual savings: $82,950 (this is a new savings rate as of the last year)
401K: $22,950 (max + match)
$6000 - Max Roth
$48,000 - after-tax investments
$6000 - Misc other savings (travel, car replacement fund)

Stash $450K
$365K tax advantaged, $85K taxable (all in indexes)
$250K in Trad IRA
$75K 401K
$40K Roth
$85K in taxable (these are the dollars in play)

Cash 34K
12K personal sinking fund (car, emergencies, etc)
12K rental house e-fund - will need new roof + water heater in next 5 years or so.
5K Travel Fund
5K checking

My original plan was to retire in 4 years. But the last year has been brutal and I just don’t have 4 more years in me.

Health insurance is a concern under Plan 1 and I still need to explore options and costs.

Plan 1:
Quit. Deploy cash on hand to pay off rental property (20K) and live off rental income (1K/month)  + taxable (1K/month). 
This would give me 85 months of freedom. 7 years and 1 month.

Plan 1.1
Quit. Don’t pay off rental property and live off rental income (500/month) + taxable (1.5K/month).
This would give me 56 months of freedom. 4 years and 8 months.
(will be paid off with regular payments in 3-4 years anyway)

Plan 2: 
Approach my employer about downshifting to a less stressful, part-time role (we are a small shop - no such role currently exists). I would guess pay could be around 30-40K. Maybe less. This would give me plenty to live on, but my long term savings would be impacted. There is a real chance this won’t be an option, and even if so, I might only last another year before I fizzle out and likely burn a bridge in the process.

I am looking for thoughts and feedback. If I suck it up and work 4 more years, I could be free forever. If I pull the plug now, I will need to earn an income at some point. Also, for every additional month I keep my current job, I pack away about 6K in savings = 3 months of freedom. What to do?

[swashbucklinstache]

Plan 3 - apply to other jobs while doing the absolute minimum (a.k.a. get paid until the employer forces plan 1 but with unemployment and possibly a severance). Start this off by telling your boss you are taking the next two weeks off, PTO if you have it and unpaid if you don't. Then when you get back ask if there's anything they can to do change x, y, z if there are any x, y, z, that can make this job tolerable. If there are but they won't change them, politely thank them for hearing your concerns and quietly go look for another job. If there are not, see first sentence of this post. The minimum is probably much less than you think. If at any time your mental or physical health are in jeopardy immediately stop doing any work, ask for a sabbatical, or quit. Communicate clearly with your family throughout.

Bridges are important. They're less important when you're sitting in a 450k boat. You have FU money, act like it. =)

[maizefolk]

Plan 1.1
Quit. Don’t pay off rental property and live off rental income (500/month) + taxable (1.5K/month).
This would give me 56 months of freedom. 4 years and 8 months.
(will be paid off with regular payments in 3-4 years anyway)

Why not include your tax advantaged savings? You have enough in taxable to take you out five years, which is long enough for a Roth conversion pipeline to kick in. In the vast majority of historical investment scenarios, $450k invested will be able to support support $1.5k/month in spending indefinitely.

[hoodedfalcon]

Plan 3 - apply to other jobs while doing the absolute minimum (a.k.a. get paid until the employer forces plan 1 but with unemployment and possibly a severance). Start this off by telling your boss you are taking the next two weeks off, PTO if you have it and unpaid if you don't. Then when you get back ask if there's anything they can to do change x, y, z if there are any x, y, z, that can make this job tolerable. If there are but they won't change them, politely thank them for hearing your concerns and quietly go look for another job. If there are not, see first sentence of this post. The minimum is probably much less than you think. If at any time your mental or physical health are in jeopardy immediately stop doing any work, ask for a sabbatical, or quit. Communicate clearly with your family throughout.

Bridges are important. They're less important when you're sitting in a 450k boat. You have FU money, act like it. =)

Problem with Plan 3 is that I don't really want a job... And there really isn't a way to make my current role work. But a different role with the same organization could work.....part time. I have a law degree and would essentially be asking for a job that a college grad could do. Which is totally fine. Being a lawyer blows. I have started taking anxiety meds to deal with the anxiety of having to actively engage with people all day every day. It's a lot.

Thank you for the kick in the pants though. This is what I need.

[hoodedfalcon]

Plan 1.1
Quit. Don’t pay off rental property and live off rental income (500/month) + taxable (1.5K/month).
This would give me 56 months of freedom. 4 years and 8 months.
(will be paid off with regular payments in 3-4 years anyway)

Why not include your tax advantaged savings? You have enough in taxable to take you out five years, which is long enough for a Roth conversion pipeline to kick in. In the vast majority of historical investment scenarios, $450k invested will be able to support support $1.5k/month in spending indefinitely.

The only reason I am not including it is because I'd like to increase my standard of living and also not stress about money down the road. I want padding, so for now I am ignoring it. I have been working for non-profits, scratching out as many dollars to save (or pay off student loans) for over 10 years, and I just want some breathing room. But your point is taken...I just wish I had maybe another 100K saved up before I take a leap from making the most money I have ever made in my life. ahhhhhhhhhhhh

[maizefolk]

The only reason I am not including it is because I'd like to increase my standard of living and also not stress about money down the road. I want padding, so for now I am ignoring it. I have been working for non-profits, scratching out as many dollars to save (or pay off student loans) for over 10 years, and I just want some breathing room. But your point is taken...I just wish I had maybe another 100K saved up before I take a leap from making the most money I have ever made in my life. ahhhhhhhhhhhh

That's the trickiness that lures so many people into OMY (one more year) syndrome, myself unfortunately included: Sure I'm happy living like this now, but what if I want/need to spend more later.

At the time scale of the rest of your life, $100k now vs in five years is not such a big deal. If you're making $115k/year now, after a year or two of decompression do you think it is feasible you might find some sort of extremely part time work paying $20k-30k/year? Then you could lock in your ability to at least support your current lifestyle from your current savings, and, as you feel up to it, slowing accumulate that extra $100k or so of savings to increase your spending/lifestyle more while never having to go back to work full time or even half time.

[hoodedfalcon]

That's the trickiness that lures so many people into OMY (one more year) syndrome, myself unfortunately included: Sure I'm happy living like this now, but what if I want/need to spend more later.

So what did you end up doing? Were you lured into another year? Or were you able to walk away?

[maizefolk]

I'm still working at the moment, but trying to decide between taking another job that might be a lot more fun and lower stress than my current one, but would require a major geographic relocation and going through all the effort of starting up a new group from scratch (and thinking about that just makes me feel so. damn. tired) or pushing the big red eject button in August and doing nothing but sleeping cooking and birdwatching for a year.

I have enough saved up that I am FI where I currently live but I don't have enough saved up to be FI in some of the places I might like to live if where I live wasn't tied to where I could find work in my field.

[Fish Sweet]

Is there any particular reason you're keeping your rental property?  6k profit a year after expenses doesn't seem to be much (it's nothing to sneeze at, but it's not a lot.)  Considering how hot real estate is right now, if you sold it and invested the ~100k, I feel like you could both pad your stash and generate a lot more in investment income with far less effort.  It also frees up the 12k rental house fund you're keeping in cash to put into investments too.

Either way though, you're in a good financial spot and it's really important that you prioritize your personal and mental health if your job is taking such a toll on you.  Fear of the unknown and 'but I'm making so much money right now, just grit my teeth and tough it out' will eat you up from the inside, and burnout will fry your brain (speaking from personal experience here, I'm a year out from having left my previous job and still experiencing anxiety spikes & memory issues).  Set a date to leave by and a corresponding day to give notice.  Leverage yourself at work to leave in the best position (savings & reputation wise) that you can - and do it now, when you're able to make a plan and stick to it instead of when your burnout dictates.

[hoodedfalcon]

Is there any particular reason you're keeping your rental property?  6k profit a year after expenses doesn't seem to be much (it's nothing to sneeze at, but it's not a lot.)  Considering how hot real estate is right now, if you sold it and invested the ~100k, I feel like you could both pad your stash and generate a lot more in investment income with far less effort.  It also frees up the 12k rental house fund you're keeping in cash to put into investments too.

Either way though, you're in a good financial spot and it's really important that you prioritize your personal and mental health if your job is taking such a toll on you.  Fear of the unknown and 'but I'm making so much money right now, just grit my teeth and tough it out' will eat you up from the inside, and burnout will fry your brain (speaking from personal experience here, I'm a year out from having left my previous job and still experiencing anxiety spikes & memory issues).  Set a date to leave by and a corresponding day to give notice.  Leverage yourself at work to leave in the best position (savings & reputation wise) that you can - and do it now, when you're able to make a plan and stick to it instead of when your burnout dictates.

There are a couple of reasons to keep the rental property. Using the 4% rule, 100K would throw off 4K/year, but as a rental, it is currently throwing 6K. Plus it is almost paid off, and then it will throw off 12K, which beats that 4% three times over. 12K is basically 50% of my expenses, so I see it as a pretty dang good thing to keep around. Also, if shit totally hits the fan, I would have a paid off house to live in (in a state I'd rather not move back to, but can if needed) and then my expenses would be even lower.

I appreciate your perspective and I definitely know I need to get out. Is there a reason you didn't leave your job sooner? Could you have? I would love to know your thought process. But anyway, anxiety meds have been floating me the last 18 months, but about 6 months ago I had to increase my dose.

One thing that I didn't mention above is that I am waiting for final approval of public service loan forgiveness to come through. My employment has been certified and I have no reason to think there will be issues, but FedLoan, the loan servicer, is dealing with a backlog of 3-6 months before my balance will be zeroed out. One of the requirements is that I am working full time in said public service at the time the loans are forgiven. How they will know, I don't know. But I am not going to risk it. Which means I have to suck it up until I see those zeros on my account. I am not even going to mention it to my employer until then...so that means I get to fake it till I make it, and god is that exhausting on a whole different level....

[Fish Sweet]

There are a couple of reasons to keep the rental property. Using the 4% rule, 100K would throw off 4K/year, but as a rental, it is currently throwing 6K. Plus it is almost paid off, and then it will throw off 12K, which beats that 4% three times over. 12K is basically 50% of my expenses, so I see it as a pretty dang good thing to keep around. Also, if shit totally hits the fan, I would have a paid off house to live in (in a state I'd rather not move back to, but can if needed) and then my expenses would be even lower.

I appreciate your perspective and I definitely know I need to get out. Is there a reason you didn't leave your job sooner? Could you have? I would love to know your thought process. But anyway, anxiety meds have been floating me the last 18 months, but about 6 months ago I had to increase my dose.

One thing that I didn't mention above is that I am waiting for final approval of public service loan forgiveness to come through. My employment has been certified and I have no reason to think there will be issues, but FedLoan, the loan servicer, is dealing with a backlog of 3-6 months before my balance will be zeroed out. One of the requirements is that I am working full time in said public service at the time the loans are forgiven. How they will know, I don't know. But I am not going to risk it. Which means I have to suck it up until I see those zeros on my account. I am not even going to mention it to my employer until then...so that means I get to fake it till I make it, and god is that exhausting on a whole different level....

The 4% rule is for drawing from your stash, not necessarily for the way you should be thinking about your investments.  Let me put it this way - if you had 112k (I'm including your 'rental repair' cash in this) in VTSAX starting last March, I'd estimate (just from a quick rough math glance over my own VTSAX growth) you'd have over 150k right now, a gain of 38k and well over 5x your current rental annual income, and still 3x your annual rental income even after your mortgage was paid.  Now, the market goes up and the market comes down, but the ever-upward growth over time is what the 4% rule banks on and having just straight up money invested can be almost as reliable as receiving a rent check every month.

If you could choose right now between having 135k in your stash or having your rental property right now, would you still choose to own?  This is a question with no 'right' answer.  Is your rental property in an area where you anticipate the prices appreciating a lot over the next 5 years or so?  Having a fallback 'home base' is also worth something in security and stability, and RE prices go up (and go down, like the market.)  But having a big chunk of cash right now, when you're burnt out to a crisp and not sure what your next step should be, can also represent security and stability.

My thought process when I left my job went something like this:  "This is fine, I just need to tough it out a little longer, a few more years.  This is fine, my job is not that hard and not that bad, I really don't have all that much to complain about.  This is fine, in fact, it's a pretty cushy role and I'm saving a ton every month.  This is fine, this is fine, this is fine.  This is....... my third beer of the night.  This is me telling myself to white knuckle through my hour long commute every day. This is me lying stiff like a corpse in my bed dreading the next day, every day.  This is me, basically gaslighting myself into accepting unhappiness as my new baseline normal.  And it's working."

I left because of that last thought, not because I'd reached X amount of money or Y milestone.   It feels honestly rather overdramatic to type it all out, but I felt like I had spent years teaching myself to be content living in a cage, and then suddenly and abruptly realized that I had gotten accustomed to the cage, that I was in fact afraid to ever leave it... so I had to go, before "always stressed and unhappy" was just the life I got used to living. I left with no concrete plans beyond vague thoughts of going back to school and changing careers (and then the pandemic struck, HA.)  At the time, I was at ~25% of my FI goal, and fortunately had no debt or dependents to factor into my decision.

The loan forgiveness definitely is a big factor, and I can definitely see why you'd want to stick it out for that alone.  Can I ask how much you've still got much you have in the loan?  If 3-6 months is the approximate amount of time you've got before it goes through, can you set a date 7 months out and tell yourself to shoot for that day to GTFO?

[MrThatsDifferent]

Plan 1.1
Quit. Don’t pay off rental property and live off rental income (500/month) + taxable (1.5K/month).
This would give me 56 months of freedom. 4 years and 8 months.
(will be paid off with regular payments in 3-4 years anyway)

Why not include your tax advantaged savings? You have enough in taxable to take you out five years, which is long enough for a Roth conversion pipeline to kick in. In the vast majority of historical investment scenarios, $450k invested will be able to support support $1.5k/month in spending indefinitely.

The only reason I am not including it is because I'd like to increase my standard of living and also not stress about money down the road. I want padding, so for now I am ignoring it. I have been working for non-profits, scratching out as many dollars to save (or pay off student loans) for over 10 years, and I just want some breathing room. But your point is taken...I just wish I had maybe another 100K saved up before I take a leap from making the most money I have ever made in my life. ahhhhhhhhhhhh

Ok, my 2 cents: If it were me, I’d sell the rental and invest that money. One less thing for you to think about or spend money on. With everything you have, that puts you around almost $600k and that’s exactly what you need to maintain $24k a year. That means your FI. Congrats. You want $100k padding. Easy, work literally one more year. That gives you almost $100k with your savings rate and 1 year of hell is a lot better than 4. It also lets you use as much vacation time/mental health sick leave. Be strategic. It also gives you time to see what, if anything else you may want to do and to work out how you’ll spend your time retired.

[hoodedfalcon]

My thought process when I left my job went something like this:  "This is fine, I just need to tough it out a little longer, a few more years.  This is fine, my job is not that hard and not that bad, I really don't have all that much to complain about.  This is fine, in fact, it's a pretty cushy role and I'm saving a ton every month.  This is fine, this is fine, this is fine.  This is....... my third beer of the night.  This is me telling myself to white knuckle through my hour long commute every day. This is me lying stiff like a corpse in my bed dreading the next day, every day.  This is me, basically gaslighting myself into accepting unhappiness as my new baseline normal.  And it's working."

Well, let's just say this resonated.....

The loan forgiveness definitely is a big factor, and I can definitely see why you'd want to stick it out for that alone.  Can I ask how much you've still got much you have in the loan?  If 3-6 months is the approximate amount of time you've got before it goes through, can you set a date 7 months out and tell yourself to shoot for that day to GTFO?

The loan amount is around 90K - a fairly substantial chunk of change. I also had private loans, but those are paid off. Blergh.

I like the idea of setting a date. My "busy" season starts in the fall, and then goes into hyperdrive Jan/Feb. Using Labor Day as a goalpost is pretty poetic, I think.

[formerlydivorcedmom]

Your rental isn't making you $6k/year.  That number doesn't include repairs or maintenance or savings for if you have to evict a renter or can't find a renter for a little while.      You'd probably be better off selling it and investing the cash, even though there's a bit of a psychological hit from not seeing the money come in every month.

There's no harm in asking for a part-time job at your current job.  There's also no harm in quitting, taking a year to recover, and looking for a lower-paying job that you can live on while your stash builds up a little more cushion for you.  I'm thinking about taking a 50% pay cut to become a teacher.  It might be fun to think of how you can translate your skills and your interests into a different type of job.

[slappy]

I feel like there must be another option. You can quit, then find another job in the future when you are ready (one year, two years, three years from now). You can quit, then work something low pay and mindless to help cover expenses. You could even do something seasonal. With your stash, you have plenty of flexibility and options.

[hoodedfalcon]

I am honestly kind of surprised at the number of folks who think I should sell the rental. Maybe more context would help? Or maybe I am deluding myself?

I bought the house nearly 20 years ago for around 70K on a 30-year loan. I refinanced when interest rates were low to a 15-year loan at 3.25%. I lived in this house for most of the 20 years - less a few years from grad school and the last few years since I moved away. Zillow's valuation today is around 129K.

PITI is around $550/month. I self-manage, only other monthly expenses are yard care part of the year at $80/month. $1200 is below market rent, but I am keeping it on the low side to keep current tenants in place. Once it is paid off in a couple of years, I expect property taxes run around $900/year, insurance around $600/year. I feel like people have done a lot worse than this on a rental. I do have quite a bit of a rental e-fund built up, which could carry me through vacancy, etc.

I do have some sentimental attachment to the home so maybe that is part of what is going on here. And yeah, quitting my job and having this cash flow would be super nice. The rental has its own accounts, and thus far I have only used the income to pay expenses/repairs and build up the cash cushion.

Still sell?

[Papa bear]

Can you buy another house in the area for 125k and get 1200/month rent?  Those numbers tend to work out.  I’d keep the rental if you like managing and doing the work. 

And if you can find another one, double down! Sounds like taxes are cheap and you know the area.  Cash out refi your rental and use the proceeds for the downpayment to buy another place.  Boom. Personal expenses are close to being covered and no extra cash out of pocket. 

Now if you can’t get another place for 125k and get 1200/month rent, you might have the market value of your house incorrect.  And that could change things. 


Sent from my iPhone using Tapatalk

[hoodedfalcon]

@PapaBear I have a rough plan to purchase a home with some land in another state in about 4-5 years and house hack via short-term or possibly long-term rental. A SFH with a small cabin/home on the property is my ideal scenario. I could buy a property in the same area as my current property....I've been keeping my eyes open for a good deal. But at the same time, I would like to give myself 6 months to a year just to decompress and lollygag. But who knows what might happen....

[Rdy2Fire]

Well +1 on the selling the rental

Also I'll say based on the responses and your responses to them, you seem to know what you want to do and are just wanting people to affirm your thinking. I am not saying that to be a jerk, many times I, and I am sure others here have done that. I think you received some good advice in the responses just a matter of if you want to take it.

As I said I'd be a +1 on sell the house and invest the $.

In regards to the work part, if you really don't want to work there I'd probably start looking for another job while you do enough to get by knowing if you lose the job you don't really care.

If you really don't want to work at all. Just go to your employer, explain you are burnt out and need some time (maybe FMLA leave) which gives you a breather (unpaid) to see if you just need an extended break. If they agree to that great you get the breather and have time to think. If they refuse then ask them to lay you off (you can collect unemployment) and if they deny both of those, as someone suggested, just do less and less til they let you go. Even if you can't collect you didn't want the job and got X more time collecting/banking cash.

[ender]

PITI is around $550/month. I self-manage, only other monthly expenses are yard care part of the year at $80/month. $1200 is below market rent, but I am keeping it on the low side to keep current tenants in place. Once it is paid off in a couple of years, I expect property taxes run around $900/year, insurance around $600/year. I feel like people have done a lot worse than this on a rental. I do have quite a bit of a rental e-fund built up, which could carry me through vacancy, etc.

I do have some sentimental attachment to the home so maybe that is part of what is going on here. And yeah, quitting my job and having this cash flow would be super nice. The rental has its own accounts, and thus far I have only used the income to pay expenses/repairs and build up the cash cushion.

Still sell?

What are you budgeting for maintenance/vacancy costs?

If I could have a rental with 100% occupancy and $0/year in maintenance I'd consider it a great rental, too :-)

[reeshau]

There are a couple of reasons to keep the rental property. Using the 4% rule, 100K would throw off 4K/year, but as a rental, it is currently throwing 6K. Plus it is almost paid off, and then it will throw off 12K, which beats that 4% three times over.

I don't have a problem with you keeping the rental, but you are convoluting the 4% safe *withdrawal* rate with the rate of return on an investment.  At $12k per year on a $129k house, the rental is matching the 10% long-term return rate of the stock market.  So, you could just have it in indexes, and save all the mental energy and time involved in self-managing in another state.  But, it could be worth it to have some diversification, or if you keep refreshing market quotes on your phone.  It's a good return, but it isn't trouncing the alternatives.

If you are spending the whole return, what you are not accounting for is 1) inflation and 2) market downturns (for real estate: vacancies and/or rental rate drops)  That is why the SWR is only 4%.  The investment needs to keep growing to tread water.  From a portfolio perspective, there is also nothing wrong in using your whole rental income.  It would be hard to reinvest part of your income; you would have to save up enough for another property, and then there is the added work.  So, you are not touching your index funds, instead.  That is where the inflation protection comes from.   But it is a portfolio action, not just the real estate in isolation, to consider.

One last thought on your choices:  by the time option 1 plays out, your fund investments will have doubled.  (By the rule of 72)  so with $700k of investments, you are nearly FI anyway.  And probably more so, if you are sticking around until loan forgiveness anyway.

And a non-money thought: like so many, your early retirement dreams are about leaving something, rather than going to do something.  But doing nothing can be miserable, too.  Have you thought about what you would do for those I years of freedom?  Or forever, since you could be FI, anyway?  Thinking about what's next is not only good for when you get there, but may be motivation / happiness to help you out right now.

Also thinking, as a non-lawyer:  have you thought about changing your area of law to something that's more introvert-friendly? Something administrative?  Patent law, maybe?  That may be a whole new adventure that puts your (permanent) retirement at risk, but I didn't hear that you hate law--just that you hate your current job.

[yachi]

There is a Real Estate and Landlording section in these forums if you want to get advice from other landlords.  There are a number return components of real estate that stock market investors may not be aware of, so I'll just list some of these.
A real estate returns consist of the following:
1. Cash flow - this is the amount that you can charge in rent over all your expenses (including setting aside money for vacancies)
2. Principal paydown - Your mortgage is an expense, but it's paying down the principal on your loan
3. Appreciation - Unless you're in a really hot or dying area, you should be able to count on your house value increasing with inflation
4. Tax writeoffs - IRS rules allow you to depreciate rental property, making most of the cash flow tax-free, and sometimes reducing the taxes you owe from your other earned income.

You want to compare these returns to the cash you have invested (your equity).  That's your return on cash.
 Leverage in landlording is not like leverage in the stock market, because as long as you make your mortgage payment, the bank won't foreclose.  One of the biggest advantages of owning a house you rent out is being able to access cheap long term fixed rate financing.  I gave up on real estate and sold the house I had been renting out, but I think there comes a time where one is too few to be worth the trouble, but 3 or more would be perfect.  Owning multiple properties makes it less likely you'll have vacancies at the same time, spreads out your risk across more tenants, and keeps your money invested.
If you're asking "I have $125,000 and want to invest in real estate, and like being a landlord, what should I do?" few landlords would advice you buy 1 property with cash and keep it unfinanced.  My advice would be buy 1, fix it up to rent shape, refinance it, and buy others.  You could own 3 properties with 30% equity in each.  If they all cash flow like your current property, that would be better than paying the one you have off.

[hoodedfalcon]

@Rdy2Fire I think I have listened to too many Afford Anything podcasts - based on criteria she generally lays out (esp. regarding a primary turned rental), I thought it was a decent way to diversify outside of index funds and bring in some cash while I figure shit out! I am definitely open to other thoughts and it is all rolling around in my brain.

@yachi I totally relate to the 1 is too few, 3 is better. I've been running those numbers as well and came to the same conclusion you did.

I have some things to think about, but it seems like the general consensus is I can pull the trigger on quitting, might need to work some on optimizing...

[hoodedfalcon]

There are a couple of reasons to keep the rental property. Using the 4% rule, 100K would throw off 4K/year, but as a rental, it is currently throwing 6K. Plus it is almost paid off, and then it will throw off 12K, which beats that 4% three times over.

I don't have a problem with you keeping the rental, but you are convoluting the 4% safe *withdrawal* rate with the rate of return on an investment.  At $12k per year on a $129k house, the rental is matching the 10% long-term return rate of the stock market.  So, you could just have it in indexes, and save all the mental energy and time involved in self-managing in another state.  But, it could be worth it to have some diversification, or if you keep refreshing market quotes on your phone.  It's a good return, but it isn't trouncing the alternatives.

If you are spending the whole return, what you are not accounting for is 1) inflation and 2) market downturns (for real estate: vacancies and/or rental rate drops)  That is why the SWR is only 4%.  The investment needs to keep growing to tread water.  From a portfolio perspective, there is also nothing wrong in using your whole rental income.  It would be hard to reinvest part of your income; you would have to save up enough for another property, and then there is the added work.  So, you are not touching your index funds, instead.  That is where the inflation protection comes from.   But it is a portfolio action, not just the real estate in isolation, to consider.

One last thought on your choices:  by the time option 1 plays out, your fund investments will have doubled.  (By the rule of 72)  so with $700k of investments, you are nearly FI anyway.  And probably more so, if you are sticking around until loan forgiveness anyway.

And a non-money thought: like so many, your early retirement dreams are about leaving something, rather than going to do something.  But doing nothing can be miserable, too.  Have you thought about what you would do for those I years of freedom?  Or forever, since you could be FI, anyway?  Thinking about what's next is not only good for when you get there, but may be motivation / happiness to help you out right now.

Also thinking, as a non-lawyer:  have you thought about changing your area of law to something that's more introvert-friendly? Something administrative?  Patent law, maybe?  That may be a whole new adventure that puts your (permanent) retirement at risk, but I didn't hear that you hate law--just that you hate your current job.

I think my point of using the 4% as a comparison to a 6K or 12K rental return was just that - to compare numbers/scenarios in the short and long term in a way that would enable the quickest ship-jump.

BUT I decided to go ahead and just pull the trigger. I am telling my boss tomorrow! It turns out limbo is actual hell.

I don't have it all figured out - but what I do know is that I need and I want a break for at least 6 months to a year. And I have the ability to do that. My plan is to spend time traveling, car camping, and visiting friends and family - many of who I haven't seen in years. I may end up working again in another year, I may not. My brain is telling me this is needed. My body has a visceral reaction when I even think about the next zoom...

I don't hate the law - but I have lost tolerance for stress. When I think about finding a new job, I imagine myself washing dishes or stocking shelves. Maybe I should start a journal and chronicle my life from policy wonk to dishwasher...

[Linea_Norway]

I wish you good luck. I think your boss might understand that you need it.

About a job washing dishes... that is wha5 I also thought. If I ever need to work again, then as something simple, like in the local shop. My DH always says that you can work way fewer number of hours to earn the same in your current field. So when your 6 months are over, be open to also new laywer jobs. There might be in house laywer jobs or government jobs that are less stressful. Even if they pay less than your current position, they still pay a lot over dishwasher jobs. And try to get a part time job, like 4 days a week.

[hoodedfalcon]

I wish you good luck. I think your boss might understand that you need it.

About a job washing dishes... that is wha5 I also thought. If I ever need to work again, then as something simple, like in the local shop. My DH always says that you can work way fewer number of hours to earn the same in your current field. So when your 6 months are over, be open to also new laywer jobs. There might be in house laywer jobs or government jobs that are less stressful. Even if they pay less than your current position, they still pay a lot over dishwasher jobs. And try to get a part time job, like 4 days a week.

Thank you! I have zero reservations this is what I need to do. The conversation with my boss has me a little nervous, but ultimately I think you are right. I feel like she will understand - at least on some level. She may not understand the car camping bit, but I will leave that out :)

One of my restrictions for loan forgiveness is that I work full-time with a qualified employer. In my case, it's been non-profits mostly (a brief stint at a government gig). So, I can see myself working part-time down the road, doing something lower stress. I have a somewhat niche background and skill set so I may need to open my mind a bit as to what else is out there as far as law jobs are concerned. But I will have plenty of time to think that through.....

[Fish Sweet]

BUT I decided to go ahead and just pull the trigger. I am telling my boss tomorrow! It turns out limbo is actual hell.

I don't have it all figured out - but what I do know is that I need and I want a break for at least 6 months to a year. And I have the ability to do that. My plan is to spend time traveling, car camping, and visiting friends and family - many of who I haven't seen in years. I may end up working again in another year, I may not. My brain is telling me this is needed. My body has a visceral reaction when I even think about the next zoom...

Hell yeah!  Good job listening to your brain, congrats on the coming sabbatical, and I hope that you find a good rhythm of resting, recharging, and finding yourself in a better place.  I also think keeping a journal is a great idea-- that's what I did when I left my job, and I've found it really helpful in grounding myself and having a record to look back on my days, good and bad.  There's a reason journaling is a popular self-care/therapy tactic, lol.

[hoodedfalcon]

Hell yeah!  Good job listening to your brain, congrats on the coming sabbatical, and I hope that you find a good rhythm of resting, recharging, and finding yourself in a better place.  I also think keeping a journal is a great idea-- that's what I did when I left my job, and I've found it really helpful in grounding myself and having a record to look back on my days, good and bad.  There's a reason journaling is a popular self-care/therapy tactic, lol.

Thank you for the encouragement, Fish Sweet!

So, huge bummer yesterday...my boss ended up taking the day off so now I get to sit a whole weekend and drum my fingers.

[FIRE 20/20]

Hell yeah!  Good job listening to your brain, congrats on the coming sabbatical, and I hope that you find a good rhythm of resting, recharging, and finding yourself in a better place.  I also think keeping a journal is a great idea-- that's what I did when I left my job, and I've found it really helpful in grounding myself and having a record to look back on my days, good and bad.  There's a reason journaling is a popular self-care/therapy tactic, lol.

Thank you for the encouragement, Fish Sweet!

So, huge bummer yesterday...my boss ended up taking the day off so now I get to sit a whole weekend and drum my fingers.

I'm sorry this meeting was delayed, but I hope you spend more of your time this weekend thinking about the great things you'll get to do rather than worrying about the meeting.  Of course, my question won't help that at all.  :)

How do you envision this conversation going with your boss?  Are you going to tell her that you're leaving and not much else?  Or are you going to explain the stress you're under and look for opportunities like you listed as option 2 in your initial post?  Depending on your field, your personality, the organization you're with, and how burned out you are either quitting for a year or going down to a less stressful role both seem like good options for me.  It sounds like your boss might be understanding, and if so she might look for ways to keep you on if you're open to that.  If she does try to get you to stay on while working with you to reduce the stress how would you respond? 
Also, with your education and experience it wouldn't surprise me if there are small organizations out there that need some legal services but can't afford to staff a full-time lawyer.  Do you think there might be any options for part-time work you could find?  Based on the little bit I've read, it sounds like after your break you might do well in some sort of consulting or self-employed part-time position.  That might get you out of the day-to-day stress while also giving you a much higher hourly rate than stocking shelves. 

[hoodedfalcon]

Well - I had the talk with my boss!

I let her know I would be leaving my position in the coming months. The timeline is a bit open-ended - I basically said I will leave once my balance is zeroed out on the student loans, but not sooner than 2 months from now. She was totally supportive - talked about two mini-sabbaticals she took when she was younger. Said I need to do what I need to do for myself. It basically couldn't have gone any better. She was disappointed, however, bc she and my other boss were talking about promoting me to a different role supervising the state directors, instead of being one of those state directors. She left the door open - said if I feel like coming back but with a different role, that I should get in touch with her. But that I might discover my next career goal is to become a baker (cough - dishwasher). I also mentioned a willingness to consult on a very limited basis.

We are going to follow up with a plan once she talks to my other boss.

WHEW. I feel a huge sense of relief and I am honestly pretty dang proud of myself for 1. surviving to this point and 2. changing the things that don't make me happy.

[Linea_Norway]

Well done. If this is a relieve, then you are already reducing your stress. You now have a plan and discussed it with your boss.
Would you like that other position in the future, supervising the directors? Or is that more stress? I have heard the theory that only being responsible for things isn't real work (apart from when it doesn't work, of course).

[MaybeBabyMustache]

Nicely done! It's a huge step to have that conversation.

[hoodedfalcon]

Well done. If this is a relieve, then you are already reducing your stress. You now have a plan and discussed it with your boss.
Would you like that other position in the future, supervising the directors? Or is that more stress? I have heard the theory that only being responsible for things isn't real work (apart from when it doesn't work, of course).

Thank you!!! Of course, yesterday my bosses reached out and asked if I would be interested in a 4-6 month leave of absence and then return to work - either in my previous role or in this new role. I let them know (essentially) that part of this break was letting my brain figure out what is next for me, so if I have something on the horizon it would undermine that effort. They understood that and said that if I decide I want to come back to work, I should reach out. So, I suppose it is nice to feel like there is a bit of a safety net there.

I mentioned to them I would like, ideally, to finalize my work in the next 2 months, but that since I am waiting on the feds, it could be longer. This is where they were incredibly gracious - offered to try to work out something where I am technically still an employee but "off the clock" so to speak. Gotta work that out with HR still. Plus I have about 5 weeks of accrued leave, so that gives me some wiggle room where I take the leave instead of cashing it out at departure.

All good things...but all this understanding has made me question walking away from the job! I mean, I don't want my current job - but this new role could alleviate some of the stress - I won't be responsible for the actual work on the ground. I would just be guiding and strategizing with each state director on how best to achieve goals for that state....which means I don't have to personally achieve the goals! WOOHOO. But I am going to stick with the plan. Shake off the indoctrination of *must have job* and see where it gets me.

[Fish Sweet]

That sounds like a fantastic deal!  Lots of flexibility for you, the potential to return if you so wished, but also a lot of support for your sabbatical.  It's good that you're keeping your options open in the meantime, though.  It's soooo easy to fall back into the 'but I should be working, because I should be working" mindset.