Author Topic: Methodology for Making Life Decisions?  (Read 4094 times)

Hoosier Daddy

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Methodology for Making Life Decisions?
« on: December 25, 2016, 09:53:32 AM »
Feliz Navidad Mustachians!

Apologies for the long post, didn't realize it would be this long! I would appreciate any advice that could be passed on for those daring to read the below novel lol.

My wife and I are currently debating what course of direction to take our lives. We are wondering if anyone could offer advice as to what things we should be valuing etc in order to arrive at the best decision... Currently it seems we are at a cross roads between the financially smart move and a move that could really boost our happiness. I am not sure which criteria is more important as they are seemingly correlated, to a point...

Option 1: Stay with current state

We currently live in a small town in Southern Indiana that has basically one major employer. It is a Fortune 200 company, but there are no other jobs for about an hour drive in any direction. One result of this is this town has very low expenses, especially relative to the amount they pay. Currently my wife makes about $110k in a job that has a market rate of about $80k (so enjoys a healthy premium). I earn about $60k in a role that has a market value of about $75k (so I am underpaid), but my wife's premium is greater than my deficit so we are winning as a team. Combined salary: $170k.

We are currently spending about $5k per month combined. This will go down to $4k per month if we buy a house in cash next year (~$100k). This would allow us to save a ton of money and retire in about 6 - 7 years from now. However the issue is the town is unbelievably boring and the town's major employer would render our house worthless if they were to run into financial trouble because they are the only source of jobs in the town. This scares us... On the plus side, it is a small town with good biking trails so commuting to work via bicycle is definitely an option as we live only 3 miles from work. Thus to summarize: Housing will be minimal as we could purchase a house in cash and commute via bicycle to work.

Option 2: Commute to preserve home value, boost entertainment options

We have thought about moving about 45 minutes north to a town that is a suburb of major city in order to have a more stable home price (because we intend to sell our home in 6-7 years when we retire to move to Tampa Florida). This would also greatly boost activities (especially cheap/free options) that we could engage in for fun. However as all mustachians know, the three categories to take care of for a high savings rate are housing costs, transportation and food. We both strength train so we eat a lot of food, but we only go out to eat once a week so we eat about $900 per month worth of food, but that amount is 90% grocery store. Moving north would depreciate our cars much faster than we do now (drive about 5k miles per year currently) and our gas costs would sky rocket.

Option 3 - Move to Tampa Florida now

Tampa FL is where I was born and where my dad, the most important person in my life other than my wife, lives. I very much enjoy biking, running, paddle boarding, kayaking, swimming, etc. that Florida offers year round. I have lived in Florida before as an adult (Miami) and felt an immense amount of joy during my time living here (currently in Tampa visiting for the holidays). The only reason I left was at the time my student loans had rendered me so cash flow constrained that the only way to get my life back on track in a quick way was to find a place with a large gap between earning potential and cost of living, hence this is why I ended up where I am now... However I have been debt free for years and my wife and I have about $100k of disposable, post-tax cash to invest to go along with our annual max contributions to both 401k and HSA plans. I feel we may be at a point now where maybe we start to enjoy our lives a bit instead of delaying all gratification until retirement.

Tampa housing looks like it will run us about $200k for a house of similar size as our current community. Assuming we both get market rate for jobs down here (per Glassdoor), we would end up with about $150-$160k per year combined income. But actual pay rates could vary widely as we dont have experience with the labor market here. However we likely would end up working in very different locations and would need to commute long distances in very congested traffic to get to work, which would obviously but a huge negative swing on the happiness curve... Car clownism at its worst :(. Other than that, monthly expenses should be similar...

Sorry for the long post, didn't expect it to be this long!

Do you guys have any advice on the best way to sort through these options? I currently see Tampa as the high risk high reward option while staying put is the low risk, low reward (in terms of current happiness) option.. The expected value (probability of success * happiness utility) is probably the same for both options... We have been going back and forth for weeks and can't come to a solid answer in any direction!




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Stash Engineer

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Re: Methodology for Making Life Decisions?
« Reply #1 on: December 25, 2016, 12:15:26 PM »
I wouldn't buy a house at all if you plan to sell it in 6-7 years and you aren't sure about the future market condition in your current small town.  I also wouldn't consider moving 45 min away just due to fear of job security.  Based on what you've said, I would be inclined to stay put and finish up the ER savings so when you move to Tampa you won't be constrained by the job or the ability to sell your property.  I know you are eager to get down to Florida, but it sounds like you have a pretty good situation now that will propel you nicely into RE.  Here's an alternate idea:  Could you stay in your current jobs for maybe another 3 years and then move to Tampa where only one of you would be obligated to work for a few more years?

Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #2 on: December 25, 2016, 01:01:16 PM »
Yes we are in a great situation as the employer treats us very well... staying and renting does sound attractive in some respects as well. If we stayed I feel we would need to invest our liquid capital, but with the S&P 500 so high, I would be afraid to put that much money into the height of the market... if we did stay, what would you invest it? Or would you keep the cash and assume the market will crash soon as it is so high (I know timing the market is impossible, but there doesn't seem to be any intrinsic value available right now either)...


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Stash Engineer

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Re: Methodology for Making Life Decisions?
« Reply #3 on: December 25, 2016, 01:44:56 PM »
I'd say do what you're comfortable with.  If not the S&P, put it in something else to hedge against inflation a bit, even if it's just a long term CD. 

Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #4 on: December 25, 2016, 01:49:22 PM »
Appreciate the thoughts Stash :)


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FIRE me

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Re: Methodology for Making Life Decisions?
« Reply #5 on: December 25, 2016, 05:39:26 PM »
I agree with Stash Engineer. Do not buy a house if you plan to sell in 6 or 7 years. Especially do not buy a house that would be unsaleable if the Big Company goes away.

If you can FIRE in 6 or 7 years I would stay put. Especially if your father's health is good and he is not elderly.

You might even accelerate your FIRE by cutting costs, $5,000 is a lot to spend per month. Cut the fat from your budget and be in Florida enjoying FIRE even sooner.

Stash Engineer

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Re: Methodology for Making Life Decisions?
« Reply #6 on: December 25, 2016, 06:16:14 PM »
Appreciate the thoughts Stash :)


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Anytime!  You're doing it right, just hang in there a little longer and keep making improvements where you can. :)

startingsmall

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Re: Methodology for Making Life Decisions?
« Reply #7 on: December 25, 2016, 07:51:08 PM »
Thanks for posting about this situation, because it gives me some great food for thought as well.

Your post mainly caught my eye because, like you, I'm a former Floridian who dreams of moving home someday. Especially during the winter.... right now, the desire is almost unbearable!! I grew up in Sarasota (just south of Tampa) and would LOOOOOVE to return. My spouse isn't on board, though, because he says it doesn't make sense. (Well, that and he's never lived more than an hour from his family.) I've always dismissed his concerns because he's definitely not the practical/financial one in this marriage, but maybe he's right.

We currently live in a small town in NC with a low cost of living. I hate it, because it's very rural/conservative/uneducated/racist/etc. But our cost of living is low and our pay just about on target with what we'd make in Sarasota. So maybe, like you, I need to just suck it up for a bit and wait until we're really in a position to ENJOY Sarasota living before moving down there. I don't like that answer, because NC winter makes me want to die (brown grass and dead trees as far as the eye can see....), but it's hard to argue with the logic.

Anyway, thanks for posting. No helpful advice for you, but you definitely helped me. And yes, Florida living is amazing.... I thought that living "near the mountains" would mean lots of outdoor opportunities, but I don't have nearly as many parks, hiking trails, bike paths, bike-friendly roads here as I did in Florida. I miss spending large chunks of time outside.

Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #8 on: December 25, 2016, 07:59:15 PM »
Thanks for posting about this situation, because it gives me some great food for thought as well.

Your post mainly caught my eye because, like you, I'm a former Floridian who dreams of moving home someday. Especially during the winter.... right now, the desire is almost unbearable!! I grew up in Sarasota (just south of Tampa) and would LOOOOOVE to return. My spouse isn't on board, though, because he says it doesn't make sense. (Well, that and he's never lived more than an hour from his family.) I've always dismissed his concerns because he's definitely not the practical/financial one in this marriage, but maybe he's right.

We currently live in a small town in NC with a low cost of living. I hate it, because it's very rural/conservative/uneducated/racist/etc. But our cost of living is low and our pay just about on target with what we'd make in Sarasota. So maybe, like you, I need to just suck it up for a bit and wait until we're really in a position to ENJOY Sarasota living before moving down there. I don't like that answer, because NC winter makes me want to die (brown grass and dead trees as far as the eye can see....), but it's hard to argue with the logic.

Anyway, thanks for posting. No helpful advice for you, but you definitely helped me. And yes, Florida living is amazing.... I thought that living "near the mountains" would mean lots of outdoor opportunities, but I don't have nearly as many parks, hiking trails, bike paths, bike-friendly roads here as I did in Florida. I miss spending large chunks of time outside.

It really is! Just got back from watching the sunset on Christmas Day, not bad ha! We spent our long walk on the beach today discussing this and we are currently wondering if a "bird in hand" is indeed worth two in the bush lol. I love Florida but I will never ever do the traffic again. Seeing that the opportunity for us both to avoid the traffic is pretty much remote, I don't think we will be moving back until we are FIRE. We are now looking at ways to invest the $100k that would essentially pay for our rent since we dont think investing in the small town is a good idea, which has been confirmed above as well... We would need about a 12% return on that money to do so, thus may look into SoFi or maybe even buying a few websites as they can sell for about 1 - 1.5x annual earnings, which is so much better than stocks...

Glad to hear from a fellow Floridian! Hopefully we both can return soon and get away from the brown/gray dreary winter of the north lol. I'll leave ruling the North to Jon Snow lol.


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Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #9 on: December 25, 2016, 08:00:35 PM »
I agree with Stash Engineer. Do not buy a house if you plan to sell in 6 or 7 years. Especially do not buy a house that would be unsaleable if the Big Company goes away.

If you can FIRE in 6 or 7 years I would stay put. Especially if your father's health is good and he is not elderly.

You might even accelerate your FIRE by cutting costs, $5,000 is a lot to spend per month. Cut the fat from your budget and be in Florida enjoying FIRE even sooner.

Thanks Fire me! Yeah I agree that buying the house is soooo scary! I think we are going to see if there is another way to earn a big enough return to pay for our rent indirectly via the proceeds....


very much appreciate the thought and confirmation :) Merry Christmas/Happy Holidays!


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startingsmall

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Re: Methodology for Making Life Decisions?
« Reply #10 on: December 25, 2016, 08:10:03 PM »
Glad to hear from a fellow Floridian! Hopefully we both can return soon and get away from the brown/gray dreary winter of the north lol.

I finally sucked it up and ordered one of those ridiculous light boxes earlier today. My 'winter blues' are getting worse every year, so I figured this was a not-too-expensive, low-risk first step to try to adjust to living here. (I've been here 10 years. I'm just now working through my denial!)

Do I think the light will work? Heck no. My issue isn't just daylight hours... it's that I want to be able to go for a walk on the beach every now and then (when I was in high school, I used to drive out to the beach after school and sit on a beach blanket to do my homework.... yes, I was a huge nerd, but I was a nerd who loved the outdoors!), or even just sit out on my back porch to get some fresh air without freezing my butt off, or (most importantly) look out my window and see some greenery instead of this awful, heinous landscape that looks like someone turned the saturation down all the way.

I can't do the brown/grey anymore. It makes me crazy.

Fingers crossed that we both make it back to Florida someday. For now, I'm counting down to a one-week trip home in February. FIRE is 10+ years out for us.... but maybe we can make it 5 years here in NC and then coast to the finish with a lower savings rate in Florida. We'll see. I'll just keep taking it one year at a time.

Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #11 on: December 25, 2016, 08:14:53 PM »
Glad to hear from a fellow Floridian! Hopefully we both can return soon and get away from the brown/gray dreary winter of the north lol.

I finally sucked it up and ordered one of those ridiculous light boxes earlier today. My 'winter blues' are getting worse every year, so I figured this was a not-too-expensive, low-risk first step to try to adjust to living here. (I've been here 10 years. I'm just now working through my denial!)

Do I think the light will work? Heck no. My issue isn't just daylight hours... it's that I want to be able to go for a walk on the beach every now and then (when I was in high school, I used to drive out to the beach after school and sit on a beach blanket to do my homework.... yes, I was a huge nerd, but I was a nerd who loved the outdoors!), or even just sit out on my back porch to get some fresh air without freezing my butt off, or (most importantly) look out my window and see some greenery instead of this awful, heinous landscape that looks like someone turned the saturation down all the way.

I can't do the brown/grey anymore. It makes me crazy.

Fingers crossed that we both make it back to Florida someday. For now, I'm counting down to a one-week trip home in February. FIRE is 10+ years out for us.... but maybe we can make it 5 years here in NC and then coast to the finish with a lower savings rate in Florida. We'll see. I'll just keep taking it one year at a time.

I actually got one of the lights this year as well to try! So far I'm not sure how well it has worked honestly it just makes my eyes hurt and it seems like it just reduces melatonin production to make me more awake but I don't feel it actually make me happier.

For combating the winter blues I am trying a more philosophical approach by trying to focus on the present more instead of always planning the future and and be more others focused as our brains are wired to find what is wrong with things to survive and thus if you always think about yourself you're always going to find what's wrong and you're going to be miserable LOL.

I sincerely hope you have better luck with the light than I did!

Go operation Happy Winter! Lol


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startingsmall

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Re: Methodology for Making Life Decisions?
« Reply #12 on: December 26, 2016, 09:08:12 AM »

I actually got one of the lights this year as well to try! So far I'm not sure how well it has worked honestly it just makes my eyes hurt and it seems like it just reduces melatonin production to make me more awake but I don't feel it actually make me happier.

For combating the winter blues I am trying a more philosophical approach by trying to focus on the present more instead of always planning the future and and be more others focused as our brains are wired to find what is wrong with things to survive and thus if you always think about yourself you're always going to find what's wrong and you're going to be miserable LOL.

I sincerely hope you have better luck with the light than I did!

Go operation Happy Winter! Lol


Ugh. That's not too encouraging! We'll see.

After all of this "we'll stay put for a while because it's practical" talk last night, I just don't know that I believe it. For us, a move to Sarasota would likely mean less driving time than we currently do. (Obviously, Sarasota is totally different from Tampa in that regard. I lived in Tampa for a year, but I was working at USF while living in Temple Terrace... I dreaded any day that errands/etc forced me to get on 275!!) My husband doesn't drive too much right now, but I commute 25 miles (45 minutes) each way in order to work at a job with halfway decent pay. Also, living in the middle of nowhere means that 'getting out of the house' almost always entails driving at least an hour (30 minutes to the nearest town that actually has parks or other things to do, 1.5 hrs each way to the mountains which is our favorite daytrip site). In Sarasota, I expect that we'd do a lot less driving, making the slight difference in housing costs less significant.

That still doesn't change the fact that husband is resistant, though. Maybe in a few years, once our kiddo is in school.... she seems pretty smart and I'm worried that she may be bored in the schools around here. Maybe that will be an incentive for him.

begood

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Re: Methodology for Making Life Decisions?
« Reply #13 on: December 26, 2016, 09:25:26 AM »
I'm another recruit for Operation Happy Winter!

I too just got a Happy Light - so far, as Hoosier Daddy said, it hurts my eyes, and I find myself checking the clock to see if the time is up yet! But I don't know if it's having beneficial effect beyond that yet - I'm only on Day 2.

In terms of the move to sunnier climes, oooooh, I feel you both! startingsmall, I live in southeast PA now but was born and raised in NC, and so an NC winter sounds pretty good to me right now! I have dreamed of moving back to NC, with its LCOL, smaller brick homes, milder winters... sunnier days... but its current politics are heartbreaking and infuriating to me, and so my "happy place" dream has turned into a nightmare.

Where I am now I have HCOL, unappealing architecture in the few houses we could afford, loooooong gray winters, and lots of deciduous trees (as opposed to NC pine forests) so bare dead branches OMG it's so dead and bare.

To add to the chorus, Hoosier Daddy, don't buy a house where you are now. Rent and save and spend your vacation time in FLA, preferably during their warm winter months!

startingsmall

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Re: Methodology for Making Life Decisions?
« Reply #14 on: December 26, 2016, 09:33:30 AM »
... but its current politics are heartbreaking and infuriating to me, and so my "happy place" dream has turned into a nightmare.

Yeah, that too. I'm in the no-man's-land between Charlotte and the mountains, surrounded by a sea of Confederate flags and hate.

Florida used to be the laughingstock of the country, but I think NC is taking the lead in that regard. Hmm.... maybe it's me? Maybe I'm a curse on whatever state I'm living in?

frugaldrummer

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Re: Methodology for Making Life Decisions?
« Reply #15 on: December 26, 2016, 01:16:14 PM »
The lights work - my old professor did some of the research.  Also take vitamin D, 2,000 IU/d (more if you're deficient) - helps a lot with seasonal depression.

Why not stay put, rent, and use your money to buy a house in Tampa now and rent it out?  Your renters could be helping to pay off your future home for you, and you wouldn't have to worry about being priced out of a future market.

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Re: Methodology for Making Life Decisions?
« Reply #16 on: December 26, 2016, 02:45:26 PM »
I agree with those who recommended not buying a house. 6-7 years is really on the edge of when a house starts to pay for itself in transaction costs, and there's risk involved, so I would just keep renting.

Can you apply for Tampa jobs from Indiana? If one of you gets one, then you can relocate and the other one can job hunt once in place. I know it's always harder to job-hunt from afar, but it might still be possible.

Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #17 on: December 26, 2016, 07:50:06 PM »
The lights work - my old professor did some of the research.  Also take vitamin D, 2,000 IU/d (more if you're deficient) - helps a lot with seasonal depression.

Why not stay put, rent, and use your money to buy a house in Tampa now and rent it out?  Your renters could be helping to pay off your future home for you, and you wouldn't have to worry about being priced out of a future market.

That's a very interesting thought... we will look into this for sure; appreciate the thought! Our early retirement without being in the tropics would be a huge bummer for us lol! I have always wondered why California is so expensive and Florida isn't... I'm assuming the only difference is the underlying economies, but still, Florida does seem really cheap to me compared to what it offers... in any case, I could definitely see a huge swing in prices in the near future in this market and it would be nice to get in front of that! We will look into possibly getting a realtor and a mortgage letter...

Any idea if you would need to put the house under another business to shelter your personal finances from the business?


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Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #18 on: December 26, 2016, 08:15:27 PM »
I agree with those who recommended not buying a house. 6-7 years is really on the edge of when a house starts to pay for itself in transaction costs, and there's risk involved, so I would just keep renting.

Can you apply for Tampa jobs from Indiana? If one of you gets one, then you can relocate and the other one can job hunt once in place. I know it's always harder to job-hunt from afar, but it might still be possible.

We definitely could. We are at a company that treats us well and we are well on our way to FIRE so we are a little afraid of the "bird in hand" thing coming to fruition, but this could be completely illogical... or well founded, who knows... I think we will definitely look for a house here to get ahead of any price hikes in the future, and rent it out in the meantime. But not sure if we should move down now or wait.. I work in Finance and there are a ton of opportunities in Florida for that but my wife works in engineering and I am not familiar with many opportunities in that field here in Florida... worried our "team" as a whole may not fare as well down here as it does up north on the financial end...


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Hoosier Daddy

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Re: Methodology for Making Life Decisions?
« Reply #19 on: December 29, 2016, 08:43:42 AM »
I'm another recruit for Operation Happy Winter!

I too just got a Happy Light - so far, as Hoosier Daddy said, it hurts my eyes, and I find myself checking the clock to see if the time is up yet! But I don't know if it's having beneficial effect beyond that yet - I'm only on Day 2.

In terms of the move to sunnier climes, oooooh, I feel you both! startingsmall, I live in southeast PA now but was born and raised in NC, and so an NC winter sounds pretty good to me right now! I have dreamed of moving back to NC, with its LCOL, smaller brick homes, milder winters... sunnier days... but its current politics are heartbreaking and infuriating to me, and so my "happy place" dream has turned into a nightmare.

Where I am now I have HCOL, unappealing architecture in the few houses we could afford, loooooong gray winters, and lots of deciduous trees (as opposed to NC pine forests) so bare dead branches OMG it's so dead and bare.

To add to the chorus, Hoosier Daddy, don't buy a house where you are now. Rent and save and spend your vacation time in FLA, preferably during their warm winter months!

I hope the light starts working for you! Maybe I need to try it for a longer period of time as well!

And I hear you on the trees and the gray! If we lived in Colorado where there was sunshine and green pine forests, we definitely would be much happier!

Charleston, SC is still pretty close to NC (obviously) and is a great place to live I hear... Maybe that could be a good alternative?


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begood

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Re: Methodology for Making Life Decisions?
« Reply #20 on: December 29, 2016, 12:46:39 PM »
HoosierDaddy, the happy light thing is going better! I'd done 45 minutes today before I even realized it. Maybe try to build up really gradually? Or put it farther from your face to start?

I think Charleston will be under water eventually, and SC politics aren't much better than NC's... but I appreciate the thought. :)

I have looked at areas like Rock Hill and Lake Wylie, just south of Charlotte, NC (one of the cities on my retirement list). Lower COL and still close to the "big city". I'd need to make sure we could access health care in NC if we needed it, even as SC residents. Not sure how all that works!