Author Topic: Not necessarily looking to "retire"  (Read 3269 times)

1eyejack

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Not necessarily looking to "retire"
« on: September 21, 2013, 12:45:33 AM »
I've read a few of the mustache articles and find the advice quite helpful.  I can totally see how two childless partners with the right degrees and opportunities can retire at 30, and I completely agree that a family of 3 can live on $27k / year in the right city if they own their home.  I have some questions for the community:

1.  Is this community only for < 35 people who only want to retire early?  I am 35 now, and feel that I'm only really starting out in life because I got a PhD, which takes quite a while.  I've been out working for about 7 years.  I don't feel old, but maybe the community would see me as "too late".

2. I'm not really looking to "retire".  As a PhD physicist I get to work on very interesting problems, so "work" isn't really that bad - with the exception that no real job in physics is simply sitting around solving problems, about 3/4 of it is pushing paper around to justify your existence.  But that doesn't mean I'd want to stop doing physics at 45 or even 75.  I'm looking more for financial stability and a modest middle-class life, which I really haven't had before.

3. I don't have the luxury of just sacrificing my "lifestyle" (for example, the single guy with a high-paying job who paid down his student debt in 7 months) because I am supporting a wife and very young child on one income.  We have chosen this path because (a) we believe that having one parent raise our child is better than having that parent go out and work a subsistence job that barely makes up for child care (seems to be in alignment with Mustache) and (b) my wife graduated in 2009 and never got a full time job using her degree (bad timing), thus dooming her to long-term unemployment which is difficult to recover from.  We really already do sacrifice our lifestyle just to "get by".  So is there a place for my situation here, or is it really just for people who have some financial room to move - ie who are just out of college without as many financial obligations?  Here is my situation:

Assets (from the Mustache pov):
- We don't carry credit card debt
- We don't have smart phones (2 dumb phones = 1 smart phone)
- We don't have cable, or Netflix, or any of that entertainment monthly maintenance nonsense
- We don't eat out often (probably could cut back more)
- We don't really go out with friends at all - no time with small child
- I finally have a 401k, only recently gained by employment promotion, at present putting in 5%, which is matched at 3%, so 8% total... 3% is the maximum match.  What stingy company do I work for?  I'll give you one guess after this hint - I've been furloughed recently.  I am aware that this is too low, I'm trying to build the standard emergency fund first, which was a smart move because we needed it recently... did I mention I was furloughed?  I could use the money to pay down student debt, but I'd lose the matching money.
- With the exception of about $5k, we have paid down student debt with interest rates higher than the standard lower 3.5% rate (ie only ~$5k left with the 6.8% rate)
- We have excellent healthcare benefits
- We shop for clothes at thrift stores
- We eat healthy (though food is not cheap in our city, certainly not compared to the prices Mustache has given for Boulder)
- We do our own exercising outdoors instead of having a gym membership

Detriments:
- Both myself and my wife have student debt, which is about 10% of take-home pay at current payback rate (the payoff time is complex because we chose different schedules).  The total student debt remaining stands at about 3/4 take-home annual income.  We try to pay more than 10% when we can.
- We live in one of the most expensive cities in the country, so rent is about 40% take-home pay.  While this sounds high, we have tried to move locally for the last 2 years and have only found less space for more money because the rental market is appreciating much faster than our own landlord is raising rates (our rent is going up about 7% / year).  Obviously we don't own a home.
- Given that I'm barely keeping up with the emergency fund, we do not have downpayment savings for a home
- The metro region we are in has the 3rd highest housing market per capita in the country.  Condos are median about 3.5x my gross salary, attached (town) homes are 5x my gross salary, single family homes 6.5x. 
- My income has become somewhat unstable recently and depends on the annual whims of politicians.
- Since there is no public transport to my job, and the job is located in a high-crime area, I drive to work (note, though, that parking there is free).  I recently bought a used Prius to save on gas. 
- Since I "needed" a car for work, we could only afford to live in housing that is off the major public transport, so my wife also needed a car so she could get to various part-time jobs.  Thus we have 2 cars.  My wife's part time work often isn't on public transport either - the city really needs better public transport.  The city is not bike-friendly, though people certainly ride them.  It is not necessarily the case that we could save by ditching a car and living on public transit - proximity has a huge effect on housing values, particularly rent - and this would limit my wife's ability to work part time because the public transit is inadequate.  Many jobs are very spread out in space due to sprawl.
- Both of our parents are lower-class/barely getting by, so we cannot get help from immediate family (on down payments, for example)
- We don't have a whole lot of assets to sell - maybe the couch?
- We do have a mild chronic illness to worry about, which makes changing jobs risky due to healthcare uncertainty.

Yeah, I thought a PhD in physics would mean I'd be better off by now too.  It seems that the real middle-class salaries are in finance, software, health industry, and MBA jobs.  I can do some of those things, and am considering making a move.  I think the best first step to get on track to stability (much less early retirement) would be to find a job at commensurate salary that moves us to a cheaper city/town.  I have some leads.  The change in location seems to be the greatest influence on turning things around, considering the high cost of the current city.  Once there, the next steps would be (a) complete emergency fund, (b) get downpayment and buy house to stop losing money in rent, (c) pay down student debt, depending on whether general interest rates have gone back up.

Does this plan sound reasonable as a goal?  Am I missing something that I'm really, really doing wrong?

Thanks in advance.

gooki

  • Handlebar Stache
  • *****
  • Posts: 2412
  • Location: NZ
Re: Not necessarily looking to "retire"
« Reply #1 on: September 21, 2013, 01:05:47 AM »
Yes, sounds like a good goal. I would definitely continue to explore the options of being a one car family.

 To address your first few points.

1. All ages are welcome, and actively participate.

2. I expect most of us intend to work post FI. Just reaching the goal of being FI allows for many more employment opportunities.

3. I'm in a similar situation. I count my wife's years at home raising the children as retirement in advance :)

1eyejack

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: Not necessarily looking to "retire"
« Reply #2 on: September 21, 2013, 09:55:42 AM »
Ok, thanks for the encouragement!  I'll keep plugging.

I'm not sure my wife quite sees childcare as "retirement", but I think she feels more accomplishment out of it at the end of the day than any job she has ever worked. 

Free_at_50

  • 5 O'Clock Shadow
  • *
  • Posts: 91
  • Age: 56
  • Location: Arkansas
Re: Not necessarily looking to "retire"
« Reply #3 on: September 21, 2013, 10:35:55 AM »
I am 49 and have appreciated the various perspectives of everyone on this forum so hopefully age is not an issue!  :)  I have taken the message of this forum in two parts.  First it sure feels great when you finally realize that you don't have to be beholden to any employer (becoming FI) regardless of whether you want to continue to work for someone or not, and second you can get there fairly quickly by combining saving with stripping out the unessential things in your life that truly don't make you happy anyway.  The younger you start the sooner you get there, but no age is too old to start!  :)  Good luck to you on your personal journey!

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Not necessarily looking to "retire"
« Reply #4 on: September 21, 2013, 12:00:46 PM »
Definitely not just for under-35s.  Heck, I didn't even get my BS until around that age.  I also have no intention of actually retiring, though I have gotten to a point where work is somewhat optional, and can be done on my own schedule, rather than punching a timeclock and spending my days in a cubicle.  The work I do is interesting, and good mental exercise besides.

I'll also point out that a PhD in pretty much any hard science can be a pretty good qualification for a certain class of jobs in software.  In my last full-time job, a couple of team members had physics PhDs.  (And my own BS is in math & physics...)

ender

  • Walrus Stache
  • *******
  • Posts: 5418
Re: Not necessarily looking to "retire"
« Reply #5 on: September 21, 2013, 12:04:35 PM »
Not necessarily.

I'm midtwenties and am not necessarily hoping to retire early.

Why am I here? I want freedom - being wealthy (relative to spending at least) creates an immense freedom. Freedom to enjoy work, freedom to do different things, freedom to basically choose what I want to do without being financially constrained.

Plus a "consume what you need" vs consumeristic worldview is much, much healthier in my opinion. For both me and the world.

mandydean

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Re: Not necessarily looking to "retire"
« Reply #6 on: September 21, 2013, 07:32:12 PM »
Yes, sounds like a good goal. I would definitely continue to explore the options of being a one car family.

 To address your first few points.

1. All ages are welcome, and actively participate.

2. I expect most of us intend to work post FI. Just reaching the goal of being FI allows for many more employment opportunities.

3. I'm in a similar situation. I count my wife's years at home raising the children as retirement in advance :)

I just have to say, as a wife in her years at home raising children, IT IS NOT RETIREMENT!!!!!!

:-)

(I know what you meant, but could not let it go un-checked!)

Thank you and good day.

Freestyler

  • 5 O'Clock Shadow
  • *
  • Posts: 59
Re: Not necessarily looking to "retire"
« Reply #7 on: September 22, 2013, 03:53:29 AM »
Apart from what has already been said I would say a PhD in physics should give you kind of an edge also to work as a quant in the financial industry (see Jacob at early retirement extreme if you havenīt done it already... you could find your academical-professional pathway hasnīt been that different).

What I wonīt probably do is accumulate more studies' debt in hopes of increasing your work and income options, just in case you are considering. If you ever want to increase your income at all, just try to find other ways around (be it without more formal studies or through more studies but very cheap or virtually free).

Best of luck.