Author Topic: Opinions sought on grand life plan  (Read 2877 times)

iltpf

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Opinions sought on grand life plan
« on: July 08, 2015, 03:23:07 PM »
Hi! I'm a 27 year old Brit looking for some interesting perspectives on my situation and plans from the mustachian crowd.

I would say that my wife and I are probably half- to two-thirds-committed to mustachianism. Basically, we have a few major expensive vices; we love to travel (especially internationally) and I can't imagine being happy about giving up a significant amount for any reason. I'm very much into my football (soccer to most of you) and that does cost a few thousands pounds a year for season tickets, travel to games and a Sky Sports subscription. And the two of us are very much into occasional experiences of gluttony at fancy-ass restaurants.

The more mustachian side of us is that we are hiving away 60%+ of our income (between us we probably scrape into a 6-figure income with bonuses etc. included) and at the moment our stash is earning 3% in a bank account so our assets will be liquid and ready for us to sell our first home (the flat we currently live in) in a year or two and upgrade to the home that we hope to raise kids in. From there I've provisionally budgeted for two kids at about 250,000 each (some average figures I've found) and a weekly spend for me and the missus of abut 400 per week (inflation adjusted over time) for everything other than mortgage payments. We'll be "saving" money out of this budget to go towards the holidays. Everything else is to be stashed.

I'm looking for opinions on whether or not (and why) people think it would be "worth" kicking up the mustachian level. As it stands, my proposed figures have me dropping down to a 4 day week in 4-5 years' time (because I'm expecting to get a promotion to a decent management level by then, and I'd be worried about going for the promotion if I'd signalled to work that I was not a "fully committed" employee) and then working another 15 or so years until FIRE at 46 or 47. That sounds pretty damn good, but another part of me would like to save harder, drop the weekly spending, and leave the workforce sooner. That could potentially sound even better.

With that said, a part of me fears that I'd be retiring from work and not to something else (beyond entertainment and pleasure like cheap out-of-holiday-season travel, TV, video games, country walks etc.). On that point, I note that my father "accidentally" retired in his 40s (he was let go from work but then realised he had enough money to be FIRE if he sold up his expensive London home and replaced it with something smaller in a cheaper locale) and he seems pretty delighted to just watch TV with mum and walk around and see friends and family all the time without too much yearning, apparently, for anything greater in life. And I am pretty jealous of him for his lifestyle. So I'd be grateful for people's thoughts. Cheers!

CmFtns

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Re: Opinions sought on grand life plan
« Reply #1 on: July 08, 2015, 04:06:20 PM »
It all comes down to time.
Whenever you "spend" money on retirement you are "buying" time.
Retiring at 47 is an amazing feat by most standards but what about 37. What is that 10 years worth to you?

It's a personal choice you have to assess the value of spending now vs retiring earlier. Personally I enjoy the constant optimization game. I feel good by trying to spend the bare minimum while still fulfilling my needs and reasonable wants.
« Last Edit: July 08, 2015, 04:08:03 PM by comfyfutons »

mozar

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Re: Opinions sought on grand life plan
« Reply #2 on: July 08, 2015, 04:25:13 PM »
I would reconsider upgrading your house. Then you can still be spendy and still save money.

Mr FrugalNL

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Re: Opinions sought on grand life plan
« Reply #3 on: July 09, 2015, 01:07:19 AM »
The more mustachian side of us is that we are hiving away 60%+ of our income (between us we probably scrape into a 6-figure income with bonuses etc. included) and at the moment our stash is earning 3% in a bank account so our assets will be liquid and ready for us to sell our first home (the flat we currently live in) in a year or two and upgrade to the home that we hope to raise kids in. From there I've provisionally budgeted for two kids at about 250,000 each (some average figures I've found) and a weekly spend for me and the missus of abut 400 per week (inflation adjusted over time) for everything other than mortgage payments. We'll be "saving" money out of this budget to go towards the holidays. Everything else is to be stashed.

Do you have a breakdown for that 250,000 average per child? I have a feeling you could realistically be below average by a considerable margin.

I'm looking for opinions on whether or not (and why) people think it would be "worth" kicking up the mustachian level. As it stands, my proposed figures have me dropping down to a 4 day week in 4-5 years' time (because I'm expecting to get a promotion to a decent management level by then, and I'd be worried about going for the promotion if I'd signalled to work that I was not a "fully committed" employee) and then working another 15 or so years until FIRE at 46 or 47. That sounds pretty damn good, but another part of me would like to save harder, drop the weekly spending, and leave the workforce sooner. That could potentially sound even better.

Comfyfutons makes a good point about trading money for time. Only you can decide which matters more to you. Your plan as outlined sounds reasonable to me, but then so does a more austere variant where you don't spend as much on your hobbies and children and delay the home purchase until you're financially independent. You could retire earlier then, but would the tradeoff be worth it to you?

With that said, a part of me fears that I'd be retiring from work and not to something else (beyond entertainment and pleasure like cheap out-of-holiday-season travel, TV, video games, country walks etc.). On that point, I note that my father "accidentally" retired in his 40s (he was let go from work but then realised he had enough money to be FIRE if he sold up his expensive London home and replaced it with something smaller in a cheaper locale) and he seems pretty delighted to just watch TV with mum and walk around and see friends and family all the time without too much yearning, apparently, for anything greater in life. And I am pretty jealous of him for his lifestyle. So I'd be grateful for people's thoughts. Cheers!

Maybe you could have a conversation with your dad about his life choices and whether he would have done anything differently, given the chance. That might help you make up your mind about what's important to you.

iltpf

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Re: Opinions sought on grand life plan
« Reply #4 on: July 09, 2015, 02:42:53 PM »
Thanks for the thoughts!

It all comes down to time.

You're exactly right here, and I think that what I'm trying to work through at this point is figuring out for myself what price I'm prepared to pay for that time.

I would reconsider upgrading your house. Then you can still be spendy and still save money.

Ah, based on what I wrote, that's a very good point, but I realise that I missed out the part where I copy my dad and sell our next London property for something cheaper elsewhere at the point of FIRE. With London housing prices and trends, I'm essentially considering it an investment that I get to enjoy in person and rent isn't reasonable here either. We don't live in a flat where we could raise kids at the moment.


Do you have a breakdown for that 250,000 average per child? I have a feeling you could realistically be below average by a considerable margin.


I rounded the figures from this article: http://www.telegraph.co.uk/news/uknews/11360819/Average-cost-of-raising-a-child-in-UK-230000.html. It is only having reviewed it again just now that I noticed that one of the costs of having a kid is assumed to be driving lessons and their first car - crazy in my mind, so there's a few thousand quid saved already. Absolutely we'll be trying to keep those costs down and if that went well that's probably a few years shaved off of our FIRE date right there.

Maybe you could have a conversation with your dad about his life choices and whether he would have done anything differently, given the chance. That might help you make up your mind about what's important to you.

Good thinking; I will do. So far, whenever I've brought up the topic, he thinks I shouldn't plan things in such great detail because "life will happen" and the plans will have to change. But the way I see it, having a plan that you adjust to suit is considerably better than having no plan.

Mr FrugalNL

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Re: Opinions sought on grand life plan
« Reply #5 on: July 10, 2015, 12:29:40 AM »
Ah, based on what I wrote, that's a very good point, but I realise that I missed out the part where I copy my dad and sell our next London property for something cheaper elsewhere at the point of FIRE. With London housing prices and trends, I'm essentially considering it an investment that I get to enjoy in person and rent isn't reasonable here either. We don't live in a flat where we could raise kids at the moment.

I haven't researched London property prices, but from what little I know they are at record highs already. You might be disapointed when you eventually want to sell your London home. Tying up a lot of your net worth in a single property and expecting it to apreciate sounds like a rather risky proposition to me. I'm not saying you shouldn't do it, just that you should carefully consider the risks before you decide.