Author Topic: Reader Case Study: How to minimise time to FI  (Read 10483 times)

Spiliph

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Reader Case Study: How to minimise time to FI
« on: October 09, 2014, 10:48:26 AM »
First of all great blog and a great forum. I only discovered MMM a week or two ago and have been hooked. I read how an earlier poster that felt like Neo awaking to the Matrix, and can't agree more with him. I was prepared to be a wage slave until old age, but now I was to:
1. Become FI so that I can sleep easier at night.
2. RE so that I can enjoy life more.

Okay so I am a software engineer and have squandered all the money that I have made in my working life, putting off saving until later. I am 33 years old, married with a 17 month old daughter. We have zero savings, two car loans and a mortgage. I have already started taking steps to get onto the right path, I am selling my car but will have save up to get rid of my wife car. It is currently worth about half as much as she owes I would guess.

Also my wife is not really buying the MMM ideals yet, so I compromised on giving her an allowance. I can do away with mine, but that seems ridiculous as I would basically be forfeiting all of my money for our family's benefit.

Gross Income:
Salary: 116,000
Bonus: 24,000
Rental Income: 9000 (Taxed differently because it is a foreign property I think)

Monthly Net Income:
Salary: 8,152
Bonus: 8,300 May
Bonus: 8,300 November
Rental: 416
My wife is not going to be working for a bit to look after our daughter.

Current monthly expenses: $7,469
401k: 1458
Health Insurance: 400
Rent: 2200 (Kirkland)
Food: 600
Natural Gas: 50
Electric: 80
Garbage, Sewerage: 120
Transport: 200
Mortgage: 1300
Wife's car: 350
Wife's car insurance: 51
Allowance: 250
Wife Allowance: 250
Internet: 70
Netflix: 10
Clothing: 50
Bank fees: 30 (High I know, but this is the fees for a private bank abroad)

Expected monthly ER expenses: $2740
Health Insurance: 700
Rent I want to own a property free and clear.
Food: 600
Utilities: 300
Transport: 300
Mortgage
Wife's car
Wife's car insurance
Allowance: 250
Wife Allowance: 250
Internet: 70
Netflix: 10
Clothing: 100
Car insurance: 100
Property taxes: 60

Assets: 128,000
Home: 120,000
Car: 8,000
Savings: 0
401k: 0

Liabilities: 120,000
110,000 - 12.5% - Foreign home loan. High interest rate due to
13,000 - 13% - Wife's car

Specific Question(s):
So I would like to start being bad ass, luckily I managed to nab a well paying job, moving to the US and due to tax implications there isn't really a possibility of saving until the start of 2015. I plan to pay off my mortgage and wife's car ASAP.

1. Pay off wife's car.
2. Pay off mortgage.

I calculated that if I pump in all my free money (excluding 401k), plus my rental income into my foreign mortgage I should be able to pay it off in about 3 years.

My goals.
1. Reduce required income by minimizing expenses (pay off mortgage, pay off cars).
2. Become FI as soon as possible.
3. Put money aside for schooling for my 17 month old.
4. Have money for her college tuition.

There are basically two FI targets
1. FI in terms of having enough to live without luxuries (food + accommodation)
2. FI in terms of not needing to work to enjoy ER lifestyle.

I was considering property as an invest vehicle. In my country 100k can buy a pretty okay entry level home with an acceptable rent of $700 - $800 a month. After doing a lot of investigation I realised that running a letting business is actually pretty complex and that one would probably only be able to consider a small portion of the after tax income as profit. Mostly because you will need to maintain the property and save for unforseen expenses.

Any help in reaching my goals will be marvelous.
« Last Edit: October 09, 2014, 06:41:32 PM by Spiliph »

Chrissy

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Re: Reader Case Study: How to minimise time to FI
« Reply #1 on: October 09, 2014, 11:25:02 AM »
Would you please list your monthly take-home pay?

Would you please break down utilities a little further?  How much for electric?  How much for gas?

How much are your mobile phones?  Is that amount reflected in one of these categories?

Why is clothing not part of your allowances?  Is this for your daughter?

My first suggestion is that you're spending way too much of your income on housing/real estate.  If the rental property is only bringing in $5,000/yr, but costing you $1,300/mo, you're losing your shirt.  Your rent is also really high.  Where are you located?

You might be able to get your wife on board with more cost-cutting strategies if you give her a percentage of the savings.  That way, she sees a reward for her good behavior.

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #2 on: October 09, 2014, 11:54:02 AM »
Would you please list your monthly take-home pay?
Done

Would you please break down utilities a little further?  How much for electric?  How much for gas?
Done

How much are your mobile phones?  Is that amount reflected in one of these categories?
We don't have mobile phones yet, but that would be part of each person's allowance.

Why is clothing not part of your allowances?  Is this for your daughter?
Yep, it is my daughters budget. You won't believe how quickly they grow.

My first suggestion is that you're spending way too much of your income on housing/real estate.  If the rental property is only bringing in $5,000/yr, but costing you $1,300/mo, you're losing your shirt.  Your rent is also really high.  Where are you located?
1. We are based in Seattle, WA. I work in downtown Seattle.
2. Agreed my mortgage is insane which is why I want to pay it off.


You might be able to get your wife on board with more cost-cutting strategies if you give her a percentage of the savings.  That way, she sees a reward for her good behavior.
That is an interesting idea!
« Last Edit: October 09, 2014, 12:08:14 PM by Spiliph »

MDM

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Re: Reader Case Study: How to minimise time to FI
« Reply #3 on: October 09, 2014, 12:05:50 PM »
Spiliph, welcome to the forums.

As Chrissy's questions imply, some parts of your post are not clear.  E.g., does "only deducted tax" apply to your rental income as well, or is the $5K net after rental expenses?

It is easier for readers, and good for your own understanding, to start with "income" and then list all "outgo".  "Income" includes salary, interest, dividends, etc. etc. - anything somebody pays you.  "Outgo" includes taxes, insurance, 401k, IRA, utilities, food, etc. etc. - any use to which you put your income, no matter if that use is pre-tax, for tax, or after tax.  The difference between income and outgo is rate at which your bank account balance changes. 

The degree to which you should itemize all your outgo is subjective.  More is usually better, but there are definitely diminishing returns to excruciating detail.
In other words, it's ok to have a small "miscellaneous" category so your income minus outgo does equal your bank balance change: we don't need a list of every single expense, but if "miscellaneous" is high (say, more than a few percent?) you can expect questions.

ETA: Some of the above won't make sense to later readers due to edits to the OP...but I'll assume Spiliph understands....
« Last Edit: October 09, 2014, 12:10:58 PM by MDM »

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #4 on: October 09, 2014, 12:17:56 PM »
Hi MDM. Thanks for the welcome and comments. Due to the complexity of my income and taxes the Income section is my salary minus the Federal and FICA taxes. So my bonus, salary and rental incomes are the normalized values after taxation.

Including my taxes under expenses will either mean that I need to state the average tax for the year, or do special things for the months in which I get bonuses.

If it is still unclear then I can be more specific?


Allen

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Re: Reader Case Study: How to minimise time to FI
« Reply #5 on: October 09, 2014, 12:18:47 PM »
Make sure your wife is on board with your new direction.  You will cause waves and anxiety if you start selling her car or whatever.  From her perspective you will have gone nuts.

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #6 on: October 09, 2014, 12:23:42 PM »
Hey Allen. She is supportive and has agreed that we should get rid of her car. We are going to be working together on our new lifestyle, I am lucky in that regard. I just can't drop it on her cold turkey, hence the idea of the allowance.

zoltani

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Re: Reader Case Study: How to minimise time to FI
« Reply #7 on: October 09, 2014, 12:35:48 PM »

Rent: 2200 (Kirkland)  (Can only find cheaper places in the Rainier Valley which is almost a slum)

First, I take issue with this as it is untrue. There are plenty of ways to find cheaper rent in the Seattle area. And calling Rainier Valley a slum is a big stretch....

What size place do you need?

Why do you want to keep the house with the mortgage if you are losing so much money on it? What country is it in?

How do you plan to own a house free and clear in the Seattle area with no savings and attitudes that you have about certain "less desirable" areas?  FWIW I moved out of Seattle to Tacoma, much cheaper to buy or rent and a nice place to live, no mater what the Seattle yuppies say...

Groceries - Shop in the international district of Seattle for cheap produce, maybe even check out the ethnic groceries north on Aurora.


Mother Fussbudget

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Re: Reader Case Study: How to minimise time to FI
« Reply #8 on: October 09, 2014, 12:37:07 PM »
If you're living in Kirkland, and working in Seattle, do you take the WA-520 toll bridge, or the free I-90 to cross Lake Washington?
Have you considered moving to somewhere on the I-90 corridor (i.e. Factoria, Mercer Island/Shorewood, Issaquah)?

And I don't see your cell phone(s) listed in expenses - lots of potential savings there by moving to a pre-paid plan. 

MDM

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Re: Reader Case Study: How to minimise time to FI
« Reply #9 on: October 09, 2014, 12:37:46 PM »
Hi MDM. Thanks for the welcome and comments. Due to the complexity of my income and taxes the Income section is my salary minus the Federal and FICA taxes. So my bonus, salary and rental incomes are the normalized values after taxation.

Including my taxes under expenses will either mean that I need to state the average tax for the year, or do special things for the months in which I get bonuses.

If it is still unclear then I can be more specific?
We assume all monthly income and outgo numbers are yearly averages.  In your case it appears there is no state income tax, but that isn't true for all (see http://taxfoundation.org/blog/top-state-income-tax-rates-2014).  Marginal tax rates can affect investment strategy (e.g. deciding traditional vs. Roth) so including taxes as separate line items helps clarify things.

Similarly with rentals: most landlords have rental income, real rental expenses (mortgage, maintenance, etc.) and depreciation.  It is helpful to know how much of each.

You can check (even use) the spreadsheet linked here for a "for example" on these ideas.

seattlecyclone

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Re: Reader Case Study: How to minimise time to FI
« Reply #10 on: October 09, 2014, 12:50:29 PM »
The interest on your loans is killing you. Why do you still own a home in your old country, mortgaged at 12%, with the rent not even coming close to covering the mortgage payments? Sell that thing right now and you'll immediately free up a lot of cash to save every month, plus you'll rid yourself of the hassle of being a landlord from another country.

I agree with the others who say there are perfectly fine places to live that cost less than $2,200/month. Look around and you'll find some.

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #11 on: October 09, 2014, 12:57:08 PM »

Rent: 2200 (Kirkland)  (Can only find cheaper places in the Rainier Valley which is almost a slum)

First, I take issue with this as it is untrue. There are plenty of ways to find cheaper rent in the Seattle area. And calling Rainier Valley a slum is a big stretch....
Apologies, I really didn't mean to offend. I am happy to consider all of my options. I realise now that I was rude and being a Mr. Complainy Pants.

What size place do you need?
We need a 2 bedroom place, at least 1000 square foot. Current place is 1600 square foot give or take.

Why do you want to keep the house with the mortgage if you are losing so much money on it? What country is it in?
It is in Cape Town, South Africa. It is really a nice place that we got for a good price. Has a massive pool, around 1700 sqft and 5 minutes drive from the beach. We were just renting the place so that nobody breaks into it in our absence.

How do you plan to own a house free and clear in the Seattle area with no savings and attitudes that you have about certain "less desirable" areas?  FWIW I moved out of Seattle to Tacoma, much cheaper to buy or rent and a nice place to live, no mater what the Seattle yuppies say...
I wasn't sure where I planned to own the house. Once I RE there is no real reason to remain in Seattle.

Groceries - Shop in the international district of Seattle for cheap produce, maybe even check out the ethnic groceries north on Aurora.
Cool idea! Thanks

zoltani

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Re: Reader Case Study: How to minimise time to FI
« Reply #12 on: October 09, 2014, 01:19:51 PM »
RE the place in south africa:

Do you ever plan on moving back and living in this house? Is that the goal once you FIRE?

If not sell immediately! 12% interest, huge mortgage payment that rent does not even cover. Sounds like there is some emotional attachment.

Plenty of places in the US to buy rental property for less than 100K and get good rents. I personally own two that were around 60K each, one gets $800/month and the other gets $760/month. Sell your property and invest in something that actually turns a profit!


rdall

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Re: Reader Case Study: How to minimise time to FI
« Reply #14 on: October 09, 2014, 03:02:56 PM »
I'm new to this forum but live in the area.  I would highly recommend moving into the city so you can commute to work by bicycle, cheaper and healthier.

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #15 on: October 09, 2014, 05:59:30 PM »
Thanks for all the feedback. Yeah, I definitely have some emotional attachment to the  property in South Africa. My wife and I are unsure if we are going to be returning once we FIRE. It really depends on the political climate in the country, and how much we end up loving the states. My original thought was that our money would go a lot further in SA.

Here is a link to my finances in the format suggested by MDM.
https://docs.google.com/spreadsheets/d/1QeUi7WzxSe-U2bDgzRO1Ntf6N_zEcjOo58lGBPu-79A/edit?usp=sharing

Looking at the numbers again it certainly seems ridiculous when I look at our spending in certain areas. So embarrassing.

Okay so my first take a way is look at cheaper places. Also my company provides us with Orca cards that I can use to get free public transport. So that is at least a win :)

MDM

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Re: Reader Case Study: How to minimise time to FI
« Reply #16 on: October 09, 2014, 08:53:42 PM »
Thanks for the beta testing on the spreadsheet.  It appears the array formula for tax and marginal rate didn't survive the back and forth between Google Docs and various versions of Excel (when I tried to download your version), so I've attached (what I think is) a working Excel version here.  The version one gets from the "How To: Write a "Case Study" Topic" has also been changed to eliminate the array formula.

Anyway, you've identified some things to work on, and you are already doing better than many in some areas (e.g., max 401k).  Good luck!






Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #17 on: October 09, 2014, 11:27:53 PM »
Thank you so much for the updated excel doc. It is really helpful in estimating my time to FIRE, and especially useful in highlighting wastefulness. There is certainly a fine balance between non being wasteful and living like a monk. Hehe.

ScroogeMcDutch

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Re: Reader Case Study: How to minimise time to FI
« Reply #18 on: October 10, 2014, 01:56:45 AM »
Regarding retiring in South Africa and your property there - from the few sentences it sounds like you are in love with the place or for nostalgic reasons. That means it could have a value to you that it doesn't have to the marketplace. I would suggest looking at it from a financial perspective now, as it is costing you a lot of money and time for your FIRE goal.

Your income off the property is 9000, and interest payments are 13750, so you're bleeding out 4750 there, not counting maintenance, insurance etcetera.
You say you paid a good price for it ($110k) and list the asset as worth $120k.

My first suggestion would also be to get rid of the property asap. That in itself will already be a difference of about 5k annually. You mention you may want to FIRE in SA depending on the political climate. I would say write that down somewhere in your policy so you do not forget that this is one of your goals/dreams/considerations, because it seems that house is symbolizing that nostalgic feeling.

That's just my .02 though :)

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #19 on: October 10, 2014, 03:08:02 AM »
Yes, I won't lie there is a very large nostalgia regarding our offshore property. It is also one area in which my wife is very unlikely to budge. I had a chat with her last night and I fear that if I push her too hard I will lose her support completely. Regarding the value of the property, it is actually valued at 180k by independent realtors and assessors and what the bank forced us to insure the replacement value at. I am an extreme realist and always look at the worst case scenario.

I already convinced my wife of the following
* No dining out unless it is from our personal allowances.
* Reduce combined allowances from 500 to 300 a month.
* Reduce rental from 2200 to 1500.
* Save all additional money
* Getting rid of her car.

So we are not in a perfect place, but we are a hell of a lot better off and my wife is on board with the plan. Thanks guys. Given the 12% interest rate on the mortgage I need to reduce my balance asap. I also realise that it increases my time to FIRE from 10 years to 14 years based on my new income distribution. Unfortunately that time does not account for the fact that we will need to actually buy a home here in the States. Going to see what impact my wife working will have on our time to FIRE.

So here is my saving plan for the next 3 years.
1. Continue max 401k contributions.
2. Get rid of wife's car asap
3. Put remaining funds in mortgage. Should be paid off in mid 2017. (Worst case we are out 100k)
4. Start investing in index funds et. al. thereafter.

My wife will look at working again in the near future to accelerate our savings.

EDIT
Also this is part of my risk reduction strategy. The amount required to be FI in South Africa is about a third of what is required in the US, give or take. So my bread and butter worst case FI goal can be achieved a lot quicker.

Here are some FI goals. How soon can I become FI if:
* I only need money for Bread+Butter and Utilities
* I want to do small jobs to continue my current lifestyle
* I want to continue my current lifestyle without working
* I want to live slightly better (i.e. holidays, some luxuries)

How do you guys normally set your milestones? Milestones are a great way of tracking progress and keeping yourself motivated.
« Last Edit: October 10, 2014, 03:54:11 AM by Spiliph »

rmendpara

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Re: Reader Case Study: How to minimise time to FI
« Reply #20 on: October 10, 2014, 03:46:57 AM »
I would focus first on budgeting, as you are running close with ~$8k income and ~$7k spending.

First, build up a cash buffer. This will prevent you from dipping into credit cards or having to struggle if an unexpected expense comes up.

Keep maximizing your 401k contribution (which you are), and try and build up a cash balance of ~3 months of expenses (roughly $20-25 thousand USD).

Once you have some cash savings, then look into investing further with your cash flow each month (I think 1-2 years you'll be able to invest more than your 401k).

Stay on budget, max out 401k, consider a Roth or IRA for yourself/wife (check tax rules, I think wife may not be able to contribute if she does not have earned income this year or next?.. can someone else verify?). Automatic investments are the best at this stage of your life.

For me, I max out 401k and Roth (17.5 + 5.5), which accounts for more than 70% of total investments through the year. I add a little every few months as my cash builds up more than I need to keep in savings.

Good luck, and welcome to US!

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #21 on: October 10, 2014, 04:01:34 AM »
Interesting take. Thanks for the input. Yeah, the emergency fund is also something that appeals to my nature (Risk Averse). From what I gather it seems like because I am hemorrhaging cash, i.e. my hair is on fire, I should concentrate on getting rid of debt first?

Here are some interesting results. Based off of MDMs spreadsheet I can see the following:
Keeping SA home, renting in the US, retiring to SA
Time to FIRE: 14 years
401k: 220,113
Investments: 770,000
'Income': 3,120 per month at 4% withdrawal

Dumping SA home, buying in US, remaining in US
Time to FIRE: 13 years
401k: 309,977
Investments: 1,085,381
'Income': 4,620 per month at 4% withdrawal

Budget needs to change a little for the latter to include insurance, property taxes, etc. So would likely work out to be about the same. Not dumping the SA home adds around 4 years to my time to FIRE give or take. All of this was calculated based on the worst case of my never getting a raise, and the wife not getting a job.
« Last Edit: October 10, 2014, 04:14:46 AM by Spiliph »

geek101

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Re: Reader Case Study: How to minimise time to FI
« Reply #22 on: October 10, 2014, 10:40:08 AM »
Why would you max out your 401k? It doesn't look like it will allow you to move down a tax bracket.

If FI is the goal, and you have a high probability of keeping the house in SA, your quickest path to FI is eliminating that debt before heavy investment. Since you are planning on getting rid of wife's car, every cent of extra cash flow should go towards your mortgage. Only contribute up to the match in your 401k. You have a 12.5% guaranteed return from that mortgage!

Since it doesn't sound like you will be selling the house (at least not in the near future) you should absolutely pay it off as quickly as possible. In a few years if you decide you love the states and want to RE here, you can re-evaluate and sell it if need be.

You have 0 usable net worth right now. No savings, no investments. Your house isn't an investment if you plan to keep it to RE; if you decide it's an investment as rental property, it's an extremely poor one with negative cash flow! Your hair is on fire.

Most investors would kill to get a yearly 12.5% return. If you keep the house, it's not necessarily an investment, but as you stated your RE costs would be significantly lower, and with your love of the location and other non-monetary value in the house, absolutely you should pay it off as soon as possible.

Edited because I wasn't considering the benefit of reducing your AGI through the 401k contributions. However it looks like you're squarely in the 25% bracket.
« Last Edit: October 10, 2014, 11:22:08 AM by geek101 »

seattlecyclone

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Re: Reader Case Study: How to minimise time to FI
« Reply #23 on: October 10, 2014, 11:23:29 AM »
About the house, I understand you will likely want to move back to South Africa someday. That's a fine plan. Do you necessarily need to move back to that same house? I'm sure there will be other houses just as nice (or nicer!) that you could buy when you move back there. Instead of owing $120k at 12.5%, you could get $60k equity out of it and invest that money so that the house fund is actually earning you money instead of costing you.

I hear your concerns about your wife being resistant to making too many changes too quickly. You'll have to trust your own judgment on that. If you think she might be receptive to the idea that selling the house now means you can retire back to South Africa even faster and with a nicer home when you get there, it's another tool you can use.

ShortInSeattle

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Re: Reader Case Study: How to minimise time to FI
« Reply #24 on: October 10, 2014, 12:25:01 PM »
Hey neighbor.

There has been some great advice here so far. You asked how to minimize time to FI. Here is my general advice, but you'll need to scale it to match your goals and preferences, and that of your wife. Some of this you've covered.

Ways to Speed Up Reaching FI.

1. Maximize Income - The fastest path to FI would be if your wife worked too, or perhaps when the kid is in school.
2. Optimize/Reduce expenses - Covered by others already.
3. Keep Housing Costs Low - This is probably the biggest thing you could do, other than adding a second income.
4. Moderate or Minimize Kids & Pets - They can be a source of profound happiness, so it's a personal decision.
5. Never Finance Another Car - You know this.
6. Live Close To Work - Save *hours* of your day, car commuting isn't just expensive, it blows.

Those are the biggies, I think. DH and I have brought our FI date a lot closer by doing these things, but the biggie has certainly been housing. We bought a place that is right downtown and uber-tiny, about 60% of the cost we were paying before. It has a cascade effect: smaller place, lower cost, less utilities, less driving, etc.

I guess the question is, can you find a $1500/mo rental within walking/biking/bus distance of work?  Perhaps something on the light rail line, south of the city? That might be a good place to start.

It sounds like your wife is flexible and you're on a good path!

SIS

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #25 on: October 10, 2014, 01:49:55 PM »
Wow, thanks for the advice!

Will definitely play around with the numbers to see if face punching my debt instead of stashing in the 401k makes more sense in this case.

I will chat to my wife again about the house again. Hopefully she will give me a chance to lay out my story, and I will do the same for her. I will draw up some nice graphs and stats, and hopefully the dream of a nicer house will entice her.

1. Maximize Income - Yep, certainly an option.
2. Optimize/Reduce expenses - :-)
3. Keep Housing Costs Low - Agreed. Glad my wife is on board.
4. Moderate or Minimize Kids & Pets - The one kid is sufficient for us at this point. Need to look at contraception options.
5. Never Finance Another Car - "You know this." Oh, how I do. Never again.
6. Live Close To Work - Agreed.

So 6 is what I am most interested in at the moment. I'd prefer not to stay in south Seattle. I haven't explored it too wildly, so I am just familiar with the areas that I can see from the light rail. Some of the homes visible from the rail seem a little run down.

Queen Anne and Magnolia are both 'super' close to downtown but can be expensive. Would be nice to be able to cycle to work. I definitely don't like commuting far to get to work, it is just something that I have kind of accepted in order to get a nicer place at a fair price. But a daily commute of 90 minutes to 2 hours is certainly time that would be better spent with my family.

Any area advice would be MUCH appreciated. I will look at some places south of Seattle now to see what is available.
« Last Edit: October 10, 2014, 02:31:17 PM by Spiliph »

Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #26 on: October 11, 2014, 09:25:06 AM »
Thanks for the advice lhamo. I will take a look at South Seattle again. West Seattle is certainly an option, there are a couple of nice places there but it is rather similarly priced to Kirkland. I have until the end December to decide where we want to move, or if we are going to stay in Kirkland. The wife can work legally, we just wanted her to spend some time with my daughter as her previous job was night shift so they didn't any time together.

It would be nice to be within walking distance to parks. Family time is super important to us. :)

zoltani

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Re: Reader Case Study: How to minimise time to FI
« Reply #27 on: October 13, 2014, 10:58:19 AM »
Sounds like you are really trying to take some steps towards positive change! Good on you!

My favorite grocery in the ID is Lam's Seafood Market. Best produce out of the stores I have been too, not too much digging through half rotten stuff to find the good stuff.

Columbia City, Mt baker, Beacon Hill, are all nice areas on the south side. It is hard to not be within walking distance of a park in Seattle! IMO west seattle is just so far out there, less transportation options, and the bike route gets tiring/old quick.

Scandium

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Re: Reader Case Study: How to minimise time to FI
« Reply #28 on: October 13, 2014, 11:36:24 AM »
If your wife can't work officially due to visa status she might still be able to bring in side income -- even doing something like before/afterschool childcare for a few other kids can be a great way to learn on the side (as your child gets older you can aim for kids of similar age, and then it is virtually not work -- ages 3+ will pretty much keep themselves entertained for a couple of hours).

So work "unofficially" and risk being deported ASAP if caught or audited? I would not recommend this for a few extra bucks but whatever. If you don't have a visa that gives you and EAC you can't work/make money at all.  And if you're on an H1B you can only work for the employer listed on your visa. Anything outside this is illegal and will get you into serious trouble. Be really careful with income if you're on a visa. You probably have a company lawyer you can contact with questions.

I would also consider the issues of the 401k if you plan to move back to South Africa. How would it be taxed, both US and SA? Is it worth it? maybe there are ways around it, but it seems to reduce your flexibility some. Maybe someone here who's retired abroad can enlighten us?

I'm in your situation (US resident, not citizen) but haven't looked into it much as I currently don't expect to move back. When I have looked I have not found clear answers. This would be the primary question to answer if I were you. Will you move back? And if so how do you bring your stache with you?


Spiliph

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Re: Reader Case Study: How to minimise time to FI
« Reply #29 on: October 13, 2014, 12:24:18 PM »
Still looking for alternative areas, thanks for all the suggestions. Investigating all of them.

Thanks to everyone I think that I have come up with a plan to allow me to FIRE in about 12 years. Just going to take it slow as that is still a very long time, and set myself some milestones so that I can feel the progress every few years.

My wife qualifies for an EAD, so working is not a problem. Our move here in part was so that she and my daughter could reconnect and spend some time together. She will probably work when she gets bored from staying at home.

Thing is I have no idea if I want to move back or not. There is a lot wrong with my home country, but there are some good benefits too. Chances are good that we won't move back, I just want the option to do so. Even if it is just for holidays. We're too fresh in the States to be able to make a qualified choice, but we do LOVE it here so far. Really really great people.

The 401k is such a great tax relief that I would pump into it even if I did decide to eventually move back.