Poll

What is WestchesterFrugal's net worth?

< $500k
0 (0%)
$500k to $1mm
0 (0%)
$1mm to $2mm
0 (0%)
$2mm to $3mm
0 (0%)
> $3mm
0 (0%)

Total Members Voted: 0

Author Topic: Reader Case Study: Can We Have It All But Still Retire Early?  (Read 117375 times)

WestchesterFrugal

  • Guest
snip
« Last Edit: March 23, 2014, 09:12:49 AM by WestchesterFrugal »

chasesfish

  • Magnum Stache
  • ******
  • Posts: 3210
  • Age: 37
  • Location: Texas
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #1 on: March 11, 2014, 04:34:51 AM »
You have an interesting situation and honestly, not a lot of people on this board are going to be able to relate.  I'm in the finance field and thought I was well off, but I made the decision years ago to accept a lower income track for a lower lifestyle expectation (I don't get much pressure on joining the country club, people don't seem to care that I drive a Honda Truck, and I was able to transplant my job from a big city to a smaller market).

There are 100 potential decisions to make, but what initially drove the desire for the country club, private school, and $85k sedans?  Did you grow up around this, or was this something you always thought you wanted and now have it and realize it may not be the best use of money?  Are there career implications if you downgrade your car and drop your membership (club memberships are declining nationwide by the way)

Question #1:  Are you open to moving?  Can your incomes be translated to a high income southern city like Atlanta, Charlotte, Dallas, or Houston where you can hack your lifestyle costs pretty dramatically while keeping the same level job?

I think those questions are a good start.  The facepunch moment: Regarding the stability of your income, Lehman Brothers was also around for 100 years.

smalllife

  • Pencil Stache
  • ****
  • Posts: 983
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #2 on: March 11, 2014, 05:11:07 AM »
My question #1: why do you care about keeping up with the Joneses?  If you stopped doing just half of the things for show, would your jobs be at jeopardy?

Question #2: what the hell does an Ivy league education have to do with your spending?  Trust me, I know that crowd and none of them have taken it to the level you have.  Perhaps that is a location thing?

To be honest I'm having trouble wrapping my head around your numbers (you get double in a month what I get in a year) but I'll take another look later.

EK

  • Pencil Stache
  • ****
  • Posts: 733
  • Age: 32
  • Location: Fredericksburg, VA
    • Happily Enough
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #3 on: March 11, 2014, 05:43:27 AM »
I work on Long Island in a town probably very similar to where you live... I have seen this lifestyle and I can recognize how hard it would be to live in that kind of place without falling prey to that kind of all-consuming ultra-consumer lifestyle.   Another poster asked this- but would your work be transferable to a southern city where col is lower and the joneses are easier to keep up with (since you seem concerned about that kind of thing...)?

What concerns me is the comments you make about your kids- about wanting to at least give them what you had, provide them with things you didn't, etc.  It concerns me because... What is the endgame of all this that you see for them? That they will achieve even more than you and have even more money to give THEIR children even more things that even they didn't have with this ultra privileged upbringing? That they will consume even more expensive houses, cars, and clothes?  By giving your children this obscenely luxurious life as their baseline, it's going to be very difficult for them to adjust to life if they ever don't make such an incredible amount of money.  You appreciate your luxuries because you didn't have them growing up, but what is it going to take for your kids to feel successful?

You don't like to waste but you spend over $5000 a month on utilities and maintaing your yards? That really doesn't make sense.

I'm not sure what you're expecting to take away from this community, but I genuinely wish you luck in meeting your financial goals.  Maybe hanging out around here will tempt you to try to keep up with the super-frugal low-spending "joneses" we look up to here. ;)

quilter

  • Stubble
  • **
  • Posts: 149
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #4 on: March 11, 2014, 06:01:46 AM »
Your heading caught my eye. You "have it all".  So I guess the question is do you like your life?  Are you happy?  Your life sounds like the rat race many here have worked to get out of. But you may be very happy.   If so, carry on.  Figure out how much in assets you need to generate your monthly expenses and save that much. Then you can retire. Or change your lifestyle and retire much earlier.




justchristine

  • Bristles
  • ***
  • Posts: 389
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #5 on: March 11, 2014, 06:38:14 AM »
Ok, I can't quite wrap my head around that level of income/spending so let's try to approach this in the abstract.

Step 1:  Figure out the end game.  What do you want your future to look like?  Are you just looking for financial stability for an unknown future or do you want to retire early and pursue other ambitions? 

Step 2:  Start estimating what the above decided life will cost you a year.  You know how much your current life costs so start from there and adjust accordingly.

Step 3:  Now that you know where you are going and how much it costs to get there, adjust your current spending and saving to support your goal.

Step 4:  Enjoy your end goal.  Easy peasy, right?

The great thing about your situation is that you have both a high income and plenty of room to shave your spending (if you so desire) to achieve any reasonable goal that you want in a fair amount of time.  Right now it looks like you are saving about 26% of your income which is pretty respectable for the general population :)  It's really up to you how far you want to go on the Mustachian spectrum.  I personally shoot for saving 50% of my income and then don't worry about how I spend the rest.  Unless you want a drastically different life in the future or want to bail from work in a few years, you don't 'need' to make drastic spending cuts to boost savings your savings rate.  This is the where finances really get personal.  What are your long term goals and what are you willing to give up to achieve them...your call. 

thepokercab

  • Bristles
  • ***
  • Posts: 486
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #6 on: March 11, 2014, 06:40:33 AM »
Your heading caught my eye. You "have it all".  So I guess the question is do you like your life?  Are you happy?  Your life sounds like the rat race many here have worked to get out of. But you may be very happy.   If so, carry on.  Figure out how much in assets you need to generate your monthly expenses and save that much. Then you can retire. Or change your lifestyle and retire much earlier.

I don't have much to add, but I agree with this sentiment. Your lifestyle, for better or worse, is a result of a series of choice you guys are making.  So the question is are you happy with it?  Did you want to FIRE?  If you want to FIRE, you can start making choices about your lifestyle that can have you on that path in almost no time.  Move, sell your houses and downgrade, move to one car, send your kids to public school, (i might work those additional 4 years until you are fully vested, but honestly- you don't need to) then boom- you're basically FIRE. Congratulations. You might get the dreaded "looks" from your peers, but who cares...  well, you seem to care.  :)   

Thegoblinchief

  • Guest
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #7 on: March 11, 2014, 07:24:49 AM »
I stopped reading when I got to your income. 1 year of that would fund my entire retirement budget, with 3 kids, and probably enough to have 2 additional kids if we chose.

zhelud

  • Stubble
  • **
  • Posts: 229
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #8 on: March 11, 2014, 07:32:56 AM »


I think our problems lie in trying to ‘fit in’ with our peer group.  We both went to top tier universities and graduate schools, and the reality is none of our friends from school are into living drastically below ones means, or if they are they are embarrassed to show it.  It isn’t fashionable for an Ivy League grad on the fast track to talk about pinching pennies and how to stretch a dollar in a budget.  So we play along, sending our kids to private schools (the ‘best/most selective/established’ in the area) are members of a ‘selective’ country club that is hard to get into (took years to get 2 sponsors, 10 letters of recommendation, attend half a dozen cocktail parties with current members while being scrutinized, kissing up etc.), have an $85k luxury sedan (to drive to the club and other social events to fit in, of course) and take expensive vacations requiring lots of flying (sometimes international) every year.  We both come from semi-humble backgrounds, what I would characterize as middle-ish class, where education was highly valued and material possessions beyond basic needs were desired but a practical impossibility.



Grad of two Ivies here. There are plenty of us who are thrifty. You are hanging with the wrong crowd.

Indio

  • Bristles
  • ***
  • Posts: 337
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #9 on: March 11, 2014, 07:37:21 AM »
Your post is fascinating to me because I live in the next community right across the state border from you so I understand the affluenza implulses in this area. The proximity to Wall street and Greenwich hedge funds creates a false sense of the real world, even if you do meet interesting people. I've seen many million $ + homes go into foreclosure over the past 5 years and plenty of used Carrera's on craigslist so I've been striving for FI asap.
Everyone always talks about "keeping up with Joneses" but the difference in costs between our lifestyles is huge - public school, work from home in IT, 1 car (with a lot of walking and bike riding), low property taxes, joined the local beach (great island beaches too) when I bought a house here, volunteer with schools and international nonprofits, I have plenty of time to help kids with their homework, don't need to pay someone to cut the grass or trim the hedge because I like the exercise, very low carbon footprint and sustainable lifestyle.




arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28030
  • Age: -999
  • Location: Seattle, WA
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #10 on: March 11, 2014, 07:39:00 AM »
You choose what you want to buy into.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Bethersonton

  • Guest
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #11 on: March 11, 2014, 07:48:11 AM »

What concerns me is the comments you make about your kids- about wanting to at least give them what you had, provide them with things you didn't, etc.  It concerns me because... What is the endgame of all this that you see for them? That they will achieve even more than you and have even more money to give THEIR children even more things that even they didn't have with this ultra privileged upbringing? That they will consume even more expensive houses, cars, and clothes? By giving your children this obscenely luxurious life as their baseline, it's going to be very difficult for them to adjust to life if they ever don't make such an incredible amount of money.  You appreciate your luxuries because you didn't have them growing up, but what is it going to take for your kids to feel successful?

You don't like to waste but you spend over $5000 a month on utilities and maintaing your yards? That really doesn't make sense.


I completely agree with Evakatharina. You don't seem to have equated your *own* upbringing in insanely expensive private schools amongst uber-wealthy peers (I'm unfairly picturing Rich Kids of Instagram) and your now-focus on caring what other people think to what you are exposing your kids to. I hope that makes sense: basically you "blame" your own current focus on Jones-ing to your being amongst wealthy classmates for your schooling. Yet you were coming home to sacrifice and modest living by your parents to balance out the reality distortion field. So how do you think your kids will be now that they are being raised in the same scenario, but now without seeing their parents sacrificing financially? Something to think about, maybe.

Private schools, totally fine. Nothing wrong with that. But $1.2 million for your two kids' K-12 education? For that kind of money I would be expecting a brain transplant from Einstein's stem cells. I just cannot imagine an education ever being worth that much money.

I've read of many people who have left the NYC area/Northeast corridor pre-retirement for a cheaper life in one of those pesky flyover states (or the West coast) and found a better life (for them and their kids) while they were at it.

{Also, I'm such a dullard that I read your $71k salary and at first thought that was annual and was really, really confused for a minute. Hahaha!}

windawake

  • Bristles
  • ***
  • Posts: 435
  • Age: 31
  • Location: Minneapolis, MN
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #12 on: March 11, 2014, 08:03:35 AM »
I completely agree with the posters above about private school. What's going to be more beneficial to your kids in the long run, having a private school education and all the expectations and desires that come along with it, or being able to go on awesome trips with their retired parents all through high school and beyond? When you put your kids in private school, you're completely altering the way they see the world. They don't come into contact with people of different backgrounds and incomes. How can you expect them to have empathy for others who are different from them if they're never exposed to anyone who's different at all?

I'm 25 and my parents paid for my undergraduate degree. I went to a public university which was my choice since I didn't want to go into debt. In retrospect, I think it would have been very beneficial for me to have some skin in the game. I was a high performing college student, graduated early with honors etc., and I still had way too much time on my hands. I'm so grateful to my parents that I'm not in debt, but I think having to work through school would have given me a lot more experience and responsibility.

Here's what I'll leave you with: you could lead an entirely different life from your peers of which they will be envious. First, you have to figure out what that life would look like. And second, you have to become secure enough in that vision to make the adjustments to make it happen. Do you want to travel to a different country every summer with your kids? Do you want to go on a cross country bike tour with your family? There's so much outside the bubble of what you have that's accessible to you if you're really dedicated to living differently.

cynthia1848

  • Stubble
  • **
  • Posts: 156
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #13 on: March 11, 2014, 08:08:17 AM »
So what do you want to change?

- Do you want to move before retirement?  Do you want to quit your jobs or slow down your jobs to spend more time with your kids?
- Do you want your kids to grow up where you are, or would they be happier in a good public school somewhere else?
- Do you want to continue to belong to the country club and do all the "STUFF" that you are currently doing?

You seem to be of two minds - you refer to the lifestyle as a "disease" of consumerism, "shackles" and "deceptiveness" but have bought into it nevertheless.  You are also placing a lot of weight on sunk costs like the initiation fees and

If you don't want to move, then I think you may only be able to make incremental changes - like taking fewer vacations, shopping around for cheaper landscaping companies, etc.

If you would consider moving, then would you be moving for both jobs?  Any locations in particular?  Palo Alto?  Seattle?  Boston area?  Research triangle (NC)?  I live in the Boston area and we have lots of suburbs with VERY good schools (and a good peer group, similar to the private school peer group that you like), with much lower property taxes than Westchester.

dude

  • Handlebar Stache
  • *****
  • Posts: 2368
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #14 on: March 11, 2014, 08:10:53 AM »
Nothing constructive to add except to say that you are brave for posting up here with those numbers, and obviously have engaged introspectively about this.  You've got huge psychological obstacles to overcome if you truly want to make changes that will get you off the luxury-life treadmill, but then, it sure beats the opposite extreme, don't it?

edited to add:  Also, I have many friends like you who I went to law school with (several from Ivy undergrads; and we were at a top 10-ish law school) .  All are good people who just happen to make a lot of money and have the same desires you do re: giving their kids a leg up.  Indeed, one of them is probably your neighbor.
« Last Edit: March 11, 2014, 08:14:06 AM by dude »

JPinDC

  • Stubble
  • **
  • Posts: 169
  • Age: 32
  • Location: DMV
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #15 on: March 11, 2014, 08:18:49 AM »
You're going to have to reconcile whether this lifestyle is something you want or not. You can keep it, but your spending and liabilities are so high that you'd be in big trouble with a job loss or other crisis. People here can suggest a lot of changes, but if you're not willing to actually make them, it won't help. Would getting out of your area, as chasesfish suggests help you reset your life and start a lot smaller somewhere else? The biggest help would be to DOWNSIZE your home. Less money on maintenance, utilities, mortgage, and property taxes.

cynthia1848

  • Stubble
  • **
  • Posts: 156
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #16 on: March 11, 2014, 08:27:14 AM »
I'm not sure that by having a lot of stuff, your kids will realize that the stuff doesn't matter.  IME the more stuff we give our kids, the more they want - saying no often does help.

JP is correct: if you want to keep this lifestyle, you can only make changes around the edges.  BUT you can make changes by moving and getting different jobs.

I think the other problem is that your lifestyle comes with a package of high costs:

- job location is fixed
- real estate
- country club
- private school

Can you change any one part of that package without changing the whole thing?  Or is every part integral to the package?


thepokercab

  • Bristles
  • ***
  • Posts: 486
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #17 on: March 11, 2014, 08:40:47 AM »
Yes we know that bad decisions were made in the past, but if we can afford the ongoing upkeep and maintenance do we stick with the things that are irreversible (or at least hard to get out of)?  Are there MMM lifestyle changes we can make without having to go whole hog?

I guess my question is two fold:

1) What are the things that are "irreversible"?   

2) What is the end goal of any lifestyle changes that you would make?  What would you want the result of your changes to be? 

Before I found MMM i also thought a lot of my costs and expenses were irreversible and 'locked in' so to speak, but something that finally clicked with me is that most everything is a choice, and I was choosing to lock myself into certain things.  If you have an open mind, then you soon find that pretty much everything is on the table. 

If you goal however is to just increase your savings rate- i suppose the most obvious change you could make is to down size your homes(s).   You spend more in maintenance, utilities and live in help per year then most people on this board MAKE in a year*.  You could drastically increase your savings, by selling one house, and downsizing to something most cost efficient.  That move alone would probably secure your financial future. 

{edit:  year, not month}
« Last Edit: March 11, 2014, 08:42:41 AM by thepokercab »

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #18 on: March 11, 2014, 08:50:43 AM »
First, props on posting despite being very different from the average mustachian around here.

I think our problems lie in trying to ‘fit in’ with our peer group.  We both went to top tier universities and graduate schools, and the reality is none of our friends from school are into living drastically below ones means, or if they are they are embarrassed to show it.  It isn’t fashionable for an Ivy League grad on the fast track to talk about pinching pennies and how to stretch a dollar in a budget.  So we play along, sending our kids to private schools (the ‘best/most selective/established’ in the area) are members of a ‘selective’ country club that is hard to get into (took years to get 2 sponsors, 10 letters of recommendation, attend half a dozen cocktail parties with current members while being scrutinized, kissing up etc.), have an $85k luxury sedan (to drive to the club and other social events to fit in, of course) and take expensive vacations requiring lots of flying (sometimes international) every year.  We both come from semi-humble backgrounds, what I would characterize as middle-ish class, where education was highly valued and material possessions beyond basic needs were desired but a practical impossibility.

Grad of two Ivies here. There are plenty of us who are thrifty. You are hanging with the wrong crowd.

Yep.

My husband and I are both Dartmouth Ivy.  I went to a different Ivy law school.  He went to Harvard for his PhD.  (His brother did HBS, and many of our friends did other elite business schools so we know plenty of that crowd.)  We have lots of friends that don't feel this need to keep up.  Ask yourself this: If they are only friends with me because of the money/appearances - do I truly want them as friends?  Me, I want friends that will be there for me through thick and thin, or richer and poorer as they say.

What I find most astonishing is this:

Total Assets:             $7,280,000 (not including “stuff” like cars, jewelry, etc.)
Total Liabilities:          $4,468,000 (including private school tuition and college costs)

Income:
Total Income:   $77,000

Expenses:
Total Expenses:            $59,795

Savings:
Total Savings:            $19,975

bringing us to $442k net worth.

First I'm confused by the math, because shouldn't your net worth be $2.812m?  In the example above I think you subtracted a house value of $1.2, but that should still leave you $1.612.

Are those income figures monthly?  You make almost $1 million a year and have a net worth of $442k.  My husband and I are in our mid to late 30s, make less than you save annually ($200k now) and we have including house just over a million in assets.  Excluding the house, it's still well over $442k.

Is this the lesson you want to leave your kids regarding finances?

4alpacas

  • Handlebar Stache
  • *****
  • Posts: 1897
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #19 on: March 11, 2014, 08:56:05 AM »
Are there MMM lifestyle changes we can make without having to go whole hog?

Of course!  Concentrate on one area of your budget to cut.  For example, start with your grocery bill.  None of your friends will notice if you're not buying brand name peanut butter.  $1600 is a lot for 6 people.  My guess is that your bill is high due to waste and convenience food.  Kick the cardboard habit. 

When we decided to cut our grocery bill, we started to get our groceries delivered.  I know it sounds backwards, but our biggest issue was impulse purchases.  $3/delivery saves us about $50/week.  Look into bulk cooking, freezing stuff, etc.

I understand the difficulty of cutting back in front of peers and coworkers.  I try to make it less about money (which makes people uncomfortable) and more about other things (laziness, weight issues, environmental conscience, etc.).  When I was first hired, my boss told me that I needed a new car.  I just shrug it off and say something about not wanting to deal with the hassle of test driving new ones.  Now my car is no longer an issue.  When I bring lunch from home, I make a comment about watching my weight.  No one questions my lunch habits.

Good luck!  Small reductions will make a big difference. 


mollyjade

  • 5 O'Clock Shadow
  • *
  • Posts: 91
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #20 on: March 11, 2014, 09:06:40 AM »
Just another voice saying don't let your education make you feel locked into a certain lifestyle. I'm an Ivy grad, too, and most of my friends from school are working in some sort of service capacity (teaching, immigration assistance, nonprofits, public health). There's nothing wrong with your current choice, but it is a choice.

You could quit your jobs and find something else is an extremely low cost of living area if you wanted, while still giving your kids great educations and other benefits. That's easy. It's deciding what you want that will be hard.

MandyM

  • Pencil Stache
  • ****
  • Posts: 544
  • Location: Lexington, KY
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #21 on: March 11, 2014, 09:48:02 AM »
... but perhaps it does lop off some of the potential upside from meeting certain types of 'successful' and interesting people, be it from a networking (business) perspective or just standard human relations. 

While I don't disagree that you probably meet some very interesting people, I think KNOW you would meet a whole new group of "successful" and interesting people if you took up some low-cost or free hobbies to replace some of your expensive ones. 

I agree with all the other posters that you need to clarify what your goals are before you can decide what changes are needed. Truly, the world is your oyster. I think if you wanted to retire in a year or two, that would be entirely possible. But you enjoy your work, so maybe the 10 year plan is perfect. We can help point out ways to achieve your goal, but you have to define the target.

And I generally don't like to comment on how a person raises their children, but giving them every opportunity and then reminding them of how fortunate they are may not be the most powerful message. Do you (or have you considered) participating in any eye opening service/volunteer events? Something that puts them face to face with the poverty that they are spared from. I would even recommend swapping out a fancy vacation with one of service. I'm not sure how old your children are, but building houses in a developing country would probably make them feel more fortunate than any sort of lip service on the topic.

(As a side note I was brought up in an upper middle class family. Not anything close to the money that you have, but had pretty much anything I ever really wanted, traveled quite a bit, etc. Money was not discussed, simply provided. My college was payed for, including rent, food, etc with enough buffer that I had plenty to head to bar whenever I wanted. Somehow, I grew into a very frugal adult that will retire before turning 40. I'm not at all sure how this happened, as I got nearly zero lessons on money as a child. Long story short, I don't think your children are doomed, but the odds are against them. You/they need to be better than the statistics, which is kind of what MMM is about. )

Mister Fancypants

  • Bristles
  • ***
  • Posts: 296
  • Age: 42
  • Location: New York
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #22 on: March 11, 2014, 09:51:43 AM »
@WestchesterFrugal - I can relate to your post to some extent, I work on Wall Street too and live in a nearby community. I myself am not an Ivy Leaguerer but a great many of my friends are.

I bring my lunch to work because its healthier and at an average of $11 a day, 5 days a week 48 weeks a year that’s $2640, making my own lunch probably costs half that, I just don't care what my co-workers think, I usually make fun of them for going to Pret or Cosi or who knows where... We can all afford it, I tell them flat out I would rather keep the cash and we move on. Now when some quits/retires or it’s a birthday lunch of course we go out, that is no longer about being frugal or being healthy it is now about being social so the savings go out the window, but that is the oddity not every day.

We have live in help, I have 2 young kids and we love the extra set of hands, our Au Pair is awesome, I don't care what anyone here says she is family and we will keep in touch with her forever.

I believe in public school personally I think it builds character, we live in a great school district and pay the taxes to boot, you make enough to send your kids to private school that’s you choice, but understand the impact of the expense, and ask yourself what it buys you... If your kids are smart enough they will make the Ivy Leagues anyway, private school is just a rich person’s way to buy their way in especially for legacies and that is what it is. So ask yourself if you are doing it for them or yourself, I'm not judging just asking you to look at your reasoning, I know lots of friend who have changed their minds on how they feel about this…

Country Clubs, well this too is your choice, if you enjoy it stay a member, me I don't golf, I'm more of a skydiver personally, well not since I have kids. I have plenty of friends and don't feel the need to be a member for social interactions, if you like the experience and think it is worth the money keep it up, if not no one will judge you for reallocating the fees to other hobbies you enjoy more.

The rental house, real estate is what it is around here, if it is not causing you stress then keep trying to unload as the market moves.

I have a landscaper, plow service, pool maintainence etc... Time is more valuable to me etc...

My wife loves to shop, however she is more interested in getting deals than anything she will buy her Kooba bags but only at Marshals or TJ's when they are half price and then she wants to sell them on eBay for a profit, Louis only when she gets an employee discount from someone she knows. My wife will negotiate sales tax with NYS. Craigslist has remarkable deals, we never pay full price for anything.

So here is the only part of your post that really concerns me, I didn't really run your numbers and confirm the math or anything, however it is clear you make substantially more than I do by a multiple of over 5, I am a software engineer you are clearly closer to the money some form of trader or banker is my guess.  Here’s the thing our net worth’s are about the same give or take a few hundred thousand, but our assets and liabilities are off by millions and so are our expenses. We are also in our late 30’s

I hang out with the same people as you do, maybe literally even some of the same people (not likely though) I've been around Wall Street for the last 10 years or so at many of the major IBanks.

There are lots of things in your life you can change if you want to, the question is do you want to? If so then you have the means to do whatever you want. Personally I'm not so Mustacian as much as I am fiscally responsible and save more than I spend. We just live way below our means. I like a lot of what MMM has to say and agree with a lot of his ideals, but in the end I am far too much of a consumer and capitalist to ever be considered Mustachain.

Feel free to private message me if you want to talk in more depth offline about anything. And by the way, your original post took a lot of nerve on this forum; most people here have no idea how to even think along the lines of the numbers you are talking.

Good luck,
-Mister FancyPants

EK

  • Pencil Stache
  • ****
  • Posts: 733
  • Age: 32
  • Location: Fredericksburg, VA
    • Happily Enough
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #23 on: March 11, 2014, 10:14:04 AM »

With respect to private schools/material possessions and kids, having a proper grounding can and should be independent of what school one goes to and what one has growing up.  I think the fact that our kids already have a lot of 'stuff' that we didn't grow up with will help them to see that those things alone don't bring happiness and more likely than not prevent them from making acquiring things (including status) their overarching goal in life - the greediest people with the most insatiable appetites I know were born into poor, not rich, families.  We are constantly reminding them of how fortunate they are, and they actually do have the chance to interact with those very different from them in various activities and environments.  Our hope is that because they have enrichment and opportunities we didn't have (including a lot of the international travel mentioned) they will be more knowledgeable, well-rounded and interesting adults because of it, and be able to ultimately give back more to society and find fulfillment (and contentment) in life.

Based on my professional background (I am a nanny for people who are like you, except x100) and experience with LOTS of these kids (kids growing up with everything-fancy travel, expensive schools, all the coolest toys, clothes, and gadgets, etc)... I really question the idea that it is even possible to teach kids how privileged they are when extreme privilege is the only normal they have ever truly lived and experienced for themselves.  We tend to be blind to our own privileges you know- white privilege, male privilege, etc. Those who benefit from it tend to have a hard time understand what it's like not to have it. Maybe it's possible, but I suspect incredibly few actually manage it. Children can't help but take things for granted. You have seen the MMM articles referencing hedonic adaptation, no? I see kids who are hedonically (is that a word?) ill-adapted to the extreme and will really struggle to ever not desire the material comforts they have grown up with.  And it breaks my heart to think of these children growing up without ever really knowing and experiencing that happiness is truly possible without living in a fancy house or driving $$$ cars or having lots of material things or luxury vacations, etc.  That is the big thing that so many of these children are NOT being given. It seems so crippling- "enabled to be disabled" is my personal phrase I use when I think about it. When you have it all, you expect it all, and then expect to achieve even more beyond that. 

I can't get your case study out of my head.  I grew up, like you, going to private schools and envying my peers who had all the outward trappings of wealth and success.  I discovered later that my parents could have afforded for us to keep up with the joneses in those visible ways, but instead they made different choices with their money- what an eye-opening discovery that was.  That discovery made it possible for me to approach my own life differently than I otherwise might have (I can very easily see myself in an alternate world winding up very much like you), and I'm deeply, deeply grateful to my parents for it. To know that they could have afforded to "have it all" and yet chose to live a modest (but very happy) life.  Just to see that as an option that someone might really WANT to choose over flashier and more socially reinforced ones.

Now I work as a nanny for a family like yours- fancy NYC suburbanites- except times 100.  Every other week I experience the endgame of that lifestyle-the ultimate life of luxury and privilege-and it's really just not that great.  I've gone back and forth with myself countless times wondering if I tell myself that I'm happier than they are just to placate myself into not feeling jealous, or if I am actually happier having so much less material success, and I've come to the conclusion that it's the latter. For all their wealth and privilege and opportunity (opportunities to do good that are rarely seized)... It really makes them no happier than other people and it actually prevents them from being able to be happy in any situation other than the comfort bubble of wealth and privilege they've built for themselves.

If you're serious about trying to change a lifestyle that you've put so much into (emotionally
 as well as in pure sunk cost), it's not going to be an easy road. I can see from the perspective of my employers how hard it would be to just walk away from that life. Unbelievably hard for many reasons. You say you are happy, yet you are reading MMM and posting here- seems like you're wondering what a different kind of life might be like. Without a real commitment to changing your lifestyle, you may be nibbling at the edges, but you can still make progress.  And maybe one thing will lead to another, and then maybe things that seem impossible now might start to feel more possible.

Anyways, I feel for you and I really wish you the best. You are brave to be here. I hope you take this post in the spirit I intend it- a spirit of kindness and sympathy.  The world is your oyster, you just have to identify what it is you want.

(Edited for typos)
« Last Edit: March 11, 2014, 10:39:14 AM by Evakatharina »

sparklebunny

  • 5 O'Clock Shadow
  • *
  • Posts: 26
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #24 on: March 11, 2014, 10:18:20 AM »
The other posters gave your great thinking points, but I want to address something different.  I'm an elder law attorney and it makes me pause when I see someone paying for care without discussing the fact that they also investigated government benefits. If you're paying for your parent's care, then my assumption would be that this parent has limited assets and/or income. You should consider talking with an elder law attorney and looking into NY's home care benefits to help with her care.  There is also a benefit from the VA if your parent or their spouse served at least 90 days in the military.  If they served for that short amount of time or more, there is a pension available that is over $2,000 per month for a married couple.  It's called Aid and Attendance and is a great benefit that helps my clients stay at home and get the care they need.

So bottom line for parental care is that you should talk with an elder law attorney (not any other kind of atty) and see what options are available to help mitigate that cost, if not now then in the future.

AccidentalMiser

  • Pencil Stache
  • ****
  • Posts: 659
  • Age: 51
  • Location: SE Tenn
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #25 on: March 11, 2014, 10:31:59 AM »
I've started this reply a dozen times but I just don't know where to begin.

I can't imagine your life.  It sounds hollow.  As a poster above said, you seem to be of two minds.  Hopefully, the one that senses that something is very wrong will win out.

Good luck!

bacchi

  • Magnum Stache
  • ******
  • Posts: 3950
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #26 on: March 11, 2014, 10:44:46 AM »
#1 on regrets of the dying:

Quote
1. I wish I'd had the courage to live a life true to myself, not the life others expected of me.

http://www.theguardian.com/lifeandstyle/2012/feb/01/top-five-regrets-of-the-dying


Also, it appears that you're thinking about sunk costs incorrectly. Sunk costs aren't supposed to affect your decisions because they're, well, sunk. See "loss aversion" or the "sunk cost fallacy."

http://en.wikipedia.org/wiki/Sunk_costs#Loss_aversion_and_the_sunk_cost_fallacy

hownowbrowncow

  • 5 O'Clock Shadow
  • *
  • Posts: 92
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #27 on: March 11, 2014, 10:57:30 AM »
This is a sincere question - why do you send your kids to a private school?  Rye, NY has some of the best public schools there are.  I can't imagine your kids would be at an disadvantage attending them (knowing a few graduates myself).  I'm not saying it's a bad thing that they're going to a private school.  I'm honestly curious.

wild wendella

  • 5 O'Clock Shadow
  • *
  • Posts: 82
  • Location: Stamford, CT
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #28 on: March 11, 2014, 10:58:25 AM »
Interesting post.  I live in Western CT and I work in the finance industry, so I do understand your position.  I'm in IT and don't make your salary, but I do understand.  I'm also new to the MMM blog, so I'm not very bad-ass myself yet.

If I were in your shoes, I would start by cutting the private schools (until college), cut the country club, and plan cheaper vacations next year by camping or staying with friends/family.  Don't fly anywhere for a couple of years.  Then I would slowly find other ways to cut excess spending.  (Do your kids need external tutoring?  Can't one of you help them learn?)  You could amass so much more wealth than you have now.  Why not consume less and amass more?  Your landscaping and maintenance costs seem really excessive - is this really worth it to you??

I disagree with the private school claim, but that's probably just because I went to public elementary and high school.  I feel public schools offer far more diversity, and that diversity is the best catalyst for learning - I'm not talking about the learning from school teaching, but from experience and observation.  Private schools are a bubble containing 100% over-privileged kids.  Frankly, I would be concerned about drug and alcohol use at a private school.  I would actually be more apt to home school than to send my kid to private primary school.  But that's just my choice. Your choice is of course your own.

I'm sure your kids can get into an ivy league university without attending a private high school. I recall that a few kids from my high school managed this, and we were from a small town in Oklahoma.  So it must be attainable for any public high school kids in America.

I won't argue about your grocery bill, because I buy all organic, free-range and grass-fed as well.

Props for posting.

windawake

  • Bristles
  • ***
  • Posts: 435
  • Age: 31
  • Location: Minneapolis, MN
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #29 on: March 11, 2014, 11:14:34 AM »
I'm kind of wondering what you're looking to get out of this thread. There's so much money leaking out of your budget that has to do with 'lifestyle costs.' It's hard to make any meaningful progress if you're not up for making meaningful changes.

If you move out of your community to a smaller home without the pressure to maintain a certain image, at the least you can cut out landscaping (get a manageable sized yard and do it yourself), your fancy car (replace with something 1/4 the cost), and country club membership. That will save you $3,770/month not counting the car. Maybe you could move to an area with pretty good public schools and get rid of the school tuition. Because, honestly, how much of them going to private school is for their benefit and how much is for the image? Maybe then your kids will start some after school sports or groups, cutting your 'kid activities' in half or more. It's all a process. Making some changes will facilitate other changes. I'm just wondering what you're really hoping to do. It's clear you can cut back in so many areas, but from your responses it doesn't seem like you're willing to.

zarfus

  • Stubble
  • **
  • Posts: 101
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #30 on: March 11, 2014, 11:24:32 AM »
Maybe I'm missing something, but why don't you sell your other house? It has 0 net income...right?  If not only to simplify things!

A lot of your expenses relate to your image, as others have pointed out.  Does it really matter in the end?  Are your friends going to care?  If they do care, does that say anything about your friendships?  I'm not sure, just wondering.  I live in one of the nicer areas of my city, and my neighbor literally gave me a lawnmower when they saw me using a push reel.  They probably think we're poorer than shit (for some reason), and I could care less.

Honestly, one of my biggest worries about your lifestyle would be your kids.  You say you both came from humble-ish backgrounds...what would your kids say about you and how they grew up when they're adults?  What kind of lifestyle expectations are they going to have?  In the book "millionaire next door" (which you should read, I think there will be a lot of eye openers as to why a lot of us on the forum can't even begin to relate to your situation), one of the biggest concerns high-spending millionaires have is that they're kids are going to be dependent on them forever--ESPECIALLY if they don't end up with high-earning careers like you and your husband have.  Just some food for thought.

Allen

  • Stubble
  • **
  • Posts: 246
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #31 on: March 11, 2014, 11:28:13 AM »
I couldn't figure out your budget.  You said you had high incomes, but then only listed $71k and $49k in expenses.  I was very confused until I realized you were talking PER MONTH!!!

$49k PER MONTH!!!!!!!

Just below the US median salary in spending, PER MONTH.  That is insanity, in my poor/humble opinion.  You could comfortably support 12 entire families on your yearly income, think about that.  If you spent a still extravagant $50k a year, you could be free from everything in like 4 years. 

If I had your problem I would choose freedom over hyper consumption, but then, I have never experienced this kind of hyper consumption; I'm sure it is hard to give up.

You seem to really care what other people think.  That is the issue I would work on that will unlock your happiness.

4alpacas

  • Handlebar Stache
  • *****
  • Posts: 1897
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #32 on: March 11, 2014, 11:47:39 AM »
I often find a bit of extremism from this blog, which can be great if one needs to jump start a change in lifestyle that is on an unsustainable path due to the nature of actions that were not well thought out prior.  I own up to a fair number of my own past mistakes, but in reality I don't think my situation is really that unsustainable or uncommon in my corner of the world.  I am looking to make changes to work towards becoming better, and as Voltaire famously stated "Le mieux est l'ennemi du bien."  (google translate for those who don't speak french)

I don't particularly think I make a lot of money (compared to my peers, both at work and play) and my spending, while high, is still well within our means.  So while I shared my situation in hopes of getting ahead of any potential problems that might occur from unexpected events I feel comfortable that there are enough 'margins of safe' built in to get us through 99% of circumstances and potential outcomes.

I didn't go into long drawn out detail about our own values and what we instill in our kids, but I think many reading this would be surprised if I did.  That is for a separate post, which I might go into at another time, but probably would need to go into a different section than "Ask A Mustachian".

You are living below your income, so you don't have to change your lifestyle if you're happy with it.  However, you did mention that you were open to change.  What type of changes are you looking to make?

If you're interested in flipping your thought process, try reading Status Anxiety (Alain De Botton) and The Overspent American (by Juliet Schor).  While I didn't agree with everything the authors wrote, the books did help me reevaluate my spending and priorities. 

Also, you're very brave to post a case study.  I don't think I could handle the face punches I would receive. 

ShortInSeattle

  • Pencil Stache
  • ****
  • Posts: 576
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #33 on: March 11, 2014, 11:59:30 AM »
I totally understand the comments and criticisms about choosing the crowd you hang with and the lifestyle you sign up for, but the main point we are trying to convey and the question we are trying to ask is what about someone who has already invested a huge amount of time and money building up a certain lifestyle (sunk costs) but then starts to see the light, analogous to religious conversion - do you just walk away from it all?  The rich young ruler couldn't when Jesus asked him to give all he had to the poor and come follow Him, when asked what was needed in order to have eternal life.

Yes we know that bad decisions were made in the past, but if we can afford the ongoing upkeep and maintenance do we stick with the things that are irreversible (or at least hard to get out of)?  Are there MMM lifestyle changes we can make without having to go whole hog?

That's really the crux of the matter, isn't it?  You've had an aha moment, now you either make some temporarily painful changes or you go back to the way things have always been.

Sure, consumption is a sliding scale. It's not like you're a jerk if you don't keep your expenses under 30k/yr. But I think you know the truth here - that packing a bag lunch here and there isn't going to counterbalance a vacation home, the country club, private school, and live in help. At some point you are just playing at being frugal.

You're on as much of an earn-and-consume treadmill as any factory worker, it's just that your treadmill is awfully cushy and you're already rich by ordinary standards.

Think and decide what matters most to you. Time? Money? Luxury? Being seen as successful? Freedom? Security?  Once you know the path will emerge.

Good luck.

MayDay

  • Magnum Stache
  • ******
  • Posts: 4019
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #34 on: March 11, 2014, 12:00:44 PM »
I didn't read all the comments.  Here is my general opinion:

I think you should examine the belief that you have to do all this nonsense for your kids.  Is this really the best for them?  Obviously since I am asking the question, I think no.  I think you are maybe teaching them that keeping up with the Joneses is valuable.  That is not what I want to teach my kids.

Sure a super elite private school is super elite.  But what does that give your kids- lots of super elite friends who they are now supposed to try to keep up with?  Don't do that to your kids.  They don't need an fancy school, rich friends, and a fancy country club to be happy and successful in life.  In fact I would say odds are they will be more happy without it.

I also think you should examine your environmental footprint.  From what you have posted (OMG utility bills) I am guessing it is quite high.  Owning a Leaf doesn;t impress me relative to all the other waste in your lifestyle. 

Baron235

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #35 on: March 11, 2014, 12:07:14 PM »
To answer the question in the subject, yes you can have it all and retire early.

The real issue that you seem to have is you don't know what "having it all" means.  Do what makes you happy not what the Jones do.  If the country club makes you happy and you like working longer to achieve it, then its fine.  If you would rather work longer than take more time off with your kids in the summer, then keep working.

A main point of the MMM lifestyle is that people often equate spending to happiness.  This is a huge mistake.  All you need to do is stop paying for the things that don't make you happy. Once you figure out what you want to spend money on, see how long you need to work.   And honestly if I had your income, I would be done in a year and spend as much time as I could with my kids while they were young.  You can never get that time back.   


Also, I do think you are looking at sunk costs wrong. They are sunk costs, so you shouldn't even mention them anymore.  They have no factor in what you should going forward.  By stating the high sunk costs, it shows you still are adding that into the equation when you shouldn't because that money is already gone. 


Anyways.  I think you just have to find out what makes you and your family happy and that execute that plan.  From your posts, it seems like you don't know  what makes you happy so you copy of the lifestyle of the rich.    Make your own lifestyle your goal. 

Baron235

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #36 on: March 11, 2014, 12:12:13 PM »
Maybe I'm missing something, but why don't you sell your other house? It has 0 net income...right?  If not only to simplify things!

A lot of your expenses relate to your image, as others have pointed out.  Does it really matter in the end?  Are your friends going to care?  If they do care, does that say anything about your friendships?  I'm not sure, just wondering.  I live in one of the nicer areas of my city, and my neighbor literally gave me a lawnmower when they saw me using a push reel.  They probably think we're poorer than shit (for some reason), and I could care less.

Honestly, one of my biggest worries about your lifestyle would be your kids.  You say you both came from humble-ish backgrounds...what would your kids say about you and how they grew up when they're adults?  What kind of lifestyle expectations are they going to have?  In the book "millionaire next door" (which you should read, I think there will be a lot of eye openers as to why a lot of us on the forum can't even begin to relate to your situation), one of the biggest concerns high-spending millionaires have is that they're kids are going to be dependent on them forever--ESPECIALLY if they don't end up with high-earning careers like you and your husband have.  Just some food for thought.

Thanks for the comment zarfus

As mentioned in the case study, we actually did try to sell our house, but the demand just wasn't there for our property in a weakening environment at that time.  We will list it again next year when the current lease ends.

I have read the "Millionaire Next Door".  Great book.  The funny thing is, our kids actually don't think we make that much money (their friends are much wealthier with 'nicer stuff') - and are intimately aware of what the 'richer' parents do for a living and kind of want to emulate them.  I don't think they are going to be dependent on us, and even if they weren't in a position to make oodles of cash we wouldn't indulge them - we owe them opportunities pre-18yo and education (maybe even some college), and not much else.

I don't know if it is a good thing for your kids to not think you make a lot of money.  In other words,  they think affording private school isn't very expensive or your lifestyle is normal.  I try to let my kids know, that I do make a lot of money and we are very lucky to have the many things we do have.  And I make way less than you. 


Carrie

  • Pencil Stache
  • ****
  • Posts: 603
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #37 on: March 11, 2014, 12:13:58 PM »
It might be fun for you to take a year sabbatical, move to a LCOL area, maybe in a middle class suburb, and experiment with what it would be like to live on less than $50k per year.  Imagine what lessons it could teach your entire family. 

You could use your monthly travel allowance for your ONE vacation for the year.  You could use your monthly mortgage payment to pay a mortgage for an entire year. 

It would probably be immensely entertaining and educational for your children to experience middle class America, and see what fun could be had at local public parks, free entertainment opportunities (movies in the park, free local concerts, etc).   

You could see that interesting people abound who don't make 1m+ per year and who didn't attend Ivies.

I count myself quite lucky to live in a place where a good state college education is valued & respected.  While my particular suburb can sometimes be snooty, no one really cares what country club you belong to (if any at all), or where your kids go to summer camp.

EK

  • Pencil Stache
  • ****
  • Posts: 733
  • Age: 32
  • Location: Fredericksburg, VA
    • Happily Enough
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #38 on: March 11, 2014, 12:22:16 PM »

Thanks for the comment zarfus

As mentioned in the case study, we actually did try to sell our house, but the demand just wasn't there for our property in a weakening environment at that time.  We will list it again next year when the current lease ends.

I have read the "Millionaire Next Door".  Great book.  The funny thing is, our kids actually don't think we make that much money (their friends are much wealthier with 'nicer stuff') - and are intimately aware of what the 'richer' parents do for a living and kind of want to emulate them.  I don't think they are going to be dependent on us, and even if they weren't in a position to make oodles of cash we wouldn't indulge them - we owe them opportunities pre-18yo and education (maybe even some college), and not much else.

That is shocking.  Your children think that spending as much in one month as most people make in a year is not rich? That it's not much money? That is crazy. And proof that no matter how much someone has, they can get used to it and still want more.

What are you looking for?  The things to  change to save money are obvious. You make enough money to retire any time you want- it's up to you how long you want to work to live whatever lifestyle you decide to live. You are free to live as wasteful (driving a leaf and recycling doesn't make that level of consumption somehow not wasteful.  It certainly is wasteful and environmentally unsustainable.) and extravagant a lifestyle as you want, but you're not going to get many pats on the back from people around here for doing it, so I'm baffled as to why you're here.  You don't seem particularly inclined to make any changes... So why post this?

Mister Fancypants

  • Bristles
  • ***
  • Posts: 296
  • Age: 42
  • Location: New York
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #39 on: March 11, 2014, 12:28:54 PM »
It might be fun for you to take a year sabbatical, move to a LCOL area, maybe in a middle class suburb, and experiment with what it would be like to live on less than $50k per year.  Imagine what lessons it could teach your entire family. 

You could use your monthly travel allowance for your ONE vacation for the year.  You could use your monthly mortgage payment to pay a mortgage for an entire year. 

It would probably be immensely entertaining and educational for your children to experience middle class America, and see what fun could be had at local public parks, free entertainment opportunities (movies in the park, free local concerts, etc).   

You could see that interesting people abound who don't make 1m+ per year and who didn't attend Ivies.

I count myself quite lucky to live in a place where a good state college education is valued & respected.  While my particular suburb can sometimes be snooty, no one really cares what country club you belong to (if any at all), or where your kids go to summer camp.

@Carrie you should Richistan- A Journey through American Wealth

http://www.amazon.com/Richistan-Journey-Through-American-Wealth/dp/0307341453

No way near as good as The Millionaire Next Door, but a very different look at America's wealth, there is part where the child of an extremely wealthy family for his birthday wants to fly commercial as he has only flown private up until that point. A very similar scenario to the one you described.

Anyway the book is worth reading, not Mustachian at all...
-Mister FancyPants

payitoff

  • Guest
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #40 on: March 11, 2014, 12:30:40 PM »
im having panic attacks reading your numbers :)  very brave post , i know its not easy and im proud of you, just by posting here, shows that you want change, and its the mustachian way right? :)

we kinda went through with what you guys are in right now, but definitely not in millions, but i know how it feels when you are 'already in it' its so hard to get out, when i was in the real estate business, i was making $30,000/month easy, but money flows in so quick i dont even realize where the $100 is going. i felt like i was holding a bunch of balloons really tight afraid to let go., but one day, i just let all the balloons fly. it's the most freeing feeling ever. real estate crashed and i dont have the same income to support our lifestyle that we had to file for bankruptcy. dont wait till you get this far.  its such a humbling experience and you know what, at the end of the day, its you, your wife, your kids smiles matter most, and those dont come with a fee. 

dig deeper and find your happy.  its not too late.

Mister Fancypants

  • Bristles
  • ***
  • Posts: 296
  • Age: 42
  • Location: New York
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #41 on: March 11, 2014, 12:56:59 PM »
@WestchesterFrugal - What are you expecting to gain from your posting?

You clearly know more about high finance than most if not everyone who is going to respond to you, you have tax adjusted your deferred compensation, and future liabilities for education, your investments are managed by professionals that next to know on this forum has access to let alone even knows exist. You have assets that most people here would never even dream of accruing, your income per month is more than most people make here in a year.

What people look for here is how to manage their debt, cut their spending, and get motivated to change their lifestyles. You don't need help managing your debt, you know how to arbitrage it better than anyone, you know where to cut spending if you choose to and you don’t really need to as it is less than your earnings, from all of your responses to peoples comments you don’t seem to want to. As for your lifestyle you seem quite content with it.

So what are you looking for?

With your income you can shift your high spending for a few years to fully fund accounts to cover your expenses minus taxes which are just due to the high earnings and mortgages. Then unload the expensive house move to cheaper location and then spend like you do know of the fully funded accounts and you are retired, no mortgage, no taxes. But you know this too, 3 years of being truly frugal, banking $1m salaries and you are home free, move to Arizona.

You also know enough about the markets to take enough of you assets to easily trade speculatively, I am also sure you have enough Ivy League wealthy buddies in Hedge Funds that rock the market no problem., so you can just do this now, you don’t even need to be frugal for 3 years, that was just for a nice cushion.

So by no means are you Frugal even by Westchester standards, and there are tons of people on Wall Street making lots more and less then you who have no problem dealing with the retirement early situation...

So once again what do you expect to get out of the MMM Forums?

-Mister FancyPants

Cromacster

  • Handlebar Stache
  • *****
  • Posts: 1696
  • Location: Minnesnowta
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #42 on: March 11, 2014, 01:01:51 PM »
I was interested in this thread when it started.  You are an interesting case, much different than we usually see here on the forum.  And it probably wasn't easy to come out to this group with your situation.  With your income and position you could put your family in a great position of strength.

http://www.mrmoneymustache.com/2013/11/11/get-rich-with-the-position-of-strength/

If you wanted to retire and spend the next however long dedicating your lives to your kids and charitable endeavors, you could set yourselves up to do that....realistically probably in 3 years time (extreme end) or easily by 10 years, which is what your current plan is.  But with your current spending levels, even with you caveats you have presented, I currently have a hard time seeing how your expenses are going to decrease dramatically.

You can rationalize everything to the cows come home.  From what you said so far, you don't seem truly interested in changing.  Bringing your lunch? Driving Nissan Leaf? $900 on LED lightbulbs?  What first comes to mind is penny wise, pound foolish, but I don't even think that applies.  I think this sums it up best....

At some point you are just playing at being frugal.

@WestchesterFrugal - What are you expecting to gain from your posting?

Answering this question is the key I think.

« Last Edit: March 11, 2014, 01:08:06 PM by Cromacster »

EK

  • Pencil Stache
  • ****
  • Posts: 733
  • Age: 32
  • Location: Fredericksburg, VA
    • Happily Enough
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #43 on: March 11, 2014, 01:04:43 PM »


The kids don't pay the bills - we actually don't 'spend' that much in things that they would see in terms of physical consumption and material possessions.

They do see people coming and going to take care of the property - but as far as they know it is a function of comparative advantage; they see spending on a live-in who they adore and who shuttles them around and helps them each day when mom/dad are not at home as well as helps their grandparent; they see us cooking at home and spending quality time together as a family in evenings and weekends (oftentimes with the the TIME SAVED by outsourcing some services); and they see us going to the club we belong to to meet friends and take part in outdoor activities that they enjoy.

What I didn't mention is that they also know where the $30k/year we give goes to and what the priorities and concerns are for those organizations.

Okay... So if you're fine with all of this... Remind me again why you're here?

Carrie

  • Pencil Stache
  • ****
  • Posts: 603
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #44 on: March 11, 2014, 01:06:28 PM »
I'm not sure if I read it right, but did you say your current networth is $442k???
if so.
I'm going to do something I've never done before, as I don't consider myself a senior enough mustachian.
FACEPUNCH.

Our yearly income is what you earn in one month.  I'm 37.
Our networth is $530k.

You could so totally own this bitch, yet your consumption is holding you back from amassing great wealth in a very short period of time.  I'd quite frankly be ashamed to be spending at your levels, even if I could afford to.  But then again, I've never thought twice about what other people think of me/my lifestyle/my spending/where or if I vacation/where my kids go to school/what I drive.


kt

  • Guest
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #45 on: March 11, 2014, 01:11:45 PM »
I didn't read all the comments.  Here is my general opinion:

I think you should examine the belief that you have to do all this nonsense for your kids.  Is this really the best for them?  Obviously since I am asking the question, I think no.  I think you are maybe teaching them that keeping up with the Joneses is valuable.  That is not what I want to teach my kids.

Sure a super elite private school is super elite.  But what does that give your kids- lots of super elite friends who they are now supposed to try to keep up with?  Don't do that to your kids.  They don't need an fancy school, rich friends, and a fancy country club to be happy and successful in life.  In fact I would say odds are they will be more happy without it.

I also think you should examine your environmental footprint.  From what you have posted (OMG utility bills) I am guessing it is quite high.  Owning a Leaf doesn;t impress me relative to all the other waste in your lifestyle.

Thanks for the reply MayDay

The utilities are actually roughly $300 for electricity, $250 for Nat Gas heat and $150 for water each month.  There is room for improvement (and those numbers should come down going forward as they are the last 12m before LED bulbs and reduced water use heads and a new toilet which was leaking was replaced)

all this about recycling / Leaf / low LED bulbs etc sounds great and can make a notable difference if you are keeping your outgoings low but with what you're spending these are hardly a drop in the ocean.
if you want to save money and retire, your lifestyle will have to change. not for the worse or even necessarily for the better but it will.
i'd start by trying to find cheap/free activities to do with the kids where you might meet other people with lower outgoings. find some jones that are easier to keep up with and introducing other changes may become easier.
are you afraid you'll lose your ivy league friends if you don't spend all that money on cars / clubs / schools?

Exflyboy

  • Walrus Stache
  • *******
  • Posts: 6414
  • Age: 58
  • Location: Corvallis, Oregon
  • Expat Brit living in the New World..:)
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #46 on: March 11, 2014, 01:17:43 PM »
I think almost everybody here is shaking their head in disbelief at this case.

In fact you have so much income that I am surpised you even took the time to find out what you spend your money on.  So let me start by being somewhat offensive and then maybe I can get to be being more constructive, after all just about every body here really wants to help folk make smart choices so eventually they can become FI.

First off here is where I think you are.. You have no idea what living in the real world is about... Period!

Secondly... congratulations.. you are rich beyond belief now go do whatever you want... it doesn't matter!

BUT... One day.. it could all come crashing down around your ears like it has for so many over privilaged folks who suddenly realise that they are completely dependent on their incomes.

What if one or both of your incomes dissappeared tomorrow?... it could happen.

How will your hampton neighbours view you as you try to load your TONS of stuff by yourselves into a self rented U-haul?

If your serious (I'm still not convinced your not having fun at the "little people" expense by posting here).. Do what others have posted.. Have fun thumbing your noses at you idiot neighbours while you all ride past on your bikes.. tell the Country club what they can do with their membership.

Then work one more year and quit and take up fly fishing in Montana.

You can make some simple changes and be wealthy for the rest of your lives.. or you can keep rolling the dice that these fabulous incomes will keep rolling in and neither of you will heave a heart attack from the stress of doing what your doing.

Exflyboy

  • Walrus Stache
  • *******
  • Posts: 6414
  • Age: 58
  • Location: Corvallis, Oregon
  • Expat Brit living in the New World..:)
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #47 on: March 11, 2014, 01:34:30 PM »


I'm sorry but you speak a different language to pretty much everybody here.

I just hope you can keep all those plates spinning. Odds are you'll be just fine... but I'm sure there are a few folk here who hope it does all come crashing down you so get a dose of reality.

Personally I'd be delighted if you figured out that 90% of your life is complete money fueled BS and that you sold everything and then did something useful like start a foundation that gave malaria shots to everyone in the third world and helped remove one of the worlds biggest killers of young children.


Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #48 on: March 11, 2014, 01:35:51 PM »
To get back to the original question, the answer is no, if you define "having it all" as continuing to live your current lifestyle on your current incomes.  It's simple math: you have a net worth of $442K, right?  Invest that, and at a 4% SWR you will have a bit under $18K per year, which is not enough to maintain your lifestyle.

Or from the other direction, you probably need an annual income in the neighborhood of $300K to maintain your lifestyle, which means you need $7.5 million in investments to produce it.  So if you just save another $7 million and change, you can retire :-)

I could go into great detail about why I think this is the case - the standard answers are pretty obvious: smaller class sizes, tailored curriculum, high matriculation rates to desired schools, abundance of extra curricular opportunities (what are the chances your kid will play varsity anything in a high school with 3000 students?).

This really deserves a little thought.  First, what are the chances your kids will even WANT to play varsity anything?  Second, if they do want to, are you really doing them a favor by having them do it in an environment in which their competition is selected from a small pool?  Or will you just be making them big frogs in a small pond: giving them a highly-inflated idea of their own abilities, and setting them up for eventual severe disillusionment when they need to compete in the larger world?

Baron235

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #49 on: March 11, 2014, 01:36:25 PM »
. . . .

The reality is we have funds in excess of what we need to subsist (like anyone who earns more than they spend), so the allocation of excess resources should reflect the priorities we have.  We value education above and beyond everything else, and would gladly trade all of our material possessions and status symbols (incl club membership) to get the absolute best education possible for our children.

When we initially thought about making the decision between public and private, we asked ourselves two questions:
1) is private education really superior to public?
2) can we afford it and would we have better use of the proceeds if we didn't spend it?

We did more exhaustive research on this topic than probably anything else outside of studying in college, and came to the conclusion that for our situation and what we want for our family that private was superior to public.  I could go into great detail about why I think this is the case - the standard answers are pretty obvious: smaller class sizes, tailored curriculum, high matriculation rates to desired schools, abundance of extra curricular opportunities (what are the chances your kid will play varsity anything in a high school with 3000 students?).  Other aspects were not as clear, but very important as well: what will be the effect of much tighter state and local budgets on education?  How easy is it to gain entry to the most selective private schools if you start your child in public and it doesn't work out?  What is the real value of rubbing elbows with the kids of other parents with similar values, educational backgrounds and socioeconomic status?  Not to mention the benefit of having access to opportunities and people simply based on the fact of where one went to school. To us everything pointed to an easy decision, and we could hardly think of any drawbacks.

. . .


The flaw I find in this analysis is you assume those opportunities are what is best for your kids, but you yourself question your own lifestyle and why you do things and yet you set your kids to end up in exactly the same spot.  Once again,  I think you are caught up with what the Joneses see as the best (ivy league, Finance Job in NY) versus what is really the best for your happiness.   

Look if you weren't questioning your own lifestyle on here, I could see why you would want that lifestyle for the kids because that is what you chose. But you are on here trying to make changes because you don't like something.  That makes your analysis seem like you once again are just keeping up with your rich neighbors doing what they think is "best."   
« Last Edit: March 11, 2014, 01:38:14 PM by Baron235 »