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 118439 times)

CommonCents

  • Handlebar Stache
  • *****
  • Posts: 2386
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #200 on: March 14, 2014, 10:03:54 AM »
I am not sure what type of work you do, but our jobs are pretty serious business and if I am on a conference call with executives (which granted does not happen more than a couple times a month) my reputation is at stake if there are kids running around, people chatting in the background, bad connection, etc.  This is the ultimate in what I would refer to as penny-wise, pound foolish - in our industry your reputation is actually more important than your actual results. 

This comment screams to me that a) your identity is primarily defined by your employment b) you take great pride in your work and c) you wouldn't have it any other way (i.e. you love your job.).  That's terrific, actually, most people would kill to love what they do but they don't.

Just wanted to say that I wouldn't recommend RE unless you are very certain you have other ways to engage and occupy your time that will make you feel engaged and important.  Otherwise I think there's a very good chance you'll be unhappy without work.  Don't do that to yourself, you'd be better off working as long as you are able.

In other words, I don't think you should make any changes at all to your life.  You're happy and you have it pretty good, according to your perceived needs. 

Cheers.

Not just that, he's planning on FIREing in a decade when his youngest hits college. That means his youngest is at least 7. You're telling me you can't keep a 7 year old from making a lot of disruptive background noise for the duration of a conference call? That points to larger problems than spending.

This is reasonable to me.  Someone once told me you can mentally determine relative levels of risk by calculating: probability of something happening (1-5), against how catastrophic it would be if it did happen (1-5) against [ETA: exposure (1-4) to get it on a scale of 100.

Clearly he thinks it'd be catastrophic (5) if it did happen.

(This calibrates your internal risk.  For the record, the person telling me this was a CG Captain, who generally only placed "people dying" in the number 5 category.  He also said never accept an unacceptable or unnecessary risk.  This would likely qualify as that.)
« Last Edit: March 14, 2014, 10:36:44 AM by CommonCents »

Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #201 on: March 14, 2014, 10:05:17 AM »
The advice you are giving is terrible from a real estate investing perspective: big (much more than needed) house, nicest on the block, in a (relative to surrounding) undesireable area with high carrying costs and horrible reputation for schools, which will be very difficult to sell eventually - who do you think would buy a huge 7br home with the worst schools in the general vicinity?

Maybe I should have mentioned that residential real estate provides almost 30% of my household income (which is in the top 2% nationwide). Or do I have to buy a $4000 purse and the "right" shoes before you'll listen to anything I say?

Since you bought a new $2 million house despite not being able to sell your other $2 million house, and have since been renting out the original $2 million house for no profit while shelling out thousands of bucks to have someone mow your tenants' lawn--not to mention, you don't even seem to realize that it's much easier to sell a $1 million home in a nice or great area than a $2 million home in a fabulous area, simply because there are far more potential buyers and most of them are less snobbish than you and your business acquaintances--I am not sure on what basis you feel like a more competent real estate investor than me or the other real estate investors here.

Here's how we got to this point in the conversation: You claimed that reducing your housing expenses was not in the cards so long as you stayed in the Northeast because according to you, in your area, there was probably no such thing as an adequately large house[/i] (i.e., as defined by you, at least 5BR and 4000-ish square feet--your current house has 3k above ground and 1k below) for much less than your current $2 million house--certainly not for anything close to just $1 million.

So I provided you with links to several such houses that are for sale in your area right now, at prices from $965k to $1.4m. And hey, my apologies if one of them had two more bedrooms than your stated minimum--I guess I erroneously thought you might be able to use them as, for instance, a home office, a guest room, a gym, a library (do you guys read?), etc. Having more space than you need is a problem only to the extent that it costs more;[/i] the 7BR house is half the price of yours and has solar panels to keep utility costs down, so I thought as a finance person you should be able to perceive that the problem normally posed by excess space did not exist in that particular case.

But instead of interpreting these listings as EXAMPLES proving that you were quite possibly incorrect[/i] in assuming that you couldn't get 5BR for significantly less than what you're paying now--that is, instead of thinking, "Hmm, maybe I *could* get the large house I need for much less money--perhaps I should keep an eye on local real estate listings"--you deployed your vast real estate wisdom to sniffily dismiss a couple of those houses as being in "secondary" areas with "the worst" schools in town. That, to you, apparently proves that your assumption was correct and thus no further discussion need be had about reducing your housing expenses.[/i] If you were looking for information instead of looking for ways to justify decisions you've already made, you would not have responded that way.

By the way, even setting aside the fact that school districts for $1m+ homes in your area are quasi-irrelevant because most people at these income levels send their kids to private school, "worst" means little or nothing in this context. You might as well dismiss as "the worst" the person who came in last in figure skating at the Sochi Olympics; that person is still one of the best figure skaters in the world.

Oh, and FYI, my two fastest-renting and most lucrative rentals (in terms of what they bring in vs. what they cost) are in not even secondary--heck, not even tertiary areas in my city. Because guess what? People who rent (or in your case buy) at lower prices have lower expectations in terms of snob appeal.[/i] I'm telling you this because you seem to have completely forgotten how people with less money than you think and what criteria they base their major financial decisions on. Every time I put these places on the market they rent immediately--the last changeover had 12 days between tenant A moving out and tenant B moving in, and the one before that had 0 days. And that's not because I have low standards for tenants; apart from the rich Asian grad students I sometimes rent to, who have no US credit and thus no credit scores, I've never rented to someone with a credit score below 700.

But all you seem interested in doing here is rationalizing decisions you have already made.[/i] You have decided that there is no point reducing your housing expenses; you dismiss all evidence to the contrary. You have decided that continuing to buy expensive crap can be rationalized as a business decision, based on your sad assumption that people won't like you as much if you don't buy the same crap as them[/i], and thus will choose not to do business with you. Then you dismiss evidence to the contrary, even when it comes from other rich people or from a self-described New England blueblood who travels in much richer circles than yours.

It is interesting you are able to make such blanket assumptions when you have no idea how much my current house is worth or what the size of the yard is

You told us on this thread that it was a $2 million house and that one of the listings I linked to, which had 1.9 acres, had more acreage than you. If that's not true then I am indeed talking based on false information, but that's because of what you posted, not because of any assumptions I made.

In the world I work in, people want to do business with people they like, and 90% of people like others who are like themselves.
So you could say that assimilation is a business decision to some degree.

Notice how your business associates--I'm not going to call them friends, since by your description that's not what they are--don't retire early? You cannot BOTH keep designing your life to match other people's lives AND retire early, unless the people whose lives you're aping themselves retire early.

And given your sniffy dismissal of million-buck homes with insufficient snob appeal (and that is your complaint, much as you try to dress it up as an investment decision: you can't accurately judge the investment value of a $1m home based on the expectations of people who buy $2m homes)...anyway, given that, I doubt that you will be able to bear living in a "secondary" area (or belonging to a secondary country club, etc.) when you retire, because you have conditioned yourself to experience that as a loss of status, and status (a.k.a. the opinions of people who aren't even your friends) is something you value way too highly. That means you will feel obligated to spend massive amounts of money in retirement, just as you are spending massive amounts of money now.

So again, because you define "having it all" as keeping up with the Joneses (aka buying whatever expensive crap you have to buy to ensure that superficial people you're not even friends with continue to think you're worthwhile), the answer is NO: You cannot "have it all" and retire early. To retire early, you'll need to change your definition of "having it all."

Iron Mike Sharpe

  • Bristles
  • ***
  • Posts: 397
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #202 on: March 14, 2014, 11:09:28 AM »
We have a winner!

minimalist

  • Stubble
  • **
  • Posts: 140
  • Age: 34
  • Location: Washington, DC
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #203 on: March 14, 2014, 11:20:14 AM »
This is probably the future of children raised in the OP's circle: http://www.georgetownheckler.com/collar.html

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #204 on: March 14, 2014, 11:26:22 AM »
Whew! After spending a couple hours reading through all the responses, this is still the part that stuck out to me the most:

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?

Because the nitty-gritty of how you spend your money isn't really the issue, is it? At the end of the day, we all spend what money we have in accordance with our values. Show me a man's checkbook and his calendar and I'll show you the man, right?  What it sounds like to me, and I could be totally wrong, is that after reading MMM and the comments and community, what you value is shifting a bit. Not that you want to chuck it all and move to a tiny house commune in Colorado, but more the inkling that all the full-price trappings might not be passing your cost-benefit analysis anymore. But, without peers who understand both your level of wealth and your desire to be more "mustachian", it's hard to know which trappings are worth keeping, which can be had more frugally, and which can be dispensed with altogether.

You clearly have a thick skin to have stuck it out in this thread for so long. I don't think it will be as hard as you imagine to turn that thick skin toward your peer group. You can't just fire all the help and move to the bronx overnight. But if you can turn some of your inner strength toward caring less about what others think, then your spending will naturally change as your values change. So, right now you take expensive vacations and drive a luxury car to the country club. Could you instead plan a long (several weeks) vacation and take the kids in an RV to see some of the natural wonders in our country? Using mustachian principles you should be able to get several weeks of enjoyment out of the same money you would previously have spent on one week overseas. That could still feel like a splurge because of the time you're taking (as opposed to the money you're spending). And if you're taking a long vacation, could you put your country club membership on hold? And maybe if you do that a few years in a row, then maybe you "forget" to re-start the membership one year? And then if you aren't a member of the country club anymore, will anyone care of you ditch the luxury car? I obviously don't live up at your level, so I don't know the specifics of what is doable and not, but it seems like there must be a way to baby-step your life into something designed more around your values and less around pleasing peers.

I will also say this in terms of status: We caught a lot of flack from peers about our frugal ways...at first. Much like your colleagues who don't understand why you bring your own lunch, no one understood why we didn't buy a bigger TV, a nicer car, and why we lived with roommates. It was a joke for a while...until they started to realize where all our money was going. I think it was when we bought our second rental house (which, for my socio-economic class and age, is totally unheard of) that the jeers turned into curiosity. We started getting requests for financial advice on a wide variety of subjects. It took a few years of thick skin, but we no longer get made fun of for being frugal. We're now well regarded as the financially savvy ones, and the people who once had a laugh at our expense now privately ask us to review their spending and give counsel.

tl;dr - If you can figure out how to care less about opinions of others, spending will fall in line with values on it's own. Also, please document how you accomplish this, because I think many people want to know how to escape peer pressure.

MrCash

  • Stubble
  • **
  • Posts: 238
    • OurCashHouse
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #205 on: March 14, 2014, 11:50:19 AM »
Things are getting a bit heated here, but I think we need to remember the forum rules:

That includes, but is not limited to:
1. Don't be a jerk.
2. Attack an argument, not a person.
3. Your posts must not break any laws.
4. Be respectful of the site and other members.
5. No spam.

If he is looking for advice and help, we shouldn't attack him.  We need to make sure anyone feels welcome here.

skibikeclimb

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #206 on: March 14, 2014, 11:51:10 AM »
Wow. What a thread! Thanks for posting this. It was interesting and entirely convinced me to never, ever post my financial details on the MMM forums. :) I'm with you in the sense of having "made it" and starting to look around and wonder what's next… what is meaningful spending versus mindless spending? How do we raise children in relative wealth, with the goal of giving them opportunities without raising entitled little shits? What does retirement mean? I don't have answers, but I'm thinking a lot about the questions lately.

I would like to hear updates down the road, if you feel like providing them. I'd also like to hear more about what your vision for retirement is.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #207 on: March 14, 2014, 11:58:27 AM »
1. Not everyone has the cognitive ability, temperament or inclination to excel in the very narrow set of fields the OP finds acceptable for his kids. Intelligence has a strong genetic component, and many, many parents are unwilling to acknowledge that their kids may not be bright enough to be Ivy League material.

Or indeed, that they may be too bright to be Ivy League material.  (Not to inject politics, but remember that GW Bush was an Ivy League graduate :-))  This is a world where absolute intelligence is not a prerequisite for success.  Quantum physics it ain't :-)

Though I think it's perfectly true about temperament & inclination.  As I think I said earlier, I just can't see the attraction of the OP's lifestyle.


 
« Last Edit: March 14, 2014, 12:03:23 PM by Jamesqf »

Chuck

  • Bristles
  • ***
  • Posts: 404
  • Age: 31
  • Location: Northern VA
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #208 on: March 14, 2014, 12:11:57 PM »
See below for tips!

Expenses:
Property Maintenance: $2,300 (for both properties combined: snowplowing, budget for anticipated repairs over time, etc.)
Landscaping: $2,000 (both properties, grass cutting, hedges, spring/fall cleanup, 6.4 acres total)
$800 You might incur some upfront costs, but you replace everything with low maintenance native plants that are drought resistant!  Still might need seasonal touch up
Live-In Help: $1,800 (this is salary in addition to room/board)
Country Club: $1,770 (includes all meals, drinks, fees, summer camp)
Groceries/Household Items: $1,640 (this is for 4 adults and 2 children)
Vacations: $1,250 (flights and some hotels are paid via miles/points from credit cards and flights/stays for work travel)
$833 Only two vacations a year!
Utilities: $1,120 (primary residence only: cable/internet/phone/wireless, electricity, natural gas heat, water – quite high due to sprinklers in summer to maintain that nice lush lawn we pay so much for)
$550 You cut the cable, you rip out the lawn and replace it with an drought resistant plants! No more watering! Also, check out IP Daley’s Superguide for cell and internet use!
Kids’ Activities: $685 (all lessons, fees, activities, tutoring)
$200 They go to private school no more tutors needed!
Shopping: $500 (gifts, personal items, miscellaneous – plug account)
$250 Halved! just because your trying to cut back!
Auto Insurance/Maintenance: $480 (3 cars, all 2007 model or newer: 2 for commuting – the above mentioned Leaf and showoff machine, 1 small SUV for the grandparent/nanny to take kids to schools and activities)
Public Transportation: $330 (train tickets, subways)
Gasoline: $230
60$ Guffaw! You take the train, stop driving!
Restaurants/Eating Out: $200
You don’t eat out anymore, you go to the country club!
Entertainment: $80 (Netflix, iTunes, Movies, etc)
$8 Netflix Streaming only, OTA, and the Library
Total Expenses: $59,795 $56,451.33
You are excellent. I am laughing my ass off right now!

Seriously. You funny. Kudos.

DoubleDown

  • Handlebar Stache
  • *****
  • Posts: 1991
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #209 on: March 14, 2014, 12:17:52 PM »
@WestchesterFrugal, have you seen these two stories? They may be a little trite, but they convey a different perspective on values some of us are trying to convey (taken from Jim Collins' blog):

"The Monk and the Minister"

Two close boyhood friends grow up and go their separate ways.  One becomes a humble monk, the other a rich and powerful minister to the king. Years later they meet.  As they catch up, the minister (in his fine robes) takes pity on the thin, shabby monk.  Seeking to help, he says: “You know, if you could learn to cater to the king you wouldn’t have to live on rice and beans.” To which the monk replies: “If you could learn to live on rice and beans you wouldn’t have to cater to the king.”

"The Fisherman"

An American tourist was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The tourist complimented the Mexican on the quality of his fish and asked how long it took to catch them. The Mexican replied, “Only a little while.”

The tourist then asked, “Why didn’t you stay out longer and catch more fish?” The Mexican said, “With this I have more than enough to support my family’s needs.”

The tourist then asked, “But what do you do with the rest of your time?” The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life.”

The tourist scoffed, ” I can help you. You should spend more time fishing; and with the proceeds, buy a bigger boat: With the proceeds from the bigger boat you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor; eventually opening your own cannery. You would control the product, processing and distribution. You could leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York where you could run your ever-expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?” The tourist replied, “15 to 20 years.”

“But what then?” asked the Mexican. The tourist laughed and said, “That’s the best part. When the time is right you would sell your company stock to the public and become very rich, you would make millions.”

“Millions?…Then what?” The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

WageSlave

  • Stubble
  • **
  • Posts: 178
  • Location: Chicago, IL, USA
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #210 on: March 14, 2014, 02:13:25 PM »
We don' t typically work more than 50-60 hours a week (including commuting time) and spend plenty of time with the kids.

How much of that time is for the commute?  I work in the megabuck world of finance in Chicago, and 60 hour weeks are the norm, excluding commute time.  And based solely on hearsay, the hours are even longer in NYC.

In our industry your reputation is actually more important than your actual results.

How do you establish the reputation in the first place?

If you have enough money to afford to be wasteful are you still ok with it because you are still living within your means (even if those means are unlike 99.5% of the global population)? ... What do you guys think the mustachian ideal should be for people at this income level?

Of course we're all free to interpret as we wish.  If you look at it strictly from an early retirement perspective, then I guess you're free to do whatever you want as long as you can save enough to retire early.  The site's slogan is "financial freedom through badassity", and I think you could argue that making megabucks is badass.

But, personally, I think focusing strictly on the savings/FIRE aspect is incomplete.  There are multiple ways to be "badass" aside from making big bucks; big earnings is the obvious way to FIRE.  But MMM's focus on badassity is about being creative and clever, and applying a optimization/problem-solving approach to life and happiness.  And a huge nod to self-reliance, learning and a DIY ethic.

Not to mention, MMM obviously has a strong desire to continually decrease his environmental footprint.  As I said before, I think the "theme" of this blog is to continually increase happiness while decreasing consumption.  MMM himself has said explicitly that he could magically receive a boatload of money and it wouldn't make him any happier or change his life in any way.

Once your basic needs are met (generally pretty easy in rich countries like the USA), I think happiness is largely a choice.  You can choose to be happy without "having it all".  MMM chooses to enjoy and derive happiness from riding his bike, rather than looking at it as an act of deprivation.  I think it can be as simple as a matter of attitude, "Ride my bike to the grocery store?  Awesome, another opportunity to improve my health, avoid pollution, save money, and enjoy the weather" versus, "Waah, it's too cold, I'm tired, and biking takes too long."

how much you can water down Natural Ice before it loses it's refreshing crisp taste

I would work my entire life to avoid drinking Natural Ice!  :)
« Last Edit: March 14, 2014, 02:15:14 PM by WageSlave »

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #211 on: March 14, 2014, 02:20:38 PM »
Just musing, but I've never understood why GWB was considered dumb.

'Cause he ACTS dumb?  Any lengthy reply would get us way off track into politics.  I'll grant that he may possibly have been smart, but devious/amoral enough to play up to the essential stupidity/ignorance/bigotry of the least common denominator.  Still, I find it hard to think that an actual intelligent person, once elected (and especially in a second term) would have done so many abysmally stupid things.  Which - just to maintain neutrality here - is why I'm not convinced that Obama is anywhere near as intelligent as his fan club makes him out to be.

But back on track.  If you look at rankings of science programs, most of the top spots are not filled by Ivy League schools.  Harvard & Princeton, maybe Stanford (but are they really Ivy League?).  The rest are places like MIT, Cal Tech, UC Berkeley, UIUC, &c.

Cassie

  • Walrus Stache
  • *******
  • Posts: 5789
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #212 on: March 14, 2014, 02:22:01 PM »
You are so right that MMM values leaving less of a footprint on this earth. I think it would be wonderful if more people felt this way.

GetSmart

  • Stubble
  • **
  • Posts: 101
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #213 on: March 14, 2014, 02:42:48 PM »
OK – I’ll kick the hornet’s nest a bit.  This has certainly been an interesting, entertaining and thought provoking thread.  It’s fascinating how much emotion is tied up with money.  Money is a tool – a means to an end – once that is understood and the emotional and ego attachments are eliminated we might all be better humans and try to leave the planet better than we found it.

To the OP -- I wouldn’t change anything.  You already seem disinclined to change any of the big things and I agree that most of it doesn’t make a lot of sense financially, but possibly more so emotionally.  Some people are very attached to their houses – so be it – I get it that it would be more stable for the kids to stay in the same house growing up – to them a house is memories they don’t care a fig about the costs.  (I’ve never understood the American habit of ‘trading up’ houses to keep pace with increases in income – but it seems that you are not doing that considering that your income will continue to rise and the house will remain the same – although perhaps valued more and taxed more depending on the natural rise and fall of those things).  The same goes for school and friend continuity; possibly it even holds true for the country club – providing stability, friends, safe place to socialize in the summer and memories.  And you can afford it – you aren’t going into debt to subsidize this part of your life.  Also as you said there will be a 150k increase in income this year and it’s easier to just make more than to cut back.  You also seem to enjoy the status markers – that goes against the values of most of the people on this forum, but again, it’s up to you to decide what you are willing to live with and pay for – that is a choice and you claim to be happy – be careful about equating ‘arriving’ with perceived happiness.

As for the rest – as someone said previously – nibbling around the edges to reduce your expenses by a few percent seems silly in the scheme of things – especially as the money itself does not seem to be the issue assuming it continues to materialize.  You seem confident that you have stable jobs and investments – nothing anyone has said so far seems to persuade you otherwise.  The problem with living in a bubble is that you don’t see it while you’re in it – only in hindsight – (been there, done that) so you might want to have more of a cushion.

You seem to like your jobs, they satisfy the ego, you’re well compensated and you enjoy the life you have.  It takes a very strong person to buck the status quo and it doesn’t appear that is what you want to do anyway.  What is confusing is why you would want to retire in 10 years?  It’s unlikely that the enormous down-sizing of house and lifestyle would happen – 10 more years of entrenchment is not so easily let go, but not impossible.  And what will you do with the 50-60 hours per week that is currently filled with work?

Perhaps a challenge is in order:  when all is said and done what do you want your legacy to be?  If you were to write your own eulogy what would you say or what would you want people to know about you?  Once that is established all the perceived problems will go away and everything else will fall into place aligning with the legacy (values) that you have chosen.  Currently you seem to be on the fence about what those values might be – figuring out those should probably be your first priority.

Just one more thing – I went to a public high school with a large graduating class in the mid-west.  Of the people in my crowd there are quite a few doctors and nurses, dentists, lawyers, engineers, architects, CPA’s, entrepreneurs and corporate managers.  I can’t think of one that went to an ivy league school, nor did any of us rub elbows at a country club – and yet we’re all successful and have a bunch of letters after our names.  This was before you were born, so pre-tech days and pre-Wall Street / Madison Avenue glamour days.  So please be careful about the narrow path that you seem to be laying out for your children.  Hopefully you’ll have the flexibility to accept whatever path they choose to take – lest you all be disappointed.

cochranjd

  • 5 O'Clock Shadow
  • *
  • Posts: 20
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #214 on: March 14, 2014, 05:41:35 PM »
This thread is very suspect for numerous reasons (the "I don't particularly think I make a lot of money" quote and the idea that children watching their parents drive $80K cars, have a live in nanny, travel internationally regularly, attend prestigious private schools and enjoy exclusive country club memberships won't warp their sense of "normal" because you've told them how lucky they are being chief among them).

You're obviously doing very well, but if everything you've mentioned as being truly necessary is truly necessary, you're probably going to have to work a while.  It's not that you can't mathematically get there, in my opinion, as much as the fact that you seem very caught up in justifying all of the expenses you make to keep up with those around you and I don't see that being something you can just "turn off" when the money stops coming in.

It's seems like you are more interested in approval, pats on the back or validation than anything related to changing your current lifestyle -- again, assuming this post is on the level.  You mention it being a "case study" for others, but it is basically somebody making a very unique salary and defending every expense on a monthly budget that rivals some folks annual budget.  It's like doing a case study on how to play basketball by watching Lebron James - it just doesn't apply to almost anyone else and the few that can relate are unlikely to be able to pick much up from watching it.

Weedy Acres

  • Bristles
  • ***
  • Posts: 280
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #215 on: March 14, 2014, 06:17:25 PM »
This has been an interesting thread, and it's too bad that some people have resorted to personal attacks.  The OP is genuinely wrestling with decisions about her spending, and it would behoove us all, regardless of whether we can relate to the precise circumstances, to show a little mustachian love and support.

That said, here's what I predict:  you will trim around the edges, as you've outlined.  As you do, you'll find it really doesn't affect your happiness all that much, and you'll find a few more things to trim.  As you get raises, you'll put them all into savings, so that your savings percentage increases.  You'll avoid taking on any "new" financial commitments, like vacation homes or new cars or expensive hobbies or more household help (because it is easier to not add than to subtract).

As you resist the urge to add new stuff as others around you do, you'll realize you don't lose anything by not keeping up with that particular Jones.  You'll continue to spend on things you value, but you'll be a lot more comfortable explaining why you don't spend on other stuff to your peer group (should they actually ask).  And you might actually drop or reduce some of the things that you feel today are sacred cows.

And a few years down the road you'll find that your financial situation looks markedly different, and BETTER, and you'll feel more peace because your nest egg is significantly bigger relative to your expenses than it is now. 

$_gone_amok

  • Stubble
  • **
  • Posts: 149
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #216 on: March 14, 2014, 06:31:04 PM »
You can have it all and retire early but the key is to know is important and trim what isn't necessary.

1. Will private school provide the best return on investment for your children's education?
2. Will the car that you drive and house you live in provide the best investment? If you buy a $2M house, would it appreciate faster than a $1M house? Cars are deprecating assets so it doesn't count unless you are collecting classics.

To quote Jim Carrey:
"I hope everybody could get rich and famous and will have everything they ever dreamed of, so they will know that its not the answer"

I think you've reached the point where you know it isn't the answer so you are on the right track.  =)

Simple Abundant Living

  • Pencil Stache
  • ****
  • Posts: 580
    • Simple Abundant Living
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #217 on: March 14, 2014, 06:59:40 PM »
I think this post hit a chord with people here because the ideal of MMM is freedom (from soul-draining work, debt, lifestyle, fashion, etc) and responsibility (to your own financial security, the environment, higher ideals, and your core values).

I personally don't feel like the OP has freedom, rather he is a slave to the obligations and expectations of his peer group.  I get the feeling that he puts value in the environment(owns a leaf and a LED collection), charitable work and donations (board of something and donations of 3% of his total salary). That shows some seed of responsibility.  But much is left to do.  And earning a high salary puts you under the microscope because of how much bigger your impact is for good or bad. 

I hope you will spend more time here. I think you may find it liberating to find a community who celebrates frugality, non-consumerism and green living.
Mrs. Green'stache - philosophically we are all slaves to something, even if it is our own desires to escape the shackles of conventional society by placing 'freedom' and 'early retirement' above everything else - so I don't think that is necessarily correct

I do agree with you though that "much is left to do", and progress is being made. 

One thing to also remember is, high salaries do indeed get scrutinized more (and they should) but they are also disproportionately responsible for paying for many of the privileges that early retirees have to enjoy their 'freedom' and 'lack of responsibility'.  By far our biggest expense is taxes.  So I think maybe that should be also included in your assessment of how responsible we are in our footprint on society.

By slavery, I mean that you are just as tethered to your desk as someone who makes far less than you, but has overspent their way into debt.  You just have different masters. Many people could take what you've accumulated right now an live a great life for the next 70 years. You can't.

I also feel that you missed the point of ER, for a lot of us. Its not about "freedom" and "lack of responsibility" as i believe you see it. (Probably involving a yacht?) or "sticking it to the man" (living in a van?).

I am about to embark on a completely different degree/career that I feel called to do.  For me, financial freedom allows me to work- doing something that makes the world a better place. That kind of freedom is exciting and intellectually stimulating. To be able to answer a call to your higher purpose because money doesn't stand in your way.  Someone who makes the kind of money you do could really do some good.   If you wanted to.

iris lily

  • Magnum Stache
  • ******
  • Posts: 3363
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #218 on: March 14, 2014, 07:31:03 PM »


As I said, there's a reason I am glad I left that world. It's an incredibly draining way to live. Actually, out and out old money is much more mellow and pleasant. (I'm old New England WASP without the money, so I've run in those circles my whole life.) They tend to be in preservation, not accumulation mode, so the lifestyles are a lot more chill. They also don't let their kids have their trust funds until they're 30 or so, which means the kids have to do something to make money in the mean time. Lots of artists, actually. They're also comfortable with being quirky, because when you're crashingly wealthy and established, being odd is charmingly eccentric, rather than creepy.

I'm going to tell you something, I feel a real kinship with New Englanders of old money. It's because they are not striving, as are we.

Midwesterners (like DH and myself, Midwestern to the core) do not give a flip about status markers. We value some of the same things that monied or formerly monied WASPS value: old stuff of quality, conservation, country pursuits such as dogs & gardens and historic houses. If I didn't live in the Midwest I'd move to New England.

I've known a couple of old monied people over the years and they are so gracious as well as being in sync with my practical nature, I love them.

I cannot relate to the OP who is striving striving striving for peer acceptance by participating in conspicuous consumption. His dismissal of that real estate as being in a second rate place is just--god. Thank you for not plopping me into that cultural mileau.

100 years ago DH and I would have been living on the estate or aristocrats, taking care of their stuff. We would have been gardeners and housekeepers and etc. I guess we would always have sided with the Aristocracy and eschewed the nouveau riche.


EscapeVelocity2020

  • Handlebar Stache
  • *****
  • Posts: 2405
  • Age: 46
  • Location: Houston
    • EscapeVelocity2020
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #219 on: March 14, 2014, 09:10:48 PM »
Well OP, hopefully you have had some food for thought.  You have provided me with some interesting insight and perspective.  The only 'problem' I think you have is if your children are being given a better life than you had growing up, which is a great feeling as parents but subjects them to some entitlement craziness if you are not handling expectations appropriately.  I understand that you are probably not a troll, or a very patient one if you are misrepresenting your responses.  But this is a site extolling the virtue of badassity, living below your means (making 100k and riding a bike to work, so as to save 50% or greater of your gross income).  At the end of the day, it's all about being happy with less expenditure, and teaching our children that it's more fun to have a parent push them on a public swing than seeing a glow-pet on their Saturday morning cartoon and running out and buying it.  Making things or pursuing long term goals will always be seen as better than the instant gratification of buying crap or paying others to do things for you, so by justifying your own lifestyle over and again (with a little pretentious French thrown in, merci beacoup) will obviously not go well, but you have done a good thing to help reinforce why Mustachianism still sounds like a better path to walk, even if you have piles of income, so for that I do sincerely thank you.
« Last Edit: March 15, 2014, 07:59:45 AM by EscapeVelocity2020 »

RootofGood

  • Handlebar Stache
  • *****
  • Posts: 1361
  • Age: 39
  • Location: North Carolina
  • Retired at age 33. 5 years in, still loving it!
    • Root of Good
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #220 on: March 14, 2014, 09:48:07 PM »
It sounds like a pretty rough life.  I hope it is fulfilling for you! 

I enjoy my quiet time, reading a book in my hammock for a few hours, strolling around the neighborhood, and generally taking it easy.  Your monthly budget is larger than my annual budget (although adjusting for taxes, we're about the same).  I don't have any specific advice other than to say we all get to choose where we live and what we spend our money on. 

As for the country club, the $100k+ initiation fee is a sunk cost.  Evaluate going forward - does the ongoing outlay bring value?  Finance 101 - ignore sunk costs.

happyfeet

  • Stubble
  • **
  • Posts: 163
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #221 on: March 14, 2014, 09:50:05 PM »
After reading through all this, I still cannot fathom your income.  You are BIBS - big income big spenders.  You either have to drastically(I mean crazy drastic) change your lifestyle or keep on keep on with your spending.  It does appear like you try to keep up with the Jones.  Could not begin to imagine dropping six figures on a CC initiation fee.  Yikes.   

Have been on this website for a short time but I have learned that it is ok to not keep up with the Jones and be so consumer driven. So refreshing to me to say  - no to buying stuff and living a simpler life.  Last month saved 40% of income.  And it was pretty darn easy with a different perspective on life.  This coming from a midwest, middle aged gal with a strong faith.I've learned more from reading this website in such a short time and I truly appreciate what I am learning.  Got caught up in keeping up( it's so easy to do).  No more.

I also really like the MMM low information diet. That has changed my life also. Thanks to all who share on this site.  Much appreciated.



 


Hadilly

  • Bristles
  • ***
  • Posts: 280
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #222 on: March 14, 2014, 10:51:38 PM »
You know, I don't think I have a lot to say about the potential ontological shift you are contemplating.

Your comments about retirement age and your children being in high school, and would that be a good time or not to retire (forgive me, I don't have fortitude to reread all the previous pages), did make me want to respond.

One of the things I have seen in families in my (affluent) community is at least one parent deliberately ratcheting back their commitments and career when their oldest kid entered 8th grade. I was curious about that and inquired why do so, when it seemed like they were entering into a much less labor intensive time of parenting. They all responded that their kids' emotional needs were more important than previously, and they felt they need to be present to monitor, support, and help their children navigate the highschool years and teenage flux.

My step-mother comes from a monied family and went the private school route. I have heard a lot of stories about the things she and her equally unsupervised friends got up to (alcohol, drugs, risky stuff). She made it through, but knows a lot of folks who didn't. Mind you, this was Northern California in the 70s, definitely a pretty high level of hedonism in general.

So, maybe it is worth seriously considering getting to a place in a few years where at least one of you could be home every afternoon, do all the driving/carpooling, help with homework, and be very present in a time quantity way (retired in other words). I have always loathed the idea of driving children around from activity to activity, but every more experienced parent I mention that to, says that afternoon time in the car is when you really get to know what is up with your children and their friends.   

Anyway, just one more thing to contemplate, as you make decisions.

DocCyane

  • Bristles
  • ***
  • Posts: 390
  • Location: USA
  • Keep going. You're doing just fine.
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #223 on: March 15, 2014, 06:46:23 AM »
I just want to tell the OP that it sounds like his life is very stressful. I couldn't handle the scrutiny of wearing this or that, or driving this or that. On a good day, I remember pants.

If the life you're living, OP, ever starts to feel wrong, it's okay to make a change. Big or small. You jumped into a nest of Mustachians and we didn't do a good job of embracing you. Don't let that dissuade you from shedding old skin if it no longer fits. All creatures evolve.

I work every day to embrace concepts like gratitude, positivity, basic kindness and compassion. I am far from Buddha status, but the path is wonderful if you see value in walking it too.

I'm sorry you were handed all this responsibility and expectation. It's a heavy burden.

Luck better Skill

  • Bristles
  • ***
  • Posts: 283
  • Location: Virginia
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #224 on: March 15, 2014, 06:59:36 AM »
Our situation:
-   2 young children, both in private school
-   2 additional members of our household: live-in help and an elderly (sick) parent

  Note that this includes having to pay for a live-in to help with care of an elderly parent.

Thanks for reading.

  I edited the quote for length.  I am still reading this thread so others may have already commented on it:  but Kudos for you'll.  I know many people who lacked the resources or the will to bring an elder parent into their house and provide care.  We have different experiences, social circles, etc. but that care is the type of person that makes a good neighbor. 
  Money does not make some bad or evil.  I'm sure several of your friends are good people just as a few are examples for your kids, "if you ever grow up like that I will disown you."  Once you are sure of what you desire then become a leader among your friends.  They may want similar things waiting only for someone to show them it is possible. 
  "In every revolution, there's one man with a vision."  James T. Kirk to mirror Spock.  "Be that man."
  Sorry could not keep my geek side repressed.

mm1970

  • Walrus Stache
  • *******
  • Posts: 6976
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #225 on: March 15, 2014, 08:43:43 AM »
What Daleth said:
Quote
But instead of interpreting these listings as EXAMPLES proving that you were quite possibly incorrect[/i] in assuming that you couldn't get 5BR for significantly less than what you're paying now--that is, instead of thinking, "Hmm, maybe I *could* get the large house I need for much less money--perhaps I should keep an eye on local real estate listings"--you deployed your vast real estate wisdom to sniffily dismiss a couple of those houses as being in "secondary" areas with "the worst" schools in town. That, to you, apparently proves that your assumption was correct and thus no further discussion need be had about reducing your housing expenses.[/i] If you were looking for information instead of looking for ways to justify decisions you've already made, you would not have responded that way.

This points to an amazing amount of arrogance in the OP.  This is, of course, assuming the OP is not a troll and is a real honest person.  I don't know if the arrogance bothers people worse because of the amount of wealth?  Possibly, because of how people perceive the wealthy.

However, I think this is a normal reaction to MMM and/ or frugality in general.  People WANT to think that they are right and that they have made the right decisions.  It doesn't matter if you are this person or someone making $20k per year.  Nobody likes to be told that they are stupid. 

When it comes to making changes, some like to go all MMM "hair on fire", and some dip a toe in. This person has enough money right now to "dip a toe in".  When I started years ago (pre-MMM), I went all-in.  Of course that was pre-kid and our expenses have gone up.  Nowadays we are more "dip a toe in".  So it took a couple of years to actually get around to canceling cable.  Our last two cars were (gasp! bought new!).  So yeah, it seems a bit ridiculous to try and cut $50 off this budget, but maybe it works up to more and more - eventually doing your own cleaning and yardwork, getting rid of the extras, choosing less expensive (or less frequent) vacations.  It doesn't have to be done overnight.  We canceled cable, then cut our child care costs, then replaced some of our lights with LEDs, then cut our vacations down (do a lot more staycations - that maybe has more to do with the 20 month old being a pain).  There is hope - but it's hard when you are SO enmeshed in a lifestyle where you actually care what other people think.

As a comparison - I'd say that the OP makes about 3.5x what we do, his house is 3.5x bigger - with WAY more land (and costs about 3.5x more).  But even though we are of similar age (we are in our mid-40s), we have much more in cash/ savings (not counting real estate values).  We also bought near the peak, so we pretty much have kissed $200k goodbye in the last 10 years due to the house values dropping.  The OP's lifestyle choices are definitely WAY more than 3.5x ours.  Here we join the YMCA, not the country club.

I really don't want that kind of life for my kids that he has - that life of privilege.  I am where I am because I worked darn hard for it.  We have chosen public school for our children (well, only the first is in school), and while we could have transferred to one of the "best" schools, those schools are full of kids who live in the multi million dollar estates in Hope Ranch, the Mesa, or Montecito.  I really don't want his friends to be "those kids".

Finally, there's a lot of acrimony out there right now between the rich and poor.  The "rich" constantly saying that it only requires hard work to make money and the poor are poor because it's their own fault.  We don't need a living wage, the market takes care of it, should you really get $20/hour to clean toilets, etc.  The poor blaming the rich for all of the world's ills and for being cheats.  Which is true?  Well, both, and neither.  Some rich just worked for it.  Some inherited it.  Some make it like this guy, because they "know the game" - they make obscene amounts of money doing...what, exactly?  Some are CEO's who send jobs offshore and cut benefits in order to make more money for their companies.  These are the people most people object to when they complain about "the rich", because these people show that the game is rigged.  Not everyone can succeed when a small few make the rules.

In addition, some of the poor ARE lazy.  Some are welfare cheats.  But some just work hard at low wage jobs and / or have bad luck.  I don't know when it became "shameful" to work a manual labor job - but all of a sudden, certain jobs are "unworthy" of a living wage or health insurance and "are only intended for teenagers".  When I was growing up, there wasn't such a thing.  Anyone willing to work hard could make a living.  The jobs that weren't "worthy" of a living wage were few.  Certainly you wouldn't be rolling in dough, but you could afford rent, food, and clothing.

TomTX

  • Magnum Stache
  • ******
  • Posts: 3663
  • Location: Texas
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #226 on: March 15, 2014, 10:22:17 AM »

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?

Hell, last year was my first $65K year (rise from $50k to $60k in 8 years before that) - and our net worth is around $300k retirement/efund/etc plus around $75k equity in the house and another $10k in "stuff" we could sell off.

I don't even consider us particularly mustachian - with one kid, we're spending ~$450/month on sports memberships for the 3 of us (which will drop to $100/month in 2.5 years if we continue what we are doing.) Admittedly, that's our one big "frivolous" thing - but it's exercise that I have been able to stick with. Blood pressure's down to normal (from borderline hypertensive) and it helped my wife drop pregnancy weight fast. Our health overall is better.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #227 on: March 15, 2014, 10:49:34 AM »
There is hope - but it's hard when you are SO enmeshed in a lifestyle where you actually care what other people think.

The irony here is that most of those people aren't actually thinking about you at all. See e.g. http://en.wikipedia.org/wiki/Spotlight_effect

Many critics who have either missed these facts or, worse, misinterpreted them to imply shirking the responsibility of raising our children ('get rid of the nanny') in order to merely have a big income and spend to feed our egos should take note.

I think there was a lack of clarity in your initial description.  My impression was that the older parent was essentially independent, and the live-in help was just a nanny for the kids. 

brandino29

  • Bristles
  • ***
  • Posts: 321
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #228 on: March 15, 2014, 11:41:57 AM »
I would like to thank WestchesterFrugal for helping me truly understand a sunk cost.  Over the last couple of days I've spent 2-3 hours just trying to read all of the posts from the beginning (lest I be accused of poor reading comprehension and mocked if I decided to chime in) and still had multiple pages of posts to read before I realized I was just wasting time.  I considered finishing reading all of the posts since I had already invested so much time anyhow when the lightbulb went off that my time was sunk and I needed to move on with my life.

I do need to mention that it's infuriating to hear someone of her financial status complain about taxes and in the same breath mention their "footprint on society."  Yes, woe is you who must pay hundreds of thousands of dollars a year in taxes but thank you for being so generous.  My cousin is a single mother in her early 30s who put herself through college with two young children to become a social worker, the glorious and high earning field that that is.  It's funny--here's a woman who grew up poor, and chose a career earning less than $30k per year to work with disadvantaged adolescents who have been abused and/or abandoned by their parents.  She is also paying no federal income tax, but to hear Ms. WestchesterFrugal tell it, my cousin is not making her "contribution" to society because it doesn't come in the form of big (involuntary) withholdings in her paycheck.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28060
  • Age: -999
  • Location: Seattle, WA
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #229 on: March 15, 2014, 12:01:36 PM »
Sorry to hear you misread the OP - it is there for all who want to read in an unbiased way to see

Pity you won't realize since you stopped reading.

It's side comments like these that make you come off like a *. It has nothing do with your income, but your personality.

Those are just examples from your latest 2 posts. There are literally dozens more.

Maybe approach a forum from which you are asking for help with a little more humility?
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.

TomTX

  • Magnum Stache
  • ******
  • Posts: 3663
  • Location: Texas
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #230 on: March 15, 2014, 12:09:02 PM »
The US tax system is one of the most progressive in the world, due to lack of VAT (consumption) tax.  I actually would welcome a consumption tax - it is certainly Mustachian in forcing those who overspend to foot the bill for those who don't.  But taxing income at higher and higher marginal rates makes no sense.

Including paying VAT on your country club and private school expenses?

...and even those "50%" who pay no federal income tax are typically still paying FICA taxes, sales taxes (WHAT!? A consumption tax?) et cetera. They DO have "skin in the game" - except for the rich fatcats exploiting tax loopholes, of course.

BTW - FICA taxes are quite regressive. You pay FAR less (as a percentage) than the average American.

Janie

  • Guest
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #231 on: March 15, 2014, 12:16:02 PM »
Hey Brandino,

I'm not interested in OP's situation so I won't address it, but your mention of tax complaints struck a chord. It's certainly the time of year to hear plenty of that type of thing. Benjamin Franklin's "Way to Wealth" offers my favorite comment on that.

Quote
"Friends, says he, and neighbors, the taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay, we might more easily discharge them; but we have many others, and much more grievous to some of us. We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly, and from these taxes the commissioners cannot ease or deliver us by allowing an abatement. However let us hearken to good advice, and something may be done for us; God helps them that help themselves, as Poor Richard says, in his almanac of 1733.


SweetLife

  • Bristles
  • ***
  • Posts: 331
  • Location: Ontario
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #232 on: March 15, 2014, 12:39:19 PM »
-   2 young children, both in private school

In your entire case this is the sentence that struck me the hardest ... which you may think is strange ... All of the money in the world does not make up for the memories you have with parents when you are growing up ... so here are my questions for you

1) How often do you see your children?
2) How does the life you are leading (keeping up with the Jonses) reflect the values you want to instill in your children.
3) What "family" memories will your children have as they grow ...
4) Are you enjoying your life? Are you enjoying your family?

I am quite new to this forum (and quite new to the idea of soon becoming a very late in life parent) and am rushing to get out of the little debt I am in so that I can enjoy my life with this wonderful little family I have ...

From the little I understood of your financial situation (trying to wrap my head around the numbers) it appears you can retire YESTERDAY ... sell/get rid of the items you already appear to realize are giving you no "benefit/joy" and move to a lovely little area (with the whole household) and do whatever you want to do ... dabble in things if you like.

I can only stress one thing to you that I stress to my friends ... life is MUCH too short you never know what will happen to your health or circumstances ... enjoy what you have now in your case a lovely family ... You have a bunch of "wiggle room" to do this now.

I was lucky to find a husband who, like me, is more interested in "family" and friends than the "jonses" lol... Take care!

Cassie

  • Walrus Stache
  • *******
  • Posts: 5789
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #233 on: March 15, 2014, 12:41:47 PM »
I started reading this the first day and at first thought it was serious but now realize it is really only for entertainment purposes.  I have read it everyday because it is just too funny/ridiculous!!!

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #234 on: March 15, 2014, 01:06:25 PM »
Here's a question: does it change your (or anyone's) mind or feelings at all, or will you cling to your initial thoughts and ideas?  Does it move the needle?

I can't say that it changes my mind, as my opinions on what are reasonable/unreasonable expenses haven't changed.  But I think paying for live-in care for an elderly parent is probably a more frugal choice than e.g. a nursing home.  Indeed, I wouldn't necessarily think of live-in help as a wild extravagance for someone in your position.  Perhaps the problem is that somewhere in the thread 'live-in help' (your description in the original post) got changed to 'nanny', which IMHO is neither necessary nor desirable for school-age kids.

I think the real problem here is one of conflicting goals.  You say you want to 'have it all' but retire early, yet you can't retire early unless you have enough savings/investment income to support your desired retirement lifestyle.  There's also the problem that you say you enjoy your work (something I share), so why the heck do you want to retire?  Financial independence, yes: barring financial disaster on a scale that'd make '08 look like a minor correction, I could survive in moderately comfort without working another day.  You could get to a similar position by applying some of the adjustments people have suggested.

To keep re-stating the obvious, your fundamental problem is reflected here:

This is because in a downturn, the people who want to live in the best areas now can do so - they don't have to 'settle' for 2nd and 3rd rate locations.  Anyone familiar with the NYC metro real estate market can attest to this.

You're still seeing the world through a set of glasses, in which there are 'best' areas, and places with mere $1 million houses are 2nd and 3rd rate.  (By comparison to some near my area, your $2 million house is a mere shack: http://www.zillow.com/homes/for_sale/Incline-Village-NV/5266_rid/pricea_sort/39.351821,-119.860668,39.132457,-120.041943_rect/11_zm/ )  Looking at liveability rather than status could save you a heck of a lot of money, and increase your family's quality of life.

Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #235 on: March 15, 2014, 01:56:10 PM »
Here's a question: does it change your (or anyone's) mind or feelings at all, or will you cling to your initial thoughts and ideas?  Does it move the needle?

Funny, I was going to ask you the same thing. Your response to my March 14, 10:05AM post (p.7) was priceless. Allow me to quote your entire response to my long and detailed post:

You think we are renting a $2.1mm house for $6k/month?  The taxes in this area on a house that value would be almost $5k a month
Think again

Your response changes absolutely nothing about the analysis set forth in my post; in fact, you've focused on just about the least relevant detail imaginable (perhaps in order to avoid thinking about the rest of it). You said in your first post that you were charging a below-market $6000/mo in rent and earning a, quote, "net cash flow of $0." You also said your two houses are worth a combined $4.1 million and you bought the second one despite not having sold the first one. Since that was my point--that you had made decisions about house purchases and rentals that no competent real estate investor would make, and yet you were lecturing actual real estate investors about the supposedly bad real estate investment advice we were giving--does it make any difference whether your first house is worth $2M or $1.5M or $1.3M or (insert figure here)? No.

The fact that you ignored my entire post except to fixate on that irrelevant detail tells me that you're still, at least as of today, more interested in defending your choices from criticism than examining your choices with a view towards future improvements. When anyone suggests any of the following (which have been mentioned several times):
  • that your actions are inconsistent with your stated values
  • or that your rationalizations don't really make sense
  • or that your fetishistic attachment to "status" (i.e. buying whatever you think you have to buy in order to make people who are not your friends think that you are worthwhile) will cost you millions of dollars and years of your life, and will prevent you from retiring early to a climate you enjoy...
...you retreat into either quibbling about irrelevant details (e.g., exact value of your rental; whether one particular house I linked to is a good buy--missing the basic point that there are houses that meet your needs available for less than the house you own), or getting sarcastic and defensive (I second ARebelSpy's post on that).

Now, sarcasm and defensiveness are understandable initial reactions to having a group of people point out that what you're saying doesn't stand up to analysis, but if you want to be wise, if you want to learn anything, if you have any interest in changing your habits, if you want to be able to move to a nice warm climate before you're almost too old to enjoy it, then surely it makes more sense to ditch the defensiveness and think about what people said to you (or at least about the things that more than one person said to you--see bullet list above--because if several different competent adults all see something you've said or done in the same way, perhaps it's worth considering their perspective?).


Russ

  • Handlebar Stache
  • *****
  • Posts: 2213
  • Age: 28
  • Location: Boulder, CO
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #236 on: March 15, 2014, 02:18:50 PM »
Sorry to hear you misread the OP - it is there for all who want to read in an unbiased way to see

Pity you won't realize since you stopped reading.

It's side comments like these that make you come off like a *. It has nothing do with your income, but your personality.

Those are just examples from your latest 2 posts. There are literally dozens more.

Maybe approach a forum from which you are asking for help with a little more humility?
Well it is a bit of a vicious cycle

I started out thanking people for their comments (both helpful and otherwise) without the snark, but have realized it doesn't change anyone's criticism so now I will just respond like for like.

how productive

love the poll, by the way. can we add a "don't care" option like that IQ poll we just had? ;-)
« Last Edit: March 15, 2014, 02:23:28 PM by Russ »

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28060
  • Age: -999
  • Location: Seattle, WA
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #237 on: March 15, 2014, 03:12:37 PM »
love the poll, by the way. can we add a "don't care" option like that IQ poll we just had? ;-)

Russ is clearly a member of this voting party:

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.

Russ

  • Handlebar Stache
  • *****
  • Posts: 2213
  • Age: 28
  • Location: Boulder, CO
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #238 on: March 15, 2014, 04:37:07 PM »
ok actual advice time

"you can have anything you want, but you can't have everything"
-arbitrary smart person

so no, you can't "have it all" and retire early, if having it all is directly contrary to saving any of your dollars. sorry to break it to you this way; I normally do this in person. It's not you it's me?

Russ

  • Handlebar Stache
  • *****
  • Posts: 2213
  • Age: 28
  • Location: Boulder, CO
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #239 on: March 15, 2014, 04:40:15 PM »
love the poll, by the way. can we add a "don't care" option like that IQ poll we just had? ;-)

Russ is clearly a member of this voting party:



only if they can protect my constitutional right to bear doomsday devices.
« Last Edit: March 15, 2014, 04:45:52 PM by Russ »

SweetLife

  • Bristles
  • ***
  • Posts: 331
  • Location: Ontario
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #240 on: March 15, 2014, 07:37:21 PM »
So ... I am now finished my overtime shift of 7.5 hours (at time and a half) and spent most of it reading all the comments on this forum ... it was ... interesting. 

Viva Mustachians! :) (Even those who are just starting out)

engineerjourney

  • Bristles
  • ***
  • Posts: 277
  • Age: 32
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #241 on: March 15, 2014, 08:24:38 PM »
(By comparison to some near my area, your $2 million house is a mere shack: http://www.zillow.com/homes/for_sale/Incline-Village-NV/5266_rid/pricea_sort/39.351821,-119.860668,39.132457,-120.041943_rect/11_zm/

I just wasted a lot of time stalking these houses, some are sooo gorgeous, thanks for posting so I can see what houses the obscenely rich live in around Lake Tahoe.  Some of them are the modern day equivalent to the mansions in Newport RI.

NeverWasACornflakeGirl

  • Stubble
  • **
  • Posts: 231
    • Mommy Won't Work
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #242 on: March 15, 2014, 09:17:03 PM »
If I had that kind of money I'd put it in a bank vault and roll around in it Scrooge McDuck-style!!  Go out and spend more money!!  Why are you eating at home so much?  Why don't you have in-home massages on a regular basis?  Where's the line item for hookers and blow?  C'mon, live a little!!  Why did you come here asking these wonks what we think??

horsepoor

  • Magnum Stache
  • ******
  • Posts: 3201
  • Location: At the Barn
  • Horses: for sanity & poverty!
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #243 on: March 15, 2014, 10:41:46 PM »
Of course happiness isn't the only purpose in life - and in reality everyone seems to have a slightly different interpretation and opinion of what the meaning of life is.

Additionally everyone has her own core competencies and strengths which allow her to contribute to society.  It would be a shame if Einstein or Steve Jobs had taken the same route just sailing around the world instead of changing it for the better.  Of course not everyone is at that level, but perhaps finding what one's purpose in this world is and fulfilling it is actually more meaningful than having 'freedom' and 'not having to answer to the man'.


The goal or purpose FIRE isn't to earn your money then sit on your porch drinking sweet tea.  The whole idea is that when you are not reliant upon your wage income you can do whatever the hell you want, maybe even sail around the world, or think about quantum physics...whatever blows your skirt up.

You're right, you probably won't invent the next iphone by sailing around the world, but neither of your examples went to an ivy league school.....or even completed school in regards to Jobs.  But do you believe people who are driven and passionate about what they do are just going to up and stop if they become FI?  Why is your path any better than the person who chose to sail around the world with their family?

I've spent a couple hours on this thread (!) and still haven't gotten through, but had to respond to this.

It speaks very well to the privilege vs. experience quandary.  My parents pulled my brother and I out of school and spent about 2 years out sailing on our funky homemade sailboat.  That was invaluable experience, and I daresay it had a lot to do with where both of us are now.  They didn't have the financial means, so it wasn't a question of that vs. private school and fancy activities.  BUT, my brother, who I'm sure would qualify as genius if tested, spent lots of time reading, designing and building toy boats.  I was younger and spent lots of time examining tidal pools and fishing (and reading).  These days, my brother is an engineer and a millionaire despite his lack of formal education, and I am an ecologist, with a very interesting and fulfilling career.  Sailing, or camping, or whatever else that might pass as empty leisure can actually be much more educational and profoundly life-changing than some fancy-pants private education.  Not to mention that I had a first-hand look at age six at how fancy my poverty-level US upbringing was compared to most Mexican children.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #244 on: March 15, 2014, 10:51:00 PM »
...thanks for posting so I can see what houses the obscenely rich live in around Lake Tahoe.

You also need to remember that those are just the ones listed for sale.  The really rich are keeping theirs :-)

jscott2135

  • Stubble
  • **
  • Posts: 107
  • Age: 38
  • Location: Forest Grove, OR
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #245 on: March 15, 2014, 11:35:36 PM »
I do not like this thread or you ambiguity towards the principals that many of us on this forum try to follow.  You're obviously welcome to post here, but quite frankly I find this post (MOD EDIT: personal attack removed) obscenely obnoxious.
« Last Edit: March 16, 2014, 12:08:45 AM by swick »

blainem13

  • Guest
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #246 on: March 16, 2014, 12:06:58 AM »
This case study is fascinating.  I figured I would point out a few things:

1) This blog, along with its followers, is a counter cultural institution.  The demographic here consists of generally high earners - whether engineers, consultants, creatives, or mostly software developers - who take pleasure in going against the grain of conspicuous consumption.  The OP appears to have little to no interest in this way of being, but perhaps may want to fancy herself as frugal, green, etc for vanity purposes.  The epicurean philosophy behind the MMM ideology is largely about gaining freedom and autonomy from the paid-labor lifestyle in order to craft one's own creative version of a meaningful life independent from mainstream (and certainly elite) expectations.  Clearly, the OP doesn't really understand or value this worldview given how myopically she views her children's future ("these kids tend to choose certain economically profitable careers - medicine, law, finance, etc."). 

2) Many of my professional cohort grew up in similar situations where they were groomed for specific paths.  In general, I've observed this upbringing to be limiting in worldview and career path.  One friend told me that she, "wanted to be an attorney since I was 5."  Did she really come up with this on her own?  I wanted to be a fireman at 5; most of the girls I know wanted to be cowgirls or marine biologists.  She's now a fairly miserable attorney last I heard. 

While I grew up comfortably middle class, I was also exposed to many ways of being and doing.  I can make friends with the public housing inhabitants down the street, and I'm equally comfortable when I have to go to a private club setting for professional or social reasons.  My friends who grew up in a class bubble aren't so socially malleable (think of the sitcom "Fraiser").  Further, many friends look back on private school, summer camp, etc with really bad memories.  I think a lot of people I know feel like their parents either a) sent them to status schools for their parents' own status benefit or b) sent them to boarding school or summer camp because they didn't want to be hands on parents.  Just beware that private schools may actually disadvantage kids socially and make them resentful. 

3) From a mustachian perspective, I think this thread is extremely worthwhile in that it is a cautionary tale for those of in high income/high status professions.  The OP hoped that maybe someone would learn from her situation.  Well, yes, don't follow this path if you want to live an original, meaningful life full of autonomy and creativity.  If you get a high-paying, high-status job, don't fall into the high-status trappings of neighborhood, house size, lawn size, car, schools, clubs, vacations, etc.) 

4) As has already been pointed out, the OP wants to be viewed as "green" or a "philanthropist" or otherwise believe that she is contributing in a positive way.  Let's be clear, though, the leaf and LED bulbs are doing nothing against a family carbon footprint that is 10-20x the typical middle-class US family and likely 100x the typical world average family.  Also, the philanthropy helps to assuage some of the guilt that is brought on from working a job that most people in the US now view as extracting value from the economy rather than creating value.  In my circles, green-washing is a dirty word, but it isn't to those who willfully wanted to be washed over with fuzzy green feelings that make them feel like they aren't setting the stage for the displacement of millions of climate refugees. 

5) I have no idea why the OP would even be interested in the ideas of MMM.  While not as extreme as ERE, MMM is radically counter-culturalist and the OP is a mainstream elitist.  Clearly the OP has no intent of "defecting" from the elite sphere, so I don't understand the significant time investment in this thread.  As others have pointed out, this blog and forum isn't really the best venue for this discussion.  I would recommend http://www.jamesaltucher.com/.  He's a failed tech executive who blogs about his falling from grace and how he's begun to craft a meaningful life from the wreckage.  His musings might be more in line with the OP's current situation.  He's no Mustachian, but he's somewhat introspective and calls out his own past mistakes relating to excessive consumption and hubris.

6) I've been pretty critical of the situation, but that doesn't mean that it's stark.  If the OP is happy with her life, then she should just live her life and stop worrying about posting in forums.  If she's not entirely happy, as might be indicated by the posting and excessive defending in this thread, she has all the tools she needs to step off the treadmill now.  She can walk into the sunset and leave the club, the private school, the house, the status neighborhood, the nonprofit board, etc behind.  She can liquidate her assets and live the rest of her life with her family in a more sustainable way that is based on self-expression and vitality.  She just has to stop giving a fuck what other people think, which is how most of us here live our lives. 

mikefixac

  • Bristles
  • ***
  • Posts: 313
  • Location: Brea
    • Uncommonly Brilliant
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #247 on: March 16, 2014, 12:18:57 AM »
Not part of your world, but would still like to comment please.

An uncle, worth ~$50-100MM took my frugal dad to Vegas. Ever been to Mirage Casino and seen the $500/coin slot machines? He said to my Dad, "Geez, $5 just to play one time". Dad told him "No, that's $500 to play that machine.

Later his wife learned to like slots and would play the $25 slot machines. I said, "Wow, you must get some good comps". Immediately I felt embarrasssed after I said it because I don't think he knew what comps were, or wanted to be bothered with them. (I've played $1 Blackjack for the purpose of getting free beer.)

I'm curious what you think when you read MMM lives on $25K/year. My dad retired at 47, lived on about the same amount, (I remember him bringing a sandwich maker in hotel room on trips), would visit him and go golfing. Even way back then, I realized he lived the life most millionaires could only dream of.

Kudos to you posting. If you want to see someone that makes MMM look like a spendthrift, you should check out Early Retirement Extreme.
« Last Edit: March 16, 2014, 01:43:17 AM by mikefixac »

jscott2135

  • Stubble
  • **
  • Posts: 107
  • Age: 38
  • Location: Forest Grove, OR
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #248 on: March 16, 2014, 12:21:18 AM »
This case study is fascinating.  I figured I would point out a few things:

1) This blog, along with its followers, is a counter cultural institution.  The demographic here consists of generally high earners - whether engineers, consultants, creatives, or mostly software developers - who take pleasure in going against the grain of conspicuous consumption.  The OP appears to have little to no interest in this way of being, but perhaps may want to fancy herself as frugal, green, etc for vanity purposes.  The epicurean philosophy behind the MMM ideology is largely about gaining freedom and autonomy from the paid-labor lifestyle in order to craft one's own creative version of a meaningful life independent from mainstream (and certainly elite) expectations.  Clearly, the OP doesn't really understand or value this worldview given how myopically she views her children's future ("these kids tend to choose certain economically profitable careers - medicine, law, finance, etc."). 

2) Many of my professional cohort grew up in similar situations where they were groomed for specific paths.  In general, I've observed this upbringing to be limiting in worldview and career path.  One friend told me that she, "wanted to be an attorney since I was 5."  Did she really come up with this on her own?  I wanted to be a fireman at 5; most of the girls I know wanted to be cowgirls or marine biologists.  She's now a fairly miserable attorney last I heard. 

While I grew up comfortably middle class, I was also exposed to many ways of being and doing.  I can make friends with the public housing inhabitants down the street, and I'm equally comfortable when I have to go to a private club setting for professional or social reasons.  My friends who grew up in a class bubble aren't so socially malleable (think of the sitcom "Fraiser").  Further, many friends look back on private school, summer camp, etc with really bad memories.  I think a lot of people I know feel like their parents either a) sent them to status schools for their parents' own status benefit or b) sent them to boarding school or summer camp because they didn't want to be hands on parents.  Just beware that private schools may actually disadvantage kids socially and make them resentful. 

3) From a mustachian perspective, I think this thread is extremely worthwhile in that it is a cautionary tale for those of in high income/high status professions.  The OP hoped that maybe someone would learn from her situation.  Well, yes, don't follow this path if you want to live an original, meaningful life full of autonomy and creativity.  If you get a high-paying, high-status job, don't fall into the high-status trappings of neighborhood, house size, lawn size, car, schools, clubs, vacations, etc.) 

4) As has already been pointed out, the OP wants to be viewed as "green" or a "philanthropist" or otherwise believe that she is contributing in a positive way.  Let's be clear, though, the leaf and LED bulbs are doing nothing against a family carbon footprint that is 10-20x the typical middle-class US family and likely 100x the typical world average family.  Also, the philanthropy helps to assuage some of the guilt that is brought on from working a job that most people in the US now view as extracting value from the economy rather than creating value.  In my circles, green-washing is a dirty word, but it isn't to those who willfully wanted to be washed over with fuzzy green feelings that make them feel like they aren't setting the stage for the displacement of millions of climate refugees. 

5) I have no idea why the OP would even be interested in the ideas of MMM.  While not as extreme as ERE, MMM is radically counter-culturalist and the OP is a mainstream elitist.  Clearly the OP has no intent of "defecting" from the elite sphere, so I don't understand the significant time investment in this thread.  As others have pointed out, this blog and forum isn't really the best venue for this discussion.  I would recommend http://www.jamesaltucher.com/.  He's a failed tech executive who blogs about his falling from grace and how he's begun to craft a meaningful life from the wreckage.  His musings might be more in line with the OP's current situation.  He's no Mustachian, but he's somewhat introspective and calls out his own past mistakes relating to excessive consumption and hubris.

6) I've been pretty critical of the situation, but that doesn't mean that it's stark.  If the OP is happy with her life, then she should just live her life and stop worrying about posting in forums.  If she's not entirely happy, as might be indicated by the posting and excessive defending in this thread, she has all the tools she needs to step off the treadmill now.  She can walk into the sunset and leave the club, the private school, the house, the status neighborhood, the nonprofit board, etc behind.  She can liquidate her assets and live the rest of her life with her family in a more sustainable way that is based on self-expression and vitality.  She just has to stop giving a fuck what other people think, which is how most of us here live our lives.

I +1 this, and you said it much more eloquently than I did!  Help and input was asked for, received and discarded.  But you have all the tools and info to make a more Mustachian life or just say to heck with it and bask in the glow of your current $$$ filled life.

Fireman

  • Bristles
  • ***
  • Posts: 397
  • Location: Fredericksburg, VA
Re: Reader Case Study: Can We Have It All But Still Retire Early?
« Reply #249 on: March 16, 2014, 07:49:54 AM »