Reader Case Study: Can We Have It All But Still Retire Early?

[Free_at_50]

Hi Westchester.  Not sure you read my last post but my opinion is you are seeking answers that are relative to your lifestyle which not many on this board, including me, can truly relate to.  I am FI but it took me many years and a willingness to enjoy the simple things in life.  You have the ability to get there very quickly if you so desired and were willing to reevaluate what is important in your life and dare I say sacrifice some of your current standards.  If not I am certain you can come up with a formula as I outlined on my last post to figure out when you will reach FI and be able to do whatever it is you want to in life.  Good luck!

[Free_at_50]

Great, then you are set!  FWIW one other fantastic benefit I found with this forum are some great tips on how to do things that not only save money but also are much healthier for you and the environment.  It never hurts to know how to do things simpler and less costlier especially in a pinch!

[mm1970]

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.

Plus in non-downturn times, more people can buy that "second-rate house".

Around here, when we bought, the "bottom" of the single family market (2BR, 1BA, 1000 sf, not a good school district) was $700-800k.  These houses were HOT.  Because more people could afford them compared to a $950k house, which was much bigger, nicer, in a better school district.

There is ALWAYS more demand for the lower-end houses here simply because of the math.

[mm1970]

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.

Plus in non-downturn times, more people can buy that "second-rate house".

Around here, when we bought, the "bottom" of the single family market (2BR, 1BA, 1000 sf, not a good school district) was $700-800k.  These houses were HOT.  Because more people could afford them compared to a $950k house, which was much bigger, nicer, in a better school district.

There is ALWAYS more demand for the lower-end houses here simply because of the math.

mm1970 - I am not debating that cheaper houses sell quicker than more expensive ones since more people can afford them if they are in the same town

But our own experience (with our rental property) is that houses in second and third tier markets/towns are much harder to sell even at the lower price points than higher priced ones in more established and the most desirable areas - hence how we became landlords by necessity instead of choice

I guess it depends on location.  Here (Santa Barbara), the low-end houses ($650-850k) are always hot, and $2m+ are usually good sellers.  But those are 2 different demographics shopping.  The tricky part is the $850k to $2m.  Those are harder to sell here, depending on the market.

[Jamesqf]

But our own experience (with our rental property) is that houses in second and third tier markets/towns are much harder to sell even at the lower price points than higher priced ones in more established and the most desirable areas - hence how we became landlords by necessity instead of choice

But you are a buyer, not a seller.  If you buy an affordable house with the attitude that you are going to be living there for the foreseeable future, resale value is pretty much irrelevant.  Worst case, someday you either rent it for enough to cover expenses (as you are doing with your previous house), or let the mortgage lender foreclose 'cause you're living on a tropical beach somewhere.  The point here is that you are reducing your ongoing housing costs by about half, or (off the top of my head) something upwards of $5-6K/month.  Put that in a good investment account, and watch it grow.

[2527]

This has been a really fascinating and enlightening thread.  WestChesterFrugal, may I ask what decisions you have made and what direction you are heading? 

[szmaine]

Hi OP,

I doubt I have any advice really useful to you financially...other than the little things you maybe will pare down?? What do you think you will do??  I liked someone's post about changing your landscaping with a little investment to use less water and require less mowing...I have almost as much land as you but 3/4 is woods..you can't plant woods overnight but there might be other options...large low maintanace ground cover plantings.

Um, and if you possibly can do some reading, thinking and reflecting....do yourself a favor and loose the "skin in the game" beliefs. It is bunk...the "47%" have as much skin in the game as they can bear, and a significant quantity of dental enamel as well. Anyway, I won't go on and on but it's an ugly meme that I'm so sick of hearing. I'm sure that's not the real you...? Is it?

http://www.ctj.org/pdf/taxday2010.pdf

Edited for spelling

[vivian]

This has been a fun thread to read.

WF - much has been said about how your method of calculating net worth of $442K is not the standard here. I am not doubting your math, but think that the way you are calculating it is making it harder to identify the different types of expenses you have and where you might cut. I would recommend you use the more typical net worth and include the future liabilities as part of your current expenses (i.e., private school tuition) or dedicated savings (i.e., college savings). Then I would separate your expenses into the following categories: absolute needs, wants you are committed to until retirement (sounds like the private school might be in category), wants you are not willing to give up (perhaps the country club falls in here), and wants you are willing to give up (sounds like the luxury car might be here). Then start giving up the last category and estimate when your new expenses hit 3% of the more traditional net worth figure. That's your retirement date. This estimate may seem simpler than your more complex one, but in reality there were a lot of assumptions baked into your estimate. In truth, we don't know what college expenses will be like in 10+ years--or even what school your children will want to go to. I think it is better to use simpler numbers with fewer assumptions and then reassess as time passes and more of the unknowns are known.

I would also encourage you to reassess your expenses in these categories every once in a while. You may find that as you give up some "low hanging fruit" wants in the last category, other things you considered as "high priority wants" or even "needs" become less important. That is part of the essence of mustachianism-realizing that you don't get happiness from things, and expenses you once considered priorities become less of a priority as you realize this.

Finally, a previous poster replied that your estimate of moving from $59K to 8K in monthly expenses is not realistic. That point has not gotten enough attention. Again, I am not doubting your math, but the emotional ability to scale back that dramatically. You are used to having massive amounts of money leaving your accounts every month. So when opportunities to spend large sums of money present themselves you in the future, it is going to seem normal. For example, you are assuming that child-related expenses will stop once your kids are out of college. But is that just undergrad, or have you thought about helping them through grad school as well? What about helping your children with their weddings? Are you going to be in a place to tell them to pay for it themselves or to have a "budget" wedding or will you need to pay for a wedding that you can invite your $10MM boss to? Will you help them put a down payment on their own Westchester house? What about spending on grandkids? My in-laws are prime mustachian examples-high salaries but extremely frugal. But yet they just offered to buy us an insanely expensive playset for our son because they want their grandchild to have nothing but the best. My point is not about these specific examples, but that there will always be new things for you to spend money on and if you are used to seeing $59K go out the door every month, going down so drastically will be hard.

[arebelspy]

This has been a really fascinating and enlightening thread.  WestChesterFrugal, may I ask what decisions you have made and what direction you are heading?

Things we have resolved to change immediately: sell the Mercedes (which would dramatically lower auto maintenance insurance by at least 50%), one big vacation a year (cutting vacation budget by 60%), trim landscaping by using lower cost providers and leaving things less 'manicured', cutting some of the kids' acticities and shopping (which is mainly kid related as well)

Groceries and utilities are already much lower on the current run rate vs previous 12m spending (which was listed in the OP)

Also the expenses will look much more reasonable once we sell the house when the tenants' lease ends next year (fingers crossed the housing mkt holds up until then)

Things that are under consideration in the medium to long term: country club membership (although we do get a lot of use out of it) and downsizing earlier than when the nest is empty (particularly if the grandparent no longer needs to stay with us) - I would give those areas a 30% chance of being acted on.  We are unlikely to pull kids from their current school (which they love) unless we can't pay the bills.

It has been an interesting experience sharing our life with you all - mixed feelings on what I could have done differently in hindsight to make things more pleasant, but this is really a great community of people with a lot to offer.

Those are some good changes.  Baby steps.  Congrats.  :)

[2527]

Please keep us informed going forward.  This website's membership is mostly middle income to upper-middle income.  Your experiences and insights round things out.

This has been a really fascinating and enlightening thread.  WestChesterFrugal, may I ask what decisions you have made and what direction you are heading?

Things we have resolved to change immediately: sell the Mercedes (which would dramatically lower auto maintenance insurance by at least 50%), one big vacation a year (cutting vacation budget by 60%), trim landscaping by using lower cost providers and leaving things less 'manicured', cutting some of the kids' acticities and shopping (which is mainly kid related as well)

Groceries and utilities are already much lower on the current run rate vs previous 12m spending (which was listed in the OP)

Also the expenses will look much more reasonable once we sell the house when the tenants' lease ends next year (fingers crossed the housing mkt holds up until then)

Things that are under consideration in the medium to long term: country club membership (although we do get a lot of use out of it) and downsizing earlier than when the nest is empty (particularly if the grandparent no longer needs to stay with us) - I would give those areas a 30% chance of being acted on.  We are unlikely to pull kids from their current school (which they love) unless we can't pay the bills.

It has been an interesting experience sharing our life with you all - mixed feelings on what I could have done differently in hindsight to make things more pleasant, but this is really a great community of people with a lot to offer.

[iris lily]

... For example, you are assuming that child-related expenses will stop once your kids are out of college. But is that just undergrad, or have you thought about helping them through grad school as well? What about helping your children with their weddings? Are you going to be in a place to tell them to pay for it themselves or to have a "budget" wedding or will you need to pay for a wedding that you can invite your $10MM boss to? Will you help them put a down payment on their own Westchester house? ...

Agreed, I thought that is was unrealistic to assume the children are out on their own. This is when offspring get REALLY expensive--weddings, non-beater cars because you want them to be safe, grad school so that they can compete in the overly educated world that they will be inheriting, and then--oh yeah, their kids.

Hey, OP, I am a former hard core simple living girl who has been spending money like crazy (well, relatively speaking) for the past ten years. I am looking at retirement and want to live on that low salary for one year before I cut the cord on employment. I am both wary of my ability to cut back and excited about it,  "excited" because I feel that I'm getting back to my core values.

Frugality is a muscle that must be exercised.

You may think that because you and spouse lived a bare bones existence in NYC that you can scale back at will. And you CAN scale back because you know how! It's just that this time around you have children. They are expensive little beasts.  :)  And the scaling back will take more practice and will be more difficult. Don't underestimate how hard that will be to do. Good luck.

[szmaine]

It has been an interesting experience sharing our life with you all - mixed feelings on what I could have done differently in hindsight to make things more pleasant, but this is really a great community of people with a lot to offer.

I haven't (yet) posted an expose of my finances for mustachian review, but have read many...if you had you'd realize what the method was...a tear down of your Un-necessary expenses, which is what you got in between the jigs and the reels. You spent a lot of time saying no way and explaining why. That's why peeps started to wonder the point of the post. If you'd read some other posts like this you'd have realized that was SOP.

[Nords]

Wow.  This reminds me of "Wilton Knight" over on Early-Retirement.org: 
http://www.early-retirement.org/forums/f28/realistic-income-question-thinking-of-retiring-59907.html

Compared to the challenge of Westchester, I guess Bob Clyatt (of "Work Less, Live More") and Brewer are feeling like they dodged an entire machine-gun belt full of bullets.  Bob seems to have figured out how to live the ER life in Rye, and Brewer seems to have figured out how to escape the Wall Street finance golden cage...

The key to affording the things you value is the willingness to keep working to afford them.

I hear a lot of people saying "I want my kids to have the things that I didn't have when I was growing up."  I understand the feeling, but beyond supplying Maslow's basics I suspect that it's vicariously selfish and possibly even disabling.  We adults had to struggle, save, and sacrifice to get the things that we want our kids to have... yet by handing those same possessions to our kids, we might be inadvertently robbing our kids of the internal motivation to get them for themselves. 

I'm pretty confident there's a line to be drawn, but I'm not sure where.

[Exflyboy]

Wow.  This reminds me of "Wilton Knight" over on Early-Retirement.org: 
http://www.early-retirement.org/forums/f28/realistic-income-question-thinking-of-retiring-59907.html



I hear a lot of people saying "I want my kids to have the things that I didn't have when I was growing up."  I understand the feeling, but beyond supplying Maslow's basics I suspect that it's vicariously selfish and possibly even disabling.  We adults had to struggle, save, and sacrifice to get the things that we want our kids to have... yet by handing those same possessions to our kids, we might be inadvertently robbing our kids of the internal motivation to get them for themselves. 

I'm pretty confident there's a line to be drawn, but I'm not sure where.

Amen!! As a former very poor child of the poor I wouldn't want to have missed the experience of "making it" by myself. Of course given the opportunity I would have gladly taken Mommy and Daddy's money, but I'd be poorer as a result.

Frank

[KBecks]

Dear Westchester Frugal,

I have read the original post and maybe the first couple pages of replies, but not all the pages.

It sounds like your big issue is how do you deal with the social pressures of being around people who are very showy with their money?  Hmm.  Do you think you can be a little more individual and frugal  and maybe strategic with your behavior so that you are less caught up in it?  Do you care a great deal about those appearances?

That's where I feel you may want to work on the psychology of being a little different and how tough you are.  Can you be appreciated for your talent, your charm, your other great qualities and not the stuff?  I think so, and I agree with the person who says screw them if they don't appreciate you for who you are -- that's not a friend.  It sounds like a lot of this is the "cost of entry" to circulate…. but….  are these really the people you need in your life?  Why?  You are doing fine for income.  Do you worry about getting left behind?

Saving money is fun.  I have been having a great time here and have made some small changes.  Change is fun and interesting and you will have a lot of opportunities to experiment.

The other thing that may be good for you is to visualize what you want when retired.  You are young.  You have a great opportunity to amass wealth and then be free to do anything. anything.  Practice living on less so you have security and peace of mind and tons of confidence for you and for your family for the future.

I hope that is useful.  Best wishes and don't let the people who are experiencing class envy get you off track.  You have a  life and you can manage it so it's efficient and satisfying in your own way.

[KBecks]

It sounds like you can afford your home and the kids' school, so that is good.  It seems OK to plan to stay put for family stability, and you both enjoy your work -- do you want to continue working while your kids are in elementary and high school?

I did not scrutinize your numbers, but are you monthly, cash flow positive?  What is your monthly savings rate %?   

The fun game for you may be to see how high you can get that monthly savings rate, and also -- trying to figure what you will need, monthly, in the future, when you want to retire early.

Simple living can be so fun.  Shop less and save more.  Enjoy your family! 

I am new and have not yet figured our savings rate, but we are working at bringing down the monthly expenses.  We are not big money people, but I cut our cleaning service, and we are doing OK without it.  I am working on energy efficiency, and mostly on shopping less, using what we have.  I also hope to cook more.

We don't know yet what we want our retirement to look like.  I have 3 kids in elementary school. 

It is hard to imagine the future, but what would you like to do with yourself when you are not working?  What would fulfill you? 

I did a life expectancy calculator the other day that said I may live to upper 80's or 90's.   That made me wonder, what the heck do I want to be when I really grow up?  I'm serious!  I've got a lot of time left and who do I want to be?   Not sure, but it's something to consider.

Best wishes to everybody.

[KBecks]

The last thing I want to comment on is the groceries of $1,200 a month.  You can totally do better than that.  I have 2 adults, 3 kids, and we eat for a lot less, but still have a pretty high grocery amount, but it's nowhere near $1,200.  We eat pretty simple, and cheap though.  Nothing too fancy.

When you said that it's easier to earn more a month than to cut expenses, just remember that when you want to dial down the work, then having lower expenses is going to be very helpful to you. 

MMM talks about valuing efficiency and I think that can appeal to you too (really to everyone);  you want to use your dollars to your greatest advantage -- knock out the waste.

I loved the suggestion from someone to take a little holiday from the country club and see if you miss it that much -- since it is on the radar for possible trimming anyway.

Have fun! 

[PeteD01]

So you live in Westchester. I got good friends living there and visit frequently. The place seems to mess with people's minds - good for you to have realized that something is not quite right.
The easiest thing would be to move somewhere else and start over, but that's probably impractical. Fortunately, the Westchester thing is all in the head. Now you only need a way to cut through the nonsense and clutter.

I recommend meditation. Thirty minutes every morning for six months. Now don't go and hire an interior designer to create the perfect meditation room. That would be the Westchester way and we don't want that. You can't buy this anyway.
You will have to give thirty minutes of your time, every day. It is actually much more difficult than it appears. But it is really essential.
You need to turn the table for half an hour out of twenty-four. You can still spend twenty-three and a half hours obsessing and dreaming about having it all but for the other thirty minutes you will watch your mind obsessing and dreaming about having it all.

I recommend a day trip to the Zen Mountain Monastery in Mt Tremper NY. On Sundays they have a service and they give you free instruction on how to meditate. You can pick up a cushion and mat at their store and you will be all set. You will also meet a bunch of people with a completely different perspective. I'm not trying to sell you religion here but it helps to know that there are people who are dead serious about the meditation thing when you try to sit on your own. And it's a nice weekend trip anyway.

I find it helpful to have good reading at hand during times of transition and here are some recommendations:

http://www.amazon.com/Mindfulness-Beginners-Reclaiming-Present-Moment--/dp/1604076585/ref=sr_1_4?ie=UTF8&qid=1395064686&sr=8-4&keywords=kabat-zinn+meditation

http://www.amazon.com/Stoicism-Art-Happiness-Relationships-Self-Help/dp/1444187104/ref=sr_1_1?ie=UTF8&qid=1395064879&sr=8-1&keywords=robertson+stoic

Cheers and good luck in taking your life back,
Peter

(Meditation is where ancient Eastern and Western philosophy most closely approach each other. Eastern philosophy has always been more closely associated with religion than Western philosophy. I do not mean to endorse any particular religion by recommending a visit to the Zen Mountain Monastery but I do think that it is appropriate to honor a tradition kept alive through the generations by honoring the living practitioners. In my particular case, I would file this under stoic gratitude. Stoicism, on the other hand, is woven into the fabric of Western culture and society and practitioners are often unaware of what influences them.)

[rocksinmyhead]

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)

"The kittens are in the bushes"?? I think the smugness broke Google Translate!

It took longer for him to tell us all to use Google translate than to just write "the perfect is the enemy of the good," which Mr. I've League knows full well is a common English colloquialism.

hahahaha I love you both.

Question to the posters in this thread:

It seems like this forum has a lot of mixed feelings on wealth at the level of the OP.  Do you all think that the kind of wealth described in this thread is a bad thing in and of itself?  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)?   

I'm not fazed by his stratospheric level of wealth, because I've known a lot of people with his means or more, including my aforementioned best friend. That being said, I place a high value on humility and simplicity, which he lacks. I'm also generally disgusted by his desire to pigeonhole his kids into the same way of life he has and his obsession with keeping up with his neighbors. He seems pretty shallow.

agreed. I don't give a fuck what extremely rich people do with their money, but I don't see the point in coming here to rub it in our faces and pretend like you're looking for some kind of advice.

the condescension and elitism in many of OP's posts is absolutely ridiculous. the only "interesting" people to hang out with are those who went to Ivies and send their kids to elite private schools? please. my social group includes people who work for NASA, people who do secret rocket science shit for the government, preschool teachers, people who didn't graduate college, single parents, restaurant managers, copy editors, people who run 100 mile races for fun... I love my friends and I am confident I am at least as happy with my life as you are with yours, but god I'm sure you'd find us really dull.

then again, I'm probably just too ignorant to know what I'm missing because although I got my MS at one of the best graduate programs in my field, it was... a public university. ew! good thing you can't catch my prole germs through the internet.

plus, this may be harsh but I think you might be misleading yourself about the values and expectations you're setting up for their kids. it's great that you do charity work, and thanks for your contribution (not being sarcastic, really, I think it is great... but also don't most rich people do this? I was under that impression, but my sample size of extremely rich friends and acquaintances is small). but I don't think that's the same thing as the type of "real world exposure" other posters have talked about. the fact that your kids "don't think you're rich" is extremely telling. they really might find it difficult to socialize with peers who didn't grow up extremely rich (but then, maybe you don't want them hanging out with those kids anyway considering the life path you have planned for them?! it's hard to tell).

One other side point: I did my grad degree at Stanford with a friend. She did the East Coast private prep school route with lots of stress, high achievement, competitions, etc. I went to above-mentioned average public high school, spent a ton of time hanging out with friends, took a year off to be an exchange student, and went to junior college before transferring to a 4-year school. In the end, we have the same grad degree from Stanford, work at the same company, make similar salaries, and live very comparable lives. You don't HAVE to send your kids to private school in order for them to be successful later on in life. Drive comes from within and is instilled by good parents.

this, totally!

This has been a really fascinating and enlightening thread.  WestChesterFrugal, may I ask what decisions you have made and what direction you are heading?

Things we have resolved to change immediately: sell the Mercedes (which would dramatically lower auto maintenance insurance by at least 50%), one big vacation a year (cutting vacation budget by 60%), trim landscaping by using lower cost providers and leaving things less 'manicured', cutting some of the kids' acticities and shopping (which is mainly kid related as well)

Groceries and utilities are already much lower on the current run rate vs previous 12m spending (which was listed in the OP)

Also the expenses will look much more reasonable once we sell the house when the tenants' lease ends next year (fingers crossed the housing mkt holds up until then)

Things that are under consideration in the medium to long term: country club membership (although we do get a lot of use out of it) and downsizing earlier than when the nest is empty (particularly if the grandparent no longer needs to stay with us) - I would give those areas a 30% chance of being acted on.  We are unlikely to pull kids from their current school (which they love) unless we can't pay the bills.

It has been an interesting experience sharing our life with you all - mixed feelings on what I could have done differently in hindsight to make things more pleasant, but this is really a great community of people with a lot to offer.

this is refreshing to hear. I'm glad you feel like you did get something out of this thread and are going to make some changes. not sure if you are really asking, but my advice for the future would be to try to keep in mind from the outset that there are intelligent, interesting people out there who do not fit into your Ivy/finance/7-figure-income-centric worldview. I think this could have prevented some of your more condescending comments (yes, they were there even before other people started getting sassy) that many, including myself, found offensive.

EDIT: fixed typo

[WageSlave]

I hear a lot of people saying "I want my kids to have the things that I didn't have when I was growing up."  I understand the feeling, but beyond supplying Maslow's basics I suspect that it's vicariously selfish and possibly even disabling.  We adults had to struggle, save, and sacrifice to get the things that we want our kids to have... yet by handing those same possessions to our kids, we might be inadvertently robbing our kids of the internal motivation to get them for themselves. 

The book The Millionaire Next Door spends a significant portion of the text exploring this idea.

My theory is that, in general, humans (of all ages) actually need to struggle a little bit in order to thrive.  It's the concept of muscle applied to all aspects of life: that which is not regularly challenged will atrophy.  It's common knowledge that if you lay around like a couch potato all day every day, you'll grow fat and weak; some basic level of physical activity will keep you from degrading; and actual training will make you stronger.  Thus, everyone is encouraged to get some minimum amount of exercise.  Why shouldn't the same hold true for other "strengths": intellectual, financial, emotional, spiritual, etc?  The modern world is downright cushy and brief, relative to the lengthy and difficult world in which we evolved.  As humans, we are "designed" to overcome adversity; I think our design is "undefined" for a non-challenging environment.

I think this problem is compounded by the emotional aspect of child-rearing.  I'm halfway through Dan Ariely's Predictably Irrational.  I just finished the section where he suggests that everyone is to some degree like Dr Jekyll and Mr Hyde.  His research supports the idea that people turn into "Mr Hyde" under "excited" states (he tested with sexual arousal, but applies the idea to all states of increased emotion).  I think this is somewhat intuitive: if we're being completely honest, who hasn't made a poor decision under circumstances that were not conducive to a cool, calm, rational mindset?

I think it's hard to keep that always-cool-headed mentality when raising kids; it's a terribly powerful emotional experience.  Everybody wants the best for their kids, but what is rational and what feels right aren't always the same.  Any parents here ever received parenting advice from non-parents, and walked a way a little miffed?

A simple example, I struggle with every day: my toddler keeps standing up in her high chair.  This sounds terrible, but the rational part of me wants her to fall so maybe she'll actually understand how dangerous it is, and stop doing it.  But the "dad" in me doesn't want her to come into any harm, so I'm constantly telling her to stop standing in her chair.  Timeouts, lectures and every other toddler disciplinary tool are ineffective.

[Carrie]

It probably needs its own topic, but when I say I want my kids to have it better than I did, I'm talking mostly about emotional health.  I was raised by a mentally ill mother, an emotionally absent (and also probably mentally ill) father, and while there were good times -- there were an awful lot of bullshit things that I had to deal with.

So for my kids, my husband and I are loving to each other (my parents despised each other, yet remained married through my youth), and we don't play mind games with our kids. 

I'm not as concerned that we provide our children with every materialistic whim.  As a matter of fact, we demonstrate through our own example, that we don't care what other people have or do or where they go.  Our kids, so far, aren't caught up in social status and the materialistic mindset (I've seen 7 year olds who are brand conscious and REFUSE to wear certain clothes because it's not the right label!!! WHAT THE HELL IS THAT?!).  Heck, our kid thinks we're rich because we bought him a $20 game he'd been wanting for Christmas.  We aren't planning to provide for their every desire in high school (there will either be intense academic pursuits and/or a part time job in the mix), we won't be buying them cars or fancy clothes.  College --- we'll chip in but will not be covering it 100%.  Plus, we'll bless them with the knowledge that they can pursue any interest they have and we will FULLY EMOTIONALLY SUPPORT THEM.  Even if that means they'd like to be hippy artists who live on less than their frugal parents.   I have a feeling, though, that my oldest will be an engineer or scientist.  My youngest seems to be leaning towards the culinary arts.

Sorry for the lame thread hijack. 

[MrsPete]

People make major life decisions out of necessity

Disagree.  I grew up in a home that was frugal out of necessity, but my husband and I have always had more than enough.  We have always saved far more than our similar-salaried friends, whereas we could have made much more spendy choices. 

I'd say we've made our decisions based upon thoughtful consideration and our own priorities for the future.

 

Yes, some never outgrow that desire. My brother wanted to be a firefighter. At 21...he's a firefighter EMT.

It seems to me that people who enter certain professions -- or, perhaps callings -- know early what they're going to do.  Teachers, preachers, nurses, soldiers seem to fall into this category.  On the other hand, few kids begin by saying, "I am going to be a web web designer!" 

I was a teacher when I was in elementary school.  I'd line my stuffed animals up and "play school".  I thought at the time that all kids did this; but, in retrospect, none of my siblings enjoyed that game.  Similarly, we all knew my oldest would do something medical from a young age; sure enough, she's in college now, studying exactly what I always knew she would.  Aside from a few weeks in middle school when her occupational goal was "rock star", she never waivered. 

This has been a really fascinating and enlightening thread.  WestChesterFrugal, may I ask what decisions you have made and what direction you are heading?

Things we have resolved to change immediately: sell the Mercedes (which would dramatically lower auto maintenance insurance by at least 50%), one big vacation a year (cutting vacation budget by 60%), trim landscaping by using lower cost providers and leaving things less 'manicured', cutting some of the kids' acticities and shopping (which is mainly kid related as well)

Groceries and utilities are already much lower on the current run rate vs previous 12m spending (which was listed in the OP)

Also the expenses will look much more reasonable once we sell the house when the tenants' lease ends next year (fingers crossed the housing mkt holds up until then)

Things that are under consideration in the medium to long term: country club membership (although we do get a lot of use out of it) and downsizing earlier than when the nest is empty (particularly if the grandparent no longer needs to stay with us) - I would give those areas a 30% chance of being acted on.  We are unlikely to pull kids from their current school (which they love) unless we can't pay the bills.

It has been an interesting experience sharing our life with you all - mixed feelings on what I could have done differently in hindsight to make things more pleasant, but this is really a great community of people with a lot to offer.

Not a bad start, but you could make more serious cuts, if you chose to do so. 

Agreed, I thought that is was unrealistic to assume the children are out on their own. This is when offspring get REALLY expensive--weddings, non-beater cars because you want them to be safe, grad school so that they can compete in the overly educated world that they will be inheriting, and then--oh yeah, their kids.

Yeah, I'm in that stage right now -- the "young adult children" stage, and it is expensive! 

In my limited experience, it's smart to tell them ahead of time what you will /won't pay for (that could mean giving them a dollar figure, or it could mean saying you'll pay for this item but not that item), and then stick to it. 

[rocksinmyhead]

Could we give them a low interest loan for a downpayment to buy an apartment when they first start working (assuming it made sense financially and they were committed to the area)?  Would we consider paying for their children's private school tuition (if they chose to send their kids to private schools) as a method of estate planning (paying school tuition is not considered a gift or taxable event)?  Yes those are considerations, but not obligations, and it would also be dependent on whether we felt like our kids were on the right path of financial independence and making wise decisions themselves (i.e. we aren't going to help them if they are frivolously spending, but if they are really trying to build wealth through hard work and savings we would be much more likely to be supportive).

this is a really good point/idea. all kids/humans are different, even those that are raised in the same family, so it's hard to know until they get there what level of help you want to provide.

[smalllife]

Could we give them a low interest loan for a downpayment to buy an apartment when they first start working (assuming it made sense financially and they were committed to the area)?  Would we consider paying for their children's private school tuition (if they chose to send their kids to private schools) as a method of estate planning (paying school tuition is not considered a gift or taxable event)?  Yes those are considerations, but not obligations, and it would also be dependent on whether we felt like our kids were on the right path of financial independence and making wise decisions themselves (i.e. we aren't going to help them if they are frivolously spending, but if they are really trying to build wealth through hard work and savings we would be much more likely to be supportive).

My parents did something along these lines for me, but it is easy to think about doing this only for responsible offspring and end up doing it regardless of the temperament and financial acuity of the children.  My parents' neighbors are subsidizing housing/food for their children, my parents are getting back extra principal payments and I still save on top of that.   They didn't teach me about money, I just sought never to spend as much as they did, have to work 50 hours a week, or have as extensive an effect on the environment and had to actively research where and how to live outside of their rich suburbia bubble - my learning took off from there.  Be careful what you wish for ;-)

[Abe]

It sounds like you are doing a good job keeping the kids' feet on earth. My parents emphasized the same things you are, and it has paid off for me. As long as they understand that the money didn't just come out of thin air, and appreciate the hard work needed to obtain it, they should be alright.  The kids I grew up with who didn't care about that annoying fact performed poorly, whereas those of us who did have been mostly successful.

[2527]

I think you are going to do really well.  I propose looking at expenses like this:  Am I spending this because it is what I value and it is giving me something I really want?  Am I spending this because it is the price of living in my social community?  If so, can I cut back without anybody really noticing or caring?  Do I have no idea why I am spending this, and I ought to curtail it dramatically?

You seem to be really well grounded about your kids.  Personally, I have no problem with paying for their college, giving them a downpayment on a house, whatever, really, anything.  They just need to understand that if they accept it from me, they are on the hook to do it for their kids. 

[Nords]

They will start working while in middle and high school, ranging from a manual labor (or menial labor for the daughter) jobs - to understand how hard working life can be if not well equipped/prepared- to internships in very esteemed professions sponsored by our friends (and of course we will do the same for their kids).

Here's a radical thought:  let your kids figure it out.  You don't even have to tell them to go get jobs... all you have to do is cut back their allowance.

And if your daughter wants to sling drywall at a construction site, then who knows-- maybe someday she'll want to study civil engineering or architecture.  My daughter and her friends are quite insulted by guys (and they're almost all guys) who say things like "or menial labor for the daughter".

In the good-hearted attempt to help your kids make good choices, it's a bad idea to make good choices for them.  The best way for anyone to learn how to make good choices is to have to live with a few bad choices in an environment where the bad choice won't actually kill them.  Your parenting support can supply the environment so that they can learn how to make their own choices-- instead of having to live with your idea of a "very esteemed profession".

[Fireman]

In the good-hearted attempt to help your kids make good choices, it's a bad idea to make good choices for them.  The best way for anyone to learn how to make good choices is to have to live with a few bad choices in an environment where the bad choice won't actually kill them.  Your parenting support can supply the environment so that they can learn how to make their own choices-- instead of having to live with your idea of a "very esteemed profession".

Additionally, give them buy-in and let their opinion matter.  If they feel valued, their values will reflect yours.

[expatartist]

@OP Very interesting idea - that the kids are truly on their own at 18, after 'having it all' as legal minors in your care. It really makes them responsible for their decisions leading up to university/adult years.

One caveat which you've probably already addressed in your planning: it can be difficult to get loans or income-based scholarships with parents who have high income. This is part of what delayed my education for a few years - I had to be 21 before my own (barely 5-figure income) would be counted for FAFSA etc - parents [understandably] didn't agree with my choice to study painting, so I was 100% on my own for everything during university.

Also, of course your kids will probably be fine/brilliant, but speaking as someone who works with high-income teenagers in a private school hothouse environment (ack! hormones! friends with lots of cash to throw around!) peer pressure begins to exert unpredictable influences, though it sounds like you're giving them a great foundation.

[desrever]

Know I'm late to this thread but I wanted to comment.

Having roughly the same income level and net assets as the OP, but at a smaller expenditure rate and less leverage, I apparently read the original post with a sympathetic view compared to most others here. If nothing else, it's been informative and entertaining to see what this forum might do to a poster in WF's position. "Country club, nanny, landscaping, private school" reads like an an alternate-reality CPI basket, but given how our bank account just seems to refill itself so long as the spouse and I both work, they're all purchases I could see us rationalizing in the future, especially once a kid is involved. At this income level, I believe that the mustachian attitude isn't about dollar opportunity costs -- foregoing lattes amounts to nothing -- but experiential opportunity costs, and the recognition that many purchases complicate your life unnecessarily and do not provide a net gain in happiness.

So some questions for WestchesterFrugal:

(1) I'm really curious how the cost/benefit logic went to justify your original membership in the country club. I recently started playing golf, but I am accustomed so far playing at super cheap muni courses for like $1 per hole. For myself I would have found the six figure initiation plus 25K/year indefinitely balkingly expensive -- how did you figure this was a worthwhile expense? To me it just seems like a very expensive way to achieve the worthy goals of hitting balls with sticks and finding community. And are these fees at all proportional to the cost of maintaining the club and its land use, or is it profit for some owner? Hypothetically, if you could today cancel and get that money back, would you? What's the deal?

(2) Disregarding what I said in (1), can I come play on your course? :)

(3) Why do you work? Is it about the money? Would you do your current job at 1/4 the salary? Would you work double the hours for double the salary? Would you work half as many hours for half the salary? Is there a level of personal wealth at which working your job would no longer make sense? As you said earlier:

Lastly, at the end of one's life the assets accumulated over time will ultimately go to three areas: heirs, charities and the government.

This is true of one's assets but not of one's time. Notwithstanding the difficulty of knowing what one's lifetime goals are, if one already has enough assets to achieve one's lifetime goals, additional earnings are just funding one of those three buckets. From your other posts it sounds like you aren't interested in spoiling your children, nor are you interested in gifting to the government. So is your job intrinsically interesting, rewarding, and beneficial enough to continue spending your time on it, and giving your pay to charity? If your firm were a non-profit, would you volunteer there (haha)?

(4) Do you ride your bike?

[Jamesqf]

...the recognition that many purchases complicate your life unnecessarily and do not provide a net gain in happiness.

Exactly!  And then there's the time thing: we alll get the same number of hours, so the choice is between spending those hours doing high-status but not really pleasurable things, or less expensive, more pleasure alternatives.

I recently started playing golf...

However, this seems to contradict the point above.  Surely you can think of more cost-effective ways to have fun, even playing at the cheaper courses :-)

[iris lily]

We are using the template we experienced ourselves (which makes us de facto experts having lived it and survived/thrived): once the kids are 18 they are on their own.

woah. That puts a whole 'nother spin on things. Fascinating!

So let me ask you this: will you provide the middle class fall back, the parental home if they need it? I mean can they stay with you and have an expectation of something to eat? Can they stash their "stuff" somewhere your property? I think this is what separates middle class kids from their poor friends, the safety net of always being able to go "home."

 In an idle moment I tallied up what my graduate degree would cost in today's dollars. I lived in a dorm and needed to crash somewhere during breaks.  You would probably say that dorms are expensive, but for me, not working, living the dorm life where all is taken care of and going straight through carrying full academic loads was the best way to get the damned degree quickly.

Man, now I'm thinking that you guys are kinda severe with the kid plan.  :) But that's ok, just make certain that your children understand what happens when they are 18. I can't imagine that their peers will be in that situation.

[desrever]

I recently started playing golf...

However, this seems to contradict the point above.  Surely you can think of more cost-effective ways to have fun, even playing at the cheaper courses :-)

I was pretty surprised how delightful it is to hit a ball repeatedly with a stick, and make it go up in the air. If I tried to do this for free, say in the park, I think I'd get ticketed. I pay $8/game for a 9-hole par three, walking distance from my house. I use clubs from the 1980's that I inherited from my grandfather (this inheritance is what caused me to start playing in the first place). Our course allows BYOB refreshment. We find enough balls on the course to keep us supplied. The money goes to the city parks department. I am debating how far I want to take this hobby; it's obvious that it gets expensive fast, and the airs of monocled elitism surrounding it are pretty off-putting to me. If I'm on a slippery slope to country club membership, I'd better stop now -- understanding which is one of the reasons I asked for the backstory behind WestchesterFrugal's membership.

[ZiziPB]

We are using the template we experienced ourselves (which makes us de facto experts having lived it and survived/thrived): once the kids are 18 they are on their own.

But didn't you say in your first post that you are planning to pay for their college education?  So how will this work?  And mind you, I don't think there is anything wrong with paying for your kids' college degrees.  I am doing that currently because I have the means to do it (however, I would not incur debt to finance my kids college). 

But I'm curious of how you think the logistics of this will work.  Will you pay for tuition only and they will be responsible for room and board?  What about travel expenses when they come to visit you?  Will they be spending their holidays/vacations with you?  Will you pay for their medical expenses? 

[Nords]

They will start working while in middle and high school, ranging from a manual labor (or menial labor for the daughter) jobs - to understand how hard working life can be if not well equipped/prepared- to internships in very esteemed professions sponsored by our friends (and of course we will do the same for their kids).

Here's a radical thought:  let your kids figure it out.  You don't even have to tell them to go get jobs... all you have to do is cut back their allowance.

And if your daughter wants to sling drywall at a construction site, then who knows-- maybe someday she'll want to study civil engineering or architecture.  My daughter and her friends are quite insulted by guys (and they're almost all guys) who say things like "or menial labor for the daughter".

In the good-hearted attempt to help your kids make good choices, it's a bad idea to make good choices for them.  The best way for anyone to learn how to make good choices is to have to live with a few bad choices in an environment where the bad choice won't actually kill them.  Your parenting support can supply the environment so that they can learn how to make their own choices-- instead of having to live with your idea of a "very esteemed profession".

All fair comments

We simply think it is wiser for them to learn from others' mistakes instead of their own.  There are plenty of opportunities for them to make bad decisions in other areas and suffer the consequences - if they can avoid simple mistakes that they don't need to make they will be way ahead.

I've presented my thoughts, but I'm done here.  I'll leave you with a final question to ponder:  when you were the age of your kids, how would you have responded to that "learn from others' mistakes" dictat if it was directed at you by your parents?

You have a good life now.

[brewer12345]

I recently started playing golf...

However, this seems to contradict the point above.  Surely you can think of more cost-effective ways to have fun, even playing at the cheaper courses :-)

I was pretty surprised how delightful it is to hit a ball repeatedly with a stick, and make it go up in the air. If I tried to do this for free, say in the park, I think I'd get ticketed. I pay $8/game for a 9-hole par three, walking distance from my house. I use clubs from the 1980's that I inherited from my grandfather (this inheritance is what caused me to start playing in the first place). Our course allows BYOB refreshment. We find enough balls on the course to keep us supplied. The money goes to the city parks department. I am debating how far I want to take this hobby; it's obvious that it gets expensive fast, and the airs of monocled elitism surrounding it are pretty off-putting to me. If I'm on a slippery slope to country club membership, I'd better stop now -- understanding which is one of the reasons I asked for the backstory behind WestchesterFrugal's membership.

Eh, stick to plebian settings and you will be fine.

I like my redneck hobbies of fishing and hunting.  No pressure to go upscale and I can have fun by myself alone or in a group.

[MrsPete]

If we decide to give them a backstop or safety net we won't tell them in advance.

This is a huge mistake.  Your kids' first few years out on their own will be tough enough without Mom and Dad being unclear on what resources they're willing to provide vs. surprises.  And if you say, "I'll pay your college tuition, but you're on your own for living expenses." and then you cave and decide that you'll pay for the dorm and a car . . . you'll leave them thinking that if they beg hard enough you might pay for a spring break trip.  Or after graduation, even if you've told them that you're not paying their living expenses, if you provide that "safety net" and pay the rent one month, it'll make them think you might do it again in the future.   

Instead, tell them what you are willing to pay towards college and in their first years on their own.  Whether you intend it to be generous or skimpy, tell them truthfully.  Make it clear that -- emergencies or illnesses aside -- this is the plan, and then stick to it.  The time to start this conversation is about the time they start high school.  At that point, they're ready to consider college expenses, and that's when grades start to matter. 

We told our girls the following: 
- We will pay for four years (8 semesters, not summer school) at a state university; by that, we mean tuition and fees, dorm and meal plan.  If they choose a private school, they must pay the difference in cost.  If they choose an apartment, they must pay the difference in cost. 
- We expect them to pay for books and supplies, clothing, and extras. 
- We will provide transportation to and from school as often as they want to come home. 
- We will not pay for private school tuition, sorority expenses, meals out, or other "above and beyond" items.  We will buy basic dorm supplies (i.e., sheets and a lamp), but we will not provide fancy-schmancy decorations as if it's a forever home. 
- We will keep them on our cell phone plan and health insurance plan throughout college.  After college, if it's in everyone's financial interest to keep them on these plans (i.e., a $10/month phone instead of a whole new plan), they can pay their portion of the bill. 
- They're always welcome to come home.  Forever.  Doesn't mean we'll buy them a car or give them money to go out, but they will always, always have a bedroom and a meal at our house. 
- They're always welcome to take part in family vacations.  Forever. 

When we talked about these things in high school, our oldest thought we were being stingy.  She saw her friends getting their own cars, SmartPhones and so forth.  Now, as a college sophomore, she gets it.  She constantly thanks us for seeing "the big picture" and she fully understands that it's better to graduate debt-free than to have had a car at 16.  She's very frugal with her money.  If we can do as well with our youngest, I'll be thrilled. 

And a large part of her success is that she knew EXACTLY where we stood on all things financial.  She could "plan around us".

But didn't you say in your first post that you are planning to pay for their college education?  So how will this work?  And mind you, I don't think there is anything wrong with paying for your kids' college degrees.  I am doing that currently because I have the means to do it (however, I would not incur debt to finance my kids college). 

I did think that was a priority for you.

[Fireman]

@ Mrs. Pete:  no kids yet but I wanted to +1 your approach to college and finances for your children.  Setting expectations at the beginning prevents confusion and hurt feelings.

[Carrie]

Mrs. Pete, I love how you've handled this, and I can see doing something similar with my own kids.

My parents weren't clear at all -- they completely covered my older sibling's (new) car, insurance, undergrad, grad, medical insurance/expenses until marriage, etc., but told me at 18 "good luck with all that." (I had been paying my own car/car insurance since I turned 16.)  Parents didn't really explain, other than a vague "you're more able to take care of that stuff than your sibling." 
I moved out, got married young (which actually was a very good thing -- still going strong 19 years later), and never asked them for a dime since then.  It has taken years to not be hurt over this.  If I had known what to expect prior to enrolling in college, that would have been very helpful!! 

[KBecks]

I was just about to say the same thing -- it's great to have a game plan for what you will do for your kids college education -- but, who knows what life will be like that far away?  I hope to do x, y and z for my kids, if we can.   If my kids need X, Q and T instead, then we'll see what we can do.  It will be interesting and fun to see them grow as people and help them make their choices.

Even decisions like whether my kids will work in high school are up in the air.  I think it is a great idea, but it is also possible that in a few years, I might feel like they *need* to focus on school 100%.  My oldest was just diagnosed with ADHD.  A job might be great for him or it might  be disaster.  We'll see how it goes and also see what he thinks about it too. 

I expect they will be good kids, get good grades and stay away from drugs and alcohol, be active in school and church.  That's the baseline at my house.

This has really morphed into a big parenting discussion. Nothing wrong with that, but I don't know if Westchester Fugal is getting anywhere on  the family finances and savings rate / savings goals / retirement plans.

[KBecks]

Mrs. Pete, I love how you've handled this, and I can see doing something similar with my own kids.

My parents weren't clear at all -- they completely covered my older sibling's (new) car, insurance, undergrad, grad, medical insurance/expenses until marriage, etc., but told me at 18 "good luck with all that." (I had been paying my own car/car insurance since I turned 16.)  Parents didn't really explain, other than a vague "you're more able to take care of that stuff than your sibling." 
I moved out, got married young (which actually was a very good thing -- still going strong 19 years later), and never asked them for a dime since then.  It has taken years to not be hurt over this.  If I had known what to expect prior to enrolling in college, that would have been very helpful!!

Thanks for sharing that experience.  I have to be careful about balancing what we do with each of 3 kids.  Each kids' needs will be different. I don't know what will be "fair". But I don't want to run out of $$ either.  We will probably split the pot between the 3 kids as DS#1 reaches college-age, but I might also reserve what I give to them… it all depends on what our situation is and what their goals are.

[quilter]

Thanks for sharing that experience.  I have to be careful about balancing what we do with each of 3 kids.  Each kids' needs will be different. I don't know what will be "fair". But I don't want to run out of $$ either.  We will probably split the pot between the 3 kids as DS#1 reaches college-age, but I might also reserve what I give to them… it all depends on what our situation is and what their goals are.

I was totally on my own at 18 from foster care. DH on the other hand had a sister who was always in a crisis with money. He was always very responsible. Fast forward fourty years and he is still the responsible one, she is still borrowing money from mom, borrowing the car, expecting presents etc. my favorite is hearing her present a problem like " I don't know how we are going to afford to pay our heating bill" with tears in her eyes then mom offers to pay it. In the meantime she continues to buy junk and eat out. It is very easy to create an economic parasite who feels entitled. I don't know how she will manage when mom is gone.   

With our kids we did similar to the mrs Pete method of education expenses.  Wanted to include when they got married we offered x dollars. They could use it towards whatever they wanted.

[happyfeet]

Mrs. Pete. Great Post.  That's how we raised our two kids.  The last one is graduating college(4 years) with a great job lined up.  They both really appreciated a paid for college education along the same lines you laid out for your children. And they are always welcome here anytime and I am thrilled to cook for them!

Very grateful.

As a side note - son tells me most of his HS friends are heading back to college for the fifth year - they call it the "victory lap" - kinda sad as they are racking up student loan debt.

[windawake]

@Mrs. Pete - that's a very similar plan to what my parents did for me. I really appreciated how upfront they were with me about costs. They told me they'd pay for the equivalent of 4 years at our local state university. That was one of the big reasons why I decided to go there. And because I wanted to study abroad in a program that was 2x as expensive as a normal semester, I offset it by graduating a semester early. My dad put a very helpful spreadsheet together for me showing the expenses they would pay extrapolated out over the four years.

I'm so grateful to have graduated without debt. Their strategy also allowed me to make good financial choices. Some of my friends went to private colleges or lived in fancy apartments; it made me feel good to know that my choices were contributing to my financial well being.

[Daisy]

This discussion has been an eye-opening exercise for me. Whether the OP is a troll or not is irrelevant to me. The lifestyle he/she is articulating seems so over-the-top and it is interesting to peer into this world of the super-rich Wall Street crowd.

What I take from this example is:

1. Some people in our society make an obscene amount of money. Of course, in our market-driven economy that is all fair and good. But I do question why someone in the financial industry should make so much money. It makes me want to rethink my relationship with certain financial institutions and where I am directing my hard-earned money to if it is funding these extravagant lifestyles. I guess this is why opting for lower-cost investment vehicles makes a lot of sense. I am voting with my money on which types of institutions/philosophies I am supporting. I don't mind business owners and people actually making stuff (ala Steve Jobs) making large amounts of money because in my mind they are contributing a lot to society and have made our world a better and more interesting place.

2. Some people get too invested in apparently doing the best for their children by sending them to pricey private schools for the wrong reasons. I work in technology alongside people from all types of universities. My brother also works in this field. He is sending his children to a pricey private school which he can barely afford so that his kids can go to an Ivy League university. I brought up the issue with him on how those we work with in our fields don't necessarily have these fancy Ivy League degrees and the pricey private school may not be necessary, especially since he seems to imply they can't really afford it. It's sad to me because his kids are very talented and would thrive almost anywhere, but he is surrounding them with peers that don't live the same lifestyle they do. My nephew mentioned this to me. I know my brother is doing this out of love for his children and wanting the best for them, but I still question the choices they make.

[MrsPete]

General responses to a number of posts:

- I'm glad several people found my discussion of managing college expenses helpful.  It's working well for us, and, unlike many of the people on this thread, we're already in the college years with our kids. 

- For those of you whose kids are still young, I agree that you might not know just what you'll be able /willing to pay in future years.  When my kids were younger, I didn't know we'd be doing this well financially -- I didn't think we'd be able to pay as much as we are -- and I didn't know what type of students my girls would turn out to be.  If they were slackers or irresponsible, I would've told them I'm very willing to pay for community college.  Regardless, I strongly suggest that you determine what you're willing to do by around the time your kids start high school.  By that point you'll have a good handle on your capabilities (and theirs!).

- I didn't say this in my previous post, but when we told our girls what we were willing to pay for college, we also made it very clear that we had expectations of them as well.  We expected good grades in high school, and progression towards graduation in college.  If they were getting into trouble, breaking rules, or getting into drugs, we would not be opening our wallets to pay for college.  I'm very glad to say that they've both grown into wonderful young ladies, who have exceeded our expectations and have made us proud. 

- It's tough enough for young adults to juggle all the moving parts that are college.  It's a huge favor for parents to be a stable influence at that point in their lives.  Even if you're not able to pay as much as you (and they) would hope, tell them straight up what you can do.  Even if it's just, "We can't pay anything, but you're welcome to live here rent free as long as you're a student, and I'll keep paying your car insurance while you attend the community college", let them know what you can do. 

- Justifying an expensive club membership by saying you get a discount on luxury items is just that:  Justification.  Or rationalization, if you prefer.  The analogy about roasting your own duck is spot on. 

[brewer12345]

I think you're missing the point of mustachianism and what we're trying to accomplish here.

The goal isn't to save a bit on duck a l'orange by eating at the country club, it's to stop being so lazy and helpless and roast your own duck.

The fact that the country club pool is cheaper than having your own is irrelevant when there's a gorgeous public beach in Rye at your disposal. Ditto the golf course.

The fact that your expensive frivolities are marginally less  expensive than other frivolities doesn't make them magically virtuous. They're still silly and wasteful.

Would you be interested in joining our club???

Depends.  Will they let me hunt squirrels on the golf course?

[fuzzhead1506]

My advice:

Use the country club or your 11 figure boss to your advantage these are things that, I imagine, very few people in our community have access to.  Get yourself a 10% raise (in addition to the extra money that is soon coming your way - I think that is what I gathered) either by hob-nobbing with your buddies at the CC or ask for better compensation at your current gig. 

THEN don't succumb to more lifestyle creep - bank every bit of the stuff that you earn on top of this.  Sounds like you are currently super happy at your current level of spending.  This would both be a lot easier than scaling down and would get you FIRE'd earlier.  So, sure it is possible to have what you currently have and still retire early, but the efforts you have suggested are baby steps - I hate to sound like a broken record for the community, but I envision that baby steps aren't gonna get you there on your timeline.

While the spending category won't be tackled (one of the pillars of what is preached here, and probably why the OP has been attacked), savings will be tackled with this method (which is prolly the most important piece of getting to retirement) - eh? =)

Because I know *everyone* has read the Simple Math post!!

[arebelspy]

I think you're missing the point of mustachianism and what we're trying to accomplish here.

The goal isn't to save a bit on duck a l'orange by eating at the country club, it's to stop being so lazy and helpless and roast your own duck.

The fact that the country club pool is cheaper than having your own is irrelevant when there's a gorgeous public beach in Rye at your disposal. Ditto the golf course.

The fact that your expensive frivolities are marginally less  expensive than other frivolities doesn't make them magically virtuous. They're still silly and wasteful.

Would you be interested in joining our club???

Depends.  Will they let me hunt squirrels on the golf course?

"In the immortal words of Jean Paul Sartre 'Au revoir, gopher'"

We can do that.  We don't even have to have a reason.

[anisotropy]

My advice:

Use the country club or your 11 figure boss to your advantage these are things that, I imagine, very few people in our community have access to.  Get yourself a 10% raise (in addition to the extra money that is soon coming your way - I think that is what I gathered) either by hob-nobbing with your buddies at the CC or ask for better compensation at your current gig. 

THEN don't succumb to more lifestyle creep - bank every bit of the stuff that you earn on top of this.  Sounds like you are currently super happy at your current level of spending.  This would both be a lot easier than scaling down and would get you FIRE'd earlier.  So, sure it is possible to have what you currently have and still retire early, but the efforts you have suggested are baby steps - I hate to sound like a broken record for the community, but I envision that baby steps aren't gonna get you there on your timeline.

While the spending category won't be tackled (one of the pillars of what is preached here, and probably why the OP has been attacked), savings will be tackled with this method (which is prolly the most important piece of getting to retirement) - eh? =)

Because I know *everyone* has read the Simple Math post!!

Thanks fuzzhead1506

So refreshing to actually get a helpful comment instead of the sanctimonious holier than thou vitriol

hey! I gave helpful comment too! I demand to be recognized and praised as well !