Author Topic: Should I move or should I stay  (Read 2653 times)

brian313313

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Should I move or should I stay
« on: November 03, 2014, 05:22:18 PM »
I have been reading this site and MMM is always talking about being close to work. While I would love it, I'm not sure it makes financial sense in my case. I'd like it if some people could weigh in with opinions and maybe give me some other points of view.

Home Situation: My wife and I have a condo which is paid for. It's a 2 bedroom all freshly renovated with an excellent view in the near suburbs of Atlanta. It's 12 miles from my work and 12 from my wife's work, opposite directions. She commutes against traffic and I commute with traffic. I hate traffic, my wife doesn't mind much. I'm a consultant so my work location ends up changing. I am a contractor though so I do have choice of whether I take a project or not. I've tried biking and the motorists are too aggressive and hostile around here. More to the story but just leave it at biking from here is no longer an option. I don't need more exercise, my biggest hobby is endurance running and I bike too in the park nearby. I have the option of public transportation but it takes longer than driving. I work about 50 hours/week so time is important. It doesn't really save money either unless I get rid of the car. I'm not in favor of selling the car while I live here because the savings is not justified by the convenience.

Financial situation: I've been frugal all of my life. My wife is also at this point. I'd be retired by now but I took 4 years off from 2002-2006 to pursue higher education and burned through quite a bit of my savings during that time. Currently have no debt and are saving about 60% of income based on 401k + after tax savings. Current projections have us retiring in about 4.5 years. After retirement, we'll be moving to the country and buying or building a small home.


Option 1: Change nothing and wait for retirement.

Option 2: Move in-town and sell condo/car. We would try and rent a one bedroom but when going through stuff, we'd need at least a large 1 bedroom. The preference would be for a two bedroom similar in size to what we have but that's $1000/month more. My wife is not willing to give up the high-end look that we have so that puts us in the 1500-2000/month rent category for a 1BR.

Condo value after commissions: 90,000. Still hasn't quite recovered here since we had a lot of foreclosures.
Car resale value: 13,000. (Using 15,000 to make the math cleaner)
EDIT:
So 105,000*5%/12 ~= 430/month opportunity cost.
Current expense:
  Opportunity cost : 430
  Car                    : 350
  Condo direct cost: 350
  Est maintenance : 100
    Total: 1230

Proposed expense:
  Rent:                 : 1500-2000

Intangibles: Less space, less commute. Not near any parks if I go near my current place of work. Rent is even higher if I go to Midtown near a park which is nice for my biking/running but then I'd have a short commute. That could be done by bike though. There are enough cyclists in-town to make it safer.

Opinions and suggestions regarding the point in question are appreciated.

Thanks.

« Last Edit: November 04, 2014, 11:39:22 AM by brian313313 »

waltworks

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Re: Should I move or should I stay
« Reply #1 on: November 03, 2014, 06:20:11 PM »
4.5 years out from FIRE? I'd be looking at quality of life rather than straight financials here, since a few hundred bucks per month either way isn't going to make or break you. Where would you rather live? Pick, then live there.

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jennifers

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Re: Should I move or should I stay
« Reply #2 on: November 03, 2014, 08:27:11 PM »
It doesn't sound like moving would save much money and you seem to like where you live now.  I think you should stay where you are especially if you'd like to stay there after you retire.

brian313313

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Re: Should I move or should I stay
« Reply #3 on: November 04, 2014, 07:39:47 AM »
Thanks for the feedback. It's really not much of a financial decision but more figuring out the trade-offs. To keep the same space, it does become a financial decision. I'm a project person and like creating/building things. This would make an argument for a larger home rather than smaller. I can never stop myself from saying that extra room is costing how much per month...? However, I also hate commuting. This is what I refer to as a high-quality problem because either situation is good and I'm grateful to be at this stage of saving. Technically, I could do both for another $1000/month and still afford it. That delays retirement though and it's not worth it to me. I'm done with the cubicle farms as soon as I can.

Ricky

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Re: Should I move or should I stay
« Reply #4 on: November 04, 2014, 08:28:19 AM »
I think an 8% withdrawal rate is way too optimistic. You'd have to meet or exceed that in actual returns to preserve capital. Plus you already have acknowledged that now is a bad time to sell. Things could change dramatically in 4 years.

I think your expenses in reality would go up. You'll still be tempted to rent a car on occasion and use the subway on occasion. Those are expenses you haven't figured. Also keep in mind that there will be more temptations for your wife since you will be more centrally located. As you said, you could probably turn down the temptations but do you think she could?

Something you might consider is a short term lease on your condo and try to keep the spread as low as possible between your income from that and your rent in town. That way you could test it out and see if your quality of life goes up dramatically, then you'd know whether the extra expense is really worth it.
« Last Edit: November 04, 2014, 08:37:10 AM by Ricky »

brian313313

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Re: Should I move or should I stay
« Reply #5 on: November 04, 2014, 11:37:26 AM »
8% is too high...I was not accounting for inflation. Thank you for catching that. My wife and I would not need to rent a car because we currently have two. We'd just be selling one. The extras are a possibility and even likely. The convenience of having restaurants all over would increase the temptation to eat out after a long day's work when tired.

On the flip side, I'm paid hourly and can usually work as many hours as I want. The reduced commute could be put into more hours. Not that I really want to, but the time is worth something.