Author Topic: Case Study: Single/full-time trying to move to contracting, build relationship.  (Read 2846 times)

neo von retorch

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Topic Title:
Marry and have children? Retire but start business/side projects?

Age:
35

Income:
Consultant - $80k Gross Annual, $55,800 Net Annual, $4650 Net Monthly (though paychecks are weekly... 4 or 5 per month)
Rent - roommate pays me $500 / month
(401k - $267/mo deduction, $67/mo match - not included in totals)

Total - $5150

Current expenses:
Mortgage $1225 (includes P&I, Tax, Insurance)
Electricity $140
Sewer/Trash $50
Internet / TV $130
Cell $50
Car Insurance $43
Car Maintenance $50
Gas $180 (30 mile daily commute)
Groceries $350
Motorcycle Insurance $18
Misc: $190 (lunches, gifts, maintenance, etc)

Total - $2426

Variable... home care expenses.
In the 7 years of owning a home I've replaced the Heat Pump, Water Heater and Roof, refinished the deck. Adds up to ~$12,000 or average ~$150/month

Expected ER expenses:
(... depends on goals)

Assets:
Home - $160,000-170,000 (estimated)
IRAs - $66,570
Investments - $29,600
Savings - $10,675

Liabilities:
Mortgage - $107,950 (3.375%)

Specific Question(s):
Short-term, I would like to sell the house and move much closer to work. An apartment would actually cost me a little more than my current housing arrangement. Less money, perhaps, but since 50% of my mortgage goes towards principal and I have a roommate paying in, it is actually more costly (greater contribution to negative net worth.) However, I would no longer have the stress and expense of home ownership! I could also get rid of the cable bill entirely. It would also be nice to take the equity from selling the home and invest it!

Mid-term, I would like to transition from full-time work to contract work and work on software projects as passion and eventual income.

Mid/long-term, I would like to build a family (if it works out with the right girl.)

I feel like it's hard to juggle the possibility of needing money in the mid-term to support a greatly reduced income while I pursue my projects and passions, not to mention the possibility that at some point I would be working with a partner to support a family. Should I just focus on getting to full FIRE status by buckling down and only focusing on work for now? I can't predict how relationships will go. It's not my number 1, 100% top priority to have children, but it's something I would prefer to do before I get particularly old... if it's possible. (Girls are not predictable!)

Conflict:
My current job, which I've only been at for four weeks, is just over 15 miles from home. The girl I've just started seeing lives 1 hr 45 minutes away. (While they are in the opposite direction, thanks to the turnpike, moving closer to work would not change that distance.)

I'm not ready to go out on my own. Many years ago, I did a lot of freelance projects, but I quickly pulled away from it when I bought a house. Even now, I find it difficult to balance work, home care, freelance and trying to build a relationship.

I don't know how the Mustachians feel about long-distance dating, what with our fancy gas guzzling cars, but I met someone I like who's smart with her money, and I'd like to pursue it. But right now I need to do well at my job, refresh my skills and make sure I'd be able to either attract my own clients or be able to land a well-paying job closer to the girl (if it comes to that, which would be a little ways off.) While we'd both like to be somewhat close to family when we'd start a family, we would be willing to compromise with somewhere 45-60 minutes in between, but we'd both need new jobs (or a clown car commute) to make that work.

Sometimes I don't know how people do it. I've read that the big stresses in life are buying/selling homes and cars, changing jobs, deaths and major relationship changes. I've just changed jobs and started a new relationship, and I'm trying to downsize my car, and it certainly is stressful. And obviously to make something like the above plan work, I'd be moving, changing jobs and moving in with someone all at once. How do you do it?! (And not freak out and lose a few years of life to stress!)
« Last Edit: July 14, 2014, 01:13:40 PM by neogodless »

nereo

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Re: Case Study: Preparing for potentially conflicting goals
« Reply #1 on: June 24, 2014, 04:55:43 PM »
Quote
Specific Question(s):
Short-term, I would like to sell the house and move much closer to work. An apartment would actually cost me a little more than my current housing arrangement. Less money, perhaps, but since 50% of my mortgage goes towards principal and I have a roommate paying in, it is actually more costly (greater contribution to negative net worth.) However, I would no longer have the stress and expense of home ownership! I could also get rid of the cable bill entirely. It would also be nice to take the equity from selling the home and invest it!
If home ownership is stressing you out, then selling and living closer to work might be a great solution for you. 
But my first question: could you rent out the entire house (covering the entire mortgage and building equity) while renting a place for yourself close to work?

Quote
Specific Question(s):
Mid-term, I would like to transition from full-time work to contract work and work on software projects as passion and eventual income.

Mid/long-term, I would like to build a family (if it works out with the right girl.)
sounds good to me :-)  As long as you can make enough to cover your expenses and still save I see no problem with either going to contract work and starting a family.

Quote
I feel like it's hard to juggle the possibility of needing money in the mid-term to support a greatly reduced income while I pursue my projects and passions, not to mention the possibility that at some point I would be working with a partner to support a family. Should I just focus on getting to full FIRE status by buckling down and only focusing on work for now? I can't predict how relationships will go. It's not my number 1, 100% top priority to have children, but it's something I would prefer to do before I get particularly old... if it's possible. (Girls are not predictable!)
Life isn't predictable.  You have some savings, but certainly not enough to retire now with your spending (which is modest).  I think you have enough of a cushion to switch to doing a job you actually like.

One observation: you seem torn between the idea of FIRE and the desire to work a different job.  Which is more important to you?  How much of a reduction would taking contract/freelance work be for you?


matchewed

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Re: Case Study: Preparing for potentially conflicting goals
« Reply #2 on: June 24, 2014, 05:09:03 PM »
What would you do if money weren't an issue? Would you pursue a career or build a family? That would probably be the answer you should pick.

Mrs. Frugalwoods

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Re: Case Study: Preparing for potentially conflicting goals
« Reply #3 on: June 24, 2014, 05:39:52 PM »
I don't think these things are necessarily exclusive--you could continue at your current job while pursuing side projects as well as a relationship. Hopefully the person you settle down with will share your goals, dreams, and outlook, such that you'll be working together to achieve FI, not at odds. So in that way, I think that a relationship and family could serve to support and augment your FI goals.

neo von retorch

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Re: Case Study: Preparing for big changes (job, home, relationships)
« Reply #4 on: June 25, 2014, 05:22:39 AM »
I've added a new section... conflict, which I think will clarify where my issues lie. Thanks for the feedback!

I suppose it's possible I could rent out the whole house and cover my expenses. I actually don't think that would be too hard. Interest + escrow + maintenance + trash/sewer would be in the range of $800 right now. I imagine I could rent the house for $1000-1200. If my current roommate decides to move out (likely to move to Virginia to join his girlfriend) then it would make a lot of sense for me to go that route. (Now the living floor of the home is fine, but the somewhat finished basement needs a lot of work. I'm not super handy, thus far...)

If money were no issue, I would focus on my passion for creating Software as a Service (SaaS) web applications based on ideas I have been developing over the past few years. I still feel like the "build a family" question is out of my hands! Sure - I'm seeing a girl now, and if things work out, we would likely build a family. But as a single 35 year old, I feel experience has taught me that you cannot predict how well relationships turn out!

Right now, I have almost no freelance clients and I'd basically have almost no income, at least initially. But I'd like to think that if I wasn't working full-time, I'd have the time to devote to my projects, my skillset and finding clients. (I would probably lean on my extensive physical social network as I have in the past, at least to get started.)

FIRE is important to me in the respect that I don't want to be working 8-5 in an office forever. I want to work on software under my own terms, and work on projects that interest me and let me master my craft.