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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: saniokca on April 23, 2013, 09:50:18 PM

Title: To bust or not to bust - that is the question
Post by: saniokca on April 23, 2013, 09:50:18 PM
Hello MMM readers,

First I would like to say that I really enjoy the blog - I started recently from the beginning and caught up to March 2012!

If you follow the news closely enough, you will find that my profession was named the best in 2013. I am not going to go into details about how wrong the article is, but will only tell you that someone was smoking something really potent when they came up with that list!

What I will say is that our family (of two, we're both around 30) income is quite high. I'm making about 90k gross (52k net due to stock plan, pension and my favorite - Canadian taxes) and my wife makes $50/hr. We live on about $50k/yr (I know, not enough "badass" for people here). We don't have a car or a house and are not planning to have either.

Our current savings are about $300k and (if all goes well) we should be able to save another $90k by the end of the year (it's so high because a bunch of it goes into pre-tax accounts). Our plan is to retire before 45 and with my great actuarial skills, if I assume 50k/yr savings rate on average and a 4% return, we should have over 1.5M + some pension at that time.

Here's the issue - I could quite easily increase my income to $100k within a year if I pass a few of those dreaded 6hr exams (that the article conveniently failed to mention). This however would require me to give up time with my beautiful wife and other very important things like laying in the sun or reading interesting books. With such a short career plan do you think it makes sense to bust my ass and get it done asap or should I take my sweet time to do it.

Let me know if you think that I'm just a lazy ass...


P.S. here's the article (did I say how high the writer must've been?):
Title: Re: To bust or not to bust - that is the question
Post by: pbkmaine on April 23, 2013, 11:25:34 PM
Yes, pass the exams. I say this as a CPA, so I understand how hard they are. It not only increases your salary now, but may gain you entry to lucrative part-time work when you are "retired".  You do not have to study in a dark room, you know. You can study on the bus to work, on the beach, sitting on the sofa next to your wife as she watches a TV show you are only half interested in. 
Title: Re: To bust or not to bust - that is the question
Post by: marty998 on April 24, 2013, 01:48:07 AM
$100k for a qualified actuary sounds low.

Bust your arse and do it. If you get a proper decent paying actuarial job you could retire with $1.5m in 6-8 years.

As a note of disclosure I started the actuarial degree at uni but didn't get very far. Passed the first course (only just) but then realised I wasn't going to be part of the 2% of wide eyed starters that ultimately qualify.

I thought it was a joke when the lecturer said "there's 200 of you here and only 4 of you will get fully qualified". We were 200 of some of the brightest mathematical minds in the country, but he was right.

Its a bloody tough career path to get into, but once you do you are set for life.
Title: Re: To bust or not to bust - that is the question
Post by: trammatic on April 24, 2013, 05:12:12 AM
Welcome to the boards!  As someone who was in your shoes 10 years ago, I can tell you what I did...I stopped the exams.  I think you need to figure out what kind of retirement you're interested in.  Do you want the MMM type of low-consumption badass retirement? Or do you want to bankroll trips, golf, expensive hobbies, etc?  If you're going the MMM route, you'll have 400k saved up by the end of the year, and the end is in sight (perhaps just 3 or 4 more years).  If your passion is elsewhere, then you're not going to want/need to work for only money anymore, and you'll drop that profession faster than a soccer mom drops her paycheck at Target!

Personally, I've found great success using the business skills I picked up working as an actuary along with the analytical skills to leverage myself as a badass business analyst.  If you're one "lesser" actuary in a group of 60, you'll be below average.  If you're the only analytical one in a group of policy makers, then you're the superstar.

As for the CPA above, actuaries know that CPA stands for "Can't Pass actuarial Exams". :)  Seriously, these things are brutal.  The pass rate is somewhere below 40%, and the societies recommend at least 400 hours of study time per sitting (twice a year).  That's just shy of another 40 hour per week job.
Title: Re: To bust or not to bust - that is the question
Post by: saniokca on April 24, 2013, 08:59:43 AM
Thank you for the responses! Have to say that I expected a punch in the face :)

A few things to add:
1) About a year ago I became debt free (just before marriage) and since then have been piling up money pretty quickly. While I was in debt and buying toys (30k car, iPhones, vacations) I just assumed that I need to work like a maniac and get those exams to be able to afford bigger toys. Before I sobered up I was saving on an M3... Now that I save over 50% of my pay the question is do I hammer on? Why bother killing myself when I can just coast along?

2) the difficult thing about passing is not the crazy math anymore - these exams I already passed. Now it's time for memorization. That means that exams are easier conceptually but a bitch due to time commitment. Add to it that I work in consulting and you get 50 hour weeks plus study time. I should say that I am quite good at what I do and do enjoy it when it's not taking up my weekends. That is why I am leaning towards a longer (10-15 yrs) but more enjoyable vs shorter (6-8) but stressful path.

3) I never said that I will stop, just get "lazier" by devoting more time for family, sports and reading. 

Thanks for the advice! Although it might look like I've made my mind it's not the case - I really am on the fence...
Title: Re: To bust or not to bust - that is the question
Post by: saniokca on October 06, 2016, 08:15:49 AM
Wow - time flies! I haven't visited MMM forums since my last post.

Since then I passed all the American exams/requirements and only have one Canadian exam left.

Also, we managed to increase our net worth to about 900k! Our baby girl was born in May and due to the savings we've amassed I decided to take a 9-month parental leave - my wife and I were hesitant at first but now we can't imagine me going back to work :).

The savings are all liquid and diversified reasonably well. We rent because the real estate prices in Canada are absolutely insane. For example my rent $1,550 per month. An identical apartment a few floors above is listed at 350k while monthly maintenance starting January will be $940/m! Add property taxes, things that need to be replaced (our washer just broke and there was a flood - all responsibility of the owner) and I can't grasp why this is a good idea.
Title: Re: To bust or not to bust - that is the question
Post by: boarder42 on October 06, 2016, 08:31:16 AM
nice good work. 900k NW and a 50k spending level... your a couple years from being done! congrats.
Title: Re: To bust or not to bust - that is the question
Post by: saniokca on December 11, 2019, 03:04:59 PM
Looks like I'm here once every few years... Usually because I go to the BIFL thread...
3 years later and we now have 2 kids, 1.3M in investments. We would be around 2M but my wife is a stay at home mom for about 3.5 years now and I took two parental leaves (total about 2 years away from work, will be going back to work in May)... While that did cost us a lot of money I have absolutely no regrets.

Oh yeah the spending level in 2019 is like 90k/year - we moved to a larger apartment (rent went up from 1.6k to 2.7k) bought lots of "BIFL" items, sent the older daughter to day care and (the horror!) financed a new car (it was a better deal than cash somehow and we could pay it off anytime).
Hopefully next year it'll go down to 60-70k...

P.S. I am fully qualified now.