Author Topic: What happens if you strike it rich?  (Read 50155 times)

Russ

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Re: What happens if you strike it rich?
« Reply #100 on: January 22, 2014, 09:17:44 AM »
Travel nearly constantly

And get a pool.

If you are traveling constantly, who's going to use the pool?

take the pool with you


dude

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Re: What happens if you strike it rich?
« Reply #101 on: January 22, 2014, 09:30:50 AM »
Nords wrote:

The lesson learned is that when you plan for success and focus on avoiding failure, then you're probably going to have to end up shifting your attention to dealing with success.

YES!  Loved the entire post, and also find it inspiring!  And yes, surfing is on that list of activities as well -- would love to spend 3 months a year down in Costa Rica.  Also love Thailand -- great rock climbing, good diving, cheap and delicious food.  Can't wait to go back and could totally see myself spending extended periods of time there as well.  In essence, I like the Go Curry Cracker couples' lifestyle of extended travel with chunks of time back home here and there, though with more "adventure" thrown in (i.e., climbing, surfing, snowboarding, diving, camping, backcountry hiking, etc.).

MgoSam

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Re: What happens if you strike it rich?
« Reply #102 on: January 22, 2014, 09:33:02 AM »
If some day I look at my Vanguard statement and see that an exceedingly large sum of money had been deposited into it without my knowledge I would likely gaggle with glee and then carry on as if nothing had happened.

For me, reaching FI isn't so much about retirement but having the ability to do so.

That said, should this happen I would spend a considerable amount of time on the weekend looking into fun things to do. For instance, I've always wanted to live in a foreign city and this will help this happen sooner.

Ottawa

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Re: What happens if you strike it rich?
« Reply #103 on: January 22, 2014, 10:05:28 AM »
Nords wrote:

The lesson learned is that when you plan for success and focus on avoiding failure, then you're probably going to have to end up shifting your attention to dealing with success.

YES!  Loved the entire post, and also find it inspiring!  And yes, surfing is on that list of activities as well -- would love to spend 3 months a year down in Costa Rica.  Also love Thailand -- great rock climbing, good diving, cheap and delicious food.  Can't wait to go back and could totally see myself spending extended periods of time there as well. In essence, I like the Go Curry Cracker couples' lifestyle of extended travel with chunks of time back home here and there, though with more "adventure" thrown in (i.e., climbing, surfing, snowboarding, diving, camping, backcountry hiking, etc.).

I also totally agree with Nords and your take on this

I have decided to start a topic launching off this idea here incorporating the challenges of doing this with a dependent: http://www.mrmoneymustache.com/forum/ask-a-mustachian/fire!-with-a-dependent!/

Cecil

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Re: What happens if you strike it rich?
« Reply #104 on: January 22, 2014, 02:03:31 PM »
I'll admit I only read the first page of this thread, but I didn't see this point brought up:

It's all a big tradeoff. I don't think in terms of money at all, but in terms of maximizing my happiness over the course of my life. A big part of that equation is the free time that comes with FIRE. That free time makes me happier than say eating out all the time.

I'll take "not working and making dinner at home" over "working until I'm 65 and eating at fancy restaurants every day". But that doesn't mean I wouldn't *like* to eat at fancy restaurants if I won the lottery.

So does that mean I'm sacrificing? Sure does! But only in the sense that I'm "sacrificing" by not eating all of the donuts on that table. As good as it would be to eat them all, I know I'll be happier in the long run if I don't.

Nords

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Re: What happens if you strike it rich?
« Reply #105 on: January 22, 2014, 02:11:41 PM »
What a great post Nords!  The kind one wants to print out for inspiration.
(My favorite part was how much he downplayed their charitable contributions, which anyone who reads the E-R.org forums regarding his wife's "job" with the Arizona Memorial is/was far from insignificant.)
Hope Nord's real life example helps explain what I meant when I'm arguing for having "enough" in FIRE.
The wife and I have had that exact conversation (about how we're not spending enough, should we buy X item or Y experience), with the same "meh, I'm pretty happy as-is" answer.
Thanks! 

We had to take that E-R.org thread down... one of the board members had their attention directed to it and they objected to the public nature of the discussion.  But while that thread was up, it rallied a lot of support from people who'd been in similar situations and gave us a lot of help.  Great networking.

I know that it seems like a hugely altruistic act to donate an executive salary to charity.  However my spouse had several critical motives for doing that, and it was pure self-interest.  The main lesson:  when you're FI, you can turn down money that nobody else in their right mind could imagine passing up. It's a powerful way to demonstrate your commitment, and it's also a strong hint to others that they should change their behavior.  She really set the standard.

Another lesson learned:  be very careful of volunteering at a non-profit.  It's great if you're ladling out soup at the homeless shelter or stocking shelves at the food bank, but it's quite another situation if you're on the board or the budget committee.  It's way too easy to get sucked up into a power vacuum when attrition takes its toll.  There are far too many risks of being asked to "step up" your commitment-- they're for very good reasons, but they also tend to be full-time jobs which add a lot of stress to your life.  I'd rather donate money than time, but donating money just doesn't seem to deliver the same endorphin jolt.  Not so far, anyway.

I had the same volunteering problem with a tiny non-profit where I served as Treasurer.  I enjoyed learning about all the paperwork and tax returns and regulations, but after my three-year term was up I couldn't find a relief.  The person we eventually found lasted less than a year before a health crisis took them off the job, and that's when we learned that nothing had been done for all those months.  I ended up being "Treasurer encore", fixed the problems, did a year of paperwork in a month, and ended up finally turning the job back over to the person who I'd taken the reins from over four years ago.  Then I ran away fast.

TomTX

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Re: What happens if you strike it rich?
« Reply #106 on: January 22, 2014, 04:13:37 PM »
An additional annual income of say $150,000 when you have already built a plan that kicks off $30,000 per year on a spend of say $27,000.

Hm. I'm not at FI today, but IF that happened with a $150k/year bonus....

1) Standard stuff. House paid off, college fund for the kid.

2) House upgrades. Pay someone to bring a couple more truckloads of good soil and finish leveling the front yard. Pay someone to properly seal every perforation in the attic, then foam the kneewall.  Pay someone to install a bathroom fan and replace the other one with nice ($200) Panasonic ones. Pay someone to redo the ducting properly. Oh, and Hardi sheathing on the shed to replace the wood that is starting to rot. May as well have the foam guy insulate in there too. Tint or solar screen some more windows.

The other house projects I would do myself - I just really dislike these. I'd do the blown insulation, painting and such that I just don't have the time to do yet (or not faster than projects get added to the list)

3) "New" car to replace the '95 Saturn with no AC and a very worn out engine (260k+ miles) Something with AC and more hauling capacity.
« Last Edit: January 22, 2014, 04:17:39 PM by TomTX »

Peter

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Re: What happens if you strike it rich?
« Reply #107 on: January 22, 2014, 04:20:00 PM »
I've said it on here before, but, I'm not entirely convinced that having a literal truck-load of money wouldn't be better than a simple life and MMM level spending.

I completely understand that having two BMWs, a McMansion, dinners out at chain restaurants twice a week, and expensive toys for your kids is not worth the 30-45 year career-slavery that it requires. Sustaining yourself on 20-40k/year and being able to quit your job after 5-15 years and live a life of freedom is infinitely more appealing.

But I still think that having multiple luxury properties, supercars, michellin dinners every night, yachts, gala invites, and plane tickets around the world for all your friends and family would probably be better than either the clown-car or MMM lifestyles.

If all of a sudden I ran into 20+ million, I think I would have to try out that lifestyle at least for a while to be sure.


NumberJohnny5

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Re: What happens if you strike it rich?
« Reply #108 on: January 22, 2014, 07:05:44 PM »
Ok, first off, we're not FI yet. But I think our lifestyle closely mimics what FIRE would look like, except with that pesky "gotta make money" thing getting in the way.

If we were to win the lottery, you bet our lifestyle is going to change. I'll get a front-loader washer, maybe even splurge on a dryer. Heck, ditch the whole rental we're in, and buy a house (we'd have to have major, major bucks to do that...as prices in Australia are just a weee bit higher than back home in the US). Make sure the place we're in actually has insulation. Kids may still share a room, but I'll have a separate room for working on computers/phones/other gadgets.

I'd buy a top of the line laptop, in the thousands range (and not just some budget Dell for a few hundred that has been on life support for the past couple years). Heck, get a high-end server while we're at it, instead of browsing ebay for ones that are a few years old (been eyeing an HP Proliant DL380 G6, gotta be G6 or above to have VT-D). Will also buy several Android phones, the newest iphone 5-6-whatever, iPad, etc. Tech is my weakness. I'm currently staying a generation or two behind (and can't justify the Apple tax at the moment).

Then I'd promptly leave most of that home while we go on a cruise for most of the year. No, I don't mean sailing...I mean cruising on a big ship that has mini-golf, theater, etc. Probably do an around-the-world cruise, making sure to hit Antarctica at some point.

I will buy an electric scooter that has decent range, and a good petrol scooter for longer trips (say, if I want to try to ride to/from Alaska and Tennessee; attempted it once, didn't get too far). Electric car would be a must.

And no, I'm not sure any of it would actually make me happier. But I guarantee I'd find out.

Nords

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Re: What happens if you strike it rich?
« Reply #109 on: January 22, 2014, 10:55:07 PM »
But I still think that having multiple luxury properties, supercars, michellin dinners every night, yachts, gala invites, and plane tickets around the world for all your friends and family would probably be better than either the clown-car or MMM lifestyles.
Instead of working for The Man, you'd be The Man.

Instead of managing too many things, you'd be managing too many people...

dragoncar

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Re: What happens if you strike it rich?
« Reply #110 on: January 22, 2014, 11:05:08 PM »
But I still think that having multiple luxury properties, supercars, michellin dinners every night, yachts, gala invites, and plane tickets around the world for all your friends and family would probably be better than either the clown-car or MMM lifestyles.
Instead of working for The Man, you'd be The Man.

Instead of managing too many things, you'd be managing too many people...

http://www.youtube.com/watch?v=jeWZhuzFMM8

edit for the lazy: http://www.youtube.com/watch?feature=player_detailpage&v=jeWZhuzFMM8#t=136s
« Last Edit: January 22, 2014, 11:09:36 PM by dragoncar »

spider1204

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Re: What happens if you strike it rich?
« Reply #111 on: January 22, 2014, 11:20:59 PM »
If I suddenly had way more money than I'd ever need, I'd definitely indulge in some more things.  I'm not really into frugality and minimalism so much for themselves, it's only because I value my free time and would like to spend less of it working.

-Pay for friends/family to fly out to see me when I'm traveling
-Take showers more often when I'm staying at Miguel's
-Rent an apartment when staying in a location for more than a month rather than staying in the car / campground
-Share my food more freely with people (thinking about doing this now anyway)
-Buy something from a coffee shop when I use their wi-fi
-Burn firewood instead of cardboard
-Spend less time worrying about logistics
-See more concerts and maybe even pay for my music.

dragoncar

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Re: What happens if you strike it rich?
« Reply #112 on: January 23, 2014, 12:39:22 AM »

-Pay for friends/family to fly out to see me when I'm traveling
-Share my food more freely with people (thinking about doing this now anyway)
-Buy something from a coffee shop when I use their wi-fi
-See more concerts and maybe even pay for my music.

So basically charity :-)

Rural

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Re: What happens if you strike it rich?
« Reply #113 on: January 23, 2014, 12:16:19 PM »

Another lesson learned:  be very careful of volunteering at a non-profit.  It's great if you're ladling out soup at the homeless shelter or stocking shelves at the food bank, but it's quite another situation if you're on the board or the budget committee.  It's way too easy to get sucked up into a power vacuum when attrition takes its toll.  There are far too many risks of being asked to "step up" your commitment-- they're for very good reasons, but they also tend to be full-time jobs which add a lot of stress to your life.  I'd rather donate money than time, but donating money just doesn't seem to deliver the same endorphin jolt.  Not so far, anyway.

I had the same volunteering problem with a tiny non-profit where I served as Treasurer.  I enjoyed learning about all the paperwork and tax returns and regulations, but after my three-year term was up I couldn't find a relief.  The person we eventually found lasted less than a year before a health crisis took them off the job, and that's when we learned that nothing had been done for all those months.  I ended up being "Treasurer encore", fixed the problems, did a year of paperwork in a month, and ended up finally turning the job back over to the person who I'd taken the reins from over four years ago.  Then I ran away fast.

Amen to this. It happens everywhere. In my case, I seem to be a permanent chair of the board, despite twice trying to quit (at the end of a term). Next time, I swear.

astadt

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Re: What happens if you strike it rich?
« Reply #114 on: January 23, 2014, 09:35:49 PM »
Travel nearly constantly

And get a pool.

If you are traveling constantly, who's going to use the pool?

take the pool with you



This works

Kepler

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Re: What happens if you strike it rich?
« Reply #115 on: January 24, 2014, 04:04:43 PM »
This is an interesting question - and the responses, and different philosophies behind them, interesting as well.

In our case, we have a few different timelines we're working to, with different layers of 'idealness' to the life we'd have, depending on which one we reach.  At the moment, I'm our primary income by a long stretch.  I'm also eleven years older than my partner, and there are some things going on health-wise, with me (genetic disorder - very mild manifestation of it so far, but not sure how long that luck will hold) that may mean I become unable to keep up the kind of pace required for the income I'm currently bringing in.

We have a short-term goal, which is an amount sufficient for the family to be okay if I have to stop working precipitously.  On somewhat pessimistic assumptions, if I can keep going for another five years at my current pace, we'll hit that goal -  I'll be able to 'retire' then, and we'll be 'okay' with careful ongoing attention to our expenses.  If we're in that scenario, an unexpected windfall would definitely make a difference to how we live, because that's an emergency planning scenario, not an ideal early retirement dream.

If my health is going okay, and I can stick it out at work for ten years (again, this is making very pessimistic financial assumptions, so the timeline is very conservative), this would enable me to retire meaningfully early, and would enable my partner to retire at the age they currently want to (which would be later than me - but would balance out, since I've funded us through periods of their study, etc.).  This would give us a very comfortable life with which we'd be very happy, and which we're looking forward to.  It wouldn't, however, enable us to do lots of stuff for other people - it's a life based on meeting our own fairly basic needs, plus the extravagance of needing to go, possibly for extensive periods of time, to help aging relatives overseas.

Even in the second scenario, however, a windfall would make a big difference - not so much to personal lifestyle, but to the capacity to do things for others that we would genuinely enjoy.  I'd love to be able to put together a research institute in the area I work in, and to fund other kinds of research that I couldn't personally be involved in, but think are hugely important and underfunded.  But my health isn't such that I think I can manage the extra work that would be required to get the money together for this sort of thing myself...  But, just to make clear: it would add meaningful and significance pleasure /to my own life/, if I could be involved in something like this - I'm not saying 'look, there are charities I could donate to and be altruistic'.  I'm saying: if I could engineer my absolute ideal life, I'd end my days involved in administering these kinds of funds - I'd get immense enjoyment from this.

The actual retirement goals we're directly /aiming/ for, are too modest to allow for this kind of ideal.  But I expect we'll still be more than happy to hit those goals.

Weirdly, we probably will end up with some sort of unexpected windfall - or, at least, my partner will.  There's some sort of trust set up by a long-deceased grandparent that, once it's funded the educations of all the grandkids (my partner was the eldest of those), will split the remaining funds amongst the beneficiaries, and probably other things we don't know about.  We don't plan based on that, just like we don't plan for my partner, who's currently just started studying for a PhD, to land a lucrative academic position right on graduating - as I said above, we run on pessimistic assumptions when planning our timelines.  But some of these things we don't plan for will happen nevertheless, and they probably will make a difference of some sort.  But not the kind of difference worth working longer, in failing health, to achieve...

TomTX

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Re: What happens if you strike it rich?
« Reply #116 on: January 24, 2014, 04:43:06 PM »
There seems to be an oversupply of many PhDs - hopefully she is excelling at a top-tier school or has an interesting dissertation project.

Roland of Gilead

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Re: What happens if you strike it rich?
« Reply #117 on: January 24, 2014, 05:30:09 PM »
I would buy a small island and invite all of you guys for a one month free vacation.  Free booze too.

Kepler

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Re: What happens if you strike it ric
« Reply #118 on: January 24, 2014, 07:02:56 PM »
If the 'oversupply of PhD' comment was to my post (my partner's male btw :-) ) - we're in Australia, where the demographic trend within academia is a bit different to the US or UK.  I stepped into a permanent academic position before completing my own PhD, and got promoted literally ten minutes after I submitted the thesis (I walked back to my office, relishing the thought of finally being properly credentialed for my position, sat down, and promptly got a call from my manager asking me to accept a higher level role, for which I, yet again, wasn't officially properly credentialed...). 

Mind, I wouldn't exactly be rolling the dice with a humanities degree right now, and I'd make sure I was prepared to be properly agile with my disciplinary specialisations, and having high administrative and organisational skills helps a lot (I've worked outside academia more than in it, and a great deal of what makes me attractive as an academic staff member is a very strong non-academic skillset).

As for my partner, they were headhunted for a PhD position with a scholarship that lets them bring home an equivalent pay to the job they held previously (the nominal salary is lower, but the PhD is tax exempt, so it's more or less a wash).  The field is a shortage area within Australia, with job prospects outside academia - they aren't picky about where they work specifically, and are also hedging bets with a specialisation that could open jobs overseas (neither of us is originally from Australia, so there's no specific reason we have to stay here). 

Like me, they've been holding down a job for some years for which they weren't formally credentialed - this is always precarious, and we had been planning and saving for them to go back and study for the credential normally required for their job, as some shifts in national accreditation requirements were looking like employers were going to lose the kind of discretion that had allowed my partner to hold the job on talent alone.  We probably would have done this via an MA, rather than a PhD, if it had been on our own dime - but hey, if people want to pay us for the PhD, we aren't looking gift horses in the mouth...

happy

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Re: What happens if you strike it rich?
« Reply #119 on: January 24, 2014, 07:26:43 PM »
Interesting thread. Had me thinking for quite a while. Building on Nords approach" Meh I'm pretty happy as I am and I've got things just how I like them", FWIW, I think the fundamental question is whether one believes "because I can and it will make me happy" is reasonable legitimisation for spending. Most Westerners would add the caveat "as long as I'm not hurting anyone else".  Problem is,  if that additional spending involves additional impact on the planets resources, then it IS hurting everyone else.

What would I do:

1.Retire and  like Rural "do things sooner" in my current plan, mainly in terms of stuff like solar panels that will help optimise.
2.Keep current expenses "meh I'm pretty happy as I am"...the reduction in expenses from stopping work would feed a horse/allow a small amount of travel. I'm not big on travel anymore but there's a few select places on my bucket list.
3. Save to 2% SWR.
4. Use excess in planet improving ventures eg save forests, research sustainable solutions etc. Not sure exactly what- not there yet - would need research.

What I learnt personally from this thread ( helped by being on a couple of months off work), is that its not WORK thats stopping me from doing things I want to do: its actually  my energy, strength and fitness. I don't have to do these things to BE happy.... but I will be a more functional, versatile person, and have the satisfaction of getting some of my volitional desires done. So this should be my core target for 2014.


Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #120 on: January 24, 2014, 08:37:19 PM »
I would buy a small island and invite all of you guys for a one month free vacation.  Free booze too.


^ WINNER! This thread is over. No one can top this post.

dragoncar

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Re: What happens if you strike it rich?
« Reply #121 on: January 24, 2014, 08:41:49 PM »
I would buy a small island and invite all of you guys for a one month free vacation.  Free booze too.


^ WINNER! This thread is over. No one can top this post.

I would buy a small large island and invite all of you guys for a one two month free vacation.  Free booze too.

The bidding wars have begun.

Roland of Gilead

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Re: What happens if you strike it rich?
« Reply #122 on: January 24, 2014, 08:54:20 PM »
I would buy a small island and invite all of you guys for a one month free vacation.  Free booze too.


^ WINNER! This thread is over. No one can top this post.

I would buy a small large island and invite all of you guys for a one two month free vacation.  Free booze too.

The bidding wars have begun.

I will have punch and pie also.

Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #123 on: January 24, 2014, 09:10:27 PM »
I would buy a small island and invite all of you guys for a one month free vacation.  Free booze too.


^ WINNER! This thread is over. No one can top this post.

I would buy a small large island and invite all of you guys for a one two month free vacation.  Free booze too.

The bidding wars have begun.

Dragoncar, I rarely read one of your posts that doesn't have me laughing out loud. You never cease to amuse. Nice work.

Insanity

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Re: What happens if you strike it rich?
« Reply #124 on: January 25, 2014, 07:26:43 PM »
I don't care who the highest bidder is, I'm rotating between the islands!

SwordGuy

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Re: What happens if you strike it rich?
« Reply #125 on: January 25, 2014, 09:07:19 PM »
...sometimes because I wasnt hungary, ...

I would wager that you've never been Hungary in your entire life...

WageSlave

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Re: What happens if you strike it rich?
« Reply #126 on: January 30, 2014, 01:19:41 PM »
(All of this is said with a caveat that I love my job.  If I was in a job I didn't love, I would switch to one I did.)

What if you didn't love your job, and changing to a job you loved would result in a 10x decrease in pay, and you hadn't yet reached "Stage 1"?  Stage 1 being bare-bones FIRE, Stage 2 being full-fledged everything-I-want FIRE.

That's a pretty accurate description of where I'm at.  I'm actually mostly "neutral" towards my job, but a handful of dips into the "hate" category turned me on to the whole idea of FIRE, MMM, ERE, etc.  I sometimes wonder how my life would be different if I'd had a "blissfully ignorant" working career.

But it makes me constantly go back and forth in my mind: do I stick it out to reach Stage 2 on a much shorter timeline, or take the early leap at Stage 1, and slowly work towards Stage 2?  And I have to temper that against the "grass is always greener" syndrome, as in, is there even a job out there I would actually love?  Being honest with myself, I think I could only really enjoy a full-time job for a fairly short amount of time.  Otherwise, I'd just get bored.  Before I ever heard of Early Retirement Extreme, I always pictured my dream life as being very much like Jacob Fisker's idea of The Renaissance Man: lots of varied and loosely-coupled interests, all done on my own time and schedule.  Take anything I enjoy and then force me to do it five days a week to someone else's specifications and it quickly loses its luster.

MMM and many on this forum have suggested (many times over) that when you actually do FIRE, there are money-making opportunities aplenty.  In other words, the Renaissance Man, when liberated from his 40+ hours of wage servitude, is likely to generate income (or at least grossly reduce his costs/liabilities) as a natural result of his interests and continued learning.  This statement has been made as a counter to my fear of the 4% SWR being too liberal; it's also been used to counter "one more year" syndrome at one's job.  And it can also be used as a rationale for exiting full-time work between Stage 1 and Stage 2.



Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #127 on: January 30, 2014, 01:27:23 PM »
^ All very well said, and I agree with every point. I intend to endure the 10x wage at least a few years beyond reaching Stage 1 for exactly the reasons you mention. Safety Margin, lack of a need to ever be a wage slave again, failure of the 4% SWR, etc.

arebelspy

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Re: What happens if you strike it rich?
« Reply #128 on: January 30, 2014, 06:30:25 PM »
(All of this is said with a caveat that I love my job.  If I was in a job I didn't love, I would switch to one I did.)

What if you didn't love your job, and changing to a job you loved would result in a 10x decrease in pay, and you hadn't yet reached "Stage 1"?  Stage 1 being bare-bones FIRE, Stage 2 being full-fledged everything-I-want FIRE.

I currently gross about 40k/year as a teacher.  There is no job so little that could give me a 10x reduction in pay, to 4k/yr.

So I guess I'm already in the situation where I chose the job I like, at low pay, over a higher paying one.

If I didn't like my job, I'm confident there's a half dozen things I could do and get paid at least 60-80k for without blinking.

So I guess the answer is: I would do the job I enjoy.  Life isn't worth giving up for something you don't enjoy.  At least to me.

So if you're in a situation where you make 400k and the option is to take a 10x paycut to 40, or stick it out...  I'd take the pay cut.  You can hit FI pretty fast on 40k anyways.

That's me though.  I don't want to not enjoy every single day.
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tooqk4u22

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Re: What happens if you strike it rich?
« Reply #129 on: January 30, 2014, 07:52:19 PM »
(All of this is said with a caveat that I love my job.  If I was in a job I didn't love, I would switch to one I did.)

What if you didn't love your job, and changing to a job you loved would result in a 10x decrease in pay, and you hadn't yet reached "Stage 1"?  Stage 1 being bare-bones FIRE, Stage 2 being full-fledged everything-I-want FIRE.

I currently gross about 40k/year as a teacher.  There is no job so little that could give me a 10x reduction in pay, to 4k/yr.

So I guess I'm already in the situation where I chose the job I like, at low pay, over a higher paying one.

If I didn't like my job, I'm confident there's a half dozen things I could do and get paid at least 60-80k for without blinking.

So I guess the answer is: I would do the job I enjoy.  Life isn't worth giving up for something you don't enjoy.  At least to me.

So if you're in a situation where you make 400k and the option is to take a 10x paycut to 40, or stick it out...  I'd take the pay cut.  You can hit FI pretty fast on 40k anyways.

That's me though.  I don't want to not enjoy every single day.

I struggle with this. I completely get what you are saying but if I can make 4x doing something I like doesnt that mean that I am trading 4 years of not like for potentially one year of like - and that assumes I like it in perpetuity

A complication is that at $40k a year you don't pay hardly any taxes (and you probably don't pay much for benefits being a teacher and you work 2/3rds of the year) whereas at 4x your pay (assuming not a teacher) you would dedicate about 40% of your pay to taxes, retirement, and benefits. On that basis I struggle because I make more and work more, but the take home, while more, isn't MUCH more....4x pay turns out to be 2x take home.  Ask yourelf if you took home 40% less than you do or had the OPPORTUNITY to make 4x more but take home 40% o that amount would it be worth it.

Not sure what the right answer is but it is something to think about in this imbalanced world.

WageSlave

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Re: What happens if you strike it rich?
« Reply #130 on: February 03, 2014, 01:21:24 PM »
I currently gross about 40k/year as a teacher.  There is no job so little that could give me a 10x reduction in pay, to 4k/yr.

So I guess I'm already in the situation where I chose the job I like, at low pay, over a higher paying one.

If I didn't like my job, I'm confident there's a half dozen things I could do and get paid at least 60-80k for without blinking.

So I guess the answer is: I would do the job I enjoy.  Life isn't worth giving up for something you don't enjoy.  At least to me.

So if you're in a situation where you make 400k and the option is to take a 10x paycut to 40, or stick it out...  I'd take the pay cut.  You can hit FI pretty fast on 40k anyways.

That's me though.  I don't want to not enjoy every single day.

I see where you're coming from, but...

If you save the exact same amount, X, every year, with a 5% rate of return, it will take your portfolio about 14 years to generate X on its own.  In other words, let's say you have identified $25k/year as your target FIRE number, and you just so happen to save exactly $25k/year.  In about 14 years, your portfolio should generate that $25k/year.

Let's say you have still identified X as your target number, but you can save 2X.  That's still 8 or 9 years until your portfolio generates X.

Now let's say you can save 10X.  Then you're in for only 2 years until FIRE.

Two years at a "neutral-or-worse" job, versus 8 to 14 at a "happy" job?

You're already in the happy job, and are comfortable with the timeline for full-on Stage 2 FIRE, so the question I pose is more of a thought experiment.  The numbers part is easy, imagine you're earning 10x what you do now.  But the key is you also have to imagine that you don't know what your "happy" job is.  In other words, you seem to be saying, "If I'm unhappy in the 10x job, I'll just switch to an x job, and be happy."  But how can you be sure the other job will in fact make you happy?  How do you know you're not simply suffering from "the grass is always greener" syndrome?

That's kinda where I'm coming from: one of my goals for achieving FIRE is to "find my passion" or my "dream job" or whatever you want to call it.  If I start job hopping now, what if I just end up in another position where I'm neutral or worse?  That's a scary thought: give up the 10x pay and not improve the work situation.  Not to mention the stress it would put on my family.

And as I said above, I suspect there may not actually be a "dream job" for me, at least not a traditional 40+ hour/week full-time position.  My interests are too diverse; I really don't want to commit 80% or more of my energy life's focus to only one job.

On that basis I struggle because I make more and work more, but the take home, while more, isn't MUCH more....4x pay turns out to be 2x take home.  Ask yourelf if you took home 40% less than you do or had the OPPORTUNITY to make 4x more but take home 40% o that amount would it be worth it.

Of course it doesn't make the answer any easier, but I always try to talk in terms of "real wage" ala Your Money or Your Life.  That is, what is the actual amount of your pay that you can use towards FIRE after all the explicit and implicit expenses are removed?  Take out taxes, mandatory health insurance, uniform costs, commuting costs, other job-related incidental costs, and divide by total time investment (including commute, unpaid overtime, etc).  I know I didn't say this in my above posts, but that's what I was thinking.  You're supposed to read my mind.  :)

arebelspy

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Re: What happens if you strike it rich?
« Reply #131 on: February 03, 2014, 01:51:02 PM »
That is an interesting connundrum.

Thanks for the thorough explanation.

On the other hand, what a great "problem" to have - making 10x, such that you'll be effectively FIRE in 2 years or so?

/shrug

I could pretty much put up with anything that I didn't find unethical for a few years.  Sure, 80+ hour weeks would suck, but FIRE's options are so incredible it's worth it.

Tough though, 10x (2-3 years) versus 8-9 at a job you like... 

Thanks again, makes much more sense the way you put it.
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arebelspy

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Re: What happens if you strike it rich?
« Reply #132 on: February 06, 2014, 07:38:35 PM »
David Cain over at Raptitude just put out a free PDF ebook.

In it he answers what I was trying to say above quite eloquently:
"If you don't love your job then you're in the wrong line of work, and this is mistake that you ultimately can't get away with. Some part of you will always know you're selling out. It will drain your self- confidence and your gratitude, even if these weary feelings become normal to you. It will follow you every day for as many years as it takes you to do something about it."
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Insanity

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Re: What happens if you strike it rich?
« Reply #133 on: February 06, 2014, 07:45:07 PM »
David Cain over at Raptitude just put out a free PDF ebook.

In it he answers what I was trying to say above quite eloquently:
"If you don't love your job then you're in the wrong line of work, and this is mistake that you ultimately can't get away with. Some part of you will always know you're selling out. It will drain your self- confidence and your gratitude, even if these weary feelings become normal to you. It will follow you every day for as many years as it takes you to do something about it."

I am finding this out now.  I don't love my job.  I switched over from software engineering which I did love, but always felt like I wasn't good enough to application security which I am in the same boat but I make about 25-50% more pay and I have been losing more confidence every year and I'm also finding that I'm questioning a lot more about other decisions I am making.

Again, I'm making enough to FIRE earlier,  but I'm not sure it has been worth it...

foobar

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Re: What happens if you strike it rich?
« Reply #134 on: February 06, 2014, 08:31:00 PM »
If your making 40k and spending 25k, you are saving 15k. If your making 160 paying 50k in taxes(probably high) and spending 25k, your saving 85 per year. Your saving >5x as much despite only making 4x as much.  At some point the taxes start lowering those numbers but more money gives a big boost to savings when your expenses are close to your income.



I struggle with this. I completely get what you are saying but if I can make 4x doing something I like doesnt that mean that I am trading 4 years of not like for potentially one year of like - and that assumes I like it in perpetuity

A complication is that at $40k a year you don't pay hardly any taxes (and you probably don't pay much for benefits being a teacher and you work 2/3rds of the year) whereas at 4x your pay (assuming not a teacher) you would dedicate about 40% of your pay to taxes, retirement, and benefits. On that basis I struggle because I make more and work more, but the take home, while more, isn't MUCH more....4x pay turns out to be 2x take home.  Ask yourelf if you took home 40% less than you do or had the OPPORTUNITY to make 4x more but take home 40% o that amount would it be worth it.

Not sure what the right answer is but it is something to think about in this imbalanced world.

Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #135 on: February 06, 2014, 09:48:18 PM »
David Cain over at Raptitude just put out a free PDF ebook.

In it he answers what I was trying to say above quite eloquently:
"If you don't love your job then you're in the wrong line of work, and this is mistake that you ultimately can't get away with. Some part of you will always know you're selling out. It will drain your self- confidence and your gratitude, even if these weary feelings become normal to you. It will follow you every day for as many years as it takes you to do something about it."

It's an interesting point of view and I'm looking forward to reading it, but I think you might be missing the point some of us have tried to make in this thread. From my perspective at least, it's not that we don't love our job, or our field, it's that we don't love the entire idea of a job or a field. It's the commitment to the 40 hour work week that keeps us from doing what we love.

I still haven't figured out exactly what my ideal early retirement will entail. If I could suddenly never, ever have to worry about money anymore, I know I would volunteer for habitat for humanity, restore some old run down houses as a hobby, play a lot of golf, go hiking daily, maybe finally learn to play my banjo, start my own veggie garden, play with my kids more, get much more experimental with brewing beer, learn more about nutrition and plan our family diet in a more cost/health friendly way, etc.

Very few of these things are "jobs". Yes, I could become a carpenter, start a bluegrass band, become a farmer, start a micro brewery, or whatever "jobs" might be related to these interests. However, none of these would support my family the way I want, or support my overwhelming urge to RE, and if any one of these things became a career they would pull me away from doing all the other ones, which I love and want more time to do.

Lastly, I am damn good at my job. Not trying to brag, but I feel more than any other thing that this is my calling because it comes sooooo naturally and I really make it look easy. This is why I've been very successful and have the ability to provide so much for my family. I would bet many people on the forum feel the same way - that their job comes very easy to them and it's exactly why they chose the profession they're in. The problem is not the job, it's the commitment, and the fact that the job takes away from everything else in my life.

I hope that makes some sense. Thanks for reading.

arebelspy

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Re: What happens if you strike it rich?
« Reply #136 on: February 07, 2014, 07:30:57 AM »
It's an interesting point of view and I'm looking forward to reading it, but I think you might be missing the point some of us have tried to make in this thread. From my perspective at least, it's not that we don't love our job, or our field, it's that we don't love the entire idea of a job or a field. It's the commitment to the 40 hour work week that keeps us from doing what we love.

(Emphasis original.)

Oh I get it.  You're just missing the point that my answer would be: then don't do that.  Quit.

/shrug

I understand, and my answer remains.
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dragoncar

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Re: What happens if you strike it rich?
« Reply #137 on: February 07, 2014, 12:48:50 PM »
It's an interesting point of view and I'm looking forward to reading it, but I think you might be missing the point some of us have tried to make in this thread. From my perspective at least, it's not that we don't love our job, or our field, it's that we don't love the entire idea of a job or a field. It's the commitment to the 40 hour work week that keeps us from doing what we love.

(Emphasis original.)

Oh I get it.  You're just missing the point that my answer would be: then don't do that.  Quit.

/shrug

I understand, and my answer remains.

And make money how?  At some other job we don't love that pays less?

Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #138 on: February 07, 2014, 01:10:10 PM »
It's an interesting point of view and I'm looking forward to reading it, but I think you might be missing the point some of us have tried to make in this thread. From my perspective at least, it's not that we don't love our job, or our field, it's that we don't love the entire idea of a job or a field. It's the commitment to the 40 hour work week that keeps us from doing what we love.

(Emphasis original.)

Oh I get it.  You're just missing the point that my answer would be: then don't do that.  Quit.

/shrug

I understand, and my answer remains.

And make money how?  At some other job we don't love that pays less?

Dragoncar - You need to find your favorite thing to do, then find someone to pay you money to do it.

So you understand my argument Arebelspy, and your answer to my predicament is that you would Quit. I understand and respect how you would handle it. However, 2 issues:

1) What Dragoncar said. Where's the money Lebowski?
2) I realize these are David Cain's words, not yours, but you seem to fully support them. What I have a real problem with is the phrase "this is mistake that you ultimately can't get away with." I don't accept this. He implies this decision is incorrect, which is nonsense. It's my decision, just like it's your decision. While I don't agree with your decision, and you clearly don't agree with mine, calling is a mistake seems very inappropriate.

arebelspy

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Re: What happens if you strike it rich?
« Reply #139 on: February 07, 2014, 01:22:40 PM »
Dragoncar - You need to find your favorite thing to do, then find someone to pay you money to do it.

Yeah, no.

That's a silly misconception/straw man, to insist that you have to get paid for the thing you love.

I do plenty of things I love just for the joy of it, even if I don't monetize it.

So you understand my argument Arebelspy, and your answer to my predicament is that you would Quit. I understand and respect how you would handle it. However, 2 issues:

1) What Dragoncar said. Where's the money Lebowski?
2) I realize these are David Cain's words, not yours, but you seem to fully support them. What I have a real problem with is the phrase "this is mistake that you ultimately can't get away with." I don't accept this. He implies this decision is incorrect, which is nonsense. It's my decision, just like it's your decision. While I don't agree with your decision, and you clearly don't agree with mine, calling is a mistake seems very inappropriate.

1) There's no shortage of money.  It's pretty much everywhere.  Go pick it up.
2) That's fine, you can call it your decision, and take a relativist view that each persons decision is there own and there can't be any mistakes.  I disagree.  If someone gambled away their inheritance and got no pleasure from it, I would call that a mistake.  If someone spent lots of money on things that don't make them happy to impress someone else, I would call that a mistake.  If someone spent years of their life doing things that made them hate their life... I would call that a mistake.
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Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #140 on: February 07, 2014, 01:36:24 PM »
I agree with the last part, but I don't hate my life. I hate my job, most of the time. I love everything else about my life, and I love the money my job provides for my family more than I hate my job. When that trend reverses, I will quit.

I agree we can call people out for mistakes, and the ones you point out are obvious. There are many other things we debate here that you might call mistakes (i.e.-debt paydown vs. investing, roth vs. traditional). All of these decisions might have a mathematically or psychologically optimal choice, but they all come down to personal preference, risk tolerance, and so many other factors that are impossible to explain with a keyboard.

If my mistake allows me to RE in 5 years rather than 15, I'll be happier making the mistake.

arebelspy

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Re: What happens if you strike it rich?
« Reply #141 on: February 07, 2014, 01:59:11 PM »
If my mistake allows me to RE in 5 years rather than 15, I'll be happier making the mistake.

That's great.  It may or may not be a mistake.  I don't know, I don't know you and I can't make that call.

But I do hope you, or anyone else, doesn't regret the five years they spent at a job they hated, and then try to convince themselves that it was necessary, or the only way.

It is not.
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Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #142 on: February 07, 2014, 02:03:02 PM »
I hope so too. I know it's not the only way. We all have choices.

dragoncar

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Re: What happens if you strike it rich?
« Reply #143 on: February 07, 2014, 03:47:55 PM »
then don't do that.  Quit.

1) There's no shortage of money.  It's pretty much everywhere.  Go pick it up.

These are incompatible.  I was already picking up money (lots of it) doing something that I like well enough but don't love.  If I quit before I'm FI, I need money.  So now I go pick it up doing something else... but I'm not going to love it either.  So I quit.  Repeat ad nauseam?

It may be possible to get paid to do something I love, but as cheddar is saying, I need to work now in order to buy the time to figure that out.  It's far more efficient to just work a few more years at my current job and achieve FI than to hop from (likely low paying) job to job hoping I'll love it.

arebelspy

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Re: What happens if you strike it rich?
« Reply #144 on: February 08, 2014, 07:08:00 AM »
/shrug

If you say so.
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Russ

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Re: What happens if you strike it rich?
« Reply #145 on: February 08, 2014, 07:45:50 AM »
nobody's gonna mention how "love what you do" is just as important as "do what you love"?

If I chose a job that I enjoyed less day-to-day but allowed me to RE in a year, I'd love the shit out of that job

Cheddar Stacker

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Re: What happens if you strike it rich?
« Reply #146 on: February 08, 2014, 09:18:15 AM »
nobody's gonna mention how "love what you do" is just as important as "do what you love"?

If I chose a job that I enjoyed less day-to-day but allowed me to RE in a year, I'd love the shit out of that job

Good point. Thanks for chiming in. Now I need to start loving the shit out of this job.

arebelspy

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Re: What happens if you strike it rich?
« Reply #147 on: February 08, 2014, 09:53:01 AM »
nobody's gonna mention how "love what you do" is just as important as "do what you love"?

If I chose a job that I enjoyed less day-to-day but allowed me to RE in a year, I'd love the shit out of that job

Oh absolutely.  You choose your attitude.  Well said.
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arebelspy

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Re: What happens if you strike it rich?
« Reply #148 on: February 08, 2014, 01:12:57 PM »
Another good read on this topic of being happy with your work that I happened to run across today:
http://oliveremberton.com/2012/finding-extraordinary-success-and-fulfilment/

Choice quote:
Quote
If you think success will make you happy, you have it backwards.
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dragoncar

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Re: What happens if you strike it rich?
« Reply #149 on: February 08, 2014, 01:17:59 PM »
/shrug

If you say so.

Well, which is it?  Am i supposed to quit?  Go pick up money?  Both?