Author Topic: Which is more Mustachian... Plan A or Plan B  (Read 4374 times)

Iceplant18

  • 5 O'Clock Shadow
  • *
  • Posts: 43
  • Location: San Diego, CA
Which is more Mustachian... Plan A or Plan B
« on: June 13, 2013, 09:38:03 PM »
My first post!  Bam!  OK anyway....

      I've been living something of a mustachian lifestyle for about 6 or 7 years now due primarily in part to how the housing crisis affected me.  This website was actually recommended to me by a friend of mine who said that the topics often reminded them of me.  So I figured I'd start off my mustachian forum adventure by asking everyone their opinion on what would be the more mustachian choice between two financial/lifestyle choices.

      Long story short, as a result of frugal living mixed with extreme saving and investing for the past 6 or 7 years, I have created a financial situation and budget for myself that would allow me to do one of two things.  I can either...

A)  Stop working full time and start working part time immediately.

or

B)  Continue to work full time for another 4 years and retire all together at the ripe old age of 36. 

     The US housing crisis taught me a lot of things and much like the experience that MMM went through with his business, it taught me to value happiness over financial success.  It also forced me to realize that I straight up don't like working full time.  Back in college when I worked part time I was much happier.  Of course buying my own house in 2004 ended the ability to continue working part time so that pushed me into working full time.  Something I've been doing for the past 10 years now.  The possibility of working part time again puts a huge smile on my face, even as I type this.  But then again I could continue doing what I'm doing for 4 more years and kick the employment habit for good.  Heck I've been doing it for 6 years now.  What's another 4 right? 

     I've analyzed and weighed the pros and cons endlessly for months now.  There's still a part of me that is based in fear that says I should continue to earn as much money as I can "just in case" which urges me to continue working full time.  But you only live once and if I do continue to work full time for 4 more years, that's 4 years of my life I'll never get back.  So what do you mustachians say?  Plan A.... or Plan B? 

limeandpepper

  • Magnum Stache
  • ******
  • Posts: 4500
  • Location: Australasia
Re: Which is more Mustachian... Plan A or Plan B
« Reply #1 on: June 13, 2013, 11:59:49 PM »
If you work part-time, how long will it take you to reach the same figure you would get if you continued to work full-time for another 4 years?

I'm nowhere as close to retiring completely as you are, but I do play with the idea of going part-time. For me it'd depend on how unhappy I was with continuing to work full-time (even if just for a few more years).

tomsang

  • Handlebar Stache
  • *****
  • Posts: 1085
Re: Which is more Mustachian... Plan A or Plan B
« Reply #2 on: June 14, 2013, 12:09:18 AM »
Welcome. Great question, where there is not a correct answer. It is a personal choice.  For me there would be a lot of factors. Will your Stache support a family?  If you can stomach the job and it pays well then I would continue working until you are FI. How is your budget, how is your Stache, have you truly thought through the various scenarios, etc. If you are willing to share, I am sure there would be many members willing to poke holes in your plans.

Good luck!


cerberusss

  • Stubble
  • **
  • Posts: 170
  • Age: 42
  • Location: Netherlands
Re: Which is more Mustachian... Plan A or Plan B
« Reply #3 on: June 14, 2013, 01:26:20 AM »
I'd go work parttime, and set up an alternative income source.

In the last couple of years, I've worked 4 days per week, and used the Friday to set up a little microbusiness.

Iceplant18

  • 5 O'Clock Shadow
  • *
  • Posts: 43
  • Location: San Diego, CA
Re: Which is more Mustachian... Plan A or Plan B
« Reply #4 on: June 14, 2013, 10:49:20 AM »
If you work part-time, how long will it take you to reach the same figure you would get if you continued to work full-time for another 4 years?

I'm nowhere as close to retiring completely as you are, but I do play with the idea of going part-time. For me it'd depend on how unhappy I was with continuing to work full-time (even if just for a few more years).

If I started working part time right now it would be safe to say that it would take about 12 years to get to FI rather than 4.  If I was working part time my regular spending habits would stay the same as they are now because I already have them down to mustachian levels.  All the extra cash I make while working full time goes straight to paying down debt and growing the retirement account. 

If I had to rate my happiness level on a scale of 1-10, 10 being best and 1 being worst, I would say that while working full time I'm at about a 4-5.  If I was working part time I'd probably be at around a 7-8.  If I was totally retired.... I honestly don't know because I've never been retired like that before.  I'd hope to say it would be around a 9-10.  Shoot I might get totally bored and find a new career in my early retirement adventures.  Hard to say. 

Welcome. Great question, where there is not a correct answer. It is a personal choice.  For me there would be a lot of factors. Will your Stache support a family?  If you can stomach the job and it pays well then I would continue working until you are FI. How is your budget, how is your Stache, have you truly thought through the various scenarios, etc. If you are willing to share, I am sure there would be many members willing to poke holes in your plans.

Oh definitely this is a matter of opinion.  Choices like these are usually the most complicated ones because of that.  My Stache would definitely not support a family.  I don't have kids or a wife and honestly don't plan on ever having any.  I'm happier single than in a relationship.  It's an independence/stubbornness thing.  If I somehow decided to have a family down the road then I'd have to reassess the financial situation.  I can definitely stomach the job for another 4 years.  All in all it's a pretty good job.  Union benefits, 5 weeks vaca a year, 4 miles from where I live, 50Kish a year.  It just requires that my life revolve around it.  All my decisions are based around my work schedule.  Not something out of the ordinary for most Americans, it's just getting old. 

Here's some stats.  I currently need about $1500 a month to live happily and my Stache can generate 750 a month for the rest of my foreseeable life.  In about 4 years, if working full time, those two numbers will match.  My expenses will have gone down due to lower mortgage debt and my income will have gone up due to investments.  As with all long term plans, I've made many assumptions.  Assumptions such as what I predict my investment returns will average out to be in the long run (I tend to be conservative), what I predict inflation to be, what I predict mortgage rates to be at in about 4 years, that I'll never have some sort of catastrophe, that I'll always rent out a room in my house, that I'll continue living where I am living now (which I would be happy to do), etc.  For safety sake I didn't factor in the real possibility that someday I'll get some sort of an inheritance as well as my home's future equity value.  My budget model assumes that I'll live in my house until I die without ever taking equity out with something like a reverse mortgage or selling it and renting somewhere in my later years. 

Any holes or other factors I'm not thinking about, please do say.  Although this particular thread is more about the choice of the Plan A or Plan B assuming that all considerations are good and realistic. 

Rebecca Stapler

  • Pencil Stache
  • ****
  • Posts: 907
    • Stapler Confessions
Re: Which is more Mustachian... Plan A or Plan B
« Reply #5 on: June 14, 2013, 11:54:23 AM »
Since you asked for holes in your assumptions ... are you certain that you will not take on the expense of caring for someone else -- children, pets, or family?

travelbug

  • Bristles
  • ***
  • Posts: 261
  • Location: Australia
Re: Which is more Mustachian... Plan A or Plan B
« Reply #6 on: June 14, 2013, 07:12:22 PM »
If you are really keen to retire I would work FT for the four years but on my off time try to generate another income stream from a hobby/interest.

If you can get this working for you and enjoy doing it you could retire earlier and use your hobby to fund the rest of your lifestyle.

Just a thought.

At 32, I would stick it out and then at least you have a zillion options and would not need to be tied down anywhere/ to anyone when you do pull the plug.


lizzigee

  • 5 O'Clock Shadow
  • *
  • Posts: 84
  • Location: NZ
Re: Which is more Mustachian... Plan A or Plan B
« Reply #7 on: June 14, 2013, 09:27:46 PM »
It's not all or nothing. If you don't quit straight away, you don't necessarily have to stay full time for another 4 years.  How about looking at in in smaller chunks?  Can you manage full time for the next 6 months? Then review it again, maybe you will feel that you can manage another 6 months. 

Hell, my workplace has just been through a restructure, and sometimes I was looking at my future work-life there in 2 hour chunks - can I make it through  to morning tea without quitting?  Then only 2 hours to lunch, surely I can handle that etc etc. Glad to say it's now settled, because its less than a  mile from where I live, I really like my co-workers, and there's nothing else locally that pays comparably..

Every six months you stay there it reduces the overall amount of hours you have to work for someone else in your lifetime. I agree with other posters, use this time to develop an income stream on the side doing something you actually enjoy. Best wishes!

meadow lark

  • Magnum Stache
  • ******
  • Posts: 4831
Re: Which is more Mustachian... Plan A or Plan B
« Reply #8 on: June 15, 2013, 10:37:28 PM »
+1.  I would work a little longer, personally.  At least that is what I am doing.  I just don't want to cut it that close.  This year my Rx drug co-pay is about $400 a month.  I did not predict that 5 (or 1) years ago. 

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: Which is more Mustachian... Plan A or Plan B
« Reply #9 on: June 15, 2013, 10:58:59 PM »
Since you say you really don't know how happy you'd be in complete retirement, is there any way to "test-drive" retirement?  Something like a sabbatical or leave of absence.

Also, how hard is it going to be to find another job in your industry (or something else) if you decide retirement's not for you, or your numbers don't work out as planned?

Iceplant18

  • 5 O'Clock Shadow
  • *
  • Posts: 43
  • Location: San Diego, CA
Re: Which is more Mustachian... Plan A or Plan B
« Reply #10 on: June 17, 2013, 09:21:42 AM »
A lot of great ideas everyone!  Many of which I hadn't fully considered.  Stan I definitely have not taken into considerations like taking care of someone else.  I thought about the possibility of having to support my parents in their older years because they certainly don't have a handle on the mustachian lifestyle but I decided I didn't want to plan on it.  The chances of me having to take care of them are slim and I can always work more if I need to down the road.  I think I'll try lizzigee's advice and work full time for another 6 months (till the end of the year) and reassess.  One thing I have noticed over the years is that the closer I am to FI, the less stressful my work becomes.  I'm going to open a new thread to bring light and discussion to that thought.