50 and burnt out.. ready to FIRE

[jb1331]

I have been a reader / lurker around here for a long time. My wife and I also have been employing frugality / baddassity long before the blog..

We have not had a car payment for > 20 years. I have been working from home for > 15 years, wife works about 1 mile from the house. We bought our home 20 years ago. This was our first home, but never moved... paid it off in 9 years. We have 2 kids, and our youngest just graduated high school.  Every year I have maxxed out every possible IRA, 401k, HSA for the longest. Everything my wife has made has gone entirely to savings as well. I do > 80% of all my own car repairs and maintenance, and about the same for our home.  We have traveled quite a bit, and our kids have been all over growing up. We did this by opening credit cards, getting the miles and paying for airfare, hotel, etc.. Other times, we drove. The majority of travel expenses were paid for by miles.

The problem is we have been incredible savers, but not great investors.. House is worth about $350k, we have only about $900k of cash and investments, plus some smaller pensions, HSA etc.

I got a promotion a couple of years ago and have not change our lifestyle at all. This year, we have already put back about $60k.. I have a tuition bill and property taxes to pay this fall, but should clear > $80k in savings this year.

I am at a point though.. not sure if I can hold out much longer.. the very purpose of me working from home was to be a good Dad and be involved in my kids lives, but they are moving on, and their absence does not give me much incentive to carry on this way. Wife gets home @ 3:30 every day, but I often work well into the evening, and start my days very early.. I WORK ALOT with this role, and I am getting burned out. I have stellar reviews.. but the sacrifices made just really suck.. the hardest part is working from home.. yes, I am on the phone alot so that does give me some connection, but kind of feeling a bit isolated.. not travelling in about 2 years for work has done this to me as well.

If I hold out another year, we should be at about $1mm in cash / investable assets.. sitting in cash at the moment, and not sure where to put the money to work.. but we are about to hit QE 4 it sounds like, so more inflation is in order.. sigh..

$1mm is not alot of money.. we can live on very little.. but just need to figure out better balance in my life.. Yeah, I need to continue on a few more years to get the kids through school.. but really ready to sell or lease the house and live in a camper van for a few years and wake up somewhere new each month.. health is good, wife and I love to hike with our dog.

I have sold pretty much all my toys.. down to 1 gun and a few cheap guitars.. I had alot of gear at one time.

God did not make us to sit in front of computers 12 hours a day under high stress.. sure the pay for my senority is good, and I work in my gym shorts with no commute.. just so ready to move on to the next phase...


SO..

I need some solid investment advice now.. Really feel the market is due for a better entry sooner or later with the political cycle.. but maybe not.. I guess my frugality over the years has been more hindered by pessimism in a sense.. but in my 26(+) year career, I have seen so many people get knocked out of the game.. especially in 2001-2003, and again 2009...

Also needing some ideas to get through the next few years until my kids are settled..then we can hit the road..





 

[EricL]

There’s a thread out there on how to do a case study so people can give specific information to help.  But it sounds like you’re doing really well. If it’s investment advice you need, I heartily endorse Vanguard Index Funds. They’re incredibly stead. Mine bounced back from a he 2008 recession with no problems. They’re a solid foundation for the 4% Rule. $1 million is a lot of money if you’re already frugal, the house is paid off and the kids are almost gone.

It sounds like you should work absolutely no more than that one year and should consider going for less or working part time. Consider doing a staycation at first with a little bit of side travel before moving into a motor home.  It doesn’t sound like your spouse is fully on board so maybe see to that first. 

[mcraw25]

Congrats on your success so far, saving $80k/yr is awesome.  I am making the assumption you are heavy on cash and a bit risk adverse based on your comments.  Thats ok, no rush to make any major changes but... 

1. Inflation has not (yet) been a player despite QE.  That fact is confusing economists since we should have seen inflation by now.  Its possible improved supply chains and technology improving productivity will be keeping prices low for the foreseeable future. Stocks and real estate have some built in inflation protection, customers will be paying in (inflated) currency. Cash is the worst place to be in a high inflation period. 

2.  $1MM is a lot of money if invested in income producing areas. I echo EricL on index funds. One additional example; IF you bought rental property you should return around $5k-$7k per month. One nice thing about rentals is the 1-3 year contracts, gives you some planning numbers in case you were right to think the economy might take a turn. Most downturns are about that long. You might be able to mitigate risks by owning multiple properties.

Good luck!



 

[ysette9]

You have all the pieces in place except the mental block regarding investing. You need to work through this and get comfortable with some reasonable asset allocation (how about 50/50 stock/bond?) or you will not be able to retire because you are self-sabotaging.

I watched my grandmother go from retiring very comfortably (and early!) to almost running out of money. The reason for it was never profligate spending but poor investing choices. She had her money in CDs and cash for the last decade or two of her life so she lost incredible amounts of money to inflation. If she had had even 40% of her money in stock she would have died a very rich woman.

[RedwoodDreams]

I'm responding as someone with similar experiences and mustachian strategies over the years, but also as someone who had sudden and completely unexpected major health problems at the age of 54. Until age 54, I enjoyed wonderful health, rarely getting colds or flus, and had boundless energy.

That came to a screeching halt a few years ago.

This experience has made me: grateful that I worked and saved and built up Social Security earnings so that my SSDI benefit is the maximum possible; grateful that we've always kept our expenses low and saved like mad, driving old cars, etc.; grateful for the years I got to work from home and be there whenever needed for our son as he was growing up, though the work was often soul-killing and uninspiring; grateful that over my years of working I did enjoy a two-year sabbatical with world travel, and grateful that I have done enough world travel to not feel (as) deprived now that that's no longer physically possible.

I say this because you and your wife have done very, very well. You've done all the right things. Now it's getting to be time to think about yourselves and what you want the next chapter to look like while that's still within reach. I don't recommend continued crushing 12-hour work days doing something you don't enjoy because, frankly, you no longer have to do that (thanks to your strategies over the years). Bravo.

With a paid off house and low expenses, you should qualify for ACA subsidies, so health insurance should be fine. You can use the estimator tool for your state to get an idea of what your costs would be at various income levels, and then work to minimize that income (for example, putting money into traditional IRAs or HSAs lowers that MAGI used to calculate ACA subsidies).

For the college tuition, can you go ahead and use cash or IRAs (no 10% penalty if used for education, I believe), or creative 0% credit card churning, or a home equity loan, or have the kids take out student loans that you chip away at over time, while buying yourself the gift of early retirement/freedom???   Side benefit of spending down some of your cash and having no income (assuming you stop working) is that your kids would qualify for more financial aid.

You mentioned liking to hike with your dog. Stopping your current job doesn't mean you can't make some income to help with monthly expenses while your nest egg grows (in those index funds!) I do some dog sitting and dog walking for neighbors and could EASILY make 2k per month doing this if I had more energy. It's fun, it gets you out of the house, you're getting paid to exercise, and you're helping your neighbors. My handy husband has been asked by neighbors to help assemble furniture, change smoke detectors, etc. There is a lot of fairly easy money to be made just by helping the people around you who are elderly or too busy working to take care of household things.

I hope this is somewhat helpful to you. I don't mean to be a downer. But life is short, and health problems can pop up without warning. If there are other things you want to be doing, the time for that is now or soon, don't delay! You have certainly earned it.

[SunshineGirl]

You're so close to being ready to leave work behind or at least cut back or change to something more reasonable for you. You've done great with savings, but until you can pay for your expenses with your investments, you shouldn't walk away from your job.

I recommend that you start frequenting the Bogleheads forum. (Just google it.) The wisdom in that group is amazing, and if you post a case study there, you will get a ton of helpful advice. You must have anxiety or some sort of mental block about investing & it's costing you a lot. That 80K you so diligently save each year? Wouldn't it be amazing if you made 80K with no work at all except making the ONE right decision concerning investing?

My mom is the same as you regarding keeping everything in cash, although she has much less in savings. She gets by fine on her pension, social security, and paid-off house, but her standard of living could be much higher if she wasn't so anxious about investing.

Myself, I am fairly conservative at the age of 51, mostly because I've "won the game" in many ways. I don't need to take unnecessary risk, so my investments are 50% stocks and 50% bonds/cash. (Vanguard funds)

RedwoodDreams has shared hard-won wisdom. Health issues can spring up out of nowhere, so finding a way to make your life fulfilling whether or not you keep working is super important. I'm sure most members on the Boglehead forum would advise you to keep working for a bit longer, and that's what I advise, too, although you seem lonely in your work and definitely burned out, so I'd see what changes you can make - can you work from an office? Rent space in a co-working facility so you get some socialization & leave your work at the office? What small (or large) changes could have the biggest bang for the buck in terms of increasing your life satisfaction while continuing to work? Do you actually use up all your vacation time? Can you negotiate a shorter schedule? Get back to an office?

[BicycleB]

Early 50s here, FIREd since late 40s...

So what is your spend rate? The biggest advice is that once you learn the investing piece/ get over the emotional hurdle of investing, you can be reasonably confident if your expenses are 4% or less of your investment stockpile. What are your actual total expenses per year?

"Burned out...not sure I can hold on much longer...working well into the evening..." That sounds terrible! Specify the financial details ASAP to determine whether you're in the ballpark for immediate FIRE or not. If you're close, decision paths to get you there pronto might have you resigning weeks, not months or years. Data, my friend, data!

If you've been lurking, you know that the standard advice is roughly 50% to 75% stock, depending on your risk tolerance, with most of the remainder in bonds. This is sufficient to support the 4% spend rate above. The QE4 inflation fear is one of the infinite number of reasons that can be used to market time. You can't retire reliably by market timing but you can retire reliably by implementing a basic diversified portfolio. If stocks per se are super scary, variations are available but should be discussed in perspective. Details will flow from your spending situation, and continued discussion of your goals and fears.

For now, congratulations on pulling the discussion trigger. You'll feel better soon regardless of what decision you make, because you are confronting your fears and will soon have a viable plan, whatever that turns out to be. Eager to hear the next step.

[soccerluvof4]

Fifty was when I threw in the towel for the very same reasons. It would help if you shared your expenses and also how does your wife feel about her job? If she doesnt mind working a few more years and you get things settled in retirement that could help as well as you slow firing. find something completely different that your working 15-25 hours a week. If your burnt out which I believe because you mentioned it at least 3x's in your post then YES there is a way for you to Fire but need to share more info

[fuzzy math]

@jb1331 Are you still around here? You haven't responded.