Hi All,
First let me say that I hope everyone is as healthy and happy as possible, and acknowledge that I feel extremely lucky to even be able to post something like this while so many are still suffering or out of work.
Here is the basic overview. My wife and I (together with our two kids; 9 and 7) have been stationed in Europe for the last six-years for my job. We had a solid financial base before moving, took advantage of a cost of living increase, and went hardcore MMM. As a result, we have been able to accumulate a net worth of around $1.1m. This is made up of approximately $850K cash, no debt of any kind, and approximately $250K in retirement assets. We are currently saving about $100K a year in cash mostly through my work. My wife also has a small consulting business that has been in operation for about 8-years and makes about $15 - $20K per year with minimal effort.
Our goal is to use this base to build an awesome life back home in the U.S. over the 1-2 years from scratch. We are 39 and would love to be more-or-less "free" by 42. By awesome life I mean...
- Leave the 8-6 grind behind and each be responsible for earning $20K (or less) a year - I am beyond burned out!
- Be free to enjoy as much of our kids last years of childhood together as a family as possible - I have done an okay job, but missed a lot through work!
- Live in a place with good public schools and lots of access to nature (we love hiking, biking, trail running, etc.)
- Live close enough to a city that if we needed a job in the future we could land one without another relocation or miserable and expensive commute (my wife was a teacher and I work in marketing) - we don't want to displace the kids again since we already brought them to Europe.
- Be in a place where our kids never have to leave if they don't want to. Probably our only complaint in life is that we both grew up in a place where most kids leave for college and/or jobs, and we could never really make it back because of the narrow range of opportunities - thus we don't see friends and family nearly enough and don't want our kids to have to make that same choice (home vs. whatever they want from life).
But no matter how we cut it, or where we look, it seems everywhere converges on something around $115K a year for a family of four (before tax), which means we would need to come up with another $50K per year, which also means one of us probably has a traditional "job" (assuming our investments could drive around $50K per year after tax (off $1.0m) and my wife could easily make another $20K with her consulting company). Again, we recognize this is a privileged situation and many, many families make it work on less, but we have worked hard (and been lucky enough) to be in this situation and want to give our kids the best we can within reason - and also enjoy our own guilty pleasures.
For example...
We have looked in suburban Connecticut as we have friends who live there and know it pretty well. The state is struggling a bit so you can pick up a house in a good neighborhood at a "bargain" (approximately $550K) and benefit from good public schools, but that leaves you with a hefty mortgage, you get hammered with property tax, if you do have to work the commute is insane, the nature isn't great, and the weather is less than ideal. Plus, Connecticut is known for being a place young people leave, which means we would essentially be moving there for a job we hope to not need and good schools, only to probably move again once the kids take flight. And with a $3000 mortgage (including tax), $1000 health insurance, $900 in food, $2000 a year to visit our families, and $700 a month in sports/activities (our kids love soccer), you are already zeroing in on that $115K number before tax.
We also looked in the Cincy, Nashville, Atlanta corridor, but the story is about the same. Food, sports, and health insurance essentially stay unchanged, but you either end up needing a $500K+ house (in a place like Franklin, TN) to get good public schools, or you buy somewhere cheaper and put them in private school. Either way, the numbers essentially net out (trade lower mortgage and property tax for a private school bill) and most those places lack accessible nature and a robust job market - apart from perhaps Nashville. Again, we feel like we would be going here because they are perhaps a little cheaper than the northeast, but the difference seems minimal and we see the kids leaving as they get older (and we would leave too if they did as this isn't really our ideal spot for proper retirement).
The best option we have found so far, and we have looked just about everywhere, seems to be an area like Steiner Ranch outside of Austin, TX. You still end up with the $550K house and the property tax is really high (we don't really want a McMansion - that just seems to be all there is), but you pay no state or city income tax (so you do better than a place like Cincy even with the cheaper houses because of State income tax). In addition you get great schools, lots of nature, warm weather and access to the job market in Austin should you need to go back to work. It seems like a place you can live an entire life and not need to leave, but I'm still not thrilled about the idea of saving all this money just to buy a half-million dollar house with high property tax and also don't know the area that well!
I know this all probably makes us sound really soft to a MMM audience, but I promise we are not. We have lived as a family of four in a tiny apartment well off the beaten path, with an old, cash-bought car, almost no furniture, no "toys", and rarely ate out for six years, and lived very much the same before moving abroad. Basically, we have been hardcore MMM devotees for years to achieve our goal and are now ready to set-up our semi-retired life...only we are terrified of making an unforeseen mistake and ruining our progress!
At the same time, we are trying to be realistic about what we need to be happy longer term (going this level MMM hasn't been easy), do want to enjoy a bit more of life than perhaps we have, and don't want to jeopardize our children's future, or force them to live an isolated life because we're sick of the grind.
There are probably some obvious things we are overlooking, so I guess I am asking...
If you were in our situation, how would you structure your life (use the money)?
Are there places you would recommend we haven't considered?
How are people setting up these lives (with kids) on like $70K per year? Between ('mortgage + tax' or 'mortgage + private school'), health insurance, groceries, visiting our parents at least once a year, and allowing kids to explore their interests (like sports), we just don't see how we can trim anymore fat than we already have.
All thoughts and ideas welcome!
All the best!
