Author Topic: Reader Case Study - Finger on the trigger too soon?  (Read 4695 times)

scubadog

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Reader Case Study - Finger on the trigger too soon?
« on: January 08, 2023, 12:21:53 PM »
I’m considering starting FIRE prematurely by quitting my job in April/May this year. Wanted to get some expert opinions on how reasonable or stupid that would be!

Life Situation:
32, live with life partner, 30. Partner and I keep our finances separate, not because we don’t love each other, but because she wants to reach FIRE on her own, and because I have weird emotional baggage about money from ‘08 and my parent’s ugly divorce, and don’t want it harming our relationship. So weird as it may sound our finances are independent of one another, and thus I’m giving you “my” situation (which feels weird even typing that). Effectively I’m financially single, and I’ll throw in nuance as necessary. Right now we file separately as single but marriage is likely and we’ll switch back and forth for joint and single filing for whatever makes most sense in any given year. Zero dependents currently, expected 2 in the future.
Have a stressful job I hate as an IT director and engineer. Actual passion is music, and if I quit I can pretty much guarantee I will refuse to go back to traditional work and will try and force something as financially unstable as music to work. Also, I’ve hated every job I’ve ever had so I’m admittedly bias against the idea of going back even part time to any traditional work. The reason I’m even considering retiring prematurely is due to the cost benefit of even a few more years of pain and putting my life on hold is starting to seem like it’s not worth the extra financial security.
I intend to use a legal team benefit from my job before I quit to set up an LLC to hopefully use it as the intake valve for any music or odd job money I make in retirement. I thought to choose LLC over a sole prop. due to the legal shielding it could provide, which I’ve heard is important for the music industry.

Gross Salary/Wages:
Salaried, low 6 figures, I save 80% of that income, which of course disappears in April/May if I quit.
Reliably expect an 11k bonus in March, which I intend to inject 100% of into my 401k like I did last year, if that still works out
No other income streams currently. Expect low and random income into LLC in retirement, but have no idea how much.

Adjusted Gross Income:
Not totally positive, as I’ve job hopped, and my brokerage and loss harvest has never been 18k before this year. I also don’t know if injecting my bonus into my 401k will carry major tax consequence or not. I’ll ballpark it around 90k +/- 3k

Taxes:
Not too complicated, I expect standard deduction which is what I usually do, and have too little assets or liabilities or deductions to complicate this answer: probably about 11-15k in taxes. This is of course based on 1 year of salaried employment, but I expect near $0 in retirement, so 2023 would just be the first half-ish of the year as income, and thus maybe like 5k in taxes? Then 0% bracket after that every year perhaps.

Current expenses:
Live in a cheap apartment, no mortgage, etc.
Built average spending from ~7 years of data, which includes: groceries, restaurants, basic healthcare expenses and separated out emergency healthcare expenses, auto, travel, entertainment, utilities, rent, insurance for car and renter’s insurance, fitness, gifts and charity, some tech items (cloud storage, stuff like that), misc (minimal). My average monthly spending right now is 1200
Average vacation expenses per year (also built on ~7 years of data): 1300

Expected ER Expenses:
No significant change. I aimed for 1300 per month and 1400 per year on vacations (with the same categories, etc.) but there’s nuance to this I’m worried about which I’ll explain later.
I’m leaving a lot out here because largely the questions I have pertain to this.

Assets and Liabilities:
No debt or liabilities
Do not own a house or any other real estate. Currently don’t have interest in owning real estate, unless the ROI proved worth it (like living in one side of a duplex and renting out the other side, with a mortgage or upkeep costing about what I spend on rent currently anyway).
Own 1 car worth around 3k
Total physical assets don’t exceed 15k in value (most of that value is in electronics and music production equipment).
Checking account: ~8k
Trad IRA: 85k
Roth: 48k
457: 74k
401k: 26k
Brokerage: 67k – harvested 18k losses for 2022
No HSA or FSA or life insurance.
So with market fluctuations I’m around 308k at the moment, but will (hopefully – markets) have more than that by April/May.

Questions start here!

Projected Budget / Nest Egg:
I have several different calculations for how much my nest egg needs to be, and even the estimate with the “tightest belt” I’m still 100k off of. I’m using 3.85% withdraw an 7% growth for these figures. The eggs are based on those fairly robust averages I mentioned above:
Minimum egg: requires I get rid of my car and go full bike, has no room for surprise medical issues, has no funds for moving abroad if we decide to do that, and guesses that annual child expenses are 1k per year which I know is way too low - 409k nest egg needed
Medium egg: no car (bike instead), no health emergency funds, and guesses 2k as annual child expenses - 438k
Conservative egg: keep car, contains healthcare emergency funds, moving expenses included, but still guesses 2k for children because I don’t have a clue - 504k
Notice too that none of these eggs contain extra capital for real estate purchases or investments. I’m open to considering those, I just don’t have them projected as you can see.
The Plan:Roth conversion ladder. Roll my 401k into the IRA after quitting, and little by little for that first 5 years convert funds from IRA to Roth while staying in the lowest income bracket, living off of my brokerage in the meantime via slow sell offs as necessary.
I don’t know about the 457 (if better to roll into IRA and go through the conversion ladder from there, or directly withdraw, or directly convert to roth). I have to do more research.

The Wrenches in the Plan:
We’re strongly considering having kids before I turn 35. We’re thinking 2 kids. We’re good at cutting our own living expenses, so I would expect we’re on the leaner side of child costs, but we don’t know how much to expect to set aside. We expect to do 50/50 split on expenses as always. We expect we’ll both be around (me earlier than her obviously) to not need daycare funds and we have no intention of showering kids with material things or a college fund (both of us got through college on our own). As for any fertility treatments if necessary, the actual hospital bills for birth, etc. I haven’t the slightest clue or savings – and even further complex if we have children abroad probably, or maybe for the better? I am leaving this one open ended, knowing I need further research. My partner does have free fertility benefits through her current employer, but she’s likely to retire in the next 3 ish years too (yay), but that may be just enough time to have 2 kids? We’re not sure, it of course also depends on variables we don’t know yet.
We also want to move abroad within the next 1-5 years if possible. We were thinking Germany because we both like it, I have friends there, and we both speak some German (me decently fluent, and she’s advancing quickly). I’ve only recently wrestled enough energy away from work to research that idea: not only do I have no clue how much it will cost to move our 700 square foot apartment of stuff over there (some of it is expensive amplifiers I can’t just buy randomly abroad), but I’m also finding out Germany would consider retirement distributions as ordinary income and Roths as brokerage accounts with capital gains taxes, effectively gutting the conversion ladder plan. That is, if I’ve understood right and haven’t stopped my research prematurely. Still would like to do it, if it’s not cost prohibitive, so looking for tips on this as a side note if anyone has any.
Things I know I don’t know: birth and childcare costs for 2 kids and some estimation of lean child rearing, whether or not it makes financial or other sense to have said kids abroad (Germany?), whether or not it’s even realistic to move abroad or what those parameters would be for two FIRE folks with kids (Germany, again, the primary I’d like to investigate), what moving physical assets would cost to move abroad, some sense or ideas for healthcare expectations in lean FIRE (again, sprinkling on the Germany possibility and how that may change it), what to do with my 457 in the wake of the roth conversion, and what music or other work may bring as income or if I should just pretend it’s $0 for these calculations (I don’t expect an answer for this, I just recognize it’s a problem).

Bottom Line:
What am I missing? What haven’t I thought about, or have made poor assumptions on? Am I just too eager to retire and I’m not being realistic? Have I not given enough info about something that could make a big difference?

I’m extremely grateful for you all. I’ve already received so much help on earlier posts and I don’t know how I’d even have come as close as I am without your help. So thank you for even reading this far, and thank you extra if you have any thoughts or questions!

ScreamingHeadGuy

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #1 on: January 09, 2023, 05:53:53 AM »
$2k a year for a child!  LOL.

I will let others blow bigger holes in your plan, but leave you with the below actionable advice.

Work until you have the kids and keep saving 80%.  Get a realistic picture of post-FIRE spending.  Reevaluate after the kids are born.

somers515

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #2 on: January 09, 2023, 07:22:17 AM »
"My average monthly spending right now is 1200
Average vacation expenses per year (also built on ~7 years of data): 1300"

So does that mean your annual spending is $15,700 (1200 x 12 + 1300)?  That includes health care and everything you spend annually?  That's lower than MMM spent annually in 2019.    https://www.mrmoneymustache.com/2020/01/27/mmm-2019-spending/

If so then 4% withdraw rate means you'd need 392,500 in savings and you aren't there yet.  Personally I'd be nervous with such a low number but if that's what your comfort level is and you annual spend really is then you have your target and it won't take you long to get there with an 80% savings rate.  Good luck!

LifeHappens

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #3 on: January 09, 2023, 08:39:08 AM »
Have you researched how to emigrate to Germany?

jeroly

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #4 on: January 09, 2023, 10:21:14 AM »
You will almost certainly have higher travel expenses after being FIREd as you will have more time available to travel.

You will likely have higher healthcare expenses as well even if you get great ACA subsidies (deductibles etc.)

When you write that you've "separated out emergency healthcare expenses, auto, travel, entertainment, utilities, rent, insurance for car and renter’s insurance, fitness, gifts and charity, some tech items (cloud storage, stuff like that), misc (minimal)" does that mean they haven't been included in your monthly $1200 costs?  If so, why not? I don't seeing any of that necessarily going away in FIRE except perhaps the gifts and donations.

You need to include 'sinking fund' savings accounts in your 'monthly nut' so that occasional, big-ticket items like car replacement, computer replacement, computer network upgrades, etc., have funding set aside for them.

You are drastically underestimating childcare expenses, even if you have perfectly healthy, well adjusted kids - there will be activity expenses (can get pricey for teens), food costs (can get pricey for male teens), diapers, occasional babysitting, etc.  Of course if your children have health or mental health issues the costs could be dramatically higher.

Have you considered switching jobs within your industry?  For example, working in IT for a nonprofit might be less stressful and more rewarding, and I think you may be able to get a similar salary to continue saving at your excellent rate.  Alternatively you might be able to find a high stress job that pays significantly more than your current salary - if you're saving 80% and spending ~15K, I would think you could potentially double your income  or more, as an IT director for 'big tech.'


Omy

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #5 on: January 09, 2023, 04:24:17 PM »
As an oversaver I may not be the best person to comment on an extremely lean FIRE plan, but here's my 2 cents.

Make sure your partner is completely on board with your plan. It's easy to become resentful (and find your partner less interesting) when they're goofing off and not contributing while you're slogging away. If you end up breaking up, your expenses (which are currently split in half) will go up or your standard of living will go down.

Consider coast-fire for the next 5+ years. Continue to make at least enough money to support your annual expenses and leave your nest egg alone. This should give you enough time to see how your life changes are going to affect your annual expenses...and give the market time to recover. Personally I'd keep the high paying job for a few more years and keep saving away, but that's what oversavers do. You have some big unknowns (children/moving out of the country) that could blow up FIRE plans, so coast-fire would give you time to figure these numbers out and allow you to adjust accordingly.

Frankly, I don't know many successful marriages with children where expenses are kept separate. Will she be responsible for "her" maternity costs? Who pays for what if your priorities are different?Will the marriage be strained if you don't want to spend money on items that are important to your partner? What's the backup plan if FIRE doesn't work and you have no intention of going back to get a "real" job...and now you have children to support?
« Last Edit: January 09, 2023, 09:04:52 PM by Omy »

Simpli-Fi

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #6 on: January 09, 2023, 06:01:21 PM »
Downshift or coast freeing up more time for music.  Change to PT or find a job that isn’t high stress.

You don’t need the high income but it is nice to cash flow your expenses while you figure things out.

Just my opinion

zolotiyeruki

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #7 on: January 10, 2023, 11:41:12 AM »
Our kids probably average $2k/year each, just on food.  Forget activities, clothes, toys, Christmas, childcare, school registration fees, driver's ed, orthodontia, glasses, car insurance, gas to drive them around.

Omy

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #8 on: January 10, 2023, 02:23:18 PM »
And copays. When the littles get sick (and they get sick a lot in the early years), they can't always tough it out like adults can.

maisymouser

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #9 on: January 10, 2023, 06:23:56 PM »

Adjusted Gross Income:
Not totally positive, as I’ve job hopped, and my brokerage and loss harvest has never been 18k before this year. I also don’t know if injecting my bonus into my 401k will carry major tax consequence or not. I’ll ballpark it around 90k +/- 3k

Are you currently maxing out your 401k? If so, how would you inject that bonus into the 401k? Would it be 100% considered employer contributions?

You need to include 'sinking fund' savings accounts in your 'monthly nut' so that occasional, big-ticket items like car replacement, computer replacement, computer network upgrades, etc., have funding set aside for them.

You are drastically underestimating childcare expenses, even if you have perfectly healthy, well adjusted kids - there will be activity expenses (can get pricey for teens), food costs (can get pricey for male teens), diapers, occasional babysitting, etc.  Of course if your children have health or mental health issues the costs could be dramatically higher.

+1. I hate to be a Debbie Downer but you are really incredibly underestimating expenses. I have a 4yo and we are what I consider to be uber frugal parents (minus daycare costs, since we both work). We did cloth diapering, breastfed, etc, but yeah- $2k/year is far too low, especially long-term.

I also chuckle every time someone says they know how many kids they want to have, before they have one. It's going to sound totally stereotypical but becoming a parent changes your life, irrevocably. Don't be surprised if your target # of kids changes after you have one and experience the torture that is sleep deprivation. I thought I'd be someone who wanted a dozen kids and who would fall in love with the baby phase. After one, I'm like, "eh, MAYBE we could have another, but it would be a giant PITA for a few years". I didn't realize how important my "me time" and "being able to do adult things without distraction" was to me. Just keep your mind open.


Frankly, I don't know many successful marriages with children where expenses are kept separate. Will she be responsible for "her" maternity costs? Who pays for what if your priorities are different?Will the marriage be strained if you don't want to spend money on items that are important to your partner? What's the backup plan if FIRE doesn't work and you have no intention of going back to get a "real" job...and now you have children to support?

*raises hand* I consider my marriage to be plenty successful with a kid. Keeping my finances separate from my spouse's has been one of the best decisions we've made as a couple. It's completely possible with a kid, if you communicate openly and can create agreements about who will be responsible for what (and obviously, follow through with them). In my case, I was the person who really really wanted to have our kid, with my husband very hesitant about the financial commitment (we are BOTH oriented toward FIRE, a match made in heaven!).

It might not work for most people but I agreed to pay for certain associated child costs so that I could pursue my dream of becoming a Mom. If you're a grown-ups about it you can go about creating and sustaining these agreements with little to no resentment.

It's not really *that* different from agreeing to who pays what in a shared household. Some couples agree to a 50-50 split for all expenses while others approach it with considerations about who *wants* an household item more, with others even splitting costs based on income.

I guess there would be implications for alimony if it came to a divorce in my relationship, but it obviously hasn't gotten to that. No regrets so far.

scubadog

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #10 on: February 12, 2023, 03:34:48 PM »
$2k a year for a child!  LOL.
And copays. When the littles get sick (and they get sick a lot in the early years), they can't always tough it out like adults can.
Our kids probably average $2k/year each, just on food.  Forget activities, clothes, toys, Christmas, childcare, school registration fees, driver's ed, orthodontia, glasses, car insurance, gas to drive them around.

Yes, I know I'm underestimating kids - I just have no figure to go off of, because I/we certainly don't fall under the "average american" figure of 13k per year per child. While I could just throw 13k in for my egg calculations, that's definitely fat fire for me, and I'm too miserable to stay in the job market for that long - I'm trying for asap, but still within realism. So: any ideas for costs per year? Those with kids: what is your average spending and if you separate out kid spending, what does that look like? Maybe I can rough out an estimate from that (e.g. someone spends 4k per month, 1k on kids, then in a relative sense I know how I'd compare).

"My average monthly spending right now is 1200
Average vacation expenses per year (also built on ~7 years of data): 1300"

So does that mean your annual spending is $15,700 (1200 x 12 + 1300)?  That includes health care and everything you spend annually?  That's lower than MMM spent annually in 2019.    https://www.mrmoneymustache.com/2020/01/27/mmm-2019-spending/

If so then 4% withdraw rate means you'd need 392,500 in savings and you aren't there yet.  Personally I'd be nervous with such a low number but if that's what your comfort level is and you annual spend really is then you have your target and it won't take you long to get there with an 80% savings rate.  Good luck!


Yes, my annual spending is a little under 16k, and includes healthcare and everything I spend annually. I'm just hardcore miserly I guess.

You will almost certainly have higher travel expenses after being FIREd as you will have more time available to travel.

You will likely have higher healthcare expenses as well even if you get great ACA subsidies (deductibles etc.)

When you write that you've "separated out emergency healthcare expenses, auto, travel, entertainment, utilities, rent, insurance for car and renter’s insurance, fitness, gifts and charity, some tech items (cloud storage, stuff like that), misc (minimal)" does that mean they haven't been included in your monthly $1200 costs?  If so, why not? I don't seeing any of that necessarily going away in FIRE except perhaps the gifts and donations.

You need to include 'sinking fund' savings accounts in your 'monthly nut' so that occasional, big-ticket items like car replacement, computer replacement, computer network upgrades, etc., have funding set aside for them.

You are drastically underestimating childcare expenses, even if you have perfectly healthy, well adjusted kids - there will be activity expenses (can get pricey for teens), food costs (can get pricey for male teens), diapers, occasional babysitting, etc.  Of course if your children have health or mental health issues the costs could be dramatically higher.

Have you considered switching jobs within your industry?  For example, working in IT for a nonprofit might be less stressful and more rewarding, and I think you may be able to get a similar salary to continue saving at your excellent rate.  Alternatively you might be able to find a high stress job that pays significantly more than your current salary - if you're saving 80% and spending ~15K, I would think you could potentially double your income  or more, as an IT director for 'big tech.'



Interesting - I had thought my travel expenses would go down actually, since I could leave on a random Tuesday and dodge holidays to get the lowest flight prices. Obviously I know flights aren't the only factor, but they're certainly the most expensive part in my situation (usually stay at friends places when traveling or cheap hotels, etc.). I hate vacation planning so I generally only travel 1-3 times per year, and always view it as 'extra,' so I won't do it if I don't think my finances are healthy. Before anyone asks "1-3 per year? How is that 1300 on average?" I just travel hack with credit card points. I don't see that situation as exceptional either really, since there's no sign of travel hacking drying up and I view travel as discretionary spending anyway.

Higher on ACA: that's disappointing news, but one I'll have to factor into my egg figure now I guess. Barring any good news on expat stuff, but I need to research that anyway.

The 1200 figure includes everything, except I calculate annual travel expenses on average separately, and I intentionally haven't factored kids into that figure since I have no clue on that number.

Sink fund: I considered that too, but I calculate that 1200 like an accountant, so I annualize everything I possibly can. That's to say, I may actually spend 900 one month and 1500 another, but the average year in total is a little under 16k, or 1200 per month. So the sink fund is somewhat already in there? I hear what you're saying though and I'd also planned to overshoot my egg a little for surprises, so maybe that takes care of the rest of the uncertainty.

Downshift or coast freeing up more time for music.  Change to PT or find a job that isn’t high stress.

You don’t need the high income but it is nice to cash flow your expenses while you figure things out.

Just my opinion

Answering this and Jeroly's mention: Part of the problem is I can't seem to escape the career path I'm on. I've tried career shifting or shifting into roles adjacent which would be less painful, or looking into state jobs that are a little more laid back, and every time I come up empty. This is a whole other topic though - I'm happy to elaborate further but I don't want to loose sight of the bigger picture by blathering on about this. My current short answer is: I have tried, short of falling off a salary cliff by seeking entry level jobs in a different industry (would they even have me? I'd be suspicious of me, on a specific path and suddenly a totally different entry level job).

As an oversaver I may not be the best person to comment on an extremely lean FIRE plan, but here's my 2 cents.

Make sure your partner is completely on board with your plan. It's easy to become resentful (and find your partner less interesting) when they're goofing off and not contributing while you're slogging away. If you end up breaking up, your expenses (which are currently split in half) will go up or your standard of living will go down.

Consider coast-fire for the next 5+ years. Continue to make at least enough money to support your annual expenses and leave your nest egg alone. This should give you enough time to see how your life changes are going to affect your annual expenses...and give the market time to recover. Personally I'd keep the high paying job for a few more years and keep saving away, but that's what oversavers do. You have some big unknowns (children/moving out of the country) that could blow up FIRE plans, so coast-fire would give you time to figure these numbers out and allow you to adjust accordingly.

Frankly, I don't know many successful marriages with children where expenses are kept separate. Will she be responsible for "her" maternity costs? Who pays for what if your priorities are different?Will the marriage be strained if you don't want to spend money on items that are important to your partner? What's the backup plan if FIRE doesn't work and you have no intention of going back to get a "real" job...and now you have children to support?
As an oversaver I may not be the best person to comment on an extremely lean FIRE plan, but here's my 2 cents.

Make sure your partner is completely on board with your plan. It's easy to become resentful (and find your partner less interesting) when they're goofing off and not contributing while you're slogging away. If you end up breaking up, your expenses (which are currently split in half) will go up or your standard of living will go down.

Consider coast-fire for the next 5+ years. Continue to make at least enough money to support your annual expenses and leave your nest egg alone. This should give you enough time to see how your life changes are going to affect your annual expenses...and give the market time to recover. Personally I'd keep the high paying job for a few more years and keep saving away, but that's what oversavers do. You have some big unknowns (children/moving out of the country) that could blow up FIRE plans, so coast-fire would give you time to figure these numbers out and allow you to adjust accordingly.

Frankly, I don't know many successful marriages with children where expenses are kept separate. Will she be responsible for "her" maternity costs? Who pays for what if your priorities are different?Will the marriage be strained if you don't want to spend money on items that are important to your partner? What's the backup plan if FIRE doesn't work and you have no intention of going back to get a "real" job...and now you have children to support?

As maisymouser says, I'm in the same situation too: true 50/50 split on kids, and that does include "her" maternity costs, which I see as "ours" and just split 50/50. We're doing great so far, neither of us are slackers, so I'm confident in this plan.

I truly don't think I could keep in a high paying job that I hate for 5+ years. Not to be too dramatic but I would actually consider suicide first, that's the level of misery we're talking about here. Not suicidal, just trying to add context on the levels here.

Have you researched how to emigrate to Germany?

A bit, but not to a level I'm satisfied with. What I've discovered so far is "it's not simple or easy, and you're going to have to do more research to find the right strategy."




Thank you all for the answers!

scubadog

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #11 on: February 12, 2023, 03:36:57 PM »
I'm in an interview process for a "parallel and possibly less awful job," but I've been here before and dont want to assume anything for success/failure of that.

I'm not seriously considering retiring in April or May anymore, I think I've heard what I needed to hear and accept I need to wait longer (misery aside).

That said, I'm still looking for more input if you folks have it! I'd still like to retire asap, and still am clueless about kids and other topics.

zolotiyeruki

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #12 on: February 13, 2023, 08:28:10 AM »
Here's my first input: identify specifically what you hate about your job.  Then determine 1) what you can change about the situation, and 2) how you can change your approach and attitude to the situation.

On the cost of kids:  It's hard to put a single number to it.  You have to drill down into all the details.  Little kids are pretty inexpensive.  Yeah, disposable diapers add up, but you can get clothes and gear for pennies (or less!) on the dollar.  Starting about age 5, little boys will tear through pants at a rate you wouldn't believe. 

And as they get bigger, so do their expenses.  Do you know what sort of registration or activity fees your local public schools charge?  Do you have ideas for what types of outside-the-house activities you'll sign your kids up for?  Do you and your partner have straight teeth?  What type of budget do you have for Christmas currently?

Once your kids get to about age 10-12, they'll be eating as much as you or your partner.  So you can scale your grocery budget accordingly.  Teenagers get *really* expensive.  $5k for orthodontia?  $500 for driver's ed?  An extra $500-1000/year in car insurance?  Add a car to the family for $5k so the kids can drive themselves around?  Activities--we do all of ours through the school and local park district, but they still cost a bunch, call it at least $10/week for a weekly hour-long class?  Music lessons at $30/week?

So, a wild guess here, but I'd say at least $1500/year/kid up to about age 10, $2.5k/year/kid until age 14, and $5k/year/kid until they're out of the house?

In terms of timing, my suggestion is "the earlier the better."  I'm 41, and our youngest kid will leave the house when I'm 51.  Some peers from my high school class just recently had their first kids.  They'll be sixty years old when their kid graduates.  When I imagine having a newborn, I think "oof, I'm glad I did that when I was younger and had more energy!"

Sandi_k

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #13 on: February 13, 2023, 08:45:12 AM »
I'd be looking for a PT job, with an aim to bring in $2k per month. Then your savings can continue to grow.

And at $24k per year, that's the equivalent of investable assets of $600k. Given how lean you live, you may even be able to save some out of that income, and working only 12-15 hours per week.


FIRE 20/20

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #14 on: February 13, 2023, 11:07:07 AM »
I'd be looking for a PT job, with an aim to bring in $2k per month. Then your savings can continue to grow.

And at $24k per year, that's the equivalent of investable assets of $600k. Given how lean you live, you may even be able to save some out of that income, and working only 12-15 hours per week.

I agree with this.  If you hate your job as much as you say and are confident that anything related would be just as bad, then I would try to figure out a way to do some form of CoastFIRE.  If your expenses really are in the $15k / year range, then a 20 hour a week job at $15/hour should very roughly cover all of your expenses.  Actually, I'd try to figure out a way to make $10k / year or more doing something you actually like.  Could you make a go of it doing something music related on Fiverr while keeping your day job for a little while?  Or could you find a part-time IT job?  Can you teach an instrument?  If you could charge $30/hour then you'd just need about 10 students / week to bring in about $15k / year, or probably a few more to cover expenses related to the job. 

Having super low expenses is your superpower.  It gives you a lot of flexibility.  You could work just a few more years at a high salary if you can make this or a similar job less terrible, you could find part-time work to cover your expenses to let the 'stache grow, you could find some way to make $10-20k / year doing something with music (can you teach any instruments?), or you could probably quit and just try a few things out while drawing down your assets - with the intention of going back if you can't make enough income doing something you're ok with. 

It seems like you could look at this as an exciting opportunity.  You live on about $15k a year, have 20 years of spending saved up, you have in-demand skills (IT) and interests (music) that should be able to bring in close to your living expenses each year.  It looks to me like you have lots of good options. 

Laura33

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #15 on: February 15, 2023, 07:10:47 AM »
If you want to have children, and you're sick of your job, why not move forward with the kids and be a SAHP?  Obv. your partner would need to be on board, as it puts the full income burden on her.  But your expenses are so low that it's likely not a tremendous extra burden, you'd save on daycare, and then your savings could continue to grow while you're minding the kid(s).  Basically, it's treating a SAHP role as your CoastFire job.

charis

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #16 on: February 15, 2023, 07:58:03 AM »
Regarding the 50/50 split on childcare costs, what happens if you disagree on an optional child related cost?  Such as a higher priced daycare/sport/artistic pursuit/school tuition/educational trip, etc, etc.  You may assume that you will always be on the same page regarding kid expenses, but I can assure you that things and life will change in ways that you can't predict at this point.  (Among other things, I could never guess that we'd be raising elementary school children during a global pandemic/shutdown).

Finances_With_Purpose

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #17 on: February 15, 2023, 11:33:55 PM »
If you want to have children, and you're sick of your job, why not move forward with the kids and be a SAHP?  Obv. your partner would need to be on board, as it puts the full income burden on her.  But your expenses are so low that it's likely not a tremendous extra burden, you'd save on daycare, and then your savings could continue to grow while you're minding the kid(s).  Basically, it's treating a SAHP role as your CoastFire job.

+1.  That was my exact reaction to your post.

Second, you sound done with the job regardless and you have other options.  You don't have the funds to early retire yet, by any calculation, but I suspect that your hatred of the job and the associated stress (which I can fully identify with, from past experiences) are driving the urge to undercalculate the expenses, especially for kids. 

You do, however, have funds to allow you to do any number of things that could merely cover your expenses until your nest egg can grow enough. 

On the upside, you can go PT and coast to FIRE, you could get a new job, or you could do the SAHP thing (and maybe even a side gig or two once the kids aren't so little/are in school).  You have plenty of options due to your frugality, you just need a good bit more room before pulling the big trigger.  That will also give you some runway with which to test your spending assumptions. 

It's hard to see past the stress when you're in it, but once you're out, I suspect that all of these in-between options are suddenly going to be a lot more fun and attractive-looking than they are now. 

Good luck on the interview!  You're moving in the right direction already. 

havregryn

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #18 on: February 16, 2023, 08:56:40 AM »
If you have a viable way to move to Germany (since you say you are fluent in German, I am guessing maybe a German parent and hence passport?), your plan is probably doable because Germany seems to me like a place that you can really live VERY cheap if you so desire plus they have generous child allowances (250 euros per month per kid). That is where I would FIRE to if I was after a very lean FIRE.
But you do need to do your research as if you don't actually have an EU passport it might be downright impossible to immigrate there without a job and even if you do have a passport, you might have to pay for health insurance if you don't have a job (I'm not entirely sure how their system works but there is something to pay if you don't work so that employer pays it).

We live in Luxembourg which is like a golden cage right next to Germany from which we look at them and think "why don't I just FIRE over there", Germany can definitely be done on a budget plus has an almost insane demand for workforce so it is probably fairly easy to immigrate if you can speak the language and want to work at least until you get citizenship.

joe189man

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #19 on: February 16, 2023, 11:53:40 AM »
I dont think you are considering housing in this equation and those costs will increase quite a bit if you have 2 kids.

I think your nest egg is way to small, even for your lean case. if you add kids and a bigger place i bet you really need $600k+ at the least or a part time job, but you cant watch the kids and have a part time job, unless its second or third shift, and at that point you are not really FIRED.

you are using past expenses and costs to create your FIRE number when you have so many unknowns coming in the next few years.
maybe destress your lives as much as possible, If you are stressed now, just wait till you have 2 kids and a job and a partner.

jeroly

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #20 on: February 16, 2023, 12:10:34 PM »

In terms of timing, my suggestion is "the earlier the better."  I'm 41, and our youngest kid will leave the house when I'm 51.  Some peers from my high school class just recently had their first kids.  They'll be sixty years old when their kid graduates.  When I imagine having a newborn, I think "oof, I'm glad I did that when I was younger and had more energy!"

My good friend had a fourth kid four years ago - he’ll be eighty when she goes off to college…

I don’t have the energy to keep up with my cat, let alone a four year old…and he’s older than me

Extramedium

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #21 on: February 20, 2023, 08:17:00 PM »
If you really can't go part time in the current job, and there's truly no other equivalent employer for your skills, then I agree with some of the earlier posters here.  Get a lower paying (probably part-time) job.  If you can just cover your expenses for a few year, compound interest will take care of building your nest egg.  If you can contribute a little (matching employer contribution?), it'll go even faster, of course.  Maybe gig economy side-hustle, or Barista FIRE?  $80k / year contribution isn't worth it, but quitting without any income is clearly not the only other option.  This a false dichotomy.

Extramedium

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Re: Reader Case Study - Finger on the trigger too soon?
« Reply #22 on: February 21, 2023, 07:44:42 PM »
The cost of raising children is the subject for an hour of discussion on the Mile High FI podcast released today.  Mostly anecdotal and more heavily concerned with costs of pregnancy and infancy.