We are trying to decide our next step. Currently I'm very dissatisfied with my current role at work and have expressed a desire to transfer to something different for the last 4 months and there are no other options available. But we feel like we are pretty close to pulling the plug in general but there is always the worry that stuff won't work out in early retirement.
Life Situation: We currently live in Texas and have 2 kids under 10. We are late 30's. I've recently finished my bachelors in CompSci while my wife runs a commercial property that we purchased. I work a normal 40 hour week but have some late meetings due to working with a team in India which I don't care for. My wife works from our commercial property 2-3 days a week but its very relaxed and she can do 95% of the work remotely and takes days off as needed for child care or vacations.
Gross Salary/Wages: My compensation is 105K year with a 5% 401k Match
Individual amounts of each Pre-tax deductions 401k Max mine out each year
FSA max out
Child care FSA max out
IRA max out after taxes are done based on what we can put in
insurance is about 400 month through my work
Other Ordinary Income: Currently have a small set of crypto mining rigs, My net profit from them varies but its in the range of 1,500 a month after paying for electricty. Don't know what will happen to profits in the future but the rigs have paid for them selves at the point and I'm all profit.
Qualified Dividends & Long Term Capital Gains: None
Rental Income, Actual Expenses, and Depreciation: We currently make about 85K/year from the commercial property. This factors in savings for capex and maintenance. We also are holding the note on a a property we sold a few years ago. There is about 55K left on the note and we get $330 a month. There will be a balloon payment due in 3 years or so and we expect the principal left at that time to be in the 52-53K range. We can also calim depreciation on the commercail asset in the range of 30K per year.
Adjusted Gross Income: Kind of all over the place. We max out any tax advantage account we can but with all the moving parts of our real estate and other things our taxes are a moving target most years.
Taxes: We have money set aside for taxes each year but with how in flux our life/business is we tend to not have much of an idea as to what we are going to pay until our CPA runs all the numbers.
Current expenses:
Mortgage 1850/month 1,100 PI 750 TI
Utilities(including power, internet, cell phones, trash, sewer) 700/month this is an avg, its higher in the hot months and lower in the cooler months. we are still getting used to the Texas heat so we probably keep our house cooler then optimal during the summer and have a higher bill to pay because of it. We did get additional attic venting installed at the end of the summer and we believe this should help during the next hot season to keep the house cooler with a lower electricity bill, but we will wait and see.
Cars 500/month includes fuels and maintenance and insurance. We currently have 2 cars and a truck and are looking to down size to 1 car and a smaller mare fuel efficient truck. Something along the lines of a Ford ranger, S-10, Tacoma. Depending on the trade in value we get we might have to come to the table with some additional cash for purchase this next vehicle out right. I do most of our vehicle maitnence so we project this to be high as long as we don't have any major issues
Food $850/month broken up between grocery and eating our. 5-600 from grocery budget and 250-350 for eating out. This is something that we have reduced over the last year as we have been decreasing the amount of times we are eating out
Kids 5K a year we allocate total for each kid to do 1 extracurricular activity and then just general kid activities/field trips/other non daycare kid stuff
Sundries Currently 400/month but we project this going down. One kiddo is still in diapers and we plan on this not being an expense by the end of the year hopefully sooner. Deffienetly room here to trim and it might be artificially high since our Costco membership is expiring soon and we have stocked up on most of the dry goods we get there like diapers, wipes, TP, paper towels, toothpaste and what not.
Daycare 15,000 a year for daycare for our youngest and an afterschool program for our older one. We would cancel both of these if we pulled the plug.
Gifts 3K year, We enjoy the holidays and both have large extended families. This also provides for the random birthday parties during the year our kiddos get invited to. This seemed high to us at first but after totaling the last holiday season the is pretty close.
General 10K/year. This includes everything form new cloths to vet visits for our dogs to projects around our house. We have been pretty free with this over the last year or two but it has included some optional little house projects and with the price of materials where they are at this doesn't go as far as it would have a few years go.
Health Currently we have pretty good insurance through my work and we pay 400/month. We do have some underlying heath conditions that are being treated but project spending in the range of 200-800 a month on prescriptions based on the type of plan we would have after leaving my job. After retiement we are projecting 1K as a round number
CapEX We allocate 3500 a year for home related capex stuff. Might not have something this year but we know at some point there will always be a home repair related expense coming.
Hobbies/Entertainment/Travel We are allocating 15K for this going forward. Its been all over the map the last few years with a big relocation and then covid messing with vacations. This would include traveling back to see family over the holidays in addition to a pretty hefty amount set aside for a large overseas vacation assuming covid is something we can deal with in the future. We lump all of these together sine we kind of view it as a sliding scale, if we are traveling less we will be spending more on hobbies and entertainment.
I know some of the expenses are round numbers but we very much like to have wiggle room in our budget to shift money form one category to another as needed. We also projected high on some to give us buffer room in planning for retirement.
We are projecting about a 100K budget but that includes a lot of buffer and a big chunk(15K) for fun stuff (vacations hobbies and entertainment). This 100K budget doesnt include federal taxes sine its hard to project with how many moving parts we have in our tax return.
Expected ER expenses: Health care is the big one. but we do plan on dropping day and after school care if I was to leave my job.
Assets:
Amount & description - include current asset allocation plan if you have one
Cash - 105K This includes reserves for taxes and our real estate property (we plan on moving anything over 50K into out brokerage after taxes are paid for 2021)
Brokerage Accounts - 202K
401K/IRA/SEP - 284K If I left me job I might lose a little of this. Womewhere in the range of about 5K that I still need another few years to vest. They changed the vesting and anything that gets matched now is fully vested.
Roth IRA - 123K
Crypto - 170K but this can fluctuate at times
Note - 55K
Fundrise - 1,400 (tried this out and at this point am planning on letting this money sit there since its a pretty small amount)
Total non cash investments 835Kish
Definition of assets: All of our brokerage/401K accounts are mixed between VTSAX, SP500 index funds and a few target date retirments funds. All are with vanguard. 98%+ equities
Primary Residence 450-500K
Commercial Property 1.8-2 million depending on the market
Note 55K
Liabilities:
30 year fixed on our home with 217K left @3.8% we have paid a little extra but still 26 years or so on the note.
20/5 commercial note for 750K we have a rate @5% currently and it adjusts every 5 years. we have 19 years left on the note and 4 years until the first rate adjustment.
No other debt, we pay off our CC every month and own our cars outright.
Specific Question(s): We are currently trying to decide what to do with our lives. I'm not currently happy with my job but having limited experience and I feel like I still have large gaps in my computer programing ability and would fail if I went somewhere else. I'm also not sure it its just the career in general that I don't like or where I currently work. My wife really enjoys running our commercial property and the flexibility it provides. In theory we should have no problem living off of the revenue from it but its scary to step away from a normal W2 job and the benefits it entails. We want to travel more but the property kind of ties us to the area, we can get away for a week or two at a time but anything more then that and we would not feel comfortable. We have looked at getting someone part time to help with it but its hard to justify the expense unless we are traveling extensively. And then we have to juggle the expense and reduction in income with the added expense of traveling. I guess we are just over all trying to figure out what will make us the happiest going forward.
I know I've probably missed info and was a bit all over the place so feel free to ask any questions and any bit of advice is welcome.
