Author Topic: UPDATE: Well - it happened. 49 yo male loses high paying job  (Read 22824 times)

former player

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #50 on: September 25, 2019, 01:20:32 PM »
If the $2.5m house is OP's wife's dream, telling him to "just sell it" may end up with no house, no wife and no money either.

OP: if one of the issues with selling the house is your SO you need to proceed with care.  You may be helped by reading the thread on how to convert your SO to mustachianism - https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/ 

ABC123

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #51 on: September 25, 2019, 01:49:30 PM »
1.  Sell fancy mansion, and never have to work another day of my life.  Spend my time with my family, volunteering, building up enjoyable hobbies, and do whatever I want with my time.  Buy a reasonable house that we can use our extra time to decorate ourselves.  Travel the country with my family, exposing my children to the world around them.

2.  Keep giant house that is (most likely) way too big for a family of 4, draining the world of resources to heat and cool tons of unused space.  Continue working for an unknown number of years.  Lose out on time with my family and doing things I genuinely enjoy doing. 

This seems like a no-brainer to me.  Is this house really worth what it is causing you to miss out on?

Villanelle

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #52 on: September 25, 2019, 01:58:58 PM »
And it's not just the freedom to spend time with one's kids.  Maybe the best gift my parents have ever given me is not having to worry about their finances.  Parents who don't manage to save quite enough become a huge financial burden on their kids, and often right when their kids are attempting to have and raise kids of their own.  I've seen both sides of this--hyper-frugal parents who have well more than enough in their senior years, and parents who made good money and spent great money and are therefore putting stress on their own children.  Forcing one's kids to decide if they are going to cut our their own children's ability to do any school activities or ever travel, or if they are willing to see dad live in a studio apartment in a questionable neighborhood, eat a pretty basic diet, and spend almost zero on recreation? It's an awful thing to do to one's children if it can be easily avoided.  And of course no one thinks that's where they are going to end up, yet so many of the people who think that will never happen actually do wind up there.  Is that worth them have huge bedrooms and a separate play area, and parents with a massive walk-in closet?

That said, to me, if you are going to keep the house, then you need to accept that this is your one splurge.  It means your wife doesn't just get her RE license, but she gets at least a part time job (search starting tomorrow, not being picky) ASAP.  And it means you stop 100% any eating out or convenience foods from the grocery store.  And you eat meatless 4x/week.  And you buy zero new clothing for anyone (if kids have a true NEED, it comes from Goodwill or similar). And cable?  Gone tomorrow. And all alcohol purchases end immediately.  And, and, and. 

You can say the house is the priority.  But that means NONE of those other things can be.  Especially not until you find another great job (not the part time work you and the wife are going to get ASAP). 

I doubt you are willing to do even half of that.  Because you don't just want the house.  You want everything about the lifestyle you have, except the finances. 

You get to have a non-negotiable.  But that means all the other things get negotiated.   Having both could cost you everything, plus a stable future for yourselves and your kids.  You want to keep the house?  Fine.  But then do what it takes to make that decision as un-irresponsible as possible. 


feelingroovy

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #53 on: September 25, 2019, 02:37:38 PM »
I agree with everyone else that really you should move, but I also recognize that sometimes you need some time to really come around to that decision. I got the impression from your OP that you are willing to consider that option but first need to understand whether your back is against the wall.

So in the meantime, let's try to to answer the question. Can you afford to keep the house?

It sounds like you will be selling the rentals and that will free up cash. Good. But can you keep your own house without blowing through that $700k? That would be good.

We know your mortgage payment is  just North of$7k/ mo. And you are bringing in $5k from the duplex. I assume that is cash flow after all expenses, not gross rents?

What are the rest of your expenses? I don't need them broken down, just total. Unless you want help figuring out how to reduce some of them.

It's possible that between the duplex income, a sustainable draw on the proceeds from the two rentals, and one or two part time jobs, you can do it. But we need numbers.

ZMonet

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #54 on: September 25, 2019, 02:38:20 PM »
OP -- As others have mentioned, you have a substantial amount of equity in real estate and surprisingly relatively little in equities.  Is the equity in the real estate the product of you pushing income to real estate, or is it predominantly the result of a super hot real estate market where you are?  If it is the latter, my concern would be that you don't have the fiscal discipline to keep the $2 million+ home.  Also if the latter, you should do as others have said and cash in your winning lottery tickets and reap the rewards.

Steeze

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #55 on: September 26, 2019, 04:52:35 AM »
PTF - good luck OP. Looks like you need a 100k or better job until the house is paid off unless your ready to downsize. Donít blow your severance - get a job ASAP. Donít wait for that unicorn job to come your way again, your overhead is too crazy for that. Look for that unicorn job, just donít pass up a reasonable 100k+ job with benefits in the mean time.

My vote is liquidate and retire, but I donít know how much the house means to DW. The kids will recover either way, no one needs to grow up in a trophy house. I asked my DW, her initial response was, ďnoooo! Keep the house!Ē Then I said, ďwhat if that means working an extra 10-15 years?Ē She gave me a disappointed, ďI guess I would sell the house...Ē

We are basically working our way towards your situation- wanting 1-2 kids, wife staying home, the high income, a couple rentals, and the dream house. This story really strikes a chord. A cautionary tale perhaps. Hope it works out for you.

JestJes

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #56 on: September 26, 2019, 10:57:25 AM »
And it's not just the freedom to spend time with one's kids.  Maybe the best gift my parents have ever given me is not having to worry about their finances.  Parents who don't manage to save quite enough become a huge financial burden on their kids, and often right when their kids are attempting to have and raise kids of their own.  I've seen both sides of this--hyper-frugal parents who have well more than enough in their senior years, and parents who made good money and spent great money and are therefore putting stress on their own children.  Forcing one's kids to decide if they are going to cut our their own children's ability to do any school activities or ever travel, or if they are willing to see dad live in a studio apartment in a questionable neighborhood, eat a pretty basic diet, and spend almost zero on recreation? It's an awful thing to do to one's children if it can be easily avoided.  And of course no one thinks that's where they are going to end up, yet so many of the people who think that will never happen actually do wind up there.  Is that worth them have huge bedrooms and a separate play area, and parents with a massive walk-in closet?

That said, to me, if you are going to keep the house, then you need to accept that this is your one splurge.  It means your wife doesn't just get her RE license, but she gets at least a part time job (search starting tomorrow, not being picky) ASAP.  And it means you stop 100% any eating out or convenience foods from the grocery store.  And you eat meatless 4x/week.  And you buy zero new clothing for anyone (if kids have a true NEED, it comes from Goodwill or similar). And cable?  Gone tomorrow. And all alcohol purchases end immediately.  And, and, and. 

You can say the house is the priority.  But that means NONE of those other things can be.  Especially not until you find another great job (not the part time work you and the wife are going to get ASAP). 

I doubt you are willing to do even half of that.  Because you don't just want the house.  You want everything about the lifestyle you have, except the finances. 

You get to have a non-negotiable.  But that means all the other things get negotiated.   Having both could cost you everything, plus a stable future for yourselves and your kids.  You want to keep the house?  Fine.  But then do what it takes to make that decision as un-irresponsible as possible.

This is so well said. I'm not trying to be mean here but there is a real risk that your will become a burden on your children. You already robbed from your future( 401k) to renovate this house and it seems to me that you are playing a dangerous game hoping you will be able to make the money to keep this place, although you have already admitted that it is unlikely.

I also agree that if you live in a fancy house in a wealthy neighborhood it will be hard to control other consumption. What are you going to tell your kids when they want to go to the movies with their friends or want o join a t-ball team with the neighbors? Its going to be especially hard to say no to these if you are guilty about not spending the quality time with your children that you want to.

I know this is such a tough situation but I would make a list of what your priorities really are. Think of what your priorities will be in the future. I am sorry this happened to you but it could also be a ticket to freedom. It just depends on how you act now.

habaneroNorway

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #57 on: September 27, 2019, 03:52:49 AM »
When bad shit happens, like loosing a high-paid job without good prospects of landing sth similar it is Not a Good Idea to have a 2.5 million house with a 1.2 million mortgage on it as a non-negotiable. And that's before property taxes, insurance, utilities and the various maintenance that will pop up every now and then. I assume it's a large house, so that means more expensive maintenance, more expensive heating and so on.

On top of that, your wife isn't working at all if I understand correctly. So as others have mentioned, the life-changes your family will need to do to keep this house are likely to be very big. I would argue they are way bigger than moving somewhere else - even within the city or even the neighborhood if something in a more reasonable price range is available.

Based on your somewhat short list of expenses you don't seem to live a very fancypants daily life so managing living costs is probably within limits. But you have left out some potential big-ticket items like eating out, holidays, activities for the kids

You could of course offload a couple of the rentals and use the proceeds to get your mortgage down to a more managable level in the absence of a high income and also reduce your exposure to real estate somewhat. But you will still be left with vast amounts of equity in your main house, and it's very important that both you and your wife understands that this equity - which for most people would be enough to never have to work again - is doing abseloutly nothing for you, earning no returns and providing no retirement savings unless you at some point down the road are willing to sell it and move. You can't sell a window, part of the roof or offload one of your probably several bathrooms to fund your retirement. On the contrary, it makes you spend more money on "housing" than you would if you lived in a smaller and cheaper space. What's the plan for saving?

Your rentals are also pretty much an outright bet on rising property prices. The yields are quite abysmal and in reality probably even lower than you mention as there are some costs you have or have not included in the cashflow estimates. You have very heavy real-estate exposure. That might work out just great in the end, but you have a lot of eggs in one basket.

There is a lot of cognitive dissonance between "wanting to FIRE in 10 years" and "keeping the house no matter what". You could retire yesterday if you wanted to, you have a shitload of equity sitting around earing almost nothing to less than nothing. It's your call if you want to unlock it or not.
« Last Edit: September 27, 2019, 03:55:17 AM by habaneroNorway »

former player

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #58 on: September 27, 2019, 05:44:28 AM »
Your rentals are also pretty much an outright bet on rising property prices.
Also a bet on the continued good health of the Cascadia subduction zone.  I hope OP has good earthquake insurance on all these properties.

SavinMaven

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #59 on: September 27, 2019, 06:57:15 AM »
Quote
I see a lot of people here advocating moving to a LCOL area. As someone who also loves in a HCOL area (even more so than Seattle) I get it that those comments wonít likely land well. There are reasons we choose to live in these areas and it is because they offer more in terms of quality of life for what we value.

I have lived in HCOL, MCOL, and LCOL areas during my adult life. Many assumptions get made about LCOL areas that are often untrue. Not every LCOL area is rural backwater; there are LCOL cities that are quite nice. It's a great big country with tons of variation. One LCOL area may not be for you, but a dozen others could make you happier than you thought possible. My advice is: don't knock it 'til you've tried it!

bigchrisb

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #60 on: September 27, 2019, 06:58:23 AM »
I've been reading this thread with interest, because I relate to it.  I'm younger (37, wife 39), and we keep debating the reverse situation.  We are FI already, and did a trial RE for a year with the arrival of our first kid.  Wife went back to her job, and I lasted 18 months before I started working again part time.  But the bit that interests me is the house choice.  Our house is nice - very central location, enough room for us etc.  We are in Australia with crazy property prices, and its around the $1m mark.  However, we keep looking at bigger, fancier places and dreaming (these are in the $2m price bracket).  It would give us a much nicer place to live, but take the finances from able to comfortably FIRE right now, to being borderline / needing to work a couple more years.   We have kept avoiding the upgrade, and have deferred the decision by my wife being posted overseas for a few years. 

Keep us posted on what you choose to do and why please - along with a follow up a few months down the track if possible!

Cpa Cat

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #61 on: September 27, 2019, 09:18:09 AM »
Quote
I see a lot of people here advocating moving to a LCOL area. As someone who also loves in a HCOL area (even more so than Seattle) I get it that those comments wonít likely land well. There are reasons we choose to live in these areas and it is because they offer more in terms of quality of life for what we value.

I have lived in HCOL, MCOL, and LCOL areas during my adult life. Many assumptions get made about LCOL areas that are often untrue. Not every LCOL area is rural backwater; there are LCOL cities that are quite nice. It's a great big country with tons of variation. One LCOL area may not be for you, but a dozen others could make you happier than you thought possible. My advice is: don't knock it 'til you've tried it!

I'm often bewildered by the assumptions about LCOL places, too. People seem to assume LCOL means low standard of living. But it doesn't. One of the most frequently cited reasons for not moving to a LCOL state is lack of specialized medical care and lack of excellent schools.

I'm sure middle-class people in Kansas City or Omaha are surprised to hear that folks in Seattle or San Francisco believe they are living in unsafe neighborhoods, with no good schools, and no access to specialized health care, and there's nothing to do but stare at corn all day.

Nick_Miller

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #62 on: September 27, 2019, 09:55:50 AM »
Quote
I see a lot of people here advocating moving to a LCOL area. As someone who also loves in a HCOL area (even more so than Seattle) I get it that those comments wonít likely land well. There are reasons we choose to live in these areas and it is because they offer more in terms of quality of life for what we value.

I have lived in HCOL, MCOL, and LCOL areas during my adult life. Many assumptions get made about LCOL areas that are often untrue. Not every LCOL area is rural backwater; there are LCOL cities that are quite nice. It's a great big country with tons of variation. One LCOL area may not be for you, but a dozen others could make you happier than you thought possible. My advice is: don't knock it 'til you've tried it!

I'm often bewildered by the assumptions about LCOL places, too. People seem to assume LCOL means low standard of living. But it doesn't. One of the most frequently cited reasons for not moving to a LCOL state is lack of specialized medical care and lack of excellent schools.

I'm sure middle-class people in Kansas City or Omaha are surprised to hear that folks in Seattle or San Francisco believe they are living in unsafe neighborhoods, with no good schools, and no access to specialized health care, and there's nothing to do but stare at corn all day.

I mean, I think we all get that HCOL places might have more cultural opportunities, a more progressive environment, perhaps access to the ocean, and possibly superior mass transit, and those are legitimately important to a lot of folks, but...yeah it's not like Middle America doesn't have hospitals or theaters or museums or educated people. My city has all of those things, and housing costs (from looking at HCOL-area mortgages) seem to be like a 1/3 what they would be in New York or Seattle or SF.

ysette9

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #63 on: September 27, 2019, 11:32:59 AM »
Let us not make this a debate about different areas to live because that will take us way off track. The important thing is to do a thoughtful reflection on what really is important to you and your family and be willing to question assumptions. People raise points about what really is a good school or not, a safe neighborhood, etc. Some people are fine with hot and humid weather if it avoids snow. Other people are okay with snow if it means they can go outside in the summer. Some people value various cultural or other diverse communities, or activities that arenít available everywhere. I donít think it does us any good to judge peopleís choices there. Again, the important thing is to be thoughtful about what is really important there and choose your location in a way to maximize what will make you happy for the money you have available.

bacchi

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #64 on: September 27, 2019, 12:27:00 PM »
Only you and your spouse have the power to turn yourselves from multi-millionaires into plain old middle class working stiffs, which is what you'll be if you can't get another job quickly enough or don't sell and walk away from the house.

This is probably the most important thing written in this thread. OP is in a slow motion train wreck. It may be averted -- you may be able to flip the wye lever, in train speak -- but the clock is ticking.

rockeTree

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #65 on: September 27, 2019, 12:34:49 PM »
Well I would cash out the real estate and move to Yakima (close enough to be in Seattle regularly to see friends, do activities with all your free time, friendly, safe, solid schools) and never work a day in my life again except for amusement or a reason to get out of bed. Maybe not today, you just moved and it's exhausting to think of doing it again, but this summer.

Build your own! Or buy:


https://www.zillow.com/homedetails/4306-Catalyss-Way-Yakima-WA-98908/251834254_zpid/ (modern)

https://www.zillow.com/homedetails/2200-N-Fork-Rd-Yakima-WA-98903/2088021522_zpid/ (rustic)

https://www.zillow.com/homedetails/9204-Yakima-Ct-Yakima-WA-98908/23679618_zpid/ (traditional)

https://www.zillow.com/homedetails/4203-Fellows-Dr-Yakima-WA-98908/23678471_zpid/ (views!)

https://www.zillow.com/homedetails/2-S-36th-Ave-Yakima-WA-98902/23683288_zpid/ (colonial charm)

etc etc

Is there no way in which you wife wants your family to be free to live an upper class lifestyle with all the time in the world and no financial worries at all?

Goldielocks

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #66 on: September 27, 2019, 02:54:34 PM »
I am a big fan of people living out their goals / dreams, and on focusing on only one (or two) goals to make them happen.

OP Jonah, your stated goal is to keep the dream house, that your wife designed, and raise your young / elementary school kids up in it.  Ok.  This is what that looks like.  It is certainly possible...

THE FOLLOWING IS BASED ON YOUR CURRENT MORTGAGE VALUE,   assumes a 30 year 3% low interest mortgage that does not make sense to refinance.

1)  First, figure out how much the home costs as an expense.  e.g., interest on mortgage ($36k/yr), utilities, maintenance, taxes in a year ($10k?).   I don't know if this is a large home, but it if is, large homes are quite expensive to heat, refit with flooring, a new roof,  or even to maintain landscaping (pool?) to a moderate level.   Best guess here $55k/yr or $4,600/month.  But maybe you have a 2000 sq.ft 2 storey newly remodelled home on a small lot downtown with minimal maint. costs...

2)  Next, find a way to make on-going income that is 3x that  amount, and target at least $130k/yr combined income (more is better), between you and your wife.   That is the bare minimum to carry this cost of housing.   HOUSING IS YOUR BIG GOAL.  THIS IS WHAT YOU NEED TO MAKE IT HAPPEN.

3)  Sell the rentals, at a rate that considers taxation, preferrably the duplex last due to its cash flowing a 6% return versus the 1% to 3% return on equity of the other two.

4) Sell one now, and the other two over time.  Pay off the 401k loan ASAP. Invest the rest conservatively.

5)  Use the $$ from the rental investment fund to pay $4000/mo of the mortgage (the rest of the mortgage comes from your income). So, draw down the investment each month.  Sell the second rental when the RE market is right or the cash reserves low.

6)  Live in your home for as many years as you like.  Sell when kids hit high school (the big home is less important then).  Make new goals (stay or sell).

7) Save as much as you can from your income and invested cash.   Try to create a FI fund or FIRE fund that is separate from your primary home equity.

This is not FIRE as the primary goal, but LIVE IN THE HOUSE until kids hit or finish high school as PRIMARY GOAL.

seattlecyclone

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #67 on: September 27, 2019, 03:51:29 PM »
taxes in a year ($10k?)

Try at least double that. Property taxes tend to run pretty close to 1% of value within the city of Seattle.

2Birds1Stone

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #68 on: September 27, 2019, 03:55:05 PM »
taxes in a year ($10k?)

Try at least double that. Property taxes tend to run pretty close to 1% of value within the city of Seattle.

That's cheap! 2.5-4% here

Goldielocks

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #69 on: September 27, 2019, 05:05:36 PM »
taxes in a year ($10k?)

Try at least double that. Property taxes tend to run pretty close to 1% of value within the city of Seattle.

That's cheap! 2.5-4% here
It's not the percentages that matter, it is the total $ number.  City property values vary by region, but city budgets should be roughly similar for similar amenties, age, climate, area size and population.

$25k/yr is not cheap... anywhere.

Cpa Cat

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #70 on: September 27, 2019, 07:02:50 PM »
One thing I'm always curious about when people come and post that something is a deal breaker for their spouse is how in depth the conversation has gotten? Did you tell her you were posting here? Is she reading the thread with you and discussing?

I had some friends who had to sell their custom 1.2 Million dollar dream home - which here in Low-Grade Middle America was a 6500 Sq Ft mansion in the fanciest part of town, with a lake-side view. Even though their financial situation was a slow-motion train wreck, they delayed for quite some time because it was a "deal breaker" for the wife. But the truth is, they never really sat down and looked at the numbers in a serious way. He would say "We need to sell the house" and then she would cry and say no, and the discussion would end. During the recession, the train more or less crashed and they finally sat down and faced the facts. Unfortunately, they had waited so long that they had to take a loss on it and sold it for just under a million (minus realtor commissions).

They downgraded to a very nice $500,000 house with a pool. But after a couple of years - and more tears, because she really liked that pool - decided to downgrade again to a nice $300,000 house. She's currently as happy in the $300k house as she was in the million dollar house.

Point being - she cried a lot. It wasn't ever easy for her to downgrade. She designed the original house. She loved the pool. But she was still able to sit down, look at the numbers, and accept that the best choice was to sell. There was resistance each time, but ultimately, she was able to let it go and move forward.

Sometimes I think that the OPs may not be giving their spouse enough credit. They get scared off by tears, or they make assumptions about how their spouse feels. At the end of the day though - has the OP had a more in depth discussion about this with anonymous Mustachians than he has with his wife?

As others have mentioned, it's certainly possible to stay in the expensive house, if that's your priority. Is it though? Does your wife understand what is needed to make that happen? Have you guys played a game of "Would you rather" where the choices are always "Keep the house" and "Have everything else - lower stress, financial security, great vacations, etc etc etc"?

optimusprimal

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #71 on: September 28, 2019, 06:17:09 AM »
I can't even conceive of buying a $2.5m house and my NW is twice that of OP.  More than 80% of his net worth is in his primary residence levered asset, he's 50 years old, and his job prospects aren't good.  What is the version of this where he keeps the house and this ends well?

This seems like a financial disaster waiting to happen.  For instance, let's say there is a recession next year and house declines 33% in value.  At the same time, OP has trouble finding job and he has problems with the tenants on his rental properties.  OP could easily find himself down 50% in NW and cannibalizing his remaining savings at the low point of the equity markets.  I would never take that kind of risk.

Even if the worst case doesn't happen I'm not sure what 10 years from now looks like even on the base case.  Too much house!

SwordGuy

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #72 on: September 28, 2019, 07:20:46 AM »
I can't even conceive of buying a $2.5m house and my NW is twice that of OP. 

We have a net worth of about $2.7m and have a $330k house.    And that's only because we could buy it for $228k!

Otherwise we would have stayed in our $120k house.

I read about the housing prices that other folks pay, compared to their salaries, and it boggles me each and every time!

henramdrea

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #73 on: September 28, 2019, 10:10:05 AM »
If the $2.5m house is OP's wife's dream, telling him to "just sell it" may end up with no house, no wife and no money either.

OP: if one of the issues with selling the house is your SO you need to proceed with care.  You may be helped by reading the thread on how to convert your SO to mustachianism - https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/

DING-DING-DING!!  Folks we have a winner!

The house is important to HIS WIFE.  The unwritten message here is that it's no-house, no-spouse.  He could easily LOSE IT ALL!  Hell hath no fury, etc.  In Washington state, the female side of the relationship gets some serious favoritism in the courts with regards to the family 'stache and kids unless some even more-pricey lawyers get involved.  Seen this happen first-hand.  Get lawyers involved and even more of the future gets pissed away.

I may be wrong on this, but I feel like the OP is telling us in very gentle terms that he may not have any say or any power in the decision on the primary residence.  For that reason, it's just simply "off the table"

Now, here's what could happen:  Wifey could come to her senses, realize she really doesn't like this place after a year or 3 and THEN be willing to unload it.  Who knows what the RE market is like in old Sea-town then, but the OP may need to wait the primary-residence thing out for a while anyway.

The repercussions could be dire.

Dicey

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #74 on: September 28, 2019, 10:34:04 AM »
I can't even conceive of buying a $2.5m house and my NW is twice that of OP. 

We have a net worth of about $2.7m and have a $330k house.    And that's only because we could buy it for $228k!

Otherwise we would have stayed in our $120k house.

I read about the housing prices that other folks pay, compared to their salaries, and it boggles me each and every time!
No offense to you personally, @SwordGuy, I'm a huge fan. I live in a HCOLA where $330k won't get you a 1+1 condo. I wonder if it would be more germane when this subject comes up to compare the price one pays for their house to the median price in their area?

I agree that the OP is over the top, even for his area, but not to the extent that examples like this imply. @ysette9 is a great example. Her house was crazy expensive to someone in the Midwest, but it was a moderate choice for her area.

Moving might be easier if you are an introvert with limited social contacts (not saying you are, SG), but humans are mostly social creatures. If your family, friendships and community connections are strong, it's not so easy to pull up stakes. Nor should a person feel forced or even just pressured to by an internet stranger just because that's what has worked for them. Mind you, the internet stranger might be dispensing that advice from the comfort of the place they've lived all their life (again, not you, SG).

I suspect the OP and his spouse might be enjoying the feeling that they've "arrived". Okay, they've earned it, they can afford to enjoy it for a while. Long term is a completely different question. I really, really like @Goldilocks way of thinking on this topic. OP and spouse need to crunch the cold, hard numbers and then make their decision(s) based on the facts.

Offering input based on your own experience is fine, but there are other considerations involved and everyone's situation is different. Everything is a trade-off and there is no one perfect answer. There are lots of paths to FIRE. One thing I see that's not been addressed is that OP has a house worth $2.5 million that seems to have cost him about half that. (Please correct me if I've misunderstood the numbers.) That is a huge win, no matter where you live. The question is whether it will become an albatross or their gold plated ticket to freedom.

ysette9

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #75 on: September 28, 2019, 10:56:27 AM »
There goes @Dicey, being all reasonable again

BicycleB

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #76 on: September 28, 2019, 11:51:24 AM »

I am even older and I can assure you SwordGuy and JestJes are right. IMO, there's nothing sadder than people who end up with nothing because they refused to make lifestyle adjustments along the way. I think you should give yourself and your family a hard time limit on keeping the house. No job paying over X by this date, and we're going on the market. Assuming the market holds, of course.

Come to think of it, the paid-for house I'm living in came about because the owner/builder turned down what he thought was a lowball offer just before the market tanked in 2008. He and his family decided to move into it. Five years later, he had to short sell the house. He basically lost everything. They are now divorced and he's estranged from them. Very sad.

OP, you're not going to like my opinion, but it's this: Dicey's comment here is your future unless you sell that house.

It sounds like you came here in 2014 hoping for financial freedom but then got lucky in your job and engaged in lifestyle inflation via Previously Unattainable Wife. I apologize if I'm overstating, guessing wrong or being unduly personal about people I haven't met - and for the record, I'm sure your wife is a beautiful lady with intelligence and heartfelt dreams, which your fat paycheck allowed her to bring into fruition. It's understandable you wouldn't want to take that away from her.

But if her staying with you is premised on keeping the house she just designed, by definition you're not going to Mustache your way out of this. You already gave up on that, and she didn't sign up for it, and you're only keeping the house long term if you go out and get another job that pays as well as the last one. (ETA: On re-reading, I notice you mention some other frugal signs. No disrespect, you've done a lot well.)

You posted upthread that you weren't going to get another job that pays as well?

Crap. You are probably right!

It's kind of inevitable though. Once you go into lifestyle inflation, the desires are always bigger than the paycheck. Getting lucky at work meant you had a choice between financial freedom and lifestyle inflation. You can't have both. It's just not how the world works.

You are extremely lucky that you have a year of severance, that the upcoming recession hasn't arrived yet, and that you have a chance to cut your losses without losing everything. Don't blow it.

In other words, if you face the emotional suffering now by selling the house and processing the short term pain, you have a brief window where you can still achieve FI. You're retired, but not FI. If your wife loves you enough to stay with you after you sell the house and say your future earnings are somewhere between zero and Relatively Low (compared to what she's used to), true love wins and your decisive new action will preserve financial security for the rest of your lives. Plus, it's possible that selling now will save you from a soon-to-come collapse in PNW real estate values. You might end up very happy not to be paying a huge mortgage in a couple of years. Heck, maybe you could even buy the house back at half price after the new owner goes broke! So go on a growth journey together - experience the loss together, go through the joy of building/buying/renting/rehabbing something different that's better but cheaper, grow closer from your unified experience. I hope that's what happens.

If your wife can't handle that, your dream of satisfying (or delighting) her is over and the question is how much of your current equity you will lose by delaying.

Gamblers lose everything because they keep playing when the odds are against them. What will you do?

PS. I will admit that your current plan - sell the rentals, get the job you can get, more or less scrape by accepting modest cuts elsewhere in order to hang on to the house - has a chance of working. It just also has a chance of failing, and makes it highly likely you will work for whatever you get, and that you may work a long time and still lose the house someday.

In the end, it's a values decision that involves both of your values. Maybe you both value the house (her recent effort) more than your time (your future effort). It's also a pain now vs pain later decision, where pain now probably (I think) brings much joy later, but it's hard to see the joy later through the pain that selling the house now would bring. I wouldn't blame you and your wife if you decided the next year was Farewell to House Year and you had special parties in it before you left or something, while selling the other properties. Maybe at some point your wife will find a cheaper new plan that she likes. Best of luck, and keep us posted.

Again, sorry if this isn't what you want to hear. It's just my opinion based on what you wrote.
« Last Edit: September 28, 2019, 12:19:24 PM by BicycleB »

mistymoney

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #77 on: September 28, 2019, 11:59:49 AM »
Quote
I see a lot of people here advocating moving to a LCOL area. As someone who also loves in a HCOL area (even more so than Seattle) I get it that those comments wonít likely land well. There are reasons we choose to live in these areas and it is because they offer more in terms of quality of life for what we value.

I have lived in HCOL, MCOL, and LCOL areas during my adult life. Many assumptions get made about LCOL areas that are often untrue. Not every LCOL area is rural backwater; there are LCOL cities that are quite nice. It's a great big country with tons of variation. One LCOL area may not be for you, but a dozen others could make you happier than you thought possible. My advice is: don't knock it 'til you've tried it!

I'm often bewildered by the assumptions about LCOL places, too. People seem to assume LCOL means low standard of living. But it doesn't. One of the most frequently cited reasons for not moving to a LCOL state is lack of specialized medical care and lack of excellent schools.

I'm sure middle-class people in Kansas City or Omaha are surprised to hear that folks in Seattle or San Francisco believe they are living in unsafe neighborhoods, with no good schools, and no access to specialized health care, and there's nothing to do but stare at corn all day.

I didn't see anyone speculate on anything of the kind. the post originally made on this just said "lifestyle" - and then others made assumptions on that and started defending against an imagined insult.

When someone mentions the lifestyle of a HCOL area not available in LCOL areas what I think is access to world-class museums, galleries, opera, symphony, ballet, theatre, enormous diversity in restaurants, comedy venues, professional sport teams for every sport, stadiums attracting the biggest and best bands, rappers, and singer, with easy walking or public transit to everything listed.


former player

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #78 on: September 28, 2019, 12:17:39 PM »
When someone mentions the lifestyle of a HCOL area not available in LCOL areas what I think is access to world-class museums, galleries, opera, symphony, ballet, theatre, enormous diversity in restaurants, comedy venues, professional sport teams for every sport, stadiums attracting the biggest and best bands, rappers, and singer, with easy walking or public transit to everything listed.
You are technically correct.  But given the numbers of people living in these HCOL area (many millions) and the far smaller numbers attending museums, opera and symphony, ballet, theatre etc (maybe in the hundreds of thousands each year, after allowing for tourists) I strongly suspect that there has to be something of a gap between "living in a HCOL because of the availability of world-class cultural experiences" and "actually partaking of those world-class cultural experiences".  In other words, a lot of it is just for show. 

Just living in a HCOL area makes one culturally superior, don't you know. /s

mistymoney

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Re: Well - it happened. 49 yo male loses high paying job
« Reply #79 on: September 28, 2019, 12:20:19 PM »
Wow -thanks to everyone for the response. Some real talk here -that's what I need.

As for the 401k loan - I called Fidelity last week to ask and it turns out I have the option to pay it back in monthly installments -so $900/mo.

One response asked if I had lived in one of the rental two out of the last five years and the answer is yes.
So maybe I should look to sell that one first? That may help with the capital gains situation. 

Its funny to see my old post from 2014 and think about where I was at that time with life.  The reality of my job situation is that there is no way I would probably ever make that much money in my field ever again. I got real lucky with something I worked on and it took off. Now the company wants to keep what I did and continue to make money off of it without paying me. And they can legally do that.  So -if and when I work again, it's going to be a long time. (if it's in this same field). After the year of them paying me not to work, I have another 3 months of a non-compete -so my value will be low at that point. I wont be able to compete against them until Jan 2021.   

This sucks, and I know others who this has happened to. When you work for the man, the man owns your work!

But - don't underestimate your ability to parlay this into a nice new job. This should be on your resume, what you did, made, and the expected annual revenue that company gets going forward. That makes you an extremely valuable potential asset.

If you think lightning will never strike again, keep that bit to yourself - show your enthusiasm for wanting to make similar contributions.

You left because of differing opinions on whatever, or different POVs, etc.

You can use this thing to your monetary advantage going forward, you need to package it right in the resume, in interview.

Maybe find a headhunter, let them try to upsell your worth.

ETA: how general or narrow is the noncompete?  How general or narrow is your ability to create something valuable that is outside the noncompete?

Can you be the guy working in his secret lab in the garage, aiming to have something fabulous to hit the ground running with 1 year, 3 months, and 1 day post separation?

« Last Edit: September 28, 2019, 12:26:29 PM by mistymoney »

mistymoney

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #80 on: September 28, 2019, 12:47:05 PM »
I've actually reread the entire thread looking for anything that would remotely warrant the nasty comments about OP's wife, and I found nothing aside from she designed the house, the entire family prefers to stay, and she is interested in selling real estate.

If she loves him enough? WTF people? He has asked several times for how to look at this in terms of keeping house. So I think we should do that. He's got plenty of info on the other route.

Back to numbers.

OP has 220k - 44k loan to work with immediately. That is 176k. Was the 220k pre or post tax?

yearly mortgage is 87k (hoping that is PITI not just PI!), and he reports 77k income on rentals. Based on the way that was presented, I am thinking that is net profit.

Potential maintenance issues on 4 residences is an issue, but putting that aside for the moment, How long could OP and family go without selling anything?

He'd have 176k to use, and 77k coming in yearly. And selling one of the other properties is always an option, but I'm thinking OP could go 3-4 years without having to sell anything. Maybe have a number that indicates 6 months till not being able to make ends meet, and put something on the market at that point.

I'd say have the wife begin to pursue the RE angle immediately. You are there at home to hold down the fort, no need to wait for Kindergarten for the youngest.

with 77k in RE income, how much more do you need per year to make ends meet? If 80k could do it, that is only 40k each. Can you do some contract work in your field that is outside of the noncompete?

Waiting 10 years to tap 400k in the retirement funds is iffy. Best case it'd be about 1M at that time, and to start draining at 59 is unrealistic. Also - since you say you lucked in high pay recently, you aren't likely looking at a higher SS check, especially if you get out of the work force now.

You and wife need to both start earning some money as soon as you can. Wife seems to be pretty in-tune with higher level real estate, so its possible she could really turn that to an advantage quickly. You are both in this together, so start thinking about how to work through this as a team.

Review your numbers, I think you have a long time frame to pull yourself out of this if you really want to.

mistymoney

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #81 on: September 28, 2019, 12:52:45 PM »
When someone mentions the lifestyle of a HCOL area not available in LCOL areas what I think is access to world-class museums, galleries, opera, symphony, ballet, theatre, enormous diversity in restaurants, comedy venues, professional sport teams for every sport, stadiums attracting the biggest and best bands, rappers, and singer, with easy walking or public transit to everything listed.
You are technically correct.  But given the numbers of people living in these HCOL area (many millions) and the far smaller numbers attending museums, opera and symphony, ballet, theatre etc (maybe in the hundreds of thousands each year, after allowing for tourists) I strongly suspect that there has to be something of a gap between "living in a HCOL because of the availability of world-class cultural experiences" and "actually partaking of those world-class cultural experiences".  In other words, a lot of it is just for show. 

Just living in a HCOL area makes one culturally superior, don't you know. /s

yeah - not everyone goes to all of those things every year, but a lot might do 1-2 per year. Some might even just do one every other year. They are still there.

Seems LCOL folks are kind of defensive. so ok. HCOL is just a rip off and people who live there are just suckers. fine.

Remember, this all started because someone mentioned not wanting to give up the lifestyle in the HCOL area, and that quickly turned into HCOL people thinking others watched corn grow.

Is it worse for you that I never bothered to think about what you all might be doing with your time?

ysette9

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #82 on: September 28, 2019, 01:22:27 PM »
@mistymoney - exactly, which is why I asked upthread that this not devolve into a HCOL vs LCOL debate. Seattle is lovely and it is possible to benefit from all it has to offer at $500k or $1m. No need to move out of the area to find a much more affordable home.

LWYRUP

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #83 on: September 28, 2019, 01:37:10 PM »

I will not harp on the sell the house point other than to say that of course everyone who has posted before is correct and it is obvious and OP knows that it is obvious.

I'll post to add an additional thought from a new perspective as a commercial transactions attorney:

Go talk to an experienced employment lawyer about your non-compete.  The law varies from state to state, and sometimes by profession to profession.  There are many cases in which folks sign non-competes that are too broad and potentially unenforceable. 

The fact that you are getting a lot of severance probably bolsters the likelihood that the non-compete is enforceable.  But, still, check.

Also, even if the company can prohibit you from getting paid employment, they cannot prohibit you from spending this time studying your industry, preparing a business plan, going to networking events, working on a consulting website detailing your accomplishments, writing a paper to publish to bolster your resume, writing a strategy paper about how to crush them starting the day the non-compete ends.

Your company can, at best, only stop you from publicly selling directly competing services during the non-compete time.  They cannot stop you from "working" generally and they cannot stop you from competing by laying the groundwork if you are not actively selling competing services and products.

Good luck!

(And sell your dumb house.)

mistymoney

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #84 on: September 28, 2019, 01:47:07 PM »

I will not harp on the sell the house point other than to say that of course everyone who has posted before is correct and it is obvious and OP knows that it is obvious.

I'll post to add an additional thought from a new perspective as a commercial transactions attorney:

Go talk to an experienced employment lawyer about your non-compete.  The law varies from state to state, and sometimes by profession to profession.  There are many cases in which folks sign non-competes that are too broad and potentially unenforceable. 

The fact that you are getting a lot of severance probably bolsters the likelihood that the non-compete is enforceable.  But, still, check.

Also, even if the company can prohibit you from getting paid employment, they cannot prohibit you from spending this time studying your industry, preparing a business plan, going to networking events, working on a consulting website detailing your accomplishments, writing a paper to publish to bolster your resume, writing a strategy paper about how to crush them starting the day the non-compete ends.

Your company can, at best, only stop you from publicly selling directly competing services during the non-compete time.  They cannot stop you from "working" generally and they cannot stop you from competing by laying the groundwork if you are not actively selling competing services and products.

Good luck!

(And sell your dumb house.)

excellent advice!

Cpa Cat

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #85 on: September 28, 2019, 05:11:43 PM »
I didn't see anyone speculate on anything of the kind. the post originally made on this just said "lifestyle" - and then others made assumptions on that and started defending against an imagined insult.

When someone mentions the lifestyle of a HCOL area not available in LCOL areas what I think is access to world-class museums, galleries, opera, symphony, ballet, theatre, enormous diversity in restaurants, comedy venues, professional sport teams for every sport, stadiums attracting the biggest and best bands, rappers, and singer, with easy walking or public transit to everything listed.

I have literally been to every single one of those items in your list within an hour of my house in a LCOL area. There's even an MLS team. I am vaguely amused by your Hail Mary of "oh and, you have to walk or take public transportation to them." Like you predicted I was going to say it, and you came equipped with "Oh but, you had to drive a car to hit ALL of them."

Look - there are legit reasons to stay in a HCOL area. For one, it's nearly impossible as an adult to recreate long-term friends and local family connections, so if that's an important part of person's life, it may be priceless.

But "culture?" That's BS. I have a friend who flew to New York to watch Hamilton and then watched it three more times locally. Her house is worth $150,000. She used Uber to get there all four times.

SavinMaven

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #86 on: September 28, 2019, 07:27:12 PM »
Quote
Let us not make this a debate about different areas to live because that will take us way off track. The important thing is to do a thoughtful reflection on what really is important to you and your family and be willing to question assumptions.

Bolding mine.

I agree 100% - and the assumptions that should be questioned include those surrounding where to live and quality of life. The financial impact of housing alone in a HCOL area can be heavier than all the savings optimized out of the rest of life (ask me how I know).

The comment that sparked this was "there are reasons people live in HCOL areas". Well, yes, of course. Also:
- there are reasons people lease a new car every few years
- there are reasons people build McMansions on golf courses
- there are reasons people fly first class
- there are reasons people replace their wardrobe each season

Of all the things to treat as a sacred cow, where one chooses to live is too important to not discuss. Simply assuming one's quality of life is higher in a HCOL area, if you've never tried living anywhere else, is an expensive assumption.
« Last Edit: September 28, 2019, 07:53:24 PM by SavinMaven »

cloudsail

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #87 on: September 28, 2019, 08:18:30 PM »
Seattle is HCOL but it doesn't cost $2.5M to live here. There are houses in my area (which is a really nice part of Seattle) that cost that much and they're really really really nice. Like super rich people mansion nice. You can live pretty much anywhere in Seattle with a family of four for at least half that amount and your only sacrifice would be living like a normal person instead of like the Kardashians.

ysette9

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #88 on: September 28, 2019, 08:34:41 PM »
Quote
Let us not make this a debate about different areas to live because that will take us way off track. The important thing is to do a thoughtful reflection on what really is important to you and your family and be willing to question assumptions.

Bolding mine.

I agree 100% - and the assumptions that should be questioned include those surrounding where to live and quality of life. The financial impact of housing alone in a HCOL area can be heavier than all the savings optimized out of the rest of life (ask me how I know).

The comment that sparked this was "there are reasons people live in HCOL areas". Well, yes, of course. Also:
- there are reasons people lease a new car every few years
- there are reasons people build McMansions on golf courses
- there are reasons people fly first class
- there are reasons people replace their wardrobe each season

Of all the things to treat as a sacred cow, where one chooses to live is too important to not discuss. Simply assuming one's quality of life is higher in a HCOL area, if you've never tried living anywhere else, is an expensive assumption.
Maybe I just need more sleep but this comment irritated me. Perhaps I just need to ignore it. It irritates me to have the decision to live in a HCOL area compared to what we would probably all agree are a list of foolish choices when that absolutely is not the case for all people choosing to live in HCOL areas.

For some people some time that is the case. For some people some time it absolutely is not the case. And there are always cases in between.

Iíll repeat what I said before. It is important to reflect on what is important in your life and choose a location that fits the bill. No different than the pillars of the FIRE movement of thinking carefully about your spending and doing so where it brings joy and cutting out the rest.

Point being, there are legit and logical and appropriate reasons to live in HCOL areas. Not for everyone. Fine. But dismissing that choice as always illogical like leasing a car is as bad as others always dismissing LCOL areas. Letís accept that we value different things and will be willing to pay for the things that are important to us. And for some people that means things that are only available in HCOL areas. No judgement needed.

Fru-Gal

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #89 on: September 28, 2019, 09:53:51 PM »
Some of us were born & raised in a HCOL. My area, in addition to being considered one of the most beautiful places to live in the world, has become one of the most expensive. I suppose it's useful to consider leaving just to question assumptions. But I can't imagine it being anything but painful to leave. I consider ours a forever home, though I do wonder now that it's worth a million*, if we could/should sell and move far away. My husband says he'd only consider it after the kids grew up and left. OTOH I have a dream that someday my grandchildren will play in the two-story Victorian play house my husband built for the kids when they were little. They say you shouldn't be emotional about houses but mine is a work of art.

*but low mortgage and taxes because we bought long ago

seattlecyclone

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #90 on: September 29, 2019, 12:21:11 AM »
I agree with previous posters that this isn't really the time or the place for a debate about the merits of living in a high-housing-cost area. This family has a high enough net worth to retire right now in a nice house in their current city, just not that nice of a house.

Just as a point of reference for people who aren't familiar with the Seattle real estate market, $2.5 million is far from a typical house price out here. It's about 3.5x Zillow's estimate of the median home value within the city limits, and 5x their estimate of the median within the metro area.

This is an extravagance that I think they seem ill-equipped to afford. It has also been mentioned as a non-negotiable item. There are ways to make it work by making extreme sacrifices elsewhere, but none that look likely to lead to retirement anytime soon, even though downsizing to something only twice the local median could likely lead to retirement right now. If that's the decision the family wants to make for themselves, I wish them all the best.

SavinMaven

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #91 on: September 29, 2019, 06:31:34 AM »
Quote
But dismissing that choice as always illogical like leasing a car is as bad as others always dismissing LCOL areas. Let’s accept that we value different things and will be willing to pay for the things that are important to us. And for some people that means things that are only available in HCOL areas. No judgement needed.

(bolding mine)

It really isn't about judgment. I know internet posts carry no tone of voice, no body language cues. We're all here to live better, and to help each other along the way. And we all have different comfort zones about what we're willing to discuss, and what seems too sensitive. Of all the people discussing this topic, I've noticed you've said a couple times that questioning assumptions is important, and I respect that. I enjoy questioning assumptions, including my own. I'm not trying to be obnoxious, I'm legitimately finding this discussion interesting and worthwhile.

The sentiment I bolded is expressed as fact. Presumably it's cognitively held as fact: there are many valuable features ONLY available in HCOL areas. That's a really big statement. But it is an opinion, not a fact. I held that as fact, too, when I lived in one of the most expensive cities in the country. But then I left it, and discovered that nearly all my assumptions about LCOL areas, and what people there had access to, were wrong. The main point I have tried to make, repeatedly, is "don't knock it until you've tried it", which I think is actually pretty neutral as far as value judgments go.

If I were posting on the forum that I have to drive a BMW, because there are features on it that I need that are only available on BMWs, I would hope someone would point out that Toyotas now have lane-assist and back-up cameras too. Or that Subarus come standard with AWD. Or whatever. If someone on the forum says "I can't be happy driving a Toyota", it's part of what we're all here for to put out there that "they might not be what you think". People who have never owned a Toyota are not experts on what Toyotas are like, and owners of Toyotas might have some useful input about them.

ysette9

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #92 on: September 29, 2019, 07:23:26 AM »
The beauty of the internet is you donít actually have to move to each different place available to determine if they have the particular amenities desired; an internet search will tell you that pretty readily.


I think we need to move on.

Back to the OPís situation. He doesnít need to move to a different area, just a less ridiculous house. Letís keep focused on what would help him.

mistymoney

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #93 on: September 29, 2019, 07:36:54 AM »
I didn't see anyone speculate on anything of the kind. the post originally made on this just said "lifestyle" - and then others made assumptions on that and started defending against an imagined insult.

When someone mentions the lifestyle of a HCOL area not available in LCOL areas what I think is access to world-class museums, galleries, opera, symphony, ballet, theatre, enormous diversity in restaurants, comedy venues, professional sport teams for every sport, stadiums attracting the biggest and best bands, rappers, and singer, with easy walking or public transit to everything listed.

I have literally been to every single one of those items in your list within an hour of my house in a LCOL area. There's even an MLS team. I am vaguely amused by your Hail Mary of "oh and, you have to walk or take public transportation to them." Like you predicted I was going to say it, and you came equipped with "Oh but, you had to drive a car to hit ALL of them."

Look - there are legit reasons to stay in a HCOL area. For one, it's nearly impossible as an adult to recreate long-term friends and local family connections, so if that's an important part of person's life, it may be priceless.

But "culture?" That's BS. I have a friend who flew to New York to watch Hamilton and then watched it three more times locally. Her house is worth $150,000. She used Uber to get there all four times.

hail mary? I wasn't predicting anything - I was describing my area. I honestly don't get this offense to HCOL people not being willing to give up where they live. It's like you have a pre-thought argument, and let me reiterate - I've never really considered what you have or don't have or how long you drive there. I'm just not interested in what it is, whatever that may be.

but to parse it out a bit more, first you say you have all those, and then you say "There's even an MLS team." Just one? I had stated there was one for every sport - not just one random team.

And - I'd really counter with you "have" all those on the other. I did stipulate "world class", perhaps it wasn't clear that that was meant to modify the entirety of the list presented for orchestras, opera, ballet, theatre, museums, galleries, etc.

Many smaller cities do have many of these, and they can frequently be quite good. But they aren't world class. They may have 1 -2 performers that could be at that level, and choose to live in a LCOL area for spouse or family or other reasons. But for the most part, artists will strive to get to the highest prestige performing group they can. And for a world class orchestra, for example, every single musicians is spectacular, the soloists are usually extraordinary, with some of them for the history books.


https://www.udiscovermusic.com/classical-features/best-orchestras-worlds-greatest-top-10/

henramdrea

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #94 on: September 29, 2019, 08:38:16 AM »
I've actually reread the entire thread looking for anything that would remotely warrant the nasty comments about OP's wife, and I found nothing aside from she designed the house, the entire family prefers to stay, and she is interested in selling real estate.

If she loves him enough? WTF people? He has asked several times for how to look at this in terms of keeping house. So I think we should do that. He's got plenty of info on the other route.

Back to numbers.

OP has 220k - 44k loan to work with immediately. That is 176k. Was the 220k pre or post tax?

yearly mortgage is 87k (hoping that is PITI not just PI!), and he reports 77k income on rentals. Based on the way that was presented, I am thinking that is net profit.

Potential maintenance issues on 4 residences is an issue, but putting that aside for the moment, How long could OP and family go without selling anything?

He'd have 176k to use, and 77k coming in yearly. And selling one of the other properties is always an option, but I'm thinking OP could go 3-4 years without having to sell anything. Maybe have a number that indicates 6 months till not being able to make ends meet, and put something on the market at that point.

I'd say have the wife begin to pursue the RE angle immediately. You are there at home to hold down the fort, no need to wait for Kindergarten for the youngest.

with 77k in RE income, how much more do you need per year to make ends meet? If 80k could do it, that is only 40k each. Can you do some contract work in your field that is outside of the noncompete?

Waiting 10 years to tap 400k in the retirement funds is iffy. Best case it'd be about 1M at that time, and to start draining at 59 is unrealistic. Also - since you say you lucked in high pay recently, you aren't likely looking at a higher SS check, especially if you get out of the work force now.

You and wife need to both start earning some money as soon as you can. Wife seems to be pretty in-tune with higher level real estate, so its possible she could really turn that to an advantage quickly. You are both in this together, so start thinking about how to work through this as a team.

Review your numbers, I think you have a long time frame to pull yourself out of this if you really want to.

Well firstly, what I speculated on wasn't meant to be nasty regarding the OP's spouse...that's your projection there.  My speculation was based on the fact that the OP said he wrote a bunch about why he needs to keep the house and then promptly deleted it before posting....I was ass-uming.  Anyway, the alternate view for why one might so doggedly hang on to such an over-the-top home was that it meant more to his spouse than him, and could be something she'd be willing to "go to the mat" over.  I'm not going to poke that hornets nest any further.  I do appreciate you working the numbers above for the OP though :)

Back to living in Seattle.  Yes there's less expensive, very nice homes for 35% of the estimated value of the OP's home (if it were me and DW, we'd sell...heck we did just that in 2016), but unless you've lived in Seattle, driving from the outskirts into the city or taking public transportation is time consuming.  It could take up to an hour or more to get from Normandy Park (mentioned up-thread as an alternative) to the city by bus.  Not much less by car.  If the kids stay in their respective schools and activities in the city, that may represent hours in the car per day.  Yes the kids could change schools to the local one, make new friends and move on (mine did just fine with this part).  I'm playing devil's advocate for the OP as why he's so willing to take the face-punches on the house.

Personally, I'd be dunzo-outta there.  Like someone up-thread mentioned, "he's won!"  He could sell the main house, 2 rentals, move to Bainbridge and never look back.  But......it's a mystery.

Tuskalusa

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #95 on: September 29, 2019, 08:46:01 AM »
Totally agree that there are hard choices here. If OP loves the house, then he needs to look at how he can fund it without signing up for unsustainable debt support.


The size of the mortgage on the primary residence is simply unsustainable. Weíre talking about shelling out over $7k per month before the basics, like food and utilities. It keeps a person tied to high-paid work for the next 20 years. Given the cyclical economy, as well as other factors out of our control, this is a risky prospect.

But I get it. We have an expensive house we love.  The difference is that itís 90% paid off.  If I had to sell it to keep my life sustainable, Iíd do it. But I wouldnít like it.

If the main residence is the priority, I would consider selling off all the other properties and using the proceeds to pay off the primary mortgage. Then you life goes back to something sustainable.  If the main house is the priority, the how about taking the year to shift your assets to fund it, and cut the rest.

mistymoney

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #96 on: September 29, 2019, 09:51:19 AM »
The other side of this business is that OP got sucker punched at the job, especially as they will continue to make money off of his brainchild.

That's gotta hurt a lot. And I think it has impacted his self-esteem and self-efficacy, as he says he won't be able to produce another such work nor command that salary.

Since the severance is more than enough to keep the family going for 2 years (with the rental income), I think OP may be best served by taking a few months to chill out and reflect on things, get over the shock, and come up with a plan at a more leisurely pace.

The only real danger is a sudden collapse of the housing market - but it could just as easily appreciate.

Take some time to process this a little more, enjoy your time with the family, and think about next steps for your career as well as what you might be able to create in the future.

I'd say treat this like any other loss - take 6 months to figure out what direction you want to go.

seattlecyclone

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #97 on: September 29, 2019, 10:14:41 AM »
Back to living in Seattle.  Yes there's less expensive, very nice homes for 35% of the estimated value of the OP's home (if it were me and DW, we'd sell...heck we did just that in 2016), but unless you've lived in Seattle, driving from the outskirts into the city or taking public transportation is time consuming.  It could take up to an hour or more to get from Normandy Park (mentioned up-thread as an alternative) to the city by bus.  Not much less by car.  If the kids stay in their respective schools and activities in the city, that may represent hours in the car per day.  Yes the kids could change schools to the local one, make new friends and move on (mine did just fine with this part).  I'm playing devil's advocate for the OP as why he's so willing to take the face-punches on the house.

The OP has no need whatsoever to move to Normandy Park or Bainbridge (the latter of which is by no means a bastion of affordability these days). They have $1.3 million of equity in their primary residence. That can buy a truly excellent home on basically every block within the city. If they don't live on one of those blocks, they don't have to travel far to find one that qualifies.

cloudsail

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #98 on: September 29, 2019, 11:31:50 AM »
For context, a quick redfin search:
https://www.redfin.com/WA/Seattle/3409-13th-Ave-W-98119/home/129449?utm_source=android_share&utm_medium=share&utm_nooverride=1&utm_content=link

This is in Queen Anne, right in the heart of the city. It's almost 3000 sq ft. It has water views. It's completely updated on the inside. School district is awesome. If you can't be happy in a house like this, I don't think anybody can help you.

Now imagine what kind of house the OP is living in that is worth $2.5M.

cloudsail

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Re: UPDATE: Well - it happened. 49 yo male loses high paying job
« Reply #99 on: September 29, 2019, 11:36:14 AM »
Okay, no need to imagine, here's one for just under $2.5M:
https://www.redfin.com/WA/Seattle/715-W-Prospect-St-98119/home/133516?utm_source=android_share&utm_medium=share&utm_nooverride=1&utm_content=link

Wow, I think this is the kind of house I might buy if I won the lottery.