Race from $2M to $4M...and Beyond!

[markbike528CBX]

Between Friday and so far today....ticked over $2.5M invested.  That's my target of 50X expenses, not counting college for the kids.  Son #1 is finishing up and will be done in October.  Nice that summer courses are all discounted.  Son #2 starts community college in the fall, which is under $10k a year plus we'll buy a car for him to use.  That's mouse nuts compared to the now $70k that Son #1's college is charging.  He may go to grad school but plans to work for a bit first as he prepares his application, takes the GRE and gets in sync for a fall entry.  Looking only at in state colleges (because I've said I'm done paying for private college), so it'll be a lot easier to pay for.

If he can't get grad school paid for he should probably not go.  Graduate programs that cost money are usually a poor ROI.

+1
And if GRE AND entrance tests go well, fall entry is an option.

[Exflyboy]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

[Dicey]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

Where?

[ysette9]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

I hear you. We are not that far over the line of $2M invested and it feels like the market could take it away any moment here.


It is weird to simultaneously feel crazy rich and also like it isn’t enough and we need to save up more because you just don’t know.

[Exflyboy]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

I hear you. We are not that far over the line of $2M invested and it feels like the market could take it away any moment here.


It is weird to simultaneously feel crazy rich and also like it isn’t enough and we need to save up more because you just don’t know.

Well it WILL take it away from us at some point.. But yet we (have to) stay

[londonbanker]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

I hear you. We are not that far over the line of $2M invested and it feels like the market could take it away any moment here.


It is weird to simultaneously feel crazy rich and also like it isn’t enough and we need to save up more because you just don’t know.

I hear you. When my wife and I broke the £1m mark, we celebrated at a fancy restaurant, as it was very symbolic to us. And we felt we had come a long way, being historically big spenders.
When we crossed the £2m mark 3 months ago, we were each reading our own book on our side of the bed and I told my wife about that nice milestone. She briefly looked at me and said “well done love” - before returning her attention to her book.
Although we are big earners, we don’t feel rich as we have become big savers (65-70% saving rate a year)

[ysette9]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

I hear you. We are not that far over the line of $2M invested and it feels like the market could take it away any moment here.


It is weird to simultaneously feel crazy rich and also like it isn’t enough and we need to save up more because you just don’t know.

I hear you. When my wife and I broke the £1m mark, we celebrated at a fancy restaurant, as it was very symbolic to us. And we felt we had come a long way, being historically big spenders.
When we crossed the £2m mark 3 months ago, we were each reading our own book on our side of the bed and I told my wife about that nice milestone. She briefly looked at me and said “well done love” - before returning her attention to her book.
Although we are big earners, we don’t feel rich as we have become big savers (65-70% saving rate a year)

In your case though you admittedly have fewer of the "just don't knows" than we poor saps in the US have. How lovely it must be to not have Healthcare and University as two massive financial liabilities/unknowns in your future.

[Car Jack]

Between Friday and so far today....ticked over $2.5M invested.  That's my target of 50X expenses, not counting college for the kids.  Son #1 is finishing up and will be done in October.  Nice that summer courses are all discounted.  Son #2 starts community college in the fall, which is under $10k a year plus we'll buy a car for him to use.  That's mouse nuts compared to the now $70k that Son #1's college is charging.  He may go to grad school but plans to work for a bit first as he prepares his application, takes the GRE and gets in sync for a fall entry.  Looking only at in state colleges (because I've said I'm done paying for private college), so it'll be a lot easier to pay for.

If he can't get grad school paid for he should probably not go.  Graduate programs that cost money are usually a poor ROI.

The specialty he wants to work in has good demand, but every single job requires a Bachelors AND 5 years related experience or a Masters and no experience.  Catch 22.  He had an internship doing this (stress analysis of structures using finite element analysis) and his senior project is specializing in this.  He'll look for a teaching assistantship or research assistantship to reduce cost. 

[Exflyboy]

@ysette9 Yup.. thats why I'm keeping my UK citizenship!

Today though.. We are all a little bit richer.. Until tomorrow at least...:)

[Car Jack]

Between Friday and so far today....ticked over $2.5M invested.  That's my target of 50X expenses, not counting college for the kids.  Son #1 is finishing up and will be done in October.  Nice that summer courses are all discounted.  Son #2 starts community college in the fall, which is under $10k a year plus we'll buy a car for him to use.  That's mouse nuts compared to the now $70k that Son #1's college is charging.  He may go to grad school but plans to work for a bit first as he prepares his application, takes the GRE and gets in sync for a fall entry.  Looking only at in state colleges (because I've said I'm done paying for private college), so it'll be a lot easier to pay for.

50x expenses!!!! Why???
I'm shooting for 33.33 (which is $2.5-not including house value) and I thought that was too conservative.

I'm a big "safety net" guy.  I want to be absolutely sure.  Also will allow me to splurge if I want and break the budget now and then.  A 911 GT-3 is a possible purchase.  Heck....when I was in grad school, I could graduate one of 3 ways.  Thesis, Report with added courses or Graduate (PhD entry) exam with 2 extra courses.  I did all three until I passed the exam.

[2sk22]

We are at 45x right now but my wife still gets worried thinking that we will wind up impoverished in a homeless shelter :-)

I've run all the calculators and have managed to assuage her fears a little. She now has no problem with at least me retiring within the next year while she continues to work - progress!

[BeanCounter]

well, I still plan on retiring in May of 2020 and we should be at 33% of spending. We are 42 and DH still wants to work. Right now he says he wants to keep going until the kids are either in or finished with college. That would be somewhere around 12-15 more years. So suppose it's entirely possible that by the time he pulls the trigger we could be at 50% of spending, or much more.

[mjr]

50x expenses!!!! Why???
I'm shooting for 33.33 (which is $2.5-not including house value) and I thought that was too conservative.

11 months in to my first year of fire - I have 90x for the first year :-)

[ysette9]

@ysette9 Yup.. thats why I'm keeping my UK citizenship!

Today though.. We are all a little bit richer.. Until tomorrow at least...:)

I actually have citizenship as well, but still need to convince my husband to take a leap and try living there to see how we like it. :) A solid Plan B for when things get to screwed up over here and maybe I’ll manage to convince him to make it Plan A. You never know!

[londonbanker]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

I hear you. We are not that far over the line of $2M invested and it feels like the market could take it away any moment here.


It is weird to simultaneously feel crazy rich and also like it isn’t enough and we need to save up more because you just don’t know.

I hear you. When my wife and I broke the £1m mark, we celebrated at a fancy restaurant, as it was very symbolic to us. And we felt we had come a long way, being historically big spenders.
When we crossed the £2m mark 3 months ago, we were each reading our own book on our side of the bed and I told my wife about that nice milestone. She briefly looked at me and said “well done love” - before returning her attention to her book.
Although we are big earners, we don’t feel rich as we have become big savers (65-70% saving rate a year)

In your case though you admittedly have fewer of the "just don't knows" than we poor saps in the US have. How lovely it must be to not have Healthcare and University as two massive financial liabilities/unknowns in your future.

I do agree about healthcare, and partly on university as fees aren’t cheap either (£10k a year + living expenses) - but on a like for like real estate is much much more expensive than in the US, outside of Top 5 US cities that would be more aligned to London. That difference in housing cost I believe more than make up for university cost differetiential - and some.
HC is a b@TCH though - I agree and would never move back to the US for that reason alone.

[ysette9]

Am I the only one with a massive sense of imposter syndrome on this thread?

There are freaking rich people on here I tell ya!...:)

I hear you. We are not that far over the line of $2M invested and it feels like the market could take it away any moment here.


It is weird to simultaneously feel crazy rich and also like it isn’t enough and we need to save up more because you just don’t know.

I hear you. When my wife and I broke the £1m mark, we celebrated at a fancy restaurant, as it was very symbolic to us. And we felt we had come a long way, being historically big spenders.
When we crossed the £2m mark 3 months ago, we were each reading our own book on our side of the bed and I told my wife about that nice milestone. She briefly looked at me and said “well done love” - before returning her attention to her book.
Although we are big earners, we don’t feel rich as we have become big savers (65-70% saving rate a year)

In your case though you admittedly have fewer of the "just don't knows" than we poor saps in the US have. How lovely it must be to not have Healthcare and University as two massive financial liabilities/unknowns in your future.

I do agree about healthcare, and partly on university as fees aren’t cheap either (£10k a year + living expenses) - but on a like for like real estate is much much more expensive than in the US, outside of Top 5 US cities that would be more aligned to London. That difference in housing cost I believe more than make up for university cost differetiential - and some.
HC is a b@TCH though - I agree and would never move back to the US for that reason alone.

Out of curiosity I did a quick search online for cost of living comparison. It looks like London would be a bit more affordable than where we live now.

[Exflyboy]

Haha.. In recent years when we've travelled back to the UK it seems the prices of things generally are quite a bit higher than we are used to spending up here in Oregon.

Except healthcare of course!

The other thing about the UK is that space is generally quite limited, In Oregon we sit on 5.5 acres that would be almost unheard of in the UK unless you owned a farm.

VAT I believe is currently 20%. I think our Federal taxes are generally lower in the US also. Not that I know because we don't pay any..:)

[ysette9]

I haven’t looked into what life would really cost and how things like taxes would work if we relocated to the U.K. That is a whole other layer of complexity that aphid clearly ne very important.

[londonbanker]

Oh yes. I forgot tax rate. My marginal tax rate is 47% and VAT at 20% feels steep. But there again, property tax is super cheap (currently paying 0.2% of my house value annually). So loads of up/down in comparison categories.
Cost of living comparison in major US capitals (Bay area, NYC, LA etc...) vs London isn’t that dissimilar - what might skew things lately is the historically weak GBP/US making London look cheaper that it actually is when FX adjusted.

[ysette9]

Oh yes. I forgot tax rate. My marginal tax rate is 47% and VAT at 20% feels steep. But there again, property tax is super cheap (currently paying 0.2% of my house value annually). So loads of up/down in comparison categories.
Cost of living comparison in major US capitals (Bay area, NYC, LA etc...) vs London isn’t that dissimilar - what might skew things lately is the historically weak GBP/US making London look cheaper that it actually is when FX adjusted.

Is there a difference in how taxes work for earned income vs investment income? Can a FIRE-ee expect lower taxes than a working stiff?

[markbike528CBX]

Oh yes. I forgot tax rate. My marginal tax rate is 47% and VAT at 20% feels steep. But there again, property tax is super cheap (currently paying 0.2% of my house value annually). So loads of up/down in comparison categories.
Cost of living comparison in major US capitals (Bay area, NYC, LA etc...) vs London isn’t that dissimilar - what might skew things lately is the historically weak GBP/US making London look cheaper that it actually is when FX adjusted.

Is there a difference in how taxes work for earned income vs investment income? Can a FIRE-ee expect lower taxes than a working stiff?

TL;DR, Yup, wage work is Expensive in taxes.

https://engaging-data.com/tax-brackets/
By forum member CCCA ( same person site as Rich, Broke or Dead calculator)

Note that " capital gains" ONLY includes the gains, not the withdrawal amount.
Example:If you withdrew from a taxable account that had doubled in value, your taxable amount is 50% of the withdrawal, not the whole amount that you get and spend.

On this forum, the tax thead, and specifically:
https://forum.mrmoneymustache.com/taxes/taxes-in-early-retirement-(gocurrycracker-links)/

[londonbanker]

Oh yes. I forgot tax rate. My marginal tax rate is 47% and VAT at 20% feels steep. But there again, property tax is super cheap (currently paying 0.2% of my house value annually). So loads of up/down in comparison categories.
Cost of living comparison in major US capitals (Bay area, NYC, LA etc...) vs London isn’t that dissimilar - what might skew things lately is the historically weak GBP/US making London look cheaper that it actually is when FX adjusted.

Is there a difference in how taxes work for earned income vs investment income? Can a FIRE-ee expect lower taxes than a working stiff?

To keep things simple... If you have managed your investment well overtime and made use of the tax free wrappers, deductions, exemption etc... a married couple can earn about £60-70k a year from investment return virtually tax free. Anything above that will trigger taxation that is still 10% lower than the equivalent marginal tax rate of the “working stuff”.

[ysette9]

Oh yes. I forgot tax rate. My marginal tax rate is 47% and VAT at 20% feels steep. But there again, property tax is super cheap (currently paying 0.2% of my house value annually). So loads of up/down in comparison categories.
Cost of living comparison in major US capitals (Bay area, NYC, LA etc...) vs London isn’t that dissimilar - what might skew things lately is the historically weak GBP/US making London look cheaper that it actually is when FX adjusted.

Is there a difference in how taxes work for earned income vs investment income? Can a FIRE-ee expect lower taxes than a working stiff?

TL;DR, Yup, wage work is Expensive in taxes.

https://engaging-data.com/tax-brackets/
By forum member CCCA ( same person site as Rich, Broke or Dead calculator)

Note that " capital gains" ONLY includes the gains, not the withdrawal amount.
Example:If you withdrew from a taxable account that had doubled in value, your taxable amount is 50% of the withdrawal, not the whole amount that you get and spend.

On this forum, the tax thead, and specifically:
https://forum.mrmoneymustache.com/taxes/taxes-in-early-retirement-(gocurrycracker-links)/

Sorry, I should have been clearer. Im well aware of how the tax policy in the US favors the rich who live off their investments. I was asking what it is like in England.

[markbike528CBX]

Oh yes. I forgot tax rate. My marginal tax rate is 47% and VAT at 20% feels steep. But there again, property tax is super cheap (currently paying 0.2% of my house value annually). So loads of up/down in comparison categories.
Cost of living comparison in major US capitals (Bay area, NYC, LA etc...) vs London isn’t that dissimilar - what might skew things lately is the historically weak GBP/US making London look cheaper that it actually is when FX adjusted.

Is there a difference in how taxes work for earned income vs investment income? Can a FIRE-ee expect lower taxes than a working stiff?

TL;DR, Yup, wage work is Expensive in taxes.

https://engaging-data.com/tax-brackets/
By forum member CCCA ( same person site as Rich, Broke or Dead calculator)

Note that " capital gains" ONLY includes the gains, not the withdrawal amount.
Example:If you withdrew from a taxable account that had doubled in value, your taxable amount is 50% of the withdrawal, not the whole amount that you get and spend.

On this forum, the tax thead, and specifically:
https://forum.mrmoneymustache.com/taxes/taxes-in-early-retirement-(gocurrycracker-links)/

Sorry, I should have been clearer. Im well aware of how the tax policy in the US favors the rich who live off their investments. I was asking what it is like in England.

Welcome to the upper-crust US style. 
Nice to know that for reasonable incomes, the UK is similar to the US.

[pecunia]

Jeepers!

I don't pay attention to this money making bullcrap for a couple days and it sets record highs.

https://www.investors.com/market-trend/stock-market-today/dow-jones-sets-new-high-verizon-cisco-stock-rally/

The rich get richer and most of us work for them.

[EscapeVelocity2020]

I try to pay more attention to my income from work, although that is pretty absurd, it is more tangible.  The income YTD from my investments this year is incomprehensible (once again).  Over 400k for doing nothing?  Of course, last year was  less generous given the late dip, but still up!  I may have to turn in my Mustache all together and figure out what rich people do at this rate.

[soccerluvof4]

Some of the returns you all are reporting are nice to see. For me because i am 4.5 years Fire'd I am just excited that I have more money well at least today then I did when I Fire'd. My portfolio is not as risky as some only 60/40 and my withdrawal is higher 5% with the market being as it has as I have slowly remodeled about 90%(about 80k) of our house and we did buy one toy a boat (40k)  but I am about 400k higher than I was when I fired. Granted I have made or done some cash jobs here and there and done some CC churning but that's minimal and also have 2 in college and 2 coming up the pipeline quickly but just happy I crossed back over the 3M line with my conservatively figured payed for house. I probably have a bit to much cash as well that might be hurting me but that helps me sleep at night and i have been going to auctions and really looking for a home I can get on a lake near us to live on or if I get stuck flip but there hard to come by as well as anything to flip.

[EscapeVelocity2020]

What's crazy is that I could have been up more if I had remained more aggressive.  I was up over 500k in 2017 (and over 300k in 2016), so let's see if 2019 tops that!  I must admit, I don't mind missing out on some gains, but I am aggressive with the new cash that I won't be needing anytime soon (in fact, I doubt I'll touch any of it in my lifetime unless some black swan event happens).  So this is expected to be invested for 50+ years...

[JoJoP]

I try to pay more attention to my income from work, although that is pretty absurd, it is more tangible.  The income YTD from my investments this year is incomprehensible (once again).  Over 400k for doing nothing?  Of course, last year was  less generous given the late dip, but still up!  I may have to turn in my Mustache all together and figure out what rich people do at this rate.

Holy cow, Batman!  400K a year in returns? Plus work?  That's a fortune.   I love it that we are Mustachians in spite of the size of the stash.  I'm actually starting to wrap my mind around the fact that it's all good and here for keeps.  (it was hard to type out those last 4 words)  I'm also starting to digest the fact that you can't take it with you, and freeing up the purse strings a bit. 

I want to share a fun FIR story:  A couple of days ago I had lunch with one of my oldest friends and her 95 year old father, who I haven't spent any time with for 30 or so years.   Aside from his amazing stories (WWII vet who was a special ops type-- first in--Scout ahead of major invasions), he naturally asked me how I was doing.  I told him that I'm retired, life is great, and I pretty much go from one fun thing to the next.  That about sums it up, right?    I'm heading to Japan next week.   My 4th international vacation so far this year.

[EscapeVelocity2020]

In the interest of full disclosure, the 400k gain includes additional savings from work.  Not trying to pull a 'Beardstown Ladies' on anybody!

[Dicey]

The rich get richer and most of us work for them.

Nope, some of us are FIRE. Yet another reason to keep reaching for the goal.

[Exflyboy]

Ok well once again we all have a bit more moolah today.

almost 2996 on the S&P 500 at the early close.

[pecunia]

Ok well once again we all have a bit more moolah today.

almost 2996 on the S&P 500 at the early close.

It's the stuff dreams are made of.

https://www.youtube.com/watch?v=UJOjTNuuEVw

Why do I have this tickling little voice in the back of my head telling me to "watch out"?  I guess it's just a lifetime of conditioning.  If it seems to good to be true,......

[ysette9]

Ok well once again we all have a bit more moolah today.

almost 2996 on the S&P 500 at the early close.

It's the stuff dreams are made of.

https://www.youtube.com/watch?v=UJOjTNuuEVw

Why do I have this tickling little voice in the back of my head telling me to "watch out"?  I guess it's just a lifetime of conditioning.  If it seems to good to be true,......

I feel the same way. I mean, things go up and things go down, that is just the way the markets go. We have been up for a long time now, so it will happen eventually. There is just no way of knowing whether that will be next week or five years from now.

[BeanCounter]

I am a realist. It's definitely too good to be true. We're up $670k or about 18% since 12/31. About 25k of that is new contributions, all the rest is crazy gains.

[Behindschedule]

A question from a new Mr. Money Mustache follower and recent lurker on this and other similar threads.  I notice a lot of people don't include their home equity in the calculation for inclusion on this thread.  I understand that a primary home is not an investment and is not easily liquidated, but do you also not count your 401k and other retirement funds in these calculations?  I would think it would generally (as long as the housing market is functioning properly) make more sense to sell a house if you wanted to get liquid than to take the tax penalty of liquidating a designated retirement account (401k, defined benefit, etc...)  So is everyone in here just using liquid non-retirement designated funds for their net worth calculation? 

[ysette9]

We are generally using our invested assets as the thing to be tracked because invested assets grow and produce income. A house you live in is not an investment unless you sell it and move, but then you still have the problem of figuring out how you are going to house yourself. So except for the people who have a plan to sell and move to a LCOL place, the home equity is sort of irrelevant. The important thing is whether you have enough invested assets to cover your ongoing income needs.

[DavidAnnArbor]

I do include my home equity in my calculation to qualify to be in this club.
My invested assets are close to 2 million but not quite yet there.

[CoffeeR]

A question from a new Mr. Money Mustache follower and recent lurker on this and other similar threads.  I notice a lot of people don't include their home equity in the calculation for inclusion on this thread.  I understand that a primary home is not an investment and is not easily liquidated, but do you also not count your 401k and other retirement funds in these calculations?  I would think it would generally (as long as the housing market is functioning properly) make more sense to sell a house if you wanted to get liquid than to take the tax penalty of liquidating a designated retirement account (401k, defined benefit, etc...)  So is everyone in here just using liquid non-retirement designated funds for their net worth calculation?

A lot of people do include their home equity. For me personally it would make sense if you plan on downsizing your home and/or moving from a HCOL to a LCOL area. As for me, I need to live somewhere, so I do not include it in my NW calculations.

[Exflyboy]

Nobody ever defined the membership rules for this club.

Personally what I do is..

401k's/ IRA's etc.. counted

After tax savings.. counted

Pension valuations.. I don't count for "membership" but I do for our overall networth, kinda funny money because I can't take it out an spend it as a lump sum I can only take it as income.

Home Value.. Which at best is a SWAG.. Same as pensions

Social Security.. Excluded.

[JoJoP]

I count all my real estate because:
1)  90% or more of my NW is in RE, my house is just part of that.  I'm actually less inclined to count my meager stock holdings, since, well, they're meager.
2) Mint tallies it for me using Zillow zestimates.   (wrong, yes, but there's no effort involved to get those ballpark figures ). 
3) High numbers are funner.  My house is tippy toeing towards 1M, and it's nearly paid off.  So, yeah, it counts.  I could sell it and buy 6-10 doors/little houses in a LCOL area. 

I'm one of the outliers here in that my NW is mostly RE, my income is mostly RE, and the stocks just sit there bouncing around.  Even my good returns in the stock market pale in comparison to my good returns on RE.  That's what I do, that's what I know, so I count it all.  I can see the point of just eliminating the personal residence in a net worth tally when your assets are elsewhere, but, at the end of the day, the real definition of net worth is-- what all your stuff would be worth if you sold it?  If you died today, what's the estate worth? That includes your house, cars, and grandma's wedding ring.  Except we, alive and well and on MMM,  don't want to sell it, we want to figure out how to help us live.  So, while you're living, you probably just want to count the assets that support your expenses/liquidable/income earning/ etc.   Semantically speaking, it's a different tally, but perfectly acceptable to include your house and stuff or not.  Earlier on my path to FI,  I used to include pretty much everything, but now just the really big stuff.  Basically, now, for me, that's just the real estate, with a nod to the stocks. 

[Dicey]

Okay, I'll play...

I count home equity on our primary home, because it's paid off, and we could sell it faster that I could pack all our crap. We live in a HCOLA, so it's worth about $1.3M. We will downsize and stay in the area when DH retires.

I count all taxable and retirement investments.

I don't count any of the equity in our three rental properties. They're in a seasonal resort area and what we could get for them fluctuates with the seasons too much to make a reasonable guesstimate. Don't need it to get over the threshold,  so meh, I don't bother.

I don't count the value of DH's defined benefit pension, which will kick in in less than two years, because I have no idea how to calculate what it will be.

We're in the middle of a year-long flip. We have about $300k into it. We hope to make a profit of $100k, so there's $400k to figure out what to do with. It should go on the market in about ten days, so we will need to start thinking about that soon, I guess.

We don't count Social Security, but we have a ballpark estimate of what it will be.

I think we'll be okay.

[soccerluvof4]

Here is how I calculate.

I count my home as its paid for but I low ball it by 20- 25% Hence the 300k Calculation and being in an area that it would sell in 3 days.

I use mint which keeps tract of all my investments from Vanguard including 401ks etc.. to all bank types and CD's and subtracts my CC's and expenses.

I simply add those two up and thats my NW.

I dont add SS
Potential income
529's
A Small Cash Stash I keep around hidden
Any other properties or material things,

but the 300k I count in my house does help in putting me over the 3M as of now.

[2sk22]

What I include in net worth - liquid assets, 401Ks

What I don't include:

• House value (completely paid off though)
• Pensions - both wife and I are entitled to pensions. However I'm on the fence about whether to include them as both my company and my wife's company offers the option of a lump-sum at retirement age (typically 65). There is a precise value that is listed for both of our pensions and its quite substantial.
• SS

[Fomerly known as something]

How I count.

For here I count my pension as I am vested.  I know it is worth $26,000 a year in 2040 if I quit today, so I count it at a discounter 25x value.

I count my home at a discounted rate of $300,000, I probably could sell it for at least $350,000 because I keep a mortgage on in for the soul reason of allowing my investments to stay investments.

I count retirement accounts because there are ways to access them early without penalty if you structure the withdrawal correctly. 

I count all my other accounts to include my DAF.  Charitable giving is something I do and will continue to do when I RE, so the DAF is predesignated money for that.

[Dicey]

I count all my other accounts to include my DAF.  Charitable giving is something I do and will continue to do when I RE, so the DAF is predesignated money for that.

That's excellent that you have a DAF, but why do you count it In your NW? Once you contribute to it, the money is irrevocably out of your control except to designate which charity to direct it to and how big the check will be. I understand that having a DAF lets you continue to give charitably, which I wholeheartedly endorse, but not how it increases your bottom line, especially in the context of this thread.

[jeroly]

How I count.

For here I count my pension as I am vested.  I know it is worth $26,000 a year in 2040 if I quit today, so I count it at a discounter 25x value.

You are way, way, way overvaluing your pension.
The proper way to value your pension is to price a deferred annuity that pays $26,000 a year.  I priced an annuity for a 44-year-old woman (which will be pricier than for a man and hence yield a higher value) starting at age 65 and get a price of approximately $200,000 or slightly less than 8x the payout.

The difference is based on the fact that your pension has no residual value when you die, while on average your investments supporting a 4% payout will actually grow to be worth more than they are when you start the withdrawals.

[JoJoP]

How would pensions and SS figure into net worth?  Wouldn't they be more like reliable sources of income?  My thinking is that you don't "own" them, you simply can use them while you're alive, which would certainly offset the need for more savings/net worth.   Or can pensions be cashed out?  I don't know as I've always been self employed. 

[CoffeeR]

How would pensions and SS figure into net worth?  Wouldn't they be more like reliable sources of income?  My thinking is that you don't "own" them, you simply can use them while you're alive, which would certainly offset the need for more savings/net worth.   Or can pensions be cashed out?  I don't know as I've always been self employed.

You can ignore it for NW calculations, but if a pension pays you (say) $1000/month then you need to save $1000/month less to FIRE, so when comparing or calculating NW for the purpose of FIRE, then you might want to take it into account.

• You could say that using the 4% rule (or whatever rule you use) you would need 12*$1000/.04 = $300K to generate that $1000/month, so your pension is worth $300K.
• You could look at what a SPIA costs (an annuity) that generates $1000/month. That will vary depending on gender, state, and age the pension begins and/or if the pension is COLA adjusted, etc. One calculator I just checked says it would cost me about $225K for a $1000/month lifetime payout increased by 2% yearly starting at age 60.
• Some pensions can be cashed out. This could be used as the value of the pension.

[EscapeVelocity2020]

Don't count SS since it is a long way off.  Do count the 529 since it is money I won't have to spend when the kids are in college (plan to graduate them debt free).  Don't count the home equity since I plan to live in the house for a long time and would not tap the equity.  Other than that, everything else will eventually be mine (Employee Stock Purchase Plan, Pension fund lump sum value, 401ks, HSA, bank accounts (with current exchange rates), etc.  Don't count assets like cars and expensive items we have collected overseas, although we could probably sell these things for a nice chunk of money. 

At one point I discounted some of the items for taxes and potential penalties, since I'll end up paying at some point, but it became too complicated.  It's something I will just try to optimize.  I look at it as an upside to early retirement, reducing the amount I need to convert from pre-tax to Roth.