Author Topic: Race from $2M to $4M...and Beyond!  (Read 823272 times)

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #4150 on: November 25, 2020, 06:50:12 PM »
My life is definitely one with Mustachian problems.  When we were in the million net worth category, I didn't worry so much about DW feeling overwhelmed by the financial decisions or the kids getting too much too soon, but now that the estate is over $4M and growing, I worry more about her feeling stressed out or the wrong person taking advantage of her trust.  I'm perfectly relaxed with moving hundreds of thousands around, gaming out tax strategies, and all of the various optimizations that save us tens of thousands and match our risk tolerance to our goals.  We are a great team, but neither of us are as good at life individually...

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #4151 on: November 26, 2020, 05:10:31 PM »
My life is definitely one with Mustachian problems.  When we were in the million net worth category, I didn't worry so much about DW feeling overwhelmed by the financial decisions or the kids getting too much too soon, but now that the estate is over $4M and growing, I worry more about her feeling stressed out or the wrong person taking advantage of her trust.  I'm perfectly relaxed with moving hundreds of thousands around, gaming out tax strategies, and all of the various optimizations that save us tens of thousands and match our risk tolerance to our goals.  We are a great team, but neither of us are as good at life individually...

Why not leave an instruction manual behind?  Folks leave a will, which is good, but some folks need detailed instructions. If a company can have a emergency action plan, why canít an individual? There are templates out there.

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4152 on: November 26, 2020, 06:31:14 PM »
My life is definitely one with Mustachian problems.  When we were in the million net worth category, I didn't worry so much about DW feeling overwhelmed by the financial decisions or the kids getting too much too soon, but now that the estate is over $4M and growing, I worry more about her feeling stressed out or the wrong person taking advantage of her trust.  I'm perfectly relaxed with moving hundreds of thousands around, gaming out tax strategies, and all of the various optimizations that save us tens of thousands and match our risk tolerance to our goals.  We are a great team, but neither of us are as good at life individually...

Why not leave an instruction manual behind?  Folks leave a will, which is good, but some folks need detailed instructions. If a company can have a emergency action plan, why canít an individual? There are templates out there.

I've written a 6 page guide for our son and my wife.
Headings include:

Contacts.   (Accountant, key relatives, Attorney, etc.)

Things To Do.  (Contact friends and put in a change of address for us to our son's home, both right away and at the end of the next two years so important mail comes to their home.)

In Our House.  (Stuff in our house they will need like papers, etc.)

Land  (List of properties owned, Property management company or business partners and gist of any outstanding deals.)

Banks  (What banks we have accounts in and the names they are under.)

Investment Accounts (Where we have our stocks and bonds, etc.)

Insurance (What companies we have policies with and what kind they are.)

Accounts Receivable (Who owes us money, example, someone pays us mortgage payments for a property we sold them.)

Liabilities (Who we owe money to, used to include our mortgage (paid off!!), any outstanding business deals we owe money on.  I don't worry about routine things that will get invoiced every month, that sorts itself out easily enough.)

Bequests (Mandatory bequests are in our will, this includes what to do with stuff such as our books, tools, craft supplies, etc. if they don't want them and don't need to sell them.)

Burial Plans (What our preferences are so they know.)

And, lastly, Money and Investment Advice.

I'll include most of the text on this one as it's pretty generic:

"Donít give financial advisors the ability to embezzle your money.

Most financial advisors are not advisors, they are salespeople paid on commission.  They are paid more if they steer you into investments that make their employer rich.  You want an advisor that has a ďfiduciary responsibilityĒ to you.  That phrase is really important so double check and get it in writing that itís part of their business relationship to you.   Pay them a fee for their time not a percentage of what you own.

Keep your account passwords and control of your accounts in your own hands.

Financial advisors are useful but thereís nothing they will do for you that you canít easily learn to do yourself.   Take the time to learn about money and investments.  Think of it as your job.  If you donít do that someone else can legally skim a lot of the earnings off your investments.  If you can already add, subtract, multiply and divide and get the right answer most of the time, thereís nothing about this you canít easily learn to do.

Fees matter a lot more than intuitively obvious.  Learn about compound growth and the astounding effect of a 1% difference in fees on how much your investment will be worth in 20 years.  Hint: itís not just 1%, itís a whole hell of a lot more!

Donít be fearful and donít be greedy.  Inflation is guaranteed to steal your wealth over time.   So a lot of the investments people think are ďsafeĒ actually arenít safe over long time periods but they are usually safe for a short period of time.   The purchasing power of money in a savings deposit earning 1% is being lost every day because inflation averages 3%.  When SwordGuy was a kid gas was $0.26 a gallon!l     Donít confuse risk with volatility.   Buying a mutual fund composed of hundreds of top notch companies is a volatile investment (the value can fluctuate quite a bit from day to day) but itís not risky.  Itís actually safer than the savings account if your time horizon for needing the money is 10 years out. 

That 5 year, 10 year, 20 year and 30 year time horizon is an important skill to learn.  Regular folks stuck with just wages for income donít typically think that way and their lack of wealth (often despite high incomes) demonstrates that.   

Read JL Collinís book A Simple Path to Wealth to learn about investing.  Itís short, simple, and teaches you what you need to learn with a minimum of fuss and bother.

Donít panic when the news spreads fear, uncertainty and doubt about the stock market.    They do that all the time, itís good for ratings.  Just hold onto the stocks and wait until prices recover.

The average person doesnít know a damn thing about investing and common wisdom about investing that they hold is often dead wrong.   Donít take financial advice from broke people (except possibly if itís ďDamn, I did this stupid thing, donít do that!Ē).  Broke people with middle class (or better) incomes are broke because they donít know how to build or keep wealth despite jobs that provide the income to do so. 

Diversify so that all your eggs arenít in one basket. 

Learn to think in terms of income streams.   When a poor person gets a windfall, they often (rightly) focus on paying off what they owe and then (wrongly) focus on spending whatís left over.  When a middle class person gets a windfall they often spend it on something they think is an asset but is actually a liability.  An example would be a fancy new car.   A new car loses a lot of its value the moment itís driven off the dealerís lot and expensive ones come with higher taxes and insurance and monthly payment costs.  Itís not an asset, itís a financial millstone.  (And if itís a gas guzzler, it comes with higher gas bills too!)  When wealthy people get a windfall, they often turn that money into an ďincome streamĒ.  An income stream provides steady income for the future.  Example.  Middle class person gets $60,000 and buys a $60,000 car for cash.  Taxes and insurance are now much higher so those items are a drag on future wealth building activities.  A wealthy person might buy a rental house and rent it out for a profit.  That rent is an income stream.   They then use that profit to buy their vehicle.  In ten years when both vehicles need to be replaced, the wealthy person still has an income stream to pay for their replacement vehicles for the rest of their life.  (Of course, a smarter wealthy person would buy a much more economical vehicle! 😊 )  If you want a luxury that will require an ongoing expense, set up an income stream that will provide those funds in the future."

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #4153 on: November 27, 2020, 06:31:30 AM »
Ok found it. There are family emergency binders that you can put together. I remember hearing about them on the choose FI podcast. You can get the template at http://smartmoneymamas.com/ice-binder/

I should follow my own advice and do one.

BeanCounter

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Re: Race from $2M to $4M...and Beyond!
« Reply #4154 on: November 27, 2020, 07:11:49 AM »
If you discuss this with your spouse and she says ďyes, I want the assets in trust and I want to pay someone to manage it all because I donít trust myself and donít want to make a mistake.Ē then fine do it. But if my spouse talked about me as you did above, basically saying Iím just so nice Iím stupid, Iíd face punch him and then kick him in the balls. I mean does your wife have a actual cognitive impairment, or do you just think these things because sheís a women?
I mean that with love. Just calling you out to reevaluate your thinking.

I knew I'd take flak for that, I've been blasted many times on this forum for similar statements, but we have arrangements that work just fine and she does not complain and feels very fortunate.  There's a lot of nuance that gets lost when I discuss these things, but why dance around it and write a novel when our arrangements and backstory is not the point.  For instance, she does not trust herself with millions of dollars in retirement accounts and she has been scammed by contractors to the tune of a few thousand just last year.  She didn't know she'd been scammed (I was working overseas a lot in 2019), and she knew that the demands for more money to finish the job didn't seem right, but he said he underestimated the job, was losing money, yadda, yadda...

Anyway, I do appreciate the help you have given me and of course I don't think anyone is stupid, just not interested in managing finances and not hardnosed when it comes to financial transactions.  Suddenly having lots of millions of dollars and no one that she trusts to give her answers are way up there when it comes to shit she does not want to deal with, and she will tell you that point blank.  If I live long enough and interest rates ever go up, I'll turn a chunk of our retirement funds into an annuity because she would love nothing more than to have a perpetual paycheck to simplify the money stuff and let her focus on her passions, interests, and hobbies.

I also worry that she may also worry too much about spending and needlessly deprive herself, but this probably isn't the forum to talk about that either :)  And the big issue about that is that we have one child that is currently a spendthrift and it would suck to dump millions into her lap too soon.  I'm hoping that the real world teaches her the value of a dollar and gives me a chance to impart wisdom about how to grow or at least conserve her stache as opposed to living paycheck to paycheck and going on windfall spending sprees.

@EscapeVelocity2020 I'm glad you didn't take my sharp words too hard. From what you shared it sounds like it might make sense for you to get a trust set up. There are lots of things you can do with a trust. The trustee will even pay bills for your wife if that's what you want. You can set it up so that the principal remains for generations, and protect your assets from you child's future marriage etc.
But remember, nothing can save you from fraud and theft like education. Trustees change jobs, retire, banks get absorbed etc. There are no guarantees that you can just find someone that will take care of everything for you.
Having money is certainly helpful, but it can also be a burden because it comes with responsibility. Like it or not.
I grew up with a few trust fund kids, and some of them live poor to this day. No ambition to have a successful career, they live pay check to pay check and when their semi annual trust check comes they spend it on a new car, clothes or the latest technology. When they wanted to buy a house, they went to the trustee and asked for money for a down payment, when the realtor talked them into a bigger house, they went back to the trustee and asked for more.
One last thing to consider- perhaps your daughter's spendthrift ways are directly related to your wife's attitude toward money (i.e.- "it comes, it goes, my husband takes care of it, I don't want to/can't deal with that) Something to think about.
« Last Edit: November 27, 2020, 07:14:02 AM by BeanCounter »

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4155 on: November 27, 2020, 03:41:01 PM »
Yeah I had sympathy to @EscapeVelocity2020 position.. I certainly don't want to come across as some awful misogynist but my DW is in a similar position.. i.e Money is just not her thing*.

I have a "book of secrets (BOS)" where all the money strategy is written down (but no user names or passwords).

We then also have a password vault that provides access to each of our accounts. DW then has to remember just one password. We also have a close friend (younger than us) who is a PhD economist and does all her family finance and is also FIRED.

The plan is if I croak, DW takes the BOS and the password to said friend and it will be a 5 minute job to see what is drawn from where and why.

*When I say "Not her thing".. I mean its REALLY not her thing! She has no idea of our NW and only a faint idea of what institutions its invested with. If you were to ask her the difference between a Roth vs traditional IRA she wouldn't have the first clue even though I have tried to explain several times. This is not a complaint on my part, although I would dearly love her to be involved she just isn't interested and I have just have to accept thats the way it is.

DavidAnnArbor

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Re: Race from $2M to $4M...and Beyond!
« Reply #4156 on: November 27, 2020, 09:11:18 PM »
This frothy stock market has caused my liquid investments to climb to just shy of $2.1 million. 

I am still working, and I took on a part time job as a Shipt shopper, I shop for groceries and deliver them to someone's home. Basically, I'm a glorified pizza delivery person.

In other news this past Thursday I became a participant in the AstraZeneca Covid vaccine trial. And I definitely got an injection of the vaccine because I got the usual symptoms from a vaccination, a feeling like a cold was coming on, but this feeling only lasted a day. In mid-December I go back for a booster shot.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #4157 on: November 27, 2020, 10:25:57 PM »
This frothy stock market has caused my liquid investments to climb to just shy of $2.1 million. 
...

I keep hearing folks are at all time highs.  I haven't checked the numbers lately but I'm almost nervous, it seems absurd how the snowball keeps growing once it gets going in earnest.  Compounding is ridiculously effective.  But there is still a vestige of my younger, less wise self that keeps thinking that surely, SURELY the covid and unemployment numbers will cause something bad to happen in the economy and ultimately the stock markets to fall, but it now looks like we will end 2020 with respectable 10+% gains and still very little inflation.  This really has been a crazy year!

rmorris50

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Re: Race from $2M to $4M...and Beyond!
« Reply #4158 on: November 28, 2020, 06:02:36 AM »
This frothy stock market has caused my liquid investments to climb to just shy of $2.1 million. 

I am still working, and I took on a part time job as a Shipt shopper, I shop for groceries and deliver them to someone's home. Basically, I'm a glorified pizza delivery person.

In other news this past Thursday I became a participant in the AstraZeneca Covid vaccine trial. And I definitely got an injection of the vaccine because I got the usual symptoms from a vaccination, a feeling like a cold was coming on, but this feeling only lasted a day. In mid-December I go back for a booster shot.
How do you like the Shipt Shoppr gig? God I donít have the courage to quit the McCorp job I hate. This week off for Thanksgiving has been awesome, I just shut the laptop last Friday and have refused to log into the portal of hell this week. I wouldnít mind a gig job to feel productive and earn fun money.

Our NW has now blown past 2.5m and seems to good to be true.


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Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #4159 on: November 28, 2020, 06:33:31 AM »
I am still working, and I took on a part time job as a Shipt shopper, I shop for groceries and deliver them to someone's home. Basically, I'm a glorified pizza delivery person.

This seems like a great part-time & short-term gig for otherwise FIREd folks wanting to pick up some additional income and feel safe doing it.  How do you like this?  Are you typically in control of hours?  Can/Do customers tip? (that seems like it could be a great addition to income in the right areas).

BeanCounter

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Re: Race from $2M to $4M...and Beyond!
« Reply #4160 on: November 28, 2020, 09:53:36 AM »
Yeah I had sympathy to @EscapeVelocity2020 position.. I certainly don't want to come across as some awful misogynist but my DW is in a similar position.. i.e Money is just not her thing*.

I have a "book of secrets (BOS)" where all the money strategy is written down (but no user names or passwords).

We then also have a password vault that provides access to each of our accounts. DW then has to remember just one password. We also have a close friend (younger than us) who is a PhD economist and does all her family finance and is also FIRED.

The plan is if I croak, DW takes the BOS and the password to said friend and it will be a 5 minute job to see what is drawn from where and why.

*When I say "Not her thing".. I mean its REALLY not her thing! She has no idea of our NW and only a faint idea of what institutions its invested with. If you were to ask her the difference between a Roth vs traditional IRA she wouldn't have the first clue even though I have tried to explain several times. This is not a complaint on my part, although I would dearly love her to be involved she just isn't interested and I have just have to accept thats the way it is.

IMHO there is a big difference though between having a spouse who is not interested in investments and deciding to protect assets FROM THEM by putting them into a trust. Which is what Escape was suggesting he thought he might need to do. My spouse is not into investment strategy or any kind of long term planning. I do all of that. And it would no doubt be difficult if I died before him and he had to deal with those sorts of things. But that doesn't make him incapable. It doesn't mean I need to shield assets from him. He might make a few mistakes along the way, but I trust that he'll find his way and reach out to professionals if he needs help. If he were to decide that he wants to put it all into a managed account so he doesn't have to do anything but have an annual review then he can pay for that. I'm not going to make that choice for him.

rmorris50

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Race from $2M to $4M...and Beyond!
« Reply #4161 on: November 28, 2020, 10:00:07 AM »
My husband has no interest in investments and talking money with him is 100 times harder than talking sex. Thatís why we got a financial advisor, heís more of a financial counselor/referee. I trust the advisor would guide my spouse upon my demise :-)

The trust was more about how should rich gay uncles (us) with no children have our wealth distributed upon our death. We donít want to rule from the grave, but we also donít want bickering and lawsuits. We want it clear and simple, end of story. We will talk with a lawyer early next year to see if a trust will help with that.

Or maybe I should just retire now and start spending it :-p


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« Last Edit: November 28, 2020, 10:02:00 AM by rmorris50 »

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #4162 on: November 28, 2020, 12:30:07 PM »
My husband has no interest in investments and talking money with him is 100 times harder than talking sex. Thatís why we got a financial advisor, heís more of a financial counselor/referee. I trust the advisor would guide my spouse upon my demise :-)

The trust was more about how should rich gay uncles (us) with no children have our wealth distributed upon our death. We donít want to rule from the grave, but we also donít want bickering and lawsuits. We want it clear and simple, end of story. We will talk with a lawyer early next year to see if a trust will help with that.

Or maybe I should just retire now and start spending it :-p

Winner winner, chicken dinner!

Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #4163 on: November 28, 2020, 02:25:41 PM »
My husband has no interest in investments and talking money with him is 100 times harder than talking sex.

Good, one person in the couple can take care of the money just as well 100% by themselves (no comment if the other is true).
« Last Edit: November 28, 2020, 02:28:16 PM by Much Fishing to Do »

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #4164 on: November 28, 2020, 03:59:23 PM »
Yeah I had sympathy to @EscapeVelocity2020 position.. I certainly don't want to come across as some awful misogynist but my DW is in a similar position.. i.e Money is just not her thing*.

I have a "book of secrets (BOS)" where all the money strategy is written down (but no user names or passwords).

We then also have a password vault that provides access to each of our accounts. DW then has to remember just one password. We also have a close friend (younger than us) who is a PhD economist and does all her family finance and is also FIRED.

The plan is if I croak, DW takes the BOS and the password to said friend and it will be a 5 minute job to see what is drawn from where and why.

*When I say "Not her thing".. I mean its REALLY not her thing! She has no idea of our NW and only a faint idea of what institutions its invested with. If you were to ask her the difference between a Roth vs traditional IRA she wouldn't have the first clue even though I have tried to explain several times. This is not a complaint on my part, although I would dearly love her to be involved she just isn't interested and I have just have to accept thats the way it is.

IMHO there is a big difference though between having a spouse who is not interested in investments and deciding to protect assets FROM THEM by putting them into a trust. Which is what Escape was suggesting he thought he might need to do. My spouse is not into investment strategy or any kind of long term planning. I do all of that. And it would no doubt be difficult if I died before him and he had to deal with those sorts of things. But that doesn't make him incapable. It doesn't mean I need to shield assets from him. He might make a few mistakes along the way, but I trust that he'll find his way and reach out to professionals if he needs help. If he were to decide that he wants to put it all into a managed account so he doesn't have to do anything but have an annual review then he can pay for that. I'm not going to make that choice for him.

I have a similar 'Book of Secrets' (a spreadsheet of secrets) that I have walked through with DW.  Many times.  Each time, her eyes glaze over even though I'm only a quarter of the way done...  I suppose, at some point, I should make a narrative that is explicit and ensure that someone will be able to take over the reins.  We have a few quirks like foreign currency exposure, foreign earned income tax exclusion carry-over, credits from paying international taxes and getting stock in lieu of dividends, and investment loss carryover, which I guess would be understood by the right accountant looking at prior year tax returns.  That was the relationship that I need to establish here in the not too distant future.

The idea of an ICE binder isn't a bad one, except there are a lot of moving parts coming up in 2021 which makes this complicated.  DS will turn 18, DD turns 16 and we'll eventually buy another car...  College will start so the 529 will come in to play...  I guess I just worry that I spend a bunch of time making this binder and it is all out dated in 2 years.  Kinda' like the will (and living wills) we wrote and revise every few years.  It's depressing enough the first time...  I never thought having money and being able to retire early would be so depressing, but folks are talking about how short life is and how many people died right after retiring (or during their OMY)...  too much talk about longevity (and lack thereof) instead of how great it is to have options and amazing experiences...  so I also tend to tune some of the ER stuff out.  I really don't care to do any side hustles, unless they are engaging and fulfilling.  I feel like I get a lot of that with my current job - getting to see billion dollar projects come together and being on the 'fun side' of the velvet rope.

It was an interesting perspective when you explicitly said 'protect assets from them' Bean, but it is more nuanced than that.  I want the assets to always be there for my spouse and, optimistically, there to be a reasonable amount left for the next generation of EV's to come...  I fully trust my spouse with the assets, I just think it is not her interest and the wrong accountant and financial advisor (even if a fiduciary) could steer things in a very frustrating direction, since DW would not want to provide input other than to be very conservative and use vehicles she fully trusts like bank accounts and stable value funds.  DW would not feel comfortable with a +/- $100k change (yes, even the positive change would stress her out, since that is a year of work changing on paper in a day, so how is that possible). 

It's not that I don't share these things with her, but I think it is abstract and she trusts the process for now, but when it is her, I fear she will see it more as gambling and want to take the chips off the table...   I really don't know, but it will stress her out, she just likes to know she has $X to spend each week (with $X being a comfortable amount with some typically left over for those budget breaking times like back to school, Christmas, etc.)...

I've probably said too much again, but this is therapeutic for me.  She is a genius in other areas though, just as uninterested as she is in finance, I am uninterested in the things she gets incredible accolades for - teaching(!), orchids, healthy and creative meals, DIY around the house, homemaking (which we share 50/50, I don't mind laundry, washing dishes, home maintenance - but she takes things to a higher level than I do), etc....  I do my best to support, but she is tireless when it comes to her passions and pursuits and gets appreciation for how great she does at these and many other things. 

It'll be interesting to see how we do in retirement together.  We have talked about our dreams a bunch on our walks together, but I bet putting things in to practice will be a lot different than just talking...  But I hope to live a long time so that we can enjoy figuring that out.  It would be great to keep putting the serious death stuff off indefinitely, but in this year of Covid, I have to be realistic and think more pragmatically.  And hence my initial post and these rambling thoughts of me processing what I should do sooner rather than leave until it's too late and find myself with a mess that I was too lazy to put right when I had the time.
« Last Edit: November 28, 2020, 04:09:49 PM by EscapeVelocity2020 »

markbike528CBX

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Re: Race from $2M to $4M...and Beyond!
« Reply #4165 on: November 28, 2020, 10:52:52 PM »
Yeah I had sympathy to @EscapeVelocity2020 position.. I certainly don't want to come across as some awful misogynist but my DW is in a similar position.. i.e Money is just not her thing*.

I have a "book of secrets (BOS)" where all the money strategy is written down (but no user names or passwords).

We then also have a password vault that provides access to each of our accounts. DW then has to remember just one password. We also have a close friend (younger than us) who is a PhD economist and does all her family finance and is also FIRED.

The plan is if I croak, DW takes the BOS and the password to said friend and it will be a 5 minute job to see what is drawn from where and why.

*When I say "Not her thing".. I mean its REALLY not her thing! She has no idea of our NW and only a faint idea of what institutions its invested with. If you were to ask her the difference between a Roth vs traditional IRA she wouldn't have the first clue even though I have tried to explain several times. This is not a complaint on my part, although I would dearly love her to be involved she just isn't interested and I have just have to accept thats the way it is.

IMHO there is a big difference though between having a spouse who is not interested in investments and deciding to protect assets FROM THEM by putting them into a trust. Which is what Escape was suggesting he thought he might need to do. My spouse is not into investment strategy or any kind of long term planning. I do all of that. And it would no doubt be difficult if I died before him and he had to deal with those sorts of things. But that doesn't make him incapable. It doesn't mean I need to shield assets from him. He might make a few mistakes along the way, but I trust that he'll find his way and reach out to professionals if he needs help. If he were to decide that he wants to put it all into a managed account so he doesn't have to do anything but have an annual review then he can pay for that. I'm not going to make that choice for him.

I have a similar 'Book of Secrets' (a spreadsheet of secrets) that I have walked through with DW.  Many times.  Each time, her eyes glaze over even though I'm only a quarter of the way done...  I suppose, at some point, I should make a narrative that is explicit and ensure that someone will be able to take over the reins.  We have a few quirks like foreign currency exposure, foreign earned income tax exclusion carry-over, credits from paying international taxes and getting stock in lieu of dividends, and investment loss carryover, which I guess would be understood by the right accountant looking at prior year tax returns.  That was the relationship that I need to establish here in the not too distant future.

The idea of an ICE binder isn't a bad one, except there are a lot of moving parts coming up in 2021 which makes this complicated.  DS will turn 18, DD turns 16 and we'll eventually buy another car...  College will start so the 529 will come in to play...  I guess I just worry that I spend a bunch of time making this binder and it is all out dated in 2 years.  Kinda' like the will (and living wills) we wrote and revise every few years.  It's depressing enough the first time...  I never thought having money and being able to retire early would be so depressing, but folks are talking about how short life is and how many people died right after retiring (or during their OMY)...  too much talk about longevity (and lack thereof) instead of how great it is to have options and amazing experiences...  so I also tend to tune some of the ER stuff out.  I really don't care to do any side hustles, unless they are engaging and fulfilling.  I feel like I get a lot of that with my current job - getting to see billion dollar projects come together and being on the 'fun side' of the velvet rope.

It was an interesting perspective when you explicitly said 'protect assets from them' Bean, but it is more nuanced than that.  I want the assets to always be there for my spouse and, optimistically, there to be a reasonable amount left for the next generation of EV's to come...  I fully trust my spouse with the assets, I just think it is not her interest and the wrong accountant and financial advisor (even if a fiduciary) could steer things in a very frustrating direction, since DW would not want to provide input other than to be very conservative and use vehicles she fully trusts like bank accounts and stable value funds.  DW would not feel comfortable with a +/- $100k change (yes, even the positive change would stress her out, since that is a year of work changing on paper in a day, so how is that possible). 

It's not that I don't share these things with her, but I think it is abstract and she trusts the process for now, but when it is her, I fear she will see it more as gambling and want to take the chips off the table...   I really don't know, but it will stress her out, she just likes to know she has $X to spend each week (with $X being a comfortable amount with some typically left over for those budget breaking times like back to school, Christmas, etc.)...

I've probably said too much again, but this is therapeutic for me.  She is a genius in other areas though, just as uninterested as she is in finance, I am uninterested in the things she gets incredible accolades for - teaching(!), orchids, healthy and creative meals, DIY around the house, homemaking (which we share 50/50, I don't mind laundry, washing dishes, home maintenance - but she takes things to a higher level than I do), etc....  I do my best to support, but she is tireless when it comes to her passions and pursuits and gets appreciation for how great she does at these and many other things. 

It'll be interesting to see how we do in retirement together.  We have talked about our dreams a bunch on our walks together, but I bet putting things in to practice will be a lot different than just talking...  But I hope to live a long time so that we can enjoy figuring that out.  It would be great to keep putting the serious death stuff off indefinitely, but in this year of Covid, I have to be realistic and think more pragmatically.  And hence my initial post and these rambling thoughts of me processing what I should do sooner rather than leave until it's too late and find myself with a mess that I was too lazy to put right when I had the time.

Putting things down in writing is one of my ways to get the thoughts out there for examination.  In your case to the internet as a whole also, not just for oneself. 
DW has little interest in finances and financial stuff.  I take care of that, and let her know generally what is going on. As the glaze forms over the eyes, I back it down a bit.
If I spout illogical stuff (on any subject), she WILL call me on it. She is essentially always right.  I'm so glad I married a wife with Vulcan logic and Romulan passions :-) 

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #4166 on: November 29, 2020, 07:21:49 AM »
Just thought I'd toss this in:

"There is an often-told story that when Albert Einstein was once asked what mankind's greatest invention was, he replied: "Compound interest." There's even one claim that Einstein called compound interest the "8th Wonder of the World."

While there is some debate about whether Einstein really said any of this or not, there's no question that the compounding of interest is a brilliant thing. As another great American, Benjamin Franklin, described it: "Money makes money. And the money that money makes, makes money." That is probably the simplest explanation of compound interest you'll ever hear."

from somewhere on the net.

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #4167 on: November 29, 2020, 07:33:50 AM »
My husband has no interest in investments and talking money with him is 100 times harder than talking sex. Thatís why we got a financial advisor, heís more of a financial counselor/referee. I trust the advisor would guide my spouse upon my demise :-)

The trust was more about how should rich gay uncles (us) with no children have our wealth distributed upon our death. We donít want to rule from the grave, but we also donít want bickering and lawsuits. We want it clear and simple, end of story. We will talk with a lawyer early next year to see if a trust will help with that.

Or maybe I should just retire now and start spending it :-p


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Or work harder than ever.  Its whatever makes you happy and fulfilled.  The trust and inheritance stuff can be managed. 

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EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #4168 on: November 29, 2020, 07:36:44 AM »
This frothy stock market has caused my liquid investments to climb to just shy of $2.1 million. 
...

I keep hearing folks are at all time highs.  I haven't checked the numbers lately but I'm almost nervous, it seems absurd how the snowball keeps growing once it gets going in earnest.  Compounding is ridiculously effective.  But there is still a vestige of my younger, less wise self that keeps thinking that surely, SURELY the covid and unemployment numbers will cause something bad to happen in the economy and ultimately the stock markets to fall, but it now looks like we will end 2020 with respectable 10+% gains and still very little inflation.  This really has been a crazy year!

I have found it useful to withdraw a portion of the gains   Thus selling high and building a cash position with some of it, but letting compounding continue to do its things (for better or worse) with the rest

Not that I want you to change if that works for you, but Iím a hardcore Boglehead.  I have an asset allocation and an investment strategy and all I might do is rebalance from time to time...  Cash is not an investment, in my humble opinion.

EscapeVelocity2020

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Re: Race from $2M to $4M...and Beyond!
« Reply #4169 on: November 29, 2020, 07:46:58 AM »
My husband has no interest in investments and talking money with him is 100 times harder than talking sex. Thatís why we got a financial advisor, heís more of a financial counselor/referee. I trust the advisor would guide my spouse upon my demise :-)

The trust was more about how should rich gay uncles (us) with no children have our wealth distributed upon our death. We donít want to rule from the grave, but we also donít want bickering and lawsuits. We want it clear and simple, end of story. We will talk with a lawyer early next year to see if a trust will help with that.

Or maybe I should just retire now and start spending it :-p


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Or work harder than ever.  Its whatever makes you happy and fulfilled.  The trust and inheritance stuff can be managed. 

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Thatís just it, work can solve a lot of problems while being engaging and purposeful!  I understand why non-FI people dislike it, I was there, but all this praise of ĎRetirement in Your 20ísí is misguided, IMHO.  It must be the allure of sitting around, because the actuality of it sucks.  FI is all it should be about, and finding work you enjoy in the meantime.

And I enjoyed your Tapatalk signature:)

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #4170 on: November 29, 2020, 07:59:52 AM »
So what big ticket items are you all blowing your money on? We are getting our house remodeled - basically correcting some annoyances that we have been living with for over twenty years. Also, more importantly, fixing my basement workshop (which my daughters call my lair :-)) so I can get on with my post retirement projects. As it turns out, this has been a great way to ease into retirement. There was so much physical labor involved that I was away from my computer for nearly a month which was good for my sense of well-being. And much satisfaction that I was able to get rid of a truck load of junk that had accumulated.

texxan1

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Re: Race from $2M to $4M...and Beyond!
« Reply #4171 on: November 29, 2020, 08:40:17 AM »
just thinking outload... Trying to up my game for the last two months before i fire... I officially have 28 days at work left, but that doesnt start till mid january and then 60 days of policy period with mega oil corp.....

Just looked at my numbers and i am sitting pretty good.. My fire number was 2mil.... seems my liquid is now 2.1 mil, not including my 400k lump sum pension i get the day i leave ( going to tIRA )... that puts me at 2.5.....

DANCING NOW LOL........

So the plan for me is to set my 401k deduction to  99% so that my first two checks of the year max me out..... Hope that works

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4172 on: November 29, 2020, 12:55:04 PM »
just thinking outload... Trying to up my game for the last two months before i fire... I officially have 28 days at work left, but that doesnt start till mid january and then 60 days of policy period with mega oil corp.....

Just looked at my numbers and i am sitting pretty good.. My fire number was 2mil.... seems my liquid is now 2.1 mil, not including my 400k lump sum pension i get the day i leave ( going to tIRA )... that puts me at 2.5.....

DANCING NOW LOL........

So the plan for me is to set my 401k deduction to  99% so that my first two checks of the year max me out..... Hope that works

Thats a pretty flexible 401k you got there.. Nice..:). The best I ever got was a max of 75% salary contribution... The guy I spoke to set it up said "Well you can go to 75%.. but nobody does that!".. Hold my beer..:)

Buffaloski Boris

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Re: Race from $2M to $4M...and Beyond!
« Reply #4173 on: November 29, 2020, 01:32:34 PM »

Or work harder than ever.  Its whatever makes you happy and fulfilled.  The trust and inheritance stuff can be managed. 

Sent from my laptop using Tapamykeyboard

Thatís just it, work can solve a lot of problems while being engaging and purposeful!  I understand why non-FI people dislike it, I was there, but all this praise of ĎRetirement in Your 20ísí is misguided, IMHO.  It must be the allure of sitting around, because the actuality of it sucks.  FI is all it should be about, and finding work you enjoy in the meantime.

And I enjoyed your Tapatalk signature:)

Youíre welcome. I donít get the whole RE thing. Different strokes for different folks I guess. FI is the thing. Because once you have enough money, you can do pretty much whatever you want. If that means quitting a suckful job, then do so. But you really donít even need to be FI to do that. Just have some financial cushion and find something else.

pecunia

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Re: Race from $2M to $4M...and Beyond!
« Reply #4174 on: November 29, 2020, 01:36:30 PM »

- SNIP -

Thats a pretty flexible 401k you got there.. Nice..:). The best I ever got was a max of 75% salary contribution... The guy I spoke to set it up said "Well you can go to 75%.. but nobody does that!".. Hold my beer..:)

75% ?  Wow!  Beer and Ramen noodles.  And the beer would have been cheap skunky beer. 

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4175 on: November 29, 2020, 04:55:37 PM »

- SNIP -

Thats a pretty flexible 401k you got there.. Nice..:). The best I ever got was a max of 75% salary contribution... The guy I spoke to set it up said "Well you can go to 75%.. but nobody does that!".. Hold my beer..:)

75% ?  Wow!  Beer and Ramen noodles.  And the beer would have been cheap skunky beer.

Well I didn't think I would be there very long (I wasn't) so was able to max the 401k out for the year in like 3 months. I got laid off after 6 mos I think so it worked out good.

dividendman

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Re: Race from $2M to $4M...and Beyond!
« Reply #4176 on: December 04, 2020, 01:54:53 PM »
Joining after the recent runup.... kind of unbelievable. Took me > 35 years for the first $1M, only 3 years for the second.

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4177 on: December 04, 2020, 01:58:39 PM »
Joining after the recent runup.... kind of unbelievable. Took me > 35 years for the first $1M, only 3 years for the second.

Welcome.. you might leave and rejoin a few times (I think I left 3 times so far on the bottom end).. But the trend is clear..:)

SparkyPeanut

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Re: Race from $2M to $4M...and Beyond!
« Reply #4178 on: December 04, 2020, 09:47:38 PM »
Joining after the recent runup.... kind of unbelievable. Took me > 35 years for the first $1M, only 3 years for the second.

How did it take more than 35 years if you are only 38 years old?

Congrats on your second mil.

LightTripper

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Re: Race from $2M to $4M...and Beyond!
« Reply #4179 on: December 05, 2020, 12:42:23 AM »
Earned his first dollar at 3?

Still impressively fast for the second million. Congratulations!!

dividendman

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Re: Race from $2M to $4M...and Beyond!
« Reply #4180 on: December 05, 2020, 01:57:56 AM »
I guess I counted from birth though I didn't start earning money until I was in my teens! :)

SparkyPeanut

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Re: Race from $2M to $4M...and Beyond!
« Reply #4181 on: December 05, 2020, 06:42:53 AM »
I guess I counted from birth though I didn't start earning money until I was in my teens! :)

Oh my goodness! So, it really took you about 20 years for the first and 3 years for the second. Just wondering because it took us (spouse & I - don't know if you are married) about 20 years(!) for first. Not at second yet but half way there - mostly due to the good returns this years. Perhaps we will close in on 2 mil soon.
We live in a HCOL area, so it is really not a 'huge' amount. Still grateful though, of course.

tipster350

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Re: Race from $2M to $4M...and Beyond!
« Reply #4182 on: December 05, 2020, 06:53:20 AM »
Another one joining this group after a quick trip through the $1-$2 million group. As I am nearing 60 years old, it took me many years to amass the $1 million, and a lightning-quick nanosecond (or so it seems after all the ups and downs, twists and turns and extreme frugality of my earlier years) to reach the $2 million mark. Like the other newbies, I expect I'll be in and out of this category a few times before it sticks, but regardless I plan to retire in 2021.

BeanCounter

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Re: Race from $2M to $4M...and Beyond!
« Reply #4183 on: December 05, 2020, 08:38:37 AM »
Took us 17 years for the first million. During most of those years we were very average earners.
Inherited the second million. (Not in trust)
Two years to earn the third million.
Working on the fourth. (Also have a trust that we donít count, if at some point that releases then that will change everything again)
Seeing how quickly the third million accumulated, Iím really glad I went ahead and FIREd.
In a lot of ways itís really hard to wrap your brain around it all. Still live in average house. Still buying average Hondaís, still using an iphone6.

rmorris50

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Re: Race from $2M to $4M...and Beyond!
« Reply #4184 on: December 05, 2020, 08:54:03 AM »
I think it took us 14 years for the first million, 7 for the second, and we are over halfway to 3m in the last three years.

But this year has been insane. Our NW has fluctuated between 1.9 and 2.6 (which is now).

Market seems way overpriced but we are on the roller coaster for the long term!!


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Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4185 on: December 05, 2020, 12:16:44 PM »
This is all very encouraging. I often wake up and think two things.. i.e "I don't have to go to work today" and "we are MULTI-MILLIONAIRES".

Even after almost 7 years of FIRE (first attempt) both of these facts just seem ridiculous!.. Not work? Who does that?

Our first mil took 10 years (starting from zero.. i.e after the mortgage was paid off), the second took 5.5 years according to my notes.

Currently sat at $2.6 saved..  plus the house plus smallish pensions which we have not started drawing yet.

For someone born is just 16 years after the end of WW2 in impoverished London its hard to fathom how I got here.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #4186 on: December 05, 2020, 02:02:10 PM »
Our first mil took 10 years (starting from zero.. i.e after the mortgage was paid off), the second took 5.5 years according to my notes.

Currently sat at $2.6 saved..  plus the house plus smallish pensions which we have not started drawing yet.

For someone born is just 16 years after the end of WW2 in impoverished London its hard to fathom how I got here.

Similar sentiment - just about 29 years ago, I graduated with a PhD and $5000 in savings and a barely functional car (more rust than metal). Now: retired, sitting in a paid-off house, two paid-off cars and money in the bank. Amazed and thankful.

Car Jack

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Re: Race from $2M to $4M...and Beyond!
« Reply #4187 on: December 05, 2020, 02:22:01 PM »
Our first mil took 10 years (starting from zero.. i.e after the mortgage was paid off), the second took 5.5 years according to my notes.

Currently sat at $2.6 saved..  plus the house plus smallish pensions which we have not started drawing yet.

For someone born is just 16 years after the end of WW2 in impoverished London its hard to fathom how I got here.

Similar sentiment - just about 29 years ago, I graduated with a PhD and $5000 in savings and a barely functional car (more rust than metal). Now: retired, sitting in a paid-off house, two paid-off cars and money in the bank. Amazed and thankful.

I'd have loved to have a car and five grand at graduation of my BS.  I did have a car I paid $500 for and restored weekends during my senior year with help from my unemployed, body guy brother in law, but upon graduation, it was my turn to pay the gas bill.  $39.  My check bounced.  My dad covered me and about 6 weeks later, I started my first engineering job, living in temporary, company paid housing for 60 days.  Following that, my fiance and I bought a house.

RetirementDreaming

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Re: Race from $2M to $4M...and Beyond!
« Reply #4188 on: December 05, 2020, 03:44:17 PM »
We are officially in this group!  We blipped in and out 3 times but I think we are here to stay at 2.142M.  Took 12 years for the first million and 4 years for second.  We are purchasing our retirement home in a few months.  Hopefully we can keep our investments above 2M.   Husband is still working for 2 more years.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #4189 on: December 05, 2020, 04:07:32 PM »
We are officially in this group!  We blipped in and out 3 times but I think we are here to stay at 2.142M.  Took 12 years for the first million and 4 years for second.  We are purchasing our retirement home in a few months.  Hopefully we can keep our investments above 2M.   Husband is still working for 2 more years.

Congratulations!!

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #4190 on: December 05, 2020, 06:15:41 PM »
FWIW, I'm pretty flexible on the threshold here. If you hit $2M, you're in. If the market recedes a bit, but you haven't sold anything off in a panic, you're still good, IMO.

Welcome, new double millionaires!

SwordGuy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4191 on: December 05, 2020, 07:45:23 PM »
With the recent run-up in stock valuations to a bit above average returns, plus appreciating real estate values, our net worth is now the highest it's ever been.

Even better, everything we own is fully paid for so our monthly spend is a whole lot less.   Our expenses are $30k below what they were in Dec of 2019.   (And 56K below what they were in January of 2020 when we bought a new house and hadn't sold the old one yet!)  And we're making $24K more than we did in 2019, too.

Net worth is up!

Cash flow is up!

Hassle factor is lower.

Woo hoo!


FireLane

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Re: Race from $2M to $4M...and Beyond!
« Reply #4192 on: December 05, 2020, 08:03:26 PM »
My first million took 10 years, plus a few months. The second million took less than four years. And even though I just hit that mark this summer, I'm well on my way to the third.

Exponential growth is an amazing thing... even if these stock market valuations make me nervous.

2sk22

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Re: Race from $2M to $4M...and Beyond!
« Reply #4193 on: December 06, 2020, 03:56:05 AM »
My first million took 10 years, plus a few months. The second million took less than four years. And even though I just hit that mark this summer, I'm well on my way to the third.

Exponential growth is an amazing thing... even if these stock market valuations make me nervous.

To give you an old-timer's perspective: As per the calculator on this page, the initial $2500 we invested the mid 1990s in an S&P index fund is now worth about $15,600 (including dividend reinvestment and taking inflation into account). I had maxed out my 401k (the limits were laughably low) so we opened our account with Fidelity.

And mind you, this is after three big crashes: 2000, 2008 and 2020 !

UnleashHell

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Re: Race from $2M to $4M...and Beyond!
« Reply #4194 on: December 06, 2020, 04:11:35 AM »

Currently sat at $2.6 saved..  plus the house plus smallish pensions which we have not started drawing yet.

For someone born is just 16 years after the end of WW2 in impoverished London its hard to fathom how I got here.

yeah- I was born in a rented cottage on a farm in the home counties. We got a council house because the cottage was condemned. 
between me and the other half we are now in this group on a net basis (albeit we are going to be hitting FI independently due to various circumstances) and that's close too.
And in the future we could potentially be getting SS and pensions that will top 50k a year on top of the stash.

We are currently at the point of reorganizing everything financially and assessing our future moves and expenses (especially healthcare) to see at what point we can quit work. Healthcare is the big one as we have 4 kids between us that are under 26 and are on the current plan. 2 will age out in 3 years but we still have 2 to consider for a while.

But over 2m invested? 2 rental properties that kinda happened accidentally. Er - what???
We could end up with some 90k in income without the shares - just pensions and rentals.
Its possible that this quitting stuff might end up being over engineered... (mostly because once I quit I am never going back to a salaried job. Ever.)

Dicey

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Re: Race from $2M to $4M...and Beyond!
« Reply #4195 on: December 06, 2020, 04:37:05 AM »
Just because the ACA allows offspring to remain on their parent's insurance until age 26 does not obligate said parents to provide it for them. Related: At what age do modern parents cease paying for cars or cell phones?

Much Fishing to Do

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Re: Race from $2M to $4M...and Beyond!
« Reply #4196 on: December 06, 2020, 06:57:59 AM »
Still live in average house. Still buying average Hondaís, still using an iphone6.

Yeah, looks like my house is worth like 7% of my TNW now, and we love this house, don't care to move.  Seems like all my direct reports own homes worth twice what mine is, and my peers 4 times.... I have a friend with a new house that must have cost $1M to build (MCOL area) and just bought his wife a $70k car.  The other day he was talking about how he really wished he could help his kid with their $20k college costs for the year instead of them having to borrow it and her go into all that debt. That just sounds crazy to me (I'm not gonna argue whether one should pay for their kid's college, but for him to not think that he can afford that just seems bizarre to me when looking at that spending)

Its kinda funny to think I could just self-insure my own home and if it burned to the ground I'd only lose about what my portfolio does in every market correction, but with homeowners insurance being so relatively cheap I will not.

UnleashHell

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Re: Race from $2M to $4M...and Beyond!
« Reply #4197 on: December 06, 2020, 06:59:07 AM »
Just because the ACA allows offspring to remain on their parent's insurance until age 26 does not obligate said parents to provide it for them. Related: At what age do modern parents cease paying for cars or cell phones?
My kids started paying for their phones once they were out of education. I'm still paying for the youngest as she is at college full time (and she is paying her own way to college via scholarships and other funding).
My boy paid for his share of the car insurance once he wanted in on using a car. My kids have always paid for their own cars (i did help then select the cars and negotiate the price) because I felt that the way to make sure they were full vested in driving carefully and responsibly was to fully bear the financial burden.
and because I'm the meanest parent ever!!!


Healthcare - the cheapest way for my kids to get healthcare was to be on mine. once they get jobs that include healthcare then I'll go over the costing and work out the right solution - IE the one that costs them the least - if thats paying for their deductible and co-pays on my insurance then they can do that. They have to be involved in that decision so that they can see what goes into it.

lhamo

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Re: Race from $2M to $4M...and Beyond!
« Reply #4198 on: December 06, 2020, 10:20:01 AM »
Healthcare is the big one as we have 4 kids between us that are under 26 and are on the current plan. 2 will age out in 3 years but we still have 2 to consider for a while.

For those earning income you might want to have a look at what they would pay on an ACA plan -- my DS is earning too much in his current tech internship to qualify for subsidies, but is only paying around $300/month for a silver PPO plan with relatively low deductible and OOP costs ($500 deductible, $1500 OOP max).  All primary care and generic prescriptions are covered pre-deductible for ridiculously low copays ($5 and $15, IIRC).

The same plan would cost me closer to $1000 without subsidies.  Pays to be a young un!

Exflyboy

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Re: Race from $2M to $4M...and Beyond!
« Reply #4199 on: December 06, 2020, 10:45:16 AM »
Healthcare is the big one as we have 4 kids between us that are under 26 and are on the current plan. 2 will age out in 3 years but we still have 2 to consider for a while.

For those earning income you might want to have a look at what they would pay on an ACA plan -- my DS is earning too much in his current tech internship to qualify for subsidies, but is only paying around $300/month for a silver PPO plan with relatively low deductible and OOP costs ($500 deductible, $1500 OOP max).  All primary care and generic prescriptions are covered pre-deductible for ridiculously low copays ($5 and $15, IIRC).

The same plan would cost me closer to $1000 without subsidies.  Pays to be a young un!

$1300 for us and thats for a crappy bronze plan with a $7,000 deductible and NO prescription coverage.. At least not until the deductible is met.. what a joke.

Needless to say we "engineer" our income to make sure we get a healthy subsidy.. So we end up paying about $15/month for what is essentially catastrophic insurance and buy drugs from the UK or GoodRX coupons.

« Last Edit: December 06, 2020, 10:56:04 AM by Exflyboy »