Poll

Please read below and pick the best option!

1
63 (69.2%)
2
13 (14.3%)
3
5 (5.5%)
4
2 (2.2%)
Other
8 (8.8%)

Total Members Voted: 90

Author Topic: IT high-earner: rush to FIRE or semi-retire?  (Read 11994 times)

gerardc

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IT high-earner: rush to FIRE or semi-retire?
« on: September 15, 2016, 10:56:56 PM »
I'm a 32 year old software engineer (recent grad), have been a good boy all my life and can't wait to let loose a little (FIRE). I love beach/vacation destinations and would like to travel extensively, 2-3 months at a time each place, and maybe work part time. In 6 months, I'll have ~$500k at Vanguard. A 4% SWR already pays for barebones expenses, but I'd like to reach $750k eventually, for which I'd need to work 2 more years after that. Here are my options:

1- Ask for 3-6 months unpaid leave, travel with no work whatsoever (company maintains benefits and partial stock vesting during leave), and come back for 2 more years
2- Quit, travel a bit then start PT work. This could be basic web development @ ~$60-80/h, a little boring but only 10-20 hours a week. I could even do odd jobs for variety, like physical or social jobs (never tried that!). Assuming PT work sustains my expenses, and I don't touch my stash, it would grow from 500k to 750k in 8.3 years assuming 5% real return.
3- Mix & match: unpaid leave, work 1 year, then PT
4- Mix & match: work PT, then come back to work later if necessary (more risky if I can't get a similar job)

The thing is, I'd probably PREFER to work 10-20h a week rather than 0 if I have full flexibility and freedom! (this is an average, I might do 40 h/week for a month, then 0 for 2 months, etc.). I like being able to work whenever I want, apart from annoying Skype sessions with clients. I'd be able to live in fun places like Mexico or Miami, which is exactly what I want medium-term.

However, all this is pretty theoretical at this point, never tried it, so if fellow early retirees have related experience, I'm curious to hear it. Thanks!
« Last Edit: September 15, 2016, 11:14:51 PM by gerardc »

ender

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #1 on: September 15, 2016, 11:05:20 PM »
If I were you and was able to bank almost $200k a year ($250k in 1.5 years is a $167k/year pace) I'd work a few more years and call it quits and not worry about any of this.

Why isn't that an option on your list?

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #2 on: September 15, 2016, 11:12:04 PM »
If I were you and was able to bank almost $200k a year ($250k in 1.5 years is a $167k/year pace) I'd work a few more years and call it quits and not worry about any of this.

Why isn't that an option on your list?

I bank $125k/year now (earn 255k gross), but I expect it to increase. Also, 2 more years are in addition to the next 6 months.

This is basically option 1. I'll ask for at least a short leave. Work is getting at me, I need to escape for a bit.

mxt0133

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #3 on: September 15, 2016, 11:51:54 PM »
If you just graduated and are marking 250K a year I assume you have a graduate degree and are very specialized.  Depending on how long you have been working, I can't imagine that you would have a hard time getting another position in a year or so that pays 200K if you quit right now.  I would recommend you keep your contacts warm and come up with a story that says you are a reliable employee that just needed a break.

You have plenty of options and I would say go for it with 500k in the bank.  I took a similar break during '09 in the middle of the great recession.  I was a developer as well but I wasn't paid nearly as high as you and I assume not as specialized either.  I took 6 months off to decompress after getting married, drove across the country with my wife and had a mini adventure.  We liked the west cost and decided to stay.  When we decided to have children I started to look for work in the SF and got multiple offers for the same pay in under two weeks of applying online, in the middle of a recession for a mediocre software developer.

Depending on your goals however, it might make sense to just take a sabbatical for a month or two, sprint to 750K and then never have to worry about paid employment again.  For me personally I like to make money even if I don't really need it so my FIRE goals are to get to a bare minimum number for my family and just drop to part-time or contract work and travel the world.  This assumes that my wife and I will be working in some capacity.  I'm about two years away and them I'm going to look for a fully remote contract position.

 

aFrugalFather

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #4 on: September 16, 2016, 12:05:24 AM »
Just take the 3-6 months now and chill.  I think at least by half way into your leave the answer will become clear to you.  You already have F-U money, use it to figure things out. 

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #5 on: September 16, 2016, 12:31:13 AM »
my FIRE goals are to get to a bare minimum number for my family and just drop to part-time or contract work and travel the world.

I think that's a good approach. Just need to figure out what that "bare minimum" is. 2 years full time or 8 years part time, that's quite a difference.

Just take the 3-6 months now and chill.  I think at least by half way into your leave the answer will become clear to you.  You already have F-U money, use it to figure things out. 

Yeah, I'm probably overthinking a bit now. I like things to be planned out in advance so I can optimize, but feelings/happiness are hard to optimize when you haven't tried the lifestyle fully yet.

At 32, in good shape, I have a lot of stamina to turn things around if needed, it's not like I'm 65 and won't earn another penny in my life.

rente39

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #6 on: September 16, 2016, 12:50:35 AM »
I planned to take a year off. Then got scared last minute and cancelled it. Thought I would never get a good paying job again and thus wanted to FIRE first.

Looking backwards and comparing with friends who did it the other way around, I think I made a mistake. While I never wanted this a few years ago, I might find myself be stuck with kids and a house pretty soon. Both making it harder to travel. And even without, I guess couchsurfing is more popular with 25 then with 45.

So smartest sequence from my perspective is: Travel, FIRE, kids/House,

CanuckExpat

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #7 on: September 16, 2016, 01:03:15 AM »
I would say continue doing whatever seems the most fun and like the best idea at the time. It seems to be working so far for you :)

One thing to consider, if you are looking at options that boil down to either:
a) Work one year making $250k, not work next year
b) Work part of one year, making $100k, work part of second year, making $100k

You might end up with more money over two years, after tax, with the second option (plug in your real numbers and do the calculations and all that).

RobFIRE

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #8 on: September 16, 2016, 01:57:41 AM »
Financially, it would make sense to continue the highly-paid full-time job for a bit longer, so option 1 would make most sense. That's what I think I would do. After all, if you're saying you could live for 50 years after that point, another two years' work up front to further secure it seems worth the effort. Then, you don't need any part time work, it is purely a choice.

However, you seem to be in such a strong position that I think all options would most likely work fine.

As you mention that you would likely want to continue part-time working in some form regardless, look up the "earn to give" concept if you haven't already heard about it.

(I'm also 32 and in IT, not earning at the level you are though. My ideal future plans would likely involve contract work, so working a few months at a time then with a few months off i.e. part time intermittent. I'm not sure that regular part time work is paid at the same good contracting rates.)

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #9 on: September 16, 2016, 03:06:07 AM »
Financially, it would make sense to continue the highly-paid full-time job for a bit longer, so option 1 would make most sense. That's what I think I would do. After all, if you're saying you could live for 50 years after that point, another two years' work up front to further secure it seems worth the effort. Then, you don't need any part time work, it is purely a choice.

Financially, early years at my prime are the best to save and let investments compound but... early years at my prime are also the best to enjoy and have fun. It's only 2 years, but at 32, it recently dawned on my that I wouldn't be young forever, especially to do typical youngster stuff like backpacking in hostels.


(I'm also 32 and in IT, not earning at the level you are though. My ideal future plans would likely involve contract work, so working a few months at a time then with a few months off i.e. part time intermittent. I'm not sure that regular part time work is paid at the same good contracting rates.)

You're right, contract work definitely pays a little more, but the PT work I'm referring to can be done remotely from anywhere and on my own schedule, which is very important to me, and still pays decently. If I were to work on a contract in house at a fixed location on regular hours, I'd rather just get a regular job instead, and stay a little longer.


Looking backwards and comparing with friends who did it the other way around, I think I made a mistake. While I never wanted this a few years ago, I might find myself be stuck with kids and a house pretty soon. Both making it harder to travel. And even without, I guess couchsurfing is more popular with 25 then with 45.

So smartest sequence from my perspective is: Travel, FIRE, kids/House,

That's exactly what I'm afraid of. Backpacking in hostels is more fun when you're young. Also, I've found most people in my area aim to settle down and have a family, and being an employee is the perfect fit for that life (stability, good income, regular schedule). If you don't want that pre-packaged life yet, things are somewhat inefficient.

I'd say the best sequence is more like: FI, Travel, RE, kids/House. A lot of people travel right away when they're young and then get stuck with no options or F-U money.


One thing to consider, if you are looking at options that boil down to either:
a) Work one year making $250k, not work next year
b) Work part of one year, making $100k, work part of second year, making $100k

You might end up with more money over two years, after tax, with the second option (plug in your real numbers and do the calculations and all that).

Yeah, splitting up a 4-month unpaid leave equally in two calendar years, results in a ~$2000k tax break for me compared to having it in one year, assuming a 5% difference in marginal tax rate. But making the leave overlap Christmas would reduce holiday pay by more than that amount :)

The concept is still useful for PT work over 8 years vs full time over 2 years, though. PT should be more advantageous tax-wise, but would redue ACA credits. (Analysis just for fun, I'm not really optimizing at this level of details)

Doubleh

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #10 on: September 16, 2016, 03:47:57 AM »
I'd definitely vote for 1, at least to start with. I'm 37 now, and have twice in the last 5 years taken a year off from work to travel and do fun stuff. Each time I have had a refreshing experience and come back to a work situation as good or better than what I left. My couple of learning points:

1. Don't think of it as putting off your FIRE - think of it as bringing some of it forward to enjoy now!

2. If you're feeling at all burnt out at work the revitalising power of 6 months doing something you enjoy is amazing. Both times I walked away from a pressured but relatively well rewarded career feeling I needed to get away from it for good, only to find that with some de-stress and a little perspective I was happy to go back into the fray for a couple more years.

3. What you think while you are working that you will want in FIRE, may be very different from what you actually want once you are not working every day. Your whole perspective shifts, and I feel I've learned a lot about myself and my needs that will make the eventual FIRE transition easier. Use the time as a test run, check out locations, maybe even look at a couple of part time work options.

Good luck

Inevitable

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #11 on: September 16, 2016, 06:17:08 AM »
Option 1 for sure.  By the time your 3-6 months is up you'll be re-energized and ready to push on.

I should really switch from hardware to software after hearing all the software guy's salaries lately :-P

Guesl982374

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #12 on: September 16, 2016, 06:33:43 AM »
Option 1

I'll leave this here: https://livingafi.com/2015/08/04/taking-a-gap-year/

Enjoy some time prior to spouse and/or kids.

CanuckExpat

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #13 on: September 16, 2016, 11:09:49 AM »
It's only 2 years, but at 32, it recently dawned on my that I wouldn't be young forever, especially to do typical youngster stuff like backpacking in hostels.

FWIW, if you are looking at work-holiday visas and such, many of them have upper age cut-offs (35 being common)

Quote
PT should be more advantageous tax-wise, but would redue ACA credits. (Analysis just for fun, I'm not really optimizing at this level of details)

Slightly sad that you are not, but it is probably the sane thing to do :)

UKMustache

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #14 on: September 16, 2016, 11:21:25 AM »
My view would be this. 
Make hay while the sun shines because next year there could be some huge industry change that completely wipes out your ability to earn that kind of money.

Take 2-3 months off next summer then get your head down for that two years. 
You'll be 34 and at that point can choose whatever work you want (in whatever quantity) for the rest of your life.

I chose option 1, it's the closest to my viewpoint.

deeshen13

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #15 on: September 16, 2016, 11:30:19 AM »
I'd definitely vote for 1, at least to start with. I'm 37 now, and have twice in the last 5 years taken a year off from work to travel and do fun stuff. Each time I have had a refreshing experience and come back to a work situation as good or better than what I left. My couple of learning points:

1. Don't think of it as putting off your FIRE - think of it as bringing some of it forward to enjoy now!

2. If you're feeling at all burnt out at work the revitalising power of 6 months doing something you enjoy is amazing. Both times I walked away from a pressured but relatively well rewarded career feeling I needed to get away from it for good, only to find that with some de-stress and a little perspective I was happy to go back into the fray for a couple more years.

3. What you think while you are working that you will want in FIRE, may be very different from what you actually want once you are not working every day. Your whole perspective shifts, and I feel I've learned a lot about myself and my needs that will make the eventual FIRE transition easier. Use the time as a test run, check out locations, maybe even look at a couple of part time work options.

Good luck

Great post. Agreed that Barebones FI -> Travel Sabbatical -> Finish full FIRE (if needed) -> Rest of your life is a solid route. Traveling while young and without responsbilities is the nuts (poker lingo).

undercover

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #16 on: September 16, 2016, 11:45:36 AM »
I voted option (1) because it makes the most sense to me given how close you are. 3-6 months is plenty to get your feet wet and come back for an additional two years. After that, you'll be set and can work part time if you want in the future.

I don't necessarily think that your 20s and 30s are the prime years to travel. Honestly, I'm 26 and I never want to travel by backpack through hostels. I could totally do it now - I just have zero interest. Well, to be fair, I have no interest in traveling internationally anyway (at least right now in my twenties), but to each their own. I think your 40s and 50s can be just as good (if not better). Of course, time is never guaranteed. In general, I just don't think you'll be missing out on much, especially considering it's only ~3 years away.

I'd put the hard work in now because you won't want to work that hard in the future. Your desire to "get ahead" will wane until it eventually folds. You'll be glad you sucked it up for a while longer earlier, rather than waiting. Leaving and starting different jobs is also stressful, just like moving in general is. Nobody likes to do it.

The fact that you're at your barebones number is great. It means that if shit really hits the fan, you can quit and take it easy for a while as you figure out what you really want to do. I always like looking at my barebones number, because it means that I can quit, still live a decent life and focus on exactly what I want. This may not include extensive traveling or frivolous purchases, but who cares...time is worth more than anything. That said, there's nothing really for you to improve on from an income perspective, so any additional time you spend at work is time well spent in my opinion. It would be different if you were making below $150k.

So yeah...I voted option (1). Option (2) is completely viable for you though, so I wouldn't discount it. All things considered, spending your time making $250k/yr is something very few people can do. Take advantage of it while you can. Conversely, if your time at work becomes absolutely unbearable, you definitely have the option of quitting and making at least a good portion of what you make now and potentially living a much more fulfilling life now, rather than later.

dividendman

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #17 on: September 16, 2016, 12:19:43 PM »
I'm in your exact same situation (age, location, industry) with a bit more of a stash.

I voted 1 for you but I'm too much of a coward to take my own advice :) For some reason I want to reach a cool million. There is no logic behind it really. My job is soul destroying too.... but it's so much money. Sigh.

I wish I could take my own advice, I don't know how to push myself over the edge and am just hoping I get laid off.


Classical_Liberal

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #18 on: September 16, 2016, 03:47:11 PM »
#2 work part time and let the stash grow you to FI.  This is what is sounds like you want, plus remote PT work lets you travel, which is also what you want.  Take a few months before you do to get your financial life in order for some potential drawdowns & personal life in order for the travel you want to do.

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #19 on: September 16, 2016, 10:29:43 PM »
I'm 37 now, and have twice in the last 5 years taken a year off from work to travel and do fun stuff. Each time I have had a refreshing experience and come back to a work situation as good or better than what I left.
Do prospective employers question your motives for your sabbatical? 2 years out of 5 seems like a lot (but would be ideal if possible)

2. If you're feeling at all burnt out at work the revitalising power of 6 months doing something you enjoy is amazing. Both times I walked away from a pressured but relatively well rewarded career feeling I needed to get away from it for good, only to find that with some de-stress and a little perspective I was happy to go back into the fray for a couple more years.
Yeah! Honestly even after 2-3 days of a 1-week vacation the social momentum builds up like crazy, and I can feel good things would happen if I could prolong it, I would grow a lot in different areas. It's hard to become better at something else, or change your habits, if you don't have space/freedom/time to do it.

I know that after 1-2 months I'd get bored and want to do some computer/math projects, and I'd crawl back to work. But then again, maybe not. Maybe I'll grow enough in other areas and want to keep pushing in that direction. Who knows.

3. What you think while you are working that you will want in FIRE, may be very different from what you actually want once you are not working every day. Your whole perspective shifts, and I feel I've learned a lot about myself and my needs that will make the eventual FIRE transition easier. Use the time as a test run, check out locations, maybe even look at a couple of part time work options.

How did your perspective shift exactly?


I'd put the hard work in now because you won't want to work that hard in the future. Your desire to "get ahead" will wane until it eventually folds. You'll be glad you sucked it up for a while longer earlier, rather than waiting. Leaving and starting different jobs is also stressful, just like moving in general is. Nobody likes to do it.

I can already feel my desire to get ahead wane at my age. When I was younger, I always had software/web projects I was interested in after school. Now, I do it mostly for the money. It's hard to tell if I'm irreversibly bored of coding, or I just do too much in my day to day to find more pleasure in it. Probably the latter.

As to moving/starting new jobs, good point. Inertia is so much easier, and has high value in itself. It definitely gives the feeling of being in a rut though, so I can understand why people complain about 9-5 so much.

I'm in your exact same situation (age, location, industry) with a bit more of a stash.

I voted 1 for you but I'm too much of a coward to take my own advice :) For some reason I want to reach a cool million. There is no logic behind it really. My job is soul destroying too.... but it's so much money. Sigh.

I see many of my colleagues in the same situation. Higher level than me, been working for ~10 years, don't seem to particularly enjoy it (I may be wrong). Inside I'm thinking, "Why the hell don't you quit?".  They must have $1m+ unless they spend foolishly. Then they get married, kids, and need to stay even longer. What a drag.

#2 work part time and let the stash grow you to FI.  This is what is sounds like you want, plus remote PT work lets you travel, which is also what you want.  Take a few months before you do to get your financial life in order for some potential drawdowns & personal life in order for the travel you want to do.

That does sound alluring. My only worry is that I think I like traveling to exotic spots now because I've always been NOT working during those times, but I'm not sure if what I like is the traveling part or the not working part. I suspect it's the not working part. I'm sure being in paradise is just as depressing if you're on your laptop all day. 10-20h/week would be good, but I can see myself feeling semi-locked to PT work for a mediocre $30k/year, when I could do so much more by cruising here.

waltworks

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #20 on: September 16, 2016, 11:09:30 PM »
I'd do some part-time gig stuff and see how it goes. If you like it, and you think you like 10-20 hours a week of work, then you're done.

If you don't, then keep the nose to the grindstone for a couple years and you're done.

-W

EscapeVelocity2020

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #21 on: September 17, 2016, 12:50:53 AM »
Can you take an international position with your company?  Can you find work abroad as freelance or with another company?  If I were in your shoes, wanting to travel but feeling held back by making good income, I'd try to push hard on the edges.  You have little to lose and lots to gain.

I'm a little biased, I turned my crap high-paying job into an international stint with a company that treats me really well paying even better.  Life is good when you've got skills and nothing to lose.

And just from personal experiences, you'll probably have more fun being a young expat than a 30+ guy in a hostel with 20 year old college students.

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #22 on: September 17, 2016, 02:15:28 AM »
AFAICT, software jobs pay more in Silicon Valley or a least in the US; people I know got a pay cut going international. I'm sure it's different for traveling salesmen...

I'm already an expat in the US and it took me a good 1-2 years to fully adapt. It's a lot of trouble to settle in a new country, which is why I'd prefer playing the tourist card for 2-3 months at each location.

And I do like mingling with 20-somethings ;) I'm interested in checking out resort/vacation communities in the future for the good vibes.

Spud

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #23 on: September 17, 2016, 05:20:27 AM »
How about you keep working for however long you need to achieve FIRE. You can always come back to work full time, part time (to whatever extent) or not at all. The best bit would be knowing that you didn't NEED to go back to work.

I'd hate to semi-retire but always be thinking about having to do another 6-8 months in 2-3 years time or something along those lines. Someone earning what you're earning, in my opinion, should just power across the finishing line as fast as possible and then stop worrying about details.

patrickza

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #24 on: September 17, 2016, 05:31:10 AM »
Almost 1, but I would do a sabbatical and work a couple of years, rinse and repeat to the magical $1m mark.

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #25 on: February 14, 2017, 09:45:58 PM »
I think I'll pick the least popular option 3.

Less than 6 months later, I'm already at ~$540k due to good recent market performance. I got a raise and will gross close to $300k in 2017, so there's no way I'm not milking it for at least 1 more year (sigh). This should put me around $700k same time next year, when I plan to stop.

Why not milk it a bit more and get to a more comfortable level of say, 1-1.5m (which I'd like to get to eventually)?
- single, no kids
- I want to live in LCOL countries for a bit (Mexico, South America)
- I'm still open to keep hustling in the future (PT work, business, temporary full-time stints in 10 years or so)
- I'm Canadian and can go back if shit hits the fan health-care wise
- ... and most importantly: I'm unhappy in my current situation, despite trying everything to make it better.

So, despite the real possibility that I can't get the same salary in the future if I walk now, I'm kinda making peace with this decision.

Oh yeah, I also canceled my unpaid leave plans. I may ask for an extra 1-2 weeks of unpaid time off this year but no more. I think a longer leave would be nice to decompress, but would be too short -- it would force me to start thinking about logistics of coming back as soon as I start, and would prevent me from starting projects with longer committments, etc. which is really my main goal for FIREing.

EscapeVelocity2020

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #26 on: February 14, 2017, 10:47:36 PM »
Thanks for following up.  I didn't get the impression that the extra cash was making you extra happy tho.  Either you go out on the edge - testing the idea that you have enough - or you make a shitload more and more ad infinitum.  But all of this middling expectation to have it all (knowing you retired with enough) is not helping anybody (because nobody knows this, because if we know we had enough, we might possibly have spent more).  You either don't have enough make do, or you already have enough and maybe could make more if you need to.

obstinate

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #27 on: February 14, 2017, 11:19:29 PM »
I'm a 32 year old software engineer (recent grad), have been a good boy all my life and can't wait to let loose a little (FIRE). I love beach/vacation destinations and would like to travel extensively, 2-3 months at a time each place, and maybe work part time. In 6 months, I'll have ~$500k at Vanguard. A 4% SWR already pays for barebones expenses, but I'd like to reach $750k eventually, for which I'd need to work 2 more years after that. Here are my options:

1- Ask for 3-6 months unpaid leave, travel with no work whatsoever (company maintains benefits and partial stock vesting during leave), and come back for 2 more years
2- Quit, travel a bit then start PT work. This could be basic web development @ ~$60-80/h, a little boring but only 10-20 hours a week. I could even do odd jobs for variety, like physical or social jobs (never tried that!). Assuming PT work sustains my expenses, and I don't touch my stash, it would grow from 500k to 750k in 8.3 years assuming 5% real return.
3- Mix & match: unpaid leave, work 1 year, then PT
4- Mix & match: work PT, then come back to work later if necessary (more risky if I can't get a similar job)

The thing is, I'd probably PREFER to work 10-20h a week rather than 0 if I have full flexibility and freedom! (this is an average, I might do 40 h/week for a month, then 0 for 2 months, etc.). I like being able to work whenever I want, apart from annoying Skype sessions with clients. I'd be able to live in fun places like Mexico or Miami, which is exactly what I want medium-term.

However, all this is pretty theoretical at this point, never tried it, so if fellow early retirees have related experience, I'm curious to hear it. Thanks!
Software is a gravy train right now. I suggest you not get off until you're certain you need no more gravy.

Mr. Green

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #28 on: February 15, 2017, 05:55:34 AM »
If you manage to work out a part-time arrangement with your employer, let me tell you it is AMAZEBALLS. I had planned to FIRE in 2016, had some personal challenges, and ended up back at work. Just after the new year I reached an agreement to work half-time. Having 4 days off and major flexibility in my hours on the 3 days I do work is like a dream. It's what I imagine work would be like if you could design your dream job, at least for me anyway. I highly recommend it!

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #29 on: February 15, 2017, 07:12:08 AM »
It comes down to what YOU want to do and what risk your willing to take to do it. If it were me I would work 2 years and then do it. Not much difference between 32 and 34 BUT 50% difference in your NW.

However, based on your original question I picked Quitting. Nowhere did you mention what I was suggesting so it cant hurt to ask for the leave and during that time maybe you will figure out more what your really want to do.

Good luck!

prognastat

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #30 on: February 15, 2017, 08:18:16 AM »
I chose 1 since it is closest.

What I would probably do is try to take 2-3 months off to completely disconnect and decompress.

Then come back reinvigorated and put your nose to the grindstone as hard as you can both at work and at cutting cost to increase savings to reduce your time to FIRE even more by making more OT if available and saving a higher %. Try to bump up your savings to 150k+ if possible and retire in under 2 years. However that's just me and that I would be more concerned in getting enough to FIRE first rather than hoping I will have the capability or will to do the work for longer than that.


SuperSecretName

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #31 on: February 15, 2017, 08:30:19 AM »
You can combine #1s and 2.  Ask for the unpaid time off, and if you don't want to come back after that, just quit at that point.

There is incredible value in geographic arbitrage if you decide to go PT.

prognastat

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #32 on: February 15, 2017, 11:26:29 AM »
I think I'll pick the least popular option 3.

Less than 6 months later, I'm already at ~$540k due to good recent market performance. I got a raise and will gross close to $300k in 2017, so there's no way I'm not milking it for at least 1 more year (sigh). This should put me around $700k same time next year, when I plan to stop.

Why not milk it a bit more and get to a more comfortable level of say, 1-1.5m (which I'd like to get to eventually)?
- single, no kids
- I want to live in LCOL countries for a bit (Mexico, South America)
- I'm still open to keep hustling in the future (PT work, business, temporary full-time stints in 10 years or so)
- I'm Canadian and can go back if shit hits the fan health-care wise
- ... and most importantly: I'm unhappy in my current situation, despite trying everything to make it better.

So, despite the real possibility that I can't get the same salary in the future if I walk now, I'm kinda making peace with this decision.

Oh yeah, I also canceled my unpaid leave plans. I may ask for an extra 1-2 weeks of unpaid time off this year but no more. I think a longer leave would be nice to decompress, but would be too short -- it would force me to start thinking about logistics of coming back as soon as I start, and would prevent me from starting projects with longer committments, etc. which is really my main goal for FIREing.

Glad to hear it worked out in your benefit. It is great to have only 1 year left.

Also living in LCOL countries for a bit and needing less than 4% SWR is likely to lead to your stash growing significantly during that time if done right.

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #33 on: February 15, 2017, 08:30:27 PM »
Thanks all for your helpful responses! I often come back to this thread when brainstorming about my plans.

But all of this middling expectation to have it all (knowing you retired with enough) is not helping anybody (because nobody knows this, because if we know we had enough, we might possibly have spent more).  You either don't have enough make do, or you already have enough and maybe could make more if you need to.

Sorry, I'm having a hard time wrapping my head around your comments. What is your point exactly?

Software is a gravy train right now. I suggest you not get off until you're certain you need no more gravy.

I'm painfully aware of this opportunity cost, I don't think I'm worth $300k/year now. That's really at the heart of my dilemma.

The thing is, "enough" is a nebulous concept. At 700k, I could be like "fuck that shit", go back to Canada/Mexico and live a good (simple) life. Or I could keep going for 3-5 years until 1.3-1.5m, and gain a lot of lifestyle flexibility for the rest of my life.

Also, I could see this "enough" amount creeping up the closer I get to it. Not even 6 months ago, I was torn between 500k and 750k. Today, I'm thinking definitely 700k and maybe up to 1.5m. What's it going to be next?

If you manage to work out a part-time arrangement with your employer, let me tell you it is AMAZEBALLS. I had planned to FIRE in 2016, had some personal challenges, and ended up back at work. Just after the new year I reached an agreement to work half-time. Having 4 days off and major flexibility in my hours on the 3 days I do work is like a dream. It's what I imagine work would be like if you could design your dream job, at least for me anyway. I highly recommend it!

That does sound amazeball. My large employer policy doesn't accommodate part-time or remote arrangements very regularly from what I can tell. Maybe if I give a good reason like family or charity, I could arrange something... Did you have a personal reason? I thought positions that allowed this were much lower paying, but I may be wrong. In any case I have nothing to lose by asking.

You can combine #1s and 2.  Ask for the unpaid time off, and if you don't want to come back after that, just quit at that point.

Yes, when I say "quitting" I actually mean going on a 6-12 month leave. It would be stupid not to. I'd get benefits for a few months and a foot in the door if I want to go back.

Also living in LCOL countries for a bit and needing less than 4% SWR is likely to lead to your stash growing significantly during that time if done right.

Yes that's a good option. I've read that living in Mexico costs roughly $1000/month. This would put me at 1.7% withdrawal rate, and my stash is likely to go up. Anything below 4% can be seen as savings, so even if I don't work, I can still focus on lowering expenses and work towards my long-term goal of 1-1.5m.

EscapeVelocity2020

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #34 on: February 16, 2017, 08:35:31 AM »
But all of this middling expectation to have it all (knowing you retired with enough) is not helping anybody (because nobody knows this, because if we know we had enough, we might possibly have spent more).  You either don't have enough make do, or you already have enough and maybe could make more if you need to.

Sorry, I'm having a hard time wrapping my head around your comments. What is your point exactly?


Looks like other folks and you covered what I was trying to say, which is simply that you either decide you have enough and retire already, or you decide you need to keep riding the train until you are super rich - which is a neverending quest of thinking your time is worth the extra padding on the stache.  You seem to want to have it both ways, knowing you have enough (which noone knows until on their deathbed) and also having more.  So my suggestion is that you try to make do with what you already have - knowing you might need to work again someday - or you put ER on the backburner until you figure out what your hard number is.  Don't let big income cloud the decision, either you personally know that you have enough or you set your number at enough and ER when you hit it.

The other road, which I'm particularly fond of, is looking for a dream job if you are on the fence about your FI.  That way, you can have it all - or at least almost all.  Although I still have to go to work and can't just screw off on a 6 month personal project, I also generally prefer what I do for work to what I'd be doing if I were retired.  Right now I'm setting up a 3 week business trip to Korea, Singapore, and China to prepare to bid a major project.  All I have to do is make sure there aren't any major showstoppers, capture 'bid conditioning' requirements, and write up an informal report about key aspects (mainly just adding color commentary to their electronic presentations).  I get paid well to do stuff I would do for free (as long as the business class travel expenses were paid for), but don't tell my employer.  Meh, I think they already know :)  I'm pretty obvious about it and probably annoy people with my enthusiasm.

Grogounet

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #35 on: February 17, 2017, 06:17:29 PM »
Have been travelling quite a lot and have mates who have traveled too for few months or few years.
This is a dream of many but I would consider the fact that MOST people have enough of travels just after few months.

Sure you will find some blogs of people who travel permanently... But this a pretty rare species...

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #36 on: February 17, 2017, 09:28:39 PM »
Have been travelling quite a lot and have mates who have traveled too for few months or few years.
This is a dream of many but I would consider the fact that MOST people have enough of travels just after few months.

Sure you will find some blogs of people who travel permanently... But this a pretty rare species...

Agreed. The main goal is definitely FIRE and enabling hobbies, fun activities, flexible projects and well-rounded life.

That said, I think travel is an exciting way to jump start FIRE and gain some momentum and fresh ideas. You can end up relocating to a LCOL country you prefer, which isn't technically travel anymore...

svennman

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #37 on: February 19, 2017, 11:22:46 AM »
Have been travelling quite a lot and have mates who have traveled too for few months or few years.
This is a dream of many but I would consider the fact that MOST people have enough of travels just after few months.

Sure you will find some blogs of people who travel permanently... But this a pretty rare species...

As an old man on this forum (everyone seems to be in their 20/30's) I agree with Grogounet. Unless you really like the lifestyle then travelling can get old after a while. I have spent about 7 of the past 25 years travelling through Asia and Australia, including very inexpensively. In 2003-05 I spent two years on a great island you could walk around in an hour. Fantastic people, beautiful water, coral, fish etc. I have never been so healthy. I worked one day a month remotely and covered all my costs. However, after 2 years I really started to yearn to do something different and ended up training to be a teacher and doing that for 3 years (the only traditional work I have done in the past 25 years). By the end of the 3 years I really hated it, the stress and madness of having to adapt to the system and decided to spend my time on further education, 6 years later I am still loving it. Combining the beachlife with getting an education (it would be fine just to audit all the wonderful online courses offered by universities around the world) would probably suit some people. I think I prefer spending time around students as a student myself, living the lifelong learning root. It is easy to be frugal when everyone around you is trying to live that way.

BlueMR2

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #38 on: February 19, 2017, 03:38:43 PM »
I'm hesitant about the leave.  If you're sure it's *really* cool at your company, OK...  At many though it's seen as a lack of commitment (well, I guess it really is in this case ultimately too) and you may not have job for long after coming back.

Quitting straight up would be worse though.  You're at that age where it gets a LOT harder to land IT jobs.  I wouldn't count on being able to find anything on demand on your return, no matter what your credentials are.  Ageism is a huge thing in the tech community.

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #39 on: February 19, 2017, 07:03:51 PM »
I'm hesitant about the leave.  If you're sure it's *really* cool at your company, OK...  At many though it's seen as a lack of commitment (well, I guess it really is in this case ultimately too) and you may not have job for long after coming back.
I got the impression that leaves every few years were generally accepted in IT at a large company. But yeah. I decided to postpone it to after I'll consider myself FI (700k, next year).

Quitting straight up would be worse though.  You're at that age where it gets a LOT harder to land IT jobs.  I wouldn't count on being able to find anything on demand on your return, no matter what your credentials are.  Ageism is a huge thing in the tech community.

I graduated 2 years ago and I'm already too old for employment :D

I know a software engineer who "retired" for 3 years then had to go back for work after a divorce, at maybe 55 years old. I think it's possible if you're good. Of course ageism can still be a factor. IMO it is more of a factor in start ups that try to exploit young programmers with long hours and worthless stock options, whereas older ones know their worth. There's also a lot of fatigue / burn out in this profession that might explain the employment-age curve.

Grogounet

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #40 on: February 21, 2017, 01:12:24 AM »
Have been travelling quite a lot and have mates who have traveled too for few months or few years.
This is a dream of many but I would consider the fact that MOST people have enough of travels just after few months.

Sure you will find some blogs of people who travel permanently... But this a pretty rare species...

As an old man on this forum (everyone seems to be in their 20/30's) I agree with Grogounet. Unless you really like the lifestyle then travelling can get old after a while. I have spent about 7 of the past 25 years travelling through Asia and Australia, including very inexpensively. In 2003-05 I spent two years on a great island you could walk around in an hour. Fantastic people, beautiful water, coral, fish etc. I have never been so healthy. I worked one day a month remotely and covered all my costs. However, after 2 years I really started to yearn to do something different and ended up training to be a teacher and doing that for 3 years (the only traditional work I have done in the past 25 years). By the end of the 3 years I really hated it, the stress and madness of having to adapt to the system and decided to spend my time on further education, 6 years later I am still loving it. Combining the beachlife with getting an education (it would be fine just to audit all the wonderful online courses offered by universities around the world) would probably suit some people. I think I prefer spending time around students as a student myself, living the lifelong learning root. It is easy to be frugal when everyone around you is trying to live that way.

Interesting story - Where did you find all the university on line resources?

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #41 on: December 16, 2017, 09:01:47 PM »
Update:

A little more than a year later, my stash is almost at $800k, which is higher than my original goal and was reached twice as fast as my estimate (thanks to good market returns).

A year ago, I was miserable and wanted a way out of my job, but I'm glad I stuck it out:
- Got promoted, got a few raises; I'll be grossing $370k in 2018;
- Work definitely gets easier with time. You learn to care less, you get more visibility/respect, you get better with internal tools, coding practices, you start mentoring junior co-workers, you get way more efficient, you see the bigger picture and high-visibility tasks more easily. If any junior software engineer is reading this, and especially for a first job at a top tech company, I definitely recommend you at least reach this point, it's worth it. See this thread for strategies that helped me.
- Finally sorted out immigration issues; simplified my tax and investments.
- I realized my initial FIRE number (500-750k) was a little naive; sure I could live like a grad student all my life, but I now think 1M-1.5M is more realistic for a single person. IMO, 1M allows for a nice comfortable life, and the 1.5-2M range allows for essentially an upper middle-class family lifestyle without working, which is great.

So, my new number is 1M, which I should reach in < 1.5 years assuming 0 market return, at which point I'll probably quit FT work and slowly cruise to 1.5M via PT work, if still desired.

The only thing that makes me doubt is that quitting at 1M feels like leaving so much money on the table, which I might regret later. Many people at my company are earning in the $400-700k range and their role doesn't seem that far out of reach. On the other hand, I'm also yearning for FIRE sooner than later, and I'm starting to notice a pattern of OMY syndrome, i.e. once I reach a milestone, I start to envy the next ladder rung.
« Last Edit: December 16, 2017, 09:17:14 PM by gerardc »

inline five

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #42 on: December 16, 2017, 09:09:20 PM »
Good lord what do you do? That is an insane amount of money. Are you in security?

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #43 on: December 16, 2017, 09:19:12 PM »
Good lord what do you do? That is an insane amount of money. Are you in security?

Machine learning but very applied, I don't do much research anymore. Also just good old backend engineering for web/mobile apps.

big_slacker

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #44 on: December 17, 2017, 08:08:20 AM »
Good lord what do you do? That is an insane amount of money. Are you in security?

That's normal total comp senior level pay in 'Big Tech'. AMZN, FB, GOOGL, MSFT, etc. I make similar as a network security dude and there are many times when I wake up and go WTF? Seriously? But I'm not gonna start complaining. :D

To the OP I've gone back and forth myself. I absolutely LOVED my travelling and remote work days. And 3 months 'vacations'. I'm personally a fan of the 10-20 hour/wk contract option for long term travel, *OR* the contract->rest->contract method. Which works better for you is a matter of personal pref. PT work is good for people who need normalcy/grounding and keeping skills sharp. But some work better going either fully devoted to work or play. Gotta know yourself.

FWIW I'd say do either of the above now *IF* you plan on marriage and family later in life. Digital nomadism is a lot tougher with a partner and very problematic with kids  (long term friends, regular schooling, etc.) I'm back in W2 hell till they're older, but after will go back to PT contract work myself.

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #45 on: December 17, 2017, 09:58:36 AM »
Good lord what do you do? That is an insane amount of money. Are you in security?

That's normal total comp senior level pay in 'Big Tech'. AMZN, FB, GOOGL, MSFT, etc. I make similar as a network security dude and there are many times when I wake up and go WTF? Seriously? But I'm not gonna start complaining. :D

To the OP I've gone back and forth myself. I absolutely LOVED my travelling and remote work days. And 3 months 'vacations'. I'm personally a fan of the 10-20 hour/wk contract option for long term travel, *OR* the contract->rest->contract method. Which works better for you is a matter of personal pref. PT work is good for people who need normalcy/grounding and keeping skills sharp. But some work better going either fully devoted to work or play. Gotta know yourself.

FWIW I'd say do either of the above now *IF* you plan on marriage and family later in life. Digital nomadism is a lot tougher with a partner and very problematic with kids  (long term friends, regular schooling, etc.) I'm back in W2 hell till they're older, but after will go back to PT contract work myself.

Are you close to FI? You could still do contract/PT even with a kid, i.e. without travelling. Still doesn't sound too bad.

big_slacker

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #46 on: December 17, 2017, 01:11:57 PM »
Good lord what do you do? That is an insane amount of money. Are you in security?

That's normal total comp senior level pay in 'Big Tech'. AMZN, FB, GOOGL, MSFT, etc. I make similar as a network security dude and there are many times when I wake up and go WTF? Seriously? But I'm not gonna start complaining. :D

To the OP I've gone back and forth myself. I absolutely LOVED my travelling and remote work days. And 3 months 'vacations'. I'm personally a fan of the 10-20 hour/wk contract option for long term travel, *OR* the contract->rest->contract method. Which works better for you is a matter of personal pref. PT work is good for people who need normalcy/grounding and keeping skills sharp. But some work better going either fully devoted to work or play. Gotta know yourself.

FWIW I'd say do either of the above now *IF* you plan on marriage and family later in life. Digital nomadism is a lot tougher with a partner and very problematic with kids  (long term friends, regular schooling, etc.) I'm back in W2 hell till they're older, but after will go back to PT contract work myself.

Are you close to FI? You could still do contract/PT even with a kid, i.e. without travelling. Still doesn't sound too bad.

No, I started really late, haha! No real job till 30 and no real savings till a few years back.

Yes on part time with kids in some situations. The challenges for me are healthcare ($1500+/month last I checked) and HCOL area that I can't leave without getting divorced or some unexpected change of heart. The healthcare thing I might be able to mitigate a bit by going on the plan available through my wife's work which is not nearly as good and involves more out of pocket than my big tech subsidized HSA plan. The HCOL area thing is a pretty big sticking point/compromise and a battle that isn't over yet.

For the time being I'm doing fulltime W2 and side biz to play FI catchup. It's first world problems though, for this season of life the situation is far from bad. :D

Don't want to derail with my situation though, you're in a spot where you have a lot more flexibility and I wonder which way you're leaning currently?

gerardc

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #47 on: December 17, 2017, 04:01:31 PM »
No, I started really late, haha! No real job till 30 and no real savings till a few years back.

Yes on part time with kids in some situations. The challenges for me are healthcare ($1500+/month last I checked) and HCOL area that I can't leave without getting divorced or some unexpected change of heart. The healthcare thing I might be able to mitigate a bit by going on the plan available through my wife's work which is not nearly as good and involves more out of pocket than my big tech subsidized HSA plan. The HCOL area thing is a pretty big sticking point/compromise and a battle that isn't over yet.

For the time being I'm doing fulltime W2 and side biz to play FI catchup. It's first world problems though, for this season of life the situation is far from bad. :D

Don't want to derail with my situation though, you're in a spot where you have a lot more flexibility and I wonder which way you're leaning currently?

Yeah, seems like FT W2 work is perfect for family life, but if you're not there yet it feels overly constrained. We need to capitalize on this software gravy train but it's just not the right timing for where I am in my life.

As for PT vs contract, for me it's all in the same bucket. Last time I contracted PT, I could basically say "I have more time this month" and get more work, or "I'm busy this month" and not work, or in between cruising PT. It's like they had an infinite amount of things they'd like to be done, but none were terribly urgent. Maybe because it was small companies and I was the only engineer/coder that created this dynamic. So in short, for me PT work, intermittent work, indefinite time-off, remote work, are all in the same bucket because I can easily switch between them and they don't require too much commitment, compared to FT work. I also put developing new hobbies and paying sidelines/projects in this category, because it would happen at the same time.

It's just that most of my co-workers who retire early still leave with 1.7M, 2M, 3M, etc. Quitting at 1M is pretty rare, so I wonder if I'm losing out. But then again they're usually married.

TheAnonOne

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #48 on: December 18, 2017, 05:12:45 PM »
I write .NET code full time (Backend/SQL/Mid/Front(web)) and make maybe around 200ish if I get some overtime (Sr. Software Engineer/ Contract work)

Can you PM me with what you do more specifically? It seems like something I should look into if the comp is 50+% more.

Thanks.

big_slacker

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Re: IT high-earner: rush to FIRE or semi-retire?
« Reply #49 on: December 19, 2017, 07:12:13 AM »
It's just that most of my co-workers who retire early still leave with 1.7M, 2M, 3M, etc. Quitting at 1M is pretty rare, so I wonder if I'm losing out. But then again they're usually married.

One thing I would worry about if you're planning on staying in the bay area long term is continued cost of living inflation and property tax increases. If you're planning on reloc somewhere cheaper though not such a big deal.