Author Topic: Living with Parents to achieve FI  (Read 4488 times)

elduderino

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Living with Parents to achieve FI
« on: May 24, 2017, 08:26:17 PM »
Hi, just looking for some thoughts on my situation...

I spent my twenties spending more money than I was earning and went deep into debt.
I was renting apartments for 10 years, living paycheck to paycheck. 3 years ago I decided I needed to get out of debt and save money. In order to do that I moved back in with my parents. I'm now debt free and have 100k saved between a 401k, Roth IRA and Taxable Brokerage account. My savings rate is over 50% and I still take a vacation every year and go out to eat with my girlfriend on weekends.

I was looking into buying a co-op or condo in NY/NJ area but the prices are way out of my price range. (don't have enough to put down and don't have enough to cover monthly payments. Plus I would much rather live someplace warmer like Florida or Arizona. I have been applying for jobs in theses areas but haven't had much luck.

I make 75K at my current job and would make far less in FL or AZ.

My plan right now is this...

Keep saving, investing and living with my parents.
After 5-6 years ($400k saved) move to AZ or FL and get a lower paying job. Leave the money I have saved in the index funds and watch it grow for 5-10 years. Retire from working use the 4% rule.

Does this make sense?

mxt0133

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Re: Living with Parents to achieve FI
« Reply #1 on: May 24, 2017, 09:14:37 PM »
Lowering your housing expense anyway you can is a common strategy to FIRE and for here as long as the situation is mutually beneficial to both you and your parents most on this blog would agree.

Now if you were not contributing to the household expenses and were somehow hindering their own retirement plans then that is normally looked down upon.

One thing that stands out to me is that you cannot get a job in AZ or FL.  If it's because of a niche industry or position then that would be a reasonable excuse.  Otherwise that to me is a big red flag that you need to work on your career and try to increase your marketability as well as your current earning potential.  75K in the NY/NJ area after 10 years of experience in a professional career is low in my opinion, but you didn't specify your job and years of experience.


Mac_MacGyver

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Re: Living with Parents to achieve FI
« Reply #2 on: June 01, 2017, 08:06:13 PM »
Arizona and Florida are very different places, beyond being warm, (Arizona is not warm year round depending on location) why? From my experience NY/NJ try to make Florida/Arizona more like NY/NJ, keep that in mind. Like Californians in Colorado, don't import your failed ways.

Frankies Girl

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Re: Living with Parents to achieve FI
« Reply #3 on: June 01, 2017, 08:28:59 PM »
The only issue is whether the living arrangements are agreeable to your parents as well as yourself. As long as you are not taking advantage of them - pay some form of rent, do your own laundry, help out with general cleaning in common areas, offer to run errands, and respect their requests for visitors and comings/goings. I would hope they would also be very accommodating of you being an adult and treat you more as a roommate than continue the parent/child dynamic.

If this isn't going to be an issue, then your plans sound quite reasonable.

Bracken_Joy

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Re: Living with Parents to achieve FI
« Reply #4 on: June 01, 2017, 08:32:25 PM »
Would I do it? God no. But if it works for you and for them, why not? Multigenerational homes have been the norm for most of human history. We're the weird ones, now =)

GrumpyPenguin

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Re: Living with Parents to achieve FI
« Reply #5 on: June 02, 2017, 05:47:14 AM »
Would I personally do it? No. If I were you? Maybe.  Everyone's path is different.  If it's a mutually beneficially arrangement, go for it.  I think the "living with the parents" stigma is stupid.

marty998

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Re: Living with Parents to achieve FI
« Reply #6 on: June 02, 2017, 06:05:20 AM »
Would I do it? God no. But if it works for you and for them, why not? Multigenerational homes have been the norm for most of human history. We're the weird ones, now =)

Well... I thought it was the parents moving in with the kids was the norm in the past?

I don't understand it. Is there no urge to establish oneself as an independent adult?

doublethinkmoney

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Re: Living with Parents to achieve FI
« Reply #7 on: June 02, 2017, 06:17:32 AM »
My husband, my toddler and I just moved in with my inlaws. We didn't do it solely for financial reasons but it is one of the benefits. Their house is paid off and they are early 80s. His mom never wants to leave their home. We are moving in to help ease their tight budget by sharing household expense (benefits us too splitting), to help with maintaining the house (they are having trouble keeping up with physically and financially), we are paying to renovate for ourselves (as it will be our house) and to make it more aging friendly for them, our daughter gets to grow up knowing them better etc.

It's a great idea if you can live there and help around the house. Key is you have to make it mutually beneficial for it to last. Whether it's contributing financially or with housework. 

It's a smart decision as long as you can bank money and have a positive relationship with your parents. I wish I would have lived with mine longer instead of running out when I got my first good paying job.

There are good opportunities in FL (I live in central) you may just have to look around. Working for certain city governments offer decent pay, pension (free money!) and paid healthcare with good sick day policies. It's not always the starting salary but additionally perks and you can work your way up for higher salary. Good luck!


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Playing with Fire UK

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Re: Living with Parents to achieve FI
« Reply #8 on: June 02, 2017, 06:27:59 AM »
I'd check in with the parents first. If I'd invited someone to live with me as a favour so that they could get out of an awful debt situation (well done OP!); and then they moved out and retired early several years later I might feel like they'd taken advantage of my generosity. Your parents may be fine with it though.

Is your girlfriend a keeper and what are her thoughts on the situation? My SO was living at home while I was being an independent adult and it made for a strange dynamic. When we were talking about moving in together I was very concerned that there was a 'failure to launch' situation and that there was a danger SO thought I was going to be a replacement parent and care-taker. If I found out that your parents were making you lunch and doing your laundry I'd run a mile: I don't have adult relationships with children, no matter how old their ID claims they are.

If everyone is happy with the situation then your plan is great. If anything I'd question if you could increase the savings rate? Spending 50% of $75k with no housing costs seems on the high side.

khangaroo

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Re: Living with Parents to achieve FI
« Reply #9 on: June 02, 2017, 08:09:07 AM »
As many others have said, the most important part of this arrangement is the communication between your parents and yourself and discussing if there is an exit plan - which you have in your 5-6 year window. I'm in your same situation where I'm 28, making $86k, and still living with my parents. It's an amicable relationship where I pay for all the utilities and misc. bills and they pay their mortgage. I get along fantastic with my parents and I'm an only child so they've stated repeatedly that they enjoy me living at a home. Furthermore, it's the norm in my culture (Vietnamese) that the children live with their parents or if the children move out then they have a room reserved for whenever their parents decide to move in.

Honestly, if you're a productive adult and not mooching off your parents then I would stay with your parents as long as you possibly can because you've probably seen how much money you're able to save by sharing housing costs. Not going to lie, I do get some shit from my friends but when they hear how much I have in the bank then it became a little quiet... your goal of $400k saved in 5-6 years is very doable.

CryingInThePool

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Re: Living with Parents to achieve FI
« Reply #10 on: June 02, 2017, 08:33:36 AM »
adding a previous thread for some 'older' responses :)

https://forum.mrmoneymustache.com/welcome-to-the-forum/living-with-parents/

Slee_stack

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Re: Living with Parents to achieve FI
« Reply #11 on: June 02, 2017, 09:35:41 AM »
Hopefully the OP is taking a honest third party look at himself and his parents and ensuring the situation is truly fair.

I think its great that the OP is out of debt and saving 50%.

Are his parents saving 50%?

Obviously, alot of other variables go into that, but the point is they may be sacrificing their own future while sonny hoards up a stash of cash.  That would be pretty despicable on sonny's part.

Hopefully, that's not the case.  If sonny is not a real drain on the household, its all good.

Perhaps nowadays, 'Failure to Launch' is looked down upon, but I also wonder if in decades past, multi-generational family homes had a better household contribution ethic than might exist today.

nouveauRiche

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Re: Living with Parents to achieve FI
« Reply #12 on: June 02, 2017, 10:24:42 AM »
My plan right now is this...

Keep saving, investing and living with my parents.
After 5-6 years ($400k saved) move to AZ or FL and get a lower paying job. Leave the money I have saved in the index funds and watch it grow for 5-10 years. Retire from working use the 4% rule.

Does this make sense?

I don't think OP is asking *if* it's a good idea to live with parents.  OP is *already* living with parents and seems to be asking more about this financial plan. 

In order to answer that question, we'd need to know more about your potential income & expenses in FL/AZ and potential expenses post-FIRE.

I think the decision to move in with parents, clear up all the debt, and save up a big stache is brilliant.  Good for you, elduderino!

Playing with Fire UK

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Re: Living with Parents to achieve FI
« Reply #13 on: June 02, 2017, 11:28:01 AM »
Perhaps nowadays, 'Failure to Launch' is looked down upon, but I also wonder if in decades past, multi-generational family homes had a better household contribution ethic than might exist today.

To clarify, when I said 'Failure to Launch', I was referring to someone who is unable to operate as a adult, not someone who is contributing to a household that happens to include their parents.

I agree that living with parents can be a positive thing for everyone involved.

But I worry for adults who go from being babied by their parents to babied by their spouse. I consider a healthy 28 year old who cannot cook a meal or wash up a failure, I consider an adult who can do these things but doesn't a shit.

Bracken_Joy

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Re: Living with Parents to achieve FI
« Reply #14 on: June 02, 2017, 11:29:51 AM »
It sounds like OP was living on their own for 10 years before moving back. Hardly sounds like failure to launch in this case.

Dicey

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Re: Living with Parents to achieve FI
« Reply #15 on: June 02, 2017, 12:32:03 PM »
I'd wonder what OP was doing to contribute to his parent's household. Laundry, chores, lawn mowing, grocery shopping, meal preparation, moderate rent paying? If so...maybe. if no, red flags galore.