29 and Ready to Pull the Pin. Advice Needed.

[RunningBum]

Quote:

Originally Posted by AnAtomInTheUniverse I've considered taking an extended unpaid leave, but that creates 2 problems. First, I would be required to use up my accrued time, which I could cash out upon vesting. Combined with my savings it would give me about another 24k to invest. Second, taking a leave greater than 6 months would count as a break in service and would preclude me from vesting for another five years upon returning to work.

This is pretty telling to me. You have $6M, but you don't want to give up $24K to take some time off and reflect on a decision. While it's good to watch the nickels and dimes, look at the big picture. Disillusionment is one thing, safety is another, especially with a child on the way. I would get out and not look back. You didn't say what your expenses are, but I would hope that $6M would cover them at a 2 or 2.5% withdrawal rate.

[daylatedollarshort]

You might want to read read Your Money or Your Life. That might help you decide. After taxes, commute costs, and things you can't do for yourself because you don't have time, what are you really making per hour?

With two people at home and more free time it doesn't cost us nearly as much to live as it used to. Now we have time to make meals from scratch, do our own taxes, get gas from Costco during the day when the lines are short, go out for lunch specials and Taco Tuesdays instead of Friday night after work prices, shop for cheaper cell phone plans, compare insurance rates, switch over to solar and LED lights, and just a hundred or so little things like that which have all added up to much lower annual expenses, plus our taxes are much lower.

[Milton]

Quote:

Originally Posted by rodi If it's in her name - it's her asset, not yours.… I would look closely at how the asset is titled. I assume (but could be very wrong) that it is an inheritance. If your wife titled it in her name only, then it is HERS separate from the marital assets.

Those are pretty categorical statements, considering that you don't know what jurisdiction they reside in.

Your advice may be incorrect.

[Walt34]

Quote:

Originally Posted by AnAtomInTheUniverse I've considered taking an extended unpaid leave, but that creates 2 problems. First, I would be required to use up my accrued time, which I could cash out upon vesting. Combined with my savings it would give me about another 24k to invest. Second, taking a leave greater than 6 months would count as a break in service and would preclude me from vesting for another five years upon returning to work.

With RunningBum's post it just clicked for me what I think is going on. I suggest three books:

Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich: Jason Zweig: 9780743276696: Amazon.com: Books

Thinking, Fast and Slow: Daniel Kahneman: 9780374533557: Amazon.com: Books

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions: Dan Ariely: 9780061353246: Amazon.com: Books

People are hardwired to avoid loss. Most feel more pain from losing $1 than pleasure from gaining $2 and repeated testing has shown that many will behave in just that fashion.

I suspect you're perceiving the loss of the pension and the security that comes with it as a loss. But you already have assets that make the pension a pittance. Still, it's a loss, and that is hard to take. And perhaps there's a bit of the "sunk costs fallacy" going on with the five years you have invested in it. Walking away from the job means you'll feel as though you wasted those five years and that's a loss too.

Psychological diagnosis courtesy of Walt34 and worth exactly what you paid for it.

Really guy, if you're hating life because of the job you have an opportunity many wish for but few ever get. Quit, put the money in a life cycle fund as suggested, and go do whatever it is that makes you and your family happy.

[rodi]

Quote:

Originally Posted by Milton Those are pretty categorical statements, considering that you don't know what jurisdiction they reside in. Your advice may be incorrect.

You are right.
I might be incorrect.
I also mentioned I was basing it on an assumption that might be incorrect.

I stand by my paranoia though - that spouse that didn't receive the windfall should have a backup plan to support themselves in case something happens. I've seen friends who were SAHMs who were completely blindsided when the marriage collapsed and they had to support themselves after a big gap in work history. My mindset has been shaped by witnessing this.

[ChadR]

Quote:

Originally Posted by rodi You are right. I might be incorrect. I also mentioned I was basing it on an assumption that might be incorrect. I stand by my paranoia though - that spouse that didn't receive the windfall should have a backup plan to support themselves in case something happens. I've seen friends who were SAHMs who were completely blindsided when the marriage collapsed and they had to support themselves after a big gap in work history. My mindset has been shaped by witnessing this.

Agreed. Many marriages do end in divorce and at age 29 the OP doesn't have an insignificant chance of it happening to him. Even in community property states like CA inheritances are separate property unless commingled so I second the observation of figuring this out and understanding any risks or implications on the OP's long term plans. Hope for the best plan for the worst kind of thing...

[Milton]

Quote:

Originally Posted by Walt34 I suspect you're perceiving the loss of the pension and the security that comes with it as a loss. But you already have assets that make the pension a pittance. Still, it's a loss, and that is hard to take. And perhaps there's a bit of the "sunk costs fallacy" going on with the five years you have invested in it. Walking away from the job means you'll feel as though you wasted those five years and that's a loss too.

Makes sense to me.

Another reference that may be passing relevant: Harry Browne, How I Found Freedom in an Unfree World (1973), esp. Chapter 12 ("The Previous Investment Trap").

Quote:

Originally Posted by Walt34 Really guy, if you're hating life because of the job you have an opportunity many wish for but few ever get. Quit, put the money in a life cycle fund as suggested, and go do whatever it is that makes you and your family happy.

+1.

[Sanbenito1]

I was once a cop, so I feel your pain about the babysitting, lack of appreciation, etc. I should have joined the Fire Department

If you can't find a job that you like within your organization to preserve your pension (never know if that might come in handy) then I would quit. No point in risking your spirit, health and relationship. With 50+ years to manage your millions, you may want to take some finance and tax courses. If I had had the time to do so myself when I was younger, I would be a lot wealthier now. Even if you have a financial planner, it's nice to fully understand what they're telling you.

[bizlady]

You have a wife with a disability and a child on the way. THEY need you. As an officer, you are at higher risk every day. You hate your job. You have enough to take care of your family. LEAVE. Take some time off, then find another job or volunteer opportunity.

[jclarksnakes]

I think people have posted some very good advice here. I would just add that even though you run into lots of bad attitudes in your job most of us very much support and appreciate law enforcement officers and the work they do.

[AnAtomInTheUniverse]

I just want to thank everyone again for the wisdom. This ended up being a great discussion.

Walt34 was spot on in his observations about loss, however, I'll always see my 6 years as a personal success. One day, I got a wild idea to become a patrol cop, and I accomplished it. I think I'll always find satisfaction in that. Just because the job didn't meet me half-way doesn't say anything negative about me.

My wife and I have been over this thread several times together, as well as spent a lot of time talking over the last few weeks. She also seems to think this is the right decision. We've set a preliminary time frame of 6-12 months. I'm set to receive a promotion and transfer within the next 4 months so I'm going to wait to see how that goes before I make the move. Of course, if she is struggling with the pregnancy and then the baby, I'll go earlier.

rodi is also correct. The money is titled to my wife and is legally hers. If our marriage were to dissolve, I'd find myself back in the job market very quickly. This is a risk I am willing to take if I can provide a better, more comfortable life for her by being around more.

In the meantime, I'm planning on investing my savings, possibly in a Vanguard fund(but that's for another thread). I've already begun trying to educate myself on investing. Our advisor has done his best over the years, but a lot of it goes over my head.

Thanks to everyone who recommended books. I'll definitely look into them.

And jclarksnakes, thanks for the kind words. It really seems like most days, everyone hates us.

[CaliforniaMan]

Quote:

Originally Posted by AnAtomInTheUniverse ... In the meantime, I'm planning on investing my savings, possibly in a Vanguard fund(but that's for another thread). I've already begun trying to educate myself on investing. Our advisor has done his best over the years, but a lot of it goes over my head. Thanks to everyone who recommended books. I'll definitely look into them. And jclarksnakes, thanks for the kind words. It really seems like most days, everyone hates us.

The bolded part would concern me. How do you know he has done his best for you? You just said that a lot of it goes over your head. Many (most?) advisers look out for themselves first. Nothing in your investments should be over your head!!!!! Investing is not difficult. If he makes it sound difficult to you, I would watch out, he may be trying to make you think he is providing more value than he is. There is much information about this here on ER-org. First and formost, you have 6M, your job now is to manage this, educate YOURSELF and don't rely on an adviser only.

[Milton]

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Originally Posted by CaliforniaMan How do you know he has done his best for you? You just said that a lot of it goes over your head. Many (most?) advisers look out for themselves first. Nothing in your investments should be over your head!

Recommended cautionary tale: Richard Bach, The Bridge Across Forever (1984). Excerpts follow; read the whole book!

Quote:

Originally Posted by Chapter 9 I was drowning in money…. He was a friend from my magazine-writing days, editor turned investment counsellor. I had … admired his calm sense of business from the first day we had met. I trusted him completely, and nothing he had said that afternoon had flickered that trust. "Stan, I can't tell you how glad …" I said. "It's got to be done right, but I don't know what to do with money; and paperwork and tax-things, I don't know about it, I don't like it. Effective now, Financial Manager, it's your business, full-time, and I'm out of it". "You don't even want to know about it, Richard?" I looked again at the graphs of his investing performance. All the lines went straight up. "Nope", I said. "Well, I want to know if I ask, or if there's any huge decision you're about to make. But so much of what you're doing is so far over my head …" I'll never be able to handle money the way Stan did. Not patient enough, wise enough, and I don't have charts that shoot moon wards. Yet wise enough am I to know my own weakness, to find a trusted old friend, and give him control of my money.

Quote:

Originally Posted by Chapter 13 ”It’s not the end of the world”, Stan said quietly, even before I had settled in the chair on the other side of his desk. “It’s what we call a bit of a reverse. The West Coast Commodity Exchange collapsed yesterday. They filed for bankruptcy. You’ve lost a little money”. My financial manager was always understanted, which is why my jaw tightened at his words. “How little have we lost, Stan?” ”About six hundred thousand dollars”, he said, “five hundred ninety-some thousand”. ”Gone?” “Oh, someday you might get a few cents on the dollar from the bankruptcy court”, he said. “I’d consider it gone”. I swallowed. “Glad we’re diversified. How go things at the Chicago Board of Trade?” “You’ve had some setbacks there too. Temporary, I’m sure. You’re having the longest string of losses I’ve ever charted. It can’t go on like this forever, but for the time being it’s not the best. You’re down about eight hundred thousand dollars.” He was talking about more money than I had! How could I lose more than I had? On paper, he must mean. It’s a paper loss. People cannot lose more money than they have. If I could learn anything about money, maybe it would be well to pay closer attention to this business. But I would have to study for months, and money-handling is not like flying, it is suffocating dull stuff; even the pictures aren’t easy to follow.

[brewer12345]

In the words of possibly the dumbest newscaster ever, "Ho Lee Fuk!" Why are you still working? I bet your advisor is raping charging you something in the ballpark of 1% of assets annually, plus putting you in expensive investments that are costing you another 1% over what you could be paying. By learning and DIYing you could be saving yourself 2% a year ($120K). If nthing else, there is no earthly way you are earning that as a cop.