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Old 02-24-2012, 11:25 AM   #41
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Well if I don't reach my networth goal or if expenses are much higher than anticiipated, Plan B would be to keep w*rking.

If I FIRE'd right before a market downturn and my networth takes a tumble, my Plan B is to keep w*rking part time until my portfolio rights itself.

Plan C is to abandon my high cost of living area entirely and move someplace cheaper.

Plan D is to run off to the circus
Sounds like a reasonable sequence of plans.

That said, I can tell you that once you switch jobs to something less aggravating your perspective will change greatly. So for now, just get through teh transition and revisit the whole plan 6 months after you switch jobs.
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Old 02-24-2012, 11:54 AM   #42
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Didn't read all the comments on here but just chiming in b/c we're in similar life situation (1 and 2 yr olds).

1. I often think about quitting and staying home with the kids but they're off at preschool and they enjoy it so don't want to pull them out. It's not really a full retirement b/c I always have to be back at 5 when preschool ends just like a regular job.

2. I had a stressful/long hour job and I hated it. Now I have 8-5, low stress job. It's nice having adult interaction at work and coming home to see the kids... I think it brings fresh energy. If it's stress/long hour job, dont' think this will be case and besides, I'll probably only see my kids on weekends. You might be thinking about retiring b/c of stressful job but why not take the pay cut and go for low stress job?

3. I think majority of the cost happens in their pre-public education age due to preschool. I pay close to what you're paying as well. Yes, food bill goes up but the activities are not necessary. I saw a TED cast once and it basically said parental efforts have very little impact on kids. As long as parents stay married and kids are raised in supportive/loving environment, that's the main factor. Of course, it's another story to convince my wife.

Good luck in whatever you decide. You're in a very good situation.
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Old 02-24-2012, 12:36 PM   #43
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Have you considered finding a job/profession that you enjoy? Your story reminds me a lot of one of my best buds from HS. He is incredibly bright, one of those 1600 SAT guys, that always had a true love for History and English... always wanted to be a writer. In college he started off in that field and quickly came to the conclusion that he wouldn't make much money...

His solution was to take a major shift in his career strategy to maximize his potential earnings... so he switched to Finance, which he hates... but is also extremely good at. He worked his butt off and got into an MBA program at Texas A&M and with the submission of an extremely good essay, and some luck from connections he acquired in school he landed an internship working for Citi's Asset Management group in Manhattan. With a lot of hard work in 5 years he moved up to a VP position (last month) and is pulling in well over half a million a year.

Over the last 5 years he's been working 60-80 hour weeks and every time I've chatted with him he goes on and on about how much he HATES his job, he has no time to even find a wife, and family is something he can't possibly do while also working. I had a heart to heart talk to him about what he really wants to get out of life... one of those "in 20 years, if you look back at your life will you be happy with it?"

He came to the conclusion that, although he lives in a million dollar pad in downtown Manhattan, drives a six figure sports car, and lives extremely well the 20 or so hours he's not working or sleeping each week... he wants out. Ironically, he is the epitome of what our society says is the perfect life... but to him he envy's the simple things many of his childhood friends now have (great families, time to enjoy life, etc...). He hasn't taken a single vacation in 5 years, if he had he wouldn't be where he is right now. "Selling your sole" is a great way to put it.

He now has a plan similar to yours... he's going to work another 3-5 years, save up a pile of money over the $1,500,000 mark and get out... move to somewhere like Tennessee and start doing what he really loves...

For him, its not about retirement... he wants to work... but he wants to work in something that he enjoys. Early retirement can be a "fun job"... but also there are plenty of things a mid 30's individual can do with their time that is considered work... but they don't think of it that way. Find something you love to do that you can also get paid for...

I've always had this mentality... if the job I'm working today is not something I would want to do after winning a $10,000,000 lottery... then I think its time to find a new job.
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Old 02-24-2012, 12:47 PM   #44
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Have you considered finding a job/profession that you enjoy? Your story reminds me a lot of one of my best buds from HS. He is incredibly bright, one of those 1600 SAT guys, that always had a true love for History and English... always wanted to be a writer. In college he started off in that field and quickly came to the conclusion that he wouldn't make much money...
Lol, I got a 1580 on mine, so sounds like I do have a lot in common with your friend

Thanks everyone for all of the great advice. People are definitely right that my current high stress j*b has poisoned me towards work. I'm looking to move to someplace much less stressful for the next 5 years, and then will see if its something I want to continue in, once I'm FI (I doubt it).

My dream profession would probably be to be an entreprenuer and start my own business, but quite honestly I don't have any training or business experience so it would be a high risk to subject my family to.

People on this thread have also provided a lot of helpful advice about spending, so that's an area I think I could definitely work on to improve my FIRE success. According to FIRECALC, even if I could bring my expenses to $85K while the kids are in the house that would make a huge difference in my success rate.
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Old 02-24-2012, 09:21 PM   #45
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You remind me of the blogger at Brave New Life - Brave New Life

He's in his mid-30s, planning to ER in the next few years, has young kids, about a 1MM portfolio right now, etc.

You may want to read his blog (past articles).

In particular, he describes how downsizing his house, selling his car, and moving to a cheaper area close to work where he can bike is going to let him ER way, way sooner than he would otherwise (because it cuts his expenses a ton):
How I Pulled in My Early Retirement By 20 Years | Brave New Life

(I have no affiliation with this blogger, other than having found his blog a few weeks ago and now have it on my RSS feeds.)
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Old 02-24-2012, 10:59 PM   #46
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interesting website, I definitely can relate to this blogger. I'm kind of jealous of his budget. My wife wouldn't let me even approach that level of expenses. I'll keep working on her.
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Fire @ 36
Old 03-11-2012, 11:29 PM   #47
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Fire @ 36

I just FIRE'd last month (wahoo!) @ 36 w/ no assumption of SS, factored in college costs significantly increasing, and assuming no inheritance (though this could also be significant, I just make my plans without assuming it will happen).

I'd also be very uncomfortable with your SWR...I've planned on < 4%. My expenses are a bit higher than yours, and while are less than my SWR I still plan on figuring out ways to trim down and add supplemental income through hobbies I enjoy.

Your healthcare costs are WAY low if you want decent coverage. COBRA for my family of 3 is currently $1100/month! There are some cheaper options for my family that I have quotes on (shopped across three major insurers which each had 3-5 plans), but the cheapest is around $600/month which is really just catastrophic coverage along with one doctor checkup a year. With kids you will go to the doctor much more than you think...and it will easily add up to several thousand dollars of out of pocket expenses if you only have a catastrophic plan.
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Old 03-15-2012, 04:31 PM   #48
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I think you are counting on too much at the moment which may not come true. A potential inheritance can disappear with a long term illness on the part of the person from whom you intend to inherit.

I'd say it's too early to determine if you can retire early. It's certainly a laudable goal for which to strive. When you have the money in hand, then run numbers. For now, strive for the financial goals you've stated.
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Old 03-15-2012, 04:43 PM   #49
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.3. I think majority of the cost happens in their pre-public education age due to preschool. I pay close to what you're paying as well. Yes, food bill goes up but the activities are not necessary. I saw a TED cast once and it basically said parental efforts have very little impact on kids. As long as parents stay married and kids are raised in supportive/loving environment, that's the main factor. Of course, it's another story to convince my wife.
I don't think you can make such a blanket statement. Our costs skyrocketed after 4th grade. Little booger was musically gifted and travelled the country, plus voice trainers...

If you don't keep kids occupied in activities they enjoy, they'll find other activities, loving home or not. My job often deals with those kids. Sports, art, whatever activities they enjoy, let them stay involved. Encourage them. The activities ARE necessary, in my ( professional) experience.

@ OP

$80000 per child? Put it into a good plan. BS (beloved son) had a college bill of about $180,000. What will that cost be in 16 years? That's your target goal x 2.
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Old 03-17-2012, 06:22 AM   #50
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Lol, I got a 1580 on mine, so sounds like I do have a lot in common with your friend

Thanks everyone for all of the great advice. People are definitely right that my current high stress j*b has poisoned me towards work. I'm looking to move to someplace much less stressful for the next 5 years, and then will see if its something I want to continue in, once I'm FI (I doubt it).

My dream profession would probably be to be an entreprenuer and start my own business, but quite honestly I don't have any training or business experience so it would be a high risk to subject my family to.

People on this thread have also provided a lot of helpful advice about spending, so that's an area I think I could definitely work on to improve my FIRE success. According to FIRECALC, even if I could bring my expenses to $85K while the kids are in the house that would make a huge difference in my success rate.
Good luck Alex!

I know many people who own small businesses (including me, although mine is different than the below list), and their stories are all very similar. IMO you don't need much in the way of training (but good common sense and a good work ethic go a long way), and you can get the experience as you go. Below are what I hear from all of them on starting/running your own business:

1) VERY hard work, especially the first 4-5 years. 7 days a week, 10-12 hours/day average, some days 16 hours.

2) Lots of stressful moments early...like getting funding, landing the early accounts, building the client list...lots of selling and convincing, will they buy? will they give loan? will they...

3) No vacations for first 3-4 years...no one you can trust the business to while you're gone

4)Don't use a partner as ownership. Fine to have a partner, but pay them a wage as an employee and ok to give them stock or incentives such as a % of the profits

5) Need to really learn the business, do lots of research, demographics, trends, use business incubators, talk to retired business owners and ask them their biggest mistake and best decision, etc.


My business is rental real estate LLC, and it's definitely not full-time and doesn't fit the category above..but let me share my experience.
1) First year was unbelievably busy...get LLC setup with lawyer, obtain PO box for business mailing address, design/order business cards, draw up business plan, goals, articles of incorporation must be filed with state, meet with CPAs about proper business structure and tax implications, decide on business name, get 2nd phone line, open business checking account and credit card, buy office supplies and new file cabinet for records, sign up with local landlords association and attend all meetings, do research on housing market, read the state landlord statute so I know legal obligations, draft all forms (lease, application, move-in and move-out form, notice to evict form, notice of intention to vacate form, employment verification form, the list goes on....I have over 40 forms), get access to a tool to check criminal history and credit reports on prospective tenants, put together a list of vendors (plumber, electrician, roofer, termite inspector, good appliance store, concrete company, where to get blinds, ...I interviewed three of each of the above and more), research way to protect lock system (legally must change locks on house each time tenant moves out), buy tools and organize them, get to know all county officials such as code enforcement director for inspections, deed officers, health department inspector, surveyor), meet with banks about funding options....the list goes on and on.

Basically I'd leave my j*b at MegaCorp at 5, drive to all these appointments or to the first rental I bought, work until 10-11 pm, go home, shower, repeat. 12 hour days on the weekends were the norm.

The good news? This went on for 6-7 months while I got it all set up and got my first unit rented....then I worked maybe 2-3 hours/week on the business and got a check each month for $750! That was awesome!

In summary...the startup is he**, but the long-term picture looks bright and is exciting. If I can get about 4 rentals going (have two done and rented), we can FIRE immediately.
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Old 03-17-2012, 06:35 AM   #51
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I thought it might also be helpful to describe the types of businesses many of my friends own. I would consider most of them "micro" businesses, as you'll see below. How is it that I know most of these "friends"? We have a common car interest, and met via our cars. We all enjoy high-performance musclecars. Why do I mention this? Because it shows that all these business people are successful...they make enough money to buy multiple cars that cost over $60k each and operate/maintain them. I've either been to, or seen, all their homes, and they are not "car rich, house poor" people. Whether they save a lot for retirement and plan to ER I don't know...but certainly they could.

1) Guy 1 owns a business renovating movie theaters. They replace curtains on the walls, the seating, carpets, aisle lighting, etc. They do this all over the country. He has about 5-6 employees. They own 2 large vans to carry the team along with tools. For local jobs, they come home each night. Other times they book 4-5 jobs on the other side of the country, drive out there, live on the road for 3-4 weeks, and return home to a 2-week "vacation".

2) Guy 2 owns a business repairing car interiors for used car dealers. They get a used car in trade, and there is a tear in the seat or dash, or cigarette burn, or etc. He drives a van with a small specialty toolkit, and goes to the dealers to fix these issues...maybe he'll go to dealer A on Mondays, dealer B on Tuesdays, etc. His capital investment was very small...a van and maybe $2,000 worth of specialty tools. He did have to attend a 2-week course to learn how to fix and color-match vinyl, grains on leather and so on.

3) Guy 3 owns a small construction company in the Chicago area. For many years they did extremely well. The past 3 years have been very difficult for them...although luckily all their employees are sub-contractors...so their fixed costs are very low. When times are good they may have 8-10 crews working on various residential houses

4) Guy 4 retired in his mid '40s from the navy, and now advises the DOD on naval ship maintenance. He started his own company for this, so he's the only employee. He makes a modest amount of money but only works half-time.

5) Guy 5 sells car detailing items, such as waxes, polishes, cleaning supplies, etc. His biggest capital outlay is inventory....he needs to have things in stock so he can ship fast. He makes a decent living.

6) Guy 7 is an engineer and designs underground drilling head blade inserts. You know, like when they tunnel under the streets of NYC to build subways, they have these 20' diameter drills that cut through the rock and dirt? He designs the small cutting inserts on those..most of them are diamond. He works out of his home, has an office with an expensive CAD station, and has one employee. Again, he's very successful.

7) Guy 8 owns a company that supplies cardboard boxes that are made of recycled materials to local produce vendors. He's relatively new to this, and is struggling a bit due to the economy.

Just thought I'd give you some ideas...all businesses aren't restaurants, car washes, and tax-preparation services.
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Old 03-19-2012, 03:10 PM   #52
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I just FIRE'd last month (wahoo!) @ 36 w/ no assumption of SS, factored in college costs significantly increasing, and assuming no inheritance (though this could also be significant, I just make my plans without assuming it will happen).
Congrats on being able to retire at 36, wow! would love to hear any tips you have for how to get there!

I see the benefits to not taking into account SS and assuming huge increases in college rates, but I honestly think these are unlikely scenarios and I would be better served by taking into account estimated values of these and then building in leeway (by saving enough for a higher FIRECALC rate of success).

For SS, no politician would vote to eliminate SS, so I don't see why you shouldn't assume it into your model, factoring in a benefits cut or an increase in the SS benefits age. As for college, college simply cannot continue to increase at 6% a year or it will become entirely out of reach of the middle class, something colleges which compete with other schools for students would balk at. Even now, I think you're seeing a lot of private colleges' tuition rates not increase or increase at a lower rate than formerly.

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Your healthcare costs are WAY low if you want decent coverage. COBRA for my family of 3 is currently $1100/month! There are some cheaper options for my family that I have quotes on (shopped across three major insurers which each had 3-5 plans), but the cheapest is around $600/month which is really just catastrophic coverage along with one doctor checkup a year. With kids you will go to the doctor much more than you think...and it will easily add up to several thousand dollars of out of pocket expenses if you only have a catastrophic plan.
Hmm.. yikes, $1100 a month seems really high. I currently am planning for $9000 a year, but will reevaluate once we see how Obamacare shakes out. Do others out there pay this much?

I didn't go to the doctor too much growing up (maybe cause my mom fed me raw cow milk to strengthen my bones ) but my kids currently go to the doctor a LOT (daycare means they are sick like every other week) so Im hoping they'll get it out of their system.

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I think you are counting on too much at the moment which may not come true. A potential inheritance can disappear with a long term illness on the part of the person from whom you intend to inherit.

I'd say it's too early to determine if you can retire early. It's certainly a laudable goal for which to strive. When you have the money in hand, then run numbers. For now, strive for the financial goals you've stated.
True, I'll have to run the numbers then and see if it works out. Psychologically though, having that "five year plan" works wonders for me, simply b/c I'm so burned out its nice to be able to see a light at the end of the tunnel (even if it later turns out to be a train).

I try to be very conservative with inheritance (by discounting 50% what I estimate the current amount would be). I just don't want to ignore some likely source of income (and thus have to continue to w*rk and miss even more freedom/time with my chilren when I could take it into account in some sort of highly risk discounted way.
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Old 03-19-2012, 03:17 PM   #53
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@FinanceDave- Thanks! It sounds like a ton of work, which I would love in many ways, (running my own business, creating and managing my own ideas) but seems like it would delay rather than expedite my being FIRE, as I would have to put in 60 hour weeks for 4-5 years.

I've had a couple of ideas for businesses I could start, but it seems like the amount of money to be made would not be nearly what I could pull in from continuing with having a salary.
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