Age 32--should I spend my FU money?

[Music Lover]

Quote:

Originally Posted by Legally_dead It's complicated, but our dad retired and we technically started up a new business using his business model and relationships. The $120k represents my distributions from the family business. My job pays me about $200k/year in salary and benefits. That is what I would be walking away from.

It's $120k in distributions today...but what will they be after a couple years of your siblings running the business, especially since you stated that they have very little experience and that your brother smokes pot daily? How many customers/clients that did business with your father did business because of him, and now that he is no longer there, they don't have the same sense of loyalty and will take their business elsewhere? How many other clients will be lost as time goes on due to the inexperience of your siblings? One poor decision made by an inexperienced owner can have devastating effect and destroy a business.

[Legally_dead]

@ivinsfan: Yes, I applied on Monday, scheduled interview on Tuesday, and was offered the job on the spot on Wednesday. It all happened very fast. $200k in my original post was high. Tough to put a dollar on the benefits, but the salary/profit sharing/401k match at my current job total about $175k. The new job has a base of $60,800. I don't really know how to value the pension.

@Everclrx: I would love for them to buy me out. But I am not sure how they would do it. They could not qualify for a loan and would have to pay me with their distributions. My commute would be very similar to yours. It is currently three hours round trip. The new job is five minutes from my house. I would love to come home and eat with my family for lunch or be more active with a full evening at home.

@Aaronc: My house is currently worth about $220k. A comparable house within thirty minutes of my work would cost $750k. And the schools are not great, so I would also have to pay for private school.

Music Lover: I agree it is incredibly risky. At this point, I am going to take the new job. But I am doing it realizing that the business income may dry up. That would delay ER, but still be manageable for me.





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[EvrClrx311]

Quote:

Originally Posted by Legally_dead My commute would be very similar to yours. It is currently three hours round trip. The new job is five minutes from my house. I would love to come home and eat with my family for lunch or be more active with a full evening at home.

I can attest from my own experience that this is worth so much more than any spreadsheet or calculation can quantify. You'll never get those years back... or your youth, to enjoy that extra 2.5 hours a day. Time is the one thing we all lose indiscriminately. So much of happiness in life is learning to use it as wisely as possible, so we hold no regrets about the choices we made in our past; how we chose to utilize those seconds, minutes, hours each day.

Best of luck to you!

[Legally_dead]

Quote:

Originally Posted by EvrClrx311 I can attest from my own experience that this is worth so much more than any spreadsheet or calculation can quantify. You'll never get those years back... or your youth, to enjoy that extra 2.5 hours a day. Time is the one thing we all lose indiscriminately. So much of happiness in life is learning to use it as wisely as possible, so we hold no regrets about the choices we made in our past; how we chose to utilize those seconds, minutes, hours each day. Best of luck to you!

Update: I am about two and a half months into the new government gig and have not had a single moment of regret. Quitting my high paying job had the potential to be one of the best decisions or one of the worst of my life, and it has turned out to be a great decision so far. The work is more meaningful than what I was doing for a mega corp. Getting home at 5:15 versus 6:30-6:45 everyday has made a huge difference on my quality time spent with my DW and kiddos.

One unexpected result of taking the new gig is that I have not been as hard core about ER as I was before. I used to read this forum multiple times a day. Now I read it once a week, if that. My desire to retire in my 30s seems to have been a product of the really bad work environment and commute that I had. Now I am shooting for 40 when my government pension will be fully vested.

The family business is still rocking along and paying me about $10,000/month (before taxes). I am urging my siblings to hire someone to run and grow it for the three of us. Net worth (including house) has grown to 1.05M.

Thank you all that responded to my original post and helped me think through this decision.

[ugeauxgirl]

Congrats- I'm glad you're enjoying your life more. You're really not far from FIRE at all considering your spending level- Best of luck and keep us posted.

[Katiek]

Congrats, glad the new job has made such a positive difference.

[enginerd]

Congrats. I am somewhat envious of you being able to walk away from your high paying job for something closer. I have dreadfully long commutes (usually 2.5 to 3 hours a day in total commute), but one year I was assigned to a project with a 15 minute commute. I felt like I was on vacation for that entire year....and I just looked it up...I worked 450 hours of overtime that year.

I often wonder if I too wouldn't be so hell bent on RE if I had a job with no commute and less stress. But right now I see the light at the end of the tunnel (albeit a long tunnel) so I forge ahead.

[aida2003]

Quote:

Originally Posted by Legally_dead The family business is still rocking along and paying me about $10,000/month (before taxes).

The way I see it, you increased your salary unless I've missed something. Now you earn $61k at your gov't job plus you get $120k from your/siblings firm vs. $170k (per your updated post) when you worked for/with your siblings. Plus you'll potentially earn a pension and you've got much better work hours. Congrats!

[Brat]

Quote:

Originally Posted by Markola No, but I'd get a plan together to make myself happier, such as 1) Have my siblings buy me out of the business and end that headache. Partnerships rarely work out, and family dynamics make them even harder. 2) Put my legal and business smarts on the job market to find something closer to home with normal hours, like college administration, non-profit or government post. If you are living on less than $50k/year, you can surely support yourself with a lower paying but more balanced job until your assets catch up and generate what you need, possibly only $1,250,000 or so plus some part time work. Good luck!

My thoughts as well.

Someone mentioned a Govt legal job. If this is correct you need to adjust your manager's expectations. It isn't as if you are on partner track in a law firm.

[Teacher Terry]

Aida: you missed something. His old job paid about 175k with benefits vs 60 now. He was still getting the 110k from the business his sibs run.

[Huston55]

Quote:

Originally Posted by Legally_dead Update: I am about two and a half months into the new government gig and have not had a single moment of regret. Quitting my high paying job had the potential to be one of the best decisions or one of the worst of my life, and it has turned out to be a great decision so far. The work is more meaningful than what I was doing for a mega corp. Getting home at 5:15 versus 6:30-6:45 everyday has made a huge difference on my quality time spent with my DW and kiddos. One unexpected result of taking the new gig is that I have not been as hard core about ER as I was before. I used to read this forum multiple times a day. Now I read it once a week, if that. My desire to retire in my 30s seems to have been a product of the really bad work environment and commute that I had. Now I am shooting for 40 when my government pension will be fully vested. The family business is still rocking along and paying me about $10,000/month (before taxes). I am urging my siblings to hire someone to run and grow it for the three of us. Net worth (including house) has grown to 1.05M. Thank you all that responded to my original post and helped me think through this decision.

Congrats on the new job & increased "happy life" quotient! Perhaps you should change your avatar name to match it.

I did always wonder though, what kind of govt job enables you to vest for a pension in only 8 yrs of work?

[Teacher Terry]

Some states only require 5 years to be vested.

[Legally_dead]

Update: I had my one year anniversary at the Govt. gig on July 1. Still no regrets, and I do not know how I ever made such a long commute. It would have been impossible with a second child (who was born the same week I started the new gig last year).

The family business is afloat but on a downward trajectory. My sibs are poster-children for why second generation businesses fail. The single account notified us we we would be losing about 40% of the business. My sibs pulled a bit of a bait and switch. Their salaries were originally based on the plan they would diversify and grow the business. They both got a taste of good $ and being self employed and did nothing to grow the business. At one point my pot smoking bro said he didn't want to work more than 40 hrs a week and the account was secure. The 40% loss was a wake up call and to some extent the best thing that could have happen to get them motivated (cause they weren't listening to me). But it didn't last. After a few months of hard work, they are back to the "we don't want to work that hard, let's just ride this out" mentality.

In any event, I'm in good shape with my government pay and current investments. Net worth is at ~1,250,000 including paid for house.

[kimcdougc]

Thanks for the update. Look forward to seeing where you go from here. Sounds like you are on the right path all on your own without the family business.

[Legally_dead]

Here's an update:

The family business is in a death spiral. They lost nearly 100% of the account. I am no longer receiving distributions and my siblings guaranteed payments have been cut back to next to nothing as they try to find new accounts. They both claim they couldn't have done anything different and the failure to diversify is not their fault. Needless to say, I'm not optimistic the biz will survive. Frankly, it will be a blessing if it doesn't and will remove a bunch of conflict from my life.

My net worth has reached 1.3M (which includes a 225k paid for house and 122k 529 plan for my 1 and 3 year olds). Without the company distributions, we will have to reign in our travel budget and cut back on 529 contributions, but otherwise it will not affect our lifestyle. Plan is to cut back from two big trips a year to one big trip and now contributing $200/month to 529 instead of $1000/month.

It would have been nice if the business lasted, but I knew I would be lucky if it lasted more than 12 months. It almost lasted 24. The key to happiness is low expectations!

[Katiek]

Thanks for the update and glad your job is still rewarding and working with your personal life. Sorry the business isn't doing well, but based on what you posted earlier, not surprised. Glad that you weren't counting on that for your financial well being.

[Texas Proud]

Read (most) of this thread for the first time tonight...

It was easy to predict that 100% revenue from one customer was not a good idea.... and having the people run it wanting to coast is another sign that things will not work out... it is not surprising that someone else came along and stole the customer.... (you did not say that happened, so I could be wrong)....

I would have put some time into that firm... a NPV of that cash flow was over $1.5 mill.... so you let over 50% of your net worth go up in smoke...

[Legally_dead]

Quote:

Originally Posted by Texas Proud Read (most) of this thread for the first time tonight... It was easy to predict that 100% revenue from one customer was not a good idea.... and having the people run it wanting to coast is another sign that things will not work out... it is not surprising that someone else came along and stole the customer.... (you did not say that happened, so I could be wrong).... I would have put some time into that firm... a NPV of that cash flow was over $1.5 mill.... so you let over 50% of your net worth go up in smoke...

As I see it, there are only two things I could have done differently. The first is be more persuasive with my sibs on getting them to take action (such as hire a manager, etc). But with only a 1/3 vote my hands were tied. They were not receptive to any idea I had and took personal offense. For example, I proposed two years ago we pay someone to create a website. We had plenty of cash to do it. They disagreed. My wake and bake brother finally got around to it after he lost 40% of the account. Three months later he still wasn't done with it. We spent four hours fighting over why my sense of urgency on the website wasn't a personal attack on him.

The second option would have been to go to work at the firm full time. My sibs would have hated it (it would have meant a pay cut for them) but moral pressure from my dad would have overcome their objections. I still would have dealt with their two votes against one on my ideas. This was never a viable option because I couldn't hitch my wagon to my brother (who has failed at every thing he's ever been involved in).

I have no regrets. The biz income lasted long enough to nudge me out of the high paying corporate gig.

[CaptTom]

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Originally Posted by Legally_dead I have no regrets. The biz income lasted long enough to nudge me out of the high paying corporate gig.

Thanks for updating us. And re-affirming my belief that one's time on time on this planet is far more precious than money.

If I were a betting man, I'd bet that you'll be back here in a few years, telling us how you found a new gig that did even better than anything you'd thought of before, and are now ready to RE. Or maybe something you enjoy so much you don't WANT to RE.

Living your life the way you want sometimes has a way of bringing success far greater than what living with golden handcuffs can.

[ERD50]

Quote:

Originally Posted by Legally_dead Here's an update: The family business is in a death spiral. They lost nearly 100% of the account. I am no longer receiving distributions and my siblings guaranteed payments have been cut back to next to nothing as they try to find new accounts. ...

Interesting thread that I had to go back and read from the beginning. Something I'm not following - who determines the distributions and your "siblings guaranteed payments" (salaries?)? Was this based on some sort of formula when the business was created?

At any rate, you seem to be doing fine with the work change and have your expectations adjusted correctly. Congrats on that! Your siblings? Well, I predict they will be hitting you up for a 'loan' in the near future!

-ERD50