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Dreaming...
Old 02-27-2008, 06:40 AM   #1
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Dreaming...

I am 24 and currently work in Investment Banking. I work, on average, 70-80 hours a week. Life is brutal. The only thing that keeps me going is my dream of being FIRE'ed.

I am currently single, but I hope to raise get married and raise a family, around 4-5 kids (if I ever get out of work that is...).

Current financial situation:
Assets:$175k (divided in stocks, CD's and money markets)
Liabilities: $15k (low yield student loans)
Income: $125k/yr

I am trying to create a concrete goal of when I can retire. Both timewise and number wise. What year should I aim for? How much money do you think I will need to retire and be able to support a family of 6/7.

My spending habits are very good and I would say I saved about 60% of my salary last year. I do want to send my kids to a private school though which will end up being fairly expensive I imagine.

I am thinking a realistic goal is $1.2 million by age 30, but is that too ambitous?
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Old 02-27-2008, 07:42 AM   #2
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I am 24 and currently work in Investment Banking. I work, on average, 70-80 hours a week. Life is brutal. The only thing that keeps me going is my dream of being FIRE'ed.
Financially you're doing fine. But gee, do you really want to spend that much of your life doing something that is brutal? At 24, you have so many other options! You should be having some fun too.

Cut yourself some slack and buy yourself a motorcycle, surfboard, airplane, or whatever strikes your fancy. Read What Color is Your Parachute?

While I can't speak for the female perspective, I doubt that many of them want to be married to someone working 80 hour weeks and who only shows up at home to sleep. And unless she works where you do, how do you expect to meet this woman who is going to have all those kids if you're spending all your time at work?
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Defintely a concern...
Old 02-27-2008, 07:50 AM   #3
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Defintely a concern...

But don't you think trading 10 years of my life for 80 years of glory days is worth it?

If I could really retire at 30-35, I won't be too old to still pick up surfing (I hope).

Thanks for the book recommendation. I will definitely pick it up!
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Old 02-27-2008, 08:08 AM   #4
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But don't you think trading 10 years of my life for 80 years of glory days is worth it?

If I could really retire at 30-35, I won't be too old to still pick up surfing (I hope).

Thanks for the book recommendation. I will definitely pick it up!

To answer your question... yes... if it were only true...

First... you will not make 10 years UNLESS you are very driven (major type A... workaholic etc..) ... and coming to this board tells me you are not...

Second, your expenses will be a LOT higher than you think.. I know of a guy who is sending two kids to private school.... and as he said, it is like sending them to college THEIR WHOLE EDUCATIONAL LIFE.... he is spending IIRC $24K per kid per year... that takes a LOT of savings..

Third.... when are you going to meet your wife? Unless you meet somebody at work, you are probably going home right after work and crashing... and spending the weekends you do not work catching up with friends and family... throw in a girlfriend and you are in serious trouble...

Meeting someone who does not want to spend your hard earned money when you make so much is also hard to do... they will expect you to work MOST of your life...


Here is how I look at what you are doing.... you have TWO jobs that pay $65K each.... is it worth working two jobs to retire early?

Now, your upside is great.... if you can stay and show you are the rainmaker.... you will be pulling in millions in a few years... then... you can retire well...
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Old 02-27-2008, 09:12 AM   #5
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But don't you think trading 10 years of my life for 80 years of glory days is worth it?
Assuming you survive the ordeal, whether it's worth it is of course your call. I've seen 30-year-olds have heart attacks and such from stress. Ten years of slave labor, even if it pays well, sounds pretty brutal to me. Who and what will you be after that? If you're disabled from a stroke from the stress, or simply draw a short straw in life and get sick, will you still want to have spent what could be some of the best years of your life entirely at work?

Your mileage may vary, but my experience is that after a while the money doesn't matter - I worked a lot of overtime - and I just wanted to go home and goof off or do something fun for a while.

At age 25 I had a great job that I enjoyed and was useful (law enforcement) my own apartment with a 650cc motorcycle parked in the living room, an airplane, and three days off a week to enjoy them. Financially not the wisest moves, but I wouldn't change a thing about that time period. Planning ahead like you're doing is great - too many people your age don't - but don't forget to live a little along the way.

What Color is Your Parachute? is about taking a good look at yourself and deciding what is important to you for a career and your life. The premise of the book is that too many people spend their lives suffering horribly at jobs they hate simply because they don't know any better. There are alternatives. Please take a look at them before you commit to where you're going.
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Old 02-27-2008, 02:20 PM   #6
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Wow, you are doing quite well so early in your career. Be careful of getting caught in the trappings of a successful career awith your entire identity tied to that success. This can easily happen when your life is centered around work. It makes it hard to walk away. And.....Megacorp will expect more and more from you each year making it difficult to downshift while working. Sounds like you LBYM and have an excellent start. Like others suggest - find some work/life balance before you get too sucked in.
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Old 02-28-2008, 07:32 AM   #7
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Long and Brutal does not mean you are miserable right?

I mean if you have opportunity to massively accumulate than this is the perfect time to do so IMHO. You are not married and are hurting no one to work long and hard as long as you feel ok about it.

If you are good with continuing to pound down the $$ to reach your goal I say go for it! But I would be very careful of being "full disclosure" on your plans before marraige and let the person choose whether (BEFOREHAND) they can be part of your plan.


As far as kids I would definitely commit to NONE until you can stop working at the current pace. The potential spouse get to choose whether they can handle it but kids will not get that luzury and therefore should not get thrown into that situation.

Get it while the getting is good!
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Old 02-28-2008, 02:47 PM   #8
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Welcome to the board, BWAB.
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Originally Posted by Bankerwithabrain View Post
But don't you think trading 10 years of my life for 80 years of glory days is worth it?
No. You've crossed the line from "frugality" to "deprivation". It's especially not worth it if you have a heart attack or another stress-related incident in the eighth year.

You're supposed to be working because you enjoy it, or because you're notching a short-term goal like "two years of pre-MBA experience". You're not supposed to risk a daily aneurysm for the putative benefits of ER. That's how the medieval Catholic church kept the peasants focused on going to heaven.

When you burn out at work from overwork & stress, you'll be even less effective and less likely to be able to finish out five years... let alone ten.

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Originally Posted by Bankerwithabrain View Post
If I could really retire at 30-35, I won't be too old to still pick up surfing (I hope).
Thanks for the book recommendation. I will definitely pick it up!
If you can float (face up or face down) then you can learn to surf. People in their 60s are learning how to surf in Waikiki every week. But if you learned to surf NOW then you'd have a much more balanced perspective on work & life.

You might want to read "Work Less, Live More" as well.
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Old 02-28-2008, 06:14 PM   #9
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Mixed feelings here...if you work 60-80 hours a week because you love what you do, its more like a hobby, but if it is brutal and you hate it, then you need to sit down and have a second thought. I don't think you aren't a type A because you are on this board...in fact you probably are. I'm pretty much type A, and being type A is what gets you what you want when you want it. Only thing is, type As may get bored with RE.

I got married at just under 23, had first kid at 25, and would do it all again the same way given the same circumstances. But, in today's world marraige/kids often come a little later. I'd keep my eye out for Ms Right, but I would also probably keep pounding away at the FI goals for a while. Then I would slow down when it came to marraige and kids. This is where I fault myself...didn't slow down enough. The 60-70 hour workweeks and long commutes took things from me that I will always miss. I am slowing down a little now, and re-prioritizing some things as I want to have no regrets when my DD goes off to college in 18 months.

BTW, you had better do some calculating. I would hesitate to give any impression to a 24 y.o. that a $1.2M nest egg for FIRE would be enough...I'm 46 targeting 48 and the way I see it the nest egg needs to be closer to 4M (given our lifestyle). You may not need that much and YMMV, but do check out FIREcalc if you haven't.

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Old 02-28-2008, 06:41 PM   #10
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BWB, you are on the right track and doing well. What you don't yet have a feel for is how difficult it is at your age to predict the future demands of your life.

If your job is really toxic, I suggest that you find something more tolerable in an orderly manner. The key to FIRE for many of us is in the steady, disciplined savings that -- even when done perfectly -- is measured in decades. So a tolerable job is key.

Take a guess at what your desired eventual lifestyle would cost you in today's dollars, after taxes, per year. Then, multiply it by 25. That will give you some idea what your long term savings goal should be. If you think you can do it on $100K per year, for example, you will need $2.5mm in today's dollars.

So, sit back, get a long term plan, think about how much of your soul you are willing to donate to your job. Then take it from there. Good luck - I'll enjoy seeing how your thinking evolves on this.
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Old 02-28-2008, 08:27 PM   #11
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Yeah, I really think that there has to be a defining between is the job "brutal" or "toxic" ...

I am sure many NFL players would describe their training and playing as "brutal" yet have worked all their lives in HS and colleg to get to the point where they could participate in the "brutal" arena and make it big for a few years and hopefully be set for life. I think if they came on this board and explained their situation we would be saying "dude" you trained and worked all those years to get the chance and NOW your gonna quit cause its brutal?

It may not be as limiting as the NFL but I would get while the getting is good. It is really a tough thing to say whether what your going through is a bad thing or not.... I can honestly look back on some times in my life when I thought it was the toughest circumstances and say that I learned and became who I am because of those times. Without them I am not the same person.
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Old 02-28-2008, 08:58 PM   #12
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Quote:
Originally Posted by Bankerwithabrain View Post
I am 24 and currently work in Investment Banking. I work, on average, 70-80 hours a week. Life is brutal. The only thing that keeps me going is my dream of being FIRE'ed.

I am currently single, but I hope to raise get married and raise a family, around 4-5 kids (if I ever get out of work that is...).

Current financial situation:
Assets:$175k (divided in stocks, CD's and money markets)
Liabilities: $15k (low yield student loans)
Income: $125k/yr

I am trying to create a concrete goal of when I can retire. Both timewise and number wise. What year should I aim for? How much money do you think I will need to retire and be able to support a family of 6/7.

My spending habits are very good and I would say I saved about 60% of my salary last year. I do want to send my kids to a private school though which will end up being fairly expensive I imagine.

I am thinking a realistic goal is $1.2 million by age 30, but is that too ambitous?
Brain,

You'll get to your target sooner than you think. But the sad truth is that your 'number' will inflate over time as well.
Most IBnkrs that I know do not love their job (except for a few masochists), but almost all of them love the money that comes with it...let just say that it goes with the territory.
On the other hand, you have a job that most people only dream about and your future earnings will increase as long as you can hang in there (credit crunch, anyone?). Don't blow the largess on the tech toys, fast car and faster women & you'll reach your goals in no time.
Personally speaking, 4 to 5mm would be closer to what I would consider the 'number' (we have 3 kids & are about 10 years away from target).

Good luck!

Salaryman
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Old 02-28-2008, 09:35 PM   #13
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While I can't speak for the female perspective, I doubt that many of them want to be married to someone working 80 hour weeks and who only shows up at home to sleep. And unless she works where you do, how do you expect to meet this woman who is going to have all those kids if you're spending all your time at work?
As a female, I have to agree with this--if you're looking to get married before you RE, you'll have a tough time a) finding time to date and b) finding someone who's okay with you working so much. I'll echo what others have said: you may be fine financially, but make sure to have a life outside of work, too. Otherwise I could see you crashing and burning after ER because you're so used to having your job as your sole identity.
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Old 02-29-2008, 01:17 AM   #14
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I don't think you aren't a type A because you are on this board...in fact you probably are. I'm pretty much type A, and being type A is what gets you what you want when you want it.

R
You must not have met some of the type As that I know..... they don't 'get what they want when they want it'.... yes, they can not sit still, but can not concentrate on one project long enough to complete it.... and go from one to another to another....

Some of the others I have met are always trying to 'get rich quick'.... but don't save anything... and don't think about their next scheme.... so, yes, a number of As do get what they want, but not all....

And this board IMO will show that a lot of type Bs get what they want when they want it also....
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Old 02-29-2008, 03:51 AM   #15
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I am really appreciating all of this advice. It is a tough decision for sure, and I am still not sure if I should stick it out.

But I do dream of ER. Forget the fancy cars, and watches. All I want is to buy more time.
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Old 02-29-2008, 05:53 AM   #16
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The marriage with 4 or 5 kids is going to put a dent in your financial plans.
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Old 02-29-2008, 12:10 PM   #17
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The marriage with 4 or 5 kids is going to put a dent in your financial plans.
Ooooooooh yeah, to be sure. I'd scale back on that number if I were you.

I second (or third, or whatever) the view that you need to find work that you really like, because (like me) you will eventually burn out, and you could flame out before you reach your ER goal.

Go out and learn to surf NOW and don't wait until you are 40 like I did. I've got a buddy who quit the rat race working for Megacorp in CA and went on an extened surfing expedition. He finally landed in Costa Rica about 7 years ago, bought some land, built a great house, and now he owns his own real estate company, makes good money and is married to a fine Costa Rica lady and just had his first kid. The key to all this is he started YOUNG and figured out what he wanted to do.

Good luck. Sounds like fun.
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Old 02-29-2008, 12:37 PM   #18
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But don't you think trading 10 years of my life for 80 years of glory days is worth it?

If I could really retire at 30-35, I won't be too old to still pick up surfing (I hope).
Congrats on your excellent start in life!

I do have to say though that given your specs, retiring at 30-35 seems extremely optimistic. Check out my thread, I have oodles of data to stream through which can give you an idea of just how much you are going to need. Obviously each situation is different but its worth a read to give you a feel for where you might be standing.

http://www.early-retirement.org/foru...rum-30406.html
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Old 03-01-2008, 02:24 PM   #19
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Originally Posted by Bankerwithabrain View Post
I am 24 and currently work in Investment Banking. I work, on average, 70-80 hours a week. Life is brutal. The only thing that keeps me going is my dream of being FIRE'ed.

I am currently single, but I hope to raise get married and raise a family, around 4-5 kids (if I ever get out of work that is...).

Current financial situation:
Assets:$175k (divided in stocks, CD's and money markets)
Liabilities: $15k (low yield student loans)
Income: $125k/yr

I am trying to create a concrete goal of when I can retire. Both timewise and number wise. What year should I aim for? How much money do you think I will need to retire and be able to support a family of 6/7.

My spending habits are very good and I would say I saved about 60% of my salary last year. I do want to send my kids to a private school though which will end up being fairly expensive I imagine.

I am thinking a realistic goal is $1.2 million by age 30, but is that too ambitous?
Relax and take it easy. See where life takes you. Do your job well so you can jump over to business school or another job that you like. I have a lot of friends in your position and the work is hard but you should also have time to party a bit (they certainly do).

You may enjoy finance once you rise up the ranks. The job you have @ 24 is probably not enjoyable, but maybe the one you have @ 28 or @ 30 is tolerable and you will want to stick with it.

If you want to stay in CA or NY then whoever said $4 to $5 million to retire is pretty accurate, and that's with a cheap spouse. The public schools in some of those places are comparable with private schools, so you won't need to pay for private school. But the house will cost you $2-$3 million.

Best bet is to save as much as you can and then when you can't take it any more, find a job you enjoy that still pays some of the bills.
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Old 03-05-2008, 07:31 AM   #20
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Thanks for all of your good advice. This thread has definitely given me good food for thought. I really enjoy hearing from like minded people, I have not met too many people in my non-virtual life that are into the whole ER thang.

I hope to keep you all updated on my future direction and will likely solicit further advice.

Thanks again.
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