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Like a bad penny, I keep coming back
Old 02-27-2013, 06:51 PM   #1
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Like a bad penny, I keep coming back

Hey everybody. I figured it's time for a refresher course in LBYM and prep for FIRE.

When last we left this hero, I was happily ensconced in middle management as was my wife, and we were enjoying our upper-middle class home in a happy suburb with three awesome kids.

But we had fallen off the FIRE wagon a bit. Despite getting our household income up to ~270k, we were only saving about $40k. We were sure enjoying life, though! Hawaiian vacations, lots of techie toys, Disneyland primo season passes, weekends away, etc. etc. We thought in the back of our minds that with my pension at 55, extra payments on the house having it paid off by then and the money we were saving that we had retire at 55 in the bag. But I realized that at age 38 I was simply not doing enough. So with renewed vigor we jump back into the community to listen, learn, and modify our attitudes about money again.

Age 38/37, $270k annual income
NW: $400k
New savings rate (including retirement funds): 75k
3 kids, age 8, 5, and 2
Mortgage P&I is $1805 a month @ 3.5%
Owe small amount on cars at zero/near zero interest and no other debts.

Again, came back to re-indoctrinate myself, as a token first move, we got rid of our cable t.v. and land line, and reduced our internet speed, reducing that expense by $140/month. Yay baby steps! (and yay Netflix instant streaming)
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Old 02-27-2013, 06:58 PM   #2
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Owe small amount on cars at zero/near zero interest ...
What do you drive?

Welcome back!
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Old 02-27-2013, 07:02 PM   #3
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Hey laurence, nice to see you're back on the bandwagon.
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Old 02-27-2013, 07:14 PM   #4
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Welcome back Laurence!
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Old 02-27-2013, 07:41 PM   #5
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laurence!!! Welcome back.
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Old 02-27-2013, 07:48 PM   #6
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Getting rid of cable is great as long as you don't replace it with additional spending to fill the void. I've thought long and hard about getting rid of the cable but like the family time and sports.

Welcome back on the bandwagon and good luck.
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Old 02-27-2013, 08:03 PM   #7
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Thanks everyone!

I'm a little embarrassed to say here: BMW 335i, GMC Acadia (hers, carts the kids).

Yeah, we got to that first tier of financial independence, good credit, low debt, good rainy day fund, and kind of rested on our laurels. We pay for a full time Nanny as well (above board, taxes and everything), so that's a big hit for the next few years but it's worth it.
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Old 02-27-2013, 08:05 PM   #8
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Oh, Nano, I thought I couldn't give up the sports but when we went to Disneyland on Superbowl Sunday, I realized I could quit the habit! We didn't give up the appliance, though, plenty of movies for family time!
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Old 02-27-2013, 08:12 PM   #9
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as a token first move, we got rid of our cable t.v. and land line, and reduced our internet speed, reducing that expense by $140/month. Yay baby steps! (and yay Netflix instant streaming)
No.. not the cable TV.

In all seriousness, I actually find that its money well spent. Cable keeps us at home sometimes when we're bored and feel like going out. Plenty of good movies and sports on cable that we enjoy.
IMO a good balance is needed. No spending like a drunken sailor nor being a downright scrooge. You need to enjoy the here and now as well as plan wisely for the future.
On $270k with 3 kids I think a savings of $75k a year at your age is pretty good.
Good luck!
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Old 02-27-2013, 08:51 PM   #10
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Hey, L-man, welcome back!
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Old 02-27-2013, 09:05 PM   #11
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Hey Brewer! It seems I can't make enough real world friends who are frugal, I need the virtual peer pressure!

jags, the cable is only partly about the money. I have to admit having three daughters has made me a bit of a prude, and we don't like the messages that are being sent them by even shows that are allegedly for their age (especially the commercials). We feel we can control the content and quantity better with this setup.


Now off to find a thread debating early payoff of a mortgage in light of these super low rates...
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Old 02-27-2013, 10:26 PM   #12
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Welcome back. You have a nice savings target at 75k a year and should still be able to live nicely, even after helping support the state of California.

Do you have a number in mind for 55? How much will you need to live?
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Old 02-28-2013, 02:05 AM   #13
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Welcome back.
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Old 02-28-2013, 12:35 PM   #14
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Welcome back. You have a nice savings target at 75k a year and should still be able to live nicely, even after helping support the state of California.

Do you have a number in mind for 55? How much will you need to live?
$4 million plus paid off house. At 55 I'll get a $400/month pension (they froze it this year so I can't add to it anymore). I have my Masters so I thought I'd try and teach one or two classes in computer security at my alumn that I live next to to supplement. Obviously we'll need to continue to ramp up the savings year by year to reach this goal. That's also why I've begun looking at a date more like 57/58 years of age.
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Old 02-28-2013, 12:54 PM   #15
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Hi Laurence
- I joined since you were here last time - but can relate to the pressures in San Diego.

I envy your income... Serious envy.

Please tell me you got a SoCal discount on the disney passes. Who wants to go on the blackout dates anyway - it's too crowded. Every few years we get passes... the cheapest So-Cal discounted ones... go a lot on Sundays in the fall and spring. It's too hot and crowded in the summer... so it works for us.

The BMW is almost required here in San Diego. I'm seriously shocked at how many there are in my work parking lot. I'm sure they get nervous when my beater car parks next to their nice rides.

FWIW - I'm in the payoff the mortgage early camp. It will make my budget much easier for ER in a few years.
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Old 02-28-2013, 01:03 PM   #16
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Awww, Laurence, we've missed you! Glad to hear that the family is doing well, even if there's been some spending creep. It is hard to maintain the frugal dimension 100% all the time, anyway (speaking as someone who bought, and then sold, a boat in the interim since you were last here).

Anyway, delighted to see you are back among the frugal. There is a thread somewhere around here about where we'd be in 5 years that I thought was pretty enlightening. There are a lot of consumer items tugging at our wallets, that's for sure!
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Old 02-28-2013, 01:16 PM   #17
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Welcome Back "Neighbor"! I totally agree on getting rid of cable, there's plenty of stuff on Netflix streaming to watch, and we also got a HD antenna for the few times we want to watch live TV. (Superbowl, Oscars).

I hope you'll be able to continue to enjoy your life as well as keep that new savings rate up. San Diego does have a lot of great free or cheap stuff, heck, Zoo passes are much cheaper than Disneyland passes! (although I still have my disneyland passes, but just the cheapest one)
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Old 02-28-2013, 02:58 PM   #18
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$4 million plus paid off house. At 55 I'll get a $400/month pension (they froze it this year so I can't add to it anymore). I have my Masters so I thought I'd try and teach one or two classes in computer security at my alumn that I live next to to supplement. Obviously we'll need to continue to ramp up the savings year by year to reach this goal. That's also why I've begun looking at a date more like 57/58 years of age.
=FV(7%,(55-37.5),-75,-400) = $3.736

=FV(7%,(57-37.5),-75,-400) = $4,433

so it looks possible. Stay the course.
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Old 02-28-2013, 02:59 PM   #19
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Sounds like you've kept up with the Jones's nicely!
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Old 02-28-2013, 08:00 PM   #20
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BMW 335 and a moderator on a FI board? That's a new one. That's a nice income, but after tax take home is not that substantial between federal, state, property, and fica taxes. I'd recommend trading in for a Honda Accord for the next ten years
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