Retire in a "Rari"

[SuperCarGoals]

Whoa - it's been over 5.5 years since I first posted in here.

In those 5.5 years, that 1.72M in investable assets has grown to $4.3M after the recent run-up.

I also now own a new Porsche 911 so I've already nibbled at the "Rari" bug a bit.

My employment in tech is still going OK, but I am constantly thinking that this could be the year I get laid off so I'm mentally preparing myself for that to happen.

Otherwise, I really enjoy it. It's remote, relatively low stress, and super flexible. I can take vacations whenever I want and have a great team that backs me up (and I them) when I'm out of the office.

==

Back in 2018, I would have said that I'm done at $5M invested for sure.... but now eight digits feels possible before I hit 55 in about 9 years.

If I can CAGR at an average of 9.5%, it could happen without even investing another dollar.

==

I know life sounds great and this may sound like humblebragging. I've been very fortunate/privileged to have this life of "freedom"

I think what's holding me back right now is that I want to spend frivolously without withdrawing any money out of savings.

I've essentially built a life where I spend everything that hits my checking account without thinking because all bills/savings have been automated away.

==

I think that the only way I stop working is if these golden handcuffs are forcibly removed via layoff.

But something tells me I will probably find some other sources of income to continue to grow the pie instead of taking bites from it.

Am I just being greedy at this point? Would you stop working?

If you don't know what a "Rari" is then you haven't been listening to Fetty Wap or any of those other Hippity Hop Rappy artists out there



Seriously though - I do aspire to Fat FIRE with a Fer"rari" or Lamborghini type Super Car in my meager garage at some point - if possible.

==

Hello there! I just created my account, but have been lurking for a bit.

I am 41 years old and in IT.

As of today, MINT puts us (me, my wife, and 2 young kids) at a net worth of about $1.920MM. Approximately $200K of that is primary residence equity.

Currently, we are saving about $50K - $60K in various vehicles (401K/Backdoor Roth/HSA), and are aiming to have our home paid off in about 11-12 years.

A basic retirement calculator shows us at $4.858MM if we are able to invest $55K per year at 7% starting with $1.720MM in investable assets today - in 12 years.

This should throw off $194K per year or $16K per month (4% SWR).

Let's say with taxes/healthcare unknowns, I'm down to $11K per month.

Once our house is paid off, I'd estimate our monthly "mandatory" expenses will be in the $3500-ish range.

This should give us $7500 in "fun" money - for travel/dining and a Ferrari lease!?!

==

However, you know what they say about the "Best Laid Plans"

I'm sure I'll lose my job or get sick along the way - stock market crashes - the usual.

But I'm trying to be optimistic here

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Am I being OVER-optimistic? Please feel free to poke holes/face-punch me.

 

[2017ish]

Whoa - it's been over 5.5 years since I first posted in here.

In those 5.5 years, that 1.72M in investable assets has grown to $4.3M after the recent run-up.

...


==

Back in 2018, I would have said that I'm done at $5M invested for sure.... but now eight digits feels possible before I hit 55 in about 9 years.

If I can CAGR at an average of 9.5%, it could happen without even investing another dollar.

==

...

I think what's holding me back right now is that I want to spend frivolously without withdrawing any money out of savings.

I've essentially built a life where I spend everything that hits my checking account without thinking because all bills/savings have been automated away.

==

I think that the only way I stop working is if these golden handcuffs are forcibly removed via layoff.

But something tells me I will probably find some other sources of income to continue to grow the pie instead of taking bites from it.

Am I just being greedy at this point? Would you stop working?

You still have two youngish kids. And does your spouse continue to want to keep working at her job? Perhaps when/if you get laid off, you could devote more time to the kids and family while your spouse continued to work. What would that do to the cash flow?

And no, you aren't being greedy. Spending changes, desires change--including the desired margin of safety. If you retire and after 3-5 years decide you made a mistake, it becomes difficult to get back in. (I took 15 years off to raise kids; job hunting was definitely more time consuming than it had been in my twenties!)

 

[freedomatlast]

If you enjoy the work, keep doing it with the knowledge that you can quit or get laid off at any time and finances will be just fine. It is a lot of fun to have the basics for retirement taken care of and now you can spend on luxuries that you only dreamt of before.

 

[HI Bill]

A basic retirement calculator shows us at $4.858MM if we are able to invest $55K per year at 7% starting with $1.720MM in investable assets today - in 12 years.
Am I being OVER-optimistic?

The retirement calculator you're using seems to assume linear gains of 7% annually. The markets aren't linear, and 'past performance isn't predictive of future performance.' Whether you hit $5M in 12 years will depend on the SOR (sequence of returns). On average, you'll hit your target, or you could encounter a 30% market swoon in the 12th year. Good luck!

 

[MarieIG]

Sounds like you're really enjoying your life OP - including your job. As long as that continues - I don't see any rush . . .

 

[SuperCarGoals]

You still have two youngish kids. And does your spouse continue to want to keep working at her job? Perhaps when/if you get laid off, you could devote more time to the kids and family while your spouse continued to work. What would that do to the cash flow?

And no, you aren't being greedy. Spending changes, desires change--including the desired margin of safety. If you retire and after 3-5 years decide you made a mistake, it becomes difficult to get back in. (I took 15 years off to raise kids; job hunting was definitely more time consuming than it had been in my twenties!)

Thanks for your reply!

Yes - we have one in elementary and one in middle - and when they are not in school, I actually spend quite of bit of time with them. I go to probably 90% of their school/athletic functions even if they are in the middle of the day. This work-from-home job allows me to see them as soon as they get home from school and hang out with them during the day when they are home from breaks. I actually don't think I could spend much more time with them even if I wasn't working.

We just took them to New Zealand for 10 days over Thanksgiving, and are off to London/Paris and Iceland next year.

Even though we had them a little later in life, the amount of financial security and having money to spend with them is such a good feeling that we probably wouldn't have if we had them when we were just starting off in our 20's.

==

Although her job is not work from home - my spouse has also earned quite a bit of flexibility with her tenure, but she actually loves working. It's been a struggle just to change her mindset to retire at 55 since she'd probably work well into her 60's if I wasn't around.

If I were to lose my job, she says she would be supportive of me not working because it's been my career that has gotten us to this point.

Cash flow wise, her salary could support all of our monthly expenses, but we would have to stop saving and we would need to count our pennies so to speak.

I would feel like I would still need to earn some of my "own" money to feed my "Rari" habit and would not feel good about spending any of the money she earns on my hobbies... Maybe I'll feel ok if I draw .5%-1%?

Finally, you're right that it would likely be difficult to return to my role with a 3 year break. I think it would actually pretty difficult for me to replace this position if I quit for a month. That's another reason why I still OMY syndrome.

 

[SuperCarGoals]

If you enjoy the work, keep doing it with the knowledge that you can quit or get laid off at any time and finances will be just fine. It is a lot of fun to have the basics for retirement taken care of and now you can spend on luxuries that you only dreamt of before.

100% - Have definitely checked off the Coast FIRE checkbox.

And yes, being able to do just about anything I want with my family (within reason) is a lot of fun... I just want to make sure I can sustain it once work ends.

Not being able to have a similar lifestyle to what I have now would be a bummer.

 

[SuperCarGoals]

The retirement calculator you're using seems to assume linear gains of 7% annually. The markets aren't linear, and 'past performance isn't predictive of future performance.' Whether you hit $5M in 12 years will depend on the SOR (sequence of returns). On average, you'll hit your target, or you could encounter a 30% market swoon in the 12th year. Good luck!

Thanks!

The good news is that I have hit $4.3M in the 5.5 years since I wrote that post so $5M should come in the next 2-3 - so still ahead of the 12 that I was anticipating back in 2018.

I've been investing for about 24 years now so have hit a few dips along the way

 

[SuperCarGoals]

Sounds like you're really enjoying your life OP - including your job. As long as that continues - I don't see any rush . . .

Thanks - yes feeling like I'm in the "prime" of my life so to speak.

Definitely trying to make the most of everything while I still have the opportunity to do so.

 

[HI Bill]

The good news is that I have hit $4.3M in the 5.5 years since I wrote that post so $5M should come in the next 2-3 - so still ahead of the 12 that I was anticipating back in 2018.

I've been investing for about 24 years now so have hit a few dips along the way

Ah, I didn't see your OP date of 2018. We've had a great run!

 

[Koolau]

Ah, I didn't see your OP date of 2018. We've had a great run!

Yeah, that was the first thing I noticed and had to read through to see what was new!


Apparently OP is doing quite well with goals toward Early Retirement. Retiring in your 40s is rare, even here. It leaves a very long (expected) life to cover for expenses and the vague issues of life (illness, j*b loss, family changes (like more kids), relocation, buying a "rari" etc.) Having kids to get through school is another complicating factor. (I retired when my last kid started university.)



I guess I'd be hesitant to retire that early, but if you do the calculations and it says you have enough, you could go for it. (See FIRECalc near the bottom of the page and run all your numbers.) Our "first approximation" for a 30 year retirement is the 4% rule, suggesting that you take 4% of your savings stash the first year to live on and adjust for inflation each year. This assumes a portfolio of 40/60 to 60/40. So, 4% is likely too optimistic in your 40s. BUT, you've shown yourself to be a good saver and either a good or lucky investor.


Check back often (heh, heh more often than every 5 years!) BUT do keep in mind our advice is worth every penny you are paying for it (IOW do your own research.) Best of luck and never forget YMMV.