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Old 06-15-2010, 06:40 PM   #21
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Please don't side-track this thread into myers-briggs.

There's good information here. Let's focus on the OP.
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Old 06-15-2010, 06:46 PM   #22
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I have been looking at this for plan B. Cutting our present expenses by 25% is possible. But it would not be our first choice. My thinking is this: right now, we make about 7 times what we spend. So we don't really need to tightly control our spending. I wanted an iPad and I just bought one. No big deal. But in 2013, if we start making just enough money to cover the bills, I wouldn't be surprised if we naturally cut back on expenses. DW and I are savers and our expenses could fall as we adjust to having a much smaller income to work with. So we could reach the 3% treshhold sooner than expected.
We found that we cut back on expenses pretty naturally after we quit our jobs, and then pared them back some more when the stock market dropped. Having said that, I think there is a unique 'expense level' that is right for each person/family/location and to try and live below that for an extended period of time will cause stress & unhappiness.

We found that money became much more important to us when we quit our job, and it took months before I could stop worrying about it. Your statement about buying an iPad because you wanted it - you will naturally start thinking twice and thrice before making those purchases once you stop having a regular paycheck.

There are so many similarities between your situation and ours going back some 4-5 years.
All the best.
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Old 06-15-2010, 07:44 PM   #23
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We found that we cut back on expenses pretty naturally after we quit our jobs, and then pared them back some more when the stock market dropped. Having said that, I think there is a unique 'expense level' that is right for each person/family/location and to try and live below that for an extended period of time will cause stress & unhappiness.

We found that money became much more important to us when we quit our job, and it took months before I could stop worrying about it. Your statement about buying an iPad because you wanted it - you will naturally start thinking twice and thrice before making those purchases once you stop having a regular paycheck.

There are so many similarities between your situation and ours going back some 4-5 years.
All the best.
My plan is to start living on a stricter budget starting next year. For that, I think, we need to stop seeing so much money coming into our checking account each month. So:

We happen to have a year worth of living expenses in a savings account right now. I would like to start sending 100% of our paychecks directly to our investment accounts and try to live for an entire year solely on what's currently in that savings account. I will force us to plan expenses better and it should help us transition from living on a large, ever expanding income to living on a smaller, fixed income. I suspect our living expenses will go down as a result. It might also help us find that "unique expense level" you speak of. And finally, I think it will force us to weed out some fixed expenses in order to free more cash for discretionary expenses. For example, DW and I think that cable TV does not provide the kind of value it once did (actually, I consider it a danger to my health because, the more I watch it and the higher my blood pressure seems to get!). We are willing to try living without for a few months. I doubt, we'll miss it much. Personally, I wouldn't mind dropping my expensive AT&T iPhone plan in favor of a much cheaper, prepaid voice-only plan with T-mobile (like this: How to Use an iPhone Without a Data Plan (Voice Only) Art of the iPhone). I rarely transfer data to/from my iPhone over 3G (I mostly use our wifi connection at home for data transfer), so I don't think I would miss having a data plan at all. Plus I use only a fraction of the monthly minutes allowed under my AT&T voice plan, so a prepaid plan would certainly be more economical. Right there, we could free up over $1,000 a year. Currently, our high income help us justify those unnecessary expenses. But they will be much harder to justify when our income starts dropping.
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Old 06-15-2010, 08:28 PM   #24
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Please don't side-track this thread into myers-briggs.

There's good information here. Let's focus on the OP.
As requested by you and others, I have split the Myers-Briggs discussion into a separate thread.
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Old 06-15-2010, 08:33 PM   #25
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We happen to have a year worth of living expenses in a savings account right now. I would like to start sending 100% of our paychecks directly to our investment accounts and try to live for an entire year solely on what's currently in that savings account.
Excellent plan.
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Old 06-15-2010, 09:10 PM   #26
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My plan is to start living on a stricter budget starting next year. For that, I think, we need to stop seeing so much money coming into our checking account each month. So:

We happen to have a year worth of living expenses in a savings account right now. I would like to start sending 100% of our paychecks directly to our investment accounts and try to live for an entire year solely on what's currently in that savings account.
We started practicing living on an (even) stricter budget this year. We only live on DH's net income; mine is sent directly for investing in our taxable account. So far, so good...haven't run out of money yet!
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Old 06-15-2010, 09:14 PM   #27
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Since DW works 80 hour weeks what if she first found a normal hour job, and you kept yours for a while. With the extra time you might be much less stressed and happier. You would adjust to the lower income while still getting good wages/health insurance. Once she was in place in a satisfactory position then you could consider your options. I went out first transitioning from full to part time and DH followed a year later once health insurance was taken care of and it worked out well. Now we both do a little part time work, myself working with special ed kids and he works at the YMCA part time for the free membership and a little money. We don't cover all our expenses but don't have to hit the nest egg quite as hard and have very fulfilling jobs (yes there is such a thing)
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Old 06-16-2010, 05:38 AM   #28
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My plan is to start living on a stricter budget starting next year. For that, I think, we need to stop seeing so much money coming into our checking account each month.
This is a good idea. I did it by increasing my 401K contribution to 35% for the first 6 months of the year. If your salarey is higher then maybe only 3 months. Leave enough for the rest of the year so you get the employeer match. I also dropped cable durring one of the Britany Spears endless loop periods.
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Old 06-16-2010, 10:00 AM   #29
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My plan is to start living on a stricter budget starting next year.
Your success will also depend on how you implement the budget.

A detailed, categorized budget plan doesn't work for us - we don't like the restriction. Instead, we use an annual expense goal (SWR) & keep track of spending over the last 12 months to ensure we're on track. It allows our expenses to fluctuate without going afoul of a budget. I learned that from the Kaderlis book.

We also inspect our spending each month by category to make sure we feel that we're getting the satisfaction for the buck that we expect. So, even though I only use the Y for swimming a couple of times a week, we feel the membership is worth the money because of the satisfaction it gives me. On the other hand, we cut our cable down to the bare basics because the more expensive plans didn't have value for us. This idea is from Dominguez's Your money or your life.
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Old 06-16-2010, 10:51 AM   #30
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I have been forced to notice that I had less money this year - I maxed out my 403b plan in the first 5 1/2 months of the year. Between that deduction and other pre-tax stuff, I was getting paychecks in the $400 range (every 2 weeks) and living on saved money.

It put me into a different frame of mind when it came to expensive purchases. It's probably a good experience for me - I haven't had to worry about where the money was coming from, for a while.
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Old 06-16-2010, 11:36 AM   #31
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If you have fully and carefully evaluated your plan and it works, DO IT.

We are three years into what you described. We ESR'd at 43 and a 3% level not counting part time work. I had a consulting business on the side before. I stepped it up an brought in a couple of other retirees to w*rk part time and it is covering all expenses. The business is all Internet based so It does not limit our travels but the kids school does and they are why we went with 3% and do part time work. We also fund their college accounts first and do not count those amounts in our portfolio.

It has been wonderful. We are currently 2500 miles from home on day 18 of this summers RV trip. We did this last year for 43 days and have really enjoyed both trips.

ESR is quite liberating and for us has been even better than we dreamed. If you decide to do it I wish you the best!
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Old 06-17-2010, 06:30 PM   #32
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FD, I'm almost 36 now and I'm past my original "semi-ER" date of age 35. I came up with that date when I was under 30 and it was not well thought out. Our new semi-ER date is at around age 40. At that time, we hope to support a SWR of 4%. However, we both intend to work about 6 months of the year, and not touch our principal at all. At age 40, we should have the mortgage paid off and our daycare expenses should be done. We currently have one 2 year old and would like another one so we figure in 5 years, we should be almost done with day care expenses.

DW is a teacher so she already gets over 12 weeks off a year and she can easily get a shared contract and work even less than she works now. I'm an engineer who doesn't work nearly as hard as your DW, but work just gets in the way of life, so I'd like to pick and choose my projects or just contract. Working part time, we should be easily able to cover our expected expenses of 60K year.

DW likes her work and I like my work too. But the primaries reasons for me wanting to work part time:

1. Minimizing risk with extra income
2. Staying current with technology (perhaps related to 1 since it means I might be able to get a job again if needed)
3. Worried about leaving money on the table

Above all, the "am I crazy for leaving a 6-figure salary for not working too hard at a young age" feeling is going to nag me more than any financial concern.
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Old 06-17-2010, 09:01 PM   #33
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FD, I'm almost 36 now and I'm past my original "semi-ER" date of age 35...

Above all, the "am I crazy for leaving a 6-figure salary for not working too hard at a young age" feeling is going to nag me more than any financial concern.
Yes, it's hard to leave money on the table. But as you get to my age, the "young age" attribute no longer applies and it will get easier to make the decision. Your body has a way of reminding you that your time on earth is running out. At least mine does.

Of course, if your pay progresses higher and higher, then it would be tough again to quit. Needless to say, I never had to face that "problem" of being paid outrageously. What people wanted to pay me was slowly getting to be not worth what I myself valued my time to be. So, I no longer take some work based on pay which of course is capped, but demand that it must be fun too.
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Old 06-18-2010, 03:56 PM   #34
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2 new reasons to pull the plug earlier rather than later and enjoy life more:

1) I have just learned that my step mom has been diagnosed with breast cancer. She's only 50. The prognosis is good and I am keeping my fingers crossed. SIL was diagnosed last week with an incapacitating auto-immune disease at the age of 40. The prognosis is not so good.

2) DW was contacted by a psychiatrist whose patient is one of DW's colleagues. During one of her session, the colleague admitted that she felt the urge to stab DW... We kinda suspected she had a couple loose screws, but we didn't think it was that serious...
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Old 06-18-2010, 04:27 PM   #35
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2 new reasons to pull the plug earlier rather than later and enjoy life more:

1) I have just learned that my step mom has been diagnosed with breast cancer. She's only 50. The prognosis is good and I am keeping my fingers crossed. SIL was diagnosed last week with an incapacitating auto-immune disease at the age of 40. The prognosis is not so good.

2) DW was contacted by a psychiatrist whose patient is one of DW's colleagues. During one of her session, the colleague admitted that she felt the urge to stab DW... We kinda suspected she had a couple loose screws, but we didn't think it was that serious...
RUN, don't walk, to the nearest exit. Oh, and call the police, maybe, about DW's colleague...

I'm so sorry to hear about your step-mom and SIL. These are the things that make you realize what is really important in life.
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Old 06-18-2010, 05:01 PM   #36
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2 new reasons to pull the plug earlier rather than later and enjoy life more:

1) I have just learned that my step mom has been diagnosed with breast cancer. She's only 50. The prognosis is good and I am keeping my fingers crossed. SIL was diagnosed last week with an incapacitating auto-immune disease at the age of 40. The prognosis is not so good.

2) DW was contacted by a psychiatrist whose patient is one of DW's colleagues. During one of her session, the colleague admitted that she felt the urge to stab DW... We kinda suspected she had a couple loose screws, but we didn't think it was that serious...
Wow, you've got a lot going on. What are you going to do about the situation with DW's coworker? That sounds really scary...
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Old 06-18-2010, 05:48 PM   #37
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Wow, you've got a lot going on. What are you going to do about the situation with DW's coworker? That sounds really scary...
DW's employer has been made aware of the situation. We will let them handle it, I guess. Don't know yet what they plan to do.
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Old 06-20-2010, 02:38 AM   #38
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So what do you think, crazy or not?
I think your plan is far from crazy -- having just finished a transition quite similar to what you're contemplating, I recommend you take the plunge.

A few years ago, my wife and I were in a similar boat. I was (and still am, barely) in my 20s, in a job earning good $$. My wife was in a good career. Not as much money, but the benefits were good. The problem is that our jobs were consuming every ounce of energy we had, and I simply couldn't see myself doing that for the 20-25 years I estimated I needed to FIRE. In fact, back then I used to frequent these boards, posting from time to time. But I was so deflated when I realized that I had another 20-25 years in a job I didn't enjoy. Ok, I'll be honest -- a job (and career track) I hated.

So I gave up my FIRE dreams. I refocused my energy from FIRE to finding a vocation that made me happy every day. I did that and haven't looked back.

The funny thing is -- our finances now are in a better position than they were previously in my higher paying job. My wife stays home with the wee one, and we have more opportunities to travel. The benefits in my new job are phenomenal. And here's the kicker -- when I sit down now (2-3 years after I went through my discouraged phase) and look at the retirement calcs, I realize that I am in a better position to FIRE safely and comfortable at 50 than I was in my prior higher paying job. Sure, it's still 20 years away. But I actually look forward to work most days, and I think the 20 year journey will be far more enjoyable.

I still see myself retiring early some day. But now I don't see myself being miserable during the working years.

Long story short -- do what makes you happy and the rest will fall into place.

Sorry for the rant, but the original post really hit home with me.
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Old 06-20-2010, 11:48 AM   #39
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I think your plan is far from crazy -- having just finished a transition quite similar to what you're contemplating, I recommend you take the plunge.

A few years ago, my wife and I were in a similar boat. I was (and still am, barely) in my 20s, in a job earning good $$. My wife was in a good career. Not as much money, but the benefits were good. The problem is that our jobs were consuming every ounce of energy we had, and I simply couldn't see myself doing that for the 20-25 years I estimated I needed to FIRE. In fact, back then I used to frequent these boards, posting from time to time. But I was so deflated when I realized that I had another 20-25 years in a job I didn't enjoy. Ok, I'll be honest -- a job (and career track) I hated.

So I gave up my FIRE dreams. I refocused my energy from FIRE to finding a vocation that made me happy every day. I did that and haven't looked back.

The funny thing is -- our finances now are in a better position than they were previously in my higher paying job. My wife stays home with the wee one, and we have more opportunities to travel. The benefits in my new job are phenomenal. And here's the kicker -- when I sit down now (2-3 years after I went through my discouraged phase) and look at the retirement calcs, I realize that I am in a better position to FIRE safely and comfortable at 50 than I was in my prior higher paying job. Sure, it's still 20 years away. But I actually look forward to work most days, and I think the 20 year journey will be far more enjoyable.

I still see myself retiring early some day. But now I don't see myself being miserable during the working years.

Long story short -- do what makes you happy and the rest will fall into place.

Sorry for the rant, but the original post really hit home with me.
Great post Niko!
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Old 06-20-2010, 12:30 PM   #40
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2) DW was contacted by a psychiatrist whose patient is one of DW's colleagues. During one of her session, the colleague admitted that she felt the urge to stab DW... We kinda suspected she had a couple loose screws, but we didn't think it was that serious...
Good heavens! What are you supposed to do about this?

Ha
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