2 different Paths - your opinion appreciated

[sinbad]

Hello all,
I would like to present you my situation and ask for an opinion about the 2 alternatives I’ve been thinking about. I’ve been lurking the forum for about 2.5 years now and I value the opinion of this forum members as I would value my father’s or my grandfather’s because of the stock of knowledge and experience accumulated by you all.
I’m 38 yo and am a father of two (a 7 yo boy and a 5 yo girl). I’m currently working in a highly stressed job in an investment bank and am interested in getting out of it as soon as possible. Life changes and this job and it’s values (or lack of them) are not aligned with my owns. For the past 6 years I’ve been controlling my expenses (not letting lifestyle inflation creep in) and accumulating money and currently I’ve managed to accumulate approximately 16 times my current yearly expenses. From my point of view I’m yet very far from ER possibility as I have yet a big mortgage that I would like to early repay before I would ER. My initial goal has been to be able to ER in order to be able to get out of the current stress level and do things more aligned with my current interests.
Nevertheless, as that goal will take some time to be reached I’ve been considering other alternative. One of the changes that I would like to implement in the short time is to be able to be more present (both physically and mentally) with my children. I consider that the next 10 years (besides the already passed 5/7 years) are the more beautiful and fulfilling that a father can have, in terms of interacting with its children – I’m assuming somehow that after kids reach 18 yo they will somehow be less interested in the relationship with parents – obviously this is debatable but I’m using it as a rule of thumb.
So, basically I’m internally weighting what should I do with my life in the next 10 years: should I keep doing like today, working and saving like mad in this stressful job – increasing my ER possibilities (and losing this one in a life opportunity of better following my children growth); or should I move to the slower lane, be able to be more present for my children and, by doing that, delaying (or eventually killing) my ER possibilities. I know I’m (kinda) young and that for several reasons (not only financial ones) I won’t probably ER in the next few years. So, my question is if I should sacrifice what apparently I value so much which is to be present for my kids, for ER sake.
I know there is no right or wrong answer here and that in the end only me knows the answer, but I very much value your opinion and would appreciate listen from you.
Best Regards, sinbad

 

[Onward]

From what little I know of your situation, I would say make the change to some form of empl*yment that will allow you live more sanely. The time with your kids is time you can't repurchase once you're FIREd.

 

[Animorph]

You sound like you might be in a good position to downsize your career. If you can do something with an income that supports your family without withdrawing from your portfolio, it shouldn't take too many years for a 16x portfolio to grow into a 25x or more portfolio. I think that's been a plan for a few on this board. Perfectly reasonable.

The mortgage is a whole other story of course, well debated here. It would reduce your spending if it was paid off, but you could also save enough in the portfolio to cover the mortgage payoff. Not paying it off places some risk on you, to the extent that your investment return will exceed the mortgage interest rate.

 

[pb4uski]

Investment banking is a tough life and even tougher with a family as you are finding out. Generally kids don't want to have much to do with you from 13-20 or so and then about 21 finally figure out that you're not as stupid as you seemed in their teens.

With a nestegg of 16 times expenses, you may be closer than you think and a slowdown of some fashion may not hurt your ER chances that much. I'd suggest that you look at your current situation with Quicken Lifetime Planner and look at the earliest that you could comfortably retire given the status quo. Then do a what if at a less stressful job with a lower income and see how it would push out your ER date.

There is no right or wrong answer, just follow your heart.

 

[meekie]

I'd be looking into the possibility of downsizing the house, picking up a part time job and being there for your kids. You might be able to stretch that 16 times to a little more that way.

I lost my dad this year, so that affects my opinion a lot, but you never know when something might happen to your health or someone else's. Live and enjoy your kids while you can.

 

[Ready]

Do you have any idea on what you would do next if you quit this job? Would your next job likely pay 10% less, 30%, 50%? If you were only looking at a 10-20% paycut I would imagine the decision would be much easier than if it were a 50% paycut.

 

[rodi]

A couple of questions.

First is the mom in the picture? Does she work outside the home or is she a SAHM?

The reason I ask this is that most folks consider it fine for one parent to take time off to be home with the kids when they're young. I have two sets of friends who've managed this - in each case the mom stayed home for the early years (facilitated being able to nurse the babies, participate in play groups, volunteer in the kindergarten class room.) While at home one of the mom's got her master's in engineering. The other was nominally doing post-doc research - and used that as a "cover" for her gap in work history. The PhD is now a tenured prof at a local university, and coincidentally, was grad school advisor to the mom who got her masters.

Then the dads took turns off. Each couple had the dad home for about 5 years. Dads participated in coaching soccer, being scout leaders, etc. Now - the kids are a bit older - and both dads and moms are working.

Another alternative is what my husband and I are doing. I went part time when my oldest was born (60% schedule). When I transfered jobs I had to bump it up to 80%. My husband works about 50% - which allows him to do the carpools and coach the younger son's baseball. My part time schedule allows me to run/coach a US FIRST robotics team.

We traded off money for time with the kids - and still managed to save aggressively.

 

[DJRR]

What is the job market like in Lisbon? Do you have a reasonable chance of finding a less stressful job? As others have said, your portfolio can double in 10 years (7-8% return) and provide full ER if you can get a job that covers your expenses.

As a general rule, I would never kill myself for a job that is not consistent with my values. I have quit two such jobs, one when I was asked to do unethical things, but understand it is harder with everyone depending on you.

 

[sinbad]

Hello all, thank you for your opinions, they really matter to me.

@Ready, since I’m assuming that I will leave a (somehow successful) career in Investment Banking – a career that has paid well in the past, and that I don’t want to trade it with another with a lot of responsibility (I want to change industries and downsize the level of responsibility too, in order to reduce stress and committed hours), I think the paycut could be something in the region of 40%-60%, ouch… I’m not sure exactly what I would like to do with the rest of my life, but at this stage I would like to have a less demanding job, with the corresponding paycut (assuming the pay would be enough to keep paying the bills without withdrawing from current portfolio), and getting the intellectual and social stimulus from other sources than the job – eventually by studying again.

@rodi, yes there is a mom in the picture. She works outside the home also but the proportion between my payscale and hers is huge in the proportion of 90%/10%. I know that looking at this – if the goal is just to take care of the kids – what would make sense would be for the mom to stay at home since that would provide for a full time available parent to follow the kids at the same time that the money that would be left on the table would be significant less than if I leave 60% of my pay. Unfortunately this does not address my stress level and interest in slowing down.

@ DJRR, the job market in Lisbon as of today is lousy. If I wanted to change jobs in the same career path, keeping or increasing the pay I would say it would be currently impossible. Since, I’m considering changing careers and accepting a significant paycut I’m assuming (not tested yet) that I could get a job in that conditions.

Again, thank you all for your answers and please let them keep coming.

 

[MichaelB]

Sinbad, welcome to the forum! Congratulations, you've done quite well so far, and even managed to keep your sanity while doing it. You already know there's no right choice, but there are choices that work. Have you thought about being self-employed or running your own business? That often appeals to people with strong work ethic but want less stress.

 

[Cassius King]

Sinbad, welcome to the site.
I just turned 39 and made the decision you're trying to make years ago. My thought process was:

There was zero percent chance of getting my children's adolescence back. That time will have been gone and not coming back. Like you said, when they're 18+, you're not in control in how much time they devote to you.
I'll take the guaranteed "return" of spending time with my kids while I can, then make up the money/ER responsibilities once that has been fulfilled.
Children are more valuable than another comma in my net worth.

Cheers!

 

[sinbad]

Hello all,

@MichaelB, not sure about keeping my sanity…;-) regarding self-employment, I’m affraid I’m not an entrepreneurial type. I think I’m from the kind that will have to work for somebody else… until I stop.

@Cassius King, thanks for sharing your experience. Can you please let me know how much time occurred since your decision and how it’s being working since then?

regards

 

[Cassius King]

Sure. I decided it about 10 years ago. My son was 7 and my daughter was 2 then. Worked 40 hours a week with no travel. Very flexible schedule to make son's golf tourney's in high school, coach soccer team when younger and do the same with my daughter. It had a very good impact on my marriage as well with me being available and around most of the time.
Financially, we live below our means, but don't go without. I'm debt free, and have a decent sized portfolio going. Career wise, it's probably cost me a promotion due to the fact that I wasn't "dedicated" and putting in 60+ hours a week.
I'm comfortable with all of this. I'm actually in love with my current lifestyle and don't need much else so if given the chance to do it again, it would be a no brainer.

The memories and enjoyment of joining my son at his golf tourneys and walking the ropes while he played, I can't put a price on that. Coaching my daughters soccer team and having that time with her is the same.

I know every situation is different, and this may not be the best decision for you and your family, just offering some insight in how I did it.

Cheers, and best to you!

 

[FIREdToBeExpat]

My wife and I have done something similar for our kids, we gave up our corporate jobs for home-based consulting. My kids are 9 and 7-month, so no regrets. You may wanna look at this for our details. http://www.early-retirement.org/for...criticism-and-guidance-69003.html#post1373347

 

[ziggy29]

As I matured and spent more time watching my BS bucket fill up at work, I came to realize that as much as I wanted to retire, what I really wanted more than anything was to not have said "BS bucket" keep overflowing. To that end there are few people I have come to envy more than people who truly love their work, who get paid to do something they'd enjoy doing for free anyway. If I found work that I actually felt good about -- work that made me feel like I was doing something beneficial for society and not just fattening the wallets of CEOs and major shareholders -- I'd be more inclined to get back on the horse after my layoff in April.

It sounds like you have a decent cushion and you are likely still young enough to pull off a shift in career direction. It can be scary financially, I'd imagine, and maybe I'm projecting my own experience but I'd say "go for it." Of course, I don't have kids to provide for so it's easier for me to say that.