Time to chime in...

[laison612]

Hello everyone,

I stumbled across this board almost 2 years ago and have been lurking here ever since.  A brief introduction of myself: approaching the magic 40 number, wife about the same age, 6 yr old daughter.  I work in the financial business, wife has a CPA but works in the private sector.
Net worth: 2+mm (net of taxes). Negligible amount of mortgage. Combined income $500K+/yr.
We don't have a lavish lifestyle, but we do enjoy quality of life that money buys sometimes.

Like most people and careers, having spent a good number of years in my business, I am no
longer very excited about it.  To be sure, there  is a very challenging (intellectually) aspect to my
work.  But I think as one gets older and hopefully wiser, one also gets more cynical.  I know my
wife calls me cynical from time to time.  Well, how can I not be?  There is zero altruistic value in the work I do.  It's about making money, period.  I am not going to be hypocritical: I benefit directly
from this money machine.  I get paid very well for a relatively stress free job.  I rarely work crazy hours, and only work a little over 10 months a year after factoring in the vacation and holidays.

Believe me, it has not always been smooth sailing in my career.  I can totally relate to  the many
people who complain about their work life in this forum.  The fact of matter is, a miserable work environment makes you miserable both at work and home.  I have worked in companies where I absolutely hated the people around me and I also have had the opposite experience.  Fortunately,
I have always been able to change my environment.  But to a certain extend, let's face it, there is
no such thing as an utopian work environment.  That's why we get paid to work.  The only thing I
can do is to maximize the financial return of my time I put into work because we all know there is
not a whole lot of time in one's life.  I also know there  is an  inverse relationship between how much BS one will tolerate at work vs. one's wealth. 

Over the last few years, I have tossed around the idea of ER partly because I have many interests
and hobbies which I want to pursue, and partly because I am just tired of working.  But I have
a number of issues with the ER concept: One, I've been brought up by parents who have worked
selflessly to give their children a better life.  They are still alive and healthy (Thank God).  Two, what
example would I set for my daughter?  I feel that I need to be productive until she's at least in
high school to teach her about life and work by example.  Three, at my income level, it's just very
hard to walk away from that money.  If I start thinking about what an extra year will buy...I know
that's a trap.  But I am tentatively planning to either take a long break or work part time (either still in my field or something completely different) when I reach the age of 45.  My goal is $5mm (today's money) networth by then which I have no doubt can be achieved.

Well, enough of my rambling.  Please feel free to let me know what you think.  I have been very impressed with the wisdom and maturity of the many frequent posters here.  Many poeple's
stories here give me a proper perspective on life.  Thanks to everyone who shared your stories
here.  I truly believe it helps people to learn that you're not the only one going through these problems in life.

Oh, BTW, I chose my user name because that's what I really aspire to be 

HappyGoLucky

 

[Cool Dood]

Well, I won't pretend to be one of the people with "wisdom and maturity," but I will welcome you, and I found your story interesting -- I'm sure some of the wise and mature folks will have some insightful views, which I'll be as interested in reading as you are.

Out of curiosity, do you mind sharing what field it is that you're in?

 

[Nords]

Welcome to the board, HappyGoLucky!

Like most people and careers, having spent a good number of years in my business, I am no longer very excited about it. To be sure, there is a very challenging (intellectually) aspect to my work. But I think as one gets older and hopefully wiser, one also gets more cynical. I know my wife calls me cynical from time to time. Well, how can I not be? There is zero altruistic value in the work I do. It's about making money, period. I am not going to be hypocritical: I benefit directly from this money machine. I get paid very well for a relatively stress free job. I rarely work crazy hours, and only work a little over 10 months a year after factoring in the vacation and holidays.
Believe me, it has not always been smooth sailing in my career. I can totally relate to the many people who complain about their work life in this forum. The fact of matter is, a miserable work environment makes you miserable both at work and home. I have worked in companies where I absolutely hated the people around me and I also have had the opposite experience. Fortunately, I have always been able to change my environment. But to a certain extend, let's face it, there is no such thing as an utopian work environment. That's why we get paid to work. The only thing I can do is to maximize the financial return of my time I put into work because we all know there is not a whole lot of time in one's life. I also know there is an inverse relationship between how much BS one will tolerate at work vs. one's wealth.

Well, I guess if the first million is the hardest, then it becomes successively more difficult to know when enough is enough. You make such a good case for not working that I'm wondering what drags you out the door each morning!

Frankly it'd be hard to expect much sympathy for your position. Your portfolio is far above what most of the board's posters would ever expect to see, and many have ER'd on less than $1M.

But at this point it's not about how much you have or how much more you're planning to make. How much do you spend, and how do the numbers run in FIRECalc? We have posters on the board who feel they couldn't possibly be expected to live on less than six figures of spending per year, and others who live comfortably on less than $25K/year. There seems to be one big group at ~$24K/year (~$2K/month) and another at ~$48K/year. $5M may make you feel comfortable but it might be unnecessary-- and with your developing cynicism, how many more years are you willing to work to get there?

One, I've been brought up by parents who have worked
selflessly to give their children a better life. They are still alive and healthy (Thank God).

It sounds like your parents have succeeded beyond their wildest dreams. From this point on, which would make them happier: seeing you enjoying ER and living a more fulfilling life, spending quality family time (with them too), or slaving away until you drop in harness?

Two, what example would I set for my daughter? I feel that I need to be productive until she's at least in high school to teach her about life and work by example.

Kids aren't interested in how "productive" you are and I doubt that they feel they'll learn about life from watching you work. They worry whether you're happy and whether you'll spend time with them. They'll learn about life by being around you, and kids have highly accurate B.S. detectors.

I retired when our kid was a little over nine years old. She didn't care one bit what type of example I set as long as I was spending time with her. In fact I think I taught her a lot more about life & work by showing her how to reach goals and live the life you want.

Today our kid is 13 years old and she doesn't care what we do as long as we provide the mobile wallet support without actually being seen in public with her. I feel that we're well into the "danger years", and I'd rather be hanging around keeping track of her friends and her every move ready to help out with a little parental support & guidance.

We tell her that we hope someday she'll find her own work that she loves, and that if she handles her money well then she can choose to keep doing that work as long as she wants-- or ER and do something else. Having the assets will give her the choices.

One of our posters retired with a kid in high school and spent several years keeping up appearances by leaving the house each morning for "work" until she'd left for school. Now that she's an adult, she tells him that she never noticed the subterfuge-- and anyway she was so wrapped up in getting through her teenage years that if she had noticed, she wouldn't have cared.

You've mentioned your parents and your kid. How's your spouse feel about the situation?

Three, at my income level, it's just very hard to walk away from that money. If I start thinking about what an extra year will buy...I know that's a trap. But I am tentatively planning to either take a long break or work part time (either still in my field or something completely different) when I reach the age of 45. My goal is $5mm (today's money) networth by then which I have no doubt can be achieved.

Well, you gotta have goals and walking away is always hard. But the best way to make the ER decision is to experience the lifestyle for an extended time. At this point the issue isn't about having to leave work-- it's deciding what's more important to you than work. Without a compelling reason to leave, it can be hard to find a point where you can choose to make a clean break.

 

[GMueller]

Well, I guess if the first million is the hardest, then it becomes successively more difficult to know when enough is enough.

That's my dilemma precisely. I once thought that $1M was enough. Having recently crossed that threshold, I'm now talking to my wife about "the need to have a little cushion." Yeah, I know, it should be a simple exerice: 1) how much do I estimate I will spend each year, then 2) how big a nest egg do I need to generate the figure I came up with in number 1. Should be simple, but I think what many people deal with just before they "pull the plug" is not so much a rationale exercise, but an emotional one. I can't quite bring myself to "cut the cord" from that 'ol paycheck. Knowing that it is unlikely I will ever step up to the buffet again, I want to make sure I have everything I can possibly scoop on my plate before I leave the table, whether I will actually need it or not. Does it make sense? Probably not, but I am beginning to think that what I am dealing with is something that originates somewhere in the brain stem, not something that can be dealt with in the cortex. So, I suspect I will never feel that I "have enough" and that I am ready to retire until my brain stem gives the A-ok. Any advice on how to deal with a obstinate brain stem?

Robert

 

[Robert the Red]

Kids aren't interested in how "productive" you are and I doubt that they feel they'll learn about life from watching you work.

I was 14 (and my brother 12) when my father retired at 50. I don't think it made any noticeable difference to us, then or now, that he didn't 'work' at a j*b. We turned out OK-ish, anyway -- both have PhDs in science and are doing well.

 

[SteveR]

... I can't quite bring myself to "cut the cord" from that 'ol paycheck.  Knowing that it is unlikely I will ever step up to the buffet again, I want to make sure I have everything I can possibly scoop on my plate before I leave the table, whether I will actually need it or not.  Does it make sense?   Probably not, but I am beginning to think that what I am dealing with is something that originates somewhere in the brain stem, not something that can be dealt with in the cortex.  So, I suspect I will never feel that I "have enough" and that I am ready to retire until my brain stem gives the A-ok.  Any advice on how to deal with a obstinate brain stem?

Robert

When is enough.......enough? That would be one of the golden questions here. Is $1M enough? Surely $2M would be twice as nice! Which leads to $3M has to be just that much better. Now $4M...I can live on that! But..........$5M would sure be a nice cushion. ETC. :

At some point you have to put up or shut up when it comes to your own number and when enough is truly enough. Each of us are unique in our needs and want and in our abiity to get "enough" $$ to fund our needs and wants. Sometimes you just have to lower your expectations of your wants in order to have "enough" to FIRE. Otherwise, you keep on s*cking on the "wages for labor teat" as you get fatter and fatter but all the while, your life "countdown clock" is ticking away.

Once you have "enough"....quit and enjoy the next stage of your life.

 

[jdw_fire]

Any advice on how to deal with a obstinate brain stem?

Take an extended vacation (on the order of months) and see how the old brain stem is doing toward the end.  That might give it time to adjust to ER and you may see that it doesn't want to go back to work at the scheduled end of said vacation.  And then the vacation just became the start of you ER.

 

[HobbyDave]

Two, what
example would I set for my daughter? I feel that I need to be productive until she's at least in
high school to teach her about life and work by example.

I just wanted to chime in on this one as well. My father is a lawyer, always worked very hard, long hours to make sure to provide very well for us. And I've learned from this example and refused to go to law school because I may turn out like him.

Your lesson from setting an example isn't always what you expected it to be. My father wanted to show how to provide for a family, and what I took away was that work sucked, made your father work long hours away from home, and I have always wanted to retire as soon as possible.

Anyway, not like I'm bitter or anything... ... but I think that a father being around to teach their kids is a lot more valuable than a father working long hours, or any hours for that matter.

 

[SteveR]

...I think that a father being around to teach their kids is a lot more valuable than a father working long hours, or any hours for that matter.

The issue is one of balance (a la C-T). A career that brings home the bacon frequently requires long hours away from home. A job that pays far less would not provide as much to the family bank account and money problems would be an even larger source of conflict and stress for the family. Trying to find a balance between a job you can do for as long as you want to do it and one that provides enough for the family to be comfortable and allows time with the family is getting harder and harder to find. Corp. America and the private sector are demanding more hours for fewer people to do more work. The balance is getting harder and harder to find.

 

[spideyrdpd]

There are people that work for the altrusitic value ?

I agree with the other guy. Take three months off . Try to function on the income you would receive from your investments. Then you can quit or go back to work

 

[EagleEye]

Re: EagleEye

Hi all. I have been lurking at this forum for about a year. HGL's post prompted me to de-lurk and share some thoughts, in particular about HGL's number:

First, I think it is worth questioning your assumption (about which you have "no doubt") that you will hit $5 million in 5 years. Your combined income with that of your spouse is $500K, or $300K after taxes. Assuming no major financial obligations and a minimal mortgage, but also assuming that you and his wife don't live like monks and spend some money on your daughter, I think you might make it, but it is no guarantee. If you save the vast bulk of your income (well above the average household savings rate), say $220K/year, and if you earn a steady 7% on all of your assets, then my calculator shows that it would take you somewhere north of 6 years to make it. Of course, that assumes an abnormally high savings rate. It also assumes that all $ 2 million of your existing assets earn the 7%. You don't say whether those $2 million include the value of your home or, if so, where that home is located. Fair to say that if your home is in a bubble area and you are using inflated valuations, that will throw everything off.

Second, I question whether you really needs $5 million or whether hitting this number is in some way your compensating for ER guilt, (i.e., I'll retire but only after I've shown everyone that I can really make it in the real world!). Obviously, only you know the real answer to this, and I would like to hear more from you. But you have to wonder what is going on, given that you says you don't lead a lavish lifestyle and yet insist on a number that would yield $200-250K/year.

Third, if $5 million is what you really need, then god bless and I wish you good luck getting there. But if that $5 million includes a good deal of icing on the cake, then I would suggest you consider what you are trading off -- years. You only have a limited number of ER years in which you still have enough youthful energy and a degree of confidence in your health where you can do anything. That's not to say there aren't energetic 85 year-olds in the world, but on average, I think it is fair to say that ER Year 1 at age 45 is more filled with options and possibilities than ER Year 30 at age 75. The years themselves have a value. If your "real" number is 3 or 4 million and you trade off years of freedom for a million or two of surplus savings, I don't think that is a smart bargain.

Finally, I would appreciate a few more details on what you do in the financial sector.

 

[Gumby]

EagleEye:

As you so aptly point out, to get to $5 million in 5-6 years, HGL's savings rate will need to be such that it demonstrates an ability to live on about $80k per year, which will require only $2 million to support. Frankly, it seems as if he has enough right now (unlesss, of course, most of his net worth is in his house).

 

[laison612]

Thanks for the many thoughtful comments & inputs. I have been away in the last
6 days and not had the chance to catch up with the posts. Hopefully in the next
day or two, I can resume the dialogues.

HappyGoLucky

 

[kcowan]

Hi HGL

I think you are making the same mistake that I made. "I will retire when..." and then insert a financial number. WADR you need to model what retired life will be like. ISTM that without planning for what you are really going to do, you are missing.

Retirement is just living w/o the duties of gainfull employment. You will fill the 50 hours with other pursuits. You need to b sure those pursuits are going to make you happier than what you are doing now.

Then you need to work up the scenario that show you how much you need. Excluding the house and travel, $2MM should be plenty. So how much house and how much travel will you do?

Once you start to to visualize your next ER life, you should start to get excited about it. Then the timing will become clearer.

And when you interact socially, just say you are a portfolio manager to overcome the stigma of being unemployed at an early age.

 

[laison612]

OK, finally got a chance to sit down.  Some replies in no particular order:

I work in the Capital Market of an investment bank.  The business involves institutional trading of fixed-income derivative products.

EagleEye, your skeptism regarding my financial goal is very understandable, but without getting
into certain details, let me just say that the pay scale in my business is very different from any
other industry that I can think of.  I know there is no guarantee in life, but based on what I know
regarding my earnings potential, and that the financial market does not experience any prolonged
dislocation in the next 6 years, I am not concerned about reaching the $5mm goal. 

Whether or not that figure makes any sense, it's still debatable even within my own mind.  I know
all about living on very little as I was born and raised in a very poor country.  My parents did the
best they could and I never felt I was poor or unhappy.  In hindsight, we had very little even in terms of food.  We were never hungry but we also didn't have anything in abundance.  We weren't
unhappy because just about everyone else lived the same way.  This relative comparative happiness phenomenon has been well studied and documented, and I can atest to it with my own
experience.

I frankly haven't tried to come up with a minimum figure on which we can live on yet.  I know we
are capable of living on a very low budget. Do I WANT to do that?  The answer is NO. I think it'll be
a figure in the range of $8K-$12K/mon assuming that we have to pay our own health insurance
and the kid's education cost is outside of this.  Obviously, this monthly figure includes traveling and
hobbies etc.

Nords,  my wife would like to spend more time at home with the kid.  Realistically, I think she will
transition into a part time schedule in the next year or so.  I would like her to spend more time
with our kid especially during the formative teenage years.  I enjoy spending time together with the family too, but I am afraid my daughter won't want us around too much comes the teenage years.  We already live very close to my parents and see them often.  It's indeed one of my wishes that when I do ER, I can spend even more time with them.  Luckily, they are very healthy and active right now.

Ceberon, I am very surprised by your experience with your father being a lawyer and always
working late.  Where I grew up, we were taught at an early stage to appreciate what parents do for us.  Is it not the case in this country?? 

I totally agree that having the right balance it's the key.  If I sounded like I HAVE to have X amount of money to be happy or to retire, that's not the case.  All I am saying is that I have a very high probability of adding substantially to my wealth in the next few years AND that my life is not very stressed.  Can I use more free time now? the answer is obviously yes.  But it's a trade-off situation
since I can accumulate more wealth now which will enable me to have more time to do other things
just a few years down the road.  And I am not loosing my health over work.  I still manage to find the time to exercise.

So I think I am going to do this unless things change, e.g., work gets too stressful.  All the comments are well taken regarding what's enough.  For sure, I am not the kind who has to have more money for the sake of having more money. 

HappyGoLucky

 

[HobbyDave]

Ceberon, I am very surprised by your experience with your father being a lawyer and always
working late. Where I grew up, we were taught at an early stage to appreciate what parents do for us. Is it not the case in this country??

There is a large difference between appreciation of what someone has done for you, and agreeing that it should have been done. For example:

My father worked 12 hour days to bring in a huge amount of money. We had great christmas presents, we had all the video games, pinball machine, pool, etc. I understood that he was doing this for us children, so I appreciated that he was working hard for us and have always thanked him for it. On the other hand, if it was up to me, I would have had him working 8 hour days, and he could have given me a sweater for a christmas present. I understood that he worked hard for us, but we would have preferred for him to be home.

So I have never had an interest in doing what he did. I thought "perhaps someday I will understand why he worked such long hours", but so far I have not come to that conclusion. I think that I would much rather have less money, and spend more time with my children.

It is a hard thing to see your father now that you're old, and realize that you two could have been such good friends if you'd known each other. Now it is too late, since I have my own family. I can hang out with him on a weekend once in awhile, but my youth (and youth is generally filled with a lot of free time) is all gone.

So hopefully I've gotten across my point. I think he worked hard, and was not selfish. He did what he thought was best, and I respect him for that. I think he's one of the most dedicated and hard working fathers out there. He grew up very poor (food stamps, etc), and certainly has pulled himself up. I just would have preferred he had made some different choices, and I intend to act differently.

 

[brewer12345]

I work in the Capital Market of an investment bank. 

Which explains why you think you need $5MM to make it in retirement. Simply put, you are living in financial never-never land. I'd suggest taking some time off away from Wall St. Most "normal" people don't shop for a $20k watch every year or two, trade in 2 YO BMW 5 series at bonus time because the new mdel is out, or summer in the Hamptons. It is easy t lose perspective with all the money flying around, but you can have a fantastic quality of life with $2 or $3MM.

I have to agree with Cerberon's comments. My dad also worked long hours, and the poor guy got up at 2AM to start his 12 to 14 hour days. He did very well and succeeded in carving out some time for us as well, but I cannot help but think that our relationship would be a lot closer if he had had a less demanding job. It haunts me now that I have kids and a strenuous job.

 

[73ss454]

Which explains why you think you need $5MM to make it in retirement.  Simply put, you are living in financial never-never land.  I'd suggest taking some time off away from Wall St.  Most "normal" people don't shop for a $20k watch every year or two, trade in 2 YO BMW 5 series at bonus time because the new mdel is out, or summer in the Hamptons.  It is easy t lose perspective with all the money flying around, but you can have a fantastic quality of life with $2 or $3MM.

I have to agree with Cerberon's comments.  My dad also worked long hours, and the poor guy got up at 2AM to start his 12 to 14 hour days.  He did very well and succeeded in carving out some time for us as well, but I cannot help but think that our relationship would be a lot closer if he had had a less demanding job.  It haunts me now that I have kids and a strenuous job.

My DW pointed out to me a few weeks ago the song, Cat's in the cradle.

I'ts amazing how we fall into the trap.

 

[HobbyDave]

My DW pointed out to me a few weeks ago the song, Cat's in the cradle.

I'ts amazing how we fall into the trap.

Heh, that has been my favorite song since high school, always made me a bit melancholy.

I told my wife in no uncertain terms that if we do have kids, it will be with at least one parent home at all times until they're in school full time, and I will need to have a job close to home as well, so that I can be back early in the afternoon. I'm making careful career decisions, because I don't want to take some VP job that will require me to travel a lot, etc. I'll most likely be giving up some money, but I think it's safer than risking missing my kid/kids growing up.

On the other hand, we might just skip the kids, and then who knows what I'll do

 

[laison612]

Ceberon,

Thank you for the clarification. I now understand what you meant and I am in agreement with your
view.

HappyGoLucky

 

[laison612]

Brewer12345,

It's true there are many people in my business live the way you described. But that doesn't describe everyone's lifestyle. Certainly not mine.

Taking some time off is definitely an option. But I am currently leaning toward sticking it out for a few
more years then call it quit, because I don't think I want to get back into the game after an extended
leave. It'll just be too painful...I'd rather just do the time now

HayppyGoLucky