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04-14-2008, 02:17 PM
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#1
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Confused about dryer sheets
Join Date: Apr 2008
Posts: 6
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Getting Inspired
Hello All,
I finally signed up after lurking here for the last few months. I get a lot of inspiration from reading various postings and I am definitely aspiring to FIRE early, although I am not sure at what point I can do so.
Here are my statistics:
- Age, 41 and wife is 37
- 2 Daughters, ages 11 and 9
- Combined income of around 200K
- 401K - about 400K
- IRAs - 20K
- Savings - 80K
- Mortgage - 400K, Equity - 450K
- No credit card or car payments
- College Tuition fully paid for
- 529's - 10K
- Saving rate about 50K/year
I think I should have not taken out such a big mortgage. There are days where I think we should sell our house and buy a smaller one around 300K for cash then we could live on one income and really boost our savings rate up to perhaps 100K/year.
Once the kids are out of the house and if we have no mortgage (sell the current one), I truly believe we can live on 50K / yr. My goal is around 52 - 55 to FIRE. Perhaps the wife would work a few more years after I FIRE. Do you think this is a reasonable plan?
Thanks.
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04-14-2008, 04:54 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
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VQTB, at first glance it looks like a reasonable plan to me. Have you plugged your numbers into FIRECalc? There's a link at the bottom of the page.
Welcome aboard!
Coach
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04-14-2008, 05:33 PM
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#3
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Confused about dryer sheets
Join Date: Apr 2008
Posts: 6
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Lately I have been almost obsessive about early FIREd. I think part of it is due to the high level of stress at work. Early this year, I got a mild case of shingles which I attribute to the stress level.
Sometimes it seems so far away. I know I need to relax and enjoy the ride.
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04-14-2008, 08:34 PM
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#4
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Full time employment: Posting here.
Join Date: Jul 2007
Posts: 678
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Welcome! Without doing much calculation, it looks like a reasonable plan at a glance. The questions are whether your wife is on board about working after you RE, health insurance, and how much you want to put into your daughters' 529 plans.
I think all of us young dreamers are obsessed with FIRE. That's why some of us spend so much time on this board. If work is really stressful to the point of threatening your health, then maybe you should think hard about whether you can/should keep it up for another 12-15 years. Of course that's easier said than done.
In any case, welcome to the board!
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04-14-2008, 10:41 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jan 2007
Location: Thousand Oaks
Posts: 1,111
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since you are asking for opinions :-)
if it was me, i would go with your feeling about downsizing the house
assuming you can sell it at a price you can live with.
increasing your savings rate might make all the difference in meeting your
fire goal.
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04-15-2008, 06:54 AM
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#6
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Confused about dryer sheets
Join Date: Apr 2008
Posts: 6
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I've been trying to convince my wife for the last three years to downsize. I thought back then we were near the top of the housing bubble. However, she is reluctant since the kids are still young and we are in a real good location with good schools. We have probably seen a decrease of 150K in our house since the top - not that others are not in the same situation as well.
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04-15-2008, 10:00 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 1,224
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Quote:
Originally Posted by VQTB
I've been trying to convince my wife for the last three years to downsize. I thought back then we were near the top of the housing bubble. However, she is reluctant since the kids are still young and we are in a real good location with good schools. We have probably seen a decrease of 150K in our house since the top - not that others are not in the same situation as well.
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That makes it tough.
DD
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04-16-2008, 04:24 AM
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#8
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Full time employment: Posting here.
Join Date: Oct 2007
Location: New York
Posts: 898
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Welcome to the board!
Re downsizing, how would you pay cash for a 300k house? Looks like you've got 80k there. Would you raid the 401k?
Just curious, what part of FL are you in?
Regarding inspiration I understand the feeling. I thought I was the only guy in the world with a real FIRE plan until I happened upon this forum.
__________________
Money's just something you need in case you don't die tomorrow.
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04-16-2008, 07:31 AM
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#9
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Confused about dryer sheets
Join Date: Apr 2008
Posts: 6
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Maurice,
The house in my area are now probably going for 850K. Therefore, I have roughly 450K in equity minus the 400K mortgage. I'm in the Tampa area.
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04-16-2008, 07:56 AM
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#10
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Full time employment: Posting here.
Join Date: Oct 2007
Location: New York
Posts: 898
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Ah - sorry. Missed that equity line.
Looks like a good plan. I'm a few months away from being mortgage free and can't wait.
(i should add a number of people on this board think being w/o a mortgage doesn't make sense)
__________________
Money's just something you need in case you don't die tomorrow.
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04-16-2008, 03:21 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 2,487
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....and there are a few of us on this board that think being without a mortgage makes all the sense in the world. Mortgage free for 13 years...been that way since age 33, and it is one of the most comfortable feelings in the world.
R
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04-16-2008, 06:19 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Location: Switzerland
Posts: 1,047
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Reducing the footprint
I would recommend that you consider downsizing when prices recover. Reducing your costs of infrastructure is a great way to build assets for your FIRE'd future!
My wife and I live in a one-bedroom apartment which we own outright. We bought it for a song and spent an equal amount fixing it up -- it's amazing what kind of imported Italian tiles you can afford when you only need seven of them!
We paid off the small mortgage last December and utterly enjoy the feeling of absolutely zero debt. Today I took the day off from work and we walked by the ocean and had a nice lunch nearby. We call it "practicing" for early retirement. A big house with all the attendant infrastructure costs that go with it is anathema to us!
- BB
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04-16-2008, 07:10 PM
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#13
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Confused about dryer sheets
Join Date: Apr 2008
Posts: 6
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Bryan,
I agree there are other inherent costs with a big house such as higher utilities, maintenance, insurance and taxes. My insurance is $3500/yr and taxes are $12000/yr. I can't quite downsize to a one bedroom apartment just yet with two girls. I am not sure I would ever downsize to that small. Got to have at least two bathrooms.
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04-17-2008, 06:50 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Location: Switzerland
Posts: 1,047
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Living Space
VQTB,
I understand. My example works because we have no children and have high personal space thresholds, which is essential.
My sense of your situation is that you are planning well and addressing the right issues. Congrats.
-BB
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