Wanted to introduce myself, and give you my situation and join the discussion for input on various FIRE topics.
Myself 41, DW 40 plus 3 kids 11, 13, 15. I was planning for a graceful exit into retired life in Janary 2007 ( 16 months from now), but downsizing at the company I work for has accelerated this timeline and I’ll be laid off in about 3 weeks.
I’ve been making ~$160k for the last several years, but living well below our means and spending ~$50,000 after tax dollars annually.
My financial situation:
Taxable accounts $1.45m
Deferred accounts $ .45m
Other assets $ .5m* * *( mostly our primary residence)
Total * * * * * * * * $2.4m
Expenses:$55,000 annually + kids college starting in 3 years
I’ll be receiving a severance representing 7.5 months salary when* leave and I also have an equity stake in the business that will vest in January (66%) and next June (33%) that is currently worth a total of $440,000 ( before taxes and will be treated as ordinary income)
I’m not confident that this equity will have this value in January and June, so I’m ignoring it for modeling purposes.
1) What general guidance can you give me on the appropriate setup for insuring that I have $$ available for expenses, but am not having to sell securities or mutual funds in a downturn ? My initial thoughts are to set up a 2 year CD ladder with maturities every 3 months so that I always have a minimum of 2 years expenses covered.
2) Making the transition? While I’ve been working, my time has always been the most valuable commodity, so I haven’t been as frugal as I could have been in some areas of my spending.* Soon, my money will have more value than my time., so I need to shift my mindset.
3) Friends/relatives ? Most of my friends and relatives will be concerned about the fact that I’ve lost my job as they don’t know how well we’ve set ourselves up. My initial plan is to tell them that we’ll be fine due to the severance that I received and savings we’ve got. Over time this could work into a “I’m self employed” message or I could go with a “We figured out that we had enough to live on frugally forever” message.
4) Kids: I don’t want the kids to worry, but at the same time I want them to continue to learn fiscal responsibility. My thought is to let them know that Dad isn’t working anymore, but that we’ll be just fine because we avoid debt and have saved for the future. The kids don’t know how well off we are ( ala Millionaire Next Door)
I’ve definitely a bit apprehensive over this change ( due to 21 years of conditioning ), but excited at the same time because I’ve got several years worth of projects listed out on paper and am really looking forward to waking up in the morning and spending an hour reading the paper and going on with what I want to do in a leisurely fashion rather than the 100 mile per hour lifestyle that we’ve been in for the last 20+ years.
Any input is welcome
p.s. you’ll be hearing from me a lot more often in about 3 weeks*