Hi-New here! Hoping to FIRE in 16 years. How do expenses pre FIRE change over time?

[sengsational]

Quote:

Originally Posted by growing_older This was not my experience. As kids got older, the daycare or afterschool expenses decreased (not a factor for OP with a stay at home parent), but the schools have been cutting back on all kinds of funding. To play sports requires fees, plus uniforms plus equipment. Music lessons and instruments. Fees to be in the Drama Club. Schools have sponsored some excellent educational trips, but kids have to pay to participate. Band trips, Band uniforms, academic competitions, Math events. We did not provide cars or insurance, kids had to pay that themselves, but the other educational and experience spending definitely did rise as the kids got older, especially in middle school and high school.

I got some feedback last night that agreed with your assessement (daycare/afterschool expense going down, then extracurricular expense coming up later). My kids went to public schools, and yes, they had the band trips, uniforms and stuff like that. But they gerrymander the school districts around here so we have a mix of incomes, and the programs are designed to be non-exclusionary on the basis of cost (i.e. pretty cheap to participate). But yeah, if you want your kids to have riding lessons or something like that, budget those separately, hehe. Otherwise the 5% should cover it.

[sailor]

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Originally Posted by molof Hermit: Sorry to hear about your wife... She is insured for $0.5MM, so it would not allow me to quit my job today, but it would cover college expenses and additional miscellaneous that we don't need today due to her taking care of the home and family.

I know it's a morbid subject, but don't forget about Social Security survivor's benefit with small kids.
All kids get it before they turn 18 (19 if still in school) and spouse, if caring for kids before their 16th birthday.
Your Social Security statement (available at ssa.gov) provides the actual amount (for me it was $2k monthly per kid, for the family not to exceed $4700).
Because of this benefit we decided to carry only moderate amounts of term life insurance.
We hope to be FI by the time kids reach this age.

[growing_older]

Quote:

My kids went to public schools, and yes, they had the band trips, uniforms and stuff like that. But they gerrymander the school districts around here so we have a mix of incomes, and the programs are designed to be non-exclusionary on the basis of cost (i.e. pretty cheap to participate).

Mine, went to public schools as well. What I found was that the budgets at schools just keep getting tighter, so programs that were set to have only modest costs to participate were partly funded by the school budget and that has only gone down for many years. By the time the youngest was participating in many of these activities, the previously stated school's goal to keep them affordable was no longer part of the equation. They needed 100% funding, and were trying for more than 100% in attempts to subsidize kids who really could not afford it. Also PTA fund raising became a major focus, and the PTA actually paid for many school supplies, some staff positions and even some basic maintenance on the building.

[dontworry]

Our kids are currently 9, 11, and 12. They go to public school as there really aren't many other options out here in the boonies where we live. I work from a home office and DH has a flexible schedule so we haven't had to pay for day care for 3-4 years, so we are very fortunate. Kids are involved in lots of activities but so far things haven't been too expensive. There are sports fees, band instrument rental, etc. My oldest is in the ski club which is by far the most expensive. I think for us the expenses are gonna come with cars and college. I am not looking forward to paying for auto insurance when we have three teenage drivers. We will see about college...we would like to help pay for as much as possible but time will tell. I know it's early but I don't know if I see all three going to a four year traditional college/university. My boys don't love school by any means. Time will tell!

[NgineER]

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Originally Posted by molof 9. ~$230k roth and $300k tIRA. 401(k) $38k (W**rking at new Mega Corp for a little over a year) Maxing out 401(k), roth IRA and stock purchase plan.

Update after one year on the board... Didn't have great returns this last year~5.7%. Stached away a lot and my net worth has gone up... Was hoping to hit two commas before my 40th, but I am $32k short.

~$277k Roth
~$330k tIRA
~$73k 401k
~$32k stock purchase plan after tax
~$80k after tax mutual funds
~$70k cash
~$60k home equity

Putting away about ~$70k annually including employee matching.

[NgineER]

Hit two commas today (Net worth including house) for the first time, hope to stay above, but will surely drop below since I need to replace my car.

Next goal is two commas liquid assets

[papadad111]

How did you get so much into a Roth IRA?

[NgineER]

Quote:

Originally Posted by papadad111 How did you get so much into a Roth IRA?

My wife worked a little after undergrad and we rolled over her 401k when we were in grad school. We have also contributed for over ten years to Roths. I also just started after tax 401k to Roth 401k conversions. My company allows 9% of my salary to after tax contribution.

[NgineER]

Quote:

Originally Posted by molof Update after one year on the board... Didn't have great returns this last year~5.7%. Stached away a lot and my net worth has gone up... Was hoping to hit two commas before my 40th, but I am $32k short. ~$277k Roth ~$330k tIRA ~$73k 401k ~$32k stock purchase plan after tax ~$80k after tax mutual funds ~$70k cash ~$60k home equity Putting away about ~$70k annually including employee matching.

Another update as another year has passed. Was too busy around the time of my "anniversary" on the board, we just welcomed our fourth major expense, I mean child, to our family so I did not keep track of what my accounts were on that day. Posting end of 2015 numbers instead.
Returns were not great, but I kept buying and I am still in the two comma club, despite the poor markets last year and these initial months of 2016.

We had much higher medical expenses this year, so spending was higher than previous years, bought a minivan to fit everyone in recently, but that is not captured in the numbers below. Bought almost new from private party at great discount, first car purchase in 12 years.
Bought a duplex at an auction that I am renovating, so a lot of the cash has gone into it.

I know that adding another mouth to feed will make it harder to RE, but I am hoping to get some more rentals to give me extra income and enable me to hopefully retire prior to 55.

These are the numbers:

~$320k Roth +$32k
~$299k tIRA -$31k
~$98k 401k +$25k
~$42k ESPP +$10k
~$70k after tax invest -$10k
~$25k cash -$45k
~$100k home equity +$40k Recently appraised
~100k rental property equity +$100k

[NgineER]

Another annual update, 2016 numbers:
Overall a good year, purchased a newish van and finished the renovation of the rental property. Got both units rented, one year leases (25% premium compared to very similar property next door), financed the property and got out all but $2k invested in purchase and renovation and have 35% equity in the property. Keeping proceeds from financing in cash to buy more properties if deals appear.

~$380k Roth +$60k 9% After tax 401k ro + $30k Roth Horse Race
~$297k tIRA -$2k -$30k Roth Horse Race
~$141k 401k +$43k $18k+8% contribution
~$42k ESPP -$6k Started selling off to finance rental reno
~$4k after tax -$66k Sold off to finance rental reno and newish van
~$200k cash +$175k Financed rental property 3.5% 15 year
~$71k home equity -$14k Home Equity Loan to finance rental property
~85k rental equity -$15k Financed the property
~11k HSA +$3k

Total Spend:
$5750/month (about same as previous year) + $24,000 for new vehicle


Net worth
$1.24M (+$178k)

[NgineER]

Annual update for 2017

Overall a good year, cash from financing of first property dragged a bit on performance, but total net worth up 21%. Added a second rental property to my portfolio and still looking for additional properties. Tenants in first property signed another annual lease and I spent about 2 hours in total on the first property and no repair or maintenance work.

~$538k Roth IRA +$147k (includes $40k Roth Horse Race)
~$321k tIRA +$22k(includes -$40k Roth Horse Race)
~$203k 401k +$63k includes $18k+8% contribution & match
~$47k ESPP +$7k includes 10% contribution and -$22k charitable donation
~$160k cash -$41k Purchased rental property
~$93k home equity +$16k
~139k rental equity +$54k purchased rental property
~21k HSA +$10k

Total Spend:
$5000/month (about same as previous year)

10% Salary bump due to promotion in November

Total Invested
$1.09M +$182k

Net worth
$1.52M +$266k

[NgineER]

Annual update for 2018

Ok year overall - the march upward in stocks couldn't go on forever, and I don't mind buying stocks on sale. Added third and fourth rental properties to our portfolio and looking for additional properties. Rental property prices are getting frothy in our area - don't know how people make the numbers work - might have a lot of properties on sale in a couple of years when new investors realize it is not worth it at their basis. Very minimal maintenance work on the properties - but did have two furnaces that wouldn't heat. Youtube however is a wonderful tool, figured out the problem in about 30 minutes for both problems and could fix them without calling a specialist..

Did spend quite a bit of time renovating one property, but it resulted in improving rental income by about 50%.

~$488k Roth IRA -$50k includes 9% contribution
~$305k tIRA -$16k
~$201k 401k -$2k includes $10k+8% contribution & match
~$53k ESPP +$6k includes 10% contribution
~$63k cash -$97k Purchased two rental properties
~$112k home equity +$19k
~358k rental equity +$219k purchased two rental properties and increased rents
~27k HSA +$6k

Total Spend:
$5000/month (about same as previous year)

Net rental income (after allocating for future repairs and capex is $24k, almost half our current annual spend.

Total Invested
$1.05M -$40k

Net worth
$1.56M +$40k (down 10% from peak)

[NgineER]

This sucks-big time!

DW was just Diagnosed with breast cancer. We were on track to RE in 5-7 years, but who knows what will happen now. We only got the biopsy results the day after Thanksgiving, so we don’t know what stage it is yet. Have been holding it together well, but nearly lost it today when my two oldest kids 12 & 10 asked DW if she was ok and she said they did not have to worry about her. We won’t tell them until after the full diagnose and hopefully after Christmas, but man that was hard. The two youngest (6 & 3) haven’t noticed DW’s change in mood.
Don’t know how to tell the kids yet, it will be hard I’m sure.

The best laid plans only go so far, putting everything on hold, but got to work to keep good health insurance.

[WyomingLife]

Dear NgineER:

So sorry for this news. Tremendous advances have been made in breast cancer treatments over the years, and institutions such as MD Anderson are beacons of hope. Best wishes to you and DW.

From my old age perch: Folks with good health may tend to take it for granted. HC is, in my view, the financial wild card of life. It is odd we live in a society where the bulk of coverage seems to be tied to employment (I am aware of the status of the ACA). As a society facing rapid advances in technologies such as machine learning and AI that seem certain to continue to create even greater pressures in labor markets, the sustainability of employment-based HC in the decades ahead seems iffy, at best, at least to me. It is unfortunate that folks must deal with these stresses. A wild card for sure for FIRE planning.

Thank you as well for the annual financial updates.

Take care.

[NgineER]

Quote:

Originally Posted by WyomingLife Dear NgineER: So sorry for this news. Tremendous advances have been made in breast cancer treatments over the years, and institutions such as MD Anderson are beacons of hope. Best wishes to you and DW.

Thanks - trying to understand what the best options are now.

[Teacher Terry]

Sending lots of love and light for a full recovery.

[Dd852]

Very sorry to read this. The curve balls of life! Sending all good wishes for good news and a complete recovery - and hoping you can try to enjoy the holiday season together despite this hanging over the family.

[pacergal]

Yes, cancer sucks, very big time. So sorry you and your family are going through this.
Best wishes and healing prayers to you and your wife.

[CindyBlue]

Quote:

Originally Posted by NgineER This sucks-big time! DW was just Diagnosed with breast cancer. We were on track to RE in 5-7 years, but who knows what will happen now. We only got the biopsy results the day after Thanksgiving, so we don’t know what stage it is yet. Have been holding it together well, but nearly lost it today when my two oldest kids 12 & 10 asked DW if she was ok and she said they did not have to worry about her. We won’t tell them until after the full diagnose and hopefully after Christmas, but man that was hard. The two youngest (6 & 3) haven’t noticed DW’s change in mood. Don’t know how to tell the kids yet, it will be hard I’m sure. The best laid plans only go so far, putting everything on hold, but got to work to keep good health insurance.

You are so right...that just sucks! Keeping you in my thoughts and prayers...

[NgineER]

thanks for everyone's comments - I'll update when I know more on the prognosis and treatment plan