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

[NgineER]

Annual update for 2019

Financially a stellar year - health wise not so much for my wife. The best laid plans can be thrown off by health issues... My wife will go under the knife in mid January for a double mastectomy. Will know more about the stage at that point, but everything so far indicates a fairly early stage cancer thankfully! Hopefully no chemo required, but we won't know until after surgery.

This health issue is cementing my thinking around cutting back at work to about 80% (keep full benefits) but allowing me to spend more time with family now vs. later. Will need to keep good insurance for the next five years at least...

The investment property plan is progressing well, picked up a property at land value + $2k. The crew that was hired to fix it has made nice progress on the first unit which I hope I will have rented out by the end of February.

I hit the $1,000,000 mark in February of 2015, and doubled that by New Years eve of 2019. I'd like to keep that doubling rate, but I doubt it will happen.

~$639k Roth IRA +$151k includes 9% of salary contribution
~$394k tIRA +$89k
~$277k 401k +$76k includes 14% of salary contribution & match
~$59k ESPP +$1k includes 10% contribution and withdrawal of $10k
~$20k cash -$43k Purchased one rental property
~$131k home equity +$19k
~567k rental equity +$94k purchased one rental properties and increased rents
~38k HSA +$11k withdrawal and contribution net +$3k

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

Net rental income (after allocating for future repairs and capex is $25k, almost half our current annual spend.

Total Invested
$1.37M +$320k

Net worth
$2.00M +$440k talk about sweet return!

[NgineER]

Update on my wife’s surgery as I promised.

We are now a month out from surgery and she is doing well. She is a champ and we’ve had a tremendous outpouring from friends, colleagues and neighbors. We’ve had to cook one dinner in the last month I think, but that is now tapering off.

After surgery we got the final pathology report. Her lymph nodes were clear of cancer, but the tumor size was larger than they thought. Still the stage was 1, so she caught it early.

We met with the oncologist for the second time today. He has us convinced that my wife would not benefit from chemo. Her disease free survival rate is 75% at ten years without doing anything. She has been recommended endocrine treatment which will start soon. This will bring the 10 year disease free survival rate up to 95%, so we have great hopes for her survival.
Part of the reason for the higher disease free survival rate is due to the cancer being node negative and strongly er and pr positive.

She is finally feeling better and has energy again to do things she enjoys.

[Teacher Terry]

I am so happy for both of you!

[pacergal]

That sounds like the best news for her situation.
So glad the nodes were cancer free, that is a good sign.
Continue to enjoy every day!

[NgineER]

2020 update

My wife is cancer free but is not at all enjoying (hate) her hormone blocking medicine, but at least she is cancer free and did not have to have radiation nor chemo. But there is constantly worrying about cancer coming back and possibility of lymphedema.

Secondarily on the financial front:

Market timing is for losers... ...and apparently I am one of them. Lesson learned I guess/hope.

Anyway - 2020 was off to a great start, but with Covid-19 aggressively growing in China I exited 40% of my investments in mid February, and then more in March. But apparently the market is not the economy... I failed to get back in during the March/April collapse and missed out on a great return.

Overall we are up for the year, but not thanks to my investing genius. I need to put an IPS in place for myself and strictly adhere to it.

Anyway - Here it goes...

~$708k Roth IRA +$69k includes 9% of salary contribution
~$399k tIRA +$5k
~$265k 401k -$12k includes 13% of salary contribution & match
~$36k ESPP -$23k includes 10% contribution and withdrawal of $38k
~$40k cash +$20k
~$156k home equity +$25k
~$658k rental equity +$91k finished two units and rehabbed one unit
~$40k HSA +$2k on PPO plan this year

Total Spend: $6k/month (including donations)

Net rental income $41k +$16k (after allocating for future repairs and capex)

Invested assets $1.41M + $40k puny 3%

Net worth $2.2M + $200k

Current plan is to go back to being fully invested and finishing the renovation of a last unit in the property acquired in 2019.

[yosemite]

Hello,

Ran across this thread and it was quite informative. Hope your wife is doing better and your family is ok.

Would love to see a new update from you.

Take Care

[NgineER]

2021 update

My wife is still cancer free (YAY!) but is still hating her hormone blocking medication... Depression is coming and going and makes things difficult for the whole family.

Secondarily on the financial front:

~$836k Roth IRA +$108k includes 9% of salary contribution
~$473k tIRA +$74k
~$300k 401k +35k includes 11% of salary contribution & match
~$47k ESPP +$11k includes 10% contribution and withdrawal of $5k
~$24k cash -16k
~$199k home equity +$43k
~$798k rental equity +$140k completed renovation of the final property
~$46k HSA +$6k on PPO plan this year

Total Spend: $7k/month (including donations)

Net rental income $64k +$23k (after allocating for future repairs and capex)

Invested assets $1.67M + $270k

Net worth $2.65M + $450k including real estate.

30% Rental Equity (52% property equity)
29% traditional IRA+401k
31% Roth
7% Home Equity
2% ESPP
1% Cash

Sustained $1M invested in vanguard in 2021.

Hit FI in 2021 and could retire with current spend, but want to be able to spend more...

Set my final goal for the RE portion of FIRE to retire at 55 (2030) in order to use rule of 55 and also keep all unvested options when retiring.

[yosemite]

Glad she's doing well and hope the medication pain gets better.

Thanks for sharing your details. If you don't mind me asking, what would be the total amount of invested assets you are targeting.

I also will look at using the 55 Rule as your situation is very similar to mine.

[NgineER]

I used to think that I'd want $3M to retire and be able to pull out $100k/year. Then we started investing in rental properties seven years ago and we are now cash flowing half of that, and we have now gotten halfway with our investments and are FI. We didn't have much in a taxable brokerage but had about a 50/50 split between traditional and Roth IRA. Now with all investments in rental properties done and they all are mortgaged we can now start investing in a taxable brokerage.

I will have more money than we'd spend at 55, but I know my wife would be scared to death with ACA and also a low buffer. My projections are that we'll be well north of $3M when retiring, so we started loosening the purse strings a bit and I cut back at work by going to 80%.

[yosemite]

Thanks for sharing that. Were in a similar position financially.

Your return on rental properties is quite good. You usually don't see those types of returns. Could you still get those types of returns now or is it because you purchased a long time ago?

[NgineER]

I doubt you’d get those ROIs in our area now. We haven’t found many recently. We bought our properties in 2015, 2017, 2018, 2018 and 2019. Half were ready to rent whereas half were rehabs. In the end we didn’t pay more than 100x monthly rent and we were able to increase rent substantially. Of the others two were gut rehabs and one half had substantial renovation to make it attractive. We financed all properties, but unfortunately I was slow with the last one which increased the interest rate by 1.3%. But still a couple of percent lower than the current rates.

It appears that property prices are still highly valued, probably a reflection of cash buyers.

Planning to keep them for now, the tenants are good, except for one.

[yosemite]

Wow, you have 5 properties. That's really great you are able to diversify into 5 properties. Takes the burden off 1 property being vacant.

Love your plan, that would be my ideal too.

Have you ever thought about selling the rental properties and investing it all, or has the workload been manageable.

[NgineER]

We thought about selling properties, but there would be a hefty fee associated with doing so, concluded that there would be less of a tax burden when I don’t have a W2 income. We’ll find if that was a dumb decision or not.

[yosemite]

Makes sense, good luck!

[livingalmostlarge]

I'm in the minority here but everyone is different and YMMV. Kids have blown through my budget. But so what? It means we work one more year. Being prudent in grad school living like that for years meant we can do it now

First off my DK are 10 and 12, and I'm typing this on my phone in the car at therapy for my DK1. Diagnosed with autism at age 11 last year 6th grade. That means we are considering private high school and college. That means we pay for threapy. It means we do a lot of activities and sometimes pay more for stuff to try to help her integrate better. DK 2 has recently as in couple weeks ago suggested to me that she be evaluated for neurodivergent. And this is not a surprise. My BIL when I met was on the spectrum but being dumb and 22 I never considered the what ifs. My diagnosis was $1000 oop.

So budgetwise the kids at blowing my expectations of public schools and being neurotypical and needing no help. I had enough to pay for 4 years in state public. I now have doubled that at like $175k now and we are going to cash flow if needed private high school. Special summer camp was $5k for kids on spectrum oop. No I didn't have to do it, but for us we value helping DK as much as we possibly can. Fwiw you don't know your kid till they are here and growing.

2nd the activities for kids and a family of four are expensive. We just got back from a week in Cancun and it was around $10k. We did a xcaret, xel ha, and cirque du Soleil. You don't have to do anything like this. But we do travel and do stuff a lot. Traveling now as a family runs us around $20-25k a year. You can do cheap trips but if you are going to Europe annually it's not going to be that cheap because airline tickets are pricey and as the kids get older you are stuck to school holidays unless you homeschool.

3rd eating groceries. I don't know how they are doubling the food budget this year. Inflation for sure. Going out to eat is once a week or less and it's $100 bill each time for four.

4th probably no car but never say never. But we've had two rounds of braces with special crossbite headgear. That was $6k each. And yes medically necessary unless we wanted to subject them to jaw altering surgery at age 18ish or headaches and tmj. My aunt and cousin both had to do that because they were too poor for braces for my aunt and didn't know better for my 50 year old cousin. Now we do intervention earlier and hope for the best. I will have a second round of braces for both around $3-5k. Again ymmv.

5th my dk2 has severe allergies necessating special soaps, body washes, medicines and lots of dr visits. 100% cotton clothes and very specific types and fits. Again you don't have to, but she has sensory issues so trying to get her to cooperate is the best I can hope for.

So no my kids have gotten more expensive and blown my budget out of control. But I wouldn't trade it for anything. Neither would my DH. Right now he works like mad to make a moat for our kids just in case. He's not planning on retiring until he's sure in case something should go wrong he can provide. Knowing what we know about them and they are 2e exceptional and both tested 99% and into the gifted programs I don't know how that will all work out.

I don't know if my DK 1 will ever find a partner, something I worry about. I don't know if my dk2 what sort of job she'll get. So dh is working not.just for us but them as well.

So our fire is sort of also inclusive of making sure we can give our kids all the handouts we didn't get. House, car, college free, etc

[Surewhitey]

We're 52 & 58 with a bit of time since DD was on the payroll, but my recollection is this.
College we lucked out on with about $3-4k/yr. State school and she got pre-college credits & other perks. Lived at home... Biggie.
Cell, car & insurance we paid for until graduation.
Food / clothing was negligible as she's not a diva.
Raise them without the "follow the herd" mentality and hope all 3 stay out of trouble.
I'm all about gaming until it becomes too much of their time... Thankfully DD didn't have that problem.

3 kids will likely throw curve balls on your life, but it'll be worth it. We're rinse/repeating with 2 GK's now.

[NgineER]

Quote:

Originally Posted by livingalmostlarge I'm in the minority here but everyone is different and YMMV. Kids have blown through my budget. But so what? It means we work one more year. Being prudent in grad school living like that for years meant we can do it now First off my DK are 10 and 12, and I'm typing this on my phone in the car at therapy for my DK1. Diagnosed with autism at age 11 last year 6th grade. That means we are considering private high school and college. That means we pay for threapy. It means we do a lot of activities and sometimes pay more for stuff to try to help her integrate better. DK 2 has recently as in couple weeks ago suggested to me that she be evaluated for neurodivergent. And this is not a surprise. My BIL when I met was on the spectrum but being dumb and 22 I never considered the what ifs. My diagnosis was $1000 oop. So budgetwise the kids at blowing my expectations of public schools and being neurotypical and needing no help. I had enough to pay for 4 years in state public. I now have doubled that at like $175k now and we are going to cash flow if needed private high school. Special summer camp was $5k for kids on spectrum oop. No I didn't have to do it, but for us we value helping DK as much as we possibly can. Fwiw you don't know your kid till they are here and growing. 2nd the activities for kids and a family of four are expensive. We just got back from a week in Cancun and it was around $10k. We did a xcaret, xel ha, and cirque du Soleil. You don't have to do anything like this. But we do travel and do stuff a lot. Traveling now as a family runs us around $20-25k a year. You can do cheap trips but if you are going to Europe annually it's not going to be that cheap because airline tickets are pricey and as the kids get older you are stuck to school holidays unless you homeschool. 3rd eating groceries. I don't know how they are doubling the food budget this year. Inflation for sure. Going out to eat is once a week or less and it's $100 bill each time for four. 4th probably no car but never say never. But we've had two rounds of braces with special crossbite headgear. That was $6k each. And yes medically necessary unless we wanted to subject them to jaw altering surgery at age 18ish or headaches and tmj. My aunt and cousin both had to do that because they were too poor for braces for my aunt and didn't know better for my 50 year old cousin. Now we do intervention earlier and hope for the best. I will have a second round of braces for both around $3-5k. Again ymmv. 5th my dk2 has severe allergies necessating special soaps, body washes, medicines and lots of dr visits. 100% cotton clothes and very specific types and fits. Again you don't have to, but she has sensory issues so trying to get her to cooperate is the best I can hope for. So no my kids have gotten more expensive and blown my budget out of control. But I wouldn't trade it for anything. Neither would my DH. Right now he works like mad to make a moat for our kids just in case. He's not planning on retiring until he's sure in case something should go wrong he can provide. Knowing what we know about them and they are 2e exceptional and both tested 99% and into the gifted programs I don't know how that will all work out. I don't know if my DK 1 will ever find a partner, something I worry about. I don't know if my dk2 what sort of job she'll get. So dh is working not.just for us but them as well. So our fire is sort of also inclusive of making sure we can give our kids all the handouts we didn't get. House, car, college free, etc

Life throws you curveballs, man plans, and God laughs. Sorry to hear about your DK's health issues, that is heartbreaking when you find out about DK's health issues.

I hear what you are saying, you can plan as much as you want, and things will happen. When I joined the forum, we had three kids, now we have four. Costs were pretty manageable when the kids were young, and DW was home. Now with kids in school sports and traveling is back on the table costs are starting to take off. As much as we let them, I suppose.

With my ER target being back at 55, my models with 7% returns we can easily spend a lot more than we do. We are currently putting away between 5 and 10% of our investment account balance annually, the last couple of years have been a little out of whack with property renovations, so I haven't tracked our budget as closely as I used to. I believe our spend the last two years has increased by about 20%, mainly due to investments in gear to allow us experiences any minimize SAD issues due to my wife's medication.

[NgineER]

My wife is still cancer free (YAY!) but is still hating her hormone blocking medication... Depression is coming and going and makes things difficult for the whole family.
Had some heart issues myself, but specialists deemed it caused by a virus, and it disappeared after a few days all by itself (tachycardia, PVC etc.)

Secondarily on the financial front, a pretty brutal year:

~$686k Roth IRA -$150k includes 9% of salary contribution
~$377k tIRA -$96k
~$281k 401k -19k includes 11% of salary contribution & match
~$52k ESPP +$5k includes 10% contribution and withdrawal of $5k
~$197k brokerage +188k from refi and net rents after renovations complete
~$45k cash +21k
~$310k home equity +$101k
~$661k rental equity -$137k financed last property
~$34k HSA -$12k on PPO plan this year

Total Spend: Too much, need to figure this out...

Net rental income $47k -$17k (new mortgage payment) (after allocating for future repairs and capex)

Invested assets $1.6M -$70k

Net worth $2.59M -$60k including real estate.

25% Rental Equity (43% property equity-down due to financing)
26% traditional IRA+401k
27% Roth
12% Home Equity
9% ESPP and joint brokerage
1% Cash

Starting to boost taxable brokerage account with proceeds from refinancing and rental income. Hoping to get to a 33%/33%/33% distribution between Roth IRA/tIRA/brokerage by the time I RE.

FI now and planned RE of 3/31/2030

[kgtest]

Quote:

Originally Posted by NgineER Net worth $2.59M -$60k including real estate.

Glad to hear DW is still cancer free! Time > $$$

For NW only being down 60k you aren't doing too bad. I am nowhere near your NW and I was down quite a bit more than you in 2022.

That equity is really building up.

[NgineER]

A super year on the financial front and nothing new on the health front (which is both good and bad).

~$901k Roth IRA +$215k includes 9% of salary contribution
~$377k tIRA +$95k
~$383k 401k +102k includes 11% of salary contribution & match
~$72k ESPP +$20k includes 10% contribution and withdrawal of $9k
~$222k brokerage +25k includes withdrawal of $25k for back door Roth's for 2022 and 2023 for us and $4k contribution to the account
~$48k cash +3k
~$319k home RE +$9k
~$730k rental RE+$69k rent increases
~$41k HSA +$7k on PPO plan this year

Total Spend: Still a lot, but with plan to retire in six years we can afford to loosen the purse strings a bit.

Net rental income $52k +$5k (new mortgage payment) (after allocating for future repairs and capex)

Invested assets $2.08M +$480k, +30%
Net worth $3.0M +$440k including real estate.

23% Rental Equity (43% property equity-down due to financing)
27% traditional IRA+401k
29% Roth
10% Home Equity
10% ESPP and joint brokerage
1% Cash

Hoping to get to a 33%/33%/33% distribution between Roth IRA/tIRA/brokerage by the time I RE.

FI now and planned RE of 3/31/2030