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Old 01-26-2021, 05:05 PM   #21
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Clearly I screwed up this part of my post since several people have come away without understanding me, and maybe I am coming off like a jerk. My response to SecondCor521 has a restatement, maybe it will help.
You did not come across at all like a jerk. I was just making a statement.
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Old 01-26-2021, 05:09 PM   #22
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Originally Posted by Fielding View Post
I was not trying to brag, seems I failed.

What I was trying to convey is, usually for a FIRE candidate W-2 income has a strong correlation with their nest egg and, by extension, the value of One More Year to the security/success of their withdrawal rate. Since they are pretty well disconnected for me, I find myself looking for the 4% rule of W-2-income-to-net-worth. At what point does it no longer make sense to work? Is it when W-2 income gets to 3% of net worth? 2%?

Of course, the decision to retire is about much more than numbers, but it would be nice if there was a pre-baked, throughly-discussed rule of thumb in this area.
First and most importantly, I didn't think you were bragging (or coming across as a jerk). I read what you wrote as though you were lacking confidence because your situation was relatively unusual. I also read your "I have none of that" statement as perhaps envy or disappointment. My response to you was meant to be encouraging, not critical.

As for your second question, I think there is not any rule of thumb for the ratio between W-2 income and net worth with respect to OMY concerns. It's highly subjective but depends mostly on the person's risk tolerance and attitude and ability to go back to work, and to some extent on how much the person can save in that OMY -- higher income earners seem to talk about doing OMY because of the rapid addition to the NW they can make. It also can be age related - younger people seem to be more willing to do OMY because they don't feel their life expectancy creeping up on them. And also the person's attitude towards working longer (see below).

For me the relevant questions are (a) do you have enough? and (b) have you had enough?

The first question relates to if you have enough assets to support your spending; the consensus on this thread is that you do. The rule of thumb is generally 4% - your annual spending is 4% (or less) of your spendable assets. With a spending amount of about $120K, you'd need about $3M according to that rule of thumb. You have more than that in taxable alone, not to mention all your other assets and income streams.

The 4% rule is widely discussed here; you can search and find threads, or probably ask any specific questions you have about it. You may also want to try out FIREcalc by going to http://www.firecalc.com and putting in your own numbers. Note that FIREcalc is primarily and by default a historical calculator, not a Monte Carlo calculator -- you should read and understand the difference.

The second question relates to how fed-up and tired you are of the hassle of work. You haven't talked about that as much. If you want to keep working because you like it and derive personal satisfaction from it, OK by me (and probably most of the board here). If you want to FIRE because the job is a grind / headache / hassle / filled with irritations, also OK by me (and probably most of the board here). Being a FIRE forum and your plentiful assets, there's pretty clearly a bias towards FIREing yourself, as you can see.

Note that W-2 income doesn't come into play with respect to either of these last two questions.
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Old 01-26-2021, 06:18 PM   #23
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You did not come off like a jerk.

Itís clear you have a good head on your shoulders. The majority here agree you can and should retire if that is your desire.

The rest is just noise your already capable of handling.
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Old 01-26-2021, 07:31 PM   #24
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as i see it( as a fellow inheritor )

the main difference between them and me as they have spent years ( decades ) planning , saving , and structuring their life styles and retirement dreams to a reasonably sustainable plan

( unlike me who gets a phone from an estate lawyer to drop in for a visit , sign some paperwork and walk out with a $160,000 check ( and the family home ) ( and i didn't even have a bank account at the time LOL

several months later a different estate lawyer rings ... , yada , yada and sends more cash to my new bank account

so the journey was a real culture shock to me ( i was the family black sheep and expected to inherit nothing , instead i out-lived all other legal claimants and shared it with the tax-man )

from live-by-the week with no bank account at all , to paper millionaire in less than a year .. that caused a real change of plans in my life

on the plus side i didn't have extravagant habits so there are some benefits there

you will probably spend many sleepless night learning about financial planning , even if you hire a financial advisor .. even Sting ( of the band Police fame ) got ripped off so you need to have some idea what you advisor is doing , before you sign or OK )

you seem to have it all tied up with a lovely bow , but take care .. inflation might raise it's ugly head .. save and grow that nest egg while you can

cheers
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Old 01-27-2021, 12:01 AM   #25
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Thank you to all posters. I appreciate all of you taking the time to reassure me.

I will likely respond in a day or two to a few more things, but I definitely have the answer I was hoping for.
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Old 01-27-2021, 04:29 PM   #26
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I think your parents did a great job of raising you to not become an entitled boob who has not yet acquired the bulk of his inheritance but lives like it prematurely. Good on them.

You are on a path to become a decamillionaire. You know this but are fearful that it might not happen, so you have designed a conservative life style based on what you currently have in your conventional investment portfolio. Have you thought about how you would live once you're worth say 15-20 million? Because it will in all likelihood happen.

Your current W-2 income seems like a pittance in comparison and frankly seems like a waste of your time. And your father seems to know that you could safely retire now, as he did at a similar age.

I'm curios. Has your brother, who it appears has a similar projected future, approached his future financial life in the same manner?
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Old 01-27-2021, 05:24 PM   #27
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... Potential additional inheritance when my parents die. ... When I succumb to the temptation to pencil this in, I plan for an additional $2 million in 2020 dollars when he is 95 ...
I find that interactions with my parents are much healthier if I assume that I will inherit $0 from each (they are divorced). Not only are there many scenarios where this could in fact be the case, but my fundamental attitude that "it's your money - do what you wish - I'm entitled to $0" comes through in many overt and subtle ways.

One of my parents has threatened to disinherit me twice over the last five years, usually in a fit of anger when they think I haven't been sufficiently attentive. I just shrug my shoulders and laugh. Sorry - money is not power in this situation if I'm conducting my financial life 'correctly'. IMO there is no other way to live.
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Old 01-27-2021, 06:24 PM   #28
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A thumbnail sketch of my brother

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Originally Posted by Golden sunsets View Post
I'm curious. Has your brother, who it appears has a similar projected future, approached his future financial life in the same manner?
Similar, but not exactly the same.

He is invested in low-cost Vanguard index funds, like the rest of the family - this was drilled into both of us starting in our early 20s.

His house is more expensive than mine, but mostly because of where and when he bought, not because it is actually a fancier house. He has the taste of a spiffy minimalist - he doesn't have many possessions or clothes, but those he does are tasteful, expensive if that seemed best although not consistently. He uses everything until it breaks or is worn out. He'll buy the latest iPhone perhaps, but then use it for five years until the battery is gone and the screen cracked.

I honestly find it hard to find serious fault with any materialism in his life. I find this very surprising since he hangs out with a more moneyed crowd - 10-20+ millionaries with multiple vacation houses sitting empty much of the year, etc. He'll take a medium or even top-end vacation once a year with this crew. Even so, he doesn't seem to get caught up in competition with them. I probably could not handle it - I only have a few friends with likely similar wealth, and we are all so cagey about hiding it I have to guess who they are, or what they might have.

My brother chose his job because it let him help people, and also because it is part time. I would say he has been half-retired for ten years. He does make less than me W-2, so I believe more of his cost of living has been subsidized by the inheritance. But he is not a slouch when he is working.

He scoffs when I talk about retiring, but when I challenge him on what he thinks it would take it is clear he has never run the numbers, and isn't interested in doing so. He wants to continue working for the moment, and believes his job adds stability to his life that he wants.
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Old 01-28-2021, 01:02 AM   #29
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So what's the plan?
----------------------

Because of all the uncertainty and the restrictions on assets, it has been hard to think about a long-term plan at times. To give just one concrete example, the timberland is an asset 100% in my control and ownership. Yet I can't count on specific income in a particular year as I would be able to do if we owned an apartment complex. I try to treat it as a giant bond with an asymmetrical payoff in my asset allocation, but I can't re-balance it - I can't readily sell it without damaging my relationship with my brother. It's not a terrible problem to have, but it isn't typical either. Perhaps those in family businesses can relate.

All this made me hold out until our current total spend looked to be covered with just the taxable portfolio alone. I think I'm finally there. Everything else that may arrive above that will just make us more secure and comfortable.

Although I complain above about the lack of predictable income, I actually think it has been a blessing that all of my inherited wealth has been so irregular. It has forced my brother and I to treat every royalty or bonus check, every timber sale, as yet another unreliable windfall, one which might never be repeated. I have tried hard to keep my family's basic lifestyle limited to something affordable on just my W-2 income, and while I haven't 100% succeeded, I'm close enough that I don't feel exposed. I've tried to keep spending above baseline limited to things like vacations that did not increase our recurring day-to-day costs. I am certain I would have behaved differently if more of my wealth came from W-2 income, it would have been quite different psychologically.

If I'm FI, why would I keep working?
-----------------------------------------

I'm in what I think is fairly unusual place. Bluntly: People with my W-2 income typically don't get this wealthy except via windfall. The majority of peers in wealth I see on FIRE forums are making $300k+ / year, and have RSUs or other golden handcuffs, or can work to 55 and hope for a buyout offer, retiree health care, or pension. I have absolutely none of that.

With my W-2 income contributing such a relatively small amount when compared with potential investment return and immediate mineral income, it's difficult for me to make a compelling case for continuing to work, at least for someone else on things I don't particularly care about. It might take me another 8 years of working full time to make what my portfolio alone would do passively at 6% in 3 years. That just seems like a waste.

Have other people reached similar points in their progress towards retirement? How did you think about these issues?
Your story is rather similar to mine. DW and I had good W2 incomes from Mega Corp and achieved FI earlier in the decade. Then I inherited a big bundle upon DF's passing. I worked for a couple of years before calling it quit. DW continues to rise in Mega Corp and pulls in big W2 income, adding to the pile. I stand to inherited another big bundle from the family trust in the future. We're heavily invested in real estate.

I definitely had this feeling of guilt when I inherited. I didn't feel like I earned it, so to speak. I just got lucky. On the other hand, since I was able to achieve FI before I inherited, it sort of made the transition to ER easier for me---I felt like I earned the ER on my own merit (even though I didn't "earn" the inherited bundle). Still, I worked a couple of years after inheriting just to make myself feel better that I wasn't retiring BECAUSE of the inheritance. I think it was just a funny mind game I played with myself, even though at that point, my W2 income was a pittance compared to the investment returns I was getting from my portfolio. Looking back, I now realize that I made a mistake in not retiring earlier. Those extra two years were wasted on a job I didn't particularly enjoy, and netting me extra pennies that I didn't need.

IMO, your question of whether to keep working is not one of money. You already have more than enough to walk away, and your W2 income won't make a difference one way or another. If you don't enjoy your work, you can do something else with your life that gives you meaning and fulfillment; your portfolio gives you the freedom to do so. You now have the money, the freedom and the time to do anything you want to do in life, so what do you want to do? Figure that out, but don't waste your time slaving way for job that you don't enjoy or for $ that you don't need. I made that mistake and it cost me 2 years of ER bliss. Don't make the same mistake.

All the best,

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Old 01-28-2021, 01:29 AM   #30
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I'll chime in with yeah, you sounds good to go just off the assets you have already. I don't expect to inherit as much, but our family wealth is fairly substantial, and I do occasionally speculate about toning down my belt and suspenders since I'm definitely inheriting millions. But I just keep plugging along with my ultra-conservative 3% plan for now and hoping my folks will live forever. I figure if I plan for a FatFIRE all on my own with lots of safety margins, if I do end up inheriting tons, then I join Robbie on the Blow that Dough train (no kids, brother has no kids, only family we may want to pass money to is my wife's sister who is 20 years younger than me). I make a bit more on my W-2 than you as of a few years ago, but have a lot less of other assets.

My folks started gifting the annual gift limit every year to my brother and over a decade ago now, because they want to see us benefit from what they are giving us while they are alive, rather than just having it all go when they are dead. Definitely let your dad pay your medical if he's wanting to, he gets to actually enjoy how he's improving your life (the mineral rights he transferred probably gave him a lot of pleasure with how much they were worth).

Don't feel weird about your family having managed its wealth well. I'd only keep working in your situation if I loved the job, otherwise there is so much more you can do with your time.
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Old 02-05-2021, 04:55 PM   #31
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If you retire you will have plenty of time to ask and answer questions such as those you pose!
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Honestly...
Old 02-05-2021, 08:40 PM   #32
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Honestly...

Didnít have the patience to peruse your full post... but it seems you have the funds to retire comfortably.

If you would like to be Uber-wealthy I would suggest investing some in future trending industries. My outlook is that grid energy and combustion engine auto is being disrupted by clean energy. Tesla would do be a safe bet and if Elon is to believed TSLA will may appreciate at least 50% annually over heft several years.

Cheers.
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Old 02-05-2021, 09:30 PM   #33
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My parents were a bit similar to you in that they had inherited some mineral rights income, and a chunk of forest land. Eventually retirement age came, and, us kids being in no particular financial distress, they donated the forest to a community organization under a community stewardship / preservation kind of plan, keeping the mineral rights to fund their dotage. I haven't asked but I'm sure I can still take a walk in there, so I'm still getting value from it.

Of course you would only consider something like that when the family is enthusiastically on board, but it would simplify inheritance and replace an unknown with a known. Known to be zero, but certainty has a value of its own Quantum economics tells us the way to be certain of the return of an investment is to give up knowing its exact value, isn't that how it goes?
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Old 02-05-2021, 10:29 PM   #34
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You're fixed. When you've had it at your small company, hang it up. And never look back.

It's a shame much of the world is cut off to tourists in 2021, as many of us are bored not traveling. And we don't have any desire to travel domestically any longer.

Your talents might be convincing your father to take all steps necessary to keep Uncle Sam's hand out of his pocket in death. A plan of action prepared by a tax accountant specializing in estates would be certainly warranted.
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Old 02-06-2021, 06:43 AM   #35
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You're fixed. When you've had it at your small company, hang it up. And never look back.

It's a shame much of the world is cut off to tourists in 2021, as many of us are bored not traveling. And we don't have any desire to travel domestically any longer.

Your talents might be convincing your father to take all steps necessary to keep Uncle Sam's hand out of his pocket in death. A plan of action prepared by a tax accountant specializing in estates would be certainly warranted.
This is good advice here. Your parents can gift you and your siblings quite a bit annually to lessen their tax bite later and will not significantly impact their lifestyle.

There seems to be a few in your situation. Your future financial spending on hobbies may lesson as we get older. For example, I use to spend a lot on big boats, but do not even own one now. Might make up for it with a mountain retreat, however.
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