Retire next year at 45?

[2015maybetheyear]

I relate to a lot of your concerns as well as we are close in age and have three young kids at home. Education and child development are paramount to us and we have a comfortable net worth as well. I am reaching a lot of the same conclusions you are and are also thinking through the location questions. I have thought about Portland, etc. Many people disqualify California instinctively assuming sky high taxes and real estate--which is true to an extent. However, if you are retired, CA taxes are somewhat more reasonable as property taxes are certainly substantially lower than what you are paying in CT.

We have been intrigued by Northern San Diego County. The preliminary research we are doing suggests it is a very family friendly area with very good schools (arguably better than Portland? I'm not sure and would be curious about people's opinions) and the real estate, while certainly very expensive by the standards of many people would look reasonable to you. If you paid $1.7m for a house in CT and are wiling to spend $900k in Portland then you should be able to get a reasonable family home in Northern SD for somewhere around $900k or perhaps a little bit more. Obviously the weather is great and, so are, the year round outdoors activities and sports for the kids.

 

[StuckinCT]

2015maybethyear, yes, SoCal has been on our radar but for the mean time due to concerns on the real estate market topping we have taken it off the list. They have top notch swimming programs and the schools are excellent, but in Ventura county they are overcrowded from what I hear. People in Orange County say it's not all glitz, but we want space and that's hard to come by unless you are willing to drop several bills. I should check into San Diego. I have extended family there and assumed it would mean two or three bills to get anything with space and a yard. So Cal just gets spendy, realize not everyone is like that but for our needs it would be hard to avoid.

 

[pb4uski]

I was born and raised in Vermont and have lived here my entire life (so far!) other than college and some years as a young family when we lived in the Boston area. DD currently lives in Burlington and we have many friends there from when I lived and worked there 35 years ago.

Vermont is a wonderful place to live and raise kids. There are lots of things to do if you're flexible and lots of outdoor activities with the lake and the mountains right there. When I worked in Burlington I could leave the office at noon on a Saturday and be on the ski lift in an hour.

I recall when I was first moving to Burlington driving on Main Street near UVM on a beautiful day.. and looking down Main Street and seeing the city and street lights and then beyond that Lake Champlain and then beyond that the Adirondack Mountains in New York.... incredible.

You can live like a king on your wealth in Burlington (or for that matter, just about anywhere else other than the tri-state area or California metro areas).

Have you tried Find Your Spot?

 

[2015maybetheyear]

Yes, if you want to live in a beach community or glitzy town in San Diego (i.e. La Jolla, Del Mar, Rancho Santa Fe) it will probably be 2m+ for a family home. However, there are lots of communities of upper middle class, highly educated professionals raising children in good school districts -- especially in North San Diego County (think Carmel Valley, Carlsbad, Encinitas, Poway, etc) where I believe you can buy a family home for probably just under a million. I just checked and I can see 4k sqft homes in Carlsbad for instance for just over a million.

As you probably know, generally homes and yards in SoCal are smaller than the Northeast -- in part because of the cost of the land and also, given the weather, people aren't spending as much time indoors.

My guess is that there are communities in Orange County that potentially have similar prices (Fullerton, etc.) rather than the glitzy areas such as Newport Beach or Laguna Beach that would be $2m+.

I think you'll find doctors, engineers, professors, and other hard working professionals in these communities rather than the business owners, financiers, real estate developers, etc in the glitzy towns.

As far as the real estate market, I'm curious why the frothy real estate market would concern you? Now is probably not the time to buying a more expensive home. But if you are downsizing real estate by selling a more expensive home and buying a cheaper home aren't you generally taking less exposure to real estate? I guess Southern CA has appreciated quite a bit but I would think the tri-state area should be no slouch either? Part of the geographical differences also reflect long-term trends as well...e.g. continual migration out of northeast to west, wealthy baby boomers buying in places they want to retire and foreigners buying in certain areas, etc.

 

[Closet_Gamer]

StuckinCT -

Free advice, so worth your admission fee to the board, but here's a few thoughts:

Like you, I'm 44 and have a couple of kids who are jobs #1 and #2 in my life. My net worth isn't yours, but we're comfortable by any definition.

Some years back, I moved across the country to take one of those high stress/high pay jobs and my wife and I found ourselves choosing a neighborhood. We faced down the trade-offs about lifestyle, neighbors, cost of everything and what we wanted for our kids. My conclusion:

So much of our sense of contentment as adults is about outcomes vs. expectations that were set in our youth.

I grew up without a lot (but enough). The only time I spent at a country club was the 7 years I worked at one. I had a job of some sort nearly everyday since I was 13. My first car was such a piece of crap that I tied an old boom box to the head rests with twine to have music ("you might be a red neck if..."). I borrowed to go to college and worked my tail off to pay it off. I never expected to make much money but wanted to achieve stability for my family and (thankfully) was able to achieve that.

I'm a very contented person because compared to what I was trained to expect in my youth, I'm doing great. I'm confident because I've handled most things on my own (with my spouse). I've never relied on OPM to make my lifestyle work.

When my income/assets went beyond "stable" and into "choices" we had to stare down our priorities.

One thing that occurred to me was whether I was setting up my kids for a life of contentment if I set their expectations (cars, clubs, etc.) such that they would need a top 5% income to support the lifestyle? Would they feel like failures if they were "only" top 10 percent and couldn't afford the lifestyle I could? Would they drive themselves into debt faking a higher lifestyle? One daughter wants to be a chef -- am I setting her up for misery if I train her that she needs to make big corporate bucks and belong to a country club so that she's not "going backwards?"

Though we could easily belong to the country club and my wife could buy a Mercedes, we decided that we wanted to establish life expectations for our kids that didn't box them into a consumption mindset.

As a result, we live hugely below our means. We live in a nice, but modest home in a stable community with good schools. Our kids have friends who are "rich" (lifestyle) and friends who live more modestly than we do. My kids earn their own spending money and are genuinely surprised if I pass them a $20 and tell them a movie with their friends is on me. (Actually, they usually turn the $20 down because they're proud they have their own money). Yes, they have iDevices but rarely new ones. Their first cars won't involve twine and bad brakes, but it will also not be the new cars some kids in the community get. (How can you ever feel good buying a used car if literally the first thing you drive is a brand new, $25k car? What does it take to give you that sense that "you made it"?). No Uggs in our house, they get Bear Paws for 1/2 the price. They know where everything is at Target. They're know beyond a doubt that we don't keep up with the Joneses and that's OK.

I relish taking them on big, life experience trips that we couldn't when I was young -- we've hiked in Yellowstone, swam under the Napali cliffs and watched the stars among the giant sequoias. When we do those things or splurge on something nice we talk A LOT about priorities, making choices to save for a vacation, etc. They know that we value shared experiences more than stuff and you have to know your priorities.

They will have it easier than I did, but they WILL NOT think you need a BMW and a country club membership to be a success. I want them to be no less contented and no less confident in their abilities than I am.

I don't have life figured out, but I would encourage you to invert your thinking for a minute:

Instead of thinking about what you want your kids to have, think about who you want them to be...and what consumption expectations they need to live up to in order to not feel like a failure? If one of your kids is a 40 year old teacher making $80k a year and driving an old Honda, will he/she feel content? Who's all the stuff really for?

You never really know how your kids turn out until they are adults, but as my daughter has gotten older she's started to figure out that we're comfortable. That said, when she came home and wanted to do a $3k exchange program, we told her she owed us $1k of it. She didn't flinch. Got a summer job and saved every $ from 1 to $1000. Didn't spent a cent on anything until it was paid...and she's really proud of it. She knows her priorities, she's confident in her ability to earn her own way. I hope she'll keep her priorities and be content.

My $0.02. Hope it's helpful.

 

[StuckinCT]

Pb4uski, great to hear some more positive experiences growing up in VT. I think I am basically a New Englander at heart and I always think of my grandmother and her cape in West Hartford growing up.

2015Maybeth, my aunt lives in La Jolla as well as my second cousins and they are definitely jet setters. I also have a second cousin in the Palisades, and more aunts and cousins in the Hillsborough area outside San Fran. I am trying to steer clear of that lifestyle, mainly because I can't afford it! I realize not everyone is like that there. I looked at a town south of Laguna and it is darn nice there, but I am not really the beach type. I agree you don't need a large home, but you are on a postage stamp. There are a lot parks etc too. Also, the real estate market in my neck of the woods has never fully recovered, I would have hoped my home would have appreciated in 5 years but I am down $100k. Wallstreet is shrinking, and General Electric and GE Capital as well as IBM are big employers here, GE is selling off the finance arm and people on Wallstreet are staying in Greenwich, Darien New Canaan for the most part these days. So selling low and buying high in CA or other hot market is a big concern.

 

[StuckinCT]

Kotoole, you literally hit the nail on the head of what my BIG concern is, setting my kids up for disappointment. I grew up on the Gold Coast in CT in Darien and while I have been fortunate, I am the exception. I can tell you of numerous failures along the lines of what you described. I believe success is a personal thing but it has to do with being fulfilled, living up to your potential and doing what you enjoy. I think there are a lot of wealthy people around here who may be failures in some senses, only they know for sure. This town we live in is dialed down considerably from the surrounding towns, but as we have settled in its hard not to be concerned when your kids think having a full time nanny is normal and many birthday parties and club parties are a magical event with horse drawn carriages like this past weeks Halloween festival. Luckily, we do have a smattering of normalcy here and it is accepted, ie the basement camping party with homemade tents. We are on the border of what's normal but interestingly, it attracts some of the super affluent who grew up like you did who don't want the Greenwich hoopla. It's like we're the town where people like to pretend their not wealthy living in an expanded colonial, yet they have a vacation home on Nantucket.

 

[purplesky]

Hi and thanks for reading. First off, this is a great site, and I am looking forward to exploring it further. The forum guidelines say to give as much info as possible on the intro so here goes. I am 44, wife is 34 and we have three healthy beautiful kids ages 6, 4 and 2. We are very family oriented and education and child development is everything to us. We live in a suburb of southwestern CT near NYC and the real estate market has never recovered. We paid 1.7mm for our house in 2010 and we would be lucky to get 1.6 now, netting 1.5 after commission fees. We have great schools but everyone does the commute and has a high stress high expense lifestyle, country clubs, au pairs, etc. we belong to a club too and we would not get our 70k initiation back if we moved. In two years, our 5/1 arm is set to float on our $1mm mortgage. We have $6,950,000 in stocks and bonds, 80% stock 20% bonds with real estate, international, small cap mid cap but primarily large cap dividend stocks. Our portfolio yield is 3.3% or $225,000. We also have $1.1mm saved for our kids college so with 125 k cars and personal assets, our net worth is 8.7 to 8.8mm. What I like about CT are the schools and programs, our high school ranked 330 in the country by U.S. News and we have one of the top swimming programs which has produced Olympic quality swimmers. Our real estate taxes are 32k and we live a comfortable life in CT w 22k for vacations, 3 cars, country club etc on 21k per month. I am at a point where I am sort of burned out on the grind and already working limited hours but the pace and the expenses still go on. I don't want to take a huge hit on the house and eat my country club initiation only 4 years ago, but I am beginning to think seriously of taking a loss on the house and moving to Fort Collins or Portland Oregon area. My wife's family is from Eugene and Portland has good schools but some of the suburbs are expensive there too and the weather stinks in the winter. I am thinking of a $900 k house. I am also thinking about Portland Maine and Burlington VT area but the winters here are so brutal and my wife is not a skier. It's a real dilemma but a good problem to have. Any suggestions appreciated. I also plan to work part time or even start a business to stay busy and meet people as well as earn some extra money. Thanks again for your thoughts.

Just move and rent somewhere and test drive the area. You have the cash.

If you truly have close to $9mm you can afford to move several times before your kids are older and it becomes more difficult for them.

I would check out Park City Utah.

 

[Closet_Gamer]

Kotoole, you literally hit the nail on the head of what my BIG concern is, setting my kids up for disappointment. I grew up on the Gold Coast in CT in Darien and while I have been fortunate, I am the exception. I can tell you of numerous failures along the lines of what you described. I believe success is a personal thing but it has to do with being fulfilled, living up to your potential and doing what you enjoy. I think there are a lot of wealthy people around here who may be failures in some senses, only they know for sure. This town we live in is dialed down considerably from the surrounding towns, but as we have settled in its hard not to be concerned when your kids think having a full time nanny is normal and many birthday parties and club parties are a magical event with horse drawn carriages like this past weeks Halloween festival. Luckily, we do have a smattering of normalcy here and it is accepted, ie the basement camping party with homemade tents. We are on the border of what's normal but interestingly, it attracts some of the super affluent who grew up like you did who don't want the Greenwich hoopla. It's like we're the town where people like to pretend their not wealthy living in an expanded colonial, yet they have a vacation home on Nantucket.

Yep...at one level it's all relative. If you have a Nanny and I don't, I'm really roughing it. All the more reason to get the **** away from the Nanny and Country Club set. If the kids start thinking that because they have to use used Pings you're an evil parent, you're screwed!

At another, I try to consider absolutes as in "what is the absolute amount of money you need to earn to maintain my lifestyle? Is that an amount of money I think it's reasonable to expect my kids will earn?" If not, reduce lifestyle. Repeat.

Suggestion if you keep the club: the best teen aged member of the club I worked at was a kid who's Dad made him caddy at another club for every time he wanted to use the club I worked at. He was uniformly polite and NEVER asked us to do something for him. He was so kind that even though we were working kids the same age as him, after a couple years we actually would offer to carry his bag when he played with his Dad. He'd be embarrassed the entire time. Great kid.

Other suggestion: dump the club.

 

[marko]

Also, the real estate market in my neck of the woods has never fully recovered, I would have hoped my home would have appreciated in 5 years but I am down $100k.

My personal feeling is that with $7MM in invested assets and a $1.5MM take-away from a house, another $1MM socked away for college, that taking a $100K bath on the house would be a small price to pay for getting out from under all the negatives you describe.

I'm sure hoping that is not a significant item in the decision making process, but you've mentioned it more than once.

If I'm reading it correctly, your NW is something like $8-$9MM and, respectfully, outside of a lack of imagination--or fear of jumping--, I'm trying to see what the problem is here.

 

[Music Lover]

Yep...at one level it's all relative. If you have a Nanny and I don't, I'm really roughing it. All the more reason to get the **** away from the Nanny and Country Club set. If the kids start thinking that because they have to use used Pings you're an evil parent, you're screwed!

When kids never want for anything, sometimes they grow up expecting everything.

 

[rodi]

As others have mentioned lifestyle creep can come with consequences that aren't financial. That said - kids education is important. But it's possible to provide top education and emphasize family core values without spending as much.

My older son just started at the #149 US News ranked school this year. It's a public school that draws from inner city urban, as well as some suburbs. Because it's a magnet school that has more applicants than spots, we worked the system to get the boys into the feeder middle school. There's the opportunity for keeping up with the Jones' at this school - some wealthy families are there... but there's also some pretty poor families... We try to find the balance and teach the kids to be thankful for the opportunities they have.

I retired a little more than a year ago - for me, it was more important to be THERE for the kids, involved, etc. Vs spending time in an awful commute so that we could afford to keep up with the Jones. I figure I'm teaching them some lessons on real word budget concerns and to avoid a sense of materialistic entitlement.

By buying into the lifestyle creep and the keeping up with the Jones, when will the kids be taught/exposed to a 99% lifestyle. They need to be prepared to operate in the lworld the non-1%ers live in since that is where they will likely work/live when they reach adulthood. By living a more "normal" life, it won't come as a shock.

 

[Travelwanted]

StuckinCT -

Free advice, so worth your admission fee to the board, but here's a few thoughts:

Like you, I'm 44 and have a couple of kids who are jobs #1 and #2 in my life. My net worth isn't yours, but we're comfortable by any definition.

Some years back, I moved across the country to take one of those high stress/high pay jobs and my wife and I found ourselves choosing a neighborhood. We faced down the trade-offs about lifestyle, neighbors, cost of everything and what we wanted for our kids. My conclusion:

So much of our sense of contentment as adults is about outcomes vs. expectations that were set in our youth.

I grew up without a lot (but enough). The only time I spent at a country club was the 7 years I worked at one. I had a job of some sort nearly everyday since I was 13. My first car was such a piece of crap that I tied an old boom box to the head rests with twine to have music ("you might be a red neck if..."). I borrowed to go to college and worked my tail off to pay it off. I never expected to make much money but wanted to achieve stability for my family and (thankfully) was able to achieve that.

I'm a very contented person because compared to what I was trained to expect in my youth, I'm doing great. I'm confident because I've handled most things on my own (with my spouse). I've never relied on OPM to make my lifestyle work.

When my income/assets went beyond "stable" and into "choices" we had to stare down our priorities.

One thing that occurred to me was whether I was setting up my kids for a life of contentment if I set their expectations (cars, clubs, etc.) such that they would need a top 5% income to support the lifestyle? Would they feel like failures if they were "only" top 10 percent and couldn't afford the lifestyle I could? Would they drive themselves into debt faking a higher lifestyle? One daughter wants to be a chef -- am I setting her up for misery if I train her that she needs to make big corporate bucks and belong to a country club so that she's not "going backwards?"

Though we could easily belong to the country club and my wife could buy a Mercedes, we decided that we wanted to establish life expectations for our kids that didn't box them into a consumption mindset.

As a result, we live hugely below our means. We live in a nice, but modest home in a stable community with good schools. Our kids have friends who are "rich" (lifestyle) and friends who live more modestly than we do. My kids earn their own spending money and are genuinely surprised if I pass them a $20 and tell them a movie with their friends is on me. (Actually, they usually turn the $20 down because they're proud they have their own money). Yes, they have iDevices but rarely new ones. Their first cars won't involve twine and bad brakes, but it will also not be the new cars some kids in the community get. (How can you ever feel good buying a used car if literally the first thing you drive is a brand new, $25k car? What does it take to give you that sense that "you made it"?). No Uggs in our house, they get Bear Paws for 1/2 the price. They know where everything is at Target. They're know beyond a doubt that we don't keep up with the Joneses and that's OK.

I relish taking them on big, life experience trips that we couldn't when I was young -- we've hiked in Yellowstone, swam under the Napali cliffs and watched the stars among the giant sequoias. When we do those things or splurge on something nice we talk A LOT about priorities, making choices to save for a vacation, etc. They know that we value shared experiences more than stuff and you have to know your priorities.

They will have it easier than I did, but they WILL NOT think you need a BMW and a country club membership to be a success. I want them to be no less contented and no less confident in their abilities than I am.

I don't have life figured out, but I would encourage you to invert your thinking for a minute:

Instead of thinking about what you want your kids to have, think about who you want them to be...and what consumption expectations they need to live up to in order to not feel like a failure? If one of your kids is a 40 year old teacher making $80k a year and driving an old Honda, will he/she feel content? Who's all the stuff really for?

You never really know how your kids turn out until they are adults, but as my daughter has gotten older she's started to figure out that we're comfortable. That said, when she came home and wanted to do a $3k exchange program, we told her she owed us $1k of it. She didn't flinch. Got a summer job and saved every $ from 1 to $1000. Didn't spent a cent on anything until it was paid...and she's really proud of it. She knows her priorities, she's confident in her ability to earn her own way. I hope she'll keep her priorities and be content.

My $0.02. Hope it's helpful.

Excellent post.


As a relatively well-off parent, the struggle is to balance giving to your kids things and experiences without taking away their drive or incentive in life or allowing them to think things equate to worth or happiness. No doubt a keeping up with the Jones' lifestyle is not for us, even if we can afford it more than those that do it. I buy what I want, because I want it, not because of what someone else has or thinks of it.

But, I think values you instill in your kids supersede these material issues. I am not advocating you keep the club and lifestyle, but consider growing up "middle class" doesn't guarantee anything either. In other words, your lifestyle isn't this main issue IMHO. Your involvement in their lives and instilling character is. There is no sin in enjoying some of the finer things in life. Only you can decide what that means for you and your family.

The key is, regardless of lifestyle, you don't allow yourself or yours kids to buy into the myth that it makes you better. Stay humble and grounded - that is where it's at. It seems to me this point is lost on lots of people.

 

[StuckinCT]

Just move and rent somewhere and test drive the area. You have the cash.

If you truly have close to $9mm you can afford to move several times before your kids are older and it becomes more difficult for them.

I would check out Park City Utah.

Great suggestion, I love Alta and Park city, but never crossed my mind as far as living there. I'll check it out. Also, the kids ages are another motivating factor, it would be great to be settled in by the time our oldest starts first grade.

 

[StuckinCT]

Yep...at one level it's all relative. If you have a Nanny and I don't, I'm really roughing it. All the more reason to get the **** away from the Nanny and Country Club set. If the kids start thinking that because they have to use used Pings you're an evil parent, you're screwed!

At another, I try to consider absolutes as in "what is the absolute amount of money you need to earn to maintain my lifestyle? Is that an amount of money I think it's reasonable to expect my kids will earn?" If not, reduce lifestyle. Repeat.

Suggestion if you keep the club: the best teen aged member of the club I worked at was a kid who's Dad made him caddy at another club for every time he wanted to use the club I worked at. He was uniformly polite and NEVER asked us to do something for him. He was so kind that even though we were working kids the same age as him, after a couple years we actually would offer to carry his bag when he played with his Dad. He'd be embarrassed the entire time. Great kid.

Other suggestion: dump the club.

So true on so many levels. My daughter at 5 has already figured out the pro shop and our member number for post clinic lunches and snacks. One thing I like about our club is that the children of members are allowed to caddie, which has a dual purpose. It's a slippery slope.

 

[StuckinCT]

I have been living in Portland for more 30 years. All my family love Portland. But it rains a lot, please don't come

Well, my wife grew up in Eugene and her family runs Oregons oldest rafting company so I can sort of glom onto them otherwise I would really stick out.

 

[petershk]

I'm in a bit of a similar situation though at a different scale (40 w about 4m in liquid net worth). Big difference is DW and I have deliberately stayed far away from the temptation of comparative lifestyle upgrade. We're in Socal so the scale is similar to the area you're in. We have an "average house" about 900k. All my neighbours drive Hondas and Toyotas worry about retirement and job security, and are as far as I know mostly far away from FI. Makes it easy to avoid upgrade itis.

Schools in my area are very good public schools which are fairly uncommon in this area. We used those two things as criteria.

I have colleagues that live in rich areas of Santa Monica, palusades, the hills, etc. We could conceivably join but want to avoid it.

Kids are 1 and 3 and we want them normal.

Personally I value time more than money so we've tuned our life as such. I enjoy work but can walk away with essentially 0 concern.

My advice is stack rank your priorities, then write what % of time you spend relative to perceived value and then change life accordinly. Try to avoid as much justification or guilt.

Honestly I think if you really enjoy country clubs and fancy stuff... Don't let guilt cause you to do something else. And vice versa.

For myself I found by staying miles away from that my life is just way better but it's a personal choice.

Also... Don't put it off. At your net worth work is purely optional (depending on lifestyle choice ). If you delay making your life what you want it's like what Buffett says... You're saving up sex for old age . Don't do it.

Also I think kids are super aware and flexible. If you think you can do something you dislike now to get a benefit later they will behave the same way and at 28 will take careers they dislike so they can afford to be happy later . Conversely if you take a more austere life out of guilt your kids will learn thta their life decisions should be motivated by guilt. At least that's my observation.

So I'd say... Take time and be really honest with yourself and then take action sooner and not later. We're lucky enough to do that lets not be stupid enough not to

Sent from my HTC One_M8 using Early Retirement Forum mobile app

 

[StuckinCT]

Hi StuckinCT, we are the same age with a similar net worth so I can relate. Something clicked for me a few years ago as I was amassing some wealth, the money I was making was not translating into additional happiness. I started questioning what was really important to us and came to the conclusion that the high-end lifestyle wasn't right for our family. It just didn't fit with our core values. I was lucky enough to have several very high earning years so the spending habits hadn't had time to take hold. It's a slow progression that happens over many years of higher and higher earnings.

It might be helpful to breakdown what is really important and what really matters to you and your family. I'm reading a lot of justifications for your current lifestyle. Try to look at your lifestyle objectively, you might be surprised at what you find. Lifestyle habits are tough to break but I'm just sensing that you are already in the questioning phase...?

I think daylate has some great suggested reading. I'd suggest you check out Mr. Money Mustache — Early Retirement through Badassity as well. You might not be willing to retire on 25k per year like MMM but there are some very thought provoking articles about going against the spending=more happiness trap that many of us get ourselves into.

One point you brought up is the "quality" of education, swim programs and school rankings as a reason to stay. To be blunt, this is just nonsense. Your kids might develop connections that would help them climb the corporate ladder later in life but I doubt any of that will make them more grounded or happier as adults. Time with your kids is probably the best education you can give them. It allows you to emphasis what is most important in life.

Mr. Money Mustache is the man, I really actually envy extreme frugality. At the same time, I realize I will probably never be like him but it does not mean I or we all can not incorporate some of that line of thinking. Believe it or not, we are very budget minded and rarely deviate outside of our monthly and bi weekly spending allotment. But you said something that really hit home with me about a month or so ago, and that is that consuming more or buying more stuff wasn't making me any happier. For a while, the new German car or luxury watch provided a thrill. But I caught myself one night looking at more stuff and I finally just said to myself, this isn't going to make me any happier. Believe it or not, it was an unsettling experience because all of my life I was programmed to want more stuff and do the things necessary to get it. Without that justification, that was previously unquestioned, it was almost like what is the point. Sure I have other interests but I will admit what consumed me was getting all the fancy stuff to prove something either to myself or others. But the thing I realized is that no one really cares and if it isn't making me happy, it actually was bringing me down. I think now it is getting in the way of a more outdoor lifestyle, I have always loved the outdoors, the seasons, nature etc. I also love history, current events etc, I mean it's sounds silly but there are so many things higher up on the hierarchy of what is important, who cares what is sitting in the driveway. I think having a nice home though is important, cars these days are all pretty much the same apart from the connotation.

 

[marko]

For a while, the new German car or luxury watch provided a thrill. But I caught myself one night looking at more stuff and I finally just said to myself, this isn't going to make me any happier. Believe it or not, it was an unsettling experience because all of my life I was programmed to want more stuff and do the things necessary to get it. Without that justification, that was previously unquestioned, it was almost like what is the point of my life? Sure I have other interests but I will admit what consumed me was getting all the fancy stuff to prove something either to myself or others. But the thing I realized is that no one really cares and if it isn't making me happy, it actually was bringing me down. I think now it is getting in the way of a more outdoor lifestyle, I have always loved the outdoors, the seasons, nature etc. I also love history, current events etc, I mean it's sounds silly but there are so many things higher up on the hierarchy of what is important, who cares what is sitting in the driveway. I think having a nice home though is important, cars these days are all pretty much the same apart from the connotation.

This is sounding like a breakthrough! A bit different from your opening post.

Could it be that the inputs here over the past week have helped you solidify what you already knew in your heart but maybe just needed some validation?

 

[OrcasIslandBound]

Dear StuckinCT, one thing that I have not seen addressed in all these posts is the fact that in your very first post, you mentioned that you are 80% in stocks. I personally decided to be about 45% in stocks during my DW's and my future retirement. I'm satisfied with about 6% return and prefer the lower overall volatility.

Also, I happen to live in one of the North San Diego County cities, Poway. The schools are great compared to almost any other city in North San Diego County except perhaps rancho Santa fe. Still, I would plan on sending the kids to private schools here.

The values you teach your kids personally will go farther than any public or private school can do for them.

One last thing : we're heading out of socal because of the crowded freeways among other reasons. The drivers are just crazy here.

Sent from my Nexus 4 using Early Retirement Forum mobile app

 

[StuckinCT]

This is sounding like a breakthrough! A bit different from your opening post.

Could it be that the inputs here over the past week have helped you solidify what you already knew in your heart but maybe just needed some validation?

Marko, no doubt this has been extremely helpful and supportive. I appreciate it. One thing I will say though is that the country club thing is not really the problem, I love golf and nice golf courses, and I also like paddle sports. It's not really the issue, though the expense is part of it. I think the issue is more where I am personally, it no longer aligns with slugging it out on Wallstreet, whether because I have accumulated sufficient assets or whether I have become more self actualized it doesn't matter. It is what it is.

 

[folivier]

Wants vs. needs.
Which is different for everyone but the sooner you can identify it the more control you will have over your expenses.
We were talking with our youngest son who's 25 about his girlfriend and he is concerned about her spending. He's an architect she just started working as a licensed dietician. Hopefully he can help her understand this.

 

[StuckinCT]

Dear StuckinCT, one thing that I have not seen addressed in all these posts is the fact that in your very first post, you mentioned that you are 80% in stocks. I personally decided to be about 45% in stocks during my DW's and my future retirement. I'm satisfied with about 6% return and prefer the lower overall volatility.

Also, I happen to live in one of the North San Diego County cities, Poway. The schools are great compared to almost any other city in North San Diego County except perhaps rancho Santa fe. Still, I would plan on sending the kids to private schools here.

The values you teach your kids personally will go farther than any public or private school can do for them.

One last thing : we're heading out of socal because of the crowded freeways among other reasons. The drivers are just crazy here.

Sent from my Nexus 4 using Early Retirement Forum mobile app

OrcasIslandbound, yes I appreciate the input on the allocation. With dividend paying stocks, as long as the dividends continue to be paid and increase, the volatility should not bother you if you truly live off of the income, ie you are not dependent on principal or distributions which involve selling potentially into adverse market conditions. Even in the financial crisis you saw only a 10-20% income reduction. If you are younger than 55, I would advise at least 60% stocks, and probably closer to 65% stocks as bonds are a guaranteed loss in real terms with a few exceptions. Real estate and alternatives also have a place but I will point out that the expected return on a 45% stock portfolio for the next ten years is definitely less than 6%. I would guess it is closer to 5%. It doesn't sound like much but it is a huge difference. We have an expected return of roughly 7.3%. I used 8.5% return expectations for equities, 11% small cap, 7.5% real estate and for bonds I assume 2.5%, which actually may be too high. I find a 4-6% income increase each year worth the volatility, even with the companies that are 20% overvalued, I'm not smart enough to know when they'll correct and I have substantial capital gains so selling is expensive. The funny thing is, this latest bout of volatility really cemented the fact that I can retire, even being down $800k at the bottom and still off $400k from the peak, I realized that it doesn't really impact my lifestyle at the end of the day and the volatility is the premium I pay for higher return expectations.

 

[marko]

I think the issue is more where I am personally, it no longer aligns with slugging it out on Wallstreet, whether because I have accumulated sufficient assets or whether I have become more self actualized it doesn't matter.

Congratulations! Identifying the problem is 90% of the solution.

You should consider yourself lucky; so many of your peers end up in a bad place (you know what I"m talking about) because they haven't been able to face what you've just said.

Good Luck!

 

[Closet_Gamer]

Excellent post.


As a relatively well-off parent, the struggle is to balance giving to your kids things and experiences without taking away their drive or incentive in life or allowing them to think things equate to worth or happiness. No doubt a keeping up with the Jones' lifestyle is not for us, even if we can afford it more than those that do it. I buy what I want, because I want it, not because of what someone else has or thinks of it.

But, I think values you instill in your kids supersede these material issues. I am not advocating you keep the club and lifestyle, but consider growing up "middle class" doesn't guarantee anything either. In other words, your lifestyle isn't this main issue IMHO. Your involvement in their lives and instilling character is. There is no sin in enjoying some of the finer things in life. Only you can decide what that means for you and your family.

The key is, regardless of lifestyle, you don't allow yourself or yours kids to buy into the myth that it makes you better. Stay humble and grounded - that is where it's at. It seems to me this point is lost on lots of people.

Thanks.

Totally agree that Middle Class definitely doesn't = risk free. We've all seen good kids from all sorts of backgrounds and complete idiots from all sorts of background. On balance, think I've seen more reckless/feckless behavior among kids living among a lavish lifestyle than not.

To your point on values, totally agree, tho I've always had concerns about my ability to project those values while indulging more nice things and not accidentally lure them into thinking they need a new iPhone every 12 months. I want my kids to have their own ramen noodle years and not think its a punishment but rather it's just life. That's just me tho and my concerns about managing my own situation.

I think the root of it is to teach your kids grit and determination -- high standards and ability to see things thru even when they get knocked down -- and have them understand that the financial rewards that may come with that are a nice by-product but not an end unto themselves. That financial security creates a freedom and ability to take risks that shouldn't be compromised by expanding lifestyle to means. That it's also ok to pursue something with modest financial rewards but then be comfortable living that more modest lifestyle.

For all that, a friend once told me "If you're worrying about being a good parent, odds are you're doing great." I think that's very applicable to everyone posting on this chain