OK what would u do?
- Thread starter Franklin
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pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
You guys in Hawaii need to get some more cows.... I know you have the room for them.
calmloki
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Tourism is a big deal in Hawaii - can you imagine the effect on tourism a herd of Holsteins in bikinis would have? Now topless Jerseys, maybe.
Yes. I don't understand how that sample budget would be realistic in a LCOL area. $40K/yr mortgage? I just saw a listing on Zillow for a $575K house, 5/3, 3122 sq. ft., estimated mortgage of $2258/mo., property tax of $10045/yr. in a well-to-do community about 15 miles from where I live. That's high-end for this LCOL area.
Prices vary widely in the area on both existing homes and new construction, from $150K to $300+K. In some cases, the same builder will have the same model with a price variance of $100K, depending on what side of a border it's on.
We have no mortgage. Zillow estimates a mortgage on our house to be $724/mo. Our property taxes are $2667/yr. About 1900 sq. ft., more than enough for our household of 4.
Insurance for our house, 2 cars (we buy new), umbrella, is about $1300/yr.
No way do our utilities (including water) come close to $5K/yr.
Raising 2 kids hasn't cost us $20K/yr., even in years when there were significant medical expenses due to a couple of surgeries.
$15K/year in restaurants, eating out twice a week, would mean over $144 spent per meal. For how many people? Eating out is discretionary anyway.
Groceries are our biggest annual expense and don't come close to the sample budget figure for food.
$2K/yr. for cell service. Really?
Even in a LCOL area you can easily spend 700K for a high end home with some property. Insurance on an expensive home, cars and umbrella is a lot more than $1300/yr. We pay $6k and shopped around a lot. Water is a big cost in CA, probably less so than in other areas.
There has actually been a ton of research done on the cost of raising kids. When you factor in housing, transportation, childcare, etc... I would be surprised if your figures are correct. If they are, you're an outlier. The research also breaks it down by parental income level (e.g. low, middle, high), and if the OP is in the high bucket, costs would be higher. That said, my $20k estimate actually meant that my guess is that many at this income level help out their kids regularly or are gifting to grandkids 529, etc... It wasn't meant to estimate the cost of raising them.
An appetizer, couple of glasses of wine and entree, plus tip, in a nice restaurant easily hits that $ for two.
Cell svc--ours is $150/mo because of our data plan. I'd love to be paying way less!
Obviously I know people live on a LOT less and think it's admirable. My only point is that it's not that hard to get to 300k if you have a large house and associated lifestyle/expenses. And that doesn't even include flying business every month to an exotic location!
Cut-Throat
Thinks s/he gets paid by the post
For your entire cell plan? We have unlimited data on our lines. $150 is my best estimate of what it would be. Right now DH is on AT&T and I’m on Verizon and we both pay ~100/mo each for our plans. Don’t ask... the waste drives me nuts
We need unlimited data for work—have no idea how much we use now, but I tried a lower tier plan and went over. I get a lot of large data heavy emails...
Eta I think this also includes insurance for our phones. We have a bad track record there...
Cut-Throat
Thinks s/he gets paid by the post
You need to track your data and get a handle on it.
I recently signed up for Xfinity for my Cell Plan (Verizon).. It is unlimited Text and Minutes for FREE, as long as I have my internet service with them. Then I pay by the Gig. $12 a gig, but I rarely use more than the 100mb that they give you for Free... as there are plenty of Xfinity hotspots everywhere...
My wife has Tello Currently (Sprint). She pays $9 a month for 200 minutes, 200MB and Unlimited Text.... They have many different plans you can customize.
Do you live in a rural area where there is no wifi... If not download your big e-mails when you have wifi.
Another point I’d make re the housekeeper and gardener—in our area the going rate is ~$15/hr. I don’t clear anywhere near what the OP does, but I still make many multiple of this on an hourly basis. If you have a large house/lot, this work needs to be done. If working for an hour buys you 10-20+ hrs of time, that’s as close to buying time as you can get... Or you can downsize and live a little less large.
All choices, but not everyone has the same priorities. We have a big house and yard in a HCOL area. If it were solely up to me, we would have a medium place in a MCOL area and be done with work. As it is, we’re still working.
All choices, but not everyone has the same priorities. We have a big house and yard in a HCOL area. If it were solely up to me, we would have a medium place in a MCOL area and be done with work. As it is, we’re still working.
Interesting. I don’t think we have that option with cox, but I’ll look into it. I know I easily use several GB per month. It’s not an option to only download on WiFi while working. We end up traveling too much and needing access. The cost of a missed/delayed email could far far exceed any savings. But definitely an option for when we’re not working.
)And I just realized I didn’t even put the cable bill in my estimate!)
Cut-Throat
Thinks s/he gets paid by the post
Yes, another benefit of being retired.... Just spending money, no longer trying to make any.
aja8888
Moderator Emeritus
Only $8MM in the pot? Heck, go back to work and make the additional $3 MM then try for a longer contract as it will feed your ego. That kind of cash from working only comes to a chosen few, especially if you are not a thief or a politician.
That kind of cash from working only comes to a chosen few, especially if you are not a thief or a politician.
Brat
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think Franklin has two issues: one is to work with his spouse to address their high-spending lifestyles; the other is the opportunity to take a contract for a definite period.
With regard to the latter, I would go for it IF the project would be something I enjoy. It isn't just the money, it is how I want to spend my time.
With regards to the high spending lifestyle, Franklin needs to sit down with his wife to determine if they are getting value for the money they are spending. What are their joint goals, how do they want to spend their time on this earth? Emphasize the goal of leaving her well provided should you pass first. One potential problem is that if you take on the contract you may not have enough time to work on this transition.
With regard to the latter, I would go for it IF the project would be something I enjoy. It isn't just the money, it is how I want to spend my time.
With regards to the high spending lifestyle, Franklin needs to sit down with his wife to determine if they are getting value for the money they are spending. What are their joint goals, how do they want to spend their time on this earth? Emphasize the goal of leaving her well provided should you pass first. One potential problem is that if you take on the contract you may not have enough time to work on this transition.
Yes, another benefit of being retired.... Just spending money, no longer trying to make any.
Ha! I should put you to work on the rest of our post-retirement budget! If we could shave 20k off in ways that don’t majorly impact our lifestyle, we could go now!
gwraigty
Thinks s/he gets paid by the post
Even in a LCOL area you can easily spend 700K for a high end home with some property. Insurance on an expensive home, cars and umbrella is a lot more than $1300/yr. We pay $6k and shopped around a lot. Water is a big cost in CA, probably less so than in other areas.
There has actually been a ton of research done on the cost of raising kids. When you factor in housing, transportation, childcare, etc... I would be surprised if your figures are correct. If they are, you're an outlier. The research also breaks it down by parental income level (e.g. low, middle, high), and if the OP is in the high bucket, costs would be higher. That said, my $20k estimate actually meant that my guess is that many at this income level help out their kids regularly or are gifting to grandkids 529, etc... It wasn't meant to estimate the cost of raising them.
An appetizer, couple of glasses of wine and entree, plus tip, in a nice restaurant easily hits that $ for two.
Cell svc--ours is $150/mo because of our data plan. I'd love to be paying way less!
Obviously I know people live on a LOT less and think it's admirable. My only point is that it's not that hard to get to 300k if you have a large house and associated lifestyle/expenses. And that doesn't even include flying business every month to an exotic location!
My point is that the OP has said that he intends to relocate to a LCOL area. I am located in such an area, so I'm using real life examples from this area. If the OP - or anyone else, since the OP seems to have bailed on his thread - finds the info helpful, fine. If not, that's OK, too.
I am certain that my figures are correct. I handle the finances in our household.
Housing - we moved from a $60K 3/1 1000 sq. ft. house about 25 miles west to a $131K 4/1.5 1900 sq. ft. house in 1996. Property taxes are as I stated in post #61. Recent home sales for this exact model have been $180K+.
Utilities - gas/electric are less than $100 most months of non-extreme weather and can run over $100 in extreme heat/cold. Electric bill received today is $71 and change. Water/sewer/garbage pickup bill is around $100 - $120/mo. Cable internet - $65.99/mo.
This is with 3 people home most of the daylight hours 5 days/week and 4 on the weekends.
Transportation costs are negligible. We're 2 miles from my husband's work. I'm a SAHM/SAHW. Super Walmart is 1 mile from our house. Currently, I'm temporarily helping someone with transportation needs, driving about 60 miles 4 or 5 days each week. I'm spending less than $20/week in gas.
Childcare - no costs. I'm a SAHM/SAHW. I haven't worked outside the home since shortly before we married in 1992. That very well may make me an outlier. So be it. But yes, going on vacation with 4 instead of 2 is more expensive.
I don't think research necessarily accounts for people who don't buy more house than they can afford, have no childcare costs, live extremely close to work and shopping, don't eat out frequently, cook most of their meals at home, etc.
A recent meal for 4 people to celebrate our daughter's birthday at a nice restaurant was $164.92, including tip, 4 adult entree's, 1 cocktail, 2 appetizers, and 4 desserts. We had enough leftovers to eat for another day off of it.
Cell - we don't need much of a data plan. We use prepaid service. We're not avid phone conversationalists. Our cell costs are negligible. We don't spend in a year what you're spending in a month.
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Cut-Throat
Thinks s/he gets paid by the post
Ha! I should put you to work on the rest of our post-retirement budget! If we could shave 20k off in ways that don’t majorly impact our lifestyle, we could go now!
We spend far more money now that we're retired than when we were working... We have a lot more time to spend money now! And the Biggest budget item when we were working was 'Saving for Retirement'. Now we just spend that $$$$$.... We used to take a few weeks of vacation a year and go someplace warm.... This year it's 3 months in Hawaii.
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I am surprised by some of the snarky responses to the OP, whose question seemed perfectly reasonable. Surely, there is nothing wrong with having accumulated $8mm or more. Nor is there anything wrong with wanting to spend $300k per year (or, for that matter, $3 million per year).
A guy has lost some value in his portfolio, which raises questions about his ability to safely continue to spend what he would like to spend and at the same time has an opportunity to go back to work for a couple of years and make some good money. He comes here looking for guidance and input. Seems perfectly reasonable. Maybe there are people here who are jealous of this guy's success?
In any event, to the OP, my suggestions would be:
(1) think about your asset allocation because you don't want to go through unnecessary stress every time the market falls -- this will not be the last, or the biggest, drop in the equity markets.
(2) have a conversation with your wife about your family spending going forward. That does not mean, of course, that you can dictate the spending levels. She has a say too. But you should try, to the extent possible, to get on the same page.
(3) think about how painful it would be to cut your spending by, say, 20%. If that is not a huge big deal to you, then going back to work might not be necessary. You can always cut spending if your portfolio substantially shrinks. OTOH, if you would really really hate to have to do that, under any circumstances, then maybe making the extra money would be good - will give you an extra margin of safety and added comfort and peace (though, of course, at a cost of some lost free time).
(4) if you would hate doing the work for 2 more years, then don't do it. Life is short and uncertain. But maybe it would be fun -- especially since you know you could quit at any time. And I bet you probably like the business. In any event, be honest with yourself about whether you would -- or would not -- enjoy the work.
(5) try to worry less. It is not good for your health. One of the things you have earned through your professional success is the right to relax and enjoy. I try to tell myself the same thing. Under any set of circumstances, and regardless of whether you work or not, you will be fine...
A guy has lost some value in his portfolio, which raises questions about his ability to safely continue to spend what he would like to spend and at the same time has an opportunity to go back to work for a couple of years and make some good money. He comes here looking for guidance and input. Seems perfectly reasonable. Maybe there are people here who are jealous of this guy's success?
In any event, to the OP, my suggestions would be:
(1) think about your asset allocation because you don't want to go through unnecessary stress every time the market falls -- this will not be the last, or the biggest, drop in the equity markets.
(2) have a conversation with your wife about your family spending going forward. That does not mean, of course, that you can dictate the spending levels. She has a say too. But you should try, to the extent possible, to get on the same page.
(3) think about how painful it would be to cut your spending by, say, 20%. If that is not a huge big deal to you, then going back to work might not be necessary. You can always cut spending if your portfolio substantially shrinks. OTOH, if you would really really hate to have to do that, under any circumstances, then maybe making the extra money would be good - will give you an extra margin of safety and added comfort and peace (though, of course, at a cost of some lost free time).
(4) if you would hate doing the work for 2 more years, then don't do it. Life is short and uncertain. But maybe it would be fun -- especially since you know you could quit at any time. And I bet you probably like the business. In any event, be honest with yourself about whether you would -- or would not -- enjoy the work.
(5) try to worry less. It is not good for your health. One of the things you have earned through your professional success is the right to relax and enjoy. I try to tell myself the same thing. Under any set of circumstances, and regardless of whether you work or not, you will be fine...
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pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
+1 Totally unnecessary snarkiness. If he had taken 20% of his numbers and said he had $1.6m, spend was $60k/year and he could go back to work and earn $300k for two years work I wonder how the responses would have differed.
Cut-Throat
Thinks s/he gets paid by the post
Or how about $1.6 Billion, spend was $60 Million/year and he could go back to work and earn $300 Million for two years work. I wonder how the responses would have differed.
OP
OP
Franklin
Recycles dryer sheets
Well I have not bailed on this post and appreciate everyones opinions (even the snarky ones). I do find it funny that most of the post seem to boil down to cell phone cost, milk prices etc. I had a legitmite question that I valued the forums thoughts. Some posters do seem to have an issue when a member takes the time to share their number and they are higher than their own. No need for that if we are honest with each other.
Now to answer some questions. I am spending today to maintain 2 expensive houses. One will be sold by mid year and the equity will payoff the balance on the other and add a decent amount to my portfolio. This will save taxes, interest, insurance , and upkeep on a $2.5MM house. That cuts the annual spend by $50K. The move is to a lower cost area with no mortgage. Have already gone over all this with DW and she understands in inflow and outgo. Time will tell whether this works. I did reduce my AA to about 50/50 but I may get more conservative. The swings, while small in percent, scare me when I look at real dollars.
Regarding taking the offer, I have mixed emotions. If money was not in the discussion I would not take the offer. My only hesitation was and is how much money might get my attention. That is a reasonable question!
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What would I do. First, let me put myself in your shoes as money is relative. $3M on $8M is a 37% increase. I have $2M so a 37% increase would be about $750K. If I could get that in two years, I’d likely do it. That assumes I’m healthy and there is no pressing issue on my time (like a sick parent . . .). It also assumes that you like your job. Mine was okay so it would not suck to go back. I didn’t love it, but it didn’t suck. For me to get $750,000 gross, I would have had to work close to 4 years, but I went part time so at part time it would have been closer to 6 years.
But here’s the real reason. $750K would change my life. It would allow me to snowbird in a much better style than I’m likely to ever be able to afford. Not high end, but nice. Will $3M change your life in any meaningful way? At my end of the financial spectrum, it’s hard to see that it would, but only you can answer that. If it just bought security, I’d pass. No one is ever more than one catastrophe away from a drastic financial change in their life so chasing security is, IMHO, foolish.
That’s what I would do. Let us know what you end up deciding.
But here’s the real reason. $750K would change my life. It would allow me to snowbird in a much better style than I’m likely to ever be able to afford. Not high end, but nice. Will $3M change your life in any meaningful way? At my end of the financial spectrum, it’s hard to see that it would, but only you can answer that. If it just bought security, I’d pass. No one is ever more than one catastrophe away from a drastic financial change in their life so chasing security is, IMHO, foolish.
That’s what I would do. Let us know what you end up deciding.
bigcmagor
Recycles dryer sheets
+1 Second this motion.
CardsFan
Thinks s/he gets paid by the post
Thanks for coming back! Most of us are guilty of snarky comments from time to time, but in the end the more serious comments seem to shine through. I think pb4uski's comment below hits the nail on the head.
The bottom line, at least to me, is: will you enjoy the job, or will you dread it? Your WR is perfectly reasonable, you will have SS coming on-line when you choose, and it is likely that the spend rate will decline in 10-20 years.
That said, thinking about the offer is also perfectly reasonable. If I had the opportunity to work 2 more years for 35% of my current assets I would have to think hard about it.
The answer would probably be no, but in reality, there is no way I could get that kind of offer based on what I did for a living. So it is easy to say no.
Good luck no matter what your decision, and keep tuning in here. It can be very entertaining
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SunBlueSky
Recycles dryer sheets
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I'm just curious how anyone can willfully spend $300,000 a year, and be worried they don't have enough with only 8MM in investments ?
It depends on if you WANT to work, because cutting a few corners would easily cut your expenses in half.
It depends on if you WANT to work, because cutting a few corners would easily cut your expenses in half.
