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Qualifying as FI? Can you be FI if you rely on spouse's work?
Old 07-04-2017, 10:49 AM   #1
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Qualifying as FI? Can you be FI if you rely on spouse's work?

So very long story short, later this year I will be the recipient of a windfall from a family trust distribution -- it's very generous, but not itself enough to RE, given a few factors (VHCOL area, children, etc.). However, if my wife keeps working (she doesn't hate her job the way I do) and we go on her benefits for health insurance, etc., then her take home + the anticipated dividend income from my assets in taxable get us to *just about* our annual expenses, without major frills.

I am not going to quit my job because of the windfall. But, from a psychological point of view, it will likely be very helpful in giving me the freedom to take a pay cut, even a big one, to pursue something less stressful/onerous (maybe even fun?).

So, given the information above *and* presuming my wife's job is very stable --- thoughts? FI? And as a related question, would you consider someone as FI if the family still relied on the other spouse working a job they liked?
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Old 07-04-2017, 11:22 AM   #2
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There are many FI people who continue to work, being FI does not mean you need to quit work. The best Example is: Warren Buffet.

Given your info above, yes you might consider yourself FI, but that all changes in a heart beat if your DW leaves you.

In some ways your question suggests you are counting your chickens before they hatch, stretching to get that FI label. There is simply no need to do this, as nearly everyone is FI, just at different levels of FI.
With a tent, sleeping bag, and a soup kitchen nearby nearly anyone can be FI.
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Old 07-04-2017, 11:49 AM   #3
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In my book, no, you would not be as you would not be able to support yourself solely on your assets.

You do, however, have a tremendous opportunity to change your life and that of your family.

Cowboy up, find a job that is a better match for your skills and interests than the one you have today. With a job like that you will be happier and more $$ successful. You can let the inheritance grow, add to it, and be even better situated down the road.
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Old 07-04-2017, 11:52 AM   #4
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Cleary you aren't quite FI since you say you could "just about" meet your annual expenses without your income.

I wouldn't consider a married person FI if their spouse works. If she leaves you, or loses her job, suddenly you are no longer FI. You are not financially independent when you rely on someone else.

The windfall gives you and your spouse more freedom, but that's not FI.
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Old 07-04-2017, 12:01 PM   #5
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From your description, no. You need DW income. If she was working and you did not need the income, then you would be FI.
You note that you are going to get some money coming in and getting closer to FI.. good for you. Don't get all caught up in the tag of FI. This really is not a fixed number. It depends on how much you need to live on and other things.

And as noted above you'd be hurting (FI wise) if DW left, so would many FI people. Most do not calculate that they are FI on half their assets.
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Old 07-04-2017, 12:27 PM   #6
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Obviously if you are dependent upon income not your own you are not financially independent. By definition.
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Old 07-04-2017, 03:55 PM   #7
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Agree with others here. One other thought - have you looked at expense lifestyle?

Subscription TV.
Premium cell phone plans.
Cars with payments.
Health club / golf memberships.
Eating out.
Commuting.
Chained to VHCOL location.
Many other areas to reduce cost.

You might be a little closer if there room for some discretionary trimming.

Good luck!
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Old 07-04-2017, 04:05 PM   #8
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In my book, no, you would not be as you would not be able to support yourself solely on your assets.
That!!!
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Old 07-04-2017, 05:03 PM   #9
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I think there's some merit considering yourself FI if your investments cover your half of the expenses but obviously as a family unit you're not FI if you are dependent on your wife's income.

Personally, I've set multiple FI milestones:
  • My investments can cover my half of the yearly expenses
  • Our combined investments can cover all of our yearly expenses
  • My investments can cover all of our yearly expenses
And I also have variations based on core expense (which essentially cuts our travel spend to 0) versus typical yearly spend and beyond.

I like the concept of multiple stages of Financial Independence like: Financial Security, Financial Independence, Financial Freedom, and Financial Abundance.
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Old 07-04-2017, 05:32 PM   #10
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Depends...
mostly on current age, and the ability to "go back" if it doesn't work out.

We took a chance @ age 53, and have no regrets, but it was a "together" thing... realizing that we might not make it. But we did.

Happiness is pretty important. Wouldn't trade the past 28+ years of happiness, for millions of dollars.
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Old 07-04-2017, 09:33 PM   #11
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So very long story short, later this year I will be the recipient of a windfall from a family trust distribution -- it's very generous, but not itself enough to RE, given a few factors (VHCOL area, children, etc.). However, if my wife keeps working (she doesn't hate her job the way I do) and we go on her benefits for health insurance, etc., then her take home + the anticipated dividend income from my assets in taxable get us to *just about* our annual expenses, without major frills.



I am not going to quit my job because of the windfall. But, from a psychological point of view, it will likely be very helpful in giving me the freedom to take a pay cut, even a big one, to pursue something less stressful/onerous (maybe even fun?).



So, given the information above *and* presuming my wife's job is very stable --- thoughts? FI? And as a related question, would you consider someone as FI if the family still relied on the other spouse working a job they liked?


When wives don't work and their men do, are they FI?
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Old 07-04-2017, 09:46 PM   #12
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@Dreaming...keep working. You aren't REALLY FI if you can only "almost" meet expenses if you use gains and your wife's income. To be truly FI, IMHO, you would have to be able to take care of all of your expenses if BOTH you and your DW were no longer gainfully employed. Otherwise, you are DEPENDENT on some source of employment income. You may be able to ride out a storm, such as the BS bucket at work overflowing and you had no other choice to maintain your personal sanity than to leave a toxic situation and have to be unemployed for a few months while you sought a new role. But that isn't FI...it's just a little more comfortable than most folks.
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Old 07-04-2017, 10:29 PM   #13
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When wives don't work and their men do, are they FI?
Nope. The family unit might be FI, but the non-working spouse (male/female/it) is not.
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Old 07-04-2017, 10:35 PM   #14
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Nope. The family unit might be FI, but the non-working spouse (male/female/it) is not.


Exactly. My point is he wants to be a male house wife and call it FI. Bit self serving view. Some may even say misogynistic. Nothing wrong with the situation, just don't cook a turd and then call it fine dining.
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Old 07-04-2017, 10:42 PM   #15
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So very long story short, later this year I will be the recipient of a windfall from a family trust distribution -- it's very generous, but not itself enough to RE, given a few factors (VHCOL area, children, etc.). However, if my wife keeps working (she doesn't hate her job the way I do) and we go on her benefits for health insurance, etc., then her take home + the anticipated dividend income from my assets in taxable get us to *just about* our annual expenses, without major frills.

I am not going to quit my job because of the windfall. But, from a psychological point of view, it will likely be very helpful in giving me the freedom to take a pay cut, even a big one, to pursue something less stressful/onerous (maybe even fun?).

So, given the information above *and* presuming my wife's job is very stable --- thoughts? FI? And as a related question, would you consider someone as FI if the family still relied on the other spouse working a job they liked?
If the trust distribution is not enough to RE, then you are not FI. I got a bit of a windfall in 2009 through inheritance, but it was not enough to RE, so I was not technically FI. It did speed the process though, by about 4-5 years.

You can feel relieved that your life won't turn upside down because of the increase in your nest egg, should you need to dip into it. For now, I would keep reading, and dreaming and deciding how you would change your life. But don't just quit your job.
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Old 07-05-2017, 05:16 AM   #16
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If your family isn't FI, for all intents and purposes you aren't.

You did say however that wife income + dividends + healthcare = break even. You don't have capital appreciation in there, that could bring you pretty close depending on the exact numbers.

You might also be FI if you can accept a lower COL standard.

That's roughly how I think about my own situation: I'm roughly FI at 'normal' spending levels, for sure FI at lower COL levels (move to Portugal, little travel, as a random example), not FI at higher spending levels (get a PPL, snowbird lifestyle).
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Old 07-05-2017, 05:55 AM   #17
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Nope. The family unit might be FI, but the non-working spouse (male/female/it) is not.
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Exactly. My point is he wants to be a male house wife and call it FI. Bit self serving view. Some may even say misogynistic. Nothing wrong with the situation, just don't cook a turd and then call it fine dining.
I guess I don't see this. We have always lived with all the money in one pot. We don't keep it separated. So if the family unit is FI, then we each are FI. Braking up could change FI.
If the non-working spouse inherits enough to be FI...does this mean the working spouse is not FI?

If you set it up so each spouse legally has all their assets split, then you may have a point. That is just too foreign to me.
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Old 07-05-2017, 06:01 AM   #18
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I have known couples that have had the wife go without working for years at a time, and the husband then go without working for years at a time. I don't see the difference. If those in the "couple" agree and are ok with it, then it's their business and no one else's to judge.
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Old 07-05-2017, 06:58 AM   #19
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I think in general we consider FI as not having to work... in OP's case they would not be FI since the household doesn't have sufficient assets to support them without OP's DW having to work. ETA: they may have enough on a total return basis... considering dividends only is just silly since appreciation is such a major part, albeit less stable part, of equity returns.

But that is neither here nor there... I found work was much more tolerable once I knew that I could easily survive if I was fired or resigned. I felt more free to speak up on controversial work issues but in a diplomatic way.... saying what many others on the team were thinking but did not feel comfortable saying because they sensed or knew that was not what management or the client wanted to hear... funny thing is... they loved it! and my stock went up accordingly.

So give it a try... if it doesn't work out you can always resign and go get a different job.
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Old 07-05-2017, 07:26 AM   #20
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... I found work was much more tolerable once I knew that I could easily survive if I was fired or resigned. I felt more free to speak up on controversial work issues but in a diplomatic way.... saying what many others on the team were thinking but did not feel comfortable saying because they sensed or knew that was not what management or the client wanted to hear... funny thing is... they loved it! and my stock went up accordingly.
Exactly! The OP may not have Financial Independence yet, but the household now has Financial Flexibility, which is a Big Deal, and should not be minimized. (Not that anyone here was doing that, I just wanted to make sure the OP doesn't get discouraged from not being able to apply the FI label.)
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