New member and a question

S

sewang

Dryer sheet wannabe
Joined
Jan 28, 2014
Messages
21
Hi there,

I am a new member here. I see people claim " I am FIRE" here. How do I know
if/when I am "FIRE"?

Both my wife and I are 47 and have about 5 million NW including primary residence(worth 1.1 million). Among investable money, 1/3 of money is investment properties, 1/3 in retirement account,
the other 1/3 in after-tax account.
My goal is to retire in 7 years when my son graduate from college. I don't feel my current passive income(5k from rent and 3k from muni bonds) is enough to cover my expense in northern CA. If I lose my job, I will have to buy health insurance for whole family, etc. And who knows what can happen in the future, the market can tank, house markets can crash again. I don't want to
try to find a job when I 'm in 50s because money is depleted.

When can I confidently say I'm done and move on to the next stage where I want to break 80 in my golf game?

thx in advance
 
sewang said:
Hi there,

I am a new member here. I see people claim " I am FIRE" here. How do I know
if/when I am "FIRE"?

Both my wife and I are 47 and have about 5 million NW including primary residence(worth 1.1 million). Among investable money, 1/3 of money is investment properties, 1/3 in retirement account,
the other 1/3 in after-tax account.
My goal is to retire in 7 years when my son graduate from college. I don't feel my current passive income(5k from rent and 3k from muni bonds) is enough to cover my expense in northern CA. If I lose my job, I will have to buy health insurance for whole family, etc. And who knows what can happen in the future, the market can tank, house markets can crash again. I don't want to
try to find a job when I 'm in 50s because money is depleted.

When can I confidently say I'm done and move on to the next stage where I want to break 80 in my golf game?

thx in advance
Click to expand...
Hi sewang. Welcome to the forum.

Could you copy and paste your post in a new thread in the "Hi, I am ..." forum? It will help us get to know you.
 
I moved the posts to a new thread.
 
Welcome.

At age 47 and with a NW of $5MM, you are ready to be a FIRE if you can control your spending. If you can't, keep working. It's a question of your priorities.

We have people happily FIREd with very little in the way of assets compared to you and they are very happy with their financial situation. We have people with millions in assets still employed because they either like their position or, as you worry, it won't be enough. It's the old question -- "How much is enough?"

Look at cutting your expenses. Consider moving to a lower cost of living area. Manage your portfolio risk. If that isn't what you want to do, I hope you enjoy doing what you do.
 
Welcome sewang. Is your name related to golf (not to be confused with scha-Wang!)? I joined this forum at your age and now 3 years later, I have a much better defined plan and I'm equipped with some nice tools courtesy of this awesome forum, to include firecalc and ********. Currently a few years out from FIRE and the wife is tracking spending in a spreadsheet so we can objectively see what is the outflow. As you will hear over and over on this site like a Buddhist mantra, you gotta know what your spending is to know if your assets stand a chance of carrying you 35 plus years without a paycheck. With only one child, your ER planning should be easier. With 3 kids, we have a spreadsheet that factors in college, weddings and the random meteor strike. For me personally, I think leaving the workforce earlier than 50 as a sole income provider is a little scary. And some of that depends on if you CAN you back to work at the same level (I can't, so that's a big factor). Good luck and keep posting!
 
Thanks for all the advice. I'll do some number crunching and sole searching so that I can have a clear plan. My guts feeling now is I will keep working until my son is done with college. He is a good student and studies hard. I can not imagine telling him I can not afford sending him to a top college if he is accepted.
 
sewang said:
Thanks for all the advice. I'll do some number crunching and sole searching so that I can have a clear plan. My guts feeling now is I will keep working until my son is done with college. He is a good student and studies hard. I can not imagine telling him I can not afford sending him to a top college if he is accepted.
Click to expand...

With $5MM in assets, you realize half the forum is chuckling at your concern about the cost of sending him to a "top college." I think MIT is the most expensive techincally oriented college I know of and your son could go there for four years (I think) for less than $250K. I haven't checked lately. Of course, there are plenty of schools that probably cost more. I don't believe there are any real benefits to going there versus a well ranked state school. Yes, college can cost a bundle but you have a pile.

It all comes down to lifestyle. I work with people making serious money but they are also living paycheck to paycheck. I know people doing the same work for about the same money that have millions stashed.

You sound like you aren't stressed out and ready to explode. You just wanted to know if you could qualify to FIRE. So, you have time. Read. Think. Track your expenses. Ponder a simpler lifestyle. If you decide you really don't want to trade your time for more money, you'll be ready and know what to do.
 
9 months+ after my first post. I recalculate my portfolio. My NW including primary residence is now 5.6-5.7MM, thanks to appreciating investment assets. But I am not closer to FIRE because DW wants to move up to a ~2MM house(in Bay area, this is just a decent house, not even close to my dream home), considering the extra principle/mortgage and much higher property tax. FIRE is not even in sight.
 
It sounds like you and your wife are at odds here. Does she work? Does she track expenses? Why does she want a bigger home when you are on the cusp of being empty nesters? It isn't worth giving up your freedom for a more expensive home. Time > money. We have lost several friends and family members these past few years, some younger than us.

But if a bigger nicer home is in your sights, consider living outside the Bay Area in retirement. The equivalent of my home would cost $2.5 million in Cupertino, $1.5 million in Pleasanton, but under $400K in PA.

Track your expenses, then estimate the additional expenses if the expensive home. Add self paid health insurance to your expenses, and don't forget taxes.

Also figure on top dollar for college (you can afford it). Consider other possibilities besides the most expensive schools. There is one top 20 school that gives you a lot for the price, UC Berkeley, the only public school on the list. Does your son want to or need to go to a top 20 school? One of the criteria we looked at is job placement rate after graduation. DS is almost finished with college so we'll soon see. DS has a best friend who went to a state school in PA and now has an excellent job in IT. You'll find that most people can get an excellent education and decent work without the snobbery of the best school label. Your state schools and universities are very good. Look at the best schools for his areas of interest, not just the overall ratings. collegeboard.org is very helpful.

Our situations are similar, only child, able to send DS to college of choice. Net worth similar when you don't count the house. I'm retiring the year DS finishes college (now). It is working for us.



Sent from my iPhone using Early Retirement Forum
 
sewang said:
9 months+ after my first post. I recalculate my portfolio. My NW including primary residence is now 5.6-5.7MM, thanks to appreciating investment assets. But I am not closer to FIRE because DW wants to move up to a ~2MM house(in Bay area, this is just a decent house, not even close to my dream home), considering the extra principle/mortgage and much higher property tax. FIRE is not even in sight.
Click to expand...
How long will you live? A good friend of mine decided he was going to work until he was 65 so he could max out his pension. We buried him at age 64.
 
2MM house:confused: Why not move to a lower priced area? Time is precious, you have ample funds, why not go right away? Everyone is one heartbeat away from eternity.
 
sewang said:
But I am not closer to FIRE because DW wants to move up to a ~2MM house(in Bay area, this is just a decent house, not even close to my dream home), considering the extra principle/mortgage and much higher property tax. FIRE is not even in sight.
Click to expand...
No, it isn't.

You sure this forum is where you want to hang out? Conversations here may only rub salt in your wounds.
 
If you are serious about fire you and DW have to sit down and figure out your path. With the right strategies you have been very able to fire since your first post. FIRE sure is not for everyone. If the changes you would need to make to FIRE soon sound unacceptable than you may not be a good candidate. For example you and DW love you jobs, lifestyle and would be miserable without a large home in your preferred location. Gotta do what makes you happy.
 
sewang said:
9 months+ after my first post. I recalculate my portfolio. My NW including primary residence is now 5.6-5.7MM, thanks to appreciating investment assets. But I am not closer to FIRE because DW wants to move up to a ~2MM house(in Bay area, this is just a decent house, not even close to my dream home), considering the extra principle/mortgage and much higher property tax. FIRE is not even in sight.
Click to expand...

Its all about choices. If the new house (and the resulting "happy wife") will bring you more pleasure than ER then that is absolutely fine. Its a choice and decision.

Enjoy the house and take pleasure in the small things that can bring happiness. That CAN include your j*b, and that's ok too. ER is not for everyone.
 
Being in the Bay Area as well I know that it is not always possible (or desirable) to move to a lower cost area as some suggest. However as mentioned by L&L it is about choices. Only you can decide what choice is best for you
 
Thanks for all the comments. They all sincere and helpful. We are still weighing pros and cons. We are not willing to leave all the friends and relatives here just to FIRE. We've stayed in our first home for many years. Most of our friends live in better houses with a big mortgage. Living in a bigger and newer home is very temping, especially the price can go up in the meantime. But the subsequent financial burden is also daunting. I will update once we are in a new phase in terms of FIRE.
 
You have the same Bay Area myopia as I did as does much of my family. There is much more to the world than the Bay Area. 40 years ago it was a terrific place to live and the schools were good, for the most part. Now, not so much.

One of the great things about the Bay Area is that there is much to see and do; you don't need to be in a big house to have a happy life, as you are never housebound by cold or snow. One of my Bay Area friends from age 13 retired at age 60 this year and all I see on facebook is train adventures around the country, photography, and bike rides--things he loved when he was in his teens. Not much about being at home, LOL. If your friends have prettier houses, go visit them a lot and admire their houses. They will appreciate it. Let them secretly feel sorry for you. Then in about 5 years when they are still working you will have a freedom they only dream about. You will have the last laugh as you send postcards from all over the world, if you want.

I think you have the same Bay Area or bust mentality that I had until I was in my late-30s. I never thought I could or would leave CA until I took a long road trip and visited former patients of mine in Colorado--and they clearly expressed how happy they were to leave CA. I lived in the Bay Area from birth to 39 years. DS with a learning disability was being crushed at school--he was in first grade and utterly miserable. Moved here--two days into school and he happily got on the bus, looking forward to an amazing experience called learning. I go back and look at the tiny houses with the tiny yards and the traffic. Here I look out my back window and see a wild turkey or a deer outside the fence, my own pool down below. Had to fight the ducks from adopting our pool a couple of years ago. Last night a great horned owl clattered onto my roof and hooted for about 10 minutes before taking off. I grow vegetables in the summer and I can see a ski resort from my bedroom window. We saw a bald eagle fly over a pool party last year--July 4th actually. I was a 15 minute 6 mile drive from work (now ended). In Silicon Valley the traffic between my office and the hospital was frightening.

You and your family don't know all that you're missing, just to call the Bay Area your home. With your investments, it sounds like you could be FI now, if you can and DW can tone down the house ambitions a bit, or consider living elsewhere.
 
Hi,

I see some parallels between your situation and mine - lot's of differences too - but here is where I've come out in grappling with some of these issues.

I see the issue of FIRE as breaking down into three components:

- Financial Independence = having enough money to support your lifestyle, which is a combination of how much you have and how much you spend

- Early Retirement = which may or may not happen when you reach FI - you can keep working if you like - or change jobs, etc.

- Happiness = what I, and I'm guessing a lot of folks, are really looking for from FI and RE, and also from earning and spending a lot of money - for that matter.

I had the luck :) of going through a career crises that forced me to really examine my life. I found it helpful to break my thinking into these three areas and try and address each one directly.

1) To make happiness a priority for myself and my family - independent of from how much I earn, whether I work, what I own, etc.
2) To be financially independent within 36 months (now 34 months) - combination of spending changes and staying at my career through a really difficult time (now largely resolved)
3) To stop worrying about whether or when I was going to RE (retire)

In addition to this community, which I'm very grateful for, here are some books that were useful to me:

- -- Stop Acting Rich and Start Living like a Real Millionaire by Stanley
- -- How to Retire Wild Happy and Free by Zalinski
- -- Retiring Sooner by Kirkpatrick
- -- The Power of Now by Tolle
- -- What Happy People Know by Baker and Stauth

Best of Luck!
 
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I've watched many past friends and past co workers get a bit over ambitious with nicer homes which just about always ended up hurting them financially. We've always been the hicks but have had a few new homes (no where near $mm). We are down to 1100sq ft. The very last thing I want to do is work on or up keep a large home. It's actually very nice having a small home and gives a lot more time to do the things that really make you :) like golfing! A 2mm home is over a third of your NW. That seems high but I am not as experienced as others are about $.
 
You are able to FIRE when your passive income exceeds your recurring expenses. Your expenses depend on your chosen lifestyle. Only you can determine your priorities and how to allocate your income against the cost of your chosen lifestyle.
 
Sidestep: I keep seeing Colorado pop up as a place that has alot of positive things about it, on this forum and others. Is there indeed anything special there or am I just seeing things?

With regard to OP: choose: High living costs or don't work. At the moment you are very clearly choosing the high living costs. Only you know what is right. Only thing I would advise you though is to mentally reconsider your house as an investment that will appreciate swiftly - there is no garantuee there, and in the longer run most housing investments barely keep up with inflation. Not even in the Bay area.

Also, consider sending your kids at least for one or two years to a good European university. Excellent for their development, and normally easier on the finances.
 
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I keep seeing Colorado pop up as a place that has alot of positive things about it, on this forum and others. Is there indeed anything special there or am I just seeing things?
Click to expand...

Rocky Mountain High :D

I also am someone concerned about the housing prices in the Bay Area though they did not collapse much in many places during the Great Recession the sales did slow a lot. There is only so much land around here and a lot of people which tends to keep places with good schools high. I have my budget for Fire worked out around living here since a place like Colorado, while it might work for me would not work for my wife and that's not going to change. The OP seems to be in somewhat of a similar situation (wanting to stay around because of family/friends) and that's very understandable. The increased housing if they chose to go that way will be a choice they make as many are mentioning. The choice will dictate what they can and cannot do. Just one other word of caution, make sure your choice doesn't put you into a situation where you MUST work. You are in a position now to Fire if you chose. That means you can walk away from the BS if it gets too much at work. Many cannot and have to put up with whatever crap their bosses/companies dump on them because they NEED to work.

It's always good to have options IMO
 
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