Hello - late twenties, not sure on ERE

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billc
Posts: 94
Joined: Fri Dec 09, 2011 4:13 am

Post by billc »

Hey all,
I've been lurking for awhile. Please tolerate a bit of a long story before I get to my question.
I followed a link to an MMM post about 2-3 months ago and I've been following his blog and this forum since then.
I'm a 27, living in Washington DC area. I got married to my wife in May 2011 and we still haven't really organized a financial plan.
I personally have very few wants. While dating, my now wife said she would stop coming to my apartment until I gave up my twin air mattress for a real bed. Nonetheless, my cost of living has crept up quite a bit over the past few years of living together.
When I found MMM and ERE it all clicked. I always knew it was possible to spend far less than my peers - I just needed to see it happening "in the wild" to know it's a lifestyle I would like to lead.
My wife is not so interested. She is not a crazy spender by typical standards. Her views would probably best be summarized by saving about 5-10% in a 401k, have an emergency fund, and don't go into credit card debt. Use nearly all of salary to afford nice house, clothes, etc.
I currently make (pre-tax) between 95 and 105k/year and she makes 62k/year. I realize these are enormous salaries and we could reach FI quickly.
We rent @ $2,000/mo for a one bedroom apartment outside DC. It's a very nice place but not huge (about 700 sf). She wants to move to a two bedroom (est min $2,500/mo)
She has $100k in student loans from earning her doctorate. My only debt is a mortgage on an investment property that generates $250/mo in positive cash flow and hasn't had a vacancy in three years of ownership.
I currently have $30,000 in my 401k and we have about $35,000 saved in cash. We are saving between $3k and $4k per month right now.
Finally my point: I believe I would enjoy a frugal lifestyle that would allow me to do things other than work 50-70 hours per week. I know I earn an income that would make it possible to achieve this either fairly quickly or at a relatively (compared to most ERE'ers) high level of annual spending.
My wife tends to be a conventional wisdom type. She is more inclined to live like "regular people" and work til 65, etc. Please note, this is me working til 65 - she plans to work part time while raising our future kids.
Bottom line, I believe I can achieve FI, but I do not want to give up my marriage to do so. Has anyone in the forum made a conscious choice to not pursue FI due to their partner's desired lifestyle?


mikeBOS
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Post by mikeBOS »

Has anyone in the forum made a conscious choice to not pursue FI due to their partner's desired lifestyle?
No, but I've made a conscious choice not to pursue certain partners because of my desired lifestyle. ;-)
I liked akratic's compromise with his gf over picking an apartment. She wanted the studio to save $, he wanted the one bedroom, so they ultimately agreed to go with the 1 bedroom, but she only contributes what would have been her half of the rent for a studio.
I think that's a fair, elegant solution.
But if your partner is way off from you in terms of long-term goals, I guess you're in for spending some serious thought in search of lots more little solutions to all the other shared expenses that crop up over a lifetime.


m741
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Post by m741 »

I know there are some forum members who have had different beliefs compared to spouses. Just look for 'new to forum' or journal posts and you'll find some.
To me it sounds like you and your wife have different ideas about how you want to live.
What would you want to do if you achieved FI? Would it be compatible with your wife working a 9-5 job? If so, I would suggest keeping your finances separate. If she wants to work the job until she's 65, and spend spare money when she could pay down debt, then it becomes her prerogative. If she wants to move into the $2500/month apartment and you do not, then have her put $1500 toward rent while you put $1000.
Take your extra cash and save it, and she can spend hers, and it sounds like everyone ought to be happy.
I realize this isn't exactly a 'romantic' solution but it strikes me as equitable and if she really does just want to spend her share of the money on clothes then she shouldn't object, because she would really be spending the money she earned (and you shouldn't object either). If you are still uncomfortable about her spending that doesn't seem healthy to me. And if she wants you to spend more of the money that you've earned, that also doesn't seem very fair - she would then be forcing you into a job you don't want.
You don't have to be completely separate. For instance you could split your+her net salary evenly. Or you could pay for most of the food, or 60% of the total expenses, or put some of your saving toward her student loans.
Something to think about, at least.


billc
Posts: 94
Joined: Fri Dec 09, 2011 4:13 am

Post by billc »

If we were both going to work full time in the future I'd think it more viable to keep separate finances. At this moment we both want to have kids and would prefer to not put them in daycare. Given the fact we are likely having kids before we reach FI, this means her staying home and me winning bread. This would make it harder to keep finances separate. Obviously we could wait on kids and strive to reach FI first. This is not the current plan.
I am happy with our relationship. I think I can be happy in FI or happy while working til 65. What I consider optimal in many situations is not what we may end up doing, finances included. I was curious to see if there are people here who follow as a matter of interest who are not likely to achieve early FI/ERE.


Freedom_2018
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Joined: Sat Dec 18, 2010 12:10 am

Post by Freedom_2018 »

"I am happy with our relationship. I think I can be happy in FI or happy while working til 65."
"Finally my point: I believe I would enjoy a frugal lifestyle that would allow me to do things other than work 50-70 hours per week."
"My only debt is a mortgage on an investment property that generates $250/mo in positive cash flow and hasn't had a vacancy in three years of ownership"
Maybe I am reading too much into these statements above as well as your post but I'm getting a huge case of cognitive dissonance here.
I hope you are being honest with yourself? Sounds like you started out on a good financial path and somehow for a while the relationship became more important than your financial values and now post marriage those values are starting to raise their head again.
I also suspect that you are trying to keep peace at home/please your wife too much (i.e at the expense of your own financial values as well as the voices that is inside you which is making you ask these questions in the first place) by letting her values lead the way while convincing yourself that you could be happy living that way.
Things that seem small issues/annoyances now often get amplified with the passage of time and life events.
Your best bet it seems to me is to try your absolute best to make the wife see the light by couching the benefits of FI in terms that she can relate to (might even have to use scary tactics about the downsides of debt..what if you lose your job etc). Probability of success is low but it is worth the effort (multiple times).
Meanwhile you really have to ask yourself how badly do you want to be FI and what are your true motivations.
Till then would also suggest:
- not rushing into having kids

- at least convincing wife to work full time till student loan is paid off

- if not known already, find out wife's MBTI type and do everything in your influence to get to her on her wavelength about importance of FI (think I said this already)
Sorry for being preachy but been there done that and seen more than one good person get the short end of the stick in their marriage (also can tell you from my experience that it is much better to be single and living true to values versus being in a marriage just not to avoid being lonely).
M


ExpatERE
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Joined: Sun Jul 10, 2011 5:49 pm

Post by ExpatERE »

I want to commend you for offering such a personal topic to discuss. You're going to get some comments that might at first read may be a little harsh. Just know that most on here have fairly strong beliefs when it comes to financial topics. What you will gain is the ability to truly question what is most valuable to you. That is key. If having a marriage and kids is more important than FI then your decision is made. Be at peace. If you have a little friction as to whether or not it has to be an either/or decision you have much more consideration to do and a tremendous amount of communication with your spouse.
That said, I agree with what Freedom_2018. A marriage should allow the other person room to grow. If FI is a goal of your should it be excluded if is not shared by your spouse? My answer would be no. She can still do what she wants, but may have to work to support those desires. Couple of questions, what assets does your wife bring to the marrige? You mentioned yours, but what about hers? Did I read this right: 100k in student loan debt? Is the an MD, JD or somethings else with the potential for nice salary to pay this off early?
I'm intersted in how you navigate this as my journey down the ERE rabbit hole came about b/c of a failed marriage largely over issues of money. In all honesty I wouldn't even consider dating someone in a situation like I was in just a short year ago.
Regardless of what you decide, please be sure to communicate with your spouse about these issues. Not just a casual discussion, but a deep, soul searching, uncomfortable talk about what lies ahead for you guys.
I wish you both the best.


Suzanne
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Joined: Tue Jul 12, 2011 9:17 am

Post by Suzanne »

As I read your post it occurs to me that you could maybe talk about your wife about taking care of future kids. To me, it seems not fair to assume you are automatically the one that has to work full time. Especially if that means 50-70 hours a week. In my opinion, you have mutual rights to be involved in the upbringing. Maybe approaching the issue from this angle helps convince her?


DutchGirl
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Post by DutchGirl »

Talk first, have kids later. You need to be sure that you're on the same track here, before anything as irrepairable/unchangeable (english is not my first language) as having kids happens.
Plot your family's financial path. Try multiple scenarios. Assume your kids will be healthy. (If one of your kids turns out to require lots of care, all plans are off, I'm sorry to say). Try to find a scenario/strategy that both of you can be happy with.


riparian
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Post by riparian »

Maybe I'm projecting too much from my past relationships, but it doesn't sound like you two are compatible for the long term. It's easy when you're young to think that love has to be this big codependent forever and ever thing, but in reality your wife and you can both be wonderful people who love each other and would be happier in other relationships, and that's okay.


m741
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Post by m741 »

I'm also not sure why you're discounting the option of *you* quitting your job if you had kids. After all, this would be in alignment with the goals both of you set in the relationship (you not wanting a job, and her wanting to keep working at hers). Most professional jobs (all jobs?) offer maternity leave, after which she could return to work and you could stay home to take care of the kid.
If I had kids this would be the option I'd most prefer (short of both parents staying home). I don't think being a stay-at-home dad is such a bad option.


Spartan_Warrior
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Post by Spartan_Warrior »

Guys, it doesn't sound like his wife wants to keep working full time at all. She wants HIM to keep working full time while she cares for the kids:
"My wife tends to be a conventional wisdom type. She is more inclined to live like "regular people" and work til 65, etc. Please note, this is me working til 65 - she plans to work part time while raising our future kids."
If she wanted to work full-time herself to support her own spending habits this would be far less of an issue IMO. Instead she wants to live like "regular people" and she wants billc to pay for it. That plus the debt makes me inclined to side with riparian on this one... but I am a heartless cynic.
Billc, what is your wife's job currently?


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jennypenny
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Post by jennypenny »

This is tough. My dh thinks more like your wife. It's made for some pretty painful discussions this past year. We have a plan now that we both can live with, but it wouldn't be my first choice.
My first instinct is to say keep your money separate, agree on a shared budget, and pursue your FI with the rest. But I think there are two problems with that. First, that $100k SL debt will take her years to pay off on her own. And second, your married now. You can talk about keeping things separate all you want but you're both in the same boat so if one is drilling holes while the other is bailing out you'll never get anywhere. You have to work toward a compromise, especially before you have kids.


George the original one
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Post by George the original one »

Different strategy: get the hell out of the DC area!
$2,000-$2,500/mo for 700-1000 sq ft is a ridiculous waste of money for housing. In most parts of the country, you can pay the mortgage on two 1500+ sq ft houses for that kind of money.
Also, if you're going to stay in the DC area, then I see no reason to move to a two bedroom until y'all actually have a child. Even if she becomes pregnant today, an extra $4,500 in your bank account will go quite a long ways for a newborn child.


flyer2009
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Joined: Fri Nov 18, 2011 9:49 pm

Post by flyer2009 »

You are getting great advice but I want to follow up on what George is saying. You say your rental is generating $250/month. I am assuming that's net of mortgage and everything else? Are you getting a good enough return on your investment? Just wondering because this seems like a low net for a rental.


Phayen
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Joined: Wed Jul 27, 2011 8:25 pm

Post by Phayen »

I'm in a pretty similar situation. My income is lower and our expenses are lower, but my wife isn't completely on board yet. She doesn't work anymore, but cares for our 1 year old. I know I could have retired at 30-32 if I didn't get married, and knew that getting married looked like extending FI till 65. But we've been able to work on it together over the last year and now we're pretty comfortable we can be FI at 45. I think that's a pretty fair compromise. Either way I'm happy, and knew what I was getting into. DW has had the most compromise with changing her lifestyle drastically. It can work, but communication is key.


billc
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Post by billc »

1) I haven’t given her a fair chance. I know what her tendencies are but I’ve never really presented having a financial conversation as something really important to me. It’s unfair for me to assume how she will react. Also, I think this is something that takes time for people to come around to so one chance is not enough.

2) Interesting idea to discuss me wanting to be able to work less in order to raise our kids and FI (or at least working toward FI) can allow for that.

3) My job (and income level) is tied to the federal gov’t. At this point I think I could attain FI faster by earning 95k (and potential to grow to 125k) at 2,000/mo rent (and the other high living expenses) than I could at 50-60k (not sure I could get this in current market) at 1,000/mo rent. I’m not in a field where I have the potential to switch jobs easily.

4) Although if I were unmarried I would probably tend more toward the extreme savings rates some in the forum have achieved, that’s not something I am really seeking to do now. We are fortunate enough that we could save 50% of our take home and still achieve pretty significant investment dollars. We should be able to bank 50k/year pretty easily.

5) I think I would be very happy with some level of compromise. I don’t need to be totally work free by 33 years old. If I were 50% work free by 40 or 45 I would consider that a major win.

6) I have a small real estate “business” on the side of my day job (between 3k and 10k annually) and I have developed a strong knowledge of the rental townhome market around one of the local military bases. I’ve arranged the rental of about 40 townhouses over the past four years. The property I own was purchased in April 2009 for $134,000. It currently rents for $1,250/mo (will go up to $1,300 in July). I owe $110,000 on it. Although this might not meet the requirements for some hardcore landlords @ biggerpockets I’m happy with the investment.

7) She is a physical therapist, which is a growing field, with lots of demand in most areas of the country. Her field is also conducive to part time work and flexible hours. Her loans are direct loans with Dept of Edu (7.9% for 40k, 6.8% for 60k). This is obviously the #1 thing we need to work on (and pronto). We could pay them off entirely in two years if we chose to. I’d be happy if we did it in 4.
She does not like talking/thinking about money, but we need to have a bigger discussion about our life goals. Money is a tool to make some of those goals happen. I’ve never pushed for a money discussion because it’s been easier to avoid the conflict. It is not her nature to bring it up. The ball really is in my court.
I guess the number one thing I was hoping to hear about is what kind of compromises people have made with their more traditional spouses and what kind of success they’ve had with that.
You’ve all been very helpful.


DutchGirl
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Post by DutchGirl »

You're welcome. My boyfriend also isn't very ERE minded, but his salary is so high that he can pay all of his expenses and still save enough for his retirement. He is also very finance-talks aversive, but since he can take care of himself financially, I don't need to talk to him about it much, anyway.
For your wife, the difference is that she may be dependent on you in the future, and then it does become important to discuss finances. I believe that if a couple decide to have kids, and they decide that one of the two parents (or both) reduce work hours or stop working completely, then there need to be some talks about money.
Good luck.


prosaic
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Post by prosaic »

Story about a spendy spouse: When I met my husband years ago, he was the big spender (though within his means), and I was super-frugal. My husband didn't want to change, and he didn't -- I went along with him and we spent. He earns a very comfortable salary (software developer) and wprked full-time until our second son was born, then part-time or freelancing work while raising our kids (been doing this for 9 years now).
All along, though, I've been talking about "a different way" to spend money. We still spend FAR less and save far more than our social cohort here, but we're more standard: 5-15% in 401K (depends on the year), pay off credit card bills every month, keep 6 months' savings in cash, etc. We spend extraordinary amounts of healthcare (3 out of 5 of us have significant chronic conditions -- so we're still doing better than most families, while spending $25K/year out of pocket most years).
And then we had a "magic moment" last spring/summer, when my husband went through "THE DEATH MARCH" at work, with months on end of 90-120 hour work weeks, and loads of overnights of work. It was so destructive across the board (his health, family, etc.) that it's leading to huge changes now. He's on board. He sees money as time and freedom now, finally, and that we've been exchanging money for all the wrong things.
Consider finding a book like Your Money or Your Life, or some book like it, and reading it together. Also, talk openly about what it will be like to father children but be gone 70 hours/week. My husband is one of the most involved, loving fathers I know, and it killed him to work so much last summer and be gone -- to have the kids disappointed because Dad was unavailable yet again. And he works from home -- no commute -- but when you pile on code marathons and conference calls at 100 texts a day, telecommuting doesn't make a difference. He was just a friendly shadow for those months.
The emotional side of parenting for fathers counts here, too. And if she's expecting you to make ALL the sacrifice in terms of life energy -- working AND spending money (which is time and freedom) according to HER values, therefore not giving you as much time with your shared children, then that's a major values issue for your marriage.


Dragline
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Post by Dragline »

Greeting, fellow DC-area person. (Maybe there's a meet-up here in the future.)
I was in your shoes about 20 years ago. Just married, good jobs, lots of debt for two educations -- about 160K in the early nineties. Most of the commenters here are right that you have more of a relationship issue than a financial issue at this point. You have to be on the same page for anything to work.
Our story is that my wife and I lived pretty small for 10 years, maxed our 401ks and threw every extra dollar at the student loan debt until it was paid. We had one car (an early Saturn) and she took the bus a lot. We almost always packed lunches. We had an old tv, no cable, and patio furniture in the living room. As time went on, we "inherited" random old furniture from relatives and, when we had children, an old Chevy station wagon. At one point, we had 3 kids and her brother packed into an 1150 square foot townhouse. (But at least he cooked and was free childcare.)
Eventually, it became clear that my job was going to pay us more, so she quit her job and went full-time stay at home parent about 10 years ago. Part of me wishes that I had been the one to quit, but it was better for us and the kids that I didn't. And I like my job anyway, so I'm still working even though I don't necessarily have to.
Point is, you've got to plan and you've got to do it together. Otherwise, its just not going to work.
If the investment property is nearby, I would consider living there yourselves, although you need to do that math. Make sure you account for the tax breaks. You certainly should not move into a more expensive place. And the bigger it is, the more you will spend on things you don't really need.
The first conversation I would have with her is how you can get rid of her debt. Paying it down is a risk-free return which is usually unbeatable in our low interest environment. And if you do it -- together -- it will cement your financial relationship.
But go slow. This is not a contest to see who can retire first and fastest, and you'll need to account for her comfort levels if you want to keep her. Best of luck and hope to meet you someday.


MattF
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Joined: Fri Aug 26, 2011 7:48 pm

Post by MattF »

A fun way to approach this subject is to dream about what life would be like if you had $10M. Would you still want to work to 65? Would she want to live in DC and raise children? Maybe move to another part of the country/world? Travel extensively? Write or produce some other type of art? Read more? Be with extended family more?
Of course $10M would cover any reasonable person's "dream life", but are there any easy changes you could make in your life to reduce that number? Does eating out *really* bring us that much happiness when we could be doing X instead? Do we really want fancy cars instead of an international vacation?
Oh, now that we've made those cuts, $1M would easily cover our "dream life". And at our salary levels, we could hit that in 10-15 years! Hmmm, this is exciting, I wonder how much more short-term sacrifices we could make for long-term achievements?
The cross-over point between short-term sacrifices for long-term possibilities is different for everyone and will likely change throughout your life. The greatest thing about the ERE/FI mindset is that the point is to analyze and understand exactly what that decision point is, and take full control over your short- medium- and long-term lifestyle.


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