I am 38 and my wife is early 30s. One kid (under 6 months) with one to two more on the plan. Working as a Software Engineer in SF Bay Area. Wife is in education but after looking at child care expenses, we decided she would stay home with the children until at least preschool (no local family).
I came to ER because I saw my parents struggle with income as a child. We always had food, stable home and so forth but there were some years my dad was out of work. I also observed him being really smart in one sense but really not so smart financially. It is a sharp contrast to how his father was. To me, as much as I love him, I still see him as slightly irresponsible.
FI to me is being able to make conscious choices in what I do each day much earlier than my father. He just retired recently and he is close to 70. I'm 38 and I want to get there by 45-50. I enjoy what I do. My minimal FI goal is $1.3M but if I'm under 50 and still have silly income, somewhere closer to $2.5M would be ideal. The last 6 months I've juggled thinking about the minimal side and the luxury side. Somewhere in the middle is being able to cover some or all of my planned 2-3 children's college expenses, have enough saved that my wife is comfortable with leaving employment and potentially being able to afford a boat to sail around the world (rough plan, going for enjoyment not speed so maybe 2-3 year voyage at least).
Time is the critical element. Too late and I get less time with my children and they likely won't be interested in the sailing around the world. I waiver back and forth on college expenses. On the one hand, I did it alone with my two final years of university being at 25+ in age so completely financially independent of my parents. I graduated with some debt but paid off half within 12 months and a grandparent gave me $20k (and I used half of that to pay off the remaining). Today though it is not so easy. There is definitely something to learn by making it on your own but after looking back at my late start to career, I see a lot of value missed in those 7 years I could have been working in my career while I struggled. So I think saving roughly 100% of a full in-state ride is on the table.
- See how far I can get along the path over next 5-6 years in SF Bay Area and try to bootstrap side projects and grow income.
- Far along? Go for the boat and home school around the world while investments grow.
- Not far enough? Relocate to midwest to be close to family and be able to buy a house. Keep on working as investments grow. I enjoy my work.
$180k/year + stock options (value at $0 and/or negative -- see below). My salary has increased 3x over what it was 5 years ago.
- $285k total invested with ~$120k post-tax (most in Vanguard) and rest pre-tax (401k or similar, Vanguard)
- Adding ~$5k/month to post-tax investments (no pre-tax option at current employer)
- 1 year of exercised options at a startup that I currently value as negative (value stock at $0 but exercised after a year for ~$6k and will have a tax liability of ~$38k due to increase in value -- likely going to tax professional this year due to how complex it seems to be)
- almost at another year of exercised options at another startup but thankfully early-exercised
- $1,930 rent for 2 bedroom apartment
- $105 water + sewer
- $33 gas and electric
- $326 car payment
- $110 car insurance
- $19 rental insurance
- $120 pre-tax for commuter (I commute by train)
- $75 cell phones (pre-paid with data)
- ~$500-700 food and household (cleaning, baby diapers, etc)
- $630 tuition for education program (wife, done in 7 months)
- $72 student loan (at sub 1% interest)
- $70 internet
- ~$800 not accounted for here and hunting down
This plan doesn't seem very extreme to me compared to a lot of plans for a single person or a couple with no kids. But I'm trying to figure out how to balance all the needs/wants and ensuring FI. I'm here because we can potentially get more extreme and even if we don't, we need to keep lifestyle inflation in check (and extreme seems to require that).