SWB's path to financial independence

Where are you and where are you going?
SavingWithBabies
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Re: SWB's path to financial independence

Post by SavingWithBabies » Sat Mar 16, 2019 10:28 pm

The TL;DR of the entire prior post is if we don't buy a $250-300k house locally but instead move somewhere else to rent or buy that lowers our monthly housing costs to reasonable amounts, we could likely be FI within a couple of years. Yes, it's all a bit hand wavy but I think it makes sense and next we have to try it to see.

Where to move though?

The bigger problem of where to move is vexing. Once you have kids, it makes everything harder in terms of where to live. First off, you have to think about schools. Even if you decide to home school like we have, we still have to factor in that okay, maybe by high school, if not potentially sooner, we might want to send our kids to school. At that point in time, we could move to a good school area. Or we could move to one now in preparation if we can find one that aligns with our other goals of cost and...

Then you toss in grandparents and wanting your kids to see their grandparents. Even though both your mother and your spouses mother emigrated to this country leaving their own parents far behind. You still want your kids to see their grandparents. But after thinking about this for years, you also realize it might be easier for those grandparents to make a move. So living your life around the grandparents becomes a bad idea. Plus they don't even live that close to one another so you have to pick sides or live in the middle or <insert head explode emoji>.

Another factor is you realize after living somewhere a while with kids is the kids pull you into the local community more. And you start to consider you do want to have some stability there. Mostly because it's hard for say your spouse to leave the friends they acquire via the children. Plus maybe eventually it's hard on the kids (although I don't know about that -- seems like some pros to moving as a kid and getting to start over).

Then you also kind of want to live close to your siblings. On the spousal side, they are far enough away this isn't really a factor. But on my side, my siblings haven't really made that much effort to visit me although one certainly does more than the other. After mulling this over, it's getting relegated to would be nice but schools win (plus area that is #1 is an area that interests my sibling too and they might move there later on down the road).

Lastly, there is what do you imagine you and/or your spouse want after you get to FI? Kind of a guessing game that, right?

So... Yeah. Where to move is painful. But we think we narrowed it down and we're going to go try it for a year and see. Probably rent there. Maybe buy if we see something we can afford and want to go for it[*]. But it took a while to get here.

[*] I actually want to get to FI and then build a house ourselves.

SavingWithBabies
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Joined: Mon Aug 31, 2015 2:50 pm
Location: Midwest, USA

Re: SWB's path to financial independence

Post by SavingWithBabies » Sat Mar 16, 2019 11:07 pm

With all that hand waving in the last two posts, the big thing missing is healthcare. I thought I had a lot more time to figure that out but now I want to know and I'm unsure what it would cost us here in Michigan or what the requirements would be (if we would end up on Medicaid, Michigan did pass a work requirement but the newly elected governor doesn't want to implement it). So healthcare is something I have to figure out and might impact that goal amount.

bigato
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Re: SWB's path to financial independence

Post by bigato » Sun Mar 17, 2019 6:45 am

I'd say most of your worries are arguments for renting instead of buying. Also, regarding the school, it's hard do predict in advance if it will still be a good school area so many years in advance - this can change.

SavingWithBabies
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Re: SWB's path to financial independence

Post by SavingWithBabies » Sun Mar 17, 2019 11:44 am

I could see having that impression but I wasn't meaning to argue for buy versus rent. I'm tired of renting at this point and want to buy/own. When we move, we'll rent for another year to get to know the area but by the end of that, I want to have solid plans to either buy, build or move to another area. If build, that would mean more renting but we would commit to that path and go forward on it (find land, figure out how much we're going to do ourselves, etc).

I don't disagree about schools. We've noticed though that the areas we are attracted to that have good schools also have colleges/universities. The place we want to move to matches that pattern. No guarantees of course but I'd be willing to make that bet that the schools will continue to be okay.

To get back to rent versus buy: I get one can use the New York Times tool or similar to compare costs and make the decision on the financial analysis. But I'm tired of other aspects of renting:

* I'd like to be able to fix the house I live in and/or modify the land around it.
* I want to be able to predict future costs more accurately.
* I want to put down roots. In a very real sense, we have family who are waiting for us to figure out where we want to put down roots so they can consider relocating closer to us (short term my parents and longer term my brother).

Renting has given us the option to move when we want to (for jobs or family) without the financial penalty of buying/selling real estate. I do appreciate that and we have made use of it. All that flexibility including pushing decisions off into the future is very convenient financially and mentally. But I am tired of deferring those decisions. I see FI as the freedom to no longer have to optimize around being able to relocate for employment. I want to see the other side of the rent vs buy coin.

bigato
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Joined: Sat Mar 05, 2011 12:43 pm

Re: SWB's path to financial independence

Post by bigato » Sun Mar 17, 2019 6:49 pm

I agree on all your points, also see how renting can get old, and think that renting for a year is actually the soundest move you could make. Just go for it, all those doubts will be cleared by the time you reach the end of the one year rent contract.

SavingWithBabies
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Re: SWB's path to financial independence

Post by SavingWithBabies » Mon Mar 18, 2019 1:26 pm

@bigato I realized though through your questions that I think the person I'm trying to convince the most is myself. I do find it easy to focus on the monthly payment of a mortgage instead of the 30 year term. In that I find it easy to compare our monthly rent to the mortgage + tax + ... total and even factoring in maintenance, it's tempting to make the leap. But that 30 year part is the painful part even if it doesn't seem like that much money now. I know that when the income stops, those amounts seem quite big even though we have many years of savings. When more money goes out than comes in, I get nervous.

So I guess what I'm doing is pushing myself to move to somewhere with a lower cost of living now (or shortly once winter is gone) as otherwise I worry we'll end up spending a fair amount of money to buy in this area without a compelling reason to do so (it is quite nice but I think there are other areas that are nice too and that we would be happy in with housing that is more affordable).

bigato
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Joined: Sat Mar 05, 2011 12:43 pm

Re: SWB's path to financial independence

Post by bigato » Mon Mar 18, 2019 1:51 pm

Congratulations, now I sense the system 2 type of thinking, using your brains more than your guts. I thought you meant you were going to buy a property paying cash; if this is not the case, some more math and simulations would be wise. A thirty years commitment is not something to be taken lightly.

SavingWithBabies
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Re: SWB's path to financial independence

Post by SavingWithBabies » Sat Mar 23, 2019 1:35 am

I hadn't meant that but I think you are right. I would either buy in cash or buy something that I could pay off within 5 years. But I realized thinking about your post that it would likely be silly to incur the fees on a mortgage if I were to pay it off so fast. So hopefully, it can be cash.

SavingWithBabies
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Re: SWB's path to financial independence

Post by SavingWithBabies » Sat Mar 23, 2019 11:59 am

Over the past 3-4 months, I've jumped between being dissatisfied with my job and trying to think of it as being more like a consultant where I'm just there to do the job for the day and not worry about it outside of that scope. The later has worked except when there is little actual work to do. The former I've tried to turn into something more productive. Perhaps the problem is me? Or at least partly me -- the company for sure has problems too. But if we focus on me, I think the problems are:

* lack of assertiveness
* smart enough to know when to just let things go instead of trying to control things but not smart/savvy enough to know when it's time to step in
* tendency to not feel like I am in control seen as a tendency to assume the way someone else wants to do things is the way it will be done -- that lack of assertiveness makes it hard to get my foot in early enough to do a course correction without it being a big deal (at least to me emotionally)
* confusing "is"/facts with "oughts" or "should be" -- the later can be very negative emotionally, focusing on the facts is usually more constructive
* direction-wise, I've reached the logical end of my path of learning as much as possible to do a complete SaaS (software as a service) project from start to launch/beyond -- there is always more to learn but I've covered the major areas and I'm not sure where to go next on that path (the logical one is something like business development or sales but I don't know if I can pivot into either of those -- perhaps sales engineer?)

What I'd like to work on the most is assertiveness. As an introvert, that is a struggle. My father is introverted too so it's not like I had a role model of how to be an extrovert. I am the most outgoing of my siblings. I feel more alive when I got outside of the shell of the introvert. But it's also very tiring. I can become overly rambunctious and loose my logical reasoning facilities due to "heat of the moment" emotional responses instead of calculated thought. Later on, I rerun conversations in my head and am very critical of myself (although I've gotten much better at not doing this or at least talking to my wife about it so I can let it go). So perhaps "thinking on my feet" belongs on the list above too. I also worry about saying the wrong thing -- I tend not to have a strong filter. My life long friends know that but I feel like I have to be careful with new people. And it's not like I have any local friends anymore to talk to (besides my kids and wife). But I would like to change that.

So next I need to figure out assertiveness and "thinking on my feet". After writing all of this, the sales engineer role is starting to make more sense. I could see doing that as the next job or doing it for a side project and taking it seriously (in terms of hitting the phones and trying things until I figure out what works). For my current side project, I won't do it. It is making money but almost half of it belongs to my partner who I assumed would take on selling it. That has not worked out and I realized I have a version 2.0 of that project in me but I would redo it from scratch under the roof of a new corporation by myself. This would no doubt cause some hard feelings but I think that is what I should do. So on that front, I need to push my partner to produce results and until we see progress or agree to concede. In the meantime, I have some other projects I want to try with some "new to me" tech so I'll do that and only do maintenance/support on the existing project.

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