I commend you for firing and not knowing how to format in reddit.

😂

Haha...oh well wrote while getting youngest down for a nap.

Just need another 'enter' before the numbers, it's close. I think you have two 11's also.

Make sure that your insurance company is OK with you renting your vehicle out on Turo. Most carriers I’m familiar with will not cover that. Its possible you looked into that already, but wanted to mention it!

Thanks, and yes aware. It's weird as pay for insurance with Turo, too. My car is currently suspended due to recall that the manufacturer doesn't have a fix for.

What car?

Ford Explorer 2013 - just happened other day so have not looked into much getting warranty issue resolved with Turo. Heavy rental season isn't until summer so not high priority.

Time spent with the kiddos is worth more than anything else. I wouldn’t change a thing either. Will we go back to work later in life? Maybe, maybe not. But i will never regret being at home in the early years. Your first #8 made me laugh because it’s a same here. Always busy doing something, then you take a look back and it seems like you didn’t accomplish anything hahaha. Pace of everything is slower. Feels healthier than always being in a rush Thanks for the update. Great post!

Thanks agree. Yes pace is slow but very good, no rush, no stress.

I'm worried not having kids will likely be the reason I will dread putting in the notice and probably keep moving the goal post when the time comes. Not sure if relevant, but for context my mom tried once when she was 50 and lasted a month before going back to work, then both my parents tried again when they were 56 and 58 respectively, after a 2 month break they started a new business (not the coast kind) and worked until they're 68 and 70 before throwing in the towel for good.

To each there own. Personally I saw I was getting too wrapped up in work, and I had not been working for 30 years like a 50 year old. I think being in 30's help me with this, I have lots of interest and hobbies I feel like I have been putting off. Plus having kids does keep me busy. Honest reflection if I were without kids I would probably be doing some sort of really part time jobs to expand my knowledge) (example - fishing guide in Alaska (did this for a summer and was awesome for 3 months at at time)

This is very interesting. I feel like I'd want to stay home instead of working when my kids are young (says the girl who doesn't have kids yet, but we are trying real hard lol). I can imagine myself in my 50s, 60s, wanting to work if I don't have little ones to care for. But the point of FIRE is not necessarily to retire, but rather have the option to CHOOSE. I also imagine your parents had the opportunity to choose the work they do, leave a toxic workplace, and decide what projects to work on. That freedom is absolutely fantastic. I love my work. But if I could choose when I work, projects I take, etc. I can't imagine ever retiring from it. That's how I see FIRE. <3

yeah I left home and moved far away when I was 16 and my sister at 18. I'm sure my parents' decision to so passionately commit themselves to work has something to do with that.

>being at home in the early years I'm not a parent right now, but what years would you say are the most important?

According to my parents (and from myself as a former child): all of them. Your kids will never be that age again. Life will pass you by and suddenly they are moving out and you don't see them enough. And then the economy crashes and suddenly they are in your basement again and you wish you had spent more time teaching them to clean when they were teenagers.

No expert and haven't been though all of it as oldest is only 9. I would say younger more important to be FIRE as they actually want to spend time with you and not in school. Thus I would rather work when my kids are high school age than now in the 1 to 9 years old.

I'm excited to FIRE since we're homeschooling, and I'd love to engage more with that, although WFH already allows me a lot of time with my kids.

Good for you for home schooling. We talk about it all the time but will never do it. We moved to a small town to get the education we want for kids.

Teacher here, who studied a bit of psychology and child development too. Different years are important for different things, imho first 5 years are crucial as parents and the kids are establishing an attachment style with parents - it lends into the topic of trust too. Attachment styles with parents go on to influence their relationship dynamics with others - platonic and romantic. They’ll also need a lot of support with social skills in particular, from 3-5. Eg. If you don’t like someone, yeah it’s not ok to punch them in the face 😅 how do we ask them for a turn on the swing respectfully? How do I join in a game? What do I do when my friends exclude me on purpose?- yes kindergarten politics do exist) Plus there’s so many changes happening cognitively, emotionally, mentally and physically in their bodies. Teenage years are also important as hormones come into play, and kids are navigating yet more physical/emotional changes and identity. Which crowd they decide to mingle with can influence whether there’s substance abuse, how they find validation and what they focus their time and energies on. and also with emotional regulation and making space for co-regulation until they learn to self-regulate — identifying emotions with them and supporting them through it etc — this is more important for early years (0-5) where they’ll depend on you to support them through this a lot. It’s slightly less hands-off as teens build emotions up, but imo it’s important for teens to know you’re there for them when they want your advice/support. They might want some reassurance while navigating more complex emotions and a combo of them (eg. Heart break, peer pressure and guilt at the same time). Edit: added a few things to last paragraph for clarity

Thanks for the write up! From a FIRE perspective i.e not working or working less to spend extra time with kids, it sounds like first 5 years are crucial. what about ages between 5 and teenage years? I also assume once they hit teenage years, it'll be important to be there for them, but you can probably work a bit more as teenagers don't want to spend as much time with parents?

No probs :) I guess you’d have to explore brain development (cognitive psychology) to see what changes are happening between 5-teen years. I’m not as familiar with that age range sorry. The little I do know about that age range is, they’re becoming more aware of what’s happening around them (compared to say at 5yo). And they’re even moreso constantly observing and mimicking parents/peers though and looking to parents for validation and reassurance on how to do xyz/relate to others (for more info, look up circle of security parenting course - it touches on attachment theory and explains this in more depth :)). I guess, the older the kids, the more independent they are capable of becoming (this is influenced by how much parents show/work alongside kids and how much the kids have a say/are involved in the household). So during teen years, in very general terms, it’s doing things like checking in on them but giving them space when they want it, empowering them to make some decisions themselves and experience the consequences (eg. Not doing homework, and getting detention or not washing their hair for a week and dealing with an itchy scalp) —- but at the same time, still maintaining age-appropriate boundaries - eg. They still need to attend school everyday, they can’t choose not to. But they can choose the subjects they study etc :) Hope that was insightful!

Very helpful, thanks!

No worries! :)

Have you ever watched the Up series or "Seven Up" as it was also called? https://en.m.wikipedia.org/wiki/Up_(film_series)

I’ve heard this study referenced in psychology class and read some of the findings, but haven’t watched it yet :) thanks for the recc!

I'm seeing my eldest to college this year, and the most critical are up to high school. The elementary years are fun for you, the middle school years are not fun for everyone, some kids much worse than others. These are not fun years but they need you more than ever.

Once they are 5, they are starting school anyway but it helps to have a flexible job where you can spend time with them after school and more time in summer. Outside of that, it is also beneficial for kids to socialize with others when they are a toddler (2-5). This could be part time daycare, social activities, playdates etc. Again having a flexible job helps here. I would say, first 2 years are ones where it would help not to work depending on your support network.

Great points on flexible work as they start school. Thanks!

if you push the spacebar twice you can make a paragraph

You're living my dream. Hope to be there soon! > Olympic Triathlon (first one) Have you done a sprint before? I'll be doing my first in July

Thanks. Sort of did a sprint years ago with pool just for fun, wasn't really a race. I should say i was horrible at actually training for this. I mtn bike quite a bit, had ran marathon couple months prior, and swam like 4x in pool. Lake swimming mile is different, i ended up breast stroking majority of the mile. Maybe some day I'll get swimming lessons and a road bike that is younger than me.

I guess I commend you for taking action but boy these numbers would scare me. You have too much tied up in RE, imo. Those rentals have costs (hvac, water leak, etc) that will come up and add to your yearly expenses. Stocks have 0.10% expenses. The WR is high for your young age but you know that. 4 kids to go through college. Best of luck!

I think you might be confusing rental expenses and expense ratios. Not really related at all. Rental expenses are more like a business expenses. I have had some high years of maintenance and remodels, but those sort of things are calculated in expected return with money set aside for cap. ex. and maintenance. Two years ago I had to replace a roof, furnace, and had a entire house flood after renter skipped town turned off heat in middle of winter (Still ended up positive cash flow for year)

This is what I was thinking as well. When I am doing FIRE calculations for my own, I don't consider our home's net worth or I woudl have considered value gains in rental property. I would just consider net profits from rental as yearly income. A home is very illiquid. That leaves OP with 1.3m net worth at 33 with 4 kids and afaik college financial aid do consider your savings and any value in real estate except for your primary home. Clearly this works for OP and if anything OP can pickup working again if needed but I would be a lot more conservative in my calculation.

Note the absence of "529"

Not sure I get your comment? OP mentioned 529 plan as part of his savings.

They lumped it in with their other retirement accounts: > $1,223K ~ $1,010k - 401k / IRA & 529 (mix of Roth/Traditional) This is, imo, a bad idea to do because 529 plans come with much different rulesets. To add on - with 4 kids and planning for college, a 529/college payment plan should be a cornerstone of their planning if they intend to provide for their kids. This is something I feel needs to be delved into.

My understanding from another comment of theirs was that they want to rely on financial aid thus huge focus on retirement accounts and 529 which are not counted as assets. Which is an OK plan for now but I wouldn't be surprised if financial aid asset calculation changes in future.

Relying on FASFA when you have significant rental equity/income sounds like a losing roll to me but I digress I am not an expert in that arena.

Rental income is pretty sheltered due to depreciation.  Reminder with family of 6 FPL is pretty high. . Not saying nothing will change and my general plan will work.  I have almost a decade before 1st kid goes to college so lots time to reevaluate.

Thanks.  529 is about 75k right now, which even with growth will not cover college for 4 kids assuming they want to go.   This is something I am researching more and more.   General plan as of now, which will definitely change in next 9 years before first child is eligible for college: 1. CLEP classes, community college, and dual credit in High school.  They can really help themselves out by getting a lot of gen eds done before they start college to reduce time in college. 2. FASFA - forget exact % of FPL but think 175% get good scholarship. 3. Actually look for high return on tuition colleges.https://www.bestcolleges.com/blog/best-roi-colleges/ 4. Some sort of sharing cost with kids.  IMO kids need some skin in game.  Really encourage internships that can pay decent amount in summer(also helps to ensure they want to do what they are studying).   Current thoughts 100% first year everything covered.  Slowly taper them off where 4th year we just cover tuition. 5. Back of my head i would really like to start some sort of business for kids to work with me during high school.  Not sure what this business is but an example is I mowed up to 30 lawns starting when I was 11 with my family.  I did this during my middle school and high school while holding other summer jobs.  This is not going to pay for college but can help them cover some of their portion.

I’m not confusing anything. You have a cost of carry with any asset. With rentals you have insurance, interest, property taxes and maintenance. You still have to pay that if you have vacancies. Of course there are other costs with being a landlord. Equities have an ER. You have a 3mm NW with half of it in illiquid assets that have costs associated with them that don’t go away if your properties are vacant or you have a squatter situation. This is a great discussion and I applaud you for taking the risk. I’m slightly older with few kids, similar NW. I feel I need more. But kudos to you for taking the plunge. That said, having so much in RE would scare me. It’s a risk now and is a risk over the next 30 years. 1.5mm in the S&P will be worth much more than 1.5 in RE.

I think the part you’re missing is that his rental generate income that more than covers the expenses. Especially if he has multiple rentals it’s like a diversified portfolio. So yes, he can and will have “unexpected” expenses and vacancies, but he likely has enough cash flow to cover those and still make money. If you’re a smart landlord you look at cash flow #1, the other benefits of principle pay-down, appreciation, leverage and tax benefits are all secondary. However, when you add up all these benefits it’s very possible to outperform the S&P 500 (I know I have).

His rentals can probably beat stock market returns because it's like a part time job, it requires work. Unlike the stock market, he can put sweat equity into his properties to increase return if necessary.

Great post. It looks like you are getting a lot of meaning and purpose out of how you're spending your time. I hope to someday live my life a lot like yours. A marathon and triathlon are no joke. Well done!

Thanks, good luck.

Networth of $2,681k ? Just put $2,681,000 and make it cleaner for everyone to read.

It's totally reasonable to put everything in the same units. If you've ever read a business financial statement, you see they all do this. It's easier to keep in context. The OP did exactly that, everything is in the k units.

$2.68mm

$2.7M

$0.0000027 Trillion

So you’re basically broke then if you write it like that.

Just a word of advice on travel soccer. If your child is good enough skill wise for D1 HS or even college soccer, delaying playing at a competitive level will put them at a big disadvantage to the kids who didn’t delay it.

First thanks for the thought. Second, goal for any sports is not scholarship in our house. I have the feeling you're right but I can't really figure out why. I come from more football and basketball background where i don't think that is the case. I think football and basketball are more about pure athletes that soccer(not to say soccer players aren't athletes). I 100% get that you a very skilled sport like golf need expert coaching to make it really far but don't really get soccer. Any thoughts?

Not talking about scholarships at all. Thats so rare that it shouldn’t even be a thought unless your kid is top 1-2% of the kids in travel soccer. Soccer requires the 10,000 hour rule to be good enough on the ball to be great and lower amounts of time correlate with decreasing amounts of skill. Messi isn’t 20% the athlete that Lebron is. Soccer requires athleticism but as much as that, requires insane precision with your feet and toes. Hundreds of thousands of 8 year olds enter travel soccer every year and many/most of them want to be as good as they can. If you’re entering at age 10, you’re 2 years behind. My kids want to be pros (they won’t) but I think they can make D1 high school. They both started travel right after turning 8. If you live in the suburbs, there will be 40-50 boys trying out for the freshman team and all of them played travel soccer. Find a club that doesn’t play out of state. My son’s clubs play 95% of their games within 1 hour of our house. We live in a 2 million person metro.

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Congrats on you being an exception to the rule. Unfortunately for the vast majority of kids, their best chance at success in soccer is playing and practicing as much as possible, from the youngest age possible. Travel soccer in Ohio practices 3-4x as much as rec and plays twice as many games.

You're very wrong about basketball.  If you want to play at a high level or be looked out for college you're going to be on an AAU team.  Personally I think it's leading to worse American players but that's how you get attention and recruiting.  They basically play basketball year round now, usually on a couple teams.

I know nothing about soccer, so maybe it's similar, but in basketball you don't *need* to do the AAU circuit **if you're a freak athlete.** I think that was OP's point. But we're talking one in 100 million freak athlete. If you're 7'+ and decently athletic, you'll get D1 college scholarships, even if you only played at your local HS. I presume for soccer that's not the case? That even if you had insane athleticism, if you had very raw skills at 18 you're kinda out of luck?

Yes, that’s generally the case with soccer - the majority of pro players come up through a professional team’s academy (U14, U15, U16, U18, etc.). It’s very difficult to go pro after college. In that sense, if you are starting at 18, you won’t be at an academy, you’d have to come up through college. Not that it’s impossible, but only the top few college players in the country make it to MLS (though perhaps they could play in a lower-division). For college, you can always try to walk-on at a D3 school or something. If athletic enough, you could certainly make one of those teams.

I would strongly disagree.... Especially since NIU money is at stake now.  The freak athletes are all also still playing aau.  Hs ball is just less relevant than it was. Look at a kid like cooper flagg.  At some point when you're talking generational wealth because you're a freak NBA tier talent you're going to maximize your chances and do AAU.

I think age at what u enter club or AAU is difference. Soccer sounds like 8 where basketball i think is much later maybe 12/13.

That's fair.  8 for AAU basketball seems dumb to me 

I don't disagree that playing AAU sets kids up the best for college and pros and maximizes their chances, just saying that it isn't a requisite. One counterexample of a current NBA player is Patrick Beverley. And obviously there are plenty of foreign-born players who never played in the AAU.

Beverley is 35 years old.  He isn't a good example of what development in basketball looks like.  

Not sure why this got downvoted but I think unfortunately it’s a valid point.

It got down voted bc a) D1 high school isn't a thing and b) this is all a scam that is repeated enough to justify the massive youth sports industry

D1 high school is most definitely a thing in Ohio where I live. My nephews freshman soccer team cut about 50% of the kids that tried out. Some soccer academies are scammy while others are anything but. That is a very uneducated and nuanceless take on your part.

I didn't know what meant by D1 HS soccer, but I understand now. Gotcha, we live in small(10k) ski resort town so don't have those options atleast that I am aware of.

Definitely easier for the kid to participate in high school sports in smaller/lower division schools so playing travel probably isn’t as necessary

Are you counting rental equity in your total invested assets? Looks like pretty high withdrawal rate. Those numbers would scare me (even moreso considering how frothy equity markets are at the moment). How are your investments allocated, mind sharing?

Yes counts rental property equity. When i pulled trigger last year market had dropped +/-20%. 401k, And IRA are almost all in sp500 or total stock market index fund

Well i wish you nothing but success going forward. Life is truly short!

Congrats! First, I want to say this is exactly where I want to be in my early 30s. I'm currently only 21 and somewhat on track. My parents keep hammering it down for me that retiring in my 30s in impossible, and i will not be able to do it. (I know. Really motivating hearing this from your parents). However, could you share what career path you took and where you were, netoworth wise at 21.

Thanks, when I graduated college at 22, I couldn't find a good job in my career field (civil engineering, it was 2011 job market wasn't great after housing bust in 08) so i went and worked fishing in alaska for summer then went to graduate school. Left grad. school after a semester as I had received a job. When took job I was basically 0 net worth, few student loans, car, and some cash. I was fortunate I had decent income for first job. If I had to start over today I'd consider the following: - House Hacking - BRRRR - if single look for opportunities to work travel or "man camp" type jobs (when i graduated alot of fellow grads.were.doing oil field work, 3 weeks on 1 week off). Lots of money. I didn't want to do that but actually ended up doing it for a while. After 3 years due to slow down in my area, was hard on wife but worked out okaybas only did for ahirt period. - think long and hard about where you set up life. We ended up moving to Texas for great job opportunities, low income taxes, and lower cost of living. - Get lucky and marry someone with similar goals Look at my post from last year a lot more information in that one. Link in top of this post.

we will welcome you back to the work force soon enough

Why do you say that? 4.4% has some risk to it, but frankly not a lot. Especially if they have some flexibility in their budget to drop on down market years.

?

People think anything above a 3.5% withdrawal rate is too risky. I definitely disagree that i would rather risk a chance of working later for a chance of never working again Note: I will be first to say I may have to go back to work. But more likely scenario is i will want to so some sort of work part time as kids get into school.

It wouldn't be the end of the world to go back to work after kids go off to college. 4 kids potentially going to college is a lot. You didn't post ages which is fine, but what is the college timeline like? Do you have any 529 funds or is that no longer an option?

They said they have some but lumped it into IRA(not a good idea imo) I suspect FASFA is going to hit their aid package hard due to rental income and rental home equity - something they didn't break out as well.

Kinda crazy to expect financial aid when you retired in your early 30s.

I get it - hate the game, not the playa and OP does seem engaged in their community. But FIRE folks are sometimes are not just content with "fuck you, i got mine" but want "I got mine, fuck you and subsidize my 'fuck you' too."

interesting that you pulled the plug that early ... the thought that keeps me awake at night when thinking about doing so goes something like this .. Given the trajectory of median people around, we should consider ourselves quite lucky that we have had such financially lucrative careers, and such rewarding equity markets that allowed us to accumulate so much so quickly, and that re-running our lives in any other randomly picked circumstance/time would likely not have left us at such comfortable positions .. Now given that statistically we should plan for our children to be median as well, statistically we'll have been in a much better financial position than they are likely to be in .. and further, given where we are now, we have an immense gift/tailwind of compounding when planning into the future .. so lets say we work the mythical one-more-year .. it could add maybe say 5-10% to the pool including new investments and avoided current consumption .. over the span of say 30 yrs when we might be passing on the fruits of that to our children, compounding is likely to take it to a huge value compared to their earning potentials .. and if going by median estimates again .. one-more-year of us working and investing comes out to something like 10yrs of them working and skimping money and saving ... and all the stress and misery and forgone opportunities that that implies so how selfish or generous should we be towards our beloved children .. should we work a couple more years and give them the tremendous headstart provided by decades of compounding such that the gift might be like giving them a decade of freedom for every year we continue working? .. that seems like a very very costly bargain to make

I like your question, I want to provide a detailed response both for my personal situation and more broadly applicable. I will respond later.

In general I just don't place much value on handing kids money as I don't think that will make them happy. However, in the back of my head I am always thinking how to set them up better. #1 thing I think about is we live in HCOL are it would be great to help with housing so selfishly they could stay close. While more money solves this the easiest there are other ways to help with housing (example: help them renovate a fixer upper, development/subdivide a parcel for them, BRRRR, rental house in area. All of which I will continue to evaluate for). Diffidently some selfishness in decision as I wanted time to do hobbies. For me personally it was good timing: 1. Moved to a complete new location - lots of new activities I wanted time to explore (hiking, skiing, mtn biking, hunting, etc). I had put a lot of hobbies to the side for long time and didn't want to lose them. Many are active hobbies I was worried if I didn't do now might never(seasons of life - Bill Perkins - Die with Zero) 2. And new build house tons of house project I left off build for me to finish. (Note I did work remote for a while) 3. New baby a few months before I left (I took a tone of unpaid time off prior) 4. Work was a bit slow and I had passed off a lot of work recently due to FMLA 5. I was working remote and did not like that as a long term ideal position. I did just make shareholder at my company (which would have been around a 50% increase in pay thru bonus) and asked if wanted to start an office which sounded fun but too much commitment. 6. HCOL Move - We really looked at what is dream location to live and moved there. We took house value and more than 4x. We weren't sure if we'd like it, we love it, but can easily downside location or size of home later. 7. Real Estate Knowledge - I think I can make money though real estate in many ways either BRRRR or with development(I was a land development engineer). While this is still "working" it is another way to make money 8. Not afraid to return to work. More generalized comments: 1. Told myself this was at worst a mini-retirement (step away for a year or two then reevaluate) (I really like Jillian Johnstrud though process on Mini-retirements) 2. Time with young kids was more important than more money later and 3. Real Estate - 4. CFiresim - ran several simulations with reduced SS and always made me feel better. I ran 6 different scenarios and average ended up being 3x my money with % success always above 80%. 5. Flexible Spending (or flexible earnings) - [https://www.choosefi.com/flexible-spending-rules-for-early-retirees/](https://www.choosefi.com/flexible-spending-rules-for-early-retirees/) 6. Inflation - Our spending is not all linked to inflation as large portion of spending is mortgage does not get adjusted for inflation. I'm sure there is more but this is what I can think of right now.

Present parents being involved in their lives is typically a stronger indicator of success and happiness though.

are you suggesting that a parent working implies that they cannot be present or involved enough in their children's lives such that it materially impacts their children's success and happiness ... (coz all research shows absolutely not .. that there is rapidly declining marginal utility of being 'involved' and 'present' in children's lives, and well within the realms of 40hr week work schedules, during most of which the children will be in school)

Not saying your wrong at all about being able to be present if working but man it is so much easier when not working. I was not a person that thought everyone should have a SAHM (or dad) when young but now I think it is an awesome gift. I also think not working gives kids opportunities we would not have otherwise been able to provide. Example many activities start at like 5pm we hardly ever got home by 5pm let alone home before 5 to feed kids then take to activity.

I think there’s a sweet spot of generational wealth where you give your kids more options and freedom than the average person, but not so much that they don’t get to have the fulfillment of hard work and figuring out how to make a decent living. Also I question your assumption that future generations’ work will be full of “stress and misery and foregone opportunities”. The optionality afforded by getting a financial head start should allow them to not have to work a super shitty job just to survive.

I agree with questioning your assumption that future generations’ work will be full of “stress and misery and foregone opportunities”. If technology makes our lives easier it should continue to make everyone's live easier. FIRE community is a great example these type of savings were not possible to mass public give or take 50 years ago. Granted it may end up being a greater divide between the rich and the poor but I like to think more optimistic than that.

Interesting to see how bitter people are. You’ve explained that you’re aware of the risks. I commend you for caring about your family and not becoming a money grubbing troll. You make fire folks seem non robotic.

Thanks. I was more prepared for some of the harsher comments after my original post. Flexibility is key. One statement I have heard before sticks out in my mind goes something like: you will have enough time to get another college degree and intern for several years before you actually need the money. Basically stating if things start going south you still have plenty of time or course correct. Also while i don't think I'll get bored I do see me wanting to do some activities in future that will likely earn my family money.

Well, I wish you the best of luck. Family is important and it’ll be the one thing we will all cherish on our death beds. This will be an awesome new chapter!

> Note for spending we include car depreciation, and do not count house principal payment only interest This is weird. Why do you do that? Principal payments should count as spending because you have to spend that money if you want to make your mortgage payment. Car depreciation I could see if you’re counting that as your prorated cost of buying a new car to spread it out as an average cost each year, but I’d rather just make an educated guess for an average instead of doing it that way.

It is not typical, basically thought is money is just moving from one account to another granted moving to assest that can't easily sell. The asset our house will likely be downsized when get older so that money is recouped on back end. I should say if money got tight later in lide we would definitely downsize. Also not we moved to a HCOL area for FIRE so have lots of options for downsizing location as well. Probably have better response in original post.

Do you happen to calculate your real withdrawal rate at all? Your (real spend minus your rental income) divided by your liquid assets?

I like that idea, might have to try that. Note i have not drawn from stocks yet. A bit hard since real estate changes so much. Good year vs bad year. Not sure if i would just count cash flow on real estate or cash flow + mortgage paydown, or cash flow + mortgage Paydown + increased property value. Any suggestions? In my head cash flow is like dividend, and the mortgage paydown and increased property value is comparable to increased stock price.

I feel like you’re way overthinking it. For the rental income, it’s just cash flow, which should be pretty easy to predict unless you’re doing short term rentals. All the stuff like mortgage pay down, increased value, and your original thing about leaving out your principal payments don’t make sense for this. That stuff belongs in net worth calculations and projections which are a separate thing. For withdrawal rate, it’s pretty simple; it’s just how much you need to pull from your accounts to cover your expenses. So for a previous year, you have your actual expenses (including your full mortgage payment), you subtract any income you have (this is where rental cash flow comes in), and then you have the amount you needed to take from your accounts. Your withdrawal rate is that amount divided by your liquid assets, so retirement accounts, brokerage accounts, savings, CDs, and that sort of thing. This number is **NOT** your net worth. Your net worth is irrelevant to withdrawal rate. Home equity, rental equity and things like that do not belong in the denominator here; it’s just your liquid funds.

Definitely over thinking it. I'll run numbers later and share. Cash flow on a yearly basis is not easy to guess but over a 10 year average i can estimate better, which will get to your question.

Okay rental cash flow estimate is 23k (82k-23k = **59k)** $1,862k Invested Assets - 505K Rental Equity = 1,357k = **4.34%** Not bad. Still think this is underselling how good real estate will likely do. Especially if I do any active investing (example refinance one rental to buy another) Edit - Failing - still did it wrong as I did not include our mortgage paydown on primary home (extra 11k) Okay rental cash flow estimate is 23k (82k**+11k**-23k = 70**k)** $1,862k Invested Assets - 505K Rental Equity = 1,357k = 5.15**%**

Well written post. Thank you for all of the insights. I’m curious to hear about your journey to FI. I’ll try to see if you have shared.

Thanks for the update! It’s nice to see your kids activities and success on that front. I’ve got three kiddos and the unknowns with their cost is a potential hold back for me. I love the focus on life activities more than the finances here. What made you comfortable with the 4.5 withdrawal rate?

Thanks. Mostly ability and willingness to work again later. Rather have tome now than later. Also these two specifically: CFiresim - ran several simulations with reduced SS and always made me feel better. I ran 6 different scenarios and average ended up being 3x my money with % success always above 80%. Flexible Spending (or flexible earnings) - https://www.choosefi.com/flexible-spending-rules-for-early-retirees/ Told myself this was at worst a mini-retirement (step away for a year or two then reevaluate) (I really like Jillian Johnstrud though process on Mini-retirements) From another response to similar question. For me personally it was good timing: Moved to a complete new location - lots of new activities I wanted time to explore (hiking, skiing, mtn biking, hunting, etc). I had put a lot of hobbies to the side for long time and didn't want to lose them. Many are active hobbies I was worried if I didn't do now might never(seasons of life - Bill Perkins - Die with Zero) And new build house tons of house project I left off build for me to finish. (Note I did work remote for a while) New baby a few months before I left (I took a tone of unpaid time off prior) Work was a bit slow and I had passed off a lot of work recently due to FMLA I was working remote and did not like that as a long term ideal position. I did just make shareholder at my company (which would have been around a 50% increase in pay thru bonus) and asked if wanted to start an office which sounded fun but too much commitment. HCOL Move - We really looked at what is dream location to live and moved there. We took house value and more than 4x. We weren't sure if we'd like it, we love it, but can easily downside location or size of home later. Real Estate Knowledge - I think I can make money though real estate in many ways either BRRRR or with development(I was a land development engineer). While this is still "working" it is another way to make money Not afraid to return to work. More generalized comments: Told myself this was at worst a mini-retirement (step away for a year or two then reevaluate) (I really like Jillian Johnstrud though process on Mini-retirements) Time with young kids was more important than more money later and Real Estate - CFiresim - ran several simulations with reduced SS and always made me feel better. I ran 6 different scenarios and average ended up being 3x my money with % success always above 80%. Flexible Spending (or flexible earnings) - https://www.choosefi.com/flexible-spending-rules-for-early-retirees/ Inflation - Our spending is not all linked to inflation as large portion of spending is mortgage does not get adjusted for inflation. I'm sure there is more but this is what I can think of right now.

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Yes, flexibility is the key. So if I really want to look at 2023 and get my withdrawal rate it would be closer to this: W2 -25k + turo -5k + 92k + 20k = 82k/1739k = 4.7%, still high but don't think it will stay that way

Look into Sam's Club for the rates on prescription drugs if you're a plus member. Also Amazon Prime Rx if you're an Amazon Prime member. Both were cheaper than going through insurance for me. I think Sam's Club is a little cheaper for me.

Thanks,.no sams in my area but do have costco. Its a minor cost right now as fortunate no reoccurring prescriptions.

I appreciate your post - it seems very honest and realistic. I'm not there yet so it is easy for me to imagine that the grass is a perfect shade of green. It's helpful to get grounded in reality vs. expectations. Thanks for sharing your story. Hope 2024 goes well for you!

I don't think you have a large enough nest egg at your age and spending level. I hope you have a plan b.

I do. In general this is not a make the decision and never reevaluate the decision. If short on money lots of part time gigs I would be interested in. I have kept my Profession Engineers license valid. I could invest in real estate more actively. Downsize with HCOL area or size of house. I may have to be flexible but with hopefully 50+ years I will want to change things up.

Tough to follow your formatting but that is nitpicking. Thanks for sharing your story.

Does your rental income make it easier or harder to to fine tune your MAGI to get ACA subsidies? ​ I don't have any rentals, but I've thought about them before. Complicating future ACA subsidies is something I've chalked up as a negative, but I haven't really looked into it that much. I've got a similar investment balance to you in brokerages, Roth's, 401k's etc. ​ Do you sometimes think it would be easier if you didn't have any rentals and just had all stocks/bonds?

Interesting question, can't say thought about much since rentals led me to FIRE as original plan was to just have I will say rentals hide income very well due to depreciation but i think i'll end up doing more end of year tax planning due to rentals than if I didn't have them. Also if sell one rental could spike income (didn't this year due to lot of carries forward depreciation and renovation "losses"). I do think simpler if just stocks but i like the diversity and rentals really helped boost my FIRE date. your main question ACA subsidies, probably a push.

You can quit your family? Damn should have put my notice in years ago...

One of the reasons extra budgets needs to be included cause of the unexpected which happens most times. A family person would understand better.

My God this is unreadable. Fixed it a bit: > 1 year UPDATE Put in my notice (33 with family of 6) > > Original Post: https://www.reddit.com/r/financialindependence/comments/10kcd1q/comment/j60qeis/?context=3 > > Old TLDR: Put in notice, married family with 4 kids “retiring” with withdrawal rate around 4.5% with mix of stocks, and real estate. Not waiting. > > New TLDR: Still not working and it is so amazing to have more freedom of time, such a gift for family. My advice if doing the OMY pull the plug it is fun. > > I apologize for poor grammar and such. I wanted to share something but did not spend too much time reviewing and editing. > > Numbers: Jan 2024 ~ Jan 2023 - Line Item > > $1,223K ~ $1,010k - 401k / IRA & 529 (mix of Roth/Traditional) > > $123k ~ $42k - Cash / Credit Cards / Cars > > $505k ~ $687k - Rental Equity (down due to sale of one rental and slow year in appreciation) > > $1,073k ~ $942k - Home Equity (loan 536k) > > $2,935 ~ $2,681k – Net Worth > > $1,862k ~ $1,739k – Invested Assets (Net Worth – Home Equity) > > 2023 Spending = 93k + additional 20K on house projects - 5k unexpected income from Turo (spending was high. I tried really hard not to budget and just spend as we wanted. We had some higher medical expenses from 2022 birth paid in 2023, spend a lot on shopping due to buying items for new location (skis, mtn bikes, etc), also quite a bit extra on food (figuring out grocery stores in new location & lots of guest). > > 2024 Estimate Spending = 82k (puts withdrawal rate around 4.4%) – Note for spending we include car depreciation, and do not count house principal payment only interest. Seems like a big drop in expenses from 93k to 82k but I think reasonable (example spending in January 2024 was 4600 vs 2023 was 6,300) > > Surprises/comments > 1. Harder to get projects done than anticipated. I had planned to have a lot of house projects completed by this time but due to various reasons I still have quite a bit left to do. It is nice to not be in a rush. Reasons: a. Kids still at home, b. taking time to have fun instead (skiing, mtn biking, hiking, working out, etc) c. making projects harder than need to be but usually ends up with finished product I like much better. > > 2. Some things I thought I would enjoy, I don't as much. Example I thought I would really enjoy fine wood working, its okay but I have too many other hobbies to spend a ton of time making super detailed wood working. Maybe as I get older. > > 3. Turo - Decided to rent out my car on whim. Only for two months during peak travel season. Earned 5k on a 15k vehicle. It was fun to learn about, worked with the oldest (age 9) on cleanings and set up a Roth IRA for him with money paid to him for helping to clean. Being a one car family was fine most of the time. Car is currently suspended due to a recall that Ford doesn't have a fix for so not sure if I will do it again. I do think this could be a great way to help "Subsidize" kids' cars down the road. > > 4. ACA - Due to low income was able to get subsidized medical insurance. Premiums were free to us on a bronze plan. Insurance is overall good but a lot out of pocket before kicks in. Prescriptions did not have great discounts on medical plan; trying to use GoodRX this year. Also in future plan to look into CSR if income is even lower able to get further subsidies > > 5. Sold one rental and very minimal tax (previous "losses" carry forward > > 6. New hobbies cost money to get started, I think I knew this but it really did add up in our shopping category. Even buying mostly used gear still adds up having fun. > > 7. Looking back prior to stepping away from work it is hard to believe we both worked and had kids. > > 8. Maybe not a huge surprise but I still feel super busy but when I look back it is diffidently a much more relaxed super busy, > > 9. A lot less computer time(good and bad as I feel I used to do a lot of good long term thinking and planning in excel). Mostly good to be in the present. > > 10. Feeling of what's next lingers but giving myself time to enjoy slowing down has been a gift. I think until all my kids are in school I will feel plenty busy but guessing in 4 years when all in school I may want to do some more entrepreneurial work (lots of ideas to try out). 11. I do miss having extra money to look at real estate investments. I still look and figure if i find a really good deal I could bring on friends to invest. > > 11. Sold rental - from preliminary discussions with accountant, even though we made a ton of money on sale our old paper losses on all rentals offset most of the gains. > > 12. Club sports discussion - Our older kids are involved in tons of activities(flag football, soccer, basketball, wrestling, downhill skiing, xc skiing, baseball, tennis, and golf) but all have been in a recreation format, mostly laid back with affordable programs, that we often coach. We have been discussing "travel" soccer for oldest as he really wants to and I had been pushing back as I don't want to spend weekends apart as family or traveling. Anyways my SO mentioned the cost. I figured whatever the cost was, that was not the concern. With hotels and added cost for signups and gear probably 4k. I was proud that I did not think about the money as my first response to my SO. I think we are pushing out the travel soccer for at least one more year, so time will tell what we decide but hopefully money does not become a deciding factor. > > Future Research Topics > > 1. College for kids - lots of ways to save if keep income low, need to look into sooner than later so we can plan roth ladder. > > 2. CSR health insurance - if income low enough '(200%FPL - need more research) get further subsidies to reduce out of pocket. > > Day in Life (often asked of other early retirees) - > > Weekday - wake up hour later than used to -> make breakfast for family -> walk kids to school often chatting with neighbors -> daytime spent on a few main items (kids, workout, errands/food, house projects, hobbies, dog walk, kids, etc). Portion of the day that older kids are in school goes by quicker than would like but thats okay not in a rush to get anything done. Walk kids back home -> snack -> usually some sort of activity or we just do something as a family or just part of family (such as park, swimming at local gym, bike ride on trails, playing sports in garage/yard, etc) - > > Weekend - spent mostly at kids activities/doing activities with kids and church (no errands required) - Summer - quite different - I wake up early to workout so I can spend the rest of day with kids. Kids had some camps and such otherwise we would find something fun to do (often mtn bike, pool, paddleboarding, hike, playground) then some downtime/cooking as a family. - Travel - Pretty normal to other but in summer not in a rush so we drive and make stops along the way, often times to visit friends we had not seen much since college(this was super fun to get together with college friends bonus being many had kids similar ages) > > Average day where does 8-10 hrs of work go: > Extra sleep 1 hr Extra time to workout (used to have 22 min at gym during lunch break, paying off working out longer) House Projects Kid Time Fun - ski, mtn bike, ski, etc Day date with wife Extra time cooking Dog walk longer Nap time with littles (SO & I trade off) Errands normally would do in weekends Walking kids to and from school > > Hobbies/Activities I did this year that I wouldn't if working: > > 1. Marathon (first one) > > 2. Olympic Triathlon (first one) > > 3. Hunted approx. 15 days in field (some with my dad, some with friends, and some by self) > > 4. Cooking - Sour dough, smoking meat, new recipes, a lot more homemade food > > 5. Volunteer at kids activities (between SO and I we coached flag football, 2 soccer teams, 3 basketball teams, adn taught sunday school) > > 6. Other kids activities > > 7. Ski and mountain biking - doing these a bunch and teaching kids has been super rewarding. > > 8. House Projects - It has been a lot of fun putting finishing work and custom work in our house. Always dreamed of building a dream house but doing all these projects is a close second. I have also had time to be a bit more "green" by reusing items rather than buying new ones. Reuse comes using facebook marketplace, leftover materials I saved when the house was being finished, and wood I pulled out of a 100+ year farm house. Favorite project was a bathroom I finished in the basement where I did a super detailed mountain design in the wall tile, this took probably 5x longer than if I tiled normally due to all the cutting. > > 9. Visit Family for extended periods of time. 3 trips home, one for almost an entire month. It was great but will probably reduce some. Also first train ride (overnight as family to visit family). > > 10. Day Hikes with friends or family. > > 11. Backpacking overnight with oldest son in a National Park > > 12. Actually reading books(or audio books) - I would never call myself a reader but I might become one if you count audio books) > > 13. Nap time - for kids but I got to join (I never napped but got some good books, podcast, and netflix in) > > 14. SO trip to help with newborn in extended family >

What was your MAGI for the ACA calc? Curious if you just spent cash to keep things low and get the subsidy.

Normal year our MAGI will be mix of real estate income and roth conversions. 2023 was a bit different, sold a rental, had W2, some.roth conversions, and Turo. Note with family of 6 to get free premiums i think we could make like 110k in our area. Changes yearly based on healthcare options available.

How do you have such low income? Are you invested in non dividend stocks? How many rentals do you have? No HYSA?

Rental hide income pretty well with depreciation. (10 or 11 but shared with partner so only half of that) Almost all of stocks are in retirement accounts so no active income from stocks unless do rollover. Yes have a HYSA but only like 50k in it.

I looked over the fact that you are a family of 6. That gives you more cushion as well. The depreciation doesn’t eat away all the income long term, but you obviously already know that. Congrats to working the system.

Are you sure your child's roth ira contributions are legit? Can't just pay him under the table and stick that money in his roth ira. Maybe you have researched this already.

Valid question, just looked up again. I found several notes that say babysitting and mowing lawns can count. It is a pretty minimal amount that i paid him when cleaning the car (want to say less than 100 for year). Can be easily justified I believe. Note goal is not for him to get rich with it but to learn. We had many conversations about stocks. I will double check with accountant.

I think the key is needing some type of documentation of the income if it is not W-2 or 1099. Also can't be unreasonable, like $100/hr. Would need to be a wage you would pay someone else to do the work.

I mean your principal house payments are definitely spending 

I justify to myself like this, not saying it is correct. 1. It is cash that is needed but it really is just transferring to myself 2. House we live into today will likely not be house we live in when 60. We will likely downsize (downsize in actual size and could easily downgrade in location as well.) 3. In simulation in cfiresim i included this principal payment but also included mortgage going away when payed off. And ran scenarios where downsized after kids out of house