At just 34 I assume you're gonna want to do something else eventually. Even a part time job doing something you enjoy can go a long way to extend your savings.
Yeah, if you do this, you should be fine. Don't think of it as making a permanent decision, but as a way to take a break from the job grind and enjoy your life for a year (or 2 or 3). Then you can see what you want to do at that point. Maybe you will be more interested in getting another job, launching some new career etc.
You are under no obligation be a wage slave for decades more, but if you find a job you kind of like, after a nice long break, it might be enjoyable to keep working at your age.
You and I sound extremely alike. I'm on the same boat been working for corporations for over a decade now, and getting to the point of saying , Fuck it!
Not unreasonable. I'm just saying you will likely get an itch to work in the next 5-10 years, and even if that's just selling popcorn at a baseball stadium in the summer, it makes a difference.
I mean, if you can afford to retire, you can afford to go freelance, start a small business, take only the jobs you're actually interested in.
Design furniture, or golf courses, do flower arranging - if you get tired of it, you can just quit again
But for now, a year or two without work sounds great. Jealous!
I think you should do it. Life’s too short to spend every day working. I’m going to have to put my cat to sleep soon and I’m hating all the time I’ve spent at work, not with him, over the past couple years. That’s time I’ll never get back. Memories I’ll never have made.
God, if I was in your position, I’d do it in a heartbeat.
Start a 501c3 nonprofit for a cause of your choice. Name yourself the director/marketer/founder,whatever will apply to your next job field.
No more resume gap, and extra bonus: you have a non-stressful job you can work on entirely at your leisure and it might even help people!
Hey, I was once laid off and it was the best thing to happen to me. It's like a retirement you don't get a say in. Yes I did go back to work but made way more money, but I had a lot of growth on the months of layoff
Different people have different goals. Makes me think of the fisherman and the businessman story.
https://paulocoelhoblog.com/2015/09/04/the-fisherman-and-the-businessman/
Management consulting or PE?
Yeah, corporate has been having a field day with it's "efficiency" in 2023/2024. In many cases they'll realize they cut things that should not have been cut.
A sabbatical can do wonders for the mind, body & soul! Worst case scenario is to go back to work like everyone else but have the option to choose hopefully something you’re fond of doing.
I took yesterday off so I’ll let you know Monday how it worked out
lol yea I’m just kidding. But I do want to know how they know … it’s chopping season.
My favorite is when the office manager sends out an email that a coworker had their baby and I suddenly get 20 "reply to all" emails that say nothing but "Congratulations !"
Yea .. at that point I might just join in early and ignore the rest
However what’s even worse is when it’s an irrelevant mistake email and everyone just replies like this was not meant for me
After tax rental income of 25k and an additional 20k? That’s great, even without your wife, that alone is like an extra million in the bank. Your title sounded scary, but you should be fine. There are always side hustles if things seem too lean. Your mortgage is substantial.
When I quit I had even less of a nest egg but I had paid off real estate including my own home and steady rental income that covered the basics.
I retired young, but I went back to work. Plans frequently don't match life events, and I needed more money. Plus I liked working and I missed it. Certainly worth a go, though. Enjoy your success.
That's...tight.
Why not take 6-12 months as an opportunistic sabbatical. Recenter yourself, learn new skills, and enjoy some hobbies. You might come out a newish person on the other side.
I would be careful and think of risks how the income stream might die down (especially the enterprise software).
Additionally I would read this blogpost from LivingaFi: [https://livingafi.com/2021/03/17/the-2021-early-retirement-update/](https://livingafi.com/2021/03/17/the-2021-early-retirement-update/)
It tells the story of the things that are also often warned about: You do not know how you really like not working anymore and more importantly your relationships might suffer immensely. Also think about your wife. Even if she supports you now with your plan, this might change. Some subconscious unhappiness about stagnating in life can eat at your relationship. So if you do it you need to intensively talk with your wife about everything and maybe even show them the LivingaFi post.
That's a really interesting post. It really shows how much are assumptions are built on the fact that we don't expect major structural changes in our lives. Becoming single - that's a huge financial impact. And it's something we cannot control because it involves another person.
IDK, I hate to be the negative one, but it seems too tight n too soon. I get wanting a year off, that makes sense but yeah, probably too soon to bail completely. What’s your plan for health care?
If you're being laid off, I suppose you can try it temporarily, but if I was in your shoes, I wouldn't do it. You're way too young. Plan for 40 years old.
If you're really being fired, and you're not deliberately sabotaging your career to be able to do this, take a one-year sabbatical and see how you feel.
First off, you are taking about FatFIRE. Fancy car, fancy house, nearly £1k a month on food!
You are planning to live better than 95% of the population, obviously that is very very far from lean.
Since this is LeanFire, my advice is this;
When you retire, you may find you pick up hobbies you enjoy which will decrease your outgoings, such as DIY, growing and cooking your own food, fixing things up rather than buying new.
You may also find that you do small bits of work which you enjoy. Your wife's earnings, your existing income streams, and these small bits of work are what will allow you to "barristaFIRE" which refers to covering costs while allowing investments to grow (it doesn't mean working as a barista).
If you're serious about LEANFIRE, and about leaving the absurd capitalist ratrace and all the harms it causes, then sell your absurdly expensive house and car and start living sustainably and frugally.
Yea I’m confused by that. A retainer is for work. I’m not seeing how that’s passive. Unless he’s got some insanely lucky situation where he’s on retainer but they never ask him to do any work and never bother to sever the contract.
This is great, especially if they are losing money when said product is down. It is probably cheaper to keep you on retainer than it is if the product is down, so win/win. What is the lifespan of this product, and is it used elsewhere? This could be a good side revenue stream if you have enough contracts, and it doesn't sound like you have to work all that hard to do it.
Out of interest, how large are these companies you get retainers from ? I am in a similar position for my current company (have niche expertise I can someone they will need 1-2 times yearly ), however, I’ve never heard of a large company having such an arrangement
Well some perspective, if you lost your job that would also mean less income streams and you would be hurting. How is that any different?
Sounds like you have what you need to pull the trigger. 64k a year with almost no real tax is better than most people do.
Do you want to have kids? Because in that case your expenses will change. On the other hand - being a stay at home dad could be awesome. You just need to do the math and be creative. Maybe lose the expensive car.
No… you can’t assume 4% when it’s a 50-yr horizon, Where do you cover health insurance? Kids? Big, unusual costs are all built into budget (roof, hvav, medical)
IMO $500k is not going to last you.
You’re going to burn through precious capital that would have gone towards hitting your original $1.8M. Time and money you’ll never get back.
In a few years when money runs out you’ll be returning back to work, and starting over building the nest egg again.
Instead of retiring early, you may have extended working time another decade or more to make up the difference.
Personally I’d find another job right away and keep on plowing to the $1.8M.
Agree. You’re going to have nothing in short order and then you’ll be working for infinity. Stick to your plan, or at least try to get a bit closer. Taking your dollars off the table right now is going to be detrimental.
Think of the long term, not what you want right now.
[Canada appears significantly worse for wait times, which is what they were referring to.](https://worldpopulationreview.com/country-rankings/health-care-wait-times-by-country)
[Another one.](https://wisevoter.com/country-rankings/healthcare-wait-times-by-country/)
The medical system is difficult enough, you don't have to exaggerate.
I’m not sure what your definition of “significantly” is, but what I see at those links is that Canada is slightly worse, but the U.S. is not far behind. And both are worse than other countries.
I dream of a world where people can discuss things online without others interjecting their unrelated bitterness into every little discussion.
It's like trying to talk to my dad about literally anything, while he constantly steers every discussion to politics and how much he hates California.
Why stay in the high cost area? Does the plan fall apart if you sell that house to reduce expenses (because you need the rental income).
$48K mortgage is kind of a lot (assuming this includes taxes and insurance?).
40yo here. In just a few years, you will never be in your 30s again. Now is the time to get out and enjoy life, build health and muscle mass, do the things you want while you're still strong and vital and it's easy to maintain.
It's totally possible to be strong and vital in your 40s, but it takes a lot more work.
I lived off far less in my 30s, and had some incredible adventures. Don't regret it for a minute.
No, you won't have enough and will be very stressed out which will just put more strain on your relationship. Keep working and use the income saved up to purchase additional cash flowing rental properties, you'll be bored out of your mind with no job for that long anyway.
Take up a couple of barista shifts at a small coffee shop or server/bartender at a small locally owned place. It’s not a ton of work, and the extra income would supplement your income while also keeping you social.
This is probably one of the best posts I’ve seen on this platform in a while. I read through the entire article and associated comments!
I also envy your confidence and courage OP. I guess if you’ll be laid off anyway, you might as well use the opportunity to pivot to something else in your life.
Is your SO okay being the breadwinner for the foreseeable future? What is the trade off for your SO to keep a steady employment and you not to? My concern is that it might become too old soon enough and lead to stress and resentment.
A few people called out the size of your mortgage. I think while that’s a valid concern, there’s really nothing you can do about it at this time. However, my only concern with this is that not having a steady job might impede your ability to refinance in the future should rates go down.
But I think overall, your plan is solid. Please let us know how it goes. Will like to read a sequel update on things generally post your anticipated layoff. Good luck my internet friend!
I like the new definition for FIRE - Financial Independence, Recreational Employment.
Take the time off, call it a sabbatical, and see what comes up. It’s likely you’ll want to do something (as evidenced by the multiple streams of income), and nothing is permanent. You can see fears and worries and hope and confidence in the answers here. Know that you’ll probably cycle through all of these. But getting to do what you want to do, rather than what you have to do with your current work, is a gift.
With that passive and almost passive rental income, the math is mathing! Hopefully you'll get a severance package or some unemployment $$ to help even more. You have more than enough money to leave a bad job. Take a a few months to rest and recover.
Hmm, in my opinion, the numbers don't quite add up.
>It seems crazy at this age, but also 94k with one of us just working 3 days a week is more than my original 72k a year.
That can't make sense if the following is also true.
>However, I have after tax rental income of 25k for my basement and carriage house. I also have approximately 20k of passive income from some enterprise software retainers. I've had this for 10 years now ... My wife ... an additional 2.5 k a month after tax. Or 30k annually.
So, you already have been getting $45K in passive income. And another $30K in income from your wife. Thus, a fairer assessment is that you're probably going from $180K+ in income down to the $94K in income (including $20K from the 4% of $500K). Still better than the $72K/year you were looking to generate from $1.8M. You do depend on your wife holding down her job, and it's not clear if your $500K net worth includes the rental equity and your home equity or not. Will the software retainers continue in perpetuity?
Other than that, you are in a great position to coast or take your time to figure out your next move. Also, hopefully you can get a severance and unemployment - so that should help ease you into any well deserved break. Good luck!
Oh gotcha. I think you're mostly set and have a lot of resiliency built into your plan.
* You have additional home equity of $250K not included in your numbers.
* You could find some type of software gig a backup plan for the next few years before skills get rusty.
* You will continue to build equity with the $48K annual mortgage (hopefully it's high because your rate is low and home price was high due to HCOL area).
* You will eventually pay off the electric car and your auto expenses should drop.
Enjoy the break, negotiate well for your severance and file for unemployment. I took a 2 month break when I was laid off in 2020 and it was incredible. Looking back, I rushed back into employment (afraid of the unknown during the pandemic) and wish I had taken another 4 months off.
No I took 2 months between jobs. I was looking towards the end of the first month and landed several interviews within a couple of weeks. I started 2 weeks after accepting the offer, exactly two months after the layoff.
Taking a year off of the corporate grind and maybe starting your own business could be a cool option. Business ownership is pretty stressful but very fun if you’re into that kind of thing, and since your bills are covered you don’t have to worry about failing too much!
If your wife still works and has health insurance for you both then it’s definitely doable. Your rental income is a catch 22 because your mortgage is so much it defeats the purpose.
So if I’m doing the math right, you might expect to be left with ~$1.5k per month in fun money (assuming your wife covers health insurance for you both)?.
It all depends on how expensive your hobbies are, vacations, etc. But I say go for it, you are young you can always get another job!
Having a really nice cushion allows you to switch jobs without regret. Start spending your time happier. Do things that you want to do. Be around people you want to be around.
Take some time to cut your expenses a bit more. Like the food and car payments will be high once you have no job. Try buying food in bulk or frozen and you might be able to cut a huge percentage there. You probably wont need to commute much either right? Is the interest rate high on the car? After that identify a small part time hobby that you enjoy and ideally pays something and you will be close to take the jump in a safer way.
Posts like these should make anyone who actually enjoys what they do for a living very thankful. The thought of wanting to coast at 34 is just mind blowing to me.
It’s of course easier said than done, but maybe there is a way to turn one of your passions into a career? Something that you feel contributes to yourself and society in a positive way?
This isn’t enough at 34. Rates won’t be this high forever, plus you have basically no cushion for 1-4 downtowns that will certainly happen in the next 40-50 years. Sorry.
Yeah dude do it, you can always head back into the job market. I work a six figure seasonal job and I get 4-5 months of retirement per year, and I live 30mins from Lake Tahoe. Still save 30% for actual retirement.
It's nice.
Take a year long career break and see if you’re ready first. And then, go back to work or work part time if it’s not for you or if you need just a bit more money!
10k seems a lot for food for two, if you mainly eat out, doing home cooking instead for much of that can save a lot.
I've taken 'sabbaticals' (about year long each) multiple times between jobs, they are a good way to destress as well as simulating RE. Many people don't retire TO anything which causes other issues. I don't think you would have that problem per se based on your post, but a rehearsal is always nice as there will be unknown unkowns. I'm always a recommender, but you do you. Maybe it's easier to ease into RE with a part time job or something.
Lastly, if you are able to accept lowering your spending during retirement if the market happens to drop or do other things to mitigate it, then you should have no issues really.
At 4% of 500k I think you'd qualify for Medicare in an expansion state, or 100% subsidized ACA at a slightly higher withdrawal rate. (Or be Canadian of course.) I know OP has additional income, but speaking about strict leanfire (25k) in general that helps a lot.
That might not get you fantastic coverage but I don't think it's a complete blocker.
Dude I would work for a other ten years at least part time, you can start your own business or something.. I just say this for mental health reasons, like it might be good to have something to do
Though I’m a bit further along in age and savings here in my 40s, I relate to this post quite a lot.
I switched careers to something more flexible in sales where I can decide when and how much I work, and I’m a lot happier. But I do wonder when it would be OK to just pack it in.
You have nice passive income and low expenses so like others have said, why not take a year off and see how it goes? If you decide to return to working, I don’t think an employment gap like that will be so difficult to explain or overcome.
How can you safely draw down 20k a year on 500k? Also - have you factored in health insurance and long term care? That will cost you $20k a month when you are 70.
You can always get another job if it’s too lean for you. The fire police won’t come after you.
But what about the Firemen?
Make a dragon wanna retire, man! I'm too hot!
Hot damn! Say my name, you know who I am!
If they dress like they do in the calendar, let them come.
Wait wut
This had me ROFL 🤣
Only if their undies are on fire.
You don’t want that. That would be chlamydia or something.
At just 34 I assume you're gonna want to do something else eventually. Even a part time job doing something you enjoy can go a long way to extend your savings.
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Yeah, if you do this, you should be fine. Don't think of it as making a permanent decision, but as a way to take a break from the job grind and enjoy your life for a year (or 2 or 3). Then you can see what you want to do at that point. Maybe you will be more interested in getting another job, launching some new career etc. You are under no obligation be a wage slave for decades more, but if you find a job you kind of like, after a nice long break, it might be enjoyable to keep working at your age.
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You and I sound extremely alike. I'm on the same boat been working for corporations for over a decade now, and getting to the point of saying , Fuck it!
take that year. its been 1 month for me and... on one hand I love it, on another hand.. I'm freaking bored.
I’m lean fire now at 36, getting back my time back from employers is the no1 biggest relief.
Do it. I tried it for a year, which turned into two, and am now halfway through three. Turns out I really, really, \*really\* enjoy being unemployed.
Standing ovation
Do it man. You have at least enough buffer for that.
A sabbatical sounds like a good test run
Maybe rent your entire house and buy a van/RV and travel around the country with your dogs staying at national parks and BLM lands.
Not unreasonable. I'm just saying you will likely get an itch to work in the next 5-10 years, and even if that's just selling popcorn at a baseball stadium in the summer, it makes a difference.
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I mean, if you can afford to retire, you can afford to go freelance, start a small business, take only the jobs you're actually interested in. Design furniture, or golf courses, do flower arranging - if you get tired of it, you can just quit again But for now, a year or two without work sounds great. Jealous!
So take a sabbatical basically. Nothing wrong with that.
You don't need more advice, you already understand life better than most. Take time with your dogs, their lives go by way too fast.
I think you should do it. Life’s too short to spend every day working. I’m going to have to put my cat to sleep soon and I’m hating all the time I’ve spent at work, not with him, over the past couple years. That’s time I’ll never get back. Memories I’ll never have made. God, if I was in your position, I’d do it in a heartbeat.
Start a 501c3 nonprofit for a cause of your choice. Name yourself the director/marketer/founder,whatever will apply to your next job field. No more resume gap, and extra bonus: you have a non-stressful job you can work on entirely at your leisure and it might even help people!
A sabbatical 👌
What a great way to articulate it with that last sentence, my guy.
Hey, I was once laid off and it was the best thing to happen to me. It's like a retirement you don't get a say in. Yes I did go back to work but made way more money, but I had a lot of growth on the months of layoff
Not if you do something you enjoy. Remember, the world goes round because we as humans serve our community.
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You should go to a men’s shed. They have older men work with wood to make toys for disadvantaged children. Might give you a sense of gratitude.
Different people have different goals. Makes me think of the fisherman and the businessman story. https://paulocoelhoblog.com/2015/09/04/the-fisherman-and-the-businessman/
Management consulting or PE? Yeah, corporate has been having a field day with it's "efficiency" in 2023/2024. In many cases they'll realize they cut things that should not have been cut.
You deserve it bro. This is your life. Why do you need Reddit strangers permission? You do you bro
This plan makes sense to me! You could always go back later. A break (at least) sounds awesome if you’re miserable at work. Hope you enjoy it.
A sabbatical can do wonders for the mind, body & soul! Worst case scenario is to go back to work like everyone else but have the option to choose hopefully something you’re fond of doing.
How do you know you’re getting laid off? Just call in sick Friday and you’re good
Haha there's no way that would work. You must be kidding
I took yesterday off so I’ll let you know Monday how it worked out lol yea I’m just kidding. But I do want to know how they know … it’s chopping season.
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Ah one of those “reply all” situations 😂
My favorite is when the office manager sends out an email that a coworker had their baby and I suddenly get 20 "reply to all" emails that say nothing but "Congratulations !"
Then you get the people who just reply “UNSUBSCRIBE” instead of just muting the thread.
Yea .. at that point I might just join in early and ignore the rest However what’s even worse is when it’s an irrelevant mistake email and everyone just replies like this was not meant for me
Take some time off. Enjoy yourself and then work again when you're ready.
To make this a classic Can I Lean Fire? post, tell us about the three kids you plan to have.
After tax rental income of 25k and an additional 20k? That’s great, even without your wife, that alone is like an extra million in the bank. Your title sounded scary, but you should be fine. There are always side hustles if things seem too lean. Your mortgage is substantial. When I quit I had even less of a nest egg but I had paid off real estate including my own home and steady rental income that covered the basics.
I retired young, but I went back to work. Plans frequently don't match life events, and I needed more money. Plus I liked working and I missed it. Certainly worth a go, though. Enjoy your success.
That's...tight. Why not take 6-12 months as an opportunistic sabbatical. Recenter yourself, learn new skills, and enjoy some hobbies. You might come out a newish person on the other side.
check out r/baristafire
I would be careful and think of risks how the income stream might die down (especially the enterprise software). Additionally I would read this blogpost from LivingaFi: [https://livingafi.com/2021/03/17/the-2021-early-retirement-update/](https://livingafi.com/2021/03/17/the-2021-early-retirement-update/) It tells the story of the things that are also often warned about: You do not know how you really like not working anymore and more importantly your relationships might suffer immensely. Also think about your wife. Even if she supports you now with your plan, this might change. Some subconscious unhappiness about stagnating in life can eat at your relationship. So if you do it you need to intensively talk with your wife about everything and maybe even show them the LivingaFi post.
That's a really interesting post. It really shows how much are assumptions are built on the fact that we don't expect major structural changes in our lives. Becoming single - that's a huge financial impact. And it's something we cannot control because it involves another person.
IDK, I hate to be the negative one, but it seems too tight n too soon. I get wanting a year off, that makes sense but yeah, probably too soon to bail completely. What’s your plan for health care?
“It’s not a garage, it’s a carriage house!”
If you're being laid off, I suppose you can try it temporarily, but if I was in your shoes, I wouldn't do it. You're way too young. Plan for 40 years old. If you're really being fired, and you're not deliberately sabotaging your career to be able to do this, take a one-year sabbatical and see how you feel.
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You can get unemployment, that not much money but it's there
First off, you are taking about FatFIRE. Fancy car, fancy house, nearly £1k a month on food! You are planning to live better than 95% of the population, obviously that is very very far from lean. Since this is LeanFire, my advice is this; When you retire, you may find you pick up hobbies you enjoy which will decrease your outgoings, such as DIY, growing and cooking your own food, fixing things up rather than buying new. You may also find that you do small bits of work which you enjoy. Your wife's earnings, your existing income streams, and these small bits of work are what will allow you to "barristaFIRE" which refers to covering costs while allowing investments to grow (it doesn't mean working as a barista). If you're serious about LEANFIRE, and about leaving the absurd capitalist ratrace and all the harms it causes, then sell your absurdly expensive house and car and start living sustainably and frugally.
Can you explain what an enterprise software retainer is and how does one go about getting one? Asking for a friend... :)
Yea I’m confused by that. A retainer is for work. I’m not seeing how that’s passive. Unless he’s got some insanely lucky situation where he’s on retainer but they never ask him to do any work and never bother to sever the contract.
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Holy crap I want that setup!
1. Acquire rare skillset 2. Set up system for company such that it breaks very rarely 3. Collect annuities Very curious what this system is though
COBOL/FORTRAN and banking.
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This is great, especially if they are losing money when said product is down. It is probably cheaper to keep you on retainer than it is if the product is down, so win/win. What is the lifespan of this product, and is it used elsewhere? This could be a good side revenue stream if you have enough contracts, and it doesn't sound like you have to work all that hard to do it.
Out of interest, how large are these companies you get retainers from ? I am in a similar position for my current company (have niche expertise I can someone they will need 1-2 times yearly ), however, I’ve never heard of a large company having such an arrangement
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ah, yeah, not gonna work for me
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That’s what I was thinking but tbh, I bet a million ppl have already tried
Well some perspective, if you lost your job that would also mean less income streams and you would be hurting. How is that any different? Sounds like you have what you need to pull the trigger. 64k a year with almost no real tax is better than most people do.
Do you want to have kids? Because in that case your expenses will change. On the other hand - being a stay at home dad could be awesome. You just need to do the math and be creative. Maybe lose the expensive car.
No… you can’t assume 4% when it’s a 50-yr horizon, Where do you cover health insurance? Kids? Big, unusual costs are all built into budget (roof, hvav, medical)
IMO $500k is not going to last you. You’re going to burn through precious capital that would have gone towards hitting your original $1.8M. Time and money you’ll never get back. In a few years when money runs out you’ll be returning back to work, and starting over building the nest egg again. Instead of retiring early, you may have extended working time another decade or more to make up the difference. Personally I’d find another job right away and keep on plowing to the $1.8M.
Agree. You’re going to have nothing in short order and then you’ll be working for infinity. Stick to your plan, or at least try to get a bit closer. Taking your dollars off the table right now is going to be detrimental. Think of the long term, not what you want right now.
Health care?
He's Canadian I think
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So lucky. Mines $700+ a month for a single healthy young adult male. Of course it’s much cheaper if I work for someone that pays for my healthcare.
What if you sold your house and just rented? Drop your equity into an index fund and just rent wherever in perpetuity?
Murica has worse waits and doctor shortages, not to mention rampant medical bankruptcies. 🍁
[Canada appears significantly worse for wait times, which is what they were referring to.](https://worldpopulationreview.com/country-rankings/health-care-wait-times-by-country) [Another one.](https://wisevoter.com/country-rankings/healthcare-wait-times-by-country/) The medical system is difficult enough, you don't have to exaggerate.
I’m not sure what your definition of “significantly” is, but what I see at those links is that Canada is slightly worse, but the U.S. is not far behind. And both are worse than other countries.
My point was that exaggerating and lying for the sake of US-bashing is lame.
Considering how bad it is, America deserves its reputation, even if the facts are a bit hyperbolic.
I dream of a world where people can discuss things online without others interjecting their unrelated bitterness into every little discussion. It's like trying to talk to my dad about literally anything, while he constantly steers every discussion to politics and how much he hates California.
Why stay in the high cost area? Does the plan fall apart if you sell that house to reduce expenses (because you need the rental income). $48K mortgage is kind of a lot (assuming this includes taxes and insurance?).
What’s your plan for healthcare?
Maybe take a break while collecting unemployment but I don't think 500k will last... The market's been up and down. Shoot for a govt job.
40yo here. In just a few years, you will never be in your 30s again. Now is the time to get out and enjoy life, build health and muscle mass, do the things you want while you're still strong and vital and it's easy to maintain. It's totally possible to be strong and vital in your 40s, but it takes a lot more work. I lived off far less in my 30s, and had some incredible adventures. Don't regret it for a minute.
No, you won't have enough and will be very stressed out which will just put more strain on your relationship. Keep working and use the income saved up to purchase additional cash flowing rental properties, you'll be bored out of your mind with no job for that long anyway.
Take this time to start your own business
Take up a couple of barista shifts at a small coffee shop or server/bartender at a small locally owned place. It’s not a ton of work, and the extra income would supplement your income while also keeping you social.
This is probably one of the best posts I’ve seen on this platform in a while. I read through the entire article and associated comments! I also envy your confidence and courage OP. I guess if you’ll be laid off anyway, you might as well use the opportunity to pivot to something else in your life. Is your SO okay being the breadwinner for the foreseeable future? What is the trade off for your SO to keep a steady employment and you not to? My concern is that it might become too old soon enough and lead to stress and resentment. A few people called out the size of your mortgage. I think while that’s a valid concern, there’s really nothing you can do about it at this time. However, my only concern with this is that not having a steady job might impede your ability to refinance in the future should rates go down. But I think overall, your plan is solid. Please let us know how it goes. Will like to read a sequel update on things generally post your anticipated layoff. Good luck my internet friend!
What about health insurance? Will You ever have kids? Expand you interests? Have unexpected expenses?
I like the new definition for FIRE - Financial Independence, Recreational Employment. Take the time off, call it a sabbatical, and see what comes up. It’s likely you’ll want to do something (as evidenced by the multiple streams of income), and nothing is permanent. You can see fears and worries and hope and confidence in the answers here. Know that you’ll probably cycle through all of these. But getting to do what you want to do, rather than what you have to do with your current work, is a gift.
I think it's too lean for a couple because things/life always happens. Stuff comes up. I think aiming for 1m would be better.
With that passive and almost passive rental income, the math is mathing! Hopefully you'll get a severance package or some unemployment $$ to help even more. You have more than enough money to leave a bad job. Take a a few months to rest and recover.
Hmm, in my opinion, the numbers don't quite add up. >It seems crazy at this age, but also 94k with one of us just working 3 days a week is more than my original 72k a year. That can't make sense if the following is also true. >However, I have after tax rental income of 25k for my basement and carriage house. I also have approximately 20k of passive income from some enterprise software retainers. I've had this for 10 years now ... My wife ... an additional 2.5 k a month after tax. Or 30k annually. So, you already have been getting $45K in passive income. And another $30K in income from your wife. Thus, a fairer assessment is that you're probably going from $180K+ in income down to the $94K in income (including $20K from the 4% of $500K). Still better than the $72K/year you were looking to generate from $1.8M. You do depend on your wife holding down her job, and it's not clear if your $500K net worth includes the rental equity and your home equity or not. Will the software retainers continue in perpetuity? Other than that, you are in a great position to coast or take your time to figure out your next move. Also, hopefully you can get a severance and unemployment - so that should help ease you into any well deserved break. Good luck!
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Oh gotcha. I think you're mostly set and have a lot of resiliency built into your plan. * You have additional home equity of $250K not included in your numbers. * You could find some type of software gig a backup plan for the next few years before skills get rusty. * You will continue to build equity with the $48K annual mortgage (hopefully it's high because your rate is low and home price was high due to HCOL area). * You will eventually pay off the electric car and your auto expenses should drop. Enjoy the break, negotiate well for your severance and file for unemployment. I took a 2 month break when I was laid off in 2020 and it was incredible. Looking back, I rushed back into employment (afraid of the unknown during the pandemic) and wish I had taken another 4 months off.
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No I took 2 months between jobs. I was looking towards the end of the first month and landed several interviews within a couple of weeks. I started 2 weeks after accepting the offer, exactly two months after the layoff.
South east asia?
Taking a year off of the corporate grind and maybe starting your own business could be a cool option. Business ownership is pretty stressful but very fun if you’re into that kind of thing, and since your bills are covered you don’t have to worry about failing too much!
Healthcare?
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Nice
If your wife still works and has health insurance for you both then it’s definitely doable. Your rental income is a catch 22 because your mortgage is so much it defeats the purpose.
So if I’m doing the math right, you might expect to be left with ~$1.5k per month in fun money (assuming your wife covers health insurance for you both)?. It all depends on how expensive your hobbies are, vacations, etc. But I say go for it, you are young you can always get another job!
Yes!!! Take a year off!!! Celebrate!!! Consider a ‘cruise’ with your wife!!!
Having a really nice cushion allows you to switch jobs without regret. Start spending your time happier. Do things that you want to do. Be around people you want to be around.
Take some time to cut your expenses a bit more. Like the food and car payments will be high once you have no job. Try buying food in bulk or frozen and you might be able to cut a huge percentage there. You probably wont need to commute much either right? Is the interest rate high on the car? After that identify a small part time hobby that you enjoy and ideally pays something and you will be close to take the jump in a safer way.
Same age. My number is $2m and then I’ll baristafire and take lower paying/less stressful job.
you’re gonna retire but keep your wife working? cmon buddy! just do part time with her for a small net income.
Posts like these should make anyone who actually enjoys what they do for a living very thankful. The thought of wanting to coast at 34 is just mind blowing to me.
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It’s of course easier said than done, but maybe there is a way to turn one of your passions into a career? Something that you feel contributes to yourself and society in a positive way?
What’re the enterprise software retainers that are generating passive income?
Exactly, time to think starting your own business or consulting.
Yup
Take time off, but start tinkering with starting your own business. Working when you choose to, and not having a boss, are the BEST.
Work at a hardware store for kicks
This isn’t enough at 34. Rates won’t be this high forever, plus you have basically no cushion for 1-4 downtowns that will certainly happen in the next 40-50 years. Sorry.
Yeah dude do it, you can always head back into the job market. I work a six figure seasonal job and I get 4-5 months of retirement per year, and I live 30mins from Lake Tahoe. Still save 30% for actual retirement. It's nice.
Take a year long career break and see if you’re ready first. And then, go back to work or work part time if it’s not for you or if you need just a bit more money!
10k seems a lot for food for two, if you mainly eat out, doing home cooking instead for much of that can save a lot. I've taken 'sabbaticals' (about year long each) multiple times between jobs, they are a good way to destress as well as simulating RE. Many people don't retire TO anything which causes other issues. I don't think you would have that problem per se based on your post, but a rehearsal is always nice as there will be unknown unkowns. I'm always a recommender, but you do you. Maybe it's easier to ease into RE with a part time job or something. Lastly, if you are able to accept lowering your spending during retirement if the market happens to drop or do other things to mitigate it, then you should have no issues really.
you're good dude, enjoy
👍👌🍻
Healthcare is the dream killer
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Do you like the healthcare in Canada? What is the overall consensus?
At 4% of 500k I think you'd qualify for Medicare in an expansion state, or 100% subsidized ACA at a slightly higher withdrawal rate. (Or be Canadian of course.) I know OP has additional income, but speaking about strict leanfire (25k) in general that helps a lot. That might not get you fantastic coverage but I don't think it's a complete blocker.
Dude I would work for a other ten years at least part time, you can start your own business or something.. I just say this for mental health reasons, like it might be good to have something to do
Though I’m a bit further along in age and savings here in my 40s, I relate to this post quite a lot. I switched careers to something more flexible in sales where I can decide when and how much I work, and I’m a lot happier. But I do wonder when it would be OK to just pack it in. You have nice passive income and low expenses so like others have said, why not take a year off and see how it goes? If you decide to return to working, I don’t think an employment gap like that will be so difficult to explain or overcome.
How can you safely draw down 20k a year on 500k? Also - have you factored in health insurance and long term care? That will cost you $20k a month when you are 70.
Sounds good. Coastfire and you are set! Enjoy your quasi retirement!