r/fatFIRE

About 2 years and 3 months post fatFIRE, here's how it's going. 50s F in VHCOL area. No kids. Introvert. Perimenapausal. Withdrawal rate lower than expected original 3.5%. Spend numbers on response to comment below. TLDR:$155K annual spend. At this point, I don't track very closely because I don't have to.

Self made, started invested and saving about 10 years prior to my retirement. Parents were poor, none of this is from them. Almost went bankrupt when I was around 40.

The last year of the job was a real struggle. The company was absolutely horrendous and I had some severe health issues. I ended up going on medical leave, and then negotiated a package. I still thought I'd go back this year. At this point, I'm doing some light startup advising.

Some big things:

- both parents got diagnosed with terminal illnesses, I thought I'd have to kick in to help with them but it's looking like this may not happen

- parental finances are MESSY so I've stepped in to take over, this takes up the bulk of my time, and will until probably a year after they die due to a number of factors

- I got lucky and very randomly met my current partner who's also FIRED so I've had a playmate and support for the past year (definitely the highlight of my journey)

- I also have a few neighborhood friends who are not working and I have great workout partners

- healthcare is super expensive - I'm on the ACA after my COBRA ran out - this will be upwards of $20k annually

- I still Rover so my dog can get paid socialization and have met other families to swap to cut down on dog related costs

- while we've done a bit of travel, I've really enjoyed being at home

- currently renting because rent is so much cheaper than mortgages right now, I might buy in a couple of years

- made it a concerted effort to get my health back on track, gym, run, weight loss, I finally got my body back. PS: there is a lot of bullshit and shame associated with being not thin, and then there's been a lot of bullshit and shame associated with people who do sometime about it and go on GLP-1. I'm here to tell you that I tried everything, went on GLP-1 with success and it made the journey a TINY bit easier.

What I've learned:

+ I still enjoy running my own finances

- I'm not very materialistic, I've inherited a lot of my mother's fancy stuff (jewelry, bags, etc) and I appreciate them but I genuinely don't have FOMO or want to acquire more stuff

+ Friendships are critical, and they don't have to be extremely deep, but they need to be loyal

+ I enjoy trips that are within a drive and where we can take the pup, I miss him terribly when I'm away from him

+ I'm not impressed with what's out there food wise so we end up cooking for fun a lot

Future/Current:

+ Help my parents transition into their final days with grace

I don't have the best relationship with them but I can not bear to see them suffer. They did not do a good job setting up their estate and as a result, it's painful. If you have children or parents, look into the details of non revokable trusts, there's a 5 year look back. Consider moving into a home situation without stairs way way way before you would ever need it. Fun fact, did you know that Medicaid for long term care claws back on the primary residence? I did not.

Get an estate lawyer sooner rather than later. Laws in different states are so different.

Long term care costs in a lower end facility runs around $20k a month. The average stay is around 18 months. Plan for this.

Other things you can do in case of emergencies:

- use a password manager with a back door so someone else can deal with financials, should you not be able to. Unfortunately, for many people, death does not come swiftly. That month/year that someone is not functioning but the bills are still being generated it's a very rough time. If you autopay stuff, tell your partner what's autopaid and WHERE is paid from.

- for the love of God, and this is especially for people who are not the financial person in the household, make sure that your partner knows how to pay the bills and what bills need to be paid - when one of my parents went into the ER, the other one literally had ZERO idea of anything, what an absolute cluster fuck

+Languages

- started taking Spanish, currently on hold

- Might try to beef up on French again (currently at B1 level)

- Chinese (wanting to bone up, fairly fluent already)

+Health

- realized that snow sports are not my thing anymore, have given away all my snow sports stuff

- integrating more hiking and traveling and hiking

- got back into running

- yoga twice a week

- sauna and cold plunge once a week

- perimenapause is a fucking nightmare - did you know that if can go on for 14 years? Yeah. HRT to the rescue

+Brain stuff

- been playing with AI to make apps for myself, which has been fun and im able to better optimize various facets of my life

+ Would love to read more

+Hobbies

- have done a purge to get rid of stuff I'm no longer interested in, felt great, will likely do this twice a year

- piano and voice lessons are on the horizon

- might get back into some crafting but got rid of a lot of my sewing/knitting stuff

+Finances

- planning on converting a lot to Roth in the next few years before I'm 62

- restructuring my portfolio to minimize risks, optimizing for taxes, medical, future RMDs, and avoiding IRMAAs

- when/if I hit 65, I'm going with Medicare and a supplemental plan vs Medicare Advantage, the latter can be a total shit show coverage wise.

Apologies that this is long and rambly but paying mostly to remind myself of the journey. Hope it helps for other people.

I am mid 40s, married, two kids are older but at home, one kid still in middle school. Live in HCOL I suppose.

Facts:
Total assets = $16m with $3m in liabilities (commercial and real estate) so about $13m net worth (not including value of my IT business as I do not know that worth yet)
$1m in taxable brokerage
$3.5m in retirement accounts
$750k cash

Primary residence = 1.6m with a $520K loan at 3.5%
Secondary residence = $750k with $120K loan at 2.5% - currently trying to sell
Two STRs in Arizona = ~$1.7m with $1.3m loans at 7% or so. Strong rentals and gross income is about $300k yearly. Fully managed and I visit 3-4 times a year.
$750K commercial property in AZ building a restaurant on that may cost $2m
$1.5m commercial building in my state with $1m liabilities
Paid off cabin and other land maybe worth $300k total.
Restaurant that is worth about $3m including building.
IT business I am thinking of selling (unknown worth? AI says $2.5m - $3.5m)
Maybe $180k in consumer debt including solar panels in AZ, truck, toys, etc (not on credit cards obvs)

Income is still strong. Maybe $500k/year from IT business, $50K/year from website business/ads, $100K year from W2 income, $350K SDE from restaurant.

Current burdens/unknowns:
I am unsure about this $2m property construction for another restaurant
I am really thinking about selling my MSP if I can truly get $2.5m for it
My primary residence is big and my property taxes alone are $2000 a month. Add in insurance, heat, electric, I am at $5k a month without even paying on the loan.
Working on a piece of owned land to build rental cabins. Probably a $500k project but could throw off $7k a month when done.
My current portfolio is aggressive growth. I have rotated mostly into VOO, CGDV, SCHD, QQQ, SOXX though. VOO and CGDV are my biggest by far though.

I have a lot of illiquid assets. I don't know what to do. I estimate I would want $30K a month in FIRE to do whatever I want and not have to check my bank account, but I know even if pay off my house that will consume $5k a month.

This is not a brag or anything. I know I've made it or whatever. I just REALLY REALLY don't want to eff this up. I want to still be able to help my wife build another restaurant as this one we have does very well. I also have a hard time wrapping my head around selling my IT business when it throws so much cash but it is SUPER high stress as I am the owner operator. But it has funded my life.

What advice can anyone offer? What would you do in this situation? My biggest thing is selling the IT business as that would save me the most stress and liability.

Thank you. Please be kind. I know this is a "my lobster is too buttery" situation but I come from solid middle class parents, one income, and I feel like I am on the cusp of generational wealth if I don't screw up.

Perhaps this is more of a chubby fire question but I’ve always planned to have a vacation home in the mountains for skiing and hiking, but the closest airport is 3 hours away. I’d have a vehicle that would stay at the home full time, but I haven’t worked out the best way to get there. the region is 18hr drive from my primary home. Sure I could do that drive, especially justified if I’m going to stay for a few weeks at a time, but I know I’d choose to fly if I could. And yeah, I can get car service or a taxi but $500 each way just feels wasteful and changes my perception of the purpose/value of purchasing this vacation home (sure, a thousand bucks a few times a year is easy enough to budget, but again maybe I’m more of a chubby fire that truly fat fire).

Anyone have any solutions I haven’t thought of?

We have a house on the East Coast that we try to spend a good amount of the summer at. Our primary residence is in LA, CA so the second home is not somewhere we’re back and forth to throughout the year, it’s basically just a summer home. This year we were there 7 weeks, last year it was closer to 2 months.

We don’t rent it out, but we have family/friends who will pop in and stay there sometimes. We also have a property manager who keeps up the place while we aren’t there.

It’s hard to justify only using the home <2 months out of the year, but when we are there, it’s a very special place to our family. My parents also live out there during the summer so my kids get to be around their grandparents more than usual. We’re not opposed to renting it out just scared of people being disrespectful, damaging, stealing, etc.

Hello all. Just built our house and wanted to hear your feedback about the high end features/items we built and put in the house. Ketra lights, Lutron Homeworks, Dekton tiles and fabrication by Cosentino, Video Wall, a separate theater, 7 Hvacs units 9 zones. Gaggenau appliances, Control 4, Lutron Shades, Davinci fireplaces, 3 Span Panels, invisible speakers, guest house and a pool house. Modern- minimalistic Japandi design.

Thanks

Hopefully, this question is OK here. It might be better suited for a real estate or tax sub, but I didn’t think it would be well received over there…

Has anyone bought rental property for their kids, particularly when the kids were still young? Seems there could be some benefits, particularly letting them take ownership with a low cost basis, providing a relatively long investment horizon, allowing them to do work for the management company and contributing towards a Roth… etc. Obviously, I would need to talk to a tax professional on the exact structuring as there are some complexities to it, but I am interested in hearing personal experiences. Eventually, they could keep renting the properties, convert them to personal residences, or just liquidate for startup capital. I’m getting close enough in regard to my own retirement, that I want to start looking how to best give my kids a bit of a head start in life (besides fully funded education). I’ve owned rental properties before, and keep coming back to this idea. Any thoughts? Or should I just be gifting them the 38K (unreported gift limit for married couple) annually into a custodial account, and call it a day?

Throwaway account for privacy.

Looking for constructive feedback on our situation below. What should we be doing to improve our chances of family financial success. What are we not thinking about? Concerned that we don’t know what we don’t know. Pls help us identify our blind spots. 🙏

60 yr old couple. VHCOL area. Retired three years ago. Planning horizon to 95 years. 

We have two kids (now adults) who live with us, who have some special needs that will likely curtail their ability to work and earn enough, so need to ensure sufficient savings and some cash flow to help them now and sustain them after we are gone.  Have a trust in place, and it has a Special Needs Trust provision for one child (who gets Medicare, etc due to disability) upon our passing. The other child/adult does not want to even try to apply for benefits (it is a sensitive subject, perhaps due to his self-view). 

Expected Annual Living Expenses (before taxes) $360K. Includes $120K to help the children. 
So assuming taxes for federal and CA state, we would need about 500K per year (assuming passive income, tax paid monies only in hand , including cost basis). . 

Financial snapshot

Financial Assets (invested index vs equities vs cash approx 60:30:10)

1) ⁠IRA Accounts (pretax): $2.4M
2) ROTH account (no tax): 230K
3) Brokerage (taxable gains): $5M (cost basis is $2M)
4) Bank (aftertax $s): 600K
So, assume invested sum overall is $8M

Real estate assets: Keeping them out of this analysis at this time. Hopefully will not need to liquidate and can leave for the kids. 

Income expectations to meet $500K/yr spend:
- Deferred compensation over next 5 years = 200K/year (until 65)
- Rental income $150K per year ongoing 
- SS  apply at 70: total for us about $80K/yr

My analysis by age stage for 500K/yr spend
- 61-65: Income 350K/ yr. Withdraw 150K/year
- 66-70: income 150K/year. Withdraw 350K/yr
- 70 onwards: income 230k/yr. Withdraw 270K/yr

Assuming invested $8M
Withdrawal rate is 
61-65  : 1.875%
66-70: 4.375%
70+ ongoing: 3.375%

While this will substantially draw down the financial assets for my kids after we are gone, but the rental income pipeline and real estate should give them a reasonable base after we are gone. 

What should we be doing to improve our chances of family financial success; especially assets left after we are gone and the two kids have another 30-40 years after us?  What are we not thinking about? 

Concerned that we don’t know what we don’t know.

Thank you for your constructive feedback. 🙏

We are looking at a home remodel/addition (~$1.5M) and instead of selling stock are looking to borrow against our stock portfolio (~6M).

- What type of loan is this? Chase said something like SBL (securities backed lending?), but I would need to transfer assets to them (they are at Fidelity and Schwab mainly).

- Any preferences on which brokerage to go with? I like Fidelity, my rep is out on vacation until end of the month...I can possibly wait or find someone else there. Wanted to get the group's thoughts in the interim. Who else would you suggest I shop with? The Chase relationship banker was a bit inexperienced before I landed with the investment rep.

- Is there a chance to negotiate the rates (was quoted 1.95% over SOFR).

- Are any of the interest payments tax deductible? LLMs say "generally no" I don't usually itemize my returns

- the inherent risk here is if the market crashes, i could have a collateral call. my thinking is to keep the loan <30% of portfolio to minimize this risk

I've heard of other products like PAL, SBLOC etc. Not sure I qualify (NW <$10M)

So after a really rough decade, life turned around for me and I’m doing well. I started working for a different fund and we got lucky on a few things. My carry could theoretically be worth very low 8 figures over the next decade (finishes vesting in 3 years and then paid out from exits; currently ~65% vested). Current nw is around mid - high seven figures.

How do you account for this and how does this factor into spending? I currently spend maybe 30% of what I earn after tax and have a modest lifestyle - grew up poor and haven’t forgotten it. The wife wants to buy a nicer house and a nicer car since my joints aren’t great and one day I won’t be able to get into a sports car. Her view is we can spend more, and I’m letting my past affect my present.

I walked away from a pretty lucrative tech career a little over 5 years ago - every now and then I do a little retrospective for myself and sometimes a Reddit post. You can check my profile if you would like to read any of them.

The FIRE stuff: net worth now about $10M, wife is still working (she loves what she does), we draw down about 2.5% per year, but thanks to this massive bull market our nw has grown pretty steadily even though I am a fairly conservative investor. I've enjoyed managing our money/financial affairs and have done reasonably well in minimizing tax drag, and efficient spending etc. I'm 57 now with kids all out of the house. Spend most of the year in the PNW and an increasingly large chunk of the winter in southern Europe. Net, I've finally arrived at a spot where I both feel financially secure and permanently retired.

The journey: Looking back from 5 years on is an interesting view. It's definitely taken time to build this version of my life, but I'm in a pretty great place (knock on wood). Would definitely advise peeps to go into any kind of early retirement being patient and knowing that to some degree you need to slowly reconstruct your life, and to be prepared to work on yourself as well. Our society isn't really built for people retiring at 51, you walk away from a big chunk of your social interactions/meaning construct when you stop working and perhaps most importantly, those around you may not feel as "finish line" as you do.

That said, I'm really appreciative of where I am now. Here are some of the big themes in my life:

Service - this has really started to ramp up in the last 18 months and am now doing ~1/2 day a week. I do hospice companionship and volunteer at an organization for undocumented workers. Not about quantity, just quality. The hospice work has been a total perspective reset for me.

Hobbies & learning - a lot of how I fill my time. I love to garden, grow food/flowers, cook for the family, make bread, pizza etc. I started learning spanish when I quit and that has been a multi-faceted journey - most of my reading is now in Spanish (which is a whole new world). I love seeing live music and go to a couple of festivals and see 20-30 additional shows a year. I'm a european football fanatic and go to matches when I'm there (and watch in Spanish when I'm not). I've always been fitness oriented, but in the last year joined a crossfit gym and absolutely love the community there. I didn't have most of these hobbies when I was grinding and definitely didn't have a ton of time for them either. I've just slowly added and leaned into the things that light me up.

Relationships and community - spans all of these. When I walked away from my job, I left a lot of stress and gained a lot of time. I've tried to use that to work on myself and my relationships. BTW, it becomes pretty evident the state of your relationships when you have time to observe. Relationships and community for me has a different meaning now than just my friends - I'm really appreciative of the communities I've entered through volunteering and now crossfit as well as some of my other hobbies (e.g. wild mushroom foraging). I really like connecting with people, which honestly has meant leaning into new things and away from of the superficial (e.g. country club) environments from before. I try to engage with everyone - I'm the weird guy who says hello to everyone at concerts.

Here's some of the "tooling" I use:
Relationship counseling - saved my marriage, and we continue to check in when we get stuck.
Insight meditation - just in the last ~2 years, wish I had started earlier.
Psychedelics, especially MDMA - profound tools for seeing things from different perspectives
Introspection - writing, and now sometimes even with AI

It's all about meaning. Good luck out there!

This is a copy paste of my question because I hope there’s overlap on the people who can answer:

So this is a question more applicable to the well healed car enthusiasts but applies to anyone that is VERY particular about how they’d like an experience.

To be direct, I want to do an experience (and those who saw the Roma adverts) that mimics La Dolce Vita. For the Ferrari crowd here, I want to drive a Roma Spider the way a playboy of the 1960s drove a California 250 GT, from Maranello to Monaco, with hotels and dining that would make that experience feel authentic.

My question is two fold: 1) anyone with the same desire find a way to make it so and 2) for those with an EXACT dream, did any agency make you feel they UNDERSTOOD what mattered and executed just so. I want your advice on an agency that would be a one stop shop to make this so.

Thanks in advance for any answers! :)

I’ve seen a few posts in here about some mixed experiences with Creative Planning advisors. I’m going from self managed to an advisor as I’m no longer comfortable managing it all myself as my portfolio has grown, and I am between Creative Planning and McAdams. Comparable in almost every way so I am down to looking at personal experiences. Has anyone worked with either or both and feels strongly about one over the other? Appreciate any insight.

Mentor Monday is your place to discuss relevant early-stage topics, including career advice questions, 'rate my plan' posts, and more numbers-based topics such as 'can I afford XYZ?'. The thread is posted on a once-a-week basis but comments may be left at any time.

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Sure, not keeping all your eggs in one basket is generally good advice. However, to what extent does the financial industry exploit this simplistic idea through fear for fees and additional AUM?

Concentration risk does not map equally across all assets. For example, being concentrated in NFTs may expose you to more downside risk than being concentrated in energy utilities or real estate.

Yet, in my experience, financial advice usually boils down to concentration equals bad, diversification equals good. Look for ways to spread out the risk, protect your gains, smooth out volatility.

Oh, and by the way, financial service providers have all these amazing products to help you diversify! Sure, there’s small fees here and there for the privilege, but think of the reduction in RISK!

By following conventional advice and diversifying my positions, I have left millions on the table. A retroactive analysis would appear to indicate no real protection from risk, only taxes and fees.

The unintended primary benefit to diversification for me has been increased cash flow, even though that idea is also somewhat of canard.

Anyway, it just got me thinking that we are being marketed to heavily and it’s confusing the reality of holding concentrated positions in strong companies and industries. To be clear, I’m not knocking the concept entirely, merely observing the other hidden interests in play.

I am 44m, NW 12m inclusive of primary residence. Tech and real estate are primary drivers.

Edit: 20% of you agree with me, but the rest of you will once you think more about it.

Most regular FIRE people say you need 800k-1.2m. Personally i would not want to retire in the expensive parts of the west, most likely I would choose sunny/exoctic locations in SEA or Latam, maybe even morocco, but i wanna be super comfortable, not penny pinch. I'm in my mid 20s so still have lots of energy to level up in my career. So is 2-3m enough to aim for? I plan to move to either Dubai, Hong Kong, or Switzerland (im an EU citizen) so i can quickly increase my net salaries and save as much as I can & dump it in proper ETFs.. gonna be a fun ride.

[supprimé]

I sold my company to crooks. I had a big earn out that depended on the profits, the company was really nasty and put a lot of expenses in to kill the profit.

I tried to sue them but lost, the contract was badly written and they could basically do what they wanted. I've spent 3 years and a lot of money on lawyer fees for nothing. I cried when I got the final decision, so much stress inside me.

I made about 8M. The earn out was supposed to be around 60M if they had played fair.
I put all my efforts into this company for 10 years and got scammed. I feel so exhausted and disgusted that I think it's time for me to retire and forget the business world. I'm also ashamed.

I'm fatfire but I'm having difficulties enjoying it after this scam. Am I the only one who got rich and retired by getting scammed?

I am not FIRE'd yet but quite close. I work at a FAANG company and have incredible health insurance. We have had a few surgeries in the family and never had any issue going to any doctor or hospital we wanted to. We have a PPO now.

My question is - can money buy the same level of coverage (and peace of mind) like what I have now (after I retire)? I have gone into the rabbit hole of levels of ACA etc and don't feel satisfied enough. Or is it just not possible to replicate the employer-offered health plan coverage at all?

The title basically says it all, at 26 I was able to accumulate nearly 3M$ across stocks and crypto maybe with luck, maybe with skill and timing, who knows. I have a high-ish income (200k$) and i'm pretty comfortable living with my salary and saving as well.
I have nothing to inherit and built all my wealth alone, that's why I feel a lot of pressure but also I want it to grow to 8 Figure plus and so sons and grandsons can benefit from it, not just retiring and burning off everything on my own.
What's a good way to do so? I'm comfortable in taking risks in order to grow but I don't know where to look at right now, I feel kinda lost on the direction to become really wealthy, I also don't have anyone rich in my circle to discuss similar things so I am basically on my own financially.
Any advice is welcome 🙏🏻

Im big fan of the book/concept of spending your money before you die. Wife and I have been retired 10 years and each year our net worth has increased due to good investments. We fortunately now have more than we can spend if we tripled our normal annual spending. What do others so fortunate add to their prior budgets to most enjoy the fruits of their labors and try to die with zero..we are 70 and travel lots, spend generously on kids and grandkids, nice car, nice house, etc. Ideas?