Recently hit financial independence; how much longer would you work in my situation? Forum

[Anonymous User]

Investment projections: Assuming I continue maxing contributions and markets rise 10%/yr, below are my current investment projections.

Investments MinBudget Months to save
$1,050,000 $49,272 0
$1,100,000 $51,272 3
$1,200,000 $55,472 6
$1,300,000 $59,572 10
$1,500,000 $67,000 17
$1,700,000 $76,000 23
$2,000,000 $88,000 32
$2,200,000 $96,000 36

Although I totally understand the desire to quit once you hit your number, the 36 month mark seems like the target here. Putting in an extra 3 years at a "low stress" job effectively doubles your budget or, if you don't utilize all of the excess over $49k, drops your risk of running out of money significantly. Even 24 months has a noticeable effect and increases your possible budget by 50%.

To me, the return you get from 24-36 months of extra work in terms of increased budget/decreased risk would be worth it, especially since it doesn't sound like you will be killing yourself in those 24-36 months.

Thanks! This resonates with me most of all. I think I’ll aim for 10 months (hopefully $1.3M) initially and, assuming all is still going well and low stress, aim to stick it out another year (hopefully $1.7M). I’m less sure about a year after that, but I’ll wait and see before deciding.

Also as a caveat to all this, my gig is currently pretty awesome and low stress. It’s a group that can change pretty frequently though. In my 2 years, I’ve seen a manager depart… which, good riddance. I didn’t like their more aggressive personality and would not have been happy if they were my manager. My actual manager is amazing though, and is a big part of why the job is low stress (that, coupled with no billable hours and outside counsel doing most of the heavy lifting on matters). I hope things will stay positive and low stress for me over the next 1-2 (or potentially longer) years, but there’s always the chance things will change for the worse and I want to quit sooner because of it.

OP here. It's interesting looking back on this thread a few months later.

Investments/cash are up another $100k to $1.15M, so right on track. Things are also still going really well at the job.

I was previously thinking of aiming to stay a minimum of 10mo (from time of initial post) or until I hit $1.3M, and then reassess. I should hopefully hit $1.3M by Feb if markets stay decent.

But with a bit more time to chew on this and seeing how things are still going well, I'm currently planning on staying at least another 1-2 years from now and reassess from there. If I stay 2 years, I could potentially hit $1.9M depending on how markets do. That should give a lot more flexibility for lifestyle creep and simply offering lots of life options.

My main fear with this plan is that I become a perpetual OMY (one more year) person, and never end up leaving because the money and job are relatively easy. Regardless, I'm sure I'll continue to think about how much is enough and when's the right time to pull the FIRE plug as the months and years pass.

I think most of the people who commented before (myself included) would agree you are doing the right thing by staying. Personally, I wouldn't worry too much about the bolded if the job is really as easy as you say, as worst case scenario you realize you can fund a scholarship or something instead of just retiring.

If you are worried about it though, there are strategies you can use that don't rush the decision just to say you FIREd. You could rebrand your "FIRE" number as just a "FI" number. That still gives you a definite target rather than a "if I stay X more time, I might have y more," (which is what leads to OMY syndrome). But having the target be FI only doesn't pressure you into deciding you have to do the RE part to have really met that goal. Once you do hit the FI number, set a new, time-based goal to decide what you want to do, whether it makes sense to set a new number or if you really are ready to RE. Don't rush that (I'd personally set it at a year). Assess how you feel about the stability of your portfolio, how you feel about your schedule and work ignoring the money, try and live off of what you think your retirement income would be. If you after that time has expired still want to retire and feel good about it, pull the trigger.

Alternatively and/or in tandem, set yourself both a FI number, and a FIRE stop gap number that is much higher. I would set the stop gap FIRE number at a point where very conservative market returns are going to be outpacing any income you could expect from working. For example, maybe $2 Million is the FI number, but $10 Million is the FIRE number because a conservative 4% a year would be 400,000 in income (100K more than the 300K you earn now). That doesn't mean you cannot RE before hitting that number. But if you do keep working until you hit it, you've set the expectation for yourself that there is no real point continuing to do your current job for the money, only if you like doing the work. At that point, you don't have to RE either, but you will have to tell your past self the job was not as bad as they thought.

Thanks for your suggestions. Re: the proposal to assess how I feel about my schedule and work ignoring money, that's not how I'm wired. I'm making a tradeoff of time for money. I have to assess how much I currently have, what spending that allows, where there's enough buffer built in, how much more I could gain by continuing to work, and whether that's worth it.

[Anonymous User]

OP here. Been nearly 10 months since the original post, so thought I’d provide an update.

Investments and cash have grown to $1.17M. NW near $1.4M.

Work is going great. Job is easy, low stress, and pays even better with the raise this year (though equity portion is down given the markets). I’m learning to appreciate my job more. It’s a bit of a unicorn role.

My current thinking (which of course could change) is that I’ll take it year by year, and aim for at least 2 more years. Depending on how markets do, I could potentially hit $2M in investments by then. That would give a lot more options and cushion.

[Anonymous User]

I’ve got a $3.0mm net worth and I still think it’s too little to retire. Among the issues, some of it is tied up in my primary residence, and having kids is expensive. Have been focussed on building a 529 plan for my daughter the past few months. I also live in Houston which is cheaper than a HCOL city.

Which is to say, it’s really a game of how long is a piece of string. The biggest test is whether your monthly passive income exceeds your monthly expenses for a sustained period of time. Then you have to also consider whether kids will increase your spending going forward. Can you take a sabbatical from your role and see how you go? I took 6 months off last year (between big law roles). I loved it and my net worth actually increased given the property market, but cash flow ended up becoming an issue. At the least, I realized that I’d have to rejig my portfolio for it to work long term.

[Anonymous User]

I’ve got a $3.0mm net worth and I still think it’s too little to retire. Among the issues, some of it is tied up in my primary residence, and having kids is expensive. Have been focussed on building a 529 plan for my daughter the past few months. I also live in Houston which is cheaper than a HCOL city.

Which is to say, it’s really a game of how long is a piece of string. The biggest test is whether your monthly passive income exceeds your monthly expenses for a sustained period of time. Then you have to also consider whether kids will increase your spending going forward. Can you take a sabbatical from your role and see how you go? I took 6 months off last year (between big law roles). I loved it and my net worth actually increased given the property market, but cash flow ended up becoming an issue. At the least, I realized that I’d have to rejig my portfolio for it to work long term.

Congrats on 3mm. What kind of savings as a jr/mid/sr/ptnr (if applicable) were you able to do. Assume you bought a house relatively early on that’s appreciated well, maxed your 401k, but what else.

[Anonymous User]

Hypothetically, at what point do you really just abandon the law and don't look back? 10 mil? 25 mil? 50 mil? Assuming you want to be in a HCOL area. What do you even do then--angel investing? Startups?

[Anonymous User]

Hypothetically, at what point do you really just abandon the law and don't look back? 10 mil? 25 mil? 50 mil? Assuming you want to be in a HCOL area. What do you even do then--angel investing? Startups?

I'm far off from it with only a networth of around $350k, but my number is $5mm liquid assets (not home equity) to quit working entirely. I'd probably leave law completely somewhere in the $2-3mm liquid assets range.

[Anonymous User]

I’ve got a $3.0mm net worth and I still think it’s too little to retire. Among the issues, some of it is tied up in my primary residence, and having kids is expensive. Have been focussed on building a 529 plan for my daughter the past few months. I also live in Houston which is cheaper than a HCOL city.

Which is to say, it’s really a game of how long is a piece of string. The biggest test is whether your monthly passive income exceeds your monthly expenses for a sustained period of time. Then you have to also consider whether kids will increase your spending going forward. Can you take a sabbatical from your role and see how you go? I took 6 months off last year (between big law roles). I loved it and my net worth actually increased given the property market, but cash flow ended up becoming an issue. At the least, I realized that I’d have to rejig my portfolio for it to work long term.

Congrats on 3mm. What kind of savings as a jr/mid/sr/ptnr (if applicable) were you able to do. Assume you bought a house relatively early on that’s appreciated well, maxed your 401k, but what else.

I’m a senior associate. My wife ran a successful business before we met and bought a starter house with the earnings. I was into risky investments when younger and one of them paid off, and I used the proceeds to help buy our primary residence. We also bought a third investment property later on. I had a premonition about the recent crash and sold our index funds when the S&P 500 was over 4800 to repay in full our last remaining mortgage (given my earlier comments re cash flow), which has seemed to work out well for us, but I’m trying to get back into the market at this lower price point. Still have around $400k in retirement accounts. We have made the greater part of $1mm over the past two years mainly through property appreciation, even with having six months off work.

We’ve always saved between 50-75% of our salaries. Currently I’m the sole breadwinner, and we spend around $10k a month, which means we save roughly $20k a month after tax and bonus (plus the passive income).

My college fees were cheap and I paid them off relatively quickly after graduation.

One thing I’ve found is building wealth isn’t a linear process. Had times where I was treading water (housing issues, bad market), but things eventually turn around as long as you keep your cool.

The biggest thing that’s helped me is being a bit of an oddball. As in, I’ve always just done what seems right to me and ignored social pressures. That is hard for most people in law because there is so much pressure to conform. Colleagues have mocked me in the past for where I chose to buy and live (what I believed to be up and coming areas, others considered an embarrassing choice for an attorney). Working remotely in Texas also engenders a bunch of negative stereotypes and prejudices among certain clients and colleagues. Such colleagues may or may not include equity partners who likely make more money in one year than I’ve saved in total… That’s just a couple of examples. A couple of close friends who know we have saved this amount (most don’t as we’re not flashy) have asked my advice, but they think it’s not worth being considered a weirdo when I give this response (and maybe that’s true, YMMV).

[Anonymous User]

Hypothetically, at what point do you really just abandon the law and don't look back? 10 mil? 25 mil? 50 mil? Assuming you want to be in a HCOL area. What do you even do then--angel investing? Startups?

Funny thing about goals is once you reach them, you are not quite sure what to do about it. For the longest time, I had the $5MM number in my head. It was a goal I could plausibly reach relatively young (well before traditional retirement age). I'm at around $3MM (different anon from above), and am on track to hit the $5MM mark in my early 40s, but I now can't see myself just walking away at $5MM.

The fantasy of walking away into the sunset was motivating to save and invest, but I'm not sure I'd like the reality of retirement so early. I think back to my first job out of college where I had to work weekends. It was kind of cool to have a Monday off (for example), but the reality was that none of my friends were around to do anything- it just didn't work that well socially. If I retired in my early 40s, I'd basically have to hang out with old folks (way different interests and abilities for the most part), or stay at home parents (way too many other duties). And, since my kids are still young, I'd basically just be a stay at home parent myself.

I could see maybe doing a hobby business where I didn't have to care about making a big profit. But I'm also wary of making my hobbies my work. I know people who have come to hate the things they love when they become work.

[Anonymous User]

OP here. Been nearly 10 months since the original post, so thought I’d provide an update.

Investments and cash have grown to $1.17M. NW near $1.4M.

Work is going great. Job is easy, low stress, and pays even better with the raise this year (though equity portion is down given the markets). I’m learning to appreciate my job more. It’s a bit of a unicorn role.

My current thinking (which of course could change) is that I’ll take it year by year, and aim for at least 2 more years. Depending on how markets do, I could potentially hit $2M in investments by then. That would give a lot more options and cushion.

OP here. Providing another update since it's been more than 2 years since my original post and a year since my last update. It's interesting looking back and seeing what I was thinking 1-2 years ago.

Investments/cash now at $1.5M. Total net worth at $1.7M. Work still going well. Total comp estimated about $370K this year, and $450K next year (at current RSU prices).

Plans could change, but right now I'm thinking I might FIRE as early as mid-next year. If markets stay okay, I could have anywhere between $1.7-$1.9M LNW / $1.9-2.1M TNW.

I've been spending $55K/yr in most recent years in HCOL city, so think these amounts above would be plenty (very low withdrawal rate and likely to grow).

Have been having more conversations about retirement plans with spouse. They're now looking into it more seriously now that FIRE possibility is getting more serious/closer for me, and looks like they could FIRE just 7-9 years after me (possibly sooner if markets do decent and/or if we move to a lower COL city once spouse FIREs, which is very possible).

[Anonymous User]

OP here. Been nearly 10 months since the original post, so thought I’d provide an update.

Investments and cash have grown to $1.17M. NW near $1.4M.

Work is going great. Job is easy, low stress, and pays even better with the raise this year (though equity portion is down given the markets). I’m learning to appreciate my job more. It’s a bit of a unicorn role.

My current thinking (which of course could change) is that I’ll take it year by year, and aim for at least 2 more years. Depending on how markets do, I could potentially hit $2M in investments by then. That would give a lot more options and cushion.

OP here. Providing another update since it's been more than 2 years since my original post and a year since my last update. It's interesting looking back and seeing what I was thinking 1-2 years ago.

Investments/cash now at $1.5M. Total net worth at $1.7M. Work still going well. Total comp estimated about $370K this year, and $450K next year (at current RSU prices).

Plans could change, but right now I'm thinking I might FIRE as early as mid-next year. If markets stay okay, I could have anywhere between $1.7-$1.9M LNW / $1.9-2.1M TNW.

I've been spending $55K/yr in most recent years in HCOL city, so think these amounts above would be plenty (very low withdrawal rate and likely to grow).

Have been having more conversations about retirement plans with spouse. They're now looking into it more seriously now that FIRE possibility is getting more serious/closer for me, and looks like they could FIRE just 7-9 years after me (possibly sooner if markets do decent and/or if we move to a lower COL city once spouse FIREs, which is very possible).

Congrats on the great outcome and thanks for updating us. I have a similar role in-house role compensation wise to you with a spouse with a very good income. I have thought about retiring early, but with a young child, so going to keep working until get to at least $4M in investments/cash.

[Anonymous User]

OP here. Been nearly 10 months since the original post, so thought I’d provide an update.

Investments and cash have grown to $1.17M. NW near $1.4M.

Work is going great. Job is easy, low stress, and pays even better with the raise this year (though equity portion is down given the markets). I’m learning to appreciate my job more. It’s a bit of a unicorn role.

My current thinking (which of course could change) is that I’ll take it year by year, and aim for at least 2 more years. Depending on how markets do, I could potentially hit $2M in investments by then. That would give a lot more options and cushion.

OP here. Providing another update since it's been more than 2 years since my original post and a year since my last update. It's interesting looking back and seeing what I was thinking 1-2 years ago.

Investments/cash now at $1.5M. Total net worth at $1.7M. Work still going well. Total comp estimated about $370K this year, and $450K next year (at current RSU prices).

Plans could change, but right now I'm thinking I might FIRE as early as mid-next year. If markets stay okay, I could have anywhere between $1.7-$1.9M LNW / $1.9-2.1M TNW.

I've been spending $55K/yr in most recent years in HCOL city, so think these amounts above would be plenty (very low withdrawal rate and likely to grow).

Have been having more conversations about retirement plans with spouse. They're now looking into it more seriously now that FIRE possibility is getting more serious/closer for me, and looks like they could FIRE just 7-9 years after me (possibly sooner if markets do decent and/or if we move to a lower COL city once spouse FIREs, which is very possible).

Congrats on the great outcome and thanks for updating us. I have a similar role in-house role compensation wise to you with a spouse with a very good income. I have thought about retiring early, but with a young child, so going to keep working until get to at least $4M in investments/cash.

Nice! How far along are you, and when do you hope to hit $4M by?

[Anonymous User]

OP here. Been nearly 10 months since the original post, so thought I’d provide an update.

Investments and cash have grown to $1.17M. NW near $1.4M.

Work is going great. Job is easy, low stress, and pays even better with the raise this year (though equity portion is down given the markets). I’m learning to appreciate my job more. It’s a bit of a unicorn role.

My current thinking (which of course could change) is that I’ll take it year by year, and aim for at least 2 more years. Depending on how markets do, I could potentially hit $2M in investments by then. That would give a lot more options and cushion.

OP here. Providing another update since it's been more than 2 years since my original post and a year since my last update. It's interesting looking back and seeing what I was thinking 1-2 years ago.

Investments/cash now at $1.5M. Total net worth at $1.7M. Work still going well. Total comp estimated about $370K this year, and $450K next year (at current RSU prices).

Plans could change, but right now I'm thinking I might FIRE as early as mid-next year. If markets stay okay, I could have anywhere between $1.7-$1.9M LNW / $1.9-2.1M TNW.

I've been spending $55K/yr in most recent years in HCOL city, so think these amounts above would be plenty (very low withdrawal rate and likely to grow).

Have been having more conversations about retirement plans with spouse. They're now looking into it more seriously now that FIRE possibility is getting more serious/closer for me, and looks like they could FIRE just 7-9 years after me (possibly sooner if markets do decent and/or if we move to a lower COL city once spouse FIREs, which is very possible).

Congrats on the great outcome and thanks for updating us. I have a similar role in-house role compensation wise to you with a spouse with a very good income. I have thought about retiring early, but with a young child, so going to keep working until get to at least $4M in investments/cash.

Nice! How far along are you, and when do you hope to hit $4M by?

Roughly where you are. At about $1.3M LNW and just under $2M TNW. So unless the market goes crazy probably not retiring for another 10 years. But that would still get me retired before 50 and I have never cared that much about FIRE.

[gaddockteeg]

I'm impressed. My NW is 4M including my home and my FIRE has always been my goal but I'm no where close. My number just gets higher and higher.

I thought I would be done by now but 2 kids completely changed my calculus.

[The Lsat Airbender]

I wouldn't include a residence in the NW number for this purpose, unless your retirement plan involves selling it (and then you need to discount for transaction costs, cap-gains tax, and the risk of a down market).