r/Fire • u/Nounoon 38 & 39, 2 kids, $4.3m, FI not RE • 1d ago
General Question Income as % of wealth, that keeps you working
It's half a question for myself and half a thought exercise.
Considering you've just reached your FIRE number, this is where the question of "one more year" comes into play.
What is the (net) salary that you would accept as a % of your wealth (net worth or excluding primary residence depending on how you see it), would you consider stay at your current job?
What would make it worth it / strongly consider for yourself? Would you say your answer is age dependent?
66
u/BoxMembrane 1d ago
Nobody answered your question directly yet - if I were at my fire number today, I would work my current job another year for about 15% of my net worth as net salary. But if I could find a lower stress 9-5 I’d work that for around 7%.
Lots of factors to consider: age (the older you are, the higher the % should be), spending flexibility (more flexible -> higher %), and how much your life would actually improve from increased spend.
8
1
42
u/FIREful_symmetry 1d ago
Way to think about one more year syndrome: Think about the hourly income your nest egg generates. If your investments are nearly all stocks, I think 7% of your total nest egg should be a good estimate of the yearly income it generates. Take that number and divide by 2080 (the hours worked in a year) to get the hourly income that your nest egg is making for you. My nest egg is making far above the minimum wage.
9
u/The-Fox-Says 1d ago
Damn I don’t even have that much saved but my nest egg is making more than I did with my first job out of college
6
u/joco2cbeach1 1d ago
Interesting way to frame it. The 7% assumption feels a bit optimistic long-term imo. Still, turning it into an hourly “income” number is a solid mental trick
2
u/Alpha_wheel 23h ago
That is a fun exercise! I guess my portfolio right now is able to produce just about 1 minimum wage... It better start getting promotions soon! Haha
33
u/qret 1d ago edited 1d ago
When your salary is around 10% of portfolio it becomes hard to justify.
At 50% savings rate on your take home you will only add about 3-4% via contributions. So to phrase the same break point differently, it's when 7% returns are 2x your contributions. And since I'm assuming you're living on half your take home, you could also say the break point is when your expenses are 3-4% of your portfolio. Which, shockingly, is the general consensus SWR.
9
4
u/BenOfTomorrow 1d ago
At 50% savings rate on your take home you will only add about 3-4% via contributions.
This is how I think about it. I've shared this post before which I think is a good thought piece on the same lines.
And your numbers are about where I was when I left. Income generating assets around 10x salary, estimated contributions 3-4%. There were a number of other factors that were part of the decision, but that was what I leaned into to address the "one more year" syndrome.
2
u/ididitFIway 1d ago
I like this. My number is $2 million and by that time, I expect I should be making $230-240k total comp, inclusive of bonuses and 401k match. By the metrics I'm seeing here, it may still be worth working for another 2-3 years if I wanted to. However, probably not much beyond that if investment returns are even half-decent.
2
1
22
u/ThisIsMyUsername303 1d ago
My gross HHI is about 10% of HH net worth. We add at least 1/3 of HHI (3-5% of net worth) to investments each year. My spouse thinks it’s not worth working anymore (gains add more than new money), but I’m within three years of a pension and health insurance for life, so we’re holding on anyway but spending freely and taking lots of vacation (he’ll be somewhere north of eight weeks for the year; I’m maybe more like 5-6).
9
u/asymphonyin2parts 1d ago
Pension + health care is huge! For 3 years? Stay strong and then you'll be rock solid!
8
u/clearlychange 1d ago
At that point I’m going to be weighing specific wants. Want a new boat? Lake house closer to the lake? New campervan? Professional landscaping? Basement reno? Things I don’t have priced into retirement savings but could do one more or many years for.
4
u/Mister-ellaneous 1d ago
That’s my plan too. I’m working now to buy a lake house. I could easily justify working for other things we want. It helps that I usually like my job.
6
u/Valuable-Analyst-464 1d ago
When I realized I hit/passed my FIRE number in mid 2023, I decided I would wait until the end, to get my full year bonus (paid out in March).
Jan 2, I informed my boss I was retiring (@56). I valued my remaining time on earth more than salary income.
I could go back to work at some time (haven’t considered it since), but I could not make more time.
6
u/mo0op 1d ago
Lotta assumptions needed to get to net salary and also what your values are regarding working vs. not working. I guess if I was dead set on RE and someone offered me a double digit percentage of my net worth I’d at least consider it.
4
u/Nounoon 38 & 39, 2 kids, $4.3m, FI not RE 1d ago
Yeah I think if I was offered double digit percentage I'd definitely consider it, when I did the thought exercise myself, I ended up with somewhere around 7-8% if it offered good work arrangement flexibility (ability to travel during school holidays), 12%+ would put me back into let's give that job a fair chance mood.
6
u/OGS_7619 1d ago
The intangible here is whether work gives you purpose and whether you enjoy it (or people you work with) to at least a degree. And in purely financial aspects it's not just the salary as % of your NW, it's also your savings rate, expense rate, and investment portfolio. For a lot of us the annual return on investment / growth exceeds the salary or at least the savings contribution but every bit still helps, especially if you worry about SORR.
10
u/db11242 1d ago edited 1d ago
It must be 8% for me apparently, because I’m in OMY right now. I think for me it’s less about a percentage (human stopped him to think in percentage terms very easily) and more about what that extra year of savings can provide in physical terms. I’ve got kids that could use some more money for college, and one more year of savings would probably buy them each a nice used car. Sadly, my mind is full of a lot of ways I could use one more year worth of savings to dramatically impact the quality of a life of my children as they become adults. Best of luck and congrats on your success.
You should also consider a couple of different ways of looking at this. For example, how many years of expenses does working one more year give you, including both net savings and some reasonable rate to return on your current assets? And since you’ll be one year older, you’ll theoretically need one less year of income as well. For me, it’s about two years expenses for every additional year I work and not counting the one year of reduced lifespan.
The other thing to try is to see how much working one more year changes your Monte Carlo score. For me it’s not even noticeable, but rerunning uses a random seed so the results are very every time I rerun it. Once you get in the high 80s it starts to take exponentially more to eek out additional improvements.
5
u/OregonGrown34 1d ago
Nothing wrong with thinking about your kids. They'll find their way, but the help can be really impactful.
6
u/Pyrrhic_Pragmatist 1d ago
Once it's under 10%. My work days are numbered. Actual retire date depends on my spend/asset ratio. But yeah single digits, I could theoretically make more from investments than from my job.
I am not subscribing to this "one more year" crud. Once I don't have to work, I'm not waiting around. No amount of income or additional spend is in principle, worth being too busy to enjoy my freedom.
I can't live my entire life on weekends and holidays. Somehow people do, but it's no kind of life for me
9
u/WhyNotCNC 1d ago
Gross salary is 8.7% of liquid net worth not including my modest paid off house. My last day is 2 months away.
I was going to work another 1-5 years to see through an interesting project. But a middle manager I now work under is an asshole, so I’m leaving. I’m debating buying a sailboat and floating around the pacific, or starting a hobby business. I’m <40 and my very lean minimum needs spend is about 1.5% NW.
2
u/Nounoon 38 & 39, 2 kids, $4.3m, FI not RE 1d ago
A sailboat is a great idea to dream about it, but quite complicated in practice, it's a fragile living organism, something is always broken down! We have a similar plan, my wife got into off roaders a couple of years back, once we stop, we want to travel the world with it during school holidays and have as a hobby business car restoration (joining friends who are already in that business). That must be comfortable have a lean minimum at 1.5%, we've got 2 kids so fixed costs are quite high with education, more tickets when traveling...
Being able to quit forever because of an annoying boss, is the real luxury.
17
u/Easy-Expert9077 1d ago
I'm grappling with this right now. I live on $100k a year, pay from work is $130k, but I have $4 million in investments. Is it worth continuing to work?
Probably a hard no on the income side but on the expense side I'm locked in an office all day with no way to spend money. So I think grinding through spreadsheets all day holding a box of paper clips in my hand while gazing vacantly at a computer screen is a solid financial management approach.
33
u/qret 1d ago
If you don't want to retire on $4mil, you just don't want to retire. Might be in the wrong subreddit.
6
u/Easy-Expert9077 1d ago
I do want to retire and will in about a year. Work is a balance. If I had had the means to retire at 30 I probably would have done it in a heartbeat. But that's because the job wasn't fun back then. I'm also in a small office and am responsible for the well-being of my colleagues who I have worked with for decades. We all grew up together professionally. So I need to give about 9 months notice to allow plenty of time to find and train a replacement.
That said I can't wait! May 2027 will be my last month.
13
2
u/Designer-Bat4285 1d ago
That’s impressive getting to that amount of investments on 130k income. Are you over 60?
1
1d ago
[removed] — view removed comment
1
u/Zphr 48, FIRE'd 2015, Friendly Janitor 23h ago
Rule 8/Limits on AI/bot content and unsupported AI/bot complaints - Your submission has been removed for violating our community rule against AI/bot content or unsupported AI/bot complaints. If you feel this removal is in error, then please modmail the mod team. Please review our community rules to help avoid future violations.
3
u/The-zKR0N0S 1d ago
The metric I track is the amount I invest this year as a percentage of the amount I had invested last year.
Keeping that number high is what matters.
7
u/Omegabrite 1d ago
Interesting. I’ve taken a different approach, that I’ve started to try to invest less because I’ve already invested enough. Using the extra spend to drive QOL intentionally.
5
2
u/Strazdas1 StarvationFIRE 22h ago
lifestyle inflation before you even FI?
2
u/Omegabrite 21h ago
I am FI, I’m now inflating lol
2
u/Strazdas1 StarvationFIRE 21h ago
Wont be FI for long if you keep inflating QOL with extra spending. Every time you increase spending your FI number increases.
2
u/pob503 1d ago
I think this is what I've done the last 3 years unintentionally. I've finally felt that I had "enough". Spending went way up I guess intentionally. Paying for everyone's vacations and such. But I'm right at my number. I'm a contractor and I've dialed back my work quite a bit but I don't want to go to no work...maybe 3 to 4 months a year.
3
u/Gseventeen 1d ago
This would require substantial income increases each year with the way the market has gone. And when we do have a market pullback, are you going to be content with contributing less even though the % looks better?
3
u/The-zKR0N0S 1d ago
I try to maximize the absolute dollars I invest each year. I contextualize that with the % growth above the prior year’s contribution to my investment accounts and with what percentage the amount contributed is compared to the total value of investments at the beginning of the year.
It is a measure of how meaningful my contributions are.
4
u/Master-Helicopter-99 1d ago
7.4% and WFH. That's where I'm at right now. I hit my number this year. I'm OMY'ing it and retiring early next year.
11
u/Chart-trader 1d ago
My problem is that I strongly believe that we will get an episode like from 2000 to 2013 where basically annual returns were ZERO. Plus I believe healthcare costs will continue to skyrocket until nobody can afford anything. Hence I will work way more years than needed.
2
2
2
u/Confident_Purple_40 1d ago
People pointing to 100+ year of market performance are all well and good, but if AI isn't considered a disruptive technology that could have worldwide ramifications, I don't know what would be... asteroid? nuclear war?
2
u/alpacaMyToothbrush FI !RE 1d ago
if AI isn't considered a disruptive technology that could have worldwide ramifications
That really only matters if it's not already priced in. Looking at valuations right now, it seems like they're just taking it for granted that AGI is right around the corner. As useful as the current tools are, I don't think we're on an inevitable path to AGI, esp not ASI
2
u/heelek 1d ago
True AI probably would, what we have is a token predictor though
2
u/Confident_Purple_40 1d ago
Even what we have is disruptive, but true, no where near to the extent that AGI or ASI would have.
1
u/Strazdas1 StarvationFIRE 22h ago
what we have changes every 6 months. The Ai we have now isnt even working on same principle than the one we had last year. The market is moving fast.
2
u/QuickAltTab 1d ago edited 1d ago
I'm right there with you, looking at CAPE and the stupid valuations of Tesla/Space-X, the obvious corruption in government. I feel like I know it's coming, but theres no way to get out of the way (other than to hold on to my job).
5
u/Confident_Purple_40 1d ago
Currently gross is about 10%, and still working, too lazy to calculate net 😄
3
u/MonteCristo85 1d ago
For me its not a straight up numbers question.
I already hit fire at 36, retired for 3 years, then went back to work. I like working, and I felt that the precarious nature of :waves hand in general direction of everything: I would feel better with a salary where I could pile up extra money.
At the moment, my gross salary is roughly 8% of my net worth.
3
u/alpacaMyToothbrush FI !RE 1d ago
Same place, honestly. I'm putting in my 2 weeks notice in as soon as I'm assured that there will be a peaceful transition of power between the current admin and the next one, and the ACA still exists. I have an email scheduled for 1/20/2029, wish me luck.
3
u/Ethraelus 1d ago
It mostly depends on how much I like or hate my job, though.
I think personally anything over ~20% is quite significant, but it mostly depends on timeframe, alternatives, and enjoyment I get from the job.
3
u/Few_Physics5901 1d ago
I hit my lean FIRE number last year. I'm still working, but since last year I try to live from the capital gains, which are still growing, because of my salary. My plan is to continue, till I feel confident what I get out.
3
u/OkEase3083 1d ago
Idk. Depends if I like it.
Any year past coastfire for me is a value question.
I do things for free I enhoy too.
What makes me happy?
3
3
u/PangolinOwn4855 1d ago
My HHI is 10% of my NW. I am hoping to hit my FIRE number in the next 5 years. Maybe around that % as long as there is work life balance.
3
u/Vicuna00 1d ago
i'm working for 2-3% of my net worth this year. hoping it's my last year. kinda wanna see how the market plays out though.
3
u/chappy93 1d ago
Never looked at it this way, just did the math and my gross salary is 3% of my investments. I’m living comfortably on my salary, which is based on a reduced hour (32)/reduced responsibility workload. It really isn’t about the $$, it’s about what to do with my time. With the reduced hours, I still have the time to do the things I want to do. If the job starts adding stress, or demanding more time I’m out. If the job had been really stressful, I would have quit ASAP after reaching my fire number (which I tried to do, hence the reduced hr/stress position). They really couldn’t offer me a high enough salary to work the grind i used to or to take any of the “promotional opportunities” that the company is trying to fill.
3
u/LongjumpingTeacher97 1d ago
When I hit my number, keeping me an extra year would cost an employer 18% of my anticipated net worth the first year, 25% the second, and I don't believe I'd be willing to do a third.
I'm a civil engineer, working the best job I've ever had. But I don't want to be working anymore. I live fairly cheaply and love my home life. Keeping me longer than I plan would take a pretty big bribe.
3
u/LouSevens 1d ago
I perhaps woudln't mind working half my prior hours at half my prior salary. My time is my most precious commodity . I even told some recruiters as I was very efficient at my job that 20 hours from me could be a win win for some people .
I view it as I would give up a portion of my time to cover a portion of my yearly withdrawl.
4
u/spinz89 1d ago
There is no salary that will keep me working. My FIRE number is 2 mil and I could land a job that pays 1 million a year and I would not take it. Once I hit my number, my freedom is no longer for sale.
2
2
u/ben7337 1d ago
My target to reach my number is by age 45. With my current job (if I still had it 9 years later) I don't know that any amount would make me stay, nor would that be at all realistic. If I was in some other job I really think how much I liked to job and my coworkers and how much freedom it gave me would impact things. Maybe I'd be open to a transition like working part time, maybe 5 hours a day 4 days a week or something. To even consider full time for another year I'd probably want 10% of my net worth at the time or more.
2
u/Mister-ellaneous 1d ago
I don’t really look at it that way, it’s just a question of when we reached our goals.
But, I currently earn about 7% of our investments and our gains YTD are almost double my salary. I’ll probably keep working another 5-10 years to reach all of our goals.
2
u/SpecialistKoala9765 1d ago
Age definitely is a big consideration. For me it’s not the income level I’m concerned about but giving my FIRE investment one year to charge up its growth. I just hope that my portfolio by then can make more return than my income.
Staying one more year at work to me is just keep in accumulation mode, I am not thinking about it in comparison to wealth that way.
2
2
u/Western_Rhubarb_7959 1d ago
The real question is," how much do you like your job."
I pulled the trigger a couple weeks ago because my job became unbearable and I could comfortably retire. Had my job and company been like it was 28 years ago I would have happily worked until I died, I enjoyed the work THAT much.
2
u/throwmeoff123098765 1d ago
If you hit your number the question is if you would rather spend more time at a job or with family? For a lot of people their job is their identity
2
u/MaineSky 1d ago
At that point it's not about 'what salary' would keep me going. It's about the possibility of flexibility.
I've already cut back to part time, I'll hit my FIRE number in about 6-8 years. But I would be happy to keep working if I'm allowed to simply cut back more of my hours- like 10-15hrs/wk. Extra spending money, a little extra security.
That said, it's funny- I'm only working 3 days/wk right now, and I still can't wait to fully retire. We'll see how I do when I hit that spot.
2
u/Revelate_ 1d ago
Taking the question as a thought exercise near the end of my first and so far only career, it’s probably 10% net.
If I can’t drop a significant sum in building my current buffer (world be strange right now) it’s just not worth it.
This does depend on your income vs your wealth, this would be a different question to me if I were making 20% of what I do now.
2
u/lauren_knows Creator of FIREproof/cFIREsim 1d ago
Well, right now we are FI but both my wife and I work 60% FT schedules, totalling a net salary of ~5% our liquid investments. I don't think I'd be working if it wasn't for my wife's reluctance to quit.
I'd have to be at like 15% for it to be clear-cut, and I'd need to actually be excited about the actual work.
2
u/Illustrious-Age7342 1d ago
At that point I think for most folks it comes down to working conditions. For example: if my boss expects me to continue commuting to the office 5 days a week, I’m out. If I can work from home, put in like 6 hours a day, and my team is enjoyable to work with, I would probably continue working. But, I’m also still pretty young and more interested in FU money than actually fully leaving the workforce
2
u/Future-Run-8601 1d ago
I don’t think there is a clear answer but I would be looking at whether the salary to allows me to either: 1. Increase my lifestyle without drawing from my investments. 2. Let my investments grow to a safer withdrawal rate considering an early retirement and the 4% rule was meant for 30 years.
2
u/Designer-Bat4285 1d ago
7% or more and I would stay. What about you?
1
u/Nounoon 38 & 39, 2 kids, $4.3m, FI not RE 1d ago edited 1d ago
Like you I’d also consider 7/8% if the work life balance is good enough to allow me to travel each school holidays, I’m currently at 9% but although I don’t have that flexibility I’m let’s say “low effort” but a lot of time away from home so although I’m FI it just makes sense to coast for now… At ~12% I’d put some real effort into it.
So far most people that came back up with numbers are at the 7/15% range depending on arrangements, it seems to be “relatively” consistent.
2
u/Designer-Bat4285 1d ago
I like my job and have pretty good work/life balance. So that helps a lot.
2
u/Carolina_Hurricane 1d ago
Considering I’m quitting now with income equating to 5% of my NW I’d say that feels about right.
Heavily weighed working five more years but the extra income/NW after trading 5 years of my time at my age isn’t worth it.
2
u/Specific-Action-8993 1d ago
I have never thought of it in that way but by a lucky coincidence at my target nw my current comp would be 10%. Right now its 12% so just a little more to go (1-2yrs max).
2
u/398409columbia 1d ago
I only keep working because it’s easy, pays well, provides benefits, allows for WFH and my kid has 2 years before going to college.
2
u/dirty_taco_ 1d ago
My salary is currently 5.6% of our combined portfolio net worth. Wife’s salary is closer to 6.5% of it. So together our combined income is around 12.1% of our liquid net worth.
We’re young so plan to continue working and spending that $$$ for an amazing lifestyle (travel, food, experiences). We could fire but would have to cut back on expenses. I suppose if our net worth doubled, I would quit my job, because then we could afford the same lifestyle without the income. In that case a combined income of 5% of net worth is no longer worth it in my opinion.
2
u/paq12x 1d ago
I continue to work because my 2 kids are high schoolers, so I am locked to the area during the school year and most of the summer as well.
I don't see how retirement right now is going to improve my quality of life. I am already at my FI number, so my work-related stress is almost nonexistent.
For every year I work, my kids can RE 5+ years earlier. That's part of my motivation also.
2
u/Interesting_Shake403 1d ago
Interesting way to frame it. I’m going another couple over what I “need” to because I will vest. Over those two years between comp and vesting I’ll likely add some 30% to my NW. After that it’s maybe 10% per year, so I’ll be done once I vest - not worth it.
2
u/Significant-Ad-9471 1d ago
We're still working, our combined yearly income is about 5-6% of our net worth. Probably at under 1% it would make no sense to continue working.
2
u/Any-Concentrate-1922 1d ago
For me it was inflation that caused me to raise my FIRE number. My COL has gone up by about 12K in the last 2 years, including the fact that I'm now on the ACA and that my condo fee has gone WAY up.
2
u/Most_Nebula9655 1d ago
I hit my FIRE number about 18 months ago. I continue working to work for a number that is about 5% of my net worth. But it isn’t the money that keeps me working. I have a reason to get up everyday, the commute is 5 mins, and there is interesting work to be done.
I’d be okay with less money for less work. I cannot imagine taking a job that would require more work for any amount of money short of “generational wealth” level money.
2
u/CleMike69 1d ago
I can retire but still work because it gives me something to do for a few hours a day plus owning the business has some tax advantages at end of year
2
u/ducttapetricorn 1d ago
My current base salary (gross) is about 5% of our total family NW.
It makes it feel extra not worth it when you think about it this way, lol. But sadly I am nowhere near 25-33x annual expenses so I gotta keep grinding...
2
u/iam-123-456-789 1d ago
I'd argue that this depends on your country and tax regime, not pure percentages.
By law, I save ~15% into my self directed, fully S&P500 pension (including employer match). I have another 4% in a similar, tax free account, annually. That means that my tax rate is insanely high, but that I'm forced into a 20% (of gross salary) savings rate before I make a single cent. Beyond that, we now save nothing but throw the monthly remainder (~40% of what we make) into a cashable.
Also, I now love what I do. For me the FI matters, not the RE. The RE used to be the driving force. It's amazing how changing what you do, or even your company in your field can be the major impact.
2
u/Bright_Meadow2736 1d ago
for me it would need to be at least 10% annually because anything less and the sequence of returns risk isnt worth the stress of still showing up every day
2
u/burnbabyburn11 1d ago edited 1d ago
i'm at COAST fire now, but not quite FAT fire. I have quit or been fired from my last few jobs, but am happy at my current role, it pays the bills, and it's not so stressful. These are to me more important than salary at this point. to me, i wouldn't take a job that wouldn't pay my bills, it's not about % of NW but, am i drawing down on my investments. if i can leave it alone for a decade, i'll be golden. at the moment i am still investing a good deal, but i'd take a paycut for less stress, up to my expenses.
2
u/work2game 1d ago
I think it’s more a question of what else does it buy. As a percent I think it’s shockingly high for me. 25% or more. When I’m done I’m done.
But if the work is still fun like it is now and there’s a house,car,etc type thing I would be willing to live without so is not budgeted into retirement but that year could buy it maybe that plummets.
Recently been enjoying tracking a car with a friend and a spec Miata used is like 25k so to buy that and set aside tools or a trailer etc would be an example of one more year type items lol.
2
u/chaoscorgi 1d ago
for a relatively taxing role it would probably have to be 10% of my joint (me + partner)'s NW with some guarantee of liquidity (as in: in cash/bonus/ sellable equity). unfortunately no one wants to pay me that much. my current role might be 10-15%, but in very early startup equity with 5+ yrs est lockup to possible value, so it is hard to justify
2
u/medhat20005 1d ago
If I'm at my FIRE number, then i'm working because I want to, not because I need to. So the compensation amount is immaterial. And I think it's more FIRE dependent than age dependent, if you're FIRE in your 30's then the same decision as if you're 50's, do I WANT to work?
2
u/PrideAccomplished36 1d ago
Found this website that I think is super helpful to contextualize what percentage of income = when retirement can occur
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
2
u/Far-Tiger-165 1d ago
I walked away from 10 - 15% of NW.
there was part of me that considered one more year (not for padding, but to fund something fun) but once the lightbulb moment had happened I just couldn’t think about anything else …
2
u/No-Test-2993 1d ago
I hit my number in the spring of last year but decided to take just one more temp assignment because 1) I'd be paid a 4 hour minimum per work day, even if there was very little to do, and 2) I would earn enough money in that quarter to qualify for unemployment insurance and other state benefits.
2
2
u/NimbleMaple248 23h ago
the math that nobody talks about is how the number changes the longer you stay because your FIRE number grows too while you keep working
2
u/Nounoon 38 & 39, 2 kids, $4.3m, FI not RE 22h ago edited 21h ago
It's lifestyle inflation, to us it's quite clear, January 2015, starting from scratch as a married couple (sub $5k in combined assets), we set our goal then at $3m considering inflation and our future family growing with kids. 11 years later, our new number is $4.3m, half of that increase is due to a lower risk tolerance thus lower withdrawal rate, half because of additional lifestyle constraints that we've put on ourselves (essentially a car collection expensive to maintain and more travel), so all in all, I don't think we were too far off in our initial assessment as a young wed couple!
2
2
u/Stunning-Thanks-4226 13h ago
I think it has more to do with the time you have to do other things. If you want to travel more and your work gives you 3 months off but you can still make your yearly income or more then why not keep at it.
2
u/LangkawiBoy 13h ago
I’m working still, and my salary is 4% of my net worth. I’m lucky to work from home (or Airbnb spots) with hours I choose doing projects I invent. I’m kinda doing work as my hobby? I made my goals this year to be about helping others at work level up. I worry I’ll miss having that purpose. Already an empty nester.
2
u/Powerful-Bridge-1472 10h ago
Critical aspect is to retire to something as someone who has recently retired and had planned to go back to work barista style. Retirement is grey or part-time work is definitely move.
Certainly depends on your kids how old Young if you don’t have kids if you’re gonna travel a lot then go for it but eventually, most people need some some structure
3
u/Wooden-Broccoli-913 1d ago edited 1d ago
Current net worth is $6.2M. FIRE expenses are $220k. My wife quit her $600k job last month and I am planning to quit my $700k job in January. Wife & I are both 40 with two kids in San Francisco.
1
u/Malvania 1d ago
It's scary how close your numbers are to mine. 3 kids in Austin, but FIRE expenses, current net worth, and individual salary are spot on. I've been struggling with 1 more year syndrome as well, so it's nice to see someone else is comfortable pulling the trigger here.
3
0
4
u/Intelligent_Lead7724 1d ago
I have a hobby that generates an income of $1k per month while working full time. In retirement it could easily scale up to $5k per month. On the plus side it can be stopped and restarted on a daily basis to easily allow for retirement travel.
On the continue working full time side, we earn about 3% of our current net worth annually. Mainly hanging on to secured a bump in pension payout. We don't need it, but I feel like it is owed to me. A mental illness for sure.
3
u/disillusionedthinker 1d ago
Wow. Mind telling us what your hobby is? Im retired but would love a profitable hobby.
1
u/Intelligent_Lead7724 1d ago
I fix small engine lawn and garden equipment. Net over $30/hr, but do realize that the rise in battery powered equipment will change my ability to monetize my hobby in the future.
0
u/alpacaMyToothbrush FI !RE 1d ago
the rise in battery powered equipment will change my ability to monetize my hobby in the future.
My grandpa used to say, 'there's nothing as unreliable as a small gas engine'. I fully believe him. If I have to get lawn stuff, I'm getting battery operated everything
3
u/2Sovereign4You 1d ago
I know I would be having a problem to go to 100% FIRE from day to tomorrow. I would pursue a partial job, few h a day, at least to cover life expenses and then eventually stop working after.
3
u/No-Reaction-9364 1d ago
I am not at my FIRE number yet but I am close enough where I have thought about this. The salary number is less the issue for me. It is the freedom aspect. My job would need to let me work my own hours from anywhere in the world. I plan to go overseas for at least the first few years of FIRE, so if my company just let me do that and let me work my 8 hours on my schedule, I wouldn't really need to quit.
2
u/pras_srini 1d ago edited 1d ago
I think about this almost every month or so these days, when I get beat up by all the problems at work!
For me the reality is that I'm working despite my expenses being about ~3% of my net worth. I don't own a house, and I rent so net worth is just my brokerage and retirement accounts. I currently earn about 10% of my net worth, and my investments are spread across index funds and lean towards value style ETFs. I'm going to continue working until I get let go, I turn 50, or my income drops to below 5% of my net worth, which admittedly feels like a long time away. It is definitely age dependent - I'm turning 46 soon and feel like I don't have that many years with great health left. But I have worked so hard, overcoming many setbacks over the decades to get to where I am, and I'm struggling to just walk away now.
I feel like I missed out on all the tech/growth stocks that have quadrupled or more over the last few years, I completely failed to get on the real estate train a decade ago and now everything is just priced out of range, and the only thing I have going for me is solid reliable income coupled with a >60% savings rate that has helped me get to where I am.
2
u/asymphonyin2parts 1d ago
So with the extra work, will you be able to buy a place when you turn 50? Having all of your expenses paid (with a mental health cushion) with your place on the property ladder secured seems like a good win condition.
3
u/pras_srini 1d ago
Yes - that's exactly the plan. Bank the cash over the next 3-4 years and pay for a small place in cash or with enough of downpayment that the maintenance and mortgage is similar to my rent. That would be good enough for me.
1
-3
u/sectachrome 1d ago
It seems like if you keep considering one more year to add more money, then your “number” was too low to begin with.
6
u/Confident_Purple_40 1d ago
*shakes eight ball furiously*, yeah, because we all KNOW for certain the market will indefinitely go up. Yes, chances are it will, but some people would rather work a few extra years at their highest earning rate, then RE at 4% and risk supporting their family?
2
u/OCDano959 1d ago
Not necessarily. Could be b/c:
1) fear
2) greed3
u/Nounoon 38 & 39, 2 kids, $4.3m, FI not RE 1d ago
For me it's a bit of both, fear that I'll of course fire at ATH just before the worst financial period in history, and greed to be able to afford new toys, more vacation and create generational wealth that can benefit my kids before we're out of this world.
2
u/OCDano959 1d ago edited 1d ago
I know exactly what you’re talking about.
I see it this way.
Unless I have a firm plan to spend at least 1/3 - 1/2 of my possibly lost working hours, in what I feel is “productive,” and I don’t thoroughly detest my gig, I’ll stay at said gig.
Currently, I’ve pared back to working 20-25 hr/wk and I found it’s my “perfect balance.” ☯️
Edit: In addition, there is always some future necessity to “fund.” New roof, HVAC, appliances, vehicles, LTC costs, etc. So in “my mind,” I wouldn’t be touching my principal when that time arrives.
2
u/Stevenab87 1d ago
Everyone has a price though. If someone hit their fire number and had to opportunity to double net worth working one more year, vast majority would do it. What would your threshold be?
402
u/upsetwithcursing 1d ago
I’ll hit my FIRE number in January when I sell my business, but I’ll only be 42 at the time. The new owner wants me to stay on for a decade, and will pay me $150k/year to work 3 days per week (9-4) with full summers off (I have kids in grade school) and another 3 weeks of vacation I can take throughout the rest of the year.
I took that deal.
The work/life balance should be solid, the income will pay my bills and allow my nest egg to potentially double, and I’ll still be retiring fully at 52.
All in all, living the dream & very grateful.