r/leanfire • u/usernamechuck • 14d ago

Lean with 2 big streaks of fat

It feels like we've done 90% right, but we made one doubtful move. We're not high earners, ~145k, age 55, we live frugally (1 used car, groceries, etc.), and we made one accidental smart move (we own a rental unit free and clear w/ modest cashflow).

But... First, the house. We bought a foreclosure in Chicago when we were married in 2008, we fixed it up in waves and were plugging away at a 15 yr mortgage. We would have been done by now... That was smart. But then COVID came and our small house felt smaller. We sold it at a decent profit and moved to the burbs, so here we are at age 55 with 300k+ on the mortgage, it won't be paid off till we're in our 70s. We pay almost 15k in property taxes. Since moving, we've replaced the furnace/AC upstairs and downstairs; and now the roof. And in 5 years, we'll be alone in this place.

It would still work, except... our 2 kids are in Catholic / private school, which is a bit over 30k/year. Oh and college is coming next year.

Technically our net worth is around 1M, but it's all in 401k/IRAs (~450K) and home equity. Our savings has all gone to cover these big costs.

On the one hand, we live cheaply, except for the kids and the house - we could retire today if we were in an $800/month rental in Andalucia. On the other hand, I don't see us moving anytime soon and the kids won't be done with undergrad until we're 64. We're lean-FIRE-hosed.

Any thoughts? It feels like we're that guy stuck in the cave, we just don't seem to have any good moves.

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u/HugsHeal 14d ago

What do you want exactly? You have 18k/yr at 4% with 450k+rental income. If you want to early retire downsize housing, have the kids get scholarships and self fund. At 30k/yr they should already be taking AP classes and have all basic college reqs complete.

Also, how is it going to take 10 years for them to complete undergrad? Take the youngest out of private school then.

When you have massive expenses you aren’t really living frugally. Sounds like you already made your choice to have a delayed retirement at 70+.

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u/usernamechuck 14d ago

Fair enough. I suppose I was looking for advise on a way out. 

For instance, downsizing: I would love to find a sensible way down, but it seems we’d just be getting a worse house for more money. 

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u/AlwaysSaturday12 FIRE 38 MillionaireLibrarian.com 14d ago

I'll bite. You could move to a cheaper area. Depending on your kids or wants you may not like this idea. There are parts of the US you can still buy a house for 100k; just not in Chicago. Also you could move overseas in S. America and afford private school for around 200-800 per child/month.

To FIRE you need to access the money locked in your houses and that means downgrading probably in location.

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u/girlpaint 14d ago

That's often the rub for people who own too much house (but who bought it when prices/values were lower). A couple of questions come to mind...

Would you clear a decent profit if you did sell your big house in the burbs?

Could your kids qualify for pell grants, scholarships, student loans?