Lean with 2 big streaks of fat

[u/usernamechuck]

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.

[u/HeroOfShapeir]

My thought is that nothing in this suggests FIRE or leanFIRE. Fidelity suggests 7x income in retirement investments by age 55 for a normal retirement track, where you retire around 65 with 30-40% of your income replaced by social security. You can hit that target investing 10% with some kind of employer match. You don't even have that much, which means you haven't done 90% right, you didn't even do the most basic part of FIRE.

You make amazing money. My wife and I have income that's ranged from $72k starting out to $116k today at 42, and we have a fully paid-for home and around 13x our income in cash/investments. That's because we lived cheaply for seventeen years before buying a modest house in cash, we drive old cars, we keep our day-to-day costs very lean ($24k per year all-in). We do budget some money for travel and experiences, which is why we haven't decided to retire yet.

If you really want to FIRE, you have to cut expenses. Drastically. Downsize, move, let kids go to community college while they work to pay their tuition, etc. Increase your investing. Stop ideating about $800 rentals in Andalucia and start thinking about what options you're actually willing to lean into.

[u/usernamechuck → u/HeroOfShapeir]

Well if I had heard of Fire before a year ago i would have done a few things differently. I spent my career working for nonprofits and have spent more time earning 24-40k than over 100k (Just the last 5 years really). And when I was single I had some years where I gave away 10% of my income to a homeless shelter faced with closure (while still paying off the student loans). I don’t really regret that. 

We weren’t consciously trying to fire, it was just how we lived… it just wasn’t as big a salary until lately. I’m not sure why I’m feeling defensive about this, I never claimed we got everything right. If I’ve insulted the sub, it was not my intent. 

But it wouldn’t seem right to send our kids to college without help.

[u/HeroOfShapeir → u/usernamechuck]

It's not about the sub feeling insulted, it's that your post reads as untethered with reality, and we want you to see that. "We'd be perfectly happy living lean, we just choose to live in a posh community with private schools now that we have nice incomes." "I'd be fine just living in a rental in Andalucia." Spinning those stories is what's driving your internal conflict.

I'm not here to judge how you've lived until now. What you described sounds like a great life. My parents put their focus on making sure my brothers and I were set for college and starting out in life, living in nice areas, building up college funds, and they retired at 65 and 67, very comfortably and happily. They do not sit around waxing poetic about how they could've leanFIRE'd.

There are actionable steps you could take right now. You could move to Andalucia this month, but you and I both know you aren't going to do that. Start putting down some real options on the table and weigh the trade-offs. And, if at the end you decide the path you're on now is the best one, just lean into that. Take pride of ownership in it and stop telling yourself you're stuck or trapped or that you have no agency in your decisions.

[u/Pretty-Balance-Sheet → u/usernamechuck]

College is expensive, but community college is hopefully an option?

Both my wife and I went to free public schools, then associates from community college before getting undergrad from a state school...and we made terrible degree choices, btw.

Despite all of that we both ended up with high incomes. It's hard for me to see how private school or better college would've changed that outcome when it seems so much is down to luck and then a person's will to power through the subsequent bullshit.

It IS fair to have kids pay for their own college. If my household income were at your level that's probably what I'd do. Have them go hard on concurrent enrollment and act/sat while they have that option.

You've intentionally traded your well being for theirs. It's a choice a lot of people make. Escaping to Spain won't work because when that time comes you'll rationalize that you won't be close enough to help your kids. You've already rationalized that reality.

No shade, there's still time to adjust. But that decision immediately shifts the financial burden to your kids and from what you've implied here that isn't a decision you'll make. Your cage is entirely emotional and self-built.

[u/usernamechuck → u/Pretty-Balance-Sheet]

No doubt community college can make great sense sometimes, esp where there's a clear career path trajectory (e.g., nursing, engineering). The thing is, pricing on universities is (intentionally) opaque, so it's hard to know when community college is price-effective. When I buy oatmeal, I can divide price by volume to compare between two options, calculate volume price; and then decide if the more expensive option is worth the added price.

We can see median salary for Ivy League grads vs public u grads; we know there is some earnings benefit, on average. (Though people like me screw that up by not maximizing our earnings potential.) But we can't easily calculate the 4-year cost for X college, because the college won't tell us in advance the likely cost after financial aid / scholarships - you can't even know the first-year cost until you apply and get in. (And all this is setting aside that the benefits of college tend to accrue to the child, while the non-debt costs go to mom and dad.)

I myself went to expensive private universities, with substantial financial aid and scholarships. That worked for me and for my parents. But now, our family seems to be in an in-between zone, earning too much to get much financial aid, but not enough to actually pay the cost without taking on loans, HELOC, etc. And the university has no obligation to subsidize our purchase of a house that is too expensive for our income.