In 2020, I failed at early retirement and I want to share why. For background, I retired in 2012 at the age of 34 after working in investment banking at Goldman Sachs and Credit Suisse for 13 years. I also helped kickstart the modern-day FIRE movement in 2009, when I started writing about achieving financial independence on Financial Samurai.
One of the things I enjoy about the Financial Samurai community is that you guys keep it real. After announcing that I plan to be more entrepreneurial and less focused on retirement a couple years ago, you guys gave an outpouring of support and encouragement. This means a lot.
When I was trying to survive the investment banking meat grinder in my 20s, I always saved in a special folder personal thank you e-mails I got from colleagues or clients. Their words of encouragement were more valuable than money.
On the flip side, one of the realities of keeping things real is that I've also got to face hard truths. And one of the hard truths given to me by some regular readers and many casual observers is that I'm an early retirement failure.
Facing The Truth: Why I Failed At Early Retirement
As an example, here is a comment from Dan on my post, Less Retirement, More Entrepreneurship:
“Thinking about it some more, isn’t your situation a case of early retirement failure? You thought you had enough money for early retirement. After having a child, you reassessed your situation and decided you needed more money. One of the criticisms of FIRE is “It all changes when you have kids” which seems to describe your situation.
Your whole brand is “be amazed by the guy who retired early to live in SF, have a family & coach high school tennis.” Now, you are going to monetize your blog.
You're going to be more entrepreneurial which sounds a lot like going back to work. Not necessarily the corporate grind but your focus on hard dollar goals sounds like you don’t think you have enough money, which de facto means your initial early retirement planning was insufficient to cover the range of outcomes.“
Failed At Early Retirement Indeed
Dan is absolutely right. After eight years of early retirement (2012-2019), I admit I couldn't hack it anymore. I'm constantly looking 3-5 years ahead in the future. If our current financial situation stays static, I foresee problems ahead, especially if there is an economic downturn.
I am now forcing myself to alter how I spend my roughly 20 hours a week on Financial Samurai from 90% fun to 50% fun, 50% business. For the next six months of my new beginning, I'm also going to increase the time spent on Financial Samurai by ~10 hours a week to focus on business. Depending on how I do, I'll then look for a job.
In fact, recently I did just that at the end of 2023, by working for a financial technology startup for 20 hours a week. However, I couldn't last for longer than four months due to the micromanagement and all the meetings!
Why I Failed At Early Retirement
Here are all the reasons why it's been hard to stay early retired.
1) I underestimated my desire for social interaction.
I am an extrovert and early retirement is harder for extroverts because we gain energy from other people. Further, I had one of the most stimulating jobs on the market.
Every day I got to utilize my finance and economics background to analyze global stock markets. I'd meet amazing entrepreneurs from Asia to help them raise capital in America. About once a quarter, I would travel to Asia for a conference or take clients on trips to see investable companies. There was always something new happening every day. My job was exciting!
When you go from working ~60 hours a week for 13 consecutive years to having all the free time in the world, it is very jolting. It took me a couple years to get used to my newfound freedom because I had doubts about whether I had made the right decision.
From 2013-2015, I found a partial solution to my missing social interaction by consulting for 10 – 20 hours a week at a couple financial technology startups. Living in San Francisco, I had always wanted to experience startup and tech life. But after a couple years of off and on again consulting, my interest waned, so I stopped.
Through tennis and softball, I was able to fulfill consistently my need for social interaction. However, the more I played, the more injured I became. Therefore, playing sports every other day was not the solution. For me to be happy, my body needs to be healthy.
Related: It's Impossible To Stay Retired Once You Retire Early
2) I underestimated how low interest rates would go.
Although I've been a firm believer of “low interest rates for life” ever since I started Financial Samurai in 2009, I did not expect the 10-year bond yield to drop to 1.5% in the Fall of 2019. I thought we'd stay around 2.5%.
The lower interest rates go, the harder it is for retirees to generate low-risk retirement income. Everything from municipal bond yields to stock dividend yields have come under pressure because, in finance, everything is intertwined.
For example, instead of only needing $1,000,000 in additional capital to generate $50,000 at 5%, one now has to accumulate $2,500,000 in capital at 2% to generate $50,000. Seeing such a massive shift in the goalpost when you don't want to take more investment risk is disconcerting.
The more interest rates fall, the more retirees fall behind. By nature, retirees are more risk-averse. Therefore, retirees may be forced to alter their asset allocation to ensure they are not left too far behind due to inflation.
To Benefit From Lower Interest Rates
The only way retirees can really benefit from lower interest rates is if they have debt. My refinance is saving me roughly $13,000 a year in cash flow, but it doesn't come close to offsetting the decline in investment income thanks to lower interest rates.
I used to think $250,000 a year was enough to live a middle-class lifestyle with a family in San Francisco. Instead, the data now says $309,400 is the minimum household income a year. The scary thing is, the income requirement figure was $343,000 in Q22019. The rising cost of living is a big reason why I failed at early retirement.
Update: Luckily, starting in 2022, the Fed started aggressively hiking interest rates. As a result, it's much easier to generate passive income today. However, we also had to endure a 2022 bear market. Thankfully, the stock market and real estate market have recovered. Interest rats are finally ticking lower again with fading inflation.
3) I underestimated how much I could love a child.
Before becoming a parent in 2017, I only had a two-dimensional idea of what love was. I loved my parents and sister in one way and I loved my wife in another way. Then when my son was born, a new type of unconditional love was created. He made me want to do everything to take care of him.
I understand now why couples who are financially struggling decide to have multiple children. It's clear now why parents pay an exorbitant amount of money for private school when everything can be learned for free online or at public school. I also understand why already wealthy parents feel the need to bribe their kid's way into university.
It is in our DNA to provide for our children. Otherwise, our species would not survive. Once you have kids, you will want to work a little bit harder and try to live a healthier lifestyle.
Due to these reasons, I've decided to hold onto Financial Samurai for at least another decade. Online business valuations should skyrocket given they cannot be shut down!
Update: Being a stay-at-home dad since 2017 has been the hardest job I've ever had to do. But it's also been extremely gratifying and worth it. Witnessing all the milestones have been priceless. And so has teaching my son and daughter how to ride a bike and swim.
4) Taxes went down and the estate exemption amounts went up.
When I left the workforce in 2012, it felt great because a $250,000 base salary faced a demoralizing 33% federal marginal income tax rate and the estate tax exemption was $5,120,000 per person. I was tired and no longer wanted to give a third of my salary to the federal government and another 8% to the state of California.
In 2020, a $250,000 base salary only faced a 24% federal marginal income tax rate. Meanwhile the estate tax exemption amount is now $13.99 million per person in 2025!
That's a lot and gives me motivation to accumulate a higher net worth, especially with Trump likely keeping taxes low from 2025-2029.
5) Being an early retiree doesn’t feel right.
After the first year of early retirement, I no longer told anybody I was an early retiree because I felt stupid saying so. It was embarrassing to be only 34 years old and not have a full-time job in one of the most dynamic cities in the world.
If I had moved to a small beach town in Kauai, I think I'd have been more comfortable telling anybody who asked that I was retired. But not here in San Francisco. San Francisco is a place where the most motivated, type-A people from the most overpriced private universities come to make their fortunes. The city has become very much like New York City, full of hustle and bustle.
When all your friends are killing themselves at work trying to make more money to afford a bigger house, tuition for multiple kids in private school, and the next promotion to proudly update on their LinkedIn profile, it feels extremely out of place to say you don’t have a job.
Therefore, I started telling folks who asked that I was a writer, a high school tennis coach, a consultant, or an entrepreneur. And you know what? It felt great having an occupational identity again. I failed at early retirement, but I found more purpose.
6) I overestimated my ability to move to a lower-cost area.
For someone who lived in six countries by the time he was 14 and has traveled to over 60 countries so far, I've been terrible at relocating. My wife enjoys stability too.
I've been seriously thinking about moving since 2012 when I first left my job. That year, I even tried to sell my primary residence. Thank goodness nobody wanted to buy it then.
In 2014, I thought I was ready to move to Hawaii with my wife. We created a detailed retirement income/budget spreadsheet where we'd live a comfortable life off of roughly $100,000 gross a year. Instead of making the move since we both didn't have jobs, we decided to make Hawaii come to us.
I found a fixer-upper with panoramic ocean views in an unknown neighborhood. The house was such a no brainer deal that I had to buy it. All other properties in major cities with ocean views trade at hefty premiums, not at a discount like they were and still are in San Francisco.
It took about two years to completely remodel the house to our liking. There was no way we were going to then leave after all that effort spent. We needed to enjoy the fruits of our labor gosh darn it!
Then in 2017, our son was born. It was as if he waited until the house was ready before coming into the world. We did not feel comfortable relocating to a new ecosystem as new first-time parents since we had grown accustomed to our doctors.
Dreams Of Retiring Hawaii – Why I Failed At early Retirement
What I did shoot for was relocating to Honolulu, Hawaii by 2020 if we got rejected to preschool. As we only applied to three for the 2019 year, I was secretly hoping we'd get rejected by all. This way I would have no more excuses left to stay. Alas, we got accepted to our neighborhood preschool five minutes away.
Staying in expensive San Francisco was the path of least resistance. We had our friends, our routines, and our network. Pulling my son from preschool after just getting acclimated and then going through the entire application process again in a new city with no guarantees didn't feel like a wise use of time. Instead, figuring out a way to make more money does.
I failed at early retirement because I was too lazy to move.
Related: The Proper Geoarbitrage Strategy: First Your City, Then Your Country, Then The World
7) Failed at early retirement because I have too much time.
I like to be productive. If I’m not doing something productive after a day I get antsy. For 32 months, I was a stay-at-home dad and writer. The days often went from 5 am – 11 pm. It was a tough slog, but I now feel like I can tackle anything in the world.
Now that my boy is in preschool, I suddenly have ~8 hours a day of free time. He takes a nap at school from 1 pm – 3 pm as well. The first month of preschool felt like I was on vacation again. But after a couple months of living the early retirement lifestyle again, I decided I had better start utilizing my time more productively.
With preschool costing $1,950 a month plus donations and our family healthcare premiums going up to $1,940 a month in 2020, the logical thing to do with my free time is to earn more money to cover these expenses.
Finding a job that provides subsidized healthcare and a healthy paycheck is the simplest solution. Figuring out a way to generate an additional revenue on Financial Samurai is another solution. Why not do both.
The funny thing is, as of August 2021, so much of my time went away due to the coronavirus pandemic. I ended up homeschool my boy for 18 months until he began preschool full-time on August 25, 2021.
8) Failed at early retirement because I've always wanted to be an entrepreneur.
Even before coming to San Francisco in 2001, I've wanted to be an entrepreneur. The dream started in middle school in Kuala Lumpur where I was in awe of businessmen who lived in mansions. They all had chauffeurs drive their Mercedes 280 SELs.
I didn't pursue my entrepreneurial dream because I landed a good job out of college. It was hard to say no to a healthy salary. When I finally did in 2012, I didn't optimize Financial Samurai for revenue because I thought I had enough passive income and a severance package to live a comfortable life. All I really wanted to do was have fun and write freely.
The problem with being too comfortable is that it demotivates you to hustle. When your investments are going up every year, why bother trying so hard?
I was just handed an easy life living in America. I also got completely lucky by retiring at the bottom of the market in 2009. I'm the 42-year-old loser, metaphorically still living in his mom's basement, not paying rent and eating free meatloaf all day.
By not facing much hardship after early retirement, I squandered away my potential to become a successful entrepreneur. I don't plan to let opportunity pass me by anymore in 2020+.
Related: Spoiled And Clueless? Try Working A Minimum Wage Job As An Adult
9) Failed at early retirement because I don't like to complain.
I believe everything is rational. If we want something we're going to do things to make that something happen. Even though I failed at early retirement, I kept on going.
Instead of complaining about my career stalling out in 2011, I immediately devised a way to escape in 2012. The best way to see if you deserve what you think you deserve is to go out on your own. This way, you've got nobody to blame or credit but yourself.
Instead of complaining why I still haven’t gotten bumped down from 5.0 to 4.5 in my early 40s, I've continued to suck it up and battle against 25-year-old ex-Division I tennis players. As a result, over the past four years, I've compiled a terrible losing record that would make anybody want to quit tennis. But I fight on because half the battle is just showing up.
Instead of complaining that the retirement income goalpost has moved $60,000 – $100,000 farther away to live a middle-class life in San Francisco, I've decided to face the reality that my retirement income simply won't be enough in the near future. I will now work hard and find new ways to reach this new retirement income goal instead of making excuses.
10) Failed at early retirement because I want to be able to continue giving my time and money.
If I was struggling for money, I probably would have quit Financial Samurai long ago because writing can take forever and everything I write is free. During this time, I've had the privilege and satisfaction of seeing so many readers fortify their finances and live better lives.
I've heard from college students who have bought homes and are now starting families because they have their finances in order.
I've heard from folks in their 50s who got the courage to negotiate an exit package and live life on their own terms.
Having financial independence also makes it much easier to give money. You're not always conflicted about whether to give or save for retirement. You're also able to more easily give your time. The reason is because you're not always wondering whether you should use the time to hustle.
Finally, I want to have the financial means to take care of my parents and my in-laws. They are all in their 70s. I've seen them clearly slow down over the past 10 years. Long-term care can easily cost $250,000 per parent over two or three years.
11) I feel bad taking advantage of subsidized healthcare.
One of the strategies some early retirees exercise is receiving healthcare subsidies through the Affordable Care Act. Despite having a million or more dollars in assets, these early retirees feel no shame in receiving subsidized healthcare.
Call me stubborn, but I just can't get myself to rejigger my retirement portfolio to lower our income and game the system. I don't think the ACA was set up to subsidize early retirees with a healthy amount of assets. The ACA was set up to help those deep in the grind, struggling to one day be free.
12) Failed at early retirement because I lack sufficient intellect and pedigree.
Another reason why I failed at early retirement is due to a lack of pedigree. The fact that after trying so hard for so many years that I can't stay retired shows that I'm not smart enough or wise enough to account for all the important variables.
But I've known about my intellectual deficiency since I was a boy.
No matter how hard I tried, I could never get straight As, not even for just one quarter. I also got a very mediocre SAT score despite spending hours pouring through SAT study guides. I remember always being one of the last students to finish an exam.
After graduating from State U and getting a job, I was condemned to the chopping block after just two years mainly due to poor performance. In contrast, my Canadian classmate ended up becoming an MD at 32. It was only through luck that I was able to escape New York City and come to San Francisco with a new job.
In 2007, I foolishly bought a vacation property in Lake Tahoe. I thought I was getting a good deal at 12% off the seller's purchase price a year prior. The real estate market proceeded to implode and I lost another ~40%. At least I never shirked on my debt.
Startup Rejection Letters – Why I Failed At Early Retirement
In 2012, before and after I left my day job, I applied to over 100 startup and tech jobs online in order to make sure there were no undiscovered opportunities. I was either rejected or didn't hear back from all of them.
Since 2009, I've written three articles a week without fail. You'd think with so much practice, my grammar would improve. Yet, my writing Mastery score is a dismal 26% according to my Ukranian friends at Grammarly.
In 2013, I applied to the Knight Fellowship program because I thought it would be an amazing opportunity to learn, network, and contribute to online media. Having a non-traditional background working in finance while owning a growing personal finance site would have added unique perspective to the classroom. Nope, I got rejected.
In 2015, I applied to a couple incubator programs. I wanted to see if I could leverage Financial Samurai to create a fintech company. After all, the platform was built, growing, and profitable. Both programs were within driving distance from my home as well. I got rejected by both as well.
Today, I fail to realize how angry I've made some people during the chronicling of my financial independence journey. Although I believe my reality is just as real as someone else's reality, because the cost of living is so high in the two cities I've spent my entire post-college life, it turns off a lot of people.
Thankfully, I have the wisdom to recognize my intellectual deficiency. As a result, I'm going to make changes going forward. I must keep going because I have no safety net.
Related: Perpetual Failure: The Reason Why I Continue To Save So Much
13) I failed at early retirement because I love a challenge.
Progress is my one-word definition of happiness. As soon as I stop making progress in any type of activity, my enthusiasm wanes. I failed at early retirement because I always want to be challenged.
Since 2012, I've had the most fun trying to grow my then ~$80,000 in gross passive income. My initial goal was to grow the figure to $100,000 within a couple years. Once that goal was achieved, I started raising my gross passive income goal by $50,000 every two years. The goal was to keep challenging myself.
Therefore, going from $250,000 to $300,000+ is just a natural progression I've been giving myself for years. It's just like inflation, the stock market, the real estate market, or anything else that tends to go up over time. But I can understand how first-time FS readers would see this financial goal as a shock.
I know we can comfortably live off $250,000 a year in gross passive income. My family of three had been comfortably living off less than $180,000 a year in gross passive income for the past three years. But greed and inflation are a family's two worst enemies for reaching financial independence.
But only a fool would expect expenses to stay the same given life is so unpredictable. Although I'm intellectually deficient, I ain't no fool! To be happy, you must constantly forecast your misery. Therefore, I carry on. Inflation is now at 7% in 2022, which means I need more passive income.
This leads me to my final point on why I can no longer stay retired.
14) The main reason why we failed at early retirement: we had another baby!
The biggest reason why I failed at early retirement is because we had another baby. It was the biggest unexpected benefit of early retirement too!
One fine morning in December at 7:40 am, my wife and I were blessed with a healthy baby girl. We checked into the hospital at 11:30 pm the night before and we couldn't have had a smoother delivery. My wife's OBGYN started her shift at 11 pm and finished her shift with us.
With new life comes new responsibility. As the sole income provider, the pressure in on. I need to make sure we have a comfortable enough home. I'd like for us to drive a safe enough car. We'd also like childcare and household help to maintain our sanity. Finally, it's important to have enough funds to pay for her education.
I’ve read all the books and have spent endless hours trying to nurture my son. Sometimes it's important to recognize when your best is simply not good enough. But as a dad, I will keep on trying.
Quality Time Now With My Children
So many working fathers have told me that it is the quality of time, not the amount of time that makes them great fathers. If what they say is true, I shouldn't feel bad spending 20 – 50 hours less a week with my children, or 1,000 – 2,600 less hours a year. But I do.
I've also spoken to over a hundred full-time mothers since early 2017. I don't recall a single one wishing their husbands or partners stayed at home more to help out with the kids. I saw mothers juggling two and sometimes three kids with relative ease. It was more like they were happy their partners were out there making some money! Maybe they're just not being completely forthright.
As a result of my conversations, I'm likely overestimating my value as a stay at home dad. When your beliefs are incongruent with reality, things must change.
All the same, I feel blessed. If you would have asked me in 2015 whether we'd have a boy and a girl before the year 2020, I would have said no way. For our first, we tried for years before finally conceiving.
My family is why this article is a love story. Even though I failed at early retirement, I will not fail my family. I love them too much not to do everything possible to take care of them. My Provider's Clock ticks loudly!
Related: The Cost Of Fourth Trimester Childcare: $40,000 And Up
Failed At Early Retirement Because Life Is Unpredictable
So there you have it folks. Early retirement was a nice 8-year run, but all good things must come to an end. There's simply too much to do and too much at stake not to go out there and make a living again.
The fact that I failed at early retirement isn't so bad. After all, life is one big adventure.
As I update this post in 2024, the other reason why I failed at early retirement was due to the global damn pandemic. With many fun things shut down, I was left with more time for my family and for Financial Samurai. As a result, I decided I would use the sheltering-in-place time to try and make more money online.
New Early Retirement Goal: December 31, 2027
I now have a new early retirement goal. That is to grind back to financial independence by the end of 2027 by making $380,000 a year in passive investment income once more.
In October 2023, I paid cash for a forever home by selling stocks and bonds. As a result, my passive income took a $150,000 hit down to $230,000. I'm back to $275,000 more than a year later and have $105,000 left to go. $380,000 in gross passive income is what's required to raise a family of four in expensive San Francisco.
Alternatively, to generate $105,000 in additional passive income, I need to boost my net worth by an additional $2,625,000. This follows the inverse of the 4% Rule for retirement. 2024 was another bull market in stocks. If real estate can also start doing well in 2025 and beyond, I'm highly confident I'll be able to retire early again by December 31, 2027. By then, I'll be 50 years old, which sounds perfect for taking things down again.
The most important thing is that I plan to enjoy the journey. With now a new financial goal to shoot for and both kids in school, I'm suddenly filled with a lot more motivation to build wealth!
Related post about why I failed at early retirement:
If I Could Retire All Over Again, These Are The Things I'd Do Differently
Preparing To Take A Sabbatical (Starting July 1, 2021, I've decided to take a sabbatical until August 25, 2021)
The Best Time To Retire May Be Under Joe Biden (In 2022, I plan on re-retiring)
Blew Up My Passive Income And No Longer Financially Independent – Because I decided to buy a new forever home in October 23, 2023, I no longer have enough passive income to cover our living expenses. As a result, it's back to work I go!
Early Retirement Failure Recap 2025
Although I failed at early retirement, I feel content. So much has transpired since my daughter was born in December 2019. I didn't expect a pandemic, nor did I expect stocks and real estate to do this well. As a result, a lot of the gains feels like gravy. Therefore, I plan to do my best to protect the capital as much as possible.
I even came up with an early retirement master plan to re-retire by 45. I'm pleased to say my plan came true for a year, but now it's back to the grind.
We bought a larger forever home in 2020. It inexplicably came to market a month after lockdowns. Then we bought the perfect house to raise a family in October 2023. I wrote 500+ more posts on Financial Samurai. My son started language immersion preschool and may daughter is an absolute joy! She is climbing, communicating, and having lots of fun.
Professionally, I finished my book with Portfolio Penguin Random House! It is entitled, Buy This, Not That: How To Spend Your Way To Wealth And Freedom and it became an instant WSJ bestseller! The book took two years to write while my kiddos were sleeping. I was subsequently offered a two-book deal with Portfolio Penguin and am now releasing Millionaire Milestones: Simple Steps To Seven Figures in 2025.
Although I'm tired, I feel very fulfilled and satisfied. I will look back on this pandemic period with positivity. Doing creative work and providing for my family is what it's all about. Failing at early retirement was a good thing. But now, I'm more than ready to take things easier and enjoy life more!
Diversify Your Investments Into Real Estate
In addition to investing as much as possible in your retirement accounts for as long as possible, also consider diversifying into real estate. You can buy your primary residence and you can also invest in private real estate funds for further diversification.
Fundrise runs private real estate funds that predominantly invests in the Sunbelt region where valuations are lower and yields are higher. Its focus is on residential and industrial commercial real estate to help investors diversify and earn passive returns.
Fundrise currently manages about $3 billion for over 350,000 investors. I've invested $954,000 in private real estate funds since 2016 to diversify my investments and make more money passively. After I had children, I no longer wanted to manage as many rental properties.
Another private real estate platform to consider is CrowdStreet. Crowdstreet is a marketplace that mainly sources individual commercial real estate deals from various sponsors around the country. This way, you have more customization to build your own select private real estate portfolio.
Make sure you diversify your portfolio and do your due diligence on all the sponsors. Look up their track record, their management, and whether they have had any blowups before. Although CrowdStreet screens the deals, you have to do your screening as well.
I've invested $300,000 in Fundrise so far and Fundrise is a long-time sponsor of Financial Samurai.
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Late to this post, but hoping you’ll still see this. For #2, why does it matter that interest rates are low (besides the obvious)? Rates are low when inflation is low, and rates are high when inflation is high, so its not obvious that you actually would want high interest rates if your nest egg is rapidly losing purchasing power. I feel like the last 15 or so years have been great economically as interest rates were at historical lows as has inflation. I’ll take that over 1970’s oil crisis with high interest rates and associated inflation. Thoughts?
congratulations on the new baby girl! No wonder you need more money!! As Mom of 2, they seriously only get more expensive as they get older. Braces, Tutoring, traveling, food, etc! Good luck and best wishes!
Just a question — I realize your net worth of 3 million when you retired probably wasn’t all liquid… but I think S&P 500 has roughly tripled since then… if you had half of the three million invested in market, that would be worth 4.5 now… and that invested would net you roughly 400,000 a year in appreciation today if invested in S&P… I imagine it didn’t work this way, but if it didn’t, is it because you invested your liquid assets too conservatively in 2012?
I’m not sure I understand your question? Is your question why I didn’t make $400,000 a year since 2012?
I was definitely more conservative in my asset allocation than the average person my age given I didn’t plan to go back to work. At the end of the day, I have only been able to generate about $260,000 a year in investment income, which I thought was enough.
Folks are now are saying that I need $310,000 a year to live a little class lifestyle. So I accept the challenge!
To give an example of my conservativeness, my net worth only increased about 18% in 2019 well the S&P 500 grew 31%.
How have you done since 2012?
Hi, really like your blog but I think you are really underestimating your financial needs. As your children gets older they will get a lot more expensive, bare minimum in SF and NYC is $1M per child. That’s for 1) space (increase mortgage), 2) private schooling, 3) university and 4) other expenses (my niece and nephew get about $5k worth of presents each for x-mas full of products “everyone else has” and that’s sometimes in a way to avoid bullying at school).
What you have left over will not be enough for one person let alone 2 (you and your wife). With expected returns to trend down and inflation (especially for education/healthcare), you’ll need at least $10M in the bank in order to even consider retirement unless your wife works.
Yes you can move to Hawaii but will that be best for you children’s future? Will they have the opportunities they would’ve had in a dynamic place like SF? Not sure.
I agree. However, do you not believe that $310,000 or so in passive income a year is enough for a family of four to retire? If I can somehow accumulate another $1.5M or so in the next 3 years, I should be able to generate another $60k/year to get to $310K or so.
What is your current household situation? Thx
I’m a single person with no desire to have a family. I’m around the same age as you and have been working in finance my entire career. I’m considering early retirement myself and stumbled upon your blog.
I’m very concerned about 1) market valuations and 2) global growth right now. I believe we are moving towards a bear market, timing unknown. Interest rates are low and I believe they will stay that way longer. I don’t know your assumptions to get to your passive income $ amount but I wouldn’t assume historical market performance is indicative of future.
You are still young and intelligent – while you have the energy, I would earn as much money as possible to give your family the best future. Don’t let your pride get in the way (I read one of your other articles addressing this): working for a previous colleague as your boss or any feeling of possible failure. It’s normal/human but put it aside, your children are more important now.
I don’t think anyone who may consider having children should ever retire early unless they have enough money in the bank to raise them. Having kids are extremely expensive period especially in areas like SF. Cost of raising them also grows every year materially above inflation and they still come home unemployed after college to live with you…
Btw as a side note: If any of your kids ever develop any talents or hobbies, they are also a huge cost most don’t account for. My nephew plays ice hockey and it costs a fortune…
But in the end you have to decide what is best for you and most importantly your family.
Got it. I hope you find someone who cares for you. Life is much better when you have someone to share it with. There really is no point working so hard at making money and all that if it’s just for yourself.
I think it’s sad when people rely on others to make them happy. You’ll find yourself very disappointed in life. You’re pouring all the effort into your children and one day if you’ve succeeded they will go far, and visits will be far and few. You seem very one sided about your options is my issue. I have no desire or plan on having children either. I’m on my way to retiring at 40. However, I do have a wonderful spouse that loves me. That’s enough. You seem like the type that forces his brain to believe in something because that’s the cards you’ve been dealt. You don’t need to have children or a significant other to drive you to make money. Some people are happy with the company of a partner, roommate or friends. I think you’ll be very disappointed in life if you don’t change your point of view. Make yourself happy first, and the rest will follow. Open your mind and you’ll be able to teach your children better values. What’s good for you may not be for someone else. If you don’t get out of that mind frame you have you’ll be continually let down. Good luck
For sure. Although I can’t imagine my life without my children and they bring about the greatest happiness everyday, I think it’s great that you don’t want children. You’ve got to do you.
But I will say that retiring at 34 has been wonderful, and it provided a permanent tick up in happiness. I think you’ll find the same when you retire by 40. Just make sure you retire to something.
One of the things I want to be careful of is demonstrating too much happiness in my posts b/c I know a lot of my wealth and happiness is largely due to luck. This is not fair to others who have not been as lucky.
When I say make as much money, I also believe life balance while achieving that is also key.
Btw doing the math, you are using a 4% rate of return – is this what you are using for your total assets or just the incremental $1.5M? Also is this before tax or after tax $s?
Hard to know your total financial situation, you are the best to judge what to do.
I hear the conversation between you guys and similar to you and Salingernyc I worked in financial industry my whole life and want to share my thoughts. I used to live in San Francisco, a couple of blocks from where you are, Sam. In 2018, I struggled for 9 months before I decided to take a job offer to move to Texas. Although I am glad now that I made the decision (especially that I met my mentor here who knows you in person as well), it was a very hard decision back then. I couldnt make up my mind mainly because I am such an international person speaking 4.5 languages, and having lived in many cities Asia, Europe and US. I am an extravert like you and I enjoy interacting people who are driven, smart and well travelled, and I love outdoors like hiking and Skiing. I didn’t want to leave the Bay area mainly due the fear not being able to meet the type of people and not having the variety of things you can do. I finally made the step because I thought that would get me one step closer to earlier retirement, especially because I am like Salingernyc, I don’t have a kid yet. I had the idea and that idea led me to your blog which I appreciate a lot.
My idea of retiring early was not retiring in the US though due to the unpredictable healthcare cost. Going back to Italy where I lived for many years is what I am thinking and honestly I can live anywhere in South America and maybe limited areas in Asia.. Can’t living in Europe or some other continents be a good solution for you and your family too? Most countries in Southern Europe are developed countries yet with low cost of living.You can have great food, culture, low-cost healthcare and university system that will save you a lot, all you need is to send kids back when it is time for Grad school. I grew up in Asian, and doing university and living in Europe before coming to the US is one of the best things ever. I had culture immersion in one of the most beautiful and culturely rich countries, and learned to look at things from different perspective, not to mention the life-time friendship cultivated
I’m a little confused on what you consider as passive income. Until now I thought you were referring to the 260k you were making to be from your blog, rentals and such excluding investment returns. Is your passing income a combination of blog + rentals AND investment returns?
fyi I’m 45 with 3mm and an aggressive portfolio and looking in the ballpark of 500k in annual investment returns. I have not other sources other than investment returns and my full time job.
No. Passive income excludes investment returns and blog income.
But I will have a post that discusses whether one should include investment returns, stock sales, and financial windfalls.
You can see my latest passive income numbers in my about page. https://www.financialsamurai.com/about/
My stock investor returns are also a similar level this year thank goodness. But they aren’t count as passive income.
Congratulations on your beautiful baby girl Sam!
We are expecting our third child, first girl, any day now!
One comment I may add, I spend 2 weeks out of town at work and 2 weeks home not working for my job, if you talked to my wife she would of went against the grain of women who don’t mention wanting their spouses home to help with the children. It is a topic that comes up quite often between my wife and I. I am very blessed to be able to spend half the year at home with my family giving them my undivided attention, but my wife would most definitely prefer it to be year around!
Hi Sam,
Wondering if you have considered moving back to Asia/ SE Asia. Probably less expensive, great quality of life, diverse, travel opportunities,great international schools, etc.
I am an expat and lived in Asia for 20 years. Now with young children ( 7 and 5) my wife and I considered moving back to the US but in the end we felt like Asia was actually a better place to raise our children for the next few years.
I guess this would surprise your readers.
Tom
Definitely. I enjoyed Malaysia. Was back in 2016. Just hard to get the inertia to move the entire family.
I am sorry you have to face such negative comments. Definitely having children changes things. I was very frugal before my children, didn’t fully merge accounts with my husband until they came along. Slowly he has changed from his spending attitudes and I have loosened the money bags, but only when it comes to my two kids. I did find that having them pushed me to ask for more money in my jobs where in the past I would’ve been more patient. Love your site, have been reading it since before my children were born. My oldest is now 7.
Oh wow! Seven years is quite a long time. I am honored that you have been such a long time reader. Thank you.
Getting negative comments and criticism comes with the territory of putting yourself out there. I’m really used to it, so no worries. I find a lot of criticism helpful and motivating to get better and be a better provider.
Congratulations to you and your family! I just had a baby girl myself (our 4th child) and I’m so happy for you all. Kids really do change everything and while I am no longer “cool” like my childless peers who fly all over the world and post it on Facebook, I have more all-consuming love and purpose than I could have ever imagined.
I love reading your blog even though we are not in the same financial big leagues despite living in the same general area. The fact that you earn way more than we probably ever will does not bother me and your blog feels so much more authentic and personable than some other famous FIRE brands. Please keep writing.
Congrats on #4! I think I got over the fabu FB/Instagram life before those companies were born. I was raging in middle school in Malaysia already!
Not a useful comment, but I want to say thank you for sharing as much as you have about your successes and failures. I believe you have shared most of this over the years, but it still takes courage to summarize it and throw it out there again. It reminds people that rejections are ok and that perserverence is the best tool for a successful life, however you define that.
Very useful comment Viet! I always appreciate your type of support because it gives me a POWER UP to keep on going and try harder!
Like right now, I’m delirious from doing the night shift taking care of my baby girl since 8 pm. It’s been 12 hours of diaper-changing, feeding, holding, swaddling every 1-2.5 hours. So your comment is very appreciative.
Fight on!
Congrats on your new daughter. I enjoy your blog and it’s content but I think you’re pretty clueless when it comes to risk management and real analysis. Blogging is about one thing and that thing is creating a narrative. Narratives are at best fanciful incomplete attempts at projecting reality, at worst they are incompetent and delusional. If you create a narrative and then bet your life on that narrative, good luck with that.
You live in a State that is delusional and you live in a city that is an order of magnitude greater in it’s delusion. You live in a region, silicon valley where the second derivative of the growth curve has turned negative, in a country where 10,000 boomers are retiring everyday. Boomers and their entrepreneurialism were largely responsible for the economic expansion and increased productivity of the past 50 years. The thing about retirement is you consume less, and in consuming less the economy falters. In a faltering economy, portfolio’s falter. Millennial’s want a sure bet, hence the increased interest in socialism. Socialism has no increase in productivity, instead it’s based on parasitic destruction. In a society full of “free stuff” what makes you think SF housing prices will be maintained? What makes you think there will be anybody there to buy your property at a price you can afford to sell? The very first thing you do when you make a deal is to understand how you’re going to exit the deal on the profitable side and on the unprofitable side.
Cali and SF in particular is the land of narrative. Everybody is quacking an angle intended to screw the next guy. It’s only natural since you breath that air, you would quack narrative too. Narratives don’t consider downside, they consider rosy scenario, denial and delusion. In that case there is no discovery of true risk. Ignoring risk is what will kill you. It’s like buying Time Share, sure sounded good at the time.
The other thing I notice is you tend toward virtue signalling and comparing yourself to others. Apparently what others think of you is something you use to gauge your success. This too is self destructive. If you spend your time living someone else’s life you wont spend a minute living your own. The more you care what others think the less freedom you possess and the worse the choices you make. Mandlebrott in his Misbehavior of Markets found markets react locally not generally or on the average. So the plan need’s be specific and risk accounted before reward. A proper understanding of risk is the only way to understand how much leverage you can apply and the likelihood of success. In a book called Essentialism McKeowan describes how to focus on only what is essential. FOMO becomes JIMO: joy in missing out. It’s only by understanding the joy in missing out that you can maximize happiness. Max Happiness is characterized by the concept of parsimony which means getting the greatest value for the least cost. It doesn’t mean you buy the cheapest. It means you buy precisely what is needed and your purchase is risk adjusted. Owning parsimony is what makes you truly wealthy. Finally a book on Bayesian Statistics by Hartshorn. Bayesian statistics are conditional statistics. If you look at a Galton Board you see a Gaussian distribution determined by a series of decision points. Imagine you are a single ball in the hopper how do you get yourself in the half of the distribution above the mean? You do that by sequencing the probabilities such that its more probable you will end up in the top half. You can live a random life or you can live a Bayesian life. If you failed at FIRE it’s because you lived a random life and chose a plan which had little to do with where your ball would end up. If you base your decisions on random criteria you will be assured a random outcome.
This sounds critical of you but it is not. I don’t have a dog in your hunt. I have a wife and 2 kids (now adults) and understand your predicament. I’ve started over a couple times sometimes based on my bad decisions sometimes based on shifting background criteria. This is merely an exposition of a different point of view on your dilemma. The past is not a prologue to the future. A future based on the past is but one of a myriad of a distribution of outcomes, and the future is quite unlikely to be an image of the past. The past is based on a single path, a single sequence through the decision tree. If you think the past somehow predicts the future you are living a narrative. One thing for certain if you follow the same decision criteria as you followed last time you will likely fail again.
I don’t think your dilemma is any different than the dilemma facing most FIRE adherents. Your experience of failure however is invaluable. NOBODY IN FIRELAND EVER ADMITS FAILURE!. It’s only through the study of failure that success can be assured. This piece you wrote is a brave attempt to begin to understand failure and fortunately you are young enough and smart enough to regroup and adjust to succeed.
By the way I worked to 65 and then retired. I could have quit any time after 50. I used the extra 15 years to adjust my retirement, it’s risk, and it’s tax burden to be minimal, and to do that you have to let compounding do it’s magic. My retirement consists of multiple epochs. An accumulation epoch, a pre-retirement epoch where the funding of Roth conversion was optimized, a Roth conversion epoch which set up to minimize my future tax burden. A retired filing jointly epoch, a widow or widower epoch and a wealth transfer plan. My plan also includes full self insurance for bad SOR and catastrophic medical and end of life planning for 2 spouses. If you think you can plan all of that and still retire at 35 you’re an idiot, or living in a bogglehead narrative.
I think you’re right that I am often clueless. But I am trying to get better by learning more from others.
Given you’ve lived more than 20 years longer than me, what specific type of advice would you give me so I can become less clueless and more financially sound?
Thanks!
I was laughing as I read Gasem’s comment – but then I started realizing he might actually believe his diatribe – Having spent so much time writing it –
I heard of you Fin Sam, and wondered what you were up to –
I think you are just being risk adverse.
I left the rat race 4 years ago, and cant imagine going back –
Its going to be at least a decade till I can collect SS, so my “job” is managing my portfolio and rental props –
Its a full time job – LoL
Sure. Some call it conservative, after 10+ years of good times.
Others call it simply planning ahead. I love planning ahead, especially since it’s free to do.
Glad you’ll get SS in its fullest! I don’t think I’ll be so lucky.
Related: https://www.financialsamurai.com/social-security-strategies-for-a-better-retirement/
There is a video subscription service I belong to called Real Vision that explores macro economics. I don’t believe everything they say but listening to those opinions changes the narrative and puts risk into better perspective. Life is not about accumulation especially retired life. When working, you have the luxury of the job covering your risk. When retired you are completely at the mercy of sequence of return risk. That includes inflation, economic risk, demographic risk, tax confiscation risk, medical risk etc. You further have to plan for end of life risk for 2 people and possibly now some method of transferring wealth.
The situation is therefore much more complex than the BS FIRE bloggers publish. Success lives in the details NOT in the averages. My solution was to break down my retirement into epochs. I had an accumulation epoch where I funded pre-tax funds, but I did not over fund pretax because pretax is rigged to bite you in the ass when you are retired. If you study the tax code what you find is it is written to the median tax payer. Fidelity says the median fund holder has about 500-600K in retirement funds. If you RMD 500K at 6% you get about 25K/yr. If you and the wife generate 50K in SS that’s 75K. Guess what the top of the 12% bracket is? The median holds a shit load of voters, so the tax code is written to satisfy and protect the median number of voters. Anybody above 75K MFJ is considered “rich” by the government and the government has one mantra “soak the rich”. Above 12% 0% cap gains goes to 15% cap gains, and 12% marginal ordinary income goes to 22%. In addition RMD is graduated which means every year you take more and then pay more in taxes. Effectively your retirement accounts are the government’s pension funding mechanism. They love it when you max out your pretax, It means more taxes for them to use to annuitize their debt. Now they even take the bread from your kids with the new “SECURE act” which assures your kids will get charged maximum taxes over a 10 year distribution period post your mortem
Bet you never heard that narrative before, but it’s in fact the reality. So step 1 is to choose the correct narrative upon which to base your analysis. For me, I quit funding pretax at age 50 and started funding post tax aggressively including tax loss harvesting a few recessions. That’s epoch 2 post tax funding. Post tax plus tax loss harvest turns the post tax account effectively into a Roth. You can pull out money for free up to the amount you harvested. In the mean time the post tax continues to grow.
The ideal is to get your pretax account down to the level of the median. Dare to be average. Median tax payers live protected lives. High end tax payers get soaked. What I did in epoch 3 was to Roth convert my pretax down to 500K before RMD. I used money from the post tax, mixed with tax loss harvest to live on. This means I converted 1M from stocks to cash tax free for living expense and taxes during the course of conversion. Since living off cash generates no ordinary income all of my tax burden was related to conversion. This meant my conversion was accomplished at minimum taxes. Epoch 4 is to simply RMD and take SS and supplement my income first from the brokerage. If you stay under 104K/yr MAGI the cap gains stay at 0% on the brokerage. I turned the remaining TIRA effectively into an annuity by storing my bonds in there. That TIRA account is in a 15/85 tagent portfolio. This is a very low risk portfolio meaning it will essentially payout 100% of it’s expected every year with slow growth. RMD is progressive so slow growth means you stay in the 12% bracket for a long time and RMD doesn’t force you to 22% till your very old. Also the TIRA money can be used tax free in the case of a medical disaster so it provides a zero tax insurance account in case of a cancer diagnosis or something like that.
The Roth provides extra income but I’m not touching the Roth until the brokerage is spent down except to buy a car or something like that. I don’t use it for living expense, I use the rest for that. It’s available for end of life coverage and as a source to pay for the increased tax burden on the surviving spouse when one spouse dies. What ever is left over will go to my kids to grow for 10 years and then be cleaned out tax free. I guess you could call that the widow epoch and wealth transfer epoch.
A long winded response but it makes the point. The plan has to be tailored individually and paid for individually. The comparison is not to a plan designed for someone living in Des Moines, but to itself over time, taking into account the specific risks for that situation. Given what you have written I’m not sure how someone at 35 has enough specificity to create an actual plan, so what gets created is some half assed normative plan which gets implemented on a wing and a prayer.
The problem as I see it most plans are over levered and therefore contain a ton of unaccounted for risk. In my opinion the past is not a prelude to the future. Too much of what exists in the present has never existed before. Robots account for a huge amount of trading and therefore price discovery is very cloudy. It’s not me and you settling on a price it’s me and you filtered through a robot algorithm. We’ve never had this much debt in the world in 5000 years of history and the result is the debt market has become unpredictable because of FED manipulation. Stock prices are all financially engineered. 30 years of buy backs have forced prices way above the mean without a concomitant increase in productivity largely due to the FED manipulation. The huge wad of boomers are retiring meaning boomer contribution to GDP will be receding and therefore GDP will contract and the cost of supporting boomers will explode. Boomers are expecting to unload their mansions to the youngsters and it’s unclear the youngsters are interested in boomer mansions. A glut of mansions means crashing prices and far less wealthy boomers than thy expected.
This is why I suggest a Real Vision sub because a lot of this insight is covered. You’re a smart guy, given the right data you will have no trouble devising a competent plan. I would say however were it me, I’m not sure I could conclude SF is a sustainable option, but that’s not my call.
Thanks for writing this and letting me respond. In my retired life I’ve spent a lot of time studying the modes of retirement failure and taking maneuvers to reduce risk and improve longevity. It’s an important topic
I do like how a couple can make around $100,000 a year from long-term capital gains each year tax free. Should be good enough for the majority of couples to live on in retirement in America.
Do you think there’s a chance you might be worrying too much about too many different angles? At 65+, have your financial worries gone up or have they gone down?
I’m trying to simplify my retirement goals by just accumulating $1.5 million more or generating $60,000 a year more in consistent retirement income.
At 67 given the size and structure of my portfolio I have zero financial worries. It’s optimized ten ways to Sunday and has extremely low risk. On the consumption side I live in coastal FL in the country on a few acres. My taxes are very low, my utilities are low, my COL is low. I’m 35 miles from world class food and air travel. I still have 2 kids in college but that is all planned out as well so their expenses don’t touch my cash flow. The advantage of making a detailed comprehensive plan is a simple plan does not fit the real complexity of life.
I like the idea of owning real estate in someplace like Kansas City where the RV is high. I’d sell the Cali property while you can and use the Kansas properties to fund a Cali rental. Interest presently is near zero. The downside is small, the upside big. Cake and eat it too time.
Cool. Perhaps you and TheEngineer (commenter here and blogger) can get together and share stories and strategies. I think you guys would get along!
How do you pay 0% cap gains on a $104,000 magi? Am I reading the brackets wrong?
$77K is in LT cap gain is tax free for married couple + $24,000 couple deduction.
It’s actually 26,600 MFJ over 65. Seniors vote a lot.
Meh, you can write all this because you ended up making it to 65+ retirement. The last thing I want to do is die at my desk and that came pretty darn close last July. So working till 67 or 70 is for the birds.
Granted most folks will make it to retirement age but there are guys in my cardiac rehab class younger than me so it’s no sure thing. Dying of something is more likely than your dire pronouncements of impending financial doom for the millennial FIRE folks.
And finally boomer, you ain’t the greatest generation (that would be your and my parents)…you just think you are…which is sooo typically boomer.
And if the world is in such dire shape is sure ain’t the millennials fault. Nor is it the fault of anyone who can save $1mm by age 35 and FIRE.
And at 35 they can afford to be flexible and go back to work after an 8 year hiatus. All they need is the same luck you had…not dying or getting sick before their time and making it to 67+.
The rate of inflation is above the rate of interest on bonds. This means real returns are negative. This means you are paying to save money, you are not being paid. That’s strike 1. The FED is targeting 2% inflation. This means your 1M will erode to 600K in value in 25 years and to 325K in value in 50 years if you never spend a dollar. If inflation is 3% instead of 2% you’re unmolested cool million will be worth 250K in 50 years. That’s strike 2, and it’s baked into government policy. The government intends to pay for its debt by devaluing your fortune. It’s the reason I own gold. At least gold is guaranteed to pay me zero.
Yes I’m a boomer and I’m almost dead. Being almost dead is my feature. I have way more than enough money to live however I want, but you my dear millennial, you are screwed and I will laugh my ass off at you from my grave as I watch your unrepentant descent into the dirt.
The #1 law of sky diving is you have to pull the rip cord AND deploy the chute before you bounce. It’s a sequence of return thing. A cocky attitude won’t save you. Neither will MMT
Ok boomer.
Happy New Year! You wrote a blog a while back about how much bloggers can make. If this is true, shouldn’t your 250K from investments Plus your blogging income (You are in year ten so I would hope you are doing 500k?) be enough to live on in any city?
Just wanted to know the concreteness of blogging income because I am thinking of maybe getting into blogging myself.
Blogging isn’t passive. I’m looking to generate as much passive income as possible.
But I fear that if you are considering going into blogging for the income, you will be disappointed. You have to go into blogging for the joy of writing about a topic you care about.
Oh, I definitely I have the joy!
IMHO the point of financial independence is simply to do what you want. That includes working if that is what you want to do. While you may “feel” the need to go back to earning more income, the reality is that your worst case is you guys cutting back on your lifestyle some or not being able to provide premier services for the kids. In my book that still makes you financially independent in that you are working for wants, not needs, and that is perfectly acceptable and I’d hardly call it a failure. Too many people get hung up on the “retire” part of things as if you aren’t allowed to change what you want once you claim you are retired. Even people who retire at later ages face change to their wants and desires, no one calls them a failure for trying new things or starting businesses when they don’t “need” to.
There are plenty of gatekeepers out there who will complain that someone isn’t retired just because they want to do a little work to keep busy.
A reasonable response! Yes, we’re always evolving.
But because I’ve been called a failure, loser, etc by so many people for wanting to go back to work and wanting to make more money, I want to embrace the criticism.
It’s fun and try again. Life is boring if there is no progress. With a new daughter, I have so much motivation to ensure my family is well taken care of.
Related: https://www.financialsamurai.com/sweat-dreams-of-becoming-a-millionaire-again/
Congratulations, Sam!
This is one of the best financial blog posts I’ve ever read. And then to throw in the baby at the end was fantastic.
I feel you on just not being good at things. I watch our nanny closely as she effortlessly gets my son to happily go through his routine. I try to replicate but she’s just much better at it. Plus she has a network of other friends to take him on play dates with during the day and she knows all the free spots to get him exercise and education (community play areas and library reading times). I mimic what she does but I never would have found it myself.
She is better than me at the day to day. But at the beginning and end of the day I’m his father and I’ll always be there for him at each stage of his life and we share special times together (like swim lessons on weekend mornings). Quality over quantity.
Congratulations again on your growing family. Enjoy the new stage of life.
Congrats on the new baby!
Are you sure you need to do this? You don’t really account for the value of Financial Samurai in your assets/passive income. What if you would sell the site and invest the proceed? Would you need to go back to work then?
I have to says that I can’t wait to RE and now you have me worried I’m chasing a dream I will never reach.
Sounds like it’s not about money, it’s more about identity. Blogger is not as impressive as banker, unless blogger is with capital B, because unless he makes $millions, ie a business empire, blogger is a suboptimal income earner.
100% agree with the analysis btw!
Sam, congrats on your baby girl!! What a wonderful addition to your family! Thank you again for continuing to write inspiring articles!
Thank you for this post!
Just leaving a comment to say that the only thing I find completely bogus about this post is the assertion that you lack the proper intellect and pedigree. This is patently false. I and my husband who have three graduate degrees (MBA, MS in CS, PhD from the top universities) between us have used your website to educate ourselves on so many different financial topics. Your blog has provided a lot of value to us techies who are financially under educated!
You are an inspiration. You provide tons of value. And sometimes investments don’t work out– but this isn’t some moral judgement on how smart you are.
Hi Sam,
Congratulations on a new baby girl! I’ve been reading your posts for a long time, and have learned a lot from your site. My wife is a stay at home mom and we have 4 kids – we’re maybe the lowest income readers you have, but I enjoy reading posts and comments from the perspective of high earners. The “water cooler talk” in my industry isn’t inspiring or enthusiastic about early retirement.
We moved from San Francisco in 2008, to a northern CA town where living is drastically less expensive. My wife & I miss SF but our kids are happy in this small town. I’m working on a few side hustles so that one day we can move somewhere more enjoyable.
Thanks for the great posts and free knowledge, so happy to hear you have another little one!
I read Financial Samurai with constant fascination as to how freaking expensive things are out there. We live in a unique city in SE MN ( the home of the Mayo Clinic ) where the cost of living is low…but we also have a world class medical institution in town. Jobs are plentiful, public schools are great, minimal traffic, etc… We also get travelers from all over the world ( mostly due to the Mayo Clinic )…so restaurants, etc… are somewhat plentiful.
Yes, it isn’t the coast. However, we can easily hop on a plane and be there in a few hours. We are also close to Minneapolis if we want to do big city things. Honestly, I don’t quite understand why some people disregard the Midwest as a great place to live. Find the right city and I’d wager it is an overall better experience than many places on the coast. The Midwest is also one of the highest ranked areas to raise a family…MN is ranked highly in that regard.
At any rate, I wish you well in your un-retirement!
I think the simple answer is: people don’t know better.
We only have one life and can only live in so many places at a time, usually dictated by our jobs.
But I think the Midwest and plenty parts of the south are wonderful. I just have no friends and family there. Hard to start over now. Easier to just try and make more money.
I hear you. We ‘ended up’ here. Wife and I both grew up in Minneapolis, and I happened to get a job here after college. Then she ended up at Grad school at the Mayo Clinic, then got a job there. Then kids….and the rest is history.
Personally, I have worked for the same place for 27 years now. Anything you do for that long tends to get…old. I have some major decisions to make very soon! I like your idea of retiring…with the possibility to un-retire. Maybe I’ll try that!
Anyway, wishing you guys the best. We also have 2 kids. One is a junior in college and one is a senior in high school. You have a long, but fun, road ahead of you…make *sure* to enjoy your kids along the way. As the cliche goes…they do really grow up too fast.
Congratulations on the arrival of your baby girl….children really are a blessing (even though some days are harder than others)! I love reading your blog and really appreciate your honesty in facing the challenges of living in a HCOL area. We just took our kids to Tahoe for the first time this past weekend and had a blast! Have a great week :)
Thanks! I’m so excited to go back to Lake Tahoe again with my children. My son loves it there. But now I’m kind of concerned because we only have a two bedroom, two bathroom condo. So it’s gonna be a little tight if one isn’t sleeping through the night!
Congrats on your baby girl! Children are the biggest blessing and motivator for living a better life. Thanks for your honesty about the financial strain of children. I feel like the number of personal finance sites are over represented by bloggers who don’t have any children or who homestead in rural, low-cost areas. Thanks for being a voice for the rest of us.
Thank you! And no problem!
Looking back, I truly believe achieving financial independence without kids is like a walk in the park. It’s not just that you have less costs, it’s more that you have more energy and time.
The exhaustion is real! But wow… are kids such a blessing indeed.
Go mama!
Related: How To Retire Early With Kids: Mission Impossible
I guess ‘congrats’ is in order on your retirement failure! You had a good run! ;) Seriously though, congrats is due on the birth of your daughter.
You’re taking the growth of your family seriously, and that’s pretty important. With two kids of my own, I have a hard time using the word ‘retired’.
Happy New Year!
CONGRATULATIONS FS!! So, so happy for you and your family. Long-time reader, 2x commenter. Your most direct impacts on my family’s life / finances have been from your ARM posts and 10% car buying rule.
Happy New Year!
I haven’t read all the comments, but have been reading your articles for a couple years. I’m sure you’ve addressed this, BUT what don’t you move to another part of the US or to a foreign country to lower your cost of living? I’ve lived across Asia and the Middle East, and there are places to live that are safe , have decent medical care, lower expenses and a vibrant culture.
Sure, check out points 6 and 13.
Could you share with us your experience of moving a family to a new location to save money? What were some of the challenges you and your children faced in a new environment? What were some upside surprises? Thanks
Sam, I loved your sincerity in this post. Working on FI myself, you were always a good mentor I could learn from. Now, your humble post made me reflect on my own goals and to admire you even more for being so critical with yourself. This is a sign of strength. Finally, Mazal Tov for your baby girl! Keep doing what you do, your values are admirable.
Mazal Tov! Thanks Guy! And enjoy your own FI journey as well.
Sam and family! Congratulations and BLESSINGS!! Awesome!! I am the “stay at home” parent for (now) 4 Fabulous adults. Used my MBA for 2 years in the direct paycheck world and for 34 more in this life we built. Keep plugging, keep thinking (and making us think) and show us all how keep looking for the next thing, the next challenge, for the rest of our lives!!
Thanks for acknowledging that your goals before kids are not the same as your goals now. Best post ever!
Thanks Erica! It’s amazing how life is so unpredictable. But it’s been a fun ride so far. I hope it doesn’t get to bumpy from here!
Congrats on the new addition!
It’s interesting you bring up HI (and I knew you were secretly hoping about the preschool thing from your prior posts) – I just came back from the Big Island absolutely in love with it and the lifestyles/attitudes of the people. My previous experience was a week in Honolulu (with a day in Kauai) with my mom during HS in the ’70s…
While I face the big 60 this year, I am very fortunate to have worked for the same company for 38 years that affords me two pensions and two retirement accounts. I was eligible to retire several years ago (age + service, etc.) and there have been ups and downs but dang, I feel like my identity is tied to what I do and in a big way. For a while it messed with my head but once I gave myself a time-frame to pull the plug, that mostly went away. From now until then, more research and keep maxing out my 401(k)…
Wow, two pensions for life! Gotta love that. Congrats!
I think the identity thing for me for the first two years. And then over time it got better things to do. I love being known as a high school tennis coach in my community. If there’s thousand dollars a month, but the pride I feel coaching the school to to sectional championships is immeasurable. It had never been done before and the school’s history!
Yeah, the pension thing…so many options once I get there. :-/ The other things are the retirement accounts…I know I have options when I hit 59.5 and it is all overwhelming. I sort of have my head in the sand about that because of it.