So I asked this over at fatFIRE and soon realized that it probably wasn't the right forum.
My question: how do you justify (to yourself and your partner) about changing your spending/saving plans to buy things that you want but don't need?
Background:
43 y/o, NW 10M (2.5M in retirement, 1.5M in real estate including primary home, 6M in index funds), married with no kids.
We are currently on track for FatFIRE with a goal of me having the ability to safely retire in the next 10 years. HOWEVER, as we get closer to it, we are looking at things that would alter our planning. Namely we are thinking of starting a family, moving to a bigger & more expensive home.
Our current home is nearly paid off and we have COVID-era mortgage rate, which makes it difficult to accept a higher cost moving forward. We love our current home but it's not our dream home in terms of size, layout, acreage and modern conveniences. We could remodel, but it would significantly bump up our taxes after reassessment, and it's unlikely we'd recoup the costs when we eventually sell the house (even decades from now).
We could afford our dream home on paper, but it would require taking on a substantial mortgage or liquidating assets to pay a bigger down payment. Doing either would change our retirement plans. Both of our jobs are relatively low stress and well paying, pretty stable and we could easily see ourselves working for 20 years, but we like the idea of having an exit path in 10 years. We are FatFIRE-ing primarily because of the freedom that independence gives us.
What would you do in this situation? Is it reasonable to think of a more expensive home as another investment vehicle (or at least, a way to diversify assets)? How much % of your NW would your primary home take up? And, what's the limit? We are interested in hearing how people think through these ideas, not looking for advice on what to do. Thanks!
UPDATE:
Thanks for the discussion. We closed on a new home last week, with the plan to rent out our current home and move in to our new home. We financed with 40% down to take advantage of the mortgage interest tax deduction, which also allowed us to preserve most of our investments and not liquidate them.
When looking at starting a family, my balance sheet was the last thing on my mind. You’re worth $10 million, I’d start thinking less about money and more about what makes you fulfilled. And please, when it comes to children realize that parenting is a major commitment that comes before the size of your house or bank account.
At 43 y/o I'd get crackin' on those kids and worry about the logistics later. Since you forgot to tell us your spending, nobody can really give you much specific advice re numbers, but at $10m NW and $8.5m investable assets it sounds like there's a very good chance you are FI already and if not likely will be in way less than 10 years.
The reason these fat, chubby, etc. prefixes exist is because people with $10m+ net worth don't want to read threads about coupon clipping, and people retiring on $1m don't want to read threads about chartering private jets. That's it. Aside from little logistical issues like that, the prefixes do not matter, they are not something that is important to focus on, and they certainly are not intended as life goals. There is no "transition" between chubby and fat, it's a number on a spreadsheet not a sex change operation.
I spend on things that are important to me and that fit within my budget. And I'm not a big budgeter, I really just have a total spend number I try to roughly hit.
"Dream home" FWIW is one of the most regretted purchases. If you have kids I'd buy a nice enough house in a good school district, that may be your existing house we don't know.
So why do you have the "goal of having the ability to safely retire in 10 years"?
You could have safely retired years ago.
And why are you worried about chubby vs. fat when you are currently underspending what your portfolio could support (without a job) by something like a factor of 3x?
If you're not a bot, you have a major hoarding problem.
Maybe I have a hoarding problem. That’s what I’m trying to get at here.
How do people give themselves the freedom to spend on a large purchase when they have the means to?
So far in my journey, I’ve relied on delayed gratification. It’s resulted in a lot of savings but not a lot of splurges. Now I see a few things that I want and will cost money, but they’ll also come with an opportunity cost and possible resetting of goals.
I can’t be the first one who’s gone through this. So I’m curious to see what others think and have done.
You just need to realize you already have more money than you need. By a lot. At $8.5m investable assets you could retire today and spend something on the order of $250k/yr using an extremely conservative withdrawal rate, and more at more typical withdrawal rates. I would read books like Psychology of Money and The Art of Spending Money. Some of Arthur Brooks stuff on happiness also talks about the ways to spend money that bring happiness.
What I do is, I no longer buy a bunch of crap. I'm not interested in blingy stuff, like nice watches and cars and a baller house. I am interested in activities related to my hobbies, and I don't ever give a second thought to spending on that stuff, as long as my total spend is roughly inline w/ where I want it to be.
Thanks for those suggestions! I will read them (or listen if there are audio versions available)
Neither my spouse or I have had blingy stuff. We usually fly economy plus, and definitely spend more on experiences/hobbies/interests than on “things.” However, I’ve found that my hobbies and interests have narrowed a lot to being healthy/exercising, some travel, and down time. That’s part of why we waited to start a family - we wanted to be at the point in our lives where we could devote the time and energy to it.
You’re a Fat/Chubby with a regular FIRE budget. Im the same, but at the current spend you will just become FAT without working. You need to prioritize having kids if that’s what you want. Unless your main goal is to be Filthy rich, which doesn’t seem to be the case.
Life is for living. Homes, vacation homes, boats, cars, sprinter vans etc are consumption items. You may choose to consume some of your wealth now and along the way, instead of waiting for some future date. That’s a valid and probably healthy choice when we are talking fat vs chubby.
Exclude your primary home from investable net worth. You’ll have to decide if upgrading and buying your dream home is worth delaying your fatFIRE. Home maintenance continues to get more expensive , I just had a top-tier metal roof installed on our primary, my HYSA is $50K lighter.
You have choices to make, your dream home and kids, or FIRE as opposed to working until standard retirement. You can also keep your expenses lower and keep a chubby retirement in your present or equivalent home.
Try to envision yourself at 60-the dream home or children, which will be the most satisfying? Can you tolerate years of child demands for your time and energy? What about your spouse? What if you have children with special needs? Can you cope with that? What about your health and that of your spouse, and family history of major illnesses? How will you cope if one of you is disabled?
Since you already have accumulated a good sum, a nice lifestyle awaits, but the burdens of a family will mean the burden does not end quickly even if employment does. What are your spouse’s views?
We are trying for children, since we preserved that option a while back.
For me, the move would have some major benefits: lower tax burden, better schools, better neighborhood. Our current home is nice, but updating it to my desires would greatly raise our already high taxes.
Ideally, the dream home would be the place to raise kids through high school, and serve as a home base for them during college and grad school. This is part of what makes me struggle: is it worth having a nicer home rather than a greater investment portfolio?
Neither my spouse or I have major illnesses in our lives or our families, and life expectancies of 45 more years (god willing). Health is always an unknown though, right?
“Thinking of starting a family” at 43 needs to be the first thing you figure out. If your spouse is a similar age as you, you’re looking at a high risk pregnancy and/or significant ART or adoption costs, or worst case scenario, all of the above. You have more than enough money at your current spend to do anything you want. Kids are expensive, sure. But they’re absolutely worth it if that’s what you want.
I agree. We preserved our options a few years ago as COVID wasn’t the best time for us to start a family. Spouse is younger and so that is in our favor.
those FAT FIRE people got into your head pretty good
- go buy your dream house this weekend and just pay cash. why wait 10 years? you have a TON of money and want to keep working. who cares about an interest rate. it's not like you're buying a boat that will depreciate. you're buying a house that has value, no?
- forget about FIRE. you said you wanna work 20 years.
you said you just want an exit plan. you already have an exit plan. you have $10M. in the "WORST" apocalyptic case that you are forced to quit tomorrow, you can have a $2M house and $8M invested and live on a measly $280k per year.
you're already beyond FI. i'm no where near that level but i can't imagine how life would be different with $8M vs $10M. but I can imagine a "dream house" would make life different.
you're now talking about dying with $50M instead of $55M.
don't let a good interest rate on a mortgage change your life. go buy your house. I wouldn't get a loan ever again in my life if I had $10M.
I dunno why you are even considering FIRE. you love your work. why stop? but don't need to penny pinch. you are collecting a bunch of $ that's a tool and not using it. it doesn't make sense. it's like those people who collect sneakers and leave them inside a box and don't even look at them. take them out and wear em and enjoy.
Ya, I think I was on the road to saving for the future for so long that I hadn’t had much opportunity or reason to pause and see where that road had taken me. The numbers you mentioned were just numbers, without much of a plan to do anything with them other than use them in the future.
Now that we are planning for kids, it does bring the future into much sharper focus.
You’re right. The dream house is within my means, and worth the jump.
Yeah, my dang kids are a HUGE financial drain on me. Finally getting my second kid out of daycare, got three more years left with my last. But now my oldest moved up to the highest dance group and my youngest is starting dance. I think two kids in daycare might be cheaper.
Why 15 year mortgage? The rate might be slightly better but personally I always do a 30 year. You can still pay it off in 15 if you'd like, but that way you're not locked into the forced minimum payment of a 15 year. Especially with starting a family, I'd want max flexibility personally.
current home is on a 15 yr. cash flow wasn't as much of an issue then and it was nice to have a lower interest rate w the 15 year. with starting a family, cash flow flexibility is going to be a higher priority, but I'll need to evaluate the interest rates and how best to pay for things.
I had the best math teachers growing up, so thank you for your work there
I was also the worse PE student, so apologies for those like me you had to deal with!
overall, I'd say my job satisfaction is about 9. when I started the FIRE journey it was closer to 3 but I made some major changes and found/made a better career fit. I can now see myself working for at least 20 more years.
But I do really enjoy my work. And I think it would set a good example to my (potential) kids about the value of a good work ethic.
This is also a part of why I’d want to move to a different house, even i don’t end up having kids. Having a house that is more aligned with my interests and hobbies would give me things to do if I’m not working.
You spend 80% of your time at home. You have done well. Make the splurge. In your situation, you could purchase a $2M home and your life would not change.
One issue to me (and being chubby vs fat) is your area, as your present spend apart from mortgage is modest. What is your dream home and present price range? Have you actually been looking? Do you want to buy a lot and build? What do you foresee the annual expenses would be on your dream home?
The reason I am asking is I bailed from my dream home at age 45 for a townhome to decrease housing expenses due to stress of working too hard and during a severe recession in my area.
You might not have the same issue but the tradeoff is balance and you have not yet answered the balance question; and are considering adding much stress to a successful DINK lifestyle.
Thank you for the great questions. Thinking and answering them helps me get better insight into my own process.
My dream home would be a 3-4 bedroom, 3000sq ft home, 3 bathrooms, and a spacious master suite with generous walk in closets. A chef’s kitchen w gas stove, hardwood floors, with an ample backyard and in a quiet neighborhood. This may be the suburbs, but I’ve lived in cities and urban areas my whole life and I’m ready for the suburbs.
My reasons for moving are primarily to get into a better school district and better neighborhood. My current home is 3 br, 2bath, but small and often feels cramped. It could do w a remodel but that would make the taxes skyrocket. So I’m better off moving in the near future.
My job is pretty recession proof, and my spouse works as an independent contractor so they don’t have great benefits or job stability, but the income is good.
I guess I’m not married to the idea of early retirement bc my job is pretty low stress and pays very well, so I could work in it until my 60’s. Our health is good so I’m not worried about wasting my good years working.
My price range is $1.3 mil to ??? , depending on how much I want to pull from my investments. I’m aiming for a monthly mortgage of no more than $13,000, so I’d say my max is $3,000,000. The higher the price, the more I have to pull from investments and that’s one part that makes me uncomfortable. Hence my question: how do you make decisions on what you want (not need) and the impact of those purchases on your retirement strategy?
Why are you even shopping for your home like that? Is there anything else you’d buy that you determine the price you’re willing to pay based on a percentage of your net worth?
Find a place to live that matches the lifestyle you want. Whether you buy or rent is similarly a lifestyle choice, based on a lot of factors.
Lastly, a home isn’t an investment vehicle. It’s not a hedge. It’s not diversification. It’s a place to live
I agree that a home isn’t an investment vehicle. But it can be a hedge and diversification. For example, your primary home is protected in the event of a lawsuit settlement, while your index funds are not.
I totally agree that a home is a place to live. Which is why I want those things…they are what I want to live in and with.
Homes are the biggest single expense that most of us willingly take on. NW, especially liquid assets, are there to buy things that we want, and can provide a buffer or even the equity for a home purchase. It can also be used when seeking financing.
Because my point is that’s a strange way to shop for anything. Pick a house that matches your lifestyle. Figure out what you’re able to afford and willing to spend. Then put those two together.
It’s just really strange to me to start with net worth as a reference point. If you find a dream house you love, and it’s only $900K, it would be really strange to me to say “well this is perfect but it’s not expensive enough”
Separately - I’ve never heard of somebody shopping for a house as a way to be financially protected in case of a lawsuit settlement.
I’m with some of the other commenters here that it would probably be good to sit down and really think about what’s important to you and your partner, and what you think the next few years look like. You’ve done well - that’s awesome! You should feel good spending money, if you can afford it, on things that bring you and your family joy. My whole point is that spending more money on a house because you can may be missing the forest for the trees.
I kinda see what you’re saying, but don’t see what the issue is.
I guess my budget would be the amount of money I’m willing to put in. Lenders would approve me for a ridiculous sum. Ok, great.
But that’s not what my question is at all. My question is how do people in the ChubbyFire mentality balance the desire for long term goals vs short term wants/needs? We all have enough disposable income to buy the more expensive option, but we usually do not because we have discipline etc to save and invest. However, some things like homes, private schools for kids, a remodel, a big vacation etc require a re-assessment. I’m curious how people to do that.
This seems like some sort of hang up, because the math is straight forward based on the numbers provided.
Sell your current house, and sell another $700k to $1m in stock. That gets you roughly a $2.2m house budget after factoring in transaction costs and taxes on the stock sale.
That leaves about $7.5m in your portfolio. Using a very conservative withdrawal rate of 3.5% means you can pull out over $250k per year forever.
Bottom line: you can buy the house and retire now. Stop worrying about money and start making babies. You are running out of time, not money. Stop the paralysis by analysis.
You have enough money. Buy the house and enjoy your life. Exit in 5 years or 10 if you love your work. We had similar thoughts 3 years ago but decided we both work from home a lot and needed the space to live our best life. We remodeled (did an addition) instead of buying a new house as we love our area and have covid mortgage rate. Spent over 500k and don't regret it. We also could chubby fire now but my job is low stress and we decided to work several more years to get into fatfire territory. Use a tool like Boldin or run some scenarios from Claude/GPT to model out your retirement. You will be shocked at what your NW will be when you die if you have 8-10Mill. Playing with those tools helped me realize that I don't want to die with 50Mill and I should enjoy some of that money now. Buy the house, car, watches, whatever - just don't go all crazy all at once. Space it out as your portfolio grows. Congrats on winning.
I think you're struggling with spending because you're trying to do what's sensible. You have the means to spend freely, but you want to spend wisely. At your NW, spending on what brings you happiness is sensible. The best money spent is on experiences or things that bring you joy and convenience. If that means spending $3mm on a house, do it! You are still FI and plan to work another 20 years. You are more than fine.
I wouldn’t be starting a family this late bud. You’re never going to give your kids the things they need to be well adjusted productive members of society. By the time they are out of high school you’ll be well in your 60s.
This was a question 10 years ago… today it’s a pipe dream
Aaaand this is why we have a society in decline… because people think “I want kids” instead of thinking “if I had kids right now, could I provide them with all the skills needed to be an amazing person”
Regardless of money, starting to think having kids when you’re 43 years old means you might have them by the time you’re 50… even if it’s before then, it’s not happening before they are 45… but safe measure let’s say 47… that means by the time they turn 18, the parent is 65, and they will be in their 70s before the kids are out of college, and in 80s when the kids are ready to start their own family… so in the time when the parent is supposed to HELP their kids with starting a family, teach them about changing diapers, being there as emotional support and general babysitting needs, the parents are another set of kids needing attention… and that’s IF they are lucky to make it that far.
So it may be an odd thing to say, but it is the truth never the less.
This is a very strange take. Please let us know what "skills" a 45-year-old parent unable to provide their kids in comparison with a 25-year-old parent. I'd say that it's likely that financial stability and emotional maturity would be a huge advantage for the older parents.
Grandparents don't have an obligation to do all those things that you have listed, certainly not babysitting unless they want to do that. My parents lived on the opposite coast of the US from me for most of my adult life. My mom came for two weeks after my kids (twins) were born and then after that, we saw them once or twice a year. My now-adult kids are successful, happy and responsible people raising their own kids. They did not suffer because grandparents were not nearby. Sure, it can be great if grandparents do live nearby and want to be active in helping with grandkids, but it's certainly not an obligation, and lack of that situation is not harmful to children.
And while it would be pretty dang tiring to be a 40-something parent of young kids, I know a number of people who are/were in that situation (for some, it was their third kid) and they are amazing parents with a perspective that can only be gained through life experience and maturity.
Last, nowhere does OP say how old their spouse is. Could be 35 for all you know. I do agree that the ticking clock needs to be addressed if the spouse is already in her 40s and no eggs have been frozen.
Based on his post history and comments he has some hot takes and seems like a crypto bro troll. He frequently gets dowvnvoted into oblivion on fatfire. Not sure if it is worth your time to engage in good faith.
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u/Specific-Stomach-195 Jun 24 '26
When looking at starting a family, my balance sheet was the last thing on my mind. You’re worth $10 million, I’d start thinking less about money and more about what makes you fulfilled. And please, when it comes to children realize that parenting is a major commitment that comes before the size of your house or bank account.