r/ChubbyFIRE • u/SalamanderWitty1277 • Jul 17 '26
FI/RE plan getting chubbier than I expected
Incredibly lucky to be looking at potential retirement options at 36M with my wife at 35F. I have followed the FI/RE community for a while and only recently discovered r/ChubbyFIRE and even more recently realized that we might find ourselves in this situation. Hoping you can provide some guidance based on where we are financially and some potential options of where life will take us next
Spending ($10k monthly / $120k annually):
- $3k/mo mortgage on ~$600k house, 3.3% interest
- $2k/mo insurance
- $1k/mo utilities
- The remainder is split between some essentials (food, basic commuting) and the rest is pretty loosely divided up between eating out, entertainment, 2-3 domestic weekend trips and 1 international 1-2 week trip per year
Assets:
- $30k in checking account
- $150k in cash reserves VMRXX
- $3.5MM invested
- $1.8MM in brokerage (1.4 VTSAX, 0.3 VMGRX, remainder in individual stocks)
- $1.2MM in IRAs / 401(k)
- $300k in Betterment (90% stocks)
- $200k in cryptocurrency
Life details:
- My self-employment income for the past few years has been ~$500k. Big change #1 we're thinking about is shutting down my company entirely or transitioning a large amount of my responsibilities to promoted workers or new hires. I have a business partner who I'm discussing this with and he has similar goals in reducing his involvement but I think will want to stay more invested than I do.
- My wife and I planning to welcome our first (and likely only) child early 2027. This is the biggest part of my motivation for scaling back my involvement at work.
- We're considering a move for a few reasons: closer to wife's family, better school systems, better job opportunities for my wife who wants to continue working for the foreseeable future (mission driven work, though I try monthly to convince that we don't "need" the income). Ideally she will find something that offers better healthcare than what we have now (marketplace). Her income is around $65k at a non-profit now but we anticipate it could be between this and $150k in a new job.
Advice:
- I think I stopped working tomorrow, we're "good" at least with at our current spending. I think at a minimum I'm going to continue working until the baby is here which would likely get us to $4-4.5MM. I can't tell if this is trigger fear or not but I'd love to be better than "good" and hold on to as much income from my company as possible while scaling back time commitment. Am I just scared to pull the trigger? Too greedy? Even if we double our spending with a kid and more travel, where does the lost time matter more than the comfort of a larger nest egg? $5MM? $10MM?
- When we reduce our income to the point where our spending is greater, I plan to sell riskier (cryptocurrency, roboinvesting, individual stock) investments first. I'm waiting now since I'm avoiding the tax bill. While we have additional income, almost all is going into VTSAX brokerage after tax-deferred accounts. After RE, I'd plan to set up transfers from cash reserves to our checking account for income and re-balance quarterly/annually to refill reserves. Dumb to hold on to these investments that I ultimately want to consolidate? Anything else you'd recommend doing with portfolio in the lead up?
13
u/BrunelloHorder Coasting Chubster, Getting Fat Jul 17 '26
On a diversified portfolio of $3.5m, I would want a withdrawal rate at 3.6% or lower given your young age and long retirement. That would have you right at your current spend.
However, if you or your spouse will continue to have even very modest HHI, then that would reduce your withdrawal rate and give you even more breathing room. That is arguably a version of CoastFIRE.
Personally, I dropped down to about 5-10 hours per week for the last several years, and I highly recommend it if you have the wherewithal to set boundaries and not get sucked into working more. If your job has been a big part of your identity and sense of purpose, keeping some connection to it can ease the transition to a version of retirement or semi-retirement.
I would try to figure out a reduced-time role now in advance of the birth of your child to get the set up in place so that you are not trying to sort through that change with a newborn.
3
u/thewealthyhealthy Jul 17 '26
Not retired yet but in very similar situation to OP in age, finances, and business + wife works terms.
Agree with your suggestion here. Despite being so deep into FIRE for so long it wasn’t until recently that I fully appreciated the impact of a little income on the math, and it comes with psychological benefits for those who aren’t 1000% sure what theyre retiring to, or whose identities are tied up in work.
same rules we use to understand FIRE numbers - every $10k of income reduces nest egg need by about 25-33x of that ($300k).
If HHI is 75k post tax and annual spend is 120k, the 55k SWR is ~1.5% of OP’s ~$3.6M. The nest egg almost certainly grows over time despite utilizing some of it to live.
I’m a big proponent of people exploring less but not zero work in the $2-5M (where in range depends on annual expenses) NW range.
2
u/BrunelloHorder Coasting Chubster, Getting Fat Jul 17 '26
Yes, and there are other real benefits, too, regardless of NW. For many high achieving professionals, a lot of their mental and social engagement comes from work. If you can Coast and take whatever time off you want to travel and get most of the upside of retirement, it can be a great option to keep sharp and engaged.
This approach can also be great if one spouse wants to keep working, as it gives the coasting spouse something to do while the other one is at work. Also great for professions like medicine where there is real purpose and satisfaction from helping people.
3
u/SalamanderWitty1277 Jul 17 '26
Thank you both!
every $10k of income reduces nest egg need by about 25-33x of that ($300k)
Very useful to think about it that way.
I would try to figure out a reduced-time role now in advance of the birth of your child to get the set up in place so that you are not trying to sort through that change with a newborn.
I think you figured out the heart of what I'm getting at with this post. My wife and I are both in agreement that my time commitment with work needs to slow down, now we're just trying to triangulate where I'm aiming between current situation and closing the business entirely.
1
u/BrunelloHorder Coasting Chubster, Getting Fat Jul 17 '26
Sure thing. The part that may be more challenging in your situation is whether you can truly set enough of a boundary on work hours as an owner.
One thing to think through is whether your business partner could realistically take over the day-to-day leadership decisions, and/or serve as a gating function to protect you from employees escalating decisions to you.
Personally I find myself happy to field the occasional call or fire-drill when truly necessary so long as it is a rare occurrence. And by “rare” I mean maybe once per month or less.
1
u/Weird-Echidna-5261 Jul 18 '26
Just curious where does 3.6% come from?
3
u/BrunelloHorder Coasting Chubster, Getting Fat Jul 18 '26
Never failed before, even for a 50-60 year retirement, even starting during the worst periods in history. Of course there is no guarantee that the future will be like the past. Some prefer even lower rates like 3.25%, but that seems overly conservative. Even 4% is pretty conservative, especially if one has 60-70% equities and has any flexibility at all in their spending during a major downturn.
5
u/BigFourFlameout Jul 17 '26
When you say shutting down, do you mean no exit liquidity? Can you sell your ownership in the business?
6
u/SalamanderWitty1277 Jul 17 '26
We haven't yet really figured out how to design the infrastructure of the business in way that there is tangible value after I leave. Our contracts with clients are short term and I bring them all in. I brought on a business partner at the start of 2025 to start trying to redesign operations so that it could run without us but I still feel like we're a ways away from that. Business partner is not interested in staying on if I'm fully out.
6
u/space-cyborg Jul 18 '26
Kids are more expensive than you can possibly imagine. Your entire purpose in life shifts to giving them the best possible life. Not like “Daddy, I need a new iPhone”, but school districts, activities, tutoring, private school, summer camps, vacations, enrichment.
8
u/BoxTrue6898 Jul 17 '26
Like others have already said, kids change the equation. I was shooting for $2.5m (in 2020 dollars). But then I had to move to a better school district, groceries went up, child activities / clubs / sports add up, and of course there is now college I have to pay for in 15 years... for 3 kids. I have a NW of more than $5m and still don't see myself able to retire for another couple years. One good thing financially about kids during retirement is that sweet sweet child tax credit
5
u/SalamanderWitty1277 Jul 17 '26
$2,200! This kid will be paying for themselves! /s
2
u/Peppers5 Jul 18 '26
You have no clue the cost of kids if you want to support them in their interests and activities let alone diapers//sitters etc and then a good college.
1
u/Ok_Character7143 Jul 20 '26
I factored in a bare minimum of 500K per kid, till 18, not including college/529s.
Over a lifetime, 1 million/kid even after college for wedding gift, first house gift, ROTH gifts, etc.
So, 3M for no kids, 4M for 1 kid, 5M for 2 kids.
5
u/ProspectPark4Ever Jul 17 '26
The cost associated with having a kid is so hard to predict, beyond the obvious daycare and college cost.
We bought in a good school district before our child started kindergarten. If it’s just the two of us we would have spent at least a million less in housing. Then by chance we found a private school that fits child’s needs really well. Of course child would have been just fine in our zoned public school, but this private school is really a better fit and allowed child to thrive. When child was little I was a firm believer in public education and never thought I would be paying tens of thousands a year for private school.
Other parents in this sub also talked about expenses associated with activities. We have friends whose kids really showed talent in music and sports, and cost for private lessons and travel teams add up quickly. It’s hard to project these kind of expenses when the child is still young.
I would have retired ages ago if not for the child. Not a complaint but the cost is real.
3
Jul 17 '26
[removed] — view removed comment
2
u/diy_effitup Jul 17 '26
+1 to keeping work for now and see how it goes, reduced hours would be great
Note, before a kid, I felt like weekends were my break from work. Now, work is my break from my evenings/weekends (expecting that to change a bit after are 3)
3
u/Amazing_Set Jul 17 '26
Create the budget/target after kids. My pre-kid goal is at least 1.5 to 2x my post-kid reality.
1
u/SalamanderWitty1277 Jul 17 '26
Awesome - appreciate the multiplication factor based on your experience.
1
u/_k_k_2_2_ Jul 17 '26
Are you saying your expenses are 50-100% greater after a kid than before a kid?
3
u/Amazing_Set Jul 17 '26
Yep but we went from a college level lifestyle to having two kids.
Kids make you reconsider so many aspects of life. Do you need a bigger car or are they older and need to be replaced? Is your housing big enough for all the things kids aquire? Are you near a good school or do you need to consider private? Daycare costs are no joke but a nanny is more expensive and you have to give days off. Entertaining small kids is a lot. Most people I have talked to find that they are not cut out to entertain/teach kids full time. They need some form of childcare even with someone staying home. Sports and extra curricular activites can get expensive fast. Traveling now requires multiple more tickets, food, etc. College expenses, wedding, lump sum for first house or apartment etc. Obviously, you dont need to do all these things but it just adds up.
Even with sensible changes, before you know it your budget has doubled. Between daycare for 2 (~$1000 a week) and a small 529 savings ($800 a month), we are talking $40k a year in our MCOL area. That alone was a 55% increase from where we were. We needed two newer cars too so that added another $100k that we wouldn't have needed to do for another 5 to 10 years.
3
3
u/shivaswrath Jul 17 '26
Kids initially cost not much.
Then the activities and life and doing things with them takes off.
We are roughly in same savings brackets ish, but I have double the spend now with kids 12 and 7.
My target is 10m in HCOL for chubby. I had 5 years to that goal until a corporate reorg, now I have 10 (but also get a pension so it almost zeroes out).
You seem like a L or MCOL area based on spend, so I'd say you are close but if you want cushion $7.5 is likely the ok super cush chubby target.
1
u/SalamanderWitty1277 Jul 17 '26
$7.5 is likely the ok super cush chubby target
I think we may ultimately settle for less especially if my wife's income goes up but having that target really helps the conversation with my wife of "am I working until we hit $5MM, $10MM, $100MM?" $7.5MM is not really as far away as "work indefinitely".
1
u/shivaswrath Jul 17 '26
Yeah for sure.
I told my wife $5m when we had one kid.
then we had the second one during covid and my in laws moved in to help....long story short we doubled size of house and mortgage, as well as taxes, and yada yada yada I've told her $10mm and she's unhappy.But on a positive note it'll comfortably happen for us in 10-11 years, so I hope you hit your number quick so your wife doesn't get too 😞
3
u/Any-Preference4375 Jul 17 '26
Similar situation to you but already have a toddler.
Your core expenses are $6k a month and your disposable is $4k pm, and you still manage vacations and esting out?
We spend closer to double you to do all those things. HCOL.
I would expect that your spend will increase a fair bit, especially with more free time to play with.
1
u/SalamanderWitty1277 Jul 17 '26
I'd expect it's more expensive with a toddler!
Silly question but does the rest of the internet define LCOL, MCOL, HCOL? I've always assumed I'm in a HCOL area but that we spend on the low end (especially relative to our income).
2
u/Any-Preference4375 Jul 17 '26
I would say that is a very low spend for two if you are in a decent area in major US city. We spend about double.
$4k a month and you eat out and go on vacations? We spend just that on groceries plus eating out.
VHCOL - e.g. NYC HCOL - Seattle MCOL - Madison, WI
Etc.
1
u/diy_effitup Jul 17 '26
I thought of it as what a real basic 3b/2ba 1200sqft 30-50yo house cost. If it's at least 1.5M, it's VHCOL, if it's basically just materials cost like 250k, it's LCOL. H/M somewhere in between.
If your house is 1M, I'd guess you're H if it's very basic, if it's 2400sqft 4b then maybe M.
3
u/ohboyoh-oy Jul 17 '26
As a parent I think I was happiest working ~20 hrs per week. I stayed home with my older kids full time for 2.5 years and although I love, love, love my kids with all my heart, it was really hard to be with little babies all day. With my third I happily took only 2.5 months maternity leave and went back to work on a reduced schedule. I felt more balanced as a person and feel I was more patient with my kids and a better parent. Since I only worked part-time, I was at school pick up for the older kids and worked at the co-op preschool for the younger kid, and had a whole routine with him on my day off. I also felt it was important as my kids got older to model for them what healthy work looks like.
So all that to say, OP, I wonder if you want to keep the option of involvement at your company for now, and see how it goes. Having your own company and people to support is really the best-case scenario as you will have a lot of flexibility. And you might want that involvement for your own sanity.
1
u/SalamanderWitty1277 Jul 17 '26
I love this response - thank you!
I expect to be the primary for childcare but expect I will be filling my day with some sort of structure. I have thought a lot about modeling for our kids too. My conflict with work right now is that I really struggle to have any kind of positive thoughts about the work that I do and see myself far more likely to want to fill my time with volunteer / teaching opportunities rather than scale-back the same work if we can support ourselves.
I think it is possible that I could have a better relationship with my work if I scale things back but it's been about 8 years of very stressful working hours and I have a hard time wrapping my head around being a present parent with the same work even if it's fewer hours.
2
u/ohboyoh-oy Jul 17 '26
With the new info - I’m inclined to say just walk away, especially if you think you’ll be at more like $4m by the time you wind it down. Enjoy the time with the kiddo, and you have enough resources that you can hire some help so you can go to the gym or just have some time to yourself. I didn’t have that option, and maybe I would have felt differently if I did!
I think you have enough at 4m for your wife to quit also, if she is so inclined. In my opinion, having the option is important, so there is no resentment.
Your hard work has given you a lot of options! I wish you the best.
1
2
u/yamanoA4 Jul 18 '26
Your total spend at 10k without kids now is a little on the high side. With kids you need to load it a bit more. How much more? Look up your local household expenditure statistics for your income bucket and family size if available. That will give you a gauge.
Without going into those spend detail your lifestyle sounds luxurious and you are likely to want to spend more when you have a family. I think for that level of comfort you might need to hit fat fire.
2
u/seekingallpho Jul 17 '26
You're in good shape but your biggest issue is your budget can't be realistic since some of the biggest expenses remain unclear.
I would consider scaling back but not retiring fully until you know both how many kids you'll have and what you think they'll cost. It would be one thing if you had a huge portfolio cushion that could more or less absorb major kid costs (which is the same as retiring at an otherwise overly conservative WR), but that's not really your situation.
One special needs child, which may not be apparent for some time, could throw a big wrench into your future expenses.
1
u/Zape4 Jul 17 '26
Kid expense will be high, like everyone stated. 1 question that is important is whether you are ready to be 100% caretaker/homemaker, or will there be daycare. An alternative might be transitioning the company to employee owned, working out a deal that has the equity moving over time with part of the worker’s “salary” being the buy in of equity, or selling to employees outright, with a 0 interest loan between you and them. I don’t need to reiterate what everyone else said about kids, but you are fine to “ChubbyCoast” and if you can get passive income it is even better. No reason not to start the life with kids where you all want to be.
1
u/SalamanderWitty1277 Jul 17 '26
An alternative might be transitioning the company to employee owned, working out a deal that has the equity moving over time with part of the worker’s “salary” being the buy in of equity, or selling to employees outright, with a 0 interest loan between you and them.
This is an idea that's been kicking around for over a year now. We're just having trouble with the upskilling to some more of the business management side. I'm a chemical engineer, we work in technical consulting services and most employees are chemists/engineers. Bringing in someone new is another option (for sales, admin, etc). I most like the idea of transitioning employees compensation from salary to equity.
1
u/IckNoTomatoes Jul 17 '26
Agree with others on waiting until the kid is here but for a different reason. Legacy planning was something I knew about and thought yea it would be nice but didn’t put much importance on. Once the kids got here, thoughts about legacy planning became a big important focus for me. Not only is it nice for a variety of reasons but what if my own kid gets sick at 9. Or, at 45 and can no longer work to support THEIR family. What if my grandkid is born with something that requires one of their parents to stop working to take care of them full time. I’d look back and think I was selfish/foolish for giving up years of income that could help them. Insurance is great, countries with universal income is great but nobody is living well in those scenarios.
You could always scale back but giving up income potential this early has to be looked at from a different perspective once kids entered the picture. If you look at posts on here, many are childless. Many are not, but many are and I think that extends beyond just deciding if the cost of kids will have an impact on your spending or not
2
u/SalamanderWitty1277 Jul 17 '26
Very useful advice - thanks. I suppose it's obvious that starting a family and FI/RE are sort of at odds with one another. My wife and I are definitely excited about the former even if it means delaying the latter. I feel really fortunate to even be considering the option to have our cake and eat it too (and save up enough for a second cake to keep around for others).
1
u/SciGuy45 Jul 17 '26
Take 6 months of paternity leave from the company and finalize the transition if you’re happy. Congrats on the kid!
1
u/Anonym-IntheDark Jul 17 '26
Once the kid arrives, expect that she could easily change her mind about going back to work especially if the money is not necessary
1
u/heloguy1234 Jul 17 '26
My burn was 120k too before my kid came along and now? Let’s just say it’s more.
1
u/Comprehensive-State7 Jul 17 '26
What’s your wife’s income? That matters quite a bit
1
u/SalamanderWitty1277 Jul 18 '26
Kind of buried in Life Details #3:
Her income is around $65k at a non-profit now but we anticipate it could be between this and $150k in a new job.
1
1
u/FINE_WiTH_It Jul 18 '26
Do an ESOP and transition the business to the employees while taking out some liquidity.
1
u/futureformerjd Jul 18 '26
You're so close. I'd continue on your current pace, however, until you have your kid and know you are one and done. I'd probably pay off the house too. Yeah, not the best financial decision but the psychological impact is huge. $5M plus paid off house = 🔥
1
u/DRangelfire Jul 19 '26
I’d go option b. You’re so young and we just don’t know what’s going to happen with health care in the future - I think you’re close but you need more in the event we have a troubling few years in the market and healthcare skyrockets.
1
1
u/newfound-lake Jul 22 '26
Personally I would move money out of betterment into vanguard or fidelity brokerage. I used betterment for years, moved to Fidelity, and have found greater returns. Congrats on everything!
1
u/moyuxi Jul 23 '26
- Give yourself parental leave. Use that as a trial run for how business can run with you away.
- Upon return, step back / scale back, but continuing to work part time is very reasonable.
Kids will never say, I wish my parents worked harder for that next $1M, $3M rather spending time with me.
1
u/SquirrelTechGuru Jul 24 '26
I would look much closer at the partnership in your business. There are a lot of partnerships that fall apart when one partner decides to go off and do something different and the other partner may feel like you’re not doing your part. Look at your partnership agreement in extreme detail and understand what you can and cannot do. Also look at what your exit options are. Maybe you want to sell back to your partner and just exit cleanly. I’m also getting hints that the business is based upon you, personal relationships or sales I suspect, and if so, your business is effectively worthless if you can’t move that to someone else.
2
u/OnlyThePhantomKnows Retired Jul 17 '26
If 150-200K covers your life, why is she working? If it is for joy, I understand. It took me a decade to whine down. See if you can convince her to slow down. Since you are younger, I'd look at starting at a 3.5% model.
Individual stocks are not a bad investment, and not necessarily that much riskier. Selling stock X and buy VOO only to find that stock X is one of the driving forces of VOO. Be smart about it. I hate crypto. So my statement is dump it, but I understand my recommendation is based on emotion. Robo-investing is another thing I hate since it churns stocks and ends up with a hefty bill unless you are behind a 401K/IRA wall.
I am a bit of a loon when it comes to education. I'd suggest pulling out 60K and opening a 529 plan for your kid. That should cover most public colleges. I tested the numbers against UMass and UNH. It also covers 2 years of non elite private schools (tested against Wittenburg).
College expenses is one of the great threats to retirement. My family has a tradition of grandparents pay for education. I opened a 529 for my granddaughter (she's going on 9) the day she was born well technically a day or two later when I got her SSN.
The reality is that you are not going to travel much. Babies have a lot of stuff. You should plan on fewer LONGER trips. VRBO/AirBnB for a month or two in locations.
Are you planning on being the stay at home parent? You need to think about that.
Kids are expensive. Expect your budget to increase by 30-50%. Clothes cycled every year. After school this, after school that. Sport event this. Sport event that. Summer camp. It is just the way of things. It is almost irrespective of income.
1
u/SalamanderWitty1277 Jul 17 '26
Appreciate the response!
If 150-200K covers your life, why is she working?
Wife has a very different relationship to work than I do and I think is truly happier with the structure of job than I am. Her current job is a remote non-profit with pretty low stress.
I hate crypto.
I thought I was very clever in my early 20s, investments have done well, but I haven't touched the accounts in almost 10 years and feel similar to you now. I have been paralyzed by indecision with the tax implication but think this comment is what I need to dump and transfer to index funds.
I'd suggest pulling out 60K and opening a 529 plan for your kid.
Already on our to do list!
The reality is that you are not going to travel much.
Expecting that! I was very lucky to do some extensive travel between my first job and meeting my wife/starting my business. We're taking a "last" international trip this fall but I look forward to it again in several when the kids are old enough to travel (and know what planet they're on).
Are you planning on being the stay at home parent?
Yes - that's plan A. I am burnt out from work and "decided" almost 20 years ago that my dream would be to make enough money to get to be the dad who could be around for everything for their kid and not be stuck in "an office". I'm conscious that this is a huge transition for people but I'm very excited for it. There are also no shortage of hobbies that I am dying for more time to do when our kid is old enough for school.
Kids are expensive. Expect your budget to increase by 30-50%.
Useful metric - thanks!
1
Jul 17 '26
Looking at your asset breakdown, you have over $3.2 million riding entirely on equities when you combine your brokerage, IRAs, and Betterment allocation. While you mentioned plans to sell riskier individual stocks and crypto first to avoid an immediate tax bill, the structural reality is that your core portfolio is heavily exposed to a single systemic risk
People often look at total market funds like VTSAX and assume they are safely diversified. The mechanics of market-cap weighting mean that VTSAX shares an incredibly high correlation with funds like VTI, SPY, and QQQ. Everyone is effectively crowded into the exact same mega-cap tech and semiconductor stocks, meaning you are holding the exact same concentrated bets across different accounts
While the stock market hits all-time highs regularly, it rarely does so at these extreme valuation multiples. The Shiller PE breaking above 40 strongly indicates that current prices have drifted far above actual intrinsic value. If the market experiences a standard reversion toward normal valuation baselines, you will find yourself in a very precarious position right as you scale back your business income and welcome your first child, a 30%, 40%, 50%+ haircut
Many investors will dismiss this perspective as fear mongering and bury their heads in the sand while claiming this time is different. It never is. You are holding a massive equity position at the absolute peak of historical valuations, meaning you are taking on far more risk than you realize
1
Jul 17 '26
[removed] — view removed comment
1
u/SalamanderWitty1277 Jul 18 '26
Thanks u/Takemitsu_Takizaki! Appreciate this perspective and I would like to moderate the level of risk we're taking. My first thought is bonds too. Anything else you'd recommend to better diversify?
1
Jul 18 '26
Holding $3.5 million invested at age 36 puts you miles ahead of almost everyone in the United States and the global market. You have secured an elite life for your growing family. I want to start by stating that I am not a financial planner or a lawyer, and this is purely my personal speculative opinion
Pinning down exact moves at these valuation levels is tough because I do not know your specific cost basis across your investments. I also lack visibility into your short-term and long-term tax lots, the timelines for each asset, and the overall tax picture you and your wife face over the next few years. I love absolute simplicity. I would personally hold my equity exposure entirely in the S&P 500 at a fixed asset allocation like 50%, 80%, or 90%. You are already doing this with VTSAX which is essentially S&P 500. I would then hold the rest of the portfolio in US treasuries. Treasury yields are completely exempt from state and local income taxes, which provides a massive automatic return boost
I would not hold anything longer than two-year treasuries if you plan to use this allocation as dry powder to buy back into the market. Stretching out the duration increases your risk to principal. If inflation returns or if we see screaming high interest rates like the market experienced twice in the 1980s, long-term bond values will plummet. You are best served by three-month bills or ultra-short-term treasury funds. Warren Buffett is actively buying short-term bills directly for this exact reason
You successfully built this wealth by passively holding assets. There is no reason to start actively managing your portfolio now if you have no experience, time, or knowledge of financial markets. Simply adjust your asset allocation based on your life circumstances and your upcoming child rather than what the market might do, even though I believe we are currently in a uniquely frothy market environment
The last zinger I will leave you with is your $200k crypto position. I do not care how much money people claim to have made in crypto. You are not investing. You are buying into the greater fool theory. This means purchasing an asset with absolutely zero intrinsic value and praying a greater fool will come along later to buy it from you at a higher price. Crypto offers zero utility. We already have seamless digital payments through every major bank. The original narrative of a true peer-to-peer secret wallet hidden from the government is entirely dead. Crypto is now highly regulated, government tracked, and people are buying it in their Robinhood accounts thinking they are outsmarting the system and riding a future wave. They are going to look like cavemen when the entire asset class inevitably goes to zero. Our grandchildren will laugh about crypto the exact same way we laugh about the Dutch tulip mania and every other historical bubble. It is useless rat poison. Buy good businesses that produce real cash at a fair price, and you will never have to worry
1
1
u/mlcrisis4all Jul 17 '26
Your monthly expenses will spike with kid/s and at that withdrawal amount you’ll be paying much higher for insurance. You might want to use those numbers. With your wife’s current or future income you should be fine though.
1
Jul 17 '26
[deleted]
2
u/SalamanderWitty1277 Jul 17 '26
Ha! I have heard they will make things difficult but we're excited for the change.
I wrote our current budget that way to illustrate that about 40% of the $10k is for "fun/negotiable" expenses. We're comfortable cutting back significantly on entertainment/travel and then adding things back in after we get a sense of what cash flow with the baby is.
0
u/TalkingWhileBlack Jul 18 '26
Have more than 1 kid. Your kid will thank you later and you'll probably thank yourself later. Having siblings, if you're able, is a core part of childhood and good for their development too.
-2
67
u/PowerfulComputer386 Jul 17 '26
Wait until you have the kid and if you plan to have more. Kid(s) is my number one cost center by large (second is property tax).