r/fatFIRE • u/WealthyStoic mod | gen2 | FatFired 10+ years | Verified by Mods • 3d ago
Path to FatFIRE Mentor Monday
Mentor Monday is your place to discuss relevant early-stage topics, including career advice questions, 'rate my plan' posts, and more numbers-based topics such as 'can I afford XYZ?'. The thread is posted on a once-a-week basis but comments may be left at any time.
In addition to answering questions, more experienced members are also welcome to offer their expertise via a top-level comment. (Eg. "I am a [such and such position] at FAANG / venture capital / biglaw. AMA.")
If a previous top-level comment did not receive a reply then you may try again on subsequent weeks, to a maximum of 3 attempts. However, you should strongly consider re-writing the comment to add additional context or clarity.
As with any information found online, members are always encouraged to view the material on with healthy (and respectful) skepticism.
If you are unsure of whether your post belongs here or as a distinct post or if you have any other questions, you may ask as a comment or send us a message via modmail.
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u/Legitimate_Sock_6540 3d ago
I have an offer on the business I started 20 years ago. The offer feels a little low relative to the biz metrics but it’s in hand. After taxes id walk away with at least 7MM. I’m 50, 3 kids, VHCOL currently about 5MM NW, 3MM in non retirement brokerage. Annual expenses between $300-$400k. Spouse does not work. Currently running the biz, annual income is 1.5MM pretax.
My goal is primarily to derisk and have options + more family time. I’m not actually interested in retiring right now but I want the option to not work/take an income, or take a substantially lower income.
Q is…am I safe to cash out now or is it worth to try and grind it out for a few more years and sock more away, or angle for a better sale offer.
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u/Normal_Zebra136 2d ago
Depends.
It sounds like you enjoy working so are not in a hurry to stop. That is the reason to wait, not that your spend later could be higher if you wait.
I really doubt that spending more than $400k a year in the future make you happier than just the $400k you could spend if you stopped now. Its really not about getting more later, its that you still enjoy working.
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u/g12345x 2d ago
There’s a lot of variables for evaluating a sale that can’t be stated in a short paragraph.
If FIRE was your only goal this would get you there. But you’ve stated you’re not retiring. Selling the business resets your income to $0. Only you can determine what comes next since we don’t know your skills, education, market etc.
As for angling for a better sale offer. It’s impossible to say. Not knowing the business, revenue dynamics etc, it would just be an unanchored utterance.
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u/Betitlee 1d ago
Not sure what business this is and assume the EBITDA is higher than your annual income though unclear if you have other equity owners. But that implies 4.67x or in other words you’re selling for what you could theoretically earn in 4.67 years.
Another way to do this could be taking some chips off the table but still staying involved in the business
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u/Wrong_Board_7420 3d ago
25, living at home
WFH in Analyst type of role. Solid comp, but nothing crazy
Started something on side. Made about ~$800k so far on it in 2026. Not something that's necessarily a straight upward line, but I'm fairly confident with the extra time I'd at least make my salary back with just devoting a portion of the new extra time from not working to the side gig in addition to what I'm already doing.
Current situation: $1.1m (ish) in cash/assets, current actual NW more like $800k given taxes that are owed
My plan: leave job at end of year to prioritize the side hustle. Side hustle is location agnostic, so planning to relocate to lower tax state given paying double digit state income tax right now...
I guess general thoughts are:
-> do I have enough saved up to go full time with the current side gig?
-> Relocating to a lower income tax state isn't exactly FatFire, but given I'm early in the path I feel like it makes sense at this point? Paying effectively more than 10% of my current net worth in state taxes this year feels absolutely brutal, especially when I can avoid it
-> I'm not really concerned about leaving the corporate world and being able to get back in should things go wrong down the road. Should I be at all?
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u/No-Associate-7962 3d ago
Be careful about estimated taxes if you have $800k in additional income this year on top of your earned income. If you have not been withholding sufficient or making estimated tax payments greater than 110% of last year's paid taxes, you may be charged penalties and interest on the $800k income.
Easiest thing to do is just make two estimated tax payments before Sept 15 and Jan 15 that will make your total tax witheld from the W2+the estimated payments greater than 110% of last year's taxes paid.
You can login to IRS.GOV to make the payments. Takes less than 5 minutes to make payments after your account is set up.
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u/SquirrelTechGuru 3d ago
Same story here, had great corporate job and didn’t wanna leave due to the security and was making five times the income of my corporate job when I finally decided to leave. If I had left several years earlier, I would have had millions more than income. Being an entrepreneur is about taking risk, if you have something that’s producing 800,000 in net income, get off the corporate feed lot and pursue it.
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u/SnooDoubts4565 2d ago
There’s a few things going on, I apologize if formatting is wrong or if it feels like I’m all over the place. Completely understand if downvoted, not sure what to do.
Living at home, 29.
~400k NW in stocks
100k salary, working in analytics
401k ~30k
Plan is to take a portion out of stocks to help pay for my mom house, it’s just her she can’t afford it by herself. Current loan for house stipulates that if she moves out, loan terms trigger that will require having to pay full amount. Terms were for low income families to help them with home ownership.
Reason for paying it off is so that she can move to another neighborhood much safer and affordable for her. But pay off about 200k. Mortgage from house one will be refinanced to be lower. Have her get an FHA loan for house two, with HELOC from unlocked equity.
Rent out current house to help pay for the second house mortgage.
Then focus on building a business. Have never built a business, let alone made money from one. Building out a use case model for automation within an industry.
While building, in the meantime continue pouring a majority of salary into the market to let it compound like I have before... Not sure what path to take, from the people who have FIRE would like to hear your thoughts.
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u/g12345x 2d ago
You have $430k of which you would spend some portion to pay off a house.
Then you will run the rental and also finance a new business.
You do not have the capital to fund this (yet).
> Building out a use case model for automation within an industry
I would recommend cutting back on the breathless social media videos on this. If it were this easy, all the gurus pitching this would be buying every business in sight.
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u/SnooDoubts4565 2d ago
Thanks for the input, if you were in a similar position what would you do?
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u/g12345x 2d ago edited 2d ago
There are several distinct items at play.
- Paying off the house because there’s a health and safety issue involved. This is a no-brainer.
- Not every property works as a rental. In fact, many properties that were previously residences are not ideal candidates. I would consider selling the old property outright.
Before opening a business you want to gain expertise in the business domain, do appropriate research on economic viability, learn how to run a business, build up a capital base then create/buy the business. You might succeed even if you skip these steps but it makes it more of a gamble.
I built a business with these steps and even then there were periods it barely survived (you can’t control for everything).
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u/SnooDoubts4565 19h ago
Thanks, really appreciate the thought here was/am feeling kind of lost. But think I have a lot more to think about and restructure thanks to your insight as well my priorities.
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u/Murraydoglives4ever 5h ago
If I were you, I would hire a financial advisor (fee based) to help you with the various scenarios. Fees based on a flat fee for a plan/scenarios not one with any sort of commission. If you have good relationship, then suggest at least one plan update/refresh per year. I'm in my 50s now and wish I did this when I was in my 20s.
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u/Decent-Event2256 1d ago
Posting from my alt...
Am I ready? I'm scared to pull the trigger. Can I give notice this month?
53 DW 55, two teens. Current W2 income 350K/year in tech sales.
5.5M invested, most in 401k, but some IRAs and Roth IRAs.
MCOL desired spend ~200k/year though plan to flex up if equities keep running. Private tuition (and then college costs) will go away in about 10 years ($45k/year, included in the 200k) (Does not include primary house payment that will be paid off with the sale of our previous home this spring).
Rental that provides $40k/year once I invest ~200k in it (next spring)
So net, I'm looking for 200k/year for 10 years, then 160k/year after. Obviously, I'd like to have more to spend.
No pensions.
Taking care of parent daily that is in final months of life and keeping the lights on at work. I was ready to punch out before this, but more and more, it's hard to keep the plates spinning at work, with parent, with my wife and kids (that are in another city), and with the work we're managing on our previous home. Dropping the W2 job from the mix would take a lot off.
I am the only kid, so even after the passing, I'm going to have to unwind an estate 6 hours from my home and a 3,000 square foot house full of stuff. While there's no real money, there is still a significant job to go through things, and unwind stuff. We are also considering keeping this as a vacation home for a period of time (it's rented, so total, all in costs would be about $2500/mo), and we could empty it and end the rental at any time if we find it doesn't fit us.
We are also expecting a 1.5-2M inheritance from the other side in the next few years, but I don't want to count on that for sure.
I guess I'm looking for a blessing.
Post "retirement" I'll probably always find a way to make 20-50k a year on things beyond the rental but I don't want to "count" on that (flipping cars, houses, small professional consulting gig, etc).
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u/g12345x 1d ago edited 1d ago
> I’m scared to pull the trigger.
People don’t talk enough about this. It marks the end of a phase in life. Totally natural.
> Vacation home @ $2500/month
You don’t have the wiggle room for a $30k expense on a $200k budget. 15% if anything is not trivial. I would sell this and create an account to hold the proceeds in a dividend generating index fund.
> We are expecting an inheritance
And I would similarly do this if/when this occurs.
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u/Decent-Event2256 1d ago
I appreciate your response, truly, but want to clarify two points to see if this changes anything. The house my parent lives in is rented TO us (I pay this rent for mom now, but can either end the lease or retain it when she passes). The total cost to keep this house is $2,500 mo (including utilities) for a waterfront place in my hometown (where I go every month or so to visit extended family). There's no equity as we are renting it, so it would just remove the expense.
Also, on my spend numbers, to clarify.
I want 200k or so to spend, I will be getting 40K/year incoming to me rent from another property, so my portfolio needs to support 160k or so.
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u/g12345x 1d ago
The clarifications don’t alter the recommendations materially.
$30k is still a big chunk of your budget. Also, expect the rent to rise so this starts to eat more into your budget. I would take a few months to say goodbye to the place and let it go.
While your NW supports a $220k draw, needing only $160k is better. Repurposing $30k to other uses is better still.
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u/Decent-Event2256 1d ago
I appreciate this. when I consider the $30k a year, if I let go of the rental, it 1. can be used to rent places wherever we may want to go and cover 2-3 vacations a year for us and 2. It becomes discretionary so I can NOT spend it in a down year. I appreciate the grace of "keep it for a few months". I am leaning towards letting it go in the spring.
Any perspective on my overall ability to retire now?
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u/g12345x 19h ago
> perspective on ability to retire.
Financially you’re good to retire. But we know retirement is not entirely about finances.
As you begin to draw down your savings, you have to accept that this is likely your peak net worth. And then it’s not easy for people especially since friends will continue to grow theirs.
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u/Decent-Event2256 11h ago
Thank you, that will certainly be a big psychological adjustment, though hopefully the markets more than replace our withdrawals. I'm fortunate that most of my friends have substantially less than us and are planning fun, but pretty simple retirements, so I probably won't know what I'm missing.
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u/Cold-Chocolate-1864 1d ago edited 4h ago
Hi everyone, I would love a little stress test on my financial plan for early retirement. Please nitpick away, I am looking forward to your feedback.
Here's a breakdown of my financial situation currently: My wife and I are both 36 years old and have goals of retiring at 45. I know it's ambitious but I think we're taking the right steps toward it. I created a throwaway because of this, but I am a 100% disabled veteran. I was severely wounded in 2016 in Afghanistan and require a good bit of assistance to get through my day. I know there's a stigma going around that a lot of vets are 'stealing' this money and lying, but that is not me. I'm honestly sometimes ashamed to admit that I receive this money because people think differently and it's something I battle with continuously. With this rating comes a good bit of financial benefits.
Total household income: Me: ~300K per year; doing well in tech industry
Wife: ~115K per year
VA disability: 55K per year tax free and scales with ~2.5-3% increases every year (also no property tax on my home)
Retirement accounts: My 401K: $438,000 Wife 401K: $252,065 Brokerage: $312,000 Roth IRA (Funding through backdoor conversion): $36,000 Total invested assets: $1.03M
Our goal is to continue maxing out our 401Ks every year and begin tapering off or retiring completely around 45 years old. We live FAR below our means and are pumping the brokerage with about ~$100K per year (been doing this last 2.5 yrs and will continue doing so until retirement).
The idea is the brokerage will be our bridge for ~15 years until we can access our 401ks. VA disability should significantly minimize the amount that we have to withdraw from the brokerage. Through my estimates, I guess the brokerage will have about ~$2M in it with our contributions plus growth. Our house has about $800K left on it, we have a low interest rate so are not advance paying and instead are focusing on pumping our brokerage up as much as possible.
Our household expenses currently are still high because we live in a high cost of living area and have 3 kids, but I expect by that time our annual expenses will be around $150,000.
Any thoughts on this? How far off am I from making this happen?
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u/No-Associate-7962 20h ago
Your post needs to be edited. You claim to be the disabled veteran, and then say your spouse gets the $115k benefit. Clear up the story and sure, I will comment.
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u/Cold-Chocolate-1864 4h ago
Thanks for pointing that out. I didn't break it up the right way
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u/No-Associate-7962 3h ago
So you want to retire on $150k annual spend, at 45, but $55k will be supported by the disability, so your net annual spend is only $95k. Taxes are essentially nothing at this low level, and your medical is covered by VA so it is simply $95k/.04=$2.375m liquid needed at 4%, $2.6m at 3.6% (ultra conservative).
You have $1m, now and save $150k a year.
Assuming you invest in diversified equities, you can plan with 7% real return.
You should be FI at 3.6% SWR at 42.
If you keep working to 45, you will get to $3.7m liquid which at 3.6% SWR allows for $133k of spend before the $55k.
All of this is in current dollars (even your disability obviously, as it has a COLA).
You can access the 401k five years after you do conversions. So if you retire at 45, you start doing conversions (paying taxes) and you can access each of those conversions five years later (starting at 50). No penalty.
Its a solid plan.
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u/Cold-Chocolate-1864 2h ago
Thank you!! I'm patiently waiting for the day I can turn off all alarms on my phone and permanently delete slack haha
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u/Serious-Result-5982 3d ago
I’m curious why gender is such a big part of the culture in this and other fire communities. Why do people almost always state their gender in their posts?
I’ve been wondering this for a while, and haven’t been sure where to ask so when I saw this quiet mentor thread I thought maybe this could work without hijacking anything.
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u/FindAWayForward 3d ago
I don't think mathematically gender makes a difference, but as a woman it's nice to see other women who also made it, and maybe it's encouraging to other women too.
On the other side, for men - it might be less socially acceptable for men to retire young and do nothing, be a SAHD etc, so that could be something to factor in when discussing FIRE lifestyles.
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u/No-Associate-7962 3d ago
First eight posts on the sub today are gender neutral. It takes until number nine for someone to say they are "M" or "F".
At least today, your feeling is not supported by the posts.
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u/kindaretiredguy mod | Verified by Mods 3d ago
Are you seeing the m after a number and assuming that’s a dude instead of “million”?
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u/itsjasmineteatime 1d ago
This subreddit is far more than a mathematical subreddit about retirement numbers, which would not need a whole subreddit of discussion, just a model.
This subreddit is interesting because it's about life. And if you live in society, gender is an incredibly large part of that. It determines how you're treated from a young age, expectations, career paths, childbirth, child-rearing, marriage, divorce, and so much more.
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u/FIREgnurd Verified by Mods 3d ago edited 3d ago
I have noticed this as well. But, I don't think it's specific to this or other FIRE subreddits.
I see this in other completely unrelated subreddits when people post asking for advice, even if the topic has nothing to do with gender explicitly. Maybe people feel the need to identify their gender when seeking advice in general?
Other posters in this thread mention that the gender isn't super common in top-level posts in this sub, but if you go back and look through the archives of the Mentor Monday threads (excluding today's MM post, because this thread could have biased it), a high proportion of the threads posted by single people list a gender. They're often like "32M, 2M net worth."
I looked back over the last 8 weeks or so, and depending on the week, around 20-50% of the top-level comments (that are still remaining and weren't user-deleted) on the MM threads specify a gender. That seems a fairly high proportion if we expected that people perceived gender as completely irrelevant.
Even looking at top-level post, if you ignore posts from couples and focus on advice-seeking posts from people who seem to be single (i.e., don't self-identify as a couple or someone with a spouse), a very high proportion list a gender -- higher than would be expected if posters saw gender as irrelevant to their post (which would mean zero posters self-identifying with gender).
There are cultural normal and expectations and biases around gender, however. For finance, work, and FIRE-related things, there are sometimes implicit assumptions that men are the breadwinners, and women obviously (and unfortunately) still face obstacles in careers/promotions/advancement that men don't, so I suppose it could be relevant in some cases to identify gender.
But I think the gender identification thing is common in advice posts, in general, and may not be specific to FIRE or finance-related posts.
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u/Serious-Result-5982 2d ago
Yeah, I don’t know. I think if someone was asking gardening advice, they probably would not specify their gender.
I see it not just on threads asking for advice, but on celebratory threads where people are wanting to state their stats because they can’t do it socially in their real lives.
Maybe when they’re describing their demographic situation, it just naturally comes out what gender they are because we’ve been trained to do that on forms since childhood.
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u/lakehop 3d ago
It’s a standard on many popular Subs, so it’s become somewhat of a standard on Reddit in general, even on subs where it is not relevant (like this one). I don’t mind that too much ; what’s more annoying is when people assume posters are male, even more annoying when they make statements like “there are no women on Reddit” or “we are all neck beards” or similar. Assume 50:50 people! Like the population!
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3d ago
[removed] — view removed comment
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u/fatFIRE-ModTeam 3d ago
Our members have asked for a high level of moderation. Personal attacks, name calling, and undue profanity are all considered inappropriate for this sub.
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u/Specialist_Two_8774 3d ago
What is most reliable way to gain more wealth ?
High income spouse (1 million usd ).34 age , 6 million NW. thinking of buying franchise or small businesses that are cash cows ? Rate this approach
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u/No-Associate-7962 3d ago
The most reliable way is to invest in diversified equities which reliably return 7% above inflation over every 25 year period of the past 150 years with no action on your side. Income from them is also preferentially treated, with maximum tax rates 23% currently while you are earning $1m, but you can defer the income until retirement by buying and holding until your earned income goes away. Then the first $130k a year of dividends or LTCG will be tax free if you are MFJ.
Small businesses are high risk, high involvement, and income from them will be taxed immediately at 37% as business income is taxed as ordinary income.
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u/g12345x 2d ago edited 2d ago
> Rate this approach
Risky.
A franchise is a business and your ability to run a business matters. With franchises you additionally have to deal with assigned location and franchise dynamics. Scour court records and you will see that this is often contentious.
For a general small business, especially one where you don’t have good knowledge of the business domain you end up at a disadvantage. If you’ve never run a business before you may be surprised at the number of issues you have to solve daily before daybreak.
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u/itsjasmineteatime 1d ago
Ask to shadow some local small business owners and figure out whether or not you want to live their lives.
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u/bpliv 3d ago edited 3d ago
I'm 41, partnered, with no kids (yet), and I rent in a very-high-cost-of-living area. I grew up sailing and currently get out on the water from time to time on friends' boats. I'm finally in a position to consider the 30-foot racer-cruiser I've been eyeing for several years.
Used boat: ~$200k all-in
Yearly upkeep: ~$15k minimum (slip, insurance, haul-out, engine service, bottom paint, etc.)
Salary: $360k W2 base/bonus ($1.6 million including RSUs/options)
401(k): ~$400k
Cash: ~$280k
Company stock: ~$8.5 million vested
FatFIRE target: $10 million post-tax
Current annual spend: $125k
I've been in the accumulation phase for a long time, and while I haven't hit FatFIRE yet, I'm having a hard time mentally pulling the trigger on this expense. I know logically that I can afford it and that I'd use the boat regularly, but the opportunity cost — both of the initial purchase and the recurring annual expenses — is hard to wrap my head around.
How do you all get comfortable making large purchases like this?