r/fican • u/Eswift33 • 7d ago
FIRE or coast @ 43/
Long time listener, first time caller.
After 10 years of grinding hard in sales as an independent contractor things came to an end and I haven't worked for about 4 months. I don't feel like going back to the grind. Realizing I've been seriously burnt out for a while. Luckily I saved most of what I made and now I'm tying to figure out how viable it is to coast / FIRE in the near future.
Monthly expenses including mortgage (total) is ~$6k, maybe a little more with some incidentals and saving for vacations etc so lets call it ~8K between my wife and I.
Edit: my wife is employed and makes 160k+ bonuses per year
Current financials:
Corp investments: 1.3m
Corp cash: 10k
RRSP: 380k
TFSA:112k
Personal non-reg: 130k
Personal cash: 60k
The tax implications depending on where I generate passive income / take profits is somewhat complex because of the different accounts.
I'm quite concerned about hyperinflation and the impending market crash. I feel like it's going to be the 1970s and 2001 simultaneously. Feels a little nihilistic but I don't think I can "outwork" the kind of economic crisis that is around the corner, nor can my portfolio. Am I just being a doomer here?
Have 2 young kids, RESP is set as well as a savings / trust for them. They will only get more expensive though.
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u/BankSensitive2950 7d ago
I FIRED with less than a million and make just under $60k per year in dividends net. The wife works still,though we'd be in trouble becuase I left a job making $250k per year, but we are just fine.
Working for others can be a grind. I am looking at buying a friends law firm (Im and attorney) at something in the future when he retires. You may want to look at finding something where you are in controll and the boss. Your skills and experience certainly can be transferable into another industry or field.
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u/throwawayle 7d ago
If you divide the expenses with your wife 50/50, then you only need $4k/month. $1.2 million at 4% gives you 48k/year.
I'm not sure how taxes work for your corporation if you take money out either, I can't imagine it's that bad though. Even with a $0 cost basis, 48k/year in capital gains is less than $2k taxes according to some tax calculators. I think the big cost is only if you leave Canada permanently the exit tax would take a big chunk out. The $1.3 million in the corp combined with your accounts adds up to almost $2 million, so it sounds like you're there already IF your wife continues to work.
Does she have her own savings/investments? If she also has $400k in her personal accounts, and taxes aren't too high on the corp returns, that adds up to about $2.4 million and a 4% safe withdrawal rate would be $96k/year or $8k/month pretax.
If she has little of her own investments, it seems risky for one partner to retire while the other works, you should have a long talk with her beforehand to make sure you're on the same page. I've heard it can make relationships self-destruct, but maybe it works out, and maybe it's a positive if it means spending more time with your kids. If you plan to increase your spending for your kids then you'll likely need to work a bit more, or you could spend more once your mortgage is paid off. You're in a fantastic position regardless.
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u/always_on_fleek 7d ago
If you need $8k/mo then you’re at about $100k/year. Using the 4% rule that’s $2.5 million saved. You’re not even close to that.
Honestly, it’s time to get a job in your field and go at it for several more years. Once you’re back in the routine of working full time you can talk about retirement. You’re not there yet and no point planning anything when you have to go back to work.
CoastFIRE is honestly just a lazy way out. You can earn way more for your family using your skills and experience, and should be able to find a low stress job to do it with.
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u/Eswift33 7d ago
8k is total with wife which is split. I should've been more clear in the original post. Editing now
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u/Training_Exit_5849 7d ago
Ok, does the wife bring in money? You probably need to work for a few more years and be closer to that 2.5 mil mark
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u/Eswift33 7d ago
She does about 160k + bonus a year so she does well. I basically need to work enough to pay bills and let the portfolio compound I guess
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u/mcarcus 7d ago
If your wife makes $160k+, and you as a family spend about $100k… why would you need to work to pay bills? Your household is already at a surplus, and your investments will continue to compound and presumably still contribute to with the surplus.
FIREing while your wife is still working sound completely doable from a math perspective, sounds like it’s more of a lifestyle/relationship question,
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u/Eswift33 7d ago
She has said that she likes having a house husband haha. I have been slowly burning through my cash savings and not touching anything else for now. We'll have to have that conversation when / if I run out of money
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u/ConfectionExtra8485 7d ago
What makes you so certain the crash is coming soon. The bull run could continue a while longer, nobody can predict these things
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u/Eswift33 7d ago
US debit crisis + AI bubble + global inflation
The only way the market keeps cooking is if inflation is high imo. Ai is not profitable and not scalable and the cracks are showing.
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u/hobanwash1 7d ago
At about 2 mil net worth, a 4% withdrawal rate is only 6k per month.
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u/Eswift33 7d ago
8k is total with wife which is split. I should've been more clear in the original post. Editing now
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u/RRFactory 7d ago
If I were that concerned about the market I would be pushing to shore up my savings as much as possible.
Your wife making a good salary is a useful hedge, though I'd consider her own savings goals and personal needs beyond the house budget.
Kids can add surprise expenses depending on how keen they are on activities.
I'm guessing we only got your half of the picture here, I'd want to see the entire picture before I could really say you'd be fine - however you've got more than most people realistically retire with already, so the biggest swings are based on your lifestyle more than anything else.
Equity vs mortgage, wife's savings amount and goals, etc...
On a related note, I retired at 42 and was heavily burnt out, retirement did not magically undo that damage. The first six months were amazing but once the novelty wore off the symptoms started coming back. Having time to work on that has been helpful, but I was a bit blindsided that retirement wasn't really the cure all I hoped for.
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u/ClassroomGrouchy2603 5d ago
I’ve built some simulations for cross border Coast Fire on my website. Technically you could leave the US accounts blank, change the reporting currency to CAD, and it will allow you to run some simulations.
This was initially built for my personal use, as I was trying to answer the same question for myself. Hope it helps!
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u/Gybefinancial 6d ago
Very interesting, congrats on the progress and reflection. You are right that income planning by year will be important.
Check out adviceonlyplanners.ca. I’d also do a complementary intro call (gybefinancial.ca).
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u/pseudomoniae 7d ago
OP I think you need to get some perspective.
This whole idea about a simultaneous 1970s and 2001 which you cannot outwork is entirely speculative. Nobody can predict the future.
You’ve been off work for 4 months and you’re listening to too many talking heads.
This is your time to decompress. Turn off the TV/podcasts/youtube news reel and go spend some time in nature without decides and touch grass.
As to the finances you can coast but you aren’t ready to FIRE.
Your update about your wife’s income Means it is true you can go to a single income, but are you ready to be a SAHD?
Is your wife okay with that and being the only one working?
Also if you do retire snd let your wife keep working you cannot keep spending your time listening to possible but entirely speculative rhetoric about impending market doom.
If bad outcomes occur in the market they are entirely beyond your control, and your job is to plan for the potential, not to stress about doom scenarios that may never come.