Delaying gratification has never been an issue for either of us. But, our current “plan” is self-imposed and somewhat arbitrary, so we are struggling. Technically, we could be done working at the end of the week and we would make it. I know this. Mr. PFL knows this. We realize that we have more money than we might be able to spend in our lifetime. We don’t need stuff, but crave experiences. But if we did just call it quits, how much would we restrict ourselves in the future? Would that cause more stress than it alleviates? Will I be more comfortable taking this risk at this time next year? How much will an extra year of working really change our position?
My head tells me that waiting is the right thing to do. My heart aches to move on. My gut knows that time=money and when we have more time on our hands, we won’t want to be restricted by a lack of money.
My immediate short-term goal is to compile a list of everything that needs to be done in order for us to live paycheck-free. The list will need to include, at a minimum, selling or closing my law practice, moving, health insurance, possibly power of attorney/estate planning, statutory agent for our LLCs, property management, a plan for our cat, a plan for our cars, and probably selling our house. It is like a graduation checklist; we just need to decide on our commencement date.
You should definitely wait another year and pay off some of that debt so your monthly expenses will be minimized. I’m in a similar boat as you guys w regard to net worth, but I can’t imagine trying to retire right now (even though I think about it!). I just keep thinking that if I give up a 6 figure income now I’ll probably never have it back, and I need more of a cushion to justify quitting in my 30s.
I read some of your older posts including the recent one on your Hawaii budget, but I’m still a bit confused about how you think you could generate $30K - $40K from your rental properties - and how even if you did you think that’ll be enough to live off indefinitely. $1500 or $2000 after fixed expenses seems like a lot, but it’s really not - especially if a health issue or need does pop up, or if you have a bad rental year. If you guys are going to keep working part time that’s one thing, but I’d want a bit more cushion either in expenses or cash…Even if you sell your house it will barely net enough to pay off the mortgage, student loan, and credit cards.
You’re assuming best case scenario of everything, but what if you quit, move, liquidate savings to buy land and build in Hawaii, and then the stock market drops 20% and you have trouble getting a tenant for a few months or have a major repair issue or fire or other rental calamity? I have faced them and had some terrible negative cash flow years, out of the blue - and that’s during good times not a major recession.
Hang in there it’s so tough when work is just not fun at all! Maybe split the difference and re-evaluate in 6 months.
Thank you for your insight. I’m with you for holding out as long as we can. I know it is highly unlikely that we would ever get such amazing income back again after we quit. But, as far as the rental income budget is concerned, I don’t think our numbers are that far off. I’ve been working on taxes and the gross rent from BD, the 6-unit, for 2014 was $29,895. The gross rent from the Condo was $25,968. That’s a total of $55,863 for 2014 when BD was only partially full for most of the year. BD should bring in closer to $40,000 this year and the Condo should bring in about $27,000, or close to $67,0000 total (this doesn’t include the extra income from selling the duplex). To get to our actual yearly pay-out from these properties, we are looking at worst-case scenario, assuming more than half of the income generated will go to expenses of some kind.
And then we still have a million dollars in case of emergencies. Maybe the stock market will tank for a while. Maybe we will have a health issue. We basically have a million dollar emergency fund. We also know how to work hard, take calculated risks, and live frugally. I’m probably always going to be apprehensive about taking the plunge to PayCheck-Free Living, but I’m committed.