I have $2 million in stocks, mutual funds, exchange traded funds, $500,000 in retirement, and $250,000 in cash. No debt other than two properties worth about $300,000 each. One mortgage is almost paid off, and the other is still a long way off, but since it’s a rental property, I’ll pay for it myself. After her mother passed away, I own most of her family’s stock. It’s worth about $500,000, but I can’t get my hands on it unless the brothers agree to sell it.
I grew up in extreme poverty, so I started saving and investing at 17. I learned many hard lessons along the way, but I am proud to say that I became a self-made millionaire without the help of anyone, especially my family. . My net worth is $3 million and he just turned 43. However, after about 25 years of service, I have just received notice that I will be laid off in 3 months. I will receive a pre-tax pension of approximately $66,000. I’m married, but unfortunately that’s another matter. We have two young children, her 3 year old and her 1 year old.
So by the end of the year I was out of a job and was only in this neighborhood for work and would probably have to find a new home and move. Her wife wants to live in New York City, but she won’t get anywhere near the Big Apple for $3 million. I tried my best to make my children feel comfortable, but I originally planned to retire after five years. When she hits age 59 and a half, she can pull another $20,000 a year out of retirement, but that’s still more than a decade away from her.
At first, I was stressed and nervous about finding a new job and starting over. Should I just live on my dividend and her 4% interest, or should I continue with my stressful job and find another for a few more years?
lonely scrooge
Dear lonely Scrooge,
Earth – Population 4. Let me explain.
You’re making decisions for four people instead of one: you, your wife, and your two young children. By some estimates, the average cost of raising a child in the United States is $20,000 a year, not counting college costs. Assuming you’re donating to 529 tax-advantaged college savings plans, keep at it. If not, consider getting started. The longer you can keep your portfolio, the better the results. Stocks, like houses, are long-term investments.
Retiring early is possible if you’re on your own, but there are many factors that can affect whether you have a long and happy retirement. First of all, you said your marriage wasn’t exactly a happy one. If you and your wife were to live the rest of their lives together, it would probably make retirement easier, at least financially. If you get divorced, you may have to sell most of your assets. in fact, some studies suggest Divorced partners end up giving up more than half of their assets.
But there is a lot of good news here. You have two rental properties, a share in your parents’ house (your siblings may decide to buy you), $2 million in stocks, mutual funds, and ETFs, $500,000 in retirement, and cash. I have $250,000. Sure, many Americans would be happy to have that much before they retire. You’ve accomplished a lot by the time he’s 43, but don’t let the loss of your job discourage you. We’re not even in peak earnings season yet.
For those unfamiliar with this optimistic acronym of “financial independence, early retirement,” the reason you adopt FIRE is to spend quality time with your family. This may or may not have a positive effect on your marriage. And your children will start school soon. I suspect that people who have lived with a lot of money by the age of 43 will soon get bored and start to get restless after 30, 40, or more years of life await them. After all, there are only 18 holes on the golf course.
I asked Paul Karger, We asked the co-founder and managing partner of Boston wealth advisory firm Twin Focus about your predicament. “You have to balance this against the real risk that inflation will erode purchasing power over time and the portfolio will not be able to support personal spending,” he says. If not, the portfolio risk needs to elevate his profile beyond his comfort level. “It’s never a smart or sensible solution,” he says.
He also says he should grow his portfolio. Now he can earn more than 4% on long-term U.S. Treasuries, he added. “As interest rates on the longer end of the yield curve have risen for a variety of macroeconomic reasons, we have encouraged our clients to consider extending the duration of their fixed income portfolios. A healthy allocation to equities via ETFs should partially offset inflation, similar to real estate investments.”
This is a compromise. Why not take some time off from work and think about how you would like to use this time for your personal time and consider how to do so. Marriage counseling and the like are also possible, although they won’t solve everything in and of themselves. -Can you improve your marriage? Has your wife changed? Has it changed? Have you both changed? Are you both stuck in a rut? Did you have a good relationship from the beginning? Your focus now is probably on raising young children. Have we given each other enough time?
For example, taking a year off while applying for jobs and considering other business opportunities can also give you perspective on work-life balance. This is something that has been shared by millions of people since the pandemic. You might want to go back to college, or you might decide that your working life wasn’t so bad after all, and say: I want that life back. ”
You probably never thought the day would come when the $3 million man would be asked not to give up his job, but here it is.
Readers write to me with all sorts of dilemmas.
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