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|Subject: On our way||Date: 11/3/2006 2:45 AM|
|Author: TourDeFarce||Number: 3876 of 5089|
Recently I began tallying up our finances to check and see just where we are with respect to FIRE. Here's our story....
My wife and I both married for the first time at age 45. She had some school debt (still in four figures) and a 403(b) from a prior employer. I had a 401K, Roth IRA, IRA, and home equity. After marrying, we paid off all her student debt (to relatives, mostly, a little to govt) right away so we'd be free and clear of all debt other than the house.
She spent about two years finishing up her dissertation and working as an adjunct before landing a full-time job teaching. We then cranked things up and maxed out IRAs (for both of us) as well as her 403(b) - for the new employer - and my 401(k). I also purchased stock at a discount through my employer.
Fast forward about 5 years. I began going to grad school at night to earn a certificate and was really enjoying school. Conditions at work were getting less and less enjoyable. For the first time I looked at what I was doing and didn't see it leading to enjoyable tasks and a promising future. GIven taht I could attend grad school tuition free (courtesy of my wife), we ran the numbers and figured I could just quit. Unlike some who step out of a job into the abyss, I felt like I stepped out of a cage into an opportunity. It's now been almost two years since I began grad school and just about a year and a half since I left work. Straight A's, with only one B so far and I'm on track to graduate in August.
During this interim period while I'm not working, we're cutting back and managing to live mostly on DW's salary and benefits. We dip into savings as needed, but that's not such a big deal. (Truth is, we were seeing so many cuts at my company that we decided to keep a very large e-fund just in case.) We still contribute to my wife's 403(b) as we get some free matching funds for it, but otherwise we're shuffling money from our liquid accounts to IRAs as time goes on. Once I get working again, we'll crank up her 403(b) contributions. (I will attempt to land adjunct teaching positions and those don't pay much.)
Our lives are much happier now. As the "stay at home" I handle the vast majority of the daily duties and such as I can pretty much do homework whenever I want, with my only "fixed" time committments being attending class in the evenings. DW loves her job, is advancing, and should get tenure in another couple of years. This'll give us the security of benefits as well as giving us a steady income.
The financial planner we work with says we should be millionaires by the time we reach 60, but he only sees part of our portfolio -- not the company stock I own or either of DW's 403(b) accounts. In fact, looking at the numbers I ran the other day we may make get to that million in another 3 years, although ~10% of it will be in the form of home equity. Our home is on a 7 year balloon at 4.5%, meaning that in 2009 we can choose to accept terms from the current mortgage company, finance elsewhere, or just pay it off (and - yes - we'll have the money to do that too!).
The shame of all this is that my wife earned a very meager salary most of her life and had virtually nothing saved until we married. I, on the other hand, was a good saver but knew nothing about investing. As a result, I missed out on some great markets over the past decades. I also guess that marrying late meant that we doubled up on some expenses which, if we had been married, could have resulted in even more savings.
If asked, "What's your secret?" I wouldn't have much to say. DW and I came from families with very modest means, me more so than her. But maybe it's not what we *did* that made the difference but what we *didn't* do in our lives. Neither of us had a passion for new, fancy cars and bought used. While others went on ski trips and travelled to far off places, we didn't but used our respective jobs to enjoy travel. The latest fads and such didn't appear in our closets, while some clothes lasted season after season. (The sweat pants I'm wearing right now are at least ten years old.)
I've heard people argue over what constitutes