4 ms·

Avoid drastic moves. The older I get the more I realize most “drastic move” stories are bs PR pieces. Think how you can move in the direction you want to go i

Avoid drastic moves. The older I get the more I realize most “drastic move” stories are bs PR pieces. Think how you can move in the direction you want to go in steps. Move to a cheaper location: see if you can move to a satellite office or work remote. No, then look at other jobs you could interview at in the area you want to move to. Translate your FANG experience into a career jump. Then you will have experience and connections in the area, so if your business flounders you have options to fall back on and aren’t starting cold. Starting your business: find a job with better work life balance and lay the foundation for the jump in your spare time. Focus on the some money path vs. the a lot of money path. See if there are people in the area you move to who can help. Take steps and avoid jumps. But it sounds like you should start moving in this direction now so you don’t get so fed up at work that you make the move in a reactionary fashion. Good luck and godspeed!

deleted 9y ago
[deleted]
tachyonbeam 9y ago
I agree that drastic moves are not always wise. OP said they had 1.1M in the bank. If that money was invested in dividend stocks, they could have over 38K of passive income a year. In the US, dividend income is only taxed at 15%, too. They could opt to withdraw the 600K from the 401K, use that to buy a condo in cash, and live off the dividend income. Retire now, basically, and live a fairly comfortable life. It's not princely living, but if I had that option, I would seriously consider it. Having the freedom to do whatever you want with your own time, without the pressure of a job, sounds amazing. I think if I were in that position, I would end up doing something monetizable anyway, through hobby programming projects, but it would be so great to have the freedom to do it at whatever pace I want, and to get to pick what I work on. If retiring on 1.1M cash + 600K 401K doesn't seem like enough, then sucking it up and staying at the 500K/year job for 2-5 years more is also an option. Cut down on champagne a bit, delay the yearly car upgrade, and you should easily be able to put away 100K a year.
- shoo 9y ago
  > If that money was invested in dividend stocks, they could have over 38K of passive income a year. In the US, dividend income is only taxed at 15%, too. They could opt to withdraw the 600K from the 401K, use that to buy a condo in cash, and live off the dividend income. Retire now, basically, and live a fairly comfortable life. Yep, I agree. This is my first thought as well. I don't think it necessarily needs dividend stocks either, general stocks should do the trick. My back-of-the-envelope is: * expected return on investment from US stocks at current valuation [+]: ~6% * expected inflation rate: ~2% * expected real return: ~4% * assumed tax rate: 15% * annual investment return: (1100000 * 0.04) * (1 - 0.15) = USD $37.4k / year after tax Assuming you don't have a large family with many dependants or unusually high expenses (medical care, etc) it certainly sounds doable, but perhaps with a dramatic decrease in annual spend for non-essentials (overseas holidays, living in an expensive part of the country, etc). [+] Compared to historical prices, US stocks are currently very highly priced, hence expected real returns (~4%) are lower than historical average real returns (~7%). See e.g. http://www.philosophicaleconomics.com/2018/01/future-u-s-equity-returns-a-best-case-upper-limit/ http://www.philosophicaleconomics.com/2018/01/future-u-s-equ...
  - EADGBE 9y ago
    The 4% rule is a good one as it's (as you mention) much more likely. Also, if your withdrawal rate is 4%, the likelihood of you seeing that income until you die is much, much higher. As stated elsewhere, getting yourself down to spending 37k a year is going to be the hardest part, no matter where you live. The problem I see, time and time again as a bystander to the financial industry is that people simple aren't saving enough, or what they have saved is overspent at a rate that's unsustainable. If one needs to live off of 24k/80k/200k a year in retirement; then their investments should reflect that.
- spyspy 9y ago
  15% is for long-term capital gains. Dividend income is taxed at a much higher rate.
- notheguyouthink 9y ago
  > If retiring on 1.1M cash + 600K 401K doesn't seem like enough, then sucking it up and staying at the 500K/year job for 2-5 years more is also an option. Cut down on champagne a bit, delay the yearly car upgrade, and you should easily be able to put away 100K a year. Definitely. Decide how much a modest retirement is, and then hit that goal. If non-city dwelling is something you like, you can live far away from the city very cheaply. On top of that, I'd try to find ways to cheapen your life now. 500k/y is a lot, and while everything's relative, you could lower your standard of living and put away a ton of money in just a year or two, getting your goals faster.
Ritjert 9y ago
Excellent advice. Esp thinking ab how u can minimize risk as much as possible!

deleted 9y ago

[deleted]

tachyonbeam 9y ago

I agree that drastic moves are not always wise. OP said they had 1.1M in the bank. If that money was invested in dividend stocks, they could have over 38K of passive income a year. In the US, dividend income is only taxed at 15%, too. They could opt to withdraw the 600K from the 401K, use that to buy a condo in cash, and live off the dividend income. Retire now, basically, and live a fairly comfortable life. It's not princely living, but if I had that option, I would seriously consider it. Having the freedom to do whatever you want with your own time, without the pressure of a job, sounds amazing. I think if I were in that position, I would end up doing something monetizable anyway, through hobby programming projects, but it would be so great to have the freedom to do it at whatever pace I want, and to get to pick what I work on. If retiring on 1.1M cash + 600K 401K doesn't seem like enough, then sucking it up and staying at the 500K/year job for 2-5 years more is also an option. Cut down on champagne a bit, delay the yearly car upgrade, and you should easily be able to put away 100K a year.

shoo 9y ago
> If that money was invested in dividend stocks, they could have over 38K of passive income a year. In the US, dividend income is only taxed at 15%, too. They could opt to withdraw the 600K from the 401K, use that to buy a condo in cash, and live off the dividend income. Retire now, basically, and live a fairly comfortable life. Yep, I agree. This is my first thought as well. I don't think it necessarily needs dividend stocks either, general stocks should do the trick. My back-of-the-envelope is: * expected return on investment from US stocks at current valuation [+]: ~6% * expected inflation rate: ~2% * expected real return: ~4% * assumed tax rate: 15% * annual investment return: (1100000 * 0.04) * (1 - 0.15) = USD $37.4k / year after tax Assuming you don't have a large family with many dependants or unusually high expenses (medical care, etc) it certainly sounds doable, but perhaps with a dramatic decrease in annual spend for non-essentials (overseas holidays, living in an expensive part of the country, etc). [+] Compared to historical prices, US stocks are currently very highly priced, hence expected real returns (~4%) are lower than historical average real returns (~7%). See e.g. http://www.philosophicaleconomics.com/2018/01/future-u-s-equity-returns-a-best-case-upper-limit/ http://www.philosophicaleconomics.com/2018/01/future-u-s-equ...
- EADGBE 9y ago
  The 4% rule is a good one as it's (as you mention) much more likely. Also, if your withdrawal rate is 4%, the likelihood of you seeing that income until you die is much, much higher. As stated elsewhere, getting yourself down to spending 37k a year is going to be the hardest part, no matter where you live. The problem I see, time and time again as a bystander to the financial industry is that people simple aren't saving enough, or what they have saved is overspent at a rate that's unsustainable. If one needs to live off of 24k/80k/200k a year in retirement; then their investments should reflect that.
spyspy 9y ago
15% is for long-term capital gains. Dividend income is taxed at a much higher rate.
notheguyouthink 9y ago
> If retiring on 1.1M cash + 600K 401K doesn't seem like enough, then sucking it up and staying at the 500K/year job for 2-5 years more is also an option. Cut down on champagne a bit, delay the yearly car upgrade, and you should easily be able to put away 100K a year. Definitely. Decide how much a modest retirement is, and then hit that goal. If non-city dwelling is something you like, you can live far away from the city very cheaply. On top of that, I'd try to find ways to cheapen your life now. 500k/y is a lot, and while everything's relative, you could lower your standard of living and put away a ton of money in just a year or two, getting your goals faster.

Ritjert 9y ago

Excellent advice. Esp thinking ab how u can minimize risk as much as possible!