Am I going nuts? or is it midlife crisis?

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Age 32.75, married with 2 YO kid
HHI ~ $205k/year.
I work for the government, I do not see any promotions or big raises anytime soon! Got advise from FW favoring to stick along the job
Both H and W possibly might earn a pension about 50% of 3 high years of pay (the % increases as we stay longer, max 75%), if state pension system exists after 20 years!
---
NW as of now:
Retirement                 $352k    
non-ret accounts        $139k
Cash                         $164k    
Education                  $17.5k    
Rental Equity             $90k    
--------------------------------------------
Total                        $763k    ex primary home equity about $40k
--------------------------------------------
Debts: Two mortgages - $301k @ 4%, 25 years left.
Car loan - $29k - 0% 57 months left

I saw my dad live the same life, very frugal, steady white collar job, good investments, saved up few millions, 
In 2009, abruptly died at 51 of natural causes, quiet healthy, sudden pneumonia.
He worked till the last day of his life, postponing gratification for later, which never happened!

I have been living the FW way of life since age 20, like my dad. Cut corners and do everything to save money. 
I also had a fiscally conservative approach for everything in life until I turned 32! (Did I have mid life crisis?)

I splurged! (made sure our savings stays the same and retirement accounts are filled up to max)

1. Bought a brand new Toyota SUV for $40K (my 1st new car ever)
2. Started spending time and money on my hobbies
3. Photography - got my favorite Cannon DSLR and Sigma lenses - $3.5k
4. I am into collecting pre-1900 graded gold coins - brought several coins - $40k  (can hold for appreciation, else break even), took a pause after $40k, enjoyed every bit.
5. We traveled UK, Spain and Portugal - $11.5k
6. We like home improvement - spent $10k, to enjoy backyard and kitchen.
7. Started buying organic and high quality food (for kid) which is $150/month more
8. Started enjoying simple luxuries: buying quality products, small seat upgrades, pay for lounges, stay in decent hyatts when travelling etc!
9. Got a $1.5 mil 20yr term policy for both of us! (700/yr premium)

I am realizing few things:
What's the point of cutting corners in life and where does it end?
I have just 1 life and if I don't enjoy it, I might leave this earth like my dad, with no gratification!
Death is scary, nobody knows when it comes! 
Enjoy life! at the same time being cautious and little less frugal is what I feel is the balance

Not sure if I have gone nuts or is just immature / over confident or both/all?
Am I going through mid-life crisis already?
I have not stopped savings (still save 50% of pay), but just instead of increasing the savings, I am spending it.


What are your thoughts?

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A Toyota SUV is not a mid-life crisis car.

There was once a businessman who was sitting by the beach in a small Brazilian village.
As he sat, he saw a Brazilian fisherman rowing a small boat towards the shore having caught quite few big fish.
The businessman was impressed and asked the fisherman, “How long does it take you to catch so many fish?”
The fisherman replied, “Oh, just a short while.”
“Then why don’t you stay longer at sea and catch even more?” The businessman was astonished.
“This is enough to feed my whole family,” the fisherman said.
The businessman then asked, “So, what do you do for the rest of the day?”
The fisherman replied, “Well, I usually wake up early in the morning, go out to sea and catch a few fish, then go back and play with my kids. In the afternoon, I take a nap with my wife, and evening comes, I join my buddies in the village for a drink — we play guitar, sing and dance throughout the night.”

The businessman offered a suggestion to the fisherman.
“I am a PhD in business management. I could help you to become a more successful person. From now on, you should spend more time at sea and try to catch as many fish as possible. When you have saved enough money, you could buy a bigger boat and catch even more fish. Soon you will be able to afford to buy more boats, set up your own company, your own production plant for canned food and distribution network. By then, you will have moved out of this village and to Sao Paulo, where you can set up HQ to manage your other branches.”

The fisherman continues, “And after that?”
The businessman laughs heartily, “After that, you can live like a king in your own house, and when the time is right, you can go public and float your shares in the Stock Exchange, and you will be rich.”
The fisherman asks, “And after that?”
The businessman says, “After that, you can finally retire, you can move to a house by the fishing village, wake up early in the morning, catch a few fish, then return home to play with kids, have a nice afternoon nap with your wife, and when evening comes, you can join your buddies for a drink, play the guitar, sing and dance throughout the night!”
The fisherman was puzzled, “Isn’t that what I am doing now?”

No, you aren't nuts. You can't take your money with you when you die, so why not spend it on stuff.

If you're saving 60% of your pay and are on track to have a pension- I'd say you're doing well. Go crazy with the rest.

Your finances are in great shape. I am almost exactly your age and my wife and I have similar numbers (I have less in investments and more equity in my home - otherwise the numbers are eerily similar).

I wouldn't worry about this. I'm actually sort of in the same spot philosophically as well - I drive a 10 year old car that I bought brand new in 2007 and I've got the itch to get a new one that better meets our needs at the current time. We are remodeling our bathroom this year to get rid of the builder-grade cheapo stuff and put something nice in there. We have cash to pay for these things and we still have plenty of money left over.

You seem responsible and thoughtful. You have ample savings, are continuing to save, and aren't ringing up debt to do any of this. Cut yourself some slack and enjoy.

TravelerMSY said:   If you're saving 60% of your pay and are on track to have a pension- I'd say you're doing well. Go crazy with the rest.
Did math on savings rate its ~50% of total pay, 60% of take home.

It's about balance. And, if you are like the rest of us, living in the first world with an uneventful life. You will experience mid-life (or whatever) you call it crisis.

..

then you die.

Stop worrying too much, live a bit, within reasons, which you are.

WalletFatKing said:   
I am realizing few things:
What's the point of cutting corners in life and where does it end?
I have just 1 life and if I don't enjoy it, I might leave this earth like my dad, with no gratification!
Death is scary, nobody knows when it comes! 
Enjoy life! at the same time being cautious and little less frugal is what I feel is the balance


 

  
I think you got it! There is one part that I will add - you enjoy things like vacation when you are younger and healthy versus really old and not having energy to  enjoy all parts of the vacation. Additionally, your kids get exposure to the world which I think is great (though in your case, the kid is really small to benefit).

One thing to be just careful about how far you swing the pendulum in the other direction since it is not clear if you are in a job that you don't really like. If you don't like the job all that much, I would make sure that my savings plan lets me retire early from job.
 

164k is a lot of cash.

?? I have not stopped savings (still save 50% of pay), but just instead of increasing the savings, I am spending it ?? If you are spending it, you aren't saving it? What am I missing?


So you are saving ~100K/year?
205K - taxes (30% - federal, ss, medicare, state ) - 100k (saving) = 40k/year for living expenses??

Can't really blame you, since you make a ton of money, your retirement is set, and you might even get some of what dad left.

The coin collection is an asset -- did you include the value in NW? I'm guessing mostly gold? Don't make the mistake of assuming that they are guaranteed to hold value or appreciate -- nothing is guaranteed. Even graded coins move with the price of metal, especially if they are not extremely rare (and yours probably aren't). They could probably also move with discoveries of sunken or buried treasure (it happens).

The SUV was a terrible decision... for $40K I would have waited for the Model 3. I also wouldn't upgrade airplane seats unless you're > 6'2", or overweight, in which case I'd lose the weight. No reason to pay for lounges, just get a credit card with Priority Pass like CSR.

Everyone has their own priorities & hobbies. It sounds like the things you've chosen to spend on are totally reasonable given your income & savings. And, your level of spending won't throw your retirement plan off track.
If you had come here saying you bought a Ferrari and $2MM house, we'd all be telling you that you've lost your mind and gone too far.

Your "splurges" are what regular people with disposable income spend their money on (other than the coins maybe). You are easily in the top couple percent for net worth given your age is there a real question here or what?

You have decided you don't want to be the richest person in the cemetery. Your died dying young obviously influenced that, but proper finance does not mean being frugal to the point of not spending money because you are worried you'll need that $20 in retirement. For the super frugal FIRE people spending as little as possible is a hobby in of itself. Enjoy your money man you are still saving plenty.

Treffen said:   164k is a lot of cash.
Yeah, probably too much to have uninvested.  

BADADVICE said:   There was once a businessman who was sitting by the beach in a small Brazilian village.
As he sat, he saw a Brazilian fisherman rowing a small boat towards the shore having caught quite few big fish.
The businessman was impressed and asked the fisherman, “How long does it take you to catch so many fish?”
The fisherman replied, “Oh, just a short while.”
“Then why don’t you stay longer at sea and catch even more?” The businessman was astonished.
“This is enough to feed my whole family,” the fisherman said.

 Considering the water quality on Brazil coasts , I call bs on this story. It's enough to feed his family because they'll be dead soon anyways?

There's more to Brazil than Rio.

Funny how this works out. I am 31, similar numbers but I have my habits that I balance out. 

Bottom line is, I'm hitting the goals I've set myself (net worth by age 35 - should hit it a few years early hopefully) so I'm trying to enjoy life while ensuring my family will be taken care of in the event something happens. 

 

have more kids, you can die happy knowing you won't have to pay for them anymore

Nice blog, bro.

WalletFatKing said:   Age 32.75, married with 2 YO kid
HHI ~ $205k/year.
I work for the government, I do not see any promotions or big raises anytime soon! Got advise from FW favoring to stick along the job
Both H and W possibly might earn a pension about 50% of 3 high years of pay (the % increases as we stay longer, max 75%), if state pension system exists after 20 years!
---
NW as of now:
Retirement                 $352k    
non-ret accounts        $139k
Cash                         $164k    
Education                  $17.5k    
Rental Equity             $90k    
--------------------------------------------
Total                        $763k    ex primary home equity about $40k
--------------------------------------------
Debts: Two mortgages - $301k @ 4%, 25 years left.
Car loan - $29k - 0% 57 months left

I saw my dad live the same life, very frugal, steady white collar job, good investments, saved up few millions, 
In 2009, abruptly died at 51 of natural causes, quiet healthy, sudden pneumonia.
He worked till the last day of his life, postponing gratification for later, which never happened!

I have been living the FW way of life since age 20, like my dad. Cut corners and do everything to save money. 
I also had a fiscally conservative approach for everything in life until I turned 32! (Did I have mid life crisis?)

I splurged! (made sure our savings stays the same and retirement accounts are filled up to max)

1. Bought a brand new Toyota SUV for $40K (my 1st new car ever)
2. Started spending time and money on my hobbies
3. Photography - got my favorite Cannon DSLR and Sigma lenses - $3.5k
4. I am into collecting pre-1900 graded gold coins - brought several coins - $40k  (can hold for appreciation, else break even), took a pause after $40k, enjoyed every bit.
5. We traveled UK, Spain and Portugal - $11.5k
6. We like home improvement - spent $10k, to enjoy backyard and kitchen.
7. Started buying organic and high quality food (for kid) which is $150/month more
8. Started enjoying simple luxuries: buying quality products, small seat upgrades, pay for lounges, stay in decent hyatts when travelling etc!
9. Got a $1.5 mil 20yr term policy for both of us! (700/yr premium)

I am realizing few things:
What's the point of cutting corners in life and where does it end?
I have just 1 life and if I don't enjoy it, I might leave this earth like my dad, with no gratification!
Death is scary, nobody knows when it comes! 
Enjoy life! at the same time being cautious and little less frugal is what I feel is the balance

Not sure if I have gone nuts or is just immature / over confident or both/all?
Am I going through mid-life crisis already?
I have not stopped savings (still save 50% of pay), but just instead of increasing the savings, I am spending it.


What are your thoughts?

  A 32 year old married to a 75 year old?

atikovi said:   Nice blog, bro.
  This is one of those male body part comparison/brag posts

OP Enjoy your life, we don't know when it will end! It is one thing if you were living paycheck to paycheck or not thinking of kids education or retirement or saving for a rainy day! You are doing all that, so don't sweat it! Toyota SUV is not a midlife crisis car. And 32 is not exactly midlife Wait till you hit 40s and 50s like the rest of us

Money doesn't own us, we own it! If it brings comfort and happiness to you and your family, you are doing it right! Don't worry about it and congratulations on starting this a lot sooner than I ever realized and did!

I will say this is midlife crisis ... it is of the type "full pocket make you dance".

my thoughts are we accumulate wealth for future unknowns (health issues, kids education, etc-etc) ... but these unknowns may not happen (like your father's case)

Stop tracking your balances/bank accounts too frequently

vrovner said:   ?? I have not stopped savings (still save 50% of pay), but just instead of increasing the savings, I am spending it ?? If you are spending it, you aren't saving it? What am I missing?


So you are saving ~100K/year?
205K - taxes (30% - federal, ss, medicare, state ) - 100k (saving) = 40k/year for living expenses??


Most savings are pre tax on 457s and 401a's, both spouses do not pay SS and Medicare as its covered by state retirement system, we live in a state that does not have income tax.

As a fellow 32 year old I am jealous of your massive scrooge mcduck vault of $ you got saved up. Enjoy your toyota soccer mom van.

qcumber98 said:   A Toyota SUV is not a mid-life crisis car.

Buying a reasonably large term life insurance policy doesn't count as mid life crisis either.

Maybe you can take a look at this backyards, and make it sorta quantifiable.

Ask:
If I die at 90, have I done this by 89 88, 87...? 
If i die at 89, have I done this by 88, 87, 86...?

Take a look a a few scenarios of when you might die, then pick the one that you like.  
Then, figure out if you have achieved the mental/financial/material status you want to be at.  
If you have too much saved/invested and not enough hobbies or home improvements done, then you're out of balance.
Make adjustments accordingly.

Save a few more years and early retire.

You're doing great!

solarUS said:   Treffen said:   164k is a lot of cash.
Yeah, probably too much to have uninvested.  


Except for this 165k, everything is in stocks and bonds and some 10% in PM.

Any good ideas how to intelligently diversify and invest this 165k or even 100k?

My coin collection is worth at least $50k (liquidate price as of now) outside of these numbers.

"Any good ideas how to intelligently diversify and invest this 165k or even 100k?"

How about a mutual fund?

https://personal.vanguard.com/us/funds/snapshot?FundId=0521&Fund...

qcumber98 said:   A Toyota SUV is not a mid-life crisis car.
You mean a 21st century station wagon doesn't qualify?    

You could put 100K of that into VTSAX or similar with Vanguard.

Not one mention of your moral responsibilities to you wife or the education of your children.  Stop thinking about your mid-life crises and start investing some of that inheritance before it is spent or its value erodes to inflation.  If this is an example of manly introspection, I'll need to take a better look and Madonna's life initiatives. 

wentforit said:   Not one mention of your moral responsibilities to you wife or the education of your children.  Stop thinking about your mid-life crises and start investing some of that inheritance before it is spent or its value erodes to inflation.  If this is an example of manly introspection, I'll need to take a better look and Madonna's life initiatives. 
  I have $0 inheritance. After my dad, it's my mom's own, not mine. Every dollar you see on my net worth is earned by two spouses.

  I did not bring up school and education of our toddler because, it might derail the subject. I have had other threads I have posted on those lines in the past.

  Flame me, but we are planning (not decided) to send out toddler to a private school which is $20k/year. Our city does not have quality schools in any neighborhoods including the $1Mil+ neighborhoods. Ok, lets get back to the subject. Thanks.
 

RJG said:   There's more to Brazil than Rio.
  You would feed your family fish from brazil's coasts?

My friends brother just recently passed at age 37, massive heart attack. No family history, not overweight and was a basketball coach. Enjoy life.

Raistlin said:   My friends brother just recently passed at age 37, massive heart attack. No family history, not overweight and was a basketball coach. Enjoy life.
  So , did the doctors say why he had a heart attack?

BADADVICE said:   There was once a businessman who was sitting by the beach in a small Brazilian village.
As he sat, he saw a Brazilian fisherman rowing a small boat towards the shore having caught quite few big fish.
The businessman was impressed and asked the fisherman, “How long does it take you to catch so many fish?”
The fisherman replied, “Oh, just a short while.”
.
.
.
The fisherman was puzzled, “Isn’t that what I am doing now?”

I've read this story before and I always love it. The only difference was that it was on the shores of Mexico. The key of this story is that not to follow what others think is success. Sometimes what you have may already be the goal in life for others. 

Skipping 71 Messages...
I think you will like The 4-Hour Workweek Book by Timothy Ferriss. He is talking about New Rich and how to be one, which is in line in what you want. It's about integrating your retirement throughout your life. It changes perspective without changing who you are. I read it periodically to stay on top of my "why" in life.



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