[USER]

I want to see how far we are away from our FIRE goals. My kids are young (baby and 4yo) and we have high paying demanding jobs. We are 36 & 40.

I personally want to spend more time with family when kids are still young.

Any advice? If/when we will be ready for FIRE?

Annual budget $240k ($12k per month for a owned house; planning to send kids to public schools).

Annual income $600k+ from my spouse and I. My salary is $400k. Our family lives in a good school district in San Diego.

Assets of $6.4M ish family net worth:
– $3M home with $1.1M equity.

– $2.6M rental home with $1.4M equity (planning to sell soon because of the negative cash flow and will move the equity into index funds)

– $190k in 529 saved for the older kid; planning to superfund $190k for the younger kid after the above house sale.

– $1.1M in GOOG and $600k in META (mostly RSUs with low cost basis)

– $1.5M in retirement accounts (401k, Roth IRA)

– $750k in brokerage accounts (mostly invested in ETFs and Mag7)

– $80k cash

[Sean]

Once you takeout 529s primary equity and transaction costs etc you’ll probably have around 4.3 million invested.

Presumably you lived in the rental 2 out of the last 5 years since you said you won’t owe capital gains, you will have some depreciation recapture but since it hasn’t been rented for long it likely won’t be too much.

I presume you don’t include taxes in your expenses so you’d need 6 million after tax to be FI. If all of the money came from pretax sources that’s 8.75 million to be FI.

You are a little over halfway considering a significant portion will be taxable and some portion should be Roth accounts.

Keep in mind that you have a significant portion in individual stocks so it’s impossible to give any type reasonable estimate for returns going forward.

But assuming you continue to contribute 20k per month to investments and assuming you get the historic median return (no reason to believe this based on your portfolio but it’s a starting point) after accounting for inflation you’ll be FI in 7 years.

Less if you’re able to cut expenses or reduce the tax burden more if your individual stocks underperform historic market returns.

[John]

I’m pro-‘stay at home to raise young children’ if it can be easily afforded, but you, the one who wants that more, make 2/3 of the hh income.

So, I would instead use the ‘flexibility’ in your jobs to make more time for the kids, but keep pushing through for at least a few more years, sell the rental property and put that money in ‘don’t have to think much about it’ investments.

[Russell]

Common advice is you need 25x your annual expenses to allow for a 4% withdrawal rate. So, you need $6M. That’s not net worth, it’s only in assets you can spend.

A paid off home reduces your monthly costs so reduces the total needed.

Don’t count the 529 accounts. That’s your kids’ money now, not yours.
After taxes and putting money from the sale into the 529, you’re at about $4.4M.

Assuming your budget numbers are accurate, you can put aside $30k per month into investments.

If you do so, and the market averages 10% per year, you should have about $6.1M in two years.

Assuming only you stop, you’d only need to pull out $40k/yr instead of $240k, so your portfolio would keep growing even without you working.

TLDR: sell the negative cash flow house, put it in index funds and you can likely both retire in two years.

Or just you retire in two, and spouse works a couple more to build a larger cushion but knowing they can quit any time they want.

[Author]

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