Fall Update

This year is going by quickly!  Work has been pretty chill this summer.  Even if things pick up a bit, I’m only looking at hitting 1,600 billable hours at the end of the year.  I’ve taken a lot of time off, including bumming around at home, taking short trips, and longer trips including a two-week trip to Europe.  I would not use “frugal” to describe our mindset in the last few months.  For instance, in Europe, we spent around $7K *blush* even though we used miles for our flights to/from Europe.  It was great to immerse ourselves in different cultures, albeit for a short amount of time, and see how others live.  The highlight was definitely the food, ranging from hole-in-the-wall joints to fancy places (a combined total of 12 Michelin stars).

I’ve also renewed my interest in golf.  I haven’t felt this excited / enthusiastic about something in a long time.  The sport is expensive though, including cost of equipment, cost to practice (i.e., going to the driving range), cost of playing (i.e., greens fees), but I figure life is too short to limit my interests to things that are cheap/free.  I’m even paying a pro for a few lessons, despite being generally averse to taking lessons because I figure I can teach myself.  In this case, I really needed professional help and it’s worked wonders.  I’ve done my best to be frugal by putting together a minimalist set of clubs (7 total, rather than 14) and booking last-minute tee times using golfnow.com.

We also have a lot of weddings this year, which means spending a lot of money.  It’s hard to get away with giving less than $300 per couple given our friends’ incomes and how much they are spending on their weddings.  My wife is in one wedding and I’m in another.  She expects to spend $2K on her friend’s wedding due to all the crap the bride expects people to buy/participate in (e.g.,  bridal shower gift, bachelorette party at a foreign resort, bridesmaid dress, wedding gift, hair, makeup, etc.  Her friend is basically a bridezilla, although she probably wouldn’t admit it.  The same person decided to book a wedding venue two hours away from the reception site and circulated 12-pages worth of guidelines for the wedding.  I don’t think anyone really cares about her wedding as much as she thinks they do/should.

The increase in spending hasn’t really hit our net worth though.  The market has been good and my compensation has been solid.  We’re now closing in on a net worth of $1.4M, with an increase of $380K in the last year.  This will cover $40K of expenses at a 3% withdrawal rate.  Stated differently, if we were to spend what we spent in the last 12 months each year, we would have a 3.87% withdrawal rate.

But due to my lack of productivity this year, I’m anticipating a large decrease in compensation next year (~a $200K drop), but which can be totally overcome if I am productive next year.  In other words, my total compensation would not be that different if I was busy year after year or if I was busy and slow in alternating years.  Regardless, I’m hopeful wife’s income will go up a bit to offset the drop.  I can’t say I totally regret being slower this year because I’ve had a lot more free time and almost no stress.  The drop in compensation is making me yearn for FI so I don’t have to worry about these types of ups and downs.  It has been nice not having to worry about the expense side of things while the income side ticks like clockwork.  Though we don’t really have a definitive number in mind, I’m hoping I can coast to the finish line…

3 thoughts on “Fall Update

    • Kind of. $1.5M would cover $45K of spending at 3%, which is just under what we’re liberally spending now. But there’s no buffer. To provide such buffer, we would likely have move out of our area to a more affordable area and forgo having kids. Not sure we’re comfortable with second point yet, so might increase our target to give ourselves that option in future. NW is going up by a lot right now and work is pretty chill now so we’ll see.

  1. Great job; you’re where I hope to be in a few years, in terms of net worth! I hear you on golf lessons. I play casually, and my girlfriend’s a collegiate golfer, so I can say from experience it’s best to have a pro help you out, rather than try and teach yourself it all. There’s only so much we can do without help. I literally just found your blog, but you’ve earned another subscriber. All the best!

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