With a net worth of $2.5 Million in their mid-forties and a strong pension coming their way, I’d say today’s Crossroads interviewees are in a sweet spot.
Why then, does he continue to work full-time when he doesn’t have time to do the things he enjoys? He does have plans to change this in the future, but he feels he’s reached a crossroads and could benefit from some reader input.
I want to thank our anonymous author for his past and continued military service. While he does occupy a sweet spot now, he and his family have undoubtedly made countless sacrifices to be in the position they’re in.
Getting to Know You
Where are you on your financial independence journey? Have you crossed the halfway point in terms of net worth and/or passive income?
This is a little challenging for me to answer. I would say we are “near” FI. I could probably stop my full time regular employment tomorrow, but we would have to significantly alter our lifestyle, including moving to a lower cost location.
This isn’t something my family is willing to do, even if it means I never have to work again. I think we have definitely reached the halfway point; although, this does bring up an interesting consideration.
We haven’t really set a specific number to “hit” in terms of FI/RE. My goal is to know I have enough to continue working on my own terms. I hope to work part-time with no weekends, holidays or nights in the relatively near future. I like my job, just not those aspects of it.
Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?
I am 44 M, wife 43 F and we have one 9 year old child (4th grade). We live in the upper Midwest in the suburbs of a major metropolitan city.
We do not have a responsibility to financially support anyone outside our household. Both sets of parents and our respective siblings are alive and require no financial support at present.
I would be remiss if I did not mention my wife and her impact on our path to FIRE. She has her masters degree and was in the workforce until our child turned 6 months old.
During her working years, she earned a solid income and a good portion of our net worth is due to both her earnings, and maybe more importantly, frugal lifestyle. I once saw a quote that said “I married a goldmine…my wife is frugal.” This is absolutely true for me.
More importantly, my wife is undoubtedly the CEO/COO of the household. Without her our household would completely collapse. She handles nearly all the daily operations for our family. She keeps a meticulous schedule and makes sure we are all in the right place at the right time.
Her support, patience and understanding are certainly a major factor in what we have achieved thus far. I think we make an excellent team and I am so fortunate to have her as my partner.
In what field are you working? How is your career going? What do you like best and least about your chosen profession?
I am a full-time private practice radiologist. I am a full partner at a large PP group. I have been with my current group almost 4.5 years. Prior to joining my current group I was active duty military.
My entire medical training and career was on active duty until I separated in 2017. I continue to serve in the Reserves, which comes with both its challenges and benefits. The Reserves has a fairly significant time commitment, on top of an already busy full time schedule, which has been challenging to navigate.
On the plus side, the eventual pension and healthcare benefit will definitely aid us in reaching FI much faster. In exchange for my precious time and risk of mobilization/deployment, the Reserves have provided an insurance policy of sorts in terms of financial security.
Do you feel you’ve come to a crossroads of sorts? If so, tell us about it. What options are you contemplating?
Yes, I do feel we are at a crossroads. We have a very healthy net worth for our age (2.5M+). This includes all investment and retirement accounts and our home equity. It does not include my future pension or health care benefit.
We built our dream home in 2019 and do not regret it one bit. After moving countless times while being the military, it was our splurge. We put a hefty amount down (>20%) and did a 15-year mortgage. In conjunction with the payments we have already made, and the upswing in housing prices, there is a significant amount of equity in our home.
On the flip side, the mortgage payment is really the only thing that is keeping me from going part-time. We live a fairly frugal lifestyle for my income. The mortgage is really our only major recurring expense.
My group does offer different options in terms of vacation and time off. In one scenario, you can remain a partner but work 4 days/wk and take less set vacation weeks/time. The 4 days per week worked are not set and can change from week to week. This is the model I would like to move to next, and I asked to transition in 2022, but our current staffing situation cannot support it.
So, I plan to move to this model starting in 2023. In order to take even more time off, and/or not work holidays/weekends/nights/call, you are required to give up your partnership and become an employee. This is what I plan to do after I am certain we have “enough.”
My current plan is to convert to an employee around the time I turn 50 and never work another weekend, holiday, or night shift. At that point, I will work part-time for as long as I desire, maybe another 10 years when my military pension and healthcare coverage kicks in at 60. I will probably end up in the enviable position of VeryFat FI/RE (not sure if that’s a thing). [PoF: Some call it moFIRE, as in, morbidly obese FIRE]
How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
I keep things very simple. I am currently approximately 80/20 stocks/bonds in my retirement accounts. For our taxable account I am nearly 100% stocks (R-E-L-A-X, this is not a primary retirement account for us, see below).
We have substantial equity in our home and a rental property we own from when I was in the military. I do not hold any alternative investments such as crypto. This might be a mistake, but I am comfortable staying on the sideline for now.
Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?
For our investments we are roughly 50% taxable, 30% deferred and 20% Roth. The taxable and deferred balances are increasing quite rapidly, Roth not so much.
[PoF: This may represent an opportunity to move to assets with greater potential for appreciation in the Roth IRA.]
Do you have investments in an HSA? How about 529 Plans?
Both. We max out our HSA every year. We contribute up the maximum for state tax deduction to a 529 for our child. Our child may not need the 529 plan at all, as I was able to transfer my full GI-Bill to them while I was on active duty .
This is the equivalent of a full ride, with room and board, to a state school. This is a really nice benefit from having served on active duty for a fair bit of time, including a 7 month stint in Iraq. We figure our child can use it for graduate or professional school, or keep it invested for our future grandchildren.
What has been your best investment?
Well, it has been the most fun to watch our taxable account grow. We only hold VTSAX and VFIAX in our taxable account. We switch between the two for each deposit, usually every couple of months.
We use them as tax loss harvesting partners, which came in handy during March of 2020 (6-7k loss on the books). My plan is to continue contributions equally to the two funds, and then when the balance of one fund reaches our mortgage balance, we will pay off the mortgage. That’s when I will be certain that we are completely financially independent at (or more likely above) our current lifestyle.
I know the math works out better to stay invested. I think the peace of mind of being entirely debt free will be worth it to us. I know other disagree and that’s fine. After the mortgage is paid off, I will alter the funds in this account to mirror our overall asset allocation (breathe, anti-100% stocks folks).
Your worst investment?
Before I became at least somewhat financially savvy, I used to dabble in individual stocks and some goofy expensive mutual funds. I have always been interested in personal finance, but just didn’t know what I was doing when I started.
A quick side note about becoming at least partially financially savvy. I spent approximately last 12-18 months on active duty reading nearly every single blog post on WCI (sorry PoF). [PoF: That’s quite alright! I imagine Physician on FIRE was either non-existent or in its infancy back then, and I’m a big fan of WCI.]
I was a major lurker on the forum too (I used to know all the characters on the WCI forum). We were not real busy at work, so I had a lot of time during the day. I learned so much information it was incredible and so enlightening. The content was exactly what I needed.
Interestingly, I found the WCI website while researching the question about whether to stay on active duty or separate for a civilian career. I am thankful to all the financial bloggers who have taught me so much and given me the confidence to completely control our family’s finances. It really is a wonderful feeling.
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Into the FIRE
Numerically, what is your FI goal?
Not really a number for us, but when the mortgage is paid off, as I discussed above. I think separately from that, we would probably like to have ~2-3M in investable assets in addition to my pension. I think that would be VFatFIRE for us.
When do you suspect you will achieve financial independence? Will you retire from your career once you’re comfortably FI?
I think we will have the mortgage paid off in 2-3 years, depending on the market. I’m fine if it takes longer. I plan to continue to work, just not at the current pace. I will likely work part time until I am at least 55, maybe 60. Radiology is a terrific field and I truly enjoy the (day) work. I also enjoy the camaraderie of the people I work with. I think it would be hard to give that up completely for me.
What are your post-FI plans? How will your life change? What do you look forward to the most?
This is a grey area and one of the reasons I plan to continue to work, at least part-time. I enjoy golfing, traveling and college/professional sports. I would like to do more of all of these things as I have more free time.
I also want to take over the vast majority of our home and property maintenance. I enjoy doing most of this kind of work. But at present, I have to contract almost everything out because I just do not have the time or energy to do it.
Of course I love spending time with my wife and child. We try to stay active together and love to do outdoor activities like hiking and biking. I also enjoy golfing, traveling….
Have you made any major changes in your lifestyle or investments to accelerate your FI path?
The decision to stay in the Reserves and earn my pension/health benefit has certainly played a significant role in our path to FI. As I stated earlier, this has served as a semi-insurance policy.
We have always lived below our means and this has been the major force driving our path to FIRE. It has been nice to slowly and deliberately increase our spending. I believe we have earned it.
Are you facing any unique challenges making FI or RE more difficult?
My current pace of work is not sustainable. As I cut back, so will my income. It is very hard to complain about even a “cut back” salary however.
What advice do you have for others who are seeking financial independence?
There is nothing new or unique from me here. Live below your means. No, really. Live below your means.
PoF: Catch all the future interviews from those just getting started, at a crossroads, or at the end of their FI journey with a free subscription to Physician on FIRE.
I’ve shared my feedback privately with today’s guest. I wouldn’t want my opinions to influence yours. Please give your take in the space below!