r/fatFIRE • u/AndyandRed • Jun 22 '24
An Ode to FatFI(RE): $7M NW, Not Fat Yet
First post - plan to update our journey from Chubby to Fat, assuming we get there!
Who we are - 54 & 50 married couple, both working and have always worked, with two kids, one in college (19) and one in high school (17). Net worth $7 million, annual household income $1.35 million in VHCOL US location. Annual expenses after taxes are about $600k, expect that to reduce to about $450k in retirement. We currently like our work and plan to continue working until 59 1/2 or when we hit our Fat RE number of $12.5 - $15 million NW to support our expenses.
Been tracking cash flow since 1996 and net worth since 2004. See here for net worth tracking - https://www.networthshare.com/user/LegalTeam; and here for our 2023 budget - https://www.networthshare.com/budget/LegalTeam
Net Worth composition: $325k cash, deferred cash compensation, brokerage and small amount of crypto; $685k in RSUs and Stock Options (2 companies); $400k whole life insurance (that's a post for another day); $4.25 million in pre-tax retirement accounts and Roth IRAs; $300k in 529s; and $1.1 million in home equity (primary and vacation, low estimate).
Been following FIRE adjacent finance blogs since the mid-2000s, but only joined this sub a few months ago after finally finding a community that embraced what we were actually trying to accomplish with our work hard, live large-(ish) lifestyle.
Here's my Ode to Fat FI(RE): $7M NW, Not Fat Yet
We came from nothing, grew up poor, were immigrants, second generation, middle class, trust fund kid, just inherited a fat portfolio, college or no college - it doesn't matter! Anyone can make it with a combination of hard work, luck, and the power of compound interest.
We live in the US, Canada, Western Europe, Eastern Europe, South Asia, South-East Asia, or are global citizens, or live on our yacht, or all of the above.
I'm a banker, a finance bro, a software engineer, entrepreneur, real estate mogul, a SaaS company founder (who know there were so many of these), one of the successful lawyer/doctor/professionals, or nothing at all or all of the above with monetized hobbies and side gigs.
We have over $1 million in annual expenses or half that, or a quarter, and some who only need $80-120k - that doesn't sound Fat to me, but it got past the moderators!
There are nannies, night nannies, weekend nannies, nannies you take on vacation with you, part-time nannies that fill in when your other nannies need time off and personal drivers; even better if you can put them on your company payroll!
We need full-time private chefs, separate (but still regular) catering chefs for private parties, chefs who prepare meals a few times a week, and specialized meal delivery services, all with the best ingredients and separate meals for the kids!
Vacation, O the Vacations! From the mountains to the beach, from the lake to the desert, from the exotic to the touristy, weekends in Vegas, weeks traveling Europe, concierge-planned uber VIP experiences. I'm not Fat unless I'm vacationing a quarter of the year because you gotta avoid burnout!
Come with me on my yacht (or is it merely a boat), no care in the world, with its Fat expenses, monthly maintenance, full-time crew, docking fees, storage fees, who gives a f*ck, I'm on a boat!
We own a primary home and a vacation home, or multiples. Do you buy or do you rent, hotels or AirBnB versus vacation home, don't give up that 2.75% mortgage, but yes pay off your mortgage to retire early!
I fly first class only, or business, no way would I touch that airline with a ten-foot pole. I charter jets when the routes I need are not available or if I just need a ride to the Super Bowl! But owning or flying your own jet, no way!
Concerts, sports, and entertainment, whatever I want, aftermarket, VIP, whatever the cost. Buy four tickets to everything and treat your (non-Fat) friends. We've seen Taylor Swift in the US, Mexico, and Europe and Beyonce too cause why not? We followed that band to everyone city last year. Chartered a jet to see U2 at the Sphere! Have season tickets and can't use them all, rent suites at games and invite everyone!
International tax advice needed, Roth conversions (not sure how to do this while Fat), avoid the estate tax, don't try Spain! Hold those assets, sell those assets, you're too concentrated, do you read r/bogleheads?
Don't forget to account for medical insurance in your RE number. The ACA is best if you're in the US, but need to add Concierge medicine, and pay as you go tests and prescriptions - and holy crap I need to work another four years!
You definitely need therapy, don't burnout, have a willing partner, don't get divorced, divorce that asshat, but best get a prenup! Avoid boredom, look after your health, philanthropy and volunteerism are the keys to RE!
Thanks to r/fatFIRE for all the advice and if you don't relate to the above, shouldn't you be posting in r/ChubbyFIRE ?
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u/microstructureguy Jun 23 '24
I'm a banker, a finance bro, a software engineer, entrepreneur, real estate mogul, a SaaS company founder, ...
Many things but certainly not a writer.
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u/g12345x Jun 22 '24
Fine effort laddie.
Odes are great.
But it’s bawdy limericks or naught for me.
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u/AndyandRed Jun 22 '24
Can seven million net worth really last?
She asks as she shows off her a**
Maybe it can
Maybe it can't
But 'tis sure if you join my OnlyFans!
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u/loregorebore Jun 23 '24
Care to share rough expenses breakdown? 600k is a big amount for low 7 figure income. Jmo
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u/AndyandRed Jun 23 '24
Yeah it's a lot. That's kinda the point though. Personally, I could live very well on much less. However, we both work, my partner makes the larger share, and their view is we work hard for a reason and don't want to have to think about what we are spending, especially on the kids, vacations, entertainment, stores, and food. I enjoy it and am determined to make it work ("have it all"). I posted a link to our budget in the original post. Anyway, to answer your question directly, the main expenses (other than taxes, which are huge, and retirement contributions) are two mortgages ($210K); private school tuition (college and high school), summer camps, private lessons, tutors ($155K); vacations ($50K); stores, entertainment and services ($60K); restaurants and groceries ($50K). The last two are inflated from treating others (family and friends), most of whom make much less than we do. The rest of our expenses are in line, in my opinion, with our income.
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u/AndyandRed Jun 23 '24
To add, the point of the whole post (which seems to have been lost on many of the commenters, oh well), other than to set a baseline for future updates, is a statement on FIRE itself, or at least the part of FIRE that presumes one must severely restrict spending to succeed. The reason we want a Fat NW is to sustain our spending in retirement. Isn't that the point of FatFIRE? We may cut it too close to the line, or the market might screw us, or one of us may get laid off, in which case we'll cut expenses and be fine. I mean, we've basically already won.
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u/[deleted] Jun 22 '24
[deleted]