Why are people working so long?

[Chemist0157]

The housing market is really enticing right now. For instance, I have a townhome that I am cash flowing $500/month, but I could sell it now and walk away with 110-120k. Really don't know what to do.

I think you just let it ride unless you can put that money to better use. The value of the property will increase over time regardless of any correction in the short term.

Anything you could do in terms of renovation to justify higher rent? Or is someone living there long term?

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[Splenda88]

I think you just let it ride unless you can put that money to better use. The value of the property will increase over time regardless of any correction in the short term.

Anything you could do in terms of renovation to justify higher rent? Or is someone living there long term?

A family has been in it for over 2 yrs now. I can increase the rent to $150 more but I don't think it would be fair given that I am cash flowing $500/monthly already and the property management company told me they are good tenants.

 

[Chemist0157]

A family has been in it for over 2 yrs now. I can increase the rent to $150 more but I don't think it would be fair given that I am cash flowing $500/monthly already and the property management company told me they are good tenants.

Yeah, I wouldn't do it either then in that situation.

 

[Mman]

Net Income: $17000/mo

Mortgage + Home Costs: $3000/mo
Transportation costs of leasing two X7's: $3000/mo
Children: $6000/mo
3x FL Vacations: $2000/mo

Remainder: $3000/mo

So probably living paycheck to paycheck and maybe saving a little but not nearly enough to continue that lifestyle into retirement.

If you started saving $3K per month at age 32, never increased, and retired at age 67 you would have >$4M (assuming 6% growth). At that point, kids probably out on their own, no mortgage, etc. and can safely spend 6 figures per year.

I would not call that living paycheck to paycheck.

 

[dpmd]

If you started saving $3K per month at age 32, never increased, and retired at age 67 you would have >$4M (assuming 6% growth). At that point, kids probably out on their own, no mortgage, etc. and can safely spend 6 figures per year.

I would not call that living paycheck to paycheck.

He said the remainder after the few big ticket items was 3k, not that the amount available to save was 3k. You will notice food is missing from the budget, as are insurance, utilities, clothing, phones, cable/entertainment, and then the other incidental **** that adds up like fancy coffee beverages, salon and spa services, outsourced stuff like pest control/housekeeping/pool cleaning/etc, and random shopping an Amazon and similar. Very easy to see that all adding up to zero money to save at the end of the month.

 

[Splenda88]

I actually think a 30-yr mortgage payment >2.5k/month is too much.

 

[FlowRate]

He said the remainder after the few big ticket items was 3k, not that the amount available to save was 3k. You will notice food is missing from the budget, as are insurance, utilities, clothing, phones, cable/entertainment, and then the other incidental **** that adds up like fancy coffee beverages, salon and spa services, outsourced stuff like pest control/housekeeping/pool cleaning/etc, and random shopping an Amazon and similar. Very easy to see that all adding up to zero money to save at the end of the month.

Exactly. My own individual spending on everything that's not one of those line items varies between $1000 and $3000 per month. I'd imagine with multiple kids and a wife that person is spending the remainder, not saving it.

 

[Mman]

He said the remainder after the few big ticket items was 3k, not that the amount available to save was 3k. You will notice food is missing from the budget, as are insurance, utilities, clothing, phones, cable/entertainment, and then the other incidental **** that adds up like fancy coffee beverages, salon and spa services, outsourced stuff like pest control/housekeeping/pool cleaning/etc, and random shopping an Amazon and similar. Very easy to see that all adding up to zero money to save at the end of the month.

sure, but what exactly is making the kids cost $6000 a month if you are excluding stuff like food and entertainment?

Retirement planning all depends on how early you want to retire and how long you are likely to live. Some people are happy to work beyond age 65, others want to retire at 40. The later you are happy to work, the less you need to save. I mean sure that is obvious, but it is almost exponential both because you have so much longer for it to compound but also are going to have less years of retirement so need far less saved up to support it.

While I am trying to retire early, I know plenty of docs happily working full time beyond age 65. It's not for me, but it works for some.

 

[FlowRate]

sure, but what exactly is making the kids cost $6000 a month if you are excluding stuff like food and entertainment?

Retirement planning all depends on how early you want to retire and how long you are likely to live. Some people are happy to work beyond age 65, others want to retire at 40. The later you are happy to work, the less you need to save. I mean sure that is obvious, but it is almost exponential both because you have so much longer for it to compound but also are going to have less years of retirement so need far less saved up to support it.

While I am trying to retire early, I know plenty of docs happily working full time beyond age 65. It's not for me, but it works for some.

Average cost of a child is $233000 to age 17 for a middle-income family. That's 13000 per year. Times 5 children is 65000 or 5500 per month but do you really think someone rolling in two brand new large luxury SUV's is spending median amount on their kids? So I tacked on only 10% more.

Mom and dad's other living expenses aren't included nor are optional but ideal things like OOSSDI, umbrealla I, life I, or many other line items. Yes, the kid's expenses are wrapped up in the children line. (Actually I do wonder whether that statistic I pulled includes implicit housing costs, that's a good question.) All of the numbers I pulled were rounded slightly but pulled from the actual cost of each of the things wamcp specifically mentioned.

 

[dpmd]

sure, but what exactly is making the kids cost $6000 a month if you are excluding stuff like food and entertainment?

Retirement planning all depends on how early you want to retire and how long you are likely to live. Some people are happy to work beyond age 65, others want to retire at 40. The later you are happy to work, the less you need to save. I mean sure that is obvious, but it is almost exponential both because you have so much longer for it to compound but also are going to have less years of retirement so need far less saved up to support it.

While I am trying to retire early, I know plenty of docs happily working full time beyond age 65. It's not for me, but it works for some.

I don't have kids so not sure what was included in that number. Guessing childcare, private school tuition, diapers, formula, and that sort of stuff that means the adults still have spending to do.

 

[FlowRate]

After thinking about mman's objection, I did some research into the childcare expenses question. The way USDA calculates that is essentially the amount that families of different income levels increase their various costs with each child (and depending on the child's age.) For households with annual income > 110k in 2015 it was on average appx $20k/yr/child increased spending. 47% of that was housing and transportation costs. So halving the average amt per child for higher earners of 20k you'll get a very similar number to what I used earlier.

 

[Mman]

Average cost of a child is $233000 to age 17 for a middle-income family. That's 13000 per year. Times 5 children is 65000 or 5500 per month but do you really think someone rolling in two brand new large luxury SUV's is spending median amount on their kids? So I tacked on only 10% more.

The thing with kids that is that having 2 kids doesn't double the expense, having 5 kids certainly doesn't quintuple it. I mean it's not like you need 5 car seats and what not. A lot of that stuff is hand me down. I mean even even if you are a high roller you still reuse some things.

 

[Splenda88]

Having 5 kids seems to be irresponsible IMO unless you can afford to hire a FT nanny.

 

[dpmd]

Having 5 kids seems to be irresponsible IMO unless you can afford to hire a FT nanny.

Why is it irresponsible when there is a non working spouse who can care for them?

 

[Splenda88]

Why is it irresponsible when there is a non working spouse who can care for them?

Did to make myself clear. Considering the case we are discussing, 300k is not good enough to take care of 5 kids.

 

[dpmd]

Did to make myself clear. Considering the case we are discussing, 300k is not good enough to take care of 5 kids.

Why?

 

[Splenda88]

Why?

Cost of living is too high right now unless you live in rural Appalachia. Looking at it again, I think it's more than enough to take care of 5 kids. I guess I am being too conservative.

 

[Mman]

Cost of living is too high right now unless you live in rural Appalachia. Looking at it again, I think it's more than enough to take care of 5 kids. I guess I am being too conservative.

it's fine if your kids can go to public school, far less doable if you have to send all of them to private school for 13 years

 

[Dusn]

People here who are the sole income provider and have multiple kids, how do you get to FI/RE.

I was just talking to a colleague...has 5 kids..wife doesn't work...in late 30s...still has student debt...carries 600K mortgage on a home with a big pool...owns >80K priced giant luxury SUVs to fit all five kids and wife on trips to rented vacation homes in Florida couple times a year...

I mean what. How. He doesn't work extra shifts in the ER so I estimate his income is in the 300K range. After any assumed pretax deductions/retirement savings/taxes and spending, how much extra can you reasonably put into investing.

Or they figure that if they just pop out enough kids, one of them might be successful and support them in retirement.

Don’t hate on a strategy that’s been around much longer than the FIRE movement.

 

[kratos99]

We have two kids, wife doesn’t work. I’m in family medicine in Canada, pulling in average 430k. From the States originally. I’m 41, net worth 4.5m. We live in an expensive city so our moderate sized home of 2200 sq feet is considered a luxury here worth about 2.5m. Kids all go to public school though. We lived cheaply initially-one car, biked everywhere, no cable, staycations etc. I have colleagues who are 10-15 years older who are extremely money hungry. Will literally screw over colleagues to bill more. They all live pretty extravagant lifestyles though with bigger homes.
There was a family doc here who retired a few years ago who made headlines by asking his patients to donate some money to his retirement fund when he retired in his 70s. Claimed he was poor and a renter. Said he took great care of his patients and never rushed them etc. Kinda got in trouble with the medical board.

 

[FlowRate]

I’m in family medicine in Canada, pulling in average 430k

Assuming CAD -> USD = $345k, for anyone wondering.

 

[Iamnew2]

Average has been in the 750 range

One wife (and divorce). Several investment homes. No kids. Hobbies are working out, traveling, and eating out.

How many doctors do you think make 750k?

 

[Splenda88]

How many doctors do you think make 750k?

My guess is ~5%.

 

[Iamnew2]

My guess is ~5%.

Precisely. It’s a small amount. I make in the 500-600k and I feel it’s an obscene amount of money as it is. Asking why other docs can’t save more when few make 750k it’s like bezos asking why people can’t afford to buy food or something.

 

[worthless]

Precisely. It’s a small amount. I make in the 500-600k and I feel it’s an obscene amount of money as it is. Asking why other docs can’t save more when few make 750k it’s like bezos asking why people can’t afford to buy food or something.

Unless of course you actually read what was written…I was asking about my partners that make the same as me…

So it’s like Bezos asking an equally wealthy guy why he can’t afford food. Seems like a reasonable question

 

[LukeChester]

Some people don't have a financial plan and goals, so they work a lot but don't control their expenses. And they don't understand why they need a lot of money, they just want to earn more Obviously, it's important. I also noticed that people sometimes aren't ready to change something for their better career because it means an exit from a comfort zone. Actually, this question may have a broad discussion.

 

[Splenda88]

Precisely. It’s a small amount. I make in the 500-600k and I feel it’s an obscene amount of money as it is. Asking why other docs can’t save more when few make 750k it’s like bezos asking why people can’t afford to buy food or something.

Is that really obscene? That's like ~25-30k/month take home pay. It's a lot of $$$, but not obscene IMO.

 

[mvenus929]

Is that really obscene? That's like ~25-30k/month take home pay. It's a lot of $$$, but not obscene IMO.

It's all relative. I'm currently making about 6k/month take home (after maxing out all my savings vehicles with 50% attending income--that amount will go up come January). So someone making 5x the amount I am when I'm quite comfortable on even my fellowship salary does seem quite obscene.

 

[AD04]

OP,

Regarding why people work when they don't have to, I suspect they don't have anything else better to do. Maybe your partner enjoys being miserable at work and trying to leave early as it gives her life some meaning. If she retired, what would she be doing with the rest of her life? It's hard to leave for home early if you're at home all day.

I don't know if you ever tried retiring. I did so for less than a year and it was boring and isolating. All my friends were working. There is only so much leisure (e.g. shopping, traveling, eating out) I can take before it becomes routine.

Once you make a high income, there is very little that is worth doing from a $ / time perspective. It is best to focus on things that money can't buy, such as health and relationships. It doesn't take too long to work out. Too much time together which someone (which is common upon retirement) can sour the relationship. So what will you be doing with the rest of the time? Why spend your time being a good chef or a good gardener or doing whatever other inconsequential hobbies retired people do when you can pay someone else to do that and still have money left over?

Most people don't realize the futility of their goals until they reached them. Most don't reach their financial goals and retire in comfort. But they don't realize the struggle is what gives their lives meaning. Because once you have it all, you'll realize that life under the sun is meaningless.

 

[finalpsychyear]

OP,

Regarding why people work when they don't have to, I suspect they don't have anything else better to do. Maybe your partner enjoys being miserable at work and trying to leave early as it gives her life some meaning. If she retired, what would she be doing with the rest of her life? It's hard to leave for home early if you're at home all day.

I don't know if you ever tried retiring. I did so for less than a year and it was boring and isolating. All my friends were working. There is only so much leisure (e.g. shopping, traveling, eating out) I can take before it becomes routine.

Once you make a high income, there is very little that is worth doing from a $ / time perspective. It is best to focus on things that money can't buy, such as health and relationships. It doesn't take too long to work out. Too much time together which someone (which is common upon retirement) can sour the relationship. So what will you be doing with the rest of the time? Why spend your time being a good chef or a good gardener or doing whatever other inconsequential hobbies retired people do when you can pay someone else to do that and still have money left over?

Most people don't realize the futility of their goals until they reached them. Most don't reach their financial goals and retire in comfort. But they don't realize the struggle is what gives their lives meaning. Because once you have it all, you'll realize that life under the sun is meaningless.

It is the struggle that gives meaning to life. If you suddenly had infinite money and maybe after an initial spending spree and traveling the world for a few years staying everywhere high end and eating high end you probably would get tired of it and in the process have caused more detriment to your health in the process. I remember a silly example of a friend who was into video games until he got one of those jailbroken consoles where almost all games were already loaded. He couldn't decide what game out of the 100's to play and after dabbling around with several just lost all interest. Gone were the days when saving up $40-50 to buy a game and being able to savor it gave significant enjoyment. The process of struggling gives meaning and satisfcation. Great post above.

 

[bobsmith]

OP,

Regarding why people work when they don't have to, I suspect they don't have anything else better to do. Maybe your partner enjoys being miserable at work and trying to leave early as it gives her life some meaning. If she retired, what would she be doing with the rest of her life? It's hard to leave for home early if you're at home all day.

I don't know if you ever tried retiring. I did so for less than a year and it was boring and isolating. All my friends were working. There is only so much leisure (e.g. shopping, traveling, eating out) I can take before it becomes routine.

This is such an amazing perspective to have - thank you for sharing!

Interestingly, I have a handful of friends from my undergraduate days who worked at start-ups, made $$$ when the companies went big, and definitely don't need to work another day in their life - and yet, all of them are still working in some way or another (mostly at other start-ups, etc). I don't know any who stayed retired; they all say similar things - they needed something to do!

In contrast, some of my friends from medical school seem to have a different mindset so far; after years and years of training and being miserable while trying to constantly make it to the next step, they feel this burning desire to rush to make a certain amount of $$$ so that they can "retire." While I certainly think that financial independence and freedom to do what you want (including reduced time work) is a good thing, I do worry that many of them could be in for a rude awakening when they realize that "retirement" just means getting to a new point of figuring out wtf to do with your time - something they never put time into thinking about in the first place.

It reminds me of the Japanese concept of "ikigai" - which is often translated as "the reason you get up in the morning." When you think of your life and career this way instead of as a race to retirement (a concept which also doesn't exist in some societies!), it can help refocus your goals a little bit.

 

[Chemist0157]

I remember hearing on a podcast about retiring and happiness that to maximize happiness, you need something to look forward to and work towards then DIE right before you get it. That way, you avoid the “coming down from the high” feeling after you have obtained that thing.

It is good to work. It is good to be busy. Obtaining enough wealth should just give you the freedom to call more of the shots, not give up being productive entirely.

 

[dpmd]

It is a pretty sad thing if people can't find something else to get up in the morning for besides going to work. Not everyone is so empty inside that they have that problem though.

 

[worthless]

Such wonderful responses my friends! I really appreciate it!

 

[VA Hopeful Dr]

It is a pretty sad thing if people can't find something else to get up in the morning for besides going to work. Not everyone is so empty inside that they have that problem though.

I would say it's more a case of one's identity being tied up in their job. Physicians historically were especially bad about that since work literally was their life.

I suspect this will change with our generation, at least somewhat.

 

[Monocles]

Can we get someone in here who has FIRED already to tell us how much better life is after work?

 

[Iamnew2]

I remember hearing on a podcast about retiring and happiness that to maximize happiness, you need something to look forward to and work towards then DIE right before you get it. That way, you avoid the “coming down from the high” feeling after you have obtained that thing.

It is good to work. It is good to be busy. Obtaining enough wealth should just give you the freedom to call more of the shots, not give up being productive entirely.

Indeed! I have plenty of interests outside of Medicine reason why I value work life balance - but I couldn't imagine retiring at 50 and then spending the next 30 plus years not doing something productive. There is only so much travel, eating out, going to Broadway etc that one can do. I've seen plenty of the world and done countless things in life to enjoy all of life has to offer but I could never imagine just not doing anything productive even if had all the money in the world. I think that's why it's frequent to see people that like what they do continuing to do so into their late years. life becomes monotone and boring if one retires super young.

 

[Iamnew2]

It is the struggle that gives meaning to life. If you suddenly had infinite money and maybe after an initial spending spree and traveling the world for a few years staying everywhere high end and eating high end you probably would get tired of it and in the process have caused more detriment to your health in the process. I remember a silly example of a friend who was into video games until he got one of those jailbroken consoles where almost all games were already loaded. He couldn't decide what game out of the 100's to play and after dabbling around with several just lost all interest. Gone were the days when saving up $40-50 to buy a game and being able to savor it gave significant enjoyment. The process of struggling gives meaning and satisfcation. Great post above.

I agree. And eating out high end delicious food all the time makes one fat! I can speak for some of my colleagues who are wonderful physicians and I think people in general, who clearly do well financially also, and they are unfortunately all overweight. As a woman in particular although I love food and eating out at good places, it makes it so much harder to stay in shape!

 

[Mman]

Indeed! I have plenty of interests outside of Medicine reason why I value work life balance - but I couldn't imagine retiring at 50 and then spending the next 30 plus years not doing something productive.

I can imagine retiring from medicine and then finding something else productive to do with my time, even if it doesn't pay anything (or pays minimally) since I would not need the money.

 

[emergentmd]

Can we get someone in here who has FIRED already to tell us how much better life is after work?

I am sure you are being facetious but here is a serious answer. To the poster who said having infinite money doesn't bring happiness, they are so right. I love a really good Ribeye steak but if I ate the best cut every meal, I would dread eating that steak at about the 4th meal. This is the same with having more money than you can spend. There is a threshold of wealth where it does not bring any more happiness where you know you will not have to worry about money anymore.

I am in my late 40's, at FIRE right now. I am essentially at the point where I can work as little as I want. I am down to 6 dys/month and over the last 3 wks worked 2 dys. I still have young kids so did alot of after school activities but it does get boring and I am glad to be back to work. I considered cutting down to 4 dys/month but that is alot of days trying to find something to do.

I could not imagine not having dependent kids in my 40's at FIRE unless I picked up some serious Hobbies. There is just so much housework I could do.

Life is definitely better at FIRE but you got to find something to do.

 

[dpmd]

I am in my early 40s and am basically at FI but still work part time. I worked only 7 days in September and most of those were under 4 hours of working. I enjoy my job which is why I haven't retired, but I have no problem occupying my time. 8 days were spent camping and hiking. 6 days were spent volunteering where I "worked" harder than anything I do in my job but it was enjoyable because of how different the type of work is and because of the fulfillment I get from the good we did together. The rest was spent reading, watching TV, doing craft projects, and spending time with my parents and extended family. This coming month will be similar (though likely less camping because of weather).

 

[Monocles]

I am sure you are being facetious but here is a serious answer. To the poster who said having infinite money doesn't bring happiness, they are so right. I love a really good Ribeye steak but if I ate the best cut every meal, I would dread eating that steak at about the 4th meal. This is the same with having more money than you can spend. There is a threshold of wealth where it does not bring any more happiness where you know you will not have to worry about money anymore.

I am in my late 40's, at FIRE right now. I am essentially at the point where I can work as little as I want. I am down to 6 dys/month and over the last 3 wks worked 2 dys. I still have young kids so did alot of after school activities but it does get boring and I am glad to be back to work. I considered cutting down to 4 dys/month but that is alot of days trying to find something to do.

I could not imagine not having dependent kids in my 40's at FIRE unless I picked up some serious Hobbies. There is just so much housework I could do.

Life is definitely better at FIRE but you got to find something to do.

I guess I am always baffled and in disbelief at all the people who claim that everyone will be bored in retirement. Like really??? For me personally I have soooo many endless hobbies that I would love to have the time to do... so it's hard to put myself in the shoes of someone who would rather work out of boredom.