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Need 11likes for dm please
Bowl Leader
Hows the onsite situation in LTI?
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Subject Expert
Not enough details.
Are you still earning, how much?
How much longer will you work?
How much do you spend?
The max you can afford is clearly in excess of $4.8m if you liquidate your securities.
But I don’t think that’s what you intend to do
Subject Expert
You gave virtually no information in your original post, and did not give information asked when specifically requested.
Thats why I think it was either a brag, or you were just looking for affirmation on a decision you’ve apparently already made. (Likely both)
Subject Expert
You need to model this out. With your current portfolio, income, spending, saving rate, and a decent assumption future returns (I use 5% real for stocks and 1% real for bonds), project your portfolio size over future time and when you would be able to retire on a reasonable WR based on that projection.
Then you can see how it changes with different priced houses and different spending levels, and you can use that to figure out how much house to buy and how much to spend. Mull whether each spending increment is worth the delay in FI, on the margin.
It won't be a lot of work to put together and it will help clarify your decisions a lot.
Coach
When you can retire is inversely related to spending as much as you can possibly afford on your house
Haha true. If I lived in a box, I could have retired years ago!
You can go to a lender and ask what they can approve you for. Thats the max they think you can afford, but how much you should spend depending on other debts and how much you can comfortably pay a month. Hard to say without any further details.
Where do you live? You can spend 3M but would be completely ridiculous to spend that much in a LCOL/MCOL area.
We are 35 with a 3M net worth and bought a 750k home. It’s very nice to know that I could quit my job at any point and we’d be just fine.
I yearn for your life! But we live in a VHCOL area and there’s not much available (that we love) that’s under $2.7M. I’m guesstimating we’ll end up at $3M.
Age?
42
Who is we? A significant other? Any kids? Just buy what you need and can maintain
Wife + 2 kids
4.8 as an Associate - Biglaw?
Yes I work in biglaw
Mentor
I might as well add on. Everything above about knowing your income levels was spot on. However, age of children will also be an important factor, as school through college can be expensive and activities can also be massively expensive. That doesn't mean you can't buy a house (you could always liquidate a portion of your investments), but significant future expenses and home ownership would likely change the timeline of retirement. You really need to model those future expenses and the ongoing home expenses, plus insurance for a family of 4 for decades, before you can come up with a retirement date.
What’s your HHI and current annual spend? How much is your current house, mortgage, and equity in the house?
FWIW my spouse and I have 2 very little kids and a NW of 4.8M. We purchased a house at 1.75M (it is a large and nice house but we also prioritized living in our favorite neighborhood that is walkable, kid friendly, etc, which is an expensive area) that we intend to be our home until our kids are out of the house in 18+ years and we downsize. We are aiming to retire in the next 5-7 years. Our HHI is around 1.2M (we have both gotten significant promotions with raises in the last few years so our HHI has pretty much doubled twice in the last 2 and 4/5 years) so we are very comfortable with our current mortgage and otherwise live pretty frugally and are able to save a ton of money each year at this point. Our goal is $10M before retirement.
Wow. You and I are exactly the same. Same goals etc. What state/city are you in?
Why would you retire in the same location?
You could move somewhere more affordable and add several years to your independence. In MOST of the country you could retire and buy a home TODAY.
There may be good reasons, but you should challenge them. 3m home + expenses in VHCOL is obviously going to have a non-trivial impact on your timelines.
Consider this path: figure out a place to retire to and a number to make that happen. Then figure out how long until you save that money. Then stay where you're at or rent somewhere bigger until you reach that goal.