Monday, November 13, 2017

Another Down-to-Earth Heiress

Consider this a sequel to my last post, in which a woman's family money seemed to be funding some luxuries for an otherwise frugal couple.

This time, the story is about a childhood friend of mine. I hadn't really kept in touch with him for years, but some years ago I was at a party in my home town and met his wife. She was a lovely person who taught in a local nursery school, just really sweet and friendly and exactly the sort of person you'd want your child's teacher to be. My old friend worked in what sounded like a mid-level corporate marketing job. They had a child and another on the way at that point. They were renting a house and hoping to find one to buy. It all sounded totally typical for a young married couple of my general world, which I'll again describe as mostly people who have had a stable, middle-class to upper-middle class upbringing, college grads-- people with many advantages in life but who would not be seen as particularly rich. People who probably aren't living paycheck-to-paycheck, but who have worries about the bigger financial goals in life such as helping kids pay for college, and retirement. People who can't take money for granted.

As in my last story, an offhand remark by the wife made my head spin-- I was telling a story about my own job, with an example of a regular task I had at that time, and I referred to a company name. The wife said "oh! That's my family's business! [Things associated with this company, one of which I had just cited,] are named after my sisters and cousins and me!" This company is not a household name but it's one of those things that is actually pretty major in a behind-the-scenes way, which you notice everywhere once you know where to look. I didn't pry into all the family tree, but from doing a little research afterwards, it appeared that the wife's grandfather was at that time the richest man in the country where this company was founded.

Being the richest man in that country is not like being the richest man in the US-- our billionaires are way richer. But still... he's a billionaire! I guess there is no law that says grandparents have to provide money to their grandchildren, and maybe this woman doesn't get a thing, but even if she is one of lots and lots of grandchildren, she would surely inherit something someday. And at that level of wealth, I'd be surprised if there wasn't some sort of trust fund distributing some money already.

At some point after that party, I asked a mutual friend if he knew about the wife's background. He was aware that she came from money, as apparently a group of this guy's friends always joked about how he must have sold his soul to the devil because he'd gone from being kind of a nerd in high school to marrying this beautiful and wealthy woman! But they didn't even realize exactly how wealthy her family was.

I was just looking up this couple to see what they are up to lately, as I haven't seen them in a while and don't know much more about them other than what their kids are doing in photos posted on Facebook. The wife is no longer a teacher, and has what sounds like a management job at a tech company. My friend seems to still have more or less the same job. When the wife was a teacher, I thought "ok, that is the sort of job that is emotionally rewarding if not remunerative, so it makes sense that she would do that." Obviously I don't know any details about her current job, but it sounds more like the kind of thing people do when they need to make money-- she may find it satisfying in other ways, but I guess it is my own bias showing that I think anyone who has some family money would want to be an entrepreneur, or work for a non-profit, or teach-- in general, do things that are too risky or low-paying to do if you really need a steady income. I wish I could ask her a lot of questions....

Wednesday, November 08, 2017

Enough About Me...

It's been a while since I wrote about other people's money! I've been jotting down some notes over the last year or more about various situations I've encountered with friends or family whose finances fascinate me. The first one I'll tell you about is someone in my extended family. He and his wife are pretty down to earth people-- no fancy cars, no fancy clothes, and no expensive hobbies that I'd ever heard of until recently. They did do some nice travel with the wife's family, but nothing that seemed out of the ordinary for upper-middle-class people that wanted to treat their kids to a special experience. All in all, I'd describe them as people who certainly had lots of advantages in life and lived comfortably, but not someone that most people would look at and say "whoa, they are super-wealthy and have way more money than me."

But then one day, the wife casually slipped something into a conversation that did make me say "whoa." Without revealing too many identifying details, I'll just say that someone in an earlier generation of her family invented something pretty major-- major enough that unless there was some sort of unfair buy-out or other business dealing, the entire family would surely have a TON of money for generations to come. I could be wrong about that, as it's hard to know how family wealth will trickle down over generations, whether it's been invested well, etc. But I'm pretty sure I'm right, especially since the husband in this couple recently bought a plane.

Now the plane he bought is not a Gulfstream jet or anything like that-- it's a small plane that probably cost him less than some luxury cars, from what I could tell by googling the model. But still-- how many people just run out and buy planes?! In my circles, basically no one. I know one person who flies a plane because he works for a small local charter airline. And I think one of my uncles might have taken some flying lessons a while back. I myself gave Sweetie a one-hour trial flying lesson as a 50th birthday present-- I think it was about $85, and it was a really fun experience that I'd like to repeat with myself at the controls someday! But other than that, flying seems like a pretty rarified hobby. And to commit yourself to getting and maintaining a pilot's license, as well as fuel, maintenance and hangar parking for a plane that you own? That has to be a huge money pit. If you  do certain kinds of travel on a regular basis, I suppose you can avoid paying a lot of commercial air fares, but I would imagine it's extremely rare for owning a plane to work out to be cheaper.

So it was very interesting for me to go from thinking my relative was someone "like me" in terms of finances, in a very broad sense, to suddenly seeing him as being on another planet! I admire him and his wife for their lifestyle in general-- they are both smart and hard-working, certainly not anyone you'd scoff at as the "idle rich." And if the plane is the one crazy thing they want to blow some money on, it's fine with me, though I hope they are extremely cautious flying it!

Have you ever had to reassess your perception of someone's finances like this?

Tuesday, October 10, 2017

New Life So Far

 I’ve got a few weeks of retirement/vacation/unemployment under my belt now… and I’m still not sure what to call it! But I have already made a few discoveries about myself. Firstly, that I am lazy! I had very good intentions to blog every day and go to the gym every day and be very creative and productive and healthy, but I’m not doing a very good job of that just yet.

 In my first few days off, I bounced around the apartment doing a lot of little chores like washing windows, organizing my sock drawer, and repairing a lamp. But having knocked those off the list, I felt a bit at sea. I did go to the gym most days, but that only took up a couple of hours, leaving me a lot of time to spend A) wondering if I’ve done the right thing in quitting my job, and B) staring at my phone. I have an amazing capacity to just loll around and check Facebook, Instagram, Pinterest and Twitter all day!

Then I got sick, and even my gym routine went out the window. It took a few doctor visits and blood tests to figure out what was wrong with me, and luckily, just some antibiotics to fix it, but not before my brain went off into some anxious (and literally feverish) spins about how much COBRA payments were costing me and what would be happening with Obamacare, and pre-existing conditions, and deductibles and premiums and co-payments, oh my.

 The healthcare costs are my main spending these days— immediately upon starting my semi-retirement (I’m just going to call it that for now), I found myself with a hankering for peanut butter sandwiches. That plus some salad greens, cheese and crackers, and a baggie full of nuts and raisins, has been my primary diet on these lazy days, and I get really annoyed with myself if I forget to bring my own water bottle from home and have to buy one. Sweetie and I have occasionally gone out for lunch at pizza places, middle-Eastern restaurants, and Chipotle, but on the whole, I’ve been really good about cutting my spending on food. I also haven’t spent much on any other miscellaneous items or clothes, other than finding my favorite jeans on sale and snapping up a couple pairs since I’ll be wearing them a lot more!

 Our basic costs of living— housing, insurance, etc— are a big drain right now, but so far, my net worth has pretty much stayed steady, even increasing a little— stock market fluctuations will have a much bigger effect at this point than any day to day spending, at least in the short term. But it is painful to see all this negative cash flow.

 Right now, I’m just giving myself some time to settle into this new life and figure out a new rhythm— it’s more of a challenge than I thought it would be. Although I did not think of myself as wrapped up in my old career as a big part of my identity, I am uncertain about what my identity is now. What I mean is that I didn’t base my self-worth on making a lot of money and being at a certain professional level— I was proud of it, but my career was less about prestige than it was about an inner feeling of competence. I liked knowing what I was good at my job (most of it, anyway) and I felt satisfaction in getting things done. Now that source of satisfaction is missing and I need to replace it with something. I need to feel like I’m good at something, and productive. It’s scary to not have a clear idea what that will be, and to contemplate doing something new where I am clueless and might be frustrated at first because I don’t know what I’m doing and make mistakes. The part of my life that gave me confidence and security has been replaced by doubt and uncertainty.

 But this is temporary. I know things will settle down— we’ve got a house to buy, an apartment to sell, and a new life to build, none of which will happen overnight, so I need to be patient with myself. And we have money in the bank to get us through the next steps. I still feel incredibly lucky to have these choices and decisions to make.

Friday, September 08, 2017

It's Done

In my last few posts, I was working my way towards a big life change... and now I've taken the next big step. I quit my job! It was both a big step and strangely anti-climactic, since I hadn't been at that job for very long and had never really settled into it in some ways. Now I just wish I'd done it sooner so I could have had more time off during the summer, but it's actually kind of nice to go into vacation mode just as everyone else is going back to school/work.

This is going to be weird, though. I haven't been unemployed since I was 21! What am I going to do with myself? More blogging, I hope! And I do intend to find other work, but at the moment we're working on moving out of NYC, which seems like a job unto itself. The main thing I'm going to have to adjust to is seeing negative numbers in my income/expense tracking. I will not be saving money in the short term. I will have to be very strict about sticking to a budget, but spending some of my savings is all part of the master plan. It is going to be painful over the next few months as we'll have higher household expenses while we deal with relocating. But afterwards, our ongoing expenses will be lower. And Sweetie will have a lot more liquid cash after the NY apartment is sold. We are pretty sure that if we play our cards right, we don't really ever have to have jobs again, though we do want to find other work, preferably part-time.

Meanwhile, I keep hearing of more and more people who are also leaving NYC-- some are moving to totally new cities for new jobs, some are moving back to their home towns to be closer to parents, some are doing reverse commutes to jobs outside NYC and planning to fully move later. Others are also leaping into the void of uncertainty: one guy quit his job, sold all his stuff, and moved to Berlin! There is a sense that the city has changed so much from when we ourselves were the young new arrivals, but maybe every new generation feels that NYC is becoming just an over-developed playground for the wealthy and their children and just isn't as fun anymore...

But for me, what I'm doing now feels exciting, inspiring, and a little scary. It's rejuvenating, perhaps, to throw off my very stable routines and enter a phase of disruption and reinvention-- though I suppose some people wouldn't think that a middle-aged couple moving to the suburbs is that adventurous! We shall see...

Monday, June 12, 2017

Health Insurance

Another important point brought up by a commenter on a recent post— how am I going to get health insurance if I leave my job? The short answer is that I’m going to pay through the nose for it!

This really is the crappiest part of trying to contemplate a sabbatical, or early retirement. I currently get pretty good health insurance through my employer, including coverage for Sweetie. I pay about $260 a month to cover our dental and medical insurance. I can see from my paystub that the employer covered portion of our insurance costs is about $1000 additional. Going on COBRA will also add some sort of administrative fee, so I’m budgeting that it will cost us $1,400 a month to pay for our insurance.

COBRA only lasts up to 18 months, so after that, assuming we didn’t have jobs yet, we’d have to buy insurance in the marketplace. I went to the NY State website to see what the costs would be under Obamacare. It looks like we make too much money from interest and dividends alone to qualify for any subsidies, so our costs for a “bronze” medical and dental plan for 2 people would be around $800 a month. “Silver” would be about $950, and “gold” would be around $1,150. Given that we are both currently quite healthy and don’t have any prescriptions we take regularly, it probably makes sense for us to try a bronze plan— this would have a really high deductible, so we’d be mainly covering ourselves for something catastrophic, and we have the cash to pay a big out-of-pocket maximum if we get hit by a bus. But that could be over $14,000 worth of charges we’d have to pay before the insurance kicks in. So maybe it’s worth it to pay about $350 more per month for the lower copays and out of pocket caps that we’d get with a gold plan?

Who knows… either way the whole system sucks. I know so many people from other countries that have single-payer systems, and they are perfectly happy with them and think that what we have to pay here is insane. Every time I see a drug ad on TV, I feel outraged that millions of dollars are being spent on all this pointless marketing, though I know that’s not the only reason healthcare costs are high. And of course, my numbers here assume that the Affordable Care Act isn’t completely destroyed by the Republicans. If the protection for people with pre-existing conditions goes away, I’ll be screwed, as I do have one hereditary thing that doesn’t require active treatment now, but would be considered a pre-existing condition and could potentially cause me to be charged a lot more for insurance in the future, or denied coverage for certain things.

So will we really be paying an amount equivalent to the rent on a small outer-borough apartment just to get health insurance? I guess we will, at least for a while. I’ve been googling “part time jobs with benefits” as that would be an ideal scenario, but I’m not sure we’ll get that lucky…

Wednesday, June 07, 2017

Remote Work

Several commenters have asked if I could move out of NYC and work remotely at my current job. I have definitely thought about this option. Unfortunately, in my current position, it would be a non-starter. There is certainly plenty of work I can do from home, but there are lots of meetings and face-time is required (the old-fashioned kind, not the Apple program!). Someone who works for me actually asked to work remotely and though I sympathized and wanted to say yes, my boss wanted to hold the line and say no. It’s seen as a productivity issue, and a fairness issue, I guess. There are some jobs where it may make sense, and some where it would be hard to measure productivity, so although there are some people who work remotely, they often say no, as they’re worried that the more they say yes, the more they’ll have to say yes to everyone just to be fair, and then the office would be a ghost town.

A lot of companies seem to want their employees to work remotely, so as to save on expensive office real estate. But then there is the question of office culture, team spirit, etc. I would certainly be interested in trying to work from home, but it would probably have to be a different job, with a different company. Or I could do some freelance consulting. I would love to have a flexible schedule, where I could bum around in jeans all day instead of having to get dressed up and commute to an office. But I do also worry a bit about whether my temperament is suited to it. When I have a day off, I can laze around for hours, getting distracted by solitaire and Facebook and reading the newspaper. I might not be disciplined enough to work from home. I think I’d also miss the social aspects of going to an office. Some of the suburban/rural areas we’ve considered moving to are actually within what many people consider commuting range— I work with people who travel up to 1.5-2 hours each way, so that’s a pretty wide radius around the city. But that kind of commute would just spoil any quality of life gains we’d get by moving, and those Metro North train passes are pricey.

So that leaves me thinking about what I could do for work from home, or locally wherever we end up living. I’m not feeling pressured to make a ton of money, so theoretically I could have a lot of options, but A) I’d have to figure out what those options are, and B) I might face some age discrimination. I’m not afraid to do menial work, and I did plenty of it when I was younger, but now that I’m pushing 50, I wonder if I’d be taken seriously as an applicant. I’m tempted to just apply for a bunch of random jobs to see if I could get one— kind of as an experiment in what today’s job market really is like. But I would also feel bad if I got a job that I didn’t really want for the longer term, but someone else might have really needed. So at least in the immediate future, I think I will try to focus on doing some networking in my industry to find out more about remote and freelance job opportunities and also try to talk to friends in other industries about what other kinds of professional jobs my skills would lend themselves to. But whether or not I find some other job, I’m becoming more and more certain that I’m going to quit and some kind of big change is coming!

Tuesday, May 30, 2017

How Do I Want to Live?

This is always the key question in thinking about retirement. How do I want to live, where do I want to live, what will I be doing, and what's it all going to cost?
I'm still grinding away at my job, with some good days and some bad days. Still pretty stressed. Still spending a lot of time looking at retirement calculations, and also real estate sites. Because it's suddenly seeming like real estate is where the answer will be found.

Ever since I started writing this blog, one of my key assumptions has been that I will always want to live in NYC. I love it here. It has become home. It's where many of my friends are (though some of my best friends are elsewhere), it is where I have work connections and where most of the jobs in my industry are based. I love the wealth of cultural institutions, even if I don't always take advantage of them. I just like the vibe of the streets-- there is always someone or something interesting to look at. You can walk and take public transportation to do so many things. Although there is anonymity in the city, neighbors still look after each other, and in some ways, NYC is a great place to age-- you can get things delivered, take taxis, there are doctors and hospitals galore, lots of buildings with elevators and doormen-- all things that make life a little easier for elderly people.

The flip side is that it's freaking expensive! If you really want to enjoy the best of what NYC has to offer, it's going to cost you a lot. My lifestyle has always been kind of low-to-middle in terms of NYC standards-- I've mostly lived outside Manhattan, moving further and further as real estate prices increased. I've lived in tiny apartments with no services. I've tried to keep my expenses in check. In more recent years, that has changed a bit due to Sweetie, who already lived in a nicer doorman building and had a car and a cleaning lady coming in weekly. As my salary increased, I felt comfortable taking on my share of the cost for that lifestyle, even if it wasn't what I might have chosen on my own. The cleaning lady is now only every other week but we live quite luxuriously, I think. A lawyer or a hedge-funder might not be impressed, but my 10-years-ago self would be!

So now the question is "what are we willing to give up?" The more we talk about it, the more we realize we're willing to change things quite a bit. Though we love the city, we've started to feel a bit annoyed by all the noise and congestion from so much overdevelopment-- new buildings going up, creating more density, more crowds. Meanwhile our own apartment is kind of crumbling-- Sweetie's owned it for a long time and has done some renovations over the years but more are needed. Add in some new neighbors that are kind of obnoxious, and suddenly we're thinking maybe we should just move so we don't have to deal with all this crap. But to where?

We've started looking at some areas along the Metro-North train lines in NY state and Connecticut. We've looked a little in Hoboken and Jersey City. We've looked at far northern parts of Manhattan and even in the Bronx. Most of this has been idle on-line searching so far but we've seen a few places in person at open houses. It's hard not to pull up stakes immediately when you visit a beautiful newly-built house with twice as much square footage as your current apartment, a washer/dryer, garage, and a terrace with partial water views that we could own mortgage-free with lower monthly costs than the current apartment. The only downside would be my commute being close to 2 hours each way! If I wasn't working the commute wouldn't be an issue, of course, but there were some other issues we didn't love about the location. We've also discovered that property taxes can be surprising-- in NJ and CT, they are often really high vs. NYC, so something that looks like a bargain might not be.

So this question of how we want to live is yet to be answered, but we're looking at a lot more possibilities. We could come into NYC for day trips and still enjoy the culture. We could even stay in a hotel once in a while for far less than it costs us to live here. And if we manage our expenses well enough in the next decade or so, we'd probably be able to afford to move back into the city at some later time, even have a small pied-a-terre. But the bottom line is we're starting to figure out possible budgets that might really allow us not to work at all from now on. Living in NYC is the biggest expense we can cut... I never thought we'd be willing to do it, but it could make all the difference.