I’d argue he is already financially independent.
It has “allowed” him to retire early probably years ago.
He has just chosen not to do so.
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Let me ask him. 
It’s always a little weird to respond to questions / comments when you’re referred to in the 3rd person. Well, at least for me it’s new.
The case for FI is dependent on many factors as most of you know: your own style of living, changes to your portfolio, changes to Mr. Market’s mood, your own mood, increasing or decreasing needs of your dependants, etc, etc.
So, happy to hear your support towards my RE, @San_Francisco, though really curious how you’d argue in favour of it without knowing my circumstances at least in some extent. Or maybe you do know, in which case I’d ask you to maintain my privacy.
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Since this is a forum which came out from mr money mustache, I’m a bit disappointed that nobody really gave a mustachian opinion.
And mr money mustache would clearly not be happy with the expenses etc. There is a strong aspect of living a more healthy and happy life which at the same time reduces expenses. Cooking your own food. Going around by bike. Living in a smaller house. Etc etc.
But 10k chf expenses per month? That’s insane (EDIT: read it as “very high”, not as a judgement on mental capabilities). Mr MMM would be happy you have the stache, but at the same time it would punch you in the face for spending so much AND not being already retired.
Just my 2 cents.
Now admittedly I took the liberty of replying to finalcountdown’s question of age of RE by answering with the nuancedly different phrasing of “financially independent”. Though that also happens to be in the title of this thread that he/she chose.
I’d argue it’s not.
According to your reasoning, by setting the bar arbitrarily high enough for cost of living, you’d never become financially independent, irrespective of your income. But that’s not what financial independence means - or should mean. I believe it should mean that you’re able to cover your living expenses without working.
Being in-dependent, you’d literally not have to “depend” on work (or welfare) to cover your expenses. Instead of (or in addition to) increasing your income, you can also decrease your living expenses - thus achieving financial independence earlier.
Regarding the term independence, the (quote) “freedom from dependence; exemption from reliance on, or control by others and self-subsistence”, I’d argue one should not look at “necessary” expenses rather than an arbitrarily (“high”) chosen amount “according to your style of living”.
Now, by assuming you’d long become “independent”, I didn’t mean to take it to extremes, like setting up a tent in the woods as a style of living - or emigrating to the cheapest cost-of-living country in the world that lets you in and settle. No, let’s reasonably assume you should be able to live in the country, canton or town that you currently call home, among your circle of friends and acquaintances. Which leads me to…
It’s a lot. The simple fact is that many couples spend considerably less than 10k a month and live quite comfortably.
Do note though, that the 10k figure is the the thread starter’s (finalcountdown), not Your_Full_Name’s. Though so is his/her net worth different (higher):
Well, it’s a personal decision after all. I don’t think one should morally judge people, let alone chastise them for it. A goal is a goal - and that’s also true for retirement, and the standard of living and expenses one intends to maintain.
I just don’t think the term (financial) independence is the best one (and yes, in principle one could argue that one might subjectively feel “independent” only having on a steady five-figure monthly income. But talking about such different individual perceptions wouldn’t help the discussion very much).
10k expenses are insane for you (or MMM). Yes, it’s a lot, as @San_Francisco said.
Yes, the thread starter could save some money:
- move to a flat in the middle of nowhere
- travel less
- get cheaper health insurance
- buy less clothes
Would it make him more happier? I doubt that the longer commuting times or less travel would really increase his happiness.
Also, you have to see the ratio: 10k expenses per month when you are earning 50k (rule of thumb, 800k/12 - RSUs) is still ok.
An additional thing to add: maybe @finalcountdown is happy with his current job and life. Yes, he might tweak some money here and there, but would he really benefit by being able to retire 6 months earlier?
@Grog: I do understand your point from a mustachian perspective! Another (rhetoric) question is if @finalcountdown would have been able to increase his net wealth as much if he had followed mustachian principles only. He might either have not gotten the position he has now, or he would have quit with substantially less money. In the end, happiness is a personal choice/decision.
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What the hell, 10k is not a lot for a family with kids! I spend 4k on myself alone. His expenses are well within reason. Travel is a big expense, but I don’t see any other expensive hobbies on the list and you need to live a little.
I’m sure there are many families earning much less money that spend 10k+ per month. You just need both parents to earn 100k each and then you’re even left with some extra money to save.
I’m not sure he would punch anyone. We all need to fill our lives some way. Job gives us purpose. Also, once you have it, it’s not a big deal to just do it, and the money keeps flowing in. So you can keep spending 10k per month if your income is just so incredibly high. Your FIRE nest egg target size increases, the finish line moves further back, but you don’t care. What is the alternative? Cut back on all the nice things in your life, retire and do what exactly? I personally have no idea what to do with my life if I didn’t have a job.
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Agreed, two kids full time in daycare costs 5k per month already…
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so I came across as judgemental in my previous post, mostly because of my use of the word “insane”. I was using it as a current english terminology which does not imply that somebody is insane, but I have aended myprevious post and asked to read it as “very high”.
Mr money mustache on the other hand was and is very judgemental - I think is part of his appeal.
I think @finalcountdown has an impressive list of accomplishments:
- saving rate of 75%
- usage of ETF, financial situation which is excellent.
But he is asking if the budget makes sense, and it seems he thinks that it may be too high:
It feels like we are spending a fortune. Travel is important and although we could go lower this is probably one of the last things we would reduce…
To it seems that you are experiencing at least some kind of self-reflection in your budget. I will had some thoughts, all without knowing your situation exactly:
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Yes, compared to a lot of swiss households you are spending a fortune.
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Compared to other FIRE budget that I saw I don’t see any voice for charity, or any mentions of voluntary work etc. Maybe you implied in your budget, maybe not. Is just a discrepancy I’m observing, if you have the intention to give back something you should budget for it.
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24k traveling a year to me it implies a lot of planes trip. if you are FIRE, you can experience slow travel with no stress. Train, bikes,ferries, renting a van…all chepaer and better for the environment! Are you sure you are not projecting your current situation (traveling while working may include lots of plane to save time) to a new future where you have all time in the world?
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are you budgeting 4k for rent in your FIRE world as well? or is your current situation? if you are traveling, I would definitely spend less in rent for my living situation.
I think overall you are calclulating your FIRE target based on your spending now. Have you tried to calculate your spending while FIRE? You may need less money fr work clothes etc.
How big is the family? 1k for health insurance seems a bit too much if you are only 2 persons, particularly with so much stash you can easily afford the max franchise. I don’t see a voice for kids so maybe they are already grown up or not in the picture.
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but they are not in the indicated budget. @finalcountdown himself seems to think he is spending too much.
Except s/h/it didn’t talk about daycare.
I think it’s a lot of money but there isn’t much to say since the wage is superhigh and the expenses are generic. Who knows where he lives to pay 4k? 1k for food are 30chf per day, which can be 15chf x 2 on a Mensa at the workplace… and so on.
To answer the original question: The budget makes sense AND you are spending a fortune, like everyone in switzerland. You might save more only if you change your mentality, which of course it’s something very personal.
(my personal pet peeve is the cost of clothing, but it’s not your case since you have children. Or not?)
Unless you live in Basel-Stadt, the canton with the highest health insurance premiums. Just check comparis.ch yourself. Absolute cheapest health insurance (Assura, 2’500 franchise) is CHF 333.30 per month. If you add some one or two additional insurances, you easily reach 500.-
There is a huge gap between premiums for health insurances between the cantons.
You’re totally right. I only saw the 10k, but indeed it’s for two people…
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Grog and all, thanks for addressing the spend, I appreciate the feedback and thoughts. Indeed, we like our lives but also there is some diminishing returns on spending and we could cut without sacrificing much/any life quality.
Maybe starting with the end in mind - we budget 100k/y spend in retirement, but must say we havent even figured out which country to live in… so it could be less. The 3 years of travel is to do that while we can, it is a long time dream to slow travel around the world, we are talking backpacks and simple accommodation, not luxury cruises. Certainly we do not want nor do we need a 4K rent in retirement, right now this is pure convenience to work, very HCOL around here, even for Switzerland. And if you retire in Portugal or somewhere else, the spending could be MUCH lower (although the tax implications could cancel any savings, I have come to appreciate the lack of capital gain tax on stocks in CH 
)
We are a family of 3, 1 kid at college-age (so health insurance for 3 adults, and yes, that is the price in our Canton, shocking, we have max deductible even and used Comparis to find the cheapest).
What I will do over the weekend is to go through ACTUAL spend for last 12 months to get the real picture. Honestly, these numbers are my best estimates (except rent, health insurance).
And Grog on charity… (now I am inviting for punches I know)…you are right on the observation. We do not give anything for charity. Growing up in a high tax socialist country our engrained culture is probably “Government takes care of that, that is why we pay such crazy high taxes”
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Yes, indeed, sometimes referred to by the locals as the socialist/communist canton in CH.
High in taxes, healthcare premiums, property transfer/notarisation fees, etc., and the list indeed goes on.
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I am swiss and I’ve always believed that as well (say 90% of the cases). I believe if you come from a country that actually cares about people or not. (I’m looking at you USA)
Are you talking about Basel? I always thought that the French-speaking ones are the worst…
Yep Basel, and correct again, the French speaking cantons are no better.
So many of my colleagues and friends in Basel have fled to Basel Land.
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7 posts were split to a new topic: Charity vs Income Tax. Is Switzerland socialist?
Which is not really better in terms of taxes. You pay less taxes if you earn below 120k, but above Basel-Stadt is better. It’s better in terms of dividend taxation though (60% of dividends will be taxed vs 80% in Basel-Stadt). Talking about dividend payments from your own company.
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Taxation is one thing although yes, the gemeindes of Riehen and Bettingen in Basel Stadt are more attractive than most of the gemeindes of Basel Land. Basel Stadt gemeinde of course has higher taxation.
I am also referring to other costs such as for e.g. health insurance premiums, price of property, price of concluding the sale of property, taxation on inheritances, taxes on dividends (as you mentioned), etc.
In general, one would come out better in Basel Land from an overall cost of living perspective.
I definitely would have shifted earlier, but I had a restricted permit for almost 8 years and now I’m too close to the minimum requirement of 12 years before applying for naturalisation.
For 150k net income, you save 2’721 (Riehen) or 3’401 (Bettingen). In general, both Basel-Stadt and Basel-Land are not the best cantons for saving taxes. Therefore, Zug and Schwyz are much better.
The difference between Basel-Stadt and Zürich-City are not that big btw, especially if you are earning 150k or more.
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