We sold $100k worth of stocks! Are we still FI?

Yeah, I guess.

My wife and I decided a few months back that we’re reasonably certain we’ll move within the next few years. So of course we sold a bunch of stocks. Why?

Taxes or whatever. Read on as I try to justify my actions to the internet.

First, why do we want to move?

Our current neighborhood is decent. We like the neighbors, and it’s in the goldilocks zone of middle classness. An even mix of blue and white collar; everyone takes care of their shit but there aren’t any joneses to keep up with. We’re in the best school district in our city, and a half mile away from the elementary school where our son goes. Our house is about 1800 square feet; 3 bedroom ranch with an office. Enough space for two small kids and us.

On the flip side, though we’re in the best school district in the city, that’s kinda like saying you’re the smartest idiot. Our district lags behind the schools outside our city in multiple metrics. A big part of my reason to substitute teach was so I could recon our school system. We’ve got friends that are all about private school, speculating that public school teachers are brainwashing our kids with inaccurate propaganda. Having now worked in the school district, I can report back that this is completely false. The district is well run, and the teachers are doing what most teachers do; just trying to keep their heads above water.

That said, our intermediate schools aren’t that hot, and the high school is kinda meh. Overcrowding has led to the chaos which unfolds when teenagers are left unsupervised. Having taught there, I have directly observed this mess. Talking to teachers of other schools, this isn’t an issue in the better funded and less dense schools in our surrounding bedroom communities. It wouldn’t be the end of the world if our kids stayed here, as they’d get some practical knife fighting training, and maybe get to experiment with entrepreneurship through drug dealing. But it could be better.

Next is the area itself. Our little neighborhood has sidewalks, you can walk like a mile loop which is nice for a stroll. But once you leave our addition, it’s two lane busy roads with a ditch on either side. If you’re cool with walking through shin high grass on an uneven slope next to speeding cars, then I guess you could walk somewhere. Good luck biking anywhere. Our son takes the bus the half mile to his elementary school, which feels ridiculous. Due to the condition of the roads, our district has a policy that kids aren’t allowed to be dropped off on foot or bike. Understandable, but I’d love to be able to walk the kids to school, and have them do it themselves when they’re old enough.

Is this walk-centric view because I’m a hippy who wants to burn all cars in a heap? Not so much. Whenever we go on vacation, we go to a small town where you can walk to all the stores, parks, and restaurants. This is pretty sweet, as it’s much easier to get around with the kids since we don’t have to do the load/unload logistics, therefore lowering the bar for going out. Having tested this out a bunch, this has become something we really want.

Then there’s the house itself. Look, we don’t want a 4000 square foot McMansion, but it would be nice to have a little more space as these kids get older. And now that I’m semi-retired or whatever, my wife and I kinda walk over each other when she’s working at home and I’m trying to write or work on whatever passing fancy I’m doing this week. It’d help if we had some space for each of us to do our own thing.

Speaking of my wife’s work, that’s also a factor. She still likes her job, and got tapped to be a big part of a new factory that’s getting built. Problem is, it’s in another town on the opposite side of our city. She mostly works from home, and goes in 1-2 days a week. Right now one of her offices is 35 minutes away, and the other is 15. As this project builds, the 15 minute one will go away and the new one will be like 50 minutes away. And she’ll have to go to the office more. Blerg for her.

Finally there’s the cop thing. Everyone in our neighborhood knows I was a cop. Which is fine…most of the time. Occasionally though, shit happens and people come running to me with their issues. Neighbors had a domestic dispute thing going for a few weeks last month, and people kept trying to drag me into it. Double blerg. My response was the same as back when I was a cop; call the actual cops that work this area.

My old department had a policy where we weren’t allowed to take police action in our own neighborhoods unless someone was about to get injured or killed. This is a good policy; you don’t want to lock up the offending party in a domestic situation, and then be looking over your shoulder for the rest of your life because that dude lives 3 houses down and he’s going to get out of jail in a day or two. So whenever shit would go down, I always told my neighbors to call the cops which work this area. I thought this kind of stuff would drop off once I retired. I even went out of my way to tell all my neighbors that I’m not a cop anymore. Still though, they try to rope me in.

Look man, yeah-if someone is getting hurt by someone else, I will fuck up stop the offending party(or at least try). I think that’s the responsibility of anyone that is capable of doing so. But I didn’t retire so I could mediate other people’s shit for free. Too much drama, and I don’t like the third order consequences of such action.

Even after retirement, people are still asking me for help on this kind of stuff like once a month- speeding tickets, car got broken into at work, non-violent domestic fights, etc. I think people come to me because they want their problems solved without the hassle of getting the law involved. It’s understandable, but fucking annoying. So I would like to live someplace where I’m not the designated lightning rod of people’s stupid shit.

Weren’t we talking about selling stocks? Oh yeah….

The good news is, there’s a solution to all of our minor problems. The bad news? It’s going to cost us.

There’s like three small towns on the opposite side of our city, which are walkable, and half the distance to my wife’s work. According to the data and anecdotal evidence, the schools are way better. The inverse of getting what you pay for means we’d have to pay at least an extra $150k to get a house we’d like in one of these town. Hence us selling stocks. Plus the time to do it is now.

Am I timing the market? Do I think the market is at it’s peak, and now’s the time to cash out? Hell dude, I’ve got no idea. Maybe, maybe not.

What we are doing is timing our income. My wife is slowly working more and more, and slated to get a pay bump next year. I’m going back to part time work this fall, and I’ll run out of tax shelters early next year. This all means our taxable income is going up next year-say goodbye to 0% taxes on long term capital gains!

And that, my friend, is why we just sold $100K in stocks.

Which was actually kinda fun. I had never sold stocks before, so it was something new to figure out. I’d read how it’s super difficult to switch from accumulation to spending, and I love a good challenge. This seemed like the perfect opportunity to spend on something we actually valued, instead of trying to hoard more money for some distant future at the expense of our happiness right now.

We’re not in a huge hurry to buy the house, as we’d like to get childcare setup first, which takes about 6-9 months of being on a wait list, and we’d like to be close to nearby family while their first kid is still really young. And we want to be super deliberate about where we move; really want to make sure we pick a neighborhood that jives with us. Because of this, we ended up putting that 100k in a CD ladder, which was also fun. I’d never done that before, and getting like 5.3% interest is exciting!

But what about the FI? Are we still financially independent? Sorta.

If you go off the 4% rule then our current investments, minus the money we now have earmarked for a house, only covers about 75% of our average expenses. Oh gawd!! We’re not FI ☹.

However, if you count my VA disability pay (thanks PTSD? ), it more than makes up for the 25% gap. While I don’t count on this for the rest of my life, per the revaluation schedule it’s probably not going anywhere for the next 3-10 years.

Then there’s the childcare. We pay for full time daycare, even though our daughter is there only 6-7 hours a day. We do this for flexibility, and for my mental health. As I’ve detailed before, I tried being a full time stay at home dad, and it about broke me.

We’ll be paying daycare for the next 2-3 years, depending on when she starts kindergarten. There is an end in sight to this large chunk. Childcare is our biggest cost, and it accounts for 27% of our spending. Luckily, the VA pays about the same as our childcare costs. It’s almost like these two things are related……(spoiler alert, they are.)

Then there’s work. I tried not working at all, and it wasn’t amazing. Hence me going back to some part time work. And my wife actually likes her job, and though she’s working more, she still is part time with no desire to go back to full time. All this means we don’t actually need to withdraw from our investments. We can cover our current expenses with our income, and let our investments do the coast thing.

If I continue with my part time gig, we may be even at the point where we’ll have excess income. Then we’ll have the good problem of deciding whether to invest that money, or spend it now on cool family experiences before our kids become teenagers and hate us. Fun stuff ahead!

There you go. Much like that post I wrote for JL Collins’ new book (which I guess I made the cut for??!! woo!! ), we sold a bunch of stocks to try to make our lives better by spending on something that we value. And like before, it affected our FI status. But having chucked money on the pile for over a decade now, it didn’t rock the boat too much.