AndreNader5.24
00:00:00.000 | Hello, everybody.
00:00:09.120 | It's Sam from the Financial Samurai Podcast where I try to help you achieve financial
00:00:13.280 | freedom sooner rather than later.
00:00:16.120 | Today I have a special guest with me, Andre Nader, who I interviewed a year ago after
00:00:21.120 | he left Metta.
00:00:23.080 | And so I wanted to talk to him about life after Metta, what he's been doing with his
00:00:28.240 | newsletter, his thoughts on semi-retirement, FIRE, as well as how it's like having a
00:00:37.000 | wife who works in tech and who makes a lot of money.
00:00:39.980 | So welcome to the show again, Andre.
00:00:41.880 | Thank you so much, Sam, for having me back.
00:00:43.800 | So what's been going on since a year, since we last spoke?
00:00:48.400 | Yeah, we're coming pretty close to exactly a year since we last talked.
00:00:53.080 | And a lot has changed over that year.
00:00:55.980 | We spoke literally while I was on my severance after being laid off from Metta, being laid
00:01:02.840 | off in May of 2023 and then having the severance through the summer.
00:01:07.600 | And I was still trying to get my bearings.
00:01:09.360 | I had been at Facebook Metta for nine plus years, in tech for 15 years, working continuously,
00:01:17.200 | had always had a job since I was 16.
00:01:19.680 | So when we talked, that was the first time ever in the last 15, 20 years that I had time
00:01:25.800 | to do what I wanted, or even just like just had time period.
00:01:32.280 | And it definitely wasn't just what I wanted.
00:01:34.320 | I'm married, I have a six-year-old daughter, the restrictions on my time are obviously
00:01:40.080 | capped on both ends.
00:01:41.960 | But the last year has been really interesting and a good reflection on how I think about
00:01:48.560 | FIRE and it's kind of changed my mindset a little bit.
00:01:51.060 | And I'm looking forward to chatting more about all that.
00:01:55.040 | Tell me about the severance package because one of my roles if you're planning on retiring
00:01:59.720 | early is to try to negotiate a severance package because if you're planning on quitting anyway,
00:02:04.240 | there's no downside to trying to negotiate a severance package.
00:02:07.440 | So you got a severance package.
00:02:08.720 | Could you refresh the rough details if you're allowed and how that made you feel during
00:02:14.720 | your transition to no longer working?
00:02:16.640 | Yeah.
00:02:17.640 | No, the severance package was very generous.
00:02:18.640 | I think the benefit that I had was I was, I don't know if it's a benefit, Metta went
00:02:22.800 | through three plus rounds of layoffs.
00:02:25.920 | So I was in one of the final rounds.
00:02:28.420 | What that afforded me was having a very clear picture of what the severance offers were
00:02:32.480 | looking like.
00:02:33.480 | At that point, they were very cookie cutter standard.
00:02:36.420 | You knew exactly what you were going to be getting.
00:02:39.200 | There wasn't really too much room for negotiation unless you had some kind of extenuating circumstances.
00:02:45.160 | So the general package was one, being in California, we had the 60 days from the layoff period
00:02:56.480 | just by nature of like the Warren Act in terms of the amount of notice that they must give
00:03:00.600 | you before they do a mass layoff.
00:03:03.400 | So what they do is say that you're laid off in the end of May, but they still keep you
00:03:09.780 | on payroll just like you're getting a normal paycheck for the next 60 days.
00:03:13.360 | So that's all even before the normal severance.
00:03:16.160 | And then on top of that, they were giving I think around three additional months of
00:03:20.520 | full salary plus six months of health insurance and then two weeks for every year that you
00:03:28.920 | worked there.
00:03:29.920 | So I was there for nine years.
00:03:31.500 | So ended up being like a fairly substantial amount.
00:03:34.580 | For the entire year, I made probably like 80%, 85% of my total comp that I would have
00:03:42.000 | gotten anyway if I worked the entire year.
00:03:43.720 | And I only worked through May.
00:03:45.340 | So it ended up being a fairly, like you were saying, if you're going to fire, like doing
00:03:52.480 | a severance type fire, working your package, I didn't intentionally do this, but it ended
00:03:57.920 | up being a fairly good way to exit, if you will.
00:04:03.560 | And the health insurance was a big piece too.
00:04:05.840 | And what did you do with the money?
00:04:07.320 | Honestly, I treated it just like a normal salary that I was getting.
00:04:11.480 | I didn't do anything differently.
00:04:12.840 | So for me, it's always been very cookie cutter.
00:04:16.280 | I'm a bogglehead by heart, index funds, put it in to max out all my retirement accounts.
00:04:23.200 | But by May, I'd already maxed out all of those.
00:04:25.360 | So it was just really beefing up my taxable savings, which again, like all within like
00:04:32.360 | Fidelity, Vanguard, the standard VTI, VOO, also beefing up my emergency fund.
00:04:38.120 | So I think that was the big change too, is I had been a dual income household, which
00:04:43.240 | meant that I had a little bit of security from if I lost my job, my wife still had her
00:04:48.800 | job.
00:04:49.800 | So we didn't need to have, say like a year of savings.
00:04:51.800 | My emergency fund was probably around six months of our essential expenses.
00:04:56.520 | But now after being laid off, one of the things I used the money for was, hey, now we're a
00:05:01.040 | single income household.
00:05:02.040 | It's fine if I lose my job.
00:05:03.400 | We had always been very disciplined around keeping our expenses within one of our salaries.
00:05:09.740 | So we had no issue maintaining our current lifestyle.
00:05:13.400 | But if she lost her job as well, that might change.
00:05:17.200 | So I increased my emergency fund up to 12 months and just had additional like cash buffer
00:05:23.920 | just in case, because I think the future at that time was less than certain.
00:05:28.640 | Right, right, right.
00:05:30.760 | And so what do you think your after tax savings rate fell to once you lost or once you left
00:05:37.180 | Meta?
00:05:38.180 | Yeah, the after tax savings rate, still north of 40 plus percent, still able to max out
00:05:44.340 | all of my wife's retirement accounts, including the mega backdoor after tax.
00:05:50.360 | So we're talking about contributing that $69,000 there plus backdoor Roths, which is 7k per
00:05:59.320 | person plus more in addition to that.
00:06:03.680 | Wow.
00:06:04.680 | 40% still.
00:06:05.680 | Yeah.
00:06:06.680 | So still, again, within San Francisco, we had always kept our expenses within reason.
00:06:11.380 | And then the honest truth is that our tax salaries, me at Meta and then her at Uber,
00:06:16.120 | had just continued to grow over that time period, over the, like she has been at Uber
00:06:19.840 | for almost a decade as well.
00:06:21.800 | So we have two, not executive level, but like senior level employees at big tech earning
00:06:30.400 | a good living and keeping our expenses in check, like our largest expenses, rent being
00:06:35.540 | in San Francisco, and then childcare followed by groceries.
00:06:39.280 | So within reason, keeping those within check had allowed us to continue to save and be
00:06:46.760 | prepared for a situation like this where we dropped to an income, because ultimately my
00:06:50.160 | goal was to fire relatively soon.
00:06:53.160 | So this was kind of going according to plan, if you will, just not the original plan that
00:06:59.080 | I had neatly mapped out.
00:07:01.680 | So tell me this.
00:07:02.880 | So just for a listener's perspective, can you give an idea of the total compensation
00:07:07.560 | range that your wife earns?
00:07:10.160 | Yeah.
00:07:11.160 | I think one of the largest pieces, and again, this is a roundabout answer, one of the largest
00:07:16.560 | pieces of compensation within big tech is coming from equity, particularly as you get
00:07:20.360 | more senior.
00:07:21.360 | And if you look at Uber's stock price over the past two years, it's ended up doing exceptionally
00:07:27.960 | well, like finally.
00:07:29.520 | They IPO'd at $40, then it kind of floundered for the last couple of years.
00:07:33.480 | But then this past year, they hit highs of $80, and now settling in like the $60 to $70
00:07:40.520 | range.
00:07:41.520 | So easily like getting into the mid six figures ranges, which is not, again, like, and both
00:07:49.200 | of us were in those similar bands.
00:07:53.960 | And does every year a tech worker get new RSUs topped up every single year, or is it
00:07:59.400 | at every four years or whatever chunk?
00:08:01.920 | Yeah.
00:08:02.920 | That's a really good question.
00:08:03.920 | I think that's where it's important to understand the compensation philosophies for every tech
00:08:06.960 | company.
00:08:07.960 | Each one is very different.
00:08:08.960 | Meta, for example, every year, you'll get a new annual stock refresher that vests over
00:08:14.240 | four years.
00:08:15.680 | And that refresher is entirely formulaic.
00:08:18.120 | And it's not based at all on how much equity you already have, versus Uber and Amazon and
00:08:25.540 | many other companies, they have what's called a target compensation model, where the amount
00:08:30.480 | of refreshers that you get kind of looks back at how much equity you already have, to kind
00:08:35.080 | of make sure that you're getting paid at least a certain amount of total compensation.
00:08:40.000 | So with Uber stock price increasing significantly, that refreshers in many cases were less than
00:08:46.120 | they had been in the past, because they were really trying to keep people within these
00:08:49.400 | target bands.
00:08:50.520 | So that's where it's like, it can be very different, like being at Meta, where the stock
00:08:55.400 | prices is all your past equity has also drastically increased, but you're still getting those
00:09:00.360 | refreshers at the same net dollar value, versus Uber, if the stock does well, then your future
00:09:07.080 | refreshers won't be as high.
00:09:08.760 | Okay.
00:09:09.760 | Well, let me ask you this.
00:09:10.760 | So one of the things that I try to tell readers is go try to make a lot of money to realize
00:09:18.080 | making a lot of money via W2 income is not the dream or amazing thing that you think
00:09:24.360 | it is, because it takes a lot of stress, a lot of work, just a lot of dedication.
00:09:29.320 | And so I'm going to guess that your wife makes between 400 to $600,000, and you made something
00:09:35.520 | similar, given that's what you just said.
00:09:37.760 | So now that you've gone from, let's say, 800,000 to 400,000, how does that feel?
00:09:44.520 | Because I feel that once you make like 400,000, I mean, life is good.
00:09:48.880 | Once you make over like 250,000 combined household income, life is pretty good.
00:09:53.600 | So to strive for way above that, I don't think is worth it after so many years.
00:09:59.320 | I mean, definitely try it for as long as possible.
00:10:01.640 | But afterwards, it's like, "Eh."
00:10:03.220 | So how does it feel now, your lifestyle and overall unit going from 800 to $400,000?
00:10:10.560 | Honestly, very little difference in our life at all.
00:10:14.120 | We've changed nothing.
00:10:16.000 | We're actually now looking at renting a new place that's closer to my daughter's school
00:10:21.120 | where we can just walk to school, and looking at almost doubling the amount we're paying
00:10:25.400 | in rent.
00:10:26.400 | So we're increasing our expenses as we're kind of going in and cutting our overall salaries
00:10:32.480 | in half.
00:10:33.760 | So I think, again, the amount that you make once you hit a certain point, it just becomes
00:10:38.280 | decoupled from your needs in many cases.
00:10:44.600 | If you're, again, you can always spend as much as you want.
00:10:47.960 | But I've kind of found we've kind of like capped out around, like right now, been pretty
00:10:53.000 | consistent around like $140,000 in spend per year, much of that being housing and childcare.
00:11:00.340 | And then when my daughter left her private preschool and joined school, the amount that
00:11:07.060 | you save ends up just shifting to other places.
00:11:09.320 | And we kind of generally stay within that $140,000 per year.
00:11:14.140 | And one of my goals this year was to actively spend more, because I felt like we weren't
00:11:20.460 | spending enough on things like family vacations, wanting to invest more into being where we
00:11:27.500 | living in a place that we enjoy spending time in, because we do spend a lot of time at home,
00:11:32.340 | and being able to do things like walk to school and just valuing those types of things over
00:11:38.380 | continuing to save.
00:11:39.380 | Again, 15 years in tech, dual income, the amount that we need to save to hit our goals,
00:11:47.540 | it just becomes diminished, particularly in how the market has done over the past decade.
00:11:52.640 | So let me ask you this, because I'm looking at a household as a unit, right?
00:11:56.100 | Not as an individual.
00:11:57.100 | So I see one parent who's working, making good money, another parent who has way more
00:12:03.060 | freedom, who can do more childcare and pursue his entrepreneurial endeavors, for example.
00:12:09.500 | To me, I see that as a healthier balance versus two parents grinding away in tech or consulting
00:12:18.580 | or finance.
00:12:19.760 | But that's just my opinion.
00:12:20.760 | I'm just stepping back and saying, "Okay, both of you guys don't have to suffer.
00:12:25.820 | If only one of you have to, quote, 'suffer by working' and the other has the freedom,
00:12:30.020 | that sounds better.
00:12:32.700 | What are your thoughts on giving up this substantial amount of money, let's say, again, $400,000
00:12:39.020 | to $600,000 to be a stay-at-home parent?
00:12:41.420 | Do you think it's worth it?
00:12:43.780 | And if not, why not?
00:12:45.100 | I'll actually flip a little bit of what you said.
00:12:48.340 | I think being a primary caregiver and primary stay-at-home parent is way harder than working
00:12:58.780 | in big tech for me personally.
00:13:00.980 | I found it definitely rewarding and I value the time that I'm spending with my daughter
00:13:06.580 | a lot, but it is way harder.
00:13:10.020 | The time that you spend at work is a little bit more predictable.
00:13:13.340 | You can control it a little bit more.
00:13:15.180 | You can take breaks when you want to.
00:13:17.780 | That's not the case when you're dealing with your child.
00:13:22.060 | You don't get to dictate your breaks.
00:13:23.500 | You're not in control of your time as much.
00:13:26.340 | And that's something that I didn't fully appreciate until getting laid off and then taking on
00:13:33.340 | that primary caregiver responsibility and really kind of like leaning in a little bit
00:13:37.980 | more on, "Hey, I don't want to jump back into the W-2 grind.
00:13:43.700 | I want to take some time off."
00:13:45.780 | And with that comes the expectation of taking on more of the household duties, childcare,
00:13:50.540 | and just the general household management pieces of it.
00:13:53.940 | And from a pure, I don't know, yeah, I think that these more challenging than anticipated
00:14:02.300 | I think is the answer.
00:14:03.580 | Yeah.
00:14:04.580 | I totally feel you.
00:14:05.580 | I wrote a post called something like, "Looking forward to going back to work as a vacation
00:14:12.020 | from being a stay-at-home father."
00:14:14.740 | And so is your daughter in school full-time now?
00:14:18.500 | Yeah.
00:14:19.500 | She's in kindergarten at the end of the year.
00:14:21.020 | Okay.
00:14:22.020 | So this is something that I've been thinking about because my daughter is not in school
00:14:26.500 | full-time.
00:14:27.500 | She'll start full-time school September 2024.
00:14:30.460 | And then I'll have two children who are in school full-time for 40 plus hours a week.
00:14:34.920 | And I feel that there's going to be this void to fill.
00:14:37.540 | And so I feel that the responsible thing as a parent is to actually do some work, some
00:14:42.420 | meaningful work that can generate some income and buffer our finances and pay for crazy
00:14:46.820 | college education and all that stuff.
00:14:50.500 | How do you spend that time now that you don't have work and your daughter's in school for
00:14:56.100 | seven, eight hours a day?
00:14:57.740 | Yeah.
00:14:58.740 | I actually think this is the best time to fire in terms of when your child is growing
00:15:07.100 | up.
00:15:08.540 | Early childhood is the hardest thing ever, particularly zero to when you get to full-time
00:15:14.780 | school.
00:15:17.180 | It's just extremely challenging.
00:15:18.340 | But once you get to school, like you said, you have a good 40-hour chunk where they're
00:15:22.580 | at school and you have time to do things.
00:15:25.380 | Yes, there's a significant amount of time with things like grocery shopping, laundry,
00:15:29.780 | and all of those other miscellaneous household activities.
00:15:34.100 | But there is also still a lot more time.
00:15:37.140 | And in terms of responsibility, honestly, because our finances are in a place where
00:15:42.460 | we're not needing my salary to hit our goals and live the life that we're wanting, it's
00:15:47.160 | been much more in terms of how do I want to spend my time in a way that's fulfilling and
00:15:53.060 | that I'm getting value?
00:15:54.340 | Because that's the one thing I didn't realize as much is how much purpose that you get from
00:15:57.660 | your nine-to-five job and just how much the built-in reputation that you have just from
00:16:04.660 | I work at Meta.
00:16:05.940 | And when I'm talking to other parents, like, "What do you do?"
00:16:08.460 | Like, "Oh, I work at Meta."
00:16:09.860 | They just have an instant answer to things, an instant level of credibility.
00:16:14.100 | And once that's removed, it's just a different dynamic.
00:16:17.020 | And needing to figure that piece out a little bit more has been one that I didn't fully
00:16:21.660 | value.
00:16:23.640 | So then now when I'm spending my time, I'm doing things like I write my newsletter, Fangfire,
00:16:28.540 | which is all around helping tech workers do exactly what I do, like position themselves
00:16:32.360 | where they have the optionality in their lives for being able to be financially independent
00:16:37.080 | and maybe retire early.
00:16:39.760 | And that's one of the things that I found is like, "Hey, it's fulfilling."
00:16:43.080 | But honestly, I'm not spending as much time as I thought I would be doing those things.
00:16:46.960 | I'm also spending time going within San Francisco, going onto the different piers around the
00:16:51.720 | city and going fishing, but there's only so much time you can really go and do those things.
00:16:57.480 | So I think whether it's responsible or not, a lot of it has just been kind of trying to
00:17:04.240 | find purpose and like the meaning of life in the absence of forced work and just kind
00:17:10.880 | of like reflecting on a lot of the opportunities that I've had in my life that kind of like
00:17:16.400 | put me in this weird position.
00:17:18.660 | So a lot of my view is around making sure that I'm not doing anything that's sacrificing
00:17:24.760 | the potential for my daughter to be in that same potential position in her future.
00:17:28.760 | Because a lot of it is, there is like some level of guilt like, "Hey, maybe I should
00:17:32.480 | be working.
00:17:33.480 | Maybe I should be saving more money or being able to put her in, like throw more money
00:17:39.800 | at raising a child type things."
00:17:42.920 | Like you can spend as much as you want on summer camps and tutors and external activities
00:17:48.280 | and all of those things.
00:17:49.280 | But right now, I think we're in like a happy medium.
00:17:52.160 | Yeah, it's interesting because I came up with this concept called the provider's clock.
00:17:57.640 | And it's kind of like the biological clock for men where I feel like men are hardwired
00:18:02.640 | to provide some more than others.
00:18:05.280 | And so when I had my children, I felt, "Uh-oh, I better start saving and investing more."
00:18:11.320 | Even though I had all these calculations in place that said we would be okay.
00:18:15.000 | And the same thing happened when our daughter was born in the end of 2019.
00:18:18.720 | And so I feel that if my kids are going to go to school, well, they're going to an independent
00:18:25.000 | Mandarin Immersion School that costs a lot of money.
00:18:27.640 | I feel my provider's clock is ticking louder.
00:18:30.800 | I'm thinking, "God, I got to do something in terms of consulting or something to provide
00:18:34.920 | more income."
00:18:37.280 | Because I can't play pickleball or tennis all day, and I can't meditate all day or write
00:18:41.160 | all day, my fingers will fall off.
00:18:43.320 | So I need to do something to generate that income.
00:18:46.280 | So do you have...
00:18:47.960 | How much of that urge in you as a man, as a father, is there to try to go back to work
00:18:54.120 | and make money again, or a lot more money?
00:18:57.280 | I think there's less of a desire to make a lot of money again, just because there's not
00:19:03.360 | as much of a need.
00:19:06.840 | Right now, I had opportunities immediately after leaving Meta to just jump right back
00:19:12.800 | into tech, probably making 500K without too much trouble.
00:19:17.800 | That is something that was a huge opportunity that I could have had multiple different places,
00:19:24.520 | whether it's both within Feng as well as within the startup world.
00:19:27.920 | Obviously, the startup world, the compensation upfront isn't as high as within Feng.
00:19:33.400 | But it just wasn't as appealing to me.
00:19:36.280 | It was one where it wouldn't incrementally change my life or my family's life taking
00:19:42.560 | on that job again.
00:19:45.280 | And I think I'm in a unique position in my life right now where I don't need to rush
00:19:49.280 | back in and take on a role like that again.
00:19:53.520 | Even if it's like, I can decouple the earning money piece from the equation and really kind
00:20:00.360 | of think about, is this how I want to be spending my time?
00:20:04.120 | And then again, now I'm doing some of these newsletter things and financial coaching.
00:20:09.680 | But if I was focused on finances and earning money, I'd be doing things much more in a
00:20:15.000 | different way.
00:20:16.000 | It would be much easier just to go back into tech by far than trying to do my own solo
00:20:21.920 | thing.
00:20:23.120 | And really it's just around, I don't need to be focused on money and it kind of skews
00:20:27.840 | and changes the way that you prioritize things.
00:20:30.840 | So how important is having a wife who works in Feng who makes a lot of money impacting
00:20:37.860 | this decision?
00:20:38.860 | So in other words, if she lost her job, who is the one who is going to actually want to
00:20:44.720 | go back to work?
00:20:45.720 | Or how would you feel?
00:20:46.720 | Yeah, no, that's a good question.
00:20:48.400 | I think if she lost her job, honestly, I think it would be mostly fine.
00:20:51.560 | I think we've modeled things out where we can fire, but maybe not fire in San Francisco.
00:20:56.840 | I think that's where there's some potential compromises.
00:20:59.720 | We're getting close to fire territory, but fire in San Francisco, I think is in a different
00:21:06.080 | ballpark overall, just due to the cost of living and rent and housing overall.
00:21:12.760 | And what did you say that number was in your newsletter that you think is the fire number
00:21:16.720 | in San Francisco?
00:21:17.960 | I think right now, the fire number for me and my household of spending 140K, but then
00:21:23.400 | also factoring in college and health insurance, I think it was getting around 5.6 million
00:21:28.840 | would be like, "Hey, we have health insurance paid for on the marketplace, ignoring subsidies,
00:21:34.000 | and we're paying for four years of in-state tuition at Berkeley plus room and board."
00:21:38.960 | That 5.6 will get us there.
00:21:43.280 | But that doesn't seem like buying a house.
00:21:47.840 | It doesn't assume a lot of the types of things that we may want if we were to really be focused
00:21:53.880 | on it even more.
00:21:54.880 | But I think if we both lost our jobs and had to go back to work, I think we'd figure it
00:21:59.680 | out together.
00:22:00.680 | I think the biggest thing in terms of marriage, it's a partnership and needing to figure things
00:22:08.120 | out.
00:22:09.120 | I would have no problem if my family needed it, going back and getting a job.
00:22:16.140 | That's the number one thing.
00:22:17.140 | I always make sure that the things that I'm doing are not sacrificing for my family.
00:22:21.560 | Because I think that's one of my central tenets is all around having my family have financial
00:22:27.180 | stability is really important because it's something like me growing up, I had extreme
00:22:32.020 | fluctuations in wealth that I personally is one of the things that really influenced my
00:22:37.260 | own fire path and my own desire to have my family not deal with that.
00:22:41.980 | So I think if the stability piece was ever at risk, then I'd roll up my sleeves and jump
00:22:47.500 | back into tech, no problem.
00:22:49.620 | Yeah.
00:22:50.980 | Let me perhaps paint a scenario and give you some anxiety.
00:22:54.860 | And let me know if there is anxiety if I ask you this question or paint a scenario.
00:23:00.220 | So right now you rent in San Francisco and you send your daughter to public school.
00:23:05.860 | What if I were to say, you know, your wife comes home and says, "It's actually my dream,
00:23:12.900 | Andre, to own a single family house with four bedrooms, three bathrooms in this neighborhood
00:23:18.700 | for 3.5 million dollars."
00:23:22.340 | And also, you know what, this public school, she doesn't seem to be really getting enriched
00:23:28.860 | as much as I'd like.
00:23:30.340 | Her friends, she's not making friends that I want her to have or whatever it is.
00:23:35.940 | And I would like to send her to a private K-8 school.
00:23:40.620 | Let's say it's like San Francisco Day School or something and it costs $50,000 a year.
00:23:47.120 | So in other words, your wife wants this and you're thinking to yourself, "Well, okay.
00:23:53.100 | Well, one of the best things we can give our children is the best education possible.
00:23:57.300 | Not money, but the best education possible."
00:24:00.360 | How would you think about that scenario?
00:24:02.340 | Because this is a scenario that many couples in FANG or in finance or in tech who make
00:24:07.820 | six figures a year think about.
00:24:11.500 | They think about their houses and their children and also cars and all that.
00:24:16.540 | How do you think about that?
00:24:17.540 | Yeah.
00:24:18.540 | I think if I ever needed to sacrifice for my daughter's future, like I would never make
00:24:24.220 | that trade off and always want to make sure that she's set up for success.
00:24:28.060 | So for me, what that involves is knowing that I'm going to need to be flexible with my decisions.
00:24:34.340 | So right now, the reason we stayed in San Francisco was because we got into a public
00:24:38.600 | school in an area that we were happy with.
00:24:40.540 | We're in a great Spanish immersion program that just happens to be down the street from
00:24:45.420 | us in a neighborhood that we were wanting to be closer to.
00:24:50.160 | So I feel like I could see myself now through fifth grade within that place.
00:24:55.720 | But the reality of public schools in San Francisco is that there's a lot of unknowns and the
00:25:01.060 | variability in schools is pretty high.
00:25:04.600 | So I think as we're going into things like sixth grade and middle school, if it ends
00:25:10.400 | up being where we don't get into a school or the schools are underperforming or San
00:25:16.640 | Francisco unifies school districts, makes decisions that we don't fully agree with,
00:25:21.600 | then I would wholesale be changing our decisions, whether that's private or leaving for another
00:25:28.880 | city in the peninsula or leaving the Bay Area.
00:25:33.840 | Because again, my goal is all around just making sure that she's set up to be successful
00:25:39.200 | and doing it in a way.
00:25:42.200 | It's interesting.
00:25:43.200 | That's my view there.
00:25:44.200 | Because again, the other position could have been, I think, the direction that you're going
00:25:48.840 | in is I'll go back to work, I'll jump back into tech, I'll earn my big salary again and
00:25:53.300 | just pay the private school costs and pay for that $3.5 million house.
00:26:00.640 | For some reason, I think for me, my default is I would love to be in an area where there's
00:26:06.480 | strong public schools and by nature of fire and not being tied down to the Bay Area, I
00:26:13.640 | would be able to shift gears and relocate and have that flexibility in mind to be able
00:26:19.840 | to do that without needing to increase expenses in the Bay Area.
00:26:23.360 | Because it's already hard enough, as is in the Bay Area, adding in all these other costs,
00:26:28.200 | it's one of those ones where you start asking the decision of like, why are we here?
00:26:32.240 | Why not anywhere else?
00:26:33.240 | I love the Bay Area.
00:26:34.240 | That's the reason I've been here a decade.
00:26:36.400 | Even though I planned on leaving every three years, I said I was leaving.
00:26:39.360 | But then now, 10 years in, I'm not leaving anytime soon.
00:26:42.800 | Well, that's the thing.
00:26:43.800 | I feel that you've been here 10 years, you've been saying you're going to leave every three
00:26:46.720 | years.
00:26:47.720 | I think with an 85% probability, you're going to stay here until your daughter graduates
00:26:52.600 | high school.
00:26:53.960 | And then the funny thing is, I mean, it's not funny, like getting into any UC school
00:26:59.600 | nowadays, I mean, I went to Cal for business school, is like impossible.
00:27:03.600 | And so, but the thing is, you could get into one of maybe like a second tier private school,
00:27:10.160 | because you know, the acceptance rates are lower, and you can pay more money.
00:27:14.040 | So I would also not bake in being able to get into UCLA, Berkeley, San Diego, nothing.
00:27:20.100 | And you'd have to go the expensive private university route.
00:27:23.240 | Have you modeled that into your future cash flow?
00:27:27.680 | I haven't modeled in, I used UC Berkeley as just like one of the more expensive UCs, especially
00:27:32.680 | in terms of most of it's on the room and board side, and the private school, but nobody gets
00:27:37.480 | into Berkeley anymore.
00:27:38.480 | It's like, you can't you can't use that as the baseline, a school with a 5% acceptance
00:27:43.520 | rate as the baseline, but the baseline is just in terms of the expenses like every other
00:27:47.240 | like it's in line with other other UCs.
00:27:49.720 | And I think like I went to a public university, my wife went to a public university.
00:27:56.200 | And I think that clearly biases us like we both went to like, public schools in Texas
00:28:00.760 | growing up and then public universities in Texas.
00:28:04.520 | And just seeing how like, yes, going to the the top tier universities has a clear advantage
00:28:12.960 | over everything else, but that doesn't entirely determine your outcome in life.
00:28:17.920 | So I think for us, there has that has that like, inherent edge in terms of like, you
00:28:23.560 | know, like, you can like 95% of it is what you put into it.
00:28:27.240 | And the other 5% is the opportunities that you're put into place to kind of take advantage
00:28:34.000 | of.
00:28:35.000 | Right.
00:28:36.000 | Well, I'm really glad you said that you did have a job opportunity that paid you 500 grand
00:28:41.760 | and you basically said no, to do your own thing.
00:28:46.280 | So that that's actually, you know, the proof, the test, really, when you're presented with
00:28:51.960 | the opportunity, and you actually turn it down, that can show that you are comfortable
00:28:56.720 | with your finances.
00:28:58.000 | The other test of fire is when you don't have a working wife making big bucks.
00:29:03.800 | I think many people would agree with that.
00:29:05.120 | And that's the funny phenomenon in the fire community.
00:29:07.440 | There are actually many male bloggers or podcasters who say they're financially independent and
00:29:13.620 | retired early, but then they have working wives making big bucks.
00:29:17.880 | They don't acknowledge them.
00:29:18.880 | I listened to a podcast the entire episode and the guy was talking about how he was having
00:29:22.280 | a great life and he's being a dad, but no acknowledgment whatsoever of his partner.
00:29:28.140 | Why do you think that is?
00:29:29.140 | Yeah, that's a really good question.
00:29:30.140 | I think there's a lot of like male ego that goes into place.
00:29:32.840 | That's one thing I've thought about a lot where when I decided I didn't want to go back
00:29:38.440 | to work anymore, did I feel comfortable saying I was fired?
00:29:42.300 | And I thought there was a lot of like hubris in that, like I could never imagine a woman
00:29:47.880 | deciding to stop working and being the primary caregiver ever saying she was retired.
00:29:54.160 | There's that built-in bias just around like, "Oh, she's stopping working to be a stay-at-home
00:29:59.640 | mom."
00:30:01.120 | And for a male in the fire community, I think it's just easier to say, "Oh, I'm retiring
00:30:07.960 | early even though my wife is working and she's the one that's paying all the bills."
00:30:13.640 | So I consider myself like semi-retired and there's like a heavy emphasis on semi and
00:30:19.280 | really just a primary caregiver who has a lot of flexibility with his time, particularly
00:30:25.240 | because my daughter is in school most of the day.
00:30:29.120 | So I'm able to make decisions where the financial piece isn't there.
00:30:32.080 | But I can only say that because I have a working wife and I've had a working partner throughout
00:30:39.680 | our entire adult lives and I wouldn't be where I was or where I am right now or in the position
00:30:45.760 | I am if that wasn't true.
00:30:47.920 | So I owe a significant amount to that partnership because again, it's much harder doing it solo
00:30:56.160 | and if you have a partner, especially within tech where you're both earning high salaries,
00:31:00.400 | like it's just much easier, particularly when much of that time was dual income without
00:31:04.600 | any kids living in a one bedroom within San Francisco, the savings racks up pretty quickly.
00:31:10.680 | So then when you do have kids, then all of a sudden you can kind of like balance things
00:31:14.520 | a little bit more.
00:31:15.520 | But it's one where there's just so much like ego on the male side where it's just easy
00:31:22.400 | to say like, "Hey, I'm retired now even though my wife is still the one paying the bills."
00:31:28.280 | What about from your wife's point of view, do you think there could be any such thing
00:31:33.040 | as resentment from your wife that you have so much free time while she's working?
00:31:37.760 | Because obviously work is not all raindrop and gummies all the day, there's like meetings
00:31:44.520 | and banging your head and trying to do this and it's the stress.
00:31:48.280 | How does she feel about it?
00:31:49.280 | Yeah, I think she's been very supportive.
00:31:50.560 | I think that we did have a lot of conversations around what it looks like and our approach
00:31:54.840 | has kind of evolved over the past year that I've now kind of officially gone semi-retired.
00:32:01.880 | Initially, I think I treated it and treated my responsibilities at house and in the household
00:32:07.840 | the same as if I was working.
00:32:09.680 | I thought I was a 50/50 parent taking on half of the responsibilities.
00:32:14.560 | I would always do pick up and drop off already.
00:32:17.080 | I would always make dinners.
00:32:18.720 | And I thought that was 50%.
00:32:20.040 | I think the reality was that it wasn't even close to 50%.
00:32:24.440 | I think in my mind, I thought I was an equal partner.
00:32:27.880 | But having even more for childcare, for all household responsibilities and all those pieces,
00:32:36.620 | but by now being in this position where like, "Oh, I'm the primary caregiver now," she made
00:32:41.960 | it clear to like, "Okay, if that's the case, then you also need to step up on the household
00:32:46.720 | pieces."
00:32:48.340 | And I think it took us a while to find the right balance and rhythm and it's one that
00:32:52.200 | we're continuously working on because it's new for us.
00:32:54.220 | We've been together for 15 years, married for 12.
00:32:57.740 | And we've always been in this shared responsibility dynamic where we're both working and we both
00:33:04.320 | have limited time to take care of everything else.
00:33:06.800 | So it was kind of like in survival mode, if you will, on the other things.
00:33:10.340 | But then now, the dynamic shifted.
00:33:12.040 | I have time and there's not an excuse for the laundry to be piled up.
00:33:17.880 | There's an excuse for the birthday parties not to be planned and the summer vacations
00:33:25.440 | and the camps.
00:33:26.820 | And I just had no idea of how much time all these small little things take.
00:33:31.500 | I had to infiltrate the mom groups on Facebook to figure out when summer camps are.
00:33:36.280 | There's like a cabal of Bay Area mom groups where they have secret spreadsheets and war
00:33:42.140 | rooms around every single week of the summer when all the best summer camps are.
00:33:46.520 | And it's impossible to find unless you're in these mom groups and they're open and willing
00:33:51.560 | to allow males in, but you have to physically search for the mom group pieces.
00:33:57.500 | So I think it's one where the dynamic has changed and I've had to take on more responsibilities
00:34:04.500 | that I thought I was already doing, frankly.
00:34:06.900 | I thought I was already doing a lot, but it was very clear that I wasn't.
00:34:11.820 | And we, over time, got to a better place.
00:34:14.540 | Not there yet.
00:34:15.540 | My wife heard this.
00:34:16.540 | She'd be like, "Hey, you still haven't done X, Y, and Z yet."
00:34:20.260 | But it's one where the working on, and I think the biggest thing is acknowledging it.
00:34:24.900 | And there's a really good card game we played.
00:34:27.740 | It's called Fair Play.
00:34:29.020 | And it physically has cards of every single responsibility that you typically have in
00:34:32.880 | a house.
00:34:33.880 | And you deal the cards around who's going to take ownership over each of those things.
00:34:37.940 | And we had done it while we were working.
00:34:39.200 | And then once I stopped working, we had to redo it.
00:34:41.820 | And now because I had so much more time, more of the cards fell in my lap.
00:34:45.220 | I think that was the clear outcome from just having more time doing available to me.
00:34:54.420 | Yeah.
00:34:55.420 | Marriage is a work in progress.
00:34:56.700 | And there's no such thing as 50/50.
00:34:57.940 | So, if you're seeking for 50/50, I think you're going to be severely disappointed.
00:35:02.420 | If you're the stronger person, it's actually up to you to lift the baggage into the upper
00:35:09.860 | container of the airplane.
00:35:11.460 | It's not 50/50.
00:35:12.460 | So, stop thinking 50/50, I think.
00:35:15.140 | For those of you in partnerships and marriages.
00:35:19.300 | As we conclude this episode, I'm curious to know what's next.
00:35:24.660 | Because to me, there's a lot of FOMO in the San Francisco Bay Area and big cities like
00:35:30.020 | New York, Los Angeles, Seattle.
00:35:32.140 | Here there's tech and AI FOMO.
00:35:34.340 | And you came out of tech, right?
00:35:35.660 | So, at least you're still hedged with your wife in tech.
00:35:38.700 | She's going to benefit with Uber stock doing well.
00:35:41.180 | But now there's AI mania.
00:35:43.860 | Do you feel that FOMO?
00:35:45.260 | Like the itch to get back at all into the field?
00:35:49.620 | I think there's definitely some FOMO, particularly as I left, then Facebook stocks literally
00:35:54.580 | skyrocketed to all-time highs immediately afterwards.
00:35:58.460 | But there's the FOMO of looking at those spreadsheets that I had around what my total compensation
00:36:03.500 | would be this year if I still had all the equity that I had.
00:36:07.680 | But then I have to fight it and be like, "Hey, my life wouldn't be any different."
00:36:12.540 | I hit my goals and continuously ground myself and like, "Hey, what are my actual goals in
00:36:17.180 | life and what do I want to achieve and do I need to be working to do that?"
00:36:22.500 | But I think the FOMO is there.
00:36:23.500 | I think that's the reality of it, particularly now within the, "Are we heading into a new
00:36:28.140 | world with AI?
00:36:30.060 | Is the stock market going to continue to grow in the same rate that it has in the past?
00:36:36.340 | Should I be taking advantage of this golden opportunity and try getting into AI and leaning
00:36:41.600 | in and doing that?"
00:36:42.820 | I'm in San Francisco, I'm in the mecca of AI, am I making a mistake by sitting it out?
00:36:50.620 | And that's what I think about and I'm trying to stay close to all of those things.
00:36:54.620 | I think that's one of the things where through my newsletter, it's all around helping big
00:37:00.020 | tech workers be successful financially.
00:37:03.380 | So that forces me to kind of stay plugged in.
00:37:05.820 | So I think as things kind of shift, I'm still plugged in on developments and still plugged
00:37:11.940 | in on the dynamics at each of the big tech companies.
00:37:17.500 | And I think if, again, I can always go back to work.
00:37:21.180 | I think particularly now, again, I'm one year out, so it's still fresh.
00:37:23.580 | I think as it gets closer to being five years out, I think then when it starts getting harder.
00:37:27.740 | I think two, three years out, actually.
00:37:29.780 | Yeah.
00:37:30.780 | I'm in that Goldilocks zone where the option of going back would be relatively easy.
00:37:34.320 | I think it gets exponentially harder from there.
00:37:38.260 | But as of right now, as of hitting that one year milestone, I'm still very content, again,
00:37:45.500 | with the hedge that my wife is still in tech and still benefiting from that.
00:37:50.580 | One of the things I think about is, because I can't get a job in tech, I don't have any
00:37:56.420 | tech skills or nothing.
00:37:58.740 | The way I've thought about it since coming to San Francisco in 2001 is to go long real
00:38:03.480 | estate because every single tech worker, AI, whatever, needs a place.
00:38:08.080 | And by far, the number one thing that people with large financial windfalls do is they
00:38:14.040 | buy a home regardless if the math makes sense or not.
00:38:17.960 | And so what you've seen in the Bay Area and other international cities like New York City,
00:38:21.960 | Hong Kong, Singapore, London, is that the math seldom makes sense from a cash flow perspective,
00:38:28.240 | but it tends to make sense if you see capital appreciation.
00:38:31.880 | So I know you're renting and you are very pro-renting and I think you have a frugal
00:38:37.760 | mindset to you, but if you plan to be here for 5, 10 years, which I think with 85% probability
00:38:44.520 | you will be here for actually 10 years, I would say rerun the numbers and get long real
00:38:51.020 | estate because that capital appreciation potential will way outweigh the savings you have from
00:38:58.860 | renting.
00:38:59.860 | So what are your thoughts on that?
00:39:00.860 | No, I've read a lot of the calculations.
00:39:01.860 | I mean like have no problem renting and always run the numbers, but I think you bring up
00:39:06.940 | a good point.
00:39:08.100 | Those numbers are only as good as the assumptions that you put into it.
00:39:10.520 | And a lot of times you bake in fairly conservative appreciation numbers on the value of the houses.
00:39:16.540 | And if the value of the house increases higher than like, say 3%, then all of a sudden buying
00:39:22.020 | becomes much more lucrative.
00:39:23.180 | And it's always been one where like, hey, in that like 7 to 10 year timeframe, most
00:39:27.660 | of the time there's that break even point.
00:39:29.580 | Right now it's pushing higher than that into like the 10 year plus, but again, all of that
00:39:35.100 | assumes that the capital appreciation is in that 3% range.
00:39:38.560 | If it starts pushing into the 5% plus, which I think historically for a single family home
00:39:42.180 | in San Francisco, isn't unrealistic, then buying can start making a lot more sense.
00:39:48.780 | For me, my biggest concern is making a large outsized mistake.
00:39:57.520 | And it's a lot of like risk minimization.
00:40:00.720 | And for me, only now I can be certain, like ish, that I'll be in San Francisco for five
00:40:06.900 | years.
00:40:07.900 | And I think other people are more certain than I am in my propensity of actually staying.
00:40:13.980 | But before we got into the kindergarten, it was always like, maybe we leave before kindergarten.
00:40:19.620 | Maybe we leave now before middle school.
00:40:23.100 | Who knows whether we actually...
00:40:24.540 | If we don't leave, and we stay in a place long term, then I think buying can make sense.
00:40:29.940 | I'm not inherently against buying.
00:40:31.620 | And this year, one of the things I'm doing is spending significantly more on my rent.
00:40:37.140 | And I think we're just about to lock down a two-year lease that's like much more expensive.
00:40:41.920 | And it's for a single family home, again, walking distance to my daughter's school.
00:40:46.540 | And I think that will be kind of like a litmus test in terms of like, "Hey, let's see how
00:40:51.220 | we like the single family home life in San Francisco."
00:40:54.660 | Yes, we're renting.
00:40:55.660 | Yes, it's not the exact same thing as ownership.
00:40:57.380 | Yes, we're not gonna take advantage of a lot of the flexibility and benefits that come
00:41:01.020 | from actually owning.
00:41:02.980 | But I think it will be kind of like testing the waters in terms of, is that the life that
00:41:07.580 | we actually want?
00:41:09.020 | And do we want to have that longer term?
00:41:11.380 | And then it's around figuring out how to make it work.
00:41:13.260 | So I have no problem renting.
00:41:15.220 | But as soon as I'm convinced that I'll be somewhere for 10 years, or like, again, I
00:41:20.140 | will buy again.
00:41:21.140 | Like I owned a house when I used to live in Austin before moving to San Francisco.
00:41:24.540 | I have nothing against homeownership.
00:41:26.260 | It's just the numbers have always been so challenging in San Francisco to make it a
00:41:32.100 | easy decision.
00:41:33.100 | It's never been an easy decision in the Bay Area.
00:41:34.900 | It's always one where the numbers get kind of fuzzy.
00:41:39.060 | And the amount a mortgage costs versus rent costs in the short term.
00:41:44.420 | If you don't assume appreciation, it's just hard to pencil it out.
00:41:47.980 | With appreciation again, it changes.
00:41:49.260 | But again, that's where I have always leaned on like, let me just rent and I'm disciplined
00:41:56.300 | enough to invest the difference.
00:41:58.460 | I think that's the big thing.
00:41:59.460 | Right.
00:42:00.460 | Which is very important.
00:42:01.460 | Which is the most important thing for all these calculators.
00:42:03.180 | It assumes you're investing the difference.
00:42:05.300 | And if that's not the case, then the forced savings of a mortgage might be more beneficial
00:42:09.860 | than most people realize.
00:42:11.180 | Yeah.
00:42:12.180 | All right.
00:42:13.180 | Well, it sounds like you got a lot of things to think about.
00:42:17.100 | Congrats on the new rental house.
00:42:21.340 | And I'm looking forward to seeing what's next.
00:42:23.580 | If listeners want to subscribe to your Fang Fire newsletter, how do they find you?
00:42:28.100 | It'll be in the show.
00:42:29.100 | You can find me at FangFire.com.
00:42:30.860 | That's F-A-N-G Fire dot com.
00:42:34.340 | And that will redirect you over to my newsletter on Substack.
00:42:38.060 | And that's where you'll find me writing probably like twice a month on all things tech and
00:42:43.940 | fire.
00:42:44.940 | All right.
00:42:45.940 | Twice a month.
00:42:46.940 | That's pretty good.
00:42:47.940 | It's a pretty lax.
00:42:48.940 | What about once a week?
00:42:49.940 | So that was one of the things.
00:42:50.940 | I thought I was going to be writing a significant amount more.
00:42:53.740 | But I really found that cadence there.
00:42:55.620 | It's like, I feel good around twice a month and continuing that up.
00:42:59.300 | I think once a week, it turned into the same kind of grind and dread that I had from working
00:43:05.780 | and it kind of changed the dynamic a little bit.
00:43:08.820 | No, I hear you.
00:43:10.220 | I got to think about that too.
00:43:11.340 | I might go on a summer schedule and maybe publish twice a week with actually a newsletter
00:43:16.060 | instead of three times a week and a newsletter.
00:43:18.720 | I don't want to feel that grind.
00:43:20.580 | Too old.
00:43:21.580 | Yeah.
00:43:22.580 | It's just finding the right balance.
00:43:24.180 | I think that's the big thing.
00:43:25.180 | I would say for me that more than twice a month ended up just being work.
00:43:33.020 | I probably should be doing more and be more consistent.
00:43:36.180 | I think that's the one thing that if I really wanted to make this a business and a career,
00:43:43.140 | but I don't have that pressure to.
00:43:44.220 | So I think that's one of the things that let me be a little bit more lax in terms of how
00:43:47.620 | often I write, how often I publish and how much time I put into it.
00:43:51.100 | Yeah.
00:43:52.100 | All right, Andre.
00:43:53.100 | We'll chat again.
00:43:54.100 | Great having you on.
00:43:55.100 | It was a pleasure, Stan.
00:43:56.100 | Thanks again.
00:43:57.100 | Thanks.
00:43:58.100 | Take care.
00:43:59.100 | All right, everyone.
00:44:00.100 | If you enjoyed this podcast, I'd love a share, subscribe and a positive review.
00:44:02.260 | It helps keep me going.
00:44:04.340 | Every single episode takes hours and hours to produce.
00:44:07.220 | And if you want to keep in touch, check out the Financial Samurai newsletter at financialsamurai.com/news.
00:44:11.900 | Talk to you all later.
00:44:14.900 | Bye.
00:44:19.900 | (explosion)
00:44:22.240 | [BLANK_AUDIO]