We make $2 million a year and spend $600,000-$700,000 – are we living too large or still on track?

Some people in the Fat FIRE Reddit community make a lot of money and share their long-term financial goals. These types of posts are pretty inspiring, and this post is no exception. A 49-year-old husband shares that he and his wife earn a combined $2 million per year. They support a family of two kids and have a $9.5 million liquid net worth. That doesn’t include the $3 million in unvested employer stock and venture capital investments.

The Redditor proceeded to break down his expenses, which came to $600k-$700k per year. He wants advice on whether he’s spending too much. While $600k per year may sound like too much, we are talking about a couple that brings in $2 million per year.

The Fat FIRE community jumped on this post and shared some valuable comments.

The Couple’s Financial Goals

The couple aims to retire when they reach a $15 million net worth. This net worth will allow the couple to take out $600,000 each year with the 4% withdrawal rule. The husband said that he is on track to reach that amount in 3-5 years. 

One Redditor said that the couple could retire earlier if they spent more modestly. As it stands, the couple has the following expenditures:

• $10k per month on rent
• $9k per month on a weekend home
• $25k per month on credit card bills
• $5.5k per month on private schools
• $6k per month on other expenses

The husband acknowledged that the credit card is a problem, but he is still making far more than what he spends. The credit card includes vacations and charity donations. 

Focus On Your Progress

One commenter suggested that the Redditor focus on the progress he is making instead of how much he is spending.Framing it this way allows the Redditor to focus on progress instead of feeling like he has to make unnecessary sacrifices to his lifestyle.

“If your spending gives you the savings that lets you reach your desired early retirement schedule, it is fine, and it doesn’t matter what others spend in total or in detail,” the commenter explained.

If the Redditor earned $650,000 and spent $600,000 per year, this would be a different conversation. However, the husband has plenty of cash left over and is still on track to reach his net worth goal in 3-5 years. You don’t have to rush to retirement. Some people enjoy work and want to maintain an affluent lifestyle on the way to success. There’s nothing wrong with that if you can afford the monthly payments while getting closer to your financial goals.

Be Smart About The Expenses That Add No Value To Your Life

One commenter said they were in a similar situation to the husband’s current finances. Instead of spending the same amount of money each month, the commenter decided to give their finances a hard look and remove any unnecessary purchases.

“But if I spent a fraction of that time looking at our spend and just being smart about the spend that add no value to our lives, or we are just overpaying for, or we didnt even realize we are paying for, I could retire now. The long-term effect of a 5-10% reduction in spend is enormous.”

The 5%-10% range is quite inspiring. It demonstrates that you don’t have to make drastic changes in your life to reap the rewards of saving money. While the couple is on pace for their $15 million net worth, it may be possible to cut a few expenses without changing the quality of their lifestyle.

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