Big thanks to Mr. SSC who allowed me to steal a theme from his post. I have mapped some key milestones in the family PIE evolution onto new drug approvals from the FDA. Like the oil industry, the pharmaceutical industry is tough. The ups and downs of drug approvals over the years is something I could speak about for longer than you would care for…..
Please allow us to also to share the back-story of the journey of the family PIE (Plan Invest Escape) – a story from half-baked, through a rising oven temperature to nearly over-cooked. The icing on the cake is yet to come.
Working in the UK – The Wonder Years (1992-1998)
I was first employed in 1992, having completed a B.Sc. and Ph.D. in chemistry. I moved from the great city of Glasgow to another fun city in central England where I started my career in the pharmaceutical industry. In 1995, a “year-out” student joined my lab and became part of my team. This young lady was the future Mrs. PIE. That whole story is another post in itself for another day! The young lady went back to university, completed her degree and was offered a job in the south of England with another large pharmaceutical company. The “long distance” (in the UK, long distance is all relative!) romance ensued with each making frequent trips to see each other at weekends. I decided to buy a house in early 1998.
Closing officially occurred in April 1998 when we were actually in the US on vacation – with a side of business. During that trip, I was offered a job with the US Biotech arm of my company and I accepted. As I have mentioned before, this wasn’t a difficult decision for us. More “how?” and “when?” than “should we?” The house was put back on the market within a month and was sold 6 months later for around $3,000 profit. Luck is better than a strategy sometimes. All closing costs and incidentals were covered by my company under my international relocation package. Cars were sold to family members, most house appliances sold also, either with the house sale or through other avenues.
An integral part of that plan involved connecting Mrs. PIE with a head-hunter in the US and the job hunt for Mrs. PIE commenced. A trip was organized to the US in July 1998 where Mrs. PIE interviewed with five companies (in four days!) was offered a position with each of them. She made the good decision to join a company that she is still employed by today.
Lifestyle philosophy: living life to the fullest in vibrant UK cities, especially on weekends. Regular trips to London, European vacation destinations (the Greek Isles, Scottish Highlands, English Lake District, Paris, wine country of Burgundy to name but a few). Our approach to spending money on great experiences started in earnest. The ingredients for the PIE life were being slowly but surely mixed.
Savings approach: Each paying off small amount of debt (car loans), saving into a pension plan through each company. Cash reserves adequate to assist with the new stuff (furnishings, appliances, electronics etc.) we would be buying upon relocation to the US.
A couple of photos taken near Ullswater in the Lake District,United Kingdom
Makrigialos, Coastal Crete in the Greek Isles. Summer bliss!
The Big Move and Start of our New Life (November, 1998)
Once all the difficult conversations and sad goodbyes with family and friends had taken place, we hopped aboard a flight out of London to the US on November 9th, 1998. From Old England to New England. Our new life had just begun and we were as excited as you could imagine. The international relocation package made for a smooth transition and for that we are eternally grateful:
- All closing costs on sale of UK home covered
- First class tickets on British Airways for two (there was champagne, lots of champagne!)
- 1-month paid temporary accommodation
- Realtor costs covered to secure a home rental and new home purchase
- All closing costs for purchase of a new home covered if we purchase within 12 months
- $15K stipend for appliance, electronics purchases
- Greencard applications all handled through my company attorneys
The move was a lot easier than we expected. We rented for 11 months in a small suburb with easy access on the “T” to the city. We enjoyed the city life to the max: new restaurants, sporting events, the theater, trips to NYC, while at the same time saving for a down payment on our dream home. We accomplished this by having Mrs. PIE’s salary funneled right to our savings account.
In the mid 90’s, a lot of money was being thrown at biotech by investors. If you had gene, genetics, or genome even associated with your company name, money came flooding in. Our salaries increased and Mrs. PIE got an increasing number of lucrative stock options.
As you can see from the figure, it would take some time for the industry to get anywhere back to a level of productivity that was necessary to sustain it.
Lifestyle philosophy: new jobs, new city, new life, wonderful new experiences. Living the dream to be honest.
Saving approach: each of us started paying into our 401K close to the max. Saved for down–payment on our dream home.
A New Home and all that Stuff (1999-2002)
We decided to buy in the ‘burbs. A 4-bedroom colonial (yes, for just us two) with workable commutes (we thought at least…..) to each job. We had a sizeable mortgage (8% interest rate initially!) until PMI removal and our first refinance put a big dent in the over-sized monthly payment. We slowly and methodically furnished each and every room. Best Buy, Pottery Barn and Crate and Barrel became great destinations that our salary enjoyed visiting. Interestingly, we never sought out the additional “stuff” like high end fancy cars, expensive jewelry, boats – the stuff that could have become a real killer for our finances.
In 2001, we got married at Boston City Hall. Lots of family, friends from the UK were in attendance. It was a small wedding by standards here in the US. Suddenly it came upon us – we had moved country, bought a home together, got married. Life was good. Salaries were good. A foundation was being laid….to spend money.
Lifestyle philosophy: new home and marriage. Still living the dream.
Saving approach: maxing out 401K’s, IRA’s launched for each. Increasing cash reserve slowly and steadily.
The Spendy Years (2002-2008)
With a new home fully established and settling into married life, we continued to live the dream. Again, experiences were top of the list. Exploring the hip and trendy new restaurants, helping parents to travel and visit us, summer jaunts to the Caribbean, exploring North America winter destinations like Whistler, Steamboat, Telluride, Quebec City and our favorite Jackson Hole. Sometimes more than once in a calendar year. Life was easy and so was spending. In 2007 small PIE #1 was born and a new reality dawned in more ways than we ever imagined.
Happy Times in Jackson Hole. Stoked!
Saona Island, Dominican Republic
Lifestyle philosophy: yep, you probably guessed – experiences, experiences…..
Saving approach: maxing out 401K’s, IRA contributions continued. 529 plan started upon the birth of small PIE#1. The reality of childcare costs and college planning became apparent in our savings rate….
Getting our Stuff Together (2008-2014)
You may be reading this and conjuring up a picture of over-spending and not saving. Not really. Since the very first day we were both employed, we each contributed healthy amounts to pension plans in the UK and 401K’s in the US. In terms of 401K investment, our contributions of around $10K (1999) rising to $18K (today) per person along with IRA contributions (not over the whole period) have built a tax-deferred account that will ensure a very comfortable lifestyle when they can be accessed.
We have stated before that we won’t disclose our net worth. Stick those numbers into any calculator with a growth rate of 5-7% and the numbers may surprise you. Yes, compound interest is a wonderful thing. That’s despite the Dot-Com bubble burst of 2000 and the Great Recession of 2008 – two significant financial events in the period we have lived in the US. Remember, the 2008 crisis wiped out about 40-50% of the value of any equity based portfolio.
With small PIE #1 being born, we made the decision that both of us would continue to work. Mrs. PIE moved to reduced-time at 4 days per week, with a corresponding 20% reduction in salary. With close family in the UK, that required looking into childcare options, obviously fully cognizant of the associated costs. No sooner than we were getting used to the monthly cost for small PIE #1 we excitedly welcomed small PIE #2 into the world. The combined cost of placing the two small PIES in childcare over 7 years amounted to close to $130,000. Let that number sink in for a moment. Think of how that six figure number could have compounded. We love our children dearly, they do things that amaze us each day, they have changed our lives for the better. And that comes with the associated costs that have to be factored in for every family who makes the choice to have children while pursuing careers in parallel.
All that being said, another great thing happened for us during this period. We became citizens of the USA on May 21st, 2009. In a ceremony at Faneuil Hall in Boston, a city where much American history has been shaped, we were declared US citizens.
With kids, we never cut back on seeking out new experiences. For example, they have traveled with us to the UK multiple times for family vacations, we put them on skis at the age of 3, and we hike the mountains of the North East together. New experiences, family experiences. No change really.
Lastly, we have always loved Northern New England for hiking, skiing and many different vacation spots. In 2013, we purchased a second home in the mountains. Cash savings and the use of some stock options that Mr. PIE had built up in previous few years allowed this to happen. This home has become our weekend getaway from the madness of the working week. Honestly, when we purchased it, we did not realize it would become a big part of our FIRE plan.
Lifestyle philosophy: double income (with Mrs. PIE salary reduction), two kids, family experiences
Saving approach: maxing out 401K’s. 529 plans for both kids. Invested in alternate vehicles such as non-traded REITs. Bonuses, stock options and some cash savings put towards purchase of a second home.
The Financial Advisor and the FIRE’d up moment (2014 – today)
We have documented our experiences with a financial advisor already. We won’t go into more detail here. Suffice to say, this was the turning point that really got us FIRE’d up. Our experiences with him when we tried to discuss a retirement plan were painful. It simply told us that our plan was so much better than any plan his team could ever put together.
I had also been getting progressively disillusioned with the workplace since 2013 and over time got acquainted with various blogs describing an alternative lifestyle – Jim Collins and Can I Retire Yet blogs are two examples of great sites where the essence of our plan was validated and further enhanced. Revealing our plans to family and a few close friends recently somehow has made it all very real.
Lifestyle philosophy: intentional and careful spending; experiences remain a high priority
Saving approach: maxing out 401K’s. 529 plans for both kids. All bonuses, stock option exercises and large monthly deposit all to Vanguard. Anticipated large profit based on equity we have built in our primary home.
On writing this post, a number of things became clear to us and the path we are taking. Although the FIRE’d up moment was a pivot point, the embers had been slowly burning for a long time. Our inherent awareness to be saving from the moment we started work was always going to work in our favor. Yes, the laser-focused savings mission from 2014 to 2018 is important. But it is building upon 20 years of slow and steady – compound interest is hard to beat.
Looking back, would we have done things any differently?
We doubt it. The experiences with our UK lifestyle and the new life we created in the US are priceless. Those experiences can never be replaced. We made a few mistakes along the way but who hasn’t?
A reader also asked us a great question in the comments section of a recent post:
Would you have been on this same path if you had remained in the UK?
That’s a tough one. Oh to create that parallel universe to answer the question. The things that were different for us through living in the US were as follows:
- Our salaries and benefits increased dramatically, supporting a different lifestyle and allowing us to save more over the long haul. Basic math tells you that you can save more even with periods of inflated spending. It’s what you earn and what you can save. Both are ideal.
- The cost of living overall in the US is less than the UK. Property prices, car insurance, clothes and eating out are a few areas where the difference is noticeable. The combination of 1+2 is powerful.
- An expectation that more initiative is required here in the US allows you to create your own destiny, on your terms. It is different in the UK, at least it was back in ‘98. It is a different mindset that we have slowly learned which has put us on this path.
I mentioned earlier about living the dream. We still are. The icing on the PIE cake is just around the corner.