Burnout/downshifting/asset allocation/Finland

[Fireishere]

I would like to know your opinion about my situation.

Background:

- 39 years old, married, one doughter, entrepreneur.
- no debt
- portfolio 2,5M€ (50-60Xexpenses)
- asset allocation about 70% stocks 30% cash
- small pension at age 68 (only about 12k/year)
- free healthcare

I’m having a pretty severe burnout and I’m planning to quit my business. Last five years have been financially great but mentally really bad. I’m noticing that it’s hard to be present at home and going to work feels awful. I have enough money to retire but I want to work at least 10-15 years. If I take “easier” work, my salary will drop to maybe 30-40k per year which means our new contributions makes no significant difference to our portfolio. So what do you think our asset allocation should be? It’s possible that I need to raise money from the portfolio for some time until I find new job and get myself feeling better. I’m thinking 60/40 or 70/30 to keep up with inflation and hopefully some growth, because I’m still relatively young. Lastly, I have enough and making more money is not giving me any motivation anymore. I also just buried my friend (same age, father of three children) who had a stroke. That also changed my perspective for life.
I would really appreciate about your opinions!

[andreas]

Can you sell the business or hire someone to do most of the work?

[Fireishere]

Can you sell the business or hire someone to do most of the work?

No, because I have a hardware store in a small town. It’s declining business, because people are moving to bigger cities and people are having less money to renovate their homes because of inflation. Value of houses are also declining here so people make lesser and lesser any improvements to their homes. This business also requires pretty much capital and it’s not easy to make it profitable. Good news is that I can sell or rent the building for some other use.

[idc]

Sorry for your friend and for the burnout.

It seems like you are mixing up two different things, burnout from the current situation and keeping active. The main motivation for giving up on the business is the burnout. If you would get another job it would not be primarily to make money, but rather to be active, no? So it should matter more that you like it and less how much you make, no?

Also, if you're saying the business is declining, you might end up with fewer profits from your business anyway, no? So perhaps a relatively easy way out would be to shut down the business, which I am guessing should get you more money, both from selling/renting the building, but also by freeing the working capital you might have tied up.

Then perhaps you could try to take a break for a few months and try your hand at something else that keeps you happy, whether employment, another business, volunteering, etc. In my experience, it is so much more fun to work when you can always walk from that work if you don't like it - we call it that you have FU money in US . Also, not sure how much the burnout for you is the fact that you can't shut off your mind from the business mode after hours. To me, that was the biggest improvement when I switched to Coast FIRE - I can mentally shut off after 5 p.m. from anything related to work.

Good luck regardless. Finland is such a nice place, every house has a sauna The only place in the world I know you can discuss business naked and be taken seriously.

[whodidntante]

Sell that puppy and move on. Find something you are passionate about to do. I'm at a similar place myself. I'm not quite financially independent in a way were I can visit every Four Seasons in the world, but at a stage where I am not willing to kill myself for money.

Life is extremely short for us all. It was shorter for your friend. Be yourself.

[galeno]

A close family member or friend's stroke SHOULD make one stop and think.

Stress, discontent, and consequent poor sleep will kill you faster than smoking 3 packs of cigarrettes per day.

Fate is telling you to take your foot off the gas pedal. Smell the roses.

[Stork]

You have my sympathy! We are in a similar situation (if a bit older), had a successful tourism business but found it too hard on having a life outside and put it for sale. Covid came, but we got an offer for the price we had set. This was good, but the sales process and moving burnt us out (after the 2020 Covid season!) and we are trying to find out feet now, bit by bit.

Change! Be there for your family. But also find some work you can go home from, paid or voluntary, to have a purpose. At least that would be my suggestion.

Best of luck, it can take time to get back on top.

Oh, and it sounds like both 60/40 and 70/30 would work for you.

[123]

With a portfolio supporting 50-60X expenses and no worries about healthcare costs there is no reason for you to endure stress related to work. It's likely time to close the business, maybe sell the building and move on to the next phase of your life. A portfolio aimed at reducing risk, like 60/40 or 70/30, could serve your family well.

Edited to add:
A question for the OP: How has the Ukraine situation impacted your preferences for your portfolio holdings? Did/Do you have significant equity holdings of companies based in Finland or do you choose generalized European equity investment funds?

[IcedTea]

Same happened to me. Best thing for me and my family was for me to move on from the family business. Not only I'm more present in the moments that matter, I can sleep and live a "normal life".

Because you feel burned out in your current job it doesn't mean you will feel the same in the next. While it's ok to take some time off there's no need to retire so early.

Learn to let go and time makes wonders.

Anyway, you did great! Well done! Now focus on what's good for you and your family.

Take care!

[Bernmaster]

You have my sympathy! You have more than enough money that it should no longer influence your decisions. Do what is best for your health and your family.

Regarding asset allocation, I would keep enough to cover X years of living expenses in cash - "whatever makes you comfortable" (quoting Warren Buffett) and keep the rest in stocks. If you can rent out the building you should have enough cash flow so you never have to worry about money again.
All the best!

[DoctorE]

In your situation, at 50x expenses saved, I would close the business if I couldn't find a buyer and rent out or sell the building.
Enjoy life with your family, destress, take some vacations and look for the next step either doing a new business you love and is less stressful or just focus on your hobbies and family.

Diversify your portfolio well beyond Finland and Scandinavian equities. Keep it passive and low cost. You can pretty much live off the dividends from a diversified portfolio of distributing funds or use accumulating funds if tax efficient in your country and sell off 2% a year to spend. Keep a couple of years of expenses liquid.

[Valuethinker]

I would like to know your opinion about my situation.

Background:

- 39 years old, married, one doughter, entrepreneur.
- no debt
- portfolio 2,5M€ (50-60Xexpenses)
- asset allocation about 70% stocks 30% cash
- small pension at age 68 (only about 12k/year)
- free healthcare

I’m having a pretty severe burnout and I’m planning to quit my business. Last five years have been financially great but mentally really bad. I’m noticing that it’s hard to be present at home and going to work feels awful. I have enough money to retire but I want to work at least 10-15 years. If I take “easier” work, my salary will drop to maybe 30-40k per year which means our new contributions makes no significant difference to our portfolio. So what do you think our asset allocation should be? It’s possible that I need to raise money from the portfolio for some time until I find new job and get myself feeling better. I’m thinking 60/40 or 70/30 to keep up with inflation and hopefully some growth, because I’m still relatively young. Lastly, I have enough and making more money is not giving me any motivation anymore. I also just buried my friend (same age, father of three children) who had a stroke. That also changed my perspective for life.
I would really appreciate about your opinions!

I would suggest something like a global equity ETF.

You want maximum diversification. The Ukraine War and the European Energy Crisis have shown us all just how vulnerable any particular region or country is to "event risk". Total European equity exposure would then be less than 20% of portfolio (if you include the UK as "Europe" - but many of the Swiss & British stocks are huge multinationals like Shell, BP, Nestle).

Cash (or bonds) you would hold in Euros? That plus your state pension (plus possibly any property you own) would all be in Euros.

You've nailed it on lifestyle. You need to phase down, before it kills you.

[MH2]

I would like to know your opinion about my situation.

Background:

- 39 years old, married, one doughter, entrepreneur.
- no debt
- portfolio 2,5M€ (50-60Xexpenses)
- asset allocation about 70% stocks 30% cash
- small pension at age 68 (only about 12k/year)
- free healthcare

I’m having a pretty severe burnout and I’m planning to quit my business. Last five years have been financially great but mentally really bad. I’m noticing that it’s hard to be present at home and going to work feels awful. I have enough money to retire but I want to work at least 10-15 years. If I take “easier” work, my salary will drop to maybe 30-40k per year which means our new contributions makes no significant difference to our portfolio. So what do you think our asset allocation should be? It’s possible that I need to raise money from the portfolio for some time until I find new job and get myself feeling better. I’m thinking 60/40 or 70/30 to keep up with inflation and hopefully some growth, because I’m still relatively young. Lastly, I have enough and making more money is not giving me any motivation anymore. I also just buried my friend (same age, father of three children) who had a stroke. That also changed my perspective for life.
I would really appreciate about your opinions!

There are several different questions here:
1. Do you sell your business
2. Do you have enough in your portfolio to cover your current living expenses
3. Your portfolio allocation

I always recommend using Portfolio Visualizer for allocation and distribution modeling. They have a very easy to use financial goals calculator. It's free at www.portfoliovisualizer.com/financial-goals.

If you do a simple 60/40 portfolio allocation and go with a 3% annual distribution, over a sixty year period you have a 100% success rate (meaning that the portfolio balance never drops to zero) and an average distribution of 75K EUR. Nine out of ten times your portfolio balance stays above 2M EUR (inflation adjusted).

Now, this doesn't cover capital gains and income taxes, which I imagine are an issue for where you live. However, if you're already able to live off of 30-40K EUR a year, it seems reasonable to me that you should be able to cover your expenses in perpetuity by taking small (3% SWR) distributions without touching your starting balance.

As far as your allocation, the default answer would be to have heavy US or total world exposure (60% of your total portfolio balance) with the remaining 40% in a total bonds ETF. You can also go with a three fund portfolio or something a little more complicated (e.g., by adding a small amount of REIT exposure).

Whether you want to replace the US portion of your portfolio with a Finish or EU total market fund is your call. I think a lot of people on here are more comfortable going with companies listed on US exchanges, which have also given slightly higher returns over the last couple of decades. The past, however, doesn't completely represent the future.

[Valuethinker]

Whether you want to replace the US portion of your portfolio with a Finish or EU total market fund is your call.

Imagine the situation of a full blown military confrontation (not necessarily war) with Russia. Then one would want to be globally diversified, not overexposed to Europe. All markets would go down of course, but some would go down more than others.

OP is already exposed to Finland via pension, perhaps home equity, career. That's quite a lot of exposure.

OTOH if really bad things don't happen, and Europe gets through the next winter in as good shape as it has this winter, that's going to be bullish for European stocks and bullish for the Euro. So you don't want to be underweight, either, necessarily.

I think a lot of people on here are more comfortable going with companies listed on US exchanges, which have also given slightly higher returns over the last couple of decades. The past, however, doesn't completely represent the future.

There are not good reasons to throw away diversification. If we believe markets are efficient, then they have priced in the factors which gave the US higher returns. There's no chance for individuals such as ourselves to know things the markets don't know.

[MH2]

There are not good reasons to throw away diversification. If we believe markets are efficient, then they have priced in the factors which gave the US higher returns. There's no chance for individuals such as ourselves to know things the markets don't know.

Where did I recommend a move away from diversification? The default three fund portfolio is domestic, international, and bonds. Domestic, in his case, is either Finnish or EU equities. His call, and as someone who has amassed a 2.5M EUR portfolio in a heavily taxed country, he's perfectly capable of evaluating the risks.

That said, I'd like to remind everyone here that the EU has a 14.4 trillion EUR GDP and 447 million citizens. An total market EU ETF is a perfectly fine replacement for VTI in a three fund portfolio when you live in the EU.

[Fireishere]

Sorry for your friend and for the burnout.

It seems like you are mixing up two different things, burnout from the current situation and keeping active. The main motivation for giving up on the business is the burnout. If you would get another job it would not be primarily to make money, but rather to be active, no? So it should matter more that you like it and less how much you make, no?

Also, if you're saying the business is declining, you might end up with fewer profits from your business anyway, no? So perhaps a relatively easy way out would be to shut down the business, which I am guessing should get you more money, both from selling/renting the building, but also by freeing the working capital you might have tied up.

Then perhaps you could try to take a break for a few months and try your hand at something else that keeps you happy, whether employment, another business, volunteering, etc. In my experience, it is so much more fun to work when you can always walk from that work if you don't like it - we call it that you have FU money in US . Also, not sure how much the burnout for you is the fact that you can't shut off your mind from the business mode after hours. To me, that was the biggest improvement when I switched to Coast FIRE - I can mentally shut off after 5 p.m. from anything related to work.

Good luck regardless. Finland is such a nice place, every house has a sauna The only place in the world I know you can discuss business naked and be taken seriously.

I’ve come to the same conclusion as you. By shutting down the business I would a) get money for selling or renting the building and b) freeing the capital. My worst enemy is looking in the mirror. It’s hard to make the final decision. My parents started this business 40 years ago and it’s hard to admit that I’m not able to make it work anymore.

[Fireishere]

Sell that puppy and move on. Find something you are passionate about to do. I'm at a similar place myself. I'm not quite financially independent in a way were I can visit every Four Seasons in the world, but at a stage where I am not willing to kill myself for money.

Life is extremely short for us all. It was shorter for your friend. Be yourself.

Well said. I’m trying to let that sink in.

[Fireishere]

A close family member or friend's stroke SHOULD make one stop and think.

Stress, discontent, and consequent poor sleep will kill you faster than smoking 3 packs of cigarrettes per day.

Fate is telling you to take your foot off the gas pedal. Smell the roses.

You’re absolutely right. That’s what I’m really trying to do.

[Fireishere]

You have my sympathy! We are in a similar situation (if a bit older), had a successful tourism business but found it too hard on having a life outside and put it for sale. Covid came, but we got an offer for the price we had set. This was good, but the sales process and moving burnt us out (after the 2020 Covid season!) and we are trying to find out feet now, bit by bit.

Change! Be there for your family. But also find some work you can go home from, paid or voluntary, to have a purpose. At least that would be my suggestion.

Best of luck, it can take time to get back on top.

Oh, and it sounds like both 60/40 and 70/30 would work for you.

Sorry to hear about your burnout. It really takes time to recover. Covid was actually good for our business because people stayed at home and they did a lot of renovations. But now inflation is killing us. People’s purchasing power is really getting hit.

Being an entrepreneur has given me a purpose and identity and maybe one thing which keeps me going is a fear of losing that purpose. It may sound ridiculous but I’ve been in to our family business since I barely could walk.

[Fireishere]

With a portfolio supporting 50-60X expenses and no worries about healthcare costs there is no reason for you to endure stress related to work. It's likely time to close the business, maybe sell the building and move on to the next phase of your life. A portfolio aimed at reducing risk, like 60/40 or 70/30, could serve your family well.

Edited to add:
A question for the OP: How has the Ukraine situation impacted your preferences for your portfolio holdings? Did/Do you have significant equity holdings of companies based in Finland or do you choose generalized European equity investment funds?

50-60X is also fat fire for us. We’re able to cut our expenses if necessary without having a meaningful impact to our life. I’m thinking 70/30 is right for us.

Ukraine situation hasn’t impact for portfolio because, as a Finn, I’ve always wanted to diversify my stock portfolio globally. Without going to (geo)politics you just need to look at the map and read a bit of Finnish history to understand that it’s wise to diversify. My only stock-ETF is a market-weighted global index.

[Fireishere]

Same happened to me. Best thing for me and my family was for me to move on from the family business. Not only I'm more present in the moments that matter, I can sleep and live a "normal life".

Because you feel burned out in your current job it doesn't mean you will feel the same in the next. While it's ok to take some time off there's no need to retire so early.

Learn to let go and time makes wonders.

Anyway, you did great! Well done! Now focus on what's good for you and your family.

Take care!

Thanks for your kind words. I’m trying to make my decision.

[Fireishere]

I would like to know your opinion about my situation.

Background:

- 39 years old, married, one doughter, entrepreneur.
- no debt
- portfolio 2,5M€ (50-60Xexpenses)
- asset allocation about 70% stocks 30% cash
- small pension at age 68 (only about 12k/year)
- free healthcare

I’m having a pretty severe burnout and I’m planning to quit my business. Last five years have been financially great but mentally really bad. I’m noticing that it’s hard to be present at home and going to work feels awful. I have enough money to retire but I want to work at least 10-15 years. If I take “easier” work, my salary will drop to maybe 30-40k per year which means our new contributions makes no significant difference to our portfolio. So what do you think our asset allocation should be? It’s possible that I need to raise money from the portfolio for some time until I find new job and get myself feeling better. I’m thinking 60/40 or 70/30 to keep up with inflation and hopefully some growth, because I’m still relatively young. Lastly, I have enough and making more money is not giving me any motivation anymore. I also just buried my friend (same age, father of three children) who had a stroke. That also changed my perspective for life.
I would really appreciate about your opinions!

I would suggest something like a global equity ETF.

You want maximum diversification. The Ukraine War and the European Energy Crisis have shown us all just how vulnerable any particular region or country is to "event risk". Total European equity exposure would then be less than 20% of portfolio (if you include the UK as "Europe" - but many of the Swiss & British stocks are huge multinationals like Shell, BP, Nestle).

Cash (or bonds) you would hold in Euros? That plus your state pension (plus possibly any property you own) would all be in Euros.

You've nailed it on lifestyle. You need to phase down, before it kills you.

I already have a global equity ETF for maximum diversification. Cash and bonds will be in Euros. Do you think it would be wise to diversify to other currencies?

[Fireishere]

Whether you want to replace the US portion of your portfolio with a Finish or EU total market fund is your call.

Imagine the situation of a full blown military confrontation (not necessarily war) with Russia. Then one would want to be globally diversified, not overexposed to Europe. All markets would go down of course, but some would go down more than others.

OP is already exposed to Finland via pension, perhaps home equity, career. That's quite a lot of exposure.

OTOH if really bad things don't happen, and Europe gets through the next winter in as good shape as it has this winter, that's going to be bullish for European stocks and bullish for the Euro. So you don't want to be underweight, either, necessarily.

I think a lot of people on here are more comfortable going with companies listed on US exchanges, which have also given slightly higher returns over the last couple of decades. The past, however, doesn't completely represent the future.

There are not good reasons to throw away diversification. If we believe markets are efficient, then they have priced in the factors which gave the US higher returns. There's no chance for individuals such as ourselves to know things the markets don't know.

As you said, our house, business, career are in Finland. That’s why I a global market-weighted stock ETF. I want to diversify as much as possible.

[Fireishere]

There are not good reasons to throw away diversification. If we believe markets are efficient, then they have priced in the factors which gave the US higher returns. There's no chance for individuals such as ourselves to know things the markets don't know.

Where did I recommend a move away from diversification? The default three fund portfolio is domestic, international, and bonds. Domestic, in his case, is either Finnish or EU equities. His call, and as someone who has amassed a 2.5M EUR portfolio in a heavily taxed country, he's perfectly capable of evaluating the risks.

That said, I'd like to remind everyone here that the EU has a 14.4 trillion EUR GDP and 447 million citizens. An total market EU ETF is a perfectly fine replacement for VTI in a three fund portfolio when you live in the EU.

I decided to go with a global equity etf. it’s easy to stay the course and I don’t get tempted to change allocations.

[BrooklynInvest]

I’m noticing that it’s hard to be present at home and going to work feels awful.

I've been there OP. It's one thing when you're young, broke and starting out - we all have to make sacrifices. It's entirely another when you don't have to make sacrifices. And you're now in the second group - congratulations on that achievement!

I got laid off from a truly awful job 18 months ago. Mornings were spent dealing with angry emails and ignoring my family as I deal t with fake crisis after fake crisis. It's been very difficult to find a full time job at my level, but I consult for about a third of what I was making with none of the stress. Now I make breakfast for my son, drop him off and go to the gym, and then work for a while... and comment here ;-

I pay my monthly bills with my income and even put a little bit away. I'm a worrier by nature so having a bit of income is mentally much better than having none, even though it probably doesn't make much difference in the numbers.

What's the worst case for you finding a "make a few bucks" job? I'd make sure that was covered by cash and then simple 60-40 or thereabouts... maybe more on the equity side but that's me.

Bond yields are attractive. I'm around 70-30 excluding a year's worth of expenses in cash, but I'm a bit older and closer to "full retirement" than you. That said, you've got a good nest egg. There's also a benefit to being a bit conservative in your allocation - you've won the game so stop playing... or at least don't take so much equity risk?

Yeah I know. But hopefully we're near the end of rate hikes for a while.

Good luck OP! You're asking the right questions and that's a critical step.

[idc]

I’ve come to the same conclusion as you. By shutting down the business I would a) get money for selling or renting the building and b) freeing the capital. My worst enemy is looking in the mirror. It’s hard to make the final decision. My parents started this business 40 years ago and it’s hard to admit that I’m not able to make it work anymore.

You should not feel guilty about it. It is very probable your parents had totally different circumstances business wise. Probably the town was not shrinking and there was no Amazon to compete with. Absolutely no disrespect to your parents, but you can't live their lives, just as I doubt you would expect to have your kids follow on running the business.

Let it go, move on and live your own life, you owe it to your spouse and kids, just as much, or even more as you own respect to your parents.