'I could've been set for life': This former Goldman Sachs analyst says his family of 4 can't live comfortably on $230K a year after buying 'forever home.' Is the American dream out of reach?

“My family and I could have been set for life. Instead, due to my inability to beat back real estate FOMO (fear of missing out), I blew up our passive income,” Dogen wrote in a blog post.

“Desire is the cause of all suffering.”

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Sacrificing FIRE for 'desire'

Dogen’s been investing for a long time. In fact, he first made headlines back in 2012 for championing the “financial independence, retire early” (FIRE) movement by retiring at the age of 34 with a $3 million net worth.

He’s since been living off his passive income from stocks, bonds, and real estate — but after paying cash for a recently remodeled home on a triple-wide lot, he says about five years’ worth of progress has been lost.

Dogen says in 2023 his passive income was tracking to generate about $380,000 a year. But after purchasing a new home in the pricey San Francisco Bay Area, he now expects it to decline to about $230,000 — which he claims is no longer enough to cover his family of four’s living expenses.

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Starting in September, when his daughter starts attending preschool full-time, Dogen expects the family expenses to hit $288,396 a year. Using a 24% effective tax rate, he says he’s left with $174,800 in net passive income — $113,200 short of what he’ll need in the fall.

He and his wife plan that one of them, or both of them, will get day jobs or do some consulting to make up the difference, but he worries about re-entering the labor market after over a decade. He says to cover the family’s expected expenses (without cutting back on any areas), they would need to make about $420,000 a year before taxes.

That said, Dogen still plans to reach FIRE status again within three to five years.

Is the Financial Samurai being too greedy?

For many people, raising a family of four on such a high income sounds like achieving the American dream. But is Dogen the victim of a high cost of living or lifestyle creep?

Dogen’s annual budget includes $80,400 for tuition at a private Mandarin immersion school for his two kids, $68,400 for housing costs, $24,000 for health care, $40,000 in potential 401(k) contributions and $26,400 in food (including weekly date nights). He also has $16,800 set aside for vacations.

He admits there are some areas he could cut back on, but maintains that it’s a reasonable and comfortable lifestyle for a family of four in a big city.