After years of financial independence, Sam Dogen, the founder of Financial Samurai, is making a significant change in his life. For the first time since 2012, Dogen is getting a day job. This decision comes after years of living off his investment and real estate income, which had allowed him and his wife to live comfortably without traditional W-2 income.
In 2012, Dogen left his job as an investment banker after 13 years of hard work, saving, and investing. At age 34, his portfolio and real estate investments were generating around $80,000 a year, which was enough for him and his wife to sustain their lifestyle indefinitely. However, as their family grew with the addition of two children in 2017 and 2019, their expenses increased, prompting Dogen to reevaluate his financial situation.
Over the years, Dogen had built his passive income streams to about $380,000 annually, with $288,000 net of taxes. This income was sufficient to cover their family budget while living in San Francisco. However, a recent decision to sell a portion of his stock and bond holdings to purchase a multimillion-dollar house in cash changed the dynamics of their financial situation. This move led to a decrease in their passive income streams, making it necessary for Dogen to seek employment once again.
In a post on his website, Dogen explained his choice to sacrifice financial independence temporarily in order to fulfill his desire to provide a comfortable home for his family. By purchasing the house in cash, he redirected income-producing assets into a non-income generating asset, resulting in a shortfall in their passive income to cover their expenses.
Despite giving up financial independence, Dogen had always anticipated this possibility. After the birth of his younger child, he made a commitment to be a stay-at-home dad for five years. With his daughter starting school full-time, he saw an opportunity to own a nicer home while his children were still young. This decision required him to return to work to bridge the gap in his passive income.
Looking ahead, Dogen plans to pick up a consulting job to cover the current shortfall in his income while allowing him to spend quality time with his children. He also aims to rebuild his passive income streams to regain financial independence in the future. One strategy he is considering is renting out the house they are vacating to generate additional income that can be reinvested.
Overall, Dogen is excited about the new chapter in his life and the opportunity to focus on something other than full-time parenting. While the decision to return to work may seem like a step back from financial independence, it is a strategic move to ensure the financial stability and well-being of his family in the long run.
