Create Your Midlife Crisis Fund Before It’s Too Late

Never Too Early To Start A Mid-Life Crisis

Life accelerates as we age. And one day you may wake up and find yourself in the middle of a midlife crisis. The key to getting through it without going broke is to create a midlife crisis fund in advance. That and mentally prepare as much as possible.

But before we get to discussing a midlife crisis fund, let's take a step back to touch on the quarter life crisis. The Quarter Life Crisis is a curious thing. 

Young adults complain several years out of college they haven't found their life's work yet. Well obviously. You can't expect to go straight to the corner office without knowing jack! What happened to paying your dues for at least 10 years and getting enough experience before doing more of what you want?

After two years of getting my balls crushed working in New York City, all I wanted to do was retire and work on my grandparents' fruit farm in Hawaii. They had eight acres of land that consisted of dozens of mango, papaya, avocado, and pomelo trees nestled in the Waianae mountain range. It was wonderful piece of land that needed care.

The Quarter-Life Crisis Comes First

Looking back to 15 years ago, what I now realize is that I wasn't really having a Quarter Life Crisis. I was just afraid of being unable to get a new job after my firm decided not to offer me a third year analyst position during the dotcom collapse. If I gave up early by going back to Hawaii, I would have regretted my decision. Preventing a crisis from taking over your life is extremely important!

One of the biggest comforts I had by the time I hit 26 was that I had saved a relatively large sum of money by living frugally. I maxed out my 401k, saved 100% of each year-end bonus, and saved 50%+ of my after tax income. I shared a studio with a friend and always ate company provided cafeteria food. Worst case, I knew I could disappear, like Lady Edith in season 4 of Downton Abbey, and come back to the world just fine after solving my “problems.”

My Quarter Life Crisis lasted for about three months. This was the same duration it took for me to get a new job offer in San Francisco doing the exact same thing. All of a sudden, my crisis turned into a wonderful new adventure that has lasted for 15 years!

Fear Of Uncertainty Is The Reason To Create A Midlife Crisis Fund

Overcome your quarter life crisis by understanding and accepting that it is driven by fear of uncertainty. Questions to mull over and answer are ones like what am I going to do with my life, how am I going to survive, what will my parents think, and will anybody give me a chance? The sooner you come to grips with those, the easier it will be to prepare and deal with the upcoming Mid-Life Crisis!

The median life expectancy for men and women hovers around 80-90. Thus, 40 – 45 is the most typical age range for mid-life crisis sufferers. Although, studies show that a mid-life crisis often range between 40 – 60. A midlife crisis could be caused by aging itself. Or by aging in combination with changes, problems, or regrets over:

  • Work or career (or lack thereof)
  • Spousal relationships (or lack thereof)
  • Maturation of children (or lack of children)
  • Aging or death of parents
  • Physical changes associated with aging
  • Spiritual purpose and life meaning

From the list above, my three mid-life crisis fears could be: lack of children, my parents, and wondering when I'll finally start feeling old.

What Happens During A Midlife Crisis?

A mid-life crisis tends to be an emotional response to any or all of a multitude of stresses. This could include an unhappy marriage, disappointment in our jobs, and financial woes.

Based on discussions with others who've had mid-life crises, and research I've conducted, here's what people generally do or feel:

  • Buy a fancy car, motorbike, or boat
  • Acquire unusually expensive items like a rare watch, jewelry, clothes, gadgets, etc.
  • Get depressed
  • Feel remorse and regret
  • Start working out like crazy
  • Change your appearance with tattoos, hair plugs, hair extensions, tanning salons, outrageous outfits not fitting of your age
  • Enter relationships with younger people
  • Want to find a job again after retiring early for years
  • Abuse drugs and alcohol
  • Spend an excessive amount on a midlife crisis house you don't need or can't afford

Self-Sabotaging During Midlife

Holy crap! That's a lot of stuff middle-aged folks in crisis go through. But now that we know, when the time comes, we can do things to help ensure we don't go overboard with the help of money. If you create a mid-life crisis fund in advance, you can splurge a little on yourself without going broke. And you also protect yourself from derailing your retirement plans.

Remorse, regret, and depression are the toughest items on the list because it's hard to control our feelings. I know I'll probably get a little depressed. But there's no reason in my life for remorse or regret. I haven't wronged anybody since high school, and I've done everything I've wanted to do in my life already. I have a family now and I can only hope my parents live long and happy.

One of the worst things that could happen during a mid-life crisis is to let emotion cause irrational spending that completely ruins the second half of your life! If you think you're the type of person who will be really tempted to spend a fortune, start building your mid-life crisis fund now. And if you don't end up needing it, all the better for your retirement. You can use the extra funds to try and retire early and live the FIRE lifestyle.

Money Can Help Ease The Pain Of A Crisis

Money can't solve all problems, but money can certainly ease the pain of a crisis. You need a good wad of cash to party VIP style while you're out clubbing into the wee hours of the morning. And you need tens of thousands of dollars to attract and maintain a younger relationship on the side. They expect to be fine dined and showered with gifts if they are going to have an affair with your out-of-shape, wrinkly self!

Given I would never do such things, my main focus is on developing my mid-life crisis fund in order to have an extra stash of cash to buy a fancy car. Since middle school I've been a car fanatic who went nuts and bought 8 cars in 10 years after college. I finally wised up in my late 20s and have been following my 1/10th rule for car buying ever since.

But deep down, I know that when I turn 40, I'll be asking myself, Why the hell am I STILL driving a Honda Fit when I've got money! You've already stayed disciplined with money for a large portion of your life. It's time to let loose a little. You're half dead already, you cheap fool!

As a result, I've decided to create a mid-life crisis fund today with the goal of accumulating roughly $60,000 in 24 months so that I can buy that sweet second hand Porsche 911, Acura NSX, Range Rover Sport SuperCharger, or another similar vehicle.

Treating The Midlife Crisis

The way to have fewer money problems is to save and plan ahead. I could start setting aside $2,500 a month in a new money market savings account. But I just can't get over the fact that money market accounts still pay less than 0.2% interest. I could just wall off $60,000 of my ~$150,000 in current savings and allocate it towards my mid-life crisis car. But that feels completely inefficient and unfair. It's more fun to work towards a goal.

Instead, what I've done is kill two birds with one stone by starting my mid-life crisis fund through automatic saving. I can automatically contribute funds to my mid-life crisis fund every month with recurring deposits into my investment account. By contributing a small amount of money each month, I don't feel the “sting” of investing as much. And I should be able to build a big enough balance just in time for me to buy the car.

Happiness and life satisfaction by age- a midlife crisis fund can help beat back disatisfaction

Pay Yourself First

For those of you who've read my 401k By Age post, you know that over time, consistent contribution adds up to large amounts. For example, after 13 years of contributing to my 401k, I had over $350,000 without even realizing it.

Building a financial nut is all about setting up an automatic money transfer so you don't even have a chance to spend the money. Over the long run, the money will compound. Pay yourself first and utilize these top financial products to grow your wealth faster.

With my new mid-life crisis fund, I'm going to pay myself first for the next two years. Then, I can amass hopefully at least $60,000 through a relatively conservative portfolio.

What If The Midlife Crisis Doesn't Come?

The benefits of setting up a mid-life crisis fund are: 1) you pay yourself first, 2) you come to grips with what's bothering you so you can make some changes, and 3) you intimately work towards buffering a crisis that may not be as bad because you've spent years preparing. If I somehow turn 40 unscathed, then I'll simply reallocate my mid-life crisis fund towards a home remodel, tuition, travel, or reinvestment in my business.

Long ago I realized having money is a pretty empty feeling once you've got your basic necessities covered. From now on, I'm going to start setting up different funds for different purposes. It feels great investing for a reason while at the same time potentially making more money.

Create Your Midlife Crisis Fund With Real Estate

Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile, provides utility, and generates income. You can easily build a real estate mid-life crisis fund through real estate crowdfunding.

In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $954,000 with real estate crowdfunding platforms. Today, my real estate crowdfunding investments across America generate roughly $80,000 a year in passive income.

Take a look at my two favorite real estate crowdfunding platforms. Both are free to sign up and explore.

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and manages over $3.3 billion for over 400,000 investors. For most people, investing in a diversified eREIT is the way to go. Fundrise invests in residential and industrial properties in the Sunbelt.

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build you own diversified real estate portfolio. 

Invest In Private Growth Companies

Consider diversifying into private growth companies through an open venture capital fund. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment. 

Check out the Innovation Fund, which invests in the following five sectors:

  • Artificial Intelligence & Machine Learning
  • Modern Data Infrastructure
  • Development Operations (DevOps)
  • Financial Technology (FinTech)
  • Real Estate & Property Technology (PropTech)

Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!

The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.

Utilize Free Technology To Get More Money

Empower has the best free wealth management tools for investors and people who are serious about planning for a healthy retirement. You can easily x-ray your portfolio for excessive fees, get a snapshot of your asset allocation by portfolio, track your net worth, and plan for your retirement.

When there is so much uncertainty in the world, you absolutely must stay on top of your finances. You got to watch your midlife crisis fund like a hawk. Understand where your risk exposure is. Stay on top of your cash flow. Empower’s free tools will help you bring calm to the chaos. 

My midlife crisis fund is helping me pay for some major remodels in a new property I bought

65 thoughts on “Create Your Midlife Crisis Fund Before It’s Too Late”

  1. Sam,
    I never understood a Mid-Life Crisis growing up. I’m approaching 40 and I see why some guys get it now. Some of my older friends had one because they felt trapped and regretted getting married & having kids in their early 20’s. I guess they wanted to recapture some freedom and “coolness”. I thankfully did not marry & have kids at a young age, so hopefully I can avoid this trap.
    – Mike

    1. Brian of Nazareth

      It’s called making good decisions. I’ve made bad decisions going on 20 years now (including marrying the wrong person). I’ve now identified myself as having a midlife crisis, and I fit half the criteria (except the spending sprees). I’m a cheapass with a midlife crisis.

  2. Hi Sam,
    Thanks for sharing.

    The idea of “paying yourself first” is not something new though, as Robert Kiyosaki ever mentioned it in his fenomenal book, Rich Dad Poor Dad. He inspired me of how to make money works for me. Before I read that book, it never ever crossed my mind to invest something and make it to earn some money for me. I was 27 yo at that time.

    Well, I have tried a few methods of how to make these investments be workable. I think the best and the most suitable one for me is still property. This is also not something that easy cheesy to earn that much. I have done diligent some research before ahead to buy a property and flipping it quite handsomely.
    I was also into stock investment.

    Today, I’m no longer in bulk investment in Stock. Guess no luck in that area.

    I’m not yet in middle-aged crisis, but I do Believe that everyone Needs to prepare the middle age crisis, despite decision of early retirement, only I’m not yet sure of how to free my self from this rat race game. I need to own Prob more than 5-10 properties in order to keep same life style when I’ll be retired within 18-20 years from now.

  3. Given that you are such a car-lover (I am too), isn’t there a middle ground between a Honda Fit and a 60k car? For not much more than the Fit, you could have a Subaru BRZ /Toyota FRS. Fuel efficient, and reliable but also RWD sports cars that are fun to drive. As a single guy it would be fine.

    Then again, given that you threw in the Range Rover, I suspect you might be craving the luxury/badge/status thing a bit too. If so, another option would be to lease a BMW. Why? Because they tend to have really cheap leases relative to the price of the car (like .08-.09% of MSRP vs the the typical 1.2%) and because all maintenance is included so the payment is all you have. Given your assets and income, and the fact that you enjoy nice cars, a lease in the low 400s doesn’t seem extravagant. Of course if you hate BMWs then its not a good option!

    Also, what are your “vices” where you allow yourself to spend more than other might consider prudent. I know there have been multiple studies that confrm that it takes psychological effort to restrain yourself in a particular area. It always comes out somehow, so better to give yourself a “treat” in 1 area.

    I applaud your effort to “dogfood” your own advice on the 1/10 car buying rule. But in your case, it might not be warranted if that’s your thing. On the other hand, saving up for something and anticipating it will make you enjoy it even more.

    1. Rob, I just spent HOURS putting together a post highlight the best mid-life crisis cars to buy. You’re gonna love it. Make sure to check back soon!

      In terms of what are my vices… I did spend $58,000 to build a luxury bathroom recently. I coulda spent the standard $20,000 – $30,000 here in SF, but I found a relatively inexpensive licensed general contractor who would have charged $75,000 otherwise (confirmed by several other bidders at $75,000 and one at $108,000). I didn’t need a massive 10 jet jacuzzi tub for $4,500, or dual rain shower heads, and one of those electronic bidets and fancy tile from floor all the way up the 9 foot ceiling… but I figured, why the heck not! Check out the before and after pictures. I love it.

      I also spend a couple thousand building a “man cave sanctuary.” That was fun.

      The final vice is frequent travel whenever I want. I’m willing to pay a premium to have a flexibility to go to Hawaii tomorrow morning.

      How about you?

      1. Awesome- looking forward to it!

        I’m definitely a car guy. I’d give up most other things to have a nice car. Totally happy to live in a 400 sq ft hovel if necessary.

        Going to the garage to see a nice car, sitting in it, hearing a great engine, etc gives me a nice daily “hit” that few other things do.

        My wife’s vice is travel. That means I can’t spend as much as I’d want to (911) so I take advantage of BMW European delivery to sort of combine the 2.

        For a year I gave up my car and used my wife’s old Volvo. Was totally miserable and ended up blowing money on stupid things. Lesson learned for me- don’t cheap out on cars.

  4. Mid life. Its a mindset where one thinks – do I have enough time left to fulfill my bucket list, or am I too lost in living as if I will live forever. $2M, $5M, $10M, $100M. I will die rich. Leaving all this money for kids. Financially independent throughout my life. But did I live my life, the way I wanted to? If I wanted to travel this planet earth, did I cut corners just to save for next generation? That is MLC. A realization that you are mortal, which a 20 year old does not have. A realization that a billionare cannot enjoy a candy or a beer, because the doctor told him he cant. We are mortals. Will die. Any planning, including financial, must take this fact into account. Choose a death date, and then plan backwards. Dont plan as if you are going to live forever. Mid life brings this out. I mean what good is your life if you have saved $10M, but always wanted to visit 7 wonders of the world, but never stepped out of US when you were alive? Life once gone, is gone!

  5. Lets say my mid-life crisis happens at 46, well if thats the case I have 20 years to save up, not thinking about that till now it’s a game changer. I know a few things that I will probably want to do in my life between now and then but If it’s not done by then no harm but I’m sure I will find something to do at 46 with 20 years of savings.

  6. Hi Sam,
    I had some thoughts on your article about your mid life crisis fund. A little background on myself, I turned 48 last September, and if things go as planned I’ve engineered my own layoff in the next couple of months. I think it’s great you are setting aside a fund for what you think might be your mid life crisis desire. The part that I want to add is that I believe there is so much variety in the types of mid life crisis because for each person it’s going to be something different based on personality, experience, unfulfilled desires, regrets, etc….

    Someone named MD above posted a comment about how easy it is to get injured at 50, 40, or 30’s. Myself similar to MD’s comments, I get injured very easily and recovery time is huge compared to my 30’s, I’ve always been into endurance activities, biking, running, and more recently triathlon. In my 30’s I could train hard almost every day and pain and injuries were mostly ignored, you could literally just run through the pain. As I approach 50 if I feel a twinge in my knee running I immediately stop running( which I never would have done when I was younger, if it doesn’t kill you it makes you stronger right :) ).

    The thing that I have learned is that things you currently take for granted ( hypothetical example here) going and playing Tennis whenever you want, when you turn 45 maybe tennis elbow flairs up and you can only play every so often because of the pain, maybe there is some regret that you didn’t practice and become the best you could be when you had the physical ability. What I’m getting at is don’t get entirely focused on the nice car because maybe it’s something that money can’t buy.

    With hindsight looking back 20 years it’s always easy to see and regret choices, decisions etc. I’ve had a great life and I don’t really think I’d personally change too much but I would have run and biked my ass off in my 20’s & 30’s more than I even did knowing what I know now. When I was about 37 I took a bike tour doing the climbs of the Tour de France in the French alps, at the time I joked I better do it now because in the future who knows if I would be physically capable. I’m sure I could still pull it off a decade later( but it would hurt a lot more) I truly didn’t realize at the time how fast a decade goes, that probably would have been a mid life crisis trip for me had I not taken the time to do that.

    You are in a unique position where you have time and the finances to avoid what probably causes most mid life crisis, the trick is going to be identifying what they might be, since you have time and money, look at the things 20 years from now time and money cant account for, experiences better with youth, physical challenges you may be incapable of as your older self, family, who knows what else, but that’s the challenge figuring out what you wish you would have done as your 50 year old self, good luck…..

    1. Hi Jon,

      Thanks for your thoughts! You’re right about taking things for granted when we are younger. This is one of the reasons why I wrote the post, “Retire By A Certain AGE Not By A Particular Financial Figure” to encourage myself, and everyone to not lose site of the end goal of living a better life.

      I’m personally always looking for a REASON to save. I find saving to be fun, just like I find going to a car dealer, sitting in and touching the car, going for a test drive sometimes, and NOT buying the car to be extremely fun! I absolutely want to seek adventure now, than when I might not be able to scuba dive or climb the steps of the Mayan ruins. I need to push myself now b/c I am too comfortable, and I’m getting to the MLC age!


  7. This is a great article its always great to think ahead as well as plan well ahead. This article touches on the other things that you should look out for and plan for ahead for when it comes to your finances, and it directly ties in with being a financial Samurai! Love reading articles such as this that touch up on other things less talked about when it comes to your finances.

  8. I believe I’m going through some sort of mid-life crisis as we speak. I’m 44 years old, Financially I could retire today. Emotionally, however I can’t pull the trigger. I’m to afraid of the unknown.

    My biggest purchases last year included a new fishing boat, a cabin in the woods with 10 acres of land, a new Denali for my wife, a pair of snowmobiles, and a first class fishing trip to Alaska with my daughter.

    The difference with my mid-life crisis is how I spent my money. The boat was purchased at a boat show. It was their floor model that was 2 years old but has never been used. I paid 45k which is a couple thousand cheaper than I could sell it for today. The cabin was a fire sale a divorced friend had to get rid of. I paid 50k and then spent 11 grand on a remodel for a total of 61k. I’ve already been offered a 100k for it. The Denali for my wife is a 2015 with 15 thousand miles on it. New there 75k. I got this one after 4 months of looking for 52k. I know I could sell it for at least that much. The snowmobiles are ten years old but only have 150 miles on them. I paid 2500.00 but could easily sell them for twice that. The trip to Alaska cost me 8k. Of all the things I purchased that trip by far has given me the most joy!

    The point I’m trying to make is that a person can still have their crisis but do it in a financially sound way. Planning, like you are doing makes these crisis hurt way less when a person realizes that relationships and experiences are the key to a truly happy life. At least that’s my opinion.

    thanks, Bill

  9. I’m surprised there’s no mention of therapy / coaching / counseling.

    Crisis comes about from unintegrated values and/or expectations – whatever you’ve been doing thus far either goes against your values, or produces unexpected results.

    The common responses – outrageous behavior, substance abuse, depression – can be avoided with the right help, be it therapy or life coaching. Most people need these, avoid these, and end up acting out.

    Having a solid financial foundation is good.

    Living a life at one with your deepest values, and life goals is spectacular.

    Smart people ask for help if they’re not sure what those are, or how to get there. Dumb people avoid it, repress it, and explode in some wildly inappropriate way at a later date.

    1. You know it’s funny, I did write about therapy, couching, counseling, and buying some books to help one deal with the problems, but I deleted it in the final version to tighten up the post. People generally tend to wait until the pain/crisis is in full force before they seek help. At least they seek help!

      My hope is that by establishing a MLC Fund, we can mindfully plan towards something that may or may not occur.

  10. Happy New Year Sam. I have been reading your blog for the last one year and I can relate to so many things you blog about. I am in the bay area and around the same age as you and we own rental property for passive income.

    I am going through mid life crisis right now (39 years) as I really want to take a break from work after working close to 15 years but struggling with it. I use to really enjoy my job and the interaction with people but the last year I have not really been enjoying it.
    Like you say quitting a high paying job is not easy even when the money is not needed.

    1. Hi Radhika,

      It gets hard to step away the more you make and the more experience you have. Perhaps ask for a sabbatical? 2-3 months should do the trick. I wasn’t so lucky to do one althoughI could. That was my one regret. But, I did take 6+ weeks of vacation a year for the last two years which was awesome.


      1. I have considered a sabbatical but the way our projects are structured it will be really hard for them to approve in the next 6 months. But I will give that a try before I decide to completely call it quits.

  11. Notice the best and the baddest cars are in California, New York, Texas, Florida… where there is extreemly wealthy people are located. I’m from the midwest, where the baddest car were Chevy Camero, or Mustang, mercedes, audi hardtop convertible or something. So even if I do get the car buzz at 40, I’d go for Mercedes or Audi or something that my peers, people around me can relate to. My point is, if you were raise in a small town, and stick there for awhile, your perception remain the same. So it’d cost less for a midwestern vs. californian. LOL :) In conclusion, move to the midwest when you turn 39 yo. haha!

      1. I lust after the 5.0. My GF keeps telling me to get it because I work hard and deserve it.

        I tell her I can’t afford it.

        *She looks at me in confusion because I’m an associate at a big law firm with zero debt*

        I follow up: Some guy on the internet tells me that true financial ninjas spend no more than 10% of their annual income on a car, so I can’t buy a GT until I make 400K per year.

  12. Good article and a great comments section!

    Sam – you can earn 1% APR with a Barclays Bank MM, FDIC insured. I like the concept of Wealthfront but I don’t like any risk with a time frame of less than 3 years.

    I am just over 2 months shy of 50. If you think getting into shape is hard in your upper 30’s, just wait! The biggest issue is that it is now so easy to get injured and the recovery takes forever. Also, I suffer from a bad stomach and sinuses. Both manageable but not fun.

    I have posted here before that I am looking to leave the rat race at age 50. We have saved for more than 2 decades for retirement and have a decent chunk saved for our 2 daughters college funds. It will probably be about 140K for each. If they need more, it will be up to them.

    What is concerning to me is the extreme anxiety I am feeling in regards to the change. Some of it has to do with me not really knowing what I want to do with the rest of my life. My wife has built a solid business and I will begin the transition by helping her. I know that eventually I will want my own thing, even if it is just part time. Staying where I am is not an option. It is flat out insane.

    So that is my mid-life crisis! Again, a great blog and the commenters are the best.

    1. Hi MD,

      I hear you on risk. And as they say, no risk, no reward. I like that one can dial their Wealthfront portfolio all the way down to 0.5 Risk from 10 if they want. When I looked at a 0.5 portfolio, I don’t see much risk at all, and would happily save and invest in such a construct 1-2 years away. Most people who are saving and investing for something will continue to have new cash flow coming in every month since they aren’t retired yet. And hopefully, when folks are retired, they’ll have enough passive cashflow coming in to support their lives.

      With a solid business from your wife, you have no problems spending your time! The mid-life crisis actually starts goes from 40 – 60 according to many of the folks who study this occurrence. Hence, you are normal!

  13. My good friends parents still farm up in Waianae Valley, it is a magical place.

    The hamburger steak and banana pancakes at Hannaras Waianae are killers too! :)

    Thanks for the great reads!

  14. Hi FS,

    Just wanted to say I’ve been reading silently for quite some time and your writing has changed the way I look at finances completely. Have a great start to 2016!


  15. Awesome article! I think I might be having a pre mid life crisis at the age of 33, maybe due to putting too much pressure on myself to be overly successful. I just got married in October, but we were together for 5 years prior and stayed disciplined to work hard and pay off all of our consumer debts (credit cards, car loans, student loans). We just have the mortgage debt left (195k, bought 2 years ago), recently cash flowed our wedding (12k) and completed our 6 month liquid emergency fund (20k). Now I look at our after expense monthly surplus (3-4k/month) and am trying to think of the best way to start creating passive income. There are so many options… up for a year and put 50k down on a rental property, start a business, buy dividend stocks, etc, etc. I guess im a bit fearful realizing that the only way money comes in each month is if my wife and I go to work at our jobs for 50 hours a week, so I’m wanting to start changing that, but no idea how much to save or where to start, but these articles help A LOT! Thank you for posting the volume and quality of the content that you do.

    1. First of all, CONGRATS on getting married and getting your finances together with such a surplus of cash flow!

      Your fear will be allayed when you start side-hustling. Why not start a site, and maybe create your own version of Financial Samurai? I just finished writing a post about starting a site that you must read.

      Make sure you have consistent open communications with your spouse. One team, one dream baby! :)

  16. Cool article Sam, I understand a midlife crisis, I think mine started with buying a used sports car too, followed by taking a one year sabbatical with no plan and finally quitting my job. Then like you, I was a bit bored with the pace (and the extreme loneliness/isolation) and got a consulting job in a cool project to learn and add more skills (I’m also an ENTJ).

    great job planning your car fund. Have you looked into renting a luxury car for a bit before diving into it? I only kept my car for over 1.5 years because I started a family and it was sitting in my garage looking pretty.

    Or if you you get a great deal in the car, you might be ok buying and then selling close to the price you paid for it. I did that.

    1. I’ll definitely rent a fancy car for a weekend at least and see how it goes. Knowing me, I think the $1,000 cost and driving it for 10 hours a day will be enough to rid me of my MLC car, and save the left over $59,000 for something else!

  17. I am totally offended! LOL, just kidding…but it is funny how young men grow up with car posters on their wall and dream of having them one day. My weakness has been automobiles and boats. I have actually pairing down the fleet over the last couple of years, but admittedly there is still a 911 turbo in the garage and its awesome. My philosophy is once you’ve crossed the “too big to fail” threshold from a FIRECalc standpoint you need to freaking live a little! I will admit though that from a dollars per smile, the boat is a WAY better use of dollars from a $/smile standpoint. I’ve got so many great memories from these toys I am very glad I purchased them, days out on the water with friends are truly priceless. I did wait though until it really doesn’t negatively impact finances. That being said, you’ll get the Porsche, love every minute of it…probably keep it forever, but after a couple years the novelty of the car will wear off and that’s fine. You will have gotten more value out of it vs. $60k sitting in the bank that you’ll never spend anyway.

    I’ve given up worrying about my family and friends who are going through the phases of spending in life. I think we all just kind of have to go through them and learn our lessons along the way.

    1. What year is your Turbo? Want to lend or sell it to me for cheap?

      Nobody has ever told me spending money on a boat was worth it. They say, the best times for owning a boat are when you first get the keys and when you return the keys!

      1. It is a 2011 Turbo S…I’d love an 993 air cooled 911, but those are crazy expensive. You won’t regret your purchase, very fun cars…I know I’m biased, but I just love the lines of the coupe over the cab and their big rear ends. Get a 997.1 regular turbo with a stick…2007~2009, should be in your price range you are looking to spend. Way more fun than the normally aspirated 911’s!

        As far as boats, you must not be talking to the right boat owners…or the ones that never leave the dock. Yes, boats are a pain, but they take you to the most amazing places. Living in SF, I’d buy a sailboat in a heartbeat over a car, funny because once you cut the engine and you are under sail and all you hear is the hull cutting through the water, there is nothing better. Blistering along at 8knts with the sun on your face…pure nirvana!

  18. There might be a new “quarter-life crisis” phenomenon: more people than ever are retiring in their early twenties. The share of 20- to 24-year-olds who say they’re retired doubled from 2004 to 2014! Maybe you could figure this one out in a future post?

  19. I think I had my midlife crisis a bit early when I quit working full time at 38. I might not live that long so maybe the timing was right. It’s a great idea to start saving a midlife crisis fund. You might not need it, but it’s still there.
    I don’t know about a sports car, though. Maybe have a big party in Hawaii. :)

  20. SavvyFinancialLatina

    I haven’t had a life crisis. Not in the sense of everything breaking down and doing crazy things. I graduated in 4 years with a BS and a MS at 22. Accepted a full time offer from corporate and started working a month after graduation. Finished my MBA at 23 while working full time.I have just been grinding away since then. I’m 25 going on 26.
    I don’t have a personality that would buy a crazy car as a mid life crisis. I just don’t function that way. I’m very sensible and level headed.

  21. My quarter life crisis was ages 18-21 or so. My GPA in senior year of HS my GPA dropped a ton and I ended up dropping out of college after 18 months. Generally only cared about MMORPGs and drinking. Fortunately, this was only a relatively short setback – I got my butt in gear and worked my way up in retail for 3 years, then in ops management 6 yrs while completing my undergrad with a perfect GPA, and now been on the corporate finance side post MBA (not with the banks) for the last few years.

    I’m in my early/mid 30s so it will be interesting to see if I do have a mid-life crisis at some point. I splurge enough and do what I want for the most part each year that I’m hoping I won’t have one. Great idea to start saving for one *just in case*

  22. I’ve read many other financial independence blog, but I always come back to this one. Its most relavent to me.

    Sam in most ways you are ahead of me. In some less good ways I am ahead of you.

    I am have a serious mid life crisis. I am 44 with good income and a nest egg, but I don’t feel accomplished or successful. I don’t have a family or children, and I am not motivated to make money since I can easily live on $60000 a year for myself.

    BTW I bought a used 911 Cabriolet for $80,000 cash when I was 39. I didn’t want to be one of those silver haired driving a convertible. I had a good time with that car, but it’s also a money sink. $1500 a year for insurance. $1000 a year for maintenance since the warranty expired. Plus 911 octane fuel and extra for car wash with hand waxing lol. Go for it if you really want it.

    I feel we live for the present, the future, and our legacy.

    Present – doing what we enjoy. Writing, art, fun jog, food, travel, companionship.

    Future – it feels good to be saving, planning for the future.

    Legacy – what have I accomplished during this life time. At least you have Financial Samurai to show for. For me its just a 7 digit retirement account.

    How do I deal with my crisis? Right now just chasing after young girls lol. Although I really want to have a family young girls these days are both career oriented and want to see the world. I am talking about the 28-32 y/o. Not like the previous generation when women want to settle down before 30.

    I like your idea if separate investment fund for different purpose. I just looked up 529 education fund for yet unborn child. I think I’ll do that. It’ll be a more meaningful saving :)

    Always cool and timely post.
    Happy new year!!!

    1. Thanks for your perspective! It’s always good to hear from somehow who’s there or been there. Fingers crossed I still won’t have grey hair when I’m 40. And if I do, they won’t be noticeable when the wind is blowing through my hair with the top down haha.

      The 28-30 yo range is great. Full of life, hope, and maturity too. I think many men would be envious of your situation with financial freedom and the ability to attract interested parties.

      I’ve never been one to think about legacy. But since everything lives on the internet forever, you are right, at least there is FS that can be read long after I’m gone.

      Enjoy your MLC and beyond!

    2. Wow- $1500 year for insurance and $1k for maintenance sounds incredibly cheap for a Porsche! Where do you live? Now I’m thinking I should buy a 911 after all.

  23. This is super interesting Sam. I turned 39 a few months ago and while I have no urges for a new ride or mate, the physical side is what seems to be nagging most.

    I have, since shortly after turning 39, become fairly obsessed with getting in awesome shape. And the differences between doing it now and at age 20 are real. It’s obviously way harder and what I need to do as far as time and effort has already caused one argument with my spouse. It also just kind of sucks because the reality of aging sets in.

    Sort of a departure from the topic of this post. I have no real additional thoughts to the Wealthfront idea outside of the fact that it’s a neat idea!

    1. Interesting feedback about the physical side. But is getting in physically great shape not a means to an end? Just look at Kevin Spacey in this post pumping iron for a much younger Mena Suvari! It’s OK, you don’t have to admit the purpose of getting in shape in a public setting! :)

      I do hope you get in the best shape of your life. I wish I had your motivation. But when you have the attention of a fine mate already, it’s hard to get motivated!

      Setting up a MLC Fund is a no brainer. I’m always looking for reasons to save, as saving for a purpose itself is fun. And having that nut at the end is also fun. It’s all about options!

  24. I have followed your awesome newsletter for a long time now! I love all your dedication and your work to giving us great financial advice. What happened to your connection with Personal Capital? Is that different from Wealthfront? How so? Thank you for all you do!
    I’m glad you are planning on buying the 911- enjoy yourself~ life goes too fast…I’m turning 50 this year.

    1. Hi Chris!

      Personal Capital and I still have a great relationship and I’m a shareholder after I bought my options! They’ve got the best free financial tools online for people who want to track their net worth automatically, analyze their portfolios for fees and risk, and see whether their retirement is on track with their Retirement Planner. In other words, PC is great for DIYers who like to stay on top of their finances.

      As I wrote in my newsletter, November 2015 marked the end to our consulting agreement after two years (their decision, also see my Perpetual Rejection post), so now I’m spreading my wings and exploring new firms. I’ve always been allowed to write about Wealthfront and the other digital wealth advisors while as a consultant to PC, but I decided to just focus on PC while I was with them.

      I want an easy, low cost solution for my money since I’m in the index/ETF/passive investing camp for 80%++ of my investment portfolio. I also recommend this way of investing for everyone else as well. If a firm like Wealthfront can do it for 0.25% or less, and manage my money well, then that’s an exciting value proposition. This is the opposite of the real estate industry, which still charges 5%+ commissions to sell a house!

      I want my readers to use the best products for free or at an extremely low cost to help them boost their wealth b/c that’s exactly what I’m trying to do. The older I get, the more amenable I am to having other people or products do things for me. Time is very precious, and as I get firmly into mid-life, I want to optimize my time to the maximum!


    1. Hi Zach – Probably my bias towards San Francisco based companies as Wealthfront is based here in SF and Betterment is in NYC. I figure, if I’m going to get deep on a product, I want to be able to meet people in person, attend events, etc to provide the best possible information. Meeting management and personnel is a habit that carries over from my banking days. The buyside always wanted to speak to management before making an investment decision to hear their vision, passion, and details.

      West Coast = Best Coast after all! :)

  25. I definitely went through a quarter life crisis when I was in my mid 20s. I didn’t do anything crazy, but I questioned a lot of things and felt like I needed to make big changes in my career. I worked through it by experimenting and making more use of my free time.

    As for a mid life crisis – I have yet to experience one. Although I probably will to some degree. I think most people do. The things I anticipate freaking me out the most are my parents and my appearance and health.

    I like your idea of starting a mid life crisis fund in advance. I’m not sure what I’d spend money on for myself, but I imagine I will have to start paying more money for things to help my parents. My mom is convinced by one of her doctors that she needs to get spinal surgery and I haven’t even reached my 40s yet. So their deteriorating health is/will be a big stress for me I think. Anyway…

    I like your idea of using an automatic deposit feature like what Wealthfront has. I’ve found that the more automated things get with savings and investing, the better.

    1. The great thing about a MLCF is that you can always direct the money for something else if whatever you are planning for doesn’t materialize. Having a reason to save is always a great way to go.

      I’m always more against surgery.. especially spinal/back surgery. Please have her get a second opinion!

      Freaking out about appearance is why cosmetics companies can earn 95% margins! I love how the put a young person in an ad for their skin product. Like… no duh. Who wore it best? The 22 yo or the 70 yo? Let’s see what the vote results are.

  26. The 911 is the classic ‘male mid-life crisis’ car. A shame it has such a beer-bellied, balding stigma considering how sweet they are! I hope you get one, irrespective of your belly size or your hair pattern.

    I am nowhere near a mid-life crisis, but I can sympathize with the quarter-life crisis. I’m about to turn 26, and have been with the same fringe-fortune 500 company for not quite 4 years since graduating college. At first, it felt great to be getting a bigger paycheck than I’d ever gotten from my multiple high school and college jobs combined. I was able to afford a nicer apartment than what we needed (silly) with my girlfriend/fiance-to-be, save 8% in my 401k (not enough, dummy!) and fund the expensive habit of playing paintball (Mostly, I paid for this by buying cheap gear and flipping it online for big profit. I guess that’s side-hustling with a purpose, so not quite as egregious).

    After a few years, a couple career advances and not yet finding something I love, I began to feel frustrated with working so much at something I’m not passionate about and constantly wondering where all our money was going each month. I sold all my paintball gear to help fund my wife’s grad school tuition. I did say it wasn’t cheap, right? I buckled down on budgeting and slashing unnecessary expenses. My wife would say my ‘quarter-life crisis’ turned me into my mother. An overly frugal save-a-holic; a tight-fisted, credit card leveraging bastion of dining in. I was and still am dead-set on building the foundation of wealth accumulation. My ‘quarter-life crisis’ is what made me want to get on a track to step out of the working rat race by age 50 or earlier. It’s what landed me at your site two years ago. Thanks for everything, all your hard work is appreciated.

    Here is to track racing our 911’s some day!

    1. Paintball! I used to play in my 20s for several years and bought my own equipment. The exercise, thrill of the hunt, and the stake outs were exhilarating! I went again for a birthday party a couple years ago and loved it. Too bad the fields are all very far away from SF.

      I do believe every male over 40 driving a Porsche 911 is or was going through a mid-life crisis. Gotta love society and our stigmas and perception! I chose the 911 exactly b/c it is THE mid-life crisis car that many folks might be able to relate to.

      I think it is GREAT your QLC got you back on track to taking your finances super seriously! It was buying my first property that did it for me. The, “oh crap! I got a big mortgage to pay!” moment. What some folks who spend aggressively don’t realize is that saving and investing towards goals becomes fun over time. The feeling of progress is the best feeling ever!

    2. One more data point: we bought another 911, after selling the previous one a few years ago. Here’s how it happened. We sold the last one as part of our efforts to get ahead financially. Even my wife missed it. Porsche kept inviting us to events, including track days. My wife drove the newest 911 GTS on the track well over 140MPH, got out of it with a big smile, and we bought a gently used 911 Carrera S just a few weeks later. The difference now from a few years ago is that we are in an entirely better financial position.

      I’m in my 40’s, so I guess I’m reinforcing the stereotype, though I do have a full head of hair!

      1. My suggestion to Sam, Mike, and anyone else contemplating an expensive car: learn how to do basic maintenance yourself (Mike may already do this, I have no idea).

        My parents always drove German cars growing up, since I grew up in Germany… I learned to drive on the Autobahn, at high speed (my record is 178mph my senior year of high school in an E39 BMW M5). That love for performance cars stuck with me, and we now own an older BMW and a newer Audi.

        The cars are expensive, but doing my own brakes / suspension / fuel filter / alternator / water pump / thermostat / intake / basic engine work has kept costs way down. Many of these jobs would cost $800 at a dealership and might take me 2 or 3 hours to do, plus maybe $40 in parts.

        There are certainly upfront costs (mechanic’s tools, stuff like a VAG cable for the audi, which costs $350, etc), but it allows me to considerably lower my cost of ownership over the life of the vehicle.

        I’m about to turn 36, and won’t be getting a Porsche anytime soon, as most of their enthusiast cars are two-doors, and I need a 4 door sedan for my next ride due to kids (I currently drive a coupe, and it gets old getting kids in and out of car seats in the back). I’ve attended a number of Porsche’s events, so have driven on the track pretty much everything they sell, and they are indeed fantastic vehicles. If I was willing to pay the $$$, a Panamera GTS would be a great solution, but I’d never pay that kind of dough for a vehicle.

        Instead, as my BMW reaches the end of its lifespan (currently 14 years old), I’ll probably stick with either BMW or Audi. I’d been waiting until we owned a house with a garage (our previous house, which we owned for 10 years, only had street parking), which we finally accomplished last summer. I see so many beautiful cars in cities that just get the crap beat out of them. I’m talking about M3s or AMG models driving around Jersey City or Hoboken, ruining their suspension, bending rims on potholes, and getting their hoods dented from SUVs trying to parallel park.

        If I still lived in the NYC area, with or without a garage, I would get an SUV with a ton of suspension travel (something like a 4Runner or a Jeep Grand Cherokee). Since I live in Northern Virginia, in the suburbs, I’ll probably go with something like an Audi S4 or a BMW 340i…

        If you do get a Porsche, I highly encourage you to join the Porsche Club of America and get involved in at least Auto-X, if not outright track days at your local track. Don’t let it be a garage queen!

        1. Good tip, and fun too. When I had a 1989 635CSi, I joined a 6 Series club and we went driving up the hills of Sonoma County from SF. It was magical to talk to other folks about our babies, help each other with maintenance issues, and so forth. It went far beyond the car. It was a camaraderie. Enjoy NOVA! I lived in McLean for four years. How’s Governor Terry M doing?

        2. I get my maintenance done by an independent mechanic with a long history of working on Porsches, which is the next best thing to DIY. Right now, I don’t have enough garage space or the right tools to do my own maintenance, but plan to do as much of it as I can once we get to our next home– my plan is to tool up and get a large, enthusiast-style garage, maybe with a lift.

          Also, don’t forget there is a back seat in a 911. My kids love it there!

  27. I think the mid-life crisis is the result of living a life you think you should live rather than the one you want to live. All this pent up stress, which is the product of all the things you listed, coupled with a feeling like you missed out on something, that regret, just bubbles up and results in the crisis.

    I think creating a mid-life crisis fund is smart but I might also recommend letting off some steam every once and a while so it doesn’t culminate in a crisis. Every few years, do something “crazy” that and just see how it feels. Rather than buy a trendy sports car, lease it. Drive it around for a year or two, realize it’s just a freaking car, and turn it in. At most it’ll cost you some money but not as much as a crisis. :)

    1. Knowing me, I’ll probably just lease one for a week and be done with it. The problem with early retirement is that you end up doing everything you wanted every year until you start getting bored or wonder what is the point of it all.

      This site has really helped provide the social interaction I need as an ENTJ, as well as a medium to help others with their financial questions and problems, and try and build a lifestyle business as well. These reasons are why I’m so pro everybody starting a site, and I’ll write a post about this topic in the future for sure.

      1. Hey Sam, I get what you mean about the early retirement thing and doing what you want until you wonder what the point is. I’m 45 and semi-retired a little over 7 years ago with much less money than you. I just got sick of the rat race I was in and did it.
        My stuff is paid off and I have enough semi-passive income in the residential rental market to be comfortable but I’m always looking for more. That fruit farm in Hawaii does sound sweet though!

        1. You know, one of my regrets was not being able to retire early enough to take care of my grand parent’s farm. It is amazing, and I should post pics of it one day. My grandparents are now gone, and nobody else had the time or interest to take care of it. I love the Earth and being surrounded in nature. The memories of visiting there as a kid were wonderful too.

          But that farm wasn’t mine to take care of. I know in the future looking back, one won’t be able to have that much land again for a decent price. It was ultimately sold several years ago to help simplify life. I miss it though!

    2. My Quarter-life crisis is what led me to start aggressively saving, not for a mid-life crisis fund, but as a way to get out of the rat race. So I perfectly agree, the “whatever” crisis is all about living the wrong life.

      In my case, the result is (so far) positive as it has driven me to save much more than I used to.

  28. This article is fantastic. Many people in my immediate environment have indeed done strange things around that 40/45 year old range (the classics i.e. ferrari’s, younger lovers and boats). Given that I’m 22 creating a mid-life crisis fund is not a priority yet. However like you said saving with a specific goal in mind is so much more fun/rewarding. Sadly most of the fin-tech companies you discus do not currently accept customers from Europe so that means I’d have to look for an alternative to your roboadvisor once there is extra cash besides the regular savings/investments plan.

    1. Perhaps there is a Wealthfront of Europe that’s waiting to be started! I think there is actually. Just gotta go look. I know Funding Circle is a rapidly growing consumer lending company started out of the UK, much like SoFi, the largest fintech consumer lending company in the US with over $1.2B in funding right here in SF.

      Whatever happens anywhere tends to get replicated everywhere else. Spreading good ideas and business models is an inevitability!

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