Financial Independence End of the Year review |
- End of the Year review
- Anyone else contemplating going Roth because of the tax plan?
- Can I get your thoughts on an unorthodox "lifestyle" choice for FI?
- FIRE in the news (BBC)
- Daily FI discussion thread - January 02, 2018
- How common are jobs offering 20/30yr pensions?
- Have any of you married a spouse with a ton of student loan debt?
- Help on 'the number' and planning the best life ahead
- My 2017 Income & Expenses
- Grad school and asset allocation for eventual FIRE
- ~$2M NW / Starting to think about FI
| Posted: 02 Jan 2018 03:40 AM PST The end of the year draws nearer, and some of you has started to submit your review of 2017 and your goals for 2018. Please fell free to do so here, and discuss your past year and expectations for the year to come. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Anyone else contemplating going Roth because of the tax plan? Posted: 02 Jan 2018 10:46 AM PST So I make ~90K, wife was making ~40K. I had been maxing the 401K pre-tax to get the money in that was in the 25% bracket. Now though, my wife has quit her job with the intent to go back to school, meaning that if we save no money at all this year, our taxable income will be about 90K-24K = 65K just from the standard deduction (Plus HSA, pre-tax health insurance, etc...). Why should I throw money into my 401K pre-tax now in the 12% bracket, especially if I think tax rates will increase significantly in the future, as will our incomes? Only thing I can think of is to try to pay some 0% LTCG on investments, but I will probably want to sell too much of it, and if the wife goes back to work part time or something we may very quickly hit the 77,000 mark, and even then it's only 15% LTCG tax. The other benefit of going roth is that I can mega backdoor my after tax contributions at work right now. So I could theoretically get about 40 grand into roth ira's this year, while only paying 12% on the vast majority, if not ALL, of my income. This would also allow me to have more money available to me in the event that I'd need a bigger e-fund or wanted to buy a house soon or whatever, since I could pull all of that roth IRA contribution money out with no issues at any time. Alternatively I can max my pre-tax 401K, put the rest into roths, and sell investments at 0% ltcg to try to even my cash flow out. Anybody else in a weird situation like this? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Can I get your thoughts on an unorthodox "lifestyle" choice for FI? Posted: 02 Jan 2018 05:41 AM PST From the sidebar this sub is for discussing "strategies, techniques, and lifestyles". Given that there is clearly a dominance of software devs here, and we seem to generally think similarly about maximizing savings, splurging once and a while, and diversofy investment approaches...I wonder what other stuff do the majority of us have in common? Do we like the same cereal? Do we watch the same movies? Do we like the same travel destination? The same car? What about housing? Do we bias towards detached homes with nice yards? The reason I ask is that society seems to have optimized around 2 adults per household. But increasingly, I'm observing more than 3 adults move into the same house...either to upgrade quality of life or minimize costs. There are three, 4 bedroom homes I know of in a 4 house radius of my own, with 3 adults, 2 or 3 of which are working. These houses are multi generational homes, spanning one family. But, ask yourself, would you rather live with your extended family, or a friend who was near your age, and thought very similar to you? Together you could share say, 2 cars instead of pay for 3 or 4. You might be able to carpool. You could get more utility out of a cottage, that you could likely jointly, buy sooner in life. You would have one internet bill and heating bill. That surprise furnace repair is spread 4 ways instead of 2. It only takes 1.5 people to do the gardening, and one person to manage several rental properties. Do any of you think a two-couple household could function at scale? And in the long-run? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 02 Jan 2018 09:51 AM PST I was really pleased to see FIRE being featured on BBC News: 'We paid off our mortgage and hit the road'. Don't know if the video will work outside of the UK, but the blurb text is as follows:
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| Daily FI discussion thread - January 02, 2018 Posted: 02 Jan 2018 03:08 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How common are jobs offering 20/30yr pensions? Posted: 02 Jan 2018 02:13 AM PST Hi everyone. I'm Canadian, in university, and finishing a Bachelor of Commerce/Comp Sci double degree. I've been looking at what I want to do from a FIRE perspective after graduation. I live at home in a LCOL area. However, we live right next to the border, and salaries across the border are significantly higher for tech workers. In addition, the US dollar is strong. Because of this, my plan was to stay at home after graduation and save money, and try to find a job in the US. I've been reading about the incredible benefits of looking for a job with a pension. When you consider the amount of time it would take to accumulate the assets for an annuity that a pension gives you, you realize you're actually getting a huge benefit. For example, I was reading about a guy who went in the military right after high school (I think this example was American). He worked hard for his country for 20 years, and at 38 yo he retired. His military pension was $35,000 a year, indexed to inflation. That's great! After that, he started another government job where he's working towards another pension of roughly the same amount, and will retire fully when he's 55. Are government jobs usually the only ones with benefits like this? Are benefits like this declining as much as I've been led to believe? It gives you a huge leg up on the people who don't get a pension plan. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Have any of you married a spouse with a ton of student loan debt? Posted: 02 Jan 2018 03:06 PM PST I'll give a little background about myself before I get into my issue. I'm naturally a FIRE oriented person. I get it from my father's side of the family. I'm 29 with a MSEE degree. I graduated debt free, worked hard through my 20s to buy a house, and I've put myself on a path of early retirement in my early 40s. For the second time in a few years now, I've gone on a date with a girl that is burdened with debt. The first one was a M.D. and she told me our first date that she had $300k in debt - I almost passed out. That relationship wasn't going anywhere for other circumstances. However, I recently went on another date with a girl that recently graduated from veterinary school. Veterinary school is basically the cost of med school, but vets get paid far less than medical doctors. I didn't ask how much she was in debt, but she knew the concept of paying $1000 per month, only to pay the interest on loans. After 8 years of school, I have to assume she's at least $200k in debt. It's not serious yet, but I could actually see myself with this girl. However, if it gets serious this obviously conflicts with my quest for financial independence. Has anyone had to make this sort of choice? Please don't give me some sort of cheesy line about love conquering all haha. I realize this is getting WAYYY ahead of ourselves, but as a FIRE oriented person, looking ahead is sort of my thing. - With student loan interest rates at 6%, it would actually be worth it for me to take a mortgage out on my house at 3.5% to wipe out her debt and basically start from scratch, except with two incomes and a mortgage. Has anyone had to face this sort of decision? Any regrets? Any advice? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Help on 'the number' and planning the best life ahead Posted: 02 Jan 2018 01:18 PM PST tl;dr: This stuff isn't easy; what books, ideas, heuristics, decisions really clarified it for you and you would recommend to someone struggling to figure out what the next 20+ years should look like in terms of plans and actions? I am realizing that I really need to be thinking in terms of my "number": how much we need to not even retire but merely "not-have-to-work-at-jobs-we-don't want-to". I say this as one member of a couple who are currently both working jobs that are very wrong for us other than my wife's financially (and yes, I am seeking more remunerative work). I've looked at the FAQ and basically it says "25x expenses" based on the market analysis. That's a good start, but I need more understanding than that. I also looked at some of the FI/RE calculators, but got a bit confused. I thought the book The Number might be helpful, but the reviews of it suggest it really wouldn't be. The goal for me, is to just create the happiest life possible for myself and my wife (of course). That could easily include us working at a low-earning/high-satisfaction jobs for many years to supplement market returns. I'd like to zero in on a comprehensive view that incorporates:
In some sense, this is the entire subreddit, right? I get that. But I just am asking for a robust path to understanding. I'll continue to post questions here now and then, but in addition to that, what must-reads would you recommend? What ideas or heuristics have been the most clarifying and powerful in your own story? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 01 Jan 2018 08:04 PM PST I always like seeing income/expense reports so I thought I'd share mine from 2017 along with a comparison from 2016. I track everything manually in excel.
Notable increases from 2016 to 2017:
Notable decreases from 2016 to 2017:
Additional clarifications:
My savings rate kind of sucked this year but I'm not too upset about it. If I remove the cost of Lasik/medical flex spending, stop breaking my damn phone, and halve the puppy costs to remove the non-recurring, I'm down to about $24,000/year spent with almost half of that being my mortgage. No ragrets, onto 2018. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grad school and asset allocation for eventual FIRE Posted: 02 Jan 2018 07:58 AM PST Here's a question I could use a little advice on – since my eventual goal is FIRE, I'm trying to optimize in light of that, though it may have a PF-ish bent: I'm in my mid-20s; currently my investments are ~$600K at roughly 90% equity 10% debt, with some diversification across international in both. Recently I had the incredibly good fortune of finding out about a 529 account my parents have for me – it's ~$60K, and independent of that I've been thinking pretty seriously about grad school in the fall (applied but haven't heard back yet). Depending on the program this could either cover tuition in full or at least come pretty damn close. (This is not included in the ~$600K above.) My question is how I should be handling my investments in the interim pre-grad school, particularly "what asset allocation would you choose for the 529 account?" in light of the timeframe and my overall mix. For FIRE I want to be on a certain asset mix, but in the interim I'm wondering if I should divert from it for part of the portfolio. On one hand, money is fungible, so even if the market plummets over the next year I still have the ability to go to grad school – and therefore it seems silly for me to handle the allocation differently on this piece of my portfolio, when I've already decided I want a higher risk-reward ratio overall. On the other hand, this feels like quite a windfall and good fortune to find out about, and some amount of me wants to 'lock in' knowing that my grad school is paid for (even though I know it's paid for either way really). I've been playing around a little with a backtester at https://www.portfoliovisualizer.com/backtest-asset-class-allocation and see that even a 50-50 allocation still has pretty positive returns, at much lower one-year variance … but part of me thinks even that is more aggressive than many folks would do for cash they're looking to spend within a year (am I wrong?), and many would even just hold it in cash or similar (though I assume that's more if you couldn't otherwise finance it) What do you guys think? Would it be weird to treat this portion of my portfolio differently than the portfolio in aggregate? And what allocation might you yourself choose? FWIW, the funds available in the 529 appear to be low-cost Vanguard index funds, so no real concerns there. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ~$2M NW / Starting to think about FI Posted: 01 Jan 2018 06:01 PM PST Quick background info - In my late 30s and have ~$2M in NW (depending on how this is calculated). I work in tech and live in a high cost Southern California area. Married w/ 1 kid in 1st grade. I REALLY enjoyed my holiday break being able to spend as much time with my son as possible and am now starting to think about FI. I'm dreading going back to work not because I don't enjoy it but mainly because I'm a work-a-holic and know that I will be back on a 50-60hr week schedule which will take time away from the family. I've never left California and I know living here will make FI extremely difficult. Biggest question I have is whether or not to pay off all my debt and start re-building all my savings. The logical side is telling me it's better to invest due to the low interest rate but nothing sure beats having the feeling of being debt free. Where should I start with regards to FI if I'm only starting to think about it now? EDIT: Wow lot's of good advice on here. Adding some more info: Salary: My base is $160k; conservatively estimating RSU vesting schedule and yearly bonus, I will probably end up at around $320k a year; Wife works and brings home $75k While it seems like we live a lavish lifestyle with the house and cars, we really don't go crazy with the monthly expenses. Our son keeps us busy with all his activities and we cook at home a lot. We try and front-load/max out our 401Ks so we live pretty frugally in the first half of the year. Mortgage is $2500 a month and property Tax is $15k/year. I'm not looking to retire tomorrow but I would like to have the option to do so in 5-8 years in my mid 40s and am just starting to think about it now. My assets: -Cash: $135k @ 1%; Waiting for entry point back into market -Investments: $130k; Mostly in VTI ETF or S&P500 Index Fund -Company Stocks: $475k; Need to diversify -401k: $520k -Roth IRA: $100k Other -House: Bought at $1.1M ($600K left on Mortgage @ 2.75% 7/1 ARM); Way too much house for the 3 of us but I'm in a good area where recent comps have been going for $1.4-1.5M. Bought primarily as a way to diversify out of stock market (and to enjoy). -2 x Teslas for Wife and I ($50k left on combined loan for both @ 1.5%); set myself back a few years because of this but wanted to enjoy it now rather than later -Unvested RSUs: $400k -No other debt Recurring Bills -Cut cable, pay for internet -Have solar so minimum electricity bill; no gas bill because I'm all EV -Cell phone bill -Daycare for son @ $500 -HOA @ $150 -Property Tax [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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