Financial Independence From Homeless to 1/2 Mil |
- From Homeless to 1/2 Mil
- Just hit half-a-million!
- Acknowledging privilege [excessively]
- Daily FI discussion thread - January 06, 2018
- Early retirement for Immigrants?
- Do you have a financial mentor?
- Fun books about FIRE?
- RE Countdown Guide?
- Backdoor Roth Conversion while in PhD
- FIREd then PhD
- How the top 1% keeps getting richer: more in stocks and less in housing
- If I was going to read one book this weekend, which one would it be
- Need your opinions on college
- 20 Year Old College Kid, Just Went Through FAQ, Questions!
- Update: I'm so close I can taste it.
- latest to do mega backdoor roth ira
- Fire focused career
- Infographic: Visualizing the Global Millionaire Population
- 28yo canadian EMT: ER plan
- 2010 to 2017, A Financial Journey (with charts in USD)
- Tax shelters other than retirement plans and mortgage deduction
| Posted: 06 Jan 2018 08:57 AM PST I always have a good time reading the feel-good stories of others, so I wanted to share mine. It was only recently that I found this sub and realized that we are not alone in the thought that the main thing we want out of life is financial freedom. Stories in this sub have helped to keep me motivated. I hope that I can contribute in the same way. Brief Background My wife's father once described us as the most successful people in our families. In like, forever. I am a CPA and she is a teacher. My salary has ranged from low 40s in ~2009 to now low 80s. My wife's has ranged from low 40s since ~2011 to now mid 50s. We are both in our very early 30s and our son is almost 3. We have had no inheritances. We have had no monetary gifts. Our growth is largely organic and opportunistic. Our families were challenging at best, being largely broken and not fiscally sound. Fights over money, mounting debt by our parents, poor houses growing up, etc. We've been hardened to life a little, having been exposed to murders, abusive step parents, alcoholism and drugs, suicides, and even homelessness. We have had some important people that motivated us along the way, such as teachers, ROTC instructors, bosses, and friends. I moved in with my now wife and her parents at the age of 17, and we both moved out when I was 19. We got married after a decade of being together. Around that time was when I really started tracking our finances. I think our personal experiences shaped us into being fairly fiscally-minded people. In college, I was the guy that turned my vehicle AC on over a certain speed and rolled the windows down below that speed because I had read that it saved gas. I have always been a coupon-friendly guy. My wife loves to cook, so we save a lot on not going out all the time. She appreciates frugality slightly less than I do, but is not a "material girl". We generally live well below our needs on purpose. Education My wife and I are both products of public education and a public university. Thankfully, we were very fortunate to leave college without any debt. In our state, there is a program for a state-funded tuition scholarship when you achieve a certain GPA in high school and a certain standardized test score. My wife and I both got that. I had additional scholarships that allowed me to literally pocket money while in college and pay for my master's, and my wife had some scholarships as well that only required she pay a small amount every year. I finished with perfect marks, and my wife damn near did as well. Portfolio We started saving before 2013, but that was when I really started tracking my balance sheet. I don't really track an income statement on paper, but I have everything in mint and run reports. I keep us in check during the year, but as long as our life-creep doesn't come on too strong, and our balances increase at the rate we hoped, I may not ever put one together. Our assets (Major PPE) are primarily our house (I kept the value at cost), our cars (depreciating annually), and my wife's wedding bands. Other investments include a post-tax account that I setup back in 2007 (yeah, I wasnt the best financial advisor to myself then..) and a real estate LLC that a friend and I are testing out starting in 2017. Debt is primarily the house and some accrued medical and small credit card balances. I never pay credit card interest, but I use them exclusively for the points (see below). We refinanced our house to a 15 year mortgage in 2012 at ~2.5%. It just dropped below 100K in January 2018. Retirement investments are our 401ks. I get a 3% match and contribute 15% (10 traditional, 5 roth). My wife gets a 5% match and contributes 10% (all traditional). She also maxes out a dependent care FSA since we are on a PPO. Of course, the market has helped us achieve this current milestone. 5 year balance sheet:
Reducing Overhead One of my routines is constantly making sure that the bills are as low as needed. Cordcutting has helped for a lot of people, but I have been using a HD homerun prime for years to keep my cable bill down. We installed spray foam and energy efficient appliances/thermostat in the house to keep electricity down. We drive smaller and cheaper cars to keep our gas bill and insurance bill down. I shop our insurance every 6 months to make sure I am getting the best rates. We refinanced our house to save on interest. My Favorite Love/Hate Investment Interest bearing checking accounts. These have been very good to me, but my biggest "hindsight is 20/20" situation is that I do wish I would have put them into a growth fund over the past few years. But alas, I did not. Our plan all along has been to save up enough cash on hand to pay off our next house. Then we would invest those funds in something conservative to offset the interest. So I started opening up various interest checking accounts across the country and in my state. My lowest earns 3% and my highest earns 5%, with a weighted average of around 3.9-4.0%. I use a combination of automatic ACH, mint for login, and spend an hour every month buying Amazon gift cards on the debit cards. I have 8 accounts open now that require monthly "work" and around 16 that are passive. My Favorite Hobbies One suggestion I could give is that if you like any hobby that MAKES money, focus on it. I like to do some resale on the side, and that does make me a little money, but nothing significant. Enough to pay for some of my toys with what I scour from slickdeals and dansdeals personally. But I am also a credit card churner. There is something about staying in an all-inclusive for free by 'gaming' the credit card system makes it that much nicer to enjoy! I do not track my points in my net worth, but I am sitting on north of 2M points in total. This is a great hobby and really fits with the FI mentality if you are organized and comfortable with playing games with your credit (my wife and I are both north of 800, so the risk is low). Next Goals One Million Net Worth by 35. Really, I always told myself that I wanted to be a millionaire by 30, but I had to modify that goal a bit! Shoot for the moon, right? Worst case, you land among the stars. Two Million Net Worth by 45 (though 40 would be great!) [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 05 Jan 2018 08:13 PM PST Hit a new milestone tonight. Just wanted to share with someone. Started at 23 with nothing, but did have a decent job starting in a call center. 13 years later, I hit half a million in Net Worth, and I just bought my first investment property! (I will close on it in February) Edit: I've had a few PM's and enough people ask what I did to achieve this. Quite frankly, I treated debt like it was a plague. I didn't get my first credit card until I was in my early 20's, and I've never carried a balance. I never went to college, so I have no college debt. (This is probably a major factor in my success.) I'm not going to knock college education, and I don't want anyone thinking that not going to college is the way to get this kind of money, but it was a major contributor to my success. Not having a college debt, and just working hard and learning in a computer technical field (one of the few fields where college used to not matter as much unless you were a programmer) contributed to my success. I focused on scripting languages, and became so good at them, that I built automated systems for companies. Simply put, I focused hard on system automation, and was very good at it. This landed me side by side with "degree'd" engineers, earning the same amount of money as them, but without the debt of college. As far as investments are concerned, I started investing 12% into my 401k early on, and I invested heavily in Latin America stock, mostly PBR (go look it up). PBR was also a luck factor, because it skyrocketed before the 2008 crash, and I (innocently and luckily) got out of it about 6 months before the crash. I had no clue what I was doing in those days, and was just looking up stocks that had massive returns because I was stupid. (Today I'm mostly in stable tech companies like MSFT and ORCL.) Anyways, that massive boost early on from PBR really got my investments going ridiculously early, up to something like 60k in the first 2 years. I also bought National City (the bank) just before they were bought by PNC, and that bump helped a little. I really fumbled through stocks, dangerously in those days. That helped me build up a small but decent net worth early. I eventually moved to the "100% - age" model, and put a percentage of my funds into low volatility bonds based on my age. At some point, I also increased my paycheck contribution to 14%, and never looked back. Why do I have so much cash? I just completed a contract, and that cash is going towards that investment property I mentioned above, so it's not going to remain as such. I also dumped heavily into TSLA back when it was around $100/share. (Yes.. I know all you 'savvy' folks, I know), but TSLA really gave me a boost as well. I've since sold out of it mostly, but I still hold some shares "just in case". But if I were to name the single thing I've done to help boost my net worth so effectively, it would be paying down debt. You lose SO MUCH MONEY to interest. I paid down my house with GOBS of extra cash on principal every month, and did a 15-year finance, instead of a 30-year. I also bought a house in what is now luckily a growing area, and I didn't buy a very big house. "Experiences, not things" is my motto to live by. So we try to not buy too many things, and that allows us to save for events, and the rest of the cash goes towards debts. The next goal is to close on this investment property, and begin the potentially risky venture into being a landlord on the side. The area the house is in is in an area with one of the best elementary schools in the state, so the goal is to cater to young families that want their kids in that school. I was able to negotiate a great deal on the property, and pull in a very low interest rate (for an investment property.. 4.5%), by putting 25% down on it. (Part of that cash I mentioned earlier.) At this point, I simply watch the market for major ups and downs as a signal for collapse. They say you can't predict the market, but I did a couple of times based on (probably stupid) ideas, like when China crashed hard in 2015, I pulled out of the U.S. market because I firmly believe these things do not happen in a vaccuum. Sure enough, our market dropped 10% (go look at .DJI on google finance), and I got back in. Things like that have helped give me boosts here and there. But at the end of the day, contribute as much as you can stand to the market, live in a smaller home, carry as little debt as you can, and before you know it, your money will be growing. That's really it. From where I'm standing, it's honestly nothing special. No magic formula, no major number crunching, just consistency. I don't "want" things very much, so I don't give in to many temptations. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Acknowledging privilege [excessively] Posted: 06 Jan 2018 02:44 PM PST I've noticed a trend in the last year or so - people acknowledging their privilege before discussing or asking questions about anything related to money, success, freedom, etc on online forum or blogs. This is well intentioned and probably a positive outcome from the recent focus on social and economic justice, but it also seems trite at times. Does it really have to be mentioned that a few circumstances in your life were beneficial when you're on a subreddit that's specifically dedicated to the accumulation of wealth? It's safe to say that we're all the beneficiaries of favorable conditions. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Daily FI discussion thread - January 06, 2018 Posted: 06 Jan 2018 03:09 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]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Early retirement for Immigrants? Posted: 06 Jan 2018 09:58 AM PST I'm a US based immigrant, been working in the US about 11 years and just crossed the $500K net worth threshold in 2017 (Hooray!) Without any mortgages, loans etc. I'm 37 and single. Was wondering if there are other immigrants on here and how they think about ideal net worth to reach before contemplating potentially a return back home or early retirement in their adoptive country? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Do you have a financial mentor? Posted: 06 Jan 2018 03:08 PM PST I'm curious to know how many of us are keeping our whole FI goal under wraps except for on Reddit, and how many have somebody confidential they can talk to for advice and input. How does it affect your experience? Sometimes I wish I had someone who could push me and encourage me towards my goals. Not because I'm not motivated, but I think a mentor would make me MORE motivated and maybe be able to see if there's something about my lifestyle that is keeping me from moving forward. Someone who's been there before and gives a crap about my goals. :) So do you currently have a mentor, do you wish you had one, or are you perfectly happy plugging away on your own? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jan 2018 05:31 AM PST Avid reader here looking for good books about FIRE. A fun read would be ideal, but Anything FIRE or financial planning centric would be good. Read Rich Dad Poor Dad last month and loved it. Thanks. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jan 2018 10:49 AM PST What are some of the financial changes one should make in the months or years approaching RE? I can't seem to find a handy guide with a timeline for action. I can think of:
Anything else I'm missing? Mostly I'm interested in whether there's some math or data that suggests when one should start on each of these. It'd be nice to have a to-do list with suggested timing to help the transition from accumulation to retirement. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Backdoor Roth Conversion while in PhD Posted: 06 Jan 2018 01:33 PM PST I'm planning to get married this year. My future wife and I will have a combined income of ~$80K in 2018, which will rise to ~$90K in 2019. I have about ~$100K in 401K/IRA retirement accounts. We'd be in the 22% tax bracket in 2018 and 2019. We expect our incomes to rise significantly after I finish my PhD and she finishes her medical residency. Should I use a Roth conversion to move all my tax-deferred investments over the next two years? Any risk of keeping all of our investments with one broker? Edit: meant conversion to Roth accounts. For additional context, we're interested in FI but not ER. Also, it seems to me that we're facing a confluence of unique factors that make conversion now attractive: lower tax rates due to new law (which will sunset in 2025) and lower income for us (which should rise dramatically in 2022). [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jan 2018 03:14 PM PST 44 M, non-IT, non-engineer, HCOL. Probably enough to FIRE. Has any FIREd person applied to pursue a PhD program? Most programs will provide a stipend. If you live on this stipend, your stash would continue to grow during your PhD years. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| How the top 1% keeps getting richer: more in stocks and less in housing Posted: 06 Jan 2018 02:47 PM PST How the Top 1% Keeps Getting Richer https://www.bloomberg.com/view/articles/2017-08-28/how-the-top-1-keeps-getting-richer An article from earlier this year, but a reminder that betting on human ingenuity does tend to outperform betting on land. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| If I was going to read one book this weekend, which one would it be Posted: 06 Jan 2018 09:14 AM PST I'm in the northeast and subzero temperatures mean I'm going to be staying indoors. Just found this sub and there's a lot of recommendations in the sidebar but if there was one book to read this weekend, which one would it be? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jan 2018 02:04 PM PST Hi everyone. Im a high school senior and I really need help from people who have (presumably) had to make the same choice before. As I see it, I have three options. These are surrounding the base premise that I get into one of my three top schools (Stanford yale upenn) which is a huge assumption, but necessary to make up my mind. The three options are: 1) Go to Alfred state with a full ride that I have already been awarded or a full ride to either Loyola, iit or one of the other colleges that I am a full ride finalist for. 2) Go to one of the higher mid tier schools that I have been accepted to, on the assumption that I am not awarded any other full scholarships (Fordham, Boston u, villanova). All of these colleges have full scholarships, but would become part of option 1 if I am awarded them. 3) Go to one of my top schools with the following majors. Yale - business , Stanford- comp sci + business, Wharton - ibanking + business. This option will see me leaving with approximately $150k in student loans, since I likely will get no financial aid. The obvious plus side here is more networking, better job opportunities, etc. Another thing that ought to be taken into consideration: I have $150k from my grandparents to use on college, and whatever I don't spend or expect to spend I will get in my junior year. If you were me, what would you do? Right now my current plan is go to the best full ride I get if I don't get into one of my top 3, and if I do, then I'll go there. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| 20 Year Old College Kid, Just Went Through FAQ, Questions! Posted: 06 Jan 2018 08:51 AM PST I have a couple questions! Currently I'm a student at University, studying economics and information technology. By the time I graduate I will have about 160k in student loans principle. I am paying off about 27k of that every month at about 140 a month to cut on my interest for it. I will be working during the school year, about 15 hours a week at $12 hour. My current plan is to erase my CC debt I have for paying for classes ($650, $35 min a month but looking to aggressively repay), pay my loans off ($140 a month) and save the rest. Starting in the summer I will be renting an apartment and splitting the cost with a friend, should come out to (~$600) a month on that. I'm hoping my CC debt will be paid off, making my average liability a month around $800. I don't usually buy a lot of things, food mostly but I can cut back on that too. I read all of the FAQ, and I just want a solid plan that isn't idiotic going forward. Obviously student loans are number 1. Are there anythings I should be supplementing my wage job with? I read a lot about traditional IRA to ROTH IRA rollover ladder, but I feel I'm still too young to be doing that, no? Thank you all! [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Update: I'm so close I can taste it. Posted: 06 Jan 2018 12:06 AM PST So two very interesting things happened today.
So today was a strange day. I feel like my hand is being forced a bit. But I'm not going to panic; if I take the layoff, I'd go on unemployment, but if I stick around, the pay is still better than unemployment plus I keep my medical benefits. One thing that's not happening though is panic, because I have the savings to weather this. If I don't find another job in the next 10 years I may just have to retire. I figured I would be getting a tax cut in 2018, but somehow I didn't think it would happen like this. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| latest to do mega backdoor roth ira Posted: 06 Jan 2018 03:55 PM PST Am I correct in thinking that I can contribute post-tax $, all the way up to April 2018, to my 401k then transfer it to Roth for 2017? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jan 2018 06:11 AM PST Has anyone on here done themselves or seen someone turn.their passion for FIRE into a career? I mean aside from the whole blogging/vlogging bit. I have had good and bad jobs but am FI now but not looking to RE. I spend so much time on my own FIRE so wonder what could be a FIRE-related vocation. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Infographic: Visualizing the Global Millionaire Population Posted: 05 Jan 2018 08:06 PM PST Great website. NYC leading the charge, no surprises there. Interesting to note millionaires make up top 0.2 of the global population. http://www.visualcapitalist.com/global-millionaire-population/ [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 05 Jan 2018 05:26 PM PST First, I'm 28, in a relationship with no kid and I live in Quebec. I am a full-time paramedic for now but I will have the opportunity within the next year to take care of people with mental and physical disabilities. My goal is to achieve financial independence. After that period I still plan to work part time (20h/w) as a paramedic, but I don't want to add that income in the balance, even though it's not marginal I want to see it as an extra. My tax situation is different since I have to manage subsidies which are pretty much tax-free except for a Quebec Pension Plan I need to participate. Investments so far : 32k TFSA 44k RRSP 40k on mortgage (200k left) (All in EFT following the 100% equities option of CCP) Net income : Tax-free for the CRA: 80k Part-time job: 21k Expenses needed when retiring: 24k/y With a 4% withdrawal rate and an annual return of 6% (w/inflation) I need 600k, which should be accomplished within 5-7yrs. My plan, for now, is to max out my TFSA, a goal I will accomplish next year. I will not have a lot of room each year in RRSP because of my low accountable income. But it also means that the tax of the interest of non-registered account will be less aggressive. Also to put more money on the mortgage seems safer. So according to this plan :
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| 2010 to 2017, A Financial Journey (with charts in USD) Posted: 05 Jan 2018 10:00 PM PST About me:
I was tidying up some of my spread sheets and tools to start a new year of financial tracking in 2018, and thought that it was a good time share my journey so far. I'd also love tips / advice from others here. :-) Here goes: https://imgur.com/gallery/1nVyQ <edited for formatting> [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||
| Tax shelters other than retirement plans and mortgage deduction Posted: 05 Jan 2018 08:58 PM PST I'm maxed out on retirement plans (403b, 457, Pension). I also max my ROTH. The rest goes into an individual account. With this ridiculous bull run I'm making serious gains in the individual account as well and the tax implications are getting more pressing. Other than buying a house, are there other ways I can shelter income? I live in the CA Bay Area and while I can technically afford a home, home prices are ridiculously over-valued. When the next downturn hits, I'll probably buy, but between then and now I'm wondering if I have any options. Not married and no kids. Thanks! [link] [comments]  |
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