Financial Independence Do you drive an old car until it dies now that you are financially independent? |
- Do you drive an old car until it dies now that you are financially independent?
- Quick reminder: You can get an ~8% discount on Geico auto insurance if you tell them that you own stock in Berkshire Hathaway
- Berkshire Hathaway 2017 Annual Letter: Stocks vs Bonds Risk in the Long Run
- Index Fund Expense Ratios: Fidelity vs Vanguard
- Daily FI discussion thread - February 24, 2018
- Car utility vs economy
- 39M/Married/2 Kids - How Are We Doing?
- Does anyone here leverage their long-term investments?
- 37/M writer / programmer considering relocation to Mexico City. Poke holes in my strategy.
- Does this sub generally favor investing in real estate or a fast-food franchise later in life?
- Justify saving now to live better later...
- Low income as a grad student, convert Trad IRA to Roth?
- FI questions from Poland
- I can make money on video games (idk if this is the right reddit for this)
| Do you drive an old car until it dies now that you are financially independent? Posted: 24 Feb 2018 03:19 AM PST Back when I was poor (pre-financial independence), I used to drive some sad looking cars. I kept the car going through a combination of grit and rubber bands, anything to keep it on the road for just a few more months before it completely died on the side of the road. Now that I am well off financially, I still struggle with the idea of buying a new, or just slightly used car, when my mechanic can help me get just a few more miles on the old car. At 150K miles or more, I may be spending more money on repairs than the cost of just getting a new car. Has anyone else here done the math of keeping a car past 150K miles even though they can now afford a new one, now that we are financially independent? [link] [comments]  |
| Posted: 24 Feb 2018 01:15 PM PST Maybe this is common knowledge among the FIRE / financially aware crowd, but I just wanted to reiterate this to everyone because I'll be saving almost $100 this next 6 months on auto insurance simply by spending less than 30 seconds telling the customer service agent about it. The reason I didn't post this to, for instance, /r/frugal is that I'm pretty sure 99% of the people on this board own stock in Berkshire Hathaway either directly or through index funds (for me, VTSMX). If you're younger like me, Geico is basically the only option you have for cheap(ish) insurance aside from the really, really sketchy stuff. My premium went up significantly since the last policy cycle due to statewide factors which really pissed me off. But this discount is huge, and I figured it was too easy to not share with anyone who may not know yet. Edit: As seen below, some people are commenting that this discount is not applicable to them, or is negligibly small. After doing some online research, I believe this is because there is an upper limit of discounts that can be applied to your policy, so if your existing discounts are already high enough (multi-line, previous affiliation from other organizations, very long and safe driving history, etc.), the discount may not be applicable or will have marginal effect for you. In any case, I would say it's worth the call just to see. [link] [comments]  |
| Berkshire Hathaway 2017 Annual Letter: Stocks vs Bonds Risk in the Long Run Posted: 24 Feb 2018 11:45 AM PST While the article doesn't mention FI specifically, I think it's relevant to this subreddit since the users here invest for long time horizons and come up with asset allocations on the assumptions of buying, holding for many years, and only selling for retirement income. I was wondering what people think of Warren Buffett's take on stock vs bond long-term risk. [link] [comments]  |
| Index Fund Expense Ratios: Fidelity vs Vanguard Posted: 24 Feb 2018 12:56 PM PST I noticed during a recent-ish comparison, Fidelity claims to beat expense ratios for comparable Vanguard offerings, and wanted to get this community's take on whether this influences the recommendation I see here frequently (a preference towards Vanguard). Do other considerations steer you towards one or the other? Reference: Fidelity vs Vanguard Index Fund Expense Ratio Comparison [link] [comments]  |
| Daily FI discussion thread - February 24, 2018 Posted: 24 Feb 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]  |
| Posted: 24 Feb 2018 07:16 AM PST I'll preface this question with I'm single, M/26, renting, 401k, and I have ~ 2600 in disposable income after 401k, savings, bills. Its a little bit more, but I'm just being a bit conservative for purpose of this question. I I drive a 2013 Honda civic that runs beautifully, great shape, no car payment. It only needs routine maintenance (knock on wood). I don't mind driving it, however, there's a big problem with the car fitting into my lifestyle. I do a lot of mountain driving, which leads to camping, snowboarding, hiking, etc. Obviously my car can't access the roads I want to get to, and I can't transport a lot of gear and people in it. On top of that it's not a 4WD/AWD, so winter driving is garbage and at times can be unsafe, although I keep chains for extra protection. I also pretty much only use my car for leisure because I bike to work every day. Given this information, am I in a position to consider a used truck or suv? Will I really set myself back from total FI by doing so? If so, any recommendations? [link] [comments]  |
| 39M/Married/2 Kids - How Are We Doing? Posted: 24 Feb 2018 11:51 AM PST Hi, long time lurker and fan of the brilliant minds in this community. I have learned so much from you all. My wife and I are feeling like we're on track for our goals, but would love any honest feedback you can provide. We bought a house in a pretty expensive community for our region in the midwest two years ago, which is probably our most extravagant purchase ever. But the school system and family first community is worth every dollar. My goal is to retire in 5-10 yrs if possible. My wife currently his happy in her career and plans to go until it isn't fun. My career in marketing has burned me out over 20 years so very much looking forward to trying something else after FI. Here is where we're currently at for numbers: 39M/Married/2 kids (2yrs/4yrs) - I want to achieve FI/RE before turning 50. Cash: -$50,000 - emergency fund -$10k - checking Debt: -$358,500 @ 3.5% 30yr fixed mortgage on $405K purchase price. 28 years left. -CC bills are $5k per month always paid in full -No other debt Investments - Total $950k: -401K $590k (we max contributions every year) -IRA $100,000 -Roth IRA $200k -Taxable $46k -529 $20k Ratio across all investment accounts: [Mostly ETF [INTL Bonds 6%, US Bonds 18%, INTL Stocks 14%, US Stocks 49%, Alternatives 13%] Income: Me - $105k/yr with $2500 Company 401k contribution Wife - $88k with $5000 company 401k contribution and 2% profit sharing $2000ish Property: $405k house. Zillow has us estimated at $475k due to hot market over the past few years. Monthly Expenses: $7K-$8K [High property taxes $10k/yr so mortgage is $2500/mo. Also child care is $2k/mo for two more years] Savings rate: 30-35% - Between 401k, Roth IRA, and Company match we put in $55k to your retirement per year. Not sure if I should factor in dividends from the investment accounts here. Everything else we're spending right now due to child care bills, but we have a pretty comfortable monthly budget. GOAL: So I figure my number is around $2.5 Million to get to the SWR of 4%. I just wanted to see if you could gut check it for us, and if I wanted to get there in the next 5-8 years do you think that's possible? We are pretty happy with our current budget, location, and hobbies so feel like ER will be similar in budget. Thanks for any feedback! [link] [comments]  |
| Does anyone here leverage their long-term investments? Posted: 23 Feb 2018 11:34 PM PST I know why leveraging short-term and volatile investments is a really bad idea. I'm having a bit more trouble talking myself out of leveraging long-term investments. It seems to make a lot of sense given otherwise sensible money management practices. For reference, the return-on-equity calculation is [return - (bank's percentage)*(loan interest)]/(your percentage). Most real estate investors are doing this. A lot of us are doing something similar by paying the minimum on our mortgage while investing in index funds, because it's more efficient to invest in an average 10% nominal/7% real return than the 3-5% nominal return from paying off the house, and we expect to be in the market long enough to get reasonably close to the average. Obviously margin investing is a bad idea if you were putting it all into Kodak 20 years ago, but that's what index funds are for, right? Markets lost 30% in 2008 - you'd have been out 60% of initial investment and still have to pay interest on the full borrowed amount, but if you have to sell at a low to cover costs you're probably doing it wrong anyway. In the longer run, a down year or two only costs the interest payments and the upside scales very high very fast. Depending on interest rates offered, of course. If we're investing instead of paying the mortgage down faster, why wouldn't we take a HELOC and invest the difference? (Or qualify for a HELOC, wait, and buy a dip with it?) It's hardly any more risky than not paying off the mortgage with our extra savings? [link] [comments]  |
| 37/M writer / programmer considering relocation to Mexico City. Poke holes in my strategy. Posted: 24 Feb 2018 03:05 PM PST My wife and I live in the U.S. (East Coast) but we're considering moving to Mexico City. I've been a programmer for my entire career, but I don't see that path leading anywhere (ageism, stagnant salaries) unless I can get a management position, and I certainly don't see the U.S. as full of opportunity right now: salaries are high, but so are costs, and the work culture is brutal and hyper-political due both to the country's economic stagnation and our industry's reliance on a small number of California oligarchs (VCs). Stats: Net worth: around zero. Lots of career mistakes along the way. Lost about $250k on a failed business. Spousal income: $6k/month before taxes. She works remotely and wouldn't lose her job in an international move. Own earning potential: $12-15k/month pre-tax, but I tend to get discriminated against (read: fired) due to my disability, which open-plan offices aggravate. (In fact, I'm negotiating a settlement right now.) Said disability also makes job searches take 3x as long as they would for non-affected people. Both my wife and I stand (in theory) to inherit ~1-2M each, but I'm treating both inheritances (each for different reasons) as if they may not exist. (My father may remarry; my wife's family money is tied up in a business in an unstable area.) So, let's assume there is no family money. Goals: (1) to publish my first novel by summer 2019. (Hence, I avoid the 60+ hour Amazon/Goldman type jobs.) This'll cost about $15-20k, because I plan on self-publishing. (Traditional publishing is a terrible deal in the long term, unless you get a massive advance and a guaranteed NYT review.) (2) to escape "regular" US work culture: the constant backstabbing, the 2-week PTO allotments, the devastating mediocrity except on a few teams in a few companies that only hire PhDs from MIT. (3) either to own a business or be independent (e.g. consulting, freelance writing) as soon as possible. I wouldn't mind setting up a software shop, and I enjoy hobbyist coding, but I think I'm done writing code for a living. Fuck Jira. (4) To have 2 years of living expenses saved up by 2023 and continue to save 40+ percent of income from that point forward. (5) To be financially independent within 10-15 years (2028-33) so I can go all-in on my writing. (6) To be able to have at least one child and get her into the best local schools, and then an East Coast prep by age 14. We're undecided on the kid question, but I'd like to have the option. Two strategies come to mind. A: try out for an executive job (again, software) in CDMX (or another low-COL city). I'd be willing to take a 30-50% pay cut if the job comes with executive status and opportunities. (US programmers are highly paid but treated like garbage; it's weird and I could go on for hours about it). I have no idea whether this is possible, but one of my friends in Latin America says that US programming/managerial experience is worth its weight in gold in much of the world. B: The riskier path would be to move and live off my wife's income, start freelancing and writing immediately, and hope that one exponential growth curve or another takes off. I think I could probably set up a (software) consulting shop: I know how to find smart people, and I'd pay above the local standard. Finding clients (presumably in the US) would be unpleasant, but at least I wouldn't be sweating my own personal burn rate. Is this a good strategy? The way I see it, the U.S. is the best country in the world to be a (middle-class or higher) employee. Even though workers have no rights here and healthcare is expensive, I don't think there's any other country where a "regular" programmer breaks $100k/year. However, the security is also false (ageism) and the opportunities are a bit sparse for people who want to be more, and so I think it might be a good time to move elsewhere. The fact that everything seems to be getting worse in the US (not just Trump– I view that as a blip– but working conditions across the board) seems to support that view. [link] [comments]  |
| Does this sub generally favor investing in real estate or a fast-food franchise later in life? Posted: 24 Feb 2018 12:58 PM PST I'm an 18-year old college freshman who's nowhere near having to be responsible for my own finances. However, that hasn't stopped me from already thinking about them. My long-term life goal is to save & invest in order to accumulate enough capital to either buy rental properties or get into fast-food franchising (maybe both if I'm fortunate enough) and retire early. Which of these two routes would this sub generally encourage in order to maximize my yields and have the best shot at achieving FIRE? [link] [comments]  |
| Justify saving now to live better later... Posted: 24 Feb 2018 06:37 AM PST I'm 34, good job paying just at 100k, bonus, great benefits. I have about 300k between retirement accts (IRA and 401k) and more liquid assets mostly cash. Own our home and one of our two cars and live in a very low cost of living area in the Midwest. Trying to figure out how everyone rationalizes living so frugally now to save for later. Both my parents died before retirement, mom at 59 and dad at 64. I look at my own life and am not sure it make sense to put off enjoying life/wealth knowing I could keel over and die before I get a chance to enjoy it. For the RE folks, what is everyone's target age and when did you start? Did you ever feel like you were missing out on enjoying life/wealth while you were in savings mode? [link] [comments]  |
| Low income as a grad student, convert Trad IRA to Roth? Posted: 24 Feb 2018 10:01 AM PST My husband and I are both currently PhD students, and as such our income is quite low (around $48k per year). In 2017 we harvested a significant portion of our long term capital gains, and I'm wondering what (if anything) we should do this year to take advantage of the low income. I have a smallish Trad IRA while the rest is in Roth. We do currently live in a high income tax state, but this is likely to be the case in the future as well. If I understand correctly, if our income is ever sufficiently high to do backdoor Roth, I wont want this Trad IRA. We will finish our PhDs in 3 years at which point my husband will likely need to take a post doc, earning around $40k (yay science PhDs!) while in my field one can typically find a job immediately after finishing the degree. I estimate I'll be earning around $80k to start. Hopefully, after a few years at the post doc my husband will be able to find a position earning a similar salary. We are hoping to FIRE 15-20 years after we start working. Current financial assets are as follows: After harvesting capital gains in 2017, about $10k of the taxable account is LTGs. So what's the best move for 2018? Thank you in advance for any advice! [link] [comments]  |
| Posted: 24 Feb 2018 03:50 AM PST Hi followers of FI, I live in Poland but I think suggestions from this subreddit apply also to the financial situation in my country. Some background of my situation: I am 26, a teacher with a stable job (35k) plus a tuition side job of 15k per year. I am debt free + I have a fully funded emergency fund of 15k (6+ months of expenses). We have a social security plan for retirement but I do have an option to open a private retirement account (like 401k and Roth in the US). Thanks to my family I have money to build my own house without taking any mortgage. What should my next steps be? From September this year, I am going to contribute 500 monthly to my private retirement plan which I plan to open in August. I will have 725 free money each month in my budget after the contribution. I do not know what to do with it. My goal is to achieve FI, not RE. [link] [comments]  |
| I can make money on video games (idk if this is the right reddit for this) Posted: 24 Feb 2018 09:31 AM PST I'm 19, half a year ago I finished high school. Since then I been struggling a lot with anxiety/depression so I don't blame myself that I didn't do this. I live with my parents, they pay for everything still. But this is about to end once I start my part time job I think. Anyway! I play a game called World of Warcraft it cost 12,5 euro each month. However I'm a top player in this game and can sell "carries" i could have easily made 100-200 euro each week if I tried. But I didn't, now I'm about to start my first job soon and it's like a part time job. Tbh I could make 30-60 euro a day but it's a bit of a gamble cause it all depends on how many that wanna buy each day. So the "100-200 euros a week" isn't exactly accurate! That's just a minimum. I went for a walk today and calculated how much money I woulda made and it ended up being ~4,8k euros. But then the "game time" to play the game woulda cost 75 euro total for 6 months. So I woulda had so "much" money. I kinda feel like it's a chance I just missed, but I feel like it's not to late. Once I start my new job I gonna work 4-6h a day so I will still have a lot of free time. So if I got the rest of the day I could actually start doing this again. (Maybe I would need some free time doe, due to my mental illness). I would just want ur guys thoughts on this. Thanks In advance! EDIT: I live in Sweden, so idk if I would have to pay taxes or not for doing this. [link] [comments]  |
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