Financial Independence FIRE - Quite possibly the greatest thing in the world to fail at. |
- FIRE - Quite possibly the greatest thing in the world to fail at.
- What FIRE means to me.
- Income from Mineral Rights: How do you factor this in?
- Daily FI discussion thread - February 04, 2018
- Does anyone have a Single Family Office (SFO)?
- People over 30 with below a $50,000 net worth, tell us your story and what your plans are for the future.
- Buying vs Renting in NYC: Is it possible?
- Stop contributions to brokerage account 1 year before retirement?
- 401kid
- What are some solid accreditations that a non-tech engineer can get hasten their path to FI?
- Concerns about rebalancing
- Financial Independence Spreadsheet (link), My Situation, Advice?
- Should I slow down my 403(b) contributions as I save for a house?
- I lost control of my expenses and thus my time. First steps to being free of the corporate life and get my time back!
- What is the best degree to follow in university for long-term?
- Leaving job what to do with 401k...possibly time to think about back door Roth?
- Anyone tolerate sexual or emotional harassment to gain financial independence?
- FireCalc 30+ years
- Sold Off House
- How do bonds benefit me in a target date retirement fund? Is it better to invest in separate indexes for stocks and bonds?
- Redistributing my net worth
- DCA and Tax Loss Harvesting
- Rainy day & emergency funds
| FIRE - Quite possibly the greatest thing in the world to fail at. Posted: 04 Feb 2018 08:54 AM PST While the hardcore Mr. Money Mustache Machine will tell me to go stuff it and point out how this community was better off before it went mainstream, I feel like far too many people following this FIRE business are missing the real point. You see far too many people battered and weary saying shit like, "I've tried so hard but I failed...I'll never FIRE on my salary. I give up." Acting as if their 1, 2 or 3 years of struggle was all for naught. Losing sight of the glaring truth that their entire future was massively improved due to their efforts. Even if they can out on truly aspiring for FIRE. Whether they paid down 1/2 of their student loans (or all of it), were able to get the down payment for a house together, raised capital to start a business or simply started a nest egg where there once was none....the lasting effects of even a short period of extreme saving are still there...you may not retire early but just 1-2 years of living well below your means makes a huge difference moving forward. Not to mention the fact that living a short-term bare bones existence leads to a number of passive benefits:
Personally, I am attracted to this community not because I dream of FIRE but because I love the concept of using frugality and living below your means as a tool for purchasing freedom. I prefer to purchase mine a little at a time, taking extended time off every year (mostly to travel) and putting myself in a position to be able to choose to earn less if I want to - but I really don't care if I have to work more or less until I die. But we lived a very similar to FIRE mentality for about 5 years to save up for our dream business and to get it off the ground...and despite the fact that it's now been nearly 5 more years since we stopped actively tracking spending/savings and all that stuff, we spend a fraction of what we used to back in the day simply because living insanely below our means for so long illuminated where money was being wasted and where money spent was worth every fucking penny. So if you're down on yourself for having thrown in the towel following a period of yearning for FIRE....don't be. You likely changed the trajectory of your life forever without truly appreciating it. [link] [comments]  |
| Posted: 04 Feb 2018 09:57 AM PST I think FIRE means something different to everyone. For me FIRE has nothing to do with working insane hours and/or living on prison rations with 4 room mates to reach a 95% savings rate and retire as early as possible. Instead I'm much more focused on the journey and what a post-job life might look like. At this point in my life FIRE means: 1. Stress reduction I work in IT which is a very rapidly moving field where your skills become obsolete quickly. I make a good wage (>100k in HCOL) but I've definitely hit some stumbles in my career where I'd felt like I'd fucked up by not staying current enough to maintain that salary and had some very long months of unemployment and been stuck in a shitty job I hated (fortunately I'm at a job now I actually like). Right now I'm around $750k in assets (0 crypto). While this isn't enough for FIRE I know that even a basic low wage/low stress job will be enough to pay the bills while my assets grow so I'm OK. I'm not using this as an excuse to be complacent, I just finished getting my bachelors degree last year at the age of 41, I'm simply not tying myself into knots stressing about what the future holds. 2. Soul Searching For so many of us our lives our defined by our career. If that is no longer my defining characteristic then what is? Who do I want to be. How do I want to live? Where do I want to live? Would I be happy living in a quiet beach community? What about some random LCOL city in the midwest? What about another country? How much would my interests change if I suddenly had much more free time? Would I suddenly care about going to museums and art galleries? I'm still about 10 years off from FIRE which in a way is a good thing because I have a lot of questions to answer! 3. Hobbies Right now between work, a long commute, a wife and three kids I don't have a ton of spare time. In 10 years the kids will all be gone, the job requirement will be gone, I'll have all the time in the world. So what the heck am I going to do? I've dabbled in a lot of stuff but I've never had a hobby I've really stuck to. It's easy to dream of retirement and tell yourself you're going to write a book but if you've gone your whole life never writing anything that's probably not actually going to happen. So I'm getting started now on the stuff I want to do. A big thing for me personally is that I want to create. I've started writing down some book ideas and fleshing them out. Nothing huge so far but even 4-5 pages of plot outline is a start. I'm also working on making a simple video game, which has a pretty huge learning curve. These hobbies cost me nothing and even just the baby steps I've taken I've found very fulfilling. Heck maybe they'll even generate a little money some day. [link] [comments]  |
| Income from Mineral Rights: How do you factor this in? Posted: 04 Feb 2018 06:07 AM PST My mother in law passed away in 2016 and her estate has been in the process of settling since then. While my wife has been collecting some income from rights that she inherited when her dad died years ago (~$20k per year in recent years) we tallied everything up last week and found that with the addition of the new rights my wife received $96k in 2017. Seeing that number just gave me pause. We (me:36, wife 40)have other assets ($1.2M in taxable accounts, another $100k in tax-deferred). We both work (me: $60k/year, wife: $40k/year). While we are not yet set for FIRE, we've been coasting a bit with a pretty low savings rate (~10%). But then I see that mineral rights number and I start to think, geeze, maybe I can dial things back a bit more and take some low paying jobs that I find interesting. Then the worrying part of my brain kicks in and says "This income is going to fluctuate wildly based on oil prices and production. Don't pin your retirement plans on West Texas Shale!" Anyone here have this as part of their financial life? How do you factor it into your projections given the variability of the price of oil and well production? [link] [comments]  |
| Daily FI discussion thread - February 04, 2018 Posted: 04 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]  |
| Does anyone have a Single Family Office (SFO)? Posted: 04 Feb 2018 07:08 AM PST Hello. I'm wondering if anyone either has or has worked with a Single Family Office (SFO). I'm looking into setting one up and feeling a little lost. I have a wonderful attorney and tax guy, however neither are familiar with SFOs. All of this came about when my management group suggested I think about/consider a SFO... So here I am. I'll speak more with them about this in the coming months however I'd like to know a little about it. What type of attorney would be good with something like this? What are the typical structures that are used? (trust, traditional fund?) How are things accounted for? (personal, business and trust assets) This has been a fairly frustrating process. Similar to shopping for a car. Everyone we speak with is interested and tries to sell us on their services. I don't want to change managers, I want to set up my own management firm and hire managers directly. Thanks. [link] [comments]  |
| Posted: 03 Feb 2018 05:30 PM PST |
| Buying vs Renting in NYC: Is it possible? Posted: 04 Feb 2018 07:12 AM PST My wife and I were crusing along to our FI goals, having recently passed the $250k mark in Betterment (much more if you factor in a condo I own in a hot area). But now we have a little one on the way and, as we evaluate rental costs in NYC that could add up to $36-60k a year, I have to reconsider buying even though we will probably want to move from the city in 2-3 years. Conventional wisdom states that you're supposed to use some tipping point math to make this decision, but does that tell the whole story? I understand that there are financial incentives for moving into less desirable neighborhoods offered by the city, there is the potential to do a renovation/flip, etc. This may be more work than its worth, but I just wanted to ping the group to see if anyone here has any experience or recommendations for this sort of thing so we can evaluate this decision over the next few months. [link] [comments]  |
| Stop contributions to brokerage account 1 year before retirement? Posted: 04 Feb 2018 10:16 AM PST Thinking it might make more sense to keep those contributions in cash to be used for living expenses instead of withdrawing from my brokerage account in my first year of retirement. Thoughts? [link] [comments]  |
| Posted: 04 Feb 2018 02:18 PM PST My daughter is still in high school and will be getting her first job soon. I offered to match whatever amount she puts away for her future at 100%. I said she needs to save this for her future though, not to save up for a trip or clothes, etc. I was really thinking it would be for her eventual (early) retirement but she asked if she could put it toward college costs and I said yes. What type of account would be best for her to open to minimize her tax burden now and when she takes the money out for school? [link] [comments]  |
| What are some solid accreditations that a non-tech engineer can get hasten their path to FI? Posted: 04 Feb 2018 06:02 AM PST 25 y/o male in civil/marine engineering writing my PMP exam next month and wrapping up my Masters of Applied science. I have heard rumors that an MBA is not as prized as it once was and is no longer worth the investment. I am asking the question here because the feedback I have gotten is that over 40 years, an MBA will pay me back....but we dont plan on working until we're 65....Do any of you fine folk know of non-tech accrediation people are looking for / stick out on a resume? Currently, I do not have any programming knowledge. [link] [comments]  |
| Posted: 04 Feb 2018 08:49 AM PST TL;DR: Gross income is around 211k. Pre tax accounts = roughly about 38k. Net take home about 140k. Budget is 20k. Plan to invest 114.5k in taxable accounts + 37k retirement accounts +5.5k backdoor roth .I plan to use 3 fund portfolio. Rebalance annually when there is a correction ideally. How do I rebalance between my taxable, roth, and 401k accounts? Am I doing something wrong?
long version:
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Yes. Double job. 114,400 and 96,600 (base pay - no holiday,overtime, etc)
Accumulate as much wealth as possible before 50. I do not plan to retire at 50, however. I simply want to live the FIRE/moustachian lifestyle and apply it all the way till retirement age. At age 50, I will still work but I would like to travel the world and inspire the youth to be more financially responsible maybe write a book.
I need to know it's 100% safe but willing to see it all plummet -90% as long as I know that it will be higher at the end (65y/o)
I am an only child and currently live with my parents. My parents do not mind me living there. I plan to live with my parents for the next 5-6 years or until I have million in index funds. As far as assets, I will most likely inherit my parents house, remaining retirement accounts, cars, etc. Ballpark around 1mil. I also have a girlfriend who makes similar amount as me. We are both very immaterialistic (Not sure if that's a word?) and simply enjoy the beauty of life (Sitting in the back yard, sipping wine while listening to music and enjoying the view)
I have an emergency fund for 3 months and will most likely not need any real money for the next 10 years.
Only my student loan which is around 20k at 4% interest rate. I've already paid off my high interest student loan.
Here is my question. My work offers me two separate 403b plans so i can contribute a total of $37,000 tax deferred (This is not two 403b from two different companies) I'm only using one company as that one company has the second/different pre tax fund - has to do with something about being federal. I will try to utilize the back door IRA next year as I started working around July 2017. Theoretically, my gross income is around 211,000. After pre tax deductions, taxable income is around 174,000. I only put around 1,000 in our FSA (I think this is like HSA?). So my effective taxaxable income prior to standard deduction is 173,000. I think my effective tax rate is 15.9% and my marginal tax rate is 32.0% with the standard deduction of 12,000. leaving me with 140,000 net income. I budget around 20,000 expenditures every year leaving me with 120,000 to invest in taxable accounts +the 37k from 401k pre taxed accounts. From what I understand, you want your bonds in the 401k and total market in roth iras/taxable accounts. How would I rebalance if most of my bonds are in 401k? Are we allowed to move it from 401k to taxable accounts or will that action be considered withdrawing from your retirement account and thus would incur a penalty. Am I doing something wrong? I'm not very entrepreneur savvy so I can only do index funds. I plan to buy maybe 1-3 properties to rent out and simply leverage out the loans. Is there anything else I can do? Thank you PS: Can't quite crack the formatting code as you can see. I do apologize; but I think it's decent enough to get the point across.
Also, I'm not sure If I'm supposed to be posting this topic here, but I figured my goal is technically FIRE, however, i just want to travel the world while inspiring people / writing a book when i reach 50. Not necessarily retire in the traditional sense, but simply being financially independent. [link] [comments]  |
| Financial Independence Spreadsheet (link), My Situation, Advice? Posted: 04 Feb 2018 01:39 PM PST This is a long post, but I figured I would post my situation and a decision I am trying to make along with a spreadsheet I made to track financial independence. See link below. You should be able to copy and paste into another Google Spreadsheet to use with your own numbers. https://docs.google.com/spreadsheets/d/1yW5uegKTvfssA1Abzyuloe7GtdCZAuKY-LkcaBAvmO0/edit?usp=sharing Premise: My goal is to reach financial Independence quickly through smart investments generally in real estate. Financial Independence for me is defined as having enough net worth to afford my current expenses plus 3% expense growth per year (including inflation) with a 3.75% withdrawal rate. Above is a link to a spreadsheet (numbers are jumbled and not my own finances) I made to track life finances and a path towards financial independence. I am somewhat obsessed with financial independence and more specifically doing so with real estate mainly because of the advantages of leverage early in life (I'm under 30). I have a relatively high paying W2 engineering job, and I lean towards an investment path that is not extremely time consuming at least for now even if that means slightly less returns. I like my job and I like the idea of keeping my W2 job for awhile as I get started with investments in a low maintenance way to diversify my income and gain leverage. Many years from now I would like to have the option to live off of my investments, be a full time investor, or otherwise be able to take more risk in my career knowing that I have some passive income to support me. I also think a W2 job can provide valuable experience and skills that will benefit me down the road post W2. I am interested in real estate, but I ultimately want to invest with whatever has the best risk and tax adjusted returns. I would prefer investments that can get me to FI much earlier than norm, but I also plan on living past 55 so I don't see how the money in accounts like 401Ks is much different on a path towards financial independence. If I were to accumulate enough in a 401K to retire after age 55 I would no longer have to save for retirement and I could therefore spend or invest what I would otherwise be saving for retirement. I want to invest in whatever will have the highest risk and tax adjusted returns even if it means that it will mean I will not have access to the funds for many years. Net worth is my biggest focus. So far I have purchased one townhome in a trendy part of my city that I am "house hacking" by renting out 2 of the rooms to friends. This situation has worked out very well financially and otherwise so far despite a few major repair expenses. I plan on keeping this house long term as a rental after I eventually move. I think it would have decent cash flow if I were to rent it today. Now I am looking for my next step along the path toward financial independence. I have accumulated quite a bit of cash and now over a third of my net worth is cash, which makes me uncomfortable.... Seeking Advice: I am weighing two options for using this cash. The first is to use most of my cash to pay down my mortgage from the original 5% down to 20% to remove PMI. I did the math and because my house appraised higher than the purchase price the return on paying down my mortgage to remove PMI would be a 13% return annually. And I guess that means that despite having a low interest rate on the mortgage I am essentially paying credit card type interest rates on that portion of the mortgage due to PMI. The main reason I don't like this option is that I am removing leverage, which I wanted while I'm young. The other option is to invest the cash in another real estate purchase. I have read many RE blogs, books and other sources including looking into out of state investing and turnkey investing options like HomeUnion or RoofStock, but I've decided that the best option for my second purchase would be a local investment hopefully in an B+/A- area with either a great location walking distance from attractions and prime for low maintenance young professional tenants or in an area with great schools (right next to where I work). It would be much easier to get into the next investment by using all or most of this cash reserve, but I think I could still get a home up to $150k with cash that will be left over after paying down the mortgage on home 1. $150k does not look like it will cut it for the type of investment I am looking for…. I suppose I could invest this cash in the stock market or something else with high risk/returns (currently have just 1% net worth in crypto), but I generally feel that the nearly all markets (stocks, bonds, EM, etc.) are too high and overvalued. I am probably biased in this view because I have been in cash for so long. I just have my 401K in the market and I plan on never touching my 401K portfolio other than re-balancing and portfolio adjustments based on age. Along my real estate investment search I looked into some programs online that can help find cash flowing homes like Mashadvisor, but I decided that I would be more comfortable doing the analysis myself. I built a dashboard map that allows me to throw in assumptions (occupancy, maintenance costs, taxes, etc.) and then see prospective returns on a map using MLS listings and Zillow rental data (I average Zillow rent estimates by zip code with Zillow rent estimates by square footage by zip code). Using my financial independence spreadsheet I have decided that it's not worth investing unless the cash on cash return (not factoring appreciation) is over 7% and by using my dashboard I have found that it is very difficult to hit 7% COC….. And I think that I'm in a better market than most in Texas. Given that this return seems difficult to achieve right now and the market may be on the higher side maybe it is worth waiting for opportunities later? Question: So I guess the question is given my situation above what is the best option for using this cash? And what is the best option for using the cash that would be available if I were to go with paying down the mortgage? Spreadsheet Assumptions: I tailored this spreadsheet based on my own situation, but I think it can be manipulated easily for other situations especially for others with W2 jobs. I added the option to add up to 6 real estate investments in 6 consecutive years. Activate a particular real estate situation by adding a 1 instead of a 0 on the On/Off row. For now I assume that the appreciation for any real estate purchases would be 2%/yr. I am believer that over the long term real estate for the most part just increases with inflation (which is plenty after factoring in leverage). 3% may be a better assumption, but given that I believe the market is on the higher side I'd like to stay conservative. I threw the spreadsheet together in one afternoon so there may be some issues. I'd like to eventually tailor the spreadsheet to capture the tax difference of investing in a before tax 401k vs. an after tax Roth, but for now I am just evaluating financial independence based on net worth without factoring in taxes after FI. The values listed in the spreadsheet are not for my finances. I jumbled the numbers. I'd appreciate any feedback on the spreadsheet too. [link] [comments]  |
| Should I slow down my 403(b) contributions as I save for a house? Posted: 04 Feb 2018 08:15 AM PST I am planning on buying an Co-Op this year and want to accelerate my saving rate. Should I slow down my 403(b) contributions to have more money for the down-payment? I can always increase contributions towards the end of the year. [link] [comments]  |
| Posted: 04 Feb 2018 02:54 PM PST I live for experiences, not things. I don't want to drive around in a Mercedes-Benz. I don't want a mega-mansion as my home. I want to experience life. One of my best experiences came while visiting a friend in France. My buddy signed with a French professional hockey team. It was the perfect opportunity to go visit him and see France in a very authentic way. It was an incredible trip. I stayed in a very small town in Southern France that I would have never thought to visit. I got to live like a local for a week and really experience what it meant to live in a small French town. I lived in a small apartment in the heart of the town. I ate unbelievable food. I shopped at the supermarket every day for meals. I watched a couple of great hockey games. I even hiked the French Alps. Since I've returned from that trip all I can think about is when I'll get to travel again. I want to experience more countries and more cultures. Unfortunately, with work finding the time to travel is a challenge. With vacation and personal days, I get 3 weeks off a year. If I want to spend 10 days or so traveling that gives me 5 days left for any sick days, doctor/dentist type visits or random days off. This is not about getting out of a job I dislike. Most days I enjoy my job. I like the people I work with. I have great superiors within the company. There is even good growth opportunity. The problem is the business I am in (like most now a days) is 24/7. My phone is always on and work is always in my pocket. I want more out of life than just work. I want experiences. To have experiences the first thing I need to get back is the most precious commodity. Time. The first step to winning back my time is by becoming financially free. Financial freedom is the purest form of freedom. Financial freedom means you do not have to work another day in your life if you don't want to. It means you have complete control of your time. To become financially free, we need to erase all debt. Debt can be tricky, so winging it while trying to corral your debt and pay it down generally doesn't work out. It is important to come up with a game plan. Here are 3 simple steps to get your finances heading in the right direction. -Start keeping track of what you spend every single day. When you make a purchase write it down or put a note in your phone. I.E. – Today I bought a new cell phone case for $20. Each night before you go to bed put all your notes for the day into a spreadsheet or onto paper and track your spending for 1 month. In just one month you'll see where you spend money that you could be saving. -Compare your total expenses every month with your monthly income. You need to get to a point where you spend less than you make. Control your expenses and control your life! Lose control of your expenses and lose control of your life! When I took a month to really examine my own finances I learned I spend way too much money on food. I'm a single guy and I really don't like to cook. I especially do not like cleaning after I cook. The lack of cooking causes me to eat out for almost every meal. I spend roughly $450.00 in food per month. That is way too excessive. If I buy groceries every Sunday for the upcoming week and prepare meals the night before for each day I should be able to cut my food costs down to $300.00 a month. That would allow me to pay off an extra $150.00 in credit card debt per month. Let me give you an example of just how big of a difference applying an extra $150 a month to debt can be. First, I'll show you an example with paying down credit card debt and then an example with paying down a mortgage. Credit Card Debt Example: Let's say you have $5,000 in credit card debt. Your credit card charges you an APR (Annual Percentage Rate) of 18.9%. Your minimum payment is $200 per month. If you pay the minimum payment and only the minimum payment you will have your debt paid off in 11 years and 5 months. In that time frame of 11 years and 5 months you will have paid $8,109 to become debt free on your credit card. Now let's look at an example if you added an extra $150 a month to your credit card payment. Your credit card debt would be paid off in 6 years. That is 5 years and 5 months faster than making the minimum payment. Your total amount paid to the credit card company would be $6,420 which means you would save $1,689 in interest. Mortgage Debt Example: If I had a $150,000 mortgage over 30 years fixed at a 4.5% interest rate I'd be looking at $273,609 to have my house paid off in 30 years. That equates to $760.03 per month. If I were to pay an extra $150 a month towards that principle balance of $150,000 I would pay $234,043. That is a savings of $39,566! That's a lot of extra money going to my 401k, my IRA, my savings, my travel fund, kid's college fund, you name it! Not only do I save a ton of money, but I also have my house paid off in 21 years and 6 months as opposed to 30 years. That means in 21 years and 6 months I no longer pay $760.03 + $150 extra for a grand total of $910.03 in savings per month in perpetuity. The one thing you'll notice is to become debt free it takes time. Just like the phrase it takes money to make money, it takes time to make time. The key is to understand that the time we put in is a small investment compared to the time we will get back in the future. It is also important that you are honest with yourself. If you aren't honest with yourself on where you waste and what you can save you will never have true numbers. Without true numbers you will never achieve financial freedom. Be honest with yourself and you can do this! Anyone can! The last thing I will say is do not be afraid. It can be terrifying to open a credit card statement or look at a bank account when you know it isn't going to look the way you want it to. Do. Not. Be. Afraid. There are millions of people in the same position as you or worse. A lot of the people who aren't were in the same position at some point. You can do this. You can get out of debt and get to a point where you are not afraid to look at your credit card or bank statements anymore. You can get to a point where you want to see those statements! Take the time to develop the habits that will make you financially free. Don't you want control of your time? Join me on our journey to mastering our time and becoming financially free. [link] [comments]  |
| What is the best degree to follow in university for long-term? Posted: 04 Feb 2018 06:04 AM PST which college degree will make me earn lots of money and be able life on my own? [link] [comments]  |
| Leaving job what to do with 401k...possibly time to think about back door Roth? Posted: 04 Feb 2018 02:47 PM PST First post here and I am thrilled to have this board as it is truly a asset for great finacial advice. 50yr old who has house paid off, $200k HHI(including wifes salary), approximately $ 1.1M in various retirement accounts and we both max out our company 401k's($43k). With having access to my old 401k do to job change i was thinking to convert a portion to a back door roth. This is where i am confused, would i roll the 401k ($500k)into a tIRA then do the roth conversion on some portion i choose? Is my HHI too high to continue to max out my new company 401k while still doing a roth IRA conversion? I did try to search and see similar circumdtances but came up empty. [link] [comments]  |
| Anyone tolerate sexual or emotional harassment to gain financial independence? Posted: 04 Feb 2018 04:05 AM PST The news is full of stories about women accusing powerful men of sexual and emotional harassment years after the alleged acts occurred. When asked why they put up with the abuse, the women say they had to tolerate it for the sake of their career and financial future. I wonder how common this is. Have you experienced sexual or emotional harassment in the past but put up with it because you thought it was part of paying your dues and in time you would make lots of money and be financially independent? Tell us your stories! [link] [comments]  |
| Posted: 03 Feb 2018 07:30 PM PST Why is 30 years considered the same as forever? There looks like there's a strong difference in chance of success between FireCalc of 30 years and FireCalc of 40 years. [link] [comments]  |
| Posted: 04 Feb 2018 07:30 AM PST Greetings, Was working on FIRE and ran into some life changing circumstances, was looking for some advice. Currently 37 w/ 3 kids under 8. Paid off house this past year which feels amazing. We also lost my wife/kids mom to cancer recently which obviously changes things. I never planned to leave this place, however I am going to move. The new place I found I will have to take a 140k mortgage after I sell my house. I have to step up as I need help when I travel for work so an additional bedroom was needed. Am I crazy for taking another mortgage?! I can't find a cheaper place with the right stuff, I have been looking for months and places where I could would cause me to move my kids out of their school district which I cannot do. Currently putting away: 529 for kids IRA 401k beneficiary IRA Rainy Day savings [link] [comments]  |
| Posted: 03 Feb 2018 06:24 PM PST Hey, all. I've been investing for a few years now, and so far the majority of my money has gone into my 401k in a Vanguard target date fund. I also have several months worth of emergency fund, and some money in a Roth that I'm calling my "extended emergency fund" - also in that target date fund. But lately I've been thinking about the impact of market downturns and job loss. My understanding is that people allocate a portion of their portfolio to bonds in case of market drops. My target date fund currently has 10% bonds in it, and I'm wondering how that benefits me. For the 401k, I wouldn't be withdrawing from that any time soon. I can understand having bonds in retirement since you are withdrawing regularly - but that is at least 20 years off for me. My Roth I could see potentially withdrawing from if I ever hit hard times and ran out of my emergency fund. But, how would bonds in my target date fund be useful? Should I invest differently in my Roth? If I had two separate funds, I could specifically sell the bonds and get (hopefully) a decent value for them, and avoid selling stocks at a huge loss. As a part of my whole fund, they would just make my overall investment lose slightly less money, but I would still be taking a significant loss if I had to pull money out. Correct? I am just trying to understand how bonds could benefit me when I can't sell them specifically. [link] [comments]  |
| Posted: 04 Feb 2018 09:58 AM PST Hello everyone. My net worth is about $37k. Just to clarify, I live in eastern Europe, and here that is "worth" a lot more than it would be in the US. I have no debt and I rent an apartment to live in. My car and property that I will most likely inherit in the future are not counted. I can easily save/invest 30-40% of my monthly income. My retirement plan is also maxed out, however I am not stupid enough to rely on that at all. What bothers me is that about 40% of my net worth is in the form of stock of the company I work in. The rest is in cash deposit and crypto currencies (I have invested a sum I can afford to lose, the turbulent market right now does not bother me at all). Recently the stock of the company I work in has reached an all time high and since then has dipped about 5%. Now I am strongly considering selling all of the stocks I have in it and reinvesting it in other tech companies, maybe even some non tech companies... I am concerned however of whether now is a good time to do this and whether I should reinvest the entire sum. I am inexperienced so news and discussions about potential crisis on the stock market in the near future are bothering me. Any advise is welcome :) [link] [comments]  |
| Posted: 04 Feb 2018 05:37 AM PST Curious to get your thoughts and strategies on Dollar Cost Averaging and Tax Loss Harvesting? e.g., I purchase shares of VTSAX on a bi-weekly basis. However, should the market make a correction, I would have to wait 30 Days to sell my losing shares (higher cost basis), and run the risk of not able to leverage the Tax Loss Harvesting strategy To get around this, do folks simply adjust their DCA strategy to be every 30 Days? [link] [comments]  |
| Posted: 03 Feb 2018 06:01 PM PST Do y'all keep 6 months of total expenses (savings, 401k, IRA contributions included) or just living expenses (mortgage, food, bills) on hand? I have 6 months of total expenses ($60k) and I am starting to feel like that money (the ~20k of Savings expenses) could be better invested instead of just sitting in a savings account waiting. Edited to add: I crunched numbers last night/this morning and, thank you everyone so much for your input I agree with it all, but if I remove the savings portion from my current rainy day fund, I am $4k away from 12 months of living expenses. So, as I am self employed, I am going to "put aside" the remaining 4K and then take half of the total and put it into a relatively easily sold investment. Hopefully, I never need those 6 months, but I'd really rather have them while they grow a little better than 3% and not need them than have them tied up in something I struggle to gain back immediate control of when I need them for a better return. [link] [comments]  |
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