Financial Independence I've seen many people here who are miserable because of FIRE and dream of quitting or running away to another country. I did exactly that. |
- I've seen many people here who are miserable because of FIRE and dream of quitting or running away to another country. I did exactly that.
- Daily FI discussion thread - February 02, 2018
- Building the life you want...
- Asking for a Raise - Need Advice
- 32 and just crossed over $400k.
- Weekly FI Frugal Friday thread - February 02, 2018
- Bought 40k VTSAX in lump sum, second thinking to going 50/50 with VTIAX, how to do
- Investing during a market crash
- What was your biggest daily portfolio swing to paycheck ratio?
- Parents going broke paying for elder care
- Reinvesting Home Equity
- Early retirement calculation with different spending after FIRE
- I’m a novice when it comes to investing and preparing for retirement in general. Looking to start planning for FIRE. Any advice welcome!
- Link between attitude to parenting and FI? Do childless folk crave FI more or less? Does work avoidence extend to parenting too?
| Posted: 02 Feb 2018 06:13 AM PST Before you get all geared up for a fight: I'm not here to tell people to ignore your advice. This subreddit was actually very helpful to me, and this is a small attempt to give back. I've noticed these posts a lot, some on the front page, others in the daily thread. (There's one up now, but this isn't about any specific post and I don't want anyone to feel like I'm calling them out.) Posts like the couple who make $500,000/yr and "feel average". They've always been hard for me to sympathize with, seeing people with 10x the highest salary I've ever had complaining about money. Often in the posts here, the sentiment is "I want to just quit and work for a nonprofit". Move to Thailand. Live in a van. You know the ones. I figure now that I've gone and done some version of that, maybe I can finally have a constructive reply. Like this excellent post, but a bit more generalized. For context on who I am: I didn't pull myself out of homelessness by learning Python, I don't have a book about travel adventures, or a even a touching story about mortality and what it means to be human. I'm just a normal-ass college dropout who hated his job and life, and ran away instead of working harder. Honestly, I don't really have anything concrete to show for the past year other than being happier and more optimistic about my life. But that's gotta count for something, right? BackstoryTo set the scene, when I first found this subreddit, I was working a boring meaningless job where I would go multiple days with nothing to do, including when I asked people if they needed help. I couldn't even watch movies most of the time because too many people walked around my desk. It was like being trapped in Office Space as some mix of Michael and Milton. My work history to that point was basically chase dream -> face reality -> chase dream -> face reality. I've still never had a single job for more than a year and a half. The highest salary I ever had was $50k (for three months!). The "dream" jobs never paid well, and of course were never what I dreamed they would be. I found FIRE and got completely into it. I tend to get obsessive when I'm excited about something, and early retirement is obviously very exciting to a dream chaser like me. Combined with being in a long distance relationship, my life became about FIRE and exercise and not much else. I almost never went out or socialized and I learned a lot about both topics. Shockingly, I wasn't very happy! All I could think about was how long it would be until I reached my number, and how much switching to an all-Soylent diet would reduce the time to FI. (Almost none, don't drink that shit). At some point, I learned that US citizens can get Working Holiday visas that allow them to travel to another country and legally work there for one year. You're eligible for the visa until you're 30, and I was 28 and a half, so it seemed like now-or-never. I chose New Zealand based on zero research and the fact that it was basically the farthest I could go. Did you know Auckland is one of the 20 most expensive cities in the world and has a housing bubble rivaling NYC? I sure didn't! Regardless of my lack of research, I decided to put all that FIRE energy and knowledge into this crazy plan and immediately got excited and happy again. Here's the first big thing about doing this: You have a new exciting project to work towards, and it's a great distraction from whatever you hate about work, so it feels like a great idea. You also get to throw going away parties and tell everyone you talk to that you're moving to New Zealand like you're Fred Armisen in that Portlandia sketch I can't find. Suddenly you're That Guy! You'll love this part. The big day comes, and you take a crazy trip and see Hawaii and spend a week on the beach and it rules, and maybe you'll become a travel blogger or Insta star or something because day jobs are for suckers. I thought about it for a bit and remembered I hate social media and travel blogging is a weird world I have no interest in learning about. But whatever, still on the beach. You get to your new city and find a place to live and you learn that Auckland, as a city, only discovered home insulation about six months ago, and winter is coming. But whatever, it's colder where you're from, and you're going to be too busy having adventures. Although you need a car because public transit is expensive and slow here, and it doesn't go to any of the beaches you want to visit. A month or two goes by and it's time to get a job. You've had some adventures, but not as many as you planned because you spent more time than expected apartment hunting, or finding a car, or figuring out where the hell to buy groceries that wasn't a ripoff. That's fine though, this is all part of the plan. You find a job and it pays less than you expected because not many people here use Glassdoor, and the answers you got on reddit weren't as informative as you thought, or you just asked the wrong questions. Still, it pays enough to cover your expenses and then some. A month in, you realize the job isn't really what they described. Or you constantly get pressured into overtime. Or your boss sucks. Whatever the reason, you hate this job. Maybe you get another one, maybe you talk to people who tell you your situation is actually extremely common here. And then, you finally realize what everyone said was true. Lessons and stuffThe story can end here and I can be like "BEWARE TRAVELER! ALL IS NOT AS IT SEEMS!" Or in reddit parlance, "This won't make you happy, just stick to the 4% rule!". Sadly, there's no one-size-fits-all answer to end the story with. I've seen some cool stuff here, but nothing as awe-inspiring as the Grand Canyon. I have more interesting stories to tell at parties, but I'm not inherently any more interesting as a person. Most of the personal growth I've had since moving here, I could've gotten by just moving to a new apartment in another city back home, and I'd have way more money to show for it. I've been here nearly a year now, and I have about as much money as I had before (on track to retire at 70). I decided to do another visa as I'm 30 now so it's my actual last chance, and Australia is right next door. I'm told the pay is dramatically better there, so I hope to strike a balance between more "adventures" and shoring up my savings to slightly higher than where they were when I left the US. I said I was happy and optimistic now, and I am. I didn't have any book-worthy adventures, and when people say "woah you live in New Zealand!" I tell them it's not really as big a deal as they think. After all, I see more expats than Kiwis most days. But really, there's a lot to be said for taking a huge risk regardless of if it pays off. I went through that cycle of chasing dreams and then getting a day job because it felt like I had to, either because of debt or FIRE aspirations. I never committed to either plan. Moving here wasn't important because it was another country, or because there were adventures to be had, it was just the act of committing fully to a plan without being able to back out. There's a big difference between keeping a job you hate because you feel like quitting would delay FIRE, vs applying for a job you you know you'll hate because you're so committed to FIRE that you decided this sacrifice would be worth it. There's a difference between becoming a programmer because it pays well and becoming a programmer because you love programming. Personally, I'm hoping to find a job I really enjoy, possibly some kind of remote work or starting a business. But I know I'll probably have to go back to a day job I'll hate at some point. This time though, I'll have a clearer reason for doing it, which makes all the difference. The reason I'm still optimistic is because I'm a stubborn idiot who had to get a shitty job in another country to finally internalize all the advice I already knew. Maybe the same is the case for you and you won't be happy until you give it a shot, or maybe just reading this story was enough. I'm not worried about FIRE because there are plenty of stories of people who pulled their shit together much older than me. Before, I was just chasing FIRE to escape my situation... which I was in because I was worried about FIRE. TL;DRI said there was no one-size-fits-all advice, but here are some bullet points in place of a TL;DR because it's 2:30am here and I can't believe how much personal information I wrote, and the writing gets pretty sloppy toward the end and I think I missed the original point I was trying to make when I started? So I feel like I owe you something. EDIT: Answering comments made me realize what I missed - I didn't make it clear that I haven't abandoned FIRE, I'm just putting all the lessons about saving and living below your means toward other goals for a while. I definitely will keep FIRE in mind when I get resettled and have a more permanent job again, but it'll be with a different perspective. Also added headings for /u/Oax_Mike
I couldn't decide if this should be an AMA or a standalone post, so I might as well do both. If you have any questions about my (hopefully coherent) story, or if you hate you're job and you've been thinking about running away, feel free to ask me anything. There may be an 8 hour delay in answers if I finally pass out. [link] [comments]  |
| Daily FI discussion thread - February 02, 2018 Posted: 02 Feb 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]  |
| Posted: 02 Feb 2018 03:29 PM PST I discovered the concept of early retirement right at the beginning of my working life, and sometimes I feel it's ruined my life. There posts here all the time from people agonizing over whether the present unhappiness is worth the future freedom. I've struggled with unhappiness in one form or another since I started working. I graduated almost 4 years ago and started working full time right away. And I don't particularly relish the idea of working for another 10-20 years. Like a dam springing a new leak, every move I made to increase my happiness just turned my focus to something else that made me unhappy. I thought I was working too hard, so I took 2 weeks off. Every time I'm heading to work I'm filled with regret over the things I could be doing instead, so I thought maybe I could take some time off to actually do those things. Sort of a refresher to remind me of what I'm working towards with FIRE. And what did I do? The same bs I do every day after work. Laid around in bed, ate takeout instead of cooking, spent way too much time on the internet and not enough time doing things that fill me with a sense of accomplishment, like working out, or painting. I've come to the realization that even if I was FIRE today, I would be unhappy and unsatisied in life. Because I don't know how to make myself do the things that are hard but rewarding. And if I could do those things, I suspect I would find the road to FIRE less of a slog and more of an adventure? Has anyone else struggled with this? I've heard the motto "build the life you want, then save for it." The saving part is pretty much automated. What can I do now to build the life I want, when it seems like I've never even really lived it? [link] [comments]  |
| Asking for a Raise - Need Advice Posted: 02 Feb 2018 03:09 PM PST I'm planning to ask for a raise next week. I've been working at the company for two years and I've taken on a lot more responsibility, especially since a fellow engineer has been fired and I've taken on his workload. The company is very small and my current payrate is far below median salary, 58,000 (my rate is 17th percentile for those in my field with my experience level). It doesn't reflect the work I do now. From speaking to other employees, the president seems to give raises a cycle late. You take initiative to do more, and you are then paid as you should have been for the job you were previously doing. He also is a very assertive (at times aggressive) negotiator. He tends to surprise you by making a first lowball offer, then holds it sternly with arguments that it is all the company can afford (which no one buys). I want to beat his system and get my pay to reflect my current role, with goals for meeting future roles. My strategy is to get the first offer out to him of a 30% raise and a change in my title to Senior Engineer. I've been arriving early, staying late, and coming in weekends and will argue that this behavior will expand in scope. I'd argue on the grounds that I've taken on the work of a senior engineer on top of my current workload. For now, I've only been keeping things above water while we look for a new engineer. If given the raise, I'll take on the new role in earnest. I want to offer him a calculated risk in this proposal, namely that if I perform as offered it will save him a lot of money while also grooming me to be an even better asset. I want to also offer him an easy exit. If I feel the work is too much, I will sign off on reducing my pay to 64,000 (what I assume his offer will be without this strategy) and we can look for another engineer. Does this sound like a winning strategy? I'm willing to do the extra work, as proving myself capable of this would be great on my resume. [link] [comments]  |
| 32 and just crossed over $400k. Posted: 02 Feb 2018 03:13 PM PST Some backstory. I had 0 savings when I graduated college. My first job out of college ended up paying me about $75k/year. I did it for 5 years but the hours, coworkers (mostly), and the city I lived in I all hated. I was working a lot of night shift in a desk job in finance to monitor Asian and European markets. Never again will I work night shift. The first two years I lived in a terrible apartment that was about 1/3 of what my friends were paying because it was in such bad shape. The neighborhood was fine. I saved probably $15k over two years just because of that. All of my expenses only added up to about $20k/yr and I was bringing home I guess $50k after tax or so. years 3-5 my rent tripled because I moved into a reasonable place and my lifestyle expenses went up but I was still saving about $20k/yr. Lifestyle creep is hard to fight. I honestly don't know what I spend now but it's too much. I love a good weekend trip but I luckily rack up points from work travel and through credit cards that help out. I also try to take one big trip a year while I'm younger with no kids and can. I bought two foreclosures with cash with a friend - 2012 & 2013. They were very cheap and those types of deals can't be repeated today easily. This nets each of us about $8k/year in additional income. I'm 32 now and just crossed over $400k net worth. Let me preface this in that I've gotten very lucky several times in my ten years post college. I understand that. $87k retirement accounts. I put 10k into it in 2009 as well as 2010. That has obviously gone way up from those lows. I had nothing in before 2009. I put in 0 from about mid 2013 to mid 2015. I'm back putting away a good chunk again. $120k cash - some of this will be put to work soon into two side businesses. $25k of it needs to be spend to finish the rehab on my house. $115k value of my 50% of our free and clear rentals (taking into account closing costs if sold). I put in about $63k originally. The market was absolutely puking when we bought them and we put a lot of physical work into them ourselves. Hardest thing I've ever done was buy these houses. Had I just stuck it in the S&P I would have maybe done even better but this is consistent income in a physical asset which I like. $100k equity in current house on a $400k house. I bought a very shitty house in a HCOL area two years ago and have been laboring away and sinking money into it since. It is now beautiful (mostly). This number is conservative. It's 65k in cash equity and the other is appreciation and sweat equity. I easily have 1,500 hours into it. TOTAL $422k Filling in the backstory. Full disclosure - my grandma died and I got $26k inheritance. I used that money to buy rental house #2. I married my wife two years ago and she had $50k in cash. No other assets and no 401k (she has one now). After 5 years at the first job socking money away I had enough. I quit without much plan to fulfill dreams of doing some intense travel that involved living in a tent for several months. That was 6+ months of almost no income. It was the best thing I could have done for myself. The hardest part of doing anything you want to do is getting started and for me that was quitting the stable job to go do some cool shit. The year after was kinda rough. I did freelance work and only made about $9k doing it. I luckily found a house to flip with the same friend who I own the rentals with. That brought in $24k for me. Then I had the rentals so I made about $41k that year. Then I moved many states away. This is the luckiest of getting lucky. I found a job doing something in finance I didn't know existed really. It's fulfilling and I'm learning a ton. In 2015 I was making $70k doing it and had no idea what I was doing and felt overpaid. In 2017 I made $131,500 from this job and next year it could easily be $20k more. It took a couple years to ramp it up but I've found my rhythm in the industry and for my company. I also feel like I've learned so much that I could be useful to a lot of other companies too. I'm not stuck here but want to stay. I made about $20k more from the combination of the rentals plus a commission check from keeping my residential real estate license. This brings 2017 income up 50% from 2016 to $153.5k. I feel very fortunate that I've found something so fruitful that I enjoy in a state I absolutely love. My wife went from making about $30k in 2015 to $65k last year and will be getting a raise next week. It'll probably put her in the 75-80k range for next year. Life is good. Now this brings me to FIRE I guess. It's not so much the RE part but rather a transition to more control and more working for myself. My job currently allows me great flexibility. I'm looking to do what I do for my day job on a much smaller scale on the side with my boss in a sub company to build more income. My house buying partner and I also designed an improvement on an existing product that should be in Amazon in about two months. No idea how that will do but we aren't risking a ton and it's just an exciting thing for me. I've always wanted to manufacture a product. The process has taken more time than I could have imagined starting out. However, I've learned a lot along the way that could be applied to some unknown right now future endeavor. For me FIRE isn't retiring early but branching out to several income streams and having enough FI to call the shots. Also, I want a ski condo if I'm honest. [link] [comments]  |
| Weekly FI Frugal Friday thread - February 02, 2018 Posted: 02 Feb 2018 03:09 AM PST Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! 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]  |
| Bought 40k VTSAX in lump sum, second thinking to going 50/50 with VTIAX, how to do Posted: 02 Feb 2018 02:36 PM PST Hey guys put 40k in VTSAX, and was planning on going with one whole index fund that I plan on putting $1k every two weeks into. Some people have advised instead of all in one basket approach to put 50/50 in VTSAX/VTIAX. Could I exchange and sell to put 20k of my shares into VTIAX . What are the tax implications on this if any. My shares have gone down In value and would I exchange based on cost average per share. Or should I just keep funneling money into one fund VTSAX. I am 28 M pharmacist hoping to retire in 12 years . Thanks guys [link] [comments]  |
| Investing during a market crash Posted: 02 Feb 2018 12:52 AM PST I've heard plenty of evidence about why there's no point timing the market and trying to anticipate a market crash (so this is about something else entirely). My question is: If we have a market crash in the foreseeable future and I continue to put money into investments at a 'discount price', what sort of investments should I be putting my money into? Assuming that the market will recover within a couple of years, would it be a good idea to put my money into a 'growth' investment in order to capture that bounce back? [link] [comments]  |
| What was your biggest daily portfolio swing to paycheck ratio? Posted: 02 Feb 2018 07:32 AM PST I once had a $5500 gain on my portfolio from start of day to end of day. My bi weekly pay is $1550 So my ratio is: 5500/1550 = 3.5 Edit: or also 5500/155 = 35x* *My biggest daily portfolio swing was 35x my daily pay. Sometimes it feels weird being at work when a good day at the market is almost a month's worth of pay. [link] [comments]  |
| Parents going broke paying for elder care Posted: 01 Feb 2018 06:24 PM PST My grandmother just turned 100, and is very healthy aside from the fact that she can't really walk anymore. Her only asset is her home, which is worth $1.2m. The house is currently in a revocable trust, with my father as the trustee. He and his sister are beneficiaries. The issue is that she needs home care aides 24/7 to help her with cooking, cleaning, daily hygiene, etc. We found a private person, not through an agency, but it still costs $20/hr, which is over $14k per month. We need to access the equity in the home, but no bank will extend us a line of credit b/c of the trust. Is there anything we can do? My parents and aunt have been cash flowing this for a few months but have almost depleted their savings account. They will have to start tapping their own retirement accounts and home equity, which they are hesitant to do. My grandmother worked her entire life to save this inheritance for her children, but now we might blow through the whole thing in a couple of years. Does anyone have any suggestions? Location is MA. [link] [comments]  |
| Posted: 01 Feb 2018 08:00 PM PST Hi all First time poster. I realize opinions will be all over the place but that is kind of what I'm looking for. I'm in a HCOL area and my home has gone from 700 to 1.2M in a short period. So I have about 700 to 800k in equity there. While this is awesome it also means my net worth is substantially made up of home equity. I can feel the rich dad poor Dad people saying I should take it all out and buy like 10 condos in Michigan with mega leverage or something, and the opposite end of the spectrum is saying it's a bubble and don't tap temporary equity. Call other assets 1M or so, what would you do? I've debated taking out enough mortgage to get the tax deduction which is kind of the middle of aggressive and conservative. I could afford the extra payments so the question is how do people feel about a 2.8 percent loan. [link] [comments]  |
| Early retirement calculation with different spending after FIRE Posted: 02 Feb 2018 06:51 AM PST Networthify's early retirement calculator is helpful, but it assumes a consistent level of spending over your entire life, before and after your retirement date. I'm interested in seeing how results are affected by spending less before retirement but more after (or vice versa). How can I go about calculating this? [link] [comments]  |
| Posted: 02 Feb 2018 04:58 AM PST Situation: I graduated college May 2017, I'm 24, and started working full time in July 2017. My current income is $54,000. I don't have many many expenses I spend between $150-200 a month on groceries, rent/utilities comes out to ~$650, car insurance is $87. And that's really it. So living expenses per month come out to about $937 at the most. Other than money spent for living I'll eat out once or twice a week, usually meals that are no more than $10. So if we tack on eating out twice a week I'm at about $1017. Of course I buy games, go out occasionally with friends but the total from this rarely exceeds $150-$200. Minimum each month I have $1200 left over form my paychecks that I simply put into savings. I'm already investing into my 401k (company matches up to 8%, which I am doing) but aside from this I'm not investing into anything. Mostly because I'm not sure what to invest in or even where to start. Between money I've saved from working throughout college, and working the past six months I have around $15,000. There is a very good possibility a $70,000 income will start contributing to this in about a year and a half. So account for that too if you would like. What I want: I want to work until I'm about 50 but would like to have the option of retiring around the age of 40. I know this may not be totally reasonable since I'm starting a little late in the game compared others, but it's a goal none the less. What can y'all do for me: any advice really! Ideally where I should start. I work in IT, finances/investing are a little daunting to me. So I can use all the help y'all can give me. And of course if I've missed anything crucial let me know, I'll respond with additional information as well as edit my post to contain it. TL;DR: novice needs advice on preparing for FIRE. PS: I have no student loans. Edit: the 70k income I mentioned will be on top of my current income. [link] [comments]  |
| Posted: 02 Feb 2018 09:23 AM PST I'm a bit of a fence sitter when it comes to having kids, and I've been noticing quite a polorised view on here from childfree folk and parents. I've noticed a similar kind of divide in FI circles about jobs. Some people rave about work and careers, parents talk about paying their entire salary in childcare cos they love their jobs and wouldn't give them up. Then we also see those who hate work so much they are willing to spend much less than they might prefer on expenses to avoid having to do that job. And I wonder if their is an predictive metrics here. Are people who crave FI and hate their jobs, less likely to enjoy being parents? Parenting is a very binary choice, but some make out FI to be binary too. You either spend lots and retire late or spend little and retire earlier. There is less often a preference for the middle ground where perhaps you take a job you like more, and work in that job for longer? What I'm trying to ask, is whether avoiding work extends to the labour of childcare too? [link] [comments]  |
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