Financial Independence Just realized I have a positive net worth. |
- Just realized I have a positive net worth.
- Daily FI discussion thread - February 06, 2018
- A question I've been pondering for a while is now relevant: should SWR be based on your net worth "high water mark" or your net worth on the day you FIRE?
- Go back in time and think of the financial advice you wish you got before you got married.
- Is past market performance really an indicator for the future?
- Projecting your FIRE number?
- Is my plan to freedom feasible or out of the question?
- New here— not starting in a great place but I’m committing to the direction.
- What do the swings in retirement look like?
- Is this possible?
| Just realized I have a positive net worth. Posted: 06 Feb 2018 09:10 AM PST I am getting married to my SO on our 6th anniversary later this year, but ever since we moved in together ~3 years ago, we have been very clear and transparent about money. I came into the relationship with 15K of student loan debt, and he carried over 100K. I made the decision, before we even moved in together, that I was going to marry this man and his burden was also mine. He was reluctant at first, I understood, but over the past 3 years we have made a commitment to each other and to paying down our debt. In those 3 years, starting out with modest incomes, we have paid off over 60K of his debt with the highest interest rates. There is about 7K left on my loans, which we will finish this year before tackling his last 40K. Today, I realized that I, myself, I have a positive net worth but I never thought about it in that way - my SO and I are a unit and if we are to reach FIRE we have to do it together. [link] [comments]  |
| Daily FI discussion thread - February 06, 2018 Posted: 06 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: 06 Feb 2018 11:29 AM PST As someone who is semi-FIRE (freelancing part-time before fully pulling the trigger on employment income), I've had the hypothetical question: if you assume, as I do, that a 3.5% initial safe withdrawal rate will support a ~60 year retirement, but you start withdrawing after a market downturn such that your net worth is lower than some previous point, is it still valid to use the "high water mark" of your net worth as the basis for the initial safe withdrawal rate? Since the SWR (as most of us think of it) is simply a probabilistic assumption based on historical trends, it seems that the "high water mark" approach is appropriate. After all, why should I have a lower SWR if I FIREd today vs two weeks ago? My point is, the SWR, especially if you've gone conservative with 3.5% or even 3.25% based on elevated CAPE10 ratios, is building in downturns far worse than the current one, so it seems reasonable to me that you can use your highest point as the basis for your SWR even if you retire at some future point. This, of course, assumes that you've stayed in the market, and your net worth is down because of the market itself, not because you withdrew and stuffed your money under a mattress or bought a speed boat. Am I thinking about this right? [link] [comments]  |
| Go back in time and think of the financial advice you wish you got before you got married. Posted: 05 Feb 2018 07:53 PM PST I'm getting married in August and have been reading some pretty great stuff on /r/financialindependence. I could be wrong but I haven't seen any marriage-specific financial independence advice here, so I'm curious. What is something you wish you were told (in terms of finance) before you tied the knot? Are there things couples can do together to save and retire early? Got my eyes and ears open. Notepad and pen ready. [link] [comments]  |
| Is past market performance really an indicator for the future? Posted: 06 Feb 2018 02:17 PM PST Something that I have been thinking a lot about is, we assume the market will perform at an average of 7-8% over a long period of time. While this is true, all through this time America has been building infrastructure, gone through the industrial revolution and then the internet boom. Looking into the future we are worried about a lot of unemployment due to AI taking over many jobs and a rather bleak Outlook in general. So can we still expect a 7-8% return over the long term? Forgive me if it's too navie a question but it it's really important for me when I think about an FI number and what I would be doing once the RE part hits. [link] [comments]  |
| Posted: 06 Feb 2018 02:13 PM PST So here I am trying to figure what my FIRE number would be so I mess around trying to capture all of what my future projected expenses would/could be. Since I'm still ~10 years away from reaching that point, obviously those numbers could change but I just wanted to get a decent starting point My first question is, are there any glaringly obvious expenses that I'm missing? Secondly, because I anticipate carrying a mortgage into early retirement, the PITI is included in the calcs. However, I will eventually pay the mortgage off and that will relieve a huge chunk off the total projected expenses. How can you account for that when figuring out your FIRE number since the initial number might be too conservative? [link] [comments]  |
| Is my plan to freedom feasible or out of the question? Posted: 06 Feb 2018 04:23 AM PST Hello there, My first post here. I have been reading these forums, yet I feel I still need to ask this specific question, related to my future in becoming free from the burden of slave work from 9 to 6. Now, I am working as an engineer in central London from 9 to 6, and I hate this cycle of waking up, eating and getting dressed fast, travelling in a packed train to work, sitting all day in a chair with my eyes in a monitor, and then going back home in a packed train, getting food, cooking, eating and going to sleep. Not having enough time for anything else is a total joke. I basically live to work. Not work to live. And mind you, at 6pm I am off work, no overtime. Even at the weekends, if I have to wash some clothes, clean the house and buy some food it's done. I am slowly dying inside, and I'd rather be dead for good than do this until retirement which could be 80 if they keep on increasing the age limit. I can't live with a "looking forward to the 25 holiday days off" per year attitude. That is a slave's mindset. Anyway, I am lucky to have inherited 350k euros and I wanted to "buy" my freedom by doing the following: Buying a villa in the south of Spain and renting it out on Airbnb or booking.com. Buying a small 2 bedroom flat for myself and my girlfriend to not have to pay rent and live close to the villa so that I can manage it, clean it, maybe even do a breakfast for the guests. Villa costs around 250k. Apartment costs 100k. Also, back in my home country I have 1 flat that I could rent out for 500 euros per month. My girlfriend will have a part time job, and I would manage the villa, also the overseas flat, and work on my website and maybe produce more income this way. Eventually, if I save enough money, I would start working on building from scratch my own modest timber house in the country side in order to live off the land, while in turn I would also rent out the 2 bedroom flat on Airbnb to produce money. Does this sound too good to be true? I wouldn't have any debt in this way, and I would be totally free, and I am the person who does his best to not rely on status symbols such as expensive items/cars etc. Am I a fool to believe that I can escape the vicious cycle of work, eat, sleep, work etc, or do you think my plan is feasible? What do you think? Thanks in advance, Dan tl;dr: can I get off the slave job of 9 to 6 by managing my own Airbnb and not having to pay rent or any other debt? [link] [comments]  |
| New here— not starting in a great place but I’m committing to the direction. Posted: 05 Feb 2018 07:09 PM PST 24, M, single, career in an artistic field. I have essentially no savings and a credit card debt of 9k, and a debt to my parents of 18k. Annual salary 68k before taxes, plus odd jobs, an extra 5k give or take. Never gave a lot of attention to my financial situation because I didn't have to worry about it too much, but I want to build new habits and save up now that I'm independent and want to start a family in the next decade. I've been reading some of the posts here and on blogs and I like the can-do-it mindset in this community. Mainly I'm writing this for myself as a spur forward. I've never done a comprehensive budget in my life, haven't got a clue about anything to do with finance, never saved more than 10 grand, and spend money with reckless abandon. So I've got my work cut out for me. I may be getting a job that pays three times as much in the next year and I figure if I don't get my financial habits sorted out the extra money is just gonna get destroyed. If there are some good posts or blogs people want to recommend for a newbie like me I'd love to hear them. Appreciate this community being here— great to read all the success stories. [link] [comments]  |
| What do the swings in retirement look like? Posted: 05 Feb 2018 07:34 PM PST So today's minor hiccup in the market has me wondering about the broader picture. Most of my investment journey thus far has been during the good times, so I've not known the numbers to go any way but up. I've always known they'll go backwards sometimes, but this is the first week I really saw it. So let's say that as of last week you've got $1M in assets (to make it easy) in an 80/20 portfolio. What does today's rounding error look like? What if it keeps up for a month? For a year? If 2008 repeats? How do you correct your lifestyle for those scenarios? [link] [comments]  |
| Posted: 05 Feb 2018 06:49 PM PST I have a broad range of interest, people always say you should work your passion and not just work so you get a lot of money. The problem is though, I don't think that is possible for me, I have too many passions and many of them are not lucrative. So the thing I value more than money, is my free time. I have recently got into finance and investing, I understand investing takes a lot of time to research and pick good investments. I figure since I am still in high school that if I begin learning about investing I can retire early, and it will make all the countless hours of work worth it. Do you think after the initial research and investments I will be able to just receive passive income with maybe an hour or 2 of maintenance everyday afterwards? I would then hope I eventually accumulate enough wealth by say 35 that I can just retire and do way less investing. Now I'm not entirely sure how much I would need to support my lifestyle but I think I'm not so into material possessions but I am into experiences like online courses and education. I'd hope to live a comfortable life, in a rural area, nice house, good food, spending my days on the internet, learning about things, and acquiring new skills. Oh and I would also like to donate and volunteer if I had enough money. I would prefer to not create my own business, but I am willing to work for people, but I feel like investing needs to be full time to be done right. So maybe I should work with OPM but I also have my seed money, and I can save up from working. [link] [comments]  |
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