Financial Independence Some psychological observations from someone who just took a 6 week sabbatical |
- Some psychological observations from someone who just took a 6 week sabbatical
- (update) Fire'd early due to health reasons. Where things are at now
- Work is filler for most of us
- JL Collins gave a publicly accessible talk!
- Daily FI discussion thread - February 07, 2018
- CNN: 3 things you need to know about the 4% rule
- Good ways to get kids interested in Investing?
- A million at 30 - would you still work full time?
- Our kids will thank us for FIRE
- Vacation Homes
- Help deciding if I should buy parents house or how to best help them without harming FIRE plans
- Did you find out about FIRE too early? How did it affect your college and career trajectory? Did you end up micromanaging expenses too much, weeding out relationships in the process?
- Show Reddit: A small Reminder to Keep Calm and keep Investing :)
- Weekly Self-Promotion Thread - February 07, 2018
- I originally posted this on r/personalfinance, but this also seems to have some big ramifications for FI/ERs. I'd love your thoughts about how I'm wrong or right in my quick calculations so I make sure I'm taking the right steps as I start the next stage of my life towards FI.
| Some psychological observations from someone who just took a 6 week sabbatical Posted: 07 Feb 2018 07:09 AM PST Background: Quit my job of almost 5 years back in December. Plan was to take some time for myself before lining up another gig. Starting the new job next week. Financial status: Income from my small business makes just enough to cover my expenses. Have a couple hundred grand invested across retirement and brokerage. Own (with mortgage) primary residence & one rental property. Unmarried with no kids, but in a serious relationship and we live together. A lot of the things I've experienced during these 6 weeks away from the working world have been eye opening, while also being things people have totally said to me on this sub before. Nevertheless, now that I've lived them they're obviously resonating with me very strongly. Workaholics are workaholics. I've always been a Type A personality, and despite bountiful dissatisfaction with the job that I left, I have been very motivated in terms of my FI/RE and general life goals, and untiring in terms of pursuing any opportunities that come my way. Sometimes it's stressful to be this way. To the surprise of no one, taking 6 weeks off from committed work made this worse if anything. By the time about 2 weeks had passed I found myself having accepted two new freelance consulting projects, telling myself that they were great opportunities to further my skillset and earn some extra money. In other words, despite seeing from a distance the mental health benefit of dialing down my relentless pursuit of career and financial success, when push came to shove I was pretty quick to give up on that. If I RE someday I see it being a real challenge for me to find purpose. I see myself as someone who will struggle with "one more year" syndrome and moving goalposts because I have so deeply trained myself to seek these things. Social interaction provided by work I've seen a lot of people on this sub warn about feeling lonely or understimulated socially after leaving the workplace. This wasn't my experience at all. I'm introverted and I think even after 6 weeks I haven't fully bounced back from the extremely socially drained feeling that my old job left me with. I definitely don't feel ready to start forcibly interacting all day again with people I didn't choose. I really enjoyed going to the grocery store and other errands at weird hours when it was much quieter. I didn't notice it taking less time but it felt a lot less overwhelming to me. When I envisioned my sabbatical I thought I'd feel super eager to do things with my friends so i overcommitted in advance to all sorts of things, thinking I'd finally feel great about attending them. But when the time came I felt similarly socially wary about doing them as I did when I had a full-time job. I guess this trait is more inherent to me than I previously understood it to be. I previously thought it was more related to job stress. Relationship hurdles My relationship was canonical throughout this time period. Maybe it would be different if both partners were on a sabbatical at the same time. There were still the same relationship challenges as always that cropped up. I wasn't magically okay with things that previously bothered me. I didn't magically find it easier to make time for solving difficult relationship problems. Those are just always hard. I had these visions of having awesome dinners ready for him when he got home from work in the evenings but this never materialized. I always managed to become busy with other things and find it just as difficult as before to prioritize making healthy homemade food, and by extension, the general frequency and intensity of doing nice things for my partner. Money stress I hardly thought about money at all and this was probably one of the best parts of the break. I did some serious planning in advance to ensure I had the correct size cushion of cash. My business has a separate bank account and I made a point of not drawing from it, so I really was living off of savings. I went about my life, hardly thought about what I was spending, logged into Personal Capital maybe once, and didn't bat an eye about the stock market drama the other day. I hope if I RE that I will feel similarly confident in my own planning that I can achieve some level of cognitive dissonance about declining money :) Tl;dr / summary When reflecting across all of these points and the rest of my time away from work, there is a clear pattern to me. As we go through our lives we're wiring ourselves a certain way, and nothing about changing our job situation will magically change our wiring. It won't make us better or different or happier people. I was the same person as always and this was both comforting and scary, but eye-opening most of all. If I want to be kinder, more compassionate, less stressed, more mentally healthy, or have better social skills, then I simply have to take direct initiative about these things; waiting for a change in external circumstances is strictly a waste of time in that regard. If anything comes from this post, I hope that these words find someone who needs to read them! [link] [comments]  | ||
| (update) Fire'd early due to health reasons. Where things are at now Posted: 07 Feb 2018 08:38 AM PST About half a year ago, I made a post about FIRE'ing early due to health reasons. The post had a lot of interest, so I thought I'd share an update. Background I thought I was on track to FIRE in my early 40s. I had good friends, good hobbies, a career that was progressing well, and was saving quite a bit. In my early 30s I began to develop chronic pain (primary cause was Ehlers Danlos Syndrom), which made any strenuous activity or repetitive motions difficult. That first forced me to give up almost all of my hobbies, then go part time at work, then stop working at the beginning of 2017. My progress toward FIRE was insanely helpful, as I don't know what I would have done with myself if I didn't have a financial cushion that allowed me to stop working. General update Now that I have significantly more time to focus on my health (and avoid activities that negatively impacted my health), I'm in much less pain day-to-day. That being said, I still can't do most of the hobbies I previously loved, but I've found some other hobbies I can do that I enjoy. As I've felt better, I've also tried some work-like activities, but those quickly bring the pain back. So, unfortunately, I don't see the possibility of returning to work any time soon. Partly due to the encouragement I've received from redditors, I'm continuing to seek disability (it's a long process). Financials Due to really good financial performance and short term disability payments, my net worth has increased from $550k to $650k (plus a paid off $150k condo). My spending (excluding healthcare) went from ~$30k/yr before health issues, to $20-$25k when I started to realize I may have to FIRE earlier than I wanted, to $16k in 2017. Though, I had no major housing or car expenses in 2017, so over the long run my spending would probably average to ~$18k/yr. My ACA health insurance is currently at $8.5k/yr. Thoughts on the future I'm not yet sure what SWR I would be comfortable with. I'm generally pretty risk-averse, and my favorite SWR analysis recommends about a 3.25% SWR. I have a very long retirement horizon and, unlike most people, I won't have much flexibility to further reduce expenses or go back to work if my returns are bad. That makes me want to be a little more conservative... That being said, I feel like I'm in a good place right now to cover my non-healthcare expenses. It's really hard to predict what is going to happen with healthcare in the US, though in the current environment, with the subsidies I should be able to get by with only small additional cut-backs... but without subsidies I'll have to hope for amazing returns. Additionally, I'm starting to feel a bit isolated at my current expense level. I grew up in a well educated, upper middle class area. Even now, I'm finding that most of the people I end up getting along with best are people that have graduate degrees. While I'm cutting back my expenses, most of my close friends are doing extremely well financially, with almost all of them making >$100k. They're fairly accommodating to me, but they still want to be able to go out to reasonably priced restaurants or have things like thick-cut rib eyes when we cook out. If I spent an extra $3k/yr on drinks, restaurants, cook-outs, and airbnb's for weekend trips, I think it would go a very long way toward maintaining strong relationships and my general happiness. That would still only put my spending around $21k/yr, so it feels very reasonable. But, given my financial situation, I'm very nervous about spending any more than I have to. So right now, I'm struggling with what to do, but hope to make a decision on this in the next few months. tl;dr With good returns and some cuts in my expenses, I'm in a pretty good place with my finances (subject to the whims of crazy US healthcare policy). My health is improving, though I don't think I'll be able to work again in the near future. Also, I've picked up some new hobbies that once again leave me wishing I had more time in the day to do all the fun things I want to do. That being said, I still don't have everything figured out, but hope to have my FIRE/financial status stabilized in the next few months. [link] [comments]  | ||
| Posted: 07 Feb 2018 11:34 AM PST Every now and again, I see posts here questioning the RE part of FIRE, and how people can't imagine their lives without doing some type of job. While I think that is certainly true for some folks, I have my doubts to whether the majority of us feel that way. Yes, some people do feel a need to be productive to be happy, and derive their purpose and satisfaction from doing a job. However, to check whether you fall into that category, ask yourself the following questions:
For me, work =|= meaning/purpose. While my job may offer some ancillary non-monetary benefits, I'm under no illusion as to why I wake up to an alarm everyday to go to work: to get paid. As I get closer to FI, every morning that I have to get ready for work I think about the other stuff that I'd rather be doing that day: hitting the gym, cooking healthy meals, attacking items on my never ending to-do list, learning, spending time with loved ones, sleeping, relaxing, traveling, and if I still have time & energy remaining after all that, I wouldn't mind doing some work. Am I off the mark that this is how most of this sub feels? Discuss. [link] [comments]  | ||
| JL Collins gave a publicly accessible talk! Posted: 07 Feb 2018 10:54 AM PST YouTube link: https://www.youtube.com/watch?v=O-wcWfu3zmc I found the talk a very beginner-friendly introduction to the entire concept of financial independence, although I disagree with his stance on international investing. Sharing it here since his stock series was what helped me first understand the stock market, and I thought it'd be helpful to other people too. :) [link] [comments]  | ||
| Daily FI discussion thread - February 07, 2018 Posted: 07 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]  | ||
| CNN: 3 things you need to know about the 4% rule Posted: 07 Feb 2018 01:11 PM PST Some interesting bits on the 4% rule: http://money.cnn.com/2018/02/07/retirement/4-percent-rule/index.html Please point out anything you think is not correct or valid. [link] [comments]  | ||
| Good ways to get kids interested in Investing? Posted: 07 Feb 2018 12:59 PM PST I was reading an article about a kid that got a share of Disney stock and it inspired him to get interested investing. He said he got checks in the mail which got him interested in passive income. Can you still get dividend checks in the mail. Do you have any other ideas how to get kids interested in investing? [link] [comments]  | ||
| A million at 30 - would you still work full time? Posted: 07 Feb 2018 12:20 PM PST Monday, Tuesday, Wednesday, Thursday, Friday. 40 hours plus the commute. I wonder why I still put up with the grind. But at least I'm young and live in an amazing location, and rent is cheap thanks to rent control. My company has a policy that allows workers to drop as low as 20 hours a week. 30 is the minimum needed to be a full time employee (and thus retain benefits). Maybe I haven't quite wrapped my head around the fact I'm hitting a million at 30 thanks to Bitcoin. It all came so fast. Maybe it's because my wife and I plan to have kids, so deep down I know that working 40 hours is a responsible thing to do. But even at 30 hours. I'd still be close to $100K/yr salary, which isn't bad. And what about RE? Maybe I'm afraid that giving up 25% of my salary will put me on the path to retire at 65. But surely I could probably still get there just by maxing out retirement accounts for the next 15-20 years, which I could do on a $100K salary... Monday, Tuesday, Wednesday, and a 6 hour long Thursday. A weekend, but with an extra day to whatever I want, including errands I can't find the energy or time for during the week - sounds amazing. Why am I not doing this yet again? [link] [comments]  | ||
| Our kids will thank us for FIRE Posted: 07 Feb 2018 09:52 AM PST I take that back; our kids won't thank us because they will never realize they should. They are growing up with financially responsible, solvent parents. The children of parents pursuing FIRE will never even realize the financial burden their parents could have been. Is burden too harsh a word? I'd say not, but my vision is clouded because I'm currently dealing with said burden. There are days when I want to give up my FIRE journey, times I want to buy a family house instead of more rental properties, and sometimes even weekends when I just want to take a last minute super indulgent trip to the central coast or Mexico. I have new motivation to keep going- to ensure my children's future is entirely theirs. [link] [comments]  | ||
| Posted: 07 Feb 2018 01:01 PM PST If a vacation home is paid off, would you include the equity in your FI calculations? [link] [comments]  | ||
| Help deciding if I should buy parents house or how to best help them without harming FIRE plans Posted: 07 Feb 2018 10:17 AM PST Hello everyone, I'm currently looking to get some advice from the community on something that i've though over for years and can't quite get a decent plan in place. FIRE is a big part of my life plan. At this point i'm 24 and aiming to hit my fat FIRE number around age 44. My investment plans have always been to max out retirement accounts, then fund a taxable brokerage account. Pretty much everything is in low cost index funds split between US Stocks, Inter Stocks, and a mix of Bonds Me:
Parents:
My parents bought their home in 2007 for 247k. Lost their jobs during the recession and ran through their retirement accounts to keep the home and maintain our family. They redid their mortgage at some point during the recession and were placed on a 40 year mortgage. The interest was around 1% and stayed that way for many years. From what I've reviewed, over 10 years there was almost no reduction to the principal amount of the loan. Over the last few years the interest rate on their mortgage started going up 1% a year which is the terms they agreed to. In the next couple of years, they will be crossing 5% interest on the home with it continuing to go up each year. The home looks to be worth around $280,000 based on Zillow but realistically it's probably more around $265,000 as it would need some basic updates before being in a decent sellable condition. They are both in their early 60's and have virtually no retirement savings. With their interest rate soon going up on the mortgage, it won't be long before the house isn't very affordable for them. There's pretty much zero chance they are able to work until the house is paid off. I definitely don't wanna get to a point where they have no income other than social security and we're put into a situation where we're trying to figure out how to make this work Without greatly impacting my plans to FIRE, what are some of my options? Here's what I've thought:
It's pretty much my understanding that in their old age it will be a major responsibility of mine to take care of them financially in some way. Both of my siblings are low income workers making under 30k if not less that 20k some years so I don't expect them to help financially. Has anyone else been through this? What are some of the best actions I can take? I'm not familiar with real estate at all so I don't want to get myself into a bad situation but it sounds like at its worse I buy the house for 30k less than it's worth today and hold it until we no longer need it. [link] [comments]  | ||
| Posted: 07 Feb 2018 01:57 PM PST For example: If you found out about FIRE really young, your entire perspective changes. You do not risk taking on debt, dating, doing peer interactions. All unnecessary purchases like video games are done. You start eating one meal a day or fast for longer periods. The entire budget is in your head and you get anxious if something "goes out of your control." And so instead of pushing forward with the raw vigor and determination youth might give towards an ambitious goal, you fall back. That $10 an hour job is a better alternative to college if you still live with your parents and can save 80% of the pay. And instead of risking things, since you started so early, you just wait the time out. You wait around passively as your net worth slowly increases. But the major problem is the urgency and drive. You avoid relationships, friendships, and others socialization because they used to involve spending money. You say this is all fine because you are introverted anyways. Time continues to move on, your net worth slowly increases. Maybe not as fast as you initially thought, but you still have time on your side, right? Right? Maybe the entire time you saw FIRE was just a way to avoid dealing with the real issues of urgency. You were actually "ahead" of the curve, or at least that's what 30-something year olds would tell you. "Wow I really wish I got started at your age!" But look at what you missed and what could have helped:
What are your experiences with FIRE on the negative aspect? Did you too avoid relationships (sex), risks, and hobbies in the pursuit of a passive increase towards net worth? [link] [comments]  | ||
| Show Reddit: A small Reminder to Keep Calm and keep Investing :) Posted: 07 Feb 2018 03:34 PM PST Had this convo with my girlfriend... She was asking should we move to bonds, given everything is so high and things start to get volatile and shaky... So I found this tool, and made this analysis which makes us sleep better... Even if we'd be at similar situation as 2008 right before the crash, things will still work out for us: https://ibb.co/hKVt6H [link] [comments]  | ||
| Weekly Self-Promotion Thread - February 07, 2018 Posted: 07 Feb 2018 03:09 AM PST Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  | ||
| Posted: 07 Feb 2018 02:39 AM PST
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