Financial Independence Bankruptcy-proofing your assets. Why don't we talk about it? |
- Bankruptcy-proofing your assets. Why don't we talk about it?
- Goesintas
- Daily FI discussion thread - March 06, 2018
- 2018 HSA family contribution limit has changed
- What's your story that led you to FI?
- FIRE environment in Switzerland
- Any examples of futures contract-like products available to retail consumers?
- Other life choices/options that you never considered
- Hamster Wheel =monotonous
- Building a Recession Proof Life
- [Help!] Calculating Retirement and sticking to budget. Check the calculations
| Bankruptcy-proofing your assets. Why don't we talk about it? Posted: 06 Mar 2018 06:45 AM PST For some reason we don't appear to ever talk about this here. But there's a tactic called bankruptcy that can obviously save your butt amidst unforeseen financial trouble. Did you know that roughly 1 million Americans file for bankruptcy each year? Its not as uncommon as it may seem. And from my research, not very expensive, and relatively simple process. Reasons you might file for bankruptcy: Lots of medical debt. With insurance deductibles rising higher and higher this appears to be the number one reason people file bankruptcy. Some of you advocate for budgeting absurd amounts toward medical expenses (probably wise to do.) Bankruptcy can wipe away the medical debt. Lawsuits. Wage garnishment, and the whole nine yards can be wiped clean. Umbrella insurance is a great hedge. But don't forget about bankruptcy. Losing your job. It happens, remember 2009? If your assets are bankruptcy proof then there's an additional option. Divorce. Yes, it happens alot. Unexpected expenses. We just don't know what the future holds for us. My personal goal is that 90% or more of my NW is locked into bankruptcy proof assets - home equity, 401k's, IRA's, HSA's, 529's, etc. You could potentially have 1 million dollars in 401k's and a paid off house and be able to keep 100% of it even amidst filing bankruptcy and wiping away any debt you owe. Am I missing something? I know bankruptcy is an odd thing to talk about in a Financial Independence sub. But I can't help but view it as a fantastic last resort option. I would love to hear your thoughts! [link] [comments]  |
| Posted: 06 Mar 2018 07:11 AM PST I.e. "goes into" Single guy, almost 56 years old. 1.4m total assets, 600k in bonds/cash, 450k in high dividend etfs (VYM, VYMI, smidge of VNQ) that pay around around 3% in dividends, remainder in regular stock funds/etfs. My thinking - a $4k per month draw goes into $600k for 150 months, so even if all hell breaks out in equities I should be good with my draw on bonds/cash for 12+ years - long enough to ride out a market downturn without selling equities at a loss. Barring a market downturn, I would draw the $4k while maintaining roughly a 60/40 stocks/bonds asset allocation. And really I only need to draw down at that rate until social security starts paying me around $1,700 per month (ssa.gov estimated benefit) at age 62. Sock it to me, FiRE folks - what I am missing (I have health ins covered) = ?? [link] [comments]  |
| Daily FI discussion thread - March 06, 2018 Posted: 06 Mar 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]  |
| 2018 HSA family contribution limit has changed Posted: 06 Mar 2018 12:05 PM PST Just notified by our HR department. 2018 limit was $6900, now $6850. Have to recalculate now since I've put 5 pay periods in at what I thought was the limit. If you were also planning on maxing, make sure you do so as well. A bit annoying. Really would like the limits on these vehicles to go up, not stagnate. https://www.plansponsor.com/tax-reform-changes-hsa-limits-family-coverage/ [link] [comments]  |
| What's your story that led you to FI? Posted: 05 Mar 2018 04:53 PM PST Here's mine: Ever since my first job as a busser when I was 16 at a local Italian restaurant I've been saying "Man, I can't wait till I retire". Most of my co-workers, friends and family thought I was joking and just brushed it off with "Ha, you've got a while to go kid". At the time I was only halfway saying it ironically, but it was based on truth - a desire to not want to do crap I didn't want to do. Goofy Side note: I would be paid nightly in crumpled up $1 and $5 bills which I would take home and iron out so it wasn't a pain in the bank teller's butt. Anyhow, as I went through high school and college, I switched jobs a couple times, but always kinda had the same attitude - can't wait to retire - same responses from coworkers - was pretty good at saving and a novice at investing at this point. Didn't really have any goals with the money, but at least it wasn't being thrown away. Our first day of college, our professor had us stand up and rattle off a goal we had. I randomly said "to retire by the time I'm 30". She literally scoffed and said "well, you better not have any kids". Even though I was (mostly) joking, the way she said that really kinda pissed me off and only strengthened my resolve. One Christmas, i guess I was 19, my sister's fiance gifted me a copy of Rich Dad Poor Dad, which I view as the turning point in my financial life. It gave me a purpose of something to work towards. I know it's relatively shallow, but for introductory purposes, it fits the bill. So now I'm saving more and investing more, but still haven't been properly introduced to FI. A few years go on where not much new happens until I graduate from college and get my first job. On day 1, I joked with my mentor about retirement and he ended up sharing MMM with me and since then, I've had FI on my mind as a primary goal. Anyway, that's a little of my story on how I learned about FI - eager to hear yours. Edit: MMM = Mr Money Mustache [link] [comments]  |
| FIRE environment in Switzerland Posted: 06 Mar 2018 04:23 AM PST Hi folks! Since I never read about FIRE in Switzerland, I thought I give a quick overview about my current situation. Throwaway account, since CH is a really small labor market. ;-) Overall, I think CH is a great country to pursue FIRE. Firstly, it is not as expensive to receive a (graduate) education in CH. I am a foreigner and tuition was a bit higher for me, but in total I paid USD29k in tuition for 6 semesters undergrad and 3 semester grad school. Usually it is expected for an employee to either finish the Master's before entering the workforce or start with a Bachelor's and do either an MBA (more in consulting/banking) or a Master's degree afterwards. Starting salaries are pretty high across the board. I took a job at a MBB consulting firm and started with a 121k salary (+up to 10% bonus). Of course this is on the high end, but most positions with large companies pay around 95k and you will work 40-50 hours per week. I also get full private health insurance, which would be another 6k per year. I'm not sure, if this is a thing in other countries, but private contracts give you access to almost any treatments and doctors available at full coverage with free choice by the patient. Also, the company contributes around 10% of your salary to retirement funds. After ~2.5 years and with a promotion, the salary increases to ~160k (+up to 10-20% bonus). Employment in CH is usually relatively safe and you get 3 months notice before contract termination. A real advantage in CH are the low tax rates on income and capital gains. Income tax is dependent on the state you live in and range from 0% to 30% (I think). My current effective tax rate including all deductions to social security is around 17%. A major point for FIRE is the 0% tax rate on capital gains (for private investors). Dividends are taxed with 35%, however. In general, COL are high in CH. Everything that involves services is especially expensive (think restaurants, bars, barber, etc.). But many large cities in CH are very close to other European countries (Zurich-Germany/Austria, Geneva-France, Lugano-Italy), and in 30min you can go to Germany to buy groceries for a 30-50% discount and bring them back to CH (~320$ per person & trip). You will even receive back the difference in VAT when crossing the border (e.g., Germany takes 19%, CH only 8% -> you get back 11% of the purchase price), which makes shopping there even cheaper for you than for the locals. I think this is insane. This can really bring down your spending with an eye on FIRE. As I am working a lot, I'm currently not doing this, but it is always an option. But even without retail tourism, you can live relatively cheap in CH, if you cook a lot yourself and don't eat too much meat or processed foods. My saving rate last year was at around 55%, but this is also because my company pays for a lot of my meals during the week when I'm traveling or working late. I also live in a shared apartment and don't pay for health insurance, which will save you a lot of money. CH has a very high standard of living, being one of the most and clean countries globally. You're basically always close to nature, many big cities are next to lakes (you can even drink the water in lake Zurich), and activities like hiking, surfing or swimming are free for everybody. In 3 hours you can reach cities like Milan, Munich or Paris by train. Medical standards and level of infrastructure are also some of the highest worldwide. It's also pretty diverse, since many international companies have their HQ here. The strong franc is also convenient when traveling, as you do not pay more for flights or accomodation than people from other countries, but often earn double their salary (gross and even more so net). Often it's also cheaper to do a weekend trip (with a cheap flight) to Lisbon/Rome/Paris than to stay in Zurich. TL;DR I think Switzerland is a great country to pursue FIRE with the right mindset. Education is relatively cheap, starting salaries are high and taxation is low. Income taxes are lower than in most other European countries and there is no tax on capital gains. Standard of living is high with many free things to do (nature!) and if you watch your expenses and/or shop at the border, you can achieve high saving rates easily. I thought it might be interesting to share, as there is not much about Switzerland in here. [link] [comments]  |
| Any examples of futures contract-like products available to retail consumers? Posted: 06 Mar 2018 03:35 PM PST This concept appears sometimes to the retail consumer. For example, the USPS sells stamps which have a lifetime use so regardless of hikes in the price of stamps you can still use them. Are there other lifetime or yearly/multi-year commitments available for everyday objects? If you are approaching retirement such financial holds would be a great benefit. I'd love to hear any ideas. [link] [comments]  |
| Other life choices/options that you never considered Posted: 06 Mar 2018 03:22 PM PST Reading about people learning about FIRE, I'm surprised by the number of people who never even considered it, until it was introduced as an option. I grew up to FIRE parents so it's always been an option for me. Has anyone ever discovered any other life choices that they decided were great, but they never even considered as an option? I'm wondering if I'm missing something that is great but never considered. [link] [comments]  |
| Posted: 06 Mar 2018 04:12 PM PST Does anyone else here feel like going week through week over and over is a bit monotonous? Our savings are on autopilot and we literally sit here and feel like we're hoarding hundreds of thousands of dollars but nothing's really changing. Sure the pile is getting bigger but you just watch everyone around you going on without a care in the world while you're using mega restraint. I watch my sibling having a child with literally no savings, my Mother now on disability(stress leave) with no savings or pension going on trips (credit card) and my other sister drink her life and money away. We literally just feel in a rut. Our goals are almost obsessive and it's literally all we focus on. What do you all do to break up the routine and monotony? We gym, run, hike, read, coffee nerds, etc but what else can we do to break up the routine? [link] [comments]  |
| Building a Recession Proof Life Posted: 06 Mar 2018 05:10 AM PST I recently came across this site and was pleasantly surprised - based on the title I was expecting r/wallstreetbets but it's actually a lot of r/fi though written through a different tone. No doubt somewhere there will be some high risk advice, but this article in particular seemed useful here since we all know it's a matter of when, not if, the next recession arrives. http://wallstreetplayboys.com/building-a-recession-proof-life-ten-steps/ I like the idea of doing a Dry Run, for example - a good way to possibly identify some extra fat to trim ongoing. [link] [comments]  |
| [Help!] Calculating Retirement and sticking to budget. Check the calculations Posted: 06 Mar 2018 08:52 AM PST Help me verify if the calculations are correct. Aim is to have this (excel sheet) as a full-proof calculator and it should give me accurate estimates even with unexpected expenses. This assumes 4% withdrawal from your savings. Help me add the missing variables and making corrections for best possible accuracy. Pardon the "_" between words if it bothers you. Hopefully I can have this help me plan early for the bare minimum amount for retirement and possible early retirement. Terminology Used:-
E.g. Couple (YEAR 1 @ Age 65)
Excuse any typos. I am aware of online calculators, but would like to have one that I can later on customize to my expenses. Edited:formatting. [link] [comments]  |
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