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    Friday, March 2, 2018

    Financial Independence Ready, Aim, um... sorta FIRE!

    Financial Independence Ready, Aim, um... sorta FIRE!


    Ready, Aim, um... sorta FIRE!

    Posted: 02 Mar 2018 07:27 AM PST

    I'm out! Today is my last day working for a boss.

    I've been a public sector employee for 22 years. That just hits the sweet spot under the grandfathering rules from when state employees had better benefits than you can get now. Namely, 50 years old + 20 years of service = early retirement pension + free healthcare for life.

    I'd planned to stay a little longer, but when my position got transferred to another unit I decided to pull the ER trigger. We have plenty of other income streams by this point anyway so the FU money was there. My boss and HR seemed really, really stunned when I said, "No thanks, I'm retiring!".

    Now, I say "sorta FIRE". Yes, we have all we need for me to retire and be financially independent (and better than a LeanFIRE lifestyle). However, my retirement dream is to grow my own business which I've been working towards on nights and weekends for the last two years. I'll take Monday (and maybe Tuesday) as a break to see my daughter while she's on spring break.

    After that, I'm headed to the shop where I'll be carving signs on my giant CNC router. You can see my work over at https://tarheelsigns.com/ It's hella fun to create stuff (and get paid for it!) with the help of an 800 pound robot. Now I get to do that as much as I want to grow my business as big as I want -- and if it doesn't work out I still won't have to go back to work for anyone.

    Otherwise, I plan to enjoy the running trails behind my shop along the Eno River and spending more time with my family and friends.

    Have a great weekend everyone! I know I will!

    submitted by /u/gunnk
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    I (31F) think I'm ready to quit my job and go work part time at Starbucks. Am I crazy?

    Posted: 02 Mar 2018 09:29 AM PST

    Edit to add: I've been reading all the replies. Thank you taking time out of your day to comment. After reading all the input, I'm convinced I should not quit on Monday. I will take advice here to try extra hard to find part-time work. I guess many of you are right - 20 hours at Starbucks would probably feel just as shitty as 20 hours in a finance job, except I would get paid 4x more at the finance job. I don't know. I realize I should think much, much more before quitting this thing.


    I'm 31 and I have just crossed over $500k invested between my 401k and trading account...zero debt. I have $50k in a checking account to last me a couple years without work. All my money is from me working, saving, investment gains. I live in Kansas City. I don't own property but I live with my elderly parents who are almost 80 years old. We are from Calcutta so it's not that odd for unmarried adult kids to live with parents. They are very independent both financially and in everyday life. My monthly expenses are barely $1000 since I don't pay rent. My parents absolutely refuse rent. But on their birthdays and holidays, I give them each a stack of cash, $1000 or so and I have to force it onto them, they don't want my money since they are FI but I just want them to have it. I spend probably $20k a year including those cash gifts.

    I will stay with my parents until they pass. I refuse to ever put them in a home.

    I don't hate my job but I hate wasting 9 hours of my life here every day. I am an analyst on my company's finance team and I earn $85k gross. I want to get a part time job where I work 3 days a week to get health insurance and spending money. I think Starbucks or Costco. I'd like to let my $500k grow to $1m in about a decade, then completely stop working. Why? Because 4% @ $1m will be enough to cover health insurance and spending.

    My other idea is to get contract finance jobs where it's only a 6 month term, make $25k to cover spending + health insurance, then I have 6 months off.

    I think I'm ready. I want to quit. I have my resignation letter typed up. I'm so scared. My plan is quit, decompress for a couple months, then go visit India for a month (I haven't been there since we left when I was 3 years old) then maybe start looking for part time work. Like I said, I have $50k liquidity set aside to last me a couple years.

    I'm going to think more over the weekend then quit on Monday.

    submitted by /u/Throwaway74888774
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    For those of you who have successfully achieved FIRE

    Posted: 02 Mar 2018 05:37 AM PST

    I've seen a lot of people post on here their FIRE plans and when they would like to retire, but I'm curious to hear about those of you who have successfully retired early and our financially dependent. So...

    Was it worth it, being frugal all of those years? What age did you successfully RE? How much was your NW then? How much is it now? How are you doing now since your RE date? Anything you would/wouldn't change? Any advice for us still on our path to FIRE?

    Thanks for any input and motivation. Happy Friday!!

    submitted by /u/_Hnnng_
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    Daily FI discussion thread - March 02, 2018

    Posted: 02 Mar 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.

    submitted by /u/AutoModerator
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    Weekly FI Frugal Friday thread - March 02, 2018

    Posted: 02 Mar 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.

    submitted by /u/AutoModerator
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    We're in the Green!

    Posted: 02 Mar 2018 03:03 PM PST

    It's been an exciting ride so far! Over the past year this subreddit has helped me comprehend what it means to be financially independent and how to efficiently achieve that goal. I have finally hit my first noteworthy milestone. I have a positive networth.

    I am a 23 year old recent college grad. Started my career in July of 2017. I didn't start actively tracking my networth until December but at the time I started my job, i had $14,000 in student loans and maybe $1000 in the bank. That was it. Because time is compounding's best friend, I started contributing to my 401K at about a rate of $1000 per month to get some money to start working for me. Because of my absolute hatred for student loans, I began putting every penny after rent and bills towards these student loans. I have racked up a little extra credit card debt along the way but it's all set at 0% interest so I do not fret about it. It's time will come soon.

    I make an $63000 annually and have lived pretty frugally up to this point. The lifestyle is difficult to maintain at some points due to being surrounded by college aged friends & constant peer pressure for trips, eating out, and especially $70 tabs twice a week at bars (Seriously how to people justify this). I think I have found a good balance of frugality and enjoying social activities. The pursuit of financial independence has been an addicting experience and has helped me enjoy life by learning to live with less. I wish it was easier to convey this message to friends. I definitely feel alone in my aspirations for FI (aside from this subreddit) but that's a topic for another day. Milestone 1 has been achieved and we are on track for Milestone 2 of being Debt Free.

    Overview - In 8 months I have: Invested $7700 Paid off $8900 in debt Increased networth $14,500

    My tracking sheet is attached below. Its very simple but effective. Let me know if there's more I should be adding to it.

    My Networth Tracker: https://i.imgur.com/nObkV3t.png

    submitted by /u/MeaT_DepartmenT_
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    Focus on Building Cash Reserves?

    Posted: 02 Mar 2018 06:10 AM PST

    Throwaway account - We have been saving aggressively since 2000. We plan to work 5 more years before FIRE. The specifics: (1) One million in our 401k, 457 and brokerage accounts. (90% stock, 10% bonds) (2) We max out our 401k's each year. (3) We invest an additional 36K per year into VTSAX. (4) We have $50k in cash (5) House and cars paid off. No debt. (6) Will receive a pension of $40k per year in 15 years.

    I have always been of the mindset only invest money that you don't need to touch for at least 5 years. So my question is should I start focusing on building up cash reserves or continue with my current strategy for the next 5 years?

    I am currently thinking about diverting the 36k that I invest per year into VTSAX to cash reserves.

    Would like to hear your thoughts. Thank you.

    submitted by /u/LateZookeepergame
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    What does being FI mean to you?

    Posted: 02 Mar 2018 04:19 PM PST

    For me it means freedom. Pure and simple. It means working life is now on MY terms. To put it in terms many can probably relate to: it means having the attitude of Peter Gibbons in the movie "Office Space"

    1) Overtime will now be on my terms. Step aside, Lumbergh. https://www.youtube.com/watch?v=3qifUYP234c

    2) If I get tired of working for a paycheck, then I'll stop. https://www.youtube.com/watch?v=jKYivs6ZLZk

    3) Suffering through soul-crushing traffic is optional: https://www.youtube.com/watch?v=fk2YRpLnmdU

    What does being FI mean to you?

    submitted by /u/SeriouslyJoking88
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    Not using a tax-advantaged account?

    Posted: 02 Mar 2018 01:03 PM PST

    I'm currently investing using a normal brokerage account (non 401k and Roth IRA). My employer doesn't offer 401k matching so that aspect is off the table.

    I want to retire around 50 and have access to the money whenever I need it beforehand (for down payments, etc). I don't want to incur the penalty for withdrawals before age 59. I also don't believe it is possible to gauge what American tax policy will be in 25 years, I suspect our income and capital gains rates will be higher than they are now, and would rather adjust my account and move money around as policy changes, rather than under the assumption that the status quo will maintain itself.

    I plan on buying and holding to maximize the benefits of long term cap gains rates. My question is: am I missing out on a significant amount of money by taking this approach? From what I've read and gathered opting to go with either 401k/Roth IRA and maximizing the benefit of either entails making assumptions about your own situation (active income at time of withdrawal vs. contribution influencing the rate) and the situation of the country (tax rate differences), as well as retiring around 59. And using a brokerage account instead, not trading around like crazy and incurring short term cap gains, represents the "moderate" approach, slightly more optimal for early retirees. Thanks for any insight.

    submitted by /u/MackMizzo
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    Is a 401K worth it with no employer match and these fees?

    Posted: 01 Mar 2018 07:07 PM PST

    My work recently allowed me to join their 401K plan and I'm finding myself wondering if it is worth it. It started with my boss telling me they provide no match and now I finally have access to the available funds and most are mutual funds with expense ratios around 1%. Only one index fund is offered with 0.03% expense ratio.

    The thing I am trying to figure out are the other fees associated with this account. There is a column on this thing that says "Redemption Fees" and has nested columns for "Sub-TA" and "12b-1". For the index fund, the "Sub-TA" column says "10.00 bps Quarterly". What exactly does that mean?

    In addition, there is a ton of legal jargon about admin fees. The first that stuck out to me is a distribution fee of $95 that occurs on ANY type of distribution, even after retirement age. The second is a monthly "Employee Fee" of $5 for "record keeping". idk if these are normal or low...

    The rest is all rubbish info with "Varies" provided, so I can't get a clear picture of everything. Here is a link to the fee disclosure file if anyone is curious to see what I am talking about.

    From an FI perspective, I feel largely spoiled with Vanguards lack of fees and low expense ratios, but would I be better off skipping this 401K entirely and just putting the after-tax money into my vanguard brokerage account? Or is there still something to salvage here? I was curious what other FI chasers might do in my situation.

    submitted by /u/Sleepy_Bandit
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    Planning retirement accounts

    Posted: 01 Mar 2018 08:14 PM PST

    Assuming I go for financial independence and retire early, I'll be well below the required age to take qualified distributions from a 401(k), be it Roth or Traditional. Does it make sense to contribute to my 401(k) any more than to max out my employer match?

    Additionally, for Roth 401(k) vs Traditional 401(k), what would make up my retirement income? If everything is going to be from capital gains, would it make more sense to be contributing to a Roth 401(k), or traditional? I'm thinking that compound interest and tax savings now might help me more. 24F, current salary is 110k.

    All help appreciated!

    submitted by /u/GospelCamel
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