Financial Independence Today's the day! |
- Today's the day!
- What are your favourite affordable luxuries?
- Three Year Update
- Daily FI discussion thread - March 09, 2018
- FI is driving me nuts at work. People who have REd: How did you finally decide to RE?
- I'm a 38 year old business owner. I'm an ex convict with 9 years of prison "experience". I am both of these things and as diametrically opposed as they may be, they are my story.
- Weekly FI Frugal Friday thread - March 09, 2018
- TODAY IS IT: I joined the millionaire's club!
- Planning on spending a year traveling - Questions/Concerns
- My net worth just surpassed the mileage of my car!
- When planning for financial independence, how are you estimating health care costs in retirement?
- FI & Healthcare Costs & Medical Tourism
- How does MMM's "shockingly simple math .. retirement" take into account income increase with time, kids, family etc?
- Just realized that t-401k contributions reduces your income for t-IRA purposes! Should I re-characterize my roth IRA contribution?
- Anyone miss the good old days when you were young and moving up in your career?
- Is it worth down-sizing from house to condo/townhouse to achieve FI?
- FI'ers with small businesses
| Posted: 09 Mar 2018 07:27 AM PST Welp, Today's the day! I turned in my resignation letter this morning. 30+ years of soul-draining sales admin work. Thanks to the wealth of information and advice in this subreddit, I started planning for early retirement about 3 years ago. Political shit happened at the office yesterday, and it felt good to get up from that conference room table, smile quietly, and think to myself, "Fuck it. I'm out", knowing confidently that I can do this. I am in my mid 50s, with $900K in investments. Spouse has already retired, has a similar amount invested, and we are debt free. We'll be fine. Sweet Liberty! (not my usual id - TMI in that history file...) [link] [comments]  |
| What are your favourite affordable luxuries? Posted: 08 Mar 2018 04:57 PM PST Whether the change happened in the name of frugality or a desire for better quality, what are your favourite affordable luxuries? Here are some of mine:
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| Posted: 09 Mar 2018 09:24 AM PST I've been posting my family's net worth updates annually for the past few years (see 2015, 2016, and 2017 updates); I find sharing my plans and progress to be helpful for giving myself a heading check, and hope this community finds my inputs to be helpful. We're deep into what the FIRE community calls the "boring middle" where on paper, we're just accumulating wealth. But I don't find that boring at all, because this is where a lot of life stuff happens! I find it helpful to talk about the things going on in our lives and how that impacts our financial plans. Current ages: 32 and 31. We have two young children and are not planning on any more. Our childcare costs are fairly enormous at >$15k per year (although I know a lot of you folks in HCOL areas deal with much worse). We reduce those costs somewhat using a dependent care FSA and by going fairly deep down the churning rabbit hole, since our daycare takes credit cards. Combined pre-tax income: About $174k (~6.7% increase). I'm an engineer who is starting to transition from a technical to a management role in my organization, which is a new challenge. But I feel so financially secure at this point that I kinda look forward to giving leadership a shot and helping to develop my team. My wife is a CPA at a large regional accounting firm who is working towards being a partner. Assets: Cash/emergency fund: ~$50k (42% increase). We are about halfway done with a major home renovation. My wife's sister has lived with us and paid rent for the past decade, but now that we have a couple little munchkins running around, we want to give her a more peaceful/private space from the craziness, and give each of our kids their own rooms. So, we took out a $50k home equity loan (shown below), and are converting a 1000 square foot detached garage/workshop into an apartment for my sister-in-law. It should be complete within the next couple months, but for now that leaves us a little more cash flush than normal. Tax advantaged Retirement/HSA accounts: ~$366k (45% increase). A bunch of factors led to a big boom here. First, obviously it was a good year for the market. I also repaid the last $9k towards a TSP loan I took out when we originally purchased our home (it wasn't mentioned as a debt in previous updates since it was money owed to myself, so had no effect on net worth calculation). Finally, now that we're done having kids we're giving a HDHP a shot again, so we are again contributing to an HSA in 2018. 529 accounts: ~$25k (56% increase). We're contributing about $3k/year for each of our children, and will slowly ramp that up over time. Our plan is to cover ~75% of the total cost of a public university in our state, including housing and food. Taxable investments: ~$12k (20% increase). No new contributions, just investment gains. Vehicles: $21k KBB value of three cars (-32% decrease). No new cars, the same three we've had in previous updates. For whatever reason, the KBB depreciation this year was rough. We don't have any real plans to replace any of them soon, although I do idly salivate over all the new electric cars coming out these days. But the longer I can wait, the better! Home: MSA home index, our home value is now ~$492k (5% increase). Zillow estimate is currently $518k (0.5% increase). I have not currently factored the effect of the home renovation into my estimated home value. I'm fairly certain that the effect of adding on a new apartment with a bedroom/living room/bathroom/kitchenette will have a very positive effect on its value, and will probably conservatively assume that we'll get at least 50% of the cost of doing the renovation (likely much more in reality). We've gotten the work permitted and the county should be reporting it as finished space in the future, so I'll probably re-evaluate its value next year. Debts: Mortgage: $288k at 3.125% (3% decrease). Slowly ticking down. Home Equity Loan: $49k at 4.75% (new debt). This is a 15 year loan which we used to finance most of the home renovation. The interest is a bit too high for my comfort level, so the plan is to probably accelerate payments on this once the renovation is complete and we stop hemorrhaging cash. Net Worth Estimate: $629k using MSA Home Index (22% increase), $655k using Zillow (13% increase). Not a terrible year overall, considering that we're in the midst of the big renovation. Current plans going forward: Continue maxing out our Roth IRA's. We're up to ~$21k/year towards my TSP (including match), and ~$12.5k/year towards my wife's 401k . Plan to have both maxed out around 2020. Continue to contribute about $3k/year to both kids' 529s. Finish this home renovation and work to rebuild our cash/start repaying that loan. Working towards $200k combined income by 2020, but we might be running a bit behind that goal shrug. Our plan has been to hit FI by about 2030 (~age 45 for us with about $1.5-2M Net Worth) - our current trajectory actually has us on pace to hit it before then, but I'm sure some recession will eventually knock us back a few years before then. Or at least that's what I've been saying for a few years now... Anyways, there's our current update for 2018. I open the floor to questions! [link] [comments]  |
| Daily FI discussion thread - March 09, 2018 Posted: 09 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. [link] [comments]  |
| FI is driving me nuts at work. People who have REd: How did you finally decide to RE? Posted: 09 Mar 2018 09:42 AM PST Hi, all. First, here's a rough summary of my numbers:
I use credit cards for almost everything, and my CC spending summary from the last two years to date was $63,000, so $31,500 a year. That was living comfortably, never worrying about spending, including travels/vacations. Recently turned 47, single, childfree and likely to stay that way. A few months ago I started to think about FI more consciously. Adding private insurance and taxes, $50,000 a year might be a good rough estimate for what I would need if I stopped working. Even $60,000 would be less than 3% of my total assets. I started to think that I might be considered FI. And being FI started driving me nuts at work. My current income is roughly $140k plus bonus, and the job is cushy enough that I think most people would envy it. But as awful as it might sound, I don't enjoy working a job (anymore). Half of me wants quit tomorrow, yet half of me feels like it would be a shame to give up the earning potential. I go through these thoughts a dozen times a day:
So, people who have FIREd from a good paying job, how did you make up your mind to go throug with it? And if anyone has any thoughts regarding my numbers, I would be very interested in reading them. Thank! [link] [comments]  |
| Posted: 09 Mar 2018 07:06 AM PST If it matters to anyone here I am innocent of the charges that put me in prison for eight years. The one year parole violation, that was all me. I'll share the details another time. The most relevant part of my prison experience is the fact that I did not waste my time there. I educated myself both formally by securing my degree and informally by reading, reading, reading. I walked out of those prison doors at 32 years old a completely different person from the childish 23 year old boy who walked in. I was hungry to succeed and I was given a golden opportunity in the form of a low level position in the family business. My starting salary was 25k / year but I was living with my parents and spending next to nothing. I learned every facet of the business and I rose through the ranks. My salary jumped to 35 k / year then to 44 k / year then 55 k. Business was booming, I was growing with it. I developed new products, helped jumpstart online sales and I brought in what is today our largest private label account. My salary jumped to 105 k / year. I moved to the two bedroom apartment of my dreams and I kept moving forward. But all was not well. My relationship was failing, I was drinking too much and I will forever be eight years behind in many ways. I will always be met with curios glances and even downright derision when I am unable to do some seemingly simple task. The thing is I often come across these tasks for the first time in my 30's when they should be old hat but they aren't for me and I've instinctually learned to avoid these types of scenarios in a kind of reflex ego protection. There's a complex relationship between an ex convict and his environment and the complexity grows in relation to each year spent locked away. Not only does the world naturally change and those changes are all held in abeyance, but even should the outside world remain exactly the same as when you went in, the inmate does not grow with it. Coming home means having grown apart from the world you now must again fuse with. It's jarring. And prison is never a good excuse to those around you. The moment that word is uttered you become less then, dirty in a sense. The fact that you're innocent is either disbelieved or simply ignored. Your shortcomings become less about the time you missed and more about some kind of general personality flaw you must possess. After all you were in prison. This can be infuriating in times and it has caused me problems. Specifically a fight in a bar. I should've walked away, I really never should've been there in the first place but I was there and I took the bait and it put me back in prison for yet another year. This almost broke me. I was incredibly lucky to get just a year, they were originally talking about giving me seven years. But something intervened. Without getting into all the details there were a few minor miracles that got me out of those doors just in time. In time for what? To purchase the family business. In January 2017 I signed the papers and I was now 1/3 owner of a very lucrative company. My salary last year, pre tax, was roughly 600k. It's an SCorp so the new Tax Law will benefit us significantly seeing as much of that salary is pass through. As crazy as it may sound to anyone dreaming of this kind of money, my life remains difficult at times. That is partly why I'm here. I want Financial Independence. I currently have 145K in an online account. I am weary of investing after a bad experience in the past. I've spent most of my time building my business and essentially putting my life back together. I haven't spent enough time really educating myself on investing. I'm somewhat embarrassed to admit my ignorance, I would think most people making this kind of money have a relatively firm grasp on the principals of investment. However, instead of avoiding this topic, I'm going to confront it today. I now have a two year old daughter and it's not just about me anymore. I want to save for a down payment on a home. Other than that I want to make more than the 1% I'm getting from my online savings account. Any and all suggestions will be much appreciated. Thanks! [link] [comments]  |
| Weekly FI Frugal Friday thread - March 09, 2018 Posted: 09 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. [link] [comments]  |
| TODAY IS IT: I joined the millionaire's club! Posted: 09 Mar 2018 02:55 PM PST Net worth broke a million today. Holy shit! It's hard to believe. Even harder to keep quiet and tell nobody! [link] [comments]  |
| Planning on spending a year traveling - Questions/Concerns Posted: 09 Mar 2018 10:30 AM PST Hello, My wife and I are planning are planning on taking a year off to travel starting the summer of 2019. The plan is to live in 4 different counties on 4 different continents for 3 months each and ultimately decide if we want to settle down overseas or move back to a more desirable location in the United States to raise our family. This has long been a dream of ours and we want to do it before school and stuff gets in the way. We have a 10 month old child and just found out we have another on the way. Current stats.
Other considerations:
A few questions:
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| My net worth just surpassed the mileage of my car! Posted: 09 Mar 2018 03:22 PM PST
Maybe I should've waited until Milestone Monday to post this, but fuck it. Today was a good day for the markets, plus it was payday, and I've been looking forward to this milestone for a while. This might be my favorite milestone that I've hit thus far, tbh. It took me somewhere between 3 to 4 years since the beginning of my journey in mid-2014 to get to this point. Can't really tell anyone in real life, so decided I would post it here. Nothing special about me, I'm just an average employee earning a modest income (60-65k) in a low cost of living area living far beneath my means. Discovered FI in 2014 when I started working, and have been building my net worth slowly ever since. FWIW, my vehicle is a Nissan from the early 2000s. I include it in my net worth on Personal Capital (it's the $2.5k under "other assets"). So I guess if you don't include vehicle equity in your net worth, I technically haven't really hit this milestone yet, although I'm close. When did you guys hit this milestone? Any other unconventional milestones you guys have hit or are aiming for in the future? [link] [comments]  |
| When planning for financial independence, how are you estimating health care costs in retirement? Posted: 08 Mar 2018 09:02 PM PST I see that AARP has a health care cost calculator. Has anyone found it to be a good estimate of expenses? And while I'm at it, if for example it says we need $300k, is that $300k figure in present dollars (you need to have $300k TODAY and grow it by the inflation rate to keep up with the growth in future costs) or in future dollars that are adjusted for inflation along the way ($10,000 this year, $11,000 next year, $12,000 the year after, and so on until the sum of all of those expenses total $300k). Thank you in advance for your help! [link] [comments]  |
| FI & Healthcare Costs & Medical Tourism Posted: 09 Mar 2018 02:32 PM PST Unplanned life threatening events like cancer, car accidents, floods, home damage, or any un-planned physical accidents can cause major bills at the hospital that can wipe out 10+ yrs of savings. For the older folks above age 40+, how do you deal with rising health care costs? I recently heard ChooseFI Medical Tourism podcast. It has convinced me to go to Mexico for dental work and elective surgery even if I already have an employer-sponsored health insurance. [link] [comments]  |
| Posted: 09 Mar 2018 12:07 PM PST Talking about this: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ Let's say I earn 50k per year and I save half. So I have to work for 17 years to retire. But can I not get a pay raise? Maybe I make 200k after 4 years. How is all that factored in? [link] [comments]  |
| Posted: 09 Mar 2018 02:37 PM PST I contributed $5500 to a roth IRA in 2017, expecting to make more than $72,000 and be ineligible for a traditional IRA. So my numbers for 2017 ended up being: $77,000 total income $15,000 t-401k $2,500 roth 401k $5,500 roth IRA The 15k t-401k contribution reduces my MAGI to $62k, making me eligible for almost a full $5.5k contribution to a traditional IRA. Although I'm still not 100% sure if I want to re-characterize my IRA contribution from a roth to tradition. I'd save $1.5-2k in taxes this year, but I don't need the cash right now. Some more info: 24 years old living in a state with high income tax (CA) $50k in 401k($20k roth, $30k traditional) $12k in Roth IRA $30k in Savings Account (looking into buying a rental property) $12k in Stocks $10k in Checking Account I'm expecting to make ~85k in 2018. I know everyone says to contribute to pre-tax accounts because expected income in retirement is usually lower, but my family has a few assets($3-4 million) which might significantly boost my income in retirement. Any advice for me? [link] [comments]  |
| Anyone miss the good old days when you were young and moving up in your career? Posted: 09 Mar 2018 10:12 AM PST Sure, being retired and wealthy has its advantages but recently I have been thinking a lot about the good old days. When I was in my 30s and trying to turn the world on fire. I worked hard and put in long hours but I was in charge, had lots of interesting duties, great responsibilities and really enjoyed working with my coworkers on interesting corporate projects. Now life is too easy and the I miss the good old days when I was moving up the corporate latter. Can you relate? [link] [comments]  |
| Is it worth down-sizing from house to condo/townhouse to achieve FI? Posted: 09 Mar 2018 09:53 AM PST I bought this house about 3 years ago, a 3 BR/2 BA, 2100 sq. foot in a suburban-ish area (although it is becoming more happening because of new development), and have sunk a lot of money into it on repairs and upgrades. Mortgage is $194,000, the value is about $320,000. My housing payment is $1636 (incl. property taxes). I think, once all the miscellaneous expenses related to my house are calculated, including capex and maintenance, I must be spending well over $2000/mo. That includes lawn care ($100/mo), utilities ($200-500/mo depending on the time of year), insurance, tree trimming and branch removal, pest control/removal, random repairs, HVAC service, etc. I should budget for things like replacing the AC, water heater and roof as well. When all things are considered, I wouldn't be surprised if my "real cost" is $2500 or more. I know I should sit down and figure all this out exactly but that's the ballpark. Housing is very tight in my city. I've ruled out renting, as I want more control over my living situation. I like the idea of downsizing to a smaller home, but those are hard to find. I was browsing online and found some nice-looking condos and townhomes in a great neighborhood. They are less expensive than my current home, plus I could save a lot of money on maintenance and repairs. Was looking at some of these and found I could get a very nice townhome for $200-230k (2 BR, 1200-1400 sq ft), with a total payment of $1500 or so (includes HOA). I would imagine the maintenance cost would be a lot lower than my detached single family home. Moving is a lot of trouble, and there are transaction costs to consider. I do like the extra space and privacy I have right now. There is a chance my wife and I will have kids, although it is not certain. If we do, we would probably want to upgrade our housing at that point. The house we're in right now is certainly large enough to accommodate our needs now and well into the future, but it is excessive for us now. I'm torn because I don't know how long we really would be happy in a smaller space, but it seems so wasteful to live in a big house for two people. I've reached a point where I am burned out on my career and desperate to reach FI. If I can achieve a significant savings it seems worth it, but I want to make I'm not being short-sighted and considering the costs of making a change. [link] [comments]  |
| Posted: 08 Mar 2018 06:42 PM PST For FI, stock markets and real estate are most commonly talked about, any experiences and comments from those who accomplished or on path to FI with small businesses ? [link] [comments]  |
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