Financial Independence An unexpected benefit to paying off your mortgage |
- An unexpected benefit to paying off your mortgage
- Daily FI discussion thread - March 29, 2018
- Coming Clean: How Financial Independence Came More Easily & I’m Not Exactly Retiring.
- FIRE-ing to be a Caregiver
- Discussing death as a way to stymie jealousy over early retirement
- How is your healthcare in your country? (post-Fire)
- The future of work - the gig economy, artificial intelligence
- Those who are FI - do you now spend more or less time thinking about money?
- My journey begins...
- You guys wanna read about some clueless people who are most definitely never going to FIRE?
- bored engineer seeks new life calling
- It may be time to start questioning the unquestioned exuberance towards Vanguard.
- Life insurance + Social Security Survivors Benefits
| An unexpected benefit to paying off your mortgage Posted: 29 Mar 2018 10:46 AM PDT Recently, in mid January, it hit 7 degrees Fahrenheit and we had a pipe burst in an upstairs room. It showered water out of the top of the pipe in spectacular fashion, spraying up into the air and soaking a nearby wall and ceiling. This happened early in the morning while my wife was at work. When she got home, she was frozen water in the driveway. She went in the house to see water raining down from a can light. She called me and I tried to walk her through turning off the house water, neighbors got involved, I headed home, and the city was called to cut off the water. By the time I got home it was still running, probably for a total of three or four hours before it was discovered and then the city got there. I went upstairs to see the damage, and it turns out the ceiling had collapsed into that room. I called Dalworth while I was still on the way home, realizing they were about to be very busy when more people got home. They made it out that night and got vacuums and fans going for damage remediation. I called the insurance, Allstate, and they set up an adjuster to come out that week and get started on the estimates of repairs. I selected a contractor and he came out the next day to have a look. The adjuster took a stab at figuring the square footage of our weird floorplan and ultimately gave up and hired her own contractor to figure it all out. The contractor didn't miss a trick. Damage to actual stuff in the rooms was minimal, about $500. A check was cut the next day after I inventoried everything, and arrived quickly, so this was all wrapped up by the end of January. However, the collapsed ceiling, ruined carpet, and mostly the flooded wood flooring came to almost $30k. The insurance company also quickly cut a check and the contractor began work. Then the trouble began. Because I have a mortgage with US Bank (though most modern mortgages work this way now), they were added as a payee on the insurance check. So it was made out to my wife and I, and US Bank. This meant that to cash it, I had to endorse it, and mail it to US Bank. More specifically, they use something called InsuranceClaimCheck.com as a clearinghouse for this stuff. I had actually had a roof replaced before so I was familiar with how they have to endorse the check and will only pay out a bit at a time as the contractor does the work. However with a specialized clearinghouse involved, this has become a nightmare of Kafkaesque proportions. There are four different documents they require, in addition to the check itself. Other than the check, you can upload it to their website, so it didn't seem like it would be too bad. 1) They need an Insurance Adjuster's Worksheet. This was no problem, I sent them what the adjuster had given me, which had a breakdown of all the costs and work to be done. 2) They needed the contractor's W-9. So I had to first print out the W-9 form, and get it to the contractor, who then filled it out and signed it, gave it back to me, so that I could scan it and upload it to the website. So much for the convenience of online. 3) They needed the contractor's signed contract. This was a bid by the actual contractor. I got that as a PDF from the contractor, so I was able to upload that directly. Convenient, right? 4) They needed the contractor's waiver of lien from each contractor. This is a document stating that the contractor won't put a lien on the home for any reason other than nonpayment. The mortgage company is trying to protect itself from extra liens, and they control the money, so they are protected. Seems simple enough. The contractor sent me his insurance policy to forward to them. He was pretty responsive and got all this done by mid February. Well, the mortgage company got specific and wanted the waiver of lien to be their own form filled out by the contractor. Actually, filled out by by all contractors, so I'm glad I used only one and didn't try to sub it out myself. It would have been far cheaper but 10x the hassle. In the mean time they cashed the insurance check and held the funds. It took them something like 8 or 9 business days to indicate that they had even received the check. I sent it by regular mail and I was getting concerned that they were trying to hold the check or that they had not received it properly. Finally the check was acknowledged online, and I had gotten the document of signed waiver of lien to them, and the status changed from "waiting for documents" to "checks will be disbursed after four business days". This was a relief because the contractor was well underway and hadn't been paid yet. He's a local small businessman and was out of pocket for significant materials and labor already. I wrote him a check for the deductible to provide some relief. Then the status changed back to waiting on documents two days later. The contractor's signed contract (3 above) was signed by the contractor but apparently we had to sign it too. They called me at dinner to inform me we needed to do this. The call was a bit suspicious to me because it wasn't even a properly formed return number. With 20k plus on the line, I wanted to make sure it was legit, so I checked when I got home and sure enough it showed the information was needed. In the mean time I noticed a weird phone number on the account in addition to mine and my wifes. In the mean time I signed and went to upload the contract again, but had trouble logging in. Red flags going off. So I called them to make sure some sort of fraud hadn't happened with that phone call the previous night. I asked them to remove the mysterious phone number. I did a google search on the number but it turned out to be the main line at my work (which I never call or use). They said they knew their website was having problems. So false alarm on the fraud (well, read on). I managed to get the document uploaded finally. A day or two later, they processed the document, and another day or two later they cut the check, according to their online system. No direct transfer option exists. About four or five days later I get a letter from them in the mail, so I think "great, the check is finally here". Mind you it's about two months since the incident at this point, and the contractor is almost finished. The terms of the contract were 1/3 up front, 1/3 when wood floors are finished (they are) and 1/3 at the end. All he had seen so far was the deductible, about 1/6 of the total. But, in fact, the check wasn't here. It was just a note acknowledging the change of phone number. Of course they removed the wrong one, but that's beside the point. Mail doesn't take 6-7 days to arrive. They hold things, even notifications of security information. Then they lie about it, even if you call them out on it. All so they can hold the check, all so they can continue to draw interest on the money while they sit on it. As of today, 3/29, the check STILL hasn't arrived. I called them and they said I should wait a day or two, and if it still doesn't arrive, they will stop payment and cut me a new one. Work finishes tomorrow. Pay off your mortgages folks. I plan to accelerate that part of my plan posthaste. TL;DR - if you pay off your mortgage, you won't have to deal with the mortgage company when an insured event occurs. Mortgage companies have become a massive PITA in this regard. [link] [comments]  |
| Daily FI discussion thread - March 29, 2018 Posted: 29 Mar 2018 04:08 AM PDT 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]  |
| Coming Clean: How Financial Independence Came More Easily & I’m Not Exactly Retiring. Posted: 29 Mar 2018 05:06 AM PDT This seems to be part of the shift towards greater transparency in the FIRE community. No waffling about being "middle-class" or having a normal job when the underlying numbers are unclear. Hoping more bloggers can follow this example. [link] [comments]  |
| Posted: 29 Mar 2018 07:36 AM PDT Anyone else in the situation? I feel like I'm aiming towards FIRE... to be a caregiver. I'm 27 and on track to lean FIRE at 40 but regular or FAT FIRE at 45ish. More likely I'll go PT sometime after 40. But I feel like my early retirement will be to be able to be a caregiver. Both my parents are retired (at typical 62) and have since had to go through losing their moms and being their caregivers the last few months and taking them to appointments. My mom has been staying with her mom every other week (switching off with her brother) since October. It's grueling and I don't know how someone working FT could have enough time to take care of aging parents who don't live in the same town as you. When they get to the point they can't take themselves to doctors appointments or need help with daily living/chores they either need a service (expensive!) or their kids. Both my parents are late 60s. I was born very late since they had trouble getting pregnant. By the time I FIRE, they'll be mid to late 80s and if they're still living definitely getting to the point of needing help. My husbands parents are mid 50s but Mom has been a lifetime smoker and Dad has major health issues already so odds are they will also need help at that point. I feel like when we FIRE it won't be to travel or anything it'll be to have time to care for aging parents. I definitely love my parents and am willing to care for them and help them out but it isn't easy at all and very stressful to be a full time caregiver. We may have a couple years where everyone is healthy, but like with my parents, once one grandparent started getting ill and having needs, it was like one after the other. My parents saved well and have long term care insurance and enough to cover nursing home care if needed. But my husbands parents barely have anything saved at all... I feel like because we'll have money at that point we'll be guilted into paying (by his sister or other family). This may sound awful but we're saving for OUR retirement and OUR kids schooling... not for someone who didn't plan for retirement. I guess FIRE for me sounds taxing instead of enjoyable knowing what likely will come by that time in our lives. Anyone else planning for this or had something like this happen? [link] [comments]  |
| Discussing death as a way to stymie jealousy over early retirement Posted: 29 Mar 2018 11:40 AM PDT It's a pretty common sentiment here that discussing early retirement with non-FI-minded people is a bad idea, since it's not unusual for people to think that it's impossible for a regular person. However, I recently had an interesting chat with a colleague on this topic - he was of the mindset that it's "impossible" as well, until I made an offhanded remark that I'd be retiring "until the money runs out". Normally, people take this to mean that you'd go back to work, but he interpreted it as electing to end my life at that point, and he could come to terms with how that would work. I think that most people understand that some people hate their jobs, and that some want to get out of the rat race at all costs. Claiming that you're retiring at 40 will make people jealous, but if you start discussing the more morbid side of things, most people can rationalize that you'd be able to save enough money for at least a few years' worth of expenses. My colleague started pondering this option as well, and we ended up discussing ways that he could trim back his spending to increase his SR. At this point, he was pretty receptive to cutting out on some luxuries now in order to buy himself some extra time in retirement later. Of course, I don't advocate teaching people to just off themselves when they run out of money, but I feel like this could be a way to start introducing people to personal finance (and, perhaps, eventually FI). Any thoughts on this? [link] [comments]  |
| How is your healthcare in your country? (post-Fire) Posted: 28 Mar 2018 05:32 PM PDT I never knew how expensive the cost of health care in USA was until I started reading this sub, it has been eye opening for me. There seems to be so much stress and worry people wanting to FIRE in USA have to go through. This makes me wonder how much other people from non USA countries pay for their insurance once they FIRE and have no employer to pay for their health care. I am dual Canadian/ Hong Kong citizen I will make a list of what it is like for health insurance given I don't receive any additional subsidies for no/low income. In Canada, our health care varies province by province, but in general the health services are publicly run and you pay a fixed fee of maximum $100 a month. This covers all health care except dental and medicine. The downside of this is long waiting times for non-elective surgery and to see specialists. i.e. 3 years for knee replacements, we also get taxed a lot while working. Coverage only starts once you have lived in your province for 3 months. I have never paid a single dollar to visit the GP, or hospital visits; only to the pharmacist. i.e. I broke my ankle and paid zero dollars , I did wait 3 hours to get an X-ray, cast and see the ER doc though. In HK it is a bit more complicated system as the health care is a mixed public/private system. Under the public system, it costs around $15-$25 a day to stay at a hospital. This costs includes doctor visits, surgery, room and board, and medicine. Visiting the GP and specialists in the public hospitals is also $15, but the wait times are long because over 65 years old can get heavily subsidised visits and they like to see doctors; also visits to see public hospital specialists or getting CT/MRI scans is a long wait (like 3 months for non-emergencies). A visit to a regular GP at their own private clinic costs around $40 which includes medicine. A private specialist clinic costs a lot more at around $100 a visit. However, I can pay supplementary insurance with 80% coverage for around $1000 a year. The pros of a mixed public private system is that I can choose to go private or mixed if I don't feel like waiting. The public hospitals are excellent for emergencies and long term care (like dialysis, stroke, and cancer) but not for general aches and pains. i.e. 3 day stay of emergency appendicitis surgery costs $60; my uncle stayed had kidney transplant + 3 months stay in isolation ward ICU (very private sealed room!) ; he paid $15 a night. Coverage is for life once you are a HK permanent resident; I know several people who moved back to HK after diagnosed with long term diseases because the doctor visits, treatment and medicine were "free". HK tax is really low too. Now, I love visiting USA and had aspirations to move to the west coast once I FIRE. But ever reading this sub, I have come to realize that is never going to happen and I rather just travel to USA for several months at a time while I am still covered by travel insurance. [link] [comments]  |
| The future of work - the gig economy, artificial intelligence Posted: 29 Mar 2018 10:45 AM PDT https://www.mckinsey.com/global-themes/future-of-organizations-and-work/what-is-the-future-of-work I found these articles after googling the future of work and reading posts on FI reddit. I thought I'd share it here since I feel like it also relate to FIRE. I see a lot of posts about creating the ideal work environment whether that be volunteering post FI, barrista FI, having FU money to quit on a whim etc... I also think that the goal for most FIers falls under this bigger goal to create a society with a better work-life balance. These articles tackle the possibility of what work could be in the not so distant future. [link] [comments]  |
| Those who are FI - do you now spend more or less time thinking about money? Posted: 29 Mar 2018 11:04 AM PDT Fairly self-explanatory title. If you're like me, and in the accumulation phase, it's hard to go a single day without checking on the market, my spreadsheets, expenses, etc. When you're FI, is it easier to just trust the math and let it ride? Or does the fact that you're entirely dependent on your portfolio make you that much more hawkish over it? It'd be nice to spend a little less time thinking about money. [link] [comments]  |
| Posted: 28 Mar 2018 07:42 PM PDT Hey guys! First time poster here but I have been following for a little bit now. I just wanted to make a post and say that my journey begins in May. I am graduating college and have secured a full time position making 46k with a insurance company post graduation. (Not the most money in the world but for my first job I am very happy.) I only have taken on about 15K in student loans by doing the community college route. I am going to be doing a ton of studying for the next couple months and will have a plan in place to maximize my savings while I'm young (23) so that I can get off to a great start. I wanted to just thank everyone on here for being a great source of motivation for me and good luck on all of your journeys. [link] [comments]  |
| You guys wanna read about some clueless people who are most definitely never going to FIRE? Posted: 29 Mar 2018 02:55 PM PDT This is some cringeworthy shit right here: http://money.cnn.com/2018/03/29/retirement/no-retirement-savings-millennials/index.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_latest+%28CNNMoney%3A+Latest+News%29 Be happy that you're at least a little smart. [link] [comments]  |
| bored engineer seeks new life calling Posted: 29 Mar 2018 06:54 AM PDT 30 y/o, married, no kids. me and wife are very frugal. I make 100k, wife is about to quit bc her job bc it pretty much sucks her soul (constant OT, bad management etc) and I don't blame her. I find engineering to be less exciting and I'm contemplating a shift in career (wife says I have too many career aspirations: helping people with finances, real estate , photography, flipping houses, becoming a teacher) FINANCIAL SITUATION No debt. Our house / cars are paid off. We have one rental that brings in 800$/month (net). 180k in retirement account. 170k in taxable accounts. I also have my real estate license and have helped clients buy/sell, and also flipped a few homes on the side. I find that I have alot of hobbies and things that I enjoy. I've coordinated Ramsey's FPU class bc I like helping people, so I interviewed to be a financial adviser with Schwab (but they said I'd have to give up my RE license) so I backed out in the final round of interviews (although I should have finished it through and seen where it went). They said starting salary was 42k/year. I have enjoyed showing houses as a realtor most of the time but flaky customers the past few months (while holding down a full time job) really made me not want to do real estate full time. I enjoy teaching people about different things, so the idea of teaching has always appealed to me (elementary / middle school ). I traveled alot in the beginning of my career and did photography ALOT while I traveled, got some attention and did some photography for weddings, magazines etc. photography I've done lately is just houses that I'm helping clients with or houses we've flipped. Has anyone left engineering for another career on hopes that they would like it? What happened? Are there ways I could combine some of these into a single career? Wife says she'll support me in a different career bc our expenses are very low (30k/ year). We are saving to buy more rentals so we can be fully financially independent, and if I switched careers to a less paying job I know we wouldn't be able to save as much to buy another rental, so part of me just keeps saying "keep your head down, save as much as you can and buy rentals until you're FI" [link] [comments]  |
| It may be time to start questioning the unquestioned exuberance towards Vanguard. Posted: 29 Mar 2018 07:54 AM PDT I've posted before about concerns about Vanguard ability to manage the billions in daily inflows and outflows of their funds and whether or not shares might be allocated incorrectly with funds and funds of funds (lifestyle type funds). I'm not a Vanguard hater, but I have concerns. It seems others are having concerns as well as Vanguard has had techincal issues as documented in this WSJ article. In the 2000's there was unquestioned exuberance towards real estate and then 2008 happened. I just have a fear that if human error or software error resulted in Vanguard's funds not actually holding the underlying securities correctly we could be in for another financial disaster. [link] [comments]  |
| Life insurance + Social Security Survivors Benefits Posted: 28 Mar 2018 05:21 PM PDT It has recently occurred to me that I may not need all of the term life insurance that we needed when we originally bought the policy. Here are the numbers: Current NW: 1.6M Current cost of living: About 70k plus another 15k in health insurance costs if it weren't employer subsidized. Current term life policy for 1M -- which was probably appropriate when I bought it. 3 kids all under 8 years. My thinking is now: Assuming 85k annual need, I'd need about 2.4M at 3.5% annually. (Which means we'd need about 800k insurance.) However, the ss survivor's benefit would kick in for the first decade when the kids are still under 18 -- providing as much as 60k per year at family max. So our draw those first 10 years or so would only be about 25k per year from investments. For simplicity, let's say the cost of that is 250k. By that time, the remaining 1.35M will have grown to over 2M -- even using bonds and other less volatile instruments. So all of this to say that I think I have too much life insurance. My gut feeling is that reducing it to about 600-700k would be fine. Mathematically, I could probably almost get rid of it completely. Thoughts? The life insurance company quoted me some reductions, and it seems to be fairly linear. (i.e. 50% reduction in benefit = ~50% reduction in premium.) [link] [comments]  |
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