• Breaking News

    Monday, May 28, 2018

    Financial Independence 19M Started my own concrete company the day I turned 18. Now pulling in average 2.5k a week. Still in lots of debt but I hope to get out soon.

    Financial Independence 19M Started my own concrete company the day I turned 18. Now pulling in average 2.5k a week. Still in lots of debt but I hope to get out soon.


    19M Started my own concrete company the day I turned 18. Now pulling in average 2.5k a week. Still in lots of debt but I hope to get out soon.

    Posted: 28 May 2018 02:41 PM PDT

    Background: I come from a long line of tradesmen who all have built their own companies. My dad has always been hard on me ever since I was a kid, starting roughly around 8years old. None of that sit in the truck bs, more along the lines of get a shovel and sweat and come learn to read these plans and machinery. Brought me every single day in the summer and every single weekend and every single holiday for 12+hour daily shifts and those long commutes. Anyways he has taught me the trade in and out and I'm a young subcontractor.

    I decided to start my own thing the day I turned 18 and it was an EXTREMELY rough start. I was confident in my skill set but my clients weren't so confident hiring an 18year old. Anyways over the course of the year I've acquired quite a few positive ratings and my number of clients has greatly increased. After insurance, gas, auto expenses, employee wages, material etc I manage to pull in around 2-3k profit a week. I work roughly 80 hours a week as I'm my own accountant/manager/foreman/owner etc.

    It's been a rough and hard start even considering I'm not paying rent as I still live with my family. Lots of stress and physical tiredness but in the end I hope to get out of debt and find my own place. I maxed out my credit cards and got a loan for a truck etc so I went in balls deep. Things are finally starting to look up. Best of luck to any of you all out there looking to become financially independent! I hope I can one day have my business practically run itself.

    submitted by /u/Lupiyo
    [link] [comments]

    What is with the hate of Real Estate on this subreddit? (Meta)

    Posted: 27 May 2018 11:13 PM PDT

    Whenever real estate is brought up as investing or a side guide it's downvoted

    YES - it's not passive

    NO - it doesn't mean it's a bad form of investing or path for people

    Seriously the hate is unreal. The only path to success isn't 30% gross savings rate into SPY and 6 months emergency in Ally (i do both those things but I'd like to hear what other people have to say)

    submitted by /u/BokononGuy
    [link] [comments]

    ~$500k in stock, and I want to retire early. How?

    Posted: 28 May 2018 01:27 PM PDT

    I'm 31 years old. I got a job with a startup several years back, and the startup became successful, and got bought by a publicly traded company. I now have ~$500k of stock, ~$70k in my 401k and I make ~$160k per year. I save ~$15k per year currently, and another child is on the way. My companies stock is doing very well. In the past year my stocks value has increased by about 35%.

    I'm not sure what to do with my stock money. My goal is to try and use it so that I can retire early in 10-15 years. I was considering getting into real estate, as my dad has done really well for himself there, but it seems like now the price of houses have risen considerably, and maybe that might not be the best thing to do?

    I'm not a skilled investor, and have very little idea what I'm doing with the stock market or any of this. This is all very new to me. What should I be doing?

    submitted by /u/cakes4us
    [link] [comments]

    Buying vs Renting: My bay area experience by the numbers

    Posted: 28 May 2018 02:06 PM PDT

    Cross posted in /r/personalfinance

    First post here, hopefully I don't break any rules... There are constant discussions going into renting vs buying, but most of it deals in theory. I wanted to share my personal experience with this topic, from the perspective of someone living in the Bay Area, and get feedback from the sub in case I made some wrong calculations in here.

     

    The general perception seems to be that a) index investing and home investing are about equal in terms of returns / attractiveness, but as a commenter pointed out on the /r/financialindependence subreddit today, the answer is nuanced as it depends heavily on location: https://www.reddit.com/r/financialindependence/comments/8mny4i/what_is_with_the_hate_of_real_estate_on_this/ b) cash flow is generally the key consideration I see when comparing renting vs buying, or at least is what is typically modeled financially. I'm here to present some information based on my personal experience about those 2 topics today.

     

    I bought a single family home in San Francisco in October 2016, after renting in a rent-controlled apartment for the 2 prior years. Prior to this, I had been of the mind that I wasn't giving up much by renting, but when I ran the numbers... boy was I wrong. So I bought a house instead!

    Monthly housing expenditures

    Renting situation:

    Category $
    Rent -$3,200
    Utilities -$150
    Insurance Uninsured
    Total monthly cashflow -$3,350

     

    Buying a house in the Sunset (4BR, 2BA):

    Category $
    Price $1,325,000
    Down payment $260,000 (20%)
    Interest rate 3.25% 30yr fixed (Got in at a great time!)
    Monthly mortgage -$4,635
    Insurance, Tax, Utilities -$2,077
    Tax deduction on interest $1,300
    Rental income from downstairs in-law $1,400
    Total monthly cashflow -$4,012

     

    As you can see, with the benefit from tax deductions and renting a room, it ends up not being too different, even in a place like the Bay Area where the rent to price ratio favours renting.

     

    Income through investing

    I had to put down 260,000 for the house (plus some closing costs), which would have otherwise gone into some of the hottest years of the stock market, but buying still yielded substantially higher returns. Most of the reason here is due to the impact of leverage, but these (real) numbers really show the scale of this.

    Here's how it has shaped up after 19 months:

    Buying Renting
    Money invested $260,000 $260,000
    Expected yearly appreciation 14% (avg last 4 yrs was 18%) 20%
    Actual yearly appreciation 14% 25% (NASDAQ index)
    Appreciation $ after 19 months $305,000 $112,917
    Plus Principle acquired $34,084 $0
    Taxes / closing costs -$81,500 (5% closing cost) -$27,439 (federal + CA tax)
    Net gain $257,584 $85,478
    % return in 19 months 100% 33%
    % annualized returns 55% 20%

    Buying turned out to be a way better financial decision for me. And I'd argue that it will likely pull away even further from stocks after a few more years of appreciation. If the housing market slows, I'd likely explore refinancing to purchase properties in higher growth areas.

     

    I've been keeping an eye out for purchasing investment properties as a result to further my journey towards FIRE. After spending time modeling various property scenarios, my realization is that appreciation can be a much more significant wealth generator. It's a bit puzzling to me that so many investment property spreadsheets only account for rental income vs appreciation. I'd love to hear from you guys on what your thoughts are on my analysis - is there something I'm missing?

    submitted by /u/mack33g
    [link] [comments]

    Daily FI discussion thread - May 28, 2018

    Posted: 28 May 2018 04:09 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.

    submitted by /u/AutoModerator
    [link] [comments]

    Young 25 yo nurse looking for recommendations on FI!

    Posted: 28 May 2018 12:38 PM PDT

    Hello! I am 25, working as a RN in a HCOL city. I moved to the HCOL city to get experience in my field; I can see myself moving to a lower COL city in a few years once I've got the experience/acuity under my belt. I know you should cut down on your biggest expenses, but I walk to work/get groceries/gym, so the location is a great trade off for not owning a car (IMO).

    I really don't want to be a slave to working full time to get by (long-term). I have been contributing to my pension (MPP/CPP) since 21 when I started working. I've only been working full time for 1 year (but have been working approximate full time hours since starting my career as a casual). I'm finishing up my ICU training, and will have to return 1 year full time to my employers for paying for my training (so I'm in a guaranteed FT position until October 2019, where I can stay in the line or change lines at that point). Current income is ~$3-4k/month (depending on shiftwork rotation/shift premiums)

    Goal 1: max out TFSA. Goal 2: start RRSP? Goal 3: travel

    Current expenses: $1000/month: rent ($2000/month split with my partner) $300/month: food/restaurants $250/month: shopping/entertainment $170/month: phone/gym/Netflix/etc. $50/month: xmas savings for gifts/travel/etc. $375/month: vacation savings $50/month: emergency savings $500/month: TFSA confributions

    Current assets: $18,000

    Current debt: None (credit line & visa paid off) No car (use transit/borrow my partners occasionally/walk/bike)

    Looking for any tips & suggestions of what to do with my money next, to maximize growth, so I can achieve financial independence and possibly retire early (however I will have a great pension down the road, which is more dependent on working FT until ~65yo mark). I need to look more into how the pensions all work. I have always been the one in my peer groups who is "good with money" and I'm (slowly haha) teaching my partner about the benefits of paying off debt. They're coming around to the idea that having no debt is liberating, and is motivated to pay it off. However, I'm not sure what my next steps should be once my TFSA is maxed out.

    What should be my next steps or goals? Am I on the right track? Any tips/suggestions/recommendations/critiques?

    submitted by /u/AstronautLibby
    [link] [comments]

    Weekly FI Monday Milestone thread - May 28, 2018

    Posted: 28 May 2018 04:09 AM PDT

    Please use this thread to post your milestones, humblebrags and status updates 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!

    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
    [link] [comments]

    High income earner - how do you reduce your taxes?

    Posted: 28 May 2018 08:36 AM PDT

    I am curios if a married couple filling jointly is making more that $250K a year, how can they lower/avoid paying taxes?

    submitted by /u/tin369
    [link] [comments]

    Monday freedom

    Posted: 28 May 2018 07:37 AM PDT

    Real financial freedom is when you can sleep on Monday morning and others rush to work.

    submitted by /u/BusinessBuilder1
    [link] [comments]

    Maxing out 401k/Roth IRA while in business school

    Posted: 28 May 2018 01:26 PM PDT

    For those currently or previously enrolled in a two-year business school, is it possible to still contribute the full 18.5K and 5.5K to your 401k and Roth IRA, respectively? Aside from saving up these amounts and depositing them fully into your retirement accounts, is it typical that MBA internships pay enough for you to be able to save this kind of money? Or are you basically forfeiting those two years of retirement investing?

    submitted by /u/NegativePath
    [link] [comments]

    Looking for advice and any potential holes in our financial plan

    Posted: 28 May 2018 10:56 AM PDT

    Long time lurker, first time poster. Wife and I have been practicing FI principles long before we found this sub. We have always lived below our means and find joy in socking away our income into low cost index funds. It's nice to find such a strong community that mirrors our savings enthusiasm!

    Looking for advice and any potential holes in our financial plan. We have tossed around the idea of starting to purchase a few rental properties to supplement our safe withdrawal target (already 100k reits in Vanguard Roth) and to keep us busy post retirement. Is this a good strategy going forward?

    Goals:
    * FI/RE in 10 years with paid off mortgage
    * $3 mio net worth (assumes 4% real return at current savings)
    * Safe withdrawal $120k @ 4%

    Family:
    * Me 34
    * Wife 35
    * Son 20 months
    * Expecting 2nd child ~ year

    Important Details:
    * LCOL State (planning to stay long term)
    * Savings rate ~ 56% (2017)

    Salary & Benefits - $211k
    * Salary: Me (100k) + Wife (84k)
    * 401k Matching: 17k
    * Bonus (variable): 10k

    Assets - $1,545k
    * 401k - 839k (50% Roth)
    * Roth Vanguard - 237k
    * Taxable Vanguard - 119k
    * Cash - 60k
    * HSA - 36k
    * Home - 254k

    Debt - $127k
    * CC Debt - 3k (never carry a balance)
    * Mortgage - 124k (10 years left @ 3%)

    submitted by /u/FI2028
    [link] [comments]

    10 hrs a week at 25$/hr regularly invested at 6% return achieves 1M$ right at the 30 year mark

    Posted: 28 May 2018 07:06 AM PDT

    Much of my savings have come from part time tutoring, which in my area is 25/hr and super easy to find students (for math and physics courses). If you can find regulars, like the title says, it can hugely contribute to your FI path.

    submitted by /u/SloppyMoses
    [link] [comments]

    Part-time work after FIRE?

    Posted: 28 May 2018 03:27 AM PDT

    I'm 30 and hopefully 12 years out from retirement. The prospect of being at home with my kids is really enticing. I think (at least in the mid-term) after I RE, I would like to work ~20 hour weeks and hopefully get medical benefits. 1) I will get bored without this much work, and 2) benefits will improve my financial situation vastly. Is this possible and/or common? Are there complexities that come with employer-sponsored medical benefits for part-time employees?

    Or should I consider moving to a consultant arrangement and only looking for ~20 hour weeks? The massive swing in how to handle taxes has me nervous about this idea. Should I not be?

    Those of you who work after FIRE, did you continue in your current line of work or shift? If you continued, how did you move from a full-time role to part-time? How did your boss handle the transition? If you found a new line of work, what is it? Is working part-time and having benefits common in that field?

    submitted by /u/iaminternet
    [link] [comments]

    How many of you have side projects to provide extra income? What are they?

    Posted: 28 May 2018 09:34 AM PDT

    I love have some side projects on the go, and as I'm planning a new one (or two), I was wondering how many other people also had them. Maybe you're currently working and have a side project to help you save more and reach FIRE sooner, or maybe you're already retired and have a side project to give a little extra income.

    submitted by /u/throwawaybook2018
    [link] [comments]

    A totally obvious but counterintuitive reason for work ethic and FIRE

    Posted: 27 May 2018 07:22 PM PDT

    It's Memorial Day weekend and many of my friends are out drinking and enjoying their free time. I'm choosing to knock out some admin to set myself up for a strong work week after tomorrow. I'm often asked "why do you like working so hard?". When I reflect on the question, it's strange because I actually don't likeit. However, I know the more money I make and save now, the sooner I'll be able to FIRE and not work so hard (or at all). Thus, I work hard now because I don't like to work hard. Happy Memorial Day weekend everyone!

    EDIT: Wow, all I was saying was I work hard now so I don't have to work hard later and I thought folks here could empathize. I don't particularly hate my job but just want the freedom to not need the money some day. Not bragging or saying I'm better than anyone. Its a concept that many around me don't seem to agree with and that's ok. To each his own, thanks for the comments!

    submitted by /u/MungingisFun
    [link] [comments]

    Invest now or wait for a “sale”

    Posted: 27 May 2018 11:34 PM PDT

    Hello FIRE friends!

    I am a long time lurker, and first time poster. I have learned a lot from all of your wisdom so thank you all!

    My SO and I have a saving rate of about 50%, we have always been good at saving, previously just in a checking account, but in the last couple of years in a 60/40 portfolio.

    Because of previous years savings to a regular bank account we have an unnecessarily large buffer and I want to move at least two months worth of savings into our investment account.

    Now my question, I have heard people talk of keeping some money reserved as a back up for when the next market crash hits, so that we have some extra cash to invest in the "sale".

    To me this kind of strategy sounds like market timing, but I wanted to hear what you guys think of the strategy, is it viable? Or is it better to invest the money ASAP?

    Thank you!

    submitted by /u/scandinaviaFIRE
    [link] [comments]

    No comments:

    Post a Comment