Financial Independence Pretty FI (for a car guy) |
- Pretty FI (for a car guy)
- Lost a parent too early to cancer and the plan going forward
- Daily FI discussion thread - June 29, 2018
- Weekly FI Frugal Friday thread - June 29, 2018
- what are the smartest financial steps you wish you had taken/had taken earlier?
- Looking for some financial guidance from some "FIRE" minded folks.
- Passions vs. Paychecks - Evaluating a job offer
- IRS announces postcard-size form 1040 for next year
- Why so little talk about post-retirement strategy?
- My "financial physical". Can I retire soon based on these #'s?
- FI Snowball
| Posted: 29 Jun 2018 08:39 AM PDT A day may come when they pass the Motor Law, and I shall be an outlaw, driving my brilliant red Barchetta, from a better, vanished time, Fire up the willing engine, responding with a roar! Tires spitting gravel, I commit my weekly crime… But it is not this day! What then are good cars for FI or FI-adjacent car guys? Compared to the average purchaser, we have more assets (and can absorb larger shocks) and more time (to work on cars), but want lower total cost of ownership. In general we don't finance, we work on it ourselves, and it's not our daily so it can sit while parts come from eBay. Some thoughts on stuff in the ten year old range that car guys target: Miatas: Overpriced / Not cheap anymore. All bought up for Spec Miata and track says. For some years, you can get a same year Boxster (!!) at the same price. MR Spyder may be a better choice. Boxsters/early water cooled 911: Underpriced. IMS failures can now be easily mitigated, and the 90s Taurus styling hides cars with great balance and the old hydraulic Porsche steering that can't be had anymore at any price. If anything breaks, it's a paperweight. WRX/Evo/Cobalt SS/SRT-4: Overpriced. Previously owned by twenty-somethings who drove them hard and modified them on the cheap. Finding an unmolested WRX is like finding a virgin in a Harvey Weinstein movie. C5, 350Z: Underpriced. Common and thus cheap as they were built before the recession when fast cars were still popular. They share significant components, to include engines, with more common cars/trucks that were built in the millions. Parts are cheap and simple. Mustang/Camaro: Fairly priced, under-appreciated. Someday we will look back on these cars like we now look on the Supra TT and FD RX7: era-defining cars with supercar performance that came out of humble family car dealerships. Today's ZL1 and GT350 are future classics. German sports sedans: Great drivers. Tendency towards electrical gremlins and random suspensions seizures. Many people have bought one, few have bought two. Classic cars: No depreciation whatsoever, look great, sound great, and easy to work on. They handle horribly. An old muscle car will go around a corner faster on a trailer pulled by my truck than it will under its own power. Nissan GT-R: Ferrari performance. Ferrari reliability. Ferrari maintenance costs. One can dream, probably a nightmare. Gallardo: Bit of a random one here. I know a few owners. Actually an Audi underneath, so merely mid-2000s German reliability instead of 90s Italian reliability. Much of the switch gear/window motors etc. is actually garden-variety VW stuff. Not as fast as you might think though. What would you buy in your stage of FI/RE? [link] [comments]  |
| Lost a parent too early to cancer and the plan going forward Posted: 29 Jun 2018 08:39 AM PDT My mother recently passed away from cancer about 20 years earlier than we would all hope to live. We've been her caregiver for the last 2 years so this hasn't come as a surprise but has had an effect on my life view somewhat. I've been one of the many here quietly learning and saving towards FIRE while enjoying a really great life missing out on nothing that is important to my wife and I, but minimal spending on the rest. My post is a quick rundown of my situation which aside from the tragic loss of my mother is otherwise very fortunate financially, and I am looking to make a big decision that is both emotional and logical and thought this community is one of the few places I can test my thinking. Prior to all this I held jobs in financial services which not only paid well but also has given me some insight into prudent investing and the financial planning world. That said, I'm not a CPA and keep somewhat rough budgets, at best. Situation: I'm 36 yo, married with 1 kid, another on the way. Working in a new industry in a job I really like for less pay than I use to make but have not concerns about paying the bills. We own a two family home worth approximately $800k with $270k remaining on my 15 year mortgage. Retirement assets slightly over $700k, and cash/individual account assets > $200k. I've been and plan to continue maxing my 401k and 2 IRAs annually, and when I use retirement calculators with an aggressive retirement age of 55 for us the results look pretty strong. That age is completely arbitrary to me, but it does represent financial independence at an early enough age to me. No car payments, or bad debt worth mentioning. I just inherited half of my childhood home and about $450k of cash. I'm currently renting out the home to a family for $3k/month and agreed to purchase the other half of the family home from my sibling as they live far away and have no intentions of moving closer. I think the cash inheritance will cover buying out the other half but not by a huge margin. So far so good. Now over the last few years my thinking has been to continue renting out my mother's home indefinitely (I'm already doing all of the landlord duties) or maybe someday move into that home. It is in a nearby town with significantly better schools and we generally like the plot but the house is very old and would be a massive step down from out current living space, and also doesn't really have the room we would want to step up to for our next home. So here's where the rubber hits the road. Doing completely ill-informed napkin estimates I think we are looking at anywhere from $350k-550k to bring this house up to a great but not lavish level and would add at least 1000sq feet and two bathrooms to the equation. I would need to take a mortgage out for this, which is not something I love to consider, but my thinking is that my current property will significantly cover it's total costs, and the new mortgage would in the worst case be about the same as what we pay today. I did an excellent sheet (haha thanks autocorrect, I meant an "Excel sheet") that has some cash flow scenarios and they are all cash flow positive, just not as positive if we weren't to do it. My guess is that given the neighborhood the home is in, and the prices that larger well updated homes go for, we would recoup the renovation investment without much trouble if we ever decided to move and needed to sell. But as I said, this decision is certainly somewhat emotional. Seeing my mother pass away too young as someone who was living the old school FIRE life of frugally skrimping and saving, and then facing the reality that she somewhat tragically handed over her retirement nest egg to her children - has me somewhat emboldened to take some calculated risks if it is for the benefit of building a great home for the family. And I think generally speaking this is a good idea on paper, but curious how others would feel, as I rarely see posts about home renovation/building. Even if I were to get glowing support nothing is going to happen for a year or two, but these things have such long timelines I'd like to start planning confidently or to come up with an alternative plan. I owe you a million for simply reading this far. Thanks. Cash flow sheet with two scenarios - current state and future state w/ a 400k mortgage (with current cash this would be close to a $600k project) https://docs.google.com/spreadsheets/d/1K9dFLQkQkawfNlRM-rXAg12aTkaGznVWYhNW3DNVuZo/edit?usp=sharing [link] [comments]  |
| Daily FI discussion thread - June 29, 2018 Posted: 29 Jun 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. [link] [comments]  |
| Weekly FI Frugal Friday thread - June 29, 2018 Posted: 29 Jun 2018 04:09 AM PDT 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]  |
| what are the smartest financial steps you wish you had taken/had taken earlier? Posted: 28 Jun 2018 07:53 PM PDT I am 33 yo who aspire to be financially independent by the time I'm 50. I lurk this subReddit and many others. I contribute 5.5k yearly to Roth IRA, and save as much as I can. I try to do everything I can now to get to my goal. The part that I am uninformed and afraid of is not planning enough now to make sure I can enjoy all of the savings I have accumulated. My question to all of you is what are the smartest financial steps you wish you had taken/had taken earlier? Please be specific. I'm looking for actual well calculated advice like "I wish I had invested on a Roth 403b earlier instead of paying down my student loan at % because __" instead of "I wish I had saved more". Thank you in advance. [link] [comments]  |
| Looking for some financial guidance from some "FIRE" minded folks. Posted: 29 Jun 2018 12:29 PM PDT Age: 31.5 (will be 32 in Nov) Job: Software Developer Current Salary: 65K USD My life long dream (well since the time I worked my first crappy job) has been to retire much earlier than normal AND have the power and financial means to actually enjoy said early retirement. I am married and have one newborn daughter less than a year old. I have a college education (and the debt to go along with it) and we recently bought our first home. Assets: Manufactured home and 1 acre of cleared land with utilities ~ 105K USD 401K with a balance of 44K USD Stock holdings worth 30K USD Two vehicles, one worth about 10K and the other about 8K Liabilities: Mortgage on the home and land ~ 72K USD Student loan debt ~ 26.5K USD Auto loan on one vehicle ~ 3K USD Personal loan ~ 5K USD Furniture credit ~ 5K USD Medical bills ~ 3K USD Those are the "quick and dirty" of anything that I consider to be significant in terms of my net worth. I currently invest 12% (15.5% with emp match) of my salary into the 401K. I am looking for insight as to what is smart financially for me. I am being rather risky on my stock investments because at 32, I feel I can afford the risk and also feel that if I want a shot at a pretty healthy, early retirement... I need to make some risky investments. My current trajectory just doesn't seem to place me retiring early. The longer part........ So I bring in about $3,950 a month after taxes and and all payroll deductions (401K, medical, HSA). My monthly expenses look like this: Comcast $150, Verizon $130, Penelec $250, Water $150, Heat $100, Car Ins $150, Student Loans $430, Mortgage $650, Furniture $120, Personal loan $100, Gas (car) $120, Food $400, Baby $100, Wifes exp $400, That comes out to $3250 of the $3950 I have monthly... leaving about $700 a month extra. We normally will spend anywhere between $100 and $150 a month eating out (which is a bit absurd) but it is figured in there. On a regular month, I have about $500 left over just paying what is described above. I'd like to try to do a little something to "branch out" if you will in terms of my investing for retirement. Taking a gamble on the stock market last year was my first attempt and has been very successful (so far). $6000 turned into nearly $40000 in one year and with the pull back I'm still up nearly 30K on that original 6K investment. That stock is high risk with a lot of upside, but being high risk it can also crumble. This stock alone has the potential to make me even a lot more money than it already has. I have my sites set on another potential high risk stock, and am thinking about loading up into it a little bit. Esp since I can "play with house money" a bit on the stock I'm currently ahead on. However, I'm not sure it's the best play because: I'm cash starved. Of the $500 a month I have left over.... a lot of it finds its way into things we need. Clothing, cleaning supplies, house repair type things, birthday parties.... just those "not part of most normal budgets" items that can eat into that $500 real quick. Even being mindful, I'd probably really only wind up with $200 to $300 at best to really save out of that $500. SO in order to have a way of investing, it would mean selling some of the stock I already own or scaling back on my 401K. I do not want to sell any of the stock I own now, I don't think the tax implications play out nicely for me. I am a lot more interested in scaling back on the 401K BUT I want to get an idea of how my 401K projections could be impacted by doing so. So far I haven't found any nice online tools or spreadsheets to show me that. Does anyone know what that math looks like. For example, I'm investing roughly 10K per year in my 401K now, assuming an existing balance of 44K what would the projections look like over the next 30 years leaving it go on as it is now, vs scaling my investment back to 6% (8.5% with emp match)? I could take that 6% and invest it into other retirement vehicles. But I want to see what my 401K performance will potentially look like before I reduce my investments there. I'd like to branch out into some more high risk and moderate risk investments (likely ROTH type) and see where things go. IMO not dipping at least some part of my investments into the high risk category is unwise. I currently see myself being "debt free" in about 15 years provided I have no major complications (lose my job, get sued, or so on). So by around age 47 I can begin investing a large portion of what will likely be a much larger salary (still at the low end of the software developer pay scale) into preparing for retirement. I will likely be able to save between 30K and 50K per year for each year I work past 47. Allowing me to wind up with at worst, a savings account heading north of 500K when I hit age 60. I do not really have interest, at this point, in working past age 60. Given the ability, I could likely see myself retiring somewhere around age 50 to 55. Financially I don't think that work out unless I hit a big winner on a high risk investment. For example, the risky stock I'm in now could easily wind up trading at 100X the price it is now some 10 to 15 years in the future. That would put my holdings just under 3M USD and even with taxes, that would be enough to easily call it quits at 50 and wait on touching 401K or social security until I hit age 65. BUT that's a long ways away and several hail mary's in the making. Not likely, but possible. So the real TL;DR is: At age 32, I make about 65K a year and invest 15.5% of that into a 401K (44K USD existing balance). How much does cutting my investment down to 8.5% affect the potential "ending balance" of my 401K? I can't find a good online tool or spreadsheet shows me that. Maybe that pullback only is the difference between the account being worth 1.5M vs 1.3M or maybe it's more like 1.5M vs 1M. I want to know what that reduction in investment may potentially cost me in account value at age 65. I'll then use that information to decide if I want to scale back 401K and look into other investments, or just leave the 401K alone. [link] [comments]  |
| Passions vs. Paychecks - Evaluating a job offer Posted: 29 Jun 2018 10:59 AM PDT This sub always seems to give good, level-headed career advice when it comes to evaluating job offers and taking both FIRE and work-life balance into account. So I come with my own situation looking for opinions from strangers! My dilemma is that I'm considering leaving what I once thought was my dream job for one that offers considerably more money. My passions are running, sports, and being outdoors. I feel lucky to have spent the last several years working as a software engineer for a sports & fitness company. I get to combine my STEM skills with products that align with my hobbies. Honestly though, my "dream job" still has its shortcomings. I feel undervalued, often bored, and not growing as quickly as I'd hoped. I've also gone after promotions and tried to transfer to new teams, only to be denied. A former co-worker reached out about an opportunity at a local start-up, I interviewed and got a great offer. The company itself appears strong with great leadership and engineering talent. My role would be relatively similar as a software engineer. The team would be smaller so that would mean more responsibility but also more learning and growth opportunities. The downside being that I find the product less interesting. It is essentially a marketing/advertising platform. Now for the important numbers- Current Job Compensation: $95,000 Commute: ~15 min one way (nice downtown office) PTO: 30 days total New Job Compensation: $135,000 Commute: ~40 min one way (far from city center) PTO: Unlimited Equity Taking the new job could help me reach my FI number in 8 years instead of 14 with my current role. The additional income would also hopefully allow my wife to reduce her work hours as we plan to have kids in the coming years. The biggest sticking points for me are leaving products I feel passionate about, essentially doubling (or more) my commute, and the general uncertainty/fear of new responsibilities. I am definitely leaning towards the new job because more money leads to more options down the road. I'm just not sure how exactly to put value on enjoying the products/projects I work on. Add in a more painful commute and I'm stuck deciding if chasing a larger paycheck is worth it. TL;DR Should I trade a job aligned with my passions but where I feel undervalued for a ~40% raise and commute 2-3x longer [link] [comments]  |
| IRS announces postcard-size form 1040 for next year Posted: 29 Jun 2018 09:31 AM PDT https://www.cnbc.com/2018/06/29/treasury-irs-announce-postcard-size-form-1040-for-next-year.html Currently weighing a mega Roth contribution, but how would the IRS know I did it correctly if the tax return is so simplified? Thoughts? [link] [comments]  |
| Why so little talk about post-retirement strategy? Posted: 29 Jun 2018 09:29 AM PDT Hi all, I just discovered this community. I'm 34 and I figure I've got ~$1.5m in assets. People mock me when I talk about early retirement, so I'm happy I found like minded people. Reading through all these posts, I'm wondering why there's not more talk about how to live after retiring. Is it because everyone here agrees on the same strategy, split your assets into stocks and bonds, and withdraw at a safe rate? Can someone explain to me why I wouldn't put all my money in a stock like AT&T whose dividend can be gotten at 7% sometimes, and live off 7% instead of 4% or lower (since I'd be retired for more than 30 years)? Thanks for helping a noob! [link] [comments]  |
| My "financial physical". Can I retire soon based on these #'s? Posted: 29 Jun 2018 10:50 AM PDT Goal/Question I want to retire early and travel the world for the next 5-10 years (Asia + Europe) until finding a new country that fits me and maybe move there permanently. How can I achieve this fast and how much should I have in assets to retire? My expenses are low I believe. Details Age 32, USA, single, no kids / never will have kids Income - $55,000/yr $45,000 yearly job $10,000 side business Assets Cryptocurrency $314,000 House $270,000 401k $133,000 Roth IRA $91,000 Savings account $84,000 Car $8,500 (2013 model with only 65k miles) Debt $103,000 mortgage at 3.5% Networth $797,500 Expenses Mortgage / insurance / taxes $885 Food $250 Vacation savings fund $210 New car savings fund $160 House + yard maintenance $110 Electric $80 Entertainment $75 Car insurance $70 Gasoline $60 Dog $40 Medical Insurance premium $40 Internet $45 Car maintenance savings fund $30 Phone $30 Water $20 Clothing savings fund $20 Total $2125 per month ($25,500 yearly) tl:dr; Income $53k/yr, Networth $797k, Expenses $2,115/mo. How can I within the next few years? [link] [comments]  |
| Posted: 29 Jun 2018 11:01 AM PDT So, I never knew the name of it before, but there's a concept out there called the Debt Snowball. The idea is to pay off your smallest debt first as opposed to the highest interest first. The cool thing about it is that it offers some earlier psychological wins on the path to being debt-free. I'm thinking, why not do the same thing on the path to FI. You would break down all the things you would want covered, then organize them from cheapest to most expensive. Starting at the easier end, you throw money at something concrete. Rather than a really abstract milestone like $100k or $750k, you could start saving towards your lifetime supply of water. A few examples:
What do you think? [link] [comments]  |
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