Financial Independence The Psychology of Money (long read) |
- The Psychology of Money (long read)
- My Wife and I crossed a major retirement goal today. She is 36 and I am 38. We both wanna be finished at 45.
- F.I.R.E.? Seems F.I.R will have to do.
- Crossed 500k Net Worth
- Daily FI discussion thread - June 05, 2018
- Some people don't get it
- BiggerPockets Money Podcast and a /r/Financialindependence shoutout
- Port-folio review, looking for long-term financial independence
- I'm 21 years old, struggling with "now vs later". Do I hunker down and sacrifice some QoL for long-term benefits, or do I "live it up" while I still have my youth?
- Withdrawal Strategy
- How am I doing?
- Do you actively trade stocks?
- Trying to hold back from dipping into retirement 401k at 55 right now, not working any job now.
- Delaying FIRE: Trading Off Higher Salary for Work Life Balance/Longevity?
- Is it worth it to buy a “Cheap” house?
- Advice for a 21 Year Old
- What degree would be the most beneficial for a FIRE life?
- Help me with my 10-year plan to reach FI - new Grads
| The Psychology of Money (long read) Posted: 05 Jun 2018 05:22 AM PDT http://www.collaborativefund.com/blog/the-psychology-of-money/ Stumbled upon this article I thought this sub would appreciate. I found myself nodding in agreement as I read, often highlighting quotes and passages to revisit later. It consolidates many concepts around investing, frugality, simple living and financial independence that as someone who only recently subscribed to this mindset wish I could have read 10 years ago. And yet, as I copied the link to share with some younger acquaintances, it also seems like the type of article a younger me would have just disregarded immediately. Such is the irony, youth being wasted on the young etc. 😏 [link] [comments]  |
| Posted: 05 Jun 2018 08:23 AM PDT So this morning I got to login to our retirement accounts and see the 7th figure for the first time. This is the money in Roths, 401ks, a regular old investment account and does not include our emergency fund or regular checking. The Roths are maxed for the year and we are almost there with the 401ks. Then it is on to paying off the house. I know it is just a number, but we earned it and I feel like I am one step closer to doing whatever I want. If anyone cares, the key for us was working together and agreeing on what we spend. We also give ourselves a little money each month that the other one cannot judge how it is spent. Basically we each have our own tiny slush fund for frivolous purchases that we would never buy with our joint money. It works really well for us. [link] [comments]  |
| F.I.R.E.? Seems F.I.R will have to do. Posted: 05 Jun 2018 06:17 AM PDT Thought I'd post about my experience, so that some younger users that manage to find their way here have some added perspective on the importance of starting early. About me: I started learning about the world of finance, planning and frugality pretty late in life (and I still know diddly-squat); It was paycheque-to-paycheque for the longest time as I enjoyed what life had to offer. Reflecting back, the travel was well worth it, but the day-to-day waste, eating out all the time, ordering in, buying the crap I didn't need - was not at all future thinking. I was still making these mistakes into my 40's. My old man tried - "Just put $10 away a day" - from when I started working part-time at age 13 (Anyone remember Ponderosa Steakhouse? :D ). Holy hell, if I had only listened. If I had started early, and often, I wouldn't be in the position I'm in today. I think a lot of teens/young people think they know everything - I sure thought I did. If a stranger told me the same thing, I probably would have put more stock into the advice; something about rebelling against your parents even when the advice is pure gold. I still know little about investment, but I know a TON about how to save - and that, I believe, is the more difficult part at any age. The Reason: Because I started the investments late in life, I have to put a heck of a lot in there per-annum to 'catch up' to the lesser amounts I would have had to put in 30 years ago. Go ahead - go into a compound interest calculator and punch in $100, pick a percentage rate, and see what the difference is between 20 years and 45-50 years. That's how much more I have to put aside not just for F.I.R.E (the early part is all but negated at this point), but simply to retire at 65 or 67 and not live like a hermit. My actual retire $ figure doesn't really matter - everyone has their own goal. The Advice: If you're still young, live your life! But attempt to ween out the costly (see MMM post: https://www.mrmoneymustache.com/2011/04/15/getting-started-3-eliminate-short-termitis-the-bankruptcy-disease/ ) things that don't actually change what you want to do, or your overall happiness. Surround yourself with positive people that have similar goals. Understand that you can never start that 'nest egg' too early. The Why: There may come a time when you've been in the workforce, and for whatever reason, the day-to-day grind is seriously affecting your mental health. By saving and planning early, you put your future into your own hands and not some random corporate entity tying you to a desk for hours a day. Having a pile of money growing for you helps to mitigate fear and change. I'm sure most of this was rambling, but if I can help even one person on the path to F.I.R.E. the post was worth it. [link] [comments]  |
| Posted: 04 Jun 2018 04:36 PM PDT I hit a big mile stone this week, crossed $500k in net worth. I am 38, 2 children, with a wife who works part time to focus on the kids. Late 20s and early 30s were tough as we were starting out and had our children in our 20s. We lived a decent life but had trouble saving. I was a Marine in my mid 20s and in search of a good career after that. I ended up going back to grad school at 32. Best decision ever. Graduated with almost no savings, but no debt either. I have had a great job ever since and we have been saving a ton to make up for lost time. After the first year we bought a house, and for the past 3 years focused on building up our retirement and 529 accounts. Net worth is about $220k in home equity and the rest in retirement, 529s, and a bit in taxable accounts. Last year we saved 42% after tax income and the year before that was 33%. My only advice to younger readers is that my best ROI was going back to school. Had I done it earlier, probably when I was 28 or 29, I would be a lot farther long than I am. That being said, both my boys will be able to graduate college debt free and I will have the option to FIRE by 50 with a very comfortable retirement. This sub has been a great place for information and encouragement. Thank you to all who contribute! [link] [comments]  |
| Daily FI discussion thread - June 05, 2018 Posted: 05 Jun 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]  |
| Posted: 05 Jun 2018 10:08 AM PDT |
| BiggerPockets Money Podcast and a /r/Financialindependence shoutout Posted: 05 Jun 2018 03:56 PM PDT So, who here was the guest on the podcast that gave the shout out? A link to the show: https://www.biggerpockets.com/renewsblog/biggerpockets-money-podcast-23-a-mini-retirement-road-trip-in-your-20s-with-becky-and-noah/ [link] [comments]  |
| Port-folio review, looking for long-term financial independence Posted: 05 Jun 2018 03:48 PM PDT Hello, Thanks to some luck and hard-work, I ended up joining early an US company which did well in the past years. It leaves me single, without debts and a large amount of money to invest at 29 years old. I never had to deal with that kind of money before and wanna make sure I'm doing this correctly. I'm also an EU citizen which raises some additional questions. I'll first go over my assets, then how I'm planning to allocate them, with a bunch of questions at the end. Current retirement assets:Taxable:
Big private company is the one that did very well, the cash comes from a sale of its stock. It all sums up to a few million dollars. My 401k:
No company match as I'm unemployed at the moment. I intend to roll this over into a TIRA. My Roth IRA:
Additional data points:Note that half of my net worth are stock options for this company. Those options will be taxed two ways:
While I intend to keep working in my industry, I do not intend to do that full-time anymore, unless my situation changes. I'm pretty frugal, but I intend to stay in an HCOL area for the foreseeable future. Relocating back in the EU (most likely permanently) is entirely plausible. I plan to rollover my 401k into a Traditional IRA, so that I can re-invest it. Planned asset allocation (US):
Many questions, hopefully some are straightforward:
Any question let me know, thank you! PS: Sorry for the use of a throw-away account. [link] [comments]  |
| Posted: 05 Jun 2018 09:09 AM PDT Hi, I'm living in San Diego working as a software engineer making ~135k/yr. (Not as impressive when you look at my effective tax rate..) My dream has always been to live in a nice apartment and just have good things. Not crazy extravagant things, but nice things. Everything I've owned has been hand-me-downs up to this point, my last apartment was a mess of 50 different styles and aesthetics. I sold all of my stuff to move out here to SD and have to start fresh, which is kind of what I've always wanted. Anyway, I'm not saving as much as I want to and I accrued some debt during the move (it all happened really suddenly and I didn't have the savings to cover it). Here's my rundown: 1,200 in savings (drained it before the move) ~7,000 set aside for taxes (I don't know what I'm doing) 2,742 in debt @ 8.1% 2,271 in stocks ~4,000 in a roth Major Expenses: 2,325/mo for rent I don't own a car, so no vehicle related expenses. I take the bus to/from work. Total comes out to something like $30/mo. Now I know what you're thinking - where's all your money going? Well, most of it is going to furnish my apartment. I need everything. Dishes, hangers, dressers, bed, bedframe, desk, bookshelf, etc. It's wayy more expensive than I ever thought. I also send my mom as much money as I can spare, she's in a really bad place. I've also tried to make charitable donations. For example some of my good friends have put up some GoFundMe's to study abroad - things that help them accomplish their dreams, and I feel so grateful for being in such a great position myself that I want to help my friends do the same.. Also I eat out a lot more than I should - there're just so many awesome restaurants and new cuisines (I'm from the midwest) to try! Anyway I'm getting pretty lengthy here, sorry. Here's the kicker: This is a 6 month contract which may or may not be renewed. I believe they'll renew it, but I'll need to plan for the worst, right? I want to be financially independent, but I don't know what age is reasonable to shoot for. I could be super aggressive and be financially independent early, but I'd have to sacrifice some of the freedom and fun I'm experiencing right now. Is it worth it? Is there a middle ground? I know it's ultimately up to me to answer those questions, but what do you think? Thank you [link] [comments]  |
| Posted: 05 Jun 2018 02:04 PM PDT What's the preferred approach to get 4% out of taxable account after FIREing? Dividends? One large sale of stock at BOY or EOY? Sale of stock spread across the course of a year? I read the FAQ but didn't see any proven strategies listed. [link] [comments]  |
| Posted: 05 Jun 2018 02:58 PM PDT 19 y/o male. Living with family currently so expenses are very low. Im paying for community college out of pocket (about 2-3 grand a year). My new job does have 2k a year in tuition reimbursement so that will really be great. Ive been working on saving some money for about 2 months now. Currently I have: No debt New to me car with good MPG. Extra SUV that is great in the snow but 10 MPG. 1000 in checking (make about 1100 every two weeks) 300 in savings (100 added every pay. 1.5% APY) 1750 in vanguard VOO (250 added every pay) My hard expenses are Car insurance 1300 a year Phone bill 1000 a year (Unlimited Data use maps daily at work) Rent 100 a month (Grandparents are awesome people) Tuition 2-3k a year (Tuition Reimbursement should lower this) Soft expenses Food; 200-400 a month Gas 100-400 a month (Driving the SUV in the winter) Misc 100 So im earning about 2200 a month and spending 1100-1400 a month. Saving 700 a month. Just looking to see where I stand. Im not deadset on the way im doing things. Any suggestions/discussion are welcome. Thank you [link] [comments]  |
| Posted: 05 Jun 2018 08:50 AM PDT Sometimes I wish the efficent market hypothesis/passive investing was never discovered. I think stock investing is a tremendously intellectual pursuit, it's really a shame that I can't enjoy it as to me its little more than gambling. I invest in RE, which for obvious reasons is active. What do you actively invest in? [link] [comments]  |
| Trying to hold back from dipping into retirement 401k at 55 right now, not working any job now. Posted: 05 Jun 2018 12:21 PM PDT I have to live unexpectedly the retirement lifestyle I envisioned being frugal as a necessity unfortunately. I'm afraid I'll run short of money? What if I live until 90,can't have that. I was laid off couple months ago and I swear I never want to be in the workplace again. PTSD from years of working too much and too hard. Seriously,I am burnt out for now.I did try looking but At this age and having some savings,I wasn't expecting to tap into it until at least 2 more years.It's growing nicely and I didn't want to stunt the growth.But life threw a wrench at me and knocked me off my horse.(not literally) and I don't want to climb back on. Walking is fine. [link] [comments]  |
| Delaying FIRE: Trading Off Higher Salary for Work Life Balance/Longevity? Posted: 04 Jun 2018 07:30 PM PDT The purpose of this post is to see what everyone's opinion on salary vs. benefits is. I just started working at a F500 company straight out of college. Here is a breakdown of salary+benefits: Pros -$60k Salary -Eligible for 401k contributions right away (6% matching begins 1.5 years from now) -ESPP 15% discounted shares (10% of salary is the maximum contribution, $ is put into an account that makes purchases 2x a year. It's up to a total of $15k per year-I obviously cannot hit that amount with $60k salary) -4 weeks PTO+8-10 national holidays -In nearly a year of working there, I have worked less than 10 hours of overtime, no weekends, etc. -Working remotely 3x a week/good coworkers The question is whether or not staying is worth the trade off of job hopping for huge salary increases over the years. I've had requests for 6-8 phone interviews between when I started working and now (sent out apps just to see what's out there). I can likely get a job paying $70-80k if I aggressively tried right now. Then, $90-$100k a year or two after that. If I stay at this company for the next 10-15 years, I expect to be at $180-$200k. However, one thing to note is with only commuting 2x a week, I feel much more well rested, and health is something that is VERY important to me. I do not feel the "dread" in the morning that many people experience. I feel like staying at this company long term will likely delay my FIRE date and I am not passionate about what I do. It's somewhat interesting, but not something I'm crazy about. I am a very ambitious person and eventually want to open my own business and quit corporate America. I feel afraid of 2 things: 1) growing too comfortable in this company/role and never truly pushing my boundaries by starting my own business 2) taking the leap and job hopping over the next few years, only to find myself in jobs with higher pay, but more stress, shitty coworkers, long commutes, etc. I want to get some input and feedback from older people. Have you ever been in this type of situation with relatively good work/life balance, but lower pay? Is it a grass is greener type of situation? My thoughts given my current life situation: I would not mind delaying FIRE by 5 years for a higher overall quality of life over the next 20-30 years. [link] [comments]  |
| Is it worth it to buy a “Cheap” house? Posted: 05 Jun 2018 02:01 AM PDT I have currently been saving for a down payment on a house lately and I have around 20k + 6 months of living expenses. I have been looking around and although I can afford to live in my area (The Seattle area) I have been seeing houses along the coast for under 100k. I work remotely for my career so I don't mind moving somewhere else. Logically I cannot justify buying a 2/3 bedroom house for 600k and deal with all the craziness that is Seattle when I can get a similar sized house and pay it off in 5 years. But anytime I bring it up to my girlfriend she just says "those houses are cheap for a reason" and "that area is poor" . Note that the neighborhoods I am looking at have very low crime rates and decent schools, they are just in the country. So, has anyone left the city to purchase a house and what are the things I should look out for? I understand that the resale value is higher in the cities but I just want a place to grow some roots and get that FIRE [link] [comments]  |
| Posted: 04 Jun 2018 11:17 PM PDT Hi! I'm a 21 y/o with a net worth of ~10K who will graduate from college in one year and work as a teacher. I started following FI blogs at the age of 20 and it is a lifestyle I am interested in committing to. My concern is this:
Thank you for reading!!! :) [link] [comments]  |
| What degree would be the most beneficial for a FIRE life? Posted: 05 Jun 2018 02:31 AM PDT I will be separating from the military shortly and have been doing some research on what it will take to become FI. My career choice out of the service does not require a degree, leaving me with 36 months of free tuition. I'm not looking for advice on a degree that will make me the most money salary wise, but a degree that will give me the knowledge to make the right decisions with my money. Right now, I picture Accounting as the way to go about it to learn about tax breaks and what not. FWIW, I also plan on owning a small rental property(3-6 units, depending on how things go early on). Before it gets brought up here, it has already been suggested to me that I leave the GI Bill for my child in the future, but that is not an option since I have not served long enough (10 years) to transfer it to family. I've also been told not to even bother with school and just learn everything for free on the internet, but I'd be missing out on the over $100k of tax free housing the government will pay me while I'm in school full time (~$3000/month). With that being said, what would you major in if you were in my shoes? What does a degree path for Financial Independence look like? [link] [comments]  |
| Help me with my 10-year plan to reach FI - new Grads Posted: 05 Jun 2018 12:32 AM PDT My fiance and I are graduating college in a year and a half and want to plan things out early. We've run into interesting podcasts about FI and liked the idea of having control over our lives when we have kids - maybe in 10 years? Here's a high-level plan. Our household income (pre-tax) will be over $200K starting out. This would probably increase 10% every 2 years. These are relatively conservative estimates. Not counting stock/bonus money from (planning to put this towards college debt). Years 1 - 5: - Live modestly - 35% of paychecks go towards a managed portfolio (i.e. Wealthsimple). We'll probably be workaholics at this time, so having this managed for us would reduce stress and newbie mistakes. - 15% of paychecks into a savings account for a property investment (to rent-out and profit - our family is in the real-estate game, so they would be seeking good opportunities for us). Years 5 - 10: - X% of paychecks into the managed portfolio (should X be greater than, less than, or equal to 35%?) - Purchase first property - Y% of paychecks into a savings account for a second property investment (Y = 50% - X perhaps) Year 10+: - Purchase second property - Leave job(s) - Manage properties full-time (I would love to do this) - Migrate managed portfolio to something more serious (less transaction/management fees perhaps) - Profit off properties and investments, put the equity towards new properties and investments - Seek new business opportunities and adventures Would appreciate advice (i.e. Is this feasible? Potential failure points? Unrealistic saving expectations? Other opportunities we should consider, and anything else, thanks!) [link] [comments]  |
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