Financial Independence What does this board/community look like in a crash? |
- What does this board/community look like in a crash?
- What is the biggest financial mistake or loss that you have experienced on your path to FIRE?
- Daily FI discussion thread - June 27, 2018
- After maxing Roth IRA & 401k should I invest taxable or mega backdoor Roth?
- Weekly Self-Promotion Thread - June 27, 2018
- I'm officially on the right track, and I wanted to say thanks.
- Senioritis and baggage about hard work
- Income/ Savings and boosting it! (UK)
- Bewildered by health insurance choices (US, California)
- A Journey to Asia in Search of FI/RE
- We all take it for granted, but what’s a good article/blog post to show a curious outsider that index funds are better than actively-managed funds?
- I need some career advice
- What do you pay in health insurance *while* still working--and how does this play into FIRE plans?
- Analysis of when to start Social Security Payments
- Reminder to tax loss harvest
- Is buying a home a good move, FIRE-wise?
- Active FIRE Slack Community?
| What does this board/community look like in a crash? Posted: 27 Jun 2018 05:22 AM PDT Over the last 10 years, we have all experienced a rather steady climb of the market. There are many (myself included) who's biggest anxiety has been a two month stretch of the market trading sideways. So what happens if/when there is another 2008 like event? Do people jump ship and lose faith in the whole FI idea? I know it is easy to point to a spreadsheet and a SFR and use all the data, but I think it would be easier said than done if your networth is shedding tens of thousands of dollars a month and maybe a few hundred thousand in a year. Those who have been through a crash with significant amounts invested - what was it like for you? Did you change your strategy or were you able to weather the storm? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| What is the biggest financial mistake or loss that you have experienced on your path to FIRE? Posted: 27 Jun 2018 05:58 AM PDT Around here, we often report to each other on our milestones, our gains, wins, and good fortune. I'm curious - what is the biggest financial mistake or loss that you have experienced on your path to FIRE? Hopefully, others can learn from it. I'll go first:
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| Daily FI discussion thread - June 27, 2018 Posted: 27 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]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| After maxing Roth IRA & 401k should I invest taxable or mega backdoor Roth? Posted: 26 Jun 2018 08:08 PM PDT I've already maxed my Roth IRAs for the year and am putting enough in the 401k pre-tax every month to hit the IRS pre-tax limit by the end of the year. Also maxing our an HSA however most of it gets used for medical expenses so paying those out of pocket is another option. My emergency fund is fully funded and I have no other short term savings needs. I have the capacity to save more for retirement and want to one day FIRE. Would like to know what you guys recommend. I live in a state with no state income tax and am in the 22% marginal federal tax bracket. My 401k (which is with Vanguard) allows after tax contributions up to the IRS overall $55k contribution limit and has an option to roll them into a Roth 401k plan at any time. Note, I can only roll them into my Roth 401k, cannot do an in-service roll to a Roth IRA. Should I take advantage of that or just send my extra savings to a taxable account? Currently 90% of my retirement savings are pre-tax, 10% are Roth, and zero is taxable. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Weekly Self-Promotion Thread - June 27, 2018 Posted: 27 Jun 2018 04:08 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| I'm officially on the right track, and I wanted to say thanks. Posted: 27 Jun 2018 03:38 PM PDT Hey guys! I wanted to thank you for all the advice you've given me over the past few months. I graduated college early this year, and somehow managed to get hired out of school by a large Canadian eCom company. I don't have any debt from school, I live at home, I work remotely, and I don't have any major monthly recurring expenses. I know how oversaturated the job market is right now, and I'm super thankful to have found myself in such a promising so soon after school. I've lurked dozens of posts both here and at /r/personalfinance offering advice to young investors, and after some debate (and a talk with my dad!) I opened up my first investment account featuring a 70/30 split of Fixed Income and Equity investments. I'll be putting in a lump-sum deposit to start with, and contributing ~60% of my monthly income towards this account. The goal is to earn enough money off my side-business to survive comfortably, and put 100% of my salary towards future investments. Not sure if that'll be a condo when I move out, a rental property, or a BMW i8 (kidding!) The goal is to eventually live off my investments. And at 23, I think I'm on the right track. Thanks guys :) [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Senioritis and baggage about hard work Posted: 27 Jun 2018 03:13 PM PDT I have 1.5 years to go before I'm FIRE. My job as a software engineer isn't objectively horrible but I hate it. I hate sitting on my ass all day in front of a computer. I can't stop thinking about a carefree life of traveling and having fun. I worked so hard my whole life for this, doing factory, restaurant, hospital, and sex work to claw my way out of being a homeless runaway kid, then teaching myself computer science after dropping out of college. I planned to kill myself if that didn't work out, but it did so here I am. The sex work follows me to this day in the form of non-consensual videos on the internet, but that's what I get for being a hoe I guess. Now that I'm thinking about traveling and beginning to conceptualize what freedom really is, and what I've been working toward all this time, I'm realizing that so many people (honestly, mostly pretty girls on Instagram) just had all this handed to them from the beginning. I feel like a sucker and struggle to cope with this. My mind has gone to some surprising and dark places--like if only I was prettier I could have had this life without working for it. I'm not proud of it and would never want to be a sugar baby or trophy wife, but at the same time there must be some middle ground. I would never burden my partner by quitting my job and delaying our FIRE, and I appreciate our joint hopes and dreams, and the fact that we joined finances with the same amount of money each. We're lucky. I feel no shortage of generosity but somehow feel resentful that I haven't received a specific type of generosity--I don't know what that is, but it's the type of generosity that comes from a tight community and social safety net that catches you when you fall, or lets you sleep on its couch, or values you for your artistic and free-spirited worldview. Instead I've only lived in an unforgiving and lone-wolf type of world. Worse than that, a world where mandated reporters don't report, where people steal your money, where you're beaten down and forced to more-than-earn every penny you have. I don't know if I'll ever be happy no matter how much money I have, because of how I had to earn it. On top of that, I feel morally obligated to donate but I don't. Nobody knows I grew up poor, they assume I'm just a rich asshole. And at the end of the day, that's what I am. Am I alone in this? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income/ Savings and boosting it! (UK) Posted: 27 Jun 2018 11:24 AM PDT Hi guys, so I am a student and i've just finished for summer. I have a job doing 20ish hours a week and im earning between £300 - £500 per month, some weeks i work more just depends on the shifts im given. So im wondering is there ways that i can boost this income as its quite hard to save with such a low income. Any other possibly side jobs that i can do as due to the hours im given it's almost impossible finding another job around it, as i work weekends and most part time jobs require weekend work (i want to keep it as i can still work there when i go to uni) ?? Im doing this as im trying my best to support myself financially as I intend next year to live in student accommodation therefore i need to be prepared in best ways of making and saving money Thanks for the help in advance I appreciate it! [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Bewildered by health insurance choices (US, California) Posted: 27 Jun 2018 02:44 PM PDT I'm FI and finishing up my two-week notice period to leave my job. Am I RE? I don't know. I have no plans to work any time soon and may be retiring at this point, but I'm honestly not sure whether not working will be for me. My question is about health insurance plans now that I'll be paying for my own. What's the right choice for me? I don't have perfect health -- I have GERD and the occasional sports injury -- but I am relatively healthy for a guy in his 40's. I've been using Kaiser so my inclination is to stick with them although I'll be traveling more often now. I only saw my doctor once last year, but it's not hard to imagine needing surgery for my knee someday or something stemming from my GERD. Going through the Covered California website, here are my Kaiser choices.
The cost estimate columns are medium use which CC defines as
and then high use which CC defines as
and both are medium drug plan use. Other details: I'm not eligible for any subsidies and I can afford any of these, I just want to pick the best option financially. Any advice or suggestions? Silver and Platinum look less attractive than Bronze or Gold, but there are just too many choices!! Last thing -- I'm also expecting some dental work costs. Not sure what to do about that? COBRA maybe just for dental? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| A Journey to Asia in Search of FI/RE Posted: 27 Jun 2018 02:17 AM PDT Hi Reddit! I'm a 29M American currently living and working in China in the construction industry. After reading this sub and following a lot of advice everyone has provided, I wanted to share my own journey. Right now I'm not even debt free, a long ways away from financially independent, and even further from retired early but I'm headed in the right direction! Please bear with me as this post is a little long. The journey: I grew up in Oregon and was fortunate to have great parents who taught me the importance of hard work and savings. I always wanted to see the world so I applied to college on the opposite side of the country in New York and received a full ride Army ROTC scholarship. I was stoked! This was my opportunity to go to a great school for free and then I could join up with the Army and get paid to travel the world. About a month or two before school started that high came crashing down. Without any warning my ROTC scholarship fell through due to a medical examination. I decided to attend anyways and hoped to overturn the medical examiner's recommendation. That didn't work. I was stuck paying full tuition, room & board, etc. for one of the most expensive schools in the country. 4 years later I graduated in May 2011 with a degree in mechanical engineering and $163,500 in student loans. An alumni contact helped me get my first real job out of school so my anxiety was lessened ever so slightly. I was doing research and development for large bore artillery, which was interesting, but at only $40,000/yr I knew that it would take some time before my loans were paid off. First things first, I continued to live like a peasant and save every penny that I could. Saving, however, only gets you so far and $550/mo in interest does not go away on its own, so it was time to find a new job. 6 months later after some networking I landed a great job (still in New York) with a construction company and doubled my salary to $80,000/yr +bonus. The hours were long and I had a very tense relationship with my boss, but I figured the pay was worth it. Another 2.5 years go by and I decided to get married. Now don't get me wrong, I love my wife, she just came attached with $297,000 of her own student loans at 7% interest. Her parents were able to pay for her undergraduate studies, so this $297,000 is only her medical college. My wife and I have had a very unique marriage and it's definitely not for everyone, but there is no beating around the bust so I'll just tell you how it is. As soon as we got married, she put her medical degree on hold to pursue a PhD in North Carolina and I started traveling for work. We were physically together for 1 week after our wedding and then set off for our very different career paths. Emotionally it was difficult, but financially we were doing everything we could to tackle those student loans. At this point we had $389,000 in student loans with $1,500/mo in interest alone. My traveling also came with an additional $2,000/mo in per diem (I know grammatically that is wrong, but you understand what I mean) which helped to significantly increase my payments. My wife's PhD came with a stipend of $28,000/yr so at least she was able to cover her basic living needs on her own. Before we got married I averaged $2,600/mo in loan payments and afterwards I bumped that up to $5,200/mo. My next opportunity came in May 2016. There was a need at a construction project in Singapore (still with my same company) and without any hesitation I took the opportunity. This new position also came with a raise and over the next 6 months I poured over $63,000 towards those student loans. Not only was the pay great, but the project was a good change and there was plenty to do and see around southeast Asia. All projects come to an end though and it was almost time to head back home. I did not want to go back though. I loved Asia and wanted to prolong my stay as much as I could, so I started networking. There was an opening in one of our sister companies for a project in China so I took it. In January 2017 I boarded the plane and have been in China for the past 1.5 years. China is definitely not for everyone, but I have enjoyed my time here. My colleagues are great, the locals are very friendly, food is good, and rent is cheap. The pay is excellent although I am paid through our Chinese company and not the US so taxes and whatnot have been interesting. Since coming to China I have averaged $6,600/mo towards our student loans and am down to only $150,000 left. That monthly payment is going to decrease as my wife completed her PhD earlier this year so her stipend stopped and she will go back to school to finish up her medical degree. My other uncertainty is that this project is wrapping up and I am not sure if I will get to jump on the next phase or not, but when the future arrives, I will know. As I said before, I am working in the construction industry and uncertainty is the nature of the beast. One day you will have more work than you could ever possibly hope to complete and the next you are scrambling to find a new job because the project came to an abrupt halt. So that's my brief story of how I got to where I am. Current net worth: Retirement accounts: $110,000 US checking: $13,000 China checking: $43,500 Student loans: -$150,000 Net worth: $16,500 I also have another $49,000 in very speculative investments (down from $95,000 earlier this year… ouch!) that I won't include as part of my net worth. Yes, I know this is not financially wise and I'm not going to try to defend it. Transferring funds out of my China checking account into my US checking account is very difficult which is why I am so cash heavy. I also want to make sure my emergency funds are filled in case the project comes to an abrupt halt. The way I look at it, if the project were to end today, I could continue to make $3,700/mo payments toward student loans and have enough to cover living expenses for 1 year. Perhaps I'm being too conservative, but also transferring money out of China is difficult. I won't bore you with the details of my retirement account holdings but ever since I started investing I have roughly maintained the same returns as the S&P 500. Similarly I won't bore you with the details of my monthly expenses but want to highlight that the cost of living in China is radically cheaper than the US. On average my wife spends $2,000/mo more than I do on living expenses. I've tried to get her to cut back a bit but I'm living abroad and she's studying in school, so I'll let it slide this time. I know that I haven't made best financial decisions, I'm not as frugal as I could be, and there is plenty of opportunity for improvement but I think I've done an ok job and I'm also happy where I'm at. Since coming to Asia I have traveled to Indonesia, Malaysia, Cambodia, India, China, Singapore, and seen many things that I never dreamed of before coming here. Sure I always wanted to go out and see the world, but now I'm actually doing it and getting paid to be here! Future plans: With my crystal 8 ball at my side, fingers crossed, and whole lot of very uncertain assumptions, this is where I hope to end up: My wife will graduate next May and move into a residency program which should bring in around $50,000/yr. Student loans paid off by Dec 2019. This is 100% dependent on my job. I hope to continue working out in China until at least the end of next year and maybe move back to the states after that. This is very uncertain as my project is wrapping up and I'm not sure if I'll get to be on the next phase or not. Currently I don't have any kids and don't plan to have any in the near future. Perhaps in a few years I'll change my mind. My FI/RE number right now is $6.8 million. Yeah, I only have $110,000 right now so it's going to take a while. Once I finish paying off my student loans though I should really be able to kick it up a notch and pour extra money into that retirement account. Right now I put roughly 50% of my take home pay towards student loans. I know $6.8 million is a pretty high number but when I retire I want to make sure I'm financially secure and can enjoy my life. I'm only 29 right now though, so that number could easily change. Takeaways: Student loans suck. If you decide to go an expensive school make sure you know what you're getting into. My scholarship fell through and I didn't have a backup plan so I was stuck paying full tuition. Then I got married and she came with her own pile of debt. So far I have spent $380,000 repaying student loans and by the time I'm finished I expect to pay over $550,000 total. If you invest in highly volatile markets, make sure you are psychologically prepared to lose 50% of your portfolio value overnight. The best way to eliminate debt, increase net worth, and FIRE is to increase your earnings. And the best way I have found to do that is by networking to create opportunities. Finally, enjoy your life and don't wait until you are retired to do and see the things you want to right now. If you made it this far, good for you and I hope you got something out of it. Thanks for sticking with me. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 27 Jun 2018 02:10 PM PDT It's so hard to get others to understand that the stock market fundamentally does not work like they think, that the only thing we know is that the stock market tends to rise as a whole in the long-run, faster than bonds. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 27 Jun 2018 04:18 PM PDT The last few days have been tough. I am increadibly torn on what my future should hold. I really do not know what to study this automn and it is tearing me up. I am going to try to make this as easy as possible for you to digest (there is a lot going on upstairs....) Here is my ideal life - Lots of money, preferably some or all of it passive (and hopefully not a very risky route to get there) - The ability to at least freelance and travel where i want, but i dont think i want to retire in my 30s... then i would get bored. I think i need productivity to stay sane, but it would be nice to maybe just work from anywhere in the world. - Have a job i love. - Be able to not live like middle class eventually. (I am like 19, so this may all be unrealistic i dont know) Here are the three jobs i am currently thinking of
Pros: - Really good pay - I am super competitive and kindoff a geek - Interested in stocks and bonds, and economics generally Cons: - Probably stressfull - Time consuming - Not 100% sure i would enjoy it
Pros: - I would probably like it - Decent-high pay - I am better at language than with numbers - Can study while living at home which saves me like 30-40k in debt Cons: - May end up with decent pay - May end up not liking it - May be stressed
Pros: - I know i fucking love it! This year i have been working, and was blessed enough to come upon a third grade in serious need of a substitute teacher. For eight (!) months i was teaching this class and i had a blast! - Guaranteed a job for life - Decent pay - Could use long vacations to either earn more or work on passive income Cons: - Guaranteed decent pay, with almoast no way of increasing it - Might not let me use my abilities for all they are worth - Super long education (5 years), and i think the education is super boring. - Would need at least a 50k loan to get this education I hope someone reads this and can maybe help a lost 19-year-old out. I know i have to decide in the end, but which of these jobs are going to make it worse or better for me to become financially independent? Should i follow my teaching passion? I dont know!! Thank you in advance! [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| What do you pay in health insurance *while* still working--and how does this play into FIRE plans? Posted: 27 Jun 2018 10:12 AM PDT I have somehow been shielded from the severity of health insurance costs so far in life. I had a job for 6 years that paid all of our premiums, then it was $200/mo, then $378/mo with an ACA subsidy, a year on Medicaid, and now we're going back to $360/mo. However, my wife's new job offer has the family plan at $910/month! (I am going to keep my fairly lame job for now, at least part time, to keep us at $360 and then freelance around it). I'm hoping that when we do RE, our draw will be about $40k/year, which, according to a premium calculator I've found, would cost us at 48-60 (age range I tested) about only $266/mo for a cost sharing silver plan. That's, er, "reasonable" (for the U.S.!). The issue is getting to that point while not letting health insurance chew away too much of our FIRE-earmarked savings. For example, if we were using my wife's family plan insurance, that would be an extra $6,600/year that we couldn't put in the market and toward FIRE. To me, that's not small potatoes at all (particularly for something that is really only catastrophic insurance, since we are careful to stay fit and healthy. Sure, bad luck can take out anyone at any time, but we are also not smokers/drinkers, we're joggers, and we're very careful about nutrition). How has this issue affected you, and what FIRE-informed choices have you made regarding it? Remember, I'm only asking about pre-RE health insurance, while you're still working. Giving your age and whether it is a family plan or individual is helpful, too. Thanks. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Analysis of when to start Social Security Payments Posted: 27 Jun 2018 08:44 AM PDT I'm doing an analysis of when to start Social Security for a family member. Thought you would find the results interesting (and possibly check my assumptions). I'm not personally counting on SS in my plans, but it is still worth understanding I think. Especially my conclusion that SS should be started as soon as possible. Each month of delay in taking Soc Security results in an increase in the amount of the payments. If you start early you get less, if you start later you get more each month. By my math from the Soc Sec illustration I was given, it increases ~0.6% per month, or about 7% per year. (If you were getting $1000/mo at 65, you would get $1070/mo at 66) Here are graphs of the changes MoM. The big spike is the month that the person who this was made for turns 66, which is their full retirement age. https://imgur.com/gallery/GH2xHoV (I made a simplifying assumption of a 2% COLA adjustment in all years for all scenarios, taking effect each January, there was no material impact on the result for adjusting this rate) The interesting thing to me is that despite the higher payments, the cumulative cash is best for early starts until well ~18yrs into the model. To me this says that it is better to start payments as soon as you are eligible, especially if you think there is a risk to future payments (as there will be for those of us under 50 today). The cumulative delta was not more than $10K in any scenario, and waiting till age 70 gets $1,437 less by age 85 than starting at 65 (Starting at 65 results in 239 months of payments, while waiting till 70 results in 180 payments to age 85. The extra payments from 65-70 more than offset the higher rate on the payments if you wait till 70) I don't have data to show the impact of taking SS at 63 vs 65, so you'd need to do the analysis before doing, but this data definitely tells me that the analysis is worth doing. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 27 Jun 2018 11:52 AM PDT If you are in a high tax bracket and have significant taxable investments, the recent dip in the market is an opportunity to tax loss harvest. See https://obliviousinvestor.com/tax-loss-harvesting/ for an intro and how to avoid wash sales. Emerging markets are down almost 20% from a few months ago. Developed markets are also down more than 10%. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Is buying a home a good move, FIRE-wise? Posted: 27 Jun 2018 10:47 AM PDT I've wanted my own house, partly out of having control over it instead of landlords, partly for personal reasons, and partly because I thought ultimately it could be a money saver, helping my FIRE goals. I've just never gotten around to it. But what's the FIRE wisdom on this issue? And does it matter how you store your money prior to the purchase? (that is, in the market or not). [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 27 Jun 2018 09:33 AM PDT I searched for threads about this but they were almost a year old - is there an active FIRE Slack Community? [link] [comments]  |
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