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    Home Unlabelled Financial Independence [23 F] wanting to quit 60k corporate job for wedding photography. Thoughts on slower FIRE but a better journey? [UPDATE]

    Financial Independence [23 F] wanting to quit 60k corporate job for wedding photography. Thoughts on slower FIRE but a better journey? [UPDATE]

    July 02, 2018

    Financial Independence [23 F] wanting to quit 60k corporate job for wedding photography. Thoughts on slower FIRE but a better journey? [UPDATE]

    [23 F] wanting to quit 60k corporate job for wedding photography. Thoughts on slower FIRE but a better journey? [UPDATE]

    Posted: 02 Jul 2018 09:50 AM PDT

    Original post here.

    A few of you called me spoiled after the first post 9 months ago, and many of you told me I would be an idiot to quit my corporate job.

    Regardless, I've quit my job and I am done in a month!

    A lot has happened with my wedding photography business since the post, mostly inspired by the kick in the ass I got over my pricing and expectations for salary.

    I raised my prices to $3,400 over a few months and my inquiries went down, but my booking percentage actually increased. Turns out people really take pricing as an expectation of quality...works for me!

    I booked 50k in weddings this year, so it has been 9 more months of balancing the two jobs and way too many hours, but the double income has been fabulous. I took some great vacations too, as some suggested!

    Before I gave my two months notice (small team!) I matched my salary for 2019, meaning I have 75k booked out but I have about 9k in projected expenses.

    With senior and family shoots along the way I should end up just under my corporate salary + benefits, and I can focus on climbing again in 2020.

    I just hit 6 figures in savings and investments so I am feeling good about balancing saving for retirement while also enjoying more free time during the week!

    I am SO PUMPED to read more, workout, edit 100,000 photos, and work for myself.

    THANK YOU all again for the advice, and thank you especially to those in the industry that DM'd me and helped me along the way.

    My website is CarlyMacPhotography.com for those asking!

    submitted by /u/unorthodoxninja
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    Daily FI discussion thread - July 02, 2018

    Posted: 02 Jul 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
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    What were finances like in your home growing up?

    Posted: 02 Jul 2018 10:47 AM PDT

    Did your family teach you about money or did you have to learn on your own?

    Was your family rich/poor?

    What are your parents attitudes toward money?

    Was there a global event such as great depression, .com bubble, etc. during your childhood that may have had an impact on your view of finances?

    The list of questions could go on and on

    submitted by /u/zack397241
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    FI thoughts on building your own house?

    Posted: 02 Jul 2018 08:43 AM PDT

    What are FI thoughts on building your own vs buying houses?

    Edit: a tip on saving costs, it usually saves to pay a flat fee to architects over a percentage of the total project. Some take 10% on a million project is 100k vs just offer them 10k for the plans and oversee it yourself.

    submitted by /u/Returnoflemong69
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    Vanguard starting Commission FREE ETF trading for 1800 ETFs starting August 2018!

    Posted: 02 Jul 2018 01:41 PM PDT

    Made it - Last conservative FI milestone. No more goals.

    Posted: 02 Jul 2018 08:52 AM PDT

    I've been tracking a monthly spreadsheet since January 2014. Mostly tracking assets/liabilities, but also goals, asset trajectory estimates (based on historical growth), college cost estimates, all sorts of things. Little hobby I look forward to updating every month.

    We calculated our expense rate (occasionally refreshing the calculation to double check), with some added buffer to cover things like medical costs after retirement. Then I projected a 4% withdrawal rate goal, a 3% withdrawal rate goal, and a 2.5% withdrawal rate goal being our final conservative goal we'd save for.

    We hit our 4% goal awhile ago, hit our 3% withdrawal rate near the beginning of the year, and in this last July 1st update, just hit our 2.5% withdrawal rate due to a nice stock vest. Our 2.5% withdrawal rate goal was the last goal in my spreadsheet. By any conservative definition of "FI" I've come up with in the past, we're there. It's somewhat anti-climactic, because nothing in our life will change immediately, it's just that I have no more milestones left :)

    https://imgur.com/a/4qPXSmX

    Caveats/disclaimers/info:

    1. We're privileged to have a (very) high income. I just calculated and over the last 10 years my income CAGR has been approximately 27.5%. My wife also works and while the income growth is a bit less incredible, has made 6 figures for awhile.
    2. We're privileged to have our in-laws live with us and take care of our children while we're at work. So we avoid standard expensive child care costs. I'll note this has the trade-off of us not having a "private" home, something I've heard plenty of people say they wouldn't be willing to do.
    3. I'm very privileged to have a wife who is morally offended by spending money on things which are not necessary and don't add to our happiness. We currently make 7 figures. We just sewed a missing button back onto a 10+ year old shirt of mine. Our kids are almost entirely clothed through freecycle. Our cars were all bought with 60k+ miles for cash, we do our own oil changes, and we just replaced the starter in our 150k+ mile car ourselves. Our home is often 60 degrees in the winter, and 80 degrees in the summer. When we have a free weekend, we might go on a driving vacation, where we always sleep in the car and/or tents. Restaurants are perhaps monthly, if that.
    4. We do spend money on things which make us happy. We spend at least $15-20k per year on flights/airbnbs (always the cheapest flights/accommodations available, we just have a lot of people to take with). We have spent many thousands on computer/camera equipment. Our pork is locally raised, our beef is grass fed, our produce is usually organic, etc. We have some pretty awesome hiking gear :) I have ~20 what I'd call hiking knives, much to my wife's chagrin.
    5. We paid off our house a few years ago due to the stock market being so inflated, I figured it was a good time to effectively buy a fixed return investment. Considering how much the stock market has continued to rise since then, it's yet another datapoint towards not trying to time the market. On the other hand, I love how small our monthly expenses can be since we have no loans.
    6. We have $3MM in umbrella insurance. Feels cheap compared to the potential benefits.

    Next steps: Around the end of the year I'll be taking some time off work to spend with our kids. However, I enjoy my job, and my wife doesn't mind hers, so we're in an odd state of "What now?". We aren't trying to run away from our jobs, so we're trying to figure out how we can take advantage of the additional freedom, without blindly quitting work just because we can. I'm trying to figure out a new suitably ambitious goal now that the goal of "save a ton of money" has pretty much been accomplished :)

    submitted by /u/StrongishOpinion
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    Weekly FI Monday Milestone thread - July 02, 2018

    Posted: 02 Jul 2018 04:10 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
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    Using leverage to produce more reliable income and portfolio survival?

    Posted: 02 Jul 2018 10:29 AM PDT

    Crossposting from r/investing as this could potentially increase survivability of a portfolio over long withdraw periods.

    Traditionally I've been a simple 3 fund Boglehead type of investor, but after reading this sub and other material for the past several years I'm considering transitioning my Roth into a strategy that implements leverage and modern portfolio theory. This post by u/hydrocyanide really started to change my view of risk and return along with following other professionals that post on this board, mainly u/MasterCookSwag, u/hedgefundaspirations, u/hydrocyanide and u/cb_hanson_III, so before I start I'd like to thank you guys for contributing to this board and making it a wonderful place to learn. I am not an investment professional and therefore don't recommend anyone following the strategies that I talk about without consulting someone who actually knows what they are doing.

    The portfolio would be constructed similar to Larry Swedroe's "no fat tails" portfolio. This portfolio invests 30% into equity asset classes that have a very high systemic risk (small cap US stocks and international emerging markets) and the remaining 70% into something like treasury notes or bills that would be inversely correlated to equities during times of crisis. By doing so you hope to eliminate the extreme left and right tail return events, both good and bad, and achieve a very reliable sequence of returns. Historically you would have achieved a very high sharpe ratio and even unleveraged would have a decent compound annual growth rate.

    The idea of leverage always seemed distant because as a small investor it seemed too expensive. However, I recently came across the Direxion mutual funds that offer leveraged funds for these asset classes with monthly resetting (to avoid leveraged decay of daily funds) and an expense ratio (1.49%) far below what it would normally cost to use leverage normally. I was surprised to see that these funds were implemented before the financial crisis, so we can test this strategy through that very volatile period.. We see that over the past 12 years, using 2x leverage with these funds and annual rebalancing this strategy beat the S&P 500 with significantly less risk. Even taking into account the financial crisis, this method results in a much more reliable stream of income. For example, say you retire and implement a 4% withdraw strategy. Comparing this portfolio to a conservative, moderate or all stock portfolio over the last 12 years, the income was much more consistent and you would have ended up with more money.

    Caveats:

    1. This strategy absolutely depends on rebalancing. Annually seems to produce the best outcome but I don't have any literature based evidence of that. I find it remarkable how much excess return annual rebalancing provides. By doing so, you outperform the best performing fund of the 3 by 4% CAGR!

    2. Along with point 1, the initial buy in is significant for a small investor. The minimum purchase for each of these funds is $25,000, so you'd need at least $167,000 to have enough to buy in each of the funds with the proper allocation.

    3. Doing so in a tax advantaged account seems crucial. Otherwise, taxes would eat you alive when you rebalance.

    4. I wouldn't put all of my money into this. I am a government worker and I'd likely keep my TSP money into the traditional TSP investments as a hedge. Barring a market meltdown my Roth IRA should have enough to employ this strategy in a couple of years so there is plenty of time to consider alternate viewpoints before I jump into this.

    Pitfalls as I see them:

    1. These Direxon funds are very small. According to Morningstar they only have $8 million to $25 million AUM. I'd worry about them folding shop with amounts that small.

    2. The volatility of the individual funds would be insane. During the financial crisis the equity funds lost over 90% at one point. You'd have to be a very stoic investor to hold to the strategy when faced with that, and it is easy to say you can do that when looking at the past.

    3. The number of asset classes is admittedly low. By excluding so many potential asset classes there is risk of suboptimal returns. Something like the 7/12 portfolio is much more attractive in this regard, but historically it has been much more volatile and therefore not as attractive to leverage.

    4. This point is entering the space where my knowledge is admittedly limited. These funds use swaps and future contracts to achieve their leverage. As interest rates rise and if inflation ticks up what would that do to their expense ratios? It is 1.49% right now when money is still historically cheap, but what happens when that is not true? Would the expense ratios become prohibitively expensive? ETA: financing costs wouldn't increase the expense ratio, but they would increase the unseen expenses and drag of the funds comprising the portfolio so this will be something to monitor.

    So there you have it. I'd like to elicit the thoughts and criticisms of reddit. What am I missing? Thanks everyone.

    submitted by /u/m1garand30064
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    Finally this is feeling real...

    Posted: 01 Jul 2018 10:20 PM PDT

    I've been reading and researching about FIRE for the last four months or so. I just finished "Your money or your life" and made my chart with income, expenses and possible investment income. Wow, I'm only 8 years away without making any changes to my life. I'm 34 so that blows my mind. Why did this shock me so much?

    • I expected the number to not be too far away, but nearly having enough to live on when I'm 40 years old seems like a cheat code.
    • I'm extremely lucky to be in the situation (luck, family, privilege, job, family values)
    • Our expenses are around 60k a year so I know here's lots of fat to trim there.
    • For some reason I decided over the last 10 years to be a good boy and save a good chunk of my paycheck. It's a shame that I was told 10% is a good start but I think they want to get people to just start investing when they're young, not make them think they have to do 50% or more.
    • I was always a cheap numbers oriented person, but I feel like finally I'm seeing some real value from that. Before I just felt cheap. Seeing the 8 year number made me feel totally different now.

    It was excited to draw it up and have my wife ask questions about it. Im hoping it becomes as real to her as it is to me right now.

    submitted by /u/stingeyb1
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    T minus 1 year

    Posted: 02 Jul 2018 10:10 AM PDT

    I read the FAQs and searched the subreddit but couldn't find anything specifically addressing the immediate lead-up to FIRE. What should I be sure to do/prepare for over the next 12 months?

    Thanks!

    submitted by /u/save_the_wee_turtles
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    New to FIRE + Roboadvisor Questions + Thanks!

    Posted: 02 Jul 2018 02:14 PM PDT

    First time poster, long time lurker. Thanks for running this everyone. Having this information available to everyone is wonderful!

    I'm starting to get ready to retire ( I don't want to quit work yet but be financially independent) and am hoping to be on the right path. The goal is to live in Mexico (or somewhere warm for half a year) and in Canada the other half. Places like Mexico or Thailand are cheap (I usually spend around $1000 a month) and Canada is about double that.

    I have savings, investments and live a simple, but very happy life.

    Now I'm starting to get into using Roboadvisors. I've tried Modern Advisor so far but have lost money and while I understand the markets are not so greta at the moment and am in for the long haul, does anyone else use them?

    Also Hard Bacon. I signed up for the app but haven't really used it yet. Anyone else familiar with this?

    And is there a reddit for investing?

    Thanks so much!

    submitted by /u/cashcrush
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    FI in Europe: Property purchase or investments, and which types to invest in?

    Posted: 02 Jul 2018 12:03 PM PDT

    Environment advice that change from the US,

    • In Denmark where I currently long-term live, we have no 401k, no Roth, etc, that can be pulled out before you hit the age that the government decides is your pension age. So all 401k/Roth are kinda pointless for me, as I wanna FI/RE at 53-55 years of age.

    • ETFs are heavily taxed, so its almost fruitless to do them, unless we are talking sub $10,000 or so because of special rules.

    • Gains made on a house/flat you own (and do not rent out for profit) are tax exempt.

    So, in lieu of this, I should buy a property, live in it and sell it in 5-10 years when the market has crashed and re-grown strength again. Which is cool cause I need a place to live closer to the capital centre anyway to minimize daily commute.

    I have a $100k or so amassed by now for investments or the 20% down payment on a flat without expensive loans.

    Problem is the market for properties, especially in the A+ location eras are historically high and the interest for the long loans needed to buy a $500k+ property, are historically low, ie its very cheap to loan the big remainder.

    So I should wait (painfully) for the property market to crash and then buy, while investing in something smart.

    Problem now is that the stock market is crashing slowing too, and this lead me down the question of what to do?

    • I can get the apartment I want and risk suffering being tied to the flat for years on end, without the ability to move without heavy losses. In Denmark you can only lease it to someone at a max price, meaning they can take you to court unless you almost lose money on leasing it out, so that is only a last-ditch save.

    • Leasing is incredibly expensive ($2,000/month in relevant areas for a 2 room flat)

    • I can wait but suffer the same 3 hr commute a day for years till the market may or may not collapse, but suffer life quality issues. I currently live in a rented poor suburb housing project to save money only. I then have no stocks, ETFs to invest in and bonds are very low yield.

    Current solution:

    I have been looking into putting 50% in to bonds or safe stocks and 50% into p2p loans and crypto and then bite me cheek for a year or two but I really could use that property to gain life quality too.

    So really on the fence of what todo now?

    Some told me to get a big property in a still-shit suburb closer to the centre and hope the expanding circle of growing housing prices can hit that property so I can gain a $100k a year in value on the purchase but then life quality suffers again.

    submitted by /u/Adler4290
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    Possibility FI (maybe RE) in Romania

    Posted: 02 Jul 2018 05:13 AM PDT

    Hello everyone,

    I have discovered this community in the past few days and have been reading everything I can get my hands on. You guys are awesome! I am writing you this post in seek of advice and maybe potential conatioals that are working on FI or just plain improving their financial situation. I still have a lot to read, so please excuse my ignorance. So a bit about me: I will be 27, soon, live in Bucharest - Romania. I earn 1180 euro per month in a country where the average is 400/500. Out of this sum I manage to save close to 72% every month. It helps that I still live with my parents (yes, I am too old for that, but I help with raising my brother and expenses), which has helped me save quite a bit by Romania standards, in the past year. As a person I can be very frugal and wise with my spending, but not cheap or skip on fun. At the current ammount I am saving I know FI is a looooong way away. My current job is in sales and is very comfortable, I get a lot of free time to relax, and also do other things to improve myself. BUT, this is not a solution, with the current savings I am making I will never be FI. I will be honest, I am contemplating buying an appartment, my savings are 20k euro (15 from the past year) and I will receive another 40k from my parents, but I gave the feeling that it is not a solution for the long run. This is why I seek advice. I have begun contemplating investing and/or starting my own business, maybe access EU Cohesion Funds. What advice would you give a not too late starter from a country that is still way bellow Western Europe in terms of development/savings potential. Thank you!

    submitted by /u/mpop888
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    How do you guys track Roth IRA contributions?

    Posted: 02 Jul 2018 08:26 AM PDT

    I think this is more relevant to FIRE than personal finance because it is important to know when, and how much principle, one can withdrawal if they are planning to withdrawal early.

    Anyway, I just got my first part time job and decided to contribute all of my 'taxable compensation' to a Roth IRA, since my taxes will be so low. I will earn less than the $5500 limit, but I do not know exactly how much. Since I don't know how much I can contribute, should I wait until the end of the year and go all at once or contribute as I go? I would assume the latter would be more complicated to keep track of, unless yearly contributions are all lumped together.

    Once I decide how to contribute, how do I keep track of this principle so I know how much I can withdrawal? Is it good enough to just use your tax forms to keep track of it? Do you guys use some external tracker like a spreadsheet? I would love to hear how you guys keep all of this straight and what you would recommend.

    submitted by /u/Generic_Username0
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    What do you all think of my plan to be financially independent when I get out of highschool? Be honest and if you could give me suggestions I would appreciate it

    Posted: 02 Jul 2018 10:49 AM PDT

    EDIT: My title is misleading, I have enough common sense to know that it's almost impossible to be financially independent straight out of highschool, I'm getting out of highschool soon and I'm going to be following through with my plan and I wanted to see others opinions and to see if I have flaws in my plan before I start with it.

    So instead of going to college and getting myself in a $50K+ debt, I'm thinking of joining the Navy and learning the construction trade with the Seabees, a good perk of the military is that it covers almost all of your living expenses, and the pay you get is free to use for whatever you want, if I saved $1000 a month, after a 5 year enlistment I will have $60K, which is fantastic for a person who would be 23 at that time. If I save even more cash I could be looking at $80K+. During this time I will be improving my credit score for the next step in my life, if anyone could tell me how long it would take me to get a good credit score of 500-600 that would be nice. So when I get out I'm planning on using my zero down payment VA loan to buy a decent sized dipiliated farm outside my rural hometown, and putting a old trailer on it, I can find one for around $3000 and depending on the condition I could possibly spend another $2000 to improve the trailer, the VA loan should cover the trailer so I wouldn't have to drop $5000 and the possible utilities I will put in, i plan on living frugally as possible, by living off the farm land, I could make my grocery bill plummet, and with a well, I have no water bill. I then plan on buying construction equipment which I'm probably going to drop $30K on, including a truck. I can then start my construction business, the remaining cash I will use as a emergency fund, I'm blessed to have a successful contractor and businessman for a father who gets more jobs than he can deal with a lot so if i have trouble finding jobs I can get some from him if it comes down to it. Sooner or later I will start improving my farm and start offering environmentally sustainable meats and vegetable using Joel salatins principles(he is a man who has proven that farms can be profitable, please look him up.). Once I get enough cash saved up and my construction company has grown(I estimate that I will be in my early 30s) , I will start buying properties that need work and use my company to improve the houses, and then keep them as rentals. By my late 30s or early 40s I should be able to have my dream house built, and should be getting enough properties to start raking in passive income and be financially independent.

    What do you all think?

    submitted by /u/Ezekiel-Reed
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    Retirement Planning Spreadsheet, any obvious large math flaws?

    Posted: 01 Jul 2018 05:04 PM PDT

    Hi all, Just spent a few minutes making a quick spreadsheet that I'd like your input on to see if I missed anything obvious (it was done pretty quickly).

    Basically I wanted to model the compound growth of assets along with yearly changes in savings and expenditures which I couldn't find anything for elsewhere (everything assumed constant values for adding or subtracting per year).

    So I have starting amount and expected growth a year at the top, along with the yearly change in Column C so I can model moving from saving money to just spending it.

    Any flaws in the rough math? (ignoring that practical aspect of old age security etc)

    https://docs.google.com/spreadsheets/d/1CVXdiTZ9Ez2iUsCiuwzPGTIeeBl7x7xHsnYeBODUMB4/edit#gid=2132154822

    Thanks

    submitted by /u/throwawaygraph1111
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