Financial Independence 29/F - $250k NW - Quarter of the way there and a story of how I got there |
- 29/F - $250k NW - Quarter of the way there and a story of how I got there
- Took advantage of an interesting opportunity. Was it the right move?
- For those who have been doing this for a while, how much do stock gains help you?
- Daily FI discussion thread - August 10, 2018
- Weekly FI Frugal Friday thread - August 10, 2018
- Question about inflation when determinig FIRE number
- Has Anyone Experienced an Improvement in Job Performance After Becoming FI?
- Voluntarily take 75% pay cut?
- Costa Rica or Panama or somewhere else?
- How to factor in caring for parents later in life?
- Music/books/movies/channels that inspire you to FIRE?
- Could everyone retire early?
- Rental property model tips?
- Career break and FI?
- Need local FI/RE consultants or experts
- Any other college/highschool students who make spreadsheets and speculate at their fi/re?
| 29/F - $250k NW - Quarter of the way there and a story of how I got there Posted: 10 Aug 2018 01:16 PM PDT Like many people here, discovering this subreddit changed my life. I am an immigrant and I immigrated here when I was a teen with my parents and sister. We lived in a LCOL area and my parents' combined income never exceeded $45k. However, they still managed to buy a house, everyone had a car, and we lived pretty comfortably. However, there was no room for savings. We come from a country where saving money is less realistic than seeing a unicorn, so income in always equaled spending. Fast forward to 2010 at the height of the recession and both of my parents lost their jobs (I was in college at the time). The difficult times we went through during that time as well as discovering this subreddit right after graduating from college would define how I look at money and would lead me to where I am today. Sometime early in life I realized that academic success was my way out of the poverty cycle. My parents were incredibly supportive and gave me every opportunity to succeed. In high school I worked 35-45 hrs/week while also managing to graduate as valedictorian. I got into a top 3 school in the country and graduated in 2012 with a degree in engineering. I got my first job starting at $55k/year in NYC. After taxes, health insurance, etc. my take home pay was around $2800. My rent was $1100, transit was $150, and food in NYC is expensive. I quickly realized that although I was making more money at 23 than both my parents combined had ever made, without some cutbacks I would live paycheck to paycheck and never get anywhere. Around this time I also discovered /r/PF and everything changed. I am not a spender by nature and I am not into fancy clothes, shoes, purses, electronics, etc. I like good food, I like going out, and I like live music and sports. So I spend money on these things. I don't really have a budget and I don't know my savings rate. I just know that whenever I buy something, I make sure I really need it and I try to get the best deal possible. I try not to spend money on frivolous things (lunch, coffee, $15 cocktails, expensive purses and clothes). I save a lot of money on rent by underspending - yes it's possible even in NYC. I live with my boyfriend and even though our combined income would have allowed us to move into a $3000 apartment at the time, we found one for $1700 just outside of NYC and lived there for 5 years, even though our incomes had almost doubled in that time span. By the time we moved out, my share of the rent was only 12% of my salary ($880 on a $94k/yr salary). My salary kept increasing from year to year, while I tried to keep my expenses steady (I did suffer from some lifestyle inflation, but not nearly enough to match the increases in my income). My salaries went from: 2012 - $55k 2013 - $58k 2014 - $62k 2015 - $66k 2016 - $74k 2017 - $86k 2018 - $94k Savings:
My Net Worth Chart. That one big jump is when I linked my 401k to Mint. Not shown are the almost $30k I've paid off on my parents' apartment. This apartment is in my name due to their credit issues, and will be mine to keep when they are gone. However, they pay it off. I know rule #1 on this sub is to not do this for family, but my parents are literally the only reason why I am where I am and I owe everything to them. I have paid off $30k and there is $30k left on the mortgage. I plan on paying it off and "gifting" it to them when I'm done, thus liberating them from the mortgage. I've thrown any excess money there (so any bonuses, any money left over at the end of the month) has gone there which is why my Vanguard and is low compared to 401k. They don't know I'm doing this for them and would/will kill me when they found out, but I can't wait to surprise them :) Technically the apartment is in my name so it's part of my net worth but it won't be mine to sell for hopefully a very long time, and I hope to be FIRE long before that, so I don't count it as part of my FIRE goals. My parents also signed over our house in my home country to me and that's worth around $120k. However, it's also excluded because I would never sell it due to sentimental value. I am 28, will be 29 in a couple of months. My goal was $300k by the time I'm 30 and I think it's doable. Overall, I know I'm extremely lucky - lucky to have a supportive family to allow me to build a career that pays me very well that allows me to have a high savings rate. My goal is to become a millionaire by the time I'm 35. I don't know how realistic this is but I don't plan on changing anything in the meantime. I will continue to go to concerts, to sporting events, I will continue to eat out a couple of times a week, I will continue traveling a couple of times a year, and I will continue not spending money on stupid stuff. My salary will continue to grow while my spending will remain steady. My net worth will continue to climb at a steady pace, and I look forward to just watching that number grow. I'm not tied to any deadlines or any expectations. I just want to take advantage of the fortunate situation I'm in and I want to give myself the flexibility that has alluded a lot of people. Feel free to ask me any questions :) I just wanted to share my story since I never dreamt that I would have this much money in my life and it's an incredible feeling knowing that not only am I financially stable, but I am able to help out the people that helped me get to that point. [link] [comments]  |
| Took advantage of an interesting opportunity. Was it the right move? Posted: 09 Aug 2018 04:38 PM PDT My wife and I currently work for the same company. Both in our early 30's. We had a combined income of $220k and saved 50%. Over the years, we've saved about $900k that are mostly in Vanguard mutual funds. Our goal is $2 million with a 5% withdrawal rate. We lived very close to work, but in an undesirable area. Because of that, we owned a second home about 2.5 hours away that we would go to most weekends and holidays. This second home is much closer to friends and family. This is where we planned on retiring to once we hit our magic number. Our company started offering remote work to some employees who were in certain positions. Unfortunately, nether of our positions were available. We spoke to our managers and we were both offered remote work by moving into different positions within the company. Our combined income would drop $50k, bringing us down to $170k. Well, we pulled the trigger. We sold our primary home (walked away with $62k at settlement), and moved into our second home, where we now both work remotely. Our expenditures dropped almost $2000/mo (no more mortgage, insurance, property taxes, utilities, and weekly gas driving back and forth to our second house). We also cut back on eating out for dinner (which we were doing a lot on weekends while at the second house). We cook at home much more now. Our income obviously dropped more than our expenditures, but our quality of life is so much better. On top of all that, we had our first child. Because we both work from home, we have no day care expenses, which we would have had if we both still worked in the office. Were we stupid for giving up that much income to simplify our lives? I don't want to really do the math to see how many years it will set us back. But it's been about 6 months and we have no regrets. Life is good, and we're still on the road toward financial independence. I just wanted to share our story. Thanks for reading. edit Thanks everyone! Going to bed. I'll check back tomorrow. [link] [comments]  |
| For those who have been doing this for a while, how much do stock gains help you? Posted: 10 Aug 2018 09:00 AM PDT Without talking specific numbers, how much do you perceive stock gains to help your financial growth? I just started a few years ago and it seems that most of the money I currently have in VTSAX I put there myself. Those of you who are further along, could you let me know how you feel about it? Maybe include how long you've been investing and how much of your portfolio you feel has been contributions vs returns on your investment? [link] [comments]  |
| Daily FI discussion thread - August 10, 2018 Posted: 10 Aug 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 - August 10, 2018 Posted: 10 Aug 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]  |
| Question about inflation when determinig FIRE number Posted: 10 Aug 2018 04:43 PM PDT So if I calculate my monthly expenses for retirement and lets say I need $2500 a month, which gives me a FIRE number of $1,000,000 using a SWR of 3%. It will take me about 20 years to reach my FIRE number and the $2500 I would need a month is in today's dollars. So wouldnt I actually need more money per month once I hit my FIRE number due to inflation? The $2500 I need per month now wont cover me in 20 years when I retire, so wouldnt I ctually need a large FIRE number? Is there anyway to calculate how much I will need with inflation? Thanks [link] [comments]  |
| Has Anyone Experienced an Improvement in Job Performance After Becoming FI? Posted: 09 Aug 2018 06:15 PM PDT I remember reading a comment a while back about an individual that experienced significant improvement in job performance, including a promotion or two, after reaching FIRE. This person stated once they achieved FI (may not have been 100% FI, but they were not worried about being fired), they began to give honest opinions to superiors even if the opinions were unpopular. I found it very interesting that caring about job security less probably increased that user's job security and compensation at the same time. So, I was wondering if anyone has any similar experiences or stories. Thanks! Edit: Thanks for all the great responses! [link] [comments]  |
| Posted: 10 Aug 2018 03:28 PM PDT 27 years old, live and work in NYC metro area. Gross income is roughly $200k as an independent contractor within the finance industry. Independent contractor means that my income is variable, not guaranteed, and employment comes with zero benefits and lasts as long as the current contract. I have the unique opportunity to become a detective at a local county prosecutor's office. Police academy, gun and badge, the whole thing. The department handles investigation and prosecution of all major crimes in the county of 1 million people, so it's important work. Starting salary would likely be around $50k with good benefits and pension after 30 years. Salary would top out around $170k, probably would take 15+ years to get there. My plan has never been to stay in my current field or the Northeast past age 32 or so (around the time I hope to have kids). I've always been super interested in law enforcement, especially investigations, and this opening is a once in a lifetime opportunity. If I took the job, I know I would love it and do well at it. That being said, my current income allows me to keep plugging away for another five years or so, become FI or close to it, and move to a western state which more closely matches my lifestyle (outdoors, active, not a NY mentality). Has anybody had a similar experience? Would you mind sharing your thoughts? Thanks a ton for any insight! [link] [comments]  |
| Costa Rica or Panama or somewhere else? Posted: 09 Aug 2018 09:47 PM PDT I am a Canadian Citizen and a resident of Mexico. The majority of my assets (liquid cash plus real estate are located in Mexico) however I am looking for ways to diversify my cash internationally in a place that is also tax friendly while being 100% legal. I have read that Costa Rica doesn't tax foreign income, however I have also heard that I need to apply for residency to be allowed to open a bank account there. I work in the adult business (camming) and I am wondering if these countries would have an issue with webcamming, although my shows are not pornographic in nature and webcamming is legal in most countries in the world. I work on myfreecams and when the funds come into my bank they are from a company with the name MFC but this is registered as an internet marketing company if you look it up online. Myfreecams uses a third party to then wire the payments and they are based in Europe. So my wires would be coming from Europe. Has anyone working remotely opened a bank in Costa Rica or Panama (as an individual and not corporation) and what was your general impression? (especially if you dealt with large deposits (over $10,000 on a regular basis) What did you have to show if they asked for origin of the funds? What about taxation to the Costa Rican/Panama Government? How easy is online banking and wiring of funds both nationally and internationally? What banks would you recommend? And is Panama better than Costa Rica for working remotely or vice versa? Can you have an account in Panama without being a resident? The reason why I am considering these countries is because I need to retire early as well, so interested to know if they tax capital gains and if their investment products are any good. [link] [comments]  |
| How to factor in caring for parents later in life? Posted: 10 Aug 2018 12:47 PM PDT Taking care of our own parents is an external factor that can certainly derail a carefully planned early retirement. I see that the older people get, the more expensive health treatments get as well. I see this as a big risk and it might be extended to siblings if they need help from us later in life. How can this be factored in in our calculations? [link] [comments]  |
| Music/books/movies/channels that inspire you to FIRE? Posted: 10 Aug 2018 08:57 AM PDT Not talking about YMOYL or other how-to guides; rather forms of entertainment that are not directly FIRE related but inspires you to stay the course. For me (some obvious ones I know) Song: The Cribs - Be Safe Book: On The Road Movies: Into the Wild, Office Space Youtube: https://youtu.be/v8A0ad_2mPc https://youtu.be/E9S-jIcmxMk Note this has been briefly discussed here, and Im sure many others I missed: https://www.reddit.com/r/financialindependence/comments/3csoyr/best_fi_movies/ [link] [comments]  |
| Posted: 10 Aug 2018 01:55 PM PDT My question is simple. Let us assume [a] every person can save enough money, and [b] every person wisely manages their money. Does it follow, every person could [c] retire early? I.e., is FIRE a fabrication that can only exist due to conditions whereby [a] never happens, and [b] never happens? Thus allowing [c] to be possible? The question: is FIRE only possible because [a][b] are impossible? Without overloading the conversation with my opinion, it would be interesting to see the spectrum of answers. We already know [a] is unlikely given our culture, and [b] is similarly unlikely to happen based on our culture. But if we assume [a] people did make enough money, and [b] every person did wisely manage their money: is [c] possible or impossible (i.e., everybody fundamentally can retire early.) ~ Opinion below ~ It seems "retirement" is a modern concept that may not be in line with historical reality. How can every person retire early? (Or at all.) Somebody has to do work, correct? This forum (or the FIRE concept) looks like a financial version of the MGTOW phenomenon; i.e., men refusing to date. This forum is chock full of people who are refusing to work. FIRE looks like a false premise, when reduced to absurdity. I.e., if every single person retired early, what sort of world would that be? How would things actually get done? FIRE is mixed with a lot of truths; i.e., being frugal is wise, being humble financially is good, etc. I think though, there is a loftiness to the portion whereby people expect to never have to work again. It strikes me funny that retirement is a relatively new concept, and so many people expect to live like ants for a portion of their life, and then grasshoppers for the rest of it. I think retirement is a flawed concept. And, is it not curious we see so many depression posts when people retire? And, is it not curious the population growth is declining? It is not cause for concern we see so many people having less children (DINK and FIRE)? Something does not add up appropriately, when reducing DINK to the extreme, MGTOW to the extreme, and FIRE to the extreme, continued DEBT to the extreme. It seems like a recipe for disaster, over the long run. ~ I will refrain from giving my full blown opinion and leave the discussion here. TL;DR: Does FIRE only "work" because [a] not everybody saves their money, and [b] not everybody uses their money wisely? Does the concept of retirement exploit others, or come at the cost of others? If our population growth rate continues to decline or go negative, would FIRE become impossible? [link] [comments]  |
| Posted: 10 Aug 2018 06:46 AM PDT I'm contemplating buying a triplex as an income property, although it will probably be a year before I decide to pull the trigger. Apologies if this forum isn't the most appropriate place (this is more FI than RE) but I was wondering if anyone might take a look at the model I built and give me some feedback if you have experience with this kind of stuff. Assumptions: · Total mortgage includes 4% premium for closing, fees, etc. (this may not be nearly enough) · Total monthly rental income is hedged 5% to account for occupancy issues. I don't intend on many occupancy issues as this is a popular area near where I live but trying to stay conservative (this 5% reduction is why the individual units don't add up to the total). 5% may be low, but I'm also not considering the ability to increase rents over time (secondary hedge). · The property increases at 4% p.a. This is another conservative measure compared to the 5.4% figure I found online for average RE appreciation. · The IRR is calc'd based on the opportunity cost of the 30k home equity loan at the going average rate. · The rental income is enough to cover mortgage and the initial home equity loan. After the loan is paid off, the funds that were paying the home equity loan are then used to pay an additional amount of the mortgage per month. Model: https://drive.google.com/open?id=1kOcCNmqzcKqRNcZKhGzQgDFm1-MPZaMG [link] [comments]  |
| Posted: 09 Aug 2018 09:42 PM PDT I'm a 31 year old woman. I work in tech. I've had a pretty rocky career until a couple of years ago, but somehow I have six years of expenses saved/invested now. I got diagnosed with ADHD a couple of years ago, which explained my rocky career, where I kept burning out and quitting every now and then. I started getting help and changed jobs to something that's not that stressful. I also met my husband around then who is a wonderful influence on me, and we both make decent money, save more than half of it. We live in a HCol area and thanks to rent control, it's cheaper to rent than own at the moment, and we have no plans to buy a house unless the mortgage can be sustained on one income leaving enough room for saving/investing. Along the way, I started working on this startup idea, and I dedicate my Saturdays to it. It's slow af, and I plan to launch it as a small business in a year. And I started writing fiction, something I've wanted to do forever, and it's going good, albeit slow af. I can't stand to go in to work these days. These side projects are way more fun. I especially like them because of the autonomy. I hate having to be at my desk when I don't feel like working, and my work kinda asks for that. I wake up wanting to write, but I have to crush that impulse and commute to work. I work on my startup in the evenings, and sometimes I want to keep going all night, but I've to go to bed because work. Part of my frustration is that I never really got to pursue my dreams. I got steered into tech at 16, and got groomed into going for jobs at big name companies, so everything else seems scary, especially when it doesn't come with financial guarantees. Another big concern is that if I quit now (I've been at this job 2.5 years and it's the longest I've held down a job), I might possibly never come back to tech and my financial independence will evaporate. I have a plan to quit my job in 2022 after my stock all vests and a couple of other milestones are reached, but like John Mulaney says, "that isn't even a real year". It feels too far away and I feel like right now is the best time given I have no children, and if I postpone things for after kids, it'll never happen. My original plan was to do all of these things after RE, but a few things in my personal life changed and I find myself thinking about these things now. I'm nowhere close to RE... I'm only 1/8 the way there. I guess it's all a good problem to have, given I never thought I could even be pondering any of this ever, and I have a lot of good things going for me right now. But it's frustrating to go to work everyday when I have one tab open submitting my stories to magazines and another sending emails to my co-founders. Have any of you taken breaks to discover yourself or pursue a passion and come back to working a regular job after? How did it go? [link] [comments]  |
| Need local FI/RE consultants or experts Posted: 10 Aug 2018 07:51 AM PDT I am in Chicago Suburbs and would really like recommendations of local FI/RE experts or consultants to walk through the plan. I have a very basic outline of the plan but want to really get this reviewed and discussed in person. I have talked to "investment" consultants from TDA/Schwab and they are basically not useful. Please advise, and thanks in advance. [link] [comments]  |
| Any other college/highschool students who make spreadsheets and speculate at their fi/re? Posted: 10 Aug 2018 09:23 AM PDT Incoming freshman and I have been speculating fi/re since I got a job sophomore year of highschool. [link] [comments]  |
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