- A reminder that milestone, "here's my situation, advice needed," real estate, personal finance, general life direction, etc. posts may be removed even though they briefly mention FIRE.
- First Financial Independence Win -- Knocked Out the Student Loans
- Don't be afraid to use your FU money and put off your FIRE goals
- FIRE failure stories?
- Daily FI discussion thread - October 05, 2018
- Small Victories
- ACA - MAGI significantly impacts deductibles and out of pocket expenses
- How do you spend money again?
- Weekly FI Frugal Friday thread - October 05, 2018
- Concierge Medicine
- Request: link to videos that discuss FIRE & related concepts
- Consider Tax Loss Harvesting International Stock Positions
- Am I stupid: move to Ecuador, give up 6 figure salary?
- How does one manage to reach FI even on a limited income?
- Teacher looking for some advice
- Why do politicians don’t FIRE
- Asset allocation for FI but maybe not RE
| Posted: 05 Oct 2018 09:13 AM PDT Hi, everybody. We're getting a lot of the kinds of posts I reference in the title. Many go like, "I want to FIRE. I paid off my student loans last week, w00t. Here's my financial situation as of this morning. How can I generate passive income? Is it more efficient to max out my 401(k) or save post-tax? 100% index funds, or should I have a bond allocation? I own a home in the Bay area. Should I rent it out and move into something smaller? All advice appreciated." I mean no disrespect to anyone, of course…those are important statements/questions. I'm simply exaggerating to illustrate that while such posts may overlap with FIRE, if the overlap is tenuous they're subject to removal even though they contain the acronym. Posts like these are also indicative that the OP may not've thoroughly researched the subject in more appropriate places. Please make sure you check subs like /r/personalfinance, /r/realestate, /r/entrepreneur, /r/frugal, etc. before asking such questions here. Take a look at the sidebar, too. Be aware that for milestones we have a weekly thread. The daily thread is also an option since its topical rules are looser. And don't forget that we have a "report" button. Thanks for your help in keeping the front page directly on topic. Yer pal…ER. Edit: all that said, man…if a post along those lines get made and for whatever reason it generates hundreds of upvotes and comments, my own personal inclination is to leave it up. It might not strictly be OT, but the community's invested in it enough to where it's clear that it's providing value, so--again, personally--I'm hesitant to remove it. I'd prefer to facilitate discussion instead of controlling it. Please understand, though, that what I just said is the exception rather than the rule. [link] [comments]  | ||||||||||||||||||||||||||||
| First Financial Independence Win -- Knocked Out the Student Loans Posted: 05 Oct 2018 06:14 AM PDT Hey y'all -- longtime lurker, first time poster. I'm 26, two months from 27. Grew up with parents who never saved anything, and never really taught me how. However, in college, I never spent more than I had, built good credit (right around 800 now) by paying loans and cards off steadily and on time. Really wish I had socked away more money in savings now, but hey, what can you do. Anyway, last October, I looked at my student loans, which were at $25,000 still after three years of dutifully making payments, and decided I no longer wanted to be in debt. So i resolved to pay it off in 12 months. Kept a $1,000 safety net, Dave Ramsey style -- although I ignored the snowball effect and paid off the higher-interest loans first -- but that was it. And last week, end of September, I clicked the button on that final payment while playing Chariots of Fire over the loudspeakers. I really enjoy saving now, and simplifying my life. Hoping to continue riding the savings train, somewhere between 50-60 percent of my salary to start. I make $65,000, and will be looking to first put money into tax-advantaged accounts (thinking Roth 401k for the flexibility to be able to take it out if I want for a first home in a few years, but not wed to that). Anyway, I welcome any advice on the next step in my journey to independence, but mostly just wanted to take a quick victory lap. [link] [comments]  | ||||||||||||||||||||||||||||
| Don't be afraid to use your FU money and put off your FIRE goals Posted: 05 Oct 2018 07:18 AM PDT I know that a main tenet of the FIRE philosophy is to live frugally, work hard, and save as much as you can until the day when you can retire, and we often see posts about everyone being afraid to spend any money on non-essentials. However, I'm in a situation the opposite is happening, and I still think it showcases the benefits of the FIRE lifestyle. For 10-+ years both my husband and I were living as cheaply as possible and saving/investing for the future, both before we were together and even more-so after. We've both always been career focused and agreed that working hard now was worth being able to retire (or semi-retire) early. However, starting about 2 years ago, my job started getting more and more stressful. We were bought out by a larger company, who laid off as many people as possible and assumed the remaining employees would make do. Most higher level management was laid off or forced to retire, and their replacements only cared about getting the most work out of everyone. My average day involved going to work, coming home, making dinner, logging back into my laptop, and working till 10 or 11. I took my laptop with me on vacations, and 'sick days' became 'work from home' days since I could never actually get away from my job or else I'd get so far behind that projects would fail. My relationship with my friends/family almost disappeared, and my relationship with my husband was strained, to say the least. I put up with it for a long time because I always had my eye on that prize- retiring by 45. However, when I started getting stress headaches that sent me to the ER, I knew I had to make a change. I ended up resigning, before I found a replacement job, because my physical and mental health depended on it. It's been 5 months now that I've been unemployed. I've never been out of work in my life since I turned 12 and started babysitting and rock picking (farming community child labour FTW!), and I naively thought I'd find another equivalent position right away. That hasn't happened yet, which means that our FIRE goals are basically on standby. However, if it wasn't for the fact that we'd organized our life to have minimal expenses and had been saving/investing for so long, I wouldn't have been able to quit in the first place. When I told my manager I was resigning, she confessed she'd be gone too if she could afford it, but there was no way that she could. I heard the same story from multiple coworkers when they found out. Even though I'm disappointed that I haven't found work yet, every time I get in touch with my former coworkers I hear how miserable they all are and how bad things have gotten, and it just makes me grateful again that I used FIRE principles to build a life with no debt, low expenses, and passive income, even if we're using some if it a few years earlier than expected and it will take a bit longer now to fully achieve our goals. [link] [comments]  | ||||||||||||||||||||||||||||
| Posted: 05 Oct 2018 11:18 AM PDT After listening to the paula-orman podcast, I'm a bit spooked out, so I'd like to listen to some real-life FIRE stories that did not work out, and you eventually either had to go back to work, or ended up significantly poorer otherwise etc. If you did fail, what was the failure and what lessons were learnt to avoid that in the future? And looking back, even though your FIRE failed, would you do it all over again? Hopefully this will give some more insight into why your FIRE plans might fail and insure against it. [link] [comments]  | ||||||||||||||||||||||||||||
| Daily FI discussion thread - October 05, 2018 Posted: 05 Oct 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]  | ||||||||||||||||||||||||||||
| Posted: 04 Oct 2018 06:14 PM PDT Hi all, Just wanted to share a recent FI victory with you because, let's be real, who else am I going to tell? I started a new job a couple of months ago. ~20% raise from my previous role and I was able to take a 4 week "vacation" prior to starting. Having a solid e-fund and generally simple lifestyle meant I was able to spend that month off with my wife as she was just getting ready to go back to work (she's a teacher). We have a long way to go, but I'm incredibly happy to be at a point where I'm able to take a month of work unpaid and not notice a thing. Keep on everyone! [link] [comments]  | ||||||||||||||||||||||||||||
| ACA - MAGI significantly impacts deductibles and out of pocket expenses Posted: 05 Oct 2018 07:59 AM PDT I posted something about this in another thread but it got buried. As we know MAGI has a big impact on premiums. What I didn't realize is that it also impacts out of pocket expenses. I was very surprised to see the difference between $40k, $30k, and $20k MAGI. See below... Cheapest Silver plan for 2 people:
Note, these are real numbers from the ACA site for my area all pulled from here: https://www.healthcare.gov/see-plans/
Now let's assume that you use your insurance a lot... enough that you max out of pocket every year. Premiums DO NOT count towards your out of pocket limits. So to simplify, you would pay the following per year:
As we know the ACA acts like a tax that actually will cause you to increase your taxable income to pay for it which in turn makes the ACA more expensive. As long as the ACA is around in it's current state it is hard to see how making pre-tax contributions beyond your company match makes much sense. Obviously things can change with ACA and health insurance. I'm going to play with the numbers but I think going forward I will be focusing more on maximizing Roth 401k then taxable investments and only will put the minimum in to my 401 pretax to get full match as I have the majority of my assets in pretax 401k funds.
Edit: updated to correct how I will invest. I had said focus on taxable but meant to say Roth 401k, then taxable after maxing match on pretax. [link] [comments]  | ||||||||||||||||||||||||||||
| Posted: 05 Oct 2018 03:33 AM PDT Hey everyone. I've been on the FI train for a couple of years now, slowly whittling down my earn/spend ratio. It's healthy right now, with me spending only about 30% of what I earn. I'm on track and can afford a tiny bit of buying, especially on books, which are one of my greatest loves. (I know the crowd wisdom is on the library, which isn't an alternative where I am). My question is, how do you allow yourself to spend again after a long time of frugality? I ask because I used to curb spending with guilt, by berating myself with alternatives -- i.e, I'd think ' How can I have bought a mug that could pay for 4 meals instead, what am I even thinking?' Now that I'm trying to allow myself to buy things again, I feel paralyzed by it. All I can think of, especially with bigger purchases, is that this will damage my ratio, and I'd hate myself at the end of the month if I end up spending like, half my paycheck. Has anyone experienced this, and what was your solution for it? [link] [comments]  | ||||||||||||||||||||||||||||
| Weekly FI Frugal Friday thread - October 05, 2018 Posted: 05 Oct 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]  | ||||||||||||||||||||||||||||
| Posted: 05 Oct 2018 03:46 PM PDT Concierge medicine is a model where the patient pays a retainer fee in order to have better access and more customized service from a doctor. I have the opportunity to join this model with a trusted family doctor who is providing initial membership at a much discounted rate to existing patients. ($150/mo/individual) I find it appealing because as someone who moves/travels frequently it would be nice to be able to text/facetime the doctor to get a script or ask questions. It also allows use of a single doctor that would provide multiple services which typically require a handful of specialist (dermatologist/internist/anti-aging/psychologist). I would never have to wait 3 months to see a specialist and spend time getting through an electronic answering menu ever again! It also allows the patient to have more influence in treatments. As more of a FI than an RE type of person this fits the model for me because it trades some money for increased flexibility and quality of life, especially with kids. What are the community thoughts on this? Medical care is a tough part of the FIRE model, are the benefits worth the cost? [link] [comments]  | ||||||||||||||||||||||||||||
| Request: link to videos that discuss FIRE & related concepts Posted: 05 Oct 2018 12:04 PM PDT My wife is mostly on the same page regarding goals but doesn't understand passive vs active funds, pre tax vs post tax funds, compound interest, safe withdrawal rates, etc. I'm looking for interesting videos on these topics myself but thought I'd ask if you had any suggestions. [link] [comments]  | ||||||||||||||||||||||||||||
| Consider Tax Loss Harvesting International Stock Positions Posted: 04 Oct 2018 05:28 PM PDT TL;DR: International stocks have had a mildly bad year. If you have bought any lately, you might want to do some tax loss harvesting for the capital loss deduction on your current taxes. I recently took a look at the performance of my individual tax lots and noticed that literally every tax lot of VTIAX for the past year currently had a unrealized loss. I decided to realize the losses. In order to keep my overall international stock position, I did this by doing an exchange into VFWAX and VFSVX in a 90%/10% ratio. This results in pretty similar market exposure in the end. I'll then convert VFSVX into the ETF version VSS for the lower expense ratio. On the whole, this will increase my effective expense ratio from 0.11% for VTIAX to 0.112% (0.11% for VFWAX and 0.13% for VSS). The 2018 year tax savings are well worth that tiny increase in cost though. I'd encourage folks to look at whether something similar is right for your portfolio. Tax loss harvesting is a great clear win and pretty easy to implement which is why I prefer to do it myself rather than use Betterment or Wealthfront's service. [link] [comments]  | ||||||||||||||||||||||||||||
| Am I stupid: move to Ecuador, give up 6 figure salary? Posted: 04 Oct 2018 05:09 PM PDT So, here's the concept that I've been talking about with my fiancée (we get married Saturday!). What if we moved to Ecuador and made a go of it there? Together, we make about $175k USD per year right now. I'm on schedule to eliminate all of my debt by April of next year, and she has none. Six months past that, we'll have substantial savings. We've been looking at various life options. Living in Ecuador (Cuenca or Otavalo) is an attractive option, though it sacrifices a bunch of conveniences. Given this community's expertise, I'm looking for a particular type of advice - would a move of this kind jeopardize our ability to pivot and do something else 1-2 years afterwards? [link] [comments]  | ||||||||||||||||||||||||||||
| How does one manage to reach FI even on a limited income? Posted: 04 Oct 2018 11:27 PM PDT Title. I'm fifteen years old at the moment, studying in high school. I'm not really interested in STEM subjects, or rather... I am, but I just suck at the tests you have to go through in order to join STEM, so I'm sticking to business. Starting a business career will always generate a small amount of income, so how does one reach FI despite not making much, even at the start of their careers? Just thinking ahead. It'd be impossible to be financially independent at that age. I have 11,000$ USD in my debit card, I invested using my brother's account in the past and made this amount. I'm trying to start a small business as well at the moment, but I'm just struggling to figure out how life's gonna look like once I'm older as I'm not the brightest student academically. [link] [comments]  | ||||||||||||||||||||||||||||
| Teacher looking for some advice Posted: 05 Oct 2018 06:48 AM PDT I'm in year 3 of 7 (hopefully) in my financial independence plan. I'm a math teacher and have been renovating houses on the side for a while now. My plan has basically been to buy cheap rental properties, then spend 6 - 8 months renovating them and rent them out. I am able to do that because I have off in the summer. I'm really good at teaching and am paid really well, but the stress of teaching is getting to me. If I could find something comparable in terms of time commitment and pay that I could easily switch to I would be inclined to do so. I wouldn't want to go back to college for multiple years, work for two years and then focus solely on rental properties. If I was only two years a way from financial independence through managing my rentals I would just stick it out, but I can't come up with a way to expedite the process any further. Anyone have any advice? [link] [comments]  | ||||||||||||||||||||||||||||
| Posted: 05 Oct 2018 08:27 AM PDT I don't mean to discuss politics at this sub, but it relates to FIRE and I genuinely want to know the opinion of people who want to FIRE. I have wondered why politicians don't FIRE. While FIRE is becoming more and more of a trend, politicians seem to still work till very senior age. (just my impression from watching news these days. I don't have facts to support). 70s seems like their golden working age. Which private company is willingly to hire people over 60? age 40 and above is protected class by law. And why there is there life time appointment in our government? Maybe getting into politics is a good alternative if you feel bored after FIRE? I have a feeling I will get a lot of down votes. It is okay. I just want to know. [link] [comments]  | ||||||||||||||||||||||||||||
| Asset allocation for FI but maybe not RE Posted: 04 Oct 2018 09:02 PM PDT My wife and I are in our (very) late 30s and currently live/work in the US. Next year we intend to quit our jobs and move to somewhere in Europe (both of us are EU citizens). We have enough saved/invested to be comfortably financially independent though we don't anticipate this meaning never working again — we'd like to run a small business, maybe rent a house out, or something similar. We don't know when this would happen or how much it'd bring in. We have green cards now and intend to return them when we leave the US. Before anyone asks, yes, we are awful tech people. We've been incredibly fortunate and both my wife and I want to spend some of our time post-tech helping out others in some way. My question is regarding asset allocation given this uncertain situation. Currently we're about 50% VTI, 30% VXUS, and 20% BND and we have enough for a 4% SWR. We have enough cash for a year of expenses on hand. How should we think about asset allocation given we might or might not need to tap into some of the retirement money? Moving some money into bonds is probably a good idea but I also don't want to take too much off of potential growth as some of this money could be in the market for another 50 years. I realize that nobody can give a specific answer to this question. I'm more interested in hearing about how others in a similar situation (i.e. quitting work but not planning to necessarily retire) might have played this. I also realize that where we decide to live will have a big impact on taxes etc but I think this is largely unrelated to high-level asset allocation. [link] [comments]  |
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