Financial Independence Daily FI discussion thread - November 06, 2018 |
- Daily FI discussion thread - November 06, 2018
- How important it is to save while in college/university? (EU Emigration case)
- FI/RE starting out with little
- Why did you decide not to have kids? Was FIRE a big part of that decision?
- My fellow SoCal FIRE enthusiasts: Do you ever plan on buying a home?
- In higher income areas, how does your living situation impact FIRE?
- How to factor a fixed monthly pension into overall net worth?
- Life expectancy for high-functioning autism is about 55 years old. How should I plan?
- Starting new job, going to have decent income to invest. Should I invest in Cryptocurrencies?
- FI in a Big City
- Is my FIRE number really only $72k? Tell me where I screwed up.
- Finding the motivation to make more money
- I'm extremely fortunate to have landed a job @24 making ~100k while doing absolutely nothing every day. How can I accelerate FIRE while at work?
- Ethics of credit card rewards
- My Plan: Ultra Lean Fire -> FIRE -> Fat FIRE
- Bond tent duration
- Question for any early retirees who jumped with less assets than was recommended or is regularity suggested in this sub: how’s it going?
- Over 50, pursuing FIRE, Income is good, Outgo is almost negative not considering 15% SR in my 401K.
| Daily FI discussion thread - November 06, 2018 Posted: 06 Nov 2018 03:07 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| How important it is to save while in college/university? (EU Emigration case) Posted: 06 Nov 2018 07:07 AM PST Hello, I am fairly new in this group, however I have noticed most of the people posting here are from US, where education is very different than in where I live. I am originally from Lithuania, 21 year old, since age of 17 I have started working various jobs part-time. I am currently studying in Denmark (mainly because of study quality and monetary reasons), here as a foreigner I am entitled to 800$ (after tax) per month funding for living expenses, while having an education, which is free anyway. Together with the funding from the government, I make around 1600$ per month after tax, at an hourly rate of 11-12$ after tax, which is around 70 hours per month. I managed to set aside 5000-7000$ per year, because I used to work full-time during summers. I am planning to do masters and finish it by 25(4 year bachelors, 2 year masters). I have currently saved around 15000$ and so far I do not regret it. However, I am also very much study-oriented, which means I also spend a lot of time studying in order to stay ahead of others. This leaves me with not much social life. I see my friends partying, traveling, seeing other countries and making trips, while i am just busting my ass university-job-sleep-repeat. All decisions I am doing now have been influenced by the fact, that I used to read a lot about personal finance at age of 17. However I very often think that it might not be worth it, because even though I save much more money than my peers, who expend everything - I end up in a circle, where my whole life becomes just like a game of money. Another reason, that influenced my decisions, was that average salary in my own country is around 600-700$ after tax, i could expect to have a starting salary of 1000$ after tax with my degree and have a save rate of 15% MAX. Finding a professional job abroad w/o pure fluency in local language(I speak limited local language) is nearly impossible, so I have almost accepted the fact that I will have to come back to my home country and start with low salary, which would mean, my sacrifices now are equivalent to 3-4 times the sacrifise I would have to make back in my home country. Because of all these reasons, I am debating whether I should stay focused on increasing my capital or just take a shift per week less, which would leave me with being able to save 3000-4000$ per year instead...Has any of you been in similar situation, what choice did you make and did you regret it or not? Everyday, when my studies are followed up by an afternoon shift and studies at home, I just think that I will be very happy later when I'll be done with it. But seeing nothing aside of university and job until 25 seems like a waste of youth. NOTE: I also have invested most of my money and expect to grow at a rate of 5-6% a year, in the end I would plan to end up saving around 50000$ if i would stay consistent as I was until 25, on the other if I would reduce my current consistency by working less, I would end up having around 35-40k. The difference is around 4 years of saving at an expected salary in my home country [link] [comments]  |
| FI/RE starting out with little Posted: 06 Nov 2018 10:47 AM PST Hi I recently in the past year have started researching and reading a lot about this topic. My one gripe is that many of the blogs I read 1. don't really give any details on how they started and 2. if they do give details, they started out with hundreds of thousands. Do you have a good blog suggestion for a 30 y/o w/ 2 small kids w/ little debt? But not over 100k in savings like most of the bloggers seem to have started with [link] [comments]  |
| Why did you decide not to have kids? Was FIRE a big part of that decision? Posted: 05 Nov 2018 11:12 PM PST I went through the survey results this sub completed recently and after going through the numbers approximately 1/3 of us do not plan on having kids while the other third plans or already has kids and the last third is still undecided. Statistically this community has a much larger percentage of people deciding not to have kids. Some studies state depending on country average is 10% - 20%. Quite recently my partner and I decided it is best for us not to have children although this might change in the future a big part of it was the freedom to do what we want and being able to FIRE almost 25 years earlier. So I want to ask those 33% of us, why have you also decided not to have children? [link] [comments]  |
| My fellow SoCal FIRE enthusiasts: Do you ever plan on buying a home? Posted: 05 Nov 2018 11:02 PM PST Median home price in orange county is $785k. 20% down payment is $157k. 4% 30 year mortgage - monthly MTG is $3008. *add repairs/maintenance *add real estate taxes What are your plans for home ownership? [link] [comments]  |
| In higher income areas, how does your living situation impact FIRE? Posted: 06 Nov 2018 06:58 AM PST I live between Baltimore and DC. Naturally, housing is expensive. For those that live in expensive areas, do you rent or buy cheap? Do you buy a nice home and consider it an investment? Does the thought of a mortgage clash with your FIRE goals? [link] [comments]  |
| How to factor a fixed monthly pension into overall net worth? Posted: 06 Nov 2018 05:53 AM PST This is something I've wondered for a few years now, when trying to compare a pension to something like an IRA. I'm in my early 40s and have access to a pension (military retirement) that just kicked in. It pays a set amount each month for the rest of my life, with a small annual COLA. How do you calculate a fixed pension into your net worth for FIRE purposes? The best I can come up with is to estimate the number of years of life remaining and multiply it out. So for example my pension could be over $1.5 million over the next several decades. There's also VA disability which when it kicks in will add a fixed non-taxable amount on top of that. Is there a better way to handle this? [link] [comments]  |
| Life expectancy for high-functioning autism is about 55 years old. How should I plan? Posted: 06 Nov 2018 12:16 PM PST I would like to be financially independent at least for a little bit in my life. I'm 37, no savings because most of the jobs I've had were close to minimum wage. I've also dealt with depression and isolation since I was a teenager and my only friend recently passed away and I have no other friends. I am not slow enough to be diagnosed and receive help, but I am not functional enough to be successful. Any advice would be highly appreciated. Thank you. https://www.healthline.com/health-news/why-people-with-autism-die-at-younger-age [link] [comments]  |
| Starting new job, going to have decent income to invest. Should I invest in Cryptocurrencies? Posted: 06 Nov 2018 03:49 PM PST Hey guys, Starting new job. I'm currently single and don't have many expenses. I'm going to have around $4,000 per month to invest. I'm thinking of buying bitcoins with this. (If I cut down on my other expenses, I can get to about $5000 per month to invest). Is there a better investment strategy? Maybe invest in Vanguard index fund? [link] [comments]  |
| Posted: 06 Nov 2018 03:25 PM PST Has anyone here achieved FI while living in a big (expensive) city such as NY? I'd love to hear about your journey and any advice you have to a young 20 something y.o. Mine is just starting. First year of a career in economics making ~70K at a big company. I'm paying 1k/month for rent and saving about 1.2k/month with 13k already saved. Patience and happy saving, everyone. [link] [comments]  |
| Is my FIRE number really only $72k? Tell me where I screwed up. Posted: 06 Nov 2018 12:20 PM PST This is longer than I expected, apologies in advance. I just had a few major life disruptions in the past two months. I'm still trying to wrap my head around everything mentally and emotionally, but as an effort to stay sane I want to grab onto something to work towards, and I was always interested in FIRE, so... Basically I'm looking for a WAG check here, nothing fancy and in-depth, just a back of the envelope gut check. I'm not going to invest a lot of energy into twiddling with all the details right now, but if I have the basic numbers down right and know the rough order of magnitude of effort involved I will have my feet under me a bit and it will give me something to aim for. So here goes. In the past two months:
So yeah I'm spending a lot of time trying to stay emotionally sane right now, because we struggled and kept our routine expenses way down for almost ten years now and she was supposed to reap the rewards of this huge opportunity that just landed in our lap. We were just starting to relax financially and emotionally and celebrate a bit when the stroke happened, so she put in all the work keeping us thrifty and doesn't get any benefit. Which sucks. But anyway. She would want me to move forward so here I am. I'm checking my numbers to get an initial WAG on my FIRE number if I were to tackle this, and what I'm getting right now is kind of surprising so I want to know if I'm way off base here. I just started a new job so some of this is an estimate since I've only gotten one paycheck from them so far.
The last line is based on the consensus from my previous post, treat the pension + VA disability as reducing my monthly cashflow needs. According to this my FIRE number is 25x the last line, which is a bit over 72k. Is this for real? Is a reasonable WAG FIRE number for my current lifestyle, taking into account pension + VA, really only 72k? Because if so that means I'm within $250/month of that now. I have enough of an emergency fund left in the bank after the funeral and flying the family in/etc to not overstress right now. Some CC debt that I can pay off in the next couple months. No investments. Wife had a small life insurance policy we just set up a month ago through my job and also a small IRA, both of which I'm passing on to her kids as much as possible because they need it far more than I do. We have a home with about $70-75k still owed on it, valued somewhere between $85-105 depending on the market. I may be willing to upgrade to a $200k house in the future (which is quite nice for my area) but for the next five years or so I'm going to focus on paying it off and making a bunch of improvements. (remodel kitchen/bathrooms/etc that are sorely needed but we always put off) I live in a relatively low COL city of about 200k people in the deep south, which sucks because it is a wasteland in terms of culture and things to do but the average household income here is a little over $40k. So I'll be taking home almost triple that after tax which is insane, and I need to figure out what to do with all this extra money that is starting to rain down since I no longer have a "purpose" for it (i.e. use it to bring my wife joy and enable her to bring joy to others) and I don't want to go into "retail therapy" and elevate my lifestyle without thinking things through. I'm not the type to live on rice and beans the rest of my life. I like some creature comforts. But there isn't a lot that I "must have right now" though I absolutely will pay for high quality stuff that lasts. But other than those more premium purchases I've been able to have all that I really need and much of what I want in around $3.5k/month anyway, so I'm trying to gauge my current situation from a FIRE standpoint (or FI since I intend to keep working in this amazing job as long as possible). If that number really is $72k then I can hit that in my first couple years on the job pretty easily. That would give me a ridiculous amount of comfort knowing that safety net is there. Only question then would be whether that money should be used for FI or to pay off the house. I'm not making any major financial decisions for several months at least in my current state, just trying to get a sense for where I am and how far I have to go if I head down that road. Sorry for the long-winded rant, this past two months has been a whirlwind and I'm using reddit to stay sane. Thanks for any thoughts y'all have. [link] [comments]  |
| Finding the motivation to make more money Posted: 06 Nov 2018 10:08 AM PST I used to have $30k of debt + mortgage, checking account always between $1,000-3,000, stressed out all the time. I was motivated to get out of debt, and not live paycheck to paycheck. Now, the only debt I have is my mortgage, which is cheaper than what I'd be paying to rent in many cases in my area. I have about $40k saved up, max out my IRA. My problem is have always dreamed of being a millionaire, and having all the material things I've always dreamed of, but more recently, I've found virtue in the Mr Money Mustache philosophy and minimalism. So these conflicting ideals leave me with a lack of motivation to earn more money than what I currently earn. I'm self employed, so my earning potential is highly dependent upon my actions. I don't see myself EVER buying that Tesla car I dream about because I can't justify it when I need to think about my FI number. I am no where near being financially independent by any means, yet this is the first time in my life where money isn't a constant emergency anymore. If I had a $1,000 surprise expense occur, it wouldn't phase me at all. I'm just finding it really hard to motivate myself to earn more money to reach FI. I'm comfortable. Maybe I just feel like it's unobtainable. Or maybe I don't feel like FI would feel much different than I feel right now. I'm not stressed, I enjoy my work. idk. Anyone else feel this way? You just get to a point where money's not an emergency anymore, and no longer have the motivation to earn substantially more? [link] [comments]  |
| Posted: 06 Nov 2018 01:26 PM PST I work as a software engineer for a massive medical company. I make one bug fix every couple weeks and then send the code to testers to do the rest of the work. My company has no plans to let me go (my boss's words, not mine). My company doesnt offer a 401k so I am maxing out my Roth IRA as well as saving 20% of my paycheck every week to eventually buy real estate. Since my company pays for graduate school, I'm taking online courses to obtain a master's degree in comp sci because why not. I watch the online lectures and do the homework at work. Is there anything I can do at work to make more money? I've dabbled into blogging and writing tutorials online, but haven't made any money with that yet. Part of me would like to quit and work at a company where I'm constantly coding and learning new things. Life isn't just about money... but another part of me thinks I've hit a gold mine and I should stay here a little longer. Thoughts? [link] [comments]  |
| Posted: 06 Nov 2018 03:36 PM PST Lots of FIRE folks use credit card rewards for flights, or cash back on groceries, gas, etc. Does anybody ever wonder how credit card companies can afford to pay back these kinds of rewards? Credit card companies make money in 3 ways:
I've read that the majority of the revenue comes from interest rates and fees, *not* the interchange fees. Put another way, the only way the companies stay profitable is to trick suckers into paying insane interest rates upwards of 12-20% and nail them with fees (credit limit fees, late fees, etc). The companies target college kids who haven't developed good spending habits but will be able to make payments once they enter the labor force. So sure, even though responsible people can avoid the interest and fees and therefore come out ahead in the rewards, you're riding on the backs of everyone else who foolishly falls into the trap set by the credit card companies. The whole thing seems rotten to me, so I refuse to participate. Prove me wrong? [link] [comments]  |
| My Plan: Ultra Lean Fire -> FIRE -> Fat FIRE Posted: 06 Nov 2018 12:45 PM PST What do you guys think of this plan: I plan to retire with $1mil-$1.3mil and then ultra lean fire in Southeast Asia (Thailand, Vietnam, etc) Spending will be $1000-$1500 month tops. Withdrawal rate for that will obviously be 1.2% to 1.3%. Perhaps I will only withdraw from quarterly dividends that funds payout. The reason is to let principal grow as well. I am hoping for 5-7% growth as I am 100% equities. When my portfolio grows to $2mil to $2.5mil, that's when I will likely be sick of living in SE Asia and probably want to move back to somewhere in North America or travel to Europe. I will keep my withdrawal rate at 2% to let my portfolio grow. AKA budget of $40K - $50K per year, which is standard living wage. Then my portfolio should slowly grow to $5mil+ which will allow me to fatfire at $100K-$150K per year. [link] [comments]  |
| Posted: 06 Nov 2018 11:31 AM PST We are about to semi-retire and I'm wondering what my bond tent size and duration should be. 47m/37f plus children. I recently received a large payout that needs to be invested, it's currently parked in a Vanguard money market account and some savings accounts. My plan is to dump these into a Vanguard bond fund immediately, then rebalance a small portion to my final allocation monthly - basically, a slow DCA that's effectively a bond tent. My question is, what should my bond tent timeline be? I think the chances are it's a bad time to move money into the market, but on the other hand I can easily imagine this bull market lasting 3 years followed by a crash. It would be nonoptimal to overweight bonds for 3 years of bull markets, then be in my normal allocation just in time for that :) My thought are: 1-2 years of monthly DCA from bonds into my allocation Allocate half immediately, then 1 year of monthly DCA of the remainder. Is this timeline too short? Thanks for any advice! Our assets are, not including savings to cover taxes between now and April: 1MM in Vanguard index funds 4MM in Vanguard money market and savings accounts about 1MM in two single-family houses (one being rented) Liabilites are: 650K in mortgages on two houses, 4% and 5% 100K in college debt, 6% Planning on paying off the college debt and semi-semi-retiring sometime in 2019 with maybe $100K total net wage income and $6000 in net rental income, then further reducing my income in 2020. [link] [comments]  |
| Posted: 05 Nov 2018 06:45 PM PST |
| Over 50, pursuing FIRE, Income is good, Outgo is almost negative not considering 15% SR in my 401K. Posted: 05 Nov 2018 08:10 PM PST Throwaway here....sorry for that. I am looking for input on my FIRE plan and complications RE:spouse, kids and college as many my age-range may have gone through. The sitch: Income - $220K Gross including bonus for me, wife is PT and $20K per year Net. Savings: 950K in 401K, $150K in cash in a HYSA, $25K in a local bank for an E-fund. Debts - $250K on a $480K home. No car debt, no CC debt. One child in Junior year of college, all paid up through graduation, one child entering college next year with CCP classes done that will only require 2.5 years of school to achieve a CS degree and >20K cost on my side (50-50 cost for my kids). The plan is I want to RE at 58 but spouse has enjoyed a nice lifestyle that she enjoys (I grew up poor and am frugal) and is 7 years younger and grew up semi-wealthy. We have very different ideas about finances, but, after 26 years of marriage, I realize I am not looking for relationship advice. I have explained my interest in FIRE, but, she can't grasp scaling back as we move toward empty nester life. Money in the bank is money to spend despite my direction of a budget and sticking to it. (sad face) My question to the community is if you have been in a similar situation, what worked for you. [link] [comments]  |
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