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    Financial Independence The Value of Health

    November 22, 2018

    Financial Independence The Value of Health

    The Value of Health

    Posted: 22 Nov 2018 08:07 AM PST

    I thought it might be interesting to contribute a post on my limited 5 year experience in health care on the value of fitness and taking care of your health.

    I work in primary care which is preventative health and management of chronic conditions, as well as gatekeeping to other specialities.

    This is a combination of finding and treating bullshit unavoidable stuff (cancer, accidents, weird viruses, autoimmune disease) but the bulk of practice is treating diseases of lifestyle with expensive pills and surgery.

    The consequences of obesity:

    The classic overweight 50 year old guy will require:

    Pills for diabetes. 200-800 dollars a month. Pills for gerd. Sleep study and cpap machine for apnea. Cholesterol medication. Joint replacement at 60 or so for 40k. Blood pressure meds add another 50 dollars or so. Eventually your back will probably suffer and you may end up in pain management as well. 20 percent or more of patients with all the above will have a major cardiovascular event (thousands of dollars) despite all my best efforts. Without a doctors efforts these diseases will slowly take their toll by your mid 50s usually if they've been chronic.

    Add in smoking: Inhalers for copd 1-200 a month. Extra cardiovascular disease. Strokes, heart attacks, clogged arteries to your major limbs. Eventually oxygen. Once you hit 6 liters you can no longer use airplanes or trains to travel. Many cancers can cost hundreds of thousands to treat.

    Stress: I treat dozens of people for job related anxiety. It feels wrong, but they cant quit because of their choices earlier in life. This affects sleep, appetite, relationships. They end up on pills to maintain their lifestyles.

    Do not neglect your health on the path to FIRE. The bulk of my job is treating lifestyles with pills. I always push the alternative but most don't take it. I charge a lot of money to do that, and the drug companies charge a lot more.

    Don't smoke. Dont drink too much. Dont get fat. If you're fat, get unfat while you're still healthy enough to do it. Take care of your mental health. See a doctor once a year once you're 30 or so they can head off some of the preventable bullshit. This will save you tens of thousands of dollars.

    Happy thanksgiving

    Also, dont seek out medical advice on the internet it's a bad idea (Twitch plays fix your complex autoimmune disease has a bad ending). Therefore I wont give medical advice beyond the above

    submitted by /u/andrewjs42
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    How much less do you need to FIRE as a couple?

    Posted: 22 Nov 2018 07:05 AM PST

    Hypothetical question, and probably a realistic one to those who have done it (but they would have no control group): as a percentage of your FIRE amount, what do you think a couple needs. E.g. So if I need 100%, my spouse and I, living as a couple, would likely need 175% of my FIRE amount. Assuming we both earned the same. Hopefully the answers are not "too many variables". I basically want to see how much sooner 2 people could fire than 1.

    submitted by /u/randy_joker
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    Giving thanks and 6 months post-FIRE progress report

    Posted: 22 Nov 2018 11:53 AM PST

    I'll make it brief....

    I'm thankful for FIRE. And this sub, of course.

    Money wise, effective WR went up from 3.1% to 3.35%, mostly due to market performance, but expenses went up a notch - gotta keep an eye on that.

    Most hobby plans and travel plans did not take place. Not complaining - new schedule, new gf, no great motivation.

    Startup idea sort-of possibly failed. On the lookup for another brilliant yet fun enterprise. Not in a hurry.

    Physical shape improving though slower than desired.

    I'm not totally happy, but I'm happier than I've been in decades.

    Best. Decision. Ever.

    submitted by /u/MobiusGripper
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    On cheese, board games and the long term efficacy of index investing

    Posted: 22 Nov 2018 02:05 AM PST

    TL;DR: There is a board game called Cashflow developed by Robert Kiyosaki that is a good way of drilling in some of the FIRE concepts in a fun way. Focus is more on increasing income than decreasing expenses. Raises the point of whether time spent saving might be better spent on side gigs; also whether activist 'investing' in real estate or side business is better than indices in setting you up for post-FIRE opportunities.

    ASIDE: I know Robert Kiyosaki has attracted his fair share of flak but I do still think that for a median income earner who is a bit more motivated and focused than average his whole process of moving from employee to self-employed to business owner is probably the only route to FatFIRE and in many ways a superior path to FIRE than salary and frugality. Obviously combining frugal living with any other strategy still gets you there fastest and gives you the most rope to see your ideas through, but I do think creative income maximization could maybe get a bit more attention than you see in YMOYL/ERE/MMM.

    On to the Cashflow board game: My father was a small business owner who was a big Kiyosaki fan and got his boardgame, Cashflow, when I was around 13. I was not a fan at the time, given that whenever I had my friends over he would try to get us to play it. No one was really that interested since you have to balance your personal finances and invest sagely – for most people basically the worst part of your life. However the game does actually make it quite fun and in retrospect I wish some of my friends paid more attention.

    Anyway some interesting points that the game raises:

    • You get given a career and set expenses at the start of the game, the aim being to use your savings and disposable income to generate passive investment greater than your expenses. At this point you exit the 'rat race' and enter the 'fast track'. In the fast track you choose a 'cheese' at the start of the game – a 5 star holiday, large charitable donation etc. Once you can afford this you've won the game.
    • You cannot decrease your expenses but you quickly notice that a doctor with high disposable income but high expenses often has a tougher time getting out of the rat race than a janitor.
    • Investment is quite activist and real-estate focused. While I am by no means bullish on G10 property prices at the moment, I do think this is a valid path where spending 5-10hours per week can result in very good excess returns – ie learning how to find value, looking at and negotiating down on a lot of properties, Airbnb'ing it out yourself etc.
    • 'Cheese': This has become something of a joke in our family, when you want to justify a big ticket spending. I recently hit a FIRE milestone but probably will end up not buying the cheese because of meh. Its more about the chase than the reward. I do think this is a good system though, especially if you have a SO who is less on board with the frugal/hardworking life and need some material rewards along the way.
    • Fast Track: His point is that once you are out of the rat race, have several business interests and a lot of free time, your earning potential can really take off. I think this is a valid point often missed by the FIRE community, where the focus can sometimes be too focused on just getting away from a 9-5. Specifically, index investing gives you little to work with post-FIRE, whereas more activist side gigs can then possibly be leveraged into something with more upside.

    Interested to hear thoughts on this last point – for myself, I think reflationary monetary policy has caused equities (and most listed instruments) to hit stretched valuations about 2years ago and have not invested much since then. I am rather keeping 80% of my savings since in very safe interest-bearing investments and invest the other 20% in risky startup-type investments, where upside is large and extra time spent and contacts made along the way can yield very good results. Case in point, I am busy exiting my first investment successfully for a 5x payout – by no means the norm but it is striking how much more enjoyable (and obviously easier) this has been than any other way of earning money.

    submitted by /u/tehbamf
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    Daily FI discussion thread - November 22, 2018

    Posted: 22 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.

    submitted by /u/AutoModerator
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    How do I calculate my net business profit if I have mileage deductions? I want to see how much my SEP IRA contribution will be.

    Posted: 22 Nov 2018 03:28 PM PST

    How do you stay motivated to make a lot of money.

    Posted: 22 Nov 2018 12:52 PM PST

    So i hear alot from rich people that you need to have a reason why you want to make a lot of money. How does one find such a reason. Apparently it really helps with staying motivated

    submitted by /u/ExelsioHD
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    Should I leave my defined benefitd pension?

    Posted: 22 Nov 2018 01:21 AM PST

    Hello.

    I'm torn as to whether or not to leave my Defined Benefits Pension, which is paid until death.

    I am 27, and have been contributing to the pension for about 4 years now - it's about £330 a month. I contribute 11% of my salary, and my employer contributes 14.2%.

    Within the current scheme, I can leave at age 55, and assuming I have an annual wage increase of 2% for the next 28 years, I can leave with a lump sum of £50k, and an annual pension of £10k.

    This sounds great, but there is actually no guarantee that the pension will remain the same. It has been the case that the pension has changed in the past, essentially moving peoples' pension ages and contributions - there is currently a legal battle about this. Pension payments and lump sums were slashed in half, and people had to work an extra 5/10 years, as well as increasing the percentage of their contribution.

    It could be the case that I will be forced to work till 65 in an administration capacity, for example.

    I'm thinking that I could just bite the tax bullet, and just invest the NET amount of my money which would have otherwise gone into my pension - meaning I could invest about £260 into a 5% return investment, thus gaining me quite a bit of money in 28 years...

    I would also have the freedom of leaving my job when I wish, and not have to abide to a minimum leaving age.

    With regard to my other finances, I currently comfortably put away £1300 into an index fund, monthly. I am hoping to have just over 600k in 18 years. With the extra £260 a month, the compound interest would be even greater.

    Thoughts?

    submitted by /u/Fickle_Monster
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    Are there ways to achieve financial independence without a 401k?

    Posted: 21 Nov 2018 08:57 PM PST

    I'm a single, 29-year-old male with a lifestyle and values that are conducive to FIRE. I recently switched careers from the natural sciences (mostly seasonal positions) to working as a carpenter. I have never had a job with a 401k and I currently work for a small company, there are three of us including the owner. I make $25/hr and expect to save about $25k/yr at my current wage (50% savings).

    For reference I currently have:
    * $18K in a Roth IRA (vanguard)
    * $10k safety net (half in vanguard, half in Ally)
    * $44k in a personal investment account (vanguard)

    Are there other tax-advantaged places to put my money? I will not have a problem putting $6k into my Roth IRA. Where should I put the other $19k?

    I've read a lot of useful info on here but haven't come across much about not having a 401k. Should I think about getting a job with a 401k? Is there something else I'm missing?

    Thanks for your advice.

    submitted by /u/shantyboat
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    HSA experts, is the tax advantage the same if I'm buying my own health insurance?

    Posted: 21 Nov 2018 07:32 PM PST

    I'm shopping for a new plan and trying to determine if an HSA is the right fit. Since I buy my own insurance I would have to make my contributions after tax and claim a deduction. If I'm planning on taking a standard deduction, would that be separate or would the HSA contribution get rolled into the standard deduction and I effectively lose the tax advantage. If it's the latter, it seems like the money would be better off in a brokerage account since my LTCG is 0% and I intend to keep it that way.

    submitted by /u/iscolleen
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