Financial Independence Anyone else happier on auto pilot? - Quick Story |
- Anyone else happier on auto pilot? - Quick Story
- Is anyone else obsessed? Is it ruining your life?
- How to optimize ratio of tax advantaged savings with traditional savings?
- Daily FI discussion thread - January 08, 2019
- Proposed Sidebar Content - Defer to Mods on placement
- How do you deal with the crushing feeling that you might never be able to save enough even if you’re living a very frugal (and sometimes depressing) lifestyle?
- 45M, 5.5M - Interesting ride with a lot of hard work, obsession and luck
- LPT: You can still make Roth IRA contributions for 2018
- How well did your side hustles do in 2018?
- bonus distribution advice
- PTO Payout tax strategies
- Traditional vs Roth Account Funding
- What do you think is more important? Am I right?
- Is there a correlation between FIRE and Imposter Syndrome?
- Whats the point in saving for a pension if i know i will have a mortage in the future?
| Anyone else happier on auto pilot? - Quick Story Posted: 08 Jan 2019 09:40 AM PST 31M, married, 1 kid, NW $650,000 Background: When my wife I got married we were over $250,000 in debt (mortgage, student loans, car loans). We got into Dave Ramsey around 26 and I discovered FIRE about 3 years ago. I read all the blogs, listened to pod casts daily, and bought tons of financial books. I was checking my accounts using an app every few days, my wife and I were eating rice and beans. I was glad we turned our finances around but the stress of massive debt morphed into stress that my early retirement goals werent happening soon enough. But after awhile the information just seemed repetitive, and around the same time about a year ago my son was born. Ive been so busy changing diapers, cleaning bottles and doing all of the baby stuff that I just realized I havent checked my net worth in months. Having automatic deductions setup has been a blessing, it has allowed me to enjoy more important things in life all the while my money is working for me. Looking back I dont feel like checking my NW daily or constantly worrying about how to create side income or reduce my electric bill by 1% did all that much to improve my finances. Our budget isnt as tight as it has been in the past, obviously kids cost money to raise but we also pay for conviences we didnt in the past just because we have less free time. This will certainly add another year or two of working to hit our retirment number, but I think once you understand the core values of FIRE and get into a routine its best to take a step back and enjoy life, rather than get caught up in the stress of chasing wealth. Ill get off my soap box now, just thought I would share some quick thoughts with those new to FIRE. Ill check back in with y'all next year, hopefully with a NW north of three quarters of a million and maybe a new addition to the family. ~Spart EDIT: Sorry for the confusion. Many are correct that my NW at time of marriage was not negative $250k, instead we had $250k of outstanding debt in the form of a mortgage, two car loans and student loans. If you took libailities minus assets at that time our actualy networth was probably closer to -$50k since the home and cars could have been sold and repaid most of the loans. The goal of the post was to discuss the emotions and stress behind actively vs passivly achieving FIRE. The summary being im happier not micromanaging my finances and I am still on track to achieve FIRE. [link] [comments]  |
| Is anyone else obsessed? Is it ruining your life? Posted: 08 Jan 2019 11:28 AM PST Hello r/financialindependence, I am a long time lurker but a first time poster. Recently my girlfriend of 13 years left me. We had been dating since I was 14. It was all because of my attitude towards money. Here's some background: I grew up poor. My family was very blue collar. I lived in a trailer with my four siblings, Mom was a mechanic, Dad was a waiter and both we making minimum wage. Money was always tight. From a very young age my father instilled in me the value of money. It's what kept you alive, with a roof over your head and not starving in the streets. Spending money unnecessarily wasn't just stupid (Dad always reminded me that I couldn't afford to be stupid), it was a moral failing. It was sinful, and you should be ashamed of yourself for acting so badly. Growing up, I very much took this to heart. I could pinch a penny until it screamed. I started working at 17, and managed to put myself through college without any loans just by working full time. I lived in a 600sqft house with four roomates, eating rice, beans, tuna, milk and not much else. Any cost that could be cut, got cut. The way it should be. Drinking and going out?. Sorry, I can't. Split a pizza? No, I have food at home. Drive to Tahoe? Gas is expensive, and it's just cheaper to stay put. $10 a year for Netflix? There's a library up the road and it's free. I never even bought textbooks when I could help it. I could usually bribe someone to let me take it home for the night and photograph every page. My goal was to live off as little as I could stand. Which I calculated to be about $15,800 for my city. So that's that I did. I was lucky to major in computer science, it's a booming field with lots of high paying jobs and a shortage of people to fill them. I went from minimum wage to making $75,000/yr to $90,000/yr to $115,000/yr to $145,000/yr over the corse of my career. I'm 27 now, and I make almost 7x as much as most of my childhood friends do now. I refused to change my budget, minus a few COL adjustments. I was going to live off <$20,000 if it killed me. Spending money doesn't make me feel good. It makes me feel stupid, weak and honestly a bit sick to my stomach. Even now, my car is a beater, my cellphone is an old Android with a $5 prepaid SIM, and my clothes are all from the thrift store, I live with 3 roommates to keep my rend under $800. I don't want to change any of this, because that would be suboptimal. This obviously was a point of contention between my girlfriend and I. I met my girlfriend in middle school when she was 13, and we starting dating right away. To her credit, she stuck with me despite my compulsions. She never demanded much, just my time really. So we got along very well. She only just recently graduated from Medical school, and began her residency. In other words, she only recently began 'adulting' for lack a of better word. Now that she has a bit of freedom, she wanted to live her life. She wants to travel, go out to shows and restaurants, have a house with furniture in it, shop somewhere besides Walmart, get out of the ghetto. You get the idea, she wants to spend more money. Justifiably so, but it's so hard for me. I attempted to compromise with her. I began to rationalize my spending habits, agreeing to spend a bit more on things which were for her benefit. Never on myself, but I could do it for her. And I did, but apparently I have a way of taking the fun out of things. She told me my attitude has a tendency to sour things which should be fun. Which is true, I wasn't enjoying myself when we were out, I felt dumb and guilty. She said I ruined our trip to Paris, by looking like I wanted to die the entire time. It's all true. Anyway, long story short, she left me the other day. For the reasons I just told you about. I guess I just wanted to post here to see if anyone has had the same troubles I do. How do you deal with it? Has it negatively affected your life? Does anyone else here get physically sick when spending money? Thanks to everyone who can reply. Edit: Thanks everyone for your replies. It's given me a lot to think about. I don't think things between me and my (ex) girlfriend are irreconcilable, provided I can learn to be less stringy with my money. My immediate plan of action is two-fold. (1) talk to some kind of therapist about my issues, possibly a couples therapist. My girlfriend just so happens to be a psychiatry resident, so I happen to know quite a few. (2) Create some form of a budget. A lot of you recommend putting aside some amount of money every month, which can't be saved, and has to be spent on 'fun' things. It's going to take a lot of mental effort, but I think I can learn to be okay with this. I just need to remember that what I was doing before was a bit beyond the pale, and honestly not totally rational. Once again, thanks everyone. Sorry if I didn't get a change to reply to you, but I did read every comment. [link] [comments]  |
| How to optimize ratio of tax advantaged savings with traditional savings? Posted: 08 Jan 2019 09:07 AM PST I have been saving pretty well for 11 years and have come to a point where my tax advantaged savings (401k, Roth, HSA) is 5/6 of my total savings with 1/6 being accessable money. Now that I want to buy a house and need a new used car, I am starting to worry that my traditional saving is too low a %. If I was to be FI at 45, how do I determine a target ratio of tax advantaged to traditional savings? [link] [comments]  |
| Daily FI discussion thread - January 08, 2019 Posted: 08 Jan 2019 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]  |
| Proposed Sidebar Content - Defer to Mods on placement Posted: 08 Jan 2019 08:45 AM PST There are multiple comments in the daily threads per week that get downvoted or ridiculed that ask the same question. "Why contribute to accounts I can't access until 59.5 if I'm retiring early?" I get why the community is tired of it, but it's a very reasonable introductory question. It's addressed in the last question in the FAQ, but I think it's at least as useful as "build the life" or the "FIRE is and FIRE isn't" lists that have more prominent real estate now. Taking a crack at reducing the FAQ question below, but please suggest a pithier way to say it if you think that'd help. Why use tax advantaged accounts I cant touch until I'm 60 if I'm retiring early? A common concern is that 59 1/2 is the standard age in the US for 401K/IRA withdrawals. However, the tax advantages in these accounts shouldn't be missed and there are a few mechanisms outlined below to access that money early. link to: https://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/ [link] [comments]  |
| Posted: 07 Jan 2019 06:32 PM PST Sorry to be a downer, I have done a good job to date with the FIRE journey (I was doing something similar before I recently discovered this subreddit/movement), but now I'm at a point where saving is becoming very difficult due to rising costs and the stress of trying to keep my aggressive saving targets is putting pressure on my family. It's a story for another time, but my dad lived his own version of FIRE and it eventually tore my parents apart. I want FIRE but need to avoid his mistakes. I'm sure I'm not alone, so please be constructive. [link] [comments]  |
| 45M, 5.5M - Interesting ride with a lot of hard work, obsession and luck Posted: 08 Jan 2019 02:58 PM PST I truly love this sub. It's been my dream to become FI for a very long time and I'm finally very close, if not there. Here's a little background: Live; Northeast with 2 kids, 9, 12. Wife: Teacher ($90k salary), pension $1,200/mo. when she retires. Won't receive Social Security. Me: Business owner ($650k salary) Debt 1: $0 - primary home (worth $600k), cars, credit cards all paid for. Not included in NW number. Debt 2; $800k mortgage- secondary home (worth 1.4M) Not included in NW number. College 529 1; $126k College 529 2: $121k Expenses: $12k / mo. Includes taxes and insurance. Got a ways, but when kids move out it will go down by a few thousand. Investments: $3.1M - 85% liquid, 15% tax deferred, mostly index funds and a couple managed accounts. $2.3M - paid out over 7 yrs (sale of a business) It's guaranteed and in escrow. 168 payments starts when I "retire", aka, leave this company. I joined the company who I sold to and came on as an owner. $100k - part owner of a building. Pays $1,700 per quarter. I'd like to retire at 48. I don't think I'll make it to 50. [link] [comments]  |
| LPT: You can still make Roth IRA contributions for 2018 Posted: 08 Jan 2019 01:36 PM PST I know this is old news to most, but I am new to learning so much about saving and investing and until today I thought I had missed the boat for 2018. I just found out that you can contribute through the tax deadline for each year! So today I am contributing $11,500. Thought this information might be useful to someone. [link] [comments]  |
| How well did your side hustles do in 2018? Posted: 07 Jan 2019 04:13 PM PST Most people are doing their end of year expenses and getting ready for taxes. So how much did your side hustle bring in? Was it worth it? What was the YoY growth? Are you going to keep it up? [link] [comments]  |
| Posted: 08 Jan 2019 01:37 PM PST I was informed this week that i'll be receiving a $15k bonus by months end based on the past years job performance (construction pm). I plan to max my 401k last this year. I'm wondering if a bonus could be made as a direct contribution to a 401k to put a sizeable dent in the maxing goal. If so, is it treated just like depositing my entire paycheck would be, no tax at present time? Trying to see if there are any drawbacks to this plan I'm not seeing before speaking with my employer. only other thing I could think of is matching/employer contributions but those are not linked to an even contribution on the year so no worries about losing out on money that way. [link] [comments]  |
| Posted: 08 Jan 2019 01:35 PM PST I am expecting a large PTO payout in January. I would prefer not to lend extra withholding dollars to the federal government for over a year. What can I do to avoid having withholding taken out? I plan to bank the payout and earn interest on it until taxes are due. [link] [comments]  |
| Traditional vs Roth Account Funding Posted: 08 Jan 2019 12:38 PM PST Hello all, I am 25m, and I am looking for some outside input on my plan based on my numbers. I have read many posts and some of the sidebar, but I would like to read others opinions on what they would do in my situation and what they think of how I am using my money. I live in an LCOL Midwest town and work for government and have been for 2 years. Plenty of room for advancement for me and I plan on leaving government to go private to make more money even though I would not get the pension. Stats: Yearly Income: Primary Job: 62k Other jobs: ~12-15k Expenses: No debt Rent: 275 per month/ 3300 yearly(includes electric and water) Phone: 45 monthly/ 540 yearly Car insurance: 75 monthly/ 900 yearly Netflix: 10 / 120 Estimated expenses: Food/Eating out: 300-400/ 4800 (I eat out a lot...) Gas: 50/ 600 I am currently maxing out my Roth IRA and my Roth 457. I like the idea that I know I don't need that much money right now, so I am ok with it being taxed now so I don't have to worry about taxes in the future. Roth IRA: 36k Roth 457: 21k 2% savings account: 13k I would like to purchase a house in the future, but at the same time, my rent is so cheap, I don't know if I should even worry about it. My roommates are my best friends, and I enjoy living with them. But things will change in the future. Again, please let me know your thoughts. What would you do in my situation? Is it dumb to only use the Roth accounts? Thanks for reading! [link] [comments]  |
| What do you think is more important? Am I right? Posted: 08 Jan 2019 04:01 PM PST I've been getting into financial independence. I've noted down what I think the most important things are below, but I'm interested if you think there's anything that's more important? 1. Budget and pay attention to money coming in and going out. It sounds stupid to say that simple awareness is important. But for me it's key. Before I wrote down and analysed my spending I thought I was being smart. It's harder to justify buying 3 new video games once you've played them a few times and aren't excited to buy them. 2. Avoid debt like it's a Justin Bieber song. This has become a cliche here for a reason. When you have debt you're swimming against the tide. The sooner it's gone, the sooner you see yourself making progress. 3. Put money into an index fund rather than having it sit in the bank. It's easy to love watching your money in your bank. And it's not bad. It's just not as good as having it invested. 4. Live in a cheaper space. This is not for everyone, but I had to ask myself? Do I really need all this space? And then what was even more helpful was downsizing my space (by renting out a room) made me get rid of some extra stuff too. 5. Compare the thing that counts. I stopped comparing the car I'm driving, and started comparing the investments I've made. I thought cars are great because you can see what everyone else is driving, as opposed to investments where you have no ideas. Really, that's why focusing on investments are so important. You are focusing on yourself and making your situation better, rather than worrying about everybody else. I think these are the keys because they make a big dint in my investments (as opposed to making lunches, which is important - but has less of an impact). [link] [comments]  |
| Is there a correlation between FIRE and Imposter Syndrome? Posted: 08 Jan 2019 09:01 AM PST Just wondering out loud here. If I analyze myself, I don't think I dislike work or even dislike working on a schedule for a company. I was a very solid individual contributor (with good salary) that was promoted a couple of times to a point where I am managing a department. I'm decent at it, but it's a different kind of work (more stressful from an emotional standpoint). I can't turn it off. It's probably not the best fit for my personality and I frequently think I suffer from Imposter Syndrome. I long to FIRE and find myself spending too much time here or analyzing my portfolio spreadsheet. Sometimes I think, once I FIRE, I'll get out and nobody will be the wiser that I feel like I've been faking it sometimes. I wonder if I was in a better role for my personality that that particular low-level numbing stress would disappear and I would no longer be so inclined to FIRE. Anyone else think there may be a correlation between FIRE and Imposter Syndrome? [link] [comments]  |
| Whats the point in saving for a pension if i know i will have a mortage in the future? Posted: 08 Jan 2019 12:59 AM PST Hi financial independence guys! I have been unable to shake this idea recently. My understanding is that if you have two financial options you should chose the one which maximises your returns and minimises your loses over time. For instance i know that my student loan interest is approx 2% (i live in the UK) so i pay back the minimum i can because i assume market investments can gain me more (i assume market return to be 5% for some reason - i have been told that is a conservative estimate). I also know that in the future (approx 5 years) i will have a mortgage which will be significantly more interest than any gains on a pension. So... There is no point investing in pension right now i should just make short term conservative investments and save for paying off my mortgage. For this reason i opted out of the NHS pension in order to maximise savings for my mortage. Another reason i am aversive to pensions is they lock your money away until i am old... And i intend to retire earlier. I know the NHS pension has alot of good benefits but i intend to be a freelance worker and travel so i wouldnt use the NHS pension in future also. I feel like there is something wrong with my logic but i dont know why. I just know most people say pay into your pension but i think most people are brainless when it come to money. [link] [comments]  |
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