Financial Independence First Full Calendar Year RE’d. Finances better than expected! |
- First Full Calendar Year RE’d. Finances better than expected!
- Sitting on $2 million and don't know what to do with it. I want to simplify everything.
- Daily FI discussion thread - January 06, 2019
- Quit easy, pleasant job, and possibly endanger relationship, to travel?
- Traditional or Roth 403B?
- Working to 35-40 so that children can have FI
- Best advice for young couple?
- Getting started young with decent income
- What inflation rate to use with swr?
- Are there pitfalls to the solo 401(k)? What about spouses and prenups?
- I am unhappy with my life at 45 years old, but have put away USD750k. I am thinking about FIRE but I am lacking courage
| First Full Calendar Year RE’d. Finances better than expected! Posted: 06 Jan 2019 12:07 PM PST 2018 summary: Excluding healthcare and taxes, I spent $21k. I spent $7.5k on healthcare, and expect to spend about $3.5k on taxes, so my total expenses will be about $32k. I earned $41k from rent, interest, dividends, and a few other small things. Thoughts and Plans:
Background from previous posts: I left a good job in my mid-30s due to chronic pain. I had been working toward a regular-FIRE in about 5 years, but due to circumstances I thought it made more sense to lean-FIRE immediately and focus on my health. So I FIRE'd in early 2017, a mid-30s guy with no wife or kids. It was definitely the right decision for me, as my physical health has improved a bit, and my mental and emotional health have improved a ton. Strategy: Moved out of paid-off downtown condo in MCOL city, into a large paid-off house in the suburbs where I rent out 3 rooms. I rent for slightly under-market so I can pick roommates I really like. It's paid off financially, and I like my roommates. The rest of my money is invested mostly in income producing assets, like high dividend yield funds, REITS, and Bonds. I also 2-3 years of expenses in vanguard's MMA and rolling 1-yr CDs. * Mentally, I find it much easier to "live off my income" rather than having to sell my assets to get by. I know it's not totally rational. But one of the best things I've done for my emotional health is to accept that I'm not 100% rational, and to balance what is rationally the right decision with things that make me emotionally stronger. [link] [comments]  | ||||||||
| Sitting on $2 million and don't know what to do with it. I want to simplify everything. Posted: 05 Jan 2019 09:59 PM PST Long story short some life events happened where today I am sitting on $2 million and I became financially independent overnight. I am in my mid-30s. Half of it is in cash and the other half is "invested": Betterment, Wealthfront, a Vanguard money market account, and some t-bills. No debt... house and two cars are fully paid for. I've lurked long enough to know most people will tell me to put it in to VTSAX and forget about it, but I am not sure that's enough. Most of what I have read here is for people on the journey towards FIRE. I'm already there (very quickly) with a bunch of cash and investments all over the place. The market has been rocky the last few months and each time it's gone down I invested some of my cash to catch some discounts. Most recently was a few weeks ago when stocks fell 5%. I feel like I should get out of robo-advisers entirely and throw all the money into Vanguard funds. I was thinking of this portfolio:
Simulations on portfoliovisualizer.com seem to look good on this... but shouldn't I hold some international? What I like about this is it grows with the S&P500 but isn't as volatile. I could dump VWELX and buy more VTSAX, too. Also, what about market timing? I know that lump-sum is statistically a better option than trying to time the market, but we've been in a bull run for quite some time. I think recent volatility shows that some investors are skittish and are pulling out for fear and each time they do I can buy at a discount. Maybe I can DCA a fixed amount each month and throw more in each time the market falls. Thoughts? Lastly, the FIRE part... what's a good strategy on living off this money? 3% rule puts me at $60K. If I pull this out Vanguard funds won't I owe taxes? About how much is estimated? I can't really find a clear answer but it's be nice to know if I can spend the full $60K or if I have to send $10K to Uncle Sam. [link] [comments]  | ||||||||
| Daily FI discussion thread - January 06, 2019 Posted: 06 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]  | ||||||||
| Quit easy, pleasant job, and possibly endanger relationship, to travel? Posted: 06 Jan 2019 11:19 AM PST Apologies in advance for writing a novel, and thanks for replies. So here's my situation, I'm in my mid thirties, live in a small rural town in a very LCOL area. Moved here from a large coastal city a few years ago with my partner (who works in the medical field). Financially, I'm working a job I really like (making about 25k a year- low, but decent pay for this area- more on this later), and have approximately 1.1 million in equity in rental real estate. After all expenses, I net about 40k-50k a year from the rental property. It's all conservatively financed with fixed rate mortgages (some free and clear), and in several different metropolitan areas so fairly diversified geographically. I've always preferred investment property over the dominant VTSAX option on this board- that's another topic for debate. I live very modestly- housing expenses are only a couple hundred dollars a month, I drive an old, paid off car, don't generally live lavishly in terms of food, clothes, etc. All in all, my expenses generally don't go above $1,000-$1200 per month. My partner is also on a similar path (basically the same outlook on spending and investment- we're both fully onboard with the FIRE philosophy, just more based on real estate than index funds), although with much higher earning, though a lower base of property ownership. So, the one thing I really, really love more than almost anything else is traveling. I know that's not terribly unusual, I'm kind of a stereotypical (older) millennial in that regard. I spend hours a week reading travel blogs, fantasizing about new destinations, reminiscing over trips in the past, etc. I get excited butterflies in my stomach on the lead up to a new trip, and am a fairly enthusiastic travel hacker (the credit card points and miles game). In my life for the last 10 years or so I've taken between 1-2 longish (by American standards) overseas trips of usually around 2.5-3 weeks each to different areas. I've had a blast on every single one and fondly remember all of them. However I've never taken a really long, involved trip (ideally of 3-6 months, possibly even longer)-enough time to truly be on the road exploring, and really feel like I'm traveling, not just taking a trip somewhere for a couple weeks then coming home. However, I've dreamed of something like that since high school. I just get this intense, visceral thrill when going somewhere new, exploring exotic cities, etc. Add to that the inevitable toll of time, the risk of dying or becoming disabled early on, though not high, is real, and would end, or severely reduce options. Additionally, some of it only seems feasible while I'm still young (ish)- I don't want to be the creepy 50 something year old guy hanging out at the hostel with all the 20-somethings. So now on to the job situation. I have now by far the best job I ever had in my whole life. The pay is not great, but still considerably more than needed to meet expenses, and that's not even counting my rental property income. Between those two I'm able to save a significant amount (around 75-80%) and keep plowing that into buying more rentals. However, just about everything else about it is great. It's only about 4 blocks away from my house, so my commute is about 2 minutes. On nice days I can just walk. I come home for lunch every single day. It's in a field that I'm genuinely interested in (real estate). I have my own office with an actual door, lol. The people in the office, including my boss are all extremely nice and respectful, yet we joke around and it's generally a pleasant, low stress environment. They even buy pretty much whatever snacks anyone requests and keep them in stock here. It's a small, family run company, so none of the bullshit corporate, HR type stuff you find in larger companies. The best part is that I really work very little. On a typical day I do maybe, MAYBE an hour of actual work, the rest of the time I pretty much just kick back and read articles, reddit, blogs, etc. in my office. On a slow day I might send a couple emails and have one phone call, so 10-15 minutes of actual work. Pretty much the busiest I've ever been is 4-5 hours of actual work. So you get the idea, cushy job, close by, nice people, own office, just ideal in almost every possible way. That being said, I feel FOMO creeping up on me more and more as I get older. I worry that I'll never take one of those really long trips and see all sorts of places I'd like to go to. It's something I find myself just thinking about more and more. The problem is, I'd pretty much definitely have to quit to make that work, and it feels like the odds of ever finding something like this again are slim. Additionally, I would genuinely feel bad doing it as they do really need some of the work I do on occasion, and have been really good to me. FOMO being what it is, as well as the whole "grass is greener" mentality, I'm fairly certain that if I did leave this job to travel like that I would harbor significant regrets for doing so. I don't technically "need" the salary income, though it certainly helps in accelerating my real estate acquisitions, as well as providing that extra margin of safety. I sometimes find myself wishing that the market would slow down so much to the point that the company would have to lay me off- then if it wasn't my doing no regrets from quitting, plus some freebie extra income from unemployment for a few months. The other element in play here is my relationship. My partner and I are extremely compatible and love each other deeply, and this is kind of unlikely- in a really good way. We're both kind of unusual in many ways, and we've talked numerous times about how it really was a stroke of luck that we found each other, since we're better together than I can imagine either of us would be with anyone else. I don't think the relationship would end if I were to take off on some really long trip, but I can't help wondering if that would inflict some serious damage. I know we miss each other a lot and try to stay in contact as much as possible even on my shorter 2-3 week trips, so I don't know how a much longer absence would go. He is generally a lot less interested in travel than I am, but has humored me with a couple of 2-ish week trips. His job really doesn't allow much more time off than that, and he's pretty committed to sticking with it (lots of schooling to get there, meaningful work, high income, etc), which I totally understand. So basically, Cliff's Notes version of all this- I can certainly afford to quit my job and travel extensively like I yearn to do, but worry about giving up a really awesome job and possibly endangering an amazing relationship by doing so. All thoughts and advice greatly appreciated- thanks! [link] [comments]  | ||||||||
| Posted: 06 Jan 2019 04:11 PM PST Hello, my first post on this subreddit. Me and my wife (both 27 years old) recently got new jobs in NY state. While my employer doesn't have a 401k set up yet that I can contribute to, she has the opportunity to contribute to either a traditional 403b or a roth 403b with a 3% match. We both make about 60k each, I currently have been maxing out my roth IRA for the past three years, while also putting any other money into a Merrill Edge Guided Investing account (their version of an robo advisor.) She recently opened up a roth IRA that she'll max out and has been adding money to a Betterment account with a 90% stocks, 10% bonds allocation. We already have an emergency fund for six months of expenses, no debt, and also no kids. My question is which 403b should she contribute to for our best path to FI, traditional or roth? Also should she max it out if possible or just enough to get the full 3% match and continue with Betterment after that? [link] [comments]  | ||||||||
| Working to 35-40 so that children can have FI Posted: 06 Jan 2019 11:46 AM PST This has been a question that has been on my mind for a while. I'm currently hovering around FIRE at age 27 and will likely be fully FIRE at 29, largely due to niche tech industry consulting work and being frugal. I have one child who is 6. What is the communities view on working an extra 6-11 years and saving like a squirrel so that my child doesn't have to work (presuming that he doesn't want to work, that is) or so that he can take a 'dream job' and not have to worry about the financial aspect of working? [link] [comments]  | ||||||||
| Posted: 06 Jan 2019 02:35 PM PST Hello, I'm 19m and my partner is 20f we're both very keen on being financially successful early, and we'd consider ourselves ahead of people our age for sure. I currently work in commission based sales and 20f is pursuing education in administrative with a part time job. At the moment we have a net monthly income of about $3-4k combined, and pay top end about $1500 for rent, bills, etc. Groceries usually end up about 2-300 a month extra. We live in a very expensive city (West coast) so reducing our costs isn't much of a possibility because a lot of it is just rent lol. Our 5-10 year plan is definitely starting a family, and opening a business later on. I'm going to be going into a course to get licensed for real estate and hopefully land a job in the industry within the next year or two (highly unlikely but I have a good amount of sales history already) My question for reddit is what tips and tricks are there to help us reach our goals? Anything helps! Thx K&K Edit: definitely looking to retire early also we both have good credit 700+ [link] [comments]  | ||||||||
| Getting started young with decent income Posted: 06 Jan 2019 01:43 PM PST I'm 24 years old and make 170k/yr, but I have no family so I'm not exposed to any financial guidance from parents/etc., leaving me to figure this out as I go. My only debt is student loans for which I pay $1k/mo for, otherwise I have no credit cards and I own my car. Apart from that, my only expense is my apartment at $2.5k/mo (it's a 1BR, 600sqft place and about the cheapest I could get a decent place in my area for) and I max out my 401k. My rent includes all utilities, my company provides all of my meals, etc., so my only other expenses are minor (gas, car insurance, etc.). My only assets besides my car is $30k in cash and $150k in a trust that I'm not able to access until I'm 35 or something in like that. There's a few financial issues on my mind that I'm wondering how best to resolve if I want to be FIRE.
When I do start investing money from my cash or stock incomes, how should I do it? A lot of the financial advice I read assumes that the reader already knows how to invest money and is just looking for guidance on what to invest in. I can have my company stock held by either Morgan Stanley or Charles Schwab, should I just expand and diversify my account with one of them? Thank you! [link] [comments]  | ||||||||
| What inflation rate to use with swr? Posted: 06 Jan 2019 01:13 PM PST I learned a crucial part late in the game that you use the SWR the first year and then throw it away, and only increase your spending by inflation each year. So, what % inflation rate should I be using? [link] [comments]  | ||||||||
| Are there pitfalls to the solo 401(k)? What about spouses and prenups? Posted: 06 Jan 2019 11:54 AM PST I sat down to open my 401(k) at Vanguard and immediately got lost. First of all, I just couldn't find the option on the site. Luckily, being lost had me discover that spouses can contribute to a solo 401(k). Everything that's similar to "read the fine print" (employement law, insurance, ...) flies over my head, so I need some help navigating this. Questions:1) So first of all, is it still one solo 401(k) in both of our names? Or does it become two separate accounts? 2) "Total contributions to a participant's account, not counting catch-up contributions for those age 50 and over, cannot exceed $56,000." So if my spouse contributes the max of $19,000, is that cap still there? If so, what's the benefit of having a solo 401(k)? 3) Is there a minimum income or minimum amount of hours I have to give my spouse? (for example, can they work only 1 hour a week or only earn $800 for the year (reason for asking is that my spouse hates working :P ) 4) Can they work as a 1099 for my business and contribute to the solo 401(k) or does it have to be W2? What I do understand:-having a prenup doesn't add any difficulties -I can continue using the solo 401(k) even when I set up an LLC or other form, as long as I don't hire employees besides my spouse. -I can hire 1099 contractors without benefits and keep a solo 401(k). -If I open a roth 401(k) now and a traditional 401(k) later, they will be two separate accounts. [link] [comments]  | ||||||||
| Posted: 06 Jan 2019 09:45 AM PST I am not sure if 1st I have enough 2nd if I will be happy after a couple of years of not working, and probably the biggest worry is what will other people think about me. I have no children and zero debt. I don't own my own home but I am thinking of leaving in a low cost country such as Cambodia or Vietnam. I am just chicken? [link] [comments]  |
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