- How important is it to try and max out your 401(k) before leaving a job? (Currently on the verge of leaving my high-pay / low-satisfaction job to enjoy LeanFI / BaristaFI for a while, and I don't want to make a costly mistake!)
- The NYTimes published an article about the falling markets today and the comments are mind-boggling.
- How are you monitoring/controlling your income in terms of ACA ("Obamacare") subsidy cliffs?
- Daily FI discussion thread - January 03, 2019
- Best method for calculating SR?
- Does your FIRE number vary depending on whether you use an Index investing approach vs a Dividend investment approach?
- Does being car free really matter?
- Do FIRE practitioners aspire to a sort of modern Gentry or leisure class?
- Advice for UK residents?
- Leaving the rat race behind: Thoughts on leaving th corporate world and starting your own business once you achieve financial independence.
| Posted: 03 Jan 2019 07:14 AM PST A bit of background: I moved to San Francisco in 2008 to attend college, and have been living and working full-time here ever since. Over the last few years, I've been feeling increasingly less safe, more jaded, and more depressed living here, particularly in the last year or so. The desire to leave San Francisco to move back to my beautiful coastal hometown two hours away (where my beloved family still lives) has always been a persistent thought in the back of my mind, but it was absolutely screaming at me today during my first day back at work after a 12-day hiatus for the holidays. While I hate the thought of hopping off a lucrative gravy train that's plowing along at full speed, I am certain that making a 2+ hour driving commute to work five days a week if I moved would make me even more miserable (considering that my current commute is 15 minutes by bike). In light of that, I am currently in the process of drafting a formal proposal to my manager and HR to see if they will allow me to be a semi-remote employee (on-site Monday/Tuesday, remote the rest of the time) or a part-time employee (24 hours / week, on-site Monday, Tuesday and part of Wednesday) -- this would not only allow me to alleviate the distress of having to live in this urban environment, it would also eliminate my disdain for having to be in an office environment every single day (plus, it could actually save the company some money!) Having been with the company since 2010 (an intern/contractor for the first two years, and a full-time employee for another six) and consistently received more than satisfactory performance reviews each six months, I feel like what I'm asking for is certainly a bit unorthodox, but not completely outlandish; that being said, I am well aware that the only way I can truly add some teeth to my request is by providing the ultimatum that I will resign by XXXX date if we can't reach an amenable modification to my employment arrangement...which brings me to the main point of the post. The main question: If I end up quitting before I max out on April 26th, it seems like quite a bit "left on the table", so to speak. So I suppose the question is this: how much am I really giving up if I quit before I max out my 401(k) contributions for the year? If I end up quitting this job, it is very likely that I wouldn't be obtaining a new traditional W-2 job later this year (and if I did, it would be much fewer hours and lower-paying than my current role) -- in light of that, I feel like it would probably be very helpful to have as many deductions on my 2019 tax return as possible. If it makes any difference, I estimate my total year-to-date wages would be about $45K if I left on April 26th. (On a related note, would it be worth continuing to work until I had enough extra money to make my full $6,000 IRA contribution and $3,500 HSA contribution for the year? Can't deduct the HSA because California doesn't recognize it as a deduction for state income taxes, but putting more money in my tIRA would theoretically make it easier to get it converted over to my Roth IRA and "seasoned" so I can tap into it tax-free in five years.) Hoping to get some insight/advice from the FIRE crowd who understands where I'm coming from -- since I can't really ask of my friends for advice on this, I suppose it's best to ask a bunch of like-minded internet strangers :) [link] [comments]  |
| The NYTimes published an article about the falling markets today and the comments are mind-boggling. Posted: 03 Jan 2019 01:27 PM PST The article, What Should You Do About a Falling Stock Market? Nothing, is fairly standard Bogleheads-esque advice. However I am reading the top comments and am fairly astounded at how many people are so poorly informed about investing and the markets. Just a reminder that 1. we all are in a fairly small minority, and 2. no, things are not different this time. [link] [comments]  |
| How are you monitoring/controlling your income in terms of ACA ("Obamacare") subsidy cliffs? Posted: 03 Jan 2019 10:57 AM PST TL;DR: As a FIRE person, how do you make sure you don't go over one of the ACA subsidy cliffs, given that you can't perfectly predict your dividend income, sideline work you might want to do, and other unpredictable sources of income? Obviously, this only applies to those who use or may use a subsidy from the ACA Healthcare Marketplace [If you're not from the U.S., turn away now, this may make you feel unwell.]. Given that the ACA is one of the great boons to FIRE people in the U.S., I think exploring this issue merited posting this financial management question here as its own post rather than just on the daily discussion thread. I'm well aware of the subsidy "cliffs" associated with the ACA. If you're not familiar with that idea, it's basically that you can get a big tax subsidy to help pay for your health insurance, but after you make over a certain amount of money, even by one penny, thousands of dollars in subsidy go away. Doing one Fiverr task for $5 could be a net loss of $4k that year. I searched for "ACA cliff" on this subreddit and only found one other post about it, from 8 months ago, but it strikes me as almost a key concern for pre-65 American FIRErs (who are not fully living off Roth withdrawals/Medicaid or who are so leanFIRE that they can live under a Medicaid expansion state's income cutoff). I prefer to use "cliffs" and not just "cliff" because it seems to me that in addition to the dramatic 400% Federal Poverty Level cliff, there are also smaller cliffs at 150%, 200%, and 250% FPL, at least according to the table found here. I don't want to only repost this same question. What I'd like to do is to make sure I understand exactly how my investment income and other possible income could come in in 2019 so that I can plan whether we are likely to surpass one of these cliff amounts well before then so I can try to avoid it. For example, I recently did a bank bonus deal and had to pause and wonder if the small amount of money from that deal could be what put me over an ACA cliff. A shame we have to think that way, but that's the reality currently. One of my main areas of not understanding this is dividends in my taxable brokerage account. How can I know how much to expect each year? Being fairly new to investing, I haven't thought about these significantly before. Are there any other "gotcha income" relevant to FIRE or semi-FIRE people that could sneak up on you and push you over an ACA cliff? [link] [comments]  |
| Daily FI discussion thread - January 03, 2019 Posted: 03 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]  |
| Best method for calculating SR? Posted: 03 Jan 2019 03:29 PM PST Right now because my spending is not fully tracked, I am trying to track my savings instead to calculate SR. I know how much I make, I know how much I contributed to investment and retirement accounts, and I know how much my cash reserves went up. When calculating SR, do you tend to base it off pre or post tax income? Do you consider principal towards a mortgage as savings or spending? Using arbitrary numbers, lets say... pre-tax income was $100k, but post tax was $80k Cash up $25k Investment/retirement contributions $25k Principal paid to mortgage $25k If I eliminate taxes and consider principal mortgage payments as savings, the SR would be 94%. If I just base it off gross income and I don't include my mortgage principal as savings, the SR is 50%. [link] [comments]  |
| Posted: 03 Jan 2019 03:15 PM PST I have seen some people suggest that an ETF investment approach will allow for a smaller FIRE number and therefore an earlier retirement than Dividend Investments. This article seems to suggest that as well. https://boomerandecho.com/why-living-off-the-dividends-no-longer-appeals-to-me/#comment-414261 https://www.madfientist.com/safe-withdrawal-rate/- People in the comments of this Madfientist article as well. Why should the FIRE number be different in any-case if we are using the 4% SWR rate and the 25x your yearly expenses rule? Whether you are collecting 4% in dividends each year or withdrawing 4% of the principle; in my mind this shouldn't matter. [link] [comments]  |
| Does being car free really matter? Posted: 03 Jan 2019 02:26 PM PST I dont get why MMM is so obsessed with getting ppl to drop their cars. Assuming your car is paid off the expenses just dont seem to add up to much. My monthly car expenses are as follows, Gas: $120 Insurance: $100 Maintenance: $35(oil changes and registration) Comes out to $255. That's not gonna make a dent in my retirement path so why bother being car free? [link] [comments]  |
| Do FIRE practitioners aspire to a sort of modern Gentry or leisure class? Posted: 02 Jan 2019 08:57 PM PST FIRE versus Gentry Class Let's start with what the Gentry Class was… Historically, these were people that did not have titles of nobility and were not wealthy enough to be deemed aristocrats, but were effectively wealthy enough that they did not need to work beyond maintaining their estates or investments (generally rental properties). Let's compare that with the Financial Independence component of FIRE. Financial Independence means you have amassed enough wealth to live on without working. Financially Independent people have enough assets or income producing assets to cover their expenses effectively for their lifetime. The Retire Early component is essentially that you do not need to work beyond managing your investments (but you aren't required to do no work at all). Both those who have already FIREd and the Gentry are essentially the same thing. They're not aristocrats, royalty, or nobility, but they are wealthy enough that they do not need to work for the rest of their lives. Those who are pursuing FIRE could accurately be described as being New Men or Women of the Gentry or leisure class. If they pass their wealth to their descendants (as many of us will). It's entirely feasible that we're merely continuing a centuries old tradition of merchants working to build a fortune (I'd say we're a bit more modest about what is sufficient for our fortune) and retiring to live off investment income and pass that wealth to our children. It seems like we're really the millennial generation's less consumer-centric take on an age old paradigm. [link] [comments]  |
| Posted: 03 Jan 2019 12:17 PM PST Hi all, I'm a long-time lurker on this sub and find that the majority of the advice given looks to be specifically related to US residents. In the time I've been watching I haven't seen anything relating to UK residents (apologies if I've missed it). Looking up a lot of the different terms people use (401K, Roth IRA, etc) mostly appear to be specific to the US - unless I'm mistaken? If I'm not mistaken could anyone offer a bit of advice on where I can start looking to maximise the opportunity of my savings (investments, etc). I've currently got a small amount in a very low interest (0.2%) savings account, some in a LISA (maxed out), and the majority in a easy access savings account (1.4%). I'm also enrolled in my work company pension. I regularly monitor all my accounts and have a budget which is allowing me to regularly put money into savings. I'd like to look more into putting my money to better use. Is what I'm doing currently good? I'm aware that the low interest account is holding back the money there, however my thinking behind this one is its with the same bank as my current account, so I use it as a sort of emergency fund whenever I need money quickly I just use the banking app to move money to my current account. The amount in there is minimal, just enough for a rainy day. I'd like to get more use out of my money but not really sure where to start. I've always been told that investments are the way to go (?), but the majority of the advice appears to be aimed at US residents. Does anyone in the UK have a particular investment provider that they could recommend or perhaps have a resource which I could look into a bit deeper? Another question, I'm seeing more and more of these higher-interest investment providers being advertised (Wellesley for example), but the interest rate seems to be too high. Am I overly paranoid or is it really possible to earn up to 6% with these companies? The online reviews are mixed. They also don't appear to be covered by the FSCS which is what is making me skeptical. Has anyone had any luck with these companies? Or are there more reputable ones available. I really appreciate any advice available. Thanks! [link] [comments]  |
| Posted: 02 Jan 2019 05:42 PM PST So my wife and I were doing our finances over the holiday period, and thankfully we are doing well and on the right track. As part of our financial independence and retirement strategy we want to move away from corporate jobs and into something that we can call "our own". Business wise, we consider that there is a certain level of investment required, and that we have the finances and capital enough to loan against and maybe buy something freehold with a business. So I just wanted to ask, has anyone left the traditional work force to start a business? What were your reasons? How did it go? I'm well aware of the statistics that show that a large number of businesses fail, and probably a large number barely make enough money to be profitable. I even remember reading somewhere about someone who started their own business and found they worked double the hours of their employees for half of what they paid their employees! So please, post your stories, thoughts, experiences and opinions. [link] [comments]  |
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