Financial Independence "The Two-Income Trap" was strangely big influence on my wealth building |
- "The Two-Income Trap" was strangely big influence on my wealth building
- Daily FI discussion thread - February 02, 2019
- Does thinking about FIRE ever get a bit too overwhelming?
- How do you factor in a pension into your FI%?
- FIRE impact on children - Setting example
- Have I been double-counting income in my savings rate?
- I'm a Canadian moving to the US with plans to move to a 3rd country after I leave the US. Should I invest in 401k?
- 2 more months and Ill be back on track and it is such a relief
- Is There Still A Market For FIRE Blogs?
- Torn between two life choices - Which will help the most with FIRE
| "The Two-Income Trap" was strangely big influence on my wealth building Posted: 02 Feb 2019 11:27 AM PST The book is large scale analysis the causes of bankruptcy in American families. The pattern the authors found is that two incomes increases the risk of bankruptcy because the family consumes on a level that requires two incomes to support. However, two incomes means twice the chances of something going wrong like a lay-off, health problem or pregnancy. The authors go into much more detail on the inflation of costs like health care and housing over time as well as changes in consumption patterns like 2+ car families and larger housing. It also debunks myths like spending on luxury food and electronics as being the major cause of bankruptcy. It's all very numbers driven and geeky in a way I think this forum would like. I read The Two Income Trap for the first time 12 years ago when I got married. It scared me sufficiently to always aim to contain family spending to a level of the lower earning partner. This is at least a 50% savings rate by definition so we've pretty much always been at least at that level. Do that for enough years and it stacks up. The punch line is the Harvard professor who wrote it (with her daughter) ended up going into politics and is probably running for president this year. It's Sen. Warren of Massachusetts. (Not an endorsement). [link] [comments]  |
| Daily FI discussion thread - February 02, 2019 Posted: 02 Feb 2019 03:08 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]  |
| Does thinking about FIRE ever get a bit too overwhelming? Posted: 02 Feb 2019 10:53 AM PST I just turned 24, and graduated a year ago. I'm working a salaried job and living from home. I'm saving a ton of money, and got my credit score pulled at 841. On paper things are great. But they aren't It's been so hard to move up within my company or grow my own business, that owning a nice home or buying a condo in the city seem like distant dreams. I'm almost halfway through my twenties, and I feel trapped. I want to move out of the suburbs and be around other young people, or travel and make videos, but that would strip away so much of my monthly savings. Banking more than half of my salary just isn't possible if I move out. I know I'm young and things will come with time, but it just feels so complicated. I've got 40 able-bodied years left on this planet at best, and not a single day of that is guaranteed. How on earth do you balance long-term security with short-term happiness? Does anyone with more experience than me have any wisdom to share? It's really scary sometimes. I just want to be happy. [link] [comments]  |
| How do you factor in a pension into your FI%? Posted: 02 Feb 2019 06:46 AM PST My current FI% is based on how much I think I'll need to retire and live with my current life style at my desired retirement age. But how do I factor in the fact that I'll be receiving a pension as well? Is it fair to say that if my pension were to cover 30% of my expected monthly expenses in retirement, that I can add 30% to my FI% number? [link] [comments]  |
| FIRE impact on children - Setting example Posted: 02 Feb 2019 09:11 AM PST I'm in my 40's....married with kids. I worked like an animal in my 20's and 30's. 70 hour work weeks. Always asked for the hardest jobs. Cancelled vacations if so needed. A true workaholic. My wife lived through all that, but we had the kids later in life and they are now pre-teens. Now I'm in the fortunate position to FIRE which I want to do. My wife is supportive as well but we worry what kind of message that gives to the kids to have their parents relaxing around the house with the most difficult question being which gym class do I sign up for today. Has anyone delayed FIRE so as not to give kids the wrong work ethic message? Thoughts? [link] [comments]  |
| Have I been double-counting income in my savings rate? Posted: 02 Feb 2019 02:31 PM PST I calculate savings rate based on my savings divided by my take-home income (essentially my net income with all of my pre-tax investments and spending added back in). I include miscellaneous income I receive in the take-home denominator, such as savings account interest, as well. Part of my pre-tax spending includes monthly deductions for my flexible spending account and dependent care FSA. Throughout the year, these deductions are returned to me as reimbursements for certain medical and childcare expenses that I pay out of pocket. When I receive these reimbursements, I categorize them in Mint (and my personal spreadsheet) as income since that what they were originally. (I realize I could also categorize them as an "expense" offsetting my medical/childcare expenses, or like a separate contra-expenses, but that's a different issue that I don't think affects my question here.) It now occurs to me that when I include these reimbursements as "income" I may be double counting them, artificially inflating my take-home income and depressing my savings rate. Am I thinking about this issue correctly? If so, is there a better way to account for these reimbursements? I'm reluctant to categorize them as offsetting expenses because (1) I like to be able to see the full extent of my medical and childcare spending and (2) if I'm right about the double counting, I don't think it would matter for purposes of saving rate. I'm also weary of just categorizing them as transfers, as I think that would cause Mint to ignore the data. Thanks for any thoughts you all have! [link] [comments]  |
| Posted: 02 Feb 2019 09:08 AM PST I'm maybe 6-8 years way from retirement. I'm late 20s. I'm moving to the US for a work opportunity from Canada and deciding if I want to max my 401k or not. This is relevant to FIRE because I don't want to wait until 59.5 to access my money early. If I was going to return to Canada I would max it easily because when I come back I can convert the room into RRSP room (our version of the 401k) I expect I will return to Canada someday, but not in my working career. The third country is likely Singapore or China. Potentially somewhere in the EU as well. There's a lot of considerations here 1) If I choose not to max 401k, and I leave the US, do I need to sell my taxable stocks? Am I allowed to invest in the US as a non resident? This will be a very large tax hit on capital gains. I'd prefer to wait for this tax hit until I have no income. 2) if I max my 401k, what are my options for conversion? I'm not interested in waiting until 59.5 to access my money. 3) is it possible to keep the money in America in an account that I can easily access at any age and is still tax efficient? Thanks guys. This is not an easy question I think. Most tax accountants are completely useless in things like this. [link] [comments]  |
| 2 more months and Ill be back on track and it is such a relief Posted: 01 Feb 2019 07:20 PM PST Ive been planning for FIRE for a while and I was doing a really good job with it. I busted my butt, and I was about a year away. Unfortunately, about a week after I left the military my ex wife filed for divorce. It also happened to be the day we signed paperwork for the bigger nice house I am living in currently... So fast forward a 'few' lawyer and court sessions it ended up racking up a giant bill and I lost a lot of what I had saved and invested. I grew up poor and since I was young I knew I wanted to be financially safe. I never had friends over because I was always worried if I would have running water at home or something. Its kind of lead me to worry about money a lot. Ive been so anxious since the divorce and I can finally see the light at the end of the tunnel. I wont be fire ready for a little bit, but I will be done paying off her AND the lawyer. So this means I will finally be able to start saving money and stop charging everything to my credit cards hoping to pay them off the following month. While I was in the military I flipped and rented out houses with my extra time. This was mostly my retirement plan as most of them were paid off and had steady good renters in it. I ended up having to sell some, she ended up with two, she also got a large (to me) sum of money paid to her over the last year. On top of that, a few days before she filled she took a bunch of money and got herself a brand new car. I still have the house I am living in (woo I guess) and I have one soon to be rental property that I just finished working on. I also have an old rust bucket truck that Ive been waiting to do repairs on. So I technically have a positive net worth, but with the lawyer fees and everything else I have been paycheck to paycheck and underwater/house poor. You have no idea how excited I am :) I hope the post is appropriate, I lurk here a lot and I was just excited to share some news. I will start my road to FIRE shortly after I can start saving money again. [link] [comments]  |
| Is There Still A Market For FIRE Blogs? Posted: 02 Feb 2019 12:45 PM PST Thinking of creating one, tracking my journey from poor college kid to FIRE, but not sure if the market is already too saturated. Don't really want to spend all this time if only 4 people will read it. What do you guys think? And what are your thoughts on some subjects that other financial blogs have avoided? [link] [comments]  |
| Torn between two life choices - Which will help the most with FIRE Posted: 01 Feb 2019 06:45 PM PST Hello sorry I'm new here and to everything FIRE, just testing the waters and looking for advice. I am 22 and have just graduated with my bachelor degree and am also a Sgt in the US army reserves. Currently, I have an offer on the table from a great company with decent benefits and on the other hand an opportunity to go AGR (active guard reserves). The company job is paying 53k starting and matches 4% of 401k. AGR I would be making 36k a year roughly. However, army benefits means after 20 years I get half pay for life. I really like both career options and honestly just want advice on which would be the potentially better option to retire early with. If anymore information is needed let me know. [link] [comments]  |
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