Financial Independence $2.5M - A Cautionary Tale |
- $2.5M - A Cautionary Tale
- 20 years of safe withdrawal rate research
- Over half of workers above age 50 will at some point be fired or forced to resign. Only 10% will ever again be compensated at the level of the jobs they left.
- Anybody know of a good set of powerpoint slides on the basics of FIRE?
- Retired early with all NW in 401k and brokerage accounts
- Daily FI discussion thread - April 04, 2019
- Life insurance options through employer vs free market
- Is disability insurance necessary?
- Sen. Ron Wyden announced this week he is developing a new way to tax the wealthy
- How low could you go for a Mexican retirement fund?
- FI in 12 years (2032) - Planning for it
- What does health/dental/eye insurance look like for people FIREing?
- What FIRE advice would you give someone who’s about to graduate university and what paths would you take if you had to do it all again?
- What's your biggest difficulting in getting to FIRE, and how are you dealing with it?
- "Experts" say increasing income not cutting expenses is key to FI
- FIRE, stock, and taxes
| Posted: 03 Apr 2019 05:40 PM PDT In the last few days I've crossed $2.5M for the first time. The growth to this point has been unexpected, coinciding with moving from an engineering position to management about 9 years ago and a significant windfall from working at a pre-IPO company. Last fall I reached what I had set as my target FI number, $2.333M. I figured that this was enough to cover an anticipated $70k/year spend at a 3% WR (my spending has historically been around 35-40k, but I was accounting for things that aren't included in that figure like new cars periodically, taxes, more frequent vacations, health insurance, and more for housing since my mortgage over the last ~10 years has been really cheap and I was in the process of selling my house at that time.) It also just so happened that right when I was hitting that number I finally landed a new job after a pretty long search. The timing was great, because I didn't feel ready to retire at 38 years old, and my thought process was that I could join the new company in a "I'm technically retired and just doing this for fun" mentality. It also didn't hurt that I have some fears about retiring right at the top of a bubble after a 10 year bull run. Fast forward about 6 months and, unfortunately, it turns out that I made the wrong choice with the new job. The work is boring, my boss kind of sucks, and I feel like I'm wasting my life in a giant building doing stuff that doesn't matter. A few years back I would have thought that this is exactly the situation that FIRE is for — I should quit and enjoy my earned flexibility. What I didn't take seriously enough was that I never spent the time and effort to define what I'm retiring TO. This lack of planning is now haunting me. If I quit, I don't know what I'll do. Yes yes, I can read all the books and play all the video games and so on… but I still have too much of my identity tied up in what I "do," and I'm just not ready to make that leap. I also now wonder if being bored at work is enough reason to give up a really great salary & benefits, even if I have what I need. Flying business class several times a year could easily eat up a lot of my budget and sure sounds nice. I'm posting this partially because it's cathartic to write about it, but also as a warning to those of you earlier on the path. Take the "one more year" warnings seriously. Figure out what you're retiring TO. Have fun along the way. I thought I was doing those things and wasn't depriving myself too much, but I still allowed work to become too much a part of how I define myself. Don't be like me. [link] [comments]  |
| 20 years of safe withdrawal rate research Posted: 04 Apr 2019 02:16 PM PDT J.L. Collins and I were chatting about safe withdrawal rates this morning -- you know, what finance bloggers do in their spare time -- and I decided that somebody (meaning me) ought to write an article that drew on primary source material in order to explain the history (and meaning of) safe withdrawal rates. I googled and found the original Bengen piece, the Trinity Study (why does the /r/FI FAQ say this is the source of the 4% rule, by the way?), and several more. Then I found this: https://www.kitces.com/march-2012-issue-of-the-kitces-report-expanding-the-framework-of-safe-withdrawal-rates/ It seems that in March 2012, Michael Kitces tackled this very project. And because he's Michael Kitces, he did it much better than I could possibly do it. If you're a money nerd like me and have sometimes wondered about the history and evolution of safe withdrawal rates, you should read this. It's fourteen pages of nerdery. Enjoy! [link] [comments]  |
| Posted: 03 Apr 2019 07:45 PM PDT More fuel for FIRE: A recent study by the Urban Institute and Propublica found that over half of workers over the age of 50 will at some point be jettisoned from their jobs (fired outright) or forced to resign (jumping before they're pushed). Only 10% will ever again be compensated at the level of the jobs they left. [link] [comments]  |
| Anybody know of a good set of powerpoint slides on the basics of FIRE? Posted: 04 Apr 2019 07:47 AM PDT Every week my team at works takes turns presenting on something interesting unrelated to the office, and I wanted to give an overview of the FIRE movement and general personal finance tips and tricks. [link] [comments]  |
| Retired early with all NW in 401k and brokerage accounts Posted: 04 Apr 2019 12:56 PM PDT I recently quit my job and have all my money in 401k (which I was maxing out) and brokerage accounts. Just today I encountered Roth conversion ladders and I'm wondering if I should do anything with my current setup. In particular convert the 401k to IRA and next year start converting portions of it to Roth. Also is there anything beneficial I can do with the brokerage accounts? [link] [comments]  |
| Daily FI discussion thread - April 04, 2019 Posted: 04 Apr 2019 01:07 AM PDT 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]  |
| Life insurance options through employer vs free market Posted: 04 Apr 2019 12:33 PM PDT One of my employer's benefits is the option to sign up for additional life insurance beyond the 'X times salary' basic level. The amount is capped, the premium is deducted (post-tax) every pay period, and the insurance isn't portable. But it doesn't require medical checkups or other gates to pass thru to sign up. This seems like a 'term life' type policy. But is there general consensus on how this stacks up to an individual term life policy in terms of whether it's a useful thing or not? What should be considered when evaluating / comparing these options? I mean, obviously cost per insured amount. But are there other risks? Are the plans an employer offers typically like a term life policy minus the portability? At what point in the FIRE pursuit does this not even matter? If I'm more than 50% of my goal number, should I just self-fund instead of paying premiums? Note that I don't have kids, but I do have other dependents who would be without income if I didn't provide for them. Edit: Forgot part to tie into why I was asking in this sub. [link] [comments]  |
| Is disability insurance necessary? Posted: 04 Apr 2019 12:25 PM PDT I have no dependants and am on track to be FI in 10 years. I live in Canada and have access to free basic health insurance. Do I need disability insurance? Are there any other types of insurance that I need? [link] [comments]  |
| Sen. Ron Wyden announced this week he is developing a new way to tax the wealthy Posted: 04 Apr 2019 12:09 PM PDT Wyden is proposing that unrealized capital gains are taxed annually – meaning that these assets are taxed each year their value appreciates even if the owner does not sell them. Under his proposal, they would be taxed at ordinary income rates – meaning the top rate would increase to that 37 percent level, from less than 24 percent. Economists often refer to this type of proposal as "mark-to-market." https://finance.yahoo.com/news/key-democrat-pushes-tax-wealthy-143747317.html [link] [comments]  |
| How low could you go for a Mexican retirement fund? Posted: 04 Apr 2019 08:44 AM PDT In your opinion, what would be the least amount of money you could retire with in Mexico? Anyone have an opinion on what a lower end cost of living would be for an American expatriate? Besides the least amount of money, how much money would you save? edit for some perspective: I am single and I have no children. I was able to live on $1400/month for 1 year in a small city in Wisconsin. Although I did not have any large purchases during that period like a new car, a new computer, or large health costs. I'm willing to try to lower my cost of living if necessary. [link] [comments]  |
| FI in 12 years (2032) - Planning for it Posted: 04 Apr 2019 12:23 PM PDT My 12 Year retirement plan - 2032📷 Newbie to FIRE. -Introduce yourself - Self employed IT contractor/based in Toronto/family of 3/Asian background -Age / Industry / Location - 45/IT consulting/Toronto -General goals - To be FIRE ready in 12 years -Target FIRE Age / Amount / Withdrawal Rate / Location - 57/1.5 million/4% - Toronto -Educational background and plans - Masters/doing smaller more specific courses-nothing to expensive/working towards becoming a realtor -Career situation and plans - Self employed IT Project Management/ Will likely continue for few more years/maybe shift to full time if cant get contracting work -Current and future income breakdown, including one-time events - Average 240K Net per year -Budget breakdown - Mortgage - 2 houses (Primary and Investment property) - 1.2 M total Mortgage for 2 houses 6500 mortgage. Restaturant 200/Car 1000 (2 cars) - One car paid of and the second one there is financing. Covers both cars/fuel/insurance/Grocery 500/mth -Asset breakdown, including home, cars, etc. _ Two houses assets worth 300K (Equity) /TFSA - 20K/RRSP - 100K/Emergency fund 5K if need more will use line of credit. 3k rental from property 1. Brought a pre construction condo 80K down payment (Ready in 2022) -Debt breakdown - 90K debt (Will be repaid in full in 2 years) - 45k this September and the next 45 next September. (This is from LOC - 10% interest. Used for investment purposes. -Health concerns - None at this moment -Family: current situation / future plans / special needs / elderly parents - Older parents will need to spend some time with them no major financial commitments. One Young child (3Yrs) . Put money in RESP -Other info - Looking for FI in 12 years (2032) -Questions? Thoughts ideas for improvement/Anything i can do to fast track/investment ideas - I Know that i am heavily into housing but with population growth people need place to stay/Live Looking forward to FI in 2032. [link] [comments]  |
| What does health/dental/eye insurance look like for people FIREing? Posted: 03 Apr 2019 09:13 PM PDT I'm trying to understand what options I might have when I finally decide to FIRE. Can someone paint a picture for me of what it might look like in 10 years or what it looks like for you now? What are most people's plans for insurance? How much should I consider putting aside for insurance on a monthly or yearly basis? Thanks! [link] [comments]  |
| Posted: 03 Apr 2019 10:08 PM PDT Hi everyone, I'm a junior at university that will be graduating next year with a degree in international business. I got into this subreddit because I am interested in entrepreneurship, investing, and owning businesses. I have had internships in real estate and marketing but I'm not quite sure what I want to do when I graduate. What advice would you give someone who's about to graduate on FIRE and what paths would you take if you could start over? [link] [comments]  |
| What's your biggest difficulting in getting to FIRE, and how are you dealing with it? Posted: 04 Apr 2019 06:03 AM PDT Thought it might be a good discussion, and a place to vent. For me, it's definately my wife. She's not fully on board, but knows she's not good at finances so lets me handle things. Even though I've given her a personal spending budget 3x higher than my own, it's never enough. More irritatingly, she's very impulsive with shopping. For example, yesterday I asked her to pick up some peanut butter (she works, part-time, right next to the grocery store). She came home with a reciept for 45 USD... because she wanted to get some snacks (seperate budget for that, and already over it for the week). A couple weeks ago I asked her to pick up rice and bacon (store was out when I went shopping)... reciept was 115 USD. I've learned, no more wife doing the grocery shopping alone, the concept of using a list is just too foreign for her. [link] [comments]  |
| "Experts" say increasing income not cutting expenses is key to FI Posted: 04 Apr 2019 04:49 AM PDT BI article here: Experts say 95% of money advice focuses on the wrong thing What a fantastic idea -- why on earth didn't I think of this?! The advice seems so spectacularly obvious that it hardly needs mentioning, does it? Do you really need to be reminded that increasing your income is a major factor in your pursuit for FI? There's some outstanding content out there for personal finance. In fact, it seems that the original content by Grant Sabatier is sound although over-simplified. This on the other hand, I fear, is utter dog sh!t. [link] [comments]  |
| Posted: 03 Apr 2019 10:58 PM PDT I work for a public company and our stock price has gone up decently over the years. I hold a good chunk of company stock and plan to FIRE in a few years. I'm wondering if I should hold most of it so that I could possibly sell my long term stock at 0% capital gains taxes when I'll be in a lower tax bracket. However, I do want to sell some stock now as the price is on the high end. Should I sell my short term holdings first? I've already paid taxes from shares withheld and the short term stocks would be less on the capital gains amount since the value price when vested is closer to the current price. Or should I ditch the long term stock with higher gains, but I will need to pay normal long term capital gains tax? I'm leaning towards selling the short term if one is on the track to FIRE and being in a lower tax bracket? Correct or incorrect? [link] [comments]  |
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