Financial Independence FIRE By 40: My Plan to Escape The Rat Race |
- FIRE By 40: My Plan to Escape The Rat Race
- FIRE with a spouse that works
- Any podcast or blog recommendations that do not reiterate the basics all the time? Does it even exist?
- Favorite nugget of wisdom/advice from the Daily FI Discussion threads
- Daily FI discussion thread - April 03, 2019
- Weekly Self-Promotion Thread - April 03, 2019
- One year later, any progress on the FI survey results?
- Anyone successfully reduced their working hours due to FI?
- Low Interest Debt
- How has FI affected your view on our society as a whole?
- How do you stay motivated? Looking ideas on keeping FIRE front of mind at home and in the office.
- Clarification on MAGI, T.IRA contribution, deductions
- Approval to escape??
- Two Years FIRE: Prolly not FIRE anymore
- Im in need of some help for my grandmother's FI plans
- 500k milestone - 25 yr old - Bay Area
- how risky are index funds in the context of FIRE?
- Rolling over 401(K) while abroad
- Should we update the FAQ to address including Home Equity in Net Worth?
- Serious: If you hate your job, why not look for a different one?
- Just a quick reminder that money isn't everything
| FIRE By 40: My Plan to Escape The Rat Race Posted: 03 Apr 2019 06:23 AM PDT I've been in a cubicle going on 5 years. When I first started I hated it, and I still hate it. The money is decent for my area, but that doesn't make up for the time I'm spending here that I'll never get back. From day one I noticed all the people around me looked institutionalized, similar to how the prisoners described it on The Shawshank Redeption. All do the same thing every single day, in miserable fashion. I watch many say the same things to each other every day. "Have a good weekend". "Have a good evening", they talk about the weather. You can tell they don't care at all and they all hate being here. Some of them have been doing it for so long that they know nothing else. I assume it's this way in any office environment and really most every job. It's the rat race. I've always wondered if I would be institutionalized like these zombies some day. I really dread the idea of it. I started Dave Ramsey's plan on day one. Some agree with him, and some don't. I don't agree with everything he says. Any way, following his advice is still helping. After completely paying off my student loans in 3 years ($66,000) and paying down a good portion of our house, I just started saving like a mad man at age 27. I have 2 retirement accounts at the moment. One is 3% of my salary pre-tax, which should have no less than $50,000 at age 40. My other is a 457 (B) plan (the govt employee equivalent to a 401K). I'm now maxing out my 457 (B) account at $19,000/year. By age 40 I will have over $350,000 into my 457 (B) in contributions alone. If it grows at ~7% it will be at over $500,000 by that point. The type of retirement account I have there is no penalties for early withdrawal, which makes it slightly better than a typical 401K. My 3% employee account does have early withdrawals penalties, so that can sit until 59 1/2. In total between these 2 accounts alone I should have around $550,000 at age 40. This doesn't seem like a heck of a lot to most people to retire on at such a young age, but there is another way I plan on saving as well. By age 37 our home will be completely paid off, and I will start saving that extra $650/month in another account TBD. With our house paid off at 37 and another extra $650/month added on until age 40 another $23,000 will be in the basket. I should have around $573,000 saved at 40 overall. If I continue to live frugally, there is no reason why I cannot live off that egg, especially with no mortgage. I figure I can live off $15,000/year easily if I had to. This would bring me to age 78, and I def ain't living that long 😂. Worst case scenario I pick up a part time job (2 days/week max) just for a little spending money. I know many who retire on much less than $573,000 (especially in my area) and despite what anyone says I know I can make it work. However, I do have another plan to get more money. We plan on selling our current house and living in a tiny house, a decision I would 100% make. Right now our home is valued at around $225,000. If we sold it at age 40, even if we ended up selling for much less, say $175,000, we'd still be able to purchase a tiny house for around $25,000-$50,000 and come out no less than $125,000 in extra money. That brings us up to around ~$700,000 at age 40, with no mortgage, enough for $20,000/year until age 75 (EDIT: Not including a part time job or social security benefits). That is more than enough to live on, not counting any other streams of money that we may be eligible for in the future. Either way, I would take having less money and having less "stuff" to spend more time with my family and volunteer right here in my community any day of the week. Just thought I'd share my goals with all of you. Thanks for reading, have a great day, and feel free to comment below 😁 [link] [comments]  |
| Posted: 03 Apr 2019 12:36 PM PDT I keep seeing people saying they're going to retire early, but their spouse will continue to work for another decade or two. How is this FIRE? Isn't that just being a kept spouse? [link] [comments]  |
| Posted: 03 Apr 2019 01:22 PM PDT With all the respect to MMM, ChooseFI, Afforrd, and other popular personas that seem to be targeting a wide audience of people on the verge of being converted, it's becoming annoying at some point to be constantly reminded about how important it is to save and how people are terrible at it in general and that you can do better. We get it, let's move on to something more sophisticated. On the one hand, I understand that once you get past the fundamentals, it's easy to build on them and then to dive deep into specifics that apply or interest you. So in a way I'm even struggling to define what I'm looking for. MadFIentist might be in the category somewhat. J Collins in a way as well. ERE did a great job putting things together, though some may get distracted by him going a bit too far on the minimalism side. Who else? Who regularly goes into more interesting FIRE subjects without gearing toward the obvious? [link] [comments]  |
| Favorite nugget of wisdom/advice from the Daily FI Discussion threads Posted: 03 Apr 2019 12:33 PM PDT Those threads run from 300 to 600 comments daily, and although some topics can be somewhat repetitive, I find that there are some really useful advice here and there, and they don't get as much recognition as stand-alone threads do. I don't read the threads everyday, just like probably most people, so I was thinking we could share our favorite nugget of wisdom or advice we have gleaned from those threads. For me, it's probably learning about Continuing Care Communities as a possible route of living when I get super old. [link] [comments]  |
| Daily FI discussion thread - April 03, 2019 Posted: 03 Apr 2019 01:08 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]  |
| Weekly Self-Promotion Thread - April 03, 2019 Posted: 03 Apr 2019 01:08 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
| One year later, any progress on the FI survey results? Posted: 02 Apr 2019 05:06 PM PDT I understand people get busy, but we haven't had any update on this in quite a while and the OP is archived. If the survey team hasn't had time to deal with it, can we get the results with personally identifiable info removed? [link] [comments]  |
| Anyone successfully reduced their working hours due to FI? Posted: 03 Apr 2019 03:06 PM PDT My next big quality of life improvement is to work less. I don't want to not work at all, but I don't want to work more than 20-25 hours a week. I've experimented lately with some PTO, and working from 7am - noon (from home), and then having the rest of the day off is amazing. It's the perfect balance. There's structure, but aside from working 4-5 hours in the day, and no energy lost from commuting - I have so much energy left for everything else. I'm already the guy that hardly ever shows up to work (nobody else works from home as much as I do, but I produce - and honestly I'm FI so **** commuting), and now I also want to be the guy that no only never shows up, but also works less than everyone else with the appropriate cut of salary. Actually... I want to be keep my salary, and just reduce my working hours (instead of job hopping for a 30% raise). If and when I'm asked why - I almost don't really know how to explain myself, other than to let them know I am FI, do not need a full-time salary, so why would I work full time? While that explains my motif well, I think it also comes across as not being dedicated. If I actually didn't like the work itself, I'd look for another job. But I do like what I am working on. I just don't want to be working on it as much... [link] [comments]  |
| Posted: 03 Apr 2019 01:46 PM PDT Just curious how other people in this sub approach low interest debt, how much is acceptable to carry in your opinion? We (30, DINKs, 160k, NC) carry about 313k all around or below 3%. 250k-mortgage-3.1% 12k-commuter car-2.2% 30k-work truck-1.9% 21k-last of the original 110k in student loans-2.7% We have a healthy emergency fund and max all the tax advantaged accounts but still I cant seem to justify the math in paying off any more than the minimums on those over investing the extra cash flow. I feel that playing the long game in terms of payments while continuing to invest is the right way to go. Anyone have any counterpoints to justify paying those off faster or is the general consensus similar? [link] [comments]  |
| How has FI affected your view on our society as a whole? Posted: 03 Apr 2019 04:09 PM PDT I've always associated this sub with r/anticonsumption. Not because the subs are anything alike (this is a robust, feedback driven community with lots of discussion, that sub is primarily focused on sharing images with the intention of casting shame on some example of excess consumption or wastefulness), but the ethos of consuming less pairs nicely with this sub. But obviously if everyone was FI, it all falls apart. What's good for society (or at least our economy... arguably society also) is spending. You always hear about X company's revenues are up. Analysts get excited when CHRISTMAS SALES smash previous records, the markets react positively. Advertising (done correctly) increases exposure and eventually revenues. We are constantly bombarded with advertising. Advertising is better now. It's more targeted, more personal. There are now exponentially more ways to reach you than in generations past. The amount of money companies spend to extract money from you is greater than ever. This is what I've always found to be an interesting contradiction: a GOOD CITIZEN helps their nation and their nation's economy by spending their HARD EARNED MONEY. Advertising is getting even BETTER at taking their money. On the flip side, a GOOD CITIZEN is someone that has an emergency fund for life's surprises, and a retirement savings for life after your prime working years. From a certain point of view, both are GOOD actions - though both, in the extreme, are bad for someone, somewhere. I sense that the extreme opposite of FI is the one growing these days. I wish I could more coherently put these thoughts into words but maybe that is the value of starting a conversation. Interested in other people's opinions on all of this. [link] [comments]  |
| How do you stay motivated? Looking ideas on keeping FIRE front of mind at home and in the office. Posted: 03 Apr 2019 12:18 PM PDT Background: I'm early 30s, married with 1 kid and plan to have 1 more. According to most FIRE calculators, I'm currently on track to FIRE in 10-15 years. We discovered FIRE about 18 months ago when we were temporarily retired but not FI. We lived in a motorhome and traveled the Western US for 6 months working remote enough to break even. Now we're back to normal life working full time, bought a house, had a kid, and yada yada yada we're back to saving money (42% SR). Office: I work in a relatively high-income field (digital marketing) and my peers definitely are not on the sub. I'm trying to figure out a discreet way to remind myself during days-from-hell at the office about my FIRE path. A countdown would be fun but counting down 3000ish work days doesn't sound that exciting right now. Anyone have a fun way to motivate you and remind you of FIRE in the office? Home: My wife and I are pretty well aligned on our FIRE goals, but I doubt she will RE because she really likes her career (accountants are weird). We use YNAB and discuss finances at least monthly if not weekly. However, we would like to have some sort of visual reminder in our house (on the fridge?) for how well we're doing. We like seeing how much our money is growing but we don't necessarily want to display our net worth on the fridge for guests to see. Any ideas would be very appreciated! [link] [comments]  |
| Clarification on MAGI, T.IRA contribution, deductions Posted: 03 Apr 2019 03:33 PM PDT Hi there! So in January, I started a new job earning $90K income and am planning to contribute the full $19K to a 401k (MAGI being $71K). My question: at what income level does it not make sense to contribute to a T.IRA? Would I just contribute to a R.IRA instead, until the MAGI limit kicks in for the R.IRA? Background: goal is to FIRE by 40(ish), current NW is $110K. [link] [comments]  |
| Posted: 03 Apr 2019 03:14 PM PDT Hello good FI Folks! Seeking some validation (or un-validation) here. Has anyone taken a >50% paycut for a passion/less stressful job and not regretted the decision? I have been very lucky over the past 4 years and have seen my net worth go from $10K to $500K due to a lucky but stressful job (non-programmer for once). However, I am already burned out and plan on pursuing a career which allows me to be more creative. This prospective job field would probably pay well (median salary is probably 80-100K), but if I continue on my current career, I will be consistently making anywhere from 200K-250+K. I feel very fortunate to be in this position, but have had some life/family crisis recently that has me re-evaluating the worth of "one-more year" when i could maybe coast-fire right now . I would say i am already Coast-FIRE right now, but alot of my net-worth is tied up in real estate. Approve or not approve to CoastFIRE ? Or maybe I should wait one more year until I hit 600K for a bit more cushion? According to calculators i could just coast until 50, but I am nervous and worried about a looming recession and thinking if now is possibly one of the worse times to change careers. Situation: 28F Networth: around 520K 100K one stock (yea....need to sell and diversify ASAP) 200K investments, mostly SP500 20K cash for emergencies 200K in property (active tenants so I cannot liquidate in an emergency, mortgage is covered however) Permission to escape? Granted or denied? (and no my job has nothing to do with lawn care :)) Thank you!! [link] [comments]  |
| Two Years FIRE: Prolly not FIRE anymore Posted: 03 Apr 2019 04:13 PM PDT It's been two years since I left my job on sabbatical. Then I didn't go back (duh), started my business and settled into Coast-ish FIRE, and realized I was spending too much money to really be FIRE but it was totally worth it. And here I am with another glorious, self-satisfied, how-did-I-get-so-lucky update. Quick stats: Left job at 29 with $750k in the bank. Market has been killing it since then (though I peaked in Jan 2018 with ~$825k) and I'm now at around $730k, meaning I've consumed all the gains since then and then some and will un-FIRE myself without future care. My business income has previously been nominal but is now bringing in ~$1k revenue per month with decent margins, good growth potential, and low time investment, with more hustles on the horizon. I just bought a house, cash, for $275k, which will prove to either be the best or worst decision of my life, bringing my investments to $455k. I got a great deal on the house and could already sell it for more than I bought it if it came to that. I now consider myself firmly in a "Coast FIRE" position that sets me up for entrepreneurial success, but not really FIRE like I was when I first left my job, because I realized I didn't want to live in a van or in Thailand forever, and I like expensive outdoor hobbies, healthy eating, and buying things. I can pay my bills with investments (if I have to) for many more years while bringing my income online, and my retirement savings are more than enough to grow into a healthy sum before I'm at that age - though I intend on going from spending to saving again within the year. I am designing all my income to have passive potential, which is to say I can invest in growing and running it when I want, and switch it to passive mode (at lower profit margins) when I want, to continue having the freedom and flexibility that is absolutely intoxicating. And I'm having a ton of fun doing it. While sometimes it stresses me out a helluva lot to be spending my principle, I've already shown that I can be profitable in what I do and that I have the discipline and spirit to make good money working for myself, and it's really quite fun to have a pressing challenge to give shape to my days. The new house is perfect for a full time side AirBnB hustle and I live in a great place for it. So when I stress, I remind myself that even though I can't do WHATEVER I want, I can do pretty much whatever I want, so long as I am roughly angling towards the end goal. Is this all extremely optimistic? Yes. But, the opposite - cynical pessimism worried about security - would have me still at my old job making bank to be secure in a way that doesn't seem necessary. When the market drops, I will be nervous - but the world is full of opportunities and I would rather be free and happy and nervous than stuck and depressed and secure. I'm the healthiest, happiest, strongest, most confident, most actualized, most giving, caring, connected, most active, spontaneous, creative, curious, and fucking happiest (yes again) I've ever been even though just like everyone, every day is different. [link] [comments]  |
| Im in need of some help for my grandmother's FI plans Posted: 03 Apr 2019 01:30 PM PDT Hello there im new here and need some help and insight. for the sake of clarity im starting like the FAQ suggests so please bare with me till the end, thank you first of all, we are not US citizens nor do we reside in the US, we are from south america. 2° my grandma has allredy retired but she had an accident last month and we decided she cant continue to live alone in her city and she chose to move to our city but wants a place of her own. 3° hence she wants to sell her appartment and come live in rent nearby. 4° she expects to make $70k for the sell (Net) 5° im currently looking for alternatives for her to invest that money so she can have a return of about 1% monthly (i know it sounds like a lot, but over here we have much higher yields, the issue as always is risk) 6° i wanted, for the sake of safety and risk prevention, to make her investments offshore (im aiming at the US currently) 7° some context on my country, the cost of life is extremely cheap under $1k a month (around $800 will get you going well) 8° i have 2 local offers that pay 18% and 21% returns yearly but the legal side worries me and its not my money its my grandma's so i dont just wanna jump in and get her srewed over in the long run. 9° lastly, im not even sure if i can open an account in the US without being a citizen or even a resident 10° my official plan was to find 7 or 8 mutual funds that pay over 15% and allocate evenly but since im not sure about point 9° im really troubled, dont know if i can use this plan 11° finally my grandma is currently 69 and my family usually runs until very close to the 90s so a 20+ years plan is needed she allready was scammed twice which is why this time around she actually reached out and asked for help, so im in turn reaching out and asking for help. -can she open an account without being a citizen or a resident over there? -searching i did find several mutual funds ( not ETFs) that reach 20% so i think its doable but from the posts i read no one here seems to use them, would like to know why thank you for reading till the end, ill be reading you [link] [comments]  |
| 500k milestone - 25 yr old - Bay Area Posted: 03 Apr 2019 04:04 PM PDT Just hit a major net worth milestone of 500k! Posting here since I don't feel comfortable telling anybody else. I started working as a software engineer in Silicon Valley (non-FANNG) at 21 making $120k/yr. Promoted a couple times and now making $235k/yr. Looking to get to 2mm or so and then move back to the mid-west with my SO to raise kids. I keep 5-10k in cash for day to day expenses and the rest in VTSAX, company stock, and a Vanguard target date retirement fund. Currently down about 30k on crypto but hodling in hopes for another rally. I max out my ESPP, HSA, 401k, back-door roth ira, and this year doing mega back door roth ira with as much money as I can afford. To all the kids out there interested in FI, tech is a great way to go for earning potential and access to fancy retirement accounts. [link] [comments]  |
| how risky are index funds in the context of FIRE? Posted: 03 Apr 2019 02:27 PM PDT TLDR: £26 year old, start of FIRE journey and investing £100 a month in index funds. I'm comfortable investing £100 a month now, but questioning whether in the future i'll be comfortable having the cumulative value of my index funds fluctuating constantly, with the possibility of investments almost being wiped in halve. So quick background, i'm 26 years old, and pretty much at the start of my FIRE journey. I'm earning £33k and now living back at home (Spent a couple of year working away from home and didn't save alot during that period). After taxes, pension contributions, company stock purchase, and expenses i'm usually left with circa £1k remaining per month. About £900 of that goes to savings (1.46% is the best i couple find...) for a deposit for my first home ( I aim to purchase in 8-12 months time). For the remaining £100 a month i have decided to set up a monthly contribution into an index fund. I'm still trying to figure out my risk tolerance, but i started thinking about when that £100 a month accumulates over the years to £1k,£10k etc, would i still be comfortable that it could be wiped in half? At the risk of rambling on, my question is how risky do you guys view index funds in the context of a FIRE journey? [link] [comments]  |
| Rolling over 401(K) while abroad Posted: 03 Apr 2019 08:32 AM PDT This is a weirdly specific question & I think this is the right sub for it, but please let me know if I'm incorrect... So got some good news today! My company approved me for a 1 year sabbatical where I plan on traveling across Australia. As a dual Canadian/U.S. citizen I am going to apply for a work visa to stay in the country as an experience. I turn 30 in June and am hoping to leave shortly after (need to work out the finer details at work) So my question is, will it be possible to rollover my 401(K) & TIRA to ROTH accounts while using the foreign tax exemption to avoid any taxes? I have a little over $100K USD in these accounts and since I don't plan on working or having any income during this time, was wondering if I could do this? I have found articles online about people living abroad who do this, but haven't found anything about people just traveling abroad for a year in order to do so. Thank you!! [link] [comments]  |
| Should we update the FAQ to address including Home Equity in Net Worth? Posted: 02 Apr 2019 08:12 PM PDT EDIT: I meant FIRE # in the post title. Not Net Worth... as pointed out in the comments below, net worth is already defined as (assets - liabilities) and I agree with that definition. One of the greatest resources we have is our FAQ, which answers most basic question. It even addresses the definition of Savings Rate. BUT it doesn't address how to include Home Equity in our FIRE calculations. Which is a shame since I have see multiple comments about it and I know some people might be confused on how to handle it. So it would probably be helpful if we have it posted and explained where everyone can see it! From my understanding of the math, there is a trade-off between: *Not including it - since a paid-off house lowers your living expenses/FIRE # (owning/maintaining is generally less expensive than renting) VS *Including it - but that would require a higher FIRE # (since if you sell your house you would need to pay rent to live elsewhere) So the math leads us to 2 conclusions regarding if home equity counts towards net worth:
This is just a quick write-up from me since I think it would be helpful to have it laid out for future reference... If I'm wrong or missed something, I'm sorry- and hopefully someone smarter can write up a better explanation in the comments. Anyways, do you guys think that an explainer on how to handle Home Equity belongs in the FAQ? [link] [comments]  |
| Serious: If you hate your job, why not look for a different one? Posted: 03 Apr 2019 11:16 AM PDT It seems like a key premise of FIRE (especially Lean FIRE) is that working sucks, and that the ultimate end goal should be to quit our terrible soul-sucking jobs in a blaze of glory. Hell this subreddits navbar shows Snoo literally breaking free from chains. I don't mean to come across as crass, but I'm genuinely curious to learn why people don't just look for a different job / career if they're so miserable in their current one. I understand wanting financial stability and not overly depending on a sole source of income. I also understand that the whole "love what you do and never work a day blah blah" ideology isn't feasible for most. But after reading so many posts here, I can't understand why some people endure years of misery in the hopes of some payoff decades down the road. Why delay happiness - or at least general contentment - for so long? [link] [comments]  |
| Just a quick reminder that money isn't everything Posted: 03 Apr 2019 11:11 AM PDT - throwaway because numbers - Hey guys! I'm a long-time lurker in this sub as well as r/EuropeFIRE and I have to say - I've learned a lot from here, so thanks! I've been able to double my net worth from 94k € when graduating in March 2014 to over 190k € in March 2019. I was working all the time during university and was extremely lucky: no student fees because Germany, living rent free at my parents'. Also, nest egg of about 40k€ (full disclosure). So yes, I was extremely privileged and enjoyed much support by my parents. But ever since, I've been on my own: Right after graduation, I moved out and started working full-time, stashing my extra money into index funds. I know, compared to other numbers in this sub this isn't a big deal, but to me it is - and I'm quite proud of my progress. I've been at the same company ever since, making a name for myself, getting regular raises and more responsibility. However, I didn't see much room for more improvement last year so I applied at other companies and a competitor hired me. Since January I've been working for the new company, along with a bump in salary. However, I hate the new job. On paper it all seemed real nice, and it's not like I was only looking at the numbers. But reality has shown it's ugly face since then: I can't get a grasp on the tasks because everything is completely unorganized and I can't find a good personal connection to my coworkers or boss, who seem like a bunch of weirdos to me. I know this is normal up to a point, but it has even reached a point where I'm sick at home and overwhelmed by a feeling of total inadequacy. When I started questioning everything, not just the job, I developed the feeling that this has went to far and I let the job control too much of my private life. For me, the increase in salary may have decreased the time until I retire. But it has also significantly decreased the quality of life until then. The switch was definitely not worth it. Will find another job now and won't look to closely at the numbers but rather on my own well-being. Here's my tip: Don't just look at the numbers. Be happy and grateful for what you have. FI is not just about the future! [link] [comments]  |
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