Financial Independence FIRE obsession |
- FIRE obsession
- What do you spend thousands of dollars a year on that others would think is frivolous but you think is well worth it?
- A reminder to folks in their 20s
- My Parent's FI (probabaly RE) long story - from third world country
- Daily FI discussion thread - April 13, 2019
- Are there any retirement communities targeted at FIRE people?
- Extreme FIRE: Things you do.
- Timing of backdoor Roth relative to tIRA rollover to 401k?
- Do you take tax into account when calculating FIRE target?
- Ideal job if you’re born FI
- A good problem to have: too many pre-tax savings buckets!
- Roth IRA: Should I invest in VTSAX with a Fidelity or Vanguard Account?
- Does buying a home preclude one from reaching FIRE?
- Pay off home or invest cash
- On Track to FIRE @ 55?
- Is there a reason to pursue FIRE over fatFIRE?
| Posted: 12 Apr 2019 09:08 PM PDT Every day we see posts from people who are aggressively saving to retire ASAP. I understand the mindset, since I was like that in my 20s, although there was no FIRE community back then. I just disliked work and wanted to stop doing it. I successfully REed at age 44, but that is still over 20 years of working. After my first 4-5 years of working I realized counting the days/months/years was too depressing. I settled in for the long haul and worked to make it as enjoyable as possible ignoring my goal, but still living below my means. I tried to find companies that were good to work for and divisions with good bosses. If I got a bad boss, I transferred or quit. Suffering every day to grind out your FI goal is something you will regret. If you are smart and capable, which is almost a requirement to be interested in this sub, then you can find a better job than the one you hate. These days we get on this sub and read about people succeeding and ahead of us. It makes us upset and even more determined and makes daily net worth checks and ever more spending cuts, which can suck the joy out of living. Outside of a very lucky few, most of us will still have to work 20-25 years (instead of 40-50). Being miserable for that much of your life is not good. Try to find a way to enjoy it. TLDR: plan for FIRE in the background, but focus on making your career as enjoyable as possible. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 13 Apr 2019 02:16 PM PDT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A reminder to folks in their 20s Posted: 12 Apr 2019 04:55 PM PDT I ran a quick, simple simulation: save $X every year. Earn 7%. Do that for 40 years (22 to 62). Then I looked at how much each year contributed to the final balance at 62. Money saved in your 20s accounted for 52% of the final balance, your 30s 27%, your 40s 14%, and your 50s 7%. So the game is set by the time five-oh comes around. I also adjusted the savings amount to account for an optimistic career earnings trajectory (source). In that case the numbers changed slightly: savings from your 20s contribute 40% of your final nest egg, your 30s 30%, your 40s 20%, and your 50s 10%. Same message: start as early as you can. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| My Parent's FI (probabaly RE) long story - from third world country Posted: 12 Apr 2019 07:53 PM PDT Just lurking around this sub since 2 months ago, and coincidentally my mom just recently send me a list of their asset:
Maybe not look much in US$, but in Indonesia (my country), the saving interest in Credit Union is often 12-14% p.a. which put them at a passive income of appx $1000/mo, which is already at 5x minimum wage there. So it's more than enough for them to life comfortably. I think this is impressive and they are my FI inspiration, so here's finally their long story. Dad and Mom both born in remote town in the middle of the tropical jungle. Dad You know the parent story they need to walked 10 miles to the school yada yada. My dad rode banana trunk to the school when the river was flooded, which happened in weekly basis on the rainy season. He said it was super fun though, because he did it with a big group of friends. They didn't have notebooks until up to 9th grade because the paper was too expensive. Every student had a slate of blackboard, they wrote with chalk, memorized it and then erased it. He's hauled from a poor native tribe, 10 siblings, farming as a primary occupancy. But he's super smart, skipped grades and graduate high school two years earlier than his peers, and started teaching in the school too. Mom Came from an affluent Chinese descendant family, 8 siblings. But granpa was a jerk, only prioritize his firstborn son. My mom's oldest brother get the best treatment. Grandparent send them to a bigger town since the first grade of school, with the oldest brother supervising them. The oldest brother always take almost all of the money, eating out and gambling etc, and leave almost nothing to his younger siblings. Sometime they only ate rice and crackers for days because no money left. They reported it to granpa, but granpa just so blinded by his love to his firstborn son, and didn't gave a fuck. Not to mention the physical abuse that the older brother did to them, slapping, punching, locking them in the closet etc. This condition force them to survive and be financially savvy. Mom's older sis is so pretty and popular, so she survive by getting money from all the boys she's date. My mom and her two younger sisters was getting creative and starting business, cooking simple cakes or buy bulk fish crackers from the market, and sell them in the school and neighborhood. They get by and finally the toxic older brother graduate high-school and move out to bigger city. My mom did not talk to him for 30+ years, they just recently talked again after my grandma pass away. Mom met dad in high school. Dad was the math teacher. No, they do not dating during the school, sadly no exciting scandal. When my mom was on 12th grade, my dad got a university scholarship from our government, and he need to move to different island. He took the chance and got his bachelor degree. The trip was pretty dramatic, three days crossing the ocean, landed on the big crazy capital, taking two days of bus and train to finally arrive. During the initial test, my dad almost didn't pass the entrance exam because the educational disparity between the big city and the remote area was just so severe. He made it out by getting a perfect score in psychological and logical test. But he finally graduated with honor. During this era, dad was dating someone, but keep in touch with my mom through letters under the pretense "She's my former student". After graduating, dad move back to our province capital, which is a medium size city. He teach part time at a university, and part time at a high school. My mom already in the same city too, working and living together with her two younger sisters (they are super close until now). Mom and dad met, dad already broke up with former girlfriend, and dad starting dating mom. Finally they decided to marry. Grandpa from Mom side was super furious, for several reasons: dad is from a farmer family, from native tribe (not a Chinese descendant), and basically poor. He said something in the line like "If you marry him, I will kill myself". Mom didn't give a single fuck, he's a shitty dad anyway. They got married, granpda didn't come. Funny twist is 3 years after, my granpa estate and stores got burned down to the ground (no insurance at that time) and he's become a dirt poor. My grandma get sick (cataract or something) too. Guess who support them, find them a new place so they can open a small store, and pay for their medical bill? My dad and mom, they even have to sell their wedding ring to treat my grandma sickness. The beloved first-born son just half-assed-ly help them, even did not let them sleep in a room and told them to sleep under the stairs when they stay at his place. Dad's teaching salary in university and high-school is enough for us, but their relatives from village keep sending people to live with us, because they need to go to school/uni/work in the city. At some point we have +10 people in the house beside our central family (Dad, Mom, older brother and I). So I grew up in very frugal and crowded condition. Rice is rationed. Someone have birthday, no cake. We cut up a jackfruit from the tree in front of the house and stick a birthday candle on it. We have a chicken coop so we can get extra egg, my mom won't eat the chicken though because she named them, she will sold them to the market and got a different chicken. She making cakes and ice creams, and my brother and cousins, aunts and uncles will sell it their school/workplace. As a youngest one, I got spoiled actually. We always have people to do the house chores, we supposed to share the job, but because I'm the smallest, I was clumsy with knife, when I wash dishes the water and soap got everywhere, so to make thing run smooth, they just take over my job. They just being generous by letting me wash the dishes once a week, and even during that time I will broke a glass or a plate. Mom's cake business doing great, she finally quitted her job at a company and baking full time. She is super hardworking, always wake up at 4pm, measure the ingredients and then prepare breakfast, dad and uncle will wake up at 4:30 am to knead the dough. Everyone else wake up at 5 am, eating breakfast, fighting for shower and bathroom and finally leave to school at 6 am. Mom and anyone who's going to school/campus/work a bit later will shape the bread and bake them, and around 10am, mom will distribute the bread to a lot of stores. At the peak of her business, she made $2000/mo and hired 10-12 employees (it's in 1990s, before Indonesia monetary crisis, so it's probably 30-40 times of minimum wage, as at that time my Dad salary total only $50/mo). But we really don't think we are rich, still super frugal, collecting wild vegetables from the forest behind out house. Brother and cousin even go as far as stole yucca from neighbour's plantation, they dug out like a big sack of them. Mom find out and she made them walk back to owner house and showed him the stolen yucca, paid for it and apologized. Next time, my dad and mom was out of the house, neighbour's pigeon crashed in our backyard during a storm and broke it's neck. Out of pity (doubtly) brother and cousin killed, fried and ate the pigeon. The neighbor came later looming for his pigeon after the rain stopped. They outright lied to him and said they didn't see it. The kids in my school getting tamagothci and I don't even think to ask my parent because I think we were poor (They bought it for me and my brother anyway without us asking). At this time, dad start some NGO and building a credit union, with purpose helping mainly (not limited to) native people. He's going around teaching people doing financial planning (saving 10-20%/mo, pay your loan, prioritize your bill and kid's education, quit gambling and smoking, don't sell your land to oil palm and mining companies etc), and after several years the credit union become a hit. My dad quitted his teaching job, but now travelling around our islands and to other places and country in South East Asia to teach farmers financial planning, working with various international NGO etc. Some setback including my dad get into jail because he wrote something in local newspaper that criticizing the dictator, South East Asia financial crisis in 1998, and tribal war where we have to evacuate house several times. Finally dad's income hit $1500/mo. At this time, dad and mom are around 42 and 35 years old. Dad told mom that she can relax if she want, and she agree. She closed the bakery and become stay at home mom, just keep the bakery running until all of her employee found another job. So, she retired at 35, her typical day is wake up at 4pm (hard to kill old habit), do stuffs in the kitchen or going to the market, reading and gardening and homesteading. Up until this point we kept renting house, we probably move house 5 times. Finally they build their own house. At this point, most of the uncle/aunt/cousins already graduated university/school. My mom didn't go to university, but she and my dad put at least 6 of their siblings and nephews/nieces through university and 10+ relatives though high school. They are pretty proud that most of the relatives that living with us also become frugal and on their way to FI too. My family finally can relax and suddenly I just realized damn we're rich. They send my brother to university too at different island (where my father went before), and at that time I'm in high school. Get super spoiled by suddenly all of the free money. I rarely ask for fancy stuff though, probably only the fancy touch screen smartphone which is still very rare on year 2005, but spend a lot of money to go hang out. They start to talking finance with me at this point, and show me my bank and credit union account, which contain around 10000$. My brother have a higher amount, because he is older. Turn out they started saving 10$/mo for us since we were born, and this number keep increasing to $100/mo. But I still feels like that's not my money. I get spoiled financially when I'm living with them, because they always have this 300-500$ cash stashed in the house, and I can take any amount that I want, which when I look back, that's not really good for me. I started straighten up during university when I have to manage my own budget. Because I don't dare asking extra monthly money (still in the habit that we're poor even though I know they have a lot of money now). But I'm in habit of living paycheck to paycheck. To accommodate my extravagant hobby (joined scuba diving club), I making pudding and sell it in the campus. Then at the sophomore, I started representing my campus for scientific competition, and got prize around 500-1000$ per competition, which happened 2-3 times per year (as comparison, my parent only send me 150$/mo for rent, food and transport). But that money just gone, I spend it unwisely on trips, scuba gears, food with friends etc. My mom scolded me mildly why I don't save any money, but never really angry. She just happy I went to university because she doesn't have a chance to do that, and happy that they don't have to pay for my tuition fee because my campus just waive my tuition every time I won something. After graduate, I worked and met my current husband, he's super frugal, but coming from a family with high income, but their management is wrecked. His story is almost similar with my mom, his parent spend money on frivolous expensive things, but he rode beaten up cheap motorbike. His mom get the newest iPhone, buy my husband wear a torn-off t-shirt etc. After 4 years of long distance relationship (I moved to Europe to got a free master degree, and when I come back to my country, he moved to US to work, only see each other probably 2-3 weeks/year), we decided to marry. That's when I realized again that my parents had so much money. I said we want to hit Vegas and get marry for 300$, because my husband already in US anyway and I will soon move to US for PhD. But no can do, my parent want a big party. I said "Most of the invitation will be your acquaintances, so if you want a party, you fund it. I don't have money, my salary is only $250/mo etc". So they did, they throw 600+ guess party, which is surprisingly fun, but so in contrast with our 15$ wedding rings which we nested up in a pokemon ball. Sadly, husband parent's want a second big party, but they want my husband pay for it. After a big fight and lot of drama, the wedding almost get called off because his father was being bigot (me from different official religion than him, which is dumb since I and husband are factually atheist), they finally go like 50:50 cost in the second wedding. Before I and husband finally moved together to US, my mom hand me my saving account, now contain around 20000$. I tell them to keep it, but I finally ask to borrow from them 10000$ for my husband visa requirement, they just say withdraw it, it's your money. I took it but very uncomfortable, and just because me and husband lost almost all of our saving to fund the second wedding in his place. I stupidly slipped out to my mother-in-law that my mom and dad lend me $10000, and her reaction is "Give me half!". She said it jokingly, but it is kinda freak me out inside because she often randomly ask for 500-1000$ from husband. Back to my parents, so they're financially secure now, and been relaxed a bit and finally started travelling outside my country (going to Singapore, Malaysia, Israel and now planning for Europe trip etc). I think they took balanced FI-road, even though I though that we were poor, my parents still take us to cinema every now and then (we smuggle our own popcorn), took us out to picnics, and took us out to dinner if we get a good grade, which motivated me and my brother to study, in turn we get discount in school tuition so it's a good investment. They both still healthy and enjoy their live. Dad now 62, and supposed to retire, but he just can't, love his job too much, he kinda doing half-time now, so he made probably only 700$/mo. Still very frugal though, they only change car three times so far (once every 8-10 years), start to wear better clothes, never crazy expensive branded stuff though, cooking and eating simple stuff at home etc. I recently introduced my mom to mobile games, and she's got addicted. Kinda consider to put her into world classic tetris championship, she already hit level 100 in that game. TLDR: parents reached FI even though start very poor. Edit - grammar [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daily FI discussion thread - April 13, 2019 Posted: 13 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]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Are there any retirement communities targeted at FIRE people? Posted: 13 Apr 2019 04:20 AM PDT I'm thinking something like you'd find in Boca or Palm Springs, but instead of golf, bridge, and shuffleboard, amenities and activities that appeal to 35-50 year olds. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 13 Apr 2019 06:59 AM PDT What are some things you do to increase your savings rate that some may consider a bit too much? For example, I shower in darkness. Or, well, I am fine with low light conditions and don't feel the need to turn on many lights in many situations. So, when I hop in the shower I don't think to turn on the lights. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Timing of backdoor Roth relative to tIRA rollover to 401k? Posted: 13 Apr 2019 12:31 PM PDT I just completed a rollover of all of my traditional IRA funds to my workplace 401k to avoid violating the pro-rata rule when doing a tIRA to Roth conversion, aka a backdoor Roth. Is there some period of time I need to wait before making the tIRA contribution and converting it to a Roth, or am I eligible to do so immediately after my tIRA to 401k rollover is complete? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Do you take tax into account when calculating FIRE target? Posted: 13 Apr 2019 08:42 AM PDT I am new to this community and thanks to this group for all the greats posts! I have read a number of posts where there are discussions about ensuring investments yielding needed return (ie $1M at return of 4% to generate $40k for FIRE). But if tax is taken into consideration, wouldn't you need more? So in theory, if tax rate is 20%, to generate $40k, I might need $1.25M at return of 4% to generate $40k for FIRE. Just curious to see what assumptions others are using when it comes to tax and how many people take tax into consideration when doing FIRE calculations. Thanks 🙏 [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 13 Apr 2019 01:42 PM PDT What's the ideal work or job you will be doing if money is not an issue and you are born FI [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A good problem to have: too many pre-tax savings buckets! Posted: 13 Apr 2019 10:55 AM PDT I have the ultimate in great problems: I've just become eligible for my employer's 457b (non governmental non profit). I already max out an HSA and 403b annually, plus sometimes contribute what I can to a Roth IRA. Our household is also eligible to put some money in IRAs or 401ks for the self employed (I know little about these). Where should I focus our contributions? In an ideal world I could maximize all of these, but I still need some cash flow (unfortunately!) so that's not likely possible. Added for context: I've been reading MMM since 2012 or so and am heavily influenced in my thinking by FIRE. I mostly am all about being prepared for anything and capable of working on what we want, when we want. Though we may not actually retire early, just scale our work to work best for us. I guess I'm more FI than FIRE. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roth IRA: Should I invest in VTSAX with a Fidelity or Vanguard Account? Posted: 13 Apr 2019 12:23 PM PDT Newbie investing question, hopefully someone can clarify and help, I just opened a Fidelity account for a Roth IRA, because a lot of positive comments for the interface and low fees overall. Only problem is there is a $75 charge for every purchase of VTSAX. Should I open a Vanguard account instead for Roth IRA purposes or should I keep the Fidelity Account for lower expense ratio options? Is it easier to maintain all Roth IRA investments in one account or should I take advantage of low fees each offers? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Does buying a home preclude one from reaching FIRE? Posted: 13 Apr 2019 11:57 AM PDT A mortgage would keep you on the hook for a while, unless you paid it off, but that isn't very often. Do you think getting a house/townhouse/condo is good for setting one up for a more comfortable FIRE experience, despite paying a mortgage? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 13 Apr 2019 09:35 AM PDT Posting here as well since this impacts FIRE at age 55. We live in southern California bought our first home and debating piling 70% of our cash in stocks or paying off mortgage. We have a $400k mortgage after $630k home purchase, $500k in cash and ~$1mm in 401ks/IRAs. Cash comes from a side online business and bonuses here and there wife and I get from work. Being frugal all of our marriage I don't like having this mortgage payment and we've been having arguments about the purchase. We're 40 and hope to retire at 55 but feel if we pay off our home rather than invest it we may be loosing opportunity to hit our retirement date. I kick myself having so much cash on hand and not invested during this bull run but we both thought since we max our 401ks we were on track. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 13 Apr 2019 08:32 AM PDT Here is my situation: - Living ina High-Cost Area (SF Bay Area). - 33 years old - dating and getting married @ 34 - Recently purchased a townhouse. - NO 401K, NO IRA - Government job - in Accounting Income: - accounting job - 81k a year (gross) - 4.7k a month (after tax and pension) will grow 9% for 5 years then 2 to 3% annually. - side business - 80k to 100k (gross) - 5k to 7k a month (after tax) - stable and growing @ 10 to 20% a year - I think the side business will top out @ around 200k in 5 years. - The wife will probably start working in 2026 then income will increase by another 60k. - Overall Taxes will be around 35%.
Expense: - housing - 3k a month including mortgage, hoa, property tax, landline phone, and insurance. - dating - 500 a month - mostly eating out and going to small events - I paid 95% of everything. - will become grocery expense when married. - grocery/household expense - expected 1.5k after marriage and kids, utilities, cellphones, garbage, internet, and small entertainment. - car - 400 a month - including in gas, parking, and insurance - No student loan - parents paid for college. - parents - 500 a month - parents retired & not living with me - just social security income. - medical - 0 since I have good health insurance and it increases 2-3% a year. Only need to pay co-pay like $15. Low deductible up to 3k for the family. - Expected 3% inflation due to High Cost Area
I am getting married at the end of the year and will be spending a lot. -20k on the wedding (small) -10k on the wedding ring. -5k - 7k on honeymoon Current Financial Situation - Townhouse - 540k, 200k equity, 340k mortgage - Saving - 40k saving - Stocks - 2k - Sold most of them to buy the townhouse and in the rebuilding process. Average returns for me on the stock market is over 15% for the last 10 years. I am self-managing it because I am pretty good at it. - Government employee pension (retirement age 62) so I don't need to do IRA or 401k. My girlfriend will a stay-at-home mom because we hope to have 2 kids. She's working now and will quit when our first kid is born. Her income is around 3.5k month so I am not counting on it. She will work again after 5 years when the kids are in school and the grandparents can look after them. Also, I will be upgrading to a single-family home in 3 to 4 years so I expected 200k out of pocket expense, and housing expensive probably stay the same. I will be 40 in 2026 and have around 600k saved that exclude the 15% average rate of return. Am I still on track to retire at 50 to 55? What can I do to improve my situation? Where can I lower my bills? Is budgeting 7k on 2 kids too little a year? They will be in a public school like I did.
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| Is there a reason to pursue FIRE over fatFIRE? Posted: 13 Apr 2019 05:48 AM PDT It feels like this sub and r/FatFire are chasing the same goals of financial independence. If the goal is independence for this sub, wouldn't you stop at leanfire? What the main difference? [link] [comments]  |
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