Financial Independence Love/Hate for FI |
- Love/Hate for FI
- Selling house to avoid HOA pain
- A good reason to aspire to FIRE
- Daily FI discussion thread - April 05, 2019
- Disagreement on how to spend extra money
- Weekly FI Frugal Friday thread - April 05, 2019
- My chronic diseases are costing so much money and I don't know what to do.
- Pre-Tax or ROTH Retirement Contributions?
- Extended Warranties and the FIRE Mindset
- April is National Financial Literacy Month. Do something to help improve financial literacy for others.
- 25M - First "real" job, want to make sure I'm setting myself up right. Advice welcome!
- For those of you who are "sticking out" a high paying job that you hate to FIRE sooner, it might not be worth it.
- 70/20/10 rule? Is this sustainable?
- (24M) A short background and how buying a house has increased my FIRE savings
- Are whole life with LTC riders a good addition to an early retirement portfolio?
- Want to ask boss for raise today...advice?
- Why not FIRE-ing is super risky
- Retired FI/RE people, what does your portfolio look like?
| Posted: 05 Apr 2019 01:26 AM PDT I'm curious if others feel the same way about this group that I do. I'm a rust belt city guy. Plugging away towards FI in LCOL with a middle of the road salary situation. I really love the insights and takeaways from this sub but in some ways I think it takes on the characteristics at times of traditional social media that most Redditors loathe. I don't like FB or Instagram because it's a sizzle reel of everybody's life. Pictures of vacations, achievements, image crafting to perfection. It's not really an indicator of what the average person's life is and therefore creates a lot of sadness and depression for people who use that platform too much and start to compare their real life to someone else's sizzle reel. Sometimes I do that with this sub. This sub can become a sizzle reel to me. The reason being is I imagine that 90% of the sub are people like me. Salaries between 30-90k who are saving aggressively in order to go against societal norms of what wealth and/or retirement should be. (when I was in HS I really like that Rage Against the Machine song "F*ck You I wont Do What You Tell Me!" and I realize that FIRE is just a grown up version of that... but back to my point) The other 10% are people in STEM or unique situations who share what they've got going on. I'd venture a guess that 80% or the content comes from those 10% of users in this sub. So the status quo, or what is average, is set by that 10%. "37 - 2.5M NW what should I do?" type posts. Now I'm not saying the person writing this is bragging or doing it for validation (although I'm sure that's true in some situations). But it does set the bar in many ways... well shit I'm no where close to that I'll never share where I'm at, now that I think of it I'm kind of a failure. That's why mindfulness is so important with FI if you're going in these groups. I lose track of that sometimes and just pile on myself but really I should just be comparing me against myself yesterday and not against redditors. TL:DL The high achievers tend to share disproportionately more which creates an unrealistic average which in turn creates lurkers out of most people in the sub who are left thinking they haven't done squat. [link] [comments]  |
| Selling house to avoid HOA pain Posted: 05 Apr 2019 02:17 PM PDT Hi folks, Have a house in the DC region and couldn't escape the HOA trap. I bought it for 415,000 three years ago and it's up to 500,000 ( Zillow est ) now. I rent it out while I live and work out of town. The situation is great, my mortgage is being paid by tenants , but the HOA is needy AF. Retired old men who loop the perimeter everyday and can't wait to find something wrong. I've put about 8,000 in three years into the outside of the house in fees expenses and material for so many little things. "We see some discolored wood by the roof, are you missing a shingle after the winter, your back fence is discolored where it touches the dirt " Often the HOA staff has mentioned they don't actually know much about construction just that it looks better this way. My tenants leave in 6 months, and I'm contemplating selling the house. I'll only make about 65,000 on it, but the cost, time and effort on the place continue and it's stressful. As this house is 1/3 of my portfolio, am I making a bad emotional decision? Thank you [link] [comments]  |
| A good reason to aspire to FIRE Posted: 04 Apr 2019 05:02 PM PDT Broke my foot at the gym and my workplace has been reluctant to let me work from home. I'm 36 and just paid off $75k of student loans (with interest I'm guessing over $100k) and cash flowed graduate school from 25-30. I'm an accountant. I have about $300k in investments and some cash outside this. It's not enough but it's taken me a long time to get here with what my education costs. Currently making $132k a year and while I don't calculate my savings rate I've saved $27k in the last ten months. My expenses are low although I need more willpower on dining out and such. This nonsense with work has inspired me to get back on the FIRE wagon with a vengeance. It's so frustrating to have other people in charge of my life and even whether or not I commute an hour by foot and subway on crutches. ETA: I'm commuting right now and this guy pushed past me and literally stomped on my non broken foot. [link] [comments]  |
| Daily FI discussion thread - April 05, 2019 Posted: 05 Apr 2019 01:09 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]  |
| Disagreement on how to spend extra money Posted: 05 Apr 2019 11:08 AM PDT My husband and I have been married for 1.5 years and have always agreed on finances but we're having a major disagreement on whether we should pay off the mortgage early (what he wants) or save/invest (what I want). For starters, we're 27 and combined make around $120k. We both don't like being in debt so we paid off student loans within 2 years of graduating and for the most part keep our spending down and try to save as much as possible. We are both in a field that is difficult to find fulltime work in so had to move 1600 miles away from home just to find jobs. We plan on moving home in 5 years before having kids. We also want one of us to stay at home with the kids, at least for a few years or possibly more. We bought our house last October and owe around $187,000. My husband wants to get the mortgage paid off in 3-4years, which would involve really budgeting and spending even less than we currently do. He hates having debt over his head and wants to get the mortgage paid off asap. I've really been getting into FIRE lately and would love for both to retire in our 50s or be able to work part time in our late 40s/early 50s. I feel like we only have 5 years left of having double incomes and want to make the most out of it by investing heavily (max both 403bs, open and max roth IRAs, put extra in nonretirement VTSAX) so compounding interest can work when we lose an income). We also would be taking a pay cut to move home. I just dont see the point of paying off our mortgage just to move asap. We both feel very strongly about our side and can't come to any sort of conclusion. I'm hoping to get some opinions on what we should do with this extra money/ what will best help us get to FI. Thanks! EDIT forgot to add that the extra money is about 3-4k a month, if we keep our spending low. The mortgage is 4.875% [link] [comments]  |
| Weekly FI Frugal Friday thread - April 05, 2019 Posted: 05 Apr 2019 01:09 AM PDT Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! 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]  |
| My chronic diseases are costing so much money and I don't know what to do. Posted: 05 Apr 2019 03:25 PM PDT Hi all, I'm frustrated and hopeless about my situation. Depressed might be a better word. I started saving money and investing in the past year and have accumulated a couple thousand. What I've come to realize is that my chronic conditions (causes unknown) force me to go to the doctor constantly (biweekly, monthly). That means I have to pay for visits, medications, x-rays, labs. All of this means my bill is running up to the $200 to $300 per month. It feels like a tax I'm paying to keep myself alive. I'm lost right now and I'm not sure what to do. Maybe someone has been in this position before and can give me advice. Sorry for the negative post. Thank you for reading. [link] [comments]  |
| Pre-Tax or ROTH Retirement Contributions? Posted: 05 Apr 2019 03:20 PM PDT ROTH 457 (b) or pre-tax 457 (b)? Can someone explain to me which is better? I don't fully understand the main benefit to ROTH contributions. I've always thought it was better, as it would save you from being taxed when you start taking money out, but I've been told lately that ROTH is actually worse because people usually "make less" in a retirement so would be in a lower tax bracket and therefore pay less tax if the contributions were put in pre tax and the tax was not paid until retirement age. Please explain! [link] [comments]  |
| Extended Warranties and the FIRE Mindset Posted: 05 Apr 2019 01:57 PM PDT I normally find it fairly easy to assess the value of purchasing an extended warranty when making a significant purchase, but a recent piece of mail has me questioning my decision-making and how it fits in with the FIRE mindset. Certain things, like cars, often come with a decent warranty when purchasing new or CPO, and even sometimes when purchasing used, but many "extra" warranties tend to be somewhat "scammy." Appliances often come with warranties that cost about 25% (just bought a new fridge for $800 and a 3-year warranty extension past the manufacturer's first 3 years was $180) of the replacement cost of the appliance and only last for a few years, so I tend to stay away from these. Recently, however, my electric company sent some information regarding my electrical service connection and meter. The materials reminded me that if something were to happen to them, that I would be responsible, not the electric company. I know from friends and neighbors that have had to replace meters and service connections, that the cost in my area typically runs about $3000. The warranty my electric company is offering is $80 a year. Without reading the fine print, this seems like a decent deal, as I don't expect my meter and service connection to last another 37.5 years ($3k / $80), but I also don't know how much longer I will be living in my current house. This situation got me to thinking, what is the take on warranties in general when also working towards FIRE. As risk-adverse people, should we lean towards them, or as skeptics should we stay away, as there always seems to be a "catch." I was wondering what opinions others might have on various types of warranties and how it plays into FIRE. [link] [comments]  |
| Posted: 05 Apr 2019 06:12 AM PDT Financial literacy doesn't mean becoming a guru or all of a sudden knowing how to save or invest. To help someone get on the road to literacy it can be as simple as understanding what a Mutual Fund is or how to set savings goals. There's a series of videos on YouTube by Fidelity that can help expand yours and others literacy: https://www.youtube.com/playlist?list=PLGKKmEmJDSiL041acBKlWMsu2P-FndXji There's also a cool tool on Fidelity's site that can help people set their savings goals: https://www.fidelity.com/labs/goal-booster/#/ I have three young children and my goal this month is to just educate them on what the different types of investments are. That's it. Not how to invest, just helping them understand that there are things that people invest in. If you guys have some tools or information that you think is helpful, please share them. Also, think about how you can help others outside of Reddit become more Financially Literate. [link] [comments]  |
| 25M - First "real" job, want to make sure I'm setting myself up right. Advice welcome! Posted: 05 Apr 2019 12:51 PM PDT Hi everyone - as the title mentioned I'm 25 and (finally) about to start my first real job. Current net worth is a whopping $4000 but I have zero debt. At the end of the summer, my salary is going to quadruple from ~25k to ~100k. Based on some rough calculations, after taxes and maxing my 401k I'll have 62k leftover. Rent, utilities, and living expenses will eat up around 30k a year. What's the best use of the remaining 32k?
Initial thoughts: Begin setting aside money for a down payment on a house. Real estate investment is something that I'd like to get into over the next few years. Alternatively, I can throw it all at mutual funds. Maxing out a Roth IRA is also a consideration, but I'm unsure what's optimal here.
Finally, if anyone has recommendation on reading materials, videos, etc. please let me know. I've read a lot of the basics (Millionaire Next Door, Rich Dad Poor Dad, etc.) but am looking to further educate myself and hopefully dive deeper into these areas. Thanks for the help! [link] [comments]  |
| Posted: 05 Apr 2019 08:39 AM PDT Throwaway. I've been running various income scenarios in my excel sheet lately to see how they affect our FI date. Our goal is to be FI when we hit a 3.5%SWR and have our 300k house paid off. SO and I make 120k after taxes annually (60k from me, 60k from him). We are investing as much as possible now and will be allocating more to paying down the house in the future. I despise my job's schedule (holidays, weekends, days, nights, social burden, hard on me and my SO), but have golden handcuff syndrome. I would like to stick it out for 3 more years, then go to a lower paying job. I know I will be able to make at least 30k after taxes somewhere else with my degree, so I use that in our projections. Staying at this job for more 3 years, then leaving for 30k/yr, will allow us to hit our goal in 13 years (5% growth projections). Staying at this job all the way through will allow us to hit our goal in 10 years. So, working this job that pays twice as much for 10 more years, will only shave 3 years off of our FI date. I cannot fathom working this job 10 more years, and would much rather work longer with the lower paying job. I just wanted to share this so others who are at a higher paying job that they hate can use this as a spark to run simulations of their own. This is a good example of the power of time and compound interest. Those of us who wish to be FI in a short period have to make up for time by investing more money. Even though I'll be making 30k/yr less for 10 years, those extra 3 years of working makes up for the lost savings. To me, that is worth it for my happiness and sanity during the accumulation phase. [link] [comments]  |
| 70/20/10 rule? Is this sustainable? Posted: 05 Apr 2019 02:16 PM PDT i'm trying to calculate my FI # and determine how much i need to save per month based off my income. I'm not sure if i'm doing it correctly but i've calculated all my monthly expenses vs. my yearly income This is what i came up with (numbers rounded for ease of use): Monthly expenses - $2400 Monthly income (after tax) - $4650 Difference - $2256 Apply 70/20/10 rule: $1580 for bills $450 to save $225 to spend Am i doing this correctly? [link] [comments]  |
| (24M) A short background and how buying a house has increased my FIRE savings Posted: 05 Apr 2019 06:32 AM PDT I'm 24 years old, live in a MCOL area in the midwest, and make about $60k a year doing financials. The message I want to share is at the bottom of this post, but I figured I'd give a short background and progress over my first year of trying to save money for FIRE. I'm not a huge saver like some people on this sub, I probably save around 40% of my income when you count retirement and student loans as "savings". Here's a short breakdown of the 9 months I've been tracking my NW and debt. Changes since June 2018 (9 months): Cash: -$1k Retirement accounts +$11k Student loan debt -$6k Bought home for $226k back in November, only put down ~$7k and the seller paid closing costs So nothing really substantial here.. certainly not compared to most stories on here. Before I bought my house, I was paying $850/month for rent when splitting an apartment with one roommate. I started doing some research about potentially buying a house and getting out of renting and into house-hacking. I feel like my outlook on home ownership is a lot different than most on this forum. My mortgage plus PMI is about $1,500/month. I live with two roommates who pay $1,400 of it. We split utlities evenly and they come out to about $80/month for each of us. Now I only pay $200/month for my living expenses and I'm building some equity. Of course, I have paid like $700 in plumbing costs and I'll have other expenses moving forward. But I'm really pleased with the increased monthly cash flow as well as building equity in my home. Additional appreciation would be a bonus. Either way, I think this is something to think about for those of us who live in LCOL or MCOL areas. TLDR: Bought a house in MCOL in the midwest, rent to 2 roommates who pay 90% of my mortgage, view it as increased monthly cash flow as well as a chance to build equity. [link] [comments]  |
| Are whole life with LTC riders a good addition to an early retirement portfolio? Posted: 05 Apr 2019 12:15 PM PDT I'm about 35 and have the opportunity to purchase a whole life policy for $250,000 at about $350 per month. It provides dividends and cash value. I'm trying to decide if it's worth pursuing. [link] [comments]  |
| Want to ask boss for raise today...advice? Posted: 05 Apr 2019 07:52 AM PDT I work for a large bank in the USA. My job is 100% work-from-home, because it's work-from-home I started my own side business that I've been profiting $20k/year for the past 2 years. I love it. All jobs for our bank have 3 points in the payscale, for example: Low $39,000 Midpoint $45,000 Max $51,000 8 months ago, my boss's boss decided to raise everyone on the team to at least be at the "midpoint" pay for the job. So I got a raise from $43k to 45k from that. 6 months ago the bank increased the "midpoint" pay for my job to $52,000, putting me below the midpoint again. Last month I got a yearly 2% raise which puts me at $46,000. I'm 12% below the midpoint now. I plan to ask my boss for a raise, but don't really have any intention to leave if they refuse, as I'd lose my business income if I got a new office job. Here's my "speech" for our bi-weekly 1:1 meeting I plan to say today, does it sound ok? "I'd like to discuss my pay. I've received a performance review of meeting all expectations, and exceeding some expectations. Overall I love my job's responsibilities, challenges, the team, and have no complaints there. After being with the company for 8 years it feels a little discouraging to be 12% below the midpoint pay still. Would you be willing to discuss with upper management and HR a possible out-of-cycle pay increase?" [link] [comments]  |
| Why not FIRE-ing is super risky Posted: 05 Apr 2019 05:50 AM PDT Why do you think not FIREing is risky? It feels like non-FIRE people say all the time about how risky FIRE is, but I think the opposite is true. Here's my story: TLDR - automation and governmental risk means any one of us could be out of work before 65 - so saving to retire at 65 is super risky. I follow politics a little bit. Lately, I've been following Andrew Yang. He talks a lot about how automation will take a significant portion of American jobs in the next decade (and already has taken many jobs). This got me thinking about automation of my job. As a life insurance actuary, I generally feel pretty safe. The work is complex and involves a lot of judgement calls and negotiating with different departments in the business. This should be hard to automate, right? But even my job has a couple significant risks. (back to politics) Many candidates are talking about single payer health care. If this happens, 25% of actuaries in the country (who work in health insurance) could lose their jobs. Their natural tendency would be to move to the life insurance and P&C lines of business. This oversupply of labor could eventually reduce my wages and/or lose me a job. Another possibility is that we have some kind of Universal Basic Income. If Yang becomes president and everyone gets $12,000 per year, I think life insurance is a lot less important. If the main breadwinner of a household dies, at least there's always $12,000 per year coming in. Declining sales in the industry again could mean that I get reduced pay or lose my job. So even for me, a person with a job relatively safe from automation, I think it would be super risky to not save for early retirement. I can't count on working to 65! [link] [comments]  |
| Retired FI/RE people, what does your portfolio look like? Posted: 04 Apr 2019 04:18 PM PDT My parents are 60 years old and they are retiring within the next year. They have saved up around $500k in cash. My dad has pretty much only invested in real estate over the years, so he has around $3mm in real estate assets with about 1/3 of that being left to pay in mortgages. They don't have any significant amount in retirement accounts (self-employed for the past 15 years) nor do they have any significant amount in any sort of fund. Currently, my dad plans to continue to use his cash to buy more real estate. (Either an investment property or a home that they can retire in.) But he feels housing prices are pretty high right now (in California) and has asked me to gather other ideas in how he can invest and diversify his portfolio. Should we keep investing in residential properties, or should we diversify into other things? Thanks in advance. [link] [comments]  |
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