Financial Independence Daily FI discussion thread - May 28, 2019 |
- Daily FI discussion thread - May 28, 2019
- Is CNBC trying to sell being poor to Millenials? "Living On $60K A Year In NYC — Millennial Money"
- FIRE with obscene high tax on stocks
- Any FIREees considering living in multi family homes?
- How do you decide when it’s enough?
- Benefits of a 2nd credit card?
- Near FIRE - help us decide where to live in retirement
- Post vacation blues - what do you do?
- Redditors with Master’s Degrees: how did you pick your masters program, and was it worth it to you to obtain it?
- Road to Retirement - Pretty Graphs and Random Thoughts From a Family on the Path to (Hopefully) Fat FIRE
- Loan repayment prioritization - 401k loan vs Home Mortgage
- Social Security FICA Tax after FIRE?
- Should I rent hack real estate with a down payment?
- Docu: Playing with FIRE. Where are you?
- Still don't get how Traditional Beats Roth (IRA or 401k)
- Immigrating to the US for FIRE?
| Daily FI discussion thread - May 28, 2019 Posted: 28 May 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]  |
| Is CNBC trying to sell being poor to Millenials? "Living On $60K A Year In NYC — Millennial Money" Posted: 27 May 2019 08:47 PM PDT I checked out this recent video out hoping that it would shed some light on how someone could be financially stable and growing their wealth outside of the current week-to-week survival lifestyle. Instead, it highlights a 32 year old waitress who makes $50-55k waitressing and $5k dancing who has no retirement savings with no plan to, shares a place with two roommates, has $5k in savings with what seems like no idea that she is losing more and more potential wealth every day of her life. Now, don't get me wrong, people can and should live however they damn well please, but I was saddened that CNBC was selling this to millennials as a way of life instead of accumulating wealth to say, buy a house or retire before 65 anywhere else but in the middle of Kansas. And kids? Forget about it. I'm frustrated that this is what my genertaion is reduced to - being happy about being ignorant poor. Thinking it's OK to strive for this woman's lifestyle while thinking "this can't be right, right?" in the back of our minds. All the while, the rich stay richer and the ignorant stay ignorant. This hit me personally because I grew up blue collar and I know most of my old friends and family would be super happy to see this video, but they'd have no idea what they're missing or why. [link] [comments]  |
| FIRE with obscene high tax on stocks Posted: 28 May 2019 06:18 AM PDT I'm in my early twenties and my goal is to be financially independent. I am Danish and live in Denmark, which obviously has great perks with free healthcare and such. But in Denmark we have a 27% tax on up 50,000kr (7,500$) and 42% on everything over when looking at stock earnings. I understand this as me then needing to almost double my portfolio in order to fire with the 4% rule as I will only be living on 42% of the 4%. Is it just not feasible to retire early with such high taxes? I should also note that our tax rate is just as high on our income as well so it just feels like I will get taxed twice by trying to FIRE. [link] [comments]  |
| Any FIREees considering living in multi family homes? Posted: 28 May 2019 08:29 AM PDT Some of my friends and I were joking about how we should all move our families into the same house so we can spend more time together. On a whim I looked up some larger houses (6 to 8 br) and I was surprised at how cheap they could be if the cost was shared amongst multiple families. It really opens up opportunities to live in some HCOL areas while still being retired (I looked at Hawaii, specifically). Plus it seems like you would enjoy some economies of scale with other expenses like utilities and groceries. Anyone have any experience with this? I'd love to hear your experiences. [link] [comments]  |
| How do you decide when it’s enough? Posted: 28 May 2019 11:25 AM PDT I'm curious about how other people set their goals and determine what is enough to retire on. I'm in my late 40s, with the option to retire in 3 years. I'd have enough to live on with some minor lifestyle adjustments. Alternatively, I could work an extra 3-5 years and be remarkably well set - more than I reasonably need and enough to get my kids started off well. I know there's no right answer that is best for everyone. I'm really just curious to hear how other people have gone about balancing greater financial security against more years of retirement. [link] [comments]  |
| Benefits of a 2nd credit card? Posted: 28 May 2019 04:58 PM PDT I received my first credit card about 2 years ago with a limit of $3900. I'm 24 now and recently found out it increased to $7400 somehow. I pay all my statements in full every month and never get close to the limit. I'm still in school and only work 30-36 hours a week usually. I also live on my own. Is there any benefit into opening another card? I read the average person has around 3. Any reason why? [link] [comments]  |
| Near FIRE - help us decide where to live in retirement Posted: 28 May 2019 05:32 AM PDT I've been lurking here for a bit and have found this group a great resource- so, thanks!. A few details about us- we are at FI now, in our mid-40s and I'm planning on retiring from my job in about 10 months. Our anticipated spend in retirement is ~120K annually. We presently live in the SF Bay Area, where we have been renting. We plan to relocate, unsurprisingly :). While we are enjoying road tripping and looking at areas in which to live, we are interested in soliciting ideas on some more options. We do have some general parameters in mind but not hard rules. Some of the places we are looking violate at least one parameter :) First, the diverse list of places under consideration so far: Bend, OR; Hood River, OR; Temecula, CA; Palm Springs, CA and area; Santa Fe, NM, a few spots in AZ Now for the list of ideals: * <$550k home purchase (3BR <2000 sq ft) * good High Schools (will have a freshman) * within weekend trip to the ocean * not severe winter (NE'ers here and done w/that) * not high humidity in summers * good outdoors access options - hiking, biking, water activities * ideally somewhere where you can find at least a little land and not only packed in neighborhoods * access to a university or good community college is a plus We are very appreciative for any input! Many people are rather passionate about where they live or grew up, so crowdsourcing ideas seemed a good strategy. We anticipate more road tripping this year and are excited to add some new destinations! Thank you! [link] [comments]  |
| Post vacation blues - what do you do? Posted: 27 May 2019 09:33 PM PDT I just got back from two weeks in paradise and am beyond sad to go back to work. I'm now fantasizing about moving to the vacation spot. Not realistic because I'm mid-career/middle age, I like where I live, but I don't have kids so I guess I can still fantasize. It doesn't help that I'm at a job I absolutely hate (been there nearly a year and have been trying to find something else but the pickings are slim atm). I need a pep talk. I'm having trouble keeping my eye on the FI-prize. Going to my job is such a weekly grind that I dread mondays. Can anyone relate? [link] [comments]  |
| Posted: 28 May 2019 03:59 PM PDT I'm currently planning to attend beijing normal university in China and I'm really having a hard time to decide what I want to do next. My current top picks are:
Do any of you have any tips on how to make a decision? or do any of you have experience with one of these options? I can pick any of these masters with my bachelor's degree, my acceptance only depends on my motivational letter. [link] [comments]  |
| Posted: 28 May 2019 10:05 AM PDT Someone messaged me saying that you all might like this post as well - enjoy! Introduction Hope everyone had a good Memorial Day! Not sure what everyone else did, but I took some time to do some finance stuff. I don't know that I came to any earth shattering conclusions, but I appreciate seeing these kind of posts from others so I figured it was my turn to participate. About Us Me (33M) + Wife (31F) + 2 Kids (3 and 1). I work in public education (college prof) in MCOL college town, wife is SAHM. We both are invested in finances, but I am more strategic/long term planning and she is more tactical/in the weeds. Don't kick me out - I don't really have a Fat FIRE number (although part of why I did this was to make one), more just a goal of being able to normal FIRE if something catastrophic happened and being able to FAT FIRE by 45 or so if I want to. This post reflects our real situation (well, I rounded the numbers off to help with anonymity). One of the big themes of this post is that you can tell different stories depending on what you decide to focus on. If you want to argue that we've had life handed to us on a silver spoon, it is an easy argument to make (both parents paid for undergrad, great job, large gifts from family, etc...). Likewise, if you want to argue that we've worked really hard to grind every ounce out of those opportunities, that is also an easy argument to make (we both earned full rides with scholarships/stipends always in excess of tuition costs [i.e. we made money while getting all the way to a Ph.D. for me and a B.S. for her], we lived frugally early on and only slowly inflated lifestyle, we both work hard). Ultimately, it is clearly a combination of both. And now, enough talk - time for numbers. TopLine - 2018 Income and Expenses As promised, a pretty graph of all income/expenses/savings in 2018 - https://imgur.com/gu8rw2H. Key things that jumped out at me (and let me know your thoughts too):
Investments and Projections for the Future
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| Loan repayment prioritization - 401k loan vs Home Mortgage Posted: 28 May 2019 01:18 PM PDT My wife and I just crossed the 25% mark on our FI goal. It's addictive :) we have increased our savings to 45% and have additionally increased debt repayment by 15%. I have a question about debt repayment. We have two debts one is 401k loan (say $X) and a Home Mortgage ($20X). I am paying 3.875% to my lender for my mortgage. If I prioritize paying off this loan, I can save thousands of $ on interest. On the contrary, for 401k loan I am paying interest to myself, so I don't mind continuing this loan for the next three years till it is paid for. But it's an easier target and reduces risk (incase of job loss). I am not sure which loan should I prioritize paying off first with the money we have carved out for additional debt repayment. Would love to get your thoughts. [link] [comments]  |
| Social Security FICA Tax after FIRE? Posted: 28 May 2019 02:18 PM PDT I couldn't find a clear answer by googling so I'm posting here. 1) If you retire early, are not employed anymore and live off a passive income, do you still need to pay FICA tax? If answer to 1) is "no": 2) If I retire before accumulating 40 credits (10 years) to be eligible for social security benefits, can I get a refund for the tax amount that is paid during the employment? Thanks. [link] [comments]  |
| Should I rent hack real estate with a down payment? Posted: 28 May 2019 03:45 PM PDT I have an online business which means I can work from anywhere. However, this is my problem:
So are there any strategies I'm overlooking for cutting down my costs of living? or for increasing "passive" income? (Please don't tell me there is no truly passive income, I know that) [link] [comments]  |
| Docu: Playing with FIRE. Where are you? Posted: 28 May 2019 10:23 AM PDT Wondering if any of you have hard/seen the docu. I am from Europe (Austria) and it seems that the docu just disappeared after the firy trailer launched. [link] [comments]  |
| Still don't get how Traditional Beats Roth (IRA or 401k) Posted: 28 May 2019 10:38 AM PDT I read all the articles in the FAQ and I understand what they are saying, but maybe its because my situation is a little different that I don't think they apply to me. My wife and I make near the roth threshold every year, so we have been contributing to roths for the past 10 years, because I thought it was the best way to go, but re-evaluating now. I have enough income, that I will max out either (roth or traditional). Therefore, technically going with a roth option would be more money, kind of. so lets take this year into account, I am currently 33 years old. I plan to FIRE between 45 and 50. We expect our income to cut in about 50%, our current savings rate is 40%, plus no mortgage after retirement. If I put 6k into a roth this year, when I retire at 50, It will be roughly 14k (most examples I am reading dont seem to factor in that this money also grows tax free). Even if my tax rate is half (Like the example from the faq, your saving in the 25% bracket to take out in the 15% bracket) I would still pay more in taxes on the 14k than I would on the original 6k. So I could use the roth conversion template (madfientist style) and only convert the 6k or maybe a little more per year, then I would save some. Also need to survive the first 5 years before I would be able to withdraw that way. I am not super frugal, I love to eat out and what not, so my wife and I plan to spend close to 6 figures during retirement. Unlike most on this board, I don't mind my job so Ill work some extra years (or 10), to be able to do whatever I want in retirement. I am not saying these guys are wrong, I trust them enough to know they are not, but what is it that I am missing? or are they only talking about people retiring by 35-40 cause the Roth $ doesn't have time to grow. Or people who are retiring and spending less than the $38k when the tax bracket jumps to 22%. The more recent tax brackets are much bigger, not sure if that plays more into it. [link] [comments]  |
| Immigrating to the US for FIRE? Posted: 28 May 2019 06:46 AM PDT Hi guys ever since I found this subreddit, the idea of FIREing has solidified in my mind. I am about to finish my (worthless on it's own) bachelor's degree (I am 23 years old), and want to get another bachelor's degree in computer science after that. My work experience until now has been largely irrelevant to computer science. But anyway, so far, so good, that shouldn't be a problem thanks to the good german educational system and my parents' support. When I finish my computer science degree, I would be almost 27 years old. At the moment, my plan is to find a job with a good work-life balance in Germany for 2 years after that. This is for personal/family reasons; I really need to stay somewhat close to my family for at least the next 4-5 years. I definitely want to apply for Google and other big companies that would offer good value for my CV, even if the chances to actually get a job there are slim. YOLO and well... why not apply. Doesn't cost me anything. Once my family issues are taken care of, I plan on starting a radical path to FIRE. And for that, I think it is best for me to move to the US. Find a well-paying job there. Live in a van under a bridge with the homeless people. Save 80% + of my income. Work my way up the income ladder for 10 years. The FI aspect is more important to me than the RE, so I might continue working after that. I am fluent in English. I like the vast possibilities, people and especially the nature in the US. I think the country is a perfect fit for me. With a (good) degree in computer science and 2 years of relevant experience, it should be possible to get a six-figure job offer (or at least close) in a high COL area in the US, right? How are the chances to get accepted for a visa? Do I start to get job offers first, and then apply for an H1B via the employer? Are there even other options (apart from 500k$ investment visa which I can't afford)? In general, what do I need to take into consideration as a non-citizen going for FIRE in the US? Can I even take advantage of all the tax-advantaged accounts? 401k, Roth, can I invest in vanguard's/schwab's ETF offerings? Does anyone know what happens to my German retirement/insurance accounts if I decide to apply for a green card and eventually naturalization? Not that there's going to be much in there but still. What about taxes? Is there going to be double taxation? Let's say I score a job with 85k after tax income. If I save 60k of that, plus the employer match, I should have just about 1m after 10 years, not accounting for any potential raises. Is it even realistic to save that much? From what I read from other people on here, it should definitely be realistic, no? I don't have a very demanding lifestyle. Biggest expense would probably be flights to visit family every now and then. I have been reading some people's experiences, and there seems to be so much to consider when moving around the world. Luckily, I have a couple of years left, but I would like to begin planning ASAP. Anyone in here with experience migrating from Germany to the US? [link] [comments]  |
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