Financial Independence Daily FI discussion thread - May 31, 2019 |
- Daily FI discussion thread - May 31, 2019
- Well, it's official. Today was my last day at work.
- At 30 YO, I'm Finally in the Green!
- 28, financially independent.
- One of the things I noticed about a growing portfolio
- Any Other Biglaw Associates Here? Looking to compare experiences and commiserate.
- Advice for a College Student
- Help me understand how recovering from recession works.
- Weekly FI Frugal Friday thread - May 31, 2019
- Parents of FIRE: What was your NW when your first was born?
- Investment Property at 22 (Plan)
- Is a 457b plan with 7% average returns and no matching worth it?
- -$23k AUD to +$8k in a year. Start of my path to FIRE
- Differentiating Roth vs Traditional investments in a retirement spreadsheet
- The Wealthfront Cash Account?
- Having trouble controlling my share of estate trust.
- Checking in and also THANK YOU
- Autopilot for the Self-Employed
- Last Checks before FIRE From Community
- When if ever to Buy a House?
- How much of your FIRE path was influenced/changed by cryptocurrencies?
- Living Between Two Short Term Rentals Offseason?
- Playing With Fire screening - June 25 - Austin, TX
| Daily FI discussion thread - May 31, 2019 Posted: 31 May 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]  |
| Well, it's official. Today was my last day at work. Posted: 31 May 2019 02:08 PM PDT I gave notice 5 weeks ago, and today they fed me cake and kicked me out. The farewell party was more fun and less awkward than I had feared. I'm about as stereotypical as it gets on this sub. 37M engineer, 15 year career doing R&D for a giant corporation. Wife worked for the first couple years, then was a SAHM for our 4 kids. I went to school on a scholarship but my parents gave me the money they had saved for my college anyway, so between that and the second income for a few years we had a huge headstart. We're both frugal by nature and have had a SR over 50% for my entire career. I've been borderline FI for quite a while, part-time for the last 3.5 years, since my youngest was born, but now I finally consider myself RE. It was easier to tell people I'm going into teaching, so that's what I told people. I enjoy subbing and volunteering in the schools and I might even get a certificate, but for now I'm taking the summer off to camp, go backpacking, and catch up on the HoneyDo list. Wife still works one day a week and I do expect to have a little side income, but ignoring that the WR is a bit under 4%. We give a lot to charity, so I have some flexibility if the long-awaited crash actually materializes. I turned in my badge less than an hour ago, so I'm still waiting for it to feel real. Maybe Monday morning it will finally kick in psychologically. Anyway, it's a happy day. Thanks for letting me share:) ETA: Lots of people asking about health insurance. That was the biggest concern. I'm in upstate NY, my kids will cost $27/mo total for CHP, and my wife and I will pay $800-$700=~$100/mo after Obamacare credits. Next year when I don't have 5 months of salary we'll qualify for an even cheaper plan. [link] [comments]  |
| At 30 YO, I'm Finally in the Green! Posted: 30 May 2019 11:29 PM PDT I left college at 23 with 80k in student loan debt. Parents had filed for bankruptcy when I was in high school and I had to take the financial burden on myself. Never had much savings. Got into about 8k worth of credit card debt post grad because I didn't have a job (degree in the arts). Landed my first job in entertainment at 24 as a PA making $450/week and have been slowly working my way up over the last 6 years to junior Producer level. Living in a HCOL (LA), it was always tough to save on such low salaries working project to project but I checked mint last night after I got my paycheck deposited and I saw the number. Net worth: $1,139.99. Having followed this sub for awhile and working my ass off to save and pay off debt, it feels good to finally be on the right side of the zero. Looking forward to that FI some day. Baby steps. Edit: Thank you all so much for your kind words and for the generous soul who gilded this! To go into a bit of detail since people are asking, here's how I did it: First off, I am not completely out of debt. I still have payments left on the student loan, but I was able to refinance through my universities credit union and got a phenomenal rate so I've slowed down on paying it off (still pay more than the minimum each month). In lieu of aggressively paying it off, I've maxed out my Roth IRA for the last 4 calendar years since the market has been so hot, and that has made me a decent return. I put about $100/week into my savings account for my e-fund and use programs like Acorn to invest with money thats automatically rounded up purchases to the nearest dollar. I had one $25k loan that I HAD to pay off in five years through USAA (I got the loan as part of another program I was involved with in college). That disciplined me from the start. I knew I had very little spending money so the only entertainment subscription I had was Netflix and internet. I ate very meagerly, cooked most of my meals at home (though work tends to pick up lunch quite often), picked up hobbies that didn't cost me too much money (like running and hiking). Over the course of the 6 years, I went from about $23k per year to $100k per year through promotions and different projects. I'm frugal. I don't spend money on shopping or clothing outside the essentials. I drive a 2008 Nissan Sentra thats fully paid off. My commute the past few years has been very short, saving a lot of money on gas. I lived with 2 other roommates for 4 years before moving to my own place, getting a killer deal on rent. I have no kids or significant other. I try to keep a mindset of not "how much I have" but "how much I have left". That helps me keep a tight budget and not spend extravagantly. I know that I could have saved a lot more over the last several years, but as I made more money, I treated myself a little more to things like travel and electronics. Overall, I'm very comfortable with where I'm at and these past 2 years have allowed me to aggressively save more than I have in the past. I am so excited for what the future will bring. If I can do it as someone who has a degree in theatre, I know others can too! [link] [comments]  |
| Posted: 31 May 2019 08:45 AM PDT I just found this sub, decided to write down what I did so far / doing. I have a degree in agriculture which I used to apply for a tender (in the EU there are various tenders for young entrepeneurs, free money basically). I got 45k USD, which I used in the agri tender. You have to keep the business running for 5 years. After the 5th year I sold everything, and got almost all the money back. I used the money to invest in property, I bought 2 plots of land very cheap in a small town 5-min drive from my city, right after the town sign. I knew from the mayor that there are big things going on in the town, basically a bunch of new stuff are being built and improved. Both of the plots are rented out now, I'm getting around ~2000 USD / month. This might not seem much, but I live in a country where the average monthly salary is less than 500$. I already own an apartment and a small car (I mostly ride my bicycle though), so I can save at least 1000$ a month. The other half covers my living expenses and I plan to invest more money. My ultimate goal is to get around 4000$/month, that would be a dream, I could do pretty much everything I want(okay not buying lambos and such but I'm not really interested in cars etc) while saving a ton of money for the old me. [link] [comments]  |
| One of the things I noticed about a growing portfolio Posted: 31 May 2019 05:21 PM PDT When I didn't have any money, big stock market swings didn't bother me a bit, who cares. Once that number gets up there though, a big down swing can realllly make you cringe. "Welp, I just lost a new boat today" lol Then next week when it's back up: "Hmm, I've appreciated two boats this week!" [link] [comments]  |
| Any Other Biglaw Associates Here? Looking to compare experiences and commiserate. Posted: 31 May 2019 08:58 AM PDT I've noticed that, despite our very high income (and high student loans), there are actually very few biglaw associates here. Are there any other biglaw associates here? Where are you at in your path to FIRE? I was hoping we could share experiences and commiserate. Some of the unique challenges I've noticed:
Edit: another thing I can think of: a lot of biglaw associates seem to "self medicate" with expensive stuff because of their stress. Some people drink expensive liquor (substance abuse is big in law), some people eat out at expensive restaurants, some people buy clothes/cars/toys. [link] [comments]  |
| Posted: 31 May 2019 07:26 PM PDT Hi, everyone. I am an incoming college sophomore working a low income job and about to start a TA job in the Fall semester. I've been working for about a year and started saving about 6 months ago for my goal of being able to pay for living expenses once I get to grad school. My education and housing is funded my my mom, so that isn't quite an issue for me at the moment. I just want some financial advice on how I can take advantage of the money I have in my savings account right now (~$3000). I am estimating to have around $40,000 once I graduate in about 4 years, but I would like for that number to be a little higher. Any advice is appreciated. From specific information on how I can invest my money to small tips. Thank you! [link] [comments]  |
| Help me understand how recovering from recession works. Posted: 31 May 2019 07:12 PM PDT Just recently learned about retirement investing. Made the 2018 tax year cut off and contributed 5.5k to my IRA and for 2019 i just contributed 6k to it as well. So atm i have 11.5k sitting in the market fund at vangaurd un-invested. Just for this thread ignore what makes the most rational sense in terms of what % of this 11.5k should go to in terms of international / us /bonds etc. If i were to put all of this into VTSAX and we fell into a recession like the 2008 one. Would i lose this money if i kept it in VTSAX and didnt pull it out? Since my fund isnt large enough to weather out a recession? Or would i still own the same amount of shares as when i orignally bought into it, so the price of the shares doesnt matter? it just needs to go back up in price? Not really sure how this works. [link] [comments]  |
| Weekly FI Frugal Friday thread - May 31, 2019 Posted: 31 May 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]  |
| Parents of FIRE: What was your NW when your first was born? Posted: 31 May 2019 05:29 PM PDT Wife & I expecting our first born this year. Anyone care to share what NW they were sitting at when their first child was born? Any steps (financially) you took to prepare? [link] [comments]  |
| Investment Property at 22 (Plan) Posted: 31 May 2019 04:21 PM PDT I'm a 22 year old college student with 1 more year until I graduate. I have a group of 3 friends who we bounce business ideas off each other. The most common thing brought up is buying a cheap college house. Some background on them. One of my friends is self employed and makes 50k a year, the second is also finishing up his last year of school but makes around 10k a year, the third just joined the reserves and will make about 1.2k a month while a student in the reserve. I make around 12k a year as a student. Our idea is to buy a house near a college me and my one friend go to for $100k. We plan on getting a first time home buyer loan, not sure if there is a loan for investment properties but we will look into it. For $100k we can look at 4 bed 2 bath homes that would be perfect for college students. We can charge $400 a room ($1600 a month). We would plan on paying $1400 a month for the mortgage and saving $200 a month for the property tax and general keep up. Property tax would be about $1500 a year. Leaving us around $1000 for lawn care (6-7 months a year) and any other general things for up keep. We would also have them pay a refundable one month rent security deposit. They would pay all bills and utilities. What are your thoughts on our situation and the idea of the investment property? I see this as in 6-7 years we would have 100k to sell the home and restart the process with 5-6 other homes and in another 6-7 years have a nice size passive income. (12-14 year plan). [link] [comments]  |
| Is a 457b plan with 7% average returns and no matching worth it? Posted: 31 May 2019 06:34 PM PDT I contribute to a 401k already, but the employer also offers a 457b and I'm trying to determine if it's worth contributing to. The plan has done a consistent 7% yearly for awhile. This seemed a bit low to me given S&P returns I could get in a brokerage account, but I get that this is tax advantaged. What's your opinion? [link] [comments]  |
| -$23k AUD to +$8k in a year. Start of my path to FIRE Posted: 31 May 2019 01:13 AM PDT Hi all, long time lurker here and just wanted to share my story if anyone is interested. Have been a long term follower of MMM, but really really struggled to put any of his ideas into practice, and ended up in $23k of debt (credit card and to family) before finally pulling my finger out and making some changes. As of pay day this month, I've hit $10k in savings and it feels so good! Bit about me: Started working in Melbourne, Australia in 2014 at 24yo, and had got my first credit card and racked up $1k to tide me over from moving out of parents place til first pay. I never paid it off, and it slowly grew to around $10k at the end of 2017, spread mostly around a few balance transfer cards. I'd also decided to move to London, UK at the end of 2017 - after a 3 week Europe trip. Needless to say, I couldn't afford it, but just put it on another card. Getting a flat dealt me another blow, as had to pay 6 months rent upfront as I had no credit/rental history. I had to borrow $7k from my sister. Between that and living off my credit card, I hit $23k debt when I got my first pay at the end of March 2018. Even though I took a ~$8k pay cut moving here, I just hit $10k in savings with just over $2k left to repay on a credit card - which should be done 2 months before the interest free period ends. I'm now full on the FIRE path - I want to be done before I'm 50. I dislike consumerism and love the idea of a simple and fulfilling life that you build from the inside. For reference, currently a management consultant on ~$75k/year living in a sharehouse in London which is around 30% of take home. Tl;dr: Moved to London, had $23k AUD in credit card and family debts, and a year later, now have +$8k in net worth and accelerating into the FIRE path. [link] [comments]  |
| Differentiating Roth vs Traditional investments in a retirement spreadsheet Posted: 31 May 2019 01:28 PM PDT I have money in both Roth and Traditional IRAs/401ks. Does it make sense to "discount" the traditional money in my estimations since I will likely be paying some amount of tax on it, or is guessing at tax brackets after retirement too speculative? Thanks! [link] [comments]  |
| Posted: 30 May 2019 10:01 PM PDT https://www.wealthfront.com/cash Anyone have any experience with this? 2.51% APY seems awfully nice. [link] [comments]  |
| Having trouble controlling my share of estate trust. Posted: 31 May 2019 04:05 PM PDT He guys this is my first post on this sub. Sorry if my question is wierd or my formatting is wrong. So ive been having some struggles with family members over an estate trust. Its a thing with control over how money is spent. My family member who is presiding over the trust has been trying to control how i spend the money. First she made me open a Ira account to deposit the first ditribution. Which i was fine with because i was planning on opening one in the first place. Second is the next big distribution. On the actual sale of the house. And she told me that she was gonna leave a list of instructions on what she wanted me to to woth the money. And the will does not state that the money should be distributed any special way. Just 50/50. So my question is. Can they do that? Or is it just being controlling? I was just gonna use it for college tuition and put the rest into a ally savings account until i had enough to invest in mutal fund. [link] [comments]  |
| Checking in and also THANK YOU Posted: 31 May 2019 10:04 AM PDT whats up guys i havnt posted here in awhile but i just want to give an update on where i am and where i was when i found this subreddit. 2 years ago i was 50k in student loan debt working at a job that sucked the life out of me. I was making 50k a year and literally hated waking up every single day to go to that job. I discovered this subreddit and decided i would pay off the student loan debt. 1 year ago i paid off the entire debt and i was stoked! but still i had something wrong, it was that job. I came here once again for advice and everyone said RUN from that job. I ended up going to a different company and WOW. my life has changed. I went from operations to sales in the same industry and literally doubled my income. I bought a completely dumpy house in a really nice neighborhood in my city, i am almost done with a complete remodel which added nearly 100k in equity. I made 10k last month at just my new job. I also started a side business that made 3500$ in its first 2 weeks of operation. I went from being miserable and making 3k-4k a month to the happiest i have ever been and made 13k last month. I want to thank the people here, and also the law of attraction. YOU HAVE THE POWER TO CHANGE YOUR REALITY RIGHT NOW. If anyone is where i was, message me. I would love to help in anyway i can because some people here reached out to me and it changed my life. Thank you to those people. That being said i want to get a "check up" on my financial decisions as of late. To be honest i have been moving away from saving as much as i used to. I have been spending an insane amount of money on my house remodel, just paying for everything cash and blowing through my entire checks. I have spent about 25k on the remodel and put another 20k down for the down payment. I know this will be seen as aggressive to dip so deeply into my cash reserves / emergency fund but the opportunity was worth it. I picked up this house for 189k in a neighborhood where everything is 350+. Im looking at about 100k in equity when its all said and done crosses fingers the housing market doesnt dip Income: 7-10k a month from main job, $300-500 per day from ecommerce store (this is very new and i am not banking on this to continue at this growth) Debt: 168k Mortgage, 1130 a month including an additional $50 i pay each month. Pay off CC's i use for rewards every month. Assets: 2007 Tahoe 113k miles paid off (10k), Checking and Savings (2k (lowest its been in 2 years honestly)), 401k that i contribute 15% of every check (15.8k), Coins/Gold/Guns (15k). Paypal account balance from ecommerce store (3.5k). Mint puts my NW at about 75k. Im hoping when the remodel is done ill be somewhere north of 150k NW. Thankfully the house is nearly done, and i will go back to saving 50% of every check and rebuilding the emergency fund / cash reserve to hopefully buy another ugly house in a year or two. I have a few other ecommerce stores i am working on. like i mentioned earlier i went away from saving, to invest into this house and a few business ventures, so far they have been profitable but i feel that i need to find a balance again with saving. I know this is a little bit of a ramble but any input is appreciated. thank you!! [link] [comments]  |
| Autopilot for the Self-Employed Posted: 31 May 2019 09:21 AM PDT Hey all! Looking for any other self-employed people/freelancers in the FI community (even as a side gig). I love being self-employed, but it does have some drawbacks. One is that it's pretty difficult to put things on 'autopilot' like many talk about here. There's no automatic deductions, taxes taken out, 401k contributions, etc. And funds come in from different sources (check, PayPal, UpWork, ACH, etc.) and at different times (net 30 to, like, net 0). I have different savings accounts set up for different purposes (tax fund, investment fund, house fund, etc.) and plan to contribute everything quarterly. Anyone else have a different setup? [link] [comments]  |
| Last Checks before FIRE From Community Posted: 31 May 2019 08:02 AM PDT I've been a lurker here for a long time. I think I've finally hit the numbers to FIRE, but still pretty nervous about quitting my job and enjoying retirement doing what I love most- raising my kids, riding mountain bikes and working at a bike shop. Here's my situation: Age: 39, Married, Two kids (4yrs and 2yr). Spouse is a teacher (but will quit if I am good to FIRE) Will quit in 3 months when I hit 16 years of service because company pension kicks in that time. Location: Houston TX. Current Job: Accounting at one of the Big 6 Oil Majors Assets: TOTAL: 3MM + 750K Primary Home Taxable Brokerage: $1MM Company Stock: $500K (vested) 401k: $250K Roth IRA: $400K IRA: $350K Rental Homes: $500K (across 3 homes) Paid off Primary Home: $730K
Debts: TOTAL: 330K Primary Home Mortgage: ~300K remaining Car Loan: ~30,000 remaining Credit Cards: Paid off monthly
Monthly Income during retirement: Cash dividends (from taxable brokerage): ~$2,000/month Company pension: ~$4,000/month Health Insurance: provided by the company for family ($3000 max out of pocket) Rental Income: ~$2,000/month (after property taxes/insurance/maintenance)
FIRE Intentions: When: In 3 months (waiting for the pension to vest) Where: In Houston (because of kid's schooling) Monthly Expenses: $9000/month
Withdrawl: I'm counting on my company pension to take care of $4,000 from my $9,000 expenses. Rest of the 5,000 is from dividends and rental income. I intend to sell my company stocks first before touching the rest of the brokerage account.
From my calculations, I can draw down around 2% or less and still be safe. My concerns: A big chunk of my assets are locked in company stock and real estate. If the company tanks, it's going to wipe out quite a bit of my savings. Also, I'm counting on rental income for a fair bit- if that goes downhill, then I'll need to draw down from my savings at a higher rate. BIGGEST CONCERN: I can't touch the 401K, Roth IRA, or the simple IRA for another 20 years.
I will be relying on returns on taxable stocks of 1MM, company pension, and rental income for that long.
But I don't know if this is still a big gamble until I can take withdrawals from my retirement accounts. What does the community think? Thank you for any insight! EDIT: Fixed pension numbers. [link] [comments]  |
| Posted: 31 May 2019 12:50 PM PDT Hey Fam, first time poster, TL/DR, can you achieve FI while renting an apt? I'm trying to figure out when or if ever to buy a house and here are all the factors, apologize in advance for all the details with poor formatting, is there a better format for these things?: 28 years old, married, no kids with no plans to have them. My wife and I are about to finish off the last of our student loans in the next two months, had over $26k only 6 months ago and really paid off aggressively with $5k left. only other debt is about $6,500 left on our car debt (used 2012 prius V we bought from carvana 2 years ago for $14k) at 2.99%, we still haven't decided if we are going to pay it off accelerated since its a pretty low rate, I think it will save about $500 in interest over 2 years if we accelerate it. We make a combined ~$115K pre-tax, ($56-$60k in annual expenses) have about $50k in our Roth 401k's through our employers and have another $10k in roth IRA's. we both get good matches at our workplaces, about $8-10k annually matched, depending on my sales for the year. we plan on bumping up or even maxing our 401's when we finish our debt, about 25-30% and targeting FI at about 46-50 years old depending on our jobs. Now onto my original question. we rent in a major US city $1475 per month, 2br, use the 2nd BR for an office, yoga, and for guests. 6 miles from both of our work places in opposite directions, we both have a 1 hour commute, I rely on public transit, (my wife drives most days but we just got an electric scooter so she's going to start using that for the summer on good weather days and it will actually save her about 10-15 minutes per day. We are currently out of our lease, but our landlord hasn't raised the rent at all in just over 2 years since we started here. annually we are at $17,700 in Rent. Homes anywhere near the public commuter line go for $250k-$300k, otherwise I'd live in a cruddy suburb with an hour and a half commute. we have about $6k in our emergency fund, with very little in our checking, our monthly expenses are about $5k and if one of us lost a job we would cut it down to $3k or $4k. Does anyone in the fire movement rent or is it avoided by everyone? is it worth saving up a sizable chunk for a house down payment? I'd estimate anywhere from $30k-$50k would be needed. we are just finally getting out of debt from and going back into $250k does not excite me at all, plus $8-$12k in taxes annually even if we 100% paid it off... If we were to go through with it I'd plan on saving for 2 years, lowering our 401% a few points and hopefully get a good rate during the possible recession. I've read through about 50 MMM's blogs, have been looking at FI reddit for the past 7 months since I found out about MMM in November. My Wife and I have about a 30-60 minute personal finance discussion weekly, otherwise I'd be spending all my time analyzing Mint and spreadsheets everyday, I can get obsessed with it and make dumb decisions outside of our flowcharts. like investing through m1Finance taxable account when I should just set our 401k % and focus on other things. TL/DR, can you achieve FI while renting an apt? [link] [comments]  |
| How much of your FIRE path was influenced/changed by cryptocurrencies? Posted: 31 May 2019 04:32 PM PDT Most people in this community are very frugal and very smart when it comes to their money however I would be curious with the popularity of cryptocurrency now how much of your money are you allocating yourself to invest in crypto or if crypto has lead to an earlier/later anticipated retirement age for you? [link] [comments]  |
| Living Between Two Short Term Rentals Offseason? Posted: 31 May 2019 06:34 AM PDT Does anyone else plan to own two short term rentals and alternate between them in the off season? For example, more than half of my beach house's revenues are generated in the summer, and more than half of the ski cabin's revenues in the winter. Living at the beach house in the winter and the ski cabin in the summer seems like it could provide significant cash flow so as to reduce the necessary withdrawal rate from passively invested funds. I know this definitely isn't leanfire, but doubt it falls into fatfire territory either. I understand that these properties probably aren't the best investments early on the path towards FI, but it seems like a partially self-funding way to increase lifestyle quite a bit when RE. Also maybe an extra inflation hedge? [link] [comments]  |
| Playing With Fire screening - June 25 - Austin, TX Posted: 30 May 2019 07:10 PM PDT This was organized from someone in the ChooseFI Austin facebook group. I'm hoping it's okay to advertise this here to get some more visibility since a minimum number of people need to get tickets or else it's canceled. Also it's technically in Pflugerville, they tried to get a more central Austin theater but that wasn't working out for what ever reason. [link] [comments]  |
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