Financial Independence Daily FI discussion thread - June 01, 2019 |
- Daily FI discussion thread - June 01, 2019
- I’m a 27 year old having cliche doubts on working in an office for the next 40 years. I’m thinking of going the BaristaFIRE route but I have some questions.
- Advice for High Income
- Thank you, getting FIRE'd up.
- How to calculate FIRE time as a teacher
- When FIREd, what can you use as income guarantee for rent contracts?
- Other subs / resources for 'building the life you want'?
- Which life path would you choose for FIRE? MBA + Consulting at $160k or remote project manager at $100k
- Terrible Job for FI
- Outcome of Mass Migration to Index Funds
- Build the life you want and then save up for it. But why do people build a life around a job that they dont like?
- Salary Required to Save 100k/year
| Daily FI discussion thread - June 01, 2019 Posted: 01 Jun 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]  | ||||||||||||||||||||||||
| Posted: 01 Jun 2019 07:07 AM PDT I just started my second job in my field. I have a Masters in Urban and Regional Planning. I previously worked at a non-profit and enjoyed it for the most part. I left that role to move closer to my girlfriend, who still lives an hour and a half away from me (though she used to live a 4 hour flight from me). I currently work for a city doing policy planning, and there are definitely some positives. It's a nice office downtown and there are some people I really connect with. I walk to work. At the same time, there are lots of days where I feel like I don't have a ton to do and it's really hard to book meetings with my supervisor, get feedback, and get more things added to my plate. Anyway I'm realizing that this is kind of the norm in offices. The work I do is important but I won't see it realized for years. The only route for me to aspire to is management, and I really have no interest in that. The other thing is all of my coworkers have recently bought houses, have had kids, and that's all they want to talk about. Some of them see the office as a place to show up, and then leave from as soon as the clock hits 4:30. I think it's important to be surrounded by people that are different than you but I have no desire to have kids, buy a house, or kid married, and I don't think I will in the future. My girlfriend is in the same boat. I find that aspect of the culture annoying. For example, a colleague corrected me in a condescending way when I referred to her husband as her partner yesterday. I was under the impression that was the most polite way to refer to someone when you aren't sure. Anyway. In my previous role, I worked with lots of people who were super enthusiastic and the days would go by quickly. We would eat lunch together. I shared an office with one other person so I didn't feel like people were watching over me. Now I can overhear everyone at all times and vice versa. I'm realizing that this is much more the norm than my previous role, and this is what I'll be looking forward to for the next 40 years. I've always been a lot more interested in graphic design, art, and that sort of thing. I paint on the side, do music, and take photos. I'm considering becoming a landscape architect, architect, or graphic designer. There are a few options and so I wanted to get your feedback. My current financial situation is 70k saved in liquid assets. No debts or monthly payments. Renting in a medium cost of living area. Option 1 - Save away for Traditional FI/RE Plug away in this sort of career for the next while, try to save as much as I can and hopefully retire early. I might be able to transition more to an urban design role if I do a certificate part time. Maybe start a business as a consultant when I get more experience on my belt and set my own hours. I could try to find work that is part-time or aligns more with my lifestyle though it's seeming unlikely. Option 2 - Career Change - No FI/RE Stick it out for a year, save more money, earn my professional designation, and then go back to school for landscape architecture or architecture. I work with a few people who do this sort of thing, and their work seems more interesting. I'm worried that some of the same problems would rear their heads with this though (too much of a corporate culture, sitting at a desk all day, etc.) I also would achieve FI/RE at a much later time. Going back to school would eat up my savings and earning potential. Option 3 - BaristaFIRE Try to work as a freelance graphic designer. Study on my own time, build up a better portfolio, find clients. Stick with my role until I learn the ropes. Set my own hours and that sort of thing. Maybe pick up some longer-term positions if I feel the need to. I've known graphic designers and have been to some of their offices over the years and it seems like the office culture for that kind of work aligns much more with me. I used to do fiddle around with InDesign in my own role fairly often and this is when I was happiest. Option 4 - alternative BaristaFIRE Try to find work outside. Look at working in a National Park. I did that one summer and loved it. My degree is relevant to some of the positions there. The only problem is that most great parks are super far from my family, and I've already been far from them for most of my 20s and feel guilty. I probably won't achieve FI for a super long time but I would enjoy my life more. I would pick up temporary or part-time gigs here and there. Any thoughts? I know this is all cliche, but I feel like now is the time to try to this stuff. I've been in school or working my entire life, and I've managed to save up a lot. I don't have kids or other commitments, and I don't plan to, so I don't feel it necessary to put on the golden handcuffs. TL;DR having a quarter life (one third life?) crisis and I want to go the baristaFIRE route or at least switch it up [link] [comments]  | ||||||||||||||||||||||||
| Posted: 01 Jun 2019 03:19 PM PDT First off, thanks to everyone in the community, it has been super valuable and inspiring. I was hoping to get some advice on what I am currently doing and what I could be doing better. My income has increased a lot over the last 5 years and I'm in a very high tax state, so I've been trying to figure out how to minimize tax now but also how to maximize my savings in the long term. I'm aiming to FIRE in about 10 years. This is what I have been doing so far:
Questions:
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| Posted: 31 May 2019 07:51 PM PDT I'm finishing my 5 week paternity. We learned during that time that my mother in law will leave us this year due to progressing medical issue, at 63. Luckily, she had pre-retired at 48, which has been the best decision of her life. In this month, I geared up to be more frugal then we already were.. I read finance books from the library, started reading this FIRE and MMM blog... Nothing has ever made as much sense in my life, this is a goal I want to achieve. This goal has pushed me these past weeks, I discussed it with my wife and managed to move her money away from a "high savings account"(1.05%) and into a low fee ETF. I moved my money into similar ETF based on the canadian couch potato portfolios, but, most of all, I got out of the house... Installed a milk crate in front of my bike, rode it everywhere, to grocery shop, to get my daughter to daycare (in separate child seat attachment lol, no trailer yet, waiting for good 2nd hand price).. and just to ride, freely. I'm tired of the bullshit, the wheel of consumption, the whining about how it's "always the same/rich that have it all", tired of people going nowhere but being happy they got that new video game every week. Thank you, FIRE movement, looking forward to 15 years from now. [link] [comments]  | ||||||||||||||||||||||||
| How to calculate FIRE time as a teacher Posted: 01 Jun 2019 02:10 PM PDT I would like to figure out how to use my eventual teacher retirement as part of my fire route. I will receive 2.3 times the number of years worked of my highest 3 years salary when I retire Currently 38 years old, taught 12 years, have about 50k in a Roth IRA and can contribute 6k a year. I don't mind going 100% stocks until I retire. My wife is going to nursing school in a community college which we will pay for out of pocket. Have no other debt besides 128k in a house. Plan is to work until 56 when I have all eligable teacher benefits and will receive about 70% of my teacher pay. Hopefully the Roth IRA and additional income from my wife next 20 years will cover the rest of the gap. Does this seems reasonable or do you think I might need to work until 65 when Medicare kicks in and I would receive 90% of my teacher pay. Thanks for your time and help. [link] [comments]  | ||||||||||||||||||||||||
| When FIREd, what can you use as income guarantee for rent contracts? Posted: 01 Jun 2019 11:01 AM PDT Hey guys, a bit of a theoretical question, since I'm not in this position. But recently I found myself in between jobs and with the prospect of needing to rent a flat in a highly-competitive, ultra-traditional (in matters of how things are done financially) European city. With high demand and low offer, you have to compete with everyone else to even have your offer considered, and everybody prepares a personal dossier in which the most important item is proof of your full-time job, with contract and salary slips attached. Not having a full-time job myself, I was wondering how to deal with this, and then I asked myself what financially independent people who can afford not to work for a salary anymore would do in a similar situation. It's obvious that if you have the capital, that should count. But what if a specific renting market is so fixated on the salary as the be-all, end-all of guarantees? Do you just submit evidence of your investment portfolio and hope for the best? Is there a Europe/US divide in considering this a thing? Thanks for any answers! [link] [comments]  | ||||||||||||||||||||||||
| Other subs / resources for 'building the life you want'? Posted: 01 Jun 2019 09:14 AM PDT So, I'm the poster boy / cautionary tale what NOT to do pursing FIRE. I've gotten to where I am financially by being a frugal, boring, one dimensional workaholic. I don't want to be that guy any more, and I need help. I'm trying to figure out how to 'build the life I want' but I have no idea how. I'm working on all the standard shit. Diet, exercise, sleep, etc. I'm trying to make new friends and reconnect with old ones (This is surprisingly hard in your 30s). I'm also trying to find new hobbies that help me connect with people and overcome my social anxiety. What books, subreddits, other resources, etc have you come across that were helpful in 'building the life you want'? [link] [comments]  | ||||||||||||||||||||||||
| Posted: 01 Jun 2019 12:56 PM PDT FIRE family, I'm debating a critical life decision and I'd love to hear your thoughts on it. I've been in Big 4 consulting for a few years and have mostly enjoyed my time so far, working as a high-performing individual contributor and getting to explore lots of different clients, industries, and roles. But I've reached a point where most people either exit consulting for a quiet industry job, or they decide to dig deeper, getting an MBA and coming back to consulting for a people management position and leadership track. I'm facing this fork in the road and I'm not sure how to proceed, especially as I feel this also represents a choice between life values and trajectories. If I choose the MBA and consulting path, I'm choosing ambition and am deciding to stretch myself to do things that are uncomfortable and may help me grow as a person in a high-demand professional context. If I choose the project manager position, I feel like I'm choosing work/life balance and the opportunity to tackle personal priorities and goals (like living in a van for a year and visiting all the national parks while working remotely). Which path sounds more appealing to you? How would the relative FIRE potential of each weigh into your decision? [link] [comments]  | ||||||||||||||||||||||||
| Posted: 01 Jun 2019 09:52 AM PDT So I'm in the very fortunate situation where I have the opportunity to go back to investment banking or stay in a great M&A role. If I go back to banking I would make $25k-$70k more than my current role, but also work 3x the hours (going from ~30 to ~90+). Current role gave me a bump but indicated to me that a promotion wouldn't bring a pay raise, which is really worrying since next promotion wouldn't be for 3+ years. I do make great money ($100k+) in current role though, so not sure if that's a terrible thing. The IB position also has the possibility to pay for an MBA so there's also that... I would live cheaply banking and would be able to save 50%+ but I also would be miserable, so it's a huge trade off for me and I'm having a really hard time figuring out if it's worth the sacrifice. I want to achieve FI ASAP obviously but this seems to be such a large sacrifice to do it that I'm not sure I can justify it. Is sacrificing a few years now going to be worth it down the road or am I just going to look back and regret giving up years of my life? Appreciate your responses ahead of time! Edit: I would be able to sell car and get out of very expensive Apt. lease by going to banking as well. I guess I'm more trending towards FatFire as well since income is so high? [link] [comments]  | ||||||||||||||||||||||||
| Outcome of Mass Migration to Index Funds Posted: 31 May 2019 11:52 PM PDT while this may be more appropriate for a sub like r/investing or r/stockmarket i think that fire guys give the best discussion --- tl;dr if everyone were to buy index funds, that would open up more opportunity for professional money managers and individual investors to have more chance at beating the market, ultimately reducing the amount of index fund investors while possibly increasing professional investor return performance longer tldr @ end --- so ive recently seen lots of people in discussions and blogs getting worried about impending mass-migration to index funds, typically blaming groups like FIRE etc that promote the simple investing into index funds like VTSAX, SPY, whatnot, rather than individual stock picking or buying mutual funds and investment company equity. the people that seem to be getting worried about this claim that if everyone was to only buy index funds, their prices would skyrocket and they'd become too "expensive", reducing their efficiency and total return. I see people that have some amount of their portfolio in a Total Market Fund, and then some of their portfolio in a similar Total Market Fund offered by another, different company (Vanguard/iShares/Blackrock whatever). while this would somewhat make sense if the primary company were at risk of collapsing, these people state that it is in case of one of the funds becoming too expensive due to an influx of passive investors. these kind of discussions remind me of Charles D. Ellis' 1995 article The Loser's Game and his subsequent '98 book Winning the Loser's Game. Ellis explains that during the mid-twentieth century professional investors were doing bloody well at beating the market, and the average Mr-and-Mrs-spare-cash were more than happy to invest with mutual funds and investment companies in order to retrieve these returns. although once people realised that there was money to be made in stock picking, many more small-time investors had a go at picking individual stocks and studying to become professional money managers. this increased influx of professional investors is what creates the Efficient Market Hypothesis, theorising that, on average, company stock prices are where they should be based on all publicly available information. This makes it extremely difficult to beat the market since you have exactly the same information about a company as anyone else. Ellis claims that, unless one is intent on becoming a professional investor in order to stock-pick themselves, individual investors could do much worse than "joining the market" via purchasing shares in an index fund or the like. evidently, FIRE communities advocate index funds as a way to retrieve [pretty darned good] stock market returns over the long run with relatively passive investing. some people are worried that increased numbers of investors [due to increased numbers of people joining these communities] will figure the benefits of index funds, thus retarding their efficiency. I include Ellis' theories that increased numbers of money managers reduces potential for outstanding portfolio performance; though I believe that an extremely drastic increase of index fund investors would then do the opposite and allow for the [reduced number of] professional money managers to come in and have more chance at garnering increased portfolio performance. this would evolve much like the increased numbers of passive investors in mutual funds allowed for professional managers to start their own successful funds a few decades ago. In short (though more of a longer tldr): in the late 1900s, money managers were doing very well at beating the market and retrieving high returns; this introduced many more professional money managers as they all wanted some of the action; increased number of professionals creates an Efficient Market and reduces potential for beating the market and achieving outstanding returns; many are currently realising that professional money managers are achieving substandard returns relative to the index total market; passive investors thus flock to low-cost index funds; some in FIRE and similar community discussions state that they are worried that mass migration to index funds will reduce their accuracy and efficiency of the market; i believe that mass migration to index funds will allow for professional money managers to come back into the picture and will allow for further possibility of them garnering increased returns; this creates a cycle of money managers being discouraged and a flock to index funds that become inefficient then a flock to money managers and a flock to index funds with probably many other factors like bond markets and interest rates/taxes etc affecting returns available that i dont know anything about though honestly i think we have nothing to worry about if we all buy index funds thoughts? [link] [comments]  | ||||||||||||||||||||||||
| Posted: 01 Jun 2019 12:57 AM PDT Build the life you want and then save up for it. But why do people build a life around a job that they dont like? [link] [comments]  | ||||||||||||||||||||||||
| Salary Required to Save 100k/year Posted: 31 May 2019 09:29 PM PDT I decided that I wanted to set my savings goal at 100k/year. I figured that making 1 million/10 years would be the best plan I could go with to FIRE. If I reach my 100k/year goal, I feel like I could start finally frivolously spending beyond that without a lot of guilt. In order to figure out these numbers, I had to go figure out how much before tax salary I had to make and what my monthly spending average would be. I assumed a 30% tax and crunched a couple of numbers to come up with this chart:
So this is very helpful for me (which is why I'm sharing). If I spend 3k/month, my household total salary must be 190k to reach my goal. If I want to upgrade my current house and spend 1k more on my mortgage a month, I must now pull in 205k. Also it shows me if I can decrease monthly expenses, how that effects my overall position. Disclaimer: I did some rounding in my calculations. [link] [comments]  |
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