Financial Independence Daily FI discussion thread - June 15, 2019 |
- Daily FI discussion thread - June 15, 2019
- The 4% rule, and the money you leave behind
- Grass is Greener Syndrome: discontented, disgruntled, demotivated
- Starting too late?
- How would you like to spend 30-60 years of retirement?
- Entering the salaried professional world for the first time
- FIREd, Sold House, Moved into Tour Bus - AMA
- How do you guys deal with people who discourage you and claim financial independence is a fantasy?
- Buying a second car that handles well in snow storms...advice on type and price range?
- Boston Mustachian / Fire meetup?
- Baby steps
- Can anyone offer any guidance or changes I need to make to get to my goal of ~$5M by 45?
- How do you deal with unexpected setbacks
- How am I doing so far and what would you do in my shoes (26 y/o + just hit ~100k portfolio + 60k/year salary)
- help investing an inheritance
- FIRE with children, how do you manage?
- Thoughts on charity?
- Pay capital gains now or later?
- Help this 22 year old understand purpose, wealth, and FI
- Rainy day calculation for RE investor on path to FI
- For those who have FIREd....
| Daily FI discussion thread - June 15, 2019 Posted: 15 Jun 2019 01:11 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]  |
| The 4% rule, and the money you leave behind Posted: 14 Jun 2019 09:42 PM PDT A few years back my mother fell down the stairs and broke her hip and had to move into a one level house. She didn't have the money and when I asked my four siblings to pitch in to help her, they all said they couldn't, so I bought my mom a place to live in. I make less than most of my siblings, but I've always been a saver, and I was happy to be able to help. She lived there about five years, and she died two months ago. When she died, her small estate was divided up five ways among us siblings, and I realized that by saving my mom rent money for five years, I was actually writing my brothers and sisters a check. This situation was completely my fault. I was happy to help my mother, but I should have had more forethought about how that all went down. But what happened with my mother got me thinking about what will happen with the money I leave to my own kids. I'm on the Trinity Study 4% bandwagon with my FI plan, with the intention of leaving a chunk of money to my three kids when I die. I am divorced, and my ex has a base salary that's the same as mine, but saves nothing for retirement and like my brothers and sisters, never has any money at the end of the month because of a house twice as large as mine, new car, etc. Like my brothers and sisters, my ex has never been a saver. If I die before my ex and leave this chunk of money to my kids, I think they are likely to use it to help my ex with retirement. Just as it seemed unfair for my siblings to get an equal share of my mother's modest estate when they weren't financially responsible enough to be in a position to help her, it seems unfair that the money I have saved may end up helping my spend thrift ex. I am not sure what advice you on this forum can give me, but I wanted to make the observation that if you scrimp and save and leave a chunk of money behind, it may very well go to someone much less frugal than you are who may blow on all the stupid shit you resisted buying along the way. And that kinda sucks. EDIT: Many other people suggested that I wanted to help my own mom, and I raised my kids to want to help their own parents which is a good thing. My ex is being irresponsible by spending too much not saving any money, and my children will bear the burden of it when they have to take care of her. Without any money from me, helping my ex would be a much greater burden on them, so leaving them money makes good sense, even if they use it to help my ex. [link] [comments]  |
| Grass is Greener Syndrome: discontented, disgruntled, demotivated Posted: 15 Jun 2019 06:46 AM PDT I have been wanting to post this here but been afraid to because of how entitled and out of touch i might sound with the realities of most people from my own home country. This is why i am posting from a newly established account because i am afraid of being identified, especially as some of my colleagues are on reddit as well. I earn 104k annually, which might sound like a lot, but this is in Malaysian Ringgit (MYR), not USD. Chiefly disgruntled because when you compare salaries dollar by dollar, this equates to just under usd 25k. Now, in Malaysia this is a comfortable salary compared to the minimum wage which is the equivalent of usd 3,167 (myr 13,200) annually, or the average fresh graduate salary of usd 7,198 (myr 30k) annually. What makes things worse is that the cost of living here is much higher than that in the states or canada, at least 4 times more due to the weak currency exchange where it comes to food, cars and housing. To put the circumstances into perspective, i am in my early 30s, a phd holder and am a fully tenured academic in a top public university with a pension. I am happy in my career, as it is deeply satisfying working with students and patients. I love research which is a huge part of the job, and the full job autonomy typical of academic positions. I really enjoy doing pro bono clinic work and volunteering, which unfortunately is not financially lucrative. No other side or rental income. Goal here is financial independence, but i don't plan to retire until 60, the maximum age of employment in this country barring any serious health issues, or longer if possible. I can't leave for a better paying job abroad because of my spouse and family members. And frankly, i probably do not want to because it took me years to establish myself to this point, my level of comfort and perhaps sheer laziness here. No debts, car paid off, paying off a myr800k home jointly owned with my spouse and trying to save as much as i can. Generally my savings average 40-45% of my take home most months, and i truly admire and am envious of those who manage to hit 70%. Also insanely jealous and frustrated thinking of how academics abroad (even in neighbouring Singapore) have that much greater purchasing power due to the strength of their currency alone. And no disrespect to clerks or plumbers, but with the kind of salary i am paid i might as well have decided to become a clerk or plumber in the states or canada and made better money. I guess the upsetting thing here is imagining it would be so much easier to save a higher percentage if only the cost of living was not as high, or that salaries were more commensurate. My apologies if i come across as a disgustingly ungrateful individual here. Outside perspective needed to remind myself not to let that discontent get the better of me and to stop the pity party which has been going on for the past couple of years now. Many thanks in advance for all feedback offered. [link] [comments]  |
| Posted: 15 Jun 2019 11:15 AM PDT We have made a lot of financial mistakes in the past, but I have us on the right track now. My husband and I are in our 40's. He has no savings; I have about $80,000 in my 401k. Is FIRE at all attainable when we have 2 kids (one heading to college which we will help with and on starting high school) and make around $100,000 between the 2 of us? All the other posts seem to be from people much younger than us. I am 41 and he is 46 and it seems like this is the retirement age goal for most people on here. [link] [comments]  |
| How would you like to spend 30-60 years of retirement? Posted: 14 Jun 2019 06:20 PM PDT I'm sure everyone has things that you enjoy doing that don't make you money though I'd say one biggest thing I'd really love is being totally free from schedules. Sleep when I feel like it, eat when I feel like it, do things when I feel like it, live as if time just isn't a thing since I have little if any time-based commitments. Waking up or going to bed at any specific time whether it's 5:30am or 5:30pm is something I really have to force myself to do and feels incredibly unnatural for me. My body doesn't even seem to want to get the same amount of sleep everyday, sometimes I'll go to bed immediately after work to wake up right before and other times I sleep for 4 hours. [link] [comments]  |
| Entering the salaried professional world for the first time Posted: 15 Jun 2019 02:39 PM PDT For background, I am a recent college graduate that will be moving to an HCOL area at the end of July. I will be receiving $80,000 salary with a $5,000 signing bonus. I currently have $3,000 saved and trying to save up more to carry me through to my first pay periods. My main questions are, what should my first financial moves be? More specifically, I plan on starting an emergency fund in a HYSA, and taking full advantage of my employer's retirement program. However, are there other options I should be considering with my signing bonus? I'm considering prepaying rent. Any specific advice would be greatly appreciated. Thank you! [link] [comments]  |
| FIREd, Sold House, Moved into Tour Bus - AMA Posted: 14 Jun 2019 11:12 PM PDT Background: FIREd early moved to Maui. We lived across the street from the beach. We loved island life but all of our friends were 20+ to 40+ years older than us. The reality of living the retired lifestyle is people that can go to the beach/bike everyday at 11am are 55+ and retired. We decided to take a break from island life and sold our Maui house (mistake) and bought a tour bus to cruise around the USA. Since we have left Maui my two best friends I hung out with everyday have died. One died of lung cancer 2 years ago and my other friend died while cycling from a cardiac event 3 months ago. One big downside of having most of your friends much older than you is funerals. The decision to move into a tour bus has had both positive and negative financial implications. One positive is we own land in a high-cost living area, where houses start at $1M - $3M. We pay property taxes of $700/year for our land and our electricity and water are $150/month when we are not traveling. When people hear we live in a bus, they usually think of a school bus. There is a weird world of luxury tour busses that cost between $300k - $2.5M. We have two bathrooms, king size bed, dishwasher, washing machine / dryer, gym (treadmill / stepping machine, weight bench, bicycle trainer, yoga mats). It's basically a small condo on wheels. Pictures for context: Bus: https://i.ibb.co/JBC9NT6/IMG-0640.jpg Kitchen: https://i.ibb.co/RDTbz8P/kitchen.jpg Bed: https://i.ibb.co/M2fNbCR/Bed.jpg Bedroom: https://i.ibb.co/j6Grjvd/Bedroom.jpg Shower: https://i.ibb.co/B6p3tSv/shower.jpg Ask me anything... [link] [comments]  |
| How do you guys deal with people who discourage you and claim financial independence is a fantasy? Posted: 15 Jun 2019 03:44 PM PDT I'm currently in a lot of debt and executing a plan to pay it off and begin my path to financial independence. The problem is everyone around me (friends and family) keeps discouraging me claiming it's a fantasy. It's discouraging and sometimes I Second guess myself. [link] [comments]  |
| Buying a second car that handles well in snow storms...advice on type and price range? Posted: 15 Jun 2019 03:26 PM PDT SO and I are moving to a pretty rural area far north where annual snowfall averages 107 inches. We currently have a little Nissan Sentra we payed for in cash that we will keep for his commute, but we need another car for mine. I have never driven in snow and was told an AWD small SUV would be the best choice. I also liked the idea of outfitting the back of the SUV with a bed so we could hike/camp for cheap in the Adirondacks & Canada. However, we move to a new city for job opportunities often, every 2 years or so. I am concerned about owning an SUV with crappy MPG for several years to accommodate a temporary situation. I'd love advice on cars/SUV's that handle well in snow and also what price range I should look at. We well be making about 120k once we get there, but we currently only have about 11k saved in cash. I am posting here because I want a car that is going to support our FIRE goal (value, MPG, etc.), neither of us cares about cars otherwise. Thanks! [link] [comments]  |
| Boston Mustachian / Fire meetup? Posted: 15 Jun 2019 02:55 PM PDT Hi, I'm moving to Boston and am looking for a MMM / Fire meetup. I've googled and can't find one. Is there a MMM / Fire group in Boston? Thanks, Stefan [link] [comments]  |
| Posted: 15 Jun 2019 02:45 PM PDT I lurk on this thread, never really thinking I'll be in a position to have any sort of FIRE success. But yesterday I had an offer accepted on a flat, and thanks to the relatively low cost of living where I am I will be able to have a fairly short term mortgage and hopefully be mortgage free by 50. Which means I might - imagine! - be able to retire early! I never even considered that I might be so fortunate. I've worked hard to even get this far (I'm on a carer's salary and love my job, but always figured FIRE was never going to be an option) and I'm just feeling better about my financial future than I have in a while, even as I'm about to sign myself up for more debt than I've ever had! Comparatively speaking I don't really belong in this sub, but I just wanted to share. [link] [comments]  |
| Can anyone offer any guidance or changes I need to make to get to my goal of ~$5M by 45? Posted: 15 Jun 2019 01:33 PM PDT Hi All - First time poster on here. I am new to the FIRE movement and am just starting to take it seriously by getting a plan together. I wanted to get this subs input. I feel SO far behind looking at other people on this sub. Any feedback is greatly appreciated. Thanks! Age / Industry / Location
General goals My goal is to semi-retire/fully retire by the age of 45. Similiar to probably most people on here, the freedom to pick up a couple hobbies or start a business while not having to worry about the rat race. Target FIRE Age / Amount / Withdrawal Rate / Location
Educational background and plans
Career situation and plans
Current and future income breakdown, including one-time events
Budget breakdown
Asset breakdown, including home, cars, etc.
No Cars. Debt breakdown
Health concerns
Family: current situation / future plans / special needs / elderly parents
Questions? So my main questions are:
Thanks in advance for any help. [link] [comments]  |
| How do you deal with unexpected setbacks Posted: 15 Jun 2019 12:39 PM PDT I'm a 23 year old who has hopes and dreams of achieving FI by my early to mid-forties. I don't make the most money ($63k) but I am smart with my money and have a decent savings rate (50%). I was involved in a car accident earlier this week where the other party was at fault, but due to a lack of video evidence and a police report simply states both parties stories, I am expecting both parties to be at fault. They merged into my lane (passing lane) into my car when I was in their blind spot. As for the financial impact of the accident: I'm looking at at $500 deductible and potentially a $700 per year increase to my car insurance premium for several years in addition to a $2kish decrease in the value of my car. So overall, I expect this accident to have a $5k total impact over the next few years if my insurance company can't find the other party completely at fault. Going forward I have a dash cam installed so I don't have to deal with these situations in the future. Given my frugal path to FI (compared to a higher income path), I have been depressed and stressed out over the accident. I am grateful that I am not injured aside from a sore neck but the potential financial impact has been eating away at me. Any wiser/more experienced FI'ers have any tips for me to get over this rut? [link] [comments]  |
| Posted: 15 Jun 2019 03:18 PM PDT Again - like most prefaces to posts - I have to begin by saying I don't clear six figures/year (as a fair number of my peers in tech/finance do) but I do have a decent amount of savings (7k in savings + 2k checking + ~100k portfolio [20 of it in cash]). I was fortunate enough to have a middle class upbringing with parents (combined ~150k/year as of 2008) who were obsessed with the idea that they were wrong about the stock market (when they were my age up to about 2007 they believed in fallacies such as: the stock market is for much smarter people and therefore 401k max is all they need to care about when it comes to anything market-related affecting their savings/retirement income. I understand this isn't relatively bad at all compared to other parents out there, but we do know there're superior options for the end goal of reaching FIRE). I therefore have been following the markets (base level - stick to one industry + learn large players/ecosystem of that industry + news surrounding only the biggest players in that particular industry) since the age of 16 (~2008) and was fortunate enough to have saved most of my post-tax income since then + invested it + rode the bull market to the level it/my portfolio is at today. I was hoping to get your guys' opinions on a decent allocation of my 100k portfolio. Should I open and max ROTH IRA contributions? My 401k is being maxed out and has been since 2014. I know of one select industry in the market but have little to no knowledge of anything else really. Have been just chugging along and know that there're much smarter people out there who could help me hopefully continue this decent upward trend so that I can land comfortably at a 4% withdrawal rate (~50-60k/year) upon retirement age. Thank you all for your comments and time. Have been lurking thus far and wished to get this community's thoughts on my situation and questions. Look forward to your answers. [link] [comments]  |
| Posted: 15 Jun 2019 09:46 AM PDT I posted my situation in /r/pf, but I wanted to get /r/FIRE's perspective as well. Long story short, I've inherited about $850k in cash and retirement accounts after the death of a close family member. I don't have much experience investing and I was hoping to get some pointers on investing strategies. About me:
The funds are currently located in the following account types:
Given my limited experience investing, I wanted my portfolio to mimic VFIFX (Vanguard target retirement 2050), at least until I learned enough to craft my own portfolio:
Using ETFs will save me about 0.10% in expense ratios compared to just buying VFIFX. I won't be reinvesting dividends automatically; rather I will use the dividends to buy assets that get me closer to the current VFIFX holdings. Past that, I will rebalance annually if my holdings are more than 5% away from VFIFX. I was reading about tax-efficient investing, and realized that I might reduce my taxes by putting my bonds in the inherited tIRA. If I did that, then my accounts will look something like this:
Assuming I am in the 24% tax bracket, I estimate that this will reduce the taxes I pay on dividends by about $134/year (from $1681 to $1547). This savings represents a mere 0.02% of the $670k I'd have invested. I'm not going to turn away free money, but I have concerns about the different risk profiles and growth rates of my inherited tIRA and brokerage accounts. The accounts will react differently during a boom or a bust, so they will grow at different rates. Historically, this means that the stock-heavy brokerage account will grow in value faster than the more conservative inherited tIRA. As I rebalance my accounts to maintain a 90S/10B ratio, the inherited tIRA account will become more and more conservative over time. This could result in a scenario where the bulk of my growth is happening in a taxable account, which seems like a bad idea. Additionally, I cannot contribute to my inherited tIRA and I have to take RMDs. I'm not sure how this effects the analysis. Do I want my inherited tIRA to be 90S/10Bs, so that it might grow faster than the RMDs deplete it? Or do I want the inherited tIRA to be 75S/25B to reduce my brokerage's tax bill? Should I worry about having different risk profiles and growth rates across the different accounts? I'd appreciate any advice you guys can give me. [link] [comments]  |
| FIRE with children, how do you manage? Posted: 15 Jun 2019 04:05 AM PDT How do you manage do fire with children? If so do you have any advice? [link] [comments]  |
| Posted: 15 Jun 2019 02:31 AM PDT I guess this is directed at pre-FIRE'ers vs. the FIRE'd, but what's everyone's thoughts on mid-FIRE charity? I feel like I'm in a place where I want to donate some money to organizations that I find valuable but I'm also conflicted because I'm playing catch up, having only just started @ 30 y/o. I'm not looking to "make it rain," but I don't really feel like I'm doing my part, having lived a very selfish life. Was it necessary, mostly, but I'd like to do more regardless. Me: late-30s, DINK, home owner, debt free (sans mortgage), NW @ ~$250k. Blue collar job making >$200k but only temporarily as I'm doing the work of 2 at the moment and getting paid for it. Ongoing income in the lower 6-figures. Maxing out 401k, HSA, Roth (backdoor), and beginning to build my taxable portfolio this year. [link] [comments]  |
| Pay capital gains now or later? Posted: 15 Jun 2019 05:57 AM PDT I was thinking about if it would be better to pay capital gains now on index funds or wait until later when I'm using it as income in retirement. Im thinking I would end up with more money after paying tax at retirement age rather than paying capital gains along the way. I guess my reasoning is that even though you would get taxed more when you sell in retirement, your money would grow faster along the way since the money that you would have paid in taxes is also making more money. Does this make sense? What do you guys think? [link] [comments]  |
| Help this 22 year old understand purpose, wealth, and FI Posted: 15 Jun 2019 06:54 AM PDT I'll keep it short as possible. Just graduated college with a finance degree. Did internships and found out that I honestly kind of hate the "business" world of jobs, even though my degree is in it. I struggle to find purpose or pride or fulfillment in them, though they pay well. Currently have no job commitment and no debt. Lots of job options available for me. Truthfully, I am just so so confused on what the heck I'm supposed to be pursuing. I feel like I've broken it down into 3 things. A. There's a side of me that just wants to go pursue money and try my best to get rich (no guarantee this would even happen), have FI and enjoy a wealthy life, be able to live wherever I want with multiple homes, be able to pay for expensive vacations, etc etc. I'm sure everyone wants this kind of thing on some level. B. Another side of me just wants this thing FI, meaning not having to work. As some people describe it, the "removal of the shackles." I see this as a little different from A because it's more of a security thing. Example: Working stresses me out? Something has come up and I need to take care of a family member? I need to catch up on sleep? No problem! I'm FI. Hopefully this is making sense. C. Lastly there is fulfillment, purpose, pride. At one of the internships, I made a lot of money (for an intern and for a 21 year old) but my soul was being crushed. There's something about working for a corporation that just seems so soul crushing to me. Now, I'm on the edge of joining the USAF (commissioning via OTS). Why? Because it's something I want to be a part of, despite the money. If not the USAF, maybe the FBI or the CIA. Because I am predicting I would find purpose in that work. My criteria for judging the fulfillment of something is asking myself "In 10 years from now, will I be glad I did this and be proud of it?" If I go into a corporate business job, the answer to that is going to be no, because I would have done it just for money and for having the ability to just quit whenever I want. But the air force? Yes, because it was something I wanted to do at least at the time and would be proud of; I'd be so proud to tell people that I did it. Note that none of these things would be a complete foregoing of income, I just might not ever make six figures or more. The obvious potential issue here is the opportunity cost because my official FIRE date could pushed way back. I get this general "it's a balance" answer from a lot of people. Which I understand, trust me. Whether it be a corporate job or the air force or whatever, I know you need at least some fulfillment and some money. I know there's a lot of people on here who are either retired or near retirement, so I wanted to get your input and advice for me. Feel kinda lost with it all! Should I try to get rich, focus on not having to work anymore, fulfillment, or somehow try to do all of this? Note to mods: in my mind this question is still very much about FI among other money topics, just in a more abstract form. /r/personalfinance got upset with me for asking this question on their sub! :) [link] [comments]  |
| Rainy day calculation for RE investor on path to FI Posted: 15 Jun 2019 03:01 AM PDT I wanted to see what others do to calculate what they hold for liquid reserves to prepare for a rainy day or recession. Conventional wisdom indicates you would want enough cash to cover 6 months of expenses and this is what I have kept historically. Because I am a RE investor, as my portfolio has grown (currently 11 SFR) it is no longer ideal to keep enough cash on hand to cover both my personal expenses and the fixed cost of the RE (expense that I am liable for if the units are occupied or not). What I have done is to model a scenario where my wife and I both lose our jobs (no W2 income), the value and dividend payout of our after tax equity portfolio falls by 50% (I count this 50% after tax equity liquidity as part of my rainy day fund as it is not my primary source of FI investment) and our rental units are 50% occupied. I do not make an assumption of large unforecasted expenses but also do not factor in any upside; ability to find non-ideal work in the short term, cut back on expenses (like daycare), unemployment income or severance. This methodology seems logical to me but wanted to put it out to the community to get a 3rd part perspective especially as (and I am not trying to make a prediction or time the market) the US economy has been so strong for so long which cannot last forever. [link] [comments]  |
| Posted: 14 Jun 2019 09:36 PM PDT ...and all your money is in investments, stocks, etc (not real estate, etc)... ..do you really just have your money in an index fund? Just one index fund or a variety with different levels of risk? For those with a balance of many index funds, what does your balance look like? Do you adjust your mix based in your age or other factors the way you might in a more traditional retirement savings plan? Does it take an awful lot of faith to do this? Feels like it to me! [link] [comments]  |
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