Financial Independence Daily FI discussion thread - June 16, 2019 |
- Daily FI discussion thread - June 16, 2019
- What's the smartest thing you did or learned on your FIRE journey?
- How has your dad shaped your FI journey?
- On the fence, can't decide whether to pull the trigger or not.
- Value time off now and delayed FIRE OR maximize salary to expedite FIRE?
- FIRE is probably not for me (and that’s OK)
- Help: Trying to get some direction
- What brokerage does the FIRE people typically use?
- FIRE path - 2 job offers - PNW vs MCOL
- Pay off loans or keep investing in 401k
- Help me FIRE!
- Opinion on new 401K funds/percentage options
- ETF adding to position question (begginer Fire)
- Financial independence and frugalism: an article
- New Boston Globe FIRE Article
- Thoughts on those that took a voluntary severance incentive
- Best way to make money if your parents are wealthy?
| Daily FI discussion thread - June 16, 2019 Posted: 16 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]  |
| What's the smartest thing you did or learned on your FIRE journey? Posted: 16 Jun 2019 06:29 AM PDT |
| How has your dad shaped your FI journey? Posted: 16 Jun 2019 11:39 AM PDT My dad was a bit of a spendthrift, but he was pretty helpful in showing me how the working world worked. [link] [comments]  |
| On the fence, can't decide whether to pull the trigger or not. Posted: 15 Jun 2019 03:46 PM PDT Very few people know about my financial situation and those that do just can't comprehend "retiring" at my age, so they aren't much help. Long time reader here, so thought I would try to get some input. About me : Early forties, single. Probably stay that way, but who knows. HCOL local, but bought in early and small Techie. Mega-Corp'ish. Base salary ~$160k, most years $200-$300k total. Investments : ~$2M total Taxable : $1,050k Cash : $200k (I know, I know...) 401k : $700k Roth : $50k Home Equity : ~$325k with $75k mortgage left at 2.625% Yearly Budget Currently : <$60k. I had planned for some time to get to $3M liquid then ride off into the sunset as I was fairly content at my job. Several years ago my group at work got re-org'ed and combined with another group. It quickly became apparent the new group leader didn't want to continue with our pasts market, yet it was bringing in the bulk of the revenue. Defections started quickly and I was thinking I was leaving. Got pulled aside by someone very high in the company and was asked to pull my team under him to continue the previously (highly profitable) charter. Took the chance. We effectively still worked within the same group, but our reporting structure basically gave us the power to continue what we were doing with much less interference and we grew the business over the years. I was kind of a defacto leader, but without the headaches, and I was fine with that. Fast-forward to within the past year. Another major re-org, most of the top folks who protected us either left, pushed-out, or moved aside at different times. My effective working group got combined with another group, with their leader the new big boss. Everyone to the top says we want to continue the business I'm working on and keep growing. Upper management asks me to re-join this group from a reporting stand-point and I agree. I expected to be put into some kind of leadership role formally and many in the group kept asking me if I would be the leader of our function. I just rolled with it... Finally get around to talking specifics of the org with the new leader, who had already surrounded himself with "his guys" on his staff. I was told that my new position would literally be at the bottom of the org, 2 rungs below where I was many years ago, and that all my reports would no longer be reporting to me. Literally, the only explanation given was "for better communication". Well I've never worked in an org with worse communication. My new manager literally can't look me in face and I rarely speak with anyone in power within this group. I know I could probably go above heads, but the best case scenario is reporting to the new big boss, who clearly doesn't want me there. So my salary is the same and I still have my equity, figured I would just grind it out for some time. Well, I just don't think I can any longer. I dread going to work and literally am not doing much work at all. My position, while valuable to this company, is very specialized. Getting a similar position elsewhere would mean moving half or full-ways across the country, and I don't really feel like moving to the bay area. Could maybe get a local job doing something different for lower salary. Will not be easy to rejoin this industry in any capacity after several years off. So financially I think I am good to go for "retiring". Should be at 3.5% withdrawal rate after adding in cost of ACA and taxes on investments. Mortgage would be paid off in a couple of years, so that helps. I will spend much of the cash down first. I don't want to count how many spreadsheets and sims I've made proving to myself this should work. I've already traveled extensively and would plan to do more, but at a much cheaper and slower pace. I have several hobbies that I would love to spend more time on. I have a good amount of business ideas I want to pursue, most with low capital requirements. I don't think I could stop working, just want to work on what I want at my own pace. I've successfully started a small-business in the past and worked for a small start-up previously. So it sounds all rosy, right? Well, here are my worries. I have a chronic auto-immune disorder that could disable me from working/travelling. Right now it is in check, but with >$100k medical spend/year covered by insurance. ACA should also, I hope. Long-term disability at work always helped the nerves with this. But I don't think this is a reason to stay or leave. I know the saying is "build the life you want, then save for it". Well, I don't exactly have the life I want in some ways. I'm drinking too much. I'm not exercising enough. My social circle isn't large and much of that is "work friends", but I've always been one to not need many friends and tend to keep to myself. Though I'm not an introvert and can strike up a conversation with nearly anyone. I keep thinking that a break from a job I loathe would give me a chance to correct these things. Get a gym membership, do all the other outdoor activities I enjoy. Try to cut back on drinking, if I can't then get help. Making new friends at my age likely won't be as easy, but getting out more to different activities gives me a chance. Hell, will probably update the online dating profile for the first time in a while. I want to be free to do whatever the hell I want to do. I'm just a little worried that this freedom will come at a cost. Sorry for the novel. Can't talk this over with many, so thought I would see what the internet says. [link] [comments]  |
| Value time off now and delayed FIRE OR maximize salary to expedite FIRE? Posted: 16 Jun 2019 09:38 AM PDT Hello all, I am a 26 year old single female living in a MCOL area in the US. I recently started my career and am currently making just over 100k per year. My net worth is approximately $33,000 at the moment. At my current position, I make ~$102,000. With my current savings rate, I plan on maxing my roth IRA, 403b and 457 this year. I get roughly 40 days off per year, which is almost unheard of here in the States. Here's the issue: Management has made it clear that we will not get yearly raises, even to offset COL increases and inflation. I know people with 8-10 years of experience are making $110,000. Thus, I don't expect to ever make over 115-120k per year if I stay. I am contemplating an additional year of training in order to increase my salary. Unfortunately, my pay during that year would decrease to 55-60k and I would have to move to a different state. Upon completion, I can expect to make 120-130k per year with a maximum potential salary of 180-200k depending on where I choose to live. Obviously this would help me reach FIRE more quickly, but I will likely never be offered even close to the amount of time off I have now. I also won't have the additional tax shelter of the 457 unless I work for a non-profit organization. So, should I value the time that I have off during the journey to FIRE (and the extra tax shelter of a 457) or do I take a pay cut for more training x 1 year, then expect to command a much higher salary? Your thoughts are much appreciated. Edit: My savings rate is around 75-80% as I am currently living with my parents. I plan on moving out within the next year after boosting my retirement and emergency funds. After I move out, I am hoping to maintain a 50% savings rate. Edit #2: I left out this important bit: my goal is to FIRE by age 50 with approximately $2.5 million (not likely at my current salary). [link] [comments]  |
| FIRE is probably not for me (and that’s OK) Posted: 16 Jun 2019 05:41 AM PDT I'd heard the term "FIRE" here and there over the years but didn't pay too much attention. It wasn't until last year that I discovered Mr Money Mustache and read through most of his blog that the idea made sense to me. I've been fascinated and inspired ever since. But I've also realized that I am almost certainly not going to FIRE - at least not early enough to write home about. We've always been frugal - I mean, we still own two cars and commute to work, so we're heathens in the eyes of some of the more extreme FIRE advocates - but we are careful about spending and it is rare that I ever spend money on something that I really feel was unnecessary. We spent $1k on a ten year anniversary trip last year, which was rather expensive by our standards - and that was even going with the mindset of "we're going to enjoy ourselves and not pay attention to how much we're spending". So while we could cut down to rice and beans and find creative ways to deprive ourselves, there is not much more we are willing/able to do to cut expenses. We're in a HCOL area with two kids. Things are going to cost money, and we are happy to keep living here due to proximity to family, jobs, etc. we're already in a lower cost area while still staying as close to those things as we can to minimize commutes. Traffic here is terrible but with daycare pickup and drop off, driving is a necessary evil most of the time. The other option is, of course, to increase income. I enjoy my job and have no desire to leave, but it has very little room for financial growth. So that's just not going to happen for me. My wife is also in a job she has no desire to leave - she does have some options for making more, but that's not going to happen for at least 4-5 years and involves getting a new degree. So while our income has a bit of upward room to grow, it is not going to be significant in the foreseeable future. We're on the younger side, but already past the age of many of the extreme success stories of those who retired early. Save for any windfalls, we're probably not going to catch up very quickly. It was also not until recently that we actively did much beyond "save" to prepare for the future. That changed this past year - while researching FIRE I became more financially literate than ever before. I actually understand what it means to prepare for retirement. I've started keeping track of finances, started an IRA, opened a HYSA, and put extra money towards our mortgage. We're already debt free aside from the house, so we're in a pretty good place. Despite still having tight financials, I've never felt in a better place or more prepared. And that is really what is important about FIRE. I feel like we are set up for success to one day be financially independent, even if that doesn't happen in our 30's or 40's. I am confident that we at some point will not have to let a need for money dictate any part of our lives. So even if FIRE seems logically out of your grasp, don't fret. There is so much to be learned and taken from this movement, no matter your situation or ultimate outcome. [link] [comments]  |
| Help: Trying to get some direction Posted: 16 Jun 2019 01:27 PM PDT I feel like Im in a great place financially: two earners, $181k combined income (just over $200k with a bonus) , no debt except for a car that we owe about $25k on at 0% interest. We sold our home last August and net $230k in equity after only investing about $40k into between down payment and improvements. We also have another $60k in savings. Suffice it to say, we've never had this kind of money before. We also have about $150k in retirement accounts and are in our late 30s. We moved due to kids schools and have been in an apartment while we figure out what to do. We are under contract for a $750k home and were planning to put our equity from our last home into this one. With PITI our payments would be a hair under $4300 per month. That's too expensive right? I believe we're backing out. We will lose our earnest money but I think looking back on it, this is the right decision. Question is, now what? I don't really want to retire early. I just want to be financially independent. I really like my work and would love to invest in private equity deals and travel/enjoy life. Not really sure how to do it all. Thanks in advance for any help you can provide. [link] [comments]  |
| What brokerage does the FIRE people typically use? Posted: 16 Jun 2019 03:19 PM PDT |
| FIRE path - 2 job offers - PNW vs MCOL Posted: 16 Jun 2019 11:27 AM PDT My Fiance and I are on the fence on which path forward to take. We are late 20's and love the outdoors which is weighing heavily on our mind in this decision. We have about 3 years before we want to start a family and move back to the MCOL area near family (Columbus, Indianapolis, Cincinnati, etc.) Our current financial situation is as follows: 401k's: $209,000 Brokerage:$56,000 IRA's: $53,000 HSA's:$28,300 Cash:$62,000 Current job: $85K salary, 5% bonus, MCOL Job offer A: $95K salary, 5% bonus, $15K sign on bonus - current company, promotion to different business unit, relocate us to the PNW, we can go hiking, camping, and skiing every weekend. Job offer B: $120K salary, 15% bonus - large aerospace company, MCOL area, near family and friends. Both positions are interesting to me and should provide good experience. I view the positions as inter changeable. The reason we cannot come to a conclusion is we have always wanted to move to the PNW and live out west and enjoy all that it has to offer. We do eventually want to settle down in the MCOL area, it is just killing us to turn down this opportunity to enjoy living out west prior to starting a family, as I do not see us moving out there after having kids until we are FIRE, which we would then travel out west heavily especially during the summers. We have extremely high confidence my Fiance will be able to maintain her ~ $70K income in either city as she works remote. Annual savings projection for PNW is ~$70K / YR. Annual savings projection for MCOL with new job is ~$120K / YR. Target FIRE goal = $2.5MM We are torn on which path to take, any feedback is appreciated! [link] [comments]  |
| Pay off loans or keep investing in 401k Posted: 16 Jun 2019 12:51 PM PDT 30(f) living in LA with family making 70k a year ( company match is 100% of 6%) 12k in 401k 1k in Roth IRA 14k student debt at 3.6% interest ( $600-$1000 monthly payments) What should I do? Pay off my student loans as soon as possible or keep putting 30% of my salary to 401k? I take home about $2,830 after tax, about $900 of that goes to paying for grad school. [link] [comments]  |
| Posted: 16 Jun 2019 11:32 AM PDT Hello I'm 44(f) and on my way to FI. I work for the government in a niche industry with an income of ~$140k, ~$400k in retirement, ~$400k equity in my DC area home, getting some modest rental income from my house in my hometown (but only have about $60k in equity in this house), no debt other than housing and I'm a moderately conservative investor. My issue is living in the DC area because it's so expensive and I'll hit a pay cap when I'm eligible for my next promotion in four years (in the meantime, I'll only get 1-2% cost of living increases). I've been thinking of moving back to my hometown where cost of living is easy 25% less. My hesitation is the gov benefits so I'd be walking away from decent insurance and a pension - which is free money in exchange for 30 years of servitude (probably around $4k a month pretax if I stay 30 years but maybe $2k pretax if I left now but I can't access it until 62). I'm only 15 years in (with 15 to go) and given the salary cap, my ability to save will shrink as the cost of living increases but my income stays steady. I'd definitely take a big pay cut (and have to probably switch industries) if I moved (but hey less stress) but I'm struggling to determine if stay or go is better for FI/early retirement. 60 does not seem like early retirement! Anyone have experience walking away from a pension and/or a significant salary to move somewhere cheaper? If it helps to understand, I'm the first in my family to make this kinda money so I'm having trouble mentally preparing for a smaller income even if it means a better life balance. Last note, its just me as I have no kids/spouse and I'd love to retire in 5-7 years but I'd still work part time just to keep myself busy. [link] [comments]  |
| Opinion on new 401K funds/percentage options Posted: 16 Jun 2019 12:14 PM PDT Hey all, I've recently started a new job and I wanted to see which funds you would advise based on the below funds and my inclination for lower ER funds. I'm currently 29 years old and have a high risk tolerance. I was looking at doing Legal & General S&P 500 Ret Acct, SSgA S&P Mid Cap Index Ret Acct and SSgA International Index Ret Acct but don't know what percentages I should allocate to each. I will be maxing this out for the year and would love your feedback. Thanks in advance! Interm./Long-Term Bonds Bird Aggregate Bond Ret Acct 0.30% SSgA U.S. Bond Index Ret Acct 0.04% Large-Cap Stocks Legal & General S&P 500 Ret Acct 0.01% Small/Mid-Cap Stocks SSgA S&P Mid Cap Index Ret Acct 0.03% DFA US Small Cap Value Ret Acct 0.52% SSgA Russell Small Cap Index Ret Acct 0.04% Janus Triton Ret Acct 0.66% Fidelity Real Estate Index Ret Acct 0.07% International Stocks American Funds New Prespective Ret Acct 0.45% Invesco International Growth Ret Acct 0.65% SSgA International Index Ret Acct 0.05% SSgA Emerging Markets Index Ret Acct 0.10% Oakmark International Ret Acct 0.75% Multi-Asset/Other [link] [comments]  |
| ETF adding to position question (begginer Fire) Posted: 16 Jun 2019 05:17 AM PDT Greetings everyone sorry if my question sounds stupid. I just started last month 28years old south korean investing in VTI from south korea. I am planning to keep accumulating them untill 80 or 90% of my assets become VTI only My question is lets say i have 1k to invest every month. My plan is to add to my vti position every month. 1) last month my average was 143. Now i have my 1k to invest again should i still buy even though the price is now 147? 2) should i hold on to my 1k untill next month until it drops a bit and then buy with 2k(2month worth of investment cash)? Please pick one and tell me your reasons if any!! Thank you very much for reading and hope you have wonderful day My plan to achieve fi in 10 years or less hopefully with 1.5m in account Is this the most efficient way or is there another suggestion? Thanks [link] [comments]  |
| Financial independence and frugalism: an article Posted: 16 Jun 2019 07:53 AM PDT |
| Posted: 15 Jun 2019 09:16 PM PDT This introductory article profiles local FIRE bloggers Saving Sherpa and the Frugalwoods: https://www.bostonglobe.com/magazine/2019/06/14/meet-extreme-savers-mission-retire-early/QnsLbcFL78vXlZMPua7LfO/story.html?p1=HP_Feed_ContentQuery [link] [comments]  |
| Thoughts on those that took a voluntary severance incentive Posted: 16 Jun 2019 05:54 AM PDT So I have worked at mega tech companies. I have witnessed my fair share of lay offs (work force reductions) and voluntary severance incentives (VSI). I want to talk about VSIs and how much they contributed to you retirement goals. I have seen many VSI ranging from a week of pay for every year you have worked to one and a half year's of salary rolled tax free directly into your 401k. I have even seen company health care offered to employees under 65 (but that was during a 1990s VSI). I haven't been lucky to get a VSI offer: 1. Not enough years worked. 2. Not selected for VSI -> was a very high level technical fellow or exec. 3. Left the company or company imploded. I just got back from a reunion with a bunch of people that took VSI at one company I worked for for 21 years, but I was never offered. Rather I left and took higher salaries, signing bonuses, or better stock offers. I know a shit-ton of people staying on in a current job just to get their VSI package and then retire.. Is this a good strategy to maximizing wealth for a FIRE? It seems dodgy and iffy and no-sure-thing. It seems like a corporate strategy to keep beaten and disgruntled workers around for a few more years. [link] [comments]  |
| Best way to make money if your parents are wealthy? Posted: 16 Jun 2019 06:47 AM PDT My parents are business people, my mother owns a lending company, owns shares in hospitals, we have real estate, a resort, 2 and soon to be 4 7-eleven stores (shared with other owners. Im 21, my mother is telling me to think of a business already and she will give it to me. What is the best thing to do? Right now i am thinking only franchising as those are low risks for me. But you tell me thank you [link] [comments]  |
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