Financial Independence Daily FI discussion thread - June 29, 2019 |
- Daily FI discussion thread - June 29, 2019
- What job do you want to have when you reach FI?
- Million dollar net worth, but wrong asset allocations probably means I cannot be FI in a long time
- A proposed formula to figure out your FIRE numbers
- Retirement fund costs. What should I do?
- A lateral move on the path to FI
- Fire signal?
- Quitting my job cost me, but an FI mindset made it easier
- My plan to CoastFIRE & change the direction of my life at 40
- Why so much talk about RE when this sub is about FI?
- Anybody on here aiming for FIRE w/ salary under 50k, what has your experience been like?
- Incredibly frustrating. I could fire now - if I was allowed
- Fired outside US. why not india?
| Daily FI discussion thread - June 29, 2019 Posted: 29 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 job do you want to have when you reach FI? Posted: 29 Jun 2019 10:25 AM PDT I am thinking either a PhD in AI or indie game developer. What kind if job would you take when you dont need the money and can just work for fun? [link] [comments]  | ||
| Million dollar net worth, but wrong asset allocations probably means I cannot be FI in a long time Posted: 28 Jun 2019 04:26 PM PDT So I recently hit a million dollars net worth which I got excited about at first, but then realized that the way I allocated my assets makes it challenging to FIRE. My allocations looks something like.... 200k - 401k 200k - index funds, reit's, stocks, bonds 600k - paid-off house The last one is key. I spent a lot of my money trying to pay off the house early, which I did. However, looking at the above, 20% of my money is capable of truly generating passive income . The 401k, I can't exactly extract money out of there to pay for my living and i am in my 30's so I have a ways to go to pull from it. The house is paid off which does reduce my monthly expenses BUT overall it isn't enough for me to live passively. I could 'sell' the house, but then i have to buy in the same market which puts me in a bad spot. That leaves the stocks/funds etc that can 'generate' passive income but obviously the amount is just not enough to live on. Am I looking at this wrong ? Would it be possible to FIRE with what I have above? The amount of money makes me feel like I should, but I don't feel like it is possible when I crunch the numbers. [link] [comments]  | ||
| A proposed formula to figure out your FIRE numbers Posted: 28 Jun 2019 06:52 PM PDT While procrastinating, I derived my own FIRE formulas which I'd like to share with everyone. These formulas can be plugged into any cas calculator, or failing that geogebra.com with rounding settings on no decimals. First formula is how much you need to save. Play around with each of the variables to see what happens, it's interesting! Second formula assumes a steadily increasing income every year, and seeks to find out the amount of savings you need every year to reach your targeted goal. example from geogebra: https://imgur.com/a/s465BjI For those who also wish to procrastinate, you're welcome to double check my deriving process: https://imgur.com/a/iLeTmqF edit: to help everyone out who are struggling with this formula, I've screenshot 6 scenarios for comparison. retiring in 10 years, with good investment returns and low inflation: https://imgur.com/a/J4WUB7N. Needing $1.1M retiring in 10 years with poor investment returns and higher inflation: https://imgur.com/a/DDHpwIL. Needing $2.17M retiring in 30 years with good investment returns and low inflation: https://imgur.com/a/2CPdnOW. Needing $1.63M retiring in 30 years with poor investment returns and higher inflation: https://imgur.com/a/dG4dn1b. Needing $3.92M retiring in 10 years, living comfortably with equivalent current expenditure 100k/year with good investment returns and low inflation: https://imgur.com/a/Kp5RWlr. Needing $1.83M. retiring in 30 years, living comfortably with equivalent current expenditure 100k/year with good investment returns and low inflation: https://imgur.com/a/Z1L6izq. Needing $2.7M [link] [comments]  | ||
| Retirement fund costs. What should I do? Posted: 29 Jun 2019 03:48 PM PDT
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| A lateral move on the path to FI Posted: 29 Jun 2019 02:43 PM PDT Just a few days ago, I got my acceptance to an online M.S. program. The Masters in question has a focus on education, business, and administration, though especially on education. It's that focus that made me choose this Masters over something like an MBA or MHA, though being able to learn admin and business skills helps me feel like I can leverage even more out of it. I have a well-paid full time job with benefits in healthcare, so this move doesn't necessarily help me achieve FI faster, and might even move it back since I don't see myself directly making more money from it. But I think this is a move on the 'build the life you want, then save for it'. And being on the FIRE path made it a pretty low stress decision. I'm 32 years old and make about 90k a year gross, but have intentionally kept my spending to about 1600-1800 a month. I saved a bit of an overstuffed E fund at 20k, then have put everything into maxing out my 403b, a roth IRA, and the rest into a taxable brokerage since I don't have access to an HSA. My Masters is going to be 2 years and 45 units, but my workplace provides 8 units a calendar year of tuition assistance, and I'll be getting another 6 from the program directly (this is all if I never get lower than a B, which I am confident I can do). Between the 30 units I'll be able to get for free, that leaves 15 to pay for myself over those two years. Because I have some extra liquid money put aside and I kept my lifestyle at the level I had it when I was making much less, I'll be able to pay for the program in cash and still be able to max out all my retirement buckets, plus a little extra for the taxable account. I may hold off on that and put the extra in savings while in the program just for peace of mind. There is a cost in time, but I'm actually looking forward to the studying so I don't consider it a a large one. My biggest takeaway is the kind of freedom that these habits can give, even when you're not fully FI. This started when some of my old instructors got in contact with me to tell me about the program and also expressed interest in my joining them at some point in the near future to teach myself, which sounds like an ideal post-FI challenge. I didn't have to think a moment on 'how would I possibly be able to afford this? What loans will I have to take out?' It was only 'am I ready to do this?', and then do it right away when I made my decision. You don't have to wait till you FIRE for the payoff of your choices to start having an effect. As another takeaway, look at your benefits. Go through them with a fine-tooth comb! Download any employee brochure, the retirement benefits through your provider, everything. It was through asking around that I found out about the tuition reimbursement, an annual textbook allowance, the ability to open a self-directed brokerage (and escape the investment choices the plan comes with if I want) even a potential additional 403b employer match I'm planning to see if I can qualify for. There may be all kinds of gems that are buried just under the surface, and considering way too many people don't even take advantage of their employer match it isn't impossible there are other benefits that your coworkers just aren't talking about. [link] [comments]  | ||
| Posted: 29 Jun 2019 01:54 PM PDT Many people on the sub have mentioned the Sunday p.m. dread. I'm feeling it more and more. I get so excited around Friday afternoon. Then, I get depressed Sunday afternoon. So, this must be a signal for me to fire. I think I have the stash to do so. Just need the courage to pull the trigger. [link] [comments]  | ||
| Quitting my job cost me, but an FI mindset made it easier Posted: 29 Jun 2019 11:00 AM PDT Hello! Long-time lurker, but made a new account to start posting. I recently quit my first job out of college after working for less than a year. This made me realize that there are so many costs in quitting. Some of these costs include:
No wonder people stay in jobs that aren't the best for them. I did some quick math before pulling the "quit" trigger to find that I would take a hit of several thousand myself. For those who aren't in the FI mindset, I'm sure this hit would be difficult to swallow. But compare that fiscal cost to some of these reasons I decided to leave:
I could not have done this with confidence had I not been thinking in an FI way. Here are the tools that I had by just being on the FI path for less than a year:
Quitting my job is definitely not an FI milestone. I hope this post can be a reminder to live your best FI life, even now. The benefits of FI don't all magically happen at your FI number or at any other arbitrary point in your life. FI is more like learning how to be happy instead of deferring happiness until FI. [link] [comments]  | ||
| My plan to CoastFIRE & change the direction of my life at 40 Posted: 29 Jun 2019 01:20 PM PDT What CoastFIRE means to me: I want to change careers around age 40, to do something more meaningful, work fewer hours, and/or take longer periods of time off. I'll stop saving for retirement. By age 50, I'd like to be "Semi-FIREd" (or "partially retired"), and take in 25-75% of my cost of living from investments, and make the rest up through passive income and/or meaningful work. By age 60, I'd like to be fully retired. To sketch out some numbers for my plan: First, I'm planning for my Cost of Living to range between $2.5k / mo and $5k / mo. I know I can travel long term for about $2.5k/mo. I actually expect this to be less, but rare expenses happen that can blow a budget. On the high end, if I want to live in a nice modern city with conveniences and vacations or trips back home, I may spend towards $5k/mo. Retirement looks about the same. If I'm healthy, costs will be low. If things get rough, costs will be high, but then I may not live much longer anyway. I am currently un-married, with no kids.. and there's a good chance it'll stay that way. Phase: Full Retirement. I'm aiming for $1.25m at 60 for retirement. I'll need about $325k at age 40 invested to coast in with ~7% stock market growth. I'll be getting about $2k/mo at 70 for social security. The FIRE calculators say I should be able to spend around $4k a month safely off of this investment. There's lots of unknowns, including stock market return. So I know I may be delayed by a few years, or be under budget. Over the years, I'll check in on my progress and adjust the plan accordingly. Phase: SemiFIRE. I'll aim to be "50% SemiFIREd", with $200k of investment funds available at age 50. Semi-FIRE is living off a portion of my investments plus some additional passive income and/or enjoyable/meaningful work. Example: "50% SemiFIRE" would be half of my cost of living coming from investment income. If my cost of living is $4k/mo, I'd be taking $2k/mo from investments and earning $2k/mo doing photography, or working for a non-profit, or whatever I figure out that I want to do with my life. There's also a chance that I do something like consult, which will pay really for a small amount of hours, but not necessarily be fun or meaningful. It's harder to know what a Safe Withdrawal Rate is for a 10-year time span, since stocks are so volatile. I should need $100k set aside at age 40, to have $200k at age 50. Phase: CoastFIRE. At 40, I'll need ~$425k set aside for full-retirement and semi-fire investments. I can then "coast" through my 40's, working just enough to pay for my cost of living, allowing me to experiment and leave my unsatisfying career. This may mean consulting in Amsterdam, or teaching English in Taiwan, or travel blogging from Patagonia, or working at a non-profit near my family & friends in the US. I don't yet know what I want to do with my life, because I don't yet have the freedom to explore. Actually coasting requires a huge leap of faith, and a plan to exit my well-paying stable career to go off on a new adventure in life, ensuring that I have enough of a safety net to handle the risks. My goal is to have $50k-$75k set aside to bootstrap this decade, giving me 1 year of travel funds, and another year of emergency funds. My worst case scenario is a health issue causing me to return to USA, along with a struggle to find a new job, perhaps needing to pay for more education before finding employment again. I am currently 39, so I am breaking up my plan for my 40's into two 5-year chunks. In the first 5-years, I will ease out of my career and explore options for a new more-meaningful less-paying career. At 40, I'll take 6mo - 1yr off on a "mini-retirement" while I travel and explore "side hustles". During this time, I'll keep my skills up for my career by doing coursera & personal projects. I'll return and work at age 41, but I'll plan to choose contract, consulting or freelance projects. After a year or two of this, I expect to transition completely out my office work career. So my goal is for age 40-45 to ease out of my career. My goal for age 45-50 is to re-establish myself in another more meaningful but likely lower paying career. As long as I net zero over the decade, I'll be good to go for SemiFIRE & Full Retirement. Funding Goal: $500k at age 40:
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| Why so much talk about RE when this sub is about FI? Posted: 29 Jun 2019 01:27 PM PDT | ||
| Anybody on here aiming for FIRE w/ salary under 50k, what has your experience been like? Posted: 28 Jun 2019 06:51 PM PDT I'm wondering how successful people here have been w/ FIRE-related goals while having low income. I get about $20k-24k a year as a grad student (depending on if I'm in a teaching or stipend year) while my partner brings in ~$25k working retail. The stories on here are very inspiring, but most of the ones I've seen are from people with significantly higher income than myself (even the ones that specify that they have a modest/low income are comparably high). I'd love to hear about other people's experiences coming from similar situations. [link] [comments]  | ||
| Incredibly frustrating. I could fire now - if I was allowed Posted: 29 Jun 2019 10:19 AM PDT So based on my 401k, estimated pension, and estimated social security I can replace 100% of my salary for perpetuity. But I'm not allowed to collect. Have to be 62 for SS and 55 for the pension (if they offer VERA at the right time). So how the hell do I bridge the gap? Let's assume I figure out how to bridge the gap and don't wait until 62 to get out of this rat race. Am I giving up anything social security wise? [link] [comments]  | ||
| Fired outside US. why not india? Posted: 28 Jun 2019 03:59 PM PDT There are multiple subs on "whats best place to FIRE outside US?"....not even one comment pointed India. Just curious why not Fire in India? super cheap health care cost. low cost of living. [link] [comments]  |
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