Financial Independence Daily FI discussion thread - June 05, 2019 |
- Daily FI discussion thread - June 05, 2019
- Mental pitfalls and FIRE on a normal salary
- How big of a house do you live in and how does it affect your FIRE path?
- Struggling with the mentality of starting my working life while FI - a case study of FIREing in reverse order?
- Pay down debt or invest: the psychology of debt
- Fire for kids
- Weekly Self-Promotion Thread - June 05, 2019
- Does anyone use Vanguard target retirement funds?
- Best low or medium cost of living areas for early retirement in North America?
- Thinking of moving to HCOL city, crazy?
- Wanting to enjoy myself both ways
- FIRE-hype = economic boom. Should this make you postpone FIRE?
- Life insurance for the FIREd - any resources, links or suggestions on how to buy, how much to insure for, etc.?
- FIRE when you like your job?
- Is there value in visiting family in another city?
| Daily FI discussion thread - June 05, 2019 Posted: 05 Jun 2019 01:08 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]  |
| Mental pitfalls and FIRE on a normal salary Posted: 04 Jun 2019 11:31 PM PDT So I need some advice. I get the concept. Spend less, save more, invest in various sidebar investments. I'm working on it. But what I don't see is many success stories of people doing it on a normal salary. Everytime I read anything on FIRE, it's always 'I made 186k a year' or 'I'm 20, debt free and making 90 grand'. Congrats, and I mean that seriously, but where's the success stories for people on 20k, on 30k. The success stories for people who discovered it later and who earn less. When I realise that some people are looking for how to FIRE in the next two or three years and I'm not even likely to finish repaying my debts for another 9 months, it's depressing as hell. And I know I shouldn't be comparing myself to other people's journeys, but by god its hard sometimes. Any suggestions on how to avoid this mental trap of despair would be appreciated. [link] [comments]  |
| How big of a house do you live in and how does it affect your FIRE path? Posted: 05 Jun 2019 08:31 AM PDT The biggest living expenses is around housing. The bigger the house is, the more expensive it is to pay for it and maintain it. Utility bill gets bigger too. So the most sensible method is obviously to reduce housing to the minimum to increase our saving rate in a meaningful way. At least that's the theory. I make very high income from my job and investment returns. I was qualified for more than a million dollar loan to purchase a new construction custom home. It was tempting to move into a a dream home with all the amenities and custom features I wanted. But after much debating and soul searching, I decided to stay put in my 2 bed 2 bath 900 sqft home. My family size is only 3. We are comfortable and have everything we need. If I pull the trigger, I can easily pay off the remaining balance or cover payment from my stash. I am wondering who else out there are choosing to stay in small home? How many people live in it? Does that decision play a major role to enable you to FIRE? Or oppositely, do you wish to downsize/simplify to speed up your FIRE journey? [link] [comments]  |
| Posted: 05 Jun 2019 01:08 PM PDT Disclaimer: What follows may sound like I'm speaking lightly about my situation. Believe me, I'm incredibly grateful for my financial and professional fortune and acutely aware of how lucky I am. I'm also aware this is a very minor problem relative to what most have to worry about. Please don't think I'm trying to brag or show off. I'm looking for a bit of guidance on what I believe is an uncommon problem around here: I have been FI all of my adult life, following the investing/budgeting principles discussed in this sub religiously, and will be starting my working life soon. I am struggling with how I can be effective in any position/have actual motivation while having FU money from the beginning, despite being in a position I have a passion for. Background, for context: During my grade 11 summer, 10 years ago, I was riding my motorcycle on a highway minding my own business, when a tourist that had never driven anything other than her parent's smart car turned left in front of me in a rented full-size pickup truck while towing a boat on vacation. I had no time to react and went into the side of them, it was deemed to be 0% my fault. There was a lot of injuries, but the only lasting one is a severed spinal cord leaving me a paraplegic. This was in Canada. Luckily for me, they had max government and rental insurance. Four years after the crash, we settle for 4.36m CAD. I pay lawyer's fees, pay off my parent's mortgages and debt they took on while I was in recovery, and voila, I'm FI at 21. Things have went smoothly since. I have a great mortgage-free rental that pays all costs of it and my current place, and for everything else I screw around with ~2% WR of my liquid investments. I've been on full-ride scholarships almost this whole time. Nothing I do outside of investing is motivated by money. Without the pressure of finding a job to get by, I have been in school and traveling. I did a finance degree and traveled in the summers and the gap years before and after it, then an MBA, then another year of travel, and now I'm part way through a law degree. I stayed really close with the lawyer I worked with in my personal injury case, and he has offered me an articling position (pre-licensing position for Canadian lawyers akin to residency for doctors) at his firm, where I will practice tax law and help out on other PI cases to help others in the same way I was helped. In other words, a dream position for me with a great mentor. My current situation: I'm at a point where I feel like starting work is the only thing left to do - I've traveled everywhere in the world that I feel I'm able to alone (that I desired to go to anyway) and any other places I want to go to are not accessible enough that I would feel comfortable going without someone. Everyone I would actually want to travel with is getting settled in their career and can't take the time to travel for long periods. I don't blame them at all for that, obviously. I've played sports nationally, I hold board positions in charities that helped me during recovery, I've done all those typical bucket list things like skydiving, bungee jumping, learning a language, etc. I have no interest in a degree higher than this JD and no interest in pivoting to a new subject. So at 27 I've seen what I want, learned what I want, done what I want, continue to help who I want, now I have a job ready for me that I want. I have a great relationship. Yet still, as I go through a summer internship that will prepare me for this profession, I catch myself already occasionally thinking that I don't need to stress myself, I could quit forever and give it up professionally and be totally fine, etc. What's keeping me going at the moment is that I can help others get the help I did after my accident, otherwise in a sector that interests me, and that I don't want to let down my family/friends and mentor that are also excited to see me succeed professionally. But I am very worried that I will waste away a good opportunity, be ineffective and always half-assing it knowing being there isn't at all necessary, or lose sight of any motivation I have by being overcome by the notion that a career is just "all that's left to do" in what I think I want out of my life. I'm worried that the effort involved in this will lead me to wanting to bail and just stay home and play video games because I can. I'm very worried about complacency. Has anyone here started their working life while FI and have any wisdom to share? I don't have anyone that in my life that has. I'm open to any thoughts at all really, you all have a lot more working experience than I do. Thank you for taking the time to read this. [link] [comments]  |
| Pay down debt or invest: the psychology of debt Posted: 05 Jun 2019 11:59 AM PDT I was having a debate with a friend last night on whether or not it is better to pay down debt or invest when it comes to FIRE. I was strongly on the side of paying down debt but he made some very convincing points and now I'm in the middle. What are your thoughts? Here is an example for discussion. Not accounting for taxes, income, etc. You have $100,000 in debt at 5% and have just received a $75,000 bonus. What do you do?
On the one hand, becoming financially independent would lean more towards option 3 as you will have higher returns over the long term. On the other, retire early means more on option 1 to shorten your time horizon. What do yall think? [link] [comments]  |
| Posted: 05 Jun 2019 09:23 AM PDT Throwaway Account Me and my husband are naturally frugal and spend less than half the money we earn. I am an academic and have a Job for life. I do not want to retire early but I think about creating a retirement stash for our kid of now two years old. We actually already do, because we do not know what else to do with our left over money. We have ETFs at degiro (accumulating). We live in a paid off apartment in a bigger city in germany. Public schools are good and free, so is college for now. So what else to save for. Is anyone else here saving up a stash for their children? What do you consider the best strategy for that? [link] [comments]  |
| Weekly Self-Promotion Thread - June 05, 2019 Posted: 05 Jun 2019 01:08 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
| Does anyone use Vanguard target retirement funds? Posted: 05 Jun 2019 03:19 PM PDT Vanguard has low fees. This balances for you. does anyone use this? https://retirementplans.vanguard.com/ekit/pmed/trf/index.html?ajdejc&abqu&& [link] [comments]  |
| Best low or medium cost of living areas for early retirement in North America? Posted: 05 Jun 2019 10:31 AM PDT My partner and I expect to be able to FIRE in about 3 years, if we sell our expensive house and move away from our HCOL city. We are: Late thirties, no children, and we have both Canadian and American citizenship. Our ideal would be somewhere that has a lot of outdoor activities, and where we can afford a few acres of land while still being in or near a nice community. We particularly love the pacific northwest (who doesn't?) and small college towns and outdoors-focused communities, but I'd also love to see discussion of areas outside of what we already think we want - we'll be retired a long time, and probably won't stay in one place forever. [link] [comments]  |
| Thinking of moving to HCOL city, crazy? Posted: 05 Jun 2019 01:06 PM PDT I have been struggling to decide whether to stay in my current city, just 30 min south of Philadelphia or move to San Diego. My wife and I are immigrants and the only family we have are in San Diego. We love the weather and the idea of being close to family. Also the fact that our kids can grow up with their cousins. Most importantly we are feeling lonely here, very few friends and during winter it gets really depressing. We are ok to delay the FIRE of it means that we will have a better quality of life at least that how it feels like. But then there are things that we will have to compromise. The biggest that I can think of is we would have to rent vs. buy and the house will be downsizing interns if size. We have a 3500sq feet home here but realize that some of the space is not being used. Having a big yard is good but the maintenance adds up. We are close to DC, NYC and the mountains but haven't made any trips to these places yet. Maybe coz we have young kids. Maybe this will change and we will go to these cities more often etc. I am also kinda bored of this place as there is very little to do and I don't find it has the big city charm or stuff to do. Maybe it's all in my head, If we move we will definitely rent our house here and rent a house in SD. Not sure if the rental will cover the mortgage. As far as the actual cost of living, that will definitely go up but we can also benefit from nicer weather and close to family. At this age it's very difficult to actually make friends so hoping that will change a bit when we get into a established social circle of our family and get to make new friend that way. Income currently is $170k combined and I think will need a bit more to maintain the same life style in SD. The other thought that crossed my mind is the money that we will be saving staying here can be used to take multiple vacations and visiting our family. But is it really the same? I also feel like I am the kind of person who wants something really bad and when I have it it's like it's not a big deal anymore and off to chasing something else. Any thoughts or words of wisdom? [link] [comments]  |
| Wanting to enjoy myself both ways Posted: 05 Jun 2019 01:53 PM PDT Hi all, Long time lurker. I find myself wanting to enjoy life without having to work past 45, but I also find myself wanting to enjoy life now... I'm in my mid twenties, roughly 300k net worth. So I'm on track for FI, BUT I always indulge.. I buy Rolex's, shoes, eat out, etc. I spend upwards of 30k a year on random things that I don't need, but enjoy. I'm struggling to force myself in the direction I need to retire early. Has anyone dealt with this urge to retire early but also spend on what you enjoy now? How did you cope, what ended up happening? [link] [comments]  |
| FIRE-hype = economic boom. Should this make you postpone FIRE? Posted: 05 Jun 2019 10:56 AM PDT So. Over the past few months/couple of years, we have seen a dramatic increase in the popularity of FIRE. Using simple logic, the reason for this should be the past ten years of economic growth, largely thanks to low interest rates. The S&P500 has returned an average of 11.3% per year since January 2009, and inflation between 2008 - 2018 totalled just over 16%, which is less than the FED's target rate of 2%. All of this is to say that we have seen some serious stock market growth, relatively low inflation and with the help of cheap credit, people have leveraged their investments (both in the stock market and other assets such as real estate) quite a bit. According to Paul Tudor Jones, a financial markets guru in my opinion (he essentially predicted and profited off of 1987's Black Monday), we are in a 'global debt bubble'. In 2007, the crisis was caused by a housing bubble. This time around, it seems it will be powered by the bursting of an overcooked corporate debt bubble. Furthermore, one Jack Bogle is predicting lower returns over the next decade or so. So perhaps this should put the 4% rule into question, as well? Is this to say that we should perhaps postpone FIRE, those of us who are close to achieving it, or maybe save even more so that we have a comfy cushion in place in case of a huge financial meltdown? Now, I know about JLCollins' stock market series and I fully agree with what he's saying. I know about MMM's thoughts on it, and I know and agree with that you shouldn't sell. Ever. Unless you're retired and living off your portfolio. But maybe there's some adjustments to be made in pursuing FIRE. Perhaps the 4% rule isn't enough. If markets begin to slow down and do so for the next decade (or two? or three? or four?), returning only, say, 4-5% (not inflation-adjusted), then the 4% SWR isn't going to cut it. Additionally, people seem greedier than ever. People are questioning traditional bank accounts that don't return anything, and they all want to put it in the stock market because 'it returns 8%!!'. The problem is that 1) it doesn't return 7-8% every year and 2) you'll have to keep your money there for 5 - 20 years to actually be sure of making a good positive return and 3) you could lose money. I don't know anymore. What do you guys make of all this? Must FIRE be postponed? [link] [comments]  |
| Posted: 05 Jun 2019 08:41 AM PDT |
| Posted: 04 Jun 2019 06:11 PM PDT I've been interested in FIRE for a while, and have made good progress towards saving and reducing expenses, but I'm stuck about whether I would actually find fulfillment without my current job. I work in a scientific field, and I really enjoy my job. The issue I have is that I enjoy a lot of other hobbies and things too, and wish I had more time to devote to them. But I'm not sure that part-time work is that feasible, even if I solve the financial part...maybe if I switch to being a consultant or something similar. How have others figured this out without jumping in with both feet? [link] [comments]  |
| Is there value in visiting family in another city? Posted: 04 Jun 2019 09:21 PM PDT I have been focusing on increasing my net worth over the last few years and am almost on track to reach $60,000 by the end of the month. It costs about $3,000 for a trip to visit our family (flight, car rental, food, etc). Spending the money will set me back on my Financial Independence goals. Not visiting family seems wrong since we only live so long and stuff happens. I am able to save about $1,500/month. So is it wise to spend the money because it's important to visit family? Or is it wise to save the money because it's important to have Financial Independence earlier? I'm interested in hearing your thoughts and approaches to tackling this dilemma. What is your decision making process? [link] [comments]  |
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