Financial Independence Daily FI discussion thread - June 07, 2019 |
- Daily FI discussion thread - June 07, 2019
- A "Normal Guy" and his take on FIRE
- Think I'm ready to take a long sabbatical to help raise my child
- Comparison of a decade of returns after abandoning Edward Jones
- Great read on a more inclusive FIRE community in NYT today
- Should I leave or should I go? Need opinions on job offer
- Confirmation--Are we ready?
- Weekly FI Frugal Friday thread - June 07, 2019
- Paying off the house for FIRE
- Should I quit my job for a government job
- What path to FIRE would you suggest for someone who is unable to move out of their Native American reservation?
- Anyone FI/RE'd when having a kid with special needs
- Pension and FIRE?
- networth with a pension
| Daily FI discussion thread - June 07, 2019 Posted: 07 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]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A "Normal Guy" and his take on FIRE Posted: 07 Jun 2019 12:08 PM PDT It seems like there has been an uptick in posts on this sub recently of people making 5 figures wondering how on earth "normal" people FIRE, or why we don't hear more of their stories. I'd like to attempt to address that question by using my own journey as a reference. What's important to remember is that FIRE is more than the simple math and flowcharts you can find on the sidebar. It's a philosophy, a mindset that you apply in your everyday life. Often around here you hear the phrase "spend less than you make and invest the difference." For me, that takes the form of the following questions: What am I doing to maximize my income? What am I doing to minimize my expenses? That's it. A lot of folks who tend to contribute to this sub focus on these key elements. And rightfully so, that's led to quite a bit of success in escaping wage slavery. However, that's only one side to the philosophy of FIRE. You also see a lot of the phrase "build your life you want to live and then save for it." To be honest, the vast majority of FIRE stories I've seen on this sub haven't followed that path. I think that's because they went hard on the FIRE path, calculating their moves to most efficiently get out of the rat race early. And good for them! They should go fuck themselves! But I've taken a different approach. I am a high school teacher in rural Alaska. I love my job. I love the vast majority of my co-workers, my students, and even my bosses! Almost every day I wake up and look forward to going to work. Moreover, I feel an immense amount of purpose, and being in such a small community in such a small state, my individual decisions and actions can have large impacts and ripples. What an amazing opportunity in life to do good and be good. Not only that, but the lifestyle rural Alaska affords me is nothing short of amazing. I have an immense amount of freedom. With this freedom I can pursue passions and hobbies. I can (and do) garden, raise animals, hunt and fish, learn and practice carpentry and woodworking skills, hike and explore. I can do all of that literally right outside of my front door. And because I'm a teacher, I have a significant amount of time off to enjoy these opportunities to build this lifestyle while I'm still working. Most important to me, though, is that this lifestyle and career provides me with the ability to be the kind of father I want to be to my children. I do attempt to maintain a FIRE philosophy, mainly so that I don't end up as that old teacher who clearly doesn't care and is hanging on for their pension, and as insulation against potential political maneuvers that leave me out of a job. To me, that's the most logical use of the FIRE philosophy. But as it turns out, when you are living the life you want to live, saving for it tends to come second. I don't carry much debt, and I do invest, but I'm also willing to see buying a new chain saw as an investment so I can harvest timber and firewood. Those are investments that I consume, sure, and I can try and calculate the money saved by harvesting my own firewood and so on and so forth, but so long as I maintain fiscal responsibility those investments make me happy. And isn't this what FIRE is all about? To be honest, when I read even the success stories posted on here, a part of me feels sympathetic. Yes, I, a lowly teacher living in a 1 room cabin in the Alaskan wilderness, feel sympathy for folks earning 6x as much as I ever will and becoming millionaires within a decade! Not because I'm not happy for them for escaping the rat race, but because they had to sacrifice a piece of themselves to achieve it. So I guess what I'm trying to say is that FIRE is merely a tool in your belt. I certainly could be doing my absolute best to figure out how to make low 6 figures with minimal disruption to my life. But not doing so is worth the opportunity cost. If you feel like you are stuck in the rat race earning 5 figures, by all means figure out a way to game the race in your favor. Or, you might be able to build a life for yourself that you don't feel you need to escape from, and use the tools you can find here to maintain financial security and fiscal responsibility. And if you're a part of the latter, like I am, you aren't likely to post anything about your "FIRE journey," because quite frankly it wouldn't really fit the narrow definition of FIRE. Your spreadsheets aren't really that impressive. You're busy with life outside of Reddit. You see yourself working towards financial independence, but not through the vehicles so often discussed here. The reasons are myriad I'm sure. Anyway, that's the reason I suspect we hear so much from 6 figure earners on the coast, or recently FIRE'd folks living in Thailand. There are plenty of 5 figure earners out there, quietly working towards some version of FI. Of course, simple math tells us that it'll take us longer to get there, but for many of us that might be an acceptable, indeed perhaps preferred, course of action. So keep your chin up and work diligently towards building a better life, whatever that means for you. Seems to me like that's what FIRE is all about. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Think I'm ready to take a long sabbatical to help raise my child Posted: 07 Jun 2019 08:59 AM PDT
I'm going back at the 8 week mark, and plan to spread my remaining 4 weeks of FMLA out over 8 weeks working part-time. If I feel like I cannot transition back in, or work is taking me away from him too much I think I'm going to have a mini retirement party! [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comparison of a decade of returns after abandoning Edward Jones Posted: 07 Jun 2019 01:35 PM PDT So another poster has been posting about Edward Jones in the daily, and I've been having flashbacks to my own experience with them years back. But since that was around the time I started more closely watching my investments I realized, hey, I have the paperwork and could pretty much put an exact dollar amount on how much money I would have lost sticking with EJ for the initial investment. Amazingly every fund they had me invested in apparently still exists to this day, and I never changed my holding of a single fund that I moved everything to in taxable so I still have that money separated out. So, time for some hopefully therapeutic number crunching to help me figure out how much of a bullet I dodged. Methodology: I found the last statement I ever got from EJ before I moved my account so I have exact holdings as of 9/25/2009. I'm using Morningstar's website as a quick and dirty way to figure out the approximate change in value I would have seen since that date by using their hypothetical "Growth of 10K" chart. Basically I put in the start date of 9/25/2009, so that is a $10k marker, and looking at the current day value of that $10K. I'm assuming that handles things like share splitting and any potential changes in ER over the years. Once I have that delta, I'm dividing the end value by the initial $10k to get a percentage change over the time duration, and applying that to my initial holdings to estimate what the value would have been in today's dollars had I held those funds. I'm then multiplying that final value by (1 + Initial Load) to re-add the initial load values to the funds, since there were loads on every single stupid fund. Since I immediately sold and bought FXAIX, I'm using the same procedure to get an estimate of what my returns have been for FXAIX. Since I have held those funds to this day, I can compare against my actual value there to determine if the "Morningstar Graph" method is at least somewhat accurate. Results: OK, so, here are some charts. First, here was my 09/25/2009 holdings with tickers. Note that I know the loads haven't changed over the years, but I'm not sure about ERs, but I suspect they've been consistent. The values below are the current day loads and ERs:
Total holdings: $41,305.37 So how did those tickers do over the past near-decade?
Clearly FXAIX crushed all of them. But my tears of rage want to know exact numbers.
Total hypothetical holdings: $97,073.98 Total ACTUAL holdings: $136,219.19 (predicted: $136,620.57, so pretty close) Total hypothetical holdings if I never had been hit by the loads: $139,155.08 Amazingly to me the loads didn't matter a huge amount, probably because the two large load funds were my smallest holdings. In summary, switching away from Edward Jones saved me approximately $39,000 over a decade on an initial investment of $41,000. Another way of looking at it, approximately 42% of my returns would have been eaten by EJ had I stayed with them. Of course I've been adding to my investments over the years since then, so the actual savings are much, much higher. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Great read on a more inclusive FIRE community in NYT today Posted: 07 Jun 2019 10:29 AM PDT Highly recommend giving this a read: https://www.nytimes.com/2019/06/07/business/fire-women-retire-early.html I didn't realize most of the mentioned blogs were even out there! Would love to get more recommendations if anyone knows of others not mentioned in the piece. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Should I leave or should I go? Need opinions on job offer Posted: 07 Jun 2019 03:30 PM PDT I'm a 30 year old male in the tech industry. I've been working at a company for the last two years for $160k/year with 138 hours of vacation time, 20% cash bonus, 25% restricted stock with 3 year vesting period. My responsibilities have continuously grown for the last year but without a significant promotion. Current company provides 3-4% inflation raises every year. I've asked to be promoted but was told that although I'm highly rated each year, the next salary grade has an average age of experience that is 6 years more than mine. I'm at the top of my salary grade, which means the only way I can get a significant raise is to get promoted. I wasn't actively looking but was contacted on LinkedIn by a recruiter. Just received an offer at a new company for $175k/year with 200 hours of vacation time, 20% cash bonus, 30% restricted stock with 3 year vesting period. A $25k signing bonus was offered. Company does not guarantee inflation raises each year. The sign on bonus (which I tried to negotiate but they are firm on) wouldn't completely cover the the unvested stock and half of 2019's bonus that I would be leaving behind. At my current company, I would get $42k in a mixture of vested stock and cash bonus in 2019 and $30k in 2020. I have dreams of being management material one day and have no idea what my projections of upward mobility are at either company. My current company seems like it's on shaky grounds but I'm not sure if that's always the perception of the company you're currently at. I would like to also be financially independent so I have the freedom to retire early if I one day decide I'm done with work. I'm near $1.5MM in net worth so am very comfortable without large expenses. Any opinions on what to do? I could go to my current boss and ask if there's any chance I could get a promotion? But do I bring up my current offer? I'd rather sign the offer first, go through the background check to make sure everything goes smoothly before telling my current boss. But once I sign, I'd ethically feel committed to going through with the job acceptance. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Jun 2019 02:24 PM PDT My son introduced me to this community and I love reading all your posts. My husband is 63 and I am 61, a little past the age of FIRE. LOL! We are about to retire and wanted your feedback as to our financial situation. I think we are in pretty good shape.... Traditional IRA's $990,000 Roth IRA's $63,000 Taxable $50,000 HSA $18,000 Inherited IRA's $113,000 Cash/Collectibles $150,000 Pension $7,000/year Social Security is going to be taken at 66 and 4 months and at 64 for a total of $48,000/year We now pay for health insurance through my job, but in August I plan to quit and take Cobra for 3 years (18 months Federal and 18 months State). From 64-65 I will try my luck on the open market (whatever that happens to be). My husband will be on Medicare. Our house is paid off and absolutely no debt. We can easily live on $45,000-$50,000/year. After spending years building our wealth, it's scary to actually pull the trigger and start spending it, I think this is a common problem with our age group. My husband has worked tirelessly (me not so much--LOL) over the past 45 years. Our two children are married and have great jobs. We just cleaned out our office and found old papers that showed our net worth in 1983 at $83,000. It's now $2,360,000! Thoughts? Thanks! [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weekly FI Frugal Friday thread - June 07, 2019 Posted: 07 Jun 2019 01:08 AM PDT Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! 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: 07 Jun 2019 10:24 AM PDT I think it's pretty obvious I should have my house paid off before FIRE. What I'm wondering is if doing so even earlier is important. The math says that if someone has a good mortgage rate then they are likely better off investing themselves and holding the mortgage as long as possible. That doesn't mean it's good psychologically. I'm at a point where I can hit basic FIRE in 10 years but my mortgage has 20 years left. I'm currently maxing my 401k and doing the normal mortgage payments, but I'm going to back off the 401k for a little while so I can get a little extra cash and refinance to a 15 year in the next few months (this is mostly to lower my rate). Once that is done I'm deciding how much I should go back to the 401k vs putting big chunks into the mortgage. If i did stick with the basic mortgage payment I'd just need to wait a little longer to FIRE so I could take out the last 5 years as a single payment. What do the FIRE'd people think? How early were you mortgage-free? Would you do it different now if you could? [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Should I quit my job for a government job Posted: 07 Jun 2019 02:37 PM PDT A bit about me. I am single, no children and is in my early 30s. I started my first job a couple of months ago, but now I was given the opportunity to work for the government. However, I am not sure if I should take it or not Pros about my current job - great co-worker + supervisor - flexible and close to home (around 15 minute train ride) - require you to constantly learn new things con - can be frustrating - low salary and most likely no raise since its grant base - poor benefit - okay retirement - not planning to say there for long, maximum of years I am willing to stay is 2. I cannot imagine myself doing this for the rest of my life. - definitely no room for advancement - The government job Pro - Great benefit + pension - better benefit - low stress con - I heard that the job can be repetitive and that once you get familiar to the task, you don't really learn anything new As mention, I only started this job several months ago so I'm a concern that if it doesn't work out. I will look like a job hopper. What do you guys suggest As mention, I don't really want to stay at this job, but I'm not sure if this feeling is temporary since I feel like I'm not making a difference or is great at my job. I'm not sure if I should use this time to try to learn new things since I know that once I start the government job, I do not want to leave due to the job stability and pension. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jun 2019 08:46 PM PDT Right now, I am considering temporarily leaving the rez, becoming successful outside and then returning to the rez. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Anyone FI/RE'd when having a kid with special needs Posted: 07 Jun 2019 01:44 AM PDT Ok some context here: Indian living in the middle east, 40, Have 2 young kids, one with special needs (autistic features), wife cannot work due to our kids issues. I am not even sure if I will ever be able to be retired before 60 (or ever). I earn well, 130k USD per year, but our expenses are like 115k usd per year due to so many expenses for my kid such as therapies, shadow teacher, nanny etc etc. And on top of all if this, since I am Indian, it's culturally expected of me to buy my kids their house, pay for their marriages, college, cars etc ( can't complain really, all of these were done for me by my dad too). And if my kid is unable to earn at a later stage due to autism, I will have to make sure I leave him a massive inheritance so he doesn't have to work. India really doesn't provide anything when it comes to health care or any benefits whatsoever. (Again can't blame them, 1.3 billion is a massive population to subsidize) Is anyone else in such a situation?? I have a blessed life being born in a rich family (rich according to Indian context, upper middle class in Western world financial context), but I worry I will never be able to ever retire. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 07 Jun 2019 02:56 AM PDT Is it worth paying into pension when your planning FIRE. I work for NHS in England and the earliest age I can retire is 55. I am planning FIRE hopefully atleast a decade early. So I have opt out of pension. Any reason I should go back into? Because this few extra hundred pounds I am using it to invest in stocks. [link] [comments]  | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 06 Jun 2019 06:27 PM PDT my wife and I super new to the pursuit of financial freedom/ independence, and as we are working on paying down debt (mostly student loans) and soon to be increasing contributions to retirement accounts (both 401k (wife) and 457b (mine)), I'm wondering how you factor in a pension into net worth, and calculating 'the number' I want to work towards for personal net worth and retirement. context: I am a firefighter and can retire, at the earliest, in 15 years, but will likely stay at least 18 more to both, a) increase my pension, and b) work until the youngest graduates high school. [link] [comments]  |
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