Financial Independence Daily FI discussion thread - June 08, 2019 |
- Daily FI discussion thread - June 08, 2019
- Considering leaving law for something I don't hate
- Why aren't there more people in sales in FIRE community? Questions about sales
- I unexpectedly inherited a trust fund worth $2.5 million and have general questions
- Simulation of buy-and-hold investing in the S&P500 for the last 148 years [charts]
- Am I crazy?
- Age to Choose for Retirement in Finance Tools
- 24M Looking For Advice and Direction
- Regarding Roth IRA contributions, is there any reason one should make regular monthly contributions rather than a lump sum once a year?
- Newbie to FI / FIRE - looking for advice and tips as I start my FI journey
- Long-term slight annualized % improvement over market average
- Estate planning between Europe and the USA
- Women on FIRE
- Feel Stuck and want to make right choice (29M)
- The Truth About the Fire Movement (The Moneyguy Show)
- Too frugal?
| Daily FI discussion thread - June 08, 2019 Posted: 08 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]  |
| Considering leaving law for something I don't hate Posted: 08 Jun 2019 09:46 AM PDT I'm a 32-year-old lawyer with about $250,000 in savings. No significant other or dependents. I currently make ~$160k and have paid off all debt except for a $1700/mo mortgage payment. I've been a litigator for 6 years and hate pretty much everything about the job except for those few hours I get to spend researching and writing briefs. The marketing aspect, court appearances, settlement discussions, constant petty fighting counsel, the 3am Saturday emails, the crazy clients, the mind-numbing contracts and procedural rules... pretty much every other aspect of my job? I really truly hate. To the point where anxiety keeps me up at night, I dread answering my phone, and I daydream about becoming a hermit in Tibet. What I really want to do is teach or be a librarian in a smaller town somewhere (I had substitute teaching and library experience back in the day and loved both), but the pay is just holding me back. My thought is this... if I really up my saving and stick it out in my job for another 1 or 2 years and then maybe another 2 or 3 years in-house (most of the recruiters calling me have been pushing positions that would pay in the low 100k range) until I just can't stand it any more... am I a total idiot if I leave and take a job that pays a fraction of what I make now? Would retiring early still be feasible? The thought of 10 more years as a lawyer is just so brutal. [link] [comments]  |
| Why aren't there more people in sales in FIRE community? Questions about sales Posted: 08 Jun 2019 07:51 AM PDT Lately I've been thinking about going into sales because I just notified my boss I'm leaving my current job. Quick background about me is that I'm a mechanic on ships and saved over 30k in the last 10 months. I'm new to FIRE and although I haven't been with it long term I've had a good start by saving 78% of my income by working a lot of overtime and cutting expenses by living with a family friend, not eating out, watching every penny, etc. I'm leaving this job because of the physical toll it takes on my body as I turn 40, plus because of the extensive travel to different ports and living on ships doesn't allow for any normal social life or free time for hobbies. It's been a difficult decision because the earning potential is high... 80k within the next year or two, 100k within 4 years. The earning potential is all because of overtime pay since my current rate is $14 an hour. Lead mechanics make $100k a year but by being on the clock all the time. One thing I like about it is it is performance oriented pay... the more you work the more you get paid. The more you learn and know the more you also get paid. I actually like knowing that my check will be different each week based on how much I work. I think I may like sales for the same reason. The better you perform the better you will get paid. The problem is that I'm kinda scared and intimidated by sales because I don't have any experience. But sales definitely has the possibility to become a high earner which is the FIRE phase I'm actually in. I've gotten down being frugal (I actually always have been since I've never made a lot of money... I've mostly lived overseas and in other circumstances where I lived on very little money). If I'm actually going to be for real about this FIRE thing I have to get my income up. It seems like a very logical and straightforward way to increase income is to just go into sales. But it makes me ask why does it seem like very few people in the FIRE community are in sales? I mean I don't know if I've ever read a post where someone talked about how they worked in sales. Maybe because most people I've met in sales like earning a lot so they can spend a lot and have nice things. A lot of salespeople I've met have nice cars, clothes, watches, downtown condos, etc. Maybe that's a big thing for motivation. Is it maybe for a lot of people in sales living an extravagant lifestyle and just making a lot of money important (and don't share the underlying FIRE values of freedom, etc.). For someone new to FIRE like me it seems like sales is a good option because there is high potential for earning and you don't need professional certificates or a lot of specialized training like a doctor would. I've literally known guys that got a sales job right after getting out of rehab and they were money hungry and hustled their way to 100k a year. So my questions for anyone out there in the FIRE world in sales are:
A little more background about me to speak to question 5 a bit. I'm scared of sales because making money has never been that important to me until this year (and making money seems to be the obvious motivator in sales). I've basically existed outside of the system for my adult life by living in other countries and working in higher ed with scholarships. For a couple years I even lived in Tijuana and worked in San Diego part time so I could have the time to learn Spanish. To put it in perspective the most I've ever made in a year on my social security statement is 17k (not including this year of course). I've worked in other countries so that or less was always enough to live. Doing this allowed me to progress in academics though and I've always been a high performer in things that I worked at. Was on a research team for the European Union, taught some university classes, learned foreign languages, etc. The point is that money was never important. And now that it is important I just saved 30k in 10 months so I think I can make a go of it at sales. it's just that most people in sales are so different from me and have a business background. Anyway it's been a good first year and I'm just trying to decide what to do next. The easiest thing would be to just stay at this job but my body can't handle the physical toll so I'm out. So maybe sales. Any comments are appreciated. [link] [comments]  |
| I unexpectedly inherited a trust fund worth $2.5 million and have general questions Posted: 07 Jun 2019 08:16 PM PDT ess of inheriting a hefty trust fund (the amount is highlighted in the headline, I just feel "funny" typing out that amount multiple times). I'm guessing it would be helpful to include a bit of context about myself, my lifestyle, and my long-term financial goals. I'm in my late twenties and live a rather spartan lifestyle. I rent a modest apartment, I don't own a car, I don't eat out, and I don't travel more than once or twice a year. I work as a unionized janitor and have no interest in seeking a more lucrative, specialized career; I live quite comfortably on a salary of about $29,000 a year (this is "luxury" for me). As far as long-term goals are concerned, I would love to move to a cabin outside of my high COL city within the next twenty years and continue to live a comfortable-yet-modest lifestyle (I have no children and don't see myself having children, however I'm not ruling anything out at this point in my life). I will continue to work for the foreseeable future and am going to keep quiet about my good fortune, but just to be perfectly clear, I do want to get to a point where I live entirely off of the dividends of my trust (while reinvesting as much as possible) at some point. As far as the specifics of my trust are concerned, I can't be particularly helpful at this point because I'm not (yet) financially literate, and frankly, I don't have a crystal clear understanding of the specifics, however I'm very committed to educating myself. The trust is worth approximately $2.5 million (largely derived from stocks and bonds). I'm also inheriting a small house which will allow me to move out of my rather expensive apartment. So I understand that the details I've given are extremely vague, but I'm just looking for advice and input about my lifestyle and long-term financial goals. I am a very solitary person who spends the majority of my free time hiking and reading; I don't need much (although I'm sure my life will become slightly more complicated now) and I don't have a big circle (I'm hoping to avoid a "long-lost cousin knocking at the door" scenario by staying quiet). Are these goals at least within the realm of reason? I'm definitely going to be speaking with a credible wealth manager (I want to avoid a sales-y "financial planner" who works on commission), but other than that, I don't have a definitive plan, which is why I'm not making any big moves. Any input and advice is most welcome. Thank you for your time. [link] [comments]  |
| Simulation of buy-and-hold investing in the S&P500 for the last 148 years [charts] Posted: 08 Jun 2019 12:11 PM PDT I found this cool image which shows how many times your investment would have been multiplied by investing in the S&P500 including dividends and inflation for a period of 0-50 years. There are also lines which show the top and bottom 5% of returns for the periods. In the same post there was also this image, which shows the nominal investment returns the same way. I found it surprising that how risky even long-term investing is. Here's the blog post where they are from. [link] [comments]  |
| Posted: 08 Jun 2019 02:56 PM PDT I want to start out by saying that I am genuinely grateful and know that I am extraordinarily lucky. Serious question: I am thinking about throwing away my very successful career, quitting, and sailing the world while living off of my investment income. Am I insane to throw it away? Will I regret it? What am I not considering? The facts:
That said, I'm seriously thinking about walking away. I get "nervous," however, leaving such a lucrative business and wonder whether it would be a mistake that I'll regret. As I said, people would kill for my situation. On the other hand, will I regret not leaving? Don't I have more than enough? What's the point? Just writing this post helps a little, but I feel like I'll benefit from the gut check. Am I crazy to leave it behind to wander? Thanks. [link] [comments]  |
| Age to Choose for Retirement in Finance Tools Posted: 08 Jun 2019 02:52 PM PDT Hi. What's the proper age to set for retirement. Most tools assume 65, but from the looks of it most people in my industry (tech) seem to retire in their mid 30s-40s. For added context, I am a senior software engineer at one of the big companies in SF. I'm 27 and as of two years ago I've been maxing out my 401K, IRA and in total saving about 22% of my salary (which is over $175k). Curious if I should keep it at 65 or move it to 35 (atm I don't have enough to retire that early), but aspire to with side hustles etc. so my question is should I just assume 65 and if I can earlier than retire earlier or should I change everything (investment risk etc) to assume 35? What makes the most sense? Thank you [link] [comments]  |
| 24M Looking For Advice and Direction Posted: 08 Jun 2019 02:19 PM PDT Life Situation: -File Taxes Married/Joint with wife, no dependents, My wife and I are both 24. I am a Data Engineer(contractor) at a small company with no retirement benefits or insurance. Will probably be brought on full time within 2 years. Wife is a nurse with 3% match and good insurance. We live in one of the lowest LCOL areas in the nation. FIRE Progress: -Net worth = -$30,000 as of last month finance check. Looking to FIRE at minimum 50. I would like to FI more around 40 though. Gross Salary/Wages: -Me: $52,000 (1099) -Wife: $50,000 Yearly Savings Amounts: -Me: $6000 into Roth IRA at fidelity, $3600 into regular brokerage account at fidelity. -Wife: $3000 into work 401k. This includes her match rate. Current expenses: Provide breakdown and relevant details. Monthly: -$1200 Groceries/eating out -$775 Mortgage -$250 Utilities -$175 Cell Phones -$200 cable/internet -$215 Car Insurance -$100Misc. -$100 Mattress Payment (lol) -$1000 deposited into vacation/blow money account Total: $4015 Assets: -Car 1: $3,000 -Car2: $20,000 -House: $40,000 estimated equity -Emergency Fund: $5,000 -Cash: $12,000 -Roth IRA $4,000 -Brokerage Account $2,000 -401k $3,000 -Total= $89,000 Liabilities: -House: $129,000, 4.5% APR, 30 Year Fixed, bought from relative in 2018 for amount left on the mortgage, hence the equity. Specific Question(s) I feel like I am quite financially literate, but would like some opinions, comments, suggestions, etc. The main things I am seeking info and guidance on are
Thanks! Edit: On mobile, sorry for formatting issues. [link] [comments]  |
| Posted: 08 Jun 2019 07:59 AM PDT Is it because "prices" change? So it's better to purchase at many different prices rather than at only one price once a year? [link] [comments]  |
| Newbie to FI / FIRE - looking for advice and tips as I start my FI journey Posted: 08 Jun 2019 01:46 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]  |
| Long-term slight annualized % improvement over market average Posted: 08 Jun 2019 07:48 AM PDT I recently listened to ChooseFI's most recent podcast with Paul Merriman, discussing the 'Ultimate Buy and Hold Strategy.' Within the podcast, Paul discusses his approach to investing - which is entirely based on historical data & research, and focused on maximizing returns over the long term while minimizing unacceptable levels of risk. He notes that historically, over nearly any 40 year period in trading history, small cap value index funds will outperform the market average, albeit with potential for higher draw-down at certain times throughout the 40 year period. Seeing that the risk for a significant draw-down during the later years is too great, he outlines a particular target date fund that acts like a Vanguard TDF, but with higher exposure to the higher risk - higher reward assets during the early years. The results are pretty serious, with 40 year non-adjusted annualized returns reaching 12.13% historically for his more complex asset allocation, re-allocated monthly. He also has a simplified 2 asset allocation model that more slightly outperforms the market average over 40 years, which amounts to a a huge final dollar amount difference after the time period. His ' 2 Funds for Life - A simple strategy to maximize your retirement investments' video goes through the finer details of this, it is an hour long but very compelling. I am in the process of doing more research into this, but am generally very interested in the findings. Even if the goal is to retire before 40 years, some assets will inevitably be in the market that long. The only downside that jumps out immediately is that it is more complex, and allows more opportunities for emotion to rear its ugly head during the process and make the investor deviate from the course. But for the disciplined investor, this does seem to have real and very significant benefits over the long term. Has anyone else looked into this / are there other concerns that should be considered? [link] [comments]  |
| Estate planning between Europe and the USA Posted: 08 Jun 2019 03:55 AM PDT US citizen just moved to poland, got married and had a kid with a Polish citizen. Unfortunately I may meet my demise sooner than expected thanks to heart problems, even though I'm not that old and in good shape. So, didn't plan for this. I have about $1M in USD investments, retirement and non, beneficiary is my wife. 3 year salary payout via work life insurance. Should I get a will? More life insurance? Any tips? [link] [comments]  |
| Posted: 08 Jun 2019 02:03 PM PDT I've been wanting to start my FIRE process since last February when I started listening to Paula Pant's afford anything podcast. Since then, I've discovered more and more about FIRE and I really like the idea. My problem is: I need to be pretty to feel confident and have an assertive attitude. Feeling pretty entails: hair salon, manicure, outfits, shoes, accessories, makeup, skin care products, esthetic dentistry. Besides my special needs in the beauty dpt (the dentistry for ex, and my hair that is hard to deal with), just the basics of makeup and hair products require a good amount of money on the reg. As a woman on FIRE, do you have any tips to share? Edit: adding a clarification - my skin is troubled to the extent that I need at least the trio concealer, foundation and powder to look like I'm not sick and sleep deprived. No joke, my lovelies. [link] [comments]  |
| Feel Stuck and want to make right choice (29M) Posted: 08 Jun 2019 08:15 AM PDT
Hitting a breaking point and was hoping this sub could give me some advice... [link] [comments]  |
| The Truth About the Fire Movement (The Moneyguy Show) Posted: 08 Jun 2019 07:20 AM PDT I just came across this video this morning and thought I'd share. https://www.moneyguy.com/2019/06/fire-movement/ For anyone not familiar with the show, these guys are Financial Advisors who generally deal with more "traditional" financial planning. I found their take on FIRE to be pretty good and consistent with a lot of the viewpoints and advice given on this sub. The big takeaways:
All in all a good listen but probably not revolutionary for the regulars around here. Regardless, I always find it interesting to hear viewpoints of people talking about the movement, and found these guys perspective to be interesting since they are professionals in the financial planning industry. Also - I am in no way affiliated with this show for anyone wondering. [link] [comments]  |
| Posted: 07 Jun 2019 10:23 PM PDT I have a good friend, aged around 60. She is a janitor in multiple fast food restaurant for decades (namely, works 2+ shifts, 14 hours per day, 7 days per week.) and keeps complaining to me that her back hurts. Her husband already retired and thinks she should also retire. But she insists on working due to the money. Any advice on persuading her? Both she and her husband saved a lot and can live comfortably with a 0.2% withdrawal rate on their assets. Honestly, I think 1% is already too safe. (i.e. you should enjoy life way before that.) Edit: It should be closer to 0.3%. They are lean-fire in a country that has universal health care. Almost all expense are groceries. [link] [comments]  |
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