Financial Independence Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - June 17, 2019 |
- Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - June 17, 2019
- Daily FI discussion thread - June 17, 2019
- I have the money to purchase a home - but afraid to pull the trigger
- For those of you who have FIRED for some time, how does it meet your expectations?
- Sanity Checks
- FIRE Chart Based on Annual Income and Spending
- Weekly FI Monday Milestone thread - June 17, 2019
- Buy a Lake Cabin? Unique situation.
- Few questions for those who FIRE via property investing rather than markets/ETF
- Renting your home and buying land to own
- Sold Business. Sitting on $500k
- Best banks for students in Canada + Savings tips
- Specific funds in HSA to maximize tax advantage?
- Advice on the best country to FIRE to ?
- Buying vs Renting + Investing
- Does the fear of the traditional 4% rule make financial independence nearly impossible for many people?
- FIRE advice for young people in developing country?
| Posted: 16 Jun 2019 11:10 PM PDT Need help applying broader FIRE principles to your own situation? We're here for you! Post your detailed personal "case study" and ask as many questions as you like, or help others who've done the same. Not sure if your questions pertain? Post them anyway…you might be surprised. It'll be helpful to use our suggested format. Simply copy/paste/fill in/etc. But since everybody's situation is different, feel free to tailor your layout to your needs. -Introduce yourself -Age / Industry / Location -General goals -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. -Debt breakdown -Health concerns -Family: current situation / future plans / special needs / elderly parents -Other info -Questions? [link] [comments]  |
| Daily FI discussion thread - June 17, 2019 Posted: 17 Jun 2019 01:11 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]  |
| I have the money to purchase a home - but afraid to pull the trigger Posted: 17 Jun 2019 05:03 AM PDT Here are my stats: 26 years old. 401k - 90k, HSA - 10k, IRA - 30k, Brokerage - 70k, Emergency fund - 13k (building up to 20k) I save a lot of money, but I haven't really had a short term goal until recently. For about a year, I've been contemplating purchasing a home. I'm looking at about 50k for a down payment. Assuming the market remains strong within the next few weeks, I'll liquidate most of my brokerage account to get this money + extra for closing fees. But here's the thing - that money gives me security. It's nice to know that it's there if I need it. Even though by the numbers I believe I'm prepared to purchase a home, it's still a scary prospect. It also feels like I'm taking a huge hit to my FIRE goals, even though the money will still exist, just in a different form. Has anyone else experienced this? [link] [comments]  |
| For those of you who have FIRED for some time, how does it meet your expectations? Posted: 17 Jun 2019 12:50 PM PDT How long have you been retired? Also, are you spending more or less than predicted? [link] [comments]  |
| Posted: 16 Jun 2019 05:21 PM PDT Hello! My wife and I currently have $200k in taxable investments (VTSAX), and $170k in IRAs/401(k)s. We're 36 and 35, and would like to retire in 12 years. For example purposes, say we want to withdraw $80k / year once we retire. I'm getting inconsistent results when I try to figure out how much we'll need to have in 12 years (so we know how much we need to invest per month), so I'd appreciate if you could tell me where I'm going wrong. Simple Calculation 4% rule: $80,000 * 25 = $2,000,000 required to retire This shows, to get to $2,000,000 in 12 years, we have to invest $7,700/mo for 12 years (I entered 7% return - 3% inflation = 4% return): Slightly Less Simple Calculation We need our VTSAX withdrawals to last from my age 48 till 59.5 = 11.5 years (for simplicity, assume we don't plan to withdraw from retirement accounts early). So, working backwards, this shows if we withdraw $6,666/mo ($80k / year) in today's dollars and we have $742k in VTSAX, it'll last 11.5 years (I entered 7% return - 3% inflation = 4% return): Is that right though? If we say a 7% return rate, but take out 3% for inflation, does that mean we'll be withdrawing $80k / year in today's dollars, i.e. we'll actually increase the withdrawals each year by inflation, assuming that's 3% each year? If that is correct, then to get $742k in VTSAX, we need to invest $2,300/mo for the next 12 years into VTSAX, assuming a 4% return rate (7% return - 3% inflation): So that gets us to age 59.5. Then we'll tap retirement accounts. Now, to see how long our retirement accounts will last, we'll invest the remaining amount from the Simple Calculation to retirement accounts. That said that we need to invest $7,700/mo, so $7,700 - $2,300 to VTSAX = $5,400/mo should go to retirement accounts. If we do that for 12 years (age 36 to 48), we'll have $1,263,000 in retirement accounts: Then that sits another 12 years (age 48 to 59.5), and becomes $2,000,000: This shows $2,000,000 with an $80k / year (today's dollars) withdrawal rate would last *102 years*: I'm not ruling it out, but I don't think we'll live to 162 years old. So my first question is do these calculations make sense regarding inflation, i.e. if we assume a 7% return rate and subtract 3% for inflation, and use 4% as the return rate in these calculators, does that mean each year we'd withdraw $80k per year *in today's dollars* (meaning we'll actually withdraw $80k year 1, then 80*1.03 = $82.4k year 2, etc)? The second question is why does a $7,700/mo investment until ER in 12 years, as the 4% rule seems to suggest we need, seem like overkill? I know this doesn't take into account taxes, and I know I shouldn't count on 7%, but I'd be fine if our retirement accounts lasted ~30 years, not 102 years. Or it's entirely possible some of my calculations are wrong. I just feel like I'm going in circles here. Thank you! Edit: Ok, 7% doesn't come from the 4% rule. Got it. These aren't the final numbers I'll be using for all this. I'll re-run calculations with different return rates to see how different scenarios play out. I'm more concerned that my logic here is right, regardless of the return rate variable. [link] [comments]  |
| FIRE Chart Based on Annual Income and Spending Posted: 16 Jun 2019 05:47 PM PDT This has probably been posted before but just stumbled across this and found it interesting. A chart comparing annual income and annual spending, and the matrix is how many years they expect it to take to FIRE https://www.marketwatch.com/story/the-path-to-financial-independence-and-retiring-early-in-one-simple-chart-2018-12-10?link=sfmw_fb&fbclid=IwAR2iIu38FFDwZY7xfxgByBuArd9wTJwev-QrhhvkEP6Os6VKAQTdaqYO3s4 [link] [comments]  |
| Weekly FI Monday Milestone thread - June 17, 2019 Posted: 17 Jun 2019 01:11 AM PDT Please use this thread to post your milestones, humblebrags and status updates 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! 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]  |
| Buy a Lake Cabin? Unique situation. Posted: 17 Jun 2019 03:13 PM PDT Been lurking for a few months. Made a new account just to post this. One of mine and my wife's goals is to own a lake place someday. There is a very specific lake we want to be on, in a very specific location that only has around 15 cabins. Just found out that one of these cabins will soon be listed for sale, and I know the owners. We visited them yesterday. They'd love to sell to us, and are willing to not use a realtor (I have a background in real estate, so can draw up all docs). We would be buying it together with two other family members, and would own the cabin in an LLC (each couple owns 50%). The other couple is very well off, and would pay cash for the cabin. Our share would be financed privately with them at the IRS's AFR (around 2.7%). They've also agreed to roll my student loan debt into this new loan to help consolidate our debt situation and give us a better interest rate. The monthly payment under this proposed loan would work in our budget. Total loan would be around $180k. We did not plan to buy a cabin for quite some time. We just bought a new house last year, and have a mortgage of around $330k (house is worth $500k+). Besides mortgage and student loan ($30k), we have no other debt. I make around $140k in a LCOL area. My wife stays home. We have roughly 80k in investments, $15k in liquid emergency fund. Our current savings rate is around 12% Roth IRA/401(k) mix. I'll be able to max out both in 2 years. I am a professional working for a large, privately-held company, and my salary will likely increase to high 100's within 5 years. My wife will likely go back to work after kids get to school age. Here's my question: since this opportunity may never come around again, and since the financing arrangement is favorable to us, and since we can technically afford the monthly payment without sacrificing our monthly savings goals, should we buy the cabin? [link] [comments]  |
| Few questions for those who FIRE via property investing rather than markets/ETF Posted: 17 Jun 2019 03:03 PM PDT Just curious as to your thought process and opinions as to why it's preferable, for you, to invest in property rather than the presumably easier option of whacking your cash into ETFs and letting it ride long term. Obviously nothing is guaranteed in any option. But, property does seem (to me) to carry more uncertainty, risk and effort. Both options, in general terms, face market cycles out of your control. But on top of that, property seems to demand ongoing work of sourcing tenants, managing the tenant you get, managing (and potentially paying for) the maintenance of property, and likely taxes, rates, fees and utilities that may not be able to be passed on. So, I'm curious if those who prefer property, believe that superior income opportunities can be found via this approach, despite the additional risks and effort. Another question: does the fact that there are two (at least) potential sources of income/wealth - rent, and capital growth - influence your preference? I'm genuinely curious, just looking for opinions. As for me, i am roughly equally split between the stock market, and commercial/office property. I now have some additional cash and working through my options on what's best to do with it, hence this post. Thanks all [link] [comments]  |
| Renting your home and buying land to own Posted: 17 Jun 2019 12:04 PM PDT Does it go against the FIRE "code" to buy some land as a potential investment/getaway? I don't plan on buying a house and am perfectly content renting after reading countless articles and doing spreadsheets of math computing it doesn't make financial sense to buy a house. However, I'm thinking about purchasing a few acres in a rural mountain area as a camping getaway and potentially future retirement cabin location. Land is relatively maintenance free and doesn't require the attention and financial input regularly as a house does. Does this make sense if I can pay cash for it or should I skip this idea and avoid buying land? [link] [comments]  |
| Sold Business. Sitting on $500k Posted: 17 Jun 2019 03:16 PM PDT Throw away account for legal reasons. As title mentions, I sold my business and I have roughly $500k. $0 debt. Car paid off. For the past couple of years I've focused on the business and never had too much time to learn more about investing. I understand the basics though. I've been looking at purchasing a home but the kind I want I can't afford, so I continue to rent at $3,000/month. 31 years young, no kids, married- not planning on kids either. I'm slightly aware of index funds and the ones discussed here often i.e. Vanguard etc but the excitement isn't there. Now that I have roughly $500K I'm wondering what the play should be. A few things I should mention. I am very risk tolerant. Thinking about putting $30k in AliBaba stock as I think it will be the next Amazon in the next 3-7 years. My perspective comes from knowing and understanding supply chain and consumer goods (that's what my previous business was) - I'm comfortable making that bet. I have no retirement accounts lined up and from what I read, it seems like the safe and slow way. [link] [comments]  |
| Best banks for students in Canada + Savings tips Posted: 17 Jun 2019 02:10 PM PDT I live in Canada, and I have a bank account at RBC (I'm a student, 22y), I would like to know which Canadian banks are the best for students and do you guys have tips on how can I save at least 40% to 50% of my paycheck. Thanks [link] [comments]  |
| Specific funds in HSA to maximize tax advantage? Posted: 17 Jun 2019 01:38 PM PDT Should one be utilizing an HSA account for specific types of funds? Funds that throw off more dividends? Or funds that have higher taxes? I'm not looking to spend this money on healthcare anytime soon so this is with an eye towards diversifying the portfolio. Here are some of my options: VDAIX, VFIAX, VSMAX, VTMGX, VEMAX, VFSTX, VBLTX, VSMGX . [link] [comments]  |
| Advice on the best country to FIRE to ? Posted: 17 Jun 2019 07:52 AM PDT 34yo private banker (Wealth manager) in Switzerland, I am planning to FIRE in 3/5 years. Actual inc. 150K$, 100K savings (bonds) + 1,2mio Real estate (12 rented flats), and 900K debt on it. Debt is decreasing at a 50k annual rate. You will noticed that the FIRE ambition is pretty early, and that will be done by selling the real estate, resulting to a total saving of approx. 450 to 550K. The question will be more "where" than "when" or "how much". My requirements on the future country are, in order of importance :
Of course a perfect mix of these requirements would be a good approach. Starting a pleasant and non stressful project in this second life part, is a growing idea. My ideals and dreams are various, and always related with a "spiritual" or "meaningful" project after a 15yrs meaningless career, either around spirituality (meditation, yoga, etc) psychedelics or therapy (ayahuasca, retreat center, etc). My requirements above and ideals could match with Peru, Thailand, Philippines, South Africa, Argentina. What is your experience, what is your advice. Thx [link] [comments]  |
| Posted: 17 Jun 2019 12:54 PM PDT Hello, I am aware this subject is beaten to death but I would still welcome advices regarding my situation. My wife and I have been renting the same appartment for the past 7 years. We are very happy about it. The appartment is alright (fairly cheaply (3 1/2) made like any newly built condo) but the location is the best there is in the whole city. When we moved in, it was deserted with nothing around so we got a decent rent price. However, in the past 5 years, it just went from nothing to one of the most ''in'' suburb in the city. Now it's just amazing and I don't see myself living anywhere else. Moreover, since our condo is not new anymore (>5 years), the rent is more or less fixed at 2% every year which is great. Renting the exact same apartment next door would cost us 200$ more every month. Anyway, my owner decided to sell the condo. Where I live, the only way to make a tenant leave his renting appartment is if the owner himself or a parent wants to live in it. Therefore, if the new owner buys it for himself (and not as an investment like my current owner), I will have to leave on July 2020. Unless I buy it... We could buy it easily but since we invest everything, it would require us to take 70K from our TFSA as a cash down and get a mortgage. Including the taxes and condo fees, I expect to pay 1000$ more monthly then what I am paying right now as a renter. Also, right now, I feel the price of the condo is very inflated because of the location and I don't expect the ROI to be as great as if I bought it 5 years ago. On the other hand, I can try to find another appartment in the same suburb but I expect to pay at least 200$ more per month if not more. I tried looking for advices but depending who I ask, the opinions diverge greatly. TLDR; So my question is this one? Our goal is to retire as soon as possible and I am wondering which option would get us there faster. Am I missing out by not buying the condo? I would rather keep renting until retirement and investing everything else but would consider buying if it makes more sense financially. If it helps, we are both 35 and plan to retire between 50 and 55. Edit: This house would not be the house where we retire in since we are planning to move back to another country on retirement. Thanks [link] [comments]  |
| Posted: 17 Jun 2019 02:16 PM PDT The financial media is telling us in an upcoming era of low bond and stock returns the 4% rule is dead. It has been replaced by the 2% rule. As a result, if you believe in the new 2% rule people will have to save twice as much money before they can feel like they are financially independent. And because the 4% rule was designed for a 30-year retirement anyone expecting to stop working full time in their 40s and 50s will have to maybe even consider a 1.5% rule before they will feel comfortable. Your thoughts about the death of the 4% rule and reaching financial independence. [link] [comments]  |
| FIRE advice for young people in developing country? Posted: 17 Jun 2019 06:47 AM PDT I have been lurking in this sub for more than a year now, reading up on your advice, and learning about FIRE. I am intending to put my money into Vanguard, but after having saved up my first $3,000, I started to feel overwhelmed. I'm 20, going to college, and living with my parents (it's the norm around here) and it takes me 9 months to save up that amount while the only expenses are snacks and phone bill. With all that said, I don't think that it would be impossible for me to achieve FIRE. The cost of living is cheaper around here so I would need only around $250,000 to retire comfortably. Is there any thing that people from a second-world country should consider when trying out FIRE? [link] [comments]  |
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