Financial Independence Working toward FIRE. Today we hit $1MM. |
- Working toward FIRE. Today we hit $1MM.
- FIREing while living with parents
- Children of FIRE parents - how did it affect your relationship with money?
- We met as broke teenagers. After over a decade of shared work & dreams, we celebrated financial independence day yesterday.
- FIRE with investment properties - it's all timing (some unsolicited advice)
- Daily FI discussion thread - July 05, 2019
- Weekly FI Frugal Friday thread - July 05, 2019
- Anyone keep their emergency fund in bonds?
- Is there sense or benefit in making a shell company while pursuing FIRE?
- Sidegiggers, am I overthinking liability when trying to come up with side businesses?
- Service Credit Purchase and FI
- Why do posts about business or real estate get downvoted so much?
- Finally starting, albeit slowly
| Working toward FIRE. Today we hit $1MM. Posted: 05 Jul 2019 07:42 AM PDT This isn't really the kind of thing that you can share with friends and family without the risk of stoking jealousy or worse. So I'm posting here just so I can tell someone else and maybe celebrate it just a bit. Cash: 130k HSA: 20k SEP: 250k Roth: 180k Rental properties equity: 240k Home equity: 200k Figure I'm about halfway to FI. I like my work so really not seeking RE. Maybe "cut back early". But that doesn't make a cool acronym. [link] [comments]  |
| FIREing while living with parents Posted: 05 Jul 2019 12:03 PM PDT Hello all, I have posted before, but this thread really changed my life. I started tracking my net worth and being intentional instead of being just frugal (ironically this forum helped me spend more). At the same time, I don't see people talking about FIREing beyond themselves and their SOs. I am from a traditional background and I live with my parents which I love. It was hard to get them to be mindful of their spending, they don't make much ($30k a year), but with a paid off home they were saving nothing, in their early 60s and had no retirement plan. I helped them open up Roth IRAs and they now have about $45k in investments over the last 2-3 years. My mom would spend all her income (she raised 5 kids and managed to do it debt free, and was just used to spending all her money). Their home is a 5 bedroom and worth roughly 270k. I helped convince them to downsize (sell this year) and get a duplex and rent out the other room for income. No one uses the other rooms and the property and utility bills were not justifiable. My mom wants to rent the home out and my dad wants to sell so we will see what happens (I am in the sell camp). My mom isn't going to work for long due to long years of factory working and my dad is disabled so this will help give them income and help them qualify for subsidies in a non medicaid expansion state. It's amazing because my parents used to always look to me for money and now they can see retirement being easier and having a path which has taken so much pressure off of me. Back when I first started working they expected 3-5k a month from me and thought I was greedy, but now they understand. My NW is $300k, I am 25 and I don't pay rent but I help my parents with $1-1,500 which I earmark for them to only spend on bills or their investments. I love the fact that my money I would rent goes to my parents and it is helping them build wealth. Otherwise my car note is $650/month, I have a monthly fun budget of $550/month and other bills (gas, insurance) are about $125/month. So I save a ton of money and have been able to see my net worth grow a lot. I also make good money. I make about $220k all in with my job, side hustles (podcast and I do some personal finance and investing help for some people)- split being 80% of that being W-2. I plan to get a rental property with my parents or myself this year or next year and my goal is to get to $1MM by 30 and either pursue my own thing or work a 9-5 because currently I work 60-70 hours a week on a good week. The most gratifying thing isn't even being FI myself, it is empowering my parents to now live a life of intentionality and not complaining about bills or struggling. Their net worth now matches mine and they came to this country as refugees never making above minimum wage. Compound interest will take care of me even if I earn half of what I do now, so I am just thankful that I think my parents will be okay in retirement with just a little bit of help from me! [link] [comments]  |
| Children of FIRE parents - how did it affect your relationship with money? Posted: 05 Jul 2019 10:47 AM PDT I know this might be a long shot, but... FIRE is not a new concept -- anyone here was raised by FIRE parents (or maybe has second hand experience)? What was different compared to your peers with working parents? Do you treat money different as a result? [link] [comments]  |
| Posted: 05 Jul 2019 03:51 PM PDT When we met, we didn't even know what FI was, and we certainly weren't anywhere close to it. Neither of us had a car, and some of our earliest "dates" together were riding our bikes to the grocery store (on one memorable occasion, the grocery bag got tangled against the bike wheel, causing a gallon of milk to rupture all over the street). For our one month anniversary, we were so excited to eat out and it truly felt like a special occasion spending $25. We graduated into the middle of the Great Recession and struggled to find jobs for several months--I wondered if we would ever be able to make it on our own even though we had busted our butts in school for four years. For months, he lived in my parents basement while I finished up school several hours away, living in a closet-sized apartment with a shared bathroom. What came next was a series of mad dashes towards adulthood--first jobs, marriage, moving to an apartment together, fostering too many dogs in said apartment, buying our first house (a 1000 sq ft humble 1960s brick bungalow complete with carport & yard, in which we still reside today), adopting a long-time foster who wouldn't find a home anywhere else, and finally, most relevant to this, discovering Mr. Money Mustache. After this flurry of activity, there were some trying times--bad bosses, bad investments, bad house maintenance decisions, not to mention that types of changes we all see as we grow older, losing grandparents, friends, and pets. It was hard to imagine that all our hard work and forbearance would truly amount to financial independence. We dreamed of a day when we could dedicate ourselves full-time to helping animals instead of having to work for money, but I often worried myself over whether this was a cop out--was it really the right decision to defer what I cared about in the present, even if I thought in the long-run this would enable me to help more? What if that far-off distant idea never did materialize? What if my true dreams got swallowed up by a pursuit of greater and greater wealth or professional success? I don't have all the answers today--I've learned that as you progress on the FI journey, having money is not the silver bullet and magical rainbow of certainty I thought it may be when I first started. Rather, each step or stage, you face equally challenging decisions and dark nights of the soul. At this stage, I wonder if I will be fulfilled and motivated without work and coworkers and the incentive of a paycheck. I wonder if I will feel socially isolated if I no longer work. And, finally, I consider whether I could have eased off the financial gas pedal 3, 4, 5 years ago and focused more on building quality relationships in my life--the benefit of hindsight. In fact, if there's anything I've learned worth sharing it is exactly that: if I could do it over again, I would let up on myself just a little, allow myself the stray indulgence of going to a restaurant with friends that feels a little pricey or not being afraid to spend an extra vacation day to prolong time with family. It's okay--you'll still get there, and it really won't matter if it's 2 weeks or three months later as a result. [link] [comments]  |
| FIRE with investment properties - it's all timing (some unsolicited advice) Posted: 05 Jul 2019 09:52 AM PDT My friends always talk about wanting to do what I did (past tense - since I no longer "do it"). When I was 26, I started off buying a 4 bedroom house in a desirable rental market (North NJ) as my primary residence. I rented rooms out to my friends and begin declaring that income on my taxes. Since I had no overhead, I was able to squirrel money away. When the market crashed and cash was king in 2008-2010, I bought many bank owned properties, fixed them up, and rented them out in LCOL area (Ohio). I bought 3/1 slab ranches in good school districts for $25-75k cash. Renovated, and rented them out for a few years, then sold these for $100k ish each. I took the proceeds and put down this cash on the worst properties (in strong rental markets) that I could find near me in North NJ (which I didn't have the cash for when I started). These properties are closer to home to manage, and have higher ceiling/appreciation. I was able to get mortgages b/c I was declaring my rental income for over a decade at this point, so the mortgage underwriters gave me "credit" for 80-90% of fair market value as credit towards my income. Nothing ground breaking here, but demonstrates that you can't have you cake and eat it too. But!! It was all timing. I haven't bought a new rental property in many years. At 38 (one wife and one kid later), I have about 3M in real estate leveraged by 1.5M in mortgages plus $500k in stocks/retirement accounts. The rental properties generate new proceeds of $60k/year. It was right place right time. If you'd like to real estate FIRE, I suggest you start networking to get a shot at properties that are not on the market. Remember, if it's on the market, you're not getting a great deal...you are the highest bidder on the market. Hit home runs instead of trying to hit a bunch of singles. Singles don't leave you with a cushion/buffer should issues arise. Be patient, but be prepared to bounce - which means being confident in your assessment of the local markets. And remember, I never set out to be a real estate investor, but when I heard that institutional investors were starting to buy single family homes, I decided to take a deeper dive into rentals. The landlording part is SUPER simple. The tenants are your customers:
Hope this post provided you with some anecdotal perspective on real estate investing and just like anything: TIMING is key. [link] [comments]  |
| Daily FI discussion thread - July 05, 2019 Posted: 05 Jul 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]  |
| Weekly FI Frugal Friday thread - July 05, 2019 Posted: 05 Jul 2019 01:09 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]  |
| Anyone keep their emergency fund in bonds? Posted: 05 Jul 2019 01:33 PM PDT Hey there! I know that emergency funds are supposed to be in a HYSA or similar, but I'm wondering if at some point of net worth it makes sense to shift your emergency fund into something like VCADX (CA only). I've got a lot of liquid assets and a year long emergency fund (both for myself and my rental properties), and I'm tempted to move all my emergency fund $$$ to VCADX which is tax free and relatively low risk. Thoughts? [link] [comments]  |
| Is there sense or benefit in making a shell company while pursuing FIRE? Posted: 04 Jul 2019 10:44 PM PDT I've had fleeting glimpses that there might be some benefit to having a one-person company to manage my personal finances. Something that could reside in a low-tax state, lower my personal income to a low-tax-bracket level, and then pay me back after I retire, to help smooth out my tax expenses. Does that make any sense? Has anyone tried it? What pitfalls lie along that path? Thanks! [link] [comments]  |
| Sidegiggers, am I overthinking liability when trying to come up with side businesses? Posted: 05 Jul 2019 05:36 AM PDT We're chugging along towards Coast FIRE, and will eventually make it beyond that. But, side gigs could speed that up significantly. Whenever I come up with an idea for a business, one of the first things I want to do is grab an LLC. Is this overkill? Is it especially overkill if the business idea is something like excel and data management consulting? On that note, I tend to branch out before I focus. Has anyone else here created an LLC for the purpose of exploring various business ideas safely? Things I've thought about vary as widely as dropshipping to financial coaching. Or, is this an otherwise important step that's clouding my mind too early? 😅 TL:DR Is it ever too early to have an LLC for experimental side businesses? Especially if the goal is to sample various gigs until finding one that works for us and helps speed along FIRE. [link] [comments]  |
| Service Credit Purchase and FI Posted: 04 Jul 2019 08:09 PM PDT Hello, I'm curious of the FI community's opinion on pensions and service credit purchases. TL:DR; Right now, I have the option to purchase 2.8 years of service credit for $22,000 and am interested in evaluating whether or not the option is worth while, particularly from a FIRE perspective and my current age. It will increase my retirement income by 11%, or roughly $4,200 per year (in today's dollars), at age 52. Should I go for it? Is it worth it to vest early? Could I likely retire any earlier than 52 because of the purchase? Am I better off just investing the money independently (or putting it towards my down payment fund)? Additional details: I'm 26 years old and just started working full time at a gov't job in California (prior to that I worked as a temp, hence my ability to purchase those 2.8 years). My pension formula is 1% @ 52 and trends towards 2.5% max at 67 (the formula used to be 2% @ 55 before I started! RIP). Vesting occurs at 5 years of service. Eligible to retire based on "rule of 70"--age of retire + years service must exceed 70--but this won't effect me as I started at such a young age. Have $0 debt, net worth of about $250,000, present day income of ~$100,000/yr, saving rate of about 60%. I would not finance the purchase, but rather buy it outright by the end of the year. I have the cash and ability to make this sort of decision, but very limited perspective on pensions. Up until getting this job, all of my FIRE calculations have not included pension income. The purchase would sting, as it basically would all be coming out of my "down payment" fund and delay my goal of home ownership by 6-12 months. For the sake of discussion, assume I desire to retire at the earliest possible age (1% @ 52) and have an income equivalent to the max pensionable compensation ($150,000 in 2019 dollars). My "rule of 70" will be ~77. All numbers below based on 2019 dollars. The increase in income at 52 with the service credit purchase would be an additional 11% (benefit could max out at 18% if retire at 67). Assuming income of $150,000 in 2019 dollars, that's $42,000-$38,000 = an additional $4,000 a year in income in retirement. Breakeven would occur after 5.2 years, or around my 58th birthday (32 years from now!). Assuming I live to be 80, the service credit purchase would yield me an additional $100,000 in my lifetime (payback of 4.3x).My effective additional income per year (=lifetime benefit minus purchase price/remaining years life) would be about $3,500 per year. Side note: My spreadsheet calcs out that for the greatest marginal benefit, just accounting for the service credit purchase, would be if I retired at 62 years of age (1.9% age factor) and would pay itself over 5.9x. In general, if I retire any later, lifetime pension benefit increases up to age of 65, where it maxes out due to me croaking before realizing any additional marginal benefit from retiring later. I am not sure the best way to compare today's dollars vs future dollars without making wild assumptions about inflation and potential market growth. I am also skeptical that California pensions will even EXIST in 30 years, let alone pay out promised amounts. Assume I invest $22,000 today, receive a better-than-risk-free-rate-of-return of 4% (after capital gains taxes and maybe inflation), that $22,000 today will be worth $62,000 when I'm 52. Assuming it becomes cash at that point, if I withdraw 4% from that balance at 52 it will increase my income in retirement by $2,500 until 80. Compared to the effective additional income of the service credit of $3,500, the purchase could look promising. Of course, assumptions blow up if I assume I could make a way greater rate of return over 30 years, and if the pension will even exist in the future. So many questions, so many uncertain scenarios... [link] [comments]  |
| Why do posts about business or real estate get downvoted so much? Posted: 05 Jul 2019 06:00 AM PDT I would like to understand the culture of this sub because it's not very clear. I made the almost identical posts on here and on the fatfire sub about buying a business, it got to the top of the page there, and downvoted insanely on here. I see this happening with a lot other posts on this sub. I've come across a several helpful posts in the past week involving real estate and business ownership that are all downvoted. Is the point of this sub to get to FI through a day job and nothing else? It's kind of counter intuitive to pursue financial freedom then downvote any ideas suggesting ways to achieve it. Can someone explain what the mentality of this sub is? [link] [comments]  |
| Finally starting, albeit slowly Posted: 05 Jul 2019 07:07 AM PDT I'm 18 and haven't even started a career yet, but I've already got the idea that I want to reach financial independence and retire early. I'm starting college in a month and a half so I won't have much income to be saving. However, since January, I've been working full time only making $12.40/hr and wasting most of it tbh. Hoping to make good saving habits, I just put 40% of this paycheck into index funds, only like 2 shares tho lol. It's not much but over time I hope to add to it, and one day maybe I'll look back and be glad I started, or it'll all go to hell. Who knows [link] [comments]  |
| You are subscribed to email updates from financial independence / early retirement. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment