Financial Independence Daily FI discussion thread - August 02, 2019 |
- Daily FI discussion thread - August 02, 2019
- “The definition of “rich” is having passive income greater than your burn.”
- FI-ed today!
- How to buy VTSAX for FI
- Weekly FI Frugal Friday thread - August 02, 2019
- Best way to be setup with passive income for the future
- Should We Invest in Real Estate Instead of the Market Right Now?
- FI/RE Web Application
- Personal RE Calculator / Estimator
- An expensive, yet enlightening day
- Save for the end of the world
- 18 and Curious about FI/RE
| Daily FI discussion thread - August 02, 2019 Posted: 02 Aug 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]  |
| “The definition of “rich” is having passive income greater than your burn.” Posted: 02 Aug 2019 05:43 AM PDT "The definition of "rich" is having passive income greater than your burn. My dad and his wife receive about $50,000 a year from dividends, pension, and Social Security, and spend $40,000 a year. They are rich. I have a number of friends who earn between $1 million and $3 million, with several children in Manhattan private schools, an ex-wife, a home in the Hamptons, and a lifestyle fitting of a master of the universe. They spend most, if not all, of it. They are poor. By the time you're thirty, you should have a feel for what your burn is. Young people are 100 percent focused on their earnings. Adults also focus on their burn." From Scott Galloway, The Algebra of Happiness. I thought this was a great way to put it and belonged well in the FIRE philosophy. [link] [comments]  |
| Posted: 02 Aug 2019 02:16 PM PDT Wanted to celebrate with the community where I've been lurking for years. Massive thanks for the ongoing inspiration and discussions. So fortunate to have found you all. Background: - Me (33), wife (34), mother-in-law (55), daughter (1), future baby (probably in a few years?) - Job: I founded a tech business five years ago that's been steadily growing Income: - $125k salary (sole breadwinner) + sold some early equity to "take chips off the table" as they say and grow personal net worth [added + for clarity] Net worth: - $4.2M total - $2.5M in brokerage - $550k in retirement accounts - $850k house (paid off) - $300k in 529 college fund - Under $10k in checking for day-to-day expenses - $8k debt (car loan at low rate) Asset allocation: - 90/10 stonks/bonds - Among stonks, 80/20 VTSAX/VTIAX Current spending: ~$80k/year, in a MCOL to HCOL city. Few major indulgences Why not RE yet? I'm going to continue running the business for a little while longer, but working to step back responsibilities and hand it over to others. (I'll still retain my ownership stake even as I'll be ceding day-to-day control.) Maybe fully RE in a year or two? Withdrawal plan? I'm open to ideas here! It's not an immediate concern until I fully RE because the ongoing salary still pays the bills. Given our age I'm aiming for 3.5% safe withdrawal. Dividends strikes me as the simplest path, though not the cheapest. What's next? For RE, have a *ton* of things I'd like to do, and it's mostly a question of prioritization. Most are little or no expense: writing, get fluent in another language or two, gardening, volunteer more, bike more, get involved in local community/government stuff, travel and see old friends around the country more, volunteer on political campaigns, have plenty of free time to spend with my wife and daughter. My interests have always been super varied, so I'm excited to have time to do a bunch of different stuff rather than focusing the majority of my waking hours on one thing. The one big-fish expense I may treat myself to are season tickets for my local NBA team ($5-10k). But we'll see how the market does for the next few years. I hate corniness, but I really do feel incredibly lucky to have found this community and helped guide my thinking around money and time. We all know the adage that time is money. But it wasn't until finding the FIRE community that I began to realize it works in both directions. Money is time, too. Making it a priority to conserve time, and putting spending money in the context of spending your future time, was a revelation for me, and I'd guess the same for many of us here. Thank you, fellow FIRE lovers! [link] [comments]  |
| Posted: 02 Aug 2019 05:01 PM PDT I am looking to invest $5,000+ in VTSAX. I am able to max out my Roth IRA (SWHGX). I put 15% into my 401k with 5% company match (VFFVX). I have my $10,000 emergency fund. Do I invest in VTSAX through a Vanguard (general savings)? Or is it smarter to invest in a traditional IRA.?I would like to have access to this money if necessary but I do plan for it to be long-term savings. Also, should I reinvest dividends/CG? [link] [comments]  |
| Weekly FI Frugal Friday thread - August 02, 2019 Posted: 02 Aug 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]  |
| Best way to be setup with passive income for the future Posted: 02 Aug 2019 04:19 PM PDT Recently I came into a slight inheritance along with money I have made from day-trading it's all sitting in the bank right now aside from $100,000 I put into Cardone Capital as a trial run to see if the returns are enough or if it's the best investment for me I am looking for other places to put my money other than a savings account that are going to generate a return so I can be setup in the future. I live on about 35k a year which is the salary I pull from the business I own with my father. I made 143k last year from day trading and have currently made about 200k this year, Ideally I want to use half of my trading money to contribute to an investment and put the other half into my savings incase there is ever an emergency. I inherited 500k with another 500k coming in two years I am currently 23 and have 650k in my savings account I am comfortable investing 550k of it I'd like to not have to worry about working in the next 5-10 years I'm not well-versed in passive investments or "mail-box money" investments, What are some other options besides Cardone Capital to put my money into? [link] [comments]  |
| Should We Invest in Real Estate Instead of the Market Right Now? Posted: 02 Aug 2019 02:49 PM PDT I'd love this community's opinion on the investing implications of using $250,000 as a down payment to purchase roughly $1M of real estate in the greater Seattle area right now vs pushing those same funds back into other investments under today's market conditions. The wife and I have $250k that we need to invest. We already have about $250k in the market today (outside of the $250k we're trying to decide what to do with). The market seems like a terrible place to put money right now. P/E ratios are insane, everything is expensive, and the closest thing I can see to value is international index funds (which isn't saying much). Bonds seem like a terrible place to park money given the 1-3 year interest rate horizon (and I've always hated bonds anyway - they are a haven for those who don't have the stomach for the ups and downs of the market - not a maximized investment). We could plow this money back into the market, we could just keep sitting on a bunch of cash and wait for things to crash, we could sit on conservative investments (bonds, cds, etc), or we could use it as a down payment on a second home in the greater seattle area and rent out our current house. Rental market analysis suggests that we could rent for just more than our mortgage payment (which includes escrow, making our first house cash-flow positive if we don't have vacancy issues). Our mortgage on the new house would be the same as our mortgage is today, so we don't suffer cash flow wise. As the years go by and rental rates increase, we'll become even more cash-flow positive. Real estate in the greater Seattle area has been on a tear over the past 5 years and seems unlikely to slow significantly, even in an economic downturn (we only fell marginally during the 2008 recession). As more and more of the tech companies from San Francisco relocate here, and as Amazon and Microsoft continue to grow, housing is skyrocketing and when rentals hit the market they're snatched up in hours. Our goal is FIRE on a 20-year horizon (we're 35 today - want to retire at 55). I understand that increasing debt is antithetical to FIRE on the surface. However, bear with me - if you (conservatively, I believe) project real estate appreciation in Seattle at 5% per year over the next 10 years, and assume that we can stay cash-flow positive on the rental, then I'm actually making closer to 7-8% per year as my tenant pays down my primary mortgage, creating more equity...and when you project this 20 years out (35 today, we want to retire at 55) the concept of a paid-off rental with significant monthly cash flow as a diversified compliment to a market-based portfolio sounds like a great thing. I understand that it's not a very LIQUID investment, but it's diversified and dependable. TLDR; if you had $250,000 and lived in one of the hottest real estate markets in the world, would you consider leveraging yourself to purchase an investment property instead of pushing it into today's stock/bond market where returns and 5-10 year value are hard to find? [link] [comments]  |
| Posted: 02 Aug 2019 10:45 AM PDT Does anyone know of a more FI/RE focused web or mobile application? It seems like Mint and other banking apps just tell you how much you've spent, they don't offer constructive, actionable feedback on how to spend less and/or save more. I live in DC and I would want to know if I could save $10,000 a year if I moved to VA or MD or that I would be slapped with a 3% vehicle tax if I moved to VA. Beyond taxes I think more insight on localized costs would be helpful as well. For instance, how much I would save if I switched from my local Whole Foods to my local Trader Joe's or if I moved from a savings account with Bof A to Marcus? Then how much would that turn into over the course of a month/year/lifetime. Anyone know about any website or application that does something similar to this? [link] [comments]  |
| Personal RE Calculator / Estimator Posted: 01 Aug 2019 04:22 PM PDT Hello all, I'm a long time reddit lurker who has only recently come across this lovely group and the "FIRE" term. So it's a pleasure to meet you all; thank you kindly for all the backlogged advice and anecdotes I've been reading over the past week or so. They've put my goal into perspective. Straight down to business: I've only recently in the past year started saving for retirement, and I noticed that I really didn't like the setup of most "retirement calculators" I found online. So, I went ahead and made my own. It has inputs for:
Now, first the disclosure: please by the gods don't take this too seriously. This is intended be a very (VERY) rough outline of where you can expect to be over the next couple decades based off a few simple financial formulas. Also, since you have to estimate portfolio returns, there's a whole lot of factors to consider. So be conservative. Also, I had to break it down to a 'generic' version since my original was custom tweaked to my plans/needs. So while I've double checked it a couple times, there still may be a small error or two hiding under the surface. Also, this just considers fund portfolios, no other assets since those are a bit more straightforward. Now, with that said: here's the excel sheet. Orange cells are inputs, all the rest are calculations and outputs. http://s000.tinyupload.com/?file_id=91893955329643518109 Stay shiny, Ein Edit 1: I am not good at this file sharing business. Give me a minute. . . Edit 2: So I can't find a way to anonymously upload a file via Dropbox, so y'all are gonna have to settle with a tinyuploads link. [link] [comments]  |
| An expensive, yet enlightening day Posted: 01 Aug 2019 07:02 PM PDT So.. I'm old by most of your standards - 40. I don't have a job good enough to truly FIRE or a lifestyle (explanation shortly) that can reduce expenditures enough. But I have a plan to do what I can to retire earlier, and that's good enough for me, for now. Because of this, I bring you a small moment of perspective that hopefully helps someone down the very short lived road that is the Internet. Yesterday cost me $27,348.62. A debilitating sum of actual cash that I don't like to think about. Here's the breakdown: $2411.10 for one month of Pre-K for my 4.5 yr old triplets. The first payment of 12 this school year. As I sat and reflected on my recent expenditures, the duplex didn't bother me much, for obvious reasons. But the idea that the kids school would prevent me from doing more MF acquisitions was frustrating to put my already long plan further on hold. I don't want to do my plan, I want to be done now, but I haven't been able to earn more to do that. And then I had my realization.. I'm able to still buy these properties and pay for my kids school with no bad debt. And while I'm not where I want to be, I'm much better off than I thought I'd be at this age or many of my friends and peers. That's probably not Earth shattering, but it was enough to get me through my little down moment and I thought might be helpful to someone else in my shoes. [link] [comments]  |
| Posted: 01 Aug 2019 07:51 PM PDT So I have been pondering something that I feel a lot of people just shutout. I am really into FI and I have been very good about saving and investing. Currently I am 23 and have just over 22k net worth with a 72k annual income. My thoughts are with climate change, population growth, etc. do you really think life with be survivable after I have spent my early years grinding and saving? I understand no one can predict the future but I really want to know other peoples thoughts on saving for a time in life where maybe it might not be so great. Do you think it's still worth it? Do you believe the world will be shitty by 2050+ and saving so aggressively might not be the best option for someone of my age? [link] [comments]  |
| Posted: 01 Aug 2019 07:45 PM PDT Hi! I literally just discovered this FI/RE concept two days ago. Naturally, the next step is to go to Reddit lol So, I'm seeing that a lot of you guys are older than me and have a bit of experience with working towards the goal of financial independence. Is there anything you wish you had known or had done differently at 18? [link] [comments]  |
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