Financial Independence Daily FI discussion thread - September 25, 2019 |
- Daily FI discussion thread - September 25, 2019
- “The youngest people entering the workforce don’t remember a time when people weren’t always reachable, so they don’t se why they would need to sit in an office to work“
- Military FIRE (enlisted perspective)
- FI, retirement, and personal identity
- Weekly Self-Promotion Thread - September 25, 2019
| Daily FI discussion thread - September 25, 2019 Posted: 25 Sep 2019 01:06 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]  |
| Posted: 25 Sep 2019 04:32 AM PDT https://www.nytimes.com/2019/09/17/style/generation-z-millennials-work-life-balance.html Thought this was a great read and fitting for our community. Flexibility is what we all seek by choosing FI. Hopefully the movement towards flexibility continues to trickle down into more lines of business. I find myself not wanting to be on the "partner track" so I can maintain flexibility Have you seen a shift in your employer's flexibility, or did you have to change companies to obtain it? Did you take less? Did you get a pay raise? If you didn't change companies, did you have to ask for flexibility? Do you feel comfortable negotiating flexibility in an interview? [link] [comments]  |
| Military FIRE (enlisted perspective) Posted: 25 Sep 2019 04:24 AM PDT First, let me preface this by saying that this post is merely about the FIRE benefits of military service. I understand that you will have your own personal thoughts on military service, politics, foreign relations, etc…but those topics are best suited for other subreddits. One thing I have noticed with most Military FIRE blogs and r/financialindependence posts is that they are written by, and geared towards, officers. For those that are not familiar with the military construct there are Enlisted members and Officers. Officers are a small portion of the military and get paid much more than the enlisted folks, due to some prior knowledge or accomplishments. The overwhelming majority of military members are enlisted. I've been enlisted for 12 years so I can fully relate. I feel like there is a misunderstanding in society and the thought is that the military is underpaid. I have read countless news stories about fast food workers earning more than enlisted military members, but they are ignoring all of the pay allowances that we get (more on that later). This post is meant to highlight why I believe the military is unmatched in it's ability to steer someone down the path to FIRE. I spent 4.5 years as a Drill Instructor at bootcamp and would tell the new members in my flights that this is their chance to achieve the American Dream. Once you enlist in the military it doesn't matter your race, religion, socio-economic upbringing, education level, etc… It's an even playing field and 20 years later you are set for life. What are the major topics that get discussed in this subreddit and occupy your mind when you get time to think? First is taxes! Let's take me for example. I'm an enlisted guy that has been in for 12 years. That means for my rank, my base pay is $4,800. So you are thinking, $50,000 a year…that's not too bad, but far from enough to invest a large amount. What the general public fails to understand is that is our only taxed income. I'm a family of 3 and only get taxed as though I make $4,800 a month. Now here is the tax advantaged part of the military. I also get "allowances" which are not taxed. I'm overseas and get my $1,300 rent paid (OHA), $350 a month for Cost of Living Allowance (COLA), $350 for food (BAS) and $700 for utilities. All told I make $90,000 a year and get taxed on only $57,600. Let's take it one step further. Since I am in the military my state of residence does not require me to pay state taxes and reimburses me everything I pay in when I file my taxes. We all know the benefits of tax advantaged investing and it is no different for us. In 2018 I maxed out my 401K. That means that instead of being taxed on my $4,800 base pay, I was only being taxed on $3,300 a month since I invested $1,500. Now it came time to file my taxes. I'm a family of 3 making only "$36,000" a year. Throughout 2018 about $5,000 were taken out of my paycheck for State and all the various Federal taxes. When I filed my taxes, given the tax breaks for my "low income" and all of my State taxes returned back to me, I got a tax refund of $5,000. All told, I earned $90,000 and paid zero taxes. I have yet to find a profession that can match those kinds of tax advantages. What else gets talked about in this subreddit? College expenses! Whether it is your own student loans or figuring out how to pay for your children's college, it is a serious FIRE hurdle. As a military member I do not have to worry about either of those. Each year I receive $4,500 to pay for college classes. If earning a degree is important to you, you can do it and incur no debt. Another great option is the ability to transfer your GI Bill to your dependents. I have a young son and have already transferred my GI Bill to him. What this means is that when he goes to college the military will pay for all the college expenses for 4 years and pay him a monthly housing stipend. Not having the burden of college expenses is a great way to speed up the FIRE process. It seems a large portion of the users on this subreddit are from America. This naturally drives the conversation about healthcare. (I'm currently stationed in Europe, you guys do it right!). While in the military you are covered under what is called TRICARE. Essentially it is the health insurance plan most Department of Defense employees and their family members fall under. While in the military the base you are at will have most of the facilities you need for any medical treatment, but if not you will be referred off base. You pay no copays and no monthly fees, it is all free! Additionally, after you retire you will be enrolled in TRICARE Prime. The cost of healthcare for you and your family will be a grand total of $600 a year. So you are paying no taxes during your working years, incurring no college debt, not needing to pay for your child's college and have no healthcare expenses to plan for. Next comes the topic of funding your FIRE lifestyle. The military retirement plan that existed when I enlisted allows me to retire after 20 years of service and immediately start receiving a pension (if you were to enlist today the rules have changed a bit, but it is still an incredible deal). What does that mean? It means that for almost all early retirees they are mostly relying on the Trinity studies' 4% withdrawal rate. My wife and I follow all of the FIRE principles and save about 60% of our income, this should leave us with about $1M when we retire. I like the idea of Fat FIRE and $1M is only $40,000 a year. The beauty of the military pension is that as soon as you retire (for me I'll be 43) you start receiving an inflation adjusted pension. For the sake of math, we'll say by the time I retire my base pay will be $6,000. I will receive half of that in perpetuity. Now all of the sudden instead of having $4,000 a month in retirement, I will have $7,000 a month. Do you start out making as much as I do now? No. But this is a lesson in lifestyle inflation. As a young enlisted member you will live in a dorm on base. You eat at a dining facility and pay nothing for food. Your dorm is free, the gym on base is free, you don't need much of a wardrobe because you wear a uniform to work, you don't need a car because you can bike this short distances on base and all the while you are still receiving your base pay. As you progress through the ranks resist the urge to Hedonically adapt. I can't tell you how many people I have talked to on the brink of retirement that are stressed about making the payment on their ridiculous dually truck and 35 foot camper!! I know this is a long post but it has been rattling around in my head for a long time and I just wanted to get it on paper. This is merely my experience and I understand everyone's journey/experience/story is unique. For any enlisted folks out there I would love to talk with you about your journey! [link] [comments]  |
| FI, retirement, and personal identity Posted: 25 Sep 2019 02:44 AM PDT Why are so many retired people miserable? This article really hit home for me, as the personal identity issues described here are my issues. I loved my work. I derived a lot of intellectual stimulation, challenge, pleasure, and recognition from it, and my colleagues were also many of my friends. Now that I am retired from that profession, I have found the transition difficult. It has been a much bigger shift than I anticipated. [link] [comments]  |
| Weekly Self-Promotion Thread - September 25, 2019 Posted: 25 Sep 2019 01:06 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
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