Financial Independence Daily FI discussion thread - September 28, 2019 |
- Daily FI discussion thread - September 28, 2019
- Concerned about my quality of life, need advice on if it’s worth it.
- Struggle between current, comfortable life and available steps to FIRE
- Our FIRE Plan: Moving to LCOLA and easing into FIRE
| Daily FI discussion thread - September 28, 2019 Posted: 28 Sep 2019 01:07 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]  |
| Concerned about my quality of life, need advice on if it’s worth it. Posted: 27 Sep 2019 05:43 PM PDT Background: I'm 24 years old. 1 year ago I was in decent debt, no savings whatsoever, and pretty much nothing to my name. Today, I have about 10k saved, paid off all debt outside of my student loans and they're down to 12k. I've really really had to grind to do all this, I'm saving about 2k a month (about 50% of my salary) and was mass paying off debt. Haven't been spending money on anything leisure really. My plan is to buy a home in a little over two years, I want to put 20% down to avoid PMI and what not, 30 year mortgage and hopefully pay it off a couple years early in order to retire with a paid off home by 55 with enough saved to be able to stop working entirely. I've been working towards this plan and been very excited about it but I've recently taken a step back and really mapped out what I'll be sacrificing. In order to sustain my savings goals I'm going to have to continue grinding pretty hard for a long time. I've calculated possible raises based on my industry and growing my savings through safe investments. It's still probably going to take me 10 years before my income could shift enough to allow me to travel at all really. I won't be able to buy a nicer car, I currently have my car paid off, it's aesthetically only a step up from a complete beater but very mechanically sound. I estimate this type of car is what I'll be able to afford for probably another decade at least, but my heart hurts a little every time I see a GTI drive by. Though it will be a step up from my current apartment, my home will be very modest but I'm completely okay with that part. I guess my question is, if it's worth it to sacrifice my 20's and most of my 30's to RE. I know obviously, it's a ultimately a personal choice based on preferences. I really do want nothing more than to be able to RE But do any of you regret sacrifices you've made while young for your future, or know anyone that has? Is there anything I should be considering that would help me make my choice? Any advice or perspective would be appreciated. Just trying to figure out if I'm 100% on the right track or if I should adjust and some outside opinions would really help I think. Edit: typo [link] [comments]  |
| Struggle between current, comfortable life and available steps to FIRE Posted: 27 Sep 2019 06:03 PM PDT I'm a lurker, not a full-fledged FIRE, though I obviously like the idea of it. Having a difficult time with the juxtaposition of our current life (and it's benefits) vs all the steps we could take in the goal of FIRE. We live in the Bay Area, obviously a HCOLA. Bought a house on the uptick of the recovery and have about $500-600k in equity as a result of the current market. We have an 18 month old and the house is nestled in a district of 10/10 schools. With the current market there is no way we could afford any house in a decent school district, let alone a house at all if we didn't have our equity. Wife is an architect and I'm a self employed professional woodworker/furniture maker. Her job pays pretty well compared to the overall US, working for a firm that designs homes for the ultra rich tech people in the area. A lot of my work comes as a result of all the money and companies here. I make top shelf furniture for people who will pay those prices, as well as do work for a lot of the big local tech companies. I say this because our professions are not like say, nursing, accounting or HR, where you can sort of do that anywhere. We sort of need to be close to a metropolis to fetch the higher wages and prices, let alone actually find the jobs. Being close to a big city typically comes with HCOLA. But we also consider grabbing the 5-600k and moving somewhere cheaper with the goal of FIRE. We're mid thirties with about $400k in retirement and $75k in cash. I suppose with the equity, on paper we're close to or barley millionaires. Household is about $150-200k depending on my varied income. Between my SEP, Roth's and 401 (plus 529) we usually put away about $35-40k to retirement per year. We could stay put, have the little one go to the good schools and just keep grinding it out here in the Bay Area rat race. We'd probably end up with a modest to decent retirement and put the kid through college, take some trips, buy some things, retiring in our 60s. I'd posit that in the current market we probably have more opportunity for wages and growth in the Bay Area, but there is also the HCOL. Conversely, the other extreme would be to sell and use the proceeds to purchase a house for cash in a LCOLA. Cheaper the better and drop the remainder into a brokerage. But her wages would probably come close to half that of the Bay Area and I'd have to adapt and pivot my business to meet the new market, losing a lot of my current local contacts. There is probably a CBA I could do of lower wages but house paid for in a LCOLA. Household income would probably drop to $100k initially, but I'm the wildcard with my own business, for better or worse. The one little wrinkle is that we're a mixed race family. No offense to anyone from there, but we don't necessarily want to move to say, Cincinnati, OH where we won't find much diversity. At least, I know my wife won't want that. We're also CA people, where the west coast feels more like home. Some place like SC or WI feels like mars. But maybe that's what people need to do in order to FIRE. Get uncomfortable. Get radical. Maybe my overall question is a personal one. How much do I want to sacrifice, if it is a sacrifice? And what's more important? Retire early and well, or stay in the place you love and retire later and well? Post script: With all I've stated, do you think a sale and move would allow for FIRE, despite perhaps lower wages? [link] [comments]  |
| Our FIRE Plan: Moving to LCOLA and easing into FIRE Posted: 28 Sep 2019 01:16 AM PDT We are a family with 2 kids currently living in a HCOLA. We are planning to give up on our current HCOLA and move to a LCOLA (suggestions welcome, currently considering Missouri, Florida, Indiana). Here are our current expenses and planned expenses once we move. Let me know if they sound reasonable. The main idea is to drastically reduce our cost of living and live at a lower burn rate and see how sustainable it is. Then slowly ease into FIRE. Expense Breakdown (Monthly): Current vs New
Eating out is one thing we enjoy most and we realized we cannot really cut that off much. So that's the only expense we will keep. Rest all are like vacation etc, we don't mind cutting. We currently have 900k invested. The plan is to move to a LCOLA and start living off these expenses while supplementing it with wife and I working at a grocery store together part time (say 10 hours per week each). That way we can stay together both at home and while working and get to spend most time with our kids who are in elementary. We also don't like a complete sitting at home FIRE, 10 hours of work per week will give us enough stimulation and keep us active. Our 900k invested gives us about 3k per month and the part time work will give us 750$ more. After our spending we should have 1150$ left each month. We may drop the part time work as we see our expenses are good and we feel comfortable. We also will get an inheritance of about 200k which we plan to use for kids college. Let us know how our plan sounds. Welcome any suggestions and comments Edit: Updated expenses based on comments. With the updated numbers, we are not cutting anything other than vacation which we don't really care much. Rest all remain same. We have been tracking using mint our expenses for past couple of years and are comfortable with them. Also even without the part time we will still have 400$ left per month. [link] [comments]  |
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