Financial Independence Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - September 30, 2019 |
- Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - September 30, 2019
- Daily FI discussion thread - September 30, 2019
- CNBC showcased a 24 year old making 230k/year going for FIRE
- Relative value of working a few extra years
- Giving After FIRE - 1 Month Volunteering at Summer Camp
- People who have successfully reached FIRE, what's your life like now? Are you happy?
- Does it really make a big difference to be frugal? Measuring the tradeoff between money spent and its cash benefit.
- Why do you want to become financially independent in your life?
- How to stay motivated when FIRE is years away?
- Weekly FI Monday Milestone thread - September 30, 2019
- Why pay for medical insurance or pay medical bills when FIREd?
- More of a META post on FIRE - How do you justify putting off current spending on activities that have a extreme physical component correlated to age?
- Full Post FIRE September numbers breakdown
- There needs to be an AARP for people under 50.
- Roth IRA as an expat working abroad?
- Should I invest in a 529 plan for FIRE? Permanently disabled.
- Most people won't become FI because their wages don't go up the as much as inflation
| Posted: 29 Sep 2019 11:08 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 - September 30, 2019 Posted: 30 Sep 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]  |
| CNBC showcased a 24 year old making 230k/year going for FIRE Posted: 30 Sep 2019 12:19 AM PDT https://m.youtube.com/watch?v=6bi2XvD0eXw This guy didn't have to go to college, works as an overhead lineman with base pay about 120k, lives in a paid off house with his brother, saves 7k/month typically, has 3 rental properties, has girlfriend but no kids. [link] [comments]  |
| Relative value of working a few extra years Posted: 30 Sep 2019 11:03 AM PDT I thought I had my FIRE number in mind. In calculating my number I basically just took my expenses over the last couple years and gave myself a bit of padding and then multiplied that by 25. But today I was staring at my FIRE spreadsheet, which has each year in the future projected until my FIRE number about 16 years away. Out of curiosity I looked at 16-20 years, and it was surprising to see just how much higher my FIRE number could be from adding 4 more years relative to the 16 years prior. This is probably just a variation on how unintuitive it is to think in terms of compound interest. But I hadn't taken this into consideration when calculating my FIRE number. A few things I observed :
These numbers are assuming my pay/savings rate is the same today as it could be 20 years from now (unlikely) and the numbers are also assuming 7% return with a 4% SWR (not the most conservative numbers). But honestly the particular numbers aren't what I'm getting at. What I'm suggesting is that as part of determining what your FIRE number should be - it's worth not only looking at what your expenses are - or even what you want your expenses to be, but look at your situation and determine what your fire number could be with a little tweaking to your plan/circumstances. In picking my FIRE number I don't need that extra $800k - but I'm finding the appeal of planning around that kind of RE (53 vs 49) more exciting and desirable. And the price of those 4 years doesn't seem so high from where I am right now. Maybe that's exactly what is meant by fatFIRE (I'm relatively new to the community) - but I hadn't truly understood the relative value of working additional years before. --- Also yes, I totally understand that this same line of thinking can lead you to never want to give up working and sometimes enough is enough is enough. 4 years of time in retirement might be totally worth it. Again, just having the right framework around thinking/calculating for yourself seems pretty important to find out exactly what is best for each person. [link] [comments]  |
| Giving After FIRE - 1 Month Volunteering at Summer Camp Posted: 30 Sep 2019 07:57 AM PDT I reached FI this year,am currently on an LOA but plan to quit at the end of it, and tracked how I spent my free time for the first three months. I was doing lots of fun stuff like spending a lot more time with friends, video/board games, rock climbing/biking, and much more. What I didn't account for was my desire to give back to community and how good it made me feel in the past and wanting to do more of it. Earlier this summer I applied to be a camp counselor at an LGBT** summer camp for 8-17 year old kids and got accepted. I didn't know any of the volunteers or know anything about the camp besides what was listed on their website and a few questions I asked during the interview. But I decided to take a leap of faith and commit to volunteering for an entire month. Luckily, it was the best summer I've had in many years. If you want to skip directly to details about camp, skip down a few paragraphs, but I wanted to illustrate my journey of giving/volunteering throughout my life to give context for the camp. ** I use the term "LGBT" and or "Queer" in the post to encompass all queer/non-hetero-normative culture, not just Lesbian/Gay/Bisexual/Transgender. Note: Below I will be discussing about gender, but not gender as it relates to FIRE, but around gender identity/gender expression as it relates the LGBT/queer community. I think this falls within the rules of the sub as I'm not commenting directly on gender differences and how it relates to FIRE. Volunteering - Pre-Corporate JobWhen I was in high school, I did a lot of volunteer work to the extent that got a Community Service Award from my local paper. I primarily volunteered for the American Red Cross and was the youth lead for the local chapter. Most of this was helping with raising money, recruiting other youth volunteers, and doing anything else that needed help around the office. I really enjoyed doing the work and it felt really good to be social, interact, and see the direct impact of your work. I did some ARC volunteering in college, but found that with school I couldn't find the time to give back, while staying focused on my schoolwork and my own personal well being, so I basically stopped after my freshman year of college. I took a year to study abroad in Germany and I found the opportunity to volunteer in Germany before and after the school year. This was nice because it gave me a dedicated "burst" of volunteering without the long term commitment. The first program was a 3 week volunteer program where we were working to break down "Wall in the head" stereotypes for teens that lived in a small West and and a small East German village (think 600 people in the village). Despite the Berlin Wall falling in 1989, there was (is) still a psychological wall between East and West. The second program I did was volunteering at a week-long summer day camp where the kids would come and participate in a "Mini" version of the city. They'd have various standard fun activities, but would also do things to simulate "adult" life. I loved giving back to various communities with the direction interaction and volunteering brought a lot of joy/happiness to life. However, work changed everything. Corporate World - Earning to Give, But Not the Way to Live (For Me)Once I started my corporate job, time was very scarce and any time I had while not travelling for work was spent catching up with friends on my short weekends and doing mundane things like errands. What I lacked with time, I had excess money, so instead of donating time, I donated money. In total I donated $62K over the past 8 years to a variety of causes, but most of it to an effective altruism organization - Givewell.org. Givewell figure out how to do the most good - you can read a lot more into the methodology, as they're very thorough/transparent on how they decide which nonprofits can use the donations the most. In the end, it mostly goes to malaria nets, de-worming initiatives, and direct cash transfer. A conservative estimate is that every $3300 used for mosquito nets averts a death, so the money I donated hypothetically saved the life of 18 people. Being a utilitarian, earning to give definitely aligns with my ethics/philosophy. However, reading the reports on my impact, I still didn't "feel good" about my contributions, despite having a very measurable impact. Apparently feeling this way is not a phenomena unique to me and people often look at how "good" an act is instead of the impact of the act. I remembered when I volunteered before getting my job and wondered if that was a relic of me being younger, more idealistic, and more optimistic. Had the corporate world jaded me that I wouldn't enjoy volunteering again, or would I still get that feeling when giving back directly with my time/labor to my community? Given that I had FIRE freedom to do whatever, I decided to take a chance and volunteer at a summer camp! Note: I want to reiterate that earning to give approach wasn't the right method for me to give back but it can work for others. I highly encourage people, particularly those who have more than enough, to give back in whatever way they can, whether it be money , time, or anything else. Summer CampI decided to just Google "LGBT Summer Camp", came across a list of camps, and applied to one that was convenient and worked with my schedule. I got accepted for all 3 weeks of the camp (and 4 days of training). I was a bit worried since it had been a while since I had volunteered with kids, that I would be the "old counselor" among them, and wouldn't be able to connect with the campers, but I decided to take the plunge and try it out. One of the things that drew me towards the summer camp was the ability to do an intense commitment and then be "free". I do a good amount of personal travel, and having the freedom to travel whenever I want, is something I can't give up. I've looked into other volunteer opportunities like Big Brother/Big Sister, but it requires a year long commitment and I can't be gone for extended periods of time because you have to meet 2-4 times a month with your Little Brother/Sister. There were different audiences for each of the three weeks, but it was basically camp for LGBT kids from 8-17. Camp was like most traditional overnight summer camps (arts and crats, boating, archery, outdoors, etc.) but it layered on additional things like queer discussion groups, sex/relationship/body discussions (sex-ed in public schools is terrible, and is even worse/non-existant for LGBT kids), and discussions of of racial/social justice. As a Cabin Counselor, I was responsible for the campers in my cabin and was around them or other campers pretty much 24/7. I had a few small breaks throughout the day and occasionally some time off at night, but otherwise it was work the entire day. It was definitely hard work, but it felt so rewarding to interact with the campers and staff and I learned/grew so much during my month at camp. Among the many things I learned/experienced at camp included:
In terms of my fears, I think that it all turned out to be me worrying/overanalyzing too much
Impact of CampDuring camp I kept always saying to the other staff "I can't imagine if I was able to attend this as a kid and the impact it would have had on my life." I've got so many anecdotes on amazing interactions with campers and staff that absolutely melt my heart and provide me with so much hope and optimism about our future generations. I was so happy to be a mentor/leader to these kids and be the positive LGBT influence that I never had as a kid. It sounds super cheesy, but it definitely nourished my soul and gave me the energy/enthusiasm that giving to giving money could never fulfill. I loved volunteering at this summer camp so much that I'm eagerly awaiting to apply again AND apply to a second LGBT camp. Ideally I'd get to do about two months of summer camp next year with a short break in between. In the meantime, I'm looking at various ways to give back to the community like looking at the local LGBT center and other volunteer opportunities that can be flexible with my schedule. TL;DRAfter a long gap since giving my time/labor, I volunteered as a Cabin Counselor at an LGBT Summer camp and had an amazing time. It wasn't something that I originally planned on doing when FIRE-ing, but it felt great to give back to the community and I look forward to doing this again next year and beyond! [link] [comments]  |
| People who have successfully reached FIRE, what's your life like now? Are you happy? Posted: 29 Sep 2019 07:03 PM PDT I know my responses will be weighted towards the positive (you'd probably be less likely to stay on the sub if you regretted FIRE), but I'd love as many responses as possible. [link] [comments]  |
| Posted: 30 Sep 2019 04:36 PM PDT I've recently moved closer to the office, which allows me to be more focused in developing my career. I have more free time, feel healthier and fresher. This came at a great cost due to the increased rent. I believe in the long run, this maximizes my chances of FIREing, as sharp me is a better professional than tired me. Do you have a rule of thumb to measure the trade off between saving money and owning the possessions that money allows you to have? [link] [comments]  |
| Why do you want to become financially independent in your life? Posted: 30 Sep 2019 04:28 PM PDT We all want to be rich one day. Those who have a Powerful WHY can go through adversity in order to achieve financial independence. He who has a why can bear almost any how. What is your purpose for wanting to be financially independent? WHY do you want to be financially independent? WHY........ [link] [comments]  |
| How to stay motivated when FIRE is years away? Posted: 30 Sep 2019 02:36 PM PDT I did the math for my FIRE numbers. At my current income and savings rate, I'll probably achieve FI in 22 years (when I'm 49). This is great, considering the average retirement age is 62 years old. But I'm curious, what keeps you motivated when the goal is still so far away? After all, humans are pretty bad at delayed gratification. I know I can focus on decreasing spending and increasing income, but there have to be other ways to keep you focused and excited in the short term (for a long, long term goal). What works for you? [link] [comments]  |
| Weekly FI Monday Milestone thread - September 30, 2019 Posted: 30 Sep 2019 01:10 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]  |
| Why pay for medical insurance or pay medical bills when FIREd? Posted: 30 Sep 2019 01:20 PM PDT There is a lot of talk here about affording medical insurance for those of us FIREing in US. So let me play the devil's advocate. Let's say you are over 40 years old, childless, own property you live in outright, buy your cars used in cash, have no pre-existing health conditions and you FIREd. You have no medical insurance. Obamacare tax penalty is going away by 2020, so that's not a thing anymore. You can easily get good cheap dental care outside US with some pre-planning and make a vacation out of it. You can cover a few check-ups at the doctor out-of-pocket. But if something major happens, you have two options. If you have a long term illness, you can now buy medical insurance and simply ignore all the previous medical debt (insurance companies can't discriminate on pre-existing conditions any more). Or, if it's a temporary thing, like a broken leg, just get it fixed and ignore the medical debt. They will ruin your credit score, but what do you need this credit score at this point in your life anyway? You are not buying new properties or opening any new lines of credit. They can't garnish your wages, as you have none. What is the worst thing that can happen? They'll put a lien on your house? Not your problem, as you are planning on dying in this house. If you want, you can file for bankruptcy and that will remove all of your medical debt, while your retirement accounts are protected. Without telling me that I am a terrible person who is going to drive for-profit hospitals out of business, tell me what's wrong with this plan. [link] [comments]  |
| Posted: 30 Sep 2019 08:20 AM PDT I have goals in life that have a very demanding physical component. These include things like high altitude mountaineering, adventure travel in more remote countries (I was in the Congo last year) and sport-related goals - I'm a fairly competitive runner/ultrarunner. All of these activities have high up-front monetary costs, particularly high altitude mountaineering. In addition, most of these activities will not be accessible or will be far less accessible when you are in your 40s and 50s, for a variety of reasons, including just being particularly physically demanding. Wondering what this sub think of life goals like this and if any of you have had similar goals, and how you've fit them into your own FIRE planning. [link] [comments]  |
| Full Post FIRE September numbers breakdown Posted: 30 Sep 2019 08:50 AM PDT To see the previous month, please refer to this link https://www.reddit.com/r/realestateinvesting/comments/cxzloe/august_monthly_breakdown_from_a_retired_real/ For the record, I retired early in my 40s, largely due to my real estate investments. Even though I still act as the head of the business, my total time spent each month on the business amounts to less than 10 hrs when averaged over the year (this consists mostly of finding new properties, coming up with design plans, and a little paperwork), so I consider this low enough to safely consider myself retired. Some may disagree, but I enjoy the aspects of the business I still do, so don't consider it "work". Bought another new investment property for myself, and I'm currently working with several out of state investors to help them get their first cash flowing rentals in my area. Two of those deals should close next month. Okay, now for the numbers. For the sake of transparency, updates will from now on include actual net worth/account balance numbers. Business Income, Investments, and Expenses 1) Real Estate Estimated total value of Real Estate (all owned free and clear) - $1,250,000 Gross Rental Business income - $11,415 (no vacancies, but the 2 newest purchases are not yet producing income as of this statement) Net rental business income - $10,180 (after property management fees, a few minor repairs and a couple of appliance repair issues) One new investment property purchase as outlined here https://www.reddit.com/r/realestateinvesting/comments/d6kjjd/new_rental_purchase_breakdown_on_mckinley_st/ Finished Hall St. renovation as detailed here https://www.reddit.com/r/realestateinvesting/comments/d7ield/before_and_after_pictures_on_hall_st_renovation/ Hard money loan outstanding on a flip project in Los Angeles - $50,000 (project is complete and is set to be sold in a couple weeks.) 2) Investments Total value of investment accounts/cash accounts (this excludes all real estate holdings) $225,881 Monthly investment into Fundrise $0 (suspended investment this month to redirect that money into renovation projects, but all returns are being reinvested) Monthly investment into Dividend Stock account $2000, all dividends are being reinvested Monthly investment into Leveraged Stock account $2000 Monthly investment into Money Market account $1000. Currently getting 2% interest. (took a lot of money out of this account to fund new purchase and renovation projects) The balance will stay in the checking account. 3) Possible deal on the table for upcoming month I am working with 4 out of state investors to help them purchase in this area. We have 2 closings scheduled and are in negotiations on two other properties. PERSONAL EXPENSES Personal expenses for the month (everything except property taxes, which will be a one time expense when paid) I'm sure this is confusing for some people, but I'll explain the low numbers on personal spending. 1) I own my house outright 2) I own my cars outright and only carry liability insurance 3) I self insure for all other insurance 4) I'm just really frugal by nature which includes cooking at home, walking most places within a 3 mile radius, not going out often, etc The goal here is to spend less than $800 a month average. The goal for this month was $500 $485 total Breakdown:(all cost rounded up to nearest $5) Car insurance $45 Gasoline for cars $35 Cable $70 Water/sewer/trash $60 Gas (heat) $25 Electric $60 Cell phone $35 Food $100 Entertainment $20 Pet $35 Back on track on the personal spending this month. I lowered the personal spending goal to $500 to account for $300 in averaged expenses from previous months. (from a one time medical expense and a vehicle purchase. Details outlined in previous breakdowns) OTHER Misc. income Payment for truck sold to handyman $100 Total $100 Grey area accounting. Most of the Grey area is already above. The big one this month are the new property purchase. Should that be counted against the rental income as a rental expense? Maybe, I don't know. So it got its own category. The funds for that came out of the bank account and a small transfer from my money market. On the personal side, deciding to account for the truck purchase I made for my handyman as a personal expense has caused me to lower my monthly spending goal for a few months. Oh well, at least I got $100 this month in misc. income from it! Lol. Next month the new houses should start to reflect on the gross rental income, so expecting around $13,000 or more gross from now on. Okay, that it is. Let me know if you have any questions about any of this. I know this covers more than just real estate or personal finance, but hopefully members of multiple communities will find it useful. [link] [comments]  |
| There needs to be an AARP for people under 50. Posted: 29 Sep 2019 10:08 PM PDT Collective negotiation of medical, automotive, and home insurance rates are just 3 good reasons to do this. [link] [comments]  |
| Roth IRA as an expat working abroad? Posted: 29 Sep 2019 10:33 PM PDT Basics: -Am American. -Working as a W-2 employee for a Canadian company in Kuwait. -Have taxes taken out of every check -Contributing to 401k every check. Company match 100%/5%. I have reduced contributions for this year to 6 from 10, but going to start maxing my contribution to the limit (19,000) next year. -Contributing to various other things from each check, such as high interest savings, 529 college funds, child support etc. However I don't think that's pertinent here as it's not tax deductible. -Can claim FEIE, which gives a tax deduction of 105,900 for the 2019 tax year. -Plan to claim the FEIE, as I did last year. -Make more than the FEIE deduction, so will still have a tax liability. -Total Income is just under the max amount allowed to partial contribute to a Roth. -I will claim 1 child as a dependent each year, per the divorce decree (2,000 deduction) So here's my question. Looking to open a Roth IRA and would like to max it out for the year($6,000 right away). From my understanding, the fundamental of a Roth is that you're funding it with money you've already paid taxes on, so you don't pay taxes later. However, in my case, while I'm paying taxes all year long from each check, when I file taxes and take the FEIE, basically I'm getting the tax BACK that I paid out on up to the 105,900. Which leaves my taxable income being the remainder of that amount, minus any other deductions I'd take. That being said, the FEIE, plus the 2019 standard deduction(18,350 for head of household) and the child credit (2,000) will pretty much break me even on taxes. If I get nearly all of the tax back that I've paid out all year long, wouldn't that make any deductions that I've made to a Roth IRA basically fraudulent? As in, I didn't actually fund it with money that has had taxes paid on it? Would it be better, in this instance, to start a traditional IRA? Can I not start an IRA at all due to effectively having reduced my taxable income to 0 due to deductions? Help! Edited: punctuation and details [link] [comments]  |
| Should I invest in a 529 plan for FIRE? Permanently disabled. Posted: 29 Sep 2019 06:39 PM PDT I'm permanently disabled at age 27 collecting $15k/ month until age 65 tax free private LTD insurance(true own occupation). 450k net worth. I'm applying for SSDI. Expenses are 4k a month. I'm investing 11k a month or 130k a year. One issue I'm facing is managing my expected taxes in the future. Being disabled means I no longer have access to tax advantaged accounts like a 401k, roth IRA, etc. At my savings rate in 4 years I'll hit 1m which can throw off a lot of taxable dividends or ordinary income depending on my asset allocation. A 3% dividend yield will throw off 30k of taxable income in a year. I was reading a 529 plan is tax advantage and has no penalties for non qualified distributions for being disabled. It'd be at ordinary taxable income rates for the earnings and tax free for education expenses. This feels perfect for my bond asset allocation as I'd be paying the same taxes either way but get to choose when and how much taxes I pay. I don't plan on going back to school. Running the numbers tuition would cost more than the tax savings for withdrawing for qualified expenses. You can withdraw full room and board expenses for half time enrollment, it may be nice to take easy classes at my own pace for social activity. Idk if I'm physically able to even do half time and not flunk out. Idk how long they'd keep a disabled student enrolled getting bad grades. As long as I'm half time in a different major contract wise it shouldn't bother my LTD true own-occ contracts. They pay 100% for loss of 20% or more of time as long as there is zero income. I would expect a full re-investigation though should I attend college. For the sake of discussion assume college is probably out of the question for tax free withdrawals. I'm also aware of tax managed funds at Vanguard and the like that try to avoid dividends and incurring capital gains. I'm still doing my due diligence on investigating these options. I have no plans for children. I can barely take care of myself. I won't be able to take care of them. Do I still have to follow gift tax laws if I'm the beneficiary myself? Ie does anything above 75k/5 years/15k a year need me to count it against my taxable estate? What if my parents gift me and I decide to gift them as well? How do the 529 plan limits work out? I know CA is 529k in contributions. Then nevada is 370k. Can I contribute to both for a total of 899k? (Of course I can do tax managed funds + muni bonds + ibonds but that doesn't follow the market, leaves out juicy REITS and corporate bonds which are in some 529 plans with vanguard.) Edit: I'm not an idiot and I know earnings are ordinary income. As I've stated multiple times I'm only considering the 529 for my bond allocation. [link] [comments]  |
| Most people won't become FI because their wages don't go up the as much as inflation Posted: 30 Sep 2019 02:50 AM PDT How can people become financially independent when wages don't cover inflation? My wife got her merit increase at work last month. Her performance appraisal score was 5 (on a 1-5 score) and her boss raved about her hard work and results on the job and said she would be put in for the highest merit increase possible. So she checked her paycheck with extreme interest on September 22nd, which was the first check with the new pay increase. She got a 2% increase for her efforts. Within a few days, we found out our mortgage was going up due to higher property taxes and homeowners insurance and her health insurance premium was going up too. This would eat up the 2% increase and more. So she is losing money with her annual merit increase. At an extended family dinner yesterday, we talked about it with the relatives. EVERYONE said their annual merit increase did not cover the annual increases in the cost of living. So unless you were promoted, the typical person lost money each year to inflation. (Their salary did not go up as much as the annual increases in the cost of living.) Everyone laughed at the concept of FI and the idea of retiring early when they were forced to live on 100% of their income to cover fixed expenses. People on this board say that FI is based on savings and investments but the average person can't save or invest anything when their merit increases at work keep lowering their actual income to pay their bills. How about you, are you coming out ahead each year as you get your annual merit increases? Has your standard of living gone up each year due to your hard work, or gone down due to your salary increases not reaching inflation? How is this impacting your goal of FI? [link] [comments]  |
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