Financial Independence Daily FI discussion thread - October 18, 2019 |
- Daily FI discussion thread - October 18, 2019
- Unpopular Opinion? $1M isn't a lot of money anymore
- Negative Interest Rates and FIRE
- Weekly FI Frugal Friday thread - October 18, 2019
- Fear of debt holding me back?
- [META] Separate 'daily discussion' and 'daily question' threads?
| Daily FI discussion thread - October 18, 2019 Posted: 18 Oct 2019 01:08 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]  |
| Unpopular Opinion? $1M isn't a lot of money anymore Posted: 18 Oct 2019 09:25 AM PDT Was in a discussion with friends about how much liquidity they would need to retire. One guy was adamant that you could live like a king on $1M in the US. He refused to do the math, but I reasoned he could pay off his house (about $300K) and have $28K/year assuming a 4% SWR of the remaining $700k. His salary now is roughly $120K/year, so he would have to make DRASTIC changes to lifestyle to live off that $28K. EDIT: Some more details, he has a family (4) and probably spends $50,000/year on expenses. He seems to think that his lifestyle would elevate indefinitely and he could stop working if he had $1M. He says that $1M is "life changing." I disagree. Who's right(er)? [link] [comments]  |
| Negative Interest Rates and FIRE Posted: 18 Oct 2019 12:47 PM PDT I'm curious how negative rates do not seem to be a big concern for the fire community. Japan and big portion of Europe both now have negative interest rates. This hasn't happened in the US yet but it's a viable possibility. Negative interest rates would blow up most FIRE plans, the same way they are blowing up European and Japanese pension funds that are seeing their assets getting smaller instead of larger over time while obligations are coming up. I read Howard Mark's paper on negative rates https://www.oaktreecapital.com/docs/default-source/memos/mysterious.pdf and it's daunting. Here is one of the impacts of negative rates that stood out. "Negative rates can warp the calculation of discounted present values. In particular, when the discount rate is negative, the present value of future pension obligations can exceed their future value. The combination of high discounted obligations and low yields on investments can be disastrous for the funded status of pension funds." If a negative interest rate environment does happen then FIRE would become much more difficult: The 4%/per year expectation in such an environment would become uncertain and the real returns for defensive portfolios could end up being 0% or negative for many years possibly decades. On the other hand, one would hope that things would become cheaper over time in a deflationary environment but losing the compounding interest might not make up for the lower cost of living. [link] [comments]  |
| Weekly FI Frugal Friday thread - October 18, 2019 Posted: 18 Oct 2019 01:08 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]  |
| Posted: 18 Oct 2019 08:16 AM PDT Looking back over the last few years, I've missed out on a bunch of opportunities that would have made me wealthy. The reason I missed out on those are because of debt. I didn't buy a commercial real estate with a mortgage because I wanted something I could afford outright. I still don't own a home because I don't want a mortgage but my rent has gone up and property prices have tripled since. I have 0 debt and it feels great to not owe the bank anything but I can see that I am taking a much slower road to wealth than my peers who are always in debt from real estate investments, their personal homes, businesses, line of credit etc. Maybe they aren't FI since they are essentially working to pay banks but they are making more than I do from my more conservative approach. A close friend of mine recently told me how he refinanced his rental property because he had "too much equity in a property". I can't imagine a scenario thinking to myself "hey I need to be in more debt for longer" . I don't know if I'm tired of being debt free or it's why they are living a fuller non frugal life than me, but I feel that my risk tolerance is holding me back even though I am on a good path to FI. It just upsets me that people who take all sorts of risks with debt can make more than you trying to play it safe. Anyone else feel the same? [link] [comments]  |
| [META] Separate 'daily discussion' and 'daily question' threads? Posted: 17 Oct 2019 04:01 PM PDT In the daily discussion for Oct 17, 2019, /u/pianojosh sought feedback about the status of moderation of the front page. While views were varied about the kinds of top-level posts that have been allowed or removed, one of the themes that came up was the daily itself. Specifically, I think the daily has roughly three kinds of posts, all of which are allowed:
I think there's a role for each of these posts in the sub. However, I think that the latter two types of can make it difficult for those with financially oriented questions to both see other financially oriented questions (whose answers may be illuminating especially if they had no idea they harbored that question themselves) and for those seeking to answer those questions to find them effectively. Could we potentially have two separate daily threads? One daily financial questions thread, solely for questions to be answered. We would still prefer they be questions beyond the level that could be answered by the FAQ, and folks answering questions in that thread should still feel free to link to the FAQ and other resources for folks to continue to educate themselves. The other thread is for daily social discussion. These are topics that aren't just questions to be answered, but don't deserve a top level post. It'd be various musings, mini status updates, questions about interviews/offers/"what would you do?" and, of course, shitposting. We run the risk of fracturing the community a bit. But we also have the potential to give the people who "hate seeing the same questions over and over" a daily thread they can ignore, while consolidating and increasing the yield (to newcomers) of a daily thread with a steady stream of questions and answers. I don't think the split, in itself, will drive the number of questions up to an unmanageable amount (because only folks visiting our sub to begin with will visit the dailies). [link] [comments]  |
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