Financial Independence Daily FI discussion thread - October 04, 2019 |
- Daily FI discussion thread - October 04, 2019
- Surging Thai Baht Shatters Expat Dreams of Easy Retirement
- Weekly FI Frugal Friday thread - October 04, 2019
- Should E-Fund logic change after RE? Having second thoughts about the conventional wisdom to keep it safe and liquid (cash or equivalent)...
| Daily FI discussion thread - October 04, 2019 Posted: 04 Oct 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]  |
| Surging Thai Baht Shatters Expat Dreams of Easy Retirement Posted: 04 Oct 2019 05:04 AM PDT An interesting article on Bloomberg today for people considering moving abroad because of the lower costs: https://www.bloomberg.com/news/articles/2019-10-03/thailand-s-surging-baht-shatters-expat-dreams-of-easy-retirement I think as these countries develop and get more industrialised, a lot of the cost advantages will disappear and that's not even considering the currency risk. Something to keep in mind for people looking at 40+ years in FIRE [link] [comments]  |
| Weekly FI Frugal Friday thread - October 04, 2019 Posted: 04 Oct 2019 01:07 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: 03 Oct 2019 06:19 PM PDT I quit my job on May 31st. I had let my checking account grow for the last month or two at work, and I have had a little income from substitute teaching and my wife's one day a week job. So, September was the first time I really had to move money from my long-term savings into my checking account, to cover the school tax bill. It wasn't an emergency, but it certainly got me rethinking my e-fund. For years at r/PF I told people to keep their e-funds as cash. It wasn't meant to grow, it was meant to cover them in case of emergencies, and the lost growth (on average) was the insurance premium. And that makes sense for the typical r/PFer who is just getting a handle on their finances. But does it make sense for the typical r/FIer, especialy post-retirement? Suppose I want to keep $20k in my e-fund, which is what I have done for the last 8+ years. I kept mine as I-Bonds, but any high-interest savings account would have all the same logic. You don't want it invested because the market might be down when you lose your job and your water heater floods your basement, etc., etc. BUT, if you don't have an on-going income, then what actually happens when you have a $5k bill? You spend the cash, and then you sell some investments to replenish the $20k, right? So why not just sell the investments to pay the bill? During accumulation, I wouldn't have sold investments to replenish the e-fund, but I would have diverted some of the would-be savings from my paycheck into the e-fund, which has an identical net effect. Now that I have essentially no paycheck and am living off investments anyway, the effect is more clear to me. ERN, who everyone pretty much trusts as far as SWR, apparently doesn't advocate a cash e-fund (source). I had already downloaded his monthly return numbers to double-check my SWR plan, so I did a little fiddling around with e-fund stuff. If you compare two styles, 1) let the $20k grow at a very steady 1% or 2%, 2) let the $20k fluctuate with stock returns, and ask questions like "how long between emergencies must you go on average to come out ahead" or "how much bigger does your "e-fund" need to be to cover the emergency" or whatever, the answers come out mostly in favor of investing the e-fund. Especially for someone like me who just never seems to have an emergency. When my son had a concussion in January and we had an unexpected $3k medical expense on our high-deductible plan, that didn't come out of the I-Bonds, because we already budget for medical expenses in regular cash flow. In fact, I can't remember ever actually using the e-fund for an emergency. So anyway, my two questions are basically:
If the sub is willing to do my homework for me, I'd love links to bloggers who have done a deep-dive on this particular question (e-funds post-RE), or any other analysis people can share. If lots of people reach this conclusion, but it's like the deathly hallows and you have to figure it out on your own because it makes lousy conventional wisdom, can I at least get some moral support from others with no cash e-fund? [link] [comments]  |
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