Financial Independence Daily FI discussion thread - November 26, 2019 |
- Daily FI discussion thread - November 26, 2019
- Discussing FI/RE with a significant other
- Hedge fund billionaires predict recession in 2020
| Daily FI discussion thread - November 26, 2019 Posted: 26 Nov 2019 12:07 AM PST 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]  |
| Discussing FI/RE with a significant other Posted: 25 Nov 2019 07:37 PM PST Life Situation: Single, 25 y/o, living in major US city FIRE Progress: 10-15 years out Gross Salary/Wages: 82k + 15k from side hustle Yearly Savings Amounts: 401k = 8% of 82k (company matches up to 8%) HSA = Max'ing Down Payment Savings = All else ($35-40k) Other Ordinary Income: I do photo/video work on the side. I picked up a camera because I needed a creative outlet from a job I hated. Through a ton of hard work, I managed to do a very underwhelming $1.5k in 2018... What I didn't get in revenue, I gained in experience. Late in 2018, I decided to quit the job I hated for a better job (more money, fewer hours) and focus on growing my side hustle. I expected to do about $5k (thumb in wind) but will end up around $15k for the current year. Below is a breakdown of my earnings for 2019 (2020): Freelance: $9k ($10k) Stock: $3k ($6k - but hopefully closer to $10k) Print Sales: $2k ($1.5k) Instagram Ads: $0.75k (discontinuing) ($0) I have interest in taking this full time, but am somewhat scared to take the leap - especially given how good my current situation seems. Rental Income: Zip - hopeful to change in 2020 or 2021 Current expenses: $26k/year Rent - $12k/year (incl. utilities) All Other - $12k/year (conservative - probably $10k) One Time Photo Expenses - $3.5k Recurring Photo Expenses - $2k Assets: $125k total Checking: $3k Savings: $46k ($10k for rainy day, $36k build up for downpayment) Retirement Accounts: $73k HSA: $3k Liabilities: None. Specific Question(s): I'm in a serious relationship and pretty confident I'd like this to last a long time. She is fantastic, but money can be difficult to talk about (even though everything else has always been really easy). She makes around $70k ($60k FT + $7k-10k side). She has some loans (~$5k-10k) and will be fully debt free in 2020. She's also built up a pretty solid travel/emergency fund. We aren't polar opposites with respect to spending but our approach is different. I am a CPA, so by nature very active in managing my money and my sights are set on the long term. With that said, there are a few things she's told me that make me cringe. Ex: she wants to buy a brand new car, would need a loan, will hardly drive it, and would probably pay $150/month for parking (we live in a large city). I'm trying to figure out a way to respectfully advise her against these money moves without coming across as judgmental...but in the few instances I have made suggestions, I've received a lot of push-back. Her dad is retiring at the end of the year and seems to be in good financial shape. He's given her the same advice on the car and after a few months I think she's reconsidering. I'm happy that's she's reconsidering, but I'd prefer she have the financial awareness to see how these can be harmful financial decisions on her own. If we continue on our current path, we will live together in the next 1-2 years. I really want that to happen BUT I'm hesitant to move in together without having full confidence that we are on the same page financially. Edit: Other examples include living expenses >=30% of income, not aware of tax advantaged retirement accounts, has recently carried a balance on her credit card, generally views savings as a tool to get her through the current year with some savings for emergencies Edit Edit: The purpose of wanting to have these conversations is to 1. avoid bigger problems down the road 2. not be passive aggressive. If she said "can you help me manage my money" tomorrow I would do it in a heartbeat. I find this stuff fun (considering becoming a CFP as a second side hustle) but I know she does not. TLDR: How have you shared your FI/RE quest with your significant other who does not have the same mindset? Thanks for your help! [link] [comments]  |
| Hedge fund billionaires predict recession in 2020 Posted: 25 Nov 2019 04:43 PM PST I'm going to link to two billionaire hedge fund investors who are both saying basically the same thing. They expect a recession to come in the near future. Possibly as soon as next year. Doubleline Capital CEO Jeffrey Gundlach on chance of a recession and the Fed rate decision Ray Dalio: The world has gone mad and the system is broken. Now, I've been around these circles long enough to know that people are going to respond with, "No one knows the future and so we should disregard anyone who's predicting a recession." Say what you want, but these two are obviously very, very knowledgeable when it comes to the inner workings of our economy and the stock market. I think it's completely reasonable to heed their warnings. Furthermore, I'm curious what everyone here thinks about the long term viability of our economy and even the United States as a country. The general consensus here seems to be that the market may go up and it may go down, but long term it will always grow. Many of us base our decisions on the historical performance of the past and that we can reasonably expect the market to grow about 7% long term. If someone doubts this, you will ask, "what is different about this time?" The answer is that there is a whole lot of different scenarios taking place in our country today. We have more debt on a national level and people as individuals are more in debt than it seems has ever been the case before. We have stagnating wages, people who are either unable or unwilling to save for the future, meanwhile there are $122 in unfunded government liabilities. Not only do these legitimate problems severely threaten our stability, but we are plagued with all sorts of changes that were not a thing of the past. We have more obesity, drug addiction, and homelessness than ever before and these problems don't seem to be getting better. There's a lot more here threatening our social stability that I'm just not going to get into because it's too inflammatory for this board. Which is kind of sad when you think about it, since as investors we should be able to put our emotions aside and look at things rationally. Normally, I would try to be optimistic and say that we can overcome any challenge if we want to. But, the leadership in Washington seems incapable of coming to any sort of compromise which we desperately need to get things done. Tensions between liberals and conservatives are higher than they have ever been in my lifetime. It seems like the direction we are currently taking is in no way one that leads to peace. Personally, I'm starting to question whether investing is even worth it at this point. The stock market is at all time high with a bull market that never seems to end, but the reality on the ground does not in any way paint a prosperous, growing society. I feel like I must be an idiot to keep pouring my money into my 401k when so much is at risk, but not really sure what else I should be doing. Thoughts? [link] [comments]  |
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