Financial Independence Daily FI discussion thread - December 05, 2019 |
- Daily FI discussion thread - December 05, 2019
- From 10k to 650k in 6.5 Years (with Graph)
- My detour from hardcore FIRE to get balance
- Which tax forms to keep to prove mega backdoor roth IRA contributions/basis?
- How have you taken care of your parents once wealthy?
| Daily FI discussion thread - December 05, 2019 Posted: 05 Dec 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]  |
| From 10k to 650k in 6.5 Years (with Graph) Posted: 05 Dec 2019 11:42 AM PST This is a follow up post to my last one. A few different things have happened in life and I figured I'd give y'all an update. This is my wife and I's journey from poor recent college grads to financially stable adults! This graph starts 6 months after graduating college when I had already accumulated 30k and ends on Nov 30th 2019. It's really cool to begin to see the exponential growth and how fast my investment returns are beginning to outpace my salary. Since the last updated I've:
Some answers to common questions are below:
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| My detour from hardcore FIRE to get balance Posted: 05 Dec 2019 08:27 AM PST Ive lurked here more than anything, but the FIRE community really helped/saved me and tbh im really flattered from people calling me out in my other post. all the doubt made me think some people might find my short path so far interesting. ive been pretty bummed about not working and feeling worthless lately. note: I feel fairly awkward about putting this out there. $394467 from: MINT ($101k wealthfront savings (1.82%), $76k checking, $26k business ck, $193k vanguard(3 fund portfolio), im heavy cash but dont trust the market and im looking to buy a dental office so im holding it for the moment. $528k is from partnership buyout. 10% down and 120 payments with interest. How i got here: no i didnt kill my parents, some minor inheritance, and yes ive given some pretty rounded or combined numbers in other posts, but im going to try to be more concrete and transparent here. Graduated dental school 2014 $150k(became $160 with interest) in student loans, had some help with rent etc from parents, i used $40k inheritance from grandfather to pay undergrad. Other half of undergrad was scholarships. Debt: Home: $344085 on 30 yr mortgage ($430k paid) plan to refi/payoff early Car: $6-7k loan (daily driver) Income: May 2014-2015: $90k 2015-2016: $190k 2016-2017:$280k 2017-2018: $480k (partnered) 2018-2019: $450k 2019-2019 Sept.: $230k My wife and i do finances almost completely separate, we share cost such as house payment, i pay for gym cable and auto insurance etc and she pays for gas and electric. FWIW she is also a dentist making about $250k/yr the numbers above do not include her. So over 5.5ish yrs and $1720000.00 of income ive saved roughly $400k +$270k equity(buy in) student loans paid off and bought sports cars($50k), and ended up with roughly $930k in net worth. $85k equity in the house not counted. Made $60k on first house which was helpful, lucky buy. Id like to say how fortunate i am to be born into a good home with supportive parents, having got into dental school, having met my wife who also makes incredible money as a dentist and to have found a great paying job only 1yr out of school. At the same time ive worked a lot harder than many of my peers (still less hard than general population) and i dont think this is all luck. More a bunch good decisions with good backing hard work and some luck sprinkled in. Im very business savy and tend to know how to make money. FI comes in when i started getting caught up in the lifestyle from the partnership. They try to get you into fancy things and cars, i was ridiculed for buying such a cheap home ($250k for first home), my bmw m was garbage because it wasnt as fast as the senior partners superior amg etc. They do this to trap you where you spend so much money your only option is to work harder and you can never leave because you eventually created a lifestyle around this income (most dentists dont make that much). I took a step back and had a total wtf is going on in my life moment. if i try to keep up with this lifestyle im going to become a slave to this career. This really happened early 2017(same time i found FIRE) and i contemplating my exit since. My student loans were paid off late 2016. Im not entirely sure how (made $280 and paid off $160???). ive stopped buying stupid toys, sold off a car, and started stockpiling away. Good thing because working at that pace was straining everyone, things were getting snippy and i was getting tired. So i got out several months ago and my $270k buy in turned into $528k. Instead of working 52wks/yr 40hrs i want to cut back and really enjoy my career/life. I got lost along the way of why i got into dentistry. No it wasnt to save the world, but it also wasnt to lose personal relationships with patients or become a slave for money either. I wanted a relaxed 3.5-4days/wk with 4-5wks off making a reasonable income and having the time off to focus on my family (currently just wife and dog), my health, and travel. I gave up so much of the last 13yrs of my life chasing better grades to chase more and more money and thanks to FIRE im getting off the treadmill to live a little. I know its weird that i feel bummed about my situation. I guess its really who you surround yourself with. I have friends buying new trucks, dedicated track cars and homes and talking about how good their office is doing and here i am starting over. Maybe its going from such a high intensity pace where solving peoples problems gives me value to a relaxed pace where im not really creating much. Another thing ive learned is while i have a lot of hobbies i will need more activity in retirement to stay fulfilled. Maybe it will be easier as i should have more retired friends/wife? The dental market is a lot tougher than it was 4 yrs ago too. Large groups are buying everything at ridiculous values making it harder for me to get a practice. im looking at two this week so fingers crossed. I started my own company about a year ago doing just surgery and complex procedures. This is providing me some minor income while im looking for my forever home. Side note: if any dentists are looking for a good business plan doing specialty work lmk, this actually uses large groups to make good income and have decent of flexibility (lots of travel tho). I figure if i can save $50k/yr plus my buyout ($528k), $100k total/yr, at 4% interest ill be at $1819000.00 in 10yrs. At that point i should be done paying for my new practice (boa financial 3.49% for 10yrs) which should add $80k back to savings but now my buy out is over too. So then saving $130k/yr. at 4% should get me to $3457000.00 at 49yrs old to retire(almost 32 now). If i sell the office for the $700k it cost to purchase it, ill call it icing on the cake. I mean im checking my numbers and they should be right but if i add $670k saved (buy in and cash/investments) but i also paid off my student loans $160 counting interest paid, and $50k cash on the used bmw m. I mean thats $880k change. $1720000.00-$880000.00=$840000.00 for taxes and living. The $270k buy in isnt taxed. i figure effective tax is around 30%. I still manages to pay down $160k of student loan debt on making $280k tho which i am just now appreciating. Anyways id love to have someone check my retirement numbers or offer any insight. Im obviously not living on much of the money ive made which made me think why take on so much stress to do it when i dont want to retire at 39 anyways(original exit age). Thanks again FIRE community for helping me put things in perspective. discussion points: was is stupid to leave that job regardless of how awful it was? did i interpret FIRE wrong here? is this more a r/fatfire post? how do the retirement calculation look? TL;DR: saved $930k at 31 and got off the treadmill thanks to FIRE, now trying to create a little balance. Id love to hear anyones thoughts on the plan or why im lying. ive searched my history and cant find some stuff people are referencing, i saw where i posted combined student loan debt and house was $600k which is when i had the first house and wife had more debt than me because of undergrad. If you got this far thanks for reading this has been oddly uplifting. Ill try to respond and not ghost like i did with my other post. i didnt realize how quick things move on here. mint screenshots: https://imgur.com/a/LJB8ltt [link] [comments]  |
| Which tax forms to keep to prove mega backdoor roth IRA contributions/basis? Posted: 04 Dec 2019 08:01 PM PST I'm currently doing mega backdoor roth through my 401k (going into an IRA). In many years, I will likely want to withdraw my contributions. Which forms do I need to save to prove to myself and to the IRS what my contributions were? Just the 5498 forms, or something more? [link] [comments]  |
| How have you taken care of your parents once wealthy? Posted: 04 Dec 2019 08:14 PM PST My husband and I have a net worth of about $750k at age 32 and are now making a collective $600,000/yr in a HCOL area. My parents paid for college and my first car. They lent me $5000 when I couldn't make payroll for my first business when I was 21. They've always been generous (though they didn't and don't have an excessive amount) but they've joked about wanting me to take care of them at the end of their lives like they did at the beginning of mine. I've done a lot with my time and skills to give back to them, but it's hard to quantify an amount of time/money that's fair to give back for all they've done. I don't know their exact financial situation but I imagine they have enough to live somewhat modestly in our HCOL area for the next 20 years, and more likely than not, they'll need to give up their early retirement and work a bit more to make it last and not be too concerned with money later on. I was thinking of giving them a $10,000 Christmas gift this year and maybe do it every few years, but I'm also wondering if I should instead set aside money/save for end of life expenses and care for (hopefully 2-3 decades!) down the road. And if so, would I tell them about this? I'm just curious how others have paid it back to their wonderful parents. Thank you and happy holidays! Sidenote: I'm trying to get them to write their RE story for me to post! They sold their house and businesses at age 56 and bought an RV to travel - they've been at it almost 5 years. It's a big mystery what they'll do next... [link] [comments]  |
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