Financial Independence Daily FI discussion thread - January 24, 2020 |
- Daily FI discussion thread - January 24, 2020
- FIRE: 2 years in, a few (more) reflections
- FIRE for tradesmen/tradeswomen
- Not taking FIRE too seriously - how 'frivolous' expenses might actually help you reach your goals.
- Weekly FI Frugal Friday thread - January 24, 2020
- Using a Roth Conversion Ladder with a Roth TSP account?
| Daily FI discussion thread - January 24, 2020 Posted: 24 Jan 2020 12:08 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]  |
| FIRE: 2 years in, a few (more) reflections Posted: 24 Jan 2020 12:45 PM PST Last year I wrote a reflection on my first year of FIRE. It got a lot of traction and seemed well liked so I thought I'd write the year 2 version… Here is the first one if you want to see it: My background: I'm a scientist in my mid 40's who got into the big data side of tech just as it took off. I worked for a few large companies, and a few small companies, both as an FTE and consultant. During one of my "no job, no consulting" periods in the late fall (notoriously hard time to find a new job as everyone is on vacation, spent their budgets, etc.) I fell deep into the bitcoin rabbit hole researching what it was, what it might become etc. I bought in a few times and sold my holdings in December 2017 (not at the peak, but close) for about 1.5M. I had saved a shit-ton of money over the years (almost 1M) because I never spend other than buying/fixing up my house. The FIRE idea was natural to me – I had an instinctual aversion to debt, simple tastes, and grew up without a lot (but didn't feel like that was an issue). My job was not really going in a direction I liked, and I had just cashed over a million post-tax cryptobucks so I quit. I figured I'd try being unemployed, maybe call it "semi-retirement"? With all my retirement, bank, and stock accounts bundled together, including house equity I had close to 4M. Since retirement my portfolio has grown an additional 10% (after my living expenses) to 4.4M. Reflection 1: I'm not scared of the market anymore Maybe "scared" is too strong a word. Right after I quit my job, the market started dropping. Everyone says "don't watch the market" but I couldn't help it. I JUST STARTED the next phase after all. Well, everyone is right – ignore that shit. I felt a little bit off at first – and I mention that in the first post last year. Now… it truly is not a big deal to me, I just grab the data once a month because I like to track it. I have a balanced portfolio and plenty of time. Not worth the sweating over. I feel I am truly ready for whatever the next real drop ends up looking like. Reflection 2: I'm used to the lack of cash flow now After watching my bank account grow twice a month, and having to move money into investments every so often, I got used to it. Not having that as part of my financial journey anymore felt weird. Having to take cash (from dividend payments – this is my primary cash flow source now) out of my account to fatten up my bank account felt super weird (money goes IN there, not OUT from there.) I had tracked my spending for several years prior to FIRE, and now that I am there I also tracked it and I basically spend the same amount so moving cash to the savings account every once in a while is the new norm. Reflection 3: I'm willing to spend some of that money (wisely) now At first I felt a little bit poor again – the money inflow was slow, new, weird. I didn't want to mess it all up somehow. I've never been a big spender to begin with, but it felt like I was "on a special budget" or something. Why the hell would I FIRE if it meant I had to act like a pauper to do so (respect to my LeanFIRE friends, but that's not my deal)? So now I'm willing to dip in a bit to make things work for how my life is shaping up post-work. I moved to a new city (renting) and rented out my house back in the old city. I'm considering buying a house here. I might sell my other house in a few years. I have options and the money makes those options broader. I might not execute these moves with economic perfection, but the money I have makes me feel like some slippage is not going to wreck me. Up until now, I have considered the brokerage stocks to be on untouchable lockdown. That is no longer the case if I can convert the money into what I need to be happy here in this new city – and I realize now that I really hate renting. Reflection 4: Sometimes I feel like it isn't quite enough (how the fuck) Some people will always complain that their lump of gold isn't big enough, and I tend to think those people are pain in the ass jerks. That said, I realize that there are times I wish I had a bit more… to put into special projects or pursuits that did not dip into my block of savings. One Idea I have had is to do some pick-up work and use 100% of that money for special projects and no savings. I haven't quite figured it out yet, as these are just ideas right now, but the big revelation is that I thought I'd be done with feeling like I needed ("wanted" is a better word honestly) any more money but if I am being honest, that is not the case. Reflection 5: I thought I might want to do some work – I was right I took on a little work, but not too much. I helped a friend define and scope out a professional pivot and we figured out a way to do some additional work together. Working with him after 16 months off was really fun, and reminded me that I have some pretty cool superpowers that others do not. I think maybe you get so used to doing your thing in your groove that it becomes hard to take a bystander view. Applying myself to his situation which had some overlap to my old work but was also novel in many ways, and adapting my strategic consulting on the fly was quite satisfying. Drinking whiskey while consulting might have helped. That kind of work makes me feel a particular kind of excitement that I don't get in other places. I need to learn how to tap into that more. Reflection 6: It's ok to do nothing sometimes While I always had a great work ethic, I've never been a person to endlessly grind. I appreciate quiet reflection time, or do nothing except stare at the water time. Now that I am FIRE, and only working every once in a while (seriously – not a lot) I can forgive myself if a day or more goes by and I haven't done anything particularly useful. I no longer view it as "wasting time". I also think of all the days I went to work, mucked with emails, cranked the levers of industry, and went home, made a fire and drank a beer and ask "how different, to me, truly, is what that was vs. what this is from a personal growth, usefulness, or other internal concept?" The answer is basically "they are the same." In closing I've acclimated to my new method of financial cycles. The discomfort in the novel has faded. I'm in a bit of a spot where it's hard to make certain types of plans due to my aging parents and the potential for radical changes in their lives that I want to be able to help them navigate. It's not radically tying me down by any means, it just changes the scope from "100% complete autonomy and freedom" to something a little less so for a bit. I've taken up a bit of woodworking. I went to physical therapy for my lower back and have really focused on getting that in order – it feels better than it has in years! I cook a bit more. I read books. I write essays. I'm involved in an online community working on some future technology in the cryptographic space. I take a lot of walks. I'm never bored. I feel like I'm in "phase 2: acclimate and relax." Happy to answer any questions. [link] [comments]  |
| FIRE for tradesmen/tradeswomen Posted: 24 Jan 2020 09:45 AM PST Hello all. I recently listened to a podcast centered around early retirement for men and women in the trades. There were points made about the solid income/earning potential of tradespeople (particularly those who own their own company) that would make it seem like a sure way to accomplish a high net worth, and be able to retire early, but that it just doesn't happen as much as one might would expect. I am 26 years old and 15 months into a 5 year plumbing apprenticeship and am loving it! I see those around me (both employees and owners of their own plumbing/heating business) doing very well in terms of income. The potential for supplemental income through side work outside of the 40hr/week can not be understated. Most people I see and have met who are into the idea of early retirement are mostly of the tech/corporate world, so was just looking to hear from those who have chosen this career path. If have achieved FIRE what was your path like? Did you start your own company as soon as you were fully licensed and insured? Did you ride it out with your company to maximize retirement account matches while building your side business to stand on its own legs? Did you find it easier/harder than you expected? It's no secret that the trades can wear you down - physically and mentally so although I'm far from doing my own thing I'm just trying to wrap my head around what others experiences have been like. Thanks! TL;DR : currently an apprentice plumber in new construction/remodels in a pretty booming market, curious to hear about other tradespeoples fire journey. EDIT: this is a link to the podcast for those interested - I would basically double any numbers they use. At least in my trade/market rate https://open.spotify.com/episode/7accRAGtW0cNqTJt6rs6vt?si=1Bkw6sT4QNiM2k_8wfh4CQ [link] [comments]  |
| Not taking FIRE too seriously - how 'frivolous' expenses might actually help you reach your goals. Posted: 24 Jan 2020 09:45 AM PST Hello all! I am relatively new to following this community, but I have enjoyed the discussions and technical guidance that many of you have to offer. I consider myself a very financially-minded person (not a financial or investing expert by any means), however I am also a person who places balance and moderation above all else. For reference, I am 30M, married w/ no kids, in a HCOL city. While I genuinely have a lot of respect for those who are willing and able to micro-analyze their cash flows, optimize their retirement portfolios, and generally live a lifestyle well below their means, I also think that there is an important aspect of striving for FIRE that I don't think I've ever seen discussed here : sometimes spending a little extra money on things like nicer clothes, nicer car, going out to eat, etc, can actually benefit you in the long run as you work towards FIRE. Mostly I'm thinking of this in the context of one's professional life, but I'm sure you could apply this idea to personal management as well if you wanted to. Allow me to explain before I get criticized for being materialistic:
Anyways, this is just my 2 cents. I would really enjoy a discussion on this topic so please share your own thoughts and experiences! [link] [comments]  |
| Weekly FI Frugal Friday thread - January 24, 2020 Posted: 24 Jan 2020 12:08 AM PST 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]  |
| Using a Roth Conversion Ladder with a Roth TSP account? Posted: 24 Jan 2020 04:40 PM PST I'm in my early 30s and have been a full-time federal employee for about four months. I like my job but have been pursuing FI in case my job were ever eliminated so that I can have the option to RE. I've been reading about Roth conversion ladders and how those who have gotten FIREd can use conversion ladders to get money out of 401(k) plans. I've been maxing out my Roth TSP since I started working for the government. Right now my TSP balance is about $5k in Roth contributions and earnings and an additional $1k in Traditional matching balance and earnings. Am I still eligible to do a Roth conversion ladder with a Roth TSP, or will the Roth part rollover tax-free, with taxes being paid just on the Traditional balance? If I did a conversion ladder to a Roth IRA in the future, regarding the Roth portion, does the total balance (principal + growth) become treated like just principal for the purposes of early withdrawal, or is it just my contributions that are able to be withdrawn penalty-free? [link] [comments]  |
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