Financial Independence Retired in 2000? Congratulations on surviving another year (with charts!!!) |
- Retired in 2000? Congratulations on surviving another year (with charts!!!)
- Tracked our net worth to the penny. Just hit 250k. Table/Graph/discussion included.
- Four Years of Needlessly Detailed Record Keeping on Path to FI
- Life After Fire December Update
- Daily FI discussion thread - January 01, 2020
- [2019] Year in review, pt. 2 of what I hope to make an annual contribution
- Weekly Self-Promotion Thread - January 01, 2020
| Retired in 2000? Congratulations on surviving another year (with charts!!!) Posted: 01 Jan 2020 08:38 AM PST tl;dr
Background Last year I posted about the performance of people who retired in Jan 2000. I look at 100% S&P 500 portfolio because a lot of people in the sub are planning on something similar (but mostly because I'm too lazy to look at different portfolios). This analysis doesn't totally apply to me: my portfolio looks very different; I'm planning for a retirement much longer than 30 years (retired in my mid-30s); and I set my SWR differently and don't assume it will stay fixed. So why do I do this? For fun! The data is based on ERN's monthly data on real returns with dividends reinvested through Sept 2019. Since CPI data for oct-dec 2019 isn't out yet, I've appended to his data the nominal S&P returns for that time period. Results Huge returns in 2019 really helped out performance to date!
Edit: Here is the link to ERN's data that I used: https://earlyretirementnow.com/2018/08/29/google-sheet-updates-swr-series-part-28/ . You can use this to look at different asset allocations and to adjust other assumptions. If you don't want to work with the raw data directly, he has some tools in the spreadsheet that will do the analysis for you when you adjust assumptions. [link] [comments]  |
| Tracked our net worth to the penny. Just hit 250k. Table/Graph/discussion included. Posted: 01 Jan 2020 09:44 AM PST I am a pharmacist married to a finance worker. I graduated in 2016 with 179k in student loan debt. We had also just purchased our home around that same time. Current household income of 225k/year plus bonuses. When I was still in school, my spouses's income was 35-40k and it has grown significantly since then. My pay hasn't really changed since I started working. Things that have helped us: Fantastic market returns since the time we entered the work force, 0% APR credit card transfers to save on interest and finance retirement accounts, general frugality in certain areas, and my employer offers an ESPP that we max and liquidate ASAP, this has functionally raised my salary 2-3%. Things that have slowed us down: My mother-in-law moved to the US with a pension of a few hundred US dollars a month. We wanted her close, but not in the same home, so we bought her a condo (rental 2 in the table) in the same building as ours. I got my MIL a job at my company and she works mainly for health insurance, but it also allows her to pay us rent, but its not a set amount and typically not enough to cover the cost of the condo. The negative cash flow on this completely offsets the positive cash flow from the first rental, plus another hundred dollars or so. I am totally fine with this, but it does slow us down. We also have one shared expensive hobby: Scotch. We currently own 92 different expressions, some with duplicate bottles. Hilariously, we own more scotch than we will drink in the next decade, yet will continue to buy more when new expressions come out from distilleries we like. Future plans: Currently aiming to eliminate the student loans ASAP, then go back to maxing every retirement account, and more heavily invest in a taxable brokerage, then when we hit ~$2 million excluding our condo and my MIL's condo, I will retire. My spouse is a worker-bee and doesn't plan on ever retiring, but we have agreed that I should work until we have enough where we could both retire if we wanted, as my spouse wants to eventually switch from the private sector to a non-profit or a do-gooding NGO, and doesn't want salary to be a part of the decision making process. [link] [comments]  |
| Four Years of Needlessly Detailed Record Keeping on Path to FI Posted: 01 Jan 2020 01:56 AM PST Background My wife (30) and I (33) have been married for a little over four years now. I am an active duty member of the military and my wife works for a non-profit organization. I was a saver prior to getting married but didn't fully internalize the idea of Financial Independence until after we got married. My wife is responsible with money but was not a huge saver when we met. When we got married, she had no debt and some money in a 401k (better than probably 95% of her peers) but was not purposefully planning for retirement or anything. I have been tracking our expenses, income, and net worth fairly meticulously over the last four years and thought I'd share what that looks like. FIRE Snapshot The above chart is our one-stop snapshot of our progress to FI. Here is an explanation of the different lines on the chart: Total Assets: Self-explanatory (however it excludes 529 account) Projection: This is our projected Net Worth with our planned monthly $4500 contributions and nominal 9% return. $2,000: This is a projection of our NW with a pessimistic savings rate. $6,000: This is a projection of our NW with an optimistic savings rate. Goal: This line is our FI number. It is adjusted for inflation over time (2.5%). Path: This curve represents the minimum asset growth rate to reach our FI number from our starting NW by our planned retirement date. As long as our actual NW remains above this curve, we will be FI by our planned date. Coast TGT: This curve represents the NW required to meet our FI number by our planned retirement date with market returns only. If our NW crosses this curve, in theory we should not have to contribute any more money to savings and still hit our FI number by our RE date. All-in-all, this chart gives us a quick overview of our plan to achieve FIRE. Income and Expenses Our expenses have gone down over the last four years. This is mainly due to us travelling less beginning in 2018 and continuing into 2019. I was very busy with work in 2018 and we had our first child in December of that year which really slowed down travelling. Additionally, we have managed to keep our other expenses relatively constant over the same time period. Below is our gross income and take-home savings rate for each of the last four years. Our savings rate in 2017 was roughly the same as 2016 but we did buy a new car essentially with cash that year as you can see in the expense charts. 2016: $129,900 / 28.7% 2017: $137,000 / 29.0% 2018: $146,600 / 52.9% 2019: $160,750 / 58.8% Our income is a little non-traditional in that a significant amount of it over the past four years has not been subject to federal income tax. Because I'm in the military, a portion of my pay associated with locality is not taxable. Additionally, in 2015, 2016 and 2019 I spent a significant amount of the year in a combat zone which excludes my income from federal taxes. I keep a monthly graph that shows our expenses and savings in both absolute and proportional measures. Our net worth has increased much faster than I expected as we have been able to save more money over the past two years than I really anticipated. Below is an area chart of our net worth since I began tracking in 2011. We are currently 48.5% of the way to our FI number. We plan on retiring when I hit 20 years of service in the military which will occur in about nine and a half years. Things we have done well: We have done a good job of keeping our living expenses the same or lower while increasing our income fairly significantly. This is how our savings rate has been able to increase so dramatically over the last 4 years. Our savings for 2019 alone exceeded our savings for 2016 and 2017 combined. We've also been disciplined with our investment accounts and continued to chug along through a few market corrections. Things we have not done well: I didn't realize how much our income had been increasing, so in 2017 and 2018, we actually ended up with a decent amount of income in the 22% tax bracket but we weren't taking advantage of all of our tax-deferred retirement planning options. So, we missed out on some tax deferred growth for sure. It's even worse when you consider that we have had dividends paying out in our brokerage account which could have potentially been tax exempt if we had maxed out my TSP. In 2019 we maxed out my wife's Simple IRA which should keep us right about the 12% tax bracket. Moving forward: In 2020, much of my income will again be tax exempt based on time in combat zone. However, we will increase our tax-deferred contributions using my TSP. This will give us an opportunity for some tax gain harvesting before our taxable income makes this impossible again. It's likely that my wife will stop working, at least for a few years, when we have our next child. That is one of the reasons that we are trying to be aggressive now, so we can reduce our required savings in the future to still meet our FIRE goal. [link] [comments]  |
| Life After Fire December Update Posted: 01 Jan 2020 08:36 AM PST I've made an attempt to streamline these updates to keep things more relevant to where they are being posted. To see the previous month https://www.reddit.com/r/leanfire/comments/e4j38o/post_fire_november_report/ to see this month's real estate specific post https://www.reddit.com/r/realestateinvesting/comments/eikkai/december_rental_business_numbers_yikes_tax_time/ I officially FIREd somewhere between 2011 and 2013. The time is not specific because I fazed out my previous business and was still handling my real estate management myself...so if you count from the time I hired a full time property manager and was completely finished will all previous businesses it would be later date. If your definition is more lenient, then it would be the earlier date. Okay, now for the numbers. My net real estate income from existing rentals for the month was $7,580. (The low number this month is because I paid property taxes this month for all my houses for the full year, in addition to the usual minor repairs and property management expenses) If you are interested in the full details of the business numbers, I'll be posting a real estate specific update later today, so check my post history or link above when it is available. Estimated real estate portfolio value $1.32M This is an increase of $10K over last month. Total Acquisition Costs of real estate (including initial renovations) $411,000 My total investments/cash outside of real estate totaled $265,357 This is a combination of stock, Fundrise, money market, and cash. This is an increase of $13,093 over last month. My personal spending was $800 (everything not business related)...details can be seen at my post on r/Frugal https://www.reddit.com/r/Frugal/comments/eiji4c/december_spending_breakdown_how_i_live_on_800_per/ I closed on a house this month that cost $7K, so that effected some of the numbers. I'll be doing the renovations in January, so again that will have some impact. Still managed to grow in all areas despite that expense, though. As always, feel free to ask any questions! For those interested in my yearly numbers of income and spending, I made about $125K net this year from the rentals (haven't finished taxes, so this is an estimate), my investments outside of the rental business made about $50K (all of that was reinvested) and my personal spending was about $10K. [link] [comments]  |
| Daily FI discussion thread - January 01, 2020 Posted: 01 Jan 2020 12:09 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]  |
| [2019] Year in review, pt. 2 of what I hope to make an annual contribution Posted: 01 Jan 2020 01:29 PM PST Hello all, this year in review is something I've been wanting to contribute for a couple of years now. As long as it doesn't break any rules and we continue to get something out of it I would like to make it a bit of a tradition. Here is a link to last year's submission: https://old.reddit.com/r/financialindependence/comments/abc47q/2018_year_in_review_part_1_of_what_i_hope_to_make/?st=k4vrw1qw&sh=78ccf3f9 Background For the last 4 years, on December 31st I always crunch some numbers to see how our finances look in order to get a complete picture. I add up all of our major assets, subtract all of our debts and come up with our net worth and find the year over year changes. I then separately add up our retirement assets (essentially net worth subtracting home equity), figure out what our average monthly expenses were(we have tracked every single dollar in and out of our checking account using YNAB since February 2015) and perform some rudimentary calculations to project how many years from being Financially Independent we are. Note: I actually began tracking all of this in the middle of 2015. So there is a bonus 6 months at the start that can be more or less disregarded for purposes of looking at annual variations. 2019 Financial Results On the whole our path towards Financial independence had a decent year. Our investments performed much better for us in 2019 and we were able to make all of the tax advantaged contributions that were allowed. The fact we had no student loans to deal with for an entire year allowed us to put some extra towards our mortgage every month while also bolstering our e-fund. The biggest financial wins for us this year were an increase in income, a more comfortable emergency fund and the aforementioned favorable investment returns. The biggest losses was having to take out a no-interest home improvement loan for nearly $23k and a non-negligible increase in our expenses all equating to not moving the FI needle forward ouch!
Final Savings Rate: 62% Years until FI (change from last year): 10 (-0) Raw: https://imgur.com/a/ZTKjBAq Thoughts 2019 was a great year, both financially and more importantly for life related things for us. We were able to transition into new jobs that we enjoy more, save as absolute much as possible and had favorable investment returns. There was a lot of job-related stress this year and that's definitely something we need to work on in 2020. The biggest downers of the year came in the form of a leaky 21 year old roof, not having nearly enough time off work to relax and enjoy life, a mostly flat increase in our health metrics(this spreadsheet looks much nicer than the weight loss one unfortunately) and according to the numbers the needle not budging on years until Financial Independence! With regards to that last point though, I think there's some more work to do mathematically because it assumes that our financial monthly expenses will remain the same as they are currently which I do not expect to be the case at all due to factors such as a mortgage and the requisite $600/month in interest as an expense, ugh. There's definitely some trimming of fat that can be done in the budget. In the meantime I look forward to continuing to read these forums, trying my best to not check balances until a year from now and continuing to chip away at that mortgage. If anybody has any questions or tips let me know. Good feedback is always appreciated! [link] [comments]  |
| Weekly Self-Promotion Thread - January 01, 2020 Posted: 01 Jan 2020 12:09 AM PST Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
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