Financial Independence Daily FI discussion thread - July 08, 2020 |
- Daily FI discussion thread - July 08, 2020
- Reached FIRE goal last year...I’ve learned the fun part was working towards it.
- [UPDATE] Making 1M/year in very unstable job. What's the best thing to do if/before the job crumbles?
- Surpassing $350k NW thanks to this sub
- Schwab low-cost funds for simple portfolio
- Weekly Self-Promotion Thread - July 08, 2020
| Daily FI discussion thread - July 08, 2020 Posted: 08 Jul 2020 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]  |
| Reached FIRE goal last year...I’ve learned the fun part was working towards it. Posted: 08 Jul 2020 05:18 AM PDT Pretty self explanatory from the title. this is truly a classic instance of "enjoy the journey" on display here. It was a lot of fun working and strategizing how to get to it than sitting on it, but I also would have done some things differently had I known it's pretty anti climatic once you reach it. Lessons learned and advice: -Let yourself have small luxuries along the way. Scrimping and saving is great of course, but you also need to practice spending (believe me, I know this sounds ridiculous but I didn't practice spending and now have analysis paralysis about buying a $1.50 shirt at Goodwill. Really. this is a real example from last week). -cherish and celebrate each milestone leading up to your ultimate FIRE number. these are just as exciting, if not more, because you are slowly proving to yourself you are able to do this. that thrill of the first $100k, $500k, etc. is important and will feel quaint and cozy looking back on it, so make it a memory worth remembering. -Never, never, NEVER put your work above your relationships. I made this mistake. It hurt my relationship. I did this 4 years ago and am still repairing the damage. If your job is causing so much stress that you can't sleep or it's all you think about, seriously consider how to responsibly down shift and then DO IT. Don't let a desire to maximize your income destroy the unquantifiable good things in your life for the sake of hitting your number sooner. -physical and mental health are also more important than your FIRE timeline. I learned this the hard way and now will live the rest of my life with a small work-related injury I got by ignoring cues from my body to slow down and rest. I regret this deeply—don't make the same mistake. Prioritize your health over impressing your boss, getting that promotion. building a go-getter reputation—whatever it is, I promise you it won't matter as much the rest of your life as having an intact and functioning physical self / mind. [link] [comments]  |
| Posted: 08 Jul 2020 05:44 AM PDT Over a year ago I made this post. I've forgotten my password (and email, I think I signed up with 10minutemail), so I made a new account. I spoke with moderator u/ivigilanteblog to verify my identity. Since there were a few doubters on my last post, here's my gold play button. My first post was way more popular than I expected, so I thought I would make an update post in case anybody was curious. Also, I thought I would answer more questions about my business / finances / investments since there seemed to be a lot of interest. Here are the biggest events and things I've learned: 1. I fired my "financial advisor" and hired a fiduciary + accountantI originally worked with a financial advisor who got me into American Funds. A lot of people told me that AF is terrible and my financial advisor was super sketchy. Turns out, you guys were right! We never paid him a fee for his advice, so he was working on commission. We fired him, did a bunch of research, and interviewed half a dozen fiduciaries before picking one. Our experience with the fiduciary is COMPLETELY DIFFERENT from our experience with the financial advisor. Looking back, the FA clearly came in with an agenda trying to prove to us how great American Funds is. Our fiduciary is clearly more objective and is more focused on learning (learning what our goals are, and helping us learn how to manage money). The fiduciary costs $400/mo with a minimum 12 month contract. I would say that they are worth it so far and have paid themselves off. They answer all my questions and guided us through the covid craziness. Every month, they give us a breakdown on things to buy, and they adjust the allocations based on what I say I want to invest in. My accountant has been equally amazing. He has paid himself off by helping us secure some tax breaks. I would definitely advise business owners to hire a professional accountant. I would maybe advise getting a fiduciary; the more money you have, the more it makes sense to pay for one. 2. This subreddit is right about a lot of thingsYou people are geniuses! Brilliant! Wise beyond your years! I actually went through my entire Reddit post with my fiduciary to help better understand the advice I was receiving. They explained the nuances of each response I got, and by and large the message was: these redditors know what they're talking about. I mean, sure there were some replies they didn't agree with, and some replies they felt didn't exactly apply to my situation. However, the overall impression I got was that this subreddit is right about a lot of things. Invest in low cost index funds. Seek ways to save tax dollars. Buy and hold. Don't panic sell. Most of their advice echoed the advice I received here a year ago. 3. I invested in arguably the worst possible time and I'm already in the black againI spent Q2 interviewing fiduciaries and getting all of my accounts/taxes figured out. I spent Q3 and Q4 diving into the stock market. Each month, I invested more than the last month. Investing in a market peak right before a crash is ostensibly the worst time to invest, but actually it didn't even matter. I resisted the urge to panic sell, and continued to invest regularly as the market crashed. My investments have already recovered and I'm in the black. This trial by fire has tempered my resolve, and it will be much easier to weather future downs in the market. My investments did not outperform the Nasdaq, though. That's not super surprising because tech has done really well through covid. 4. I don't understand how this keeps happening but I'm making more fucking moneyIn 2019, I made a smidgen over $1 million. I was really expecting that to be my ceiling and Q1 2020 supported that with slightly plateaued growth. However, every once in a while I had a fan ask me to make a certain type of content (being very vague here so as to not reveal myself). I ignored them because I didn't think there was any money in that content. One day in Feb, I was feeling bored, so I decided to experiment and published some of that content just for fun. That content has turned out to be extremely successful and wildly profitable. That content made about $40k in June alone. The crazy thing is it only takes me about 30 minutes/day to make. It has my best time:profit ratio by far. Also, I adapted my main content a bit and rallied in Q2. I made about $125k in June from my main content, adding up to $165k profit in June. July is on track to be higher. On Jan 1 2020, I projected $800k – 1.2M for 2020, but now it looks like $1.5 – 2M is a more reasonable estimate. It might actually be 2M+ if my side hustle keeps growing like it has been, but I'm very new to this type of content so I don't know how it grows or performs over the long term. My current net worth is $2,005,658 (hitting this number inspired me to revisit my old post, and then write this update). We've got $800k in the house, $200k in cash, and almost all of the rest is in low cost index funds. 5. So, now what?The past few years, my career has exceeded my wildest expectations. I'm starting to realize that I can basically envision a life that I want, and then just pay for it. At the moment I really enjoy my job so I don't have any intention of quitting. My original investment goal was $2.5m, but I am rocketing towards that goal and will pass it in 1-2 years at this point. My wife and I are thinking of maybe retiring between 5-10M invested. She makes about 90k/year and talks about quitting literally every week, but hasn't because (if I'm being honest) she's too proud to sit around and do nothing while I work all day. She spends a lot of her time looking at beach houses on Redfin in the $1-3M range. I have also felt the siren call of lifestyle inflation. Ultimately, I don't know what the future holds. My plan is to milk this career for as much as possible, and as long as possible. I brought up the idea of making deposits in my wife's mega backdoor as some people suggested, but she insists that that'll never happen no matter how much I make. I wanted to thank everyone for the advice you gave me on my last post. It has truly helped me secure my future! LMK if you have any questions and I'll try to answer. Also, please respect my anonymity... you guys are hilariously bad at guessing who I am anyway. Nobody was even close on the last post. [link] [comments]  |
| Surpassing $350k NW thanks to this sub Posted: 07 Jul 2020 06:21 PM PDT I wanted to really thank the quality of advice on this sub and r/pf for really helping me get to where I am today. I am 31F working in tech(non-engineer). I am really proud of myself for taking the time to gain invaluable knowledge to grow my net worth to what it is today. I have been able to more than double my net worth in the last 2.5 years, with the help of this sub. In 2019, my total income was over $200k, which I was stunned at, but really shows the power a growth company (non-FAANG) can have on your NW. I have worked for a tech company for 5+ years in a VHCOL city and didn't always sell my RSUs/ESPP, against conventional wisdom, but it paid off for me last year when the stock took off and was up over 100% YoY at some point. I took advantage of that and sold a lot (but not all) of my stock. My NW was down about 50-60k during the March 2020 selloff but has more than recovered since then. I have more than recovered from that low, up about 92k from the low. I stuck with the advice that I've read on here and didn't panic sell. I kept my investment allocation to what I was comfortable with(70% stocks/ 30% bonds/cash) and it rode it out. I believe that having some cash available in retirement accounts is good for when the market sells off. I know it's not the advice always given here but I believe it works for me. I try to keep about 10% minimum of cash in my retirement accounts just in case. I max out my 401k(19.5k+4.5k match). I stopped contributing to my IRA/Roth IRA a few years ago once I hit the income caps. I currently have about $170k among my 401k/Roth IRA/IRA accounts. I am hesitant to do the mega back-door Roth because I'd have to pay tax on the amount I have in the traditional IRA(~15k) and I feel like my tax rate is high as it is. I know it's a one time hit but I am saving money for a condo/house instead. I am not in a rush to buy a condo/house right now but continue to save up for one in the near-term(1-3 years probably) which is why I have a lot of cash on hand($100k+). I know it could be invested but in this environment I am too nervous at the potential of losing some of my savings. I also don't know if I am ready to be a homeowner as the thought stresses me out. I think there are so many things that could go wrong(like repairs) and I don't know how to really fix anything. Right now, I like the convenience of renting but I know I am not building equity. I also sometimes wonder whether I am saving too much for retirement but I continue to max out my 401k because I believe it's the prudent thing to do. I am targeting $2.2-2.4M for retirement with a 4% withdrawal rate. It's hard for me to estimate my retirement expenses so I think ~$85k/year should be sufficient for now but I don't know. This is not factoring in any income from a potential partner either. I have no student loans, my car has been paid off for a couple of years now, and I pay my cc bills in full each month. This gives me flexibility, security, and financial freedom. Arguably, my rent is high (~2900/month) but most of the other spending is discretionary and during quarantine my expenses have come down and my biggest expense is probably groceries and things from Target/Costco(~$300/month). I try not to eat out as much as possible and max spend $100/month but normally closer to $50). For those of you who are new here or are unsure about getting on board with the advice you've read here, I can attest to it and it's really made a positive change to my life. I feel stable and secure financially, which I have learned is one of my most important values, which puts me at peace. I am thankful. Thank you. [link] [comments]  |
| Schwab low-cost funds for simple portfolio Posted: 08 Jul 2020 04:09 PM PDT I had to move to Schwab (long story, not relevant to this question) and I'd like to get people's suggestions on building a simple portfolio for passive/index investing as I can't take advantage of Vanguard funds like VTI, VXUS, etc. Are there any blogs / resources specific to Schwab funds that are low-fee and could comprise a simple 3 or 4 fund portfolio? [link] [comments]  |
| Weekly Self-Promotion Thread - July 08, 2020 Posted: 08 Jul 2020 01:07 AM PDT 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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