Financial Independence Daily FI discussion thread - August 26, 2020 |
- Daily FI discussion thread - August 26, 2020
- The mods on this sub still delete far too many posts. I lurk but was following a few topics that I hoped would be fleshed out more by several engaged posters, but now they’re just gone. The community has talked about this before and the mods said things would be different, but are they?
- Opinions on FIRE from someone who has always had it
- Unexpected 5 month sabbatical gave a little bit taste of what FIRE may feel like
- Anyone still browse this subreddit even though you've given up the journey to FIRE?
- Unpopular FIRE opinions that allowed me to FIRE
- Has anyone FIREd while supporting your parents?
- Weekly Self-Promotion Thread - August 26, 2020
- What's the best way to live off an investment with no/minimal loss of value?
| Daily FI discussion thread - August 26, 2020 Posted: 26 Aug 2020 01:08 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]  |
| Posted: 26 Aug 2020 05:53 AM PDT Basically title. Maybe this post will also get deleted and I'm crying into the wind, but what's the point of this subreddit if we can't discuss the WIDE range of topics related to FIRE? Let the upvote/downvote mechanism do its job. If folks don't think a topic is relevant, it'll disappear soon enough. What's the use of a front page mostly filled with old daily FI discussion threads? Am I supposed to comb through all of it for a chance I might find a topic that will interest me? I never look at these threads, even if it's the current one, because they have horrible organization (within itself) and the visibility of the topics is nowhere near the attention a regular post gets, and thus garner a much weaker response from fewer members. I'm willing to bet the large majority of redditors that visit do not regularly engage (whether it's read/lurk or post) in the daily discussions, and there's a reason for that. —————— I know the rationale mods gave the last time this was discussed was that they didn't want the front page to be cluttered. I want to highlight leanfire as a counter example. That sub isn't cluttered and contains a multitude of interesting topics. Its members are civil and helpful and use the upvote/downvote function judiciously. It has topics that are 5 days old on the front page. It's not going to be a problem. Yes, this sub is 5x the size and there's a risk of some extraneous content, but just like the legal system in America, where it prefers to let a guilty person go free than imprison an innocent one, I rather let shitty topics through than lose one good one to overzealous moderation. I know the mods have no ill-intent, and I normally lurk and keep quiet, but I really think this sub can reach the next level of helpfulness and promote more stimulating discussion (to even the FIRE veterans) with reduced policing. Thanks for listening to my Ted talk. [link] [comments]  |
| Opinions on FIRE from someone who has always had it Posted: 26 Aug 2020 12:54 PM PDT I see a lot of posts on here talking about how amazing it will be to be financially independent, and retire early. And rightly so. Wouldn't it be incredible to never have to work again? Work sucks, right? I just wanted to offer my perspective. I'm from a FAIRLY wealthy family, and by that, I mean wealthy enough to support me at a low-level income without my really working. I have never been afraid to quit a job, because my family is always there to catch me. I don't pay rent currently, because I live in an apartment that is owned by my family. My jobs usually don't last very long, and I am able to go for long stretches between them without working. Even as I'm writing this, it sounds pretty nice, but the truth is actually a lot dimmer. I struggle constantly with insecurity, and I haven't been able to hang onto a relationship for more than a few months. I'm always searching for purpose, because my life seems meaningless at times. I spend a lot of my days acting out on addictions, just trying to get away from the feeling that I am wasting my life. I don't HAVE to create anything productive, I don't HAVE to add value to the world... so why do it? I feel insecure about my place in this world, because I haven't really earned it yet. I'm not saying to stay in a job you hate, or that reaching for FIRE is a bad goal... but being financially independent, retiring early, not having to work... none of those things in themselves will make you happy. You will just have a different set of problems to deal with. I hope this doesn't offend anybody here. I wish you the best of luck on your goals, and I hope your financial dreams come true. [link] [comments]  |
| Unexpected 5 month sabbatical gave a little bit taste of what FIRE may feel like Posted: 25 Aug 2020 07:12 PM PDT Maybe 5 months wasn't long enough but it was a little reality check/experiment to have a taste of how the future might look like. Back in the beginning of the year before all the craze started, I was kinda on the edge of pulling the trigger or not pulling the trigger... This sub's readers really think I should keep going for a little while longer given that a large share of my assets tie to real estate. And you know how much we all hate real estate in our folio lol! Ok, long story short, I didn't quit cold turkey but opted for an unpaid leave. I left my desk in mid March, then everything shut down days later. Damn!! So my little unpaid leave became a near half year sabbatical. The next two months, I was on the edge since my real estate income took a hit. So I worked really hard on my own stuff.. Lesson #1: When you work full time for Corp America, it's kinda draining... But when you work for yourself, you have the urge to get up the next day and do it all over again without feeling tired. Yes, the stomach still turns, but it feels different. Things turned around at the beginning of the summer and I finally slowed down to the pace of "whatever"... Kids were out of school so I started planning lots of summer getaway to embrace nature and stay away from Rona. Lesson #2: Camping trips on Tuesday to Thursdays were the easiest to score Lesson #3: Driving back home on Friday seeing all the ppl trying to leave the city in a jammed traffic was quite amusing. I am sorry, I shouldn't have said that. Anyway, the summer was super busy with short road trips filling the weekdays with the children. Mother Nature is marvelous for your body and soul. This was the only summer which I didn't leave my home state and it was the best in my memory. it brought the family closer too. No one cared if it were Tuesday or Wednesday... No school, no work. Just endless tress, creeks and birds. It was great. Well it didn't last long.. Aug came too quick and I had to get back to work. I was about 75% ready to work again. Another 25% wished I could have another month or two. Now I am back at work and about to get my first paycheck. It is a massive one since I don't make small amount. Does it have any effect on my quality of life? Well, other than the insurance coverage, not really. But it does buy me a sense of security in some strange way. I don't hate my job so I think I will keep grinding just a little longer. So while I was out of work, I did sell some real estate holding and held the funds in fixed income and growth equity. I know how this sub feels about real estate. I am not going to lie. While I exchanged house equity into equity market, I did feel better with a little bit more security because I can see the number. It's totally psychological but it does have an affect. Another thing I noticed during my absence from Corp America is that the banks don't like passive income ppl. I tried to refi and got rejected cuz I don't have W-2. The bankers told me to call them back once I receive my paycheck again. Heck, don't you guys see my stock holdings can pay off the entire house??? What are you morons?? Well, they didn't care about how much holdings I had and told me to get lost. Thanks for listening to me mumbling.. So in short, a job still has its place if you are not too desperate. After 5 months, I feel a sense of renewal and I actually find some joy with my job. Maybe sometimes you just need a real long break to do some silly things. [link] [comments]  |
| Anyone still browse this subreddit even though you've given up the journey to FIRE? Posted: 25 Aug 2020 08:31 PM PDT I ask because, well, I'm definitely starting to waver a lot in my journey. It seems like I'm constantly recalculating my retirement numbers, irrationally hoping that I'll find some optimism that I could quit in a year, or quit in 4 years. Sadly, no matter which way I cut the numbers, no matter what caveats I add in(e.g coastFI instead of retiring early), there's just no way around the fact that it will take me a really long time to achieve financial independence. Given that, I don't understand why I shouldn't just continue to explore different jobs until I find something I like. I mean, it just seems kind of senseless to willingly be in a spot in life where I'm unhappy when I could just live in the moment. Granted, I think it's worthwhile to practice what is preached in FIRE communities to some extent, since it's pretty rational to tell someone to save money and prepare for the future possibility that you'll want to quit your job, but what's the sense in killing yourself to do that when you hate the job that you have right now? So, with that being said, any of you "lost your faith" so to speak? Did you come back, or have you grown into a more lax view of FIRE? [link] [comments]  |
| Unpopular FIRE opinions that allowed me to FIRE Posted: 26 Aug 2020 10:04 AM PDT I realize most of my posts get down voted into oblivion anyway, but I'm ready to embrace that. Much of the reason for "hate" is that I've done things a little (or a lot) unconventionally. Not because I was being contrarian, but because I was already an early retiree long before I discover there was such a thing as FIRE, JL Collins, MMM, Vicki Robbin, etc. In some ways I'm glad for this, because I might not have been able to retire as early as I did by following the conventional wisdom. In other ways, it would have made things much easier by having all that collective knowledge to draw from. The point of this post isn't only to share it is okay to do things your own way from time to time, but to encourage discussion in the comments about things you do that are not kosher in the FIRE world. My major mistakes that I wish I had a do over on.... 1) When I first began investing in stocks, to my knowledge ETFs didn't exist. This was in the 80s when things were handled by telephone transaction to a shady guy who promised you he knew a lot of secret knowledge. I was young and stupid and let one of these guys handle my investments. To this day I don't know what happened to him or my stocks. My next attempt was in the mid 90s when computers were more common and I could take control of my own stock picks through a new platform called Sharebuilder. I did my best, but I'll never really know for sure how I did compared to an index. I subscribed to the Motley Fool Hidden Gems letter and bought everything they recommended along with my own picks. Some did well, some went to zero, some traded flat. To sum up, my early years of investing in the stock market were pretty much a mess. 2) I didn't take advantage of a free higher education. Between my athletic skill and my high academic scores I had a chance to go to college completely free...and when I say free...I mean the 100% full ride of all school fees, meals, housing, etc. But I also have social anxiety. I had attended one rural school my entire life with people I had known since K. The new environment was so stressful for me I stopped attending classes and dropped out my first year. 3) I was underemployed most of my life when working for others or struggling to start my own business. I ended up with a food service job (high end, for the most part) that I did really well at. I was given all sorts of managerial responsibilities. I never asked for raises or official promotions, so allowed myself to be very under paid for the work I was doing. My priorities were elsewhere at the time as by that time I was in a band...this kind of became a theme for my early adult life. My creative projects were more important than my income. Even my entrepreneurial leanings (of which there were several projects) were all about creativity first, making money second. Not sure I really regret that though. Things I'm glad I did unconventionally.... 1) Started buying houses in cash. (a huge no no to most people!) I cashed out most of those stocks I mentioned above to start buying houses. (what? you're risking your future!) In cash. In a LCOL area, of course. I bought fixer uppers with absolutely no background in real estate. I hired people to do the work...and learned everything I could on my first few projects. Luckily I'm good with numbers, and I also seemed to have a knack to find undervalued houses with good bones that made ridiculous rental returns after being fixed up. This soon funded itself from the rental income and I was able to grow fairly quickly. That wouldn't have happened if I had listened to what I now know is the conventional wisdom. Would I advise others follow that path. No...not unless they had a similar market to invest in. Trying to repeat this in some areas of the country would not only hurt your returns, it could lead to financial suicide. 2) I set out to find the optimal way to invest in the stock market FOR MY SITUATION. The rentals provide me a steady income, so I knew I could take extra risk in my stocks. After tons of research I discovered the optimal return for me would be based on high dividend stocks in combination with leveraged index funds. I know, I know. I know all the arguments about dividends. For the most part they are true during the accumulation phase. What is often not discussed is everything changes during the draw down period. Dividends lessen your sequence of returns risk since you don't have to sell into down markets to still get income. Sometimes a $1 is not $1 when it cripples future potential returns. There are research papers that go into this in detail, but the math is solid. And I also know leverage index ETFs are poison to many. DECAY! Yet the few papers that address this in real back testing rather than theory show leverage outperforms by a significant margin over most market cycles. Long term, this really adds up. Does this mean I advocate for other people to do what I am doing. NO! Don't do it. I wouldn't be doing it if I didn't have secure income to last me well past my death. My stock accounts will be going to fund charities after I die, so I do want them to do well, but if they don't, it won't have any impact on my retirement. While my exact mix does extremely well in back testing, anything can happen. 3) I live an extremely frugal life. I spend only $10k per year for the last several years, which is well below poverty levels. This doesn't mean my life in reality is impoverished...my house is paid for, my cars are paid for, etc...and I've found ways to monetize many things that cost a lot of people money. That doesn't change the fact that I KNOW many people would not be happy living the way I live. They would be miserable. I am not, so it works for me. I enjoy the "game" of frugality and low waste while still living a very fulfilling life. 4) I don't have insurance. I carry only the minimums I'm forced to carry on things. Other than that, I try to self insure. I fully understand why most people think I'm an idiot when it comes to this. My argument is that I can set that money aside and insure myself rather than having huge portions of that go to pay for the infrastructure of the insurance companies. In theory, if I'm a healthy adult with deep pockets paying out of pocket should be cheaper in the long run. If not, insurance companies wouldn't be making money. Same reason I don't buy the extended warranty on electronics or other items. Again...I know the other argument, and it is also valid. I don't want to argue the point in the comments because I have discussed this topic to death elsewhere in other posts. 5) I don't have children and don't plan to have children. You do you. If children bring you joy...well, enjoy! I don't hate children. It is just part of my personal philosophy to not bring more life into this world. Long story, not easily summed up in a post like this, so I'll leave it at that. 6) I invest a substantial amount in a relatively new platform. (Fundrise) My risk tolerance in this sort of investment is high (much like my stock portfolio) and it gives me diversity outside the stock market and my local real estate market. I don't think the platform will fail, but it is technically possible. As with everything else on this list, I don't recommend others do it if it isn't money they can stand to lose. This is another investment that will fund a charity some day. 7) I didn't want to list everything in detail, but there are many other things I do that falls outside of the conventional FIRE wisdom. I'm sure I've touched on some of these in the past, and this post is already long. Very long. IF you made it this far, congrats. So...that is the silly things and maybe a few wise things I do to buck the standard advice. I'd love to hear from others the things they do that don't conform to typical FIRE norms. As always, I'm an open book so feel free to ask questions or tell me how stupid I am! [link] [comments]  |
| Has anyone FIREd while supporting your parents? Posted: 26 Aug 2020 11:16 AM PDT I know of course I can just take this to my budget plug in the numbers and I can determine on my own if this is feasible. But I'm really asking from a moral/ mindset standpoint. My parents are "struggling" middle class. The typical "immigrants, 2 story home but accumulated 200k in debt because of job losses over the years". They paid my college in full and are always there to support me so I owe them my success. My intent isn't to hand them money. But maybe I'll buy a home and have them rent it from me. Im just looking to see if anyone's been in a similar situation and helped their parents in some big way and still feasibly FIREd by ~50. (26 years old, ~100k NW, 95k salary, full max out all accounts possible, emergency fund full, no property) [link] [comments]  |
| Weekly Self-Promotion Thread - August 26, 2020 Posted: 26 Aug 2020 01:08 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]  |
| What's the best way to live off an investment with no/minimal loss of value? Posted: 26 Aug 2020 03:33 PM PDT People often cite that the stock market returns ~7%, on average. I was thinking about what this means from a retirement goals perspective: if one were to save $1m they could hypothetically live off just the growth and/or dividends from that investment, averaging about $70k annually, while not actually losing any value (i.e. staying around $1m). Obviously, the stock market is incredibly unpredictable, so that 7% average will manifest as -30% or worse on extraordinarily bad years and +30% or better on extraordinarily good years. So my question to the group is: what's the best way to set yourself up to live off $1m while retaining as much of that investment as possible. To make this more achievable, we could lower our annual income target to something like $40-50k, so an average year will stay invested as growth beyond the original nest egg, or build back up to recover from bad years. Originally I thought a dividend fund would be perfect for this. You'd never have to sell, and instead just live solely off dividend payments. But I looked at funds offered by Vanguard and found that they don't pay much, maybe ~3% annually plus or minus. So on our $1m egg, we're only getting ~30k annually, and I think we're paying regular income tax on it. The best option I can think of would be to invest in an whole stock market fund like VTSAX, sell off annually down to $1m. On good or even average years this would give you a cash buffer so you wouldn't have to sell as much or any on bad years. This plan goes south if you start off during a downturn and have to immediately start selling below $1m in order to live, that seems like it would cause a snowball effect that you could never recover from. But if it works, a big benefit to this is -- if it's your only income -- your capital gains will likely fall into the 0% tax rate after the first year and you'd pay nearly no taxes. I'm sure I'm missing a much better alternative to those options. Any ideas? Anyone doing anything like this that's working? [link] [comments]  |
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