Financial Independence Daily FI discussion thread - September 02, 2020

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• Daily FI discussion thread - September 02, 2020
• My path to $1.1M at age 39
• FIRE and bullshit jobs
• Revisiting the 4% Rule - Using Shiller CAPE Ratio & Inflation to Determine WR
• $1.00M on the nose
• FIRE portfolio suggestions
• When market returns exceeds gross pay
• Weekly Self-Promotion Thread - September 02, 2020
• In Search of FI (Canadian Edition!) - 50 Months of detailed NW tracking + Career tactics used! [29M|225k]
• Real talk - social security benefits (US)
• FIRE and finding self-worth in a capitalist society
• Has the halts on evictions changed the minds of those who planned on using rental properties as an outsized part of their retirement income?

Daily FI discussion thread - September 02, 2020 Posted: 02 Sep 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. submitted by /u/AutoModerator [link] [comments]

My path to $1.1M at age 39 Posted: 02 Sep 2020 08:25 AM PDT About me: Marital Status: Never married and no kids Occupation: Electrical Engineer, Same employer for 15 years Location: Upstate NY Bottom Line Up front: Total Net Worth by Year Distribution of Income by Year (where my earnings went) Distribution of Income by Year (as a percentage of total income) Notes: Taxes include federal, state (NY) and property tax (~$3k) 2005 was a partial income year. I graduated in May and started working immediately. 2020 data is extrapolated / estimated The charts are the result of mining my financial and tax records to put the story together. I hadn't been monitoring my NW until last year. 2005: Graduated collage - I only had about $40k in school loans when I graduated in 2005. People graduating today won't have it quite as easy since tuition doubled (at my school; others have more than doubled). But you can still do some of the things I did to minimize expenses. First, go to a community college for the first two year and then transfer to university after that. This essentially cut my tuition in at least half. Plus, I lived with my parents in those two year and saved on room and board. Also, when I went away to university, I lived off campus in an apartment with friends. This ended up being cheaper and more fun. 2006: Purchased home for $61k – It's a modest home in a LCOL area. This was a tough decision at the time because I could have afforded much more. But I am glad I didn't make myself house poor. The house had everything I needed, and I enjoyed doing affordable upgrades. In the years to follow, I would contribute to 401K up to my company match, max out Roth IRA and the rest would go to debt. A financially savvy person wouldn't have paid off my mortgage so quickly. But given the crappy stock market performance in those years, and relatively small loan, I am not sure it made much difference. 2011: Mortgage was paid off For the next 8 years I was on auto pilot. I was single and spent a lot of time working. Didn't increase my spending much at all and my increases in salary went to savings. I still enjoyed life, traveled whenever the opportunity came up, and did little things like having my shirts dry-cleaned (because I hate ironing). But otherwise didn't spend a lot of money on material things. 2019: I found this sub and started looking at my finances closer. Before this, I hadn't every added everything up to determine my net worth. I knew I was in a good spot, but was pleasantly surprised to see my net worth over $800k at that point, then watched it cross $1M at the end of 2019 (when I included my home equity). The really great thing though, was when the market tanked after covid, I was knowledgeable enough that it didn't faze me at all. I knew the market would go back up and it did. A few changes I made after becoming more financially educated: Set a FI goal and started a spreadsheet to track progress Changed my Roth 401k contributions to Traditional (should have done this years ago) Started mega backdoor Roth IRA contributions Put the $100k from my High Yield Savings (HYS) into the market That's about all I have to say. Cheers! submitted by /u/New2ThisThrowaway [link] [comments]

FIRE and bullshit jobs Posted: 02 Sep 2020 02:29 AM PDT Bullshit jobs I recently read David Graeber's Bullshit Jobs: A Theory (2018) and came to the belated realisation that after more than a decade in the workforce, I've really only had bullshit jobs. For those of you who aren't familiar with the concept, here are some snippets from the book: A bullshit job is a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case. Bullshit jobs often pay quite well and tend to offer excellent working conditions. They're just pointless. Shit jobs are usually not at all bullshit; they typically involve work that needs to be done and is clearly of benefit to society; it's just that the workers who do them are paid and treated badly. … we have established three broad categories of jobs: useful jobs (which may or may not be shit jobs), bullshit jobs, and a small but ugly penumbra of jobs such as gangsters, slumlords, top corporate lawyers, or hedge fund CEOs, made up of people who are basically just selfish bastards and don't really pretend to be anything else. The three-part list is not meant to be comprehensive. Those who work bullshit jobs are often surrounded by honor and prestige; they are respected as professionals, well paid, and treated as high achievers – as the sort of people who can be justly proud of what they do. Yet secretly they are aware that they have achieved nothing; they feel they have done nothing to earn the consumer toys with which they fill their lives; they feel it's all based on a lie – as, indeed, it is. See also Graeber's original essay on the subject. It's not that I've ever sought out bullshit jobs. Bullshit just came and found me. Over the years I tried a few different lines of work, even pursued lower paying public sector jobs in the hope of finding something worthwhile. They all turned out to be bullshit, the sort where I was just ticking a box or plagiarising someone else's work for a report noone would read ("intellectual masturbation"). At this point in my career – if you can even call it that – I've pretty much lost all hope that I will ever find a well-paying non-bullshit job. Of course I'm not saying that well-paying non-bullshit jobs don't exist, just that statistically I'm not likely to get one. I suspect my jobs have been consistently bullshit partly because I don't have any real specialist knowledge and skills (the knowledge to be a doctor, for example) and partly because I've naturally gravitated to higher paying jobs (bullshit jobs tend to pay better than shit jobs). I also haven't been driven enough to get a really high-powered job (Graeber's third category), the sort where you dispense with the pretense that you're not a selfish bastard. My bullshit job I'm currently a risk analyst in a global financial institution. My job is ostensibly to produce risk reports for internal and external consumption but because of my employer's conflicts of interests, I'm discouraged from doing any real analysis. I understand the existence of my job to serve two purposes: (1) to tick a box so that the organisation can say we've analysed the risks, and (2) to increase the team's headcount and thereby boost my bosses' standing in the organisation. It's a classic bullshit job. The downsides: The organisation is highly hierarchical and I have little control over my work. Anything I write can be changed at any time by managers who have very little knowledge of the subject matter. This is obviously very frustrating and I now deal with it by putting minimal effort into any work. The culture in my team is poisonous. Employees rarely get fired and generally don't leave (on account of being overpaid) so there's little chance the culture will improve. I'm sickened by the falseness and the relentless office politics. The job is 90% pointless. I'm a parasite on society and whatever skills I had in my field have atrophied. The perverse reality is that I would actually be more happy in my role if I didn't have any related skills or knowledge, since then I wouldn't know right from wrong. The upside: By cutting corners, I've managed to find carve out at least half of my work week for my own projects, mostly reading books and playing computer games at my desk. Thankfully I have my own office. FIRE My personal circumstance: in my mid-30s and married in Shanghai, China with two small children. We've always tried to live frugally, although obviously many people in our city get by on much less. Our basic stats (in USD): Income: $238k p.a. (75% is from my bullshit job) Spending: $46k p.a. Net worth: $1.6m, including $800k equities, $240k cash and fixed income, $1m real estate (no car, no other retirement accounts) and $440k debt (mostly home loan) It looks like on paper we're close to being able to FIRE but there are some important things holding us back: We're fortunate in being able to keep expenses low living in Shanghai but I don't imagine that this will continue indefinitely. I'm sure costs will increase as the kids grow up and we do plan to eventually move to a country with HCOL, e.g. UK, US, Australia. I'm very concerned about future long-term returns given the current state of financial markets. We don't yet have a concrete plan on what we'd do if we were to retire early. It occurs to me that my job (and other bullshit jobs) could be a potentially good way to reach FIRE, despite their many downsides. This is especially the case if my assumption is that any other job I'm likely to find will probably be bullshit as well. Anyone else currently in or been in a similar position? Would appreciate any thoughts or advice, thanks. Edit: It's heartening to hear that many others are in the same boat. And thanks to those who injected some much-needed perspective. For those in low-paying bullshit jobs or low-paying shit jobs, burdened with personal debt, I feel for you. To me, it all underscores the importance of FIRE, both as a journey (since it gives meaning to our daily struggles) and as an end goal (since it frees us from both shit and bullshit). I found the following replies especially insightful, as they go to the core of my and others' interest in FIRE: u/CannonballUnder26: I thought about this some more, and I gotta wonder, would anyone even bother with FIRE if it weren't for bullshit jobs and neoliberalism? I don't think many doctors and nurses pursue FIRE beyond just having an emergency fund and a safety net to catch themselves in lieu of a social welfare state. There aren't many blue collar folks trying to get into RE, unless disability forces them to. I think this goes beyond a cultural difference, and is actually a manifestation of them recognizing their work has value, while ours does not. These really are fundamentally tied phenomena, in my opinion. Many of us want to quit our soul sucking corporate bullshit jobs and focus on more purposeful work. "RE" isn't usually about being an idle rich parasite for fifty years. It's about freedom from bullshit. u/dlxw: No one wants to stay in the "shit job" layer where the actual work gets done, because true to its name your autonomy goes to shit, and then you start producing shit, and feeling like shit because of it. You try to get yourself out of it, and maybe you do some good work that stands on its own, but the more traction that work gets the more you get invited to the "important" meeting and the more you realize all anyone is doing there is talking in circles spouting bullshit. But you're comfortable and start getting paid more, and that just turns you into a bullshitter. The sad fact is that 95% of the human effort in that company gets devoted to coming up with bullshit strategies that create busywork for the shit layer, who is busy trying to ignore the bullshit and actually build and fix things. Then if you're lucky, somewhere in the pipeline someone with a shit job, or a bullshitter who periodically descends into the shit layer to do some real work, is actually turning out good shit :) and that carries the whole company. … When an entire economic model lionizes "letting your money work for you" as a virtuous model of productivity, it stands to reason that the highest paid jobs closest to that faucet will revolve around legitimizing this system, creating the appearance of very difficult important work that is actually just moving some money and labor around between people who have shit jobs. You are an interface, a buffer between the true bastards and the people working shit jobs, creating the justification for extracting labor from the shit layer to hand profit to the bastards. FIRE mentality can certainly become complicit in this (by basing an entire lifestyle around investment income) but I think the critical component is the work you will be free to do when you FIRE and no longer have to worry about the time investment of the bullshit job. I don't see FIRE as a way to stop working; this world is too wonderful and broken to sit by doing nothing but subsisting on a pile of money. I want to work on useful things, which as he notes are often shit jobs, but with autonomy, where I am not just being crushed by bullshitters and only do the parts of the job I think are important. cleaning your neighborhood, caring for others, learning new skills like art, feeding people, raising kids, writing etc is all low paid shit work when turned into jobs directed by bullshitters, but i think is the most personally fulfilling thing I could do, and the actual work that would make society a better place. So my hope (we'll see how it goes) is to FIRE from my bullshit job and spend the time doing the work that actually makes life better. Going forward I will probably do what u/LiveFastFiYoung does: I spend maybe 15-20 hours a week on actual work, and spend the rest of the time in my workshop or writing. Those things keep me motivated and I dread having to send another pointless email that won't be read. I could likely go find another bullshit tech job that would pay slightly less that would have me working even less, but I guess I will coast until I can finally quit. submitted by /u/hansneijder [link] [comments]

Revisiting the 4% Rule - Using Shiller CAPE Ratio & Inflation to Determine WR Posted: 02 Sep 2020 07:40 AM PDT TL;DR - For tax-advantaged accounts with a 30-year time horizon, a 4.5% WR is the worst case. Depending on the Shiller CAPE ratio and inflation, the initial safe WR can rise as high as 13.0%! ​ Famed financial advisor Bill Bengen, author of the "4% Rule" (really the 4.5% Rule), published an interesting article yesterday (Sept 1, 2020) where he combined his own research into safe withdrawal rates (WR) with Michael Kitces's research using Shiller CAPE and inflation as a basis for determining WR. Bill Bengen Revisits The 4% Rule Using Shiller's CAPE Ratio, Michael Kitces's Research ​ The article is worth a read, but I'll do my best to summarize his findings, as well as providing links to his previous research on this topic. An initial 4.5% WR would survive ANY 30-year period 1926-today. Bengen refers to this as the SAFEMAX - the highest first-year WR that would sustain a portfolio for a given time period; in this case, 30 years. For longer time periods of 50+ years, a 4% WR would have survived any market from 1926-today. (Source) His target portfolio is 35% US large-cap stocks/20% US small-cap stocks/45% intermediate-term US government bonds; rebalanced annually. (Bengen's research on the importance of small-caps.) The average SAFEMAX from 1926-1990 (the most recent 30-year period began in 1990) was an astonishing 7.0%! This is much higher than the worst-case 4.5%. His research indicates that the ideal way to determine SAFEMAX is using a combination of Shiller CAPE ratio and inflation based on the 12 months prior to retirement. He provides six tables (Figures 5-10) to reference. When in doubt, choose the more conservative option. The Shiller CAPE has been so high for the past 25 years that the SAFEMAX is currently the lowest value in each table. If either the CAPE ratio or inflation changes significantly during the life of the portfolio, the WR may have to be adjusted. ​ A few important notes: Again, please realize Bengen's research assumes (1) the funds are tax-advantaged (not taxable) and (2) a 30-year timeline. For longer timelines, he's previously recommended dropping the SAFEMAX to 4.0%. (Source) WR is inflation-adjusted annually, meaning that in subsequent years of retirement you adjust your WR based on the trailing 12 months (TTM) CPI. So if your initial WR was $40k and the CPI during year 1 was 2%, then in year 2 you'd withdrawal $40,800. (Source) Bengen has previously recommended that upon retirement his clients swap up to 10% of their intermediate-term US government bonds for cash to protect against a bear market hitting right as retirement begins. (35% large-cap/20% small-cap/45% int-term bonds/10% cash) 10% represents approximately 2 years of spending and is the longest a bear market typically lasts. This allows retirees to pull from cash without touching their underlying investments, providing peace of mind. The cash is replenished by dividends from the portfolio which is rebalanced annually. (Source) ​ Hope you found this as interesting as I did! ​ Sources: How Much Is Enough (2012) Small-Cap Withdrawal Magic (2016) Reddit AMA with Bill Bengen submitted by /u/PhD4Hire [link] [comments]

$1.00M on the nose Posted: 02 Sep 2020 04:53 PM PDT Hi all, Just updated my spreadsheet and was really (and pleasantly) surprised to see $1,001,946 because I just barely passed $900k last month. I just assumed it wouldn't happen until November or December. Some tech stocks were good to me last month. I don't have anyone to share this with since I don't talk money with my friends and family outside of general good practices. Another poster also hit the milestone today and had much better charts than me so read their post for better insights, mine is just assets over time. There is an element of humble brag and an element of wanting to document this milestone so I can look back on the post further along and see how I've changed. 2012 - Graduated college with no debt (incredibly fortunate no doubt). Moved to DC for my first job in finance, TC in the $70k range. 2013 - Nothing new. 2014 - Got promoted, TC in the $90k range. 2015 - Got a new job in tech, TC in the $135k range. Moved to Seattle. 2016 - TC increases mostly due to company stock inflation to the $160k range. 2017 - Got promoted, TC in the $200k range. 2018 - TC in the $250k range due to company stock inflation. 2019 - TC back down to the $220k range. Moved to Atlanta. 2020 - Just started a new job this month, TC $310k range. Other thoughts and ramblings: I turn 31 at the end of this month. I don't have a FIRE number in mind and don't plan to think about seriously leaving corporate America until at least 35. I am a certified PT and love studying kinesiology. I always thought I would open a gym as a second career once I had a comfortable nest egg, but Covid-19 has me rethinking the vulnerability on this plan. I don't follow the advice of this sub to a T. I own a lot of individual stocks, keep a 12 month emergency fund, and do DCA vs lump sum investing when I get 'windfall'. I think this sub has the mathematically correct advice, so not encouraging others to do as I do. Lastly, dogs are expensive, but totally worth it. Chart of assets of over time: https://imgur.com/pM8A58u Pic of doggo: https://imgur.com/a/a4YNJ8e submitted by /u/beowulf90210 [link] [comments]

FIRE portfolio suggestions Posted: 02 Sep 2020 04:22 PM PDT Hi everyone, Looking for some feedback/recommendations on my portfolio for FIRE. You can see a breakdown of my current assets here: https://i.imgur.com/qrpe6TL.png Here are some thoughts I have Move money from BND into stocks, problem is market is very high right now. Move money from CASH to stocks, again the market is very high right now. Sell QQQ and move money into stocks. Downside is taxes, I've had this ETF for 3 years with lots of gains. Currently 25 years old working in tech. FIRE target is $4-5M. Next, I'll have to do a breakdown of my spending. Are my investments too aggressive? submitted by /u/ScreaminSeaman [link] [comments]

When market returns exceeds gross pay Posted: 02 Sep 2020 04:08 PM PDT I track my retirement & investment portfolio monthly and we have hit a point (with the great Jul & Aug comeback) where our market returns exceed our annual household gross pay. I'm maybe another 3-5 years away from semi-early retirement and my FIRE target is achievable in the next 3-5 years. So when I noticed this milestone it gave me great satisfaction and reinforced that semi-early retirement is definitely doable. I get the past 2 months have been out of the norm and you can't expect it to last. The long term average return is about 8% and 2020 so far it's about 12%+. But it got me thinking if there is a term for this "inflection" point where "annual investment returns consistently exceeds annual gross pay". submitted by /u/redditpundit999 [link] [comments]

Weekly Self-Promotion Thread - September 02, 2020 Posted: 02 Sep 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. submitted by /u/AutoModerator [link] [comments]

In Search of FI (Canadian Edition!) - 50 Months of detailed NW tracking + Career tactics used! [29M|225k] Posted: 01 Sep 2020 06:44 PM PDT I see a ton of these posts and always enjoy reading them. Since this forum is very US focused I thought I would share a Canadian's journey as I realized today I have been tracking for a milestone 50 months :) This also includes nuggets of wisdom I have acquired along the way. These may not be true for you, but they work for me! This is not a short/easy skim post. This is a detailed insight into navigating early stage FI (first 100 months) and strategies for growing career income as a non-FAANG engineer lol. I hope it is relatable to at least a few young people in similar situations. If you are in a similar situation I would love to hear from you! All numbers in CAD Part 1: Background I was never the type of person to know what I wanted to be when I grew up. Just an average unmotivated teenager living amongst over-achievers in a good neighbourhood (Toronto). My mindset had always been do as little work as possible to get the maximum results I can. I was basically born with the 80/20 principle installed in my brain. While I always considered this efficiency.... unfortunately my teachers interpreted this as laziness. I was quickly put in the bucket of mediocre student. I never really studied but also never really failed. I just consistently put in the minimum amount of effort to get the grade high enough that my parents wouldn't disown me. Because I never really excelled at anything in particular I graduated without much of a career compass. With mounting pressure from my parents to go to University (thanks mom!) and my friends slowly leaving the city to start their educational journeys I folded and shipped myself off as well. Just like all the other dreamers I thought I would walk into my first class, fall in love with a subject (taught by an inspiring and hilarious professor), take 4 years of classes, and throw my graduation cap in the air right before being handed my (deserved) 75k/year career. ya....no.... After burning 3 years of money "finding myself" at University (aka: Partying) and failing my way out of many other career paths I finally stumbled across the first class that would change the course of my life. Marketing 101. After this earth-shattering discovery I finally knew what I wanted to do with my immediate life. I was 21. Unfortunately the school I went to wasn't known for having a good Marketing program so I transferred to the best marketing school in the area and banged out a two year diploma with an internship program (important!). I did not complete my degree.... Background Disclaimer: At risk of getting shit on by this forum, it is important to communicate that I was incredibly lucky by birth. Our deal was that my parents paid for my education as long as I funded my living expenses. So I worked part time during University and was able to enter the workforce at 23 debt-free. Part 2: Discovering FIRE 2013 - 23yo I started my first job at 23 years old for 0k/ year salary. Well.... I was an intern (school placed), so kind of but not really. After a 3-month of doing a good enough job I was officially offered 40k/year for a full time position at a small marketing agency (~7 people). After 5 years of living in dark & dirty basement suites I quickly agreed without negotiating (Leverage is a snowball you build over time and mine was non-existent) I hadn't discovered FIRE yet so I did what every stupid young person does when they get a job, I signed a $1,400/month lease (43% of my after-tax income) to live by myself in the HCOL city of downtown Toronto on a 40k salary. It sounds crazy now, but with no car or kids to pay for, no debt to service, and no vacations to take, and parents who would take me back with my tail between my legs if I had to, it wasn't unreasonable for me to get by without sweating too much. After spending about 8k on food, booze, and furnishings over the year I ended the year with about 10k in savings. End of year stats Salary: 40k NW: ~10k Cash (Wasn't tracking yet) ​ 2014 - 24yo The company I had joined was growing rapidly and I sensed my leverage snowball had evolved to level 2. I was good at my job, and the company couldn't afford to lose me during a growth phase (especially over a few thousand dollars) so I spoke to my manager and was able to increase my income to 45k. My first raise (yay!). After 6 more months of growth the company continued to scale and suddenly brought on a lot of new employees at once. I again saw an opportunity to grow my career. This time, I went to my manger with an entirely new position. I laid out all of the problems we were running into and suggested a new role that would solve these and continue to help the company scale. Once again, my boss agreed to my proposal and I was given a second raise to 50k/year. Overall a pretty good year, but not making the kind of money I am looking for yet. Still haven't discovered FIRE. End of year stats Salary: 45k & 50k NW: ~25k Cash (Still not tracking) Same company ​ 2015 - 25yo Nothing really happens this year tbh. Just working hard and adding to my leverage snowball waiting for the next opportunity. End of year stats Salary: 50k NW: 40k Cash (Still not tracking formally) Same Company ​ 2016 - 26yo Every company has 3 tiers of people. Lvl 3: Those who create work, Lvl 2: Those who manage work/people, and Lvl 1: Those who do work. I have spend the past few years as a Lvl1 worker-bee and an opportunity finally opens up for me to move into the next level. I am the most qualified person for this mid-senior position and I shoot my shot. I get it! The company offers my 70k for the role. I check-in with my leverage snowball I have been building and note that I have a bit of room to spend some of it. I was confident my predecessor made ~90k (much more experience than me and great at the job). I knew I wasn't going to get that much (and to be fair, I didn't deserve that yet) but I also knew that there wasn't a more qualified candidate available. I figured there was a little bit of juice to squeeze here and so I wrote a list to my boss all of the reasons that I deserved to make 75k/year. My boss accepted. This is where my FIRE journey really began. At 50k/year I am getting by, but not really making much of a dent. Suddenly with 75k/year coming in, what to do with that money becomes a glaringly obvious question. Still being young and stupid I did what I thought everyone did when they had more money then they needed. I went to the bank. I had an amazing conversation with an advisor at my local credit union and he convinced me to buy into these wonderful mutual funds that were going to really set me up for the future! Going home that day there was just one sentence he said that didn't sit right with me. He said something like "The fund has a 2.2% fee each year, but the fund returns 7-9% on average so after fees you get a return of about 5-6%" I responded saying "But 2% of 7% is almost 30%, isn't it? That seems like a lot of fees". He said "No, it doesn't work like that. 2% is a standard fee". Of course he is a professional and works at the bank which has my best interest at heart and I don't know anything about money so who am I to argue with him. I bought the funds. This was the night I went home and googled MER and discovered this sub. This was the second major event that has altered the course of my life and thinking. The next week I started a spreadsheet in gDrive and transferred all my money from the Mutual Funds into WealthBar (Robo-Advisor, now CI Financial) End of year stats Salary: 75k NW: 61k (20k TFSA|21k RRSP |20k Cash) Same Company 2017 - 27yo Were finally on track! 2017 was the first year I really felt like I was on track with my finances. Had a good income coming in, was funding my tax advantaged accounts, and was in a good position in my company. This is an important year because it is the year when I could of easily developed lifestyle inflation, but I fought really hard to actually live more frugally than ever. I knew I had a really good shot at setting myself up for a successful life at this point and really didn't want to f*ck it up. If I buckled down and save I could hopefully not have to sweat over money again. I also was busting my ass at my job this year. After good performance at the end of the year I am able to secure a raise to 90k and add a coveted "Senior" to my title. I don't use any of my snowball leverage this year, as this was offered to me based on performance. With a tight budget, minimal expense (no cars, no vacations, no nice things) and a good income I make a massive dent in 2017. I make 66k after tax and after pulling out another 18k in rent and ~7k in food & drinks I am able to save 43k this year in a HCOL area. End of year stats Salary: 90k NW: 103k (6 fig Milestone!) (48k TFSA|22kRRSP|33k Cash) Same Company 2018 - 28yo After about 3 years in a company employees tend to move on. Employers know this, and employees know this. There usually isn't enough room in a single company for someone to consistently move up. There are only so many senior spots so this often causes employees to look around for other opportunities to continue growing. Now I LOVED this agency and they treated me well, but after developing my skills in a good niche for 4 years I was starting to become extremely employable. I was receiving recruiting requests monthly and finally had one that caught my eye. I went through the process and we chatted a bit about compensation which was going to be in the ballpark of 125k + Unlimited vacation + stock options (Private company). This is a 35k jump. Decision time. I don't want to leave my agency, but this is too big of a jump to pass by. They haven't offered me the position, but when you get wind of your market value your leverage snowball grows significantly. Up until this point I had been consistently growing my leverage snowball for 4 years now. I had tapped into it here and there for small 5k negotiations, but more or less hadn't tried cashing it in a major way. If I move to the new company I have to build my snowball all over again from scratch, and so I figured this is the time to take a calculated risk and cash it. All or nothing. Booked a meeting with the CEO and told him the offer. I was as transparent as possible. "Look, I am in talks with a really great company where the compensation is XX.xx. I really like working for you and appreciate everything you have done to treat me right. I am presenting this to you because I genuinely hope you will be able to match it. I know there are some things on this list that you can't match (stock options), but if you can get me in this ballpark then you have my word that I will stay here. Otherwise I am very grateful but I hope you understand this is too big a gap to pass up." I cried in the CEOs office. I wasn't trying to be dramatic... I genuinely really wanted to stay and it was the hardest decision of my life. I didn't want to let the company down, but I had to put myself first. CEO said thanks for bringing this forward. CEO thinks the company could get me there but he/she would need 24hrs to see if the numbers will work. The next day I received a raise to 120k. Good relationships are worth more than money. I knew for a fact that my relationship with this CEO was going to be worth a hell of a lot more than the 5k I was passing up. I let the other job know I was no longer interested in pursuing the job. I spent a lot of my snowball in 2018, but in a weird way it strengthened my relationship through trust and transparency. I now understand that employers do not want good employees to leave and are willing to pay a lot to stop that. Its amazing to me how few people bring other offers forward to their managers and bosses and even end up accepting less money elsewhere then we would have been willing to pay to keep them. Not everything is about money, but if you build up your leverage over time it can be crazy not to ever spend it. I also moved in with my girlfriend of 2 years. End of year stats Salary: 120k NW: 154k (63 TFSA|37k RRSP|54k Cash) - Cash because house/car goals Same company (just barely) 2019 - 29yo After saving 150k and moving in with my girlfriend and sharing finances with each other we wanted to purchase a property together (household income >200k). I don't want this post to be about whether that is the perfect financial decision or not. We made a decision based on our circumstances and bought a property worth 790k in downtown Toronto. Because we are unmarried, we drafted an agreement up to represent our different equity shares including our scenarios for breakups and marriages. Continued to grow at work and received performance raise to 130k. Continued tucking away money, only now a lot of it is being paid into the mortgage. I am now what I earlier called a level 3 employee. I create business. This is when employees become very valuable. End of year stats Salary: 130k NW: 186k (30k TFSA|13k RRSP|Cash 51k|92k RE) - Real Estate is on the board. Used cash, and pulled out of TFSA and RRSP to fund the purchase along with funds from my girlfriend) Same company 2020 - Still 29yo At this point I have done all the work to be set up and now I just have to ride the wave. Tucking away as much as I can each month and COVID has been a huge blessing for us financially (I feel terrible for saying this btw). I went from about 4-5k growth per month, to 7-8k growth per month. Its amazing how much I was spending on eating out at the office and all the entertaining and travel expenses. With that all stripped away and taking local vacations I am saving so much more. Its also worth noting that because I recognize others are not as fortunate I have increase charitable donations substantially during these times supporting BLM and COVID at-risk populations. Hopefully it makes a difference! That brings us to today. 50 months since I started my journey to FI. No windfalls, or company exits, etc. Just consistent growth with a focus on FI Salary : 130k NW: 226k (48k TFSA|25k RRSP|49k Cash|104k RE) - Will be allocating my cash out into my advantaged accounts shorty. Just was piling up to be cautious with economy and COVID. You never know... Same Company FIRE Journey Learnings Its amazing how many people don't understand how leverage works. You spend years acquiring leverage and so many don't ever spend it. The bigger your snowball is, the bigger the risks you can take. But snowballs take time to grow. The advice young people seem to get is "Put in your time", when really it isn't about time, its about building your leverage up. If you sit at your desk and don't become more valuable then your time is worthless. But if you put in the effort to grow your snowball fast then you can use it to propel yourself Banks absolutely do not have your best interest in mind. I was advised by a sales person, not an advisor. If I can help one person understand this then this post will be worth it. I made a mistake when I did this and was fortunate to be curious enough to have fixed it. Not everyone is that curious and I feel terrible for those taken advantage of. I use WealthSimple for all my investments at this point. I know its not the absolute cheapest but its the mix of value and convenience that works for me. Relationships are extremely important for income growth. The advice I always see on this sub is that you have to change jobs to get raises. I hope that this story can show people that jumping ship is not the only way (although still a great way). Jumping ship creates this artificial leverage (having options) which can be attractive in the short term. But snowballs are made of water and they can melt really fast if not packed tight. When the economy goes down and the heat gets turned up, is your snowball going to melt or is it solid? I know in my job that I have invested in years of relationship growth and trust with an individual who respects me. I know that I will not be in the first 90% of people who are let go and will be treated right. I have a tightly packed snowball. Its important to know my value in the market, so my ears are always open, but it also shouldn't be overlooked the value of long-term lasting relationships for income growth. The levers for FIRE are reducing spending or increasing income. I have learned that I am much more effective at the latter. The framework I have used to think about my career growth is to try to decrease my replaceability while increasing my proximity to cashflow. Decreasing replaceability isn't about hoarding information, its about creating unique value. Tenure goes a long way in decreasing replaceability. There is a ton of value in people who have been with a company for long periods. It is also about looking for skills that you can be "the person" for (as long as that skill is valuable to the company). Increasing my proximity to cashflow follows the principle that "those who bring in the money are paid the most when sales are flowing, and laid off last when the business is struggling. Sales people are the most common example of those who are closest to the cash flow (They bring in the money). Throughout my career I have tried to position myself as close to bringing in the cashflow as possible without the actual responsibility of being accountable for it (Remember, I am lazy at heart). Combine low replaceability with bringing in cash and growth for the business and you become virtually irreplaceable (and worth a lot of money). Every job has a value cap. At some point, it doesn't matter how damn good you are at your job, you simply will not be paid any more money. I hear this a lot from Lvl 1 employees (doing the work), that they want raises for being better at their job. They could be the best in the world but if the job isn't worth any more money then you have to add a new skill to move to the next level into a new role. In my eyes its okay to be lazy as long as you combine it with ambition. In fact, I think laziness + ambition = efficiency. My boss always says "I like to hire lazy smart people because they will always find a more efficient way to do the job". I may want to do the least work possible, but I also want to make something of myself. In a weird way I think this has actually been one of my most valuable attribute combinations. Throughout the journey I have held on to cash for too long. In retrospect holding cash was bad for my growth but the advice on this forum was to keep house money in a HISA. I don't regret this because I did what I thought was best with the information and risk tolerance I had, but looking back I could easily be 50k ahead if I had just been more diligent with my allocations. Living close enough to walk to work and not having a car has probably put me ahead at least 20k what I would otherwise have been. I know not everyone is so lucky. I consider this idea of "life design" where I have designed a life where I can walk to work. I pay a premium in rent in exchange for savings in other areas. Why do I want FI? I don't necessarily want to retire right away, as I see myself slowly dialling back as I reach my later years. I like working and creating value in the world! My vision statement for when I am 45 is "I work because I want to, not because I have to". A 15 hour work week sounds like the perfect balance for me. Minimum effort for acceptable outcome. I am hoping to FatFire around 2-3m in HCOL area. Im only 30 so its a bit early to be calculating the exact number. I don't know exactly how I am going to get there, but I keep following my frameworks and I keep getting closer every year! Long way to go.... I LOVE video games. I want to play them all the time! I kind of want to eventually switch careers and just become a free-lance financial advisor working on an hourly rate so I can help others with FI. I wouldn't make much money doing this, but it would be a fun retirement activity to go back to school and pursue a passion project like this and get licensed. working because I want to! Q/Q Growth ​ 2016 Q3 $54k Q4 $61k 2017 Q1 $71k Q2 $74k Q3 $83k Q4 $103k 2018 Q1 $113 Q2 $128k Q3 $150k Q4 $154k 2019 Q1 $152k Q2 $159k Q3 $172k Q4 $186k 2020 Q1 $199k Q2 $206k Q3 $226k submitted by /u/TA_torontolife [link] [comments]

Real talk - social security benefits (US) Posted: 02 Sep 2020 07:04 AM PDT Serious question: What's a realistic expectation, for planning purposes, that SS will be functioning program 60 years from now? NOT a political discussion. I'm planning for FIRE for my family but we are DECADES away from claiming any social security benefits, but it's a SUBSTANTIAL piece of the equation when planning, in my opinion. From the SSA gov web site it says that things are somewhat... fine? But then again, maybe they don't want retirees going on the web site and it saying "yeah... we're in trouble." As someone who may be starting initial benefits in 2050-2055... should I be accounting for what estimate SS benefits are today? a portion of that? Nothing? What does the landscape actually look like? How can a system so large, with an average population that knows squat about savings, with pensions gone the way of the dodo bird, just go away? I would appreciate any opinions rooted in facts. Some speculation is required of course, but hopefully people will refrain from dragging in single person references to that speculation as to the direction of the program. submitted by /u/jkchbe [link] [comments]

FIRE and finding self-worth in a capitalist society Posted: 02 Sep 2020 04:53 AM PDT Obsessively consuming a backlog of Mr money mustache posts, I began my FIRE journey in 2013. I was making $25k pre-tax as a high school classroom assistant. Gratefully I had no debt, but not a lot of wiggle room for savings. At a crossroads, I decided to put more eggs in an online business idea I was working on (online sales related). Long story short, 4 years later of non-stop hustling, digital-nomad geo-arbitraging around the globe (you guys like buzzwords?), I saved enough afford a down payment on a home in a HCOL city near where I grew up, along with a nice monetary cushion. Since leaving the classroom, I got incredibly lucky, worked hard, and pulled in anywhere from 10-20x my classroom salary, annually. Fast forward to March, my business grinds to an immediate stop. At this point I have about $400k cash (mostly in business account), $400k stocks (mostly VTSAX, mostly retirement accounts), $250k in home equity, and about $400k in inventory. Luckily I'm able to liquidate most of my inventory for a slight loss. Against all logical advice, I was cash hoarding for comfort, and waiting for an opportunity to buy into a market on sale. I DCA about $200k into index funds between March and mid-april. I know I have a nice cushion (albeit too cash heavy for this subs preferences), I could probably RE if I wanted. But I imagine I will work again some day. But I want to write about the fundamental shift in my life since the start of the pandemic, and I want to ask for advice. Every sense of productivity I experienced, working 60-80 hours a week, seeing sales, making big cash monies...it all grinded to an abrupt hault mid-march. I thought it would be a quick, much needed break, but it's looking like things may not return to normal in my industry for quite some time/maybe ever. My issue is, living in this capitalist system, my sense of productivity was only activated when I was making money. I've been an entrepreneur my whole life, and now that I am not hustling for the benjis, I feel a loss of purpose. I have hobbies too! I've gotten deep into cooking, I've been a musician my whole life, I love the outdoors. I've even thought about monetizing my hobbies; but I believe they will then cease to be just that: hobbies. I've thought about buying some land to try to be semi self sufficient. I want out of this capitalist definition of self-worth! I hope this post doesn't come off as a self- entitled one. I know lots of people subscribed even here are struggling with money. Actually, I think everyone subscribed here struggles with money to some extent, even many of those who have reached FIRE. But, to those who have reached FIRE, especially in america, how do you work to propel yourself past the systematic connection between self-worth and financially fueled productiveness? submitted by /u/FIREbreathe [link] [comments]

Has the halts on evictions changed the minds of those who planned on using rental properties as an outsized part of their retirement income? Posted: 01 Sep 2020 06:00 PM PDT First, a pause on evictions is the right thing to do from both a humanitarian and net benefit to society. However, this certain draws the line further on winners and losers during these Unprecedented TimesTM. https://www.nytimes.com/reuters/2020/09/01/us/01reuters-health-coronavirus-usa-renters.html Covid-19/2020 has certainly been a black swan event by any measure. But with rent control spreading and government intervention risks on full swing, is the risk on this very non-passive stream of income still worth it to those who are considering it? What about those of you are are already depending on rent for a majority of your retirement income? submitted by /u/1541drive [link] [comments]

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