Financial Independence Daily FI discussion thread - September 23, 2020 |
- Daily FI discussion thread - September 23, 2020
- What are some big purchases you made that were worth it?
- A normal (low-earning) person’s journey to FIRE: mid-journey milestone
- How you quantify “enough” for yourself?
- Let’s talk about Insurance
- Weekly Self-Promotion Thread - September 23, 2020
- Is this a stupid or smart idea to fill a gap for the future FIRE community?
- How do you screen out your financial advisors/teachers/gurus and people you let touch your money?
- Conflicting Financial Advice
- Just Say No
| Daily FI discussion thread - September 23, 2020 Posted: 23 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. [link] [comments]  |
| What are some big purchases you made that were worth it? Posted: 23 Sep 2020 09:10 AM PDT I'm 30yo on track for CoastFIRE, have a house and don't "need" anything. I just want to make sure I'm not depriving myself of some things that would make life better. Here's a few things that I'm considering spending money on: Build a private deck facing my yard: ~$5k Build an extension to my living room: ~$10-20k A heated outdoor shed for my home gym (with solar panel) ~$3-5k I don't "need" these things, but I feel like they would make me more happy over the long run. They would probably also increase my home value. I'm planning on having kids soon too, so if there's something you bought / built for your kids that was worth it I'd love to hear about it. [link] [comments]  |
| A normal (low-earning) person’s journey to FIRE: mid-journey milestone Posted: 23 Sep 2020 02:54 PM PDT Edited to mention: the title should read formerly low-earning (I can't edit the title). Now we are high earning. I've been wanting to post for a while, and we (husband and I – both 35) just reached a major milestone – paying off a $150k student loan tab – and I thought people might be interested in a somewhat unusual FIRE journey fueled by an experience abroad, being frugal, real estate, and some luck. We have low-ish incomes (I work in education, my husband works in politics). I do not have a high-earning degree but he does have a professional degree. We met at age 27. We're both Americans, and we were living and working in a developing country. At the time, he was in massive student loan debt and was not frugal person. I didn't push my values on him but I did share them with him, and they made a lot of sense to him. He started adopting some of my habits and started saving money. Living abroad, we made relatively low salaries, around 25k each, but with free housing and the cost of living so insanely low, we were able to save a lot over 3.5 years, even with taking a few epic vacations, and came back to the states with about 70k in cash. This was before we knew anything about investing. When we got back to the states, we both landed jobs making 60k a year. Four years later, he makes 90k, and I was making 70k, though I got cut down to part-time due to COVID so I will be making around 35k now, but get to keep my health insurance and have hugely reduced my stress. It sucks, but we'll be ok until I can find something better. I've taken the time to become more frugal (spending more time cooking, fixing things) and indulging in my hobbies that make me happy. Husband is fine with it because I've been working and saving for the FIRE journey longer than him. I'm sort of at an existential crossroads now, but that's a whole different story. When we first got back to the US and got jobs, we used the money we had saved abroad as a down payment and bought a house (450k purchase price, 15% down.). We were looking with a house with an in-law unit to rent out to help subsidize the mortgage, but we ended up buying a fixer-upper multifamily property, which was the best step we could have made in our HCOL area and the secret sauce to our success. They were solid structures that mostly needed cosmetic upgrades (painting, flooring, some bathroom stuff) and we did almost everything ourselves. It was a second job for both of us for a while, but it was so worth it now. We pull in about 5k/month on these units. Despite shut-downs, all of our tenants have still been paying (it helps that we are neighbors, they can see we are hardworking and fair people that respond quickly to their needs - we haven't been burned yet in three years of landlording). Another major thing is that my lifestyle hasn't significantly changed since college. Because I grew up in poverty (welfare, food stamps, free lunch, no money for anything ever), I've always valued every dollar I've earned and been extravagantly frugal. In fact, some of my journey has been trying to relax a bit, and not going without so I can hoard every dollar. Because I was low-income, I qualified for federal aid and grants for my first year in college and then earned a merit-based full scholarship in college and graduate school. I house-hacked (I didn't know that was what I was doing at the time, as the term hadn't been coined yet) my way through grad school in a HCOL area by renting a house and then renting out the rooms, and shared a room in that house with a sibling. I graduated with only about 5k in loans that I paid off as soon as I got my first job. We live simply but we are happy. Just last week we got our very first TV (we watched movies on a big laptop before, and it worked for us) for $100 on Craigslist. We mainly shop at thrift stores, for thriftiness but also to reduce our environmental impact. We're vegetarians for ethical reasons though it helps with saving money. Our wedding cost 5k, which we pretty much made back in cash gifts (which was very unexpected but obviously welcome – don't do a registry and people are more inclined to give you money). The major indulgence we have is food – it's very important for me to eat healthily and well and as much as we want, having grown up with scarcity. We subscribe to two CSA boxes. We also spend money on classes for hobbies we enjoy, and equipment. But we drive good mid-2000 cars and will drive them into the ground, and we don't go out a lot, preferring to have friends over for games and beers. We love to camp and do outdoor activities. Because of all this, my husband was able to put almost everything he made toward his loans and we finally paid them off with a lump sum payment (30k). I know paying off relatively low-interest debt is not everyone's philosophy, but we didn't like having the overhead. It's felt like a bit millstone, and it's such a relief to be able to now save or invest the money he threw at the loans every month. The future is a bit uncertain for everyone right now, and it feels good to know that we have tons of cash on hand and we will be ok if shit really hits the fan. Right now we have 60k in a Roth IRA, 30k in Vanguard index funds, and 80k in cash (we're keeping in on hand so that if the market goes down we can buy another house). Humble by some comparisons but I feel secure beyond my wildest poor-kid dreams. We need to figure out 403b and 401k stuff now. It feels like we have made a major turning point in our lives, with me moving to Barista-FIRE and paying off the loan. We want to buy another house, and we will need to continue saving. We don't have an exact FIRE date in mind as we both mostly enjoy our work, but we hope to travel in the future and both work part-time eventually. We're starting to think about maybe having a kid. Finances used to be a major focus but we don't really do much but set it and forget it. I hope people liked hearing about a non-tech or finance journey with salaries that have not yet gone over 100k. I'm sorry it was so long, I had a lot to say I guess. [link] [comments]  |
| How you quantify “enough” for yourself? Posted: 22 Sep 2020 10:02 PM PDT The older i've gotten - the more money I make, the more I freelance, the better I am at pitching my work, sending cold emails, making my luck and generating extra income. I'm proud of my work ethic and capabilities - at 29 i'm bringing around 10k a month in, after taxes - i've saved well over the last couple years, my roth is maxed and my savings is 5 digits and stocks are 6. I'm very satisfied with my capabilities and how far i've come and how I will continue to push myself as well - however the one thing that is small but major in some ways is I feel like no matter how much I make in a month, and how I save or invest that money (stocks / crypto / savings / splurge on myself) I cant stop thinking about how I can make more to save more. I make enough, I make more than enough - but why do I feel this way? I am also a misty happy person, and overall optimistic in life. I do enjoy making money but it's almost seen as a quest or objective and strategic game of thinking and working smart and connecting dots, and not necessarily as simple as "I want more money!" kind of thing.. I don't know - I'm a hyped multi tasker as well, it's how I work. I can think straight by working my full time thing and working on an app and freelancing - yes it's stressful sometimes but it also fees like a game of balance and balancing flow states. Now i'm rambling but really i'm having trouble quantifying my what "enough" is for me - and I wanted to get a dialogue going here for dmt insights or thoughts. Thanks! [link] [comments]  |
| Posted: 23 Sep 2020 12:10 PM PDT I would like to discuss what everyone here carries for insurance. I feel like I might be lacking life and umbrella insurance and want everyone to hear what everyone carries and why (if not obvious). Obviously, the assets we have impact the insurance we need so it will be interesting to see what everyone has. This is for my wife and I, no kids, and we own a house. Net worth approx 400k (250k in retirement accounts, 75k in cash/taxable brokerage and 75k in home equity).
[link] [comments]  |
| Weekly Self-Promotion Thread - September 23, 2020 Posted: 23 Sep 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]  |
| Is this a stupid or smart idea to fill a gap for the future FIRE community? Posted: 23 Sep 2020 03:53 PM PDT I'm 35 and just hit $1M net worth. I followed basic principles of FIRE. I want to share my learnings and philosophy - particlarly to the younger generation, so I started a YouTube channel - happy to post but don't want to violate self-promotion rules. Tons of YT finance channels out there, but almost all of them seem "fluffy" to me. 10+ minute long videos of rambling with some hidden gems here and there. I realize that some - if not most of this is due to the preference of the YT algorithm for longer videos. Also seems like the most popular ones are more due to the creator's personality/style and less about the content itself. So I'm throwing around the idea of pivoting to 2-5 minute videos to get RIGHT to the point on topics to hold people's attention. High quality content packed with good, solid info. No fluff. Good idea, bad idea, or all depends on execution? [link] [comments]  |
| How do you screen out your financial advisors/teachers/gurus and people you let touch your money? Posted: 23 Sep 2020 08:01 AM PDT I tried to make a post warning people to be careful about who they chose as a CFP. How do you screen your CFP/FA what ever you hire? The issue I see for people in FIRE and FATFIRE (as many of you probably see) is the sales people who lurk around trying to advertise themselves as accredited investors. I hear people throw around the term CFP and RIA as enough to qualify as someone who is a fiduciary and truly vested in your interests but I have seen the opposite. I am citing two examples of firms I have come across. Both seem to be registered as CFP's and RIA's but investor.com shows a poor history on one of them. https://investor.com/rias/oppenheimer-co-249?via=search&q=oppenheimer I was fortunate to walk away with little to no damage. The CFP I spoke with for hours on the phone focused more on becoming a "friend" than a financial advisor. A lot of his advice was wrong (liquidating my stock accounts my father built etc), and I was referred to many scam/rip off insurance brokers, CPA's, and realtors. Never gave me a single document showing the historical returns despite asking, yet called me multiple times asking to invest. https://investor.com/rias/mercer-global-advisors-147363?via=search&q=mercer Seems to have a better standing What is the ultimate determining factor if someone is not a fraud as a financial planner because the CFP and RIA as you can see here, doesnt seem to be enough Full disclosure I have started to use one of these as my investment advisor for a portion of my portfolio however I am not associated with them in any way. I am actually trying to see if I even made the right decision after my research. [link] [comments]  |
| Posted: 23 Sep 2020 03:04 PM PDT I keep hearing friends as well as financial advisors give the following advice which I feel completely contradict each other: 1) Don't pay off debt early if the interest is low-moderate. Make the minimum payments and invest the rest. 2) Never finance a car, always pay in full to avoid losing money on interest. I've heard so many people preach both of these, but if you're following the logic of #1, wouldn't you want to finance everything you do (assuming low-moderate interest) so that you can invest the upfront cost instead, make your minimum payments, and net earn more / pay less? I'm in no way advocating for that (am currently aggressively paying down student loans), I just don't see how someone can advocate #2 while also saying you shouldn't pay off debt sooner because you'll earn more by making minimum payments and investing the rest. Can anyone else think of common examples of financial advice that contradict? [link] [comments]  |
| Posted: 22 Sep 2020 04:36 PM PDT For those of us who try to save up, we have found ourselves, or will find ourselves in situations where someone wants to "borrow" money. Right, the kind of "borrowing" where the borrower has no expectation and little means of ever paying back. To avoid such uncomfortable situations, many of us tend to hide how much me make, or how much we've saved etc. We also try not to ask such information of others, worried that they might reciprocate with similar questions. This is not an ideal environment for anyone who wants or needs to learn how to save or build wealth. Sometimes, you simply cannot get good, relevant advice without disclosing some information. Some of us have regretted when it came back around to bite us. Before I start with the advice, be a decent human being. Be a good sport. Be humble. If you're going to brag or be showy, do it around those who do it too, where it is acceptable. Compete against your peers who wish to compete. Don't be Godzilla smashing peasants. If you have to deal with someone who crosses the line, here are some things which work great that I have personally said to friends and family. 1) Just say no. Don't give a reason. Don't make any claims that you're trying to save for something. Stare them in the eye and just say no. Saying anything else shows weakness and tells them there's potential for them to make you change your mind. If you really need to put a nail in a coffin, make sure it's tight. Examples are "You don't deserve it". Or "You haven't learned your lesson". Or "I can't reward failure". Or "I rather donate it to charity than give it to you". Take a chance to burn the bridge. If it burns catastrophically, it was never safe to walk on. 2) "What do I get out of it?" The slightly less strong-arm form of "Just say no". This is a good reply if you would like that extra moral high ground for saying no. Only the scummiest of people would try to ask you for something and tell you that they want something while you get nothing. If this happens, you'll feel real good about saying no. If the conversation moves forward, I ask for collateral or interest. Yes, an interesting conversation to have with an aunt over a few thousand dollars. I asked for 30% interest. When she responded that credit cards only charge around 20%, I responded that she's probably better off with a credit card. She replied that she probably wouldn't be able to make any profit off what she was trying to invest in if she had to pay a credit card interest. I came back with how I have to take away from another profitable investment to lend her money. Is it fair to give up my profits to let her have a shot at hers? The logic worked well in this scenario. Let them know you're serious and make sure they don't ask you again. You don't want to have to say no every time they ask. You want to let them know you'll always say no, so they never ask. 3) There are people you want to help. These are the ones who live their life believing the world owe them nothing. They never ask for help and and always give back more than they take. Most people just need to be taught a lesson of failure by life. Maybe they flew too high, or ran too fast. But some people have already learned the lesson. They are humble, and really hit some bad luck and really do need some help. They have already have loyalty, respect, and gratefulness. It is ok to help them. Don't expect for them to repay you, but they will find a way to repay you. Not all investments in life are about money. Sometimes, you can invest in a good friend or family. [link] [comments]  |
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