Financial Independence Daily FI discussion thread - September 08, 2020 |
- Daily FI discussion thread - September 08, 2020
- A tale of three siblings: Privilege, Values, and Lessons Learned
- How to manage a long "coast" period when doing CoastFIRE
- Questions about how to invest in Vanguard index funds
- Withdrawing when the market is down
- Check up on finance for my age
| Daily FI discussion thread - September 08, 2020 Posted: 08 Sep 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]  |
| A tale of three siblings: Privilege, Values, and Lessons Learned Posted: 08 Sep 2020 04:45 AM PDT I feel like there were recently some interesting posts about privilege, family, financial education/values and the impact these can have on people's likelihood to or desire to FIRE. I was just thinking about my own family and thought it'd be an interesting case study to help us better understand other's perspectives. Background: One parent is from well off-ish family (by the time I was born the wealth was more of a memory than a reality for the vast majority of this side). One parent is from a war torn third world country and moved to the US as a teen with very little support. We (siblings and I) grew up in a middle class to upper middle class town with good public schools, low crime, and mostly professional families. Our parents emphasized educational achievement (probably too much), provided an above average financial education, and demanded obedience. Offered to pay what they could for college. Parent 1 ended up a semi-disabled drug addict who lost control of their severe mental health issues and became abusive towards everyone in the family. Parent 2 ignored/tolerated/enabled this behavior from the time I was in elementary school until parent 1 died of an accidental overdose when we were all adults. Just hoping to point out that it we had some advantages and some disadvantages, like most people. Sibling 1: Likely inherited some of the family mental illness and also bore the brunt of parental abuse. Kicked out of the house as a minor, but parents still supported financially as they lived with relatives and finished high school. Graduated at the height of the financial crisis of 08 and their college fund, which was still invested, took a major hit. They enrolled in an out of state public school, did very poorly three semesters in a row, and transferred to a less expensive school once the college money ran out. Continued to struggle in school until dropping out after 6 years and working odd jobs with a lot of student loan debt ($40k). Grew up a bit, learned some independence, and returned to school to finish up a degree after a few years. Currently working in a semi-related field making decent money ($45k), working on getting the loans down ($20k today), and saving up for a house in a LCOL area. Current NW ~-15k. Lessons to be learned: college isn't right for every person right out of high school, addressing mental health and previous trauma is really important to moving forward, and you can totally make mistakes early in life and turn it around. Sibling 2: After sibling 1 was kicked out, parental abuse turned towards sibling 2 who dealt with it by working enough to support themselves and then heading off to college on a full ride, disconnecting from family (probably a good decision). Started roth IRA in high school and has always been a saver. Decided to go to expensive professional school funded by a now more robust college fund (having grown for several more years in a bull market), scholarships, and working. Graduated with significant debt but also married a high earner and all debt was paid off within 2 years. Currently in training making about $60k with pay expected to increase significantly after training is complete. Current NW ~$150k. Lessons to be learned: sometimes success is found by removing the things that hinder you. The right spouse can really help FIRE move along! Sibling 3: Largely ignored by parents. Went to in state college on a 50% scholarship, some covered by parents, some loans taken out ($20k total). Turned out to be very good at math, completed a bachelors and paid off masters before moving into corporate job making ~$85k. Paid off student loans quickly and was saving good money but also fell into life style inflation and some vices that had a negative effect on work. Also had some mental health issues to work out and was generally pretty unhappy in life. Recently decided to quit corporate and go back to school for a PhD with the hope of staying in academia. Current NW ~$80k (expected to go down through grad school as stipend is very low!). Lessons to learn: While NW is relatively low, it was enough for a single young person to essentially say "FU" to work and pursue something new. Money doesn't give you happiness but it does give you choices and hopefully you can choose to pursue the life you want. Have any of you similarly seen really divergent financial lives from people with similar backgrounds? How has your family/community shaped your FIRE journey? What have you seen to be people's biggest obstacles in reaching their ideal life (whether that involves FIRE or not)? EDIT: I am sibling 2, but you all seem to love sibling 3 a lot haha! [link] [comments]  |
| How to manage a long "coast" period when doing CoastFIRE Posted: 08 Sep 2020 04:23 PM PDT I'm pretty new to this community, and after looking through various types of FIRE, CoastFIRE seems to make the most sense for my situation. I'm not sure if my numbers are 100% correct, but as far as I can tell, if I manage to save up around 620K by the time I'm 30, then I'll be able to coast until 50 and then have a safe withdrawal of 100K per year waiting for me. (Assuming 7% inflation-adjusted growth, and a 4% withdrawal rate) First of all, is that really correct? Seems a bit too good to be true. Second, does this mean that I can just spend 20 years making sustenance level money, and travel the world/read/do-whatever? Obviously, this is dependent on not having kids, and not taking super extravagant vacations. But I don't see kids in my future, and my SO and I don't need fancy things. Currently, I'm 25 with around 300K in retirement+savings. I'm pretty sure I should be able to stockpile the other 300k in 4 or 5 years. The biggest issues I can see are:
Does this seem like a good idea? How would I handle medical costs during the coast period? Is there something big I'm missing here? Thanks for any input you might have. [link] [comments]  |
| Questions about how to invest in Vanguard index funds Posted: 08 Sep 2020 06:08 PM PDT I've recently wanted to start investing in vanguard index funds (S&P 500) for the first time, however I have a lot of questions as a beginner who is just getting started in investing. My first question is how exactly do you retire on this type of money? For example if I had 1M$ and invested it for X amount of years while continuing to add money into the index fund over that time period, am I supposed to sell off these funds and basically live off of it once I retire? Also, how much is the tax rate from actually selling it? I'm seriously new to this and any advice from someone who actually has some experience would be appreciated. [link] [comments]  |
| Withdrawing when the market is down Posted: 08 Sep 2020 08:03 AM PDT For those who are FIRE'd, what did you do during the last 7 months before the market rebound? Were you withdrawing the same SWR during those months? If so, do you now have a lower principal now than you did before? [link] [comments]  |
| Check up on finance for my age Posted: 08 Sep 2020 06:29 PM PDT Hello, I live in North jersey, i just turn 28 single no kids no bills. Live with family in tiny room in basement. Would like feedback/advice on my progress to ensure im on the right path. Salary 56k Side business varies Networth today 415k no debt living with mom in basement tiny room. Max out hsa, 401k, roth and sep ira for this 2020 year. Have 10k for emergency fund 20k savings 45k housing fund Rest business account & brokerage account. Im currently trying to have my business back to normal due to covid 19 messing things up. Working on fixing up my resume to get a better job 75k + Trying to buy a duplex to house hack, even tho north jersey is very very hard to cash flow. What can i do to increase earning ability and what investments should i make with these funds? [link] [comments]  |
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