Financial Independence Daily FI discussion thread - October 13, 2020 |
- Daily FI discussion thread - October 13, 2020
- Saving for its own sake
- I built a CoastFIRE compatible savings sheet. Thoughts?
- Leaning into CoastFIRE. What are your experiences?
| Daily FI discussion thread - October 13, 2020 Posted: 13 Oct 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: 13 Oct 2020 10:32 AM PDT Over the weekend I finished Morgan Housel's new book, The Psychology of Money. There were several great chapters, but I think the point that I've thought the most about since, is Housel's beliefs on saving. Morgan Housel says in the book that he saves a higher portion of his net worth (I think it was 20%) than most people his age (30s). In the chapter about saving, he talked about the fact that most people see saving as a task unto a specific expected purchase: a down payment, a car, etc. He argues that saving is good enough on its own merit -- doesn't require a specific goal -- because having a large liquid net worth gives you more protection and options. I really liked this way of thinking. It sounded so familiar to everything I hear about financial independence that I thought it might spur a good conversation here. Is 20% of your net worth too much to keep liquid? What do you think of the idea of saving for its own sake, as opposed to always having a "job" for every dollar? EDIT: Really enjoying everyone's responses. I thought I'd clear up some confusion. First, it's a great book and this was just one chapter that I was unsure about. But I recommend the book overall and really love Housel's work. Second, I realize my language was a little confusing in how I described "saving." What I meant to say: Housel talks in the book about keeping 20% of his net worth in a savings account. [link] [comments]  |
| I built a CoastFIRE compatible savings sheet. Thoughts? Posted: 12 Oct 2020 06:12 PM PDT Hi guys! I really couldn't find a savings calculator that fit the plan that my wife and I are working towards. We want to aggressively save, then back off and CoastFIRE while we spend time traveling and working remotely. Most retirement calculators I've found either make you pop in a fixed savings amount per year, or have some % increment per year number. There just wasn't enough flexibility. And sometimes they just don't give you enough numbers to go along with it. So I created my own spreadsheet. You can enter in an initial value for this year (since it's almost over), and then enter a savings amount (or withdrawal amount) for each year and it will calculate your total account balance, interest earnings, 4/3/2% safe withdraw, and then 4/3/2 adjusted for inflation (with an inflation modifier at the bottom if you want to change it, currently 2%/yr). Feel free to use it, share it, steal it and put it on your blog. But I was hoping some of you fancier excel folk could give me some feedback and let me know if there's anything else that should be added that might help some people. It's nothing fancy, but I hope it helps someone! Edit: I added some instructions, and I updated some column names and formatting. I also updated my "demo scenario" to better illustrate the reasoning behind the worksheet. You can see that "Demo Guy" has $100k balance this year, saves aggressively until he's 40 and then STOPS for 20 years. By the time Demo Guy is 60, he can safely withdraw $110k that year, which would be like having a $60k/yr income in today's money. Instructions
2nd Edit: I moved all the variables into a second tab named "variables." Easier to manage. You can now set your start year, starting age, and starting balance. [link] [comments]  |
| Leaning into CoastFIRE. What are your experiences? Posted: 13 Oct 2020 01:54 PM PDT Hi folks :) So I'm suddenly in the great but nebulous spot between being frugally and comfortably FI. Crossed the FI threshold for my current spending level this summer, would expect to reach a comfortable spot in a couple of years. So I'm wondering about people's experiences with coasting a bit during this final savings phase. I absolutely suck at choosing between multiple good options, and it would be very valuable to hear what other people here have experienced. I'm pretty sick of my current employment situation, despite it being a very comfortable way to earn a living. Working 4 days a week, no stress, pretty senior role and I can go on autopilot most weeks. Any alternative job would require more of me, but right now I'm very ready for a longer break. It's a combination of having done the same thing for too long, not getting enough of a challenge and longing to spend more time on family and my own projects. So here are my options, among the choices I'd likely make in the next 6 months:
Here are the fears/complications:
Mr. Money Mustache is my hero, with his carefree attitude and ability to make a decent living from just doing random stuff. That's sort of the dream long-term, and being more-or-less FI gives me an incredible runway to try out stuff like that. But it's tough to commit to it, even from such a place of safety, hence the desire to keep my current, comfortable employment rolling. What are your thoughts? What did you experience when you went coasting, in terms of quality of life and prospects for earning a small side income? (Health insurance is of no issue to me, living in a country with high taxes but socialized healthcare. Would also get additional retirement benefits a couple decades from now. So no fears on that front). [link] [comments]  |
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