Financial Independence Daily FI discussion thread - October 17, 2020 |
- Daily FI discussion thread - October 17, 2020
- My (weird) view on FI. Am I thinking straight?
- My journey to 50% retirement - COASTFIRE @ 33
- FIRE asset categories and inflation
| Daily FI discussion thread - October 17, 2020 Posted: 17 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]  |
| My (weird) view on FI. Am I thinking straight? Posted: 17 Oct 2020 07:17 AM PDT Hello I've known about the FIRE movement for some time now, but recently I watched the "Playing with FIRE" documentary (which is great), and that really got me thinking about it and what I want to achieve in life. As far as I understand, people who want to FIRE do it because they want to have the freedom to do what they want to and not get confined by money worries and/or their day job. Cool, I completely understand that, but what if the goals you want to achieve involve having a job? Well... that's kind of me. I am 26 and work in research. My #1 goal is to contribute to my field and advance humanity through it, and then secondary goals of having a family, spending time with them and friends, financial independence, living a healthy life, and exploring the world. Now here is the weird bit, to achieve my #1 goal, I have to work in a team which constitutes either being part of an R&D company or academia, both of which pay very decently here in Europe and allow for a great lifestyle. I am fairly confident that I will always be able to find such jobs throughout my lifetime, which gets me thinking, by pursuing my #1 goal, am I by default FI? Now obviously, there is no such thing as true FI - I can't decide to buy a private jet or something but 90% of the time I can decide what I want to do, and never for the past 3 years or so have I had any sane money issues where I couldn't get something I need. From a FIRE perspective, does my reasoning make sense, or am I missing something? [link] [comments]  |
| My journey to 50% retirement - COASTFIRE @ 33 Posted: 17 Oct 2020 03:00 PM PDT TLDR: 33M, 800k NW, negotiated a half time job (6 months on, 6 months off) to allow for traveling. I'm stoked! Wanted to share my tale, as I love reading success stories and my journey has some twist and turns. Some details are obfuscated to protect my innocence :) Some Background2004 - Start in internship (during transition between High School and College) with a large defense contractor. My salary for an intern is great ($18/hr) and I'm given retirement benefits. Immediately start sinking 25% into my 401k. 2008 - Graduate college with a degree in Engineering. The job market sucks, and I take a few months off to backpack around Europe and Africa. 2009 - Come back to my HCOL city and start working as a government contractor. Salary is $55k. I'm fortunate to have the option to live with my folks so I can save up. 2010 - Switch job/company for a new salary of $63k. 2011 - Internal job change to $68k. 2012 - Switch job/company to $80k. 2013 - Buy a 1 BR cooperative in in the downtown area. The building is old, and the coop fees are high, but I love the location and the neighborhood. $229k purchase price with 20% down @ 3.75% interest nets me a mortgage at roughly $850/mo. All cooperative fees + additional costs add roughly the same, for a total monthly payment of $1700. 2014 - Internal job switch. Base salary stays the same, but I get ~$20k in commission, bringing my total to ~$110k. Get married. Luckily decide to keep our finances completely separate, which was a great idea, because... 2015 - Get divorced. I decide to take a sabbatical in Q4; what was intended as 1 year off balloons into 2 years. I spend a year camping through Africa, 6 months in the Indian subcontinent, and 6 months thru-hiking the Appalachian trail. These were the best 2 years of my life. Total cost abroad for the 2 years was around 40k. When I return, I find that my NW is about the same as when I left. 2018 - Find a new job with a salary of $132k. My two year sabbatical, surprisingly, does not seem to be an issue at all. 2019 - Find a new job with an F500 company. Lower base salary, but new company allows me to do mega backdoor roth, and there are stock incentives. Total cash comp ~135k. Over the next ~18 months, my company 401k is over 100k. 2020 - Get fired; with COVID happening decide to join a family member for a ~3 month camping road trip out west. Think a lot about what I want my life to look like, and how I can build that life. Where I'm at now
My Living ExpensesI don't do a super good job tracking living expenses, but I live a fairly simple life. My main hobbies are weightlifting, bike riding, and reading. My total household costs are roughly:
At my current salary, I'm able to comfortably save between $5k-6k a month. Back to the story...While on the road with my brother (this is over the summer, Jul - Sep 2020), I find two candidate companies and take interviews from hotel rooms in between camping under the stars. I'm trying to figure out how to best balance my love for the outdoors with "professional" jobs that allow a couple weeks off, at best. I know I don't want to go back to working full time, but I don't really know how to go about navigating the situation. I take one final round interview, which goes really well. This is how the conversation goes:
I was shocked how easy it was! There was almost no push back, and no negotiations on my desire to work only 6 months a year. Luckily, I work as a consultant where projects are typically 6-9 months long, so this ask isn't as crazy as it sounds. We spent some time negotiating what the offer looked like, considering the unusual circumstances, and we settled at $75/hr 1099. What the Future Looks LikeI'm super excited to have the flexibility to travel six months a year, and I know intellectually I shouldn't need to save any additional money to retire at ~60. I'm also extremely fortunate to work in a field where I love going into work every day. I plan on doing a lot more "long hikes" - the Pacific Crest Trail, the Te Aroroa, some hikes in Europe - as well as more backpacking/camping trips. In terms of finances, I should bring in 12.5k a month * 6 months = $75k. I haven't run all the numbers, but as a 1099 I should be able to shelter a ton of money from the IRS:
So self employment tax notwithstanding, my federal and state taxes should be quite low. The Elephant in the Room - My ApartmentEvery time I run the numbers, paying nearly 2 grand a month for my apartment seems crazy, especially if I only plan in living in it 6 months a year. Unfortunately my HOA rules do not allow renters for terms under one year. Another option I've considered is selling my apartment, and using the proceeds to either pay all cash for a place in a lower COL (Las Vegas? Charlotte?) and never worry about a mortgage again, or possibly try the digital nomad life for a year or two. In the short term, I think I'm OK holding it. When I travel overseas, I usually travel quite cheaply - either camping or staying in hostels, eating street food, walking around a lot, things like that. Even if my annual expenses balloon a bit, I would feel very comfortable pulling ~10k/year (5%) from my Betterment account to cover the delta. The other option, of course, is to work 8 or 9 months a year for a couple years if I'm drawing down my Betterment account too fast. Wrap UpI've been super fortunate with my life, and I'm really excited to see how the next phase unfolds. Please let me know what you think! [link] [comments]  |
| FIRE asset categories and inflation Posted: 17 Oct 2020 03:42 PM PDT Every FIRE plan needs to account for inflation. There is an assumption that certain assets, like real estate or securities are good to have because they will keep up with or outpace inflation, essentially, they act as a hedge against the erosion of wealth. I always assumed this hedge meant that the rich would be affected less by inflation than the poor, but recently I have seen articles that try to make the case that because the prices of the things rich people buy like education and property go up at a faster rate than the the things poor people buy, the rich are MORE affected by inflation than the poor. I am not an economist, so I have trouble evaluating these claims. So how much of a hedge are securities or real estate or other classes of assets against inflation? Are those people holding gold doing so because they may be right about securities and real estate not holding value? Here are a couple of articles that talk about this: "we find a negative correlation between long term inflation and income inequality" "goods consumed more by richer households had a higher increase in cost." [link] [comments]  |
| You are subscribed to email updates from financial independence / early retirement. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment