Posted: 22 Oct 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.

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My (Delayed) FIRE Journey

Posted: 22 Oct 2020 06:35 AM PDT

TLDR – Unmotivated kid that barely made it out of high school, joins the military, gets educated, and travels the world as a Corporate cog before retiring comfortably at 54.

A lot of the posts here seem to follow a common pattern: Young person gets a good degree, lands a great high paying job at a tech company, starts saving right away, and retires in their early 30's . Absolutely nothing wrong with that – wish I had done it that way.

I have been FI for a few years and figure I am about 5 years from RE, so I thought I would share my story for those of us that did not have our act together, early on.

I barely graduated high school in 1989. I think I failed 2 classes my senior year solely because I skipped too many days. With absolutely no interest in school, I got a job doing construction work. Getting bored with that, I enlisted in the Air Force in 1991 (starting pay $697.20/mo). A co-worker convinced me to take a college class with him. What started as 3 semester hours, quickly increased to 15/18 semester hours. While I would not say it was enjoyable, it did give me something to focus on.

In 1996, I completed my degree in business (from a school I guarantee you have not heard of) and was accepted to Officer Training School. Along with the 52% bump in pay with becoming an officer, I met my future wife. Fortunately, she was way better at managing money than I was. When I got to my next assignment, I started my MBA.

In 2000, my wife and I welcomed our daughter. After 10 years, I left the Air Force in 2001 with about $40K (wife/my IRAs) and $10K for a house down payment.

I started off an IT consultant. My pay was about twice what I made in the military, but the first job did not last long as the company went out of business. Fortunately, I was able to quickly move to a client, doing the same work - with a raise.

Over the next 20 years, I continued to work/advance in this field, moving to different companies and getting progressive bumps in pay. During this time, we kept saving more. Maxing out IRAs, 401ks, Coverdell, even a Mega Backdoor Roth for a few years. At the peak, we were probably saving 70% of my income.

Most of my jobs required a lot of international travel, so I was able to travel the world in business/first class, on the company's dime. While I have been to around 50 countries on 6 continents, there were probably 15-20 countries that I traveled to a bit more frequently. My wife and daughter were able to accompany me on several of these trips. For personal trips, I had lots of points/miles. I tease my wife and daughter that they are spoiled because the first time they had to fly economy for an international trip was in 2018.

After moving on from my last job (completing my 2nd Master's degree, while I was there), I came to the realization that I really did not like working anymore. I was always one of those guys that thought I would work forever. Then that number dropped to 67, then 65, then 60. Now I have got 54 as my number (~5 years away).

I have $2.6M in retirement savings, a rental house that is paid off, and my daughter has 3 semesters of college left. We just used up her college savings, so will pay off the remainder as the bills come in. Our only debt is our current residence and we just got that refinanced to 2.75%.

My goal is to get to $4M in retirement savings before retiring. Using conservative numbers, along with our current savings approach, this is doable. Our rental property will get sold off to purchase our retirement home, wherever that might be. My wife and I are starting to research areas.

Compared to most people, I am in a pretty good place financially. Especially when you consider how I started off and that I am missing 10 years of work-related retirement savings/matching. I put this story out there to demonstrate to others that "don't think it's possible" or will "never be able to do what these other people have done." It will not be easy, and it will take a lot of effort or commitment on your part, but it is possible.

Some general thoughts/recommendations from my experience:

-Get a degree! Do not overpay for it and make sure you can get a job with it.

-Max out your tax advantaged accounts. You will never get to where you want to be without doing this. It is going to be painful, but once you adjust, you will not miss it.

-Being a landlord is OK, but it is nowhere near as simple or handsfree as people make it out to be. I would have been much better off (with a lot less hassle) if my money sat in the market.

-If you are saving money for your kids to go to college – save MORE.

-The Air Force is a perfectly good way to get started. However, you will need to maintain focus. Get into a career field with a marketable skill and go to school. It is a lot more fun to drink with your buddies than it is to go to classes at night.

I tried to keep this as short as I could, but I am more than happy to answer any questions.

submitted by /u/Unlikely_Use
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Being stealth when people know your job titles?

Posted: 21 Oct 2020 05:50 PM PDT

I see a lot of denial from people in this sub about the issue of being stealth with your wealth. I think it's not a realistic position if you want to maintain relationships with people you grew up with if you're from a low income background.

I'm from a very low income background (daughter of migrant farm workers) as is my husband. We each come from families where we each have 30+ cousins and are very close with our extended families. My husband salary is quite obviously high, as he is a nurse in a top hospital. I'm in a job position that many people are familiar with but don't actually know can earn quite a bit of money, so I'm able to hide my salary more.

So, if you come from a very tight knit community, how do you deal with the wealth gap? Do you encounter a lot of guilt when your family and friends are suffering? I always wish that I could help everyone, but I also don't want to fall into the trap and become poor again myself. My husband and I both agreed that we would pay off our parents mortgages. This then helps our siblings too, because if anyone is ever struggling or homeless, they have a place to stay without a steep mortgage.

But then I have my friends. The community I was raised in had very strict values, similar to the "snitches get stitches" mentality, where you shouldn't be doing well if you're friends are struggling. How do you deal with this type of guilt? I'm a woman of color btw, so this mentality has saved my own family many times and I feel bad turning my back on it

submitted by /u/Quiet_Priority7575
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4% Rule Update

Posted: 22 Oct 2020 01:48 PM PDT

https://www.marketwatch.com/story/the-inventor-of-the-4-rule-just-changed-it-11603380557

25 years ago the rule was 4% which was updated to 4.5% in 2006. Now, Bill Bengen has said 5% withdrawal should be fine which he uses.

I'm hoping to start a good discussion here beyond no, 4% is the rule. Thanks

submitted by /u/lmbb20
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