Financial Independence Daily FI discussion thread - October 25, 2020 |
- Daily FI discussion thread - October 25, 2020
- Does Bitcoin have a legit place in one's portfolio now that both Square and PayPal are promoting its mass adoption, and Fidelity is now recommending 5% allocation in bitcoin?
- The principles I learned in 7 years here
- What's the smartest way to come up with a 20% down payment out of the following options?
- Saving/Spending
- Keeping an emergency fund is actually worst than not having an emergency fund at all?
| Daily FI discussion thread - October 25, 2020 Posted: 25 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. [link] [comments]  |
| Posted: 25 Oct 2020 11:01 AM PDT I got the fidelity claim from this: It's getting easier and easier for people to buy bitcoin than it has in the past. You can now open your cash app or PayPal and purchase bitcoin directly from there. The average person would've been very unlikely to sign up to sites like coinbase or kraken just to buy cryptocurrency. If Venmo follows suit, this will be another catalyst for mass adoption of bitcoin. What are the implications of mass adoption of bitcoin? Does it just keep on increasing in value indefinitely? Or does it eventually cap off at a certain level? [link] [comments]  |
| The principles I learned in 7 years here Posted: 25 Oct 2020 02:37 PM PDT I've learned a lot by surfing these subs. I internalized it and am really happy with where I am. I wanted to take a minute to pay it forward and distill what I've internalized into first principles. First, a bit on my background. I was always interested in being FI and know that money doesn't equal freedom, but it is an aspect of freedom (if nothing else, freedom from worrying about meeting basic needs). I was saving heavily in my mid 20's but was also working for a nonprofit. I was saving 50% of my income but it honestly wasn't amounting to all that much. I wound up spending about a year teaching myself data science before and after work. I was really motivated by the field and, luckily for me, it turns out to be quite lucrative. I also started skydiving. That meant moving to a shared 1 bedroom apartment with somebody I butted heads with so I could afford it and not overly sacrifice savings goals. That was a tough call because skydiving is expensive, but it also made me much more risk tolerant and a generally happier and less reactive human. Skydiving taught me that most of my fears were unfounded (evolution predisposes you to fear more than you have to) so I geared up for a big life change. When I was good enough at data science, I quit my job in the nonprofit and moved to San Francisco to do a 3 month bootcamp program. Everybody thought I was nuts. That drained my savings virtually down to the last dime (with no debt though). I got my first job in the industry making very little money in a role where I would learn a lot. I loved it and got a promotion in (I shit you not) 2 weeks of being on the job. That was my first 6 figure income. Zoom forward four years and I'm at a major company with a significant equity stake, financially comfortable, and having just bought a home. Not quite yet FIRE but getting close depending on how my company stock does. Obviously everybody's path is different. But principles are more universal. With all that, here are the main principles that lead to my success:
TL;DR - Reality is malleable. You can achieve whatever you want as long as you take a step back, strategize, and then kick some ass. If you adopt some principles and play the long game, you'll ace this whole life thing [link] [comments]  |
| What's the smartest way to come up with a 20% down payment out of the following options? Posted: 25 Oct 2020 04:23 PM PDT What's the smartest way to come up with a 20% down payment out of the following options? Quick back story of my situation: I currently own a small condo that I rent out for $1900 per month in San Diego that costs me around $1500 per month all in including principal, interest, taxes, insurance, and HOA fees. It's currently on a 3.5% 30 year fixed mortgage since it was originally my primary residence. I bought the place back in 2015 so i'm already 5 years into the mortgage. I am currently living in my girlfriend's father's rental house with her and my share of the rent is only $1000 per month which is one of the reasons the math made sense. Unfortunately, our relationship is a little on the rocks and there is a good chance it won't work out much longer so i'll have to move out of the rental :( Since my the tenants just signed a new 1 year lease, moving back into my condo isn't an option. That being the case, I am looking to potentially buy another small condo to make my new primary residence since the rates are so low and I wouldn't ever find a rental for $1000 again since it was almost half of market rent for my area. I'm almost 34 years old and don't really want roommates at this point even though that could save money. I considered a duplex but they are way out of my price range even with a tenant on the other side. The entry level condo's here in San Diego are between $300k-$350k in any of the decent parts of town near my work. That being the case, I will need around $60k-$70k the new down payment. Finally my question, which option is the smartest and why? Option 1: Do a cash out refi of my condo for the down payment since It's worth around $330k-$340k and I currently owe $186k. Downside of this option is I would go from a 3.5% rate to almost 5% or more since it's an investment property now and not my primary anymore. Option 2: Take some of the money out of my retirement accounts which has around $120k between my 401k, 457b, and Roth IRA. Perk of this option is since I tested positive for covid this year, I can avoid the 10% early withdrawal penalty and can also spread the tax burden of the 401k/457b over 3 years. Option 3: Use some of the 30k I have in cash combined with option 1 or 2. This is my emergency fund however and I don't like the idea of draining this below 25k since I will have 2 properties at this point which increases the risk of needing it . Thank you for reading and letting me vent! [link] [comments]  |
| Posted: 25 Oct 2020 02:28 PM PDT So i have a dilema, how do i decide when i want to buy something if i really need it or it's not so important. I mean i'm a computer/gamer guy i dont even have a tv, so my free time hobbies are around the pc, for a while i wanted better speakers, now i have some old cheap logitech which i hoped to replace when they will break, the thing is they are indestructible ... they will outlast me for sure. So with this in mind i decided to get a pair of very decent speakers because they most likely gona last a LOT of time, etc etc. But i keep thinking it's a rabbit hole once you get a thing then another and another, how does one find the right balance ? [link] [comments]  |
| Keeping an emergency fund is actually worst than not having an emergency fund at all? Posted: 24 Oct 2020 08:37 PM PDT If you think about it... it makes intuitive sense. If you wait long enough putting 100% of your earnings in a portfolio minimizes the downside impact of an emergency. While maximizing the potential profits gained. The longer you go without an emergency the more likely it is that 0% cash - 100% assets leads to a superior outcome than keeping 3-6 months worth of cash. Someone on Bogleheads even did an analysis backtesting worse case scenarios where an emergency occurred during severe market crashes. It turns out the person who didn't keep an emergency fund outperformed the EF person in both worse case scenario and best case scenarios. https://www.bogleheads.org/forum/viewtopic.php?f=10&t=311324 This has made me consider changing strategies and keep everything in equities. Pay for everything using credit card and at the end of the week pay off the credit and then dump the rest of the paycheck into my portfolio. What are your thoughts? [link] [comments]  |
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