Financial Independence Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - November 02, 2020 |
- Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - November 02, 2020
- Daily FI discussion thread - November 02, 2020
- 1 Year post-FIRE report (spreadsheets and graphs included)
- Weekly FI Monday Milestone thread - November 02, 2020
- Selling Everything to Travel the World (x-post)
- Can borrowing money to invest speed up FI?
| Posted: 01 Nov 2020 10:08 PM PST Need help applying broader FIRE principles to your own situation? We're here for you! Post your detailed personal "case study" and ask as many questions as you like, or help others who've done the same. Not sure if your questions pertain? Post them anyway…you might be surprised. It'll be helpful to use our suggested format. Simply copy/paste/fill in/etc. But since everybody's situation is different, feel free to tailor your layout to your needs. -Introduce yourself -Age / Industry / Location -General goals -Target FIRE Age / Amount / Withdrawal Rate / Location -Educational background and plans -Career situation and plans -Current and future income breakdown, including one-time events -Budget breakdown -Asset breakdown, including home, cars, etc. -Debt breakdown -Health concerns -Family: current situation / future plans / special needs / elderly parents -Other info -Questions? [link] [comments]  |
| Daily FI discussion thread - November 02, 2020 Posted: 02 Nov 2020 12:09 AM PST 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]  |
| 1 Year post-FIRE report (spreadsheets and graphs included) Posted: 02 Nov 2020 03:20 AM PST Introduction: I'm 34, male, single and as of 1 November this year, I have officially been FIREd for 1 year. I did not create a FIRE post when I pulled the trigger because I actually was laid off from my last job a couple years before I had originally planned to FIRE. I did not really feel motivated to look for another job right away so after looking over my finances, I determined that I was leanFIRE ready and decided to go for it. I chose to use my first post-FIRE year to determine a. Whether my lifestyle was financially viable and sustainable, and b. Whether I actually enjoyed the FIRE lifestyle. After 1 year the answer to both these questions is YES and here is my 1 year post-FIRE report. It's going to be lengthy. I will bold the different sections if you want to scroll down and only look at the ones that interest you. Supporting data spreadsheets and charts. My current net worth breakdown, pulled from personal capital which I use to track my accounts: Chart tracking my net worth over the last year, also pulled from personal capital: My Personal Budget Spreadsheet: NOTE, this does not track my real time spending, only projected based on what I have been spending so far. You'll see why I did not track my actual spending later on in this post. My bank account also has its own spending tracker that I use to monitor my spending and I used that date to create this budget. It is more or less on track with my actual spending with minor variations depending on the month. https://docs.google.com/spreadsheets/d/1hHsGaJWUcv7S_zQcCu8h8nRVWrTWA9arC-vXol7kKLA/edit?usp=sharing Expenses/earnings for my duplex this year (personal information deleted): https://drive.google.com/file/d/1nbWJeOUiSXYuNvnnHclBhMd_8Uq3F8HA/view?usp=sharing Debt is $0, no car payments, no mortgage, nothing. Brief bullet point breakdown of how I reached FIRE: -9 years in the Army as an Officer after I graduated college, 3.5 years of that spent overseas (combat deployments earn bonus pay and salary is not taxed) -Low spending, high savings, aggressive investment into the stock market starting in 2009 (almost exclusively index funds), and all throughout the bull market recovery over the following 10 years. Savings rate ranged from roughly 30% (early in my career) to 95% (during a year of combat deployment in which I spent almost no money as I was living in an Army base in the desert with no bills to pay and not much to spend money on) -Always looked for ways to save money, cut my own hair, made my own lunches, took advantage of military benefits such as the GI Bill to further my education for free, didn't make a purchase if there was a free/cheaper alternative etc. -Left the Army due to health issues, received military disability, which makes me eligible for VA healthcare as well as receiving a monthly disability check. -Got a job as a manager for a manufacturing company for 1 year after the Army, but was then laid off due to restructuring. Decided to leanFIRE early after that as opposed to finding another job for another couple years. Major financial events over the last year (tldr at the end): Buying a new property: So, after I decided to FIRE, my first major decision was to buy a permanent home as I had been renting all of my professional career due to moving a lot in the Army. I decided to purchase a duplex/multi family property so that I could live in one unit and rent out the other for additional income. I ended up getting one for cheap because the previous owners had not maintained it well and it needed a lot of cosmetic work, but structurally it was fine. The building had 2 apartments, a 1200 square foot apartment that a family of long term renters lived in (they had lived there 12 years and raised their kids there, they had paid rent on time and taken pretty good care of their apartment, at least considering how little the landlord had done). It did have a number of issues though, they had pipe leaks, a broken dishwasher, a toilet that needed replacing, a few holes in the walls that had never been patched up etc. The other unit was an 800 square foot apartment that was in very bad shape, lots of water damage/mold that needed to be completely renovated (walls, floors, kitchen/bathroom cabinets) pretty much the entire apartment needed to be stripped down and redone. There was also work that needed to be done on the outside of the house such as broken gutters, a broke down shed in the back that was just a pile of scrap and other stuff. The property was valued at approximately $117,000 according to tax estimates, the owner had it on sale for $111,000, and it had been listed for almost half a year (most people don't want to own a duplex and have to fix up a lot of issues after buying a house). After a lot of haggling back and forth, I bought the property as is for $90,000. This also is why there is a jagged "slice" in the first part of my net worth chart, where I sold investments and then added the value of the property shortly after. The negotiations took place at the end of 2019, but I scheduled the actual sale to happen in January, reason being was I was planning on selling off investments to pay for the house in cash, but as I would be earning no salary in 2020, my taxes would be very low for my long term capital gains. Everything with the sale went smoothly. I worked with a real estate agent that I got through a Army Veterans housing program who had worked with Soldiers before, solid guy, would recommend. Renovation and Flooding: From January through May I had the house renovated, fixed a LOT of issues. Everything was perfect, I fixed all the major issues in the renter's apartment (they were very happy) and completely redid the 800 foot apartment which I was going to move into, new floors, walls, ceiling, kitchen, bathroom etc. Took a video of a walk through of it to show off to my family and had my move in date scheduled. The DAY BEFORE I was supposed to move in, the area was hit by the worst flooding in about 14 years. While the flood did not directly flood the area where my house was, it turns out there is a drain right outside my apartment (which is much lower elevation than the tenants apartment) that led straight to the river, when the river flooded it pushed water up the drain and into my apartment. I rushed down to find 4 inches of standing water in my brand new apartment. I cancelled the move, bought a pump to get the water out and called servpro for water damage cleanup. Brand new flooring and cabinets had to be replaced and the walls had to be cut into about halfway up because they had soaked up too much water. This was not only expensive but soul crushing as well, my brand new apartment was wrecked. Second renovations happened from May-June, I salvaged what I could. I didn't want to buy brand new cabinets/counters all over again so I reused what I could, but it definitely lost a lot of the "brand new" feeling that it had had before. Anyway, the move in finally happened at the end of June. I had also been renting an apartment during the whole renovation process, so was paying rent and apartment utilities from November 2019 through July 2020 on top of everything else. Tldr: Bought a duplex for $90,000, valued at $117,000, but it needed a lot of repairs/renovations. Long term tenants already living in one unit. Spent roughly $23,000 on the first set of renovations to fix up both apartments. Area flooded, flooding my new apartment. Spent roughly $17,500 on the post flood cleanup and second round of renovations See expenses/earnings spreadsheet linked at the top of this post for more details. Also spent roughly $7,000 on rent and utilities from November through July for a place to stay while renovating the new place. Amazingly, even though I was spending a large amount of money during this time, my net worth still continued to increase (see the net worth chart) thanks to the market continuing to grow. Current financial situation (see earning/spending spreadsheet for full budget breakdown): Current annual income (Sources are Investment dividends/interest, rent and military disability): ~$31,000 Estimated annual expenses (not including unplanned expenses) ~$15,000 After all the ridiculous amount of spending I did during the first half of the year (And also why I do not have a spending tracking chart as it would look bonkers) I have now settled down into a regular schedule. I am continuing to be thrifty, as it's the lifestyle I've lived for the last 10 years and is routine now. Thanks to my 3 streams of passive income I am now actually generating more income than expenses. I've tried to make my budget as detailed in terms of planned expenses as I can, but there will always be outliers. For example, due to how unusual my finances are this year (no salary, huge sale of investments, purchase of property and many tax deductible repairs) I'm hiring a CPA to do my taxes for the first time. It will cost $400 for him to do my taxes, and I also had a 1 hour meeting with him in which I asked him a whole bunch of tax related questions regarding my current citation, which cost another $200. After this year I expect I should be able to go back to doing my own taxes as I have in years past, so this expense is something that lies outside my normal planned budget. But even with these one time/unexpected expenses, I'm still very much in the green in terms of my budget. Satisfaction with the FIRE lifestyle: I am a very unusual person, in that I am quite happy being by myself 95% of the time. I'm also very easy to keep entertained. Books/audio books, movies, TV shows, games, most of my entertainment is digital. And it's actually only in the last year that I've realized just how vast the amount of entertainment that there is available. I've got a giant list of TV shows, movies, books, games that I've been interested in consuming, and if anything that list has only gotten bigger over the last year. I also find myself mini-side projects to occupy myself with. For example, I joined an online consulting website early in the year where you post your resume and companies will contact you if they want to get feedback/testing on a product/website/procedure that they have. Given my experience in the military and logistics, I was able to enter a few of these interviews/testings, and also make a bit of money on the side doing it. Naturally, as my skills deteriorate, I'll be less eligible for this type of thing but it was fun. Over the last year, I honestly can't think of a single moment where I thought to myself "I'm bored, I've got nothing to do". If anything I've spent many late nights absorbed in something (which is ok since I can wake up whenever I feel like it now). And afternoon naps, they are a thing that I love so much. When I was in the military I would typically get up around 5:30-6:00 in the morning, go exercise with my unit for an hour, then shower/change and jump into the work day. It would usually be right after lunch when things had calmed down a bit that I would usually start to get drowsy and would have to stay on my feet so that I wouldn't risk dozing off if I sat down. Now if I'm tired after lunch, I can take a nap and it's awesome. It does wreck my sleep schedule on occasion though. Retiring right into the middle of a pandemic has not been ideal of course. I did want to travel a bit after retirement, there are a number of annual conventions/conferences I've always been interested in but never attended due to my focus on work. They are a no-go this year and probably next year as well. The same goes for socializing, while I'm perfectly happy to be alone most of the time I do occasionally want to engage in social activities. When I was in college I was big into pen and paper role playing games with a group of friends but have not gotten involved in it since then. There are a couple gaming stores in town but they have shut down during the pandemic. Fortunately I found a website that lets you form/find groups of people to play with online, and there are a number of digital tools that let you create characters, maps, roll dice etc. So I'm now part of a weekly online gaming group that are currently deep into our first campaign together. It's great fun and fills my social interaction itch while being stuck at home. Many people say that "people need to work in order to have purpose and direction in their life" to which I say BS. I've experienced a lot in my life so far. I was raised overseas, I've traveled to over 20 countries in 5 continents, am an eagle scout, have been to war, have been in leadership roles my entire professional career. At this point, living a boring, relaxing life is just what I want and need. I'm not ambitious, I don't want to be a CEO, hold political office or live like a celebrity. I just want to live a relaxing life and enjoy my hobbies. That may change some day, and if it does, then I'll make adjustments in my life. But right now I'm living a life I very much enjoy and have no reason to change it. Future plans: Here are some things I'm interested in accomplishing in the next year or so. Travel - as I mentioned above, once the pandemic is over (second half of next year seems to the general estimate from experts) I plan on visiting a number of conventions/conferences/locations that I've been interested in but never got around to seeing while I was working. The good thing is that I can also take advantage of the off-peak traveling season for lower prices/less crowds for any places I want to sight see. Getting a dog - I love dogs, but never got one before because of how often I was either out of the country or away from home for extended periods of time. Especially since I am single I didn't want to end up ditching it somewhere whenever I was gone. I held off on making any serious commitments during my 1st year post-FIRE just in case I changed my mind but most likely I'll start looking for a dog to adopt early next year, there are a couple animal shelters near me that I've already stopped by to check out. More time with family - Again, something that has been derailed because of the pandemic. Due to being in the military I did not get a chance to spend much time with my parents (especially when overseas). I only saw them 1-2 times a year for a good chunk of my career. We are quite used to it given that my family has moved pretty frequently all my life (we were ex-pats living overseas when I was growing up) but I had hoped to be able to visit them more often now that I have so much free time. Unfortunately that's not been possible given the current citation as I don't want to risk possibly infecting them. But we do talk much more frequently than in the past. Becoming more handy with home improvement/repair - I've been learning basic home improvement skills (As have many people who are stuck at home during this time, lowes is always packed). I've learned to take apart and clean a window AC unit, caulk a bathtub, hang curtains etc. I'll leave the more complicated stuff like plumbing and electrical to the experts, but it's nice being able to take care of minor stuff myself. Boosting my emergency fund - I currently have about 7 months of spending in my savings account, I intend to increase this to 12 months of spending over the course of the next several months. The economy is wack right now and it would not surprise me at all if we have a full blown recession and market crash in the near future, so while the market is strong I'm going to boost my emergency fund. After that I'll probably stop withdrawing my dividends from my investments in cash and just let them reinvest back into themselves, I think I can live quite easily on the income I get from my military disability and rent while leaving my investments to grow. Conclusion: So, to conclude this very long post. It's been a crazy year, I've experienced a lot of things I've not done before, but overall, I'm very happy with my current lifestyle and have no desire to change it anytime soon. If you are still working your way towards FIRE, I wish you luck on your journey. [link] [comments]  |
| Weekly FI Monday Milestone thread - November 02, 2020 Posted: 02 Nov 2020 12:09 AM PST Please use this thread to post your milestones, humblebrags and status updates 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! 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]  |
| Selling Everything to Travel the World (x-post) Posted: 01 Nov 2020 09:34 PM PST I posted the following in r/leanfire and a commenter suggested I posted it here for more perspective. Without further ado... Long time lurker, first time poster. DW and I are 39 years old. We have three kids under 10 years old. We currently live in a MCOL city in the U.S. No debt of any kind. Mortgages are covered by rental real estate. We've been savers since we got married. A few years later, I discovered Jacob and ERE way back in the day and the rest is history. Our goal is to FIRE as soon as possible; sell everything we own and travel the world for the next few years. We'd like to live on $40k after-tax per year. We would ideally start our travels in Southeast Asia once Covid is over and countries welcome tourists again. Then we'll probably head to Europe and Central/South America. Since we're both 39, I've been using 3.5% as our SWR. We don't plan on earning any additional income while we're traveling and living abroad. Our household income from W-2 is currently $75k which will go to zero once I quit my job. We also have rental income of $40k net after expenses, reserves and taxes. Current asset breakdown:
No health concerns, except I know I need to lose some weight in order to enjoy a longer retirement. For health insurance, we plan to self-insure while abroad, or I might get a high deductible international family plan. The kids are currently homeschooled so traveling will not disrupt their routine much, just as Covid has not disrupted our routine at all. The plan is to slow travel until the kids are high school age, then we'll return to the U.S. so they can attend high school in the states. Both of our parents are relatively healthy as well. We plan to visit once a year while we're living/traveling abroad. Scenario 1: We intend to live off just rental income for the next few years. I plan to pad our checking/savings a bit more until we get 12 months+ of living expenses as backup to cover extra expenses and vacancies in the rental units. Once FIRE'd I plan to sell our vehicle to help with this. By keeping the rentals, our retirement accounts would grow untouched until we reach age 59.5. Scenario 2: Sometimes I think it might be better to just sell all the real estate and put all the funds into the market based on our asset allocation and withdraw our 3.5% each year and just live off that to avoid any headaches with the rentals. I'm also quite tired of self-managing and I'd hate to end up with a bad property manager which would probably cost us $600 per month. I have not requested any quotes yet. We keep going back and forth between the two scenarios. So, what would you do? Sell everything including all real estate to travel the world with complete freedom, or keep the rentals, self-manage them and live off the rental income? Or, you may suggest an alternative solution. Thank you very much for reading. I look forward to your response. [link] [comments]  |
| Can borrowing money to invest speed up FI? Posted: 01 Nov 2020 04:18 PM PST I had a shower thought that the reason that home ownership generates so much wealth for the average person is the leverage someone gets with a mortgage. You can get 5-10x your initial capital so even 2-3% yearly returns has a big impact. So why don't people do this with investing? Taking out a 300k loan for 30 years could give you way more leverage and speed up the process to FI. It could be seen as risky, but isn't it basically the same thing as taking out a mortgage? [link] [comments]  |
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