Financial Independence Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice - April 05, 2021

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• Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice - April 05, 2021
• Daily FI discussion thread - Monday, April 05, 2021
• From -$12k to $100k NW in 6 years with an art degree and mental illness
• Something way more risky than 4% ?
• Are we in danger? Anti-passive indexing arguments in the Atlantic this morning.
• Weekly FI Monday Milestone thread - April 05, 2021
• Stock Investing Efficiency
• 401k Traditional vs Roth Debate

Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice - April 05, 2021 Posted: 05 Apr 2021 02:00 AM PDT 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? submitted by /u/AutoModerator [link] [comments]

Daily FI discussion thread - Monday, April 05, 2021 Posted: 05 Apr 2021 02:00 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. submitted by /u/AutoModerator [link] [comments]

From -$12k to $100k NW in 6 years with an art degree and mental illness Posted: 05 Apr 2021 05:12 AM PDT I updated my spreadsheets today for the first time since early December and the total came to $100,803.34! Six years ago I was living in my parents basement paying off student loans. I want to share how I got here since it happened in large part due to this subreddit. ​ Some background on my life that influenced how I think about money: My parents were very frugal. I was in a relationship as a teen (an abusive relationship… more on that later). My ex-boyfriend got kicked out of his home at 18. He put himself through his first year of college on scholarships, got multiple jobs to pay for food and an apartment. We worked at the same place, so I saw how he took on as many shifts as he could handle with his other jobs. It wasn't healthy and he was definitely in a bad spot in life, but what I took away was that hard work, perseverance, and strict budgeting can get you what you need and want in life. My parents were straightforward with me about money; they paid for necessities, but I had to earn fun money. This meant a lot of my time outside of school went to jobs. I got my first job at 14 and have been working ever since. I had friends whose parents gave them fun money. They eventually weren't my friends anymore because I "didn't have time for them" … because I was working to make money so that I could do whatever activity they wanted. This was a good lesson in keeping people around (or not, in this case) who align with my values. I got scholarships to cover some of college, got jobs that covered parts of housing and food, and my parents covered what they could. I saw friends who took out loans for all of it and knew I wanted to avoid that, so I was smart about leveraging my good grades for more scholarships and jobs that covered costs. I took out loans when I needed to, which was thankfully rare. During college, my mom got very sick and ended up dying (more on this later). Long story short, how to pay for school, housing, and food was always on my mind. Money was always on my mind. I stressed about how to eat for the last two years of college. During this time I grew to hate relying on money. I didn't know about FIRE at this point, but I knew I didn't want to stress about money all the time. I decided whatever my career path was going to be, I was going to make a lot of money and then not have to worry. I want to pause here and acknowledge that privilege has played a huge role in my life and in my family's life, specifically being white, having a financially secure family as a safety net (most of the time), and having a good education. My journey would not be the same without those factors in play. ​ Okay, on to the numbers year by year. The networth is from the end of the year. 2015 NW: -$12k Graduated with an art degree with a concentration in graphic design, knew I was interested in web design, found a company doing tech-related things and took the internship they had available. This job is how I found out about UX, my now career. I'll call this Job A. Salary: $38k Debt: -$12k student loans 2016 NW: -$10k Debt: -$10k - Paid off my student loans in 6 months. Bought a used car for $15k, $5k down in cash (thanks dad), and planned to pay the rest off in 3 years to build credit. Salary: $42k - I was very aggressive about getting raises. I was underpaid and knew our company's finances favored squeaky wheels, so I was the loudest squeaky wheel. I don't recommend the squeaky wheel approach. Job A often did not pay on time or in the correct amount, but the work was exciting and I loved my coworkers. I was learning more about UX and getting to apply those skills to real world projects. I moved from my parent's basement to a relative's empty house where I lived for free. 2017 NW: $0k Salary: $49k, then $63.4k later that year - Still at Job A, I got other offers and threatened to leave if I didn't get a raise that matched. This was the only way anyone saw raises, and then when they did get the raise they were shamed for going about it that way. I do not feel good about this, but knew that I wasn't getting paid fairly. Looking back, this company was taking advantage of it's employees in more ways than one. I should have left around this time, but I didn't. Debt: about -$7k Started contributing to a Roth IRA. This year I realized that my previous abusive relationship from high school had really affected me. I had repressed the abuse for almost a decade. I began seeing a therapist and was diagnosed with anxiety. Met my now boyfriend, which was the brightest spot of 2017. This was the year I made a reddit account and discovered FIRE, propelling me to spend less and make more. The free living situation was no longer an option, so I moved into an apartment with a roommate. 2018 NW: $12k?? Salary: $77k - I was moving into management at Job A and in high demand for my skill set regionally. This had me thinking about leaving. Also, the company was straight up abusing its employees, so I was balancing shielding my team from that and getting myself out at the appropriate time. Debt: about -$3k My therapist was crap so I saw a new person. Diagnosed with PTSD from the abusive relationship. This year I also had a very specific medical event that involved me not being able to walk for 6 months. That, combined with the PTSD stuff, really put me into a downward spiral. 2019 NW: $37k Salary: $90k at Job A - Quit Job A without a plan because my mental health was so bad and Job A was making it MUCH worse. I started a small UX consulting firm which was meant to be temporary. I did that for 6 months and made enough to live on. I was mostly focused on finding the right PTSD treatment during that time. I was only able to do this because I had some savings, which, given how committed I was to FIRE, was a big deal for me to burn. I am not sure where I would be if I had not taken this break from work/life. $110k at Job B - the company I'm with now. It offers benefits (Job A didn't) so I can use more tax advantaged savings options. Still doing UX at Job B. Debt: $0k! Paid off my car. Found a new therapist and discovered I actually have Complex PTSD, or CPTSD. This therapist helped me put two important things together. First, I was in an abusive relationship in high school (although I didn't know it at the time) and my brain repressed ALL of that. A decade later, 2019, I started having flashbacks of things I had no memories of. I started having panic attacks. Second, after this relationship is when my mom got sick. For two years before she died, every day, I thought "My mom might die today." So this is what the therapist helped me figure out: For about three and a half years in my early twenties my brain was on stress high alert thinking something life-threatening was going to happen at any second. Moved in with boyfriend, so living costs went down. 2020 NW: $85k Salary: $110k plus equity (worth very little at the moment) Mandatory, company-wide reduction in salary for 6 months of 2020: $82.5k. Debt: $0k Got more serious about tracking where my savings/investment were going and how they are growing. 2020 ended with: Cash: $38k IRA/HSA/401k: $45k Other (life insurance, brokerage): $1,600 My therapist died unexpectedly, then Covid happened, my salary took a hit, and more medical problems happened. Initially Covid really helped my mental health, but overall has not. I found a great therapist halfway through the year and am seeing hope in the work and treatment we're doing. The medical problems are being managed but I'm paying a fortune for healthcare (not a great year to choose HSA). 2021 NW: $100k so far Salary: $110k - I'm used to getting aggressive raises every year. I'm feeling the itch to go get another offer and bully my way into more money, but I know that won't fly. I'm not used to working in a good culture, liking the leadership, and trusting the company finances. I definitely want to stay at Job B, so leaving just for a pay bump isn't an option. I am working with an outside personal mentor who is coaching me to get what I deserve and handle it in a way that builds our culture rather than break it down. Debt: $0k Cash: $48k IRA/HSA/401k: $51k Other (life insurance, brokerage): ~$2k Total NW right now: $100,803.34 My partner and I are looking to buy a house (we rent) and that is not going well in the current market. We're planning to keep an eye on things this year and hope for more inventory, but buying in 2021 would be ideal. My health, mental and physical, remains a concern. I am seeing improvement on all fronts, but it keeps me up at night. FIRE means nothing if I don't have my health. Some other stats: Late 20s woman in M/LCOL area. FIRE goal: $3.3MM by age 45 at 3.6% WR for annual spend of $120k. This goal is for my partner and myself. Our combined NW is ~$250k right now. I don't budget much. I have tried every method out there and none stuck. My version of budgeting is I have a spreadsheet where all my fixed expenses and variable expenses live. Those total about $2.5 - $3k per month and that includes savings for Roth IRA and a couple hundred bucks for my savings account. I know I spend a lot on food, but in Covid times I'm fine with that. I am happy to spend money on good quality meats and takeout from my favorite places when there is no place to travel. My savings rate is near 25% - 35%. Planning to get into investment properties as a way to make more income (with my partner). ​ I am so proud of using my art degree in the tech world and being able to make a living off of it. I was originally in school for something else, but my mom was planning to go back to school for her dream career before she passed away. She regretted not doing that sooner. When she died I knew I would regret not going to art school, so in a way my whole journey is a reflection of the bold choice she was about to take. I have to thank both my mom and dad for encouraging me to "do something with computers," even in art school. That advice directly led to my career in UX. Writing this was a surprising reflection on how much CPTSD has affected my career over the last several years. It often feels like it's impossible to have a job and handle CPTSD. I look back on this post and see that I can handle a job and manage my mental illness - it is possible! To those of you that made it this far, thank you. The only person in my life I will tell about this milestone is my partner, so it felt natural to share it with you all too. Thanks for reading! submitted by /u/FIREyfemme_milestone [link] [comments]

Something way more risky than 4% ? Posted: 05 Apr 2021 03:54 PM PDT What is everyones thoughts on this old discussion? https://www.reddit.com/r/financialindependence/comments/8a0xl3/why_you_should_consider_a_56_withdrawal_rate/ The main naysayers i saw were people saying 'but I wouldnt be able to get my amazing paying c suite paycheck anymore after 5 years out of work!' but like.. thats not whats needed. Go get a basic paper pusher job that will cover the bills without having leftovers for savings, and ride out the bad years of returns until its safe to start withdrawing again. I don't see a few bad return years as a trigger to get a highpaying job to start contributing to your holdings, I see it as a trigger to stop withdrawing and get a job to cover the bills. And perhaps that is where the difference of lifestyles comes in. Presuming a paid off home, I can easily conceive of a life where I spend like 20k in a year. maybe some people cant imagine less than 80k which does make the job hunt risky. My 20k could be covered working just about anywhere. submitted by /u/TheBreathofFiveSouls [link] [comments]

Are we in danger? Anti-passive indexing arguments in the Atlantic this morning. Posted: 05 Apr 2021 05:11 AM PDT Annie Lowrey published an anti-passive indexing article in the Atlantic today: https://www.theatlantic.com/ideas/archive/2021/04/the-autopilot-economy/618497/ Sure, it certainly contains bad investing advice throughout about price distortions and informational integration. It gets a lot wrong on these fronts, but I found the argument about concentration in voting shares more interesting. Is it a problem that Vanguard/Blackrock/Statestreet have such a high proportion of voting proxy over the largest companies? Is their passive approach to voting (i.e. not voting often) distortionary? Does this represent monopoly power and is it decreasing competition among the world's biggest firms? submitted by /u/johnohyahe [link] [comments]

Weekly FI Monday Milestone thread - April 05, 2021 Posted: 05 Apr 2021 02:00 AM PDT 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. submitted by /u/AutoModerator [link] [comments]

Stock Investing Efficiency Posted: 05 Apr 2021 04:51 PM PDT NOT self promoting. Seeking helpful feedback. I've been working on an investing spreadsheet in Google sheets for months now. Most brokerages and research sights dont provide a good enough interface to track past price performance and fundamental performance of your entire portfolio on one page. I got creative with Google finance functions and whipped up a very powerful sheet to help keep my portfolio strong. I figured I was happy enough with the outcome that other people might find such a tool very useful so I decided to sell it along with other variations on Etsy. None of my friends or family are into investing very much so it's hard to get proper feedback. Any feedback on the features or marketing is appreciated. Thanks! https://www.etsy.com/listing/986008019/ultimate-stock-analyzer submitted by /u/bobtod69 [link] [comments]

401k Traditional vs Roth Debate Posted: 04 Apr 2021 04:14 PM PDT I see a lot of post talking about 401k trad vs roth debate and I have done a decent bit of research. I have been itching to put together a spreadsheet for some time to show numbers and make it easy for someone to get the answer for their current situation. Skip to the end for an easy spreadsheet to input your info. Majority of cases will be traditional or a mix between traditional and roth. Can Skip**\* Just as a reminder effective tax rate is the % of your income you pay to tax, while marginal tax rate is your top tax bracket % you pay. This is US focused. I have listed key drivers below and link to a google sheets doc I made where you can input your current and retirement salary to find the optimal trad/roth allocation. I assumed tax bracket today and in the future are the same and ignore any compounding for simplicity. Since everything is proportional (contribution allocation -> nest egg allocation -> withdrawal allocation) I think this is fine. This does not take into account any current balances. Post Skip**\* First some key drivers are: How much income do I want in retirement How much income do I make now Tax brackets 1) The main idea is you want to estimate how much you will make in retirement - lets say $F. Then you want to withdraw the first $T from taxable which would have a lower effective tax rate, then the next ($F-$T) at roth which will save you from paying taxes on the excess eff tax rate. This proportion of income will directly tie to the proportion of your nest egg. So if you figure out 40% of your income needs to be traditional then 40% of your next egg will be traditional $ and 40% of your contribution should be traditional (again this excludes any current balances). One you figure this out your goal will be to fund your taxable layer based on your situation and have the excess be roth. 2) The next step is to figure out the proportion that is right for your situation. When you contribute traditional $ to your 401k you are saving money at the difference between eff tax rate before and after 401k deduction, and in the future paying the effective tax rate for your % trad proportion. When you contribute to your roth you are paying your top effective tax rate (think marginal but your contribution may spill over into one bracket lower) and saving at your effective rate above the % trad proportion in the future (which could be your marginal tax rate). I know its pretty confusing so here is an example. Lets say you make 75k today and want to retire on 75k in the future. Your base effective tax rate at your current and future salary is 12.65%. Case 1: 100% tradition Your current eff tax rate drops to 6.93%. Your eff savings rate 12.65%-6.93%=5.72% today. Your future tax saving is 0% as you have $0 roth invested. Your total savings today is your effective rate * current salary / contribution amt. In this case 5.72% * 75K / 19500 = 22%. It is not a coincidence this equals your marginal tax rate. A salary of 75K is more than 19500 into tax bracket so your current savings rate equals the marginal tax rate. You can then add current and future savings for a total savings of 22%. I ignore the "traditional allows me to invest in other funds" and "maxing means roth is worth more for your money". (I would think that roth IRA would be maxed out on the side regardless, so any excess savings from trad would have additional capital gains tax vs contributing more to roth - but again that is not included in my analysis) Case 2: 100% roth Your current eff tax rate remains at 12.65%. You are saving 0% taxes today as all your contributions are post tax. Your future tax saving is the full 12.65% you would have paid if your income was taxable, as your income is fully non taxable. 12.65% - 0% = 12.65%. You add your current and future tax savings of 0 + 12.65% = 12.65% total savings. Case 3: 50% traditional and 50% roth Your current eff tax rate is now 9.79%. Your eff savings rate is 12.65%-9.79%=2.86%. Your total current savings is 2.86% * 75k / 19500 = 11%. Your future eff tax rate is 3.73% as 50% of your income is not taxable. Your future savings is 12.65% - 3.73% = 8.92%. So your total savings is current + future savings or 11% + 8.92% = 19.92%. Based on these 3 cases your highest overall savings rate is with case 1, 100% traditional. However this is not always the case. You would need to spec out all the different contribution amounts based on your salary today and your future retirement salary which proportion is right for you. The good think for you is I have made a spreadsheet that does just that - looks at tax savings rates starting with 100% traditional and grades down to 0% traditional and 100% roth in steps of 5. I threw this together rather quickly. If you see anything that seems off please let me know! One additional thing to mention is if there are multiple % traditional proportions with the same savings rate it chooses the highest % traditional. This is because all things equal more trad $ = higher paycheck and more opportunity for additional savings. https://docs.google.com/spreadsheets/d/1yjCImi9LNxuUW0OhPuz-saUPAurCVi_9jZc-I4m-wEo/edit?usp=sharing submitted by /u/sidenotepf [link] [comments]

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