Financial Independence Daily FI discussion thread - Wednesday, May 05, 2021 |
- Daily FI discussion thread - Wednesday, May 05, 2021
- An Average Income Joe Story: Went from net worth of -25k to 650k with a salary range of 12k - 90k. It's not special, but it's an example from "the other side"
- What am I doing wrong? Everyone here makes like $150k+ per year. Meanwhile I bust my ass for $80k, and others earn less than that. What's the deal?
- Weekly Self-Promotion Thread - May 05, 2021
- Few tips for people who DONT make 150K a year and are pulling a REGULAR salary like me (America)
| Daily FI discussion thread - Wednesday, May 05, 2021 Posted: 05 May 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. [link] [comments]  |
| Posted: 05 May 2021 12:01 PM PDT Early Married Life: 2002 - 2005
My wife and I got married young. Real young. It was after our second year in college, and we had just turned 20. I had one year to go (trying to save money before grad school). She had three to go (planned five year program). It was actually cheaper to get married than live apart because we could live in married housing on our campus in a MCOL city in the Midwest. Our apartment was $500 a month, utilities included. We lived the first year off 8k in savings from her summer jobs throughout high school as a nanny, and from my summer job moving furniture and random childhood businesses like selling pumpkins and Christmas trees from a plot on my grandparent's farm. She also worked as a tutor for a rich family, and I worked in "residential treatment" for troubled kids. She made $25/hour for a few hours a week. I made $9.70/hour for a ton of hours a week. Our savings were down to $4k by the time I graduated after that first year. We were very frugal, but to be honest, we didn't realize how poor we were until years later. We could have qualified for food stamps, and we had no idea. After I could start working full time, we cleared 20k a year for the next two years. We finished college with about 30k in student loans as a couple. I want to emphasize that life wasn't horrible. We were very happy. We just made our meals at home, didn't really buy anything, and lived as simply as possible. I never felt like I was wanting for anything that I truly needed. It helped that we were able to travel a few times through the generosity of my wife's parents and the overbooking policies of American Airlines. Long story short: We went to Europe three times because her family lives there. They paid for some of our tickets as Christmas/birthday presents, and it was a stretch for them. They're not at all rich either, but we wouldn't have been able to see them otherwise. The whole trip cost us virtually nothing because we stayed with family while we were there. We also voluntarily got bumped on several flights, and ended up with free tickets back to Europe and vouchers that we used to get free tickets to Costa Rica during the rainy season. Grad School, Part 1: 2005 - 2009
My wife got a job as a special education teacher in a VHCOL city. She made 50k a year, and I coached 8th grade basketball for $800 and started grad school. I had some scholarships but also accumulated a small new loan. We also paid down some of my wife's loans, so we came out about even. Our run-down, one-bedroom apartment was $1200 a month. I know it doesn't sound so pricey now, but it felt pretty darn expensive at the time. We had to move out the next year because it was condemned for mold that appeared after we moved in. The next place was better, but it was $1350. We lived in that area for two years, but I transferred grad schools to a MCOL city. My wife got a new teaching job making 42k, and our new rent was $700 a month for a funky two-bedroom with an upstairs kitchen and no heat in the downstairs living room. We were cold A LOT. I made $8k a year teaching three classes as a TA, but I also got free tuition. You'll see those side benefits start to emerge as an important theme from here on out. Anyway, we started aggressively paying off student loans and using her 3% employer match to save for retirement. This was right as the stock market started to crater in 2007/8. We had more money during this period, but we still lived the same lifestyle as before. We continued to travel, but it was always to visit family so it continued to be doable. Because my wife's family lives in a hub in Europe, we took car trips to over 20 countries while we were visiting in the summers. In total, we would usually spend about three weeks at a time visiting her family, and so it was a great experience. Obviously, this was just a stroke of luck, and we would have taken road trips here in the U.S. for vacations instead. That's pretty much what we do now because her parents are in the U.S. today. Grad School Part 2: 2009 - 2013
At this point, I had gotten a master's degree, and I'd been accepted to a PhD program in a MCOL city in the Southwest. My wife got a new job down there making $45k a year, and I made $17k as a research assistant. I also got free tuition again as part of the compensation. We bought a 1200 sq ft 3 bed, 2 bath house in 2009 for $115k, which was a lot less than our budget. We had been aggressively paying off our student loans, and paid them off in early 2010. At that point, we felt pretty much rich. We still continued to live frugally, but we splurged a little more often on little things like going to the movies maybe once a month. Confession: Half the time, we went to a dollar theater that showed old movies. I also did things like bought a lawn mower without a motor (the old "reel" style) for $50 because it was a good workout, and I took the bus to work/school. Oh, I just realized that I forgot to mention that we have always only had one car. We've never lived in transit friendly cities, but we've tried to locate ourselves strategically so I could always walk, ride a bike, or take a bus to work/school. I left grad school with a second master's degree and a PhD. We were making a combined $65k at the time, and we sold our house for $120k in 2013. By this point, we also had a baby and another one on the way soon after. I had a job offer for a professor position at a small school in a HCOL area on the West Coast for $57k. The upside was that my employer offered a housing progam. We bought a new 3/3 condo for $235k, which was half the assessed value. The only catch is that we have to sell it back at the same price (adjusted for inflation but not adjusted to market housing values). We put 50k down (a mix of savings and equity we built up in the old house), and we moved in. Present Day: 2013 - 2021
I got tenure and several promotions, and I worked my way up the salary step ladder. We're still frugal, but we enjoy life a lot. There are a lot of free and low cost outdoor things to do in our city, and we have relatively inexpensive hobbies. Our kids love to read and play with their friends outside, so we actually don't spend much on their entertainment either. Don't get me wrong, we'll do stuff like get an annual pass to the local zoo or amusement park, but it ends up being super do-able in the long run if we're careful. We also travel by car to visit family every summer, and they're spread across the country. We camp or do AirBnB if we want to splurge, and so we often only pay the cost of gas. My kids have been to something like 30 states and a ton of National Parks, and it's been really great to see everything again through their eyes. I'm now making $85k base salary, and I can make $7k for each additional class I pick up. The job is actually a lot more work than people sometimes think, so I usually only pick up one extra class a year. I just got the raise to $85K, so the most I've ever cleared is $90k. Our house payment was only $1500 a month, but we saved so aggressively during this period that we paid it off a couple years ago. I thought long and hard about investing the money instead, but our housing situation is a bit unique because of the buyback program. I think of my housing investment as part of my overall portfolio, and it's a guaranteed ~5% return (2-3% every year for inflation + 3% not paid to the bank for interest). As a result, I invest the rest of our retirement much more aggressively (just SP500 index funds and no bonds or anything like that). It's a mix of ROTH IRA and 403b (401k for non-profits). I take advantage of my employer match in my 403b, which is pretty good (3% auto + 100% match of up to 5%, for a total of 13%). My wife is in grad school now to advance her teaching credentialing, and we're paying for it in cash. We have two kids, we're not quite 40 yet, and we're well on our way to FIRE. If I stay with my current university, my kids will get free tuition scholarships for all four years, so that's a huge benefit. I work really hard, but the flip side is that there's a ton of autonomy and flexibility. I plan to retire when my youngest is done with college, which should be in about 15 years. My wife will likely return to the classroom to teach again in the next few years, which will bring our combined to maybe $150k for our last decade of work. Overall, we've both worked hard, but it's a pretty simple life. We're frugal, but we enjoy our life a lot. I could make A LOT more if I moved into industry, but I like the freedom of my job, and the side benefits are important (free tuition for my kids, reduced housing costs, lots of time off if I want it). The key for us is that we're both on the same page, and we're in it for the long haul. It's not complicated, but it's not necessarily easy. Anybody can do it in principle. It's the sustained focus that makes it hard. It all makes sense when you look at it in reverse, but getting there can feel like a long journey. [link] [comments]  |
| Posted: 04 May 2021 07:19 PM PDT How do I get one of these $150k per year jobs? I've been busting my ass for years for way less and feel lucky to make $80k. But then I come here and everyone talks about earning hundreds of thousands per year like it's no big deal. I'm 33/M with a master's degree, veteran. Live in MCOL USA. What am I doing wrong? [link] [comments]  |
| Weekly Self-Promotion Thread - May 05, 2021 Posted: 05 May 2021 02:00 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
| Few tips for people who DONT make 150K a year and are pulling a REGULAR salary like me (America) Posted: 05 May 2021 12:25 AM PDT While I am young (21), I have MANY friends who are already financially independent and FIRE'd at 30 - 35. I am living the way they did and it is GLORIOUS. It made me truly realize how much of a "Consumer culture" and not a "Responsible culture" we are as average Americans. Here's what I've learned about being financially independent while on a 50K - 80K household budget. For an individual budget, this would be making around $15 an hour or above. The KEY to all of it is:
I'll explain each one:
Now for those of you making $30,000 - 40,000 as a household. that's rough. I guess y'all already do what I explain above out of necessity instead of choice. Your best bet is to gain more income in however way you can. Grind the fuck out of life and don't let your head go below the financial waters. But for everyone else, if you're pulling $50,000 or more a year as a household, try out some of the tips below. Because if you consume less, you have more capital to invest and make your real dreams come true! [link] [comments]  |
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