Financial Independence Daily FI discussion thread - Thursday, May 06, 2021 |
- Daily FI discussion thread - Thursday, May 06, 2021
- FIRE 2020 - 2021 Update (+Freelance)
- Different Perspective on FIRE
- How long? First 50% vs Second 50%
- Anyone else feel vaguely guilty when not working on your career?
- Could you be looking to FIRE because you are a workaholic? Take this test to find out!
| Daily FI discussion thread - Thursday, May 06, 2021 Posted: 06 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]  |
| FIRE 2020 - 2021 Update (+Freelance) Posted: 06 May 2021 03:01 PM PDT FIRE 2020 - 2021 UpdateI posted about my 2012 - 2019 journey towards FIRE on Nov 1, 2019. I remember that date specifically because I was definitely coming down from substances from the night before...the fact that I decided to write a tome on Reddit about my finances is the weirdest part of the whole thing, haha. ... In 2020, for obvious reasons, my life changed drastically. Our entire company pivoted to working from home. I am also immunocompromised so I have literally not seen any friends in person since March 2020, and am so excited to see my friends for Memorial Day now that we've all gotten our vaccinations. I have a bad habit of shopping when I'm bored, particularly sneakers and clothing, so I knew that I was going to get into financial trouble if I didn't do something about that. What I ended up doing was starting a side-business doing product consulting (design and development) with my best friend, all remotely. We focus on product thinking and product design, and for one project hired some of our friends who code to do web and backend development. I recently sat down to tally up everything for tax season, and here are the results: In Nov 2019, my net worth was at $294,527.88, and ended 2019 at $329,766.42. I started my first freelance project with my best friend (grad student who does product management for our projects) in April 2020, charging $100/hr. We helped a start-up design and develop their initial go-to-market app, with the help of some of our friends who do mobile and backend development. I did the design. That project is currently still ongoing, with iterations and a web component to the initial product. We started our second freelance project at the end of April, with a product in a completely different space. We increased our rate to $120/hr, where it's stayed for all clients except for our initial client. End of March 2020, I was at $327,829.06. By the end of April 2020, I was at $340,758.89. We picked up a third client as our second client project was starting to wrap up in September 2020. By the end of September 2020, I had a net worth of $542,186.59. By this point, I'd realized that I could save 100% of my full-time income and just use freelancing income as spending money and money for rent / utilities / groceries, etc. ... By the end of December 2020, I'd grossed $94,304.17 from freelancing, and had a total net worth of $554,245.43. The best part about all this is that my business partner made the most money he's ever made in his career, and was able to get himself out of the red. He's really frugal, but had a ton of student debt. He's told me time and again that this has helped him so much mentally with his debt and he feels so much lighter and ready to start his own savings journey. Fast forward to 2021, we're still working with three of the same clients, and off-boarding one of them in the next few months. That client is super happy with our work and has already mentioned people they want to introduce us to after we wrap up! As of end of April 2020, I'm at $677,555.50 net worth. Some things I learned:- Word-of-mouth is the best way to get clients. There's built in trust from both sides when introduced via a mutual party, and these clients are more likely to be trustworthy, good to work with, and committed to a project.
- Never work on freelance work during your regular 9-5. It's tempting to double dip, especially working from home, but this is the number one thing I absolutely refuse to do. I care a lot about my career, and I know the second I let those boundaries slide, shit will get messy and I'll likely let my full-time work slip. I do work on Saturdays (great excuse to spend all day hanging out with my best friend!) - Choose clients wisely. Align with your business partners on how you pick and choose clients. It's important not to take on projects that make you feel uncomfortable or aren't exciting to you. Your attitude and interest matters; never take a client on just because you want to get paid. You'll be reluctant to do the work, which will show in the work. If it's morally compromising work for any reason, stay far far far away. We were offered a job for a product that felt like it made $$$ by leveraging oppressive labor laws, which is against our personal morals, so we turned it down. - Make an off-boarding plan. This is probably more specific to our line of product work more so than freelancing in general, but we are upfront about what we're trying to provide to our clients. We're here to help them quickly spin up an initial product, but we are not a replacement for an in-house product team. They should be using some of the time spent working with us to hire their in-house team, which we can then onboard to our process and design system before we conclude our partnership. - Overpay your quarterly self-employment estimated taxes. Pretty simple tip. It's better to overpay than to get sticker shock during tax season. - Don't push yourself to burn-out.
- Hire experts for stuff you don't know. Another simple tip. We hired an accountant to help us suss out taxes this tax season because we knew it would be complicated. Doing it ourselves would have not been worth the time and stress, and we'd probably have fucked it up. Paperwork sucks but it needs to be done correctly. Hiring experts is worth the money, but properly research them before you reach out to make sure they're legit and familiar with the types of asks you'll have. Just StatsFeb 2012 - $92.91 Hopefully this is inspirational to someone who is on the fence about starting their own company! I'd also love to hear tips from folks in the field who have been doing this for way longer than I have. Thanks for reading! [link] [comments]  |
| Posted: 05 May 2021 10:25 PM PDT This probably won't be a very popular post, but I feel as if it should be mentioned anyway. I haven't been posting/lurking in any of the FIRE subs lately because I've been busy battling cancer for the majority of the year. I'm only in my 40's, but like my spouse has said, nobody ever expects to get cancer, so it's a real shock to everyone who faces it. The reason I'm putting this out there, is that it's crazy how your perspective on FIRE changes when you are fighting for your life. Don't get me wrong, I still hope to successfully FIRE after a few more years. But I realized that the old cliche which goes something like, "if you don't have your health, then you don't have anything" certainly rings true. Nobody is invincible. In a scenario like this, money and financial plans become much less meaningful in life. Maybe my Mom and Dad were onto something back in the day when they used to say that your health and happiness is more important than money. This was my first point. My second point, is that we shouldn't forget to budget for healthcare emergencies in our FIRE plans! Best of luck, and take care. [link] [comments]  |
| How long? First 50% vs Second 50% Posted: 06 May 2021 03:26 PM PDT For those of you that have or are close to hitting your FI number, how long did the first 50% take vs. the second 50% ? I've seen many people mention how much faster the 2nd 50% was. I finally hit 1/3 my FI number. It took me 11 years of saving 25% of my gross salary. This was before I learned about FIRE so I didn't track saving as a percentage of net. I just know that I was going to want to 1) take some time off to travel and 2) retire early. Six months ago I changed jobs, got a raise, and moved from a HCOL city to a LCOL am now saving 60% gross and 75% net. I'm hoping to hit 50% of my FI number by the end of next year. That's 12 1/2 years since I started. Logically, I know that my savings rate increase and having a large investment balance will significantly affect when I hit FIRE but it feels like this is taking forever. I could really stand to hear a few success stories, especially about how much faster the second half of your accumulation phase was. [link] [comments]  |
| Anyone else feel vaguely guilty when not working on your career? Posted: 06 May 2021 03:39 PM PDT Does anyone else feel anxious or guilty when they are not working towards their career? I have a lot of trouble enjoying my hobbies in my free time because I have this vague sense that I should be doing something more significant with my time. This started in college, I essentially lost the ability to get lost in video games and became very focused on school / work. Nowadays I have a very stable and lucrative career, but I just can't relax and enjoy in my free time. Figured maybe some other FIRE folks could relate. EDIT: Fixing spacing [link] [comments]  |
| Could you be looking to FIRE because you are a workaholic? Take this test to find out! Posted: 06 May 2021 09:31 AM PDT I was listening to the radio and there was a discussion about workaholics, and the discussion reminded me a lot of the discussions on this forum. The segment also referred to a "Work Addiction Risk Test" (WART) which can help you identify if you have a work addiction. I took this test and scored 62. The results break down as follows:
It was eye opening for me to learn that I have mild work addiction, and I'm definitely going to make some changes and see if that changes my outlook on the RE aspects of FIRE. Additionally, I am in a job where work addiction seems to be prevalent and we are seeing an impact on staff turnover. Senior leadership is noticing the impact so I hope they take this seriously... But regardless of what they do, I am definitely going to make some personal changes starting with no checking emails & iPhone after I sign off for the day. If you take the test, please share your score and let me know if work addiction has played into your FIRE goals -- and what, if anything, you plan to do about it. [link] [comments]  |
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