Financial Independence Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice - May 10, 2021 |
- Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice - May 10, 2021
- Daily FI discussion thread - Monday, May 10, 2021
- Almost overnight I own over a million dollars in real estate. I am terrified.
- Do you need a wealth manager? - From the wealth manager's perspective
- Weekly FI Monday Milestone thread - May 10, 2021
| Posted: 10 May 2021 02:01 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? [link] [comments]  |
| Daily FI discussion thread - Monday, May 10, 2021 Posted: 10 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]  |
| Almost overnight I own over a million dollars in real estate. I am terrified. Posted: 10 May 2021 07:47 AM PDT I happen to live in a vacation destination and have an extensive family background in vacation real estate, so from the beginning real estate was my plan for FIRE. Right out of grad school, I lived with my parents for 2 years, saved like crazy, and bought my first property in 2018. I bought that property for $362k. First year (2018) it grossed 35k. With a lot of DIY I have made some good improvements & rental incomes have steadily increased. This summer it will gross over 60k. It is cash-flowing but I put 100% of profits (plus extra from my own income) into improvements & paying down the mortgage aggressively. Vacation rental rule of thumb in this market is that once mortgage is paid off, you can expect to pocket about 50% of gross after all expenses. My goal is to have that mortgage paid off within 10 years. This spring I had saved another down payment and living with my parents was getting old, so I purchased a second property with the intention to live in it basically forever. (my career is remote, I can live anywhere and I like the beach, what can I say). I paid 397k for it in March 2021. Been paying minimums on that mortgage because it's such a low interest rate. So my FIRE plan was simple: keep working & saving aggressively, buy rental properties as I save up more down payments, pay them off from rental income and build a portfolio to replace my employment income, manage all of it myself to cut costs, and then eventually hopefully (at least partially) retire by 45. Hope for some steady appreciation in property value to supplement net worth. But this spring something insane happened, and keeps happening in vacation real estate markets all over. The market went absolutely and totally bonkers. I am not kidding. My mother has been the leading real estate agent in this county for over a decade and her mind is blown by what is happening. She knows this market better than anybody on the planet, so when I talk about valuations know that I'm getting my info from her. My house that I bought for 397k? It was worth 50k more than that on the day of close. I could get 500k for it today and probably start a bidding war. The rental is worth well over 600k, nothing like it has come on the market in the last week so it's hard to say. There is no inventory and properties have 20+ offers the day they go on the market. Then sell for 10-20% over asking. Nothing appraises but somebody is there offering cash so they sell anyways. Prices are going PARABOLIC and it's terrifying. Then last week a certain computer company announced that they are building a huge new campus in the nearest large city, and I know that is only fuel on the fire. Clearly this is a bubble. My instinct is to sit tight, keep paying down the mortgages and stick to the plan. But is that really the best use of this new capital that's fallen into my lap? If I sell something I pay capital gains on either property. And then what do I do with that money? The stock market is bonkers too right now. I have to pay bubble prices if I try to buy something else locally. And buying an investment property elsewhere defeats the purpose of my "live local to rental properties so I can manage them myself and save $" plan. Plus vacation markets all over are going nuts like this. But at the same time if somebody handed me a check for $500k right now, I don't know that I'd go buy more real estate, so is that a sign that I should be pulling some cash out? Anybody have advice? If my goal is retire by 45, do I keep my head down or try to capitalize on this windfall? tldr: crazy market tripled my net worth overnight, not sure what is the best choice in terms of FIRE Stats: (not as amazing as some here, but working on it slow and steady) 31, 90k salary, 100k in retirement accounts, ~80k in savings accounts (this is mostly business capital for planned renovations, I flipped a condo and made a bit of cash to put into the rental property & primary home this winter) I max my IRA and my 401k gets 5% + 4% match. mortgage 1: owe $250k @ 4.5%, worth 600k+ mortgage 2: owe $310k @ 2.75%, worth 500k+ otherwise debt free. [link] [comments]  |
| Do you need a wealth manager? - From the wealth manager's perspective Posted: 10 May 2021 05:47 AM PDT I have been asked this question a lot in the AMA's I have posted in r/fatFIRE. I wanted to expand on the question a bit below and post here as well. Let me know if you want me to expand on anything else! Thanks! - mep42 Prior AMA's: AMA: I am a wealth advisor to high net worth individuals and institutions ($5M-$1B+) Does someone who wants to achieve fatFIRE need a wealth manager? The simple answer is no. The long answer is maybe. As a member of the fatFIRE community, you have already taken the reins on managing your wealth and planning for the future. For some, the idea of hiring a wealth manager seems excessive, too expensive, and simply not needed. For others, a wealth manager can bring assistance in the areas that you might not be as familiar with or simply give you a second set of eyes on your plans. Achieving fatFIRE can be a very straight forward process, but each person is different. Below, I have highlighted offerings that a wealth manager might offer and additional comments on what to look out for.
a. Financial Goals i. Risk + Return Expectations ii. Accounts Structures - Trust / Estate iii. Philanthropic Goals iv. Future Generations b. Personal Goals i. Your vision of wealth ii. Confidentiality iii. Comfort
a. What is your current risk profile? i. What does your asset allocation look like today? ii. Are you taking to much risk or not enough? b. What are your liquidity needs, how does your income effect asset allocation decisions? c. Tax situation d. What are your assets, liabilities, and current financial holdings?
a. Goal Setting b. Liquidity management to maintain your lifestyle. c. Risk Management – Will you hit your financial goals without taking excessive risk? d. Portfolio Construction + Implementation i. Implementation costs for the portfolio ii. Investment vehicles (Single name, ETF, MF) – internal fund fees iii. Best practice for asset class implantation ex. Bond funds or individual bonds e. Rebalancing i. Active management provides the ability to keep portfolio risk + return expectations in line to meet your goals. f. Tax Management i. Income + Estate tax planning ii. Tax-efficient + tax advantaged vehicles iii. Gain deferrals, tax-lot management, wash-sale avoidance g. Private Markets (Equity, Debt, Real Estate, etc) Above is the core attributes of what a wealth manager can offer their client. There will be differences and similarities and all these items can be different depending on the managers expertise. Regardless of what path you chose to take on your fatFIRE journey, there are a few things everyone should ask a financial advisor.
a. Review their form ADV from the SEC. https://adviserinfo.sec.gov/ There are a plethora of reasons someone choses to higher and advisor, ultimately you need to evaluate if it makes sense for yourself. At the end of the day, the biggest reason most choice to hire a financial advisor is peace of mind. The client knows that there a layer of protection between their portfolio and markets, their own emotion driven decisions, and an experienced team focused on meeting their goals. [link] [comments]  |
| Weekly FI Monday Milestone thread - May 10, 2021 Posted: 10 May 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. [link] [comments]  |
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