Financial Independence Daily FI discussion thread - Thursday, June 10, 2021 |
- Daily FI discussion thread - Thursday, June 10, 2021
- Getting the Goalpost to Stop Moving by Morgan Housel
- Vicki Robin on FIRE as beginning, and search for meaning in life
- Mortgage as you approach FI. We went the other direction, 7/1 ARM
- 100k at 24 - my journey
- CMV: pursuing (very)lean fire is the equivalent of living like the average American unable to cover 800$ emergency car repairs.
- [32m/32f] My wife and I cross the 1.6M NW a couple weeks ago! Our journey
- Forced to retire slightly earlier than I was expecting
| Daily FI discussion thread - Thursday, June 10, 2021 Posted: 10 Jun 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]  |
| Getting the Goalpost to Stop Moving by Morgan Housel Posted: 10 Jun 2021 08:02 AM PDT
https://www.collaborativefund.com/blog/goalpost/ I just finished reading this blog post by Morgan Housel. It's a great article but the section I quoted above felt particularly insightful. It's easy to see so many posts here or on r/fatFIRE about people with millions of dollars and to think "you're nobody" as Kremen said above. I'm posting this to remind myself and help others remind themselves how lucky we are to be on this journey to FI and to get there some day. [link] [comments]  |
| Vicki Robin on FIRE as beginning, and search for meaning in life Posted: 10 Jun 2021 12:08 PM PDT Today I stumbled upon a video of Vicki Robin talking about the journey to FIRE and the next steps. It inspired me and made me reflect on my journey and life, so I thought that you would enjoy it too - YouTube [13:53]. In case you don't know Vicki Robin, she is one of authors of "Your Money or Your Life". This book is about FIRE and simple living, but it was written in 1992, when FIRE wasn't even called FIRE yet. As you can imagine, Vicki Robin has a lot to share after being in this movement for so long (and, as some people believe, even starting it in the first place). Here are my thoughts about the video: I like her perspective that FIRE is just a tool for something bigger. Indeed, it is very easy to become overly focused on reaching FIRE, but this won't make me happy on its own. She observes that we want to be free by reaching FIRE, but not having any boundaries and limitations can be hard - you will have to decide what to do with this freedom. This can even cause an existential crisis, but improving the world around you looks like a natural next step. I also like her analogy of FIRE and waking up. Society can pull us in directions we don't want and FIRE is our way to notice this and start gaining control of our lives. This requires being efficient with the money, which forces us to reflect what we like, what makes us happy and who we are. Which reflections did she inspire in you? [link] [comments]  |
| Mortgage as you approach FI. We went the other direction, 7/1 ARM Posted: 10 Jun 2021 07:41 AM PDT I feel that everyone is in a race to pay off their house before FI/retiring which isnt a bad idea of course. But what if its not where you will be retiring? Sure spreading out payments cost more in interest but maybe other paths make more sense, to lower payment and free up cash for other things? Next year I turn 55 and will be "retiring". Kinda of like a barista fire, but I have a side hobby that is generating enough income that I think with more hours avail to it, can turn it into a nice income. EDIT: We have over a mill for retirement, and at 55 can pull from 401k without penalty (and SS in 10 years will be almost 70k for both of us). So I dont expect the side thing to cover all my bills or salary, I mentioned barista FIRE, which is a type of early retirement where $$ is both retirement and job. /EditEnd. We were only 6 yrs in on a 30 yr mortgage. Never really intended to pay it off over time. Either sell early or pay off with cash. Anyway since we were at 4.375 and rates are low we needed to do something. But the awesome property we have is very large and has a bunch of things to maintain. I cant see us keeping the property up in our mid-60s and older. So my wife and I made an agreement that were were going to enjoy the place for 5 more years and put up for sale. From there? We'll probably stay in same area a few more years and get an apartment before we decide where to really retire to (depends on how successful the side thing becomes) So going with the 7/1 just dropped our monthly payment over $300 a month. Thats $300 more I can dump into retirement, or for next year when my salary will drop.. it's $300 I dont need to come up with as I build up my side thing. yes, the home sales are hot right now and we did consider selling now. But we have a big dog living with us and other factors.. so we're sitting back for a few years. Mostly just sharing our logic, curious of other's opinions or if anyone else has done a similar plan. While I have an easily confirmed job for 2021, I will be getting a new car in December a month before I quit. An inexpensive model but that will be solid for many years. Taking advantage of the W2 job while i can. EDIT: Grammar [link] [comments]  |
| Posted: 10 Jun 2021 04:55 PM PDT First, I should start by saying that I graduated with no student debt. I recognize that this is a huge privilege and not the case for many. While my parents did contribute to my education, I also worked as an RA and had other scholarships that covered a majority of my tuition. Without my parents support though and the ability to live rent free at home, I definitely would not have been able to hit this milestone today. It hasn't been perfect, but I'm extremely lucky to have what I do. Assets: 42k - Retirement Accounts 40k - Investment Account 2k - Company Stock Options 8k - Checking 10k - Car 2019 - ~10k NW - I graduated from a good engineering school with no debt, some money saved from 3 internships and a side hustle. At this point, I had some small contributions to a Roth IRA and rest in cash. Soon after graduating, I started an engineering job that paid 70k. I lived at home through the end of the year to save money and had little expenses besides commuting to work by public transit. 2020 - ~50k NW - Continued working and trying to save diligently, started investing in my own stock picks, adding to retirement accounts, having good success. In March I moved into a large city and my expenses increased (1300/mo rent), bought a modest, used car in cash. After COVID hit, we were able to get out of our lease in June and I moved back in with parents at which point I had no rent. Shortly after COVID hit, I was partially furloughed from my job and began collecting unemployment for the time I was off. In August I was laid off entirely and started collecting unemployment full time on top of a severance package. Out of boredom and stupidity, I started making risky options plays and in one day lost half the value of my account in a single trade (-12k) 2021 - 100k NW - Continued job hunting, collecting unemployment, and trading. I received a large tax refund because of my unemployment status. I brought the value of my account back up 100% and recouped my losses. I was invested heavily in a stock that I saw as a value play, over the last week r/WallStreetBets caught on to said stock by chance and my NW went up 10k in one day, at which point I exited the position to not be greedy and counted myself lucky. In March I landed an incredible job (70k and uncapped bonus, stock options) and began saving heavily again. In the next few weeks I move out and get back to an independent life. Although I am frugal, during this time I've been able to pursue hobbies and traveled a LOT (although I always stayed with friends and did it cheap!) It's truly been a ride and I'm so thankful for what I've learned and gained in the process. [link] [comments]  |
| Posted: 10 Jun 2021 01:27 PM PDT This may get downvoted to oblivion but... I get the temptation to quit early and appreciate the frugal/sustainability mindset. However especially for people who don't start making 6 figs straight out of school or were fortunate to get family help I wonder if the pursuit of low nw lean fire leaves too little margin for unforeseen changes. The biggest one in my mind is healthcare but could really be anything. [link] [comments]  |
| [32m/32f] My wife and I cross the 1.6M NW a couple weeks ago! Our journey Posted: 09 Jun 2021 03:04 PM PDT The TLDR is that my wife and I both work really hard, made smart decisions to change our careers that paid off, and have been good about living below our means the whole time. We don't expect our good fortune to last more than a few years - so we're saving aggressively now. I come from a pretty modest background. I grew up in the midwest suburbs. Neither of my parents went to college and my mom stayed home to raise kids. Luckily my parents were pretty frugal, and I think this taught me a lot about saving early. Wife has a similar upbringing. We both attended college. 5 years ago, we decided we needed to change our careers in order to secure our financial futures. We didn't go back to school — we just self-studied on nights and weekends for about a year before we made the jump. I wanted to write this post to let others know about our journey and let them know that you can have a modest upbringing and a modest education and still do well. Net Worth: 1.3m + 300k home equity FIRE Goal:
Income:
Savings Rate:
Expenses:
Investments:
My Salary History (as best I can remember) I'm not including my equity here, just base salary.
My advice:
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| Forced to retire slightly earlier than I was expecting Posted: 08 Jun 2021 03:47 AM PDT I'll confess that I'm struggling to pin down how I feel right now, so apologies for any logical inconsistencies but wanted to share. I had a fairly standard FI plan, intended to see me retire at 40, in roughly 10 years time. Probably closer to the LeanFIRE end of things, and my expectations aren't very extravagant. My career has gone very well so far - with potential down the line for big director salaries, although it's not one that throws 6 figures at juniors. It was kinda weird then to find myself suddenly unable to work around fall 2020. I've been back and forth for all sorts of tests, not going into work at all, and they've now come to the conclusion that I certainly shouldn't attempt work in the next year, and there's a very strong possibility that I won't be able to work full-time ever again (including desk work). That was a surreal experience. Further, one of the best things I can do is take things slowly and take lots of time out. I won't go into the medical side of things specifically, because it's a rabbit hole, but I am getting some of the best medical advice and I'm going to follow their recommendations as best I can. In terms of me, it has obviously been a shock, but therapy has helped. FIRE as a community can create its own challenges. For me, it has really developed my desire to constantly improve, iterate and better my situation. So when I'm confronted with a problem that actually sets me back on many of those things, and actually the advice is not to strive, it's really tough. Even today I'm sitting at home thinking "I should get a side hustle", when actually I'm supposed to be resting to give me a better shot of not deteriorating. Coming to terms with not being the best or having to settle for good enough is not easy for me. In terms of FI, it feels like a real curveball. The good is that due to corporate and personal insurance etc, I still get paid something. I'm also not at risk of losing healthcare. The formulas are complicated but in high-level terms, over the next few years the income will drop to a floor of approx $40k. So, party time? I've just retired with the equivalent of a $1m pot? Not necessarily. Because if I ever recover enough to work full-time, that money goes away. The only way I can think about it right now is that I have to keep trying to grow my assets and hit a leanfire target (but obviously that's hard on $40k). After all, even if I recover sufficiently, going straight back into my old job may well be a) impossible and b) medically risky. It's a very weird place to be. One thing is for sure, being out of work and spending my wife's earnings is not something I could mentally square away. The Good
The Bad
The Ugly
Overall, I'm doing OK. And because of FIRE, I'm doing better than 99% of people who have a conversation like that at my age. But the uncertainty really sucks. In one worst case scenario, I never go back to work but I've got an income for the next 35 years. In another, I recover in a few years but can only do low stress work and have to dig into BaristaFIRE options. For all the projections, estimates and calculations I've done - this is one where I can't even begin to guess. [link] [comments]  |
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