Financial Independence Daily FI discussion thread - Friday, July 09, 2021 |
- Daily FI discussion thread - Friday, July 09, 2021
- A short story of a FIRE Journey from Eastern Europe
- My half year 2021 financial update after over 10 years post FIRE
- Interesting article about Vanguard research on 4% withdrawal for FIRE
- "Lying Flat" - China's version of LeanFIRE
- Appreciation post to the community- Took a 65k pay cut today thanks to FI - 31/28 550k NW - Teachers
- Weekly FI Frugal Friday thread - July 09, 2021
| Daily FI discussion thread - Friday, July 09, 2021 Posted: 09 Jul 2021 02:02 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]  |
| A short story of a FIRE Journey from Eastern Europe Posted: 09 Jul 2021 08:03 AM PDT Everyone says that the first 100k are the most important and some share their experience of overcoming this milestone. Reading these stories, I also thought about how I would do it, and finally, in July 2021, me and my wife a happy to celebrate the fact that our net worth exceeded 100k. I have decided to write and share with you to congratulate myself again and hopefully inspire someone just like you inspire me. I read stories from those who earn 200-300-400k per year while being shocked at the INCREDIBILITY of these figures but today there will be a story from an Eastern Europe guy, with some modest earnings. Planned to do it yesterday, as my first ever post here, but had not enough karma)) I was born in Moldova, the poorest country in Europe. Statistics show that the average salary in Moldova for 2021 is $480/month, $5760 per year (before taxes). It makes me happy that I was able to break out of the numbers of these statistics, even if I had to wander around the world in search of a better life. Another reason why this achievement pleases me is due to the fact that my family never had much money, no one gave me pocket money(since we didn't have any extra), and in our best times, my parents had savings of $500-1000, but most of the time there were no savings at all. We lived from paycheck to paycheck. It happened that in the last weeks of months, parents borrowed so that we could make it till the salary day. I am very grateful to my parents for raising me and my brother. We did not starve, we were dressed, but now I understand that they do not know how to handle money at all. In this matter, only my grandmother deserves great respect from me. With incredible hard work, together with my grandfather, they managed to raise children, build a house with their own hands, help their children and grandchildren up to this day, somewhat of heroes in my eyes, but let's get back to my story. Back in 2013, Having received a scholarship and left to study at a university in another country, with approximately $ 300-400 savings. I have been very careful with money since childhood, practicing a very frugal lifestyle. Using free sources from the Internet, I was able to master the profession of an interface designer and began to earn extra money in my free time during my studies (I haven't worked for a day in my specialty, realizing that I did not like what I was studying). Trying to spend less than I earned, investing in different ideas in an attempt to increase my savings, and working in my free time during that period (2013-2017), I managed to gather about 15-16k. I remember opening a bank account(hoping to earn some %) and feel so proud that I am starting a diversification and it is the beginning of my huge passive income...As a result, I learned that the deposit, at best, only covers inflation, and due to the devaluation of the local currency, I even lost in $ equivalent, but this was an important lesson about the currency risks in emerging economies. After graduation, I left for Russia to look for a job and since then I live and work in Moscow. While being here, in 2017, for the first time I was seriously thinking about investing in stocks because in Russia it is at least somehow developed, while in Moldova even now it seems like something extraterrestrial for the average person. At that time, the threshold for entering the investment field seemed too high and I rejected this idea. In 2019, I returned to investing subject, having learned about the FIRE movement along the way, and decided by all means to open a broker account. On October 1, 2019, I opened an Interactive Brokers account and for the first time replenished my account with $10,000. I have not missed a monthly top-up ever since, paying myself first at the beginning of each month. By January 1, 2020, my total capital (broker + cash) was approximately $ 43,500. At the end of 2020, we pooled our savings together with my wife (at that time my girlfriend) and we got about 81k (with my 73k). As I wrote above, thanks to my salary, stable growth of the stock market, and a couple of successful projects from my wife, our net worth for July 2021 exceeded 100k and is equal to about $115k. Maybe we would come to this amount faster, but we love traveling and it takes a good amount from our savings.
I am 28 years old, my wife is 31, no children yet. We have a car (which I did not include in the net worth as its price is insignificant). We are renting a one-bedroom apartment on the outskirts of Moscow. My current salary is $2,800/month (after tax), hopefully going to receive a raise up to $3370. I have a part-time job as a mentor which makes me 270$ more. My wife's income is hard to estimate, as it depends on the existing projects (which suffer a lot due to the pandemic). Last year she made $4000-4500, but this year she is already $5750$ ahead of my total income. We have calculated our FIRE number and will go to it, trying to keep the savings rate above 50% of income. It may have been messy, but I am very grateful that you read this far. I will be glad to answer your questions. [link] [comments]  |
| My half year 2021 financial update after over 10 years post FIRE Posted: 09 Jul 2021 09:36 AM PDT Quick disclaimer since these posts sometimes get hate. This isn't meant a s a humble brag or a comparison to anyone else. This is strictly provided to the FIRE community because I know I would have liked to have seen real world example of how people handle their finances when I was trying to figure all this out many years ago. Another reason I post these is to show there is more than one way to do FIRE. I was able to accomplish this without ever making a high income during my working years. I simply lived very frugally and put the money I saved into individual stocks (hey, it was 80s - 90s...I didn't know better and stock investing was a completely different animal back then) and then converted that to buying rental properties in a low cost of living area in the 2000s. Quick stats: I'm 55, single, no kid's, about 10 years post FIRE. INCOME Total net income through the first 6 months of the year. $61,036 That breaks down as follows. $54,300 Net Income from rentals (Mostly reinvested) $1500 from dividends from my broad market index funds (100% reinvested) $4442 from dividends from my high dividend portfolio (100% reinvested) $794 from dividends from Fundrise (100% reinvested) GROWTH AND NET WORTH My growth in my investments so far High Dividend Stock account began the year at $98,892. I invest $100 per day into it. It currently is at $142,581 Broad Market Index fund account began the year at $193,640. I invest $200 per day into it. It currently is at $299,233 My Fundrise account started the year at $44,479. I invested a total of $4000 so far this year. It is currently at $53,124 My real estate (rentals) is very difficult to estimate since I have partners on some of the houses and some I own outright. Not to mention it isn't a liquid asset. I usually just judge it by the income it produces...that being said it does have a value that adds to my net worth. I'll be conservative and say my real estate portfolio is worth $1.5M, although the amount I've invested into it is well under $500k. My personal property is worth about $350k - $400k I have misc. accounts totaling around $40K...this is a small Acorn account, and my liquid accounts that I use for personal and business expenses. I keep more in a "cash" bank account than most because I need to cover business expenses. I try to keep around $20K in there, but it will fluctuate greatly throughout the month to as low as $7 or 8K, to sometimes as high as $30k. I currently have another $15k in a money market fund. I have this for quick liquidity when needed. This also varies greatly and will be as high as $50K at times. Not going to bother with my cars and other misc. on this update. This brings my total net worth as of this update to around $2,384,393 EXPENSES In the first half of the year I've spent a total of $5708 on all non business related expenses. This is a little higher than I budget for...I would be well under budget on my basic expenses, but there was a car repair in there that blew it. My fixed monthly expenses break down like this Phone/Internet $25 (Visible wireless with unlimited hotspot for internet) Insurance on my cars $45 (3 cars liability only) Food/groceries $100 (I've done some detailed food budget breakdowns if you're curious how I keep this so low) Electric $150 (average throughout the year/ all electric house) Gas for cars $50 Health Insurance is a free (for now) catastrophic plan. Thanks to all my real estate deductions I get to write off most of my income, leaving me just able to qualify for the absolute worst plan available in my state for free. Of course, if one little thing goes wrong at tax time and I step over the threshold at the end of the year, that could change and I'll be left paying for a plan I've never used. That brings me to $370, that give me another $430 for any one time expenses that come up. I like my yearly spending to stay under $10K, but if I go over I'm not freaking out. I've been able to stay on budget with my personal spending for many, many years now, though! I think that covers where things are now. WHY DON'T I SPEND MORE? I get asked this a lot. Why am I still trying to accumulate wealth 10 years after I retired? Well, I'm still relatively young, and I have some big future goals that includes a large animal sanctuary with its own vet clinic and vegan restaurant. Even though I already have about 40 acres lined up for it, it is going to take a long time to get all the infrastructure in place. It might be 5 -10 years before it actually opens. I'm hoping to build as much as I can in the meantime. I'm also just frugal by nature. Most of the stuff I enjoy is free or nearly free. Hiking trails, video games, TV, movies, diving down rabbit holes of whatever interest me at the time, etc. Some of my hobbies even makes me money. I've managed to buy cars that appreciate. I happen to be a decent poker player. My watches have done really well...same with my art collection. I don't live like a pauper. I live alone in a 4000 sq ft Mid Century house built into a cliff overlooking a river and beautiful valley with an indoor pool...so don't think my frugality always comes at the cost of the finer things. It is true until I recently bought my dream house I lived in a very modest house most people wouldn't associate with a millionaire (that house now rents for $650 a month), but I was patient and wanted to find the perfect house before I bothered to move. As I briefly mentioned before I have nice things like collector cars, art, watches, etc....I just try to spend as little as possible on depreciating assets or things like food. I appreciate good food, but being vegan makes it hard to eat out in my area. That is probably an understatement. There are maybe a handful of places I can eat at all, and most of those only have one or two items on the menu I can eat. So I'd rather prepare great meals at home from cheap ingredients. I've gone into details in other posts about how I shop and prepare food, so won't make this post any longer doing it again. As always, I'll try to answer any questions you might have. Thanks for reading such a long post!! [link] [comments]  |
| Interesting article about Vanguard research on 4% withdrawal for FIRE Posted: 09 Jul 2021 07:18 AM PDT It's kind of a marketing pitch for vanguard buy also an interesting read. https://investornews.vanguard/fueling-the-fire-movement-updating-the-4-rule-for-early-retirees/ [link] [comments]  |
| "Lying Flat" - China's version of LeanFIRE Posted: 09 Jul 2021 03:41 PM PDT https://www.nytimes.com/2021/07/03/world/asia/china-slackers-tangping.html. Body of the article in the comments. It's kind of a cross between LeanFIRE and hakikomori. Adherents eschew traditional jobs, marriage, children, home ownership. They only work odd jobs for the bare minimum to survive. Given the demographic time bomb awaiting China, CCP is not happy about all this. It's pretty interesting that these anti-consumerist counterculture movements arise independently in different countries. Probably says something about modern society. [link] [comments]  |
| Appreciation post to the community- Took a 65k pay cut today thanks to FI - 31/28 550k NW - Teachers Posted: 08 Jul 2021 11:36 PM PDT I want to first say thanks to anyone in this sub who may have helped me in the daily discussion this year. This sub and mentality have been instrumental in some major decisions I've made this past year. FI comes in so many ways. There are various philosophies, approaches, paths etc. to get there but the concrete to this mindset is to provide yourself the opportunity to have options, and to live life on your terms. I think I've said it 100 times. My major objective through this FI journey is to "own my own life." It's up to us to define that. I don't think there is one path. Some do it through index funds via high savings rates. Others use real estate. Some get lucky, cash out etc. I've used an unorthodox mix of investments to get to 500k+ NW, which I still feel we have a long ways to go, but provides comfort to make major career and or personal changes in life. Until this past year, my wife and I never combined for more than 100k Gross salary. She's 28 I'm 31. No kids yet. We are both school teachers. We're teachers who travel every summer and have traditionally skipped out on a lot of domestic fun to splurge in the summers. I'm writing this post from Paris, where I'll be spending much of the summer. We save heavily for this and it's a major priority. I'm a French teacher, my wife special education. We love teaching. It's cliché but truly a passion. I've constantly struggled with the prestige in salary or lack there of with teaching, after 7 years, teaching in 3 different countries, I got offered a job making about 150k annually as a consultant. It was my big break! Well, I worked it for about 14 months, with no vacation and ultimately took the rest of my leave. Today I formally submitted my resignation letter. Burnout? Maybe. We clocked 230k salary this year combined, 2.5x are highest previous annual income and it was undoubtedly the hardest year of my life. Probably the most marking year, a year where mental health, finances and existential discovery were at the forefront. The pandemic likely made this true for many, which is what kept me going for at least this long. We had an 80% savings rate when including mortgage premium. Probably unhealthy, but it was during a pandemic. So I also just accepted a teaching position making ~70k annually the other day. Add a bit more for coaching soccer. My wife, also a teacher makes 65k. We live in a HCOL city so that stretches so far. In 5 years we'll be back at 160k combined and in 10 years about 200k. Any other teachers out there? I realize teaching may be the perfect FI career. You don't make that much comparably. I have more than a masters degree, 9 years of experience, speak 4 major languages. But it's undoubtedly fulfilling and in a 30 year career, we will have worked 15 years counting summers, break, holidays and weekends. This was incredibly important. This decision has been difficult, to say the least, but it has also helped me redefine FIRE. I'm less concerned about the RE part and we focus on having a large mini retirement annually. Anyways, this is more of an appreciation post for this community. I'm happy to share financials. A lot of our growth has come through real estate. I believe in the supply/demand economics around Bitcoin, which has served me well but I've sold 3x for down payments and lastly I pretty much only invest in simple vanguard index funds like VTI VXUS and a bit of QQQ and was pretty heavy in Amazon at one point. I'm interested in hearing what FI means to you? Edit: A couple major things that have helped us financially:
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| Weekly FI Frugal Friday thread - July 09, 2021 Posted: 09 Jul 2021 02:00 AM PDT Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed 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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