Financial Independence Daily FI discussion thread - Tuesday, August 10, 2021 |
- Daily FI discussion thread - Tuesday, August 10, 2021
- Can anyone tell me if this CNBC article on FIRE makes any sense…..?
- 7 year journey to 780k
- How To Start My Road To Success At 16 Years Old
- Using bond ETFs as a savings account
| Daily FI discussion thread - Tuesday, August 10, 2021 Posted: 10 Aug 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]  |
| Can anyone tell me if this CNBC article on FIRE makes any sense…..? Posted: 10 Aug 2021 08:46 AM PDT "She and her boyfriend, also a member of the FIRE movement, are working toward a FIRE number of at least $700,000. They believe if they invest that much, it will generate the $21,600 per year they need to live comfortably and cover their expenses. Their goal is to do it all within the next five years, which would allow DeSantis to retire at 32. DeSantis has been able to save nearly $90,000 between her various retirement accounts and liquid savings. In 2020, she says she was "able to save about 86%" of all her earnings. 2 questions here -2 people living off 22k per year? Health insurance? -it's says "retirement accounts" Are they talking Roth IRA or 401k what's to tap 32 yo? Idk, this seems to be another fluff piece from CNBC. Just seems impossible looking at their numbers [link] [comments]  |
| Posted: 10 Aug 2021 01:10 PM PDT 29Male here. Throwaway account for obvious reasons. Long time lurker. Just wanted to share my story with the group. Not a Tech Bro, or Bitcoin windfall, but have had a number of things go my way in terms of career progression/college. Feel free to ask on additional details if desired. Graduated in 2014. Decent GPA but science degree didn't yield many options/marketability in terms of job opportunities, like many I took a job I was completely overqualified for to get started. 2014: First job Pay rate $12 per hour, annual comp (25K). During this time I was promoted 4 times in the first 13 Months. the first was after 2 Months, then again at 4, then at 7.5 then at 13. Definately wasnt happy/thrilled with where I started but kept pushing/learning/growing and this translated into strong career progression. Pay progression shown below: $12-15-18-21 (per hour) 2015: 21 per hour annual ~49,000 2016: Wanted additional marketability and "job purpose/meaning" so applied to Master programs, got accepted. Then targeted a Job search around new employers that were known to have generous tuition reimbursement. Got a job offer for 55K base (60k total comp) with additional 10k per year tuition reimbursement. 2017: Promotion. Offer was for 61K base, countered respectfully referencing data, offer was raised after management discussed with HR to 65K base (71K total comp) 2018: Complete Masters degree. Promotion/job change to 71K base 78K total Comp. Company paid for 30K of 42K in masters degree cost. 2019: Compensation was below data for role, respectfully asked for raise, was granted, increased to 78K base, 85K total comp. 4 months later someone in the elevated project role above me in the company left on a key program that I was on, this meant I was the sole/lead contact on this major program, Company promoted me into the role the person left on. Salary 81K total comp 89K. 2020: Was not searching for a different job, was very happy with career progression, but was receiving headhunter messages on bout a bi-weekly or monthly basis. Participated in these for the interview experience. One of these ended up with very generous package (140K base and 190K total possible total Comp.) would have been a significant risk for me and total comp was not guaranteed, would have likely had lifestyle impact (negative). Accepted offer initially, but current company offered a counter, which I accepted. Countered salary (same company) 100k base 126K total Comp. 2021: Promotion. 117K base, 147 total comp. During the period of time in question, lived pretty frugally, but not like a hermit. Ive had roommates almost the entire period of time in question. Along the way, I got married and my wife added 80k to our networth at the time. She is not currently working. We do not yet have kids. I always prioritized saving and investing first even when making 12 dollars an hour, but aside from keeping expenses low soo savings rate was high, I also kept pushing to drive more value for the organization and make sure these efforts were visible to the right people at the time. This has resulting in high savings rate ~80%, but also increasing income led to higher real dollars saved. I also self studied on investments and finanical independence (google,books and reddit,ect), and thats been a evolution/journey as Ive built to current knowledge/practices. From the begining I paid myself first, but a large shovel helps in the growth rate. The market returns are also an obvious benefit/luck. Ive also put in a lot of effort in terms of work hours, and also going to school while working. These efforts translated into the career growth. When I was promoted I would usually funnel most of the increase into savings and investments, but recently have allowed ourselves a little bit more flexibility on spending, I don't look as closely when grocery shopping anymore, and we enjoy good food/alcohol. I expect as the balance continues to grow we will continue to expand spending as we like nice things, but chose to go without during our 20's for most of our wants. We have seen an increase in the value of our home compared to when we bought it (~130k). Part of this is due to the obvious current market explosion, and another portion is due to a lot of sweat equity in some major home improvements. the below networth progression was a bit slower in some periods to reflect Master degree costs and paying off car (car value not included in networth calculation). Clearly, biggest takeaway to me reflecting on this is that the earlier periods of time progress was slow, especially compared to now. My excel model told me this would be the case, but looking back its still striking just how different the pace is. My current excel model shows the acceleration will continue as networth increases and once wife is back to work in the next year or two. I expect to save/invest around 85k this year, with the remaining increase in networth coming from investment returns. I think this time next year we likely wont have crossed millionaire status, but will be around 900k, assuming a normal/average market year and not a market tanking year. Once my wife is working, we will likely increase our spending rate, but Im expecting we will be saving/investing over 100K once she is working again, atleast thats what I have in my model. I have an excel model/forcast where I have it showing my entire life in years (forcasting net worth) Ive used this file to play around with different scenarios to detemrine likely outcome spread in terms of networth with the various inputs. Networth over time (all are from mid year august): 2014: 4,000 2015: 31,000- Investments, 2016: 43,000- Investments, bought car, aggressive payments 2017: 60,000- Investments/savings, paying off car, masters degree costs 2018: 97,000- Investments/savings Masters degree costs 2019: 375,000 (continued investments and joining of Wifes ~80K net worth). Bought house. 2020: 467,000- additional savings/Investments. Home appreciation, investment returns. 2021: 780,000.- additional savings/Investments. Home appreciation, investment returns. Just wanted to share, this group has been very inspiring to read/follow over the years, I've followed the sub almost my entire working journey, so just wanted to thank everyone for the good posts over the years and the inspiration to raise the bar on my financial goals. For those of you just starting out, look for all the ways to keep expenses low as possible, save/invest as much as you can, and look for ways to grow income, you will get to where you want to be with the right plan/mindset. [link] [comments]  |
| How To Start My Road To Success At 16 Years Old Posted: 10 Aug 2021 03:56 PM PDT I am 16 years old, and I want to achieve my dreams. I have a dream of owning a nice house, cool supercars, and be able to support a family and provide THEM with an amazing life by the end of 10-15 years(age 26-31). I wanna start chasing this dream as soon as possible, which is to start NOW, however, I am stuck on what my options are in terms of income. I currently work at Chick-Fil-A and make $15.00 an hour. I want to keep that source of income, but also get more I can do at the same time as that. Maybe there are things I can do when I'm not working, or passive income sources I can get into that will accumulate WHILE I work. I also want a plan for the future that I can stick to in hopes of becoming financially free. I have goals set for myself but do not know how to achieve them. Here's what I have so far: Passion is key. Keep self control. Have the right mindset. Work hard. Get relationships with the right people. Research research research. Multiple sources of income. Are there any tips anyone has to help me? Thanks in advance! [link] [comments]  |
| Using bond ETFs as a savings account Posted: 10 Aug 2021 10:28 AM PDT Let's say you have a chunk of cash, and you don't want to tie it up in equities. You also have bills and rent to pay. What are the reasons that you should NOT put it 100% into a bond-ETF such as BLV. When you need cash for rent, you can sell some BLV, or you can borrow against your brokerage account. I don't fully understand the risks here. I do know that rising interest rates have an impact on this type of investment. In the USA, we are going to see rising interest rates at some point, correct? What are the issues to be aware of with this strategy, including theoretical risks. How dangerous is to have 100% of your cash in a bond-ETF? BLV is currently priced at $103. On the 3 year chart, is has dipped as low as as $83. But if it dips that low, wouldn't the monthly "dividend" (probably not the correct vocabulary) be higher? And if you just hold long enough things will balance out as this type of investment should keep up with inflation, as opposed to cash which is guaranteed to lose value? Basically - forget cash-savings accounts, and instead, put all your available cash into BLV. When will strategy be a horrible a decision, and how likely is this a horrible decision in the current climate? [link] [comments]  |
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