Financial Independence Daily FI discussion thread - Wednesday, September 01, 2021 |
- Daily FI discussion thread - Wednesday, September 01, 2021
- One accountant's journey to FIRE: 825k at 29 (725k liquid)
- Any country which is comparable to US in terms of income and retiring options?
- Roth vs reg 401k contributions?
- Weekly Self-Promotion Thread - September 01, 2021
- 10 year Not-So-Humblebrag
| Daily FI discussion thread - Wednesday, September 01, 2021 Posted: 01 Sep 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]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| One accountant's journey to FIRE: 825k at 29 (725k liquid) Posted: 01 Sep 2021 05:33 AM PDT Long time no see r/FI, don't worry you didn't miss a post. Thank you to the handful of people who checked up on me, it was very lovely of you. A year and a bit has passed but my net worth has doubled. Here's what happened:
I've kept my previous post mainly intact but have made changes in bolded italics. All mentions of currency are in CAD. About me Hi! I'm a 29F CPA living in Toronto, Canada. I wanted to post this to show the non IT people in this sub that there are other careers where it's possible to increase net worth quickly despite not making 100k right out of school. I've always been a saver but I discovered MMM in December 2015 (when I was 24). The realization I could retire at 35 really lit a fire under my ass to save even more and actually invest it. I was working through my CPA at a big 4 accounting firm at the time and hated every second of it. To be honest, accounting is boring and a 'meh' career at best, but the money is good so I will most likely stay on this path until I feel FI enough, if not actual FIRE. I live in the most if not second most expensive city in Canada, sharing a The privilege – My parents paid for 3 out of my 4 years of university. That's about 36k that I got for free which will never have to be repaid (I asked). That one year I paid for and for the 2 years I lived on campus I paid for myself through part time jobs before and during university. I also went back to live with my parents for one year rent free during my 8 years of working, which was a nice boost to my net worth during that time. Here are the numbers! The goals My spending goal in retirement for one person is $20,000-$30,000 per year (as part of a $40,000-$60,000 spend household). I expect my SO to pay their own way on this FIRE journey. The dream at the moment looks like contract work (3-6 month contract) and traveling the rest of the time, most likely for 5ish years of travel. On the off years, we could work, volunteer, whatever. These FIRE plans are not that defined because who knows what I'll feel like in 5-10 years. All else being equal (is it ever?) I expect to achieve the following net worth milestones at the following ages:
^the above does not account for market corrections/recessions. If one happens tomorrow obviously those ages will change. The house sale and severance have really helped speed up my timelines here, but to be honest I'm not sure I'm ready to FIRE at this time, especially with a new mortgage. Currently about 2 years ahead of schedule though, which feels amazing (including only liquid assets). My flair is based on the first goal - $500k for 20k of spending at 4%. Is that going to be the number I FIRE at? Future plan/goals – I have no interest in having children, which enables my fast FIRE journey and long term travel plans. Income history and Net Worth I started my career at a big 4 accounting firm making 45k, then 50k the next year, then 60k the next. These are standard salaries for this job in my city – Toronto. During this time I was renting a place downtown with a roommate or SO. After leaving the firm my first job out was at 75k , and I moved to live with my parents for that year. Getting rid of rent was amazing for my net worth. Then I moved to a more interesting job that I thought I would love for 80k and started paying rent again. Then I got bored and moved to another job, where I made 95k the first year and now 100k with very generous 20-30% bonuses. There was a lay off at this company so now I work for a new company at 110k, with hopefully a reasonable bonus. First year we (my SO and i) lived downtown paying rent, now paying down a mortgage. I do have access to a side hustle that I started participating in around 2016. It's very CPA specific and involves helping incoming CPAs get feedback for their practice exams in preparation for the qualification exams we have to write in this profession (PEP and CAP for those in the know). I think I made <$2000 the first year I did it, but it grew steadily and I made $36,000 last year from this. 2021 will be less rich since COVID has hurt enrollment numbers (probably 20-25k). My net worth started at -$10,000 on the day I graduated university in the summer of 2013. That debt was owed to my parents for a lavish long trip I took that summer which I repaid in my first year of working. No regrets. After I started working and saving, it began steadily going up. My records are spotty in the beginning, since I was just saving to save.
I reached the 100k milestone sometime in November 2016 at 24 years old, 3 years and 2 months after my first day of work.
I reached the 200k milestone sometime in April 2018 at 26 years old, 1 year and 5 months after 100k (4 years, 7 months after my first day of work). It definitely gets faster (especially if you have year of not paying rent!). All else equal and barring a downturn, I hope to achieve the 300k milestone around winter 2019. Depending on the side hustle this year and with my increased income, here's hoping for Dec 2018 instead of March 2019. Well that didn't work out, but that was mainly because of saving up for the house during the low market in the 2018 winter and the closing costs.
Why the big jumps toward the end there? Bonuses and side hustle money coming through (it comes in large chunks) and the tenant providing first and last helped as well. The 300k milestone was reached at the very end of April 2019, one year after 200k. It's definitely getting easier and easier to amass more money as my income grows and the growth compounds due to the nest egg size. I'm hoping 400k comes around the same time next year. Side hustle should be around the same this year but we're planning a lavish vacation and some minor renovations.
More lines than usual because I wanted to show the COVID drops. It took my bonus and a side hustle payment to get me to crossing the 400k line, along with a minor market recovery. The 400k milestone was reached at the very end of April 2020, one year after 300k. 500k is less than a year away should my plans for 2020 work out.
I'm intentionally trying to obscure exactly when the major events outlined above have occurred for privacy, but by April the dust has cleared on the cash coming in. This includes the severance, bonus, and the house sales. Since I'll be more focused on the liquid net worth going forward, I'll probably wait to post till $900k liquid. Monthly expenses Here are the 2020 expenses and 2021 so far. Expenses have definitely increased a lot due to home ownership and a lot of eating out due to general laziness/having to be out of the house for showings. 2020 expenses
2020 was all about renovating the house for a flip. With COVID, I continued to work from home and my phone continued to be covered by my employer. We purchased a car towards the end of the year as well. As before, any health/dental over and above work insurance goes into Misc (Netflix is in there too). Misc is really large due to a new personal laptop, new computer chair, and some laser hair removal. 2021 expenses to date (8 months)
The mortgage for the intermediary house was quite big since we chose to borrow more instead of putting the profits from the old house into the new house. While this was the mathematically correct thing to do, emotionally I felt quite house poor which reduced my enjoyment of the house. This is something I will consider in future real estate decisions that I wanted to highlight if anyone else is making a similar decision. On the new house we put 20% down and this has made the mortgage payments much lighter. Misc is again high but for different reasons – I no longer have my phone paid for so I had to purchase one and get a phone plan. Moving costs are also included in here. Our goal for the remainder of 2021 is to reduce food spending, we've been spending with reckless abandon on this category and need to rein it in. Please keep in mind that these expenses are for myself only. My SO and I split household expenses and spend our own money on items like clothes or video games. I don't foresee our essentials spending increasing above what it currently is Investments My tax advantaged accounts are maxed out and self-managed through a DIY brokerage. My taxable contributions are split evenly between the same self-managed DIY brokerage and a robo advisor for shits and giggles. The robo advisor is The DIY Portfolio is as follows: Cash: 0.1% (preference is 0%), everything is in the market Bonds: 1.6% (preference is 5%), sold it all in March to buy more ETFs. REITs: 1.4% (preference is 2.5%), VRE mostly. Also meh about this allocation. Canadian dividend stocks: 2.8% (preference is 2.5%, my investing strategy used to be dividend based so this is a remaining position from then), CDZ. Canadian Market: 2.6% (preference is 2.5%),VCN US Market – hedged to CAD: 23.8% (preference is 25.5%),VUS/VSP US Market – unhedged: 28.5% (preference is 25.5%), VUN/VTI(n USD) International (both developed and developing) – unhedged: 38.5% (preference is 36.5%) XEF+XEC/VXUS(in USD) My robo advisor has split my investments as follows: Cash: 6% Bonds: $9% Low carbon global stocks: 30% Canadian stocks: 24% Global stocks: 16% Cleantech stocks: 15% I finally called them to change my risk level from 8 to 9. Since it was requested last post, here is my net worth is split as follows (rounded):
The cash amount is only this high since I was holding cash for the downpayment. Once everything settles down and we buy furniture and stuff, cash will go down to near zero. All of my tax advantaged accounts are maxed out. I'd love any advice on my allocations. I rebalance when I invest so it's a bit slow. Is there anything else you want to know? If this post is well received and the community feels it's useful, I'll make another one when I get to $900k liquid investments. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Any country which is comparable to US in terms of income and retiring options? Posted: 31 Aug 2021 07:18 PM PDT I've constantly heard US being the best if someone wants to earn high income. But is there any other country which has similar income/job opportunities like US? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Roth vs reg 401k contributions? Posted: 01 Sep 2021 03:23 PM PDT I (37f) started a new job this summer and they have a 401k at Vanguard with a 6% employee match. It was a 40% pay increase. Nice. This puts me and husband in the 24% percentile this year, I think. Using the raise to max out my 401k contributions. Up until now I've been doing traditional 401k (like an eegit) but never near meeting the max. Now that I'm in my highest tax bracket… Should I be pumping a Roth or traditional 401k, or a split? [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weekly Self-Promotion Thread - September 01, 2021 Posted: 01 Sep 2021 02:00 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Posted: 01 Sep 2021 09:45 AM PDT Staring tracking exactly 10 years ago a month following our wedding. Married a woman who is somewhat neurotic about spending (thankfully, as I spent my first 8 years in the workforce spending nearly exactly what I made). 41M spouse 39F, MCOL Heartland, Commercial Banking, spouse in corporate HR; 3 boys 6, 4, 2 all in daycare which has impacted our savings (ranges between $28-40k/year post-tax spend). Hopefully she will be leaving her current role and bumping her income by $50-75k annually soon. Definitions: NW includes $386k in R/E Equity Liquidity – cash plus retail brokerage; does not include $200k in unused HELOCs and $75k in unused brokerage lines of credit Investable – cash, brokerage, retirement accounts and ~$250k in 529's Most proud of: -3 healthy, good-hearted and respectful children -successful marriage which has (and is requiring) work, including counseling -doing some good work on my own mental health -14x NW growth, 9x Investable growth -purchased 2nd home in Ozarks in 2020 which rented most of this season and got us about a 15% cash on cash return Goals: -FIRE goal is between $2.5-$3.0MM investable (NOT including 529's) -I do enjoy my job and it is extremely flexible so I may just ride this out -manage anger and fear; meditate more with yoga 1-2x per week -need to focus on physical health in Q4 2021 and 2022, drop 20lbs and trim body fat % by a minimum of 10 percentage points -My biggest goal is to find processes, not necessarily a goal (maybe this is the wrong approach, but process-focus has generally served me better than goal-focus, at least once the goal has been determined) Household Income history, both working full time: 2011: $131k 2012: $141k 2013: $170k 2014: $160k 2015: $188k 2016: $193k 2017: $199k 2018: $247k 2019: $302k 2020: $313k Balance Sheet Growth 2011: NW: $158k Liquidity: $52k Investable: $191k 2021: NW: $2,191k Liquidity: $510k Investable: $1,779k [link] [comments]  |
| You are subscribed to email updates from Financial Independence / Retire Early. To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google, 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
No comments:
Post a Comment