Financial Independence Daily FI discussion thread - Friday, September 03, 2021 |
- Daily FI discussion thread - Friday, September 03, 2021
- Passed $500k NW today! 28M- focused on FIRE for ~3 years
- FIRE transition - 1 Year Update
- Weekly FI Frugal Friday thread - September 03, 2021
- I’m beginning to think Residential Real Estate Investing is my family’s only path to FIRE
| Daily FI discussion thread - Friday, September 03, 2021 Posted: 03 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]  |
| Passed $500k NW today! 28M- focused on FIRE for ~3 years Posted: 02 Sep 2021 11:19 PM PDT Hey friends- was looking at Mint today, and realized that as of today, wife and I just passed $500k NW! With how hot the housing and stock markets are and the odds of a correction/recession occurring in the near term seeming to be somewhat inevitable, I realize that this may be a temporary thing and a lot of our NW could vanish overnight, but it's exciting to see the progress we've made so far. And as I read in this sub all the time, I have literally no one else to share the good news with other than my wife- and she's definitely sick of hearing about our NW from me :) So thought I'd share with you good people who get it and can appreciate it because we're all working and striving towards similar goals. Background My wife and I discovered FIRE back in December of 2018 and realized we'd already been largely living and saving that way out of habit, but didn't realize there was a whole community built around the idea of freedom from financial independence. What really blew us away was that when we ran fairly conservative numbers, we realized that the idea of being in a position where we didn't "have" to work by the time we were in our mid to late 30s, could actually be a reality if we made a plan and stuck to it. We're generally fairly frugal people, but like a lot of people on this sub (and millennials in general it seems), we really value traveling, trying new places to eat (if it fits in the budget), and fitness. So most of our discretionary spending goes towards those things. Essentially everything else goes towards saving and investing. Current Income: ~$170k/year (in Sales), wife is SAHM. Started at ~$75k coming out of college (also in Sales) Asset breakdown -$150k in home equity (owe $335k on our loan, home value is around $485k) ~$130k in company 401k (combination of traditional, Roth, and some after-tax contributions) pretty much all invested in low expense ratio Vanguard S&P 500 funds available in my plan ~$100k in Roth IRA accounts (includes both my IRA and my wife's IRA)- mixture of individual stocks and ETFs- probably about a 2:1 ratio -$55k in taxable brokerage accounts- half ETFs/index funds, half individual stonks -$27k in HSA account (invested in Vanguard total market funds/ETFs- almost identical to 401k selection) ~$32k in checking and savings ($25k for Emergency fund) -$6k in crypto (the FOMO is real haha, but followed a rule of thumb I heard, and invested no more than 1% of net worth, being totally okay with losing it all- invested $4k total at the time) -Not sure whether to count them as assets, because a car is hardly an "asset" in my book, more like a necessary liability haha, but paid cash for our two old and well-used cars (my Dad raised me to always buy used- "a new car loses a third of the value when you drive it off the lot!"- when we bought them several years ago. Each is probably worth about $3.5/$4k, so we'll say an additional $7k from our cars Where we had help I feel like it wouldn't be fair to not mention that while my wife and I both worked in college and have saved religiously since we were poor students together, we both went to a very low-cost university and she and I both got help with rent from family (I stayed in a family member's apartment, her parents paid for her accommodations until we were married). This allowed us to graduate debt free, which I realize with how much college costs nowadays, is a major privilege and blessing, and definitely allowed us to start investing and saving earlier as we didn't have to worry about paying down student loans. The other huge help we got was from my parents when we bought our first home. My grandparents helped fund my parents downpayment on their first home, and my Dad wanted to pay it forward and do the same for his kids. For us, this equated to a very generous $40k gift to help us get into the housing market and put 15% down without forcing us to sell major stock investments. We would have liked to put 20% down initially to avoid PMI, but didn't want to sell stocks if we didn't have to. Luckily, with home prices rocketing across the country and ReFi rates being as good as they've been, 6 months after buying, we were able to refinance at a better rate and get the dreaded PMI waived. What next? If you've made it this far, congratulations. Our ultimate goal when we set out on this journey 3 years ago, was to get to ~$1.6M ($65k yearly expenses with the 4% rule) and then semi or completely retire, depending on how we feel once we get there. As I've read more, I'm realizing that 4% SWR is often a little too optimistic, so realistically we'd like to get closer to a 3.5 or even 3% SWR which would raise our FIRE number to $1.85M or $2.16M respectively. At any rate, we've still got a ways to go, but as they say, the first $100k is harder than the next $100k, so I'm hoping the same holds true for our journey ahead. Time will tell! Thanks for attending my TED talk :) [link] [comments]  |
| FIRE transition - 1 Year Update Posted: 03 Sep 2021 06:36 AM PDT This post in an update to this post I made last year. Things have gone much different than I expected but all for the better. I found out my company was being sold JUST before I was about to put in my 2 weeks notice. Instead of leaving in October/November, I ended up staying until the company closed in December. I walked away with a nice bonus. I had a cash offer on a house in my new city in August 2020 but a bunch of crap got in the way of it closing and OVER A YEAR LATER I am still waiting to close on that property. In the meantime, I found another house in my new city, bought it in April, and loaded everything into a Uhaul and moved. The real estate market in my previous city went bananas in 2021 and when I finally sold my house in my previous city, I walked away with over 100k in profit on that house. I used the proceeds from my home sale to purchase rental property #1 in my new city and am getting close to closing on rental property #2. I will soon have 3 paid-for houses, one for my primary residence and two for airbnb. I have spent about 20k renovating my primary residence and it's about 75% remodeled. I just bought a cheap truck to help haul around construction materials for the renovations. I'm still doing some occasional work-from-home work which takes 3-5 days per month and earns me about $1,500. That plus renovations keeps me busy. In total, I net about $2-2.5k/mo at the moment and plan to net another $2k/mo from the investment properties which will more than cover my expenses. As far as lifestyle, I have been loving it so far. I wake up refreshed not having to go anywhere. I started working with a trainer at a gym 3 minutes from my house. I'm building muscle and losing fat. I'm cooking more at home which saves me money and helps me avoid food intolerance issues I have. Hopefully I'll be in good beach shape by next summer. After visiting a couple of churches, I found one that I really liked and have been getting involved. I also have some delusions of grandeur about becoming an entrepreneur so I've been networking at events around the city. Life is pretty great so far. I've spent a LOT more time with my family (they're several states away) than I used to. I am making plans to road trip, travel internationally, go hiking, etc. Some days I wake up and just go to the beach for an hour or two. I have two beaches to choose from that take the same time to get to. One is a popular tourist beach with lots of people, restaurants on the water, bars, etc. The other is quiet and laid-back. There's a really nice park a few minutes from my house with a paved path that goes along the water. Sometimes I go there and walk or run. I really enjoy the flexibility of time. I can just pick up and go wherever whenever. As someone who is single with not kids and loves to travel, flexibility is the best thing ever. I still have the urge to do things and don't mind working. But at this point, I am still trying to find something that really motivates me and works with my lifestyle. Too many jobs are full-time in-office jobs which doesn't really work well with my lifestyle. I'm happy to answer any questions anyone has. [link] [comments]  |
| Weekly FI Frugal Friday thread - September 03, 2021 Posted: 03 Sep 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]  |
| I’m beginning to think Residential Real Estate Investing is my family’s only path to FIRE Posted: 03 Sep 2021 03:00 PM PDT After browsing numerous FIRE subreddits, I think that residential real estate might be the only way for me to achieve financial independence. For example, I like to browse this subreddit a lot, and it seems like those who are in the 1-2 million NW are in highly specialized fields such as tech, law or healthcare. Other people who have not reached FI are like "I earn $200k and my Spouse earns $150k and we just reached a NW of 500k". Well shit, it seems like compound interest plus a couple years, and they will be multi-millionaires. I also like to spend some time in r/FATFire (unlikely I'll ever be there, but whatever) and the people there reach high NW by running a successful business or going IPO. Well, this is our situation: • 26 and 22 Year-old married couple, 50k Salary, NYC • Spouse will get back into the workforce. Expected household income of 75-80k soon. • Assets include 63.5k rental property in a LCOL area, 46.5k invested into stocks and crypto. • Only debt is student loans which is 46k. • 110k – 46k = 64k current Net Worth One of the things that hold me back is that I have a master's degree, but in the social sciences where 100k a year is seen as an incredibly high salary only top-level executives get (usually MBA degree holders get such positions). A couple of years ago I took a big risk and purchased a residential real estate property in a LCOL area, fixed it up, rented it, and now it is worth about 63-65k. But when I think about FIRE, it seems like our only way to achieve it is to continue to try and invest in real estate properties and build a small portfolio of 3-4 houses in that same LCOL area. We are not high earners and given our education, it is unlikely that we will ever be in those high NW numbers. I can't fathom to think working for decades and decades, barely scraping by to reach 1.5-2 million NW. I personally HATE working. I am not passionate about my field so working until 50s and 60s is outrageous to me. Since I know r/LeanFIRE might be our only option, my current plan is to wait until our investments reach 50k to try to purchase another property, with a mortgage this time of course, rent it, and do it over again until we have a small portfolio of rented properties. Once the properties are paid off, we can live off the rent money. Real estate is just too attractive to me given the cash flow that comes from the rent, the appreciation of the property, and yearly lease agreements might keep up with inflation. I am fairly new to FIRE, but this is my current thinking and would like your input, opinion, comments, recommendations… [link] [comments]  |
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