Financial Independence Daily FI discussion thread - Sunday, February 20, 2022 |
- Daily FI discussion thread - Sunday, February 20, 2022
- Daily FI discussion thread - Saturday, February 19, 2022
- Forced to temporarily FIRE for 5 months: what have I learnt
- FIRE gave me the confidence to make a big life change
- Annual Post #5, Middle Class path to FI
- FIRE and climate change: How are you dealing with the cognitive dissonance?
- Daily FI discussion thread - Friday, February 18, 2022
- Weekly FI Frugal Friday thread - February 18, 2022
| Daily FI discussion thread - Sunday, February 20, 2022 Posted: 20 Feb 2022 02:02 AM PST 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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daily FI discussion thread - Saturday, February 19, 2022 Posted: 19 Feb 2022 02:02 AM PST 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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forced to temporarily FIRE for 5 months: what have I learnt Posted: 18 Feb 2022 02:26 PM PST Hi all I've been in this community for a few years and have posted a couple times, mostly around personal milestones, seeking advice on specific things etc. It's been a while since I last posted, and there have been some changes in my life which directly led up to a pretty fundamental change in my view to the FIRE life. Here to share my experience and hopefully it can be food for thought. Background: 32 DINK, career in finance, individual FIRE target $1M with house fully paid for, living in VHCOL. I financially subsidize a parent.
Due to my unemployment I was forced to get a taste of FIRE.
What went wrong? I noted four things: 1. A total lack of discipline and inner drive 2. Not enough hobbies 3. Not feeling needed enough 4. Peer pressure from watching all my friends being busy How to improve and actually get ready for FIRE? 1. Work on building inner peace…meditation, reading, etc 2. Develop new hobbies and ones that better suit my current environment 3. & 4. I have yet to find solutions… It took me 5 months to land my current job, we have also just bought a house which wiped out half of our networth. But I'm feeling more relaxed than ever and relieved that the temp FIRE was over, and that I had an income again. I've also decided on a more laxed view about work and FIRE: not overly press myself to save, understand that I'm the type of person who needs work to feel valued and may very well work for a long time to come. Also assume a more zen attitude about work related stress. Like many before me have said: build the life you want, and save for it. I have finally truly understood this now. And for those of you who are in a tough grind, are on the verge of burnout: look up, look outside, try something else, take a break, discover yourself, and set off again. Sorry for the long post and the rumbling and thanks for reading. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FIRE gave me the confidence to make a big life change Posted: 18 Feb 2022 06:54 AM PST Debated writing this up for a while, but decided that I wanted to document this big shift in my FIRE journey and maybe someone will find value in it. Backstory My wife and I are almost a third of the way to FIRE at age 28/29. We were fortunate to both be like-minded with regards to finances, find good jobs out of state college, graduate with no debt due to scholarships, and have parental assistance for housing. We bought a house in 2018 and were on a trajectory to stay put until hitting FIRE sometime in our late 30s. But as a result of some COVID-induced introspection, my wife and I decided we wanted to move out of our MCOL Southwestern city. I am in consulting and my wife works in sales - we made a very comfortable living in a growing first-ring suburb. Altogether, we had a great life near family, but got the itch to do something different before starting a family. Reasons are many-fold, but largely we wanted to get out of the city I grew up in, seek adventure outside the prototypical suburban lifestyle, and experience the true city feel visiting neighborhood restaurants, walking to parks, and riding bikes around a city with actual urban infrastructure. So naturally, we went to the end of the spectrum to move to NYC. It wasn't a particularly easy decision considering we had a pretty idyllic life around my entier family and there was a fear of lifestyle inflation, but after running numbers we decided to do it about a month ago. Our tentative plan is to stay for about 3 years until starting a family and being closer to our relatives. Employment / Income Statement There was a business need for me to go to NYC at my company, so I received a COLA compared to my previous salary. My wife will not be getting the same, but I could see this move being positive for her career as she can interact with team members in-office now. We also have 2 rental properties purchased in a LCOL state + the home we have converted into a rental property. All three are occupied for at least the next year.
A Dig into Monthly Expenses (for both of us) Figure it's not necessary to boil down every line item of the move. But I figured I'd call out some of the big line items from our budget that are changing.
How This Impacted Our FIRE Plans
Okay So What? If you asked me 5 years ago if I would leave to go live in NYC I would have laughed and said hell no. But something in our lives changed and we had the urge to do something different. I don't think we would have had the confidence to do it without being on the path to FIRE. A key moment may have been reading Die with Zero and having it click that we shouldn't wait to experience the world around me until we hit that magical FIRE number. We plan to spend lavishly in our key enjoyment categories while here to maximize our time. Eventually, I think I'll end up back in the SW City near family (hence the 60/yr WR). But that option is always there and who knows how our lives will change out of this experience. I may even end up having to change that FIRE number to match living in a big city! Thanks to anyone who read. Would love to hear about any others who have had similar experiences. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Post #5, Middle Class path to FI Posted: 18 Feb 2022 01:16 PM PST Links to my previous updates one, two, three, & four Brief Summary before this post — Wife and I moved overseas to teach in China, with me picking up a gig with the UN along the way. We paid off student loans, spent three years traveling, only to return to a city in the midwest for a position closer to family. Spouse is a teacher, and I've been a social services program manager (until now! See more below). Income/W2 Employment Summary —Me (30 y/o) - Teacher - $50,971 It's been a whirlwind of a year. I wasn't happy in my old job due to my boss, wanting to work more with people, and being overworked (though I didn't know it at the time). I put in my notice with the intent of getting back into teaching, in the hope of returning overseas. My supervisor's supervisor approached me with a title promotion and 15% paybump that reduced my responsibilities, completely acknowledging the unreasonable workload. I was flattered and tempted, but ultimately refused. To show their appreciation for me, the promotion was backdated and backpaid 6 months, saying she wanted me to know I was valued and wanted to make it as easy as possible to return in the future. My "severance" was a nice mixture of reducing my position to part time and spending my remaining vacation in half day increments (maintaining insurance through the summer), in exchange for returning for one week to train my replacement once identified. I've been teaching HS French, enjoying frequent human interaction since August and really appreciating the breath of fresh air in many ways (more below). But I do miss the more analytical/high performing nature of my previous role. —Spouse (29 y/o) - Instructional Coach - $55,245 Spouse also changed roles this year, after being approached by a former colleague and encouraged to apply for a position as an instructional technology coach. After teaching in the COVID context and being less than enthused by her school's handling of things, she jumped ship to try new things. It's taken a while, but she is finally starting to enjoy the position. She's appreciating the opportunity to see things from the administrative side of things, but ultimately is looking to return to the classroom. Coincidentally, I was on a listserv for a school district across the street from our house and saw a position for her subject pop up. She interviewed and was offered/accepted the role. So next year she's looking at a <5 minute commute, much better than her current 20 and previous 30 minute commute. Family - The fall was a bit rough for us. We each changed roles, my spouse was pregnant, and then a sudden medical emergency meant the near loss of my dad. This was shortly followed by the near loss of my spouse following the birth of our second son (happy and healthy). As the doctors put it, five minutes later and we would not have had the positive outcome we had with my spouse. Both of these experiences have really shaken us and made us question our desire to relocate overseas. There's no way we would have made it through this experience without the intense family support we received. My entire intent for moving to teaching, as opposed to another role with my old company, was to transition to teaching overseas. So with that no longer in the cards, I am now actively interviewing for positions with my old company, hoping to enter a new department with the same great mission of helping others. I'm also quite hopeful the position will be remote, allowing us to relocate closer to family and be in a city with more going on. Wish us luck! Real Estate Business Summary As small real estate investors, we haven't really had the appetite to go any deeper than a couple doors at a time. We are down to just our owner occupied duplex currently, and our tenant approached us asking if he could buy his side. With the craziness of the Fall, combined with two under two and looking to move states, we're open to the idea of cashing out and simplifying our lives. We came to an agreement and we're set to close next week, selling off the other side for $175,000 (the whole building was bought in early 2019 for $270,000). I'm expecting to walk out with 60-70k in cash, with the rest wrapped into the loan/paying off the loan. But we'll see…The numbers below do not include proceeds from the sale, but reflect equity from the appraisal of our refi in early 2021 ($300,000). Numbers Total Networth - $215,279 Cash - $13,810 Debt - $0 Total Investments - $127,448 /// 403(B)/tIRA - $76,547 /// Roth IRA - $20,307 /// Taxable - $15,671 /// Pension - $14,923 Business Total =$74,021 (Equity +Cash) ///Equity - $64,253 ///Cash - $9,768 Final thoughts/reflections Putting everything in writing, I'm a little surprised at the lack of movement in our invested assets. Stopping to consider though, I took a 50% paycut for 3 months before transitioning to a new job that paid 20% less than my previous. We also made some strategic money moves this year. We decided to cash out our 457 assets, paying taxes under these historic low rates, having the COVID tax benefits for families cushion the tax blow, and shifting the majority of the 457 assets to taxable for flexibility purposes. A significant amount of that money was added to cash on hand to buy a new family friendly vehicle as well. I also built out a calculator to evaluate insurance options and came to the conclusion that paying for COBRA ($2200/month) for my previous employer's BAMF health insurance would be better than paying for the birth on my new employer's health insurance. Holy hell was that a good decision, given what happened to my spouse. We ended up paying for COBRA for four months instead of two, which also impacted our numbers this year. Everyone thought I was insane or stupid for making this decision, but the numbers checked out when using the billed amounts for our first son, and I'm so happy I thought to do it and stayed the path. Tl;dr, we made middle class income for people with MAs, we changed jobs, life happened (hard) and we're essentially changing back, we're making our way towards FI slow and steady. [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FIRE and climate change: How are you dealing with the cognitive dissonance? Posted: 18 Feb 2022 09:55 AM PST FIRE requires infinite economic growth on a finite planet. We're told from our first spoon-fed lesson of econ 101 that any impediments to growth will be bulldozed out of the way by innovation. Except, our very economic growth is now cooking the planet. We vaguely recognize the issue, yeah, but we have not come to grips with the full reality of what it means. We keep seeing heads of state fly off to climate conferences to make 'commitments' with absolutely nothing behind them. Look at the IPCC reports, and almost all of the scenarios outlined require carbon air capture (a technology decades away from maturity) deployed to a greater extent than we've ever deployed any infrastructure, and backed by near limitless clean energy. In short. The news is not good. The world we know today will soon be irrevocably changed. It's questionable whether human civilization as we know it can survive another century. Just about every prominent scientist studying climate change acknowledges this, but puts on a brave face and insists there's still time, but what most don't say is that they're just hoping to salvage as much as possible while we're still able to muster a coordinated response. Now, with that said, I don't believe the world is 'ending'. I don't even think that the worst effects will happen in my lifetime. My question is, what do you think happens to our investments after a couple bad decades, and the business community slowly comes to grips with what's to come? Do you really think investment returns will support you for another 50 years? The future is unknowable, but the scale of the problem is undeniable. I can only look at this issue for so long until I simply can't bare to think of it anymore, bury my head in the sand, and tell myself everything will be ok. Has anyone here undertaken major life changes to try and prepare for this? I'm not talking about abandoning all rationality and becoming a crazy prepper in the woods waiting, but short of that? Has climate change made you reconsider where you'll live in retirement? Have you taken up homesteading or tried to organize a more resilient community? What's your 'plan b' if returns don't support your retirement? edit: Ok, perhaps FIRE does not require infinite economic growth, but FIRE but I think FIRE would prove very difficult during a period of low returns and high inflation. I think that could easily come about if the market fundamentally missprices the risks of climate change, and we have higher inflation. If you want to see what such a period looks like, go plug the mid 1960's or 1910's into a retirement calculator. Now consider, would climate change be a better or worse scenario than those start points? [link] [comments] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Daily FI discussion thread - Friday, February 18, 2022 Posted: 18 Feb 2022 02:02 AM PST 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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weekly FI Frugal Friday thread - February 18, 2022 Posted: 18 Feb 2022 02:00 AM PST 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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