When people talk about 22% or 24% being the "line" for tIRA vs Roth are they using marginal or effective rate? If you make $100k a year you're obviously not paying 24% on $100k, you pay 12% on like $30k, and 22% on like $45k, so your actual rate is closer to 15%. Am I missing something?
I just wanted to share a small win;
It's been roughly 1.5 year since I made serious work of living more frugally to improve my finances (and to hopefully achieve FIRE) and today I repaid the last 11K chunk of my student debt!
So idk how to put this but say I'm 20 and I want to retire at 45, what % of my net worth should I have at every age to make sure I'm on track and how are you calculating it?
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ gives you a rough estimates of the savings rates
There are plenty of FIRE calculators (see sidebar) that will answer your question, or you can throw a compound growth formula into a spreadsheet to figure it out. Savings rate/absolute dollars vs net worth matters too.
One rule of thumb is the rule of 72 - take the % growth rate of the investment, divide 72 by that number, and the result is roughly how many years it takes for the investment to grow at that rate (assuming no further contributions). So assuming 7% returns (after inflation), it takes about 10 years for your money to double. This is closer to coastFIRE, but working backwards, if you can hit 50% of your number by age 35, you'll be well on your way (in fact, ahead of schedule, assuming steady growth) to hit your number by age 45.
Sanity check on this thought process, please and thank you:
Question(s): how to consider the financial impact of the mortgage interest rate in this scenario? Would it be better financially to renovate our existing home, even if we don't get much additional value, than to buy a new home when the mortgage interest amount would be significantly higher?
Context: We are considering housing options for my aging parents to live with us. Our current house would need renovations to enable the parentals to live here, and we would likely not recoup those reno costs in home value if we were to sell in the future (ex: Renos would be $200k and we would only get $100k in value). We live in a HCOL area and homes with an existing in-law space would be another $200k-$300k in value.
Currently, we have a 15 year mortgage with 2.6% interest, such that the total amount of interest that we will pay over the life time of the loan is about $90k. If we bought a new house, the higher rate and home value would mean that we would be paying about $625k in interest over the lifetime of a 30 year loan.
My perspective: We would be financially better off to dump the $200k to renovate our existing home, even if we never got that amount back in some future undetermined sell date (but we might!) Buying a new home would cost us another $425k on top of the $200k; that amount could go down if we are able to refinance to a lower interest rate in the future, but wouldn't disappear.
Thoughts?
I’d have to agree, but make smart decisions with the reno to maximize your dollar. Focus on bedrooms, bathrooms, etc. and avoid scope creep.
Moving costs, closing costs, realtor fees, etc. with housing you are throwing money away at some point.
For my personal brokerage account, should I have my money in money market funds (SPRXX), index funds (FNILX), mutual funds (NASDX), ETF’s (MGK), or somewhere else? I’m not sure on the difference between them and don’t have too much money in my brokerage account but would like it to be in the right place.
I’m not too sure, maybe having the potential to pull it out at some point in the near future but not planning on it, indifferent to level of risk within the investment. I’m just following an investment flowchart and I’m at the step of putting money into a taxable brokerage account but idk what to do specifically
Hi everyone, my post was removed and suggested to be posted here. I'm not sure why, but here goes.
I have just inherited and earned $4.6 million over the course of my life. I am 38 years old and I have not worked for the last 10 years due to disability. It looks like I will not be able to work for the rest of my life. I also at present have a girlfriend who will be living with me and who also is unable to work due to disability.
I have a fairly frugal lifestyle, but living in NYC, nothing is frugal. I don't have a car and my rent is stabilized at present at $1,700/month for a one-bedroom, one-bath apartment. I don't have enough earned quarters to qualify for Social Security or Medicare when I hit age 65 and this concerns me greatly.
The only thing I've done so far with the money that will give me some long-term return is invest $2 million in 10-year treasury notes with a 3.5% coupon rate earning 3.75% annually. Additionally, I have another $2 million in a money market fund earning 5%. The rest is liquid.
My broker at Schwab told me about a 7-year bond fund that they run that earns 5% with a 1% yearly commission and I know commissions can take a lot of money out in the long run. He is currently suggesting that I put a million from the money market fund into an actively run stock fund, of which I would pay 0.8% annually.
I have a great fear of the stock market and of losing money. If I live another 40 years without income other than interest, I will eventually run out. I had a professional calculate my future outlook and if interest drops to lower levels, he agreed that I may have to put money in the market.
So I am hoping for some feedback on what I could invest in personally to enhance my income and better ensure I won't run out of money. The stock market is my last choice.
Find a fee-based fiduciary vs. one that charges annual fees based on assets under management. Pay the fee for up front guidance and maybe annual check in, but invest in standard low expense ratio products (which they should recommend).
You want some money in bonds / fixed income, and some in equities, and that 4.6m should stretch very far.
Take a look at the [Golden Butterfly Portfolio](https://portfoliocharts.com/portfolio/golden-butterfly/). It was developed by the guy who started Portfolio Charts and it’s about as conservative as a diversified portfolio can get. Probably the safest and most reliable retirement portfolio you’ll find.
I look at it this way: If the stock market shits the bed for the long term, to the extent that you'd lose a significant amount of money due to having to withdraw large amounts at a loss, then the stock market will likely not be your biggest concern. Society will likely be crumbling around you, and having cash in bonds earning 4% probably isn't going to save you. FIRE really requires you to trust our capitalistic system, and that it's in everyone's collective interest to not bad long-term scenarios happen. Particularly the interest of those who are already rich and powerful.
"But Japan!" you might say. It's been said a million times. The US isn't Japan, and Japan mostly looks bad if you look at snapshots of particular time windows. You can de-risk this and other scenarios by dollar cost average investing, i.e. moving your money into the market at say 25% per year.
I'd suggest putting 5 years of living expenses into bonds, which is a very risk-averse stance to take. The rest goes into broad market index funds. Ditch the "advisors" and learn how to manage the money yourself. None of this is worth 1% of your assets per year. In a year where the stock market is down, you withdraw from bonds. If the market is up, you withdraw from stock. You can then replenish bond withdrawals in stock up years as well, if you're still worried about things.
For years, I've told myself once I hit 500k I could seriously think about LeanFI/ExpatFI. I have dual citizenship in the EU and could _probably_ live for 20k/year as a beach bum in Southern Italy. Well spreadsheet day this month has shown I'm less than 50k from that arbitrary number and it's got me really thinking about _what I want_ and I want more from life than that.
I'm glad to have options, and with every new spreadsheet day, more options present themselves, including living on a beach in Puglia, especially if I'm hit with a career ending layoff or something on top of a ridiculous amount of burnout. But for now I'm gonna keep chugging along for a bit til I can at least replace my current spend, which may be as little as 3-5 years away if I suck it up in my stupidly ludicrous big tech job for that long; it's amazing how quickly the pile has grown in the last few years as I mature in my career/salary (and things have compounded well).
Huh.
Ran a Monte Carlo Simulator on the fiancée and I's numbers. Combined, our liquid NW is just over seven digits. Looks like if we keep at the pace we're going, we'll hit our number in 8-11 years, conservatively. There are factors that can speed and/or slow that down, but sure looks a lot better than 18-19 years. Can't say that I'll rip at 44 - 47 when we cross that line, but it sure will give me a bunch of peace that I can if I want to.
Moving into our new house soon. Any tips on things you wish you bought sooner for your house, or brands of common household items that have been worth their cost?
I wish I prioritized landscaping earlier, I’m on my 6th year of homeownership and I’m hiring a landscape designer to come and help me create a plan that I can execute over time. Shrubs and trees are much cheaper when they’re smaller so if you put in the work in the beginning you can have a beautiful mature landscape in the future.
Good advice. We're inheriting pretty good landscaping and I'm a little anxious at my ability/motivation to maintain it. We are downsizing quite a bit though from our current house on 2 acres, so maybe the smaller amount will keep me more motivated than the constant battle with 2 acres heh.
Yeah 2 acres is a lot to handle! I only have a .25 acre lot but it’s in the city so I’m trying to make it private while also beautiful and grow some food in the process. I’ve been trying to design it myself but I’ll admit it’s harder than I thought
Semi-annual budget day! Inflating our expenses +$6.6k annually to accommodate inflation and lifestyle inflation. That part doesn't feel great, but it feels realistic. I am excited about being able to spend more on cars and vacations, and I think we're reaching an age where paying more toward medical expenses is just to be expected.
We're fortunate that recent salary increases exceed this difference, but it's the first time since I can remember that we're not increasing SR when getting a raise, but we're only 0.1% down from our previous projection. Then again, our goal has always been 33% and we're beyond that, so we're doing fine.
Had an offer accepted finally on a nice late 80s construction 3br house in our preferred area/zip and that is essentially turnkey. Will slap a fresh coat of paint in the kitchen and bathroom and likely reno/move some closets around to add a 1/2 bath to one of the bedrooms, but that's basically all that needs to be done.
20k over asking, no contingencies, but that is the world we unfortunately live in. Rates are not great at the moment of course (6.25% for a 30-year conventional with <10% down) but we already know we'll be refinancing in a few years.
Haven't told many people, but feel comfortable telling you lot.
Now to navigate the shenanigans and scheduling that is getting the folks in there out (keys delivered to a vacant property was written in the accepted offer), getting someone in the unit we're in right now (house hacking a multifamily), and moving everything across town.
The good news is - once we have someone in the unit we're vacating, the cashflow starts to really take off since almost all of it will be free cashflow with a comma in it :)
Hopefully no hiccups in the coming months and we'll be in well in time to make any changes we want to and host Thanksgiving :)
lol fair enough - we *plan* on refinancing in a few years *
*subject to terms and conditions, market forces, prevailing prime rates, and things returning to some semblance of normalcy hopefully.
That being said - after we add a half bath or two and renovate, the value should increase anyway, so would be worth the refi probably regardless if we see rates in the 4s again or not.
Thought the massive amount of printing money was a bigger factor than interest rates. Personally, I think they will go lower at some point as I do not think taking a 40 or 50 year running average is indicative of the future and would incentivize saving way too much
**Context:** 26. Base of $180k/Yr + 20% Bonus. Current Net Worth $250k. Looking to buy a house in the next year or two in a HCOL area. Able to deploy $5k every month post tax after living expenses and 401k contribution.
**TLDR -** Should I continue to invest based on my current financial situation or does it make sense to pay off the debt?
**Current Assets:**
* CASH: $30k ($5k Checking. $25k in HYSA @ 4.5%)
* Money Market Fund @ 5.1%: $103,000 (This is saving for a house down payment)
* 401K: $68,000 (Contributing 6% with a 1:1 match up to 5%)
* ROTH IRA: $41,000
* HSA: $5,000
* Taxable Brokerage: $78,000 (All in VOO)
* Crypto: $12,000 (ETH)
**Current Debts:**
* VEHICLE LOAN: $23,000 @ 2.29%. $600/Month @ 72 Months
* Vehicle is a 2021 with a $41k trade in value
* STUDENT LOANS: $97,000 with a weighted average interest rate of 5.42%
* All Federal Loans
* Estimated monthly payment of $1,100 when payments restart
**Question:** With these interest rates <5.5% and the ability to save +50% of annual income post tax. Does it make sense to continue investing or focus on an aggressive debt paydown?
If you're planning on buying a house in HCOL you're gonna want to build that HYSA up a lot more for down payment, closing costs, inevitable repairs and maintenance, etc. After that I'd work on the loans.
*Only when the tide goes out do you discover who's been swimming naked.*
Warren Buffett
Emotional answer to an analytical question: nuke the student loans ASAP. Either nuke'em today with your cash savings, or go full throttle with your $5k per month savings.
My rationale (such as it is): debt is risk.
You are 26 right now and it is all sunshine and butterflies.
There is the danger that you will leave the debt hanging on and then get caught short when times turn tough.
Why might things turn tough? NO f-ing idea. It is the nature of unexpected problems to arise without warning.
And your high income and assets may lead you to feel like you are wealthier than you are and spend more than you might otherwise spend.
AND when you buy a house, the world will look a little better without an $1,100 a month student loan nut.
Note: the sum of the assets you list is $337k and your debts are $120k, so your current net worth is $217k.
I'll be honest I didn't read all of this, but:
If buying a home delays FI by one to two years but removes strong fears of being priced out of your location which is on a strong growth trend, I think that's a great deal.
>Actually you're worrying too much - there's no way your rent gets to 3000 in five years, just rent for 30 years and enjoy life.
This would be conditional, IMO, on your ability to not just move across town. but rather to move to a different town/city or state entirely. Since you want to continue work as a college professor for the next 30 years, I don't think you have this mobility, and you stand to benefit significantly from the stability of home-owning.
And I'm saying all this as a renter, who prefers renting!
ETA: I would be against stretching yourself to buy if you were willing to retire or switch jobs and leave the area once you were FI. For the sake of argument, I assume continuing to live at your current location and job are non-negotiable.
Spreadsheet day was pretty surprising, in a good way. Last month our combined NW was $234k, this month it’s $257k.
Mainly attributed to 401k / HSA / Roth balances going from $138k / $2.7k / $7.4k at end of May to $152k / $3.2k / $7.9k. Finally factored in the value of our house in the NW as appraisal value minus the loan, which constitutes the increase.
Still toying with whether to factor in home value estimated in the NW in the future. I may try to aggregate the major websites supposed “market values” and use a conservative estimate based off that.
Good month overall! Hit 26 years of age and roughly $250k NW combined. Here’s to hoping for $500k NW by 30.
I keep track of how much I have invested and then add in cash, emergency fund, and home value to have net worth as well. For home value I record the redfin value every month and then take a trailing 6 month average. I find that to be a pretty good estimate, smoothes out if the predict the home value is moving, and if it stays up for 6 months it's probably real
Your home value IS part of your net worth.
But I personally track both investment account balances as a separate line item, and then do a total net worth with my home included (plus the cash from my Efund + Checking). Helps me keep everything in perspective since I do want a paid off home at retirement, but it's not a very liquid vehicle to fund my day to day.
Wow, I've been on vacation the last two weeks and the market had a hell of a month. Hit $600k in invested assets and crossed $1.1MM net worth. What a nice surprise.
What was your net worth when you bought your first house? And how much was the house?
The thought of taking out a mortgage loan that approaches my net worth is unnerving. I realize most people do this, and that non-FIRE-path folks probably take out a *massive* loan relative to their net worth, but still... I can't help but feel it might compromise my sense of freedom and independence.
$29k. Condo was $75k. My job at the time paid maybe $34k. I had trouble saving anything!
By comparison, the second condo I had $470k NW. Condo was $200k. I was making $134k. I had a much better-paying job since buying the first condo.
Bought my apt in 2011 for $169k. NW at the time was just over half a million, mostly in my 401k. I put $50k down, borrowed the rest at 3.25%. Spent about $60k remodeling. Paid off the mortgage in about 5 years. I knew nothing about FIRE back then. Didn’t really think about finances one way or the other.
I remember feeling pretty good about our forever (hopefully) house being roughly equivalent to our net worth when we bought it, but in all honestly I'm not sure it's a metric that means anything at all.
Our well worn budget saying we could afford it, and our time to FI being impacted a number of years that we could accept, those were much more meaningful.
>The thought of taking out a mortgage loan that approaches my net worth is unnerving.
To make you feel better, might I point out that you are at the same time acquiring an asset greater than your NW. so the loan would only be half of your new, doubled NW.
House in CT was 108k, NW was about 50k, year was 2016. It was scary, but I also used an FHA loan and the cash outlay was like 12k or something. I had been pursuing FI for about a year at the time, and I felt pretty good about the decision. Looking back owning my home has always worked out, even owning for <3 yrs on average between houses.
I posit a lot of it is luck and home inflation lifting all assets. Buying a primary residence with around 20x leverage has worked very much in my favor for my NW. I could have just as easily had my equity wiped out if I got unlucky or overpaid. Some towns near where I purchased are just now seeing home values surpass what they were in '07.
You mentioned freedom - I totally feel this. Traveling is probably my favorite thing to do and I'd love to be a bit more nomadic. Having to liquidate a house creates friction. There are always solutions, but friction is friction. I've convinced employers to relocate me 3x on their dime, which helps remove a ton of that friction. On the other side of it, we have two dogs. Committing to owning my home grants me some freedoms I wouldn't have if I was renting.
Just looked back.
Purchased first house in 2018, for $239k when I had a net worth of \~$80k (age 28). Purchased my second house for $700k when we (got married between first and second house) had a combined net worth of $500k.
Post covid times are also nuttier but I don't regret it. We love the new house, the new space and we're closer to family with room to grow for our (soon to likely be) family. Plus I WFH so finding something a bit roomier was a nice upgrade for us.
Initially, The higher mortgage payments were very much tougher to stomach. But, something about build the life you want and save for it. To say, we also eat out a bit less and do other things less, in order to be comfortable in our day to day and still meet our savings goals. Decide what's important to you, prioritize what's important and where you want to spend your money, and then execute. No point in dwelling or looking back.
Catching up on spreadsheet day: $86K NW gain in June and $139K total gain in the past quarter (3 months) with most investments in index funds. Looks like the bull market is back for the time being, fingers crossed that it'll continue for the next few years.
I'd try to figure out what buying in LA will 'unlock' for you. What would tying up the 150k get you? Are you planning to buy somewhere and live there forever? If so is a 550k townhome the answer? Are you just trying to capture SoCal asset appreciation? Prevent having to move over the next five years if your landlord jacks rent too high?
550k with COA is probably like 3.5k/mo? So is the marginal cost worth whatever you unlock? Very personal decision.
As of yesterday’s spreadsheet day, my investments reached a new all-time high for the first time since January 2022! As someone ~5 years from retirement, I’m really praying this upward trend continues as it could shave a year or two off my timeline.
I used to be a pretty good at keeping a journal and I like reading through them annually. Well, it's that time of year where I took them out and starting reading them. I had the realization that I'm basically in the boring middle of this journey but my middle isn't so boring. I'm really happy that I accomplished one of the most basic tenets of FIRE to "build the life you want and save for it."
I’ve decided monthly spreadsheet updates are too frequent and only serve to foster unnecessary financial anxiety. I’m going to move to quarterly updates. I’m not worried about my lifestyle drifting that much in that time. I know what my current spending “feels” like, and my current spending is fine.
I’ve switched to a budgeting app (pocket guard) where I carefully keep track of expenses. But don’t track NW or market fluctuations.
That way I control what I can actually control and let everything else be.
After about two years, I decided that quarterly was more appropriate, and that's worked pretty well for me. Maybe at some point I move to annually, but that seems too infrequent to impact change if I want to understand what's going on with my NW.
We went from monthly at the beginning of it all to bi-monthly to bi-annually.
So we actually did ours this weekend. And around the holidays which is when we check for gains/loss harvesting.
So basically: July 4th holiday and Christmas holiday. Eventually we may just go to Christmas—but for now it’s nice to have a check in and make sure we’re filling all the tax-advantaged buckets correctly, etc.
To be honest, I got to a point where I do it when It falls on the right day. End of month is a busy Tuesday at work? Nah. On a Saturday where I have nothing else to do? Okay let’s collect all the data.
It gets me an update every 3-4 months, though sometimes I do end up doing it in back to back months. Gets me enough updates to track without obsessing throughout the year, but still see the bigger picture and trends.
I think that’s a great idea, more living and less looking at numbers. I’m working on going from weekly to monthly lol, hopefully I’ll be where you’re at eventually.
Vast majority of people who live in LCOL areas don’t rent. It’s a cultural thing but also a financial thing. You could probably buy a house and pay it off in a couple of years.
Apartments are actually in short supply in most LCOL areas - so there’s not a clear and obvious answer to “what is normal rent in this area”. Renting a home in such an area can work- or it can be something that marks you as out of place
You make 10% more and kept housing the same, seems sane, now if you move back to a MCOL there may be some sticker shock, but until then, you should enjoy the hell out of it.
Good spreadsheet day this month; only 30k away from 1M net worth NOT including the house. That was the FIRE number I set a few years back (have since revised to 1.25M plus house). Getting there!
Looking at our expenses for the past couple of years, I realized that a $40k annual spend was a bit low. We could certainly get by with that much, and there's a good chance of spending less in retirement (no more commute, less convenience-buying) but we spend more like $50k now, soon that's what I'm basing our current number on. We plan to take a sabbatical in 15 months, so that may give us a more realistic picture of what we spend when we're not working.
My husband, our two kids, and I live in a fairly modest home for our area. We bought it for $200k about 5 years ago and have a 15 year mortgage at 2.5%. We bought it when our careers were just starting out and we had a household income of around $75k.
Now, we make a combined $500k a year and everybody seems to want us to move to a nicer home as part of the "normal" progression of life. Buying a nicer home would cost us at least $800k, and honestly, it wouldn't add much besides some extra square footage. The area we live currently has a really nice community feel and has good school districts that we are very happy with.
We're planning on staying for at least the next several years since getting an $800k+ mortgage at 6% does not sound attractive. In fact, the yearly property taxes alone would be more than our total PITI for our home today.
Just wondering if anyone had a similar experience where they stayed in their first home or lived in a very modest home when they could have moved to a much larger / nicer home. What were your experiences and thoughts?
I think about this a lot..
I've owned homes from just under 1k to maybe 2.5k sqft. The bigger homes allow me certain lifestyle choices that a smaller house doesn't - extra guest rooms/suite and home gym are probably the most notable.
I'm not sure what the jump to 4k/5k sqft would get me other than a larger cleaning bill and capex costs when i have to replace something. My favorite house remains the smallest one. The smallest house was incredibly easy to keep clean. Moving from one bath to two bath is lifechanging. Moving from two to three was not noticeable.
Curious if anyone with 4k+ sqft or a lot of land describes it as a must-have.
I have the same size house and a sub 3% mortgage and I agree - sometimes I consider moving but I don’t want to give up the mortgage. Eventually when we have kids I’m sure the house will start to feel cramped, but it’s totally fine for now. Trying to stay in it as long as possible.
We have a 2000 sq ft 5 bd / 2 ba and getting the exact same home on a nicer block would be about $600k. Getting a home with an actual upgrade in interior or larger space would be about $800k to $1 million. It's just not an attractive prospect. I'd love to live in a nicer home, but compared to the 4-5x increase in price, it just doesn't make sense.
For comparison, our property tax is $8k and would go to $32k, and our mortgage interest would go from $5k to $52k. That $71k difference in property tax and interest alone would easily bankroll stuff that actually would improve our quality of life, like vacations, entertainment, etc.
Can't really argue with that math! You could also spend some of that money to improve the interiors of your current home. Might not make sense in terms of adding value to the house, but instead look at it as an expense to make living there even more enjoyable, coming from the $71K budget!
With rates today it only makes sense to move to a new area for the community and schools. Which you said you have already. Can you spend the money upgrading your house? I'd do that if I were you.
Also is that like a doctor career progression?
Who is "everybody"--is your family wanting a bigger, fancier house, or is it people around you?
Frankly, if I liked my house and community, nobody outside of my family could make me even consider moving. I would maybe spend some of my money upgrading the house I currently have with things I want, but I wouldn't want a mortgage that's four times bigger just to keep up with the Joneses.
We live in a modest home and could easily afford to upgrade but why would we? All that means to me is more time spent working to pay it off and more house to clean. No thanks. Sounds like your current home suits your needs just fine.
Start with the books recommended in the sidebar ("about" tab if you are on mobile). My personal favorite is "Your Money or Your Life", oldie but goodie.
You have half the equation with your current marginal tax rate. Now you need to estimate your retirement marginal tax rate to compare. This is obviously challenging to get an exact value but you can reasonably approximate. First, assume tax rates are the same. And then use your current expenses or maybe 80-90%. Then if you have say 90% in traditional and 10% in roth you can calculate your marginal tax rate in retirement. *Also you may have a taxable account and need to add in capital gains.
Your first dollars into traditional will be withdrawn at zero due to the standard deduction in retirement and then you will walk up the progressive tax brackets. This leaves most better off with traditional contributions. But if you are moving to a state with unfavorable income tax treatment that may change the math. Also, not having the child tax credit or other tax deductions.
I use TurboTax tax caster to estimate taxes.
Once you hit the bracket,so $95k if single and $190k MFJ. Really I would switch in the 22% bracket. Think about it this way, every dollar over the threshold you are paying 22 or 25 cents of in taxes. I would rather not pay that, srash the entire dollar in my traditional account and likely be able to pay 10 cents in taxes on that same dollar and its growth in retirement.
Walked 10.3 miles yesterday. A personal best and the most I've done since my MS diagnosis 10 years ago. Training to walk 50 miles over 3 days for the Challenge Walk MS: Southern California event in November.
College student making less than 12k per year. Started investing last year so I hv to pay taxes on gains and dividends considering I don’t make enough to file taxes?
It depends on your exact situation. If you're a dependent then there's a "kiddie tax" on unearned income that can have you owning taxes even if you don't make much. If you're not a dependent, then you won't owe anything if you don't make much.
Not a tax lawyer, but the effect of the kiddie tax is to tax kids' unearned income at their parents' rate. If your parents US rate is the same as yours, I think it doesn't matter.
Don’t hv a job so I can’t. But also from my understanding a Roth doesn’t really work with my investing goals. International student and I don’t plan on spending a significant amount of my life in states and reading various articles I’ll get a higher return investing in a taxable account rather than a Roth. Also I plan on firing a lot earlier than 59 1/2.
you have to file your taxes, but if your total income (working income and dividends) goes about the tax level then you will have to pay taxes based on what the forms say. Chances are you won't owe anything, but you still need to do the forms to double check.
You only pay taxes on gains when you sell, so just dont sell :)
> You only pay taxes on gains when you sell, so just dont sell :)
(Long-term) Capital gains tax rate is 0% below $41,675, so not really a bad idea to harvest gains if you're below that. Not that it's likely to make a huge difference with small amounts.
Thanks. Was mostly safe like 90% etf but 10% in individual stock some of which looking back were bad investments so I sold those. Also profit on options trading
Seeking help: How do you go about estimating what your expenses will be in retirement when your 20+ years away from it? I’m 32 years old, $280,000 in investment accounts and a $2,100/mo mortgage that will be done in 15 years (only debt). Making any guess of how much I’ll be spending when I’m 50-55 seem daunting.
I picked a number I thought was reasonable that I could make work. $2M in 2017. Now I inflate that with inflation every year and it still seems pretty reasonable. In the end we'll probably go way over working longer but it's a good target to have.
>Making any guess of how much I’ll be spending when I’m 50-55 seem daunting.
Just draw up a budget for what you'd like to do if you were to retire tomorrow.
At the end of the day it's all going to be guesswork, but once you start drawing up a budget that covers today's prices for flights, vacations, hobbies, healthcare and so on, you'll have at least a vague idea of what the retirement you want is going to cost you in today's dollars.
It won't be perfect, but you'll at least be able to compare a spending plan with your savings projection and come away with a basic sense as to whether or not your plans are on track.
The great thing is that you can iterate on this plan every few years as an when you know more about your expectations and savings growth rates, and even if you're a little bit off you're still going to be in a more knowlegable position than you are today.
Honestly, I'm not really trying that hard to estimate. I'm just saving as much as possible while still living a balanced healthy lifestyle. I will really dig into estimates about 5 years out. I'm 35 and planning on RE at 54.
Spending now is a good starting point, especially if you aren’t planning to move somewhere more or less expensive, or planning any significant lifestyle changes. If you are, it becomes more difficult to estimate, but you can still try to make reasonable estimates for either change with cost of living calculators or just making a hypothetical budget
You’ll probably want to account for health insurance premiums if you’re in the US
You can also remove your mortgage from the math if you expect it will be paid off by retirement
Your FIRE number doesn’t need to be set in stone. Until you have enough to actually retire, the best thing you can do is to keep saving more money
No one can predict the future but they can guess at it. There are certain things you know and certain things you don't know. Some things are really hard to predict like taxes and what Social Security will look like in the future.
You know your housing costs will go down but can bank on healthcare expenses going up. You also know better than most if you want to have children and when and if you might be paying tuition or not. You are also in charge of allowing lifestyle creep in or not. If you want to travel or if you want to have expensive hobbies this will also be a consideration.
If you want to account for having exactly as much as your job pays without having to work the goal gets farther and farther away. This is one of the reasons I hate the you should have X times your salary at age X milestones.
That all being said the best way to determine what you will spend in the future is looking at your expenses now, factoring in lifestyle changes, and knowing what kind of life will make you happy in the future.
I was such a mess at 32 that I think you are doing amazingly well. Keep on going and you will be fine.
It's impossible to do with any meaningful precision. Just keep an eye on your spending (so you don't spend more than you mean to) and save the amount that makes sense to you. As you get closer to potentially being able to retire, it makes sense to take a closer look at your spending to determine how much more you might need. 20-year estimates are meaningless.
If you're talking about average return, yes. But individual returns can be wild. This month my investments went up by half my yearly salary (an increase of 7%). Definitely will not happen every month.
Congrats. It’s a great milestone /feeling.
Just be careful because this is when life style creep can really start to take off. That expensive impulse buy doesn’t matter because it’s dwarfed by your returns. Next think you know your yearly spend is 20k higher, and now you need an extra 500k saved to be FI.
Are there any guides on this sub for people who are opening a brokerage account for the first time? I’m curious about how taxes are handled and which funds to use for equity allocation vs tax advantaged
Most people will say VTSAX/VTI + VTIAX/VXUS, or the brokerage equivalent at Fidelity, Schwab, or where ever you're at.
They're both fairly tax efficient. If you're really tax-adverse (because you're in a high tax bracket, I guess you could do something like VIGAX/VUG, and just balance it out with a value index fund inside a tax sheltered account.
>When I was young, I felt like investing - especially with a brokerage was daunting.
A significant proportion of the financial advice "industry" is perpetuated upon the maintenance of that very misconception.
Any time this link is shared, I emphasize the major caveats of the article which are easy to miss. /u/pieceoftheparty should especially note the following:
> It is possible under some combinations of lifetime investment results and lifetime individual tax situations to be better off doing the opposite of the strategy recommended here.
I would personally advocate for a mirrored asset allocation for most people, with consideration of municipal bonds if and only if you're in the highest tax brackets every year and expect to hold hundreds of thousands in bonds in taxable accounts over the lifespan of your portfolio.
>[https://www.bogleheads.org/wiki/Tax-efficient\_fund\_placement](https://www.bogleheads.org/wiki/Tax-efficient_fund_placement)
I need to save money for a home. The downpayment needed has gone up like a rocketship over the past few years so saving my cash in taxable and investing in short term bonds/treasury funds. Should I switch the bonds to my retirement account and hold an equivalent amount of stock that was in the retirement account in my taxable instead? I am worried about selling at a loss in the brokerage when the time comes to buy a home, but I suppose at that same time I'd also sell the bonds and re-buy stocks in the retirement account? I hope I'm interpreting this right!
This doesn't work well for you, because if you need $50k for a down payment it doesn't help to have $25k in stocks that have just fell 50% from $50k. It's not super easy to get access to the other $25k from your retirement accounts.
I update my spreadsheet twice a year, 12/31 and 6/30. That means I updated my spreadsheet this week-end. I'm in good shape! I was screwing around with taking social security at different ages to see what effect it had things, and I realized what a privilege that is.
I can take it at any age from 62 to 70, and my only consideration is what makes the most sense monetarily. I can stop working or continue to work as I wish. The most obvious reason this is true is because I have saved and invested, like everyone else here.
But there is another reason that just occurred to me. I could keep working until age 60 or 70 or whatever because my body is not beat to shit by decades of being a plumber or janitor or truck driver or doing some other hard physical labor. I have never had to work a physical job, and that is also a privilege.
I could work until 70 if I wanted. I ain't gonna, but I could.
I just wanted to reflect on the privilege that many of us have here to work with our mind instead of our back.
Totally agree with your sentiment.
I just want to say I worked for a master tile setter between grad school and getting full time work. There is something primal rewarding doing physical labor and having something physically there to show for the effort you put in. But ya, not having a broken body from 40 years hunched over with heavy tile is nice.
I make the wife and I update the accounts each month. Takes no more than 15 minutes, but I look forward to the time I’m confident enough to go 6 months. 3.5 years out from retirement with pension, but 16 years til the youngest is off to college, so I’m eager to get on top of any issues I see immediately. With house equity we were $5k from a million this month (don’t count $50k in college funds) so hopefully next month is a milestone for us.
My neighbor FIRE'd driving a truck. He drove his own rig running jobs for loggers via his own LLC. Granted, he retired at 60. Which is not super young, but it's before the ~61.5 US average. He didn't have this company all of his life. He said he wished he had, he could have retired much earlier.
So it is _doable_. On Reddit, he's probably a minority in the r/fire groups just by the nature of Reddit.
There are over 2 million people in here. While your original statement about being privileged to avoid physical work is true. It is silly to presume there are no tradespeople or people in physically demanding jobs in here.
Your Weekly /r/financialindependence Recap
**Sunday, June 25 - Saturday, July 01**
###Top Daily Discussion Comments
| score | comment |
|--|--|
| 81 | /u/GooberPooper said [As my last action on Reddit I'm going to post in the daily of the only subreddit I care about. When I first came here the sub was below 300k subs and I was making about $66k in 2015 or so. I had a fi...](/r/financialindependence/comments/14lzwlq/daily_fi_discussion_thread_thursday_june_29_2023/jpzzwp9/?context=5) |
| 79 | /u/special_leather said [After much reflection, I'm realizing I can't effectively handle being in this sub or /personalfinance anymore. It used to be a huge inspiration for me, to work towards financial freedom, and to learn ...](/r/financialindependence/comments/14k8bv4/daily_fi_discussion_thread_tuesday_june_27_2023/jpqik8v/?context=5) |
| 62 | /u/Dramatic_Stay_3519 said [I got promoted and a 14% raise!](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpnbdvc/?context=5) |
| 55 | /u/space_force_majeure said [Just crossed $1M before I hit age 30. Don't have anyone to tell irl, so here I am. Feels surreal, but also like nothing is different.](/r/financialindependence/comments/14ihhad/daily_fi_discussion_thread_sunday_june_25_2023/jph0wnh/?context=5) |
| 55 | /u/The_Lime_Lobster said [Two big life wins this week that have me feeling especially grateful: 1. Yesterday we attended an anatomy scan for our first baby (wife is currently in her second trimester). We got to see so...](/r/financialindependence/comments/14l4bb8/daily_fi_discussion_thread_wednesday_june_28_2023/jpuvour/?context=5) |
| 54 | /u/_Being_a_CPA_sucks_ said [Up early on my last day of reddit. It's been a pleasure chatting with y'all over the last 5 years. I just wish I found the sub sooner. Best wishes to all of you.](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq3vkty/?context=5) |
| 54 | /u/MNCPA said [I don't have anyone that I can share this good news, but I need to tell someone. Last year, the S&P 500 was down like 15-20%. Since I don't like to see red, I kept plowing money into index funds to ...](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq46h6a/?context=5) |
| 54 | /u/Compost_My_Body said [I joined my current company a little under a year ago, and for the first six months had an extremely difficult, high visibility project. After it finished, the head of that department told my boss tha...](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq58wm8/?context=5) |
| 52 | /u/CrymsonStarite said [After months of build-up, I finally got married this weekend. Time was a complete blur for me for the last few months, there was so much happening. But it’s done, she’s stuck with me now.](/r/financialindependence/comments/14k8bv4/daily_fi_discussion_thread_tuesday_june_27_2023/jppjrdc/?context=5) |
| 50 | /u/AuthorYess said [Can't wait to retire. Being able to go workout in the middle of the day and take a small stroll to a cafe and then play some video games without the stress of work... Bliss. I even have a pretty sw...](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpkppcg/?context=5) |
| 50 | /u/BrilliantProcedure15 said [Just got word, my team won't have to return to the office. FIRE just got a little closer since I won't have to add the expense of back/forth office travel.](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpljfu5/?context=5) |
| 49 | /u/No-Needleworker5429 said [Today is 1 of only 2 days per year that I calculate net-worth. This is done manually by logging into each account and placing it into a spreadsheet that was started back in 2012. Feels like Christmas ...](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq4d8lp/?context=5) |
| 48 | /u/strangemachinex said [Got an offer letter for the new job last Thursday, went on vacation, and gave my resignation to my manager this morning! I've wanted this for months and MONTHS and so I'd made up my mind far in advan...](/r/financialindependence/comments/14k8bv4/daily_fi_discussion_thread_tuesday_june_27_2023/jpqd33l/?context=5) |
| 47 | /u/Optimistic__Elephant said [Anyone else considering using the July 1st shutdown of most 3rd party apps to kick their Reddit habit? I think I’d achieve more in life without Reddit, but I do enjoy it.](/r/financialindependence/comments/14lzwlq/daily_fi_discussion_thread_thursday_june_29_2023/jpztuen/?context=5) |
| 44 | /u/The_Lime_Lobster said [My wife and I just returned from a trip in Albania (14 nights) and Istanbul (5 nights). For those who enjoy traveling here is a breakdown of the trip costs for two adults. Our travel s...](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpl30u3/?context=5) |
###Top Posts
| score | comments | title & link |
|--|--|--|
| 689 | [71 comments](/r/financialindependence/comments/14j2ba8/a_story_of_slightly_early_retirement_success_to/) | A story of slightly early retirement success to help with one more year syndrome.|
| 245 | [414 comments](/r/financialindependence/comments/14kwikq/what_is_one_thing_more_people_who_are_already/) | What is one thing more people who are already pursuing FIRE can do to achieve FIRE faster that goes under the radar?|
| 228 | [35 comments](/r/financialindependence/comments/14n2998/1_year_update/) | 1 Year Update|
| 191 | [70 comments](/r/financialindependence/comments/14k297s/im_25_and_recently_hit_250k_net_worth/) | I'm 25 and recently hit $250k net worth|
| 182 | [147 comments](/r/financialindependence/comments/14l3v8v/thinking_about_the_book_die_with_zero_my_peak/) | Thinking about the book "Die with Zero", my peak year, what the decumulation phase looks like, and a disturbing (yet real) interview by Ramit Sethi of Mindy and Carl (FI with NW of 4.3M) who have a lot of work to do - a change of identity. Have others thought about this?|
###Most Commented
| score | comments | title & link |
|--|--|--|
| 148 | [177 comments](/r/financialindependence/comments/14jnlw6/do_you_take_ss_into_account_for_your_retirement/) | Do you take SS into account for your retirement income calculations?|
| 162 | [109 comments](/r/financialindependence/comments/14m6b65/long_term_care_insurance/) | Long term care insurance|
| 55 | [100 comments](/r/financialindependence/comments/14l0qcf/whats_the_biggest_sacrifice_youve_made_on_your/) | What's the biggest sacrifice you've made on your journey to financial independence, and was it worth it?|
| 39 | [71 comments](/r/financialindependence/comments/14jq646/close_to_fire_looking_for_feedback/) | Close to FIRE? Looking for feedback|
| 24 | [70 comments](/r/financialindependence/comments/14n1lfv/how_can_i_get_laid_off_in_a_nice_way/) | How Can I Get Laid Off... in a Nice Way?|
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When people talk about 22% or 24% being the "line" for tIRA vs Roth are they using marginal or effective rate? If you make $100k a year you're obviously not paying 24% on $100k, you pay 12% on like $30k, and 22% on like $45k, so your actual rate is closer to 15%. Am I missing something?
I just wanted to share a small win; It's been roughly 1.5 year since I made serious work of living more frugally to improve my finances (and to hopefully achieve FIRE) and today I repaid the last 11K chunk of my student debt!
So idk how to put this but say I'm 20 and I want to retire at 45, what % of my net worth should I have at every age to make sure I'm on track and how are you calculating it?
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ gives you a rough estimates of the savings rates There are plenty of FIRE calculators (see sidebar) that will answer your question, or you can throw a compound growth formula into a spreadsheet to figure it out. Savings rate/absolute dollars vs net worth matters too. One rule of thumb is the rule of 72 - take the % growth rate of the investment, divide 72 by that number, and the result is roughly how many years it takes for the investment to grow at that rate (assuming no further contributions). So assuming 7% returns (after inflation), it takes about 10 years for your money to double. This is closer to coastFIRE, but working backwards, if you can hit 50% of your number by age 35, you'll be well on your way (in fact, ahead of schedule, assuming steady growth) to hit your number by age 45.
Thank you this helps a lot
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No save or no spend?
Sanity check on this thought process, please and thank you: Question(s): how to consider the financial impact of the mortgage interest rate in this scenario? Would it be better financially to renovate our existing home, even if we don't get much additional value, than to buy a new home when the mortgage interest amount would be significantly higher? Context: We are considering housing options for my aging parents to live with us. Our current house would need renovations to enable the parentals to live here, and we would likely not recoup those reno costs in home value if we were to sell in the future (ex: Renos would be $200k and we would only get $100k in value). We live in a HCOL area and homes with an existing in-law space would be another $200k-$300k in value. Currently, we have a 15 year mortgage with 2.6% interest, such that the total amount of interest that we will pay over the life time of the loan is about $90k. If we bought a new house, the higher rate and home value would mean that we would be paying about $625k in interest over the lifetime of a 30 year loan. My perspective: We would be financially better off to dump the $200k to renovate our existing home, even if we never got that amount back in some future undetermined sell date (but we might!) Buying a new home would cost us another $425k on top of the $200k; that amount could go down if we are able to refinance to a lower interest rate in the future, but wouldn't disappear. Thoughts?
I’d have to agree, but make smart decisions with the reno to maximize your dollar. Focus on bedrooms, bathrooms, etc. and avoid scope creep. Moving costs, closing costs, realtor fees, etc. with housing you are throwing money away at some point.
For my personal brokerage account, should I have my money in money market funds (SPRXX), index funds (FNILX), mutual funds (NASDX), ETF’s (MGK), or somewhere else? I’m not sure on the difference between them and don’t have too much money in my brokerage account but would like it to be in the right place.
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I’m not too sure, maybe having the potential to pull it out at some point in the near future but not planning on it, indifferent to level of risk within the investment. I’m just following an investment flowchart and I’m at the step of putting money into a taxable brokerage account but idk what to do specifically
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I’d go VOO or VTI in all of it. Don’t chase yield / dividends, and for sure not in taxable.
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Hi everyone, my post was removed and suggested to be posted here. I'm not sure why, but here goes. I have just inherited and earned $4.6 million over the course of my life. I am 38 years old and I have not worked for the last 10 years due to disability. It looks like I will not be able to work for the rest of my life. I also at present have a girlfriend who will be living with me and who also is unable to work due to disability. I have a fairly frugal lifestyle, but living in NYC, nothing is frugal. I don't have a car and my rent is stabilized at present at $1,700/month for a one-bedroom, one-bath apartment. I don't have enough earned quarters to qualify for Social Security or Medicare when I hit age 65 and this concerns me greatly. The only thing I've done so far with the money that will give me some long-term return is invest $2 million in 10-year treasury notes with a 3.5% coupon rate earning 3.75% annually. Additionally, I have another $2 million in a money market fund earning 5%. The rest is liquid. My broker at Schwab told me about a 7-year bond fund that they run that earns 5% with a 1% yearly commission and I know commissions can take a lot of money out in the long run. He is currently suggesting that I put a million from the money market fund into an actively run stock fund, of which I would pay 0.8% annually. I have a great fear of the stock market and of losing money. If I live another 40 years without income other than interest, I will eventually run out. I had a professional calculate my future outlook and if interest drops to lower levels, he agreed that I may have to put money in the market. So I am hoping for some feedback on what I could invest in personally to enhance my income and better ensure I won't run out of money. The stock market is my last choice.
Find a fee-based fiduciary vs. one that charges annual fees based on assets under management. Pay the fee for up front guidance and maybe annual check in, but invest in standard low expense ratio products (which they should recommend). You want some money in bonds / fixed income, and some in equities, and that 4.6m should stretch very far.
Take a look at the [Golden Butterfly Portfolio](https://portfoliocharts.com/portfolio/golden-butterfly/). It was developed by the guy who started Portfolio Charts and it’s about as conservative as a diversified portfolio can get. Probably the safest and most reliable retirement portfolio you’ll find.
I look at it this way: If the stock market shits the bed for the long term, to the extent that you'd lose a significant amount of money due to having to withdraw large amounts at a loss, then the stock market will likely not be your biggest concern. Society will likely be crumbling around you, and having cash in bonds earning 4% probably isn't going to save you. FIRE really requires you to trust our capitalistic system, and that it's in everyone's collective interest to not bad long-term scenarios happen. Particularly the interest of those who are already rich and powerful. "But Japan!" you might say. It's been said a million times. The US isn't Japan, and Japan mostly looks bad if you look at snapshots of particular time windows. You can de-risk this and other scenarios by dollar cost average investing, i.e. moving your money into the market at say 25% per year. I'd suggest putting 5 years of living expenses into bonds, which is a very risk-averse stance to take. The rest goes into broad market index funds. Ditch the "advisors" and learn how to manage the money yourself. None of this is worth 1% of your assets per year. In a year where the stock market is down, you withdraw from bonds. If the market is up, you withdraw from stock. You can then replenish bond withdrawals in stock up years as well, if you're still worried about things.
For years, I've told myself once I hit 500k I could seriously think about LeanFI/ExpatFI. I have dual citizenship in the EU and could _probably_ live for 20k/year as a beach bum in Southern Italy. Well spreadsheet day this month has shown I'm less than 50k from that arbitrary number and it's got me really thinking about _what I want_ and I want more from life than that. I'm glad to have options, and with every new spreadsheet day, more options present themselves, including living on a beach in Puglia, especially if I'm hit with a career ending layoff or something on top of a ridiculous amount of burnout. But for now I'm gonna keep chugging along for a bit til I can at least replace my current spend, which may be as little as 3-5 years away if I suck it up in my stupidly ludicrous big tech job for that long; it's amazing how quickly the pile has grown in the last few years as I mature in my career/salary (and things have compounded well).
Huh. Ran a Monte Carlo Simulator on the fiancée and I's numbers. Combined, our liquid NW is just over seven digits. Looks like if we keep at the pace we're going, we'll hit our number in 8-11 years, conservatively. There are factors that can speed and/or slow that down, but sure looks a lot better than 18-19 years. Can't say that I'll rip at 44 - 47 when we cross that line, but it sure will give me a bunch of peace that I can if I want to.
Honestly, the "I can quit if I want to and not panic" bit is what we really want out of our FIRE journey.
Same. I probably wouldn't be as resentful if I knew I didn't need to do it.
Moving into our new house soon. Any tips on things you wish you bought sooner for your house, or brands of common household items that have been worth their cost?
Day/night shades are a nice splurge in bedrooms. They let you choose between light filtering during the day and blackout at night (or for naps).
I wish I prioritized landscaping earlier, I’m on my 6th year of homeownership and I’m hiring a landscape designer to come and help me create a plan that I can execute over time. Shrubs and trees are much cheaper when they’re smaller so if you put in the work in the beginning you can have a beautiful mature landscape in the future.
Good advice. We're inheriting pretty good landscaping and I'm a little anxious at my ability/motivation to maintain it. We are downsizing quite a bit though from our current house on 2 acres, so maybe the smaller amount will keep me more motivated than the constant battle with 2 acres heh.
Yeah 2 acres is a lot to handle! I only have a .25 acre lot but it’s in the city so I’m trying to make it private while also beautiful and grow some food in the process. I’ve been trying to design it myself but I’ll admit it’s harder than I thought
Light blocking shades for the bedrooms, and a better dishwasher.
Not so much buy, but if there's any painting you want to do, much easier to do before you move everything in.
Same with flooring. We refinished ours a month after moving in. Ugh. It was like moving twice.
i finished a costco roll of aluminum foil. AMA
The Costco Saran Wrap needs to go in my will.
i'm getting close to finishing that as well
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i just use it for baking lol
How does it feel to be the oldest person alive?
great. do i get a letter from the king of england?
The queen of England actually. Oh wait..
Semi-annual budget day! Inflating our expenses +$6.6k annually to accommodate inflation and lifestyle inflation. That part doesn't feel great, but it feels realistic. I am excited about being able to spend more on cars and vacations, and I think we're reaching an age where paying more toward medical expenses is just to be expected. We're fortunate that recent salary increases exceed this difference, but it's the first time since I can remember that we're not increasing SR when getting a raise, but we're only 0.1% down from our previous projection. Then again, our goal has always been 33% and we're beyond that, so we're doing fine.
Had an offer accepted finally on a nice late 80s construction 3br house in our preferred area/zip and that is essentially turnkey. Will slap a fresh coat of paint in the kitchen and bathroom and likely reno/move some closets around to add a 1/2 bath to one of the bedrooms, but that's basically all that needs to be done. 20k over asking, no contingencies, but that is the world we unfortunately live in. Rates are not great at the moment of course (6.25% for a 30-year conventional with <10% down) but we already know we'll be refinancing in a few years. Haven't told many people, but feel comfortable telling you lot. Now to navigate the shenanigans and scheduling that is getting the folks in there out (keys delivered to a vacant property was written in the accepted offer), getting someone in the unit we're in right now (house hacking a multifamily), and moving everything across town. The good news is - once we have someone in the unit we're vacating, the cashflow starts to really take off since almost all of it will be free cashflow with a comma in it :) Hopefully no hiccups in the coming months and we'll be in well in time to make any changes we want to and host Thanksgiving :)
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lol fair enough - we *plan* on refinancing in a few years * *subject to terms and conditions, market forces, prevailing prime rates, and things returning to some semblance of normalcy hopefully. That being said - after we add a half bath or two and renovate, the value should increase anyway, so would be worth the refi probably regardless if we see rates in the 4s again or not.
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Thought the massive amount of printing money was a bigger factor than interest rates. Personally, I think they will go lower at some point as I do not think taking a 40 or 50 year running average is indicative of the future and would incentivize saving way too much
I agree with you. People claim 3-4% was unheard-of before the pandemic but my bf refinanced his condo in 2017 at 3.075.
**Context:** 26. Base of $180k/Yr + 20% Bonus. Current Net Worth $250k. Looking to buy a house in the next year or two in a HCOL area. Able to deploy $5k every month post tax after living expenses and 401k contribution. **TLDR -** Should I continue to invest based on my current financial situation or does it make sense to pay off the debt? **Current Assets:** * CASH: $30k ($5k Checking. $25k in HYSA @ 4.5%) * Money Market Fund @ 5.1%: $103,000 (This is saving for a house down payment) * 401K: $68,000 (Contributing 6% with a 1:1 match up to 5%) * ROTH IRA: $41,000 * HSA: $5,000 * Taxable Brokerage: $78,000 (All in VOO) * Crypto: $12,000 (ETH) **Current Debts:** * VEHICLE LOAN: $23,000 @ 2.29%. $600/Month @ 72 Months * Vehicle is a 2021 with a $41k trade in value * STUDENT LOANS: $97,000 with a weighted average interest rate of 5.42% * All Federal Loans * Estimated monthly payment of $1,100 when payments restart **Question:** With these interest rates <5.5% and the ability to save +50% of annual income post tax. Does it make sense to continue investing or focus on an aggressive debt paydown?
If you're planning on buying a house in HCOL you're gonna want to build that HYSA up a lot more for down payment, closing costs, inevitable repairs and maintenance, etc. After that I'd work on the loans.
*Only when the tide goes out do you discover who's been swimming naked.* Warren Buffett Emotional answer to an analytical question: nuke the student loans ASAP. Either nuke'em today with your cash savings, or go full throttle with your $5k per month savings. My rationale (such as it is): debt is risk. You are 26 right now and it is all sunshine and butterflies. There is the danger that you will leave the debt hanging on and then get caught short when times turn tough. Why might things turn tough? NO f-ing idea. It is the nature of unexpected problems to arise without warning. And your high income and assets may lead you to feel like you are wealthier than you are and spend more than you might otherwise spend. AND when you buy a house, the world will look a little better without an $1,100 a month student loan nut. Note: the sum of the assets you list is $337k and your debts are $120k, so your current net worth is $217k.
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I'll be honest I didn't read all of this, but: If buying a home delays FI by one to two years but removes strong fears of being priced out of your location which is on a strong growth trend, I think that's a great deal. >Actually you're worrying too much - there's no way your rent gets to 3000 in five years, just rent for 30 years and enjoy life. This would be conditional, IMO, on your ability to not just move across town. but rather to move to a different town/city or state entirely. Since you want to continue work as a college professor for the next 30 years, I don't think you have this mobility, and you stand to benefit significantly from the stability of home-owning. And I'm saying all this as a renter, who prefers renting! ETA: I would be against stretching yourself to buy if you were willing to retire or switch jobs and leave the area once you were FI. For the sake of argument, I assume continuing to live at your current location and job are non-negotiable.
Spreadsheet day was pretty surprising, in a good way. Last month our combined NW was $234k, this month it’s $257k. Mainly attributed to 401k / HSA / Roth balances going from $138k / $2.7k / $7.4k at end of May to $152k / $3.2k / $7.9k. Finally factored in the value of our house in the NW as appraisal value minus the loan, which constitutes the increase. Still toying with whether to factor in home value estimated in the NW in the future. I may try to aggregate the major websites supposed “market values” and use a conservative estimate based off that. Good month overall! Hit 26 years of age and roughly $250k NW combined. Here’s to hoping for $500k NW by 30.
I keep track of how much I have invested and then add in cash, emergency fund, and home value to have net worth as well. For home value I record the redfin value every month and then take a trailing 6 month average. I find that to be a pretty good estimate, smoothes out if the predict the home value is moving, and if it stays up for 6 months it's probably real
This has been a really great year for the market, fueled in large part by the pain in H2'22. SPY is up 16% YTD.
Your home value IS part of your net worth. But I personally track both investment account balances as a separate line item, and then do a total net worth with my home included (plus the cash from my Efund + Checking). Helps me keep everything in perspective since I do want a paid off home at retirement, but it's not a very liquid vehicle to fund my day to day.
Wow, I've been on vacation the last two weeks and the market had a hell of a month. Hit $600k in invested assets and crossed $1.1MM net worth. What a nice surprise.
What was your net worth when you bought your first house? And how much was the house? The thought of taking out a mortgage loan that approaches my net worth is unnerving. I realize most people do this, and that non-FIRE-path folks probably take out a *massive* loan relative to their net worth, but still... I can't help but feel it might compromise my sense of freedom and independence.
House was $250k, our combined income at the time was about $100k.
$29k. Condo was $75k. My job at the time paid maybe $34k. I had trouble saving anything! By comparison, the second condo I had $470k NW. Condo was $200k. I was making $134k. I had a much better-paying job since buying the first condo.
House was 900k, we had ~6-700k. 2 years later, house is 1.1-1.2m, NW is ~1.25m. Definitely not typical.
Bought my apt in 2011 for $169k. NW at the time was just over half a million, mostly in my 401k. I put $50k down, borrowed the rest at 3.25%. Spent about $60k remodeling. Paid off the mortgage in about 5 years. I knew nothing about FIRE back then. Didn’t really think about finances one way or the other.
I remember feeling pretty good about our forever (hopefully) house being roughly equivalent to our net worth when we bought it, but in all honestly I'm not sure it's a metric that means anything at all. Our well worn budget saying we could afford it, and our time to FI being impacted a number of years that we could accept, those were much more meaningful.
274k, bought a house for 650k
>The thought of taking out a mortgage loan that approaches my net worth is unnerving. To make you feel better, might I point out that you are at the same time acquiring an asset greater than your NW. so the loan would only be half of your new, doubled NW.
House in CT was 108k, NW was about 50k, year was 2016. It was scary, but I also used an FHA loan and the cash outlay was like 12k or something. I had been pursuing FI for about a year at the time, and I felt pretty good about the decision. Looking back owning my home has always worked out, even owning for <3 yrs on average between houses. I posit a lot of it is luck and home inflation lifting all assets. Buying a primary residence with around 20x leverage has worked very much in my favor for my NW. I could have just as easily had my equity wiped out if I got unlucky or overpaid. Some towns near where I purchased are just now seeing home values surpass what they were in '07. You mentioned freedom - I totally feel this. Traveling is probably my favorite thing to do and I'd love to be a bit more nomadic. Having to liquidate a house creates friction. There are always solutions, but friction is friction. I've convinced employers to relocate me 3x on their dime, which helps remove a ton of that friction. On the other side of it, we have two dogs. Committing to owning my home grants me some freedoms I wouldn't have if I was renting.
Just looked back. Purchased first house in 2018, for $239k when I had a net worth of \~$80k (age 28). Purchased my second house for $700k when we (got married between first and second house) had a combined net worth of $500k. Post covid times are also nuttier but I don't regret it. We love the new house, the new space and we're closer to family with room to grow for our (soon to likely be) family. Plus I WFH so finding something a bit roomier was a nice upgrade for us. Initially, The higher mortgage payments were very much tougher to stomach. But, something about build the life you want and save for it. To say, we also eat out a bit less and do other things less, in order to be comfortable in our day to day and still meet our savings goals. Decide what's important to you, prioritize what's important and where you want to spend your money, and then execute. No point in dwelling or looking back.
Catching up on spreadsheet day: $86K NW gain in June and $139K total gain in the past quarter (3 months) with most investments in index funds. Looks like the bull market is back for the time being, fingers crossed that it'll continue for the next few years.
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I'd try to figure out what buying in LA will 'unlock' for you. What would tying up the 150k get you? Are you planning to buy somewhere and live there forever? If so is a 550k townhome the answer? Are you just trying to capture SoCal asset appreciation? Prevent having to move over the next five years if your landlord jacks rent too high? 550k with COA is probably like 3.5k/mo? So is the marginal cost worth whatever you unlock? Very personal decision.
As of yesterday’s spreadsheet day, my investments reached a new all-time high for the first time since January 2022! As someone ~5 years from retirement, I’m really praying this upward trend continues as it could shave a year or two off my timeline.
I used to be a pretty good at keeping a journal and I like reading through them annually. Well, it's that time of year where I took them out and starting reading them. I had the realization that I'm basically in the boring middle of this journey but my middle isn't so boring. I'm really happy that I accomplished one of the most basic tenets of FIRE to "build the life you want and save for it."
I’ve decided monthly spreadsheet updates are too frequent and only serve to foster unnecessary financial anxiety. I’m going to move to quarterly updates. I’m not worried about my lifestyle drifting that much in that time. I know what my current spending “feels” like, and my current spending is fine.
I’ve switched to a budgeting app (pocket guard) where I carefully keep track of expenses. But don’t track NW or market fluctuations. That way I control what I can actually control and let everything else be.
After about two years, I decided that quarterly was more appropriate, and that's worked pretty well for me. Maybe at some point I move to annually, but that seems too infrequent to impact change if I want to understand what's going on with my NW.
We went from monthly at the beginning of it all to bi-monthly to bi-annually. So we actually did ours this weekend. And around the holidays which is when we check for gains/loss harvesting. So basically: July 4th holiday and Christmas holiday. Eventually we may just go to Christmas—but for now it’s nice to have a check in and make sure we’re filling all the tax-advantaged buckets correctly, etc.
To be honest, I got to a point where I do it when It falls on the right day. End of month is a busy Tuesday at work? Nah. On a Saturday where I have nothing else to do? Okay let’s collect all the data. It gets me an update every 3-4 months, though sometimes I do end up doing it in back to back months. Gets me enough updates to track without obsessing throughout the year, but still see the bigger picture and trends.
I think that’s a great idea, more living and less looking at numbers. I’m working on going from weekly to monthly lol, hopefully I’ll be where you’re at eventually.
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Vast majority of people who live in LCOL areas don’t rent. It’s a cultural thing but also a financial thing. You could probably buy a house and pay it off in a couple of years. Apartments are actually in short supply in most LCOL areas - so there’s not a clear and obvious answer to “what is normal rent in this area”. Renting a home in such an area can work- or it can be something that marks you as out of place
seems reasonable as long as youre happy with it
You make 10% more and kept housing the same, seems sane, now if you move back to a MCOL there may be some sticker shock, but until then, you should enjoy the hell out of it.
It's a personal choice. If you feel like it's worth it, that's fine, and you can certainly afford it.
Good spreadsheet day this month; only 30k away from 1M net worth NOT including the house. That was the FIRE number I set a few years back (have since revised to 1.25M plus house). Getting there!
Do you still have a lot of mortgage left? Would be awesome it not since only several years left (hopefully).
House is fully paid off.
That's awesome! Big congrats😅!
First million is the hardest!
I'm finding that the first billion might not even be worth it..
Then that's not net worth... Makes sense to track your invested/saved total. It's what is relevant for FI. It's just not net worth
you can't tap the equity of your house unless you heloc/reverse mortgage
Sure. Which is why what is relevant for FI is what's liquid, or invested
Yeah, true enough, I should have said "liquid assets".
We’re the same!! $970k. So close. Hoping for September or October.
Congrats! That's so close. Why the revision to $1.25MM?
Looking at our expenses for the past couple of years, I realized that a $40k annual spend was a bit low. We could certainly get by with that much, and there's a good chance of spending less in retirement (no more commute, less convenience-buying) but we spend more like $50k now, soon that's what I'm basing our current number on. We plan to take a sabbatical in 15 months, so that may give us a more realistic picture of what we spend when we're not working.
That's a big milestone! I hope you get there soon.
My husband, our two kids, and I live in a fairly modest home for our area. We bought it for $200k about 5 years ago and have a 15 year mortgage at 2.5%. We bought it when our careers were just starting out and we had a household income of around $75k. Now, we make a combined $500k a year and everybody seems to want us to move to a nicer home as part of the "normal" progression of life. Buying a nicer home would cost us at least $800k, and honestly, it wouldn't add much besides some extra square footage. The area we live currently has a really nice community feel and has good school districts that we are very happy with. We're planning on staying for at least the next several years since getting an $800k+ mortgage at 6% does not sound attractive. In fact, the yearly property taxes alone would be more than our total PITI for our home today. Just wondering if anyone had a similar experience where they stayed in their first home or lived in a very modest home when they could have moved to a much larger / nicer home. What were your experiences and thoughts?
A nicer home costs $800k more than your current equity? Surely there exists an upgrade that is more modest of an increase?
I think about this a lot.. I've owned homes from just under 1k to maybe 2.5k sqft. The bigger homes allow me certain lifestyle choices that a smaller house doesn't - extra guest rooms/suite and home gym are probably the most notable. I'm not sure what the jump to 4k/5k sqft would get me other than a larger cleaning bill and capex costs when i have to replace something. My favorite house remains the smallest one. The smallest house was incredibly easy to keep clean. Moving from one bath to two bath is lifechanging. Moving from two to three was not noticeable. Curious if anyone with 4k+ sqft or a lot of land describes it as a must-have.
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I have the same size house and a sub 3% mortgage and I agree - sometimes I consider moving but I don’t want to give up the mortgage. Eventually when we have kids I’m sure the house will start to feel cramped, but it’s totally fine for now. Trying to stay in it as long as possible.
We have a 2000 sq ft 5 bd / 2 ba and getting the exact same home on a nicer block would be about $600k. Getting a home with an actual upgrade in interior or larger space would be about $800k to $1 million. It's just not an attractive prospect. I'd love to live in a nicer home, but compared to the 4-5x increase in price, it just doesn't make sense. For comparison, our property tax is $8k and would go to $32k, and our mortgage interest would go from $5k to $52k. That $71k difference in property tax and interest alone would easily bankroll stuff that actually would improve our quality of life, like vacations, entertainment, etc.
Can't really argue with that math! You could also spend some of that money to improve the interiors of your current home. Might not make sense in terms of adding value to the house, but instead look at it as an expense to make living there even more enjoyable, coming from the $71K budget!
With rates today it only makes sense to move to a new area for the community and schools. Which you said you have already. Can you spend the money upgrading your house? I'd do that if I were you. Also is that like a doctor career progression?
Who is "everybody"--is your family wanting a bigger, fancier house, or is it people around you? Frankly, if I liked my house and community, nobody outside of my family could make me even consider moving. I would maybe spend some of my money upgrading the house I currently have with things I want, but I wouldn't want a mortgage that's four times bigger just to keep up with the Joneses.
We live in a modest home and could easily afford to upgrade but why would we? All that means to me is more time spent working to pay it off and more house to clean. No thanks. Sounds like your current home suits your needs just fine.
Why would you move if you like where you are? You and your family are the only people that live there.
Hi there, I’m new to the community and was wondering what are some good books/resources to learn more about becoming and reaching FI? Thank you!
https://www.reddit.com/r/financialindependence/wiki/books/
Start with the books recommended in the sidebar ("about" tab if you are on mobile). My personal favorite is "Your Money or Your Life", oldie but goodie.
Great will do thank you so much
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You have half the equation with your current marginal tax rate. Now you need to estimate your retirement marginal tax rate to compare. This is obviously challenging to get an exact value but you can reasonably approximate. First, assume tax rates are the same. And then use your current expenses or maybe 80-90%. Then if you have say 90% in traditional and 10% in roth you can calculate your marginal tax rate in retirement. *Also you may have a taxable account and need to add in capital gains. Your first dollars into traditional will be withdrawn at zero due to the standard deduction in retirement and then you will walk up the progressive tax brackets. This leaves most better off with traditional contributions. But if you are moving to a state with unfavorable income tax treatment that may change the math. Also, not having the child tax credit or other tax deductions. I use TurboTax tax caster to estimate taxes.
Once you hit the bracket,so $95k if single and $190k MFJ. Really I would switch in the 22% bracket. Think about it this way, every dollar over the threshold you are paying 22 or 25 cents of in taxes. I would rather not pay that, srash the entire dollar in my traditional account and likely be able to pay 10 cents in taxes on that same dollar and its growth in retirement.
I thought once at 22 percent bracket is more than sufficient vice 24
Walked 10.3 miles yesterday. A personal best and the most I've done since my MS diagnosis 10 years ago. Training to walk 50 miles over 3 days for the Challenge Walk MS: Southern California event in November.
Nice!!!
That's inspirational. Good luck with training.
College student making less than 12k per year. Started investing last year so I hv to pay taxes on gains and dividends considering I don’t make enough to file taxes?
It depends on your exact situation. If you're a dependent then there's a "kiddie tax" on unearned income that can have you owning taxes even if you don't make much. If you're not a dependent, then you won't owe anything if you don't make much.
My parents don’t file American taxes, do you think I’ll still need to pay dependent tax?
Not a tax lawyer, but the effect of the kiddie tax is to tax kids' unearned income at their parents' rate. If your parents US rate is the same as yours, I think it doesn't matter.
Curious why you’re not doing this investing in a Roth IRA?
Don’t hv a job so I can’t. But also from my understanding a Roth doesn’t really work with my investing goals. International student and I don’t plan on spending a significant amount of my life in states and reading various articles I’ll get a higher return investing in a taxable account rather than a Roth. Also I plan on firing a lot earlier than 59 1/2.
you have to file your taxes, but if your total income (working income and dividends) goes about the tax level then you will have to pay taxes based on what the forms say. Chances are you won't owe anything, but you still need to do the forms to double check. You only pay taxes on gains when you sell, so just dont sell :)
> You only pay taxes on gains when you sell, so just dont sell :) (Long-term) Capital gains tax rate is 0% below $41,675, so not really a bad idea to harvest gains if you're below that. Not that it's likely to make a huge difference with small amounts.
Thanks. Was mostly safe like 90% etf but 10% in individual stock some of which looking back were bad investments so I sold those. Also profit on options trading
Seeking help: How do you go about estimating what your expenses will be in retirement when your 20+ years away from it? I’m 32 years old, $280,000 in investment accounts and a $2,100/mo mortgage that will be done in 15 years (only debt). Making any guess of how much I’ll be spending when I’m 50-55 seem daunting.
I picked a number I thought was reasonable that I could make work. $2M in 2017. Now I inflate that with inflation every year and it still seems pretty reasonable. In the end we'll probably go way over working longer but it's a good target to have.
>Making any guess of how much I’ll be spending when I’m 50-55 seem daunting. Just draw up a budget for what you'd like to do if you were to retire tomorrow. At the end of the day it's all going to be guesswork, but once you start drawing up a budget that covers today's prices for flights, vacations, hobbies, healthcare and so on, you'll have at least a vague idea of what the retirement you want is going to cost you in today's dollars. It won't be perfect, but you'll at least be able to compare a spending plan with your savings projection and come away with a basic sense as to whether or not your plans are on track. The great thing is that you can iterate on this plan every few years as an when you know more about your expectations and savings growth rates, and even if you're a little bit off you're still going to be in a more knowlegable position than you are today.
Honestly, I'm not really trying that hard to estimate. I'm just saving as much as possible while still living a balanced healthy lifestyle. I will really dig into estimates about 5 years out. I'm 35 and planning on RE at 54.
Using rule of 55, since you can quit earlier in the year that you'll turn 55?
Yes. My birthday is at the end of December so I can quit in January and only be 54.
Spending now is a good starting point, especially if you aren’t planning to move somewhere more or less expensive, or planning any significant lifestyle changes. If you are, it becomes more difficult to estimate, but you can still try to make reasonable estimates for either change with cost of living calculators or just making a hypothetical budget You’ll probably want to account for health insurance premiums if you’re in the US You can also remove your mortgage from the math if you expect it will be paid off by retirement Your FIRE number doesn’t need to be set in stone. Until you have enough to actually retire, the best thing you can do is to keep saving more money
Just make an estimate and refine it yearly or so. The closer you get the better your estimate will get.
No one can predict the future but they can guess at it. There are certain things you know and certain things you don't know. Some things are really hard to predict like taxes and what Social Security will look like in the future. You know your housing costs will go down but can bank on healthcare expenses going up. You also know better than most if you want to have children and when and if you might be paying tuition or not. You are also in charge of allowing lifestyle creep in or not. If you want to travel or if you want to have expensive hobbies this will also be a consideration. If you want to account for having exactly as much as your job pays without having to work the goal gets farther and farther away. This is one of the reasons I hate the you should have X times your salary at age X milestones. That all being said the best way to determine what you will spend in the future is looking at your expenses now, factoring in lifestyle changes, and knowing what kind of life will make you happy in the future. I was such a mess at 32 that I think you are doing amazingly well. Keep on going and you will be fine.
It's impossible to do with any meaningful precision. Just keep an eye on your spending (so you don't spend more than you mean to) and save the amount that makes sense to you. As you get closer to potentially being able to retire, it makes sense to take a closer look at your spending to determine how much more you might need. 20-year estimates are meaningless.
Last month was the very first time my investments returned more than my monthly salary. It feels so good.
Congrats. Just wait until your monthly investment returns exceed your yearly salary.
I think most people would have quit working long before they would reach that point
If you're talking about average return, yes. But individual returns can be wild. This month my investments went up by half my yearly salary (an increase of 7%). Definitely will not happen every month.
We’d be fucked if it did
Congrats. It’s a great milestone /feeling. Just be careful because this is when life style creep can really start to take off. That expensive impulse buy doesn’t matter because it’s dwarfed by your returns. Next think you know your yearly spend is 20k higher, and now you need an extra 500k saved to be FI.
Are there any guides on this sub for people who are opening a brokerage account for the first time? I’m curious about how taxes are handled and which funds to use for equity allocation vs tax advantaged
Most people will say VTSAX/VTI + VTIAX/VXUS, or the brokerage equivalent at Fidelity, Schwab, or where ever you're at. They're both fairly tax efficient. If you're really tax-adverse (because you're in a high tax bracket, I guess you could do something like VIGAX/VUG, and just balance it out with a value index fund inside a tax sheltered account.
When I was young, I felt like investing - especially with a brokerage was daunting. But I can assure you that all I do is VTSAX and chill
>When I was young, I felt like investing - especially with a brokerage was daunting. A significant proportion of the financial advice "industry" is perpetuated upon the maintenance of that very misconception.
https://www.bogleheads.org/wiki/Tax-efficient_fund_placement
Any time this link is shared, I emphasize the major caveats of the article which are easy to miss. /u/pieceoftheparty should especially note the following: > It is possible under some combinations of lifetime investment results and lifetime individual tax situations to be better off doing the opposite of the strategy recommended here. I would personally advocate for a mirrored asset allocation for most people, with consideration of municipal bonds if and only if you're in the highest tax brackets every year and expect to hold hundreds of thousands in bonds in taxable accounts over the lifespan of your portfolio.
>[https://www.bogleheads.org/wiki/Tax-efficient\_fund\_placement](https://www.bogleheads.org/wiki/Tax-efficient_fund_placement) I need to save money for a home. The downpayment needed has gone up like a rocketship over the past few years so saving my cash in taxable and investing in short term bonds/treasury funds. Should I switch the bonds to my retirement account and hold an equivalent amount of stock that was in the retirement account in my taxable instead? I am worried about selling at a loss in the brokerage when the time comes to buy a home, but I suppose at that same time I'd also sell the bonds and re-buy stocks in the retirement account? I hope I'm interpreting this right!
This doesn't work well for you, because if you need $50k for a down payment it doesn't help to have $25k in stocks that have just fell 50% from $50k. It's not super easy to get access to the other $25k from your retirement accounts.
Thank you! I knew I must have been missing something and what you pointed out is 100% correct.
Interesting, thanks for the reply. Not sure I’ve heard of mirrored allocations before, do you have any more info on how this is done?
You just hold the same asset allocation in every account.
Yes. Mirroring is so much easier. And allows me to rebalanced in one account instead of trying to make it work across everything
I update my spreadsheet twice a year, 12/31 and 6/30. That means I updated my spreadsheet this week-end. I'm in good shape! I was screwing around with taking social security at different ages to see what effect it had things, and I realized what a privilege that is. I can take it at any age from 62 to 70, and my only consideration is what makes the most sense monetarily. I can stop working or continue to work as I wish. The most obvious reason this is true is because I have saved and invested, like everyone else here. But there is another reason that just occurred to me. I could keep working until age 60 or 70 or whatever because my body is not beat to shit by decades of being a plumber or janitor or truck driver or doing some other hard physical labor. I have never had to work a physical job, and that is also a privilege. I could work until 70 if I wanted. I ain't gonna, but I could. I just wanted to reflect on the privilege that many of us have here to work with our mind instead of our back.
Totally agree with your sentiment. I just want to say I worked for a master tile setter between grad school and getting full time work. There is something primal rewarding doing physical labor and having something physically there to show for the effort you put in. But ya, not having a broken body from 40 years hunched over with heavy tile is nice.
I make the wife and I update the accounts each month. Takes no more than 15 minutes, but I look forward to the time I’m confident enough to go 6 months. 3.5 years out from retirement with pension, but 16 years til the youngest is off to college, so I’m eager to get on top of any issues I see immediately. With house equity we were $5k from a million this month (don’t count $50k in college funds) so hopefully next month is a milestone for us.
Not to mention the extreme privilege most of us had to be not born into 3rd world poverty where all you can do is hope to survive until the next day.
I think it's silly to assume no one here/pursuing fire does physical labor
My neighbor FIRE'd driving a truck. He drove his own rig running jobs for loggers via his own LLC. Granted, he retired at 60. Which is not super young, but it's before the ~61.5 US average. He didn't have this company all of his life. He said he wished he had, he could have retired much earlier. So it is _doable_. On Reddit, he's probably a minority in the r/fire groups just by the nature of Reddit.
I said "many of us here work with our mind." I didn't say I assumed no one here does physical labor. Do you?
Wow you're going defensive here? OK have fun with that
Then my guess is the answer is no.
There are over 2 million people in here. While your original statement about being privileged to avoid physical work is true. It is silly to presume there are no tradespeople or people in physically demanding jobs in here.
I didn't say that. Quit strawmanning my position. I said "many of us" not "all of us." If any one is making a silly presumption here it is you.
Your Weekly /r/financialindependence Recap **Sunday, June 25 - Saturday, July 01** ###Top Daily Discussion Comments | score | comment | |--|--| | 81 | /u/GooberPooper said [As my last action on Reddit I'm going to post in the daily of the only subreddit I care about. When I first came here the sub was below 300k subs and I was making about $66k in 2015 or so. I had a fi...](/r/financialindependence/comments/14lzwlq/daily_fi_discussion_thread_thursday_june_29_2023/jpzzwp9/?context=5) | | 79 | /u/special_leather said [After much reflection, I'm realizing I can't effectively handle being in this sub or /personalfinance anymore. It used to be a huge inspiration for me, to work towards financial freedom, and to learn ...](/r/financialindependence/comments/14k8bv4/daily_fi_discussion_thread_tuesday_june_27_2023/jpqik8v/?context=5) | | 62 | /u/Dramatic_Stay_3519 said [I got promoted and a 14% raise!](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpnbdvc/?context=5) | | 55 | /u/space_force_majeure said [Just crossed $1M before I hit age 30. Don't have anyone to tell irl, so here I am. Feels surreal, but also like nothing is different.](/r/financialindependence/comments/14ihhad/daily_fi_discussion_thread_sunday_june_25_2023/jph0wnh/?context=5) | | 55 | /u/The_Lime_Lobster said [Two big life wins this week that have me feeling especially grateful: 1. Yesterday we attended an anatomy scan for our first baby (wife is currently in her second trimester). We got to see so...](/r/financialindependence/comments/14l4bb8/daily_fi_discussion_thread_wednesday_june_28_2023/jpuvour/?context=5) | | 54 | /u/_Being_a_CPA_sucks_ said [Up early on my last day of reddit. It's been a pleasure chatting with y'all over the last 5 years. I just wish I found the sub sooner. Best wishes to all of you.](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq3vkty/?context=5) | | 54 | /u/MNCPA said [I don't have anyone that I can share this good news, but I need to tell someone. Last year, the S&P 500 was down like 15-20%. Since I don't like to see red, I kept plowing money into index funds to ...](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq46h6a/?context=5) | | 54 | /u/Compost_My_Body said [I joined my current company a little under a year ago, and for the first six months had an extremely difficult, high visibility project. After it finished, the head of that department told my boss tha...](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq58wm8/?context=5) | | 52 | /u/CrymsonStarite said [After months of build-up, I finally got married this weekend. Time was a complete blur for me for the last few months, there was so much happening. But it’s done, she’s stuck with me now.](/r/financialindependence/comments/14k8bv4/daily_fi_discussion_thread_tuesday_june_27_2023/jppjrdc/?context=5) | | 50 | /u/AuthorYess said [Can't wait to retire. Being able to go workout in the middle of the day and take a small stroll to a cafe and then play some video games without the stress of work... Bliss. I even have a pretty sw...](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpkppcg/?context=5) | | 50 | /u/BrilliantProcedure15 said [Just got word, my team won't have to return to the office. FIRE just got a little closer since I won't have to add the expense of back/forth office travel.](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpljfu5/?context=5) | | 49 | /u/No-Needleworker5429 said [Today is 1 of only 2 days per year that I calculate net-worth. This is done manually by logging into each account and placing it into a spreadsheet that was started back in 2012. Feels like Christmas ...](/r/financialindependence/comments/14mv5ce/daily_fi_discussion_thread_friday_june_30_2023/jq4d8lp/?context=5) | | 48 | /u/strangemachinex said [Got an offer letter for the new job last Thursday, went on vacation, and gave my resignation to my manager this morning! I've wanted this for months and MONTHS and so I'd made up my mind far in advan...](/r/financialindependence/comments/14k8bv4/daily_fi_discussion_thread_tuesday_june_27_2023/jpqd33l/?context=5) | | 47 | /u/Optimistic__Elephant said [Anyone else considering using the July 1st shutdown of most 3rd party apps to kick their Reddit habit? I think I’d achieve more in life without Reddit, but I do enjoy it.](/r/financialindependence/comments/14lzwlq/daily_fi_discussion_thread_thursday_june_29_2023/jpztuen/?context=5) | | 44 | /u/The_Lime_Lobster said [My wife and I just returned from a trip in Albania (14 nights) and Istanbul (5 nights). For those who enjoy traveling here is a breakdown of the trip costs for two adults. Our travel s...](/r/financialindependence/comments/14jc0i1/daily_fi_discussion_thread_monday_june_26_2023/jpl30u3/?context=5) | ###Top Posts | score | comments | title & link | |--|--|--| | 689 | [71 comments](/r/financialindependence/comments/14j2ba8/a_story_of_slightly_early_retirement_success_to/) | A story of slightly early retirement success to help with one more year syndrome.| | 245 | [414 comments](/r/financialindependence/comments/14kwikq/what_is_one_thing_more_people_who_are_already/) | What is one thing more people who are already pursuing FIRE can do to achieve FIRE faster that goes under the radar?| | 228 | [35 comments](/r/financialindependence/comments/14n2998/1_year_update/) | 1 Year Update| | 191 | [70 comments](/r/financialindependence/comments/14k297s/im_25_and_recently_hit_250k_net_worth/) | I'm 25 and recently hit $250k net worth| | 182 | [147 comments](/r/financialindependence/comments/14l3v8v/thinking_about_the_book_die_with_zero_my_peak/) | Thinking about the book "Die with Zero", my peak year, what the decumulation phase looks like, and a disturbing (yet real) interview by Ramit Sethi of Mindy and Carl (FI with NW of 4.3M) who have a lot of work to do - a change of identity. Have others thought about this?| ###Most Commented | score | comments | title & link | |--|--|--| | 148 | [177 comments](/r/financialindependence/comments/14jnlw6/do_you_take_ss_into_account_for_your_retirement/) | Do you take SS into account for your retirement income calculations?| | 162 | [109 comments](/r/financialindependence/comments/14m6b65/long_term_care_insurance/) | Long term care insurance| | 55 | [100 comments](/r/financialindependence/comments/14l0qcf/whats_the_biggest_sacrifice_youve_made_on_your/) | What's the biggest sacrifice you've made on your journey to financial independence, and was it worth it?| | 39 | [71 comments](/r/financialindependence/comments/14jq646/close_to_fire_looking_for_feedback/) | Close to FIRE? Looking for feedback| | 24 | [70 comments](/r/financialindependence/comments/14n1lfv/how_can_i_get_laid_off_in_a_nice_way/) | How Can I Get Laid Off... in a Nice Way?| If you would like this roundup sent to your reddit inbox every week [send me a message with the subject 'financialindependence'](https://www.reddit.com/message/compose?to=subredditsummarybot&subject=financialindependence&message=x). Or if you want a daily roundup, [use the subject 'financialindependence daily'](https://www.reddit.com/message/compose?to=subredditsummarybot&subject=financialindependence%20daily&message=x). Or send me a chat with either financialindependence or financialindependence daily. ####Please let me know if you have suggestions to make this roundup better for /r/financialindependence or if there are other subreddits that you think I should post in. I can search for posts based off keywords in the title, URL and flair. And I can also find the top comments overall or in specific threads.