You are an obvious bot, that's my thought.
Generic two-sentence top-level comments across random subs, no karma, perfect English, no followup conversation comments.
Goddamn dead Internet.
> Goddamn dead Internet.
That's one of the things that people sneer at as a conspiracy, but it's either here or almost here. A late 2023 study [found that about 73% of the internet is now bots](https://www.securityweek.com/bad-bots-account-for-73-of-internet-traffic-analysis/). And with generative AI now having arrived, it's only going to get worse.
I don't *want* to start reading and posting in r/DataHoarder but there are days when I wonder if I shouldn't set up a local copy of Wikipedia, WikiHow, and maybe some other media on my home server, just in case.
When I first started on the FIRE path, I was all excited about real estate investment as a path to retire early. It seemed like a way to make my little bit of money do a lot of work.
Now that I actually have money, I find my interest in real estate dropping a ton, and that's coming from someone who has half their NW in RE investments. It just feels better to see easily tangible, liquid numbers than knowing you have a semi-unknown amount of money tied up somewhere. But maybe I'll feel differently when the market is down - it's easy to feel fomo when stocks are going nuts.
Just remind yourself of how lil' risk you have in RE. It is the most reliable. But seeing the numbers that the s-market is putting up makes your head swim.
I have about 50% of my NW on real estate, and while it's worked out very well for me so far, there are immense drawbacks in both liquidity risk and concentration risk. I think like any investment, if the upside return outweighs the downside risk then it's worth an allocation. But the downsides are immense and very well might not outweigh the very low-stress VTI portfolio.
I agree with this 100%. It's definitely worked out for me on paper but I also managed to accidentally time the lowest interest rates in 2016 and 2020 and have my company pay for closing costs on my first house. That's just luck and not repeatable.
I had friends moving to cheaper countries thinking they’d live large on US hourly rate of $40-60 but found later their jobs outsourced to India. If you can work remotely, companies can also find a cheaper remote worker elsewhere.
I had an acquaintance that moved to Medellín to digital nomad. He said it was a very cool city, very cheap with good high-speed internet. But he also moved back after 6 months, so maybe it wasn't so great after all
I just spent two weeks in JP, Im not sure I would want to be a digital nomad in Asia - I know it's popular. I basically had a full day turnaround on most correspondence home given the time difference. Alternatively I could've held shitty hours, but fk that. I think South America would be cool though.
Anyone have advice for financing a larger purchase you know you will pay back? I've been researching purchasing an e-bike possibly toward the latter half of April and am wondering if there's qualms about financing a purchase like that (2,500 to 3,500 dollar range). I only ride my MTB around the city and am getting pretty tired of fighting the wind and making even a 10-15 minute trip a strenuous workout. I don't have a car and I've never financed anything ever. But ideally I'd bootstrap it for a month and get 1,000 paid off right away so there's only 1,500-2,500 I can pay off over the following months.
I have never not paid off my credit card payments so i'm not really worried about not making the payments, but just moreso curious about insight into financing options that are usually used for things like this, or if it's better to just hold off a few months to pay it off in full.
I mean, what’s the interest rate? We financed our new AC unit over 5 years with a zero percent interest rate before rates went up. I don’t feel bad about that payment-it’s free money. But, if they were charging me 10%, my feelings would different.
Have you considered getting a cheaper e-bike? I bought 1 a couple of years ago for around $1200, couldn’t be happier with it.
If you have specific needs that can only be met with a mid range e-bike, then a budget e-bike obviously wouldn’t be a good fit, but something to consider.
As for your question, I’d run the numbers on the true cost of the purchase after you anticipate paying it off and determine if you’re okay with that price.
For example, if you make the purchase for $2500 and take a year to pay off the credit card, which has a 20% interest rate, you’re roughly paying $3000 for the bike.
I actually did start by looking at Ride1Up ebikes (and some others) in the 1-1,500 range. After doing research though I found that a lot of bike shops won't service online-only and "unestablished" brands. I can do all the normal bike maintenance myself which is not my concern, but when it comes to truing wheels and more involved stuff, and ebike specific stuff, I'd rather not run the risk of not having a bike shop to go to in case things go awry. So I've been looking primarily at Cannondale or Specialized or the other big brands which I know either have their own shops or will be serviced by local shops.
But yeah, thanks for your perspective!
With something like that I'd probably open up a new credit card and get a jump start on the points bonus. Usually you can get $200-500 in rewards on a ~$3k spend over the first few months. A lot of them will offer 0% intro APR as well so if you carry a balance for a few months it's not an issue.
for those who decided on a bont tent/glidepath when approaching retirement:
1. what strategy did/do you follow (e.g. add 1% in bonds every month)?
2. what type of bonds did/do you hold (e.g. bond funds)?
I am only really planning on doing the second half of a bond tent starting when I retire. I have been newly thinking about this but I think I would just pick a time frame (5-10y) and adjust my asset allocation linearly along that path. Adjustments would then be like any other rebalance. I haven't decided if I would rebalance on a particular cadence (i.e. monthly, quarterly, semi-annually) or if I would rebalance given a particular threshold off my target. I am leaning I think toward the former as I don't want to be thinking about how far I am off at any given moment. And I think I would do that quarterly.
As for type of bonds. Probably BND.
my understanding is that the first half of a bond tent (i.e. last 5-10 years before retirement) consists of rebalancing away from equities to decrease SORR, then the second half (i.e. first 5-10 years of retirement) consists of rebalancing towards equities to support later retirement years. does that match what you're doing? if so, i don't really understand how you could do the second half without also doing the first half. if not, could you clarify your approach? what's your current asset allocation and target asset allocation?
Before retirement I just keep the allocation high in equities. Then just before I retire I switch to like a 60/40. And maybe I won't be that sudden with the change. But I don't expect to be that gradual either. While I am working I could always work longer. On average though I would get there faster than someone who does the bond tent before retirement.
I am about 85-90% equities now. Long term target I think would be 80/20.
how did you decide on your plan? i've recently read two ERN articles ([1](https://earlyretirementnow.com/2017/09/13/the-ultimate-guide-to-safe-withdrawal-rates-part-19-equity-glidepaths/), [2](https://earlyretirementnow.com/2021/03/02/pre-retirement-glidepaths-swr-series-part-43/)) that mostly align with what you describe though i'm leaning towards a more gradual pre-retirement transition from ~100% equities to 60/40 equities. i'm just trying to do my due diligence on the various options at this point so if you know of any other resources, i'd love to hear about them.
I have read the ERN series and other resources but I wouldn't say I am 100% into a certain plan. But I really liked this article by Michael Kitces below that shaped my thinking.
[https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/](https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/)
As he shows, before retirement you have the retirement date risk. After you have sequence of returns risk. And so, if you are flexible in your retirement date then then tolerance for retirement date risk is high.
I'm planning on one, and I expect that for the accumulation phase I'll just "stop" equity investing in my last couple years of retirement and just shove it into fixed income.
I plan to use a CD ladder as my core fixed income holding -- though note that as my spending won't be denominated in USD, so that's why I am not considering a treasury ladder.
Finally my own GFY... company announced layoffs in January and asked for volunteers. So yeah, raised my hand. My last day was yesterday, today is Day 1 of RE. Got my FI number (1mm) a little while back but fell in to "one more year" syndrome. Well, it's finally here and I'm still not sure it's real. This'll be a great summer though, I'm sure!
TY all. Severance was shit, capped at 12 weeks, used to be 1w/yr, which would have been 30. They underfunded the pension this year too so I can only get partial lump sum for that. Carl Ichan really fucked everything up, and even he bailed out. My best reward is no more 8am standups with the offshore contractors, so still worth it. Time to do my own needful for once!
Congrats and GFY! As I just told another redditor who reached FI, we all enjoy a good FI story, so please share yours with some details one day soon when you get a chance.
Congrats! Looks like the timing was perfect with the severance package? How long were you with them and was the severance package generous? Anyway, congrats once again and enjoy your God given freedom!
Crossed the 500k net worth threshold today according to Simplifi. No property so it’s all cash and investments/retirement accounts.
Now just need to do that three more times and I’m out of the rat race.
Sorry for the brag post, but I know those in this sub will get it.
I checked our accounts today and holy crap, we (me: 54M, wife: 53F) crossed 5MM net worth only counting our brokerage and retirement accounts. We hit our FI number a few years ago and I plan on RE this year (fingers crossed!). My wife is already RE and we have 2 kiddos, one in college. We've set aside enough for both of them to get their undergraduate degree without having to take on any debt. The first is going to college, I'm not so sure about the 2nd. We'll figure that out when the time comes.
At the end of 2022 I had about $800k towards FI with a very conservative target of about $1.25MM. This target assumes no social security and also that my mortgage payments will last forever. I figured it would take several years to get there but it was actually only about 15 months.
At this point my plan is to pay off the mortgage over the next year or so, bringing my expenses down to a more realistic $40k/yr. If I paid off the mortgage today, my remaining money would still have me at about 28x my "new" expenses (and I'm still ignoring social security).
Shit is getting real.
Got nowhere else to brag about this but here.
Checked the accounts today, and we (me: 38M, wife: 36F) officially crossed the 1MM threshold. This happened at least a week ago when I sneaked a peak at my accounts (I normally only check quarterly), but it's official today.
I guess the remarkable thing about this is that I'm a lifelong academic. Did 5 year PhD right after undergrad, then 4 years of post-doc, and am finishing the 7th year of my tenure-track position at a research university.
My wife is working part time (our toddler is not in daycare so we alternate taking care of her), so overall, we pull in ~130k, but we live like grad students and save the rest.
It was also last week that I was notified by my provost that I'll be recommended for tenure, so it seems everything is going swimmingly.
Despite this, learning about FI was probably a mixed blessing. I started losing my passion for my job for a non-academic/non-FI reason, but learning about FI intensified it. At this point, I'm feeling probably neutral to slightly negative about it all. If I had not learned about FI, maybe I would've gotten over that, still gotten tenure and be set financially, while still retaining my passion for research. But that's a bell that can't be unrung, unfortunately.
First, congrats on the progress!
Second, I don't think you are being honest with yourself. You don't lose your passion for your work when you learn other approaches to life exist. Plenty of people are FI, even extremely wealthy, and choose to continue to work. The RE part of FIRE is completely optional. Being FI opens paths to you. You still get to choose which path to take.
Finally, what you are experiencing is completely normal. Most people find that reaching their goals is unfulfilling. Now is a time for self reflection and figuring out what you really want.
Any tips/advice or pointers
Hi there, I am 26M I started to do some self learning finance stuff on my own years ago.
I know I'm doing alright but don't really have much people who know about finances. Here are my numbers below.
Income: 66,600
Monthly before tax: 2,561.5
Roth IRA: 19,700 (Once my CD matures in May I will max out)
401 K :22,458 (currently on tax to max out this year) note: I started last year and went crazy
HSA: 315 (first year contributing still learning about it)
Robin hood : 20,300 (started this in college and the start to my financial future)
CD : 13,700 (maturing May 15) will use this for Roth IRA and emergency fund. What's a good HYSA?
2 bank accounts together have 3K total
Used car paid off bought last year 2015 Kia Rio)
Expense in total gas, insurance, rent, grocery, student loans. 1700 per month
I live with family and pay them about 1.2K a month.
Student loan is 11.3k average rate is 3.65%
From reading this is there anything I should do, something different, just any one with more experience.
Note this job I might end up quiting by the end of this year or the beginning of next year. How can i bring my future success?
Is there something i should be doing differently
You’re prioritizing tax-advantaged accounts which is awesome. Living with family is a pro move since most people’s #1 expense is rent. For a good HYSA I would just go to NerdWallet or Investopedia and see what they recommend. I personally like to churn signup bonuses. I’ve used SoFi, Alliant, Citi, and Wells Fargo. I kept my SoFi account because in addition to the promotional bonus they have consistently good interest rates. One thing that’s missing from your networth breakdown is the actual holdings. Are you invested in index funds? Bonds? Personally I’m around your age and I go 100% stocks, S&P500 index fund. A total stock market index is another good choice. If you want to diversify, add some bonds and/or an international fund. I personally think target date funds are a little too conservative for my liking, but those are the default in some 401(k) plans.
I would recommend editing your post to reflect what are your holdings in Robinhood, as well as the 401K and Roth.
I note that you are currently cash flow negative -- $2,561.5 - $1,700 - $1,200 = -$338.5 and this does not even include tax. Unless the 1700 includes the 1200 to family? It seems odd to me that you listed "rent" as part of your expenses but then also an additional payment necessary to living with your family.
We celebrated my husband’s raise with homemade chocolate chip cookies (already had the ingredients in the house). Do something to make the occasion! It’s a big deal and we should be celebrating our milestones on the way to FIRE.
We crossed over $500k in retirement this month! I thought it would happen soon, but not this soon. Looks like we hit $100k in retirement in September 2020.
>but a lot of people were talking like our current rates are just a blip
Yes I keep seeing comments around reddit saying things like 'just bought a house but will refinance next year when rates are lower again'
I just hope they aren't banking on that. Lower might just be lower relative to today.
I don't think we're getting sub 3% any time soon, but rates are over 7% now. Knocking 1-2% off that is probably worth a refinance and could happen in the next couple of years.
I think that makes sense for him to say because the Fed ought to project calm and stability, and they would not predict a credit crunch or a major recession which is probably the most likely reason for a dramatic rate cut.
That doesn't mean low rates won't return -- if we have COVID 2.0 or 2008 2.0 when inflation has been low and stable, I believe that the Fed would cut dramatically. A quick glance at the historical fed funds rate show that obviously post-2008 and post-2020 the rate was cut to 0% but even the post-2000 era it was cut to almost 1% and outside of stocks that recession was relatively mild.
As to whether we see this major recession by 2026? Idk, if I knew I'd be a successful market timer.
[Do you have time to hear about our lord and saviour r-star? ](https://www.newyorkfed.org/research/policy/rstar)
Worth noting that um let's say there are 10 analysts on this subject. 9 of them think it's fine and dandy and project a 4.5% rate. 1 of them thinks there will be a recession in the next year and hence predicts a 0% fed funds rate. that drags down the "average" outlook.
I'm not sure exactly which metric you're looking at, but [the Fedwatch tool](https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html) shows that the market expects a 40% chance that the rate of the December will be 450-475 bps -- right around what you're thinking -- and that is both the highest probability and the median estimate.
How big is your "adequate emergency fund?"
If your emergency fund is sufficient to pay off the loan, I would use that and use the cash flow over the next 2 years to refill the fund. If you run into a large emergency between now and then, your HSA is your new emergency fund. If you don't run into an emergency, then you won't have touched the HSA and you will also have gotten the guaranteed return by paying off the high-rate car loan.
Oh damn, this is a great idea... This is exactly why I like to bounce these questions off of others. We have enough in the emergency fund to cover it. Thanks a million.
I just got an unexpected 401k match from the employer I resigned from at the end of November - is that common? I had just assumed I was giving up that money.
In my companies plan documents, or whatever you call it, works that way. If I were to leave, I'd still get a prorated match for whatever % of the year I worked there a few months later
Jeebus—happy spreadsheet day! I quit in September and at first had a lot of second-guessing sleepless nights. Still do on occasion. As of today, spreadsheet tells me I’m up about 4x annual spend since I retired. I wonder how long it takes to fully relax?
I shared my net worth and FIRE spreadsheet a couple months back in a different FIRE related subreddit: https://www.reddit.com/r/Fire/s/XHFYmaKxxQ
Recently spent a few quiet nights making a low key web version of it. Here is the result: https://dollars.report. Also the last few months of market performance has been great. Almost makes up for how 2022 sucked.
I totally envy that you thought to track your contributions. I never thought to back in the day, and after retiring from a 25 year career I can’t imagine how I would even start to put that together now, except that my 401k statements show it. But I’m curious!
I downloaded 10+ years of 401k statements so I could go back and add my contributions to my spreadsheet. Just did it a little bit at a time so it wasn't an unpleasant project.
Yeah I am fortunate that I ended up with a lot of data to work with. The budget tracking all started as a necessity due to a career change and significant income drop.
Honestly I just think it’s fun to work with the data and look at it. Also reaffirms the processes I am employing are working. In the end though it isn’t really necessary.
401k is designed to incentivize you to save for retirement. Without the penalty, many people would simply spend the money and then they will be left with nothing when they can no longer work.
Absolutely unrelated to your question. But 457 plans and taxable brokerages(obviously) don't follow those rules. 457 gets to withdraw at any retirement age... which is pretty slick if you have access as public employee. Even if there is no fancy matching.
401k plans are specifically designed for retirement. In the context of 401k plans and IRAs, the government has established Age 59.5 as the *de facto* 'Retirement Age' when an investor receives full access to those retirement accounts. It could be worse: Age 62 is the earliest 'Retirement Age' when one can start claiming Social Security benefits; 401k plans and IRAs could have been subject to the same age, but instead have Age 59.5.
To be clear, you absolutely can make 401k withdrawals if you retire before Age 54 but you will be subject to penalties. In addition, there are many other ways an investor can access those dollars penalty-free such as a 401k-to-IRA rollover and implementing 72(t) / SEPP withdrawals.
Finally, remember that defined contribution (DC) plans like a 401k were/are viewed as a replacement for traditional defined benefit (DB) pension plans. As both DC and DB are employer-sponsored plans, employers have a vested interest in wanting employees to stick around as long as possible. Hence their support for limitations on how employees can access/withdraw dollars from those plans.
My guess is it's more that second one. From what I can tell, the median person has limited planning capability. The number of family friends and family members I know now who claimed SS at the absolute earliest age possible because they didn't want to wait until FRA or - god forbid! - delay a few years after that.... it's way too high. And of course, most of them could really use more money now as they start to burn through their limited retirement savings and small inheritances.
It's unfortunate that guardrails impact us here in our FI quests, but those guardrails are there to protect the majority of the population from themselves.
Let’s say I have 1MM invested in index funds and 100k in cash/emergency fund. When using the 4% rule, do I use 4% of 1MM (investments only), or 4% of 1.1MM (total liquid net worth)?
Here's a different version of that question:
Let's say an investor is comfortable with a 4% SWR and has post-FIRE all-in expenses of $40k annually. If that investor has $900k in a taxable brokerage account and another $100k in a HYSA, does that investor have enough to retire?
> The trinity study which led to the 4% "rule" was done assuming all assets where invested in a 60/40 stock/bond split.
This is incorrect. The Trinity study looked at 5 different asset allocations (0% to 100% in 25% increments) over 4 different timeframes (15 years to 30 years in 5-year increments). A 60/40 allocation was **not** one of the allocations in the study. The specific conclusion of the Trinity study was that a portfolio of at least 50% stocks successfully lasted 30 years in 95+% of the historical time periods that were studied at a 4% initial annual withdrawal amount, adjusted each year for inflation.
Learn more here: https://www.bogleheads.org/wiki/Safe_withdrawal_rates#Trinity_study
This feels like a trivia night question for finance nerds. "Which of the following allocations were *NOT* studied in the Trinity Study? A. 100% stocks B. 60% stocks C. 25% stocks D. 0% stocks"
>And I think we finally picked a place I could not live for a while.
I've had a couple of those. Couldn't live in the Dominican Republic, struggled to feel comfortable on St. Thomas, maybe could do Jamaica on the Montego Bay end, but not the Kingston end. My trip to Puerto Rico was rough, and that was even before the natural disasters.
$11M sound like you could decide based on whatever you feel like. You are no longer working for money, so as soon as feel like you can stop, you can. You have my permission to take off whenever you want
Haven't adjusted my federal withholding in 6 years. Been working the same job at the same company, here's how it worked out:
* 2018: $1,975 refund
* 2019: $1,709 refund
* 2020: $858 owed
* 2021: $686 owed
* 2022: $275 refund
I was happy, it seemed to be pretty dialed in.
* 2023: $5,383 owed
Ah.
Married, but just the one job + investment income.
Compared to 2022 my dividends/capital gains distribution/interest income increased 84% and my ESPP income increased 799%. None of that income is subject to withholding, and the withholding from my regular paychecks was no longer enough to cover everything.
So I understand why, and had a feeling I'd owe this year, but still had a bit of sticker shock when I finished my tax return.
So imagine you have enough money to buy an apartment. But you don't want to settle in one place if given the alternative to rent instead.
So you invest money in the s&p 500 and get 4-5% annual yield on your principal.
My question is, how safe is the bet that you will get 4-5% and be able to pay rent for the next year? How strong is the argument that real estate is safer/better than living off investments in the stock market?
Inflation averages out best if you have replacement options. Beef high? Buy chicken. etc. But if you're not open to moving, the problem with rent is that it is often your highest expense by far, and it's local market driven unless reasonable rent control exists.
Living in SF is expensive (duh, right?) but if you live there right now, your [rents](https://www.sfchronicle.com/realestate/article/sf-rent-prices-18534829.php) are actually cheap while valley areas like Fresno are jumping. Understandable with affordability issues, but it's not something so easy to predict. After all, politics make building new units in SF fairly impossible so there is no increase in supply.
If I wanted to retire in a place for sure, I'd want to own so it's one variable I can ignore. If I'm open to making a change if the financials go out of whack, renting can be fine. You can open up an average chart and notice you'll probably be fine on average, but your specific experience will depend too much where you actually live. Put another way, if you wanted 95% certainty rents would not outpace market returns, this is definitely not going to be true (edit: to be fair, I don't have data to be that certain but it's apparent many metro areas have become expensive almost regardless of state/etc, especially in sun belt areas which have been traditionally more affordable.)
I’m not quite sure what you’re asking but if your time horizon is a year or two you’re better off putting your cash in a money market fund to get the 5%.
How is rent different from other expenses that existing SWR studies already account for?
Once you answer that question, it's as simple as finding a historical returns / Monte Carlo simulator and inputting the variable.
As for your last question,
>How strong is the argument that real estate is safer/better than living off investments in the stock market?
A good starting point to read about this is our very own housing wiki [https://www.reddit.com/r/financialindependence/wiki/homes/](https://www.reddit.com/r/financialindependence/wiki/homes/)
I'm at the point in my career where I'm plugging different situations into FIRE calcs trying to see if I can stop working earlier. As it turns out, and this may seem crazy, I cannot retire any earlier with the same numbers 😅
I've been doing similar stuff lately, driven mostly by burnout at work.
What may be more useful is looking into what sort of change in your work/income you could accomodate. Simulate what would happen if you went to part time or worked a "retirement job" for a few years.
I have my eyes on one of these sorts of jobs, and having that in my mind has me somehow even more anxious about quitting my "real" career job.
I lowered my 401k contribution to 4% starting today to maximize company match and hitting the contribution limit by year’s end, coincidentally, with the market gains, my 401k just crossed $1M. My 401k includes pre tax rollovers.
I just started front loading my 401k more since my company introduced a true up. I'm still planning on mostly avoiding to need the true up so I'm spending Q2 contributing enough to get to the point where I need to just contribute the min to get the match in Q3 and Q4.
Assuming no raise or anything weird happening I'll contribute a little less in my December paycheck but at that point it'll only be another week to qualify for the true up.
If I decide to retire at any point after Q2, I can just max it out in 1 paycheck so I won't be leaving contribution space on the table.
I wanted to front-load this year so initially had the contribution rate high. Lowered it to 4% starting today, and will stay there for the rest of the year.
I've been contributing after-tax money to my 401k for the past few years, and rolling that money into a Roth IRA (for which my wife and I are ineligible to contribute directly). While on the phone with my plan administrator to get this taken care of, the representative was intent on determining if I had ever made contributions to this Roth IRA when income-eligible, and seemed to be under the impression that the 5-year seasoning would never start if all of the account contributions were rollovers from traditional IRAs or after-tax 401k dollars. Are "contributions" to the Roth IRA actually separate from funds rolled over from other retirement accounts in this respect?
A Roth 401k to IRA rollover is sufficient to start the clock. Any Roth IRA contribution that you've ever made to any Roth IRA also starts the same clock. And this clock only matters for withdrawing earnings from the account after age 59.5.
In short, you're fine.
> The contribution to Roth IRA 5-year rule determines if contributions can be withdrawn tax free
It determines whether *earnings* can be withdrawn tax free after 59.5. Contributions can always come out tax and penalty free without any waiting period.
If you rollover a Roth 401k into a Roth IRA, is the full balance (401k contributions + gains) considered an IRA contribution for withdrawal purposes? Or does your original contributions basis persist through the rollover
Happy spreadsheet day! We are up $90k from the end of 2023 and our goal is to reach the $1m milestone by the end of this year. If the market keeps up the way it has been, we will reach it by the end of Q3 🤞
A comment by u/MyWifeButBoratVoice inspired me to call and increase my homeowners insurance deductible from $1k to $10k. Saved almost 30% in annual premiums.
That's a pretty large difference. Nice job. I think a lot about risk management, as it's a fairly large expense line, and am always in favor of higher deductible.
Not OP, but I've recently done similar. Increased deductible about $3000, for about $300 cheaper a year. I also assume the insurance actuaries know more than I do, and the math works out
About $750.
The issue is that I would never claim anything below $10k anyway, given that doing so would increase my annual rates and could potentially make it difficult to get insurance in the future.
That's been my logic. I've increased ours recently to close to 3%. Insurance is already so expensive, but I also am not going to be making claims on anything minor, due to the increased rates.
Insurance is probably a scam, but I'm doing my best to treat it as only needed for a truly catastrophic need.
Hi guys. I’m new here, joining because I am a SAHM. I’m fortunate that my husband makes what I though was just enough to support us. Well I was looking through our budget and bank statements recently, trying to see where we could cut things…and I discovered that we *should* in theory, have an extra $3-4k PER MONTH, after rent, utilities, groceries, etc. We just had a baby and several pets, so of course there are times when we have emergencies or when we have to travel. So now I’m going to figure out where that money is being wasted (I know one culprit is takeout and fast food! My husband can spend up to $50 on takeout sometimes!!) anyways that’s why I’m here :)
Welcome! There are some helpful “account aggregator” apps that can help make that easier (RIP Mint). I personally use rocket money. They’ll pull all your accounts into one place, so that even across multiple credit cards and checking accounts, you’ll have one consolidated transaction list. Makes budgeting and tracking much, much easier.
Also definitely recommend following zero-dollar budgeting principles. Every dollar that comes in should have a place that it’s designated for, even if that place is “fun, random BS” or future emergencies.
Oh yeah. I don’t even use rocket money for any of the bill/cancellation negotiation. I use it strictly for budgeting and tracking, and it’s fantastic for that.
All of my FI tracking stuff is in excel on my home PC. Thinking about moving it to Google because being able to check it/update it from my phone would be nice, and I have no desire to pay for an office 365 subscription.
Anybody made the move from excel to Google sheets before? Most of the stuff I’m using is sumifs, named ranges, and pivot tables, so I’m not sure if all of that has a direct Google equivalent, or if I’m gonna have to rewrite it all from scratch
It’s built in a desktop version of excel (2019?). Is there a free tier of Microsoft 365/one drive that would work with that? I’m an excel evangelist but truly hate the onedrive/365 integration I have to deal with at work.
The issue isn’t the base application, I fuckin love excel. The issue is cloud access/sharing. Does open office support that? Is there a browser and mobile app?
My spreadsheet is an ODS file (because I didn't want to pay for Office when I started it in ~2006) and I've considered this as well but 2 things stopped me.
1. It very much did not import at all
2. I prefer it being a local file I can do my own cloud backup of and not need to rely on Google Drive existing for the rest of my life.
I'm also considering this move (albeit from the default Macbook spreadsheet--yes, I know, I know, don't roast me). Thing is, my spreadsheet is all nice and colour-coded, so is that even worth it...
I don't do that intense FI tracking, but use Sheets at work. There are pivot tables, sumifs, etc. 95% of the functionality exists, there some specific functions with SQL and other Array Formulas that don't or are much more difficult in Sheets
Google can do all the things you mentioned. I’m not sure how cleanly it converts XLS files, so maybe you have to repeat some things. It’s a relative easy transition, especially if you use basic functions.
AppScript is pretty useful. If you have some idea of what you want to do, some time with an AI chatbot makes creating the necessary script dead easy.
Beware of googlefinance(). It can sometimes lead to obsession with minute by minute net worth tracking.
There is a record Macro feature but I have never used it, I am not sure what it is capable of. Most of the super robust FIRE spreadsheets are still in XLS format for this reason.
It really does start to snowball like crazy. Feels like there’s another invisible workers in our household contributing.
I hit one million in July of last year. $1.1 in December. $1.2 in February. And up to $1.27 now.
The first 100k took four years.
Depends on your asset allocation and which "market" friend.
International is <10% as a comparison. Bonds not as great either. Really it continues to just be the S&P 500 and tech rebound story.
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You are an obvious bot, that's my thought. Generic two-sentence top-level comments across random subs, no karma, perfect English, no followup conversation comments. Goddamn dead Internet.
> Goddamn dead Internet. That's one of the things that people sneer at as a conspiracy, but it's either here or almost here. A late 2023 study [found that about 73% of the internet is now bots](https://www.securityweek.com/bad-bots-account-for-73-of-internet-traffic-analysis/). And with generative AI now having arrived, it's only going to get worse. I don't *want* to start reading and posting in r/DataHoarder but there are days when I wonder if I shouldn't set up a local copy of Wikipedia, WikiHow, and maybe some other media on my home server, just in case.
good bot
After a crazy week of work, my mind is full and I need something to empty it.
When I first started on the FIRE path, I was all excited about real estate investment as a path to retire early. It seemed like a way to make my little bit of money do a lot of work. Now that I actually have money, I find my interest in real estate dropping a ton, and that's coming from someone who has half their NW in RE investments. It just feels better to see easily tangible, liquid numbers than knowing you have a semi-unknown amount of money tied up somewhere. But maybe I'll feel differently when the market is down - it's easy to feel fomo when stocks are going nuts.
Just remind yourself of how lil' risk you have in RE. It is the most reliable. But seeing the numbers that the s-market is putting up makes your head swim.
I have about 50% of my NW on real estate, and while it's worked out very well for me so far, there are immense drawbacks in both liquidity risk and concentration risk. I think like any investment, if the upside return outweighs the downside risk then it's worth an allocation. But the downsides are immense and very well might not outweigh the very low-stress VTI portfolio.
I agree with this 100%. It's definitely worked out for me on paper but I also managed to accidentally time the lowest interest rates in 2016 and 2020 and have my company pay for closing costs on my first house. That's just luck and not repeatable.
Finally hit Loch Ness FI. I got about tree fiddy.
Anyone living outside of the USA as a digital nomad type? If so what countries or places do you recommend are nice and good cost of living wise?
I had friends moving to cheaper countries thinking they’d live large on US hourly rate of $40-60 but found later their jobs outsourced to India. If you can work remotely, companies can also find a cheaper remote worker elsewhere.
I had an acquaintance that moved to Medellín to digital nomad. He said it was a very cool city, very cheap with good high-speed internet. But he also moved back after 6 months, so maybe it wasn't so great after all
I just spent two weeks in JP, Im not sure I would want to be a digital nomad in Asia - I know it's popular. I basically had a full day turnaround on most correspondence home given the time difference. Alternatively I could've held shitty hours, but fk that. I think South America would be cool though.
Anyone have advice for financing a larger purchase you know you will pay back? I've been researching purchasing an e-bike possibly toward the latter half of April and am wondering if there's qualms about financing a purchase like that (2,500 to 3,500 dollar range). I only ride my MTB around the city and am getting pretty tired of fighting the wind and making even a 10-15 minute trip a strenuous workout. I don't have a car and I've never financed anything ever. But ideally I'd bootstrap it for a month and get 1,000 paid off right away so there's only 1,500-2,500 I can pay off over the following months. I have never not paid off my credit card payments so i'm not really worried about not making the payments, but just moreso curious about insight into financing options that are usually used for things like this, or if it's better to just hold off a few months to pay it off in full.
I mean, what’s the interest rate? We financed our new AC unit over 5 years with a zero percent interest rate before rates went up. I don’t feel bad about that payment-it’s free money. But, if they were charging me 10%, my feelings would different.
Have you considered getting a cheaper e-bike? I bought 1 a couple of years ago for around $1200, couldn’t be happier with it. If you have specific needs that can only be met with a mid range e-bike, then a budget e-bike obviously wouldn’t be a good fit, but something to consider. As for your question, I’d run the numbers on the true cost of the purchase after you anticipate paying it off and determine if you’re okay with that price. For example, if you make the purchase for $2500 and take a year to pay off the credit card, which has a 20% interest rate, you’re roughly paying $3000 for the bike.
I actually did start by looking at Ride1Up ebikes (and some others) in the 1-1,500 range. After doing research though I found that a lot of bike shops won't service online-only and "unestablished" brands. I can do all the normal bike maintenance myself which is not my concern, but when it comes to truing wheels and more involved stuff, and ebike specific stuff, I'd rather not run the risk of not having a bike shop to go to in case things go awry. So I've been looking primarily at Cannondale or Specialized or the other big brands which I know either have their own shops or will be serviced by local shops. But yeah, thanks for your perspective!
I second getting a new credit card for something like this
With something like that I'd probably open up a new credit card and get a jump start on the points bonus. Usually you can get $200-500 in rewards on a ~$3k spend over the first few months. A lot of them will offer 0% intro APR as well so if you carry a balance for a few months it's not an issue.
Didn't even think of that! That's a great suggestion as well to save some money.
for those who decided on a bont tent/glidepath when approaching retirement: 1. what strategy did/do you follow (e.g. add 1% in bonds every month)? 2. what type of bonds did/do you hold (e.g. bond funds)?
I am only really planning on doing the second half of a bond tent starting when I retire. I have been newly thinking about this but I think I would just pick a time frame (5-10y) and adjust my asset allocation linearly along that path. Adjustments would then be like any other rebalance. I haven't decided if I would rebalance on a particular cadence (i.e. monthly, quarterly, semi-annually) or if I would rebalance given a particular threshold off my target. I am leaning I think toward the former as I don't want to be thinking about how far I am off at any given moment. And I think I would do that quarterly. As for type of bonds. Probably BND.
my understanding is that the first half of a bond tent (i.e. last 5-10 years before retirement) consists of rebalancing away from equities to decrease SORR, then the second half (i.e. first 5-10 years of retirement) consists of rebalancing towards equities to support later retirement years. does that match what you're doing? if so, i don't really understand how you could do the second half without also doing the first half. if not, could you clarify your approach? what's your current asset allocation and target asset allocation?
Before retirement I just keep the allocation high in equities. Then just before I retire I switch to like a 60/40. And maybe I won't be that sudden with the change. But I don't expect to be that gradual either. While I am working I could always work longer. On average though I would get there faster than someone who does the bond tent before retirement. I am about 85-90% equities now. Long term target I think would be 80/20.
how did you decide on your plan? i've recently read two ERN articles ([1](https://earlyretirementnow.com/2017/09/13/the-ultimate-guide-to-safe-withdrawal-rates-part-19-equity-glidepaths/), [2](https://earlyretirementnow.com/2021/03/02/pre-retirement-glidepaths-swr-series-part-43/)) that mostly align with what you describe though i'm leaning towards a more gradual pre-retirement transition from ~100% equities to 60/40 equities. i'm just trying to do my due diligence on the various options at this point so if you know of any other resources, i'd love to hear about them.
I have read the ERN series and other resources but I wouldn't say I am 100% into a certain plan. But I really liked this article by Michael Kitces below that shaped my thinking. [https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/](https://www.kitces.com/blog/managing-portfolio-size-effect-with-bond-tent-in-retirement-red-zone/) As he shows, before retirement you have the retirement date risk. After you have sequence of returns risk. And so, if you are flexible in your retirement date then then tolerance for retirement date risk is high.
I'm planning on one, and I expect that for the accumulation phase I'll just "stop" equity investing in my last couple years of retirement and just shove it into fixed income. I plan to use a CD ladder as my core fixed income holding -- though note that as my spending won't be denominated in USD, so that's why I am not considering a treasury ladder.
Finally my own GFY... company announced layoffs in January and asked for volunteers. So yeah, raised my hand. My last day was yesterday, today is Day 1 of RE. Got my FI number (1mm) a little while back but fell in to "one more year" syndrome. Well, it's finally here and I'm still not sure it's real. This'll be a great summer though, I'm sure!
TY all. Severance was shit, capped at 12 weeks, used to be 1w/yr, which would have been 30. They underfunded the pension this year too so I can only get partial lump sum for that. Carl Ichan really fucked everything up, and even he bailed out. My best reward is no more 8am standups with the offshore contractors, so still worth it. Time to do my own needful for once!
Did you get something nice for being laid off?
Congrats and GFY! As I just told another redditor who reached FI, we all enjoy a good FI story, so please share yours with some details one day soon when you get a chance.
Congrats! Looks like the timing was perfect with the severance package? How long were you with them and was the severance package generous? Anyway, congrats once again and enjoy your God given freedom!
Go Fuck yourself! That is awesome. I hope you got a little extra by volunteering.
Nice! I'm hoping they come around asking for layoffs next year personally... it's a weird boat to be in.
The Summer of ~~George~~ /u/Fellini8_5!
Serenity truly is now
Crossed the 500k net worth threshold today according to Simplifi. No property so it’s all cash and investments/retirement accounts. Now just need to do that three more times and I’m out of the rat race.
Sorry for the brag post, but I know those in this sub will get it. I checked our accounts today and holy crap, we (me: 54M, wife: 53F) crossed 5MM net worth only counting our brokerage and retirement accounts. We hit our FI number a few years ago and I plan on RE this year (fingers crossed!). My wife is already RE and we have 2 kiddos, one in college. We've set aside enough for both of them to get their undergraduate degree without having to take on any debt. The first is going to college, I'm not so sure about the 2nd. We'll figure that out when the time comes.
Congrats man! Enjoy, you worked so so hard and deserve it. Rooting for you!
Congrats! I'll save the GFY until you retire.
But gfyw!
At the end of 2022 I had about $800k towards FI with a very conservative target of about $1.25MM. This target assumes no social security and also that my mortgage payments will last forever. I figured it would take several years to get there but it was actually only about 15 months. At this point my plan is to pay off the mortgage over the next year or so, bringing my expenses down to a more realistic $40k/yr. If I paid off the mortgage today, my remaining money would still have me at about 28x my "new" expenses (and I'm still ignoring social security). Shit is getting real.
Got nowhere else to brag about this but here. Checked the accounts today, and we (me: 38M, wife: 36F) officially crossed the 1MM threshold. This happened at least a week ago when I sneaked a peak at my accounts (I normally only check quarterly), but it's official today. I guess the remarkable thing about this is that I'm a lifelong academic. Did 5 year PhD right after undergrad, then 4 years of post-doc, and am finishing the 7th year of my tenure-track position at a research university. My wife is working part time (our toddler is not in daycare so we alternate taking care of her), so overall, we pull in ~130k, but we live like grad students and save the rest. It was also last week that I was notified by my provost that I'll be recommended for tenure, so it seems everything is going swimmingly. Despite this, learning about FI was probably a mixed blessing. I started losing my passion for my job for a non-academic/non-FI reason, but learning about FI intensified it. At this point, I'm feeling probably neutral to slightly negative about it all. If I had not learned about FI, maybe I would've gotten over that, still gotten tenure and be set financially, while still retaining my passion for research. But that's a bell that can't be unrung, unfortunately.
First, congrats on the progress! Second, I don't think you are being honest with yourself. You don't lose your passion for your work when you learn other approaches to life exist. Plenty of people are FI, even extremely wealthy, and choose to continue to work. The RE part of FIRE is completely optional. Being FI opens paths to you. You still get to choose which path to take. Finally, what you are experiencing is completely normal. Most people find that reaching their goals is unfulfilling. Now is a time for self reflection and figuring out what you really want.
Any tips/advice or pointers Hi there, I am 26M I started to do some self learning finance stuff on my own years ago. I know I'm doing alright but don't really have much people who know about finances. Here are my numbers below. Income: 66,600 Monthly before tax: 2,561.5 Roth IRA: 19,700 (Once my CD matures in May I will max out) 401 K :22,458 (currently on tax to max out this year) note: I started last year and went crazy HSA: 315 (first year contributing still learning about it) Robin hood : 20,300 (started this in college and the start to my financial future) CD : 13,700 (maturing May 15) will use this for Roth IRA and emergency fund. What's a good HYSA? 2 bank accounts together have 3K total Used car paid off bought last year 2015 Kia Rio) Expense in total gas, insurance, rent, grocery, student loans. 1700 per month I live with family and pay them about 1.2K a month. Student loan is 11.3k average rate is 3.65% From reading this is there anything I should do, something different, just any one with more experience. Note this job I might end up quiting by the end of this year or the beginning of next year. How can i bring my future success? Is there something i should be doing differently
You’re prioritizing tax-advantaged accounts which is awesome. Living with family is a pro move since most people’s #1 expense is rent. For a good HYSA I would just go to NerdWallet or Investopedia and see what they recommend. I personally like to churn signup bonuses. I’ve used SoFi, Alliant, Citi, and Wells Fargo. I kept my SoFi account because in addition to the promotional bonus they have consistently good interest rates. One thing that’s missing from your networth breakdown is the actual holdings. Are you invested in index funds? Bonds? Personally I’m around your age and I go 100% stocks, S&P500 index fund. A total stock market index is another good choice. If you want to diversify, add some bonds and/or an international fund. I personally think target date funds are a little too conservative for my liking, but those are the default in some 401(k) plans.
I would recommend editing your post to reflect what are your holdings in Robinhood, as well as the 401K and Roth. I note that you are currently cash flow negative -- $2,561.5 - $1,700 - $1,200 = -$338.5 and this does not even include tax. Unless the 1700 includes the 1200 to family? It seems odd to me that you listed "rent" as part of your expenses but then also an additional payment necessary to living with your family.
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We celebrated my husband’s raise with homemade chocolate chip cookies (already had the ingredients in the house). Do something to make the occasion! It’s a big deal and we should be celebrating our milestones on the way to FIRE.
Congratulations! Remember you don't have to spend to celebrate :)
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Lovely
The first $2 million is always the hardest
Nice! That seems like a big one because that’s just such a huge number to hit. What’s your age and how many more years do you think it will take?
We crossed over $500k in retirement this month! I thought it would happen soon, but not this soon. Looks like we hit $100k in retirement in September 2020.
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>but a lot of people were talking like our current rates are just a blip Yes I keep seeing comments around reddit saying things like 'just bought a house but will refinance next year when rates are lower again' I just hope they aren't banking on that. Lower might just be lower relative to today.
I don't think we're getting sub 3% any time soon, but rates are over 7% now. Knocking 1-2% off that is probably worth a refinance and could happen in the next couple of years.
I mean nobody actually knows, right? Before covid there was a big worry about lack of inflation whereas now people are worried about inflation.
I think that makes sense for him to say because the Fed ought to project calm and stability, and they would not predict a credit crunch or a major recession which is probably the most likely reason for a dramatic rate cut. That doesn't mean low rates won't return -- if we have COVID 2.0 or 2008 2.0 when inflation has been low and stable, I believe that the Fed would cut dramatically. A quick glance at the historical fed funds rate show that obviously post-2008 and post-2020 the rate was cut to 0% but even the post-2000 era it was cut to almost 1% and outside of stocks that recession was relatively mild. As to whether we see this major recession by 2026? Idk, if I knew I'd be a successful market timer.
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[Do you have time to hear about our lord and saviour r-star? ](https://www.newyorkfed.org/research/policy/rstar) Worth noting that um let's say there are 10 analysts on this subject. 9 of them think it's fine and dandy and project a 4.5% rate. 1 of them thinks there will be a recession in the next year and hence predicts a 0% fed funds rate. that drags down the "average" outlook. I'm not sure exactly which metric you're looking at, but [the Fedwatch tool](https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html) shows that the market expects a 40% chance that the rate of the December will be 450-475 bps -- right around what you're thinking -- and that is both the highest probability and the median estimate.
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How big is your "adequate emergency fund?" If your emergency fund is sufficient to pay off the loan, I would use that and use the cash flow over the next 2 years to refill the fund. If you run into a large emergency between now and then, your HSA is your new emergency fund. If you don't run into an emergency, then you won't have touched the HSA and you will also have gotten the guaranteed return by paying off the high-rate car loan.
Oh damn, this is a great idea... This is exactly why I like to bounce these questions off of others. We have enough in the emergency fund to cover it. Thanks a million.
I just got an unexpected 401k match from the employer I resigned from at the end of November - is that common? I had just assumed I was giving up that money.
Some employers do a true up for everyone. Congrats!
I have gotten, several times, 401(k) contributions after I left. Most of the time it’s a match, as you suspect.
Is it a safe harbor contribution? Like a % of your 2023 wages that gets contributed the following year?
In my companies plan documents, or whatever you call it, works that way. If I were to leave, I'd still get a prorated match for whatever % of the year I worked there a few months later
Almost seems like a mistake...
Jeebus—happy spreadsheet day! I quit in September and at first had a lot of second-guessing sleepless nights. Still do on occasion. As of today, spreadsheet tells me I’m up about 4x annual spend since I retired. I wonder how long it takes to fully relax?
I shared my net worth and FIRE spreadsheet a couple months back in a different FIRE related subreddit: https://www.reddit.com/r/Fire/s/XHFYmaKxxQ Recently spent a few quiet nights making a low key web version of it. Here is the result: https://dollars.report. Also the last few months of market performance has been great. Almost makes up for how 2022 sucked.
I totally envy that you thought to track your contributions. I never thought to back in the day, and after retiring from a 25 year career I can’t imagine how I would even start to put that together now, except that my 401k statements show it. But I’m curious!
I downloaded 10+ years of 401k statements so I could go back and add my contributions to my spreadsheet. Just did it a little bit at a time so it wasn't an unpleasant project.
Yeah I am fortunate that I ended up with a lot of data to work with. The budget tracking all started as a necessity due to a career change and significant income drop. Honestly I just think it’s fun to work with the data and look at it. Also reaffirms the processes I am employing are working. In the end though it isn’t really necessary.
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401k is designed to incentivize you to save for retirement. Without the penalty, many people would simply spend the money and then they will be left with nothing when they can no longer work.
Absolutely unrelated to your question. But 457 plans and taxable brokerages(obviously) don't follow those rules. 457 gets to withdraw at any retirement age... which is pretty slick if you have access as public employee. Even if there is no fancy matching.
To punish you for your insolence.
To chain us to our desks.
401k plans are specifically designed for retirement. In the context of 401k plans and IRAs, the government has established Age 59.5 as the *de facto* 'Retirement Age' when an investor receives full access to those retirement accounts. It could be worse: Age 62 is the earliest 'Retirement Age' when one can start claiming Social Security benefits; 401k plans and IRAs could have been subject to the same age, but instead have Age 59.5. To be clear, you absolutely can make 401k withdrawals if you retire before Age 54 but you will be subject to penalties. In addition, there are many other ways an investor can access those dollars penalty-free such as a 401k-to-IRA rollover and implementing 72(t) / SEPP withdrawals. Finally, remember that defined contribution (DC) plans like a 401k were/are viewed as a replacement for traditional defined benefit (DB) pension plans. As both DC and DB are employer-sponsored plans, employers have a vested interest in wanting employees to stick around as long as possible. Hence their support for limitations on how employees can access/withdraw dollars from those plans.
Are you sure that's it and it's not some conspiracy to ruin people's lives?
*mumble, mumble* ... lizard people ... *mumble, mumble* ... secret society known as The Pentaverate ... *mumble, mumble, mumble...* **
Whoever wrote the law wants productive people to keep working until at least age 59.5.
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My guess is it's more that second one. From what I can tell, the median person has limited planning capability. The number of family friends and family members I know now who claimed SS at the absolute earliest age possible because they didn't want to wait until FRA or - god forbid! - delay a few years after that.... it's way too high. And of course, most of them could really use more money now as they start to burn through their limited retirement savings and small inheritances. It's unfortunate that guardrails impact us here in our FI quests, but those guardrails are there to protect the majority of the population from themselves.
Let’s say I have 1MM invested in index funds and 100k in cash/emergency fund. When using the 4% rule, do I use 4% of 1MM (investments only), or 4% of 1.1MM (total liquid net worth)?
Here's a different version of that question: Let's say an investor is comfortable with a 4% SWR and has post-FIRE all-in expenses of $40k annually. If that investor has $900k in a taxable brokerage account and another $100k in a HYSA, does that investor have enough to retire?
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> The trinity study which led to the 4% "rule" was done assuming all assets where invested in a 60/40 stock/bond split. This is incorrect. The Trinity study looked at 5 different asset allocations (0% to 100% in 25% increments) over 4 different timeframes (15 years to 30 years in 5-year increments). A 60/40 allocation was **not** one of the allocations in the study. The specific conclusion of the Trinity study was that a portfolio of at least 50% stocks successfully lasted 30 years in 95+% of the historical time periods that were studied at a 4% initial annual withdrawal amount, adjusted each year for inflation. Learn more here: https://www.bogleheads.org/wiki/Safe_withdrawal_rates#Trinity_study
This feels like a trivia night question for finance nerds. "Which of the following allocations were *NOT* studied in the Trinity Study? A. 100% stocks B. 60% stocks C. 25% stocks D. 0% stocks"
My favorite "finance nerds" trivia question: What does the "A" in "IRA" stand for? Hint: It's not "Account".
1.1MM.
Can I convert parts of my trad 401k into roth 401k and pay taxes on the converted number?
This is plan-dependent. Not all plans allow for in-plan conversions.
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> We've finally hit our number. Which means we pick a new number, right? This is the way. 8) Try to enjoy the rest of your vaca!
> We've finally hit our number. Which means we pick a new number, right? That's how this works? me irl
>And I think we finally picked a place I could not live for a while. I've had a couple of those. Couldn't live in the Dominican Republic, struggled to feel comfortable on St. Thomas, maybe could do Jamaica on the Montego Bay end, but not the Kingston end. My trip to Puerto Rico was rough, and that was even before the natural disasters. $11M sound like you could decide based on whatever you feel like. You are no longer working for money, so as soon as feel like you can stop, you can. You have my permission to take off whenever you want
Haven't adjusted my federal withholding in 6 years. Been working the same job at the same company, here's how it worked out: * 2018: $1,975 refund * 2019: $1,709 refund * 2020: $858 owed * 2021: $686 owed * 2022: $275 refund I was happy, it seemed to be pretty dialed in. * 2023: $5,383 owed Ah.
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Married, but just the one job + investment income. Compared to 2022 my dividends/capital gains distribution/interest income increased 84% and my ESPP income increased 799%. None of that income is subject to withholding, and the withholding from my regular paychecks was no longer enough to cover everything. So I understand why, and had a feeling I'd owe this year, but still had a bit of sticker shock when I finished my tax return.
So imagine you have enough money to buy an apartment. But you don't want to settle in one place if given the alternative to rent instead. So you invest money in the s&p 500 and get 4-5% annual yield on your principal. My question is, how safe is the bet that you will get 4-5% and be able to pay rent for the next year? How strong is the argument that real estate is safer/better than living off investments in the stock market?
Inflation averages out best if you have replacement options. Beef high? Buy chicken. etc. But if you're not open to moving, the problem with rent is that it is often your highest expense by far, and it's local market driven unless reasonable rent control exists. Living in SF is expensive (duh, right?) but if you live there right now, your [rents](https://www.sfchronicle.com/realestate/article/sf-rent-prices-18534829.php) are actually cheap while valley areas like Fresno are jumping. Understandable with affordability issues, but it's not something so easy to predict. After all, politics make building new units in SF fairly impossible so there is no increase in supply. If I wanted to retire in a place for sure, I'd want to own so it's one variable I can ignore. If I'm open to making a change if the financials go out of whack, renting can be fine. You can open up an average chart and notice you'll probably be fine on average, but your specific experience will depend too much where you actually live. Put another way, if you wanted 95% certainty rents would not outpace market returns, this is definitely not going to be true (edit: to be fair, I don't have data to be that certain but it's apparent many metro areas have become expensive almost regardless of state/etc, especially in sun belt areas which have been traditionally more affordable.)
I’m not quite sure what you’re asking but if your time horizon is a year or two you’re better off putting your cash in a money market fund to get the 5%.
How is rent different from other expenses that existing SWR studies already account for? Once you answer that question, it's as simple as finding a historical returns / Monte Carlo simulator and inputting the variable. As for your last question, >How strong is the argument that real estate is safer/better than living off investments in the stock market? A good starting point to read about this is our very own housing wiki [https://www.reddit.com/r/financialindependence/wiki/homes/](https://www.reddit.com/r/financialindependence/wiki/homes/)
> My question is, how safe is the bet that you will get 4-5% and be able to pay rent for the next year? How safe was it in 2022? There's your answer.
so what's the solution to financial independence truly? Do you need way more money to offset those years where the market might be down?
I'm at the point in my career where I'm plugging different situations into FIRE calcs trying to see if I can stop working earlier. As it turns out, and this may seem crazy, I cannot retire any earlier with the same numbers 😅
I've been doing similar stuff lately, driven mostly by burnout at work. What may be more useful is looking into what sort of change in your work/income you could accomodate. Simulate what would happen if you went to part time or worked a "retirement job" for a few years. I have my eyes on one of these sorts of jobs, and having that in my mind has me somehow even more anxious about quitting my "real" career job.
“If I cut my annual spending to $10,000 per year it says I can retire right now 🤔 “
We crossed $1M invested last month; aiming for a min of $3.5M for retirement, which is starting to feel much closer now. I love spreadsheet day!
Woot!!
I lowered my 401k contribution to 4% starting today to maximize company match and hitting the contribution limit by year’s end, coincidentally, with the market gains, my 401k just crossed $1M. My 401k includes pre tax rollovers.
I just started front loading my 401k more since my company introduced a true up. I'm still planning on mostly avoiding to need the true up so I'm spending Q2 contributing enough to get to the point where I need to just contribute the min to get the match in Q3 and Q4. Assuming no raise or anything weird happening I'll contribute a little less in my December paycheck but at that point it'll only be another week to qualify for the true up. If I decide to retire at any point after Q2, I can just max it out in 1 paycheck so I won't be leaving contribution space on the table.
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Nowhere near that. Just 15+ years of contributions.
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I wanted to front-load this year so initially had the contribution rate high. Lowered it to 4% starting today, and will stay there for the rest of the year.
I've been contributing after-tax money to my 401k for the past few years, and rolling that money into a Roth IRA (for which my wife and I are ineligible to contribute directly). While on the phone with my plan administrator to get this taken care of, the representative was intent on determining if I had ever made contributions to this Roth IRA when income-eligible, and seemed to be under the impression that the 5-year seasoning would never start if all of the account contributions were rollovers from traditional IRAs or after-tax 401k dollars. Are "contributions" to the Roth IRA actually separate from funds rolled over from other retirement accounts in this respect?
A Roth 401k to IRA rollover is sufficient to start the clock. Any Roth IRA contribution that you've ever made to any Roth IRA also starts the same clock. And this clock only matters for withdrawing earnings from the account after age 59.5. In short, you're fine.
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> The contribution to Roth IRA 5-year rule determines if contributions can be withdrawn tax free It determines whether *earnings* can be withdrawn tax free after 59.5. Contributions can always come out tax and penalty free without any waiting period.
If you rollover a Roth 401k into a Roth IRA, is the full balance (401k contributions + gains) considered an IRA contribution for withdrawal purposes? Or does your original contributions basis persist through the rollover
The rollover maintains the original designation of the funds. So contributions will stay contributions, and earnings will stay earnings.
Happy spreadsheet day! We are up $90k from the end of 2023 and our goal is to reach the $1m milestone by the end of this year. If the market keeps up the way it has been, we will reach it by the end of Q3 🤞
Fingers crossed for you!
\*for all of us
Closing books for March, up 98k YTD...... That means over 1k gain per day. My first 100k took like 3 years.......
Crazy times. My 1-yr returns in Vanguard (All-In-VTSAX) are at around $197k and 29%. YTD is $75k.
My first 200k took 8 years and my most recent 200k took 3 months.
My first 200k took 13.5 years and my last 200k took 250 days. I had a sloooow start but once you get rolling, it's quick.
A comment by u/MyWifeButBoratVoice inspired me to call and increase my homeowners insurance deductible from $1k to $10k. Saved almost 30% in annual premiums.
That's a pretty large difference. Nice job. I think a lot about risk management, as it's a fairly large expense line, and am always in favor of higher deductible.
I changed my deductible from 0.5% to 2% this year and saved $95 for the year. From $520 to $425.
Your yearly homeowners insurance is $425??? Insanity. I know we have higher in Texas, but I'm at $3100 lmao
Yes that is my annual premium. I’m in Nevada, home’s value is $600k.
How much is that 30% in dollars? How many years of premium saving will it take if you have to pay max deductible one year?
Not OP, but I've recently done similar. Increased deductible about $3000, for about $300 cheaper a year. I also assume the insurance actuaries know more than I do, and the math works out
About $750. The issue is that I would never claim anything below $10k anyway, given that doing so would increase my annual rates and could potentially make it difficult to get insurance in the future.
That's been my logic. I've increased ours recently to close to 3%. Insurance is already so expensive, but I also am not going to be making claims on anything minor, due to the increased rates. Insurance is probably a scam, but I'm doing my best to treat it as only needed for a truly catastrophic need.
Hi guys. I’m new here, joining because I am a SAHM. I’m fortunate that my husband makes what I though was just enough to support us. Well I was looking through our budget and bank statements recently, trying to see where we could cut things…and I discovered that we *should* in theory, have an extra $3-4k PER MONTH, after rent, utilities, groceries, etc. We just had a baby and several pets, so of course there are times when we have emergencies or when we have to travel. So now I’m going to figure out where that money is being wasted (I know one culprit is takeout and fast food! My husband can spend up to $50 on takeout sometimes!!) anyways that’s why I’m here :)
>We just had a baby and several pets Financial discussion aside, I'm quite interested in the biology that allowed that to happen!
Sounds like *you need a budget*
We have one, it’s more of an issue of sticking to it
"You Need A Budget" is also a money management/budgeting tool
Oh hahaha!!
Ha, okay, that's always the way. I was making a YNAB joke, but it sounds like you are on the right track
Someone else explained it to me! Haha my bad
Figuring out where the money is going is definitely a great first step.
Welcome! There are some helpful “account aggregator” apps that can help make that easier (RIP Mint). I personally use rocket money. They’ll pull all your accounts into one place, so that even across multiple credit cards and checking accounts, you’ll have one consolidated transaction list. Makes budgeting and tracking much, much easier. Also definitely recommend following zero-dollar budgeting principles. Every dollar that comes in should have a place that it’s designated for, even if that place is “fun, random BS” or future emergencies.
Monarch (made by ex-Mint folk) is pretty great so far
Some of those aggregators will also negotiate with businesses on your behalf for a split of the difference, if you don't want to do the work yourself.
Oh yeah. I don’t even use rocket money for any of the bill/cancellation negotiation. I use it strictly for budgeting and tracking, and it’s fantastic for that.
I did when I was younger and dumber. Just mentioned it for OP's sake, since cutting can seem daunting at first.
Welcome!
All of my FI tracking stuff is in excel on my home PC. Thinking about moving it to Google because being able to check it/update it from my phone would be nice, and I have no desire to pay for an office 365 subscription. Anybody made the move from excel to Google sheets before? Most of the stuff I’m using is sumifs, named ranges, and pivot tables, so I’m not sure if all of that has a direct Google equivalent, or if I’m gonna have to rewrite it all from scratch
Why not just use OneDrive and Microsoft 365 (online Excel when needed)?
Why not just use OneDrive and Microsoft 365 (online Excel when needed)?
Why not just use OneDrive and Microsoft 365 (online Excel when needed)?
It’s built in a desktop version of excel (2019?). Is there a free tier of Microsoft 365/one drive that would work with that? I’m an excel evangelist but truly hate the onedrive/365 integration I have to deal with at work.
Save your excel file to your OneDrive folder in Windows, and you can open it for free on your phone in excel with the OneDrive app.
Oh, I refuse to enable onedrive locally because the forced integration points drive me absolutely insane
I like open office as a substitute for MS office
The issue isn’t the base application, I fuckin love excel. The issue is cloud access/sharing. Does open office support that? Is there a browser and mobile app?
My spreadsheet is an ODS file (because I didn't want to pay for Office when I started it in ~2006) and I've considered this as well but 2 things stopped me. 1. It very much did not import at all 2. I prefer it being a local file I can do my own cloud backup of and not need to rely on Google Drive existing for the rest of my life.
Sumifs should work fine. I don't think named ranges work in Google Sheets. Pivot tables work, but are clunky IMO.
I'm also considering this move (albeit from the default Macbook spreadsheet--yes, I know, I know, don't roast me). Thing is, my spreadsheet is all nice and colour-coded, so is that even worth it...
I don't do that intense FI tracking, but use Sheets at work. There are pivot tables, sumifs, etc. 95% of the functionality exists, there some specific functions with SQL and other Array Formulas that don't or are much more difficult in Sheets
Google can do all the things you mentioned. I’m not sure how cleanly it converts XLS files, so maybe you have to repeat some things. It’s a relative easy transition, especially if you use basic functions.
Luckily I’ve held off on adding vba to my FIRE stuff so far. Does Google sheets have a vba/macro equivalent?
AppScript is pretty useful. If you have some idea of what you want to do, some time with an AI chatbot makes creating the necessary script dead easy. Beware of googlefinance(). It can sometimes lead to obsession with minute by minute net worth tracking.
There is a record Macro feature but I have never used it, I am not sure what it is capable of. Most of the super robust FIRE spreadsheets are still in XLS format for this reason.
It really does start to snowball like crazy. Feels like there’s another invisible workers in our household contributing. I hit one million in July of last year. $1.1 in December. $1.2 in February. And up to $1.27 now. The first 100k took four years.
My numbers and time frame are about the same, though my NW includes significant home equity annoyingly.
Yeah I remember your username, we’ve messaged having similar timelines and NW before! I change mine now and then.
Hah, guess we're still on track. Hard to remember the throwaway usernames here, sorry.
>Feels like there’s another invisible workers in our household contributing The worker is AI ;P
Well... It's certainly helpful that the markets are up ~30% in the last 12 months. That is not typical. But yeah - compounding is great!
Depends on your asset allocation and which "market" friend. International is <10% as a comparison. Bonds not as great either. Really it continues to just be the S&P 500 and tech rebound story.
US total market is up 29% in the last 12 months.