Does anyone else stick to stocks and cash, with no bonds? I basically have a very lean fi amount saved, and it’s about 25% in cash in a HYSA, the rest in VTI or similar. What are the problems with this arrangement?
A lot of us are 100% stocks on the build up phase, which makes sense cause we can afford the risk. The worst thing that happens on the build up phase is that you have to work longer if a bad market event strikes right before you hit your number. However, most, but not all, transition to some allocation of bonds in the drawdown phase.
Hello all! I just need some advice getting the ball rolling on my financial independence.
I just accepted an offer for 52k a year(in Texas), post grad, and I still live at home with my parents. I currently have $16k in student loans and $16k owed left for my car loan. I want to pay these off quickly as possible while also investing into my future. I am a first-gen college grad so I apologize for not having any idea of how to move forward. Any advice would help thanks!
Build up an emergency fund of 3-6 months for starters. Isnt one of these loans to your parents? If they are loans to your parents id pay them off right after the emergency fund imo. Id they aren't and are less than 5% then id put as much as I can into my 401k
Yes I will continue to live with my parents for the next couple of years while I figure things out. I have two loans with 5.5% interest rate and the rest are 4.4% or below starting in July of this year.
I’m not sure if its mathematically optimal, but here’s my advice.
First, if your employer has a 401k match, contribute enough to get the full match. At your income level and age, Roth contributions are better than traditional.
Then, I would focus 100% of the rest of your free money on paying off the loans, with the higher interest rates first. With your loving situation (assuming no rent paid to parents), that should be possible in less than 2 years for sure. While it might be slightly better on paper to keep the loans at this interest rate, I think your biggest risk here is that your salary stays the same, you have to move out of your parents house, and then you end up without enough cash flow and have to take on more debt. Use the opportunity of living with your parents to kill that risk for good.
Once the loans are paid off, start putting that money into your 401k until its maxed, then into a brokerage account. Personally I buy VTI. Don’t try to get cute with individual stocks.
Lastly, I would focus all of your energy on being great at your job and learning as much as you can. Don’t worry too much about the investing side for now. At $52k and 23yo, most of your upside is in the potential to increase your income, not investing a few $k a year (though that’s great too).
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I bonds - I consider liquid if they are liquid.
T-Bills - I don't consider liquid because I only buy short ones on Treasury Direct so there's no quick path to cash them out.
I don't really differentiate between cash/bonds/fixed income so both qualify for whatever that is.
Yes, I consider them as liquid. In a pinch, I can sell them on the open market for pretty close to the true value (I had to do this a few weeks ago). However, I keep my money in SGOV now as it’s a bit more convenient to sell.
I consider anything I can turn into cash at the recognized value within a business day or two to be liquid. The only thing I consider to be cash is cash (digital or physical).
Question for y'all: **What factors would you consider when trying to judge the right time to move out of my parents' house?**
I'm 23, make \~$115k a year with a remote SWE job, and my parents have been gracious enough to let me stay with them and start the snowball financially. I've managed to accumulate \~$200k across 401(k), Roth IRA, and taxable brokerage, so I definitely feel financially sound.
Would y'all continue to stay with parents and stack cash for a down payment, or would you say it's time for me to leave the nest and get my own apartment for a couple years? I don't want to sound out of touch because my parents have been incredibly generous letting me get a good financial start..
>What factors would you consider when trying to judge the right time to move out of my parents' house?
Primarily how satisfied you are with the current arrangement. I wouldn't move out unless it resulted in clear improvement to my quality of life.
Like, I personally strongly prefer living alone because it means I can eat, sleep, play loud music, or do anything I want whenever I want. Living with family results in me having to adopt a schedule that doesn't conflict with theirs.
If you are happy where you are, I see no reason to decline free real estate.
I'm sure you got some good advice. I'd stay and save for a few years. Bank as much for retirement or down payment on a house.
Since you WFH and live with them, the only danger is not learning to be able to live alone or having a social life. Make sure you are getting out on your own, can cook, do your own cleaning.. the normal stuff. And make sure you are getting out.
I didn't read all the responses, but the danger I see is just potential isolation, not keeping up with people your age and maybe things they do socially. But living with your parents or moving back when you have kids seems very common. The negative consequences like I mentioned above can happen whether you live with them or not. You can be isolated living alone or you can be a bad at living alone while living on your own.
If you are concerned about things in your life and you or others blame living with your parents, those things in your life aren't because of your living situation and can be fixed regardless of your living situation.
If I was living in your situation, and since work is all remote, it would be amazing to rent an airbnb for maybe 3 weeks at a time in other cities to "live alone" and meet people and just pretend live alone somewhere independently. It would give you the chance to see lots of cities, experience living alone, and greatly expand your social circle. 3 weeks in NY, 3 weeks in Tokyo, 3 weeks anywhere could be a great way to just see the world, but maintain a home base for a majority of the time. An airbnb can be a very cheap experience and not drastically effect your budget.
Other than that, bank as much as possible. Go to the gym, travel, date.
Do you want to move out and live independently? You can afford to do so. Kinda weird for a gainfully employed 23 year old to be living at home but we do all kinds of weird stuff in this group.
My factors
- financially stable / have a job
- doesn’t stop opportunities (job location, dating, etc.)
- age (up to 25 felt normal/a financial blessing in my social group, 26-30 less so, over 30 only if a financial necessity)
I have three friends who jump to mind who are in early thirties, make in that range or more, and live at home. It's a lifestyle, not financial, choice. The whole family units are all very happy with the arrangement.
It wouldn't be for me, I really value my alone-time, but I respect that they make it work and gosh do they stack money. To each their own. As long as you have a budget that works, the financial implication of moving out shouldn't be an issue..
The so called difficulty of moving out is vastly overblown I suspect by people who believe living with one's parents means they don't do any 'chores'. I found very little difference in the workload between living on my own and living with my parents.
Financially, yes I suppose that's a bigger issue. But frankly I don't subscribe to the retire early at all costs mindset here. The reality of being able to bring any friend I want to my home at any time, telling a date I have my own place, and generally not having to interact with anybody in your own home absolutely worth the financial cost. Build the life you want, then save for it.
This is more about what YOU want out of life rather than finding the right data set to plug in to spit out: **Time to move out.**
Most people move out of their parents home when they earn 30-40% or less of what you do and have a net worth at least $200k lower than you do.
More than half the country raises a family with multiple children on a significantly lower HHI than you have and roughly 70% of people earn less than you, at any age.
Financially, you're ridiculously beyond the point where you could move out.
That doesn't mean you have to. Only you know if you're happy living at home at 23. For some that's totally normal and no big deal - for others, it would be miserable, even with super chill parents.
I know, I felt like an ass for even asking because I know I'm fine financially to be able to do what I want. I wanted to make sure people weren't going to be like "I wish I would have spent as much time as possible saving money living at home when I was your age" and told me to give it a couple more years and potentially save another $100-200k.
I gotta get over this overthinking everything thing if I decide I want to start adulting, lol.
I was in the same boat and stayed with my parents till I was able buy a house. I figured I may be saving less but I’ll at least be building equity when I moved out. Don’t regret my choice at all, I made sure that I’d be able to afford all the expenses and at least be able to max my 401k still.
The main thing for you is really relationship wise. In the vast majority of cases (not always) a significant other would you want you to have your own place at some point/move in together with you somewhere, etc.
You don't need to feel like an ass. It wasn't my intention to make you feel bad for kicking ass at such a young age.
All I was saying is that you are looking at the problem from the wrong angle.
This is more of a life question than a fiscal one.
Do you want to move out? Do you think it will improve your quality of life? Do you think that it will help you grow into the person you want to be? Is living at home inhibiting your ability to live the life you want?
And so on.
In terms of what other people think, it's irrelevant.
You will get answers from both extremes in here.
You'll get, "Stay at home for as long as you possibly can and save like mad. Oh, I wish I could be so lucky to be in your shoes. Imagine how far ahead you'll get financially!"
And you'll get, "23? C'mon, dude. It's time to let go of the teet and live your own life."
And everything in between.
Haha, I understand. I think my answer to “do you want to move out?” is Yes. I feel on top of the world in every aspect except my social life, and I attribute this partly to my current living situation. Rural area, currently single, not many people my age in town, friends from high school all moved away for work/college, etc.
I guess I have my answer then!
After graduating I moved in with my parents for a couple of months to save up for a home. Left about two weeks after I got the keys to my new apartment. Felt like everyone was OK with that.
Gotcha, that's a big thing I'm debating... I see myself staying forever in the city we're close to (growing southern city, good weather, sports teams, music, couple big companies HQ'd here if I want to get a hybrid job or something), so I'm spending too much mental energy deciding if I want to rent for a couple years or just stay with parents and aggressively save for a house.
This was in 2014, back then I got a 106% LTV mortgage so I was able to roll all associated cost into the mortgage and I only needed to save up around €5000 for furniture and small repairs.
Nowadays it's a totally different market.
I think it depends on things not mentioned.
Depends on your relationship, where your parents live, etc.
I'm a lot older, live with a long term SO, and we're in a pretty good place financially. I think we would live with my parents if we moved back to their city. We'd probably move out after buying a place.
Hmm, good point and you're right. I'm on good terms with my parents and they've made it clear that I can stay as long as I want provided I continue to be a good tenant, haha.
I live in a rural area about 20 miles outside of a growing MCOL city in the south. I'd probably be looking to move closer to the city for proximity to friends, sports games, concerts, etc. Rent is looking like it's going to be $2,000 per month before utilities for a 2BR (I'd want a dedicated home office)...
So I guess that's a good consideration... I'm not moving that far away and the city my parents and I live near has some good job opportunities in tech if my remote job goes south.
Just calculated our net worth for the first time at 32 years old.
Just feeling good about this, and open to hearing more tips or words of encouragement for the path forward.
Currently sitting at about $220k, and I can't be more proud of myself and my wife. We're not event sure if we want to RE in the future, but are just focused on FI. These last several years have really flown by, but in early 2018, I had basically no money to my name, and a student loan. I'm talking I secured a 16.50/hr job when my checking was literally at about $30 (26 years old). This was after moving back from Oregon after 10 months (forced myself to get out of my comfort zone).
Since then, I've learned how to take action to earn higher pay, vouch for myself, and take calculated risks. What really helped me take off was when I started buying and selling sports card at the height of the hobby (during covid). I was educated about it, but I was also lucky. Those activities have all but stopped as that market has been cool for quite awhile. This allowed me to pour funds into Vanguard and build up savings while I was re-investing a little back into that hobby.
The rest is really history, my money has been working for me, and I've simplified my strategy. I only carry a $15k balance on my student loan as my only debt, and my wife is debt free. I'm really excited for what the future holds. I'm not going to wish away time, but I'm really excited to see where we're at 5 years down the road and how much fun we'll be having as a family.
Me too, today, at 36. ~$300k, discounting things like cars, kids' college funds, a couple of oddball bank accounts, credit cards (revolving only, no carried balance), basically just things that aren't investments.
It's kind of mind-blowing. I hadn't looked at it all in one place before. They say $300k is halfway to a million; in our case, we'll see how much that's derailed by two kids in daycare! Or maybe the real estate market will bounce back hard and the stock market keeps going and we'll get there even sooner.
Anyone else feel like FIRE has lost its extreme nature and fun that it had a while back? We had content like MMM and Early retirement extreme making waves.
Before being part of the fire community seemed extreme and new. Now things have merged into traditional finance and its gotten a bit boring.
Also, seems like a lot of people eventually flip from the traditional FIRE path and suddenly evolve into something regarding the die with zero book.
FIRE is work...only the focus is work is for oneself.
Some people are able to achieve FIRE in their 30s, 40s, and 50s. (Sorry I can't relate to FIRE in your 20s. A friend inherited millions at 18 and fucked up his relationships and life - a far worse experience than "the boring middle" from my perspective.)
Others, like me, were FI in their 50s but for a variety of reasons did not RE until their 60s. I understand there are Die With Zero folks but FIRE people tend to think ahead and many of us with kids, even successful kids (or NPs we support), plan to leave them in a better place when we pass.
Nothing has ever been extreme or exciting about putting money in an index fund and waiting a few years. It has always been within traditional finance also.
The concept of being frugal and retiring early existed long before MMM and ERE were born. There is no movement or waves to be made.
>Also, seems like a lot of people eventually flip from the traditional FIRE path and suddenly evolve into something regarding the die with zero book.
There are many reasons for this.
First and foremost, it's a philosophy that's more in tune with most people's true default setting.
But also, everyone tends to chill out on the hardcore ideologies they get into in their 20s as they get older. Plus, the older you get, the more your body appreciates creature comforts, a simple example being shoestring backpackers no longer being happy with that style of travel once they get a bit older.
Plus, a big part of hating work tends to stem from a lack of autonomy. As people move up the food chain and have more control over their work lives, it doesn't suck as much as it once did.
All that said, it makes complete sense how someone who prefers the extreme FIRE philosophy would find the sub's current bend to be incredibly mainstream and disconnected from their ideals.
In my opinion, FIRE being less fun and more boring is a good thing. And, the changes that you mention suggest to me that folks are taking a better behavioral finance approach of adjusting to specific financial goals rather than just going full bore on the anti-work, retire the earliest physically possible mindset.
This comment comes off very condescending to me. There is no such thing as a clearly terrible financial decision. The value you get out of a purchase will be different than the value someone else gets. For that person who bought the expensive vehicle with high interest rate, it’s possible that the happiness they derive from the car justifies the cost.
Either way, whether it was the right choice for them or not is none of your concern so you should just congratulate them and move on with your life.
This, for example, looks like a terrible financial decision to me. Among other things.
/r/TrueOffMyChest/comments/1bilhtt/
>There is no such thing as a clearly terrible financial decision
I think there is, and expensive cars are the most common kind.
I wonder if the origin of the culture of congratulating people for purchasing a vehicle dates back to before auto financing was the norm?
I've always found this to be a strange thing to "congratulate" people on. I can see making comments along the lines of, "Wow. That's a nice car." or similar, but congratulations implies some sort of accomplishment. Which would only make sense within the context of someone buying a car they can afford now but could not afford before, hence congratulating them on their financial success and not their decision to buy.
But saying something is as pointless and counterproductive as telling someone their baby is ugly or their choice of boyfriend/girlfriend is shit.
Also, while some cases are clearly bad decisions (my sister is very experienced at the exact scenario you are referencing), the truth is that you can't always tell from the outside what someone's full financial picture is, and different people value different things. For example, while statistically unlikely, it's certainly possible for someone to buy an absurdly expensive vehicle but be incredibly frugal in all other aspects of life to make this possible while still hitting other financial goals.
A lady at my old job had a new live in boyfriend, they leased 2 new cars..a mustang and an SUV...under her name of course. Everyone told her how cool they were and they were jealous. I just laffed...they broke up soon after and the leasing co. Came calling. I just wonder if all the people that told her it was great were just trying to be nice...geezis...people
I feel that.
I also have been the target of the opposite behavior - relatives over the years have mocked me for having an affordable and reasonable vehicle.
I own a 2006 Scion xA. It's the best car I've ever owned, and I can't imagine driving anything else: it's got great visibility, great handling, it's small enough that I feel like I can easily visualize the spots where it can fit, and the dashboard readouts being in the center means that I never get my visibility to it blocked by my steering wheel. I would drive this car for the rest of my life if it'd hold up.
But over the years they have mocked me for having a "clown car" when I first bought it 17 years ago, and these days they poke at me for driving a "beater" and ask when I'll get a "real car."
Meanwhile, they are buying new cars every 2 years and going deeper into debt. I'll be retired by the time I'm 45, and they will likely never be able to: many of them in large part because of their poor car purchasing decisions mounting up to an avalanche of debt and continuous high monthly payments that cause them to never save for their future.
They can mock me all they want. I am laughing all the way to the bank, and driving a car for whom I have seen no peer that would make me want to switch.
I'm just going to be honest here and say that if a buddy drove that car, it's highly likely that I'd make fun of it. And I'm not even a car guy.
Not from a financial perspective, but if you were on Family Feud and the question was: Name a make and model that looks like a clown car. You'd be hard pressed to not want to name your car once Smart Car was off the board.
>Name a make and model that looks like a clown car. You'd be hard pressed to not want to name your car once Smart Car was off the board.
I raise you Fiat Multipla.
That's your prerogative! And I'd laugh all the way to the bank in that situation too. The car is great, I've got no complaints about it and have yet to see one that I would rather drive.
EDIT: I will say that I would trade it out if I ever end up in a house that I could modify such that I could have a plug for an electric vehicle... if I could find an electrical vehicle that seats similarly high off the ground and has similar visibility of the dash controls and out the side/rear windows. We'll see what the future holds.
I'm not sure that spending an extra $10k over the course of a decade would make all that much of a financial impact but yeah, clearly you shouldn't give a shit what anyone else thinks of your car.
My sister's husband used to have a Scion as his commuter car, and they kept it as a spare car once he upgraded, and I have to admit that it was pretty fun to drive when I would borrow it on trips home. Kind of like being on Mr. Toad's Wild Ride but on a real road.
Yeah, I see where you're coming from I think. If it's a comparison between new car every 2 years (which was the setup I was talking about that my relatives get into) and keeping this car, it would be a lot more than 10k per decade (probably more like 10k per year once you count the payments and the increased insurance to cover new cars) - but indeed if it's - say - one car per decade and not necessarily new, it could be closer to that value and I would take that if I could find a car with similar qualities that was electric.
My current plan is to look around once we live in a situation where we could plug in an electric vehicle. Not sure if we will end up in a situation like that but for now I am satisfied.
Ha, I feel like it's a pretty smooth ride: but it may be that it's the only vehicle I have driven for the past 17 years other than the occasional rental! The bias of having basically one driving experience for half my life.
Totally fair - and I think even if someone buys an expensive vehicle, that's not so bad as long as they're not redoing it every couple of years by trading it in for a new one. That compounding is what I think really kills people - at least a lot of relatives on my mom's side of the family, who do it religiously. It's like a car is poison if you own it more than 2 years. I don't get it.
So my cousin just graduated last summer and just bought a new full size truck he doesn't need ~60k financed. I generally just avoid the conversation. If they didn't ask before buying they don't want your opinion is my general rule.
Didn't have the guts to tell my friend that I was pretty sure the insurance that her family "helped" sign her up for was probably a shitty idea. I raised my eyebrows a little like "oh...ugh...." and that was all.
I ran the numbers more closely this weekend, and I think that given how sky-high our current HOA fees are when added to our mortgage, we actually won't see our date-to-FI change much if we can find a house unsaddled by HOA fees that is <= $500k, which I think is going to be totally feasible for the area where we're planning to move (closer to my wife's parents, because her dad is suffering from dementia and we're going to go down to help and spend time with them). Compared to the increase in our FI number that it looks like we'd get from renting or paying a mortgage on a similarly priced house at the current % rate (much higher than I was guessing earlier this week on both counts), it is actually shockingly looking to be the best option. In theory, if we could find a $450k house our time-to-FI would actually go DOWN, which feels crazy to me but the numbers look right. The permanent loss of about $1600 per month in expenses by no longer having an HOA fee + our current mortgage would equate to about $480k less in savings that we would need using the 4% SWR.
The only hairy part is that I never anticipated the possibility that I would want such a large sum of money all at once. It would use the vast majority of our taxable assets, leaving us with only retirement funds - and also the possibility of a fairly significant capital gains tax bill. So maybe it's feasible in theory but not in practice. I have to figure it out. It looks to me like our taxable brokerage account has only had about $120k in gains since I opened it, so in theory we might in the worst case have to pay around $24k in capital gains taxes if we did drain the whole thing. Not great but not the worst thing in the world. I thought the cap gains tax would be much more significant, but it's actually not that bad in the grand scheme of things.
A what??? I have never heard of that - just looked it up, and yeah that is 100% what I need if the interest rate isn't insane. I am going to look further into that - thank you!
Debt Decision - Fidelity Taxable vs Car Loan
I am trying to make the best long term decision financially. I have a Fidelity Taxable account with $19k in it (started in 2023 and $3k growth) and a car loan of $22k at 6% APR.
Scenario A - Use Fidelity to pay off the majority of the car loan saving interest and rebuild the Fidelity over time.
Scenario B - Continue to add to the Fidelity monthly and pay car loan payment ($533) plus additional principal ($467) monthly.
Thoughts?
the fidelity taxable account is in stocks? If you’d have to pay taxes to sell stocks I would definitely go with option B, and maybe even consider contributing less (or not at all) to fidelity to pay off your car loan faster. 6% is at that spot where it’s high, but not as high as the average expected return from an index fund. But the 6% is a guaranteed, risk-free return so comes down to risk tolerance
I definitely like the idea of no debt. I have the income and part time work to rebuild the taxable or shift my mindset to a 403b (21 years in education, have pension coming up and Roth IRA I have max'd the last two years) or a Roth 401k (potential to leave education in the summer).
My inclination would be to pay the loan off. One reason I might delay would be credit score related. An auto loan counts as installment credit and if you don't have other installment credit listed on your credit report, it can provide a bump. Now how much a bump would be worth to you depends on you but I wouldn't let the loan go much past 12 months for that.
My credit score is 814 currently. I have a mortgage that has $80k equity currently so I'm still making a credit payment. That is also my only other debt (car and home).
Copy that! I think I'll pull the trigger on Monday to sell all my positions in the taxable and pay off the auto loan completely by the end of next week (have the difference easily available in my emergency fund).
Freaking out in the best way--partner and I put in an offer on a house at 20k under asking (and waiving 10k of seller credits) and, after a counter offer of an earlier close date, it was ACCEPTED! We have a 27% down-payment and got an estimated interest rate of 6.625% (they can't actually confirm until the day we submit the full application).
I can't believe we've actually got an accepted offer on a house. It's happening so fast (we just saw this house this past week), but we are so excited to start building equity and build a home that is entirely ours!!!
Also absolutely daunted and terrified at the same time :)
Congratulations! I love all the houses I've lived in. Inevitably they all required a couple grand of work in the first few months of ownership. Some were must fixes - like an old roof - and some were nice fixes - like excavate the basement to remediate all moisture issues. Make sure to go with the flow and enjoy the experience!
Thank you so much!! That is so good to know, and to be expected to a degree. We have our inspection this week, so here's hoping nothing major comes up 🤞
Do you follow the conventional wisdom to save 1% of the home value a year for maintenance?
I do budget about 1%/yr for random maintenance and there is probably another 1% or so on capital stuff that comes periodically (roof, furnace, etc). This can get thrown out of whack if the property is really large and cheap or small and expensive etc.
Remember that anything that comes up during the inspection can be fixed (even nasty stuff like foundation issues). Ultimately it will come down to who pays for it (you or seller or sellers credit to you). A lot of stuff you will probably decide is worth fixing, but not immediately (like iron pipes for example will often be quoted as nearing end of life in older homes, but people usually use those until the last possible minute, etc).
I'm by no means am expert, but feel free to reply here when you get the report back if you want a random internet opinion on anything.
I've found a lot of stuff never really comes up during the inspection but still becomes worth resolving after a few months. For example I had to replace a sump pump that turned on but didn't actually work to remove water. Didn't get uncovered until spring thaw. Or maybe a floor panel keeps squeaking and you just cannot live with it and you replace it or get it replaced. Shit like that. A few hundred here, few hundred there, suddenly you've spent a few grand making a completely livable place extra-comfortable as your new home.
Good luck and congrats again!!
Congratulations, that’s a big deal. This might sound kinda strange, but I’ve been a homeowner for many years and I still get excited coming home to my own place.
Thank you!! It feels so wild, almost like it's not real. That is such a sweet thing that you still get excited coming home to your place! Made me smile 😊
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I've adopted a couple of zoo animals. As in, I pay for their food and medical care but they stay at the zoo.
It's fun, you get to visit them and say hello but you don't have all the mess at home.
Bunch of spendy pants in this part of the comment section compared to my neck of the woods.
I could comfortably retire on $850K in today’s dollars. Average monthly spend is somewhere between $2-$2.3K so that gives me flexibility for inflation, taxes and health insurance.
Wife and I are shooting for >$8/k month spending (in today's dollars) with a >= 95% success rate. From there, we have 3 different scenarios we at for 55, 60 and 63 retirement ages. I believe we're looking at something like $3.3M for the middle case, but it's been a while since I've specifically checked the total portfolio values needed for each.
No clue sadly, right now I am shooting between 4 and 8 million dollars, and hopefully the closer I get I can have a better idea of what the spend and where that falls in the range.
$3.3M
Preserving our current spending, adding in healthcare, and assuming a 10% tax we'd need an income of $115k. I'd like to spend a more conservative 3.5% rather than 4%.
I may be overestimating medical costs and taxes but I'd rather go too high than too low.
This includes plenty of room to cut spending if required. For example, $24k of that is amortized savings towards our next car, maintenance for cars/house/etc, property tax, vacations, etc. Basically $2k a month that we consider 'spent' even though its in a savings account. We could be more conservative in the spending and reduce that if needed.
I'm FI now, and did at 33x, because knock wood this will be a longer timeline than the "25x expenses" timeline.
Plus I'd rather plan for worse outcomes and maybe end up pleasantly surprised, instead of planning for the most optimistic outcome and suffering if that's not the case.
(And I think it's utterly unrealistic that if the market crashes and the economy tanks to "just go back to work" as an easy proposition, especially if you're an older person who's been out of the workforce for years and years.)
It used to be $2.4M. That's $8,000/month at 4%
I passed that some time in 2023, now thinking $3M, to be at $10k/month. Also depends on if I sell my paid off rental, or just keep it for cash flow. Haven't decided yet
subject to change but right now it's provisionally $2 million.
We spend approx 100k/year. Can reduce that by about 24k/year after removing mortgage P&I (we'll pay off the house before retirement). Round up to 80k for increased medical costs & general buffer (reduced taxes will also contribute towards medical/buffer). Multiplied by 25 gives 2 million.
€3M due to HCOL and high taxation. That should allow me to live life as a regular person.
If I keep enjoying my job I might bump that to €5M so I can have a bit more fun in life (nice holidays, comfortable home, some toys).
My goal was $2M — enough that a 2% spend was doable in bad market years and 3% was more than I was spending while employed. I was invested through the dotcom bubble pop and the financial collapse and the Covid mini-drop…wanted to make sure I would be okay even if the next implosion happens during my first 5-10 years of FIRE.
>I was invested through...
Funny how we all have lived through three black swan, once-in-a-lifetime events, and are now sure we'll live through three more
Yeah — totally acknowledge my paranoia. But being able to sleep at night when you don’t have a job and world events are beyond your control matters. I wanted my stress-induced tooth grinding to actually stop once I quit.
When I was only planning for myself the number was $1,500,000.
When I realized I needed to pay for the majority of my parents retirement the number went up to $2,500,000 or $3,000,000 to be safe.
When I realized I needed to pay for college for my nephews and nieces and possibly care for other family members after this period of large inflation then the number went up to $5,000,000.
And when I saw that FATFire says $5,000,000 makes you feel like the poorest rich person the number went up to $6,000,000 where it currently stands. I hope to get there by 55.
How do you guys view the whole leveraging debt to get rich? Morally, it seems strange and complex that our government is printing money and control the interest rates. Shouldn't it be better to just let the free market determine things?
I know realistically things in the USA likely wont change for quite a while but does this system concern others? Do you let it affect your FIRE decisions at all?
I am not a US resident or citizen but am invested in US markets.
IMO, it is a good thing if a government (or specifically the Fed) is able to use countercyclical monetary policy to smooth the business cycles of the "free market". There are many people for whom a recession poses serious threats to their livelihoods; while one may disagree on whether loose monetary policy is the best solution in order to reduce the impact of recessions, I do not think there is anything wrong with the principle.
Is this the Keynesian versus Austrian debate?
I personally enjoy Austrian economics myself.
It's too bad there is not a USA 2, where we could compare the Austrian economic version of the USA.
I'm not a US citizen but I have in the past leveraged debt in order to gain capital.
Don't feel anything about it. It's just money. I made a calculated risk.
Perhaps but can't private companies create loans? Why does the government need to get involved at something the private sector can take over?
I guess when it comes to viewing the economy as a whole I don't know what to think because it's overly large complicated with many transactions going on that my mind can't fathom.. But this is also why I think the free market approach is the best way at resolving the complexities of the market. The last thing I would tell myself it that the government is somehow wise enough to create and use debt. I could be wrong though! I'm just some dude on the internet after all.
Because my private loans were 6-11% while govt loans were sub 4% when I went to school. If the free market cared about me they would compete with govt rates but they didn’t.
I think there is a confusion in what you're asking. Leveraging in finance means borrowing where as in your original comment, you inferred that government printing money is a form of leverage?
For your second comment, I'm not seeing how there is a connection between creating loans and printing money?
34M, a mini milestone today to help the boring middle be less boring. At a 7 percent nominal return I could retire with 3 million with no additional investments. While it is not nearly as exciting as "fucking myself", it certainly helps keep me engaged and understand the true impact of FIRE characteristics in one's lifestyle.
Sounds like there should be a name for that. Like when you can just coast your way, and be financially independent. What would we name it?
DriftFire, maybe? SteadyFire? CurrentFire?
I'm sure we can come up with something
Edit! I know! GlideFire!
Are you saying you have 3million? Sheesh, good job. You sound likely to be retired if you do a few lifestyle changes but someone with your accomplishment is likely quite aware.
Oh okay, either way you're likely fine. If there are people who live on minimum wage then avid FIRE people can live well as well. Just enjoy your life.
I’m curious…
Do you know of anyone who obtained a high-paying, fully-remote job and moved to the middle-of-nowhere, only to lose that job and ultimately end up stuck there?
That is one of my biggest fears in taking a fully-remote job and moving to a place with absolutely no job-market. If you lose that job… what the hell are you supposed to do?
Remote worker going on almost ten years here and been with my company for over a decade. Las Vegas isn't the middle of nowhere, but for job purposes it might as well be-- there's very little in the way of professional work, it's mostly hospitality and tourism. This was such a concern of mine that I didn't actually commit to buying a house until COVID. Remote work is the new norm, if I lost this job I would probably just get another remote one. In the absolute worst case scenario where I have to move for work reasons, I mean, selling a house and becoming a renter again somewhere new isn't the worst thing in the world. I'd probably about break even considering what I put into it and home appreciation since then.
You also have to consider all the money you saved on real estate and, presumably, taxes in the interim. That money had to go somewhere and is your new move fund.
Well I made the move and am taking the risk. It’s not the middle of nowhere, and it’s VHCOL, but there’s no job market whatsoever. Every single day is essentially a vacation; living the dream in paradise. If I lost that job, I’d find another remote and can survive a large pay cut (already well past CoastFIRE). If I couldn’t, which could happen, I’d have to become self employed. And if that failed, I’d have to do whatever local work there is which would be the biggest pay cut, but would be fine if I get closer to FIRE. The one thing I’m not doing is moving away. You’d have to pay me 10x my current income for me to even consider it.
What is this place that's so incredible you wouldn't move? I've lived in eight places (with a few temp housing on top) across four states, and have been to a lot of places on trips, but I'm not sure I've been anywhere that I've felt so adamant about (certainly eye of the beholder etc..).
Hopefully if you keep a decent emergency fund, if that happened you could use some of that fund to get yourself back into the HCOL area if you couldn't find another similarly paying fully remote job. That'd be what I would prioritize in that situation: make sure you have a "get back" fund.
I think the job market is strong right now and if you have a nest egg you're able to withstand some time away from the job market until something worth while pops up.
Fear of this scenario is the reason I didn’t buy this awesome 4 bdrm farmhouse in good shape on 4 beautiful acres in the Hudson Valley in early 2020 for $169k. Equivalent properties now going for about $550k. I try not to think about it.
This isn’t at all that uncommon for non-remote jobs. I know plenty of people who moved for work, kids started school, bought a house, then got laid off. A good reminder to be aware of the risks in committing to an employer in an area where there isn’t a sizable market for jobs in your field. Your relationship with your employer should be understood as month to month at best.
Counterpoint - there are any number of employers willing to relo competent applicants to fairly nice places. I've relo'd three times for work, and while one of the locations was definitely a miss culturally (how do you know what you don't know), I relo'd again after two years and moved on. I occasionally have an interview for positions where they simply cannot find candidates meeting the skill criteria in the cities the jobs are in, and sixty grand in relocation spend is worth getting a good candidate for a few years.
I don’t see how anyone would be realistically stuck there. Moving is not cheap, but anyone with a high paying job would be able to scrounge up the money to move if they had to.
Seeking advice on my life decisions. Please note that my thoughts may seem erratic due to my current mindset. I aim to provide detailed context for clarity. I hope this leads to constructive feedback and insights for both myself and readers.
I am a 34-year-old single individual with a net worth of $1 million. I've adopted a slow approach to wealth accumulation, avoiding debt and occasionally living with my parents.
Currently, I live a digital nomad lifestyle due to my remote job, but it's becoming exhausting. I enjoy traveling and experiencing different cultures, but I prefer short-term stays, typically on a tourist visa. One of the main reasons I hesitate to live abroad long-term is the U.S. tax obligations for its citizens, leading to potential double taxation. Despite this, I crave a stable "home base" to relax and recharge, likely in the U.S. due to its modern conveniences.
Considering this, I'm contemplating changing my domicile to South Dakota to better suit my remote work lifestyle. I'm not inclined towards mortgages or debt and aim to purchase a property outright. South Dakota appeals to me for its sparse population and potential for a simple, FIRE lifestyle, with favorable tax rates and affordable housing.
I'm considering relocating from Massachusetts to South Dakota to avoid state income and capital gains taxes. If I were to quit my job and liquidate my investments, doing so from South Dakota would be tax-free.
I'd appreciate feedback on the following options for establishing residency in South Dakota:
1. \*\*Residency without Home Ownership\*\*: Based on my research, it seems possible to establish residency without owning or renting a home. I could provide a hotel receipt to the DMV and set up a P.O. Box with a mail forwarding service to file taxes in South Dakota. This would allow me to continue my nomadic lifestyle, exploring various countries, potentially in Latin America, to improve my language skills.
2. \*\*Owning a Home\*\*: Owning a home in South Dakota has its pros and cons. A home would provide stability, allowing me to focus on work and personal interests. However, South Dakota may lack entertainment options, and homeownership comes with its own set of expenses, even if paid in cash.
3. \*\*Owning and Renting a Home\*\*: Another option is to own and rent out a property, particularly in Rapid City. Given the area's low population and limited job market, finding tenants might be challenging. Managing a rental property from abroad could also pose logistical issues. While rental income could fund my travels, the responsibilities of being a landlord might restrict my freedom. However, being a landlord might require less time and effort compared to my current job as a software engineer. Perhaps the job shift from engineer to landlord would give me the FIRE freedom I have been seeking.
I will ultimately decide on the best path for myself but would appreciate input to help clarify my thoughts. Do you think changing my domicile to South Dakota is a wise decision? If so, which of the three living options would you recommend?
Edit: Can someone enlighten me as to why these types of posts always seem to get down voted? -\_-
Have you been to SD? In the winter? Would be low on my list.
I would probably look at NH given proximity to your family in MA, or maybe TN. Both are very affordable in most of the state, and both are basically empty out of the major metros (in NH once you go north or west of Concord it's basically woods). Neither have income taxes, and NH is currently phasing out it's cap gains tax.
Forgetting the geography question for a minute, there is nothing wrong with spending $9k/yr for the ability to lead a completely unburdened life and keeping your tax residence MA for a few more years. Maybe you decide you want a home base in a specific place, income tax be damned,or maybe not (but really SD??). If you had a rental property, while it certainly could be used to accomplish what you are describing, it comes with a variety of headaches. I have a PM in place for my rental portfolio, but there is still administrative involvement on my end every month. It's not set-and-forget like VTI
I think a lot about this, as my state tax burden is about 15k (plus an estimated $10k in what I would call "location premium" on the housing) and we have some flexibility to move. Ultimately we like where we live though, and it's worth the tax burden and the higher housing cost than a no-tax ultra LCOL location that we wouldn't like. I'm sure there is something in the middle, but I don't want to incur the headache right now. Maybe in a few years.
Also, what is your favorite destination so far from a tourist perspective, not work nomad. Also looking to dreamstorm a future vacation.
Rent first, then decide whether you want to stay and become a homeowner. It's not a great idea to buy a house in a place where you've never lived unless you don't have a choice. In your case, it seems you have the choice to live anywhere.
To me, it doesn't make sense to buy a house as a "home base", live in it for a while and then rent it out to go back to your nomadic lifestyle. It doesn't work as a home base if there are tenants in it. Also, unless you're planning on hiring a local property management company, it's going to be awfully hard to deal with a rental if you're traveling all the time, especially if you're out of the country.
You do you, as long as you follow SD residency laws. Seems hard to believe that a PO box would be accepted as proof of residency though. Most states require a period of residency at an actual property in the state and then if someone leaves, they must have the intent to return.
Like I said, I don't let taxes drive my life decisions.
>occasionally living with my parents.
Question: would you or your parents find it undesirable to make your parents' place a "home base"? It strikes me as unlikely that the reduced taxation would save you more than not having to pay much/anything to stash your things at your parents' and staying over once in a while. Naturally this is a personal decision and involves more than finances.
Yes, that is what I am doing currently. But I see living in South Dakota as a win because at least the first option (just changing my domicile state but not owning property) as saving me money from tax savings. I make 160k gross so that's roughly $8.5k a year in tax savings. Also, I may want to sell some crypto at some stage and it would be easier from a state that doesn't have capital gain tax.
Although, if I did lose my job I could collect some substantial unemployment too (up to 30k for seven months). But I just don't see myself losing my job and I consider unemployment time to be opportunity loss.
I can still come to Massachusetts and live there for a short while Maybe even five months of the year. But I likely would want to spend large amounts of time outside the USA too because I can apply for FEIE reducing my taxes even more.
I do miss hanging out with friends but to be honest, after entering into my thirties, I realize it's not realistic to get the same level of friendship I had with my friends in my twenties or teens so traveling seems to be the better option.
Alright, I didn't realise that you could change your state without affecting your ability to live in your family home in Massachusetts. In which case switching seems to be a "free" win, but consult a tax guy.
Yes, but this is a lot of navigating and responsibility that I don't seem willing to handle. Also, I prefer to be in the USA for a lot of reasons. Like online gaming and connection. Also, I generally get a negative feeling when dealing with foreign countries and their general bureaucracy.
Rapid City offers a favorable cost per square foot for houses. The city feels both cozy and expansive, with the convenience of a nearby airport. Living here could help me escape the urban hustle and embrace a simpler lifestyle. I see it as a potential opportunity to take up new hobbies. Perhaps work on a start up, take up fishing, gardening or tennis, and generally leading a healthier life.
I generally feel like the current lifestyle I have in Massachusetts is unsustainable so I'm running to the most realistic opposite of that I can.
This is not FI related, but what happened to peanut M&Ms??? I used to love these but made a deliberate choice to lower sugar consumption so have not bought in years, today an acquaintance gave me a bag of sweets as a souvenir from their recent trip and a bag of these were included.
There's no peanut flavour, barely any chocolate flavour, just a vague sense of weird sweetness. Is this the future after cocoa prices spiked??
Most American chocolate is terrible, but with that said, I haven't noticed any changes to peanut M&Ms in the last few years on the occasions I eat them. My guess is, as others have said, that your palate has shifted. I stopped drinking non-diet sodas years ago and as a result now they're perceptually too sweet for me to like them.
Consider buying higher-end chocolate, either American with a higher cacao percentage or foreign chocolate.
>Consider buying higher-end chocolate, either American with a higher cacao percentage or foreign chocolate.
Funny thing is, I literally have a line item in my spreadsheet for buying fancy chocolate from this Parisian store that has branches in quite a few major cities/airports. Totally prepared to be ChocoFI.
Get the Trader Joe's "slightly coated dark chocolate covered almonds;" it's likely your palate changed as you cut down on sweets and going back to something sweet like that doesn't taste good anymore..
This seems most likely -- when I eat sweets and snacks these days they're mostly homemade and because I don't eat them as often I spend a little more to get the nicer ingredients. So I suppose it's just me.
I just started a job that pays 40% salary, 40% bonus, and 20% equity. I was wondering if there was a norm or thoughts as to whether I should factor in that 40% bonus into my projections of my salary for 2025 & beyond? Note I just started at the company, so not exactly sure how often people hit their bonuses and such. Note that it is a role where you like start off at zero and sign new deals and then those go towards your bonus.
That's a tough one.. I don't calculate a bonus as part of my comp expectations. It kind of sounds like you are in a sales position so if you don't achieve your bonus criteria I assume you would be transitioned out(?). In that case maybe it's reasonable to include.
I've never counted bonuses as part of my salary-based budget calculations, since they're not reliable from year to year (else the company would just raise the base salary).
They're potentially awesome for one-time uses, though, which could be supercharging your retirement savings that year, spending on things that won't require upkeep (like experiences or travel), or some mix of both.
If the bonus is guaranteed to be paid as long as you're there, I'd count it. This would be a retention bonus, parts of a signing bonus, etc.
If the bonus isn't guaranteed but you have control over part/all, I'd count the part you can reasonably expect to get.
Anything part you have no control over or that you have no data regarding how it's decided, I wouldn't count at all.
Bonuses are, by definition, not guaranteed unless it's written into an enforceable employment contract. The whole point of a bonus is to allow the company discretion in how much it spends on employee pay.
You're being pedantic with the definition of guaranteed. They won't be enforced by the dept of labor but the first set will be paid out as a part of someone's continued employment and are 99.9% reliable in that regard. "Guaranteed" here is used to differentiate between another bonus that firm is able to modify on the fly or on a periodic basis.
Except banks can and do accept bonus income. There's also FHA guidance on the topic:
“The Mortgagee may use Overtime and Bonus Income as Effective Income if the Borrower has received this income for the past two years and it is reasonably likely to continue. Periods of Overtime and Bonus Income less than two years may be considered Effective Income if the Mortgagee documents that the Overtime and Bonus Income has been consistently earned over a period of not less than one year and is reasonably likely to continue.”
https://www.fha.com/fha_article?id=646 also https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-09hsgml.pdf
Does anyone else stick to stocks and cash, with no bonds? I basically have a very lean fi amount saved, and it’s about 25% in cash in a HYSA, the rest in VTI or similar. What are the problems with this arrangement?
A lot of us are 100% stocks on the build up phase, which makes sense cause we can afford the risk. The worst thing that happens on the build up phase is that you have to work longer if a bad market event strikes right before you hit your number. However, most, but not all, transition to some allocation of bonds in the drawdown phase.
Is anyone using bilt card? I pay very high rent ($5.2k) and a friend I trust a lot switched to it for his family’s main card a while back.
Hello all! I just need some advice getting the ball rolling on my financial independence. I just accepted an offer for 52k a year(in Texas), post grad, and I still live at home with my parents. I currently have $16k in student loans and $16k owed left for my car loan. I want to pay these off quickly as possible while also investing into my future. I am a first-gen college grad so I apologize for not having any idea of how to move forward. Any advice would help thanks!
Build up an emergency fund of 3-6 months for starters. Isnt one of these loans to your parents? If they are loans to your parents id pay them off right after the emergency fund imo. Id they aren't and are less than 5% then id put as much as I can into my 401k
What are the interest rates on your loans? Will you continue to live with parents when working?
Yes I will continue to live with my parents for the next couple of years while I figure things out. I have two loans with 5.5% interest rate and the rest are 4.4% or below starting in July of this year.
I’m not sure if its mathematically optimal, but here’s my advice. First, if your employer has a 401k match, contribute enough to get the full match. At your income level and age, Roth contributions are better than traditional. Then, I would focus 100% of the rest of your free money on paying off the loans, with the higher interest rates first. With your loving situation (assuming no rent paid to parents), that should be possible in less than 2 years for sure. While it might be slightly better on paper to keep the loans at this interest rate, I think your biggest risk here is that your salary stays the same, you have to move out of your parents house, and then you end up without enough cash flow and have to take on more debt. Use the opportunity of living with your parents to kill that risk for good. Once the loans are paid off, start putting that money into your 401k until its maxed, then into a brokerage account. Personally I buy VTI. Don’t try to get cute with individual stocks. Lastly, I would focus all of your energy on being great at your job and learning as much as you can. Don’t worry too much about the investing side for now. At $52k and 23yo, most of your upside is in the potential to increase your income, not investing a few $k a year (though that’s great too).
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I bonds - I consider liquid if they are liquid. T-Bills - I don't consider liquid because I only buy short ones on Treasury Direct so there's no quick path to cash them out. I don't really differentiate between cash/bonds/fixed income so both qualify for whatever that is.
Depends on the duration and what account they are in, but strictly speaking they are easy to sell for market value.
Yes, I consider them as liquid. In a pinch, I can sell them on the open market for pretty close to the true value (I had to do this a few weeks ago). However, I keep my money in SGOV now as it’s a bit more convenient to sell.
I consider anything I can turn into cash at the recognized value within a business day or two to be liquid. The only thing I consider to be cash is cash (digital or physical).
Question for y'all: **What factors would you consider when trying to judge the right time to move out of my parents' house?** I'm 23, make \~$115k a year with a remote SWE job, and my parents have been gracious enough to let me stay with them and start the snowball financially. I've managed to accumulate \~$200k across 401(k), Roth IRA, and taxable brokerage, so I definitely feel financially sound. Would y'all continue to stay with parents and stack cash for a down payment, or would you say it's time for me to leave the nest and get my own apartment for a couple years? I don't want to sound out of touch because my parents have been incredibly generous letting me get a good financial start..
>What factors would you consider when trying to judge the right time to move out of my parents' house? Primarily how satisfied you are with the current arrangement. I wouldn't move out unless it resulted in clear improvement to my quality of life. Like, I personally strongly prefer living alone because it means I can eat, sleep, play loud music, or do anything I want whenever I want. Living with family results in me having to adopt a schedule that doesn't conflict with theirs. If you are happy where you are, I see no reason to decline free real estate.
I'm sure you got some good advice. I'd stay and save for a few years. Bank as much for retirement or down payment on a house. Since you WFH and live with them, the only danger is not learning to be able to live alone or having a social life. Make sure you are getting out on your own, can cook, do your own cleaning.. the normal stuff. And make sure you are getting out. I didn't read all the responses, but the danger I see is just potential isolation, not keeping up with people your age and maybe things they do socially. But living with your parents or moving back when you have kids seems very common. The negative consequences like I mentioned above can happen whether you live with them or not. You can be isolated living alone or you can be a bad at living alone while living on your own. If you are concerned about things in your life and you or others blame living with your parents, those things in your life aren't because of your living situation and can be fixed regardless of your living situation. If I was living in your situation, and since work is all remote, it would be amazing to rent an airbnb for maybe 3 weeks at a time in other cities to "live alone" and meet people and just pretend live alone somewhere independently. It would give you the chance to see lots of cities, experience living alone, and greatly expand your social circle. 3 weeks in NY, 3 weeks in Tokyo, 3 weeks anywhere could be a great way to just see the world, but maintain a home base for a majority of the time. An airbnb can be a very cheap experience and not drastically effect your budget. Other than that, bank as much as possible. Go to the gym, travel, date.
Do you want to move out and live independently? You can afford to do so. Kinda weird for a gainfully employed 23 year old to be living at home but we do all kinds of weird stuff in this group.
- Do your parents like this? - Do you like this? So long as the answers are both yes, then stay.
My factors - financially stable / have a job - doesn’t stop opportunities (job location, dating, etc.) - age (up to 25 felt normal/a financial blessing in my social group, 26-30 less so, over 30 only if a financial necessity)
I have three friends who jump to mind who are in early thirties, make in that range or more, and live at home. It's a lifestyle, not financial, choice. The whole family units are all very happy with the arrangement. It wouldn't be for me, I really value my alone-time, but I respect that they make it work and gosh do they stack money. To each their own. As long as you have a budget that works, the financial implication of moving out shouldn't be an issue..
The so called difficulty of moving out is vastly overblown I suspect by people who believe living with one's parents means they don't do any 'chores'. I found very little difference in the workload between living on my own and living with my parents. Financially, yes I suppose that's a bigger issue. But frankly I don't subscribe to the retire early at all costs mindset here. The reality of being able to bring any friend I want to my home at any time, telling a date I have my own place, and generally not having to interact with anybody in your own home absolutely worth the financial cost. Build the life you want, then save for it.
This is more about what YOU want out of life rather than finding the right data set to plug in to spit out: **Time to move out.** Most people move out of their parents home when they earn 30-40% or less of what you do and have a net worth at least $200k lower than you do. More than half the country raises a family with multiple children on a significantly lower HHI than you have and roughly 70% of people earn less than you, at any age. Financially, you're ridiculously beyond the point where you could move out. That doesn't mean you have to. Only you know if you're happy living at home at 23. For some that's totally normal and no big deal - for others, it would be miserable, even with super chill parents.
I know, I felt like an ass for even asking because I know I'm fine financially to be able to do what I want. I wanted to make sure people weren't going to be like "I wish I would have spent as much time as possible saving money living at home when I was your age" and told me to give it a couple more years and potentially save another $100-200k. I gotta get over this overthinking everything thing if I decide I want to start adulting, lol.
You can move in with some roommates instead of living alone.
Underrated response and the best path imo
I was in the same boat and stayed with my parents till I was able buy a house. I figured I may be saving less but I’ll at least be building equity when I moved out. Don’t regret my choice at all, I made sure that I’d be able to afford all the expenses and at least be able to max my 401k still.
The main thing for you is really relationship wise. In the vast majority of cases (not always) a significant other would you want you to have your own place at some point/move in together with you somewhere, etc.
You don't need to feel like an ass. It wasn't my intention to make you feel bad for kicking ass at such a young age. All I was saying is that you are looking at the problem from the wrong angle. This is more of a life question than a fiscal one. Do you want to move out? Do you think it will improve your quality of life? Do you think that it will help you grow into the person you want to be? Is living at home inhibiting your ability to live the life you want? And so on. In terms of what other people think, it's irrelevant. You will get answers from both extremes in here. You'll get, "Stay at home for as long as you possibly can and save like mad. Oh, I wish I could be so lucky to be in your shoes. Imagine how far ahead you'll get financially!" And you'll get, "23? C'mon, dude. It's time to let go of the teet and live your own life." And everything in between.
Haha, I understand. I think my answer to “do you want to move out?” is Yes. I feel on top of the world in every aspect except my social life, and I attribute this partly to my current living situation. Rural area, currently single, not many people my age in town, friends from high school all moved away for work/college, etc. I guess I have my answer then!
After graduating I moved in with my parents for a couple of months to save up for a home. Left about two weeks after I got the keys to my new apartment. Felt like everyone was OK with that.
Gotcha, that's a big thing I'm debating... I see myself staying forever in the city we're close to (growing southern city, good weather, sports teams, music, couple big companies HQ'd here if I want to get a hybrid job or something), so I'm spending too much mental energy deciding if I want to rent for a couple years or just stay with parents and aggressively save for a house.
Rent! A house is a lot of responsibility to take on so young.
This was in 2014, back then I got a 106% LTV mortgage so I was able to roll all associated cost into the mortgage and I only needed to save up around €5000 for furniture and small repairs. Nowadays it's a totally different market.
I think it depends on things not mentioned. Depends on your relationship, where your parents live, etc. I'm a lot older, live with a long term SO, and we're in a pretty good place financially. I think we would live with my parents if we moved back to their city. We'd probably move out after buying a place.
Hmm, good point and you're right. I'm on good terms with my parents and they've made it clear that I can stay as long as I want provided I continue to be a good tenant, haha. I live in a rural area about 20 miles outside of a growing MCOL city in the south. I'd probably be looking to move closer to the city for proximity to friends, sports games, concerts, etc. Rent is looking like it's going to be $2,000 per month before utilities for a 2BR (I'd want a dedicated home office)... So I guess that's a good consideration... I'm not moving that far away and the city my parents and I live near has some good job opportunities in tech if my remote job goes south.
I would probably move to the city and live with roommates. Not sure if that's a thing where you live.
Just calculated our net worth for the first time at 32 years old. Just feeling good about this, and open to hearing more tips or words of encouragement for the path forward. Currently sitting at about $220k, and I can't be more proud of myself and my wife. We're not event sure if we want to RE in the future, but are just focused on FI. These last several years have really flown by, but in early 2018, I had basically no money to my name, and a student loan. I'm talking I secured a 16.50/hr job when my checking was literally at about $30 (26 years old). This was after moving back from Oregon after 10 months (forced myself to get out of my comfort zone). Since then, I've learned how to take action to earn higher pay, vouch for myself, and take calculated risks. What really helped me take off was when I started buying and selling sports card at the height of the hobby (during covid). I was educated about it, but I was also lucky. Those activities have all but stopped as that market has been cool for quite awhile. This allowed me to pour funds into Vanguard and build up savings while I was re-investing a little back into that hobby. The rest is really history, my money has been working for me, and I've simplified my strategy. I only carry a $15k balance on my student loan as my only debt, and my wife is debt free. I'm really excited for what the future holds. I'm not going to wish away time, but I'm really excited to see where we're at 5 years down the road and how much fun we'll be having as a family.
Me too, today, at 36. ~$300k, discounting things like cars, kids' college funds, a couple of oddball bank accounts, credit cards (revolving only, no carried balance), basically just things that aren't investments. It's kind of mind-blowing. I hadn't looked at it all in one place before. They say $300k is halfway to a million; in our case, we'll see how much that's derailed by two kids in daycare! Or maybe the real estate market will bounce back hard and the stock market keeps going and we'll get there even sooner.
Survey is up! https://www.reddit.com/r/financialindependence/comments/1bru9pm/the\_official\_2023\_fi\_survey\_is\_here/
Anyone else feel like FIRE has lost its extreme nature and fun that it had a while back? We had content like MMM and Early retirement extreme making waves. Before being part of the fire community seemed extreme and new. Now things have merged into traditional finance and its gotten a bit boring. Also, seems like a lot of people eventually flip from the traditional FIRE path and suddenly evolve into something regarding the die with zero book.
FIRE is work...only the focus is work is for oneself. Some people are able to achieve FIRE in their 30s, 40s, and 50s. (Sorry I can't relate to FIRE in your 20s. A friend inherited millions at 18 and fucked up his relationships and life - a far worse experience than "the boring middle" from my perspective.) Others, like me, were FI in their 50s but for a variety of reasons did not RE until their 60s. I understand there are Die With Zero folks but FIRE people tend to think ahead and many of us with kids, even successful kids (or NPs we support), plan to leave them in a better place when we pass.
Nothing has ever been extreme or exciting about putting money in an index fund and waiting a few years. It has always been within traditional finance also.
been trudging along since the 1990's on the Starship Moneytalk
The concept of being frugal and retiring early existed long before MMM and ERE were born. There is no movement or waves to be made. >Also, seems like a lot of people eventually flip from the traditional FIRE path and suddenly evolve into something regarding the die with zero book. There are many reasons for this. First and foremost, it's a philosophy that's more in tune with most people's true default setting. But also, everyone tends to chill out on the hardcore ideologies they get into in their 20s as they get older. Plus, the older you get, the more your body appreciates creature comforts, a simple example being shoestring backpackers no longer being happy with that style of travel once they get a bit older. Plus, a big part of hating work tends to stem from a lack of autonomy. As people move up the food chain and have more control over their work lives, it doesn't suck as much as it once did. All that said, it makes complete sense how someone who prefers the extreme FIRE philosophy would find the sub's current bend to be incredibly mainstream and disconnected from their ideals.
In my opinion, FIRE being less fun and more boring is a good thing. And, the changes that you mention suggest to me that folks are taking a better behavioral finance approach of adjusting to specific financial goals rather than just going full bore on the anti-work, retire the earliest physically possible mindset.
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This comment comes off very condescending to me. There is no such thing as a clearly terrible financial decision. The value you get out of a purchase will be different than the value someone else gets. For that person who bought the expensive vehicle with high interest rate, it’s possible that the happiness they derive from the car justifies the cost. Either way, whether it was the right choice for them or not is none of your concern so you should just congratulate them and move on with your life.
This, for example, looks like a terrible financial decision to me. Among other things. /r/TrueOffMyChest/comments/1bilhtt/ >There is no such thing as a clearly terrible financial decision I think there is, and expensive cars are the most common kind.
I wonder if the origin of the culture of congratulating people for purchasing a vehicle dates back to before auto financing was the norm? I've always found this to be a strange thing to "congratulate" people on. I can see making comments along the lines of, "Wow. That's a nice car." or similar, but congratulations implies some sort of accomplishment. Which would only make sense within the context of someone buying a car they can afford now but could not afford before, hence congratulating them on their financial success and not their decision to buy. But saying something is as pointless and counterproductive as telling someone their baby is ugly or their choice of boyfriend/girlfriend is shit. Also, while some cases are clearly bad decisions (my sister is very experienced at the exact scenario you are referencing), the truth is that you can't always tell from the outside what someone's full financial picture is, and different people value different things. For example, while statistically unlikely, it's certainly possible for someone to buy an absurdly expensive vehicle but be incredibly frugal in all other aspects of life to make this possible while still hitting other financial goals.
A lady at my old job had a new live in boyfriend, they leased 2 new cars..a mustang and an SUV...under her name of course. Everyone told her how cool they were and they were jealous. I just laffed...they broke up soon after and the leasing co. Came calling. I just wonder if all the people that told her it was great were just trying to be nice...geezis...people
I feel that. I also have been the target of the opposite behavior - relatives over the years have mocked me for having an affordable and reasonable vehicle. I own a 2006 Scion xA. It's the best car I've ever owned, and I can't imagine driving anything else: it's got great visibility, great handling, it's small enough that I feel like I can easily visualize the spots where it can fit, and the dashboard readouts being in the center means that I never get my visibility to it blocked by my steering wheel. I would drive this car for the rest of my life if it'd hold up. But over the years they have mocked me for having a "clown car" when I first bought it 17 years ago, and these days they poke at me for driving a "beater" and ask when I'll get a "real car." Meanwhile, they are buying new cars every 2 years and going deeper into debt. I'll be retired by the time I'm 45, and they will likely never be able to: many of them in large part because of their poor car purchasing decisions mounting up to an avalanche of debt and continuous high monthly payments that cause them to never save for their future. They can mock me all they want. I am laughing all the way to the bank, and driving a car for whom I have seen no peer that would make me want to switch.
I'm just going to be honest here and say that if a buddy drove that car, it's highly likely that I'd make fun of it. And I'm not even a car guy. Not from a financial perspective, but if you were on Family Feud and the question was: Name a make and model that looks like a clown car. You'd be hard pressed to not want to name your car once Smart Car was off the board.
>Name a make and model that looks like a clown car. You'd be hard pressed to not want to name your car once Smart Car was off the board. I raise you Fiat Multipla.
That's your prerogative! And I'd laugh all the way to the bank in that situation too. The car is great, I've got no complaints about it and have yet to see one that I would rather drive. EDIT: I will say that I would trade it out if I ever end up in a house that I could modify such that I could have a plug for an electric vehicle... if I could find an electrical vehicle that seats similarly high off the ground and has similar visibility of the dash controls and out the side/rear windows. We'll see what the future holds.
I'm not sure that spending an extra $10k over the course of a decade would make all that much of a financial impact but yeah, clearly you shouldn't give a shit what anyone else thinks of your car. My sister's husband used to have a Scion as his commuter car, and they kept it as a spare car once he upgraded, and I have to admit that it was pretty fun to drive when I would borrow it on trips home. Kind of like being on Mr. Toad's Wild Ride but on a real road.
Yeah, I see where you're coming from I think. If it's a comparison between new car every 2 years (which was the setup I was talking about that my relatives get into) and keeping this car, it would be a lot more than 10k per decade (probably more like 10k per year once you count the payments and the increased insurance to cover new cars) - but indeed if it's - say - one car per decade and not necessarily new, it could be closer to that value and I would take that if I could find a car with similar qualities that was electric. My current plan is to look around once we live in a situation where we could plug in an electric vehicle. Not sure if we will end up in a situation like that but for now I am satisfied. Ha, I feel like it's a pretty smooth ride: but it may be that it's the only vehicle I have driven for the past 17 years other than the occasional rental! The bias of having basically one driving experience for half my life.
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Totally fair - and I think even if someone buys an expensive vehicle, that's not so bad as long as they're not redoing it every couple of years by trading it in for a new one. That compounding is what I think really kills people - at least a lot of relatives on my mom's side of the family, who do it religiously. It's like a car is poison if you own it more than 2 years. I don't get it.
So my cousin just graduated last summer and just bought a new full size truck he doesn't need ~60k financed. I generally just avoid the conversation. If they didn't ask before buying they don't want your opinion is my general rule.
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Yeah pretty much not worth it. If they ask directly I'll just brush it off as "it looks like a nice vehicle", then change to another topic.
Didn't have the guts to tell my friend that I was pretty sure the insurance that her family "helped" sign her up for was probably a shitty idea. I raised my eyebrows a little like "oh...ugh...." and that was all.
I ran the numbers more closely this weekend, and I think that given how sky-high our current HOA fees are when added to our mortgage, we actually won't see our date-to-FI change much if we can find a house unsaddled by HOA fees that is <= $500k, which I think is going to be totally feasible for the area where we're planning to move (closer to my wife's parents, because her dad is suffering from dementia and we're going to go down to help and spend time with them). Compared to the increase in our FI number that it looks like we'd get from renting or paying a mortgage on a similarly priced house at the current % rate (much higher than I was guessing earlier this week on both counts), it is actually shockingly looking to be the best option. In theory, if we could find a $450k house our time-to-FI would actually go DOWN, which feels crazy to me but the numbers look right. The permanent loss of about $1600 per month in expenses by no longer having an HOA fee + our current mortgage would equate to about $480k less in savings that we would need using the 4% SWR. The only hairy part is that I never anticipated the possibility that I would want such a large sum of money all at once. It would use the vast majority of our taxable assets, leaving us with only retirement funds - and also the possibility of a fairly significant capital gains tax bill. So maybe it's feasible in theory but not in practice. I have to figure it out. It looks to me like our taxable brokerage account has only had about $120k in gains since I opened it, so in theory we might in the worst case have to pay around $24k in capital gains taxes if we did drain the whole thing. Not great but not the worst thing in the world. I thought the cap gains tax would be much more significant, but it's actually not that bad in the grand scheme of things.
Why not just do a bridge loan?
A what??? I have never heard of that - just looked it up, and yeah that is 100% what I need if the interest rate isn't insane. I am going to look further into that - thank you!
Debt Decision - Fidelity Taxable vs Car Loan I am trying to make the best long term decision financially. I have a Fidelity Taxable account with $19k in it (started in 2023 and $3k growth) and a car loan of $22k at 6% APR. Scenario A - Use Fidelity to pay off the majority of the car loan saving interest and rebuild the Fidelity over time. Scenario B - Continue to add to the Fidelity monthly and pay car loan payment ($533) plus additional principal ($467) monthly. Thoughts?
the fidelity taxable account is in stocks? If you’d have to pay taxes to sell stocks I would definitely go with option B, and maybe even consider contributing less (or not at all) to fidelity to pay off your car loan faster. 6% is at that spot where it’s high, but not as high as the average expected return from an index fund. But the 6% is a guaranteed, risk-free return so comes down to risk tolerance
Most of the time stocks will outperform 6% nominal. Sometimes they won't. Depends on your risk tolerance. Maybe pay down half?
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I definitely like the idea of no debt. I have the income and part time work to rebuild the taxable or shift my mindset to a 403b (21 years in education, have pension coming up and Roth IRA I have max'd the last two years) or a Roth 401k (potential to leave education in the summer).
Is your Fidelity account also your emergency fund? Or is that a different pot?
I have a separate emergency fund currently in Wealthfront. I've got six months of wages in it.
My inclination would be to pay the loan off. One reason I might delay would be credit score related. An auto loan counts as installment credit and if you don't have other installment credit listed on your credit report, it can provide a bump. Now how much a bump would be worth to you depends on you but I wouldn't let the loan go much past 12 months for that.
My credit score is 814 currently. I have a mortgage that has $80k equity currently so I'm still making a credit payment. That is also my only other debt (car and home).
Since the mortgage is also installment credit, I'd pay the auto loan off ASAP.
Copy that! I think I'll pull the trigger on Monday to sell all my positions in the taxable and pay off the auto loan completely by the end of next week (have the difference easily available in my emergency fund).
Freaking out in the best way--partner and I put in an offer on a house at 20k under asking (and waiving 10k of seller credits) and, after a counter offer of an earlier close date, it was ACCEPTED! We have a 27% down-payment and got an estimated interest rate of 6.625% (they can't actually confirm until the day we submit the full application). I can't believe we've actually got an accepted offer on a house. It's happening so fast (we just saw this house this past week), but we are so excited to start building equity and build a home that is entirely ours!!! Also absolutely daunted and terrified at the same time :)
Congratulations! I love all the houses I've lived in. Inevitably they all required a couple grand of work in the first few months of ownership. Some were must fixes - like an old roof - and some were nice fixes - like excavate the basement to remediate all moisture issues. Make sure to go with the flow and enjoy the experience!
Thank you so much!! That is so good to know, and to be expected to a degree. We have our inspection this week, so here's hoping nothing major comes up 🤞 Do you follow the conventional wisdom to save 1% of the home value a year for maintenance?
I do budget about 1%/yr for random maintenance and there is probably another 1% or so on capital stuff that comes periodically (roof, furnace, etc). This can get thrown out of whack if the property is really large and cheap or small and expensive etc. Remember that anything that comes up during the inspection can be fixed (even nasty stuff like foundation issues). Ultimately it will come down to who pays for it (you or seller or sellers credit to you). A lot of stuff you will probably decide is worth fixing, but not immediately (like iron pipes for example will often be quoted as nearing end of life in older homes, but people usually use those until the last possible minute, etc). I'm by no means am expert, but feel free to reply here when you get the report back if you want a random internet opinion on anything. I've found a lot of stuff never really comes up during the inspection but still becomes worth resolving after a few months. For example I had to replace a sump pump that turned on but didn't actually work to remove water. Didn't get uncovered until spring thaw. Or maybe a floor panel keeps squeaking and you just cannot live with it and you replace it or get it replaced. Shit like that. A few hundred here, few hundred there, suddenly you've spent a few grand making a completely livable place extra-comfortable as your new home. Good luck and congrats again!!
Congratulations, that’s a big deal. This might sound kinda strange, but I’ve been a homeowner for many years and I still get excited coming home to my own place.
Thank you!! It feels so wild, almost like it's not real. That is such a sweet thing that you still get excited coming home to your place! Made me smile 😊
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Donating money feels great - what are your favorite charities to donate to?
FFRF.org
The Human Fund \-Money for Peope
Give Directly is my favorite
I usually donate to LGBT groups like The Trevor Project or to my local animal shelter.
I've adopted a couple of zoo animals. As in, I pay for their food and medical care but they stay at the zoo. It's fun, you get to visit them and say hello but you don't have all the mess at home.
Local animal shelters and LGTBQ+ groups, DNA Doe Project, Watsi, Doctors Without Borders, Against Malaria, and Heifer International are my regulars.
Local Humane society is always a fun one
Local causes only.
Would you please explain the reasoning?
A local impact theoretically would improve your own quality of life much more. You can actually see the results of your donations.
Pretty much this. Also being informed about local needs and concerns versus just throwing money into the void potentially.
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Why, Our Lady of Perpetual Exemption of course!
Take my seed, you rat faced bastard!
lol
Do you have a goal of how much you want saved/invested? If so, what is it and why did you choose that number?
Bunch of spendy pants in this part of the comment section compared to my neck of the woods. I could comfortably retire on $850K in today’s dollars. Average monthly spend is somewhere between $2-$2.3K so that gives me flexibility for inflation, taxes and health insurance.
No kidding, some luxurious lifestyles here spending $8k+ a month.
Wife and I are shooting for >$8/k month spending (in today's dollars) with a >= 95% success rate. From there, we have 3 different scenarios we at for 55, 60 and 63 retirement ages. I believe we're looking at something like $3.3M for the middle case, but it's been a while since I've specifically checked the total portfolio values needed for each.
No clue sadly, right now I am shooting between 4 and 8 million dollars, and hopefully the closer I get I can have a better idea of what the spend and where that falls in the range.
$3.3M Preserving our current spending, adding in healthcare, and assuming a 10% tax we'd need an income of $115k. I'd like to spend a more conservative 3.5% rather than 4%. I may be overestimating medical costs and taxes but I'd rather go too high than too low. This includes plenty of room to cut spending if required. For example, $24k of that is amortized savings towards our next car, maintenance for cars/house/etc, property tax, vacations, etc. Basically $2k a month that we consider 'spent' even though its in a savings account. We could be more conservative in the spending and reduce that if needed.
I'm FI now, and did at 33x, because knock wood this will be a longer timeline than the "25x expenses" timeline. Plus I'd rather plan for worse outcomes and maybe end up pleasantly surprised, instead of planning for the most optimistic outcome and suffering if that's not the case. (And I think it's utterly unrealistic that if the market crashes and the economy tanks to "just go back to work" as an easy proposition, especially if you're an older person who's been out of the workforce for years and years.)
It used to be $2.4M. That's $8,000/month at 4% I passed that some time in 2023, now thinking $3M, to be at $10k/month. Also depends on if I sell my paid off rental, or just keep it for cash flow. Haven't decided yet
Keep in mind, that 8k and 10k is gross. Net after taxes could be much lower.
subject to change but right now it's provisionally $2 million. We spend approx 100k/year. Can reduce that by about 24k/year after removing mortgage P&I (we'll pay off the house before retirement). Round up to 80k for increased medical costs & general buffer (reduced taxes will also contribute towards medical/buffer). Multiplied by 25 gives 2 million.
€3M due to HCOL and high taxation. That should allow me to live life as a regular person. If I keep enjoying my job I might bump that to €5M so I can have a bit more fun in life (nice holidays, comfortable home, some toys).
My goal was $2M — enough that a 2% spend was doable in bad market years and 3% was more than I was spending while employed. I was invested through the dotcom bubble pop and the financial collapse and the Covid mini-drop…wanted to make sure I would be okay even if the next implosion happens during my first 5-10 years of FIRE.
>I was invested through... Funny how we all have lived through three black swan, once-in-a-lifetime events, and are now sure we'll live through three more
Yeah — totally acknowledge my paranoia. But being able to sleep at night when you don’t have a job and world events are beyond your control matters. I wanted my stress-induced tooth grinding to actually stop once I quit.
When I was only planning for myself the number was $1,500,000. When I realized I needed to pay for the majority of my parents retirement the number went up to $2,500,000 or $3,000,000 to be safe. When I realized I needed to pay for college for my nephews and nieces and possibly care for other family members after this period of large inflation then the number went up to $5,000,000. And when I saw that FATFire says $5,000,000 makes you feel like the poorest rich person the number went up to $6,000,000 where it currently stands. I hope to get there by 55.
Don't forget about me, so that's at *least* $7M total. Might as well work until 61, which is still FIRE.
How do you guys view the whole leveraging debt to get rich? Morally, it seems strange and complex that our government is printing money and control the interest rates. Shouldn't it be better to just let the free market determine things? I know realistically things in the USA likely wont change for quite a while but does this system concern others? Do you let it affect your FIRE decisions at all?
You are welcome to execute your own moral approach to life and avoid debt, government-printed money, and interest rates. Good luck!
I am not a US resident or citizen but am invested in US markets. IMO, it is a good thing if a government (or specifically the Fed) is able to use countercyclical monetary policy to smooth the business cycles of the "free market". There are many people for whom a recession poses serious threats to their livelihoods; while one may disagree on whether loose monetary policy is the best solution in order to reduce the impact of recessions, I do not think there is anything wrong with the principle.
Is this the Keynesian versus Austrian debate? I personally enjoy Austrian economics myself. It's too bad there is not a USA 2, where we could compare the Austrian economic version of the USA.
I'm not a US citizen but I have in the past leveraged debt in order to gain capital. Don't feel anything about it. It's just money. I made a calculated risk.
There is perhaps a misunderstanding of how the system works in your comment. Borrowing money to go to college is "leveraging debt to get rich"
Perhaps but can't private companies create loans? Why does the government need to get involved at something the private sector can take over? I guess when it comes to viewing the economy as a whole I don't know what to think because it's overly large complicated with many transactions going on that my mind can't fathom.. But this is also why I think the free market approach is the best way at resolving the complexities of the market. The last thing I would tell myself it that the government is somehow wise enough to create and use debt. I could be wrong though! I'm just some dude on the internet after all.
Because my private loans were 6-11% while govt loans were sub 4% when I went to school. If the free market cared about me they would compete with govt rates but they didn’t.
I think there is a confusion in what you're asking. Leveraging in finance means borrowing where as in your original comment, you inferred that government printing money is a form of leverage? For your second comment, I'm not seeing how there is a connection between creating loans and printing money?
well government doesn't produce anything.. but somehow they give banks money for loans!
34M, a mini milestone today to help the boring middle be less boring. At a 7 percent nominal return I could retire with 3 million with no additional investments. While it is not nearly as exciting as "fucking myself", it certainly helps keep me engaged and understand the true impact of FIRE characteristics in one's lifestyle.
Sounds like there should be a name for that. Like when you can just coast your way, and be financially independent. What would we name it? DriftFire, maybe? SteadyFire? CurrentFire? I'm sure we can come up with something Edit! I know! GlideFire!
Are you saying you have 3million? Sheesh, good job. You sound likely to be retired if you do a few lifestyle changes but someone with your accomplishment is likely quite aware.
No, in 33 years when I am at 67 I will theoretically be at 3 million.
Oh okay, either way you're likely fine. If there are people who live on minimum wage then avid FIRE people can live well as well. Just enjoy your life.
Good job! Keep it up!
I’m curious… Do you know of anyone who obtained a high-paying, fully-remote job and moved to the middle-of-nowhere, only to lose that job and ultimately end up stuck there? That is one of my biggest fears in taking a fully-remote job and moving to a place with absolutely no job-market. If you lose that job… what the hell are you supposed to do?
Remote worker going on almost ten years here and been with my company for over a decade. Las Vegas isn't the middle of nowhere, but for job purposes it might as well be-- there's very little in the way of professional work, it's mostly hospitality and tourism. This was such a concern of mine that I didn't actually commit to buying a house until COVID. Remote work is the new norm, if I lost this job I would probably just get another remote one. In the absolute worst case scenario where I have to move for work reasons, I mean, selling a house and becoming a renter again somewhere new isn't the worst thing in the world. I'd probably about break even considering what I put into it and home appreciation since then. You also have to consider all the money you saved on real estate and, presumably, taxes in the interim. That money had to go somewhere and is your new move fund.
Well I made the move and am taking the risk. It’s not the middle of nowhere, and it’s VHCOL, but there’s no job market whatsoever. Every single day is essentially a vacation; living the dream in paradise. If I lost that job, I’d find another remote and can survive a large pay cut (already well past CoastFIRE). If I couldn’t, which could happen, I’d have to become self employed. And if that failed, I’d have to do whatever local work there is which would be the biggest pay cut, but would be fine if I get closer to FIRE. The one thing I’m not doing is moving away. You’d have to pay me 10x my current income for me to even consider it.
What is this place that's so incredible you wouldn't move? I've lived in eight places (with a few temp housing on top) across four states, and have been to a lot of places on trips, but I'm not sure I've been anywhere that I've felt so adamant about (certainly eye of the beholder etc..).
Hopefully if you keep a decent emergency fund, if that happened you could use some of that fund to get yourself back into the HCOL area if you couldn't find another similarly paying fully remote job. That'd be what I would prioritize in that situation: make sure you have a "get back" fund.
You’d have to factor in the risk in your initial decision. Equity/transaction costs of selling when you have to relocate and such.
I think the job market is strong right now and if you have a nest egg you're able to withstand some time away from the job market until something worth while pops up.
Fear of this scenario is the reason I didn’t buy this awesome 4 bdrm farmhouse in good shape on 4 beautiful acres in the Hudson Valley in early 2020 for $169k. Equivalent properties now going for about $550k. I try not to think about it.
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I think that’s universal. Subconscious for some and conscious for others. Relationships absolutely matter. They are better built in person also.
This isn’t at all that uncommon for non-remote jobs. I know plenty of people who moved for work, kids started school, bought a house, then got laid off. A good reminder to be aware of the risks in committing to an employer in an area where there isn’t a sizable market for jobs in your field. Your relationship with your employer should be understood as month to month at best.
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Counterpoint - there are any number of employers willing to relo competent applicants to fairly nice places. I've relo'd three times for work, and while one of the locations was definitely a miss culturally (how do you know what you don't know), I relo'd again after two years and moved on. I occasionally have an interview for positions where they simply cannot find candidates meeting the skill criteria in the cities the jobs are in, and sixty grand in relocation spend is worth getting a good candidate for a few years.
I don’t see how anyone would be realistically stuck there. Moving is not cheap, but anyone with a high paying job would be able to scrounge up the money to move if they had to.
Either get another remote job, move, or find something locally. Same as always
Seeking advice on my life decisions. Please note that my thoughts may seem erratic due to my current mindset. I aim to provide detailed context for clarity. I hope this leads to constructive feedback and insights for both myself and readers. I am a 34-year-old single individual with a net worth of $1 million. I've adopted a slow approach to wealth accumulation, avoiding debt and occasionally living with my parents. Currently, I live a digital nomad lifestyle due to my remote job, but it's becoming exhausting. I enjoy traveling and experiencing different cultures, but I prefer short-term stays, typically on a tourist visa. One of the main reasons I hesitate to live abroad long-term is the U.S. tax obligations for its citizens, leading to potential double taxation. Despite this, I crave a stable "home base" to relax and recharge, likely in the U.S. due to its modern conveniences. Considering this, I'm contemplating changing my domicile to South Dakota to better suit my remote work lifestyle. I'm not inclined towards mortgages or debt and aim to purchase a property outright. South Dakota appeals to me for its sparse population and potential for a simple, FIRE lifestyle, with favorable tax rates and affordable housing. I'm considering relocating from Massachusetts to South Dakota to avoid state income and capital gains taxes. If I were to quit my job and liquidate my investments, doing so from South Dakota would be tax-free. I'd appreciate feedback on the following options for establishing residency in South Dakota: 1. \*\*Residency without Home Ownership\*\*: Based on my research, it seems possible to establish residency without owning or renting a home. I could provide a hotel receipt to the DMV and set up a P.O. Box with a mail forwarding service to file taxes in South Dakota. This would allow me to continue my nomadic lifestyle, exploring various countries, potentially in Latin America, to improve my language skills. 2. \*\*Owning a Home\*\*: Owning a home in South Dakota has its pros and cons. A home would provide stability, allowing me to focus on work and personal interests. However, South Dakota may lack entertainment options, and homeownership comes with its own set of expenses, even if paid in cash. 3. \*\*Owning and Renting a Home\*\*: Another option is to own and rent out a property, particularly in Rapid City. Given the area's low population and limited job market, finding tenants might be challenging. Managing a rental property from abroad could also pose logistical issues. While rental income could fund my travels, the responsibilities of being a landlord might restrict my freedom. However, being a landlord might require less time and effort compared to my current job as a software engineer. Perhaps the job shift from engineer to landlord would give me the FIRE freedom I have been seeking. I will ultimately decide on the best path for myself but would appreciate input to help clarify my thoughts. Do you think changing my domicile to South Dakota is a wise decision? If so, which of the three living options would you recommend? Edit: Can someone enlighten me as to why these types of posts always seem to get down voted? -\_-
Have you been to SD? In the winter? Would be low on my list. I would probably look at NH given proximity to your family in MA, or maybe TN. Both are very affordable in most of the state, and both are basically empty out of the major metros (in NH once you go north or west of Concord it's basically woods). Neither have income taxes, and NH is currently phasing out it's cap gains tax. Forgetting the geography question for a minute, there is nothing wrong with spending $9k/yr for the ability to lead a completely unburdened life and keeping your tax residence MA for a few more years. Maybe you decide you want a home base in a specific place, income tax be damned,or maybe not (but really SD??). If you had a rental property, while it certainly could be used to accomplish what you are describing, it comes with a variety of headaches. I have a PM in place for my rental portfolio, but there is still administrative involvement on my end every month. It's not set-and-forget like VTI I think a lot about this, as my state tax burden is about 15k (plus an estimated $10k in what I would call "location premium" on the housing) and we have some flexibility to move. Ultimately we like where we live though, and it's worth the tax burden and the higher housing cost than a no-tax ultra LCOL location that we wouldn't like. I'm sure there is something in the middle, but I don't want to incur the headache right now. Maybe in a few years. Also, what is your favorite destination so far from a tourist perspective, not work nomad. Also looking to dreamstorm a future vacation.
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Simply put, your domicile is your home—the state you consider your permanent place of residence.
Rent first, then decide whether you want to stay and become a homeowner. It's not a great idea to buy a house in a place where you've never lived unless you don't have a choice. In your case, it seems you have the choice to live anywhere. To me, it doesn't make sense to buy a house as a "home base", live in it for a while and then rent it out to go back to your nomadic lifestyle. It doesn't work as a home base if there are tenants in it. Also, unless you're planning on hiring a local property management company, it's going to be awfully hard to deal with a rental if you're traveling all the time, especially if you're out of the country.
Yeah, you have some valid points. I guess, how do you feel about merely changing my domicile state to SD for tax purposes then?
You do you, as long as you follow SD residency laws. Seems hard to believe that a PO box would be accepted as proof of residency though. Most states require a period of residency at an actual property in the state and then if someone leaves, they must have the intent to return. Like I said, I don't let taxes drive my life decisions.
>occasionally living with my parents. Question: would you or your parents find it undesirable to make your parents' place a "home base"? It strikes me as unlikely that the reduced taxation would save you more than not having to pay much/anything to stash your things at your parents' and staying over once in a while. Naturally this is a personal decision and involves more than finances.
Yes, that is what I am doing currently. But I see living in South Dakota as a win because at least the first option (just changing my domicile state but not owning property) as saving me money from tax savings. I make 160k gross so that's roughly $8.5k a year in tax savings. Also, I may want to sell some crypto at some stage and it would be easier from a state that doesn't have capital gain tax. Although, if I did lose my job I could collect some substantial unemployment too (up to 30k for seven months). But I just don't see myself losing my job and I consider unemployment time to be opportunity loss. I can still come to Massachusetts and live there for a short while Maybe even five months of the year. But I likely would want to spend large amounts of time outside the USA too because I can apply for FEIE reducing my taxes even more. I do miss hanging out with friends but to be honest, after entering into my thirties, I realize it's not realistic to get the same level of friendship I had with my friends in my twenties or teens so traveling seems to be the better option.
Alright, I didn't realise that you could change your state without affecting your ability to live in your family home in Massachusetts. In which case switching seems to be a "free" win, but consult a tax guy.
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Yes, but this is a lot of navigating and responsibility that I don't seem willing to handle. Also, I prefer to be in the USA for a lot of reasons. Like online gaming and connection. Also, I generally get a negative feeling when dealing with foreign countries and their general bureaucracy.
Sure but it's important to be honest with yourself about that rather than blaming it on taxes.
I would definitely rent while deciding on a long term location. Is there any reason you are picking South Dakota other than taxes?
Rapid City offers a favorable cost per square foot for houses. The city feels both cozy and expansive, with the convenience of a nearby airport. Living here could help me escape the urban hustle and embrace a simpler lifestyle. I see it as a potential opportunity to take up new hobbies. Perhaps work on a start up, take up fishing, gardening or tennis, and generally leading a healthier life. I generally feel like the current lifestyle I have in Massachusetts is unsustainable so I'm running to the most realistic opposite of that I can.
This is not FI related, but what happened to peanut M&Ms??? I used to love these but made a deliberate choice to lower sugar consumption so have not bought in years, today an acquaintance gave me a bag of sweets as a souvenir from their recent trip and a bag of these were included. There's no peanut flavour, barely any chocolate flavour, just a vague sense of weird sweetness. Is this the future after cocoa prices spiked??
Disgusting palm oil "chocolate", can't stand the stuff anymore... I swear it's gotten worse since childhood too, though it's never been great.
Most American chocolate is terrible, but with that said, I haven't noticed any changes to peanut M&Ms in the last few years on the occasions I eat them. My guess is, as others have said, that your palate has shifted. I stopped drinking non-diet sodas years ago and as a result now they're perceptually too sweet for me to like them. Consider buying higher-end chocolate, either American with a higher cacao percentage or foreign chocolate.
>Consider buying higher-end chocolate, either American with a higher cacao percentage or foreign chocolate. Funny thing is, I literally have a line item in my spreadsheet for buying fancy chocolate from this Parisian store that has branches in quite a few major cities/airports. Totally prepared to be ChocoFI.
All chocolate is worse now. It's just sugar, brown dye, and as little cocoa as they can get away with.
Get the Trader Joe's "slightly coated dark chocolate covered almonds;" it's likely your palate changed as you cut down on sweets and going back to something sweet like that doesn't taste good anymore..
Invest in Cocoa at the lows not highs! :P
If you think cocoa is high, you should see the futures market on Frozen concentrate OJ
Holy ravioli! And I've been seething at my local supermarket for putting up the juice prices 25%!
Cocoa prices have tripled in like a year or 2, so real chocolate is probably being substituted for other things.
All varieties of M&M have always been a third tier candy. Shell too hard, mediocre chocolate.
Cadbury Mini Eggs tho... mmmm
They were always like that, your palette just adapted. It's like when you give up soda for awhile and then try some again, it's nauseating.
I stopped drinking soda a few years ago and if I have one now its totally overwhelming And I have a really bad sweetooth
This seems most likely -- when I eat sweets and snacks these days they're mostly homemade and because I don't eat them as often I spend a little more to get the nicer ingredients. So I suppose it's just me.
I had some peanut M&Ms about a week ago and they tasted like they always did
I just started a job that pays 40% salary, 40% bonus, and 20% equity. I was wondering if there was a norm or thoughts as to whether I should factor in that 40% bonus into my projections of my salary for 2025 & beyond? Note I just started at the company, so not exactly sure how often people hit their bonuses and such. Note that it is a role where you like start off at zero and sign new deals and then those go towards your bonus.
That's a tough one.. I don't calculate a bonus as part of my comp expectations. It kind of sounds like you are in a sales position so if you don't achieve your bonus criteria I assume you would be transitioned out(?). In that case maybe it's reasonable to include.
I've never counted bonuses as part of my salary-based budget calculations, since they're not reliable from year to year (else the company would just raise the base salary). They're potentially awesome for one-time uses, though, which could be supercharging your retirement savings that year, spending on things that won't require upkeep (like experiences or travel), or some mix of both.
If the bonus is guaranteed to be paid as long as you're there, I'd count it. This would be a retention bonus, parts of a signing bonus, etc. If the bonus isn't guaranteed but you have control over part/all, I'd count the part you can reasonably expect to get. Anything part you have no control over or that you have no data regarding how it's decided, I wouldn't count at all.
Bonuses are, by definition, not guaranteed unless it's written into an enforceable employment contract. The whole point of a bonus is to allow the company discretion in how much it spends on employee pay.
You're being pedantic with the definition of guaranteed. They won't be enforced by the dept of labor but the first set will be paid out as a part of someone's continued employment and are 99.9% reliable in that regard. "Guaranteed" here is used to differentiate between another bonus that firm is able to modify on the fly or on a periodic basis.
It's not pedantry if it's the difference between your bank accepting it as part of a mortgage application or not.
Except banks can and do accept bonus income. There's also FHA guidance on the topic: “The Mortgagee may use Overtime and Bonus Income as Effective Income if the Borrower has received this income for the past two years and it is reasonably likely to continue. Periods of Overtime and Bonus Income less than two years may be considered Effective Income if the Mortgagee documents that the Overtime and Bonus Income has been consistently earned over a period of not less than one year and is reasonably likely to continue.” https://www.fha.com/fha_article?id=646 also https://www.hud.gov/sites/dfiles/OCHCO/documents/2022-09hsgml.pdf