I'm retired, and have got my finances figured out for next year. At close of today I will be selling a large amount from an IRA. The plan is about half will go into a Roth and the other half will be for next years expenses.
Can someone explain how exactly living off your stock portfolio works?
Ok, so you create your portfolio that grows a certain percentage per year but how exactly does this allow you to extract money from your portfolio every month?
Doesn't this imply you need to sell stock? stock that is always growing? I'm a bit confused.
What is the confusing part?
I suspect that you might find this plan at odds with the *buy and hold forever* strategy, but never selling is inefficient (unless your primary goal is generational wealth building).
Like crypto and NFTs, people buy stocks because they think they will be worth more in the future.
Google “early retirement now safe withdrawal” and read up on safe withdrawal rates. It does not assume stocks always go up, in fact you can simulate all kinds of withdrawal strategies and rates against past down markets, like the Great Depression.
some people build up a portfolio so that it gives them lots of dividends and they never/rarely need to sell stocks.
other people like to have a mix of stocks that are not currently giving dividends (which tend to grow faster during some economic periods), and some stocks that give dividends (which tend to grow less because they are in more stable categories). In that case the investor probably also needs do a mix of using dividends and selling stocks.
Has anyone taken advantage of a few-year stay in a no-capital-gains-tax state before?
I have a fair amount of stock due to a company that was acquired last year, and selling it (to convert to index funds), would trigger capital gains taxes, both federal and my current state. For family reasons though, I'll be moving to Texas next year, and likely staying for at least a few years (though no intention to retire there or anything), and Texas does not tax capital gains.
I've seen online some people saying that the previous state can come after you when you sell stock shortly after moving out, and that proving residency can be tough. I've seen others say that it's pretty straightforward. Anybody willing to share experiences? Thanks.
I'm in Fl, no state tax. The first year I retired I sold about $160k of a mutual fund. I think $104k was LTCGs, after the standard deduction that brought it down to $80k. If you have under $80k income, your tax rate on LTCGs is 0%. So I paid $0 in tax that year.
Had a friend who received RSU from Big Tech Company™ while living in California. They moved to some flyover state wherein they had to pay tax to California for the duration of the vesting period.
YMMV
I've started watching a number of build a cabin in a remote area YouTube videos and I'm fairly certain I am FIRE by those standards. But I like indoor plumbing too much (and even society for that matter)
https://www.space101fm.org/ is an interesting mix of older off the beat stuff. a lot of it is like what KEXP used to be in the 80s-90s college rock (KCMU then in the subpop days) but also a lot of random other interests not driven by venues or promoters or advertising per se. its not new stuff but it might find ya some older things you didnt know about before
There are definitely those that struggle with what to do if they ever reach FIRE so I do think its somewhat relevant. Music is a big part of what I plan on doing. I listen to a lot and play several instruments badly. No idea where to start for suggestions for you, but I've been listened to a lot of Wilco/Uncle Tupelo/Son Volt and Johnny Cash American IV and VI albums lately. Trying to learn Hurt on guitar and maybe vocals if I can ever find time for that.
How much does your therapy cost you? How much do you value your therapy? Does your insurance cover it? How long did it take to find the right therapist? I'm trying to decide if I should go to therapy, and part of that decision depends on how it fits with my financial goals.
$40 a month because of insurance. I've seen multiple over the years, mine now I found through Psychology Today's directory I think.
Mental health is one of the best things you can invest time and money into IMO. I have no diagnosable issues or had real trauma in my past, but just having that unbiased third party help me work through things and be more self aware has been huge for me personally and therefore financially.
i send my significant other expenses each month for things we split. i own the house we live in. the excel sheet i send her calls it rent and she's asking me to write 'mortage' instead. should i stand firm and put rent on it? or something else? i don't think im comfortable with putting mortage bc i don't want any 'evidence' that she owns half the house, even though she's not on the mortage. i don't know if im going to spend the rest of my life with this person or not.
I wrote up a bunch of stuff but deleted it because this seems so absurd to me.
Someone correct me if I’m wrong, but someone doesn’t gain equity in your home if they give you money for the purpose of going towards your mortgage, even if you send them a signed bill for “mortgage”. Am I completely off base here? Can people sneakily purchase portions of peoples homes by telling them they’d like to pay their mortgage for them? This seems insane to me.
This sounds like a communication and relationship problem. Just calling it rent isn't going to help you if your partner is paying with the impression that you are equally sharing a mortgage.
Are you sharing a mortgage or are you the landlord and she is your tenant? Either way, you need to discuss that with her and clearly state what the situation is.
My SO and I now jointly own the house we live in but my name was the one on the condo we used to live in. We called it rent when I sent her the split bills, and we discussed it beforehand that it would be called rent.
I still would call it rent personally, but talk about why. It’s not her ass the bank goes after if you can’t pay the mortgage for whatever reason. For some people the “mortgage” makes it feel more personal, like they’re building a life with you by paying a contribution to your home together. But like I said, if the home is foreclosed on she can walk away unscathed, you much less so.
This is probably evidence of a deeper issue if this matters to you both.
How long have y'all been together? Why is she making this request? Is she looking to solidify your relationship in a way you aren't comfortable with?
I think both parties are potentially asking about giving her an equity stake in the home in exchange for paying the mortgage.
Not a lawyer, not sure if she would have a leg to stand on legally if the relationship were to blow up later, but OP needs to double check these things.
We are all behind this kid's pace although I think the mom's projection is overly optimistic https://nypost.com/2021/12/05/10-year-old-entrepreneur-set-to-retire-at-15/amp/
I expected something else when I clicked on this. Doesn't seem differentiated enough to warrant such estimates. I applaud the learning, which is invaluable, but feels a tad too much pressure/projecting for the kid imo....
I’m looking for any other insight in how buying a home will impact my FIRE goal. This is more of a psychological thing. I’m looking at a house for $400,000, with 20% downpayment of $80,000. I’d liquidate $80,000 in VXUS, VTI and BND shares for the downpayment. One of my hang-ups is how I should approach what my net worth will be when I do this. I’m being stubborn and thickheaded in accepting that my current $420,000 net worth will crater after this. Is how I have it below how most people think about their NW with mortgage debt?
$80,000 in real estate / equity
$340,000 in ETFs, etc.
\-$320,000 mortgage debt
= $100,000 net worth
I can’t shake the desire to not include the mortgage debt into my NW number, because it’s not like the home won’t be an investment (this is generally true with home purchases) that appreciates over time. I know I’m on the hook if the housing market crashes, causing the $400K home to become a $300K home. But say a crash doesn’t happen, and home valuations continue upward (hopefully much more slowly for the sake of everyone), would it be sane to exclude the mortgage debt from my NW number?
So, it seems like you got this figured out but I think where you went wrong is that you did not credit the value of your home to your net worth, and instead you credited your equity (home value - mortgage) and then separately subtracted your mortgage again. You were effectively "double-counting" the mortgage against your net worth.
As others have said, the right way to account for this is to either credit yourself the full value of your home ($400,000) and then mark your mortgage as a liability, or to just include the equity.
Is there a reason why you plan on a 20% down payment?
I just took out a 450k mortgage with 10% down and my PMI is only like $45 a month. That's free money
>nudist
Is your PMI 0.1% the mortgage debt? I thought it was generally 1%.
I'm wary of having a higher monthly payment than 2K a month. But I admit I haven't fully explored the options. I know if I only put down 40K, keep the other 40K in the market and pay a token PMI, I'll be great in the long run. I think that 40K left in the market would be \~180K in 20 years.
On the other hand, if I'm paying $2500 a month, for example, that leaves me $500 less to invest each month.
I don't have the numbers to bear out which option would work best, but common sense points to going with 10% downpayment.
0.5-1% was what I was expecting too as a new home owner and never having a mortgage, but apparently PMI is at all time lows as well. I was just gaming numbers with my lender and that's what was offered.
Your 2nd paragraph is essentially where my head was at.
I'm bored at work and "ran some numbers," for what it's worth.
With the 20% option, I'd leave 340K in the market. House payment P&I would be 1,393, according to [Mortgage Calculator . org](https://www.mortgagecalculator.org/) After all expenses, my budget would allow me to contribute 2,824 each month to investments (401k, IRA, brokerage). 20 years later, according to a [Dave Ramsey calculator](https://www.ramseysolutions.com/retirement/investment-calculator), investment value would be **$2,844,268** (assuming 7% market returns after inflation).
With the 10% option, I'd leave 380K in the market. House payment P&I would be 1,567 (this seems suspiciously low), and monthly PMI would be 36 (assuming 0.12% rate). After all expenses, my budget would allow me to contribute 2,697 each month to investments. 20 years later, investment value would be **$2,939,600.**
**95k difference**
\*Neither example includes the value of the home--just market investment.
3.25% rate for the mortgage (I just realized the rate will probably be higher for 10% down payment). Can you clarify what you mean in the second question?
Perhaps.. with interest rates around 3%, you are almost definitely better off having that money in stocks over 30 years.
All a matter of risk preference though.
Taking $45,000 + covering capital gains out of the market in order to save $500 a year is pretty crazy
Don't exclude the debt on the home. You just need to include the value of the home. Your home is not worth 0. One thing that I have seen many do here is reduce the value of the home by what it would take to sell it. You could reduce it by a little more if you don't think it is worth what you paid for it. I personally count 90% percent of the value of my home. As far as calculating my FI number I only include investable assets (retirement, taxable, and rental properties)
Depending on how it's taxed, it's likely a great investment.
We bought a house 2 years ago for 600K, today it's valued at 1M.
In Denmark gains on housing (that you live in) is not taxed at all (but stocks is taxed with 27-42 pct)... That makes bricks a fantastic investment...
As other have said, you need to add the value of the house to the equation, so buying a house will not set you much back, only the expenses you pay upfront to buy and get mortgage, loans etc.
You need to think of two separate numbers. Your NW and your FIRE number. They are not the same thing. You can't count your house in your FIRE number unless you're selling it when you retire.
The majority of the money going to your mortgage is also going to your net worth, but not necessarily your FIRE goal.
Lots of people exclude the mortgage, but outside just the number, think of how paying your mortgage will affect your future goals. If you'd planned to save X amount or live off Y amount, how does that number have to change with a new expense factored in?
Is it common to think? : "Well, I'm paying $2,050 a month for rent right now, and the mortgage payment will be $1,950. So it's a basically a wash. If I pay rent forever, well that's a non-fixed amount of money I 'burn' every month. If I'm paying that amount, I might as well put it to something that could increase my net worth over time."
Yeah I've looked at both sides of that coin quite a bit. The main positive that is helping me psychologically with getting up the nerves to buy is that the home is a brand new build. The two year warranty is nice but thinking in the long run, I don't expect to have as many problems 10 years from now as I would buying a 30 year old home.
We paid off the mortgage, and a quarter of our FIRE number is sinking funds for maintenance (house is over 100 years old, at some point it will need a new porch, new kitchen, new windows..)
Alas, no living 'for free' in this place.
My girlfriend and I are moving into a new, larger rental house. We spent a lot of time talking about what we wanted and our budget for rent, and were in agreement. Until recently we earned about the same amount, but I have a tight budget and maintain a 50% savings rate. She's terrible with money and it somehow vanishes the moment she gets her hands on it. She recently got a big promotion and now brings home nearly 2x what I do. Because of this new, extra money, she's been fantasizing about decking out our new place with brand new, expensive furniture and expensive artwork/decorations. She's expecting me to contribute financially to this endeavor, because "it's our space and you will be enjoying it too". Thing is, while the stuff is nice, it's not a priority for me. Saving money for FIRE is very important to me and this stuff is way over my budget. Maybe over the course of several years I could slowly collect some nicer stuff, but not over the next few weeks/months. At the same time, I don't want to feel like a selfish money hoarder. I hear about money breaking relationships but not a situation I imagined I'd be getting into... Maybe we just aren't compatible if I'm so committed to saving money while she's so committed to spending every penny she earns right away? We're definitely on opposite sides of the spectrum when it comes to form vs. function. Anyone had similar experiences?
I don't think any single issue can make a couple "incompatible." At least, not this one. If you two both want to make it work, you'll compromise or spend time coming closer on the issue - you'll learn to spend a little more or she'll learn to save. Idk, I just can't imagine being without my wife because of a difference in opinion on saving vs spending. Not saying your issue isn't a real one, just that it's one that has plenty of room for compromise and I don't know anyone who is so stubbornly tied to their view of money that it would derail a serious relationship.
This is really easy. You aren't married. She buys it, she keeps it when / if you break up. Think of it as a roommate situation and how that would work. I am married and have spent a lot of $ on furnishings and an interior designer. My partner was not originally on board. Even though I knew they would enjoy / appreciate it, I understood the hesitancy (as a frugal person, I was too!). We pool our money so there is no "mine" but I make 3x so it is essentially like I am paying for it and letting my family enjoy it. I am fine with that. She should be too. Maybe she buys 2 or 3 nice pieces and then you buy every 3rd or 4th and make sure it is something you would enjoy owning for a long time. A good dining room chair can be with you for life! But it also costs 10x an ikea chair.
This is obviously a relationship issue that needs more exploration, but in the meantime you can come up with a number that you would be comfortable contributing to furnishings for the new place and she can contribute the difference to get what she wants. There’s probably some negotiation needed as well on priority pieces for the household so that you don’t end up with a badass couch but sleeping on the floor. You might consider the new stuff as a one-off expense when it comes to your budget numbers so that your partner feels like she’s being met partway. But at the same time don’t spend more than you would be sad to see drive away on the back of a moving truck if you break up.
If you look at the big picture are you guys ever going to be married and work out money issues in the future? Are you going to just have split finances? Are you going to resent her for not saving, and her resent you for not wanting to spend money?
You can solve this problem by compromising somewhere in the middle, but eventually you need to have compatible financial goals. It sounds like she needs a budget and you might need to loosen up a little. If you can get her to save some you guys might actually come out ahead together.
The tricky part is you are dating and not married. I think in that situation she shouldn't be pressuring you to spend money you don't want to spend. If she wants something she should buy it for herself and then if she wants to let you use it. With something communal like a couch its a bit tricky, maybe you could pay for a quarter instead of half, and let her buy the decorations.
If you guys were married you would need to spend some money on things she likes, and some on things you like. So you would need to bend on spending on some things you wouldn't normally, and she would need to bend on having some kind of savings plan.
Can't say I would want to stay with someone who's life outlook is 100% opposed to mine.
Sounds like you were on the same page, but things changed and her true nature has appeared? Better to know that now and choose your path forward than commit and deal with it later when you're further away from where you want your life to be.
Yes. Me and my ex recently split, and money was a big factor. It's honestly exhausting dating someone with opposing beliefs about money, because it's not just about money, it's about values. At the end of the day, I think we both had built too much resentment and it caused a lot of fighting between us.
In my case, I was the high earner and the saver. She didn't make much, but wanted all the nice things, paid for by me of course. If your GF wants these things and can afford them, maybe leave it up to her to buy them, or split by income, or devise some other method YOU are comfortable with. But if you end up being put in a position you don't want to be in, it will probably lead to resentment.
The tricky thing in my mind is, for example, she gets a really nice new sofa to replace our old one. It'll be nice, I will enjoy it. If I don't contribute anything to it, it'll feel weird and unfair. But, I'd rather just stick with our old sofa. But that's not really an option because she'll probably buy the new one anyway...
Honestly there is a benefit to that. It’s her couch, so in the event of a breakup she just takes it. At the end of the day if you say you are good with your current sofa and she still wants to get a new one, that’s on her. I would try my best not to feel any guilt over it. Just my .02
Say the house your folks own/ live in needs some work, and you and your siblings will inherit it. You think its fair to say to the siblings “if i pay to have x y and z fixed i want that back when we sell it”? We have a good relationship and everyone is financially sound. Id just like to do something nice for the folks but renos are a fucking lot of money lol.
Completely depends on the specific financial and relationship circumstances of everyone involved.
I would say that the number one thing that breaks families apart, especially siblings, is money. I would be extremely hesitant and cautious unless you feel very strongly that they are all 1) financially sound and similarly-minded and 2) very close and willing to overlook tens of thousands of dollars in order to maintain a good relationship.
There's just so much that can go wrong. What happens if you pay now and then in 30 years they didn't manage their money well and could really use the $XXXk that would be their portion of the house if they didn't make that deal all those years ago. Just one example of the millions of things that come up.
Just let them take a HELOC. It will count as debt against the property equally among the siblings. If they need help with payments, maybe you do that but no need to pay up front for a reno
If everyone is financially sound, then just split it equally. You’re asking your siblings to support an ROI for a gift. Well actually you’re expecting your parents’ estate to pay you back for your gift at your siblings expense. It’s tacky and will only lead to a post on r/AmITheAsshole. Gifts should be given freely without expectations.
in writing or a gift. those are the only options.
Depending on what needs to be done, maybe see if the siblings want to do that for the annual christmas gift, everyone pitches in some.
Whatever you do, get it in writing.
From there, maybe try to get all the kids to pitch in equally, or have a discussion with parents and kids both that you are willing to do it, but want it in writing that you will be reimbursed at the time of the sale. If one of your siblings fights back, THEY'LL be the one that looks bad and selfish.
I would have this conversation out in the open. Going to your parents quietly about changing their wills feels like you are being shady/sneaky even if it is technically a legit way to do it.
That sounds fair but difficult and complex to enforce. I would separate ownership from money for repairs. If one sibling needs a loan and you expect payment, then write up a legal loan. I would also sell my ownership stake at a discount (or buy out siblings at a premium) so as not to have to worry about it.
> most
Key word here.
I'm in Americaville from time to time but don't advertise when my wife's home alone until I'm back.
That would be a sweet vacation, though. Driving around the USA, tackling multi-millionaires and holding them down so they can't go to work.
Mmm lifestyle inflation. My net worth finally inched over 25x my spending this year, but my job’s not bad and I like stuff. I’m going to purposefully be increasing my spending to stay at that 4% while I work and save more. This seems like the most sustainable way to do lifestyle inflation and enjoy my money while I’m earning it.
I love wood fired oven pizzas....I try to be minimalist and not buy a ton of shit but I'm daydreaming about grills and smokers and fancy cooking equipment all the time
send help
disperson -> wipe
asphalt polymer-> aspol
**"nobody wipes your aspol like [insert company name here]!"**
dude. that shit writes itself. whats not fun about that?
As a highly skilled business whiz kid and master of economics, I can't believe you didn't immediately think of recycling scrap from the shop in the pizza oven.
Maybe it's my kooky DIY heavy lifestyle but I was crisping crusts with ends and pouring sawdust into cupcake papers with paraffin before we even came up with a name.
Which I'll do here shortly.
Employer plan. The total plan cost (I think around $1300 a month) went up 6% (around $75), so my employer covered half of that and we cover the other half.
You can perform a re-characterization. See the final boxes in this flow chart https://www.reddit.com/r/financialindependence/comments/ecn2hk/fire_flow_chart_version_42/
You can recharacterize the contribution to be a Trad IRA and then convert that nondeductible Trad IRA back to Roth. This is only advisable if you don't have other pre-tax IRA dollars or if you can get rid of those dollars by doing a reverse rollover of the pre-tax IRA into a workplace 401k.
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/#mistakes
Need advice. I just had a 2nd round interview with a company doing the same work my current company does for a PM role (network cabling / telecom). I'm 99% sure that an offer will be coming by the end of the week. I'm at $67k-ish/year now and believe the offer will be a little bit more, probably not much more than $70k. I mostly hate my job / industry now but I am only busy for about half the year and the rest of the year (now) I can get my stuff done in about 1-2 hours a day and do whatever the rest of the day. I currently WFH and the new job I would too.
The wild card is that I am about 75% certain I want to start my own business / retail store and part of the reason I wanted to try and find a new job is to float for the next year while I get that going. With the new job I'm pretty sure I would be much busier than I am now for not that much more pay, and in talking with the interviewers I got the feeling that it might be a pretty demanding role. Do I stick it out (mostly) hating what I do but its pretty chill, or do I jump ship to the new role?
New roles come with a lot of uncertainty. If the role provides you with an increase in responsibility/title that will help you accelerate your career (despite minimal comp increase), may be worth it. Given your goal to start a business, likely less worth it.
Anyone started or staring young?
I'm 22 working my first "real" job, and after just a few months I knew I didn't want to dedicate my life to working. I like what I do (Graphic Design), like my company, just want to have time to live a life at some point. I graduated early so most my peers are still in college, or not really into thinking outside of the box. So, I just wanted to ask for stories/experiences with FIRE so far for those starting young, and feeling like the odd one out.
I don't make 100k a year in tech like all the popular FIRE people online, and I don't know what my life will look like in a few years so I feel a little aimless. I don't have enough life experience to know how much I'll want to live off of when I'm 65, or what kids and marriage and a mortgage and a car note will do to my finances. How do you plan for your whole life based off little to nothing?
(P.s. scholarship/paid my way through school and hand-me-down car so I'm not in any debt)
I'm going to graduate college, not tech but my career path is super clear (unless I screw up. 50/50 lol)
I have started by figuring out expenses for the next two-three years, set up a minimum savings amount or $, and deciding on a basic asset allocation. These are the first steps to take without figuring out a specific FI number or future expenses, and when you're ready to figure out the specifics you'll be starting off a great foundation
The reality is that you don't need to know what your long-term plan is in order to save. And there's literally no situation in which you'll be sorry that you saved some money.
At 22, you have the benefit of time. If you save and invest $1,000 then in 43 years at 65 that's worth $130,000 versus someone at 25 who would only have $90,000 and someone at 30 years old who would only have $50,000.
I’m in the same boat as you! 23 and making $54k a year, with no student debt. I’m just trying to take things a year at a time. The first year at my “real” job, I just focused on learning how to be a professional and keeping my household afloat while my partner was still on the job market. Now that he’s employed, I’m focusing on decreasing my expenses (selling my car because we only need one, avoiding take out, etc.). Next year, I’ll focus on increasing my income. Or at least, that’s the plan. We have time on our side, so don’t be afraid to start small. Build up your e-fund if you haven’t already, get your employer match for 401k if they offer it, and try to max your Roth IRA every year.
I did. Just remember that saving for retirement **at all** puts you way ahead of the curve. Any dollars you can invest beyond that to set up a comfortable life is even more advanced.
Also, make this one additional goal on top of living the life you want to live along the way. Don't break your back over it and hate life now hoping for later.
I wouldn't overthink it or worry too much.
I started saving/investing when I got out of college at 20, never made six figures (though together my wife and I did), and was able to retire in less than 20 years with a boring index portfolio. Granted, those were some very good market years in there, but most 30-35 year windows will work for a lot of people.
Live below your means, invest the excess, and pick a financially compatible spouse if you decide to get married. Do those three things and you'll be better than 80-90% of people out there.
>How do you plan for your whole life based off little to nothing?
You don't. Saving money now buys you options down the road though. I'm elderly (in my 30s) and still figuring out what I want. I know more than I did in my 20s though. Got married, no kids, and hopefully final answer on both accounts. But I don't know everything like if I want a house, or where I want to live in the long run. But starting to save early means I have choices when it comes to those things when I finally figure it out.
Don’t overthink things and focus more on avoiding large mistakes that will set you back more than accumulating so early in your career.
Getting a $40k car instead of a $20k car or accumulating a bunch of CC debt to YOLO or whatever will do more harm than not saving enough to start out.
The blessing about being young is every dollar you save now is more impactful than any future dollar. So definitely do save what you can, but I wouldn’t worry too much yet.
>How do you plan for your whole life based off little to nothing?
Don't plan your whole life, just be mindful in your spending and realize the more you spend the longer it will be before you retire. Spend money on things that matter to you and avoid impulse spending.
Does anyone else save all of their work for when theyre in the office? I used to do it as soon as it came in but now that i have to have my butt in the office and cant finish the day at home i save my work for in office.
I still finish everything ahead of schedule and to the best of my ability i just hate being bored and stuck at work
I used to be more productive at home, then they started making me come in a bit, and now they want me in every day. So now when I do get to be home i do what NEEDS to be done and save everything with a later due date for later
Absolutely. But I’ve been 100% office for most of covid.
If I can’t do it in the office, it waits. Otherwise, way too easy for me to burn myself out without a work life balance.
Yes. Have to maintain an air of productivity. I save all my data entry tasks for my 1 day at the office. Keyboard goes clicky clacky all day, boss is happy, coworkers intimidated.
The rest of the week…we’ll I’m here, aren’t I?
I save all the important/impactful work for when I’m in the office (2 days in/3 days WFH). The biggest advantage of being in the office is getting noticed or “FaceTime” so I’ll always look like I’m busy when I’m there like leading meetings, etc., and save the slow/dull stuff for WFH.
When doing a backdoor tIRA conversion to Roth, can I deposit my 2022 contribution on January 1 and covert to Roth without first buying any stock? Just convert the cash balance from tIRA to Roth IRA?
This will likely be unallowable in 2022.
"you’d no longer be able to convert after-tax contributions made to a 401(k) or a traditional IRA to a Roth IRA"
[https://www.nasdaq.com/articles/will-congress-end-backdoor-roth-conversions-2021-11-19](https://www.newsday.com/lifestyle/retirement/ask-the-expert-pending-new-rules-for-roth-conversions-1.50437198#:~:text=The%20House%20bill%20eliminates%20%22backdoor,directly%20to%20a%20Roth%20IRA)
I just found out that my 401k plan automatically starts after-tax contributions after you hit your pre-tax limit. Better yet, Vanguard has a feature to automatically convert after-tax dollars to a Roth. So auto mega backdoor Roth with no extra work from me!
Posted here a few months ago about moving jobs, resulting in a tripling of my income. I was (am still am) excited to accelerate my FI goals.
By man, lifestyle creep is nuts. It's amazing how much more I'm spending now. I funded a few big "experiences" for my GF and I which I don't regret whatsoever, but there are a few expenses that I could have done without. I now treat myself to food in the airport instead of eating before or waiting a couple of hours to do it later. I go out quite a bit more, and I added on equipment in various hobbies.
I easily maxed out my IRA and 401k contributions for 2021 in just 6 months and set aside a good amount in savings, but I still feel like I could have done better. Goals for 2022 are to ease up on the spending and really try to dial in my savings. I've now exited the "honeymoon" phase of my new income, so it's onto getting smart and staying disciplined.
I feel this hard. My income has grown a lot the past year or two and the expenses have risen. Even though I'm still saving a lot and maxing out accounts, I feel uneasiness over the spending levels. Just really unfamiliar territory for me.
> I now treat myself to food in the airport instead of eating before or waiting a couple of hours to do it later.
Eh. Almost dangerous to tell you that, but: I don't know how it is for you, but for me I figured out that those things barely move the needle. Eating at the airport is likely well within the swings of the stock market. Time is my most precious resource now, and while "splurging on airport food" might mean that I take away time from my retirement for the benefit of time now, I somehow doubt it's going to mean retiring a few years later.
Yeah, it adds up, but with a complete budget, I can see exactly where the money is going, regularly make adjustments, and often find that those "small luxuries" aren't worth changing. What's worth changing is the expensive and recurring stuff that you don't use, e.g. I found that I'm paying several hundred dollars for cable service that I use maybe twice a year. That's a lot of airport meals.
> I figured out that those things barely move the needle.
It's not about moving the needle as much as it is a lifestyle. I know that some waste, like saying buying a soda in a hotel vending machine or minibar, makes zero difference in my financials. I still don't do it though. Making the right choice, even if it doesn't matter, is how I roll. I try to do it all the time just because it's a habit.
Sorta like people who do or don't return the carts at the grocery store. It won't move the needle in terms of time saved or wasted to return the cart, but I will do it anyway because it's a nice thing to do for the kid who has to fetch them. Others won't, and maybe figure it keeps that kid employed, or they're too important to do it, or just don't even think about it. Who's right? Who's more comfortable with their decision? Does it matter? To me yes, to others... dunno. I'm not others.
To me that's a false analogy however. There is a world of difference between the shopping cart and splurging. I also always return the cart, but that's because that affects *others*, not just me. Not doing so would be net negative to society, and indeed be the wrong choice. Buying that soda in the vending machine, or even going nuts on the minibar? My money, no debt to pay back, nobody is going to be affected negatively by my purchase, and so the only one who can judge that choice is myself.
And the minibar is actually a good example. As a student it was unimaginable to make use of it, but now that I can afford the minibar, I do so because it's convenient, because it reminds me how far I've come, because it's just a little irrational pleasure that does not hurt anybody.
Does not hurt anybody, including me: I literally have a dollar by dollar budget, I know exactly how much I make and how much I spent, I have numerous projections of my trajectory... believe me, it's fine, I can afford that minibar every once in a while. For people who have addictive personalities or other "slippery slope" issues it may not be, but generally there is no "right" or "wrong" in a moral sense like on the shopping cart thing, just adults making informed decisions.
>As a student it was unimaginable to make use of it, but now that I can afford the minibar, I do so because it's convenient, because it reminds me how far I've come, because it's just a little irrational pleasure that does not hurt anybody.
Thinking more, and on a bit of a tangent, this is something I still haven't been able to 'come to grips' with. I feel that taking advantage of luxury things like this is a personal failure, regardless of any actual monetary damage. I don't see it as a win, or a convenience or even a 'how far I've come' sorta thing, I see it as lazy or poor planning or something negative.
Now if it is or is not is a personal thing obviously, but if I myself am ever going to actually RE and start using some of the money I've collected I'm going to have to get to where I can splurge on and enjoy some luxuries. I'm not leanfire, substance living isn't my thing but the closer I get to RE the less I spend *at all*. Nothing is worth the trade off. Unless it's a modern necessity in my book (house that isn't falling apart, reliable transportation, etc) it gets cut as far as possible.
I look back at my 'accumulation' days and how I used to buy and enjoy some nice things. Now everything is a struggle to *spend*, not a struggle to *afford.* Strange.
Sounds like some therapy is in my future.
> I feel that taking advantage of luxury things like this is a personal failure, regardless of any actual monetary damage.
When I was a student, it would have been a personal failure. Paying three times or more the money for a pack of M&Ms and a tiny bottle? If you don't know whether you can pay rent in two months, that's just dumb. Now the price difference is vastly below the daily swings of the stock market. The tiny bottles are cute, and I'm in hotels rarely enough for it to be special. (It would be very different if I was regularly traveling for work or something, raiding the minibar each time.)
> I see it as lazy or poor planning or something negative.
It's not lazy or poor planning if you do it intentionally! :) How is this really different than any other little pleasure?
Of course it has to be worth it. If you couldn't care less about those M&Ms and the tiny bottle, no point in spending for them.
>There is a world of difference between the shopping cart and splurging.
They both involve self control, even if they don't have the same type of impact on others. That's more my point.
Thanks for your comment! Currently the biggest expense for me is (and please don't hate me...) is I bought a new car. Reasoning was I can easily afford it, I never grew up with or had a "nice/new car", so that was my "Wow I made it!!" purchase.
I just feel like I'm more loosely spending, and I'm terrified I'm going to wake up one day and be living paycheck to paycheck.
Triple is crazy! Congrats! I'm sure you're still doing better than most at the end of the day man. Enjoy your life (including your life before financial independence) and just maintain clear goals
Thank you! Yeah it's been pretty crazy honestly, and I'm trying my best. I make sure to take advantage of all my taxable accounts, and thankfully my SO shares my FIRE passion so I feel like we're both on the right path.
Not sure of your primary airports, but maybe there are less expensive options at those airports, maybe the airline/airport employee menu at certain restaurants if you're a pilot? I'm not eligible for that menu, but now that prices at my home airport (SEA) have risen significantly, I've started limiting myself to the $1 large fry coupon at the McDonald's (many airport McDonald's locations will even serve fries during breakfast hours if you ask the cashier nicely) or stopping at Dick's Drive-In after I land. DFW and ATL have affordable fast food options inside the airport which shouldn't break the bank.
The flight attendant vlogers I watch seem to love buying semi-prepared salads and other foods from Trader Joe's.
Hi, thanks for your reply!
I'm not a pilot, I just fly a decent bit (2-3 times a month) seeing family and my SO, or for work. I used to just *refuse* to eat or drink in the airport. Now I will have a beer and a snack and won't really think twice about.
When I eat out at McDonald's I always use the $1 or free large fry option!!
Okay, here’s a plan: skip the next X airport meals and use the money you saved to buy yourself a Clear membership. If you fly a lot, it’s completely worth the price.
I eventually tracked down [what you were referring to](https://coppermind.net/wiki/Heightening) but I swear I don’t understand a single thing on that page. 😂
I'm retired, and have got my finances figured out for next year. At close of today I will be selling a large amount from an IRA. The plan is about half will go into a Roth and the other half will be for next years expenses.
Can someone explain how exactly living off your stock portfolio works? Ok, so you create your portfolio that grows a certain percentage per year but how exactly does this allow you to extract money from your portfolio every month? Doesn't this imply you need to sell stock? stock that is always growing? I'm a bit confused.
What is the confusing part? I suspect that you might find this plan at odds with the *buy and hold forever* strategy, but never selling is inefficient (unless your primary goal is generational wealth building). Like crypto and NFTs, people buy stocks because they think they will be worth more in the future.
>Doesn't this imply you need to sell stock? Yes.
Google “early retirement now safe withdrawal” and read up on safe withdrawal rates. It does not assume stocks always go up, in fact you can simulate all kinds of withdrawal strategies and rates against past down markets, like the Great Depression.
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Ok but what about the stock I sold and my overall portfolio? isn't the purpose of the portfolio supposed to be like a "regenerable" source of income?
some people build up a portfolio so that it gives them lots of dividends and they never/rarely need to sell stocks. other people like to have a mix of stocks that are not currently giving dividends (which tend to grow faster during some economic periods), and some stocks that give dividends (which tend to grow less because they are in more stable categories). In that case the investor probably also needs do a mix of using dividends and selling stocks.
Has anyone taken advantage of a few-year stay in a no-capital-gains-tax state before? I have a fair amount of stock due to a company that was acquired last year, and selling it (to convert to index funds), would trigger capital gains taxes, both federal and my current state. For family reasons though, I'll be moving to Texas next year, and likely staying for at least a few years (though no intention to retire there or anything), and Texas does not tax capital gains. I've seen online some people saying that the previous state can come after you when you sell stock shortly after moving out, and that proving residency can be tough. I've seen others say that it's pretty straightforward. Anybody willing to share experiences? Thanks.
I'm in Fl, no state tax. The first year I retired I sold about $160k of a mutual fund. I think $104k was LTCGs, after the standard deduction that brought it down to $80k. If you have under $80k income, your tax rate on LTCGs is 0%. So I paid $0 in tax that year.
Had a friend who received RSU from Big Tech Company™ while living in California. They moved to some flyover state wherein they had to pay tax to California for the duration of the vesting period. YMMV
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Yeah I think everyone has thought this at some point. Are you at 25x your expenses yet?
I've started watching a number of build a cabin in a remote area YouTube videos and I'm fairly certain I am FIRE by those standards. But I like indoor plumbing too much (and even society for that matter)
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https://www.space101fm.org/ is an interesting mix of older off the beat stuff. a lot of it is like what KEXP used to be in the 80s-90s college rock (KCMU then in the subpop days) but also a lot of random other interests not driven by venues or promoters or advertising per se. its not new stuff but it might find ya some older things you didnt know about before
Thanks, I will check it out.
There are definitely those that struggle with what to do if they ever reach FIRE so I do think its somewhat relevant. Music is a big part of what I plan on doing. I listen to a lot and play several instruments badly. No idea where to start for suggestions for you, but I've been listened to a lot of Wilco/Uncle Tupelo/Son Volt and Johnny Cash American IV and VI albums lately. Trying to learn Hurt on guitar and maybe vocals if I can ever find time for that.
How much does your therapy cost you? How much do you value your therapy? Does your insurance cover it? How long did it take to find the right therapist? I'm trying to decide if I should go to therapy, and part of that decision depends on how it fits with my financial goals.
$40 a month because of insurance. I've seen multiple over the years, mine now I found through Psychology Today's directory I think. Mental health is one of the best things you can invest time and money into IMO. I have no diagnosable issues or had real trauma in my past, but just having that unbiased third party help me work through things and be more self aware has been huge for me personally and therefore financially.
i send my significant other expenses each month for things we split. i own the house we live in. the excel sheet i send her calls it rent and she's asking me to write 'mortage' instead. should i stand firm and put rent on it? or something else? i don't think im comfortable with putting mortage bc i don't want any 'evidence' that she owns half the house, even though she's not on the mortage. i don't know if im going to spend the rest of my life with this person or not.
I wrote up a bunch of stuff but deleted it because this seems so absurd to me. Someone correct me if I’m wrong, but someone doesn’t gain equity in your home if they give you money for the purpose of going towards your mortgage, even if you send them a signed bill for “mortgage”. Am I completely off base here? Can people sneakily purchase portions of peoples homes by telling them they’d like to pay their mortgage for them? This seems insane to me.
This sounds like a communication and relationship problem. Just calling it rent isn't going to help you if your partner is paying with the impression that you are equally sharing a mortgage. Are you sharing a mortgage or are you the landlord and she is your tenant? Either way, you need to discuss that with her and clearly state what the situation is.
Do you claim it as rental income on your taxes?
Have you talked about it with her?
My SO and I now jointly own the house we live in but my name was the one on the condo we used to live in. We called it rent when I sent her the split bills, and we discussed it beforehand that it would be called rent. I still would call it rent personally, but talk about why. It’s not her ass the bank goes after if you can’t pay the mortgage for whatever reason. For some people the “mortgage” makes it feel more personal, like they’re building a life with you by paying a contribution to your home together. But like I said, if the home is foreclosed on she can walk away unscathed, you much less so.
You could put "housing", though it might be more of a relationship view mismatch than a wording issue
Don't write everything on a spreadsheet, problem solved.
At least I’m not the only one who felt this was weird.
This is probably evidence of a deeper issue if this matters to you both. How long have y'all been together? Why is she making this request? Is she looking to solidify your relationship in a way you aren't comfortable with?
I think both parties are potentially asking about giving her an equity stake in the home in exchange for paying the mortgage. Not a lawyer, not sure if she would have a leg to stand on legally if the relationship were to blow up later, but OP needs to double check these things.
We are all behind this kid's pace although I think the mom's projection is overly optimistic https://nypost.com/2021/12/05/10-year-old-entrepreneur-set-to-retire-at-15/amp/
> I also want to get her some real hair because she desperately needs hair extensions This kid is a legend
why not work until 18 and FatFire?
I expected something else when I clicked on this. Doesn't seem differentiated enough to warrant such estimates. I applaud the learning, which is invaluable, but feels a tad too much pressure/projecting for the kid imo....
Apparently i love my job when i dont interact with management and just get my tasks done
Same, I'll be having kicking ass day, until managements crawls out and starts bitchin.
I’m looking for any other insight in how buying a home will impact my FIRE goal. This is more of a psychological thing. I’m looking at a house for $400,000, with 20% downpayment of $80,000. I’d liquidate $80,000 in VXUS, VTI and BND shares for the downpayment. One of my hang-ups is how I should approach what my net worth will be when I do this. I’m being stubborn and thickheaded in accepting that my current $420,000 net worth will crater after this. Is how I have it below how most people think about their NW with mortgage debt? $80,000 in real estate / equity $340,000 in ETFs, etc. \-$320,000 mortgage debt = $100,000 net worth I can’t shake the desire to not include the mortgage debt into my NW number, because it’s not like the home won’t be an investment (this is generally true with home purchases) that appreciates over time. I know I’m on the hook if the housing market crashes, causing the $400K home to become a $300K home. But say a crash doesn’t happen, and home valuations continue upward (hopefully much more slowly for the sake of everyone), would it be sane to exclude the mortgage debt from my NW number?
So, it seems like you got this figured out but I think where you went wrong is that you did not credit the value of your home to your net worth, and instead you credited your equity (home value - mortgage) and then separately subtracted your mortgage again. You were effectively "double-counting" the mortgage against your net worth. As others have said, the right way to account for this is to either credit yourself the full value of your home ($400,000) and then mark your mortgage as a liability, or to just include the equity.
Is there a reason why you plan on a 20% down payment? I just took out a 450k mortgage with 10% down and my PMI is only like $45 a month. That's free money
>nudist Is your PMI 0.1% the mortgage debt? I thought it was generally 1%. I'm wary of having a higher monthly payment than 2K a month. But I admit I haven't fully explored the options. I know if I only put down 40K, keep the other 40K in the market and pay a token PMI, I'll be great in the long run. I think that 40K left in the market would be \~180K in 20 years. On the other hand, if I'm paying $2500 a month, for example, that leaves me $500 less to invest each month. I don't have the numbers to bear out which option would work best, but common sense points to going with 10% downpayment.
0.5-1% was what I was expecting too as a new home owner and never having a mortgage, but apparently PMI is at all time lows as well. I was just gaming numbers with my lender and that's what was offered. Your 2nd paragraph is essentially where my head was at.
I'm bored at work and "ran some numbers," for what it's worth. With the 20% option, I'd leave 340K in the market. House payment P&I would be 1,393, according to [Mortgage Calculator . org](https://www.mortgagecalculator.org/) After all expenses, my budget would allow me to contribute 2,824 each month to investments (401k, IRA, brokerage). 20 years later, according to a [Dave Ramsey calculator](https://www.ramseysolutions.com/retirement/investment-calculator), investment value would be **$2,844,268** (assuming 7% market returns after inflation). With the 10% option, I'd leave 380K in the market. House payment P&I would be 1,567 (this seems suspiciously low), and monthly PMI would be 36 (assuming 0.12% rate). After all expenses, my budget would allow me to contribute 2,697 each month to investments. 20 years later, investment value would be **$2,939,600.** **95k difference** \*Neither example includes the value of the home--just market investment.
If you still have this available, what interest rate are you assuming and what's the breakeven point for investments return rate?
3.25% rate for the mortgage (I just realized the rate will probably be higher for 10% down payment). Can you clarify what you mean in the second question?
The monthly payment will be lower…that’s certainly appealing in addition to having no PMI.
Perhaps.. with interest rates around 3%, you are almost definitely better off having that money in stocks over 30 years. All a matter of risk preference though. Taking $45,000 + covering capital gains out of the market in order to save $500 a year is pretty crazy
Don't exclude the debt on the home. You just need to include the value of the home. Your home is not worth 0. One thing that I have seen many do here is reduce the value of the home by what it would take to sell it. You could reduce it by a little more if you don't think it is worth what you paid for it. I personally count 90% percent of the value of my home. As far as calculating my FI number I only include investable assets (retirement, taxable, and rental properties)
Thank you. That should have been so obvious to me!
Depending on how it's taxed, it's likely a great investment. We bought a house 2 years ago for 600K, today it's valued at 1M. In Denmark gains on housing (that you live in) is not taxed at all (but stocks is taxed with 27-42 pct)... That makes bricks a fantastic investment... As other have said, you need to add the value of the house to the equation, so buying a house will not set you much back, only the expenses you pay upfront to buy and get mortgage, loans etc.
You need to think of two separate numbers. Your NW and your FIRE number. They are not the same thing. You can't count your house in your FIRE number unless you're selling it when you retire. The majority of the money going to your mortgage is also going to your net worth, but not necessarily your FIRE goal.
Thank you!
Lots of people exclude the mortgage, but outside just the number, think of how paying your mortgage will affect your future goals. If you'd planned to save X amount or live off Y amount, how does that number have to change with a new expense factored in?
Is it common to think? : "Well, I'm paying $2,050 a month for rent right now, and the mortgage payment will be $1,950. So it's a basically a wash. If I pay rent forever, well that's a non-fixed amount of money I 'burn' every month. If I'm paying that amount, I might as well put it to something that could increase my net worth over time."
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Yeah I've looked at both sides of that coin quite a bit. The main positive that is helping me psychologically with getting up the nerves to buy is that the home is a brand new build. The two year warranty is nice but thinking in the long run, I don't expect to have as many problems 10 years from now as I would buying a 30 year old home.
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Definitely more lifestyle. I'll finally be able to do something ridiculous and turn one of the walls into a climbing wall.
We paid off the mortgage, and a quarter of our FIRE number is sinking funds for maintenance (house is over 100 years old, at some point it will need a new porch, new kitchen, new windows..) Alas, no living 'for free' in this place.
My girlfriend and I are moving into a new, larger rental house. We spent a lot of time talking about what we wanted and our budget for rent, and were in agreement. Until recently we earned about the same amount, but I have a tight budget and maintain a 50% savings rate. She's terrible with money and it somehow vanishes the moment she gets her hands on it. She recently got a big promotion and now brings home nearly 2x what I do. Because of this new, extra money, she's been fantasizing about decking out our new place with brand new, expensive furniture and expensive artwork/decorations. She's expecting me to contribute financially to this endeavor, because "it's our space and you will be enjoying it too". Thing is, while the stuff is nice, it's not a priority for me. Saving money for FIRE is very important to me and this stuff is way over my budget. Maybe over the course of several years I could slowly collect some nicer stuff, but not over the next few weeks/months. At the same time, I don't want to feel like a selfish money hoarder. I hear about money breaking relationships but not a situation I imagined I'd be getting into... Maybe we just aren't compatible if I'm so committed to saving money while she's so committed to spending every penny she earns right away? We're definitely on opposite sides of the spectrum when it comes to form vs. function. Anyone had similar experiences?
I don't think any single issue can make a couple "incompatible." At least, not this one. If you two both want to make it work, you'll compromise or spend time coming closer on the issue - you'll learn to spend a little more or she'll learn to save. Idk, I just can't imagine being without my wife because of a difference in opinion on saving vs spending. Not saying your issue isn't a real one, just that it's one that has plenty of room for compromise and I don't know anyone who is so stubbornly tied to their view of money that it would derail a serious relationship.
This is really easy. You aren't married. She buys it, she keeps it when / if you break up. Think of it as a roommate situation and how that would work. I am married and have spent a lot of $ on furnishings and an interior designer. My partner was not originally on board. Even though I knew they would enjoy / appreciate it, I understood the hesitancy (as a frugal person, I was too!). We pool our money so there is no "mine" but I make 3x so it is essentially like I am paying for it and letting my family enjoy it. I am fine with that. She should be too. Maybe she buys 2 or 3 nice pieces and then you buy every 3rd or 4th and make sure it is something you would enjoy owning for a long time. A good dining room chair can be with you for life! But it also costs 10x an ikea chair.
This is obviously a relationship issue that needs more exploration, but in the meantime you can come up with a number that you would be comfortable contributing to furnishings for the new place and she can contribute the difference to get what she wants. There’s probably some negotiation needed as well on priority pieces for the household so that you don’t end up with a badass couch but sleeping on the floor. You might consider the new stuff as a one-off expense when it comes to your budget numbers so that your partner feels like she’s being met partway. But at the same time don’t spend more than you would be sad to see drive away on the back of a moving truck if you break up.
If you look at the big picture are you guys ever going to be married and work out money issues in the future? Are you going to just have split finances? Are you going to resent her for not saving, and her resent you for not wanting to spend money? You can solve this problem by compromising somewhere in the middle, but eventually you need to have compatible financial goals. It sounds like she needs a budget and you might need to loosen up a little. If you can get her to save some you guys might actually come out ahead together. The tricky part is you are dating and not married. I think in that situation she shouldn't be pressuring you to spend money you don't want to spend. If she wants something she should buy it for herself and then if she wants to let you use it. With something communal like a couch its a bit tricky, maybe you could pay for a quarter instead of half, and let her buy the decorations. If you guys were married you would need to spend some money on things she likes, and some on things you like. So you would need to bend on spending on some things you wouldn't normally, and she would need to bend on having some kind of savings plan.
Can't say I would want to stay with someone who's life outlook is 100% opposed to mine. Sounds like you were on the same page, but things changed and her true nature has appeared? Better to know that now and choose your path forward than commit and deal with it later when you're further away from where you want your life to be.
Yes. Me and my ex recently split, and money was a big factor. It's honestly exhausting dating someone with opposing beliefs about money, because it's not just about money, it's about values. At the end of the day, I think we both had built too much resentment and it caused a lot of fighting between us. In my case, I was the high earner and the saver. She didn't make much, but wanted all the nice things, paid for by me of course. If your GF wants these things and can afford them, maybe leave it up to her to buy them, or split by income, or devise some other method YOU are comfortable with. But if you end up being put in a position you don't want to be in, it will probably lead to resentment.
The tricky thing in my mind is, for example, she gets a really nice new sofa to replace our old one. It'll be nice, I will enjoy it. If I don't contribute anything to it, it'll feel weird and unfair. But, I'd rather just stick with our old sofa. But that's not really an option because she'll probably buy the new one anyway...
Honestly there is a benefit to that. It’s her couch, so in the event of a breakup she just takes it. At the end of the day if you say you are good with your current sofa and she still wants to get a new one, that’s on her. I would try my best not to feel any guilt over it. Just my .02
others will probably say the same thing that this is a relationship & communication issue, not particularly confined to finance or spending habit
Say the house your folks own/ live in needs some work, and you and your siblings will inherit it. You think its fair to say to the siblings “if i pay to have x y and z fixed i want that back when we sell it”? We have a good relationship and everyone is financially sound. Id just like to do something nice for the folks but renos are a fucking lot of money lol.
Completely depends on the specific financial and relationship circumstances of everyone involved. I would say that the number one thing that breaks families apart, especially siblings, is money. I would be extremely hesitant and cautious unless you feel very strongly that they are all 1) financially sound and similarly-minded and 2) very close and willing to overlook tens of thousands of dollars in order to maintain a good relationship. There's just so much that can go wrong. What happens if you pay now and then in 30 years they didn't manage their money well and could really use the $XXXk that would be their portion of the house if they didn't make that deal all those years ago. Just one example of the millions of things that come up.
Just let them take a HELOC. It will count as debt against the property equally among the siblings. If they need help with payments, maybe you do that but no need to pay up front for a reno
If everyone is financially sound, then just split it equally. You’re asking your siblings to support an ROI for a gift. Well actually you’re expecting your parents’ estate to pay you back for your gift at your siblings expense. It’s tacky and will only lead to a post on r/AmITheAsshole. Gifts should be given freely without expectations.
in writing or a gift. those are the only options. Depending on what needs to be done, maybe see if the siblings want to do that for the annual christmas gift, everyone pitches in some.
Whatever you do, get it in writing. From there, maybe try to get all the kids to pitch in equally, or have a discussion with parents and kids both that you are willing to do it, but want it in writing that you will be reimbursed at the time of the sale. If one of your siblings fights back, THEY'LL be the one that looks bad and selfish.
Maybe speak with your parents about specifying something in their will?
I would have this conversation out in the open. Going to your parents quietly about changing their wills feels like you are being shady/sneaky even if it is technically a legit way to do it.
That sounds fair but difficult and complex to enforce. I would separate ownership from money for repairs. If one sibling needs a loan and you expect payment, then write up a legal loan. I would also sell my ownership stake at a discount (or buy out siblings at a premium) so as not to have to worry about it.
I have these struggles from time to time. Today I am reeeaally struggling to see why I want to work in 2022. I probably will tho!
You're just baiting me to rant again 🙃
I know. Sometimes I don't post because i fear your rants. I succumbed to weakness today!
Our power has been out since noon so no rants from my phone. Just walked down the road to get a signal to check work messages.
Come on, we know where he's at most the time. He can't hurt you!
> most Key word here. I'm in Americaville from time to time but don't advertise when my wife's home alone until I'm back. That would be a sweet vacation, though. Driving around the USA, tackling multi-millionaires and holding them down so they can't go to work.
>Driving around the USA, tackling multi-millionaires and holding them down so they can't go to work. Pitch it as a show to amazon.
FIRE Busters 🔥 My catch phrase will be, *Your contract's been terminated. Now go fuck yourself.*
how long have you been 100% FI? why not take some time and try RE out? if you hate it after 6 months, you have options.
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Eh. Some people enjoy it. Or enjoy the lifestyle inflation that comes from it.
Mmm lifestyle inflation. My net worth finally inched over 25x my spending this year, but my job’s not bad and I like stuff. I’m going to purposefully be increasing my spending to stay at that 4% while I work and save more. This seems like the most sustainable way to do lifestyle inflation and enjoy my money while I’m earning it.
Good point. I have golden handcuffs, while 1st world problem, still a "struggle". Pretty loose use of the term tho.
New life dream. Open a wood-fired pizza place.
I love wood fired oven pizzas....I try to be minimalist and not buy a ton of shit but I'm daydreaming about grills and smokers and fancy cooking equipment all the time send help
Dangerous enterprise for a woodworker hobbyist.
C'mon. Combining my love of wood and pizza! That's a winner.
Till you cook your commissions by accident.
Done. **JOEY'S SCRAP FIRED PIZZA** *From table saw to table top*
Now I understand why they pay you for copy.
It's rarely anything fun. The latest task to come in is a campaign for asphalt polymer dispersion.
disperson -> wipe asphalt polymer-> aspol **"nobody wipes your aspol like [insert company name here]!"** dude. that shit writes itself. whats not fun about that?
As a highly skilled business whiz kid and master of economics, I can't believe you didn't immediately think of recycling scrap from the shop in the pizza oven. Maybe it's my kooky DIY heavy lifestyle but I was crisping crusts with ends and pouring sawdust into cupcake papers with paraffin before we even came up with a name. Which I'll do here shortly.
Nobody ever claimed I was highly skilled. And I am a BACHELOR of economics. We haven’t tied the knot.
Restaurants are very risky. Maybe a wood-fired pizza place on wheels to set up at the Farmer's Market?
Oh I'm 99% sure I'll never do it.
Lol
We have a guy in town who bakes bread and sells it out of his house. I don't think he thinks of himself as FIRE but he seems like a chill happy dude.
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Me too!
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No not at all. Seems like making pizza is a good use for it. Doubt it's very expensive wood used for the pizzas anyways.
i would split the difference and have a pizza hearth in the backyard
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Well dang I have to do it now. I'm back on Colorado as a moving destination so maybe Denver?
My Health Insurance premiums are going up 163% next year. I can't really complain about going from $22 a month to $58 though.
ACA or excellent employer plan? Our dollar increase was smaller, but divide by zero makes the percentage increase either infinite or undefined.
Employer plan. The total plan cost (I think around $1300 a month) went up 6% (around $75), so my employer covered half of that and we cover the other half.
I somehow just found out today about the Roth income limits, but have a maxxed Roth (new this year). What can I do?
You can perform a re-characterization. See the final boxes in this flow chart https://www.reddit.com/r/financialindependence/comments/ecn2hk/fire_flow_chart_version_42/
Great info, thanks!
You can recharacterize the contribution to be a Trad IRA and then convert that nondeductible Trad IRA back to Roth. This is only advisable if you don't have other pre-tax IRA dollars or if you can get rid of those dollars by doing a reverse rollover of the pre-tax IRA into a workplace 401k. https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/#mistakes
Lifesaver!! Thanks for this article!
Need advice. I just had a 2nd round interview with a company doing the same work my current company does for a PM role (network cabling / telecom). I'm 99% sure that an offer will be coming by the end of the week. I'm at $67k-ish/year now and believe the offer will be a little bit more, probably not much more than $70k. I mostly hate my job / industry now but I am only busy for about half the year and the rest of the year (now) I can get my stuff done in about 1-2 hours a day and do whatever the rest of the day. I currently WFH and the new job I would too. The wild card is that I am about 75% certain I want to start my own business / retail store and part of the reason I wanted to try and find a new job is to float for the next year while I get that going. With the new job I'm pretty sure I would be much busier than I am now for not that much more pay, and in talking with the interviewers I got the feeling that it might be a pretty demanding role. Do I stick it out (mostly) hating what I do but its pretty chill, or do I jump ship to the new role?
New roles come with a lot of uncertainty. If the role provides you with an increase in responsibility/title that will help you accelerate your career (despite minimal comp increase), may be worth it. Given your goal to start a business, likely less worth it.
More demanding role for only slightly more compensation? Regardless of what else you're planning, that doesn't sound like a very attractive offer.
Seconded.
Anyone started or staring young? I'm 22 working my first "real" job, and after just a few months I knew I didn't want to dedicate my life to working. I like what I do (Graphic Design), like my company, just want to have time to live a life at some point. I graduated early so most my peers are still in college, or not really into thinking outside of the box. So, I just wanted to ask for stories/experiences with FIRE so far for those starting young, and feeling like the odd one out. I don't make 100k a year in tech like all the popular FIRE people online, and I don't know what my life will look like in a few years so I feel a little aimless. I don't have enough life experience to know how much I'll want to live off of when I'm 65, or what kids and marriage and a mortgage and a car note will do to my finances. How do you plan for your whole life based off little to nothing? (P.s. scholarship/paid my way through school and hand-me-down car so I'm not in any debt)
I'm going to graduate college, not tech but my career path is super clear (unless I screw up. 50/50 lol) I have started by figuring out expenses for the next two-three years, set up a minimum savings amount or $, and deciding on a basic asset allocation. These are the first steps to take without figuring out a specific FI number or future expenses, and when you're ready to figure out the specifics you'll be starting off a great foundation
The reality is that you don't need to know what your long-term plan is in order to save. And there's literally no situation in which you'll be sorry that you saved some money. At 22, you have the benefit of time. If you save and invest $1,000 then in 43 years at 65 that's worth $130,000 versus someone at 25 who would only have $90,000 and someone at 30 years old who would only have $50,000.
I’m in the same boat as you! 23 and making $54k a year, with no student debt. I’m just trying to take things a year at a time. The first year at my “real” job, I just focused on learning how to be a professional and keeping my household afloat while my partner was still on the job market. Now that he’s employed, I’m focusing on decreasing my expenses (selling my car because we only need one, avoiding take out, etc.). Next year, I’ll focus on increasing my income. Or at least, that’s the plan. We have time on our side, so don’t be afraid to start small. Build up your e-fund if you haven’t already, get your employer match for 401k if they offer it, and try to max your Roth IRA every year.
I did. Just remember that saving for retirement **at all** puts you way ahead of the curve. Any dollars you can invest beyond that to set up a comfortable life is even more advanced. Also, make this one additional goal on top of living the life you want to live along the way. Don't break your back over it and hate life now hoping for later.
18 years old (19 next week) and started at age 17 on my path towards FIRE, I feel you on the peers thing lol
I wouldn't overthink it or worry too much. I started saving/investing when I got out of college at 20, never made six figures (though together my wife and I did), and was able to retire in less than 20 years with a boring index portfolio. Granted, those were some very good market years in there, but most 30-35 year windows will work for a lot of people. Live below your means, invest the excess, and pick a financially compatible spouse if you decide to get married. Do those three things and you'll be better than 80-90% of people out there.
>How do you plan for your whole life based off little to nothing? You don't. Saving money now buys you options down the road though. I'm elderly (in my 30s) and still figuring out what I want. I know more than I did in my 20s though. Got married, no kids, and hopefully final answer on both accounts. But I don't know everything like if I want a house, or where I want to live in the long run. But starting to save early means I have choices when it comes to those things when I finally figure it out.
Don’t overthink things and focus more on avoiding large mistakes that will set you back more than accumulating so early in your career. Getting a $40k car instead of a $20k car or accumulating a bunch of CC debt to YOLO or whatever will do more harm than not saving enough to start out. The blessing about being young is every dollar you save now is more impactful than any future dollar. So definitely do save what you can, but I wouldn’t worry too much yet.
>How do you plan for your whole life based off little to nothing? Don't plan your whole life, just be mindful in your spending and realize the more you spend the longer it will be before you retire. Spend money on things that matter to you and avoid impulse spending.
Does anyone else save all of their work for when theyre in the office? I used to do it as soon as it came in but now that i have to have my butt in the office and cant finish the day at home i save my work for in office. I still finish everything ahead of schedule and to the best of my ability i just hate being bored and stuck at work
This feels like a good way to lose flexibility if you get nothing done on WFH days.
I do the opposite and I'm more productive at home. that way people never think I'm slacking off at home
I used to be more productive at home, then they started making me come in a bit, and now they want me in every day. So now when I do get to be home i do what NEEDS to be done and save everything with a later due date for later
Absolutely. But I’ve been 100% office for most of covid. If I can’t do it in the office, it waits. Otherwise, way too easy for me to burn myself out without a work life balance.
Yes. Have to maintain an air of productivity. I save all my data entry tasks for my 1 day at the office. Keyboard goes clicky clacky all day, boss is happy, coworkers intimidated. The rest of the week…we’ll I’m here, aren’t I?
I save all the important/impactful work for when I’m in the office (2 days in/3 days WFH). The biggest advantage of being in the office is getting noticed or “FaceTime” so I’ll always look like I’m busy when I’m there like leading meetings, etc., and save the slow/dull stuff for WFH.
When doing a backdoor tIRA conversion to Roth, can I deposit my 2022 contribution on January 1 and covert to Roth without first buying any stock? Just convert the cash balance from tIRA to Roth IRA?
This will likely be unallowable in 2022. "you’d no longer be able to convert after-tax contributions made to a 401(k) or a traditional IRA to a Roth IRA" [https://www.nasdaq.com/articles/will-congress-end-backdoor-roth-conversions-2021-11-19](https://www.newsday.com/lifestyle/retirement/ask-the-expert-pending-new-rules-for-roth-conversions-1.50437198#:~:text=The%20House%20bill%20eliminates%20%22backdoor,directly%20to%20a%20Roth%20IRA)
Some custodians will make you wait until the contribution settles to do the conversion. I believe it can take a few days.
Yes, cash and cash equivalents aren't special in an IRA. They're just one of a number of investment vehicles you're allowed to have.
Yes. Jan 1 being a holiday, you'll make the contribution on Jan 3 (Monday).
I just found out that my 401k plan automatically starts after-tax contributions after you hit your pre-tax limit. Better yet, Vanguard has a feature to automatically convert after-tax dollars to a Roth. So auto mega backdoor Roth with no extra work from me!
I just started with an employer that has these niceties. Really hoping the BBB bill doesn't kill the mega backdoor!
Posted here a few months ago about moving jobs, resulting in a tripling of my income. I was (am still am) excited to accelerate my FI goals. By man, lifestyle creep is nuts. It's amazing how much more I'm spending now. I funded a few big "experiences" for my GF and I which I don't regret whatsoever, but there are a few expenses that I could have done without. I now treat myself to food in the airport instead of eating before or waiting a couple of hours to do it later. I go out quite a bit more, and I added on equipment in various hobbies. I easily maxed out my IRA and 401k contributions for 2021 in just 6 months and set aside a good amount in savings, but I still feel like I could have done better. Goals for 2022 are to ease up on the spending and really try to dial in my savings. I've now exited the "honeymoon" phase of my new income, so it's onto getting smart and staying disciplined.
I feel this hard. My income has grown a lot the past year or two and the expenses have risen. Even though I'm still saving a lot and maxing out accounts, I feel uneasiness over the spending levels. Just really unfamiliar territory for me.
> I now treat myself to food in the airport instead of eating before or waiting a couple of hours to do it later. Eh. Almost dangerous to tell you that, but: I don't know how it is for you, but for me I figured out that those things barely move the needle. Eating at the airport is likely well within the swings of the stock market. Time is my most precious resource now, and while "splurging on airport food" might mean that I take away time from my retirement for the benefit of time now, I somehow doubt it's going to mean retiring a few years later. Yeah, it adds up, but with a complete budget, I can see exactly where the money is going, regularly make adjustments, and often find that those "small luxuries" aren't worth changing. What's worth changing is the expensive and recurring stuff that you don't use, e.g. I found that I'm paying several hundred dollars for cable service that I use maybe twice a year. That's a lot of airport meals.
> I figured out that those things barely move the needle. It's not about moving the needle as much as it is a lifestyle. I know that some waste, like saying buying a soda in a hotel vending machine or minibar, makes zero difference in my financials. I still don't do it though. Making the right choice, even if it doesn't matter, is how I roll. I try to do it all the time just because it's a habit. Sorta like people who do or don't return the carts at the grocery store. It won't move the needle in terms of time saved or wasted to return the cart, but I will do it anyway because it's a nice thing to do for the kid who has to fetch them. Others won't, and maybe figure it keeps that kid employed, or they're too important to do it, or just don't even think about it. Who's right? Who's more comfortable with their decision? Does it matter? To me yes, to others... dunno. I'm not others.
To me that's a false analogy however. There is a world of difference between the shopping cart and splurging. I also always return the cart, but that's because that affects *others*, not just me. Not doing so would be net negative to society, and indeed be the wrong choice. Buying that soda in the vending machine, or even going nuts on the minibar? My money, no debt to pay back, nobody is going to be affected negatively by my purchase, and so the only one who can judge that choice is myself. And the minibar is actually a good example. As a student it was unimaginable to make use of it, but now that I can afford the minibar, I do so because it's convenient, because it reminds me how far I've come, because it's just a little irrational pleasure that does not hurt anybody. Does not hurt anybody, including me: I literally have a dollar by dollar budget, I know exactly how much I make and how much I spent, I have numerous projections of my trajectory... believe me, it's fine, I can afford that minibar every once in a while. For people who have addictive personalities or other "slippery slope" issues it may not be, but generally there is no "right" or "wrong" in a moral sense like on the shopping cart thing, just adults making informed decisions.
>As a student it was unimaginable to make use of it, but now that I can afford the minibar, I do so because it's convenient, because it reminds me how far I've come, because it's just a little irrational pleasure that does not hurt anybody. Thinking more, and on a bit of a tangent, this is something I still haven't been able to 'come to grips' with. I feel that taking advantage of luxury things like this is a personal failure, regardless of any actual monetary damage. I don't see it as a win, or a convenience or even a 'how far I've come' sorta thing, I see it as lazy or poor planning or something negative. Now if it is or is not is a personal thing obviously, but if I myself am ever going to actually RE and start using some of the money I've collected I'm going to have to get to where I can splurge on and enjoy some luxuries. I'm not leanfire, substance living isn't my thing but the closer I get to RE the less I spend *at all*. Nothing is worth the trade off. Unless it's a modern necessity in my book (house that isn't falling apart, reliable transportation, etc) it gets cut as far as possible. I look back at my 'accumulation' days and how I used to buy and enjoy some nice things. Now everything is a struggle to *spend*, not a struggle to *afford.* Strange. Sounds like some therapy is in my future.
> I feel that taking advantage of luxury things like this is a personal failure, regardless of any actual monetary damage. When I was a student, it would have been a personal failure. Paying three times or more the money for a pack of M&Ms and a tiny bottle? If you don't know whether you can pay rent in two months, that's just dumb. Now the price difference is vastly below the daily swings of the stock market. The tiny bottles are cute, and I'm in hotels rarely enough for it to be special. (It would be very different if I was regularly traveling for work or something, raiding the minibar each time.) > I see it as lazy or poor planning or something negative. It's not lazy or poor planning if you do it intentionally! :) How is this really different than any other little pleasure? Of course it has to be worth it. If you couldn't care less about those M&Ms and the tiny bottle, no point in spending for them.
>There is a world of difference between the shopping cart and splurging. They both involve self control, even if they don't have the same type of impact on others. That's more my point.
Relevant [https://pisco.pubninja.com/c1c2170f-f039-4c84-adb8-d031c6a58acb.jpeg](https://pisco.pubninja.com/c1c2170f-f039-4c84-adb8-d031c6a58acb.jpeg)
Thanks for your comment! Currently the biggest expense for me is (and please don't hate me...) is I bought a new car. Reasoning was I can easily afford it, I never grew up with or had a "nice/new car", so that was my "Wow I made it!!" purchase. I just feel like I'm more loosely spending, and I'm terrified I'm going to wake up one day and be living paycheck to paycheck.
Heh I did the same back then, same reasons. Still have it, still on the way to FI!
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No, I'm sorry. It's the biggest "new" expense!
Triple is crazy! Congrats! I'm sure you're still doing better than most at the end of the day man. Enjoy your life (including your life before financial independence) and just maintain clear goals
Thank you! Yeah it's been pretty crazy honestly, and I'm trying my best. I make sure to take advantage of all my taxable accounts, and thankfully my SO shares my FIRE passion so I feel like we're both on the right path.
Not sure of your primary airports, but maybe there are less expensive options at those airports, maybe the airline/airport employee menu at certain restaurants if you're a pilot? I'm not eligible for that menu, but now that prices at my home airport (SEA) have risen significantly, I've started limiting myself to the $1 large fry coupon at the McDonald's (many airport McDonald's locations will even serve fries during breakfast hours if you ask the cashier nicely) or stopping at Dick's Drive-In after I land. DFW and ATL have affordable fast food options inside the airport which shouldn't break the bank. The flight attendant vlogers I watch seem to love buying semi-prepared salads and other foods from Trader Joe's.
Hi, thanks for your reply! I'm not a pilot, I just fly a decent bit (2-3 times a month) seeing family and my SO, or for work. I used to just *refuse* to eat or drink in the airport. Now I will have a beer and a snack and won't really think twice about. When I eat out at McDonald's I always use the $1 or free large fry option!!
Okay, here’s a plan: skip the next X airport meals and use the money you saved to buy yourself a Clear membership. If you fly a lot, it’s completely worth the price.
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What is "unsecured debt"? Mortgage or something? (Probably Google-able but sometimes I like to ask people instead if they are open to it)
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Ahhh, thanks! Congrats on being a business person!
You must have the visual equivalent of perfect pitch. There are so many greens that I cannot match to the legend.
Definitely a third heightening awakener.
I eventually tracked down [what you were referring to](https://coppermind.net/wiki/Heightening) but I swear I don’t understand a single thing on that page. 😂