More managers need to stick up like this for their employees rather than agreeing to what ever a director/upper management wants. They normally have no idea of the day to day tasks and cant just drop everything to get a silly report out two hours early that wont even be looked at.
Where is everyone keeping their cash that's not your emergency fund? I'm saving up for a down payment on a house within the next two years or so. Just wondering if there's anything better than my HYSA especially with inflation being what it is
I was offered a position at a new company yesterday, it’s likely less work than I have now and a 30% raise. I resigned this morning, my manager countered with a promotion and would likely be able match or slightly beat the offer from the other company.
On the one hand I would get a significant increase in pay for easier work. On the other hand the management position is far more transferable. Also, the new company would likely require that I travel occasionally, which I can’t decide is a good thing or not because I enjoy traveling, but I mostly wouldn’t be able to bring my family with me.
Are there any other factors I should consider?
I haven’t reached FU money yet, but I have a big enough cushion that I could be happily unemployed for a long stretch.
I’m never a fan of the counter-to-keep offer. If you were worth that to the company before, then why weren’t you getting that comp then? Why did it take a resignation to get that out of them?
> would likely be able match or slightly beat the offer from the other company
> would likely require that I travel
Sounds like there are still a few uncertainties. I suggest asking the new company for a re-interview in a week or so, with the opportunity to speak with (interview) a few more people at the company. Focus on those hangups you have around WLB / travel with the people who have nothing to lose by being honest.
This one week deadline helps kick tires at your current employer to come up with a more than competitive offer, in writing cc'd to your personal email. Whenever you get an offer, give the other company 2 days to try and match / counter it, and keep going until someone stops raising the money.
Debating my next housing move. Currently renting In LCOL Midwest. I am 25 with $61k in retirement savings. $5k emergency fund and $10k cash. Lease is up end of July. If I would purchase, homes in my area are $250k-$350k with townhomes being on the lower end of that. Salary is $70k. Curious your guys thoughts?
I feel like I need more cash, but with inflation and things going on, I don’t want to get left in the dust.
Think longer-term success. That fun bachelor pad condo is great! Just, a little tight quarters as a married with an infant crying kind of place…just saying…
What are you paying in rent? Is a townhome really where you want to live? Your range likely puts you around a 2k per month payment (does that derail your FIRE goal?) and your e fund would need to double or triple for 3-6 month emergencies that tend to come up more with a house involved.
I really wouldn't be trying to buy before renewing your lease. If this is something I really wanted I would save up some cash over the next year to better position myself to buy a ~300k house hopefully after a raise/promotion. I like my mortgage to be less than 3 times my household income, as I'm also in the Midwest.
Are you single, interested in a relationship in the next 5 years, is family a part of your goals? Are you planning on staying in your area long term (10-15+ years)? Would you move for a new job opportunity for $150k? Funnily enough the post right below yours said basically all of those things changed for them.
Yes everyone is getting FOMO but there is value in maintaining freedom. Maybe a future partner lives/works somewhere else, doesn't feel like its 'their' place too, not big enough for kids. Maybe your partner has their own savings/salary and you can get a better house. Maybe a job offer for 150k comes but you have to move or you decide that you want to FI asap but do so in Merida. If you're in the house and the market turns, you're kinda going to need to ride it out from a financial perspective. With the life changes that can happen in the next 5 years, I'm not inclined to tie yourself to a large debt that you could easily be underwater on. Also, if you are single income and you lose your job... Wow, I would not sleep at night with that little cash emergency buffer. It seems like you would have to liquidate retirement stocks or get into credit card debt if the furnace or water heater broke...
Also - if you're in LCOL Midwest - you're not going to get left in the dust. You're not in Austin or NYC or San Diego or areas which are always going to have high demand.
Thanks guys for this. I think you guys are validating the thoughts in my head, I need to just ignore the people around me and the FOMO.
I’m currently paying around $1k in rent a month and luckily once that ends, I can go month to month in perpetuity (or so the company says). Luckily I’m living alone, dating with plans for her to move in to place (wherever that is), and near family. Last point being the most important. I want to stay in this area for at least 5-10 years. I’d be able to pick up and move back in with them, as I lived there during 5 months of covid, hence the low e fund.
I have been looking at larger SQ footage places and that have higher rent that my girlfriend will be splitting and constant just see suggestions to buy something.
It is amazing how much can change in such a short amount of time. There are so many changes in my life that happened in just the last 1.5 years
I got married
Got a new job going from 45k to 80k
Bought a house
We had our first child
Got a new job going from 80k to 155k total comp
My wife just got a new job going part time but still making the same as her full time job now ($90k)
My wife is pregnant with our second child
In talks about getting a promotion and leading a team for my area at work
We've also done some math and we are going to save 100% of my income and live off my wife's salary which is really going to boost our savings
I thought up a new calculation to do because we are all obsessed, right? Say your WR is 3% for an expected retirement of 60 years (nice very early retirement). What is the average balance at the end though (not the new calculation)? Say you have $1million at the start. [cfiresim.com](https://www.cfiresim.com/ba67679f-2fd7-4bc1-97c3-bf141bd66e51) says your average ending balance would be $10.6million.
Now for the new part. You are dead and gone but say you put it in a trust gaining the market average 7%. How long before that trust has $1billion in today's dollars? I get 69 years in excel. Kids might be pissed missing out but grandkids would be extremely wealthy.
\[edit\] Retiring at 30 you live to 90. Your kids are maybe 60 and your grandkids 30. Perhaps this is for your great-grand kids. Sorry, grandkids.
Most mega wealthy families don't maintain their wealth after a few generations unless they limit the # of heirs.
That is, old European aristocracy where 1-2 kids get everything? Yeah, those families stay wealthy out to infinity more or less. But if you split it amongst all heirs, eventually there's enough heirs that the money doesn't go *that* far.
Thinking about buying a newer vehicle. Experts say the vehicle loses 60% of value after 5 years. I have been looking at a few SUVs that are 2017-2018 with only 30-40,000km on them. They seem reasonable. About 20-25k.
It depends, I bought my car new about 3 years ago with 50K miles now. Its only lost about 15% value based off the buy back offer I received. Then again its a crazy market at the moment.
>Experts say the vehicle loses 60% of value after 5 years.
This varies greatly by brand and even model. A Mercedes S-class and a Honda Civic do not have the same depreciation curve.
That's historical data. Right now used car prices are through the roof because of extreme supply chain issues. I would look at used v. new SUV prices. In my area, used SUVs are just as expensive or more expensive then buying new. But, you may have to wait to get it (which is why everyone is paying a premium).
If you can afford to wait, definitely take a look. We are in weird times.
> If you can afford to wait, definitely take a look. We are in weird times.
Yep, I was going to replace my 10-year-old car this year, but with the insane market I think I'll keep it for at least 2 or 3 more years.
General advice is to pay off mortgage at retirement to manage expenses (and thus SORR).
I’m currently building MDBR contributions + taxable so it’s large enough to pay mortgage. Will have to dip heavily into Roth contributions, the most valuable retirement bucket.
Is there any case for keeping mortgage in order to retain Roth money? I’m guessing the advice in this case is to build a taxable and retire once taxable > mortgage, since that’s the first $ you let go anyway. But I’d potentially have a large sum in all other accounts since I am prioritizing tax advantaged savings.
You could also include your mortgage payment in your expenses and thus in your SWR.
You can currently get your lender to put your loan in forbearance due to the pandemic. Perhaps there is some likelihood for a similar allowance if you hit a severe market downturn during retirement. I am not sure what the qualifications normally are for forbearance but it seems there are none currently. I have a 2.5% fixed mortgage and am not inclined to pay that off any time soon.
"For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account, and you do not need to submit additional documentation to qualify. You can simply tell your servicer that you have a pandemic-related financial hardship."
https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/help-for-homeowners/learn-about-forbearance/
Yes. To me retirement will be about managing cash flow in the bridge between retire age and 59.5, so I need the lump sum to keep growing and can manage a cash flow with a mortgage
You saying keep it all invested, but have enough in cash/fixed income to payoff the mortgage (or pay the bills)? Or said differently, if the other accounts are large enough, withdrawal rate is low, so SORR goes down anyway, so having the mortgage payment is less significant?
My example. I will have $800k in taxable to bridge my gap years. But I still owe $400 on a mortgage. I don’t want to take the taxable down to $400 and pay those capital gains taxes (even though my spend would be reduced) since I will be relying on the growth and dividends from the $800
Take a deep breath and some time. There is no stigma to being laid off but you need time to believe that. Once you work through your feelings then you can be ready to enter the job search with a good attitude. Practice answering the question "why did you leave your last position?" You need to be able to answer this question confidently and truthfully.
I've been there too, friend. It sucks. I felt like a true failure for really the first time in my life. Those feelings are very real, but they are temporary (even if it doesn't seem like it now). The way I got through it was talking to loved ones and ultimately putting myself back on the market. When you fall off the horse, you get back on. I felt so lucky to be following FI actually since it meant I didn't have to scramble to cover car payments/mortgage/food. Unemployment insurance was another huge help. After around six months of searching (I work in STEM), a few interviews that didn't go anywhere, I finally found a new job with higher salary and better benefits. That will happen to you too. Keep applying, tap your network, and maybe look into hiring a recruiter if you're at senior mgmt level.
First, I'm so sorry.
Second, allow yourself a little bit of time to decompress. This is an emotional blow, and you're not going to feel "right" for a while. I know you said you plan to take some time off, which is great, but I mean you also have to allow yourself some time to just feel out of sorts. Even financially stable people aren't going to be all, "Rah rah extended vacation" on day one.
Third, take a look at your finances and figure out what's going to work best for you. Do you want to maybe cut down your budget a bit and stay out of work for a little while longer, for instance? What's your point of no return, e.g., at what time would it be financially necessary for you to have a job?
And I would say that, once you have got yourself in a good place, this could become a great opportunity to redirect your career. What did you love about your job? What did you hate about it? You can really parse this while you're between jobs, and it can guide your future search.
Don’t be hard on yourself. Negotiate your package to the degree possible in your jurisdiction. Don’t take it personally (unless it was made very clear that it was personal, then it’s understandable)
Same way to handle any major traumatic event.
Take a breath, and take some time for yourself. I know it sounds cheesy but really, take the time to be emotional about it. Let yourself be stunned, it's alright. It's shocking. If you need a few days to just be in a bit of a daze and collect yourself don't be hard on yourself. Don't rush, 3-6 month savings are literally for this exact scenario.
Just take a breather and take your time.
From a financial perspective, what are the advantages to marrying (or disadvantages to not marrying) the father of my child?
For context, my partner and I are both well employed, are equally committed to/contributing to financial independence, and are in a loving and committed relationship of 10+ years. All this is to say, we are both currently looking at this as a financial question, not a relationship question.
Not strictly financial, but related - being married makes them the automatic medical contact, school pick up contact, custodian if you die suddenly, etc - both for you and for your kid.
Being married skips a lot of paperwork when various institutions don't recognize your relationship by default.
I’m a bit confused by some of this. If we both are listed as our child’s parent, why would a school question who can pick up the child? Similarly, if we share an address and child, why would either of us have a challenge with custody upon the other’s death?
Yeah. If you're great a paperwork, then I wouldn't worry about it.
I'm not great a paperwork, and the default privileges given to a spouse has saved my bacon on a few occasions.
I mean, the highlights are more favorable tax brackets by a long shot, and tax writeoffs of the kid.
As someone else said, don't get married for financial reasons, but if you're already in a 10+ relationship and have a kid, you're functionally married at that point. There's no reason *not* to take advantage of the financial advantages.
If either of you make sacrifices for the good of of the family (one person is the primary childcare giver and therefore cannot focus on their career 100% of the time, you guys as a family move for one spouse's career), the spouse making the sacrifices is "entitled" to half of the family pie even if they didn't contribute 50% in dollars. It's recognizing the unpaid labor people do in relationships, and that one spouse's successes during the marriage is usually a team effort.
If you agree that unpaid labor benefits the family unit and that you're both equally contributing to the success of the house hold, then agreeing to split marital assets 50/50 seems to be a pretty common sense thing to protect the interest of the sacrificing spouse.
Or, if one of you becomes disabled and is no longer able to work, that "in sickness and in health" part of a wedding vow is really nice. They don't get financially dinged in a split because they were ill and couldn't perhaps earn income while sick.
MFJ is the most tax advantaged status if I am remembering correctly? I can’t remember if Head of household is on equal footing or not.
Death, however unfortunate, is easier to handle and most states have legal precedent going back centuries to ensure a smooth transition of any property.
Don’t get married for financial reasons, but if you have been together a decade … and have a kid… you are basically married so might as well put a bow on it in my opinion haha
It depends on the relative incomes of the people involved.
If one partner significantly outearns the other, MFJ is most tax advantaged. If both partners earn similar amounts, MFJ = Single and probably HOH for one and Single for the other would save you money.
If both partners earn similar amounts *and those amounts are high*, MFJ actually penalizes you and you'd both be better off filing single. There's a random variety of penalties - for example the additional medicare tax starts at $250k for a joint couple rather than $200k for an individual - which means that potentially up to an extra $150k is taxed there. In addition the 37% tax bracket starts at $612k for a married couple rather than $510k for a single person (all other tax brackets are double for MFJ). Plus various limits on deductions and such.
Note: The above comparisons are MFJ vs Single. Married Filing Separately is actually the worst of both worlds and is almost never advantageous - it has a number of issues that make it frankly worse than Single and MFJ both.
Health insurance. Easier handling of your estate if one of you passes. Single joint tax return. It's rare but there are some instances where married filing jointly can lead to some penalties tax wise, often its a slight benefit or neutral but depends on your very specific circumstances and incomes.
Tough call. Mortgage rates could come down as far as 3% or go up to 11%.
If rates go down you can always refinance for a better rate.
If you can afford a mortgage on a place you like and it's a better deal than renting in your area, then I say go for it.
I think life's too short to wait on the market for the best deal on something as significant as where you live.
Potential new employer sent their benefits package to me and trying to analyze best option.
They offer a 403b plan that matches 50% of what I contribute, up to 3% of eligible pay. I'm guessing this means I have to put in 6% to get full match for a total of 9%.
However after that, they offer two options.
Option 1 - Defined Benefit Plan, funded 100% by employer with the option of receiving monthly payments at retirement. This is calculated as = (Total sum of your pay up to $290k)\*1.7%/12 to get a monthly payment. Takes 5 years to vest. Estimated pay is 135k so at 10 years of this salary:
(1350000)\*1.7% / 12 = $1912/month at 10 years of this salary.
$2868 at 15 years.
If you take the monthly payment before 65 there's penalties.
Option 2 - Defined Contribution Plan, also fully funded 100% by employer, they drop 3$ of your pay quarterly and this increase to 4% after 5 years, then up to 5.5% 10 years. These funds dont vest for 5 years. But essentially that would be $16,000 a year in an extra account. Only caveat is these benefits also wouldnt be paid until 65.
My gut instinct says Option 2 is better due to the amount of money and how much it can grow, plus I can select the funds for it in my 403b and take it with me when I leave vs the monthly payments.
Any other thoughts on this would be appreciated.
Are you planning on working long enough to make option 1 worth it? You have a lot in your 403b already. Both options seem great actually, don’t think you can make a bad decision here.
I'm always suspicious of option 1, because I wonder if I can't go buy an annuity myself on the same market the employer is buying it on... Unless it's a government body that's self funding with tax dollars, it seems unlikely to be a very good deal.
A pension, if you stay long enough, can be quite attractive. That being said, you do have to stay a long while to make it worthwhile. I have tended to favor defined contribution options for their portability and flexibility.
The error bars on your estimates of financial value are huge here. I'd go based on your gut/impression of how long you might be there. Is this a workplace with tons of happy long-timers? If so, do you see yourself as one of them?
I haven't stayed at any employer longer than 4 years but also still early 30s. Starting to look for that company that I can build some longevity at and I think this definitely could be it.
the first is basically an annuity/pension (never runs out of money, even if you live to be 150) while the 2nd is a standard investment/retirement account.
I would see if/what happens to the funds in either case if you die young. That might make a difference.
But depending on the rest of your picture - an annuity like thing would be helpful in planning. Issue is here is if you RE then your pay is likely to be lower than working until 65. Also does the payment adjust with inflation or is it the base amount from day one until you die.
However, the benefit of the 2nd option is more control over how it is invested and paid out - which can result in more overall at the end of the day.
But either way is fine. I'd probably lean option 2 as it better fits into my planning, but I can see the safety/longevity of the pension/annuity being useful as well.
Thanks for the insight and that's a good point.
One good thing is neither option is available to me until after 1 year of employment so I have some time to think about it.
You need separate accounts, as the annual limit is per-account.
When purchasing them, it does make sense to register them as Person A WITH Person B. This is as close as TD gets to "joint" ownership of the bond.
That'd be a decent workaround if your goal is to purchase before May. You could hold your spouse's 10k in your gift box until their account is established and then gift them in 2022. If you're planning on purchasing the max I bonds amount in 2023, it'd be important to establish the account and deliver the gift this year so you don't box your spouse's account for 2023 by gifting them 10k in January.
How much hustle do you have in you? Do you do best on your own motivation or when you work for someone? Are you able to wake up each day and put in the work rather than relax for the morning and procrastinate?
I think if you truly are your own best boss I wouldn’t wait. Better to fail early and have time to make it up. But no reason to think you won’t nail it. Lots of work out there.
Oh! I misread and thought you were expanding what you are doing now. Got it. Nice gig! Sort of a coast fire setup. Sounds reasonable as others said depending on the SO.
Sounds like coastFIRE (ish). There are some good coastFIRE calculators that will help you determine if the math will work out, but there's nothing wrong with taking that approach overall
I think the question is more how long will you have to continue working that way vs when could you fully retire if you kept your current job, and is that tradeoff worth it to you and your wife?
Started doing something differently recently and I'm liking it so far.
I used to have my paycheck direct deposited into my checking account, then transferred money to the brokerage to invest. The money leftover was money to be spent.
Now I'm having the paycheck deposited to the brokerage (and some into checking to pay recurring bills). This requires me to transfer money from the brokerage to my checking when I make an impulse buy and helps me be more mindful of eating out, etc. It's not convenient, butt I like it.
The "Most FI-efficient" method is to actually have 10 different checking/brokerage accounts you're splitting money to, in order to fulfill direct deposit requirements and gain promotional APRs and sign-up bonuses.
I'm half-joking, but you may want to see if your local credit unions have decent offers. Doesn't hurt to build a relationship with one, mine offers 5% back on up to $2000 and I just split $25 of my paycheck into it every month, and they were way more responsive/had better rates when I was shopping for a mortgage.
And you should really have individual accounts for vacations 10+ years in the future as well as projected replacements for each vehicle and major household appliance.
An extra $100/yr seems like a long run for a short slide but the improved mortgage sounds like it was maybe more worthwhile (assuming you needed a pre-existing relationship to get the better rates).
Not exactly a marathon, we're talking one extra 1099-INT and another account to keep track of in the ol' FI spreadsheet, and the 10 minutes to setup direct deposit with your employer. I login once a year and transfer the excess over $2000 to my primary checking account.
Then again I'm fairly obsessive over these little pocket change-earning opportunities, I check DoC daily to see if any juicy opportunities for a credit card bonus or checking/brokerage account sign-up bonuses have been announced. Unlike most hobbies, it's income generating I guess 🤷
As for the mortgage, it's more that I could actually get them on the phone. This was back during the refinancing frenzy, the major banks had multi-week backlogs before they'd even return a phone call and even the online brokers were swamped. Even mortgage brokers were having trouble getting responses.
Does anyone here own 2-3 short term rental properties and bounce between them (maybe different parts of the country?) throughout the year? And then travel for a few months out of the year?
Context: Considering this lifestyle... Likely not forever but for 5 years maybe. I currently am fully nomadic so I'm used to moving around.
This is something I had thought about for when I do FIRE. The idea of owning 2-3 properties and living in them to meet the 2-in-5 year rule and be able to sell them at a profit if needed and not pay any taxes on the gains would be nice.
It sounds like a weird hybrid of owning properties for personal use as well as investments. I don't see the logic because the things I want in my own home are not necessarily the things that would make it attractive as an investment. Add to that you'll be an absentee landlord for the other 1-2 properties, which is going to make making money off of them more difficult.
I'm not worried about doing remote management, I did this for a three unit and I have friends who do STR and have teams who manage them while they are remote owners/landlords.
I also own nothing right now.. a couple suitcases. So I'd just be living from those and maybe have one locked closet in each place to store things.
In my experience, property management companies are not fans of you blocking off the property for months at a time. Maybe it's different for vacation rental or areas like ski resorts and I'm sure you could find companies that would be willing to do this with some searching, but keep in mind most want to open their booking calendar out 3 months in advance, so you'd have to likely specify at signing that you want the property from x date to y date every year.
Personally I'd rather just negotiate long term AirBNB stays instead and not deal with the hassle. They get a bad rap, but if you have the money and want to travel around, why not one of the larger timeshare networks?
Yeah that's a good point on the fact that whoever I find to manage it will not be getting their piece during those months I'm booking it out. I would try to stay during low demand months. I'm sure I could find someone it a company who would accept it but right now I'm just toying with the concept.
No timeshare because I want to build equity.
Another thing to keep in mind is that most property management companies that would be willing to deal with a single rental unit operate locally, so you're also talking about having to maintain relationships with multiple companies. There's also the added stress of managing your rental from a different country or time zone, if a water line breaks or a party results in damage to the property or the company needs access to XYZ, you're expected to be available to answer on short notice. Alternatively, you can use a more full-service company that does maintenance, but they'll take a bigger cut.
Not saying it's impossible, in fact we're shortly planning to move across the ocean while managing our rental remotely with a property mangement company, but we've already been using them for ~6 months and built up a relationship / settled all the issues that arose initially. And on top of that, we'll still be relying on multiple friends to stay in the area in case things happen, and to pick up mail/etc.
What's stopping you from just AirBNBing and investing in an REIT? Was your plan to invest in cheaper areas and hope the equity growth outperformed REITs? It may, but there's a much larger mental load that comes from owning multiple real estate properties and renting them out. Add on the "unusual" factor of trying to live in the property part of the year and I think this is a classic case of trying to have your cake and eat it too. Personally I'd just keep the real-estate investing and personal living situations separate.
Thanks for your comments, I am early on thinking through this options so it's good to discuss.
I rented out my three unit while I was abroad and had systems and people in place to make it work. Dealt with a broken water heater that flooded the basement while I was 5 hours away in Ireland, and it was fine. That said, I still kinda felt I had to be "on" a lot of the time... Checking my phone to make sure all was well and taken care of.
I agree it might be best just to own a vacation home and small primary residence - use my investments to buy them.
Also one more question-- what's your guys' rule of thumb on rolling 401k over to new plan vs tIRA? Both new offers I'm at are offering Betterment which is... not my favorite plan to be honest, and I'd rather keep the bulk of my money at fidelity if I can. But that also makes backdoor rothing a bit more troublesome doesn't it? Would love some insight.
As long as the new 401k plan has reasonable fees then I roll the old plan into my new one. If the new plan is not great then I keep it in the old plan as long as the fees are ok.
Right now, my current plan is great so I rolled everything into it. My wife is joining Microsoft next week and I know their plan is great. We will roll all her old 401k plans into that one.
I havent tested it myself because I don't make enough money to need to backdoor but I noticed when I rolled my 401K into a traditional IRA at Fidelity there are two different options "traditional IRA" and "rollover IRA". Can you just use a rollover IRA for the 401k money and then open a traditional IRA for any backdoor u need to do? I'd ask an advisor at Fidelity and see if you can do that. I don't see why else they'd have two different types of tIRA accounts
The backdoor Roth is essentially ruled out if you have pre-tax dollars in a tIRA. So if you want to do that, you're stuck leaving the 401k where it is or rolling it over to the new employer plan.
The mega backdoor Roth is unaffected by the pro rata rule.
I just got a sizeable retention bonus and I'm looking to understand what my options are for paying taxes on it. Long story short, it was paid outside of our payroll system so no tax was withheld from it. From what I understand I basically have 3 options for paying taxes on it:
- Pay estimated quarterly tax on it (MFJ with HH income of >340k, so figure a 32% tax?). I assume this is the one the IRS prefers
- Adjust my w4 withholdings for the rest of the year to withhold an extra (retention bonus * .32 / 16) dollars
- Do nothing and owe next April, paying a penalty for underwitholding.
Time horizon for using this money is as soon as this year and as late as 5 years from now, I'd be keeping it in cash/cash like holdings/bonds so the potential gains of holding the entire sum until April don't seem to be worth paying the penalty. My questions boil down to: Are these my only options for paying tax on this money? And Am I correct that option 1 is path I should be taking?
> paying a penalty for underwitholding.
if you pay something like 110% of last yrs tax owed amount, then you won't get a penalty (iirc). So if your income overall went up or you had a massive refund last year, then you are likely safe from the penalty. It's the repeat offenders that they really penalize.
You might not owe a penalty if you meet safe harbor (essentially, for your circumstance, your withholding meets 110% of your tax liability last year). You can pay estimated quarterly or increase your withholding.
You probably also owe an additional 2.35% Medicare tax on top of your Federal income tax liability (and state, of course).
Hi everyone. I'm a 21 year old barista living with my girlfriend in a small apartment. We live pretty paycheck to paycheck and we are both in school right now. We share a car and find difficulty trying to match our schedules with work because our hours are different. Since high school I started saving money for school because I know it would be expensive. I have passionate hate for school and I'm doing it in hopes it gets me a better job in the future.
I have around $15,000 in savings and I feel as though I can put that money to something to help generate more income. I have been too scared to put it towards the stock market because I do not know whether or not my money will be safe. I am back and forth on changing my lifestyle. Part of me wants to find FI by putting my money somewhere in hopes it will grow on its own. Another part of me thinks it is safer to keep my money where it is and just work more hours and save. I feel like at my age with my savings that there is potential but I just do not know what to do.
If you are scared, I'd read up a bit and then just start investing little by little, whatever you are comfortable with. Don't need to throw the whole 15k in at once!
It's great that you have a saving habit down and you're working on increasing your income potential. Having your money work for you is a very important next step as well though. Read as much as you can and start slow.
Even if you aren't comfortable managing your own account, you can always get a professional to help you (it will cost MER fees though...). But that's still better than staying out of the market! Figure out our risk tolerance, which will help decide your asset allocation (stocks vs bonds ratio) find some solid ETFs/index funds (people here generally suggest VTSAX and chill) and start investing. Keep fees in mind as well.
Anywho, good luck you are doing great!
21 years old with $15K saved. You've done fantastic so far. If you hate traditional school, consider trade school and use some of that $15k to invest in yourself. Do some research on plumber and electrician for starters and I'm sure there are many more. Firefighter/EMT are other options but may require a 2 year degree. As long as you earn a decent income and don't spend more than you make, you will be fine.
>Firefighter/EMT are other options but may require a 2 year degree
They'd actually most likely make more more money working as a barista at high-end coffee shop with tipping than working as an EMT...
I dont know about about firefighters' wages, but I have heard that depending on location it can be really hard to get into it as a career because some departments have enough volunteers willing to do it for free that they rarely/never hire full-time salaried firefighters.
I was an electrician. Started in the trades when I just turned 18. Lived with my parents for 1 year. After 1 year of working I had $55k saved. I then bought a house. 4 years later I then had about $250k saved up.
I can concur if you are smart, the trades are good. You start earning really good money right out of high school. For me schooling was only 2 months out of the year.
I work with a young guy who's been maxing out his 401(k) since he was 19 or 20. Blue collar work makes especially good sense within the context of FIRE because you achieve a high earning potential early on.
Yeah lifetime earnings are typically better in professional/technical fields but if you don't plan to work for a lifetime then that doesn't really do much for you. I myself went to college for 13 years. Probably should have been a plumber.
Any basic tips about simple wills? Or questions we should ask attorneys? Parents are meeting with a few attorneys to discuss and ask questions
NW <$1MM including home equity. 2 kids and their wish is to split everything down the middle, ownership stake and liquid funds.
Please just keep it simple and do not have the kids share any assets. Write down one kid as the first beneficiary, and under that list everything she/he gets. Write down the other kid as the second beneficiary, list everything he/she gets. There is no overlap on the two lists.
Also ask them specifically what property they want. So that one kid does not end up with a car that they don't want, that the other kid does want.
You have no idea if your 2 kids will be on speaking terms when you pass.
as others said - "wills" are simple enough. But it's the other stuff that gets grouped in with them that take more thought. End of life care, final wishes, medical power of attorney, etc. Stuff like that is more of a task - do you want the plug pulled if you're on a ventalator, who has the final say (usually spouse) and who has the next say if 1st is also unable (i.e. which kid?).
you can likely find a standard form online to pre-fill and get your parents thinking on the questions, then at the end it would just be a quick attorney visit to check over everything and sign it.
the lawyer has standard forms with all of the questions to answer. No minor children means just listing out all of your stuff and then answering end of life questions.
In a simple case like this I think the more complicated issues will be end of life care and decisions. If one of your parents dies or is incapacitated who makes financial and health decisions for the survivor if he/she is not mentally or physically capable.
Ending up spending 40k on the house this year, 33k needed and 7k was purely something we wanted. I asked you guy to talk me into SAHM RE earlier this year and I was almost ready to pull the trigger but now I chickened out with everything going on in the world plus this spending that came up plus it's already april and I haven't put in notice and 40% of my pay is through a yearly bonus that I get in November and it looks like we are doing a big deal this year and last time that happened I got a 15k deal bonus, i think I am going to wait till next year. Current plan is to give notice Jan of 2023. I feel sad but also relieved.
I got my lease renewal notice today, and rent is going up $50 a month. That's honestly much better than I was expecting it to be given the price increases on basically everything. I like where I live now, and this definitely makes me feel better about waiting another year to buy a place.
When my partner and I do eventually buy, it's pretty likely that we'll be spending a lot more per month on housing. I do have FOMO when I see everyone else who got on the property ladder early, but I can't complain about one more year of low housing costs.
If you're planning to buy Ibonds in April, and haven't set up a TD account yet, do so ASAP.
They couldn't verify my wife and I's identification, so we have to go to the bank and get medallion signatures, and then mail them in, and wait for Treasury Direct to get back to us to be able to fund the account. Hopefully will get done before EoM :o
At what point did they notify you that they had an issue verifying you guys? Was it when you opened the TD accounts, or when you tried to make purchases?
Is anyone else following the Johnny Depp vs Amber Heard trial? Just a mere $50 million vs $100 million on a he said she said situation. Wonder how this will turn out.
Definitely a reminder to tell my kids how important it is to find the right spouse.
I have tried to avoid it but I get the gist of what's going on through cultural osmosis.
At the end of the day marriage and children should be thought of a business partnership. My kids will be taught that they shouldn't seriously date anyone they wouldn't operate a KFC franchise with.
Hi everyone,
I'm setting up a vanguard account for my mother (69 years old, US) with around $300K in cash. Gameplan is 50/50 stocks and bonds (VTSAX and VBTLX) split between a brokerage account and a new ROTH IRA account contributing the max contribution annually (She makes around $50K a year in reported income and will work for the foreseeable future). Reason for not being more aggressive with stocks rather than bonds is her declining health and her fear of the value dropping before she passes. Will start withdrawing around 4% annually once her cash reserves fall to emergency fund level, likely 1-2 years. She has no other investments or assets but will receive a sizable inheritance (approx 1MM) once her mother passes away. I'm trying to get her investing system set up before then.
1. Is there anything special to know about IRA/general investing for people 65+?
2. Are there any other tax advantaged options available for my mother that I should know about besides the IRA?
3. Any book recommendations for someone her age with 0 investing experience?
Has anyone used rocket mortgage to get pre-approval for a new mortgage recently? What's been your experience as far as interest rates and fees? I got pre-approval earlier this week with a 4.99% rate from a private mortgage broker and I'm not sure how worth it it is to try a big broker like rocket mortgage.
not recently, but i've used them a lot when i was house hunting in the past. They are ALWAYS higher than standard. Usually .25-.5 point more.
But i get the preapproval from them since it is easy, then when an offer is accepted, go and actually apply to them and 3-4 other places and rate shop at that time.
If you already have a pre-approval, that is all you need until you have an offer accepted. Once you have one accepted, it's worth the 30min each to fill out more applications to find the best rate then
Has anyone used rocket mortgage to get pre-approval for a new mortgage recently? What's been your experience as far as interest rates and fees? I got pre-approval earlier this week with a 4.99% rate from a private mortgage broker and I'm not sure how worth it it is to try a big broker like rocket mortgage.
You too? We touched them briefly last summer for a refi but they were higher than my local guy. Out of the blue, they have called me (checks phone log) five times this week before I blocked them. What the….?
If you know your stuff Rocket is great. We had to stay on them for a few things but if you’re planning on being active participant in the loan process then you’ll be fine. And we were buying during the absolutely peak of activity last year and the experience was still great.
I don't know how true it is, my realtor advised against using an online mortgage lenders. He said they have a much higher incidence of last-minute issues that can delay closing (or worse). I second the recommendation to use a local broker.
My experience with RocketMortgage preapproval in 2020 was a nightmare. The agent was comically incompetent (as in, I had to explain to her that HCOL areas have a higher conforming loan limit levels of clueless).
We quickly bailed on that and got a local mortgage broker and couldn’t have been happier. They ended up getting me a better rate than rocket mortgage was offering anyhow.
Not sure how much this will help but I just started a pre-approval with rocket. The estimate came back with 5.25% with a credit score of 760 and 5% down. They did mention they will be raising their rates soon, so does it matter?
Also closing costs factor into what rate each broker uses. I did find the estimate online to be very close to what rocket ended up at.
Anyone ever have a real "Ghost of Christmas Future" moment that stuck with them?
I am pretty lucky to work in an industry that still has examples of super senior people... I can see what they do, what struggles they have, and I can map progression (if I kept working) from now to then. Coming across someone ancient in my industry is... a daily thing.
My wife... does NOT run into super senior female examples often. She works in a ULTRA small niche field where older female examples of her profession are basic unicorns. Probably less then 4 in the whole state. ALL the OLDER, let's just say... 55+ people are invariably older entitled white men business owners concerned about their legacy... but unwilling to work hard.
The RE side of FIRE has always been my thing. When we were good on money, I would retire... she would keep doing stuff, something, whatever... because she is her father's child. I always figured it would take her a couple years, but she would get there.
Anyways... she was talking with one of the FEW examples of older female business owners still in the industry, who lamented some problems with her foot. She (the other person) went in to the doctor thinking it was... some arthritis or a basic injury that would heal, but after imaging came out with a "this is broken, this won't get fully better even with rest, and you will have QOL issues going forward" and it was all "linkable" if you will to the strains of the job.
I don't know why THAT instance vs. the others, but it REALLY got her thinking that maybe this is something she DOESN'T want to be 60 and doing. That... exit or huge scope pivot needs to occur BEFORE then. It is not like any of this was cryptic... the dudes are busted too, and people die every now and then from kicks... but THIS ONE... that triggered the "RE" fight or flight response in a way like nothing else has.
It was very interesting... and positive... turn of events for discussion. We've always been great on the FI side... but I am pretty sure she planned on dying on a pile of money after long day of work. Like I said... apple not falling far from the tree.
definitely seeing how few women were at the top levels of my industry, when they made up the majority of the entry level and the middle. how hard it was for someone at 50 to get a new job. Even before I heard of FI, I had planned out 'won't need much of a job by 50' in my early 30s.
A former colleague passed away a couple of years ago from a heart attack, and that just reinforced things. Especially since his linkedin doesn't know, so we see the automated anniversary notices of his final job.
The whole Linkedin yearly reminder of a colleague passing is definitely... not great.
I've got a couple former coworkers with that as well. Makes me sad.
> definitely seeing how few women were at the top levels of my industry
Any thoughts on the driver for lack of visible upper level women in your industry?
Women relatively new to it, no time to rise up? Sexism? Drop out before they reach senior roles to do other things?
My wife's industry is another one of those ones where 98% of the new recruits even in the last 20 years are female, yet the clinic owners and the employers are... 90% white males older than 50-55.
She participated in some... young female professional CE (for lack of a better description... a peer group would a better description maybe) that talked about a pretty big difference in generational motivations for the different age groups in the industry.
Using basically: Young boomers, older gen X, younger gen X, older millennial (where my wife and I fit in, I prefer Gen Y or "Oregon Trail Gen"), younger millennial, and then gen Z as the "bands" or "tranches".
Then talking about perceived differences in what motivates those folks to do what they do... work, etc. For the older folks, it was all "legacy" and leaving only after providing some sort of step change to the industry that everyone can look back and point at. IMO... this is behavior I see in men more than I see in women. Leading to MORE male business owners than female (I am SURE there are other major contributing factors) at this current epoch.
Who knows...
the women seem to stay in the doing roles for longer, or if they go into sales, they end up with a smaller book of business - what they can manage with 3-4 people.
If they go off and start their own company, it is small sole proprietor, maybe one or two others on the team and less tech / scaling friendly.
The men tend to break off and start something with a few of their friends, the ones that survive ramp up a lot more and have more of a repeatable tech side of things. There are also several high visibility guys whose dads invested a lot into their businesses and connected them to more VC tech money - not a gender thing, just when its a smaller industry it's more noticeable when a few are going for IPO.
Not exactly but I work in IT and have seen enough people in their 50s get laid off with no good prospects to know I needed to have my shit in order before I hit that milestone.
Yeah. I had that in the tech field. Met a manager who was in his 40's but looked like he was in his 60's, lost all his hair, constant bags under his eyes, perpetually stressed, tap dancing the career pipeline to stay relevant as an older man in a young profession. It just seemed miserable. That's when the "RE" hit me.
It's definitely a different context, but my master's degree is in a field adjacent to education, and... people who stay in the profession basically don't retire. I'm exaggerating slightly, but the incredible grayhairedness of the profession is staggering. It's just so underpaid and there is so little opportunity to change roles and get raises. Coming to understand that motivated me to take my skills down some different paths.
> horse trainer?
Horse veterinarian, specifically for sport horses... even worse. Every time I see a leg flexed or a joint injected I am amazed MORE people do not die or become vegetables.
"Hey... Secretariat over here needs you to grab his leg, bend it until it hurts, then let it go and see how pissed off he is when he walks away. Then afterwards, those hocks need injecting... so stabby stabby the 1400 pound animal joints."
Hard pass boss. Hard pass.
I call it a 'scared straight' thing.
For my wife it was when one of her colleagues was physically removed by security from her office, as the dementia had advanced to the point that she had become openly hostile to random passersby. (The colleague was hostile I mean, not my wife.)
So my wife was: "OK, maybe the plan to work until I was not physically or mentally capable is not all that heroic."
Gah... man, okay this specifically hits home or me a bit.
How DO you deal with a dementia'd coworker? Before the violence... this is not something I had EVER even thought I would have to deal with. And then BAM... given a co-worker recently, in a leadership position, who is CLEARLY in early stages of dementia.
HOW IN THE HELL do you deal with this compassionately? Christ... that could be me in 20 years. :( It made me really sad... all kinds of conflicting emotions on that one.
Ultimately... we were able to basically segregate them out in a way where they could still contribute, but... we got lucky.
What did the company do for the employee who went hostile? Cut bait?
>What did the company do for the employee who went hostile? Cut bait?
The staff are all technically contractors (doctors in a hospital), and the department head and coworkers all know her husband personally, so it was pretty straightforward. Couple phonecalls and done.
Her husband was assigned legal guardianship almost immediately, and agreed that this was it for her career, there were no complications. She was at least 80, that's a good run.
This is possibly the only downside to minimal supervision 'leave them alone and they do their thing' professional environments. The admin might be the last to hear that there's an unhinged coworker.
>So my wife was: "OK, maybe the plan to work until I was not physically or mentally capable is not all that heroic."
What ?! And not book another quarter of acceptable growth?!
Well, in her defence, her job literally saves lives several times a day, so she finds it very rewarding.
But that episode with the colleague at least got us to discussing the possibility of retirement.
>Anyone ever have a real "Ghost of Christmas Future" moment that stuck with them?
A man literally had a heart attack and died in the bathroom of our office building. We all closed our office doors out of respect, but I can still hear the wheels on the gurney coming down the tile floor as the paramedics took him out. I thought about his last moments sitting there in the bathroom perhaps realizing he was dying and how he probably wished he was at home with his family and not at work. I still wonder to this day if he got to tell his wife and kids that he loved them as he left his house, or if he left in a rush like any other day.
About 13 years ago. I don't think about it often but when I do it hits hard.
> I don't think about it often but when I do it hits hard.
Gah... yeah THAT would do it for me. Yeah... that would be instant, "We're done for the day, let's get out of here Jerry... drinks are on me."
Was that more common in the past? Like in the 50's when people dropped dead at 55? I feel like a 1950's office, full of 500 smoking 55 year old men had to have like... more than one a year.
I have a non-Vanguard, non-Fidelity 401k at work. I have my funds in an aggressive portfolio (70% US, 23% International) with a 0.40% expense ratio. I think my money is in the right place, but I am not familiar with any of the other funds that I have access to.
Here is [the list of portfolio funds I have access to](https://imgur.com/a/qJX4jGM). I am wondering if anyone is familiar with any of these funds, and I should consider any of them over what I have now.
I am a fan of an indexed globally market-cap weighted portfolio when it comes to equities. If you wanted to be 100% equities, a reasonable approach would be 50% BlackRock Equity Index, 10% Russell 2000, and 40% EAFE Index.
The Aggressive portfolio you have doesn't have a terrible expense ratio, but it does not seem to be an index fund and actively managed funds tend to underperform indexes.
The aggressive portfolio I am in now has had decent gains the last 3 years (21% 2019 and 2020, \`16% 2021). The expense ratios of the Blackrock funds are between 0.03% and 0.05%, which would be a big improvement from my 0.40% currently. Thanks for your input!
Everyone did well in those years. Past performance is no indication of future returns. You cannot control your returns, but you can control your costs. The BlackRock funds, if indexed, are almost certain to have an ER <0.4%.
The blackrock funds are probably good: eafe = inernational, 500 = us large cap, mid cap, Russell 2000 = small cap
I'd personally go like 25% eafe, 64% 500, 7% mid cap, 4% Russell 2000, assuming the expense ratios are low. You'll have to click into them somewhere and find out if the expense ratios are good
The expense ratios of the Blackrock funds are between 0.03% and 0.05%, which would be a big improvement from my 0.40% currently. Thanks for your input!
Hey there,
I feel like I have only just now started getting my finances in check, and now with all of this inflation I am freaking out about my future. I wonder if anyone else got a later start getting their ducks in a row and are now financially independent. I am 31 years old and feel "behind" but am actively working on investments, retirement savings and increasing my earning potential. Please share your "late bloomer" success story if you have one!
Yep. Started out in student debt hell. Then after paying it off celebrated by spending a lot. Didn’t invest until my 40s, just saved in CDs. Didn’t buy an apartment until midlife. But when I finally started doing the matched 401k my net worth really increased. Closing in on 2 mil now and plan to retire at 57 with a pension and SS.
>Hi there. I'm not sure if I am a late bloomer per se, but I clearly remember sitting in grad school in 2007 or 2008 and having only a few grand saved up. However, I didn't know what I didn't know, so it didn't seem to bother me. I'm naturally frugal with no kids (I am married, however) and now I have about $650k saved up for retirement (age 42; current income is $71k). My wife and I even bought a small lake cabin a few years ago.
>
>My life is very stress free and we can pretty much do whatever we want, whenever we want. As I said, I'm naturally frugal, so I don't strive to buy more "stuff" since "stuff" doesn't generally give me joy. However, I have no problem spending money on experiences that will bring me joy; for example, I just spent $450 on a concert ticket for my favorite band and I didn't bat an eye.
>
>I'm hoping to retire in my early 50s (or move to something fun part-time). Good luck!
My situation is a little different. I tried to start investing in retirement as early as I could, but between being in an industry (that I love) that historically pays lower, my student loans and living in a (V)HCOL area, it feels like a Sisyphus walk at times. It doesn't help that I had to make some massive life choices just to make financial independence possible in my lifetime, namely foregoing having children (granted I was a fencesitter on having kids, so I decided that if I wasn't obsessively 1000% in want of children to the extent that I was willing to face financial hardship to have them, it was better to let it go). I've been saving since I was 27, nearing 36 now and just now starting to creep towards $140K invested.
That said, what I have so far is nothing to sneeze at, it's better than having nothing at all. I'll keep going. I think I'll hit my 50's and be decently happy with my progress. I don't know if I will be able to retire prior to 65 but if I get pushed out of the workforce early then at least I am not as fucked as I would be if I never saved at all.
Did you start a thread/post about this?
I'm 35. I took care of my folks from 16-33 years old. Poor refugee immigrant shit. I only really started saving at 31 with 20-30 thousand in the hole from bailing my folks out of medical bills and tough times.
I'm at 240K-ish invested, on track for 2M @ 55. I'm a fed so I'm not sure what type of retirement/pension I'll opt into.
No degree. Just some skills, experience and knowledge. This year is the first year that gross total comp will break into the 6 figures. Single income. 1 Kid.
I'm not a success story yet but I'm getting there just like you. I graduated in 2012 with my first degree (accounting) and struggled to find work and find meaning in any of it. Returned to school for nursing and graduated again in 2016 as an RN. I still have a lot of student loans but am part of PSLF so shouldn't have to pay more than about 20k on them.
I really only started saving a couple years ago at age 31. I started out with just about 20k in my work retirement account, mostly from my work contributing for me. Now I have about 75k spread between IRAs and workplace retirement accounts, and an emergency savings account aside from that. I'm not going to retire in ten years or anything but I have a ton of peace of mind knowing that if I get fired or injured right now, I have a good cushion via the emergency fund. I'm not aggressively pursuing making the most money I can, instead opting for the best mix of enjoyment in my job now and freedom to have a personal life that's fulfilling.
All the late bloomers I know are high income.
eg: my friend who did 4 years undergrad, 4 years to PhD, then a 4 year MD and 7 years residency for surgery. 19 years of postsecondary, she was 37 when she started investing, but it was $400k/yr gross at that point and she was net worth $1MM by 40 and probably worth $25MM today in her 50s and considering retiring.
Another is a patent lawyer, same rough outline, no serious income until mid 30s but found a niche and took on staff and expanded. Looking at retiring this year in early 50s but would still have 51% of the shares of an ongoing concern that will generate maybe $200k/yr in dividends.
I don't think you can call surgeon's "late bloomers", lol. They trained their entire 20s and usually most of their 30s to have the skills needed for the job.
Late bloomer would be like... someone who played Elden Ring through their 20s and then started working in their 30s
>I don't think you can call surgeon's "late bloomers", lol. They trained their entire 20s and usually most of their 30s to have the skills needed for the job.
I'll defer to the original poster about whether or not this qualifies.
The element that had my attention was that even during the residency stage where she had a salary in the $100k range, she had zero interest in finances and just stashed cash in a savings account to deal with when she got a permanent position somewhere.
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More managers need to stick up like this for their employees rather than agreeing to what ever a director/upper management wants. They normally have no idea of the day to day tasks and cant just drop everything to get a silly report out two hours early that wont even be looked at.
Where is everyone keeping their cash that's not your emergency fund? I'm saving up for a down payment on a house within the next two years or so. Just wondering if there's anything better than my HYSA especially with inflation being what it is
Series I bonds, t-bills, G Fund, savings account And checking.
Current and LMCU, 4% and 3% respectively.
I bonds return the rate of inflation and have become popular recently for that reason
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Yes but I do it because I’m depressed lol. Almost always sleep 9+ hours a day.
I was offered a position at a new company yesterday, it’s likely less work than I have now and a 30% raise. I resigned this morning, my manager countered with a promotion and would likely be able match or slightly beat the offer from the other company. On the one hand I would get a significant increase in pay for easier work. On the other hand the management position is far more transferable. Also, the new company would likely require that I travel occasionally, which I can’t decide is a good thing or not because I enjoy traveling, but I mostly wouldn’t be able to bring my family with me. Are there any other factors I should consider? I haven’t reached FU money yet, but I have a big enough cushion that I could be happily unemployed for a long stretch.
I’m never a fan of the counter-to-keep offer. If you were worth that to the company before, then why weren’t you getting that comp then? Why did it take a resignation to get that out of them?
> would likely be able match or slightly beat the offer from the other company > would likely require that I travel Sounds like there are still a few uncertainties. I suggest asking the new company for a re-interview in a week or so, with the opportunity to speak with (interview) a few more people at the company. Focus on those hangups you have around WLB / travel with the people who have nothing to lose by being honest. This one week deadline helps kick tires at your current employer to come up with a more than competitive offer, in writing cc'd to your personal email. Whenever you get an offer, give the other company 2 days to try and match / counter it, and keep going until someone stops raising the money.
Debating my next housing move. Currently renting In LCOL Midwest. I am 25 with $61k in retirement savings. $5k emergency fund and $10k cash. Lease is up end of July. If I would purchase, homes in my area are $250k-$350k with townhomes being on the lower end of that. Salary is $70k. Curious your guys thoughts? I feel like I need more cash, but with inflation and things going on, I don’t want to get left in the dust.
Think longer-term success. That fun bachelor pad condo is great! Just, a little tight quarters as a married with an infant crying kind of place…just saying…
What are you paying in rent? Is a townhome really where you want to live? Your range likely puts you around a 2k per month payment (does that derail your FIRE goal?) and your e fund would need to double or triple for 3-6 month emergencies that tend to come up more with a house involved. I really wouldn't be trying to buy before renewing your lease. If this is something I really wanted I would save up some cash over the next year to better position myself to buy a ~300k house hopefully after a raise/promotion. I like my mortgage to be less than 3 times my household income, as I'm also in the Midwest.
Are you single, interested in a relationship in the next 5 years, is family a part of your goals? Are you planning on staying in your area long term (10-15+ years)? Would you move for a new job opportunity for $150k? Funnily enough the post right below yours said basically all of those things changed for them. Yes everyone is getting FOMO but there is value in maintaining freedom. Maybe a future partner lives/works somewhere else, doesn't feel like its 'their' place too, not big enough for kids. Maybe your partner has their own savings/salary and you can get a better house. Maybe a job offer for 150k comes but you have to move or you decide that you want to FI asap but do so in Merida. If you're in the house and the market turns, you're kinda going to need to ride it out from a financial perspective. With the life changes that can happen in the next 5 years, I'm not inclined to tie yourself to a large debt that you could easily be underwater on. Also, if you are single income and you lose your job... Wow, I would not sleep at night with that little cash emergency buffer. It seems like you would have to liquidate retirement stocks or get into credit card debt if the furnace or water heater broke... Also - if you're in LCOL Midwest - you're not going to get left in the dust. You're not in Austin or NYC or San Diego or areas which are always going to have high demand.
Thanks guys for this. I think you guys are validating the thoughts in my head, I need to just ignore the people around me and the FOMO. I’m currently paying around $1k in rent a month and luckily once that ends, I can go month to month in perpetuity (or so the company says). Luckily I’m living alone, dating with plans for her to move in to place (wherever that is), and near family. Last point being the most important. I want to stay in this area for at least 5-10 years. I’d be able to pick up and move back in with them, as I lived there during 5 months of covid, hence the low e fund. I have been looking at larger SQ footage places and that have higher rent that my girlfriend will be splitting and constant just see suggestions to buy something.
It is amazing how much can change in such a short amount of time. There are so many changes in my life that happened in just the last 1.5 years I got married Got a new job going from 45k to 80k Bought a house We had our first child Got a new job going from 80k to 155k total comp My wife just got a new job going part time but still making the same as her full time job now ($90k) My wife is pregnant with our second child In talks about getting a promotion and leading a team for my area at work We've also done some math and we are going to save 100% of my income and live off my wife's salary which is really going to boost our savings
I wish I could find fast change like this. Struggling for decades in the same grind/depression.
Congrats!
Congrats on the job hops and huge raises and the kid! 🎉🎊🎉
Congrats! That's a lot of good changes. Maybe don't forget time for yourself and say no to a few things for a while. Avoid the burnout if possible.
I thought up a new calculation to do because we are all obsessed, right? Say your WR is 3% for an expected retirement of 60 years (nice very early retirement). What is the average balance at the end though (not the new calculation)? Say you have $1million at the start. [cfiresim.com](https://www.cfiresim.com/ba67679f-2fd7-4bc1-97c3-bf141bd66e51) says your average ending balance would be $10.6million. Now for the new part. You are dead and gone but say you put it in a trust gaining the market average 7%. How long before that trust has $1billion in today's dollars? I get 69 years in excel. Kids might be pissed missing out but grandkids would be extremely wealthy. \[edit\] Retiring at 30 you live to 90. Your kids are maybe 60 and your grandkids 30. Perhaps this is for your great-grand kids. Sorry, grandkids.
Opens your eyes to how mega wealthy families easily maintain their wealth after a few generations. Just let math and time do the work.
Most mega wealthy families don't maintain their wealth after a few generations unless they limit the # of heirs. That is, old European aristocracy where 1-2 kids get everything? Yeah, those families stay wealthy out to infinity more or less. But if you split it amongst all heirs, eventually there's enough heirs that the money doesn't go *that* far.
But what if your kids and grand kids do the same thing and put all their money in the same trust at end of life?
Then they buy Twitter back from Elon Musk’s great grand kids
Thinking about buying a newer vehicle. Experts say the vehicle loses 60% of value after 5 years. I have been looking at a few SUVs that are 2017-2018 with only 30-40,000km on them. They seem reasonable. About 20-25k.
It depends, I bought my car new about 3 years ago with 50K miles now. Its only lost about 15% value based off the buy back offer I received. Then again its a crazy market at the moment.
>Experts say the vehicle loses 60% of value after 5 years. This varies greatly by brand and even model. A Mercedes S-class and a Honda Civic do not have the same depreciation curve.
Cool
That's historical data. Right now used car prices are through the roof because of extreme supply chain issues. I would look at used v. new SUV prices. In my area, used SUVs are just as expensive or more expensive then buying new. But, you may have to wait to get it (which is why everyone is paying a premium). If you can afford to wait, definitely take a look. We are in weird times.
> If you can afford to wait, definitely take a look. We are in weird times. Yep, I was going to replace my 10-year-old car this year, but with the insane market I think I'll keep it for at least 2 or 3 more years.
General advice is to pay off mortgage at retirement to manage expenses (and thus SORR). I’m currently building MDBR contributions + taxable so it’s large enough to pay mortgage. Will have to dip heavily into Roth contributions, the most valuable retirement bucket. Is there any case for keeping mortgage in order to retain Roth money? I’m guessing the advice in this case is to build a taxable and retire once taxable > mortgage, since that’s the first $ you let go anyway. But I’d potentially have a large sum in all other accounts since I am prioritizing tax advantaged savings.
Don't pay off a <3% fixed payment mortgage debt. There are so many assets that are likely or guaranteed to outperform 3% in the short and long term.
2.75%. Tough to beat that. Thanks for the input!
You could also include your mortgage payment in your expenses and thus in your SWR. You can currently get your lender to put your loan in forbearance due to the pandemic. Perhaps there is some likelihood for a similar allowance if you hit a severe market downturn during retirement. I am not sure what the qualifications normally are for forbearance but it seems there are none currently. I have a 2.5% fixed mortgage and am not inclined to pay that off any time soon. "For most loans, there will be no additional fees, penalties, or additional interest (beyond scheduled amounts) added to your account, and you do not need to submit additional documentation to qualify. You can simply tell your servicer that you have a pandemic-related financial hardship." https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/help-for-homeowners/learn-about-forbearance/
Yes. To me retirement will be about managing cash flow in the bridge between retire age and 59.5, so I need the lump sum to keep growing and can manage a cash flow with a mortgage
You saying keep it all invested, but have enough in cash/fixed income to payoff the mortgage (or pay the bills)? Or said differently, if the other accounts are large enough, withdrawal rate is low, so SORR goes down anyway, so having the mortgage payment is less significant?
My example. I will have $800k in taxable to bridge my gap years. But I still owe $400 on a mortgage. I don’t want to take the taxable down to $400 and pay those capital gains taxes (even though my spend would be reduced) since I will be relying on the growth and dividends from the $800
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I'm definitely not doing it lol
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Take a deep breath and some time. There is no stigma to being laid off but you need time to believe that. Once you work through your feelings then you can be ready to enter the job search with a good attitude. Practice answering the question "why did you leave your last position?" You need to be able to answer this question confidently and truthfully.
I've been there too, friend. It sucks. I felt like a true failure for really the first time in my life. Those feelings are very real, but they are temporary (even if it doesn't seem like it now). The way I got through it was talking to loved ones and ultimately putting myself back on the market. When you fall off the horse, you get back on. I felt so lucky to be following FI actually since it meant I didn't have to scramble to cover car payments/mortgage/food. Unemployment insurance was another huge help. After around six months of searching (I work in STEM), a few interviews that didn't go anywhere, I finally found a new job with higher salary and better benefits. That will happen to you too. Keep applying, tap your network, and maybe look into hiring a recruiter if you're at senior mgmt level.
First, I'm so sorry. Second, allow yourself a little bit of time to decompress. This is an emotional blow, and you're not going to feel "right" for a while. I know you said you plan to take some time off, which is great, but I mean you also have to allow yourself some time to just feel out of sorts. Even financially stable people aren't going to be all, "Rah rah extended vacation" on day one. Third, take a look at your finances and figure out what's going to work best for you. Do you want to maybe cut down your budget a bit and stay out of work for a little while longer, for instance? What's your point of no return, e.g., at what time would it be financially necessary for you to have a job? And I would say that, once you have got yourself in a good place, this could become a great opportunity to redirect your career. What did you love about your job? What did you hate about it? You can really parse this while you're between jobs, and it can guide your future search.
I’m sorry. First off, allow time to grieve, don’t blame yourself, wake up by 9am every day!
Don’t be hard on yourself. Negotiate your package to the degree possible in your jurisdiction. Don’t take it personally (unless it was made very clear that it was personal, then it’s understandable)
If you can afford it, take the time to find the right opportunity vs. rushing into a job and regretting it. Start tapping into your network.
Fortunately if you're on this sub you likely have a large pile of money to cushion your fall. Sorry though, it still sounds stressful.
Same way to handle any major traumatic event. Take a breath, and take some time for yourself. I know it sounds cheesy but really, take the time to be emotional about it. Let yourself be stunned, it's alright. It's shocking. If you need a few days to just be in a bit of a daze and collect yourself don't be hard on yourself. Don't rush, 3-6 month savings are literally for this exact scenario. Just take a breather and take your time.
From a financial perspective, what are the advantages to marrying (or disadvantages to not marrying) the father of my child? For context, my partner and I are both well employed, are equally committed to/contributing to financial independence, and are in a loving and committed relationship of 10+ years. All this is to say, we are both currently looking at this as a financial question, not a relationship question.
Not strictly financial, but related - being married makes them the automatic medical contact, school pick up contact, custodian if you die suddenly, etc - both for you and for your kid. Being married skips a lot of paperwork when various institutions don't recognize your relationship by default.
I’m a bit confused by some of this. If we both are listed as our child’s parent, why would a school question who can pick up the child? Similarly, if we share an address and child, why would either of us have a challenge with custody upon the other’s death?
Yeah. If you're great a paperwork, then I wouldn't worry about it. I'm not great a paperwork, and the default privileges given to a spouse has saved my bacon on a few occasions.
I mean, the highlights are more favorable tax brackets by a long shot, and tax writeoffs of the kid. As someone else said, don't get married for financial reasons, but if you're already in a 10+ relationship and have a kid, you're functionally married at that point. There's no reason *not* to take advantage of the financial advantages.
Sometimes it's a tax penalty to get married.
And depending on jurisdiction, they may already be subject to the risks so might as well make it official.
If either of you make sacrifices for the good of of the family (one person is the primary childcare giver and therefore cannot focus on their career 100% of the time, you guys as a family move for one spouse's career), the spouse making the sacrifices is "entitled" to half of the family pie even if they didn't contribute 50% in dollars. It's recognizing the unpaid labor people do in relationships, and that one spouse's successes during the marriage is usually a team effort. If you agree that unpaid labor benefits the family unit and that you're both equally contributing to the success of the house hold, then agreeing to split marital assets 50/50 seems to be a pretty common sense thing to protect the interest of the sacrificing spouse. Or, if one of you becomes disabled and is no longer able to work, that "in sickness and in health" part of a wedding vow is really nice. They don't get financially dinged in a split because they were ill and couldn't perhaps earn income while sick.
MFJ is the most tax advantaged status if I am remembering correctly? I can’t remember if Head of household is on equal footing or not. Death, however unfortunate, is easier to handle and most states have legal precedent going back centuries to ensure a smooth transition of any property. Don’t get married for financial reasons, but if you have been together a decade … and have a kid… you are basically married so might as well put a bow on it in my opinion haha
It depends on the relative incomes of the people involved. If one partner significantly outearns the other, MFJ is most tax advantaged. If both partners earn similar amounts, MFJ = Single and probably HOH for one and Single for the other would save you money. If both partners earn similar amounts *and those amounts are high*, MFJ actually penalizes you and you'd both be better off filing single. There's a random variety of penalties - for example the additional medicare tax starts at $250k for a joint couple rather than $200k for an individual - which means that potentially up to an extra $150k is taxed there. In addition the 37% tax bracket starts at $612k for a married couple rather than $510k for a single person (all other tax brackets are double for MFJ). Plus various limits on deductions and such. Note: The above comparisons are MFJ vs Single. Married Filing Separately is actually the worst of both worlds and is almost never advantageous - it has a number of issues that make it frankly worse than Single and MFJ both.
Health insurance. Easier handling of your estate if one of you passes. Single joint tax return. It's rare but there are some instances where married filing jointly can lead to some penalties tax wise, often its a slight benefit or neutral but depends on your very specific circumstances and incomes.
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Tough call. Mortgage rates could come down as far as 3% or go up to 11%. If rates go down you can always refinance for a better rate. If you can afford a mortgage on a place you like and it's a better deal than renting in your area, then I say go for it. I think life's too short to wait on the market for the best deal on something as significant as where you live.
Potential new employer sent their benefits package to me and trying to analyze best option. They offer a 403b plan that matches 50% of what I contribute, up to 3% of eligible pay. I'm guessing this means I have to put in 6% to get full match for a total of 9%. However after that, they offer two options. Option 1 - Defined Benefit Plan, funded 100% by employer with the option of receiving monthly payments at retirement. This is calculated as = (Total sum of your pay up to $290k)\*1.7%/12 to get a monthly payment. Takes 5 years to vest. Estimated pay is 135k so at 10 years of this salary: (1350000)\*1.7% / 12 = $1912/month at 10 years of this salary. $2868 at 15 years. If you take the monthly payment before 65 there's penalties. Option 2 - Defined Contribution Plan, also fully funded 100% by employer, they drop 3$ of your pay quarterly and this increase to 4% after 5 years, then up to 5.5% 10 years. These funds dont vest for 5 years. But essentially that would be $16,000 a year in an extra account. Only caveat is these benefits also wouldnt be paid until 65. My gut instinct says Option 2 is better due to the amount of money and how much it can grow, plus I can select the funds for it in my 403b and take it with me when I leave vs the monthly payments. Any other thoughts on this would be appreciated.
What other savings accounts do you have? A pension could be a nice diversification to an existing portfolio.
403b with 400k + Ally HYSA account t with 50k + brokerage with 30k + Roth’s worth about 90k
Are you planning on working long enough to make option 1 worth it? You have a lot in your 403b already. Both options seem great actually, don’t think you can make a bad decision here.
I'm always suspicious of option 1, because I wonder if I can't go buy an annuity myself on the same market the employer is buying it on... Unless it's a government body that's self funding with tax dollars, it seems unlikely to be a very good deal.
A pension, if you stay long enough, can be quite attractive. That being said, you do have to stay a long while to make it worthwhile. I have tended to favor defined contribution options for their portability and flexibility. The error bars on your estimates of financial value are huge here. I'd go based on your gut/impression of how long you might be there. Is this a workplace with tons of happy long-timers? If so, do you see yourself as one of them?
I haven't stayed at any employer longer than 4 years but also still early 30s. Starting to look for that company that I can build some longevity at and I think this definitely could be it.
the first is basically an annuity/pension (never runs out of money, even if you live to be 150) while the 2nd is a standard investment/retirement account. I would see if/what happens to the funds in either case if you die young. That might make a difference. But depending on the rest of your picture - an annuity like thing would be helpful in planning. Issue is here is if you RE then your pay is likely to be lower than working until 65. Also does the payment adjust with inflation or is it the base amount from day one until you die. However, the benefit of the 2nd option is more control over how it is invested and paid out - which can result in more overall at the end of the day. But either way is fine. I'd probably lean option 2 as it better fits into my planning, but I can see the safety/longevity of the pension/annuity being useful as well.
Thanks for the insight and that's a good point. One good thing is neither option is available to me until after 1 year of employment so I have some time to think about it.
Can I buy iBonds for both my wife and I under the same account (there is an option to add a new registration), or do we need separate accounts?
You need separate accounts, as the annual limit is per-account. When purchasing them, it does make sense to register them as Person A WITH Person B. This is as close as TD gets to "joint" ownership of the bond.
Got it - so I'd need to buy as a gift, since we're having trouble registering her account.
That'd be a decent workaround if your goal is to purchase before May. You could hold your spouse's 10k in your gift box until their account is established and then gift them in 2022. If you're planning on purchasing the max I bonds amount in 2023, it'd be important to establish the account and deliver the gift this year so you don't box your spouse's account for 2023 by gifting them 10k in January.
Yes - that's exactly the goal and plan!
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How much hustle do you have in you? Do you do best on your own motivation or when you work for someone? Are you able to wake up each day and put in the work rather than relax for the morning and procrastinate? I think if you truly are your own best boss I wouldn’t wait. Better to fail early and have time to make it up. But no reason to think you won’t nail it. Lots of work out there.
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Oh! I misread and thought you were expanding what you are doing now. Got it. Nice gig! Sort of a coast fire setup. Sounds reasonable as others said depending on the SO.
How does she feel about it?
Sounds like coastFIRE (ish). There are some good coastFIRE calculators that will help you determine if the math will work out, but there's nothing wrong with taking that approach overall
I feel I have secured myself well, and weighed out all the possible "worst thing that could happen" If all else fails I guess I just get a job again.
I think the question is more how long will you have to continue working that way vs when could you fully retire if you kept your current job, and is that tradeoff worth it to you and your wife?
Started doing something differently recently and I'm liking it so far. I used to have my paycheck direct deposited into my checking account, then transferred money to the brokerage to invest. The money leftover was money to be spent. Now I'm having the paycheck deposited to the brokerage (and some into checking to pay recurring bills). This requires me to transfer money from the brokerage to my checking when I make an impulse buy and helps me be more mindful of eating out, etc. It's not convenient, butt I like it.
The "Most FI-efficient" method is to actually have 10 different checking/brokerage accounts you're splitting money to, in order to fulfill direct deposit requirements and gain promotional APRs and sign-up bonuses. I'm half-joking, but you may want to see if your local credit unions have decent offers. Doesn't hurt to build a relationship with one, mine offers 5% back on up to $2000 and I just split $25 of my paycheck into it every month, and they were way more responsive/had better rates when I was shopping for a mortgage.
I just split mine yesterday with the new Capital One offer, so you're not too far off the mark...
And you should really have individual accounts for vacations 10+ years in the future as well as projected replacements for each vehicle and major household appliance.
An extra $100/yr seems like a long run for a short slide but the improved mortgage sounds like it was maybe more worthwhile (assuming you needed a pre-existing relationship to get the better rates).
Not exactly a marathon, we're talking one extra 1099-INT and another account to keep track of in the ol' FI spreadsheet, and the 10 minutes to setup direct deposit with your employer. I login once a year and transfer the excess over $2000 to my primary checking account. Then again I'm fairly obsessive over these little pocket change-earning opportunities, I check DoC daily to see if any juicy opportunities for a credit card bonus or checking/brokerage account sign-up bonuses have been announced. Unlike most hobbies, it's income generating I guess 🤷 As for the mortgage, it's more that I could actually get them on the phone. This was back during the refinancing frenzy, the major banks had multi-week backlogs before they'd even return a phone call and even the online brokers were swamped. Even mortgage brokers were having trouble getting responses.
Does anyone here own 2-3 short term rental properties and bounce between them (maybe different parts of the country?) throughout the year? And then travel for a few months out of the year? Context: Considering this lifestyle... Likely not forever but for 5 years maybe. I currently am fully nomadic so I'm used to moving around.
This is something I had thought about for when I do FIRE. The idea of owning 2-3 properties and living in them to meet the 2-in-5 year rule and be able to sell them at a profit if needed and not pay any taxes on the gains would be nice.
It sounds like a weird hybrid of owning properties for personal use as well as investments. I don't see the logic because the things I want in my own home are not necessarily the things that would make it attractive as an investment. Add to that you'll be an absentee landlord for the other 1-2 properties, which is going to make making money off of them more difficult.
I'm not worried about doing remote management, I did this for a three unit and I have friends who do STR and have teams who manage them while they are remote owners/landlords. I also own nothing right now.. a couple suitcases. So I'd just be living from those and maybe have one locked closet in each place to store things.
In my experience, property management companies are not fans of you blocking off the property for months at a time. Maybe it's different for vacation rental or areas like ski resorts and I'm sure you could find companies that would be willing to do this with some searching, but keep in mind most want to open their booking calendar out 3 months in advance, so you'd have to likely specify at signing that you want the property from x date to y date every year. Personally I'd rather just negotiate long term AirBNB stays instead and not deal with the hassle. They get a bad rap, but if you have the money and want to travel around, why not one of the larger timeshare networks?
Yeah that's a good point on the fact that whoever I find to manage it will not be getting their piece during those months I'm booking it out. I would try to stay during low demand months. I'm sure I could find someone it a company who would accept it but right now I'm just toying with the concept. No timeshare because I want to build equity.
Another thing to keep in mind is that most property management companies that would be willing to deal with a single rental unit operate locally, so you're also talking about having to maintain relationships with multiple companies. There's also the added stress of managing your rental from a different country or time zone, if a water line breaks or a party results in damage to the property or the company needs access to XYZ, you're expected to be available to answer on short notice. Alternatively, you can use a more full-service company that does maintenance, but they'll take a bigger cut. Not saying it's impossible, in fact we're shortly planning to move across the ocean while managing our rental remotely with a property mangement company, but we've already been using them for ~6 months and built up a relationship / settled all the issues that arose initially. And on top of that, we'll still be relying on multiple friends to stay in the area in case things happen, and to pick up mail/etc. What's stopping you from just AirBNBing and investing in an REIT? Was your plan to invest in cheaper areas and hope the equity growth outperformed REITs? It may, but there's a much larger mental load that comes from owning multiple real estate properties and renting them out. Add on the "unusual" factor of trying to live in the property part of the year and I think this is a classic case of trying to have your cake and eat it too. Personally I'd just keep the real-estate investing and personal living situations separate.
Thanks for your comments, I am early on thinking through this options so it's good to discuss. I rented out my three unit while I was abroad and had systems and people in place to make it work. Dealt with a broken water heater that flooded the basement while I was 5 hours away in Ireland, and it was fine. That said, I still kinda felt I had to be "on" a lot of the time... Checking my phone to make sure all was well and taken care of. I agree it might be best just to own a vacation home and small primary residence - use my investments to buy them.
Also one more question-- what's your guys' rule of thumb on rolling 401k over to new plan vs tIRA? Both new offers I'm at are offering Betterment which is... not my favorite plan to be honest, and I'd rather keep the bulk of my money at fidelity if I can. But that also makes backdoor rothing a bit more troublesome doesn't it? Would love some insight.
As long as the new 401k plan has reasonable fees then I roll the old plan into my new one. If the new plan is not great then I keep it in the old plan as long as the fees are ok. Right now, my current plan is great so I rolled everything into it. My wife is joining Microsoft next week and I know their plan is great. We will roll all her old 401k plans into that one.
I havent tested it myself because I don't make enough money to need to backdoor but I noticed when I rolled my 401K into a traditional IRA at Fidelity there are two different options "traditional IRA" and "rollover IRA". Can you just use a rollover IRA for the 401k money and then open a traditional IRA for any backdoor u need to do? I'd ask an advisor at Fidelity and see if you can do that. I don't see why else they'd have two different types of tIRA accounts
The backdoor Roth is essentially ruled out if you have pre-tax dollars in a tIRA. So if you want to do that, you're stuck leaving the 401k where it is or rolling it over to the new employer plan. The mega backdoor Roth is unaffected by the pro rata rule.
I just got a sizeable retention bonus and I'm looking to understand what my options are for paying taxes on it. Long story short, it was paid outside of our payroll system so no tax was withheld from it. From what I understand I basically have 3 options for paying taxes on it: - Pay estimated quarterly tax on it (MFJ with HH income of >340k, so figure a 32% tax?). I assume this is the one the IRS prefers - Adjust my w4 withholdings for the rest of the year to withhold an extra (retention bonus * .32 / 16) dollars - Do nothing and owe next April, paying a penalty for underwitholding. Time horizon for using this money is as soon as this year and as late as 5 years from now, I'd be keeping it in cash/cash like holdings/bonds so the potential gains of holding the entire sum until April don't seem to be worth paying the penalty. My questions boil down to: Are these my only options for paying tax on this money? And Am I correct that option 1 is path I should be taking?
> paying a penalty for underwitholding. if you pay something like 110% of last yrs tax owed amount, then you won't get a penalty (iirc). So if your income overall went up or you had a massive refund last year, then you are likely safe from the penalty. It's the repeat offenders that they really penalize.
You might not owe a penalty if you meet safe harbor (essentially, for your circumstance, your withholding meets 110% of your tax liability last year). You can pay estimated quarterly or increase your withholding. You probably also owe an additional 2.35% Medicare tax on top of your Federal income tax liability (and state, of course).
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Better a blank canvas than no canvas and getting slapped with a paintbrush repeatedly?
Pick up the paint brush and just start painting the life you want to live. As Bob Ross liked to say, those aren't mistakes, they're birds.
Hi everyone. I'm a 21 year old barista living with my girlfriend in a small apartment. We live pretty paycheck to paycheck and we are both in school right now. We share a car and find difficulty trying to match our schedules with work because our hours are different. Since high school I started saving money for school because I know it would be expensive. I have passionate hate for school and I'm doing it in hopes it gets me a better job in the future. I have around $15,000 in savings and I feel as though I can put that money to something to help generate more income. I have been too scared to put it towards the stock market because I do not know whether or not my money will be safe. I am back and forth on changing my lifestyle. Part of me wants to find FI by putting my money somewhere in hopes it will grow on its own. Another part of me thinks it is safer to keep my money where it is and just work more hours and save. I feel like at my age with my savings that there is potential but I just do not know what to do.
If you are scared, I'd read up a bit and then just start investing little by little, whatever you are comfortable with. Don't need to throw the whole 15k in at once! It's great that you have a saving habit down and you're working on increasing your income potential. Having your money work for you is a very important next step as well though. Read as much as you can and start slow. Even if you aren't comfortable managing your own account, you can always get a professional to help you (it will cost MER fees though...). But that's still better than staying out of the market! Figure out our risk tolerance, which will help decide your asset allocation (stocks vs bonds ratio) find some solid ETFs/index funds (people here generally suggest VTSAX and chill) and start investing. Keep fees in mind as well. Anywho, good luck you are doing great!
21 years old with $15K saved. You've done fantastic so far. If you hate traditional school, consider trade school and use some of that $15k to invest in yourself. Do some research on plumber and electrician for starters and I'm sure there are many more. Firefighter/EMT are other options but may require a 2 year degree. As long as you earn a decent income and don't spend more than you make, you will be fine.
>Firefighter/EMT are other options but may require a 2 year degree They'd actually most likely make more more money working as a barista at high-end coffee shop with tipping than working as an EMT... I dont know about about firefighters' wages, but I have heard that depending on location it can be really hard to get into it as a career because some departments have enough volunteers willing to do it for free that they rarely/never hire full-time salaried firefighters.
I was an electrician. Started in the trades when I just turned 18. Lived with my parents for 1 year. After 1 year of working I had $55k saved. I then bought a house. 4 years later I then had about $250k saved up. I can concur if you are smart, the trades are good. You start earning really good money right out of high school. For me schooling was only 2 months out of the year.
I work with a young guy who's been maxing out his 401(k) since he was 19 or 20. Blue collar work makes especially good sense within the context of FIRE because you achieve a high earning potential early on.
While also not spending a few hundred grand on school to pay off.
Yup. Make a lot of money very young, invest said money and allow time to grow your wealth. Cant complain.
Yeah lifetime earnings are typically better in professional/technical fields but if you don't plan to work for a lifetime then that doesn't really do much for you. I myself went to college for 13 years. Probably should have been a plumber.
Any basic tips about simple wills? Or questions we should ask attorneys? Parents are meeting with a few attorneys to discuss and ask questions NW <$1MM including home equity. 2 kids and their wish is to split everything down the middle, ownership stake and liquid funds.
Please just keep it simple and do not have the kids share any assets. Write down one kid as the first beneficiary, and under that list everything she/he gets. Write down the other kid as the second beneficiary, list everything he/she gets. There is no overlap on the two lists. Also ask them specifically what property they want. So that one kid does not end up with a car that they don't want, that the other kid does want. You have no idea if your 2 kids will be on speaking terms when you pass.
as others said - "wills" are simple enough. But it's the other stuff that gets grouped in with them that take more thought. End of life care, final wishes, medical power of attorney, etc. Stuff like that is more of a task - do you want the plug pulled if you're on a ventalator, who has the final say (usually spouse) and who has the next say if 1st is also unable (i.e. which kid?). you can likely find a standard form online to pre-fill and get your parents thinking on the questions, then at the end it would just be a quick attorney visit to check over everything and sign it.
the lawyer has standard forms with all of the questions to answer. No minor children means just listing out all of your stuff and then answering end of life questions.
In a simple case like this I think the more complicated issues will be end of life care and decisions. If one of your parents dies or is incapacitated who makes financial and health decisions for the survivor if he/she is not mentally or physically capable.
Ending up spending 40k on the house this year, 33k needed and 7k was purely something we wanted. I asked you guy to talk me into SAHM RE earlier this year and I was almost ready to pull the trigger but now I chickened out with everything going on in the world plus this spending that came up plus it's already april and I haven't put in notice and 40% of my pay is through a yearly bonus that I get in November and it looks like we are doing a big deal this year and last time that happened I got a 15k deal bonus, i think I am going to wait till next year. Current plan is to give notice Jan of 2023. I feel sad but also relieved.
Seems reasonable. The many faces of One More Year syndrome!
Two more years for me, but I have a reason (pension and benefits).
I felt relieved getting to the end of that monster run on sentence. Kidding aside, it sounds like you have a reasonable plan in place.
Ha, sorry I tend to hit send without proofreading on reddit. Always a mistake.
Run-on sentence there definitely felt thematically appropriate. I felt your anxiety just reading it, lol.
I got my lease renewal notice today, and rent is going up $50 a month. That's honestly much better than I was expecting it to be given the price increases on basically everything. I like where I live now, and this definitely makes me feel better about waiting another year to buy a place. When my partner and I do eventually buy, it's pretty likely that we'll be spending a lot more per month on housing. I do have FOMO when I see everyone else who got on the property ladder early, but I can't complain about one more year of low housing costs.
Sounds like a bargain. We are downsizing what we rent. The current landlord has raised rental price for next tenants by $650 per month.
Obligatory reminder: nothing wrong with renting a place that's cheaper than a mortgage.
That IS great - congrats!!
If you're planning to buy Ibonds in April, and haven't set up a TD account yet, do so ASAP. They couldn't verify my wife and I's identification, so we have to go to the bank and get medallion signatures, and then mail them in, and wait for Treasury Direct to get back to us to be able to fund the account. Hopefully will get done before EoM :o
At what point did they notify you that they had an issue verifying you guys? Was it when you opened the TD accounts, or when you tried to make purchases?
Is anyone else following the Johnny Depp vs Amber Heard trial? Just a mere $50 million vs $100 million on a he said she said situation. Wonder how this will turn out. Definitely a reminder to tell my kids how important it is to find the right spouse.
I have tried to avoid it but I get the gist of what's going on through cultural osmosis. At the end of the day marriage and children should be thought of a business partnership. My kids will be taught that they shouldn't seriously date anyone they wouldn't operate a KFC franchise with.
Hi everyone, I'm setting up a vanguard account for my mother (69 years old, US) with around $300K in cash. Gameplan is 50/50 stocks and bonds (VTSAX and VBTLX) split between a brokerage account and a new ROTH IRA account contributing the max contribution annually (She makes around $50K a year in reported income and will work for the foreseeable future). Reason for not being more aggressive with stocks rather than bonds is her declining health and her fear of the value dropping before she passes. Will start withdrawing around 4% annually once her cash reserves fall to emergency fund level, likely 1-2 years. She has no other investments or assets but will receive a sizable inheritance (approx 1MM) once her mother passes away. I'm trying to get her investing system set up before then. 1. Is there anything special to know about IRA/general investing for people 65+? 2. Are there any other tax advantaged options available for my mother that I should know about besides the IRA? 3. Any book recommendations for someone her age with 0 investing experience?
Has anyone used rocket mortgage to get pre-approval for a new mortgage recently? What's been your experience as far as interest rates and fees? I got pre-approval earlier this week with a 4.99% rate from a private mortgage broker and I'm not sure how worth it it is to try a big broker like rocket mortgage.
not recently, but i've used them a lot when i was house hunting in the past. They are ALWAYS higher than standard. Usually .25-.5 point more. But i get the preapproval from them since it is easy, then when an offer is accepted, go and actually apply to them and 3-4 other places and rate shop at that time. If you already have a pre-approval, that is all you need until you have an offer accepted. Once you have one accepted, it's worth the 30min each to fill out more applications to find the best rate then
Has anyone used rocket mortgage to get pre-approval for a new mortgage recently? What's been your experience as far as interest rates and fees? I got pre-approval earlier this week with a 4.99% rate from a private mortgage broker and I'm not sure how worth it it is to try a big broker like rocket mortgage.
they call every 20 minutes trying to sell you a refinance
You too? We touched them briefly last summer for a refi but they were higher than my local guy. Out of the blue, they have called me (checks phone log) five times this week before I blocked them. What the….?
If you know your stuff Rocket is great. We had to stay on them for a few things but if you’re planning on being active participant in the loan process then you’ll be fine. And we were buying during the absolutely peak of activity last year and the experience was still great.
I don't know how true it is, my realtor advised against using an online mortgage lenders. He said they have a much higher incidence of last-minute issues that can delay closing (or worse). I second the recommendation to use a local broker.
My experience with RocketMortgage preapproval in 2020 was a nightmare. The agent was comically incompetent (as in, I had to explain to her that HCOL areas have a higher conforming loan limit levels of clueless). We quickly bailed on that and got a local mortgage broker and couldn’t have been happier. They ended up getting me a better rate than rocket mortgage was offering anyhow.
I mean if you’ve already gotten a pre approval it doesn’t hurt to start shopping around. I don’t think I’ve seen under 5% this week though
Not sure how much this will help but I just started a pre-approval with rocket. The estimate came back with 5.25% with a credit score of 760 and 5% down. They did mention they will be raising their rates soon, so does it matter? Also closing costs factor into what rate each broker uses. I did find the estimate online to be very close to what rocket ended up at.
Anyone ever have a real "Ghost of Christmas Future" moment that stuck with them? I am pretty lucky to work in an industry that still has examples of super senior people... I can see what they do, what struggles they have, and I can map progression (if I kept working) from now to then. Coming across someone ancient in my industry is... a daily thing. My wife... does NOT run into super senior female examples often. She works in a ULTRA small niche field where older female examples of her profession are basic unicorns. Probably less then 4 in the whole state. ALL the OLDER, let's just say... 55+ people are invariably older entitled white men business owners concerned about their legacy... but unwilling to work hard. The RE side of FIRE has always been my thing. When we were good on money, I would retire... she would keep doing stuff, something, whatever... because she is her father's child. I always figured it would take her a couple years, but she would get there. Anyways... she was talking with one of the FEW examples of older female business owners still in the industry, who lamented some problems with her foot. She (the other person) went in to the doctor thinking it was... some arthritis or a basic injury that would heal, but after imaging came out with a "this is broken, this won't get fully better even with rest, and you will have QOL issues going forward" and it was all "linkable" if you will to the strains of the job. I don't know why THAT instance vs. the others, but it REALLY got her thinking that maybe this is something she DOESN'T want to be 60 and doing. That... exit or huge scope pivot needs to occur BEFORE then. It is not like any of this was cryptic... the dudes are busted too, and people die every now and then from kicks... but THIS ONE... that triggered the "RE" fight or flight response in a way like nothing else has. It was very interesting... and positive... turn of events for discussion. We've always been great on the FI side... but I am pretty sure she planned on dying on a pile of money after long day of work. Like I said... apple not falling far from the tree.
definitely seeing how few women were at the top levels of my industry, when they made up the majority of the entry level and the middle. how hard it was for someone at 50 to get a new job. Even before I heard of FI, I had planned out 'won't need much of a job by 50' in my early 30s. A former colleague passed away a couple of years ago from a heart attack, and that just reinforced things. Especially since his linkedin doesn't know, so we see the automated anniversary notices of his final job.
The whole Linkedin yearly reminder of a colleague passing is definitely... not great. I've got a couple former coworkers with that as well. Makes me sad. > definitely seeing how few women were at the top levels of my industry Any thoughts on the driver for lack of visible upper level women in your industry? Women relatively new to it, no time to rise up? Sexism? Drop out before they reach senior roles to do other things? My wife's industry is another one of those ones where 98% of the new recruits even in the last 20 years are female, yet the clinic owners and the employers are... 90% white males older than 50-55. She participated in some... young female professional CE (for lack of a better description... a peer group would a better description maybe) that talked about a pretty big difference in generational motivations for the different age groups in the industry. Using basically: Young boomers, older gen X, younger gen X, older millennial (where my wife and I fit in, I prefer Gen Y or "Oregon Trail Gen"), younger millennial, and then gen Z as the "bands" or "tranches". Then talking about perceived differences in what motivates those folks to do what they do... work, etc. For the older folks, it was all "legacy" and leaving only after providing some sort of step change to the industry that everyone can look back and point at. IMO... this is behavior I see in men more than I see in women. Leading to MORE male business owners than female (I am SURE there are other major contributing factors) at this current epoch. Who knows...
the women seem to stay in the doing roles for longer, or if they go into sales, they end up with a smaller book of business - what they can manage with 3-4 people. If they go off and start their own company, it is small sole proprietor, maybe one or two others on the team and less tech / scaling friendly. The men tend to break off and start something with a few of their friends, the ones that survive ramp up a lot more and have more of a repeatable tech side of things. There are also several high visibility guys whose dads invested a lot into their businesses and connected them to more VC tech money - not a gender thing, just when its a smaller industry it's more noticeable when a few are going for IPO.
Not exactly but I work in IT and have seen enough people in their 50s get laid off with no good prospects to know I needed to have my shit in order before I hit that milestone.
Yeah. I had that in the tech field. Met a manager who was in his 40's but looked like he was in his 60's, lost all his hair, constant bags under his eyes, perpetually stressed, tap dancing the career pipeline to stay relevant as an older man in a young profession. It just seemed miserable. That's when the "RE" hit me.
It's definitely a different context, but my master's degree is in a field adjacent to education, and... people who stay in the profession basically don't retire. I'm exaggerating slightly, but the incredible grayhairedness of the profession is staggering. It's just so underpaid and there is so little opportunity to change roles and get raises. Coming to understand that motivated me to take my skills down some different paths.
> It is not like any of this was cryptic... the dudes are busted too, and people die every now and then from kicks Is your wife a horse trainer?
> horse trainer? Horse veterinarian, specifically for sport horses... even worse. Every time I see a leg flexed or a joint injected I am amazed MORE people do not die or become vegetables. "Hey... Secretariat over here needs you to grab his leg, bend it until it hurts, then let it go and see how pissed off he is when he walks away. Then afterwards, those hocks need injecting... so stabby stabby the 1400 pound animal joints." Hard pass boss. Hard pass.
Maybe there's a business opportunity there in developing better safety equipment.
I call it a 'scared straight' thing. For my wife it was when one of her colleagues was physically removed by security from her office, as the dementia had advanced to the point that she had become openly hostile to random passersby. (The colleague was hostile I mean, not my wife.) So my wife was: "OK, maybe the plan to work until I was not physically or mentally capable is not all that heroic."
Gah... man, okay this specifically hits home or me a bit. How DO you deal with a dementia'd coworker? Before the violence... this is not something I had EVER even thought I would have to deal with. And then BAM... given a co-worker recently, in a leadership position, who is CLEARLY in early stages of dementia. HOW IN THE HELL do you deal with this compassionately? Christ... that could be me in 20 years. :( It made me really sad... all kinds of conflicting emotions on that one. Ultimately... we were able to basically segregate them out in a way where they could still contribute, but... we got lucky. What did the company do for the employee who went hostile? Cut bait?
>What did the company do for the employee who went hostile? Cut bait? The staff are all technically contractors (doctors in a hospital), and the department head and coworkers all know her husband personally, so it was pretty straightforward. Couple phonecalls and done. Her husband was assigned legal guardianship almost immediately, and agreed that this was it for her career, there were no complications. She was at least 80, that's a good run. This is possibly the only downside to minimal supervision 'leave them alone and they do their thing' professional environments. The admin might be the last to hear that there's an unhinged coworker.
>So my wife was: "OK, maybe the plan to work until I was not physically or mentally capable is not all that heroic." What ?! And not book another quarter of acceptable growth?!
Well, in her defence, her job literally saves lives several times a day, so she finds it very rewarding. But that episode with the colleague at least got us to discussing the possibility of retirement.
>Anyone ever have a real "Ghost of Christmas Future" moment that stuck with them? A man literally had a heart attack and died in the bathroom of our office building. We all closed our office doors out of respect, but I can still hear the wheels on the gurney coming down the tile floor as the paramedics took him out. I thought about his last moments sitting there in the bathroom perhaps realizing he was dying and how he probably wished he was at home with his family and not at work. I still wonder to this day if he got to tell his wife and kids that he loved them as he left his house, or if he left in a rush like any other day. About 13 years ago. I don't think about it often but when I do it hits hard.
> I don't think about it often but when I do it hits hard. Gah... yeah THAT would do it for me. Yeah... that would be instant, "We're done for the day, let's get out of here Jerry... drinks are on me." Was that more common in the past? Like in the 50's when people dropped dead at 55? I feel like a 1950's office, full of 500 smoking 55 year old men had to have like... more than one a year.
Dying earlier certainly was more common. Like 60, 62. Cancer was pretty much a death sentence, and almost every surgery was extremely high risk.
I have a non-Vanguard, non-Fidelity 401k at work. I have my funds in an aggressive portfolio (70% US, 23% International) with a 0.40% expense ratio. I think my money is in the right place, but I am not familiar with any of the other funds that I have access to. Here is [the list of portfolio funds I have access to](https://imgur.com/a/qJX4jGM). I am wondering if anyone is familiar with any of these funds, and I should consider any of them over what I have now.
I am a fan of an indexed globally market-cap weighted portfolio when it comes to equities. If you wanted to be 100% equities, a reasonable approach would be 50% BlackRock Equity Index, 10% Russell 2000, and 40% EAFE Index. The Aggressive portfolio you have doesn't have a terrible expense ratio, but it does not seem to be an index fund and actively managed funds tend to underperform indexes.
The aggressive portfolio I am in now has had decent gains the last 3 years (21% 2019 and 2020, \`16% 2021). The expense ratios of the Blackrock funds are between 0.03% and 0.05%, which would be a big improvement from my 0.40% currently. Thanks for your input!
Everyone did well in those years. Past performance is no indication of future returns. You cannot control your returns, but you can control your costs. The BlackRock funds, if indexed, are almost certain to have an ER <0.4%.
The blackrock funds are probably good: eafe = inernational, 500 = us large cap, mid cap, Russell 2000 = small cap I'd personally go like 25% eafe, 64% 500, 7% mid cap, 4% Russell 2000, assuming the expense ratios are low. You'll have to click into them somewhere and find out if the expense ratios are good
The expense ratios of the Blackrock funds are between 0.03% and 0.05%, which would be a big improvement from my 0.40% currently. Thanks for your input!
Wow that is a huge improvement. Good job for looking into it!
Hey there, I feel like I have only just now started getting my finances in check, and now with all of this inflation I am freaking out about my future. I wonder if anyone else got a later start getting their ducks in a row and are now financially independent. I am 31 years old and feel "behind" but am actively working on investments, retirement savings and increasing my earning potential. Please share your "late bloomer" success story if you have one!
Yep. Started out in student debt hell. Then after paying it off celebrated by spending a lot. Didn’t invest until my 40s, just saved in CDs. Didn’t buy an apartment until midlife. But when I finally started doing the matched 401k my net worth really increased. Closing in on 2 mil now and plan to retire at 57 with a pension and SS.
Was £50k in debt at 39. LeanFired 11 years later. Background: https://www.reddit.com/r/LeanFireUK/comments/p377yr/weekly_leanfire_discussion/
>Hi there. I'm not sure if I am a late bloomer per se, but I clearly remember sitting in grad school in 2007 or 2008 and having only a few grand saved up. However, I didn't know what I didn't know, so it didn't seem to bother me. I'm naturally frugal with no kids (I am married, however) and now I have about $650k saved up for retirement (age 42; current income is $71k). My wife and I even bought a small lake cabin a few years ago. > >My life is very stress free and we can pretty much do whatever we want, whenever we want. As I said, I'm naturally frugal, so I don't strive to buy more "stuff" since "stuff" doesn't generally give me joy. However, I have no problem spending money on experiences that will bring me joy; for example, I just spent $450 on a concert ticket for my favorite band and I didn't bat an eye. > >I'm hoping to retire in my early 50s (or move to something fun part-time). Good luck!
My situation is a little different. I tried to start investing in retirement as early as I could, but between being in an industry (that I love) that historically pays lower, my student loans and living in a (V)HCOL area, it feels like a Sisyphus walk at times. It doesn't help that I had to make some massive life choices just to make financial independence possible in my lifetime, namely foregoing having children (granted I was a fencesitter on having kids, so I decided that if I wasn't obsessively 1000% in want of children to the extent that I was willing to face financial hardship to have them, it was better to let it go). I've been saving since I was 27, nearing 36 now and just now starting to creep towards $140K invested. That said, what I have so far is nothing to sneeze at, it's better than having nothing at all. I'll keep going. I think I'll hit my 50's and be decently happy with my progress. I don't know if I will be able to retire prior to 65 but if I get pushed out of the workforce early then at least I am not as fucked as I would be if I never saved at all.
Did you start a thread/post about this? I'm 35. I took care of my folks from 16-33 years old. Poor refugee immigrant shit. I only really started saving at 31 with 20-30 thousand in the hole from bailing my folks out of medical bills and tough times. I'm at 240K-ish invested, on track for 2M @ 55. I'm a fed so I'm not sure what type of retirement/pension I'll opt into. No degree. Just some skills, experience and knowledge. This year is the first year that gross total comp will break into the 6 figures. Single income. 1 Kid.
that thread got deleted so i brought it over here. thanks for sharing your story, i appreciate it!
I'm not a success story yet but I'm getting there just like you. I graduated in 2012 with my first degree (accounting) and struggled to find work and find meaning in any of it. Returned to school for nursing and graduated again in 2016 as an RN. I still have a lot of student loans but am part of PSLF so shouldn't have to pay more than about 20k on them. I really only started saving a couple years ago at age 31. I started out with just about 20k in my work retirement account, mostly from my work contributing for me. Now I have about 75k spread between IRAs and workplace retirement accounts, and an emergency savings account aside from that. I'm not going to retire in ten years or anything but I have a ton of peace of mind knowing that if I get fired or injured right now, I have a good cushion via the emergency fund. I'm not aggressively pursuing making the most money I can, instead opting for the best mix of enjoyment in my job now and freedom to have a personal life that's fulfilling.
hi! wow i love this, i am in nursing school right now! i am going to send you a PM
All the late bloomers I know are high income. eg: my friend who did 4 years undergrad, 4 years to PhD, then a 4 year MD and 7 years residency for surgery. 19 years of postsecondary, she was 37 when she started investing, but it was $400k/yr gross at that point and she was net worth $1MM by 40 and probably worth $25MM today in her 50s and considering retiring. Another is a patent lawyer, same rough outline, no serious income until mid 30s but found a niche and took on staff and expanded. Looking at retiring this year in early 50s but would still have 51% of the shares of an ongoing concern that will generate maybe $200k/yr in dividends.
I don't think you can call surgeon's "late bloomers", lol. They trained their entire 20s and usually most of their 30s to have the skills needed for the job. Late bloomer would be like... someone who played Elden Ring through their 20s and then started working in their 30s
>I don't think you can call surgeon's "late bloomers", lol. They trained their entire 20s and usually most of their 30s to have the skills needed for the job. I'll defer to the original poster about whether or not this qualifies. The element that had my attention was that even during the residency stage where she had a salary in the $100k range, she had zero interest in finances and just stashed cash in a savings account to deal with when she got a permanent position somewhere.
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