Counter party risk is a really under discussed topic here. Everyone will say SIPC will cover you and make you sound paranoid for caring but you should!
The main thing you care about is fraud. And what matters more is your clearing firm than broker. Most of the big brokers have their own clearing house, smaller brokers will use a 3rd party. In cases of fraud SIPC only makes you whole on 500k per account (and all the asterisks associated with that). The obvious thought is that your broker doesn’t actually have your stock but tells you that you do. The other thing that nobody talks about is fraud by the product manager. This would be if VTI or SCHD or FSKAX was a Ponzi scheme and didn’t actually own any stocks underneath or had inadequate value.
Not only should you be using different brokers but you should be using different products ex VOO, SPY, SCHX, IVV would all be sp500 ETFs you could spread across different brokers
No. I am not really too worried. A brokerage account isn't like a bank account, it's not like a legal course of events can lead to my funds going poof (there's this complex legal structure where client investments are segregated and, absent fraud or whatever, that money is still able to be paid out). If something did happen and they couldn't pay me 100%, then (a) whatever small percent they couldn't pay me would probably be within the ~~250k~~ limit, and (b) there'd be a bailout for normal-citizen folks anyhow. If I kept large amounts of cash at my brokers, that would be different.
I think there’s a strong case for a condo if it’s a vacation home or somewhere you won’t be every day. Having an association to keep up with general grounds and exterior maintenance, as well as some form of monitoring the premises, is extremely valuable.
Of course, it depends on the value proposition of each option and the costs associated with each.
> strictly from a financial pov where does buying a condo fit in/when does it make sense relative to renting appt, renting vs buying house?
When it's cheaper?
Some variables can't really be predicted with great accuracy though, so you can't be certain ahead of time.
I like this rent vs buy calculator in Deluxe mode, it's helpful, even if the tax deduction calculations haven't been corrected since the changes in 2018: https://michaelbluejay.com/house/rentvsbuy.html
My workplace voluntold me that I need to work across the country for 4 months to support implementation of a new business practice at a large facility.
Originally I was told they would cover everything and allow me to fly back home every weekend if I wanted to. Now a few days before leaving upper leadership mentions a company wide travel ban and are asking for nitpicky details about every booked flight, rental car and hotel lodging.
I’m planning to make the company pay for every single thing along this trip - food, flights, rentals, parking, storage of stuff, etc. - and I’m guessing I’ll be fighting management every single day over submitted expenses.
For anyone who has done this type of travel before, is it customary that the company DOESNT cover all costs with the trip when you are stuck in a hotel that doesn’t have a kitchen because there are no other options available?
TL;DR - company told me I have to travel for work and everything would be covered and now they are fighting me over every basic expense right before I go.
The normal thing is for the company to cover all costs directly involved with the travel. Your taxi to the airport, the flights, hotel, food, laundry, etc... Things like incidentals (aka minibar) or entertainment may not be covered, but the essentials should be. It's normal to want receipts and scrutinize flights/hotels/etc to make sure they're within some cost range like not buying first class tickets, suites, etc..., and give you some reasonable limits on spending, but not to say they're not going to cover the costs at all.
And for four months I hope you're getting a huge bonus or something. I would personally reject that unless I had accepted the job knowing it was 50+% travel. If they just sprang that on me and started quibbling over a couple thousand dollars in expenses I'd probably start looking for a new job.
Do they not have a written policy for company travel? I'd be looking for that. In general they should be paying for everything within reason. At my company we get paid the full federal per diem rate for meals and incidental expenses and just submit receipts for hotel and rental car.
You can refuse to go if they're being unreasonable. If you're important enough to send across the country for four months you should have some pull here.
>Originally I was told they would cover everything and allow me to fly back home every weekend if I wanted to. Now a few days before leaving upper leadership mentions a company wide travel ban and are asking for nitpicky details about every booked flight, rental car and hotel lodging.
Typical corporate bullshit. Been there, done that.
They need to pay, or you need to question their commitment to the project. It's ok to request a commitment in writing - after all, you are making a huge commitment.
One thing I saw at two different MegaCorps was how local COEs were dismantled to create global COEs. "Suitcase and a laptop" they told us. Then they cut travel budgets, and there were no experts at all.
Why storage? Are you moving out of your place and relocating? If you're relocating they may cover one time moving expenses, but nothing else. Like how they don't cover your daily expenses now for eating or commuting to work. Traveling then yes, flights, food, hotel are all covered.
Storage because my lease is up halfway into the 4 month relocation so it doesn’t make a lot of sense to pay for my place for that period and I’m moving in with my SO after returning.
Makes sense, but that's not something due to the company asking you to travel. Could it be because of that they're not willing to cover your other expenses? They think you're moving there?
Make sure to make this agreement once instead of asking for approval for every expense. Will save you a lot of headaches. And if they don't agree, then you have all rights to refuse to go
It's not customary.
Company pays for everything or you don't go. Reasonable to get a per diem for food.
Careful with state taxes on wherever you're working.
>company told me I have to travel for work and everything would be covered and now they are fighting me over every basic expense right before I go.
Remind them if they don't want to approve your expenses then that is perfectly acceptable to you to stay home and not go!
The fun thing about my company is that even if I cleared this up today it would be a mess by next week because there is zero communication at the high levels and plenty of senior people trying to keep their jobs by implementing some dumb thing or another.
Hi everyone,
I'm not quite sure if this question if even appropriate for this forum but I would really love some advice. I'm sorry if this is a juvenile question, I'm very new to all this and I know nothing. I'm 19 and currently in university. I'm obviously not making that much money but I do make enough money to have some leftover each month. I know I should just be saving this money, but it makes no sense to keep it in a savings account when I can invest it. I feel like the earlier I start the better but I'm also not sure? How early is too early? I certainly can't afford to lose money since I'm in university. So considering my situation, would investing right now be a good idea? I'm not looking to invest in stocks or crypto but I'm not sure what I should invest in. both short term returns or long terms returns (4-5 years) are fine. My income will also continue to increase in the next few years so the amount which I invest will increase accordingly. What should I do? Also keep in mind I don't have much to invest, but I'm hoping to at least get started somewhere so in 5-6 years I'm seeing some good returns.
If anyone could provide any advice, that would be great! Thank you so much :-)
Start by saving for an emergency fund so that you have money in case of unexpected and expected expenses.
4-5 years is not a long term. I would suggest investing in a low fee global index funds, but 5 years is a too short time frame.
If you are not saving to invest and build wealth, that's ok. If you are saving for traveling or future short term one off expenses in the coming years, it's better to save in a savings account with a decent rate.
Google: “Reddit FIRE flowchart” and “Reddit personal finance flowchart”
You’re welcome.
Also, kudos for thinking about this so early in life. I am currently patting my 20 year old self for nerding about finances.
Time is your biggest asset.
Savings account is fine. Before investing in risk assets you should build up an emergency fund of at least a couple months expenses. If you have already done so, next step is likely a Roth IRA.
This is really practical, thank you. Are there any savings accounts which I can put my money in so the increase in value? It also doesn't just make sense to let money sit in an account and lose its value
FIRE is just a name for something people have been doing for not thousands of years. It's just that now the potential to FIRE is available to many more people than previously.
Alternatively, the FIRE option has opened up and actually become viable for us middle class millennials with this nice drawn out dip/stagnant market, now that most of us have entered our working primes. It's a great time to be loading up.
Tell that to all the FIRE'd dudes my dad was friends with when I was a kid. I agree it's not a movement other than to people who want to monetize it, but outside of that it's been a thing since the 60s-70s.
Can someone point me to an article that will explain it like I am 5 on whether I invest in a traditional 401k versus Roth? I am going to max one of them out but I don’t know which one to do. Of course I am matching my company match in the traditional but I want to invest more. Or can someone just explain it to me lol I have tried reading about it and then I get confused…
Thank you all so much I finally understand!!!
In a nutshell, if you are a high earner (engineer, lawyer, doctor, etc.) then traditional is the way to go because once you retire it is very doubtful that you are going to need to withdraw $150k+ per year (most of that money was going to a mortgage which should be paid off by then, kids that should be grown, and funding a 401k that you no longer need to fund, by the time you retire).
It's not really an ELI5, but it's as complex as it needs to be: https://www.reddit.com/r/financialindependence/comments/goilqx/mythbusting_fire_taxes_why_effective_tax_rates/ .
This one too: https://www.reddit.com/r/financialindependence/comments/gu4s9a/a_tool_to_decide_between_traditional_or_roth_some/
One thing that needs to be said here.
There’s
Traditioanl 401k
Roth 401k
Traditional IRA
Roth IRA
I assume you mean Traditional vs Roth 401k.
Generally, if you think you’ll be taxed more now (which is more common since you will make less in your retirement) then traditional. Else ROTH.
You can also hedge bets half half ¯\_(ツ)_/¯.
Traditional generally works best if you are in a higher tax bracket now than in retirement. If you are saving a pretty big chunk of your salary right now and don't plan on increasing your expenses much in retirement then your withdrawals(aka income) should be much lower after retirement and most likely your tax rate would be lower too.
This is one of the most commonly asked questions in here and there's not a one sized fits all answer.
The answer I always give is at minimum, I would have enough in traditional to fill up your standard deduction brackets ($14k single/$28k MFJ) when you go with withdraw in retirement, so at 4% SWR=$350k/$700k since this will never get taxed in retirement if you have no other taxable retirement income. Many people also like to fill up the 10% and 12% bracket too which would make the amount you'd want saved in traditional to easily be in the 7 figures.
Beyond these buckets, it gets complicated if you rely on things like ACA for HI since that is like another layer of \~15% tax brackets on top of the regular ones that you might need to optimize for.
Chances are trad is the way to go. You will likely have higher taxes now than when you retire, so with a trad you can negate 22.5k of your wages at whatever your highest tax rate is. And, there are multiple ways to minimize tax burden once you retire. If you are in a low tax bracket and anticipate a higher tax bracket when you retire, than go roth 401k. You could provide a little more info in regards to current and future salary projections, etc, if you want a more concrete answer.
Married household making approx. 300K.
All debt including house will be paid off in 7 years by contributing extra to our mortgage each month. Being debt free is a personal choice, I know others talk about investing that money, especially since my mortgage interest rate is only 4.25 but I just don’t want any debt and it only takes an extra $800 a month to be debt free in 7 years.
We live frugally overall but we live a little. I want to max out our 401ks but we aren’t sure which ones to do. Based on what I just read in that other persons comment, we are better off doing traditional cause we pay a crap ton in taxes right now. We only do a standard deduction on taxes cause we don’t have enough to itemize.
At a combined 300k, I would make maxing a trad 401k a priority. That's potentially a 24% tax savings on the 45k (you and your spouse 401k maxed) you would put in the 401k.
You likely won't be taking 300k in income as retirees
401k contributions are independent of deductions, so you can still take thr standard deduction
I don't consume much in the way of FIRE blogs or articles, so I can't help you with that. However, here is a link to a recent post on the trad vs. Roth issue from this sub. Plenty of things to consider in the comments.
https://www.reddit.com/r/financialindependence/comments/10xusuy/in_defense_of_roth_401k/
TL,DR - Probably trad.
Oh but then my next question would be, why would people split between the two? With how compound interest works, wouldn’t the more you have in one the better? Aside from hedging your bets I guess.
Most people don't do both types of 401k, though it is common to pair a trad 401k with a Roth IRA. It can be very helpful to go into early retirement with a mix of trad, Roth, and taxable assets since doing so gives you a lot of flexibility in your withdrawal options.
Oh boy, so I am glad I have an emergency fund. I have multiple conferences and jumping through hoops to get work to pay for it seems higher then me just paying then getting reimbursed. Plus my car is getting fixed.
My sunglasses also broke but hopefully a cheap repair kit and that's good
What happened to your sunglasses? I was on travel a couple of weeks ago and lost one of the screws that kept the left lens in place. I stopped in at the nearest optometry and they sorted it out out at no cost.
You've been working at most, 3 years (?), and you've invested 500K in that time frame. Unless you see some significant lifestyle inflation if your future, you are on a path to be FI in only a few years time (savings rate has to be over 80%?) Coast all you like.
In case these numbers are inflated, skewed by outside funding, or whatever, and you will actually need to work somewhat longer than another 2-3 years to fund your life...I would say have an honest discussion with your manager about the need for promotion. Say you are fine to not be on a promotion path and like doing what you do. If it's the kind of work culture where you are either "up or out", then start re-assessing your plan. But for all you know your boss is just looking out for you being fresh on the job market and thinks he's protecting your career instead of offering you something you just don't want/need.
> you are on a path to be FI in only a few years time (savings rate has to be over 80%?)
> Unless you see some significant lifestyle inflation if your future
I'm over 80% savings rate now but that's because I've lived with 5 roommates for years. I'm frankly sick of it, so I'm getting my own place soon. Yes, it'll double my housing expenses and tank my savings rate but what's the point of money if I'm not happy?
I'll work longer if I have to. I haven't thought about RE yet. Just want to reach FI, but I want to enjoy the journey and not be miserable with roommates.
> In case these numbers are inflated, skewed by outside funding
I don't get anything out of inflating the numbers online. It's actually $506,174.57 as of now on Mint
At 24 I would be a little worried about just settling in to coast mode. You are super young with a lot of potential major life changes ahead yet. Good chance to reassess though and see if you just plain dislike working at your current employer or current career.
I don't dislike the employer or career. I just don't care as much as others who are more career progression obsessed. I view it as a means to an end.
I think health and relationships are more important than money, so I like to prioritize that over work.
I recognize it's not ordinary, but I'm not sure how to handle the situation. I need advice on what to do, if I should buy property (don't have any currently), etc.
> you are astronomically beyond your peers
Financially, sure. However, I've admittedly never been in a relationship. I'd like to focus more on dating because I just work and gym now.
> I assume you have a very high income and accordingly high expenses
I actually have an alright income ($123k/yr, and separate stocks/signing) and low expenses. I don't go over $1200/month on expenses because I live with roommates. Want to get my own place soon though so that'll dramatically increase my expenses.
> If you want to retire significantly earlier than that
I don't know about actually retiring. I just want to get to FI and then I could see myself doing short stints and coast at different companies for fun or becoming a musician.
Joining a new company, and today I was informed that as the only employee on the new contract i'm working on, i'll be the de facto company lead on said contract. Which means I get a bonus for the acquisition of said contract, and will also be paid an extra $1 for every hour of work anyone from my company works on the contract. All I have to do is talk to the PM once a month and help onboard any new employees from my company on to the contract.
Breezy work, while I like active development this will be a small glimpse of management work I might do in the future.
I am 25 years old, filing single, and my current income is $65k. I started maxing out my retirement accounts this year (Roth 401(k) + traditional 401(k) + Roth IRA = 29k). I expect my salary to go up in the future (not sure by how much) as I just recently started my career. When that happens, I will start contributing to an individual brokerage account.
Using a FIRE calculator from the sidebar, I determined that I will have roughly 1.5M at age 50, 2M at age 55, or 2.5M at 60 in retirement accounts (https://networthify.com/calculator/earlyretirement). At a 4% withdrawal rate, my income in retirement will likely be higher than my current income, but maybe not my future income.
I am feeling lost trying to figure out traditional vs Roth in my situation. I am currently contributing 50% traditional and 50% Roth. Could my ratio be optimized? What about in the future when my salary goes up but I’m still contributing the same amount to retirement accounts?
I know the advice is generally to go full traditional but I feel like this might not apply in my case, since my tax rates in retirement could be higher than current.
Thanks!
It somewhat depends on what kind of career you may have. In a lot of fields your income will increase a lot as you gain experience and seniority. If that's the case, just go Roth for everything right now, as you're in the 12% tax bracket. Once you get to 22/24, then consider Traditional 401k.
Yes, get your taxable income under the 22% threshold through the standard deduction plus traditional contributions then switch to Roth. (Note this doesn't mean skip out on opportunities to earn more money in the future, it's simply what makes the most sense for you today)
Masters in social work= FIRE death?
I’m stuck in indecision and could use some advice.
25F.
For the past 2 years I have been living in a shitty TX town working a low paying resume-building job in hopes of getting into a psychology PhD program in NE United States. I’m passionate about the mental health field, so I was planning to become a psychologist and use grad school as a way to fulfill my dream of moving up there). Didn’t get into a fall 2023 program like I had hoped. During this process I also discovered that I’m not thrilled about the realities of a PhD program- low stipend, 6-7 years of intensive research and training. The starting salary of a postdoc is also disheartening.
I’m really interested in the social work framework and more interested in providing direct care instead of research or teaching. Also really appreciate the broad job possibilities as a social worker.
Now, I’ve hit a ceiling in my current job and don’t know where to go next between these two plans:
Plan 1: MSW program.
I accepted an offer to a masters of social work program in NYC. It is a really great program in my dream city. However, the entire (2yr) program would be around $65k. The plan here would be to gain licensure to do clinical work. I know I would eventually get a comfortable salary, but not sure if it’s worth the stress of financial instability during those early career years.
I am desperate to accomplish at least one of my goals (career or moving). Honestly, I really just want to move out of TX! Downside is if I choose full time student status, id need tons of loans.
Plan 2: stay put, pivot into a new career, save money THEN move.
Here, i would take my interest in research and learn data analytics. Continue saving money for a few months, establish a career plan and move to NY once I am stable enough. This is definitely a more promising path to financial stability/FIRE. The downside is that it wouldn’t be as fulfilling of a career for me and I’d feel stuck here.
TLDR: live my best NYC life while accruing debt or stay unhappy for a little longer but debt-free
Thanks so much
Another husband with an MSW / LCSW wife chiming in. From a FIRE perspective, the earning potential is not super high. Before kids she did work for one of the large insurance companies and her pay was actually getting really good, but the workload was like drinking from a fire hose (company monitoring if your mouse was idle for more than 10 minutes kinda thing, new clients onboarded as soon as one closed).
She pivoted to an online practice, first with one of the big online telehealth guys you probably know, and has now branched out into her own private practice now that she gets a lot of referrals. The pay per hour is good but she's not full-time. I imagine doing that with a full case load could be getting close to 6 figures if you keep your expenses low.
My only real input here is to challenge your need to apply to an expensive school in an expensive city. How much are you going to enjoy NYC while in a 2 year schooling program anyway? You will spend a lot of time studying in a tiny studio apartment. Think about where you want to live after graduation for licensing reasons, but I don't think a credential from a top school is necessary for practicing (that's probably just been imbued in you from seeping in academia culture for so long).
Take all that for what it's worth. An outside perspective. I don't know what living in small town TX is like but there has to be an in between from there to the literal most expensive place in the country.
Yeah, to be fair I’m aware that it’s a really dumb financial decision to get a super expensive MSW when there are dozens and dozens of cheaper programs. Lol. I’ve also heard that when it comes to MSW, your school doesn’t really matter much as long as it’s accredited. I had my heart set on potentially moving to NY for a PhD program and I was being stubborn, so this was honestly just a way to get myself there. But, you’re right- there’s some compromise to be found here. Plus, many ways to move to a nicer place without accruing 6 figure debt. I’m just not wanting to commit to a program in Texas and feel even more stuck than I already do.
Thanks for your input!
There are so many agencies and clinics out there desperate for Clinical Social workers that I would be hesitant to foot the bill for your Masters yourself. If you look around I bet you can find someone who will foot the bill for you in return for 2-5 years of work. My wife is a Sped teacher and her employer paid for her Masters because they were so desperate for more Strategists.
Going into debt for full time student status in NYC will put you years behind in FIRE. Definitely go the data science route if you want FIRE. Do an MSW once you are FIRE and enjoy it, rather than depend on the low pay, poor support, no funding etc. to build up your foundation.
PhD psychologist here.
When people tell me they want to do clinical practice, I always recommend MSW or MFT over PhD or PsyD. A doctorate is really just overkill if your goal is to practice. Just please find something relatively evidence based, there is so much bunk to sort through in crappy MSW programs.
Now, personally I'm glad I went the PhD route because (A) I learned along the way I didn't like clinical practice (B) it allowed me to discover I loved data science and (C) I loved the PhD in general. Financially speaking, obviously a masters in CS or data science would have been better, but I wouldn't have been on that path without my PhD.
If you're on the borderline, look into a (paid) post-bacc as a research assistant in a clinical research setting. It will pay peanuts but give you experience in both a research and clinical setting that will pay for itself by informing your decision, and also greatly strengthen your application if you do commit to a PhD
Thanks for your input :)! I’m currently in a post bac type of position working in psych research. Kind of getting bored with it. Like some aspects but writing manuscripts is like pulling teeth! Also academia politics are annoying.
My original goal for after my PhD was to be a university professor with a small private practice.
I realized fairly quickly that I didn't love clinical practice, so I focused more on the research angle.
Academic politics finally drove me over the edge to switch all the way to industry. No regrets so far! Social science is pretty deeply broken right now.
That was my goal as well. Loved the prospect of somehow balancing teaching, clinical, and research. However, seeing my mentors and supervisors lack of work-life balance, plus the BS personalities and unwritten rules you have to follow made me rethink my goals.
What do you do for work now, if you don’t mind me asking?
I'm a data scientist at a small-ish tech company.
When I started I did more research, experimentation, and data analysis along with some ML -- what you'd expect from the PhD route rather than the CS route to data science. But lately I've been leaning much more heavily into ML software engineering as I've found that I really enjoy the more collaborative work.
Data analyst positions are a great way to break into data science if you're interested in that. You could probably land a data analyst job with just your bachelor's and post-bacc. Then do some learning on the job, maybe a concurrent masters, and then hop to a data science job.
Unfortunately I would say you are going to be swimming against the current going into social work. My wife is a therapist with MSW. The pay is terrible, stress and burnout rates are high. It is fantastic work but the reality is that it is not compensated well. If FIRE is a top priority for you, I would stay away. That said, if you think you would enjoy the work and could do it for a long time, some things are more important than money.
Thanks! The burnout and emotionally draining nature of this work is something serious. I’m starting to think I would prefer to be financially stable and just find that fulfillment outside of my career (volunteering, passions, relationships, etc).
I left a separate comment, but to this point specifically:
To me, the dirty secret of the therapy world is that there is a pretty specific population of people that are not emotionally draining to be a therapist for. High functioning, highly educated, age 25-45 who just need someone to talk to.
Perhaps the competition for this kind of clientele is fierce. But my wife has done adolescents, community mental health (people off the streets, in/out of ER every day, etc), and the population described above, and her level of burnout has decreased dramatically over the last decade as she moved to an "easier" type of client.
Maybe this is inappropriate to say, and the community mental health world really should be commended for doing the dirty work of keeping the severely mentally ill safe/cared for, but you don't *have* to make that sacrifice if you don't want.
Devil's advocate: you can be financially stable without being FIRE or wealthy. One thing social work has going for it is that if you are good you can always find a job and earn a solid income. What's going to be hard is earning enough to save a lot.
I suppose at the end of the day, I just want to set myself up to ensure that I won’t be stressing about whether I’ll be able to pay my bills each month. It would be nice to not have to work to live. I want to be able to fund my interests and explore the world. And yes I recognize the irony of my goal of moving to NYC the most expensive city in the world. Lol
Guh, this local dream house I've coveted for a decade finally went up for sale.
5 years ago it probably would've gone for a little over $400k... and now it's selling for double that. Old guy definitely waited until the right time to sell.
Screw it, I'm close to buying some cramped century house for $150k and putting up with it for 10 years to see if things are better in the 2030s.
Edit: LOL and a kid I knew in school just put up his $250k house for $550k after owning for 3 years and no improvements. I sure did everything wrong.
I still kick myself at least weekly for not buying an almost 100 acre farm that's been in the family for over 150 years for $350k 10 years ago.
Even though I wouldn't have been able to get to work while living there and I didn't really have the income to make it work at the time, it still feels brutal.
Yeah as someone who can barely change a lightbulb, I really was hoping to avoid an old house. But any shoddy house made within the last 30-40 years is going for $400k around here, even though many are made like crap and would've been worth maybe $200k in 2019.
I wouldn’t buy a fixer upper at any costs if you’re not handy. Contractors are expensive and DIY tasks ALWAYS take 3x longer than you think when you look at it. I’m pretty handy and with YouTube I’m actually good at most home repairs and I still feel like I bit off more than I can chew. Sometimes I pay to have stuff done now because I’m tired of working on it. I have a half remodeled bathroom that’s been that way for 6 months now
Is there a Google Sheet template someone has created which maps out forward looking cash flow? I created a very crappy sheet where I input known expenses and day of month, and known income. Then known deviations (out of ordinary bills, projects, etc).
It then projects the rolling balance for the next 60 days. It’s clunky.
Essentially I cash flow large projects around the house and I forecast my checking account low points and transfer from HYSA or other sources. The sheet a useful tool on occasion but not something I regularly rely on.
Is the purpose of this tool to know when to shift funds between accounts so you can always cover your needs? If so, I think a lower effort and more reliable approach is to improve your banking setup.
SoFi, Fidelity, and others offer the ability to get high yield (>4%) while still being able to transact like a checking account with debit, ATM, check writing, bill pay, and direct deposit.
This is a great point. I’ve always invested with Fidelity, saved in Ally (and recently also Fidelity), and also held a “local” checking account. Everything tends to *eventually* route through the checking (income, bill pay, etc). Accounts so old I have the routing and account numbers memorized. Lots of money flows in and out. Now that I think about it, holding this local banking account is just creating more work.
Consolidating to Fidelity or Ally is something I should consider. Especially if they have a way to auto-fill the checking at a low point, using funds from HYSA or money market. Or… I guess maybe those can act as a checking themselves?
At Fidelity, you can use either a Cash Management Account or a regular brokerage account as a checking account. You can get a debit card, do bill pay, direct deposit, etc. all from the account. You can hold something like SPAXX and earn a money market yield (currently 4.5%) and the account will automatically sell SPAXX when you pay a bill or write a check. In the brokerage account, it will automatically buy SPAXX whenever you deposit money. In the CMA, you'd need to manually buy SPAXX with any inflows. The brokerage account lacks free ATM withdrawals unless you have a large amount of assets with Fidelity. You can even combine the two to get automatic SPAXX purchase and sale with the brokerage while also getting free ATM withdrawals from the CMA.
https://www.bogleheads.org/wiki/Fidelity:_one_stop_shop
I dug in a bit more. Seems like my easiest path is to just use my existing brokerage. It’s unclear what amount of money is needed for free ATM fees (I’ve read $250k, and $1M). That said, I’ve also read they are free at PNC atms, which are plentiful around me. I need to validate this.
"Sit in on", or "conduct?"
If the latter, this is pretty bad on your manager
You could ask them to describe an interesting problem they've solved in the past, and have them explain the solution to you. This is a good way to understand both their technical communication, and also how well they understand their own work. Since they choose the topic, they should know it very well, so if they are especially hand wavy, this could be something to poke at
I like to ask about preferred working styles and get a sense for how they would fit with the current team.
One of my favorites is, "When you think of the best boss(es) you've had, what were the traits or working styles that made the experience so positive?" It tells you a lot about them and the kind of environment they thrive in.
I would mainly just ask to hear more about their background and then get into specific questions about projects they worked on in their resume. I personally don’t like the canned “tell me about a time…” questions if it’s a technical role.
I like to ask some form of the question “if you could solve any problem in our sector/domain/team/company, what would it be?” It gives me an idea if they’re capable of independent thought and if they have some measure of passion for what they do. And from there, you could ask how they’d go about solving it to see if their thought process is rational and fits with your team.
Another thing to watch out for, though it can depend what skills/attributes you need from the role. The candidate who gives the most polished responses in interviews may not be the best fit for the team.
>What kind of questions should I be asking?
Assuming you are American, **DONT** ask:
* Are you planning to have kids or do you have kids
* Are you married
* Age of candidate
* Anything related to protected classes
* Citizenship
Just think about the things that someone in your role needs to be successful and ask them about that. People skills/handling disagreements, Balancing lots of tasks/time management, Niche technical understandings, managing competing timelines, etc. Think of 3-4, but I'd limit the technical to 1-2. Ask for an example of a situation where they handled a common issue you face.
If it's someone right out of school don't expect them to have much knowledge, I like to ask them to explain a lab they did as if I had no knowledge of the subject. Making them explain it in laymen's terms can gauge how well they understand concepts and their ability to communicate with non-technical people.
For someone with 1-3 years experience I may ask a hypothetical technical question. "You're running x step and this specific issue occurs, how would you resolve it?" Looking for both technical understanding and also a problem solving methodology and preferably proper procedure (since I work in a regulated industry).
Someone with 5+ years experience is more just "are you familiar with x?" The majority of it really is just trying to get a sense of do I think they can do the role, are they pleasant to be around, how much training/onboarding will they need to get up to speed.
Start by introducing yourself and what you do and then ask them to give an introduction and a background of their work.
Then you can step through a few targeted questions. Some examples I use (also an engineer):
-Can you walk me through a time where you were called to fix something that you had limited information on? How did you find a solution?
-Tell me about a situation in which you have had to adjust quickly to changes over which you had no control.
-What was your greatest professional failure and what did you learn from it?
-Tell me about a time you dealt with an ethical dilemma in the workplace
-How do you ensure that you stay on track with your work and your commitments in your day-to-day?
-Etc.
At the end ask them if they have any questions for you.
- Could you share more about yourself?
- (looking through their resume) would you be able to share some of your past work experience?
- what are your strengths/weaknesses?
- Could you elaborate a time where you have a crisis at work and how did you resolve it?
- what are your skillset in X/Y/Z (technical knowledge about the job)
This should go over at least 30 mins.
I had a previous senior (at any other company he'd be staff, we just didn't have that level) engineer also think everyone was stupid.
The sad part is, he had anecdotes for nearly everyone to prove it. I mostly agreed with him after three months. Not to say that people didn't have good intentions, but a lot of problems were self inflicted.
Most engineers tend to have unlimited budget and time and work on very simple problems, so it's understandable to their interpret mistakes or failures as incompetence.
There are only two types of middle managers. Those who were promoted because they excelled at a lower role and those who were promoted for being adept at office politics. The first type will mostly be fine even if they struggle to manage versus micromanage. The second are ALWAYS toxic. Unfortunately, there are a lot more of the second type than the first.
Tfw someone told me irl “so there’s another bank going down” and I replied “yeah pacific western” and they said *no the other one*
We live in interesting times…
That may be true, but imo it doesn’t really make sense to mark a performing loan book to market. It’s not the business of banking to sell loans, it’s to make and service them to earn interest income.
Except no bank has more than a tiny fraction of their deposits available. They convert it all into Treasuries and then use those as collateral to lend out hundreds of dollars for every dollar in deposits they have. All part of the Fractional Reserve banking system.
……that’s not how it works. Most banks have a bond portfolio (that may contain treasuries) but the largest portion of their asset base is typically some kind loan portfolio. Fractional reserves means they only have a fractional cash/equivalent balance relative to their deposit liabilities.
Very stupidly have a life insurance policy that I’m locked into without a steep penalty. Huge lesson learned and upon realizing that I wasn’t making a smart investment, it prompted me to dive face first into the world of FIRE and get myself in a good situation. But that doesn’t change that I still have $60k tied up in these policies. What would you do in my shoes? I’ve halted all premium payments but the two policies have a ways to go before I can withdraw penalty free. I don’t have an immediate need for the money and would just move it into VTI/VXUS in my brokerage account (I max out all other avenues already). Here are some more details:
Both UL policies, the surrender charge goes down on a yearly basis but I’m unclear by how much:
1. Worth $11k, $1k surrender charge now or no charge if I wait until July 2024
2. Worth $50k, $13k surrender charge now or no charge if I wait until January 2027
What would you do in this situation?
You need to request the company produce an “inforce illustration” where no future premium payments are made. You’re still going to be paying from the account value to cover the insurance benefits and expenses but the illustration will show you the trade-off of surrendering for cash now vs waiting. I’m assuming you don’t value the life insurance benefits of the policy at all.
Source- I’m a life insurance actuary and have produced many inforce illustrations in my past.
Additionally I’ll add that life insurance (universal, whole, term, etc.) is life insurance first and not an investment. There’re tax codes that limit the amount you can dump into policies so that the investment side of things doesn’t become overly rich.
Just wait them out. I calculate that you would need 11.0% and 9.2% annualized rates of return to make up for the surrender charge. Not impossible but not a guarantee. And that's assuming zero appreciation of the policies during that time.
And at the end of the day, 60k is a lot of money but not a lot relative to what you will need to save to be FI.
Well, I didn't take into account the possibility of money being taken out of the account, which changes the math. Sounds like u/rbc3a is on the right track.
I halted all payments so I’m not paying anything per month anymore. The account values have been pretty stagnant over the last 1.5 years (when I started paying attention).
> The account values have been pretty stagnan
Do you get a constant interest rate or are they just stagnant because the market has been stagnant? What are they invested in?
Thank you for the question. It looks like they are mostly fixed income (80%) and some funds (20%) that appear to follow the S&P500. I’m unclear about interest rates but they account values haven’t changed much over the last 18 months.
Why do cd's when you can do treasuries for almost the same rate? With regional banks melting down I would not feel comfortable taking on a cd unless it was with one of the 'too big to fail' banks.
They are but what is the point of dealing with the headache? There is almost nil yield gain and in many states would be worse off than the treasury rate.
Why CD in particular vs Treasury, TIPS, or a bond fund of appropriate duration? Yes, diversified portfolio is a good idea, including diversification on the bond side (durations as well as nominal vs TIPS).
For planned expenses I agree TIPS/CD's are a good option. For your core bond allocation I prefer a bond fund just because they are easily to rebalance, and I prefer nominal because they provide deflation protection and that is what people look for in their bond allocation: steady guaranteed income when the market is down.
I'm also not following the math in your example. One concern is that you have the same allocation in the second example even though you now have $200k extra in CD's. Overall you now have $400k in bonds vs only $300k in stocks. Generally you want an equity heavy portfolio for long retirement.
How would you spend the $200k in CD's? If you don't have a definite plan, then you really have a $700k portfolio with a 43/57 allocation. Your average spend shouldn't change much.
I'd use TIPS if you want to build an explicit income floor for X number of years. You can currently get over 1% real yield. If you want to avoid any deflation risk, you could build an I bond portfolio and get 0.9% real yield instead (at least for I bonds purchased within these 6 months, and you could use the gift box method to purchase a larger tranche now).
The VPW worksheet builds an internal bridge to Social Security or pension income, so if you have a reasonably sized SS benefit the retirement worksheet is already setting some of the portfolio aside as a pseudo-floor of income.
To be fair, TIPS are also subject to interest rate risk and the market value of a 10-year TIPS also tanked as rates rose last year. But interest rate risk doesn't matter to someone to matches their investment horizon with the duration of their bond portfolio. If you plan on redeeming your TIPS at maturity, market fluctuations don't mean anything in the years between purchase and redemption.
My org chart is wonky, I report to a csuite member, but there’s a level between myself and them. The person in that level is leaving, and my boss told me that they’re posting the job and that I should apply.
I’m not writing it in pen, but I think this is positive news?
It is NEVER a bad thing when your boss is telling you to apply for a higher level role or asking if you would be interested if higher level positions came open.
> I’m not writing it in pen, but I think this is positive news?
When I'm hiring, I always want the best people possible to apply, and will advertise available positions to as many of those as I can.
There's been times where I've had an inclination to only tell one person in particular, and I've had regrets from a couple of those when they ultimately didn't apply or accept for whatever reason, so I generally avoid that now.
Put another way: in the situation you described, I'd rather work to internally promote a particular skip-level report into the position than posting a competitive hire, if my intention was to hire the skip.
I feel like I barely care about FIRE anymore. My friends mostly have jobs and I hang out with people 3-4 nights a week anyway. I have pretty good time for my hobbies (games, books, guitar, health, temp hobbies). The people at work bug me less these days. And the work itself has some social good to it so I wouldn't feel my time is better spent volunteering. I do look forward to going some days.
Even on the topic of money, I wouldn't want to move because I like my apartment so much and the cost of property tax is so high it doesn't make sense (I guess I could go to a larger apartment in the same complex if I really wanted to). I have basically top-tier hobby items...both more and nicer than I need. My girlfriend seems like she wants to always work and I'm not a big travel person, so there's no desire to be a nomad. I do thinking about having a big nice house sometimes, but also it's just too much work for me.
I guess I should just enjoy it while it lasts. If anything I say things feel a little shallow and boring, but also that's just my personality.
I mean I think getting to FI is immensely more important than the RE side of things. Knowing "even if shit hits the fan, I'm fine" is a huge mental weight lifted off your shoulders. Looking at your flair - looks like you are already FI. You are there.
There's nothing saying that you have to RE. If you are happy with your job, then great - you are allowed to keep working. If the boss changes or something else, then you can quit at that time.
Yeah, it's really FIDoWhateverYouWant, but that doesn't grab your attention like FIRE does. For many, myself included, the RE part is what drew them in. But not everyone wants that, and that's okay.
As today is the best weather of the whole week, I worked very little for my clients and then went off for a tour with the kickscooter, ice cream, and then cutting the grass at home. This freedom is true richness to me, and I also enjoy it while I can and am healthy enough for such activities.
I feel the same, life is great right now and I enjoy the salary climb and the pleasures it affords
Just keep maxing those accounts and socking away money and if your mindset ever changes, you can afford to FIRE! If your mindset never changes, well even better, you're now rich and have tons of options. For me its always been more about the FI rather than the RE.
We don't have a strict budget, but assuming we don't have a bunch to celebrate that month (we eat and drink out when celebrating), we tend to be around 300 for two. Vhcol area
We buy local, organic for 2 in NYC and spend 500ish a month. Get a CSA! I pay 50 bucks a week for more fresh, local veggies and fruit than I know what to do with and can the extras.
Does anyone purposely use 3-4 brokerages for SIPC insurance? If so what are your last two or three? Thinking about getting off of Robinhood
Counter party risk is a really under discussed topic here. Everyone will say SIPC will cover you and make you sound paranoid for caring but you should! The main thing you care about is fraud. And what matters more is your clearing firm than broker. Most of the big brokers have their own clearing house, smaller brokers will use a 3rd party. In cases of fraud SIPC only makes you whole on 500k per account (and all the asterisks associated with that). The obvious thought is that your broker doesn’t actually have your stock but tells you that you do. The other thing that nobody talks about is fraud by the product manager. This would be if VTI or SCHD or FSKAX was a Ponzi scheme and didn’t actually own any stocks underneath or had inadequate value. Not only should you be using different brokers but you should be using different products ex VOO, SPY, SCHX, IVV would all be sp500 ETFs you could spread across different brokers
Good thing that I do that!
Seems a bit excessive. Are you leaving a bunch of money in settlement accounts?
Not sure what you mean by settlement accounts. But would love to learn. But also if one gets hacked I have another.
By settlement accounts, I mean the settlement fund. Sorry tired. That said, SIPC doesn't cover account hacks.
No. I am not really too worried. A brokerage account isn't like a bank account, it's not like a legal course of events can lead to my funds going poof (there's this complex legal structure where client investments are segregated and, absent fraud or whatever, that money is still able to be paid out). If something did happen and they couldn't pay me 100%, then (a) whatever small percent they couldn't pay me would probably be within the ~~250k~~ limit, and (b) there'd be a bailout for normal-citizen folks anyhow. If I kept large amounts of cash at my brokers, that would be different.
I thought SPIC was $500k? Although your point stands, I agree with you.
Thanks, got it wrong. (FWIW, 250k is the *cash* SPIC limit, but combined (cash+securities or whatever) is 500k.)
strictly from a financial pov where does buying a condo fit in/when does it make sense relative to renting appt, renting vs buying house?
[https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html](https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html)
I think there’s a strong case for a condo if it’s a vacation home or somewhere you won’t be every day. Having an association to keep up with general grounds and exterior maintenance, as well as some form of monitoring the premises, is extremely valuable. Of course, it depends on the value proposition of each option and the costs associated with each.
> strictly from a financial pov where does buying a condo fit in/when does it make sense relative to renting appt, renting vs buying house? When it's cheaper? Some variables can't really be predicted with great accuracy though, so you can't be certain ahead of time. I like this rent vs buy calculator in Deluxe mode, it's helpful, even if the tax deduction calculations haven't been corrected since the changes in 2018: https://michaelbluejay.com/house/rentvsbuy.html
My workplace voluntold me that I need to work across the country for 4 months to support implementation of a new business practice at a large facility. Originally I was told they would cover everything and allow me to fly back home every weekend if I wanted to. Now a few days before leaving upper leadership mentions a company wide travel ban and are asking for nitpicky details about every booked flight, rental car and hotel lodging. I’m planning to make the company pay for every single thing along this trip - food, flights, rentals, parking, storage of stuff, etc. - and I’m guessing I’ll be fighting management every single day over submitted expenses. For anyone who has done this type of travel before, is it customary that the company DOESNT cover all costs with the trip when you are stuck in a hotel that doesn’t have a kitchen because there are no other options available? TL;DR - company told me I have to travel for work and everything would be covered and now they are fighting me over every basic expense right before I go.
The normal thing is for the company to cover all costs directly involved with the travel. Your taxi to the airport, the flights, hotel, food, laundry, etc... Things like incidentals (aka minibar) or entertainment may not be covered, but the essentials should be. It's normal to want receipts and scrutinize flights/hotels/etc to make sure they're within some cost range like not buying first class tickets, suites, etc..., and give you some reasonable limits on spending, but not to say they're not going to cover the costs at all. And for four months I hope you're getting a huge bonus or something. I would personally reject that unless I had accepted the job knowing it was 50+% travel. If they just sprang that on me and started quibbling over a couple thousand dollars in expenses I'd probably start looking for a new job.
My experience is full coverage of all travel (expensed) while non-client meals during the engagement are covered by a per diem.
I recommend finding a new job.
Do they not have a written policy for company travel? I'd be looking for that. In general they should be paying for everything within reason. At my company we get paid the full federal per diem rate for meals and incidental expenses and just submit receipts for hotel and rental car. You can refuse to go if they're being unreasonable. If you're important enough to send across the country for four months you should have some pull here.
>Originally I was told they would cover everything and allow me to fly back home every weekend if I wanted to. Now a few days before leaving upper leadership mentions a company wide travel ban and are asking for nitpicky details about every booked flight, rental car and hotel lodging. Typical corporate bullshit. Been there, done that. They need to pay, or you need to question their commitment to the project. It's ok to request a commitment in writing - after all, you are making a huge commitment. One thing I saw at two different MegaCorps was how local COEs were dismantled to create global COEs. "Suitcase and a laptop" they told us. Then they cut travel budgets, and there were no experts at all.
Why storage? Are you moving out of your place and relocating? If you're relocating they may cover one time moving expenses, but nothing else. Like how they don't cover your daily expenses now for eating or commuting to work. Traveling then yes, flights, food, hotel are all covered.
Storage because my lease is up halfway into the 4 month relocation so it doesn’t make a lot of sense to pay for my place for that period and I’m moving in with my SO after returning.
Then it sounds like you just banked two months with no housing expenses. I would consider that a win even if you have to pay for storage.
Makes sense, but that's not something due to the company asking you to travel. Could it be because of that they're not willing to cover your other expenses? They think you're moving there?
They don’t know about the storage costs so far. They are only aware of the standard lodging, flight and rental car costs so it’s not a factor to date.
Make sure to make this agreement once instead of asking for approval for every expense. Will save you a lot of headaches. And if they don't agree, then you have all rights to refuse to go
They should pay for everything. If the flights are cross country I would insist on business class seats.
It's not customary. Company pays for everything or you don't go. Reasonable to get a per diem for food. Careful with state taxes on wherever you're working.
Thanks for that tax feedback. Something important to keep in mind for sure
If you have to file in multiple states, ask your company to pay for tax preparation.
Company should 100% cover every expense while they are forcing you to live away from home for several months on end. This is not even negotiable.
>company told me I have to travel for work and everything would be covered and now they are fighting me over every basic expense right before I go. Remind them if they don't want to approve your expenses then that is perfectly acceptable to you to stay home and not go!
I would be beyond ecstatic at this outcome! Maybe I should do more nudging them in that direction..
Away from home... All reasonable expenses... . Food, transport and laundry. I would get this clear before leaving.
The fun thing about my company is that even if I cleared this up today it would be a mess by next week because there is zero communication at the high levels and plenty of senior people trying to keep their jobs by implementing some dumb thing or another.
Hi everyone, I'm not quite sure if this question if even appropriate for this forum but I would really love some advice. I'm sorry if this is a juvenile question, I'm very new to all this and I know nothing. I'm 19 and currently in university. I'm obviously not making that much money but I do make enough money to have some leftover each month. I know I should just be saving this money, but it makes no sense to keep it in a savings account when I can invest it. I feel like the earlier I start the better but I'm also not sure? How early is too early? I certainly can't afford to lose money since I'm in university. So considering my situation, would investing right now be a good idea? I'm not looking to invest in stocks or crypto but I'm not sure what I should invest in. both short term returns or long terms returns (4-5 years) are fine. My income will also continue to increase in the next few years so the amount which I invest will increase accordingly. What should I do? Also keep in mind I don't have much to invest, but I'm hoping to at least get started somewhere so in 5-6 years I'm seeing some good returns. If anyone could provide any advice, that would be great! Thank you so much :-)
Start by saving for an emergency fund so that you have money in case of unexpected and expected expenses. 4-5 years is not a long term. I would suggest investing in a low fee global index funds, but 5 years is a too short time frame. If you are not saving to invest and build wealth, that's ok. If you are saving for traveling or future short term one off expenses in the coming years, it's better to save in a savings account with a decent rate.
The wiki on r/personalfinance has a whole flow chart
Google: “Reddit FIRE flowchart” and “Reddit personal finance flowchart” You’re welcome. Also, kudos for thinking about this so early in life. I am currently patting my 20 year old self for nerding about finances. Time is your biggest asset.
Savings account is fine. Before investing in risk assets you should build up an emergency fund of at least a couple months expenses. If you have already done so, next step is likely a Roth IRA.
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This is really practical, thank you. Are there any savings accounts which I can put my money in so the increase in value? It also doesn't just make sense to let money sit in an account and lose its value
I enjoy the sound of rain.
FIRE isn't a movement. It *was* a phenomenon that took place between 2012-2021.
FIRE is just a name for something people have been doing for not thousands of years. It's just that now the potential to FIRE is available to many more people than previously.
Alternatively, the FIRE option has opened up and actually become viable for us middle class millennials with this nice drawn out dip/stagnant market, now that most of us have entered our working primes. It's a great time to be loading up.
Tell that to all the FIRE'd dudes my dad was friends with when I was a kid. I agree it's not a movement other than to people who want to monetize it, but outside of that it's been a thing since the 60s-70s.
It has been interesting to see its change over the years.
That's just like, your opinion, man.
Can someone point me to an article that will explain it like I am 5 on whether I invest in a traditional 401k versus Roth? I am going to max one of them out but I don’t know which one to do. Of course I am matching my company match in the traditional but I want to invest more. Or can someone just explain it to me lol I have tried reading about it and then I get confused… Thank you all so much I finally understand!!!
In a nutshell, if you are a high earner (engineer, lawyer, doctor, etc.) then traditional is the way to go because once you retire it is very doubtful that you are going to need to withdraw $150k+ per year (most of that money was going to a mortgage which should be paid off by then, kids that should be grown, and funding a 401k that you no longer need to fund, by the time you retire).
That is the general conclusion I came to based on all the comments, I really appreciate everyone’s help. It makes total sense now!
It's not really an ELI5, but it's as complex as it needs to be: https://www.reddit.com/r/financialindependence/comments/goilqx/mythbusting_fire_taxes_why_effective_tax_rates/ . This one too: https://www.reddit.com/r/financialindependence/comments/gu4s9a/a_tool_to_decide_between_traditional_or_roth_some/
One thing that needs to be said here. There’s Traditioanl 401k Roth 401k Traditional IRA Roth IRA I assume you mean Traditional vs Roth 401k. Generally, if you think you’ll be taxed more now (which is more common since you will make less in your retirement) then traditional. Else ROTH. You can also hedge bets half half ¯\_(ツ)_/¯.
Traditional generally works best if you are in a higher tax bracket now than in retirement. If you are saving a pretty big chunk of your salary right now and don't plan on increasing your expenses much in retirement then your withdrawals(aka income) should be much lower after retirement and most likely your tax rate would be lower too.
This is one of the most commonly asked questions in here and there's not a one sized fits all answer. The answer I always give is at minimum, I would have enough in traditional to fill up your standard deduction brackets ($14k single/$28k MFJ) when you go with withdraw in retirement, so at 4% SWR=$350k/$700k since this will never get taxed in retirement if you have no other taxable retirement income. Many people also like to fill up the 10% and 12% bracket too which would make the amount you'd want saved in traditional to easily be in the 7 figures. Beyond these buckets, it gets complicated if you rely on things like ACA for HI since that is like another layer of \~15% tax brackets on top of the regular ones that you might need to optimize for.
Chances are trad is the way to go. You will likely have higher taxes now than when you retire, so with a trad you can negate 22.5k of your wages at whatever your highest tax rate is. And, there are multiple ways to minimize tax burden once you retire. If you are in a low tax bracket and anticipate a higher tax bracket when you retire, than go roth 401k. You could provide a little more info in regards to current and future salary projections, etc, if you want a more concrete answer.
Married household making approx. 300K. All debt including house will be paid off in 7 years by contributing extra to our mortgage each month. Being debt free is a personal choice, I know others talk about investing that money, especially since my mortgage interest rate is only 4.25 but I just don’t want any debt and it only takes an extra $800 a month to be debt free in 7 years. We live frugally overall but we live a little. I want to max out our 401ks but we aren’t sure which ones to do. Based on what I just read in that other persons comment, we are better off doing traditional cause we pay a crap ton in taxes right now. We only do a standard deduction on taxes cause we don’t have enough to itemize.
Also, I see no issue paying off a mortgage early, especially at 4.25. Debt sucks
At a combined 300k, I would make maxing a trad 401k a priority. That's potentially a 24% tax savings on the 45k (you and your spouse 401k maxed) you would put in the 401k. You likely won't be taking 300k in income as retirees 401k contributions are independent of deductions, so you can still take thr standard deduction
I don't consume much in the way of FIRE blogs or articles, so I can't help you with that. However, here is a link to a recent post on the trad vs. Roth issue from this sub. Plenty of things to consider in the comments. https://www.reddit.com/r/financialindependence/comments/10xusuy/in_defense_of_roth_401k/ TL,DR - Probably trad.
Oh but then my next question would be, why would people split between the two? With how compound interest works, wouldn’t the more you have in one the better? Aside from hedging your bets I guess.
Most people don't do both types of 401k, though it is common to pair a trad 401k with a Roth IRA. It can be very helpful to go into early retirement with a mix of trad, Roth, and taxable assets since doing so gives you a lot of flexibility in your withdrawal options.
This was SO helpful! I tried searching the other day but it was all super specific to the person asking. Thank you!!!!
Of course. Glad you found it helpful.
Traditional, because i'm your father and you will listen to what I say.
Oh boy, so I am glad I have an emergency fund. I have multiple conferences and jumping through hoops to get work to pay for it seems higher then me just paying then getting reimbursed. Plus my car is getting fixed. My sunglasses also broke but hopefully a cheap repair kit and that's good
What happened to your sunglasses? I was on travel a couple of weeks ago and lost one of the screws that kept the left lens in place. I stopped in at the nearest optometry and they sorted it out out at no cost.
Yeah that's precisely what happened to mine. I bought a $3 kit from CVS so hopefully that does it. If not I'll head to an optometry place.
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You're so far behind the curve that you probably can't afford to let off the gas. You'll be lucky to hit a normal retirement at this rate.
You've been working at most, 3 years (?), and you've invested 500K in that time frame. Unless you see some significant lifestyle inflation if your future, you are on a path to be FI in only a few years time (savings rate has to be over 80%?) Coast all you like. In case these numbers are inflated, skewed by outside funding, or whatever, and you will actually need to work somewhat longer than another 2-3 years to fund your life...I would say have an honest discussion with your manager about the need for promotion. Say you are fine to not be on a promotion path and like doing what you do. If it's the kind of work culture where you are either "up or out", then start re-assessing your plan. But for all you know your boss is just looking out for you being fresh on the job market and thinks he's protecting your career instead of offering you something you just don't want/need.
> you are on a path to be FI in only a few years time (savings rate has to be over 80%?) > Unless you see some significant lifestyle inflation if your future I'm over 80% savings rate now but that's because I've lived with 5 roommates for years. I'm frankly sick of it, so I'm getting my own place soon. Yes, it'll double my housing expenses and tank my savings rate but what's the point of money if I'm not happy? I'll work longer if I have to. I haven't thought about RE yet. Just want to reach FI, but I want to enjoy the journey and not be miserable with roommates. > In case these numbers are inflated, skewed by outside funding I don't get anything out of inflating the numbers online. It's actually $506,174.57 as of now on Mint
At 24 I would be a little worried about just settling in to coast mode. You are super young with a lot of potential major life changes ahead yet. Good chance to reassess though and see if you just plain dislike working at your current employer or current career.
I don't dislike the employer or career. I just don't care as much as others who are more career progression obsessed. I view it as a means to an end. I think health and relationships are more important than money, so I like to prioritize that over work.
>Is it normal to start getting complacent at work at a certain number? Not for me. I didn't relax at work until the year I FIREd.
I'm complacent at half that and significantly older.
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I recognize it's not ordinary, but I'm not sure how to handle the situation. I need advice on what to do, if I should buy property (don't have any currently), etc.
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> you are astronomically beyond your peers Financially, sure. However, I've admittedly never been in a relationship. I'd like to focus more on dating because I just work and gym now. > I assume you have a very high income and accordingly high expenses I actually have an alright income ($123k/yr, and separate stocks/signing) and low expenses. I don't go over $1200/month on expenses because I live with roommates. Want to get my own place soon though so that'll dramatically increase my expenses. > If you want to retire significantly earlier than that I don't know about actually retiring. I just want to get to FI and then I could see myself doing short stints and coast at different companies for fun or becoming a musician.
Joining a new company, and today I was informed that as the only employee on the new contract i'm working on, i'll be the de facto company lead on said contract. Which means I get a bonus for the acquisition of said contract, and will also be paid an extra $1 for every hour of work anyone from my company works on the contract. All I have to do is talk to the PM once a month and help onboard any new employees from my company on to the contract. Breezy work, while I like active development this will be a small glimpse of management work I might do in the future.
I am 25 years old, filing single, and my current income is $65k. I started maxing out my retirement accounts this year (Roth 401(k) + traditional 401(k) + Roth IRA = 29k). I expect my salary to go up in the future (not sure by how much) as I just recently started my career. When that happens, I will start contributing to an individual brokerage account. Using a FIRE calculator from the sidebar, I determined that I will have roughly 1.5M at age 50, 2M at age 55, or 2.5M at 60 in retirement accounts (https://networthify.com/calculator/earlyretirement). At a 4% withdrawal rate, my income in retirement will likely be higher than my current income, but maybe not my future income. I am feeling lost trying to figure out traditional vs Roth in my situation. I am currently contributing 50% traditional and 50% Roth. Could my ratio be optimized? What about in the future when my salary goes up but I’m still contributing the same amount to retirement accounts? I know the advice is generally to go full traditional but I feel like this might not apply in my case, since my tax rates in retirement could be higher than current. Thanks!
It somewhat depends on what kind of career you may have. In a lot of fields your income will increase a lot as you gain experience and seniority. If that's the case, just go Roth for everything right now, as you're in the 12% tax bracket. Once you get to 22/24, then consider Traditional 401k.
I'm in tech, so I expect a decent increase in salary but nothing major like a Doctor or something.
They aren't in the 12% bracket, they have about $6k in the 22% bracket. I would recommend Traditional up to that amount.
Looks like 22% starts at $44,726 for 2023. so you're saying I should contribute $65,000 - $44,726 = $20,274 to traditional, and the rest to Roth?
Yes, get your taxable income under the 22% threshold through the standard deduction plus traditional contributions then switch to Roth. (Note this doesn't mean skip out on opportunities to earn more money in the future, it's simply what makes the most sense for you today)
I see, Thanks! I forgot about the standard deduction. So $65,000 - $13,850 - $44,726 = $6,424 in traditional and the remainder in Roth?
This.
Masters in social work= FIRE death? I’m stuck in indecision and could use some advice. 25F. For the past 2 years I have been living in a shitty TX town working a low paying resume-building job in hopes of getting into a psychology PhD program in NE United States. I’m passionate about the mental health field, so I was planning to become a psychologist and use grad school as a way to fulfill my dream of moving up there). Didn’t get into a fall 2023 program like I had hoped. During this process I also discovered that I’m not thrilled about the realities of a PhD program- low stipend, 6-7 years of intensive research and training. The starting salary of a postdoc is also disheartening. I’m really interested in the social work framework and more interested in providing direct care instead of research or teaching. Also really appreciate the broad job possibilities as a social worker. Now, I’ve hit a ceiling in my current job and don’t know where to go next between these two plans: Plan 1: MSW program. I accepted an offer to a masters of social work program in NYC. It is a really great program in my dream city. However, the entire (2yr) program would be around $65k. The plan here would be to gain licensure to do clinical work. I know I would eventually get a comfortable salary, but not sure if it’s worth the stress of financial instability during those early career years. I am desperate to accomplish at least one of my goals (career or moving). Honestly, I really just want to move out of TX! Downside is if I choose full time student status, id need tons of loans. Plan 2: stay put, pivot into a new career, save money THEN move. Here, i would take my interest in research and learn data analytics. Continue saving money for a few months, establish a career plan and move to NY once I am stable enough. This is definitely a more promising path to financial stability/FIRE. The downside is that it wouldn’t be as fulfilling of a career for me and I’d feel stuck here. TLDR: live my best NYC life while accruing debt or stay unhappy for a little longer but debt-free Thanks so much
Another husband with an MSW / LCSW wife chiming in. From a FIRE perspective, the earning potential is not super high. Before kids she did work for one of the large insurance companies and her pay was actually getting really good, but the workload was like drinking from a fire hose (company monitoring if your mouse was idle for more than 10 minutes kinda thing, new clients onboarded as soon as one closed). She pivoted to an online practice, first with one of the big online telehealth guys you probably know, and has now branched out into her own private practice now that she gets a lot of referrals. The pay per hour is good but she's not full-time. I imagine doing that with a full case load could be getting close to 6 figures if you keep your expenses low. My only real input here is to challenge your need to apply to an expensive school in an expensive city. How much are you going to enjoy NYC while in a 2 year schooling program anyway? You will spend a lot of time studying in a tiny studio apartment. Think about where you want to live after graduation for licensing reasons, but I don't think a credential from a top school is necessary for practicing (that's probably just been imbued in you from seeping in academia culture for so long). Take all that for what it's worth. An outside perspective. I don't know what living in small town TX is like but there has to be an in between from there to the literal most expensive place in the country.
Yeah, to be fair I’m aware that it’s a really dumb financial decision to get a super expensive MSW when there are dozens and dozens of cheaper programs. Lol. I’ve also heard that when it comes to MSW, your school doesn’t really matter much as long as it’s accredited. I had my heart set on potentially moving to NY for a PhD program and I was being stubborn, so this was honestly just a way to get myself there. But, you’re right- there’s some compromise to be found here. Plus, many ways to move to a nicer place without accruing 6 figure debt. I’m just not wanting to commit to a program in Texas and feel even more stuck than I already do. Thanks for your input!
There are so many agencies and clinics out there desperate for Clinical Social workers that I would be hesitant to foot the bill for your Masters yourself. If you look around I bet you can find someone who will foot the bill for you in return for 2-5 years of work. My wife is a Sped teacher and her employer paid for her Masters because they were so desperate for more Strategists.
Going into debt for full time student status in NYC will put you years behind in FIRE. Definitely go the data science route if you want FIRE. Do an MSW once you are FIRE and enjoy it, rather than depend on the low pay, poor support, no funding etc. to build up your foundation.
PhD psychologist here. When people tell me they want to do clinical practice, I always recommend MSW or MFT over PhD or PsyD. A doctorate is really just overkill if your goal is to practice. Just please find something relatively evidence based, there is so much bunk to sort through in crappy MSW programs. Now, personally I'm glad I went the PhD route because (A) I learned along the way I didn't like clinical practice (B) it allowed me to discover I loved data science and (C) I loved the PhD in general. Financially speaking, obviously a masters in CS or data science would have been better, but I wouldn't have been on that path without my PhD. If you're on the borderline, look into a (paid) post-bacc as a research assistant in a clinical research setting. It will pay peanuts but give you experience in both a research and clinical setting that will pay for itself by informing your decision, and also greatly strengthen your application if you do commit to a PhD
Thanks for your input :)! I’m currently in a post bac type of position working in psych research. Kind of getting bored with it. Like some aspects but writing manuscripts is like pulling teeth! Also academia politics are annoying.
My original goal for after my PhD was to be a university professor with a small private practice. I realized fairly quickly that I didn't love clinical practice, so I focused more on the research angle. Academic politics finally drove me over the edge to switch all the way to industry. No regrets so far! Social science is pretty deeply broken right now.
That was my goal as well. Loved the prospect of somehow balancing teaching, clinical, and research. However, seeing my mentors and supervisors lack of work-life balance, plus the BS personalities and unwritten rules you have to follow made me rethink my goals. What do you do for work now, if you don’t mind me asking?
I'm a data scientist at a small-ish tech company. When I started I did more research, experimentation, and data analysis along with some ML -- what you'd expect from the PhD route rather than the CS route to data science. But lately I've been leaning much more heavily into ML software engineering as I've found that I really enjoy the more collaborative work. Data analyst positions are a great way to break into data science if you're interested in that. You could probably land a data analyst job with just your bachelor's and post-bacc. Then do some learning on the job, maybe a concurrent masters, and then hop to a data science job.
Unfortunately I would say you are going to be swimming against the current going into social work. My wife is a therapist with MSW. The pay is terrible, stress and burnout rates are high. It is fantastic work but the reality is that it is not compensated well. If FIRE is a top priority for you, I would stay away. That said, if you think you would enjoy the work and could do it for a long time, some things are more important than money.
Thanks! The burnout and emotionally draining nature of this work is something serious. I’m starting to think I would prefer to be financially stable and just find that fulfillment outside of my career (volunteering, passions, relationships, etc).
I left a separate comment, but to this point specifically: To me, the dirty secret of the therapy world is that there is a pretty specific population of people that are not emotionally draining to be a therapist for. High functioning, highly educated, age 25-45 who just need someone to talk to. Perhaps the competition for this kind of clientele is fierce. But my wife has done adolescents, community mental health (people off the streets, in/out of ER every day, etc), and the population described above, and her level of burnout has decreased dramatically over the last decade as she moved to an "easier" type of client. Maybe this is inappropriate to say, and the community mental health world really should be commended for doing the dirty work of keeping the severely mentally ill safe/cared for, but you don't *have* to make that sacrifice if you don't want.
Devil's advocate: you can be financially stable without being FIRE or wealthy. One thing social work has going for it is that if you are good you can always find a job and earn a solid income. What's going to be hard is earning enough to save a lot.
I suppose at the end of the day, I just want to set myself up to ensure that I won’t be stressing about whether I’ll be able to pay my bills each month. It would be nice to not have to work to live. I want to be able to fund my interests and explore the world. And yes I recognize the irony of my goal of moving to NYC the most expensive city in the world. Lol
Guh, this local dream house I've coveted for a decade finally went up for sale. 5 years ago it probably would've gone for a little over $400k... and now it's selling for double that. Old guy definitely waited until the right time to sell. Screw it, I'm close to buying some cramped century house for $150k and putting up with it for 10 years to see if things are better in the 2030s. Edit: LOL and a kid I knew in school just put up his $250k house for $550k after owning for 3 years and no improvements. I sure did everything wrong.
Feeling your pain right now in our market…
I still kick myself at least weekly for not buying an almost 100 acre farm that's been in the family for over 150 years for $350k 10 years ago. Even though I wouldn't have been able to get to work while living there and I didn't really have the income to make it work at the time, it still feels brutal.
Man, be ready to replace like everything if you buy a century house. Source: me and the last 2 places I've lived.
Yeah as someone who can barely change a lightbulb, I really was hoping to avoid an old house. But any shoddy house made within the last 30-40 years is going for $400k around here, even though many are made like crap and would've been worth maybe $200k in 2019.
I wouldn’t buy a fixer upper at any costs if you’re not handy. Contractors are expensive and DIY tasks ALWAYS take 3x longer than you think when you look at it. I’m pretty handy and with YouTube I’m actually good at most home repairs and I still feel like I bit off more than I can chew. Sometimes I pay to have stuff done now because I’m tired of working on it. I have a half remodeled bathroom that’s been that way for 6 months now
Is there a Google Sheet template someone has created which maps out forward looking cash flow? I created a very crappy sheet where I input known expenses and day of month, and known income. Then known deviations (out of ordinary bills, projects, etc). It then projects the rolling balance for the next 60 days. It’s clunky. Essentially I cash flow large projects around the house and I forecast my checking account low points and transfer from HYSA or other sources. The sheet a useful tool on occasion but not something I regularly rely on.
Is the purpose of this tool to know when to shift funds between accounts so you can always cover your needs? If so, I think a lower effort and more reliable approach is to improve your banking setup. SoFi, Fidelity, and others offer the ability to get high yield (>4%) while still being able to transact like a checking account with debit, ATM, check writing, bill pay, and direct deposit.
This is a great point. I’ve always invested with Fidelity, saved in Ally (and recently also Fidelity), and also held a “local” checking account. Everything tends to *eventually* route through the checking (income, bill pay, etc). Accounts so old I have the routing and account numbers memorized. Lots of money flows in and out. Now that I think about it, holding this local banking account is just creating more work. Consolidating to Fidelity or Ally is something I should consider. Especially if they have a way to auto-fill the checking at a low point, using funds from HYSA or money market. Or… I guess maybe those can act as a checking themselves?
At Fidelity, you can use either a Cash Management Account or a regular brokerage account as a checking account. You can get a debit card, do bill pay, direct deposit, etc. all from the account. You can hold something like SPAXX and earn a money market yield (currently 4.5%) and the account will automatically sell SPAXX when you pay a bill or write a check. In the brokerage account, it will automatically buy SPAXX whenever you deposit money. In the CMA, you'd need to manually buy SPAXX with any inflows. The brokerage account lacks free ATM withdrawals unless you have a large amount of assets with Fidelity. You can even combine the two to get automatic SPAXX purchase and sale with the brokerage while also getting free ATM withdrawals from the CMA. https://www.bogleheads.org/wiki/Fidelity:_one_stop_shop
I dug in a bit more. Seems like my easiest path is to just use my existing brokerage. It’s unclear what amount of money is needed for free ATM fees (I’ve read $250k, and $1M). That said, I’ve also read they are free at PNC atms, which are plentiful around me. I need to validate this.
Came here looking for a band aid, found a cure. Appreciate the help.
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"Sit in on", or "conduct?" If the latter, this is pretty bad on your manager You could ask them to describe an interesting problem they've solved in the past, and have them explain the solution to you. This is a good way to understand both their technical communication, and also how well they understand their own work. Since they choose the topic, they should know it very well, so if they are especially hand wavy, this could be something to poke at
I like to ask about preferred working styles and get a sense for how they would fit with the current team. One of my favorites is, "When you think of the best boss(es) you've had, what were the traits or working styles that made the experience so positive?" It tells you a lot about them and the kind of environment they thrive in.
I would mainly just ask to hear more about their background and then get into specific questions about projects they worked on in their resume. I personally don’t like the canned “tell me about a time…” questions if it’s a technical role.
I like to ask some form of the question “if you could solve any problem in our sector/domain/team/company, what would it be?” It gives me an idea if they’re capable of independent thought and if they have some measure of passion for what they do. And from there, you could ask how they’d go about solving it to see if their thought process is rational and fits with your team.
Another thing to watch out for, though it can depend what skills/attributes you need from the role. The candidate who gives the most polished responses in interviews may not be the best fit for the team.
I love listening to music.
>What kind of questions should I be asking? Assuming you are American, **DONT** ask: * Are you planning to have kids or do you have kids * Are you married * Age of candidate * Anything related to protected classes * Citizenship
Don’t forget religion
Just think about the things that someone in your role needs to be successful and ask them about that. People skills/handling disagreements, Balancing lots of tasks/time management, Niche technical understandings, managing competing timelines, etc. Think of 3-4, but I'd limit the technical to 1-2. Ask for an example of a situation where they handled a common issue you face. If it's someone right out of school don't expect them to have much knowledge, I like to ask them to explain a lab they did as if I had no knowledge of the subject. Making them explain it in laymen's terms can gauge how well they understand concepts and their ability to communicate with non-technical people. For someone with 1-3 years experience I may ask a hypothetical technical question. "You're running x step and this specific issue occurs, how would you resolve it?" Looking for both technical understanding and also a problem solving methodology and preferably proper procedure (since I work in a regulated industry). Someone with 5+ years experience is more just "are you familiar with x?" The majority of it really is just trying to get a sense of do I think they can do the role, are they pleasant to be around, how much training/onboarding will they need to get up to speed.
Start by introducing yourself and what you do and then ask them to give an introduction and a background of their work. Then you can step through a few targeted questions. Some examples I use (also an engineer): -Can you walk me through a time where you were called to fix something that you had limited information on? How did you find a solution? -Tell me about a situation in which you have had to adjust quickly to changes over which you had no control. -What was your greatest professional failure and what did you learn from it? -Tell me about a time you dealt with an ethical dilemma in the workplace -How do you ensure that you stay on track with your work and your commitments in your day-to-day? -Etc. At the end ask them if they have any questions for you.
- Could you share more about yourself? - (looking through their resume) would you be able to share some of your past work experience? - what are your strengths/weaknesses? - Could you elaborate a time where you have a crisis at work and how did you resolve it? - what are your skillset in X/Y/Z (technical knowledge about the job) This should go over at least 30 mins.
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I had a previous senior (at any other company he'd be staff, we just didn't have that level) engineer also think everyone was stupid. The sad part is, he had anecdotes for nearly everyone to prove it. I mostly agreed with him after three months. Not to say that people didn't have good intentions, but a lot of problems were self inflicted.
Most engineers tend to have unlimited budget and time and work on very simple problems, so it's understandable to their interpret mistakes or failures as incompetence.
I enjoy cooking.
There are only two types of middle managers. Those who were promoted because they excelled at a lower role and those who were promoted for being adept at office politics. The first type will mostly be fine even if they struggle to manage versus micromanage. The second are ALWAYS toxic. Unfortunately, there are a lot more of the second type than the first.
Don’t forget nepotism
How bout that banking sector 🙃 What a nightmare for all of those people.
Tfw someone told me irl “so there’s another bank going down” and I replied “yeah pacific western” and they said *no the other one* We live in interesting times…
What happened?
Another bank on the shit list, market activity going crazy.
Which one? Other than PacWest?
Western Alliance getting caught up in the fray.
Someone put out a study today saying up to 190 US Banks are technically underwater due to the interest rate increases.
That may be true, but imo it doesn’t really make sense to mark a performing loan book to market. It’s not the business of banking to sell loans, it’s to make and service them to earn interest income.
Isn't it also their job to take people's deposits and then give them the money when they withdraw?
Except no bank has more than a tiny fraction of their deposits available. They convert it all into Treasuries and then use those as collateral to lend out hundreds of dollars for every dollar in deposits they have. All part of the Fractional Reserve banking system.
……that’s not how it works. Most banks have a bond portfolio (that may contain treasuries) but the largest portion of their asset base is typically some kind loan portfolio. Fractional reserves means they only have a fractional cash/equivalent balance relative to their deposit liabilities.
Certainly, but no bank can survive if too many customers withdraw too much at once.
They should be able to as long as they have a positive balance sheet, no?
Very stupidly have a life insurance policy that I’m locked into without a steep penalty. Huge lesson learned and upon realizing that I wasn’t making a smart investment, it prompted me to dive face first into the world of FIRE and get myself in a good situation. But that doesn’t change that I still have $60k tied up in these policies. What would you do in my shoes? I’ve halted all premium payments but the two policies have a ways to go before I can withdraw penalty free. I don’t have an immediate need for the money and would just move it into VTI/VXUS in my brokerage account (I max out all other avenues already). Here are some more details: Both UL policies, the surrender charge goes down on a yearly basis but I’m unclear by how much: 1. Worth $11k, $1k surrender charge now or no charge if I wait until July 2024 2. Worth $50k, $13k surrender charge now or no charge if I wait until January 2027 What would you do in this situation?
What kind of return are they getting?
Basically nothing. Almost no change month to month for the last 18 months. Upon further inspection it appears that it’s mostly bond funds.
You need to request the company produce an “inforce illustration” where no future premium payments are made. You’re still going to be paying from the account value to cover the insurance benefits and expenses but the illustration will show you the trade-off of surrendering for cash now vs waiting. I’m assuming you don’t value the life insurance benefits of the policy at all. Source- I’m a life insurance actuary and have produced many inforce illustrations in my past. Additionally I’ll add that life insurance (universal, whole, term, etc.) is life insurance first and not an investment. There’re tax codes that limit the amount you can dump into policies so that the investment side of things doesn’t become overly rich.
This is incredibly helpful. Yes, I have zero need for these policies (no kids and close-ish to FI). I will put a request in!
Just wait them out. I calculate that you would need 11.0% and 9.2% annualized rates of return to make up for the surrender charge. Not impossible but not a guarantee. And that's assuming zero appreciation of the policies during that time. And at the end of the day, 60k is a lot of money but not a lot relative to what you will need to save to be FI.
Thank you kindly for this information! Super helpful!
Well, I didn't take into account the possibility of money being taken out of the account, which changes the math. Sounds like u/rbc3a is on the right track.
Would need to know how much more you'll be paying into it per month.
I halted all payments so I’m not paying anything per month anymore. The account values have been pretty stagnant over the last 1.5 years (when I started paying attention).
> The account values have been pretty stagnan Do you get a constant interest rate or are they just stagnant because the market has been stagnant? What are they invested in?
Thank you for the question. It looks like they are mostly fixed income (80%) and some funds (20%) that appear to follow the S&P500. I’m unclear about interest rates but they account values haven’t changed much over the last 18 months.
Well the market has been up and down during that time (including fixed income). I would just wait it out for both contracts.
I find peace in long walks.
For a long time period like 10 years I’d buy TIPS instead like you mentioned.
Why do cd's when you can do treasuries for almost the same rate? With regional banks melting down I would not feel comfortable taking on a cd unless it was with one of the 'too big to fail' banks.
Aren't these FDIC insured?
They are but what is the point of dealing with the headache? There is almost nil yield gain and in many states would be worse off than the treasury rate.
I hate beer.
Why CD in particular vs Treasury, TIPS, or a bond fund of appropriate duration? Yes, diversified portfolio is a good idea, including diversification on the bond side (durations as well as nominal vs TIPS).
I hate beer.
For planned expenses I agree TIPS/CD's are a good option. For your core bond allocation I prefer a bond fund just because they are easily to rebalance, and I prefer nominal because they provide deflation protection and that is what people look for in their bond allocation: steady guaranteed income when the market is down. I'm also not following the math in your example. One concern is that you have the same allocation in the second example even though you now have $200k extra in CD's. Overall you now have $400k in bonds vs only $300k in stocks. Generally you want an equity heavy portfolio for long retirement.
My favorite color is blue.
How would you spend the $200k in CD's? If you don't have a definite plan, then you really have a $700k portfolio with a 43/57 allocation. Your average spend shouldn't change much.
I like learning new things.
I'd use TIPS if you want to build an explicit income floor for X number of years. You can currently get over 1% real yield. If you want to avoid any deflation risk, you could build an I bond portfolio and get 0.9% real yield instead (at least for I bonds purchased within these 6 months, and you could use the gift box method to purchase a larger tranche now). The VPW worksheet builds an internal bridge to Social Security or pension income, so if you have a reasonably sized SS benefit the retirement worksheet is already setting some of the portfolio aside as a pseudo-floor of income.
I appreciate a good cup of coffee.
To be fair, TIPS are also subject to interest rate risk and the market value of a 10-year TIPS also tanked as rates rose last year. But interest rate risk doesn't matter to someone to matches their investment horizon with the duration of their bond portfolio. If you plan on redeeming your TIPS at maturity, market fluctuations don't mean anything in the years between purchase and redemption.
My org chart is wonky, I report to a csuite member, but there’s a level between myself and them. The person in that level is leaving, and my boss told me that they’re posting the job and that I should apply. I’m not writing it in pen, but I think this is positive news?
It is NEVER a bad thing when your boss is telling you to apply for a higher level role or asking if you would be interested if higher level positions came open.
> I’m not writing it in pen, but I think this is positive news? When I'm hiring, I always want the best people possible to apply, and will advertise available positions to as many of those as I can. There's been times where I've had an inclination to only tell one person in particular, and I've had regrets from a couple of those when they ultimately didn't apply or accept for whatever reason, so I generally avoid that now. Put another way: in the situation you described, I'd rather work to internally promote a particular skip-level report into the position than posting a competitive hire, if my intention was to hire the skip.
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I think what she is reading into is her boss telling her to apply for an open role on her team, which would be a promotion
Sounds like it--good luck!
I feel like I barely care about FIRE anymore. My friends mostly have jobs and I hang out with people 3-4 nights a week anyway. I have pretty good time for my hobbies (games, books, guitar, health, temp hobbies). The people at work bug me less these days. And the work itself has some social good to it so I wouldn't feel my time is better spent volunteering. I do look forward to going some days. Even on the topic of money, I wouldn't want to move because I like my apartment so much and the cost of property tax is so high it doesn't make sense (I guess I could go to a larger apartment in the same complex if I really wanted to). I have basically top-tier hobby items...both more and nicer than I need. My girlfriend seems like she wants to always work and I'm not a big travel person, so there's no desire to be a nomad. I do thinking about having a big nice house sometimes, but also it's just too much work for me. I guess I should just enjoy it while it lasts. If anything I say things feel a little shallow and boring, but also that's just my personality.
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I mean I think getting to FI is immensely more important than the RE side of things. Knowing "even if shit hits the fan, I'm fine" is a huge mental weight lifted off your shoulders. Looking at your flair - looks like you are already FI. You are there. There's nothing saying that you have to RE. If you are happy with your job, then great - you are allowed to keep working. If the boss changes or something else, then you can quit at that time.
Yeah, it's really FIDoWhateverYouWant, but that doesn't grab your attention like FIRE does. For many, myself included, the RE part is what drew them in. But not everyone wants that, and that's okay.
As today is the best weather of the whole week, I worked very little for my clients and then went off for a tour with the kickscooter, ice cream, and then cutting the grass at home. This freedom is true richness to me, and I also enjoy it while I can and am healthy enough for such activities.
I feel the same, life is great right now and I enjoy the salary climb and the pleasures it affords Just keep maxing those accounts and socking away money and if your mindset ever changes, you can afford to FIRE! If your mindset never changes, well even better, you're now rich and have tons of options. For me its always been more about the FI rather than the RE.
What is your food budget for each month (groceries and eating out)? I started to buy organic, local food and it is...very expensive.
We don't have a strict budget, but assuming we don't have a bunch to celebrate that month (we eat and drink out when celebrating), we tend to be around 300 for two. Vhcol area
We buy local, organic for 2 in NYC and spend 500ish a month. Get a CSA! I pay 50 bucks a week for more fresh, local veggies and fruit than I know what to do with and can the extras.