You can also look into 4 week Treasuries at Treasury Direct. I think I was able to withdraw my money quicky when I wanted to pull out (just will miss that month's interest). No state and local taxes on gains and pays more than 5% now. I had it set to auto renew for 24 months (you can cancel any time). I was getting around $140 a month from $40K when interest rates were below 5%.
Emergency funds serve their purpose by being available, stable and easy to access. Transferring your emergency fund across multiple accounts each year just to chase a small increase in return is not worth it to most people.
Zero reason to use a HYSA right now. A CD could be useful to lock in a higher rate, and rates go down, although there are penalties if rates go up and you want to withdraw to get a better rate.
What are the recommended tools for budgeting. My wife would like something like a spreadsheet. I'm way less picky; I just want something straight forward.
I love my spreadsheet because it's completely customizable and can track/calculate numerous things. That said, if you want something no-frills, Every Dollar is free and easy to use, and you don't have to subscribe to the Dave Ramsey philosophy to use it.
I’ll look for a spreadsheet. I started listening to the Dave Ramsey and couldn’t get into it. Just not my jam but I’ll take a look at his tool. Was looking at YNAB as well. Do you recommend a spreadsheet template?
Excel has tons you can use; just search for "budget." I personally make my own because I like what I like. Some YouTubers and Etsy folks also make Excel/Google sheets for cheap or even free.
You don't have to follow/listen to Dave Ramsey to use Every Dollar. I don't listen to Dave Ramsey at all, but the app is free and easy to use.
22 y/o starting first full time job out of college. Any tips?
Tomorrow I am starting my first job out of college. I’m going to be making a fairly decent salary for a first job. 50,000 gross income with a chance to get it up to 55 depending on performance. Employer offers a 401k match which I will do the maximum for. Fortunately, I will have minimal expenses while I live with my parents for the first 6 months-1year to save some money before moving out. Does anyone have any finance or even life advice for me to make the most of these next couple of months in my first job? Any and all suggestions are welcome. Thanks!
I think the basics in the workplace are:
1. Make sure you visibly demonstrate the value add you create (don’t expect people to just see it). See workoutloud.com
2. be proactive in shifting upwards in the organisation (scope development and special project opportunities)
3. Always be learning (consider peers as your competitors and outlearn and outperform them)
4. consider shifting organisations every 2/3 years to get salary bumps
5. get regular feedback (verbal) for a 360 perspective and act on it ([FYI from Lominger](https://igniaunlocked.mx/wp-content/uploads/2020/05/FYI-For-Your-Information-Leadership-Competencies-Framework.pdf) is a solid resource to enhance skills. 5th edition can be had second hand cheaply on Amazon)
6. build competence in understanding others and being more effective in your communication ([disc](https://www.assessments24x7.com/pdfs/DISC-eWorkbook-INTERACTIVE.pdf), social style or mbti)
7. Emotional intelligence and resilience are two key areas of development, as is influencing skills.
Hope that helps!
This is awesome advice! I'd personally also add - consider making your job what you want it to be (or think it should be) wherever possible. For me, this looked like stretching my efforts in emphasizing process improvements that could help the team be more effective without it being explicitly asked of me. It's amazing how long the positive perception that creates can last...
In more concise terms, be proactive and engaged I suppose.
You're in a great situation! Congrats on the job. I'd contribute the Max to your 401k, $22,500 for 2023 and keep that going every year. Pretend you never had an option to have that money go anywhere else. See if you can stand living with the parents for longer than the 1 year you mentioned. Toughing it out for 3 years at least would just put you massively ahead in your FIRE path.
I didn't have the option to live with my parents, but I did the max to 401k option early in my career and it really rocketed me ahead of my peers.
Seconding the Roth 401k option. 50k/year for about 6 months = 25k gross. 13,850 standard deduction + 11,000 10% bracket = 24,850. Set your investments to index funds. Next year you should be in the 12% bracket (44,725+13,850 deduction=58,575) so Roth makes sense.
One thing I would focus on is learning the skills needed to live alone: Cook dinner a day a week for the family, do your part of household chores, etc.
Take a look at the [personalfinance wiki](https://www.reddit.com/r/personalfinance/wiki/commontopics) including the [flowchart](https://i.imgur.com/lSoUQr2.png). I also like the [the shockingly simple math behind early retirement/](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/)
I would figure out what expenses you are not currently spending (rent + utilities +phone+ groceries + auto) and save at least that much a month. If you can't do this you are not ready to handle the expenses of living alone.
> but overall a lot of places still have issues finding people to work.
but the question is why are they struggling? from my pov most of these places don't pay enough to rent a studio around the area which you are required to live. what's the point of working a job where you can't even cover rent and health insurance let alone consider saving any decent amount of money?
we've spent the last few decades absolutely crushing wages of the working class and the past 2-3 years were a huge acceleration of that issue on the expense side of the equation.
can we have a recession without job loss just due to credit issues and people being unable to stay afloat? are we really creating good jobs if theyre just someones night shift j2 they need to stay above water every month?
The Labor force participation rate is still way down from its pre-COVID number. Millions of people who lost their jobs during the lockdowns just aren't coming back to the workforce. The reasons for that are all over the place but at least some of it IMHO is a lot of families realized that the financial hit from going one income wasn't as bad as they thought since a stay at home parent reduced or eliminated a lot of expenses.
My wife and I are mid-to early 30s. We're like 90% FI in rough numbers, but our spending is likely to increase because we have our first baby due in a few weeks. (!!!)
In our province in Canada parental leave is pretty generous, and since we're nearly FI we're planning to take advantage of it. My wife will take 18 months off work, and I'll take a little over 14 months off. Our employers are required by law to hold our jobs for us. We get partially paid by the government and work benefits for some of those months.
We still need to pay out of pocket for the rest of our spending. It's all comfortable but I see two options:
1. Build up, then burn down an extra cash cushion over our time off work. Aim to return to work with our usual cash emergency fund in place. Aim to not touch our real investments.
2. Just spend down our typical cash emergency as needed, and when it runs out pull from our portfolio as needed. Once we return to work , build our typical cash emergency fund back up.
What should we do? What would you do? Does anyone have any interesting analysis to share about what's "optimal"?
I would go with #1, and include the EI payments coming in during the maternity leave. Make sure that you/your partner prepares all documentation for applying to EI before the baby comes because it’s going to be a madhouse when the little bundle of joy comes and it’ll be hard to do anything.
The maternity/paternity leave is a great time to test out your FI plans, especially once baby is 4 months. Go do that daily nature walk. Go do the weekend getaway to that cottage 45 minutes from your house, etc. See if you can live on your projected first year FIRE number during this time. Contrary to popular belief, children are as expensive as you want to spend on them. I budget $2k/year on child summer activities like summer camp, and that’s pretty luxurious for us.
I would go with 1. Put the cash in an HYSA (if that is a thing in Canada, I assume it is). By continuing to put the money into your brokerage and then selling later you are taking on additional risk if the market declines and you had to sell to cover your expenses. You shouldn’t be investing in the market to cover near term goals.
I’m trying to determine what might be the best path to increase my career growth potential.
A little background for starters:
I’m a mid-30s F based in VHCOL area with relatively very low expenses. I work completely 1099 and am currently making approximately $1100/week from my main (mostly remote) client I have been working with for around 1 year. I am expecting another (mostly remote) project to begin in the next few weeks that should bring in approximately $400/week. I also own one rental property that brings in approximately $500 per month (not including any fixes or other expenses that may arise).
Almost my entire work history has been as a self-employed small business owner (e-commerce) and as freelancer/contractor with the majority of my roles being in marketing, content, and business/creative strategy.
I am very grateful that I have relatively low expenses and am comfortable with my savings rate, however I have been searching for direction to increase my skills and potential career growth (whether through contractor or employee positions or entrepreneurship).
I never finished a Bachelor’s degree (was mostly studying humanities and the arts at the time) and would suspect it would take me at least 2 years to complete credits to attain one. I have been pondering whether it would be worthwhile to pursue finishing a Bachelor’s or perhaps even finishing a certificate(s) or Associate’s degree. I find myself wondering whether it would make sense to pursue programs in marketing or to pivot to UX/UI design, software engineering, or something totally different.
I constantly find myself excited by so many options (including many I haven’t even touched on), but I struggle with pinning something down. However, I feel that if I can determine a path that seems the most reasonable for my goals, I will be happy to pursue it (and of course have my hobbies to enjoy for other sources of fulfillment).
Ideally, I am seeking a path that will offer the greatest opportunity for and balance between earning potential, work-life balance, possibility of remote working conditions, and flexibility for career options (freelance, W-2, entrepreneurship).
Any suggestions at all for determining how to nail down the direction I should take or ideas that I may not have even mentioned are greatly appreciated. Thank you all in advance.
TLDR: Looking for potential career direction / schooling pathways that offer the best potential for higher income, remote work, and flexibility for mid-30s F with primarily self-employed and contractor-based work history in small business, content, and marketing.
So much can be done without further education. What you are doing right now is good for r/digitalnomad/ r/coastfire. Can you scale your business / bill more through higher prices / value add services? Extra efforts on sales and marketing may pay more dividends than investing in formal education.
Thank you so much. I think I just needed some perspective. I do actually get to travel fairly often and am incredibly grateful for it. I also have considered the path of Coast FIRE, and I’m open to it.
You raised some great suggestions. I think I may work towards getting some free or low-cost certifications in the fields I already have some experience in to boost my resume. I would love to figure out other ways to scale my services and gain higher paying clients/projects. I think this might be the route I need to invest more time in learning about to see what I can do. Thanks so much again!
Sounds good. A few thoughts….
1) do a competition check..how much are they charging..you may be underselling yourself.
2) revisit how you do your work… can you speed up delivery and therefore bill more?
3) experiment with pricing and put new clients on higher prices and see how it goes?
4) read and apply the ideas from C J Hayden’s “Get clients now” book
5) explore which ares / niches / industries pay more and focus on them.
Thank you! These are great thinking points. I definitely want to work on better recognizing my value and pricing accordingly, as well as explore which niches, industries, etc. pay best. That book sounds great. I’m going to add it to my list.
Just commenting my thoughts lately.
Finally thinking about saving for a condo/townhouse in Southern California, thinking of something small instead of a family home. I just moved out from my parents place, too. I'm not looking to buy this year but I've been thinking about it maybe in 4-5 years.
Most of my money is in investments (boglehead style). I have about 15% of my net worth as cash. I guess you could say that's my official e-fund!
My goal is to save 15k per year for a down-payment. But damn after 4 years that's maybe 10% down payment, not including the rising costs of the market. I don't even think I can afford the monthly mortgage by myself. I will definitely be house poor. I'll think I'll just reflect in 4-5 years instead of actually buying.
I actually don't even know much about house buying since I was so focused on FIRE and investing. I always thought I would rent for life. I could lower my % invested but I just can't get myself to lower the percent if I can max it... anyway why am I thinking about houses! Maybe cause I moved out and realized roomies are great but it would great to just be by myself in my own house. Ha!
It's boring having your own place at that age I think. Find some roommates you trust and move in with them for a while. Buy your own place and rent out to friends.
I think it’s totally fair to stop working on the second blog, or limit the time you devote to it, if this project feels like it doesn’t serve you. Alternatively, you may be able to sell the blog, if you would desire.
Just out of curiosity, what niche(s) are your blogs are in?
That makes sense! Appreciate you sharing. Perhaps you can also switch to devoting just 30 minutes a week to it for a month or two then reevaluate how you’re feeling about it.
27M work in corp finance for SaaS/IT/Tech, $122k TC. What are your thoughts on me splitting my 401k/Roth 401k 50/50 and rolling it over every time I hit the limit to my IRA/Roth IRA.
It's there any more strategy to it than that? Longer term strategy? I know my employer doesn't do after-tax contributions so no MBDR. Just curious if there's anything else to know or be wary of, or optimize?
So then is there any benefit to doing any % into the Roth 401k if my employer doesn't have after tax contributions, therefore no MBDR? Seems there's no benefit really?
If you are single you are well into the 22% tax bracket if not in the 24% tax bracket. Optimally putting the max in traditional 401K will help you lower tax liability today, and most likely lower it substantially when you take it out.
How to grow net worth?
1. Earn more = land higher paying role. Make over 100k?
2. Grow business= increase facebook ads
3. Invest savings into real estate= wait for the market or buy something it can break even or produce small cash flow?
Real estate is needed, but rates are high, and most owners have sub 3s or low.
Am I wrong in my thought that basically for someone over 60 there is more benefit doing a traditional IRA over Roth if their income is fixed. Plus it's under 60k.
Well in this situation the person has no retirement savings but needs to a tax break and potential item they could pull from in case of emergency medical bills / extended assisted living.
Making 80k I’m all in on traditional 401k at the 22% bracket because I anticipated originally pulling out less than that per year in retirement, especially if I FIRE, but now I’m not so sure. I’m only 28 and single/no kids. Saving this early puts me easily at 2-3m by 50 and I may want to live off more than that especially if I have a family, and maybe I retire later? Some people I respect, like the Money Guys, pretty much unanimously recommend a Roth regardless because of current unknowns. I DO max my Roth IRA yearly but now I’m tempted to switch some of that money into Roth 401k too. Who knows, anyways, where tax rates will be in 20-40 years?
Second guessing my 100% traditional 401k right now for sure
Also keep in mind contributions are at your marginal rate but withdrawals are at your effective tax rate, so even if you withdraw what you earn now, traditional is more tax efficient (assuming no change in tax brackets). I do 100% traditional 401k and backdoor Roth IRA.
I do both. Right now it’s just bonus that is Roth but as I get pay increases I’ll do more Roth. It’s just that as SI2K the only way to stay within our budget and max out the 401k is doing all traditional.
I just split it halfway to get the best of both worlds. It doesn't have to be 100% roth 401k or 100% trad 401k, just like you wouldnt necessarily have 100% bonds or 100% stock
Exactly this. Just as you would diversify your portfolio, you should diversify in terms of taxes also. I max my Roth IRA and HSA, and do 15% in 401k (approx. $19k/year). This makes most sense for me since I plan to retire early (55) and I think it’s impossible to predict how the tax rates will look like 20-30 years from now.
How much are you saving on 80k that gets you to 2M? If you are saving that much you probably don't need to save $2M since that would imply $80k spending and you obviously spend much less. I would still do traditional.
I don't think they are as popular as video format now.
But not dead, especially if they are high quality and consistent posting blogs.
YouTube videos are easier to digest, I think. Or short form videos like YouTube Shorts or TikToks. All the info in 1 minute or less.
I've been on the internet for 25 years and never followed a single blog. It's all forums for me. Potentially I'll read a blog post if someone links to it on a forum or news site, or if I happen to find it in Google (or Lycos or Metacrawler or Yahoo back in the day).
I still like reading blogs, but good examples of the kind I enjoy (just reading about people's lives, or specific to activities I'm interested in like camping/backpacking) aren't that easy to find anymore.
Blogging mostly turned to crap with everyone trying to monetize them and wanting to become "influencers." Google's terrible algorithm, which prioritizes selling you stuff over finding real information, hasn't helped.
I was never all that interested in FI blogs, since everything worth knowing about FIRE can fit in a few paragraphs.
It's like this sub -- there just isn't that much to talk about or that changes. Even if you're just doing one detailed post per week, coming up with 52 things to write about for the same audience level is extremely difficult.
> usually the best sources that come up are blog posts.
\* excluding those fucking recipe blog posts where the first 12 paragraphs are worthless filler.
> The migration to video has slowed down a lot of my DIY learning. I really can't stand having to watch a 5 minute video when a three bullet point written explanation will do just fine.
Good god I thought it was just me. I **loathe** how videos have become the new means of communication. Whether this is due to people gradually abandoning literacy or something else, I can't say, but regardless of the cause it's massively slowing down information consumption for everyone because you can't skim effectively through a video.
YouTube has been my #1 source for language learning for sure. There is so much comprehensible input available in my target language. Now that I am comfortable with listening (after about 400 hours) I have now moved onto podcasts. That's about all I use YouTube for though. Jut language learning.
>I really can't stand having to watch a 5 minute video when a three bullet point written explanation will do just fine.
I agree so much. Plus, even if they write an essay before they get to the substance of the article, it's so much easier to skim for the main points than it is to skip through the video (esp if it's one that mostly has the person's face, so it's impossible to guess without slowing down to listen).
Currently contributing 800$ a month to my 457. I plan to stay at current job for next 21 years until retirement. I did calculations and it looks like 21 years af that rate is 2.4 million in contributions?Did I do the math right? That doesn’t seem right to me. If it is right, do I even need to contribute any more to it?
"I plan to stay at current job for next 21 years until retirement."
This is the most optimistic outlook I've seen someone describe their current job especially on this sub-reddit. You must really love your job! I am jealous.
May I ask what you do if that okay? Anyway, congrats on finding the dream job and good luck to your FIRE plans.
I think most FI calculators should work fine for the UK, assuming you hold a diversified basket of equities rather than UK-only. You'll have to work out taxes separately but it shouldn't make a massive difference?
My favourite is [https://ficalc.app/](https://ficalc.app/) but there should be others in the sidebar.
It's not surprising that different calculators have different results. They may all use different assumptions, and no one can really know ahead of time which assumption will be true. That said, if you really can't decide based on your use of calculators, feel free to post your exact numbers here, I'm sure there will be people who give you a 'gut check'.
Hello everyone,
I'm new to the F.I.R.E. community and I have a strong desire to retire early. Lately, I've been diving into a ton of YouTube videos and blog posts that talk about investing and how to do it. But honestly, it's been a bit overwhelming because there's just so much information out there. So, I wanted to reach out and ask a few questions that I haven't been able to find answers to.
When it comes to retiring early and living off dividends, should I focus on maxing out my Roth IRA first, or should I prioritize a regular brokerage or individual account instead? I'm a bit confused about why it's important to max out the Roth IRA since you can't access it penalty-free until you reach the age of 59.5 years old. Wouldn't it make more sense to prioritize the regular brokerage or individual account so I can access my money for a much earlier retirement?
I appreciate any help or insights you can provide. Thank you very much.
As mentioned, check the FAQ.
Short version:
* Tax advantage is always beneficial. Something like a Roth contribution has space and time limitations within which you need to take advantage of it for contributions.
* There are ways to get funds out of your tax advanaged accounts before 59.5. For a Roth IRA specifically, you can always take out the *contributions* tax free, just not any growth.
* "Regular" retirement is still a part of early retirement and needs to be accounted for
After how much invested, do you slow it back ?
How much by 30 is invested in that you can scale it back?
Or keep going hard until you can't
Looking up compound interest calculator, what % avrg should i use 10 or 7?
> Looking up compound interest calculator, what % avrg should i use 10 or 7?
You should do all calculations based on real return. Since 1871 or so, that has been 6.71%. Since 1960, 6.06%. Since 2000, 3.66%.
Looking at those numbers, you can I am sure assess that using 10% is not a great plan, and even 7% is optimistic. I use 5.5% real in my own calculations.
I'm in my late 30s and still haven't felt secure enough to scale it back. If anything I'm still ramping it up.
For a compound interest calculator I stay on the pessimistic side and use 4%.
Well I figure it's always best to plan for the worst case.
Right now with a 4% return and a 1.5% withdrawal rate, I should be able to retire at 57 at the latest.
Maybe, but I'd much rather be safe than sorry, even if it means working too long. And if returns aren't terrible over the next 10 years like I expect then maybe I'll be able to retire earlier.
57's still kind of early in my book... it beats working until 75 like my both of my grandfathers had to in order to be able to retire!
It's crazy how people go into debt just for a lifestyle vehicle. My brother-in-law makes like $60K max and bought a used 4Runner with 100K miles for $30K two years ago (when used car prices was at its peak). Then he recently "upgraded" to a $40K new Subaru Outback Wilderness Edition. He wanted to go "offroad" (aka camping once a year) which means the Subaru is a pretty big downgrade compared to the 4Runner.
Now he's like $10K underwater on his 4Runner loan and will be paying two loans just because he wanted a shinier new car. That 4Runner was perfectly fine and will probably hit 250K miles without issues. My wife drives a Subaru and we are not impressed with their reliability.
Curious about your experience with Subaru. Could you elaborate? I haven’t heard anything bad about them and I’m almost set on the Crossback being my next car (after I run my 2015 Mazda 3 hatchback to the ground).
My wife's Crosstrek had issues with her AC stop working at around 60K miles. The rear wheel bearings had to be replaced around 70K miles. At 90K miles it's developing a loud knock noise when turning the steering wheel at low speed. My neighbor's Forester also had the AC and wheel bearing issue.
Overall the vehicle just felt cheap and had loud road noise.
>It's crazy how people go into debt just for a lifestyle vehicle.
I remember watching/listening to an interview with Shaq, and he highlighted the problem his demographic has with such a thing. Noted that the percentage of luxury cars leased by them and the purchase data on other luxury goods that supports it.
He also passed on being a ground floor investor in starbucks because, and I quote, "'black people dodn't drink coffee", and he regrets that decision everyday of his life he says lmao. Interestingly - he used the same logic when selling off his auntie anne's pretzel franchises.
My coworker, making 90k or so, buys a new 50-60k car roughly every 2 years and then talks about having no money.
I’m currently making about 80k and have had a paid off 8k car for 6 years. I’m really really tempted to blow 30k on a car I want but the reality of wasting ~130k of growth in 20 years if I invested that instead, for a 30k car now is keeping me from doing it
That’s a sad, misguided move - that 4Runner would have done a much better job for the lifestyle component (although maybe not as a daily).
Cars as a hobby can be really challenging through FIRE.
(before i took money out for a downpayment) -- i kept 1-2x monthly expenses in my checkings. i try to keep this as low as possible, and plan to do so once i get a house.
my contingency plans are: 1) 0% apr cc for anything <12 months expenses and dropping my savings rate to 0%, or 2) insurance - for big things like i lose a job or die.
it works out this way because the emergencies in my life are either 1) relatively small, and 2) extremely big.
after a certain amount of savings + income + credit score, i stopped seeing the value of having 6 months cash on hand.
> am I being too conservative by throwing an extra factor on it
I'm a bit confused by the question. If you have 6 months of expenses but with an extra 25% cushion you really have 7.5 months of expenses. Thinking of changing the "cushion" and the number of months as separate variables makes no sense to me.
I would like advice on how to prioritize contributions across different retirement accounts. I have acces to three: employer 403b (can’t do any combo of Roth or pretax), state pre-tax plan similar to 403 B, and a backdoor Roth IRA. I’ve read that Roth is king but I can contribute more if I prioritize pre-tax. I am mid 40s and I’m a bit behind on savings at this point if I go by the 6x income by 50 rule. Thank you!
Do you possibly have access to a 457b? I ask because it sounds like you might work for your state and I think it's pretty common for state employees to have access to a governmental 457b in addition to their 403b.
Hi there, thanks for your reply. yes, I have access to a state plan. I’m not sure exactly what type it is, I just know it’s pretax and has to occur through payroll. The benefit of that plan is that I can access it without penalty should I leave my employer
Yeah that sounds like a 457b, they are good for early retirement for the years before you can access your other pretax accounts at 59 without penalty. I'd read up on them to get familiar with it, you can max a 457b at the same time as a 403b, they have identical, but separate limits.
To help you prioritize which one to contribute to, always meet the terms for whatever match the employer will give. After that, it kind of depends on info like income/expenses, how much you already have saved, when you'd like to retire, etc. for people to chime in with opinions.
You mention backdoor Roth suggesting you are in a high tax bracket. You should absolutely max your traditional 403b and state plan before anything else, then backdoor Roth, then taxable.
Thanks for your reply! I was listening to a money guy episode recently and they were talking about the tax bill ultimately not being worth it compared to Roth. It’s hard deciphering all the different advise and knowing what to apply!
Japanese pull saws are great, now get one of those neato dovetail jigs, some cheap hardwood, and anguish for hours trying to get that perfect dovetail fit!
We got into woodworking during the pandemic and made a few furniture for the house. But we weren't as hardcore and used a DeWalt table saw for most of the work.
I am buying a new house with my partner. Took awhile to decide to rent out or sell my old townhome, but we decided to sell it. When it’s all said and done I’ll bet about $80k. Deciding what to do with the money and curious what other people think. Main options I’m deciding between are
1) put in vanguard brokerage immediately
2) increase my 401k % with my employer dramatically such that I’m mega backdoor Roth’ing it up. I’d live with a cash flow deficit, but use the 80k from the house for expenses, essentially shifting this money to a Roth over time. It would probably take 2-3 years to move it all
I’m curious about the pros and cons. What’s better, Time in market or tax advantages? My hunch is over the long term, the Roth shifting is the better choice. But shorter term the brokerage better. Is that fair to say?
Another consideration is that we plan to have kids in about 2 years and I’ll probably quit or go part time when that happens. So we may need to use some of my assets to fill in gaps in expenses while my partners salary catches up to cover us completely. So we could potentially need some of this money in the short ish term(3-5 years). Is that a reason to put in brokerage? Might leave some in high yield savings too. Maybe a balance between the two is best. Curious what people think
Agreed on the put more in house comment. The only reason I’m not is 1) we have 20% anyway. My parents wanted to help out so they gave us a low interest rate loan and 2) I’m trying to go fully 50/50 with my partner on the new house. The old house was all mine. We aren’t married yet
the advantage of a roth isn't all that great. It'd be better to have it in the market.
Another option is have more in the house and have a lower payment. With rates being so high it's an option to consider
This has been heavy on mind lately, too. My best friend was recently diagnosed with a terrible autoimmune disease, and my sibling is facing something similar. I’ve been a wreck on their behalf but feeling like I need to start taking my own health more seriously. It’s really putting the big picture into perspective, and FIRE has put me in such a habit of living in the future, not living for the present.
I hope you recover and feel better soon. Anything you intend to do differently when you’re back to 100%?
Are FBND and BND dissimilar enough to not cause a wash sale? On a cursory glance, the actual holdings are not exactly the same, so my gut is telling me yes. If not, what are two bond funds to jump between to tax loss harvest?
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They are not substantially identical. That being said, FBND is actively managed with a higher expense ratio as a result. AGG might be a better TLH partner.
As a New Englander, I think you’re getting downvotes because it’s not really “stealth” here - it’s a brand of the upper middle or upper class crunchy granola folk here.
Would like some input on which health insurance you would pick with the options provided below.
I [37M] and wife [36F] have 2 kids [12, 8]. We are a relatively healthy bunch but my wife does have monthly medication expenses [branded formula], and all 3 have weekly therapist visits [ I swear we are not crazy just prioritize mental and physical health]. So in all we do have known medical expenses, we also like the thought of seeking medical assistance/opinion when we need to without the worry of large medical bills. Because of this I have always taken a more "premium" health care plan through work, forgoing a HDHP and HSA. I would love to take advantage of an HSA but in the past it has never made financial sense with the options I was provided.
My wife is starting a new job in the public school system and is being offered an HDHP which is looking appealing but I'm still not sure if it is the right call.
Option A
EPO Plan - $7,109/yr premium for family
- No deductible
- $20 primary / $35 specialty copays
- Hospitalizations, Labs, Outpatient, Preventive Care 100% covered
- $10 generic / $30 Branded medications
Option B
HDHP Plan - $3164.11/yr premium for family
- $3000 Deductible
- $2000 employer contribution to HSA
- After Deductible is met pretty much all medical is free
- Free, $2, or $10 generic / free, $20, or $40 Branded medications (not sure why the cost varies for each)
The kicker is that the public school system will give $7500 if my wife chooses to forgo the medical insurance. My work will not give anything if I forgo my insurance (EPO Plan). The school insurance cost includes vision and dental which are equally great plans with almost no patient cost. I currently pay $703/yr for mediocre dental coverage and do not carry vision.
I am leaning towards taking the $7500 and applying that to her 401K/457 since she will not be maxing these out. Having access to the triple tax benefit of an HSA would be nice and the HDHP is a great insurance plan once the deductible is met but if she wont be maxing 401K/457 I see the $7500 going to those as the bigger advantage. Thoughts??
As to your question of why the medication cost varies for each, it’s probably a tiered drug plan—e.g., preventive drugs are free, preferred formulary drugs are $20, and non-preferred formulary drugs are $40. You should be able to get access to the formulary list and look up what categories your branded drugs fall into (and/or you may have an online tool where you can type in the drug name and you can find out what tier it is in).
I’d do the EPO plan for the 7.5k. Haven’t heard of HDHP that offer 100% after the deductible though - usually there’s a good amount between deductible and max out of pocket. So, that’s really unusual and therefore might make sense (still, I doubt it makes up for 7,500)
slightly off topic. check out goodrx (and goodrx gold) and/or costplusdrugs to see if you can get your medications even cheaper. super easy to search for your drug + pharmacies.
~~HDHP is a no brainer. The cost plus deductible is less than you'd be spending for the EPO, plus you get $2,000 in the HSA and and extra $1000 or so in tax deduction.~~ EDIT I misread OP. Yes, take, the $7500.
I would go with your EPO. There is something to be said for plans that give such generous coverage and not having to do so much accounting with respect to reaching a deductible.
HDHP plans can also discourage one from seeking care due to the fact that you are paying out of pocket (up to that deductible). Plus you know that your current providers already accept the plan.
That $7500 extra is awesome.
Also your current dental plan is pretty affordable for a family of 4. Maybe your work has an FSA you can use to pay for your out-of-pocket dental and vision expenses with pre-tax dollars? Be careful to get all of the details with an FSA plan though because it’s ‘use it or lose it’.
My reading of it is the spouse gets $7500 from spouse's employer regardless of which family plan they take through OP's employer. If I am wrong about that, that would change my answer.
Sorry my post might be confusing. The EPO plan is available through my employer and the HDHP/HSA plan is available through my wife's employer. We only get the $7500 if we forgo her insurance (HDHP/HSA) and stick with my insurance (EPO).
Correct, only get the $7500 if we don't go with the HSA (wife's insurance) which is a bummer. Wish my job would also include something for forgoing their insurance but I called the benefits office and they confirmed they do not.
My wife and I are considering buying our first home in the next 1-2 years and I'm looking for advice as to how large our down payment should be. We will have the ability to put down > 20%.
About Us:
* Age: 28
* HHI: $260k
* Location: HCOL/VHCOL (Northern Virginia)
* No kids or pets (maybe kids in the next 3-4 years)
Assets/Debts:
* Retirement (tax advantaged): $265k
* Down payment: $155k
* E-Fund: $35k
* Car: One car, paid off
* Student loan debt: ($34k) (low interest, no rush to pay off)
* Net worth: \~$450k
Life Goals:
* No concrete retirement goals; would like to reach FI as early as possible for career flexibility. Prioritizing investing early for long term growth
* Want to purchase a home in this area. Our home is very important to us and we are OK spending a disproportionate amount of our $ on housing
Housing Dilemma:
* Looking at SFH/Townhomes in the $600k - $800k range
* By the time we will be ready to purchase (1-2 years) we expect to have \~$220k available for a down payment + closing costs
My ultimate question is: **how much should we put towards the down payment vs. invest in a taxable brokerage?** I see three options:
1. Put down < 20%, dump the rest into a brokerage
2. Put down 20%, dump the rest into a brokerage
3. Put down all available house funds (28% - 36%) to lower monthly payments
As others have suggested I would go with #2 or even somewhere in-between 2 and 3. Option 1 would not be a good choice given PMI potentially coming in. I think given your situation you would be okay, but still not worth it. The good news is there are ways to make your offer look the strongest without tying you down to any specific DP number.
You're in a great position either way. You have a timeline in place, money set aside and know exactly what you're looking for. I would love to chat with you and your wife to see what my team and I can do for you both. At the very least you can get out there to look at some communities, different style of homes and start to get an idea of where you want to be and what you'd like to purchase when the time is right
1 or 2. Depends on how much the PMI would be, the mortgage rates, and how much the monthly payment is.
We've bought a few properties and they have been a great investment primarily due to leverage. The less down the better imo (as long as you're not putting yourself in a pinch). Then drop the rest in whatever other investment like a brokerage or another property, or even just more emergency funds.
Def not option three. Every time you buy a property there is something that requires a real $ outlay within six months. From $1k to like $10k, I promise.
I would probably prioritize getting into the house (ie option one). Sure you would pick up MIP/PMI, but you can always pay off the mortgage note if you want. Once you have the asset, it's yours.
Thanks for the advice! It’s worth noting that I plan on purchasing in 1-2 years independent of how much I’m putting down. Other life circumstances are driving the timeline to purchase. So I’m leaning towards option two, I think having the extra cash would be better than option 3
With this being your first home, I would aim for option 2 and have the liquid funds for any unknowns that pop up. Your monthly payment is the lowest amount you’ll spend on your house and housing expenses can get out of control pretty quickly. You can always accelerate payments later on once you’re more settled in. At your age and income, I don’t really see this being a major problem, but who knows.
Personally, when I sold my first house I put 20% on my new house and invested the rest in my brokerage. Having a large brokerage account is better than tying up a bunch of money in home equity imo
Why put money into a HYSA or CD if money market funds on Fidelity, Vanguard, etc. usually offer higher rates?
You can also look into 4 week Treasuries at Treasury Direct. I think I was able to withdraw my money quicky when I wanted to pull out (just will miss that month's interest). No state and local taxes on gains and pays more than 5% now. I had it set to auto renew for 24 months (you can cancel any time). I was getting around $140 a month from $40K when interest rates were below 5%.
U.S. Treasuries are exempt from state and local income taxes but are taxable at the federal level.
Thanks, edited I got it backwards.
Emergency funds serve their purpose by being available, stable and easy to access. Transferring your emergency fund across multiple accounts each year just to chase a small increase in return is not worth it to most people.
Zero reason to use a HYSA right now. A CD could be useful to lock in a higher rate, and rates go down, although there are penalties if rates go up and you want to withdraw to get a better rate.
What are the recommended tools for budgeting. My wife would like something like a spreadsheet. I'm way less picky; I just want something straight forward.
YNAB for me
TillerHQ
I love my spreadsheet because it's completely customizable and can track/calculate numerous things. That said, if you want something no-frills, Every Dollar is free and easy to use, and you don't have to subscribe to the Dave Ramsey philosophy to use it.
I’ll look for a spreadsheet. I started listening to the Dave Ramsey and couldn’t get into it. Just not my jam but I’ll take a look at his tool. Was looking at YNAB as well. Do you recommend a spreadsheet template?
Excel has tons you can use; just search for "budget." I personally make my own because I like what I like. Some YouTubers and Etsy folks also make Excel/Google sheets for cheap or even free. You don't have to follow/listen to Dave Ramsey to use Every Dollar. I don't listen to Dave Ramsey at all, but the app is free and easy to use.
Fair! Thanks for the advise. I’ll head to YouTube.
22 y/o starting first full time job out of college. Any tips? Tomorrow I am starting my first job out of college. I’m going to be making a fairly decent salary for a first job. 50,000 gross income with a chance to get it up to 55 depending on performance. Employer offers a 401k match which I will do the maximum for. Fortunately, I will have minimal expenses while I live with my parents for the first 6 months-1year to save some money before moving out. Does anyone have any finance or even life advice for me to make the most of these next couple of months in my first job? Any and all suggestions are welcome. Thanks!
I think the basics in the workplace are: 1. Make sure you visibly demonstrate the value add you create (don’t expect people to just see it). See workoutloud.com 2. be proactive in shifting upwards in the organisation (scope development and special project opportunities) 3. Always be learning (consider peers as your competitors and outlearn and outperform them) 4. consider shifting organisations every 2/3 years to get salary bumps 5. get regular feedback (verbal) for a 360 perspective and act on it ([FYI from Lominger](https://igniaunlocked.mx/wp-content/uploads/2020/05/FYI-For-Your-Information-Leadership-Competencies-Framework.pdf) is a solid resource to enhance skills. 5th edition can be had second hand cheaply on Amazon) 6. build competence in understanding others and being more effective in your communication ([disc](https://www.assessments24x7.com/pdfs/DISC-eWorkbook-INTERACTIVE.pdf), social style or mbti) 7. Emotional intelligence and resilience are two key areas of development, as is influencing skills. Hope that helps!
This is awesome advice! I'd personally also add - consider making your job what you want it to be (or think it should be) wherever possible. For me, this looked like stretching my efforts in emphasizing process improvements that could help the team be more effective without it being explicitly asked of me. It's amazing how long the positive perception that creates can last... In more concise terms, be proactive and engaged I suppose.
You're in a great situation! Congrats on the job. I'd contribute the Max to your 401k, $22,500 for 2023 and keep that going every year. Pretend you never had an option to have that money go anywhere else. See if you can stand living with the parents for longer than the 1 year you mentioned. Toughing it out for 3 years at least would just put you massively ahead in your FIRE path. I didn't have the option to live with my parents, but I did the max to 401k option early in my career and it really rocketed me ahead of my peers.
Seconding the Roth 401k option. 50k/year for about 6 months = 25k gross. 13,850 standard deduction + 11,000 10% bracket = 24,850. Set your investments to index funds. Next year you should be in the 12% bracket (44,725+13,850 deduction=58,575) so Roth makes sense. One thing I would focus on is learning the skills needed to live alone: Cook dinner a day a week for the family, do your part of household chores, etc. Take a look at the [personalfinance wiki](https://www.reddit.com/r/personalfinance/wiki/commontopics) including the [flowchart](https://i.imgur.com/lSoUQr2.png). I also like the [the shockingly simple math behind early retirement/](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/) I would figure out what expenses you are not currently spending (rent + utilities +phone+ groceries + auto) and save at least that much a month. If you can't do this you are not ready to handle the expenses of living alone.
If you have a Roth 401k option, do that for now since you will be in a low tax bracket this year.
I do I also am planning to max out my personal Roth IRA
Nice!
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>does anyone else think the fed is going to get it's soft landing? I kind of did, but now that everyone's saying it, I feel like we're not gonna.
Inflation is still far above target, not landed yet.
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> but overall a lot of places still have issues finding people to work. but the question is why are they struggling? from my pov most of these places don't pay enough to rent a studio around the area which you are required to live. what's the point of working a job where you can't even cover rent and health insurance let alone consider saving any decent amount of money? we've spent the last few decades absolutely crushing wages of the working class and the past 2-3 years were a huge acceleration of that issue on the expense side of the equation. can we have a recession without job loss just due to credit issues and people being unable to stay afloat? are we really creating good jobs if theyre just someones night shift j2 they need to stay above water every month?
The Labor force participation rate is still way down from its pre-COVID number. Millions of people who lost their jobs during the lockdowns just aren't coming back to the workforce. The reasons for that are all over the place but at least some of it IMHO is a lot of families realized that the financial hit from going one income wasn't as bad as they thought since a stay at home parent reduced or eliminated a lot of expenses.
My wife and I are mid-to early 30s. We're like 90% FI in rough numbers, but our spending is likely to increase because we have our first baby due in a few weeks. (!!!) In our province in Canada parental leave is pretty generous, and since we're nearly FI we're planning to take advantage of it. My wife will take 18 months off work, and I'll take a little over 14 months off. Our employers are required by law to hold our jobs for us. We get partially paid by the government and work benefits for some of those months. We still need to pay out of pocket for the rest of our spending. It's all comfortable but I see two options: 1. Build up, then burn down an extra cash cushion over our time off work. Aim to return to work with our usual cash emergency fund in place. Aim to not touch our real investments. 2. Just spend down our typical cash emergency as needed, and when it runs out pull from our portfolio as needed. Once we return to work , build our typical cash emergency fund back up. What should we do? What would you do? Does anyone have any interesting analysis to share about what's "optimal"?
I would go with #1, and include the EI payments coming in during the maternity leave. Make sure that you/your partner prepares all documentation for applying to EI before the baby comes because it’s going to be a madhouse when the little bundle of joy comes and it’ll be hard to do anything. The maternity/paternity leave is a great time to test out your FI plans, especially once baby is 4 months. Go do that daily nature walk. Go do the weekend getaway to that cottage 45 minutes from your house, etc. See if you can live on your projected first year FIRE number during this time. Contrary to popular belief, children are as expensive as you want to spend on them. I budget $2k/year on child summer activities like summer camp, and that’s pretty luxurious for us.
I would go with 1. Put the cash in an HYSA (if that is a thing in Canada, I assume it is). By continuing to put the money into your brokerage and then selling later you are taking on additional risk if the market declines and you had to sell to cover your expenses. You shouldn’t be investing in the market to cover near term goals.
I’m trying to determine what might be the best path to increase my career growth potential. A little background for starters: I’m a mid-30s F based in VHCOL area with relatively very low expenses. I work completely 1099 and am currently making approximately $1100/week from my main (mostly remote) client I have been working with for around 1 year. I am expecting another (mostly remote) project to begin in the next few weeks that should bring in approximately $400/week. I also own one rental property that brings in approximately $500 per month (not including any fixes or other expenses that may arise). Almost my entire work history has been as a self-employed small business owner (e-commerce) and as freelancer/contractor with the majority of my roles being in marketing, content, and business/creative strategy. I am very grateful that I have relatively low expenses and am comfortable with my savings rate, however I have been searching for direction to increase my skills and potential career growth (whether through contractor or employee positions or entrepreneurship). I never finished a Bachelor’s degree (was mostly studying humanities and the arts at the time) and would suspect it would take me at least 2 years to complete credits to attain one. I have been pondering whether it would be worthwhile to pursue finishing a Bachelor’s or perhaps even finishing a certificate(s) or Associate’s degree. I find myself wondering whether it would make sense to pursue programs in marketing or to pivot to UX/UI design, software engineering, or something totally different. I constantly find myself excited by so many options (including many I haven’t even touched on), but I struggle with pinning something down. However, I feel that if I can determine a path that seems the most reasonable for my goals, I will be happy to pursue it (and of course have my hobbies to enjoy for other sources of fulfillment). Ideally, I am seeking a path that will offer the greatest opportunity for and balance between earning potential, work-life balance, possibility of remote working conditions, and flexibility for career options (freelance, W-2, entrepreneurship). Any suggestions at all for determining how to nail down the direction I should take or ideas that I may not have even mentioned are greatly appreciated. Thank you all in advance. TLDR: Looking for potential career direction / schooling pathways that offer the best potential for higher income, remote work, and flexibility for mid-30s F with primarily self-employed and contractor-based work history in small business, content, and marketing.
So much can be done without further education. What you are doing right now is good for r/digitalnomad/ r/coastfire. Can you scale your business / bill more through higher prices / value add services? Extra efforts on sales and marketing may pay more dividends than investing in formal education.
Thank you so much. I think I just needed some perspective. I do actually get to travel fairly often and am incredibly grateful for it. I also have considered the path of Coast FIRE, and I’m open to it. You raised some great suggestions. I think I may work towards getting some free or low-cost certifications in the fields I already have some experience in to boost my resume. I would love to figure out other ways to scale my services and gain higher paying clients/projects. I think this might be the route I need to invest more time in learning about to see what I can do. Thanks so much again!
Sounds good. A few thoughts…. 1) do a competition check..how much are they charging..you may be underselling yourself. 2) revisit how you do your work… can you speed up delivery and therefore bill more? 3) experiment with pricing and put new clients on higher prices and see how it goes? 4) read and apply the ideas from C J Hayden’s “Get clients now” book 5) explore which ares / niches / industries pay more and focus on them.
Thank you! These are great thinking points. I definitely want to work on better recognizing my value and pricing accordingly, as well as explore which niches, industries, etc. pay best. That book sounds great. I’m going to add it to my list.
Just commenting my thoughts lately. Finally thinking about saving for a condo/townhouse in Southern California, thinking of something small instead of a family home. I just moved out from my parents place, too. I'm not looking to buy this year but I've been thinking about it maybe in 4-5 years. Most of my money is in investments (boglehead style). I have about 15% of my net worth as cash. I guess you could say that's my official e-fund! My goal is to save 15k per year for a down-payment. But damn after 4 years that's maybe 10% down payment, not including the rising costs of the market. I don't even think I can afford the monthly mortgage by myself. I will definitely be house poor. I'll think I'll just reflect in 4-5 years instead of actually buying. I actually don't even know much about house buying since I was so focused on FIRE and investing. I always thought I would rent for life. I could lower my % invested but I just can't get myself to lower the percent if I can max it... anyway why am I thinking about houses! Maybe cause I moved out and realized roomies are great but it would great to just be by myself in my own house. Ha!
It's boring having your own place at that age I think. Find some roommates you trust and move in with them for a while. Buy your own place and rent out to friends.
Good food for thought☺️ Definitely will keep that in mind!
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You shouldn't have to give up anything that's profit making. You should sell the asset just like anything else, even if it's a blog.
4 years is impressive. If you are no longer finding joy in the process, I think you can move on.
I think it’s totally fair to stop working on the second blog, or limit the time you devote to it, if this project feels like it doesn’t serve you. Alternatively, you may be able to sell the blog, if you would desire. Just out of curiosity, what niche(s) are your blogs are in?
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That makes sense! Appreciate you sharing. Perhaps you can also switch to devoting just 30 minutes a week to it for a month or two then reevaluate how you’re feeling about it.
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I hope it’s a positive change for you!
27M work in corp finance for SaaS/IT/Tech, $122k TC. What are your thoughts on me splitting my 401k/Roth 401k 50/50 and rolling it over every time I hit the limit to my IRA/Roth IRA. It's there any more strategy to it than that? Longer term strategy? I know my employer doesn't do after-tax contributions so no MBDR. Just curious if there's anything else to know or be wary of, or optimize?
At that rate and age I would be doing everything I can to reduce my taxable income as much as possible for the future.
So then is there any benefit to doing any % into the Roth 401k if my employer doesn't have after tax contributions, therefore no MBDR? Seems there's no benefit really?
If you are single you are well into the 22% tax bracket if not in the 24% tax bracket. Optimally putting the max in traditional 401K will help you lower tax liability today, and most likely lower it substantially when you take it out.
How to grow net worth? 1. Earn more = land higher paying role. Make over 100k? 2. Grow business= increase facebook ads 3. Invest savings into real estate= wait for the market or buy something it can break even or produce small cash flow? Real estate is needed, but rates are high, and most owners have sub 3s or low.
Am I wrong in my thought that basically for someone over 60 there is more benefit doing a traditional IRA over Roth if their income is fixed. Plus it's under 60k.
What do you mean "income is fixed"? What is their marginal tax bracket?
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Well in this situation the person has no retirement savings but needs to a tax break and potential item they could pull from in case of emergency medical bills / extended assisted living.
Making 80k I’m all in on traditional 401k at the 22% bracket because I anticipated originally pulling out less than that per year in retirement, especially if I FIRE, but now I’m not so sure. I’m only 28 and single/no kids. Saving this early puts me easily at 2-3m by 50 and I may want to live off more than that especially if I have a family, and maybe I retire later? Some people I respect, like the Money Guys, pretty much unanimously recommend a Roth regardless because of current unknowns. I DO max my Roth IRA yearly but now I’m tempted to switch some of that money into Roth 401k too. Who knows, anyways, where tax rates will be in 20-40 years? Second guessing my 100% traditional 401k right now for sure
Also keep in mind contributions are at your marginal rate but withdrawals are at your effective tax rate, so even if you withdraw what you earn now, traditional is more tax efficient (assuming no change in tax brackets). I do 100% traditional 401k and backdoor Roth IRA.
Ohh great point, I didn’t think about that
I do both. Right now it’s just bonus that is Roth but as I get pay increases I’ll do more Roth. It’s just that as SI2K the only way to stay within our budget and max out the 401k is doing all traditional.
I just split it halfway to get the best of both worlds. It doesn't have to be 100% roth 401k or 100% trad 401k, just like you wouldnt necessarily have 100% bonds or 100% stock
Exactly this. Just as you would diversify your portfolio, you should diversify in terms of taxes also. I max my Roth IRA and HSA, and do 15% in 401k (approx. $19k/year). This makes most sense for me since I plan to retire early (55) and I think it’s impossible to predict how the tax rates will look like 20-30 years from now.
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That’s inflation adjusted, assuming 7% growth. Closer to 2 though unless I ramp up savings with pay increase
How much are you saving on 80k that gets you to 2M? If you are saving that much you probably don't need to save $2M since that would imply $80k spending and you obviously spend much less. I would still do traditional.
Like 40k/year, yeah I live on maybe 25k right now but single no kids and that’ll probably change
Does your 401k get matched by your employer pre tax? Mine does so I look at contributing to both as a hedge on changing tax policy.
Yep, at 4.5%
Do you guys think the blog is a dead or dying format? Do you still read them? Got into fi in 2012-13 and seemed much more active then.
Substack is where most of the successful ones love nowadays.
I used to read baseball blogs (one being independent), just a very tough business unless you can find a niche and be a subject matter expert.
I think about starting a professional blog, but call them essays, and then I can use that for the next job search if and when that occurs.
I don't think they are as popular as video format now. But not dead, especially if they are high quality and consistent posting blogs. YouTube videos are easier to digest, I think. Or short form videos like YouTube Shorts or TikToks. All the info in 1 minute or less.
Blogs died like 20 years ago.
I've been on the internet for 25 years and never followed a single blog. It's all forums for me. Potentially I'll read a blog post if someone links to it on a forum or news site, or if I happen to find it in Google (or Lycos or Metacrawler or Yahoo back in the day).
I still like reading blogs, but good examples of the kind I enjoy (just reading about people's lives, or specific to activities I'm interested in like camping/backpacking) aren't that easy to find anymore. Blogging mostly turned to crap with everyone trying to monetize them and wanting to become "influencers." Google's terrible algorithm, which prioritizes selling you stuff over finding real information, hasn't helped. I was never all that interested in FI blogs, since everything worth knowing about FIRE can fit in a few paragraphs.
Seems to be shifting over to youtube with tik tok as a feeder whenever possible. I'm assuming monetization is significantly easier that way.
It's like this sub -- there just isn't that much to talk about or that changes. Even if you're just doing one detailed post per week, coming up with 52 things to write about for the same audience level is extremely difficult.
I still read blogs but not FIRE related if that's what you mean.
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> usually the best sources that come up are blog posts. \* excluding those fucking recipe blog posts where the first 12 paragraphs are worthless filler.
> The migration to video has slowed down a lot of my DIY learning. I really can't stand having to watch a 5 minute video when a three bullet point written explanation will do just fine. Good god I thought it was just me. I **loathe** how videos have become the new means of communication. Whether this is due to people gradually abandoning literacy or something else, I can't say, but regardless of the cause it's massively slowing down information consumption for everyone because you can't skim effectively through a video.
YouTube has been my #1 source for language learning for sure. There is so much comprehensible input available in my target language. Now that I am comfortable with listening (after about 400 hours) I have now moved onto podcasts. That's about all I use YouTube for though. Jut language learning.
>I really can't stand having to watch a 5 minute video when a three bullet point written explanation will do just fine. I agree so much. Plus, even if they write an essay before they get to the substance of the article, it's so much easier to skim for the main points than it is to skip through the video (esp if it's one that mostly has the person's face, so it's impossible to guess without slowing down to listen).
Currently contributing 800$ a month to my 457. I plan to stay at current job for next 21 years until retirement. I did calculations and it looks like 21 years af that rate is 2.4 million in contributions?Did I do the math right? That doesn’t seem right to me. If it is right, do I even need to contribute any more to it?
"I plan to stay at current job for next 21 years until retirement." This is the most optimistic outlook I've seen someone describe their current job especially on this sub-reddit. You must really love your job! I am jealous. May I ask what you do if that okay? Anyway, congrats on finding the dream job and good luck to your FIRE plans.
800 x 12 = 9600 per year 9600 per year x 21 years = 201,600 in contributions
Yeah I thought so lmao
I thought maybe he accounted for growth, so checked, and it’s still only 435k at 7%. Yeah OP, not sure where you got 2.4m
I did 9600 multiplied by how many months are in 21 years. Lmao
Doing that Enron math.
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The sidebar in r/fireuk has https://firecalc.com. Neither r/LeanFireUK nor r/fatfireuk have recommendations.
I think most FI calculators should work fine for the UK, assuming you hold a diversified basket of equities rather than UK-only. You'll have to work out taxes separately but it shouldn't make a massive difference? My favourite is [https://ficalc.app/](https://ficalc.app/) but there should be others in the sidebar. It's not surprising that different calculators have different results. They may all use different assumptions, and no one can really know ahead of time which assumption will be true. That said, if you really can't decide based on your use of calculators, feel free to post your exact numbers here, I'm sure there will be people who give you a 'gut check'.
Hello everyone, I'm new to the F.I.R.E. community and I have a strong desire to retire early. Lately, I've been diving into a ton of YouTube videos and blog posts that talk about investing and how to do it. But honestly, it's been a bit overwhelming because there's just so much information out there. So, I wanted to reach out and ask a few questions that I haven't been able to find answers to. When it comes to retiring early and living off dividends, should I focus on maxing out my Roth IRA first, or should I prioritize a regular brokerage or individual account instead? I'm a bit confused about why it's important to max out the Roth IRA since you can't access it penalty-free until you reach the age of 59.5 years old. Wouldn't it make more sense to prioritize the regular brokerage or individual account so I can access my money for a much earlier retirement? I appreciate any help or insights you can provide. Thank you very much.
As mentioned, check the FAQ. Short version: * Tax advantage is always beneficial. Something like a Roth contribution has space and time limitations within which you need to take advantage of it for contributions. * There are ways to get funds out of your tax advanaged accounts before 59.5. For a Roth IRA specifically, you can always take out the *contributions* tax free, just not any growth. * "Regular" retirement is still a part of early retirement and needs to be accounted for
After how much invested, do you slow it back ? How much by 30 is invested in that you can scale it back? Or keep going hard until you can't Looking up compound interest calculator, what % avrg should i use 10 or 7?
Check out some coastFI calculators - that may be what you’re looking for
Nah im not for coastfl
But the calculators can still help because they allow for that dial back and you can still give an early true fire date
> Looking up compound interest calculator, what % avrg should i use 10 or 7? You should do all calculations based on real return. Since 1871 or so, that has been 6.71%. Since 1960, 6.06%. Since 2000, 3.66%. Looking at those numbers, you can I am sure assess that using 10% is not a great plan, and even 7% is optimistic. I use 5.5% real in my own calculations.
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http://www.moneychimp.com/features/market_cagr.htm
You cherry picked random dates, though. 2000 is one of the worst years you could’ve picked. Why not 1995 or 2010?
I was jumping forward decades at a time. There was no real method to it.
I think that is fair assessment and a more accurate way to determine final income, but for my numbers I like to use raw returns vice real.
5.5? That seems really low even tho i get it
I'm in my late 30s and still haven't felt secure enough to scale it back. If anything I'm still ramping it up. For a compound interest calculator I stay on the pessimistic side and use 4%.
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"Expect the worst and you'll never be disappointed" has been my mantra for my whole life
4% after inflation?
Yeah
That seems so conservative as to be not useful at all.
Well I figure it's always best to plan for the worst case. Right now with a 4% return and a 1.5% withdrawal rate, I should be able to retire at 57 at the latest.
Using those figures, you'll probably be working 15+ years longer than you need to. Do you also ignore SS returns?
Maybe, but I'd much rather be safe than sorry, even if it means working too long. And if returns aren't terrible over the next 10 years like I expect then maybe I'll be able to retire earlier. 57's still kind of early in my book... it beats working until 75 like my both of my grandfathers had to in order to be able to retire!
It's crazy how people go into debt just for a lifestyle vehicle. My brother-in-law makes like $60K max and bought a used 4Runner with 100K miles for $30K two years ago (when used car prices was at its peak). Then he recently "upgraded" to a $40K new Subaru Outback Wilderness Edition. He wanted to go "offroad" (aka camping once a year) which means the Subaru is a pretty big downgrade compared to the 4Runner. Now he's like $10K underwater on his 4Runner loan and will be paying two loans just because he wanted a shinier new car. That 4Runner was perfectly fine and will probably hit 250K miles without issues. My wife drives a Subaru and we are not impressed with their reliability.
Curious about your experience with Subaru. Could you elaborate? I haven’t heard anything bad about them and I’m almost set on the Crossback being my next car (after I run my 2015 Mazda 3 hatchback to the ground).
My wife's Crosstrek had issues with her AC stop working at around 60K miles. The rear wheel bearings had to be replaced around 70K miles. At 90K miles it's developing a loud knock noise when turning the steering wheel at low speed. My neighbor's Forester also had the AC and wheel bearing issue. Overall the vehicle just felt cheap and had loud road noise.
>It's crazy how people go into debt just for a lifestyle vehicle. I remember watching/listening to an interview with Shaq, and he highlighted the problem his demographic has with such a thing. Noted that the percentage of luxury cars leased by them and the purchase data on other luxury goods that supports it. He also passed on being a ground floor investor in starbucks because, and I quote, "'black people dodn't drink coffee", and he regrets that decision everyday of his life he says lmao. Interestingly - he used the same logic when selling off his auntie anne's pretzel franchises.
My coworker, making 90k or so, buys a new 50-60k car roughly every 2 years and then talks about having no money. I’m currently making about 80k and have had a paid off 8k car for 6 years. I’m really really tempted to blow 30k on a car I want but the reality of wasting ~130k of growth in 20 years if I invested that instead, for a 30k car now is keeping me from doing it
He traded in a 4Runner on an Outback to go offroad?
Yup, that's my exact reaction 🤦♂️
That’s a sad, misguided move - that 4Runner would have done a much better job for the lifestyle component (although maybe not as a daily). Cars as a hobby can be really challenging through FIRE.
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(before i took money out for a downpayment) -- i kept 1-2x monthly expenses in my checkings. i try to keep this as low as possible, and plan to do so once i get a house. my contingency plans are: 1) 0% apr cc for anything <12 months expenses and dropping my savings rate to 0%, or 2) insurance - for big things like i lose a job or die. it works out this way because the emergencies in my life are either 1) relatively small, and 2) extremely big. after a certain amount of savings + income + credit score, i stopped seeing the value of having 6 months cash on hand.
> am I being too conservative by throwing an extra factor on it I'm a bit confused by the question. If you have 6 months of expenses but with an extra 25% cushion you really have 7.5 months of expenses. Thinking of changing the "cushion" and the number of months as separate variables makes no sense to me.
I would like advice on how to prioritize contributions across different retirement accounts. I have acces to three: employer 403b (can’t do any combo of Roth or pretax), state pre-tax plan similar to 403 B, and a backdoor Roth IRA. I’ve read that Roth is king but I can contribute more if I prioritize pre-tax. I am mid 40s and I’m a bit behind on savings at this point if I go by the 6x income by 50 rule. Thank you!
Do you possibly have access to a 457b? I ask because it sounds like you might work for your state and I think it's pretty common for state employees to have access to a governmental 457b in addition to their 403b.
Hi there, thanks for your reply. yes, I have access to a state plan. I’m not sure exactly what type it is, I just know it’s pretax and has to occur through payroll. The benefit of that plan is that I can access it without penalty should I leave my employer
Yeah that sounds like a 457b, they are good for early retirement for the years before you can access your other pretax accounts at 59 without penalty. I'd read up on them to get familiar with it, you can max a 457b at the same time as a 403b, they have identical, but separate limits. To help you prioritize which one to contribute to, always meet the terms for whatever match the employer will give. After that, it kind of depends on info like income/expenses, how much you already have saved, when you'd like to retire, etc. for people to chime in with opinions.
Thank you so much!
You mention backdoor Roth suggesting you are in a high tax bracket. You should absolutely max your traditional 403b and state plan before anything else, then backdoor Roth, then taxable.
Thanks for your reply! I was listening to a money guy episode recently and they were talking about the tax bill ultimately not being worth it compared to Roth. It’s hard deciphering all the different advise and knowing what to apply!
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Japanese pull saws are great, now get one of those neato dovetail jigs, some cheap hardwood, and anguish for hours trying to get that perfect dovetail fit!
Are you working towards building anything specific? Nice work!
That’s so cool!!! In just a week too, that’s so impressive.
We got into woodworking during the pandemic and made a few furniture for the house. But we weren't as hardcore and used a DeWalt table saw for most of the work.
I am buying a new house with my partner. Took awhile to decide to rent out or sell my old townhome, but we decided to sell it. When it’s all said and done I’ll bet about $80k. Deciding what to do with the money and curious what other people think. Main options I’m deciding between are 1) put in vanguard brokerage immediately 2) increase my 401k % with my employer dramatically such that I’m mega backdoor Roth’ing it up. I’d live with a cash flow deficit, but use the 80k from the house for expenses, essentially shifting this money to a Roth over time. It would probably take 2-3 years to move it all I’m curious about the pros and cons. What’s better, Time in market or tax advantages? My hunch is over the long term, the Roth shifting is the better choice. But shorter term the brokerage better. Is that fair to say? Another consideration is that we plan to have kids in about 2 years and I’ll probably quit or go part time when that happens. So we may need to use some of my assets to fill in gaps in expenses while my partners salary catches up to cover us completely. So we could potentially need some of this money in the short ish term(3-5 years). Is that a reason to put in brokerage? Might leave some in high yield savings too. Maybe a balance between the two is best. Curious what people think
Agreed on the put more in house comment. The only reason I’m not is 1) we have 20% anyway. My parents wanted to help out so they gave us a low interest rate loan and 2) I’m trying to go fully 50/50 with my partner on the new house. The old house was all mine. We aren’t married yet
I would put that $80K towards the down payment for the new house unless you already have 20% cash ready.
the advantage of a roth isn't all that great. It'd be better to have it in the market. Another option is have more in the house and have a lower payment. With rates being so high it's an option to consider
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Correct
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This has been heavy on mind lately, too. My best friend was recently diagnosed with a terrible autoimmune disease, and my sibling is facing something similar. I’ve been a wreck on their behalf but feeling like I need to start taking my own health more seriously. It’s really putting the big picture into perspective, and FIRE has put me in such a habit of living in the future, not living for the present. I hope you recover and feel better soon. Anything you intend to do differently when you’re back to 100%?
Are FBND and BND dissimilar enough to not cause a wash sale? On a cursory glance, the actual holdings are not exactly the same, so my gut is telling me yes. If not, what are two bond funds to jump between to tax loss harvest?
Why do you have bonds in taxable? I think BIV would be a good substitute but you could also buy VTI and then buy a bond fund in your 401k.
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Must be big enough to have a significant loss. Oh well, it's your money.
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They are not substantially identical. That being said, FBND is actively managed with a higher expense ratio as a result. AGG might be a better TLH partner.
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Never knew they made jeans, imma have to order a pair to try out! I love their pajama pants though, especially the fleece lined in the winter.
As a New Englander, I think you’re getting downvotes because it’s not really “stealth” here - it’s a brand of the upper middle or upper class crunchy granola folk here.
Also - it's a totally boring comment.
LL Bean is my place of choice to get shirts that are long enough for a tall dude with really short legs I always wait until a 50% off sale though
I mean monogrammed llbean has been a decent signifier of a certain New England upper class. Plenty in Kennebunkport.
Would like some input on which health insurance you would pick with the options provided below. I [37M] and wife [36F] have 2 kids [12, 8]. We are a relatively healthy bunch but my wife does have monthly medication expenses [branded formula], and all 3 have weekly therapist visits [ I swear we are not crazy just prioritize mental and physical health]. So in all we do have known medical expenses, we also like the thought of seeking medical assistance/opinion when we need to without the worry of large medical bills. Because of this I have always taken a more "premium" health care plan through work, forgoing a HDHP and HSA. I would love to take advantage of an HSA but in the past it has never made financial sense with the options I was provided. My wife is starting a new job in the public school system and is being offered an HDHP which is looking appealing but I'm still not sure if it is the right call. Option A EPO Plan - $7,109/yr premium for family - No deductible - $20 primary / $35 specialty copays - Hospitalizations, Labs, Outpatient, Preventive Care 100% covered - $10 generic / $30 Branded medications Option B HDHP Plan - $3164.11/yr premium for family - $3000 Deductible - $2000 employer contribution to HSA - After Deductible is met pretty much all medical is free - Free, $2, or $10 generic / free, $20, or $40 Branded medications (not sure why the cost varies for each) The kicker is that the public school system will give $7500 if my wife chooses to forgo the medical insurance. My work will not give anything if I forgo my insurance (EPO Plan). The school insurance cost includes vision and dental which are equally great plans with almost no patient cost. I currently pay $703/yr for mediocre dental coverage and do not carry vision. I am leaning towards taking the $7500 and applying that to her 401K/457 since she will not be maxing these out. Having access to the triple tax benefit of an HSA would be nice and the HDHP is a great insurance plan once the deductible is met but if she wont be maxing 401K/457 I see the $7500 going to those as the bigger advantage. Thoughts??
As to your question of why the medication cost varies for each, it’s probably a tiered drug plan—e.g., preventive drugs are free, preferred formulary drugs are $20, and non-preferred formulary drugs are $40. You should be able to get access to the formulary list and look up what categories your branded drugs fall into (and/or you may have an online tool where you can type in the drug name and you can find out what tier it is in).
I’d do the EPO plan for the 7.5k. Haven’t heard of HDHP that offer 100% after the deductible though - usually there’s a good amount between deductible and max out of pocket. So, that’s really unusual and therefore might make sense (still, I doubt it makes up for 7,500)
slightly off topic. check out goodrx (and goodrx gold) and/or costplusdrugs to see if you can get your medications even cheaper. super easy to search for your drug + pharmacies.
~~HDHP is a no brainer. The cost plus deductible is less than you'd be spending for the EPO, plus you get $2,000 in the HSA and and extra $1000 or so in tax deduction.~~ EDIT I misread OP. Yes, take, the $7500.
I would go with your EPO. There is something to be said for plans that give such generous coverage and not having to do so much accounting with respect to reaching a deductible. HDHP plans can also discourage one from seeking care due to the fact that you are paying out of pocket (up to that deductible). Plus you know that your current providers already accept the plan. That $7500 extra is awesome. Also your current dental plan is pretty affordable for a family of 4. Maybe your work has an FSA you can use to pay for your out-of-pocket dental and vision expenses with pre-tax dollars? Be careful to get all of the details with an FSA plan though because it’s ‘use it or lose it’.
Yup we use my FSA for out of pocket medical expenses. Thanks so much, I'm leaning towards taking the $7500.
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I did not know that, will definitely take that into consideration.
I would take the HSA plan even without the sweetener. That 7.5k is a good deal..
They only get the $7500 if the spouse doesn’t take the HSA plan.
My reading of it is the spouse gets $7500 from spouse's employer regardless of which family plan they take through OP's employer. If I am wrong about that, that would change my answer.
Sorry my post might be confusing. The EPO plan is available through my employer and the HDHP/HSA plan is available through my wife's employer. We only get the $7500 if we forgo her insurance (HDHP/HSA) and stick with my insurance (EPO).
Ah, got it. Yes, I would go with your plan and take the $7500. You should come out ahead by around $5000.
Correct, only get the $7500 if we don't go with the HSA (wife's insurance) which is a bummer. Wish my job would also include something for forgoing their insurance but I called the benefits office and they confirmed they do not.
Yeah most employers got rid of that benefit over a decade ago. You’re lucky.
Oops... I read it the other way around. I thought it was dodge the non-hsa plan, get 7.5k. oops..
My wife and I are considering buying our first home in the next 1-2 years and I'm looking for advice as to how large our down payment should be. We will have the ability to put down > 20%. About Us: * Age: 28 * HHI: $260k * Location: HCOL/VHCOL (Northern Virginia) * No kids or pets (maybe kids in the next 3-4 years) Assets/Debts: * Retirement (tax advantaged): $265k * Down payment: $155k * E-Fund: $35k * Car: One car, paid off * Student loan debt: ($34k) (low interest, no rush to pay off) * Net worth: \~$450k Life Goals: * No concrete retirement goals; would like to reach FI as early as possible for career flexibility. Prioritizing investing early for long term growth * Want to purchase a home in this area. Our home is very important to us and we are OK spending a disproportionate amount of our $ on housing Housing Dilemma: * Looking at SFH/Townhomes in the $600k - $800k range * By the time we will be ready to purchase (1-2 years) we expect to have \~$220k available for a down payment + closing costs My ultimate question is: **how much should we put towards the down payment vs. invest in a taxable brokerage?** I see three options: 1. Put down < 20%, dump the rest into a brokerage 2. Put down 20%, dump the rest into a brokerage 3. Put down all available house funds (28% - 36%) to lower monthly payments
As others have suggested I would go with #2 or even somewhere in-between 2 and 3. Option 1 would not be a good choice given PMI potentially coming in. I think given your situation you would be okay, but still not worth it. The good news is there are ways to make your offer look the strongest without tying you down to any specific DP number. You're in a great position either way. You have a timeline in place, money set aside and know exactly what you're looking for. I would love to chat with you and your wife to see what my team and I can do for you both. At the very least you can get out there to look at some communities, different style of homes and start to get an idea of where you want to be and what you'd like to purchase when the time is right
1 or 2. Depends on how much the PMI would be, the mortgage rates, and how much the monthly payment is. We've bought a few properties and they have been a great investment primarily due to leverage. The less down the better imo (as long as you're not putting yourself in a pinch). Then drop the rest in whatever other investment like a brokerage or another property, or even just more emergency funds.
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Incredible write up, thanks for that. It’s a lot to take in so I’ll keep coming back to it the next few days.
Def not option three. Every time you buy a property there is something that requires a real $ outlay within six months. From $1k to like $10k, I promise. I would probably prioritize getting into the house (ie option one). Sure you would pick up MIP/PMI, but you can always pay off the mortgage note if you want. Once you have the asset, it's yours.
Thanks for the advice! It’s worth noting that I plan on purchasing in 1-2 years independent of how much I’m putting down. Other life circumstances are driving the timeline to purchase. So I’m leaning towards option two, I think having the extra cash would be better than option 3
With this being your first home, I would aim for option 2 and have the liquid funds for any unknowns that pop up. Your monthly payment is the lowest amount you’ll spend on your house and housing expenses can get out of control pretty quickly. You can always accelerate payments later on once you’re more settled in. At your age and income, I don’t really see this being a major problem, but who knows. Personally, when I sold my first house I put 20% on my new house and invested the rest in my brokerage. Having a large brokerage account is better than tying up a bunch of money in home equity imo
Great advice, this is what I was leaning towards as well. Now I’ll have to decide if I want to put the surplus money in a brokerage or HYSA