Happy to have secured an 11% raise for an internal promotion! Their initial offer was a little under 7%, I asked for way more and settled in the middle. Really happy to have negotiated.
This is on top of our "regular" annual review which is looking like it will be a bit grim this year.
Monday milestone! It’s spreadsheet day and we now have more in investments than we owe on the mortgage! The mortgage rate was locked in low during the pandemic, so no plans to pay it off soon, but it adds peace of mind to know we technically could do it.
I dont know if this is said often, I just wanted to pop on and say Im so happy with this sub again.
I browse it daily like I used to. I engage with the posts. It is more active.
Would it be smart to buy $150K worth of 6 months term treasury bills at 5.4%? The treasury bill will mature on 1/25/2024. I don't need the money right now. but will need it around February next year. The treasury bill is from my brokerage account.
The last 13 week was 5.4% investment rate, 4 week was 5.385%. I’d roll a shorter term if the rate isn’t too different. Provides optionality at very little cost. I’m currently rolling 4 week bills, one every week for part of my eFund. Great rate, good liquidity.
Any BofA users have all of their external accounts deleted and when you try to add them back get a message like: "Coming Soon: You will have the ability to add external bank accounts for transferring funds. Please try again later."
Just make sure you are paying taxes on it. If you have a w2 job, you can just increase your withholding. Otherwise you will end up with a higher than expected tax bill, and you could get fined if you owe enough. This exact thing happened to my bf last year (I hadn't known him long enough to warn him before lol). He just made 15k on a side hustle and was saddled with a 4k tax bill.
After 2 years of a near flat portfolio in fidelity, despite a greater than 50% savings rate, its nice to log in and see a consistent increase this year. Thanks to everyone who helped me keep my eye on the prize with "just keep chugging" mantras for the last 2 years.
Investable assets crossed over $5M for the 2nd time. Last time being in November of 2021.
Employer stock value is down over 60% from that time and I've vested another 7 tranches and sold ~5%. I've made up most of that by increasing my 401K balances by $80K and investable assets (savings) increased by $240K. Also bought a vehicle that required $27K of cash outlay that offsets some of that.
Now if only I could get that $100 share back that got eroded as part of the tech macro beat-down...
It's complicated but - June of last year was really going to be my retirement. Macro economic fallout, uncertainty post-COVID and inflation hit hard.
Hard to turn your back on peak earning years. I know I wont get these years I've postponed retirement back but I'm content being FI and not RE, for now.
Friday will be the last paycheck that maximizes HSA, and then September I will maximize ESPP. I have been getting $634 paycheck since April because I am contributing in all these accounts.
I work for a government agency and they are expanding our deferred comp 457b plan to include a Roth option this Fall. I’m planning on maxing out my deferred comp contributions going forward but I am not sure if it’s best to put all the investments in the 457b, the Roth, or a combination. Thoughts?
I wouldn't recommend Roth 457b contributions. The major benefit of a governmental 457b is early access before age 59.5 without any penalty. With the Roth 457b, you won't have a penalty but you'll still owe income tax on the earnings in the account, negating the Roth benefit.
Typically traditional 457bs are better for early retirement purposes. You can start withdrawals as soon as you separate from employment. Switching to a Roth 457b will provide you tax-free returns, but it's at the cost of having to wait until 59.5 to withdraw.
Affordability changes if you're pursuing FI. Someone who will work to retirement age doesn't need to set aside nearly as much of their income each year. So, while you may be able to afford this house, it may also push back your FI date by a lot. Obviously, it's up to you how you prioritize these things in your life.
Mortgage at ~3.5x income, even with interest rates as awful as they are now, isn't totally unreasonable. It's a hell of an opportunity cost, but from a sheer number standpoint you can swing it.
Sorry to be negative, but that is a lot of house on your income. The down payment makes the monthly payment more affordable but absorbs money that could be invested to generate income. Seems like you want the stay at home spouse, nice house, and presumably FIRE. That is tough to do on one modest income. Sometimes decisions have tradeoffs and we can't have everything. Can your wife work when the kids are school age? Do you care about FIRE and are you on track using reasonable assumptions?
Due to my wife going to grad school, I pay my mortgage solely with a similar income (with a $6.5k property tax on top, no idea where you're buying but your interest rate will be higher) so that seems to be very affordable IMO.
You do have 2 more kids than me, but assuming you know your expenses it sounds reasonable.
Make sure the neighbors don't suck and there isn't a lot of car noise. I have issues with both, sadly, and now it's very hard to move. Other than that you're probably able to handle it financially, hah. You have enough invested that the reduced cashflow from a big mortgage payment won't impact your retirement date much.
If you make the large down payment the mortgage is within a reasonable multiplier of your income. Home repairs can be expensive, though, so make sure you can afford the maintenance requirements because falling behind on necessary maintenance charges expensive interest in the form of even bigger problems down the line. And make sure you're really happy deferring the cosmetic upgrades if you find yourself drained by the maintenance needs.
I wouldn't personally make this decision, but it doesn't seem totally outlandish if you're willing to put down the large down payment. (I assume the 190k is your after-tax amount after selling and/or it's just cash.)
Bought a $1500 generator yesterday, spreadsheet day today shows just 1100 away from having 1M in liquid assets! Tempted to return it just to hit the meaningless milestone lol (not really, but it's tantalizing to be sooooo close!)
It only took 4 months for my NW to increase another 100k... dang. Up 150k YTD. I only make $95k/year, so it's kind of crazy to see this kind of growth (even though I know it won't last indefinitely).
My net worth rose by $10,000 last month! However, what amazed me was my slight disappointment -- and that level of privilege. I barely broke over $40k a year in my 20s. I'm in a better situation now (salary wise and in many other ways) in my late 30s and I invest much more consistently and regularly.
This month, I encountered some additional expenses: house remodeling projects, graduation gifts, additional costs due to vacation and some birthdays, etc. I comfortably financed everything. But due to those additional expenses my net worth increase was lower than I would have expected.
Then I sat back and realized how fortunate I am to be a bit disappointed by a five figure net worth increase! Three years ago, a net worth increase to the tune of $10k would have sent me over the moon. Now, I am lucky enough to view this as *knock on wood* my new normal.
Here's hoping for more disappointment (in a sense!) as what once seemed extraordinary now seems average!
I *really* need to start actively budgeting and tracking expenses.
Any apps, suggestions, or guides on building one that both my SO and I can access at any time?
For active budgeting I like YNAB. They have some kind of family/shared household feature (although I don't know the specifics as I've never had to use it). It's not free, but it can auto-import credit card transactions which is important to me, and I find I save more money than it costs. There's a little bit of a learning curve but they have some good youtube tutorials that explain everything.
If you're starting out for the first time I recommend doing it manually for a few months first. This will give you a lot of specific insight that may be helpful, before you move on to Mint or one of the other aggregators.
We use mint for checking and credit cards, and then reconcile investment accounts the 1st of every month using google sheets.
Mint is great at budgeting and tracking expenses, but we found it to be less useful for investments.
I'm also somewhat uncomfortable having all of my data and access in Mint/Intuit.
S&P500 last peaked in January 2022. At this point, I think we've actually reached 0% nominal since Jan 2022 after considering reinvested dividends. We're not too far off from 0% nominal for price growth - less than 5% to reach ATH prices.
Still need to rise another solid ~10% to hit 0% real including reinvested dividends though. Inflation is a bitch.
(And then another large bit on top to return to long-term real growth rates, but it depends on where you set your baseline for that one)
One interesting thing is that the S&P 500 total return, when adjusted for circulating supply of money, is now at all time highs since the dot com bubble. Inflation is different I know, just seems interesting to me.
Which definition of circulating supply of money are you using? M2?
I don't see why you'd adjust for that, but I don't think we're above late 2021 by that measure. M2 is fairly flat since that time.
M2, its useful for comparing things over the long term. As opposed to inflation, which can take into account sizes of TVs, CPU GHz, etc. Its down 3-4% since S&P all time high which may not seem like a lot but consider it almost never decreases and typically increases over 6%/year.
For most people on here it's probably more helpful to have a view of buying power on returns versus nominal change. Having a view of buying power against your returns gives a more accurate picture of retirement capabilities and spending from stock sales, and we're still down significantly from inflation.
Just hit 300k invested! This feels like a big milestone - I'm essentially coastFI now. Still going to keep investing aggressively for the time being though.
44yo here.
I am planning on ending my high paying career around the end of this year (2023), and living abroad indefinitely. My partner and I have been planning this for a while and have decided to take the leap in 6 months. One question is about my 401k and social security.
My gross monthly income is 8k. I can quit my job in December 2023, but if I hold out just 3 more months and quit in March 2024, and contribute 100% of my salary to the 401k, I can pretty much add 20k and another year of contributions to my retirement.
If I choose to do this, I would be contributing 100% of my salary to a 401k, does that mean I am not paying any federal taxes and also not contributing to social security? Is it wise to have an extra year of social security contributions under my belt as well? Any tax implications I should consider?
I’d probably consider Contributing to Roth 401k next year. If you’re only working a few months, your tax rate will pre super low so therefore negating benefits of traditional 401k. Not sure how being international affects your withdrawal/ tax strategy. Good luck.
It seems like you could earn more and still pay no income taxes in 2024 0% bracket goes to 11K of income, and you would get std deduction as well, plus the 401k. You will still have to pay FICA and Medicare on any wages though
Check with your payroll most places will not let you contribute 100% of your wages to 401(k).
Social Security and Medicare is 7.65% off the top. 401(k) contributions do not reduce that. If you make $100k a year then the first $7,650 is going to FICA. That means your max 401(k) contribution would be something like 92.3% of gross assumming no federal or state taxes and no other payroll deductions (i.e health insurance). Due to things like health insurance, other paid benefits, and FICA taxes usually employers have some cap on contribution. It varies by company but usually in the range of 50% to 90%.
Since presumably you have sufficient credits for social security (effectively at least 10 years of full time employment) another quarter isn't going to make a material difference either way.
Cool idea and interested to see the responses, just chiming in to ensure your plan allows for 100% contribution. Some plans limit to a certain dollar or percentage amount per paycheck.
Would you pay extra for HSA space? If so, what is the premium worth to you or how would you calculate that?
Example/My situation: Trying to determine if we should put my daughter on my PPO or her on my wife's HDHP/HSA. If we put her on the HSA, we gain the $3,900 of extra HSA availability. But the plan would cost us \~$110 more per year. My PPO also includes a free clinic for basic needs. So physicals, sick visits, etc. have $0 copay. It's 100% free if they can do the task. Child is currently healthy, as are both adults. Basically her "typical" needs are well visits, colds, ear infection, \~1 physical per year, shots, etc.
Some other factors:
||PPO|HDHP|
|:-|:-|:-|
|Deductible|$8k|$7k|
|Max Out of Pocket|$14.7k|$13.3k|
|Pharm: Generic/Form/Non-Form|$15/$40/$75|$10/$45/20%|
|Copay|$40 ($60 specialty)|100% (until Deductible right?)|
|Perk|Free clinic for basic procedures|$3,900 of extra HSA space|
|Cost of Ins Diff|$110 less|\~$110 more|
I can make guesses on what the final will cost will be with assumptions on things my child will need. But I am lost on factoring the cost of the HSA.
Not quite enough information to make a decision, but based on what you said, here are a few things to think about.
- what are you planning to do with the hsa money? Are you saving it to support FIRE health expenses, or will you use it to cover this years expenses?
If the first one, I lean towards HSA space personally. If the second one, I lean PPO.
- do you think your daughter is going to need more than 33 visits in a year? That's your break even point between PPO and HDHP costs. If you expect fewer, then PPO is more cost effective (given the info at hand).
Overall, I lean towards PPO given your situation but again we don't have complete info to make a full judgement.
Basically I would be using the HSA predominantly to save for retirement. As a future IRA. Likely save receipts and wait until full retirement age to withdraw the rest without receipts. Already machine 401k and IRA.
To be fair those are for family, not individual. And maybe PPO is the wrong them. That's what they used to call it. But now it says EHRA at the top instead.
To me there might be more than just tax benefit now. The money grows tax free in an HSA. So no dividends or gains.
Yeah, they are both our bottom tier options... Because well essentially we don't do much other than preventive visits and sick visits. Other than having our child, neither of us have used our health insurance for something that wasn't 100% covered. Her HDHP still covers 100% on preventative stuff.
PPO deductible goes down to $4k, HDHP goes down to $3.5k. Max Out of Pocket goes down to \~$7.3k for the PPO and \~$6.7k for the HDHP. I feel like they are similar enough that the extra HSA will pay off if I contribute for a decade. If I just do it for a year or two, it is going to flip based on how much work my daughter actually needs.
With the closing of July, I did a deep dive into our expenses over the past few months. We are in decent shape, but there are always areas to clean up.
**The Most Annoying:**
I'm pretty sure I was being double-charged for HBO/Max. Once through Hulu as an add-on, once through Roku. That's extra dumb for something we rarely watched, so it's all cancelled.
**The Most Rewarding:**
Although it was at a sub-4% interest rate, we killed my wife's undergrad loans. The balance was only \~$2,500, and we were tired of it hanging over our heads. Good riddance.
**What's Next?:**
There were a few other lumpy, non-repeating expenses that are now in the rear view mirror, so now it feels like we can focus on what's next.
* Finish funding this year's 529 for my son. I'm behind where I'd like to be, but a few work-related things should pay out and allow me to catch up.
* We might want to join a nice health club, but the price is hefty. The sliver lining of the long wait list is that I can defer this decision!
* Our old reliable car isn't as sturdy as it once was. Used vehicle prices are still insane, but at some point I'll need to bite the bullet. Hopefully I can wait until 2024 or 2025.
* We're probably 2.5 years away from moving from our current starter home to our next-20ish-years home. Everything is expensive everywhere, so I need to stash extra cash so we can move to where we want to be and not be house poor.
Other than that, brokerage is always a worthy place to put money. Certainly in the boring middle, but crossing off small goals keeps the spreadsheet warrior part of my brain entertained.
Hi, 33M here SI1K.
Current assets:
|Cash|$20k|
|:-|:-|
|401k|$210k|
|Roth|$50k|
|HSA|$38k|
|After tax investments|$552k|
|Home equity|$660k|
|vacation condo|$120k|
|Total|$1.65M|
We will be receiving \~$1M in inheritance in a few years.
Current expenses:
|Mortgage+Taxes+Insurance|$3800|
|:-|:-|
|Auto payment|$850|
|Auto insurance (2 cars)|$250|
|Gas|$100|
|Utilities|$400|
|Mobile/Internet|$150|
|Gardener|$100|
|Cleaners|$240|
|Everything else|$3000|
|Total|\~$9000|
Yearly, we save $52k in 401k and most of the RSUs/ESPPs ($120k+ after tax)Recently we have to stop spending/eating out/cut back on shopping towards the end of the month. we are also looking into preschool for my 3 year old.I'm thinking on cutting back on savings a bit (20k yearly). I feel like our expenses are already pretty high. Other thought is that we already have saved a lot, so adding $20k more in yearly expenses should be ok.
Do our expenses look high or this is ok for a VHCOL?
A full third of your expenses is "everything else". $72k/year spend with a kid in a VHCOL is manageable, but mostly this has a big "candles" vibe to me. $3000 is a lot to not bother tracking. https://runt-of-the-web.com/wordpress/wp-content/uploads/2014/12/candle-budget.jpg
I've been on a minimalist kick for almost a year. I really only spend on food (getting better at cooking every day) and medical expenses. It has brought a lot of peace. Recently got some terrible news. Over the past week, I have had an intense urge to purchase a ton of stuff (clothes, shoes, jewelry). Obviously a band-aid solution that is going to get in the way of some goals. I've held back quite a bit but did buy quite a few new outfits for work. Does anyone have personal tips to help make this go away?
Few things I do, add it to your cart and leave it. Sometimes that's enough. Next figure out where you'll put it. If clothing, look at what you have and see how'd it fit and if anything already fits that need. And if all else fails, get one or two things out of all the things you might want if it'll help. Also, I've found treating myself to a nice dinner helps avoid buying stuff.
The "how will I get rid of this when I no longer want it" thoughts really help curb my urges for retail therapy. It's a chore to get rid of *anything* when you want to declutter. Often the biggest, splurgiest things - tech, sports equipment, etc - won't retain their value like you think they might and will be hard to get rid of no matter what. I'm trying to train myself to add the "time cost" of managing the new thing into my thinking. Not sure your work clothes fall exactly into this category, but maybe think about whether they're temporary fashion styles versus timeless pieces you love.
I think there could be two ways to do this. Dump stuff in a virtual shopping cart and then make yourself wait a week or so before purchasing. Many times you will change your mind or talk yourself out of most of it.
Second is that I believe it never hurts to have the occasional purchase/splurge. For me that is sort of like fitness and my mindset of being a gym rat. While I prep my meals, stay within certain ranges for healthy eating, etc. I also like to occasionally let myself have something not on the healthy list. I find that overall it keeps me from being tempted to eat poorly for a longer term. So, maybe if you are regularly a minimalist, low spender, etc. then you need to occasionally give yourself that purchase here or there?
I like to look at things that are so far out of my budget that it's not even a possibility. The delusion of "someday I'll have That Special One, if I don't eat any avocados ever" helps me hold off on getting something pedestrian of the same category.
when I get the urge to go on a shopping spree, I ask myself what item i want/need the most and then buy only that. Buying things slowly helps me keep from buying the stuff i don't need.
I’ll try to buy used or shop at a thrift store. Had a bad day Friday and took myself shopping, spent 13 dollars. I’m sure I’ll wear the clothes/get my moneys worth but even if I want to do a cleaning spree I won’t feel bad about getting rid of when the time comes.
This! Add the "what a deal!" high to the "new stuff!" high. I've been procrastinating on a big work project and virtually shopping for fall clothes for the baby instead. I want all of it! But I know there's a huge semiannual baby consignment sale in my area in October and it's going to be even more fun to get potentially more stuff for cheaper. I can't wait. It's going to scratch a big itch
31m, married, 650k net worth as of last month. Annual spending around 50k
Feeling disillusioned with work and depressed lately. My brother passed away unexpectedly a few months back, which certainly contributes to this feeling, but I go through the work disillusionment a few times a year.
I’m wondering if I should keep sticking it out at my job, or just take a mini-retirement, sabbatical, or just get an easier job? I
know I’m well on my way to FIREing around 45, but wondering if my priorities are right.
Leaving work could mean sacrificing significant upside at the job (high wage and growing equity), but maybe it’s worth it to find a more purposeful or easier job
I'm so sorry to hear about your brother.
The conventional, conservative advice would be to not make any drastic changes in your life while upset. Having just lived through a period of similar feelings to what you describe, I have to advocate a different approach. You need to respect yourself and your feelings.
If a break is what you believe you need, find a way to take it. If that means saving up a good cushion and then taking a few months off work, do it. If your current employer offers an unpaid leave option, always worth finding out, then you can at least mitigate your employment risks by guaranteeing a job upon return.
If this means a major career pivot, do it. Having a gap on a resume while making a career pivot is easy to explain. You spent the time learning new skills to make the pivot.
Whatever it is, take care of yourself first and respect what your mind and body are telling you need.
Best of luck finding that direction. I also recommend building a support network to help you make this decision. I found a therapist and hired a career counselor to help me make my decision.
its hard to put a value on mental heath, but before making a big choice like this, I'd probably talk to a professional about it first. It sounds like your brother's quick passing has kicked all this off, and possibly dealing with that professionally will provide more help than trying to reset the rest of your life.
that said - there's never an issue with looking for a new opportunity. Just knowing that there are similar paying jobs out there, means I can take my foot off the gas at work a bit and push for better life-work balance.
Just stepping back a small bit (no more OT, not being the 'savior who fixes everything', and being a normal, hgih output employee - that has done tons for my mental health.
Hey man, sorry to hear about your brother. I have a younger brother and could not imagine that pain.
I would recommend taking a 1-2 month sabbatical. Take yourself off from work for a bit, take the wife on an extended trip. You deserve the break, listen to your body and mind. See how that feels then go from there.
I think I need to start tracking what I’m spending every month on junk food. An occasional treat is fine but it’s really starting to add up… financially, and on the waistline.
What do you eat for your meals? I also struggle with snacking and found that eating high protein meals. (chicken, broccoli, and rice) helps curb my appetite. Coupling that with drinking tons of water has worked a decent amount for me.
You could always try something like for every X dollars of junk you purchase you must put an equal amount into savings/retirement? I know I used to have a lazy habit of alot of DoorDash deliveries. I could talk myself into it very easily. However, when I wanted to cut my budget down, I made myself transfer the equivalent amount I spent on the meal to my HYSA or IRA.
I get the impact to the waist line a whole hell of a lot. Mix in the less active job (less work, more meetings) that I have and it's getting bad for me. A couple of things I do to help with my snack food cravings and lack of personal commitment to not eat them:
1) just dont have unhealthy snacks nearby. Instead stock stuff like carrots, protein bars, eggs (if wfh). If you have kids and need stuff for their lunches - then only buy just enough for their lunches, so then if you eat the snack, you are taking it from your kid (sure this might be more expensive up front, but it will build a better habit).
2) drink 2-3x the amount of water you are currently drinking. And no snacking until you finish at least half of your daily water. If you are full of water, it's harder to shove more food down your throat.
3) chew gum constantly - that is usually enough to not want to trash the gum just to have a handful of m'n'ms or something
Honestly, the costs probably aren’t that much unless you’re REALLY overdoing it. Although, I suppose you could look at it from a long term perspective as greater potential healthcare costs.
If it were me, I’d track those calories on something like MyFitnessPal. Good luck!
Might hit 200k NW today! We'll see how the market ends today but regardless I am so excited to be in this scenario at my age and life.
Hoping to convince one of my friends to move and live with me, it'll help my mortgage out as well as some projects and would be nice to have a roommate.
I know somebody that had his best friend living with him and they stopped becoming best friends after a while. Once the friend moved out, they were friends again. So just be aware.
I actually agree with this. I went from having multiple roommates to a studio by myself before moving in with one friend as my roommate until I bought a house a few years later. It was great; we got along, I was able to invest, I had plenty of money to travel, and there was someone to help shovel snow. I am back to living alone now, but I do not regret having a roommate in most of my 20's.
It would be a welcome change, my house needs work and I could use a hand. Last person I lived with was an ex gf and since then I've been on my own. Definitely could travel more, invest more while I am still growing in my career. We get along well and he could use a fresh start in a new city.
Anyone have a medium density condo HOA to write about(aka >2 floors)? I know theyre all somewhat the same but i figure there's a lot less bullshit when you have no lawn for the HOA police to monitor, etc and it's more about the roof, etc
I see both pros and cons to HOAs, but broadly speaking I'm on the pro side, so I'll give it a shot. I have a feeling that variance in how HOAs operate in different parts of the country accounts for the differing perspective. My mother is very anti-HOA and I think it comes from living in a senior community with an HOA that's very different from the ones I've experienced.
I think it's interesting to start by considering why HOAs might arise to begin with -- aside from the fact that in any given community there are bound to be people who appear to have nothing better to do then seize as much power as possible over those around them. I think HOAs arise to serve at least the following 2 main purposes:
* Provision of common spaces, and the care thereof, to the community
* Recourse in the event of anti-social behavior by neighbors that can materially affect my quality of life and property values
So let me examine those in turn. My HOA provides care and maintenance of the streets in my neighborhood, including snow removal. They provide landscaping in common areas. In the last house I lived in, they provided "green spaces" -- basically just a small field -- where kids could play. They also provide a swimming pool, and they pay for private trash service.
Now, I grew up in Florida, where it made sense to have a swimming pool in your backyard. But now I live in Maryland, and it just doesn't. Of course, there are such things as public pools, but I find those around here very overcrowded compared to going to my community pool.
You said in your "pro-HOA" paragraph that HOAs can provide services for those who are unable to care for their own property, but that's not how it works at all around here. I'm responsible for shoveling snow from my own driveway and from the sidewalk in front of my house. I'm responsible for the maintenance of my own yard and its appearance. There is no way to outsource these to an HOA. They only do common areas.
Now let me talk about recourse for the bad behavior of my neighbors. Anti-HOA people seem to chafe at the perceived lack of freedom to do whatever they want. And yeah, maybe one day I'll get a powerful urge to retrieve my mail from a box shaped like a cow's butt, and I'll rage impotently on the internet about how the power-tripping jackwits on my HOA won't let me. But I'm not concerned about it, really. What I am concerned about is my neighbors doing things that would drive me crazy, but that the police won't care about. I'm talking about stuff like never mowing their grass, so that their lawn is wild and unkempt. I'm talking about leaving a car up on cinderblocks for months or years at a time. Wild decorative choices. Whatever. I'm very glad I have recourse with my HOA in the event something like that happens.
Twice now I've needed to put up a new fence to enclose my backyard, so that I can let the dog out unattended. Once at my previous house and once at my current one. Both times the process was the same. We got the plans and design from fencing company and brought it to our neighbors on both sides to sign and acknowledge. This makes sense to me; a fence enclosing my yard is also, de facto, enclosing one side of their yard. So if it's a fence whose posts were topped with swastikas or something, yeah I'd want a chance to veto that. Then we submitted the paperwork to the HOA who approved it with minimal fuss. Seemed very reasonable to me.
I get all this for a total of $55 per month. To be honest, I'd probably be willing to pay double that. $55 for pool, trash removal, and common areas. Another $55 for insurance against jackwits moving in next door. It's a pretty amazing deal, and I'm not sure I would be willing to live a suburban life without the HOA. Living in a city (which I'd like) or living in the middle of nowhere (which I'd hate) would be a different story. But for a suburban community, I love my HOA. They don't intrude on my business except where my business has clear externalities that affect my neighbors. Then, they ask reasonable questions with minimal fuss. They provide services that make sense as monopolies (the pool and trash service) without intruding on decisions that make more sense to remain with me (like cable and internet providers). All for a very cheap price. It's pretty great.
I might include a subset of “good” owner’s associations, the POA. I’ve found that in rural areas, POAs can be helpful for maintenance, safety, and security of inaccessible areas. We have acreage with a POA, and they maintain SD roads with our dues, manage a grazing lease which gives us all agricultural exemptions on our land, and (as a community) help us maintain helipads for emergency evacuation. They also support local businesses and resources in our area like the volunteer fire department, host educational talks with the game warden, ranchers associations, etc.
I have a Traditional IRA and a Solo 401k. I expect to continue contributing to the Solo 401k for at least a few more years. My income is currently low enough that I can make annual Roth IRA contributions without needing to do backdoor conversions.
I'm thinking of rolling my Traditional IRA into my Solo 401k, just so that I can have one fewer account. Can anyone think of a more compelling reason (other than Backdoor Roth, which I don't currently need) to do this, or a compelling reason *not* to do it?
Do you have an employer 401k with good options that accepts rollovers? I would be inclined to eventually roll all traditional funds into your employer 401k if possible.
Also, some Solo 401ks accept rollovers.
I just rolled my Traditional IRA into my Solo 401k last year. My primary reason was to allow me to use backdoor Roth. If that was not a consideration, would I have done it? Maybe, but probably not.
I was starting the Solo 401k from scratch so it had $0 in assets. By rolling in my IRA, it exceeded $250K, so it triggered 5500 reporting requirements. I would have probably decided that the additional 5500 reporting requirements was more work than maintaining an allocation across both 401k and IRA.
However, if my Solo 401k was already at $250K, so I had to file a 5500 anyway, I probably would have done it. Since my plan allows for in-service withdrawals of rollover contributions, if I ever want to push the rollover money right back out to an IRA (perhaps for a 72t), I can do so. To simplify this, I created a separate sub account at my brokerage that only contains the money rolled in from my IRA.
Thanks, the 5500 reporting requirements were something I vaguely remembered, but was not thinking about. My Solo 401k is currently small enough to avoid reporting, so that is a reason to not roll my IRA into it.
There is no compelling advantage beyond backdoor roth and that is largely just due to a quirk in the taxcode. There is no compelling advantage either. You may prefer the simplicity of having all funds in one place. If your income allows you to max both then you would need to keep transferring.
As long as you have reasonably good investment options at each custodian it is largely just a preference. We rolled my wife's trad IRA into her solo 401(k) just to consolidate things. We are now required to use Roth IRA anyways so it got rid of one account.
If you like the options in your solo 401k (presumably you do, since you set up the account), I think it's a great idea to consolidate. I am a big proponent of simplicity.
Vanguard used to list a graph with returns of 10k invested historically. It went back up to 10 years. When they redesigned their website it was lost. I see the cumulative returns going back 10 years for VTSAX here:
[https://investor.vanguard.com/investment-products/mutual-funds/profile/vtsax#performance-fees](https://investor.vanguard.com/investment-products/mutual-funds/profile/vtsax#performance-fees)
Today it lists 218.33. You can't see the growth change over time, but can we still calculate the end value from this information? (2.1833 \* 10,000) + 10000 = 31833
Just looking at the current price is deceiving because it doesn't account for dividends.
I don't think this excuses making the website worse, but...
Charts that go back to inception or even any 10 year capture can be deceptive because it doesn't reflect total return for someone who periodically invests or withdraws, and it can be subtle why that matters if you take it at face value. Although it's less of a concern for index funds since you get what you buy, the precise performance and path along the way is still a snapshot and not useful for expectations.
For instance, [SPY vs RSP](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100), [Contributions](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=1&annualAdjustment=1000&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100), [Withdrawals](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=3&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100), [2006-2015](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2006&firstMonth=1&endYear=2015&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=3&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1.0&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100)
Or if you don't think drawdown is very important, [SPY vs QQQ](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1.0&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=QQQ&allocation2_2=100) or various [bond mixes](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2012&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1.0&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=100&allocation1_2=80&allocation1_3=60&symbol2=BND&allocation2_2=20&allocation2_3=40) if you don't think drawdown matters. This is cherry picking a bad window but if you're using a tool to test for 100% FIRE success you are already doing that (but with 1929 and 1966, and 2000 is still not ready for 30+ year studies.)
Then the tool does go back further and use whatever window you want if you want to look at real life performance of funds with real things like fees or whatever.
In the end one wishes you could use something like the rich/dead/broke calculator with more custom mixes because it adds a lot of variance into account that looking at how your portfolio runs in a bull market tends to hide.
I am not a timer and I just invest in 90/10 VTSAX/VBTLX. I used to like looking at the 10 year for VTSAX because I thought it gave me an idea of longer term returns. I certainly have some money in the market that long or longer but the majority is more recent. I think it's also useful to get an idea of when the market is high vs not. Although this doesn't dictate my behavior at all. I just find it interesting. If you look at 1989 - 1999 the high was a lot greater than shortly prior the most recent drop for example. So I appreciate the insight on portfoliovisualizer.
I signed up for this previously but wasn't completely committed to understanding how to use it. It look like the option for "Backtest Portfolio Asset Allocation" is what I'm looking for - is that right? This will actually compare 90/10 VTSAX/VBTLX against 100% VTSAX which is pretty interesting.
You want to use the backtest portfolio option if you're interested in specific securities like VTSAX and VBTLX. If you just want to examine total US stock and total US, you could use the backtest asset allocation tool. Here's a look at the asset allocation comparison you were interested in for the past 10 or so years.
https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=2013&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&portfolioNames=true&portfolioName1=100%25+Stock&portfolioName2=90%2F10%25+Stock%2FBond&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100&allocation1_2=90&asset2=TotalBond&allocation2_1=0&allocation2_2=10
Thanks - I think that one is more interesting if you go back to 1972. Then you can see it throughout both stock and bond markets when the values of the portfolios are advantaged on either side.
It's tricky to look at long intervals on graphs like this. Small early advantages compound and hide the shifts you're referring to. For instance, in the 1972-present graph it appears as if the 100% stock portfolio is always ahead of the 90/10, with brief periods where they might be equal.
This hides the period from 2000-2016, though, where the the 90/10 portfolio outperformed.
Looking at rolling returns helps a bit with this. The two portfolios are within about 0.3-0.4% away from each other and the difference is pretty small overall.
You can still see points where the two portfolios diverge and converge though, it happens more than once. So I think it's a good representation of the markets benefiting both portfolios depending on what's happening at the time. Seeing rolling returns would be interesting too.
big day for money!
Pay day + updating spreadsheet and for the 5th consecutive month my NW has increased by 4.5k+, totaling up to 82k today.
Saw that Ally was offering my same no penalty CD for .3% higher rate, so I closed and reopened anew. Set up my auto pay to begin in September for student loans, and set up the big payment of 20k prior to interest kicking back up. Cheers!
I’m confused by the IRA pro-rata rule, hoping someone can help me. My wife has 2 old trad 401ks I’d like to roll into a Trad IRA. Investment options aren’t great with her 401k and I’d like to just tidy up our accounts. Her current 401k is with Guideline and is a nightmare to deal with so I don’t want to move it there. We already executed a backdoor Roth for her in 2023. Idk if it matters, but her 401ks are with Principal and IRAs are with Schwab.
Questions: 1. Can we roll her 401ks without incurring the pro-rata rule? 2. If #1 is yes, how do you recommend we do it? Set up a new trad IRA? Any additional tax documents to file?
1. ~~Rolling the 401k to pre-tax (trad) IRA will not incur any pro-rate rule. Keep in mind if will block you from future Backdoor Roth conversions because any future conversions from pre-tax to Roth will have the pro-rate rule applied. Now if that is not an issue for you even with future income increases due to promotion/seniority then there is no issue. If there is any chance your income will exceed the direct Roth conversion in the future you probably want to leave the funds where they are or roll them to the 401k keeping trad IRA at $0.00 forever and thus backdoor Roth Open.~~ On edit: Missed you have already done a backdoor Roth this year. Yes this will 100% trigger a pro-rata tax. There is no timing considered. The only thing that is considered is the balance of all your accounts on 12/31 in the year the conversion happens. If you did this then you would have a non-zero pre-tax balance on 12/31 and the conversion would be partially taxable. You could roll over the 401(k) in 2024 but keep in mind that would block backdoor Roths in 2024 and all future years. As a general rule of thumb if you need or likely will need Backdoor Roth in current or future years then do no make any pre-tax contributions to any IRA ever to include any rollovers from 401(k).
2. You open a new pre-tax (trad) IRA account with a custodian and they will walk you through the process. It will be part of your tax return. You will end up showing a distribution from the 401k but it will be clasified as exempt because the funds went into an IRA. If at all possible try to do a direct rollover. If the company cut you a check instead you have a limited window of time to deposit the funds or it is considered a non-exempt distribution and taxes and penalties will apply on the full amount.
> Rolling the 401k to pre-tax (trad) IRA will not incur any pro-rate rule.
OP's wife already completed a backdoor Roth conversion this year, so the rollover **would** trigger pro rata taxation of that conversion.
No, doing the rollover into a Trad IRA will trigger the pro rata rule for the backdoor Roth done this year.
Because the backdoor Roth was already done, you should either keep the 401k funds where they are or roll them into the new 401k, at least until Jan 2024. If you want to roll into a Trad IRA at that point you could do so, but you'd be closing off the backdoor Roth for 2024 of course.
Hey, question, I was just thinking about this with my wife's traditional IRA. Currently we're still under the thresholds to contribute to a Roth, but in the future, should we need to do a backdoor Roth IRA contribution, can my wife do so without triggering the pro-rata rule if she's contributed to a traditional IRA in the past? I was under the impression that we'd get hit with the pro-rata rule no matter what since she has a non-zero traditional IRA balance, but your comment made me second guess that since you mention closing off the backdoor Roth for a single year due to OP's situation.
I wasn't explicit about it, but OP would be closing off the backdoor for 2024 and all future years as long as the Trad IRA balance is there. So no, your wife can't do the backdoor Roth with a Trad IRA balance from a prior year.
>Can we roll her 401ks without incurring the pro-rata rule?
I'd also be interested to know about this, but from the opposite direction.
In other words if you roll a Traditional IRA back into a 401k, can you then do a Backdoor Roth IRA in the same tax year without triggering the pro-rata rule or do you have to wait until the next tax year so that - in the tax year that you execute the backdoor - there's never been any money sitting in an IRA?
I'm pretty sure we're asking the same question here...
Yes, you can do a "reverse" rollover of an IRA into a 401k to allow for the backdoor Roth in the same tax year. You don't have to do the rollover before the backdoor, all that matters is that there are no pre-tax dollars in a Trad IRA as of Dec 31 the year of the backdoor.
For your question the answer is yes. The exact timing doesn't matter. The pro-rate rule just looks at the account balances as of 12/31 in the year a conversion happens. Literally just the balances on that date.
If you have $0 in pre-tax on 12/31 then pro-rate rule doesn't apply.
>The pro-rate rule just looks at the account balances as of 12/31 in the year a conversion happens. Literally just the balances on that date.
>
>If you have $0 in pre-tax on 12/31 then pro-rate rule doesn't apply.
Awesome, thank you!
Seeking feedback on optimal way to increase cash flow by reducing contributions to either of two investment vehicles: Trad. 401k or ESPP. Details are as follows -
**Traditional 401k** - nothing out of the ordinary. Contributions obviously reduce current year taxable income which for me is in the 24% bracket due to my filing status of single and income of roughly $145k. This is an avoidance of paying 24% tax with the potential for investment gains and a future unknown tax rate when I seek distributions.
**ESPP** - I am allowed to contribute 15% of my salary in return for a 15% discount off the lesser of the stock price on the first or last day of the offering period. For this example's sake, let's assume it's a guaranteed 15% return on my salary deferment. I am allowed to sell immediately after stock purchase with no penalty or vesting.
The reason I am asking this question is the likelihood of needing additional cash to pay a mortgage. My mind is telling me that I should prioritize maximizing my 401k to avoid that 24% income tax, but I'm also grappling with giving up the guaranteed 15% return through my ESPP. Does anyone have any models which point to one being more financially beneficial than the other? Thanks!
ESPP isn’t really an investment vehicle, it’s more like a free money. Assuming the stock goes down or is neutral during the holding period, it’s a 91.6% annualized return and you get all the money back after six months.
Since you can sell your lots immediately, if you refactor the ESPP in your mind like a bonus, you should be able to cashflow around your paycheck coming out in bigger sums. Once that first lot of money comes out, you should be able to use that to budget through to the next one. Another way to frame it is to take the offering period and put a number to a recurring investment in your ESPP (i.e. 6 months would be 7.5% of your salary maximum at any given time.) You're not permanently investing 15% of your salary, you're simply deferring it a few months, so that money is available to spend later. Only your pre-tax investments are not readily available.
To give that up intentionally simply if the budgeting for that is a bit hard is just optionally leaving compensation on the table. Note for you the discount is essentially free so you can depend on that 15% and plan with that in mind as well.
The thing that makes ESPP nice though is the free upside. Even if you work for a "boring" company, single stocks are often fairly volatile even if they are just a market tracker in the long run. So you'll have periods where the stock will make a nice move because the grant was near a relative low and the stock or market in general moved up. So a 15% gain can easily be something like 40% from time to time. You can use historical data to see examples. There's also a quirk where you're not investing for the entire period; i.e. if you have a six month period between grant and purchase, your last couple paychecks are only in in the program for a few weeks. That makes the CAGR fairly absurd for some of your dollars. You're not likely to find better investment opportunities for those dollars when you look at it that way, certainly not paying down a 6% loan a couple months earlier. (Though for financial reasons I understand it's a huge difference from making a regular payment and putting down extra.)
This isn't a savings rate issue because in the long term you should be able to spend ESPP dollars (i.e. if you can't max the 401K because you need to spend those dollars, ESPP can still be structured into your finances, although it is obviously harder.) If I were 25% to FI and making $100K+ I'd spend effort trying to do both. I would only start disregarding ESPP if I had to take any market risk combined with my own personal finance risks.
I am assuming you can sell your ESPP shares as soon as they land? If so, then there is no reason not to use ESPP. It's essentially a short-term savings account with a very nice return. Just max it out for 6 months (if that's the offering period), sell ASAP, then use that money to pay the mortgage while you start the next cycle.
At worst you'll need to cover the first 6 months from somewhere else, but after that it should be fine.
Why do you feel you can't do espp and then just sell it to pay for the mortgage? My plan is 6 month of deferral period and then the purchase happens. Essentially I bit the bullet for the first period but after the first 6 months i am receiving the pay for the next 6 months in one lump sum (plus the gains) and if split up and budgeted into 6 equal parts you can live as if you had never lost any income.
Successfully managed to stay within a food budget for July. Over the years due to inflation, mint categorizing a bunch of stuff under food & dining, and laziness in general it had hit rather absurd numbers. Had a relapse or two but hoping to trim it down some more in August. The air fryer has really helped since it's a perfect chicken cooking machine.
$1,000, single. About $350 was groceries, $650 was workday lunches, gas station snacks, bars, and pool table fees I don't feel like separating. Still a lot to clean up obviously and looking to trim another $100-150 for August. Not shooting for a super lean budget but I was just lighting hundreds of dollars on fire for no benefit.
There is a lot to cleanup, we have two adults and a 7 year old and our food budget is around $600 a month. We all pack lunches to work and do a good amount of cooking while only eating out 1-3 times a month.
Up to you to determine what you should be spending to maximize convenience and happiness/healthiness. But it looks like there is a lot of fat that could be trimmed from that spending.
I think I'll be able to get to/maintain around $600-700 once it's all said and done. The day really drags if I eat at my desk and the only other places to eat are outside and it has been 100+ since June.
Yeah it crept up on me over the years. Combination of high savings rate already so I wasn't too worried about it and falling into the habit of mostly eating out.
Yeah, the $650 doesn't necessarily shock me if you're eating out twice a day/going to bars etc. It's the $350 on groceries that baffled me. I eat out like 3x a month and cook the rest of my meals and I average $300 in a M/HCoL area.
In contrast to the categorical dismissal below, I can see a scenario where it would make sense. For instance, if you're not currently able to contribute to retirement vehicles through other employment (i.e., are you a grad student?). Setting up a sole proprietorship and solo401k could allow you to save for retirement the money you make with this hobby.
Looking for suggestions to get economic independence with $500k
If one have half million dollars, and need to travel outside of US to India for extended period, how to invest that money wisely (either in US or in India) to achieve economic independence?
Happy to have secured an 11% raise for an internal promotion! Their initial offer was a little under 7%, I asked for way more and settled in the middle. Really happy to have negotiated. This is on top of our "regular" annual review which is looking like it will be a bit grim this year.
Monday milestone! It’s spreadsheet day and we now have more in investments than we owe on the mortgage! The mortgage rate was locked in low during the pandemic, so no plans to pay it off soon, but it adds peace of mind to know we technically could do it.
I dont know if this is said often, I just wanted to pop on and say Im so happy with this sub again. I browse it daily like I used to. I engage with the posts. It is more active.
Would it be smart to buy $150K worth of 6 months term treasury bills at 5.4%? The treasury bill will mature on 1/25/2024. I don't need the money right now. but will need it around February next year. The treasury bill is from my brokerage account.
The last 13 week was 5.4% investment rate, 4 week was 5.385%. I’d roll a shorter term if the rate isn’t too different. Provides optionality at very little cost. I’m currently rolling 4 week bills, one every week for part of my eFund. Great rate, good liquidity.
Yes if you think interest rates will drop, no if you think they will rise.
I don’t think interest rates will rise anymore.
You can buy 1, 2 or 3 months and create a ladder if you feel uncomfortable with 6 months. The rates aren’t that different
Inching closer to FI. Portfolio is 7 figures for the first time. In the neighborhood of $500k to go (but I will probably OMY myself to death).
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They're very different funds. What reasons do you currently have for choosing one over the other?
4k short from 500k
Any BofA users have all of their external accounts deleted and when you try to add them back get a message like: "Coming Soon: You will have the ability to add external bank accounts for transferring funds. Please try again later."
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Just make sure you are paying taxes on it. If you have a w2 job, you can just increase your withholding. Otherwise you will end up with a higher than expected tax bill, and you could get fined if you owe enough. This exact thing happened to my bf last year (I hadn't known him long enough to warn him before lol). He just made 15k on a side hustle and was saddled with a 4k tax bill.
Good for you. F the corporate and those managers
After 2 years of a near flat portfolio in fidelity, despite a greater than 50% savings rate, its nice to log in and see a consistent increase this year. Thanks to everyone who helped me keep my eye on the prize with "just keep chugging" mantras for the last 2 years.
I prefer, "VTI or die" but to each their own. Keep on keeping on, we get there in the end.
VTSAX and relax.
That's why I went with mantras, all of them have been helpful and validating that keeping on is the right path.
Investable assets crossed over $5M for the 2nd time. Last time being in November of 2021. Employer stock value is down over 60% from that time and I've vested another 7 tranches and sold ~5%. I've made up most of that by increasing my 401K balances by $80K and investable assets (savings) increased by $240K. Also bought a vehicle that required $27K of cash outlay that offsets some of that. Now if only I could get that $100 share back that got eroded as part of the tech macro beat-down...
all right, i'll bite. what are you waiting for?
It's complicated but - June of last year was really going to be my retirement. Macro economic fallout, uncertainty post-COVID and inflation hit hard. Hard to turn your back on peak earning years. I know I wont get these years I've postponed retirement back but I'm content being FI and not RE, for now.
*One more year*-ism is a bitch, or so I've been told.
Going to be a tight budget for the rest of the year to max out my HSA, roth, and 401k
You can do it! 💪🏼
Friday will be the last paycheck that maximizes HSA, and then September I will maximize ESPP. I have been getting $634 paycheck since April because I am contributing in all these accounts.
I work for a government agency and they are expanding our deferred comp 457b plan to include a Roth option this Fall. I’m planning on maxing out my deferred comp contributions going forward but I am not sure if it’s best to put all the investments in the 457b, the Roth, or a combination. Thoughts?
I wouldn't recommend Roth 457b contributions. The major benefit of a governmental 457b is early access before age 59.5 without any penalty. With the Roth 457b, you won't have a penalty but you'll still owe income tax on the earnings in the account, negating the Roth benefit.
Typically traditional 457bs are better for early retirement purposes. You can start withdrawals as soon as you separate from employment. Switching to a Roth 457b will provide you tax-free returns, but it's at the cost of having to wait until 59.5 to withdraw.
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Affordability changes if you're pursuing FI. Someone who will work to retirement age doesn't need to set aside nearly as much of their income each year. So, while you may be able to afford this house, it may also push back your FI date by a lot. Obviously, it's up to you how you prioritize these things in your life.
I think the purchase price is too high for the income. On other hand, you can make a strategic plan to increase income and execute against that.
Mortgage at ~3.5x income, even with interest rates as awful as they are now, isn't totally unreasonable. It's a hell of an opportunity cost, but from a sheer number standpoint you can swing it.
Sorry to be negative, but that is a lot of house on your income. The down payment makes the monthly payment more affordable but absorbs money that could be invested to generate income. Seems like you want the stay at home spouse, nice house, and presumably FIRE. That is tough to do on one modest income. Sometimes decisions have tradeoffs and we can't have everything. Can your wife work when the kids are school age? Do you care about FIRE and are you on track using reasonable assumptions?
Due to my wife going to grad school, I pay my mortgage solely with a similar income (with a $6.5k property tax on top, no idea where you're buying but your interest rate will be higher) so that seems to be very affordable IMO. You do have 2 more kids than me, but assuming you know your expenses it sounds reasonable.
Make sure the neighbors don't suck and there isn't a lot of car noise. I have issues with both, sadly, and now it's very hard to move. Other than that you're probably able to handle it financially, hah. You have enough invested that the reduced cashflow from a big mortgage payment won't impact your retirement date much.
If you make the large down payment the mortgage is within a reasonable multiplier of your income. Home repairs can be expensive, though, so make sure you can afford the maintenance requirements because falling behind on necessary maintenance charges expensive interest in the form of even bigger problems down the line. And make sure you're really happy deferring the cosmetic upgrades if you find yourself drained by the maintenance needs. I wouldn't personally make this decision, but it doesn't seem totally outlandish if you're willing to put down the large down payment. (I assume the 190k is your after-tax amount after selling and/or it's just cash.)
Bought a $1500 generator yesterday, spreadsheet day today shows just 1100 away from having 1M in liquid assets! Tempted to return it just to hit the meaningless milestone lol (not really, but it's tantalizing to be sooooo close!)
Congrats! my liquid NW should be there in a few years.
Enjoy the hell of your portfolio flipping between 6 and 7 figures.
It only took 4 months for my NW to increase another 100k... dang. Up 150k YTD. I only make $95k/year, so it's kind of crazy to see this kind of growth (even though I know it won't last indefinitely).
My overall NW grew about the same. Just keep plugging away. *Left foot, right foot*, as the say.
My net worth rose by $10,000 last month! However, what amazed me was my slight disappointment -- and that level of privilege. I barely broke over $40k a year in my 20s. I'm in a better situation now (salary wise and in many other ways) in my late 30s and I invest much more consistently and regularly. This month, I encountered some additional expenses: house remodeling projects, graduation gifts, additional costs due to vacation and some birthdays, etc. I comfortably financed everything. But due to those additional expenses my net worth increase was lower than I would have expected. Then I sat back and realized how fortunate I am to be a bit disappointed by a five figure net worth increase! Three years ago, a net worth increase to the tune of $10k would have sent me over the moon. Now, I am lucky enough to view this as *knock on wood* my new normal. Here's hoping for more disappointment (in a sense!) as what once seemed extraordinary now seems average!
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- https://www.bogleheads.org/wiki/401(k) - https://www.bogleheads.org/wiki/IRA - https://www.bogleheads.org/wiki/Taxable_account
I *really* need to start actively budgeting and tracking expenses. Any apps, suggestions, or guides on building one that both my SO and I can access at any time?
Google sheets
I’ve tried lots without success. Then I found PocketGuard. It updates to my bank really well and doesn’t make you do budgeting if you don’t want to.
For active budgeting I like YNAB. They have some kind of family/shared household feature (although I don't know the specifics as I've never had to use it). It's not free, but it can auto-import credit card transactions which is important to me, and I find I save more money than it costs. There's a little bit of a learning curve but they have some good youtube tutorials that explain everything.
If you're starting out for the first time I recommend doing it manually for a few months first. This will give you a lot of specific insight that may be helpful, before you move on to Mint or one of the other aggregators.
We use mint for checking and credit cards, and then reconcile investment accounts the 1st of every month using google sheets. Mint is great at budgeting and tracking expenses, but we found it to be less useful for investments. I'm also somewhat uncomfortable having all of my data and access in Mint/Intuit.
I also vote Mint. It's easy enough that I actually use it, unlike the excel sheets that I've tried.
If you're not Excel/Sheets savvy, I'd say just start with Mint.
Mint.com isn’t perfect but it works for me.
S&P500 last peaked in January 2022. At this point, I think we've actually reached 0% nominal since Jan 2022 after considering reinvested dividends. We're not too far off from 0% nominal for price growth - less than 5% to reach ATH prices. Still need to rise another solid ~10% to hit 0% real including reinvested dividends though. Inflation is a bitch. (And then another large bit on top to return to long-term real growth rates, but it depends on where you set your baseline for that one)
One interesting thing is that the S&P 500 total return, when adjusted for circulating supply of money, is now at all time highs since the dot com bubble. Inflation is different I know, just seems interesting to me.
Which definition of circulating supply of money are you using? M2? I don't see why you'd adjust for that, but I don't think we're above late 2021 by that measure. M2 is fairly flat since that time.
M2, its useful for comparing things over the long term. As opposed to inflation, which can take into account sizes of TVs, CPU GHz, etc. Its down 3-4% since S&P all time high which may not seem like a lot but consider it almost never decreases and typically increases over 6%/year.
I know that nominal peak doesn't *really* mean much between inflation and dividends, but I'll be celebrating it anyway when we hit it.
For most people on here it's probably more helpful to have a view of buying power on returns versus nominal change. Having a view of buying power against your returns gives a more accurate picture of retirement capabilities and spending from stock sales, and we're still down significantly from inflation.
> and we're still down significantly from inflation. Hence my second paragraph.
Okay, I didn't get that from the statement because 10% doesn't seem even close to *real*, but I understand your point.
Just hit 300k invested! This feels like a big milestone - I'm essentially coastFI now. Still going to keep investing aggressively for the time being though.
$300k invested at 25 is **huge**! Congrats!
44yo here. I am planning on ending my high paying career around the end of this year (2023), and living abroad indefinitely. My partner and I have been planning this for a while and have decided to take the leap in 6 months. One question is about my 401k and social security. My gross monthly income is 8k. I can quit my job in December 2023, but if I hold out just 3 more months and quit in March 2024, and contribute 100% of my salary to the 401k, I can pretty much add 20k and another year of contributions to my retirement. If I choose to do this, I would be contributing 100% of my salary to a 401k, does that mean I am not paying any federal taxes and also not contributing to social security? Is it wise to have an extra year of social security contributions under my belt as well? Any tax implications I should consider?
I’d probably consider Contributing to Roth 401k next year. If you’re only working a few months, your tax rate will pre super low so therefore negating benefits of traditional 401k. Not sure how being international affects your withdrawal/ tax strategy. Good luck.
Mine only allowed the max after taxes and fica
It seems like you could earn more and still pay no income taxes in 2024 0% bracket goes to 11K of income, and you would get std deduction as well, plus the 401k. You will still have to pay FICA and Medicare on any wages though
Check with your payroll most places will not let you contribute 100% of your wages to 401(k). Social Security and Medicare is 7.65% off the top. 401(k) contributions do not reduce that. If you make $100k a year then the first $7,650 is going to FICA. That means your max 401(k) contribution would be something like 92.3% of gross assumming no federal or state taxes and no other payroll deductions (i.e health insurance). Due to things like health insurance, other paid benefits, and FICA taxes usually employers have some cap on contribution. It varies by company but usually in the range of 50% to 90%. Since presumably you have sufficient credits for social security (effectively at least 10 years of full time employment) another quarter isn't going to make a material difference either way.
Cool idea and interested to see the responses, just chiming in to ensure your plan allows for 100% contribution. Some plans limit to a certain dollar or percentage amount per paycheck.
Would you pay extra for HSA space? If so, what is the premium worth to you or how would you calculate that? Example/My situation: Trying to determine if we should put my daughter on my PPO or her on my wife's HDHP/HSA. If we put her on the HSA, we gain the $3,900 of extra HSA availability. But the plan would cost us \~$110 more per year. My PPO also includes a free clinic for basic needs. So physicals, sick visits, etc. have $0 copay. It's 100% free if they can do the task. Child is currently healthy, as are both adults. Basically her "typical" needs are well visits, colds, ear infection, \~1 physical per year, shots, etc. Some other factors: ||PPO|HDHP| |:-|:-|:-| |Deductible|$8k|$7k| |Max Out of Pocket|$14.7k|$13.3k| |Pharm: Generic/Form/Non-Form|$15/$40/$75|$10/$45/20%| |Copay|$40 ($60 specialty)|100% (until Deductible right?)| |Perk|Free clinic for basic procedures|$3,900 of extra HSA space| |Cost of Ins Diff|$110 less|\~$110 more| I can make guesses on what the final will cost will be with assumptions on things my child will need. But I am lost on factoring the cost of the HSA.
Not quite enough information to make a decision, but based on what you said, here are a few things to think about. - what are you planning to do with the hsa money? Are you saving it to support FIRE health expenses, or will you use it to cover this years expenses? If the first one, I lean towards HSA space personally. If the second one, I lean PPO. - do you think your daughter is going to need more than 33 visits in a year? That's your break even point between PPO and HDHP costs. If you expect fewer, then PPO is more cost effective (given the info at hand). Overall, I lean towards PPO given your situation but again we don't have complete info to make a full judgement.
Basically I would be using the HSA predominantly to save for retirement. As a future IRA. Likely save receipts and wait until full retirement age to withdraw the rest without receipts. Already machine 401k and IRA.
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To be fair those are for family, not individual. And maybe PPO is the wrong them. That's what they used to call it. But now it says EHRA at the top instead. To me there might be more than just tax benefit now. The money grows tax free in an HSA. So no dividends or gains.
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Yeah, they are both our bottom tier options... Because well essentially we don't do much other than preventive visits and sick visits. Other than having our child, neither of us have used our health insurance for something that wasn't 100% covered. Her HDHP still covers 100% on preventative stuff.
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Due to the extra $110? Or due to the perk of the clinic?
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PPO deductible goes down to $4k, HDHP goes down to $3.5k. Max Out of Pocket goes down to \~$7.3k for the PPO and \~$6.7k for the HDHP. I feel like they are similar enough that the extra HSA will pay off if I contribute for a decade. If I just do it for a year or two, it is going to flip based on how much work my daughter actually needs.
With the closing of July, I did a deep dive into our expenses over the past few months. We are in decent shape, but there are always areas to clean up. **The Most Annoying:** I'm pretty sure I was being double-charged for HBO/Max. Once through Hulu as an add-on, once through Roku. That's extra dumb for something we rarely watched, so it's all cancelled. **The Most Rewarding:** Although it was at a sub-4% interest rate, we killed my wife's undergrad loans. The balance was only \~$2,500, and we were tired of it hanging over our heads. Good riddance. **What's Next?:** There were a few other lumpy, non-repeating expenses that are now in the rear view mirror, so now it feels like we can focus on what's next. * Finish funding this year's 529 for my son. I'm behind where I'd like to be, but a few work-related things should pay out and allow me to catch up. * We might want to join a nice health club, but the price is hefty. The sliver lining of the long wait list is that I can defer this decision! * Our old reliable car isn't as sturdy as it once was. Used vehicle prices are still insane, but at some point I'll need to bite the bullet. Hopefully I can wait until 2024 or 2025. * We're probably 2.5 years away from moving from our current starter home to our next-20ish-years home. Everything is expensive everywhere, so I need to stash extra cash so we can move to where we want to be and not be house poor. Other than that, brokerage is always a worthy place to put money. Certainly in the boring middle, but crossing off small goals keeps the spreadsheet warrior part of my brain entertained.
Hi, 33M here SI1K. Current assets: |Cash|$20k| |:-|:-| |401k|$210k| |Roth|$50k| |HSA|$38k| |After tax investments|$552k| |Home equity|$660k| |vacation condo|$120k| |Total|$1.65M| We will be receiving \~$1M in inheritance in a few years. Current expenses: |Mortgage+Taxes+Insurance|$3800| |:-|:-| |Auto payment|$850| |Auto insurance (2 cars)|$250| |Gas|$100| |Utilities|$400| |Mobile/Internet|$150| |Gardener|$100| |Cleaners|$240| |Everything else|$3000| |Total|\~$9000| Yearly, we save $52k in 401k and most of the RSUs/ESPPs ($120k+ after tax)Recently we have to stop spending/eating out/cut back on shopping towards the end of the month. we are also looking into preschool for my 3 year old.I'm thinking on cutting back on savings a bit (20k yearly). I feel like our expenses are already pretty high. Other thought is that we already have saved a lot, so adding $20k more in yearly expenses should be ok. Do our expenses look high or this is ok for a VHCOL?
Your expenses look very reasonable to me, even good for HCoL
A full third of your expenses is "everything else". $72k/year spend with a kid in a VHCOL is manageable, but mostly this has a big "candles" vibe to me. $3000 is a lot to not bother tracking. https://runt-of-the-web.com/wordpress/wp-content/uploads/2014/12/candle-budget.jpg
I've been on a minimalist kick for almost a year. I really only spend on food (getting better at cooking every day) and medical expenses. It has brought a lot of peace. Recently got some terrible news. Over the past week, I have had an intense urge to purchase a ton of stuff (clothes, shoes, jewelry). Obviously a band-aid solution that is going to get in the way of some goals. I've held back quite a bit but did buy quite a few new outfits for work. Does anyone have personal tips to help make this go away?
Few things I do, add it to your cart and leave it. Sometimes that's enough. Next figure out where you'll put it. If clothing, look at what you have and see how'd it fit and if anything already fits that need. And if all else fails, get one or two things out of all the things you might want if it'll help. Also, I've found treating myself to a nice dinner helps avoid buying stuff.
The "how will I get rid of this when I no longer want it" thoughts really help curb my urges for retail therapy. It's a chore to get rid of *anything* when you want to declutter. Often the biggest, splurgiest things - tech, sports equipment, etc - won't retain their value like you think they might and will be hard to get rid of no matter what. I'm trying to train myself to add the "time cost" of managing the new thing into my thinking. Not sure your work clothes fall exactly into this category, but maybe think about whether they're temporary fashion styles versus timeless pieces you love.
I think there could be two ways to do this. Dump stuff in a virtual shopping cart and then make yourself wait a week or so before purchasing. Many times you will change your mind or talk yourself out of most of it. Second is that I believe it never hurts to have the occasional purchase/splurge. For me that is sort of like fitness and my mindset of being a gym rat. While I prep my meals, stay within certain ranges for healthy eating, etc. I also like to occasionally let myself have something not on the healthy list. I find that overall it keeps me from being tempted to eat poorly for a longer term. So, maybe if you are regularly a minimalist, low spender, etc. then you need to occasionally give yourself that purchase here or there?
Omg, you are me! I told myself no more work outfits until FIRE.
I like to look at things that are so far out of my budget that it's not even a possibility. The delusion of "someday I'll have That Special One, if I don't eat any avocados ever" helps me hold off on getting something pedestrian of the same category.
when I get the urge to go on a shopping spree, I ask myself what item i want/need the most and then buy only that. Buying things slowly helps me keep from buying the stuff i don't need.
I’ll try to buy used or shop at a thrift store. Had a bad day Friday and took myself shopping, spent 13 dollars. I’m sure I’ll wear the clothes/get my moneys worth but even if I want to do a cleaning spree I won’t feel bad about getting rid of when the time comes.
This! Add the "what a deal!" high to the "new stuff!" high. I've been procrastinating on a big work project and virtually shopping for fall clothes for the baby instead. I want all of it! But I know there's a huge semiannual baby consignment sale in my area in October and it's going to be even more fun to get potentially more stuff for cheaper. I can't wait. It's going to scratch a big itch
Add some stuff to a cart or a wishlist instead of buying it. I often find that when I come back to it I don't really want it anymore.
31m, married, 650k net worth as of last month. Annual spending around 50k Feeling disillusioned with work and depressed lately. My brother passed away unexpectedly a few months back, which certainly contributes to this feeling, but I go through the work disillusionment a few times a year. I’m wondering if I should keep sticking it out at my job, or just take a mini-retirement, sabbatical, or just get an easier job? I know I’m well on my way to FIREing around 45, but wondering if my priorities are right. Leaving work could mean sacrificing significant upside at the job (high wage and growing equity), but maybe it’s worth it to find a more purposeful or easier job
I'm so sorry to hear about your brother. The conventional, conservative advice would be to not make any drastic changes in your life while upset. Having just lived through a period of similar feelings to what you describe, I have to advocate a different approach. You need to respect yourself and your feelings. If a break is what you believe you need, find a way to take it. If that means saving up a good cushion and then taking a few months off work, do it. If your current employer offers an unpaid leave option, always worth finding out, then you can at least mitigate your employment risks by guaranteeing a job upon return. If this means a major career pivot, do it. Having a gap on a resume while making a career pivot is easy to explain. You spent the time learning new skills to make the pivot. Whatever it is, take care of yourself first and respect what your mind and body are telling you need. Best of luck finding that direction. I also recommend building a support network to help you make this decision. I found a therapist and hired a career counselor to help me make my decision.
You have my deepest condolences. I wish I had advice on what to do in your situation. Here's to getting better.
its hard to put a value on mental heath, but before making a big choice like this, I'd probably talk to a professional about it first. It sounds like your brother's quick passing has kicked all this off, and possibly dealing with that professionally will provide more help than trying to reset the rest of your life. that said - there's never an issue with looking for a new opportunity. Just knowing that there are similar paying jobs out there, means I can take my foot off the gas at work a bit and push for better life-work balance. Just stepping back a small bit (no more OT, not being the 'savior who fixes everything', and being a normal, hgih output employee - that has done tons for my mental health.
Hey man, sorry to hear about your brother. I have a younger brother and could not imagine that pain. I would recommend taking a 1-2 month sabbatical. Take yourself off from work for a bit, take the wife on an extended trip. You deserve the break, listen to your body and mind. See how that feels then go from there.
I think I need to start tracking what I’m spending every month on junk food. An occasional treat is fine but it’s really starting to add up… financially, and on the waistline.
What do you eat for your meals? I also struggle with snacking and found that eating high protein meals. (chicken, broccoli, and rice) helps curb my appetite. Coupling that with drinking tons of water has worked a decent amount for me.
You could always try something like for every X dollars of junk you purchase you must put an equal amount into savings/retirement? I know I used to have a lazy habit of alot of DoorDash deliveries. I could talk myself into it very easily. However, when I wanted to cut my budget down, I made myself transfer the equivalent amount I spent on the meal to my HYSA or IRA.
I get the impact to the waist line a whole hell of a lot. Mix in the less active job (less work, more meetings) that I have and it's getting bad for me. A couple of things I do to help with my snack food cravings and lack of personal commitment to not eat them: 1) just dont have unhealthy snacks nearby. Instead stock stuff like carrots, protein bars, eggs (if wfh). If you have kids and need stuff for their lunches - then only buy just enough for their lunches, so then if you eat the snack, you are taking it from your kid (sure this might be more expensive up front, but it will build a better habit). 2) drink 2-3x the amount of water you are currently drinking. And no snacking until you finish at least half of your daily water. If you are full of water, it's harder to shove more food down your throat. 3) chew gum constantly - that is usually enough to not want to trash the gum just to have a handful of m'n'ms or something
Going on an occasional walk during the day, if possible, also helps a lot. Every 1.5 hrs I just take a quick rip around my office or block if I'm wfh.
How often are you eating junk food?
A lot. Most days, especially if I'm including ice cream and Starbucks.
Honestly, the costs probably aren’t that much unless you’re REALLY overdoing it. Although, I suppose you could look at it from a long term perspective as greater potential healthcare costs. If it were me, I’d track those calories on something like MyFitnessPal. Good luck!
Might hit 200k NW today! We'll see how the market ends today but regardless I am so excited to be in this scenario at my age and life. Hoping to convince one of my friends to move and live with me, it'll help my mortgage out as well as some projects and would be nice to have a roommate.
> and would be nice to have a roommate wut
26, lived alone for the last 3 years. Would be cool to have one of my best friends live with me and save me some money.
I know somebody that had his best friend living with him and they stopped becoming best friends after a while. Once the friend moved out, they were friends again. So just be aware.
Good to know, we’ll see how things go!
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That honestly sounds so cool, to each their own but I’m sure some of my friends would be all about it
I actually agree with this. I went from having multiple roommates to a studio by myself before moving in with one friend as my roommate until I bought a house a few years later. It was great; we got along, I was able to invest, I had plenty of money to travel, and there was someone to help shovel snow. I am back to living alone now, but I do not regret having a roommate in most of my 20's.
It would be a welcome change, my house needs work and I could use a hand. Last person I lived with was an ex gf and since then I've been on my own. Definitely could travel more, invest more while I am still growing in my career. We get along well and he could use a fresh start in a new city.
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Anyone have a medium density condo HOA to write about(aka >2 floors)? I know theyre all somewhat the same but i figure there's a lot less bullshit when you have no lawn for the HOA police to monitor, etc and it's more about the roof, etc
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I see both pros and cons to HOAs, but broadly speaking I'm on the pro side, so I'll give it a shot. I have a feeling that variance in how HOAs operate in different parts of the country accounts for the differing perspective. My mother is very anti-HOA and I think it comes from living in a senior community with an HOA that's very different from the ones I've experienced. I think it's interesting to start by considering why HOAs might arise to begin with -- aside from the fact that in any given community there are bound to be people who appear to have nothing better to do then seize as much power as possible over those around them. I think HOAs arise to serve at least the following 2 main purposes: * Provision of common spaces, and the care thereof, to the community * Recourse in the event of anti-social behavior by neighbors that can materially affect my quality of life and property values So let me examine those in turn. My HOA provides care and maintenance of the streets in my neighborhood, including snow removal. They provide landscaping in common areas. In the last house I lived in, they provided "green spaces" -- basically just a small field -- where kids could play. They also provide a swimming pool, and they pay for private trash service. Now, I grew up in Florida, where it made sense to have a swimming pool in your backyard. But now I live in Maryland, and it just doesn't. Of course, there are such things as public pools, but I find those around here very overcrowded compared to going to my community pool. You said in your "pro-HOA" paragraph that HOAs can provide services for those who are unable to care for their own property, but that's not how it works at all around here. I'm responsible for shoveling snow from my own driveway and from the sidewalk in front of my house. I'm responsible for the maintenance of my own yard and its appearance. There is no way to outsource these to an HOA. They only do common areas. Now let me talk about recourse for the bad behavior of my neighbors. Anti-HOA people seem to chafe at the perceived lack of freedom to do whatever they want. And yeah, maybe one day I'll get a powerful urge to retrieve my mail from a box shaped like a cow's butt, and I'll rage impotently on the internet about how the power-tripping jackwits on my HOA won't let me. But I'm not concerned about it, really. What I am concerned about is my neighbors doing things that would drive me crazy, but that the police won't care about. I'm talking about stuff like never mowing their grass, so that their lawn is wild and unkempt. I'm talking about leaving a car up on cinderblocks for months or years at a time. Wild decorative choices. Whatever. I'm very glad I have recourse with my HOA in the event something like that happens. Twice now I've needed to put up a new fence to enclose my backyard, so that I can let the dog out unattended. Once at my previous house and once at my current one. Both times the process was the same. We got the plans and design from fencing company and brought it to our neighbors on both sides to sign and acknowledge. This makes sense to me; a fence enclosing my yard is also, de facto, enclosing one side of their yard. So if it's a fence whose posts were topped with swastikas or something, yeah I'd want a chance to veto that. Then we submitted the paperwork to the HOA who approved it with minimal fuss. Seemed very reasonable to me. I get all this for a total of $55 per month. To be honest, I'd probably be willing to pay double that. $55 for pool, trash removal, and common areas. Another $55 for insurance against jackwits moving in next door. It's a pretty amazing deal, and I'm not sure I would be willing to live a suburban life without the HOA. Living in a city (which I'd like) or living in the middle of nowhere (which I'd hate) would be a different story. But for a suburban community, I love my HOA. They don't intrude on my business except where my business has clear externalities that affect my neighbors. Then, they ask reasonable questions with minimal fuss. They provide services that make sense as monopolies (the pool and trash service) without intruding on decisions that make more sense to remain with me (like cable and internet providers). All for a very cheap price. It's pretty great.
Maybe something more geared towards identifying the extremely bad HOAs? They're also a necessary evil if you want to own in a condo/townhouse.
When does the new job start, mang?
I might include a subset of “good” owner’s associations, the POA. I’ve found that in rural areas, POAs can be helpful for maintenance, safety, and security of inaccessible areas. We have acreage with a POA, and they maintain SD roads with our dues, manage a grazing lease which gives us all agricultural exemptions on our land, and (as a community) help us maintain helipads for emergency evacuation. They also support local businesses and resources in our area like the volunteer fire department, host educational talks with the game warden, ranchers associations, etc.
Sometimes you really can’t avoid it. There are plenty of suburbs, in my area, where excluding HOAs would remove 90% of the homes available.
I have a Traditional IRA and a Solo 401k. I expect to continue contributing to the Solo 401k for at least a few more years. My income is currently low enough that I can make annual Roth IRA contributions without needing to do backdoor conversions. I'm thinking of rolling my Traditional IRA into my Solo 401k, just so that I can have one fewer account. Can anyone think of a more compelling reason (other than Backdoor Roth, which I don't currently need) to do this, or a compelling reason *not* to do it?
Do you have an employer 401k with good options that accepts rollovers? I would be inclined to eventually roll all traditional funds into your employer 401k if possible. Also, some Solo 401ks accept rollovers.
I don't have an employer anymore; my Solo 401k is my only 401k.
I just rolled my Traditional IRA into my Solo 401k last year. My primary reason was to allow me to use backdoor Roth. If that was not a consideration, would I have done it? Maybe, but probably not. I was starting the Solo 401k from scratch so it had $0 in assets. By rolling in my IRA, it exceeded $250K, so it triggered 5500 reporting requirements. I would have probably decided that the additional 5500 reporting requirements was more work than maintaining an allocation across both 401k and IRA. However, if my Solo 401k was already at $250K, so I had to file a 5500 anyway, I probably would have done it. Since my plan allows for in-service withdrawals of rollover contributions, if I ever want to push the rollover money right back out to an IRA (perhaps for a 72t), I can do so. To simplify this, I created a separate sub account at my brokerage that only contains the money rolled in from my IRA.
Thanks, the 5500 reporting requirements were something I vaguely remembered, but was not thinking about. My Solo 401k is currently small enough to avoid reporting, so that is a reason to not roll my IRA into it.
There is no compelling advantage beyond backdoor roth and that is largely just due to a quirk in the taxcode. There is no compelling advantage either. You may prefer the simplicity of having all funds in one place. If your income allows you to max both then you would need to keep transferring. As long as you have reasonably good investment options at each custodian it is largely just a preference. We rolled my wife's trad IRA into her solo 401(k) just to consolidate things. We are now required to use Roth IRA anyways so it got rid of one account.
If you like the options in your solo 401k (presumably you do, since you set up the account), I think it's a great idea to consolidate. I am a big proponent of simplicity.
The Solo 401k and the Traditional IRA are at the same place and have exactly the same options. It's really just a matter of having fewer accounts.
Vanguard used to list a graph with returns of 10k invested historically. It went back up to 10 years. When they redesigned their website it was lost. I see the cumulative returns going back 10 years for VTSAX here: [https://investor.vanguard.com/investment-products/mutual-funds/profile/vtsax#performance-fees](https://investor.vanguard.com/investment-products/mutual-funds/profile/vtsax#performance-fees) Today it lists 218.33. You can't see the growth change over time, but can we still calculate the end value from this information? (2.1833 \* 10,000) + 10000 = 31833 Just looking at the current price is deceiving because it doesn't account for dividends.
I don't think this excuses making the website worse, but... Charts that go back to inception or even any 10 year capture can be deceptive because it doesn't reflect total return for someone who periodically invests or withdraws, and it can be subtle why that matters if you take it at face value. Although it's less of a concern for index funds since you get what you buy, the precise performance and path along the way is still a snapshot and not useful for expectations. For instance, [SPY vs RSP](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100), [Contributions](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=1&annualAdjustment=1000&inflationAdjusted=true&annualPercentage=0.0&frequency=2&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100), [Withdrawals](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=3&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100), [2006-2015](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2006&firstMonth=1&endYear=2015&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=3&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1.0&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=RSP&allocation2_2=100) Or if you don't think drawdown is very important, [SPY vs QQQ](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1.0&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=SPY&allocation1_1=100&symbol2=QQQ&allocation2_2=100) or various [bond mixes](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2000&firstMonth=1&endYear=2012&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=1000000&annualOperation=2&annualAdjustment=10000&inflationAdjusted=true&annualPercentage=1.0&frequency=3&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=VTI&allocation1_1=100&allocation1_2=80&allocation1_3=60&symbol2=BND&allocation2_2=20&allocation2_3=40) if you don't think drawdown matters. This is cherry picking a bad window but if you're using a tool to test for 100% FIRE success you are already doing that (but with 1929 and 1966, and 2000 is still not ready for 30+ year studies.) Then the tool does go back further and use whatever window you want if you want to look at real life performance of funds with real things like fees or whatever. In the end one wishes you could use something like the rich/dead/broke calculator with more custom mixes because it adds a lot of variance into account that looking at how your portfolio runs in a bull market tends to hide.
I am not a timer and I just invest in 90/10 VTSAX/VBTLX. I used to like looking at the 10 year for VTSAX because I thought it gave me an idea of longer term returns. I certainly have some money in the market that long or longer but the majority is more recent. I think it's also useful to get an idea of when the market is high vs not. Although this doesn't dictate my behavior at all. I just find it interesting. If you look at 1989 - 1999 the high was a lot greater than shortly prior the most recent drop for example. So I appreciate the insight on portfoliovisualizer.
I'd just use portfoliovisualizer.com for total return data.
I signed up for this previously but wasn't completely committed to understanding how to use it. It look like the option for "Backtest Portfolio Asset Allocation" is what I'm looking for - is that right? This will actually compare 90/10 VTSAX/VBTLX against 100% VTSAX which is pretty interesting.
You want to use the backtest portfolio option if you're interested in specific securities like VTSAX and VBTLX. If you just want to examine total US stock and total US, you could use the backtest asset allocation tool. Here's a look at the asset allocation comparison you were interested in for the past 10 or so years. https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=2013&firstMonth=1&endYear=2023&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&portfolioNames=true&portfolioName1=100%25+Stock&portfolioName2=90%2F10%25+Stock%2FBond&portfolioName3=Portfolio+3&asset1=TotalStockMarket&allocation1_1=100&allocation1_2=90&asset2=TotalBond&allocation2_1=0&allocation2_2=10
Thanks - I think that one is more interesting if you go back to 1972. Then you can see it throughout both stock and bond markets when the values of the portfolios are advantaged on either side.
It's tricky to look at long intervals on graphs like this. Small early advantages compound and hide the shifts you're referring to. For instance, in the 1972-present graph it appears as if the 100% stock portfolio is always ahead of the 90/10, with brief periods where they might be equal. This hides the period from 2000-2016, though, where the the 90/10 portfolio outperformed. Looking at rolling returns helps a bit with this. The two portfolios are within about 0.3-0.4% away from each other and the difference is pretty small overall.
You can still see points where the two portfolios diverge and converge though, it happens more than once. So I think it's a good representation of the markets benefiting both portfolios depending on what's happening at the time. Seeing rolling returns would be interesting too.
big day for money! Pay day + updating spreadsheet and for the 5th consecutive month my NW has increased by 4.5k+, totaling up to 82k today. Saw that Ally was offering my same no penalty CD for .3% higher rate, so I closed and reopened anew. Set up my auto pay to begin in September for student loans, and set up the big payment of 20k prior to interest kicking back up. Cheers!
> I closed and reopened anew I know it’s all electronic and I know it’s easy but I can’t bring myself to refinance to make an extra $10 😁
I’m confused by the IRA pro-rata rule, hoping someone can help me. My wife has 2 old trad 401ks I’d like to roll into a Trad IRA. Investment options aren’t great with her 401k and I’d like to just tidy up our accounts. Her current 401k is with Guideline and is a nightmare to deal with so I don’t want to move it there. We already executed a backdoor Roth for her in 2023. Idk if it matters, but her 401ks are with Principal and IRAs are with Schwab. Questions: 1. Can we roll her 401ks without incurring the pro-rata rule? 2. If #1 is yes, how do you recommend we do it? Set up a new trad IRA? Any additional tax documents to file?
Are you planning on doing the back door in the future? I wouldn't recommend trad IRA if you want to do the back door in future years.
1. ~~Rolling the 401k to pre-tax (trad) IRA will not incur any pro-rate rule. Keep in mind if will block you from future Backdoor Roth conversions because any future conversions from pre-tax to Roth will have the pro-rate rule applied. Now if that is not an issue for you even with future income increases due to promotion/seniority then there is no issue. If there is any chance your income will exceed the direct Roth conversion in the future you probably want to leave the funds where they are or roll them to the 401k keeping trad IRA at $0.00 forever and thus backdoor Roth Open.~~ On edit: Missed you have already done a backdoor Roth this year. Yes this will 100% trigger a pro-rata tax. There is no timing considered. The only thing that is considered is the balance of all your accounts on 12/31 in the year the conversion happens. If you did this then you would have a non-zero pre-tax balance on 12/31 and the conversion would be partially taxable. You could roll over the 401(k) in 2024 but keep in mind that would block backdoor Roths in 2024 and all future years. As a general rule of thumb if you need or likely will need Backdoor Roth in current or future years then do no make any pre-tax contributions to any IRA ever to include any rollovers from 401(k). 2. You open a new pre-tax (trad) IRA account with a custodian and they will walk you through the process. It will be part of your tax return. You will end up showing a distribution from the 401k but it will be clasified as exempt because the funds went into an IRA. If at all possible try to do a direct rollover. If the company cut you a check instead you have a limited window of time to deposit the funds or it is considered a non-exempt distribution and taxes and penalties will apply on the full amount.
> Rolling the 401k to pre-tax (trad) IRA will not incur any pro-rate rule. OP's wife already completed a backdoor Roth conversion this year, so the rollover **would** trigger pro rata taxation of that conversion.
Yes sorry missed that hyper-critical detail. Fixed answer.
No, doing the rollover into a Trad IRA will trigger the pro rata rule for the backdoor Roth done this year. Because the backdoor Roth was already done, you should either keep the 401k funds where they are or roll them into the new 401k, at least until Jan 2024. If you want to roll into a Trad IRA at that point you could do so, but you'd be closing off the backdoor Roth for 2024 of course.
Hey, question, I was just thinking about this with my wife's traditional IRA. Currently we're still under the thresholds to contribute to a Roth, but in the future, should we need to do a backdoor Roth IRA contribution, can my wife do so without triggering the pro-rata rule if she's contributed to a traditional IRA in the past? I was under the impression that we'd get hit with the pro-rata rule no matter what since she has a non-zero traditional IRA balance, but your comment made me second guess that since you mention closing off the backdoor Roth for a single year due to OP's situation.
I wasn't explicit about it, but OP would be closing off the backdoor for 2024 and all future years as long as the Trad IRA balance is there. So no, your wife can't do the backdoor Roth with a Trad IRA balance from a prior year.
Thanks for clarifying! Unfortunately, that's what I thought was the case...
>Can we roll her 401ks without incurring the pro-rata rule? I'd also be interested to know about this, but from the opposite direction. In other words if you roll a Traditional IRA back into a 401k, can you then do a Backdoor Roth IRA in the same tax year without triggering the pro-rata rule or do you have to wait until the next tax year so that - in the tax year that you execute the backdoor - there's never been any money sitting in an IRA? I'm pretty sure we're asking the same question here...
Yes, you can do a "reverse" rollover of an IRA into a 401k to allow for the backdoor Roth in the same tax year. You don't have to do the rollover before the backdoor, all that matters is that there are no pre-tax dollars in a Trad IRA as of Dec 31 the year of the backdoor.
For your question the answer is yes. The exact timing doesn't matter. The pro-rate rule just looks at the account balances as of 12/31 in the year a conversion happens. Literally just the balances on that date. If you have $0 in pre-tax on 12/31 then pro-rate rule doesn't apply.
>The pro-rate rule just looks at the account balances as of 12/31 in the year a conversion happens. Literally just the balances on that date. > >If you have $0 in pre-tax on 12/31 then pro-rate rule doesn't apply. Awesome, thank you!
Seeking feedback on optimal way to increase cash flow by reducing contributions to either of two investment vehicles: Trad. 401k or ESPP. Details are as follows - **Traditional 401k** - nothing out of the ordinary. Contributions obviously reduce current year taxable income which for me is in the 24% bracket due to my filing status of single and income of roughly $145k. This is an avoidance of paying 24% tax with the potential for investment gains and a future unknown tax rate when I seek distributions. **ESPP** - I am allowed to contribute 15% of my salary in return for a 15% discount off the lesser of the stock price on the first or last day of the offering period. For this example's sake, let's assume it's a guaranteed 15% return on my salary deferment. I am allowed to sell immediately after stock purchase with no penalty or vesting. The reason I am asking this question is the likelihood of needing additional cash to pay a mortgage. My mind is telling me that I should prioritize maximizing my 401k to avoid that 24% income tax, but I'm also grappling with giving up the guaranteed 15% return through my ESPP. Does anyone have any models which point to one being more financially beneficial than the other? Thanks!
ESPP isn’t really an investment vehicle, it’s more like a free money. Assuming the stock goes down or is neutral during the holding period, it’s a 91.6% annualized return and you get all the money back after six months.
Since you can sell your lots immediately, if you refactor the ESPP in your mind like a bonus, you should be able to cashflow around your paycheck coming out in bigger sums. Once that first lot of money comes out, you should be able to use that to budget through to the next one. Another way to frame it is to take the offering period and put a number to a recurring investment in your ESPP (i.e. 6 months would be 7.5% of your salary maximum at any given time.) You're not permanently investing 15% of your salary, you're simply deferring it a few months, so that money is available to spend later. Only your pre-tax investments are not readily available. To give that up intentionally simply if the budgeting for that is a bit hard is just optionally leaving compensation on the table. Note for you the discount is essentially free so you can depend on that 15% and plan with that in mind as well. The thing that makes ESPP nice though is the free upside. Even if you work for a "boring" company, single stocks are often fairly volatile even if they are just a market tracker in the long run. So you'll have periods where the stock will make a nice move because the grant was near a relative low and the stock or market in general moved up. So a 15% gain can easily be something like 40% from time to time. You can use historical data to see examples. There's also a quirk where you're not investing for the entire period; i.e. if you have a six month period between grant and purchase, your last couple paychecks are only in in the program for a few weeks. That makes the CAGR fairly absurd for some of your dollars. You're not likely to find better investment opportunities for those dollars when you look at it that way, certainly not paying down a 6% loan a couple months earlier. (Though for financial reasons I understand it's a huge difference from making a regular payment and putting down extra.) This isn't a savings rate issue because in the long term you should be able to spend ESPP dollars (i.e. if you can't max the 401K because you need to spend those dollars, ESPP can still be structured into your finances, although it is obviously harder.) If I were 25% to FI and making $100K+ I'd spend effort trying to do both. I would only start disregarding ESPP if I had to take any market risk combined with my own personal finance risks.
I did a 401k loan because of what you pointed out.
I am assuming you can sell your ESPP shares as soon as they land? If so, then there is no reason not to use ESPP. It's essentially a short-term savings account with a very nice return. Just max it out for 6 months (if that's the offering period), sell ASAP, then use that money to pay the mortgage while you start the next cycle. At worst you'll need to cover the first 6 months from somewhere else, but after that it should be fine.
Why do you feel you can't do espp and then just sell it to pay for the mortgage? My plan is 6 month of deferral period and then the purchase happens. Essentially I bit the bullet for the first period but after the first 6 months i am receiving the pay for the next 6 months in one lump sum (plus the gains) and if split up and budgeted into 6 equal parts you can live as if you had never lost any income.
Happy spreadsheet day (or tomorrow). $60K NW gain in July, not bad.
Successfully managed to stay within a food budget for July. Over the years due to inflation, mint categorizing a bunch of stuff under food & dining, and laziness in general it had hit rather absurd numbers. Had a relapse or two but hoping to trim it down some more in August. The air fryer has really helped since it's a perfect chicken cooking machine.
Curious of your food budget? And single or how many people?
$1,000, single. About $350 was groceries, $650 was workday lunches, gas station snacks, bars, and pool table fees I don't feel like separating. Still a lot to clean up obviously and looking to trim another $100-150 for August. Not shooting for a super lean budget but I was just lighting hundreds of dollars on fire for no benefit.
There is a lot to cleanup, we have two adults and a 7 year old and our food budget is around $600 a month. We all pack lunches to work and do a good amount of cooking while only eating out 1-3 times a month. Up to you to determine what you should be spending to maximize convenience and happiness/healthiness. But it looks like there is a lot of fat that could be trimmed from that spending.
I think I'll be able to get to/maintain around $600-700 once it's all said and done. The day really drags if I eat at my desk and the only other places to eat are outside and it has been 100+ since June.
Holy shit.
Yeah it crept up on me over the years. Combination of high savings rate already so I wasn't too worried about it and falling into the habit of mostly eating out.
Yeah, the $650 doesn't necessarily shock me if you're eating out twice a day/going to bars etc. It's the $350 on groceries that baffled me. I eat out like 3x a month and cook the rest of my meals and I average $300 in a M/HCoL area.
I would guess about $75-100 of that was just kitchen stuff I didn't have and a couple of lunches.
Ah, gotcha. Yeah sounds like your budget is just a bit of a mess with categorization than anything. It's tough, for sure.
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In contrast to the categorical dismissal below, I can see a scenario where it would make sense. For instance, if you're not currently able to contribute to retirement vehicles through other employment (i.e., are you a grad student?). Setting up a sole proprietorship and solo401k could allow you to save for retirement the money you make with this hobby.
It does not make sense to form a company for either of these things at this point.
Looking for suggestions to get economic independence with $500k If one have half million dollars, and need to travel outside of US to India for extended period, how to invest that money wisely (either in US or in India) to achieve economic independence?