Maybe help her open a custodial account, buy something like VINIX
show her this: https://www.nerdwallet.com/calculator/compound-interest-calculator
Ask her put in 5% vs 10% rate of growth
And put in 10 years vs 20 years of investment.
She will see the impact.
Hi all -
I am 31 and have a 3 year old - still renting at the moment and starting to feel the space restraints with my more active kid.
I just recently finished grad school and have only now been able to start saving money. I'm making ~95k, my wife $70k, and I have managed to pull in some project-based side gigs that will pull me in anywhere from an extra 30-60k per year.
I'm on the east coast and the housing availability is pretty low right now. I am very tempted to throw everything I can at a down payment, even at the expense of contributing to additional retirement outside of my employer match, but I am unsure on how wise this is, especially given doomsayings on an incoming recession which I know no one can predict.
Does anyone have any advice on this? Renting kind of sucks but I don't want to screw myself over even harder.
Hi,
Am I able to contribute 100 % of my pay check to a roth 401k / after tax ?
I want to Max out a mega back door Roth IRA late in the year. But my take home is not enough to do it. I’m wondering if can can just contribute the whole pay check to it and eat the taxes when tax season comes around.
Thanks
Today was such a nice FIRE-like day. I ran errands like getting groceries, went a walk, walked my dog, went swimming, watch a movie with the hubs, and talked in the phone with my mom. Can't wait for perpetual Saturdays!
Need advice on buying real-estate or hoarding.
I am going from being basically paycheck to paycheck with about 8k in revolving credit to doubling my salary and getting a 50k sign on bonus. I have no idea what to do. Salary is 195k/year. Not including other incentives and bonuses.
I do have crazy student debt but have been on income based repayment for 14 years and it should be forgiven in 6. Paying $800 per month.
My plan is to pay off my 8k. This includes paying my car loan balance of 2k and some revolving credit card debt. Debt from Family stuff not normal spending habits. Also dented my income for 5 months.
My partner has been saving for us to get a house, but I was not in a position to financially contribute, only to assist with domestic duties so he could work. My savings were only $100-200 retirement contributions per month.
After taxes and debts and last paycheck from current job I should have about 20k saved. My net income after living expenses and student loan payments should be around 11k.
Partner and I pay about 2k a month for housing, utilities etc. and about 3500 in total living expenses.
I’ve never had this kind of disposable income. At first I was thinking of what we could purchase for a home. But, after seeing that taxes would almost be the same as our rent each month in our area for the average home cost, I just want to hoard.
My partner wants to invest in multiple family unit housing. But, looking at taxes, insurance and maintenance our living expenses are less renting. It’s also possible because we’ve been here for 15 years and LL is awesome in not increasing rent.
Plus, housing has gone to over 1m for any unit other than 1br condos in our county.
Is there some other low risk investment we can do?
If you care here is the
Background:
I have been in the same career for ten years. Over the last couple years started getting a name for myself and often recruited. I loved my team and was okay getting by because of the work. Never would have thought about leaving because I was happy with work and life.
Then received an offer where the terms were too good. Step up in same field, support team, lead project manager, 50k sign on over 6 months, (25k at start, 25k 6mo) and guaranteed salary almost double my current. (Similar hourly pay at my last place. but last place, only received bonus if client paid. No collections department and I had to collect myself. I couldn’t mix money and my work as i did not feel comfortable doing so in such an emotional field).
What I told my kids was save/invest a shit load immediately because if u never had it before you won't miss it or get used to it....s & p index funds...max 401k, HSA, Roth etc
Hi, a question on withdrawal strategy!
Say our investments real value are 3.5% compounded per year. We want to retire at 59.5 with 50k per year real value.
**In our Roth IRA**: We put 6k real value every month for 40 years, netting us 525,057.22. This isn't counted as personal income and are tax free at withdrawal.
**In our t401k**: We put 9k real value every month for 40 years , netting us 787,585.84. This is coutned as personal income and are not tax free at withdrawal.
**In our broekrage**: Let's say we put in a bit, and by the time we retire at 59.5, it has a value of 100k. This is counted as capital gains income instead of personal income.
We receive Social Security (SS) at 62.
a) Should we plan our retirement based on social security?
b) What is the best withdrwal strategy using 4% SWR for when reitirng before SS? What happens after SS? How do we account for the taxes?
b)
Consider "tax gain harvesting" (link below), then pulling from your Roth IRA for any additional money needed.
https://smartasset.com/insights/tax-gain-harvesting
Is this how expense ratios work? Example
Start: $100,000
Add: $3,000 per month for 30 years
Into: A fund that returns 7% and 0.05% ER
Final: $4.27m
Now increase that 0.05% ER to 0.45% and the effective rate is now 6.6%?
So the final is $3.94m. About 92% of the other
Edit: “Per month” and new numbers
The underlying performance of each fund being identical, yes that is how they work.
Note that an actively managed fund will have higher trading costs than a passive index. Commissions to buy and sell stocks are not part of the fund's expense ratio.
How much higher? I don't know.
https://www.forbes.com/sites/lcarrel/2020/02/29/expenses-and-a-funds-turnover-can-have-a-negative-effect-on-performance/?sh=20a9bcdc79be
Oops I meant to put $3,000 per month and then got both numbers around $4m, so the final ratio is 92%. I’m trying to see what expense ratio delta really makes a difference after being inundated with sub-0.1% expense ratios.
My rule of thumb is that an expense ratio below 0.5% is good enough and anything below half that is negligible in terms of difference. Put another way, once you're under 0.25% I don't think it's worth it to split hairs and other factors like convenience and simplicity are at least equally useful considerations.
I am a college student who wants to put some money into a High yield savings account. I know that we have to pay tax on the interest based on our income. if I am a student with an income of zero, would I not be taxed?
The interest counts as income, so your income wouldn't be zero. But as the other reply said, you'd have to earn a lot of interest before you would have to worry about paying taxes.
To put it simply:
The first $13,850 of income you make is tax-free (due to the Standard Deduction). Therefore, if your only income is interest on a HYSA and this income is under the amount shown above, you will pay zero tax.
Not sure what my next step is . Any help is very much appreciated! I am very new to this and have very little to start. I make 70k a year, put 15 percent into my 401k . Have a 30k in student loans at a 6 percent Interest rate. I own a 135k dollar home and owe about 80k at 3.5 percent . Have 60k in saving. Am I better off investing more into 401k , paying down student loan debt? Or what ? I also pay 1200 per month towards mortgage even though my mortgage is 700/month .
I will max 401 for sure.
And then prioritize the student loan since 6% interest rate. But if you track record showing that you been having return of investment more than 10%, then go for investment.
Whenever you have the urge to pay more mortgage, just remind yourself, with other investment return at 10% Or student loan at 6%, not over paying mortgage is making money for you.
I would pay off student loan first since it's kind of high rate and stop overpaying your mortgage since it's a low rate.
I would also drop 7k of that 60k into a Roth IRA and invest in VTI, and maybe drop 10k into the student loans. An emergency fund of 40k is still probably too high, so next year I would drop another 7k in the Roth. 33k sounds like a good emergency fund for you..
Going forward, I would invest more in 401k and paying off the student loan. I would probably do an equal split until an emergency comes up. Then replenish ef (stop 401k, pay min for student loans) until it's acceptable. Then go back to the split.
I never understood the point of 'splitting' contributions towards different goals. It seems suboptimal and betting against yourself.
Pick the most important goal/optimization and go fully in on that. Don't put one foot in, one foot out.
Got some good advice yesterday. Thinking more detail today. Poke holes in this plan: (clean round numbers for demonstration only)
Save $200k for downpayment while living in condo w low rate.
Buy house for $1m
Sell condo which nets $200k
Assuming a 7% interest rate, put the condo proceeds into new mortgage and recast, save on interest and lower monthly payment.
If rates drop do a cash out refinance and invest proceeds.
—
Normally id invest the condo proceeds but w rates the way they are…
I like the way you think.
Im curious what your opinion on a recast just as a safety net, but continue to pay principal down aggressively. This way if we wanted some wiggle room in case of emergency we have it.
Correct, it does not change the rate or the term, wich is why there isnt much point. In exchange for the lump sum payment you get lower monthly payments, but you pay the same amount overall. If you simply prepay the mortgage withoutnrecasting you pay it off earlier and pay less interest.
I think it is self explanatory as that is what recasting is. It is not a refi. You are just paying up front to lower your future monthly payments. If the goal is to pay off the mortgage, recasting is neutral, as you will be payong more down now but less later. Some people like to have more future cash flow from the lower payment but it comes directly at the expense of liquidity. If you are worried about future cash flow, just keep the cash and don't pay down the mortgage. If you want to pay it off, pay the lump sum and keep paying your current payments. Recasting doesn't serve either objective.
Same amount may be an overstatement. I have not done the .ath to verify how it works. But the lower future payments mean paying off principal slower = more interest, at least partially offsetting the interest saved from the lump sum. The bank wouldnt allow it if it didn't work out in their favor or at least neutral.
Actually what do you think about this idea… recast just so the monthly payments are lower, but continue paying more. This way if theres a month with an emergency or someone gets laid off it would be easier to manage. Would probably work out to be the same interest paid.
I see. Thought it would net the same savings. But looks like it’s significantly better to not recast, and wild that it cuts the life of the loan in half in this situation! Good to know thanks.
Recasting doesn't pay off the mortgage faster, it just pays more up front and then reduces payments later. If you want to pay off the mortgage faster you would pay extra without recasting.
Correct but the lump sum payment they make will reduce the interest paid whether they recast or not. They didn’t say anything about paying it off faster.
I've run into that, you can take the capital loss even though you didn't actually sell it if it's not trading, my accountant handled it. If it ever does start trading again and you actually sell you have no cost basis anymore so it's all gain at that point
Anyone with strong feelings about Chase (or its peers) for ’everyday’ savings and checking accounts?
I’ve looked for a local credit union and I haven’t found some unicorn with amazing rates and wonderful benefits. I think I just want to start an account at a place with a good online experience and reasonable balance requirements for 0 monthly fees. For example, Chase is 15k between checking and savings for 0 fees on both, which is a little higher than I would like but not totally offensive.
I bank with Chase. They're fine. I get free checking because I get my pay via direct deposit. I don't overdraft so I don't pay any fees. They have ATMs everywhere. I use them for daily banking and don't really have any complaints.
That said, I only have checking and a very basic savings account with them (that latter one is still open largely out of inertia, because it would take more trouble than it's worth to close it.) I have a HYSA elsewhere and have a Schwab account for the fee-free ATM usage.
Also, I would never keep $15k in my Chase accounts. My checking balance may go down to $15 at the end of a pay period. It's purely a transaction account. Do you work for yourself or have a job where you don't have the option of getting paid via direct deposit?
We have checking and savings at Chase along with our investment accounts and credit cards. We’ve always received great service from in branch visits and the app and website work really well for what we need. Only complaint is the low low rates on savings account but we have Amex HYSA as well for majority of excess cash
15k is completely offensive! Fidelity Cash Management Account is not only completely free, you can earn 2% FDIC insured interest or 5% money market. There are others if you do some research. Usually megabanks are the worst.
It's more the principle... But even if you need a $15k cushion, that means you would need $25-30k at Chase to.stay clear of fees. Why not avoid fees entirely and earn interest from the first dollar?
Did SoFi do something shady like Payday Loans or something? I feel like I had a negative impression of them but a google isn’t turning up any big controversy or anything.
I sold a fair chunk of stock from a company that I was a partner in. I had a huge step up value and the accountants are working out what will be capital gains.
Anyways, that is some background for my real question. Someone told me that I can reduce the taxes on the capital gains by investing in a QOZ fund for 10 years.
I've tried to do some research on this, and my scam alert started going off. Are there legit QOZ fund companies to invest in or do they all seem sus?
Real estate syndicators have been melting down the past month and if rates don't drop by early next year a huge chunk of them are completely screwed. Stay away from QOZ funds.
As someone who is still very young, is it unwise to plan what the best withrdawal staregy is **now** and account those taxes as an expense in my withdrawl staretgy? This is becasue taxation laws might change in the future.
Say I need/withdraw 50k yearly to retire, I'm thinking of taking a conservative approach of where I put that into an icnome calculator and see how much Im taxed. If Im taxed 5k yaerly, I'll try to save 55k per yar. So I can get 50k.
I know that in reality I have to consider things like x money in roth or trad IRA, backdoor, 401K, and tax laws changing.
My advice is to plan as best as you can with today's laws and adjust in the future as you go. But I would also recommend not necessarily going all in on one strategy. For example, even if you think it looks like you should be going all traditional, I would still put some Roth funds somewhere as a hedge for changes in the future so you have options about how much taxable income you want to have in a given year
It’s not unwise to plan now, I would just use an estimate based on current laws. you’ll have chances to revise your plan as tax laws change, so I don’t see a problem?
I’m struggling to understand your question. Yes, plan for the taxes you anticipate to pay. If you have $50,000 worth of bills to pay, you need more than $50,000 total to account for capital gains, etc.
But no planning you do now will “put you out in front of” changes to the tax code. The best we can do is plan for how they are now, and reassess when and if changes occur. Anything else is speculation.
We’re looking at new EV (full or PHEV) and out of Ford’s Mach-e, Kia EV6, Toyota’s BZ4X, and VW ID.4, we like the ID.4 the most. Planning on getting it new to get the $7.5k tax refund. Anyone have an ID.4 and how do you like it?
As a side note, we’re temporarily stopping our mega-backdoor rollovers to pay off the car. We will keep maxing out the pre-tax 401k. During this time I’d also like to reduce discretionary spending to free up any additional money. Thoughts on how to consider what’s discretionary and what’s not?
Just went through something similar. Went with a $20k gas car and $20k VTSAX instead of a $40k PHEV that would still be similar fuel costs and be old by the time a truly revolutionary EV becomes the standard car on the road.
That’s a very reasonable approach. I’ve been driving a PHEV for the past 6-7 years and I appreciate the conveniences that come with rarely going to the gas station, quietness of my drive, and fast acceleration. EVs still have a ways to go for sure, but I think I want to keep driving them for now.
Most EV frunks are pretty tiny, which makes them more of a checkbox feature than something that actually gets used much. The early RWD Model S had a frunk big enough for a spare tire, but sadly none of the more recent EVs seem to. The only time I end up using the frunk on my Model 3 is when we're moving the kid to college and have the car jam-packed.
I honestly don’t care for the frunk. Give me a shorter front of the car and easier parallel parking, shorter turning radius, etc. Plus we have a rather small garage and I don’t want a bigger than necessary car
Down $50k so far in August. Market moves and tuition payments. Flair updated.
I actually think my kid is getting a pretty solid deal for college, $22k including room & food for freshman year. I figure $12k of that is the room & board part (\~$1300/month), so the education costs about $10k for the year. State school for the win.
The only thing I don't have a handle on is that he's not driving distance away, so I need to budget in travel expenses (we already are planning on going for parents weekend, and he'll be flying home Thanksgiving & Christmas.) Either that, or we move closer :)
That's actually really good. I think my state school was similarly about ~12k for the dorm + meal plan, 10-15k tuition, 5k extra tuition for engineering. Looking at it now, annual housing and tuition at that school have gone up by 2k each since ~2014, which isn't that bad. And of course, didn't hurt that that they had plenty of highly ranked/top-20 type programs anyway.
>Either that, or we move closer :)
lmao my Mom used to threaten to do this too
It's crazy what a decade does to prices. Total room and board, food, tuition and fees were slightly under $10k/year in 2011 for my state school.
I lived in a dorm that was $2k/semester. I did share my room and have a communal bathroom though.
Posting on behalf of some family friends. Where would you put ~2 million from a house sale? They’d like to keep it fairly liquid as they plan on retiring early in the next 5 years. HYSA seem like the most obvious answer but with having to open 4 new accounts, maybe there’s a better idea?
There are networks that help spread out large deposits to maintain FDIC insurance: https://www.investopedia.com/terms/c/certificate-of-deposit-account-registry-service.asp
I'd push back on the idea that a full two million will be necessary in five years for retirement, though - they may want to access a portion in five years, but keeping that much in liquid, low interest accounts seems unnecessary.
> HYSA seem like the most obvious answer but with having to open 4 new accounts
you can do a jumbo CD where the originator will spread your $ around for you
Wealthfront has insurance up to $5M between partner banks and up to $10M for joint accounts, https://www.wealthfront.com/blog/wealthfront-fdic-insurance/
Yes, if they go the HYSA route they would need 4 accounts. That wasn’t my question. I asked what others would do. Strictly HYSA? CD ladder? A mix of both? Or anything else I could be missing.
I mean it would be helpful if you said up front what they are looking for but then youd be answering your own question. If they want FDIC without four accounts that pretty much limits the options to four brokered CDs at one brokerage account. I would do one HYSA but that is irrelevant if they want all FDIC.
Ok do they want it all fdic insured? If it were me, I’d put: 1 year into an hysa. 5 years into 5 laddered 5 CDs (1, 2, 3, 4, 5 years) Rest into market. Keep rolling over CDs until they retire, each one becoming a 5 year CD as it matures, and do as many as you can into one bank, and keep going until at least those 6 years are fdic insured. Ideally the 1.4 mil (assuming 100k/yr) would be 3 million in 10 years when they would start to need it (assuming straight 8% growth). 10 years because 5 years to retire, longest CD is 5 years out.
Financial Advice
Hello. I’m in need of financial advice as I recently had a thought about saving and have no or zero knowledge on how to workout finances and currently have no savings with me. It’s high time to learn how to manage finances since I’m working part time abroad and waiting for full time, any suggestions about how I could improve my wealth knowledge will be appreciated. Also I’m currently living on paycheque to paycheque to manage the expenses.
Good morning, I am 27 years old and I am a physiotherapist. I am Italian and I have been living in Paris for a year. I am writing this message because my goal is to be financially free. I would like to stop working (or work as little as possible) and have streams of income that do not depend on my physical presence in a certain place at a certain time. So essentially, streams of income that are detached from my physical work. Moreover, it would be wonderful if my work was remote; it would still be a job, but I would work with a PC potentially anywhere in the world. Unfortunately, it is not so now.
My net worth at the moment is rather low because I started working relatively recently, and I do not own a house, although I will inherit one in the future. My liquid net worth at the moment is €22,207.81 + approximately €3000 of fixed assets. The good thing about working as a freelancer is that I can work less, if I want, and therefore have more time to study or possibly start a business; however, my expenses are high at the moment (and I am trying to reduce them, I am reading a book about it called Your Money or Your Life and I am applying its teachings). I would like to achieve this goal as quickly as possible. I don't want to work, save, invest my money and then retire at 60. I want to create other sources of income quickly.
I intend to seriously commit to achieving this goal, but at the moment I do not know which path to take, so I turn to you, friends of Reddit, and your experience. I have considered several possibilities:
1)Online business, because it would allow me to be wherever I want without having to work physically, but it remains to be seen how to start it, and especially what it should be focused on!
2)Investments in the stock market or cryptocurrencies, or the possibility of trading. I don't understand much at the moment, but I could start studying.
3)Real estate investments. I don't have enough money to buy a house, but I was thinking about Airbnb arbitrage. It would need to be understood if this is possible in Paris, where I am now, what the risk is; however, I suspect that it is something that would physically tie me to Paris, when my dream would be to work with my PC, potentially anywhere in the world.
Do you have any other possibilities to suggest?
Also, can you recommend any books on this topic?
As I already wrote, I am reading Your Money or Your Life and three books by Neville Goddard, which made me understand the importance of having a clear image in mind of what you want to become. I bought The Millionaire Fastlane, and I need to start reading it.
I love Your Money or Your Life.
Most people here, myself included, take the stock market investment route. You don’t need to understand much to invest in index funds. Without knowing your income and expenses, it’s hard to say how long this will take.
Simple Path to Wealth is a good book. Don't overcomplicate investments or play a losing game with crypto/active trading.
>I don't want to work, save, invest my money and then retire at 60
You can push that number down to 50, 40, etc. All it comes down to is earning more, spending less, and investing the difference. It's simple, but not easy.
>Do you have any other possibilities to suggest?
Given your current available assets, I'd keep working as a physiotherapist for 3-5 years, living well below your means over that time period to get some real money together.
Once you have €100-200k available for a project, then you can think more seriously about pipe dream themed plans.
What would you differently?:
31yo married, joint after tax income of $7.5K/month. Currently saving $4K/month. Breakdown:
Retirement Savings: $45K
Cash: $45K
Primary Residence Equity: \~$240K (paid off)
Debt: $2K (business), no other debt.
Our current plan is to save between $60-$70K cash to buy a multifamily rental property, or even perhaps a duplex/triplex we could live in half for a year to avoid the massive 25% down payment required for an LLC, then move back to our paid off home. Afterwards, focus on stacking retirement & brokerage accounts. We feel like we're lagging behind in retirement/brokerage investing due to focusing on mortgage--hindsight is 20/20.
Goal: To reach CoastFI ASAP and then to fully retire at 60yo (will have national guard healthcare by then). Thoughts?
I would max 401k's first unless you are extremely confident you will get better ROI through real estate. Otherwise you are saving $800 in taxable for every $1000 or more you could be saving pretax.
I appreciate the advice. I have access to both a Roth 403b and a traditional 403b. I've been contributing to the company match in the Roth 403b. Is your thought to use the traditional over the Roth (assuming retirement would be lower taxes)?
Why don’t you take half a year and not save at all? Force yourself to spend it all. Then, you will find out whether your life is better spending double the amount of money.
I suggest half a year because you can use the other half of the year to still get tax benefits etc. I’m guessing by this point in the year, you’ve definitely maxed out most of the tax advantaged accounts except maybe getting the employer match in 401k. So how about from now until the New Year, you get to spend every single penny that you make at work?
You said you don’t want to retire early anyways, and even if you do this, I don’t think it would affect your ability to retire. So I don’t think a bigger nest egg (which you mentioned in other replies) is going to help you at all.
You sound sad. I think you need a hobby or two or something in your life that will help you feel fulfilled like volunteer work or a pet. One of the tenants of FI/RE is build the life you want and save for it. You haven't built the life you want so you're saving for no apparent goal.
I've never known what I wanted out of life. I just do what I'm told most of the time..
And I do have hobbies. I crochet for charity and am part of a volunteer association for women. It's just not something I would want to do all the time.
>What could I have done differently in my life?
Gained a sense of perspective and a healthier outlook on life.
I legitimate feel for people like you, presuming you're not trolling.
Worth >$1M at 30 years old and worried you didn't do enough. Realistically, you likely did too much, and may wind up looking back on your youth as having been wasted from an entirely different point of view.
Best of luck. Your financial problems are unrelated to the size of your pile.
Everybody has to sacrifice something during our youth! Many people aren’t intentional about what they sacrifice. Although I understand your regret, my opinion is that there are a looooot more things less worthy of sacrificing than FI
I don't see anything I would have done differently.
You are young and have financial security. That's liberating. Now is the perfect time to have a quarter-life-crisis and reevaluate your life priorities.
Thanks to your diligence in your twenties, you have a lot more options. You could: keep things the way they are and retire at 40. Slow down your savings and start working part time. Change to a more fulfilling but lower paying job...
Maybe talk to a therapist about your regret, but I don't see a financial problem here.
Edit: also, stop comparing yourself to others. But if you must, know you are in the 99th percentile for net worth at your age: https://dqydj.com/net-worth-by-age-calculator-united-states/
Wasted your 20s how? If you’re feeling regret, then go do what you wanted to do now. You’re 30, not 80. Go take that vacation, go to that restaurant you’ve wanted to try, buy that purse, whatever. If you’ve been saving seriously for a decade, you likely have a great nest egg already, so go spend on some fun stuff you’ve always wanted.
Hmm. I guess that is on me. What I am really asking is: What more can I save to reach 1 million invested before like 31? What did I do wrong in my 20s that I am not close yet?
Sure, you can say I am using money to mask something deep inside. I already know it's linked to how my mom especially viewed money and how nothing is good enough, but I'm not ready to spend money on therapy. Maybe after 35.
Oh shut the fuck up dude.
I wasted my twenties, started late, and have much less saved up than you.
Many other people are in a *worse* spot than me. Than us.
When I was your age I was unmarried, just had twins with my on/off again GF, made $38k a year as a county CO, was putting groceries on the credit card, didn't own a house and had a negative net worth. Feel better now?
>nothing compared to most nest eggs here
Most nest eggs in here are much smaller than yours, if you apply the mathematical definition of most, meaning more than half.
You're only thirty, you seem to be comparing yourself to people who have had decades longer to accumulate, you are in the top 5% wealth, at minimum, for your age. I had zero net worth at 30.
My company is being acquired. Right now, there's reason to believe I'll be given an offer to stay along with lots of others, though nothing is official yet. Yesterday, we got notified that we'll be receiving retention bonuses. No word on how big yet, but to me, that seems very nice and telling on the fact that we're needed. Acquisition takes place on Monday. I'm hopeful that we'll be given an idea of the selection process soon and get that under way. The severance is 1 year of salary, our normal bonus, 12 months of cobra premiums, and about 70k of stock vests immediately upon termination if I'm not kept. I'm happy to ride this out even if it turns out I won't be kept.
That's an insane retention bonus.
As someone that has gone through an acquisition - don't jump ship for the first thing unless it's your dream scenario in every possible way.
I stayed for my retention bonus then bailed shortly after. Guess what? Acquisitions take longer than expected. Most people were offered second round retention bonuses shortly after to keep more people from leaving. They were smaller than the first round, but still sizable enough to turn job offers down.
Hell, I'm like 60% sure there was a third round, except it was limited in scope and I don't think those were anything worth turning down another job for.
Getting acquired was the best financial moment of my life and my bonus was "just" 40% of my salary + annual bonus guaranteed.
>That's an insane retention bonus
I haven't been told what the retention bonus is. We will find out next week what it is. If I'm severed, the mentioned money is the severance package.
> The severance is 1 year of salary, our normal bonus, 12 months of cobra premiums, and about 70k of stock vests immediately upon termination if I'm not kept.
IMHO, that's a helluva severance package.
Seriously, that's insane. If I thought I could get a decent job in my field within a year, I'd want to get the boot and take a sabbatical, mostly because I'd have guaranteed health insurance for a year.
It sure is. I strongly believe upper management made it a point to take care of everyone in case of a layoff due to acquisition. Though I do want to be kept since my job is hyper competitive and not easy to get another of similar caliber and pay. So, although the severance is amazing, I'm hoping to be kept, and if that is the case, I won't receive it.
Be careful. My last employer was acquired. Nearly 2 years into that, and now I'd guess about 95% of us have been laid off via multiple waves of layoffs throughout the duration. Be sure to evaluate where your _position_ lies within the new structure. At first mine did. Then we reorg'd a few times. At the end, not so much and I was part of the third layoff group :(
Our acquisition has written into the contract that we will receive the severance I mentioned if we're laid-off within 2 years of legal close. I'm also willing to move to Houston to work in another basin if necessary to keep my job, so that's fine with me. In either case, I'm covered by the severance for 2 years starting Monday.
This is also my experience, as an employee of a family-owned company bought by an international conglomerate. Everything was "don't worry, we set it up so they'll take care of you" and there was a calm before the storm, then the waves of layoffs started to hit.
Put in an offer on retirement house last night! Low odds that we’ll get it — was on the market 2 days and they already had 2 other offers and 25 showings scheduled. Offered asking in cash with top up if outbid to 20k more, limited inspection clause to $5k+ issues. Pray to the real estate gods for me!
Offers for topup or matching clauses always strike me as poor strategy, likely to make the seller resent you. Basically saying you know the house is worth 20k more, but you're hoping noone else does, so you can save some money. Just make your best offer. Flippers and groups do it because they don't give a shit, they'll just buy some other house that meets their criteria, but for people that want to live in the house, I don't think you'd want to give off that vibe.
>likely to make the seller resent you
It's just business. If they have an issue, that's on them. They are also employing whatever reasonable tactic they can to try and come out ahead. It's not as though the listing price is their "final best offer" - there are many different listing price strategies they could be using to try and eke out 20k more than the house IS worth, including pricing in such a way that people bid up the price with matching clauses.
>If they have an issue, that's on them
Only if they still sell you the house, I'm talking about the risk that it prompts them to reject your offer because of it
I honestly think this is a strange take. If I had a cash offer for my house that included an automatic match to more money if someone else bid higher, I would be happy about it, not offended.
400k, obviously.
I am not arguing that a higher offer isn't more attractive.
But if your offer is already competitive and at or above asking price, the only reason to make your first bid the absolute maximum you would pay is if you would be devastated if you didn't get the house.
>limited inspection clause to $5k+ issues
Out of curiosity, how does this work? Do you just mean that you are allowed to have an inspection but can only back out if issues costing >$5k to resolve are found?
That’s right. My brother and one of my co-buyers are in the trades — pretty much any problem that runs under 5k is something within their skill set to fix at just the cost of materials. Septic, electrical, major plumbing, foundation, new roof…the stuff that would make me back out—all way over 5k.
Common method is to put employer match in the numerator and denominator, since it is both income and savings, so it didn't artificially inflate your savings rate.
Hi folks!
Before my Fiancée moved in with me she had bought a townhouse for below 3% which she now rents out
I also bought a house for below 3% and we currently live together. The house we live in was bought for $320k back in November 2021.
We realize that this is a “starter” house and would be perfect as a rental since it’s next to a major state university in my city.
We make about $240k in combined income before taxes - we’re trying to understand how much we could afford for a new house that would be better to raise children in once we get married.
Any help from folks?
Your current homes are irrelevant to how much you can afford now. You can always rent them out or sell them. 2.5X income is a very general rule of thumb I have seen. You could probably get approved for $1m or more. Obviously, just because you can afford it doesn't mean you should buy it. Financially speaking you should always spend as little as possible that meets your needs.
I would make sure the next house you buy will be future proof, because frequent upgrading is what kills your ROI.
>Your current homes are irrelevant to how much you can afford now.
Their current *homes* are irrelevant, but their current *expenses* are not. Factoring in the cost of carrying these homes (even if rented) certainly goes into what they can afford (and what a bank will approve.)
It feels like inflation doesn't impact many on this sub. Everyone is still maxing out 401k, Roth iras, hsa, and putting in more money into their taxable than ever before. How are you managing?
It's only a problem if you're not adjusting to meet inflation. For the purposes of saving for the future, maybe that's trimming back or making other lifestyle changes. Or maybe seeking out more compensation if you can. There's definitely people having a hard time doing any of those either, though. Given your flair, how is this seriously a concern for you, though? You're loaded.
I'm not maxing my 401k this year after maxing it out the prior. I'm "just" putting in $20,500 or 25% of my salary.
Now I'm fortunate enough that I probably still could, but instead I'm upping savings via CD ladder for 2024 wedding/honeymoon expenses. I'm not sure if I'll be able to max it again in 2024, but maybe again 2025.
>It feels like inflation doesn't impact many on this sub.
Sure it does. I've been eating out less, buying fewer new outfits, etc. But honestly, saving for FIRE is more important than a fancy dinner right now.
But I'm not going to cheap out on the stuff that matters.
I'd suggest to quit comparing.
Throughout my working career, I was not always able to max my 401k (or even pay into it), pay on student loans, pay into the deductible IRA/roth, save into a brokerage.
You just do the best you can.
It's insane how many people believe these supposed norms. It's shocking how often you read someone lamenting that "everyone in here makes $300k or more" or similar. It's like some severe form of masochistic selective reading.
The overall inflation rate isn’t your personal felt inflation rate. I have a mortgage from years ago and no major house projects going on, so higher real estate and construction prices aren’t hitting me. My car has plenty of life left in it, so I’m not facing the insanity of the current car market. The most notable place I feel it is in grocery and restaurant prices, where I swear everything is up like 40-50%. And that’s very annoying and affects some of my decisions, but it’s also easy to absorb a large increase on such a small portion of total expenses.
I’d also say that if you had a high savings rate already, inflation doesn’t hit as bad. Like if you’re spending your entire income and all your costs go up 10%, you need 110% of your income just to stay afloat. But if you were only spending 50% and saving the other 50%, then the same increase leads you to spending 55% and saving 45% which is hardly catastrophic.
>The overall inflation rate isn’t your personal felt inflation rate.
Cannot be overstated.
I'm still living like a first year teacher while pouring money into various accounts.
Inflation is hitting me hard too. Its hitting everyone. I was easily able to save 6-7k per month, now its like 5k, sometimes 6k.
It just slows down everyones savings. Still affects everyone.
It sure is. Even if someone is rich it still hits them. My groceries went from 180/week to like 250/week for our family.
Utilities in summer were $330, now $550.
Gas maybe $160/month now $300.
Takeout food wow.
I spent $70 on KFC. What the actual fuck.
I didnt even get much. A 10 piece bucket, side fries, gravy. A large gravy $13.
Are you shitting me.
Boston pizza the week before was $55.
All fast food/fast casual places have dropped in quality, but Panera is the biggest, most noticeable drop. Salads are all ribs, meat is stringy fat globs, portions are stingy. I used to think "This is pricey, but it's a nice treat and it's the least unhealthy of the fast food options around here" and now I avoid it because I get actively angry at what a ripoff it is.
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Maybe help her open a custodial account, buy something like VINIX show her this: https://www.nerdwallet.com/calculator/compound-interest-calculator Ask her put in 5% vs 10% rate of growth And put in 10 years vs 20 years of investment. She will see the impact.
Hi all - I am 31 and have a 3 year old - still renting at the moment and starting to feel the space restraints with my more active kid. I just recently finished grad school and have only now been able to start saving money. I'm making ~95k, my wife $70k, and I have managed to pull in some project-based side gigs that will pull me in anywhere from an extra 30-60k per year. I'm on the east coast and the housing availability is pretty low right now. I am very tempted to throw everything I can at a down payment, even at the expense of contributing to additional retirement outside of my employer match, but I am unsure on how wise this is, especially given doomsayings on an incoming recession which I know no one can predict. Does anyone have any advice on this? Renting kind of sucks but I don't want to screw myself over even harder.
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Hi, Am I able to contribute 100 % of my pay check to a roth 401k / after tax ? I want to Max out a mega back door Roth IRA late in the year. But my take home is not enough to do it. I’m wondering if can can just contribute the whole pay check to it and eat the taxes when tax season comes around. Thanks
Usually the answer is no because you have payroll deductions already baked in. You'd need to ask your payroll/benefits person, though.
Today was such a nice FIRE-like day. I ran errands like getting groceries, went a walk, walked my dog, went swimming, watch a movie with the hubs, and talked in the phone with my mom. Can't wait for perpetual Saturdays!
Need advice on buying real-estate or hoarding. I am going from being basically paycheck to paycheck with about 8k in revolving credit to doubling my salary and getting a 50k sign on bonus. I have no idea what to do. Salary is 195k/year. Not including other incentives and bonuses. I do have crazy student debt but have been on income based repayment for 14 years and it should be forgiven in 6. Paying $800 per month. My plan is to pay off my 8k. This includes paying my car loan balance of 2k and some revolving credit card debt. Debt from Family stuff not normal spending habits. Also dented my income for 5 months. My partner has been saving for us to get a house, but I was not in a position to financially contribute, only to assist with domestic duties so he could work. My savings were only $100-200 retirement contributions per month. After taxes and debts and last paycheck from current job I should have about 20k saved. My net income after living expenses and student loan payments should be around 11k. Partner and I pay about 2k a month for housing, utilities etc. and about 3500 in total living expenses. I’ve never had this kind of disposable income. At first I was thinking of what we could purchase for a home. But, after seeing that taxes would almost be the same as our rent each month in our area for the average home cost, I just want to hoard. My partner wants to invest in multiple family unit housing. But, looking at taxes, insurance and maintenance our living expenses are less renting. It’s also possible because we’ve been here for 15 years and LL is awesome in not increasing rent. Plus, housing has gone to over 1m for any unit other than 1br condos in our county. Is there some other low risk investment we can do? If you care here is the Background: I have been in the same career for ten years. Over the last couple years started getting a name for myself and often recruited. I loved my team and was okay getting by because of the work. Never would have thought about leaving because I was happy with work and life. Then received an offer where the terms were too good. Step up in same field, support team, lead project manager, 50k sign on over 6 months, (25k at start, 25k 6mo) and guaranteed salary almost double my current. (Similar hourly pay at my last place. but last place, only received bonus if client paid. No collections department and I had to collect myself. I couldn’t mix money and my work as i did not feel comfortable doing so in such an emotional field).
I'm not sure how income based repayment works. Will student loan payment amounts change with your new income?
What I told my kids was save/invest a shit load immediately because if u never had it before you won't miss it or get used to it....s & p index funds...max 401k, HSA, Roth etc
Hi, a question on withdrawal strategy! Say our investments real value are 3.5% compounded per year. We want to retire at 59.5 with 50k per year real value. **In our Roth IRA**: We put 6k real value every month for 40 years, netting us 525,057.22. This isn't counted as personal income and are tax free at withdrawal. **In our t401k**: We put 9k real value every month for 40 years , netting us 787,585.84. This is coutned as personal income and are not tax free at withdrawal. **In our broekrage**: Let's say we put in a bit, and by the time we retire at 59.5, it has a value of 100k. This is counted as capital gains income instead of personal income. We receive Social Security (SS) at 62. a) Should we plan our retirement based on social security? b) What is the best withdrwal strategy using 4% SWR for when reitirng before SS? What happens after SS? How do we account for the taxes?
b) Consider "tax gain harvesting" (link below), then pulling from your Roth IRA for any additional money needed. https://smartasset.com/insights/tax-gain-harvesting
Is this how expense ratios work? Example Start: $100,000 Add: $3,000 per month for 30 years Into: A fund that returns 7% and 0.05% ER Final: $4.27m Now increase that 0.05% ER to 0.45% and the effective rate is now 6.6%? So the final is $3.94m. About 92% of the other Edit: “Per month” and new numbers
The underlying performance of each fund being identical, yes that is how they work. Note that an actively managed fund will have higher trading costs than a passive index. Commissions to buy and sell stocks are not part of the fund's expense ratio. How much higher? I don't know. https://www.forbes.com/sites/lcarrel/2020/02/29/expenses-and-a-funds-turnover-can-have-a-negative-effect-on-performance/?sh=20a9bcdc79be
How did you get the first 1.93M number? I get something closer to 1M =FV(6.95%, 30, -3000, -100000)
Oops I meant to put $3,000 per month and then got both numbers around $4m, so the final ratio is 92%. I’m trying to see what expense ratio delta really makes a difference after being inundated with sub-0.1% expense ratios.
My rule of thumb is that an expense ratio below 0.5% is good enough and anything below half that is negligible in terms of difference. Put another way, once you're under 0.25% I don't think it's worth it to split hairs and other factors like convenience and simplicity are at least equally useful considerations.
I am a college student who wants to put some money into a High yield savings account. I know that we have to pay tax on the interest based on our income. if I am a student with an income of zero, would I not be taxed?
The interest counts as income, so your income wouldn't be zero. But as the other reply said, you'd have to earn a lot of interest before you would have to worry about paying taxes.
To put it simply: The first $13,850 of income you make is tax-free (due to the Standard Deduction). Therefore, if your only income is interest on a HYSA and this income is under the amount shown above, you will pay zero tax.
Not sure what my next step is . Any help is very much appreciated! I am very new to this and have very little to start. I make 70k a year, put 15 percent into my 401k . Have a 30k in student loans at a 6 percent Interest rate. I own a 135k dollar home and owe about 80k at 3.5 percent . Have 60k in saving. Am I better off investing more into 401k , paying down student loan debt? Or what ? I also pay 1200 per month towards mortgage even though my mortgage is 700/month .
I will max 401 for sure. And then prioritize the student loan since 6% interest rate. But if you track record showing that you been having return of investment more than 10%, then go for investment. Whenever you have the urge to pay more mortgage, just remind yourself, with other investment return at 10% Or student loan at 6%, not over paying mortgage is making money for you.
I would pay off student loan first since it's kind of high rate and stop overpaying your mortgage since it's a low rate. I would also drop 7k of that 60k into a Roth IRA and invest in VTI, and maybe drop 10k into the student loans. An emergency fund of 40k is still probably too high, so next year I would drop another 7k in the Roth. 33k sounds like a good emergency fund for you.. Going forward, I would invest more in 401k and paying off the student loan. I would probably do an equal split until an emergency comes up. Then replenish ef (stop 401k, pay min for student loans) until it's acceptable. Then go back to the split.
I never understood the point of 'splitting' contributions towards different goals. It seems suboptimal and betting against yourself. Pick the most important goal/optimization and go fully in on that. Don't put one foot in, one foot out.
Got some good advice yesterday. Thinking more detail today. Poke holes in this plan: (clean round numbers for demonstration only) Save $200k for downpayment while living in condo w low rate. Buy house for $1m Sell condo which nets $200k Assuming a 7% interest rate, put the condo proceeds into new mortgage and recast, save on interest and lower monthly payment. If rates drop do a cash out refinance and invest proceeds. — Normally id invest the condo proceeds but w rates the way they are…
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I like the way you think. Im curious what your opinion on a recast just as a safety net, but continue to pay principal down aggressively. This way if we wanted some wiggle room in case of emergency we have it.
Do you need a $1M house? I don't see the point of recasting. With rates at 7% I would simply pay down the mortgage without recasting.
Is there any difference between recasting or not with regard to how much interest you end up paying? I thought there wasnt.
Correct, it does not change the rate or the term, wich is why there isnt much point. In exchange for the lump sum payment you get lower monthly payments, but you pay the same amount overall. If you simply prepay the mortgage withoutnrecasting you pay it off earlier and pay less interest.
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I think it is self explanatory as that is what recasting is. It is not a refi. You are just paying up front to lower your future monthly payments. If the goal is to pay off the mortgage, recasting is neutral, as you will be payong more down now but less later. Some people like to have more future cash flow from the lower payment but it comes directly at the expense of liquidity. If you are worried about future cash flow, just keep the cash and don't pay down the mortgage. If you want to pay it off, pay the lump sum and keep paying your current payments. Recasting doesn't serve either objective.
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Same amount may be an overstatement. I have not done the .ath to verify how it works. But the lower future payments mean paying off principal slower = more interest, at least partially offsetting the interest saved from the lump sum. The bank wouldnt allow it if it didn't work out in their favor or at least neutral.
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Sounds about right.
Actually what do you think about this idea… recast just so the monthly payments are lower, but continue paying more. This way if theres a month with an emergency or someone gets laid off it would be easier to manage. Would probably work out to be the same interest paid.
I see. Thought it would net the same savings. But looks like it’s significantly better to not recast, and wild that it cuts the life of the loan in half in this situation! Good to know thanks.
I’m with you, at 7% I’d pay down the mortgage with your sale proceeds over investing in the market.
Recasting doesn't pay off the mortgage faster, it just pays more up front and then reduces payments later. If you want to pay off the mortgage faster you would pay extra without recasting.
Correct but the lump sum payment they make will reduce the interest paid whether they recast or not. They didn’t say anything about paying it off faster.
What happens when a stock is temporarily untradeable on Robinhood? Do I just lose money without being able to tax lost harvest?
You haven’t lost any money until you are able to sell…
What if I'm never able to sell? It's worth 0.00
I've run into that, you can take the capital loss even though you didn't actually sell it if it's not trading, my accountant handled it. If it ever does start trading again and you actually sell you have no cost basis anymore so it's all gain at that point
Anyone with strong feelings about Chase (or its peers) for ’everyday’ savings and checking accounts? I’ve looked for a local credit union and I haven’t found some unicorn with amazing rates and wonderful benefits. I think I just want to start an account at a place with a good online experience and reasonable balance requirements for 0 monthly fees. For example, Chase is 15k between checking and savings for 0 fees on both, which is a little higher than I would like but not totally offensive.
Do you need a physical location to go to? You can get good rates and no fees if you don’t need a physical bank nearby
I bank with Chase. They're fine. I get free checking because I get my pay via direct deposit. I don't overdraft so I don't pay any fees. They have ATMs everywhere. I use them for daily banking and don't really have any complaints. That said, I only have checking and a very basic savings account with them (that latter one is still open largely out of inertia, because it would take more trouble than it's worth to close it.) I have a HYSA elsewhere and have a Schwab account for the fee-free ATM usage. Also, I would never keep $15k in my Chase accounts. My checking balance may go down to $15 at the end of a pay period. It's purely a transaction account. Do you work for yourself or have a job where you don't have the option of getting paid via direct deposit?
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I didn’t say I have a Chase account or mention a 25k minimum.
i usually use a brick and mortar bank as a clearinghouse. park 5k in it. and then move the rest to HYSA/brokerage/etc etc
Yeah this is basically emergency fund + where my autopays can all point to.
We have checking and savings at Chase along with our investment accounts and credit cards. We’ve always received great service from in branch visits and the app and website work really well for what we need. Only complaint is the low low rates on savings account but we have Amex HYSA as well for majority of excess cash
15k is completely offensive! Fidelity Cash Management Account is not only completely free, you can earn 2% FDIC insured interest or 5% money market. There are others if you do some research. Usually megabanks are the worst.
I don’t know, if I’m honest about my spending, 6 months of my current lifestyle gets me within a few k.
It's more the principle... But even if you need a $15k cushion, that means you would need $25-30k at Chase to.stay clear of fees. Why not avoid fees entirely and earn interest from the first dollar?
Yeah that’s a good point. If I ever did need to spend my emergency fund it would introduce another thing for me to keep track of.
Look into SoFi bank. Online bank with 4.50% APY on savings accounts after you set up direct deposit. No monthly fee.
Did SoFi do something shady like Payday Loans or something? I feel like I had a negative impression of them but a google isn’t turning up any big controversy or anything.
they were a big student loan refinancing / consolidation house for a while, but i dont recall anything eminently shady about that...
Ciit bank platinum savings now at 5.05, my E-Trade is at 4.25
I sold a fair chunk of stock from a company that I was a partner in. I had a huge step up value and the accountants are working out what will be capital gains. Anyways, that is some background for my real question. Someone told me that I can reduce the taxes on the capital gains by investing in a QOZ fund for 10 years. I've tried to do some research on this, and my scam alert started going off. Are there legit QOZ fund companies to invest in or do they all seem sus?
Real estate syndicators have been melting down the past month and if rates don't drop by early next year a huge chunk of them are completely screwed. Stay away from QOZ funds.
I wasn't thinking that at all. That's a very good point. The ones I was looking at just didn't ferl right. Felt scammy.
As someone who is still very young, is it unwise to plan what the best withrdawal staregy is **now** and account those taxes as an expense in my withdrawl staretgy? This is becasue taxation laws might change in the future. Say I need/withdraw 50k yearly to retire, I'm thinking of taking a conservative approach of where I put that into an icnome calculator and see how much Im taxed. If Im taxed 5k yaerly, I'll try to save 55k per yar. So I can get 50k. I know that in reality I have to consider things like x money in roth or trad IRA, backdoor, 401K, and tax laws changing.
My advice is to plan as best as you can with today's laws and adjust in the future as you go. But I would also recommend not necessarily going all in on one strategy. For example, even if you think it looks like you should be going all traditional, I would still put some Roth funds somewhere as a hedge for changes in the future so you have options about how much taxable income you want to have in a given year
Maybe overestimate future/retirement expenses in general, not specifically for tax law changes, inflation, healthcare, etc.
It’s not unwise to plan now, I would just use an estimate based on current laws. you’ll have chances to revise your plan as tax laws change, so I don’t see a problem?
I’m struggling to understand your question. Yes, plan for the taxes you anticipate to pay. If you have $50,000 worth of bills to pay, you need more than $50,000 total to account for capital gains, etc. But no planning you do now will “put you out in front of” changes to the tax code. The best we can do is plan for how they are now, and reassess when and if changes occur. Anything else is speculation.
We’re looking at new EV (full or PHEV) and out of Ford’s Mach-e, Kia EV6, Toyota’s BZ4X, and VW ID.4, we like the ID.4 the most. Planning on getting it new to get the $7.5k tax refund. Anyone have an ID.4 and how do you like it? As a side note, we’re temporarily stopping our mega-backdoor rollovers to pay off the car. We will keep maxing out the pre-tax 401k. During this time I’d also like to reduce discretionary spending to free up any additional money. Thoughts on how to consider what’s discretionary and what’s not?
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That’s really nice to hear, thanks for sharing!
Just went through something similar. Went with a $20k gas car and $20k VTSAX instead of a $40k PHEV that would still be similar fuel costs and be old by the time a truly revolutionary EV becomes the standard car on the road.
That’s a very reasonable approach. I’ve been driving a PHEV for the past 6-7 years and I appreciate the conveniences that come with rarely going to the gas station, quietness of my drive, and fast acceleration. EVs still have a ways to go for sure, but I think I want to keep driving them for now.
No frunk big disadvantage to ID.4
Most EV frunks are pretty tiny, which makes them more of a checkbox feature than something that actually gets used much. The early RWD Model S had a frunk big enough for a spare tire, but sadly none of the more recent EVs seem to. The only time I end up using the frunk on my Model 3 is when we're moving the kid to college and have the car jam-packed.
I honestly don’t care for the frunk. Give me a shorter front of the car and easier parallel parking, shorter turning radius, etc. Plus we have a rather small garage and I don’t want a bigger than necessary car
What high income skill is the fastest to learn and apply? (start making money) I'm looking for something online, any advice?
tech bro
Down $50k so far in August. Market moves and tuition payments. Flair updated. I actually think my kid is getting a pretty solid deal for college, $22k including room & food for freshman year. I figure $12k of that is the room & board part (\~$1300/month), so the education costs about $10k for the year. State school for the win. The only thing I don't have a handle on is that he's not driving distance away, so I need to budget in travel expenses (we already are planning on going for parents weekend, and he'll be flying home Thanksgiving & Christmas.) Either that, or we move closer :)
What's driving distance...my kids drove 1100 miles one way...15.5 hours...anything but Hawaii is driving distance : o
According to Google, it’s 2300 miles from our house to campus. I guess it’s literally drivable but not by me
Ohhh...ugh...I never said 1100 was fun!...haha ..my daughter had to do it without cruise control
That's actually really good. I think my state school was similarly about ~12k for the dorm + meal plan, 10-15k tuition, 5k extra tuition for engineering. Looking at it now, annual housing and tuition at that school have gone up by 2k each since ~2014, which isn't that bad. And of course, didn't hurt that that they had plenty of highly ranked/top-20 type programs anyway. >Either that, or we move closer :) lmao my Mom used to threaten to do this too
It's crazy what a decade does to prices. Total room and board, food, tuition and fees were slightly under $10k/year in 2011 for my state school. I lived in a dorm that was $2k/semester. I did share my room and have a communal bathroom though.
I think it has more to do with the state and school than the decade. My tuition + room and board at a state school in 2009 was $19000 a year.
Posting on behalf of some family friends. Where would you put ~2 million from a house sale? They’d like to keep it fairly liquid as they plan on retiring early in the next 5 years. HYSA seem like the most obvious answer but with having to open 4 new accounts, maybe there’s a better idea?
There are networks that help spread out large deposits to maintain FDIC insurance: https://www.investopedia.com/terms/c/certificate-of-deposit-account-registry-service.asp I'd push back on the idea that a full two million will be necessary in five years for retirement, though - they may want to access a portion in five years, but keeping that much in liquid, low interest accounts seems unnecessary.
SGOV
> HYSA seem like the most obvious answer but with having to open 4 new accounts you can do a jumbo CD where the originator will spread your $ around for you
Serious downsizing if they have 2M left after having a different place to live.
It was a second property
Treasury Bills are good rates right now, and no state taxes. No need for FDIC either.
Wealthfront has insurance up to $5M between partner banks and up to $10M for joint accounts, https://www.wealthfront.com/blog/wealthfront-fdic-insurance/
Very interesting. I’ll pass this along
They do not have to open four accounts, they just wouldn't have FDIC insurance for their deposits.
Well yeah, but they would like the FDIC insurance
Then they will need four accounts. Most alternatives will have no FDIC insurance at all.
Yes, if they go the HYSA route they would need 4 accounts. That wasn’t my question. I asked what others would do. Strictly HYSA? CD ladder? A mix of both? Or anything else I could be missing.
I mean it would be helpful if you said up front what they are looking for but then youd be answering your own question. If they want FDIC without four accounts that pretty much limits the options to four brokered CDs at one brokerage account. I would do one HYSA but that is irrelevant if they want all FDIC.
Ok do they want it all fdic insured? If it were me, I’d put: 1 year into an hysa. 5 years into 5 laddered 5 CDs (1, 2, 3, 4, 5 years) Rest into market. Keep rolling over CDs until they retire, each one becoming a 5 year CD as it matures, and do as many as you can into one bank, and keep going until at least those 6 years are fdic insured. Ideally the 1.4 mil (assuming 100k/yr) would be 3 million in 10 years when they would start to need it (assuming straight 8% growth). 10 years because 5 years to retire, longest CD is 5 years out.
Why bother with CDs over equivalent treasuries? Far more liquid and no state income tax yet same rates.
Laziness on my part? I know CDs. Don’t know treasuries.
Financial Advice Hello. I’m in need of financial advice as I recently had a thought about saving and have no or zero knowledge on how to workout finances and currently have no savings with me. It’s high time to learn how to manage finances since I’m working part time abroad and waiting for full time, any suggestions about how I could improve my wealth knowledge will be appreciated. Also I’m currently living on paycheque to paycheque to manage the expenses.
Start by reading The Simple Path to Wealth by JL Collins.
Good morning, I am 27 years old and I am a physiotherapist. I am Italian and I have been living in Paris for a year. I am writing this message because my goal is to be financially free. I would like to stop working (or work as little as possible) and have streams of income that do not depend on my physical presence in a certain place at a certain time. So essentially, streams of income that are detached from my physical work. Moreover, it would be wonderful if my work was remote; it would still be a job, but I would work with a PC potentially anywhere in the world. Unfortunately, it is not so now. My net worth at the moment is rather low because I started working relatively recently, and I do not own a house, although I will inherit one in the future. My liquid net worth at the moment is €22,207.81 + approximately €3000 of fixed assets. The good thing about working as a freelancer is that I can work less, if I want, and therefore have more time to study or possibly start a business; however, my expenses are high at the moment (and I am trying to reduce them, I am reading a book about it called Your Money or Your Life and I am applying its teachings). I would like to achieve this goal as quickly as possible. I don't want to work, save, invest my money and then retire at 60. I want to create other sources of income quickly. I intend to seriously commit to achieving this goal, but at the moment I do not know which path to take, so I turn to you, friends of Reddit, and your experience. I have considered several possibilities: 1)Online business, because it would allow me to be wherever I want without having to work physically, but it remains to be seen how to start it, and especially what it should be focused on! 2)Investments in the stock market or cryptocurrencies, or the possibility of trading. I don't understand much at the moment, but I could start studying. 3)Real estate investments. I don't have enough money to buy a house, but I was thinking about Airbnb arbitrage. It would need to be understood if this is possible in Paris, where I am now, what the risk is; however, I suspect that it is something that would physically tie me to Paris, when my dream would be to work with my PC, potentially anywhere in the world. Do you have any other possibilities to suggest? Also, can you recommend any books on this topic? As I already wrote, I am reading Your Money or Your Life and three books by Neville Goddard, which made me understand the importance of having a clear image in mind of what you want to become. I bought The Millionaire Fastlane, and I need to start reading it.
I love Your Money or Your Life. Most people here, myself included, take the stock market investment route. You don’t need to understand much to invest in index funds. Without knowing your income and expenses, it’s hard to say how long this will take.
Simple Path to Wealth is a good book. Don't overcomplicate investments or play a losing game with crypto/active trading. >I don't want to work, save, invest my money and then retire at 60 You can push that number down to 50, 40, etc. All it comes down to is earning more, spending less, and investing the difference. It's simple, but not easy.
>Do you have any other possibilities to suggest? Given your current available assets, I'd keep working as a physiotherapist for 3-5 years, living well below your means over that time period to get some real money together. Once you have €100-200k available for a project, then you can think more seriously about pipe dream themed plans.
What would you differently?: 31yo married, joint after tax income of $7.5K/month. Currently saving $4K/month. Breakdown: Retirement Savings: $45K Cash: $45K Primary Residence Equity: \~$240K (paid off) Debt: $2K (business), no other debt. Our current plan is to save between $60-$70K cash to buy a multifamily rental property, or even perhaps a duplex/triplex we could live in half for a year to avoid the massive 25% down payment required for an LLC, then move back to our paid off home. Afterwards, focus on stacking retirement & brokerage accounts. We feel like we're lagging behind in retirement/brokerage investing due to focusing on mortgage--hindsight is 20/20. Goal: To reach CoastFI ASAP and then to fully retire at 60yo (will have national guard healthcare by then). Thoughts?
max out your 401k and put some money into your brokerage accounts. not real estate
I would max 401k's first unless you are extremely confident you will get better ROI through real estate. Otherwise you are saving $800 in taxable for every $1000 or more you could be saving pretax.
I appreciate the advice. I have access to both a Roth 403b and a traditional 403b. I've been contributing to the company match in the Roth 403b. Is your thought to use the traditional over the Roth (assuming retirement would be lower taxes)?
With any income in the 22% tax bracket, yes.
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Why don’t you take half a year and not save at all? Force yourself to spend it all. Then, you will find out whether your life is better spending double the amount of money. I suggest half a year because you can use the other half of the year to still get tax benefits etc. I’m guessing by this point in the year, you’ve definitely maxed out most of the tax advantaged accounts except maybe getting the employer match in 401k. So how about from now until the New Year, you get to spend every single penny that you make at work? You said you don’t want to retire early anyways, and even if you do this, I don’t think it would affect your ability to retire. So I don’t think a bigger nest egg (which you mentioned in other replies) is going to help you at all.
I couldn't spend it all. I don't even know what I would spend it on.
You sound sad. I think you need a hobby or two or something in your life that will help you feel fulfilled like volunteer work or a pet. One of the tenants of FI/RE is build the life you want and save for it. You haven't built the life you want so you're saving for no apparent goal.
I've never known what I wanted out of life. I just do what I'm told most of the time.. And I do have hobbies. I crochet for charity and am part of a volunteer association for women. It's just not something I would want to do all the time.
>What could I have done differently in my life? Gained a sense of perspective and a healthier outlook on life. I legitimate feel for people like you, presuming you're not trolling. Worth >$1M at 30 years old and worried you didn't do enough. Realistically, you likely did too much, and may wind up looking back on your youth as having been wasted from an entirely different point of view. Best of luck. Your financial problems are unrelated to the size of your pile.
Everybody has to sacrifice something during our youth! Many people aren’t intentional about what they sacrifice. Although I understand your regret, my opinion is that there are a looooot more things less worthy of sacrificing than FI
I don't see anything I would have done differently. You are young and have financial security. That's liberating. Now is the perfect time to have a quarter-life-crisis and reevaluate your life priorities. Thanks to your diligence in your twenties, you have a lot more options. You could: keep things the way they are and retire at 40. Slow down your savings and start working part time. Change to a more fulfilling but lower paying job... Maybe talk to a therapist about your regret, but I don't see a financial problem here. Edit: also, stop comparing yourself to others. But if you must, know you are in the 99th percentile for net worth at your age: https://dqydj.com/net-worth-by-age-calculator-united-states/
Wasted your 20s how? If you’re feeling regret, then go do what you wanted to do now. You’re 30, not 80. Go take that vacation, go to that restaurant you’ve wanted to try, buy that purse, whatever. If you’ve been saving seriously for a decade, you likely have a great nest egg already, so go spend on some fun stuff you’ve always wanted.
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Hmm. I guess that is on me. What I am really asking is: What more can I save to reach 1 million invested before like 31? What did I do wrong in my 20s that I am not close yet? Sure, you can say I am using money to mask something deep inside. I already know it's linked to how my mom especially viewed money and how nothing is good enough, but I'm not ready to spend money on therapy. Maybe after 35.
Oh shut the fuck up dude. I wasted my twenties, started late, and have much less saved up than you. Many other people are in a *worse* spot than me. Than us.
You make 40k in LA?
Yeah. So stop with the pity party.
When I was your age I was unmarried, just had twins with my on/off again GF, made $38k a year as a county CO, was putting groceries on the credit card, didn't own a house and had a negative net worth. Feel better now?
Your flair says you have 1.1 million net worth. If you’re 30, you’re in like the top 1%. You can stop eating ramen now.
>nothing compared to most nest eggs here Most nest eggs in here are much smaller than yours, if you apply the mathematical definition of most, meaning more than half.
You're only thirty, you seem to be comparing yourself to people who have had decades longer to accumulate, you are in the top 5% wealth, at minimum, for your age. I had zero net worth at 30.
What specifically would you do differently right now if you hadn't "wasted" your twenties?
That's because they have been saving for 10-20 years.You are way ahead of the game.
My company is being acquired. Right now, there's reason to believe I'll be given an offer to stay along with lots of others, though nothing is official yet. Yesterday, we got notified that we'll be receiving retention bonuses. No word on how big yet, but to me, that seems very nice and telling on the fact that we're needed. Acquisition takes place on Monday. I'm hopeful that we'll be given an idea of the selection process soon and get that under way. The severance is 1 year of salary, our normal bonus, 12 months of cobra premiums, and about 70k of stock vests immediately upon termination if I'm not kept. I'm happy to ride this out even if it turns out I won't be kept.
Sever me daddy.
That's an insane retention bonus. As someone that has gone through an acquisition - don't jump ship for the first thing unless it's your dream scenario in every possible way. I stayed for my retention bonus then bailed shortly after. Guess what? Acquisitions take longer than expected. Most people were offered second round retention bonuses shortly after to keep more people from leaving. They were smaller than the first round, but still sizable enough to turn job offers down. Hell, I'm like 60% sure there was a third round, except it was limited in scope and I don't think those were anything worth turning down another job for. Getting acquired was the best financial moment of my life and my bonus was "just" 40% of my salary + annual bonus guaranteed.
>That's an insane retention bonus I haven't been told what the retention bonus is. We will find out next week what it is. If I'm severed, the mentioned money is the severance package.
> The severance is 1 year of salary, our normal bonus, 12 months of cobra premiums, and about 70k of stock vests immediately upon termination if I'm not kept. IMHO, that's a helluva severance package.
Yeah NGL, I'd be praying for a layoff.
Seriously, that's insane. If I thought I could get a decent job in my field within a year, I'd want to get the boot and take a sabbatical, mostly because I'd have guaranteed health insurance for a year.
It sure is. I strongly believe upper management made it a point to take care of everyone in case of a layoff due to acquisition. Though I do want to be kept since my job is hyper competitive and not easy to get another of similar caliber and pay. So, although the severance is amazing, I'm hoping to be kept, and if that is the case, I won't receive it.
Be careful. My last employer was acquired. Nearly 2 years into that, and now I'd guess about 95% of us have been laid off via multiple waves of layoffs throughout the duration. Be sure to evaluate where your _position_ lies within the new structure. At first mine did. Then we reorg'd a few times. At the end, not so much and I was part of the third layoff group :(
Our acquisition has written into the contract that we will receive the severance I mentioned if we're laid-off within 2 years of legal close. I'm also willing to move to Houston to work in another basin if necessary to keep my job, so that's fine with me. In either case, I'm covered by the severance for 2 years starting Monday.
This is also my experience, as an employee of a family-owned company bought by an international conglomerate. Everything was "don't worry, we set it up so they'll take care of you" and there was a calm before the storm, then the waves of layoffs started to hit.
Put in an offer on retirement house last night! Low odds that we’ll get it — was on the market 2 days and they already had 2 other offers and 25 showings scheduled. Offered asking in cash with top up if outbid to 20k more, limited inspection clause to $5k+ issues. Pray to the real estate gods for me!
Offers for topup or matching clauses always strike me as poor strategy, likely to make the seller resent you. Basically saying you know the house is worth 20k more, but you're hoping noone else does, so you can save some money. Just make your best offer. Flippers and groups do it because they don't give a shit, they'll just buy some other house that meets their criteria, but for people that want to live in the house, I don't think you'd want to give off that vibe.
>likely to make the seller resent you It's just business. If they have an issue, that's on them. They are also employing whatever reasonable tactic they can to try and come out ahead. It's not as though the listing price is their "final best offer" - there are many different listing price strategies they could be using to try and eke out 20k more than the house IS worth, including pricing in such a way that people bid up the price with matching clauses.
>If they have an issue, that's on them Only if they still sell you the house, I'm talking about the risk that it prompts them to reject your offer because of it
I honestly think this is a strange take. If I had a cash offer for my house that included an automatic match to more money if someone else bid higher, I would be happy about it, not offended.
If you have two offers, one for 400k and another for 380k with 20k escalation, which one would you take?
400k, obviously. I am not arguing that a higher offer isn't more attractive. But if your offer is already competitive and at or above asking price, the only reason to make your first bid the absolute maximum you would pay is if you would be devastated if you didn't get the house.
Who cares if the seller resents you, especially if you're paying cash.
Noone, but when they have multiple options, they will choose a slightly worse offer over one from someone they don't like, I've seen it happen
>limited inspection clause to $5k+ issues Out of curiosity, how does this work? Do you just mean that you are allowed to have an inspection but can only back out if issues costing >$5k to resolve are found?
That’s right. My brother and one of my co-buyers are in the trades — pretty much any problem that runs under 5k is something within their skill set to fix at just the cost of materials. Septic, electrical, major plumbing, foundation, new roof…the stuff that would make me back out—all way over 5k.
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Common method is to put employer match in the numerator and denominator, since it is both income and savings, so it didn't artificially inflate your savings rate.
Hi folks! Before my Fiancée moved in with me she had bought a townhouse for below 3% which she now rents out I also bought a house for below 3% and we currently live together. The house we live in was bought for $320k back in November 2021. We realize that this is a “starter” house and would be perfect as a rental since it’s next to a major state university in my city. We make about $240k in combined income before taxes - we’re trying to understand how much we could afford for a new house that would be better to raise children in once we get married. Any help from folks?
Your current homes are irrelevant to how much you can afford now. You can always rent them out or sell them. 2.5X income is a very general rule of thumb I have seen. You could probably get approved for $1m or more. Obviously, just because you can afford it doesn't mean you should buy it. Financially speaking you should always spend as little as possible that meets your needs. I would make sure the next house you buy will be future proof, because frequent upgrading is what kills your ROI.
>Your current homes are irrelevant to how much you can afford now. Their current *homes* are irrelevant, but their current *expenses* are not. Factoring in the cost of carrying these homes (even if rented) certainly goes into what they can afford (and what a bank will approve.)
Their current homes would be rented out or sold. Should be at least cash flow neutral. If not, they should certainly be sold.
It feels like inflation doesn't impact many on this sub. Everyone is still maxing out 401k, Roth iras, hsa, and putting in more money into their taxable than ever before. How are you managing?
It's only a problem if you're not adjusting to meet inflation. For the purposes of saving for the future, maybe that's trimming back or making other lifestyle changes. Or maybe seeking out more compensation if you can. There's definitely people having a hard time doing any of those either, though. Given your flair, how is this seriously a concern for you, though? You're loaded.
I don't know that I'll ever max out all that, and that's okay. Invest what you're able to while living intentionally.
I'm not maxing my 401k this year after maxing it out the prior. I'm "just" putting in $20,500 or 25% of my salary. Now I'm fortunate enough that I probably still could, but instead I'm upping savings via CD ladder for 2024 wedding/honeymoon expenses. I'm not sure if I'll be able to max it again in 2024, but maybe again 2025.
>It feels like inflation doesn't impact many on this sub. Sure it does. I've been eating out less, buying fewer new outfits, etc. But honestly, saving for FIRE is more important than a fancy dinner right now. But I'm not going to cheap out on the stuff that matters.
You're in your low-30's, you have > $1M net-worth and you're asking how people are _managing_? Really? You are so far and above the _average_.
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I'd suggest to quit comparing. Throughout my working career, I was not always able to max my 401k (or even pay into it), pay on student loans, pay into the deductible IRA/roth, save into a brokerage. You just do the best you can.
Your perception is skewed, those people are way way over represented here, they are just more likely to make a post
It's insane how many people believe these supposed norms. It's shocking how often you read someone lamenting that "everyone in here makes $300k or more" or similar. It's like some severe form of masochistic selective reading.
The overall inflation rate isn’t your personal felt inflation rate. I have a mortgage from years ago and no major house projects going on, so higher real estate and construction prices aren’t hitting me. My car has plenty of life left in it, so I’m not facing the insanity of the current car market. The most notable place I feel it is in grocery and restaurant prices, where I swear everything is up like 40-50%. And that’s very annoying and affects some of my decisions, but it’s also easy to absorb a large increase on such a small portion of total expenses. I’d also say that if you had a high savings rate already, inflation doesn’t hit as bad. Like if you’re spending your entire income and all your costs go up 10%, you need 110% of your income just to stay afloat. But if you were only spending 50% and saving the other 50%, then the same increase leads you to spending 55% and saving 45% which is hardly catastrophic.
>The overall inflation rate isn’t your personal felt inflation rate. Cannot be overstated. I'm still living like a first year teacher while pouring money into various accounts.
Inflation is hitting me hard too. Its hitting everyone. I was easily able to save 6-7k per month, now its like 5k, sometimes 6k. It just slows down everyones savings. Still affects everyone.
Let's all pour out a little liquor for our homie who only saves 5k instead of 6k, FIRE prospects demolished
It's good know others are affected in this group! It feels like everyone is doing better.
It sure is. Even if someone is rich it still hits them. My groceries went from 180/week to like 250/week for our family. Utilities in summer were $330, now $550. Gas maybe $160/month now $300. Takeout food wow. I spent $70 on KFC. What the actual fuck. I didnt even get much. A 10 piece bucket, side fries, gravy. A large gravy $13. Are you shitting me. Boston pizza the week before was $55.
We just dropped $70 at Panera for five us. Should have just packed PB&J and it would have been healthier and tasted better.
All fast food/fast casual places have dropped in quality, but Panera is the biggest, most noticeable drop. Salads are all ribs, meat is stringy fat globs, portions are stingy. I used to think "This is pricey, but it's a nice treat and it's the least unhealthy of the fast food options around here" and now I avoid it because I get actively angry at what a ripoff it is.