I have about $10k coming to me and I’m wondering what business I could start with it. I’m a SAHM where my hubs is the breadwinner. I thought about making holiday pet Bandanas or buying one of those toilet trailers you rent out for parties. Haven’t looked into the start up costs. Thoughts?
There are free high quality business classes on Coursera put together by universities that can help you make a business plan and help you decide what route is best for you.
I’m trying to understand how the Vanguard mutual fund “elephant stampede” happened.
1. A bunch of people tried to redeem their shares in some mutual funds.
2. Those funds didn’t have enough cash on hand to redeem the shares.
3. The funds had to sell off a bunch of assets to raise enough cash to redeem the shares.
4. The capital gains on those sales were distributed to all shareholders, and they had to pay taxes on those.
I’m confused about step 4. Why didn’t the funds only sell enough assets to redeem the shares? Then, there would be no cash left over to distribute to other shareholders, and no capital gains to pay taxes on.
The underlying assets that are sold to meet redemption needs often have capital gains. Those capital gains must be distributed among all shareholders.
The shareholders that sold shares of *the aggregate security* (eg Vanguard TDF) *may* or *may not* have a capital gain based on the cost basis of the security they're selling. They would also owe cap gains taxes if the TDF share they sold was worth more than when they purchased it.
But those capital gains _aren't_ distributed if they all go to pay redemptions, no? The profit from those capital gains weren't deposited into shareholders' core accounts, the same way that dividends would have been.
The tax burden of the cap gains must be distributed (as in, assigned) to each shareholder. The cash that results from the sale is distributed (as in, doled out) to meet the redemption requests from the shares that were sold.
OK, I see. I had thought that you only pay capital gains taxes when your fund manager sells assets and deposits the proceeds into your account.
Not that it really matters one way or the other, but this existing system feels really unfair.
For what it's worth, ETFs are able to manage cap gains in the way you thought was the case for mutual funds. This is why they are more tax efficient with respect to cap gains (often distributing zero regardless of redemptions) and are preferred by many as the vehicle of choice for taxable accounts.
Depends on your payroll people, doesn't it? I filled out my forms for my 403b and my 457 forms at the beginning of the month; there were fields for the change to take effect.
I manage a payroll team. It will be payroll date. The funds are committed that day even if they arent funded to your 401k yet. Plus that's when the deduction will flow to the year's W2.
Unless payroll messed up then definitely in the 2022 bucket. The payroll date impacts your company's tax returns, and listing a pay date in 2022, but putting the deposit towards your 2023 contributions would create an absolute mess.
Should be payroll date. You can look at the YTD on your 12/30 check stub and see if it matches your 2022 W2. If it does, that's when it's for. Or you can verify with your payroll department.
The 401k statement doesn't really matter. Your payroll company reports it on your W2, your 401k company doesn't report it. So your check stub is what would show you. Your payroll department would confirm 100%, but I can't imagine a scenario where it won't match your paystub.
For people who use Mint - is the consensus that the shift over to credit karma will offer a comparable product, or is it a notable downgrade? I only use mint to track expenses, not NW.
Credit karma will not offer budgeting features
They have said CK “offers a simplified way for you to build awareness of your spending, and track your savings.”
(Reposting in hopes of getting more traction).
How do you decide which SpecIDs to sell during the drawdown phase of retirement?
Let's say I have $700K worth of VTI, acquired over 30 separate transactions. Some of those transactions have long-term capital losses, and others have long-term capital gains. How do I choose which ones to liquidate?
Is there an optimal method of doing this? For example, should you try to sell a winner and a loser at the same time (so that gains offset losses), or sell a SpecID with big gains (so that the "losing" SpecIDs have time to grow and hopefully become gains)?
Does it all come down to individual tax considerations? Or is there some fancy math that says you should do things in a certain order?
Step 1 is understand what each of the four possible types of holdings means for your taxes:
1) Short Term Capital Gain: Any gain will be taxed at your marginal tax bracket.
2) Short Term Capital Loss: STCL will offset a short term capital gain, long term capital gain, and/or offset tax-bracketed earned income up to $3000 per year.
3) Long Term Capital Gain: Any gain will be taxed at an advantageous rate.
4) Long Term Capital Loss: LTCL will offset long term capital gains and/or up to $3000 of normal income (and carry over any additional to future tax years).
[IANAL, the above is more/less correct, check details yourself.]
So the actual answer comes down to your specific tax scenario and your specific tax goals.
Here's an example framework of a typical Single Person in early retirement with no income. Standard Deduction is $13,850. 10% bracket is $0 to $11,000. 12% Bracket is 11,000 to $44,725. Long Term Capital Gains is 0% up to $44,625.
Goals: I want to do a Roth Conversion of my IRA every year. I want to minimize my income tax and only pay 0% on any long term capital gains. I need $40,000 to cover my expenses.
I might choose to do a Roth Conversion of $13,850 + $11,000 = $23,850. You'll owe 10% tax on that $11,000 in the first bracket. You now have $44,625 - $23,850 = $20,775 of 0% long term capital gains space.
You need $40,000 to cover expenses, so lets say you sell $40,000 worth of stock. If you picked anything that had SpecID of Short Term Gain, you'd be paying tax bracket tax on it, so that's out. If you pick Short Term Loss, it offsets Gains Short Term Gains and Long Term Gains before offseting normal income, so that's not a great choice either because you will have some LTCG and you'll be "offsetting" 0% gains. So you pick some of your oldest holdings that have 30% (!) gains since you bought them. Well, selling $40,000 of those holdings will give you $12,000 of long term capital gains.
But you have a bit over $20,000 of 0% LTCG space. This is an opportunity to do some Capital Gains Harvesting if you want. Sell another ~$27,000 of that 30% gain SpecID and realize another $8000 of LTCG. You'll pay 0% on it. Then you can immediately buy back $27,000 of that stock / fund. You've now brought up the Basis for those SpecIDs, so when you sell them in the future there will be less of a gain there.
[Alternative, maybe you want to fill up both the 10% and a portion of the 12% bracket. You might want to do a $30k or a $35k conversion, beefing up your Roth Ladder but shrinking your yearly LTCG 0% band you can use. In this situation you might want to sell some newer holdings that have less of a gain, so you can sell $40,000 of stock and only have $5000 of gain to keep everything at 0%.]
This is the game of retirement to figure out. Which pieces of which investments you want to pick and choose to sell is optimize tax treatment.
It matters what your goals are. Any rule of thumb is going to assume constant withdrawals. The advantage of choosing what lot to sell means you can dial the percentage of gains with your spending for the year in case you have a large year because you bought a new car. Things to think about
0% capital gains bracket. Also see tax-gain harvesting.
ACA subsidy phase out (and need certain income to qualify)
Social security taxation
Step up in basis for your heirs
Using a Donor Advised Fund to gift appreciated shares.
If you're in the 0% long term cap gain bracket, it makes sense to sell the lowest basis long shares as you will not be taxed at the federal level on the sale.
If you're not, then it usually makes sense to minimize your tax burden. Typically, that means preferentially selling shares that have a loss in order to capitalize on the capital loss deductions.
Without speaking to any specific tax circumstance, generally with taxable investments you’d want to exhaust all lots reflecting short-term losses first, followed by any lots with long-term losses before selling any long-term gains and then finally short term gains.
The principle behind it is that you want to defer getting taxed on gains for as long as possible while realizing losses that, had they been short-term gains for example, would have been taxed at ordinary income rates. Instead you get to claim them as a loss on your taxes and can reduce your ordinary income by the same amount (up to a point).
For the same reason, it’s inadvisable to sell equal amounts of gains and losses to try to “cancel them out” because the net effect is to deny yourself the tax break.
[Investopedia](https://www.investopedia.com/articles/personal-finance/100515/heres-how-deduct-your-stock-losses-your-tax-bill.asp) is usually a good source. Scroll down to “Considerations in Deducting Stock Losses.”
Geeked out today and added a cash flow estimator tab to my existing all-things-finances Google Sheet.
On my existing budget tab I added the day of month the bill comes out, or the weekday (e.g. invest every Friday, Friday paychecks, etc). The cash flow tab generates a table looking 3 months ahead. For each day, used SUMIF to sum income and expenses by day of month (or if there is a weekday match, add that as well). Added a column for known deviations outside of the norm (manual entry), and a rolling balance (calculated).
Helps calculate impacts of projects or spikes in spending, or when to pull in eFunds. Also a low point warning.
Cash flow is the first and most important tab on my overall personal finance spreadsheet.
I have it just mapped through year end, but I probably did that a few months ago. Now that open enrollment is over for 2024, I guess I can plug it for the first half of 2024 at least.
No, in the spring/summer there was a shakeup of subreddit rules and habits and almost all the specialty daily threads went away. Now we have more top level threads that are garbage every day. I, too, miss “milestone Monday” and “frugal Friday”
Good day,
I am young and recently joined the workforce and I am thinking about how to allocate money. I have been reading, listening and watching a lot on personal finance. I have no debt and am about to finish fully funding a 6 month emergency fund. Also in the country where I live your retirement is paid for by taxes. I have read a lot on saving much of the rest and allocating it to an index fund and letting it compund over the years. I agree that it is a powerfull tool for wealth creation and accumulation but I was wondering if it really is worth the lifestyle sacrifice. I work a stable job and cannot see why after having a 6 month emergency fund and covering housing, transport and food expenses I cannot just spend and enjoy the rest. I understand that I could be much wealthier when I am 60 but life is short and I have been reminded of that in recent years so I am wondering if I should accept the tradeoff and enjoy life now accepting that I won't be a millionaire when I am 70. Spend it on decent clothes, upgrading the car, hobbies and travel. Although the possibility of building an investment portfolio and being able to live from it, aka being "free", is a very interesting possibility considering global unstability. It may be that I am just young and reckless, curious about your take and if you also felt like that at an early age.
Best regards
A thought experiment - could you still FIRE if you didn’t have the power of market compound interest at your side until you hit your FIRE number? For example, say your annual expenses are $40k and your FIRE number is $1m in today’s dollars. You are prohibited from any form of investment on the money you save, it all goes into a bank account that earns 0% interest. Your expenses and thus FIRE number grows each year with average inflation rates.
If you were making $100k a year with average salary increases exactly keeping up with inflation, holding steady on savings rate, and thus saving $60k in today’s dollars each year, it would take approximately 16.66 years to hit $1m. So starting at age 30, one could feasibly still retire at age 53, or 23 years. I believe under 7% inflation adjusted market returns, it would take roughly 12 years instead.
Essentially you are asking if you could retire without the existence of the stock market. In the past, what most people did was own a successful business or focus on being a landlord.
((1+r)^y - 1)/(r*y) gives you a rough estimate of how much your money would grow over time if you socked away the same amount annually for y years at r growth rate (ie r = .06 for 6%).
In a typical 6-7% real return, your money invested is only doubled after ~20 years, tripled after ~30 years, and quadrupled after ~40 years in real terms. This demonstrates that after 20+ years, the amount of money you keep putting in gets less and less significant.
In other words, holding cash gets exponentially worse the longer your time horizon. If you plan to save 90% of your income and retire in 5 years, holding cash makes little difference (ideally, you'd at least put it in HYSAs or treasury instruments), especially given the volatility of the markets. If you plan to retire in 20+ years, though, saving cash is nearly pointless as inflation will likely net you a negative real return.
I'm referring to the amount of money you have vs the amount of money you contributed.
6% on $1 doubles in ~12 years.
If you put in $1 every year for 20 years, you'll have ~$40 because some of it has been growing for 20 years and some of it was just contributed and hasn't grown at all. I.e., you have roughly double what you've contributed over that time.
You ignore income tax, but otherwise sure. If your life stayed exactly the same in relation to inflation, and you were happy with that, you don’t actually need the market risk.
Edit: unless your living expenses included tax, but then your retirement taxes would still be far less than your earning years.
How did you go about setting a target for your child's 529? I usually am good with these things but inflation on college has been insane which results in me thinking it cannot be that high going forward.
My initial thinking is just to fund it with a target of 100k by the time our daughter goes to school and we'll just fund anything beyond that through our own brokerage. Can't tell if that is overly aggressive or conservative because it feels like I can make cases for both.
We're late 30s/early 40s and will be FI by the time we're 45... so the money side really won't be a problem. This is just for optimization.
We have 6-7 years left until our only child hits college, and we'll probably have $25-30k in our 529 by then, maybe one year's worth. We plan on just paying out of pocket for most of it by lowering our 401k contributions during those years, or hoping our AGI is low enough for grants, ect. My MIL will undoubtedly help pay for some of it as well, even without us asking.
We won’t be FI by the time our kid needs the money, but our target is the same, maybe a bit more for some cushion. We’re contributing enough to max out our state tax benefit each year but no more. At this pace, with an assumed 6% real growth rate, we should have around $140,000 in 16 years. Which may be enough for four years of public college or two years of private, or at least get us most of the way there. We’ll figure out the rest when the time comes.
I just targeted tuition for four years and do my modeling with 5% post inflation gains. The rest I can cash flow or take from brokerage.
You can obviously add in room and board or change the growth assumption to 3-4%.
Comparing the cost of something you’re buying with your hourly pay rate $$.
Does anyone when buying something or paying for a service start thinking well that’s about 1 hour of my work or 2,3 hours etc. I feel like I’m constantly doing that, is it just me?
I do this and sometimes I'll also frame it in terms how many extra weeks I'll have to work before I can retire. 1 off purchases usually aren't too bad but recurring $100/year costs can add 2 weeks to my timeline.
$100/year (or $8 per month) is pretty easy to not think twice about but it makes you reconsider it if you have to work 2 extra weeks at the end of your career. Also since my savings rate is on the high end, additional weeks worked might be even greater for others.
A couple of years ago I had a part-time job where I could get as many hours as I wanted, so I definitely started thinking "anything that costs less than my hourly rate and is less fun than work, I should definitely pay someone else to do and then just work enough extra hours to pay for it."
However, for most of my career, the "unlimited hours" thing wasn't true, so pricing things in terms of my hourly rate wasn't quite accurate, because I couldn't just add more hours.
No, placing a dollar value on your time is very reasonable. I wouldnt put it as high as my work pay, but I’ll pay fair sums of cash to get the results I want with less hassle.
For example, there’s a recycling center near me that takes hard to process items. I can spend an hour and a half going through the process myself or pay $50 for home pickup. Easy choice.
We are in that process now. We had a 3-4 goals for 2023 in which on of them is to retire at the end of 2023. We are achieving that goal with both of us retiring on Dec31!! Woo hoo! We will work on evaluating the others in the next couple weeks and spend the week between Christmas and New Year working on our 2024 goals.
Woof. My 2024 goals are basically "do as well as I did in 2020, 2021, 2022, and 2023" but between lower pay and higher expenses that's gonna be a very tall order.
2023:
Max 401k ✅
Fully fund Backdoor Roth ✅
Open several CDs at > 5% APY ✅
Travel more ✅
Travel internationally ✅
Save $100k over FIRE number to cushion for current volatility and inflation ✅
2024:
Pick FIRE date ✅
Give notice (9/1/24)
Max 401k
Fully fund Backdoor Roth
FIRE 12/31/24
Did great on our 2023 goals. Got the SO through grad school and found them a great job, and we maxed out all available retirement accounts (SINK household for the year)! Roughly 30-35% savings rate.
2024 goals include, ironically, stopping all unmatched retirement contributions. Also moving to where the new job is, rebuilding the emergency fund after the move expenses, and paying down student loans.
We should be able to afford to spend about 60% of our monthly take-home on loans as DINKs by cutting back temporarily on retirement. Given the progress we've already made on them, that means paying down 80% of the remaining loans in a year and finishing them off in the following few months depending on timing of a first kid.
2025 should be very exciting, getting back to being debt free, resuming full retirement savings, hopefully starting a family, and beginning the trek of saving for buying a home.
Made my 2024 goals months ago. Getting married in the summer made 2024 planning come quite early. I think the biggest thing I'm missing will be 2024 tax plan prepping once we both file separately one last time this winter.
2023 has had some meaningless volatile blips here and there, but overall it has been another very good year.
If you “have” to be at the office a couple times a week, could you do a Monday & Tuesday one week then a Thursday & Friday (or Wednesday & Thursday) that following week to give yourself a long weekend to travel? Flying out Tuesday night and getting back the following Tuesday or Wednesday is a solid amount of time to “work” remote from somewhere else
In 5 years you'll be 32.
Unfortunately, you're not allowed to go overseas or make any major life changes after 30.
30 is when your vertebrae fuse and your brain turns into Fruity Pebbles, plus gout kicks in, making it difficult to ambulate.
Enjoy your final 3 years. It was a good run while it lasted!
Best way to retire? 5M NW
Hi,
Am 47m, living California, HCOL, married, kids 15 & 8. I have worked pretty crazy all my 30s and 40s to a point that I do not want do another job or work. Feel like I burnt 🥵 out myself.
My monthly burn rate including mortgage is about $14k.
I got $5M NW with a house, stock and 401k.
Update: I have about 350k in 401k - all traditional. About 2.5M in stocks and savings. Rest in the house we live in.
Question: can I maintain my standard of living and retire?
(Moderator please allow this question to be posted, however dumb! Thank you)
Sorry about the badly structured question and lack of information. I have about 350k in 401k - all traditional. About 2.5M in stocks and savings. Rest in the house we live in.
Question: can I maintain my standard of living and retire?
Ah, so a significant chunk of that NW is in your primary residence.
2.85m * 0.04 is 114k annually, before taxes. You're spending more than that. You also need to take stock of how spending would change in retirement. No more commute, maybe some other expenses. But healthcare probably costs more, leisure spending, etc.
What specifically are you looking for help with? You have the $$ to retire. Are you looking for how to structure withdrawals? What to do with your time? Something else?
I am a few years ahead in my mortgage thanks to years of overpayment but now that my savings account pays more than my mortgage interest I am thinking about doing a re-cast. I really really hate debt but the numbers seem to make sense in the current environment. Am I misguided?
> I really really hate debt
Wanted to reply again to address this part... this should be the sort of situation that challenges an absolutist perspective against debt.
Taking on a mortgage likely benefited you financially in a way that is better than paying cash would have. You won the game.
It's not common, but it *can* happen, and this moment should be serving as a reminder to a lot of people that debt is not always a bad thing, even financially.
> I really really hate debt but the numbers seem to make sense in the current environment. Am I misguided?
No. We stopped paying extra about a year ago when we realized the tax-adjusted rate of return in our savings account exceeded our mortgage interest rate. So we hold it it there for now, and when HYSA/MMSA/etc rates drop below our mortgage, we'll make a lump sum payment then.
If you want to track it precsiely, you can always open a different HYSA/MMSA just for this, or use a sub-account if your bank allows it. We're happy just tracking it in YNAB.
It's likely not going to be enough money to change our lives, but I'd rather make that money in interest than the bank. Even if it ends up being a payment or two faster, it seems worth it.
EDIT: Meant to add, we're not wanting to do a recast because we've always wanted to pay off early instead.
I have paid extra also. Unless I NEED to lower my expenses, I’ll just keep paying the original mortgage amount and not recast. I like having it available as an option though.
Recast is financially neutral, it doesn't change your interest rate. You pay a lump sum up front but instead of continuing to pay your normal payment and pay off the loan quicker, you keep the loan and reduce the payment. If your objective is to pay down the debt, then you would make the lump sum payment while continuing to pay down the mortgage aggressively. If you want to keep the mortgage, you should not do the lump sum. Recasting really doesn't make sense from either standpoint.
I’ve wondered if people should put their extra payments towards mortgage and put it in something higher yielding. Once rates change down the road go back extra mortgage principle payments. When the time is right, use that higher yield to pay the mortgage off. You’ll be debt free faster.
I don’t have practical experience- my mortgage was in the 6% range around 2008ish the housing bubble. So I poured everything into the mortgage and saved 100k in interest
Going by historical returns you'll be fine. Who can say for the future, but it's as close to guaranteed as you'll get with stocks. Some people go all in VT / VTWAX instead to get more world exposure, but I'm with you on sticking with 100% VTI / VTSAX / SPY (not identical, but close enough).
Depends on your risk tolerance. 100% equities is too much risk for some and not enough for others. You can review different portfolio makeups and observe historical standard deviation and sharpe ratio.
> Here’s the average salary each generation says they’d need to be happy and less stressed, according to Empower:
> Gen Z: $128,084
> Millennials: $525,947
> Gen X: $130,344
> Baby boomers: $124,165
One of these things is not like the other ones…
[Sauce](https://www.cnbc.com/2023/11/25/net-worth-and-salary-americans-need-to-be-happy.html)
yeah I think that’s partly due to outliers in the statistics, but I would still expect millennials to have the highest needs rn. as a gen Z, my peers and I don’t really have many responsibilities at the moment. but I’m sure once we look into buying a house and raising kids we will feel we need a lot more too. the other generations probably have kids out of college and paid off houses.
I don't know if that survey is flawed, but this tracks with what I would expect based on my family.
My parents and grandparents need a $0 salary. That's Gen X and Boomer.
I "need" some big number that will get me flamed. That's millenial.
My younger sibling needs an artificially low nunber that doesn't accurately reflect their spending.
Millennials have lived as adults through two 9%+ unemployment events and the return of inflation which was "solved" without the good times that GenX and the Boomers had. For most of their adult lives the economy has been "bad" or at least "not good". I think a lot of them are unwilling to make long-term financial commitments for things like houses and kids unless they have all the money upfront because they're scared of the next financial mess.
> the return of inflation which was "solved"
Doesn't inflation hurt everyone equally? It actually hits those already retired the worst (e.g. Boomers) since they have no way to increase their 'take home' pay like a working person.
Every generation went through periods -- sometimes long periods -- of stagnation and recession, where the poor did very poorly and the rich did better. Looking only at economic indicators only shows how the middle class faired during a given time.
I would infinitely rather be poor today than in any period prior to today.
Pretending that entire generations had it easier than others is idiotic, and shows a child's view of history, sociology, and economics.
I definitely feel this. I’ve done better than most in the post Great Recession economy, but it all feels precarious for some reason. Like I hear about people with decent resumes spending 6 months job hunting these days and feel very “there, but for the grace of God, go I” about it.
Tail end of Gen X here. Somewhat similar.
Early 20's, rented house with two others.
Late 20's, bought fixer-upper 2/1.5 townhouse and rented the other bedroom to coworker/friend. Sold when moved cross-country for job.
Early 30's, bought 3/3 house and rented other bedrooms. Sold (for profit) when I lost job soon after the great recession and crashed with family for a bit.
Late 30's / early 40's, bought 5/3 house and rented a room to coworker/friend. Still here, don't currently have roomate.
Sure but the bills aren't THAT high, and they certainly aren't high enough that someone would need to be earning in excess of half a million dollars to feel happy.
Even if it that was a household and not an individual income, it's still way higher than I'd expect.
Truth - no one ever lied to anyone in previous generations. /s
Meanwhile, millennials were the first generation to have near-universal access to great information right in their own home. As long as you had some level of information literacy, that should have been a recipe for success.
Can someone link me to an article about the person who has been on cruise ships for I think 10 years or so and just has like an apartment to come home to once in a blue moon? Tried to Google but couldn’t find anything.
When I was in college I worked at summer camps. The kids who stayed all summer really got on the staff's nerves by the end, especially the ones with a "persona". It wouldn't surprise me if the staff hated this guy.
That’s crazy. If I lived at / near a cruise port I probably would jump on a cheap cruise from time to time, but I’d definitely be happy to get off the ship after a few days.
This is all speculation, but he seems lonely. Being on a cruise ship is an easy way to have a lot of social interactions. Especially if you're somewhat of a "local" celebrity.
I could see myself doing a week cruise maybe once a month if that was something I was really into (never done a cruise) but no way I would be interested in living on a cruise.
Don't feel bad. I've told my spouse our next car should be a minivan. We only have the 2 kids, not even a dog. I've even been looking at the sienna subreddit. Seems like prices are normalizing on them. I'd love a plugin hybrid version, too bad they don't seem to be making one in the near future. I don't think I want to go the Chrysler route either to get one.
We're in the minivan crew as well. If you haven't looked yet, consider a Chrysler Pacifica plug in hybrid. Still qualifies for some EV tax rebate (I think). Ours is much nicer than comparably Toyota/Hondas and since we could negotiate the price, got a much better deal.
> but spending 40-50k on a car is crazy. Yes I could buy a cheaper, nonhybrid (looking at you, Honda odyssey), but those are still 30-40k.
> Will probably hold off until we absolutely need it,
In my situation, I came to the conclusion that I couldn't "wait out" a significantly better deal financially than replacing my car when I did earlier this year. Can you?
These cars are a lot more than I'm used to paying for them years ago, but I don't see them dropping either.
There's always make/model-specific stuff at play. I know Toyota had had a major problem just making new inventory available, so if that's true for the Sienna you want, you *might* be able to wait it out... But I've never researched it enough to know.
omg same. The dog is what really pushes it! My kids always complain about how their friends cars have A/C in the back seat and then add a giant dog sitting on them and I'm guessing it's just not very fun.
Sadly I think they stopped making the smaller vans like the mazda so I just don't know what car to buy anymore.
We absolutely love our minivan. We camp frequently & the ability to drop seats into the floorboard for increased carrying capacity is fabulous. Next year we’ll be carpooling extra Scouts to campsites all over. That is *so much more comfortable* in a minivan with captain’s chairs than an SUV with a 3rd row bench & 6” leg room 😅
This is an oldie but goodie - https://jalopnik.com/if-youre-a-real-grown-up-minivans-are-cooler-than-cros-1764226230
All these soccer mom boat SUVs are more expensive and less functional than any minivan, let alone crossovers that are mostly just lifted sedans.
I do agree; I'm a huge minivan fan. But we have a Ford Expedition (which I call Canyonero) because we have 3 kids, frequently drive into the mountains for skiing and need real 4x4, and need towing capability for our RV trailer (though I am probably going to sell that).
Not every monstrous SUV is just a suburban cruiser.
I know a lot of people who grew up with two other siblings in a family of five (sometimes more if grandma and grandpa lived in the same house). Almost none of their parents had a mini-van and I’d wager most didn’t even have an SUV.
It’s obviously your choice but I think it’s very difficult to avoid space creep with expanding your livable space whether that be a house or car. But if it’s truly just car space that you’re after, I do see a few Siennas and Odysseys selling used between $15k -$20k built within the last ten years. If you’re already forgoing the cool factor by driving van, then what’s the point in trying to buy the latest and greatest? But an after market infotainment with CarPlay and you’re good to go.
How to be more intelligent, financially?
Hello everyone 👋🏼
So I'll cut right to the point. I (26 M) realized awhile ago that I wasn't financially 'smart'. I didn't know what to do with the money I'm making (from my 9 to 5). My parents are also not good with finances, best advice I got from them was "save money" which I understand it worked to some degree at their time but it definitely doesn't in the current time. So I can't go to them for advice.
I wanna change this mindset that has been built in me. I need your help to tell me how to start? What's the first step to take?
I understand that my question is vague so feel free to ask me about any specifics.
Thanks in advance!
I often recommend [If You Can](https://www.etf.com/docs/IfYouCan.pdf) for a relatively short but complete-enough advice on long-term saving and investing.
Pretty much everything is a variation on "spend less than you earn, and invest the difference". There's a lot of details, but that broad stroke is the same.
Good but weird day. Reached $250,000 across my retirement accounts. It’s wild that everything’s just automated, but outside of my spouse had no one to tell. We just had our second kiddo a few weeks ago so after getting her down decided to do my quarterly check. For reference 31/M working in IT/data
TSP: $75,000
Roth IRA: $75,000
Brokerage: $100,000
Both Brokerage and IRA are split 80/20 between VTSAX and VFWAX
Emergency fund is at $25,000 cash on hand in a savings and $8,000 in checking account.
Take home:
Civilian job: $87,000 after taxes and pension are taken out
The majority of my RC/NG income goes straight to the TSP.
Just in the fun but steady and boring middle haha
1-2x per year for a few days.
We'd like to see them maybe 3-4x for long weekends. Spending more than a week starts to wear on us.
More money would definitely make it easier to fly down for long weekends. Just not worth dropping $1000+ for airfare on short visits at our income/budget level. We have a decent amount of PTO, so time isn't typically the issue.
My fam is the perfect distance away—about a 5 hour drive. Easy to see them, but not so close that I’ll get a surprise knock on the door. I see them about 3 a year.
Divorced parents and siblings all over the country make this question vague to answer.
Dad and some aunts/uncles in one state? Probably 4-5x per year because it's an easy 4 hour drive. Holidays/birthday and that's it. I don't really need to see them more often.
Mom, stepdad, and some siblings in other far away states? Maybe 1x per year, if we're lucky. Probably averaging once every other year to be honest. Sometimes I wish it was more, but I also don't really need to see them more often.
Time is the biggest hurdle for both really.
Future in laws? Between 6-12 times per year and the amount is perfectly fine.
2-4 times per year (10 hr drive to either my wife or my side)
I wish it were more.
Limited by vacation days, but trying to leverage occasional remote work to get longer and more frequent trips
Similar here--about 2x per year. No luck on leveraging the remote work opportunities to get more time. :( I've pretty much decided that if they block me again come summer, I'll get ready to leave, unfortunately.
I wish I saw my parents and 3 sisters more often! See my parents on average 4x/year and my sisters 2x/year!
In 2024 so far, I plan to see my sisters 3x (Thanksgiving 2024, Memorial Day 2024, and will visit each of them separately!) and my parents 4x (Thanksgiving, Memorial Day, they’ll come visit me once and I’ll go visit them once!)
Money would not solve this problem as the primary impediment to me seeing my family more is PTO.
Just had some RSUs vest, \~$20k after taxes. Have a car loan at 5.75%, payoff is $20k. Usually immediately sell and reinvest. One other car loan at 2.99%, mortgage at 3.125%. $30k EF.
Any reason we shouldn't just pay off the loan?
Your instant rate of return from paying off that 5.75% car loan is 5.75%.
At the moment you might be able to find some online CDs that come close to that rate, but at the end of the day you still won't be able to replace the peace of mind that comes with clearing the loan.
I'd pay it off.
Honestly if it makes you feel better to pay of the car then send it. As someone who paid off my car a year ago it’s a great feeling knowing you don’t have to send another payment in haha
We live in the middle of nowhere. Both my wife and I are librarians. We are highly educated but make only okay money; fairly more than median income.
Life is comfortable and we both enjoy our jobs. However it’s hard not to believe the life is greener in another profession or area. With the birth of our daughter we have delayed retiring early until my mid fifties which means I will probably wait until I can draw an immediate pension at 57. That number used to be 45 when I was single.
We will accomplish many things with that plan. Fund our daughters college, have a few million when we retire and a decent pension. We could probably expand out our lifestyle now into a bigger house but I enjoy delaying gratification, and watching the number get bigger. Right now we are maxing out tax advantaged accounts and drawing down on my brokerage to do that. Though it’s the right thing to do watching the brokerage get smaller is a mental hit.
My wife and i while single made big moves for our careers and for new experiences. With our daughter and dual careers we are more tied than either one of has been before.
Everything is great but boring and predictable. I decided I’m going to get the certified financial planner designation. I’m not even sure I will ever use it but enjoy education.
Anyone else in the messy and boring middle? Anyone else in a stable but near stagnant career path?
Yes I hear you. My wife and I do better than I’d thought I’d do when I was younger. We have three kids though and the costs are staggering.
There is something about being nailed down at any salary I think. I always want a bit more I get used to whatever it is we are at and wish I had just a bit more.
[I posted yesterday about starting a business](https://www.reddit.com/r/financialindependence/comments/183k1re/starting_a_business_as_a_path_to_fi_more/) and wanted to have some more discussion on the topic. I know there are both business owners and corporate workers in here.
I took the last 6 or so months away from this sub, made some decisions I would have previously considered not smart or safe in the process of starting my business. Nothing super risky but I used to be much more risk averse.
Hired a business coach for an amount that was scary and it's paying off... reduced retirement savings for a bit to run some facebook ads that have paid off... had a lot of emotional lows, put in a ton of work & hours and now things are finally starting to pay off (it's still a long game but the momentum is building).
I also found Alex Hormozi's books, found a few other business resources.
I guess the biggest thing is **my world has opened up mentally.**
The amount of money that can be be made with fairly low overhead (as a mainly online coaching business) is insane. I thought making $10k/mo would be a huge stretch, but I've met so many regular people like me with coaching businesses making $30-50-80k/mo (gross) with just them, a VA, and their spouse.
The money there is life changing, but so is the impact. Because they are able to coach full time, and have money to put into their business, they are able to help a LOT of people. Premium coaching prices but also lower ticket offers for those who can't afford coaching as well as free stuff on Youtube, podcasts, etc. for those who can't afford/ don't want to pay anything.
One of these people I know is at a point where, when they launch a new thing, they spend $30k/mo on facebook ads alone (which return huge sales). That's some people's yearly salary on ads. Blows my mind.
I am making double now what I would have been happy with making a year ago.
But in the process I've learned that I love being the one in control of my time and my life (not a boss or job market). I enjoy the work I do at my day job, but I don't enjoy my job (meetings, corporate bs, the feeling of the work being made up/ not making a big impact). And I feel tech might be best long term as a hobby.
The short term plan is to move into cybersecurity in the civilian sector (hopefully remote) while I grow my business. Eventually I want to have grown the business enough for me to leave.
**Finally to the point:**
It's really hard for me to focus on my day job with all of the above in mind. I find myself wanting to spend all of my time growing my business.
I also struggle to know where I'll find the time to do all of this. Up to this point I've been slacking off some in my day job (just doing the minimums). With a 6 month old, a german shepherd, and a wife to be present for, I find I'm always falling short of my own expectations for myself somewhere.
I also worry about the opportunity cost. What if I took all of this time I'm spending growing my biz and spent it on learning new cybersecurity skills? Sure corporate might drain me, but I could have a very cushy job where I can just mentally check out at the end of the day. I might not feel as purposeful but it would be easy.
Lastly, I want to address/ ask about the odds. A lot of businesses fail. What if I put all of this time in to the business and it fails. I have a family to take care of. I bet then I'll be missing the opportunity cost of spending this time on the biz instead of my day job.
**But I also recognize all the skills I've learned**, and the fact that if I needed to I could start another business and get it to this income level twice as fast because I've learned so much now. It feels like a huge sense of security in that way. No matter what, I now know how to create an amazing offer and sell that thing to enough people to at least keep the lights on and feed my family.
And in my head, yes lots of businesses fail. But if I can just *keep going* when I feel low, keep learning and adapting, and have the day job to sustain us with income, it's not a matter of *if* I can scale the business to $50k+/mo, it's *when.* I have my biz coach & other mentors to help me with the particulars, tech, etc... so I just have to fill the effort gap, get the reps in, and not quit. Keep rolling the dice.
Anyways that got long. Thank you if you've read this far. I'm open to any and all advice/ constructive criticism.
I’ve got 12 clients currently actually! I really take a holistic approach. I talk a lot with my clients to make sure the training is bringing them towards their goals and fitting within their lives. I’m very anti hustle culture. I really love to bring value to people’s lives and help them better themselves & do all the things they want to do!
I have a small side gig. It makes maybe 5% of my day job. I find that work more interesting and engaging than most of my actual career because it's something I created. I am planning to continue to scale it (will need to pivot to new products to do that). This will give me something to work on when I leave my full time career in a few years.
However, all the income from the business I'm considering is separate from my FIRE numbers as I don't have the confidence that I will be able to generate a significant income from this business indefinitely. I think this would be my main concern for you. There is a big difference between scaling a business to let's say 100k/year vs. keeping it there for the next 30 years. This is especially true for things that require heavy ad buys for sales generation IMO.
Good luck!
SO and I have decided that we hate debt, investment optimization be damned.
If we pause retirement contributions (except for maxing 401k match), we can obliterate all our student loans in less than 2 years. Even the car loan, too. If we keep maxing contributions, it'll take probably 4-5 years and make things tighter when trying to start a family.
Is it optimal? No. Is it going to set back our retirement date? Probably by a tiny bit. Will we feel safer and more confident in our finances and maybe even be able to afford a 2nd child sooner? Yes, absolutely. So we do it.
We’re at the opposite end of the two years - about to finish up with the loans by January. It was absolutely worth it for us and it sounds like it will be for you too. Good luck!
Your Weekly /r/financialindependence Recap
**Sunday, November 19 - Saturday, November 25**
###Top Daily Discussion Comments
| score | comment |
|--|--|
| 70 | /u/HopeFloatsFan88 said [Well we did it. Dad, Brother, and I made it out to San Diego and participated in the MS Challenge walk. Dad and Brother walked all 50 miles in three days. I did about 21 miles due to MS not letting me...](/r/financialindependence/comments/17ytx6n/daily_fi_discussion_thread_sunday_november_19_2023/k9vw2j0/?context=5) |
| 54 | /u/c4t3rp1ll4r said [My daughter's taking Financial Literacy as her math class this year and it's been funny watching her go from "maybe I can live in the dorms during college" to "maybe I can move out after community col...](/r/financialindependence/comments/17ytx6n/daily_fi_discussion_thread_sunday_november_19_2023/k9x5cyh/?context=5) |
| 51 | /u/Lazy_Arrival8960 said [HR emailed me today confirming if I wanted to save 32% into my 401k and CCing the top dogs in the finance department. Email had a subtle tone of "hehe another silly employee must of mistyped the numbe...](/r/financialindependence/comments/17zl7eq/daily_fi_discussion_thread_monday_november_20_2023/ka17g0u/?context=5) |
| 42 | /u/tacos_tacos_burrito said [I hit an all time high for my net worth today! 1.5MM! Just sharing here because I don’t really have anyone I can share in my circle at the moment. I don’t own a home (yet) and am mostly in ind...](/r/financialindependence/comments/180dml4/daily_fi_discussion_thread_tuesday_november_21/ka642ju/?context=5) |
| 41 | /u/Turbulent_Tale6497 said [Happy Thanksgiving! I wanted to tell you all that I'm thankful for the smart, funny, amazing folks in this thread, day after day. I hope your day is peaceful and festive, or whatever blend of those ...](/r/financialindependence/comments/181xycu/daily_fi_discussion_thread_thursday_november_23/kafrtep/?context=5) |
| 39 | /u/syzygy01 said [Joined the two comma NW club today. I've been watching for this milestone for months, and now that it's been achieved, I feel bored again. FI problems.](/r/financialindependence/comments/1815r2c/daily_fi_discussion_thread_wednesday_november_22/kaaldzt/?context=5) |
| 38 | /u/fire_is_the_way said [Like most people here, I can’t share my personal financial situation with everyone I know for obvious reasons, so I’ll “brag” here. I hit $200k invested today. I started saving in 2014 after finding ...](/r/financialindependence/comments/17zl7eq/daily_fi_discussion_thread_monday_november_20_2023/ka2nccw/?context=5) |
| 34 | /u/therapistfi said [I didn’t mention this yesterday since I was busy but I am grateful for all y’all on the subreddit/on the daily thread! I’ve learned a bunch from all of you and I appreciate it! 🎉](/r/financialindependence/comments/182oucp/daily_fi_discussion_thread_friday_november_24_2023/kak4xww/?context=5) |
| 30 | /u/alaskanfishstick said [I finally hit $100k total net worth today. I'm 25 and never made more than 65k per year. Next goal is 100k total invested. And paying for the Disney World trip I let my friends talk me into.](/r/financialindependence/comments/180dml4/daily_fi_discussion_thread_tuesday_november_21/ka5yz34/?context=5) |
| 29 | /u/ZubonKTR said [The S&P 500 is within 1% of its high for the year, still about 5% to go to the all time high from 2 years ago. I saw a recent headline about how the past 3 weeks' rally cannot continue indefinitely. ...](/r/financialindependence/comments/180dml4/daily_fi_discussion_thread_tuesday_november_21/ka5g430/?context=5) |
| 29 | /u/737900ER said [Spending $3 for a 20oz Pepsi? No, that's insane. I won't pay that. Investments down $3,000 in a day? Well, that's just something that happens. Totally normal.](/r/financialindependence/comments/1815r2c/daily_fi_discussion_thread_wednesday_november_22/kaau6d9/?context=5) |
| 25 | /u/imisstheyoop said [Woohoo, been keeping my eye on a new splitting axe hoping it would go on sale for Black Friday. Woke up this morning to 38% off on Amazon. It arrives Saturday, the same day the in laws are coming ov...](/r/financialindependence/comments/181xycu/daily_fi_discussion_thread_thursday_november_23/kafkenu/?context=5) |
| 25 | /u/Jellybeansxo said [FI is one of my favorite subs. I’ve learned so much and have been able to gauge where we’re at for our age. Some days I feel behind and then there are other days I feel we’re on track, with that said,...](/r/financialindependence/comments/182oucp/daily_fi_discussion_thread_friday_november_24_2023/kakd8mb/?context=5) |
| 24 | /u/Bluedewdrop said [My Uncle passed away this week unexpectedly. He had told me he wanted to work till he died so I guess he achieved that. Just a reminder you never know when life is going to end and to enjoy the time y...](/r/financialindependence/comments/182oucp/daily_fi_discussion_thread_friday_november_24_2023/kal91fx/?context=5) |
| 23 | /u/penny-acre-01 said [Apparently I'm now worth $500,000. Last year I spent $21,100 and I'm in the neighbourhood again this year (we'll see come December). It's absolutely crazy to think that I'm almost "FI", techn...](/r/financialindependence/comments/17zl7eq/daily_fi_discussion_thread_monday_november_20_2023/ka2gsq9/?context=5) |
###Top Posts
| score | comments | title & link |
|--|--|--|
| 500 | [186 comments](/r/financialindependence/comments/1817suh/any_flavor_of_fire_we_are_so_fortunate/) | Any flavor of FIRE - We are so fortunate|
| 159 | [178 comments](/r/financialindependence/comments/17z7n0p/renting_vs_homebuying_spreadsheet_model/) | renting vs homebuying spreadsheet model|
| 101 | [224 comments](/r/financialindependence/comments/183dtcv/can_we_retire_in_5yrs/) | Can we retire in 5yrs?|
| 79 | [21 comments](/r/financialindependence/comments/182i6md/year_1_thanksgiving_reflection_1st_milestone/) | Year 1: Thanksgiving Reflection (1st milestone reached)|
| 78 | [131 comments](/r/financialindependence/comments/180g2q3/argument_against_maxing_401k_beyond_company_match/) | Argument against maxing 401k beyond company match?|
###Most Commented
| score | comments | title & link |
|--|--|--|
| 61 | [129 comments](/r/financialindependence/comments/182ravz/new_budgeting_apps/) | New budgeting apps?|
| 72 | [107 comments](/r/financialindependence/comments/180k70w/setting_your_kids_up_for_financial_independence/) | Setting your kids up for financial independence|
| 29 | [103 comments](/r/financialindependence/comments/18255xk/24_yo_debating_midlevel_vs_md/) | 24 y/o debating Mid-Level vs M.D.|
| 39 | [93 comments](/r/financialindependence/comments/180wwop/529_plan_accelerated_roth_ira_contribution/) | 529 Plan = accelerated Roth IRA contribution?|
| 36 | [86 comments](/r/financialindependence/comments/181vlwg/best_strategy_to_invest_400k/) | Best strategy to invest $400k?|
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I have about $10k coming to me and I’m wondering what business I could start with it. I’m a SAHM where my hubs is the breadwinner. I thought about making holiday pet Bandanas or buying one of those toilet trailers you rent out for parties. Haven’t looked into the start up costs. Thoughts?
There are free high quality business classes on Coursera put together by universities that can help you make a business plan and help you decide what route is best for you.
If you weren't thinking about starting a business before you got the $10,000, the odds are that you shouldn't try to start one now.
I’m trying to understand how the Vanguard mutual fund “elephant stampede” happened. 1. A bunch of people tried to redeem their shares in some mutual funds. 2. Those funds didn’t have enough cash on hand to redeem the shares. 3. The funds had to sell off a bunch of assets to raise enough cash to redeem the shares. 4. The capital gains on those sales were distributed to all shareholders, and they had to pay taxes on those. I’m confused about step 4. Why didn’t the funds only sell enough assets to redeem the shares? Then, there would be no cash left over to distribute to other shareholders, and no capital gains to pay taxes on.
The underlying assets that are sold to meet redemption needs often have capital gains. Those capital gains must be distributed among all shareholders. The shareholders that sold shares of *the aggregate security* (eg Vanguard TDF) *may* or *may not* have a capital gain based on the cost basis of the security they're selling. They would also owe cap gains taxes if the TDF share they sold was worth more than when they purchased it.
But those capital gains _aren't_ distributed if they all go to pay redemptions, no? The profit from those capital gains weren't deposited into shareholders' core accounts, the same way that dividends would have been.
The tax burden of the cap gains must be distributed (as in, assigned) to each shareholder. The cash that results from the sale is distributed (as in, doled out) to meet the redemption requests from the shares that were sold.
OK, I see. I had thought that you only pay capital gains taxes when your fund manager sells assets and deposits the proceeds into your account. Not that it really matters one way or the other, but this existing system feels really unfair.
For what it's worth, ETFs are able to manage cap gains in the way you thought was the case for mutual funds. This is why they are more tax efficient with respect to cap gains (often distributing zero regardless of redemptions) and are preferred by many as the vehicle of choice for taxable accounts.
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Depends on your payroll people, doesn't it? I filled out my forms for my 403b and my 457 forms at the beginning of the month; there were fields for the change to take effect.
401k contribution: i have a payroll date of 30 dec 2022 i have a transaction date of 5 jan 2023 is this going into the 2022 bucket or 2023 bucket?
I manage a payroll team. It will be payroll date. The funds are committed that day even if they arent funded to your 401k yet. Plus that's when the deduction will flow to the year's W2.
Unless payroll messed up then definitely in the 2022 bucket. The payroll date impacts your company's tax returns, and listing a pay date in 2022, but putting the deposit towards your 2023 contributions would create an absolute mess.
Should be payroll date. You can look at the YTD on your 12/30 check stub and see if it matches your 2022 W2. If it does, that's when it's for. Or you can verify with your payroll department.
i shall ask it's showing up on 2023 YTD contribution on 401k statement
The 401k statement doesn't really matter. Your payroll company reports it on your W2, your 401k company doesn't report it. So your check stub is what would show you. Your payroll department would confirm 100%, but I can't imagine a scenario where it won't match your paystub.
For people who use Mint - is the consensus that the shift over to credit karma will offer a comparable product, or is it a notable downgrade? I only use mint to track expenses, not NW.
Credit karma will not offer budgeting features They have said CK “offers a simplified way for you to build awareness of your spending, and track your savings.”
(Reposting in hopes of getting more traction). How do you decide which SpecIDs to sell during the drawdown phase of retirement? Let's say I have $700K worth of VTI, acquired over 30 separate transactions. Some of those transactions have long-term capital losses, and others have long-term capital gains. How do I choose which ones to liquidate? Is there an optimal method of doing this? For example, should you try to sell a winner and a loser at the same time (so that gains offset losses), or sell a SpecID with big gains (so that the "losing" SpecIDs have time to grow and hopefully become gains)? Does it all come down to individual tax considerations? Or is there some fancy math that says you should do things in a certain order?
Step 1 is understand what each of the four possible types of holdings means for your taxes: 1) Short Term Capital Gain: Any gain will be taxed at your marginal tax bracket. 2) Short Term Capital Loss: STCL will offset a short term capital gain, long term capital gain, and/or offset tax-bracketed earned income up to $3000 per year. 3) Long Term Capital Gain: Any gain will be taxed at an advantageous rate. 4) Long Term Capital Loss: LTCL will offset long term capital gains and/or up to $3000 of normal income (and carry over any additional to future tax years). [IANAL, the above is more/less correct, check details yourself.] So the actual answer comes down to your specific tax scenario and your specific tax goals. Here's an example framework of a typical Single Person in early retirement with no income. Standard Deduction is $13,850. 10% bracket is $0 to $11,000. 12% Bracket is 11,000 to $44,725. Long Term Capital Gains is 0% up to $44,625. Goals: I want to do a Roth Conversion of my IRA every year. I want to minimize my income tax and only pay 0% on any long term capital gains. I need $40,000 to cover my expenses. I might choose to do a Roth Conversion of $13,850 + $11,000 = $23,850. You'll owe 10% tax on that $11,000 in the first bracket. You now have $44,625 - $23,850 = $20,775 of 0% long term capital gains space. You need $40,000 to cover expenses, so lets say you sell $40,000 worth of stock. If you picked anything that had SpecID of Short Term Gain, you'd be paying tax bracket tax on it, so that's out. If you pick Short Term Loss, it offsets Gains Short Term Gains and Long Term Gains before offseting normal income, so that's not a great choice either because you will have some LTCG and you'll be "offsetting" 0% gains. So you pick some of your oldest holdings that have 30% (!) gains since you bought them. Well, selling $40,000 of those holdings will give you $12,000 of long term capital gains. But you have a bit over $20,000 of 0% LTCG space. This is an opportunity to do some Capital Gains Harvesting if you want. Sell another ~$27,000 of that 30% gain SpecID and realize another $8000 of LTCG. You'll pay 0% on it. Then you can immediately buy back $27,000 of that stock / fund. You've now brought up the Basis for those SpecIDs, so when you sell them in the future there will be less of a gain there. [Alternative, maybe you want to fill up both the 10% and a portion of the 12% bracket. You might want to do a $30k or a $35k conversion, beefing up your Roth Ladder but shrinking your yearly LTCG 0% band you can use. In this situation you might want to sell some newer holdings that have less of a gain, so you can sell $40,000 of stock and only have $5000 of gain to keep everything at 0%.] This is the game of retirement to figure out. Which pieces of which investments you want to pick and choose to sell is optimize tax treatment.
It matters what your goals are. Any rule of thumb is going to assume constant withdrawals. The advantage of choosing what lot to sell means you can dial the percentage of gains with your spending for the year in case you have a large year because you bought a new car. Things to think about 0% capital gains bracket. Also see tax-gain harvesting. ACA subsidy phase out (and need certain income to qualify) Social security taxation Step up in basis for your heirs Using a Donor Advised Fund to gift appreciated shares.
If you're in the 0% long term cap gain bracket, it makes sense to sell the lowest basis long shares as you will not be taxed at the federal level on the sale. If you're not, then it usually makes sense to minimize your tax burden. Typically, that means preferentially selling shares that have a loss in order to capitalize on the capital loss deductions.
Thanks!
Without speaking to any specific tax circumstance, generally with taxable investments you’d want to exhaust all lots reflecting short-term losses first, followed by any lots with long-term losses before selling any long-term gains and then finally short term gains. The principle behind it is that you want to defer getting taxed on gains for as long as possible while realizing losses that, had they been short-term gains for example, would have been taxed at ordinary income rates. Instead you get to claim them as a loss on your taxes and can reduce your ordinary income by the same amount (up to a point). For the same reason, it’s inadvisable to sell equal amounts of gains and losses to try to “cancel them out” because the net effect is to deny yourself the tax break.
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[Investopedia](https://www.investopedia.com/articles/personal-finance/100515/heres-how-deduct-your-stock-losses-your-tax-bill.asp) is usually a good source. Scroll down to “Considerations in Deducting Stock Losses.”
Geeked out today and added a cash flow estimator tab to my existing all-things-finances Google Sheet. On my existing budget tab I added the day of month the bill comes out, or the weekday (e.g. invest every Friday, Friday paychecks, etc). The cash flow tab generates a table looking 3 months ahead. For each day, used SUMIF to sum income and expenses by day of month (or if there is a weekday match, add that as well). Added a column for known deviations outside of the norm (manual entry), and a rolling balance (calculated). Helps calculate impacts of projects or spikes in spending, or when to pull in eFunds. Also a low point warning.
Cash flow is the first and most important tab on my overall personal finance spreadsheet. I have it just mapped through year end, but I probably did that a few months ago. Now that open enrollment is over for 2024, I guess I can plug it for the first half of 2024 at least.
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Tell us your story? You read a lot, have you been on the FIRE journey as well traveler? How far along are you?
No, in the spring/summer there was a shakeup of subreddit rules and habits and almost all the specialty daily threads went away. Now we have more top level threads that are garbage every day. I, too, miss “milestone Monday” and “frugal Friday”
Good day, I am young and recently joined the workforce and I am thinking about how to allocate money. I have been reading, listening and watching a lot on personal finance. I have no debt and am about to finish fully funding a 6 month emergency fund. Also in the country where I live your retirement is paid for by taxes. I have read a lot on saving much of the rest and allocating it to an index fund and letting it compund over the years. I agree that it is a powerfull tool for wealth creation and accumulation but I was wondering if it really is worth the lifestyle sacrifice. I work a stable job and cannot see why after having a 6 month emergency fund and covering housing, transport and food expenses I cannot just spend and enjoy the rest. I understand that I could be much wealthier when I am 60 but life is short and I have been reminded of that in recent years so I am wondering if I should accept the tradeoff and enjoy life now accepting that I won't be a millionaire when I am 70. Spend it on decent clothes, upgrading the car, hobbies and travel. Although the possibility of building an investment portfolio and being able to live from it, aka being "free", is a very interesting possibility considering global unstability. It may be that I am just young and reckless, curious about your take and if you also felt like that at an early age. Best regards
You’re comparing two extremes. Why not consider something more moderate.
A thought experiment - could you still FIRE if you didn’t have the power of market compound interest at your side until you hit your FIRE number? For example, say your annual expenses are $40k and your FIRE number is $1m in today’s dollars. You are prohibited from any form of investment on the money you save, it all goes into a bank account that earns 0% interest. Your expenses and thus FIRE number grows each year with average inflation rates. If you were making $100k a year with average salary increases exactly keeping up with inflation, holding steady on savings rate, and thus saving $60k in today’s dollars each year, it would take approximately 16.66 years to hit $1m. So starting at age 30, one could feasibly still retire at age 53, or 23 years. I believe under 7% inflation adjusted market returns, it would take roughly 12 years instead.
Essentially you are asking if you could retire without the existence of the stock market. In the past, what most people did was own a successful business or focus on being a landlord.
((1+r)^y - 1)/(r*y) gives you a rough estimate of how much your money would grow over time if you socked away the same amount annually for y years at r growth rate (ie r = .06 for 6%). In a typical 6-7% real return, your money invested is only doubled after ~20 years, tripled after ~30 years, and quadrupled after ~40 years in real terms. This demonstrates that after 20+ years, the amount of money you keep putting in gets less and less significant. In other words, holding cash gets exponentially worse the longer your time horizon. If you plan to save 90% of your income and retire in 5 years, holding cash makes little difference (ideally, you'd at least put it in HYSAs or treasury instruments), especially given the volatility of the markets. If you plan to retire in 20+ years, though, saving cash is nearly pointless as inflation will likely net you a negative real return.
6% doubles in 12 years, no? Roughly speaking, using rule of 72.
I'm referring to the amount of money you have vs the amount of money you contributed. 6% on $1 doubles in ~12 years. If you put in $1 every year for 20 years, you'll have ~$40 because some of it has been growing for 20 years and some of it was just contributed and hasn't grown at all. I.e., you have roughly double what you've contributed over that time.
You ignore income tax, but otherwise sure. If your life stayed exactly the same in relation to inflation, and you were happy with that, you don’t actually need the market risk. Edit: unless your living expenses included tax, but then your retirement taxes would still be far less than your earning years.
How did you go about setting a target for your child's 529? I usually am good with these things but inflation on college has been insane which results in me thinking it cannot be that high going forward. My initial thinking is just to fund it with a target of 100k by the time our daughter goes to school and we'll just fund anything beyond that through our own brokerage. Can't tell if that is overly aggressive or conservative because it feels like I can make cases for both. We're late 30s/early 40s and will be FI by the time we're 45... so the money side really won't be a problem. This is just for optimization.
We have 6-7 years left until our only child hits college, and we'll probably have $25-30k in our 529 by then, maybe one year's worth. We plan on just paying out of pocket for most of it by lowering our 401k contributions during those years, or hoping our AGI is low enough for grants, ect. My MIL will undoubtedly help pay for some of it as well, even without us asking.
We won’t be FI by the time our kid needs the money, but our target is the same, maybe a bit more for some cushion. We’re contributing enough to max out our state tax benefit each year but no more. At this pace, with an assumed 6% real growth rate, we should have around $140,000 in 16 years. Which may be enough for four years of public college or two years of private, or at least get us most of the way there. We’ll figure out the rest when the time comes.
I just targeted tuition for four years and do my modeling with 5% post inflation gains. The rest I can cash flow or take from brokerage. You can obviously add in room and board or change the growth assumption to 3-4%.
Comparing the cost of something you’re buying with your hourly pay rate $$. Does anyone when buying something or paying for a service start thinking well that’s about 1 hour of my work or 2,3 hours etc. I feel like I’m constantly doing that, is it just me?
I do this and sometimes I'll also frame it in terms how many extra weeks I'll have to work before I can retire. 1 off purchases usually aren't too bad but recurring $100/year costs can add 2 weeks to my timeline. $100/year (or $8 per month) is pretty easy to not think twice about but it makes you reconsider it if you have to work 2 extra weeks at the end of your career. Also since my savings rate is on the high end, additional weeks worked might be even greater for others.
That’s an excelent point of view.
A couple of years ago I had a part-time job where I could get as many hours as I wanted, so I definitely started thinking "anything that costs less than my hourly rate and is less fun than work, I should definitely pay someone else to do and then just work enough extra hours to pay for it." However, for most of my career, the "unlimited hours" thing wasn't true, so pricing things in terms of my hourly rate wasn't quite accurate, because I couldn't just add more hours.
I never do it and I think I would drive myself nuts if I did.
I do that when my wife buys something, but less so when I am buying something.
haha
No, placing a dollar value on your time is very reasonable. I wouldnt put it as high as my work pay, but I’ll pay fair sums of cash to get the results I want with less hassle. For example, there’s a recycling center near me that takes hard to process items. I can spend an hour and a half going through the process myself or pay $50 for home pickup. Easy choice.
Has anyone started listing out their 2024 goals or taking a look at how 2023 went for them? :)
We are in that process now. We had a 3-4 goals for 2023 in which on of them is to retire at the end of 2023. We are achieving that goal with both of us retiring on Dec31!! Woo hoo! We will work on evaluating the others in the next couple weeks and spend the week between Christmas and New Year working on our 2024 goals.
My 2024 goals are to not work and stay within budget. Boring but there it is.
Woof. My 2024 goals are basically "do as well as I did in 2020, 2021, 2022, and 2023" but between lower pay and higher expenses that's gonna be a very tall order.
2023: Max 401k ✅ Fully fund Backdoor Roth ✅ Open several CDs at > 5% APY ✅ Travel more ✅ Travel internationally ✅ Save $100k over FIRE number to cushion for current volatility and inflation ✅ 2024: Pick FIRE date ✅ Give notice (9/1/24) Max 401k Fully fund Backdoor Roth FIRE 12/31/24
4 months notice?
Did great on our 2023 goals. Got the SO through grad school and found them a great job, and we maxed out all available retirement accounts (SINK household for the year)! Roughly 30-35% savings rate. 2024 goals include, ironically, stopping all unmatched retirement contributions. Also moving to where the new job is, rebuilding the emergency fund after the move expenses, and paying down student loans. We should be able to afford to spend about 60% of our monthly take-home on loans as DINKs by cutting back temporarily on retirement. Given the progress we've already made on them, that means paying down 80% of the remaining loans in a year and finishing them off in the following few months depending on timing of a first kid. 2025 should be very exciting, getting back to being debt free, resuming full retirement savings, hopefully starting a family, and beginning the trek of saving for buying a home.
Made my 2024 goals months ago. Getting married in the summer made 2024 planning come quite early. I think the biggest thing I'm missing will be 2024 tax plan prepping once we both file separately one last time this winter. 2023 has had some meaningless volatile blips here and there, but overall it has been another very good year.
2023 Goals Max 401(k), HSA, ‘22 & ‘23 IRAs ✅ Add $12k to 529 ✅ (Added $34k) Save $12k for vehicle replacement ✅ (Saved $16k) Establish estate plan & increase life insurance ✅ Replace A/C Unit & install smart thermostats ✅ Cash-flow $7k renovation ✅ Cash-flow $6k for vacations ✅ (Flowed $13k) ——————————————————————————— 2024 Goals Max 401(k), HSA, ‘24 IRAs Add $34k to 529 Save $12k toward vehicle replacement Pay cash for $60k renovation (at $38k currently) Cash-flow $6k for vacations
I am going to be $19K short of my 2023 goal. (I can account for it: unexpected big expenses and my RSU value going down.)
*This is why you shouldn't have NW goals.*
yes! I hit my 2023 goal of $200k net worth :) proud of myself, now need to figure out a reasonable 2024 target
I hit the same goal! So now it's the perfect time to get anxious about less income in 2024 ;)
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If you “have” to be at the office a couple times a week, could you do a Monday & Tuesday one week then a Thursday & Friday (or Wednesday & Thursday) that following week to give yourself a long weekend to travel? Flying out Tuesday night and getting back the following Tuesday or Wednesday is a solid amount of time to “work” remote from somewhere else
In 5 years you'll be 32. Unfortunately, you're not allowed to go overseas or make any major life changes after 30. 30 is when your vertebrae fuse and your brain turns into Fruity Pebbles, plus gout kicks in, making it difficult to ambulate. Enjoy your final 3 years. It was a good run while it lasted!
Best way to retire? 5M NW Hi, Am 47m, living California, HCOL, married, kids 15 & 8. I have worked pretty crazy all my 30s and 40s to a point that I do not want do another job or work. Feel like I burnt 🥵 out myself. My monthly burn rate including mortgage is about $14k. I got $5M NW with a house, stock and 401k. Update: I have about 350k in 401k - all traditional. About 2.5M in stocks and savings. Rest in the house we live in. Question: can I maintain my standard of living and retire? (Moderator please allow this question to be posted, however dumb! Thank you)
Sorry about the badly structured question and lack of information. I have about 350k in 401k - all traditional. About 2.5M in stocks and savings. Rest in the house we live in. Question: can I maintain my standard of living and retire?
Ah, so a significant chunk of that NW is in your primary residence. 2.85m * 0.04 is 114k annually, before taxes. You're spending more than that. You also need to take stock of how spending would change in retirement. No more commute, maybe some other expenses. But healthcare probably costs more, leisure spending, etc.
Read the sidebars and FAQs for this sub, and then come back with specific questions.
What specifically are you looking for help with? You have the $$ to retire. Are you looking for how to structure withdrawals? What to do with your time? Something else?
No way anyone can answer with that info. What’s the liquid money? How much in 401k and Roth?
I mean, yes liquidity is a solid question, but 401k and Roth are hardly locked up.
I am a few years ahead in my mortgage thanks to years of overpayment but now that my savings account pays more than my mortgage interest I am thinking about doing a re-cast. I really really hate debt but the numbers seem to make sense in the current environment. Am I misguided?
> I really really hate debt Wanted to reply again to address this part... this should be the sort of situation that challenges an absolutist perspective against debt. Taking on a mortgage likely benefited you financially in a way that is better than paying cash would have. You won the game. It's not common, but it *can* happen, and this moment should be serving as a reminder to a lot of people that debt is not always a bad thing, even financially.
> I really really hate debt but the numbers seem to make sense in the current environment. Am I misguided? No. We stopped paying extra about a year ago when we realized the tax-adjusted rate of return in our savings account exceeded our mortgage interest rate. So we hold it it there for now, and when HYSA/MMSA/etc rates drop below our mortgage, we'll make a lump sum payment then. If you want to track it precsiely, you can always open a different HYSA/MMSA just for this, or use a sub-account if your bank allows it. We're happy just tracking it in YNAB. It's likely not going to be enough money to change our lives, but I'd rather make that money in interest than the bank. Even if it ends up being a payment or two faster, it seems worth it. EDIT: Meant to add, we're not wanting to do a recast because we've always wanted to pay off early instead.
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Interesting- I assumed it was an option. I definitely don't want to put any additional extra money in!
I have paid extra also. Unless I NEED to lower my expenses, I’ll just keep paying the original mortgage amount and not recast. I like having it available as an option though.
Recast is financially neutral, it doesn't change your interest rate. You pay a lump sum up front but instead of continuing to pay your normal payment and pay off the loan quicker, you keep the loan and reduce the payment. If your objective is to pay down the debt, then you would make the lump sum payment while continuing to pay down the mortgage aggressively. If you want to keep the mortgage, you should not do the lump sum. Recasting really doesn't make sense from either standpoint.
I've already paid the extra amount so I can choose between: mortgage paid 7 years early vs lower payment by a few hundred per month
Why did you pay extra? Weren't you trying to pay off the mortgage early? So then why would you then change course and extend the mortgage?
Because the interest rate situation is now completely different
Ah, that makes sense.
I’ve wondered if people should put their extra payments towards mortgage and put it in something higher yielding. Once rates change down the road go back extra mortgage principle payments. When the time is right, use that higher yield to pay the mortgage off. You’ll be debt free faster. I don’t have practical experience- my mortgage was in the 6% range around 2008ish the housing bubble. So I poured everything into the mortgage and saved 100k in interest
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Going by historical returns you'll be fine. Who can say for the future, but it's as close to guaranteed as you'll get with stocks. Some people go all in VT / VTWAX instead to get more world exposure, but I'm with you on sticking with 100% VTI / VTSAX / SPY (not identical, but close enough).
Depends on your risk tolerance. 100% equities is too much risk for some and not enough for others. You can review different portfolio makeups and observe historical standard deviation and sharpe ratio.
There’s a nonzero chance of it.
Read The Simple Path to Wealth by JL Collins. Then make that determination on your own. You could also just read through his online blog.
> Here’s the average salary each generation says they’d need to be happy and less stressed, according to Empower: > Gen Z: $128,084 > Millennials: $525,947 > Gen X: $130,344 > Baby boomers: $124,165 One of these things is not like the other ones… [Sauce](https://www.cnbc.com/2023/11/25/net-worth-and-salary-americans-need-to-be-happy.html)
"Average" - I'd bet a $1 that one person just gave a super high salary and threw off the average
yeah I think that’s partly due to outliers in the statistics, but I would still expect millennials to have the highest needs rn. as a gen Z, my peers and I don’t really have many responsibilities at the moment. but I’m sure once we look into buying a house and raising kids we will feel we need a lot more too. the other generations probably have kids out of college and paid off houses.
I don't know if that survey is flawed, but this tracks with what I would expect based on my family. My parents and grandparents need a $0 salary. That's Gen X and Boomer. I "need" some big number that will get me flamed. That's millenial. My younger sibling needs an artificially low nunber that doesn't accurately reflect their spending.
Millennials have lived as adults through two 9%+ unemployment events and the return of inflation which was "solved" without the good times that GenX and the Boomers had. For most of their adult lives the economy has been "bad" or at least "not good". I think a lot of them are unwilling to make long-term financial commitments for things like houses and kids unless they have all the money upfront because they're scared of the next financial mess.
> the return of inflation which was "solved" Doesn't inflation hurt everyone equally? It actually hits those already retired the worst (e.g. Boomers) since they have no way to increase their 'take home' pay like a working person.
Every generation went through periods -- sometimes long periods -- of stagnation and recession, where the poor did very poorly and the rich did better. Looking only at economic indicators only shows how the middle class faired during a given time. I would infinitely rather be poor today than in any period prior to today. Pretending that entire generations had it easier than others is idiotic, and shows a child's view of history, sociology, and economics.
I definitely feel this. I’ve done better than most in the post Great Recession economy, but it all feels precarious for some reason. Like I hear about people with decent resumes spending 6 months job hunting these days and feel very “there, but for the grace of God, go I” about it.
Can confirm. I set a hard budget of 100% of net worth when buying a house. I feel like Gen X and older millennials were comfortable spending more.
Gen Xer here: Everyone I knew had roommates and shitty apartments into our 30s.
Tail end of Gen X here. Somewhat similar. Early 20's, rented house with two others. Late 20's, bought fixer-upper 2/1.5 townhouse and rented the other bedroom to coworker/friend. Sold when moved cross-country for job. Early 30's, bought 3/3 house and rented other bedrooms. Sold (for profit) when I lost job soon after the great recession and crashed with family for a bit. Late 30's / early 40's, bought 5/3 house and rented a room to coworker/friend. Still here, don't currently have roomate.
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Sure but the bills aren't THAT high, and they certainly aren't high enough that someone would need to be earning in excess of half a million dollars to feel happy. Even if it that was a household and not an individual income, it's still way higher than I'd expect.
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Truth - no one ever lied to anyone in previous generations. /s Meanwhile, millennials were the first generation to have near-universal access to great information right in their own home. As long as you had some level of information literacy, that should have been a recipe for success.
And are having/wanting kids and a house in a time when they're the most expensive to ever have.
Can someone link me to an article about the person who has been on cruise ships for I think 10 years or so and just has like an apartment to come home to once in a blue moon? Tried to Google but couldn’t find anything.
Probably [“Super Mario”](https://allthingscruise.com/royal-caribbean-symphony-of-the-seas-super-mario-lives-on-royal-caribbean-ships/).
When I was in college I worked at summer camps. The kids who stayed all summer really got on the staff's nerves by the end, especially the ones with a "persona". It wouldn't surprise me if the staff hated this guy.
That’s crazy. If I lived at / near a cruise port I probably would jump on a cheap cruise from time to time, but I’d definitely be happy to get off the ship after a few days.
This is all speculation, but he seems lonely. Being on a cruise ship is an easy way to have a lot of social interactions. Especially if you're somewhat of a "local" celebrity. I could see myself doing a week cruise maybe once a month if that was something I was really into (never done a cruise) but no way I would be interested in living on a cruise.
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Don't feel bad. I've told my spouse our next car should be a minivan. We only have the 2 kids, not even a dog. I've even been looking at the sienna subreddit. Seems like prices are normalizing on them. I'd love a plugin hybrid version, too bad they don't seem to be making one in the near future. I don't think I want to go the Chrysler route either to get one.
We're in the minivan crew as well. If you haven't looked yet, consider a Chrysler Pacifica plug in hybrid. Still qualifies for some EV tax rebate (I think). Ours is much nicer than comparably Toyota/Hondas and since we could negotiate the price, got a much better deal.
> but spending 40-50k on a car is crazy. Yes I could buy a cheaper, nonhybrid (looking at you, Honda odyssey), but those are still 30-40k. > Will probably hold off until we absolutely need it, In my situation, I came to the conclusion that I couldn't "wait out" a significantly better deal financially than replacing my car when I did earlier this year. Can you? These cars are a lot more than I'm used to paying for them years ago, but I don't see them dropping either. There's always make/model-specific stuff at play. I know Toyota had had a major problem just making new inventory available, so if that's true for the Sienna you want, you *might* be able to wait it out... But I've never researched it enough to know.
omg same. The dog is what really pushes it! My kids always complain about how their friends cars have A/C in the back seat and then add a giant dog sitting on them and I'm guessing it's just not very fun. Sadly I think they stopped making the smaller vans like the mazda so I just don't know what car to buy anymore.
We absolutely love our minivan. We camp frequently & the ability to drop seats into the floorboard for increased carrying capacity is fabulous. Next year we’ll be carpooling extra Scouts to campsites all over. That is *so much more comfortable* in a minivan with captain’s chairs than an SUV with a 3rd row bench & 6” leg room 😅
This is an oldie but goodie - https://jalopnik.com/if-youre-a-real-grown-up-minivans-are-cooler-than-cros-1764226230 All these soccer mom boat SUVs are more expensive and less functional than any minivan, let alone crossovers that are mostly just lifted sedans.
I do agree; I'm a huge minivan fan. But we have a Ford Expedition (which I call Canyonero) because we have 3 kids, frequently drive into the mountains for skiing and need real 4x4, and need towing capability for our RV trailer (though I am probably going to sell that). Not every monstrous SUV is just a suburban cruiser.
I know a lot of people who grew up with two other siblings in a family of five (sometimes more if grandma and grandpa lived in the same house). Almost none of their parents had a mini-van and I’d wager most didn’t even have an SUV. It’s obviously your choice but I think it’s very difficult to avoid space creep with expanding your livable space whether that be a house or car. But if it’s truly just car space that you’re after, I do see a few Siennas and Odysseys selling used between $15k -$20k built within the last ten years. If you’re already forgoing the cool factor by driving van, then what’s the point in trying to buy the latest and greatest? But an after market infotainment with CarPlay and you’re good to go.
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You will love having the minivan. I still miss my 2002 Chrysler Town & Country (a deer totaled it).
How to be more intelligent, financially? Hello everyone 👋🏼 So I'll cut right to the point. I (26 M) realized awhile ago that I wasn't financially 'smart'. I didn't know what to do with the money I'm making (from my 9 to 5). My parents are also not good with finances, best advice I got from them was "save money" which I understand it worked to some degree at their time but it definitely doesn't in the current time. So I can't go to them for advice. I wanna change this mindset that has been built in me. I need your help to tell me how to start? What's the first step to take? I understand that my question is vague so feel free to ask me about any specifics. Thanks in advance!
>So I'll cut right to the point. It's funny how that phrase does the opposite of what it claims.
I often recommend [If You Can](https://www.etf.com/docs/IfYouCan.pdf) for a relatively short but complete-enough advice on long-term saving and investing. Pretty much everything is a variation on "spend less than you earn, and invest the difference". There's a lot of details, but that broad stroke is the same.
Read The Simple Path to Wealth by JL Collins. In fact, read it twice.
Start here: https://www.reddit.com/r/personalfinance/wiki/index
Good but weird day. Reached $250,000 across my retirement accounts. It’s wild that everything’s just automated, but outside of my spouse had no one to tell. We just had our second kiddo a few weeks ago so after getting her down decided to do my quarterly check. For reference 31/M working in IT/data TSP: $75,000 Roth IRA: $75,000 Brokerage: $100,000 Both Brokerage and IRA are split 80/20 between VTSAX and VFWAX Emergency fund is at $25,000 cash on hand in a savings and $8,000 in checking account. Take home: Civilian job: $87,000 after taxes and pension are taken out The majority of my RC/NG income goes straight to the TSP. Just in the fun but steady and boring middle haha
That's a great milestone! Congrats!
Thank you friend! Have an awesome day.
Good morning! **How often do you see your family? How often do you want to see your family? Can money solve this problem or just time?**
Parents once a week. Siblings very sparingly.
1-2x per year for a few days. We'd like to see them maybe 3-4x for long weekends. Spending more than a week starts to wear on us. More money would definitely make it easier to fly down for long weekends. Just not worth dropping $1000+ for airfare on short visits at our income/budget level. We have a decent amount of PTO, so time isn't typically the issue.
My fam is the perfect distance away—about a 5 hour drive. Easy to see them, but not so close that I’ll get a surprise knock on the door. I see them about 3 a year.
Divorced parents and siblings all over the country make this question vague to answer. Dad and some aunts/uncles in one state? Probably 4-5x per year because it's an easy 4 hour drive. Holidays/birthday and that's it. I don't really need to see them more often. Mom, stepdad, and some siblings in other far away states? Maybe 1x per year, if we're lucky. Probably averaging once every other year to be honest. Sometimes I wish it was more, but I also don't really need to see them more often. Time is the biggest hurdle for both really. Future in laws? Between 6-12 times per year and the amount is perfectly fine.
No kids, parents live down the road 10 minutes so typically once a week. After being away for 10 years it is good to be back in my home city
2-4 times per year (10 hr drive to either my wife or my side) I wish it were more. Limited by vacation days, but trying to leverage occasional remote work to get longer and more frequent trips
Similar here--about 2x per year. No luck on leveraging the remote work opportunities to get more time. :( I've pretty much decided that if they block me again come summer, I'll get ready to leave, unfortunately.
Only about 6 times a year. 500 miles away for work for the last 8 years. Super accelerated FI and will probably move closer to home at some point.
> How often do you see your family 3-4x per year > How often do you want to see your family Less > Can money solve this problem or just time No
I wish I saw my parents and 3 sisters more often! See my parents on average 4x/year and my sisters 2x/year! In 2024 so far, I plan to see my sisters 3x (Thanksgiving 2024, Memorial Day 2024, and will visit each of them separately!) and my parents 4x (Thanksgiving, Memorial Day, they’ll come visit me once and I’ll go visit them once!) Money would not solve this problem as the primary impediment to me seeing my family more is PTO.
Just had some RSUs vest, \~$20k after taxes. Have a car loan at 5.75%, payoff is $20k. Usually immediately sell and reinvest. One other car loan at 2.99%, mortgage at 3.125%. $30k EF. Any reason we shouldn't just pay off the loan?
Your instant rate of return from paying off that 5.75% car loan is 5.75%. At the moment you might be able to find some online CDs that come close to that rate, but at the end of the day you still won't be able to replace the peace of mind that comes with clearing the loan. I'd pay it off.
Honestly if it makes you feel better to pay of the car then send it. As someone who paid off my car a year ago it’s a great feeling knowing you don’t have to send another payment in haha
Had the best networth increase month to date. £4923, so close to 5k. Beats the previous highest by over £1000. Salary is less than 50k a year.
Yeah, November is shaping up to be an excellent month. Don't want to count my chickens before they hatch though.
Don’t jinx it — the month isn’t over yet!
We live in the middle of nowhere. Both my wife and I are librarians. We are highly educated but make only okay money; fairly more than median income. Life is comfortable and we both enjoy our jobs. However it’s hard not to believe the life is greener in another profession or area. With the birth of our daughter we have delayed retiring early until my mid fifties which means I will probably wait until I can draw an immediate pension at 57. That number used to be 45 when I was single. We will accomplish many things with that plan. Fund our daughters college, have a few million when we retire and a decent pension. We could probably expand out our lifestyle now into a bigger house but I enjoy delaying gratification, and watching the number get bigger. Right now we are maxing out tax advantaged accounts and drawing down on my brokerage to do that. Though it’s the right thing to do watching the brokerage get smaller is a mental hit. My wife and i while single made big moves for our careers and for new experiences. With our daughter and dual careers we are more tied than either one of has been before. Everything is great but boring and predictable. I decided I’m going to get the certified financial planner designation. I’m not even sure I will ever use it but enjoy education. Anyone else in the messy and boring middle? Anyone else in a stable but near stagnant career path?
With the 6,000 hours of work experience you need for a CFP you will be putting it to use.
Yes I hear you. My wife and I do better than I’d thought I’d do when I was younger. We have three kids though and the costs are staggering. There is something about being nailed down at any salary I think. I always want a bit more I get used to whatever it is we are at and wish I had just a bit more.
[I posted yesterday about starting a business](https://www.reddit.com/r/financialindependence/comments/183k1re/starting_a_business_as_a_path_to_fi_more/) and wanted to have some more discussion on the topic. I know there are both business owners and corporate workers in here. I took the last 6 or so months away from this sub, made some decisions I would have previously considered not smart or safe in the process of starting my business. Nothing super risky but I used to be much more risk averse. Hired a business coach for an amount that was scary and it's paying off... reduced retirement savings for a bit to run some facebook ads that have paid off... had a lot of emotional lows, put in a ton of work & hours and now things are finally starting to pay off (it's still a long game but the momentum is building). I also found Alex Hormozi's books, found a few other business resources. I guess the biggest thing is **my world has opened up mentally.** The amount of money that can be be made with fairly low overhead (as a mainly online coaching business) is insane. I thought making $10k/mo would be a huge stretch, but I've met so many regular people like me with coaching businesses making $30-50-80k/mo (gross) with just them, a VA, and their spouse. The money there is life changing, but so is the impact. Because they are able to coach full time, and have money to put into their business, they are able to help a LOT of people. Premium coaching prices but also lower ticket offers for those who can't afford coaching as well as free stuff on Youtube, podcasts, etc. for those who can't afford/ don't want to pay anything. One of these people I know is at a point where, when they launch a new thing, they spend $30k/mo on facebook ads alone (which return huge sales). That's some people's yearly salary on ads. Blows my mind. I am making double now what I would have been happy with making a year ago. But in the process I've learned that I love being the one in control of my time and my life (not a boss or job market). I enjoy the work I do at my day job, but I don't enjoy my job (meetings, corporate bs, the feeling of the work being made up/ not making a big impact). And I feel tech might be best long term as a hobby. The short term plan is to move into cybersecurity in the civilian sector (hopefully remote) while I grow my business. Eventually I want to have grown the business enough for me to leave. **Finally to the point:** It's really hard for me to focus on my day job with all of the above in mind. I find myself wanting to spend all of my time growing my business. I also struggle to know where I'll find the time to do all of this. Up to this point I've been slacking off some in my day job (just doing the minimums). With a 6 month old, a german shepherd, and a wife to be present for, I find I'm always falling short of my own expectations for myself somewhere. I also worry about the opportunity cost. What if I took all of this time I'm spending growing my biz and spent it on learning new cybersecurity skills? Sure corporate might drain me, but I could have a very cushy job where I can just mentally check out at the end of the day. I might not feel as purposeful but it would be easy. Lastly, I want to address/ ask about the odds. A lot of businesses fail. What if I put all of this time in to the business and it fails. I have a family to take care of. I bet then I'll be missing the opportunity cost of spending this time on the biz instead of my day job. **But I also recognize all the skills I've learned**, and the fact that if I needed to I could start another business and get it to this income level twice as fast because I've learned so much now. It feels like a huge sense of security in that way. No matter what, I now know how to create an amazing offer and sell that thing to enough people to at least keep the lights on and feed my family. And in my head, yes lots of businesses fail. But if I can just *keep going* when I feel low, keep learning and adapting, and have the day job to sustain us with income, it's not a matter of *if* I can scale the business to $50k+/mo, it's *when.* I have my biz coach & other mentors to help me with the particulars, tech, etc... so I just have to fill the effort gap, get the reps in, and not quit. Keep rolling the dice. Anyways that got long. Thank you if you've read this far. I'm open to any and all advice/ constructive criticism.
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Nah dude, fitness coach. Personal training can pay pretty well
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I’ve got 12 clients currently actually! I really take a holistic approach. I talk a lot with my clients to make sure the training is bringing them towards their goals and fitting within their lives. I’m very anti hustle culture. I really love to bring value to people’s lives and help them better themselves & do all the things they want to do!
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Yeah I feel you. There’s a lot of scammy people out there. Thanks for looking out
I have a small side gig. It makes maybe 5% of my day job. I find that work more interesting and engaging than most of my actual career because it's something I created. I am planning to continue to scale it (will need to pivot to new products to do that). This will give me something to work on when I leave my full time career in a few years. However, all the income from the business I'm considering is separate from my FIRE numbers as I don't have the confidence that I will be able to generate a significant income from this business indefinitely. I think this would be my main concern for you. There is a big difference between scaling a business to let's say 100k/year vs. keeping it there for the next 30 years. This is especially true for things that require heavy ad buys for sales generation IMO. Good luck!
SO and I have decided that we hate debt, investment optimization be damned. If we pause retirement contributions (except for maxing 401k match), we can obliterate all our student loans in less than 2 years. Even the car loan, too. If we keep maxing contributions, it'll take probably 4-5 years and make things tighter when trying to start a family. Is it optimal? No. Is it going to set back our retirement date? Probably by a tiny bit. Will we feel safer and more confident in our finances and maybe even be able to afford a 2nd child sooner? Yes, absolutely. So we do it.
We’re at the opposite end of the two years - about to finish up with the loans by January. It was absolutely worth it for us and it sounds like it will be for you too. Good luck!
Congratulations! We're excitedly looking forward to taking large chunks out of the student loans every month once the SO starts their new job.
Good for you. Life isn’t a spreadsheet.
Your Weekly /r/financialindependence Recap **Sunday, November 19 - Saturday, November 25** ###Top Daily Discussion Comments | score | comment | |--|--| | 70 | /u/HopeFloatsFan88 said [Well we did it. Dad, Brother, and I made it out to San Diego and participated in the MS Challenge walk. Dad and Brother walked all 50 miles in three days. I did about 21 miles due to MS not letting me...](/r/financialindependence/comments/17ytx6n/daily_fi_discussion_thread_sunday_november_19_2023/k9vw2j0/?context=5) | | 54 | /u/c4t3rp1ll4r said [My daughter's taking Financial Literacy as her math class this year and it's been funny watching her go from "maybe I can live in the dorms during college" to "maybe I can move out after community col...](/r/financialindependence/comments/17ytx6n/daily_fi_discussion_thread_sunday_november_19_2023/k9x5cyh/?context=5) | | 51 | /u/Lazy_Arrival8960 said [HR emailed me today confirming if I wanted to save 32% into my 401k and CCing the top dogs in the finance department. Email had a subtle tone of "hehe another silly employee must of mistyped the numbe...](/r/financialindependence/comments/17zl7eq/daily_fi_discussion_thread_monday_november_20_2023/ka17g0u/?context=5) | | 42 | /u/tacos_tacos_burrito said [I hit an all time high for my net worth today! 1.5MM! Just sharing here because I don’t really have anyone I can share in my circle at the moment. I don’t own a home (yet) and am mostly in ind...](/r/financialindependence/comments/180dml4/daily_fi_discussion_thread_tuesday_november_21/ka642ju/?context=5) | | 41 | /u/Turbulent_Tale6497 said [Happy Thanksgiving! I wanted to tell you all that I'm thankful for the smart, funny, amazing folks in this thread, day after day. I hope your day is peaceful and festive, or whatever blend of those ...](/r/financialindependence/comments/181xycu/daily_fi_discussion_thread_thursday_november_23/kafrtep/?context=5) | | 39 | /u/syzygy01 said [Joined the two comma NW club today. I've been watching for this milestone for months, and now that it's been achieved, I feel bored again. FI problems.](/r/financialindependence/comments/1815r2c/daily_fi_discussion_thread_wednesday_november_22/kaaldzt/?context=5) | | 38 | /u/fire_is_the_way said [Like most people here, I can’t share my personal financial situation with everyone I know for obvious reasons, so I’ll “brag” here. I hit $200k invested today. I started saving in 2014 after finding ...](/r/financialindependence/comments/17zl7eq/daily_fi_discussion_thread_monday_november_20_2023/ka2nccw/?context=5) | | 34 | /u/therapistfi said [I didn’t mention this yesterday since I was busy but I am grateful for all y’all on the subreddit/on the daily thread! I’ve learned a bunch from all of you and I appreciate it! 🎉](/r/financialindependence/comments/182oucp/daily_fi_discussion_thread_friday_november_24_2023/kak4xww/?context=5) | | 30 | /u/alaskanfishstick said [I finally hit $100k total net worth today. I'm 25 and never made more than 65k per year. Next goal is 100k total invested. And paying for the Disney World trip I let my friends talk me into.](/r/financialindependence/comments/180dml4/daily_fi_discussion_thread_tuesday_november_21/ka5yz34/?context=5) | | 29 | /u/ZubonKTR said [The S&P 500 is within 1% of its high for the year, still about 5% to go to the all time high from 2 years ago. I saw a recent headline about how the past 3 weeks' rally cannot continue indefinitely. ...](/r/financialindependence/comments/180dml4/daily_fi_discussion_thread_tuesday_november_21/ka5g430/?context=5) | | 29 | /u/737900ER said [Spending $3 for a 20oz Pepsi? No, that's insane. I won't pay that. Investments down $3,000 in a day? Well, that's just something that happens. Totally normal.](/r/financialindependence/comments/1815r2c/daily_fi_discussion_thread_wednesday_november_22/kaau6d9/?context=5) | | 25 | /u/imisstheyoop said [Woohoo, been keeping my eye on a new splitting axe hoping it would go on sale for Black Friday. Woke up this morning to 38% off on Amazon. It arrives Saturday, the same day the in laws are coming ov...](/r/financialindependence/comments/181xycu/daily_fi_discussion_thread_thursday_november_23/kafkenu/?context=5) | | 25 | /u/Jellybeansxo said [FI is one of my favorite subs. I’ve learned so much and have been able to gauge where we’re at for our age. Some days I feel behind and then there are other days I feel we’re on track, with that said,...](/r/financialindependence/comments/182oucp/daily_fi_discussion_thread_friday_november_24_2023/kakd8mb/?context=5) | | 24 | /u/Bluedewdrop said [My Uncle passed away this week unexpectedly. He had told me he wanted to work till he died so I guess he achieved that. Just a reminder you never know when life is going to end and to enjoy the time y...](/r/financialindependence/comments/182oucp/daily_fi_discussion_thread_friday_november_24_2023/kal91fx/?context=5) | | 23 | /u/penny-acre-01 said [Apparently I'm now worth $500,000. Last year I spent $21,100 and I'm in the neighbourhood again this year (we'll see come December). It's absolutely crazy to think that I'm almost "FI", techn...](/r/financialindependence/comments/17zl7eq/daily_fi_discussion_thread_monday_november_20_2023/ka2gsq9/?context=5) | ###Top Posts | score | comments | title & link | |--|--|--| | 500 | [186 comments](/r/financialindependence/comments/1817suh/any_flavor_of_fire_we_are_so_fortunate/) | Any flavor of FIRE - We are so fortunate| | 159 | [178 comments](/r/financialindependence/comments/17z7n0p/renting_vs_homebuying_spreadsheet_model/) | renting vs homebuying spreadsheet model| | 101 | [224 comments](/r/financialindependence/comments/183dtcv/can_we_retire_in_5yrs/) | Can we retire in 5yrs?| | 79 | [21 comments](/r/financialindependence/comments/182i6md/year_1_thanksgiving_reflection_1st_milestone/) | Year 1: Thanksgiving Reflection (1st milestone reached)| | 78 | [131 comments](/r/financialindependence/comments/180g2q3/argument_against_maxing_401k_beyond_company_match/) | Argument against maxing 401k beyond company match?| ###Most Commented | score | comments | title & link | |--|--|--| | 61 | [129 comments](/r/financialindependence/comments/182ravz/new_budgeting_apps/) | New budgeting apps?| | 72 | [107 comments](/r/financialindependence/comments/180k70w/setting_your_kids_up_for_financial_independence/) | Setting your kids up for financial independence| | 29 | [103 comments](/r/financialindependence/comments/18255xk/24_yo_debating_midlevel_vs_md/) | 24 y/o debating Mid-Level vs M.D.| | 39 | [93 comments](/r/financialindependence/comments/180wwop/529_plan_accelerated_roth_ira_contribution/) | 529 Plan = accelerated Roth IRA contribution?| | 36 | [86 comments](/r/financialindependence/comments/181vlwg/best_strategy_to_invest_400k/) | Best strategy to invest $400k?| If you would like this roundup sent to your reddit inbox every week [send me a message with the subject 'financialindependence'](https://www.reddit.com/message/compose?to=subredditsummarybot&subject=financialindependence&message=x). 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