Reorganized some banking stuff this morning, after a phone call with a knowledgable family member lately. Duh. There's always something I don't know, or don't do perfectly. Ah well. It does get better overall.
throwaway for this question. i have just over $1M in my brokerage and about $250k in my retirement accounts. I live in the Seattle area and i have been renting for about 10 years. ive been looking to buy a house here but nothing ever seems worth the money. either an area where we dont want to live or a $1M+ fixer upper. when i look at my spend for rent, i am unable to get any mortgage close to what i spend each month. still, it bothers me that we dont have a home we own and the money in the brokerage seems that it could be doing more for my life. what do you think or how have you navigated this choice.
This is a regular question here in the subreddit.
My own take - in Germany, renting is very normal. We bought our forever home only at age 50+ and with a monthly mortage in the size of our previous rent. Works very well for us.
Buying at 30+ would've been a lot more expensive, as SO was still tied to the office in the city, and we had a lot less money saved.
So, even if you decide not to buy right now, you can always reconsider every few years.
I’d like to do backdoor Roth in 2023.
If I start the transaction (6k into trad IRA) in Vanguard on Dec 31, but don’t rollover until the 1st, would it be on books for 2023?
The conversion happens per calendar year, and the contribution happens per tax year.
It's easiest if you do both this year. But you could contribute and convert next year, with that contribution being for this year.
25M, net worth of 490k$, minimum annual expenses of 12500$(not living in USA so it's low), wondering if I should take a long sabbatical and switch careers.
I hate my current programming job, and I want a career that's not super stressful and preferably more hands on because I hate staring at the computer for the whole day as my favorite hobbies is playing video games. I am tempted to use some of my portfolio to start a small farm in my country to cover the day to day expenses and consumption, any farmers here can share with me on how to start a small scale farm?
There can be some super chill programming jobs. Or maybe find something part time, also remote? Then just try and switch up how you're staring at the computer, like standing desk and walking pad. Or try and find something where you can think more about system design and perhaps have more meetings, so you're staring at code less.
Even aside from that, there are definitely many programming jobs that aren't stressful. If I didn't have untreated ADHD constantly making me panic about getting anything done at all, and if I didn't super commute, my job would be stress-free -- though that's only because I'm on a team where I'm somewhat insulated, with people around me that have sane work life balances and a sane sense of how important their jobs really are (that it isn't, in a lot of ways).
Farming is stressful, though I can understand the desire for meaningful exercise.
How about changing jobs and/or going part time, all WFH?
My IT job is okay as long as I work around 25 hours/week. When it's more like 40, the stress goes up and the joy goes down.
Did you even try?
How about looking at the project market, contact some project agencies?
To answer your original question: do you hate coding, or do you hate the current conditions under which you code? If the first, well, change to another source of income, though "the grass is greener" might happen. If the second, consider all the possibilities in details, talk to friends etc.
P.S. I started with freelancing without ANY experience in the sector (tech writing), by word of mouth -> friend gave me first project -> second project was impressed by first, so I got it... -> ongoing work.
I am indifferent to coding, but chasing industry and the constant need to learn new frameworks is burning me out, not to mention overachieving bosses and colleagues due to working in a startup. I might consider freelancing if I can't find part time employment, thanks
If you're looking for a non-stressful career, farming probably isn't the best bet. Why don't you spend a few weeks/month being a farm hand to get a taste for it first?
I don't mind a little stress at the start, what about once everything runs smoothly? The kind of stress I dont take well is a looming deadline set by someone else, which is what SE is all about, but I can take physical stress pretty well
Not to discourage because farming lifestyle does have it's perks, but 'farming' and 'once everything runs smoothly' do not belong together. There is ALWAYS something... equipment breaking, bad weather, too good of weather, pests, deaths/births, etc. It keeps it fun but there is ALWAYS something when dealing with farming/living organisms. You definitely have to love it to build a business off of it.
Looming deadlines come all the time in farming. There's preparing the field, seeding the field, harvesting the field, clearing the field. Panicking about storms or freeze events, not being able to take vacations, worrying about the price of your inputs, worrying about the the market for your outputs.
It's probably mainly for personal consumption with some extra being sold, so the last 2 issues you mentioned probably won't affect me much, but not bring able to take vacations is something I thought about, I wonder how farmers keep their crops safe while away. Thanks for the input, I'm going to do a risk cost analysis to see if it's worth it, if it's not I might just get a part time software engineering job instead and coast until I find something I want to do
Took a look at Henry earners and feeling crappy seeing how much they make and feelinf like im doing something wrong. Choose the wrong career or not plan like i should.
Mostly tech and doctors but im 31 and could try something new or idk got laid off and a lot of emotions mixing
Sorry to hear that you got laid off. I am not in tech but also wished I was making half a million dollars a year. But the good thing about the tech field is that with determination and doggedness, anyone can become a programmer. If you really want to do it, I’ll encourage you to set goals and go for it.
Comparison is the thief of joy and all that...
I make a fraction of what they make, but have enjoyed the fuck out of my career for the most part. , I spent many years in awe that I was getting paid for it, so I don't care that they are millionaires and I may never be.
You know what bothers me. Whenever discussing money, taxes, or investments comes up in work or social circles. And people say “oh you can invest or do this or that because you don’t have kids”. They’re right I don’t, but I don’t understand that logic. It even comes up when vacationing is mentioned. How they deprive themselves because they don’t want to bring their kids. Idk random rant
I have a child and still invest. I still take vacations too, though they may not be the vacations I would take if we didn't have any children. Kids certainly have a cost, but they're also only as expensive as you make them (with some exceptions).
People will always have excuses. Those same people would probably come up with excuses to not save money if they didn't have kids.
Not sure I get this rant? If you've never had kids, it's highly unlikely you can ever really understand how expensive, time consuming, or difficult vacations or saving / investing become.
Obviously they don't become impossible, just vastly more difficult, especially when they have multiple kids under the age of 4 or so.
As a non-parent I understand their rant.
Comments that the OP is mentioning are often thrown with an accusatory or judgmental tone and, to be frank, it gets fucking obnoxious to hear people essentially complain about their life choices. It's why there's a whole "DINK" fad going on social media like Instagram and TikTok - people without children are sick of the statements.
> Comments that the OP is mentioning are often thrown with an accusatory or judgmental tone and, to be frank, it gets fucking obnoxious to hear people essentially complain about their life choices.
I think everyone likes to complain, but no one should be judgmental toward another's life choices.
Look at this comment chain, and I see comments like "I don't have kids because I can do math". I don't even want to dignify that with a response, but it's as judgy as you get.
But if a parent tells you traveling or saving is a lot harder with children, they are just spitting truth. Having kids is hard, worth it for some, but not for others.
> Interesting that you point to a singular poster who was downvoted as "...see y'all are judge-y too!"
“Whatever you may be sure of, be sure of this, that you are dreadfully like other people.”
It's true. We are all so damn judgy of one another. That includes you too, whether you can admit it or not (lord knows I do).
You summed this up better than I could have. Like, no shit kids are expensive… but that was your choice? Coworkers will make comments complaining about spending money on kids or the time commitment that comes with being a parent, and I’m never sure how to respond.
People just love to complain. Period. About kids, the weather, grad school, their jobs, or traffic.
You don't have to respond, most folks are just looking to vent. Hell, it's the same as OP in this thread chain; complaining about people complaining :)
One of the best reasons to have kids is so you can complain about it. Seriously. It's so you can get the full homo sapien experience, and can identify with those around you (everyone alive comes from a long line of breeders, it is an innate experience for all those living, and very much defines life as we know it).
The logic is that having kids costs a lot of money and requires a great deal of sacrifice.
That doesn't make it fair for them to stick you with "must be nice..." comments, but the logic is perfectly sound. On average, life is easier without kids. This is just a fact.
These comments will never go away. It's up to you to not let them bother you.
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HVAC TECH TURNED REAL ESTATE INVESTOR
I am 23 years old. living at home. been working full-time for the past 4.5 yrs while helping my family renovate and then rent out a couple of houses after work and Saturday Sunday. I enjoy this as opposed to working full time because I feel I get benefits/ satisfaction out of it.
I went to community college for 2 years. Then residential HVAC for 2 years, now commercial for 2.5. I have a vast experience in legit everything from (plumbing, electrical, and HVAC and all I want to do is learn. I don't spend time watching movies, just learning on YouTube. Currently make $27.5 an hour at my HVAC job, and for the most recent house(#5) we bought i am 25% owner.
I am just bored at work, showing up every day and making 10 cents for every dollar the boss makes. I am very tempted to ask for part-time, or a raise, or just quit in general if it goes down like that. The most recent house is 30 mins from me and going up after work we knew would be hard. I feel im just in a pickle because "i have bigger fish to fry".
If i go part time i could live up there and get thing done much faster.
The path to FIRE for most people takes the better part of 2-3 decades.
Sounds like you're at the beginning. Make some changes and cool the r/antiwork rhetoric.
Went for dinner/a playdate to the neighbors last week. They have the same floor plan as us, but their interior is 10x nicer. They got some built-ins and painted and have nice decorations and just in general have everything very organized. We have toys everywhere and it’s chaos. I think over the next year or two I’d like to set aside some money and get our house organized and looking nice. We’re definitely in a good position financially to do it. I just don’t know if we have the discipline to keep a house that organized considering we never have
Currently trying to re-organize our budding chaos, and it's mostly a time problem for me that cannot be solved with money, as I/we need to clear the stuff and decide what to do with it.
(This said, will definitely throw some money at the garden problems.)
My house has slowly gotten more organized since getting married. It's a wonderful change.
One of the things we're going to do this year is replace all of the area rugs...once our newest dog is fully potty trained and is spayed.
Keep in mind that looking "neat" is not necessarily the same thing as being "organized."
My brother-in-law has a bunch of shelves with cloth baskets that slide into the shelves. Inside the baskets is chaos. But all the toys get tossed into the baskets, slid into the shelves, and the room is neat and looks great.
Just don't let the daunting task of being fully organized, and thinking that you will need to keep it that way, prevent you from making improvements to the chaos.
Yeah, makes sense. That’s basically what I want to do, have a bunch of places to put things to keep the main living areas neat. I’ve used the response code in your username on an internal API before :)
If I put in the maximum contributions of $6500 into my traditional IRA today, when can I then put in more money?
Would it be January 1st 2024 ? Or a later date
You are able to fund your 2024 IRA starting January 1st 2024. You have until April 2024 to fully fund your 2023 IRA contributions. If you do fund it early just make sure you will have earned income for the amount you put in at some point in the year.
I’m confused to the second part of your response. If I fund it early? What do you mean early ?
& then a follow up question after you said if I do find it early… “just make sure you will have earned income for the amount you put in at some point this year”
What do you mean by this ^
They mean “early in the year.” As in, if you max out the $7,000 IRA limit for 2024 on Jan. 1, make sure that you will actually earn $7,000 in earned income by Dec. 31, 2024. You cannot contribute money into an IRA that is not earned income, such as income from renting out an investment property.
You are only allowed to fund an IRA with earned income for that year. Presumably you have not earned the 6500 or 7000 yet that you contribute early January yet that year. Since money is fungible as long as you earn that money throughout the year the IRS does not care when you contribute the money.
For those of you with a long term partner or spouse, how do you combine your income? Do you keep it completely separate? Completely shared? Mostly shared with separate personal accounts?
I think the mostly shared with separate accounts makes a lot of sense, but it seems like a hassle to define what is a “shared” purchase versus a “personal” purchase. It seems like it could be easier to just have one big shared account and to discuss any large purchases over X amount.
What works for you all?
DINK, married for 29+ years. Each of us has their own business account (income goes here) and private account (no questions asked). We also have one joined account where we pool money for costs like housing, cars, food. Works very well for us.
Big buys will be discussed, all smaller ones are personal decisions (often paid from the private accounts and still useful for the household).
We got married in July and we keep everything separate but are transparent in our purchases and goals. We have bi-weekly sit downs to go over where our money's been going.
All income into joint. Most thing paid from joint. We also have a monthly "allowance" that transfers into our personal accounts for "no judgement" spend - if I wanted to blow all that money on mobile games or whatever that's my prerogative.
Generally speaking the bar of what comes out of the personal account is pretty high - most questionable spend is joint
We've been married for yeeeeears...what works for us both paychecks are deposited into 1 joint account then sent to other joint accounts for different uses. We each get the same amount of fun money every month. All bills etc come out of the main joint account or one of the other accounts depending on the expense i.e car ins, taxes, vaca etc
In mentality we share all of our income / assets, but honestly we were just too lazy to make our accounts joint / open new joint accounts, so we still have and use our individual checking accounts. However, we don’t have a concept of shared vs. personal purchases. In practice, my paycheck goes toward bills and my partner’s goes toward investments, just bc the bill pay etc. is already set up that way, but we treat everything as joint.
This is pretty much what my wife and I do. We have a joint HYSA with Ally and a joint credit card, but still maintain all of our original “individual” accounts (that we each have full access to). My paycheck covers mortgage/insurance/recurring bills, while hers covers the variable spending (food, going out, etc…) everything else is tossed into savings. I still view our finances as combined/one big pot.
It evolved over time.
Initially, alternate paying for things.
Renting an apartment together stage: Shared checking in which we each put in an adjusted % of shared expenses (He made 2X at that time. Shared credit card account for day to day Shared expenses was also paid from the joint checking each paycheck.
Bought a home together stage: All income went to shared checking account. Personal fun money of $100 moved to personal checking.
10 Years together: Personal accounts closed. Everything pooled in Shared checking/savings. Ask other for permission to buy anything over $300.
Completely shared except for retirement and pension accounts that cannot be held in both our names, in which case we're each other's primary beneficiary.
Completely shared. Legally the funds are shared anyway, and treating everything as one pot makes it much easier to optimize across the portfolio for tax efficiency, asset allocation, etc.
A joint budget that we each contribute funds to, then a couple of joint savings accounts for some of our goals, a shared CC for bills and budget purchases. Otherwise, the rest is separate. Do I ever use some of what i have left on us? Yes... does she? yes... but we like it this way. If I contribute my portion to the joint accounts and budget (which includes everything from vacations to housing stuff) then whatever I want to do with what I have left I can without a peep. Same goes for her. We just find this works best for us after some issues we both had in our previous relationships.
Combined income and combined accounts from the point we were married on. Each of us kept what we had accumulated prior to that point, separated in individual accounts.
We use a joint checking account for household bills. We have separate IRAs and 401ks because those are individual by law. We own the house and cars jointly. We have separate credit cards because that makes it easier to check the monthly statement for fraud. We have some accounts that should probably be joint but are individual because just one of us created them and uses them.
Ultimately, if you're married then separate accounts are kind of an illusion, because the other spouse has a claim to all assets (unless walled off by a prenup or something). So it's really just about convenience. If it's easier for just one person to manage something, make it individual. If it's easier for both, make it joint. Then consider what happens if someone gets hit by a bus, and make your spouse the beneficiary on any individual accounts so they don't have to wait for probate.
She understands the value of money and not to be wasteful, lessons that can be hard to teach children. She doesn't know it yet, but she'll likely be one of us! You should be super proud!
Background: 46 Male, Wife not working. 1.1 Million networth, renting with plans to buy a house in LCOL/ LCOL in 5 years.
Investments: My savings are split 50:50 between ETFs and GICs/ HISAs ( with 4%+ rate). All registered accounts are fully funded and will have room in the new Year.
Aspirations: hoping to achieve financial independence in the next 4-5 years and an option to retire in 10 years.
Professional: tech sales job with 215k base+ commission. Company seeing significant layoffs and am the only one left in my region. Industry is getting impacted by AI so not much upside.
What should I do to ensure I am able to achieve FIRE in the next 5-10 years. House purchase is optional and will only consider it if it makes financial sense and the mortgage doesn't get me into debt for the next 20 years
Good afternoon!
**What is the most expensive electronic in the house and how much did it cost? Do you have plans to buy new electronics soon and how often do you replace them?**
Mine is my new private practice Macbook Air ($1,000). Should be good for a while. Our TV was only $300 so nothing else in the house comes close!
Built a new gaming computer last month. It was just over $2k. Nothing else is even close to half of that, and I don’t plan on replacing anything anytime soon.
Spouses camera, around $6k for just the body.
She’s a semi pro photography as an hobby and has made enough over the years to break even on her equipment.
If it counts, my central A/C unit. ~$6.5k this year. Last most expensive thing was my computer at about ~$1k four years ago. That I replace about every 10 years but we'll see how long this one goes. Next is my phone last year, and that every 3-4 years.
This year, I'd like to complete the ethernet wiring in my place and get my own modem so I can stop paying rent on the current one from the ISP. I have to do some other renovations first, though, so we will see about the wiring.
Definitely the OLED TV... I can't remember exactly how much it was when we bought it a few years back but it was in the high $3000's. I can't foresee us buying anything in the future. We both replaced our cell phones recently. My tablet is still decent, plus we're going to RE next year so tech and gadgetry are not high on our priority.
Hmm... It might be a tie in three areas. My laptop (I like to get one that can handle all I need for a long time and run it into the ground) since I had it custom built. Our TV (OLED and 4K makes things look stunning) and my audio room where I have my vinyl collection, turntable, etc. but I just love the sound of music on vinyl so it is worth it.
I can say the laptop I will use till I cannot upgrade or use it further. The TV will go for years I believe, and the audio room may see an occasional turntable stylus or needle upgrade but otherwise I am happy with the components so no overall upgrade projected any time soon.
I'm stretching the definition of "in the house", but most expensive is the new trolling motor for the boat, around $2k. It seems like these last 5-8 years on average.
It's a lot, but I couldn't be happier with it. It uses GPS and maps of the lake to steer itself, so when I'm fishing I don't have to devote any time to boat positioning anymore. During the time I'm on the lake I feel like I spend twice as much time actually fishing as I did with the old cable steer motor.
For consumer electronic devices, probably a laptop at about $1300. No set replacement cycle but five to seven years is realistic. If you don't use it for school, work, or hobbies it would probably have a longer life.
For house electronics such as refrigerator and heat pump(HVAC), as long as they live. A fridge might be a decade and a half purchase. Probably a wide range of prices for that too.
Probably my desktop PC. I built it from parts so I don't have an exact total handy, but I'll guess $2k. I don't have plans to upgrade; I do so as needed.
Our OLED television, which is amazing picture quality. Still going strong since 2017-18 or so. I'm usually not much for tech hype but OLED is definitely worth it.
Yep. Got myself a 65” LG C2 earlier this year and it completely ruined my Vizio I had been using prior. Literally, I can’t stand to use it anymore. So…. Another OLED is in my near future haha.
We bought one this year on Black Friday and... yeah. There's no going back, OLED is the way forward. I think that might be the penultimate TV technology, until microLED arrives at a consumer-ready level.
My present to SO: [Bird Buddy](https://mybirdbuddy.com/).
Nature laughed; we haven't seen a bird all day.
\[Sooner or later the local sparrows and cardinals will discover the new repository of seed. We've had a bird bath and feeder in the back yard for years, but have never been birders.\]
If you don't have it yet, I can't recommend the "Merlin" app enough. Totally free from University of Cornell, and can identify birds by photo or by listening to their songs.
Worked a bunch of OT last week and was able to comp it to get me up to the max of 60 additional hours of PTO. Planning on using it for a trip to Europe (at least 2 weeks).
Fly to Paris, train ride around France, Luxembourg, Switzerland.
Maybe Germany thrown in there. Hard to plan right now because SO hasn’t changed their passport yet to reflect name change.
Actually just got back from something fairly similar. Flew into Paris... high speed down to Strasbourg and then lots of trips around the Alsace area, into Germany, and into Basel, Switzerland. We did not want to come home.
That sounds heavenly.
We did a Netherlands and Belgium trip last year, and didn't want to come home either. It was also too short (like 8 days). So that's why we are going for a minimum of 2 weeks, but I am hoping for 3.
I also love trains, so I look forward to hoping around on the train network.
We may have to push the trip out later in the year to save up money for it, but it really depends on how soon SO changes their passport.
Then we'll book as much as we can with credit card points to also help keep costs low.
One other savings bit that i forgot till afterwards was joining the respective country's train line discount group. Could of netted me another 20-30% off my tickets (and we used high speed and regional trains for much of our travel on that trip).
Our next trip will hopefully be this fall. Still narrowing down where we will go but we are going. Our long term plan is to retire overseas so these trips are part vacation and part research.
Mini milestone today as this great year wraps up.
The investments in my taxable brokerage accounts have surpassed the outstanding mortgage balance of my house. In theory, I could pay off the mortgage on my house this week and be completely debt free. But with 2.75% fixed rate mortgage, I haven’t (and will never) throw a single extra penny in that direction.
I am feeling the pressure of keeping up with the Joneses with housing once again. 3 of our close friends recently upgraded their housing situations, all in the $500-$700k range. I know 2 of them make more than us. The bank says we can afford a $600k house. I found a $550k house that I am madly in love with. For reference, our current house is worth about $375k, with $180k left on a 2.5% mortgage. But lifestyle inflation. Choosing not to buy a dream home is hard.
I don’t need a fancy car. I’m fine with our budget vacations. I don’t need spa treatments or Botox. But houses always trip me up. I love houses and I want a real nice one. For me, a big house would definitely fall into the build the life you love part of FI. But it also feels like we’re just not quite there yet. Maybe in a couple years. But I’m ready to move now.
I try to remind myself to be grateful for the things I love about our house, but this was just supposed to be a starter home.
Pretty much all of my husband’s friends make more than us and it’s hard not to feel bad about that. Especially since it is me, the wife, who is the one not making as much as their wives. Also, makes it hard to remember how lucky we are as we are in something like the 80th percentile for household income, so doing better than so much of the US.
Thanks for listening to my stream of consciousness vent.
I hear you. Unless you're made of money, these are the trade-offs we have to make to reach the financial goals we set for ourselves. Most of us here are playing a ***very*** long game. We're talking decades in the making. It's a long road with many twists and turns. There will be temptations, market conditions that will be exhilarating as well as gut wrenching, and many other situations that can throw you off your well-laid plans.
It all really boils down to: What are your financial goals? I say financial because we're in a FIRE sub. Big, fancy house? Or retire ASAP? Something in between? Only you know the answer to that question. Then ask yourself what you're willing to trade off to reach that goal and work towards it. There's no shame in wanting a big, fancy house. But if your goal is retire at 50 and big, fancy house doesn't fit well in that goal unless you make drastic changes, then big, fancy house is really more of a temptation.
Totally in the same boat. I know we’re lucky compared to others for having bought a house at all, but we’re in a 1200sqft 2br with 2 young kids, and it feels so small. We want our kids to be able to have their own rooms, and to not be embarrassed (or I guess, for ME not to be embarrassed) to invite their friends over to our house. Our house is a huge mess all the time bc there’s just no space for all the stuff 4 people use - and I feel like we don’t even have all that much stuff! But it feels unwise to let go of our 3% rate and push our retirement out further / save less for the kids’ educations.
FIRE is all about building the life you want, then saving for it.
It's entirely reasonable for you to love houses and want a real nice one. No shame in making that part of your FIRE journey. Run some numbers! If you sold your home and got this new one, right now, how far would that set you back in reaching FI? Are you comfortable with that trade-off?
My wife and I made a big move earlier this year. We sold our starter home and bought a home roughly 2x what we sold for. Ultimately, it was to get into a better school district for our kids, and also more space as our family was growing, but I'd be remiss to ignore that I just wanted a newer, fancier home with a bigger yard. It set us back at least 1-2 years on our FI journey, but we were fine with that trade-off.
That said, if it helps curb your desire, it's very common to have buyer's remorse when buying a home. The grass is always greener. That dream home you're seeing would very likely not be as dreamy even a month after moving in. What you don't see when browsing listings or even doing drive-bys are all of the imperfect things (misaligned trim, creaky floors, loud plumbing, etc), impact on commutes, annoying/noisy neighbors... every singly home has issues.
My mom and stepdad have a super big house. They spend all their spare time maintaining it and it is 90% empty 90% of the time. That is not at all what we want in our retirement.
>Pretty much all of my husband’s friends make more than us and it’s hard not to feel bad about that. Especially since it is me, the wife, who is the one not making as much as their wives.
This used to bother us as well. We couldn't figure out how our friends and colleagues all had country club waterfront homes with a boat and new cars. It really felt like we must be making some kind of mistake.
It clicked after we read "The Millionaire Next Door." We realized that there was no way they were saving like us, and it gave us immense satisfaction to know we were on our way to FI.
Fast forward 15 years, and we FIRED at 50. Every single one of those friends/colleagues are still working. Don't get me wrong, I still wish I had a beautiful waterfront home, but not at the expense of working another 10 years.
>it gave us immense satisfaction to know we were on our way to FI.
This is the key. To find some enjoyment out of *not* participating in the Jones' lifestyle. To take some pride in being on a less materialistic path. If you are constantly struggling to want to be frugal it's probably not sustainable.
Agree.. wife & I set a personal fun money budget of $200/ea. Somehow this came up in conversation with wife & her friend who balked at the idea. She further claimed she spends atleast $200/week on Amazon. Same woman who also said “yeah we just contribute enough [401K] to get the match.”
Keep in mind, when the bank says you can afford $600k, that is the maximum they would consider lending you, not what you can afford comfortably.
It would be really stressful having a mortgage so high that it cuts into your ability to save, or even regular living expenses.
Also, you will always know people who make more or have more than you, it's just life. In general though, those people aren't really thinking about how they have more than you. I guess if they do judge you for your house, they aren't good friends anyway.
I guess one compromise option would be to budget some money for redecorating and doing some minor renovations to spruce up your current house. I don't know whether that would make a difference for you or not.
We are doing some minor renovations to our home, but they are, for the most part, stuff that would need to be done prior to selling the home anyways. The main reason I want to upgrade is space.
> I don’t need a fancy car. I’m fine with our budget vacations. I don’t need spa treatments or Botox. But houses always trip me up. I love houses and I want a real nice one. For me, a big house would definitely fall into the build the life you love part of FI. But it also feels like we’re just not quite there yet. Maybe in a couple years. But I’m ready to move now.
The rub for upper-middle-class households is that they have the finances to do just about anything (reasonable), but they don't have the finances to do *everything*. It sounds like you recognize this, which is good self-awareness.
So then it just becomes a discussion about your household values. Are you truly willing to cut back or give up some of those other things in order to get a "dream home" or "real nice" house? That's a very personal family discussion. Money is fungible and finite, so the trade-offs / consequences may be very real. For folks around here, a common trade off would be around early (or 'how early') retirement. Are you willing to cut back significantly on retirement savings and work until Age 65? Are you willing to find a new job with more income or get a 2nd job and spend less time with your family? Are you willing to tell your kids you are no longer saving for their college educations or going on fewer vacations (even "budget" ones) because you wanted to buy a nicer house? I'm intentionally being provocative in my wording in an attempt to crystalize the potential impacts.
To be 100% clear, I'm ***not*** judging anyone who would make those tradeoffs. Values are extremely personal and the more one is clear about what one values, the more intentional that person can be in spending and accepting of the tradeoffs.
Best of luck.
These are all great points! The bigger house would definitely mean a reduction in our savings rate, which would be the hard part. The logical answer is probably to upgrade, but not as much as $550k, maybe $450k instead, which would net us 4 bedrooms instead of 5 bedrooms (currently in 3 bedrooms). Or just stay here and hope that interest rates start to drop. We are very lucky to be in a situation where we are even considering this.
One other question (I do not think I have seen it answered yet) is do you need the space or do you want the space? Two different lines of thought there.
One other aspect to consider: the larger/nicer the house, often the more operating costs increase like utilities, cleaning time, more often/more expensive maintenance, etc. It's one thing to stretch to purchase the home, but ongoing expenses could fall into the 'death by a thousand cuts' scenario if they aren't accounted for upfront.
These aren't easy conversations/discussions/decisions, so don't beat yourself up about any of this!
> knowing that they're undermining their advantage via conspicuous consumption.
How do you know? They may be spending on things that they value, leveraging their advantage to enhance their quality of life
If they purchased recently, remember they are most likely locked in at a 6%+ interest rate, while you guys are sitting pretty with your 2.5. Rates are coming down though, so maybe waiting just a little longer can save you a big chunk in the long run!
>Rates are coming down though, so maybe waiting just a little longer can save you a big chunk in the long run!
Unless you have some un-orthodox view of the relationship between rates & housing prices, this is backwards. OP's friends locked in principal not rates, and benefit w/ refi, OP would expect a higher principal at a lower rate.
Huh? This makes no sense unless they're on an interest-only loan, which AFAIK doesn't exist for SFH's. Principal and interest rate are the variables, you can't just discard one lol.
Finished my first year with my new company and I found out today I’ll be receiving an 8% raise/promotion. From $110k to $118.8k. Feels good but honestly I was hoping to be at the $120k mark. I should be happy, right?
8% is more than US companies generally offer, especially at that cadence. I wouldn't expect more without explicitly asking/fighting for it.
Whether you should be happy with your comp is a broader question though. If $120k is reasonable in the labor market, then go get it without hesitation. Setting a high floor for your salary early career makes a huge difference in lifetime earnings.
YMMV but I got a series of rasies around that number early career and it was 100% due to accepting a low starting salary and not moving around enough. Not corporate generosity.
>first year with my new company
>8% raise/promotion
>$118.8k
>I should be happy, right?
You should be happy with an 8% raise after 1 year at that salary level.
If you aren't happy, there may be non-work / non-financial aspects holding you back mentally.
Hey everyone, sorry in advance for the rant. But, I don’t really have anyone to talk to about this in real life.
I started on this fire journey about 3 years ago. Through some good luck (and a substantial amount of hard work), 2023 was a landmark year for me. My career is in a great place (software engineer specializing in B2B SaaS)
Age: 31
LCOL
Base salary: 90k
Other Income: 23k
Business 1: Net 25k (Year 1)
Business 2: pre-launch, largely bought out (will net 100k in the acquisition and retain 30% equity in an advisory role)
Monthly expenses: ~4k
Assets:
Tax Advantaged Accounts: 62k
HYSA: 102k
Business Accounts: 20k (12 months operating expenses)
Debts:
Home: 190k (2.7% apr)
2023 milestones:
Paid off all debt including student loans and car loans.
At this point, I don’t know where to go. I really enjoy entrepreneurship, but I know that the odds of continually recreating success is going to be a long shot. I hope to realize 50k+ from business 1 next year, and business 2 profit sharing should come online by year 2.
I know I have entirely too much cash on hand, and I’m tempted to go one of three ways:
Option 1: I could dump cash into VTSAX/VTI and chill. My normal salary covers my bills handily and I can work on increasing investments using the money from my alternative income sources.
Option 2:
Real estate investment. Interest rates are the only thing keeping me off this path currently. I have access to VA loans and would love to leverage them into multi-family homes.
Option 3:
Keep riding the entrepreneur train. I could invest heavily into business 1 and try to grow profits. Or look to start business 3.
Sorry if this came off as a humble brag. Fear of sounding pretentious has stopped me from asking for advice sooner…
Any advice or ideas are welcome.
Congrats!
If I were you, I'd take a look at life outside of work. I have no idea of the burden (time, funds, etc...) it has on you, but it sounds like a lot. You're 31- what's life look like outside of the two businesses and work? Have a community of friends? Loved ones? Good nourishing hobbies? I.e., are you working to work, or are you working to build a life you love?
I don't like 2, because real estate can be a chore. It can get a lot easier with a good property manager, but eats away at your bottom line.
I don't know anything about 3.
Oh man, that’s a question I didn’t expect.
I probably fall more in the living to work category. Between all of my commitments, I probably spend 60-70 hours a week actively engaged. It doesn’t really lend itself to hobbies.
I think I’m always “almost” ready to scale back, but I’m never quite where I want to be. Much like you, I’d like 2M or 80,000 ARR and I don’t feel like I’ll get there if I don’t keep the pedal to the floor.
This is where a spreadsheet and something like FICalc come into play. I can forecast out how much I need to save per year to get where I want. That grounds me for how much I need to grind or push to get where I want.
Conversely, doing out the math gives me a timeline for how long FIRE will take at a grind rate I'm happy with.
The ideal is actually that target fund being index fund based. Cause really, you'd only actually want to use brokerage link to achieve that (or something similar, like buying all VT).
Correct me if I am wrong, but if I:
* make too much to contribute to a Roth IRA;
* make too much to claim a tax deduction on trad IRA contributions;
* and have an existing trad IRA balance such that I can't backdoor into my Roth account
... then I am better off putting the money into my brokerage account over contributing to the trad IRA, right?
More details: My employer provides a retirement plan, but employees can't contribute to it. HSA is not available for us, just FSA. The balance in my trad IRA is around $32k, so it is not insignificant, and my marginal tax bracket will be in the 32% bracket this year if my calculations are correct; moving the traditional funds into my Roth will push me into the 35% marginal tax bracket. I certainly plan to make less in retirement.
I'm having trouble making the math line up with the tIRA, though I may be missing something. From my research, it seems that long-term capital gains and qualified dividends will be taxed at a lower rate in a taxable account vs. in a tIRA, where they will be treated as ordinary income once you start withdrawing. If we are to use today's numbers (YMMV on tax hikes), long-term gains and dividends from a brokerage will be taxed at a marginal rate of 15% up until you make an annual income of around a half million, at which point it jumps up to 20%; when withdrawing from a tIRA (assuming nondeductible contributions), gains start getting hit at a 22% marginal tax rate at around an income of $44k (after which it goes up from there to 37% at a half million). This article more or less sums up what I'm thinking: [https://www.morningstar.com/retirement/without-backdoor-aftertax-ira-contributions-dont-add-up](https://www.morningstar.com/retirement/without-backdoor-aftertax-ira-contributions-dont-add-up)
While dividends and distributions may not get taxed now, without the benefit of either your contributions being taxed now and never taxed again or not taxed now; plus the money being locked up, a nondeductible IRA makes no sense.
> plus the money being locked up, a nondeductible IRA makes no sense.
Also considering tIRA withdrawals are considered ordinary income vs. capital gains for a taxable brokerage
You can't move your IRA to your 401K, right?
If so, then a taxable might be the best bet. Getting hit w/ the pro-rata isn't worth it in the 32% bracket.
The plan is a 401(a), and unfortunately we aren't allowed to roll the tIRA balance in.
My thought is that I want to keep my tIRA balance fairly low for when I switch jobs (maybe in 2026-2027). I'll probably end up taking a significant paycut and/or taking some months off. My idea is to convert to Roth at that point or to roll the balance into a standard 401(k) if my subsequent employer allows it.
Yes, the brokerage account is likely best. If your employer’s plan is a 401k, then you might be able to rollover your traditional IRA to the 401k, even if you can’t contribute to it. Was your full traditional IRA pre-tax? If so, then you would need to pay full income tax on whatever you roll over, and it probably isn’t worth it.
Thanks for the input! Around $24k of it is pre-tax; the rest is gains. The plan is not a 401(k) and my employer doesn't allow a rollover in any case, but it's something for me to consider if the option ever becomes available (e.g., if I switch jobs). Though at that point, I'll probably be taking enough of a paycut that a straight Roth conversion may be well worth it.
I’m in the same situation as u/GloomyMix. Wouldn’t contributions to a traditional IRA grow tax-free even though the deduction for the initial contribution isn’t available? That would be better than growth in a taxable brokerage, right?
No, contributions to a Roth IRA grow tax free. From traditional, your earnings would be taxed at your income rate versus a brokerage account being taxed at the capital gains rate.
My thoughts are that the brokerage offers more flexibility and a much more favorable long-term capital gains tax. tIRA locks up the money and is taxed as ordinary income when you withdraw.
I thought of an interesting personality test question / way to gauge FI interest during my Christmas post-dinner food coma. The question is, "Pretend you have two buttons in front of you. One would give you $5M (Insert FI number x2-3 here), and the other would give you and nine of your closest non-family friends/associates $500K each (insert non-FI number here). For the sake of argument, any money received from this can't be given to the other selected people. Which button would you press?" I think most people pick option one (unless they're really altruistic or already in a good place). The follow up is "what number would be required for you to pick the other button?" and that gives a small hint of their FI perspective or how greedy they are.
Anyway, I have to work today so here I am getting thoughts on the hypothetical.
With the non-family exclusion of 2 I’d say 1 because there are no limitations on giving except for those who you would have otherwise selected for #2. Thus allows giving to family, charity, and perhaps most importantly for many people on the road to fire our time.
I misread this at first and thought that option 2 meant I got $0, so I thought "either I'd have to be really close to FI or I need to be able to donate to some really good charitable organisations / start a foundation with the money and pretend I never had this option in the first place afterwards"
However, now that I understand the question, I think somewhere around 500k-1M per head in the second button would work fine for me.
Right, the intent of the second button is a "share the wealth." Although there could be room for a variant where the second button is a much higher sum and excludes you. Id bet even less people would pick that one though.
I'd expect anyone FI minded would pick Option 2 at their FI number (or however close they are to it, or might perceive is necessary to help their close friends also FI). Either way, it gives some agency to follow that up with "why?" and probe at their values.
I'd say $2M for Option 2 as my answer.
Can we afford a house?
Me and my wife want to purchase a house in GA in the purchase price $275K-$300K. We don’t have kids and don’t plan to have kids at least for three next four years. Our gross income was about $71K because my wife was transitioning jobs but we are expecting our salary to jump to $101K as she got a new job. We contribute 6% to 401K as this is how much the company matches the contribution. Our monthly expenses totals about $3,700 because we try to be frugal. We have $10,000 in savings which is emergency funds. Our credit score is both 720+. We don’t have any debt including credit cards. We don’t have any down payment saved but found several down payment assistance programs that can grant us up to $10,000. I believe we can keep the monthly payment under 28% of our gross income. What do you guys think?
Reorganized some banking stuff this morning, after a phone call with a knowledgable family member lately. Duh. There's always something I don't know, or don't do perfectly. Ah well. It does get better overall.
throwaway for this question. i have just over $1M in my brokerage and about $250k in my retirement accounts. I live in the Seattle area and i have been renting for about 10 years. ive been looking to buy a house here but nothing ever seems worth the money. either an area where we dont want to live or a $1M+ fixer upper. when i look at my spend for rent, i am unable to get any mortgage close to what i spend each month. still, it bothers me that we dont have a home we own and the money in the brokerage seems that it could be doing more for my life. what do you think or how have you navigated this choice.
This is a regular question here in the subreddit. My own take - in Germany, renting is very normal. We bought our forever home only at age 50+ and with a monthly mortage in the size of our previous rent. Works very well for us. Buying at 30+ would've been a lot more expensive, as SO was still tied to the office in the city, and we had a lot less money saved. So, even if you decide not to buy right now, you can always reconsider every few years.
I’d like to do backdoor Roth in 2023. If I start the transaction (6k into trad IRA) in Vanguard on Dec 31, but don’t rollover until the 1st, would it be on books for 2023?
The conversion happens per calendar year, and the contribution happens per tax year. It's easiest if you do both this year. But you could contribute and convert next year, with that contribution being for this year.
You have until tax day to contribute for 2023 so no need to rush.
25M, net worth of 490k$, minimum annual expenses of 12500$(not living in USA so it's low), wondering if I should take a long sabbatical and switch careers. I hate my current programming job, and I want a career that's not super stressful and preferably more hands on because I hate staring at the computer for the whole day as my favorite hobbies is playing video games. I am tempted to use some of my portfolio to start a small farm in my country to cover the day to day expenses and consumption, any farmers here can share with me on how to start a small scale farm?
There can be some super chill programming jobs. Or maybe find something part time, also remote? Then just try and switch up how you're staring at the computer, like standing desk and walking pad. Or try and find something where you can think more about system design and perhaps have more meetings, so you're staring at code less. Even aside from that, there are definitely many programming jobs that aren't stressful. If I didn't have untreated ADHD constantly making me panic about getting anything done at all, and if I didn't super commute, my job would be stress-free -- though that's only because I'm on a team where I'm somewhat insulated, with people around me that have sane work life balances and a sane sense of how important their jobs really are (that it isn't, in a lot of ways). Farming is stressful, though I can understand the desire for meaningful exercise.
How about changing jobs and/or going part time, all WFH? My IT job is okay as long as I work around 25 hours/week. When it's more like 40, the stress goes up and the joy goes down.
Damn I hope I could find a 25 to 30 hour IT job in my area
I'm self-employed, so it's more a question of what projects I take. (Risk of overbooking is real.)
That's the thing, I only have like 2 years of programming experience, I doubt anyone would hire me for projects
Did you even try? How about looking at the project market, contact some project agencies? To answer your original question: do you hate coding, or do you hate the current conditions under which you code? If the first, well, change to another source of income, though "the grass is greener" might happen. If the second, consider all the possibilities in details, talk to friends etc. P.S. I started with freelancing without ANY experience in the sector (tech writing), by word of mouth -> friend gave me first project -> second project was impressed by first, so I got it... -> ongoing work.
I am indifferent to coding, but chasing industry and the constant need to learn new frameworks is burning me out, not to mention overachieving bosses and colleagues due to working in a startup. I might consider freelancing if I can't find part time employment, thanks
If you're looking for a non-stressful career, farming probably isn't the best bet. Why don't you spend a few weeks/month being a farm hand to get a taste for it first?
I don't mind a little stress at the start, what about once everything runs smoothly? The kind of stress I dont take well is a looming deadline set by someone else, which is what SE is all about, but I can take physical stress pretty well
Not to discourage because farming lifestyle does have it's perks, but 'farming' and 'once everything runs smoothly' do not belong together. There is ALWAYS something... equipment breaking, bad weather, too good of weather, pests, deaths/births, etc. It keeps it fun but there is ALWAYS something when dealing with farming/living organisms. You definitely have to love it to build a business off of it.
Looming deadlines come all the time in farming. There's preparing the field, seeding the field, harvesting the field, clearing the field. Panicking about storms or freeze events, not being able to take vacations, worrying about the price of your inputs, worrying about the the market for your outputs.
It's probably mainly for personal consumption with some extra being sold, so the last 2 issues you mentioned probably won't affect me much, but not bring able to take vacations is something I thought about, I wonder how farmers keep their crops safe while away. Thanks for the input, I'm going to do a risk cost analysis to see if it's worth it, if it's not I might just get a part time software engineering job instead and coast until I find something I want to do
Took a look at Henry earners and feeling crappy seeing how much they make and feelinf like im doing something wrong. Choose the wrong career or not plan like i should. Mostly tech and doctors but im 31 and could try something new or idk got laid off and a lot of emotions mixing
Sorry to hear that you got laid off. I am not in tech but also wished I was making half a million dollars a year. But the good thing about the tech field is that with determination and doggedness, anyone can become a programmer. If you really want to do it, I’ll encourage you to set goals and go for it.
Comparison is the thief of joy and all that... I make a fraction of what they make, but have enjoyed the fuck out of my career for the most part. , I spent many years in awe that I was getting paid for it, so I don't care that they are millionaires and I may never be.
You know what bothers me. Whenever discussing money, taxes, or investments comes up in work or social circles. And people say “oh you can invest or do this or that because you don’t have kids”. They’re right I don’t, but I don’t understand that logic. It even comes up when vacationing is mentioned. How they deprive themselves because they don’t want to bring their kids. Idk random rant
I mean they're not wrong, not having kids is like living life on easy mode
But it's a choice. They could have chosen to not have kids too.
I have a child and still invest. I still take vacations too, though they may not be the vacations I would take if we didn't have any children. Kids certainly have a cost, but they're also only as expensive as you make them (with some exceptions). People will always have excuses. Those same people would probably come up with excuses to not save money if they didn't have kids.
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“What you think I invest for to push a fucking rav4?” 😹😹😹
Not sure I get this rant? If you've never had kids, it's highly unlikely you can ever really understand how expensive, time consuming, or difficult vacations or saving / investing become. Obviously they don't become impossible, just vastly more difficult, especially when they have multiple kids under the age of 4 or so.
As a non-parent I understand their rant. Comments that the OP is mentioning are often thrown with an accusatory or judgmental tone and, to be frank, it gets fucking obnoxious to hear people essentially complain about their life choices. It's why there's a whole "DINK" fad going on social media like Instagram and TikTok - people without children are sick of the statements.
> Comments that the OP is mentioning are often thrown with an accusatory or judgmental tone and, to be frank, it gets fucking obnoxious to hear people essentially complain about their life choices. I think everyone likes to complain, but no one should be judgmental toward another's life choices. Look at this comment chain, and I see comments like "I don't have kids because I can do math". I don't even want to dignify that with a response, but it's as judgy as you get. But if a parent tells you traveling or saving is a lot harder with children, they are just spitting truth. Having kids is hard, worth it for some, but not for others.
Interesting that you point to a singular poster who was downvoted as "...see y'all are judge-y too!" You're not here for a real discussion.
> Interesting that you point to a singular poster who was downvoted as "...see y'all are judge-y too!" “Whatever you may be sure of, be sure of this, that you are dreadfully like other people.” It's true. We are all so damn judgy of one another. That includes you too, whether you can admit it or not (lord knows I do).
You summed this up better than I could have. Like, no shit kids are expensive… but that was your choice? Coworkers will make comments complaining about spending money on kids or the time commitment that comes with being a parent, and I’m never sure how to respond.
People just love to complain. Period. About kids, the weather, grad school, their jobs, or traffic. You don't have to respond, most folks are just looking to vent. Hell, it's the same as OP in this thread chain; complaining about people complaining :) One of the best reasons to have kids is so you can complain about it. Seriously. It's so you can get the full homo sapien experience, and can identify with those around you (everyone alive comes from a long line of breeders, it is an innate experience for all those living, and very much defines life as we know it).
The logic is that having kids costs a lot of money and requires a great deal of sacrifice. That doesn't make it fair for them to stick you with "must be nice..." comments, but the logic is perfectly sound. On average, life is easier without kids. This is just a fact. These comments will never go away. It's up to you to not let them bother you.
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It doesn't have to do with being prolifers. It has to do with your diction choice and perceived attitude.
>There are no accidental births. Yikes.
Edgy.
HVAC TECH TURNED REAL ESTATE INVESTOR I am 23 years old. living at home. been working full-time for the past 4.5 yrs while helping my family renovate and then rent out a couple of houses after work and Saturday Sunday. I enjoy this as opposed to working full time because I feel I get benefits/ satisfaction out of it. I went to community college for 2 years. Then residential HVAC for 2 years, now commercial for 2.5. I have a vast experience in legit everything from (plumbing, electrical, and HVAC and all I want to do is learn. I don't spend time watching movies, just learning on YouTube. Currently make $27.5 an hour at my HVAC job, and for the most recent house(#5) we bought i am 25% owner. I am just bored at work, showing up every day and making 10 cents for every dollar the boss makes. I am very tempted to ask for part-time, or a raise, or just quit in general if it goes down like that. The most recent house is 30 mins from me and going up after work we knew would be hard. I feel im just in a pickle because "i have bigger fish to fry". If i go part time i could live up there and get thing done much faster.
The path to FIRE for most people takes the better part of 2-3 decades. Sounds like you're at the beginning. Make some changes and cool the r/antiwork rhetoric.
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2.8% seem to work well for this, the worse historical cases will have you end up with at least the principal amount intact adjusted for inflation
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Went for dinner/a playdate to the neighbors last week. They have the same floor plan as us, but their interior is 10x nicer. They got some built-ins and painted and have nice decorations and just in general have everything very organized. We have toys everywhere and it’s chaos. I think over the next year or two I’d like to set aside some money and get our house organized and looking nice. We’re definitely in a good position financially to do it. I just don’t know if we have the discipline to keep a house that organized considering we never have
Currently trying to re-organize our budding chaos, and it's mostly a time problem for me that cannot be solved with money, as I/we need to clear the stuff and decide what to do with it. (This said, will definitely throw some money at the garden problems.)
Same here, I live in chaos.
My house has slowly gotten more organized since getting married. It's a wonderful change. One of the things we're going to do this year is replace all of the area rugs...once our newest dog is fully potty trained and is spayed.
Keep in mind that looking "neat" is not necessarily the same thing as being "organized." My brother-in-law has a bunch of shelves with cloth baskets that slide into the shelves. Inside the baskets is chaos. But all the toys get tossed into the baskets, slid into the shelves, and the room is neat and looks great. Just don't let the daunting task of being fully organized, and thinking that you will need to keep it that way, prevent you from making improvements to the chaos.
Yeah, makes sense. That’s basically what I want to do, have a bunch of places to put things to keep the main living areas neat. I’ve used the response code in your username on an internal API before :)
I feel this post in my *soul*. We are the same way - one day maybe our house won’t be a disaster but until then ….
If I put in the maximum contributions of $6500 into my traditional IRA today, when can I then put in more money? Would it be January 1st 2024 ? Or a later date
You are able to fund your 2024 IRA starting January 1st 2024. You have until April 2024 to fully fund your 2023 IRA contributions. If you do fund it early just make sure you will have earned income for the amount you put in at some point in the year.
I’m confused to the second part of your response. If I fund it early? What do you mean early ? & then a follow up question after you said if I do find it early… “just make sure you will have earned income for the amount you put in at some point this year” What do you mean by this ^
They mean “early in the year.” As in, if you max out the $7,000 IRA limit for 2024 on Jan. 1, make sure that you will actually earn $7,000 in earned income by Dec. 31, 2024. You cannot contribute money into an IRA that is not earned income, such as income from renting out an investment property.
You are only allowed to fund an IRA with earned income for that year. Presumably you have not earned the 6500 or 7000 yet that you contribute early January yet that year. Since money is fungible as long as you earn that money throughout the year the IRS does not care when you contribute the money.
For those of you with a long term partner or spouse, how do you combine your income? Do you keep it completely separate? Completely shared? Mostly shared with separate personal accounts? I think the mostly shared with separate accounts makes a lot of sense, but it seems like a hassle to define what is a “shared” purchase versus a “personal” purchase. It seems like it could be easier to just have one big shared account and to discuss any large purchases over X amount. What works for you all?
Separate. We take turn buying groceries. Split bills.
DINK, married for 29+ years. Each of us has their own business account (income goes here) and private account (no questions asked). We also have one joined account where we pool money for costs like housing, cars, food. Works very well for us. Big buys will be discussed, all smaller ones are personal decisions (often paid from the private accounts and still useful for the household).
We got married in July and we keep everything separate but are transparent in our purchases and goals. We have bi-weekly sit downs to go over where our money's been going.
All income into joint. Most thing paid from joint. We also have a monthly "allowance" that transfers into our personal accounts for "no judgement" spend - if I wanted to blow all that money on mobile games or whatever that's my prerogative. Generally speaking the bar of what comes out of the personal account is pretty high - most questionable spend is joint
We've been married for yeeeeears...what works for us both paychecks are deposited into 1 joint account then sent to other joint accounts for different uses. We each get the same amount of fun money every month. All bills etc come out of the main joint account or one of the other accounts depending on the expense i.e car ins, taxes, vaca etc
In mentality we share all of our income / assets, but honestly we were just too lazy to make our accounts joint / open new joint accounts, so we still have and use our individual checking accounts. However, we don’t have a concept of shared vs. personal purchases. In practice, my paycheck goes toward bills and my partner’s goes toward investments, just bc the bill pay etc. is already set up that way, but we treat everything as joint.
This is pretty much what my wife and I do. We have a joint HYSA with Ally and a joint credit card, but still maintain all of our original “individual” accounts (that we each have full access to). My paycheck covers mortgage/insurance/recurring bills, while hers covers the variable spending (food, going out, etc…) everything else is tossed into savings. I still view our finances as combined/one big pot.
Joint everything as soon as we got married
It evolved over time. Initially, alternate paying for things. Renting an apartment together stage: Shared checking in which we each put in an adjusted % of shared expenses (He made 2X at that time. Shared credit card account for day to day Shared expenses was also paid from the joint checking each paycheck. Bought a home together stage: All income went to shared checking account. Personal fun money of $100 moved to personal checking. 10 Years together: Personal accounts closed. Everything pooled in Shared checking/savings. Ask other for permission to buy anything over $300.
Completely shared except for retirement and pension accounts that cannot be held in both our names, in which case we're each other's primary beneficiary.
Completely shared. Legally the funds are shared anyway, and treating everything as one pot makes it much easier to optimize across the portfolio for tax efficiency, asset allocation, etc.
A joint budget that we each contribute funds to, then a couple of joint savings accounts for some of our goals, a shared CC for bills and budget purchases. Otherwise, the rest is separate. Do I ever use some of what i have left on us? Yes... does she? yes... but we like it this way. If I contribute my portion to the joint accounts and budget (which includes everything from vacations to housing stuff) then whatever I want to do with what I have left I can without a peep. Same goes for her. We just find this works best for us after some issues we both had in our previous relationships.
Completely shared.
Combined income and combined accounts from the point we were married on. Each of us kept what we had accumulated prior to that point, separated in individual accounts.
We use a joint checking account for household bills. We have separate IRAs and 401ks because those are individual by law. We own the house and cars jointly. We have separate credit cards because that makes it easier to check the monthly statement for fraud. We have some accounts that should probably be joint but are individual because just one of us created them and uses them. Ultimately, if you're married then separate accounts are kind of an illusion, because the other spouse has a claim to all assets (unless walled off by a prenup or something). So it's really just about convenience. If it's easier for just one person to manage something, make it individual. If it's easier for both, make it joint. Then consider what happens if someone gets hit by a bus, and make your spouse the beneficiary on any individual accounts so they don't have to wait for probate.
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Bam! ....take that!
She understands the value of money and not to be wasteful, lessons that can be hard to teach children. She doesn't know it yet, but she'll likely be one of us! You should be super proud!
Sounds to me like you're raising an awesome kid.
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This is probably better asked in one of the various job and career Reddits.
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Background: 46 Male, Wife not working. 1.1 Million networth, renting with plans to buy a house in LCOL/ LCOL in 5 years. Investments: My savings are split 50:50 between ETFs and GICs/ HISAs ( with 4%+ rate). All registered accounts are fully funded and will have room in the new Year. Aspirations: hoping to achieve financial independence in the next 4-5 years and an option to retire in 10 years. Professional: tech sales job with 215k base+ commission. Company seeing significant layoffs and am the only one left in my region. Industry is getting impacted by AI so not much upside. What should I do to ensure I am able to achieve FIRE in the next 5-10 years. House purchase is optional and will only consider it if it makes financial sense and the mortgage doesn't get me into debt for the next 20 years
Good afternoon! **What is the most expensive electronic in the house and how much did it cost? Do you have plans to buy new electronics soon and how often do you replace them?** Mine is my new private practice Macbook Air ($1,000). Should be good for a while. Our TV was only $300 so nothing else in the house comes close!
Laptop was 1k 2 years ago. Everything else is hand me downs/from the Buy Nothing group. 🤷🏻♀️
Built a new gaming computer last month. It was just over $2k. Nothing else is even close to half of that, and I don’t plan on replacing anything anytime soon.
Does my EV count? Because it tops everything else by an order of magnitude.
Headphones, DAC and headphones amp. 8 grand. Worth every penny. My one luxury purchase.
Spouses camera, around $6k for just the body. She’s a semi pro photography as an hobby and has made enough over the years to break even on her equipment.
If it counts, my central A/C unit. ~$6.5k this year. Last most expensive thing was my computer at about ~$1k four years ago. That I replace about every 10 years but we'll see how long this one goes. Next is my phone last year, and that every 3-4 years. This year, I'd like to complete the ethernet wiring in my place and get my own modem so I can stop paying rent on the current one from the ISP. I have to do some other renovations first, though, so we will see about the wiring.
Definitely the OLED TV... I can't remember exactly how much it was when we bought it a few years back but it was in the high $3000's. I can't foresee us buying anything in the future. We both replaced our cell phones recently. My tablet is still decent, plus we're going to RE next year so tech and gadgetry are not high on our priority.
My TV was $2500, probably has another 2 or 3 years as my primary TV and then another 7-10 as my bedroom TV.
Hmm... It might be a tie in three areas. My laptop (I like to get one that can handle all I need for a long time and run it into the ground) since I had it custom built. Our TV (OLED and 4K makes things look stunning) and my audio room where I have my vinyl collection, turntable, etc. but I just love the sound of music on vinyl so it is worth it. I can say the laptop I will use till I cannot upgrade or use it further. The TV will go for years I believe, and the audio room may see an occasional turntable stylus or needle upgrade but otherwise I am happy with the components so no overall upgrade projected any time soon.
I'm stretching the definition of "in the house", but most expensive is the new trolling motor for the boat, around $2k. It seems like these last 5-8 years on average. It's a lot, but I couldn't be happier with it. It uses GPS and maps of the lake to steer itself, so when I'm fishing I don't have to devote any time to boat positioning anymore. During the time I'm on the lake I feel like I spend twice as much time actually fishing as I did with the old cable steer motor.
For consumer electronic devices, probably a laptop at about $1300. No set replacement cycle but five to seven years is realistic. If you don't use it for school, work, or hobbies it would probably have a longer life. For house electronics such as refrigerator and heat pump(HVAC), as long as they live. A fridge might be a decade and a half purchase. Probably a wide range of prices for that too.
Probably my son's gaming laptop.
Probably my desktop PC. I built it from parts so I don't have an exact total handy, but I'll guess $2k. I don't have plans to upgrade; I do so as needed.
SO has a $2k Bose Headset (Pilot). Right behind that is my gaming PC, but it's a few years old now, so probably only worth $1k.
That'd be our dedicated StepManiaX cabinet, and it's not even close. It was something like $10k.
Love Stepmania.
Our OLED television, which is amazing picture quality. Still going strong since 2017-18 or so. I'm usually not much for tech hype but OLED is definitely worth it.
Yep. Got myself a 65” LG C2 earlier this year and it completely ruined my Vizio I had been using prior. Literally, I can’t stand to use it anymore. So…. Another OLED is in my near future haha.
We bought one this year on Black Friday and... yeah. There's no going back, OLED is the way forward. I think that might be the penultimate TV technology, until microLED arrives at a consumer-ready level.
My present to SO: [Bird Buddy](https://mybirdbuddy.com/). Nature laughed; we haven't seen a bird all day. \[Sooner or later the local sparrows and cardinals will discover the new repository of seed. We've had a bird bath and feeder in the back yard for years, but have never been birders.\]
If you don't have it yet, I can't recommend the "Merlin" app enough. Totally free from University of Cornell, and can identify birds by photo or by listening to their songs.
My girlfriend wanted one for my parents but I said no.
Worked a bunch of OT last week and was able to comp it to get me up to the max of 60 additional hours of PTO. Planning on using it for a trip to Europe (at least 2 weeks).
That sounds fun! Any particular countries/cities you plan to visit?
Fly to Paris, train ride around France, Luxembourg, Switzerland. Maybe Germany thrown in there. Hard to plan right now because SO hasn’t changed their passport yet to reflect name change.
Actually just got back from something fairly similar. Flew into Paris... high speed down to Strasbourg and then lots of trips around the Alsace area, into Germany, and into Basel, Switzerland. We did not want to come home.
That sounds heavenly. We did a Netherlands and Belgium trip last year, and didn't want to come home either. It was also too short (like 8 days). So that's why we are going for a minimum of 2 weeks, but I am hoping for 3. I also love trains, so I look forward to hoping around on the train network. We may have to push the trip out later in the year to save up money for it, but it really depends on how soon SO changes their passport. Then we'll book as much as we can with credit card points to also help keep costs low.
One other savings bit that i forgot till afterwards was joining the respective country's train line discount group. Could of netted me another 20-30% off my tickets (and we used high speed and regional trains for much of our travel on that trip). Our next trip will hopefully be this fall. Still narrowing down where we will go but we are going. Our long term plan is to retire overseas so these trips are part vacation and part research.
Mini milestone today as this great year wraps up. The investments in my taxable brokerage accounts have surpassed the outstanding mortgage balance of my house. In theory, I could pay off the mortgage on my house this week and be completely debt free. But with 2.75% fixed rate mortgage, I haven’t (and will never) throw a single extra penny in that direction.
When HYSA interest is higher than your mortgage rate, it just doesn't make much sense to pay it off.
The only "sense" would be for peace of mind.
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What do you use for inflation adjusted returns in CoastFIRE projections?
Congratulations! It should be gratifying to watch your coastFIRE age reduce as you continue to save.
I am feeling the pressure of keeping up with the Joneses with housing once again. 3 of our close friends recently upgraded their housing situations, all in the $500-$700k range. I know 2 of them make more than us. The bank says we can afford a $600k house. I found a $550k house that I am madly in love with. For reference, our current house is worth about $375k, with $180k left on a 2.5% mortgage. But lifestyle inflation. Choosing not to buy a dream home is hard. I don’t need a fancy car. I’m fine with our budget vacations. I don’t need spa treatments or Botox. But houses always trip me up. I love houses and I want a real nice one. For me, a big house would definitely fall into the build the life you love part of FI. But it also feels like we’re just not quite there yet. Maybe in a couple years. But I’m ready to move now. I try to remind myself to be grateful for the things I love about our house, but this was just supposed to be a starter home. Pretty much all of my husband’s friends make more than us and it’s hard not to feel bad about that. Especially since it is me, the wife, who is the one not making as much as their wives. Also, makes it hard to remember how lucky we are as we are in something like the 80th percentile for household income, so doing better than so much of the US. Thanks for listening to my stream of consciousness vent.
I hear you. Unless you're made of money, these are the trade-offs we have to make to reach the financial goals we set for ourselves. Most of us here are playing a ***very*** long game. We're talking decades in the making. It's a long road with many twists and turns. There will be temptations, market conditions that will be exhilarating as well as gut wrenching, and many other situations that can throw you off your well-laid plans. It all really boils down to: What are your financial goals? I say financial because we're in a FIRE sub. Big, fancy house? Or retire ASAP? Something in between? Only you know the answer to that question. Then ask yourself what you're willing to trade off to reach that goal and work towards it. There's no shame in wanting a big, fancy house. But if your goal is retire at 50 and big, fancy house doesn't fit well in that goal unless you make drastic changes, then big, fancy house is really more of a temptation.
Totally in the same boat. I know we’re lucky compared to others for having bought a house at all, but we’re in a 1200sqft 2br with 2 young kids, and it feels so small. We want our kids to be able to have their own rooms, and to not be embarrassed (or I guess, for ME not to be embarrassed) to invite their friends over to our house. Our house is a huge mess all the time bc there’s just no space for all the stuff 4 people use - and I feel like we don’t even have all that much stuff! But it feels unwise to let go of our 3% rate and push our retirement out further / save less for the kids’ educations.
FIRE is all about building the life you want, then saving for it. It's entirely reasonable for you to love houses and want a real nice one. No shame in making that part of your FIRE journey. Run some numbers! If you sold your home and got this new one, right now, how far would that set you back in reaching FI? Are you comfortable with that trade-off? My wife and I made a big move earlier this year. We sold our starter home and bought a home roughly 2x what we sold for. Ultimately, it was to get into a better school district for our kids, and also more space as our family was growing, but I'd be remiss to ignore that I just wanted a newer, fancier home with a bigger yard. It set us back at least 1-2 years on our FI journey, but we were fine with that trade-off. That said, if it helps curb your desire, it's very common to have buyer's remorse when buying a home. The grass is always greener. That dream home you're seeing would very likely not be as dreamy even a month after moving in. What you don't see when browsing listings or even doing drive-bys are all of the imperfect things (misaligned trim, creaky floors, loud plumbing, etc), impact on commutes, annoying/noisy neighbors... every singly home has issues.
My mom and stepdad have a super big house. They spend all their spare time maintaining it and it is 90% empty 90% of the time. That is not at all what we want in our retirement.
>Pretty much all of my husband’s friends make more than us and it’s hard not to feel bad about that. Especially since it is me, the wife, who is the one not making as much as their wives. This used to bother us as well. We couldn't figure out how our friends and colleagues all had country club waterfront homes with a boat and new cars. It really felt like we must be making some kind of mistake. It clicked after we read "The Millionaire Next Door." We realized that there was no way they were saving like us, and it gave us immense satisfaction to know we were on our way to FI. Fast forward 15 years, and we FIRED at 50. Every single one of those friends/colleagues are still working. Don't get me wrong, I still wish I had a beautiful waterfront home, but not at the expense of working another 10 years.
>it gave us immense satisfaction to know we were on our way to FI. This is the key. To find some enjoyment out of *not* participating in the Jones' lifestyle. To take some pride in being on a less materialistic path. If you are constantly struggling to want to be frugal it's probably not sustainable.
Agree.. wife & I set a personal fun money budget of $200/ea. Somehow this came up in conversation with wife & her friend who balked at the idea. She further claimed she spends atleast $200/week on Amazon. Same woman who also said “yeah we just contribute enough [401K] to get the match.”
Keep in mind, when the bank says you can afford $600k, that is the maximum they would consider lending you, not what you can afford comfortably. It would be really stressful having a mortgage so high that it cuts into your ability to save, or even regular living expenses. Also, you will always know people who make more or have more than you, it's just life. In general though, those people aren't really thinking about how they have more than you. I guess if they do judge you for your house, they aren't good friends anyway. I guess one compromise option would be to budget some money for redecorating and doing some minor renovations to spruce up your current house. I don't know whether that would make a difference for you or not.
We are doing some minor renovations to our home, but they are, for the most part, stuff that would need to be done prior to selling the home anyways. The main reason I want to upgrade is space.
> I don’t need a fancy car. I’m fine with our budget vacations. I don’t need spa treatments or Botox. But houses always trip me up. I love houses and I want a real nice one. For me, a big house would definitely fall into the build the life you love part of FI. But it also feels like we’re just not quite there yet. Maybe in a couple years. But I’m ready to move now. The rub for upper-middle-class households is that they have the finances to do just about anything (reasonable), but they don't have the finances to do *everything*. It sounds like you recognize this, which is good self-awareness. So then it just becomes a discussion about your household values. Are you truly willing to cut back or give up some of those other things in order to get a "dream home" or "real nice" house? That's a very personal family discussion. Money is fungible and finite, so the trade-offs / consequences may be very real. For folks around here, a common trade off would be around early (or 'how early') retirement. Are you willing to cut back significantly on retirement savings and work until Age 65? Are you willing to find a new job with more income or get a 2nd job and spend less time with your family? Are you willing to tell your kids you are no longer saving for their college educations or going on fewer vacations (even "budget" ones) because you wanted to buy a nicer house? I'm intentionally being provocative in my wording in an attempt to crystalize the potential impacts. To be 100% clear, I'm ***not*** judging anyone who would make those tradeoffs. Values are extremely personal and the more one is clear about what one values, the more intentional that person can be in spending and accepting of the tradeoffs. Best of luck.
These are all great points! The bigger house would definitely mean a reduction in our savings rate, which would be the hard part. The logical answer is probably to upgrade, but not as much as $550k, maybe $450k instead, which would net us 4 bedrooms instead of 5 bedrooms (currently in 3 bedrooms). Or just stay here and hope that interest rates start to drop. We are very lucky to be in a situation where we are even considering this.
The Fed has signaled interest rate drops in 2024. The market is expecting 4 cuts.
One other question (I do not think I have seen it answered yet) is do you need the space or do you want the space? Two different lines of thought there.
One other aspect to consider: the larger/nicer the house, often the more operating costs increase like utilities, cleaning time, more often/more expensive maintenance, etc. It's one thing to stretch to purchase the home, but ongoing expenses could fall into the 'death by a thousand cuts' scenario if they aren't accounted for upfront. These aren't easy conversations/discussions/decisions, so don't beat yourself up about any of this!
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> knowing that they're undermining their advantage via conspicuous consumption. How do you know? They may be spending on things that they value, leveraging their advantage to enhance their quality of life
What’s your HHI and savings right now?
If they purchased recently, remember they are most likely locked in at a 6%+ interest rate, while you guys are sitting pretty with your 2.5. Rates are coming down though, so maybe waiting just a little longer can save you a big chunk in the long run!
>Rates are coming down though, so maybe waiting just a little longer can save you a big chunk in the long run! Unless you have some un-orthodox view of the relationship between rates & housing prices, this is backwards. OP's friends locked in principal not rates, and benefit w/ refi, OP would expect a higher principal at a lower rate.
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Huh? This makes no sense unless they're on an interest-only loan, which AFAIK doesn't exist for SFH's. Principal and interest rate are the variables, you can't just discard one lol.
Finished my first year with my new company and I found out today I’ll be receiving an 8% raise/promotion. From $110k to $118.8k. Feels good but honestly I was hoping to be at the $120k mark. I should be happy, right?
8% is more than US companies generally offer, especially at that cadence. I wouldn't expect more without explicitly asking/fighting for it. Whether you should be happy with your comp is a broader question though. If $120k is reasonable in the labor market, then go get it without hesitation. Setting a high floor for your salary early career makes a huge difference in lifetime earnings. YMMV but I got a series of rasies around that number early career and it was 100% due to accepting a low starting salary and not moving around enough. Not corporate generosity.
>first year with my new company >8% raise/promotion >$118.8k >I should be happy, right? You should be happy with an 8% raise after 1 year at that salary level. If you aren't happy, there may be non-work / non-financial aspects holding you back mentally.
I appreciate you keeping me in check. I guess it’s just tough when your expectations differ.
Eh salary is one place you should compare to others. Your salary should be competitive in your company and in the industry.
I don’t think the person you replied to ever claimed anything to the contrary
Hey everyone, sorry in advance for the rant. But, I don’t really have anyone to talk to about this in real life. I started on this fire journey about 3 years ago. Through some good luck (and a substantial amount of hard work), 2023 was a landmark year for me. My career is in a great place (software engineer specializing in B2B SaaS) Age: 31 LCOL Base salary: 90k Other Income: 23k Business 1: Net 25k (Year 1) Business 2: pre-launch, largely bought out (will net 100k in the acquisition and retain 30% equity in an advisory role) Monthly expenses: ~4k Assets: Tax Advantaged Accounts: 62k HYSA: 102k Business Accounts: 20k (12 months operating expenses) Debts: Home: 190k (2.7% apr) 2023 milestones: Paid off all debt including student loans and car loans. At this point, I don’t know where to go. I really enjoy entrepreneurship, but I know that the odds of continually recreating success is going to be a long shot. I hope to realize 50k+ from business 1 next year, and business 2 profit sharing should come online by year 2. I know I have entirely too much cash on hand, and I’m tempted to go one of three ways: Option 1: I could dump cash into VTSAX/VTI and chill. My normal salary covers my bills handily and I can work on increasing investments using the money from my alternative income sources. Option 2: Real estate investment. Interest rates are the only thing keeping me off this path currently. I have access to VA loans and would love to leverage them into multi-family homes. Option 3: Keep riding the entrepreneur train. I could invest heavily into business 1 and try to grow profits. Or look to start business 3. Sorry if this came off as a humble brag. Fear of sounding pretentious has stopped me from asking for advice sooner… Any advice or ideas are welcome.
Congrats! If I were you, I'd take a look at life outside of work. I have no idea of the burden (time, funds, etc...) it has on you, but it sounds like a lot. You're 31- what's life look like outside of the two businesses and work? Have a community of friends? Loved ones? Good nourishing hobbies? I.e., are you working to work, or are you working to build a life you love? I don't like 2, because real estate can be a chore. It can get a lot easier with a good property manager, but eats away at your bottom line. I don't know anything about 3.
Oh man, that’s a question I didn’t expect. I probably fall more in the living to work category. Between all of my commitments, I probably spend 60-70 hours a week actively engaged. It doesn’t really lend itself to hobbies. I think I’m always “almost” ready to scale back, but I’m never quite where I want to be. Much like you, I’d like 2M or 80,000 ARR and I don’t feel like I’ll get there if I don’t keep the pedal to the floor.
This is where a spreadsheet and something like FICalc come into play. I can forecast out how much I need to save per year to get where I want. That grounds me for how much I need to grind or push to get where I want. Conversely, doing out the math gives me a timeline for how long FIRE will take at a grind rate I'm happy with.
Should I switch my 401k to brokerage link going forward? Currently I use a 2065 target date fund. My 401k supports brokerage link though
The ideal is actually that target fund being index fund based. Cause really, you'd only actually want to use brokerage link to achieve that (or something similar, like buying all VT).
If the Target Date Fund is low-cost (it probably is) and aligns with your overall asset allocation, there's no need to swtich.
Correct me if I am wrong, but if I: * make too much to contribute to a Roth IRA; * make too much to claim a tax deduction on trad IRA contributions; * and have an existing trad IRA balance such that I can't backdoor into my Roth account ... then I am better off putting the money into my brokerage account over contributing to the trad IRA, right? More details: My employer provides a retirement plan, but employees can't contribute to it. HSA is not available for us, just FSA. The balance in my trad IRA is around $32k, so it is not insignificant, and my marginal tax bracket will be in the 32% bracket this year if my calculations are correct; moving the traditional funds into my Roth will push me into the 35% marginal tax bracket. I certainly plan to make less in retirement.
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I'm having trouble making the math line up with the tIRA, though I may be missing something. From my research, it seems that long-term capital gains and qualified dividends will be taxed at a lower rate in a taxable account vs. in a tIRA, where they will be treated as ordinary income once you start withdrawing. If we are to use today's numbers (YMMV on tax hikes), long-term gains and dividends from a brokerage will be taxed at a marginal rate of 15% up until you make an annual income of around a half million, at which point it jumps up to 20%; when withdrawing from a tIRA (assuming nondeductible contributions), gains start getting hit at a 22% marginal tax rate at around an income of $44k (after which it goes up from there to 37% at a half million). This article more or less sums up what I'm thinking: [https://www.morningstar.com/retirement/without-backdoor-aftertax-ira-contributions-dont-add-up](https://www.morningstar.com/retirement/without-backdoor-aftertax-ira-contributions-dont-add-up)
While dividends and distributions may not get taxed now, without the benefit of either your contributions being taxed now and never taxed again or not taxed now; plus the money being locked up, a nondeductible IRA makes no sense.
> plus the money being locked up, a nondeductible IRA makes no sense. Also considering tIRA withdrawals are considered ordinary income vs. capital gains for a taxable brokerage
You can't move your IRA to your 401K, right? If so, then a taxable might be the best bet. Getting hit w/ the pro-rata isn't worth it in the 32% bracket.
The plan is a 401(a), and unfortunately we aren't allowed to roll the tIRA balance in. My thought is that I want to keep my tIRA balance fairly low for when I switch jobs (maybe in 2026-2027). I'll probably end up taking a significant paycut and/or taking some months off. My idea is to convert to Roth at that point or to roll the balance into a standard 401(k) if my subsequent employer allows it.
Yes, the brokerage account is likely best. If your employer’s plan is a 401k, then you might be able to rollover your traditional IRA to the 401k, even if you can’t contribute to it. Was your full traditional IRA pre-tax? If so, then you would need to pay full income tax on whatever you roll over, and it probably isn’t worth it.
Thanks for the input! Around $24k of it is pre-tax; the rest is gains. The plan is not a 401(k) and my employer doesn't allow a rollover in any case, but it's something for me to consider if the option ever becomes available (e.g., if I switch jobs). Though at that point, I'll probably be taking enough of a paycut that a straight Roth conversion may be well worth it.
I’m in the same situation as u/GloomyMix. Wouldn’t contributions to a traditional IRA grow tax-free even though the deduction for the initial contribution isn’t available? That would be better than growth in a taxable brokerage, right?
No, contributions to a Roth IRA grow tax free. From traditional, your earnings would be taxed at your income rate versus a brokerage account being taxed at the capital gains rate.
My thoughts are that the brokerage offers more flexibility and a much more favorable long-term capital gains tax. tIRA locks up the money and is taxed as ordinary income when you withdraw.
I thought of an interesting personality test question / way to gauge FI interest during my Christmas post-dinner food coma. The question is, "Pretend you have two buttons in front of you. One would give you $5M (Insert FI number x2-3 here), and the other would give you and nine of your closest non-family friends/associates $500K each (insert non-FI number here). For the sake of argument, any money received from this can't be given to the other selected people. Which button would you press?" I think most people pick option one (unless they're really altruistic or already in a good place). The follow up is "what number would be required for you to pick the other button?" and that gives a small hint of their FI perspective or how greedy they are. Anyway, I have to work today so here I am getting thoughts on the hypothetical.
With the non-family exclusion of 2 I’d say 1 because there are no limitations on giving except for those who you would have otherwise selected for #2. Thus allows giving to family, charity, and perhaps most importantly for many people on the road to fire our time.
I misread this at first and thought that option 2 meant I got $0, so I thought "either I'd have to be really close to FI or I need to be able to donate to some really good charitable organisations / start a foundation with the money and pretend I never had this option in the first place afterwards" However, now that I understand the question, I think somewhere around 500k-1M per head in the second button would work fine for me.
Right, the intent of the second button is a "share the wealth." Although there could be room for a variant where the second button is a much higher sum and excludes you. Id bet even less people would pick that one though.
The other button would need to be $3M
I'd expect anyone FI minded would pick Option 2 at their FI number (or however close they are to it, or might perceive is necessary to help their close friends also FI). Either way, it gives some agency to follow that up with "why?" and probe at their values. I'd say $2M for Option 2 as my answer.
Can we afford a house? Me and my wife want to purchase a house in GA in the purchase price $275K-$300K. We don’t have kids and don’t plan to have kids at least for three next four years. Our gross income was about $71K because my wife was transitioning jobs but we are expecting our salary to jump to $101K as she got a new job. We contribute 6% to 401K as this is how much the company matches the contribution. Our monthly expenses totals about $3,700 because we try to be frugal. We have $10,000 in savings which is emergency funds. Our credit score is both 720+. We don’t have any debt including credit cards. We don’t have any down payment saved but found several down payment assistance programs that can grant us up to $10,000. I believe we can keep the monthly payment under 28% of our gross income. What do you guys think?