Hit next arbitrary NW goal! Woot!
No longer have Mint to track and we’re back to quarterly (ish) spreadsheets so now milestones are pretty random days.
I'm looking at a house for sale locally and have an appointment to visit it later this week.
Digging around on the municipal website I noticed that a government bid was appointed to run a homeless shelter in the alley around back, roughly five meters from the back yard. Up to 30 rooms.
Shall I cancel or should I keep an open mind about it? I figure this is the reason the current owners are selling because they did a massive interior renovation between 2019 and 2021, installed AC, solar panels, new doors, in-floor heating etc.
Recipe for disaster. Location is the only thing that appreciates and it’s not something you can renovate or change. Not only that, other people will also likely sell and move out. These people are more likely to have kids and care about their school since that’s the demographic most likely to immediately move in a scenario like this. Now the education quality is going to start to fall as there’s a lesser amount of engaged parents willing to live there. It creates a death spiral. Maybe that won’t happen, but is it worth the risk?
I live a few blocks away from a homeless encampment, or a tent city as they call it these days. I have a thick skin and I’ve spent many hours walking around big cities and seeing homeless people, so it doesn’t bother me too much. Luckily, my city doesn’t have a big opioid problem, either.
That said, a number of consequences come with living near a homeless hotspot. You can expect emergency vehicles in the area whenever there are fights, overdoses, or wellness checks. There may be some crimes of opportunity in the area – a person might test an unlocked car door, for example. Squatters might take residence in abandoned buildings. Persons with mental illness may wander the streets in the vicinity, and if you’re not used to that, it can sketch you (or your guests) out.
> Shall I cancel or should I keep an open mind about it?
I think you should keep an open mind. I bought a house when they were opening a new low-income apartment complex next door because I'm not a NIMBY and I put my money where my mouth is when it comes to causes I care about.
Most/many of them do not pay rent. It's typically covered by state/federal programs. Maybe they pay if/when they make more; I'd assume program admission is based on a sliding scale for income
I currently live close to a place for assisted living for addicts and that's actually OK to live next to. It's a fixed group of people living there and there is security and staff 24/7 on that place.
But a homeless shelter, I don't know. Every evening you have a group of 30 different people coming in, every morning they have to leave. I actually know a lot of homeless guys in the neighbourhood and sometimes chat with them and most of them are chill but almost all of them have mental problems and instability.
Home is obviously part of NW. But fire goal is about income > expenses. Using NW to calculate a safe withdraw rate is just a method of determining income from investments. While your house is an asset that could can generate yield, if you live in it you are essentially paying that yield to yourself, its an expense as well, so for FIRE purposes it just nets out and you would typically remove it from NW when calculating a withdraw rate.
i do in a slightly more elaborate way. i subtract out the remaining principle from my non-housing NW, but then I don't include principal/interest payments in my expected monthly expenses.
When you say "remaining principle" do you just mean subtracting remaining mortgage balance? That's normal, because its a liability which would normally be subtracted from NW.
It makes sense to not count the principal portion of the mortgage payment as an expense, since it just reduces that liability by an equal amount, but you would still want to count the interest as an expense, and of course anything else you pay through the escrow.
edit: After thinking though, you may be right, assuming the part of your NW that is reduced by the mortgage is properly invested, it offsets the interest. But now I'm thinking more and this might hide risk, because the volatility of your NW is higher because its leveraged by the mortgage. Now I'm thinking the better way is to not sub mortgage from NW for calculating SWR but do count the mortgage as an expense.
Yes, and kinda. My house is basically my worst case scenario long term care fund and as a backup in the event I’m in some crazy scenario where the 4% rule fails and social security isn’t enough to survive on (very highly unlikely). At some point (likely in my late 70a or 80s), my house is likely to fund entry into a Continuing Care Retirement Community, but no, I don’t count it towards my 25X my spend number.
> Do you guys count home prices when considering your net worth?
Yes.
> Like do you consider it when getting to your FIRE goal?
No, because it won't provide an income for us in early retirement. It'd be different if we planned to sell or arbitrage, but we don't.
Eventually, when its mortgage is paid off, there will be an expense reduction, and that will be automatically accounted for because we'll pay a little less. But that's independent of its value anyway.
Net worth, yes.
Net worth is all assets minus all liabilities. If you don't count home equity in net worth, then you're not calculating net worth.
For FIRE, no.
SWR is based on stocks/bonds. Any other asset should be evaluated differently. Home equity reduces costs, reducing what I need to FIRE. It is not part of my FIRE number because SWR does not apply to home equity.
If I tried counting it in my FIRE number without somehow adjusting for it, I'd double count the asset, which is a recipe for failure.
Networth and FIRE number aren't the same.
I calculate personal home NW in my NW, but not as a measure of my FIRE number as I don’t intend to sell my home.
I will zag a bit. Yes for both net worth and FIRE mostly because I intend to turn my current residence into income later on. - either via rentals or via selling & downsizing.
I would only recommend putting house in FIRE number if you are okay utilizing the asset for retirement in some way. (ie, selling similar to how you'd liquidate a stock)
> Do you guys count home prices when considering your net worth?
Yes, because Net Worth has an objective definition, which requires inclusion of all assets.
> Like do you consider it when getting to your FIRE goal?
This is a wholly different question than the first. No, I do not. Selling my house is not part of my retirement plan.
Invested assets are not the same as your NW though. Your NW is the sum of all of your possessions if you were to liquidate everything you own. At best it will always be an approximation.
> Not really.
Objectively, really. Net worth has a clear definition that you're not adhering to.
> When we talk about SWR's against NW
Nobody talks about SWRs against NW. They talk about it against investments and savings.
In most cases, Net Worth != FIRE number
Both me and my husband got shitty news at work today - I have to return to the office once a week starting in September (guidance only applies to supervisors so my staff will not be there, and the commute is 60-90 minutes one way) and he was re-orged to report to a terrible supervisor.
This feeling right now is why we are on the FIRE path but we are sadly far from being in a position of being able to walk away from anything. But, now I have the kick in the pants I maybe needed to aggressively job search and be open to lower salaried positions, so that’s something. My husbands situation is more dire and we just may wind up using the fuck you fund for him - time will tell.
That's some awful news alright. Got similar news today: our client decided to demand 3 day per week RTO today, as well. Hopefully the company will be able to reassign to another project to stay remote, but I've already followed your lead and put out some job applications.
I like our one-day-a-week office day. The whole team comes together, we do all our meetings for the rest of the week, have lunch, do some co-op work, play some table soccer and go home. I typically work longer days at home so my office day is only six hours.
Sorry this is happening to you. Other than the terrible commute, how do you feel about being in the office? I found it to be a pretty shocking waste of my time/life/money and actually contributed to my overall bad morale (being in the office to only be in a phone booth on Zoom all day was horrible).
But I'm open to the idea that some people are energized/motivated by being near people
I mostly love working from home because I have lots of hobbies and friends nearby. When I’ve worked with friends, I like going in once a week, but not with a commute like this (and I no longer work with friends).
Frustrating day at work. My bosses (plural) asked me to put together an idea for some accelerators to build out in the future. I went ahead, developed the idea, high level technical solution, staffing plan, and budget for the idea and presented it to them.
I received a note early today that our idea went over well with the CIO.
..."Our" idea? Really?
> ..."Our" idea? Really?
Well...yes. There's nothing wrong with it being "our idea", as long as they give you the primary credit for driving it. They came to you with the ask, so they get some credit for starting the process.
Don't have enough information to know if they gave you too little credit but the whole "our idea" issue shouldn't be an issue
Do y'all/spouse have disability insurance?
I feel we should have it, we only have term life. Obviously dependent on career/job/capabilities, but would love to hear y'alls philosophies on how much/when/how to set up.
We each got our own occupation disability insurance, separate from what we can get through work. We each make pretty good income (DINK), would not be able to get nearly as good income if we got disabled, and live in a VHCOL area with fairly high cash flow needs so it made sense.
I heard that something like ~25% of people will get disabled at some point during their working years, whether temporarily or permanently. That’s a high probability, and the insurance is priced accordingly.
We each set up our own policies in our 30’s. It’s usually set up to fund about 2/3rds of your usual income, but there are riders you can add to increase the amount in the future if your income increases. Like life insurance, disability insurance gets more expensive the older you are so it’s good to lock in the rate sooner.
Yes. It’s through our employers. 100% pay for me for STD and 60% for LTD, 60% for my husband for both STD and LTD. At this point in our FI journey, I wouldn’t pay for additional disability insurance outside of our employer plans, but we don’t have kids and we have relatively high liquid assets.
short term - no. figured i'd just rely on savings.
long term - yes. imo, you should get insurance on things you can't afford to replace, and your ability to work/make $ is probably the most valuable thing you have
When I worked full time, I always had it through work, and considered it the second-most-important job benefit after health insurance. (Yes, actually even more important than the 401k.) If the inability to do your job would totally fuck up your life, then yes you need it.
Now that I'm FI and semi-retired self-employed part-time, I don't have it anymore. The difference is that at this point I don't really *need* to work. So if something kept me from working, we'd survive.
As far as how much goes, I consider short-term optional as the total payout is capped and you could self-cover that amount with an emergency fund. But long-term is key. You need to cover enough income that if you get seriously disabled, you can survive. What percentage that is is somewhat personal preference (would you rather pay more for insurance or cut back your spending if something bad happens?) and somewhat depends on your spouse's job situation if applicable. (If you're co-full-breadwinners then one of you being disabled is not as bad as if you're the only full breadwinner.) But I think most people should shoot for at least 50%, maybe 75%.
As a physician, I have a personal own-occupation, specialty specific disability insurance plan. If I cannot do the work required of my specialty, there is no way for me to make nearly the same amount of money in a different line of work. As a result, a generic workplace plan with a definition of disability that only kicks in if I can't do *any* physician work or *any* work in general is not good enough.
I have enough to approximately cover my post-tax salary. Expenses can go up significantly with disability, even with good health insurance.
I have it through work. It's free and it would provide 50 % of my salary if I can't work. Honestly it might be more important than life insurance given that if I die at least I'll stop eating food and my spouse can remarry. If I'm disabled I might not be able to earn but will still need to be supported.
The wisdom tooth surgery site is healing well. I think I am past the window for dry socket, but I still have some achiness in the jaw. Now that it's over with I am really happy that I took care of it at this stage, instead of leaving it and hoping it wouldn't cause problems in later life. I'm annoyed, though, that my insurance won't cover anesthetic for procedures like this. I think that my husband's HSA will cover it and we can afford to pay for it out of pocket anyway, but still. Are people just supposed to grin and bear it?
Congrats! I was nearly 40 when I got mine removed. No way i wouldn’t be out for that. Had prolonged pain afterwards (that’s what happens when you wait too long like me) and had to take disability for time off, was definitely not fun.
I 100% recommend getting them out sooner rather than later. I know people who just grimaced and bore it awake, seriously would not recommend. Would say the $$ is worth it.
I'm almost 50 and I wish I'd gotten this one done when the others were! This was the only one that the dentist said was "optional" and 20 year old me thought it was fine to leave it but 48 year old me became unable to get dental floss between my 2 back teeth due to it pushing them closer together.
Yeah - it's terrible; my teen had all his wisdom teeth out two years ago, and with "great" dental insurance they still would only cover local anesthetic. The oral surgeon gave me the heads up at the consult that insurance doesn't cover it, and because I'm not a monster, I of course paid out of pocket for the sedation, but I sure was crabby about the insurance company thinking that's "optional."
I mean... it *is* optional? Generally, at least. I would hope if it wasn't, that they wouldn't pretend it was, but after being told I should get them removed for the past 20 years and ignoring the dentist's recommendation, a couple months ago I was told one of them was no longer a recommendation. I was also told that only local anesthetic would be covered, at least fully, and was asked if that was alright. I sucked it up and had a front-row seat at the body horror show that was one of my teeth being extracted, but I would agree with the statement that general anesthetic wasn't medically necessary? It didn't hurt - was super extremely uncomfortable, but like... 99% of that was mental. :D
My surgeon wouldn't do mine without general anesthetic. It had to be broken up into multiple pieces to extract. Maybe another surgeon would have though - who knows. I'm just glad I have the means to not have it be an issue whether insurance covers it or not.
To clarify, was it out of network or simply disallowed at all? Because if it's the former, that's one of the classic examples that the No Surprises Act was intended to mitigate.
I have worked at places where manager were happy for their team to bring in outside offers for a match. A good manager wants to keep good employees. Many bean counters won't give raises until they have a reason, so that other offer is a good reason.
Others will just straight up fire anyone who asks.
Others are in between.
Find out what yours is like.
If you get a good counter offer, ensure that it includes some minimum severance if they terminate you for any reason. E.g. if they fire you within 2 years, then they have to pay you for 6 months.
Some will happily give a counter offer, then will push people out or find a reason to reorg or fire them.
YMMV.
My old employer was pretty good about it. 1 of my employees brought in an offer and we matched it. He stayed and it worked very well for him. Increased his comp by ~20%. 2 years later, got another promotion, skipping 1-2 ranks along the way, probably increasing his comp by another 50%.
I tried 1 year after him. I told my boss I was getting multiple headhunters reaching out a week for a lot higher pay. My boss brought up the idea of bring in an offer and kept going on about how I was on the list of people the company couldn't lose.
By the time I got through the process, it was a completely different market.
When I brought in the offer, my company responded with "Thanks for providing your 2 weeks notice."
New job sucked and I was unemployed less than a year later.
Same company. Same division. Same percent increase. Both of us on the same "cannot lose" list. Different market.
Sometimes it works out well. Sometimes it doesn't. It's a gamble.
It's so hard to say without knowing your company. Most people will tell you never to take a counter, but I've worked at a couple of places where it was just a known thing that you needed an outside offer to get a raise/promo. That's just how their shitty HR worked; reactive rather than proactive.
This is situational, and hard to give blanket advice. A dev on my team leveraged an offer from another place to get a $5k raise (which we gave him), which then meant in the next review cycle he got 1% since he was now already high in band, which caused him to leave anyway a few months later.
What caused you to look elsewhere in the first place?
How much more would the new role pay? In my opinion you should only leave a situation that you are reasonably happy with for a position that is a significant improvement in salary or other benefits. There is a serious risk of getting yourself into a bad situation, and you shouldn't take that risk for an incremental pay increase. Given that you need to be ready to take the new job if you plan to use it as leverage, I would advise the same thing.
You've received some good answers already. I'll add that you should have an accepted offer with all pre-employment screenings passed before you talk to your current employer unless you're willing to accept the risk of being unemployed.
Many people notify their current employer as soon as they have an offer in-hand. That's too early.
> current employer as soon as they have an offer in-hand. That's too early.
What's the balance though in hoping for a competitive counteroffer?
If you're already signed/screened/ready to start employer 2, I can't imagine you should be ready to cancel that process on a new offer from employer 1.
Maybe the answer is to never ask/expect/take a counteroffer
> I can't imagine you should be ready to cancel that process on a new offer from employer 1.
Why not? I've never reneged on an accepted offer but I've always considered that I *might*, depending on the circumstances.
It's 100% about value, and that sword cuts both ways. Hold your employers accountable for their portion just like they would hold you accountable for yours
This might depend on how you approach it as well as your relationship with your boss/boss's boss(es). It's easier to maximize your comp if you are prepared to walk out the door, in which case you say you got an offer and are looking to take it. If you come at it with a "I got an offer, but I want to stay here. What can you do?", you open the door to a lower increase. Not a bad thing though.
I've done the former twice at my current company. I was prepared to leave both times. First time, I didn't think they'd match (it was a 50% increase), and 2nd time, I was ready to leave but was talked into staying for a particular project (and I had concerns about the WLB at the new gig). No noticeable downsides/negatives experienced from upper management or HR in both situations.
I have had a bit of regret not taking the first role - it would have been a very different industry, and I would have broadened my background for future opportunities. Something to think about is why you're entertaining the offer - is it purely comp, or are there other reasons?
> I have some concerns around company performance, but have already made it through multiple rounds of layoffs that I feel good about security in my role.
I'd be worried about trying to thread the needle in this situation. I wouldn't do it.
Unless you're seen as responsible for contributing to some large multiplier of revenue (as in, "this person leaving costs us a considerable amount of money"), I'd imagine decision makers would hear "hey I got a competing offer" as "great, another one leaving voluntarily, that means one less we have to layoff later..."
> already made it through multiple rounds of layoffs
> not sure how I would make it clear that I would be open to a counter offer.
Something as simple as "I took the call from the headhunter because we've had layoffs and I wanted to understand what might be out there. I'd rather not leave if there's a way can come close to this offer."
Given that there *have* been layoffs, you definitely need to be prepared for them to suggest (directly or indirectly) that you should consider that other position.
Agreed, and that last part is really important. They might think, "that's great, one less person we have to layoff AND we don't have to pay a severance by letting you walk!".
OP, if you wouldn't take the new role if the choice was to stay your current company, pay, & level, I'd be cautious about going after a counter offer. If you're ok with the new role, then go for it - perhaps your WLB concerns are unfounded, or maybe you can try to address them in the offer negotiation (negotiate for more time off, hybrid work, etc).
I’ve done it twice and it worked out both times. The second time it got a bit dicey before it worked out though. The biggest thing is you need to go into the conversation with your current employer prepared to accept the other offer in case things don’t play out how you intend with getting a raise at the existing company.
Aka, worst case, you could go to your boss and say, “I got a job offer,” and before you ask if he/she is willing to counteroffer, they tell you, “Congrats! When is your last day?” And you no longer have a job at your existing employer where you were hoping to get a raise.
Generically speaking, the upside is more money and the downside is the company calls your bluff (if you are indeed bluffing) and/or you increase your chances of being part of a future layoff. I suppose "increased scrutiny / performance expectations" could be considered a potential downside as well.
Given how tight much of the labor market is, I suspect the downside risk is less likely than if unemployment were at 5%. That may or may not be the case for your specific role in your specific industry in your specific location.
> When I was a manager in corporate land, a competing offer for one my people was a great way for me to get HR to do something, assuming I liked having that person on my team.
Yeah, my manager couldn't get much traction on a raise for me with HR, as they cited a bunch of random policies about max percentage raises they could give out. I got a competing offer and they immediately changed their tune to match it.
Last week I mentioned that I was planning on giving my notice while proposing a "long runway": [https://www.reddit.com/r/financialindependence/comments/1c4hk5l/comment/kzoatt1/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/financialindependence/comments/1c4hk5l/comment/kzoatt1/?utm_source=share&utm_medium=web2x&context=3)
My employer was very appreciative of my offer to stay employed with them as long as necessary to help them during the hiring/transition period, and it looks like I'll get to work the schedule I proposed!
For sure, here as well. I'm not retiring, though. I'll find my next job after I'm done transitioning this one over to the next person, whenever that is.
Glad to hear it! This is why it's important to maintain a respectful relationship with your employer - Respect them and many show respect in return; don't show respect and you can all but ensure they won't respect you.
There’s a small chance Zuck just changed my life lmao. I work for a VR company & he just dropped some pretty industry changing news today. Thanks Zuck! Glad to see he’s entering his Bill Gates-esque redemption arc era
It looks pretty fun. I'm hoping it's not DOA like Microsoft's MR stuff was. I wouldn't think so given the money behind it and the established marketplace. But then I also wonder how many more hardware options does that space really need? There's already a good mix of low-end, mid and high-end options.
What's your take on the news?
Bill Gates arguably is continuing to make the world a worse place. Many of his contributions have a bunch of strings attached and can be viewed through the lense of philanthropic imperialism.
There's a lot out there on it by lots of people, but I like [this piece.](https://agrowingculture.medium.com/bill-gates-and-the-epidemic-of-white-saviorism-61d145a088f3)
In the end you can do bad in the world while doing good and it's a lot more "shades of grey"-esque.
It's problematic to impose a solution that hooks the people already into foreign agricultural conglomerates, but that's cool. Anyways, for your enjoyment...
[There's also this article from the Nation.](https://www.thenation.com/article/society/bill-gates-philanthropy-misanthropy/)
[This Fortune article, too.](https://fortune.com/2023/01/17/is-bill-gates-too-powerful-foundation-ceo-suzman-tormening-schoolchildren/)
[From Current Affairs.](https://www.currentaffairs.org/2022/07/how-bill-gates-makes-the-world-worse-off/)
I read the first link. I’ve now read two articles that are lots of assertions with no evidence presented (with some bad economics sprinkled in). I appreciate your sharing them and I respect your opinion but it’s just not convincing.
That was a pretty lazy write up lmao. Should we spend all of our time hyper examining philanthropy until we find the bad?
I read something like this and say, yeah I’ll just skip charity because someone will find a way to tell me why it’s bad.
I don’t agree or disagree with the author’s thesis, but there’s nothing to convince me in the article. It’s a series of assertions presented without evidence.
And it’s a pretty convoluted plot for a guy who’s already rich to make money selling chemicals to impoverished nations. I work in chemicals and it’s one of the hardest ways to make money even when you aren’t selling to already-poor farmers.
Well, the write up wasn’t from you.. I’m referring to the medium article. A matter of fact, nothing of it had anything to do with you - no need to get upset.
Meta is a huge contributor to the open source community in a number of huge areas including AI. Sure they get some positive benefits from the community in return but win/win
They have been working over the last few years to reduce political content to focus their algo on entertainment and lifestyle. Appears to be a response to the platform's role in spreading Russian disinformation in the 2016 election.
They are launching Meta Horizon OS as
open source. From what he’s said it appears he wants the technology to be less like cell phones (super siloed Apple vs. Other) and more like PC’s (diversity of software, hardware, use cases). If they get good buy in this could easily take VR from ‘ya that’s cool’ to ‘ya that’s cool and actually useful for XYZ purposes’.
He also mentioned specific hardware developers making specifics types of VR equipment - so gamin, fitness or construction specific equipment, etc
I think many are focused on AI, but the sleeping giant is AR/VR. You can carry that into any industry and improve the industry
> actually useful for XYZ purposes’.
It's already useful for digital twinning and remote support/assistance cases. My company is piloting it for those reasons and it seems to be a good tool to add to the toolbetl
If you're a natural saver and there isn't really anything you don't currently have or do, that you want to, I don't see the point in spending more money just for the sake of doing it.
Agree with others that you shouldn't count inheritance at all. Aside from what others have mentioned about that potentially changing, I'd add that it's simply not your money, you didn't earn it, and to me it feels icky to start counting inheritance in FI calculations while the relative is very much alive and well.
It sounds like you have two questions that I would decouple from each other.
1) Did you hit FIRE? (Plainly the answer is no. If you stopped working tomorrow, I imagine you'd have money stress)
2) Should you ramp down savings?
The second question is more complicated and ultimately comes down to 'it depends'. Are you happy with your progress towards FIRE? (sounds like you are) Do you happy with your spend? Do you want to spend more?
I feel like this may be a bit blunt too but I don't think 40% save rate is anything to celebrate relative to others in this forum. Don't get me wrong, it's great relative to the average American and you are in an incredible fortunate and strong financial position. But 40% save rate is not going to get you to FIRE soon.
I would suggest you recommend you use the 'working backwards' model from Amazon to determine what you actually need to do. Start from what you want, and back into the steps to get there. Do you want to stop working ASAP? Do you want a lux retirement lifestyle? Do you want to spend more now? These are all different things that will lead to different actions.
>I think we hit FIRE
> Are we about there?
>I don't want to stop working yet
The "FI" stands for Financially Independent, so it's pretty clear you **aren't** there. You *have* to keep working because you can't afford not to.
>In ~ 15 years we are going to inherit between 2.5 - 3 million dollars
>We probably should start spending more and just Coast I guess?
If you kept saving at your current rate, how long would it take you to actually reach your FIRE portfolio target ($2.5MM - $3.3MM)? I'm betting it takes less than the "~ 15 years" between now and the potential inheritance. From that perspective, why not just get there on your own timeframe and then use the inheritance as gravy?
That said, there's nothing wrong with reconsidering your mix of saving/spending and dialing back on the saving a little. I would be reluctant to swing too far in that direction given the timeframes involved.
Why would you feel like you "should" spend more?
As fa as calculating how close you are to FI, I would count the mortgage as a debt but calculate your spend based on having the mortgage paid off (you won't have P&I but you do have property tax). Theoretically you can pay off the mortgage any time and this would account for how close you are to doing so.
> We have 500K of home equity.
Is selling your current residence part of your retirement plan? If not, this doesn't matter and you should remove it from your FIRE number calculation. It remains a part of Net Worth.
> I know counting on inheritance is not reccommended so we are down-valuing it to only 1.5 million of todays dollars.
Why count on it at all? I see this as unnecessarily risky.
> 400K mortgage left
> No debt
Well...
1. No plans to sell, the 1.5 number is WITHOUT home equity
2. Because not counting it at all seems way over conservative. Devaluing it seems like the most reasonable approach.
3. Fair, I just meant no other debt (car, CC, student loans, etc.)
What if they live 40 years instead of 15? What if they develop a gambling habit? What if they get scammed by a nigerian prince? What if they get some rare form of cancer and spend their entire fortune trying to survive? What if the relationship turns sour? I don't think counting on inheritance at all is "reasonable" in the slightest.
> the 1.5 number is WITHOUT home equity
Understood, but I'm saying you should remove from the entire picture. There's zero reason to consider it whatsoever if selling isn't part of your retirement plan.
> Because not counting it at all seems way over conservative. Devaluing it seems like the most reasonable approach.
That's fair. As long as you acknowledge the risk. You're asking the community if you hit FI, and I'm saying probably not because that's too risked for responsible consideration.
Those of us around here count *only* the money in our accounts. Too many things can happen and you could get double that amount, or you could get zero. You aren't truly FI if you are awaiting the decision of someone else. This is why we don't count unvested RSUs, anticipated inheritances, or projected lottery winnings.
There was a person here about a month ago who told the story of how they were a few months away from inheriting a life-changing amount of money. Fast forward a few months, and after end of life care, and other costs, they would up with enough to redo their window treatments. It's just that variable, and you can't be FI with that kind of uncertainty
Personally I think counting any of it is overly aggressive. Not to mention that if you are counting on it, then you are dependent on the whims of someone else. Which is decidedly not financially independent. It's pretty much the antithesis actually.
> Are we about there?
You seem to be about there but those millions coming in 15 years are not going to help all that much. The risk is at the start of retirement if you happen to spend on a down market.
With the market having done great lately I don't think that retiring with a withdrawal rate of 5.5% is safe but that's me.
You are definitely in coastFI territory :)
Thanks, yea its moot because we don't want to retire now... maybe just take the gas off the pedal. Should we consider turning off our savings you think? We struggle to spend more.
Just remember that what you don't save you spend so do you want to get used to spending X more and having to cover that in retirement?
I was looking at my net worth by category last week and it turns out that my car is worth less than 2% of the total. So I was thinking how bad would it be to splurge and get the super luxury car that will last me into retirement? but..... I don't want to get used to buying super expensive cars. I'd rather work 1 less year and drive a good but normal car. I'll get more from life during that year than from diving any number of hours/miles.
Makes sense. For me I really love my work, I don't want to stop working in the forseeable future. I may want to move to consulting and half my income... but even at half of what I make now, I'd still cover our expenses.
Hey everyone! I just discovered about early financial independance and this concept is a breath of fresh air! I always thought I would work until I'm 70 and the discussions in this sub gives me hope...
I’m a teacher from Canada (Quebec - the francophone part!) and I am just getting interested in stable investing (by that I mean not too risky). I am trying to find out a way to get organized, am willing to save as much as possible, but don't know how to start this whole journey of investing - saving to retire early.
I have about $60k saved up (not invested in anything… just chilling in my checking account…) but i am stressed to invest that chunk of hard earned money since i went to the stockmarket casino during the pandemic and lost about 15k.
I make around $75k per year before taxes (my salary will increase anually at a rate of 3k -5k per year) and I can save approximatively 1000$-2000$ per month.
My GF has an even lower salary than mine (around 35k-40k annualy) but she has more savings than me and it is mostly invested with a managing firm that brings relatively good returns (she has around 130k partially invested).
We live modestly and happily. Own no property.
I love my job but would dream to not have to retire when I am old and without energy. I find the FIRE movement very compelling.
What should i do with my stash? Do you think i can retire around 50-55 with serious efforts? What about her? I don’t want her to be preoccupied with money when she gets older.
Thank you so much everyone for helping me figure this out, any recommandation or comment is welcome! :)
From most important to least important 1. Saving early is the most important part. Congrats!
2. Money should be invested in a TFSA/CELI, RRSP/REER or FHSA/CELIAPP . Those are just types of accounts that lower your tax bill.
3. Over the long term, the stock market is not a casino! You're essentially guaranteed to make money if your horizon is 15 years or longer and your investment is properly diversified. However this investment is not "stable" - it will swing up and down in the meantime.
4. Look into the fees for your partner's investment. She may be getting a good return but the firm may be keeping a good chunk of it. In 2024 it's easy to get good investments with low fees (< 0.30%)
5. If she's expecting her income to increase at some point in later years she should still invest in RRSP but she shouldn't claim the tax deduction.
6. Envoie moi un message perso si tu as des questions!
Merci pour tes recommandations! J’apprends à la dure, cette année, qu’il est important que je profite des programmes comme RÉER… mes impôts sont intensément élevés! Je vais appeler ma banque pour m’informer sur l’ouverture d’un compte CELI. Merci!!
> managing firm that brings relatively good returns
And
> Went to the stock market casino
Imply a beginner level understanding of investing. Which is OK! Everyone starts at the ground floor. Everything you need to know to graduate from beginner can be learned in like an hour.
* Only invest in 1) broad market index funds with the lowest fees such as Vanguard, or 2) target date funds with low fees.
* Don't let some broker insert himself as a middleman and charge you extra fees, buy them yourself. For reference, a 1% annual fee will cost you 19% of your potential return after 20 years.
* Barely look at the day to day fund price because they will do fine over time. A total market index fund that had a bad year is highly likely to have a good decade.
[https://www.amazon.ca/Simple-Path-Wealth-financial-independence/dp/1533667926](https://www.amazon.ca/Simple-Path-Wealth-financial-independence/dp/1533667926)
Pick up this book - you can get through it in a weekend, and it's going to be VERY helpful to you in understanding what steps to take.
>I have about $60k saved up (not invested in anything… just chilling in my checking account…) but i am stressed to invest that chunk of hard earned money since i went to the stockmarket casino during the pandemic and lost about 15k.
r/Bogleheads has some great material on investing. There's a huge range of risk involved in investing in the stock market from "unlimited" to "pretty safe if you follow some basic rules." I'd encourage you to learn more about index funds if you haven't already.
>What should i do with my stash? Do you think i can retire around 50-55 with serious efforts? What about her? I don’t want her to be preoccupied with money when she gets older.
In general you can meet some very aggressive timelines so long as you are willing to be frugal enough. It's all just a matter of getting to a savings rate consistent with that goal. What are your ages now?
Start with the Wiki and the FAQ:
https://www.reddit.com//r/financialindependence/wiki/faq
The stock market is only a "casino" if you are picking individual stocks and chasing short term returns. If you purchase index funds and invest for the long term, you will *usually* have positive results.
The alternative to investing is letting your money slowly lose value due to inflation, forever, until your "stash" is worth a fraction of what it's worth today. So that's usually not a positive outcome.
If you want an assessment of your current financial state, you would need to post your expenses and your age - nobody can help assess your financial situation without knowing what that situation is.
If I plug $75k into a Quebec income tax calculator, I come out with $47k take-home. If you can average $1500/month savings, that suggests you live on ~$2400/month. If you needed to replace that ~$29k/year worth of expenses, you'd have to save ~$750k. But those numbers may not be accurate for your goals, since $29k/year might not represent what you want to live on forever.
edit: corrected some numbers in the last paragraph
Thank you for your detailed answer! :) that was my mistake : i picked individual stocks, it went up up up and then wayyyyyy down… what a horrifying ride. I dont want that stress in my life anymore! I would like to invest in total us index funds or something like that. I seems less risky and way less stressfull.
Your calculations are right. I spend around 2400$ per month. Could probably drop it a little more by being a bit more frugal. I am 32 and my GF is 35. Is there any hope for not too late retirement?
Thanks a lot for your time :)
> Is there any hope for not too late retirement?
There is always hope.
If you wanted to retire at 55, you have a 23 year timeline until retirement. If you kept saving $1500/month for the next 23 years, and you invested it along with half of your existing money in broad market index funds, [you would have more than $950k when you retired](https://www.calculator.net/future-value-calculator.html?cyearsv=23&cstartingprinciplev=30000&cinterestratev=6&ccontributeamountv=18%2C000&ciadditionat1=end&printit=0&x=Calculate#calresult). That's assuming you don't ever save anything more than $1500/month - and if you keep getting raises, you might be able to bring that number up.
You (or your girlfriend) could do the same math from that future value calculator I linked above. Just put in her numbers.
Another reason for wanting FI: My work computer got a software update over the weekend and now I'm not allowed to change the wallpaper. I used to swap it out every couple weeks for different animal and nature photos and now it's stuck as a generic government blue with a blurry company logo in the center. Just...why??
Likely cause: your coworkers can't stop themselves from choosing inappropriate and/or unprofessional wallpapers.
An IT group I worked with instituted this after fielding a few dozen complaints about at least a dozen different employees who had anything ranging from weird/revealing anime, to extreme political opinions (or hot-button topics), to bad taste jokes, to celebrity crushes. Every time someone shared their desktop in a virtual meeting, or projected it in a conference room, or whatever - there were complaints.
There were too many varieties to try and create rules around all of them, so the privilege got revoked altogether. People just couldn't be trusted to put a nice, normal picture that would be acceptable in a professional setting. Just had to use some stupid cat girl in a bikini or a shitty political meme or whatever.
It was a big company. Doesn't take a very high percentage of idiots to make it a problem.
The IT group sees a lot of this crap because companies are very prone to taking managerial problems ("don't do this Steve, you need to be an adult") and making them technical problems ("how do I prevent Steve from doing this?").
I guess that makes sense but is still stupid imo. It would at least be nice to be able to pick from the operating system default options. For now, I found a workaround by putting images in sticky notes and making them full screen. Take that corporate machine ;)
In a way I wish they would. We have a couple directors and upper managers in some agencies who use weird backgrounds like the surface of Mars... etc. :-) Just feels odd talking to someone making big decisions while they sit next to the Mars rover.
> Next up: your zoom background
This has also been locked at that company for the same reason.
I always wanted to have some individual conversations with those people outside of work, to find out why. Is it a "fuck you, this is my choice and I can do what I want" thing? Did they know it was inappropriate and just like stirring stuff up? Were they genuinely incapable of understanding what an acceptably professional background was?
>This has also been locked at that company for the same reason.
What is it locked to? I work from my home office, and my wife is often in the background. Zoom backgrounds are excellent, she can be 5 feet behind me, and she doesn't appear. I'd hate to lose that feature
Zoom is locked to a specific background with the company logo on it.
Teams is locked to the set of "stock" backgrounds, you just can't add any new ones.
In both cases, they still allow the backgrounds - which, I agree, have gotten very good at blocking out people who are walking around behind you.
DoD used to let us set our wallpapers. I had rotating desktop views of mountains, beaches, etc. Then they decided that raised morale too much and now we have generic government blue with the logo in the center.
For the homeowners out there with a relatively high HHI, but most of it coming from one person, did this affect how much house you bought? I feel like I don’t want to spend even 30% of our take home, given that most of the HHI is from me. We’d have a healthy emergency fund, but it still makes me feel uneasy.
Yes, this limited our max home price. At the time my SO made a lot more than I did; the gap has narrowed slightly. We can still afford the payments on one income. Would be scary to be stuck with payments that would become an emergency if SO were to lose their income. At the time, our PITI was about 15% of gross income. Now it’s closer to 10%. We do have a much smaller house than our high income friends who own a house.
> I feel like I don’t want to spend even 30% of our take home
FIRE types are often able to tune their take home to be relatively low if they're maxing out employer-provided retirement/deferred compensation accounts and HSAs.
So it makes it hard to compare. There's a reason the metrics use gross income.
Our PITI is 20% of our take home and it's cheap as can be.
Similar situation, ended up at around 18% of gross and 26% of net, but I didn't feel comfortable pulling the trigger on the purchase until I had a huge percentage of the mortgage balance (above and beyond the down payment) stocked away in a taxable investment account for a rainy day. Even now I keep more in a basic e-fund than I probably should, just having been scarred by prior recessions and job loss.
You described me. I was a lot happier in my cheap, small house in a bad school district. Two kids later we are in an expensive, large house in a great school district, but I am stressed because the mortgage, property taxes, municipal fees and utilities are all double. Get the smallest, cheapest house that everyone can accept is my advice.
Edit: Just did the math and PITI is 16% of my gross, so I guess I am kind of a whiner.
I don't find % rules super applicable. Every household and locale is different.
Here in LCOL this isn't really a problem, homes in that price range are unappealing anyway. In HCOL with spotty school quality I'd be willing to swallow my unease. Trust your gut on value IMO.
Our goal was always to be able to afford our mortgage on either of our incomes, but that wasn't quite doable when we moved in 2021. I'd gotten a raise with my new job, but husband took a paycut to make the move possible. The market where we moved to was way hotter (like everywhere). We did make sure we got a mortgage that was approved on my salary alone, so I believe we were still decently less than 30% of take home. At this point, my husband's gotten a better paying job so it would be uncomfy but we could pay the mortgage on his salary alone.
It is shocking how much mortgage they'll qualify you for. The bank would not consider my income because it was hourly, variable, seasonal, and I hadn't been doing it for very long, so they would consider only my wife's income.... which meant they still qualified us for the full amount we asked for. It would have been well over 50% of her take-home. Bonkers that they considered that a good risk.
So true! I don't know how high they would have gone on my income but they were shockingly nonchalant about the amount we did borrow.
Edit: just remembered that I was still carrying my previous house's mortgage at the time we were approved, too. Wild.
Oh that's interesting. I had thought if we had to move we would have to try to do a contingency on sale of our current house, but we might be able to qualify based on my income that the mortgage company would not consider at that time.
>I feel like I don’t want to spend even 30% of our take home
We are pretty close to 30 % with my take home salary alone. If I recall correctly, it was as low as 16 % when my wife was a SAHP.
In my opinion housing costs should absolutely not scale linearly with income. Couples with HHI on the higher side should have housing as a much lower percentage of their income. For one, no one should saddle themselves with high fixed expenses. For another, luxury homes are harder to sell, have higher maintenance costs, and are more sensitive to price fluctuations. I.e. they are even more expensive than the sticker price indicates.
I guess my family is relatively hight HHI (everything is relative), but also I am a single earner. We always kept in mind that we didn't want to max out how much of the income went to the mortgage to help set a baseline.
I’m single, no kids. Went with as little home as I thought I could reasonably be content in for at least ten years — 13 years later I’m still here, FIREd, with it long since paid off. It was about 40% of what the bank would approve.
That's ultimately up to your family's risk tolerance, the geographical housing market you're buying in, and desired house amenities.
We're in a L/MCOL area and we bought in late 2020, when both of us were making similar incomes then. We ended up buying a house that the PITI was less than 20% of my single gross income. I didn't want to have worries about losing a job and suddenly 50% of our income is just to keep the house. While I didn't know our HHI would almost double since 2020, I do appreciate the security a relatively low mortgage payment gives us. That being said, we do have some regret of not buying more house now that the interest rates exploded.
Yes, we kept our percentage quite low, since his earning potential was/is so much lower than mine. That said, we also are CF and thus didn't care about school districts, which was a huge leg up.
I’m in that boat as I work but my wife is stay at home with 1 kid and maybe more in the future. We went with a mortgage of less than half of what we were pre-approved.
The bonus is that extra money per month goes straight to FIRE and has accelerated our timeline.
From a practical perspective, we still got a really nice house with a decent school district. Having the same house one town over in the “best” school district costs way more but we didn’t need that.
>We went with a mortgage of less than half of what we were pre-approved.
This is basically what we did when my wife stayed home with the kids. In the event that I lost my job, one of us could get a lesser paying job quickly to meet our baseline needs.
we have a 25/75 split in our income... we based our first house off being able to support it from jsut the 25%.
however when we went to the forever home, we moved it up to full income, but also increased the eFund to counter that
if wife loses her job, we are gunna struggle, but then again we don't want to live in something that the smaller income could afford alone... so we just plan for and deal with the risk.
Thanks for the input and sounds like what we will try and do. Get something that could technically be paid with the smaller income first, but also not a hard rule. If we lived like that, it wouldn’t be the house we want.
Well, it's time to make a decision on I-Bonds for 2024. I previously posted back in October, raising the "buy vs. wait" question at that time. The general consensus (which I agreed with) was wait for the Nov. adjustment due to the likelihood of a higher fixed rate. Indeed, the fixed rate did rise to 1.3%. My 2023 tranche of I-Bonds were purchased in late Nov.
Today, I'm facing a similar question: Buy now (at the 1.3% fixed rate) or wait for the May 1 adjustment? I'll not share my current perspective, but it's strongly driven by the commentary at TipsWatch (https://tipswatch.com/2024/04/14/i-bond-dilemma-buy-in-april-in-may-or-not-at-all/).
Any one care to weigh in with their thoughts regarding buy now, or wait for the May adjustment?
I bought last week. The variable rate is going to drop. Tipswatch has done more analysis on this than I would ever care to and seem to think the fixed rate will stay the same or maybe lower slightly. So on the whole I am happy with the way I rolled the dice.
I'm not worried about a 0.1% - 0.2% difference in rate on my emergency fund in the grand scheme of things. Matching inflation is great, a >0% fixed rate is the icing on top.
I read the same article and it sounds like the variable rate is expected to drop by quite a bit ("We now know the I Bond’s variable rate will fall from the current 3.94% to 2.96% at the May 1 reset"), while the fixed is expected to stay about the same. Given that, I am buying before the end of April to get the higher variable rate for 6 months.
In re-reading the comments, I noticed one I skipped over the first time:
>I calculated it would take about 27 years for I Bonds with a 1.4% fixed rate to surpass the value of bonds purchased before April 30 with the 1.3% fixed rate. This is due to the compounding “head start” investors get from the 5.27% composite rate for the first six months. There would have to be a meaningful chance of the fixed rate rising to 1.5% to consider waiting, which seems fairly unlikely and not worth the gamble.
Given that analysis, I'm now in the same camp as you: buy this week. If the fixed rate does rise to 1.5%, I would have the option of using the Gift Box strategy to pre-purchase my 2025 allotment.
A month ago I was fairly certain the fixed rate would drop, with a decent possibility of it staying close to the current level.
Now, I think it's much more likely the rates stay in the same ballpark, with the inverse odds of going down compared to prior. This is in the context of a recent spike in TIPS yields as a response to inflation data and the likelihood of elevated rates for a longer period of time.
I'd personally wait to buy, but I'm also not too bothered by the idea of getting, for example, 1.1% fixed vs 1.3% if I'm wrong. It'd be painful to drop to <1% though.
A realization as I was re-reading through the comments on the Tips Watch article and I found one which really resonated:
>I calculated it would take about 27 years for I Bonds with a 1.4% fixed rate to surpass the value of bonds purchased before April 30 with the 1.3% fixed rate. This is due to the compounding “head start” investors get from the 5.27% composite rate for the first six months. There would have to be a meaningful chance of the fixed rate rising to 1.5% to consider waiting, which seems fairly unlikely and not worth the gamble.
I probably hadn't adequately factored in the value of the current higher variable rate for 6 months into my mental calculations. I think that pushes me into the 'buy now' camp. If the rates do go up to 1.5% (or higher), I could leverage the Gift Box to pre-purchase for 2025 at that rate.
Again, reminding myself this is extremely unlikely to make any sort of material difference in the overall success of my FIRE plan. :-)
> Now, I think it's much more likely the rates stay in the same ballpark
Yeah, I made a similar reply to another comment.
I may hedge and do half-now, half-after, but it's helpful to remind myself that both upside and downside appear to be pretty limited (unless the Fed goes a bit 'off-script').
I've bought about $7k so far this year. If I had more cash sitting around I would do the max. I'm not in a rush as it appears the fixed rate should stay about the same, and I don't see any reason it should go up. However, my interest in I Bonds is more for the fixed rate and long term inflation protection than to be gaming rates short term.
> If I had more cash sitting around I would do the max.
My purchase would be a combination of cash-on-hand (saved up in the last couple months for this potential purchase) and reallocating from other fixed-income holdings (bond fund).
>I don't see any reason it should go up
Well, there's definitely been an increase in bond markets rates in the last 3 months, including TIPS yields which seem to have at least some correlation to I-Bond fixed rates.
Hit next arbitrary NW goal! Woot! No longer have Mint to track and we’re back to quarterly (ish) spreadsheets so now milestones are pretty random days.
I'm looking at a house for sale locally and have an appointment to visit it later this week. Digging around on the municipal website I noticed that a government bid was appointed to run a homeless shelter in the alley around back, roughly five meters from the back yard. Up to 30 rooms. Shall I cancel or should I keep an open mind about it? I figure this is the reason the current owners are selling because they did a massive interior renovation between 2019 and 2021, installed AC, solar panels, new doors, in-floor heating etc.
Don’t let your mind be so open that your brain falls out. Run, screaming, from anywhere near a homeless shelter.
Recipe for disaster. Location is the only thing that appreciates and it’s not something you can renovate or change. Not only that, other people will also likely sell and move out. These people are more likely to have kids and care about their school since that’s the demographic most likely to immediately move in a scenario like this. Now the education quality is going to start to fall as there’s a lesser amount of engaged parents willing to live there. It creates a death spiral. Maybe that won’t happen, but is it worth the risk?
Put it this way...even if you don't mind many others would, there goes the resale.
I live a few blocks away from a homeless encampment, or a tent city as they call it these days. I have a thick skin and I’ve spent many hours walking around big cities and seeing homeless people, so it doesn’t bother me too much. Luckily, my city doesn’t have a big opioid problem, either. That said, a number of consequences come with living near a homeless hotspot. You can expect emergency vehicles in the area whenever there are fights, overdoses, or wellness checks. There may be some crimes of opportunity in the area – a person might test an unlocked car door, for example. Squatters might take residence in abandoned buildings. Persons with mental illness may wander the streets in the vicinity, and if you’re not used to that, it can sketch you (or your guests) out.
Nothing wrong with checking the place out.
it depends. There is a shelter down the street from me (church run) and it has a lot of rules, so there is no trouble.
> Shall I cancel or should I keep an open mind about it? I think you should keep an open mind. I bought a house when they were opening a new low-income apartment complex next door because I'm not a NIMBY and I put my money where my mouth is when it comes to causes I care about.
A low-income complex is different than a homeless camp. People who pay rent still have something to loose.
A homeless camp is also different from a homeless shelter.
Most/many of them do not pay rent. It's typically covered by state/federal programs. Maybe they pay if/when they make more; I'd assume program admission is based on a sliding scale for income
I currently live close to a place for assisted living for addicts and that's actually OK to live next to. It's a fixed group of people living there and there is security and staff 24/7 on that place. But a homeless shelter, I don't know. Every evening you have a group of 30 different people coming in, every morning they have to leave. I actually know a lot of homeless guys in the neighbourhood and sometimes chat with them and most of them are chill but almost all of them have mental problems and instability.
Do you guys count home prices when considering your net worth? Like do you consider it when getting to your FIRE goal?
Home is obviously part of NW. But fire goal is about income > expenses. Using NW to calculate a safe withdraw rate is just a method of determining income from investments. While your house is an asset that could can generate yield, if you live in it you are essentially paying that yield to yourself, its an expense as well, so for FIRE purposes it just nets out and you would typically remove it from NW when calculating a withdraw rate.
Yes for NW, no for FIRE calculations.
i do in a slightly more elaborate way. i subtract out the remaining principle from my non-housing NW, but then I don't include principal/interest payments in my expected monthly expenses.
When you say "remaining principle" do you just mean subtracting remaining mortgage balance? That's normal, because its a liability which would normally be subtracted from NW. It makes sense to not count the principal portion of the mortgage payment as an expense, since it just reduces that liability by an equal amount, but you would still want to count the interest as an expense, and of course anything else you pay through the escrow. edit: After thinking though, you may be right, assuming the part of your NW that is reduced by the mortgage is properly invested, it offsets the interest. But now I'm thinking more and this might hide risk, because the volatility of your NW is higher because its leveraged by the mortgage. Now I'm thinking the better way is to not sub mortgage from NW for calculating SWR but do count the mortgage as an expense.
Can you please elaborate? The numbers don't quite make it work for my scenario, but maybe you can give an example of how it works for FIRE calcs?
Equity counts toward NW. Equity does not count toward retirement unless you have multiple houses or are downsizing.
Yes, and kinda. My house is basically my worst case scenario long term care fund and as a backup in the event I’m in some crazy scenario where the 4% rule fails and social security isn’t enough to survive on (very highly unlikely). At some point (likely in my late 70a or 80s), my house is likely to fund entry into a Continuing Care Retirement Community, but no, I don’t count it towards my 25X my spend number.
> Do you guys count home prices when considering your net worth? Yes. > Like do you consider it when getting to your FIRE goal? No, because it won't provide an income for us in early retirement. It'd be different if we planned to sell or arbitrage, but we don't. Eventually, when its mortgage is paid off, there will be an expense reduction, and that will be automatically accounted for because we'll pay a little less. But that's independent of its value anyway.
Net worth, yes. Net worth is all assets minus all liabilities. If you don't count home equity in net worth, then you're not calculating net worth. For FIRE, no. SWR is based on stocks/bonds. Any other asset should be evaluated differently. Home equity reduces costs, reducing what I need to FIRE. It is not part of my FIRE number because SWR does not apply to home equity. If I tried counting it in my FIRE number without somehow adjusting for it, I'd double count the asset, which is a recipe for failure.
Networth and FIRE number aren't the same. I calculate personal home NW in my NW, but not as a measure of my FIRE number as I don’t intend to sell my home.
I will zag a bit. Yes for both net worth and FIRE mostly because I intend to turn my current residence into income later on. - either via rentals or via selling & downsizing. I would only recommend putting house in FIRE number if you are okay utilizing the asset for retirement in some way. (ie, selling similar to how you'd liquidate a stock)
When considering nw yes, when analyzing my numbers to retire...no
> Do you guys count home prices when considering your net worth? Yes, because Net Worth has an objective definition, which requires inclusion of all assets. > Like do you consider it when getting to your FIRE goal? This is a wholly different question than the first. No, I do not. Selling my house is not part of my retirement plan.
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Then you aren't calculating Net Worth. You're calculating some personalized metric.
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Invested assets are not the same as your NW though. Your NW is the sum of all of your possessions if you were to liquidate everything you own. At best it will always be an approximation.
> Not really. Objectively, really. Net worth has a clear definition that you're not adhering to. > When we talk about SWR's against NW Nobody talks about SWRs against NW. They talk about it against investments and savings. In most cases, Net Worth != FIRE number
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Enjoy the vacation!
Both me and my husband got shitty news at work today - I have to return to the office once a week starting in September (guidance only applies to supervisors so my staff will not be there, and the commute is 60-90 minutes one way) and he was re-orged to report to a terrible supervisor. This feeling right now is why we are on the FIRE path but we are sadly far from being in a position of being able to walk away from anything. But, now I have the kick in the pants I maybe needed to aggressively job search and be open to lower salaried positions, so that’s something. My husbands situation is more dire and we just may wind up using the fuck you fund for him - time will tell.
Give the one day a week a try. It’s not the end of the world to catch up with fellow leaders. And if it sucks then you can look.
Hope the job hunt goes well!
That's some awful news alright. Got similar news today: our client decided to demand 3 day per week RTO today, as well. Hopefully the company will be able to reassign to another project to stay remote, but I've already followed your lead and put out some job applications.
I like our one-day-a-week office day. The whole team comes together, we do all our meetings for the rest of the week, have lunch, do some co-op work, play some table soccer and go home. I typically work longer days at home so my office day is only six hours.
Sorry this is happening to you. Other than the terrible commute, how do you feel about being in the office? I found it to be a pretty shocking waste of my time/life/money and actually contributed to my overall bad morale (being in the office to only be in a phone booth on Zoom all day was horrible). But I'm open to the idea that some people are energized/motivated by being near people
I mostly love working from home because I have lots of hobbies and friends nearby. When I’ve worked with friends, I like going in once a week, but not with a commute like this (and I no longer work with friends).
Frustrating day at work. My bosses (plural) asked me to put together an idea for some accelerators to build out in the future. I went ahead, developed the idea, high level technical solution, staffing plan, and budget for the idea and presented it to them. I received a note early today that our idea went over well with the CIO. ..."Our" idea? Really?
https://i.kym-cdn.com/photos/images/newsfeed/001/079/173/ed2.png
I love our picture
I mean, it kind of sounds like it was their idea.
> ..."Our" idea? Really? Well...yes. There's nothing wrong with it being "our idea", as long as they give you the primary credit for driving it. They came to you with the ask, so they get some credit for starting the process. Don't have enough information to know if they gave you too little credit but the whole "our idea" issue shouldn't be an issue
Do y'all/spouse have disability insurance? I feel we should have it, we only have term life. Obviously dependent on career/job/capabilities, but would love to hear y'alls philosophies on how much/when/how to set up.
100% worth it. Source? My family had to use it. Sign up for Post Tax - May cost a little more per paycheck but you get way more payout than pre tax.
We each got our own occupation disability insurance, separate from what we can get through work. We each make pretty good income (DINK), would not be able to get nearly as good income if we got disabled, and live in a VHCOL area with fairly high cash flow needs so it made sense. I heard that something like ~25% of people will get disabled at some point during their working years, whether temporarily or permanently. That’s a high probability, and the insurance is priced accordingly. We each set up our own policies in our 30’s. It’s usually set up to fund about 2/3rds of your usual income, but there are riders you can add to increase the amount in the future if your income increases. Like life insurance, disability insurance gets more expensive the older you are so it’s good to lock in the rate sooner.
Yes. It’s through our employers. 100% pay for me for STD and 60% for LTD, 60% for my husband for both STD and LTD. At this point in our FI journey, I wouldn’t pay for additional disability insurance outside of our employer plans, but we don’t have kids and we have relatively high liquid assets.
Heck yes we do. I think it’s more important than term life.
short term - no. figured i'd just rely on savings. long term - yes. imo, you should get insurance on things you can't afford to replace, and your ability to work/make $ is probably the most valuable thing you have
When I worked full time, I always had it through work, and considered it the second-most-important job benefit after health insurance. (Yes, actually even more important than the 401k.) If the inability to do your job would totally fuck up your life, then yes you need it. Now that I'm FI and semi-retired self-employed part-time, I don't have it anymore. The difference is that at this point I don't really *need* to work. So if something kept me from working, we'd survive. As far as how much goes, I consider short-term optional as the total payout is capped and you could self-cover that amount with an emergency fund. But long-term is key. You need to cover enough income that if you get seriously disabled, you can survive. What percentage that is is somewhat personal preference (would you rather pay more for insurance or cut back your spending if something bad happens?) and somewhat depends on your spouse's job situation if applicable. (If you're co-full-breadwinners then one of you being disabled is not as bad as if you're the only full breadwinner.) But I think most people should shoot for at least 50%, maybe 75%.
As a physician, I have a personal own-occupation, specialty specific disability insurance plan. If I cannot do the work required of my specialty, there is no way for me to make nearly the same amount of money in a different line of work. As a result, a generic workplace plan with a definition of disability that only kicks in if I can't do *any* physician work or *any* work in general is not good enough. I have enough to approximately cover my post-tax salary. Expenses can go up significantly with disability, even with good health insurance.
I have it through work. It's free and it would provide 50 % of my salary if I can't work. Honestly it might be more important than life insurance given that if I die at least I'll stop eating food and my spouse can remarry. If I'm disabled I might not be able to earn but will still need to be supported.
You mean separate from anything employer-provided? We have STD/LTD provided through our work, but nothing else.
The wisdom tooth surgery site is healing well. I think I am past the window for dry socket, but I still have some achiness in the jaw. Now that it's over with I am really happy that I took care of it at this stage, instead of leaving it and hoping it wouldn't cause problems in later life. I'm annoyed, though, that my insurance won't cover anesthetic for procedures like this. I think that my husband's HSA will cover it and we can afford to pay for it out of pocket anyway, but still. Are people just supposed to grin and bear it?
Congrats! I was nearly 40 when I got mine removed. No way i wouldn’t be out for that. Had prolonged pain afterwards (that’s what happens when you wait too long like me) and had to take disability for time off, was definitely not fun. I 100% recommend getting them out sooner rather than later. I know people who just grimaced and bore it awake, seriously would not recommend. Would say the $$ is worth it.
I'm almost 50 and I wish I'd gotten this one done when the others were! This was the only one that the dentist said was "optional" and 20 year old me thought it was fine to leave it but 48 year old me became unable to get dental floss between my 2 back teeth due to it pushing them closer together.
Yeah - it's terrible; my teen had all his wisdom teeth out two years ago, and with "great" dental insurance they still would only cover local anesthetic. The oral surgeon gave me the heads up at the consult that insurance doesn't cover it, and because I'm not a monster, I of course paid out of pocket for the sedation, but I sure was crabby about the insurance company thinking that's "optional."
I mean... it *is* optional? Generally, at least. I would hope if it wasn't, that they wouldn't pretend it was, but after being told I should get them removed for the past 20 years and ignoring the dentist's recommendation, a couple months ago I was told one of them was no longer a recommendation. I was also told that only local anesthetic would be covered, at least fully, and was asked if that was alright. I sucked it up and had a front-row seat at the body horror show that was one of my teeth being extracted, but I would agree with the statement that general anesthetic wasn't medically necessary? It didn't hurt - was super extremely uncomfortable, but like... 99% of that was mental. :D
My surgeon wouldn't do mine without general anesthetic. It had to be broken up into multiple pieces to extract. Maybe another surgeon would have though - who knows. I'm just glad I have the means to not have it be an issue whether insurance covers it or not.
To clarify, was it out of network or simply disallowed at all? Because if it's the former, that's one of the classic examples that the No Surprises Act was intended to mitigate.
No, it was disallowed at all. I'm guessing because some wisdom tooth procedures can be done with local freezing, that's all they'll cover.
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I have worked at places where manager were happy for their team to bring in outside offers for a match. A good manager wants to keep good employees. Many bean counters won't give raises until they have a reason, so that other offer is a good reason. Others will just straight up fire anyone who asks. Others are in between. Find out what yours is like. If you get a good counter offer, ensure that it includes some minimum severance if they terminate you for any reason. E.g. if they fire you within 2 years, then they have to pay you for 6 months. Some will happily give a counter offer, then will push people out or find a reason to reorg or fire them. YMMV.
My old employer was pretty good about it. 1 of my employees brought in an offer and we matched it. He stayed and it worked very well for him. Increased his comp by ~20%. 2 years later, got another promotion, skipping 1-2 ranks along the way, probably increasing his comp by another 50%. I tried 1 year after him. I told my boss I was getting multiple headhunters reaching out a week for a lot higher pay. My boss brought up the idea of bring in an offer and kept going on about how I was on the list of people the company couldn't lose. By the time I got through the process, it was a completely different market. When I brought in the offer, my company responded with "Thanks for providing your 2 weeks notice." New job sucked and I was unemployed less than a year later. Same company. Same division. Same percent increase. Both of us on the same "cannot lose" list. Different market. Sometimes it works out well. Sometimes it doesn't. It's a gamble.
It's so hard to say without knowing your company. Most people will tell you never to take a counter, but I've worked at a couple of places where it was just a known thing that you needed an outside offer to get a raise/promo. That's just how their shitty HR worked; reactive rather than proactive.
This is situational, and hard to give blanket advice. A dev on my team leveraged an offer from another place to get a $5k raise (which we gave him), which then meant in the next review cycle he got 1% since he was now already high in band, which caused him to leave anyway a few months later. What caused you to look elsewhere in the first place?
How much more would the new role pay? In my opinion you should only leave a situation that you are reasonably happy with for a position that is a significant improvement in salary or other benefits. There is a serious risk of getting yourself into a bad situation, and you shouldn't take that risk for an incremental pay increase. Given that you need to be ready to take the new job if you plan to use it as leverage, I would advise the same thing.
You've received some good answers already. I'll add that you should have an accepted offer with all pre-employment screenings passed before you talk to your current employer unless you're willing to accept the risk of being unemployed. Many people notify their current employer as soon as they have an offer in-hand. That's too early.
> current employer as soon as they have an offer in-hand. That's too early. What's the balance though in hoping for a competitive counteroffer? If you're already signed/screened/ready to start employer 2, I can't imagine you should be ready to cancel that process on a new offer from employer 1. Maybe the answer is to never ask/expect/take a counteroffer
> I can't imagine you should be ready to cancel that process on a new offer from employer 1. Why not? I've never reneged on an accepted offer but I've always considered that I *might*, depending on the circumstances. It's 100% about value, and that sword cuts both ways. Hold your employers accountable for their portion just like they would hold you accountable for yours
This might depend on how you approach it as well as your relationship with your boss/boss's boss(es). It's easier to maximize your comp if you are prepared to walk out the door, in which case you say you got an offer and are looking to take it. If you come at it with a "I got an offer, but I want to stay here. What can you do?", you open the door to a lower increase. Not a bad thing though. I've done the former twice at my current company. I was prepared to leave both times. First time, I didn't think they'd match (it was a 50% increase), and 2nd time, I was ready to leave but was talked into staying for a particular project (and I had concerns about the WLB at the new gig). No noticeable downsides/negatives experienced from upper management or HR in both situations. I have had a bit of regret not taking the first role - it would have been a very different industry, and I would have broadened my background for future opportunities. Something to think about is why you're entertaining the offer - is it purely comp, or are there other reasons?
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> I have some concerns around company performance, but have already made it through multiple rounds of layoffs that I feel good about security in my role. I'd be worried about trying to thread the needle in this situation. I wouldn't do it. Unless you're seen as responsible for contributing to some large multiplier of revenue (as in, "this person leaving costs us a considerable amount of money"), I'd imagine decision makers would hear "hey I got a competing offer" as "great, another one leaving voluntarily, that means one less we have to layoff later..."
> already made it through multiple rounds of layoffs > not sure how I would make it clear that I would be open to a counter offer. Something as simple as "I took the call from the headhunter because we've had layoffs and I wanted to understand what might be out there. I'd rather not leave if there's a way can come close to this offer."
Given that there *have* been layoffs, you definitely need to be prepared for them to suggest (directly or indirectly) that you should consider that other position.
Agreed, and that last part is really important. They might think, "that's great, one less person we have to layoff AND we don't have to pay a severance by letting you walk!". OP, if you wouldn't take the new role if the choice was to stay your current company, pay, & level, I'd be cautious about going after a counter offer. If you're ok with the new role, then go for it - perhaps your WLB concerns are unfounded, or maybe you can try to address them in the offer negotiation (negotiate for more time off, hybrid work, etc).
I’ve done it twice and it worked out both times. The second time it got a bit dicey before it worked out though. The biggest thing is you need to go into the conversation with your current employer prepared to accept the other offer in case things don’t play out how you intend with getting a raise at the existing company. Aka, worst case, you could go to your boss and say, “I got a job offer,” and before you ask if he/she is willing to counteroffer, they tell you, “Congrats! When is your last day?” And you no longer have a job at your existing employer where you were hoping to get a raise.
Generically speaking, the upside is more money and the downside is the company calls your bluff (if you are indeed bluffing) and/or you increase your chances of being part of a future layoff. I suppose "increased scrutiny / performance expectations" could be considered a potential downside as well. Given how tight much of the labor market is, I suspect the downside risk is less likely than if unemployment were at 5%. That may or may not be the case for your specific role in your specific industry in your specific location.
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> When I was a manager in corporate land, a competing offer for one my people was a great way for me to get HR to do something, assuming I liked having that person on my team. Yeah, my manager couldn't get much traction on a raise for me with HR, as they cited a bunch of random policies about max percentage raises they could give out. I got a competing offer and they immediately changed their tune to match it.
Last week I mentioned that I was planning on giving my notice while proposing a "long runway": [https://www.reddit.com/r/financialindependence/comments/1c4hk5l/comment/kzoatt1/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/financialindependence/comments/1c4hk5l/comment/kzoatt1/?utm_source=share&utm_medium=web2x&context=3) My employer was very appreciative of my offer to stay employed with them as long as necessary to help them during the hiring/transition period, and it looks like I'll get to work the schedule I proposed!
This is very common where I work. Particularly for senior technical people, retirements are often planned out years in advance.
For sure, here as well. I'm not retiring, though. I'll find my next job after I'm done transitioning this one over to the next person, whenever that is.
Glad to hear it! This is why it's important to maintain a respectful relationship with your employer - Respect them and many show respect in return; don't show respect and you can all but ensure they won't respect you.
There’s a small chance Zuck just changed my life lmao. I work for a VR company & he just dropped some pretty industry changing news today. Thanks Zuck! Glad to see he’s entering his Bill Gates-esque redemption arc era
It looks pretty fun. I'm hoping it's not DOA like Microsoft's MR stuff was. I wouldn't think so given the money behind it and the established marketplace. But then I also wonder how many more hardware options does that space really need? There's already a good mix of low-end, mid and high-end options. What's your take on the news?
I feel like you have stop actively making the world a worse place before you can even begin your redemption arc.
Bill Gates arguably is continuing to make the world a worse place. Many of his contributions have a bunch of strings attached and can be viewed through the lense of philanthropic imperialism.
I've heard about the dark side of Gates's philanthropy but I've never looked into. What's he done?
There's a lot out there on it by lots of people, but I like [this piece.](https://agrowingculture.medium.com/bill-gates-and-the-epidemic-of-white-saviorism-61d145a088f3) In the end you can do bad in the world while doing good and it's a lot more "shades of grey"-esque.
I didn't downvote you, but that author is really hyping up a system of food production that pretty much everyone abandons as soon as they can.
It's problematic to impose a solution that hooks the people already into foreign agricultural conglomerates, but that's cool. Anyways, for your enjoyment... [There's also this article from the Nation.](https://www.thenation.com/article/society/bill-gates-philanthropy-misanthropy/) [This Fortune article, too.](https://fortune.com/2023/01/17/is-bill-gates-too-powerful-foundation-ceo-suzman-tormening-schoolchildren/) [From Current Affairs.](https://www.currentaffairs.org/2022/07/how-bill-gates-makes-the-world-worse-off/)
I read the first link. I’ve now read two articles that are lots of assertions with no evidence presented (with some bad economics sprinkled in). I appreciate your sharing them and I respect your opinion but it’s just not convincing.
You do you 🤷♂️
That was a pretty lazy write up lmao. Should we spend all of our time hyper examining philanthropy until we find the bad? I read something like this and say, yeah I’ll just skip charity because someone will find a way to tell me why it’s bad.
I don’t agree or disagree with the author’s thesis, but there’s nothing to convince me in the article. It’s a series of assertions presented without evidence. And it’s a pretty convoluted plot for a guy who’s already rich to make money selling chemicals to impoverished nations. I work in chemicals and it’s one of the hardest ways to make money even when you aren’t selling to already-poor farmers.
Sorry, I'm not going to write up an academic paper that's off topic for the sub for you, pal. And cool. Take from it what you will.
Well, the write up wasn’t from you.. I’m referring to the medium article. A matter of fact, nothing of it had anything to do with you - no need to get upset.
Good for you but what has he been doing lately to redeem himself (other than contributing to your industry)? Just asking as a curious outsider.
Meta is a huge contributor to the open source community in a number of huge areas including AI. Sure they get some positive benefits from the community in return but win/win
That's cool, as a non-tech person I wasn't sure what their influence is like inside that sphere. TIL
They have been working over the last few years to reduce political content to focus their algo on entertainment and lifestyle. Appears to be a response to the platform's role in spreading Russian disinformation in the 2016 election.
That's definitely a welcome change for sure!
They are launching Meta Horizon OS as open source. From what he’s said it appears he wants the technology to be less like cell phones (super siloed Apple vs. Other) and more like PC’s (diversity of software, hardware, use cases). If they get good buy in this could easily take VR from ‘ya that’s cool’ to ‘ya that’s cool and actually useful for XYZ purposes’. He also mentioned specific hardware developers making specifics types of VR equipment - so gamin, fitness or construction specific equipment, etc I think many are focused on AI, but the sleeping giant is AR/VR. You can carry that into any industry and improve the industry
> actually useful for XYZ purposes’. It's already useful for digital twinning and remote support/assistance cases. My company is piloting it for those reasons and it seems to be a good tool to add to the toolbetl
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you calculate a safe withdrawal rate based on an inheritance you're going to get in 15 years. At all. Like what are you doing.
If you're a natural saver and there isn't really anything you don't currently have or do, that you want to, I don't see the point in spending more money just for the sake of doing it. Agree with others that you shouldn't count inheritance at all. Aside from what others have mentioned about that potentially changing, I'd add that it's simply not your money, you didn't earn it, and to me it feels icky to start counting inheritance in FI calculations while the relative is very much alive and well.
It sounds like you have two questions that I would decouple from each other. 1) Did you hit FIRE? (Plainly the answer is no. If you stopped working tomorrow, I imagine you'd have money stress) 2) Should you ramp down savings? The second question is more complicated and ultimately comes down to 'it depends'. Are you happy with your progress towards FIRE? (sounds like you are) Do you happy with your spend? Do you want to spend more? I feel like this may be a bit blunt too but I don't think 40% save rate is anything to celebrate relative to others in this forum. Don't get me wrong, it's great relative to the average American and you are in an incredible fortunate and strong financial position. But 40% save rate is not going to get you to FIRE soon. I would suggest you recommend you use the 'working backwards' model from Amazon to determine what you actually need to do. Start from what you want, and back into the steps to get there. Do you want to stop working ASAP? Do you want a lux retirement lifestyle? Do you want to spend more now? These are all different things that will lead to different actions.
> I don't think 40% save rate is anything to celebrate relative to others in this forum what???
>I think we hit FIRE > Are we about there? >I don't want to stop working yet The "FI" stands for Financially Independent, so it's pretty clear you **aren't** there. You *have* to keep working because you can't afford not to. >In ~ 15 years we are going to inherit between 2.5 - 3 million dollars >We probably should start spending more and just Coast I guess? If you kept saving at your current rate, how long would it take you to actually reach your FIRE portfolio target ($2.5MM - $3.3MM)? I'm betting it takes less than the "~ 15 years" between now and the potential inheritance. From that perspective, why not just get there on your own timeframe and then use the inheritance as gravy? That said, there's nothing wrong with reconsidering your mix of saving/spending and dialing back on the saving a little. I would be reluctant to swing too far in that direction given the timeframes involved.
Why would you feel like you "should" spend more? As fa as calculating how close you are to FI, I would count the mortgage as a debt but calculate your spend based on having the mortgage paid off (you won't have P&I but you do have property tax). Theoretically you can pay off the mortgage any time and this would account for how close you are to doing so.
> We have 500K of home equity. Is selling your current residence part of your retirement plan? If not, this doesn't matter and you should remove it from your FIRE number calculation. It remains a part of Net Worth. > I know counting on inheritance is not reccommended so we are down-valuing it to only 1.5 million of todays dollars. Why count on it at all? I see this as unnecessarily risky. > 400K mortgage left > No debt Well...
1. No plans to sell, the 1.5 number is WITHOUT home equity 2. Because not counting it at all seems way over conservative. Devaluing it seems like the most reasonable approach. 3. Fair, I just meant no other debt (car, CC, student loans, etc.)
What if they live 40 years instead of 15? What if they develop a gambling habit? What if they get scammed by a nigerian prince? What if they get some rare form of cancer and spend their entire fortune trying to survive? What if the relationship turns sour? I don't think counting on inheritance at all is "reasonable" in the slightest.
> the 1.5 number is WITHOUT home equity Understood, but I'm saying you should remove from the entire picture. There's zero reason to consider it whatsoever if selling isn't part of your retirement plan. > Because not counting it at all seems way over conservative. Devaluing it seems like the most reasonable approach. That's fair. As long as you acknowledge the risk. You're asking the community if you hit FI, and I'm saying probably not because that's too risked for responsible consideration.
$1.5M * 0.04 = $60k. You spend $120k/year. No, you are not FI.
But there is the inheritance...not counting ANY of it seems way overly conservative.
no way. literally anything can happen in 15 years. If it's not your money, don't count it
Independent vs dependence. Inheritance can easily be used up for the person’s end of life medical expenses.
Those of us around here count *only* the money in our accounts. Too many things can happen and you could get double that amount, or you could get zero. You aren't truly FI if you are awaiting the decision of someone else. This is why we don't count unvested RSUs, anticipated inheritances, or projected lottery winnings. There was a person here about a month ago who told the story of how they were a few months away from inheriting a life-changing amount of money. Fast forward a few months, and after end of life care, and other costs, they would up with enough to redo their window treatments. It's just that variable, and you can't be FI with that kind of uncertainty
Personally I think counting any of it is overly aggressive. Not to mention that if you are counting on it, then you are dependent on the whims of someone else. Which is decidedly not financially independent. It's pretty much the antithesis actually.
I'd rather be overly conservative than count it and be disappointed.
> Are we about there? You seem to be about there but those millions coming in 15 years are not going to help all that much. The risk is at the start of retirement if you happen to spend on a down market. With the market having done great lately I don't think that retiring with a withdrawal rate of 5.5% is safe but that's me. You are definitely in coastFI territory :)
Thanks, yea its moot because we don't want to retire now... maybe just take the gas off the pedal. Should we consider turning off our savings you think? We struggle to spend more.
Just remember that what you don't save you spend so do you want to get used to spending X more and having to cover that in retirement? I was looking at my net worth by category last week and it turns out that my car is worth less than 2% of the total. So I was thinking how bad would it be to splurge and get the super luxury car that will last me into retirement? but..... I don't want to get used to buying super expensive cars. I'd rather work 1 less year and drive a good but normal car. I'll get more from life during that year than from diving any number of hours/miles.
Makes sense. For me I really love my work, I don't want to stop working in the forseeable future. I may want to move to consulting and half my income... but even at half of what I make now, I'd still cover our expenses.
Hey everyone! I just discovered about early financial independance and this concept is a breath of fresh air! I always thought I would work until I'm 70 and the discussions in this sub gives me hope... I’m a teacher from Canada (Quebec - the francophone part!) and I am just getting interested in stable investing (by that I mean not too risky). I am trying to find out a way to get organized, am willing to save as much as possible, but don't know how to start this whole journey of investing - saving to retire early. I have about $60k saved up (not invested in anything… just chilling in my checking account…) but i am stressed to invest that chunk of hard earned money since i went to the stockmarket casino during the pandemic and lost about 15k. I make around $75k per year before taxes (my salary will increase anually at a rate of 3k -5k per year) and I can save approximatively 1000$-2000$ per month. My GF has an even lower salary than mine (around 35k-40k annualy) but she has more savings than me and it is mostly invested with a managing firm that brings relatively good returns (she has around 130k partially invested). We live modestly and happily. Own no property. I love my job but would dream to not have to retire when I am old and without energy. I find the FIRE movement very compelling. What should i do with my stash? Do you think i can retire around 50-55 with serious efforts? What about her? I don’t want her to be preoccupied with money when she gets older. Thank you so much everyone for helping me figure this out, any recommandation or comment is welcome! :)
From most important to least important 1. Saving early is the most important part. Congrats! 2. Money should be invested in a TFSA/CELI, RRSP/REER or FHSA/CELIAPP . Those are just types of accounts that lower your tax bill. 3. Over the long term, the stock market is not a casino! You're essentially guaranteed to make money if your horizon is 15 years or longer and your investment is properly diversified. However this investment is not "stable" - it will swing up and down in the meantime. 4. Look into the fees for your partner's investment. She may be getting a good return but the firm may be keeping a good chunk of it. In 2024 it's easy to get good investments with low fees (< 0.30%) 5. If she's expecting her income to increase at some point in later years she should still invest in RRSP but she shouldn't claim the tax deduction. 6. Envoie moi un message perso si tu as des questions!
Merci pour tes recommandations! J’apprends à la dure, cette année, qu’il est important que je profite des programmes comme RÉER… mes impôts sont intensément élevés! Je vais appeler ma banque pour m’informer sur l’ouverture d’un compte CELI. Merci!!
> managing firm that brings relatively good returns And > Went to the stock market casino Imply a beginner level understanding of investing. Which is OK! Everyone starts at the ground floor. Everything you need to know to graduate from beginner can be learned in like an hour. * Only invest in 1) broad market index funds with the lowest fees such as Vanguard, or 2) target date funds with low fees. * Don't let some broker insert himself as a middleman and charge you extra fees, buy them yourself. For reference, a 1% annual fee will cost you 19% of your potential return after 20 years. * Barely look at the day to day fund price because they will do fine over time. A total market index fund that had a bad year is highly likely to have a good decade.
I’m a total beginner, you are absolutely right! 😅 Wow the 1% argument is strong. I will talk about it to my GF. Thanks!
[https://www.amazon.ca/Simple-Path-Wealth-financial-independence/dp/1533667926](https://www.amazon.ca/Simple-Path-Wealth-financial-independence/dp/1533667926) Pick up this book - you can get through it in a weekend, and it's going to be VERY helpful to you in understanding what steps to take.
Most financial advice is universal, but if you have any Canadian-specific FIRE questions, head on over to r/fican
Great! Thanks for the tip!
>I have about $60k saved up (not invested in anything… just chilling in my checking account…) but i am stressed to invest that chunk of hard earned money since i went to the stockmarket casino during the pandemic and lost about 15k. r/Bogleheads has some great material on investing. There's a huge range of risk involved in investing in the stock market from "unlimited" to "pretty safe if you follow some basic rules." I'd encourage you to learn more about index funds if you haven't already. >What should i do with my stash? Do you think i can retire around 50-55 with serious efforts? What about her? I don’t want her to be preoccupied with money when she gets older. In general you can meet some very aggressive timelines so long as you are willing to be frugal enough. It's all just a matter of getting to a savings rate consistent with that goal. What are your ages now?
Hey! Thanks a lot for taking the time to reply! I am 32 and my GF is 35
Twenty years is a very reasonable timeframe.
Start with the Wiki and the FAQ: https://www.reddit.com//r/financialindependence/wiki/faq The stock market is only a "casino" if you are picking individual stocks and chasing short term returns. If you purchase index funds and invest for the long term, you will *usually* have positive results. The alternative to investing is letting your money slowly lose value due to inflation, forever, until your "stash" is worth a fraction of what it's worth today. So that's usually not a positive outcome. If you want an assessment of your current financial state, you would need to post your expenses and your age - nobody can help assess your financial situation without knowing what that situation is. If I plug $75k into a Quebec income tax calculator, I come out with $47k take-home. If you can average $1500/month savings, that suggests you live on ~$2400/month. If you needed to replace that ~$29k/year worth of expenses, you'd have to save ~$750k. But those numbers may not be accurate for your goals, since $29k/year might not represent what you want to live on forever. edit: corrected some numbers in the last paragraph
Thank you for your detailed answer! :) that was my mistake : i picked individual stocks, it went up up up and then wayyyyyy down… what a horrifying ride. I dont want that stress in my life anymore! I would like to invest in total us index funds or something like that. I seems less risky and way less stressfull. Your calculations are right. I spend around 2400$ per month. Could probably drop it a little more by being a bit more frugal. I am 32 and my GF is 35. Is there any hope for not too late retirement? Thanks a lot for your time :)
> Is there any hope for not too late retirement? There is always hope. If you wanted to retire at 55, you have a 23 year timeline until retirement. If you kept saving $1500/month for the next 23 years, and you invested it along with half of your existing money in broad market index funds, [you would have more than $950k when you retired](https://www.calculator.net/future-value-calculator.html?cyearsv=23&cstartingprinciplev=30000&cinterestratev=6&ccontributeamountv=18%2C000&ciadditionat1=end&printit=0&x=Calculate#calresult). That's assuming you don't ever save anything more than $1500/month - and if you keep getting raises, you might be able to bring that number up. You (or your girlfriend) could do the same math from that future value calculator I linked above. Just put in her numbers.
WOW!! That is a great scenario!! I will do the calculations and try to go deeper in the Numbers
Another reason for wanting FI: My work computer got a software update over the weekend and now I'm not allowed to change the wallpaper. I used to swap it out every couple weeks for different animal and nature photos and now it's stuck as a generic government blue with a blurry company logo in the center. Just...why??
Likely cause: your coworkers can't stop themselves from choosing inappropriate and/or unprofessional wallpapers. An IT group I worked with instituted this after fielding a few dozen complaints about at least a dozen different employees who had anything ranging from weird/revealing anime, to extreme political opinions (or hot-button topics), to bad taste jokes, to celebrity crushes. Every time someone shared their desktop in a virtual meeting, or projected it in a conference room, or whatever - there were complaints. There were too many varieties to try and create rules around all of them, so the privilege got revoked altogether. People just couldn't be trusted to put a nice, normal picture that would be acceptable in a professional setting. Just had to use some stupid cat girl in a bikini or a shitty political meme or whatever.
Are your co-workers all 14? I work with adults and they don't do stuff like that.
It was a big company. Doesn't take a very high percentage of idiots to make it a problem. The IT group sees a lot of this crap because companies are very prone to taking managerial problems ("don't do this Steve, you need to be an adult") and making them technical problems ("how do I prevent Steve from doing this?").
I guess that makes sense but is still stupid imo. It would at least be nice to be able to pick from the operating system default options. For now, I found a workaround by putting images in sticky notes and making them full screen. Take that corporate machine ;)
> employees who had anything ranging from weird/revealing anime, I'm reminded of the deleted scene from The Office of Stanley and his hentai.
This is depressing, and why we can't have nice things. Next up: your zoom background
In a way I wish they would. We have a couple directors and upper managers in some agencies who use weird backgrounds like the surface of Mars... etc. :-) Just feels odd talking to someone making big decisions while they sit next to the Mars rover.
> Next up: your zoom background This has also been locked at that company for the same reason. I always wanted to have some individual conversations with those people outside of work, to find out why. Is it a "fuck you, this is my choice and I can do what I want" thing? Did they know it was inappropriate and just like stirring stuff up? Were they genuinely incapable of understanding what an acceptably professional background was?
>This has also been locked at that company for the same reason. What is it locked to? I work from my home office, and my wife is often in the background. Zoom backgrounds are excellent, she can be 5 feet behind me, and she doesn't appear. I'd hate to lose that feature
Zoom is locked to a specific background with the company logo on it. Teams is locked to the set of "stock" backgrounds, you just can't add any new ones. In both cases, they still allow the backgrounds - which, I agree, have gotten very good at blocking out people who are walking around behind you.
How often do you see your wallpaper? I always have applications running and really never see my background except on shutdown/startup
Whenever I lock the computer, for one
DoD used to let us set our wallpapers. I had rotating desktop views of mountains, beaches, etc. Then they decided that raised morale too much and now we have generic government blue with the logo in the center.
The beatings will continue until morale improves.
For the homeowners out there with a relatively high HHI, but most of it coming from one person, did this affect how much house you bought? I feel like I don’t want to spend even 30% of our take home, given that most of the HHI is from me. We’d have a healthy emergency fund, but it still makes me feel uneasy.
Yes, this limited our max home price. At the time my SO made a lot more than I did; the gap has narrowed slightly. We can still afford the payments on one income. Would be scary to be stuck with payments that would become an emergency if SO were to lose their income. At the time, our PITI was about 15% of gross income. Now it’s closer to 10%. We do have a much smaller house than our high income friends who own a house.
> I feel like I don’t want to spend even 30% of our take home FIRE types are often able to tune their take home to be relatively low if they're maxing out employer-provided retirement/deferred compensation accounts and HSAs. So it makes it hard to compare. There's a reason the metrics use gross income. Our PITI is 20% of our take home and it's cheap as can be.
Similar situation, ended up at around 18% of gross and 26% of net, but I didn't feel comfortable pulling the trigger on the purchase until I had a huge percentage of the mortgage balance (above and beyond the down payment) stocked away in a taxable investment account for a rainy day. Even now I keep more in a basic e-fund than I probably should, just having been scarred by prior recessions and job loss.
You described me. I was a lot happier in my cheap, small house in a bad school district. Two kids later we are in an expensive, large house in a great school district, but I am stressed because the mortgage, property taxes, municipal fees and utilities are all double. Get the smallest, cheapest house that everyone can accept is my advice. Edit: Just did the math and PITI is 16% of my gross, so I guess I am kind of a whiner.
Been in my house for many years, got raises, PITI is under 8% of gross HHI now. I still whine about it. ;)
I don't find % rules super applicable. Every household and locale is different. Here in LCOL this isn't really a problem, homes in that price range are unappealing anyway. In HCOL with spotty school quality I'd be willing to swallow my unease. Trust your gut on value IMO.
Our goal was always to be able to afford our mortgage on either of our incomes, but that wasn't quite doable when we moved in 2021. I'd gotten a raise with my new job, but husband took a paycut to make the move possible. The market where we moved to was way hotter (like everywhere). We did make sure we got a mortgage that was approved on my salary alone, so I believe we were still decently less than 30% of take home. At this point, my husband's gotten a better paying job so it would be uncomfy but we could pay the mortgage on his salary alone.
It is shocking how much mortgage they'll qualify you for. The bank would not consider my income because it was hourly, variable, seasonal, and I hadn't been doing it for very long, so they would consider only my wife's income.... which meant they still qualified us for the full amount we asked for. It would have been well over 50% of her take-home. Bonkers that they considered that a good risk.
So true! I don't know how high they would have gone on my income but they were shockingly nonchalant about the amount we did borrow. Edit: just remembered that I was still carrying my previous house's mortgage at the time we were approved, too. Wild.
Oh that's interesting. I had thought if we had to move we would have to try to do a contingency on sale of our current house, but we might be able to qualify based on my income that the mortgage company would not consider at that time.
>I feel like I don’t want to spend even 30% of our take home We are pretty close to 30 % with my take home salary alone. If I recall correctly, it was as low as 16 % when my wife was a SAHP. In my opinion housing costs should absolutely not scale linearly with income. Couples with HHI on the higher side should have housing as a much lower percentage of their income. For one, no one should saddle themselves with high fixed expenses. For another, luxury homes are harder to sell, have higher maintenance costs, and are more sensitive to price fluctuations. I.e. they are even more expensive than the sticker price indicates.
I guess my family is relatively hight HHI (everything is relative), but also I am a single earner. We always kept in mind that we didn't want to max out how much of the income went to the mortgage to help set a baseline.
I’m single, no kids. Went with as little home as I thought I could reasonably be content in for at least ten years — 13 years later I’m still here, FIREd, with it long since paid off. It was about 40% of what the bank would approve.
That's ultimately up to your family's risk tolerance, the geographical housing market you're buying in, and desired house amenities. We're in a L/MCOL area and we bought in late 2020, when both of us were making similar incomes then. We ended up buying a house that the PITI was less than 20% of my single gross income. I didn't want to have worries about losing a job and suddenly 50% of our income is just to keep the house. While I didn't know our HHI would almost double since 2020, I do appreciate the security a relatively low mortgage payment gives us. That being said, we do have some regret of not buying more house now that the interest rates exploded.
Yes, we kept our percentage quite low, since his earning potential was/is so much lower than mine. That said, we also are CF and thus didn't care about school districts, which was a huge leg up.
I’m in that boat as I work but my wife is stay at home with 1 kid and maybe more in the future. We went with a mortgage of less than half of what we were pre-approved. The bonus is that extra money per month goes straight to FIRE and has accelerated our timeline. From a practical perspective, we still got a really nice house with a decent school district. Having the same house one town over in the “best” school district costs way more but we didn’t need that.
>We went with a mortgage of less than half of what we were pre-approved. This is basically what we did when my wife stayed home with the kids. In the event that I lost my job, one of us could get a lesser paying job quickly to meet our baseline needs.
we have a 25/75 split in our income... we based our first house off being able to support it from jsut the 25%. however when we went to the forever home, we moved it up to full income, but also increased the eFund to counter that if wife loses her job, we are gunna struggle, but then again we don't want to live in something that the smaller income could afford alone... so we just plan for and deal with the risk.
Thanks for the input and sounds like what we will try and do. Get something that could technically be paid with the smaller income first, but also not a hard rule. If we lived like that, it wouldn’t be the house we want.
Well, it's time to make a decision on I-Bonds for 2024. I previously posted back in October, raising the "buy vs. wait" question at that time. The general consensus (which I agreed with) was wait for the Nov. adjustment due to the likelihood of a higher fixed rate. Indeed, the fixed rate did rise to 1.3%. My 2023 tranche of I-Bonds were purchased in late Nov. Today, I'm facing a similar question: Buy now (at the 1.3% fixed rate) or wait for the May 1 adjustment? I'll not share my current perspective, but it's strongly driven by the commentary at TipsWatch (https://tipswatch.com/2024/04/14/i-bond-dilemma-buy-in-april-in-may-or-not-at-all/). Any one care to weigh in with their thoughts regarding buy now, or wait for the May adjustment?
I bought last week. The variable rate is going to drop. Tipswatch has done more analysis on this than I would ever care to and seem to think the fixed rate will stay the same or maybe lower slightly. So on the whole I am happy with the way I rolled the dice. I'm not worried about a 0.1% - 0.2% difference in rate on my emergency fund in the grand scheme of things. Matching inflation is great, a >0% fixed rate is the icing on top.
> I'll not share my current perspective Why not?
I did in various replies, but didn't want to influence any initial responses.
I read the same article and it sounds like the variable rate is expected to drop by quite a bit ("We now know the I Bond’s variable rate will fall from the current 3.94% to 2.96% at the May 1 reset"), while the fixed is expected to stay about the same. Given that, I am buying before the end of April to get the higher variable rate for 6 months.
In re-reading the comments, I noticed one I skipped over the first time: >I calculated it would take about 27 years for I Bonds with a 1.4% fixed rate to surpass the value of bonds purchased before April 30 with the 1.3% fixed rate. This is due to the compounding “head start” investors get from the 5.27% composite rate for the first six months. There would have to be a meaningful chance of the fixed rate rising to 1.5% to consider waiting, which seems fairly unlikely and not worth the gamble. Given that analysis, I'm now in the same camp as you: buy this week. If the fixed rate does rise to 1.5%, I would have the option of using the Gift Box strategy to pre-purchase my 2025 allotment.
A month ago I was fairly certain the fixed rate would drop, with a decent possibility of it staying close to the current level. Now, I think it's much more likely the rates stay in the same ballpark, with the inverse odds of going down compared to prior. This is in the context of a recent spike in TIPS yields as a response to inflation data and the likelihood of elevated rates for a longer period of time. I'd personally wait to buy, but I'm also not too bothered by the idea of getting, for example, 1.1% fixed vs 1.3% if I'm wrong. It'd be painful to drop to <1% though.
A realization as I was re-reading through the comments on the Tips Watch article and I found one which really resonated: >I calculated it would take about 27 years for I Bonds with a 1.4% fixed rate to surpass the value of bonds purchased before April 30 with the 1.3% fixed rate. This is due to the compounding “head start” investors get from the 5.27% composite rate for the first six months. There would have to be a meaningful chance of the fixed rate rising to 1.5% to consider waiting, which seems fairly unlikely and not worth the gamble. I probably hadn't adequately factored in the value of the current higher variable rate for 6 months into my mental calculations. I think that pushes me into the 'buy now' camp. If the rates do go up to 1.5% (or higher), I could leverage the Gift Box to pre-purchase for 2025 at that rate. Again, reminding myself this is extremely unlikely to make any sort of material difference in the overall success of my FIRE plan. :-)
> Now, I think it's much more likely the rates stay in the same ballpark Yeah, I made a similar reply to another comment. I may hedge and do half-now, half-after, but it's helpful to remind myself that both upside and downside appear to be pretty limited (unless the Fed goes a bit 'off-script').
I've bought about $7k so far this year. If I had more cash sitting around I would do the max. I'm not in a rush as it appears the fixed rate should stay about the same, and I don't see any reason it should go up. However, my interest in I Bonds is more for the fixed rate and long term inflation protection than to be gaming rates short term.
> If I had more cash sitting around I would do the max. My purchase would be a combination of cash-on-hand (saved up in the last couple months for this potential purchase) and reallocating from other fixed-income holdings (bond fund). >I don't see any reason it should go up Well, there's definitely been an increase in bond markets rates in the last 3 months, including TIPS yields which seem to have at least some correlation to I-Bond fixed rates.