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Folly posted:Not exactly that, but I have a related problem. I've lost a lot of interest in increasing my income. Joshua from the Radical Personal Finance has talked about this on his show. He thought the optimal way to go about achieving FI was to develop a lifestyle you could stick with. If you're happy with working from home, just do that for another few years. I can't say I disagree with him, though I think it really depends on your attitude towards work and the specific stresses of your job.
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May 10, 2015 23:20
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Either developing your lifestyle as froglet has said ortuyop posted:I'm pretty sure the point of money is freedom. Maybe set some goals or things that you would like to do like tuyop is doing. Would you buy a car with expensive rims along with on-going expenses or maybe travel/increase your income. I found when I stopped setting goals I didn't give a poo poo as much. Whereas now I have specific goals to achieve and that keeps me focused.
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May 11, 2015 00:10
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Devian666 posted:Either developing your lifestyle as froglet has said or This is good, but if you're looking at it like a finish line, I'm not really sure that's the best approach. It's like hiking a long trail, you have to love the process of moving forward to actually put one foot in front of the other. Saving money is not a substitute for meaning in other parts of your life any more than spending is. For us, it's kind of just like: Monthly budget meeting and reconciliation Me: "Oh, we have [relatively bafflingly large sum] extra this month. Uh... Cool, I guess!" Her: "Do you need anything for work/school/life?" Me: "...no, do you?" Her: "Nope." And the stash gets a little bigger. We don't buy anything because we're either too busy (her) or too content and exhausted from our occupations (me) to really need anything once you take compulsive consumption out of it. Like, I would totally have an NAS and a Mac mini running as an HTPC by now if I was normal. But all that isn't $800-$1200 better than the laptop plugged into the $150 used TV with a $20 Bluetooth keyboard/trackpad. Until recently: Me: "Hm. We don't have any commitments coming up in September. Wanna travel? We have like 12k in cash for tuition or whatever, and by the time September comes we could have another 15k if we get a roommate." Her: "Yeah!" And then we started planning. Turns out the stash will cover our living expenses for two years if we need it to! Reasonably, we expect that in the next five years we'll have a child and professional obligations, so this is probably the last time for a decade that we'll have several months without any commitments or commitments flexible enough to vagabond in any way. It was never a goal, just a natural consequence of a lifestyle with reasonably limited wants.
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May 11, 2015 01:24
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My approach is to set more short term goals to give a more immediate sense of progress. The long term plan is 15-20 years away.
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May 11, 2015 03:16
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GoGoGadgetChris posted:Anybody coping with burnout yet? I'm just shy of halfway to FI. But sometimes I just want to stop saving and buy some goddamn cars and houses and electronics and a walk-in gun safe and get a solid gold YOLO necklace, gently caress. In a great many ways, doing well with FI is the same as doing well with losing weight and keeping it off. One element that comes in frequently in the latter is the concept of cheat meals, where you eat stuff you normally wouldn't because you like it but can't eat it all the time without getting fat. Do the same thing for FI. Buying that jacked up pick-up truck is like eating a whole pizza, and is only a good idea if you're burning calories like Michael Phelps or earning money like Bill Gates.
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May 11, 2015 04:52
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Is FI primarily an American phenomenon? It'd be interesting to contrast the experiences of devotees in the US and Europe given access to universal healthcare, extended paid maternity leave, and free or close-to-free university education in the latter.
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May 11, 2015 13:39
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shrike82 posted:Is FI primarily an American phenomenon? The EU also has problems paying people lots of money though. One of the most frequent professions that you see for FI people is that of engineer. In London, an extremely high COL area, an engineer will see approximately a fifth to a third of the salary in Silicon valley.
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May 11, 2015 13:53
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That may be true for IT/engineering but finance & consulting pay close to parity in London. London is an outlier for Europe in any case. I used to think higher salary automatically meant better quality of life and say this having spent 4 years working in a 0% income tax tax haven but I wonder these days. It's an interesting thought experiment - given the option of making 200 grand in SF versus making 80 grand in Berlin... I don't think it's as clear cut a scenario as you make it out to be. Housing (rent or buy) is significantly cheaper, and it's tricky to factor in stuff like childcare, education, vacation days etc.
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May 11, 2015 14:11
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baquerd posted:The EU also has problems paying people lots of money though. One of the most frequent professions that you see for FI people is that of engineer. In London, an extremely high COL area, an engineer will see approximately a fifth to a third of the salary in Silicon valley. I just checked Berlin and London, and the teacher salaries are also totally hosed up (about 1/3 to 2/3 what teachers make in Alberta, the highest in Canada). And Finland doesn't pay their teachers like doctors, contrary to what a documentary told me! Though in Italy they only work about 29 hours a week so that ~30k PPP they make is really like a very good part time job!
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May 11, 2015 14:40
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FI in europe vs us is swings and round abouts. We earn less but also need less better state provision of healthcare and social security removes some of the pressures when it comes to having a super huge buffer. Its a lot easier here to say gently caress it Ill take 4% a year out and if the market screws me I won't starve and I can still get healthcare while I sort myself out. From what I read pension prevision is better to both state and private so that helps. (For reference I contribute 8% and my employer puts in 12%, no one here has even heard of the concept of a vesting period for anything below c grade 6 figure plus grants).
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May 11, 2015 15:06
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Cast_No_Shadow posted:FI in europe vs us is swings and round abouts. We earn less but also need less better state provision of healthcare and social security removes some of the pressures when it comes to having a super huge buffer. Its a lot easier here to say gently caress it Ill take 4% a year out and if the market screws me I won't starve and I can still get healthcare while I sort myself out. Is there any discussion among actual workers of the effect that all these austerity measures and the general economic collapse of the EU is going to have on pensions and such? Outside of a few professions, pensions are becoming exceedingly rare here in Canada but people seem to be behaving as if nothing has changed and they can still count on most of their earnings into retirement, so I wonder if it's the same in Europe or whatever country you live in.
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May 11, 2015 15:20
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There's a generational shift going in Europe. The younger you are the less likely you are to be part of the safety nets that european countries are traditionally associated with. Thing are steadily moving towards the american end of the spectrum.
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May 11, 2015 15:27
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Most older people have a ton of gold plated awesome for pensions. Middle aged 35-50 seem the most hosed as they on the whole saved nothing and might be at the edge of the cut backs and just missed out on awesome private pensions. The young here seem switched on enough to take advantage of pensions and such where they can. Its mostly a matter of few of them know how rather than willingness. No one told them so I tend to field a LOT of questions given im the only one (in my work and social circles) in that age bracket who openly has a clue. Politcally the idea of attacking and cutting health and pensions is political suicide. It doesn't mean they wont try but its probably the most toxic thing a politician can be associated with. We as a nation seem more forgiving of affairs, kinky sex and fiddling expenses than messing with health and pensions. Also you have the problem that the largest voting blocks are those collecting pensions and needing healthcare now and the second being those that will need it soon. So self interest wins there. Everything else though I see getting cut to the bone american style.
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May 11, 2015 18:06
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I worry about structuring society in a way that people are dependent on pension funds though - it bothers me that it creates incentive for an employee to stay at one company rather move jobs as is suitable. Under such a system, one is even more pressured to stay at a job where one bears legitimate grievances. Instead of leaving behind your salary temporarily, you also leave behind pension accrual permanently, at least as far as I understand it. I seems like a poor bandage over the problem of a financially illiterate populace. Certainly I would prefer more money now to a pension later, and it's sad that many people would be worse off in such a scenario purely because of financial willpower.
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May 11, 2015 18:25
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I thought you took your pension with you, its yours not your companies. Appart from that vesting poo poo, thays a cruely American thing as far as I know.
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May 11, 2015 18:42
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Cast_No_Shadow posted:I thought you took your pension with you, its yours not your companies. Appart from that vesting poo poo, thays a cruely American thing as far as I know. That's true of modern 401k-style retirement savings accounts, but I don't think it's true of traditional pensions. Correct me if I'm wrong though - maybe there's something I missed.
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May 11, 2015 18:43
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/\/\ my case was a federal service pension, so as traditional as they come I think. Jeffrey of YOSPOS posted:I worry about structuring society in a way that people are dependent on pension funds though - it bothers me that it creates incentive for an employee to stay at one company rather move jobs as is suitable. Under such a system, one is even more pressured to stay at a job where one bears legitimate grievances. Instead of leaving behind your salary temporarily, you also leave behind pension accrual permanently, at least as far as I understand it. I seems like a poor bandage over the problem of a financially illiterate populace. Certainly I would prefer more money now to a pension later, and it's sad that many people would be worse off in such a scenario purely because of financial willpower. *not an accountant* I'm not aware of any pensions where you lose your premiums if you quit or are fired. That's technically your money, held in trust by an organization. In my case it was made available to me as either differed annuity, transfer in cash with penalties, and transfer to locked in and registered personal accounts. There was no outcome where I received none of the money I contributed. It might be possible for a company to keep their matching, if they do that, similar to vesting policies and stuff, but I think that's not technically pension plan.
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May 11, 2015 18:43
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Yeah, you have to distinguish between DC and DB plans. That being said, it's difficult to argue that employees under DC plans are better off than their predecessors (or fortunate peers) with DB benefits, regardless of claims made about empowerment.
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May 11, 2015 18:48
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tuyop posted:/\/\ my case was a federal service pension, so as traditional as they come I think. Right but isn't the accrual non-linear? Won't a person who works for two different companies providing pension benefits for 15 years each receive less total than if they worked at a single one for 30 years? If it's 100% linear with time worked, then I'm wrong - my understanding is that you accrue a large portion of the benefit very close to retirement. e: I'm talking about defined-benefit Jeffrey of YOSPOS fucked around with this message at 19:01 on May 11, 2015 |
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May 11, 2015 18:49
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I think (in private company, America) that it depends on the pension plan. For instance, in my company, those who were around before they stopped offering the pensions in the mid 2000s need to have a certain number of years of service and be age 61 to be eligible to receive the pension. If you work here for 30 years and quit at 60, you're done, nothing. These are some VERY generous pensions for a very generous company, though. The calculation is something like the average of your last three years income in perpetuity. Part of me laments being a bit too young to get on board with these. On the other hand, I'd be shackled until age 61...
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May 11, 2015 18:50
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Yeah, you're wrong, ERISA explicitly prohibits backloading of benefit accruals.
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May 11, 2015 18:51
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Okay just got two conflicting responses, don't know what to think - TraderStav's company sounds like what I was referring to. He describes precisely the sort of issue I'm talking about - in a society dependent on pension funds, one cannot leave a job without losing the "number of years in service" part of the pension reward, and if one company's pension is your retirement plan, you're completely dependent on working there and only there for your entire working life. I think that sounds awful and no one who is financially literate should prefer that over receiving money now. Now when you get fired at age 59, your retirement account gets instantly drained as well, lovely. Why is this a system that is looked back upon fondly? Shrike, does it preclude things like TraderStav described, like requiring a certain number of years in, and only paying out if you work there until a certain age? To me it seems like it is 100% backloaded until you turn 61, which seems just as treacherous for a given employee as it being backloaded based on your number of working years. Jeffrey of YOSPOS fucked around with this message at 19:12 on May 11, 2015 |
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May 11, 2015 19:10
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Jeffrey of YOSPOS posted:Okay just got two conflicting responses, don't know what to think - TraderStav's company sounds like what I was referring to. He describes precisely the sort of issue I'm talking about - in a society dependent on pension funds, one cannot leave a job without losing the "number of years in service" part of the pension reward, and if one company's pension is your retirement plan, you're completely dependent on working there and only there for your entire working life. I think that sounds awful and no one who is financially literate should prefer that over receiving money now. Now when you get fired at age 59, your retirement account gets instantly drained as well, lovely. Why is this a system that is looked back upon fondly? I reserve the right to be incorrect in my response as I have never been the beneficiary of a defined benefit pension or the administrator of one. 
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May 11, 2015 19:16
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TraderStav posted:I reserve the right to be incorrect in my response as I have never been the beneficiary of a defined benefit pension or the administrator of one. Yeah that goes for me too of course - I want to understand the appeal beyond "I don't need willpower to have money after retirement".
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May 11, 2015 19:18
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The biggest complaint regarding the disappearance of pensions is that their replacement (401ks) often feature lower company contributions. More money now very more money later is nice if you're getting the same amount of money. Eliminating pensions in favor of 401ks is a cost saving move by companies to reduce their burdens down the road.
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May 11, 2015 19:19
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You get less money from a dc plan.
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May 11, 2015 19:20
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DB plans also are not nearly as prevalent currently. Neither this generation of employees or companies want DBs. Employees want the freedom to change jobs and companies want the burden off of their shoulders in the future. The loyalty of a company to an employee, and of an employee to a company is shattered compared to the Pre-1980s.
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May 11, 2015 19:25
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Db must have worked very different in the usa. Here you get a pension at X age the payments are 1/nth of your final salary done. Every year you work you get another nth.
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May 11, 2015 19:49
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Mine is calculated by the following equation: (final average compensation) * 0.06 * (years of service with company) = lump sum distribution. spf3million fucked around with this message at 16:39 on May 12, 2015 |
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May 11, 2015 20:08
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shrike82 posted:Is FI primarily an American phenomenon? New Zealand doesn't have free education, although it's subsidised by about 75% by the Government. Student loans on average end up around $32k for a degree. Healthcare is likely to remain free into the future. No maternity leave that I can recall although there might have been minor law changes. The recent retirement article comparing Australia and New Zealand pointed out that you could get by on the interest on $350k plus the pension paid by the Government. That is fine under the current scheme but with Kiwisaver in place (401k type of scheme) this will likely change in the future. When Government spending gets tight in the future changes will happen with the pensions and most likely based on how much your total retirement savings are. Given that kiwisaver has only been running for about 7 years I'm expecting things to change in the next 23-28 years about when I'm reaching retirement age. FI early on is a much safer option for me.
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May 11, 2015 21:34
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shrike82 posted:You get less money from a dc plan.
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May 11, 2015 22:08
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TraderStav posted:The loyalty of a company to an employee, and of an employee to a company is shattered compared to the Pre-1980s. Yeah this is the heart of it. I guess my point is that I think it was a sham to begin with, maybe you were rewarded if you didn't make waves, but the employee was just all the more screwed if they ever made anyone mad or disagreed with a higher up. There was never a good reason to feel loyalty towards a company you worked for, and any notion that they felt loyal to you was pure delusion. The second it becomes profitable to fire an employee, they are fired, this is true in 2015 and was true in 1950.
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May 11, 2015 22:13
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TraderStav posted:DB plans also are not nearly as prevalent currently. Neither this generation of employees or companies want DBs. Employees want the freedom to change jobs and companies want the burden off of their shoulders in the future. The loyalty of a company to an employee, and of an employee to a company is shattered compared to the Pre-1980s. Also the average age of a company has like halved since then. Does really make sense to rely on a defined benefit plan when the company can vanish in a year or two.
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May 11, 2015 22:34
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I disagree with the statement that this generation of employees made an active decision to migrate from DB to DC. It's been pushed by the corporates. Again, the average employee is going to see less from his DC plan than he would have from a DB plan, not to mention that the pension risk has been shifted from the firm to the employee.
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May 11, 2015 22:38
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shrike82 posted:I disagree with the statement that this generation of employees made an active decision to migrate from DB to DC. It's been pushed by the corporates. Either way, it seems obvious to me which one I'd choose, it's the one that doesn't shackle me to working for life at the company I started working at at age 22. It's beneficial to both parties in my eyes - your statement is only true if the average employee stays at a single company for a long time. Sure, it's great if you're a loyal busy bee who works in the same place their whole life, but is stagnant repetitive jobs at the same company for forty years really the best way for people to live? gently caress everyone who gets a jerk or a creep of a boss and feels compelled to leave, gently caress everyone who pisses someone off by disagreeing with them, gently caress everyone who wants to try running their own business or take time off to raise their kids?
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May 11, 2015 22:58
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I think the biggest problem with DC plans is that they're managed by the employee and most people are financially retarded, particularly for long-term investments. If you put in 10% of your income or whatever usually goes into DB plans when you have them and put them into a good fund in a 401k your whole working life, you'll have a respectable nest egg by the end that's probably roughly comparable to a pension, or at least comparable to the kind of pension that isn't in danger of going bankrupt. But most people put off those contributions until they're middle-aged (thus missing out on the most compound growth) and do dumb things like pick expensive bad plans or pull money out of their 401k to renovate their house or buy a boat. Basically humans are reasonably good at learning for things where you get a consistent feedback loop, but retirement only happens once. There is no learning from your mistakes when it comes to retirement.
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May 11, 2015 23:21
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shrike82 posted:Is FI primarily an American phenomenon? I feel it's very do-able in Australia, we've got generous wages and an adequate social security system (although it is slowly being attacked by our horrible ruling class). The spanner in the works here is outrageously priced property & rent in the major cities and ever-expanding surrounding areas. Obviously this can be got around by moving further away/sharehousing/van down by the river, but it's the major hurdle I face personally.
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May 11, 2015 23:56
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shrike82 posted:Is FI primarily an American phenomenon?
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May 12, 2015 00:05
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Jeffrey of YOSPOS posted:Yeah this is the heart of it. I guess my point is that I think it was a sham to begin with, maybe you were rewarded if you didn't make waves, but the employee was just all the more screwed if they ever made anyone mad or disagreed with a higher up. There was never a good reason to feel loyalty towards a company you worked for, and any notion that they felt loyal to you was pure delusion. The second it becomes profitable to fire an employee, they are fired, this is true in 2015 and was true in 1950. This might be true, but there are some that argue that there was less income disparity back in the 50's partly because WWII brought everyone but the very well connected into the same shitstorm and made them relate more to one another, and less likely to gently caress an employee over.
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May 12, 2015 00:24
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Jeffrey of YOSPOS posted:Either way, it seems obvious to me which one I'd choose, it's the one that doesn't shackle me to working for life at the company I started working at at age 22. It's beneficial to both parties in my eyes - your statement is only true if the average employee stays at a single company for a long time. Sure, it's great if you're a loyal busy bee who works in the same place their whole life, but is stagnant repetitive jobs at the same company for forty years really the best way for people to live? gently caress everyone who gets a jerk or a creep of a boss and feels compelled to leave, gently caress everyone who pisses someone off by disagreeing with them, gently caress everyone who wants to try running their own business or take time off to raise their kids? Again, I'd prefer if all of the compensation were paid in cash directly to me at the time I earned it. It would be most beneficial to me to let me decide how I want to save it, but most Americans/people are stupid and need some forced savings. If you have to choose between more money from a pension or less money from a 401k, the answer isn't as clear cut as you make it out to be. Not that it matters, pensions are on their way out anyway (because companies realized they can get away with contributing less if they switch to a 401k and employees are generally none the wiser).
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May 12, 2015 00:29
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