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In addition to the (possibly) unexpected amount of work, you sort of get tied down to a particular location with you own rental properties. Sure you can own remotely but that'll cut into your margins if you have to pay someone to manage it for you. I personally am investing in companies that pay dividends. I have a mix of lower yielding, higher growth companies and higher yielding, lower growth. Right now I'm getting right around 5% annual yield on cost with a mix of stocks, REITs, mREITS, and P2P lending. I try to weight them so that the high risk portions of my portfolio are a relatively small percentage of the total. I also added some munis on the recent bond "panic". Lately I've been adding stocks which have a history of consistently raising their dividends in the hope that they will continue the trend at a rate higher than inflation. I hope to eventually have enough monthly dividend income that I can work less hours or take a job which I actually enjoy. With a portfolio well diversified between the major industry sectors as well as various different income streams, I am hoping that this income will be relatively stable. This is basically known as dividend growth investing. As far as health insurance goes, I'm still young and don't plan on leaving my corporate job any time soon but I am hoping that Obamacare will be successful and have all of the kinks worked out by the time I am ready to "retire".
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Jul 24, 2013 03:44
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Pretty sure you can roll your pre-tax 401(k) into a Roth IRA in quantities of your choosing (once you lease your company or retire). These would be taxable events but you could choose to roll over only the amount necessary to minimize taxes for that year. Presumably you'd be retired so other taxable income would be limited. You can then withdraw these new contributions to the Roth IRA after 5 years. So the idea is to essentially establish a roll over ladder where you roll over some of your old pre-tax 401(k) every year so that 5 years down the road you'll be able to withdraw those contribution tax and penalty free. You would need something to get you through those 5 years but you if you were also contributing to a Roth IRA while working, you could start withdrawing those contributions to tide you over. Of course you would be limited to living on past contributions until official retirement age since withdrawing the gains would be penalized.
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Sep 6, 2013 00:27
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Not to mention he probably enjoys it. Also he definitely posts less when he's on vacation or off doing something.
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Jan 23, 2014 17:08
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It doesn't matter how much he's making now, just that he's spending <$25k/yr and is presumably happy. All because he saved up $600k and can now live off those dividends alone. Not getting why his current income is relevant.
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Jan 23, 2014 17:44
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I agree that he's said about all there is to say on the topic. But his family is still living that lifestyle for the most part: http://www.mrmoneymustache.com/2014/01/12/exposed-the-mmm-familys-2013-spending/
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Jan 23, 2014 17:54
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Assuming your Vanguard fund is VYM, that's about 3% yield. With $40k that gives you $1,200 per year. Add $300/yr in dividends for your other $10k in stocks. How do you plan on living off of $1,500 per year? How much are you adding to your savings per year? The Vanguard fund is already diversified so if you are ok with the yield and the companies held in the fund, no reason to diversify.
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Apr 1, 2014 16:07
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While we're talking about cooking, has anyone ever made their own beef jerky? I recently discovered that you can make it with plain old ground beef. Not only is it cheaper than a steak it saves me the hassle of slicing up a steak super thin. I love some beef jerky but drat is it expensive in the store.
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May 29, 2014 20:41
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I've been trying to mix up my commute since I took this job and I recently started biking to work a few days a week to go along with my occasional public transport use. The three options are: Bike - 15 miles each way, it takes me ~1:15 to go each way. Ongoing cost is minimal, will presumably need to replace tubes and tires eventually, plus a little elbow grease for maintenance. Drive - 16 miles each way, take 35 minutes in the morning (if I leave before 6:00am) and 50-60 in the afternoon. I worked out the cost to be about $3.75 per day including gas and maintenance. This is the "fastest" route but I feel like my soul is slowly dying when I add up the amount of time I spend sitting in my car in traffic every month. Public transportation - bus A -> light rail -> bus B -> half mile walk. This costs $4.75 per day and takes 1:15-1:40 depending on traffic and if you catch transfers. I do enjoy being able to read on the bus and would probably do this more often if I didn't have to do so many transfers. It kind of sucks getting out of the reading groove when you have to pay attention to what stop you're at, then using bus tracker to see if you need to sprint to the bus (or suck it up and wait an extra 20 minutes), and jockey for standing space on full buses. Monthly pass would reduce this price slightly (a few dollars per month) but I ride infrequently enough to make it not worth it. I only recently started biking at the end of October, but it is by far my preferred way to get to work. I was worried about how I'd hold up in the Chicago winter but it's been fine so far. I average 3 days per week biking and highly recommend you give it a shot. How far would your bus rides be? Would you be able to bike the whole way?
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Nov 25, 2014 18:22
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T. J. Eckleburg posted:My commute is nearly 20 miles, and the area right around my work is more or less the worst possible safety conditions for a cyclist: high traffic, narrow shoulders, no bike lanes, no greenways, high speed limit, almost entirely multi-lane roads. I did it once and learned that biking in those conditions is my past my personal threshold for danger, plus that distance takes me 2 hours each way, which is just too much. Before I started biking, I considered bus A -> train -> bike or bike-train-bike as options but quickly learned that I couldn't take a bike on the train during the M-F rush hours. Also considered leaving my bike at the bus B/train stop but in the end decided it'd be too at risk of getting stolen. I'm assuming you already considered the various bus/bike options. It'd be great to get that every-30 bus out of the cycle. All I can say is to just give it a shot one day. Worst case you don't like it. I don't think there is much money to be saved (unless you sell your car as was suggested) but I think the other benefits are well worth it. I feel so much more awake and alert when I get to work, and obviously it's healthier from an exercise perspective. Plus everyone thinks I'm a badass now when I roll into work on my bike when it's 15 degrees out.
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Nov 25, 2014 20:11
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Don't admit that over in the SSD thread. They'll guilt you into replacing it if you care about your data.
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Nov 27, 2014 03:22
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surc posted:Obviously this would be pretty anecdotal, but any mental tips for getting out of a "done with work, gotta unwind!(eat out/buy alchohol/buy media)" mentality?
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Feb 12, 2015 02:05
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Inverse Icarus posted:My wife and I keep separate accounts, try our best to split everything evenly, and we "run the numbers" together once a quarter to see where we're at and plan where we're going.
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Apr 9, 2015 19:02
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To me, the most interesting part is when it comes to retirement. Are you both going to retire independently and just pay into the shared account out of your individual retirement accounts? What about trying to decide how to spend retirement? What if one person saves $2 million for example and the other saves $500k. While you could most likely just go on living your normal lives and just stop working but what if the $2M person wants to travel extensively or buy a beach house but the $500k partner can't afford it? I guess the answer probably is that these types of goals/plans are discussed periodically over the course of your lives and a general consensus/agreement is reached. In that case it wouldn't be much different than retirement goals for couples with combined incomes. For me it seems a lot easier for people's goals to diverge over time if finances are separate but good communication should prevent that I suppose.
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Apr 17, 2015 18:21
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He's done a few case studies on lower income people: here, here, and here. Some of the recommendations are  but he does at least make the attempt.Folly posted:I think it was something like, "you need a relatively high income to retire early, but the spending reductions work well for everybody." Really, his original schtick was pointing out that "middle class" Americans are, in fact, quite wealth and just too privileged to see it. I don't really read his newer posts anymore unless it's a really compelling topic. Doesn't bother me if he wants to review financially-related products, not going to hate on him for that. He's said his piece in a million different ways by now.
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May 8, 2015 18:20
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Also his family of 3 has been living on $25k for the past 2 years with "completely reckless spending".
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May 8, 2015 18:40
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I'm pretty sure he's mentioned he plans on not giving his son much money, or not paying for his college or something along those lines. If he does grow up and decide to reject MMM's philosophy, I don't think it would be particularly noteworthy. People gotta find their own way no matter what their parents do or think.
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May 8, 2015 20:03
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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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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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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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Pompous Rhombus posted:I use Toshl for tracking expenses, it syncs well with the mobile app. Mint doesn't really work too hot if you're overseas.
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May 24, 2015 17:30
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The 4% safe withdrawal rate presumably is set by the assumption that you can withdraw 4% of your net worth every year and the market will "replenish" what you withdraw. If you have to pay taxes on gains, it'll depend on the rate you pay on those gains. Say you pay 25% for simplicity. If you have, 10,000,000 DKK and take out 4%, that's 400,000 DKK that you would need to assume you would make back in gains. If that is taxed at 25%, you're left with 300,000 in gains. So in order to keep your withdrawals equal to your assumed 4% minus taxes, you could withdraw 300,000 DKK, assume the market gives you 400,000 DKK in gains (the basis of the 4% SWR), taxes take 25% of that or 100,000 DKK and you're left with the 10,000,000 starting point. 10,000,000 - 300,000 + 400,000 - (400,000 * 0.25) = 10,000,000 So yes, if you accept the 4% SWR rule, then take 4% * (1- tax rate%) = Danish SWR. spf3million fucked around with this message at 21:23 on Oct 13, 2015 |
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Oct 13, 2015 21:21
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Struensee posted:this basically leaves me finished saving by the time I'd retire anyway (not really, but almost). It looks like I'll have to look very hard at tax deferred accounts and tax advantaged accounts and saving up a nest egg that'll carry me over until I can withdraw from those. If you can expect a guaranteed income in retirement from the government, then you wouldn't need to take withdrawals from your investments equal to your expenses. If you retire early, you could theoretically take more than 4% out every year to cover expenses until the pension kicks in. The math isn't very hard, you just have to make some assumptions, figure out how much you need to spend per year and for how many years.
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Oct 14, 2015 19:11
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We have a similar set up as you, we each have $X per month of "allowance". But we also have an "eating out / date night" budget. If we eat out alone (such as buy lunch at work) that's allowance. If we're together, it counts against the eating out / date night. This really helped my spouse come to terms with us having allowances but not feel like we could never spend money on ourselves. I think you could definitely do something similar with any category, doesn't have to be date nights. It could be $100/ mo on furniture / decorating. That way if she wants that $1k bedroom, you two have to save for 10 months, or alternatively start looking for cheaper options.
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Apr 4, 2016 13:50
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I added a small number on my W4 to have my employer deduct a little extra each paycheck to account for taxes I receive on dividends held in a taxable account. I can ballpark how much my dividends will be annually and back calculate how much tax I should be paying bi-weekly to come out roughly even at the end of the year.
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Apr 11, 2016 01:20
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Congrats man, that's awesome. I'm hoping to go part time in the next 3-5 years, still trying to make that large number grow a little larger. While you're updating the OP, a blog I found recently that I really liked that might be worth adding to the OP was Living A FI.
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May 6, 2016 03:30
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Yeah he's pretty much done with the blog. That's actually one thing I like about it, he actually made a post about how good blogs eventually come to an end.
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May 7, 2016 03:58
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Sgt67 posted:Just in terms of investing: Who do I talk to about that? Can I do it myself or do I need to talk to a stock broker or...? Is there any institution I should trust over another, for example? Sorry I have no idea on the terms or processes for doing such a thing, never done it before. The main reason my money sits in a pile doing nothing. That's the basics of how to invest. Now go read some stuff about what to invest in.
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May 18, 2016 05:23
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This guy has a post worth reading outlining simulated draw down scenarios if you had retired at the worst possible times.
spf3million fucked around with this message at 21:53 on Oct 5, 2016 |
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Oct 5, 2016 21:51
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Blinky2099 posted:it sounds like no one is ever gonna agree to a safe ish number so I'll just aim for being conservative and quit around 3 to 3.5% withdrawal equivalent
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Jan 7, 2017 17:31
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My take is that people often under estimate the potential time requirement for such an endeavor. That and maintenance costs can escalate quickly. Getting in on a good deal with well understood maintenance costs is key to success. Many landlords to be don't have the expertise to due the required diligence.
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Jan 25, 2017 04:39
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Jeffrey of YOSPOS posted:Weirdest one I've seen is accounting software that only lets me contribute an integer percentage of my paycheck to a retirement account. This meant I couldn't max it out, because n% was under the annual limit but (n+1)% was over it. The benefits guy who was configuring it for me seemed very confused and mystified by me wanting anything else so I dropped it.
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Mar 15, 2017 16:52
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Plus if I were to miss the rules change, I'd expect to have more medical expenses in the future anyway so more chances to reimburse myself. Or if I were to manage to not need the funds at all, the worst case scenario is I withdraw the HSA funds like I would a t-IRA when I hit retirement age.
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May 8, 2017 19:23
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I think it's more the system and the hospitals than the doctors. The doctors don't have time to care about who's in their network.
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May 13, 2017 21:17
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81k posted:I also have a 60k emergency fund in cash, which is probably way overkill (is it?). It's probably not a bad idea to have a large emergency fund if your don't have a good handle on where your money is going every month. Also good to have a large e-fund if your job is in a cyclical industry which is currently in a boom phase.
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May 22, 2017 17:12
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Beast Pussy posted:My first question is, how can I best invest my money that I would be able to get at it in a much shorter time than usual (say, 5 years from now) and it still make me some returns? Then, is it really linear enough that if I saved my disability money for ~5 years @ $22500 a year, I'd be able to pull out an extra $500 a month without ever running out? For now just assume you're not able to get any preferred tax treatment, so that leaves you with standard brokerage accounts. You're not in the business of picking stocks (nor should be) so you're going to want to invest in low cost index funds with extra money you're able to save above and beyond your emergency fund, living expenses, and debt payments. Regarding your last question, the market is going to go up and down. The idea is that on average you should be able to pull out 4% of your total every year indefinitely (probably better to be conservative and don't plan on more than 3-3.5% rather than 4%). Some years your investment might grow more than that 4% and some years it'll be less (or even drop in value!). I'd personally recommend not focusing on the withdrawal part but first pay off your debts, then work on saving a portion of your income every month so you get used to not living paycheck to paycheck. Once saving $X/mo becomes a habit let it keep accumulating for a while and in the meantime read up on tax treatment and index investigating. After a few years, you'll have a chunk saved up and hopefully invested. You can then let your $500/mo (or whatever 4% ends up being) keep compounding or you can withdraw some every month to supplement your income. Alternatively you can just stop contributing every month and let your investments keep working.
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Nov 10, 2017 16:41
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Beast Pussy posted:My military money isn't taxed, how does that change things on my end? Your emergency fund should be enough to get you out of a jam whether that's a car problem, a medical problem not immediately covered by the VA, legal issues, an emergency flight, etc. Most people recommend 3-6 months of living expenses but since you have a guaranteed income, less would likely be ok. Like a few thousand dollars minimum? Enough to keep you from putting it on a credit card and getting back into to debt.
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Nov 15, 2017 06:29
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TraderStav posted:I imagine it did. Did it extend or shorten your target date? My gut tells me it'll extend it for me. I enjoy what I do (for the most part, as much as one can) and removing the stress of HAVING to get the paycheck may actually make it even better. I'm in operations for a utility so things are always hectic, moreso during horrible weather. Those times I enjoy, it's the time in-between where everyone still acts as there's an emergency going on about dumb stuff. I can see being much more mellow during those times. I think FU money will extend my time but only if I am able to take more PTO and/or go part time.
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Apr 8, 2019 03:40
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Cast_No_Shadow posted:Depending on how long you want in to last and how much risk of ruin you are willing to bare 2.5% might he more sensible for longer horizons.
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Jul 11, 2020 21:30
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I'm curious if the Mrs. is concerned about money or if she just likes having OP out of the house all day.
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Aug 5, 2021 17:54
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nnnotime posted:So far the FIRE plan seems like a good idea to execute. Anything obvious I'm missing out? I don't have any fancy expenses coming up. The only thing I would splurge on are computers and high-end televisions every 5 years. No fancy cars, boats or exotic trips are in my future. It looks like you have the financial side pretty well figured out, a couple things to think about : Have you accounted for taxes in the investment income you plan on withdrawing? Do you have a plan for what accounts you'll withdraw from? Sounded like you're mostly in taxable accounts, any Roth IRA funds available to withdraw contributions without a tax hit? Do you plan on doing a 401k to Roth IRA conversion ladder? Assuming you're set on the financials, how are you on the non-financial planning front? Do you know what you're going to do with all of your time? Are you sure you won't want to spend more now that you have time for more hobbies? Do you have a plan for what your days/weeks/months will look like beyond simplify not being forced to go to work anymore?
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Nov 24, 2021 15:08
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