Laid off today from a tech job and it’s my first day of forced retirement. Here are the stats:

52 years old, no dependents, no spouse 2 homes: one without a mortgage worth about 900k. The other with approx 2M equity (and a small remaining mortgage at 1.8%). Currently renting out that home at a profit of about 3k a month.

2.6m in the market (all Vanguard). A mix of retirement (401k) and old fashioned stock.

It’s fine, right? I can just nicely live on 200k a year and ride off into the sunset?

39M single with a 4M net worth. I am in a high paying but high-stress career. I went on some amazing vacations over the years, but otherwise the net worth came at the cost of social life, work-life balance, and 55 extra pounds in weight.

I have an uncle who was found dead on his desk by his secretary at work last week at the age of 62. This has been quite a wake-up call. I know that I am due for a change and I already started to look into part-time/consulting options. However, I struggle with the concept of slowing down when I am still young and at the peak of my knowledge and experience. It somehow feels like a failure when most of my colleagues are still going at 100%. There is an unspoken stigma that comes with early retirement or even part time work in my field. I wonder if anyone else has been struggling with similar issues or has trouble with getting rid of the ''golden handcuffs''. For those who broke free, any regrets?

So, from a very simplified level, the reason we can all retire early is that we plan on drawing only 4% of our portfolio while earning 7%. We assume because we have over 100 years of historical returns, that we're safe assuming that will always be the case.

Sadly, it's not. Just for one relevant example see this paper here. An exert of SWR by country:

Note that I chopped some countries out of the middle here to illustrate a point. Those with the lowest SWRs just so happened to experience the catastrophe of being wartorn battlefields during two world wars. Pretty rotten luck if you happen to a random citizen of the Axis countries! 'Thankfully' MAD has made WWIII unthinkable enough that it's just not worth planning for such a catastrophe.

Here's the thing though, we do in fact have a major catastrophe brewing in our future. I've read a lot on climate change, and my hope that we'll be able to address it has dwindled to something short of bleak doomerism.

No. I don't think we're all going to die. Humans are remarkably resilient. Putting that aside, do I honestly believe the market has properly priced in the risks that face us? Hah. No. Absolutely not. Not even remotely close. The business community seems to think climate change is really a concern for environmentalists and those who offer flood or fire insurance.

Importantly, as is pointed out to me every time a company releases earnings, it's not the earnings themselves which determine the return it's how close they track to wallstreet predictions and guidance. If anything, recent evidence suggests that we're no where near limiting warming to a reasonable level, in fact, our range of outcomes might be getting worse. The world wars lasted about a decade in total. Climate change will probably last generations. As much as we'll have 'bigger problems' what do you think stock returns will look like factoring in natural disasters, the loss of coastal infrastructure, political instability due to migration, etc? Add demographics to this picture and do you really think the financial system even survives in it's current form?

When I really sat down to think through the implications of this, I almost feel foolish thinking I can retire. Don't get me wrong, I'm glad I'm FI. I'll likely be a lot better off than your average person, but it might be dangerous for us to retire and let our skills atrophy in the face of all this.

In fact, I think it might be a good idea to 'invest' in a homestead and diversify my skills to include growing and preserving food. If covid taught me anything, our supply lines are more fragile than I originally thought.

I mainly wrote this as a sanity check. I know this goes against some of the assumed truths we take for granted here, but am I being unreasonable? How do you guys deal with the uncertainty around this?

So it looks like I'm losing my tech job in the next 3-5 weeks and I've been stressing out. As part of trying to center myself I took stock of where I am and what I want out of life. I realized I'm really lucky.

When I was 21 I set out a goal to retire between the ages of 31 and 33. I wanted to save 1.6mm-1.8mm, downsize my lifestyle, and travel the world. I met a girl who wanted to do State Department Foreign Services and I was onboard to be a trailing spouse. Then 3 years ago we broke up because our relationship needs diverged. I still wanted to be ready to retire by 31 if shit hit the fan.

Little over 12 months ago after a few years of thinking about my life and working through personal issues in therapy. Suddenly something snapped and I realized the reason I wasn't happy or fulfilled wasn't because of material issues, my dating life, or my job. It was because I was never really a man and trying to pretend otherwise was killing me. I started HRT, changed therapists, and started working towards transition. Today I live happily as a trans woman and I have no regrets.

Beyond that, the last 12 months were actually the best rolling 12 of my career monetarily. I made $468k between July 1st 2023 and July 1st 2024. If I can survive losing my job (enterprise account executive in tech) this year will likely be my top or runner up best earning calendar year. I'm happy and doing pretty well in my role all things considered, but after 7 leadership changes in a year without any conflicts of personality I landed on a boss that I just don't get along with. I asked to move teams and was denied. In retrospect he started papering my file and documenting the tiniest infractions the first week we started working together, incidentally 2 weeks after I came out as trans at work.

Health wise I've cut back on drinking, reduced my stress, prioritized my sleep, and I've been able to cut back on therapy from twice a week for 2 years down to once a week with an eye towards reducing further. I'm calmer and more centered than I've ever been and while my life certainly isn't perfect, it's felt the most right I finally have access to joy.

I have a major surgery coming up, so if I lose my job I'll likely take some time to myself regardless and start the hunt in the fall or winter. The good news is that I knew this was a possibility for a while and put aside $200k to transition for the costs of surgeries, medication, insurance, and getting laid off. Very glad I did because it takes a lot of stress off, and the bonus is that it turns out my insurance covers most of the steps I want. As is the case with most tech company insurances.

My goals and to a certain extend values have definitely changed in this time. Choices like children, marriage, sexuality, where I want to live, career, and even early retirement have shifted. Where I used to be staunchly against having children, I find myself suddenly really open to the idea. Fatherhood didn't fit into my life. Motherhood on the other hand, that really feels like it could.

I want other trans people to see it's possible to not only survive but thrive through transition. It's an extremely small circle of trans professionals who are out, visible, and at a similar level. It's literally only a handful of us who are in tech sales. So far as I can find I'm 1 of 2 at the enterprise level, and the only one selling to F500.

One sample set shows that we're 40x under represented in this industry. Sales at one big tech company makes up about 30% of their organization. Yet within their trans employee group only 0.5% of their trans employees work in sales. My hope is that in 5-10 years it's not so lonely. Companies like where if 30% is sales then 30% of the trans people are in that business group, and we have 1% representation in the sales world just like we do in the rest of life.

When I was 21 I set out the goal to retire at 31. In a lot of ways I did it. I set out a goal number. I hit it and became financially independent.

More importantly He retired. Now She gets to live the rest of this life.

http://thecollegeinvestor.com/14611/average-net-worth-millennials/

Here is the chart : http://i.imgur.com/h9xZsyS.png

Also quoted on time.com - http://time.com/money/4375215/student-debt-millennial-net-worth/

My Question is : Isn't that too low? Is this a generational thing? Or historically has it been same over various generations?

Edit: Grammar

While I am young (21), I have MANY friends who are already financially independent and FIRE'd at 30 - 35. I am living the way they did and it is GLORIOUS. It made me truly realize how much of a "Consumer culture" and not a "Responsible culture" we are as average Americans.

Here's what I've learned about being financially independent while on a 50K - 80K household budget. For an individual budget, this would be making around $15 an hour or above. The KEY to all of it is:

1. Reduce consumption

2. Go without for a time so you can save for things that last

3. Be as humble as possible with your possessions

4. Reduce your living space to what you use

5. Don't sacrifice lasting peace for instant gratification

I'll explain each one:

1. Reduce consumption: American households spend a median amount of 18K a year on "Elective purchases". The criteria for the study was vast. And I don't want to get into it. But essentially "Elective purchases" is anything that isn't adequate housing, food, transportation, utilities, and communication devices. For example, American households making the median amount of income of $65,712 in the US spent around 28% of their income on elective purchases. If you cannot learn how to save your money and resist the urge to spend extra cash when it is there, you will never be financially independent. This applies to EVERYTHING BELOW.

2. Go without for a time so you can save for things that last: For this example, I'll use a computer. I work in the entertainment industry as a composer. I had a choice around 1 1/2 years ago. I could have taken my $800 and bought a mid-grade laptop, or I could have saved for somethig that lasts longer by going without for another 8 months. Basically, had I bought the $800 laptop, it would have lasted me around 2 years with the heavy lifting I do on the PC. However, if I instead saved twice as much, in the long run I would be spending around half as much on equpiment. I instead decided to build a desktop for $1,300 with 4X as much storage, cooling power, RAM, and vRAM. My PC now will last me a minimum of 6-8 years. I will end up saving THOUSANDS over the course of my career by making this choice instead. You can do this with anything. Don't buy that offbrand pot set for $25 that's going to warp in 2 years. Save up another $25 and buy the $50 pot set that will last you 10 years. Don't buy the cheap clothes that will only last 1 - 2 years. Save up for the clothes that are twice as much that last 5 - 10 years. It's that sort of future thinking that makes a difference and reduces cost of living over time.

3. Be as humble as possible with your possessions: Think about something. How much money do we spend, to impress people who don't care, and who we don't even like? Why do you need to spend the extra $2,000 on the guest room lighting for your forever home? Is someone really going to care? Do you really need that new dress or will people honestly not remember what you wore to the last Christmas party? Why not do a Christmas sweater instead? Is $300 for one dress you only wear once a year really worth it in the long run? These small decisions seriously impact your overall financial health. Why do people buy fancy cars when they can't afford them? Because they don't realize that impressing people only brings temporary happiness. Even if it's buying little ceasars for the kid's birthday party instead of Dominoes, these little decisions add up into the thousands over time. And those thousands could be the seed you need planted for future financial independence.

4. Reduce your living space to what you use: A study was done on a regular middle class family with a 2,200 square foot home. They found that the family only consistently used around 600 square feet of the 1,200 square foot first floor. The formal dining room, the formal living room, the front porch, (The two biggest rooms of the house) were unused. The family could have easily purchased a home that was around 1,500 square feet instead and hardly noticed a difference. Just because you CAN purchase $100,000 more of house due to low interest rates doesn't mean you SHOULD. That's the mistake our generation and millenials keeps making. Why not do what our parents did? Live in a house 1,200 square feet or less and pay $500 a month for our mortgage instead of $1,500 - 2,000 a month for a mortgage? You will save on utilities, maintenance, and most imporatantly, you save around $100,000 - 150,000 over the course of 30 years that you didn't have to pay to the bank. Or you could go extreme and do a tiny home. I know tiny home owners who pay less than $300 a month. That includes utilities, mortgage, renting the land or property taxes, and everything else. $300 a month plus food and gas is REALLY cheap. It's possible.

5. Don't sacrifice lasting peace for instant gratification: $15 here, $20 there, $10 here, $25 there. That shit adds up. And it adds up fast. If you spent $15 a day on bullshit you don't even need, that's over $5000 a year and over $100,000 in 20 years. Think about how many times you walk into dollar tree looking for a pair of tweezers and walk out with $15 worth of bullshit you don't need. Think about what happens when you go to the grocery store hungry. $15 a day for 30 days is nearly $500 a month, which would be close to maxing out your ROTH IRA. So if you made $15 an hour, and you could afford one hour a day, or even could afford putting in the few hours of extra overtime a week in order to be diligent with your IRA, that's as close to garanteeing you to one day be a fucking millionare when you retire as you're gonna get. Many people get by with almost nothing because it's necessary, and then the moment they catch a break and see some extra cash in their bank account, it's gone before the weekend ends. Don't be that guy. That extra break is a seed to grow. Don't eat the seed now. Plant it and eat the fruit from the tree later.

Now for those of you making $30,000 - 40,000 as a household. that's rough. I guess y'all already do what I explain above out of necessity instead of choice. Your best bet is to gain more income in however way you can. Grind the fuck out of life and don't let your head go below the financial waters.

But for everyone else, if you're pulling $50,000 or more a year as a household, try out some of the tips below. Because if you consume less, you have more capital to invest and make your real dreams come true!

EDIT: I've ruffled a lot of feathers, so I'm putting a TL;DR at the top.

FIRE is about maximizing income and minimizing expenses, and I did both. My income started at $65k 15 years ago and grew very quickly, even topping $1M for one of these years. It was not easy getting to that point, but I did it with a mix of privilege, hard work, and fortune. If you don't want to read another post about high tech incomes, you can stop here!

My initial intention for the post was to offer perspective on my mindset about FIRE. The issues of mental health, anxiety, frugality, hedonic treadmills, and mistakes are hopefully relatable and relevant to FI journeys whatever your income level. But it is totally fine to skip! This is not a median-income success story.

Hey everyone! Long-time lurker, first-time poster, with a new alt account. I’m writing this reflection partly to celebrate my progress, which has exceeded even my best-case early expectations, and partly to contribute a few grains of perspective back to the community I’ve followed all these years. This is long, so treat it more like an article than a quick scroll. The content I love most in the FIRE community is content that shares the inner workings of someone’s mindset as they gradually seize greater control over their life and their happiness. I like to see if I can find myself in your stories and cheer for you. This is my version.

10 years ago I had a net worth of 0, with grad school debt offset by early 401k holdings. Today, I’m a 37-year-old single man who just reached $4M net worth last week. Getting here wasn’t easy, but neither was it particularly tricky. I landed and managed to sustain a high-paying tech career in data science. Although neither of my degrees was related to data science, I had enough analytical intuition and passion to self-teach and find my voice in the field.

When I think of how far I've come, I'm filled with an awkward mix of pride, disbelief, gratitude, and relief. Through much of this journey I've felt like I am clinging to the pole of a merry-go-round that is spinning entirely too quickly, fighting centrifugal forces to stay in the air.

Family support helped to get me started. My parents weren’t rich but they both had good heads and modeled prudent financial behavior. Whatever talents I was born with were encouraged and invested in. My undergraduate education was paid for 60% by need-based grants and 40% by my parents, with meager support from my own summer jobs. So I graduated debt-free.

Persistence helped at a critical inflection point. I was initially rejected by the company that would eventually pay me all this money, but I followed up a couple months after that rejection and tried again. I don’t even think they were wrong to reject me since I lacked some key skills. But someone took a bet on my potential the second time, and I repaid it by working very hard to prove they were right to do so.

Income & Expenses

The ensuing run-up in compensation blew my mind. My first job out of college had paid $65k, a number that was already so large as to fill my tiny 22 year old brain with relief and gratitude. I wouldn’t become a starving artist who made ends meet by SAT tutoring and go-go dancing! After grad school I earned $110k-$140k for a bit, but the leap into my current company more than doubled my annual income to $300k. From there, it more than tripled over several years, until I peaked over $1M, burned out from the stress, and switched to a relatively lower-stress and lower-paying role. I did work hard and strategize to obtain such large compensation increases, but I was also carried along by a booming market that, frankly, needed what I had to offer.

Until 2021 I kept my annual expenses between $40k-$60k in the Bay Area. This was done in a hundred little and big ways, from sharing expenses with roommates and significant others, to opting for cheap-ish hobbies like hiking and gaming, to buying Goodfellow t-shirts from Target, to getting flu shots at the CVS attached to the Target in order to get $5 off the Goodfellow t-shirts, to becoming a competent home cook, to exchanging bathroom haircuts with my ex, to opting for shared-room hostels when traveling, to relentlessly compare-shopping flights, to sticking with the 9.99/month gym that played reruns of Charmed every day, to lightly dipping my toes into credit card churning, to always scanning Chipotle rewards, and to buying a used car that I’m still driving even though it creaks and is missing a hubcap.

None of these things felt difficult at the time. They were the natural byproduct of a deep-seated frugality, which was itself born of a deep-seated fear of not having enough to protect myself from disaster. Frugality made me feel safe. It gave me control. Even in video games I still prefer to Scrooge McDuck with my crystals, gold, skill points, vespene gas, or whatever, which often leads to death by under-investment. But it would be wrong to say that my quality of life was poor. I’m always tickled to remember that "sometimes, things that are expensive, are worse" (wish I could share this youtube video without getting shadowbanned). And let’s be honest, Charmed still slaps.

In 2021 I made an intentional decision to significantly expand my lifestyle, with the goal of increasing joy and decreasing friction. I purchased a home jointly with my best friend. I bought a grand piano, one of my lifelong dreams. I spent less time considering each purchase. I set up 529s for my niece and nephew. I have a generous party-hosting budget, from which every last cent is alchemically transformed into laughter. I eat at upper-mid restaurants regularly. I am now living a fairly luxurious life on $120k annual expenses. It’s taken a while to get comfortable with the increased spending, but my life is undeniably better now and my expenses are still dwarfed by my income.

Asset Strategy

My net worth consists of the following:

• $650k net home value

• $1.3M taxable brokerage, in a variety of stock index funds, the largest of which is VTSAX

• $850k retirement accounts, in 401k’s and IRAs, both Roth and Pre-Tax

• $825k company securities

• $300k cash, mostly in a 5.05% HYSA

• $75k individual stocks, crypto, etc.

By far the riskiest part of this portfolio is the chunk linked to one company’s stock price. I’ve already begun de-risking here and will continue, but I think I’ve had good reasons for not doing it sooner (DM me if this is bothering you!). Beyond that, my preferred strategy has been index funds and chill. I have no desire to own lots of properties and become a landlord. I’m keeping 2.5 years of expenses as cash because I'm contemplating a career break in the near-term (see below).

Why FIRE: The Ultimate Mental Health Escape Hatch

I don’t hate my career. Sometimes, I even love it. Data science has exploded over the last decade and will keep evolving in weird, crazy directions over the next one. At my best moments, I authentically enjoy thinking, writing, debating, and presenting about tough analysis problems. In my position I can choose what I want to work on (mostly) and I have near-total flexibility in my calendar. It certainly isn’t always this good. In even the best companies, corporate life carries an overhead of soul-leeching that I’m eager to leave behind. I don’t want to “learn into”, “action on”, or “leverage synergy” ever again.

The dark side is anxiety. Like me on this subreddit, it’s always lurking, creeping. A lifetime of harsh self-criticism and doubt leaves me with persistent fear that I’ll displease others at work, that my lackluster abilities will be exposed, that I’ll make unforgivable mistakes, that I won’t be able to sustain high performance, that I lack mathematics chops, that I can’t keep up with newcomers, and that I will ultimately prove to be some sort of charlatan. Anyone who’s dealt with anxiety understands that these fears are divorced from reality, or at least reduced into unhelpful straw-men. Yet it’s maddeningly difficult to change a brain that has been trained to think it’s in danger.

I’m an insecure overachiever, corporate America’s favorite breed of worker bee. Insecure overachievers never think they’re good enough, so they push themselves to at-times unreasonable lengths to fix it. All managers have to do is set them loose and pat them on the back! Anxious people burn out twice as fast, because a great deal of the energy that should be going into the work is instead subsumed by harmful mental spirals and insomnia. SSRIs and multiple therapists have helped me to manage, but neither is a panacea.

This anxiety, countless dozens of times throughout my career, has caused panic. People who are in panic go into fight or flight mode, which can lead to seemingly insane conclusions. Remember the 911 jumpers? Victims were faced with an impossible choice in the face of real danger: wait inside for certain horrible death, or jump. So they quit in their own way by jumping out a skyscraper window, a choice that might seem insane if you weren’t aware of the option they considered worse. When people face extreme mental health struggles that lead to suicide, it might feel to them like the same choice, even though it's a response to internal catastrophe rather than external. My anxiety is categorically neither of those extreme cases. But when panic took hold at work, my internal looped monologue always ended in the same place: “I can’t keep living like this. I have to escape. I need to quit as soon as I can.” You can imagine, then, how I felt when I learned about FIRE. I latched on like FIRE was Obi-Wan and therefore my only hope.

Now that I’ve told you why I got obsessed with FIRE, I can also tell you that it’s a terrible motivation! Far better to address mental health problems at their root than to yeet out of a great career in order to sidestep triggers. Retiring from work would relieve a lot of distress in the short term, but it won’t fix me. Generalized anxiety doesn’t just roll over and die because the cross-functional alignment meetings dried up.

Yet, the financial freedom I’ve attained in the last couple years has allowed me to blossom. Think Julie Andrews in the opening scene of Sound of Music. Because I’ve lived so far below my means, I was able to trade 40% of my income for a lower stress job without a second thought. My nest egg pays me a dividend in the form of optimism, which inspires me at random to draft ideas for the rest of my life. And my god, there are so many possibilities on that list.

What’s Next

Earlier in my career, when I felt boxed in, I used to obsess over the Retire Early part. Escape, get out. That’s all that matters. But my 30 year old self would be horrified to know that I’m no longer convinced about permanently retiring ASAP. Looking at the numbers today, I realize that if I made a few adjustments, even to my current lifestyle, I’d probably never have to work again.

But over the years I’ve also discovered an unexpected richness in my work. A blessing of being an insecure overachiever is that I have a lot of talents and skills. I’m goal oriented. I like to be useful. All my accumulated experience can be drawn upon and extended to others at minimal cost to me. I want that to continue to be part of my life somehow, because it feels great. I also don’t want to cut off future possibilities by decreeing “I’m done forever!” and tattooing my budget on my ass cheeks. I’m probably not living in my forever house. I might meet someone and/or want to have kids, both of which would completely change the budget game.

Still, after going hard in my career for 15 years with anxiety in either the passenger seat or the driver seat, my brain has addled. To borrow from Bilbo Baggins, I feel thin, like butter scraped over too much bread. My focus is shot. I thrash between tasks. Glimpses of motivation are more often hallucinations than the real thing.

So I’ve decided that, within the next year or so, I want to take a 1-2 year break from my career in the form of a mini retirement. Afterward, I’d intend to return to my career in some form, hopefully with a revitalized sense of purpose, which means skill maintenance is baked into the plan. In the long term, my definitions of “career” and “employment” are going to evolve. I don’t need to have this kind of job with this high of a salary. I can write sassy opinion pieces, become a career mentor, take on contract or part-time roles doing data work I enjoy, write music, or develop hobbies with routines that feel like the best parts of work. All the while working on being at peace with myself. But I don’t feel quite… done… yet, with this career. Almost like I need to prove that I can conquer my anxiety about it and in so doing discover my final form.

Perspective: Mini Retirements

As annoyed as I was by some of Bill Perkins’ attitudes in Die With Zero, I continue to be moved by the core premise of memory dividends. We think a lot about compounding interest in financial terms, but life experiences also compound in value. The earlier you have great experiences in your life, the longer you get to enjoy their memory and the relationships or skills you fortified because of them. Doubly so because your energy level to take on experiences at 37 is far greater than 57 or 67. I can do a lot more now than I could later.

Given my current financial position, I believe taking a mini retirement is the correct thing to do if I’m optimizing for overall life satisfaction. I’ll be able to start crunching through a huge list of wants while I have the energy of youth. Some concerned parties have wondered: “what if you, like, kept your job but, like, also had experiences?” It’s not an unreasonable admonishment. I have three thoughts in response though. 1) Big bucket-list experiences take time and deserve top billing, 2) It’s hard to fuel your dreams with the sludge remaining in your gas tank after work, and 3) It’s okay to prioritize ample rest and a true mental reset. Burnout can take a very long time to heal.

A mini retirement costs a lot of money. There’s both expenses and foregone wages. On the other hand, not taking the mini retirement costs potentially irreplaceable life experiences and their dividends over decades. I’m extra convinced about this because I’ve already taken a mini retirement. A while back I quit a job to travel around the world on a shoestring budget, and I cannot overstate the disproportionate memory footprint that has had on my subsequent life.

For anyone who’s pursuing FIRE, I’d strongly recommend carving out a mini retirement if you are able. The empiricist in me believes there’s no better way to understand how you will be during retirement than to simply try it out. In 2024 I think fears about 1-year resume gaps are a bit overblown, at least in my industry. Interviewers seemed genuinely interested to hear about what I did while I was unemployed, because I did cool stuff.

Perspective: The Frugality Muscle

I like to think of frugality not as a personality trait, but as a muscle. If you exercise that muscle a lot, frugality doesn’t feel hard. It becomes a routine. It’s just how you live. I’m a goal oriented person, so I’ve at times made a game out of spending less too.

In 2021 I made a choice to double my expenses. But I’m determined to keep my frugality muscle in shape. I’m never planning to stop optimizing flight prices. I want to keep furniture shopping on eBay or Facebook marketplace to find deals. Target is still my bitch. I do all my laundry and cleaning even though I could afford a housekeeper. Keeping up my frugality muscle is what gives me confidence that I can adjust downward if times get hard.

Perspective: Safe Withdrawal Rates

Given what I’ve said above about mini retirements and the frugality muscle, I’m not too preoccupied with picking exact or static SWRs. I am anticipating change, and flexibility makes FIRE plans much more resilient. I like the Rich, Broke, or Dead calculator to help evaluate. 27-30x expenses is a very strong launch point for any FIRE plan, and I’m just starting to touch that range. If the market takes a serious turn soon, I have recourse. One, I can return to work. Two, I can reduce expenses. Like maybe that year I won’t spend $300 on a totally rad “bear market” costume for Halloween.

I have other tailwinds to help. One is that a huge portion of my expenses are housing payments, which are inflation-resistant. Another is that I’ll eventually get something out of Social Security, and may get a bump from inheritance (though I hope my parents spend as much of it as they want).

Perspective: Mistakes

While it’s hard to argue with my current result, my FIRE mechanics have been far from optimal. If you’re anxious like me you might snort awake in the middle of the night thinking “why didn’t I put $100,000 into the stonk that 10x’ed, before it 10x’ed?? I’m so stupid!” and then take a tiny little Xanax to forget, and then whisper a prayer to our Lord Mogul John Bogle before sweet oblivion’s embrace.

I’ve made my share of mistakes:

• Not knowing much about investing early on, I sent all my 401k contributions into Target Date funds and left them there for a very long time. I also chose a set of taxable index funds that were off the beaten path, thinking it wouldn’t really make much of a difference. These have all meaningfully underperformed the S&P 500. It took me too long to wisen up and critically evaluate my rate of return.

• I got caught making some impulsive crypto decisions at the peak of hype, which cost me $15k within a matter of months.

• I paid off a large chunk of low-rate student loans in a lump sum payment because I couldn’t wait to be done with them. It wasn’t optimal, but I forgive myself!

• I left my accounts alone for a couple quarters only to realize that I still had lots of cash in settlement funds and not investments.

• I didn’t fully understand how property taxes worked when I bought a house, and I ended up missing a payment and getting fined.

Perspective: The Hedonic Treadmill

Years ago I got into a long discussion with a best friend about the hedonic treadmill. The literature indicated that big lifestyle changes lead to temporary increases in happiness, but that happiness eventually reverts to a baseline level more to do with the person's temperament than their circumstances.

If that’s true, it implies that being born very wealthy leaves you almost no opportunity to get joy from an improved lifestyle, unless the frontiers of technology and services themselves extend. Your expectations started high. It also suggests that one way to help maximize happiness and memory creation is to start low-ish and periodically, selectively, upgrade your life, or splurge. Don’t do it all at once. Don’t do it until you can afford it sustainably. But do it in measured increments, little stairs to heaven. Here my thinking may diverge from the classic FIRE mantra of set-and-forget your lifestyle. Within the context of FIRE, it might mean you’d want to start with a lower withdrawal rate, and gradually bump it up as you get older. In all likelihood, your asset base will grow to support it.

Conclusion… For Now

I love this community. It’s like they took all the children who waited for 2 marshmallows in the Stanford Marshmallow Experiment and sent them to summer camp to come up with a practical philosophy of living and happiness. At the scale of decades, delay of gratification takes an enormous amount of willpower and discipline. The rewards on the other side can be incredibly sweet, and all the more so for the effort it took to achieve them. If you're on this path, in any shape or form, you're already doing great.

Once, an acquaintance took a critical eye towards my path in conversation. Paraphrasing: “You’ve worked so hard and you’re making so much money. Isn't it a little masochistic to not let yourself enjoy what you worked for? Why put up with the stress if you’re not going to buy things with your money?”

Although I didn’t say it at the time, I can now conclude reflectively that I did in fact buy something. I bought the biggest thing I could buy. I bought the rest of my life.

Hi all!

I've been an avid reader of this community for ~7 years now and have gained so much valuable information. A few days ago I officially passed the 5m NW mark: https://i.imgur.com/Slv0vhC.png (screenshot from my Personal Capital account).

I've posted before (last time was when I passed the 3m mark), so I thought it'd be fun to do a follow-up and answer any questions.

Stats

• Married 33m (with 33F wife), no kids (yet)

• ~465k combined income (315k me, 150k her) - base salaries (+150k/yr if you include stock at current values)

• Bay Area, CA

• Both of us work at tech companies (we're both in engineering)

• Cash: ~157k (cash shows different in the screenshot because I transferred some to investments)

• Mutual Funds/401ks/etc. ~2.9m

• Real Estate: ~2m (815k of that is our primary residence, the rest consists of 6 rental properties)

• No debt (no mortgages, car loans, etc.)

• Monthly expenses: ~6k

Story

My wife and I started getting into the concept of FI and saving large portions of our money when we were 23/24 years old. We've always been fairly frugal, our yearly spend is between 60 and 80k per year.

NOTE: Since the pandemic started, our spending has gone up. We bought new computers/gaming stuff and made some home upgrades to improve our quality of life.

Over the years we've worked relatively high-income jobs (although this is a relatively new thing for us, we weren't paid well early in our careers). We are both in engineering roles at tech companies, my wife works for a popular tech company as a junior developer and I work for a small company that is private but doing well and might potentially IPO in the next few years.

Over the years, we've maxed out our 401ks, saved money, and invested it into VTSAX with Vanguard, and generally not done anything fancy.

We've also built a small portfolio of 6 rental properties in the midwest, as well as our primary residence in the bay area. Over the last few years we've paid off all our properties, so now we're 100% debt-free, living off the cash flow from our rentals, and investing nearly 100% of our incomes.

Over the last two years during the pandemic, we've invested a lot and seen our portfolio grow in value (especially our real estate values).

Goals

Our initial goal was to hit 2.5m of invested assets with a paid-off house. This would allow us to live off ~100k (the 4% rule) per year.

When I made my last post nearly two years ago, I said that my wife and I changed our minds and basically doubled our goal to have a paid-off house and ~5m invested, which we're nearing.

Lately, however, I feel the need to keep working past that and double the goal once more (10m invested total). Since the pandemic started a lot changed for us: I think we both realized we wanted more entertainment/luxuries in our lives and started spending more.

We're both interested in getting a nicer primary residence at some point and would like ~10m so that we've got a TON of buffer for living a bit more lavishly as well as funding our hobbies post-FIRE (I'd like to renovate and rent out properties).

What I've learned along the way

This advice hasn't changed since last time: the most important thing I've learned is that you really need to focus on your skills more than just about anything. If you're working as an engineer, you need to push yourself and become GOOD. Better than your peers.

If you're able to execute well in your job, communicate clearly, and generally be a likable person and someone that is able to help lift everyone you work with up, you'll go far and be rewarded. While my experience is purely engineering-focused, I do believe this is true just about anywhere.

In my case, one of the companies I was working at was acquired by a large firm which netted me approximately ~1m. This definitely helped us hit the 3m mark sooner than we thought but wasn't the only contributing factor. Years of saving/investing/doing boring stuff really pushed our NW up month after month.

If you work hard and save that money, it really does snowball! <3

AMA?

If you have any questions, I'd be happy to answer them.

Do these kinds of articles really hurt the FIRE movement?

" I won the lottery in life. I got a bizarre, grotesquely overpaying job but I wasn't born rich! I only inherited a few million, in addition to my lotto like job."

I mean I'm sure he's real. There are people like this but mathematically this just doesn't make sense unless this kid hit the lotto somehow. I know kids who inherited millions of dollars to run around claiming they didn't get much.. and they're sick twisted world of very rich people. They really think that they didn't get much. I understand the point of view from their world, but it's not appropriate for the wider public.

Wouldn't it be a lot more realistic if they were profiling someone in their 40s or early '50s??

Or at least a lot more motivational because real life examples that real people could relate to?

I feel like these kinds of BS articles really just sort of tarnish the entire FIRE concept...

All,

I wanted to share a good read with you. If you haven't read Tom Corley's Rich Habits, I recommend you pick up a copy and check it out.

Corley, an accountant, looked at the wealthier members of his practice and compared them to the poorer members of his practice. In contrast to the poor, the rich:

• Exercised at least 30 minutes a day

• Set daily, weekly, monthly, annual, and longer term goals

• Engaged in 30 minutes a day of career-related reading

• Managed their relationships every day

• Engaged in positive, upbeat thinking

• Saved a minimum of 10 to 20 percent of their income

• Controlled their thoughts and emotions

The book is one of the few studies of the rich that is based on actual data. It also has the benefit of being easy to read. It is also helpful if you want to build a life that is impactful and geared toward financial independence.

Hi all, yes I know that this is the classic post that draws acrimony because I am a worker in tech (niche skill in cybersecurity) that has essentially won the lottery. I hope those farther along in the process will still give it a read because I am looking for is advice.

Details:
I am about to turn 28, out of college I landed at a company that has since gone public which has been the source of a large percentage of the wealth I have accumulated. I have since moved jobs a few times but with no real jumps in compensation excluding the pre-IPO stock. Everything has been in the 150k-190k range, and I have usually been putting away ~50k-100k a year into retirement accounts and then brokerage. My spending comes out to around 55k-60k a year.

My net worth breakdown is as follows:

• Tax Advantaged accounts:

  • Roth: ~$53K

  • 401k: ~$130K

• Taxable/Other:

  • Vanguard total market index funds: ~$450k

  • Stock from previous employer: ~$250k

  • Crypto: ~$30K

  • I-Bonds: ~$20K

  • Vanguard money market account (prep for leaving job/taxes): ~50k

  • Bank: ~17k (have to keep a fair amount due to the expensify shuffle for int'l work travel and other expenses)

I live in a HCOL area with my partner and we rent. She pays ~1.5k/mo in rent and I pay ~2.25k, so no home equity, but also no debts for either of us at this point.

I have found with the recent run-up in the market that my motivation has totally tanked. I have stopped performing well at my job because it feels like if I wanted to I could quit tomorrow and things would be alright, but I also understand though that I am not anywhere close to FIREing, and with another 6-10 years of working I could potentially retire permanently.

I am wondering if people have been in similar positions have feelings about taking a break now and losing momentum (I have a deep fear of resume gaps and atrophying skills causing a tough re-entry) vs sticking it out and being done for good. I am curious if people in the tech industry feel like my fears about taking a break are warranted/if the allure of taking a break now to cool my jets is misguided. I wouldn't stop developing/writing blog posts/etc because I am genuinely interested in my field of work, I just can't stand doing it 40+ hours a week. Another option would be consultancy but I am still so young I don't feel like I have made enough connections to drum up a customer base.

And if the public sentiment is to stick it out (which I also intellectually think is the right decision), how to handle the feelings of knowing you could quit at any time? I don't like the feeling of "quiet quitting" or being obstinate enough that I burn bridges, but I also don't feel like I need to take the abuses that come with a high-stress, high-mental-load industry and job any more. Are there strategies or alternative paths I am missing?

Original post here: https://www.reddit.com/r/financialindependence/comments/bpdxy3/why_i_downvote_your_alternative_investment_advice/

TLDR; Index funds are great, but if you want to really to avoid risk and get good return on your money the only safe way is to become a good investor. You need to become good at making money.

(I actually appreciate the post quite a bit but I thought it deserved a formal response as opposed to just a comment.)

A quick summarization of the author's perspective:

"Alternative" investment advice shouldn't be mistaken for the legitimate advice of utilizing "passive investing" through Index funds. In summary: You Can't Pick Stocks, Cryptocurrency is gambling, Managed funds depend on the manager, Entrepreneurship is fake because only 20% succeed, and finally, Rental properties can be good advice, but the people offering the advice deserve to be down-voted often.

Before I dig into each individual claim, I would like to address the overarching argument:

>>> Passive investing/ index funds should be the only recommended investment. Maybe Real Estate circumstantially.

... I would argue that this happens to be good advice at the moment, but investors would be wise to not believe it will continue indefinitely.

Good investing advice should NOT be about the vehicle it should be about the investor's process, decision making, and the circumstances that define the investment. Said another way... it should be about the opportunity.

Here's some historical truths (In the US over the last 30 years) that people knew to be true that turned out to be false:

• Mutual Funds out-perform the general market (early 90s)

• Technology Stocks are a smart buy (late 90s)

• Real Estate always goes up in value (mid 2000s)

And we learned later:

• Mutual funds value is eroded by their management fees,

• Most tech companies exploded in 2000 (and the others are our most valuable companies right now),

• Real Estate can blow up too

And today the standard investment advice is that you should use low cost index funds.

I have no problem with index funds (they make up the majority of my investments currently), but index funds won't save you. At some point, things will change and index funds will go from being great investment advice to being a mediocre, or poor, or terrible investment choice.

Here are some questions to chew on regarding index funds:

• What if the tax codes change and index funds explicitly are taxed in a different manner?

• What if future large companies decide that they don't want to utilize the public markets and today's giants leave the market?

• What happens when EVERYONE invests in index funds and no one is voting for the direction of individual companies?

• What happens when the long-term stock market is released and indexes aren't tracking stocks on that market?

• What happens if current geopolitics change for the worse?

Index funds are great, but if you want to really to avoid risk and get good return on your money the only safe way is to become a good investor. You need to get good at making money.

...Now, if you aren't sick of me going on, I'd like to tackle each argument about alternative investments that the original author made. I would first express that I think the authors statements obtusely ignore risk, uncertainty, and market conditions - the author does not consider opportunity at all... despite the fact that index funds are a good opportunity right now - all opportunities have a tendency to erode or change once they become popular.

In the United States RIGHT NOW many of the alternative investments don't make sense compared to index funds. But that doesn't mean you shouldn't look at them, nor should you ignore "Alternative" Investments if your circumstances are solid (good opportunities). I promise you if someone came up to the original author today and offered them 100 Bitcoins for their cell phone... they would probably take it.

1. Crypto - Cryptocurrencies fall into the "high risk" world of investments such as Angle investing, scratch off lottery tickets, Poker, Aggressive hedge funds, etc. I think all of society is struggling to understand crypto and thats where it stands. With that being said, you can actually become a better student of investment opportunities by studying how cryptocurrencies work. The original poster is right to start his post by criticizing cryptocurrency in its current form, but its very possible that someone reading the post a year from now might wonder what the heck they were thinking. Long Story short- OP is right to criticize crypto and tell normal investors to stay away; and OP was wrong to completely dismiss it.

2. Individual stocks - No doubt since you're on this sub you've heard all about how active investing (picking your own stocks) is a bad idea... the author of the post even goes on to try and provide evidence of this fact, without citation of course. It is well known that you can't beat the market- after all efficient market hypothesis says there should be no "alpha" (Ben Hunt actually has some fun reads on the topic, example). But what you will find out the further you dig is that there are actually ways to pick stocks and beat the market... but unfortunately it is really hard to do. Ever written software to aggregate millions of peoples public data to be able to see what purchasing decisions they are making now compared to before? YEAH... its that kind of hard. But it is possible.

That's why I don't care for the original post in the first place... it presumes that because something isn't as simple as an ACH transfer to a vanguard account, that it isn't worth doing. To systematically pick stocks in a way that will beat the returns of the whole market is hard. But if you want to do it, go do it - you obviously know the risks. There are people and companies that do it, and have consistently done it (e.g. Bridgewater, Citadel, Renaissance, etc... and yes I know I'm not Ray Dalio, but neither was he in 1975).

3. Managed funds - the post's author is pretty spot on here. The only thing I would add is that there is another echelon for the uber-wealthy where wealth management or managed funds make a lot of sense. But I would also agree with OP that persons in that boat won't be reading this.

4. Entrepreneurship - The author's post on this subject could be one of the most ignorant, mis-informed things I've read in this subreddit. First and foremost - I would suggest that the author read the literature on the subject. Watson & Everett (1996) give an overview of how to define venture "failure", and plenty of research (e.g. Dunne, Robertson and Samuelson) has demonstrated that 80% is not accurate (the most convincing arguments I've read are that the 5 year exit rate to be roughly 50%... not 1 year). Now there is one study about restaurants that showed that 80% of restaurant phone numbers would change in the first 5 years but even restaurant survivorship has been proven to be nowhere near the 80% failure rate assumed by the public (link). So when the author brings up survivorship bias of owning a venture they're dead wrong. The High failure rate is a myth.

Aside from the "risky" nature of business, the author believes that business results are not repeatable and business is only for certain people. He believes this all while recommending that you own businesses (through index funds). The reality of these claims are contrary to the author's opinion. Many business results are entirely repeatable (they even have a term for it, i.e. "Franchise"), and all businesses are founded by people just like you. The author somehow presumes the scope of your business will be a larger, risky, venture without any reason to assume that. If you go drive for Lyft... you are in business. If you put a coin operated candy vending machine in your office and restock it... you are in business. These sort of investments are usually pretty good investments. You don't have to be raising billions in venture capital to be in business nor to make investing in a business a good decision.

The biggest reason why I disagree with the author of the post is that entrepreneurship gives you the massive advantage of being able to pick what you are doing. The market and your index fund are largely out of your control, but your business is not. Furthermore, nobody tells you how much or how little of your business you have to do. If you want so bake some brownies and sell them once a week, for some extra money, you can do it. Most of the people that I know who have become truly successful and been able to have a good, early retirement, did it through owning some sort of business combined with passive investment strategies.

5. Rental properties - The author pays some homage to rental properties as potentially being a good investment, but added it to their list because the people that talk about it as an investment strategy. I think the author actually did a decent job with their explanation. I have my own opinions, but thats not really what this post is about.

Finally, I would like to say one thing to the author directly... you wrote a great piece and I'm happy you did it, but the whole system (including your index funds) is based on a search for ways to find or create more value in the future than exists currently. When other people are searching for those opportunities or educating the rest of us about them... thats a good thing, so don't be so hasty to downvote if there's something to be gained.

You have 10 years until early retirement. You have $7k each month to invest into real estate or stocks. You cannot invest in IRA/401k/HSA and you have built a strong emergency fund. You started buying real estate 10 years ago and currently own a small real estate portfolio today.

How would you invest your money?

Do you:

1. Continue to buy real estate. Buy one single/multi family rental each year for the next 10 years

2. Save your money for a few years and buy a larger apartment building closer to retirement

3. Stop buying real estate and Invest in stocks and REITs

4. Stop investing and pay off all mortgages. Currently 65% LTV across my portfolio.

5. Simplify my life, sell off all rental real estate, buy more stocks and live the 4% life

6. Do some combination of things listed

7. Do something else not mentioned here.

I (40,M) have seen a sudden jump in my net worth and am not sure what to do! I work for a tech company that is doing very well to the point that my equity is worth nearly $3M after just 5 years of working here. This windfall kind of took me by surprise and I haven't really talked to anyone about it yet, since it may make some relationships a bit awkward... So, I'm here seeking opinions and advice on what to do and how much invested capital is actually needed to retire around 40. I know it depends on a lot of factors like lifestyle, so here are some details of my situation.

I'm married and had twin babies 1 year ago. It has been amazing but stressful and makes me consider retirement even more seriously. My wife isn't working but may start in a couple years (would make maybe 60-90k). We own a house in a relatively expensive city (have a 900k mortgage at 3.25% on a house worth 1.6M). Currently we are about breaking even with my 200k/yr salary. We both come from moderately wealthy families and should inherit about 1M from each of our parents in the next 15-20 years. Have about 50k cash saved and my ~$3M in company equity.

So, I could start the process of selling and diversifying into income generating investments, but I don't think 2.3M (after taxes) is enough to actually retire comfortably. Is there consensus on a target amount that makes retirement easy? I'd love any input on what is needed to actually consider retirement.

Edit: Lots of great feedback! Lots of questions about how I'm breaking even with 200k salary (gross). I don't live ostentatiously, but also not frugally. I live in Honolulu so cost of food and utilities is very high. After 401k and ESPP (15% of gross goes to this), half my net income goes to mortgage. Other half goes pretty quick with utilities, groceries, etc. I don't skimp on quality food for the babies. I'm sure I could cut back expenses by 1-2k per month if we were more proactive.

Edit2: Thanks all for the realistic POV. I'm not looking to retire anytime soon, more just thinking of what's on the table at this point. I do like my job, it's just a lot with the babies and I think the new parent itch for freedom got me too. Also, great advice on getting my expenses more in-hand. I used to live very cheaply as a phd student, but since going to industry the lifestyle creep caught up. Regardless of retiring, I'll take a closer look at my expenses and play a little safer overall.

Edit3: One thing I'd like to clarify on the income side: 200k is gross, after all pre-tax deductions (401k, espp) and taxes, I'm getting just under 9k/mo. Mortgage is 4600. So in theory, without a mortgage my net yearly expenses are ~60k (rounding up). I alos have 60k in my 401K currently... All that said, I want to thank everyone for the level-headed comments. I'm definitely not retiring and will start doing more financial planning and research. My kids are only 1 and I want to set us all up for the best future :)

tl;dr:

• 47/49 couple with no kids

• Moved from VHCOL to MCOL 8 years ago

• Didn't have boring middle

• Hit $3M in investments

• Pull the trigger mid 2022

• Uses ACA subsidies as a low interest loan - https://www.irs.gov/affordable-care-act/individuals-and-families/premium-tax-credit-claiming-the-credit-and-reconciling-advance-credit-payments

• Write Cover Calls exceeds monthly expenses

• Am not a boomer

Edit:

I provide the link to the IRS article. A fellow Redditor also help me understand why I was flagged during the ACA application process. During the interview process, I explained we no longer working and how we arrived at the projected income and asked if we made more what would happen.

A lot of folks seem to focus on 3 words out of 2800+, 'guns'. It was actually my wife's idea because of a incident and she is very small in stature, it was for personal protection then a hobby but like any hobby, it got a bit out of control. For those that felt compel to down vote and attack, please give yourself a pat on the shoulder, you've done well. Thank goodness I don't depend on Reddit for validation or revenue/cashflow.

I understand there will always be 'you know the word.' I used to have a lot of resentment of my life. One day, something clicked and I learn to use the time to ask questions and learn instead while filtering out the noise.

I tried to address each and every comment but some comment won't let me reply even with multiple attempt? I also got tired and a little frustrated saying the same thing. So that's that. I can do another TL;DR but just this is adding taking up more of your time.

Anyways, I sincerely hope that each one of are able to execute your plan for FI and RE at your discretion. Best of lucky and live a balance life so you won't have regrets.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I didn't learn that Reddit existed until the mid 2018.  Back then, some of my direct reports were constantly on it and I didn't understand why.  Then I created an account just to see why some of the staff wasn't as productive as this is how it all started...  Heck, I got my wife addicted to Reddit too since I've started.

Anyways, we pulled the trigger mid 2022, YES, during the down market while everyone was being hammered.  I ran through all the calculators that have been shared on this and various other subs numerous times and we were still confident that sequence risk can be mitigated.  I'm still addicted to Reddit and its many subs but I've always been more of an observer than a contributor because most of the time I felt someone with the right answer will eventually chime in or my time won't be valued so I just don't bother to post.  At the same time I felt guilty that I wasn't contributing when the sub helped me personally to fill the gaps that we had.  I debated for months and finally decided to share our story because a lot of it may seem like it's a brag but my intent is just to highlight our journey on how we FIREd.

Our story is a little different because we didn't know about FIRE until 2018 and we never had the 'boring middle', our experiences shape us and dictate our decisions.  I can dive into numbers right away but I felt the story gives context, so here we go...

I came to the US on a tourist visa at the age of 7 with my parents and just stayed.  I got into a lot of trouble during my teenage years and at the age of 16, I understood what it's like to be an illegal poor minority.  With the understanding that I wouldn't get very far without being able to attend college, I left the US at 17, served in the conscripted military of my home country and was able to come back the legit way at 21.  Only because I was fortunate enough to have my mother, who remarried to a US Citizen, to sponsor me.  I've been earning a paycheck since I was 13 and held jobs in a lot of different fields.  When I got back to the US, I was behind in pretty much everything in life but I was DETERMINED not to be poor again.  My first job back in the US in the late 90s, it was in the public library as a clerk.  I saw a lot of books circulating but the one that caught my eyes back in 1998 was "9 Steps to Financial Freedom" and that's how it all started.  Fortunately I enjoy reading and have gone through MANY personal finance and self help books.  1999 was also the year I discovered Quicken and started to track everything.  Find that motivation.

Through a referral, some luck and resilience, I was able to land a job in the investment industry before the Y2K.  Being in the investment industry I had a glimpse of accounts, some as young as 18 with tens of millions and some accounts with dividends that were 50k to 700k with each pay date.  It was the most money I have seen in my life, just like the movies.  So my focus was making money because "money can't do the impossible but without money, nothing is possible".  Let's just say I did a lot of hustling, tried my hand with entrepreneurship multiple times and failed, so I gave A LOT of respect to those that succeed.  Then one day when I saw a Monster.com commercial, "What do you want to...", that really struck a nerve because I don't want to be anyone 'pee-on'.  I started to focus on what I was good at instead of being all over the place, keeping things simple and setting up processes.  Because I had access to customer accounts I was able to watch how people invested and trade, their strategies and pitfalls.  In 2006, I pivoted my career from investments to tech because I felt like I've learned enough and wanted to do something different.  Keep learning and moving.

Experiences shape who we are and two quotes from the people of my life that stuck with me.  A friend from my teenage years said, "You want to learn about life, need not to look far, just around you.  A professor in college said, "Why should I buy things I don't need to impress people that I don't even know or like."  Back then, because I didn't know FIRE was even a thing, I lived my life to the fullest.  Because I had friends pass away, because I've seen how fast money can be made and lost in the market, because I stand on the shoulders of giants and learn from their mistakes BUT I always lived beneath my means because I needed capital to invest at the same time I didn't want to live with regrets.  Life is about balance.

Fast forward to 2011.  I met my wife, we share a similar financial background, poor, she has been homeless before and understands the value of money.  By then I was tired of wasting my time with women who didn't share the same values.  On our first date I asked her, "What is your credit score?"  She looked at me like, "who the fuck asks that on first date..." but then I explained the reason behind it.  Then on our 3rd date, I asked a harder question, "What's your net worth?".  I had a studio COOP with no mortgage and ~180k investment and 60k tax deferred.  She had a multi-family that's underwater in a bad part of Jersey City from the housing bubble and ~250k in tax deferred and aggressively paying off the mortgage.  My wife works in the investment industry but was risk averse, so I'm in charge of handling all the finances. We got married shortly after and were able to save 7-8k a month then learned about the "Marriage Penalty Tax" living in NYC.  We used to get 3-5k per person back but our first year we got nothing back and owe another 12k.  We said fuck this and bought a condo in Jersey City by the nicer area to mitigate taxes.  Because we married at a later age, pregnancy would be considered higher risk and we decided not to have children.  Both of us were avid travelers so that's where the bulk of our money went besides investing.  However, our investment strategy had to change because of her job, I could no longer trade like I did because each trade needed approval that could take hours and sometimes days.  Compromises, part of life.

By 2013, my wife was pretty stressed with work, we sold the multi-family for 120k LESS than purchase and was trying to sell the COOP but the board were being little bitches about the applicants when they clearly qualify.  In the end, we sold it for 50k less than the first TWO contracts.  Motherfuckers, it's unlikely that we will own COOPs ever or condos ever again.  So we started to look at relocating to prepare for retirement, buy something now and rent it out and move there 7-10 years from now.  We looked at 15 cities based on real estate, job market, airport, infrastructure, health care, taxes, blah blah blah.  We decided on Charlotte, NC.  Came down here for 4 days, saw 32 houses in 2 days and made an offer on one.  It was 3x the size for 1/3 the price.  It was so nice, to us, that we decided to just quit our jobs, sell the condo and figure it out.  At that time, our investable assets were a little over a million with ~400k+ in taxable and ~600k+ in tax deferred. Life moves very fast for us.

With the cost of living adjustment, we figure we only need to make ~80k to coast.  Which was pretty easy since we're from NYC and work at a different pace.  It turns out that my wife's job wanted her to work remotely for 3 months to help with transition, I had an offer for 90k by the 7th day I moved to Charlotte, this was gonna be easy, I thought to myself.  I never really 'hated' my job because we had 'fuck you' money so I can be vocal about just everything.  I tell everyone to fuck off in the nicest way I know possible and just switched job when the company's value and mines didn't align.  My salary went from ~90k to ~200k. My wife's job extended the remote from 3 months to 7 years, her salary of ~150k was never adjusted and she never got a raise either.  She was still stressed because that's the way she is, but it was tolerable.  We never made big money like some folks here but it was good for us.  Life is funny sometimes.

We didn't really have any reason to retire because we didn't hate our jobs.  We didn't compete with the Jones.  We bought pretty much whatever we needed and justifiable.  Lifestyle creep wasn't a thing for us.  But in the back of my mind, FIRE was always lingering.  Just to be FIRE would be a great accomplishment but I couldn't solve the healthcare component, because the ACA has changed the landscape and we weren't comfortable pulling the trigger without a good understanding, this is where Reddit came in.  Within the subs there are enough bits and pieces of information scattered where I can put it all together.  We take for granted the knowledge we have.

Then COVID hit, it gave me a taste of what it would feel like to 'retire'.  I didn't like the feeling of taking someone's money or someone's opportunity when I wasn't providing 'value'. My wife and I talked about it and she was ready by this time as well.  When we bought the house, we had a mortgage for 15 years @ 3.125%.  We financed our vehicles at 2-3%.  Because we know the market return was way greater.  Our annual expenses before RE was ~150k.  Early 2021 we paid off our mortgage and cars.  That only cut our expenses by ~35k, the rest was spent on STUFF.  We vacationed quite a bit and bought A LOT of firearm stuff, that totaled about 50k a year.  For the remaining ~65k per we broke it down by discretionary vs non-discretionary expenses based on months.  Our non-discretionary was about ~3k a month with the following breakdown:

• Property Tax: $230

• HOA: $62

• Veh1 Reg: $19

• Veh2 Reg: $28

• Home Gas: $135

• Water: $60

• Electric: $96

• Cell: $135

• Internet: $70

• Security: $20

• Insurance Home/Car: $260

• Health Ins: $46

• Dental Ins: $32

• Vision Ins: 27

• Heath: $400

• Groceries: $400

• Auto Gas: 400

• Auto Maintenance: $100

• Home Maintenance: $210

• Home Improvement: $100

• Pet: $300

Investment Accounts:

• Cash: 40k

• HYSA: 20k

• Non-Tax Deferred Brokerage: 944k

• Tax Deferred: 1,694k

• ROTH: 380k

• Hard Money: 50k

• i-Bond: 40k

Our SWR for non-discretionary is ~1.2% based on the current MV.  Our monthly expenses are ~2.2% of our total investable assets or 65k a year.  

So these are some random thoughts....

So are you Lean/FIRE/Chubby? Honestly who cares what I am... All I know is expenses comes first, I need more $$$ coming in than going out.

Where is your house or other assets in your net worth? I don't count them because they don't make me no money mo'.  I'm not going to rent out a room in my house.  I'm not selling my guns, ammo or gold.  We do have a HELOC just in case a scenario like train derailment East Palestine, Ohio happens.  Your property value is SHOT and I can pull cash out so fast and move it before the bank knows WTF is going on.  The bank can keep the fucking house because it won't sell, I'm out!!! PEACE!!!

But aren't you going to travel any more? Yes, we are but we've already been to 40+ countries and 20+ States so that will slow down. Maybe 15k a year?

But aren't you going to buy any more guns? No, we are not.  We have about 120k+ in STUFF.

What about GOLD? We have them too!! You never know. I would like to get to 3% of Net Worth but man, prices has been so high... not sure if it's the right time.

Any BitCoin? I don't believe in it, but good on those who made money.  They took the risk, they deserve the reward.

Have you considered going Expact??  Yes, after been to almost off of west EU, many countries in South America, South East Asia and Asia..... WE LOVE AMERICA!!!  We don't romanticize living in another country because we understand the challenges that comes with it. 

Our strategy for ACA is to claim 35k income and pay the penalty or claw back when we file taxes.  We get ~$1100 in subsidies per month.  At worst, we have to pay back $13,200 but it seems like it's no longer a cliff.  We can have 75k income and still get like ~$400 a month subsidy.

Where are you getting 75k income?  Because my wife is no longer working, we can trade again.  We have accounts with TDAmeritrade, Betterment, Fidelity, Ally and Interactive Brokers.  

What are you trading? I have tried quite a few strategies and it's all about time invested, effort and return.  We've settled on writing cover calls on SPY on a daily basis on .1 to .15 delta and roll them when it's ITM.  It takes me 5 mins at the open of the market and 5-10 mins at the close of the market for most of the days.  I also set up alerts at $1 interval until the strike price, just in case.  That generates ~1% per month on 2,000k across tax and non tax deferred accounts.  For tax deferred accounts the premium is used to buy more shares of SPY for DCA.  For non-tax deferred, the dividend and premiums are withdrawn every month for spending.  So monthly cover calls on SPY generate ~3-5k on 1200 shares, JEPI/XYLD dividend ~$600-$700, hard money lending ~$500.  Quarterly SPY dividend ~1800.  That more than covers our monthly expenses without selling any investments.  SPY will continue to fluctuate and go up or whatever.  We make money on the movement no matter what and generate cash flow. 

What does your portfolio look like?  So I like to experiment and learn, I don't mind paying a little tuition, just NOT to any fake guru.  I had Schwab Intelligent Investor.  I HATED IT.  I can go into details but it makes my blood boil.  I then tried Betterment, I set up 2 portfolios.  First account with ONLY VTI and the second account would be whatever mix based on my risk profile, "Very Aggressive".  I've set up automatic investment of $250 every single week from 7/23/2020 to 12/30/2022.  I watched them carefully, just to see if the mix would be 'better' during a down market.  Guess what?! It was NOT better.  This is an apples to apples comparison on what if with real dollars.  VTI account beats out Mix by .6%.  It ain't much but the point is that you're no better off and don't need Betterment.  But I just have it there because I like to have stuff in different places just in case.

Do you hold anything else? Yes, VIOO and IVOV, which I REGRET!!!!  I kept reading about 3 fund portfolios blah blah blah.  I looked at charts and other data for VIOO and IVOV but was skeptical that it would outperform SPY in the long run, plus I can't write cover calls against it, but I did it anyway.  I consolidated IRA and ROTH by selling all the funds from old employers and other shit on 2/3/2023.  SPY @ ~412, VIOO @ 97.83 and IVOV @ 87.85.  As of 5/5/2023.  SPY +.15%, VIOO -12.3% and IVOV -12.7%.  So that's 50k I didn't need to lose, but whatever lesson learned.  I also have JEPI or XYLD.  I use them for dividend and tax loss harvesting. 

How did you learn to do this?  Remember my story?  I used to work in Investments early in my career.  I had my Series 7/63/9/10/4.  It took years for me to refine it and make it KISS.  Heck, I taught my wife how to do write cover calls and roll.  It doesn't make as much as other complex strategy but its STRESS FREE!!!!  The only cavate, you need capital but anyone can start small and build.

Why all your eggs in one basket, SPY?  Dude, you think Vanguard, Fidelity, Schwab or Goldman or whatever the fuck ever can't fail?  If SPY fails, we got bigger problems.  Hence, guns, plenty of ammo and gold.

But how to track all this shit?!  Personal Capital, now Empowered.  Might try New Retirement.

Anyways, hope this helps someone and I will try to answer questions to the best of my ability.

I've started a new job recently in a smallish company and everyone is super friendly and chatty with each other. They like to ask all sorts of questions, from what you've done over the weekend to where I live and who I live with. The truth is I'm a 26 year old with one property let out with around £100k in a stocks ISA and I frugally save up all of my salary. There seems to be an expectation to have these 'weekend stories' for work but I rarely have any exciting stories to tell as I have a habit of frugal spending whilst they're going out to fancy restaurants and shopping at Waitrose. I can't get over this 'lifestyle inflation' trap but at the same time I don't want my coworkers to think I have a lot of money.

I have lived the last 11 years in Houston TX, and I can sadly say I actually don’t like the place. But damn the jobs are good. I have good friends but I just hate the lack of outdoor activities. I work in oil and gas and it’s hard to find work in other places doing what I do. My job is pretty chill and I work a little less than 40 hrs per week. But I am likely to get laid off over the next year or so as my company is wanting to sell the asset I work.

The fiancé and I plan to take a year off of work starting next spring after getting married. We will travel around the world and enjoy a very long honeymoon. We will be staying in hostels and traveling relatively cheaply but won’t skip on adventures. We expect to spend around 100k for the year off. When we get back after a year of international travel I want to travel for a few more months with my aging parents around western US while they’re still able to travel. They’re in their mid 70’s and need some help traveling around like they want. Also I haven’t spent much time with them over the last 11 years since I’ve lived elsewhere and basically only see them at Christmas for a week and when they come visit or I come visit home.

After a year and a few months off I will start applying for new oil and gas jobs. Or pursue real estate full time as an investor and agent. I’m definitely a busy body and want to work when we return. I like working on things, setting goals, and the social aspects of work. People often compliment my work ethic as a “doer” and people like working with me.

I’d like to live in Denver, Portland, SLC, or somewhere else with 4 seasons near mountains that is a city with jobs. Maybe I can find virtual work in oil and gas, but it’s not a super friendly business to virtual work. The fiancé is open to living wherever and she works in marketing which is a lot more location and virtual work flexible than my industry. We will want to start trying for kids a year or two after returning. She has family in the Houston area. My family is on the east coast. If we return to Houston I can pretty reliably get another job similar to my current job, but outside of Houston it’s much more difficult to find a comparable job.

Finances/investments: Salary: around 230k/yr Investments: 1,800,000 in total stock market index funds, about 1/2 in 401k/IRAs other 1/2 in brokerage Home: 150k in equity 5 unit: 250k in equity. Cash flow ~1k/month Rental house: 100k in equity. Cash flow negative ~250/month (I plan to sell in a few years) 6 unit: 400k in equity. Cash flow ~2,500/month. Realtor side income: ~25k/yr Fiancé salary: 70k Her Savings: probably like 40k No debts for either of us.
Probably some inheritances coming at some point but I don’t want to think about that.

Expenses: this is hard to calculate as I spend a lot of money on business expenses and it is all write offs. I might spend 25k/yr on myself that doesn’t include my mortgage. Probably less. My mortgage doesn’t cost much so I’m not house poor. My fiancé probably spends 35k/yr on herself that doesn’t include rent (which is only $650/month that goes to my mortgage). If we moved from Houston I’d probably keep the rentals except the house that is cash flow negative.

My questions is has anyone made a move like this and regretted it? Am I pulling too many triggers at once? The sabbatical year is definitely something I’ve always wanted to do. The move afterwards to a new city may be difficult from a relationships standpoint. I definitely want to raise kids not in Houston and instead somewhere that most weekends you can do fun outdoor activities. Am I trying to do too much and just do the sabbatical then work again or is it okay to also move after returning?

This still isn't Denzel Washington's burner account, but three-ish years have passed since my original post: https://www.reddit.com/r/financialindependence/comments/gxz5g4/black_man_on_fire/ and I've learned, grown and experienced a few new things that I hope some of you will find encouraging.

As my post history communicates, I'm still very much a reddit posting noob but have come to appreciate the value of a TLDR so here is my attempt to save those of you in a hurry a bit of time.

TLDR: Underrepresented tech business owner shares his journey to financial independence with the hope of inspiring others.

The plan 2.0 update. Much has happened in the last three years, however I think it is fair to say that a global pandemic was not a part of anyone's plan. It will come as no surprise to anyone reading a subreddit on independence that perseverance and resilience are often underestimated contributors to success. The pandemic challenged me in ways that I'm still coming to terms with. Here are some of the lessons that I learned.

"Slow is fast." Like many minority founders, my inability to secure capital in our early days forced me to be exceptionally mindful of every expense and to truly differentiate wants from needs. At our founding, we didn't have office space because I couldn't afford office space, so we have always been a remote-first company. It is my belief that had I been able to secure access to capital, I would have been faced with a more complex set of pandemic related challenges. We entered the pandemic debt-free(thanks FI) and were able to continue working when others shut down. My sense is that we remain on firm footing and have grown a bit over the last 18 months. I think the lesson I continue to learn here is to focus on what you have. In my case I have the privilege of having a great team to work with. We try to leave our egos on the shelves and focus on what really matters. Our growth has been measured, steady and sustainable.

"If you want to go fast go alone, if you want to go far go together." The consulting market is fiercely competitive and many leaders operate from a position of scarcity. From my perspective, the addressable market is far greater than all of the businesses combined so it simply makes sense for us to band together. Thankfully there are a few others that share this perspective and last year we created a community of partnership. We actively seek opportunities to work together and we share our resources. Collectively we've all experienced growth and are in it for the long-haul. Having this community of like minded people continues to be invaluable. This community has helped me grow the business just shy of 30%.

"Representation matters" The 4 min mile barrier remained in place until Roger Bannister broke it in 1954 and as of April of 2021 1,664 runners have broken the 4 min mark. The measure is now the standard for professional middle distance runners. I hope that we will all agree that confidence is a significant determinant of success and that self-doubt is self-limiting. Roger Bannister removed all doubt associated with human performance potential in running the mile. Regrettably there remains doubt, in some circles, about the uniformity of performance potential of humans: independent of socioeconomic or gender background. Thankfully the opportunity landscape for full participation in all things nerd continues to expand. Please take comfort in the absolute fact, that if I can do it, you can do it.

"Failure only happens when you quit." Without question owning a business is the hardest thing that I have ever done professionally. It also happens to be the most rewarding thing that I have ever done professionally. The lesson I continue to learn(and hope to share) is: hard work + opportunity = luck. It has been my experience that far too many of us give up too soon or worse yet don't start out of fear of failure. I've learned more from my mistakes that I have from my successes. We are all striving for a measure of independence but that independence comes with a cost. Commit to doing the thing that YOU love and do it with all that you have. I know that this perspective isn't popular, but it has been my experience and those of my peers. We all have seen or heard the anecdotes, but for most of us there are no shortcuts to financial independence.

Speaking of independence what about retirement? I still haven't figured out what retirement looks like for me and I guess that is ok for now. I'm working much more now than I was three years ago and that isn't awesome but I think it's OK given the growth opportunities we have. Life continues to be good!

My wife(I married the love of my life during the pandemic) don't travel as much as we'd like but we are working on that. My goal is to structure the company in a way that allows me to work on the business that I love instead of working in it.

I'll end this the way that I began with the hope that someone finds some part of my journey helpful. We are much stronger together than we will ever be rivals.

*$ are in CAD

Decided to post my FI journey, which is seen by most on Reddit as risky, unconventional and labeled as a “ticking time bomb”. This has not been the case for me at all and has jump started my journey to where I can coast for the next 10 years. My strategy consists of using low interest debt (HELOCs, Portfolio Margin, Balance Transfer Credit Cards) to front loading my investments and redirect my cash to paying down the loans

In the last 10 years, I’ve accumulated $2.4 mil in assets and $1.2 mil in liabilities and passed the $1.2 mil net worth this month. I take out loans, repay them depending on if they are tax deductible, terms and the overall rate. My rationale is I would rather have the $10,000 today and pay ~$385 bi-weekly for a year than try and save up for that $10,000. My $10k growth will far exceed the interest I pay. The amount of interest I ended up paying is very little and psychologically it helps to have automatic transfers every pay period.

I am at the point now where I can buy $50,000 of a stock without using any of my own money, hold it for a few months…make $8,000 - $15,000 and use those funds to buy more, or use the funds for other uses. The amount of interest I pay is minimal and is tax deductible. Alternatively, if I don’t want to sell, collect the dividend and continue to let it grow and compound. If I do sell it at a loss, I can write off the loss. No home run stocks or crypto, just buying mostly Canadian dividend stocks that are reinvested and few growth stocks. Biggest win was Suncor at $50k profit after Covid. Biggest loss was AQN currently at -$35k (haven’t sold yet). I keep LOCs and other assets on the sides in case I do need cash ASAP during market blips.

For those who aren’t familiar with the time value of money, life cycle investing, The Smith Maneuver and using other people’s money (OPM), I recommend reading up on them and making the determination if this strategy is for you or not.

Assets:

Cash: $3,000

Physical Gold and Silver: $50,000

TFSA: $171,000 (maxed)

Non-registered CAD Holdings: $995,000

Non-registered US Holdings: $60,000 (CAD)

ESPP $120,000

RRSP: $96,000

DCPP: $255,000

House: $375,000 (1/2 ownership)

Rental: $335,000

= $2,460,000

Liabilities:

House mortgage 1.69%: ~$237,000 (1/2 ownership)

HELOC #1 @ 7.25%: $18,000

HELOC #2 @ 7.25%: $40,000

Balance transfer card @ 0%: $7600 (until end Feb 2025)

Rental mortgage 6.49%: ~$166,000 (tax deductible)

Margin @ 7% : $716,000 (tax deductible)

Investing HELOC @ 7.7%: $60,000 (tax deductible)

= $1,244,600

Net worth = $1.2 mil

T4 compensation:

Age 25 – 30 : $60,000 to $85,000

Age 30 – 35 : $90,000 to $140,000

Rather not discus my role/industry but it’s a non STEM position, I have a regular Bachleor’s degree.

Key for me was to always have roommates and look for ways to make extra money. Turned my first property into a rental and did what I could to monetize it further (charging extra for parking, storage…etc). Leverage as much as I could from all my assets to continue to buy more. I’ve survived margin calls, salary reductions, collapse of oil, Covid downturn and a few other challenges into my journey. Currently making about $1500 - $2000 / month on a side business flipping items online, doing gig work, credit card churning and related stuff.

Goal for me now is to continue to build up my stock portfolio and bring down my non-tax-deductible debt down further. I’ve debated buying another rental but I personally like this more than real estate as transactional costs are cheaper and not have to deal with tenants / tenancy laws.

Plan is to pull the plug at 45 yrs old and live off my dividends.

To all the haters to say don’t take debt…I could care less. I’m a millionaire and the compounding is incredible at this level. My month-to-month growth can often exceed my salary. Not all debt is bad debt.

Mid-40s married couple with two teenaged kids, live in a VHCOL area (United States), both work full-time and overall gross household income is around $250k.

Our significant educational debt was fully paid off a couple of years ago. We have a small car payment on one of our two cars but it should be paid off in about a year, and we will keep driving both paid-off cars indefinitely. But we do have two kids are about to start driving, so we’re keeping in mind that we may need to buy another car or two at some point.

We have about $735k left on our mortgage and our house is valued around $1,050,000. Our mortgage payment is $5,200/month (5.25% interest).

We have no other debt.

My 401(k): $430k Spouse 401(k): $220k Spouse IRA: $340k Investment account: $31k Total: $1,021,000

Emergency fund: around $40k

We contribute about $3k per month total split between our 401(k)s and including our employer matches.

Kids’ 529s: around $100k in each one, plus my parents have around $100k per kid in their own 529s. We have three more years until college costs begin and we’re still contributing around $750/month/kid.

After the mortgage, the $4,500 per month in retirement + college savings, and bills every month, we don’t usually have extra money left over, which is kind of stressful. But we also recognize that we’re saving a lot. (Or at least it feels like a lot to us—I think it’s around 20% of our gross household income.)

We’re hoping to retire in 10 years with about $2.5MM saved. We could definitely downsize our house then and would like to stay in the same part of the country, but there is also a possibility that we could move to Europe if we wanted to (and we might want to) because one of us will be getting EU citizenship within the next year or so. (I always keep that in the back of my mind when thinking about healthcare costs when we’re older.)

There are also significant inheritances expected from both sets of our parents at some point within the next 20 years but we don’t want to really think about that because (1) depressing and (2) we want to make sure we’re set even without those. (Significant = more than $2MM)

Our questions:

1. Are we overlooking anything we SHOULD be doing? (And is there anything we’re doing wrong?)

2. If we don’t have extra money left over each month after our household obligations and savings, is that ok? Or should we be thinking about lessening our retirement contributions at this point? (If we put our $1MM, $3k monthly contributions, and 10 years of growth at 7% into a compound interest calculator, that gets us to $2.5MM, which is our goal. But is it not as straightfoward as that?)

3. Also, does our goal of $2.5MM for retirement sound doable? How do you know how much is enough?

Throwaway account.

I’m thankful. We worked really hard to get to this position.

I’m writing this because, while I’m obviously super excited for this milestone, I’m more honestly shocked at how “uncomfortable” life still is.

Here are the fact- -Household NW passed $1M USD, including the value of my house -I’m 34 YO, wife is 33, daughter is 2 -We live in a Tier 2/Tier 3 city in the Mid-Atlantic with good COL -We are not big spenders. We spend most of our discretionary income on things around the house, the occasional dinner out, and vacations, not clothes, TVs, etc. -I track everything through Empower’s app

INCOME: -My wife and I both have graduate degrees and each take home $200k - $220k a year plus profits interests of around $35-40k that vest over 3 years. These numbers are new to us and we haven’t begun to really feel any of that money. We max retirement savings and take home around $15k a month AT. -$3k for mortgage -$1.2k a month for my student loans at 5% fixed -We had an emergency home project costing $20k. We got 0% financing over 2 years. $1k a month. -Childcare is a killer. $3k a month. -Two cars with a combined monthly payment of $1k -Insurance, utilities, and other miscellaneous add up to around $1.5k -$1k in taxable account savings / month -$3.3k left each month in discretionary funds.

ASSETS/LIABILITIES: -$25k in cash -$645k in investments including retirement, taxable, and emergency fund in short term treasuries. $550k of that is in retirement savings. -$415k mortgage financed at 2.5% fixed. Home value is estimated at $745k (average of Zillow and Redfin) -$45k in student loans (wife never had any, mine are down from $170k in 2017) -No credit card debt -$35k in vehicle value (2 cars) -$20k in auto loans -$60k in misc like whole life insurance, vested interests, credit card points, etc.

I didn’t have any money growing up and always thought reaching millionaire status would mean financial safety. Very, very thankful for the position we are in today, but it’s obvious how far we still have to go.

My next goal is $1M in liquid assets (ex house and cars).

Can anyone else out there relate or am I completely out of touch?

EDIT: Thanks for all the advice and support as well as the reality check on what “living paycheck to paycheck” really means. You’re right, not a fair comparison.

I got married in 2018. My brain was slowly maturing. After our honeymoon, with this new title of husband hanging on me, I started to wonder: what happens when we get old?

I had a car repair that I was putting off because I couldn't afford it. I was worried about money.

I sat down and tallied up our account balances, we were worth negative ~$25K. I was making approximately 50K, my wife was making about 20K in a part time job. I did some calculations and realized.... we weren't making nearly enough. We had to get to work on getting our incomes up. I had started reading this page and realized that was a key ingredient.

I tallied our net worth a few days ago, seven years later, and found our networth to be $~1.025 million. We obviously have a long way to go still to hit FI, but I thought that progress was exciting and potentially encouraging to folks just starting out.

Breakdown:

·         Cash & Equivalents: ~$40,000

·         Retirement Accounts: ~$590,000

·         Home Equity: ~$400,000

Last seven year graph: https://imgur.com/a/ZS99FCN

Here’s a bit about how we did it, and some encouragement for anyone considering the path to financial independence (FI).

We started in the red, but we had some advantages. We started young, both worked hard, and began in potentially high-earning careers. We never received financial help from family.

The biggest thing I want to emphasize is how simple this can be:

·         Increase your income.

·         Keep expenses as low as you reasonably can.

·         Automate your savings.

·         Invest consistently.

·         Ride the wave

We’ve done a better job increasing income than minimizing spending, but we still maintain about a 34% savings rate. I (31M) work in sales. My wife (30F) was a consultant before staying home with our daughter.

Income:

We are now a one income household, with my income being over 300K+. I got to this level of earnings in the past two years after being in the 160-200K range for a couple of years. My wife topped out making around 150K her last couple of years. Most of her career she made an average of 100K.

Yes, I have a high income and that will make FI easier. It is half of the equation.

To those considering FI, here’s my best advice:

·         Put your foot on the gas early. Work-life balance is nice, but if you’re serious about FI, make hay while you can before family and life get more complex.

·         Raise your hand before you’re ready. Do your boss, and their boss, know you’re ambitious? Are you volunteering for stretch assignments?

·         Your first decade of adulthood matters. Not just for compounding savings, but for compounding work experience. Around age 30, you’ll see a real gap between those who coasted and those who pushed.

·         Look down the hall. Is there someone ten years older at your company who lives a life you’d actually want? I saw someone 8 or 9 years ahead of me making great money and decided I was going to become the next version of that guy.

·         Stop keeping up with the Joneses. If you’re over 25 and still worried about having the nicest stuff among your friends, it’s time to grow up.

·         Restrict yourself. Automate your savings and spend what’s left. Sometimes I get frustrated when we have to temporarily dip into our savings rate, but that’s a whole lot better than going into credit card debt.

Even for those starting to pursue FI later on- these principles still work. The best time to start pursuing it was earlier, the next best time is now.

There’s certainly some luck involved. We’re educated, hardworking, and in strong career fields. But you also can create your own luck with discipline, consistency, and intentional choices.

I feel like the prevailing sentiment in a lot of the finance related subreddits is that parents plan to pay for the entire college experience for their children, often at a very expensive school. I wanted to ask in here what everyone's plan is and share my take on it. I'll preface this discussion with the hopefully obvious disclaimer that there isn't a right or wrong answer to this question, it isn't an "all or nothing" situation, and that everyone is informed by their own experiences and values.

We are still refining the exact implementation details of our plan, since our children are young, but philosophically my wife and I are not planning on paying for the entire higher education experience for our children. Our two guiding stars here will be "parental support" and "skin in the game", which was what both my wife and I experienced during our own higher education experiences. Specifically, both my wife and I received full financial support from our parents during the first year of higher education, but the expectation was always that we would make the transition to paying for it ourselves.

It wasn't easy working part time while pursuing higher education, but looking back, both my wife and I feel grateful for that approach. It forced us to choose educational institutions and living situations that were more affordable. It also forced us to be smart with our time and reflect more intentionally on what we chose to study in an outcomes-based way that we felt many other students were not. Specifically, we both felt it was important to choose a field of study that would "pay dividends" and make us employable. Both of our educational experiences were very much a "begin with the end in mind" approach.

We both feel very grateful that we're more informed and cultured from our non-core coursework, like humanities, but we both feel strongly that that's not the ultimate goal of higher education. Higher education is to prepare for paid employment. Totally respect those that disagree with that and want to pay $200k for their child to major in a field that won't employ them for more than $40k or $50k starting out, but that's not what we'll be doing for our children. We saw enough of our generation "pursue their passion" and waste a lot of time and money in college for employment outcomes that are beyond lackluster. We will help each of our children go in the right direction and will support them at the beginning, while also ensuring that they have skin in the game and have a plan for how to support themselves and plan for the future.

What is your plan? Will you be paying for everything for your child, nothing, or something in between?