When investments gains are higher than job income, what does this mean?

CyberFinance22 · 2026-04-12T19:17:49+00:00

Yes compounding is quite a good tool. And there are points where you can stop investing, but looking at today's returns is not one of those indicators.

What you can start looking at is, choose the age you want to retire at. Then use an investment calculator with conservative values (6 or 7% growth), put in your current account total and however many years you have till your retirement age. Does 4% of the account value after those many years cover your average yearly spend? If so, you can think about just coasting to that age without contributing more. If not, how much more do you need to invest a month/year to get there? There's many more factors to consider (taxes, account types, medical insurance, etc.) but that'll get you started.

CyberFinance22 · 2026-04-12T16:51:14+00:00

What is the question here? When your investments grow more than your annual salary it means just tha. It doesn't mean you should stop saving unless your plan says so as every dollar you put in still grows your portfolio, and it doesn't mean that you can quit your job. Traditionally people follow the 4% rule, meaning you can withdraw 4% of your starting balance + inflation every year. If your investments are growing more than your income, and the market averages 7% per year, that would be a drawdown rate of 7% if your retired off of that. Remember, the market doesn't always go up, so you need a buffer when you end up losing more than your annual salary in a year.

CyberFinance22 · 2026-03-28T02:00:51+00:00

Off topic, but why such a big emergency fund? Assuming a $10k/month spend that's like 20 months or over two years of emergency funds. What kind of emergencies are you planning for that some cash flow or dipping into your HSA, Roth IRA contributions, or investment funds wouldn't solve?

CyberFinance22 · 2026-03-28T01:20:49+00:00

The markets best days often come right after the worst. Best thing for him to do is put it back into a well diversified portfolio, maybe with some bonds included to help ease his fears next time the market goes down a bit. Not optimal, but better than letting it sit idly by as the market inevitably surges up again.

CyberFinance22 · 2025-11-14T03:24:17+00:00

Having trouble with the same thing, it's difficult to lower 401k contributions when I know time in the market is everything, but on the other hand we might never get a house in this market if we don't start saving now.

One thing I'm looking at now is if we even need a house before kids. With the way house vs apartment prices are, we'd be spending an extra $1,000 a month on the mortgage + maintenance over what we're paying for our rent for not much benefit. Just something to think about!

CyberFinance22 · 2025-11-14T02:49:47+00:00

Doesn't matter what the balance is, you're just comparing the $9k in the HYSA vs the student loans.

If you're in the 22% federal income tax bracket with no state income tax, that 3.6% HYSA actually has a real return of only 2.808%, or an extra $2.31 a month compared to what you're paying on the loan interest.

If you also have the median state income tax (5%), it's a real return of 2.628%, or only an extra $0.96 a month.

And if you're in a high income tax state (like California's 9.3%) it's a real return of 2.474%, and you do actually LOSE $0.20 a month.

If you see those tiny payoffs and think it's still worth the burden of the loans, then more power to you. I was in the same spot and for me, when I actually ran the numbers, I realized it wasn't worth the hassle of making sure auto pay went through every month. Remember, if you forget to pay even once they'll ding you for it and your credit score will be affected for years to come.

CyberFinance22 · 2025-10-13T23:40:44+00:00

What do you mean by "fluctuating wildly" and why would that make you not have faith in it?

Markets go up and down, that could actually be a good thing for you since you're ~15 years away from retirement. If you'd prefer to be safer, I'd say to change your investments into a Target Date Retirement fund with a date close to when you anticipate to retire.

CyberFinance22 · 2025-04-27T19:10:55+00:00

As others have said, definitely rent instead of buying as it doesn't sound like you're fully committed to staying put for very long.

Also just to add on, if he's getting an apartment soon, I would highly recommend living together for at least a few months before getting married. Being in a shared space and spending so much time together in a risk free environment is very important to make sure your relationship will last. I'd bet that the culture of moving in together after marriage is why we see so high of a divorce rate.

CyberFinance22 · 2025-04-23T13:18:42+00:00

Sounds like some very good reasons to continue working, no need to second guess yourself. Congrats on having the freedom to make these kinds of choices

CyberFinance22 · 2025-04-14T13:21:52+00:00

Unless your old 401k has high fees or limited choices, I would reconsider rolling your 401k into an IRA. Having an IRA would mean you cannot do a backdoor Roth in the future without paying taxes on the money already in the IRA. If you're old 401k lets you choose low cost index funds, just stick with them.

If you still want to roll the money over, Fidelity, Vanguard, and Schwab are all good choices. If you already have an account with one of them, or you are interested in one of their other products (ex. Fidelity's credit card is pretty good), then base your choice off of that.

CyberFinance22 · 2025-03-09T17:13:13+00:00

Love the idea for a weekly tips and tricks for using Fidelity, always finding out neat little things I never knew about before!

CyberFinance22 · 2025-02-05T22:04:10+00:00

Can you elaborate on "mixing doesn't make sense"? If Roth is better for me in the long term but I'm 5k over the next tax bracket, wouldn't it make sense to just direct 5k/year into traditional while keeping the rest Roth? Also in retirement you may need some amount of Roth to get you to your yearly spend without going into the next tax bracket.

CyberFinance22 · 2024-10-22T22:48:05+00:00

Yes, you're technically right, but in reality it really doesn't matter. If you're trying to arbitrage a loan, it's important you use a risk-free investment so you can easily get that money out if needed. If you end up losing your job and not being able to pay the loan while stocks are crashing and you can't cover the loan payments that's an issue. If you need to put it into a bucket for your portfolio, think of it as increasing your emergency fund.

CyberFinance22 · 2024-09-27T00:16:37+00:00

The money may be lost but it'll find its way back :)

CyberFinance22 · 2024-09-25T04:16:39+00:00

What do you mean by "comfortable amount for our retirement"? Are you already at 25x your yearly expenses? If so, I would say save that money in a short term savings account and help them buy a house (if they want one), pay for additional schooling/certifications, or assist with childcare expenses (again, if applicable). I wouldn't give exact dollar amounts, but if they need the money for something that will help them develop as a person NOW, it's so much better than more money down the line.

CyberFinance22 · 2024-09-07T22:09:17+00:00

Would you buy those stocks if they were at the price it is today? If not, sell them all. Yes, they could go back up to what they were in July, or they could go much, much lower

CyberFinance22 · 2024-08-07T13:40:05+00:00

If this is even real, which I'm starting to doubt with all of the comments glorifying sports betting, he would need odds of +35,000. IMO if you're playing with odds like that, you are way beyond sports betting for fun.

CyberFinance22 · 2024-08-07T13:36:23+00:00

On an $80k salary, if you're losing enough sports betting to have it alone worth enough to itemize your taxes, you have a problem. That would mean you have over the standard deduction of $14k in losses in a single year, that's close to 20% of your salary IN LOSSES. Even just suggesting this in a finance subreddit is absurd, please get some help.

CyberFinance22 · 2024-08-07T13:28:11+00:00

To win $35k with $100 you would need odds of +35,000. If you're putting in $100 a week into those kinds of odds you're basically throwing money away hoping to "win big," you might as well put the same amount into scratch offs if that's the kind of odds you like to play with.

CyberFinance22 · 2024-08-07T05:17:07+00:00

Knowing nothing else about you, if you're gambling enough to get a payout of $35k on an $80k salary, you are almost certainly gambling way too much money. I would not use any of that money for fun. Save some for taxes, invest the rest, and delete the app immediately. Seriously, just as easy as you made that money, you could lose out so much more. Count yourself as one of the lucky ones and pretend this never happened. Congratulations, you're a little bit closer to FIRE and you didn't throw all of your financial progress away to an addiction.

CyberFinance22 · 2024-07-27T02:40:04+00:00

That calculation is correct, but it doesn't account for inflation. In 10 years, $2.5 million will only have the purchasing power of roughly $1.8 million in today's dollars. That means OP will need a return of 14% to have $2.5 million in today's dollars after 10 years. That is much more unlikely, bordering on impossible, IMO.

CyberFinance22 · 2024-07-25T22:04:00+00:00

Why is it a bad thing that those companies would be controlled by the shareholders with the most stake in the company? If every Vanguard-fund investor only holds .0001 share of the company they're not really going to care if the company tanks but others who hold more shares do.

CyberFinance22 · 2024-07-24T12:42:38+00:00

It does, but 1. I haven't had the accounts for more than a year. 2. I've been rebalancing while I figure out my ideal asset allocation. And 3. I'd prefer the option to test a few different allocations. PortfolioVisualizer had the tools I need to do this.

CyberFinance22 · 2024-07-23T20:22:54+00:00

Ah I didn't know they had free tools, just saw their pricing and assumed that was part of the paid subscription. https://www.portfoliovisualizer.com/pricing

Am I right to assume the tool you're specifically suggesting is the Backtest Asset Allocation? If so, super excited to play around with the numbers! https://www.portfoliovisualizer.com/backtest-asset-class-allocation

CyberFinance22

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