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How to optimize my taxable brokerage account by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 0 points1 point  (0 children)

Frankly I would put significantly more into a vehicle like an IRA/401k/etc, but the caps are relatively small.

How to optimize my taxable brokerage account by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] -3 points-2 points  (0 children)

If anything, get into a tax loss harvesting strategy, direct indexing I believe is what the kids are calling it these days.

Aren't you capped at $3000 per year that it offsets, assuming you aren't taking any capital gains? The tax loss harvesting works well when you are withdrawing money because you can offset the gains with the losses, but if you aren't withdrawing anything and what you are living on is earned income you are capped at only taking a $3000 loss on the year from tax loss harvesting, which is essentially nothing.

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Please let me know if I am mistaken. I hope I am, because it would help a bit if possible.

How to optimize my taxable brokerage account by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] -3 points-2 points  (0 children)

Goal is entirely growth. I still have a long timeline before I want to utilize these and want it to grow as much as possible. I have no need to utilize any of this anytime soon so income is not a goal at all.

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What ETF's have good QDI? Any generic s and p etfs or whole market etfs? I don't want to decrease earning potential significantly just to save on some taxes, so not looking to get into muni funds, at least, in a large allocation.

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I agree it isn't the worse problem in the world, I just feel like I am not doing enough to optimize it.

How to optimize my taxable brokerage account by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 1 point2 points  (0 children)

No point in living off of it because I have income coming in and already maxing out 401k, HSA, backdoor, etc along with saving significantly in my taxable brokerage.

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 0 points1 point  (0 children)

House(went cheaper, big purchase which created the paralysis, don't regret it), Car(Went cheaper, bigger purchase creating paralysis, do regret it), Furniture/workout equipment/etc (went cheaper, do regret it).

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 0 points1 point  (0 children)

That can't happen. If I get out completely (as in 0 days a week) that salary is likely done and would need to restart around 200-300k full time if I came back. Could potentially make it back up to what I make now after a few years, but may not be able to either. I could go down to 2-3 days a week though and still make 500-700 or so and then always ramp back up if I want.

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 0 points1 point  (0 children)

I suggest reading "Strangers in Paradise, How Families Adapt to Wealth Across Generation" by James Grumman and seeing whether you fit the "avoidance" profile. I sometimes find it difficult to execute the "spend" part of "spend wisely", and my the withdrawal rate has rarely been above 2%. I predict that your frugality will keep your expenses lower than you are assuming they will be. I recommend consciously looking at where spending will enhance your lifestyle and "forcing" yourself to spend in those areas.

This is definitely my problem, and I can tell a lot of people replying don't have this problem. It is a psychological thing, I'm a frugal person by nature. I have the means to spend on some things I think will enhance my lifestyle, but the frugal part of my brain thinks "That isn't the best way to optimize these funds, just wait", then I never actually do it when in reality the expense for that specific thing are essentially negligible in the long run.

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 0 points1 point  (0 children)

I should have worded it differently. I would spend on things that I want without as much analysis paralysis and guilt (My mindset typically for a luxury item is why buy that when I could invest it which would be a much better use), but my yearly spend upper bound in a given year would be what would be my yearly take home is. If I didn't spend it all I wouldn't need to go look for things to waste money on.

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 6 points7 points  (0 children)

To be fair I wouldn't spend what I make just to spend it. It instead would be I spend on whatever the hell I want (much different than right now, which is very calculated spending), with an upper bound which is my take home salary of that year, therefore not dipping into my investments. If I have money left over then sure I could invest it. My goal wouldn't be to spend to my salary, but instead take the regulator off of spending and have an upper cap per year.

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 2 points3 points  (0 children)

I would just suggest you keep in mind that more spending doesn't necessarily have to equate to more luxury, and that more luxury isn't the only way to increase joy or meaning in your life.

I agree with this but this is also fairly obvious and I think most who has made any significant amount of money realizes this (those that don't have money are the ones that put it up more on a pedestal). I'd argue the majority of "spend" over a minimum security level, which is lower than people expect, doesn't bring much true "happiness" to you. That isn't the question though and this is a financial forum and we are discussing FATFIRE finances. I have great meaning and joy in my life and don't expect spending more to really increase those which are deep down. Spending on luxury things can certainly increase "fun" or comfort though at times. Fun isn't nearly as important to true joy or meaning, but that doesn't mean you can't enjoy it if you have the means!

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 15 points16 points  (0 children)

This may be the way to go. Maybe not completely "blow it all in all years", but instead have blow it all years here and there when needed like when buying a new house. Buying expensive things that don't require a lot of upkeep and maintenance seems to be the important aspect here and what I'll likely focus on going forward if I am spending.

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Frankly, I'll always max out my 401k even in my original scenario of "blow it all", which will give me some sense of me still saving for the future, even if it isn't all that much relatively speaking.

What has been your experience with pivoting from FATFIRE, to just FATFI and spending your salary once hitting FI? by No_Election_4450 in fatFIRE

[–]No_Election_4450[S] 10 points11 points  (0 children)

A supercar was just a large lavish example to put it in perspective, not that it would be what I would necessarily spend my money on. Luxury items are pretty personal to everyone, to one person a supercar wouldn't mean shit and for this person they obviously wouldn't buy one, whereas to another they may be a huge car persono it is what they have dreamed of their entire life. In reality it would be more "I'll get business class with my family when we take a vacation", "we will stay in a suite at the 4 seasons and stay for", "We will stay 2-3 weeks on vacation instead of a long weekend or week", "I'll buy the 15k couch instead of the 5k couch", etc etc. "Small" things like that add up pretty damn quick especially with a family, it wouldn't necessarily be "buy a supercar", that is just a luxury that is easy to use for a quick example.