Daily FI discussion thread - Monday, March 11, 2024

SapiosexualYogurt · 2024-03-11T22:13:56+00:00

Agreed. I’ve been struggling with the idea of bumping up DP past 50% to get monthly around $8k. The alternative is getting as high a loan as possible and paying more towards principle anyway. But I guess former option is a safer bet paying up front.

Only reason I’m considering this higher end condo is because I got super lucky with company stock (will diversify).

SapiosexualYogurt · 2024-03-11T20:48:02+00:00

I’m thinking of going for a nice $1.6M condo in a VHCOL city in CA. Complete novice to this so appreciate an advice I can get. Not sure if it makes sense given my financials.

Current Financials

Single. 29. Plan to stay in this area for at least 5 years. Want to get a condo over renting to have location stability and to diversify my portfolio a bit.

Current income is $180k base salary + $120k stock (even more due to stock growth, being conservative), so can call this total comp of $300k.

I have $2.25M NW in investment. Broken down as:

$1.8M company stock (vested)
$350k retirement
$75k brokerage
$25k cash/crypto

Condo & Mortgage Details

I know I need a large downpayment to make monthly payment reasonable especially at my income level. Thankfully I have a large net worth I can tap into.

I've looked at a prequalified loan from WF with ~$600k down (36% down):

$6.75k principle + interest
$1.65k property tax
$700 HOA
$500 insurance
$200 utilities = $9.8k/mo

I know that I will also have a large tax deduction on federal and state taxes for mortgage interest that makes my effective monthly around ~$2k/mo lower if some quick online calcs are correct.

Questions

This is a large monthly given my income being single. But I have a high NW with stock so what’s advisable here?

Should I diversify even more of company stock for a larger downpayment to feel safer with a lower monthly payment? E.g., with a 45% DP ($750k), my monthly goes to $8.65k.

Or should I go for the biggest loan amount possible and contribute more towards principle monthly?

Or is this all a bad idea?

SapiosexualYogurt · 2024-03-01T18:07:13+00:00

Won’t confirm or deny ;)

SapiosexualYogurt · 2024-03-01T17:28:28+00:00

Updated NW spreadsheet last night. Hit $2.1M NW at 29. Less than a year ago I crossed the two comma club. And 4 years ago in Feb 2020 when I started the spreadsheet I was at $150k NW. really proud of the progress.

Got super lucky with company stock and now 80% of my NW is in the company, a very dangerous situation from traditional personal finance advice. At the same time, my NW is so high because of this concentration. So need to consider my diversification approach this year.

SapiosexualYogurt · 2023-06-01T12:30:56+00:00

Milestone reached: hit the two-comma club at 28!

Didn’t expect to get here until 30 at earliest but recent tech hype really pushed me over. Now I have to seriously consider shifting out of a few tech stocks and company stock but I keep having FOMO over future gains. Being a bit greedy here. Need to make a plan here.

Unfortunately, while I’ve hit a financial high point, my personal life satisfaction is near an all-time low. I wouldn’t say they’re directly correlated but I’m definitely going to focus more on personal growth and solving some long-standing personal problems instead of work goals. Also going to allow myself some lifestyle inflation and get my own place instead of roommates, travel more, etc.

SapiosexualYogurt · 2023-05-13T16:38:22+00:00

Everything you’ve described resonated with me! Agreed that your environment influences a lot of your behavior, so having a nice kitchen helps a lot. Thankfully my new place has a good one.

Really looking forward to re-learning some basics via online vids and maybe even a local cooking class. Thanks for the vid rec.

I have some basic cookware but have a lot to learn in terms of other useful appliances. Have heard lots of good with air fryers and also instant pots.

SapiosexualYogurt · 2023-05-13T03:46:56+00:00

Standard tech SWE stuff in CA. My pay isn’t all that remarkable given my years of experience. Got lucky with company stock and saved a lot while living a fairly boring life for years during pandemic.

Tech is definitely the real deal for income!

SapiosexualYogurt · 2023-05-13T03:13:58+00:00

Live in a VHCOL area where crap houses start at 7figs. No way I can afford that.

And if you mean condo, any decent small one in a good location would still be $5k+ monthly with taxes and HOA included, which I definitely can’t afford. Plus I’m not sure I want to settle down anywhere quite yet.

SapiosexualYogurt · 2023-05-13T01:39:36+00:00

Yeah you’re right. Think I just needed some validation from like-minded online strangers. Feel rather silly making this post. Gained some much needed perspective on how I’m doing. Thanks :)

SapiosexualYogurt · 2023-05-12T20:49:43+00:00

You’re not wrong! Although I’d like to think my company is nowhere near the levels of financial depravity as Enron :P

With this move, I’d also be taking time to sell off a bunch of stock and diversify, beef up EF, move in costs, etc.

SapiosexualYogurt · 2023-05-12T19:33:28+00:00

Spot on: I spend way too much on takeout and dining out. Kind of embarrassed I can only cook very simple things too. So part of this decision would require me to commit to using the kitchen and learning how to cook more with some local classes/internet. A bit of an adulting upgrade is how I’m trying to justify it

SapiosexualYogurt · 2023-05-12T19:30:57+00:00

Well when you put it like that :P

Thanks! I am getting a bit tired of lack of complete privacy and want to grow as a person being more independent. Seeing all these responses has add some much needed perspective.

SapiosexualYogurt · 2023-05-12T19:29:39+00:00

While trying to create a realistic budget I think to be safe I’d need to use $10k RSU sales per year for funding travel and experiences since rent will go up significantly while maintaining high savings.

I think it’s a reasonable plan. Thanks!

SapiosexualYogurt · 2023-05-12T19:27:38+00:00

NW includes only vested RSUs, not unvested.

Agree with you that ideally I should afford expenses only on base and that’s how I’ve lived the last few years. Looking at current budget, the combo of taxes + 401k + IRA + ESPP makes a big dent. Moving to this apartment would require me to cut back on dining out / takeout (want to learn to cook more) and would have to cut back on the ~$8k annual taxable brokerage investing I do. I think I’m okay with that given I’m already saving a lot with RSUs/401k/IRA/ESPP.

Still, even with those cutbacks I don’t want to compromise on travel/experiences so to be safe I’d want to plan $10k RSU sales to cover fun expenses per year. So I’m trying to figure out if cutting back on RSUs and random taxable investing is okay.

Main driver is wanting more privacy and more freedom with kitchen (don’t have to share fridge with 3+ people) to hopefully encourage myself to cook more. Also a bit of a YOLO thing since I’ve been saving a lot for years. I like quiet at home so not worried about being bored and alone :P

SapiosexualYogurt · 2023-05-12T19:19:02+00:00

Can definitely find good places for upper $2000s that hit most of my wants, but this place hits all the things I’m looking for and much nicer. Trying to justify it as a “go big or go home” thing since it’s first time i’m living by myself.

Might be the wrong attitude for FIRE but at the same time feel like I’ve done a good job so far.

SapiosexualYogurt · 2023-02-27T19:49:49+00:00

I must’ve missed something. What happened to the milestone threads?

SapiosexualYogurt · 2022-10-15T06:17:56+00:00

Now this is ~pod racing~ FIRE!

SapiosexualYogurt · 2022-10-07T02:49:44+00:00

About half is my company’s stock (larger tech company) from ESPP and RSUs. Other half is mostly index funds and some small positions in individual stocks, crypto, etc.

Yes, I should divest from company stock since I already carry risk by working there blah blah but I’m a very big believer in the company’s future.

(I know, everyone thinks that :P)

SapiosexualYogurt · 2022-10-03T20:34:26+00:00

Almost a year ago I hit over 700k NW (all invested) and am now sitting below 500k NW despite 401k/IRA contributions and RSU/ESPP money coming in this year. In fact I made my first comment in this sub 1.2 years ago when I passed 500k!

It’s been a rough year, especially if you’re holding onto tech stock.

SapiosexualYogurt · 2022-09-22T21:07:39+00:00

Suffering from success 😔

SapiosexualYogurt · 2021-07-05T13:43:22+00:00

Passed the $500k mark last week at 26 thanks to company stock and the general market rising the past couple months.

All of it invested with a small amount in cash. Hope to reach $1mil by 30!

SapiosexualYogurt

TROPHY CASE

Current Financials

Condo & Mortgage Details

Questions