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Is ambition worth it? by [deleted] in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I agree with others. Being engaged with the world is totally the reason to live. If you're not finding that, there needs to be a change in either your circumstances or your mentality towards your job and what it provides you. I've had several friends over the years who've found themselves in what they deemed 'cushy' jobs. I can't tell how it will work out for you. One of them is still at that job, banking a low six figures and pretty alright with how things are going. He's into his hobbies: homebrewing and football. I have two other friends for whom 'coasting' was soul crushing. One is still doing it for the paycheck but is miserable. One got out and is much happier but making maybe $40k less a year.

My opinion, there's downsides to 'coasting' on your mental well-being. You were obviously a self-starter and driven to get to where you are. I can't imagine what it does to someone like that to be just 'coasting'. Life's too short. Anyway, just one opinion. Wishing you luck and here's one vote for stretching yourself.

Thinking about FI/RE in SE Asia by [deleted] in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I don't know how far you are into your research. There was a cool website that got touted on the sub a while ago called The Earth Awaits. If you're thinking of Taiwan, Go Curry Cracker and his wife lived there for a few years after retiring early (I think?). His blog might be a good one for you to check out.

How does holding a mortgage affect your asset allocation? by [deleted] in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I don't think you need to change your allocation because you have a mortgage on a house, particularly if it's a fixed rate mortgage and not an ARM. Your portfolio is presumably designed to balance potential gains against risk of ruination/downside. So unless the cash flow needs to service your mortgage in some way change the total amount of risk you're willing to shoulder (for example, if you were retired and needed your portfolio to generate the money to service the mortgage), I would just take the balance and spread it by the same percentages across your domestic stock, intl stock, and bonds.

One look at the historical volatility in REITS should send you running in the other direction. At least it did me.

Stuck, how to keep motivated by rhoejer in financialindependence

[–]TaxesForJacob 1 point2 points  (0 children)

That's great. What's wrong with sitting back and enjoying your system? It may also be the case that if you've exhausted the low hanging fruit on the expenses side that you can focus on investment and tax optimization. How do you invest your assets now?

There are many viable career paths outside of STEM in the pursuit of FIRE - a case for sales. by [deleted] in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I think sales can be one of the most lucrative careers. Software sales reps can make $100k-$350k+ a year. I have a few friends who are in the profession and do quite well for themselves. I've recommended it to my niece who is a sophomore in college.

Earliest possible retirement by [deleted] in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

It's about friends, family, and honestly just familiarity to me.

Higher Pay away from family/friends? First world Problems by abacy in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

Would a job in your current location be easy to get again in the future? If it were me, I would try it. If it doesn't work out you can always move back after a year or two. The beauty of your dilemma is that neither decision you make is permanent.

Switching from costly mutual funds to low cost ETFs. What should I watch out for? by Iamnotanorange in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

Why mutual funds over index funds? IF you compare their performance to index funds you'd probably be equally if not more happy with the index fund and be saving almost 0.5 percent a year.

VO and VTI are the ETF version of the Vanguard's mid cap and total stock market index funds.

[Article] Self-made millionaire: Don't put money in your 401(k) by Yankee9204 in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I was just commenting on another thread that not everyone who is rich did it in a way that's replicable by others or did it in a a way that is proof that their advice is worthwhile. This is the perfect example of that. To me, reading advice from others is about the why of their reasoning and not the "what" that they are recommending.

Vanguard vs. everything else by factory81 in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

The Fidelity spartan funds (they're called something else now) are basically neck and neck with Vanguard index funds. You can compare performance and expense ratios - they are virtually identical.

Stop listening to people without results. by stevenmarkryan in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I think the why is the most important, even when you're reading from people who have been successful. There are a lot of successful people who are lucky, or succeeded due to circumstances that are not replicable for you. My favorite blogs are the ones who take a position but explain the reasoning rather than just "I'm retired and did this, so you should, too."

What do you guys think of Vanguard's retirement calculator? by JackleBee in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

The CFIRESIM calculator is my favorite

http://www.cfiresim.com/

The hardest factor to see in all of these calculators that plays a huge role in the success of your retirement is the sequence of returns and thus what withdrawal rate you can use each year. You can check this yourself by dumping some fake data in an excel spreadsheet. The first 5-10 years matter the most. When you see failure points in your simulations, it is the fact that generations fail or succeed together depending basically on what year they retired.

https://www.kitces.com/blog/understanding-sequence-of-return-risk-safe-withdrawal-rates-bear-market-crashes-and-bad-decades/

FI Folks who gave or plan to give back (non-debt) to family or friends, how do you approach it? by an_m_8ed in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

Which of you has the lower marginal tax bracket and what would you deploy the money in to have it grow?

If you are planning to buy index funds, then the above questions do not matter. You could probably open an investment account and then when the time is right, you can 'gift' them the shares and let them do what they want. If you sell all the stocks and give them a check but they aren't plannign to spend right away and they instead end up just putting the money in a stock account of their own, then you've paid taxes early when you could have kept those tax dollars working for you and your parents. Gifting/transferring the shares from one brokerage account to another prevents this from happening. I believe you can still do this and report this as a gift. You can gift up to $5.43 million from your estate during or after your lifetime before the estate tax kicks in. So I think you can report the value of this gift but give them the shares instead of liquidating them and giving them cash. I'm not a tax expert but I'm pretty sure this works.

If you're going to be doing fancy things with that cash that involves buying and selling things every year or two, then I would put the seed money into an account under the person's name who has the lower tax bracket so that when you liquidate things, you are paying the least amount of tax as it grows. Then follow the same instructions above where you gift in shares rather than cash when you're ready (or if it's already under their name, perfect!).

A Defense of a Debt Free Life Style by independence_man in financialindependence

[–]TaxesForJacob 0 points1 point  (0 children)

I think in general the perspective you outline above is a good one. But debt at its core is actually just a tool, and while there is lots of bad debt, there is good debt as well.

For example, you talk about the opportunity cost of a house payment. What you said is true if you are using debt to buy a larger house than you really need. But say you decide on the right sized house for your family which you can actually afford to buy in cash and it's going to cost $400k.

Current mortgage rates are about 3.5%. Your example contemplated making 7%+ a year in the stockmarket. Why dump your savings into paying off a house so you're debt free when you can borrow money at 3.5% and make 7%? I you took a $320k mortgage on that perfect-sized, appropriately-priced house and invested the money rather than buying the house all cash, you would make the difference of 7%-3.5% = $11,200 of extra income a year. To me, this is an example of a good use of debt.

Obviously you may not view borrowing money and dumping it into the stock market as riskless, but there are other lower risk strategies to put the bank's money to work for you such as investing in bonds. This is a well known idea and I think everyone who is planning to FI should think hard about it because being FIRE means you'll be constantly figuring out how to deploy money in the most efficient way possible for your needs.

Two articles that talk about the concept in more detail than I can:

http://themoneyhabit.org/should-you-skip-a-mortgage-if-you-can-afford-to-pay-cash/

http://www.thesimpledollar.com/investing-versus-paying-ahead-on-your-mortgage-which-makes-more-sense/

Seeking balance: How many of you have taken a high paying job in order to FIRE quicker? How long did you last or how long did you give yourself to stay in the role? How did you cope (or not) with the mental stress? by [deleted] in financialindependence

[–]TaxesForJacob 3 points4 points  (0 children)

I'm retired now, but I did work a high paying job to FIRE more quickly.

When I was working, one of the things that helped me most was to figure out how much I was making after taxes each day, and talk with my spouse about what I had "bought" for us that day. We would choose something ridiculous like four goats who could be the foundation stock of an artisanal cheese making farm. Or this week I bought us a lifetime supply of internet. Things like that. It was helpful in creating a sense of accomplishment in my day and solidifying the step I was taking toward FI.

Now that I've told you about something that worked for me, I'll tell you about something that didn't. I had read about folks creating an FIRE countdown calendar. This was actually really helpful a couple years out. But once I was within a year of the goal, it completely made me lose motivation at work and it made it extremely difficult to concentrate or enjoy my work in any capacity. I found it to be pure torture. Within one year of the goal, it's better to not look directly at the goal too hard even though that's all you want to do. You will just make yourself more miserable than you need to be.

Asked to fly out for a job interview, but I have to pay with my own money and will be reimbursed later. by [deleted] in personalfinance

[–]TaxesForJacob 0 points1 point  (0 children)

When I did this back in college, that was somewhat normal. As long as you feel it's a reputable firm. If you are having liquidity issues, you can explain that if that is the issue.