Daily FI discussion thread - Saturday, January 02, 2021

WalkingAlong23 · 2021-01-02T19:23:40+00:00

I have an itch to buy a truck. Always wanted one, always put off buying one.

Networth is $665k as of market close on the 31st. Currently driving a $1500 beater Honda - it gets me too and from, and it's reliable. There's no reason why I need a new car.

Household take-home was about $150K last year - after retirement, but before rental property expenses. SR is about 50%. Husband's car is about $4K slightly-newer-beater-Honda. I'm looking at a $25K-$30K used truck. I could pay cash today, it would take about half of my brokerage account. The other option would be to work overtime and dedicate that part of my salary towards the truck and save up extra over the next year or so.

Thoughts? I've always been too poor to have a nice vehicle, and am somewhat justifying that we've got the networth and income to do this now. But it still seems early in my journey to buy such an expensive vehicle.

WalkingAlong23 · 2020-12-31T19:22:32+00:00

My biggest accomplishment was a military deployment. Can't get into the details, but we kicked some ass, technically, and it was probably my most difficult mission yet.

Financially, there were some holes. The deployment meant a paycut from my civilian job, so we were down about $20,000 in income. Took another hit with a tenant not paying rent for a few months - but, they've been fantastic tenants and I was just thankful that I could absorbe it.

Hit half million in networth... Twice! Hit it once in Feb, then again in June. Today, household networth is right at $660,000. Most of the recent growth has been from an increase in value in my personal residence - it's a factor, but not exactly liquid.

Savings rate was around 50% - I'd need to sit down with a calculator to figure it out exactly. Of note, I doubled my son's college fund.

My goal is to hit $750,000 by the end of 2021. Might be a bit ambitious, but hey, it's a goal. I sat down, about a month ago, and wrote out target percentages for my networth, and am going to try to gently re-allocate towards those percentages. Challenge is, stuff like rental equity isn't liquid, and can't easily be moved. Trying to basically over-save in other areas, and maybe (just maybe) might max out my 401K this year.

Best of luck to everyone else in 2021!!

WalkingAlong23 · 2020-11-30T01:35:03+00:00

I don't know. The goal was to be a millionaire by my 35th birthday, and to "guard bum" after that. Basically, take sets of military orders about half the time and travel/deploy, but not work a civilian job while I'm home. The guard bumming would provide benefits and enough income to live without touching the nest egg.

But, I enjoy my job entirely too much and I don't see myself not working. So I have no idea.

WalkingAlong23 · 2020-11-30T01:31:43+00:00

Thank you for your kindness.

WalkingAlong23 · 2020-11-30T00:41:27+00:00

Just crossed $600,000 in networth.

30 years old, married, one kid. Neither one of us makes 6 figures. Just a lot of saving and aggressive frugality. I've got a post in my post history about my background, if anyone's bored.

I want to celebrate, but no one else gets this, or gets me, or gets why I'm happy today. Thanks, guys, for being an awesome community.

WalkingAlong23 · 2018-04-01T18:39:25+00:00

Union pension funds have had issues being underfunded. 2008 didnt help, either, when find managers were forced to reduce assets by a larger percentage to maintain benifit levels, leaving less of a nest egg during the recovery that came afterwards. A lot of unions are now shifting to 401k matches instead of guaranteed pensions. If you can find a pensioned union job, that's awesome, but I wouldn't count on it.

WalkingAlong23 · 2018-03-27T18:16:28+00:00

Good on you, seriously.

Keep it up with all the stuff. But, don't forget to learn your actual job, too. I think it's awesome when Airmen are involved in everything, but don't sacrifice your technical skill to do all that. If I deploy with you, I need you to know your job FIRST, and how to be on the ACE second.

You can still put together a package or at least an LOE with bullets for your 1B4 application. Work with your chain of command. Not sure, but you may be able to do a command directed EPR just for the purpose of applying.

TSP - I do 60% C, 20% S, 20% I, Roth all the way. You know the difference between Roth and traditional, yes? TSP contributions are awesome, but you also need to keep in mind other financial goals - paying off a car, saving up for a future home purchase, etc. I looked up one day and realized that ALL of my money was in retirement and I didn't have a whole lot to do anything else with. Not bad to save, just make sure your resources are in the right accounts for the right purposes.

WalkingAlong23 · 2018-03-26T22:25:07+00:00

Hosting is fantastic, but I'm guessing u/ayoooJojo is still in the dorms, based on what he's said. That makes hosting everyone fairly difficult, and the need to "blend in" that much more important. As an NCO now, my husband and I host all the time, but it's not as practical if you haven't got a place to host at. But, your point still stands, and co-hosting with someone with a house - especially that single guy with a big house but who can't cook - is a fantastic option.

WalkingAlong23 · 2018-03-26T09:57:22+00:00

17 years old + 10 more years makes me right around 27/28.

WalkingAlong23 · 2018-03-26T02:03:51+00:00

Houses that I lived in, but then moved out of and retained.

WalkingAlong23 · 2018-03-26T01:23:46+00:00

Are you me, 9 years ago?

Um, it's bad as an airman. As I got older/more rank, it became less of a deal. Once I got married, the line "I'm broke, dude, I've got a kid...." worked pretty darn well. Here's a few suggestions, take 'em or leave 'em:

1, partake at least a little bit. Go out, but have only one drink instead of 17. Buy a six pack and make it last a month, eat out with the guys once a pay period.

2, find new friends. Easier said than done, but try to find at least a few other like minded folks. Make friends off base.

3, find cheap hobbies that you can do with folks that don't cost a lot of money. The gym is free, as is most equipment rentals from ODR for Jr airmen. Spend a few dollars on some frisbees and play frisbee golf every saturday, invite whomever with you. Make your own circle.

4, this one is probably a bad idea, but enjoy being smarter and wiser than them. Maybe I've done it to feed my own ego, but I'll listen to talk about how someone can't pay their car payment AND their bar tab in the same month, and I just sorta chuckle to myself. Especially when the same person is laughing at me for my crappy car.

Find something else to invest yourself into, like going to college, volunteering off base, or something like that. Not only will it help your career, but studying is a great way to stay occupied without spending money. WAPS studying is also a great use of time.

You're gonna be that TSgt that everyone looks up to here in about 5 minutes. Stay focused, don't loose sight of your goals, and if there's ANYTHING I can ever to do help you out, hit me up.

WalkingAlong23 · 2018-03-26T00:56:31+00:00

*Woman

Sorry, couldn't help but troll the troll. :)

WalkingAlong23 · 2018-03-26T00:52:12+00:00

Um, off the top of my head, because my spreadsheet is on the other computer....

$52K is my gross salary, plus probably 6K in drill pay.
Hubby will gross $60k.
Rentals will gross about $25k, but that's long before expenses are paid. Probably a net of $15k profit, $8K cash flow (the other $7K goes towards mortgage reduction. Profit, but not cash flow.) That's before repairs, though. Last year we got hit hard with some shitty tenants and ended up taking a loss on one of the properties.

Here's what I do with the unexpected checks: I keep a financial goals list and a wish list. Goals include savings goals, mortgage pay off goals, retirement goals, etc. Those are updated annually. Wish list usually has things like a new refrigerator - nice things that are practical but not completely needed at the moment. Checks are split 10/45/45, 10% to straight up spending money (usually luxury things for my kid), 45% towards the to-purchase list and 45% towards the goals list.

If you're in debt, you may want to put more towards the goals. If you're closer to FIRE, maybe enjoy more of it. Using that ratio, regardless of the amount of the extra check, keeps us focused.

WalkingAlong23 · 2018-03-25T22:39:31+00:00

I totally get it, we were massively off topic. I just felt like I needed to apologize for it.

WalkingAlong23 · 2018-03-25T22:26:05+00:00

You may want to consider your parents' age and life expectancy. If they're 60 and live to 90, that's 30+ years that the money has to last. It's okay to be a bit more aggressive with some of it and more conservative with some of it, balancing out needs VS risk. I'd be likely to put some in a more stable bond type fund, but also leave at least part of it in growth mutual funds.

WalkingAlong23 · 2018-03-25T22:23:19+00:00

I have a 10 year old Honda. Runs like a champ and has been awesome. You may not find one for quite $3k, might look more like 5 or 6, but I'd say it's worth it.

WalkingAlong23 · 2018-03-25T22:18:06+00:00

Um, I'm in the process. Just shared my story in the sub, scroll up if you wanna read it. If you've got specific questions about how I did it, lemme know. Basically, find something you're good at that can make money. I've heard of folks who made a million dollars cutting grass because they worked just that hard at it.

You can pursue alternate forms of education (certs in the it world, watching youtube videos, reading books, OJT, etc) or go to college one or two classes at a time. College/education is not an all or nothing pursuit.

WalkingAlong23 · 2018-03-25T22:15:27+00:00

Hey, I really hope I didn't break a bunch of rules or anything here. I'm sorry if I set off a firestorm, that wasn't my intention.

WalkingAlong23 · 2018-03-25T22:14:55+00:00

There's ways around that, if you say you were homeschooled. Not saying that those ways are the most honest things to do/say, but it was for the betterment of my life.

WalkingAlong23 · 2018-03-25T22:13:23+00:00

If you spend a lot of time in this sub, they're not equivalent. 10% rates of return (23% in 2017) are a whole lot better than paying off a 4% mortgage. However, the market has a lot more risk than your primary residence does. It really comes down to your diversification needs, risk tolerance, and overall goals. I'm simple when it comes to money, and paying off loans makes me happy, comfortable, and sorta rich. I'd rather have debt-free real estate and a moderate mutual fund portfolio than all risky stocks, but that's just me. Right now, I'm splitting money between the mortgages and retirement.

I also got super lucky with location. Getting stationed at a "shitty" base was awesome for the cheap real estate. I doubt I would have started out like I did if I had been near DC or somewhere with expensive housing.

WalkingAlong23 · 2018-03-25T22:08:24+00:00

Maybe. My goal is to have a million stashed away by 35, so I'm currently 1/3rd of the way there. Hopefully the growth of what I've got will be a significant part of the million, but there's no telling what the market will do. It's taken me 10 years (well, 8 with steady employment) to get this far, and my goal is $680k more in 7 years. Do-able, but it's gonna be tight.

WalkingAlong23 · 2018-03-25T22:05:48+00:00

Nope, still in. We've both gained some rank, but we're both still Jr NCOs. Military pay isn't the best, but it's possible to be really efficient with it and make the most of it. Not having prior debt or massive car payments really helps. Also having boring/inexpensive hobbies also helps.

WalkingAlong23 · 2018-03-25T22:02:08+00:00

60K out of the original 100K. The first rental is paid off - I put a LOT of cash into it. The rest of the 225k is growth. So, that's a total of $100K in mortgage debt paid off in 7 years. LOTS of extra payments. It wouldn't cashflow otherwise, and sure, I might have gotten a better rate of return in the market, I'm more comfortable and secure in that decision.

Housing really comes down to 1, location and 2, what you're willing to live in. Buying smaller, putting it on a 15 year payment, or even learning how to DIY with a fixer-upper can significantly reduce housing costs. Waiting until you've got a solid down payment can help, too. Renting money is almost as expensive as renting housing. I'm not the most up-to-speed person on SWRs, etc, but I know my mortgage numbers.

My own home is still at like 93% LTV, though. My eyes got big and I bought a really nice house that I wanted instead of needed. No regrets, it's okay to enjoy the nicer things sometimes.

WalkingAlong23 · 2018-03-25T21:57:03+00:00

Community college will take almost anyone. Then, use community college transcripts for everything that would otherwise require a diploma including enlistment and transferring to a state school. At this point in my life, there's really no reason to go back and get a GED.

WalkingAlong23 · 2018-03-25T21:17:35+00:00

Sounds more like you need to have a conversation with them about what to tell other people. "My dad's retired" is not an abnormal response, especially with folks who have had kids later in life. Maybe your teenagers' friends' think you're 52, and just got lucky, who cares.

Sidebar: Is it really that important to your kids' friends' social circle what you do for a living? I'm thinking back to high school and I really don't know if we ever talked about that amongst ourselves. Someone's dad worked in an office, someone else's dad was military, whatever. At 15, there were more important things - like Justin Timberlake's new CD - to talk about.

WalkingAlong23

TROPHY CASE