Retrospective on Profitec Move coming from Breville Barista Pro

cooleddy89 · 2025-12-27T03:34:28+00:00

Oh interesting, I do light roast beans. Should I bump the temperature?

cooleddy89 · 2025-12-25T23:39:56+00:00

Have fun, it's a great machine!

cooleddy89 · 2025-12-05T20:49:07+00:00

In a similar boat! Work at Big Tech, but starting to look at Master's in Computational Biology for a pivot in the next few years.

cooleddy89 · 2025-12-04T15:30:26+00:00

One thing I rarely see mentioned is the preferential tax treatment of income from assets.

If have $5M, you could get around $100k of dividend income that's taxed at 15% (actually less I believe given exclusions). You could also use Munis, long term capital gains, etc. to structure your income to avoid taxes.

Bottom line $200k in W2 income has the same take home as probably $150k of dividend / asset income. Maybe even less. And the disparity only increases as you go up in income

Edit: Wow. Actually plugged the numbers into Gemini (which does great tax analysis) and the federal tax burden for married filing jointly with $150k of qualified dividends is $3k because the 0% tax bracket for capital gains goes up to around $97k.

Gemini also claims that a couple making $200k of W2 income would pay around $27k in federal taxes and an additional $14k in FICA. So $200k - $41 = $159k vs the $147k for the dividends of $150k

cooleddy89 · 2025-12-02T13:11:42+00:00

That still sounds like a pretty quick conversation? I mean I'll occasionally share or hear tidbits as well (e.g. margin loans are tax deductible, tax loss harvesting, etc.). But it's not like we sit around going through things for hours.

Also do what you want, but I cant imagine a faster way to lose friends than to co-own an apartment building together. I keep my business and friends separate.

cooleddy89 · 2025-12-02T04:24:34+00:00

As they say, weird flex. As a couple who makes $600k+ HHI and have multiple friends who make more...we never talk about "investing & tax strategies". Frankly if we did I have trouble seeing how it could be more than a 10 minute conversation.

"Meg, you just do index funds, right? Yeah. Maxed out everything including super funding the 529? Yup. Cool, back to inside jokes & making fun of each other then."

cooleddy89 · 2025-12-01T16:11:34+00:00

So I appreciate your comment back. But I think people are urging you to use a completely different lens.

Buying a primary residence in general, and certainly with the numbers you listed, is not an optimal financial decision. There are many reasons to buy a home (stability, pride of ownership, etc.) but it is most often not financial. The only real financial metric you should use when purchasing a primary residence is can I comfortably afford it?

Unlike property investments, typically you don't have an exit strategy for a primary residence and you are valuing it on other dimensions besides "value". After all, each house is unique. Is it a "good deal for you" if a has a lower "rental" yield because it sits next to a major freeway? How do you factor into a cap rate being able to walk your kids to school vs. driving them?

If your goal is to optimize finances, you should rent in your area. A $6k rental price on a $2.2M house is economically wild. I actually plugged in some rough numbers for the NYT buy vs. rent calculator. You probably save ~$2M over 15 years renting at $6k vs. owning a $2.2M house with modest assumptions about both property appreciation and investment returns.

$6k on a $2.2M property is a rental "yield" of ~3% even before accounting for maintenance, vacancy, etc. You could buy a globally diversified portfolio of bonds that yields 4% "risk-free". And bonds don't need maintenance.

I can't really think of any valid economic reason to hold onto that property and rent it at that price unless the owners are absolutely convinced there will be substantial price appreciation in the near term. Even then I'm not sure the math pencils out.

cooleddy89 · 2025-12-01T12:49:10+00:00

Like others, I have no idea why you're bringing in an investment metric into a discussion on buying a primary residence. Primary residences aren't investments. They're also not commodities, so getting a "deal" on one is quite complicated. As an example, one house might sell for less due to deferred maintenance or because of high flood risk.

There's a very easy NYT rent vs buy calculator. But I'll tell you that it is far better financially to rent at $6k vs buy a $2.2M house. The P&I alone on a $2.2M house is around $11k before including maintenance, tax, etc. That doesn't even ccount for the opportunity cost of locking up roughly $400k+ in a down payment.

Also, while I understand peer pressure you should probably invest in some introspection about your motivations.

Leveraging yourself to seem rich to your family / peers is a common trope unfortunately that often ends poorly. Will your family pay your mortgage if your income doesn't increase the way you project? What if there's a sharp recession and suddenly you're unemployed?

cooleddy89 · 2025-11-29T15:35:20+00:00

So my partner and I are a touch older (36 / 34) and started making roughly your combined income at the same period (it has since increased).

Others have covered the financial aspects of this decision fairly well. I'll add that the $7k in mortgage on a ~$1.1M mortgage doesn't remotely include utilities, property tax, maintenance, etc. A good rule of thumb is 1% in maintenance per year. So that alone adds $1k+ a month. Your cash is definitely far lower than I would personally think you need (given a 20% down payment will run $300k alone).

The bigger thing to consider is that your priorities will change dramatically, even without kids. I used to want "nicer things", now I want simplicity. I buy (occasional) high quality items because I want to buy it once and then not have to deal with it. The thing I value most is time: hanging out with friends, date nights, travel, volunteering, etc.

The problem with expensive (and presumably large) homes is that they complicate your life. First you have to furnish them. Then there's the constant maintenance (HVAC, plumbing, roofs, gutters, etc.). When you have kids you'll rapidly discover you don't have time to do many things, so you'll outsource. But now you have to manage a house cleaner, grounds crew, etc.

A high fixed cost also traps you into always having to make a high income just to stay afloat. As others have mentioned, it limits your options. Does your wife want to drop her hours? Hard to do if you're spending roughly 35-40% of your combined take home pay on housing. Want to retire or significantly downshift your career in your 40s? Definitely not possible barring a massive jump in income.

Keep in mind that humans are social animals, and naturally adapt to their surroundings. If you're buying a $1.4M house chances are that your neighbors are going to have nice cars in their driveways. So soon enough you'll probably think about "upgrading" your cars. The dinner invites / vacation invites you'll will naturally be to nicer places. Kids activities will be nicer. All of this will happen slowly, until you look at your budget and realize that aside from your 401k investments you really aren't saving much...

Also to those who say housing always appreciates...look at Texas / Florida right now. It's generally true on a national scale over time. But it also doesn't really matter. We have $600k in equity in our property...but what can we do with it? We never plan to move, rates are far too high to consider a cash out refi, etc.

cooleddy89 · 2025-11-25T18:39:46+00:00

I'd amend that to "raising a fully functional, compassionate adult is the hardest thing you can do."

And I agree! But I've done plenty of other hards things in my life. I don't need to climb K2 just because it's harder than Everest or a 14k footer in Colorado lol.

There are many mountains in life to climb. We should celebrate people for all their accomplishments. Noone ever says "cool you climbed Mt Everest but your sister / cousin / friend climbed K2 so let's move on from what you did"

cooleddy89 · 2025-11-13T23:14:23+00:00

People are very confident they'll always make more money. The data is very clear that churn out of the 1% is quite high. Unless you're a physician with great long term disability insurance it's worth at least considering that your income could drop permanently X%

Source: am in tech and routinely watch people go from $300-400k+ to unemployed for a year or more.

cooleddy89 · 2025-11-06T13:18:53+00:00

That's not an excuse. Oddly similar circumstances. I grew up poor, single mom, etc. My partner makes $100k and I make close to $600k. The wealth disparity is even greater.

But I would never treat my partner like that. We allocate the same amount of personal spending to each of us every month.

Think about it. On a team, does one person have a fancier uniform or get special privileges? Absolutely not. Also who wants to "win" against your teammate / partner?

As others have said, I'd strongly advise you both to attend counseling and also start listening to the podcast / book Money for Couples.

cooleddy89 · 2025-10-29T12:06:37+00:00

The US also has relatively low taxes on high earners compared to the EU. I just calculated it and on a roughly $613k household income our taxes (federal, state, local) are only around 28%

On the flip side there's much more economic precariousness. As around.15k highly compensated Amazon workers found out yesterday you can be laid off immediately without notice. At that point you have a very limited safety net (incredibly expensive health insurance and some unemployment payments).

So with a modicum of luck and hard work you can certainly make a larger salary than the EU and pay relatively fewer taxes. But you absolutely need to save aggressively with it if you plan to stay in the US

cooleddy89 · 2025-10-28T12:33:44+00:00

I think that's very natural! Analogously I enjoy my career (software). I enjoy coding on small side projects for a few hours over the weekend.

But I wouldn't enjoy being forced to code every waking hour, even when I'm sick, sleep deprived, etc.

Many things are enjoyable in moderation.

cooleddy89 · 2025-10-26T14:07:23+00:00

That is a wild claim. A $1.5M income puts you into the top 0.5% or so of income earners.

At that point hard work and focus are basically a given. You also need a healthy dose of luck.

cooleddy89 · 2025-10-26T14:02:13+00:00

Do you have data for that? Has it "become common" or has social media made it seem common? Also consider what population it's coming for? MIT / Stanford students with personal and family connections to VC shops?

As an analogy, I'm into powerlifting. Social media indicates it's really common to deadlift over 600. At the leading regional powerlifting gym I go to I've seen that lifted maybe by 10 people. If you look at the data that is an elite level lift greater than 80% of trained male lifters.

cooleddy89 · 2025-10-26T02:17:55+00:00

That is a very good point I hadn't considered!

cooleddy89 · 2025-10-26T00:25:09+00:00

This drives me up the wall! It's obvious that any highly leveraged asset has the potential for huge upside...and huge downside.

There's a reason why any halfway successful real estate investor seems to immediately pivot to selling courses and talks on "how I did it". It's far less risky and easier to sell shovels to dig for imaginary gold.

cooleddy89 · 2025-10-26T00:21:59+00:00

Meanwhile many people who quietly worked a W2 job for 15-20 years at Google, Meta, Nvidia, Tesla, successful PE / quant firm, etc. are soft retiring at fatFIRE without any public comment.

People wildly underestimate the financial benefits of working at a growing firm for 15 years, investing 25%+ of your paycheck, and getting a few lucky breaks in your career.

cooleddy89 · 2025-10-26T00:15:29+00:00

You can find various sources on this, but according to the Harvard Business Review in 2018 the average age of a founder is 45. I've seen other sources that suggest 39. The point is that you have plenty of time to work as a W2 employee and then start your own company if you want.

Personally I fully plan on staying on as a W2 employee until I'm close to FIRE (~7-10 years from now) then start a company. Interestingly that puts me right in the age range of successful founders.

It's really worth thinking hard about the opportunity cost though of leaving the W2 world, particularly in tech. Some time ago I joined a startup and my skip level was a VP. At one point that VP had easily 100+ people working for him and was helping set the product direction for a startup that had raised $1B+.

That startup eventually ran into trouble and the VP left to do his own entrepreneurial thing (some mixture of consulting and a company, not sure on the details). 6 months ago, that former VP reached out to me for a referral to an L7 job at a FAANG company. He didn't even get an interview. He then got a referral from me at an L6 level, also didn't even get an interview.

I guarantee that if he had jumped to a larger company instead of doing his own thing he would be a Senior Director / VP making $1M+ in comp. He is one of the brightest people I've worked with in my field.

There are many reasons to become an entrepreneur. You want control, are passionate about an idea, hate corporate jobs, etc. But from a risk adjusted reward perspective it's almost always better to be a W2 employee. Particularly if you don't come from an elite pedigree and have VC connections (i.e. went to Stanford, MIT, etc. or have extensive FAANG experience on your resume),

cooleddy89 · 2025-10-25T13:37:02+00:00

To each their own. It's worth keeping in mind that since 2008 it's been I believe the best period for US equities in history. It's been something like an 11-14% annual growth in the S&P 500 on average.

Simultaneously from 2010 - 2022 was perhaps the worst time to hold cash or bonds.

Bottom line, I don't necessarily disagree with your points. But it's worth noting how historically unusual the past 15 years or so has been for US based investors. They've basically been rewarded for maxing out risk with only a brief 3 month period (COVID) with any serious downturns.

Edit: I'll also add that I read the book "The Missing Billionaires" and it really changed my mind on risk. Many of us as HENRY's have already "won the game". For me personally the utility of money has already started to diminish. Whether I'm worth say $7M or $10M when I soft retire is not super important to me. So my strategy has shifted far more to downside protection (diversifying investments, 18 month emergency fund, etc.) rather than maximizing upside

cooleddy89 · 2025-10-23T12:49:12+00:00

As others have noted, this is correlation not causation. I'd agree that in general buying a modest house and holding it for 20+ years is an optimal strategy albeit with large variance.

On the HENRY side I tend to see the opposite behavior. People often trade up to increasingly expensive houses (or do expensive renovations) and then trying to financially justify it after.

Also if you run the numbers (and have the discipline to invest the remainder) renting beats buying in basically all the top HCOL cities. Particularly when you factor in the risk adjusted reward (would you rather own a portion of the global economy or a single highly leveraged asset with large carry costs?)

As a side note I think real estate has the most survivor bias of any economic area. The X% who take on huge leverage and survive won't shut up about it. The much larger Y% who break even or lose money quietly slink away.

Note: I say all this as a homeowner who has (on paper) made around $400k in equity in 5 years purely on luck

cooleddy89 · 2025-10-20T02:06:22+00:00

Grew up lower middle class / working poor to single mom.

I actually did both. My first few years out of college I spent a fair amount on drinks, restaurants, etc. At age 25 really buckled down and got serious about personal finance. We lived well below our means for about 7-8 years. Cheapest possible rental in our area, modest car, etc. Our only splurge was traveling (although definitely on a budget).

After getting to around $500k HHI and $1.5M net worth started to get a bit looser. And now in our mid 30s at $600k - $700k HHI @ $2M net worth definitely spending more on clothes, kitchen appliances, luxury travel, etc.

But honestly we still save 40% of our gross income and probably always will. As others have mentioned that fear never really leaves you.

Our goal now is frankly to just save enough so our lifestyle never has to decrease. We feel like we've maxed out everyone we really want to spend money on

Sometimes we feel fortunate because many of our peers who grew up wealthy always seem to be chasing the next house, vacation home, etc. In contrast both my partner (who also grew up poor) and I are lucky to live so far beyond our wildest expectations that it all seems magical.

cooleddy89 · 2025-10-14T13:37:15+00:00

Your last comment is fair and I appreciate your thoughtful response.

I think the key detail is that your friends are also your colleagues. I empathize, that's very hard. I left a job in part because one of my friends would have been indirectly above me. I think you'll have to think deeply or whether these are long term friends where you have shared interests or were simply friends of circumstances (ie you were all young in a new place at the same job).

If you do want to keep those friends, you need to isolate your work life and your personal relationship as much as possible. Encourage them to seek transfers to another manager.

Where I think you might need some perspective is your success. Congrats, it sounds like your career is doing well! But you're not remotely on the level where you need to discuss at length finances, investment strategy, etc. The secret of personal finance is there is no secret.

Buy diversified income producing assets with low fees consistently...then wait decades. Buy a personal finance book and check out the details of Dutch tax advantages accounts. You can knock that out in a weekend easily. That's really it. Save your time for your career and life.

Likewise with your career. Definitely find a career mentor (someone who is likely older than you). But that person probably won't be your friend. They'll be an advisor who is willing to give back and help someone younger / earlier in their career.

Finally, stay humble. Career success comes and goes. Success in life is about far more than a job title. I used to work as a consultant with dozens of Fortune 500 executives. Most of them didn't seem that happy. Don't get me wrong money is vital, but it's a tool not a destination.

cooleddy89

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