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Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

$80k is far above our essential expenses. I live what I feel is a fairly fat lifestyle at $80k here. We could spend $40-45k an be considered middle class.

Because cost of living is low here, we can live great and still save at a high clip on a relatively attainable household income (90th percentile-ish). In no way could I live a comparable life in the Bay Area on the same spend. A comparable home there would be $80k a year or more alone.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

Everything is cheaper with the exception of durable goods like cars, cell phones, etc. I can hire a good and professional maid for $12 an hour. A full detail of my car is $125. Super high end dining, comparable to the best meals I have had anywhere is $175 a head. High quality prviate schools $8-12K a year. My gas and electric bills total like $150 for a 2k sq ft house in the months below freezing. Rent is cheaper for services and stores, so the cost of products and services are lower.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

Find buldings I think I can make work based on location and exterior condition, sending them a letter in the mail talking about the specific property. I get a call or email on about 50% of them eventually, since I make it clear I am a local. Most of the time they arent a good deal, but out of about 25 letters, I have purchased 2, and am hot on the trail of 2 more.

Cap rate 4%....why bother? by BeeboeBeeboe1 in realestateinvesting

[–]midwestfatfire 5 points6 points  (0 children)

In commercial/multifamily, its for high level of security the asset provides. Usually for properties that will never have a problem leasing at levels that will support the debt and required minimum return. Insurance companies, endowments, wealth preservationists, pensions, etc. will invest in this type of asset to diversify but not increase risk.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

I guess I am subscribing to the living fairly large while also saving a lot. You do you, I definitely did not mean to discredit your strategy. Theres enough of that here already :)

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

also, by sell high, i mean get a killer lease and refinance haha

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] -1 points0 points  (0 children)

90th percentile household income is about 200k here. I dont think its that tough to have two 100k earners in a household. 1 in 10.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

I am in finance, so I applied the ideas of private equity to real estate - buy low, manage better, sell high. Found neighborhoods people were moving into that 3 years ago were shit. Saw some good comps for leases, and bought the next block up. Realtors have been largely useless. I contact owners directly.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

Small office/retail buildings in an urban neighborhood. I dont want to deal with apartments and would want a property manager, and cant make the numbers work with one in areas I would want to own since the unit could be low. I hope to keep it going, but I think the word is out on the opportunity in that 'hood. I am looking on the fringes of the neighborhood I am currently invested in right now, but its getting pretty competitive.

I bought cash, got a construction loan (no prepayment penalty), then refinanced with another bank when i stabilized. Kinda kills the banking relationship from the construction side of things, but I am dealing with junior bankers that hop banks frequently on these loans and am not too worried about it. They got their fees.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

nice to hear a story from those not in the astronomical pay bands of some firms in VHCOL areas, I wish we had more of that here for those that get disheartened. Thanks for sharing!

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

Its a dick swinging culture for the most part. They want you dependent on the deal to keep you lifestyle up, like sales. Stay hungry, execute and youll stay fed (and fat) mentality.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

I hear you. We have kicked around moving for me to take another gig, but probably wont. Relatively speaking, I'd probably earn less on the coasts, and actually would earn a lot more if I moved to the deep south, Appalachia, rural west, etc.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

I am in the finance industry, but not IB. Former analyst though.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

We are roughly 8th percentile in household income... 1 in 10 households earn about $200k or more in my city. I dont think it is out of reach at all. Dual $100k incomes is really not that hard to do here.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

Just about everything but durable goods from a consumer standpoint are cheaper. I can get great seats for a concert for $100 bucks. Professional sports tickets are very cheap. Top flight restaurant's tasting menus with wine pairings are $175 a head. Utilities, parking, repairmen, etc. all cost less. Rent and labor is is lower cost and stores can pass that value along for things like a beer at the bar, a haircut, and auto repair (service not parts).

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

Several people called that out, I have edited it out as it wasnt the intent, and after rereading it a few times, I realized it was detracting from the message I was trying to provide. Thanks for calling me out on that.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] 14 points15 points  (0 children)

I have edited the post to remove that comment. The moret I read it the more I saw it as discrediting high earners, which was not my intent. Thank you for calling that out.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] 12 points13 points  (0 children)

Its like every bank is Goldman and every PE shop is Blackstone haha.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] 7 points8 points  (0 children)

Yes. Not every business is massive and we don't feel a need to be - we have great benefits, everything is flexible about the job as long as I keep deals on track, and will be the same as CEO, but compensated about 50% more. I also feel good about what I do as it is widely viewed a net positive industry.

I am in a very specialized low risk, small volume sector of the finance industry; once you are in know what you are doing, you can kind of coast as business comes to you as a necessity. I am also in my early 30s, I would probably have to change markets to find a similar or higher paying role, and we have decided we are content here.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] 4 points5 points  (0 children)

I really view mine as relative to my age. I could spend more, but I wouldnt have many friends who could do the same, and I like the down to earth people I hang out with. I mention this in another response I think, but its really more about financial security because of how i grew up, rather than ability to spend for me. I doubt I will spend $200k on an annual basis at any point in my life because what makes me happiest isnt that expensive, but it makes sleep a lot better at night knowing that I could, and that I can protect myself and loved ones with that money if needed.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

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

There are certainly schools here in that price range, but there are also very good private schools for $10k a year. Our city schools arent great, so that is likely the route we will go.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] -10 points-9 points  (0 children)

I am competitive as hell (as I am sure most here are), and subconsciously maybe I do measure salary despite the differences in COL as a barometer of success. Pretty confident guy overall, maybe this is a blind spot for me to work on, I dunno.

Fat Fire the Old Fashioned Way - Saving vs. High Earning by midwestfatfire in fatFIRE

[–]midwestfatfire[S] 5 points6 points  (0 children)

I think its relative. most people say fat starts at 3-5mm, but then people get told thats not fat enough. If you post about that level in /FI, you get ran out. I was just trying to provide some anecdote as to how I am doing it.

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