Author Topic: How to invest in my current situation/pursuit of Financial independence *lite  (Read 3263 times)

zoochadookdook

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Hey all-so let me prefix this by saying I don't need much to live on. I drive a beater. A lot of my happiness comes from pursuing learning/hobbies/self-interests. I have no idea where I want to live/do in my future relationships/careers/what life goals I have-but a lot of my inability to consider those things seems to stem from financial worry.

I'm pursuing FIRE not to quit my job-but to continuing working-just on my own terms. I want to be able to explore business ventures/life choices and this baseline income per year would allow for this.

An issue I have is how to allocate funds with limited/no tax-advantaged accounts available. Also if in theory, I would be able to put 80/90% of my take home aside that would set me up in 4 years or so for FI/which limits the investment accounts.

Age: 27 as of may

Current income:
2800/month take home temporary/hourly 45hours a week with mandatory unpaid 1hour lunch. May have advancement to full-time salary/better benefits and pay in 3 months with ability to work from home 1 day/week.
1000-3000/Month take home working myself ragged on a side hustle. This ebbs and flows depending on how much I neglect my personal life (lol). I can comfortably expect min. 2k/month baseline+ if I don't have another job.

My expenses:
Base living with everything (mortgage, taxes, gas, food, 100 bucks exta, transport) $1500
Mortgage: 116k 30 year 4.25% fixed refi'd last month (although 3500 is in a escrow so seeing if i can wave that-no point paying it upfront)
House is valued at 180k mrsp

My current finances:
$61,200 cash, $18,300 business inventory (sold by end of month-I don't normally float over 10k), $27,000 roth ira (vanguard 2060 3k left to go for 2019), $5400 in vtsax taxable/random stocks.

Debt:
CC $1200 (on autopay)
Student Loans $13,200* Breakdown on these are 5500/3.76% 5500/4.45% 2292/5.05%. Total is 4.27% or 4.11% if the 5.05 is paid off.
I was between paying these off once interest starts next month or paying off the 5.05 and the 4.45 to get it to a lower amount/invest it.
Father private loan: $15,000. I just refinanced and this was part of the house loan originally. Strictly between us. No apr. Would like to pay back asap.

This leaves me $55,575 liquid (possibly $58,575 if i retract the escrow).
27000 in the roth ira.
Total:$85,575 after all debts paid off.

Assuming my measly 2800 base take home which is more than adaquete for me to live off alone-supplemented by my variable 1000-3000 part time income-worst case scenario is I'm saving $2500 a month towards FIRE/2800 is near 90%. I require none of the the extra income to live, it's really just in pursuit of this.

My question is fairly simple:

1) What to invest in? Assuming I would want to pull around 12k/year while in pursuit of other businesses/jobs. I know roths/401s have issues with age limitations and taxes pulling early so am I better off just lumping it into VTSAX and International/10% bonds and hoping for the best? I am not currently offered a 401k/tax-advantaged plan through employment. I am self-employed on the side so that may be an option. Obviously, the idea that I would be using this as part of living expenses to ensure baseline stability while offering flexibility to life choices/career/etc is the idea. It's not true FIRE by any means-more like partial FI

Any insight is appreciated!






SimpleLifer

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My current finances:
$61,200 cash, $18,300 business inventory (sold by end of month-I don't normally float over 10k), $27,000 roth ira (vanguard 2060 3k left to go for 2019), $5400 in vtsax taxable/random stocks.

Debt:
CC $1200 (on autopay)
Student Loans $13,200* Breakdown on these are 5500/3.76% 5500/4.45% 2292/5.05%. Total is 4.27% or 4.11% if the 5.05 is paid off.
I was between paying these off once interest starts next month or paying off the 5.05 and the 4.45 to get it to a lower amount/invest it.
Father private loan: $15,000. I just refinanced and this was part of the house loan originally. Strictly between us. No apr. Would like to pay back asap.

This leaves me $55,575 liquid (possibly $58,575 if i retract the escrow).
27000 in the roth ira.
Total:$85,575 after all debts paid off.


My question is fairly simple:

1) What to invest in? Assuming I would want to pull around 12k/year while in pursuit of other businesses/jobs. I know roths/401s have issues with age limitations and taxes pulling early so am I better off just lumping it into VTSAX and International/10% bonds and hoping for the best? I am not currently offered a 401k/tax-advantaged plan through employment. I am self-employed on the side so that may be an option. Obviously, the idea that I would be using this as part of living expenses to ensure baseline stability while offering flexibility to life choices/career/etc is the idea. It's not true FIRE by any means-more like partial FI

Any insight is appreciated!

Invest in your debt first.  Payoff all loans.  *Including (and especially) your father.

You're on the road to FIRE.  Great job so far! 

appleshampooid

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I am not currently offered a 401k/tax-advantaged plan through employment. I am self-employed on the side so that may be an option.
With self employment income, you are eligible to open a SEP IRA or Individual 401(k). I believe the Individual 401(k) is a better deal in terms of contribution limits (someone else please check my assumptions here). When I was briefly self employed, I opened an Individual 401(k) with Vanguard.

While there are age limits on withdrawing from these accounts, there are also many workarounds (see the pinned thread in this forum - "How to withdraw funds from your IRA and 401k without penalty before age 59.5."


zoochadookdook

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My current finances:
$61,200 cash, $18,300 business inventory (sold by end of month-I don't normally float over 10k), $27,000 roth ira (vanguard 2060 3k left to go for 2019), $5400 in vtsax taxable/random stocks.

Debt:
CC $1200 (on autopay)
Student Loans $13,200* Breakdown on these are 5500/3.76% 5500/4.45% 2292/5.05%. Total is 4.27% or 4.11% if the 5.05 is paid off.
I was between paying these off once interest starts next month or paying off the 5.05 and the 4.45 to get it to a lower amount/invest it.
Father private loan: $15,000. I just refinanced and this was part of the house loan originally. Strictly between us. No apr. Would like to pay back asap.

This leaves me $55,575 liquid (possibly $58,575 if i retract the escrow).
27000 in the roth ira.
Total:$85,575 after all debts paid off.


My question is fairly simple:

1) What to invest in? Assuming I would want to pull around 12k/year while in pursuit of other businesses/jobs. I know roths/401s have issues with age limitations and taxes pulling early so am I better off just lumping it into VTSAX and International/10% bonds and hoping for the best? I am not currently offered a 401k/tax-advantaged plan through employment. I am self-employed on the side so that may be an option. Obviously, the idea that I would be using this as part of living expenses to ensure baseline stability while offering flexibility to life choices/career/etc is the idea. It's not true FIRE by any means-more like partial FI

Any insight is appreciated!

Invest in your debt first.  Payoff all loans.  *Including (and especially) your father.

You're on the road to FIRE.  Great job so far!

Fathers loans will be transferred tomorrow/paid off.

Student loans I'm just waiting on my credit cards to get here (have the cash to pay them back but will be putting 9000 on visa vanilla cards to get $1100 cash back to knock that off them). Should have it paid by end of this month.

zoochadookdook

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I am not currently offered a 401k/tax-advantaged plan through employment. I am self-employed on the side so that may be an option.
With self employment income, you are eligible to open a SEP IRA or Individual 401(k). I believe the Individual 401(k) is a better deal in terms of contribution limits (someone else please check my assumptions here). When I was briefly self employed, I opened an Individual 401(k) with Vanguard.

While there are age limits on withdrawing from these accounts, there are also many workarounds (see the pinned thread in this forum - "How to withdraw funds from your IRA and 401k without penalty before age 59.5."

I've been looking at these options and was wondering how it works as far as AGI vs actual gross. For instance the last 3-4 years I've made mid 30k but my agi is at max 15k. Does that limit my self employed contribution to 15k or the 30k number?

Watchmaker

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I am not currently offered a 401k/tax-advantaged plan through employment. I am self-employed on the side so that may be an option.
With self employment income, you are eligible to open a SEP IRA or Individual 401(k). I believe the Individual 401(k) is a better deal in terms of contribution limits (someone else please check my assumptions here). When I was briefly self employed, I opened an Individual 401(k) with Vanguard.

While there are age limits on withdrawing from these accounts, there are also many workarounds (see the pinned thread in this forum - "How to withdraw funds from your IRA and 401k without penalty before age 59.5."

I've been looking at these options and was wondering how it works as far as AGI vs actual gross. For instance the last 3-4 years I've made mid 30k but my agi is at max 15k. Does that limit my self employed contribution to 15k or the 30k number?

The contribution limits for an individual 401k are based on your self employed income, not your AGI. You can defer up to 19k in "employee contributions", but not more than your actual self employment income. You can also make "employer contributions" to that 401k, up to 20% of net self employed income.

zoochadookdook

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So let's say 2018 I made 40k net self employed.
After write offs my taxable AGI on just that income is 15k.

I can contribute 19000/another 8000 of net for a total of 27000 for an individual?

Or let's say I make 19k self employed on the side, AGI of 0.

I can still contribute the full 100% prior to write offs?

ChpBstrd

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You’re 27, earn about $34k/year, have a NW around $50k, want to be FI ASAP, and envision a future state that involves continuous learning, projects, and perhaps entrepreneurship.

My recommendation is to immediately invest in additional training. Drop the side gig or change the main job to free up time if needed. As a resident of a LCOL area you could probably pay your way through night classes and get a computer science degree, an MBA, a professional certification, or training for one of the $50k/year jobs MMM highlighted in one of his posts.

Suppose you pay $30-80k in cash and come out with training that doubles your income (a CS degree might triple it). This is what I did when I earned my MBA debt-free by taking night classes at the state U. I just wish I had done it 5 years earlier.

What other investment or tax-avoidance strategy pays a 50-100% ROI per year for your entire working life? Yes, set up a 401k to keep yourself in the 12% tax bracket and invest in VTI, but understand that these tactics are small potatoes compared to doubling your pay rate ASAP. When your NW hits around $250k taxes and asset allocation matters a lot more.

The other reason this makes sense is because you indicated you want to do cool stuff after you are FI. You’ll probably need skills to do those cool things, whether that means a tech startup, volunteer work, advocacy, R&D, etc. Why wait until the future to learn the skills you’ll use then, when you could pick up those skills now and get paid tons more money in the meantime (while making the meantime to FI waaaay shorter)?

Watchmaker

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So let's say 2018 I made 40k net self employed.
After write offs my taxable AGI on just that income is 15k.

I can contribute 19000/another 8000 of net for a total of 27000 for an individual?

Pretty much. A few details-- for 2018 the limit was 18.5k; for 2019 it is 19k. And the calculation is a little more complicated than what you've show. Take a look at this link for an explanation and calculator:
https://obliviousinvestor.com/solo-401k-contribution-calculator/

zoochadookdook

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You’re 27, earn about $34k/year, have a NW around $50k, want to be FI ASAP, and envision a future state that involves continuous learning, projects, and perhaps entrepreneurship.

My recommendation is to immediately invest in additional training. Drop the side gig or change the main job to free up time if needed. As a resident of a LCOL area you could probably pay your way through night classes and get a computer science degree, an MBA, a professional certification, or training for one of the $50k/year jobs MMM highlighted in one of his posts.

Suppose you pay $30-80k in cash and come out with training that doubles your income (a CS degree might triple it). This is what I did when I earned my MBA debt-free by taking night classes at the state U. I just wish I had done it 5 years earlier.

What other investment or tax-avoidance strategy pays a 50-100% ROI per year for your entire working life? Yes, set up a 401k to keep yourself in the 12% tax bracket and invest in VTI, but understand that these tactics are small potatoes compared to doubling your pay rate ASAP. When your NW hits around $250k taxes and asset allocation matters a lot more.

The other reason this makes sense is because you indicated you want to do cool stuff after you are FI. You’ll probably need skills to do those cool things, whether that means a tech startup, volunteer work, advocacy, R&D, etc. Why wait until the future to learn the skills you’ll use then, when you could pick up those skills now and get paid tons more money in the meantime (while making the meantime to FI waaaay shorter)?

I graduated with a degree in MIS in december. Haven't pursued to many SQL based jobs as I was considering something that would lend itself towards skill basis that would always alot for side jobs (i.e electricians union). I may inquire about a comp sci degree-programming outside of SQL was never my cup of tea but you make a compelling argument on the self investment. I've been at this job 3 months though and the 22/hr baseline is just starting; they would reassess me around mid 50s with benifits in the next 3 months -but then again I'm really interested in finding something I actually want to pursue. I'll have to peep the list you mentioned. To be fair if I can make 3000/month off 10 hours vs 2800 45hour weeks; I know which one i'd be dropping.

ChpBstrd

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You’re 27, earn about $34k/year, have a NW around $50k, want to be FI ASAP, and envision a future state that involves continuous learning, projects, and perhaps entrepreneurship.

My recommendation is to immediately invest in additional training. Drop the side gig or change the main job to free up time if needed. As a resident of a LCOL area you could probably pay your way through night classes and get a computer science degree, an MBA, a professional certification, or training for one of the $50k/year jobs MMM highlighted in one of his posts.

Suppose you pay $30-80k in cash and come out with training that doubles your income (a CS degree might triple it). This is what I did when I earned my MBA debt-free by taking night classes at the state U. I just wish I had done it 5 years earlier.

What other investment or tax-avoidance strategy pays a 50-100% ROI per year for your entire working life? Yes, set up a 401k to keep yourself in the 12% tax bracket and invest in VTI, but understand that these tactics are small potatoes compared to doubling your pay rate ASAP. When your NW hits around $250k taxes and asset allocation matters a lot more.

The other reason this makes sense is because you indicated you want to do cool stuff after you are FI. You’ll probably need skills to do those cool things, whether that means a tech startup, volunteer work, advocacy, R&D, etc. Why wait until the future to learn the skills you’ll use then, when you could pick up those skills now and get paid tons more money in the meantime (while making the meantime to FI waaaay shorter)?

I graduated with a degree in MIS in december. Haven't pursued to many SQL based jobs as I was considering something that would lend itself towards skill basis that would always alot for side jobs (i.e electricians union). I may inquire about a comp sci degree-programming outside of SQL was never my cup of tea but you make a compelling argument on the self investment. I've been at this job 3 months though and the 22/hr baseline is just starting; they would reassess me around mid 50s with benifits in the next 3 months -but then again I'm really interested in finding something I actually want to pursue. I'll have to peep the list you mentioned. To be fair if I can make 3000/month off 10 hours vs 2800 45hour weeks; I know which one i'd be dropping.

One the one hand don't go a direction you know you'll hate, but on the other hand keep in mind all work becomes tedious, boring, and mind-numbing after a while.

The Salesforce Architect at my company earns about 90k in a LCOL area - could probably pull 150k in a HCOL area. He has a similar degree, knows SQL, and took a bunch of online classes about how to operate the Salesforce GUI to build business apps. I doubt he knows anything about FIRE, but with that kind of income I could be saving 55k a year instead of 25k and had I gone his direction 5 years ago I would have retired already instead of having 5 years to go!

zoochadookdook

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You’re 27, earn about $34k/year, have a NW around $50k, want to be FI ASAP, and envision a future state that involves continuous learning, projects, and perhaps entrepreneurship.

My recommendation is to immediately invest in additional training. Drop the side gig or change the main job to free up time if needed. As a resident of a LCOL area you could probably pay your way through night classes and get a computer science degree, an MBA, a professional certification, or training for one of the $50k/year jobs MMM highlighted in one of his posts.

Suppose you pay $30-80k in cash and come out with training that doubles your income (a CS degree might triple it). This is what I did when I earned my MBA debt-free by taking night classes at the state U. I just wish I had done it 5 years earlier.

What other investment or tax-avoidance strategy pays a 50-100% ROI per year for your entire working life? Yes, set up a 401k to keep yourself in the 12% tax bracket and invest in VTI, but understand that these tactics are small potatoes compared to doubling your pay rate ASAP. When your NW hits around $250k taxes and asset allocation matters a lot more.

The other reason this makes sense is because you indicated you want to do cool stuff after you are FI. You’ll probably need skills to do those cool things, whether that means a tech startup, volunteer work, advocacy, R&D, etc. Why wait until the future to learn the skills you’ll use then, when you could pick up those skills now and get paid tons more money in the meantime (while making the meantime to FI waaaay shorter)?

I graduated with a degree in MIS in december. Haven't pursued to many SQL based jobs as I was considering something that would lend itself towards skill basis that would always alot for side jobs (i.e electricians union). I may inquire about a comp sci degree-programming outside of SQL was never my cup of tea but you make a compelling argument on the self investment. I've been at this job 3 months though and the 22/hr baseline is just starting; they would reassess me around mid 50s with benifits in the next 3 months -but then again I'm really interested in finding something I actually want to pursue. I'll have to peep the list you mentioned. To be fair if I can make 3000/month off 10 hours vs 2800 45hour weeks; I know which one i'd be dropping.

One the one hand don't go a direction you know you'll hate, but on the other hand keep in mind all work becomes tedious, boring, and mind-numbing after a while.

The Salesforce Architect at my company earns about 90k in a LCOL area - could probably pull 150k in a HCOL area. He has a similar degree, knows SQL, and took a bunch of online classes about how to operate the Salesforce GUI to build business apps. I doubt he knows anything about FIRE, but with that kind of income I could be saving 55k a year instead of 25k and had I gone his direction 5 years ago I would have retired already instead of having 5 years to go!

That's insane; I actually work in salesforce a bit now (not the backend just functionality editing and stuff), but I always thought being some sort of developer would be great in terms of "get the project down by x date but work whenever as long as it's done" vs come in 8-5 and do the project until it's done.

I'll have to start putting applications in or messing about with some sort of online class modules. I really feel stuck in the mud career wise. I don't mind work being work, but having a career that allows for a slightly flexy work life balance is a priority of mine. I'd gladly take less pay for more time to pursue other things. Obviously the goal is to have both.

ChpBstrd

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  • Location: A poor and backward Southern state known as minimum wage country
You’re 27, earn about $34k/year, have a NW around $50k, want to be FI ASAP, and envision a future state that involves continuous learning, projects, and perhaps entrepreneurship.

My recommendation is to immediately invest in additional training. Drop the side gig or change the main job to free up time if needed. As a resident of a LCOL area you could probably pay your way through night classes and get a computer science degree, an MBA, a professional certification, or training for one of the $50k/year jobs MMM highlighted in one of his posts.

Suppose you pay $30-80k in cash and come out with training that doubles your income (a CS degree might triple it). This is what I did when I earned my MBA debt-free by taking night classes at the state U. I just wish I had done it 5 years earlier.

What other investment or tax-avoidance strategy pays a 50-100% ROI per year for your entire working life? Yes, set up a 401k to keep yourself in the 12% tax bracket and invest in VTI, but understand that these tactics are small potatoes compared to doubling your pay rate ASAP. When your NW hits around $250k taxes and asset allocation matters a lot more.

The other reason this makes sense is because you indicated you want to do cool stuff after you are FI. You’ll probably need skills to do those cool things, whether that means a tech startup, volunteer work, advocacy, R&D, etc. Why wait until the future to learn the skills you’ll use then, when you could pick up those skills now and get paid tons more money in the meantime (while making the meantime to FI waaaay shorter)?

I graduated with a degree in MIS in december. Haven't pursued to many SQL based jobs as I was considering something that would lend itself towards skill basis that would always alot for side jobs (i.e electricians union). I may inquire about a comp sci degree-programming outside of SQL was never my cup of tea but you make a compelling argument on the self investment. I've been at this job 3 months though and the 22/hr baseline is just starting; they would reassess me around mid 50s with benifits in the next 3 months -but then again I'm really interested in finding something I actually want to pursue. I'll have to peep the list you mentioned. To be fair if I can make 3000/month off 10 hours vs 2800 45hour weeks; I know which one i'd be dropping.

One the one hand don't go a direction you know you'll hate, but on the other hand keep in mind all work becomes tedious, boring, and mind-numbing after a while.

The Salesforce Architect at my company earns about 90k in a LCOL area - could probably pull 150k in a HCOL area. He has a similar degree, knows SQL, and took a bunch of online classes about how to operate the Salesforce GUI to build business apps. I doubt he knows anything about FIRE, but with that kind of income I could be saving 55k a year instead of 25k and had I gone his direction 5 years ago I would have retired already instead of having 5 years to go!

That's insane; I actually work in salesforce a bit now (not the backend just functionality editing and stuff), but I always thought being some sort of developer would be great in terms of "get the project down by x date but work whenever as long as it's done" vs come in 8-5 and do the project until it's done.

I'll have to start putting applications in or messing about with some sort of online class modules. I really feel stuck in the mud career wise. I don't mind work being work, but having a career that allows for a slightly flexy work life balance is a priority of mine. I'd gladly take less pay for more time to pursue other things. Obviously the goal is to have both.

MMM is an interesting case study. Worked his arse off as a software developer and had high earnings, but dropped those activities like a bad habit once he was FI, which kinda proves he never liked software development. But it’s also true that he would probably have never become FI in his 30’s as a construction worker (work he enjoys). FIRE might have taken another 7-10 years had he gone that direction.

Your dilemma is similar- do the work you currently prefer or take the fastest route to FI? You can only pick one.

As a 40y/o geezer who is financially dependent upon employment, I am intrigued by MMM’s path and utterly disillusioned with the popular advice to “do what you love”. Such “dream” jobs still take 45 hours a week from your life, prevent the accomplishment of other objectives, involve dealing with difficult people, and ultimately train one to dislike a productive activity that one used to enjoy.

YMMV, as we often hear from others on this forum that their careers are meaningful to them. Choose who you are.

zoochadookdook

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You’re 27, earn about $34k/year, have a NW around $50k, want to be FI ASAP, and envision a future state that involves continuous learning, projects, and perhaps entrepreneurship.

My recommendation is to immediately invest in additional training. Drop the side gig or change the main job to free up time if needed. As a resident of a LCOL area you could probably pay your way through night classes and get a computer science degree, an MBA, a professional certification, or training for one of the $50k/year jobs MMM highlighted in one of his posts.

Suppose you pay $30-80k in cash and come out with training that doubles your income (a CS degree might triple it). This is what I did when I earned my MBA debt-free by taking night classes at the state U. I just wish I had done it 5 years earlier.

What other investment or tax-avoidance strategy pays a 50-100% ROI per year for your entire working life? Yes, set up a 401k to keep yourself in the 12% tax bracket and invest in VTI, but understand that these tactics are small potatoes compared to doubling your pay rate ASAP. When your NW hits around $250k taxes and asset allocation matters a lot more.

The other reason this makes sense is because you indicated you want to do cool stuff after you are FI. You’ll probably need skills to do those cool things, whether that means a tech startup, volunteer work, advocacy, R&D, etc. Why wait until the future to learn the skills you’ll use then, when you could pick up those skills now and get paid tons more money in the meantime (while making the meantime to FI waaaay shorter)?

I graduated with a degree in MIS in december. Haven't pursued to many SQL based jobs as I was considering something that would lend itself towards skill basis that would always alot for side jobs (i.e electricians union). I may inquire about a comp sci degree-programming outside of SQL was never my cup of tea but you make a compelling argument on the self investment. I've been at this job 3 months though and the 22/hr baseline is just starting; they would reassess me around mid 50s with benifits in the next 3 months -but then again I'm really interested in finding something I actually want to pursue. I'll have to peep the list you mentioned. To be fair if I can make 3000/month off 10 hours vs 2800 45hour weeks; I know which one i'd be dropping.

One the one hand don't go a direction you know you'll hate, but on the other hand keep in mind all work becomes tedious, boring, and mind-numbing after a while.

The Salesforce Architect at my company earns about 90k in a LCOL area - could probably pull 150k in a HCOL area. He has a similar degree, knows SQL, and took a bunch of online classes about how to operate the Salesforce GUI to build business apps. I doubt he knows anything about FIRE, but with that kind of income I could be saving 55k a year instead of 25k and had I gone his direction 5 years ago I would have retired already instead of having 5 years to go!

That's insane; I actually work in salesforce a bit now (not the backend just functionality editing and stuff), but I always thought being some sort of developer would be great in terms of "get the project down by x date but work whenever as long as it's done" vs come in 8-5 and do the project until it's done.

I'll have to start putting applications in or messing about with some sort of online class modules. I really feel stuck in the mud career wise. I don't mind work being work, but having a career that allows for a slightly flexy work life balance is a priority of mine. I'd gladly take less pay for more time to pursue other things. Obviously the goal is to have both.

MMM is an interesting case study. Worked his arse off as a software developer and had high earnings, but dropped those activities like a bad habit once he was FI, which kinda proves he never liked software development. But it’s also true that he would probably have never become FI in his 30’s as a construction worker (work he enjoys). FIRE might have taken another 7-10 years had he gone that direction.

Your dilemma is similar- do the work you currently prefer or take the fastest route to FI? You can only pick one.

As a 40y/o geezer who is financially dependent upon employment, I am intrigued by MMM’s path and utterly disillusioned with the popular advice to “do what you love”. Such “dream” jobs still take 45 hours a week from your life, prevent the accomplishment of other objectives, involve dealing with difficult people, and ultimately train one to dislike a productive activity that one used to enjoy.

YMMV, as we often hear from others on this forum that their careers are meaningful to them. Choose who you are.

I believe there is a in between-especially if you can engage in self employment (widely broadens your other employment options).

Like it's possible to make less through a more valuable (intrinsically/time based etc) career and still pursue FIRE-or at least FI lite. It just requires making a change in living expenses/expectations. I guess that's where I fall.

zoochadookdook

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Just FYI, my son is a CS major (rising senior) and he and all his classmates have internships this summer paying $40/hr + in Seattle and SFO -- some are getting housing stipends on top of that.  Yes, Seattle is expensive but if you are willing to share housing you can save a TON of money on a tech salary (son and 2 friends will be sharing a nice 3br for around $900/month each all in starting in September).  If he doesn't go to grad school next year his first real job will likely pay around $150k if he stays here.

I would seriously look into relocating and getting a fresh start, not just for salary reasons....

WOW is it expensive. Out of state tuition as well would wreck me. I don't mind moving in the future for a career but I can rent out a room and save 600/month off my baseline living as is while in school tuition here. 40 an hour intern sounds great though

appleshampooid

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Just FYI, my son is a CS major (rising senior) and he and all his classmates have internships this summer paying $40/hr + in Seattle and SFO -- some are getting housing stipends on top of that.  Yes, Seattle is expensive but if you are willing to share housing you can save a TON of money on a tech salary (son and 2 friends will be sharing a nice 3br for around $900/month each all in starting in September).  If he doesn't go to grad school next year his first real job will likely pay around $150k if he stays here.

I would seriously look into relocating and getting a fresh start, not just for salary reasons....
Damn that's tight. I graduated with my CS degree in 2006. My two internships paid $17.76/hour (in Boise, ID) and then $22/hour (in Seattle). My first job was $80k salary plus RSUs that ended up putting well over $100k yearly, but $150k start definitely shows how the field is growing. Hopefully not a bubble...for the sake of your son AND myself. My current salary is $142k but I also get a 10% bonus and stock that is good for another $40-60k/year.

ChpBstrd

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I think the point is that frugality and index investing are required to FIRE, but for people just starting out who want to become FI quickly, the real gains are to be had by doing things to increase income.

So yes, one must not go broke and one must save as much as possible in one’s 20s and 30s, but in the big scheme this doesn’t move the needle as much as working the next 8-10 years at $90k instead of $30k. The big gains are to be had in one’s career.

Frugality and investing increase in monetary importance as assets rise and FIRE becomes closer. I.e if you overspend your assets you can’t retire or if you put it all in short term bank CDs you can’t retire. To retire in your early 40s or sooner requires (1) frugality, (2) investing, and (3) a fat income. If any one leg of the stool is missing, it’s a 10-15 year delay. If 2 are missing, one will be waiting on social security to retire.

zoochadookdook

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To edit on this-

I've been offered a starting at 70k position with benefits.....across the county as of last night. Room for growth into a 6 figure job based on what i'm being told.

BicycleB

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To edit on this-

I've been offered a starting at 70k position with benefits.....across the county as of last night. Room for growth into a 6 figure job based on what i'm being told.

County or country?

zoochadookdook

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To edit on this-

I've been offered a starting at 70k position with benefits.....across the county as of last night. Room for growth into a 6 figure job based on what i'm being told.

County or country?

Haha Country***

zoochadookdook

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Anyways I've done the math.

I currently have 60k Liquid

27k in a roth ira

80k or so equity in my house.

My net take home NOW is 36k ft/job and at least 20k/side hustle

puts me at 56k.

Not bad for entry/no benifits.


My concern is bi-

1) If i move for this new career-the take home is going to be similar. I'm not sure if my local side job will scale with the new areas market.

2) How to allocate current liquid funds. Just buy all VTSAX and let it ride? Market is HIGH right now but hey-who knows?

ChpBstrd

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1) If i move for this new career-the take home is going to be similar. I'm not sure if my local side job will scale with the new areas market.

You mean the new location has a higher cost of living, and by take-home you mean your savings amount, right? In that case I’d pick the job with the best potential for growth. However, also consider your plan to upgrade your marketable skills over the next 5 years. Would the new location have good options?

Or are you saying FT job pay + side gig pay = new job pay. In that scenario I’d drop back to having one job (the new job). Easy decision.

Quote
2) How to allocate current liquid funds. Just buy all VTSAX and let it ride? Market is HIGH right now but hey-who knows?

I think 100% stocks is reasonable for someone in their 20s with <$100k in assets. The opportunity cost of letting the market run away from you is real at this age. A routine 20-40% correction will eventually be recovered from IF one has the guts to buy and hold for at least a few years, but getting left behind as stocks rise, only to have to buy in at higher prices years later, is a mistake that will delay your retirement for years.
« Last Edit: June 22, 2019, 10:10:05 PM by ChpBstrd »

BicycleB

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Like others, I think you should probably go for the brass ring (the bigger job across the country), but that's not the main question you're asking.

Re what to invest in: I too agree that 100% stock is reasonable. If that scares you, fine, put 20% in bonds (VBTLX) and 5% cash (VMMXX), 75% VTSAX. Standard JL Collins thought process linked below (common here though not required).

https://jlcollinsnh.com/2012/05/09/stocks-part-v-keeping-it-simple-considerations-and-tools/

There are well informed experts who disagree with the above and those who agree, but it's one (ok, two) of the reasonable choices. Re your age/stage, remember that as long as you continue primarily to invest, dipping into any savings only to handle rare surprise life events, a declining or even collapsing stock market is to your advantage. It's good to buy low!!

The main selling price is the average price of stock later in life, when you no longer work. That'll be higher than any current downturn. So just load up the investment truck and move on down the road, confident about your future.