Race from $2M to $4M...and Beyond!

[LightTripper]

Thank you @BeanCounter , I know that was aimed at @rmorris50 but it was also completely what I needed to hear!

[BeanCounter]

I'm currently negotiating to move onto a flexible freelance contract with my employer from 1/1/21, which feels exciting, scary and a bit underwhelming all at the same time.  Part of me wants to just cut the cord altogether, but I do worry I could get depressed if I make any too sudden transitions.  I have been at the same firm my whole career (over 20 years).  I am not a person who thrives on change.I so worry that working part time will give me all the stress of constantly watching e-mail and dealing with fall out from high maintenance colleagues, with only part of the compensation. But anyway, the idea is it's a gradual transition as a learning process: by summer next year I am hoping to figure out whether I am aiming at zero hours or whether I think I can achieve some kind of "best of both worlds" working a few hours a week while the kids are at school/nursery or in the evenings.

I'm going to encourage you to just leave. I had this same opportunity when I announced that I would be leaving my employer and I ultimately decided I needed to walk away to have real freedom. It was the right move. Because that fucking email never stops. And the cloud of responsibility just would have continued to hang over my head. I now feel like I have total freedom and it's amazing. I'm currently working on some potential consulting work on my own and it's so much better because I CALL THE SHOTS. It may not actually materialize into anything but I'm ok with that.

[BeanCounter]

But anyway, the idea is it's a gradual transition as a learning process: by summer next year I am hoping to figure out whether I am aiming at zero hours or whether I think I can achieve some kind of "best of both worlds" working a few hours a week while the kids are at school/nursery or in the evenings.

Another thought. In my "transition process", I was really hung up on this "best of both worlds idea". I'm still not sure I've totally figured out all my thoughts and feelings around it. But it has something to do with feeling like I went to school to have a career and that I should be able to be a mother and a career woman. And even though I had climbed pretty high up the proverbial ladder, leaving felt like a bit of failure in that regard. Like I had worked so hard to build a career and be a good mom, yet I couldn't hang. I was unhappy. I honestly felt like I was living a lie. I really wanted to be home.
Anyway, I had to change my thinking to acknowledge that I had already won. I had done ENOUGH. And you have too.

[lhamo]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Yeah I have one. I worked for a Fortune 500 company that fell in the toilet and all my stock options expired virtually worthless!

Stock is currently over ~$1400/share. Anything can happen of course, if 2020 has taught me nothing else. The stock would have to drop to $0 for me to have no value. But, it's a valid concern. Is there no time horizon with which you'd calculate part of the stock? We all calculate our investments in our net worth... Also, these are RSUs.

It does drop to $0 if you leave before it vests, though.   So if you are using net worth as a proxy for FIRE stash/target retirement date I personally would not include unvested stock.  Partly because clawing that number in your head back if you finally get to the point where you want to employ FU money is going to be hard.

If you really want to count it then I would think long and hard about how long you would be willing/able to continue working there if things really changed in your life/the job went sour.   What if you ended up with a really horrible boss or project?  What if a family member got a serious illness and you needed to care for them -- would the stock continue to vest if you were on unpaid leave?  What if you decided to go PT, or burn through some accrued leave in order to gain a better life balance?  How long could you drag out your departure past the point of wanting to employ FU money in order to allow more shares to vest. 

I didn't have vesting shares to consider, but both times I left bad work situations I did this kind of calculation with my accrued leave.  In the first case, using a few days of leave every 2-3 weeks was enough to let me endure a bad situation (and keep drawing a paycheck) for about 6-8 months (gave notice at 6 months and had a LOOOOONG wind-out) until I had my exit strategy worked out.  In the second case I didn't really take extra leave (too busy), but did continue to accrue it.  So I got about 2 extra weeks of pay at the end by holding on longer.  In both cases the hit to my mental health was still pretty hard -- in retrospect I would have been better off leaving sooner with less money.   

[LightTripper]

Yes, the "cloud of responsibility" is something that I really want to break free from.  I do increasingly think you're right and I just need to stop.  I'm scheduled to talk to an older colleague who went very part time about 10 years ago, when his kids were similar ages to mine, and to get his views on it (both practically and in terms of how it feels), so I'm hoping that will be useful.

At the same time there are a couple of projects for ongoing clients that I like and would like to see through to the end.  So it is tempting just to see those through (far from full time: probably a couple of weeks of part time here and there over the next year or so).  I am already pretty convinced I will say no to anything new - and maybe I will load off the ongoing stuff to other people too, but I'm going to hang on to it for the first couple of months of next year at least and just see how it goes.  It should be very little in that time frame anyway (and may be nothing!)

I do think some of this mental shift of how I see myself is a part of why I am struggling to fully let go.  And I definitely need to work through that too.  I'm lucky to have quite a few very smart women friends who have either quit or ramped down considerably, so I would have some good cheerleaders in making that transition if it's what I choose to do.

Thank you for all your thoughts ... I think these are messages I am going to return to a bit and mull over more!

[EscapeVelocity2020]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Yeah I have one. I worked for a Fortune 500 company that fell in the toilet and all my stock options expired virtually worthless!

Stock is currently over ~$1400/share. Anything can happen of course, if 2020 has taught me nothing else. The stock would have to drop to $0 for me to have no value. But, it's a valid concern. Is there no time horizon with which you'd calculate part of the stock? We all calculate our investments in our net worth... Also, these are RSUs.

It does drop to $0 if you leave before it vests, though.   So if you are using net worth as a proxy for FIRE stash/target retirement date I personally would not include unvested stock.  Partly because clawing that number in your head back if you finally get to the point where you want to employ FU money is going to be hard.

If you really want to count it then I would think long and hard about how long you would be willing/able to continue working there if things really changed in your life/the job went sour.   What if you ended up with a really horrible boss or project?  What if a family member got a serious illness and you needed to care for them -- would the stock continue to vest if you were on unpaid leave?  What if you decided to go PT, or burn through some accrued leave in order to gain a better life balance?  How long could you drag out your departure past the point of wanting to employ FU money in order to allow more shares to vest. 

I didn't have vesting shares to consider, but both times I left bad work situations I did this kind of calculation with my accrued leave.  In the first case, using a few days of leave every 2-3 weeks was enough to let me endure a bad situation (and keep drawing a paycheck) for about 6-8 months (gave notice at 6 months and had a LOOOOONG wind-out) until I had my exit strategy worked out.  In the second case I didn't really take extra leave (too busy), but did continue to accrue it.  So I got about 2 extra weeks of pay at the end by holding on longer.  In both cases the hit to my mental health was still pretty hard -- in retrospect I would have been better off leaving sooner with less money.   

Another vote for not counting it.  My company uses 'Long Term Incentives' that vest 3 years from grant, with part of the award being stock and dividends that significantly increase the LTI value even further.  Other than it being a nice 'extra', I completely ignore these awards until I get close to them being granted.  I don't think I'd quit and leave one on the table if I'm a few months out from award, but anything 4 months or further, my time is worth more than a whole lot of money at this point...

[SwordGuy]

I'm sending in the final payment on our mortgage tomorrow when the funds become available in our account.

It's done.    Now we just have to figure out where we want to direct our $1,000 a month charity money that we're starting in January.

[MaybeBabyMustache]

@EscapeVelocity2020 - thanks, that's useful. I'm thinking of a hybrid approach where I include anything that will be sold within the next 3 months. Tangible & I'd be well aware of any changes to my personal employment plans, but also useful on the pricing side. I was also thinking of using 80% of the stock's current value, to account for fluctuations in stock price.

[honeyfill]

All this talk about vesting stock options and RSUs got me thinking about NUA's.  If you get company stock in your 401k, you can pull it out and pay income tax on the basis and pay capital gains on the Net Unrealized Appreciation(NUA). In my case , I have a significant chunk of a former company stock in an old 401k.  I am retiring this year and would be paying 24% on the basis if I take it out before January. But if I take it out after January , it would put me over the MAGI limit for ACA subsidies.
 However, I just found out that you can pick and choose the shares you take out and pay the taxes on.  The rest you can roll over into an IRA.

https://www.kitces.com/blog/net-unrealized-appreciation-irs-rules-nua-from-401k-and-esop-plans

This is especially useful if you have some older stock with a very low basis vs some recent purchases with a very high basis.
So after the first of the year I plan to my only enough of my older shares to keep me below the ACA subsidy limit, while moving  the majority of company stock to a capital gains tax instead of an income tax.

TL/DR:  If you are doing a NUA out of a 401k, you have flexibility to take out the lowest basis shares and leave the high basis shares in a IRA. This is a great way to maneuver your Income tax brackets and your ACA MAGI.

[Taran Wanderer]

I just wanted to say thank you to @rmorris50 for opening up about your situation and to @BeanCounter for the thoughtful responses. I have been at rmorris’s situation off-and-on for a couple of years, though not quite there financially. I love BeanCounter’s response. For me, the quarantine and work from home couldn’t have come at a better time.  I have really enjoyed the flexibility, and while being a bit removed from work has left me feeling out of the game at times, it also has given me the freedom to step back, think about things, and guide my team rather than solve problems myself.  It’s a lot of fun to help develop others, and really gratifying to see them perform.

On the home front, being physically at home has allowed me to be more mentally at home. Home is now first, and work is something I do around the demands of home rather than the opposite.  This has given me the mental space, combined with time due to lack of travel, to tackle some big home projects this summer. Just last night, I logged off and headed outside to for a couple of hours of house painting before it got dark, and DW asked me why I was so happy. That hasn’t happened a whole lot in recent years.

It's funny how we get so tied up in achieving success, often without thinking of what success really means to us. That 22-year-old optimism and possibility, that desire to travel the world or climb mountains or visit every baseball stadium in the country gets forgotten, and instead we focus on our career and house and car and status, and these things are often “valued” by the people who are least important to us.

For a long time, the concept of FIRE meant (to me) the ability to walk away and slam the door on those people on the way out, sort of FU money on steroids. Now that we are basically FIRE, it means freedom to engage on my own terms, the ability to put limits on the stress I take on myself, the ability to say no, the ability to elevate above the fray. It doesn’t mean I’m not involved, but it does mean that I don’t have to internalize the stress and tension of the game.  And as a plus, I still get paid... a lot!

I look at people who continue to play their life’s game at a high level well past normal retirement age. They could certainly retire, but their work, their “game”, is what they are passionate about. I’d like to figure that out.

[Car Jack]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

I'm going to answer this with an answer, then a question.

I put zero value on RSUs.  Sure, eTrade says they're worth over a hundred grand.  If I can't quit RIGHT NOW and take it as cash, it is worthless.

Now the question.  Why do you care what your net worth is?  You can't really use that towards the X spending to figure out if you're ready to stop working.  I mean...unless you plan to sell your home, how does knowing its value help you?  My investments spread sheet has a net worth box and if I update my cash savings, it would spit out a number.  It's a useless number, though.  Just be patient.  You'll get to your target "liquid investments" number.  You could come up to me on the street and ask me what I have in liquid investments and I'd be able to give you a pretty accurate number as that's the important one.  If you asked for my net worth, I'd be looking at the sky and doing math in my head to add my house and maybe cars and does that 1969 Guild Studio 302 guitar count? 

[MaybeBabyMustache]

Good question, @Car Jack . I think I'm being conservative in my FIRE amount, by not including it at all. While it's unreasonable to assign value to all of it (no plans to stay to collect it all), it also feels unreasonable to treat what's approximately 40% of our comp as non existent every month for projections. I'm mostly interested in using it to understand a reasonable exit point.

(Overall context, I am very financially conservative, and would keep all of our money in laddered CDs if comfort was my main objective.)

[EscapeVelocity2020]

@EscapeVelocity2020 - thanks, that's useful. I'm thinking of a hybrid approach where I include anything that will be sold within the next 3 months. Tangible & I'd be well aware of any changes to my personal employment plans, but also useful on the pricing side. I was also thinking of using 80% of the stock's current value, to account for fluctuations in stock price.

Doing things like using 80% of the current value is a rabbits hole, IMHO.  You can basically do this with all of your investments, but the discounting would all be guesswork.  For example, I don't look at my 401k as if I'll get 100% of that number, due to taxes at some point.  I'm not going to stay in the 0% bracket when I'm in my 60's and 70's, and even if I did, I'd have RMD's at some point...  But why bother trying to figure out how much to discount everything?

[Buffaloski Boris]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Question to clarify. If you were be let go or quit, what portion of that stock would you get to take with you and cash out?  Death is a much lower probability and let’s face it, you won’t be in a position to do anything about it anyway.

[MaybeBabyMustache]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Question to clarify. If you were be let go or quit, what portion of that stock would you get to take with you and cash out?  Death is a much lower probability and let’s face it, you won’t be in a position to do anything about it anyway.

The death part matters because it's part of our shared estate (planning for minor children), but obviously not part of my retirement strategy. :-) A minimum of 2 months worth of stock in the event I was let go or quit. Typically, it's much more generous (often 6-12 months) depending on the exact situation.

[Buffaloski Boris]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Question to clarify. If you were be let go or quit, what portion of that stock would you get to take with you and cash out?  Death is a much lower probability and let’s face it, you won’t be in a position to do anything about it anyway.

The death part matters because it's part of our shared estate (planning for minor children), but obviously not part of my retirement strategy. :-) A minimum of 2 months worth of stock in the event I was let go or quit. Typically, it's much more generous (often 6-12 months) depending on the exact situation.

So to rephrase, if you were to leave tomorrow, what you would get in the way of this stock is say 6 months worth of them, which is worth roughly half of what you get annually. which would be $75,000. Do I have it right? You get nothing else and any of this remaining unvested stock returns to the company?

If so, there’s your answer.

[Well Respected Man]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Question to clarify. If you were be let go or quit, what portion of that stock would you get to take with you and cash out?  Death is a much lower probability and let’s face it, you won’t be in a position to do anything about it anyway.

The death part matters because it's part of our shared estate (planning for minor children), but obviously not part of my retirement strategy. :-) A minimum of 2 months worth of stock in the event I was let go or quit. Typically, it's much more generous (often 6-12 months) depending on the exact situation.

I count the ones that I plan on selling, and I value them at the current stock price. I multiply the total by 0.68 to account for taxes. It's all cake icing at this point, so it's not like I would be eating cat food if I FU'ed out before selling them. I definitely don't count anything that hasn't been granted, and in fact I'm trying to think of ideas to work my boss for a bonus instead of RSUs without tipping my hand about retiring. By ignoring the ones that I will be leaving on the table, I hope I am less tempted to OMY.

If you are counting on that money to contribute towards your ability to FIRE, then yeah, you might want to multiply by a probability that you will be employed on the vesting date times a calculated valuation based on one of the formulas that you can find online, and count the 2 months' minimum severance package at the current price.

[MaybeBabyMustache]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

Question to clarify. If you were be let go or quit, what portion of that stock would you get to take with you and cash out?  Death is a much lower probability and let’s face it, you won’t be in a position to do anything about it anyway.

The death part matters because it's part of our shared estate (planning for minor children), but obviously not part of my retirement strategy. :-) A minimum of 2 months worth of stock in the event I was let go or quit. Typically, it's much more generous (often 6-12 months) depending on the exact situation.

So to rephrase, if you were to leave tomorrow, what you would get in the way of this stock is say 6 months worth of them, which is worth roughly half of what you get annually. which would be $75,000. Do I have it right? You get nothing else and any of this remaining unvested stock returns to the company?

If so, there’s your answer.

Correct, although doubling that for a net worth estimate for us as a family (my husband & I are employed at the same company, and have similar stock). This has been a helpful thought exercise.

[rmorris50]

Question for all of you thoughtful individuals... would you count any of this stock in your net worth calculation?

Backstory: husband & I each work for the same Fortune 100 company. We have stock as a part of our compensation. My stock vests at the end of each month, and auto sells. I have no plans to currently leave the company within the next year. My husband's stock vests similarly, but upon vesting, he can hold or sell. He has no plans to leave at all, and in fact, would like to keep working (not necessarily at current employer) indefinitely. I have ~$600k in unvested stock, and will be getting likely another $150k or so this year. He has a similar amount.

I've thought of adding a year's worth of that stock value into our net worth, to give us a better projection into the future. But, it's not keeping me up at night. I currently don't include any unvested stock in our net worth calculations. Oh, and it all auto vests immediately should either of us die while employed at the company.  (This came up as a discussion, as we were calculating our assets for paperwork to update our wills.)

Thoughts?

I'm going to answer this with an answer, then a question.

I put zero value on RSUs.  Sure, eTrade says they're worth over a hundred grand.  If I can't quit RIGHT NOW and take it as cash, it is worthless.

Now the question.  Why do you care what your net worth is?  You can't really use that towards the X spending to figure out if you're ready to stop working.  I mean...unless you plan to sell your home, how does knowing its value help you?  My investments spread sheet has a net worth box and if I update my cash savings, it would spit out a number.  It's a useless number, though.  Just be patient.  You'll get to your target "liquid investments" number.  You could come up to me on the street and ask me what I have in liquid investments and I'd be able to give you a pretty accurate number as that's the important one.  If you asked for my net worth, I'd be looking at the sky and doing math in my head to add my house and maybe cars and does that 1969 Guild Studio 302 guitar count?

NW is just an easy way to communicate wealth in conversation. But to you're point, I am totally ignoring NW to determine when I can retire. I do a household cash flow analysis of all money coming in the door and out the door every year until age 90 (which means having to project investment accounts out). I also don't use withdrawal rules of thumb.

This also allows me to see figure out what an "optimal" way to access all my accounts are. One example, do I surrender a sizeable pension now (take the penalty) to live off of, and save my IRAs to use in conjunction with my social security. OR, do I defer the pension to age 70 and use it and social security as my "longevity insurance", and draw down IRAs sooner, incurring penalties along the way. I also have deferred comp payout out for 15 years between ages 55 and 70. It's like this problem I am trying to optimizing, and I haven't found quite a solution yet that I has a risk level I am comfortable with.

[honeyfill]

And just like that.....I crossed the 3 mil mark.  Doing my spread sheet this morning, hit $3,001,988.86 in investments.  I think I'll celebrate by buying snow tires for the wife's car.  (and yah.....that's my big plan for the weekend).  The old snows were purchased used on craigslist on wheels for $200.  Got 3 seasons out of them, then threw the wheels on our 11 year old Fusion my younger son's driving.  3 tires broke belts, so are done.  I have a shed full of wheels/tires, so when this stuff happens, it's simply a choice of what do I want to put on the car for the time being.

Yah, I am a cheap bastard.

You jinxed us!  I woke up this morning and checked my spread sheet. I was at $3,005,000.  Then I foolishly decided to look at the market.  I got to enjoy being over 3 million for about 5 seconds.  Oh well, I guess I am going to back to work this morning.

Fair Warning , I passed the 3 million mark again on Friday.  It is not too late to go out and buy some "Puts"
Every time a pass a milestone , it seems the market tanks!!

[pecunia]

And just like that.....I crossed the 3 mil mark.  Doing my spread sheet this morning, hit $3,001,988.86 in investments.  I think I'll celebrate by buying snow tires for the wife's car.  (and yah.....that's my big plan for the weekend).  The old snows were purchased used on craigslist on wheels for $200.  Got 3 seasons out of them, then threw the wheels on our 11 year old Fusion my younger son's driving.  3 tires broke belts, so are done.  I have a shed full of wheels/tires, so when this stuff happens, it's simply a choice of what do I want to put on the car for the time being.

Yah, I am a cheap bastard.

You jinxed us!  I woke up this morning and checked my spread sheet. I was at $3,005,000.  Then I foolishly decided to look at the market.  I got to enjoy being over 3 million for about 5 seconds.  Oh well, I guess I am going to back to work this morning.

Fair Warning , I passed the 3 million mark again on Friday.  It is not too late to go out and buy some "Puts"
Every time a pass a milestone , it seems the market tanks!!

Feels good, Then you look around and see nothing has really basically changed.   The sun still rises and there are rainy days.

[Exflyboy]

And just like that.....I crossed the 3 mil mark.  Doing my spread sheet this morning, hit $3,001,988.86 in investments.  I think I'll celebrate by buying snow tires for the wife's car.  (and yah.....that's my big plan for the weekend).  The old snows were purchased used on craigslist on wheels for $200.  Got 3 seasons out of them, then threw the wheels on our 11 year old Fusion my younger son's driving.  3 tires broke belts, so are done.  I have a shed full of wheels/tires, so when this stuff happens, it's simply a choice of what do I want to put on the car for the time being.

Yah, I am a cheap bastard.

You jinxed us!  I woke up this morning and checked my spread sheet. I was at $3,005,000.  Then I foolishly decided to look at the market.  I got to enjoy being over 3 million for about 5 seconds.  Oh well, I guess I am going to back to work this morning.

Fair Warning , I passed the 3 million mark again on Friday.  It is not too late to go out and buy some "Puts"
Every time a pass a milestone , it seems the market tanks!!

Feels good, Then you look around and see nothing has really basically changed.   The sun still rises and there are rainy days.

Exactly. I was just watching a YT video with the word "Patriot" in the title. Of course this came from a "foaming at the mouth Trumpster" who believes anything Trump is clearly patriotic and by definition anything not Trump is not!

I managed to watch 30 seconds of this drivel as the presenter dived into a tirade of how America will be like Venezuela if Biden gets elected.. and just as my blood pressure started to rise I shut it off.

Like WTAF?

Then I looked around.. I still have many more $millions than the "Patriot lady" and the Sun is poking out of the clouds on my ranchett this morning, my roof doesn't leak and the coffee is hot..:)

[soccerluvof4]

Definitely seems more and more like the markets give a crap over who wins the election and for the most part has dismissed most things. Will be curious to see how with earnings starting today how if in anyway that makes a difference . Banks have been crappy to hold so just out of curiosity want to see how they do as they could carry the Market higher since they haven't really participated. Add to that Apple's New products day and Amazon Prime sales day. In the end as you guys have been saying the sun will rise tomorrow either way.

[2sk22]

Definitely seems more and more like the markets give a crap over who wins the election and for the most part has dismissed most things. Will be curious to see how with earnings starting today how if in anyway that makes a difference . Banks have been crappy to hold so just out of curiosity want to see how they do as they could carry the Market higher since they haven't really participated. Add to that Apple's New products day and Amazon Prime sales day. In the end as you guys have been saying the sun will rise tomorrow either way.

I recently heard a great interview with Morgan Housel on the Animal Spirits podcast. I would strongly checking out his new book "The Psychology of Money", it is an easy and entertaining read.

In this article, he says:

We give presidents too much praise when the economy is good and too much criticism when it's bad.

All of them, no matter the party. Eight years isn't a long time -- four is a blip -- and checks and balances limit what one president can do. No matter who lives in the White House, business cycles come and go, the Federal Reserves flexes with unmatched power, and the 78% of the global economy that is not the United States pushes and pulls everything around. It's not that presidents don't matter in the economy and stock market. It's that so many things outside a president's control matter so much more, especially as you lengthen your time horizon.

Also checkout this blog post that summarizes much of his book.

[soccerluvof4]

Definitely seems more and more like the markets give a crap over who wins the election and for the most part has dismissed most things. Will be curious to see how with earnings starting today how if in anyway that makes a difference . Banks have been crappy to hold so just out of curiosity want to see how they do as they could carry the Market higher since they haven't really participated. Add to that Apple's New products day and Amazon Prime sales day. In the end as you guys have been saying the sun will rise tomorrow either way.

I recently heard a great interview with Morgan Housel on the Animal Spirits podcast. I would strongly checking out his new book "The Psychology of Money", it is an easy and entertaining read.

In this article, he says:

We give presidents too much praise when the economy is good and too much criticism when it's bad.

All of them, no matter the party. Eight years isn't a long time -- four is a blip -- and checks and balances limit what one president can do. No matter who lives in the White House, business cycles come and go, the Federal Reserves flexes with unmatched power, and the 78% of the global economy that is not the United States pushes and pulls everything around. It's not that presidents don't matter in the economy and stock market. It's that so many things outside a president's control matter so much more, especially as you lengthen your time horizon.

Also checkout this blog post that summarizes much of his book.

Thank you for that! I will check it out.

Unbelievable how Bank stocks have just become Dogs. Like Utilities now with all the restrictions which was much needed during the Banking crisis. Huge Blow out by JPM yesterday and 26% increase in deposits and cant catch a bid. Really need banks to help for the markets to climb higher IMHO. Glad my index funds will adjust for all that. Another reason why being a stock picker is a tough gig.   

[DavidAnnArbor]

The right president and congress could pass the kind of fiscal stimulus that the economy needs right now.

But the stock market is not the economy.

[Buffaloski Boris]

Thank you for that! I will check it out.

Unbelievable how Bank stocks have just become Dogs. Like Utilities now with all the restrictions which was much needed during the Banking crisis. Huge Blow out by JPM yesterday and 26% increase in deposits and cant catch a bid. Really need banks to help for the markets to climb higher IMHO. Glad my index funds will adjust for all that. Another reason why being a stock picker is a tough gig.

I think most banks are likely a value trap at this point. Super low interest rates aren't good for them.  FINTECH is still young, but it promises to eat a lot of the banks lunch in coming years. All sorts of cool stuff in the crypto world as well.   

[soccerluvof4]

Thank you for that! I will check it out.

Unbelievable how Bank stocks have just become Dogs. Like Utilities now with all the restrictions which was much needed during the Banking crisis. Huge Blow out by JPM yesterday and 26% increase in deposits and cant catch a bid. Really need banks to help for the markets to climb higher IMHO. Glad my index funds will adjust for all that. Another reason why being a stock picker is a tough gig.

I think most banks are likely a value trap at this point. Super low interest rates aren't good for them.  FINTECH is still young, but it promises to eat a lot of the banks lunch in coming years. All sorts of cool stuff in the crypto world as well.

I agree with you on the Banks being Value Traps. Especially The larger Banks, JPM, BAC, C, WF MS and couple others. I don't understand the crypto world at all and for that reason have stayed away from it. Being my little 1% fun account I primarily focus on start ups or turnarounds and have a couple Bios , 5G plays, Pot stocks and now nibbling on some beaten down Material stocks. Couple others. But cant make a case as I said for Big banks with all the restrictions they have become basically like utilities.

[Buffaloski Boris]

Thank you for that! I will check it out.

Unbelievable how Bank stocks have just become Dogs. Like Utilities now with all the restrictions which was much needed during the Banking crisis. Huge Blow out by JPM yesterday and 26% increase in deposits and cant catch a bid. Really need banks to help for the markets to climb higher IMHO. Glad my index funds will adjust for all that. Another reason why being a stock picker is a tough gig.

I think most banks are likely a value trap at this point. Super low interest rates aren't good for them.  FINTECH is still young, but it promises to eat a lot of the banks lunch in coming years. All sorts of cool stuff in the crypto world as well.

I agree with you on the Banks being Value Traps. Especially The larger Banks, JPM, BAC, C, WF MS and couple others. I don't understand the crypto world at all and for that reason have stayed away from it. Being my little 1% fun account I primarily focus on start ups or turnarounds and have a couple Bios , 5G plays, Pot stocks and now nibbling on some beaten down Material stocks. Couple others. But cant make a case as I said for Big banks with all the restrictions they have become basically like utilities.

The banks are less and less useful. They don't lend money when liquidity is desperately needed, are inefficient and are in effect a protected cartel.  I see FINTECH basically ending that.  If I can use my cell phone and pay my bills instantly and keep my excess cash with say a brokerage, what need do I have for a bank?  WeChat and Alipay do some ridiculously high percentage of payment transactions in China.  There is no reason why that can't happen here, other than the banks and the credit card companies not liking it.

As for crypto currency, it really has two interesting aspects that I see.  First with currencies that are not backed by central banks. Bitcoin for example, and that's been where most of the attention has been.  I'm sort of meh on that aspect, even though I made goodly amount on it a few years back.  Where I see the interesting stuff happening is with the blockchain.  Such as using the blockchain (fancy encryption and programming) for automatically executing contracts or for issuance of collateralized loans without intermediaries.  So what you have is a self-executing contract.  I put up say gold ingots (or cryptocurrency) and use that as collateral for a loan.  If I fail to make the payment, the collateral is automatically liquidated and used to pay my debtors.  No muss, no fuss. All in public view.  This stuff is very much in it's infancy but when you go to doing that to say issue mortgages, then the world gets very, very interesting.     

[soccerluvof4]

Thank you for that! I will check it out.

Unbelievable how Bank stocks have just become Dogs. Like Utilities now with all the restrictions which was much needed during the Banking crisis. Huge Blow out by JPM yesterday and 26% increase in deposits and cant catch a bid. Really need banks to help for the markets to climb higher IMHO. Glad my index funds will adjust for all that. Another reason why being a stock picker is a tough gig.

I think most banks are likely a value trap at this point. Super low interest rates aren't good for them.  FINTECH is still young, but it promises to eat a lot of the banks lunch in coming years. All sorts of cool stuff in the crypto world as well.

I agree with you on the Banks being Value Traps. Especially The larger Banks, JPM, BAC, C, WF MS and couple others. I don't understand the crypto world at all and for that reason have stayed away from it. Being my little 1% fun account I primarily focus on start ups or turnarounds and have a couple Bios , 5G plays, Pot stocks and now nibbling on some beaten down Material stocks. Couple others. But cant make a case as I said for Big banks with all the restrictions they have become basically like utilities.

The banks are less and less useful. They don't lend money when liquidity is desperately needed, are inefficient and are in effect a protected cartel.  I see FINTECH basically ending that.  If I can use my cell phone and pay my bills instantly and keep my excess cash with say a brokerage, what need do I have for a bank?  WeChat and Alipay do some ridiculously high percentage of payment transactions in China.  There is no reason why that can't happen here, other than the banks and the credit card companies not liking it.

As for crypto currency, it really has two interesting aspects that I see.  First with currencies that are not backed by central banks. Bitcoin for example, and that's been where most of the attention has been.  I'm sort of meh on that aspect, even though I made goodly amount on it a few years back.  Where I see the interesting stuff happening is with the blockchain.  Such as using the blockchain (fancy encryption and programming) for automatically executing contracts or for issuance of collateralized loans without intermediaries.  So what you have is a self-executing contract.  I put up say gold ingots (or cryptocurrency) and use that as collateral for a loan.  If I fail to make the payment, the collateral is automatically liquidated and used to pay my debtors.  No muss, no fuss. All in public view.  This stuff is very much in it's infancy but when you go to doing that to say issue mortgages, then the world gets very, very interesting.   

When you dumb it down like that it does make alot of sense. Already at a point people hardly use cash anymore and for ease personally I like paying with my venmo account so just one more but bigger step in the whole process

[Dicey]

^^ I recently pulled $1,000 in cold, hard cash form my actual bank account at my actual brick and mortar bank, simply because i like having a little US currency on hand.

[BeanCounter]

Hey guys, we are looking from some thoughts on car buying from like minded people. I don't want to post in the larger forum because, well, when you've got $3M of invested assets decisions are different. :) And I know there are some good car guys on this thread. We are NOT car people. We like nice things, but other than that it's just a way to get from place to place.
DH is wanting to finally pull the trigger on buying a new car. His 2010 Honda Accord is at $250k miles. He drives about 22k-24k miles per year. (I know, I know, it's because of silly commute but that's a long story and I've let go of it a long time ago). Because of his high mileage he knows he wants to get another Accord as it's the most comfortable and most affordable solution. So we finally went and drove a couple over the weekend. He's got it narrowed down to two choices-
 2018 Honda Accord Touring 1.5T  with just under 25,000 miles $28,700 is what they are offering
 OR-
2020 Honda Accord EXL 2.0T- $30,700 dealer "best price" this one is a model down so a few less features, but bigger engine with a little more zip and we'd likely get an extra year of miles out of it since it's brand new

He's also interested in the Accord Hybrid but they seem a bit harder to find, and with his high miles we'd have to replace the battery sooner. But we have calculated roughly that the Hybrid would likely save us $1,000 per year on gas.

Anything else we should be considering? Does it matter? I've found that this types of decisions are a little harder because there are so many options when you have money and the impact between the options matters less. Make sense?

[Dancin'Dog]

I don’t think it really matters which car he chooses at this point. But for the high mileage he drives I have a comment. I recently purchased a “CPO” which included an unlimited mileage warranty. I chose an Audi A6 3.0T & have really been enjoying the luxury and performance of it.

[Car Jack]

I wouldn't consider the hybrid because with that many miles, I assume there's a lot of highway miles.  On the highway, the hybrid is just a brick being dragged down the road.  Personally, I'd get the nicest Accord new.  With your net worth, there's no reason to be buying crap for cars.

I'm in the same net worth boat and with 4 driving people in my family, we have 6 cars.  And I'm eyeing yet another......a 74 Jeep CJ5 that's heavily modified for offroad use.  My 14 Wrangler Unlimited would go to only hot weather offroading and class 6 runs.  Either that or I'd get AC fitted to the CJ.  Now, that would be cool!  (see what I did there?)

[couponvan]

I’d go with the 2020 better engine unless he’s really a featured guy. The. I’d wait for a 2020 touring to show up in the next few weeks...Get a nicer model-he’s in the car all the time. He might as well enjoy it. At this point he doesn’t have 10 more working years left, right? So which car isn’t really that relevant,  or is the $1,000 difference over 10 years.

[Bateaux]

Get a loaded 2020 model if you want.  Screw it.  You've been frugal enough to get here and he's still working.  Reward yourselves.  It's still an affordable car, even the top of the line.

[soccerluvof4]

Get a loaded 2020 model if you want.  Screw it.  You've been frugal enough to get here and he's still working.  Reward yourselves.  It's still an affordable car, even the top of the line.

This- Better model with the perks..

[Buffaloski Boris]

 I read an article this morning about inflation on the used car market and the price being asked for a 2 year old car here seems to reflect that. So you get to pay $2000 less for a 2 year old car with mileage? If it were me, I’d scratch that off the list immediately. The risk/reward doesn’t merit it. New cars come with a warranty and often have financing incentives like zero percent financing.

Now I buy very basic cars because I just happen to like them. I’d be trying to figure out what DH really enjoys in a car. If it’s the bells and whistles, so be it. He’s spending a lot of time in the car. If he really doesn’t care about that, get the stripped model. Why pay for what you don’t use? Either way, this is a pretty modest car. In my view Mustachianism isn’t about always denying luxury. It’s about being deliberate and smart and spending on things that actually deliver joy to you.

[2sk22]

This recent discussion about cars got me thinking about where to spend money. I haven't driven to work daily since about 2000 when I got my first broadband connection in my home. I have been mostly working from home since then - I was one of the earliest telecommuters. In fact, for the last few years when I was working, I was commuting to Manhattan by public transit so my car usage is down to about 5000 miles a year. I have reached the point where I could buy a Mercedes S class without it having much of an impact on our stash. And yet, I can't summon any enthusiasm for buying a replacement for my 9 year old Prius.

In contrast, since we were spending so much time at home this year, we realized how many problems had accumulated in our home so we have decided to get them fixed all at once. I have spent the first three weeks of my retirement clearing out 20+ years of accumulated junk in my basement in preparation for this work. This has been the most satisfying thing I've done in years.

[BeanCounter]

I read an article this morning about inflation on the used car market and the price being asked for a 2 year old car here seems to reflect that. So you get to pay $2000 less for a 2 year old car with mileage? If it were me, I’d scratch that off the list immediately. The risk/reward doesn’t merit it. New cars come with a warranty and often have financing incentives like zero percent financing.

Now I buy very basic cars because I just happen to like them. I’d be trying to figure out what DH really enjoys in a car. If it’s the bells and whistles, so be it. He’s spending a lot of time in the car. If he really doesn’t care about that, get the stripped model. Why pay for what you don’t use? Either way, this is a pretty modest car. In my view Mustachianism isn’t about always denying luxury. It’s about being deliberate and smart and spending on things that actually deliver joy to you.

I've heard the same and when I bought my slightly used CRV seven years ago I think it was true. I went in to buy an off lease used CRV with about 20k miles. Paid cash and took the one that they were willing to give the best deal on- silver. In hindsight I think I only saved about $4k over buying new, but it made the first dink in the stupid preschool parking lot a lot easier to the take! :)
We've always leaned toward buying slightly used because ripping up and down the highway every day just beats them up.
In this case it's harder to compare apples to apples because the nice 2018 touring that's available has a 1.5L engine and I believe the 2020 touring only comes with a 2.0. If he were to buy a 2020 Touring with the 2.0L T engine which is basically everything he could possibly want it would be about $34k. I did not include that in the original question because he had taken it off the list since he thought it was probably more than he really needed. But since you all are such bad influences, encouraging us to spend our money, it's back on the list! :)
Buying a 2020 Accord Touring 2.0T would be $34k. Buying the used $28,700. Difference between the two is the 2.0L engine.
Or split the baby and get the 2020 Accord EXL 2.0 for $30k and give up- cooling seats, navigation and cordless phone charger. Oh and heated seats in the back for the kids. I'm not sure those extra features are really worth $4k, but not my car. I'm perfectly happy driving my old dinked up CRV.
At this point I don't care. I didn't care if he kept the old one for another year or so but now that the end of 2020 is here it seems like they have a lot of inventory left and are willing to negotiate more than they were a few months ago. So it might be a good time to buy. Plus the old Accord is running well and we could offload to CarMax easily. If we wait longer we may have to consider donating it.

[BeanCounter]

I wouldn't consider the hybrid because with that many miles, I assume there's a lot of highway miles.  On the highway, the hybrid is just a brick being dragged down the road. 

@Car Jack, thanks this is essentially what our trusty mechanic told him. He was the one that also said he felt having to replace the battery every $100k or so would be a deal breaker.

[BeanCounter]

I’d go with the 2020 better engine unless he’s really a featured guy. The. I’d wait for a 2020 touring to show up in the next few weeks...Get a nicer model-he’s in the car all the time. He might as well enjoy it. At this point he doesn’t have 10 more working years left, right? So which car isn’t really that relevant,  or is the $1,000 difference over 10 years.

I have no idea how much longer he will work. He's under a lot of daily stress and I've encouraged him to consider leaving, either retiring or getting a "smaller" job somewhere like church or something. He's already told me he's not comfortable retiring before 50 because he feels as a dad he should be working. Meh. Though it is probably a good thing until the insurance world gets a little more stable. I don't want to have to worry about what happens to the ACA every damn year.

[BeanCounter]

I don’t think it really matters which car he chooses at this point. But for the high mileage he drives I have a comment. I recently purchased a “CPO” which included an unlimited mileage warranty. I chose an Audi A6 3.0T & have really been enjoying the luxury and performance of it.

Those are nice cars and I'm glad you are enjoying driving it.
We couldn't go that direction until he retires for a couple reasons-
-We owned a Volkswagen once, fun car to drive but when you drive a lot of miles they can get expensive to fix fast and I don't think either of us want to be chasing down the dealership for warranty repairs. Because of his commute we found a great local mechanic who only works on Japanese cars and we buy only cars he approves. So far that strategy has saved us a lot of money. When we've had some things go wrong he has even told us that we need to take it to the dealer because there is a service bulletin out on it and they have to fix it for free for us. Other times on older cars he's found cheaper fixes to keep it running.

-DH works for a state University and does not feel comfortable driving a "luxury" brand car that might make people think he's making more than he is. He's also just a pretty modest guy.

[Car Jack]

-DH works for a state University and does not feel comfortable driving a "luxury" brand car that might make people think he's making more than he is. He's also just a pretty modest guy.

This can be a valid concern.  My son works as a structural engineer at a structural engineering company.  Engineers are notoriously cheap.  A woman who usually drives a Jeep Wrangler came in one day driving her boyfriend's BMW.  She spent the day batting away the comments "Wow, we're definitely paying you too much".  My son owns a Honda S2000 as a fun, weekend car.  He doesn't dare drive it to work for fear that those who control the salaries might think he doesn't need the money.  He's driving one of my cars, a 7 year old Subaru Crosstrek with 113k miles on it.  Nobody even looks at it, so he's safe from the limelight.

[Taran Wanderer]

I think it’s funny how engineers drive older cars to show they don’t make too much money, and salespeople drive fancy cars to show all their success. The salespeople I know don’t seem to worry about being seen in a brand new fancy Mercedes or BMW. I actually think they use it to justify getting their high pay. It takes money to maintain a successful image!

[Dancin'Dog]

I think it’s funny how engineers drive older cars to show they don’t make too much money, and salespeople drive fancy cars to show all their success. The salespeople I know don’t seem to worry about being seen in a brand new fancy Mercedes or BMW. I actually think they use it to justify getting their high pay. It takes money to maintain a successful image!

My DD's boyfriend's roommate sells real estate.  He graduated college about 1.5 years ago.  His rent is $800 and he just bought an Audi A5 & the payment is $1300!  What an "image".  lol! 


Besides the stupid car payment amount, you've really got to wonder about anyone in real estate that pays rent.   

[Car Jack]

He bought a 2 door car for real estate? 

[pecunia]

I think it’s funny how engineers drive older cars to show they don’t make too much money, and salespeople drive fancy cars to show all their success. The salespeople I know don’t seem to worry about being seen in a brand new fancy Mercedes or BMW. I actually think they use it to justify getting their high pay. It takes money to maintain a successful image!

My DD's boyfriend's roommate sells real estate.  He graduated college about 1.5 years ago.  His rent is $800 and he just bought an Audi A5 & the payment is $1300!  What an "image".  lol! 


Besides the stupid car payment amount, you've really got to wonder about anyone in real estate that pays rent.

I've known engineers to buy older cars cheap because they know how to fix them.  The money saved goes into their pockets.  I believe a lot of engineers are not concerned with image.  Pocket protectors are not used by sales personnel.

[alienbogey]

Give serious consideration to an electric car.  Depending on your circumstances it could well be the best solution. 

After 2 1/2 years and 31,000 miles with a Chevy Bolt we know we will never buy another ICE car.

[soccerluvof4]

He bought a 2 door car for real estate?

That was my first thought too. Not to mention 2 door cars are just not practical in any means unless its a second car and your into them as a hobby or something imo.