Author Topic: Article from Financial Samurai  (Read 5651 times)

cloudsail

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Article from Financial Samurai
« on: August 07, 2019, 03:37:12 PM »
CNBC: I quit my job at 34 with $3 million—here are my 5 biggest regrets about early retirement.

https://www.cnbc.com/2019/08/07/here-are-5-things-i-regret-not-doing-before-retiring-early-at-34.html

Basically sums up to he wishes his stash was bigger and he had more money to spend.

It sounds rather like he's feeling pinched for money? His retirement must be more spendy than he planned.

Also at first I saw $3 million and thought that even at 3% that should be $90,000 per year. But I guess that's his net worth, so some of it must be his primary residence?

bacchi

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Re: Article from Financial Samurai
« Reply #1 on: August 07, 2019, 04:04:26 PM »
A lot of it is in non-income real estate. Or maybe he has a heavy bond concentration, given item 4 and other articles on his site.

"By the time I quit my job, I had amassed a net worth of about $3 million that generated roughly $80,000 in investment income per year."


habaneroNorway

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Re: Article from Financial Samurai
« Reply #2 on: August 07, 2019, 04:19:02 PM »
I've read a bit of his blog and he spends quite a bit by MMM standards, but is very focused on optimizing spending and investing as well. I don't think he's lacking money in retirement, to put it mildly. This is not wall of shame - material if you read the blog.

He does have a low equity allocation - the rationale being that when retired it's important never to loose money.

I'm quite certain the dude is just fine and then some.
« Last Edit: August 07, 2019, 04:24:27 PM by habaneroNorway »

cloudsail

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Re: Article from Financial Samurai
« Reply #3 on: August 07, 2019, 04:27:15 PM »
I've read a bit of his blog and he spends a quite a bit by MMM standards, but is quite focused on optimizing spending as well. I don't think he's lacking money, to put it mildly.

I read it that way because of the five items, 1 4 and 5 all boil down to having more money. 3 could possibly be about having more money too (more successful blog = more post- retirement income). The only one that isn't about money is #2.

habaneroNorway

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Re: Article from Financial Samurai
« Reply #4 on: August 07, 2019, 04:29:44 PM »
If you read his blog and come to the conclusion that he is lacking money in retirement I will be deeply shocked.

cloudsail

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Re: Article from Financial Samurai
« Reply #5 on: August 07, 2019, 04:34:19 PM »
If you read his blog and come to the conclusion that he is lacking money in retirement I will be deeply shocked.

I've only read his blog very rarely so not familiar with his financial situation. This article he wrote is quite likely just click bait, but it can basically be summed up to two points:
1. He wishes he had more money
2. He wishes he had kids earlier in life

AMandM

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Re: Article from Financial Samurai
« Reply #6 on: August 08, 2019, 07:33:51 AM »
1. He wishes he had more money
2. He wishes he had kids earlier in life

I feel like you kind of have to pick one of those two. ;-)

EscapeVelocity2020

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Re: Article from Financial Samurai
« Reply #7 on: August 08, 2019, 08:03:25 AM »
I don't think it's a terrible article.  I have played the same thought experiment game as he does in #1 - If I'd ER'ed right when I hit FI (when I changed employers), I would've missed out on expat assignments that took my family to Norway and Dubai, as well as recently living in Paris for a year.  Those assignments weren't easy, but are priceless memories and contributed to fat-FI and a very comfortable and free employment situation, so no regrets there.  The rest of the list should be thought provoking for folks in this FIRE community, after all, we are trying to optimize and make choices from a wider menu of options.

EricEng

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Re: Article from Financial Samurai
« Reply #8 on: August 08, 2019, 08:57:05 AM »
He's super spendy.
https://www.financialsamurai.com/why-5-million-dollars-is-barely-enough-to-retire-early-with-a-family/
https://www.financialsamurai.com/how-to-make-six-figures-a-year-and-not-feel-rich-200000-income-edition/

He lives expensive even by Silicon Valley standards.  He has changed a lot recently (last year or two) and not for the better.

BlueHouse

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Re: Article from Financial Samurai
« Reply #9 on: August 08, 2019, 09:23:17 AM »
If you read his blog and come to the conclusion that he is lacking money in retirement I will be deeply shocked.

I've only read his blog very rarely so not familiar with his financial situation. This article he wrote is quite likely just click bait, but it can basically be summed up to two points:
1. He wishes he had more money
2. He wishes he had kids earlier in life

or 3.  He wants other people to remain on the journey longer to keep financing his FIRE-ness.  (someone has to keep the economy humming along)

HMman

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Re: Article from Financial Samurai
« Reply #10 on: August 08, 2019, 01:25:39 PM »
He's super spendy.
https://www.financialsamurai.com/why-5-million-dollars-is-barely-enough-to-retire-early-with-a-family/
https://www.financialsamurai.com/how-to-make-six-figures-a-year-and-not-feel-rich-200000-income-edition/

He lives expensive even by Silicon Valley standards.  He has changed a lot recently (last year or two) and not for the better.

Wow, those are some crazy numbers. For those who don't feel like clicking through, below is his post-FIRE example budget:


habaneroNorway

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Re: Article from Financial Samurai
« Reply #11 on: August 08, 2019, 01:38:18 PM »
Apart from that not being his own budget, that is.

jinga nation

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Re: Article from Financial Samurai
« Reply #12 on: August 08, 2019, 01:42:29 PM »
He's super spendy.
https://www.financialsamurai.com/why-5-million-dollars-is-barely-enough-to-retire-early-with-a-family/
https://www.financialsamurai.com/how-to-make-six-figures-a-year-and-not-feel-rich-200000-income-edition/

He lives expensive even by Silicon Valley standards.  He has changed a lot recently (last year or two) and not for the better.

Maybe he's attempting financial seppuku?

BDWW

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Re: Article from Financial Samurai
« Reply #13 on: August 08, 2019, 01:52:47 PM »
Obviously that whole budget is absurd, but why in the world would you pay for $2M life insurance with a $5M!!! net worth?

habaneroNorway

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Re: Article from Financial Samurai
« Reply #14 on: August 08, 2019, 01:55:55 PM »
Despite English not being my mother tongue even I managed to understand from the article that it is a sample budget from a reader living in a HCOL area (Los Angeles).

It's stated quite clearly in the article:

To give you an idea of what $200,000 a year in passive income can cover, let’s profile Jerry, a Financial Samurai reader’s budget. Jerry is 45 years old, has a 8-month-old daughter and a non-working spouse named Linda, 38. They’ve lived in Los Angeles for the past 20 years

I don't know FinancialSamurai's annual spending post-worklife, but if I remember correctly he still saves about 50% of his income .
« Last Edit: August 08, 2019, 01:57:47 PM by habaneroNorway »

Bloop Bloop

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Re: Article from Financial Samurai
« Reply #15 on: August 08, 2019, 07:05:51 PM »
Sounds like a great way to raise fuckin' entitled and spoiled children.

You can live large if you like - I couldn't criticise anyone for that, as long as he or she could afford it. But to have your children live large, being taken care of by a nanny, ferried to appointments, getting take-out every night - when your children haven't earned the huge stash that you have - is asking to bring up useless, entitled and lazy kids.

It's a massive disservice.

Other than the children-related expenses, I don't have any issues with the budget. He's entitled to spend how he likes. Sounds like he's trying to fill up his retirement with enough needless junk to make financial / child management into a full-time job, but that's his prerogative.

cloudsail

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Re: Article from Financial Samurai
« Reply #16 on: August 08, 2019, 07:26:42 PM »
Yes, I've seen the $5 million article too and he makes it very clear that it's not his budget. But the fact that he featured a case study like this, without any discussion of all the unnecessary expenses in there, gives the impression that he's condoning this kind of spending as "necessary".

SF in general can be a little crazy, and I wonder that even if he hasn't succumbed to lifestyle creep himself, whether he might not feel a little like he's missing out on the glamorous lives that he sees around him. The CNBC article really reads a lot like, "If I had just worked a little bit longer, I could have soooooo much more money now!"

Taran Wanderer

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Re: Article from Financial Samurai
« Reply #17 on: August 08, 2019, 09:34:43 PM »
Other than the children-related expenses, I don't have any issues with the budget. He's entitled to spend how he likes. Sounds like he's trying to fill up his retirement with enough needless junk to make financial / child management into a full-time job, but that's his prerogative.

I read it the same way.  While you could certainly make some different choices here and there (life insurance, cable, for example), the big one that sticks out is the childcare.  Why have kids if you don't want to spend time with them when you no longer have to work?  I guess I'd also question the big mortgage payment.  I will feel a lot comfortable pulling the FIRE ripcord when I have no mortgage.

TomTX

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Re: Article from Financial Samurai
« Reply #18 on: August 09, 2019, 08:26:41 AM »
He's super spendy.
https://www.financialsamurai.com/why-5-million-dollars-is-barely-enough-to-retire-early-with-a-family/
https://www.financialsamurai.com/how-to-make-six-figures-a-year-and-not-feel-rich-200000-income-edition/

He lives expensive even by Silicon Valley standards.  He has changed a lot recently (last year or two) and not for the better.
Why does he think that $100k in investment income only results in $75k net income?

habaneroNorway

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Re: Article from Financial Samurai
« Reply #19 on: August 09, 2019, 08:36:11 AM »

Why does he think that $100k in investment income only results in $75k net income?

Tax?

bacchi

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Re: Article from Financial Samurai
« Reply #20 on: August 09, 2019, 08:46:01 AM »

Why does he think that $100k in investment income only results in $75k net income?

Tax?

That is some poor tax planning.

habaneroNorway

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Re: Article from Financial Samurai
« Reply #21 on: August 09, 2019, 09:46:44 AM »
As a non-US residents I find it a bit surprising that hardly anyone lists "taxes" as an expense when calculating stash needed based on the 4% rule. Does that mean that you in reality end up never paying taxes when you sell shares at a profit, receives a coupon on bonds, equties pay dividends or a tenant pays you rent? Does all taxes disappear with proper planning?

As a ballpark, for someone with say 2.0m stash, annual withdrawal of 4% (so 80k) what would a well-planned tax burden be? I realize it varies and is probably complicated based on a long list of factors, but are we talking 0%, 10% or 20% as the closest likely number?

habaneroNorway

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Re: Article from Financial Samurai
« Reply #22 on: August 09, 2019, 09:47:21 AM »
As a non-US residents I find it a bit surprising that hardly anyone lists "taxes" as an expense when calculating stash needed based on the 4% rule. Does that mean that you in reality end up never paying taxes when you sell shares at a profit, receives a coupon on bonds, equties pay dividends or a tenant pays you rent? Ds all taxes on capital gains with proper planning?

As a ballpark, for someone with say 2.0m stash, annual withdrawal of 4% (so 80k) what would a well-planned tax burden be? I realize it varies and is probably complicated based on a long list of factors, but are we talking 0%, 10% or 20% as the closest likely number?

BDWW

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Re: Article from Financial Samurai
« Reply #23 on: August 09, 2019, 10:01:59 AM »
Perhaps someone will chime in who's up on the exact math, but dividends and long term capital gains are taxed at 15%. But that's only after meeting a minimum threshold of income.

I would guess your hypothetical of 80K income would be around a 5% total tax burden.

dandarc

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Re: Article from Financial Samurai
« Reply #24 on: August 09, 2019, 10:22:24 AM »
As a non-US residents I find it a bit surprising that hardly anyone lists "taxes" as an expense when calculating stash needed based on the 4% rule. Does that mean that you in reality end up never paying taxes when you sell shares at a profit, receives a coupon on bonds, equties pay dividends or a tenant pays you rent? Does all taxes disappear with proper planning?

As a ballpark, for someone with say 2.0m stash, annual withdrawal of 4% (so 80k) what would a well-planned tax burden be? I realize it varies and is probably complicated based on a long list of factors, but are we talking 0%, 10% or 20% as the closest likely number?
It depends on the structure of your portfolio and your plans. Drawing 80K could look like:

Live in Florida, so no state income tax
40K - from Roth IRAs so no tax
20K - qualified dividends from taxable account, 0% tax rate
20K - shares sold in taxable account, but only 10K of that is a long-term capital gain so again 0% tax rate since our income is still well under the threshold for that rate to go up.

or it could look like:

80K - from traditional IRA - all of it taxed at ordinary income rates plus 10% additional tax since we didn't plan our early withdrawals in advance to avoid this.
and we live in California, so state income tax too!

If you keep your spending low enough, in early retirement it is fairly easy to pay little to no federal income taxes in the US. During accumulation, if you make tax planning a priority you can pay pretty low taxes too, but you have less control since the rational decision will almost always be "make more money if someone is willing to pay it" while you're still working.

In later retirement, once social security and any pensions that might be coming and potentially required minimum distributions kick in from your traditional retirement accounts you lose some of the ability to "call your shot" in terms of income.


You typically will see property tax listed in budgets for homeowners. Renters don't have that as a separate expense so not included for them. Sales tax will typically be baked in to whatever the item is on the budget - groceries, car replacement, clothing.
« Last Edit: August 09, 2019, 10:29:48 AM by dandarc »

cloudsail

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Re: Article from Financial Samurai
« Reply #25 on: August 09, 2019, 10:46:23 AM »
For an idea on the federal long term capital gains tax rate for a married couple:

dandarc

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Re: Article from Financial Samurai
« Reply #26 on: August 09, 2019, 10:49:56 AM »
Good point - if you're married filing jointly, pulling 80K at 0% federal income tax is trivial from a taxable account.

MonkeyJenga

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Re: Article from Financial Samurai
« Reply #27 on: August 09, 2019, 11:46:34 AM »
Good point - if you're married filing jointly, pulling 80K at 0% federal income tax is trivial from a taxable account.

And not all of that 80k will be gains.

TomTX

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Re: Article from Financial Samurai
« Reply #28 on: August 09, 2019, 01:45:15 PM »
Good point - if you're married filing jointly, pulling 80K at 0% federal income tax is trivial from a taxable account.

And not all of that 80k will be gains.

Yep, you might as well sell enough shares to fill up the 0% tax cap gains bucket and reset your basis higher. Sell your VTI and buy VOO or something like that.

Gogocurrycracker has been giving a breakdown of their taxes on ~$100k of annual income for the past 6 years, and they have had effectively zero taxes in 5 of 6 years, and a pittance (<2%) in the 6th year.

https://www.gocurrycracker.com/6-years-of-nearly-income-tax-free-living/

MonkeyJenga

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Re: Article from Financial Samurai
« Reply #29 on: August 09, 2019, 01:59:13 PM »
Good point - if you're married filing jointly, pulling 80K at 0% federal income tax is trivial from a taxable account.

And not all of that 80k will be gains.

Yep, you might as well sell enough shares to fill up the 0% tax cap gains bucket and reset your basis higher. Sell your VTI and buy VOO or something like that.

Ah I forgot about that strategy! Need to work out for next year how it will impact health insurance eligibility and state taxes. Too bad I moved to a state with the 3rd highest cap gains taxes...

habaneroNorway

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Re: Article from Financial Samurai
« Reply #30 on: August 09, 2019, 02:13:15 PM »
Ok thx, that's quite different from the regime I'm operating under. Just to give a rough overview just to show the differences if of any interest to anyone:

Norway has tax on wealth. The overall ideas are as follows:
- the rate is 0.85%, you pay zero up to about 150k USD wealth (debt is deducted so 250k assets, 100k debt = 150k net wealth = 0 tax)
- equites/equity funds are  counted at 70% of market value, bonds, CDs, bank accounts etc at 100%
- primary residence at 30% of value
- secondary and further residences at 90% of value. Same story for rental properties.
- retirement savings are not counted as taxable wealth, but I can only put ~4500 bucks / year in + what my employer puts in (depends on income and how generous the employer is). When withdrawing at the regular retirement age it's taxed as regular income. No backdoor US-style.

On the flipside property taxes are a lot lower than numbers I've seen thrown around here - I live in a major city and pay about 2800 bucks on a house worth ~1.4-1.5m. Then there is healthcare for which I have to budget zero, ditto with college funds etc

The problem with the wealth tax is that you cannot geoarb it away unless leaving the country - if selling the house and moving to a LCOL area my other investments will go up and I will see a higher bill for wealth tax. It's also a touchy political issue so it might go up a little or disappear and later come back depending on which direction the political winds are blowing at various points in the future. Ditto with property taxes (albeit capped at 0.7% of value by law, but laws might change).

As for equity investments I can postpone capital gains tax for a Very Long Time. You buy equities on a special kind of account where you can take out the notional amount you put in + a small "free" gain per year (essentially the short-term risk-free rate which at mom is lower than inflation rate). Ditto with dividends, tax is posponed the same way, but dividends don't count towards what you can take out tax-free. I can buy and sell funds, ETFs and equities inside this account. No tax on gains (or offset on losses) until I actually take out more than I put in. Only valid for European-registered instruments, however. But I have access to global and US based index funds registered locally so that's no big deal.

Bottom line is that especially the wealth tax forces me to take taxes into account. As the deductible is quite low it adds up as the 'stash gets big. Its like the 4% rule becomes the 3.4% rule. The wealth tax is independent of income so having zero income does not make it go away. with compounding over the years it does eat up a fair part of the 'stash.
« Last Edit: August 09, 2019, 02:19:43 PM by habaneroNorway »

cloudsail

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Re: Article from Financial Samurai
« Reply #31 on: August 09, 2019, 02:44:22 PM »
Good point - if you're married filing jointly, pulling 80K at 0% federal income tax is trivial from a taxable account.

And not all of that 80k will be gains.

Yep, you might as well sell enough shares to fill up the 0% tax cap gains bucket and reset your basis higher. Sell your VTI and buy VOO or something like that.

Gogocurrycracker has been giving a breakdown of their taxes on ~$100k of annual income for the past 6 years, and they have had effectively zero taxes in 5 of 6 years, and a pittance (<2%) in the 6th year.

https://www.gocurrycracker.com/6-years-of-nearly-income-tax-free-living/

That only works for him though because he doesn't live in the U.S. and doesn't have to have medical insurance here. For those of us needing to think about ACA subsidies, we probably can't do very much of this without paying much higher premiums. Kind of like how ACA killed the Roth conversion ladder too.

Healthcare is such a beast here. It's why we're giving serious thought to moving to Canada.

aasdfadsf

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Re: Article from Financial Samurai
« Reply #32 on: August 10, 2019, 12:44:12 AM »
Among the very many problems with that sort of budget is why you need to live in San Francisco when you are retired. The whole point of living in an expensive city is that there are high paying jobs. If you don't need a job, go live somewhere else. If you want the cultural amenities, there are places called "suburbs" that won't require you to live in a $1.3M home but will still allow you to travel into the city to see that show or visit that museum on occasion. Granted, the whole Bay Area is horribly expensive, but you can live in the 'burbs of most other major cities fairly cheap. Or then again you can just live in Montana or Costa Rica. There is no damned sense in paying for a $1.3M home when you have the freedom to live anywhere.

FIRE 20/20

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Re: Article from Financial Samurai
« Reply #33 on: August 10, 2019, 10:19:15 AM »
...
Kind of like how ACA killed the Roth conversion ladder too.

Wait, what?  @cloudsail can you explain what you mean by this?  I've been digging into the details of the ACA and Roth conversion ladders for years and haven't heard about this, and if it's a real thing then my plan will need significant changes!  As far as I know the Roth conversion ladder is totally compatible with the ACA but I've been wrong before.

cloudsail

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Re: Article from Financial Samurai
« Reply #34 on: August 10, 2019, 10:27:29 AM »
...
Kind of like how ACA killed the Roth conversion ladder too.

Wait, what?  @cloudsail can you explain what you mean by this?  I've been digging into the details of the ACA and Roth conversion ladders for years and haven't heard about this, and if it's a real thing then my plan will need significant changes!  As far as I know the Roth conversion ladder is totally compatible with the ACA but I've been wrong before.

It depends on how much your passive income is and how much you intend to spend in retirement, I guess. But for a lot of people, Roth conversions raises their income beyond the ACA subsidy cliffs, such that they end up paying significantly more in premiums.

To be honest, I haven't looked into it in detail because we have a lot of taxable assets so weren't planning to rely on Roth conversions in the first place. I've just seen other posters on this forum talk about it.

FIRE 20/20

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Re: Article from Financial Samurai
« Reply #35 on: August 10, 2019, 10:33:54 AM »
...
Kind of like how ACA killed the Roth conversion ladder too.

Wait, what?  @cloudsail can you explain what you mean by this?  I've been digging into the details of the ACA and Roth conversion ladders for years and haven't heard about this, and if it's a real thing then my plan will need significant changes!  As far as I know the Roth conversion ladder is totally compatible with the ACA but I've been wrong before.

It depends on how much your passive income is and how much you intend to spend in retirement, I guess. But for a lot of people, Roth conversions raises their income beyond the ACA subsidy cliffs, such that they end up paying significantly more in premiums.

To be honest, I haven't looked into it in detail because we have a lot of taxable assets so weren't planning to rely on Roth conversions in the first place. I've just seen other posters on this forum talk about it.

Ok, I misunderstood what you meant by, "ACA killed the Roth conversion ladder".  The Roth conversion ladder is still 100% valid and in effect - the ACA didn't change that approach in any way. 

scottish

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Re: Article from Financial Samurai
« Reply #36 on: August 11, 2019, 03:19:18 PM »
Good point - if you're married filing jointly, pulling 80K at 0% federal income tax is trivial from a taxable account.

And not all of that 80k will be gains.

Yep, you might as well sell enough shares to fill up the 0% tax cap gains bucket and reset your basis higher. Sell your VTI and buy VOO or something like that.

Gogocurrycracker has been giving a breakdown of their taxes on ~$100k of annual income for the past 6 years, and they have had effectively zero taxes in 5 of 6 years, and a pittance (<2%) in the 6th year.

https://www.gocurrycracker.com/6-years-of-nearly-income-tax-free-living/

That only works for him though because he doesn't live in the U.S. and doesn't have to have medical insurance here. For those of us needing to think about ACA subsidies, we probably can't do very much of this without paying much higher premiums. Kind of like how ACA killed the Roth conversion ladder too.

Healthcare is such a beast here. It's why we're giving serious thought to moving to Canada.

Interesting.   Is it going to be hard to immigrate to Canada from the US?   Would you become Canadian citizens or stay as Muricans?   I understand that you have to file an IRS return as well as a Canadian return if you keep your US citizenship.

We have higher income taxes to make up for the single payer health care....

EricEng

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Re: Article from Financial Samurai
« Reply #37 on: August 11, 2019, 05:40:16 PM »
He did another article recently for CNBC
https://www.cnbc.com/2019/08/07/here-are-5-things-i-regret-not-doing-before-retiring-early-at-34.html

Basically says he wishes he hadn't quit. I suspect he wants fancy things or doesn't know how to entertain himself in retirement.

Quote
As a non-US residents I find it a bit surprising that hardly anyone lists "taxes" as an expense when calculating stash needed based on the 4% rule. Does that mean that you in reality end up never paying taxes when you sell shares at a profit, receives a coupon on bonds, equties pay dividends or a tenant pays you rent? Does all taxes disappear with proper planning?

As a ballpark, for someone with say 2.0m stash, annual withdrawal of 4% (so 80k) what would a well-planned tax burden be? I realize it varies and is probably complicated based on a long list of factors, but are we talking 0%, 10% or 20% as the closest likely number?
Yes, with proper planning it goes to 0.  Capital gains on a post tax account (not ira/401k trad)  combined with total income in the first two tax brackets are taxed at 0%.  For a married couple that's nearly $80,000 of gains you can have tax free not counting any deductions or child credits which means it could be higher.
« Last Edit: August 11, 2019, 05:44:08 PM by EricEng »

kimmarg

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Re: Article from Financial Samurai
« Reply #38 on: August 11, 2019, 06:22:23 PM »
I read it the same way.  While you could certainly make some different choices here and there (life insurance, cable, for example), the big one that sticks out is the childcare.  Why have kids if you don't want to spend time with them when you no longer have to work? 

If you read the article they've budgeted for 9 hours/week of childcare at $22/hr.  Now that rate is insane and equates to what I pay for 4 day a week full time care BUT as the parent of small kids 9 hours per week or help sounds.... wonderful. that's not 'not wanting to spend time with them'. That's going to the gym twice a week and running some errands,  or preschool 9-12 M,W,F. There are 168 hours a week, I'd say spending 159 hours with your kids is plenty.

Telecaster

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Re: Article from Financial Samurai
« Reply #39 on: August 11, 2019, 06:41:04 PM »
Financial Samurai is bullshit.  He's great at marketing himself, but his advice is useless. 

cloudsail

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Re: Article from Financial Samurai
« Reply #40 on: August 11, 2019, 09:53:40 PM »

Interesting.   Is it going to be hard to imigrate to Canada from the US?   Would you become Canadian citizens or stay as Muricans?   I understand that you have to file an IRS return as well as a Canadian return if you keep your US citizenship.

We have higher income taxes to make up for the single payer health care....

I forgot to add the word "back" to moving to Canada :)
We are Canadians who moved to the US over ten years ago. All our investments and retirement accounts are here, so it would be a little complicated, yes. Also real estate in a lot of Canada is cringe-worthy right now.

RetiredAt63

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Re: Article from Financial Samurai
« Reply #41 on: August 12, 2019, 08:05:50 AM »

Interesting.   Is it going to be hard to imigrate to Canada from the US?   Would you become Canadian citizens or stay as Muricans?   I understand that you have to file an IRS return as well as a Canadian return if you keep your US citizenship.

We have higher income taxes to make up for the single payer health care....

I forgot to add the word "back" to moving to Canada :)
We are Canadians who moved to the US over ten years ago. All our investments and retirement accounts are here, so it would be a little complicated, yes. Also real estate in a lot of Canada is cringe-worthy right now.

That makes a huge difference.  I was chatting recently with someone who is on track to becoming a permanent resident.  She and her husband had to jump through a lot of hoops to get here.  And they are very desirable immigrants.

HMman

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Re: Article from Financial Samurai
« Reply #42 on: August 12, 2019, 08:17:48 AM »
Apart from that not being his own budget, that is.

Yeah, I didn't make that explicit in my post, but the fact that he posted this budget as a reasonable example of post-FIRE spending is why I pulled it out; not because it is his actual budget. aasdfadsf, Taran Wanderer, and BDWW brought up a few of the items in this budget that are especially odd (namely, still living in an HCOL, needing childcare when both parents are retired, and the life insurance policy despite a $5M net worth), and there are several others that seem over-the-top to me ($1800 for food to save time, despite both being retired??).
« Last Edit: August 12, 2019, 08:20:34 AM by HMman »

habaneroNorway

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Re: Article from Financial Samurai
« Reply #43 on: August 12, 2019, 08:30:16 AM »
In another blog post he has FIRE budgets for various spending levels to show how much 'stash is needed to sustain various lifestyles depending on various returns etc. These range from quite low to very high.

People want different things in life. Some people on this forum live quite frugally by any standard, others have high incomes and high spending and despite trimming some of the most obvious fat from the spending still spends way more than say MMM himself does.

Its not a question of "reasonable". Its a question of how much money, and by extension how big a nest egg is needed to live a certain way. There are also blog posts on geoarbitraging, his own budget from the time he worked in banking on Wall Street (when he was a pretty hard-core saver by any standard) and so on.

If you for some reason want to live in a spacious, comfy apartment in the Bay Area, on Manhattan or whatever HCOL are you want to live in, you need more money than if you move to a place with much lower COL.  You don't have to be frugal to be FIRE, but it makes it easier to obtain and probably also to sustain and to adjust spending down in case the market doesn't deliver as anticipated.

I think the blog is pretty good - but it probably doesn't cater to the hardcore crowd.

Taran Wanderer

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Re: Article from Financial Samurai
« Reply #44 on: August 12, 2019, 09:16:08 PM »
habaneroNorway, good assessment.  As I was generally accepting the budget with the exception of carrying the mortgage and a few other line items, it would be safe to surmise I'm not "hardcore".  A true mustachian could do some some major face-punching with the budget.

talltexan

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Re: Article from Financial Samurai
« Reply #45 on: August 16, 2019, 07:09:42 AM »
Among the very many problems with that sort of budget is why you need to live in San Francisco when you are retired. The whole point of living in an expensive city is that there are high paying jobs. If you don't need a job, go live somewhere else. If you want the cultural amenities, there are places called "suburbs" that won't require you to live in a $1.3M home but will still allow you to travel into the city to see that show or visit that museum on occasion. Granted, the whole Bay Area is horribly expensive, but you can live in the 'burbs of most other major cities fairly cheap. Or then again you can just live in Montana or Costa Rica. There is no damned sense in paying for a $1.3M home when you have the freedom to live anywhere.

I agree that FS's numbers from San Francisco look cartoonish. I think if you changed the housing numbers from his sample budgets, that would achieve much of the reduction of unreasonable expenses. You'd do the rest by eliminating what could only be described as luxury parenting-related items.

I think part of life is choosing what you value. He's successful as a Landlord within San Francisco, so he can build a sustainable life there even without having one of those remarkable Bay area jobs.