Author Topic: Do you think I'm financially independent?  (Read 2219 times)

kiteboarding.gal

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Do you think I'm financially independent?
« on: May 01, 2017, 07:49:51 PM »
Thanks in advance for your expert opinions.

INCOME
I own a company and my paycheck is around $60,000 per year net. I've been working part-time (really only a few hours per week) and remotely (full-time nomad, we don't keep a house anywhere) for the last 5 years, feeling like of FI, but still worrying about saving and earning more.

EXPENSES
I spend around $15,000 per year (average over the last 5 years)
My company pays some of my expenses (health insurance, some travel)

DEBTS
zero

ASSETS
Emergency cash - $15,000
Investments in Vanguard, Lending Club & Wealthfront - $354,000
Residential Real Estate investment properties - $286,000 that I've put into 3 projects. None have loans, all cash-flow every year and I earn around $10,000 in rental income.

So cash flow-wise I'm in good shape. I'm 39 and (touch wood) healthy. My boyfriend is also pretty much FI with close to 800k in vanguard and only slightly higher annual expenses. He's worried a medical emergency might take all our money...

He has BCBS insurance and I have a major medical ex-pat medical insurance.

What do you all think? Thanks so much in advance, I appreciate your time! Mustache for life baby.

jeromedawg

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Re: Do you think I'm financially independent?
« Reply #1 on: May 01, 2017, 08:06:51 PM »
Thanks in advance for your expert opinions.

INCOME
I own a company and my paycheck is around $60,000 per year net. I've been working part-time (really only a few hours per week) and remotely (full-time nomad, we don't keep a house anywhere) for the last 5 years, feeling like of FI, but still worrying about saving and earning more.

EXPENSES
I spend around $15,000 per year (average over the last 5 years)
My company pays some of my expenses (health insurance, some travel)

DEBTS
zero

ASSETS
Emergency cash - $15,000
Investments in Vanguard, Lending Club & Wealthfront - $354,000
Residential Real Estate investment properties - $286,000 that I've put into 3 projects. None have loans, all cash-flow every year and I earn around $10,000 in rental income.

So cash flow-wise I'm in good shape. I'm 39 and (touch wood) healthy. My boyfriend is also pretty much FI with close to 800k in vanguard and only slightly higher annual expenses. He's worried a medical emergency might take all our money...

He has BCBS insurance and I have a major medical ex-pat medical insurance.

What do you all think? Thanks so much in advance, I appreciate your time! Mustache for life baby.


Are you asking more about being FIREd than FI?

The thing that stands out most is the fact that you own a company and that you only put in a a few hours a week. That sounds like a pretty insane time-value proposition for $60k a year. What kind of business is this? It doesn't sound like you're tied down to anything location-wise so it sounds like a good setup. If you were to work full-time would your salary increase? (e.g. do you pay yourself by the hour?). I'm assuming you have no plans to give this up, right?

Otherwise, your expenses are definitely in-check and great as far as Mustachianism is concerned.

It really sounds like you're FI already. Some might even argue that you're FIREd, depending on your business-situation. It seems like a majority of your income is primarily passive though, which is awesome. Perhaps you could increase your position in REI? I'm assuming you do buy and hold? But it also depends on what kind of REI you're into and if you enjoy the management aspects of all that. BTW: do you have mortgages on your properties and are they buy & hold?
« Last Edit: May 01, 2017, 08:25:10 PM by jeromedawg »

kiteboarding.gal

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Re: Do you think I'm financially independent?
« Reply #2 on: May 01, 2017, 10:15:50 PM »
Jeromedawg thanks for your input.

My work is pretty fun, I built a kiteboarding school in the Caribbean. I went crazy for 10 or so intense years with creating standard operating procedures and hiring based on personality. Now my team run the day to day and I run purchasing and accounting from my laptop anywhere in the world.

Aside from bad wind years (thanks El Nino) the school works well. I'm not considering going to work there full time again, the stress isn't worth the extra money.

The REI is exactly the plan, we're about to build a vacation rental that should bring in an extra few thousand bucks per year (hoping to net 3k each.)

Buy and hold.

No mortgages.

All properties have their own hired property manager.

Excited about a mindshift, this morning I woke up thinking I could take some of my paycheck and hire a couple of local guys to pick trash up off my beach instead of putting the money into Vanguard.....

jeromedawg

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Re: Do you think I'm financially independent?
« Reply #3 on: May 01, 2017, 10:44:00 PM »
Jeromedawg thanks for your input.

My work is pretty fun, I built a kiteboarding school in the Caribbean. I went crazy for 10 or so intense years with creating standard operating procedures and hiring based on personality. Now my team run the day to day and I run purchasing and accounting from my laptop anywhere in the world.

Aside from bad wind years (thanks El Nino) the school works well. I'm not considering going to work there full time again, the stress isn't worth the extra money.

The REI is exactly the plan, we're about to build a vacation rental that should bring in an extra few thousand bucks per year (hoping to net 3k each.)

Buy and hold.

No mortgages.

All properties have their own hired property manager.

Excited about a mindshift, this morning I woke up thinking I could take some of my paycheck and hire a couple of local guys to pick trash up off my beach instead of putting the money into Vanguard.....

That's awesome - sounds like a dream job to me. Are your RE investments also in the Caribbean or in the states? Or both? It's great that you have no mortgages either. I think you're in pretty good shape, and from the sounds of things it really sounds like you're FIREd. The fact that you're not on a leash, can live wherever you want, are living well below your means, and have relatively passive income streams is a big indicator of that. The only other outstanding issue might be how much wealth in net worth you desire to build as well as  plans for kids potentially. You may have to budget a little for kids but I don't think they have to be as 'expensive' as some people make them out to be (LOL). In terms of Vanguard, what are you invested in? Mostly the S&P500?
« Last Edit: May 01, 2017, 10:48:07 PM by jeromedawg »

kiteboarding.gal

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Re: Do you think I'm financially independent?
« Reply #4 on: May 02, 2017, 11:22:34 AM »
Jeromedawg I appreciate your insights and time so much - thank you!

No kids. One elderly but lovely and beloved pet dog.

Here's the list of my funds, heavily weighted to the VTSAX (S&P 500).

Mostly:
VTSAX   Vanguard Total Stock Market Index Fund Admiral Shares

A bit of:
VWIGX   Vanguard International Growth Fund Investor Shares

And a tiny bit of:
VGSLX   Vanguard REIT Index Fund Admiral Shares

Also some Traditional IRA
VFORX   Vanguard Target Retirement 2040 Fund

Saskatchewstachian

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Re: Do you think I'm financially independent?
« Reply #5 on: May 03, 2017, 01:06:48 PM »
Kiteboarding.Gal

Based on a quick number crunch I would DEFINITELY call you FI.
I am going to lump you and BF here just for simplicity but it looks like you have 354k of invested assets and he has 800k. Together you have $1,154,000 or enough to generate 46k/yr at 4% SWR.

Expenses are ~30k but really 10k of that is covered by the income from the real estate so the investments must provide just 20k/yr to support your lifestyle. With current investments and current expenditures this put you at about a 1.7% withdrawal rate.

So the only thing left is, CONGRATS you're FI!

jeromedawg

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Re: Do you think I'm financially independent?
« Reply #6 on: May 04, 2017, 12:24:13 AM »
Kiteboarding.Gal

Based on a quick number crunch I would DEFINITELY call you FI.
I am going to lump you and BF here just for simplicity but it looks like you have 354k of invested assets and he has 800k. Together you have $1,154,000 or enough to generate 46k/yr at 4% SWR.

Expenses are ~30k but really 10k of that is covered by the income from the real estate so the investments must provide just 20k/yr to support your lifestyle. With current investments and current expenditures this put you at about a 1.7% withdrawal rate.

So the only thing left is, CONGRATS you're FI!

4 posts in and she's FI! This might be record-setting LOL

It's nice being in a position where you don't even have to consider calling it quits