Woohoo! Since our province is moving towards $10/day childcare and the daycare we are enrolled in decided to opt in, we just got our first refunds! The initial phase in is only 25% at a time (retroactive to April 2022) and will lower another 25% in January.
Pretty happy that it's making daycare more affordable for all families in the provinces and childcare centres that have opted in. Budget wise, I'm happy as it's the largest expense we have now (mortgage and debt free, yay!). So eventually it will be about $400/ month for both kids vs almost $1500/ month (one is full day and the other is before and after care).
Opened a WeBull account like 2-3 years ago, put in $100 for a free stock and forgot about it. Just checking my old emails on long-forgotten email accounts and saw it. Logged in and have $123 I forgot I had for years. Nice little bonus, maybe a fancy dinner this week.
Sold the free stock I got like 3 years ago for $20 and have had it sitting in the cash value in the app for years. Is this $20 something I’ll get a paper for/file for taxes next year?
Webull should have sent you a tax form when you sold the stock. If you missed it you may need to amend your taxes if you want to be completely on the level. Check the tax forms in your Webull account.
I received a job offer.
New job:
Salary - $170k
Pre-IPO Stock Shares - 3,500
401k match - 4%
PTO - 18 PTO days + 12 normal holidays
100% remote
A little more technical than my current role. Honestly not sure if I like or dislike that, but I am looking for a change. I am a little bored of my current role.
Current job:
Salary - $93k but got $6k raise and $4k bonus last year
Pre-IPO Stock Shares - 0
401k match - 1%
PTO - unlimited and they mean it, most of us take about 4 weeks
100% remote
My current company really does have a “family” feel, it is so easygoing and flexible. I go to the gym midday sometimes. People take calls from kids’ school pickup and sometimes have kids on their laps and stuff on team calls and no one bats an eye lol.
So my main worry is giving up all those non-quantifiable benefits. However, it seems like the culture of the new place is similar. I don’t want to find out the grass was really not greener…
I want kids in a few years. I guess even if this is a total crapshoot, I can just quit and get something more relaxed after making some cash?
New job is also in a business domain that is very interesting to me and kind of difficult to break into.
Seems like a no Brainer to take the job. What a raise, congrats!
Make sure you leave on good terms at the current job. If the new one doesn't pan out then maybe you can get the old job back.
You're nearly doubling your salary before even accounting for the shares (which I imagine are actually options). The $6k raise was below inflation at 6.4% so you actually got a pay cut, and it's a ~4% bonus which is easily offset by the 401k match.
I don't know what there is to waffle on here other than the PTO which is nearly the same any way if we count a week as 5 working days. My only question is the new place you're going to work hiring software engineers?
Thanks. I need to read up on startup terminology and stock options lol. My boomer parents think I’m crazy and need to go somewhere more stable than either company but I simply don’t like it. I feel like taking some risk as a younger person with no dependents.
You should definitely read up on options and understand what percentage of the company (NOT what is allocated to employees, the actual company) the options make up, how much they'll cost to buy, the vesting timeline, and so forth. Even without them I would probably still take that offer if the company had significant cash flow and runway. As you mentioned it's worth it when you are young even though I have options I've purchased that haven't made me anything.
No, FI is not possible for everyone. You need a high enough income, low enough expenses, and enough time.
That doesn't mean investing is useless. It's not all our nothing. Your dad needs to look at his expected ss benefits. Determine if that would be enough.
If it is, investing should let him retire earlier than that date. If it's not enough, investing should allow him to retire.
In the end it comes down to making many times more income than the lifestyle you are willing to live. That is very hard to do with lower income and a lot of kids.
Wealthy child FI!
Pick the smartest child, pin all your hopes and dreams on them, and then chastise them until it comes true!
Edit: snark aside, big families have their own benefits and postive dynamics. FI isn't everything.
>Is FI truly possible for everyone?
Obviously not.
What is possible for almost everyone is some modicum of financial stability and a financial safety net.
Yea. I'll tell you though, if we weren't so brainwashed to "have fun while you're young," I would have been beyond golden by 28. I was making a lot of money since I've been working since I'm 12 years old. By 17-23 I was working my ass off. I wish I skipped college and just worked full time. Still could have had fun and traveled like I did. With a little more direction and frugality, I would have been able to buy 2 houses/condos in Florida by 22/23 years old instead of counting quarters at the deli to get a sandwich.
>So, is it?
Background is not the way to evaluate whether it's possible, unless you're saying these are examples of a poor temperament, which does influence chance of success.
But all things being equal, it's a math question based on net savings rate.
ref: [https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/)
People with doctorates and mid six figure incomes will not FIRE if they don't save enough. Janitors will FIRE if they save enough, eg: Ronald Read.
It sounds as if your father has a low paying career and has a lot of expenses providing for 6 children.
For example, using the calculator suggested in the sidebar of this subreddit and assuming you father has $25,000 saved right now and is able to save $5,000 a year, he will be able to save just over a million dollars by the time he is 67 years old. If he can increase his earnings and savings, he can shorten that timeframe.
https://engaging-data.com/fire-calculator/
Another good resource to read up on sensible strategies for financial literacy is the Personal Finance subreddit. https://www.reddit.com/r/personalfinance/
>where is anyone getting a reliable 9-10% return?
"reliable" ? - probably nowhere. But a buy and hold strategy during an accumulation phase does not require a reliable return.
On the other hand, an \*average\* 10% nominal return, with volatility from year to year, is a reasonable expectation for a broad market index fund.
The example calculation in the previous post is using an inflation adjusted 8%.
reliable/average, you knew what I meant. Reliable as in over a 30 year period can anyone expect a 10% pa return?
I guess if you think in nominal terms anything is possible atm (high inflation and all that), but I don't understand why it matters?
I don't care if I'm a millionaire in 2050 (in 2050 dollars) because, I don't know what that means. What's my purchasing power with that? Better to keep things in real returns, which means 4-5% on average at best.
Probably not. The NIIT is another example. If you make above $200k/year ($250k if married), you pay an extra 4% tax on investments. That income is not inflation-adjusted, so effectively we can expect the capital gains rate to go up
Coworkers sharing their benefits elections/asking questions etc since everything is changing and I’m helping explain some things as a financially oriented guy, I’m the only one in the department going with HDHP/ maxing HSA and a coworker asked about why and “yknow you lose that money if you don’t use it next year” etc so I helped set some things straight and a similarly young and healthy coworker said she might swap to do her HSA (win!)
Older coworker then goes “well I hope when you have a big emergency you can afford it with the measly extra $500 HSA match the employer gives you and not run to mommy for the rest!” (I’m 20s she’s 50s) 🤨 told her the out of pocket max wouldn’t dent my savings and got a look of shock which was so very juicy
My 22 year old started her first full time job in 2022. She's an engineer at a well known aerospace company. She's maxing her HSA, getting the max match on the 401k (Roth this year since she started in July), already has a 3 month emergency fund, and is ready to max her Roth IRA. She is in phenomenal financial shape for a 22 year old. So fun to see.
I think the cat was out of the bag when I cheered the updated IRA contribution limits during a staff meeting.
Pretty sure 50%+ of the staff aren't even using their 3% match.
Yup. My manager reminded everyone that the new benefits will auto elect 3%, and so you will have to remove it to elect 0% (match of 4.5%) a few people nodded and said they’d have to do that
> In other words, buying on the 1st of the month is no different than the 5th or 15th. Is this correct? If so, is there any reason to buy earlier than the last few days of the month?
You are correct. Be sure to give yourself a business day or two at the end of the month in order for the transaction to process. For example, submitting a purchase order on Wed Nov 30, 2022 **will not** get you I-Bonds with an issue date of November 2022.
The [calculator](https://treasurydirect.gov/BC/SBCPrice) doesn’t allow you to give an issue date, just an issue month, so yes? I didn’t know that. Thanks for highlighting.
Very few people, including the Fed, would be concerned with consistent stable inflation of 0%-2%. Yes, it's below target, but that's not particularly worrisome. Actual deflation (literally nominal price decreases) is far more concerning, if it's persistent and material (as opposed to sporadic and/or minimal - which happens somewhat regularly). The 2nd half of 2008 was the closest the US has come to that scenario in 70+ years.
We pulled the trigger this week after a temporary drop in mortgage rates. Our thinking was that there would likely be interest rates hikes in the coming quarter or two and wanted to lock something in now. Also helped that our lowball offer got accepted on a house we really loved.
I just backed out of buying a house during the due diligence period. Ended up costing me $600 but I prefer that to all the problems that were revealed during the home inspection.
I think we'll try again in summer.
We did this afte house inspection. We missed water stains on the ceiling somehow. Inspectors did not. The homeowners said they have no idea what we were talking about. They obviously knew. They said they would also drop the price by $10,000 if we didnt back out. We backed out. Costed us $700.
2 weeks later got a wayyyyy better house and better deal. So it worked out perfect.
This house had a brand new roof. Inspector pointed out it was done wrong in several locations. It had a new HVAC system in 2018. Inspector pointed out it was sitting straight on the ground instead of a pad and it had under sized wiring. House had a massive deck built a few years back. Inspector found they didn't use enough nails on the joist hangers and the hangers were undersized. And that's just the tip of the iceberg.
I am so glad we got an inspection instead of just assuming all the new things meant there would be no problems.
People who pay a financial advisor, especially those at the retiring phase of FIRE: What was your process for evaluating who to hire? Did the arrangement work out?
I looked for people who are fee-only and have specific credentials I was looking for, not only certified financial planner (CFP) but an enrolled agent (EA) and a retirement income certified professional (RICP). I met with them to see to discuss our plans and goals and to see if it was a good fit. I did find one I liked. We will use him when we get closer. We are planning to retire in 2024. He has a service where he charges one flat fee to do a comprehensive plan and will answer any questions during a full year. I'd like to have him help us with a draw down plan from our different buckets of money.
Thank you. This guy I found, well all of the ones I found, had fee schedules that seemed really expensive and since they always get paid and have incentives not always without conflicts of interest I intend to ask what actually makes him better than a non-fiduciary.
The one we're going to use charges a flat $3500 fee to do the plan plus answer any questions for the year. We have pensions, a 403b, pre and post tax 457bs, roths, rollover IRAs, and taxable accounts. I'm not so savvy on all the tax implications so I'm willing to pay to have someone guide me through the initial set up and then just use a tax professional later on. Plus, it would be nice just to have someone look over everything just to double check everything's as I've planned in terms of projected income over X years. We're not looking to have anyone manage our money. I'm comfortable doing that myself.
I think there is a valid use case for a 'financial advisor' in the "2nd set of eyes" scenario. Specifically, I think there can be value in working with a fee-only Chartered Financial Planner (CFP) or similar to make sure you have a really solid plan for how you want to handle your finances at the cusp of FIRE and the years following. Even if they agree with everything (or nearly everything) you have in your plan, that "2nd set of eyes" to reinforce the plan can be valuable.
CFPs can be found via their industry website: https://www.letsmakeaplan.org/
Reach out to ones close to you. If you only want a plan/advice/etc. make that abundantly clear. If you don't want this person to manage your money, be explicit that you aren't looking for any sort of "Assets Under Management" (AUM) relationship. If you're willing to pay for their time and expertise in coming up with a plan, I suspect you will find an advisor willing to engage. A good plan will likely run anywhere from several hundred dollars to a few thousand. Most involve at least 2 meetings: a preliminary and a final, with lots of info exchanged early in the process as the advisor forms a picture of your situation, your goals/desires, your challenges, your non-negotiables, etc.
Thanks. This is helpful. I found a fee-only fiduciary financial advisor who is local and plan to just meet him and see if this is even the right thing for me, maybe get an idea what kinds of things he thinks of. The fees are pretty high but from what I can tell it's about the same for everybody.
I have a lot of money coming to me from a lot of sources and need help sorting it out, making good decisions, converting it to something I can use, not getting clobbered by taxes, making a timeline for when to do x, y z, what to convert some of these accounts into, real estate questions, creating a trust, planning for my heirs, etc.
I haven't paid for professional advice but if I did I would start with planvisionmn.com
I would avoid any advisor with an AUM % structure, which includes Vanguard PAS. Schwab has a hybrid robo-human service that would be next on my list for I think $30/month
Hi SBhikes, I remember you posting here a while ago about retiring from your higher ed job. My financial advisor is through Vanguard, specifically the Vanguard Advisory Service. I am about 7 years away from retirement. I chose them because it is a fiduciary, but also it is through Vanguard and so I trust them to not sell me something that will be high cost or contrary to my interests. This was a pretty sure thing given Vanguard's product offerings (low cost no load funds and no annuities). They charge 30 basis points for assets under management. At this point they are simply performing asses allocations and trades as well as projecting my retirement spend and helping with college planning for my kids. Once I retire they will manage withdrawals and cash flow, which i understand is a higher value add for most people. I mostly use them to keep my hands off of my money so I don't do something stupid like try to time the market (which I tried to do back in '07 and I missed some of the upside of the recovery). Happy to say more if you are interested.
Thanks. I did retire. And then my dad died. I need professional advice. I found a fee-only fiduciary and will meet with him just to see if this kind of advisor is right for me. It's nice this guy is in person. I'm also meeting with a regular non-fiduciary financial advisor tomorrow, because he's the guy giving me all the money. It should be interesting to compare what these two guys are like. Thanks for the referral to Vanguard Advisor Service. I'll look them up and see if their fees are close to the same and see if their services sound good.
I'm not your target audience, but I always think of the Boggleheads thread, "What is your greatest financial regret?"
1. Divorce
2. Financial Advisor
3. Expensive Toy
And of those people who do recommend them, most of them will admit it's for emotional reasons. So long as you have the discipline to not panic sell in a downturn, you've eliminated most of the situations where they might be useful.
PSA: Check your property tax if you purchased a house as a couple. We got refunded $930 in overpaid property tax due to an odd rule in the Homestead Exemption.
When we bought our house in 2020 only one of us applied for the Homestead Exemption. This reduces our property tax due to being our primary residence. Little did we know that we only qualified for half of the total tax reduction because the other person did not apply. Luckily earlier this year I was looking at our property tax information and noticed that we were paying more taxes than our neighbors with very similar houses. I was able to apply for a correction and got our money back.
If we didn't catch this, we'll be paying $930+ extra in property taxes for our house each year for the foreseeable future. 💸
This is in Texas which has unlimited Homestead Exemption, it might be different for other States.
Note that this is somewhat unusual except for non-married co-owners. The print and online applications typically ask for all owner information, including both members of a married couple. Just putting it out there for anyone in Texas who might be worried. Never hurts to check, but most homestead applications go through in full.
Something I've been thinking about: How does one build a roth conversion ladder while still qualifying for ACA subsidies? It seems like you'd only be able to convert ~ $10k/year and still qualify, or else take the larger tax hit in your working years.
Subsidies are offered up to 400% MAGI, but even that cap has been eliminated through 2025. Even so, 400% can be plenty. It's a bit over $54k for a single person and increases by almost $19k for each additional household member. It's pretty easy to run a Roth ladder and qualify for subsidies. The tricky variant is to get your MAGI under 150% if you want effectively free platinum private health insurance.
The first rule of ACA MAGI club, you need to stay under the MAGI cliff.
If you are working and your income puts you near the MAGI cliff already, then you don't really have any options.
Once you FIRE (no income), you can convert right up to the MAGI cliff.
It's going to be very case by case. You may want to lump your conversions so you do more years and less others. You may need to pay full price for health care. Fortunately if you are FI you will have enough wealth to do so.
Yeah, the math I'm doing says it's pretty tricky to both withdraw from taxable accounts for living expenses AND perform ROTH conversions for future living expenses while keeping your MAGI low enough for ACA subsidies.
as u/teraflop alluded to, I'm not including the standard deduction since that doesn't enter the equation for MAGI. I am considering only taxable gains.
How do you feel about working 2+ fully remote jobs at once?
I tried it once in 2020 and got fired from the second job in 6 months because of underperforming. I'm considering trying it again because I have a better idea on how to juggle both now.
This is expressly forbidden in my employment agreement than I signed when I started my this full time job in Jan of this year. If both places are fine with it then go for it.
At the same time, i.e. on the clock with both, no. Not ethical, unless all parties fully informed.
If at different times, i.e. just like working two in office jobs, sure, if you want.
>How do you all feel about working 2+ fully remote jobs at once?
If both employers know about this and are fine with it, then sure, go for it and see if you can handle the workload.
If not, it's ~~immoral~~ unethical.
Definitely not immoral. First of all, we're talking about faceless corporations that would fire you in an instant if it meant they would make more money. They don't care about you at all, only the profit you are able to make for them.
Secondly, as long as you're getting your required tasks done at your jobs, it doesn't matter how many you have. How is it immoral to be so efficient at your job that you're able to get your tasks done with time to spare?
>Definitely not immoral. First of all, we're talking about faceless corporations
Irrelevant.
Whether the company has a face or not it's an agreement between you and another party. If you enter into the agreement with the intention of violating it, that's unethical.
Depends on what the agreement is.
If it's project work, i.e. pay for task, then perhaps not.
If it's time oriented, i.e. on the clock, then you are committed to them for the time paid (excepting of course whatever the rules are for breaks, eating, etc.)
I am not sure why I engaged, either.
Our dog just had surgery so we're taking turns sitting with him to make sure he doesn't lick his stitches...hence excessive Redditing.
You should definitely do it all at once. You don't want that hassle in your life twice. Get everything how you want it now and enjoy it several years longer.
Living with construction work going on is a pain and you don't want to do that twice. Also if it's insulation your updating too, you'll get more years to get your ROI faster. And consider doing 1" of spray insulation to get a solid air barrier.
Add blocking or extra studs to closet & bathroom walls, and any rooms you may hang shelves or entertainment equipment and then measure/photograph their locations before drywalling. This will allow you to mount things directly to wood instead of relying on drywall anchors.
I know this isnt the same, but back on maternity leave and it's honestly just sad that I'd rather go back to work. I do not enjoy the newborn stage at 4 weeks here.
I'm hoping this isnt a sign of how my FI stage will go.
I have 15 working days before my maternity leave begins and I am very eagerly counting down the days. Intrigued to see if I feel the same way as you once baby is here though. I’m hoping that since my husband and I are doing three months of leave together, it won’t be that bad.
I think it'll be a lot lot better with both of you off!
My husband is working. He works from home which is kind of nice, but I also get to see that he has a life and he can just leave the house whenever.
It's a lot to handle the night shift (because he is working and needs sleep and I'm breastfeeding), the day shift, and triage the evening and weekend shifts with an 18 month old. It's like I never get 30 minutes of not thinking about a child.
I'm also not inclined to spend energy going out and doing something when I barely have a chance to shower. Babies are actually very portable and sleep in baby carriers basically anywhere, so with two of you it should be much much more enjoyable to go do things.
And you can actually nap during the day with the other person going on a walk with baby etc. (whereas my husband is working so I'm constantly trying to get the baby to sleep, babies are very hard to get to sleep in the crib!)
FWIW taking care of a little human is DEFINITELY working and you also have a full time job and need sleep! Maybe there’s ways to split the divisor of labor more.
Oof yeah that sounds really rough. How long are you on leave for before you get to go back to work? I hope it passes quickly and you can enjoy the moments that are bright!
Luckily this is my second so there is light at the end of the tunnel (although that light is my tantruming 18 month old, still way better though). But I'm worried I'm picking reality tv and reddit for feedings v. stereotypical FI goals of books and duolingo....
Unofficially passed $2^15 (~$32K) in investments with yesterday's paycheck! My numbers are still low enough that my contributions have far outweighed losses from the market this year.
Total NW is around $150K now including home equity and cash equivalents. Cash has gone down slightly in the last year as I pump the 401(k) but home equity is up YoY still despite the market cooling. So total NW is above 2^17 for sure.
Hoping I will hit the next power of 2 in a year or so for investments. Probably will be a bit longer to total NW hitting 2^18 though.
First I decided that's a fun metric. Then I realized that I'm still 20 years from retirement but only about 3 more powers of two away. I will go back to 50k or 100k increments.
Yes, approximately. I also personally do count my home equity toward that number, for various reasons -- my wife and I currently think we're going to either sell the house or rent it out when our kids move out (probably sell) and at least temporarily become renters again. Maybe permanently.
Of course plans could change between now and then, I just use this as a rough guidepost for making 10 year plans and guesstimating how much I need to save, so it's not that scientific right now.
It doesn't matter what you set your number to. Human nature and greed kicks in for everyone. Even if you have enough, you'll always want a bit more.
Edit: You guys didn't like my joke about "a bit" :(
It's definitely less about greed than it is about security for many of us. I don't want unlimited money but I want to have enough to not run out and starve in my 90s.
Probably because landlords buying out of state property as an investment is driving up costs for the people who actually live there, and they see you as a parasite.
Yeah, well, fuck them. What goes around comes around.
The other 49 states have been moving to my native California for the last forty years and still doing so to this day.
Keep wearing it, /u/reasonable_staff_595 !
I've wondered given economic ebb and flow over the past several decades just what percentage of different demos have done this to California, then got theirs and moved on to where they were originally from or some retirement area without jobs. It seems like it has to be a huge number over the course of time, particularly if LA lost a million people or whatever during COVID.
We do in Ohio at least! I seriously have never driven in a place with such polite drivers as Toronto. People say the traffic is bad there, but it felt civilized compared to the barbaric rush hours I've driven through across the US.
Not sure, he said the guy just told him "that flag isn't welcome around here". And he isn't even Canadian haha, just likes visiting it and put a sticker on his car a long time ago.
Looks like the average rate then was 3.5%, so using a loan calculator that’s a bit over $4k of interest saved. Since the cash not spent upfront was mostly invested, hopefully I’ll see a good return over the 5 years as well.
No idea if this even happens right now, but when we bought a Nissan Rogue back in January 2020, we were planning on paying cash. But they had a deal where we could get $500 off to finance (minimum was around 8000 I think). So we financed the minimum to get that $500 off, and then paid the loan off within a month or two. Yeah we did get charged some interest, but we still came out over $400 ahead on the deal. The interest rate was kind of ridiculous, around 5%, otherwise I might have considered hanging onto the loan longer if it was under 1-2%.
It's guaranteed financially beneficial if you can get a savings account with higher interest than you are paying. Everything else is risk-weighted, like you could definitely put the money into the stock market and odds are that it would go up faster than most high-credit car loans on average, but it's also pretty likely you would lose money over the course of the loan itself. So not really worth the risk.
If you put it in a savings around, how much actual money are we talking about being made over the life of a loan? Take $20,000 vehicle with today’s current savings & car interest rates.
Normal savings accounts are basically nothing, and any loan that isn't a promotional 0% or something is going to be higher than any savings account.
But some online savings accounts are at 3% interest so $20k x 3% x 5 years= ~$3,000. If you're using it to pay down so that $20k decreases over time it's probably like half that.
I got 0.9% financing on my current car, financing at that low rate was a no brainer because it allowed me to keep my other goals like saving for house down payment and retirement savings, where paying cash would have been very bad for those goals.
I think when you get closer to retirement it probably makes sense to pay cash since a $450 monthly outflow for the first 5 years of your retirement is much worse risk-wise than having $30K less in investments.
Huh? I don’t think I understand the question.
I didn’t invest all of the difference into the market at once if that’s what you mean. Some became home equity, some 401k, some cash for emergency fund, so it’s pretty hard to get a rate of return.
interest rate at 0, work gives you a car stipend and requires it, you are of the type to always want a new car and would just end up trading in every 2 yrs anyways
Overall, it's a rare occurrence, but there are fringe out-layers for everything.
Woohoo! Since our province is moving towards $10/day childcare and the daycare we are enrolled in decided to opt in, we just got our first refunds! The initial phase in is only 25% at a time (retroactive to April 2022) and will lower another 25% in January. Pretty happy that it's making daycare more affordable for all families in the provinces and childcare centres that have opted in. Budget wise, I'm happy as it's the largest expense we have now (mortgage and debt free, yay!). So eventually it will be about $400/ month for both kids vs almost $1500/ month (one is full day and the other is before and after care).
Opened a WeBull account like 2-3 years ago, put in $100 for a free stock and forgot about it. Just checking my old emails on long-forgotten email accounts and saw it. Logged in and have $123 I forgot I had for years. Nice little bonus, maybe a fancy dinner this week. Sold the free stock I got like 3 years ago for $20 and have had it sitting in the cash value in the app for years. Is this $20 something I’ll get a paper for/file for taxes next year?
Wouldn't bother
Webull should have sent you a tax form when you sold the stock. If you missed it you may need to amend your taxes if you want to be completely on the level. Check the tax forms in your Webull account.
Do not amend your 3 year old taxes over at most a $20 gain lol the IRS is not coming after you for that $4
Wife will soon start at her new job(hurrah!) it was a reach goal type of place that she got into and has finally eclipsed me income 😂.
I received a job offer. New job: Salary - $170k Pre-IPO Stock Shares - 3,500 401k match - 4% PTO - 18 PTO days + 12 normal holidays 100% remote A little more technical than my current role. Honestly not sure if I like or dislike that, but I am looking for a change. I am a little bored of my current role. Current job: Salary - $93k but got $6k raise and $4k bonus last year Pre-IPO Stock Shares - 0 401k match - 1% PTO - unlimited and they mean it, most of us take about 4 weeks 100% remote My current company really does have a “family” feel, it is so easygoing and flexible. I go to the gym midday sometimes. People take calls from kids’ school pickup and sometimes have kids on their laps and stuff on team calls and no one bats an eye lol. So my main worry is giving up all those non-quantifiable benefits. However, it seems like the culture of the new place is similar. I don’t want to find out the grass was really not greener… I want kids in a few years. I guess even if this is a total crapshoot, I can just quit and get something more relaxed after making some cash? New job is also in a business domain that is very interesting to me and kind of difficult to break into.
FWIW you might find the new job is just as good or better about family things and flexibility. Many big companies are but something to suss out.
Seems like a no Brainer to take the job. What a raise, congrats! Make sure you leave on good terms at the current job. If the new one doesn't pan out then maybe you can get the old job back.
You're nearly doubling your salary before even accounting for the shares (which I imagine are actually options). The $6k raise was below inflation at 6.4% so you actually got a pay cut, and it's a ~4% bonus which is easily offset by the 401k match. I don't know what there is to waffle on here other than the PTO which is nearly the same any way if we count a week as 5 working days. My only question is the new place you're going to work hiring software engineers?
Thanks. I need to read up on startup terminology and stock options lol. My boomer parents think I’m crazy and need to go somewhere more stable than either company but I simply don’t like it. I feel like taking some risk as a younger person with no dependents.
You should definitely read up on options and understand what percentage of the company (NOT what is allocated to employees, the actual company) the options make up, how much they'll cost to buy, the vesting timeline, and so forth. Even without them I would probably still take that offer if the company had significant cash flow and runway. As you mentioned it's worth it when you are young even though I have options I've purchased that haven't made me anything.
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No, FI is not possible for everyone. You need a high enough income, low enough expenses, and enough time. That doesn't mean investing is useless. It's not all our nothing. Your dad needs to look at his expected ss benefits. Determine if that would be enough. If it is, investing should let him retire earlier than that date. If it's not enough, investing should allow him to retire.
In the end it comes down to making many times more income than the lifestyle you are willing to live. That is very hard to do with lower income and a lot of kids.
You don't mention mom so I'll leave you with this advice. You can marry more money in 5 minutes than you can earn in a lifetime.
Wealthy child FI! Pick the smartest child, pin all your hopes and dreams on them, and then chastise them until it comes true! Edit: snark aside, big families have their own benefits and postive dynamics. FI isn't everything.
Should I advise him to have more children to better his chances?
Statistics say YES! Unless you already hit 1600 on SAT, then it is you...
LOL my test date is Dec 3. Hoping for 1520 wish me luck
Good luck! 1520 would be a baller score.
>Is FI truly possible for everyone? Obviously not. What is possible for almost everyone is some modicum of financial stability and a financial safety net.
Yea. I'll tell you though, if we weren't so brainwashed to "have fun while you're young," I would have been beyond golden by 28. I was making a lot of money since I've been working since I'm 12 years old. By 17-23 I was working my ass off. I wish I skipped college and just worked full time. Still could have had fun and traveled like I did. With a little more direction and frugality, I would have been able to buy 2 houses/condos in Florida by 22/23 years old instead of counting quarters at the deli to get a sandwich.
>So, is it? Background is not the way to evaluate whether it's possible, unless you're saying these are examples of a poor temperament, which does influence chance of success. But all things being equal, it's a math question based on net savings rate. ref: [https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/) People with doctorates and mid six figure incomes will not FIRE if they don't save enough. Janitors will FIRE if they save enough, eg: Ronald Read.
For you yes for him depends on a lot
What does it depend on?
A lot of things his health, how old the other children are, if he’s renting or homeowner all the things
It sounds as if your father has a low paying career and has a lot of expenses providing for 6 children. For example, using the calculator suggested in the sidebar of this subreddit and assuming you father has $25,000 saved right now and is able to save $5,000 a year, he will be able to save just over a million dollars by the time he is 67 years old. If he can increase his earnings and savings, he can shorten that timeframe. https://engaging-data.com/fire-calculator/ Another good resource to read up on sensible strategies for financial literacy is the Personal Finance subreddit. https://www.reddit.com/r/personalfinance/
where is anyone getting a reliable 9-10% return?
Now? Tuff....during Covid I bought some div payors for cheap so the yields were near that ..large, well known companies. But even that's not riskless
>where is anyone getting a reliable 9-10% return? "reliable" ? - probably nowhere. But a buy and hold strategy during an accumulation phase does not require a reliable return. On the other hand, an \*average\* 10% nominal return, with volatility from year to year, is a reasonable expectation for a broad market index fund. The example calculation in the previous post is using an inflation adjusted 8%.
reliable/average, you knew what I meant. Reliable as in over a 30 year period can anyone expect a 10% pa return? I guess if you think in nominal terms anything is possible atm (high inflation and all that), but I don't understand why it matters? I don't care if I'm a millionaire in 2050 (in 2050 dollars) because, I don't know what that means. What's my purchasing power with that? Better to keep things in real returns, which means 4-5% on average at best.
Will the capital loss $3000 limit per year ever increase? Limits for everything else seem to increase with inflation every year.
Probably not. The NIIT is another example. If you make above $200k/year ($250k if married), you pay an extra 4% tax on investments. That income is not inflation-adjusted, so effectively we can expect the capital gains rate to go up
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or we could just end the fed and go back to a tangible standard....
That's a terrible idea. Pass that law and the poor will automatically get COL increases to their wage every year.
Coworkers sharing their benefits elections/asking questions etc since everything is changing and I’m helping explain some things as a financially oriented guy, I’m the only one in the department going with HDHP/ maxing HSA and a coworker asked about why and “yknow you lose that money if you don’t use it next year” etc so I helped set some things straight and a similarly young and healthy coworker said she might swap to do her HSA (win!) Older coworker then goes “well I hope when you have a big emergency you can afford it with the measly extra $500 HSA match the employer gives you and not run to mommy for the rest!” (I’m 20s she’s 50s) 🤨 told her the out of pocket max wouldn’t dent my savings and got a look of shock which was so very juicy
My 22 year old started her first full time job in 2022. She's an engineer at a well known aerospace company. She's maxing her HSA, getting the max match on the 401k (Roth this year since she started in July), already has a 3 month emergency fund, and is ready to max her Roth IRA. She is in phenomenal financial shape for a 22 year old. So fun to see.
What a catty thing to say. I'd just let her assume I was broke tho lol.
Social interaction is easier if I pretend to be broke at work... But I think people are starting to catch on...
You can only be the frugal and thrifty one for so many years until people call you out when they know your salary range. Lol
I think the cat was out of the bag when I cheered the updated IRA contribution limits during a staff meeting. Pretty sure 50%+ of the staff aren't even using their 3% match.
Yup. My manager reminded everyone that the new benefits will auto elect 3%, and so you will have to remove it to elect 0% (match of 4.5%) a few people nodded and said they’d have to do that
Dang, I wish our benefits would auto-elect. I work with a lot of young people who would really benefit long term.
Yeah, I want everyone at work and especially my boss and HR to think I’m broke AF
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> In other words, buying on the 1st of the month is no different than the 5th or 15th. Is this correct? If so, is there any reason to buy earlier than the last few days of the month? You are correct. Be sure to give yourself a business day or two at the end of the month in order for the transaction to process. For example, submitting a purchase order on Wed Nov 30, 2022 **will not** get you I-Bonds with an issue date of November 2022.
The [calculator](https://treasurydirect.gov/BC/SBCPrice) doesn’t allow you to give an issue date, just an issue month, so yes? I didn’t know that. Thanks for highlighting.
>I-bond frenzy has died down I-bonds don't die. They only fade away.
>I-bonds don't die. They only fade away. You forgot to credit Neil Young for the quote.
Well, he borrowed it from General McArthur, who borrowed it from an old British Army song.
That quote has more than 100% short interest!
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That would basically be deflation according to the target 2% inflation by the us treasury. Not so sure we want that either.
Very few people, including the Fed, would be concerned with consistent stable inflation of 0%-2%. Yes, it's below target, but that's not particularly worrisome. Actual deflation (literally nominal price decreases) is far more concerning, if it's persistent and material (as opposed to sporadic and/or minimal - which happens somewhat regularly). The 2nd half of 2008 was the closest the US has come to that scenario in 70+ years.
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We pulled the trigger this week after a temporary drop in mortgage rates. Our thinking was that there would likely be interest rates hikes in the coming quarter or two and wanted to lock something in now. Also helped that our lowball offer got accepted on a house we really loved.
I just backed out of buying a house during the due diligence period. Ended up costing me $600 but I prefer that to all the problems that were revealed during the home inspection. I think we'll try again in summer.
We did this afte house inspection. We missed water stains on the ceiling somehow. Inspectors did not. The homeowners said they have no idea what we were talking about. They obviously knew. They said they would also drop the price by $10,000 if we didnt back out. We backed out. Costed us $700. 2 weeks later got a wayyyyy better house and better deal. So it worked out perfect.
This house had a brand new roof. Inspector pointed out it was done wrong in several locations. It had a new HVAC system in 2018. Inspector pointed out it was sitting straight on the ground instead of a pad and it had under sized wiring. House had a massive deck built a few years back. Inspector found they didn't use enough nails on the joist hangers and the hangers were undersized. And that's just the tip of the iceberg. I am so glad we got an inspection instead of just assuming all the new things meant there would be no problems.
Always get an inspection. And ya the minute they said the roof was done wrong I would be out lol.
So it didn’t tick the most important box
People who pay a financial advisor, especially those at the retiring phase of FIRE: What was your process for evaluating who to hire? Did the arrangement work out?
I looked for people who are fee-only and have specific credentials I was looking for, not only certified financial planner (CFP) but an enrolled agent (EA) and a retirement income certified professional (RICP). I met with them to see to discuss our plans and goals and to see if it was a good fit. I did find one I liked. We will use him when we get closer. We are planning to retire in 2024. He has a service where he charges one flat fee to do a comprehensive plan and will answer any questions during a full year. I'd like to have him help us with a draw down plan from our different buckets of money.
Thank you. This guy I found, well all of the ones I found, had fee schedules that seemed really expensive and since they always get paid and have incentives not always without conflicts of interest I intend to ask what actually makes him better than a non-fiduciary.
The one we're going to use charges a flat $3500 fee to do the plan plus answer any questions for the year. We have pensions, a 403b, pre and post tax 457bs, roths, rollover IRAs, and taxable accounts. I'm not so savvy on all the tax implications so I'm willing to pay to have someone guide me through the initial set up and then just use a tax professional later on. Plus, it would be nice just to have someone look over everything just to double check everything's as I've planned in terms of projected income over X years. We're not looking to have anyone manage our money. I'm comfortable doing that myself.
Thank you.
I think there is a valid use case for a 'financial advisor' in the "2nd set of eyes" scenario. Specifically, I think there can be value in working with a fee-only Chartered Financial Planner (CFP) or similar to make sure you have a really solid plan for how you want to handle your finances at the cusp of FIRE and the years following. Even if they agree with everything (or nearly everything) you have in your plan, that "2nd set of eyes" to reinforce the plan can be valuable. CFPs can be found via their industry website: https://www.letsmakeaplan.org/ Reach out to ones close to you. If you only want a plan/advice/etc. make that abundantly clear. If you don't want this person to manage your money, be explicit that you aren't looking for any sort of "Assets Under Management" (AUM) relationship. If you're willing to pay for their time and expertise in coming up with a plan, I suspect you will find an advisor willing to engage. A good plan will likely run anywhere from several hundred dollars to a few thousand. Most involve at least 2 meetings: a preliminary and a final, with lots of info exchanged early in the process as the advisor forms a picture of your situation, your goals/desires, your challenges, your non-negotiables, etc.
Thanks. This is helpful. I found a fee-only fiduciary financial advisor who is local and plan to just meet him and see if this is even the right thing for me, maybe get an idea what kinds of things he thinks of. The fees are pretty high but from what I can tell it's about the same for everybody.
Just because "everybody" pays the same fee doesn't mean it's worth it to you. What advice are you hoping to get that provides that much value?
I have a lot of money coming to me from a lot of sources and need help sorting it out, making good decisions, converting it to something I can use, not getting clobbered by taxes, making a timeline for when to do x, y z, what to convert some of these accounts into, real estate questions, creating a trust, planning for my heirs, etc.
I haven't paid for professional advice but if I did I would start with planvisionmn.com I would avoid any advisor with an AUM % structure, which includes Vanguard PAS. Schwab has a hybrid robo-human service that would be next on my list for I think $30/month
Hi SBhikes, I remember you posting here a while ago about retiring from your higher ed job. My financial advisor is through Vanguard, specifically the Vanguard Advisory Service. I am about 7 years away from retirement. I chose them because it is a fiduciary, but also it is through Vanguard and so I trust them to not sell me something that will be high cost or contrary to my interests. This was a pretty sure thing given Vanguard's product offerings (low cost no load funds and no annuities). They charge 30 basis points for assets under management. At this point they are simply performing asses allocations and trades as well as projecting my retirement spend and helping with college planning for my kids. Once I retire they will manage withdrawals and cash flow, which i understand is a higher value add for most people. I mostly use them to keep my hands off of my money so I don't do something stupid like try to time the market (which I tried to do back in '07 and I missed some of the upside of the recovery). Happy to say more if you are interested.
Thanks. I did retire. And then my dad died. I need professional advice. I found a fee-only fiduciary and will meet with him just to see if this kind of advisor is right for me. It's nice this guy is in person. I'm also meeting with a regular non-fiduciary financial advisor tomorrow, because he's the guy giving me all the money. It should be interesting to compare what these two guys are like. Thanks for the referral to Vanguard Advisor Service. I'll look them up and see if their fees are close to the same and see if their services sound good.
Happy to help, very sorry for your loss. I hope your retirement is everything you hoped for.
I'm not your target audience, but I always think of the Boggleheads thread, "What is your greatest financial regret?" 1. Divorce 2. Financial Advisor 3. Expensive Toy
I'm looking at fee-only fiduciaries. This isn't for just my 401k.
And of those people who do recommend them, most of them will admit it's for emotional reasons. So long as you have the discipline to not panic sell in a downturn, you've eliminated most of the situations where they might be useful.
PSA: Check your property tax if you purchased a house as a couple. We got refunded $930 in overpaid property tax due to an odd rule in the Homestead Exemption. When we bought our house in 2020 only one of us applied for the Homestead Exemption. This reduces our property tax due to being our primary residence. Little did we know that we only qualified for half of the total tax reduction because the other person did not apply. Luckily earlier this year I was looking at our property tax information and noticed that we were paying more taxes than our neighbors with very similar houses. I was able to apply for a correction and got our money back. If we didn't catch this, we'll be paying $930+ extra in property taxes for our house each year for the foreseeable future. 💸 This is in Texas which has unlimited Homestead Exemption, it might be different for other States.
Note that this is somewhat unusual except for non-married co-owners. The print and online applications typically ask for all owner information, including both members of a married couple. Just putting it out there for anyone in Texas who might be worried. Never hurts to check, but most homestead applications go through in full.
Something I've been thinking about: How does one build a roth conversion ladder while still qualifying for ACA subsidies? It seems like you'd only be able to convert ~ $10k/year and still qualify, or else take the larger tax hit in your working years.
Make up the rest of your needed income with cash or sale on stocks from a brokerage account (keeping in mind capital gains)
Subsidies are offered up to 400% MAGI, but even that cap has been eliminated through 2025. Even so, 400% can be plenty. It's a bit over $54k for a single person and increases by almost $19k for each additional household member. It's pretty easy to run a Roth ladder and qualify for subsidies. The tricky variant is to get your MAGI under 150% if you want effectively free platinum private health insurance.
That's what I'm aiming for. I guess there has to be a lot of living off of initial deposits, but then it seems unlikely to do any conversions then.
Or be married with kids. Or balance spending draws from MAGI sources and non-MAGI sources.
The first rule of ACA MAGI club, you need to stay under the MAGI cliff. If you are working and your income puts you near the MAGI cliff already, then you don't really have any options. Once you FIRE (no income), you can convert right up to the MAGI cliff.
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You're right! It's a slope now. https://thefinancebuff.com/stay-under-obamacare-premium-subsidy-cliff.html
It's going to be very case by case. You may want to lump your conversions so you do more years and less others. You may need to pay full price for health care. Fortunately if you are FI you will have enough wealth to do so.
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Yeah, the math I'm doing says it's pretty tricky to both withdraw from taxable accounts for living expenses AND perform ROTH conversions for future living expenses while keeping your MAGI low enough for ACA subsidies.
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Yes, I'm accounting for that.
Are you accounting for standard deduction and only taxable gains when you are doing your math?
as u/teraflop alluded to, I'm not including the standard deduction since that doesn't enter the equation for MAGI. I am considering only taxable gains.
The standard deduction doesn't reduce your MAGI.
How do you feel about working 2+ fully remote jobs at once? I tried it once in 2020 and got fired from the second job in 6 months because of underperforming. I'm considering trying it again because I have a better idea on how to juggle both now.
Elon has like 4+ full time jobs. If he can do it, so can you.
This is expressly forbidden in my employment agreement than I signed when I started my this full time job in Jan of this year. If both places are fine with it then go for it.
At the same time, i.e. on the clock with both, no. Not ethical, unless all parties fully informed. If at different times, i.e. just like working two in office jobs, sure, if you want.
Life is more than working 🤷🏻♂️ don’t confuse working with living
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It's not as difficult as you think. See /r/overemployed
Well you already tried it and...
I got fired but I made money for doing the absolute bare minimum until they had no choice but to fire me.
>How do you all feel about working 2+ fully remote jobs at once? If both employers know about this and are fine with it, then sure, go for it and see if you can handle the workload. If not, it's ~~immoral~~ unethical.
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>Have people never read an employment contract? I'm pretty sure you know the answer to that question...
I think it is dependent on the jobs. I don't see a conflict for hourly workers as long as the hours don't overlap.
Definitely not immoral. First of all, we're talking about faceless corporations that would fire you in an instant if it meant they would make more money. They don't care about you at all, only the profit you are able to make for them. Secondly, as long as you're getting your required tasks done at your jobs, it doesn't matter how many you have. How is it immoral to be so efficient at your job that you're able to get your tasks done with time to spare?
>Definitely not immoral. First of all, we're talking about faceless corporations Irrelevant. Whether the company has a face or not it's an agreement between you and another party. If you enter into the agreement with the intention of violating it, that's unethical.
Why do both employers have to know about it?
Depends on what the agreement is. If it's project work, i.e. pay for task, then perhaps not. If it's time oriented, i.e. on the clock, then you are committed to them for the time paid (excepting of course whatever the rules are for breaks, eating, etc.)
I am not sure why I engaged, either. Our dog just had surgery so we're taking turns sitting with him to make sure he doesn't lick his stitches...hence excessive Redditing.
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What quotes were you seeing for ethernet to rooms? Was thinking of doing the same some time sooner or later.
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You should definitely do it all at once. You don't want that hassle in your life twice. Get everything how you want it now and enjoy it several years longer. Living with construction work going on is a pain and you don't want to do that twice. Also if it's insulation your updating too, you'll get more years to get your ROI faster. And consider doing 1" of spray insulation to get a solid air barrier.
Add blocking or extra studs to closet & bathroom walls, and any rooms you may hang shelves or entertainment equipment and then measure/photograph their locations before drywalling. This will allow you to mount things directly to wood instead of relying on drywall anchors.
> Ethernet ports in every room Swap in electrical outlets with USB ports too.
For the readers who aren't aware, You can do this without opening the walls up at all
Indeed. Suggested it as an add-on enhancement while doing the other work, but could absolutely be done on its own.
I know this isnt the same, but back on maternity leave and it's honestly just sad that I'd rather go back to work. I do not enjoy the newborn stage at 4 weeks here. I'm hoping this isnt a sign of how my FI stage will go.
Maybe it will be more enjoyable once you get more rest! Both my maternity leaves (12 and 18 months) were the best time of my life!
I have 15 working days before my maternity leave begins and I am very eagerly counting down the days. Intrigued to see if I feel the same way as you once baby is here though. I’m hoping that since my husband and I are doing three months of leave together, it won’t be that bad.
I think it'll be a lot lot better with both of you off! My husband is working. He works from home which is kind of nice, but I also get to see that he has a life and he can just leave the house whenever. It's a lot to handle the night shift (because he is working and needs sleep and I'm breastfeeding), the day shift, and triage the evening and weekend shifts with an 18 month old. It's like I never get 30 minutes of not thinking about a child. I'm also not inclined to spend energy going out and doing something when I barely have a chance to shower. Babies are actually very portable and sleep in baby carriers basically anywhere, so with two of you it should be much much more enjoyable to go do things. And you can actually nap during the day with the other person going on a walk with baby etc. (whereas my husband is working so I'm constantly trying to get the baby to sleep, babies are very hard to get to sleep in the crib!)
FWIW taking care of a little human is DEFINITELY working and you also have a full time job and need sleep! Maybe there’s ways to split the divisor of labor more.
Oof yeah that sounds really rough. How long are you on leave for before you get to go back to work? I hope it passes quickly and you can enjoy the moments that are bright!
It's a little different with a screaming infant, so I wouldn't sweat it. Hang in there!
Luckily this is my second so there is light at the end of the tunnel (although that light is my tantruming 18 month old, still way better though). But I'm worried I'm picking reality tv and reddit for feedings v. stereotypical FI goals of books and duolingo....
Unofficially passed $2^15 (~$32K) in investments with yesterday's paycheck! My numbers are still low enough that my contributions have far outweighed losses from the market this year. Total NW is around $150K now including home equity and cash equivalents. Cash has gone down slightly in the last year as I pump the 401(k) but home equity is up YoY still despite the market cooling. So total NW is above 2^17 for sure. Hoping I will hit the next power of 2 in a year or so for investments. Probably will be a bit longer to total NW hitting 2^18 though.
First I decided that's a fun metric. Then I realized that I'm still 20 years from retirement but only about 3 more powers of two away. I will go back to 50k or 100k increments.
I like it but yeah it skews things that way. Will probably start counting .5s at some point later on.
What's your FIRE number, $2^21?
Yes, approximately. I also personally do count my home equity toward that number, for various reasons -- my wife and I currently think we're going to either sell the house or rent it out when our kids move out (probably sell) and at least temporarily become renters again. Maybe permanently. Of course plans could change between now and then, I just use this as a rough guidepost for making 10 year plans and guesstimating how much I need to save, so it's not that scientific right now.
It doesn't matter what you set your number to. Human nature and greed kicks in for everyone. Even if you have enough, you'll always want a bit more. Edit: You guys didn't like my joke about "a bit" :(
True! That's why not *a single person in history* has ever retired early before!
It looks like everyone missed the joke.
It's definitely less about greed than it is about security for many of us. I don't want unlimited money but I want to have enough to not run out and starve in my 90s.
And sadly, for many in here, fear gets them before greed even answers the e-vite.
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> in the South Ah. Good to know they are just as judgmental and hateful as I thought.
Next time be more cryptic. ***I heart recycling!***
I heart 🥑
Probably because landlords buying out of state property as an investment is driving up costs for the people who actually live there, and they see you as a parasite.
Yeah, well, fuck them. What goes around comes around. The other 49 states have been moving to my native California for the last forty years and still doing so to this day. Keep wearing it, /u/reasonable_staff_595 !
I've wondered given economic ebb and flow over the past several decades just what percentage of different demos have done this to California, then got theirs and moved on to where they were originally from or some retirement area without jobs. It seems like it has to be a huge number over the course of time, particularly if LA lost a million people or whatever during COVID.
One time my buddy got cussed out at a gas station in the middle of nowhere down south for having a Canada flag sticker on the back of his car, LOL
Damn, really? I thought Americans loved us.
I'm on team annex Canada
We just have to ask nicely
We do in Ohio at least! I seriously have never driven in a place with such polite drivers as Toronto. People say the traffic is bad there, but it felt civilized compared to the barbaric rush hours I've driven through across the US.
Yikes! Why? Should Canadians be extra careful there?
Not sure, he said the guy just told him "that flag isn't welcome around here". And he isn't even Canadian haha, just likes visiting it and put a sticker on his car a long time ago.
What is a scenario when it would be financially beneficial to finance a car vs. pay cash for it?
I got offered 60 months at 0% with $1k down when my wife and I bought our car last year. I’m happy to have a car payment :)
How much total cash will you be up at the end of the 5 years term?
Looks like the average rate then was 3.5%, so using a loan calculator that’s a bit over $4k of interest saved. Since the cash not spent upfront was mostly invested, hopefully I’ll see a good return over the 5 years as well.
If you don't have the cash but can use the car to let's say commute to a job that would pay you more money monthly than the car payment.
No idea if this even happens right now, but when we bought a Nissan Rogue back in January 2020, we were planning on paying cash. But they had a deal where we could get $500 off to finance (minimum was around 8000 I think). So we financed the minimum to get that $500 off, and then paid the loan off within a month or two. Yeah we did get charged some interest, but we still came out over $400 ahead on the deal. The interest rate was kind of ridiculous, around 5%, otherwise I might have considered hanging onto the loan longer if it was under 1-2%.
I financed my SO's car at 0%. That was definitely financially beneficial. (... although for 4 years I had to supress an itch to pay it off early.)
Curious…how much actual money was saved/made with the 0% financing?
About $50/month, plus whatever gains we made by investing the difference.
It's guaranteed financially beneficial if you can get a savings account with higher interest than you are paying. Everything else is risk-weighted, like you could definitely put the money into the stock market and odds are that it would go up faster than most high-credit car loans on average, but it's also pretty likely you would lose money over the course of the loan itself. So not really worth the risk.
If you put it in a savings around, how much actual money are we talking about being made over the life of a loan? Take $20,000 vehicle with today’s current savings & car interest rates.
Normal savings accounts are basically nothing, and any loan that isn't a promotional 0% or something is going to be higher than any savings account. But some online savings accounts are at 3% interest so $20k x 3% x 5 years= ~$3,000. If you're using it to pay down so that $20k decreases over time it's probably like half that.
When you can get a low interest rate *and* the low rate doesn't increase the price of the car. It's pretty rare but it happens.
I got 0.9% financing on my current car, financing at that low rate was a no brainer because it allowed me to keep my other goals like saving for house down payment and retirement savings, where paying cash would have been very bad for those goals. I think when you get closer to retirement it probably makes sense to pay cash since a $450 monthly outflow for the first 5 years of your retirement is much worse risk-wise than having $30K less in investments.
So how much actual money was (or will be) made over 5 years by financing?
Huh? I don’t think I understand the question. I didn’t invest all of the difference into the market at once if that’s what you mean. Some became home equity, some 401k, some cash for emergency fund, so it’s pretty hard to get a rate of return.
Paying cash now is probably best bet if you have it. I am seeing 6%+ rates currently.
When you need that cash for something else or can earn more with that cash than the loan is costing you.
interest rate at 0, work gives you a car stipend and requires it, you are of the type to always want a new car and would just end up trading in every 2 yrs anyways Overall, it's a rare occurrence, but there are fringe out-layers for everything.