Thanks, Lol, I am still not looking for advice. I have lots of hobbies to look forward to. The issue, as I previously stated, is the psychological challenge of living without a salary.
I want to achieve financial independence, and (maybe) retire early! The FIRE thread
- Thread starter Scotttheking
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Once again, still not looking for advice, still looking for a hug.
You are not understanding what I am saying. I am on track to make my retirement number. Money is not the issue. My issue is adjusting to not having a salary and the idea of living off my investments, in the face of known unknowns.
FIRE as a target is often the motivator for years of work and saving but then one day, poof, it's gone. I know that I will have difficulty transitioning to a non-work, non-saving mindset as well. It's not just losing that identity that comes from a job (especially in America where the first question people ask is often "What do you do?") but it feels like budgeting will be harder - everything you spend comes from what you already have vs. spending/saving what is coming in. Instead of watching a number grow, you start watching it go down. I'm sure that will cause some initial anxiety.
It helps to see MTM profit as income. Spend less than what you earned = portfolio grows, nbd. Spend more than earnings, in worse years = ouch, and that pain helps with spending flex. Replace intercontinental trips with driving, less sushi, every bit helps.
Even before retirement I see it that way. Some crazy years I earn more on the market than by working and it will only happen more often later on. Then reducing time spent working / earning will not feel like that much of a loss.
Monarch Money says my NW is up $24k this month. It’s probably a bit more because it’s missing my wife’s ellevest and insperity is crap.
I don’t think watching that number is super helpful? It’s unrealized and I’m not about to sell. So that means it can go down. Potentially by a lot, and there’s nothing I can do about it.
It’s not profit. If it’s a useful proxy for you, great! I also think it’s useful, but it’s not apples to apples. Retirees will need to draw down even when the market is way down.
I don’t think watching that number is super helpful? It’s unrealized and I’m not about to sell. So that means it can go down. Potentially by a lot, and there’s nothing I can do about it.
It’s not profit. If it’s a useful proxy for you, great! I also think it’s useful, but it’s not apples to apples. Retirees will need to draw down even when the market is way down.
I have a friend who has half his net worth in Tesla stock. He had a pretty good run until a few months ago. He loves to pull out his phone and flash his net worth. I always remind him it's an unrealized gain until he sells it.
I tell people this about my house - real estate went crazy after I bought (along with "and I also have live somewhere")
Gambling is fun when you're up!
It's helpful to know if you are on target. Upon retirement most of your portfolio will be unrealized gains. You still need to work to a # to know if you can cover your expenses.
As I get closer to retirement the # I focus on is
# of months of expenses in bonds. The closer I get to retirement, the closer I want that # to be to 60+. That way if there is a 5 year market downturn I don't have to sell any equities.
This is my neighbor. Huge Elon fan boy, half his money in TSLA, two kids in college and one heading there next year. And he got laid off a couple months ago. Like hanser says, gambling is fun while you're up, but duuuuude
![:\](https://cdn.arstechnica.net/civis/data/assets/smilies/slash-1x.png "Slash :\")
(Oh and his personal jr. stock analyst projection calls for TSLA at 700 by mid-year, in case anyone wants to trade on some random tech sales guy's advice)
To me there is a gaping chasm of downside. Lots of competition. No new car products. Trying to turn a car company into an AI company. The world hates him. And he's off playing other games. On the the plus side, there are lots of fawning fan boyz pushing the stock up.
Stock people love to project numbers. No one holds them accountable. If they believed their own numbers, wouldn't they already be rich?
This might be a silly response, but... If you're feeling uncomfortable with not having a recurring paycheque... Give yourself one? Set the accounts up so that a paycheque shows up on a normal cadence, and it feels the same... Just without the work bit.
You watch it over a longer period, of course. If annually, every year you "earn" more than you spend, you're fine.
Monthy numbers say nothing indeed, could be gone by the next, I'm up 4% YTD and it sure won't be 4% x 12 by 2026.
It's been a few years since I've retired, so hopefully anyone I worked with has forgotten me, so I'll comment on my early retirement. (If you recognize me, hi!)
I retired a few years ago at 55. This was greatly facilitated by being able to move to Malaysia via their TalentCorp program that my wife qualified for, as she's a Malaysian citizen (which also got me a PR). There are many reasons I like being here, and for retirement reasons one of the biggest is super cheap health care, even if you go to private hospital and pay out of pocket. I qualify for gov't healthcare, so if I don't want to pay, it's super cheap to use a gov't hospital.
I'm always impressed how many posters here are managing their funds, doing planning, etc. We only have 401k's and they are managed so we don't have to do reporting stuff for my wife (who was a MD at a financial firm in SF). My wife's income, plus me finally deciding to take a job where I'll really get paid put us in a position to say 'fuck it' and move in Feb 2023. Selling a house in the SF Bay Area didn't hurt either. I came to the realization that I was done with working after my mom died in 2021, after a short battle with cancer. We have no kids, and the only family I have left in the US is my brother.
Our forecasting is a simple spreadsheet, with a few variables, all using present-value for stuff (we're just assuming that all of our gains will match inflation, and that's it). FX risk is probably my biggest really-long range concern. I have enough assets in Malaysia now to mange things for a while, but big swings in the exchange rate just leave us with less cash in 13 years when I turn 70 and start withdrawing 401k. But stuff is cheap enough here, we could certainly live on small income if needed. ($1k-$2k/month)
For those interested in retiring here, Malaysia has fixed their MM2H program a bit (Malaysia My 2nd Home), it just requires a $150k deposit and buying property worth at least $140k. (and you can take up to half the deposit to pay for the property, medical, or tourism in Malaysia). Probably not the best program if you really wouldn't be able to return to your home, as it is a renewable pass and not a PR (unless you drop $1MM into the account).
I retired a few years ago at 55. This was greatly facilitated by being able to move to Malaysia via their TalentCorp program that my wife qualified for, as she's a Malaysian citizen (which also got me a PR). There are many reasons I like being here, and for retirement reasons one of the biggest is super cheap health care, even if you go to private hospital and pay out of pocket. I qualify for gov't healthcare, so if I don't want to pay, it's super cheap to use a gov't hospital.
I'm always impressed how many posters here are managing their funds, doing planning, etc. We only have 401k's and they are managed so we don't have to do reporting stuff for my wife (who was a MD at a financial firm in SF). My wife's income, plus me finally deciding to take a job where I'll really get paid put us in a position to say 'fuck it' and move in Feb 2023. Selling a house in the SF Bay Area didn't hurt either. I came to the realization that I was done with working after my mom died in 2021, after a short battle with cancer. We have no kids, and the only family I have left in the US is my brother.
Our forecasting is a simple spreadsheet, with a few variables, all using present-value for stuff (we're just assuming that all of our gains will match inflation, and that's it). FX risk is probably my biggest really-long range concern. I have enough assets in Malaysia now to mange things for a while, but big swings in the exchange rate just leave us with less cash in 13 years when I turn 70 and start withdrawing 401k. But stuff is cheap enough here, we could certainly live on small income if needed. ($1k-$2k/month)
For those interested in retiring here, Malaysia has fixed their MM2H program a bit (Malaysia My 2nd Home), it just requires a $150k deposit and buying property worth at least $140k. (and you can take up to half the deposit to pay for the property, medical, or tourism in Malaysia). Probably not the best program if you really wouldn't be able to return to your home, as it is a renewable pass and not a PR (unless you drop $1MM into the account).
I remember you retiring there. What are the downsides to living in Malaysia compared to the US? Like... for me as a white dude who speaks only English, I don't think it would feel much like home. But if you were ensconced in the culture a fair bit already, what are the negatives, if any?
Hanser and Hap, if you want to discuss the financial "how-to's", then that's fine for the BR. Otherwise, these are questions better suited to The Lounge.
Might be worth a separate thread. I'd be very curious about the immigration and tax implications, financials pros and cons of various localities.
I am definitely not going to look at my portfolio this week. Nope.
Meh, I take the opposite approach. I look at least every month, and I know there are months I'll make six figures, and months I'll lose six figures. Honestly, the past month hasn't been that bad. If you're holding a diversified portfolio including all-US, ex-US, and bonds, anyways. If you're 100% US large cap, I guess it's worse. Still maddening that it's all inflicted by Trump, but the last week is not really that out of the ordinary.
I am absolutely diversified. And so I don't need to look at it when I don't feel like it. How many months of gains erased? Maybe whiplash economics will spur some independents to vote in the mid terms.
Well one part of this is taxes. If you're a US citizen you have to file taxes no matter where you live in the world.
Which means that you need to file taxes twice a year. Once for the US, and once for the country you're living in.
That can make some things a bit annoying if the tax years don't like up. For instance, in Australia the tax year is July -June, which means all the tax documents you get from banks don't match up with the US tax year. Which can make it just a bit more work to calculate what you made in the US financial year.
Additionally, at least in Australia, there is an equivalent to a 401k called superannuation. I'm not exactly sure how this works out when you withdraw money from that, but it's taxed at a smaller percentage in Australia. However the US might see it as regular income, and so you'd have to pay extra taxes on money you wouldn't have needed to if you weren't a US citizen.
Superannuation is likely covered by the US/Aus tax treaty, and treated equivalent to a 401k. I know the CAN/US Tax treaty treats our RRSP system this way.
I think the biggest challenge for us is going to be psychological: keep buying over the coming period. We don't need a bigger cash cushion. Our incomes are relatively safe & secure. My wife's a tenured teacher, and I'll be the second-to-last person let go if the company fails (sales are 
so not really a worry right now).
I REALLY want to increase our cash position by like $25K, but there's objectively no reason to since we can live on a single income if worse comes to worse. We're just not going to spend a bunch of money on the house this year while there's a lot of volatility, which really just means "buying opportunity".
So like, 5 years from now, this could be an opportunity to make big gains, but it still feels very precarious. I am a little bit glad we're not on the verge of retirement. This is all so pointless and unnecessary. There's no "promised land" on the other side of this bullshit.
so not really a worry right now).I REALLY want to increase our cash position by like $25K, but there's objectively no reason to since we can live on a single income if worse comes to worse. We're just not going to spend a bunch of money on the house this year while there's a lot of volatility, which really just means "buying opportunity".
So like, 5 years from now, this could be an opportunity to make big gains, but it still feels very precarious. I am a little bit glad we're not on the verge of retirement. This is all so pointless and unnecessary. There's no "promised land" on the other side of this bullshit.
As someone months away from retiring, I'm not enjoying it, especially the risk of stagflation and the government not doing anything sensible in response.
As I just posted elsewhere:
Even if all the bullshit stopped today, I have my doubts that the USA will avoid a massive recession if not a true depression. Atlanta Fed switched from predicting >2% GDP growth in 1Q to predicting negative GDP growth in 1Q. They issued a -1.5% projection on February 28th. As of March 6th it was -2.4%. The next projection is supposed to come out March 17th.
https://www.atlantafed.org/cqer/research/gdpnow
Even if all the bullshit stopped today, I have my doubts that the USA will avoid a massive recession if not a true depression. Atlanta Fed switched from predicting >2% GDP growth in 1Q to predicting negative GDP growth in 1Q. They issued a -1.5% projection on February 28th. As of March 6th it was -2.4%. The next projection is supposed to come out March 17th.
https://www.atlantafed.org/cqer/research/gdpnow
I follow a "tolerance band" based rebalancing strategy, from this paper: "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" (PDF here). Basically if any assets are 20% (relative) above or below my target allocation, I'll buy/sell to get within 10% of my target. I'm currently targeting 40% US stocks for example, recent market corrections have reduced that to 38%, if it goes down to 32% I'll sell an overvalued asset class so I can buy back to 36% (in round numbers).
That paper and some followup literature that elaborates the concept show that "tolerance band" or "momentum" strategies have slightly better risk-adjusted returns than periodic annual/quarterly rebalancing.
Personally, it gives me permission to peek at my portfolio as often as I want, and get that little dopamine hit from buying low/selling high by "locking in" returns from a bull market or "buying stocks on sale" in shit markets. I'm doing all my trades in my Vanguard IRA so there's no actual cost besides the few hours I've spent setting up and revising a spreadsheet. However I'm a decade or two from retirement, we'll see how well this works for me personally when my actual retirement income is on the line.
I’ve been pondering the reemergence of stagflation since January. That was not on my 2025 bingo card.
Atlanta is the only branch predicting that big a swing right now, but I tend to agree with the overall thesis. I just think it might take another quarter or so to get there. There are still huge parts of the country that think it’s party time.
In my sector (banking), the more sober banks are like “But gutting the CFPB is actually bad?” Wells probably having a dance party tho. The others are starting to look at low hanging fruit to cut in preparation for the back half of this year.
I think this is what makes me think it's unavoidable - at this point businesses will brace for it, and cut costs, both labor costs and other spending. News reports indicate that's already started. It will become a trend, and we'll have unemployment numbers up (U6 is already up, which means U3 is likely to be up soon).
I agree with the basic sentiment, which as I understand it is to spend less than you earn and save portions of raises, and it's true that you'll be technically saving more, but that's not what's relevant, right? What matters is whether progress toward goal is accelerating slowing or stable. But if my income goes up at 10% PA, and I increase my spending by 8% PA, depending on where I started in the distribution of saving and spending I could be pushing my retirement date out rather than bringing it closer.
Oh that was totally on my bingo card, once trump got the win, the US got the loss - totally foreseeable low growth and high inflation.
What is annoying is trying to figure out what rates will do.
That's why I'm staying short term. I'm not smart enough to know what rates will do.
Today bought a corp matures in 2 yrs @ 5.54%, and a 3 mo t-bill @ 4.3%
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OrangeCream
Ars Legatus Legionis
Technically there is a point where lifestyle creep prevents you from retiring.
If your current lifestyle spend is $80k, then you need to save $2m, and raises will accelerate you towards that. If you make $100k after taxes then assuming 2.5% inflation and an average 7.5% return you should only need 30 years to hit that number. If however your spend rate doubles to $160k you now need $4m, requiring you to invest $40k a year, or in other words you need to be earning north of $200k to fund that lifestyle. If your spend rate only goes up 50% and you’re earning over $200k then the extra earnings can be funneled into brokerages and IRAs to both reduce taxes and accelerate retirement. Rather than retiring after 30 years you can shrink the time to 25 or fewer years. Alternatively you only need to make around $160k to retire in 25 years on an estimated $80k spend.
Oh I am with you...I am looking at the ladder and need a 3 year to slot in. I am not dying to buy 10 year which is kinda the standard issue in bond land.That's why I'm staying short term. I'm not smart enough to know what rates will do.
Today bought a corp matures in 2 yrs @ 5.54%, and a 3 mo t-bill @ 4.3%
I forget where I read it, probably some FIRE blogger, but as an approximation putting 50% of pay raises towards savings and 50% consumption should maintain or slightly speed up a target retirement date, while allowing for some lifestyle inflation. Obviously the exact math will depend on a lot of personal circumstances, particularly current retirement, but it's a good place to start.
Every time I've had a significant raise I've done the math to bump my savings rate to make sure my target retirement date will move up, even including increases in consumption.
One of my "favorite" features of a PFM like Monarch is getting see daily how much my NW is cratering on a month-by-month basis. Such a helpful visualization! Even better when it's, like, a significant fraction of my yearly base salary.
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Is this any different than the advice regarding brokerage accounts of "don't look"?
More seriously, though, I think Monarch allows you to rearrange the dashboard to hide the net worth widget or move it lower.