The Intersection of FIRE and Disney

[SouthFayetteFan]

A very well written blog article by Pete in the divorce of MMM and his former mrs. (with surprisingly minimal profanity by MMM standards for those like me who have a distaste for that).

https://www.mrmoneymustache.com/2018/12/31/divorce/

I am saddened by any divorce and hope that things continue to go well for their son.

 

[SouthFayetteFan]

Discussion Topic

A common theme that occurs on r/financialindependence is discussions about who knows you're pursuing FIRE (i.e. family, friends, co-workers). Of course in it's normally "bro-tastic" fashion, most of the discussions there devolve into something that a normal human would not enjoy participating in, LOL. So interested to hear from my DIS-FIRE friends...who knows about your passion for FIRE and why/why not?

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I have exactly ONE co-worker who knows what I'm working towards. If you weren't already aware, I'm a corporate banker. This co-worker and I work closely together on most of our deals and is somebody I would truly want to befriend even if not in a forced work relationship. I also happen to know his goal is to own his own small/mid-size business someday so we are pursuing similar goals in some respects. Other than him, I do not believe that any of my other close co-workers have a hint of what I'm pursuing.

My boss DEFINITELY does not know...I actually think it would be career suicide to tell him because I think it would affect my raises and discretionary bonus (I truly think I would receive less than others and judged to "have enough). Meanwhile, I attempt to keep up appearances as the sole income of a household of four and most people (including my boss I believe) will assume that means debt/consumption/struggle/poverty...

My dad is very aware of my goals. We speak frequently about it - but he's amazing and my best friend of sorts. My sister and mom are thus also somewhat aware since it comes up from time to time.

Other extended family and in-laws are entirely unaware. I've never discussed it with any other friends either. I just think it could set me up for judgment. I'm certainly viewed as cheap by many while in my mind I just place value on different things than others. IF I actually do the RE part of FIRE, I basically plan to tell people I'm working for myself now as a consultant. It's just virtually impossible for the average human to understand how somebody could save enough money and walk away willingly from a high paying job in their 40's (or sooner). AND I've heard too many stories of people who then tried to explain what they did and they are either judged as lucky, or seen as a source of money by their family/friends...and I don't want to become that.

So how about you guys - any thoughts on this topic??

 

[QueenIsabella]

We don't discuss our finances outside our family, and even then, not with most of our family members.

In my case, I have 2 brothers and a sister. One brother has been a drug addict for decades. Nice guy, but he'll steal anything he can pawn. The other brother is an outright mooch who thinks the world owes him everything. My sister is a lovely person--she is in the same frugal camp that we're in. A few years back, when she and her DH got a 7-figure medical settlement, she sent me a snail mail letter to tell me/ask advice, because she didn't want our brothers to find her trail. She and I don't discuss net worth, but do have debates on investment vehicles, etc.

For my DH, he has one brother. When their mom died, they were really good about splitting the estate 50-50, no arguments. So obviously, BIL knows how much we inherited. But, he didn't know that our net worth was 7 figures before that. We have to be careful there--BIL is older and thinks he knows a lot about investing. He's more of a schemer/market chaser, rather than a solid, informed investor. I know he hired a financial planner after he got the inheritance, and he hopes to retire soon (he's 58). I hope it works out for him, but we really don't talk specifics--it would be interpreted as bragging, I'm sure.

 

[Haley R]

We don’t really talk about our finances with people. We talk about cc choices and points earned with others but not much beyond that. Since we are still pretty young I don’t think we’ve really decided what age we would like to retire. I currently sub so don’t have a full time job but Dh has a great job. I’m lucky he is okay with me keeping the position I have right now. We have a financial advisor and I would say he’s the only one that knows everything we have. My parents don’t even know how much money Dh and I really have. It just seems like an awkward thing to bring up although my parents would be great about it.

Dh’s family is a different story. He has 7 brothers and sisters and his parents. None of them are in great financial standings. MOST of them think the world owes them everything and complain about petty things like who in the family is getting more Christmas presents or help from dh’s parents. Obviously we don’t ask them for help but the majority of his siblings still receive money from them for everyday expenses and they are well out of college. I would not feel comfortable AT ALL sharing our financial situation with any of them. I know for a fact they would try to take advantage of it and Dh is too nice to say no.

 

[Cruising Engineer]

We don't discuss our financial position with anyone, including family and close friends. Both sides of our families are smart with their money so I guess we're about equal in that we save, save, save. If a family member is suddenly in need, we all pitch in and help. Some time ago my newly married nephew with his family (one baby) purchased their first house. Even with a home inspection, including the "interior" of the fireplace/chimney, within a year, bricks were falling off the 2 story exterior chimney. An $8000 repair. Everyone pitched in and it was properly fixed. Both side had the same philosophy that kids work when they are old enough to need extra money. University tuition/books was paid for all the kids, but they had to work to pay for room, food, and transportation (around campus/city), etc. Everyone has turned out great with an engineer, accountant, and a pilot with great paying jobs and tight wallets.

 

[WVMomof3]

I have spent the last few days making spreadsheets and trying to get more financially organized. I started using Mint over a year ago and it is almost what I want, but not quite. I think just using spreadsheets is more what I need. I feel more in control of categories and manipulations that way. Now to set some goals.

We don't discuss finances with family. I believe we are doing way better than any of my siblings, and I like DHs siblings thinking we are not doing as good as them. We may or may not be, not sure. Definitely feeling the "sandwich" crunch with 2 in college and trying to help out DHs parents though. I think the next few years will not be good saving years for us. DHs parents are living off SS alone, I am pretty sure zero savings. I don't think they could make it without occasional help and they are still were DH and brothers grew up and none of the kids are close in distance. Makes it tough.

 

[Deffenm]

Thanks for all the advice on groceries. I am going to strive for $800 budget in Jan.

DH and I discuss our plan and goals. I did share with family members that I was losing my job in March since it happened before the holidays. It helped explain why we were cutting back on the gift giving.

 

[1st*toright]

Discussion Topic

A common theme that occurs on r/financialindependence is discussions about who knows you're pursuing FIRE (i.e. family, friends, co-workers). Of course in it's normally "bro-tastic" fashion, most of the discussions there devolve into something that a normal human would not enjoy participating in, LOL. So interested to hear from my DIS-FIRE friends...who knows about your passion for FIRE and why/why not?

**********************************************************

I do talk about budgeting (and my love affair with YNAB) to other people, if the topic comes up and someone seems interested. Its usually in the context of my husband's career change from a job that paid $$$$ to one that pays $, and how budgeting makes it possible for him to do a job he loves instead of one he hates. I don't talk about specifics, or how much we've saved, or any goals beyond saving for college. Just too personal. My family doesn't really talk about money - all my siblings live comfortably, but have made very different choices about lifestyle and geographic location, so we don't really poke our noses into each others business. Its not something I would discuss with coworkers either - again, I'm just a pretty private person generally.

I will say that we aren't super hardcore about the frugality stuff, either, so while we dress our kids from thrift stores, these thrift stores are in a pretty upscale town, so they are wearing the same brands as everyone else, just a year or two older. We drive small, older cars, but currently they are pretty respectable looking (unlike the 1995 Geo my husband drove until about 2012 that had both bumpers held on by duct tape...)

This is one of the reasons these boards are so great - I do enjoy being able to have frank discussions about how everyone is approaching this stuff. Its fascinating and educational!

 

[1st*toright]

Thanks for all the advice on groceries. I am going to strive for $800 budget in Jan.

DH and I discuss our plan and goals. I did share with family members that I was losing my job in March since it happened before the holidays. It helped explain why we were cutting back on the gift giving.

The grocery stuff is a constant work in progress for me. Its so easy to overspend. I found that planning meals around using up what I have made a big difference - I keep a list of what is in the fridge that needs to get used up, then start my meal planning around that. Then I consult my list of what is in the freezer and what is on sale at the grocery store to fill out the week. I also keep a "hit list" on a white board of leftovers/veggies/fruit that need to get eaten, and DH and my teen will consult that when looking for lunch/after school snack. There are lots of meals we like that are not particularly spendy (veggie omelettes for dinner, tofu stir fry, lots of homemade soups) so I try to be sure that one or two of those are on the menu each week.

ETA- there is a thread on here called "Eat at Home" which is a group of people who are trying to cut down on eating out - everyone posts their weekly menus, and it has given me some great ideas for inexpensive tasty meals (keeps me out of a dinner rut!)

 

[speedyfishy]

I need advice. Trying to determine if we should max SOs 2018 Roth IRA. We have the fund but it will leave us with an emergency fund of four months of expenses. If we don’t max it out we will be left with 6 months of expenses. I’m an anxious person and SO is the only one that is currently employed but he is in a high demand field (software engineer) but is four months really enough? I guess we would be closer to six if I count all the giftcards im floating in the EF. I really want a years worth of expenses in the EF which we will try and hit this year. Am I ok to just max it?

 

[georgina]

I need advice. Trying to determine if we should max SOs 2018 Roth IRA. We have the fund but it will leave us with an emergency fund of four months of expenses. If we don’t max it out we will be left with 6 months of expenses. I’m an anxious person and SO is the only one that is currently employed but he is in a high demand field (software engineer) but is four months really enough? I guess we would be closer to six if I count all the giftcards im floating in the EF. I really want a years worth of expenses in the EF which we will try and hit this year. Am I ok to just max it?

IMO the Roth IRA is such a great deal it should be maxed. Once the 2018 contribution window is gone, you've missed that opportunity. I'm pretty sure you can always withdraw your Roth contributions (not earnings on it though) penalty-free.

From the nerdwallet site -
"Because you already paid taxes on the money you’ve contributed to a Roth IRA, you can withdraw your contributions any time, without penalty.

The key word there is contributions — the money you put into the account. Different rules apply to your investment earnings"

So, if you had an emergency and needed those funds you could get them back out!

 

[SouthFayetteFan]

I need advice. Trying to determine if we should max SOs 2018 Roth IRA. We have the fund but it will leave us with an emergency fund of four months of expenses. If we don’t max it out we will be left with 6 months of expenses. I’m an anxious person and SO is the only one that is currently employed but he is in a high demand field (software engineer) but is four months really enough? I guess we would be closer to six if I count all the giftcards im floating in the EF. I really want a years worth of expenses in the EF which we will try and hit this year. Am I ok to just max it?

What marginal tax rate are you in? If you're in the 10% or 12% I'd pay those taxes now in a heartbeat and max that roth...

 

[AmyAnne]

I need advice. Trying to determine if we should max SOs 2018 Roth IRA. We have the fund but it will leave us with an emergency fund of four months of expenses. If we don’t max it out we will be left with 6 months of expenses. I’m an anxious person and SO is the only one that is currently employed but he is in a high demand field (software engineer) but is four months really enough? I guess we would be closer to six if I count all the giftcards im floating in the EF. I really want a years worth of expenses in the EF which we will try and hit this year. Am I ok to just max it?

Don't you have until April 15 to decide?

IMO the Roth IRA is such a great deal it should be maxed. Once the 2018 contribution window is gone, you've missed that opportunity. I'm pretty sure you can always withdraw your Roth contributions (not earnings on it though) penalty-free. Check the rules.

I agree with this -- the Roth is a great but time-limited opportunity.

 

[QueenIsabella]

I thought you had to wait 5 years before withdrawing your original Roth contribution.

In any event, I feel it's still worthwhile--especially if you're in a fairly low tax bracket for 2018. If your SO's job is secure, you can work towards rebuilding the emergency fund to a more comfortable level over the next several months. I don't think a 4-month cushion is too bad to begin with, but it's your personal comfort level that counts for this.

 

[speedyfishy]

What marginal tax rate are you in? If you're in the 10% or 12% I'd pay those taxes now in a heartbeat and max that roth...

22%, the IRA deduction income limit is for total gross income or adjusted gross income? Idk if we can get the deduction.

Don't you have until April 15 to decide?



I agree with this -- the Roth is a great but time-limited opportunity.

Yeah that’s true I can wait until April and try and build up the EF.

 

[SouthFayetteFan]

I thought you had to wait 5 years before withdrawing your original Roth contribution.

In any event, I feel it's still worthwhile--especially if you're in a fairly low tax bracket for 2018. If your SO's job is secure, you can work towards rebuilding the emergency fund to a more comfortable level over the next several months. I don't think a 4-month cushion is too bad to begin with, but it's your personal comfort level that counts for this.

I think that's something with Roth 401k accounts. Roth IRA contributions I believe can be withdrawn immediately actually. It's hard to find a good resource on them online though as all these articles are written terribly IMO.

EDIT: And it also pertains to Roth Conversion ladders done through conversions of traditional IRAs. Those have to sit there for 5 years.

The 401k comment may be more an employer plan specific thing...

 

[SouthFayetteFan]

22%, the IRA deduction income limit is for total gross income or adjusted gross income? Idk if we can get the deduction.



Yeah that’s true I can wait until April and try and build up the EF.

So me and Roth have a strange relationship...I don't have ANY Roth...I've never been in a tax bracket where I wanted to take advantage. I always have contributed to traditional to avoid paying 25% or 15%.

This new 12% tax bracket has me re-thinking Roth now though, because we can get into that 12% bracket if I buy down our taxable income a little bit through some strategies. I personally wouldn't do Roth if I were in the 22% bracket though (but wouldn't fault those who see it differently).

Also to answer your question - deduction limits are on AGI.

 

[speedyfishy]

So me and Roth have a strange relationship...I don't have ANY Roth...I've never been in a tax bracket where I wanted to take advantage. I always have contributed to traditional to avoid paying 25% or 15%.

This new 12% tax bracket has me re-thinking Roth now though, because we can get into that 12% bracket if I buy down our taxable income a little bit through some strategies. I personally wouldn't do Roth if I were in the 22% bracket though (but wouldn't fault those who see it differently).

Also to answer your question - deduction limits are on AGI.

Ahhh now I guess I should determine if I want traditional or ROTH. I thought I was forced to ROTH. lol

 

[georgina]

So me and Roth have a strange relationship...I don't have ANY Roth...I've never been in a tax bracket where I wanted to take advantage. I always have contributed to traditional to avoid paying 25% or 15%.

This new 12% tax bracket has me re-thinking Roth now though, because we can get into that 12% bracket if I buy down our taxable income a little bit through some strategies. I personally wouldn't do Roth if I were in the 22% bracket though (but wouldn't fault those who see it differently).

Also to answer your question - deduction limits are on AGI.

(I was thinking speedyfishy's SO was not eligible for a regular IRA based on being a software engineer). My personal feeling is that tax rates will never be this low again.

When DH retired we rolled all of his 401k money out of the company plan - pre-tax into IRA, after-tax into Roth IRA, and company stock shares out in kind using net unrealized appreciation rules. Now that we are retired, much of our income is qualified dividends and capital gains, and I am taking advantage of the low tax rates to convert more of his regular IRA money into Roth.

 

[CoP Luv]

I'm certainly viewed as cheap by many while in my mind I just place value on different things than others.

This is me too, which absolutely drives me crazy. I know...I shouldn't care what other people this, but it's still annoying. Like you, we don't really value "stuff". Some members of our family think we live in a total dump (their words) because it's not big enough, didn't come with hardwood floors or granite...yet they chose to "downsize" by buying a much bigger house. Would it be nice to have extra storage, yup! We live in a a high COL with VERY high property taxes (and state taxes), so getting a bigger house might be out of the question. Sorry that 2k sf is such a dump.

So to answer your discussion question, no one really knows about this. I handle our finances, with the help of a financial planner, so DH doesn't really understand the extent of it. We don't skrimp on anything really, but we don't need to spend, spend, spend, just to spend, spend, spend. I see other family members with a mortgage after living in the same house for 40 years and are still working somewhat into their 70's because they have to. Yet, they go to Europe every year and buy a new-to-them German car every 5-ish years.

We just had our annual meeting with our Financial Planner, and we are higher in our NW than I thought we were, even with how things ended up in the last month or so. When asked about retirement goals for DH, he said 60 (and in my head, I was thinking..."not if I have anything to do with it"), and I said no mortgage and I don't want to be worried about having to pay for health-care.

In my own personal retirement goals, I am about 10% of my goal, and that is with me being a SAHM. I can *almost* cover my mortgage with a SWR of 3.5%. That's subgoal #1. We keep trudging along with the hopes that as expenses grow as children grow,, I can make as big of a dent now so I can hopefully be on auto-pilot in the coming years.