08-19-2020 UPDATE I will no longer be checking this AMA, so if you have any new questions, please reach out to me via the "connect with me" options below. I had a great time chatting with all of you! Thanks for the fun experience. :) About me: - I’ve been heavily involved in the FIRE community for six years and have been a FIRE blogger/podcaster for a year and a half. - I know a lot about money and investing and love sharing my knowledge! - I have a good understanding of tech industry compensation packages (eg. 401k matching, ESPPs, RSUs, spot stocks) as I manage all my husband's income and benefits from a large video game company. - I believe tech workers are uniquely well-positioned to achieve FIRE at a young age. What is FIRE? FIRE stands for financial independence, retire early (but the retire early part is optional). When you reach FIRE, it means that you are financially independent and no longer have to work for money. Many people in the tech industry have been able to achieve FIRE in their 30s and 40s. Ask me anything about: - FIRE and what it is. - How to get started. - Why I prefer FI over FIRE. - The basic math behind FIRE. - The different paths to FIRE. You can also ask me about: - Basic money management. - DIY index investing. - 401K matching. - ESPPs and RSUs. (More so on the management, selling and taxation side… not so much on how the grant prices are determined.) - Blogging. - Podcasting. - Facebook group adminning. - House hacking. - Parenting. Connect with me at: - Blog: https://eatsleepbreathefi.com - Twitter: @esb_FI - Facebook and Instagram: @eatsleepbreathefi #FIRE #FI #personalfinance #investments #investing
As a noob, I'd like to learn more about diy index investing since the S&P is mostly weighted for tech--thanks!
Sure, what do you want to know? I can share blogs, books, podcasts. Or are you looking for a very quick overview?
Yes, would love your reccs on resources. I have a bunch of tabs open but it's overwhelming. Also, would like to get your take on whether you think it's good to truly diversify beyond tech
What was your fire number and expenses before 🔥
I don't reveal our FIRE number, but our rough expenses are around $45,000/year (CAD)—without travel.
Why don't you want to reveal your Fire number?
Why are you doing this AMA?
Because I LOVE FIRE! I love talking about it and helping others to discover it. The freedom it can give you is so amazing, and I want others to have that freedom.
How did u get blind to advertise your AMA to everyone? Also give me the basic math about FI.
I was referred to them by a member of Blind. They were very careful about accepting me for an AMA. I can tell that they're protective of their users, and didn't want just anyone. They spent a lot of time interviewing me and vetting me.
How do I refer someone I know is would be perfect for an AMA?
How do you decide the topics and how do you find the guests for your podcast?
Some of the topics are suggested by listeners. We also notice topics that are trending on social media or in the FIRE Facebook groups we're part of. Guests are: friends, people we know from our Facebook groups, fellow bloggers and podcasters, referral from other people, book writers, financial experts.
What would you recommend during this period (covid and election). ? Market stocks are going up but seems like a bubble
I always recommend the same thing in good times and bad: make sure you're on top of your finances. Get rid of your debt. Then when all that is taken care of, have a solid investment plan and stick to it. Don't change your plan to match market conditions. Change it if your life situation changes. Keep buying investments as you have the money.
Thanks for the AMA. Is it a good time to continue investing larger sums into Stock Market? Or should I consider diversifying into Bonds, Real Estate? * larger sum = 50% + of income Background: Been working for a few years - paid off all debt, in late 20s, and have a NW of about 250k. 120k Cash, 130k Stocks+401k. TC: 190K SO has NW of 150k - paid off all debt, late 20s, 60k Cash, 90k Stocks+401k. TC: 150K Goal: Achieve FI by 40s. Our current FI goal is to have 3M+house by early 40s. We both plan to get higher paying jobs to accelerate our investments and savings.
Congrats, you're in an excellent money position. I would base the bonds decision on your tolerance for volatility. If markets going up and down stresses you out, you need more bonds. Personally, I think you're too young to be in any bonds. Better to learn about investing so that the normal ups and downs don't scare you. As for real estate, that's worth doing if you know how to invest in real estate efficiently and for a profit. Many people just buy without doing the math or understanding the basics.
Thank you for the response! I'm okay riding the wave, but, I panic a bit when I have to put 50%+ income into Stocks. Does it make sense for SO and I to have our 230k of cash reserve in low-risk investments and invest all our future savings into Stocks? As a follow up: could you provide any DIY Index Investment resouces to better understand what indices should I be investing in? For Real Estate, what resources can I refer to understand math behind tax benefits, current mortgage rates and growth of RE vs Stocks?
What do you do with your espp /rsu in term of diversify it and on tax favor ?
I sell our ESPP shares as soon as possible then reinvest in our diversified portfolio like we would the rest of our money. I highly advise against holding anything in your ESPP.
What about rsu ? You do the same thing or keep it for long term gain then sell?
How can I define ‘achieving FIRE’ for myself? What factors? Is there a formula I can use?
Yes, the basic formula is to take your annual spending and multiply it by 25. So if it's $40,000 per year that you spend, that would mean you'd need $1,000,000 to reach FIRE.
I really like fireCalc it shows the Monte Carlo analysis for your inputted assumptions.
How did you get interested in FI?
I started researching how much we needed to retire, then I stumbled across Mr. Money Mustache: https://www.mrmoneymustache.com/
Interesting.