Financial Independence Thread

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Splenda88 said:
These numbers are eye opening.

One needs to have a net worth of only 1.03M to be in the top 5%. That seems to be low.

A huge gap between the top 1% and the top 2%.

www.kiplinger.com

Are You Rich? U.S. Wealth Percentiles Might Provide Answers

See the U.S. wealth percentiles and what Americans think is the magic number for them to be considered rich in 2023.
www.kiplinger.com www.kiplinger.com
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another way to look at it: top 50% have net worth of >522k. I take that to mean individual, so a married couple would be 1.04M. So roughly half of US household have 1M net worth or more
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PharmDminus said:
another way to look at it: top 50% have net worth of >522k. I take that to mean individual, so a married couple would be 1.04M. So roughly half of US household have 1M net worth or more
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I was thinking it's household.
 
Splenda88 said:
These numbers are eye opening.

One needs to have a net worth of only 1.03M to be in the top 5%. That seems to be low.

A huge gap between the top 1% and the top 2%.

www.kiplinger.com

Are You Rich? U.S. Wealth Percentiles Might Provide Answers

See the U.S. wealth percentiles and what Americans think is the magic number for them to be considered rich in 2023.
www.kiplinger.com www.kiplinger.com
Click to expand...
Oh only 1.03M? Is that all? Since it is so little perhaps you want to help me out with a small donation?
 
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owlegrad said:
Oh only 1.03M? Is that all? Since it is so little perhaps you want to help me out with a small donation?
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Why would I give you--a top 2 percent(er) a donation? :)
 
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owlegrad said:
Oh only 1.03M? Is that all? Since it is so little perhaps you want to help me out with a small donation?
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I'll take 10% of 1.03M!
 
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libra08 said:
I wonder how much of that top 1% is from generational wealth?
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My guesstimate is 30-35%. Not easy to accumulate ~11 mil $ in net worth. We are talking about being able to afford your own 8-seater private plane here.
 
Splenda88 said:
My guesstimate is 30-35%. Not easy to accumulate ~11 mil $ in net worth. We are talking about being able to afford your own 8-seater private plane here.
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I would say at least 50%. The majority of millionaires are self made but after $3m…it is often family money.
 
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Splenda88 said:
It's 80k/yr with 4% withdrawal rate. Without a house payment, that plenty of money.
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I've basically come to the idea that I should just double the amount that I think I need as a target so even if i don't reach it I'll be somewhere in the middle. The house payment I'll always keep in my calculation as a buffer since you will always have taxes, homeowners, utilities and maintenance.

That whole 25x fat fire rule may have been ok several years ago in pre covid before inflation and the government printing like half the money ever in a few years. Since I don't have kids yet or a house I basically anticipate my yearly spending to be somewhere between 50-100% more than now in the peak years of having a family and trying to travel and if both spouses work then having a part time nanny. So my future nest egg would need to be able to cover all that at a 4% withdrawal rate which is not realistic probably but maybe part time working both spouses is more realistic.
 
finalpsychyear said:
I've basically come to the idea that I should just double the amount that I think I need as a target so even if i don't reach it I'll be somewhere in the middle. The house payment I'll always keep in my calculation as a buffer since you will always have taxes, homeowners, utilities and maintenance.

That whole 25x fat fire rule may have been ok several years ago in pre covid before inflation and the government printing like half the money ever in a few years. Since I don't have kids yet or a house I basically anticipate my yearly spending to be somewhere between 50-100% more than now in the peak years of having a family and trying to travel and if both spouses work then having a part time nanny. So my future nest egg would need to be able to cover all that at a 4% withdrawal rate which is not realistic probably but maybe part time working both spouses is more realistic.
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Based on previous posts, I am assuming you make at least 350k as a psychiatrist. Are you telling me ~9 mil will not be enough for you to retire on?
 
Splenda88 said:
Based on previous posts, I am assuming you make at least 350k as a psychiatrist. Are you telling me ~9 mil will not be enough for you to retire on?
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lol how did you come up with 9m?? I would be thrilled with half that amount in today's dollars adjusted for the future but i don't think i can reach that.
 
Pharmacy Kid said:
mid-30's. Planning to just coast-fire and work part time.
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I’ve seen that happen to many satisfied, comfortable pharmacists. You’ll love it. What I think you’ll appreciate afterwards is how straightforward and predictable it was to get there if you are still ambitious, it’s like being a small trust fund kid. No risk, only upside. Now if you only rent at Pendleton at allocation rates…

confettiflyer said:
Seoul is still my favorite city to just eat through.
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A man of taste and culture. It’s also insane how affordable it is until you learn about Korean retirement. Why read about dystopian futures when you can visit Seoul or Shenzhen? Hopefully, you get Thailand and South Africa in your future travels and can have a competition.

We can fatFIRE now (as a couple or individually), but we’re too psychologically tied to our work to let it go. Don’t ever work so much that you get anhedonia from normal pastimes. I can’t watch movies or TV, we hate the outdoors, our idea of a vacation is lying about lazy at home and have done that for several six week vacations. Our next one will be after shutdown ends as my leave got cancelled due to it. Most people I know don’t even think about retiring under the same mentality, and will end their lives like @mentos predicts. So do we.

We just figured out that we have enough to passively pay for a domestic and the associated fidelity insurance, so with that as our new appliance, no more drudgery.
 
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finalpsychyear said:
lol how did you come up with 9m?? I would be thrilled with half that amount in today's dollars adjusted for the future but i don't think i can reach that.
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25 x (350k)

Quoting you here "That whole 25x fat fire rule may have been ok several years ago." May have been ok. Seriously!
 
Do you FIRE people have kids?
 
finalpsychyear said:
The variable is your yearly spending not gross salary.
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Someone gotta be a big spender for 3-4% (270-360k) withdrawal rate on 9 mil not be enough...

100k in today's money would be more than enough for me if I have no mortgage payment.

The fact of the matter is, we (pharmacists, dentists, physicians, etc...) are a privilege bunch. Even if we max out our 401k/IRA/HSA and put it in a S&P500 index for 25 yrs, which almost all of us can do, we will still come out with almost 3 mil. < 5% of US household has a net worth of 3mil
 
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mentos said:
Do you FIRE people have kids?
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The handful of people I know who FIREd either didn’t have kids, or waited until the youngest child graduated from college. For the latter group, they didn’t retire super early but I guess 55-ish is still way better than 65-ish.
 
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Z-Qualizer said:
The handful of people I know who FIREd either didn’t have kids, or waited until the youngest child graduated from college. For the latter group, they didn’t retire super early but I guess 55-ish is still way better than 65-ish.
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Its a lot more difficult to fire going from single to married to married with a few kids. The act of actually retiring is a different story as I would like to probably still be doing something clinical even if its 1-2 days a week for the cognitive benefits but could it be remote while I am sipping some mai tai's... yes that is the dream.
 
finalpsychyear said:
Its a lot more difficult to fire going from single to married to married with a few kids. The act of actually retiring is a different story as I would like to probably still be doing something clinical even if its 1-2 days a week for the cognitive benefits but could it be remote while I am sipping some mai tai's... yes that is the dream.
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I believe they call that Coast-FIRE?
 
Splenda88 said:
He returned to work so he could pay for his kids college education!

My kids would have to borrow for college... sorry.
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I would do up to undergrad at a state school for an in demand field.

If you want to go into pharmacy or some other saturated profession…too bad, your $200k+ debt is your responsibility.
 
PharmtoCS said:
I would do up to undergrad at a state school for an in demand field.

If you want to go into pharmacy or some other saturated profession…too bad, your $200k+ debt is your responsibility.
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I did my first 2 yrs at the CC and got my BS at a state university while I was working full time at a grocery store, and I had no issues to become a RN and then got into med school. My best friend did the same and became a radiation oncologist.
 
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Splenda88 said:
He returned to work so he could pay for his kids college education!

My kids would have to borrow for college... sorry.
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My parents paid for my undergrad. I wasn't smart enough to get into a state school for pharmacy, so they drove me down to Atlanta, paid for my first semester, then I was on my own for tuition, room and board.

I paid for my two sons, who attended a state school, full ride. They are both out of school with zero loans.
Saving up for my daughter's college fund.
We are immigrants, that's what we do. I didn't know there was an option, to tell them to borrow for school! Now you tell me.
I could have retired at 50, if I had known.
Then again, retire to do what? Golf? Fishing? Bocce Ball?
 
Z-Qualizer said:
I believe they call that Coast-FIRE?
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I looked at FIRE in 3 stages:

1. in first 10 years as a doc try your best to get as close to 25x FI number this will be the most important money you ever make due to compounding and will lay the foundation for everything to follow.
2. the following 10 years work 20 hours ish or enough to pay expenses without dipping into savings and allowing the 25x to be 50x
3. Then it depends are you paying for your kids educations and weddings and all that to decide if you stick around 20 ish a few more years or if you are not doing that then 1-2 days a week if you can keep your self busy the other times and enjoy it.
 
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RXDOC1986 said:
My parents paid for my undergrad. I wasn't smart enough to get into a state school for pharmacy, so they drove me down to Atlanta, paid for my first semester, then I was on my own for tuition, room and board.

I paid for my two sons, who attended a state school, full ride. They are both out of school with zero loans.
Saving up for my daughter's college fund.
We are immigrants, that's what we do. I didn't know there was an option, to tell them to borrow for school! Now you tell me.
I could have retired at 50, if I had known.
Then again, retire to do what? Golf? Fishing? Bocce Ball?
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I am an immigrant too and I am saving up to pay for my 2 kids undergrad degree. Hopefully what I am saving will be enough.. My point was if I am already retired, I am not getting back to the workforce to pay for my kids college
 
mentos said:
Dude didn't open a 529?
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He did not plan well. However, college is expensive nowadays. If you have a kid that wants to go grad school such as pharmacy, dental, med, law school etc..., you better be ready to have 400-600k to fund both undergrad and grad school if they are doing it the traditional way.

My point was that there are way to reduce the cost significantly. I don't plan to save more than 150k for each of my kids. Again, I will advise them to do 2 yr CC and the other 2 yrs at a state university. And if they want to go to grad school, I will pay living expenses for them and they can just borrow to pay the tuition.
 
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Splenda88 said:
He did not plan well. However, college is expensive nowadays. If you have a kid that wants to go grad school such as pharmacy, dental, med, law school etc..., you better be ready to have 400-600k to fund both undergrad and grad school if they are doing it the traditional way.

My point was that there are way to reduce the cost significantly. I don't plan to save more than 150k for each of my kids. Again, I will advise them to do 2 yr CC and the other 2 yrs at a state university. And if they want to go to grad school, I will pay living expenses for them and they can just borrow to pay the tuition.
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150k is pretty generous. I got zero. That's crazy how that's not considered much for college savings.
 
mentos said:
150k is pretty generous. I got zero. That's crazy how that's not considered much for college savings.
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I agree it is insane. Imagine that you have 3-4 kids that you have to pay college for and two of them want to go to a private college.
 
with the way things are headed, college will be taxpayer funded in 10 years. i have been saving for each of my 3 kids, age 2 4 and 6. Have 80k total saved and have decided to call it quits on contributions
 
Trying to teach/advocate the upcoming “young bloods” on the idea/concept of #stealthwealth…

Not into wasting money in a pathetic desperation to impress others or conform to economic peer pressure
The appearance of money brings with it a whole host of negativity (mainly excessive undesirable attention, fake relationships, excessively high standards/lifestyle creep, weird power dynamics with family/relatives, etc.)

yeah that’s crazy…even as a lifetime non breeder, I knew/know what a 529 was…never stop trying to learn something new in regards to personal finances…as seemingly boring and dry of a subject it can appear, it’s really grown on me over the past decade
 
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RxPreceptor said:
as seemingly boring and dry of a subject it can appear, it’s really grown on me over the past decade
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I agree with this. It probably helps to have money in the first place to make it more interesting but there are a lot of (I think) interesting books/videos about the topic.
 
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I don’t think the 4% withdrawal would still apply in 5 years but I would like to hear other opinions

For the last 15 years, US was able to print its way out. Now with $33T in debt and debt outgrowing gdp at a fast pace, the money printing machine has finally run out of ink

IMG_1661.jpg


The world is also changing fast. It has become a bipolar world. US can’t dictate what it wants anymore.

I doubt the stock market will have the same 8-9% annual growth going forward. We should be prepared for much slower growth, even stagnation.

You won’t be able to depend on the stock market for early retirement. You would also need a steady monthly source of income like rents or income from a side business.
 
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libra08 said:
I don’t think the 4% withdrawal would still apply in 5 years but I would like to hear other opinions

For the last 15 years, US was able to print its way out. Now with $33T in debt and debt outgrowing gdp at a fast pace, the money printing machine has finally run out of ink

View attachment 377348

The world is also changing fast. It has become a bipolar world. US can’t dictate what it wants anymore.

I doubt the stock market will have the same 8-9% annual growth going forward. We should be prepared for much slower growth, even stagnation.

You won’t be able to depend on the stock market for early retirement. You would also need a steady monthly source of income like rents or income from a side business.
Click to expand...

3 percent rules in 5 years
 
libra08 said:
I don’t think the 4% withdrawal would still apply in 5 years but I would like to hear other opinions

For the last 15 years, US was able to print its way out. Now with $33T in debt and debt outgrowing gdp at a fast pace, the money printing machine has finally run out of ink

View attachment 377348

The world is also changing fast. It has become a bipolar world. US can’t dictate what it wants anymore.

I doubt the stock market will have the same 8-9% annual growth going forward. We should be prepared for much slower growth, even stagnation.

You won’t be able to depend on the stock market for early retirement. You would also need a steady monthly source of income like rents or income from a side business.
Click to expand...

Seems like a repeat of the 1970s stagflation when the market was flat. Back then the Fed also printed money which helped inflate away the debt from the Vietnam War, etc.
Only when the debt to GDP ratio was lowered did Volcker raise interest rates enough to kill inflation (and trigger a recession). Except this time around there is a lot more debt to inflate away.

This is why I am somewhat overweight with 50% international stocks. It’s important to diversify out of the US market.
 
libra08 said:
I don’t think the 4% withdrawal would still apply in 5 years but I would like to hear other opinions

For the last 15 years, US was able to print its way out. Now with $33T in debt and debt outgrowing gdp at a fast pace, the money printing machine has finally run out of ink

View attachment 377348

The world is also changing fast. It has become a bipolar world. US can’t dictate what it wants anymore.

I doubt the stock market will have the same 8-9% annual growth going forward. We should be prepared for much slower growth, even stagnation.

You won’t be able to depend on the stock market for early retirement. You would also need a steady monthly source of income like rents or income from a side business.
Click to expand...

What's your international allocation?

I just do VTI/VTSAX, no international exposure. Is that bad?
 
mentos said:
What's your international allocation?

I just do VTI/VTSAX, no international exposure. Is that bad?
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Most, if not all, large US companies operate globally, so you’re probably getting more international exposure than you think.
 
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Z-Qualizer said:
Most, if not all, large US companies operate globally, so you’re probably getting more international exposure than you think.
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Yes but unfortunately US companies are not winning in emerging industries like commercial drones, EV batteries just to name a couple.

Will US companies still dominate domestically and internationally in 5, 10 years?
 
PharmtoCS said:
This is why I am somewhat overweight with 50% international stocks. It’s important to diversify out of the US market.
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I have avoided European and Japan stocks…they missed the internet, smart phones, social media, clean energy and will probably miss AI, EV.

I have about 25% in emerging markets in Asia.
 
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Both india and china are pretty shady economies and I have no trust in them. Especially with china, we all know what can happen to their companies if they get on the wrong side of their supreme leader.

Total US all the way..
 
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Chrish said:
Both india and china are pretty shady economies and I have no trust in them. Especially with china, we all know what can happen to their companies if they get on the wrong side of their supreme leader.

Total US all the way..
Click to expand...

Investing in index funds is about diversification. Most of us index fund investors understand the importance of investing across all sectors, yet some of us seem more okay with putting all of your eggs into one basket in one country. IMO this goes against the idea of diversification..

If India and China become the next superpowers and emerging markets do outperform as @libra08 is betting on, while the US market remains stagnant, would you kick yourself for missing out on the gains?
 
PharmtoCS said:
Investing in index funds is about diversification. Most of us index fund investors understand the importance of investing across all sectors, yet some of us seem more okay with putting all of your eggs into one basket in one country. IMO this goes against the idea of diversification..

If India and China become the next superpowers and emerging markets do outperform as @libra08 is betting on, while the US market remains stagnant, would you kick yourself for missing out on the gains?
Click to expand...

India and China will never become superpower. One is a massively corrupt democracy while other is a party owned state where multibillion dollar companies can cease to exist overnight.

As someone mentioned above, Fortune 500 companies already conduct massive business overseas so it gives you enough diversification. And despite our current issues, US is still the most stable economy ( you think US inflation is bad? Look at countries in Europe and then get back to me).

I reckon American dominance will continue to decline, but we still will remain the land of innovation attracting the brightest minds from everywhere for foreseeable future..
 
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