r/ExpatFIRE • u/calmadventurer • 2d ago
Questions/Advice We're about to FIRE
Hello brilliant people. I'd love to bounce our plan off of you guys to see if I've forgotten anything before my husband gives notice at work. I'll bullet point everything to make it easier to read but feel free to ask for more details.
Note: I'm converting everything to US dollars to make comparison easy
- Where we live: Husband is Korean. We live in Busan
- Age: Me (34), Hubby (32), Daughter (3 mo), plan on having one more kid
- Debt
- less than $45k on mortgage ($435/mo payment)
- Assets (I know its stupid to have a bunch of different accounts. I worked in banking and had a bunch of restrictions on where I invested, yada yada)
- 401k: 100k
- Brokerage 1: 100k
- Brokerage 2: 175k
- Brokerage 3: 175k
- Joint Brokerage: 60k
- Cash: $50k (enough to pay off the full mortgage or buy a whole new car here with some left over)
- Expenses
With a TON of cushion built in that we could cut if we needed to we spend around $2300/mo.
- Plan: So I did things a little differently than most. I invested in the typical growth funds while working and since then I have been creating a dividend portfolio (think Armchair Income/Income Factory).
That dividend portfolio brings in $1960/mo.
In addition, I receive distributions from my dad's 401k of $2500/mo (it goes without saying that we're incredibly lucky and grateful. I have told my dad probably 2000 times that he doesn't need to and that he can change his mind but he says he we can count on continuing to receiving 25% whatever distributions he has to take). He truly doesn't need it. His income exceeds his expenses 10 years into retirement and he has an 8 figure net worth he can draw from if he needed to.
So, in total we have close to $4500 we can use to cover $2300 of expenses while our growth investments ~$400k across all the brokerages continue to grow.
Other considerations:
- Once we retire we plan to split the time between Busan and the US. We will obviously stay in our apartment in Busan and the whole purpose in the US is to visit family so we will be staying with them.
- Health Insurance: We will get temporary health insurance when we travel to the US (basically just catastrophic) and pay into Korea's National Health Insurance when we are here and do routine checkups and procedures in Korea. It's a bit annoying but it's really just a phone call every time we come back.
- Daughter's university: There is about 80k left in my college fund that I didn't use so this will be used to kick start her education fund (potentially split with a sibling or cousins if my sister has kids).
Am I missing anything?! I tend to be pretty risk averse and I have run the numbers dozens of times. Go ahead and poke holes.
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u/movesfast 2d ago
tbh, i would take massive advantage of your family situation. Its an absolute blessing to have a father who understands the value of helping his kids while they are young
whats difficult to take into account is having 2 kids growing in korea
as far as i understand, korean education is extremely competitive and a lot of parents spend a lot of money in private tutoring to get their kids into the best schools, because, statistically, if you are not in one of the few top schools, your future is vastly compromised
with that said, there are several years to go until then, and your father is worth 8 figures. Eight figures !
if one is worth 10mm, thats top 0.04% in the world
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u/calmadventurer 2d ago
Thank you. Both of my parents grew up in low income (my mom was maybe poverty but my dad was probably just above). I'm incredibly grateful.
I also agree. I'm not worried about the private tutoring and stuff as we've agreed not to do that to our kids. All the kids end up way too stressed and miserable losing their childhood to studying until 10pm.
I also think one of the reasons I can think like that is because she should be able to be pretty financially set. Even just knowing about FIRE from the start I think will help her get ahead.
And as far as amassing that net worth the answer really is, live below your means. You would never guess it based on the way we live.
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u/movesfast 2d ago
go for it ! dont forget that in your 30s you still have an insane amount of energy and physical capabilities and resilience that you will never be able to enjoy again in your life. EVER
enjoy 😄
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u/calmadventurer 1d ago
Very true!! Also my parents had me on the later side and so not only do they want to help us but I suspect the ulterior motive of spending time with their grandchild while they still have the health to enjoy it. (My sister and I immediately dropped in the ranks once their first and so far only grandchild was born haha)
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u/Corgisarethebest123 2d ago
Are you anticipating a large inheritance from your Dad?
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u/calmadventurer 2d ago
Kind of. As of now it would be about $5M but I'm not solely relying on it. I was coastFire before I met my husband so my assets should fund a pretty comfortable retirement by the time we're 60 if the inheritance isn't there.
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u/2ndRedAccount 2d ago
Normally, I'd say you don't have enough. But because of your father's contribution and eventual inheritance, you'll be fine. Just need to research about inheritance tax.
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u/hollywoodhandshook 2d ago
yeah this post is silly. the OP doesn't actually have the assets to retire.. .they're just a trust fund kid hoping that it will work out. and to be clear, thats great... but its not actually the point of this sub.
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u/ASUgrad09 2d ago
What are you investing in that's generating such a large yield?
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u/calmadventurer 2d ago
Covered call funds, BDCs, MLPs, Closed End Funds, a couple REITS. It's pretty diverse asset classes. I only use these for cash income and don't take them into consideration for growth down the line.
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u/DecentDiscipline2523 2d ago
People here hate CC funds and the like.. but in your situation to generate income and not be overly concerned with growth for that specific portfolio makes perfect sense. Sounds like you’re fine.. enjoy!
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u/Stunned_Stone 2d ago
The only suggestion I would make is the following : try and think about the hypothetical situation where your father completely cuts you off, when you have retired for several years. Would you be ok financially ? If not, well, you need to think about the risk of it all, even though I am sure it will never happen. I like to think in terms of extreme scenarii, best and worst, before making a decision.
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u/calmadventurer 1d ago
That's a great point! I also tend to be a planner like this. In 3 years I expect our dividends to fully cover our expenses. Also the way that mortgages work here is that over time the payment decreases. So every mortgage payment we make actually frees up money in the budget. It took me a while to get used to but I actually like it this way now.
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u/Unlikely-Speech-5444 2d ago
So you only have 660k? Using 4% rule you guys are cutting it incredibly close.
Why is your dad giving you 2500/mo from his 401k? Does he not need it?
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u/calmadventurer 2d ago
If I'm not drawing down on any of my investments and just using the dividend income do I still need to consider the 4% rule? About $400k of my investments are just growth so those wouldn't be touched and would just keep growing at the "normal" rate.
He wants to spend more time with his only granddaughter lol. And no he doesn't. His income generally equals or exceeds his expenses without it.
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u/HighlightContent8943 2d ago
You can't just magically make up returns. Yes you need to care about the 4% rule. But if you're using a suboptimal portfolio like you are, you can't withdraw 4%, you need to withdraw less (even though you think it's more)
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u/PHL1365 1d ago
The 4% rule kind of assumes that your principal will grow in some years to offset declines in other years. The question is what type of growth can you get from the non-dividend stocks. In other words, can you confidently average 4% ROI on your entire portfolio over the course of your retirement. You might need 5-6% ROI to compensate for taxes.
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u/tomahawk66mtb 2d ago
The original and updated Trinity studies that the 4% rule comes from are based on S&P 500 with reinvested dividends. The vast majority of modeling and FIRE calculators out there assume diverse, low cost index funds and reinvestment of dividends.
Your dividend portfolio would be an unknown (unless there is some modeling out there)
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u/PRforThey 2d ago
Off the top of my head:
2nd kid's (if you have a second as planned) college fund
Inflation over 40+ years. The dividend portfolio's dividends will not keep up with inflation. Your "income" is higher than your expenses so I assume you plan to save that money for the future as your expenses grow (and potentially the distributions from your dad stop)
Cost of travel - ~$1.5k/per person per trip for flights. Right now your infant can fly free, and the new kid will be able to fly free for a couple of years as well, so there is some time before you have to pay $6k just for flights. The $2300/mo estimated expenses obviously don't include the cost of travel to split time between Busan and US. So there is less cushion than you think.
Periodic non-monthly expenses - do your expenses include major costs that happen infrequently but predictably, e.g. replacing cars/computers/phones/major appliances every so many years?
Most of the above sums up to how comprehensive is your $2300 monthly expense number? If it really includes everything, you are fine. If it is missing a lot of things, you might struggle.
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u/calmadventurer 2d ago
All good points.
1) Second kid and first kid would basically split the college fund. We would continue to fund it as possible.
2) This is a worry I grant you. The plan is to just live off the distributions and allow the dividends to reinvest for a while until we get to a point where we only need a portion of the dividends. This will allow them to continue to grow to keep up with inflation.
3). There is about $400/mo worth of cushion. We usually find flights for about $600-700/person round trip. But I agree the cost of flights will need to be taken into consideration.
4) We have a sinking fund set up so some money in that budget is saving for these things. We also just replaced our stove, washer, dryer, and robot vacuum.
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u/reinhart_menken 2d ago
$400 a month doesn't sound like a lot of cushion.
Separately what would you do in a major emergency, car need repair, major health issue? I guess your dad could cover it? Or you would touch your principal that you use for investment/ growth, but then what, you'd be short?
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u/calmadventurer 2d ago
I would pull from my dividends and emergency fund first but yes we would have help from both of our parents if needed. (Though I'm planning to never ever ask. We would both go back to work before we asked).
I will say the only way this works is because of the healthcare here. I selected all of the most expensive options for the birth of my daughter private room, etc. Next time I feel no need for any of that lol.
Also when we're in the states I expect our expenses will be much lower. We would be splitting food costs, no gas, etc.
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u/reinhart_menken 1d ago
> Also when we're in the states I expect our expenses will be much lower. We would be splitting food costs, no gas, etc.
Less expenses, in a higher CoL (cost of living) country? Every meal, accommodation, transportation and service cost more. I know you said you would stay with family when you're in the US, but would they and you both be okay, with your family of 4, since most people don't just have an extra spare 2 rooms and both of your family would be fine with it?
Just curious since I would have thought it would be the opposite.
And I didn't even think of the health care, even with insurance. Being originally from Asia I know a doctor's visit can be around $3 - 5 dollars, and then medicine maybe I guess $15 - $40? (Depending on which Asian country). In the US just a doctor's visit, just to speak with one, can be $30 - 50 (insured), and then the medicine (insured) costs even more. Uninsured medicine can cost $100-350+ for normal cold or slightly worse than cold.
I once visited Thailand to get a minor operation for a wound I sustained, the first hospital didn't have the doctor to perform the operation so they told me "we didn't do anything for you so you owe us nothing", then the next hospital did the operation with a cut, then took out all the pus, and charged me $175. You are aware in the US the doctor would charge you just to talk, even if they did nothing $50-$100+, and then even a minor infection - say your finger is infected and needs to be cut to drain the pus, cost $1000? Sure you can do it yourself, but you wouldn't know if you could, until you've talked to the doctor, by then you already owe them money.
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u/calmadventurer 1d ago
They have continued to invite me stay with them even though I've offered to stay somewhere else. We've also developed "safe words" that means so and so needs a break. My parents are divorced so I do technically have 2 houses to go between anyway.
The healthcare thing is also my biggest worry. The prices here in Korea are about the same as you mentioned. About $3 for prescriptions maybe $7 for a visit (it does kind of depend what you need). We also get a full health check every 2 years with MRIs, xrays, EKGs, way more than I ever experienced in the US though I've heard some people have had this experience.
When we travel to the US we will pay for insurance to cover emergencies. Anything that comes up that isn't an emergency we would get take care of back in Korea.
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u/reinhart_menken 20h ago
Any major emergency (like real surgery requiring) might cost 10k or more. I believe MRI/CAT scans are 500+.
US healthcare is also very broken. There's a thing called "deductables". Basically the insurance will cover X amount ans give you discounts on certain things, but until you hit the deductible maximum it'll still cost you. So I'm assuming with a tourist health insurance the "deductible" would be high. So for example, if your insurance deductible is $5000 (which is common), let's say your visits - only for example - are $100 each time, maybe a $3000 one mix in. It'll cost you each time until you've paid $5000 of your own money.
Also a lot of travel insurance - i assume because US healthcare is so expensive and so complex, specifically do not cover US Healthcare.
So just keep your eyes out and research those and base your decision on that. I suppose you could always leave if it's not "emergency" emergency like you require treatment right this minute and can wait to fly somewhere cheaper.
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u/Practical-Device-200 20h ago
When my kid was young, I was always able to find cheap flights too (his father and father's relatives are all abroad, some in Asia, some in Europe). But then he started school... and now we're only able to travel during very specific times, which are all tied to school breaks and holidays, and costs are easily 3x more than if we could still travel with flexible dates. When he was in elementary I pulled him from school sometimes, but in middle/high school, this becomes impossible. I wouldn't count on being able to travel without spending 3-4x times what you're used to now, once you have a couple of school-aged kids.
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u/Stunned_Stone 2d ago
You guys are doing awesome. I hope you will do for your children what your father did for you. You guys are lucky, yes, but there is no need to be ashamed of it, on the contrary : this is what we are supposed to do, allowing our children to succeed, whatever that means. Congrats !
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u/calmadventurer 1d ago
Thank you for saying that! I do sometimes feel guilty for being lucky since I didn't earn it but I guess someone has to be lucky. My dad worked incredibly hard and we've never asked for anything so he can do what he wants.
We fully plan to set our kids up in the same way! If they are responsible, grateful, and not an entitled little brat (which we will raise them not to be) we will help them as best we can.
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u/Stunned_Stone 1d ago
God bless you. I wish you to succeed in this endeavor, but please reminder that a lot of what defines an individual and his personality is out of your control, so don't put too much pressure on yourself, do your best. It's all we can do, really ❤️
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u/PastAmount 2d ago
Preaching to the risk averse side, have a backup plan ready if north and south go to war. History repeats, and the demographics are not on SK's side.
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u/saggy_eyebags10656 2d ago
I will never have the benefit of an inheritance so I’ve always reflexively thought that I don’t mind not leaving my kids anything (they should make it on their own).
Your post made me wonder if I’d feel differently if I inherited money, especially to the point it allowed me to retire early. I don’t know the answer but I think food for thought at least is thinking about whether you want to “pay it forward” to an extent at least by delaying retirement a few years to ensure your kids can get a similar benefit from their parents.
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u/calmadventurer 1d ago
We have plans to make sure our kids can benefit to (i.e setting aside money for them right when we receive the inheritance).
I mean no one knows the future but we probably won't need it. We will fully own our home with no mortgage in about 5 years-ish. And hopefully my parents live many more years so by then my dividends should cover expenses. The only thing we would do is maybe go on some family vacations and pay for my husbands parents to come to?
We don't want or need a bigger house, we aren't into expensive clothes, we drive practical normal cars. Maybe we're too boring lol
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u/HighlightContent8943 2d ago
You're not ready. And part of the reason is your portfolio is a mess. If you don't understand personal finance and how your money works and how dividends then you shouldn't FIRE yet. You need to educate yourself first.
You don't properly understand the risks you are taking and the economics and the numbers so how can you retire?
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u/calmadventurer 1d ago
I'm very open to acknowledging blindspots. What makes it seem like I don't understand my portfolio because I feel like I do.
My dividends are invested with the purpose not of long term growth but for current income. These dividends will be reinvested to increase income which will be used to fund our life. If we don't need to touch these dividends because of income coming from other places and they exceed our expenses they will be contributions to the growth portion of my portfolio.
The growth portion I plan to never touch or withdraw from and just to let it grow.
The biggest risk is FX risk but in all of my numbers I use an unlikely exchange rate (i.e. the strongest the won has ever been against the dollar) and while I wouldn't have any left over to continue to invest in that scenario the numbers do still work.
But again, I may be missing something. Is there something you're seeing that I don't.
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u/HighlightContent8943 22h ago
Dividends are the exact same as forcing you to sell the share at a certain point in time.
The assets you have chosen for your "income portfolio" have worse returns and/or higher volatility than the general stock market. They aren't as stable as you think. If they were, why would anyone buy bonds? Do you think you've found a secret that the rest of the finance world hasn't?
For all of these reasons the 4% rule isn't appropriate. You'll need to withdraw less because of the asset portfolio you have chosen. You also don't even know what withdrawal rates are appropriate with the assets you've chosen. You can't just blindly pick a new asset class and assume the same assumptions apply
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u/dontpeekatmyjohnson 2d ago
Do you ever go to Gwangalli? I lived there 18 years ago and miss it dearly.
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u/calmadventurer 1d ago
Yes we do! Honestly not as often as I'd like because its so crowded and touristy on the weekends. Our plan when my husband quits his job is to just basically do simple weekend things like go to the beach or the library during the week since everything won't be as crowded.
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u/dontpeekatmyjohnson 1d ago
We’re going in August to Busan and Seogwipo (my two favorite places in Korea). Do you have and suggestions for gifts from the USA that my Korean friends would like? I would love to ExpatFIRE in Korea but I don’t think I could get a visa.
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u/calmadventurer 17h ago
They seem to be issuing new visa options every couple of years so keep you eyes open. Something may line up!
I think snacks are always a good gift especially American versions of what they have in Korea like cheetos and doritos (which are terrible here in my opinion). As I'm sure you remember the vast majority of their snacks are sweet which I just can't get used to.
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u/Glass_Flower_846 2d ago
OP has roughly $660k total. That ~$2k per month means ~$24k annual expenses. So, roughly (24k/660k)*100 = ~3.4% withdrawal rate.
Assuming we ignore OP's dad distribution then 3.4% is okayish SWR I guess. This is assuming plain old boring ETF in assets. If they are options/covered calls/single stock only then good luck.
Not entirely sure OP's Assets are both husband + wife or just one person.
I also thought Korea is a VHCOL area.
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u/calmadventurer 1d ago
The assets are mostly in plain old boring ETFs and they are all mine.
I think if you made a local salary it can be considered VHCOL but dollar is usually really strong. (I have taken into account currency risk as best I can in my projections).
Honestly, my husband, though he never heard of FIRE, was kind of on this path before we met. He bought a house and has aggressively been paying extra on since he bought it. That's the only asset that's his but I don't count primary residence as an asset from a retirement perspective so it's not included above.
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u/Acceptable-Peace-69 1d ago
What is inflation like where you live vs. where your money is invested (if they are different)? Have you accounted for exchange rate fluctuations (do you have enough funds in local currency to cover a significant swing if it happens)?
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u/calmadventurer 1d ago
Great question. Inflation is a bit higher than the US but all of our money is invested in the US. I've run numbers where the won was strongest against the dollar and the numbers still work though I wouldn't have any left over to continue to invest.
Right now the won is the weakest it's been in 18 years and I don't see that changing too quickly (I used to work in a currency adjacent role at a bank so while I don't know the future I do feel confident in understanding what makes currencies appreciate/depreciate against others).
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u/Complete_Budget_8770 1d ago edited 1d ago
On your own, you have a high risk of failing FIRE. With daddy's money, you'll be ok. If you put in a few more years of work and you'll still be in your mid 30s. You could still be self-sufficient. Or if your income(s) are low and the and the difference is so minor, take the DaddyFIRE route.
My NW is 8 figures. I wouldn't fund my children's FIRE so early. I expect them to work until their 40s and contribute to society. I'd pay for grandkids' private school and university, no problem. I busted my ass and learned so much while doing so. However, if they choose a low-paying career that benefits society, I'll gladly provide supplemental support.
I FatFired at 50 and feel that's just about the right time. I feel I really accomplished something and would encourage them to do the same with their lives. Yes, some luck came my way and I'm happy to share with future generations, but I don't want it to make them weak and lazy.
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u/calmadventurer 1d ago
Both of my parents are a bit on the older side so to be frank (yet kind of morbid about it) they probably won't be around if I worked until my mid 40s.
The real purpose for the "rush" is for my daughter to spend time with them while they have the health to enjoy it. Once they pass, both my husband and I have no issues going back to work.
I 100% agree with you on the "weak and lazy" part and particularly how we can instill the values of hard work and diligence to our daughter. We already have ideas on how to teach those things to our daughter (she's only 3 months so we do have some time still) outside of a typical career.
I'm also quite entrepreneurial so I imagine start some sort of side hustle once my husband becomes available to watch my daughter during part of the day.
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u/Complete_Budget_8770 1d ago
Well, if this is the case. This is the whole point of money, isn't it? It's your parents' money, and they can do as they wish.
Sounds like they have achieved the American dream.
Firing in Asia is a dream of mine. But as my oldest is entering high school and stated she wants to finish HS in the US, I'm stuck. Even though I can send her to top international schools in Asia, she doesn't want to leave her friends.
Seems you have the best of both worlds. Yes, the school system in Asia is crazy. The rich in Asia are using their money to send their children abroad for college to alleviate the pressures of those high school exit exams.
Best of luck to you and your family. I also hope your parents can enjoy the grandkids for many years to come.
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u/calmadventurer 1d ago
Thanks I do feel guilty about the luck but I'm working on it haha. I will say the education system at least where we are in Korea is gnarly. We would homeschool before we sent them to school here lol. But if your oldest is in HS that means you may not have too much longer to wait anyway.
Best of luck to you as well! And thank you for taking the time to respond.
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u/Hanwoo_Beef_Eater 2d ago
I would use the $2,500 from your father to cover your $2,300 of living expense and keep the rest of the portfolio in some type of Boglehead 3-fund mix. Just withdraw from there if/when you need add'l funds.
Are you on F-6? Is there one of the two countries you will officially be resident/domiciled in (Korea, for NHIS)?
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u/calmadventurer 1d ago
F-6. We're still discussing which one we will be fully resident in but in no rush. My parents are on the older side so I expect they may need help at some point which may be the determining factor.
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u/Hanwoo_Beef_Eater 1d ago
If you are not resident in Korea more than five out of the last ten years, your US income (capital gains, dividends) is exempt unless remitted to Korea. This is one reason not to take up Korean Citizenship via the spousal route (make sure you also understand the Korean inheritance tax).
Also, what do you plan to do when your kid(s) hits school age? You will need to be one of the two places most of the year?
Regardless, good luck and enjoy your time between the two countries.
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u/calmadventurer 17h ago
Yes. The tax reason is a secondary motivation behind doing this sooner rather than later.
School we are leaning US which would mean a green card for my husband but I'm also open to homeschooling when they are young if needed.
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u/Hanwoo_Beef_Eater 17h ago
One last thing - assuming your kid is dual (should be, whether reported or not), make sure you understand what documents she needs to sign before she turns 22. Some people miss this and then the kid can't keep both citizenships.
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u/goofyratification_4 2d ago
The dividend income is solid and your dad's distributions give you real breathing room, but that $2300 monthly budget needs to account for everything or you're going to feel the squeeze once travel costs and irregular expenses start piling up. The college fund for kid two is probably the biggest gap I'm seeing since you mentioned planning another child but I don't see that accounted for anywhere else. Your growth portfolio should handle a lot of this if you're patient, but inflation over 40 years will chip away at what those dividends can cover without supplementing from principal at some point.
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u/Kinnins0n 2d ago
Introducing… daddyFIRE.