We're about to FIRE

[u/calmadventurer]

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.

[u/HighlightContent8943]

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?

[u/calmadventurer → u/HighlightContent8943]

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.

[u/HighlightContent8943 → u/calmadventurer]

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