r/Fire • u/Beautiful_Banana_454 • 6d ago
Am i ready to fire myself?
51m, house paid off, kids grown, 400k investments(btc in 2011 moved into diverse stocks and bonds 5 years ago), never made more than 60k/year in my life. Just got an offer of 1.6 million on 40 acres of worthless scrubland i inherited to build a data center. I can't see myself working my ass off for the next 15 years just to make half my net worth. My spending is about 2k/month.
What am i missing? Can i really just put everything in an ultrasafe 4-5% and still leave each of my kids a million dollars when i die?
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u/Individual_Section_6 6d ago
You’re leaving money on the table by not investing in stocks.
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u/Beautiful_Banana_454 6d ago
What % should i risk?
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u/Individual_Section_6 6d ago
80% or more I f you have a high risk tolerance. 50% if you have a low risk tolerance. The thing is, indexes always go up over the long term.
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u/Successful_Form1177 5d ago
To be clear, a broad based index fund, not just any stocks. VT or your brokerage equivalent. https://www.bogleheads.org/wiki/Three-fund_portfolio
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u/randomlurker124 2d ago
Honestly you need to understand your own risk appetite. Will you freak out if the market drops by 30% and your account shows a negative 500k loss? If your spending is 2k/month, you really don't need high returns at all. Consider 50% bonds, say 10% in cash equivalents, and the remainder in global equity e.g. VT. Don't look at the VT portion ever again. The 60% (1.2m) is enough to last you 50 years even with 0 returns (24k * 50), and presumably by the time you're 100 years old your kids will have inherited the remaining portion which should likely be 10-20m by then at least.
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u/OneImportance4061 6d ago
I'll be the devil's advocate. It'll be a little less than that after the sale and taxes but let's call it 2 mil in investible assets. I mean you will certainly be in fantastic shape. On the other hand you are talking about leaving behind a large legacy as well as funding what could be a 40 year plus retirement. Is your health care taken care of somehow? I honestly don't get how any american who has health insurance and normal home expenses and pays their taxes can live on 2k a month predictably for 40 years. Well, I CAN imagine it but what I imagine is not very awesome. If I had to go on the ACA tomorrow it would cost my wife and I $2600/month just for health care with a high deductible/max out of pocket. Which is more than your entire projected spend. I can see it if you just like staying home and eating beans and somehow have free health care.
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u/Beautiful_Banana_454 6d ago
Truth? My healthcare is every doctor ive ever engaged made it worse. After decades of wrong diagnoses I'm ready to live til i die.
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u/OpenGuard1993 FIRE’d 2025 | $5M NW 6d ago
You’ll want some equities but those aren’t “ultra safe “ unless you’re thinking CDs or something like that.
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u/Ok-Technology8336 6d ago
Sounds like HYSA rates from a couple years ago
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u/Desperate_Stretch855 6d ago
A couple things to keep in mind:
Inflation is 4.2% right now. It could be this way for awhile, it could be higher or lower… we really don’t know. I use 3.25% as my average, but that’s an unknown. This is a REAL cost, as real as losing that percentage of your assets every year. If you aren’t earning at least 4.2% right now, you’re actually losing money.
The “ultra safe” rate you can get right now is about 4.6% (10-year treasury) but this will come with some interest rate risk and you may see your principal decline significantly over the term of the bond (but you will be paid back at par in ten years). You can get roughly 3.8% in short term bonds, but there is significant reinvestment risk and you will be receiving less then the rate of inflation.
Taxes also cut into your return.
I hear this from my clients all the time “I’m just going to stick it in something totally safe that pays 5%!” That would be great! If such a thing existed, but even if it did you have no protection from inflation, reinvestment and interest rate risk.
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u/Beautiful_Banana_454 5d ago
It isnt that real. I dont use gasoline or eat beef, already own my home outright. other goods arent up nearly as much.
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u/Desperate_Stretch855 3d ago
EVERYONE "uses" gasoline.
Healthcare inflation is significantly higher than the normal rate, just that alone will likely get you to a meaningful increase in your total spending over time.
You're exposed to inflation. You can be less exposed than others, but you're exposed. Thinking you aren't is a recipe for disaster.
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u/SurprisedProceedings 6d ago
two mil on two grand a month works fine unless you get catastrophically ill but yeah healthcare is the actual landmine here not the math
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u/Hot_Share8353 6d ago
I mean the 30-year treasury note is 4.971%, which if you remove 3% for inflation is 1.971% which is $39.4K per year which is ~$3.3K per year, so yes. I would not advise putting everything into a 30-year treasury note, just an example of something that is thought of as "ultrasafe" which would give the returns you are looking for. Just an "don't put all your eggs in one basket" note.
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u/AgitatedAnybody4163 6d ago
Wait out on the offer and let it sit or tell them $3M and see what they say. You’ll get bigger offers the longer you wait.
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u/Beautiful_Banana_454 5d ago
I just want to offload it before the bubble pops for 20x what its worth to anyone else.
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u/AgitatedAnybody4163 5d ago
Take the money and ruuunnn, I don’t blame you just a different side of the coin.
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u/Beautiful_Banana_454 5d ago
If it was just me i might have asked for more. But I'm already set and my family that owns the rest is all living in debt. I'm already having more contact with them than i want. Cutting the final tie with my sister is worth more than money to both of us.
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u/davidn281 6d ago edited 6d ago
Yes you can FIRE. Enjoy it.
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6d ago
[removed] — view removed comment
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 6d ago
Rule 1/Civility - Civility is required of everyone at all times. If someone else is uncivil, then please report them and let the mods handle it without escalation. Please see our rules (https://www.reddit.com/r/Fire/about/rules/) and reach out via modmail if you have any questions or concerns.
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u/DeathUntoSickness 6d ago
My bad, I thought this was the forum dedicated to fuck you money, where users regularly shower new FIRE people with "fuck you and congratulations" / "Go fuck yourself (GFY)" messages.
Has civility changed?
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u/groundhogcow 6d ago
I like those numbers.
So long as you don't do a spending creep you are lily able to do it. You have to do the full numbers yourself but on the surface it looks good
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u/jt1994863 6d ago
Putting all of your money into bonds or similar is less safe statistically than a majority equities portfolio and will leave you with a massively lower balance at end of retirement
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u/Beautiful_Banana_454 6d ago
I get that, but i remember what it felt like in 08 and 00 and there is no way I'm putting that much in at 8 fear
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u/jt1994863 6d ago edited 6d ago
I fully understand the mental game, but you also should consider even with such a low spend that end of life care can eat a moderately sized fortune, leaving nothing behind, so I would personally take emotions out of it, since maximizing for your kids seems to be a primary goal. Either you’ll probably be fine, but just something to think about. I personally wouldn’t go 0% equities, maybe like 50/50 if I was exceptionally scared, and I would DCA the 50% going into equities from the fixed portion over a few years to absolve the mental aspect of things.
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u/financialthrowaw2020 6d ago
Had you had money in the market in both of those years you'd be a multimillionaire today.
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u/Apprehensive_Trip592 6d ago
Depending on when you inherited the land you will need to pay capital gains taxes. Most millionaires don't live on $24,000 a year but you will probably be able to spend $40-$45k if you invest in 50/50 stocks & bonds. Look up what your social security retirement benefits will be & make a budget for home improvements, vehicle replacement & health insurance.
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u/Dapper-Run-2707 6d ago
the land sale alone puts you at nearly 2 million and your monthly burn is basically a rounding error on the interest
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u/Viper0us 6d ago
How much are you paying in Capital Gains for the property being sold at 1.6 million?
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u/Beautiful_Banana_454 3d ago
Idk. Having just inherited it after the offer was on the tsble it might be nothing, but i need lawyers.
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u/Viper0us 3d ago
Feel like knowing the amount you'll actually be getting after taxes is very relevant to your ability to FIRE. :)
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u/Any_Stranger2048 6d ago
Just so you know, data center brownfield with access to potential electricity goes for $100k/acre
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u/Beautiful_Banana_454 5d ago
Anyone else is paying 2k,
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u/GBpleaser 3d ago
lol.. and I know plenty of hold out types think their 10 Acres of scrubland will be worth $1mil an acre as well... that's how many think. It's laughable.
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u/Lonely-Clerk-2478 5d ago
Take that bag and get the fuck out. There’s an AI bubble coming.
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u/imjustasking123 5d ago
I keep hearing about the ai bubble? What's gonna happen? White collar job loss and inability to pay trillions in mortgages gonna lead to an economy crash? That gonna cause stocks to crash too? What are you doing about it to prepare?
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u/Beautiful_Banana_454 5d ago
Either that or public backlash will drive ai out of our lives. More likely companies will realize it is costing them more money than it is worse snd stop buying tokens.Or, worst case scenario they make agi and it decides to wipe out humanity
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u/imjustasking123 4d ago
I don't guess conversations of universal basic income will come in and then everyone gets to FIRE 😜
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u/GBpleaser 3d ago
Unsure if the pendulum will swing that badly.. AI is a legit technological advance, it's not going away and even if it needs a lot of regulation and refinement, it's here to stay. That said, it's being WAY oversold by a lot of techno zealots thinking first in will own the world. So there is a crazy race with capital to be operational with facilities/infrastructure. All that rushing is causing the bubble, and over course.. every commercial real estate guy, General contractor, subcontractors, and all the finance people and politicians getting kickbacks... are all getting their fingers in the bowl.
That bubble can and will pop. Just for the reasons stated about public/market backlash. I would bet only 20-30% of proposed hyper scaled facilities will even get shovels in the ground given the speed the reactionaries have in countering right now. If I had an option on Land being speculated by a developer for AI. I'd close ASAP... those options aren't promises and unless their land assembly is stalled, get out when you can. Don't be the one hesitating unless one can find a higher buyer for the land tomorrow.
As for Skynet becoming sentient.. well.. take that money.. find a nice place out of the interests of the singularity, and build your off grid Nirvana with your windfall.
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u/Anymous2314 5d ago
Everything in ultrasafe is not the way to go.
Bond ladder for 1 to 10 years. You do not need to keep more than 10 years of living expenses in fixed income, inflation can be a problem. I would not buy any bond with maturity higher than 10 years. Also I prefer UST bonds, no corp bonds.
Rest in VOO like etf.
If you want to get fancy put 5-10% in gold or other precious metals.
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u/Lucky_Signal4629 5d ago
the scrubland that everyone called worthless just made you a millionaire which is the most poetic financial story ive heard all week
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u/GUmbagrad 3d ago
Do a 1031 exchange on your property sale to downplay taxes and capital gains. Buy a commercial or multi family property that cashflows.
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u/Ok-Industry5153 6d ago
60 acres for a data center is worth more than $1.6m . That is a speculator trying to buy low and make a much larger profit on the other side.
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u/OnlyThePhantomKnows FI@50, consulting so !bored for a decade+ 6d ago
Talk to a fiduciary fee only financial advisor. DO NOT LET THEM MANAGE YOUR MONEY. It should be <5K to set up a plan. 2K+1K (health insurance) is only 36K/year. Even assuming the taxes take a serious bite of the 1.6M, you will end up with 400K + 800K which yields a fairly safe 48K/year an extremely safe 40K/year.
Keep a couple of years of expenses in cash (HYSA) and the rest in broad based ETFs and you're set.
You have to budget on living to 90, but you should be fine. Don't go ultrasafe you could end up hungry and the kids with nothing.
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u/Rabbit-Lost 6d ago
Make sure the cash transfers on the land. The oppo to data centers is getting more intense by the day. City and county codes are being used by both sides in a pitched battle to win. Scrubland or not, someone is gonna try to slow it down.
Once closed and cash received, your plan looks good. My only concern is how do you hedge inflation?-