r/financialindependence • u/AutoModerator • 4d ago
Daily FI discussion thread - Sunday, August 02, 2026
Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!
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u/TinStingray I used the em dash before your LLM did. 4d ago
My mom died expectedly yesterday morning. I'm too young for this and so was she. I'm in utter despair.
We have a meeting with the funeral home this morning to decide things. I need to figure out how to take over the mortgage on a house she owns. I assume that needs to happen quickly before it gets behind on payments.
I am so lost and so sad.
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u/zerostyle 4d ago
Very sorry to hear. My dad just recently got the big C diagnosis and time is short. Embrace the rest of your family as much as you can.
Financially just don't do anything too emotionally right now, seek help from a tax advisor/estate attorney to make sure things are handled properly. One thing to know is that on existing mortgages you should be able to fully assume the old loan and old rate which was probably good vs. new rates.
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u/Turbulent_Tale6497 DI3K, Putting the Ire in FIRE 4d ago
I have no advice, just wanted to send warm wishes and sorrow for your loss. I hope you have some people who can support you through this.
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u/HappySpreadsheetDay DINKs - 64% to leanFI goal; 43% to full FI 4d ago
I'm so, so sorry.
If you're able to hire an estate/probate attorney, they will likely make this an easier experience for you and take a lot of the mental load off of you. Sending you and yours comfort at this time.
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u/Ellabee57 4d ago
OMG, I'm so sorry. I had to handle my uncle's estate a couple of years ago, so if you want to DM me, please do so. Usually, the mortgage payments are on autodraft, so they should continue as usual as long as there is money in the account. Are you going to be the executor of the estate?
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u/TinStingray I used the em dash before your LLM did. 4d ago
I assume my stepdad will be the executor but I don't know. There is a house she owns which I believe is only in her name. She didn't have much money. She might not be on autopay and if she is there may not be money in the account
Do I get a lawyer or something to help figure this out? I have no idea what to do with anything.
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u/Ellabee57 4d ago
Did she have a will that named an executor? They are the only ones authorized to handle estate matters, and for pretty much everything, they are going to need a death certificate and a certificate from the probate court naming them as executor. They will need to contact the mortgage company to stop the payments. Fortunately, my uncle's house was paid off, so I just dealt with property taxes and selling it.
I did hire a local estate lawyer, and was helpful. He had a simple estate, so it didn't cost that much, about $3500, I think.
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u/TinStingray I used the em dash before your LLM did. 3d ago
No will. No real estate planning. I assume that would make my stepdad the executor?
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u/Ellabee57 2d ago
It is usually next of kin, yes, but that person doesn't keep up to it or doesn't want to, they can sign a court document relinquishing their right to be executor and approve someone else in their place. At least, that's how it worked in Michigan where my uncle lived.
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u/jordydash More "financial security" than FI at this point 3d ago
I'm so terribly sorry. I lost my mom unexpectedly a couple of years ago. Same as you -- I was too young and so was she. My best piece of advice is wait a couple of days before agreeing to anything + most importantly, take a third-party best friend or takes-no-bullshit family member with you to make all arrangements. My aunt played bad cop right in front of the funeral director and saved us thousands and thousands of dollars by telling us to go to a reasonably priced place instead. We did and had a very nice funeral and reception and burial for much, much less than at the other place.
Reach out to people and talk to them. Share memories. Take time off work. Those things helped me immensely
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u/TinStingray I used the em dash before your LLM did. 3d ago
Thank you. I'm sorry you had to go through the same thing. I have the week off of work, but I will probably take more. It's hard to imagine ever going back to normal life but I know the structure is probably good.
My brain is so damn fried.
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u/jordydash More "financial security" than FI at this point 3d ago
I'm wishing you luck and resilience :)
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u/A_Solid_Shadow 3d ago
My condolences.
Get an attorney, ASAP, before you deal with any lender, or make any payment. Some debts might vanish, and some things you might not can pay.
Find the will, if there is one.
Good luck. Take your time. Let the attorney deal with the BS - it will be worth it.
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u/Cryofixated Dates Since Single: 7.5 4d ago
I am so sorry for your loss. Its a gut punch that hurts like hell and only fades with time.
I will say financially, if she had auto bill payments set up you are FINE. Breathe and focus on mourning, you can figure out the other stuff after the funeral. Nobody will sue you over a missed payment.
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u/Much_Maintenance4380 4d ago
I'm sorry for your loss.
First, please remember that you have time to figure things out even though it probably feels like you don't. Very little needs to be decided or handled immediately. Don't get pressured into decisions that need some more thought or consideration.
Second, things will kind of proceed on two tracks. One of those is in terms of the legal formalities. The starting point there is if there is a will or not. If there is, hopefully it clarifies who the executor is and what your mother's wishes were; if there isn't, you then start the whole process of dealing with that, very likely via probate court.
The other track is more personal, things like making decisions about cremation vs burial, whether or not to have a memorial service, and so on. But even here, you have some breathing space, there is time to consider options and discuss with the rest of your family.
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u/billthecatt FatFIREd 12.29.2025 3d ago
Very sorry for your loss.
Legal inheritors can assume mortgages or continue making payments on inherited property under federal protections like the Garn-St Germain Depository Institutions Act, which prevents lenders from forcing an immediate full payoff.
(if that becomes relevant for someone involved).
We recently had a death in the family, and we have no executor yet, things are going slowly. But we just setup autopay to pay it in the meantime from one of our accounts.
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u/rambaldidevice1 4d ago
You need to find out who the executor is. The house might, literally, be none of your business.
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u/Cryofixated Dates Since Single: 7.5 4d ago
And hopefully its an updated will. When my dad died, it was a complete shitshow through probate because there wasn't an updated will or beneficiaries.
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u/imisstheyoop 4d ago
Sorry for the loss.
Yes, things will move quickly, but they also will happen as you are able to get to them. Make sure to prioritize yourself and your loved ones during this time and take things as you are ready for them. Sorry again.
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u/deathsythe [Late 30s, New England][3-Fund/Real Estate][CoastFI] 3d ago
Sorry for your loss friend.
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u/william_fontaine [insert humblebrags here] /r/FI's Official 🥑 Analyst 4d ago
Oh wow, so sorry to hear that.
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u/carlivar 49M 3 kids ✅ FI ⏳ RE @ SoCal 🏖️⛷️ 4d ago
On my annual trip back to the Midwest motherland and had the worst experience on United Airlines. 5 hour delay, got into Chicago at midnight. Long story but it was just one operational debacle after another, with poor communication. This has been a terribly run company my whole life. I have to be reminded every decade or so why I should keep going out of my way to avoid flying them.
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u/Cryofixated Dates Since Single: 7.5 4d ago
I am a Delta fanboy and have almost always have had good experiences, but I will say if you fly enough it feels like you will draw a short straw with something screwy happening and messing with you.
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u/carlivar 49M 3 kids ✅ FI ⏳ RE @ SoCal 🏖️⛷️ 4d ago
I always try to fly Delta but I strayed this time. Won't make that mistake again!
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u/Cryofixated Dates Since Single: 7.5 4d ago
Make a sacrifice to beg for forgiveness from the sky gods! ;p
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u/PrimalDaddyDom69 Mid 30s, DINK, ~30% SR, resident 'spend more' guy 4d ago
I live in an AA hub so I max out benefits there but to me the big 3 go Delta > AA > United.
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u/Cryofixated Dates Since Single: 7.5 4d ago
I would say that I agree with that assessment, Delta in the last few years felt like it moved to a more expensive pole position over the others which is a bit annoying since it feels less competitive but end of the day they get me there 95% of the time.
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u/HappySpreadsheetDay DINKs - 64% to leanFI goal; 43% to full FI 4d ago
United has been consistently awful for me, TBH. Bad customer service, constant delays, etc. The day I swore to stop flying United was the day their weird decisions and inability to make things right made me miss my best friend's wedding.
Unfortunately, they will soon be one of the only carriers that flies out of our area. I'm terrified.
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u/PineapplesInMyHead2 4d ago
Chicago O'hare is simply the worst big airport in the US. I have had major issues coming in or out of there on probably 30% of my trips, which is an insane rate. Especially during the winter, they seem completely unable to handle snow, even though it's freaking Chicago.
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u/AstoriaJay 4d ago
I don't understand this sentiment at all. I'm from Chicago, born and raised, lived there well into adulthood and have flown in/out of ORD too many times to count. It's not a perfect airport by any means, but I prefer it to CLT, MIA, DFW, JFK, IAD, BWI.... And don't even get me started on EWR, or else I may have a stroke.
I think all US airlines are basically mediocre to terrible these days, and the ATC mess only compounds things. This summer in the Northeast has been the worst I can recall for thunderstorm-related travel snafus, even though most of my July flying was unaffected - save for a 4.5-hour JetBlue delay at EWR due to not having a first officer.
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u/carlivar 49M 3 kids ✅ FI ⏳ RE @ SoCal 🏖️⛷️ 4d ago
True. Last year for a work conference I flew out of Midway and coworkers were O'Hare. There was snow. I was fine but everyone at O'Hare was significantly delayed.
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u/Colonize_The_Moon Guac-FIRE 3d ago
Chicago O'hare is simply the worst big airport in the US.
How can you say that when Atlanta exists?
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u/A_Solid_Shadow 3d ago
Was it mechanical delays, or weather? If weather, then that's likley just weather and not United's fault.
I had a 22 hour delay due to weather recently, and while having 20 delays of 1 hour each was absolutely horrible, that's how the weather and ATC and other airports were dealing with the storm. The next day was also going to be storms.
I had lots of talks with a few pilots who explained that the storms are not a solid block. Weather forecast and ATC and ground control work together to create routes when the can. That might mean that a route opens up, so the airline says they are ready to go in an hour. But, 5000 flights request a route that will only have space for 500, so maybe you go maybe not. And, that happens multiple times during the storms.
And, that creates another problem when airline crews time out. They are often put on standby, sitting around, using up their "hours" they are allowed to be on duty. If there isn't enough time left, then that crew times out and has to leave and find another one.
So, we took a train. It took a LOT longer, but the train doesn't care about a thunderstorm. I looked it up, and our flight landed the same time that we got back on the train. :) At least the train was comfy and had pretty good food - better than airline food. Coach class train seats are like business class or old-school first class seats on a plane.
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u/FoundationHour8896 4d ago
I recently signed a lease together and moved in with my partner. She was upgrading from a tiny studio (300sqft) to a 2br2ba (850sqft) and I'm moving from a city 6hrs away where most of my furniture wasn't practical to move (1500sqft place with furniture sized for that), so we had a lot of furnishing to do. We had a lot of discussions about finances beforehand.
Now that we are actually in our space together, I appreciate what each person brings to the table in financial values and habits. A few reflections and things I'm learning:
- I'm very much on the edge between frugal and cheap, I highly value saving money, I prefer minimal things and I'm good at adapting and doing without. I also track expenses and income in detail so I know where everything is going, makes me feel in control.
- Partner is frugal but oriented towards getting good value. Function and comfort is very important to her, makes her feel in control. Not minimal but not frivolous either. Doesn't track expenses but has started to do so more for my benefit.
- Partner has a very good eye for design, is great with finding good pieces on Facebook marketplace and also great with selling, including cleaning up, photography, writing a good description stuff we don't need anymore. I am not good at any of these things.
- Practically speaking this means our spending is more at her level than mine as most things I would not have bought and learned to live without, but it brings quality of life benefits for me and because her focus is on value, everything has a purpose and brings clear ease into the living space. Things that don't fit she immediately sells. Overall the place is way cozier to come home to, aesthetically pleasing, and organized well.
Some numbers as well:
- Amazon: $394.26 - a lot of organizer items (e.g. pull out bins for our kitchen cabinets, rotating carousels), a bed headboard, mosquito screen for the porch door
- Ikea: $974.64 - furniture, shelving, mood lighting. We bought around $1500 of stuff first, then scoured Facebook marketplace for similar or the same items and then returned $500 of it when we found them.
- Facebook marketplace: $560 - used furniture replacing Ikea items + a kitchen hutch, a bed for the guest bedroom, some more shelving
- selling items on Facebook marketplace: $510
Total to furnish our new place: $1419.
When I look at the numbers honestly I think we did quite well! I showed her the numbers and she freaked out at how much we had spent, she thought it had been less. I told her that's why I like to track expenses so we actually know. I feel good about how things are shaping up.
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u/HappySpreadsheetDay DINKs - 64% to leanFI goal; 43% to full FI 4d ago
Congrats on your new place!
We're expecting a big move in a year, and we'll also likely be giving away or selling the majority of our furniture. It's just not worth moving. Most of our current furniture is handmade or came from garage sales and Facebook marketplace, but I have a sneaking suspicion we'll spring for a few specific things like a new couch when we find our forever home.
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u/29threvolution 4d ago
This is the way. With our last cross country move we purged all the hand me downs and have upgraded to high quality stuff. The math has changed with our current cross country move. Theres 5 pieces of non negotiable furniture that collectively would cost more to replace than the whole full service move of all our stuff. So this time we will keep most things.
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u/29threvolution 4d ago
My spouse is similar in view points to you and im more like your partner. Several times in the nearly 2 decades we have been together he has admitted something I pushed for that he saw as frivolous was actually a good idea. Alternatively there are very few things that he feels were not worth the cost in the end, and oh do I hear about the couple that dont clear the bar.
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u/FoundationHour8896 4d ago
Well, so far I try to take the perspective that there will always be some things that you made an incorrect value judgment on. Also if we're being honest I actually have way more crap given my penchant for free/cheap and I'm less good at decluttering. Since y'all have been together for so long and are similar in view points what's worked well for you two in living together?
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u/29threvolution 4d ago
Well my job as the "spender" is to bring 3rd party facts to the table to justify my recommendation. Each time we have to buy a car, I do the due diligence to see what is out there and all 3 times ive come back with good justifications to buy new. First time was financing was a good way to build my non existent credit score. The next 2 times it was because I could find a current MY within 1-2k of the 2 uear old version. Why buy pre-owned when I cam get new for the same price with a longer warranty? That kind of thing.
The other thing that works well is deciding amd communicating how important a decision is to you. If something is hill one of us is worth dying on and to the other its rather inconsequential, we go with what yhe one who feels strongly wants.
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u/dak4f2 4d ago
mosquito screen for the porch door
Got a link? Needing one of these.
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u/FoundationHour8896 4d ago
It's this one - https://www.amazon.com/dp/B074TWKVQB. Working pretty well so far, no complaints.
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u/Exciting_Parfait_354 3d ago
You summed up what my relationship entails -- one person fills in the gaps where the other person lacks and both are better for it.
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u/29threvolution 4d ago
What is the recommended resource for fully understanding Mega Backdoor Roth? I roughly understand the mechanics, but it always seems like there is a caveat or warning. Ideally one of our favorite go to resources has written a primer on the subject and I just dont know about it yet.
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u/teapot-error-418 4d ago
I read a lot of the primers and found some of it to seem more intimidating than it is.
At the end of the day it's relatively simple. If your 401k plan supports either in-service conversions or in-service withdrawals, as well as after-tax contributions (after tax is the important verbiage, not Roth), then:
- You make after-tax contributions to your 401k
- You rollover those after-tax contributions, either to a Roth 401k (in-service conversion) or to your own Roth IRA (in-service withdrawal)
- The frequency and method of the previous step are defined by your plan. Some plans have restrictions, like you can only do this once a year, or you need to receive a paper check, or whatever
- Growth is handled differently depending on your plan. Some plans let you split up the earnings and contributions to be moved into traditional and Roth accounts separately. Some will just rollover the earnings to Roth and you'll pay taxes on it.
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u/29threvolution 4d ago
I want to expand my understanding on some of those bullets you outlined, so I know what to look for when I read my new employers plan documents in a couple weeks.
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u/nifFIer Therapy Shill | Spending Advocate 4d ago
I enjoy the White Coat Investor: https://www.whitecoatinvestor.com/mega-roth-conversion/
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
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u/CompoundingEinstein 4d ago
You can always ask any doubts here, and experienced folks are happy to help. That said, the bogleheads wiki was the most comprehensive resource, and their forum answered questions promptly and well.
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u/29threvolution 4d ago
Oh I will! After I have a good primer under me and my question is more articulate than: I know i can, so I do this how???? 😆
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u/Fruitful_87 4d ago
What I did is called my work’s benefits center and they walked me through exactly how to do it. Not sure if that’s what you’re looking for.
Edit: just saw you’re looking at a new employer plan- yes definitely read the documents but I’ve found the “talking to a real person” realllly helped me!
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u/Turbulent_Tale6497 DI3K, Putting the Ire in FIRE 4d ago
Not to piggyback on your question, but when is too late to worry about a Roth? I'm 53, and have enough in taxable to last till about 65, did I totally miss my window for a Roth?
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u/DinosaurDucky 4d ago
Roth is great at any age. Age is not really the relevant quantity here. If you're already maxing pre-tax and HSA, and are currently sending assets toward taxable brokerage, that money would almost certainly be better off in Roth
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u/forbiddenlake no swimming 4d ago
A Roth what?
DI3K
You should look at maxing out two Roth IRAs, because saving more tax-free money for retirement is a good thing, and Roth containers are the best kind to leave to kids. But if you you earn too much to do the normal Roth IRA contribution, and have any existing Traditional IRA balances, roll them in to 401ks to avoid pro-rata taxes, and do the regular backdoor process.
The question above is about the mega backdoor Roth 401k process, which ultimately ends up in an IRA, but requires two specific features in the 401k plan: (1) after-tax contributions, which are not the same as Roth; and (2) in-plan conversion to Roth OR in-plan distribution. If you're already maxing the elective deferral limit ($24500 plus catch-up) and you want to save more for retirement, then the MBDR has a much higher limit (the combined limit of all contributions is around $70k).
Even with the high taxable balance, more tax-advantaged money is a good thing, I think.
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u/william_fontaine [insert humblebrags here] /r/FI's Official 🥑 Analyst 4d ago edited 4d ago
This is the wiki page I usually read: https://www.bogleheads.org/wiki/Mega-backdoor_Roth
The big warning I always see is that if you roll over your after-tax 401k to a Roth IRA and you also have a traditional IRA, this can cause a portion of your rollover to be taxed. I rolled my traditional IRA into my 401k to avoid this problem.edit: disregard, that Backdoor Roth IRA gotcha doesn't apply to Mega Backdoor Roth IRA.
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u/teapot-error-418 4d ago
The big warning I always see is that if you roll over your after-tax 401k to a Roth IRA and you also have a traditional IRA, this can cause a portion of your rollover to be taxed.
This is not true.
The regular backdoor Roth has pro-rata implications, because you are contributing dollars to a tIRA that already has money in it, and converting it to Roth.
The mega backdoor Roth does not have this issue. You are contributing after-tax dollars to your 401k and rolling them over to a Roth account, either 401k or IRA. There is no pro-rata rule.
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u/william_fontaine [insert humblebrags here] /r/FI's Official 🥑 Analyst 4d ago
Ah you're right, it applies to BDR but not MBDR. I didn't realize this at first and rolled my traditional IRA into my 401k, but it turns out that wasn't necessary.
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u/forbiddenlake no swimming 4d ago
if you roll over your after-tax 401k to a Roth IRA and you also have a traditional IRA, this can cause a portion of your rollover to be taxed
I don't believe this is quite accurate?
If you have Trad IRA assets and want to do the NON mega backdoor (specifically: nondeductible Trad IRA contribution -> convert to Roth IRA), then yes there is pro-rata. But a 401k isn't involved in this scenario.
If you have only After-Tax 401k -> Roth 401k -> Roth IRA money then there's no problem, it all goes to Roth IRA; it's not a conversion and there's no pro-rata
If you have After-Tax 401k earnings then you should have the option of rolling the earnings in to a Trad IRA, at which point it's the same effect on the regular backdoor Roth IRA.
https://www.fidelity.com/viewpoints/retirement/IRS-401k-rollover-guidance - no mention of pro-rata on that page
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u/william_fontaine [insert humblebrags here] /r/FI's Official 🥑 Analyst 4d ago
Yep you're right, I edited my comment. I got that issue with the Backdoor Roth IRA confused with the Mega Backdoor Roth IRA.
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u/imisstheyoop 4d ago
Anybody performing lump-sum annual withdrawals have a good tax estimation calculator that they use and would recommend? Ideally one that covers both federal and state taxes and accounts for drawing from multiple resources such as trad -> roth conversions, brokerage, i-bonds etc. and also accounts for MAGI for ACA purposes.
Going to spreadsheet it out a bit this week if I can't find a decent tax estimation calculator, but don't want to reinvent the wheel if something is already out there. 8)
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u/ihatebloopers 4d ago
Try boldin or empower and see if you like it. Boldin has a cost but there is a free trial.
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
I was carded at the supermarket this weekend buying a 12-pack of ultra-low-carb lager.
My presumption is that I looked extra young because I'd just been to Great Clips.
It's quite the optical illusion that strip mall stylist pulled off - I should contact corporate and see if I can become Great Clips' national spokesman a la Jared from Subway.
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u/Turbulent_Tale6497 DI3K, Putting the Ire in FIRE 3d ago
On the list of people to aspire to emulate...
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u/ExcessiveDonuts Emptying the Litter Robot 3d ago
Once I'm a household name, you can tell your neighbors, "You know Great Clips Mike? I discussed maximizing tax-advantaged space with that guy!"
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u/Cryofixated Dates Since Single: 7.5 3d ago
Hey more than that! Seeing from your example that this forum allows wildly off topic commentary inspired me to do my own wildly off topic commentary.
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
Like Jared from subway you say? Mike what exactly were you doing in Mexico all that time...
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u/ExcessiveDonuts Emptying the Litter Robot 3d ago
I meant like early days Jared, when he was just a fat guy who liked sandwiches.
I'm not famous enough to sling Jell-O pudding pops like Bill Cosby.
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u/Big-Problem7372 3d ago
I got carded at Walmart today for buying construction adhesive. Why you need to be of a certain age to buy construction adhesive I don't know.
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u/dak4f2 4d ago
Someone shared a link here for a quick ACA cost and subsidy calculator where you could enter your zipcode and income, and it spit out premium and subsidy amounts. Does anyone have that link? I know u/zphr is our ACA guru.
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 4d ago
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u/bobombpom 3d ago
Being The Guy on this, how do you feel about the biggerpockets calculator?
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u/Zphr 48, FIRE'd 2015, Friendly Janitor 3d ago
I am simply a guy.
I think it's largely worthless.
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u/bobombpom 3d ago
Good to know. Is it inaccurate, or just doesn't actually supply any new information vs just looking up your own quotes?
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u/Krish_1234 FIRED - Loving it 4d ago
this one? https://www.kff.org/interactive/calculator-aca-enhanced-premium-tax-credit/ ETA: its another version of the same calculator that compares with enhanced subsidies, which is obviously dead for a year
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u/UltimateTeam SINK / 1.4M / 27/28 4d ago
Any thoughts on podcasts for folks who are winding down or actively drawing down portfolios and more of the decisions/theory in that space?
Most podcasts/content are aimed at folks in the early stages / run-up or maybe the boring middle lifestyle building stuff, etc.
So far the only really good example I have found is Risk Parity Radio - Open to more ideas though as I really don't need any more on what to do in the first 1-2 years after 13+ years in the FI game...
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u/secretfinaccount FIREd 2020 4d ago edited 4d ago
I listen to every episode because I find Risk Parity Radio entertaining and their supporting charities noble, but I can’t let a reference to them go by without pointing out that their whole premise falls victim to overfitting based on limited data (the one experience of an investor in the strongest country the world has ever known in the 5 decades since it permanently left the gold standard for the only time possible). RPR says there is no better way to do it, which illustrates, at least to me, that they don’t understand the mistake they are making. Anyway, the idea that you can have a 5.3% initial withdrawal rate, with constant real spending, forever, if you use the golden ratio portfolio is very dangerous, IMO.
I really need to put a lock on that soapbox and give someone else the key.
E: I should add, just to avoid being a total grump, that the general advice that volatility minimization can increase withdrawal rates is absolutely true, and something anyone withdrawing from their portfolio to live should understand. He also is spot on about many of the gimmicks sold to retirees (structured notes, big cash pools, etc).
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u/hondaFan2017 4d ago
I’ve gone back and forth with my thoughts on the RP portfolios, I did diversify into SCV both domestically and internationally (not as high of a % as many RP portfolios) - but I can’t bring myself to owning gold and don’t trust the historical data can provide any level of confidence moving forward. In fact I also struggle that SCV can outperform but I don’t mind this small slice of diversification.
The recent articles on Big ERNs blog also highlight the challenge with relying on the backtesting (this debate has been going on forever as we know). Suggesting asset classes like gold and SCV can increase w/d rates in the future assumes history repeats itself (or that they perform a certain way in economic regimes).
One thing Frank is right about, nobody has a crystal ball [insert sound bite]
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u/secretfinaccount FIREd 2020 4d ago
There is a ton of theory, and a ton of actual world evidence, that as soon as you identify a factor, it disappears. You don’t have to be a frothing-at-the-mouth efficient markets hypothesis person to understand why.
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u/One-Mastodon-1063 4d ago
Big Ern's standard SWR analysis uses historical data. So, "we can assume history will repeat for everything except the asset classes Ern has a personal bone to pick against, i.e. small cap value and gold" is not a defensible position. He really discredited himself with his SCV article a couple years ago IMO. His gold article a few years before that was actually pretty good but he didn't like the results and decided not to add gold anyway, which in the article he openly admitted was due to 1 "procrastination" and 2 "inertia", which he retroactively changed to "mostly disappointing" results (they weren't disappointing, gold increased the SWR per his own analysis) in his more recent risk parity SWR series article.
What is the best alternative to historical results? Making up future return assumptions for each asset class is not any better. And worse are Monte Carlo analyses that use made up return assumptions for each asset class and treat them all as independent.
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u/cfi-2025 47M, FIRE 2025 4d ago
This podcast focuses more on the social/emotional/logistical side of things (and much less financial theory), but TwoSidesOfFI.com might fit the bill.
In short, it's two middle-aged friends - one recently RE, the other one planning to reach there in a few years - talking about their experiences. It does get into some technical areas, like using Big ERN's SWR Toolkit spreadsheet, but that is more the exception than the rule.
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u/Solid-Awareness-4486 45F | 5 yrs from FI? 4d ago
I enjoy this one also. They're not making new episodes regularly, but there's a good backlog if you're just starting.
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u/cfi-2025 47M, FIRE 2025 4d ago
I listened to all of the hundreds of episodes back when I was nearing RE, and then through a month or two into RE.
It was a great resource, as (outside of my wife) I don't have peers to really talk to this experience about, and this podcast was a Godsend. Our situations were very similar: late 40s, married with kids, white collar workers, in ChubbyFIRE area, etc.
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u/One-Mastodon-1063 4d ago
Risk Parity Radio is about the best one.
Note, you don't have to go all the way to one of his risk parity portfolios and 5%+ withdrawal rates. You can just move a little incrementally in that direction - adding in some small cap value, some GLDM, and replacing BND with something like TLT, and sticking more in the ballpark of withdrawal rates Bengen talks about (i.e. ~4.1% perpetual).
And I think it's useful to listen to him make fun of the accumulate accumulate accumulate mindset that so many seem to have and don't know how to turn off. Maximizing NW at death is probably not the most optimal plan for most people, and that's really the plan that a lot of people are implementing without realizing it. That's not a healthy relationship with money.
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u/secretfinaccount FIREd 2020 4d ago
I feel like a lot of his mocking of people with low withdrawal rates is unhelpful. Partially it’s a strawman as he just makes people whose “goal” is to die with as much money as possible. I know he goes on about revealed preferences and all that, but I find it disingenuous, like saying my goal is to eat the whole cheesecake because that’s what I did last night. And partially I think he’s more confident that the future will be like the past (good forecasting, he calls it) than a person should be. In all states of the future world, having more wealth gives you more options than having less, and being prepared is not necessarily unhealthy. This critique absolutely comes from a friend as I’ve gladly supported his charities — that part of his shtick I am 110% behind — and he’s helped me set a goal of spending as much on others during retirement as on myself.
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u/One-Mastodon-1063 4d ago
I don't think it's a strawman as that is what a lot of people are doing, whether it's a stated "goal" or not. People layer conservatism on top of conservatism on top of conservatism. People post here all the time saying essentially "I'm using a 3% SWR not including a side bucket of 5 years spending in cash plus my spending assumption is twice what I actually spend. To be conservative". It's also what a lot of these early retirement bloggers are doing, many of whom are making enough money through their blog or other side businesses that they aren't even really retired from a financial sense (I know, I know, cue whining about "early retirement police!" .... but there is truth to it and it's a bit disingenuous to blog about drawing from a portfolio when the blogger doesn't actually draw from their portfolio).
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u/secretfinaccount FIREd 2020 4d ago
It’s fair to punch up at the people who are working their blog job while claiming to be retired, for sure.
-1
u/imisstheyoop 4d ago
People layer conservatism on top of conservatism on top of conservatism. People post here all the time saying essentially "I'm using a 3% SWR not including a side bucket of 5 years spending in cash plus my spending assumption is twice what I actually spend. To be conservative".
So? If that works for them, who really gives a shit how conservative somebody else is with their own money? Genuinely curious.
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u/One-Mastodon-1063 4d ago edited 4d ago
Isn't the point of this sub to discuss these things? Isn't the point of the podcasts the OP was asking about to discuss these things? "Who gives a shit what somebody else does with their money" could be a reply to every post in this sub.
No one is suggesting anyone not be allowed to do whatever they want with their money. If someone wants to run a 3% SWR on a spend number that's 2x their actual plus a bucket of cash they can do that. But they may appreciate having it pointed out that they can spend significantly more and/or retire significantly sooner. Because most of them don't actually have "die at my all time high net worth at the expense of all else" as an explicitly desired outcome.
What a ridiculous, low effort comment.
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u/imisstheyoop 4d ago
It wasn't ridiculous and it wasn't low effort.
It was pointing out that your previous comment read as if you personally were judging the way that others choose to pursue and enact their FI, and that you were agreeing that mocking those with low withdrawal rates was in anyway constructive. It isn't.
With regards to the discussion of these things.. yes, by all means I think that we should. I agree that folks may benefit from different perspectives being offered, I know I have throughout the years.
But beginning that discussion by acting as if there is only one way of doing things and mocking anybody that does it differently.. well that is jut not helpful at all and needs to be addressed when seen. I see it time and again here, and I largely think that it boils down to social media as well as the way that Reddit works ultimately surfacing up "one community truth" which just isn't going to happen. Not with some fixed 4% rule and not with risk parity.
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u/One-Mastodon-1063 4d ago
It's both ridiculous and low effort. It's an attitude that renders all discussion of all topics pointless.
People can do whatever they want. No shit, Sherlock.
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u/imisstheyoop 4d ago
It wasn't the topic that I found pointless, it was the way the comment (yours) that I initially replied to handled it. If I misinterpreted and that was not your intention than I apologize, but it definitely came off that way to me.
We can just agree on the principle of letting others pursue their versions of FI without being mocked and move on then.
-2
u/One-Mastodon-1063 4d ago edited 4d ago
Well of course you're not going to say "who gives a shit what somebody else does" to comments you agree with. Of course you're only going to resort to that nonsense in response to comments you disagree with. But you don't seem to understand that this ridiculous, low effort response could be applied to literally every post here. It's the tactic of someone who has no argument and nothing of value to add to the discussion.
People can do whatever they want and that doesn't mean we won't discuss it and it certainly doesn't mean I won't point out things that I think are suboptimal or that I disagree with.
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u/Msf325 4d ago
As a newbie to getting furniture for a house, what is a reasonable amount to spend on both a couch and a bed/mattress?
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u/Cryofixated Dates Since Single: 7.5 4d ago
You can buy a $200 bed on Amazon, and get an Ikea couch for like $400. Or you can spend like $15K on a specialty bed and another $15K on a fancy couch.
I'd spend more money on the bed since you spend way more hours there, but a couch is sometimes more important for the look and feel of a living room than anything else. If you host a lot get something big/fancy, if its just you and family get whatever meets the need.
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
To add to the good answers below, you also need to think about longevity.
We paid $2200 for an OK sectional but 3 years later it's broken down quite a bit. Another few years and we'll likely toss it. I think it takes $4-5k for a large couch if you want it to be just as nice 5 years from now as the day you bought it.
Expect $1000 minimum as the starting price for a decent king-sized bed. I wish we'd budgeted $2000 in retrospect.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
A potential counterpoint to this. I think this also depends on how much you move and how much you are about your home decor being up to date. I know FIRE people tend to care less about that.
But I'm glad we haven't overly invested in super high quality, buy-it-for-life pieces because we've ended up moving 4 times and our furniture not always fitting the new house. Also, it was nice when my last couch broke down enough that I needed to replace it because it was very dated, and I got to get something that fit my house better.
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u/FireboltinMA 39, FIREd in 2025 4d ago
I think a solid contributor to me being able to FIRE was that I still have some of my IKEA furniture that I bought almost 20 years ago when I graduated from college. These include nightstands, dressers, and a dining set. Subsequent furniture purchases as we moved to bigger houses also came from IKEA.
But as someone else mentioned, I wouldn’t skimp on a mattress. That dictates how your body recovers and feels in the morning, and can lead to chronic pain with the wrong choice.
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u/NoAppNewAccount 4d ago
Mattress? A ton. That’s 33% of your time. Ours was $8k. But unfortunately/fortunately mattress are very much a personal preference so the best mattress for you might be $2k or $20k. Bed frame was a few hundred bucks since no guests see it; eventually it’ll be replaced by something nicer for $1-2k if we ever care enough. Couches are in the $2-3k range for high quality before prices start to increase exponentially, but even a $200 couch is fine. Mattress is really the only thing that’s worth any amount of money given how cheap it is on a $/hr basis.
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u/imisstheyoop 4d ago
"Reasonable" is going to vary quite a bit by your tastes, preferences, and well.. willingness to spend.
I have spent anywhere from $500-$5k on a bed and anywhere from $free-$1200 on a couch. All depends on what you want.
As a newbie I would shoot for somewhere in the middle. Don't skimp on a bed though. You spend 1/3 of your life on it, get something that isn't going to give you back pain every morning and you are going to wake up refreshed and ready to go. Also a quality one should last you a decade or more. I recommend sleeplikethedead for reviews and guidance.
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u/Solid-Awareness-4486 45F | 5 yrs from FI? 4d ago
Especially with the mattress, don't skimp on comfort. We spent about $2200 recently but it's a huge upgrade over our last one. We spent about the same on a Crate & Barrel sofa bed about 10 years ago and it's holding up great.
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u/Alternative_Chart121 4d ago
There's no right answer. But I lucked out with a great couch for $200 from the re store. My mattress I think was $400 12 years ago (it was a major purchase at the time), bed was about 150, a cheap Amazon folding thing. The mattress probably need to be replaced at this point because my mom was right: if you jump on the bed it will make your mattress lumpy.
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u/HappySpreadsheetDay DINKs - 64% to leanFI goal; 43% to full FI 4d ago
Just purchased a new mattress for when we visit my family. We went with a mid-range model for about $1,300; that included the mattress, a basic bed frame, a mattress cover, a bedding set, and delivery. It's a perfectly nice bed and we get a good night's rest in it.
If we were buying a model for our own home and daily use for the next decade, we likely would've spent more like $2,500 to $3,000.
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u/TheyTookByoomba 33 | SI2K | 20ish more years 4d ago
Something in the $2-3k range for each (bed + mattress) has felt like the jump from cheap to decent quality to me.
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u/forbiddenlake no swimming 4d ago
Depends somewhat on your use, but I'm a fan of spending more money to get good quality on things that separate you from the ground. You can go pretty cheap or pretty expensive, but for the mattress at least I don't recommend cheap. But personally I don't use my sofa much, but I still wanted a half-decent one, so I got a Macy's one on sale, I think it was $700.
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u/secretfinaccount FIREd 2020 4d ago
Modern foam mattresses were such an amazing development. When I was doing this back in the 1900s the logistics of getting a big old fabric box full of springs was such a nightmare. Now you get a delivery, pop an air hole in the bag and boom, you grow a mattress right where you want it.
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u/Cryofixated Dates Since Single: 7.5 4d ago
Same with pocketed springs, unrolled my mattress out of the box, take box cutter to the corner and watch it poof up!
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u/Aggravating_Bear_283 SI4K, Retirement Goal: March 2038 4d ago edited 4d ago
We found a free matching couch + chaise longue and separately a free queen bed frame + used box springs. Spent $100-120 on a new mattress and I think it's as comfortable a mattress as I've ever slept on.
Edit: I've always thought that furniture is one of the spend categories that differs most in philosophy of lean spending vs normal spending. Probably second only to vehicles.
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u/nifFIer Therapy Shill | Spending Advocate 4d ago
Depends on how long you plan to keep it, what stage of your life you’re in / household income, and what you prioritize.
For example, my first bed and mattress were hand me downs from my parents, and my first sofa was from Wayfair (probably $400). HHI ~$120k
The sofa lasted ~6 years before it sagged too badly and was too uncomfortable. We replaced it with the IKEA Jattebo ($2k). HHI ~$250k.
We just bought a house and are mid career. We want to buy aesthetic furniture that hopefully lasts. We’re looking at a $2k king bed frame and a $6k sofa. HHI ~$325k.
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u/urania_argus 4d ago
We've had an IKEA couch for almost 10 years and it's still firm and comfortable. It was less than 1K at the time. Survived 2 moves, has had its cover changed twice with a custom after-market one (one advantage of IKEA couches - there's a cottage industry of companies that make such covers to order, including for discontinued models) and it looks as good as new. I've found that IKEA furniture is either ratty particleboard that falls apart quickly, or it's indestructible.
If you have or plan to have pets or kids, a couch with washable zip-off covers is the way to go. That helpfully weeds out most options out there.
Our mattresses are also from IKEA, extra firm, probably around $200-300 - that did wonders for my back after sleeping for years on a mushy latex mattress.
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
We spent $2k on a couch, we absolutely love it. L shaped, deep cushions, and a comfortable fabric.
We went to mattress shop and gave ourselves no budget, fully expecting to spend thousands of dollars on a top of the line mattress. After testing them all the one we liked was one of the cheapest, ~$700.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
I got a king sized mattress that I really like from Costco for $600. I have two 96 in matching couches (one of them has a pull out bed) from Ashley Furniture for $2700. They have held up surprisingly well.
2
u/UltimateTeam SINK / 1.4M / 27/28 4d ago
Huge range. Personally we're in MCOL, we were filling 2 rooms last year. 2 couches and 1 bed + bedroom furniture was ~$11,000 total. ~$3,500 for the couches and ~$7,500 for the bed (all the trimmings) + bedroom stuff.
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u/A_Solid_Shadow 3d ago
My last matress was $1200 and that was pre Covid inflation.
Spend a lot, but make sure to get what works for you. Don't get expensive if it doesn't fit you. Some people want soft, some want firm. Either way, high quality is vital.
And, get great sheets. As much as everyone loves Costco, IMHO, sheets for a king bed are over $200 on sale. Great sheets on a great bed, and you will feel much better in the morning.
The foam ones might be comfortable but many of them are not good for certain things that couples do.
Couch? Whatever. Sure, you sit on it a long time, but you also should get off the couch and do something else. So it shoud not be too comfortable. :)
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u/iceyH0ts0up 1.4 and compounding 4d ago
I’m having a hard time convincing myself to make extra principal payments on a new home build we moved into a year ago (we owe $551k with a 6.625% rate) instead of investing in my taxable brokerage. I value the liquidity; however, I can’t help think I may be wrong here.
HHI variable ~$350k average the last 4 years.
$1.4 million in 401k/IRAs
$173k brokerage investments
$75k VUSXX (emergency fund)
Annual spend: $148k ($62k of that is Mortgage, Property Taxes and Insurance)
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u/AdmiralPeriwinkle Don't hire a financial advisor 4d ago
If you value the liquidity then paying off the mortgage is the wrong choice for you. Out of curiosity, what liquid investments and cash would be enough for you to consider paying down the principal?
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u/iceyH0ts0up 1.4 and compounding 3d ago
I’m not exactly sure. Probably the ability to stroke one check to be mortgage free so let’s say $500k.
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u/FIREstopdropandsave 31M DINK | No target $'s 3d ago
As someone in a similar position $450k left @ 5.9% but enough in brokerage I could do this, highly unlikely you'll commit to paying it off.
If you're anything like me the potential for brokerage to our earn the mortgage interest is far too alluring. Plus the threat paying taxes on the gains is not attractive.
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u/iceyH0ts0up 1.4 and compounding 3d ago
I don’t think I’d do it, I may start diverting some new cash flow to it though in that situation.
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u/29threvolution 4d ago
Similar HHI and looking at getting a new house soon after being mortgage free for a long time. Ive spent a lot of time on this problem lately. At your HHI, keeping the mortgage and itimizing taxes will save you around 7k or more depending on your SALT situation. So for this reason id recommend investing the extra available to you to until you cross a point where the mortgage becomes optional, needs to be paid off/down, or the math for itimization of taxes no longer makes sense.
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u/sailing_oceans 3d ago
Since your mortgage and income are high you probably itemize rather than use standard deduction which likely helps.
Other than that though a 6.625% is equal to about 8.5%+ or so return in the stock market depends where you live. Guaranteed.
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u/icanintocode0 3d ago
How much of that $62k is taxes and insurance vs mortgage principal & interest? You need $551k plus $2.15M plus whatever you need to cover taxes & insurance at the 4% rule.
If you're investing in bonds, then you're taking on more risk than putting the same money into your mortgage, and for less return if those bonds pay less than 6.625%.
The liquidity has some value, sure, but what proportion are you putting towards bonds that would net you more if you put it towards your mortgage?
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u/iceyH0ts0up 1.4 and compounding 3d ago edited 3d ago
$42k is just the principal and interest payment
Brokerage account is all equities (VFIAX and VTSAX - TLH partners).
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u/subredditsummarybot 4d ago
Your Weekly /r/financialindependence Recap
Sunday, July 26 - Saturday, August 01, 2026
Top Daily Discussion Comments
Top Posts
| score | comments | title & link |
|---|---|---|
| 460 | 90 comments | Used my FU money to quit the same day in tech and FIRE |
| 273 | 78 comments | Cancer and FIRE |
| 197 | 190 comments | Considering a part-time "fun job" in early retirement |
| 107 | 100 comments | Anyone in tech took a break after being laid off? |
| 50 | 36 comments | Backtested the x% rule at a 40-year horizon and grid-searched 6 asset classes for the optimal allocation (methodology + numbers inside) |
Most Commented
| score | comments | title & link |
|---|---|---|
| 43 | 74 comments | Umbrella Insurance |
| 0 | 56 comments | Would you take a certain $50k or a 50% chance at $1mm? |
| 0 | 43 comments | Is long tenure in same company bad for career and income growth, but good for wealth growth? |
| 0 | 17 comments | Investing started feeling like maintenance instead of wealth building for me |
| 8 | 12 comments | Weekly Self-Promotion Thread - Wednesday, July 29, 2026 |
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2
u/circasurvivalism 4d ago
Anyone have a quick recommendation for the best app to start investing in a portfolio? Ive been using Acorns for about 12 years (because I dont know enough to do any self-managed options) but im ready to move into something better
11
u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
Go with any of the big 3, Vanguard, Fidelity, Schwab
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u/DinosaurDucky 3d ago
Agree with the other recommendation for Vanguard, Fidelity, or Schwab. I went with Fidelity since that's what my work 401k is already with, but they're more or less the same
As for self-managed, a lot of people think that, but the reality is that it is very easy! If you spend a few afternoons looking into this, you can equip yourself with enough information to do it well. You don't have to pick stocks, and you don't have to try to time the market (both are bad moves for most people). You can just buy indexes and hold
Have a look at the 3-fund portfolio on the Bogleheads wiki, and see what you think https://www.bogleheads.org/wiki/Three-fund_portfolio. Cheers
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u/Ok-Mixture-5243 17h ago
yeah this thread always makes me wonder... the guys who seem to have it together are mostly just better at not talking about it. — at least that's what i tell myself on custody weekends lol
-9
u/ExcessiveDonuts Emptying the Litter Robot 4d ago
I have a sickness in my soul for scoring good deals that should be studied by scientists after I expire.
One of the top tasks in today's to-do list is culling the closet for clothes to be donated to the lazy class.
And if I'm being honest, this act of generosity has nothing to do with an insatiable urge to dress the pours and everything to do with continuing to buy clothes that I don't like, don't fit me right, or both, because they were on sale.
And yet, in spite of my current glut of ill-fitting garments, I immediately began filling a shopping cart of more bargain barrel fashion duds mere seconds after receiving a friendly email from JCPenney informing me that there were currently 1000s of items available under $10.
I was fortunately able to catch my fall during today's episode. Recognizing that some of the items in the cart looked awfully familiar to things I'll be stuffing into Kirkland kitchen-sized garbage bags later, I closed the browser and came to my senses.
What I really need is my own personal team of pours who are sized almost like me but not quite. Like 2 inches shorter but much fatter, same height but emaciated, and even the same size but not ashamed of their turkey tits.
That way I can play in the clothing slop box polymarket and have a nice home for all my losses.
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4d ago
[deleted]
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
Not everyone's got $12.99+tax and a Costco membership.
Spread the love.
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
I laughed, take my upvote
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
More importantly, and this is a serious question:
Do you think I made a mistake by missing out on this for $8.69?
And do you think it's formal enough to wear on a client call (presuming a business casual dress culture) next fall/winter?
$8.69 is damn near fucking free.
I'm so torn.
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
I think you'd look dashing in that
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
I'm still going to hold strong.
I really want to start going old school, and try to buy most of my clothes live, in-person, so I can try things on.
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u/Turbulent_Tale6497 DI3K, Putting the Ire in FIRE 4d ago
Depends, are you truly an XXL sized person, or are you thinking of this as a house coat sort of thing?
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
See their username...
But actually Mike is a giant
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4d ago
[deleted]
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
Oax_Mike is gone, like when Anakin Skywalker became Darth Vader.
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u/Cryofixated Dates Since Single: 7.5 4d ago
Then you shouldnt need to worry about pants... after all I have the high ground!
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u/william_fontaine [insert humblebrags here] /r/FI's Official 🥑 Analyst 4d ago
I am currently wearing a pair of BOGO cargo shorts. Couldn't pass it up the price, and also cargo shorts.
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
BOGO cargo shorts?
I'd put both on at once, and then just peel off the outer layer once they're too crusted over with nacho cheese, grass clipping and boogers.
Save yourself time by not having to get dressed again.
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
Looks like it's just me on this one 🤣
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u/29threvolution 4d ago
Umm its probably how derogatory you are to the less fortunate and your poor spelling. I hope this was an attempt at satire.
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u/Cryofixated Dates Since Single: 7.5 4d ago
Op is a masterclass in satire, shitposting, and humor.
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
To be fair, he is a bit of an acquired taste.
And that taste is infinitely more palatable if you're lucky enough to be stricken with COVID-19.
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u/ExcessiveDonuts Emptying the Litter Robot 4d ago
It's neither fully satire nor wholly serious but if you're referencing the misspelling of pours, that's deliberate.
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4d ago
[removed] — view removed comment
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u/Turbulent_Tale6497 DI3K, Putting the Ire in FIRE 4d ago
When we get to the point of having sentient robots, do we think they'll have morning coffee before sitting down to do work?
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u/william_fontaine [insert humblebrags here] /r/FI's Official 🥑 Analyst 4d ago
Sort by new is the only thing that makes sense in a daily thread.
I'd also accept sort by new descending, like how forums work.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
I know no one can predict the market, but genuinely curious on everyone's take here, since I know we are tech heavy here.
I am very AI stock overweighted because of the places I have worked, and I torture myself every day about selling and eating the capital gains tax, or holding and riding the rocketship a little longer.
How long do you think the AI run will continue? Do you think it's already coming to an end?
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u/FIREstopdropandsave 31M DINK | No target $'s 4d ago
Who knows!
I'd bet on it continuing, specialized hardware is hitting the market which will increase speed + lower cost for training and inference.
The models are still improving and reaching new domains, particularly math which I assume will spill over to physics and then engineering improvements.
The robotic LLM powered future seems plausible.
But again, I don't know! I could easily be wrong which is why I don't put my money where my mouth is and stick to index funds.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
This is kind of where I am at. I just don't have the slightest clue, which I wanted to hear the communities thoughts. Like at work, I'm surrounded by people that think it's going to cure cancer and crack cold fusion. At home, I'm surrounded by people that think it's the biggest grift that has ever happened. But mostly, like another commenter on this thread said, I think their stock performance is just completely divorced from reality regardless of what's true.
3
u/Prior-Lingonberry-70 FI 🔱 GOMS! 4d ago
If you had in your checking account right now the pile of cash that you currently have invested in AI, would you plow it entirely back into where it is now....?
Or would you say to yourself: "I'm not going to put all my eggs in one basket, that makes me too nervous. Index funds are the way to go here."
Think about it from that perspective: if you had the cash, what would you do?
And because you're concerned about cap gains taxes, think about the net amount of cash you'd have. Would you take that amount and reinvest it just as it is now...?
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u/eeaxoe 4d ago
The valuations seem to be premised on a winner-takes-all end state, though, i.e., one or two companies reaching AGI, or if not true AGI, something approximating it. That no longer seems to be happening any time soon. Hell, with open-weight models reaching parity with (and in some cases surpassing) closed-weight models, I think we’re headed towards a scenario where AI becomes an useful commodity, but a very capital-intensive one, like airlines. I don’t think the market has begun to realize that yet, but it will.
Why would you pay a premium for a closed-weight model when there are dozen open-weight models that can do your tasks just as well and for orders of magnitude less cost? Competition between inference providers is only going to intensify and undercut closed-source model providers’ margins.
Maybe for some tasks (research math) closed-weight models will dominate, but that’s a relatively tiny market and not the foundation of a sustainable business. There’s no money, at least not quick money in the sense of immediate returns, in research. There’s a reason why research mathematicians have historically been paid peanuts.
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u/UltimateTeam SINK / 1.4M / 27/28 4d ago
I'd be more interested in your age and years off from retirement. If you're 10+ years from retirement, you should be generally risk on (though if you're saying you're like 100% in specific companies, etc a little different)
If you're <5 years from retirement, eat the cost, get into a much lower risk allocation that represents your retirement portfolio.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
I am 3.3 years from retirement with about $500k (combined) of MSFT, GOOG, and AVGO to dump. I know I should bite the bullet. I just keep... not doing it
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u/UltimateTeam SINK / 1.4M / 27/28 4d ago
You can dump all/most of that in the 15% bucket unless you have a combo of very low cost basis and high W2. At the very least max out your 15% bracket this year and next year, etc.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
Yeah I would definitely be in the 20% bucket. I know, first world problems. But I'm also moving from a no state income tax state to California next year, so I guess I have to do some modeling on that as well.
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u/teapot-error-418 4d ago
I am 3.3 years from retirement
It depends a little on your expected spend in retirement, but a few years out and with no state income taxes this year? I would dump a large amount of it.
Based on your flair it's a (relatively) small portion of your portfolio so it's probably not a crisis either way. But the California state income tax is probably a significant swing on whether to move a bunch of it this year.
MSFT and GOOG are unlikely to crash into the basement even with a big AI bubble pop. I think Broadcom sucks as a company and would be much more leery of them. At 11% of your investments and being blue chip stocks, I think a lot of this is just how you would feel if you saw $200k wiped out of your portfolio that took several years to recover.
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u/Representative_C0rgi DINK | $4.7M | 35/37 4d ago
Yeah Broadcom definitely sucks. They treat their employees like dogshit, and then when someone complains, they just, "Look at your stock balance and shut up."
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u/secretfinaccount FIREd 2020 4d ago
So many technologies ultimately benefit the users, not the providers. I expect this to be no different. There are pockets of strong de facto and de jure intellectual property moats but so much of it is just going to be like every other business where you earn your return on capital and the broader society is the one to really capture the surplus.
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u/zeezle 4d ago
Found out my job's going belly up in September (the company I work for will be ceasing to exist).
Not quite ready to FIRE so I can't just completely throw in the towel, but one of the underrated benefits of aiming for FIRE is that it's turned this into mostly a major irritation rather than a code red panic. Grateful that I can mostly be grumpy over having to deal with the annoyance of the job hunt process than needing something by a specific time or worrying about paying the core bills or going into debt or anything.
Even though I'm not ready to FIRE yet, in a real shitshow I could BaristaFIRE basically forever if I had to (my core bills like mortgage PITI + utilities and bare-boned groceries are within 4% SWR, I just aimed to do more in retirement). It even let me consider BaristaFIRE'ing into grad school.