Search found 8315 matches

by KlangFool
Sun Apr 22, 2018 12:34 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Why do you use a Roth IRA instead of saving those same dollars in to taxable accounts? I am sure you have good reason to do so. If you are going to pay at least some of your kids college expenses, a 529 has exactly the same advantage as a Roth. marcopolo, No. I can use Roth IRA's money for anything...
by KlangFool
Sun Apr 22, 2018 12:32 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

I save 60K per year. So, why would I put 5K into 529? KlangFool I think you mentioned you earn about $150k and save about $60k. I guess it is a matter of priorities, but given those numbers, I would be very comfortable saving 3.3% of income (or 8.3% of my savings) for my kids future. marcopolo, Ove...
by KlangFool
Sun Apr 22, 2018 12:25 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Why do you use a Roth IRA instead of saving those same dollars in to taxable accounts? I am sure you have good reason to do so. If you are going to pay at least some of your kids college expenses, a 529 has exactly the same advantage as a Roth. marcopolo, No. I can use Roth IRA's money for anything...
by KlangFool
Sun Apr 22, 2018 11:50 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

I save 60K per year. So, why would I put 5K into 529? KlangFool I think you mentioned you earn about $150k and save about $60k. I guess it is a matter of priorities, but given those numbers, I would be very comfortable saving 3.3% of income (or 8.3% of my savings) for my kids future. marcopolo, Ove...
by KlangFool
Sun Apr 22, 2018 11:45 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

A) Because if you are planning to pay for some of your kids college expenses, the 529 is the vehicle optimized to save for that. B) That depends on how much you plan to spend towards college. For, in-state, one kid maybe 5-10k. For Ivy, may be 20k? We did ~10/yer per child while they were young. ma...
by KlangFool
Sun Apr 22, 2018 11:14 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Slice and dice versus all-in-one fund. Let's assume 50K in a taxable account with AA of 60/40. 1) You could put all the money into a Lifestrategy Moderate Growth Fund. Then, you add the money to the fund every month. Or, 2) You could put the money into the 3 funds and start a spreadsheet. Th...
by KlangFool
Sun Apr 22, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

A) Because if you are planning to pay for some of your kids college expenses, the 529 is the vehicle optimized to save for that. B) That depends on how much you plan to spend towards college. For, in-state, one kid maybe 5-10k. For Ivy, may be 20k? We did ~10/yer per child while they were young. ma...
by KlangFool
Sun Apr 22, 2018 10:18 am
Forum: Personal Finance (Not Investing)
Topic: Interesting vs higher paying job
Replies: 40
Views: 2727

Re: Interesting vs higher paying job

The $ differential is something like 90k in HCOL and 150K in Silicon Valley. That's face value, and I know that living in SV cuts the difference down significantly. TheTurtle, They do not pay you well enough to work in the Silicon Valley. So, between 90K versus 150K, you will make more money in the...
by KlangFool
Sun Apr 22, 2018 9:23 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Slice and dice versus all-in-one fund. Let's assume 50K in a taxable account with AA of 60/40. 1) You could put all the money into a Lifestrategy Moderate Growth Fund. Then, you add the money to the fund every month. Or, 2) You could put the money into the 3 funds and start a spreadsheet. Th...
by KlangFool
Sun Apr 22, 2018 9:19 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Do not agree with “do not save for college” — agreed that you should put your own retirement goals before saving for college, but assuming I make good money and have everything else under control, why would I not take advantage of tax advantage college saving space for my kids (assuming I plan to p...
by KlangFool
Sun Apr 22, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Which is exactly why you might want to think harder about the core of the issue in coming up with rules, if you want the rules to be helpful. It's easy (and not very effective) for anyone to say "save a lot of money and all will be fine." It's a lot harder (but also a lot more effective) to talk ab...
by KlangFool
Sun Apr 22, 2018 9:03 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

How would you calculate savings rate with pretax money combined with after tax money? lostdog, Why based on your saving rate on the income? If you calculate your saving rate based on your annual expense, all those problems go away. The annual expense = gross income - taxes (Social Security, Medicar...
by KlangFool
Sat Apr 21, 2018 10:05 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Slice and dice versus all-in-one fund. Let's assume 50K in a taxable account with AA of 60/40. 1) You could put all the money into a Lifestrategy Moderate Growth Fund. Then, you add the money to the fund every month. Or, 2) You could put the money into the 3 funds and start a spreadsheet. The...
by KlangFool
Sat Apr 21, 2018 7:35 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, The followings are some of the rules that I used. It may work for some folks. On this thread, I will compile some of them and provide the reasoning and thought behind those rules. You should adjust them based on your own circumstances. I am an engineer. So, I am biased towards my income and ...
by KlangFool
Sat Apr 21, 2018 5:19 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

A) Because if you are planning to pay for some of your kids college expenses, the 529 is the vehicle optimized to save for that. B) That depends on how much you plan to spend towards college. For, in-state, one kid maybe 5-10k. For Ivy, may be 20k? We did ~10/yer per child while they were young. ma...
by KlangFool
Sat Apr 21, 2018 5:09 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Some of the parameters to be adjusted for the individual circumstances. A) Targeted FI numbers -> 25 to 50 times your current annual expense depending on when you want to be FI. In my case, I use 25 times because I am older. And, if and when I withdraw social security, it could cover about 50...
by KlangFool
Sat Apr 21, 2018 4:57 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

This combination (excess beyond tax-deferred going into taxable, instead of 529) is what i was taking exception to. It is bad advice for most situations. marcopolo, << It is bad advice for most situations. >> Most people are not in the 24% or higher tax bracket. 529 may make sense for you. But, you...
by KlangFool
Sat Apr 21, 2018 4:01 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

This combination (excess beyond tax-deferred going into taxable, instead of 529) is what i was taking exception to. It is bad advice for most situations. marcopolo, << It is bad advice for most situations. >> Most people are not in the 24% or higher tax bracket. 529 may make sense for you. But, you...
by KlangFool
Sat Apr 21, 2018 3:56 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Do not confuse lucky outcome with a smart strategy. I cannot count on being lucky and continuously employed without interruption. So, I have to plan and survive in this kind of reality. For whatever reason, this is the life that I experienced. Houston Oil Bust, Texas Saving & Loan Crisis, As...
by KlangFool
Sat Apr 21, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

You asked several questions (which I bolded above), and I presented answers. I don't believe KlangFool put any stipulation that his rules were only for high tax bracket situations, or using 529 accounts vs taxable for college. KlangFool also mentioned YMMV. 1. Can you explain the advantages of empl...
by KlangFool
Sat Apr 21, 2018 1:58 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Rule #1 Save 1 year of your current annual expense every year. Then, you could be FI in about 25 years even with 0% real growth. Save 1 year of *expenses at retirement* every year. Not current annual expense. But for reasons others have mentioned, this is not a very useful rule at all. Most cannot....
by KlangFool
Sat Apr 21, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Do not confuse lucky outcome with a smart strategy. I cannot count on being lucky and continuously employed without interruption. So, I have to plan and survive in this kind of reality. For whatever reason, this is the life that I experienced. Houston Oil Bust, Texas Saving & Loan Crisis, Asi...
by KlangFool
Sat Apr 21, 2018 1:18 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

marcopolo wrote:
Sat Apr 21, 2018 11:44 am

But, I would not voluntarily stop working if that were the case. Being able to do so is how I define being FI.
marcopolo,

You have a choice. I don't.

KlangFool
by KlangFool
Sat Apr 21, 2018 1:15 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

KF 2.5x the price of the home rule is silly, he himself didn't follow it. He may be 2.5x in liquid assets to home value now, but even if he just bought his $400k townhouse say in 2014, based on his savings and investment appreciation he likely only had $550k-$600k at the time of purchase. A far cry...
by KlangFool
Sat Apr 21, 2018 1:07 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Rule #1 Save 1 year of your current annual expense every year. Then, you could be FI in about 25 years even with 0% real growth. KlangFool Just curious, would you consider a home down payment an expense that should be matched in savings (during the year of the home purchase)? BogleMelon, No. I make...
by KlangFool
Sat Apr 21, 2018 10:23 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

At my income/saving rate, there are only 2 possible outcomes: 1) I am employed long enough. I have the money to pay for college. 2) I am permanent underemployed or unemployed. In those cases, 529 affect my kids' ability to qualify for financial aid. My number is around 1.5 million. My kid's college...
by KlangFool
Sat Apr 21, 2018 9:28 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

:| I am still not understanding your reasoning. 1) You seem to be almost pathologically fearful of job loss, yet you advice to plan on cash flowing college expenses. What happens if you save diligently for 20 years, at or close to FI, and then you are out of work? Do you tell your kids they are on ...
by KlangFool
Sat Apr 21, 2018 12:17 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, I save a lot of money. But, I am not frugal. A) Household income of around 140K to 150K. B) Tax around 20K to 30K (Social security, Medicare, Federal, and state) C) The annual expense of around 50K to 60K. D) The annual savings of around 50K to 60K. Out of the annual expense, about 20K is for...
by KlangFool
Sat Apr 21, 2018 12:10 am
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Rule #6 Invest using all-in-one funds such as lifestrategy or target retirement fund. Do not go into slice and dice until your portfolio is 6 figures or bigger. Why wait until your portfolio is 6+ figures before breaking out of all-in-one funds? RamblinDoc, Unless and until your portfolio is big en...
by KlangFool
Fri Apr 20, 2018 11:28 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

:| I am still not understanding your reasoning. 1) You seem to be almost pathologically fearful of job loss, yet you advice to plan on cash flowing college expenses. What happens if you save diligently for 20 years, at or close to FI, and then you are out of work? Do you tell your kids they are on ...
by KlangFool
Fri Apr 20, 2018 10:29 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

What is wrong is that setting a rule that 98% of the population would not be able to achieve will make your FI system unusable. delamer, My FI system is useful to some folks. And, some other folks could adjust the parameters to suit their circumstances. I do not have the aspiration to make it works...
by KlangFool
Fri Apr 20, 2018 10:27 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

I am still not understanding your reasoning. 1) You seem to be almost pathologically fearful of job loss, yet you advice to plan on cash flowing college expenses. What happens if you save diligently for 20 years, at or close to FI, and then you are out of work? Do you tell your kids they are on the...
by KlangFool
Fri Apr 20, 2018 10:20 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

What is wrong is that setting a rule that 98% of the population would not be able to achieve will make your FI system unusable. delamer, My FI system is useful to some folks. And, some other folks could adjust the parameters to suit their circumstances. I do not have the aspiration to make it works...
by KlangFool
Fri Apr 20, 2018 10:17 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Klangfool, I bought a condominium which was built for first time home buyers in the late 80's. The complex had no swimming pool, exercise room, guest suite or library. Very plain jane type of setup. The price was 2.5 times my salary with a 10% mortgage rate. I could barely afford the home. I've liv...
by KlangFool
Fri Apr 20, 2018 10:08 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Klangfool, I bought a condominium which was built for first time home buyers in the late 80's. The complex had no swimming pool, exercise room, guest suite or library. Very plain jane type of setup. The price was 2.5 times my salary with a 10% mortgage rate. I could barely afford the home. I've liv...
by KlangFool
Fri Apr 20, 2018 10:05 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks,

As I had said right at the beginning of the thread, the difference between saving at a high level or not comes down to the big purchases: house, car, and college education. This is true for many folks.

At my level, it is usually the house.

KlangFool
by KlangFool
Fri Apr 20, 2018 9:56 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

simple rules necessitate simple situations -- life is more complex. my biggest gripe with a lot of these rules is that they do not take location into account at all. i live and work in a VHCOL state. i have no intention of retiring here. i can follow various "rules" and work here for the next 20-30...
by KlangFool
Fri Apr 20, 2018 9:40 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Your job-not everyone's. Each individuals' circumstances are just way too variable to generalize like this. DVMResident, I agree with that statement. But, if it works even in this kind of situation, it will work in a better environment. As I had said at the beginning of this thread, adjust the para...
by KlangFool
Fri Apr 20, 2018 8:29 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Even as a follow anti-buying person, this second house rule is silly. There are so many markets where buying is cheaper than renting. If buying is cheaper than renting, buying can help you stablize COL and achieve Rule #1: Save 1 year of your current annual expense every year. DVMResident, I live i...
by KlangFool
Fri Apr 20, 2018 7:16 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Even as a follow anti-buying person, this second house rule is silly. There are so many markets where buying is cheaper than renting. If buying is cheaper than renting, buying can help you stablize COL and achieve Rule #1: Save 1 year of your current annual expense every year. DVMResident, I live i...
by KlangFool
Fri Apr 20, 2018 7:12 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

This rule might be OK if your current savings is not sufficient to fill up all tax-advantaged vehicles (401k, Roth, IRA, HSA, etc.). But if you are filling all of those, and still have money to save AND you anticipate you will likely have to pay for at least some of your kids educational expenses, ...
by KlangFool
Fri Apr 20, 2018 6:52 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Rule #2 Do not overspend on house, car, and college education. At engineer's income level, as long as he/she do not overspend on those large expenses, he/she can save 1 year of annual expense every year. KlangFool So how do you define “overspend” in terms of the items above? I know that you ...
by KlangFool
Fri Apr 20, 2018 6:48 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

My situation is fairly unique, so I am not sure I have simple rules. Any such rules would not be applicable to most others. From what I have read of KFs situation, it is somewhat unique in its own right. Thus I don’t know if his rules are useful to most others either. If you only spend 40% of Gross...
by KlangFool
Fri Apr 20, 2018 6:30 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Rule #2 Do not overspend on house, car, and college education. At engineer's income level, as long as he/she do not overspend on those large expenses, he/she can save 1 year of annual expense every year. KlangFool So how do you define “overspend” in terms of the items above? I know that you ...
by KlangFool
Fri Apr 20, 2018 5:20 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Rule #5 Do not save for college education Alright, you're going to have to elaborate on #5. I sleep better at night knowing I've got most of my kids in-state college expenses in a 529. We'll have to cash flow some and they'll have to work some, but it will be, um, simple. jriding, << I sleep better...
by KlangFool
Fri Apr 20, 2018 5:01 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, Rule #3 Use "Pay Yourself First" saving method. Auto-deduct from your paycheck and save and invest the proper amount. Spend the rest. Rule #4 Contribute as much as possible to the tax-deferred accounts. Put the tax savings to the Roth IRAs and the taxable account. Rule #5 Do not save for coll...
by KlangFool
Fri Apr 20, 2018 4:27 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Yes but if I make $50k for 24 years and $100k the last year and then apply your simple rule, I've really only saved for the annual expense I had during the first 24 years even though in each year I saved the requisite amount. That is an extreme example, but it also applies if one gradually makes mo...
by KlangFool
Fri Apr 20, 2018 4:23 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Rule #1 Save 1 year of your current annual expense every year. Then, you could be FI in about 25 years even with 0% real growth. All well and good if you don't plan on living any longer than 25 years. Or am I missing something? Wouldn't be "all well and good if you don't plan on being retired for a...
by KlangFool
Fri Apr 20, 2018 4:20 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks,

Rule #2

Do not overspend on house, car, and college education. At engineer's income level, as long as he/she do not overspend on those large expenses, he/she can save 1 year of annual expense every year.

KlangFool
by KlangFool
Fri Apr 20, 2018 4:16 pm
Forum: Investing - Theory, News & General
Topic: KF's simple rules to achieve FI
Replies: 156
Views: 7765

Re: KF's simple rules to achieve FI

Folks, The followings are some of the rules that I used. It may work for some folks. On this thread, I will compile some of them and provide the reasoning and thought behind those rules. You should adjust them based on your own circumstances. I am an engineer. So, I am biased towards my income and ...