What does financial peace look like to YOU?

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rashad3000
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What does financial peace look like to YOU?

Post by rashad3000 » Tue Feb 05, 2019 11:30 am

I can remember back in 2011, staring bankruptcy in the face. We had over $350,000 in total debt. We had a negative net worth of $200,000. I remember when our numbers were read out in the court, people actually laughed. I will never forget this. At that moment, I promised that I'd never put my family through that again.

Here we are now. $156,000 HHI (increasing by 3% each year), "secure" jobs, fully-funded emergency fund, only debt $162,000 left on a $215,000 15-year mortgage ($275,000 value), $1000/mo to Roth IRAs, $1700/mo to 403(b)'s, $1100/mo towards pensions, $500/mo towards sinking fund, $400/mo towards college, $250/mo towards mortgage acceleration.

Even with all of this, I don't feel fully at "peace". I am thankful that we are in the position we are in. However, I still find myself a little uptight when it comes to money. I have a hard time spending my personal blow money. Growing up, I didn't have much, so maybe I am still holding on to those memories, in addition to the memories I have from putting my family through a bankruptcy.

We are working baby steps 4, 5, & 6 right now. Does the actual peace come when you are in baby step 7? I think that I'll be at peace when we have zero debt, but maybe even then, I will still have concerns.

I understand that there are plenty more people out there who share these feelings. I hear people with millions call into the DR show acting like they are broke. I guess that being an "Everyday Millionaire' is something that you really have to work hard at and maintain the lifestyle, once you reach that status.

What does Financial Peace look like to YOU? Thanks for your feedback, in advance!

Jack FFR1846
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Re: What does financial peace look like to YOU?

Post by Jack FFR1846 » Tue Feb 05, 2019 11:35 am

If you've become frugal at heart and have trouble blowing money, then welcome to the club. This isn't something bad and it's not something you're going to lose when you have more than enough money to stop working forever. I don't know that some serene feeling is going to come over you that you will never have to worry about money again. Heck.....one trip to the Ferrari dealer could screw that up, right? But it's a good thing to figure out in your head that maybe the Big Mac with a soda and you really don't want the fries is the way to go because you'll save 32 cents over a Big Mac meal where you'll just throw the fries in the trash.
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RickBoglehead
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Re: What does financial peace look like to YOU?

Post by RickBoglehead » Tue Feb 05, 2019 11:36 am

Just my observation, but listening to Dave Ramsey and other sources often exacerbates the lack of feeling financial peace.
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rashad3000
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Re: What does financial peace look like to YOU?

Post by rashad3000 » Tue Feb 05, 2019 11:38 am

Jack FFR1846 wrote:
Tue Feb 05, 2019 11:35 am
If you've become frugal at heart and have trouble blowing money, then welcome to the club. This isn't something bad and it's not something you're going to lose when you have more than enough money to stop working forever. I don't know that some serene feeling is going to come over you that you will never have to worry about money again. Heck.....one trip to the Ferrari dealer could screw that up, right? But it's a good thing to figure out in your head that maybe the Big Mac with a soda and you really don't want the fries is the way to go because you'll save 32 cents over a Big Mac meal where you'll just throw the fries in the trash.
Ha! I love the last line!

Great feedback!

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rashad3000
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Re: What does financial peace look like to YOU?

Post by rashad3000 » Tue Feb 05, 2019 11:48 am

RickBoglehead wrote:
Tue Feb 05, 2019 11:36 am
Just my observation, but listening to Dave Ramsey and other sources often exacerbates the lack of feeling financial peace.
Great point. Sometimes, it makes me feel better about our situation because some of the financial situations of the callers are horrific. It reminds me to stay the course.

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bligh
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Re: What does financial peace look like to YOU?

Post by bligh » Tue Feb 05, 2019 11:58 am

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am

What does Financial Peace look like to YOU? Thanks for your feedback, in advance!
Financial Peace to me would be the same as what I consider "Lean" Financial Independence. This is the point at which my portfolio is 30X my "basic" annual expenses. This is my cost of living without the many discretionary expenses (not much shopping, rarely if ever eating out, etc.). At that point I know that I will almost certainly be okay even if I chose to never work (or was unable to ever find work).

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Re: What does financial peace look like to YOU?

Post by LiterallyIronic » Tue Feb 05, 2019 11:59 am

I don't know what the "baby steps" are; I just know that's a Dave Ramsey thing. But I don't think I'll have financial peace until my mortgage is paid off. I feel like I had financial peace when I was renting, but once I took out a mortgage, it was gone.

My income is $75k (wife stays at home with the one-year-old). I put $625/month into my 401k (which comes with a $375/month match that is immediately 100% vested) and we put $1000/month into two Roth IRAs. And I pay an extra $225/month toward of $825/month mortgage. And I put money away every month toward my goals of a European vacation and a DeLorean.

Yet every time I see that outstanding mortgage balance (currently $141k on a $244k house), it brings me anything but peace. It's very stressful.

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Svensk Anga
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Re: What does financial peace look like to YOU?

Post by Svensk Anga » Tue Feb 05, 2019 2:11 pm

LiterallyIronic wrote:
Tue Feb 05, 2019 11:59 am
But I don't think I'll have financial peace until my mortgage is paid off.
+1

It was very comforting to us during the 2008/09 unpleasantness that we had paid extra on our mortgage (6-5/8%) and were done with it as of mid-2007. I think it is worth something to be debt free even if it fails to be the best choice mathematically. It helped too that without the mortgage payment, we could have gotten by fairly well on only the lower earning spouse's income.

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Re: What does financial peace look like to YOU?

Post by smitcat » Tue Feb 05, 2019 2:24 pm

Svensk Anga wrote:
Tue Feb 05, 2019 2:11 pm
LiterallyIronic wrote:
Tue Feb 05, 2019 11:59 am
But I don't think I'll have financial peace until my mortgage is paid off.
+1

It was very comforting to us during the 2008/09 unpleasantness that we had paid extra on our mortgage (6-5/8%) and were done with it as of mid-2007. I think it is worth something to be debt free even if it fails to be the best choice mathematically. It helped too that without the mortgage payment, we could have gotten by fairly well on only the lower earning spouse's income.
Sone folks that pay off their mortgage early put themselves in a much worse situation if/when there is a repeat of conditions such as 2008/2009.

smitcat
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Re: What does financial peace look like to YOU?

Post by smitcat » Tue Feb 05, 2019 2:26 pm

Financial peace to us means:
- we know we have numerous skills and sources to earn money
- we know we can live frugally if/when needed
- we have a great handle on our current and planned expenses
- we save to our plan
- we also live for today
- we stay current with our financial goals and plans

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Watty
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Re: What does financial peace look like to YOU?

Post by Watty » Tue Feb 05, 2019 2:36 pm

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am
Here we are now. $156,000 HHI (increasing by 3% each year), "secure" jobs, fully-funded emergency fund, only debt $162,000 left on a $215,000 15-year mortgage ($275,000 value), $1000/mo to Roth IRAs, $1700/mo to 403(b)'s, $1100/mo towards pensions, $500/mo towards sinking fund, $400/mo towards college, $250/mo towards mortgage acceleration.
One thing that jumps out at me is that you are still looking at things in terms of debt and monthly payments.
rashad3000 wrote:
Tue Feb 05, 2019 11:30 am
What does Financial Peace look like to YOU?
Something I have done for years was that I update a simple spreadsheet with my net worth each year on January 1st so see how I am progressing. That has helped me focus on the progress for year to year.

hoops777
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Re: What does financial peace look like to YOU?

Post by hoops777 » Tue Feb 05, 2019 2:42 pm

Financial peace equals no mortgage or debt combined with enough financial assets to live comfortably and worry free without stocks.Never thought I would ever see that day but am living it now and pinch myself almost everyday. :D
K.I.S.S........so easy to say so difficult to do.

deltaneutral83
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Re: What does financial peace look like to YOU?

Post by deltaneutral83 » Tue Feb 05, 2019 2:44 pm

Financial Peace to me is 3F portfolio with index funds from Vanguard on my own, watching Survivor to see who gets voted off the island every Wednesday, rarely using a realtor to buy/sell property, credit card reward points out the wazoo while never accruing a balance (with Dave using my referral link on my Chase Sapphire Reserved), family inheritance, and never budgeting because I'm too frugal anyway for a budget to have any meaningful significance. I should probably apply for Dave's CFO position, I'm sure I'm qualified.

But seriously, his plan works great for about 85% of the country so he'd be an overwhelming success in terms of the masses.

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GerryL
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Re: What does financial peace look like to YOU?

Post by GerryL » Tue Feb 05, 2019 2:47 pm

As someone who has always lived frugally, even when I didn't really have to, my feeling of financial peace did not come until SEVERAL YEARS AFTER I had a financial plan run and learned that I could die at age 96 with more $$$ than I had at the start of retirement. Or, worst-case scenario, with more $$ than the average person has at retirement.

It took that long to undo my thinking that "this could all end and I could find myself unemployed and on the verge of homelessness" and to get to "yes, you can afford to do/buy this." So, part of it was the actual balance of my accounts, but a large part was changing a lifetime of scarcity-thinking.

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Re: What does financial peace look like to YOU?

Post by TheOscarGuy » Tue Feb 05, 2019 3:04 pm

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am
I can remember back in 2011, staring bankruptcy in the face. We had over $350,000 in total debt. We had a negative net worth of $200,000. I remember when our numbers were read out in the court, people actually laughed. I will never forget this. At that moment, I promised that I'd never put my family through that again.

Here we are now. $156,000 HHI (increasing by 3% each year), "secure" jobs, fully-funded emergency fund, only debt $162,000 left on a $215,000 15-year mortgage ($275,000 value), $1000/mo to Roth IRAs, $1700/mo to 403(b)'s, $1100/mo towards pensions, $500/mo towards sinking fund, $400/mo towards college, $250/mo towards mortgage acceleration.

Even with all of this, I don't feel fully at "peace". I am thankful that we are in the position we are in. However, I still find myself a little uptight when it comes to money. I have a hard time spending my personal blow money. Growing up, I didn't have much, so maybe I am still holding on to those memories, in addition to the memories I have from putting my family through a bankruptcy.

We are working baby steps 4, 5, & 6 right now. Does the actual peace come when you are in baby step 7? I think that I'll be at peace when we have zero debt, but maybe even then, I will still have concerns.

I understand that there are plenty more people out there who share these feelings. I hear people with millions call into the DR show acting like they are broke. I guess that being an "Everyday Millionaire' is something that you really have to work hard at and maintain the lifestyle, once you reach that status.

What does Financial Peace look like to YOU? Thanks for your feedback, in advance!
Not everyone here follow Ramsey's approach or think it is necessarily the right approach, just thought I will mention it! He is pretty bad (based on what he recommends on his podcasts, to me!) when it comes to investing advise.
Maybe it is a good thing you are a little uptight with money, keeps you on your toes since you think you were in trouble in 2011. So its not such a bad thing?

2015
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Re: What does financial peace look like to YOU?

Post by 2015 » Tue Feb 05, 2019 3:08 pm

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am
I can remember back in 2011, staring bankruptcy in the face. We had over $350,000 in total debt. We had a negative net worth of $200,000. I remember when our numbers were read out in the court, people actually laughed. I will never forget this. At that moment, I promised that I'd never put my family through that again.

Here we are now. $156,000 HHI (increasing by 3% each year), "secure" jobs, fully-funded emergency fund, only debt $162,000 left on a $215,000 15-year mortgage ($275,000 value), $1000/mo to Roth IRAs, $1700/mo to 403(b)'s, $1100/mo towards pensions, $500/mo towards sinking fund, $400/mo towards college, $250/mo towards mortgage acceleration.

Even with all of this, I don't feel fully at "peace". I am thankful that we are in the position we are in. However, I still find myself a little uptight when it comes to money. I have a hard time spending my personal blow money. Growing up, I didn't have much, so maybe I am still holding on to those memories, in addition to the memories I have from putting my family through a bankruptcy.

We are working baby steps 4, 5, & 6 right now. Does the actual peace come when you are in baby step 7? I think that I'll be at peace when we have zero debt, but maybe even then, I will still have concerns.

I understand that there are plenty more people out there who share these feelings. I hear people with millions call into the DR show acting like they are broke. I guess that being an "Everyday Millionaire' is something that you really have to work hard at and maintain the lifestyle, once you reach that status.

What does Financial Peace look like to YOU? Thanks for your feedback, in advance!
My prediction is financial peace will eventually come to you because as a result of your experiences you have built competencies within yourself that are taking you there. Creating internal competencies as you have are just about the most valuable thing a person can do because once built they cannot be taken away. This has been my experience over and over again.

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Re: What does financial peace look like to YOU?

Post by GCD » Tue Feb 05, 2019 3:09 pm

At some point you become comfortable with LBYM and after a long enough time you come to enjoy accumulating money rather than spending money. (That probably came out wrong, but I can't think of a better phrasing right now. It's not like I'm Scrooge McDuck wallowing in my piles of cash). It's when I see a Lamborghini on the road and know that although I could have one sitting in the driveway tomorrow , I'd rather keep the money invested and continue driving my 15 year old F150.

When my finances became such that I could meet all my needs and desires without working was when I felt really set. Although once I was on a visible path to that point (about 15 years ago) I felt pretty comfortable. So having cash commensurate with your desires is a good standard. Depends on your desires. If you really want a $100M yacht, you're gonna have some work to do.

Re DR: I think his advice on getting out of debt is good, but his investment advice is questionable. Which is disappointing because I think he helps a lot of people get out of debt and learn to LBYM, but then they believe in him and follow the rest of his advice which is not so good.

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Re: What does financial peace look like to YOU?

Post by GCD » Tue Feb 05, 2019 3:19 pm

Watty wrote:
Tue Feb 05, 2019 2:36 pm
Something I have done for years was that I update a simple spreadsheet with my net worth each year on January 1st so see how I am progressing. That has helped me focus on the progress for year to year.
I've done that for the last 10 years. I really wish I had done it from the start of my first real job. All I know is way back when I went from -$49K to $800K net worth in about 13 years. It would be interesting to see the progression. I'm going to urge my kids to do that once they get a real job. It's a good device for a lot of people, especially those in debt to mark their progress. Sometimes it can be a little invisible if your lifestyle isn't increasing.

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Re: What does financial peace look like to YOU?

Post by Crow Hunter » Tue Feb 05, 2019 3:21 pm

This is a GREAT question that I really haven't ever thought about. I don't know.

I am a multi-millionaire, completely debt free, and have a combined W-2 income of $175k expected to potentially go up quite a bit this year and I live in a VLCOL area.

I still don't have "peace".

I am right now looking at the busted knuckles on my right hand as I type that I got while on Sunday from removing and cleaning the throttle body on my 2011 Silverado that was misfiring on cold mornings.

I don't really like working on cars and I could easily afford to just drop it off somewhere and let them deal with it. I even thought that exact thought while on my knees on top of the radiator shroud on the front of the engine trying to pry a stupid Christmas tree clip off and banging my knuckles. While wiping the blood on my old white T-shirt, I actually said out loud, "I am a F*&$ing multi-millionaire, why am I doing this?!?!" The dogs came over and sat in rapt attention thinking that I was going to tell them but wandered off once they realized it was a rhetorical question.

But you know what, I got it off, sprayed it full of carburetor cleaner scrubbed off the carbon and put it back together and made sure it still ran. Why do you ask? Because I wouldn't be at "peace" paying someone to do something that I can do myself.

I am always laser focused on reducing spending and increasing income. I could likely retire right now and according to Firecalc I would have a 100% success rate based on our current spending, but I won't.

Not because I can't, but because I couldn't be at peace knowing that I just need one more million to allow me to spend $100,000/year until I die.

The irony is that if I get that extra million, I will probably come up with a reason why I need that 4th million.

So what is financial peace? I really don't know.

katrid11
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Re: What does financial peace look like to YOU?

Post by katrid11 » Tue Feb 05, 2019 3:27 pm

Financial peace is different to each person.

You are trying to do 3 baby steps at once and still looking at it as "I am making this payment". I would recommend setting and forgetting for a while. You can set goals for college savings and retirement but in reality, most people save until they "have enough" or "cant work anymore".

It is time for rewiring your brain like others are mentioning. Look at the net worth changing over time. Remember your emergency fund and sinking funds are taking care of you.

FWIW - financial peace for me is achieved when I feel secure that I can afford for my family to live for several months without panicking about paying a bill. IE - a fully funded EF works wonders for financial peace. Knowing that in a medical emergency, I am not worried about paying for it - I can set my worries to the family member in need.

Beach
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Re: What does financial peace look like to YOU?

Post by Beach » Tue Feb 05, 2019 3:28 pm

Financial peace is not having to worry:
-About the bills that roll through the mail
-About unexpected expenses, because I planned ahead for them already
-Where my money is going because every penny is budgeted and tracked
-If I am laid off because I have enough cash in the bank to cover all my expenses
-That I have enough insurance to protect everything I own
-If my family is going to be taken care of in case I die

Nummerkins
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Re: What does financial peace look like to YOU?

Post by Nummerkins » Tue Feb 05, 2019 3:30 pm

1. No debt
2. Being able to walk away from a job at any time and be fine
3. Balancing saving, giving and SPENDING

MSUBobcat
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Re: What does financial peace look like to YOU?

Post by MSUBobcat » Tue Feb 05, 2019 3:31 pm

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am

What does Financial Peace look like to YOU? Thanks for your feedback, in advance!
IDK, I'm not dead yet.

Retired2013
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Re: What does financial peace look like to YOU?

Post by Retired2013 » Tue Feb 05, 2019 3:40 pm

LiterallyIronic wrote:
Tue Feb 05, 2019 11:59 am
I don't know what the "baby steps" are; I just know that's a Dave Ramsey thing. But I don't think I'll have financial peace until my mortgage is paid off. I feel like I had financial peace when I was renting, but once I took out a mortgage, it was gone.

My income is $75k (wife stays at home with the one-year-old). I put $625/month into my 401k (which comes with a $375/month match that is immediately 100% vested) and we put $1000/month into two Roth IRAs. And I pay an extra $225/month toward of $825/month mortgage. And I put money away every month toward my goals of a European vacation and a DeLorean.

Yet every time I see that outstanding mortgage balance (currently $141k on a $244k house), it brings me anything but peace. It's very stressful.
My wife asked me to payoff the mortgage for her 40th birthday. That was the fall of 1998. I cashed out most of our taxable investments to pay it off. I on the other hand said to keep the investments. I could earn more and then apply to the mortgage. Interest was tax deductible. Happy wife, happy life. We became debt free!

I then took the monthly mortgage amount plus the extra we were paying down and started the savings all over.

Eight months later, the wife is laid off, and never returned to work.

Year 2000, tech bubble / crash. Glad we paid off the mortgage!

We never slept better. No worry 2000 or 2008. Having a roof over your head that is paid for is fantastic.

Note: When wife was 17 & 18, her family moved out of town and she stayed behind. She didn't have a secured place to stay and ended up moving frequently. That feeling has stayed with her.

Bir48die
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Re: What does financial peace look like to YOU?

Post by Bir48die » Tue Feb 05, 2019 3:45 pm

I agree with no debt though many don't care if they have sufficient assets
Sufficient emergency fund (if you're working) to handle a need of $5k-$10k
If there is a downturn you can weather a 25%-40% loss in portfolio value
Comfort either in your vocation or retirement that you'll be okay

Texanbybirth
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Re: What does financial peace look like to YOU?

Post by Texanbybirth » Tue Feb 05, 2019 3:55 pm

Financial Peace for us looks like our current situation: 25 years left on a 30-year mortgage, 15% toward 401(k); putting away money each month for: healthcare expenses (chronic condition), car pymt (pay ourselves instead of the finance company), other sinking funds, and emergency funds. We have a little money leftover each month for a date night or margaritas and dinner at our fav Tex-Mex dive. I make about half of what you do, and sleep great at night. Technically my wife doesn't sleep as well as me because she is 8 months pregnant with #3. :P When a few extra bucks come in, we put it toward travel and a kids college/future fund.

I used to worry about money a lot. We now have a (simple) few steps we follow, and the rest really isn't up to us. For all his faults about investing advice (literally our only retirement investment is Vanguard's 2050 Target Date Fund), I like Dave Ramsey.

:beer
"Knowledge and innocence are both excellent things, and they are both very funny. But it is right that knowledge should be the servant and innocence the master." - GK Chesterton

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Edie
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Re: What does financial peace look like to YOU?

Post by Edie » Tue Feb 05, 2019 4:02 pm

When the last kid graduates college (5.25 years from now, hopefully) and the mortgage is paid off (13 years at current payment, but with kids done with college, may accelerate our payments). After that, we'll be debt free, and just have to worry about "regular expenses".

Currently, we're in the midst of 2 in college, another considering going back to it, and a junior in high school. Even though I make a solid income (broke the 6 figure line :shock: less than a year ago :beer), and have a stable job (my spouse is disabled), until the kids are fully launched, I don't think I will feel that "peace". I'm sure a lot of that comes from a truly awful first marriage, putting myself through school with loans after my divorce, and being at a negative net worth less than a decade ago. I'm light years ahead of where I was (and putting 30%+ of my salary towards retirement), but I'm not at "peace" yet. Still catching up.

smitcat
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Re: What does financial peace look like to YOU?

Post by smitcat » Tue Feb 05, 2019 4:15 pm

Crow Hunter wrote:
Tue Feb 05, 2019 3:21 pm
This is a GREAT question that I really haven't ever thought about. I don't know.

I am a multi-millionaire, completely debt free, and have a combined W-2 income of $175k expected to potentially go up quite a bit this year and I live in a VLCOL area.

I still don't have "peace".

I am right now looking at the busted knuckles on my right hand as I type that I got while on Sunday from removing and cleaning the throttle body on my 2011 Silverado that was misfiring on cold mornings.

I don't really like working on cars and I could easily afford to just drop it off somewhere and let them deal with it. I even thought that exact thought while on my knees on top of the radiator shroud on the front of the engine trying to pry a stupid Christmas tree clip off and banging my knuckles. While wiping the blood on my old white T-shirt, I actually said out loud, "I am a F*&$ing multi-millionaire, why am I doing this?!?!" The dogs came over and sat in rapt attention thinking that I was going to tell them but wandered off once they realized it was a rhetorical question.

But you know what, I got it off, sprayed it full of carburetor cleaner scrubbed off the carbon and put it back together and made sure it still ran. Why do you ask? Because I wouldn't be at "peace" paying someone to do something that I can do myself.

I am always laser focused on reducing spending and increasing income. I could likely retire right now and according to Firecalc I would have a 100% success rate based on our current spending, but I won't.

Not because I can't, but because I couldn't be at peace knowing that I just need one more million to allow me to spend $100,000/year until I die.

The irony is that if I get that extra million, I will probably come up with a reason why I need that 4th million.

So what is financial peace? I really don't know.
Obviously in this case money does not buy happiness.
Seacrhing for what does make you happy is well worth the time and efforts.

johnny
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Re: What does financial peace look like to YOU?

Post by johnny » Tue Feb 05, 2019 9:00 pm

Great topic!

I took the Dave Ramsey course a few years ago. I liked his treatment of working with your spouse on financial goals. So that's my #1 for financial peace - being on the same page as my spouse.

#2 - having an investment plan and AA that let's me sleep at night and vanquishes "fear of missing out". With Total Stock Market, everytime I hear that such and such company stock is doing well, I think "I've got some of that stock!" When I hear that Apple's price is sinking, I think "Good thing I've got the rest of the market!"

#3 - debts paid and emergency fund healthy. Getting ready to send my 3rd kid to college, and this has not been easy to keep ahead of during this season. This topic has most of my focus now.

Nate79
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Re: What does financial peace look like to YOU?

Post by Nate79 » Tue Feb 05, 2019 9:47 pm

Nummerkins wrote:
Tue Feb 05, 2019 3:30 pm
1. No debt
2. Being able to walk away from a job at any time and be fine
3. Balancing saving, giving and SPENDING
+1 we are debt free except our mortgage and moving towards total debt free as our big goal. LBYM, no debt is so much better than broke, in debt up to your eyeballs, yet watching your FICO score like the Super Bowl.

SoonerD
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Re: What does financial peace look like to YOU?

Post by SoonerD » Tue Feb 05, 2019 10:12 pm

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am
I can remember back in 2011, staring bankruptcy in the face. We had over $350,000 in total debt. We had a negative net worth of $200,000. I remember when our numbers were read out in the court, people actually laughed. I will never forget this. At that moment, I promised that I'd never put my family through that again.

Here we are now. $156,000 HHI (increasing by 3% each year), "secure" jobs, fully-funded emergency fund, only debt $162,000 left on a $215,000 15-year mortgage ($275,000 value), $1000/mo to Roth IRAs, $1700/mo to 403(b)'s, $1100/mo towards pensions, $500/mo towards sinking fund, $400/mo towards college, $250/mo towards mortgage acceleration.

What does Financial Peace look like to YOU?
1) you don't state your current net worth. So how much progress have you made in 7 years since B.R. court?
2) I think phrases like "only debt..." is a mistake in framing (maybe that's not the right word if BHs are going to associate it with the behavioral science terminology). I disagree with everyone who says there is "good debt". They may have experienced a good outcome - became a doctor or own a house but I think NO debt is better than "good" debt.

so with the above written FP for me is:
3) no debt
4) assets or income streams sufficient, along with life insurance, to provide for my family's needs and some basic level of wants without me working (or living).

before I reached #4 I'd say I felt financial calmness and confidence if not yet "peace"

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Re: What does financial peace look like to YOU?

Post by Grt2bOutdoors » Tue Feb 05, 2019 10:19 pm

RickBoglehead wrote:
Tue Feb 05, 2019 11:36 am
Just my observation, but listening to Dave Ramsey and other sources often exacerbates the lack of feeling financial peace.
Listening to Dave Ramsey should instill gratitude if you are to be so fortunate as to not be in some of the predicaments many of these folks are in. Listen to a few of those Debt Free Screams, sounds like those people have reached financial peace.

OP - you’ve done well for yourself,congratulations. :sharebeer There is nothing to be ashamed of, unfortunately there are cruel people in this world, those who laughed when you had to list your debts, well let’s just say they will never be at peace. :wink:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

JebTN
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Re: What does financial peace look like to YOU?

Post by JebTN » Tue Feb 05, 2019 10:53 pm

Nummerkins wrote:
Tue Feb 05, 2019 3:30 pm
1. No debt
2. Being able to walk away from a job at any time and be fine
3. Balancing saving, giving and SPENDING
This was my initial plan and reached it at 55. I was enjoying work then and worked 2 more years. 4 years ago we decided to move (lower cost of living and a lot more) and at 67 discovered the bank was willing to loan us a large amount of money at 3.5% so we could own two houses at the same time. After we sold our paid off house I decide I could do better than 3.5% with the money so we are now in debt again but could pay it off any time we wanted but for the time being I figure I will use it awhile.

Living below our means has been our life style since early days of our marriage and still is, even though we could spend a lot more. When I decided to walk out the door at 57 I talked to several financial advisor to make sure I didn't make a miscalculation. Both told me I didn't have enough money because I needed to with draw at around 110% of my income. I asked why since we were living on less that 50% now. They both said go for it. I didn't hire either of them but continued doing my own investing. I sleep well at night. SS at 70 plus mandatory IRA withdrawal is about twice what we spend.

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rashad3000
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Re: What does financial peace look like to YOU?

Post by rashad3000 » Wed Feb 06, 2019 12:44 am

Hey everyone. I’ve really enjoyed reading all of the responses! Thanks so much for the valuable feedback!

Sorry, I did forget to mention that our current net worth is approximately $265,000. It climbs by $4000-5000/month, depending on many variables.

Topic Author
rashad3000
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Re: What does financial peace look like to YOU?

Post by rashad3000 » Wed Feb 06, 2019 12:45 am

Grt2bOutdoors wrote:
Tue Feb 05, 2019 10:19 pm
RickBoglehead wrote:
Tue Feb 05, 2019 11:36 am
Just my observation, but listening to Dave Ramsey and other sources often exacerbates the lack of feeling financial peace.
Listening to Dave Ramsey should instill gratitude if you are to be so fortunate as to not be in some of the predicaments many of these folks are in. Listen to a few of those Debt Free Screams, sounds like those people have reached financial peace.

OP - you’ve done well for yourself,congratulations. :sharebeer There is nothing to be ashamed of, unfortunately there are cruel people in this world, those who laughed when you had to list your debts, well let’s just say they will never be at peace. :wink:
❤️❤️❤️

Thanks for the kind words!

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rashad3000
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Re: What does financial peace look like to YOU?

Post by rashad3000 » Wed Feb 06, 2019 12:47 am

SoonerD wrote:
Tue Feb 05, 2019 10:12 pm
rashad3000 wrote:
Tue Feb 05, 2019 11:30 am
I can remember back in 2011, staring bankruptcy in the face. We had over $350,000 in total debt. We had a negative net worth of $200,000. I remember when our numbers were read out in the court, people actually laughed. I will never forget this. At that moment, I promised that I'd never put my family through that again.

Here we are now. $156,000 HHI (increasing by 3% each year), "secure" jobs, fully-funded emergency fund, only debt $162,000 left on a $215,000 15-year mortgage ($275,000 value), $1000/mo to Roth IRAs, $1700/mo to 403(b)'s, $1100/mo towards pensions, $500/mo towards sinking fund, $400/mo towards college, $250/mo towards mortgage acceleration.

What does Financial Peace look like to YOU?
1) you don't state your current net worth. So how much progress have you made in 7 years since B.R. court?
2) I think phrases like "only debt..." is a mistake in framing (maybe that's not the right word if BHs are going to associate it with the behavioral science terminology). I disagree with everyone who says there is "good debt". They may have experienced a good outcome - became a doctor or own a house but I think NO debt is better than "good" debt.

so with the above written FP for me is:
3) no debt
4) assets or income streams sufficient, along with life insurance, to provide for my family's needs and some basic level of wants without me working (or living).

before I reached #4 I'd say I felt financial calmness and confidence if not yet "peace"
About $265,000 net worth.

You are right, I loathe debt. I should have referred to my mortgage as “remaining debt” as opposed to “only debt”.

MotoTrojan
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Re: What does financial peace look like to YOU?

Post by MotoTrojan » Wed Feb 06, 2019 12:58 am

smitcat wrote:
Tue Feb 05, 2019 2:24 pm
Svensk Anga wrote:
Tue Feb 05, 2019 2:11 pm
LiterallyIronic wrote:
Tue Feb 05, 2019 11:59 am
But I don't think I'll have financial peace until my mortgage is paid off.
+1

It was very comforting to us during the 2008/09 unpleasantness that we had paid extra on our mortgage (6-5/8%) and were done with it as of mid-2007. I think it is worth something to be debt free even if it fails to be the best choice mathematically. It helped too that without the mortgage payment, we could have gotten by fairly well on only the lower earning spouse's income.
Sone folks that pay off their mortgage early put themselves in a much worse situation if/when there is a repeat of conditions such as 2008/2009.
And other folks are even worse off because instead of paying off the mortgage they bought fancy toys. You can’t go through life with 100% liquidity and just put everything into debt. If someone is deciding to pay off their mortgage early id imagine they’re the type to plan for a 2008 situation.

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whodidntante
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Re: What does financial peace look like to YOU?

Post by whodidntante » Wed Feb 06, 2019 1:14 am

Stop thinking in baby steps that you got from some charlatan's book and start planning like a rational adult. I hereby give you permission to graduate from the demeaning baby talk of David Ramsey. I find what makes me feel secure is having lots of money than I can access and I don't mind carrying low-interest debt at all. I'm even OK with the great majority of that money being invested in equities. If you're different than me that's fine, because you should make your own plan anyway. You/your family are the only ones who needs to live with your plan.

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Sandtrap
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Re: What does financial peace look like to YOU?

Post by Sandtrap » Wed Feb 06, 2019 1:48 am

What does financial peace look like?

Waking up each morning to this.
. . . . and not having to go to work . . . ever. . . :D

Image
A balance between what can be put on a spreadsheet . . . and what cannot.

smitcat
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Re: What does financial peace look like to YOU?

Post by smitcat » Wed Feb 06, 2019 8:05 am

MotoTrojan wrote:
Wed Feb 06, 2019 12:58 am
smitcat wrote:
Tue Feb 05, 2019 2:24 pm
Svensk Anga wrote:
Tue Feb 05, 2019 2:11 pm
LiterallyIronic wrote:
Tue Feb 05, 2019 11:59 am
But I don't think I'll have financial peace until my mortgage is paid off.
+1

It was very comforting to us during the 2008/09 unpleasantness that we had paid extra on our mortgage (6-5/8%) and were done with it as of mid-2007. I think it is worth something to be debt free even if it fails to be the best choice mathematically. It helped too that without the mortgage payment, we could have gotten by fairly well on only the lower earning spouse's income.
Sone folks that pay off their mortgage early put themselves in a much worse situation if/when there is a repeat of conditions such as 2008/2009.
And other folks are even worse off because instead of paying off the mortgage they bought fancy toys. You can’t go through life with 100% liquidity and just put everything into debt. If someone is deciding to pay off their mortgage early id imagine they’re the type to plan for a 2008 situation.
I was making specific reference to folks near us in the Northeast that went through the 2008/2009 downturn and also lost their jobs.
They had little ability to pay and stay in their homes as they focused on paying down the mortgage. When they coudl no longer pay they did not get 'credit' for the previous early payments - they still owed taxes and utilities in real time. Compare that to folkss who were in the same position and made lower home payments durinhg their crisis and could pay the taxes and utilities. Paying off early without sufficient liquidity leaves one is a place with much less options and certainly less ability to shelter whatever they have in a crisis - we have seen it here first hand.

"If someone is deciding to pay off their mortgage early id imagine they’re the type to plan for a 2008 situation."
Certainly not from what we saw first hand in 2008/2009 and noty from some of the respomses we see in these threads.

Leemiller
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Re: What does financial peace look like to YOU?

Post by Leemiller » Wed Feb 06, 2019 8:36 am

Unfortunately, I don’t think financial peace is something you can be talked into feeling (but if you figure out that trick let me know). Objectively, my husband and I both earn high incomes and we have enough saved now for a good retirement. We have a mortgage, but like the OP, could sell our home and pay cash for a different one in another part of the country/downsize where we now live.

I grew up in a household with a lot of financial stress - parents borrowed money from me when I was in middle school so they’d pay me interest vs the credit card. All that left some lasting damage. I do think I’m more an overspender than an oversavwr overall. The net worth tracking has helped me, but I’d also recommend having more in retirement accounts. Also, for those of you that are single income but married maybe your spouses can find a way to contribute financially. If I was in that situation I think my money anxiety would be off the charts.

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Re: What does financial peace look like to YOU?

Post by Olemiss540 » Wed Feb 06, 2019 8:49 am

Once your plan is set and you are working it with success, the next step is to forget about it! Trying to focus your energy on ANYTHING else as the plan goes on autopilot and the money starts to compound. It's the opposite of when your eyes deep in debt and every thought has to be laser focused on making extra payments.

Now that it is a new stage in your life, once your investments are setup and budget is maximized for each dollar, you need to let go! Do things that force your mind to focus on other things. Stop reading about investing and finances. Stop looking weekly or daily at investments and bank accounts. Start finding new hobbies or thinking/researching things to do with those you love. Do some handy work or read a book. Exercise. Meditate/pray/yoga/whatever.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Bully3000
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Re: What does financial peace look like to YOU?

Post by Bully3000 » Wed Feb 06, 2019 9:22 am

Still not sure, a divorce a few years back really destabilized my financial peace.

I have an emergency fund in case of job loss so that is one aspect which feels good.

1 more year of Alimony payments will sure help me feel more peaceful once it is gone :happy

Maxing out my 401k and IRA but still need a few more years to build back up what I lost in the Divorce for long term financial peace.

Aggressively paying of my mortgage, hoping to be done in 5 years and this will be huge for me, I know not everyone agrees but for me to lock in cheap rent(Taxes and Insurance only) for life is something I have dreamed about for a long time.

I think If i could get mortgage paid off in the next 5 years while still maxing 401k and IRA and then taking money I used to pay down mortgage and put it all in a taxable for a few years I would feel at peace despite not being actually long term financially secure. Seems like a lot on this forum have 30x annual expenses etc in taxable accounts and I would image that is a great feeling to have.

So to summarize financial peace for me is the ability to not worry too much about Job loss and being able to take almost any position and still easily cover expenses and have some fun money left over.

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Re: What does financial peace look like to YOU?

Post by RadAudit » Wed Feb 06, 2019 4:15 pm

When you come to the realization that you'll probably die before you run out of money is somehow reassuring.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

alfaspider
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Re: What does financial peace look like to YOU?

Post by alfaspider » Wed Feb 06, 2019 4:47 pm

rashad3000 wrote:
Tue Feb 05, 2019 11:30 am

We are working baby steps 4, 5, & 6 right now. Does the actual peace come when you are in baby step 7? I think that I'll be at peace when we have zero debt, but maybe even then, I will still have concerns.

I didn't know what the baby steps were before this post, but I can't say I necessarily agree with step 6 (pay off mortgage early). Paying off your mortgage early may or may not be a good decision, but it certainly does not belong before contributions to a taxable account or retirement account contributions beyond 15% of your income. I'd only consider it once your bond allocation in your taxable accounts starts to approach the size of your mortgage AND the prevailing bond yields are less than your mortgage interest rate (and you cannot refinance your mortgage to change that).

The problem with his approach is that it is actually detrimental to what I would consider "peace." Having significant liquidity is a big component to peace. Once you have significant liquid assets, there's no conceivable bill you could get that you wouldn't be able to pay immediately without going into debt. It also means you could go years without income before having to tap retirement accounts. For me, knowing that to be the case is a huge anxiety reliever. Paying off the mortgage first means you are illiquid beyond your emergency fund and are still susceptible to going into debt again for a large unexpected bill. And unless you refinance (which typically isn't free), paying down your balance doesn't change your monthly payment obligation.

Personally, I may pay off my mortgage early, but only if I can do it all in one fell swoop while maintaining at least a couple of years expenses in my emergency + taxable brokerage.

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TheTimeLord
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Re: What does financial peace look like to YOU?

Post by TheTimeLord » Wed Feb 06, 2019 5:55 pm

RadAudit wrote:
Wed Feb 06, 2019 4:15 pm
When you come to the realization that you'll probably die before you run out of money is somehow reassuring.
I have come to that revelation several times but it never sticks long enough to become a belief or to keep me from moving the goal posts. I think some are just natural planners and/or goal setters that will always find it difficult to find financial peace even though rationally they know that is how they should feel.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

Broken Man 1999
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Re: What does financial peace look like to YOU?

Post by Broken Man 1999 » Thu Feb 07, 2019 4:29 pm

RadAudit wrote:
Wed Feb 06, 2019 4:15 pm
When you come to the realization that you'll probably die before you run out of money is somehow reassuring.
It is kinda funny in that I'm turning into my father. His biggest fear was becoming a burden to his children.

He prospered and didn't become a burden to anyone.

I have prospered and I believe I will not become a burden to my children. That realization gives me great comfort, though, in reality I might just be deluding myself.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

Broken Man 1999
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Re: What does financial peace look like to YOU?

Post by Broken Man 1999 » Thu Feb 07, 2019 4:30 pm

Deleted
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

SRenaeP
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Re: What does financial peace look like to YOU?

Post by SRenaeP » Thu Feb 07, 2019 4:55 pm

Broken Man 1999 wrote:
Thu Feb 07, 2019 4:29 pm
RadAudit wrote:
Wed Feb 06, 2019 4:15 pm
When you come to the realization that you'll probably die before you run out of money is somehow reassuring.
It is kinda funny in that I'm turning into my father. His biggest fear was becoming a burden to his children.

He prospered and didn't become a burden to anyone.

I have prospered and I believe I will not become a burden to my children. That realization gives me great comfort, though, in reality I might just be deluding myself.

Broken Man 1999
Burden is in the eye of the beholder, at least for me. My father is a bit conservative in his spending in retirement because he doesn't want to become a burden. However, as his child, I have urged him to blow it all. He and my (late) mother worked hard and saved and I think he should enjoy the fruits of his labor. Because he/they were never spendthrifts or financially irresponsible, I wouldn't see it as a burden if he did need help/subsidy from me later in life due to medical expenses, etc.

On the other hand, I have other family members who have been financially reckless as long as I can remember. I would absolutely feel resentment and feel they were a burden if they came to me for financial assistance.

Broken Man 1999
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Re: What does financial peace look like to YOU?

Post by Broken Man 1999 » Thu Feb 07, 2019 5:07 pm

SRenaeP wrote:
Thu Feb 07, 2019 4:55 pm
Broken Man 1999 wrote:
Thu Feb 07, 2019 4:29 pm
RadAudit wrote:
Wed Feb 06, 2019 4:15 pm
When you come to the realization that you'll probably die before you run out of money is somehow reassuring.
It is kinda funny in that I'm turning into my father. His biggest fear was becoming a burden to his children.

He prospered and didn't become a burden to anyone.

I have prospered and I believe I will not become a burden to my children. That realization gives me great comfort, though, in reality I might just be deluding myself.

Broken Man 1999
Burden is in the eye of the beholder, at least for me. My father is a bit conservative in his spending in retirement because he doesn't want to become a burden. However, as his child, I have urged him to blow it all. He and my (late) mother worked hard and saved and I think he should enjoy the fruits of his labor. Because he/they were never spendthrifts or financially irresponsible, I wouldn't see it as a burden if he did need help/subsidy from me later in life due to medical expenses, etc.

On the other hand, I have other family members who have been financially reckless as long as I can remember. I would absolutely feel resentment and feel they were a burden if they came to me for financial assistance.

I know what you mean. I'm sure my father would be totally POed if he had understood we didn't use his nursing home policy, instead we kept him at his home with 24X7 health care aides.

Broken Man 1999

Edited to add: As a child of the depression era, despite our urging him to spend more on himself, it fell on deaf ears. But, we finally realized he was happy, so we stopped trying to get him to change his spending. He was only frugal on himself, very generous to others.
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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