What does financial peace look like to YOU?

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

Post by IowaFarmBoy » Thu Feb 07, 2019 6:24 pm

I think we have been a similar path to the OP. We went through bankruptcy about 25 years ago due to a failed business (sole proprietorship) and I had put all I had into trying to save it so we were flat broke personally. Our home was foreclosed. I started a new career in IT making $31k a year supporting a family of 4. As I recall, we were $500/year over qualifying for subsidized housing. So between the years prior to bankruptcy and after re-starting, we had several very lean years. We've been blessed with good career with significant salary growth and we've put a lot away and inherited some and should have a very comfortable retirement. We've been debt free for almost 15 years after getting our mortgage paid off.

At an intellectual level, I feel very comfortable with where we are financially. But there is also part of me that is very risk averse and that makes me wonder if we will ever have "enough"- not to spend but for security. I think things like "if I work 2 years longer, I would have an extra $5k in pension and I wouldn't have to pull as much from our retirement accounts" even though conservative projections indicate that we are not likely to come close to spending them. I think I view the potential risks that could happen during a 30 year retirement as much more likely than many others would. Going through something like we have- from very successful to broke- pierces the veil of invincibility.

I don't think I have really given you an answer but just wanted to affirm you in that I think what you are feeling is pretty normal for what you have been through.

nix4me
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Re: What does financial peace look like to YOU?

Post by nix4me » Thu Feb 07, 2019 7:54 pm

Financial Peace would look a lot like $5M and a paid for house.

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

Post by Wricha » Thu Feb 07, 2019 8:16 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.
Had to laugh “abuse is the only way to learn” maybe not this year but soon you will be paying others to stuff you could do it’s called wisdom.

Dottie57
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Re: What does financial peace look like to YOU?

Post by Dottie57 » Fri Feb 08, 2019 8:06 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.
Me too. Very happy my home wasn’t in trouble. And I had enough in savings to last a year.

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

Post by heyyou » Sat Feb 09, 2019 4:50 pm

Those early savings are the ones that grow the most, so the priority would be paying off high rate debt first, while maxing annual retirement saving accounts, then paying extra on the mortgage. There is some financial security at that point, but perhaps not peace.

With 13.5 years of retirement experience since age 55, we are at financial peace since we now know we can and did live within our means in early retirement. The bull market since the 2008 Crash in early retirement has helped, we have ten plus years of spending in bond funds, and SS (equal to about half of our spending) starts in 13 months at age 70. We are likely the most comfortable blue collar couple in our neighborhood, but we also have the oldest cars but they are still very good ones, and our down-sized for retirement house is the smallest one here. We flunked consumerism and won at financial peace, which suits us better. Others are welcome to do whatever suits them.

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

Post by Beensabu » Sat Feb 09, 2019 5:44 pm

rashad3000 wrote:What does Financial Peace look like to YOU?
No debt. Own home free and clear. Healthcare covered. $30k spendable income per year.

That would do it.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next."

almostretired1965
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Re: What does financial peace look like to YOU?

Post by almostretired1965 » Sat Feb 09, 2019 5:48 pm

For me financial peace has always meant having F-you money; i.e., I am basically unconcerned about getting laid off or fired and/or can quit my job without any hesitation should the BS become something I am not willing to put up with. The problem is for someone with my risk adverse personality, it never feels like you have enough even when it is objectively so..... Though I never really struck it rich via options/RSUs despite 2 stints in tech, through fairly diligent savings, my wife and I have managed to accumulate mid 7 figures by our mid-fifties. We have no debt; even got rid of the house a couple of years ago. There is virtually no way, given our life style, that we will ever run out of money, but I still have trouble pulling the trigger and going into retirement. I keep telling my wife, just a couple more years ......

Nissanzx1
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Re: What does financial peace look like to YOU?

Post by Nissanzx1 » Sat Feb 09, 2019 5:51 pm

For me it’s no mortgage, no debt, and a good start at retirement.

il0kin
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Re: What does financial peace look like to YOU?

Post by il0kin » Sat Feb 09, 2019 6:14 pm

I haven't ever read a DR book or listened to the show, but financial peace to me means having the knowledge to weather the inevitable curve balls life throws at you, and taking steps to minimize the impact of those curve balls.

So, for me/us, that knowledge has lead to the following actions:
-paying off student loans
-paying off car loans
-saving 20% into retirement accounts
-saving an extra 3% into savings accounts to continue bulking up the e-fund
-making tax-efficient decisions when possible
-buying an undervalued house at under 2x gross income in a highly desirable area and putting some work into it (top school district in my state means houses hold their value and )
-working for a company which is profitable and nearly as stable as the government (although this has probably cost some earning potential, there are some top notch benefits including a 457b (huge benefit for early retirement if desired), remarkable healthcare and plenty of PTO)
-thoughtfully choosing a career path that is not likely to be automated or outsourced and specializing to become unique and hard to replace w/in my org

So, all of those things combined mean that while our NW is not particularly large yet (both are only 30) i feel at peace. I paid off our car loan a few days ago and that was the last piece of the puzzle. Still have a mortgage, but very manageable and in no rush to pay off.

Rus In Urbe
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Re: What does financial peace look like to YOU?

Post by Rus In Urbe » Sat Feb 09, 2019 6:52 pm

BRAVO to you for facing up to your really dangerous situation and making such excellent progress!
I'm really impressed. You dug yourself out of a really deep hole and if you keep going on this path, you'll be in amazing shape later.
And you'll be able to retire with security.

What does financial peace look like? Well, just like what you are doing now.
Being in control of your financial life.
Making good decisions.
Living Below Your Means LBYM.
Investing wisely.
Staying the course STC.
Being part of the BH forum (yep, that too can bring you a sense of community, and peace).

At this moment, for me and my SO, peace is:
No debt, no mortgage.
Kids independent and successful.
More money than we need.
Retirement coming up later this year.

But peace is also a process. Enjoy every step of your journey!
I'd like to live as a poor man with lots of money. ~Pablo Picasso

smitty1515
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Location: United States

Re: What does financial peace look like to YOU?

Post by smitty1515 » Sat Feb 09, 2019 7:52 pm

1.) 25 x annual expenses
2.) paid off mortgage
3.) giving 10% plus of my income per yr
4.) giving my time to meeting others and giving hope to the financially illiterate
5.) the ability to choose my pursuits based on interest and fulfillment and not pay
Be fearful when others are greedy and greedy when others are fearful. -Warren Buffett

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

Post by sunny_socal » Sun Feb 10, 2019 10:33 am

nix4me wrote:
Thu Feb 07, 2019 7:54 pm
Financial Peace would look a lot like $5M and a paid for house.
Same! That would be Enough.

I've wondered what it would be like to win the lottery (eg $100M+) I think that would actually be _more_ stressful than merely having enough.

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

Post by letsgobobby » Sun Feb 10, 2019 11:32 am

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!
When our taxable account was large enough to pay off our mortgage, we broke through. We aren't DR adherents, though I enjoy his show, so we chose not to pay off the loan. Just the knowledge that we can, whenever we want, is enough.

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

Post by rashad3000 » Mon Feb 11, 2019 3:34 pm

Thanks for the feedback, everyone. I truly appreciate it. I feel like I've learned so much.

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

Post by pennywise » Mon Feb 11, 2019 3:39 pm

almostretired1965 wrote:
Sat Feb 09, 2019 5:48 pm
For me financial peace has always meant having F-you money; i.e., I am basically unconcerned about getting laid off or fired and/or can quit my job without any hesitation should the BS become something I am not willing to put up with. The problem is for someone with my risk adverse personality, it never feels like you have enough even when it is objectively so.....
Yes, this! We are at that point; husband just retired and I could leave at any time with no negative financial effect. However, like you I can't quite shake that niggling feeling of counting on a paycheck each month. However, the more nonsense I deal with at work the less the niggle so we shall see how much longer I let it take up space in my brain.

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