A Path to FIRE (or Semi-FATFIRE) in 10 Years

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helver1770
Posts: 5
Joined: Tue Oct 29, 2013 2:01 pm

A Path to FIRE (or Semi-FATFIRE) in 10 Years

Post by helver1770 » Mon Jul 15, 2019 2:51 pm

Learned about Bogglehead and FIRE 6 years ago and started saving crazy in the last few years. I wish I started my path to FIRE sooner....

Status Married with 2 kids (6 & 4)
Age: Me (41) / Wife (36, not working)
Location: VHCOL
Approx income: 250K - 300K / yr (employed and side business)


Assets: $3.159 mil
Dept: $696K
Net Worth: $2.463 mil

Asset Breakdown
$70K - Cash / Emergency Fund
$959K - 401K / Roth IRA / T-IRA / Taxable Account / 529
$820K - Property #1, Primary Resident
$580K - Rental #1
$530K - Rental #2
$200K Personal Loan to fund my business

Dept
Mortgage #1 - $337K
Mortgage #2 - $210K
Mortgage #3 - $149K

Fund Info
Retirement
401K - 250K (VITAX)
R-IRA - $93K (VTSAX)
T-IRA - $51K (VTSAX)

​Taxable
$180K - VTSAX
$100K - VGT
$55K - VBTLX
$55K - VTIAX
$37K - TSLA (avg cost $270)

​529
$175K - Vanguard Total Market (2 kids)

​Current / Planned Contribution (Yearly):
$12,000 - VTSAX (Roth IRA)
$18,500 - VITAX (401K)
$24,000 - VGT (Taxable)
$24,000 - VTSAX (Taxable)
$4,800 - VBTLX(Taxable)
$4,800 - VTIAX (Taxable)

​I'll contribute more here and there if allowed.

​Planned Future:
- FIRE by age 51 - 53 with min liquid asset of $4MM. I want to target 4% SWR @ $160,000 / year + rental income.
- Move to a bigger house in 3 years - approx budget $1.3MM to $1.5MM (Sell Primary Resident).
- Quit daily job in 2 - 3 years to focus on my business


Questions/need advise:
- Current allocation is heavy on IT/Tech. Should I do anything different now or in the future? Or keeping going all-in on VTSAX & VGT (& VITAX)? I'm not in tech/IT industry, but I believe they are the future.
- Is there a big difference on going heavy on VGT vs going steady on VTSAX?
- Any way to re balance taxable account in the future without triggering taxable income? I was thinking about rebalance most of my retirement account from VITAX/VTSAX to Bond when I get closer to FIRE or during FIRE.
- Any advises? What can do on the taxable side to achieve FIRE sooner?
- Any recommendation on different industry sector ETF/Fund to diversify?
Last edited by helver1770 on Mon Jul 15, 2019 3:27 pm, edited 1 time in total.

Shael_AT
Posts: 7
Joined: Mon Jul 15, 2019 2:36 pm

Re: A Path to FIRE (or Semi-FATFIRE) in 10 Years

Post by Shael_AT » Mon Jul 15, 2019 3:07 pm

We have almost, nearly identical stats. Same # of rental properties and in general total NW. The only difference is we finally landed on our first home for a primary residence, but thats neither here nor there :D

I would advise you consider and plan for a 3% or 3.5% rate, versus 4.

I know, I know, why on earth? It's a safer long term bet, and if you are psychologically accustomed to having high income, there is a component of having the buffer space, or leverage, of that .5%-1% withdrawal rate being "held back", so to speak, for disaster health expenses, property expenses or for a controlled lifestyle-creep depending on the year and frame of mind you happen to be in.

Little more work, but you get to have unusual amounts of extra fun with it.

Now:

Otherwise, hammer away. Don't pin yourself to a specific industry, ESPECIALLY IT.

The total value out of this vertical is meeting its climax, you already see the commoditization of common IT, Cloud, Security, VoIP and other services. For many niches in IT/SW/Telecom, its already a race to the bottom coupled with aggregation of verticals into 2-3 companies, which happen to be near-top on VTSAX anyways ;)

Rebalancing in Tax-Exempt accounts is easier than not. You can negate most tax impact there. Taxable* you will see some gains captured, but you already have VBTLX in taxable, so I sense you're a bit of a masochist already and like paying your dues, haha.

VTSAX, VTIAX, VBTLX are the solid trio. Perhaps consider Emerging Market exposure or Small-Cap exposure if you are feeling risky, but thats entirely up to you.

Great job here
Last edited by Shael_AT on Mon Jul 15, 2019 3:40 pm, edited 1 time in total.

BanquetBeer
Posts: 335
Joined: Thu Jul 13, 2017 5:57 pm

Re: A Path to FIRE (or Semi-FATFIRE) in 10 Years

Post by BanquetBeer » Mon Jul 15, 2019 3:09 pm

To clarify you have:

$1.805 mil invested (excluding 529 & primary residence)

If you want invested assets for your (risky at age 50) 4% SWR you currently have $1.054 mil (excluding rentals)

You would need 6% return to make $4mill by age 53 investing $112k/yr until then for the next 12 years. (However you want to consider inflation in that)

It’s doable but you have high real estate risk and significant amount of net worth tied up in real estate/personal house.

I guess I don’t understand but you want significant increase in lifestyle upon retirement?

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