The Intersection of FIRE and Disney

[BridgetBordeaux]

No, I don't have to use Schwab, but am looking for a place to consolidate the various scattered accounts we have and simplify our holdings. I do like that there's a local branch to talk to people if needed. We met with a Schwab person tonight and it looks like our options range from DIY (which is fine) to full-on 1%AUM, or even some of each plus options in the middle, and the arrangement is fluid, meaning we can change what that relationship looks like whenever we want. After years of my pestering, DH has finally agreed to move assets away from the worthless financial advisor he inherited when his father passed away.

I want you to know that over the past 20 years I have done all my financial stuff via the web or the phone. I just recently got a full financial review over the phone and then was sent a PDF. I have not met face to face with someone since about 2001. And that, quite frankly was a waste of a trip.

We don't even have a local bank account. All our stuff is out of state and via the web/800 number.

The basics are always the basics- have a good diversified portfolio that is reasonable for your age, circumstances, and goals. Once you get things set up, you could pretty much be on auto pilot each year until your next annual check in.

Of course you want to have quick access to your emergency fund.....10K, 20K, etc. Those accounts can always be linked to a home town financial institution if that make you feel more secure.

We are retired military so I also use some USAA products and services.

We admittedly started out paying about 1% for portfolio management, but once I really looked at what they were doing, I took the funds and started doing it myself. Many funds at Vanguard, for example, keep all the rebalancing on autopilot. The domestic/international......Stocks/Bonds ...........etc...ratios are always maintained at the level they tell you in the prospectus.

I know getting financial advice from a Disboards Thread may seem a little strange, but read over Money or Kiplinger's material and you will be surprised how easy it is to follow along

Good Luck!

 

[SouthFayetteFan]

I try to manage my taxes like you, so I get it. Do you have a Roth IRA (not 401K). If you "overfund" tax deferred accounts and bring your taxable income too low, you always have the option to convert IRA funds to a Roth - thus using up the rest of your low tax bracket.

We sold a rental house in last month. Kills me to pay the taxes on that!

I have money in all of the above, lol!

• Me: 401k
• Me: Roth 401k
• Me: IRA
• Me: Roth IRA
• Wife: IRA
• Wife: Roth IRA

Thank you for that reminder too!! You make a great point there! I should absolutely err on the side of too much conventional as I can correct that via a Roth conversion.

 

[platamama]

I want you to know that over the past 20 years I have done all my financial stuff via the web or the phone. I just recently got a full financial review over the phone and then was sent a PDF. I have not met face to face with someone since about 2001. And that, quite frankly was a waste of a trip.

We don't even have a local bank account. All our stuff is out of state and via the web/800 number.

The basics are always the basics- have a good diversified portfolio that is reasonable for your age, circumstances, and goals. Once you get things set up, you could pretty much be on auto pilot each year until your next annual check in.

Of course you want to have quick access to your emergency fund.....10K, 20K, etc. Those accounts can always be linked to a home town financial institution if that make you feel more secure.

We are retired military so I also use some USAA products and services.

We admittedly started out paying about 1% for portfolio management, but once I really looked at what they were doing, I took the funds and started doing it myself. Many funds at Vanguard, for example, keep all the rebalancing on autopilot. The domestic/international......Stocks/Bonds ...........etc...ratios are always maintained at the level they tell you in the prospectus.

I know getting financial advice from a Disboards Thread may seem a little strange, but read over Money or Kiplinger's material and you will be surprised how easy it is to follow along

Good Luck!

Thank you. Good advice. I enjoy reading Money and Kiplinger's though I haven't done it much recently, and have been a DIY investor for over 20 years and feel mostly comfortable with it. But I have made many mistakes along the way, probably the biggest being that I should have done a lazy 3 or 4 fund portfolio and left it at that! But now as I'm looking at paying for college in a few years and retirement not too long after that, I feel there are clever tactics to consider to make the most of what we have but I don't trust that I know all of them. I think my mindset is still in my 30's in looking at our financial picture, but that was a decade ago haha, and we need to make adjustments for where we are now in life, and that's where I think I could use some outside perspective.

 

[BridgetBordeaux]

Thank you. Good advice. I enjoy reading Money and Kiplinger's though I haven't done it much recently, and have been a DIY investor for over 20 years and feel mostly comfortable with it. But I have made many mistakes along the way, probably the biggest being that I should have done a lazy 3 or 4 fund portfolio and left it at that! But now as I'm looking at paying for college in a few years and retirement not too long after that, I feel there are clever tactics to consider to make the most of what we have but I don't trust that I know all of them. I think my mindset is still in my 30's in looking at our financial picture, but that was a decade ago haha, and we need to make adjustments for where we are now in life, and that's where I think I could use some outside perspective.

You can choose to pay a one time fee to a certified financial planner and they can evaluate and give guidance. They don't sell anything. You pay your fee and that is the end of the relationship if you choose for just the one "service"

 

[BridgetBordeaux]

Then I washed it down with Kroger brand cola out of a 2L bottle that cost less than a buck!

Sorry to quote myself here..................but I just picked up four 2L bottles of Kroger brand cola for 59 cents a bottle.
I'm gonna achieve my retirement one 2L bottle at a time!
(sale runs through Tuesday night)

 

[DIS_MERI]

Have we had a car buying discussion? I don't think I remember seeing one, but it's a decently long thread.

I was wondering what everyone's thoughts are on how you buy cars. Do you buy new or used? Do you pay cash, charge as much as possible to a credit card for churning, or finance at a low rate because you can earn more on your investments than you would be paying in interest? Thoughts?

 

[Mome Rath]

For cars the only "rule" we tend to follow is to buy outright and drive it into the ground. We buy inline with our "budget" so when we were younger it was really cheap used cars, and then more and more current, now we will buy new if it is a good deal and from our local dealer that comes with a lot of benefits.

 

[SouthFayetteFan]

I last purchased a car in December 2016. I was moving into a sales role at the bank which was going to require significantly more driving (vs. my daily commuter train ride). At the time I had a Honda Accord with about 50k miles on it but it was going to need new tires, brakes, and significant Air conditioning repairs. (When you're driving <100 miles a week and never in snow you can ignore this stuff, haha).

I elected to trade it in for a used Honda Civic which was 5 years newer with about 14k miles which cost me about $8k out of pocket (after trade value and such). I saw about a 40% increase in fuel economy and avoided paying an estimated $3k-$4k in repairs. It felt GREAT to purchase a car in cash for the first time in my life, I never plan to have an auto loan again.

I used to attribute pride and self-worth to the vehicle I drove but as I began to embrace the FIRE movement I realized that the car I drove at 30 would probably have little to do with how I felt about myself in my 40s and 50s. Wasting money on a depreciating asset would only lengthen my working years and/or increase my dependency on a regular paycheck. I'm pretty happy with the psychological change I've embraced there

EDIT: my rough estimate is that I've saved $1,050 in fuel due to the higher MPG in the first 2 years and my total maintenance on the vehicle in that time is $448 so I'm very pleased. It certainly wasn't a necessary purchase at the time, but the added safety features and Bluetooth are great and if I hold on to it long enough the maintenance and fuel savings will eventually pay off I think and make it a sound fiscal decision as well.

 

[BridgetBordeaux]

Without going into too much detail, once you buy a good specimen of a historically reliable vehicle (new or used)..........

1) Open up the owner's manual and do what they say, when they say in the book. Avoid upsells by the dealer. Only use the chemicals and procedures called out by the factory. You may choose to do things (oil change) more frequently, but that 3000 mile sales pitch is from 2 decades ago. Most cars are now 5k to 10k miles per oil change.

2) Keep the car clean inside and out. It reduces the chances for rust to develop and gives you a chance to notice decay or hear funny noises if the car is not a rolling trash can!

3) Find someone to look over the car from time to time (6-12 months). Tire wear, brake wear, fluid leaks are less catastrophic if caught early.

4) Try to keep the car 7-10 years. If financed, the note will be paid off and you will get many years of low cost driving.

5) Don't let the cost of 4 tires, new brake pads, an alignment, a new battery, and filters cause you to sell the car. Even if all done at once, that modest bill, compared to 25K-35K for a replacement vehicle, will extend the life of your car by several years.

Note- if for some reason your specimen becomes unreliable beyond your tolerance, or if it has old technology and is now considered a little unsafe, dump it and start again!

 

[amalone1013]

Good news - remember DHs sketchy 401k activity? They got a new CFO at the end of last year, and the old one left at Christmas. The previous CFO was in charge of the 401k plans, so now the new guy has taken over and since the end of January, all 401k contributions have been made into the account on the same day as the payroll end date. Yay! (and even the earlier January ones went in within a few days). And he sent an email out to the employees last week that he is looking into some other plan options/administrators that would have lower fees for the employees. Some other sketchy things have been uncovered since this guy came on board, so it seems like this guy is really trying to do the right thing overall and the last guy was super shady.

 

[QueenIsabella]

We bought a new minivan in August. We got a Toyota Sienna XLE that we plan to drive into the ground. It should easily last until DS13 graduates from college, after which time we might well want a smaller vehicle, anyways.

We went new (versus gently used) because there simply weren't used ones available. My old minivan had the charming habit of dying--just, driving down the road, it would...stop. We needed another vehicle and couldn't wait.

We chose the 1.9% financing. We may or may not pay it off in full at some point in the next couple of years.

It's nicer than I need--it has a sun roof, heated leather seats, all manner of safety features and cool electronic stuff. Clearly, it was a splurge. But, one thing that really "sold" my husband was, a number of Boy Scout parents have Toyota Siennas, so he was able to ask about maintenance, reliability, how they liked it, and so forth, from people who'd had one for 8-10 years. He was happy with the answers.

 

[punkin]

I have never bought a used car. I really like the warranty while I'm driving the kinks out of a new car. Used cars scare me. However, every car I've owned (except the one totaled in an accident), I have kept for at least 15 years. It works for me.

 

[Budzooka]

Getting ready to buy a car, as my daughter just turned 16. I decided to give her my car and I will get a “new” one. I’m definitely not going to buy new, as it loses so much value as soon as you drive it off the lot. I’m looking at almost new with less than 20K miles. CarMax has some good cars and they offer a warranty with the purchase.

I am going to put about $10K down and finance the remainder over 3 years. Plan to drive this vehicle for 10 years and will move the payment to my mortgage once it is paid off.

 

[1st*toright]

@SouthFayetteFan - interesting tax planning discussion. You inspired me to take a look at our tax bracket a couple months ago to see if I could move the tax bracket needle (tax savings are the very best kind of free money). Turns out I can't avoid the 22% bracket entirely (not really complaining about that), and need to be aware of the 35% (gah) if I exercise options. Its a good argument to exercise options in smaller tranches over a longer period of time, rather than holding them until and selling big chunks all at once. We vest over 5 years, so lots of the people I work with hold their options for say, 7 years, and sell one year at a time. And they used to run into issues with AMT all the time. Something to think about (and a nice problem to have!)

Good news - remember DHs sketchy 401k activity? They got a new CFO at the end of last year, and the old one left at Christmas. The previous CFO was in charge of the 401k plans, so now the new guy has taken over and since the end of January, all 401k contributions have been made into the account on the same day as the payroll end date. Yay! (and even the earlier January ones went in within a few days). And he sent an email out to the employees last week that he is looking into some other plan options/administrators that would have lower fees for the employees. Some other sketchy things have been uncovered since this guy came on board, so it seems like this guy is really trying to do the right thing overall and the last guy was super shady.

Yay for the new CFO. So glad someone will be minding the store and doing it right.

Getting ready to buy a car, as my daughter just turned 16. I decided to give her my car and I will get a “new” one. I’m definitely not going to buy new, as it loses so much value as soon as you drive it off the lot. I’m looking at almost new with less than 20K miles. CarMax has some good cars and they offer a warranty with the purchase.

I am going to put about $10K down and finance the remainder over 3 years. Plan to drive this vehicle for 10 years and will move the payment to my mortgage once it is paid off.

We are in the beginning stages of thinking about our next car - also because of a new teen driver in the family (gulp). The kid will definitely get one of the "old" cars (mine is about 6 years old, DH's is maybe 10?) I was thinking that DH's would become the teen's but he says he likes his car and doesn't want to give it up, so it looks like I might be the one looking for a new ride. We bought new last time - it was post-hurricaine Sandy, and the difference between new and used was negligible because used cars were in such short supply. We usually buy used, and go for reliable and inexpensive over comfy and swanky. I expect to have sufficient cash available to pay for the car outright, but will likely do a credit card deposit (as big as I can without fees) for points, then finance the rest through the dealer (in my not very scientific experience, I've been able to negotiate a better price on the car if the dealer is getting a kickback on the financing). Then we will pay off the car pretty much immediately.

 

[LuckyMamaInDE]

Have we had a car buying discussion? I don't think I remember seeing one, but it's a decently long thread.

I was wondering what everyone's thoughts are on how you buy cars. Do you buy new or used? Do you pay cash, charge as much as possible to a credit card for churning, or finance at a low rate because you can earn more on your investments than you would be paying in interest? Thoughts?

Dh is replacing his hardtop convertible with a hybrid crossover, Kia Niro (same mileage as the Prius but space is more flexible for our needs). He put $5k on a Chase UR-earning cc and is taking advantage of 0% financing for 48 months. We have the cash to pay for the car outright but this will give us a little freedom as we are still have a kid in college.

His current car was purchased used four years ago for cash. It replaced his 2004 Corolla (financed at 1.9%, paid off in 2 years) that we gave to ds as a graduation present. Ds still drives the Corolla

I drive a 2002 Grand Caravan which is waaaaaaaaaay too much car for me at this stage of life We financed that at 0% in 2002 and took the full time to pay it off. It will be replaced with a plug-in electric car sometime in the next 2-3 years. We are getting a solar shingled roof next week and will have batteries for storage before I get a new car.

 

[DisneyMandC]

I've only owned two cars- my first car I got at 15 (Lexus SUV) and a Hyundai Sonata I've had since 2015. Both of them were bought used. I drove the Lexus to 265k miles and it was still running when I sold it, but had some stuff going bad that was going to be more expensive to fix than the car was worth. I just hit 117k miles on the Sonata. My current plan is to drive the Sonata into the ground, but that may change as DH may be given a car for his next promotion, in which case we would sell both of our cars (his car has 115k miles on it too) and then buy me a newer car. We bought DH's car brand new. Even with a great finance rate of .9%, we're unlikely to ever buy new again.

We've really liked our Hyundais, but we'll probably go for Toyota or Honda next time. One thing I will do is splurge to get myself a car with a nicer package with a sunroof and heated seats. I told myself I didn't need that when I bought my Hyundai and I was happy to be able to pay for my car in cash. But the truth is, I really do like having those options in my car a lot- especially the sunroof! I've learned it's worth it for me to spend the little bit of extra money to get that whenever I buy next.

 

[Budzooka]

@SouthFayetteFan - interesting tax planning discussion. You inspired me to take a look at our tax bracket a couple months ago to see if I could move the tax bracket needle (tax savings are the very best kind of free money). Turns out I can't avoid the 22% bracket entirely (not really complaining about that), and need to be aware of the 35% (gah) if I exercise options. Its a good argument to exercise options in smaller tranches over a longer period of time, rather than holding them until and selling big chunks all at once. We vest over 5 years, so lots of the people I work with hold their options for say, 7 years, and sell one year at a time. And they used to run into issues with AMT all the time. Something to think about (and a nice problem to have!)



Yay for the new CFO. So glad someone will be minding the store and doing it right.



We are in the beginning stages of thinking about our next car - also because of a new teen driver in the family (gulp). The kid will definitely get one of the "old" cars (mine is about 6 years old, DH's is maybe 10?) I was thinking that DH's would become the teen's but he says he likes his car and doesn't want to give it up, so it looks like I might be the one looking for a new ride. We bought new last time - it was post-hurricaine Sandy, and the difference between new and used was negligible because used cars were in such short supply. We usually buy used, and go for reliable and inexpensive over comfy and swanky. I expect to have sufficient cash available to pay for the car outright, but will likely do a credit card deposit (as big as I can without fees) for points, then finance the rest through the dealer (in my not very scientific experience, I've been able to negotiate a better price on the car if the dealer is getting a kickback on the financing). Then we will pay off the car pretty much immediately.

Help me with your thought process on this, as I have struggled with the balance between good debt and bad debt. I've got the cash on hand to pay outright for a car, but it would severely deplete my savings. Instead, I try to make a decent down payment (on a credit card, of course), and then finance the remainder at a low interest rate to keep my savings intact in the event of an emergency. But, it's not just cars, as I think about extra payments against the mortgage and retirement savings. I don't want a chunk of money hanging around earning 1% interest, but I love the peace of mind of knowing that it is there if absolutely needed. Would love to hear how others deal with savings versus debt.

 

[1st*toright]

I finally got my act together and aggregated all our retirement info in one place - yay. The upshot was that we are in ok shape, and would be in fine shape if our retirement horizon was typical (65-67 retirement age). To get us in a position to be truly work-optional in another 10 years or so, we will need to step up our savings and use non-tax advantaged investment vehicles in addition to what we are doing currently. Given that we have college coming up in just a couple of years, I'm going to stay the course and continue to focus on education savings for the next 2 years, which should free us up to sock more away for retirement once the kid is actually in college (when the cost of college will be more quantifiable - maybe some of those "college" savings can be moved over to retirement vehicles, if my eminently practical kid decides to make community college part of the plan). Now I just need to consolidate our accounts from various jobs into accounts with one institution - will make tracking much easier in the future! I'm thinking Fidelity - used by my current employer and generally seems reasonable. Also need to figure out what we can do for DH now that he doesn't have a 401k at work.

 

[BamaBoy]

Since we are talking retirement accounts, I would like some input. My wife has a 401 (k) from her previous employer that has been sitting there for years and earning a great return. Her new employer did not begin offering 401 (k) until about a year or so ago. Now her employer has sold the business and the new company again does not offer 401 (k). They have told her she has to move the money out this week (really want her to do in the next couple of days). Can/should I roll over to her existing old employer 401 (k), or could/should she roll to a Vanguard Roth IRA account that she has. Looking for the easiest/quickest and lowest tax implication option. Thanks!

 

[1st*toright]

Help me with your thought process on this, as I have struggled with the balance between good debt and bad debt. I've got the cash on hand to pay outright for a car, but it would severely deplete my savings. Instead, I try to make a decent down payment (on a credit card, of course), and then finance the remainder at a low interest rate to keep my savings intact in the event of an emergency. But, it's not just cars, as I think about extra payments against the mortgage and retirement savings. I don't want a chunk of money hanging around earning 1% interest, but I love the peace of mind of knowing that it is there if absolutely needed. Would love to hear how others deal with savings versus debt.

I am a big fan of the robust cash emergency savings account. For me, the peace of mind is so worth giving up some potential earning power. I have a good chunk of cash in a Discover online savings account (earning a decent 2.2% these days). I would absolutely take on a low interest car loan before I would drop my emergency fund below 6 months of earnings. I also prioritize emergency cash over extra payments on my mortgage, for the same reason. Peace of mind is worth a lot to me. Our mortgage is at a reasonably low rate, and because part of it is a rental, we still get some tax benefit for paying interest. I also think that we will hit a period with higher inflation in the future, and having debt at a low interest rate will be beneficial (no science behind that, just my gut).

My sweet DH HATES having a car payment - an emotional reaction, not a financial reason. He generally trusts me to handle our financial decisions, but I respect his antipathy for car debt and will humor him on that one if it doesn't make a significant difference to our overall financial plan. The last time we bought a car (6 or 7 years ago) I was about to have a kid and go part-time at work, so I wasn't willing to tie up that much of our cash in a car either, so we did something very similar to what you are planning to do - a good down-payment, a low interest rate and the ability to pay it off as we felt ok parting with the cash (much quicker than the term of the loan, but it was great to have the flexibility to pay more/less each month).

We've really liked our Hyundais, but we'll probably go for Toyota or Honda next time. One thing I will do is splurge to get myself a car with a nicer package with a sunroof and heated seats. I told myself I didn't need that when I bought my Hyundai and I was happy to be able to pay for my car in cash. But the truth is, I really do like having those options in my car a lot- especially the sunroof! I've learned it's worth it for me to spend the little bit of extra money to get that whenever I buy next.

I was actually thinking about the heated seat thing - I don't have a remote starter in my current car, and I do miss it, but my current car has heated seats and I LOVE them. It would be really hard to give those up. Hard to put a dollar value on a warm tushy on a cold morning...