The Intersection of FIRE and Disney

[morgan98]

Thinking about changing my approach to retirement savings in that we are contributing the maximum $19K to 401(k) on both my job and my wife’s job, and we do that equally over 24 pay periods throughout the year. But I am going to change our contribution to the amount of our paycheck early in the year so that we can get that money in and have more time in the market. We have the money in savings, so we will just change it zero once we have contributed the maximum and replenish savings.

I would be willing to write a check immediately to get the funds in there but don’t think that is an option because it needs to come out of wages.

The only downside I can think of is if an extreme situation occurred, such as job loss or some prolonged absence that would result in unpaid time off after all our PTO was depleted. Certainly need to weigh that risk, but not enough to deter me. Anything else I’m missing?

Part of the benefit of splitting the contributions over 24 months is dollar cost averaging. While having more time for the money to grow in the market seems to make sense on the surface, it doesn't necessarily work out that way if the few months that you are funding are at a peak and the market drops, for example. Buying stocks evenly over time hedges your bet, so to speak, against the natural rise and fall in the market.

Just another perspective.

 

[Budzooka]

I saw somebody talk about doing this in another FI place I have been reading. The only thing I can think of is if your employer matches. The poster who did it said their employer matches go in whether they pay or not. (I guess that wouldn’t be called matching then but I guess their employer put in a certain percent whether they contributed or not.). My DH’s only puts in if we put in so that would not work for us.

My employer matches 4% of our annual salary up to a certain limit. Not sure why the timing of the contribution would change the match. They are still going to put in the same amount, but it is a matter of when. If they want to continue the match over 24 pay periods, that's fine. Guess I need to check into that.

 

[SouthFayetteFan]

My employer matches 4% of our annual salary up to a certain limit. Not sure why the timing of the contribution would change the match. They are still going to put in the same amount, but it is a matter of when. If they want to continue the match over 24 pay periods, that's fine. Guess I need to check into that.

At the bank I used to work for - you had to put money in on EACH paycheck to get a match. It was unfortunate but that’s how it worked. If I maxed early I lost match on those later paychecks.

The bank I work for now luckily does a look back and will true it up if you max early.

That’s what you want to understand

 

[Budzooka]

At the bank I used to work for - you had to put money in on EACH paycheck to get a match. It was unfortunate but that’s how it worked. If I maxed early I lost match on those later paychecks.

The bank I work for now luckily does a look back and will true it up if you max early.

That’s what you want to understand

Good feedback. Will definitely check with my employer to make sure I know how the match works.

 

[Budzooka]

Part of the benefit of splitting the contributions over 24 months is dollar cost averaging. While having more time for the money to grow in the market seems to make sense on the surface, it doesn't necessarily work out that way if the few months that you are funding are at a peak and the market drops, for example. Buying stocks evenly over time hedges your bet, so to speak, against the natural rise and fall in the market.

Just another perspective.

Interesting and hadn't really thought about that. Although I'm not concerned about short-term fluctuations in the market, as I am in it for the long-term and believe it will provide a consistent rate of return over the next 20 years.

But taking that line of thinking from employer plans and applying to retirement savings I am putting into a taxable account, I make quarterly contributions that sync up with my quarterly bonuses. Would you recommend making those monthly rather than quarterly to be more even? But where do you draw the line? Monthly? Weekly? Daily? Have to balance the administrative burden with risk.

 

[SouthFayetteFan]

Interesting and hadn't really thought about that. Although I'm not concerned about short-term fluctuations in the market, as I am in it for the long-term and believe it will provide a consistent rate of return over the next 20 years.

But taking that line of thinking from employer plans and applying to retirement savings I am putting into a taxable account, I make quarterly contributions that sync up with my quarterly bonuses. Would you recommend making those monthly rather than quarterly to be more even? But where do you draw the line? Monthly? Weekly? Daily? Have to balance the administrative burden with risk.

Dollar cost averaging is simply a strategy. Front loading is also a strategy. Neither is inherently better than the other IMO and there isn’t a truly right answer there. I’d research both and do what you feel is best.

 

[GlamMistress]

Dollar cost averaging is simply a strategy. Front loading is also a strategy. Neither is inherently better than the other IMO and there isn’t a truly right answer there. I’d research both and do what you feel is best.

Agreed. We dollar cost average because that is what I like to do. DH doesn't have an opinion on this and just lets me manage it. I could fully fund our IRAs on Jan. 1 each year but I don't. I kind of like looking forward to my regular stock "shopping" as I call it. It would probably be easier to just fund everything quick and early and forget it, but then would deprive myself of logging into Fidelity every month and messing with my money and looking at the little charts go up, up, up (well hopefully!)

I probably need a hobby, ha!

 

[Frwinkley]

Question: my husband and I max out his 401k contribution through his employer. I am a school teacher in PA, so I contribute the mandatory amount to my pension, with the school district matching. I am due for a substantial raise this year as negotiated through our union's collective bargaining agreement. I'm looking for other ways to use pre-tax dollars so we don't take such a big tax hit next year. Any suggestions?

Since we are covered through the school district's health care, we are not eligible for an HSA.

 

[pillow]

Part of the benefit of splitting the contributions over 24 months is dollar cost averaging. While having more time for the money to grow in the market seems to make sense on the surface, it doesn't necessarily work out that way if the few months that you are funding are at a peak and the market drops, for example. Buying stocks evenly over time hedges your bet, so to speak, against the natural rise and fall in the market.

Just another perspective.

I tend to agree with this. Plus, the market tends to be up in January/February due to the "santa clause rally". Its generally not the best time to invest. I would be worried about putting a huge chunk of cash in at a market high.

 

[SouthFayetteFan]

Found this Gem in the paid FPs thread today here on the DIS justifying a DVC purchase vs investing in the stock market... I thought this group may appreciate it in some fashion...

And that makes a lot of assumptions, in all reality, the stock market is gambling, something which I don't do, so "investing" in the S&P isn't something I would ever do.

We do know that vacation costs, as all other expenses tend to do, increase year after year and that we are going to take at least one vacation a year, I am now in a position to take two to three a year, so investing in something that will help keep my vacation costs down makes a lot more sense then gambling on the stock market.

 

[amalone1013]

Found this Gem in the paid FPs thread today here on the DIS justifying a DVC purchase vs investing in the stock market... I thought this group may appreciate it in some fashion...

And that makes a lot of assumptions, in all reality, the stock market is gambling, something which I don't do, so "investing" in the S&P isn't something I would ever do.

We do know that vacation costs, as all other expenses tend to do, increase year after year and that we are going to take at least one vacation a year, I am now in a position to take two to three a year, so investing in something that will help keep my vacation costs down makes a lot more sense then gambling on the stock market.

 

[QueenIsabella]

Found this Gem in the paid FPs thread today here on the DIS justifying a DVC purchase vs investing in the stock market... I thought this group may appreciate it in some fashion...

And that makes a lot of assumptions, in all reality, the stock market is gambling, something which I don't do, so "investing" in the S&P isn't something I would ever do.

We do know that vacation costs, as all other expenses tend to do, increase year after year and that we are going to take at least one vacation a year, I am now in a position to take two to three a year, so investing in something that will help keep my vacation costs down makes a lot more sense then gambling on the stock market.

Well, one thing you learn quickly on these boards is that people will do ANYTHING to justify a Disney vacation! And it's funny how you can get dinged for suggesting that someone cut back on their lifestyle to save for retirement, yet there are people who will dumpster dive or sell plasma in order to stay concierge level at the Grand Floridian. I've given up trying to understand the logic...

 

[BridgetBordeaux]

Found this Gem in the paid FPs thread today here on the DIS justifying a DVC purchase vs investing in the stock market... I thought this group may appreciate it in some fashion...

And that makes a lot of assumptions, in all reality, the stock market is gambling, something which I don't do, so "investing" in the S&P isn't something I would ever do.

We do know that vacation costs, as all other expenses tend to do, increase year after year and that we are going to take at least one vacation a year, I am now in a position to take two to three a year, so investing in something that will help keep my vacation costs down makes a lot more sense then gambling on the stock market.

Wow.

 

[pillow]

Found this Gem in the paid FPs thread today here on the DIS justifying a DVC purchase vs investing in the stock market... I thought this group may appreciate it in some fashion...

And that makes a lot of assumptions, in all reality, the stock market is gambling, something which I don't do, so "investing" in the S&P isn't something I would ever do.

We do know that vacation costs, as all other expenses tend to do, increase year after year and that we are going to take at least one vacation a year, I am now in a position to take two to three a year, so investing in something that will help keep my vacation costs down makes a lot more sense then gambling on the stock market.

One thing humans are very good at is justifying. Pretty much anything. This makes me sad to read.

 

[SouthFayetteFan]

One thing humans are very good at is justifying. Pretty much anything. This makes me sad to read.

It really made me sad too. I tried to think how having that viewpoint would affect my life and strategy and without investing, I know my net worth would be 25% lower right now (and that number is low because of our relatively young age and limited time in the market). It would then be safe to assume that it would add decades to my working career and also impact my lifestyle in an eventual (hopefully?) retirement. Or in a worst case scenario, I work until I die.

None of that sounds fun.

 

[pillow]

It really made me sad too. I tried to think how having that viewpoint would affect my life and strategy and without investing, I know my net worth would be 25% lower right now (and that number is low because of our relatively young age and limited time in the market). It would then be safe to assume that it would add decades to my working career and also impact my lifestyle in an eventual (hopefully?) retirement. Or in a worst case scenario, I work until I die.

None of that sounds fun.

Or you burden your kids. Not fun either. The psychology of money is so very interesting to me - why people spend and what they choose to spend on. I think when it comes to Disney, many decisions are emotional and not always rational. I used to love watching the "can I afford it" segment on Suze Orman, all the while knowing that if I called, she would probably tell me NOT to take whatever trip I had in the works.

 

[BridgetBordeaux]

Found this Gem in the paid FPs thread today here on the DIS justifying a DVC purchase vs investing in the stock market... I thought this group may appreciate it in some fashion...

And that makes a lot of assumptions, in all reality, the stock market is gambling, something which I don't do, so "investing" in the S&P isn't something I would ever do.

I'm sorry.............I could not help myself. I first invested in an S&P 500 index fund in the summer of 1996.
I found an online calculator, and punched in: begin date, end date, reinvest all dividends, adjust for inflation.........the results: 295 percent growth---that is not gambling!

Now I don't suggest putting money in a mutual fund for a 6 month goal, but for 10, 15, 20 years from now............yes, that is a reasonable choice.

 

[SouthFayetteFan]

“Must be nice to be a millionaire”...

This phrase came up recently in conversation with a coworker. It was a moment of them expressing an “innocent” level of jealousy over somebody’s circumstances but I thought it might spark interesting discussion here.

I know we are a diverse group BUT in general, the FIRE movement is made up of 25-45 year olds hoping to attain financial independence prior to their 60s. What I find interesting is this concept of a Millionaire being “very rich” hasn’t changed in our heads in the last 30 or so years. (I use “our” as the collective our, not us specifically). When I was young, the concept of $1million was A LOT of money. In truth, for somebody born in the 80s, $1million today is roughly half of what it was when we were young.

Would it be nice to be a millionaire? Yes! Would that represent life changing wealth that would allow me to cease all work and buy anything I want? No way! It’s just interesting to see how the common person still views a “millionaire” as this unreachable, unrealistical goal whereas it’s on my list by age 40. I also recognize that the morning I wake up and see a 7 figure net worth, it won’t change me at all and also isn’t enough to quit working.

 

[SouthFayetteFan]

I'm sorry.............I could not help myself. I first invested in an S&P 500 index fund in the summer of 1996.
I found an online calculator, and punched in: begin date, end date, reinvest all dividends, adjust for inflation.........the results: 295 percent growth---that is not gambling!

Now I don't suggest putting money in a mutual fund for a 6 month goal, but for 10, 15, 20 years from now............yes, that is a reasonable choice.

I’m not planning to have an argument on that thread about this because this soul is obvious VERY lost. BUT I will drop this follow up comment here because it’s too good to miss:
https://www.disboards.com/threads/paid-fp-options-coming-soon-to-wdw.3739005/page-65#post-60418985

Now the stock market is the same as betting in horse racing...WOW

 

[amalone1013]

I’m not planning to have an argument on that thread about this because this soul is obvious VERY lost. BUT I will drop this follow up comment here because it’s too good to miss:
https://www.disboards.com/threads/paid-fp-options-coming-soon-to-wdw.3739005/page-65#post-60418985

Now the stock market is the same as betting in horse racing...WOW

No, you are WRONG.