The Intersection of FIRE and Disney

[coast2coastmickey]

Hi everyone... new to this thread but I saw @SouthFayetteFan had started this one so I had to pop over and see what you're all chatting about. I didn't get through the last half of the pages but I did skim the first half.

I technically HAVE a financial planner but I am looking either for a new one (need tips on how to do that without hurting her feelings. She's a nice lady but quite frankly I am not convinced she is particularly savvy; plus she ONLY communicates by phone and that just doesn't work for me as I work nights and business hours aren't my thing) and/or how to move my current (very small) investments to 100% online. Anyone got any tips on either or both of those items?

Also, does anyone have a Coverdell for their kids? If you do, any thoughts on those vs a 529?

And, I do NOT contribute to my employer's tax deferred "thing" (457b) . I have avoided it all this time because I don't know enough about investing to even know if it's a "good" program or not. My question is, if it does NOT have an employer match, do you think I should look into it anyway? I do contribute a small amount to a Roth every month outside of work. A very small amount. Conversely, if I find out it DOES have an employer match, should I do it regardless of how "good" a program it is? What say you, wise DIS-ers?

Unless the financial planner is a family friend, realize it is a business transaction. Just be clear that you are terminating the business relationship and call it a day. Getting into the weeds or bringing emotion into it isn't going to help anything.

Regarding the Coverdell v 529 debate, here's a good website: https://www.chrishogan360.com/esa-529-comparison/

Regarding the 457, if it's tax deferred, chances are that the tax savings from your contributions will far outweigh whatever fees the investment options are within it. An employer match would be gravy on top of that. If you have a match that you're not taking advantage of, you're leaving free money on the table and that's bad. The only times you should not contribute to a tax deferred account are if the investment fees are sky high and include front/back end loads (aka initial/withdrawal fees) or if you are so hard up for cash that contributing to the fund would cause you to go into debt or lose a house. So in simple words, you should probably contribute as much as you can to it.

 

[amalone1013]

Came home yesterday to a package in the mailbox and thought hmm, that's not the right size for the one thing I'm expecting. What could this be? From Barnes and Noble?

My grandpa texted me last week that he was sending me a book that his financial advisor recommended to him for me and DH/our stage in life

 

[coast2coastmickey]

Came home yesterday to a package in the mailbox and thought hmm, that's not the right size for the one thing I'm expecting. What could this be? From Barnes and Noble?

My grandpa texted me last week that he was sending me a book that his financial advisor recommended to him for me and DH/our stage in life

What book is it?

 

[amalone1013]

What book is it?

Suze Orman's Women and Money

 

[amalone1013]

Remember when I was excited about DHs company changing their 401k plan to a new company and it had way lower fees? Good news: It's done, the blackout period is finally over. I've been waiting and waiting so we can go in and increase his contributions. Bad news: They defaulted everyone back down to 4% So it definitely won't be where we want for his checks this week - base pay and if he gets a commission check this month.

 

[speedyfishy]

Lots of recession talk today. I’m really anxious about it. I’m not changing our investment strategy or anything I’m mostly worried about job loss. SO is a software engineer and he is really in demand currently but I worry. I was reading the comments on a NY times article weeks ago and someone was basically saying that things won’t be as bad as 2008 because of the gig economy. I don’t really agree with that because who is going to be ordering food delivery, grocery delivery and Uber’s if they don’t have a job. Also, I don’t think Uber and some of these apps would survive a recession. Uber is already losing a ton of money. They will be gone if autonomous tech doesn’t take off soon and once Uber has cars that can drive themselves there will be no gig economy.

 

[bernina]

Lots of recession talk today. I’m really anxious about it. I’m not changing our investment strategy or anything I’m mostly worried about job loss. SO is a software engineer and he is really in demand currently but I worry. I was reading the comments on a NY times article weeks ago and someone was basically saying that things won’t be as bad as 2008 because of the gig economy. I don’t really agree with that because who is going to be ordering food delivery, grocery delivery and Uber’s if they don’t have a job. Also, I don’t think Uber and some of these apps would survive a recession. Uber is already losing a ton of money. They will be gone if autonomous tech doesn’t take off soon and once Uber has cars that can drive themselves there will be no gig economy.

Along these lines, if we’re at least 10 years away from early retirement should we just stay the course through a recession? I’m not the type to hedge my bets and speculatively invest or reinvest (or yank money out when it’s low of course), we’re definitely passive when it comes to our retirement funds. We diversified the portfolio for our 401ks and Roth IRAs, have some mad money (not our emergency funds) in VTSAX, and max out and invest our HSA. Our emergency funds are in insured checking and savings accounts.

 

[crisi]

One way to look at a recession is that stocks go on sale. You need to be able to afford to buy them on sale, which can be problematic if you lose your job, but if you remain employed, a recession is a good time to cut your discretionary spending and up your investment. But at very least, don't yank out money - over ten years it will (most likely) bounce to where it was, timing the market on a fall is like catching a falling knife.

 

[speedyfishy]

One way to look at a recession is that stocks go on sale. You need to be able to afford to buy them on sale, which can be problematic if you lose your job, but if you remain employed, a recession is a good time to cut your discretionary spending and up your investment. But at very least, don't yank out money - over ten years it will (most likely) bounce to where it was, timing the market on a fall is like catching a falling knife.

Yeah, Im confident that the market will go up. The key is just trying to stay employed and keep investing.

 

[amalone1013]

Good news, I infiltrated DHs new 401k account and it's still set at the same rate we had originally. Either DH read his email wrong or the HR guy wrote an incorrect email. This is 50/50 because the HR guy is terrible at his job.

 

[RamblingMad]

Lots of recession talk today. I’m really anxious about it. I’m not changing our investment strategy or anything I’m mostly worried about job loss. SO is a software engineer and he is really in demand currently but I worry. I was reading the comments on a NY times article weeks ago and someone was basically saying that things won’t be as bad as 2008 because of the gig economy. I don’t really agree with that because who is going to be ordering food delivery, grocery delivery and Uber’s if they don’t have a job. Also, I don’t think Uber and some of these apps would survive a recession. Uber is already losing a ton of money. They will be gone if autonomous tech doesn’t take off soon and once Uber has cars that can drive themselves there will be no gig economy.

I changed my investment strategy spring last year after reading a book about the bull market that ended in 2000. I’m now 50% in short term Treasuries that I buy direct, which means that as they mature I buy more. They’re commission free. And my 401k is 100% in the fund that’s equivalent to being in cash.

If the market drops like it has in the past, I expect the bottom to be around a 50% drop from its highs. I’m in my 40s, so I don’t want to ride that out. At 22x trail earnings, I reasonably don’t expect my equities to grow more that nominal GDP annualized over the next ten years, which should be in the 4-5% range.

As for the US we are more globally dependent than in the past. With Europe likely to go into a recession, our companies that operate internationally will feel some short term pain.

I’m not ready to panic yet since I feel good about my portfolio allocation.

 

[SouthFayetteFan]

We haven't had a good discussion in here for awhile - we should fix that...

Discussion starters: The "Millionaire" - What are your thoughts on being a Millionaire or Millionaires in general? Is that a sign that you are rich? Has it lost its luster due to inflation? Is that a goal you aspire to now (or ever aspired to)? Do you think other (less financially educated) people think being a Millionaire is a much more impressive feat than it really is?

• First let's go with the definition of a "Millionaire" as somebody who has a $1MM net worth (regardless of if it's in cash, stocks, real estate, etc. Let's try to not argue over what a millionaire is and just accept that as our definition, lol.
• The book "The Millionaire Next Door" by Thomas J Stanley came out in 1996. At the time, being a Millionaire was likely a fairly impressive feat. Translated into today's dollars that would now represent $1.6MM to give you an idea of how inflation has impacted that number. If you haven't read this book, it largely speaks about how often the people who "look" like millionaires are in fact not saving money and have very little wealth while people who may not look like they have wealth are actually millionaires as they are more savings oriented and financially savvy. I thought that info might add some interest to the discussion.

Maybe we can have some fun discussion on this topic to help pass the day (or week) at work.

 

[RamblingMad]

I like the idea of financial freedom, which I define as not needing to depend on a job to make ends meet. This is different for everyone.

I’m in a weird spot that I love camping, but I’m also a senior exec. When I say camping, I mean tent camping or backpacking, not clamping. Thus, my spending is significantly different than my peer who pays county club dues. It’s always awkward to say that I’m going to take days off to go camping and spend around $30/night to do it. And since I already own all the gear I need, I’m only buying food.

I consider myself rich because my cash out versus income is really low. I would totally do vanlife, but that’s not realistic given my job.

What makes me most happy is being on a trail in the mountains. Material goods don’t compare for me.

 

[Budzooka]

We haven't had a good discussion in here for awhile - we should fix that...

Discussion starters: The "Millionaire" - What are your thoughts on being a Millionaire or Millionaires in general? Is that a sign that you are rich? Has it lost its luster due to inflation? Is that a goal you aspire to now (or ever aspired to)? Do you think other (less financially educated) people think being a Millionaire is a much more impressive feat than it really is?

• First let's go with the definition of a "Millionaire" as somebody who has a $1MM net worth (regardless of if it's in cash, stocks, real estate, etc. Let's try to not argue over what a millionaire is and just accept that as our definition, lol.
• The book "The Millionaire Next Door" by Thomas J Stanley came out in 1996. At the time, being a Millionaire was likely a fairly impressive feat. Translated into today's dollars that would now represent $1.6MM to give you an idea of how inflation has impacted that number. If you haven't read this book, it largely speaks about how often the people who "look" like millionaires are in fact not saving money and have very little wealth while people who may not look like they have wealth are actually millionaires as they are more savings oriented and financially savvy. I thought that info might add some interest to the discussion.

Maybe we can have some fun discussion on this topic to help pass the day (or week) at work.

Great topic. I think being a millionaire has lost some luster. I do aspire to becoming a millionaire, but look at that only as a benchmark and not an end goal. I do think others are still in awe over that figure, but it's all about perspective. My younger self would be in awe of some of the expenses that I incur today. Not that I am a frivolous spender, but my disposable income has increased and I can afford to do some things that I could only one day hope for back then.

I haven't read the book you mentioned, but agree with the premise. I long ago gave up trying to keep up with the Jones' and instead deliberately spend money on things that make us happy. It's ok that we have a smaller house or older cars, as I would much rather redirect those funds to more travel or retirement. Many people struggle mightily with this concept and feel the need to keep appearances.

 

[SouthFayetteFan]

I remember being about 10 years old and being slightly obsessed with "becoming a millionaire". That dream eventually turned into a goal and that goal has remained in my sights throughout my life and now at this stage the goal is starting to become an inevitability. For some reason, that number still means something to me (probably more-so in a romanticized fashion as I logically know that the difference between $950k and $1MM is realistically not that far apart).

Obviously some factors have also changed over the past 20-30 years. With less pensions around, people intrinsically are finding themselves saving more. And of course inflation has whittled away at the buying power of $1MM. That said, you still hear phrases such as "it would be nice to be a millionaire" which perhaps indicates that people don't quite grasp how much money that is (or what it may consist of, especially when factoring in ill-liquid assets like home equity). I don't think being a millionaire changes your life like it might have (especially in the 70s or 80s). If I was a millionaire today, I'd still need to go to work tomorrow.

I think in my mind (ignoring the inflation calculator), $2MM is the new $1MM in my mind. $2MM is actually my FIRE target too with current projections showing us reaching that my at age 48. I also don't particularly like the word "rich" but I can't exactly put a finger on why, lol! Perhaps as I read what you all say, I'll figure it out more, haha!

I like the idea of financial freedom, which I define as not needing to depend on a job to make ends meet. This is different for everyone.

I’m in a weird spot that I love camping, but I’m also a senior exec. When I say camping, I mean tent camping or backpacking, not clamping. Thus, my spending is significantly different than my peer who pays county club dues. It’s always awkward to say that I’m going to take days off to go camping and spend around $30/night to do it. And since I already own all the gear I need, I’m only buying food.

I consider myself rich because my cash out versus income is really low. I would totally do vanlife, but that’s not realistic given my job.

What makes me most happy is being on a trail in the mountains. Material goods don’t compare for me.

I can identify with your comment on material goods. I'm not a camper so I can't relate to that, but for me, a big transition was when I

Great topic. I think being a millionaire has lost some luster. I do aspire to becoming a millionaire, but look at that only as a benchmark and not an end goal. I do think others are still in awe over that figure, but it's all about perspective. My younger self would be in awe of some of the expenses that I incur today. Not that I am a frivolous spender, but my disposable income has increased and I can afford to do some things that I could only one day hope for back then.

I haven't read the book you mentioned, but agree with the premise. I long ago gave up trying to keep up with the Jones' and instead deliberately spend money on things that make us happy. It's ok that we have a smaller house or older cars, as I would much rather redirect those funds to more travel or retirement. Many people struggle mightily with this concept and feel the need to keep appearances.

The keeping up with the Jones' has just gotten insane. The area where it is most frustrating to me is with our children. This idea that our kids need to be in all of these activities that apparently now cost THOUSANDS a year is nuts. The days of just playing in the local soccer league are apparently over. The focus on college scholarships is out of control. It's a constant struggle to balance spending reasonably vs. denying my daughters experiences they want. How do you tell a girl her soccer or basketball career are over at 10 because the other parents have ruined it. It has challenged us to continue to be creative in finding activities that are reasonable for her age. I imagine this is only going to get more challenging in the coming years.

 

[RamblingMad]

[QUOTE="SouthFayetteFan”]
The keeping up with the Jones' has just gotten insane. The area where it is most frustrating to me is with our children. This idea that our kids need to be in all of these activities that apparently now cost THOUSANDS a year is nuts. The days of just playing in the local soccer league are apparently over. The focus on college scholarships is out of control. It's a constant struggle to balance spending reasonably vs. denying my daughters experiences they want. How do you tell a girl her soccer or basketball career are over at 10 because the other parents have ruined it. It has challenged us to continue to be creative in finding activities that are reasonable for her age. I imagine this is only going to get more challenging in the coming years.
[/QUOTE]

I live in a neighborhood, where I make about 4x the median. I drive a boring Subaru, and I do my own lawn work. And I’m really not interested in what my neighbors are spending their money on.

The reality is that the lottery effect is an economic problem. For example, there are studies that show if someone wins a minor lottery shortfall of about $20k, that their spending due to the shortfall will increase the bankruptcy rates of those around them significantly.

Stop trying to keep up and spend time instead figuring out what truly makes you happy. Like I said earlier, for me it’s simply hiking in the mountains, so vacation time is super important to me and something I always negotiate. I need at least a month.

 

[tink1970]

The keeping up with the Jones' has just gotten insane. The area where it is most frustrating to me is with our children. This idea that our kids need to be in all of these activities that apparently now cost THOUSANDS a year is nuts. The days of just playing in the local soccer league are apparently over. The focus on college scholarships is out of control. It's a constant struggle to balance spending reasonably vs. denying my daughters experiences they want

Truth! It's amazing to me how much people will spend in private coaching, camps, travel sports all in the hopes of a college scholarship. Um, why not invest in a 529 and/or prepaid tuition plan and let your children enjoy less rigorous participation? Having just dropped DD off at college, I understand how very competitive acceptance is now at universities so being a good athlete is definitely an advantage some places, but the amount of money thrown at youth sports is ridiculous to me.

Also, I definitely think 1MM of 1996 is more like $2-3MM of 2019.

 

[1st*toright]

I also think that $2M sounds like a good "comfortable" number. Hard to get my DH to understand that ($1M still sounds like a lot to him), but that's why I'm in charge of the $$$ in our house .

I'm also a little concerned about a potential recession - I do think its coming. I am not super concerned about staying employed - I'd be hard to replace at my current job, and my field is going to stay busy even if the economy tanks, so even if something crazy happened to my current company (we were bought out or something - pretty unlikely but possible) I should be able to find something equivalent. But, my major savings boosters are stock options and my annual bonus. A down market would have a big impact on both of those things, and that puts additional pressure on me to reduce our regular spend, which would require making some tough choices - we have already eliminated "stupid" spending, and the "wants" we indulge at this point are things that really add to our lives and we would legitimately miss them (travel, gym memberships etc).

Funny that you mention kids activities, @SouthFayetteFan. I do spend a lot of money on kids activities, and we would miss them if we cut them out. Where I live (like many places), everything is ultra-competitive - not just sports. Its true in music, dance, even chess! I mean, the activities themselves aren't necessarily competitive, its just that everyone is training for whatever their "thing" is like its a job - so if you haven't been acting in children's theater since you were 6, its hard to break in to the high school acting scene. If you don't play soccer year round (and do travel teams etc), you won't get to be on the high school team - I mean, not even make the team as a benchwarmer. I think it makes it a lot easier to get through high school (and college, to some extent) if you have a "thing" that helps you create your own vision of your identity, so I do think its important for my kids to get to try different stuff. There is a significant cost associated with that, even if we are just aiming for regular old life enriching activity and not scholarships or college application filler. It seems like there isn't really any middle ground - you either put in the time/money to excel or you don't get to participate at all.

For example, many years ago my daughter was taking a gymnastics class one day a week. After a couple of weeks, the teacher said she really should be in their competitive program. She loved doing it, so I said okay, and next thing I know, my kindergartner was spending 6 hours a week in the gym. In first grade, it was going to be 10 hours a week, and she wasn't enjoying it anymore, so we decided to pull her from the competitive program. The problem was that back in the "recreational" class, they just messed around and worked on cartwheels - there was no opportunity for my daughter to continue to learn new skills. You were either in the hard-core program, or really not learning anything.

It is really hard to strike a balance. Our older kid eventually found her niche, but we are still in the "exploration" phase with our little one.

 

[SouthFayetteFan]

Truth! It's amazing to me how much people will spend in private coaching, camps, travel sports all in the hopes of a college scholarship. Um, why not invest in a 529 and/or prepaid tuition plan and let your children enjoy less rigorous participation? Having just dropped DD off at college, I understand how very competitive acceptance is now at universities so being a good athlete is definitely an advantage some places, but the amount of money thrown at youth sports is ridiculous to me.

Also, I definitely think 1MM of 1996 is more like $2-3MM of 2019.

I also think that $2M sounds like a good "comfortable" number. Hard to get my DH to understand that ($1M still sounds like a lot to him), but that's why I'm in charge of the $$$ in our house .

I'm also a little concerned about a potential recession - I do think its coming. I am not super concerned about staying employed - I'd be hard to replace at my current job, and my field is going to stay busy even if the economy tanks, so even if something crazy happened to my current company (we were bought out or something - pretty unlikely but possible) I should be able to find something equivalent. But, my major savings boosters are stock options and my annual bonus. A down market would have a big impact on both of those things, and that puts additional pressure on me to reduce our regular spend, which would require making some tough choices - we have already eliminated "stupid" spending, and the "wants" we indulge at this point are things that really add to our lives and we would legitimately miss them (travel, gym memberships etc).

Funny that you mention kids activities, @SouthFayetteFan. I do spend a lot of money on kids activities, and we would miss them if we cut them out. Where I live (like many places), everything is ultra-competitive - not just sports. Its true in music, dance, even chess! I mean, the activities themselves aren't necessarily competitive, its just that everyone is training for whatever their "thing" is like its a job - so if you haven't been acting in children's theater since you were 6, its hard to break in to the high school acting scene. If you don't play soccer year round (and do travel teams etc), you won't get to be on the high school team - I mean, not even make the team as a benchwarmer. I think it makes it a lot easier to get through high school (and college, to some extent) if you have a "thing" that helps you create your own vision of your identity, so I do think its important for my kids to get to try different stuff. There is a significant cost associated with that, even if we are just aiming for regular old life enriching activity and not scholarships or college application filler. It seems like there isn't really any middle ground - you either put in the time/money to excel or you don't get to participate at all.

For example, many years ago my daughter was taking a gymnastics class one day a week. After a couple of weeks, the teacher said she really should be in their competitive program. She loved doing it, so I said okay, and next thing I know, my kindergartner was spending 6 hours a week in the gym. In first grade, it was going to be 10 hours a week, and she wasn't enjoying it anymore, so we decided to pull her from the competitive program. The problem was that back in the "recreational" class, they just messed around and worked on cartwheels - there was no opportunity for my daughter to continue to learn new skills. You were either in the hard-core program, or really not learning anything.

It is really hard to strike a balance. Our older kid has found her niche, but we are still in the "exploration" phase with our little one.

Yeah - the activities are certainly a struggle. I don't want to deny my children an opportunity to experience something they want to try at the expense of my FIRE strategy. But there also have to be limits - and the challenge is that it seems some of the other parents have no limits. The difficult part for me is when they instantly assume it's because I don't have them money and then try to figure out how to help. It puts me in a very tough position, this isn't about can I spend $1,000 for some 6 week winter season - this is about should I spend $1,000. (I use that as an example but it seems that it is a constant barrage of financial commitments). I think most of the other parents believe we are poor because it's easier to act like it's too much money than to try to convince them of the logic that little Suzi isn't going to make the pros and they should save their money for something else.

 

[SouthFayetteFan]

To sort of bring my little "activities" tangent full circle...

I bet the other parents would say "It would be nice to be a millionaire so I could give my kids every opportunity under the sun"...and in my head I'd turn around it and say "I am a millionaire because I did NOT give my kids every opportunity under the sun".

That's a statement I'm willing to live with - as long as I've provided enough opportunities for my kids to participate and find some activities that they enjoy.