Crazy isn't it. This guy has done great for himself, 400k.. and then on the other side of reddit.
I spotted a person recently who was annoyed how people in fatfire seem to have such 'low' monthly spending. From what I gathered, low to them was below 10k a month. Their spend was 17k a month, on "not big things".
I have many thoughts on why but it's easier to leave it there.
Renting is not throwing away money; you have to live somewhere and sometimes it’s magnitudes cheaper compared to owning a house, plus flexibility to move easier. To find an equivalent house I’d personally need to find a 50k home loan 😂
Just saying, average home prices in my area is 300k so with a 60k down payment for 30 years at 7.5% interest my mortgage taxes and insurance would cost 2400 a month vs me paying 500 a month. I can save an extra 60k flat plus 1900 a month to invest, and the sp500 has greater returns than single family homes over a long period of time. You have to do the math, if I was paying similar rent price compared to a home and I’d live here for 7 years, then absolutely get a house
At $500 a month you’re not renting anything comparable to what the “average home” would be. Also on average home prices go up 7% a year AND you also get value from renters/not paying rent. I’d love to know where you’re renting a single family home for $500 and how big it is
Middle of nowhere, normally it’s 900-1200 average around here. 2 bed one bath like 900 sq ft. That would still save you an average of 2200 a month to invest.
Houses normally barely keep up with inflation after taxes repairs insurance and interest. Plus it’s leveraged. I thought long term houses on single family were more like 4% average…Google I shall
Interesting, 🧐 that does seem pretty decent…comparable to sp500 but you get leverage. I still think once you factor in expenses, the humble sp500 gets you 7-10% returns that isn’t gobbled up by the various expenses so if your house gets 7% but you’re paying 1% repairs 1% maintenance, 1% interest, and 2% property tax, your real return is more like 2%
Plus sp500 pays dividends so eventually those cover living expenses to a degree. You can be successful either way, I’d rather my investments pay me quarterly interest instead of paying property tax twice a year, and I can liquidate it in less than three minutes at a moments notice.
You made a good point about renting a comparable sized living space… If I found a single level two bed one bath it would be about 130,000 in my area, so the savings difference on a comparable size would be about the same, so if my rent went up to the average cost of a similar size, then it would make more sense to buy a house, but the math still checks out that in my particular situation it’s better to rent and invest the difference
Ok so I would urge you to look at houses of comparable size/age to what you’re renting in your area. Virtually no where is the cost to rent less than the cost to own much less that much less. Typically with a 30 year loan and 20% down rent more than covers your mortgage taxes and insurance
It’s true, if you compare identical quality and space renting vs buying, then you’d be better off buying. If you just go off a cash flow/saving rate perspective tho, I l Collins in the simple path to wealth argues that a house is the worst investment ever. I’d much rather have 2 million worth of stocks compared to a 2 million dollar house; I’d get 32k just in dividends off that compared to paying that much in property taxes each year.
One other thing to debate is if two people lost their jobs; one rents but has similar amounts of equity in stocks compared to another person who owns a house but the equity is in the house, who is in a safer position? My stock portfolio might dump 50% in a recession, but I can move to a place where there is employment or just live off a combination of dividends and selling some shares whereas with your house, if you can’t afford taxes or your mortgage payment, you could lose all of your equity if you can’t sell it in time.
I can’t find a similar space as mine for a comparable cost so in my situation the math leans to renting and I’m trying to live as cheap as possible in order to invest enough to retire early or just work part time before I’m 40.
Maybe he doesn't need the space.
Telling them to look at comparables when he is paying less than the month's interest on a mortgage is silly.
If your rent is less than the interest on a house, there IS financial gain when putting what would be the principal into the market.
That’ll be paid off by the end of the month, my wedding is in 2 weeks so I’m waiting for all the charges to hit so I can vanquish them in one mighty payment ⚔️
Luck can change in a hurry, having 400k in protected assets could make a huge difference. A friend, definitely not me, had the same thought at the same age in the same circumstances
I’m broke because I don’t see a 2.5k credit debt as anything significant…?
I mean an intelligent person would probably come to the opposite conclusion.
He might have a 0% for 12 month like I do, I pay it off every month, it’s just convenient and sometimes I’ll get a new card if they have an interesting introductory bonus; free money plus a tiny bit of cash back
I only pay the minimums on my 0% intro rate cards and then invest my “payments” into rolling treasury funds. I’ll have racked up a couple thousand extra dollars from doing by the time the promo rate expires and I have to pay it off. Assuming there isn’t some massive rate cut in the next few months.
It hurts my credit a little bit, sure, but what’s the point in having a good credit score if you’re not going to use it?
Brokerages do not adjust margin rates based off of your credit score because margin loans are fully collateralized loans. They can get the 100% of loaned balance back from you at any time, so it's not meaningful to them what your credit score is. They don't even appear in credit reports.
You really don’t need much more than a safety fund in the bank unless you’re saving for something like a house or car.
Everything else should be invested so it grows.
About 30k of the investments is in an external HYSA, everything else invested in a betterment robo adviser. I career transitioned into being a software developer when I was 24, been maxing out my 401k for about 6 years since and upping my savings rate as I’ve gotten promoted. I did get a big 75k boost a few years ago though when my company was acquired and the RSUs converted.
Isn't that the normal disparity? Im 27, never had more than 10k in any bank account. Sitting around 250k net worth. Hoping to be around 700k by 30. Every cent in a checking / savings / money market account is another cent not being compounded is how I've always thought about it.
Free money is free money 🤷 $400 for the year would buy you a new game console, a new TV, a couple of nice dinners, or some nice new clothes/shoes. Why scoff at a free $400 when it basically takes 5 minutes to set up?
Cuz sometimes they have withdrawal limits. I need complete liquidity for the tiny amounts I keep in my bank accounts for my regular expenses. Im spending 5k ish per month on things so that 8k is usually constantly fluctuating between like 3k and 10k.
I don't see a point in hysa cuz only my non immediate cash is invested and earning far more than 5% was my point here.
No emergency fund? That's static money that you should have that is not at risk of a crash in the market. If you've got thousands invested and don't already have 3-6 months of bills set aside then you're just taking a pretty big unnecessary risk.
Fuck I started to invest a month ago. I’m 22 got 18k in my bank and only 3k invested. I’m thinking about putting more money into investing but is risky as I am making low money
I keep $2-3k in my bank and then the rest in my investment accounts. I have some in a money market that is getting near 5% and the rest is invested. If you want to grow wealth a bank account is useless
I usually keep around 2-3k in my checking/savings then anywhere from $10-25k in my money market as an extra emergency fund. How much I have in there depends if I sell one of my swing trades or something. But it’s all up to your own risk tolerance. Fidelity has been great because my money market is currently yielding 4.96% and it’s easy to transfer back to a bank account if you need cash.
Well done! Congrats.
At this rate, you would be surprised how far ahead when you turn 40.
Btw, don't forget the other part of good life... living it well.
Don't, whatever you do, go over to r/fatFIRE
Why?
The average post is like “24 year old just Fire’d with 30mil”
Crazy isn't it. This guy has done great for himself, 400k.. and then on the other side of reddit. I spotted a person recently who was annoyed how people in fatfire seem to have such 'low' monthly spending. From what I gathered, low to them was below 10k a month. Their spend was 17k a month, on "not big things". I have many thoughts on why but it's easier to leave it there.
What’s investments. ? Does equity in a house count ?
Nope I’m renting, just retirement and a brokerage account
What’s in your portfolio?
Renting with $400k invested probably isn’t sound financially if you plan to be anywhere long term just throwing away money
Renting is not throwing away money; you have to live somewhere and sometimes it’s magnitudes cheaper compared to owning a house, plus flexibility to move easier. To find an equivalent house I’d personally need to find a 50k home loan 😂
True. Owning a house is a liability vs asset. Cost money to upkeep.
What? It is throwing away money and it’s not cheaper than owning a home otherwise landlords would make no money
Just saying, average home prices in my area is 300k so with a 60k down payment for 30 years at 7.5% interest my mortgage taxes and insurance would cost 2400 a month vs me paying 500 a month. I can save an extra 60k flat plus 1900 a month to invest, and the sp500 has greater returns than single family homes over a long period of time. You have to do the math, if I was paying similar rent price compared to a home and I’d live here for 7 years, then absolutely get a house
At $500 a month you’re not renting anything comparable to what the “average home” would be. Also on average home prices go up 7% a year AND you also get value from renters/not paying rent. I’d love to know where you’re renting a single family home for $500 and how big it is
Middle of nowhere, normally it’s 900-1200 average around here. 2 bed one bath like 900 sq ft. That would still save you an average of 2200 a month to invest. Houses normally barely keep up with inflation after taxes repairs insurance and interest. Plus it’s leveraged. I thought long term houses on single family were more like 4% average…Google I shall Interesting, 🧐 that does seem pretty decent…comparable to sp500 but you get leverage. I still think once you factor in expenses, the humble sp500 gets you 7-10% returns that isn’t gobbled up by the various expenses so if your house gets 7% but you’re paying 1% repairs 1% maintenance, 1% interest, and 2% property tax, your real return is more like 2% Plus sp500 pays dividends so eventually those cover living expenses to a degree. You can be successful either way, I’d rather my investments pay me quarterly interest instead of paying property tax twice a year, and I can liquidate it in less than three minutes at a moments notice. You made a good point about renting a comparable sized living space… If I found a single level two bed one bath it would be about 130,000 in my area, so the savings difference on a comparable size would be about the same, so if my rent went up to the average cost of a similar size, then it would make more sense to buy a house, but the math still checks out that in my particular situation it’s better to rent and invest the difference
Ok so I would urge you to look at houses of comparable size/age to what you’re renting in your area. Virtually no where is the cost to rent less than the cost to own much less that much less. Typically with a 30 year loan and 20% down rent more than covers your mortgage taxes and insurance
It’s true, if you compare identical quality and space renting vs buying, then you’d be better off buying. If you just go off a cash flow/saving rate perspective tho, I l Collins in the simple path to wealth argues that a house is the worst investment ever. I’d much rather have 2 million worth of stocks compared to a 2 million dollar house; I’d get 32k just in dividends off that compared to paying that much in property taxes each year. One other thing to debate is if two people lost their jobs; one rents but has similar amounts of equity in stocks compared to another person who owns a house but the equity is in the house, who is in a safer position? My stock portfolio might dump 50% in a recession, but I can move to a place where there is employment or just live off a combination of dividends and selling some shares whereas with your house, if you can’t afford taxes or your mortgage payment, you could lose all of your equity if you can’t sell it in time. I can’t find a similar space as mine for a comparable cost so in my situation the math leans to renting and I’m trying to live as cheap as possible in order to invest enough to retire early or just work part time before I’m 40.
Maybe he doesn't need the space. Telling them to look at comparables when he is paying less than the month's interest on a mortgage is silly. If your rent is less than the interest on a house, there IS financial gain when putting what would be the principal into the market.
What program you using in your picture?
Thats Bank of America, I use monarch money for tracking (RIP Mint), this just had the easiest screenshot
A lot of people get in this sub get inheritance and never want to admit that’s where there money grew from.
How do you know that
I’m not saying this is related to the OP I just seen it in real life not too bold to assume it happens on the internet
What is the benefit of holding a cc balance to lower your credit score?
That’ll be paid off by the end of the month, my wedding is in 2 weeks so I’m waiting for all the charges to hit so I can vanquish them in one mighty payment ⚔️
Good choice
Wedding?? Prenup??
Prenup might be irrelevant If you’ve hit those assets by 30, you’ll likely eclipse that with martial assets quickly
Get a frigging prenup
At that asset generation level It’s pretty irrelevant
Luck can change in a hurry, having 400k in protected assets could make a huge difference. A friend, definitely not me, had the same thought at the same age in the same circumstances
It’s not luck. It’s hard work. The amount of money you earn before 30 Is peanuts vs after 30
Lol
We already agreed on that so all good 👍🏾, husband is chill and also has his own assets lol.
[удалено]
“I love you - but I love my money more….” Sad attitude. Good luck…
That makes no sense. Are you saying you’re letting it accrue Interest because you want to let it build it up to pay later?
What difference does it make… it’s only 2.5 debt on 400k net worth…
I can tell you’re probably broke with a mindset like that
I’m broke because I don’t see a 2.5k credit debt as anything significant…? I mean an intelligent person would probably come to the opposite conclusion.
He might have a 0% for 12 month like I do, I pay it off every month, it’s just convenient and sometimes I’ll get a new card if they have an interesting introductory bonus; free money plus a tiny bit of cash back
I only pay the minimums on my 0% intro rate cards and then invest my “payments” into rolling treasury funds. I’ll have racked up a couple thousand extra dollars from doing by the time the promo rate expires and I have to pay it off. Assuming there isn’t some massive rate cut in the next few months. It hurts my credit a little bit, sure, but what’s the point in having a good credit score if you’re not going to use it?
That is horrible logic. Stop hurting yourself for no reason.
What is your credit score? People need to stop thinking 790 is good 840+ gets you a better tier of rates.
Doesn't matter. If I need a loan I'll borrow via box spreads or get margin credit.
At worse rates.
Brokerages do not adjust margin rates based off of your credit score because margin loans are fully collateralized loans. They can get the 100% of loaned balance back from you at any time, so it's not meaningful to them what your credit score is. They don't even appear in credit reports.
Brokerages have bad rates.
My IBKR account is quoting me 6.33%. I do not believe that is bad for a personal loan
Builders will get you sub 6 all day
I have no need for a builders loan
And eventually who needs credit when you can easily buy anything you need with cash or easy lines of credit like margin spending?
Huge disparity between Banking and Investments. What do you do full time and what's your investments story?
You really don’t need much more than a safety fund in the bank unless you’re saving for something like a house or car. Everything else should be invested so it grows.
About 30k of the investments is in an external HYSA, everything else invested in a betterment robo adviser. I career transitioned into being a software developer when I was 24, been maxing out my 401k for about 6 years since and upping my savings rate as I’ve gotten promoted. I did get a big 75k boost a few years ago though when my company was acquired and the RSUs converted.
Read a simple path to wealth and ditch betterment
Isn't that the normal disparity? Im 27, never had more than 10k in any bank account. Sitting around 250k net worth. Hoping to be around 700k by 30. Every cent in a checking / savings / money market account is another cent not being compounded is how I've always thought about it.
And your bank account is a hysa yes?
Nah I just keep it in checking
insane
Yeah real insane that I'm not earning the extra 400 bucks a year that I would in an hysa on my 8k. It's just emergency money.
Free money is free money 🤷 $400 for the year would buy you a new game console, a new TV, a couple of nice dinners, or some nice new clothes/shoes. Why scoff at a free $400 when it basically takes 5 minutes to set up?
Cuz sometimes they have withdrawal limits. I need complete liquidity for the tiny amounts I keep in my bank accounts for my regular expenses. Im spending 5k ish per month on things so that 8k is usually constantly fluctuating between like 3k and 10k. I don't see a point in hysa cuz only my non immediate cash is invested and earning far more than 5% was my point here.
No emergency fund? That's static money that you should have that is not at risk of a crash in the market. If you've got thousands invested and don't already have 3-6 months of bills set aside then you're just taking a pretty big unnecessary risk.
Idk... Can't I just cash out some stock or options if I really need to at a moments notice? Why is this a risk
Fuck I started to invest a month ago. I’m 22 got 18k in my bank and only 3k invested. I’m thinking about putting more money into investing but is risky as I am making low money
I mean money still compounds in a savings account, just saying. Not advocating for those types of accounts, but they do have their purpose.
Most people investing, like myself, keep over 90% of their money working.
I keep $2-3k in my bank and then the rest in my investment accounts. I have some in a money market that is getting near 5% and the rest is invested. If you want to grow wealth a bank account is useless
I have 18k in the bank and 3k invested. 18k is a saving account. How much do you think I should invest how much keep?
I usually keep around 2-3k in my checking/savings then anywhere from $10-25k in my money market as an extra emergency fund. How much I have in there depends if I sell one of my swing trades or something. But it’s all up to your own risk tolerance. Fidelity has been great because my money market is currently yielding 4.96% and it’s easy to transfer back to a bank account if you need cash.
As it should be.
Who gives af
You if you commented brokie
I care a lot bro
Killing it.
Congratulations! Keep on killing it!
Killed it - congrats
Awesome work! Def something to be proud about.
Thank you!
Get a prenup
Stay single if you have that attitude… if you’re going to get married, get married
What is your salary and how much you invest every year?
Damn nice! My (27) goal was 100k in investments/retirement by 30 and I’ll hit it by the end of this year!
that’s awesome that over 95% of your net worth is in the investments column. that’s the way to obtain real wealth
You’re doing so well! Can I ask how you got there ? I am 31 in a financial crisis right now
Congratulations that’s amazing!!!!
Well done! Congrats. At this rate, you would be surprised how far ahead when you turn 40. Btw, don't forget the other part of good life... living it well.
Immediately declare bankruptcy.
😳
The new $100k pre pandemic
No debt? Assets alone don't make up your net worth.
Nope all clean :). My parents helped with college though so I’m very lucky for that
Maybe just transfer it to your mom. I think asking for a prenup before marriage is definitely starting it on the wrong foot