Thread: Semi Financial Freedom

I am asking this forum because other forums have been fed poison and wokeism. So I can't get a straight answer from ride or die risk taker types. Only advice from weak childmen.

Even ERE forum is full of mental posturing over this or that car or bicycle being better. I want to avoid all of that.

I am going to ask about becoming semi financially free, defined for my life as:

30% of my expenses covered by income coming in that I didn't have to directly trade hourly wages for.

I am aware that investing, aka money growing more money in the market, makes sense, however I have some hesitancy here because I don't understand the following specific about the market, that 30 percent or so of the market is actually 401k's that are going to get drawn down soon/over a shorter span.

People are retiring, and in my lifetime I saw the dot.com boom, and 2008. Those are rapid swings of money.

I don't want to be in the American market for very long, because it swings like this.

I have a number picked for extreme retirement: 9000 per year, or 225000 at a 4% withdrawal.

I feel like I have a 5 year window to make 225000 before it busts again, and grows.


I am leaving it open there. Feel free to ask for more details.

Currently to make that money I am training in welding and when my skill meets a minimum requirement I am buying a miller 325 and going to mobile weld for myself.

(Too many close calls working with females, been in and out of mini doghouse with HR)

The general plan is to have employable high pay rate skills (Welding, Megasquirt turbo installs) used intermittently and a low constant reserve of cash in case the car blows up and i have to live on a bicycle/put welder and stuff in storage during car replacement. I plan on being nomadic my whole life, easier to weather trauma when personal needs are very low.

Hope things work out for you.

I considered trying welding once. The only one I talked to seemed to be doing well but didn't think I should quit my day job. He made it sound like a boom or bust industry. Still think I would liked it but we'll never know.

Your numbers are too low. WAY too low.

And you're not factoring in inflation.

You must invest in the market to save for the future. This is especially true in a high-inflation environment.

Your timidity about liquidated 401k investments drawing stocks down (and reducing your portfolio's average value) is unfounded, in my opinion. It ignores not only newer/younger investors putting their 401k dollars into the same stocks while older investors are drawing their money out, it also ignores the fact that down-swung stock values are buying opportunities. Thus, buy/sell stabilization.

You should contact a reputable financial advisor and go from there. Whatever you do, avoid crypto and precious metals.

I did not think about the buy-sell stabilization.

No news articles here because I don't know what would be reputable. It's a logic head game. If all the people divest 401k...

You say my numbers are low, way too low. I would like an explanation of what you mean by that. The way it reads has some sensationalism attached.

Also, what is Crypto and precious metals? Uranium?

By "numbers too low," I meant this: "I have a number picked for extreme retirement: 9000 per year, or 225000 at a 4% withdrawal."

Crypto: https://duckduckgo.com/?q=crypto&ia=cryptocurrency

Precious metals: https://duckduckgo.com/?q=precious+m...vesting&ia=web

Originally Posted by kru-kut

By "numbers too low," I meant this: "I have a number picked for extreme retirement: 9000 per year, or 225000 at a 4% withdrawal."

Crypto: https://duckduckgo.com/?q=crypto&ia=cryptocurrency

Precious metals: https://duckduckgo.com/?q=precious+m...vesting&ia=web

I still don't understand, bear with me. I already know the number I picked. Why answer with no new info? Can you break down the numbers for me? Expense by expense?


Also, I get confused with internet searches, there is a lot of garbage, hyperbole, opinion. So that turns me around too. Do you have any investments that have panned out for you that you would like to break down into hard numbers like a case study? That would be very enlightening for both us as well as other people who stumble onto the forum.

Ideally each thread would render such nuggets as these, for the further enlightening of people who come here for the real meat and potatoes.

For instance:

X number is too low because of Y expense.

Or

A exp (expense
B

C

D


car

house

health

etc

Originally Posted by frog

Hope things work out for you.

I considered trying welding once. The only one I talked to seemed to be doing well but didn't think I should quit my day job. He made it sound like a boom or bust industry. Still think I would liked it but we'll never know.

When did you consider it? Was it the 90's?

Originally Posted by HK 95

I still don't understand, bear with me. I already know the number I picked. Why answer with no new info? Can you break down the numbers for me? Expense by expense?


Also, I get confused with internet searches, there is a lot of garbage, hyperbole, opinion. So that turns me around too. Do you have any investments that have panned out for you that you would like to break down into hard numbers like a case study? That would be very enlightening for both us as well as other people who stumble onto the forum.

Ideally each thread would render such nuggets as these, for the further enlightening of people who come here for the real meat and potatoes.

For instance:

X number is too low because of Y expense.

Or

A exp (expense
B

C

D


car

house

health

etc

No offense intended, but I'd have to sacrifice billable hours in my (non-financial) field of expertise to dig into your particular situation, according to your personal preferences. No two people are alike. There's a lot of back and forth Q&A needed to come up with an accurate profile, and from that an investment strategy. That what a financial advisor will do for you. The larger investment firms can assign you an F.A. and he (or she) will do a lot more thorough job than I ever could over the Internet. That's what those people are paid to do, so they have to be good at it. Financial analysis and investment portfolios are not my specialty. All I know is what worked for me, but more likely than not, it'd be "180 out" re. your particular situation.

Originally Posted by HK 95

When did you consider it? Was it the 90's?

As a matter of fact, it was early 90's.

Once you get working you want to save your money and the best thing you can do is buy your own place. Doesn't have to be a house but you want that stability and get rid of rent. Rent goes on and on forever! I really started seeing my savings stack up after I paid my house off. It's the best feeling and I have been debt free for years now.

Originally Posted by Kryptic

Once you get working you want to save your money and the best thing you can do is buy your own place. Doesn't have to be a house but you want that stability and get rid of rent. Rent goes on and on forever! I really started seeing my savings stack up after I paid my house off. It's the best feeling and I have been debt free for years now.

+1 on the rent comment, especially with rents going up at the rate they are now. It's insane.

Originally Posted by Kryptic

Once you get working you want to save your money and the best thing you can do is buy your own place. Doesn't have to be a house but you want that stability and get rid of rent. Rent goes on and on forever! I really started seeing my savings stack up after I paid my house off. It's the best feeling and I have been debt free for years now.

I'm a little late to the discussion, but hopefully not too late. First a disclaimer, I'm not an investment advisor, just someone who got into financial planning.

The first major investment anyone should make is to invest in a roof over their own heads.

The CPI (Consumer Price Index) has been going up, and if one strips away the energy (gasoline) component, the biggest driver of the increase is 'Rent of Shelter'. This is rentals going up, and it is going up fast.

The reasons for this? Rental vacancy rates have been decreasing since 2012 (from 10% then to 6% now). While its true that an increasing proportion (now close to 10%) of young adults are living with their parents, the supply has been very muted, and has not been able to keep pace with demand, leading to lower vacancy rates. Also the gig economy means less ownership - those people are not able to qualify for housing loans because they cannot prove reliable sources of income, which means if they want to move out from their parents homes, they will have rent. All driving rental demand, and thus rental prices up. Supply has been slow to increase, and the new supply of housing that comes onstream will come with higher price tags (because all the input materials, wood, steel, manpower, etc. has shot up).

That makes Point #1: Invest in a roof over your head.

Point #2: Invest your money. Like Kru-kut said, assets are the only thing that hold their value in an inflationary environment.

Where to invest? Assume you've done #1, then look at ETFs or Stocks. If you don't have the time or inclination to do research on companies, then put your money in ETFs. Most money managers find it hard to outperform the Index over the long term. If you can do your own research, then look for companies with strong pricing power (can pass on inflationary cost increases) and which have a long growth runway and earnings trajectory. Bonus points if the companies are highly cash generative. Bonus points if the companies have scalability (ie. costs do not increase much when revenue increases a lot).

That brings up Point #3: Pay yourself first. Come up with a regular savings and investment plan (How To Build an Investment Plan That Works for You (thebalance.com)) and follow that plan. There are many investing forums and tools online that can help you. Only after you've paid yourself first, then can you spend the rest of your money on whatever you like.

Johnsmith79,

This is what I was looking for, the fundamentals of what to do. Keeping it real basic.

An American Principal Residence is the Most Advantaged Investment on Earth: Maximize Yours by John T Reed

Don’t make the mistake I made of assuming real real state investors buy larger rental properties like apartment buildings and office buildings. After 54 years in the business, I figured out that “There’s no place like home” for your real estate investment money. Houses get about two dozen special good deals not available to other investments. Income tax deductions and exclusions, financing terms, personal loan liability, HECMs, life estates, property tax discounts, very small political risk, bankruptcy homestead exemptions in some states, not counted for Medicaid eligibility and many college loans, you can live in it, and more . . . https://johntreed.com/collections/re...maximize-yours

Originally Posted by HK 95

Johnsmith79,

This is what I was looking for, the fundamentals of what to do. Keeping it real basic.

Originally Posted by CPRA

An American Principal Residence is the Most Advantaged Investment on Earth: Maximize Yours by John T Reed


Don’t make the mistake I made of assuming real real state investors buy larger rental properties like apartment buildings and office buildings. After 54 years in the business, I figured out that “There’s no place like home” for your real estate investment money. Houses get about two dozen special good deals not available to other investments. Income tax deductions and exclusions, financing terms, personal loan liability, HECMs, life estates, property tax discounts, very small political risk, bankruptcy homestead exemptions in some states, not counted for Medicaid eligibility and many college loans, you can live in it, and more . . . https://johntreed.com/collections/re...maximize-yours

That was a great webpage. Very information dense. I am filing it away for reference. Thank You.

I work in "financial engineering" so I'd like to think I have quite a good understanding of investing, financial theory, and capital markets. I get paid a lot of money for my work so I must be doing something right.

The best advice I can give anyone is to find a low-fee discount brokerage and use it to buy low-cost ETFs.

You won't get rich overnight, but you will gradually build up financial stability. Don't mess with crypto, individual stocks, options, metals, FOREX, swaps, futures, etc.

Low-cost, reliable ETF that covers the best portions of the market as a whole. Set aside an auto deposit from each paycheque.

This is called couch potato investing. Look it up.

Disclaimer: my post is not to be taken as investment advice, does not provide any guarantees, is not an endorsement of anything, and offers no assurances. This is simply my opinion and one should do their own due diligence and research.

Originally Posted by nameless

.. The best advice I can give anyone is to find a low-fee discount brokerage and use it to buy low-cost ETFs.

You won't get rich overnight, but you will gradually build up financial stability. Don't mess with crypto, individual stocks, options, metals, FOREX, swaps, futures, etc.

Low-cost, reliable ETF that covers the best portions of the market as a whole. Set aside an auto deposit from each paycheque.

This is called couch potato investing. Look it up.

Disclaimer: my post is not to be taken as investment advice, does not provide any guarantees, is not an endorsement of anything, and offers no assurances. This is simply my opinion and one should do their own due diligence and research.

Facebook crashed 26%, wiping out $250 billion. That's a huge loss if one invests directly, but if one puts their money in the S&P500 ETF, then the weight is ~2%, for NASDAQ-100 ETF, the weight is ~5%, so a drop that big won't be as significant as say someone who parked all their money into Facebook.

Couch potato investing does work. But like nameless said, you're not going to get rich overnight doing it. One can have a small amount set aside for the risky individual bets and strictly use that set-aside amount to trade the market.

(From Bloomberg: Facebook co-founder Mark Zuckerberg sought to rally his employees on Thursday in the face of a calamitous drop in the share price of Meta, parent of his controversial social media platform. The historic $250 billion crash, he told them, was tied to Meta’s weak forecast for revenue in the current quarter and an “unprecedented level of competition.” Things could soon get worse for Zuckerberg: Employee shares vest on Feb. 15, and manager conversations about bonuses and promotions happen in March—both of which could be factors in workers’ heading for the exits. The bad news comes at a critical juncture for the company, which is fighting regulatory battles on multiple fronts, has been a prominent medium for hate speech and a critical component of foreign misinformation efforts aimed at tilting the last two U.S. presidential elections. If this is the beginning of Facebook’s fadeout, what does Zuckerberg do now? —David E. Rovella )

When did you consider it?