Mr. I’s Journal

Where are you and where are you going?
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Mister Imperceptible
Posts: 5
Joined: Fri Nov 10, 2017 4:18 pm

Mr. I’s Journal

Post by Mister Imperceptible » Fri Nov 10, 2017 8:42 pm

May 2009: Graduated from undergrad, $150k+ of student debt.

February 2013: Secured a 100% income increase by entering a new line of work. Still $126k in student debt.

May 2015: $66k in student debt. Started saving for a down payment.

August 2016: $66k in student debt. 20% equity in a rental property.

January 2017: Secured a 100% income increase by switching jobs with almost 4 years of relevant experience.

July 2017: Student debt paid in full.

Wondering whether to crush mortgage on rental property in short order or save to invest.

Mister Imperceptible
Posts: 5
Joined: Fri Nov 10, 2017 4:18 pm

Re: Mr. I’s Journal

Post by Mister Imperceptible » Fri Nov 10, 2017 8:58 pm

Why pay off the mortgage:
-Freedom from debt never experienced as an adult
-Ability to leave current line of work, chase dream (involves an income decrease) perhaps sooner

Why save to invest:
-Become FI sooner
-Increase long term net worth

Why ‘save to invest’ rather than just ‘invest’:
We are quite probably in an “Everything Bubble” and if I’m going to stop working (with the emphasis on maximum income) early (and extremely) than it would be nice to have a bunch of cash to buy distressed and cheap assets.

Mister Imperceptible
Posts: 5
Joined: Fri Nov 10, 2017 4:18 pm

Re: Mr. I’s Journal

Post by Mister Imperceptible » Fri Nov 10, 2017 10:01 pm

Quite interested in living outside the US. Europe has the intellectual and cultural history, at a lower cost in some parts. This leads back into portfolio composition- Ive read and heard of US investment accounts being liquidated when people are abroad. Real estate is a way around, but can any expats share how they invest in stocks?

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Viktor K
Posts: 212
Joined: Sat Jul 30, 2016 9:45 pm
Location: China

Re: Mr. I’s Journal

Post by Viktor K » Sat Nov 11, 2017 3:04 am

Hello and welcome!

I haven't had any trouble yet with investing while abroad. I can do most transactions through online banking/fund services.

One time I needed to send in an account close request by mail, so I had a relative in the US do that part.

Mister Imperceptible
Posts: 5
Joined: Fri Nov 10, 2017 4:18 pm

Re: Mr. I’s Journal

Post by Mister Imperceptible » Sat Nov 11, 2017 4:54 pm

@Viktor K,

Thanks, it was on a podcast, don’t remember which one. My Roth IRA is with Fidelity, no stock market investments outside of my Roth currently. Does your account custodian actually know you are abroad though? Or do your relatives maintain enough of a paper trail that you are still in the US as far as they know?
Last edited by Mister Imperceptible on Sat Nov 11, 2017 6:00 pm, edited 1 time in total.

Mister Imperceptible
Posts: 5
Joined: Fri Nov 10, 2017 4:18 pm

Re: Mr. I’s Journal

Post by Mister Imperceptible » Sat Nov 11, 2017 5:27 pm

A bit more background:

Grew up wanting to be in the arts. I’m the first in the family to have graduated college, so the importance of education was impressed throughout my upbringing. What was not said was that education can be a hindrance if too much is paid for it. So after receiving my very impractical and expensive Bachelor of Arts degree, a $1,000 monthly student loan payment had me in scramble mode. Couldn’t move out of my parents house- making the loan payment was hard enough without rent. When I started working in my current field in 2013, my goal was to pay off the student loan ASAP, and begin pursuing my dream in earnest. But realizing that rent would replace my student loans, I began saving in 2015 for a down payment. I grew up, was educated, and work in a high COL area, but was sent down south for a project in 2014. I employed a bit of geo-arbitrage here- using my higher pay in a high COL to buy a real estate in a lower COL area.

I do not enjoy the work I do at all, but I don’t take the money for granted either. As my degree is not relevant to the work I do, I suffer from a bit of Imposter Syndrome. I do take a bit of satisfaction that despite having no relevant education and not entering this line of work until age 26 that my finances are where they are at age 30. Income increases are the most important to long term net worth, and I’ve made 2 big leaps, the last in January 2017. Some senior level people whom I trust have told me that my pay is near a plateau, so I’m on the bottom end of that part of the S-curve where it starts to get vertical. To use round numbers, someone making $40k post-tax with $20k in expenses has a $20k savings rate, but someone with $160k in post-tax income and $20k in expenses has a $140k saving rate. So despite a fourfold increase in pay, savings actually increase 7 times. The problem is that most people increase their spending along with their income. So acknowledging the saving rate disparity between my current job and my ideal one (at least where I would start in my ideal one) I am basically wearing golden handcuffs at this point.

Like many here I’ve become weary of explaining my life strategy to those who are unable or unwilling to understand, so I started this journal hopefully to bounce ideas with like-minded folk. My expenses would likely indicate my lifestyle is more ERE-lite, but my investment outlook is much more in line with ERE than MMM. I think there is a huge systemic risk to all the index funds, and the idea that you can put your investments in auto-pilot. I feel like the the mindless dollar-cost averaging is the next oncoming wave from the sea of Baby Boomer lies. “Just go to college, it doesn’t matter what it costs” soon followed by “just put 15% of your salary into the market for the next 40 years.” Then we can hold the bag when the Boomers cash out. I only put in 6% of my salary into a Roth 401k at my last gig because they offered a 50% match- after leaving that job I rolled the Roth 401k into a Roth IRA and cashed out the match to realize the benefit. When I get emails from Fidelity saying “Are you on schedule for retirement?” I grab my balls and say “SCHEDULE THIS.” The dividend and long term capital gains rate is 0% for under ~$40k, Social Security will eventually be defunct and/or taxes will likely be much higher in 40 years, so I don’t need to be on the Baby Boomer’s schedule.

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Viktor K
Posts: 212
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Location: China

Re: Mr. I’s Journal

Post by Viktor K » Sun Nov 12, 2017 6:58 am

That's a good question. I'm pretty sure everything is still noted as me living in the US. My bank knows where I am, though. Hmm, I'll have to look into this as I've never heard of any sort of liquidating scare

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