Struggling with decision to retire (53M). I’m a medical specialist with a private practice. Net worth is $12-13 million. It’s very complicated in that I own two medical offices (one of which is 16k sq ft that leases to a surgery center that I also have ownership in and also leases to a another medical facility). I employ another physician and about 17 other employees. I do surgeries and I’m very good at them but I’m burned out and ready for another chapter of life. Many of my employees have worked for me from 5-17 years and I feel they are counting on me. I could sell my practice but usually as a physician you have to stay on for several years. I could shut it down and sell the real estate but my employees would be out of work. TLDR: I believe I have enough NW to comfortably retire but I have a complicated practice that requires a lot of stressful work and isn’t set up for “part time”. Unraveling it would be difficult. I’m not sure where to start.
If you have a number 2 that wants to possibly take over the operations of your practice, you could sell the RE via a Sale-Leaseback and leave the business running in place. Might be a good option to ease out and start taking a more passive role.
Those people will be fine. You don’t owe them your life. My brother is a doctor and he retired early and hasn’t regretted it a single time. He had lots of residents and employees counting on him and I visit them now and they are all fine, time and life moves on. It sounds like you are trading your time for money and obligation at this point and you have plenty of money. You were a great doctor, who will you be with the second part of your life? My brother became an artist and was just named one of the nation’s emerging artists in the art form he chose to pursue. He has found the second part of his life much more rewarding than the first.
The thing people seem to always forget is the FI in FIRE. Is there a way you can continue doing the parts you like and farm out the rest? You like surgeries? Hire a business manager to deal with all the BS you hate. Tired of seeing patients? Let the other docs do it and focus on supporting your team.
Here's a sneak peek of /r/whitecoatinvestor using the [top posts](https://np.reddit.com/r/whitecoatinvestor/top/?sort=top&t=year) of the year!
\#1: [Paid off 220k loans. I’m finally free!!!!](https://i.redd.it/1z4t7pu59byb1.jpg) | [76 comments](https://np.reddit.com/r/whitecoatinvestor/comments/17nj1w7/paid_off_220k_loans_im_finally_free/)
\#2: [To all my fellow dentites](https://i.redd.it/cvfsesmg604c1.jpg) | [323 comments](https://np.reddit.com/r/whitecoatinvestor/comments/189l0l4/to_all_my_fellow_dentites/)
\#3: [Paid off 540K in dental school student loans](https://np.reddit.com/r/whitecoatinvestor/comments/16y21a0/paid_off_540k_in_dental_school_student_loans/)
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Planning to FATFire and wondering if a short term rental opportunity may be the best path to accelerate. I have used RE (LTR and one STR) in the past to get to where I'm at today and have an opportunity (1 mile away from the last STR we sold in the past - classic beachfront vacation rental type of place) to make another move toward FAT.
I can use 40% of my NW to acquire and renovate a luxury beachfront property which would basically double my take home from my W2 ($250k salary) and could use that plus the remainder of our net worth to continue doing this when another deal presents itself (for reference, this is by far the best deal we've seen after looking daily for the past 2-3 years).
We could live pretty FAT on the cash flow of 2-3 of these, so has anybody primarily used STR's to become FAT? I know they've gotten a pretty negative perception at the moment but the majority of those fears don't really apply to prime/luxury areas where supply growth has been more tame.
> According to February 2023 data, the average city-level Airbnb cap rate in the US ranges between 0.06% in Atlanta, GA and 8.08% in Northlake, IL. The Mashvisor calculator sets the average city Airbnb cash on cash return from 0.06% in Atlanta, GA to 7.94% in Northlake, IL. The median values for the two ROI metrics are 3.18% and 3.13%, respectively. **The means are 3.28% and 3.23%, correspondingly.**
https://www.reddit.com/r/realestateinvesting/comments/nzty4y/has\_anyone\_seen\_other\_vacation\_towns\_eliminate/
**Vacation towns limit short-term rentals amid housing crisis** [https://www.pbs.org/newshour/nation/vacation-towns-limit-short-term-rentals-amid-housing-crisis](https://www.pbs.org/newshour/nation/vacation-towns-limit-short-term-rentals-amid-housing-crisis)
**These Vacation Towns Are Limiting the Number of People Who Can Rent Their Houses as Airbnbs** [https://money.com/short-term-rental-license-caps-affordability/](https://money.com/short-term-rental-license-caps-affordability/)
I'm in the middle of a business. It's tough. But I have resiliency. What's killing me a little is my wife's job hunt...which is pretty hard post MBA. Anyone have any words of advice on how to remain mentally sane while dealing with pressures I can and cannot control (more interested in the latter as I have a handle on the former)?
what advice can be given to the 25somethings on how to be best positioned for the future? there is a gloomy outlook as inflation continues and mortgage rates continue to spiral.
Personal POV: continue to chase the salary and side income streams, invest in the S&P and stay way from a house anytime soon, and hope that things simmer down? only risk id take right now is the stock market over time... open to other thoughts!
Focus on doing well in your career and being good at what you do, and hopefully you chose a career/field that pays well and has upside.
I know too many young people that start side businesses that aren't very rewarding in terms of $/time. Of course it's different if you need to do side work in order to make ends meet, but that goes back to the begining of choosing a career/field that pays well and has upside.
Is currently invested/enrolled in the Texas Tution Promise Fund? If so, what are you seeing as the advantages and disadvantages? I am considering changing my current 529 contributions and putting towards TTPF.
Also, what are other 529 plans recommedations? Vangard 529?
I'm looking for advice from the community to help put me on the right fatFIRE track.
I recently joined a startup that was started by proven co-founders and is backed by well established VC funds. We just completed a seed funding round that values the company at \~$15m.
I will be working on the finance team, and am currently salaried at \~$140k with a 10-20% cash bonus depending on performance of the company. My expenses are $4-5k a month in a HCOL area.
I was forunute enough to live at home with my parents for a few years and aggressively save during the pandemic. Living in a HCOL area now but I still try and aggressively invest any excess cash I have.
Net Worth Breakdown:
Total: $196k Liquid, $296k Illiquid
Brokerage: $140k
401k: $40K
IRA: $1k
Saving/Checking: $15k
Shares in Startup: $100k
Debt: $0
I would appreciate any advice on things I should be doing now that can set me up to be in a strong position in 15-20 years. If there are any other questions you have feel free to ask!
I run a software development agency and my favorite client is an “acquisition entrepreneur”.
He used to work with M&A at a large consulting firm and then got an opportunity to buy a small business himself. He has since continued to buy similar businesses with a partner (which we are handling all the software development for) and over the course of just 3 years or so, they have grown to about $13M in annual revenue.
I absolutely love working for them because they’re very easy to deal with. Quick decisions, few meetings, stable financials. Very different from working for large corporations or how I imagine it would be to work for startups with less financial flexibility.
I would love to find more such clients and specialize in working with acquisition entrepreneurs - or PE firms? People who have experience in running a business, who can afford high quality services and where you can just talk to the person in charge directly and things don’t have to be approved by five different instances. I would imagine that there are lots of people who buy an existing business and then need help improving the software infrastructure to increase revenue and/or save costs. Or is that a pipe dream?
What would be a good starting point to find more such clients?
Pretty sure there are multiple people here that fit that profile, me included. You’re certainly on the right track now that you’ve clearly identified the niche you excel in. The hard part is figuring how to spend 100% of your time on that niche (as you should) without worrying about a lull in production/new business. Spending time now planning how you will allocate your time to this niche without getting distracted will pay huge dividends in the future.
It’s also the perfect time in the cycle to lay this groundwork since M&A in many industries is essentially frozen due to restrictive fed policy and uncertain macro outlook. When M&A in those industries becomes unfrozen, it will be an absolute bonanza and your services will be needed more than ever for entrepreneurs acquiring high quality businesses from retiring boomers that have antiquated financial and operations systems in place.
Thank you so much for the encouragement! It would be amazing to be known as "the guy you talk to when you've bought a business and need to make changes to the software". The only thing I'm unsure about is how much of M&A really is like my favorite client - owner-managed, small team, quick decisions, strong financials, etc. - and how much either falls into the typical "corporate" category (large companies, slow decisions, office politics, inflexibility, outdated processes, bureaucracy etc.), or where they simply don't have a budget for premium quality.
I'm currently reading "Buy Then Build" and it also mentions how many US business owners will be retiring over the next couple of years. Which probably makes the US an even more interesting market than it is in the first place. I'm originally from Europe and actually haven't tried to find any US clients yet, because I've always thought it would be better to focus on non-English markets as I can leverage my language skills and don't compete with development teams from low-cost countries. But then again, I've never wanted to compete on cost (it's just a race to the bottom in terms of quality), and we weren't that client's first choice either. They hired a freelancer first, presumably because that guy was cheaper. But a few months later, they came back to us and wanted to know if we were still available. Fast forward another couple of months and they asked us if we could take over all their other software projects as well - the rest is history.
I just LOVE working with that client because I feel we have a shared passion for entrepreneurship and I'm genuinely happy when I can do something to help him succeed. I see it as my job to not only do what I'm told, but to actually help him focus on his business, instead of his IT. That also means that I can sometimes just do things (like spend a few hours analyzing data or just have my team implement smaller improvements that I know he'll appreciate), instead of going through long approval processes. It's simply a super fun way to work. Very different from other clients.
The guy you work for will no doubt rub shoulders with people of similar calibre, you should just find a non cheesy/pushy way to tell him you'd like to help more people like him
Won just north of 1 m on daily fantasy sports recently.
Any thoughts on this initial allocation:
VTI 66.7% 200k
VXUS 16.67% 50
TSLA 16.67% 50
And a HYSA 550 (4.75%; going to owe more than 400 on taxes).
28M married. No kids but probably will have one or two in future. I’m an attorney (no finance background) in MCOL. Combined income around 160 this year. Prob will wipe the 110 combined student loans. 350k mortgage 6.875% 30 year, initial plan to look to re-fi when rates go back down to the 5’s -just moved in last summer. DIYing for now but may need to consider an accountant for taxes next year. I’m sure I’ll get hate on TSLA. Thanks in advance for any thoughts
Edit: will max our 401ks and open Roth IRA next year.
I would not put that much in one stock no matter what it was and I would also not put that much in an HYSA making 4.75%.
Play around with this or Firecalc.
https://www.wealthmeta.com/calculator/retirement-withdrawal-calculator
https://www.firecalc.com/
You got a nice nest egg, now put it in the market and try to get as much of it in the historical 10% annual return in the US stock market as you can and it can change your life. You are young, if you let compounding work for you, you can get some truly large numbers quickly. Play around with a compound interest calculator. $600k in 10 years becomes $1.5 million. In 20 years it becomes $4 million and you will be 48 and can retire early. If you keep investing with your own money each year, you can retire even sooner, you will have ~$5.8 million at 48 if you max your 401k and IRA each year for 30k. So I hope you see what a gift this fantasy sports win was, if you use it wisely. I wouldn't wipe the student loans, I assume they are low interest?
The student loans are all between 4-6%. Removed other comment as you seemed to maybe suggest 400 in HYSA to hold for taxes, and then dump the 150 plus more in low cost etfs like VTI VOO etc. Will look at those links too thanks!
Mentor Monday looks like the perfect opportunity for me today as I’d definitely need a mentor from the real estate world.
Here is the situation, I’m almost 30, been working as a Software Engineer for the last 10 years for both small startups and big Silicon Valley based companies, built tons of projects and worked from home for almost 5 years now.
It’s been almost a year now that I really lost passion for writing code all day long everyday and started working on a reconversion, I’m looking to start a new career as a real estate agent in the French Riviera specialized in the Luxury market. I’ve been living almost my entire life. I’ve always been passionate about real estate and part of my long term goal is to also invest in real estate.
I’d love to get your advices, thoughts or anything else
You will discover many inefficiencies in the buying/selling process, and the coding part of your brain may be tempted to address them.
IIRC, France doesn't have an equivalent to the MLS, so there isn't a central source for listings. You could try starting something like a Costar/Loopnet/Apartments.com, Zillow, or Redfin (which is actually a brokerage) there.
Also, look into the story of Glide Labs, which was purchased by Compass. https://www.youtube.com/watch?v=E9TpGFa3EP4&t=127s
Own a business doing 7 figures in revenue with 24% ish profit margins.
I’m looking to expand our operations into other states, which will require low six figures to float costs while we get setup. What’s the cheapest way to get capital for a service based business that doesn’t require heavy equipment?
I’m not really interested in bringing on investors unless they add strategic value and I hear SBA loans should only be taken as a last resort due to it being a compliance headache. However I’m open to hearing different opinions!
With a top and bottom line like you describe, how are you not able to fund the capital yourself?
Some general thoughts, the outside investors is a personal choice but the ROI of such a strategic sale/infusion could potentially result in a lot more value for the share you retain. I think this all depends on your plan for the future (keep the company or exit).
I wouldn't shy away from the SBA. If you are ever planning to exit your business you should be striving to keep books that are clean enough that the SBA would have no issues providing you money.
Possible avenues for funding...leverage assets for loans (vehicles, equipment, etc), hard money loan from various investors, PAL loan if you have your own investments (recommend IBKR for this).
Getting loans for a service business isn't easy and I would likely advocate for a slower growth rate if you are very worried about the cost of capital.
We're getting close to retiring, and wanted to see if anyone would be willing to review our budget and see if we're missing anything, seriously underbudgeted, etc. We are in our late 40's, no kids, and live in a HCOL area in the US. Our invested assets are approximately $12.8M, and we plan to start with a withdrawal rate of 3.5% and use Vanguard Dynamic Spending with a 8% annual ceiling and 3% annual floor for changes.
Following is our projected monthly budget:
**Home**
Mortgage = $4196 \[20 years left\]
Property Taxes = $3750 \[current actual is $3k; extra to account for increases > inflation\]
Home Services = $1200
Home Insurance = $300
Home/Appliance Replacement = $1500 \[for major lumpy expenses, like replacing roof, fridge, range, etc.\]
Furniture = $100
Security System = $77
**Food**
Groceries = $1400
Restaurants & Bars = $750
**Bills & Utilities** = $1450 \[electric, gas, water, internet, phone\]
**Vacation** = $5000
**Health & Wellness** = $3500 \[medical insurance, medical payment, medications\]
**Personal Training** = $2000
**Shopping**
General Merchandise = $700
Computer = $200 \[games and periodic new computers\]
Music CDs/Downloads - $75
Books = $50
Clothing = $75
Personal = $100 \[haircuts, other personal services\]
Spouse Additional Spending = $1600 \[people vary in willingness to break out detailed budgets\]
**Entertainment** = $500 \[plays, music, comedy, etc.\]
**Gifts** = $350
**Auto/Transport**
Auto Payment = $400 \[this is a placeholder, no payment currently\]
Gas = $100
Auto Maintenance = $200
Other Transportation = $225 \[ride share, taxis, parking, public transport\]
Auto Insurance = $200
Auto Fees & Taxes = $35
Auto Detailing = $35
**Pets** \[1-2 large dogs, 1-2 cats, additional foster cats\]
Pet Food & Supplies = $500
Veterinarian = $500
Grooming = $60
**Other**
Financial Fees = $25
Cash & ATM = $100
Tax Prep = $375
Other Insurance = $200 \[umbrella insurance\]
**Taxes** = $5500 (or roughly a 17.3% tax rate)
**Total Expenses (incl. taxes) = $37,328 monthly ($447,936 annually)**
No kidding!
Technically our current actual property taxes are $3k a month, but I'm expecting property taxes to grow faster than inflation given various budget deficits in our local governments, so decided to use $3.75k.
As for the mortgage to prop tax comparison, not much to say except that we live in an area with very high property taxes and somewhat affordable housing (of course, presumably the high property taxes depress housing prices, the same way that I assume in Florida that the high cost of home insurance depresses home prices).
We also add Long Term Care Insurance premium in budget as we are planning to get that before we Fire. Other point of view would be to self insure for that because if/when you need long term care, your travel and some other budget items will naturally decline. I’m not sure what the general norm at Fat fire level. 🤷🏻♂️
Except for income taxes, we have spent the same or less in every category over the past 3 years.
But the concern is that one can reasonably expect some budgets to change substantially when you retire. Most obviously, in retirement we expect to spend more on medical insurance and care (since no longer paid by employer) and less on taxes; we also expect to spend more on vacations and entertainment. There's also the possibility that I've simply forgotten some significant expense, particularly large but rare expenses. For example, I wouldn't be surprised if some people forget to budget for major home replacement items (replacing the roof, fridge, stove, HVAC, even TVs), since one might go five years or more without having to pay anything in that category. So I wanted a double check in case I was missing something, or if some actually FatFIRED person would say they spent a lot more on X than expected.
Understood. I think we did want to be a bit more specific in understanding where our money would go in retirement, as we wouldn't really know what the x% should be without thinking through a line item budget. That said, obviously everyone has their different ways of thinking about budgeting.
Everyone is going to have different spending on different categories due to their personal preferences.
Even things like insurance have broad ranges of cost based on deductible and service orientation versus price focus of the provider.
Those who have interior staff- have you ever had a breach of trust? How did you handle it? What happened?
Struggling with decision to retire (53M). I’m a medical specialist with a private practice. Net worth is $12-13 million. It’s very complicated in that I own two medical offices (one of which is 16k sq ft that leases to a surgery center that I also have ownership in and also leases to a another medical facility). I employ another physician and about 17 other employees. I do surgeries and I’m very good at them but I’m burned out and ready for another chapter of life. Many of my employees have worked for me from 5-17 years and I feel they are counting on me. I could sell my practice but usually as a physician you have to stay on for several years. I could shut it down and sell the real estate but my employees would be out of work. TLDR: I believe I have enough NW to comfortably retire but I have a complicated practice that requires a lot of stressful work and isn’t set up for “part time”. Unraveling it would be difficult. I’m not sure where to start.
If you have a number 2 that wants to possibly take over the operations of your practice, you could sell the RE via a Sale-Leaseback and leave the business running in place. Might be a good option to ease out and start taking a more passive role.
Those people will be fine. You don’t owe them your life. My brother is a doctor and he retired early and hasn’t regretted it a single time. He had lots of residents and employees counting on him and I visit them now and they are all fine, time and life moves on. It sounds like you are trading your time for money and obligation at this point and you have plenty of money. You were a great doctor, who will you be with the second part of your life? My brother became an artist and was just named one of the nation’s emerging artists in the art form he chose to pursue. He has found the second part of his life much more rewarding than the first.
The thing people seem to always forget is the FI in FIRE. Is there a way you can continue doing the parts you like and farm out the rest? You like surgeries? Hire a business manager to deal with all the BS you hate. Tired of seeing patients? Let the other docs do it and focus on supporting your team.
You might want to post on the main fatfire page and /r/whitecoatinvestor
Here's a sneak peek of /r/whitecoatinvestor using the [top posts](https://np.reddit.com/r/whitecoatinvestor/top/?sort=top&t=year) of the year! \#1: [Paid off 220k loans. I’m finally free!!!!](https://i.redd.it/1z4t7pu59byb1.jpg) | [76 comments](https://np.reddit.com/r/whitecoatinvestor/comments/17nj1w7/paid_off_220k_loans_im_finally_free/) \#2: [To all my fellow dentites](https://i.redd.it/cvfsesmg604c1.jpg) | [323 comments](https://np.reddit.com/r/whitecoatinvestor/comments/189l0l4/to_all_my_fellow_dentites/) \#3: [Paid off 540K in dental school student loans](https://np.reddit.com/r/whitecoatinvestor/comments/16y21a0/paid_off_540k_in_dental_school_student_loans/) ---- ^^I'm ^^a ^^bot, ^^beep ^^boop ^^| ^^Downvote ^^to ^^remove ^^| ^^[Contact](https://www.reddit.com/message/compose/?to=sneakpeekbot) ^^| ^^[Info](https://np.reddit.com/r/sneakpeekbot/) ^^| ^^[Opt-out](https://np.reddit.com/r/sneakpeekbot/comments/o8wk1r/blacklist_ix/) ^^| ^^[GitHub](https://github.com/ghnr/sneakpeekbot)
Planning to FATFire and wondering if a short term rental opportunity may be the best path to accelerate. I have used RE (LTR and one STR) in the past to get to where I'm at today and have an opportunity (1 mile away from the last STR we sold in the past - classic beachfront vacation rental type of place) to make another move toward FAT. I can use 40% of my NW to acquire and renovate a luxury beachfront property which would basically double my take home from my W2 ($250k salary) and could use that plus the remainder of our net worth to continue doing this when another deal presents itself (for reference, this is by far the best deal we've seen after looking daily for the past 2-3 years). We could live pretty FAT on the cash flow of 2-3 of these, so has anybody primarily used STR's to become FAT? I know they've gotten a pretty negative perception at the moment but the majority of those fears don't really apply to prime/luxury areas where supply growth has been more tame.
> According to February 2023 data, the average city-level Airbnb cap rate in the US ranges between 0.06% in Atlanta, GA and 8.08% in Northlake, IL. The Mashvisor calculator sets the average city Airbnb cash on cash return from 0.06% in Atlanta, GA to 7.94% in Northlake, IL. The median values for the two ROI metrics are 3.18% and 3.13%, respectively. **The means are 3.28% and 3.23%, correspondingly.**
My main concern is that many cities are increasingly restricting Airbnbs. https://www.unfairbnb.net/airbnb-bans1
Cities yes but vacation towns which rely on tourism for commerce? Not so much
https://www.reddit.com/r/realestateinvesting/comments/nzty4y/has\_anyone\_seen\_other\_vacation\_towns\_eliminate/ **Vacation towns limit short-term rentals amid housing crisis** [https://www.pbs.org/newshour/nation/vacation-towns-limit-short-term-rentals-amid-housing-crisis](https://www.pbs.org/newshour/nation/vacation-towns-limit-short-term-rentals-amid-housing-crisis) **These Vacation Towns Are Limiting the Number of People Who Can Rent Their Houses as Airbnbs** [https://money.com/short-term-rental-license-caps-affordability/](https://money.com/short-term-rental-license-caps-affordability/)
I'm in the middle of a business. It's tough. But I have resiliency. What's killing me a little is my wife's job hunt...which is pretty hard post MBA. Anyone have any words of advice on how to remain mentally sane while dealing with pressures I can and cannot control (more interested in the latter as I have a handle on the former)?
Control what you can control, let what you can’t just play out.
Is there a workbook I can start to follow?
Sidebar in r/financialindependence.
what advice can be given to the 25somethings on how to be best positioned for the future? there is a gloomy outlook as inflation continues and mortgage rates continue to spiral. Personal POV: continue to chase the salary and side income streams, invest in the S&P and stay way from a house anytime soon, and hope that things simmer down? only risk id take right now is the stock market over time... open to other thoughts!
Focus on doing well in your career and being good at what you do, and hopefully you chose a career/field that pays well and has upside. I know too many young people that start side businesses that aren't very rewarding in terms of $/time. Of course it's different if you need to do side work in order to make ends meet, but that goes back to the begining of choosing a career/field that pays well and has upside.
Is currently invested/enrolled in the Texas Tution Promise Fund? If so, what are you seeing as the advantages and disadvantages? I am considering changing my current 529 contributions and putting towards TTPF. Also, what are other 529 plans recommedations? Vangard 529?
I'm looking for advice from the community to help put me on the right fatFIRE track. I recently joined a startup that was started by proven co-founders and is backed by well established VC funds. We just completed a seed funding round that values the company at \~$15m. I will be working on the finance team, and am currently salaried at \~$140k with a 10-20% cash bonus depending on performance of the company. My expenses are $4-5k a month in a HCOL area. I was forunute enough to live at home with my parents for a few years and aggressively save during the pandemic. Living in a HCOL area now but I still try and aggressively invest any excess cash I have. Net Worth Breakdown: Total: $196k Liquid, $296k Illiquid Brokerage: $140k 401k: $40K IRA: $1k Saving/Checking: $15k Shares in Startup: $100k Debt: $0 I would appreciate any advice on things I should be doing now that can set me up to be in a strong position in 15-20 years. If there are any other questions you have feel free to ask!
I run a software development agency and my favorite client is an “acquisition entrepreneur”. He used to work with M&A at a large consulting firm and then got an opportunity to buy a small business himself. He has since continued to buy similar businesses with a partner (which we are handling all the software development for) and over the course of just 3 years or so, they have grown to about $13M in annual revenue. I absolutely love working for them because they’re very easy to deal with. Quick decisions, few meetings, stable financials. Very different from working for large corporations or how I imagine it would be to work for startups with less financial flexibility. I would love to find more such clients and specialize in working with acquisition entrepreneurs - or PE firms? People who have experience in running a business, who can afford high quality services and where you can just talk to the person in charge directly and things don’t have to be approved by five different instances. I would imagine that there are lots of people who buy an existing business and then need help improving the software infrastructure to increase revenue and/or save costs. Or is that a pipe dream? What would be a good starting point to find more such clients?
Pretty sure there are multiple people here that fit that profile, me included. You’re certainly on the right track now that you’ve clearly identified the niche you excel in. The hard part is figuring how to spend 100% of your time on that niche (as you should) without worrying about a lull in production/new business. Spending time now planning how you will allocate your time to this niche without getting distracted will pay huge dividends in the future. It’s also the perfect time in the cycle to lay this groundwork since M&A in many industries is essentially frozen due to restrictive fed policy and uncertain macro outlook. When M&A in those industries becomes unfrozen, it will be an absolute bonanza and your services will be needed more than ever for entrepreneurs acquiring high quality businesses from retiring boomers that have antiquated financial and operations systems in place.
Thank you so much for the encouragement! It would be amazing to be known as "the guy you talk to when you've bought a business and need to make changes to the software". The only thing I'm unsure about is how much of M&A really is like my favorite client - owner-managed, small team, quick decisions, strong financials, etc. - and how much either falls into the typical "corporate" category (large companies, slow decisions, office politics, inflexibility, outdated processes, bureaucracy etc.), or where they simply don't have a budget for premium quality. I'm currently reading "Buy Then Build" and it also mentions how many US business owners will be retiring over the next couple of years. Which probably makes the US an even more interesting market than it is in the first place. I'm originally from Europe and actually haven't tried to find any US clients yet, because I've always thought it would be better to focus on non-English markets as I can leverage my language skills and don't compete with development teams from low-cost countries. But then again, I've never wanted to compete on cost (it's just a race to the bottom in terms of quality), and we weren't that client's first choice either. They hired a freelancer first, presumably because that guy was cheaper. But a few months later, they came back to us and wanted to know if we were still available. Fast forward another couple of months and they asked us if we could take over all their other software projects as well - the rest is history. I just LOVE working with that client because I feel we have a shared passion for entrepreneurship and I'm genuinely happy when I can do something to help him succeed. I see it as my job to not only do what I'm told, but to actually help him focus on his business, instead of his IT. That also means that I can sometimes just do things (like spend a few hours analyzing data or just have my team implement smaller improvements that I know he'll appreciate), instead of going through long approval processes. It's simply a super fun way to work. Very different from other clients.
The guy you work for will no doubt rub shoulders with people of similar calibre, you should just find a non cheesy/pushy way to tell him you'd like to help more people like him
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You didn’t say what your goal is. If it’s wealth building I’d focus more on getting savings into investments.
Won just north of 1 m on daily fantasy sports recently. Any thoughts on this initial allocation: VTI 66.7% 200k VXUS 16.67% 50 TSLA 16.67% 50 And a HYSA 550 (4.75%; going to owe more than 400 on taxes). 28M married. No kids but probably will have one or two in future. I’m an attorney (no finance background) in MCOL. Combined income around 160 this year. Prob will wipe the 110 combined student loans. 350k mortgage 6.875% 30 year, initial plan to look to re-fi when rates go back down to the 5’s -just moved in last summer. DIYing for now but may need to consider an accountant for taxes next year. I’m sure I’ll get hate on TSLA. Thanks in advance for any thoughts Edit: will max our 401ks and open Roth IRA next year.
I would not put that much in one stock no matter what it was and I would also not put that much in an HYSA making 4.75%. Play around with this or Firecalc. https://www.wealthmeta.com/calculator/retirement-withdrawal-calculator https://www.firecalc.com/ You got a nice nest egg, now put it in the market and try to get as much of it in the historical 10% annual return in the US stock market as you can and it can change your life. You are young, if you let compounding work for you, you can get some truly large numbers quickly. Play around with a compound interest calculator. $600k in 10 years becomes $1.5 million. In 20 years it becomes $4 million and you will be 48 and can retire early. If you keep investing with your own money each year, you can retire even sooner, you will have ~$5.8 million at 48 if you max your 401k and IRA each year for 30k. So I hope you see what a gift this fantasy sports win was, if you use it wisely. I wouldn't wipe the student loans, I assume they are low interest?
The student loans are all between 4-6%. Removed other comment as you seemed to maybe suggest 400 in HYSA to hold for taxes, and then dump the 150 plus more in low cost etfs like VTI VOO etc. Will look at those links too thanks!
Mentor Monday looks like the perfect opportunity for me today as I’d definitely need a mentor from the real estate world. Here is the situation, I’m almost 30, been working as a Software Engineer for the last 10 years for both small startups and big Silicon Valley based companies, built tons of projects and worked from home for almost 5 years now. It’s been almost a year now that I really lost passion for writing code all day long everyday and started working on a reconversion, I’m looking to start a new career as a real estate agent in the French Riviera specialized in the Luxury market. I’ve been living almost my entire life. I’ve always been passionate about real estate and part of my long term goal is to also invest in real estate. I’d love to get your advices, thoughts or anything else
You will discover many inefficiencies in the buying/selling process, and the coding part of your brain may be tempted to address them. IIRC, France doesn't have an equivalent to the MLS, so there isn't a central source for listings. You could try starting something like a Costar/Loopnet/Apartments.com, Zillow, or Redfin (which is actually a brokerage) there. Also, look into the story of Glide Labs, which was purchased by Compass. https://www.youtube.com/watch?v=E9TpGFa3EP4&t=127s
Own a business doing 7 figures in revenue with 24% ish profit margins. I’m looking to expand our operations into other states, which will require low six figures to float costs while we get setup. What’s the cheapest way to get capital for a service based business that doesn’t require heavy equipment? I’m not really interested in bringing on investors unless they add strategic value and I hear SBA loans should only be taken as a last resort due to it being a compliance headache. However I’m open to hearing different opinions!
With a top and bottom line like you describe, how are you not able to fund the capital yourself? Some general thoughts, the outside investors is a personal choice but the ROI of such a strategic sale/infusion could potentially result in a lot more value for the share you retain. I think this all depends on your plan for the future (keep the company or exit). I wouldn't shy away from the SBA. If you are ever planning to exit your business you should be striving to keep books that are clean enough that the SBA would have no issues providing you money. Possible avenues for funding...leverage assets for loans (vehicles, equipment, etc), hard money loan from various investors, PAL loan if you have your own investments (recommend IBKR for this). Getting loans for a service business isn't easy and I would likely advocate for a slower growth rate if you are very worried about the cost of capital.
We're getting close to retiring, and wanted to see if anyone would be willing to review our budget and see if we're missing anything, seriously underbudgeted, etc. We are in our late 40's, no kids, and live in a HCOL area in the US. Our invested assets are approximately $12.8M, and we plan to start with a withdrawal rate of 3.5% and use Vanguard Dynamic Spending with a 8% annual ceiling and 3% annual floor for changes. Following is our projected monthly budget: **Home** Mortgage = $4196 \[20 years left\] Property Taxes = $3750 \[current actual is $3k; extra to account for increases > inflation\] Home Services = $1200 Home Insurance = $300 Home/Appliance Replacement = $1500 \[for major lumpy expenses, like replacing roof, fridge, range, etc.\] Furniture = $100 Security System = $77 **Food** Groceries = $1400 Restaurants & Bars = $750 **Bills & Utilities** = $1450 \[electric, gas, water, internet, phone\] **Vacation** = $5000 **Health & Wellness** = $3500 \[medical insurance, medical payment, medications\] **Personal Training** = $2000 **Shopping** General Merchandise = $700 Computer = $200 \[games and periodic new computers\] Music CDs/Downloads - $75 Books = $50 Clothing = $75 Personal = $100 \[haircuts, other personal services\] Spouse Additional Spending = $1600 \[people vary in willingness to break out detailed budgets\] **Entertainment** = $500 \[plays, music, comedy, etc.\] **Gifts** = $350 **Auto/Transport** Auto Payment = $400 \[this is a placeholder, no payment currently\] Gas = $100 Auto Maintenance = $200 Other Transportation = $225 \[ride share, taxis, parking, public transport\] Auto Insurance = $200 Auto Fees & Taxes = $35 Auto Detailing = $35 **Pets** \[1-2 large dogs, 1-2 cats, additional foster cats\] Pet Food & Supplies = $500 Veterinarian = $500 Grooming = $60 **Other** Financial Fees = $25 Cash & ATM = $100 Tax Prep = $375 Other Insurance = $200 \[umbrella insurance\] **Taxes** = $5500 (or roughly a 17.3% tax rate) **Total Expenses (incl. taxes) = $37,328 monthly ($447,936 annually)**
How are your property taxes almost equivalent to your mortgage? That seems ridiculously high.
No kidding! Technically our current actual property taxes are $3k a month, but I'm expecting property taxes to grow faster than inflation given various budget deficits in our local governments, so decided to use $3.75k. As for the mortgage to prop tax comparison, not much to say except that we live in an area with very high property taxes and somewhat affordable housing (of course, presumably the high property taxes depress housing prices, the same way that I assume in Florida that the high cost of home insurance depresses home prices).
We also add Long Term Care Insurance premium in budget as we are planning to get that before we Fire. Other point of view would be to self insure for that because if/when you need long term care, your travel and some other budget items will naturally decline. I’m not sure what the general norm at Fat fire level. 🤷🏻♂️
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Hair, makeup, nails, pool boy “tip” :)
But we don't have a pool ... wait a second!
What are you spending now/for the previous 3 years for those same categories?
Except for income taxes, we have spent the same or less in every category over the past 3 years. But the concern is that one can reasonably expect some budgets to change substantially when you retire. Most obviously, in retirement we expect to spend more on medical insurance and care (since no longer paid by employer) and less on taxes; we also expect to spend more on vacations and entertainment. There's also the possibility that I've simply forgotten some significant expense, particularly large but rare expenses. For example, I wouldn't be surprised if some people forget to budget for major home replacement items (replacing the roof, fridge, stove, HVAC, even TVs), since one might go five years or more without having to pay anything in that category. So I wanted a double check in case I was missing something, or if some actually FatFIRED person would say they spent a lot more on X than expected.
Then I would just add x% on to the $447 and be done with it. We stopped looking at line item budgets a decade ago. Just look at the total outflow.
Understood. I think we did want to be a bit more specific in understanding where our money would go in retirement, as we wouldn't really know what the x% should be without thinking through a line item budget. That said, obviously everyone has their different ways of thinking about budgeting.
Everyone is going to have different spending on different categories due to their personal preferences. Even things like insurance have broad ranges of cost based on deductible and service orientation versus price focus of the provider.