Hi there, Mrs. 1500 today, getting kind of a late start this morning.
Today, I want to know what YOU want to know. Are there any questions you are grappling with, financial or slightly otherwise, that you would like to pose to the readers?
But first, let’s recap last week with Mr. 1500’s question, How do you keep track of your spending?
Mario from DebtBLAG recommends Mint.com, saying “It’s far more powerful than people give it credit for. It’s got lots of options for customization, entering cash purchases, splitting up purchases (if, for example, you put a whole dinner for four on your card and accept cash), and so forth.” Emily from EvolvingPF, Mrs. PoP from Planting Our Pennies, and Refine. Rinse. Repeat. all give Mint their thumbs up, too.
Allie from Allie’s Everyday Adventures and reader Nicki both recommend the GoodBudget app, which allows you to set up virtual envelopes, fill them with “cash” and as you enter your purchases, it deducts the cash from the appropriate envelope. It is available for both iPhone and Android phones.
Mom over at Three is Plenty recommends You Need a Budget. This app for your phone costs $60, but is “worth it” according to Mom. She describes it as “fundamentally envelope budgeting.” Reader Mary says she cannot rave about YNAB enough and Reader Lou really likes it because you can plan a budget in advance.
Jen from JenSpends uses Mint but doesn’t like that she cannot plan budgets in advance, and that sometimes it has difficulties connecting to certain accounts. She is waiting for YNAB to go on sale. Thanks for that tip, Jen.
There were plenty of you who just use a spreadsheet on your computer, or paper and ink like we do. Mint seems like a really handy tool, if you don’t need to make future budgets, and YNAB seems like a great way to keep to a prepared budget. Thanks for all the responses!
And now to this week’s question. I started this whole Ask the Readers way back when I wasn’t sure if I should hold a garage sale or just donate to charity all the things we didn’t need. After the overwhelming majority of you said to donate it, I did just that.
But I have asked all the questions I have wanted to ask so far, and a few weeks have grasped at straws. So I am turning it over to you. Do you have any financial-related questions to pose to the readers? Anything you are struggling with? Let’s hear them, and I will ask them, starting in two weeks. Next week we will recap our meeting with the brewery/pizza place and ask if you would invest, given all the information.
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I think I have a pretty good idea of how to save now. Even though I’m 25 and won’t be making withdrawals for a while, I’d like to get more information on the best ways to withdraw the money you need. How do you optimize taxes when withdrawing? Is there an optimal time of the year to make withdrawals? Which accounts should you withdraw from first?
This is a great question! Before I open this up to the audience, I want to recommend the Mad FIentist at http://www.madfientist.com. His blog is FI-oriented, but he gives unconventional money management strategies as well. You will probably pick up some great tips from his site. But I will definitely ask this question! Thanks for reading.
Thanks Mrs. 1500! I’ve seen a few of his articles but haven’t looked back at the archive. It’s a treasure trove!
Good question. When you talk early retirement, presumably there’s going to be a big transition at some point. Are there some things you do to prepare for that transition so that you’re not trying to make a bunch of big moves at the last minute?
Thanks for the mention 🙂
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Another great question. Thanks, Mario. I will get this into the lineup as well.
We are starting to look at transitioning our investments out of the stock market and into passive-income vehicles like rental houses. And retirement is at least a year off, probably more. But I know we have started looking at doing things differently than we have been in preparation for the big “R”.
I want to know more specific details of how someone makes withdrawls for cost of living.money from their retirement accounts. Quarterly? Monthly? Also what is the.maximum number of Roths someone can have
Hello Recreator. I will get these questions into the lineup, but will again recommend http://www.madfientist.com for some tips and interesting strategies.
Well some personal questions i am trying to answer:
1) how are others narrowing their choice of how to spend their time? Seems like i have a million opportunities as FI approaches. Spending time understanding myself and my values is proving helpful, but there are still at least a thousand things i am interested in and could see myself doing on a daily basis.
2) which would people take if given the options. Working longer in a part time job, but ability to work from 100% from home while living anywhere in the US you want, or working shorter period of time full time in a busy metro area with no work from home option (assume jobs about about as good).
3) Taxable account investing (trying to invest for long term capital gains vs dividends) vs tax free account, but locked into high cost mutual funds? specifically whether i should pay out of pocket for medical expenses and keep money in my HSA (poor mutual fund selection averaging ~1% fees), or take the money out to continue funding my taxable accounts.
Thanks Lucas! I will get these into the list as well. I really want to know what people would say to your Q2, especially. I know what I would do, but would like to hear the reasoning behind what others would choose.
Some good questions being asked. Thanks for asking. I will look to future posts with great interest. Here’s what I would like to know:
1. What annual pre-tax and post-tax income are people striving for in order to be able to retire?
2. What net worth are they targeting to have in order to produce that income?
3. Do they include their principal residence (and/or other properties) in that net worth calculation (even if valued at the lowest expected value)?
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Ooh, good questions Debt Deb. And I, too would like to know if people include their primary residence in their net worth. The SEC specifically excludes it from your net worth when trying to determine if you are an accredited investor. (I just learned that while doing some research for the brewpub we are thinking of investing in…) Our own figure of $1 Million does NOT include our house. I will pose this question to my very intelligent readers in the coming weeks.
Let me first say I’m a big fan of the blog, so congrats I think it looks great.
I’m curious on your pre tax and post tax savings, what %, matching, etc and how you are planning to handle this as you retire at 43. I’ve read some great stuff at madfientist, that certainly has me wondering how I will apply this in my financial plan.
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Oh good, yet another recommendation for Mad FIentist. He really is awesome and has some great ideas. Well researched, etc. Thanks for backing me up, Even Steven!
I will get these questions on the lineup as well. Thanks for reading!
Being nowhere near retirement myself, I’m curious how much people think they’ll need in order to “live the life they want” when they’re retired. I know Mr. 1500 has his eye on $1mil, but what about other people?
Thanks for asking! That is a great question. We will be older than many early retirement people when we retire, so we may not need as much as those who retire in their 20’s. I’ll make sure I ask for their projected retirement age when I ask the question.
Do you talk about money with your friends?! If so, what about friends who are co-workers?!
My friends are also my co-workers (yes I’m lame). We’re all about finances and love to talk about other FI blogs and investments. One of them knows I’ve started a blog. I try to be financially naked (full disclosure not monty!) on my blog because I think this makes for a better conversation; more open, judgment free, etc. I haven’t told them the address of my blog because they’ll find out about my pay or other confidential bonus programs – is that being hypocritical?
We are confidential because we put financial information out there. I have a few friends who know we have a blog, but not what the address is. They seem to respect that we want to remain anonymous and don’t ask about it. Are your friends asking about the blog name? Try to deflect with a “I would like to keep my identity confidential.”
I use Quicken, hopefully you do not have a vested interest in Mint.com. It’s easy to keep track of spending with Quicken.
Use a Credit card. Log all receipts, reconcile with the statement at the end of the cycle when you get it.
I think too many people just use a debit card, and just trust the bank for the balance.
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If you are planning an early retirement, how are you calculating for or accounting for Social Security? If you end your working career early, I believe there are (negative) impacts to the benefits you receive. I’ve heard some people say they just assume no benefits will be given, but that seems like an easy way out. I’d love to hear how you or others are planning for this important benefit.
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This is something I haven’t thought of (which was the whole point of turning the questions over to the readers so they could ask the readers!)
I am in the “assume it will be belly up when it is my turn to receive benefits” category. Mr. 1500’s parents started taking SS as soon as they possibly could. With so many people so ill-prepared for retirement, I think they are going to be among the majority. I can’t imagine it will still be funded when I am finally able to collect anything, so I haven’t even considered that. Maybe that is best. Assume it won’t be there, and if it is, that is just a little extra cushion.
As always….great work Mr. 1500. I would love to hear about people’s experiences with ObamaCare. Healthcare has been an obstacle to early retirement for many folks. Has ObamaCare helped with this and is it truly a “game-changer”?
OOH! Tackling a political hot-button. OK, I am game. I will ask about this, but I will warn you now, and will warn again when I ask the question: please stick to facts and your personal experience or I will not publish your comments. I will not allow one side to bash the other for things that have nothing to do with the question at hand. But I do want to know other people’s opinion of the Affordable Care Act. Thanks for the suggestion.
I have so many questions, but I will keep the list short for now.
With young children, what health care plan will be ideal, once you are retired without a employer sponsored low cost plan? Without children, what plan is good?
If you plan to live off investment income (dividend and interest income), how will those be taxed at the state level?
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A great question, and one we need an answer to as well. I know Financial Samurai (www.financialsamurai.com) had a post about lower cost insurance through the ACA once you were retired. And from past experience, I know that having a plan that specifically excludes maternity coverage significantly lowers costs. The downside is that if you do get pregnant while having this plan, they pay for absolutely nothing toward the pregnancy.
Thanks for the shoutout!
My question is: How would you invest an extra $100 per month? I know it’s not a lot, but hey, every little bit counts. We have two 401ks. Mine’s just sitting there for now, and my husband contributes to his to get the employer match. Should we start an IRA (or two?), save money that would be accessible before old age, or up the contributions to his 401k? Our emergency fund is already taken care of.
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An interesting dilemma. You mean aside from sending me a check every month? We will ask the readers! Thanks for reading.
I would like to ask a similar question from my favorite business podcast:
Imagine you woke up tomorrow morning at a brand new world, identical to earth, but you know no one. You still have all the experience and knowledge you currently have. Your food and shelter taking care of. What would you do to make money and grow wealth?
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Good question. I assume you have 0 dollars?
I am a 26 old master student from Germany. What do you expect? 😉
I am not rich, but I am not broke. I earned some money from playing poker 2 years ago. After that I started trading forex and start investing some of my winnings. I invest in two startups with with crowdfunding, start a monthly saving plan investing 50€ in a dax 30 (german index) etf, use social trading to diversify a little bit, trading my own forex news strategy and start my own blog about social trading. In future I would like to invest in p2p-lending.
So my passion is everything about investing, trading, entrepreneurship and so on. So I love to hear success stories from people they already reached their dreams.
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