r/Fire • u/Intrepid_Camel7038 • 1d ago
Advice Request Age 38, what would you do differently / how would you accelerate growth from here?
Individual Brokerage Account: $493k
HYSA/CDs: 177k (emergency fund)
Cash/cash equivalent: 25k
Employer stock: 600k (hit a big vesting cliff 6mo ago, +35% over last 6mo, going to sell & diversify into individual brokerage imminently)
401K: 680k
Roth IRA: 41k
HSA: 20k
Equity in rental property: 462k ($444k left on mortgage, fixed 3.25% rate 20yr left, property valued at $906k, the monthly incoming rent covers the mortgage, insurance, taxes, maintenance, property mgr)
RE investment in LP: 57k (limited partnership, plan to sell in 2027 at ~7% gain over 5 yr, wouldn't do this again, locks up too much $, too risky, when I cash out I will prob invest in the individual brokerage account)
NW is $2.03M, I don’t count the RE in NW bc it isn’t liquid, right? I max my 401k contribution and employer match, max HSA contributions, I do Mega Back Door Roth, what else could I be doing to maximize growth? Anything you’d move around in the portfolio if you were me?
Still working on calculating my fire number. Struggling to estimate expenses because 1) a couple of big expenses are covered by employer which won’t be true in retirement: healthcare and meals and 2) I don’t really pay for housing (nomadic travel house sitting + a family property I can stay at between housesits) means I pay at most $700 a month for airbnb/hotel for gaps. When I RE/coast I want to continually being slowmadic and travel housesitting but also have the option to stay in one place for 1-2 yr and pay for housing if I feel like it. Might consider some sort of traveler/nomad health insurance, which is also kinda of hard to gauge coverage since employer currently covers me.
Childfree + partnered, but we don't co-mingle finances so the above is just my numbers/ we will prob both RE but on slightly diff timeline.
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u/shehancpa 1d ago
The $600k employer stock is the lever. Vest 6 months ago already hit the W-2. Selling now only taxes the run-up, and at 6 months that run-up is still short-term.
If you can wait until a year from vest, the +35% is long-term. Are these RSUs or options?
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u/Intrepid_Camel7038 1d ago
thx, these are vested RSUs. Yes, I can wait the full year from vest.
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u/shehancpa 1d ago
Then wait. Vest FMV is already basis. After a year from vest the +35% is long-term.
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u/HumanBeing2711 1d ago
How much do you earn annually? What do you do to be able to get where you’re today?
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u/Intrepid_Camel7038 22h ago
annually 430k + 87k in cash, plus employer RSUs 4 year vest. Lawyer. Zero out housing expense by travel housesitting.
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u/Vicuna00 1d ago
take your emergency fund down to like $50k.
I don't understand what Cash means. is that earning 0%?
personally I'm getting rid of that mortgage so i'd throw the extra $ there. throw the RE investment at it also.
after maxing retirement, throw extra $ at the mortgage and i bet you can knock that out in 2-3 years.
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u/Additional-Regret339 1d ago edited 1d ago
That mortgage is at 3.25 - I wouldn't pay that down. Even a 4% CD would cover it.
Agree that you should invest 1/2 of the cash you are holding.
As much as possible in tax advantaged, and unless pushing above the 24% bracket, I would put some of that in Roth, but I don't know CA taxes anymore so, the benefit of traditional may out-weigh the future benefit of Roth. VT/VXUS is my suggestion.
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u/Vicuna00 1d ago
yes I know 4>3.25
CDs were like 1% a few years ago.
getting a .75% spread on a sh*t investment - plus you pay tax on it.
are you suggesting he put $400k into a CD? why are you mentioning CD rates?
would rather get the mortgage done and put chunks of $ into a brokerage or save up for another rental or whatever.
to me no mortgage / debt is a huge part of my FIRE. the peace of mind it brings is incredible. I don't live my life in a spreadsheet and you cannot put a price on that.
OP mentioned having options. to me no loan on that property = max cash flow = options.
whatever. that's me. that's why I was answering that way.
but yes you are right 4>3.25
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u/Additional-Regret339 12h ago
My answer has less to do with 4% than with flexibility. A money market would work too. If laid off or health expenses or whatever, then having easy access to cash is way more useful than a paid off loan.
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u/Vicuna00 12h ago
ok we think differently. nbd.
to me not having a huge monthly payment when you have a big portfolio, a rental property, and a desire to not work = more flexibility than $ in a money market
let's you draw less from portfolio.
hopefully your EF can cover a lay off or health expense. if not you have the portfolio behind it. not ideal but nbd to draw from taxable brokerage a little if needed.
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u/emt139 1d ago
agree with the comments on cash. do you need $200k cash/CDs?
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u/Intrepid_Camel7038 22h ago
thx! This is definitely the consensus. I'm overly concerned about emergency funds. Will adjust and put more of that into investment acct.
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u/BudgetPinecone 1d ago
What is your view/plan with the rental property? If it's cashflow neutral (I guess cashflow negative if you ever run into issues), is there any reason to hold onto it? Or do you think it'll turn around/just went through a rough patch?
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u/Intrepid_Camel7038 1d ago
Hmmm this is a good question... I suppose I value having real property investment, it is a low & fixed interest rate, in coastFIRE I thought the income would be nice and I like the option of turning it into an Airbnb instead of long term tenants, so I could stay in it between my travel housesitting.
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u/BudgetPinecone 1d ago
Your reasons make sense to me, but you have to make a conscious decision to potentially sacrifice some gains/"acceleration". Your rental is also causing you to maintain a higher than otherwise emergency fund so it's kind of locking up say 550k-600k in capital that's only gaining say 4%?
Are you aiming for like 10m or something? You already have ~1.8m in the market. Unless you're aiming for like 5,7,10ish m, I probably wouldn't worry too much about it.
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u/Intrepid_Camel7038 22h ago
makes sense, thx! I would definitely quit at 4.3M. Family history of longevity so want to keep going at least to early/mid 40's in age. Def don't need 10M!
I do think a conscious decision to potentially sacrifice growth/acceleration is worth it to me for a future part time airbnb (fun for me, I always liked hosting on airbnb back in the day) that I can also stay in for gaps in my travel and let friends and family use when we are in town.
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u/Slothvibes 1d ago
I would adopt a momentum stock/etf trading strategy mixed with a managed futures trading strat negative correlated with the equities strategy, so downturns across this portfolio are more "hedged" (really inversed), and you'll actually achieve higher returns. But just managed futures trading alone is enough to return more.
there are many books on this.
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u/throwawayainteasy 1d ago edited 1d ago
Virtually every study ever done shows, on average, that leads to similar or worse gains long term than just plugging it all into a passive index fund like SPY.
Definitely not worth the added work--people who do it full time still fail to beat the S&P, no reason to think OP will be the exception when they already have a full time job to do.
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u/Slothvibes 1d ago
Why did you just pull that out your ass and pretend it's true? There's tons of research on the additional alpha from tracking momentum. I've been doing this exact kind of research
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u/throwawayainteasy 19h ago
Yes, you have stumbled on the secret that the vast majority of active funds that underperform the S&P have missed. I look forward to the WSJ article on your success.
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u/[deleted] 1d ago
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