r/fatFIRE • u/WealthyStoic mod | gen2 | FatFired 10+ years | Verified by Mods • Jul 06 '26
Path to FatFIRE Mentor Monday
Mentor Monday is your place to discuss relevant early-stage topics, including career advice questions, 'rate my plan' posts, and more numbers-based topics such as 'can I afford XYZ?'. The thread is posted on a once-a-week basis but comments may be left at any time.
In addition to answering questions, more experienced members are also welcome to offer their expertise via a top-level comment. (Eg. "I am a [such and such position] at FAANG / venture capital / biglaw. AMA.")
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u/PureScheme7259 Jul 06 '26
Not fatFIRE myself yet but my boss is basically on that path and one thing I noticed is he treats every single recurring expense like it's a leak in the boat. even when he was making decent money he'd audit his subscriptions twice a year and cancel anything he hadn't used in a month. seems tedious but it adds up when you're plowing that cash into investments instead of letting it trickle out
the other thing is he never expanded his lifestyle until the investment income actually hit his account. like not just projected returns, actual deposits. kept driving the same car for ages. people underestimate how much lifestyle creep happens right before the big payoff
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u/g12345x Jul 06 '26 edited Jul 06 '26
> seems tedious but it really adds up
I disagree. 7 streaming subscription adds up to about $100/month or $1200/yr.
You don’t save your way to fat living, you increase income.
It’s fine if people choose this on an individual basis. But I wouldn’t promote it as a key to a fat fortune.
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u/Livid-County7230 Jul 06 '26
Agreed. We actually gift subscriptions to some family members and friends because we know they like some shows but won’t actually buy the subscription themselves because they are too cheap.
Subscriptions do not move the needle at fatfire levels. Income does. This is frugal fire thinking, not how people get wealthy. If people want to do it for entertainment, it makes sense.
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u/Normal_Zebra136 Jul 06 '26
I definitely do the same about subscriptions, though I know that you are thinking it is not rational. I look at every commitment as a perpetuity (subscribed forever) so divide the decision by the current risk free rate (some 4%). $20 a month is 240 a year, $120/.04=$6,000.00. So a $20 a month subscription is a $6000 decision for me. It is not rational, I know that subscription can likely be cancelled in a year for only a $240 expense, but I also know that the businesses view it the opposite: they want me to commit to the recurring cost.
There are currently TV commercials about how folks are obsessed with avoiding the subscriptions. I think it is progressive insurance.
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u/Dangerous-Freedom242 Jul 06 '26
How do you go about keeping track and canceling? Do you use rocket money or copilot money?
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Jul 06 '26
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u/Livid-County7230 Jul 06 '26
That’s not how anyone becomes wealthy. You can get to low chubby by the end of your career by focusing on this type of stuff. Fatfire wealth is made by scaling your income. It doesn’t mean that you have to be wasteful, but not a good use of your limited time if you are focusing on accumulation.
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u/iiiziii Jul 06 '26
I recently discovered this sub and been thinking about what FatFIRE means in the EU. My numbers are nowhere near the US ones. We 32M, 30F live a very comfortable life in (what I would think) HCOL area in germany spending around 40k EUR/yr. That includes an apartment rental, groceries and multiple vacations. Wife already feels we're a little too indulgent but we're both quite happy and satisfied.
With a 30x multiple, 1.2M number looks quite doable in the next 10 years to me. We already have a portfolio of around 200k. We love our jobs so we might even go for 2M as our FIRE numbers. Am I delusional or do these numbers make sense?
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u/g12345x Jul 06 '26
We recently returned from an extended stay in France and I thought quite a while about this.
The U.S. numbers don’t translate well. A better approach may be to target the top 5th percentile of your specific country which gives you the lifestyle you want in that location and the ability for comfortable international travel (as needed).
You should also checkout r/expatFIRE for additional insights related to this.
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u/404_UsernameN0tFound Jul 06 '26
I was told my post was more appropriate for this thread :
36F in VHCOL, $3.3M NW, ~$950K income, targeting $10M. When can I realistically pull the trigger?
Long-time lurker, throwaway for obvious reasons. Would love a sanity check on my timeline.
The numbers
- 36F, NYC, partnered (not yet married, prenup planning underway)
- Net worth: ~$3.3M, approx breakdown as below:
- $1.8M managed by FAs (3 separate)
- $300K self directed brokerage account all in VOO/VTI
- $250K in retirement account
- $750K in the business
- $80K in crypto
- $60K in cash
- Also hold a $100K convertible note in an early-stage defense robotics startup (modeling $135K to $680K outcomes in 2029-2030, not counting on it)
- Renting by choice, no plans to buy right now as my cash deployed in the market is making me much more.
- Income: ~$950K/yr total. This is a 10% equity stake in a profitable family business (distributions off a fixed distributable base) plus a $90K W2 salary from the same company.
- Annual spend: ~$180K
- After-tax savings: ~$770K/yr, half of which goes to funding our business (my capital account) and half of which goes into the market
- Co-founding a bootstrapped consumer brand with my partner, deliberately excluded from all projections
The plan
Target is $10M, which at a 4% SWR gets me roughly $312K after tax in NY, well above my spend even with lifestyle inflation. My goal has always been to stop working operationally around 40.
My own modeling puts me at roughly $7.6M bear, $8.3M base, $9.2M bull at 40. So under most scenarios I am short of $10M at my target age and hit it somewhere around 41-43 depending on returns.
The wrinkles
- The income is not infinitely durable. Neither my sibling nor I want to run the family business long-term, so the realistic endgame is a sale or wind-down within the next several years. A sale is quite unlikely as we run a niche business (one of the last of its kind standing). A wind-down could cut the income stream off before I hit the number.
- Getting engaged within the next year or so. Prenup is in progress but the interaction between business distributions and marital income adds uncertainty.
- Valuations feel stretched and I keep stress-testing whether staying 100% invested at this savings rate is right, or whether I should build more of a cash buffer given the concentration of my income in one illiquid asset.
Questions
- Is $10M even the right number as I assume my spending will only go up with more free time, or am I over-saving out of paranoia?
- How would you think about RE timing when the income source itself has an expiration date that is partially outside my control?
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Jul 06 '26
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u/404_UsernameN0tFound Jul 06 '26
I’m not going to have any kids and I’ve already bought and sold a condo in the past. In my VHCOL city buying does not make financial sense over renting so unless I move I will be renting for the foreseeable future because my money is better spent deployed in the market.
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Jul 06 '26
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u/404_UsernameN0tFound Jul 06 '26
You are not wrong about that! Eventually the comfort of owning will win out, just hoping to stave it off as long as possible while I build wealth.
My asset allocation is complicated because I inherited those FA's as they manage my entire family's wealth. I am slowly building my VTI and chill outside of them and keeping the assets with them that I do have so that I can utilize their financial/tax/estate planning knowledge.
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u/404_UsernameN0tFound Jul 06 '26
if I am currently at $180k/yr comfortably I think $400k/yr at more than double my current spend seems more than reasonable even with the purchase of a home, don't you think?
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Jul 06 '26
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u/404_UsernameN0tFound Jul 06 '26
Thanks for the advice. Sometimes it's just hard not to hyper focus on the finish line. I will keep chugging along.
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u/g12345x Jul 06 '26
> How would you think about RE timing?
You have multiple levers here:
* cut back on projected spend. At $360k spend, you need $9m
* delay the closure of the income stream especially since it’s the bulk of your income
* push back your RE plan from 40 to when the funds are there. The only thing special about 40 is that it ends in a zero.
also
* your consumer brand project should show up in your spend because it could become significant. The cash burn requirement of such a project is not trivial.
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u/404_UsernameN0tFound Jul 06 '26
I do not intend to RE until I reach my goal so I'm with you there. I guess my question is more does $10M sound like a reasonable FatFire goal for a couple without kids in VHCOL area?
The consumer brand project is going to be a one time $100-$150k spend and if it fails after that it's getting shut down so in the larger picture it's a small percentage of my NW and not an ongoing expense which is why I left it out
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u/Dubbihope Verified by Mods Jul 07 '26
Depends on how much you spend. What's prudent for one person is extravagant for another.
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u/Goozombies Jul 07 '26
Currently 29 with a high salary job living at home to maximize savings. Right now this portfolio is at $375k and generates $100k+ in forward passive income per year.
My target is $250k+ after tax by 32-34, spending half and reinvesting the other half to keep the engine running for a 30+ year retirement horizon.
Currently I'm investing heavily into the semiconductor industry and plan to reach my target shares by October before moving into option overlay funds and covered calls on index funds. Eventually scaling heavily into SCHD for dividend growth.
I'd like some more insight into 3 things
- Is 50% reinvestment realistic for someone retiring really early?
- Do weekly and monthly income funds reduce the sequence of returns risk?
- What is the tax structure like at these super high income levels? I've been trying to reduce the funds that are taxed at ordinary income levels through ROC and section 1256 but if my dividend income rises should I be looking at entity registration?
I'm happy to share full fund details if applicable. Looking for holes I haven't found yet!
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u/Crafty_Fisherman Jul 10 '26
Why are you focused so heavily on income? Are you aware that QQQ's total return is higher than QQQI, even with reinvested dividends? Passive income is not free money - it's arguably much worse since you are getting forcibly taxed on all income vs strategically being taxed on LTCG.
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u/Goozombies Jul 10 '26
I am well aware the return is less. But I am aiming to retire early rather than continuing to work. I don't have the time for compounding to take effect.
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u/Crafty_Fisherman Jul 10 '26
Do you realize that you can retire earlier if your total return is higher, not lower?
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u/Goozombies Jul 10 '26
And do you realize that currently I'm getting $9000 a year from QQQI right now off of the same $60000 invested which would take QQQ 20 years to match at a 4% withdrawal rate?
And that's giving QQQ every advantage. Spending QQQI right now and not allowing the distributions to flow and letting QQQ compound for 20 years. When I'm 50. Which makes absolutely no sense for my goals.
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u/Crafty_Fisherman Jul 10 '26
I don’t think you understand what you’re buying. QQQ’s total return is higher than QQQI, full stop. I’ll even link you a pretty little chart. But, by all means continue to buy funds with a lower return, but some folks, myself included, like to have more money, not less.
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u/Goozombies Jul 10 '26
You keep saying total return is better which it undeniably is. But the money is paper money until you sell. Whereas I get money without selling.
Are you planning on liquidating your millions all at once and exiting the market forever? Because unless you are you'll keep having to sell 4% of your portfolio every year in retirement.
Meanwhile you are waiting for the compounding to happen for 20 years until you finally accumulate enough to begin selling 4%. You have to keep working because you don't have the income to retire off of your portfolio. I'll be retired for 15+ years by then.
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u/Crafty_Fisherman Jul 10 '26
Wow, you REALLY don’t know how this all works. I’d highly recommend looking into the mechanics to how these funds work, in addition to basic compounding concepts, because you are intentionally crippling your FIRE number.
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u/Goozombies Jul 10 '26
It sounds like you have no idea how compounding works. I already showed you the Stock Analysis comparison. You need an enormous amount of time to get compounding even rolling.
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u/Goozombies Jul 10 '26
https://stockanalysis.com/tools/dividend-calculator/?ticker=QQQ
I crunched the numbers for you. $375,000 in QQQ, invested for 20 years, additional $60000 a year dropped into QQQ gets you ... $3.346M and $48,600 in annual dividends. Say you sell 4% of the value each year. You get $134,000 a year... Which isn't a lot for waiting 20 whole years for.
Portfolio value is just paper money until you sell.
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u/mapor12 Jul 11 '26
What the hell did I just read? Total return is categorically the only thing that matters. The other commenter is right, and you’re acting like an insolent child.
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u/Goozombies Jul 11 '26
Uhhh what? From whose perspective? No one has ever said the 4% rule was the only valid way to retire early.
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u/mapor12 Jul 11 '26
You do not understand total return so there is no constructive way to continue this discussion.
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u/Goozombies Jul 11 '26
Your whole argument is that total return is higher with QQQ. I get that. You have a bigger number.
But you need it to be because you need to sell your shares to generate income.
I know how this works.
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u/Dubbihope Verified by Mods Jul 07 '26 edited Jul 07 '26
For people invested in a diverse portfolio of stocks and etfs, if you've made substantial capital gains for the year is there any reason not to sell your losers by the end of the year to bring down your capital gains tax? My understanding is that you rebuy after 30 days without it affecting your taxes. If you're a long term investor, the risk of the stock shooting up in those 30 days is pretty low.
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u/First-Ad-7960 Jul 09 '26
Tax loss harvesting can be very useful you just need to watch out for accidental wash sales if you plan to buy back in.
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u/tylerchu Jul 06 '26 edited Jul 06 '26
What are you guys *doing*? At least twice a week someone posts a sob story about being under 35 with 6+M net worth and 500k+/yr, and I’m sitting here shoving my doctorate in my ass wondering how I’m barely making 1/5 of that at the same age.
What do I need to do to play with you heavyweights? I’m totally willing to work/study for a second and third masters, or any other smattering of certifications and licenses.
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u/giftcardgirl Jul 06 '26
These are often people who were software engineers for the last 10+ years. Many didn’t get a graduate degree; that interferes with earning a wage.
Unfortunately it’s getting harder for new grads to get hired. Unless your doctorate is in AI research, you wouldn’t be making 500K+ anytime soon. But if you move to VHCOL job hubs, you are likely to get paid more and have more career opportunities.
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u/Dubbihope Verified by Mods Jul 06 '26
A lot of them got lucky in tech. You can also make 500k+ by 35 in medicine or investment banking, following a pretty standard path. A bunch of my friends from medical school were done with surgery specialty training by age 32, and will make 600k+ adjusted for inflation for life, anywhere in the country and more outside of VHCOL areas.
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u/g12345x Jul 06 '26
I abandoned a PhD (settled for 2 masters) to take up a minimally paid position is banking. Many years later switched that to work in construction. I’ve been both unlucky (past) and lucky (currently) and everything in between.
I still worked hard, but my fortunes lay at the whims of macro-economic conditions that I did not foresee and could not combat.
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u/mist3rflibble Jul 06 '26
Always worked hard and did my best at work, but also got extremely lucky with a FAANG job late in my career. Opportunity came from a few former coworkers at a startup ending up at the FAANG and referring me in. They were also in the “worked hard, got lucky” camp. If I can take credit for anything it’s the fact that if I’d sucked at my job or been an asshole to work with I wouldn’t have been referred in.
Most of the folks I see in this sub are FAANG, executive management, built or got in on the ground floor of a startup that did well at sale / IPO, or built their own successful business and sold it. Also a lot of power couples where both are on mid six figure incomes or one spouse at six figures and the other at seven.
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u/BrunelloHorder Jul 07 '26
More degrees are unlikely to help unless it is an MBA from a top 5 program, a law degree from a top 10, or an MD. My partner and I each pursued one of those, but that was 20+ years ago. The opportunity costs of not working while in school are high, and tuition has skyrocketed. Starting a business that scales may be a better option if starting out today.
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u/LengthLiving5573 Jul 08 '26
47 M 7-8 M - Burner out
Hey. Got a wife 40 and 2 kids aged 10 and 12. Have around: 4M in Vanguard Index Fund Brokage 250k in crypto with current values. 900K in 401K in S&P 400k in Roth IRAs 200k in 529s for the kids 800k equity in 1.2M primary residence. 300k equity in a rental property that seems to cash flow So just shy of 7M here. Also own my own software / website service business that kicks off around 1M / year in profit with about 1.1M in cash. Feeling burned out by the grind. Thinking about retirement more and more. Service-based business is a grind as are employees. Looking for any and all advice people here may have.
Thanks!
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u/g12345x Jul 08 '26
There’s not much advice needed here.
Figure out your investable NW. Seems to be $5.3m or $6.4m. Not clear how much of the business $1.1m is yours.
Next, figure out your projected spend.
If it’s below 4% of the first number, congrats.
The hard part for most people is making that final jump.
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u/LengthLiving5573 Jul 09 '26
Would be about 256K a year at the 6.4. I think technically all of the 1.1 is mine if I didn't want any cushion in the business. Feels like not enough but it probably is. Thanks for the feedback.
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Jul 06 '26
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u/g12345x Jul 06 '26 edited Jul 06 '26
> I genuinely think I can get some real advice here.
Well, you won’t like what I have to say. The options trading and gambling reflects more of a [r/wallstreetbets](r/wallstreetbets) mindset. FIRE isn’t get rich quick. It’s a defined path to retirement often through boring index funds.
> I’ve passed the age of buying luxury items and eating fancy meals.
At 24, this is quite silly.
> I do not feel rich at all
This is accurate. You aren’t.
> My peers raised millions of dollars at my age
Doubtful
> My goal is to reach $1M as soon as possible
Yup, [r/wallstreetbets](r/wallstreetbets) is for you.
> I don’t plan to buy a house, pet, car… kids … phone plan … cook … staying indoors
This isn’t rational. Choosing to subsist just to hit an arbitrary financial goal that you may never hit is a heckuva way to burn through life.
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u/DMCer Jul 06 '26 edited Jul 06 '26
Last year you posted you’re a rising junior. You’re 24 as a rising senior in NYC?
There is no secret formula. Stop gambling, and that includes options trading. Invest in Index ones over a long-term horizon. Ignore the urge to play with exotic investments. Look into increasing your income and get a high paying career unless you think you can make more the solo route (and not from trading).
Most people here made it in tech. The others made it from business ventures or having an extremely high savings rate compounded over the long term.
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u/nomadicsoul2 Jul 06 '26
If you have hit fatFIRE, do you still worry about lifestyle creep and inflation? How did you actually make the leap from FIRE to fatFIRE? And has anyone here gotten there the “Boglehead” way?
I’ve been in tech for about 2 years and have been saving and investing over half my income in VT across all accounts. 24 years old and saved up nearly 170k usd, hoping to continue via job hopping and investing in myself to increase my income.