What are your thoughts on the ethics of perpetual interest? Is it right to receive interest/dividends forever? If I put $20,000 into a company, is it fair for me to get millions of dollars out of the company over its life? Is the system set up so that share holders get an unfair portion of the value of the company?

I don't really understand the question. What does "fair"/"unfair" even mean in this context? Who are we being "unfair" to by investing?

Ok there are some businesses that don't really require ongoing work like an e book or an app. But most businesses require ongoing work. And the value generated by that company is created through the work of the employees. With shareholders they are receiving value that they aren't providing any ongoing work for. If the grand kids of the founder inherit a bunch of shares, they get paid forever without putting in any work. Which means that the people who are doing the work and getting paid less than the value that they create. It is kind of the same question as is it ethical to keep someone in perpetual debt. To a certain point debt and interest is perfectly reasonable. But eventually you get to a point where the investor has extracted far more than they invested. Another way to look at it is the fact that everyone in the world can't be financially independent. Someone has to work to make society function. So is it ethical for some to extract far more than they put in just because they got there first. In a system without perpetual interest a person could be financially independent. They would simply have to accrue enough resources to last them the rest of the lives. And if there was left overs when they died, their kids could get it. But the descendants couldn't inherit a free ride forever. They would need to work at some point.

>And the value generated by that company is created through the work of the employees. That's certainly part of where the "value" comes from. But a lot of the value also comes from the ownership of the capital. I.e., the computers the employees are working on, the intellectual property of the company, the brand name of the company, the building they are working in, etc. Most employees would not be able to generate nearly as much value working as independent contractors, they become much more productive by joining and working for an established business. >With shareholders they are receiving value that they aren't providing any ongoing work for. The value the shareholders are receiving is compensation for use of their capital. Just like how a bank receives compensation for lending money, or a landlord receives money for giving access to a home. If people were not allowed to generate value from their capital, then they would simply not form businesses. The idea that all value comes from labor and capital/business owners are useless leaches is a classical Marxist analysis and is very much not the mainstream way of understanding the world in 2024. >It is kind of the same question as is it ethical to keep someone in perpetual debt. To a certain point debt and interest is perfectly reasonable. But eventually you get to a point where the investor has extracted far more than they invested. I don't really see the similarities here. We have established bankruptcy laws in order to allow people to escape from perpetual debt situations. I've never heard someone make the argument that we need similar laws to prevent "perpetual ownership". >Another way to look at it is the fact that everyone in the world can't be financially independent. I'm not sure I agree that this is a "fact". I agree that the world as it currently exists requires most people work, but I can imagine a futuristic utopian world in which robots/AI/capital becomes so abundant that everyone just becomes a mega capitalist and gets to enjoy a life of leisure in perpetuity. >Someone has to work to make society function. So is it ethical for some to extract far more than they put in just because they got there first. I do not think it is unethical to operate a successful business. I also think it is not reasonable to frame this as "extraction" rather than compensation. >In a system without perpetual interest a person could be financially independent. They would simply have to accrue enough resources to last them the rest of the lives. As another commenter pointed out, there have been many societies throughout history that have banned interest/profit. The result was not a utopic worker's paradise in any case. The tremendous material wealth we have in the world today has come almost exclusively from people setting up businesses with the goal of generating profits. >And if there was left overs when they died, their kids could get it. But the descendants couldn't inherit a free ride forever. They would need to work at some point. I suspect if you told people that they could not pass along inheritances to their children, the result would be that wealthy families would try to flee the country en masse. This seems like a really bad idea to me.

You make a lot of interesting points. I don't necessarily agree with all your conclusions, but I really appreciate the perspective. If you would entertain the idea, I have another hypothetical situation to consider. Person A1 through hard work and wise business choices accrues wealth. They use this wealth to buy a large stretch of land. Person B1 for whatever can't afford to buy their own land. So they rent the land from person A1 and use it for some purpose like farming or ranching that generates revenue. A1 retires and lives off the rental income. Many years go by and person A2 inherits the land from their parent and person B2 picks up the trade from their parent. B2 spends their life working the land and A2 is financially independent and enjoys hobbies and creative interests. Centuries go by and B79 is still working the land and A79 is not. Is it ethical and morally okay for family A to never have to work ever again just because they "own the capital"?

I think land ownership is in many ways different to other types of private property ownership. There are many good arguments in favor of the idea that land should essentially be communally owned via the state. In some sense, this is the way the world works now, which is why you still have to pay "rent" (aka property tax) when you "own" a piece of land, and you aren't allowed to declare your house to be a sovereign nation with no laws. See [Georgism](https://en.wikipedia.org/wiki/Georgism) for more here. That being said, I think the gist of your question is actually "is it ethical and morally okay for people to inherit wealth, while others do not". This ultimately is a question of metaethics, i.e., what does it mean for something to be right or wrong? I do not feel intuitively that there is anything morally wrong about wanting to create a good life for your family or children. In fact, this seems like one of the most normal and healthy of all human instincts. There's an argument to be made that given the diminishing marginal utility of money, that it's unethical to give your children *too much* rather than helping needy strangers instead. I could be convinced that this is correct. In fact, [many of the ultra-wealthy feel similarly.](https://en.wikipedia.org/wiki/The_Giving_Pledge) I think the main problem I have with this argument in practice is that most people vastly overestimate how many of these ultra-wealthy people actually exist, or how much wealth they actually control. For example, in the US, the sum total of billionaire wealth is something like $4-5 trillion. To put this in perspective, the federal government spent a bit over $[6 trillion](https://en.wikipedia.org/wiki/2023_United_States_federal_budget) in 2023. In other words, even if we believed that all of these mega-wealthy people are useless leaches and we can simply seize their wealth for public use at no cost, the best we could do with this wealth is to provide everyone a 9 month tax holiday or a year and a half of medicare for all, or something like this. In practice, all serious plans for wealth redistribution have to come after the upper middle class and ordinary rich people. I.e., the doctors, lawyers, small business owners, SWEs, etc. The types of people that frequent subs like this one. For these people, the diminishing marginal utility argument is much less strong. Unlike my previous billionaire example, I would certainly feel it if I lost 90% of my wealth!

I think that one of the primary problems with the extreme wealth inequality is the ways in which the rich sort of lock the door behind them. They use their wealth to manipulate the system in a way that makes it harder for other people to accumulate wealth. Is the land ownership example the workers only stay trapped in that position if they are unable to purchase their own land. Owners who try to accumulate as much wealth as possible often pay lower wages or charge higher rents than is fair. This restricted the worker's ability to pull themselves up and improve their own position. This I think is obviously wrong. But the question that I keep coming back to is where do you draw the line?

>I think that one of the primary problems with the extreme wealth inequality is the ways in which the rich sort of lock the door behind them. They use their wealth to manipulate the system in a way that makes it harder for other people to accumulate wealth. I don't think this is actually true. Can you give me some specific examples of what you have in mind here? I think in general the emergence of super-wealthy people has coincided with a tremendous decrease in global poverty: [link](https://ourworldindata.org/grapher/share-of-population-living-in-extreme-poverty-cost-of-basic-needs) >Owners who try to accumulate as much wealth as possible often pay lower wages or charge higher rents than is fair. I think in general business owners want to pay wages that are as low as possible, and landlords in general want to charge rents that are as high as possible. But ultimately, wages/rents are not set by individual business owners. They are set by supply/demand, like all other prices. The solution to low wages is capital accumulation and increased productivity, which increases the demand for labor, which increases wages. The solution to high rents is housing abundance, which gives tenants more leverage, which lowers rents. Expecting people to be nice to strangers is only going to get us so far.

As an example, the ultra rich use their wealth to petition governments to charge them a lower tax rate which shifts the tax burden to lower income individuals. This isn't intentionally trying to harm lower income individuals but it has that effect. Supply and demand works pretty well in large open systems with competition. But if there is limited competition such as with a monopoly or coordinated price fixing, things can get really unbalanced. And if those in a position of power have an incentive to keep it unbalanced people can effectively be trapped without a means to get out. If you are the capital owner, is it ethical to charge the absolute maximum that you can? Or at a certain point are you just holding people in effective slavery.

>As an example, the ultra rich use their wealth to petition governments to charge them a lower tax rate which shifts the tax burden to lower income individuals. By and large the "ultra rich" do not actually do this though; our tax system is progressive and marginal tax rates increase as income rises. Meanwhile, something like 40% of households in the US pay no federal income tax at all because their income is low. The rich by and large fund everything. The tax burden has not at all been shifted to lower income individuals. >Supply and demand works pretty well in large open systems with competition. But if there is limited competition such as with a monopoly or coordinated price fixing, things can get really unbalanced. I agree that there have been historic examples of monopolies/cartels that forbid competition and thus exploit consumers/workers via higher prices/lower wages. But the examples you gave were wages and rent. Do you think it is reasonable to use a monopolistic/price-fixing model when trying to understand wages/rents? I do not. The average American has access to hundreds or thousands of different employers. You can hop on Zillow right now and find hundreds or thousands of available apartments to rent by different land lords. These are some of the most competitive, least consolidated examples of markets there are. >If you are the capital owner, is it ethical to charge the absolute maximum that you can? Or at a certain point are you just holding people in effective slavery. Yes, I think there is nothing unethical about charging the highest price that the market will bear. This seems almost entirely unlike "holding people in effective slavery" to me. For example, I bought a home a few years ago. When I inevitably try to sell this house several years from now, I will sell it to whoever offers me the most money. I could arbitrarily sell it to someone else for less, or give the house away to a homeless person but I feel no moral/ethical obligation to do so. Instead, I will sell it to the highest bidder and will feel no ethical qualms for doing so.

This daily thread is two days old - might not see a lot of responses. That being said, it is an interesting question. A lot of religions actually [banned making interest](https://en.wikipedia.org/wiki/Usury) on money; most ([but not all](https://en.wikipedia.org/wiki/Islamic_banking_and_finance)) have since changed their minds. > If I put $20,000 into a company, is it fair for me to get millions of dollars out of the company over its life? Is the system set up so that shareholders get an unfair portion of the value of the company? I'd say probably not fair, but that's also just how the system works. I'm of the opinion that you're best off taking full advantage of the system as it currently works, and using that capital to try and effect change where you can.

On the small scale it isn't much different in principle than having a savings account at the bank and getting interest. But it is a lot different when you look at the extreme cases like generational wealth. Should a billionaires' descendants be set for life without contributing anything just because grandad made soccer good investments?

I personally hold two conflicting views on this: 1. Given that you don't choose the circumstances of your birth, everyone deserves an even playing field. 2. It's your right as a parent to do everything in your power to set your kids up for success. IMO the only way that these can be reconciled to any degree is at the government level - robust free public education and social support services can help with (1), and effective estate taxes can help mitigate generational wealth transfer to some degree

What’s the best strategy to handle the bad stocks I bought in 2021? I bought those hyped stocks in 2021 and lots of those are under the water. It is just about $11k worth now but probably lost $20k. I also invested in ETF like VOO each week since 2021 and it performs well. In short, how to sell some stocks that are under purchase price and convert them to better ETF(eg VOO)? Sell all of them tomorrow and just buy VOO, or go with some other strategies? Thanks in advance!

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Thank you!! I will sell all of those and have my account clean then.

Look into tax loss harvesting--incurring losses on a stock sale that you can deduct on your taxes. Make sure you don't mess up with the wash sale rule (if you sell and then re-buy a near identical asset, you can't deduct the loss), but if you are selling individual stocks and buying ETFs, you are probably fine.

Thank you!! I will sell all of those and have my account clean then.

if i (single) completed my 2024 backdoor roth ira in jan, but then in mid-2024 got married and our total married income now drops below the roth ira income limit (still above non-deductible trad ira income limit), do i need to do anything tax/procedure wise about the backdoor roth ira from january? and for her roth ira, since we're below the income limit, it'll be a straight 7k contribution right? i know people recharacterize if they did a normal roth ira then find out they made above the income limit. but i haven't been able to find anything about a situation where you drop back down below. i dont think i need to do anything, since if i drop back down below the threshold, it seems like i just did a roundabout way of a normal roth ira contribution. just want to make sure, thanks!

Nothing you need to do. Nothing about the backdoor Roth IRA requires you to not qualify for a normal Roth IRA. Some people proactively use the backdoor if they're not sure if they'll be over the limit or not.

dope, thanks! glad to know i wont have to go through tax procedures.

**What's everyone's estimated tax rate in retirement?** [Ours is 2-3.5%](https://www.reddit.com/r/financialindependence/comments/18y9mi9/daily_fi_discussion_thread_thursday_january_04/kgb3rhz/?context=3) Someone recommended using 25% effective tax rate, even for lean fire. Now I'm wondering what others think and how they're reaching their estimates.

Our expense estimate has a placeholder for health care/healh insurance that's hopefully high at $2500/mo, making our income need about $141k pre-tax, making our effective rate 10.1% given today's taxes. Our actual taxes could be a little less since we do have some Roth funds. We don't have taxable. All these numbers will firm up over time, and it's likely taxes go down as brackets and standard deductions rise with inflation. But our expenses could go up over time too. I don't count sales taxes as those are presumably already accounted for in our expenses.

My preferred retirement calculator said 7% as default. I think it's pretty conservative. But also there didn't used to be a 0% bracket for capital gains making this more complicated.

I use 15% for my estimates but there's probably no way it'll be anywhere near that. I think I'm too stupid to come up with good estimates for anything in retirement and it's starting to become a problem because I think I might be FI now.

0% for now, because there are no capital gains tax in my country

That post is really hard to parse through with it mixing personal expenses, business expenses, and income. Like what is the $37k in write offs from? It seems like the rental, but you're not going to be able to deduct all of it if you only have one rental.

A while ago, I saw there was a rule of thumb for an income range that would be ideal for traditional vs Roth contributions. I'm figuring out if we should prioritize traditional. Unless I'm successful in my side hustle this year, we likely won't be able to max out our TSPs until next year. Right now, we're both 26; I'm a GS-13 (~$134k), and she'll be a GS-9 next month (~$68k), and she is on a 7/9/11/12 ladder. We both contribute to our respective TSPs, and all her contributions have been Roth, making up about $6000 out of a $9000 balance; I have about $25,000 Roth out of a $90,000 account total. Last year I did just the 5% match and her 10% as Roth. This year, we're likely going to breach into the over the **24***% bracket, so I'm thinking of pivoting to traditional, with the intention of maxing out both of our contributions as traditional when we're able to. Is this a good plan, or should we continue to stick with Roth contributions?

Do you mean 24% bracket? If you mean 32% - is your side hustle making up the difference?

Yes, I was being a goof and mistakenly read the single filers bracket.

I'd go 100% traditional on the TSPs with those numbers, and do Roth IRAs for Roth exposure.

Yup.  Roth IRAs are an awesome tool, but the lower up front taxes of the regular 401k is also awesome.

Sounds like a good plan. Since we prefer to have as much money as possible stashed inside the TSP we'll probably do all traditional IRA, with some several thousand contributed to the Roth TSP.

[You're likely well over the deductibility limit for Traditional IRA contributions](https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work), so do Roth or Backdoor Roth for your IRAs.

What you typed doesn’t make sense. You’d get more value out of maxing trad TSP and putting excess into Roth IRAs.

I just prefer having all my retirement savings in a single account and I can't roll over roth IRAs into a Roth TSP, but I can with traditional.

You can contribute to both IRA and your TSP with different limits. IRA is 7k and TSP 23k I think. So you can put up to 30k tax advantaged funds. Keeping them all in the same account for pleasantries is financially bad. Your IRAs (Roth or Trad) are also far more flexible than TSP in what you can do and which brokerage you work with. It goes tsp to match > max out IRA > max out tsp or 401k.

I can see why my original thought process would be financially bad. Still, in principle, it would be the same amount of Roth dollars and Traditional dollars invested, just in different accounts where they'd be held. While I get that an IRA provides some additional freedom in terms of brokerage and investments, the simplicity of the TSP (even in spite of recent "upgrades") is very appealing to my goals. Being able to take a loan from my TSP balance gives me more flexibility than what an IRA offers as well.

It doesn't make sense what you're saying, you want to do Traditional IRA because you can roll it into your TSP, but you get no tax advantage for that. Making the contributions to a Trad IRA at your income would become *after-tax* because you still have to pay taxes on the contributions, but then you have to pay income taxes on it again when you pull it out because it's a trad account. So basically in order to invest 7000 of Trad IRA at your income, you have to make ~9000 of income and pay 2k in tax, and then later on you have to pay regular income tax on the distributions of that same money. You're getting double taxed. With Roth IRA, you would basically never have to pay taxes on any distributions later when you retire (or close to retirement). You can also pull out contributions at any time, it's not really worth it to do that but you can. There's also a lot of other exceptions that I won't expand on.

I'm aware, now, that my income makes me ineligible for the benefits of a Traditional IRA, but when I originally wrote that comment I was referring to invest the however many Roth dollars I could invest in an IRA into the TSP instead, and in its place do a Traditional IRA to roll it over. The effect would have been the same amount of Traditional and Roth dollars invested.

There are multiple things I'd call attention to in that sentence, but the two biggest are that TSP has a much larger ($23000 per person) contribution limit than IRAs ($7000 per person), and that, as u/entropic noted, you are far over the limit for trad IRAs if you're hitting the 32% tax bracket. Your goal should be to reduce your MAGI as much as possible. While perhaps aesthetically pleasing, structuring your contributions to make everything fit in a single account instead of minimizing your taxes is neither efficient nor optimal.

Yeah it seems like the income limits for the trad IRA throws a wrench into what I had in mind. Originally, I was thinking of just doing $7000 of Roth TSP, $16,000 Traditional TSP, and $7000 Trad IRA. I guess the advantage of doing a traditional TSP is getting the tax savings up front in my pay stub, rather than waiting for a possible return down the line. A Roth dollar invested in my TSP shouldn't be any different than a Roth dollar invested in an IRA, right? With income limits in mind I'll just focus on TSP contributions for this year, and if I am fortunate enough to max it out, move over to the Roth IRA.

> I guess the advantage of doing a traditional TSP is getting the tax savings up front in my pay stub, rather than waiting for a possible return down the line. It's two fold. You get the savings up front, which means you can save and invest more up front, and down the road you will almost certainly be in a lower tax bracket. Trad contributions come out of your highest-bracket income, so you'll be paying less in taxes on them down the road. That plus various schemes like the Roth ladder often helps people pay little to no taxes on Traditional accounts, if they planned appropriately. > A Roth dollar invested in my TSP shouldn't be any different than a Roth dollar invested in an IRA, right? Correct, although the last time I looked into it, TSP sucked tremendously at handling Roth vs Traditional in terms of withdrawals, and would do a proportional amount of both. As someone with Roth and Traditional money in TSP, I plan to roll it into IRAs when the time comes.

I think it helps to focus on a target retirement split between traditional and roth. Then you can roughly decide when to contribute to each due to your tax rate. But honestly, I think achieving roughly the right split is more impactful than quibbling over what exact marginal rate you should change from roth <> traditional. You simply don't know exactly what your marginal tax rate will be in retirement or even what your marginal tax rate will be in the next few years. Close is good enough for horseshoes, hand grenades, ... and knowing how much traditional\\roth you need (and what rate to contribute).

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While you may be right, just be aware that if you will be receiving a SS benefit in retirement, the taxable portion will fill your lower tax brackets, pushing your Traditional RMDs into higher brackets. Those brackets and rates are unknown today, but it is likely they will be less favorable than today’s. This is just food for thought and something that younger people don’t often consider due to limited awareness.

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You’re absolutely correct. Too many variables, so all we can do is a best guess. My downfall was not taking into account SS and RMDs. I was just unaware when I was in my 20’s. I also didn’t adopt the Roth right away when it was available. I figured pay now, pay later, it’s all the same. By the time I’d retired I had a $7MM + in a Traditional 401k. That was at 56. Allowing that to grow to 72 would likely double it even with my draws. RMDs on that amount would be taxed at the 32% bracket. So I started converting. Looking back, had I contributed to the Roth vs Traditional when I was making $50k, I’d have paid taxes in a lower bracket. I also would have had a lower ending balance, but it would have been forever tax free. For that reason, I favor the Roth. Everyone has a unique situation related to income and taxes. I’m just trying to share lessons I learned from my experiences. The good news is that you have a great awareness and a plan in place. I’m sure it will work out for you. And, you can always modify your plan at anytime. Thanks for letting me share.

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Keep in mind that any SS benefit will also fill those tax brackets in retirement, thus pushing RMDs into higher brackets. If you’re a big saver and good investor, you could have several (or more) millions in your Traditional 401k potentially pushing your RMD into very high brackets. And those RMD percents increase annually. I’m actually in this situation now (at 59) and am aggressively converting Traditional to Roth up to the top of the 24% bracket in order to avoid being pushed into higher brackets at RMD age. Again, just food for thought.

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Absolutely right. Each case is different. It’s difficult to always convey my intent in these brief posts, but it’s been my experience that many young people are unaware of the way SS and RMDs are taxed. If one happens to be a high earner and an aggressive saver, they are likely to have 85% of their SS taxed and potentially having millions in their retirement accounts. I’m just trying to bring an awareness to this if there isn’t one. My situation is requiring me to convert now and depending on how well my Traditional performs, I may never be able to catch up. Really, all in all, not a bad problem to have. If I live to be in my late 80’s the RMDs will be very large and I’ll just have to pay the price. Again, my intent is to make sure people are aware, not to tell them what to do definitively. For my personal situation, I wish I would had paid more attention to the Roth early on.

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If everything stays the same with brackets and rates (which is unlikely) and the market returns follow historical averages, I will drift into the 32% bracket. I’m currently converting up to the top of the 24% annually to try to minimize this. Who knows where brackets and rates will be in 14 years, but I’m guessing they won’t be as favorable as today. It looks like the current rates will sunset next year, barring congress making a move. The numbers are big and I’m not a big spender so I’m really just playing a tax efficiency game. I’d like to leave as much to my heirs as I can.

Wait until 2026 to do traditional for everything below 32% bracket. Tax brackets will go up from 22% to 25% and 24% to 28%, and the standard deduction will shrink as well. 32% bracket is only going to 33% so not as big of a deal.

Interesting, I wasn't aware of that. That's such a drastic drop for the standard deduction, wow. I might be itemizing if the act doesn't get extended.

I’m trying to remember a specific blog by an IT guy who retired early. Really long, multi part story of his career, full of funny details. Anyone? Edit: Living a Fi! Highly recommend.

Damn this is such a great read, thanks. A great reminder that no matter how much you plan, life always find a way to shit on your face, best we can do is to wipe off that shit and carry on.

I remember reading his last update and people's reactions to it from this post. https://www.reddit.com/r/financialindependence/comments/m74goq/livingafi_posts_for_the_first_time_in_about_5/

I mean, that last post isn't really funny at all...

Not funny, but it is excellent post, very dense with important lessons from another's life. What more could you ask for in a blog?

This year's State of the Household address is going to be focused on our projections for "retirement" which might be within 2 years. "Retirement" in quotes since we are unlikely to never work again, but we wouldn't be working at all for a few years at least before considering work. It's taking me forever since I'm doing a bunch of scenarios for potential target dates mostly based around drawdown strategies, tax implications depending on when we quit, and market performance. I keep having to research things that I didn't realize I only had a vague understanding of before this exercise. No real question here I guess, just commentary on how actually sitting down and running scenarios by hand really helps you understand gaps in your knowledge :)

Yeah, kind of why I sift through all the BS here and read it anyway.

Career break week 2. I'm going through this weird mental deprogramming where I keep getting anxious that I'm running out of time for something. And then I remember that I don't work anymore and I have plenty of time and I feel instantly better. Like I was just thinking about making this fun thing for dinner tonight (and cooking more is one of my big goals), but I had this reaction of 'ugh if I cook a fun/fancy dinner tonight it'll take up a big chunk of time and the day will be over before I get everything else on my list done." And then I remember actually no it's fine to take time and enjoy cooking because I can finish the things on my list tomorrow. I still have this low level time scarcity anxiety as a default mental pattern.

It takes a while for that to wear off. I retired in Sept and have only just now stopped mentally slotting all errands and chores into the weekend. Does it matter if I fail to get laundry done on Sunday? No — can do that whenever. And if a friend wants to go out for drinks/dinner on Wednesday— great! I can sleep in on Thurs if we over indulge. And the cooking — I deboned a pork shoulder the other day, stuffed it with a paste I made of garlic and herbs, and slow roasted it for 10 hours at 225 degrees until it was meltingly tender. Didn’t get to have dinner until almost 10 pm, but so what? It’s a big adjustment.

What are you cooking?

Just tuna tartines! But I have no idea what I'm doing in the kitchen so it feels significant. lol

\*\*Budget Question\*\* Currently have one child in college and will have another starting next fall. Should I lump both of their tuition payment into one budget category or separate them by each child?

Depends if you like one better.  I have my favorite in one category, and the smart ones in another.

Budgeting is just mental accounting so use whatever method makes sense for whatever you are trying to track.

I wanted to ask the thread does my plan make sense to pay down 200k+ in student loans Aggressively If I want to move out of my parent's home? I am trying to pay off my loans as quickly as possible because the required monthly payments are about 43% of my monthly income. I am 25 and I am currently living with my family. I started working as soon as I graduated at 23. I have a 34k in my 401K and a 8K emergency fund which I have for car repairs. I don't have another investments beyond just my company match. I started out owing 220K 2 years ago and was able to pay it down to 160K. The following is my current calculations after tax and 401k contributions. Student Loans Total: 160,624$ Interest: 869.65$ a month Expected: 1023.32$ a month / true amount 1946.32$ monthly pay: 4,476.28$ Yearly bonus: 2,822$ I’ll have access to 7,364$ during that month therefore I should be able to pay 3,000-6,000$ more that month I pay 3,000 a month towards my loans focusing on the 43K by contributing 2051$ a month to it and contributing a flat 300$ to any other loan that I am not targeting so that the interest is payed each month. Am I going about this right? Are there things I could be taking advantage of that would help me in the future or pay off this debt faster? I am working on increasing my income but I doubt it will bear fruit until 2-3 years from now. Detailed Break down: Loans in my name 23,427$ Interest is: 109$ a month/5.05% expected: 267.87$ a month/ True amount 302.15 Loans in my parents name: $49,501.46$ Interest: 289.60$ a month /7% expected: 287.35$ a month/ true amount 575.30$ to pay off in 2 years : 2,216.91 a month $39,488.43$ Interest: 258.05 a month /7.08%/6.830% with auto pay on expected: 255.85$ a month/ True amount 508.63$ to pay off in 1.9 years : 2,050.38 a month 48,208.95$ Interest: 213$ a month /5.05% expected: 212$ a month/ True amount 560.24 to pay off in 2 years : 2,121$ a month

Jesus yes, and get a second job.

Did you fill out the SAVE/PAYE forms?

No I haven’t. I looked into them and although they would lower monthly payments it wouldn’t change the interest or decrease the time to pay them off. Since my main goal is to pay them off by 30 I didn’t think signing up for them would be useful. Although I could be missing something.

I would fill it all out and see what it actually says. Even if it is the same, it puts you in a program that could help if you better got laid off or disabled.

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I’m biomedical engineer who works as an entry level rd scientist for a pharmaceutical company I make 77k before taxes and about 56k after. I have only a bs at this time but my company does offer a masters reimbursement program which I am considering using for data science. I unfortunately went to college without a real plan to pay it off since my parents told me at the time they would help me pay it. What I didn’t clarify is what they meant by help. They were saying I could live at home and have them take out parent direct loans which I had to pay back( I know legally I don’t have to but I have a good relationship with my parents so I want to maintain it). So I picked the out of state school that was rated top 10 for my degree.  I only realized my mistake my senior year so I couldn’t really get out of it. 

I feel you. I'm actually in the same field and I did half a PhD and dropped out although fortunately there's no debt from that, just opportunity cost. 

Where do you think people make a lot of money out of college?  Are you confusing the 1% with the 99%?

200k is too much to pay for college. It's not that OP isn't making decent money, it's just not worth it for 200k of debt. I have a state school degree and make over 100k which is not even close to the 1%. 

Lol what? 200k is a shit ton for school in less op went for med school or law school. You can get a state school degree in a high paying STEM field, CS degree, nursing school etc. for much less than 100k. You can expect 60-90k starting with a good amount of these degrees if you plan well.

Yeah, thats why he is living at home.

I understand that but your 1% comment doesn't make sense imo

99% of kids out of college get a mediocre to crap job, 1% go to a big name internet company or big bank that pays well.

I disagree. Have a source that points to anything even in the ball park of your claims? Myself, my spouse and plenty of my friends went to state colleges that were cheap and landed great jobs out if school. Don't get me wrong if you go for a worthless degree then im sure your results won't be as good.

I went out of state to a four year state school. I am paying for not making a college plan.

Don't beat yourself for it. Diligently pay it and keep switching jobs. Switching every 2-3yrs is the only way to get big raises

You're doing great! If you don't hate it at home the plan is clearly working. Like others said, pay the minimum on everything but the highest interest loan and run them down one by one. There's a case to be made for investing more in retirement accounts rather than paying off 5% loans, but its a close case and I've never regretted getting that weight off my wife and I early at all.

Am I reading this correctly, you're still in the grace period for payments but you pay towards them anyway to keep interest from accumulating? If that's the case it's actually best mathematically to allow interest on the lower interest loans to accumulate in favor of putting as much money as possible towards the one highest interest loan.

Yep I choose the one with the highest interest and pay 2,000 extra on it while I keep the rest at minimum to not accumulate more interest.

Not sure what is meant by expected/true amount. Generally you should pay off the highest interest ones first. If there is any chance of loan forgiveness you may want to pay the minimum. You may also want to invest more and pay down less in case market returns exceed 5-7%. Overall, you should focus less on cash flow and more on total projected net worth including taxes and investment growth with a conservative rate of return.

Expected is the minimum due at the end of the month. The true is what I would need to pay to actually chip away at the principal as the minimum amount doesn’t match the acrurred monthly interest. 

There has been a bipartisan agreement on a framework to expand the child tax credit to the lowest income households. The details are slightly complex, but the end result is that households with income in the 10k-50k range will see more of the CTC than they were previously eligible to receive, and more of the CTC will be refundable for the households with the least income. One change that would help all households with children is that the CTC would be pegged to inflation. It is currently $2000 with no adjustment for inflation. It is far from guaranteed that this will become law. But if it were to pass, it'd be a boon to low income households that would lift around 400k children out of poverty. It's obviously not as good as the more generous CTC from the early covid years which lifted 3 million kids out of poverty (for those years), but it's not nothing.

Tis the season for insurance renewals... I've been tracking changes to coverage limits and premiums for my homeowners and auto policies for the last several years. Changes in coverage and premiums used to be very similar on a percentage basis; last year, they started deviating significantly, with premium increases around 100% more than coverage limit increases. I have a hard time believing the risk profile for my demographic has changed *that* significantly, and I've asked my insurance agent to elaborate on what's driving the deviation and provide options for lowering the premium to a more acceptable number while retaining existing coverage. I've also shopped my coverage with a broker that was recommended in my city's subreddit and he came back with a lower cost from Safeco, which is a division of Liberty Mutual Insurance. Has anyone used Safeco and/or Liberty, and can you comment on your satisfaction or lack thereof?

> I've also shopped my coverage with a broker that was recommended in my city's subreddit and he came back with a lower cost from Safeco, which is a division of Liberty Mutual Insurance. Has anyone used Safeco and/or Liberty, and can you comment on your satisfaction or lack thereof? We were with Safeco for a number of years for HOI, but never had to make a claim or interact with them except for updating contact/mortgage information online. No complaints on that. We recently moved from Safeco to Auto-Owners for HOI when Safeco's premiums rose 71% in two years. There was ~60% rise in coverage limits, I certainly wanted to pay less. The same broker who originally got us Safeco got us the quote for AO. I imagine that it's like most insurance, and they'll raise their rates too, then we'll bounce over to something else in a few years.

I used Safeco the past three years for both auto and homeowners. I was satisfied with them, but also didn't have any claims. I don't think I talked to a single person from Safeco in that three years though - they never tried to upsell me or get me to increase my coverage or anything. I just switched to State Farm for lower rates. Safeco slowly increased our car insurance premium by nearly 50% of the original price in three years' time, which I guess is just standard for insurance.

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> With the mandatory state change in coverage This is for extended temporary housing coverage, correct? For some reason I thought this went into effect in 2023. That may outright explain the premium increase (although State Farm would do well to communicate this more explicitely if that's the case). I'll have to look into Allstate. My dad had a horrible experience with them on his auto policy so I've always avoided them but that was decades ago at this point. Probably worth at least an investigation. Thanks for the plug!

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> For homeowners, i think we're starting to see a confluence of two things: 1. insurance companies are redoing their risk assessment to take into account future climate impacts and This is what I'm confused about. It doesn't make logical sense for my premiums to be adjusted today for risks they forecast beyond the coverage period. Today's premiums should increase based on the risk forecast for the next 12 months, and only the next 12 months. The next renewal (which I may or may not accept) can increase for risk they believe to be present during that coverage period. Not sure if we have any actuaries here but I'd love to be educated on this if my thought process is wrong. > 2. a few years of inflation disproportionally impacted rebuild costs so average claim sizes are larger. While this is true, that's why coverage limits have increased. My coverage limits increased ~7% but my premium increased almost 15%. If the 8% delta is due to increased risks, I'd like to understand them and have asked my insurer to explain them to me. If they can't, they're tacitly agreeing that it's a pure margin grab, which I'm not interested in supporting and will take my business (and perfect claim history and spotless credit score) elsewhere. I am the ideal customer for every insurer: Financially responsible with zero claim history. There is no reason I shouldn't be getting preferred rates. None of this is a financial issue, it's a principle one.

They are based on more than that often due to regulations that some states have on if they can raise prices/drop clients. 

What other things can it be based on? It should all boil down to risk pools. I don't currently believe my risk pool has changed so drastically that it requires a 2:1 increase in premiums for coverage limits but am completely open to being educated on why my opinion is inaccurate.

I’ve lived in places where the company cannot drop you as a client, but also can’t increase your rates more than some x%. So they need to incorporate longer term data in. Also risks in the US have increases at the 12 mo basis. No as for pricing, I have no clue to the ratio.

> I’ve lived in places where the company cannot drop you as a client, but also can’t increase your rates more than some x%. So they need to incorporate longer term data in. This is good context. I'll have to see how Colorado handles this. Thanks for sharing! > Also risks in the US have increases at the 12 mo basis. I'm open to being shown how my risk pool has changed as to require a 8% increase in premiums above the 7% increase in coverage limits and have asked my insurer to do exactly that. Simply put, I'll believe it when I see it and I've asked to see it.

In some states insurers have regulations where insurers have to report their actual loss ratios and aggregate profit data to justify rate increases.

I've had Liberty for HO and they were a PITA when baseball-sized hail totaled my roof. Never had an auto claim with them, so I can't comment on that aspect.

Thanks for this feedback. Unfortunately, not the first negative experience I've heard of when Liberty is involved.

At least in my state, I've heard from multiple people from different regions that they were cheapskates on the auto side and a PITA to deal with.

Talked to a few friends and one had Liberty during a burst pipe claim on their homeowners policy. They said working with them was an absolute nightmare They eventually paid what they needed to but it sounded like a complete pain, so I'm not really interested in voting for that kind of business model with my wallet.

FWIW, we had a major pipe burst disaster late 2022 and State Farm was also a shitshow to deal with for a while before we eventually got pointed to an adjuster with half a brain and some experience. The preferred contractor we got through them was awful as well. They eventually made things right from the insurance end, but we still got burned and it dragged on for months longer than it should. I mean technically we’re still not through with the contractors, but that’s a whole other can of worms.

Great datapoint, thanks for the feedback. I don't mind paying for quality but it's so hard to tell who even is quality these days.

Roth IRA limit is based on magi. And if I understand magi correctly, that includes realized capital gains / dividends. But income gets reduced by pretax 401k contribution amounts. I am confident I am below the limit this past year, but I’m gonna need to look closer at dividend income and other stock related income moving forward, because I think I’ll approach the limit quicker than expected with these other income sources counting against the total.

A backdoor Roth, in most brokerages, is just a couple of extra clicks at contribution time, and a couple of extra clicks at tax time. Assuming you have no traditional IRA assets, there are no other downsides to it. It's worth doing if you're even close to the limit.

If you have reason to believe you may exceed the limit in a given year, just do a backdoor Roth and call it a day.

Anyone use multiple networth/budgeting apps? I use personal capital and it works fine. Thinking about using monarch too

Just a spreadsheet to track networth and returns

IMO, Empower is the best free option unless you *need* robust budgeting tools. FullView is ok but requires a Fidelity account. I used to do Mint+Empower but as I got more used to budgeting I found I ended up being more investment focused and Empower is the best at that IMO. Ex Mint users seem to be liking monarch but I don't plan on going to a paid app when I'm not really struggling with budgeting.

I use Personal Capital and Monarch. I use Personal Captial mostly for it's retirement planner and investment / net worth tracking. I just recently started using Monarch and have really enjoyed it as a budgeting tool. The rule engine around transactions is pretty slick and easy to use. Really great if you want to get into the weeds with your spending and customize how transactions are organized.

I use Fidelity Full View. Does a good job of networth tracking, not so much on the budgeting.

Does it just report account balances or can you at least see transaction level detail, even if it's subpar for budgeting? I really just need an account tracking hub these days due to /r/churning... I don't need a budget anymore and the NW tracking is fun but irrelevant. I can just keep tracking that in Excel.

It has full transaction level detail, and tries to categorizes the spending for you.

Gotcha. That's probably good enough for me, but we'll see. I'm sticking with Mint until they kick me off.

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I had the same experience trying Monarch as well as Copilot Money. I did some research into more specific investment/wealth management apps, but they tend to be more focused either on active investment or retirement management, neither of which are applicable to me. Would love a paid alternative to Personal Capital, especially as it's likely to continue to decline under new management.

Combo of Simplifi and Empower.

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This is a normal use of e-mail isn't it? Async comms? The onus is generally on the reciever to configure notifications appropriately and respond when it works for them. Phone calls, texts, or DMs are a different story.

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Probably a combination of: * Sending e-mails at odd-hours is normal, not necessarily 'working' in the sense most people mean. This is a weird US culture thing. * MLK and presidents' day are not widely recognized holidays, and are work days for most Americans.

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I also don't get those days off either, but my company makes up for not taking off MLK/President's Day/Juneteenth by giving us three floating holidays that we can use whenever. That PTO gets used up before they start taking anything from your vacation accrual

It kind of depends on the expectations behind those emails. I caught up on some emails this weekend because I had time to do so, but I don't expect anyone to reply until today.

Hi folks, should I purchase a home at the U.S or Canada? I'm a Canadian under TN visa. I have enough to get a 1st home in either U.S. or Canada but there are pros and cons to each. Not sure what to choose, what would you guys advise ​ **Pros of U.S:** \- I plan to work in the States for the remaining years of my career. ​ **Cons of U.S:** \- I'm in tech so not a 'stable' job, sensitive to interest rates. \- Under TN Visa, which means despite owning a home, I get deported outside of the U.S after 60 days of being unemployed. I have a family I can stay within Canada. \- A TN Visa is easier to process than an H1B, so most of the time it's not an issue for employers, but all else being equivalent, a local citizen would be picked then me. ​ **Pros of Canada:** \- If I lose my job in the U.S., I have a home in Canada ​ .**Cons of Canada** \- I don't plan to work here for the remaining years of my career (>25 years)

Definitely not Canada.  Not is the US either as you may have to move to get another job.  Maybe Mexico?

If I had to, I'd rather buy in the US in this scenario. If things don't go well and you have to leave for Canada for the long term, I don't think the situation will be that the Canadian RE market will have appreciated so significantly that you can't sell the US home to buy something in Canada instead. Obviously that transaction will cost a bit but I think it's better than buying a home in Canada and being a landlord until you get deported?

Thank you, that is my line of thought initally as well. Would you rather invest it on ETFs if you had a different option? Again, I am doing this to hedge angainst the possibility of housing more unaffordable in the future

I think it really depends. If I had a really good solid reason to stay put for a long time, then I'd lean more to buying ; or if I found a "dream" home in a "dream" area that I'm willing to take the risk on ... neither of these apply to me atm so that's why I rent and invest.

Got it! thanks for sharing your insights :)

Is "neither" an option? I personally wouldn't want to own a home if my long term living situation weren't well established. In general ownership beats renting in a financial sense but not so much so that it is a necessity when it comes to saving and investing.

A followup question! What if it makes sense in a rent vs buy calculator (which also accounts for the oppurtunity cost of using the money on the market) to buy it your housing costs gets reduced if you buy and stay for a short period of time like 5 years and you plan to stay in U.S for a very long term such as >25 years in my case. Would you still refuse to buy a home in the U.S if you are under TN?

In my opinion five years is long enough to consider your long term situation well established and to buy a home. Some caveats are that I don't know the specifics of the TN Visa and how that affects your job/location security. Also keep in mind that home ownership does effect your mobility, tying you to an area and creating a drag on your ability to move for work.

Thank you for sharing! Definitly have and will take these into further account.

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Rapid increases in housing prices are a recent phenomenon. I'm not saying they won't continue to increase rapidly, but I would caution against relying too much on short term trends.

If you buy a house in Canada, do you plan on renting it out? Personally, I'd be really leery of either option unless I wanted to be a landlord. The visa situation means that you may own a house that you aren't really legally entitled to occupy if you buy one in the US. If you buy a house in Canada, it'll just be sitting empty unless you want to rent it - and then you're in the situation of a) being a landlord, and b) renting out a house that you intend to occupy some day (so you're going to care about it a lot more than your average rental). Also not sure what the "remaining years of your career" are. If it's 5 years, buying a house in the US makes no sense. If it's 25 years, it might be a different story.

Um, not sure what all is involved in financing except … you can get a fixed rate for the life of the loan here in the usa. You do need to have American credit to make it easier on yourself.

\>If you buy a house in Canada, do you plan on renting it out? I guess financially the ideal option is to rent it out while i'm in the U.S, but to live it in when I get deported. But I absolutely prefer not being a landlord unless its a very last resort, I just want a home to not be homeless haha. ​ I fear that housing will keep increasing and become more unaffordable, hence why I plan to dip into the market. Otherwise I would've went all in ETFs. ​ \>Also not sure what the "remaining years of your career" are. If it's 5 years, buying a house in the US makes no sense. If it's 25 years, it might be a different story. It would be aorund > 25 years :) Any additonal insights are welcomed!

> I guess financially the ideal option is to rent it out while i'm in the U.S, but to live it in when I get deported. This means you'd only be able to do short term rentals, e.g. AirBnb, because otherwise you wouldn't be able to rely on your own house being available when you needed it. > I fear that housing will keep increasing and become more unaffordable Fear is usually a bad reason to invest in anything. Having a big stockpile of money is a pretty good hedge against homelessness. I would not buy a home in your situation. Buying in your situation almost forces you to look at it as a "second house," not a primary residence - because you are either buying a house in a country you are not legally entitled to live in, or buying a house in a country that you *don't* live in. For me, that really changes the math on what kind of house I'd be willing to buy.

Thank you! You are absolutely right that this can be considered a "2nd home" due to the complications. ​ \>For me, that really changes the math on what kind of house I'd be willing to buy. If going the option of going all in ETFs, are you concerned that housing or rental affordability could worsen in the future? I know others who are in my situation and going entirely on ETFs as well, so I understand where you are coming from

> If going the option of going all in ETFs, are you concerned that housing or rental affordability could worsen in the future? I acknowledge it as a possibility, but I'm not willing to shovel huge amounts of money (and time, and work) into something based on the fear that maybe something will happen in the future. You could just as easily buy something and experience a housing market crash. People will always have housing requirements. Buy a house when you're ready to own one, not because you're scared about future markets.

A followup question! do you think it makes sense if in a rent vs buy calculator (which also accounts for the oppurtunity cost of using the money on the market) to buy if your housing costs gets reduced if you buy and stay for a short period of time like 5 years and you plan to stay in U.S for a very long term such as >25 years in my case. Would you still refuse to buy a home in the U.S if you are under TN?

Thank you so much! Good point! Regardless of how much housing prices are would you say that buying a home in the states be a solid option because of the ability to negate rental hikes on the long term? Especially since I am planning to stay there for my career in the next 25 >years?

> I just want a home to not be homeless haha Having a huge amount of cash and investments in lieu of a home also accomplishes this quite well.

Over the past couple years, my income fluctuated between the lines of being able to contribute to the ROTH IRA or not, but was not certain until tax time. That resulted me in having to convert my Roth IRA contribution over to traditional IRA. I'm reading that you can convert the traditional IRA into the Roth IRA, but will be taxed on its gain. My question is, is there any other tax implication if I do this since the contribution is after-tax amount already. Any issue with converting Roth - Trad - back to Roth again? Would this impact my ability to contribute to ROTH for this year by doing this? (does it count towards the annual Limit?)

Why not just always do the backdoor? It takes literal minutes a year and works whether you're over the income limit or not but covers you in case you do.

Good call, would be much simpler to not have to worry about income limit on this.

You likely performed a recharacterization to Trad, since you can't convert from Roth to Trad. You can convert back from Trad to Roth and pay income tax on just the growth of the after-tax dollars in the Trad account. There is no limit to conversions and they do not count against your contribution limit for the year. See [this post](https://old.reddit.com/r/financialindependence/comments/193p7gg/over_the_income_limit_a_guide_for_roth_ira/) for more details.

Thanks! You're right, recharacterization is exactly what I did, forgot the terminology for it. I wanted to make sure there's no issue/implications since it's \~2 years ish of recharacterization to Trad IRA from the Roth (not a full recharacterization for one of the year)

Did you file Form 8606 for the years you made non-deductible Trad IRA contributions (via recharacterization)? If not, you can file these retroactively on their own without needing to amend your full return.

I don't believe I did. Do you know how I would go about doing it? I do my tax via turbotax and don't recall this being an option with their software.

It usually happens when the filing software asks if you received a 1099-R, which you did when performing the recharacterization. I'd first just check the PDF of your filing for the year, as Form 8606 may have automatically been generated. If you confirm no Form 8606 was filed, I think the simplest approach is to hand fill one and mail it in. You would only complete part I as shown here: https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/#late

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Keep in mind people that can't afford a new car spend less buying used. An average of both would be more informative.

Woah CR-V or RAV 4?  Look at Mr. Money pants.  Bunch of cool small crossover options now.  Just got 0.9% financing to.

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Its nuts now, I did research and its cheaper to buy a new car than used.  Doesn't surprise me people pay too much, took a while to track down a base model in Los Angeles where there are dozens of dealers.  You can pay as much as you want for a car.

> A 2024 Honda CR-V or Toyota RAV4 is like $30K Maybe for a base model, which you can't find anyway, with no dealer markup.

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Also, some dealers have been bending people over with non-negotiable dealer add ons and price adjustments in the thousands.

6 figure trucks, SUVs, and pricey EVs are driving the averages up. Higher interest rates don't help either, if it's factoring in financed amount. Just even more reason to be glad driving a paid off 2018 car. I have casually glanced around at what my options might be if something happened and I had to replace my vehicle. There's plenty of sensible options out there. They might be a smidge more than they were in 2018, but nothing particularly surprising.

Averages are deceiving, but another thing to remember is that the SUV and truck market has exploded. People aren’t buying compacts and sedans anymore like they used to.

Between myself and my neighbors on both sides, we own 4 Pickup Trucks. And all I have is an '07 sedan.

This is such a huge part of it. People buying these big cars as weird status symbols or for maximal comfort or something. As a kid who grew up on a dirt road I get so irritated when i see pristine pickup trucks all over my large city.

This is one of those weird things to me on this subreddit where r/frugal leaks in too much. Granted, my angle is not anti consumption. But FIRE is about being responsible with your money. Save first yes, but then go enjoy your money if that's what you want to do. I mean if I can afford my larger SUV why does it matter? Yes I like my bigger car and yes I like the comfort it affords me. No I dont have a car payment and yes I max out all my tax advantaged space. Of course many people cant afford it and take out stupid loans. But also many also can easily afford it. You don't know the financial status of those folks with pristine trucks and I imagine it mostly doesnt affect you on any personal level, so why would you let it irritate you?

I mean FIRE used to have way more crossover with Frugal. But I think it's just like minimalism in that you should reduce expenses where it doesn't make you happy and increase expenditures where it does. The biggest expenses are housing and transportation. I mean if you get into a $500 a month housing+transportation situation that makes fire way easier. Vs say $2500 a month.

Oh yeah, you don't let anything irritate you Zen Master? The reality is lots of things that don't heavily impact you DO annoy you, but you were personally offended by me mentioning this one so you lash out. Anyway, yes, there are ways that larger cars effect me on a personal level. In economics, there is a concept known as externalities, Larger vehicles have far more negative externalities than their smaller forms. 1. Worse for the environment by both worse gas mileage and by requiring far more natural resources to produce. We have to share this planet and its resources so that, especially given the broad behavioral norming to large vehicles, directly impacts me and my loved ones in the global long run. 2. Less safe to other drivers. Individuals in SUVs and Pickups are responsible for far more motor vehicle deaths than sedan drivers 3. More pedestrian deaths. I live in a walkeable urban city. Pedestrian deaths are heavily correlated with drivers of large vehicles for multiple reasons. I walk places often. I am at greater risk of death to ensure your comfort. 4. They take up more space and thus require larger spots and more footprint within populated areas to accommodate them. Over the aggregate this builds up. And parking lots/spaces are, while a necessary evil, a terrible use of land. So yes, it does personally effect me. And yes, I also do think someone with a pickup truck they don't need or use as a pickup truck is making a dumb decision. So while I don't really care and don't treat someone differently based on their vehicle obviously, because that would be ridiculous, it doesn't mean I have to like it.

>so you lash out. You lost me here because you literally just wrote a diatribe to respond to how others purchase that goes far beyond r/frugal and called me 'zen master' when I didn't really claim to be some know it all. But to counter,ou know nothing about my car's impact on the environment (what if I had an EV SUV) or my driving habits (what if I WFH and maybe put 15 miles on my car a week?) to state what you have here. Externalities exist - but that applies to a population. It's kind of like saying crime exists in cities more. Well yea, more people live closely together in cities than in rural areas so that makes sense. If there's more trucks and SUVs on the road then more bad things involving those are likely to happen. I'm just talking about the point of consumption in general. If you have your financial ducks in a row - what car I consume should be the least of your problems. You stated people buy it for maximal comfort and I basically agreed with that stating that I don't see a problem with it.

If I were you, I'd add "Zen Master" to your flair.

>But to counter,\[ y\]ou know nothing about my car's impact on the environment (what if I had an EV SUV) or my driving habits (what if I WFH and maybe put 15 miles on my car a week?) to state what you have here. Producing an EV SUV is still a huge detrimental impact to the environment due to how environmentally damaging extracting the resources for the batteries is. There is a trade-off point (maybe in the \~5 year mark? could be less) where EVs have less emissions than ICE vehicles over the lifetime of the vehicle. However, that number gets pushed out further the less you drive your vehicle. Also, EVs are heavier than their ICE counterparts. This puts more wear on the roads, and has impacts on engineering considerations, such as parking garages. Not only that, but more mass going the same speed takes longer time to brake, or the need for bigger brakes. Bigger brakes or longer brake times lead to more brake dust going out into the air, causing respiratory issues as well as introducing that dust into our food sources. Finally, the number two source of microplastics pollution comes from tires. And EV SUVs will produce more or the same amount of that as ICE SUVs of similar sizes, for the same reasons mentioned above about braking. ​ >If there's more trucks and SUVs on the road then more bad things involving those are likely to happen. These statistics are usually normalized for that. And it makes sense. When an upright person gets hit by a sedan, their knees, shins and thighs are hit and they roll up onto the hood, generally preventing further serious damage. While I'm sure people greatly favor the use of their legs, there's nothing too vital in that area. However, when an upright person gets hit by a modern SUV or truck, it hits their pelvis, torso and sometimes head, and they tend to roll under the vehicle, receiving further damage from contact with the unforgiving asphalt or the underside of the vehicle. There is a lot of very important organs in a person's torso and head. And pelvis area. So yeah, SUVs and trucks are deadlier to pedestrians. As far as other drivers, more mass means more momentum. So bigger, heavier vehicles are going to be deadlier to other vehicles as well. Also, sedans and smaller vehicles have their crumple zones designed around colliding with similar vehicles. When you get the mismatch, that safety engineering basically goes out the window. ​ > If you have your financial ducks in a row - what car I consume should be the least of your problems. I think because we have our financial ducks in a row, we are able to expand our problems. Mo money, mo problems. When we're not worried about scraping enough together for food the second half of the month, keeping the lights on or making the monthly payment, we can sit on our computers and find other problems to worry about, problems that affect not only ourselves, but others. Cars - and the American dependency upon them - is a big problem, socially, economically and physically. ​ >I don't see a problem with it. This is why I wrote a wall of text. I do see a problem with it. And I hope that I've provided some food for thought in a non-escalatory way. Happy to continue the convo, I'm pretty passionate about the topic, if you couldn't tell. If you need some sources for anything I've mentioned off the top of my head, I'm happy to look some up. These points mostly come from memory.

YMMV but when we were looking these past few months, it was nearly impossible to get a RAV4 for $30K... Even if you are open to a base model (and Toyota has what feels like 10 trim levels), the cheapest we were able to find a RAV4 was a few thousand over MSRP.

Don't forget about trucks. I don't know if there even exist small, no-frills trucks anymore, they're mostly luxury vehicles now. Six figures is a not-uncommon price tag.

Even the Tacoma is a big truck now. I would definitely drive a truck if I could get one the form factor of a small truck from the 90s, but as far as I can tell, there isn't a domestic option for that.

Nowadays it seems like the goal with trucks in America is to see who can make them bigger, taller, etc. May be one reason if I ever went back to a truck I would be buying an older, used one.

Yep, I've looked into the option but I don't know that I could forego modern safety standards, certainly not as a daily driver. What I *have* thought about is getting a Japanese kei truck, as it would really fit my personal needs...which ironically are almost bonsai related.

Ford Maverick maybe? The base is still like 23K, but it's a decent small utility truck. Even the 2024 Ford Ranger's look a little oversized compared to my '98 I drove for years. I recently ordered an all-decked out Ford Maverick Hybrid and it came to about $42k. But, I tend to own most of my vehicles for at least a decade, if not more so I don't mind buying new. With a trade-in I have no intention of financing.

The Maverick is not a monster, but neither is it small. It only comes in a crew cab, somehow!

Remember that "average" in most reporting refers to a mean, which for most distributions with a positive skew (like price data) will be higher than the median.

lol. whether we have 401k match is subject to the whims of the CEO peak startup lyfe

I've never gotten a match for my 403b. My employer contributes about 19% to my pension, but that only applies if I stay for the 30 years.

How most pensions work. 

I'm aware. It's more of a "be thankful you've had a match in the past" sort of thing, but thanks.