How to get poverty & accumulate wealth and freedom

[daisy83]

@ilovegod888 Dont you understand im 39 years old. Not 21 or 22 year old.

 

[eriksun]

@daisy83 I don’t give a fuck about your age, you have $51k in the bank.

 

[clolou]

@daisy83 So the general definition of poverty is someone who can't afford food, housing, healthcare, utilities, and transportation at the same time. People in poverty bounce around buying the basics, constantly choosing to sacrifice a needed essential for a more urgent needed essential.
Someone living paycheck to paycheck is able to afford the essentials but can't afford an emergency (like a car break down), because their savings are less then that amount. They can't save.
Someone doing economically okay can afford to save.
Your situation is above these three things. I highly recommend the advice of asking a personal finance Reddit.

 

[sandman134]

@daisy83 This is quite well off, certainly above average, this is absolutely not the sub for you.

That said, you should probably invest most of those savings, you're being extremely conservative. Idk the value of your house, but since you're in Auckland i imagine the market could cut in half, you could take out 50k on the mortgage for some emergency, and you'd still have 100k+ of equity to tap into.

You can put at least 50% of those savings in liquid assets like index funds, and you'll have a way higher average return, while still being able to spend them at any time.

 

[daisy83]

@sandman134 How will this work? I'll still have to pay interest on the 50k if i take out another top-up mortgage? My goal has always been simple but maybe I'm doing it the wrong way? Basically, no investing, no more large purchases, no toys UNTIL Raining day and Emergency funds targets are reached.

 

[sandman134]

@daisy83 Yeah you would, but the house roughly offsets the interest by generating rental income (or equivalently, not having to pay rent).

The point is, your net worth is quite high, and you really don't have to worry about such a big rainy day fund, 10-20k would be fine. Also, you have been investing for a long time, just in housing rather than stocks.

But like, being conservative is fine too tbh. It means you have almost no chance of failure, but it means you'll be slightly less rich in the long run.

 

[daisy83]

@sandman134 Thanks ,dude. I'll call the bank and havea look into it.

 

[mihai_1991]

@daisy83 Why are you posting here when you own a house? Wrong sub

 

[ilovegod888]

@mihai_1991 I've seen a few posts on this sub from people larping as poor since it's become a bit more popular. This feels like such a weird thing to gatekeep but fuck it, it's a hill I'm willing to die on. If you own a house, if you are able to put savings away every week and not have to dig into it regularly just to pay rent or buy essentials, you are not poor.

 

[memneso]

@daisy83 All I would suggest is that you don't need a rainy day fund and an emergency fund. They are one in the same. I'd also suggest that your emergency fund doesn't have to be that large. Because if you find yourself needing to use it, you go into economy mode and really live on a bare bones budget. How likely is it you would actually need it for a full 12 months? Income protection insurance and TPD/Life insurance have their part to play here.

Commonly a lot of people use a revolving credit or offset facility for there emergency fund which looks like it would work quite well in your situation.

Continue to optimize your expenditure and invest into diversified ETFs. Is basically the fundamentals of the Fire movement, it's a plan for success.

 

[melissauk]

@daisy83 yes good plan

 

[daisy83]

@melissauk Do you follow similar plan?

 

[melissauk]

@daisy83 Yeah pretty much i do a 70/20/10 budget. 70% mortgage/living costs 20% investments and 10% holiday

Make sure i have a fully paid 3or6mth emergency fund

 

[daisy83]

@melissauk Your mortgage is very high! are you in Auckland?

 

[melissauk]

@daisy83 Yes Mortgage is roughly about 40% we overpay it a little bit. Sorry the 70% included mortgage plus living costs

 

[solochristo65]

@daisy83 Get rid of the cars and buy cheaper second hand off payments, that’ll get you to your savings goals faster and pay down principal on house until you’re debt free. Only when you’re debt free can you start to accumulate true financial freedom.
Depending on your income you can knock out $150k pretty quickly if you discipline yourself and put all your excess income into it.
Then the rest is investing, giving & enjoying life.

 

[john185]

@daisy83 Some believe that Bitcoin is an excellent store of wealth as our money continues to lose it's value. If you have interest in that, I'd recommend learning about it first. Lyn Alden talks a lot about how broken the financial system is, and people like Saifedean Ammous, and Michael Saylor speak about Bitcoin. There are debates on Youtube too so you can get different views. "The bitcoin standard" is a really good read on the subject.

 

[daisy83]

@john185 Will Bitcoin go above $100k USD? if so, when?

 

[otruitt]

@daisy83 This is insulting af, what on actual earth

 

[banchocanh]

@daisy83 Hey bro. You are doing great!

I personally have a green blue orange red budget.

Green, I'm saving above my minimum n I have 6 months expenses back up,

Blue, I don't have 6 months expenses savings at my green level. So I don't spend on toys clothes etc.

Orange, I have less than 6 months at blue spending level. So I down size expenses. Cheap food, bus n no taxi, walk if I can, prep drink for town, slower Internet, scooter.

Red, no going out until I have 4 months of orange. No bars, no restaurants. (birthdays I turn up for dessert and have a glass of wine)

There is black, where I get a second job.

If ur land is big enough, build a rental on the back, they normally pay it self off in 11 years. Then u have 500 a week bonus.

Investments just need to provide a residual income.

Good luck.