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How much is enough to FIRE in San Francisco?

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Re: How much is enough to FIRE in San Francisco?

#101

Post by dataflow »

gotaran wrote: post #12
dataflow wrote: post #4

Doesn't this depend heavily on inflation? With the ballooning US debt, how do people imagine the government will continue to pay interest without massive inflation in a few decades?

The 4% rule accounts for inflation. The stock market on an average gives you 7% a year in returns adjusted for inflation. The 4% gives you enough cushion in case of economic turmoil.

> The 4% rule accounts for inflation

"Accounts" wrongly, though? 4% inflation for the next half-century seems like complete fantasy. How do you imagine it possibly being sufficient to address the ballooning debt?

Re: How much is enough to FIRE in San Francisco?

#102

Post by its_ethan »

AnimalMuppet wrote: post #69
its_ethan wrote: post #61

Earlier quoted context omitted.

Why is it such a crazy assumption? Going back to like 1870 a $SPY equivalent has yielded something like 8-10% on average if you reinvest dividends. In that time there have been two world wars, a handful of pandemics, election turmoil (oversea and aboard), many bubbles in tech and housing, and yet the long term average was 8%+. FWIW there have always been and will always be spelling financial doom right around the cor…

Let's say you didn't invest in the US stock market, because you lived in, say, Japan. How did the Japanese stock market do since 1870? Pretty well, except for that part in 1945 when it went to approximately zero. Ditto Germany in 1945. Ditto Russia in 1918. Ditto China in 1949. Is the US going to be the US of history for the next 50 years? Or is it going to be one of Japan, Germany, China, or Russia? Or is it just go…

"Better be weary of making financial assumptions because you may end up on the losing side of a world war and then it will all be for naught" isn't very useful thinking imo

If you think America (or wherever you live) is going to end up like Germany in 1945, or Russia in 1918, then it won't matter in the slightest what you've invested in anyway - you plus everyone around you will be in the same (half underwater) boat.

"Ditto" for if $SPY suddenly tanks or underperforms. There are going to be much more immediate concerns for everyone if that happens.

Re: How much is enough to FIRE in San Francisco?

#103

Post by subsubzero »

pc86 wrote: post #89
subsubzero wrote: post #71

A few things you can do to reduce costs, my family does this and hope it helps others. - Gardening/yardwork - We do all this ourselves, its exercise and gets you outside, plus you have made something better in the physical world(I work in software so get extreme satisfaction from this!): savings per month/year ($240/$2880) - Cleaning - We also do not have cleaners, our house is not particularly messy and we clean as…

Non-project landscaping in my nondescript midwest suburb is a minimum $600-800/mo. This is one mulch application, weekly mowing, biweekly weeding, pruning / cleanup on a half-acre lot with no difficult terrain and a generous back patio. It's a big part of why we just do it ourselves, it's hard to justify $7-10k or more on someone mowing the grass and getting rid of sticks.

yeah my numbers were more focused towards smaller yards that alot of folks have in the sf bay area. For me I am on 1/3 acre in Colorado with about 33% of it grass, it takes about 30-40 mins to mow and edge it and after I fixed the dead patches with easy seed etc it just sort of takes care of itself. I think we were quoted $125 a visit(weekly) so $500 a month. I have so many better things to do with that money than spend it on landscapers. And agree with your decision as well, that is alot saved!

Re: How much is enough to FIRE in San Francisco?

#104

Post by ta988 »

asdfman123 wrote: post #59

I've spent years thinking about and pursuing early retirement. My thoughts: 1) You should never stop working. Humans need purpose . It may be worthwhile to think of it instead as saving money so you can transition to a more meaningful job . Maybe one that doesn't pay anything at all, like child rearing, or volunteering. This conclusion implies that if you CAN already do something meaningful, it's probably better to d…

Single data point: Pretty much every FIRE that I met regreted bitterly leaving the workforce and went back working (most often to do something different that they found more fulfilling like starting their own company burning all their saving, buying a farm, restaurants..).

Re: How much is enough to FIRE in San Francisco?

#105

Post by generic92034 »

creer wrote: post #76
generic92034 wrote: post #13

Earlier quoted context omitted.

The same as always? Pay old debt with new debt. Other countries might run into issues with exchange rates this way, but the status of the USD is dampening such effects.

Even assuming there are always people, institutions and countries eager to buy the new debt, the government must still pay the ongoing interest on the debt. The concern is when that interest becomes a significant part of the annual budget. Then there is no money left to pay for the essentials - like, /s - government workers' salaries and retirement and military.

You can pay the ongoing interest with more debt. Sure, this will probably not work forever, not even for the USA and the special status its currency has. But "forever" is usually not a relevant concept for politicians.

Re: How much is enough to FIRE in San Francisco?

#106

Post by generic92034 »

the_real_cher wrote: post #32
generic92034 wrote: post #13

Earlier quoted context omitted.

The same as always? Pay old debt with new debt. Other countries might run into issues with exchange rates this way, but the status of the USD is dampening such effects.

how long can you do that for?

Most countries in the West are doing that at least since WW2. To different degrees, though.

Re: How much is enough to FIRE in San Francisco?

#107

Post by coryrc »

pc86 wrote: post #99
olliej wrote: post #67

Earlier quoted context omitted.

Businesses in CA got people to vote for prop13 in the 70s I think (the propaganda justifying it was essentially “the Supreme Court said your property taxes have to pay for the same quality of education for poor people”, but the actual reason is a massive tax cut for corporations as they never actually sell property so get a permanent cut to property taxes). It basically says “unless a property changes ownership the t…

It's interesting that in your example, your specific situation would still have tax rates subsidized by your neighbors while the people you consider the out-group (corporations, landlords) get minimal or no benefit from it. I'm also not convinced corporations are getting any outsized benefit, business buy and sell real estate all the time. The fix doesn't seem complicated. Assess a home's value. Tax it. If you're con…

You could delay the tax collection above a certain amount until sale of the property. But I'm against allowing people to sit on valuable property while contributing little back to society. Get a reverse mortgage or move out.

Re: How much is enough to FIRE in San Francisco?

#108

Post by the_real_cher »

generic92034 wrote: post #106
the_real_cher wrote: post #32

Earlier quoted context omitted.

how long can you do that for?

Most countries in the West are doing that at least since WW2. To different degrees, though.

> To different degrees, though.

There's quantifiable data on this and it's looking problematic as of now.

Re: How much is enough to FIRE in San Francisco?

#109

Post by 1024core »

briffle wrote: post #73
koolba wrote: post #33

Earlier quoted context omitted.

CA assessed value for property tax calculations is capped at 2% growth per year. So if you bought a house in the 1970s you’re never selling that thing as the tax hit on any new property annually would be much more. If anything, you keep the property, rent it out, and never do any major renovation that would trigger a full reassessment.

Oregon passed a ballot measure in the early 90's that is essentially the same. A mile away I have a literal mansion that is on the market for $8m. looking up the property taxes, the house has been owned by a trust since the late 80's, and they pay less in property taxes on the mansion and 15 acres than I do for my regular house in the suburbs.. I'm don't know them, but have heard its the kids that live in the house n…

If you have some time to kill, this site: https://www.officialdata.org/ca-property-tax/#37.76919241859...

will show you your neighborhood's property taxes (Cali only, I think).

You will find neighborhoods where one owner is paying $30000/year

Re: How much is enough to FIRE in San Francisco?

#110

Post by pc86 »

coryrc wrote: post #107
pc86 wrote: post #99

Earlier quoted context omitted.

It's interesting that in your example, your specific situation would still have tax rates subsidized by your neighbors while the people you consider the out-group (corporations, landlords) get minimal or no benefit from it. I'm also not convinced corporations are getting any outsized benefit, business buy and sell real estate all the time. The fix doesn't seem complicated. Assess a home's value. Tax it. If you're con…

You could delay the tax collection above a certain amount until sale of the property. But I'm against allowing people to sit on valuable property while contributing little back to society. Get a reverse mortgage or move out.

Delaying the collection has weird side effects and edge cases where if you hold on to the property long enough you could get into a position where you will actually lose money selling it, or worse yet even have to write a check to the government when you sell your house.

I would agree in general that if you can't afford the market-rate property taxes on your home, you should move. And stuff like Prop 13 just makes your neighbors subsidize you.

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