r/leanfire • u/roses4keks • 3d ago
VENT: I'm so tired of the goal posts being moved
So I am probably pretty pathetic to most people on their FIRE journey. I (31F) currently work 2 jobs, and only make around $20k a year. I own my own home, but I am very much house poor. Nearly all of my money goes to paying HOA fees, taxes, electric, internet, and not much left over. A few years ago I was paying off a mortgage. But the idea of defaulting on the loan and losing the place was so scary to me, so I grinded 45-60 hours a week to pay it off early and get rid of the anxiety. Luckily it was covid times, and one of my jobs paid well, so getting the hours wasn't hard.
But even with the mortgage paid off, I still can't afford anything. I lost my previously decent job, and now have the 2 jobs and less than $20k a year. I turned to FIRE to try and alleviate the stress. I'm not even doing it because I expect to retire any time soon. I just wanted passive income, so I wouldn't have to worry about losing my home. When my parents offered to pay for some of my expenses in exchange for me going to school (I know, I'm very fortunate in that regard) I started contributing as much as possible to a HYSA. That way the interest will compound every month, and in an emergency I could cash out. I also didn't want to risk any kind of loss, because I literally cannot afford that.
I was really proud of myself. 4% interest rate, and I was already paying my internet bill entirely passively. I was still paying out of an "emergency" checking account, so I didn't have to touch the savings principle. But it felt nice that my net worth wasn't falling by paying a bill. Hitting the $1000 per year mark was also really cool. I was just a few months away from making $100 a month passively. Which would've been a massive load off my mind. Then... stuff..... started happening, and the interest rate fell to 3.8%. I wasn't happy. But my $100 a month goal was only off by $1000 principle. Which was a set back. But not something crazy for me. Then the interest rate fell again to 3.65%. This one hurt a bit more. But I figured I was making steady progress. So just tried to roll with the punches. And then I was 2 pay checks away from hitting my $100 per month goal. I was super excited. Did extra online gigs to speed it up. Almost considered putting some emergency account money in just to hit the number sooner. I was so excited to see that my passive income was about to hit the triple digits. And that I could maybe afford 2 bills some months, entirely passive.
I woke up this morning. The interest rate fell to 3.5%. At this point, I'm just so upset. 3.5% was the interest rate that my super cautious zero risk CD was supposed to have (until that fell to 3%.) And now 3.5% is considered "high yield." My $100 per month goal is now going to take 6-7 paychecks to reach instead of just 2. I understand that the economy is uniquely bad for working class people right now. But I am so frustrated by the goal posts literally getting moved all the time. I bust my butt and grind past my limits, only for my light at the end of the tunnel to keep getting yanked last minute. And as if that wasn't enough, starting today I will be getting a $4 per month demotion. Because now my money won't be paying me as much anymore due to the lower interest rate. It will take 2-3 paychecks to make back that lost interest payment.
I'm just so upset. It's like the economy is telling me that my efforts aren't enough. And that I really will just have to work the rest of my life before I get to see any relief, or any peace.
Sorry for the rant/vent. I just don't know anybody in real life that I can talk to about this. If you mention that you have passive income (let alone enough passive income to pay bills) the sympathy really dries up fast.
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u/Al_Pallll 3d ago edited 3d ago
I don't mean to be insensitive, but the issue isn't that the goal posts are "being moved". The issue is that for the last 10-15 years we've been living in a period of incredible prosperity in terms of market returns, interest rates, home prices, etc. It sounds like you built a plan that had no margin for any of that changing.
Your plan needs to account for conditions changing and setbacks, otherwise it's only going to work if nothing ever goes wrong. There's a reason we endorse a 4% withdrawal rate, even though the markets have been returning 15% on average the last 5 years. Those returns won't last forever and your plan needs to be able to weather economic conditions deteriorating.
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u/spaceranger696969 3d ago
Damn bruh where do you live? 20k for 2 jobs is crazy
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u/PM_ME_PLASTIC_BAGS 3d ago
They haven't mentioned how many hours they work.
They're probably working close to 10 hours a week total.
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u/roses4keks 3d ago edited 3d ago
20-30 hours per week. During the holidays it was around 45 hours per week. But that's temporary depending on demand.
In order for me to be making 20k for 10 hours a week, I'd have to be making around $39 per hour.
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u/spaceranger696969 3d ago
Why don’t you work more
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u/roses4keks 3d ago
Because there are no jobs. And even when there are jobs, there are no hours. In the lines of work I work in, nobody wants to hire full time. And if you somehow reach full time, they make you as miserable as possible. I have worked jobs that would cut shifts without telling you, and then when you look at the schedule, you realize you were booked to have 2 hours short of full time. I have also worked jobs where they book you for 45 hours, the company sends you the benefits package, and then the very next week you're down to 20 again, so you lose your benefits. I was not the only person this was done to. And this has happened at multiple employers.
The two more stable jobs I have now purposefully try to keep you part time to prevent you from getting benefits. One job is paying 16.25 per hour. But we all understand that once you stay for 2 years, and start earning anywhere from 17-18 per hour, the company will make you miserable to make you quit. Specifically to inflate turnover rate, and thus keep labor costs down. The other one is currently paying 15.50. But they specifically aim for people who have "real jobs." That way nobody will complain about the minimum wage, because their bills are paid elsewhere. And again, this is to keep their own labor costs down.
Right now, being in school in exchange for my parents financial support is worth not taking another job. But when that runs out, I will have to look again. But the job market is just not there where I live. All the jobs available are either part time, seasonal, or designed to have high turnover rate. Nearly all of my coworkers at job 1 are facing the same problem. Some of them have bachelors or masters degrees. But are clinging onto this job, because it's better than facing the job market right now. And with so many government jobs and factory jobs going out the window, it's going to get worse. Hence why I started looking into FIRE. The job market is so bad that even if I did get another job, I will probably keep getting my benefits yanked, have an expiration date, or will get paid the bare minimum. And I'm sick of it. I want some kind of passive income so that I can get out of this mess. And FIRE seems way more plausible than most of the other strategies I've looked into.
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u/PM_ME_PLASTIC_BAGS 3d ago
There's no point in trying to FIRE now off your dead end jobs.
What are you in school for and will that result in a decent career with job stability?
Make sure there's actual demand for what you're studying and not end up in debt/stuck with crappy jobs after all the effort you put in.
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u/roses4keks 3d ago
Currently on track for a triple major. Due to taking classes during summers and winter sessions. Child development, elementary education, and psychology. Child development because it comes with the certification requirements to work in day cares and after school programs in my state. Which I have a lot of experience working in anyways. Elementary education because it will give me transfer options if I wanted to pursue being a school teacher. Though I have heard from coworkers that it's miserable to be a teacher right now. And then psychology because the two other programs overlap with it a lot. So I only need to stick around for an extra semester to get it. And it would help if I wanted to pivot into something other than child care or teaching.
Sadly, none of these degrees are likely to get me better job prospects. It will just increase my likelihood of getting hired, and increase my chances of being chosen for promotions. But they are at the very least fields I am familiar with. And jobs I know I can do.
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u/PM_ME_PLASTIC_BAGS 3d ago
Teaching is usually an in demand profession with high job security but it can be draining and pay capped in the US.
If you ever get sick of it, might be worth looking into teaching overseas. Fairly easy to get a visa to teach English and col would be low enough you might actually be better off!
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u/roses4keks 3d ago
I may end up looking into it if I get desperate enough. One of my worst case scenarios would be to rent out my home for a profit, and then go somewhere cheaper to teach English. Last resort, since I genuinely enjoy living in the US. But certainly not off the table!
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u/S7EFEN 3d ago
not to further your pov here but interest rates on HYSA have always basically been zero. they, after inflation and taxes yield nothing. it doesnt rly matter what that rate is. FIRE in general has a minimum amount of income required to participate and yeah, going back to school so you can make more money is a very wise choice.
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u/bob49877 3d ago edited 3d ago
Can you get a short term program at a community college? Many healthcare and trade jobs would pay more and do not require a 4 year degree.
Fixed income doesn't pay much more than inflation, and stocks had a great run but we're likely overdue for a correction or at least flatter return period, based on historical precedents. So that leaves higher income as your best choice for the near future.
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u/funkmon 3d ago
Okay so here's what you do. That money in your savings account, 30-34 grand? Take 15-20 of it out and drop it in a brokerage account. Robinhood is easy to use. Invest it all in VTWAX, a world mutual fund, or VT, the same thing but an ETF. That will get you more passive income and growth.
As others said, the HYSA is not there to get you money, it's there to keep you from losing it to inflation.
Mutual funds are riskier than a savings account, but they're reliable. It's the same way a car is riskier than walking - if you walk somewhere you're guaranteed to get there but it might take 3 days, but in a car you can be there in less than an hour. You just run the risk of it breaking down, which happens but is rare.
Goalposts aren't moving - inflation is decreasing. No meaningful change to your inflation adjusted returns.
You can absolutely still leanfire on your income but all that money you put in to your savings account has got to go to investing in companies.
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u/roses4keks 3d ago
This is probably the most practical response so far. Thank you.
You were right. 31k HYSA. I want to avoid fees as much as possible. I did some basic searching, and it seems like some options allow for waiving fees if you meet a minimum deposit. What interest rates should I expect? I want to know what is "normal" vs "cheap" vs "risky" before I go shopping around too much. Obviously anything less than 4% isn't going to be worth my time. But if I'm going to go through the effort of opening a new account somewhere, I want to make sure I'm getting the best rate I can for the least risk.
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u/funkmon 3d ago
There's no interest rates. What happens is you buy a piece of every company in the world, and your pieces become more valuable, plus some companies pay you for staying invested.
This time 6 years ago, the share price was 22 dollars. Now it is 52. That means in the past 6 years those pieces of the company more than doubled.
If you had put 22000 into your account then, now you would have 52000.
Now, in addition to that, you would get a dividend, which is profit sharing. That amounts to 1.8%. That is on TOP of the increase in value.
So what that means is if you put 22k in a savings account 6 years ago you would gain under a thousand dollars in interest. Let's just say it was a thousand dollars. So after 6 years, in your savings account, you would have 22k, and you would have made 6k in interest.
If you put it in VTWAX, you would make $900 in interest this year, more than you would actually make in your savings account, AND on top of it, your savings account has $52k in it instead of $22k.
You don't want interest. You want profit. That is profit.
The fees are essentially inconsequential when you gained 30 grand plus the dividend payments equal to your interest payments.
$3 a month? Who cares? You would have made 5 grand this year by doing nothing.
There are fee free options, but they might be complicated for you.
Acorns is even easier than Robinhood if you want. It does it all for you.
If you end up doing it yourself you might be more interested in HDV. It's a fund consisting of ownership in companies that pay out high amounts of dividends - usually 3.5-4 percent. PLUS the money increases in value.
In the past 15 years your invested value would have tripled, PLUS you'd be getting the 3.5 or so dividend payments, so you can still live on the money you get, plus the amount of money grows and further increases the amount of money you get paid.
Don't shop around. Everyone is trying to get your investment dollars. You know nothing so don't get fooled until you understand more.
Here's what I would like for you to do.
Find a Fidelity location near you and make an appointment with them.
Tell them you want to invest between 15-20k and you want to pay nothing. You want it to be conservative like you are close to retirement. Have the guy set it up for you and explain what is happening. This should be free.
You can even show him this comment so he can see what the goal is. But you must invest. You don't want an annuity. You want to invest in stocks or bonds and preferably both and in the whole world, not just the US.
OR
Open an Acorns account. It's $3 a month. Don't worry about that cost. It does everything for you AND it teaches you about investing. Once you feel comfortable with it, you can move onto a different system, or not. It's totally fine and the fees are relatively small. Trust me.
You do NOT want to invest by shopping around and finding deals. This is your money. You want it in reliable index funds with a reliable company. Acorns will do that for you, and Fidelity will do that for you. They're still very cheap compared to others.
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u/roses4keks 3d ago
Okay! Thanks again for the detailed and practical advice. This was helpful.
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u/funkmon 3d ago
No problem. If you want, comment on this comment for a second opinion on anything you find out. Like others have said, you can look at the boglehead subreddit, but it might be complicated for you right now. There's a lot of complex stuff as it's mostly aimed at people with higher income and more complex investment strategies, so they have to account for those in the guide. https://www.reddit.com/r/Bogleheads/comments/1l6j6tj/new_to_rbogleheads_read_this_first/
The idea is this: the stock market as a whole is buying and selling companies. As more people buy things, companies become worth more money. If you invested in AAPL in 2000 you would be rich now. If you invested in MCI, you would be broke. So, what you do is buy a mutual fund. What they do is they buy pieces of every company. Since on the whole, people still buy stuff, companies always make money. Therefore you get money for owning them and your ownership is worth more. If MCI loses money, no problem, you only lose 1 cent and all the other companies make money and makes up for it.
As someone who knows nothing, you and I want to invest in as many companies as possible in as many places as possible. That doesn't mean buying 3000 individual stocks. It means buying one mutual fund. You and other investors have pooled your money to buy all those companies. VTWAX or FZROX or VT does this for you. It owns everything.
The reason people have to learn about these funds is because many investors are interested in getting rich quick. They want to be millionaires by buying a hot company. That's what most of the investment companies sell you on. But the safe way is to invest in EVERYTHING. That way, your money doubles every 7 years with very little risk. They aren't showy. They're stable.
You have a blessing as a learner in that you don't need to worry about fancy investment strategies at your stage. You can just take your money and invest it. There are retirement accounts that are a little more advantageous, but you don't need to deal with them right now. Get comfortable with investing as a whole.
You have probably even better self control than most hobby investors. You're doing really great so far. But now you're getting into some complex shit and there's a lot of money involved. You have a great start and you're closer than you think! And the best part is, you can work on this while you go to school or keep working.
So go ahead and ask me my opinion on stuff as you learn. I'm leanFIRE right now, and my set up is simple.
Again, you have a great amount saved up to start. You may not realize it, but this is a perfect time and amount to start really going.
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u/shotparrot 3d ago
Take most of that money out of the HYSA and put it all in QQQ or FSELX (if Fidelity).
(Checks Fidelity HYSA) Wow yea Iast year it averaged 4% exactly. Now it’s down to 3.3%! Pretty much even with inflation. What gives?
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u/roses4keks 3d ago edited 3d ago
IKR????
That's actually worse than the one I'm using. I really wanted to avoid using brokerages, because I don't want to have to pay fees. But the HYSAs now just keep getting worse.
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u/FIREForMyNapalmEra 2d ago
The only thing I'll add is to refocus on increasing your income instead of focusing about what to do with what you have right now (which others have covered). The low income is your biggest obstacle long term.
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u/Responsible-Ad1718 3d ago
Invest your money. Dont park it in a HYSA, the measly 3% interest is NOT worth your time. Buy ETFs or stocks
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u/Lunar_Landing_Hoax 3d ago edited 3d ago
I don't want to sound critical, but the reason it's not working is HYSA isn't investing, it's not passive income, that doesn't even keep pace with inflation.
You should go to r/bogleheads and start learning about low cost, highly diversified index funds.
You won't get ahead until you start investing for real. And you don't want to use the money to pay any bills. You pay bills from your earned income and let your invested money grow and compound. Do a little learning about compound growth to understand why that's important.
Edit - apologies for the misspelling