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The Financial Fitness Thread

Westy

the teste
Nov 22, 2002
41,403
7,528
Sleazattle
Man, that's pretty nice. Our health plan is decent - we have a high deductible plan, but the company directly funds half of the deductible into our HSAs every year. So if your healthcare costs are low or fall into the preventative category, the HSA contribution is just free money.

That said, the whole healthcare/insurance system is total fucking insanity, so I'd rather have a plan that just covers everything.
It is nice not having to worry about anything.
 

Adventurous

Starshine Bro
Mar 19, 2014
6,001
3,307
Crawlorado
Man, that's pretty nice. Our health plan is decent - we have a high deductible plan, but the company directly funds half of the deductible into our HSAs every year. So if your healthcare costs are low or fall into the preventative category, the HSA contribution is just free money.

That said, the whole healthcare/insurance system is total fucking insanity, so I'd rather have a plan that just covers everything.
Right? I think that's one of the biggest plusses of universal healthcare. You need care, you go get care. No deductibles, in/out of network, or hidden costs that you as a consumer have no insight into. No advanced knowledge of healthcare policy required to interpret the benefits of your policy. No additional stress, in an age where everything is becoming more involved and stressful. That alone is worth whatever the cost is.

Anyway, similar boat for me. Company chips in half the deductible on the HDHP plans. The privilege still costs $330/mo for two relatively healthy people.
 

6thElement

Schrodinger's Immigrant
Jul 29, 2008
7,109
4,176
Right? I think that's one of the biggest plusses of universal healthcare. You need care, you go get care. No deductibles, in/out of network, or hidden costs that you as a consumer have no insight into. No advanced knowledge of healthcare policy required to interpret the benefits of your policy. No additional stress, in an age where everything is becoming more involved and stressful. That alone is worth whatever the cost is.
Correct. It's probably my main concern for latter life being in the US versus the UK.

That's if I've survived the 2021 election war, COVID-SA-20 and the imminent lack of potable water and hospitable planet :)
 

rideit

Bob the Builder
Aug 24, 2004
11,739
4,113
In the cleavage of the Tetons
Correct. It's probably my main concern for latter life being in the US versus the UK.

That's if I've survived the 2021 election war, COVID-SA-20 and the imminent lack of potable water and hospitable planet :)
Well, at least you aren’t a breeder (that you know of), so you don’t have to worry about all of that shit for them...
 

binary visions

The voice of reason
Jun 13, 2002
21,804
688
NC
Up until they did away with it, I always picked our (more expensive) comprehensive plan. It was not efficient; Jenn and I are young and healthy with no medications, and I probably missed out on a few thousand bucks worth of HSA contributions by opting for the HDHP.

But I really just don't want to think about my healthcare. I don't want to wonder if I should just go to the ER, or whether some specialist is going to cost a fortune.

Jenn found out that her father's heart condition has a genetic link and that she and her brother should get screened. A screening for a genetic heart condition for which she has a family history cost nearly $3k. It's not "preventative care" even though it's literally a preventative screening for a condition that could otherwise result in a heart attack.

My sister makes a livable wage. She can pay all of her bills and get by, but it's costing her $300/month just to have an insurance plan with a $6000 deductible. If she gets into a situation where she actually needs to use the insurance, it's going to wipe out her savings account, but it's awfully hard to build savings when that $300/month is most of her excess income.

It's madness. It makes me really angry.
 

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
32,617
7,156
Riding the baggage carousel.
Up until they did away with it, I always picked our (more expensive) comprehensive plan. It was not efficient; Jenn and I are young and healthy with no medications, and I probably missed out on a few thousand bucks worth of HSA contributions by opting for the HDHP.

But I really just don't want to think about my healthcare. I don't want to wonder if I should just go to the ER, or whether some specialist is going to cost a fortune.

Jenn found out that her father's heart condition has a genetic link and that she and her brother should get screened. A screening for a genetic heart condition for which she has a family history cost nearly $3k. It's not "preventative care" even though it's literally a preventative screening for a condition that could otherwise result in a heart attack.

My sister makes a livable wage. She can pay all of her bills and get by, but it's costing her $300/month just to have an insurance plan with a $6000 deductible. If she gets into a situation where she actually needs to use the insurance, it's going to wipe out her savings account, but it's awfully hard to build savings when that $300/month is most of her excess income.

It's madness. It makes me really angry.
Shockingly, a comprehensive plan is still (for now at least) an option here. I continue to choose it for all the reasons you list above. When I got hit in 07, my initial hospital stay that billed for just slightly under $750,000, cost me out of pocket, $200. While what's offered these days isn't nearly that good, I still find the "not thinking about it" aspect worth the additional costs. Especially as we get older and health problems of various types begin to present themselves.
 

Montana rider

Monkey
Mar 14, 2005
819
710
Speak for yourself, old man. My youthful stamina and health are going to last forever.

Hey did anyone see where I put the ibuprofen bottle?
Didn't you rent a place in Whitefish for the year?

Clearly you should be "investing" in a fat bike, XC skis and a snowmachine...
 

binary visions

The voice of reason
Jun 13, 2002
21,804
688
NC
Didn't you rent a place in Whitefish for the year?

Clearly you should be "investing" in a fat bike, XC skis and a snowmachine...
We stayed in Whitefish for 3 months, then spent a month in Colorado and a month in Utah. Not sure where we're headed next, but at the moment we're not investing in anything that doesn't fit in the Subaru :D

Whitefish was awesome, though. We had an absolute blast hiking around there.
 

Adventurous

Starshine Bro
Mar 19, 2014
6,001
3,307
Crawlorado
We stayed in Whitefish for 3 months, then spent a month in Colorado and a month in Utah. Not sure where we're headed next, but at the moment we're not investing in anything that doesn't fit in the Subaru :D

Whitefish was awesome, though. We had an absolute blast hiking around there.
Wait for the border to re-open, then spend as much time as you can in Squamish and Canmore.

In the meantime, Sedona would be a great place to winter. I wouldn't mind spending a few months down that way if given the flexibility.
 

binary visions

The voice of reason
Jun 13, 2002
21,804
688
NC
Wait for the border to re-open, then spend as much time as you can in Squamish and Canmore.
Haven't been up that way yet, but we're definitely planning on hitting Canada once the border is opened again. We spent a bunch of time in Banff/Jasper and loved it.
 

Westy

the teste
Nov 22, 2002
41,403
7,528
Sleazattle
One of the reasons I have been hoarding cash is I suffer from a bit of mortgage anxiety. Moving to Seattle I went from a low cost of living area to an extremely high cost of living area. A pay increase covered the increased cost of living. What it didn't do was cover my ass if I lost my job. In addition it was possible I bought my house at the peak of a housing bubble and I could have been in the red if I had to sell. Well 4 years later I have my mortgage paid down to the point that it is highly unlikely that I will be in the red even in a bad housing crisis, values have actually gone up significantly. I now have confidence good job security as we are given a retention score in the case of layoffs, and I would be one of the last people to go.

I just got quoted a refinance rate of 2.375% which would free up even more cash and relieve a certain amount of anxiety as it would puts me in a cash positive position if I ever wanted to rent out the house. I might put some of that cash back into the house, pave the driveway etc but I should probably start seriously thinking about investing. I would assume most financial advisors are little more than used car salesmen so I suppose I should start reading up on shit.
 

Adventurous

Starshine Bro
Mar 19, 2014
6,001
3,307
Crawlorado
One of the reasons I have been hoarding cash is I suffer from a bit of mortgage anxiety. Moving to Seattle I went from a low cost of living area to an extremely high cost of living area. A pay increase covered the increased cost of living. What it didn't do was cover my ass if I lost my job. In addition it was possible I bought my house at the peak of a housing bubble and I could have been in the red if I had to sell. Well 4 years later I have my mortgage paid down to the point that it is highly unlikely that I will be in the red even in a bad housing crisis, values have actually gone up significantly. I now have confidence good job security as we are given a retention score in the case of layoffs, and I would be one of the last people to go.

I just got quoted a refinance rate of 2.375% which would free up even more cash and relieve a certain amount of anxiety as it would puts me in a cash positive position if I ever wanted to rent out the house. I might put some of that cash back into the house, pave the driveway etc but I should probably start seriously thinking about investing. I would assume most financial advisors are little more than used car salesmen so I suppose I should start reading up on shit.
Perhaps @stoney can comment (maybe not though), but I am under the impression that for most people, simply parking your money in low-cost ETFs is likely to return just as much as active money management, with lower associated costs.

I'm sure their financial savvy becomes advantageous at some $$$ level, but I dont know what that threshold is.
 

Westy

the teste
Nov 22, 2002
41,403
7,528
Sleazattle
Perhaps @stoney can comment (maybe not though), but I am under the impression that for most people, simply parking your money in low-cost ETFs is likely to return just as much as active money management, with lower associated costs.

I'm sure their financial savvy becomes advantageous at some $$$ level, but I dont know what that threshold is.

There have been a lot of studies that show that doing any more than that and things just end up as luck. Where I need to do research is in figuring out what is a low cost ETF and how to avoid parasitic fees. Also I feel like we are near the peak of a bubble and just don't feel like it is the right time to put money into the market.

I opened up a Robinhood account at the beginning of last year with a small amount of money I was willing to gamble with. I am up over %100. I wish I could say I am some genius and can reproduce that, but I know I am just lucky.
 

binary visions

The voice of reason
Jun 13, 2002
21,804
688
NC
I should probably start seriously thinking about investing. I would assume most financial advisors are little more than used car salesmen so I suppose I should start reading up on shit.
There's a whole lot of opportunity cost being missed every year your money sits in a savings account. In the overall stock market, your money will roughly double every 10 years.

But for beginning investing, I don't think you really need too much complexity. The Reddit personal finance wiki has some decent advice.

Overall, I basically hold 4 funds:
  1. An index fund that tracks the S&P 500 (e.g. VOO)
  2. An index fund that tracks the extended market (e.g. VXF)
  3. An index fund that tracks the international market (e.g. VXUS)
  4. An index fund that tracks the bond market (e.g. BND)
You can allocate your assets based on your goals/tolerance for risk. I've got a fairly high tolerance for risk because most of this money is not needed in the short term, so I'm at 50%, 10%, 25%, 15% respectively. The Vanguard funds I linked to are extremely low cost.
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
16,539
2,454
Colorado
Perhaps @stoney can comment (maybe not though), but I am under the impression that for most people, simply parking your money in low-cost ETFs is likely to return just as much as active money management, with lower associated costs.

I'm sure their financial savvy becomes advantageous at some $$$ level, but I dont know what that threshold is.
The biggest aspect is RoR vs. risk/need for fund access. If RoR is the only focus, go find an emerging market fund and hold on long-term because shit's going to get wild. If you're 60 and looking to retire, then you need to start reallocating to reduce your risk to account for your need to access funds.

This is where money managers have the greatest impact - identifying the risk you can handle given your needs and timelines for those needs. If you have $5mm invested and 4 rentals that generate 120% of the income you need to live off, then staying heavy equity should be of no concern. If you have $50k and live on just your Social Security, sorry but you need to be invested completely differently and likely rather conservatively because you can't handle losses.

General rule of thumb for risk is just that, rule of thumb. If you meet the description of the average individual for your age (income, savings rate, current savings, etc) following those is fine. If you start to get off that by a decent amount, that's when looking at different strategies makes sense. @Toshi and I are likely very similarly invested based on age, existing savings, current income, and comfort level with risk. Even though long-term his income will likely eclipse ours, we probably are very similar currently. JPB and myself? Night and day. His focus is likely income vs. growth with a willingness to forgo RoR to protect from loss, because his timeline to recover is decades shorter.

Also identifying true risk/reward ratios is very difficult for the average individual. If I'm building a portfolio, should I take the highest performing fund always? What if I can build a portfolio which historically might have a .5% lower RoR, but have a historical downside that's 4% less? If risk is of any concern (which it should be), then the slightly lower returning portfolio carrying less risk should be a no-brainer, especially if income has any consideration in that portfolio or person's life. If you're 25, go find an incredibly high risk investment and walk away for 3 decades, assuming you can handle the swings. Most however can't handle annual swings of >30% with multiple (-) years in a row.

A perfect example of long-term RoR on an actively managed fund vs. index is Vanguard Intl vs. American Funds EuroPacific. I'm going off memory right now, but even though the AmFunds costs more, historically it has a higher RoR (Alpha) for a near equal risk (Beta) as the index fund. Why would I not pay that premium when after the expense it leads to a better R (portfolio return)? This is far more common from Small cap and Intl funds, as there is more opportunity to identify companies that have the ability to out perform. Large- and mid-cap? Buy and index fund.

For @Westy, find a fee-based CFP. Specifically confirm that they do not sell specific products or confirm that you are only "establishing a relationship for neutral investment advice based on a financial plan". Expect to pay $1500-$2500 for that type of plan. They should give you a recommended portfolio down to sub-sectors from which you can then build your own portfolio from your own funds as you see fit. Feel free to PM me and I can give you more direct information (not investment advice) to tools that are publicly available as well.

Regarding things getting bubbly... I'm not going to touch that; my timeline is so long that those things don't bother me - I just dollar cost average money into the market. Know that sitting in cash costs you ~2%/yr from inflation (assuming .5% HY savings), let alone missed opportunity costs. (Ex. Am I going to drop $35k into the mkt today? No. Will I allocate it bi-weekly over 6 months? Likely.) Also know that on paper, we should have gone into recession 4 years ago...
 

Toshi

Harbinger of Doom
Oct 23, 2001
30,216
3,342
@Toshi and I are likely very similarly invested based on age, existing savings, current income, and comfort level with risk. Even though long-term his income will likely eclipse ours, we probably are very similar currently.
I just parsed this as being similar risk levels now. I was going to commend you on a fine income per the other interpretation of it. :D
 

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
16,539
2,454
Colorado
I just parsed this as being similar risk levels now. I was going to commend you on a fine income per the other interpretation of it. :D
No. More so that as a household, Wifey and I aggregate, are probably very similar to you individually. Now. Despite you being younger, your income outlook is much higher individually than our aggregate will be long-term.
 

Adventurous

Starshine Bro
Mar 19, 2014
6,001
3,307
Crawlorado
So I'm contemplating selling my truck. 2017 Ram 3500, 6.7 CTD, with 46K miles on it. Bought it new to haul our camper around the country, but now that we are settling down, I'm questioning the need for and financial impact of ownership.

Yes, it is handy having a truck and 8' bed, particularly as whatever home we find ourselves buying is likely to need work. Running costs, at least at the moment, are not absurd, but the long term implications of owning a new generation turbo-diesel can be intimidating.

Currently have 3 years left on the loan. Still enjoy driving it, and don't need to get rid of it, but that's still money coming out of my pocket every month for the next 3 years that could go into investments. Would likely need to throw a few grand at it for PDR before selling to get a few of the most egregious hail dents removed.

Discuss.
 

Toshi

Harbinger of Doom
Oct 23, 2001
30,216
3,342
I got rid of my Tesla because I similarly didn’t need it. Fewer burdens the better.
 

Nick

My name is Nick
Sep 21, 2001
18,686
6,358
behind you, don't wait up.
So I'm contemplating selling my truck. 2017 Ram 3500, 6.7 CTD, with 46K miles on it. Bought it new to haul our camper around the country, but now that we are settling down, I'm questioning the need for and financial impact of ownership.

Yes, it is handy having a truck and 8' bed, particularly as whatever home we find ourselves buying is likely to need work. Running costs, at least at the moment, are not absurd, but the long term implications of owning a new generation turbo-diesel can be intimidating.

Currently have 3 years left on the loan. Still enjoy driving it, and don't need to get rid of it, but that's still money coming out of my pocket every month for the next 3 years that could go into investments. Would likely need to throw a few grand at it for PDR before selling to get a few of the most egregious hail dents removed.

Discuss.
welp, a big factor in financial fitness, in a way, is time and compounded interest. Three years of payments on something you don't need should equal a lot of scratch 20 years from now.
 

binary visions

The voice of reason
Jun 13, 2002
21,804
688
NC
Currently have 3 years left on the loan. Still enjoy driving it, and don't need to get rid of it, but that's still money coming out of my pocket every month for the next 3 years that could go into investments. Would likely need to throw a few grand at it for PDR before selling to get a few of the most egregious hail dents removed.
Just need to look at the objective financials.

What will you replace it with?
Are you underwater on the loan?
What's your estimate on how much it will cost to fix it up to sell?

Cost of replacement vehicle + delta between sale value and loan balance + cost to fix up = rough cost of what it will take to get out from under your monthly payment. You can weigh that, along with your projections about savings in fuel or speculative repair costs, against the cost of keeping it.

A vehicle that big and expensive probably makes sense to sell, and if have a replacement vehicle already and you're anything but egregiously underwater on the loan, it's a no-brainer. A cheap truck or a rental could be had for a whole lot less than the $40k or whatever yours is worth.
 

Adventurous

Starshine Bro
Mar 19, 2014
6,001
3,307
Crawlorado
welp, a big factor in financial fitness, in a way, is time and compounded interest. Three years of payments on something you don't need should equal a lot of scratch 20 years from now.
Thats the train of thought that is making me evaluate my approach. Its a decent chunk of change that could go into savings or be invested towards the future. Especially considering that the "future" of electric vehicles is rapidly approaching.

Just need to look at the objective financials.

What will you replace it with?
Are you underwater on the loan?
What's your estimate on how much it will cost to fix it up to sell?

Cost of replacement vehicle + delta between sale value and loan balance + cost to fix up = rough cost of what it will take to get out from under your monthly payment. You can weigh that, along with your projections about savings in fuel or speculative repair costs, against the cost of keeping it.

A vehicle that big and expensive probably makes sense to sell, and if have a replacement vehicle already and you're anything but egregiously underwater on the loan, it's a no-brainer. A cheap truck or a rental could be had for a whole lot less than the $40k or whatever yours is worth.
Replacement vehicle: Currently have a Honda Fit that was supposed to be my cost saving commuter car. Then the pandemic hit, so things haven't worked out as planned. Replacement vehicle would likely be a larger SUV, perhaps 3 rows, to accomodate us + 3 dogs + another passenger + all of our crap.

Underwater: No. Vehicle is worth more than I owe on it at the moment. Yay for solid used market! It's also a lower trim grade model, so it wasn't nearly as expensive as one might think, as in, it was in the realm of a mid-grade Honda Pilot or Toyota Highlander.

Estimate on repair: $2K. There are dents of varying degrees on the majority of body panels. It really only makes sense to address the largest of the bunch and let the rest slide.

Sale price - loan payoff - repair estimate = $5K + $3K in aftermarket parts

Truck currently checks all of the boxes for the replacement vehicle, just in a more expensive package.