I’ve read many extremely useful posts on the board, both on the financial and psychological side of FIRE. They have helped me more than I can put into words. I would like to thank everyone - and share my own situation.
Financially, or rather tax-wise, I think my situation is a little different from many here, who seem to be based in the US or another country using "western" tax systems. I’m 38, single, live in Asia (Hong Kong), and one of the huge benefits is I don’t need to pay tax on capital gains from investment income. I was in the US as a temporary worker for many years, so when I moved to HK, it felt like being relieved of a life-long sack of potatoes I’d had on my back
Unlike the US, my country of citizenship, Australia, does not tax me while I’m not a resident. This makes a big difference, I think, to how you might plan.
I left Australia 15 years ago, and don’t think I’ll be returning anytime soon. If I FIRE, I plan to stay based in Asia somewhere, but not sure exactly where yet. Trading city life for beach or rural life is something I need to think through, like many others here have.
I’m think I’m doing ok with my savings and LBYM. I’ve been very fortunate in my working life, but also equally careful to avoid the slippery slope of rampant consumerism : ) Based on the last 5 years expenditure tracking, if I retired today I would be around 2% SWR. Marriage and a family could change that quite a bit, but still I think I have a fair bit of slack there, as long as I find a like-minded wife.
My home is bigger than I will ever really want, even with a family – if anything I could downsize it – but it is debt free, and generally I don’t count it as an investment, other than the benefit it brings in lowering my living expenses. If I leave HK, and move elsewhere in Asia, HK prices being what they are, I will most likely get more for less. So I typically leave housing out of my investment planning.
In short, I think, hope, pray I have the right “number”.
But, due to my own negligence, I think my investments are a bit of a mess in terms of the way I’ve divided up the buckets. I also think I may not be taking the best advantage of the fact my capital gains on the stock market are tax free. Let me provide the details and perhaps you will see why I think this is the case.
I hold two accounts:
1 HSBC savings account in Australian dollars, paying 5.85% interest, from which 10% compulsory tax withholding is taken. So I pocket about 5.2% in a fairly low risk investment, though all my eggs are in one basket here, and the return is great, but inflation will kill it over the long haul I know.
2 Four Vanguard Funds held in one TD Ameritrade account. As a “W8” overseas resident, they withhold 30% on income dividends, but all capital gains are untaxed. I think I could submit a tax return and get some of that back, but it will shock many of you to know I haven’t done that
I need to find out what the situation is.
As a non-resident of the US, I can’t hold a Vanguard account directly. I could get one domiciled in Ireland, but haven’t seen the benefit with that over the local US broker (any thoughts on this from non-US residents?).
Here is the breakdown – it has been this way for maybe 5 years, though these percentage figures reflect the latest $ value of the various funds
HSBC: 50% - see what I mean
I’ve been slack on having a better managed balance than this. My excuse is I’m just working very hard for megacorp the last few years, traveling to a different country every week, and in a permanent state of exhaustion. Shouldn’t be an excuse, but there it is. I need to do a better job at it, I know, based on what I've read here about diversification and total market investing.
I want to FIRE “soon” as work is having noticeable impact on my health. I always planned and intended to FIRE before age 40 (2 years away), though as you can see I’ve focused more on adding to the pot, than stirring the pot's contents properly. I’m now thinking I will pull the FIRE plug at any time, but I figure I better get a whole bunch wiser and more mature about my investments first. I think I’m ok with the psychological side, and did a trial run a few years back with a 3 month break. It was great, and man, at the end I very nearly didn’t go back to the grind – but that would have made the finances more of an issue now.
I haven’t set a date yet, but reaching what I think/hope is FI, has made working for megacorp a whole lot easier – so I take it week-by-week
It’s obvious by my portfolio that I’m no investment banker, but I work for an electronics vendor, and vendor jobs are not pleasant.
Any suggestions on stirring the pot, particularly something that captures my “no capital gains tax” situation would be really great. I like investing in the US as I'm comfortable with it, tho I will probabably move a little into whatever country in Asia I finally end up in when I FIRE.
Meanwhile, thanks to everyone for the board and all the help it has given me in the past.