New guy chasing FI

[WhatsIRR]

New guy here that found this forum from a discussion on Bogleheads.

I’m soon to be 38 and have actively spent the past few years trying to build a passive income stream through dividends and real estate. I’m looking for FI but not necessarily RE. I’ve survived multiple layoffs the last 5 years which has invigorated my interest in other income streams in case the RE decision is made for me.

Excited to find a place to talk about strategies and plans.

 

[Time2]

New guy here that found this forum from a discussion on Bogleheads.

I’m soon to be 38 and have actively spent the past few years trying to build a passive income stream through dividends and real estate. I’m looking for FI but not necessarily RE. I’ve survived multiple layoffs the last 5 years which has invigorated my interest in other income streams in case the RE decision is made for me.

Excited to find a place to talk about strategies and plans.

It seems as though you still working, do you really want more income? You have to pay taxes on that. If you go for growth there is no tax on growth until you sell. You get more compounding that way.
"The magic of compound interest"

 

[Sojourner]

New guy here that found this forum from a discussion on Bogleheads.

I’m soon to be 38 and have actively spent the past few years trying to build a passive income stream through dividends and real estate. I’m looking for FI but not necessarily RE. I’ve survived multiple layoffs the last 5 years which has invigorated my interest in other income streams in case the RE decision is made for me.

Excited to find a place to talk about strategies and plans.

Welcome to a great forum filled with good, smart, helpful people. I would encourage you to share a bit more detail about yourself, your goals, your finances, your concerns, and anything else you can think of that will help us get a better sense of your journey towards FIRE. You will find this forum to be an invaluable wealth of information and advice once you actively start posting, asking questions, and getting more involved.

 

[mboley]

I was about your age when I bought my first rental property in 1998 and I bought three more properties within a few years. Of course it was much less expensive back then, and since Im in San Diego it would be impossible for me to duplicate now without a boatload of cash . Those properties allowed me to easily retire at 55.

In any desirable part of the country right now rents are increasing and rental property values are too. So if you want to get into real estate do it now!

 

[WhatsIRR]

It seems as though you still working, do you really want more income? You have to pay taxes on that. If you go for growth there is no tax on growth until you sell. You get more compounding that way.
"The magic of compound interest"

Correct I am still working.

The income skew is to help give me a line of sight on exactly where we stand on FI and making it a trackable actionable number. My current micro FI goal is enough dividend income to cover taxes and insurance on our house, next goal will be to cover utilities. I’m tracking using excel and have a target income goal with a percentage accomplished based on current passive incomes.

All dividends are currently being reinvested into something (auto reinvest turned off) so I’m not actually pulling any out for living expenses. I understand that I will have tax drag versus using a Total Returns approach such as ITOT and selling shares for income. As of now I’m viewing that drag as the opportunity cost of having an income stream prebuilt to needing it.

I’m open to discussing this topic, part of this is some learned behavior from growing up watching my parents buy a farm using monthly dividend income.

In addition to the dividend stocks I do DCA into ITOT/IXUS in my taxable account.

Welcome to a great forum filled with good, smart, helpful people. I would encourage you to share a bit more detail about yourself, your goals, your finances, your concerns, and anything else you can think of that will help us get a better sense of your journey towards FIRE. You will find this forum to be an invaluable wealth of information and advice once you actively start posting, asking questions, and getting more involved.

Would the intro post be a good place to expand or start a new thread in one of the more appropriate sub forums?

 

[Time2]

I did just the opposite, I had minimum dividends and took the growth.
For many years I only paid 2, 3 or 4% of my gross in taxes.

My first year retired, I withdrew $150k or $160k from a fund $78,650 of that was LTCG, added to about $12k of VTSAX dividends and some interest from a property, a couple other smaller amounts and I thing we had $106k of taxable income, but the Rate was 0%.
Very easy to structure your income when you have minimum dividend income. Dividend income is there whether you want of need it, and you pay taxes on it. Also when RMDs come, just add those to your Dividends.
Just my two cents, maybe what it's worth and someone will tell me.

 

[OldShooter]

... All dividends are currently being reinvested into something (auto reinvest turned off) so I’m not actually pulling any out for living expenses. I understand that I will have tax drag versus using a Total Returns approach such as ITOT and selling shares for income. As of now I’m viewing that drag as the opportunity cost of having an income stream prebuilt to needing it.

I’m open to discussing this topic ...

FWIW you misunderstand the tradeoff. It is not really a tax tradeoff, and to the extent taxes are considered it probably favors the total return strategy. Try this for a starter: French on Dividends: https://famafrench.dimensional.com/videos/homemade-dividends.aspx Note particularly the temptation to create a suboptimal portfolio when chasing dividends.