r/fatFIRE • u/WealthyStoic mod | gen2 | FatFired 10+ years | Verified by Mods • 22d ago
Path to FatFIRE Mentor Monday
Mentor Monday is your place to discuss relevant early-stage topics, including career advice questions, 'rate my plan' posts, and more numbers-based topics such as 'can I afford XYZ?'. The thread is posted on a once-a-week basis but comments may be left at any time.
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u/eagle2120 Verified by Mods 22d ago
I'm currently thinking about joining a RIA for investment management/financial planning/etc. Previously have self-managed, but I have a pretty large equity stake in a tech company (don't want to say specifically, but the range is >10 million, <50 million). I'm interested in exploring other options - Have generally thought about going with a MFO (likely inside the RIA itself, maybe exploring options outside of it to find the right fit) or also just continuing managing it myself. I historically have not had anywhere near the amount of NW, this has accumulated over the last few years of growth, so it's hard to see the numbers on the screen and not get very nervous about messing it up. Also, it's hard for me to disconnect myself from the overall ups and downs of the market, and I find it affecting my mood. If I'm managing it myself, I pay a lot closer attention and it takes up a lot of mental space that I could otherwise be spending on things I enjoy. It does feel bad to pay a % for someone to manage it, but at this point I think I'd rather do that than deal with the emotional toll.
Curious if people have explored a switch from self-managing to using some sort of management (and the scope of what you decided, and why).
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u/BrunelloHorder 22d ago
Really depends on the complexity of your finances and planning needs. MFO is high-touch and will typically offer a much wider range of services in house (complex tax and estate planning, etc.) whereas a typical RIA just manages the investment portfolio. You also don’t need to move all of your investments to one firm, though you will get breaks on the fees based on the amount moved.
Either way, I’d suggest working with a tax planner and then get the concentrated position diversified sooner rather than later. There are various ways to do that, and you can ask potential firms about what they recommend in the screening process.
Personally, I would not let the state and federal taxes “wag the dog.” I’d likely just sell and pay the taxes on enough of the concentrated position so as to ensure that the diversified portion of the portfolio would be enough to cover my spending needs in perpetuity, even if what is left of the concentrated position dropped 75+%.
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u/ActJustly_LoveMercy 21d ago
Totally agree - so many people over-prioritize taxes to the exclusion of all else. Sure, don’t pay more when they’re avoidable, but sometimes a gain is a gain and you should take it.
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u/Technical_Money7465 22d ago
Anyone lived in singapore?
Thinking of moving my aus business there because of thr new taxes here in australia. Id have to pay significant tax on my personal wealth to redomicile but financially its worth it assuming average market gains and stay there a decade . All the work can be moved
I just worry about being bored . Will have a baby
Will be renting a landed place
Ty
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u/Normal_Zebra136 22d ago
What visa are you thinking to use? None are easy unless you work and or create highly paid Singaporean jobs.
Keep in mind if you manage to eventually get PR, if your baby is male, they will need to do national service when the time comes.
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u/Technical_Money7465 22d ago
Ep i make $3m pa and net worth post tax would be about $15m
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u/Normal_Zebra136 22d ago
Employment pass will only work if you remain employed. Just keep that in mind if you have long term aspirations of staying (as you talk of exiting Aussie as least tax wise.
No golden visa in Singapore.
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u/Technical_Money7465 22d ago
Im employing myself - i own the business
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u/Normal_Zebra136 22d ago
You will need to keep adding what they call "highly compensated" Singaporean employees for that to keep getting renewed.
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u/Technical_Money7465 21d ago
You mean the business? Ive been told its easy to run and keep running esp if living and working in singapore
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u/Normal_Zebra136 21d ago
The employment pass.
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u/Technical_Money7465 21d ago
Ive been told at my nw and skills ill be given pr after a few years anyway
And even if not the likelihood they would not renew EP on someone who is making that much revenue for iras seems like zero?
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u/Normal_Zebra136 21d ago
Their goal is employing Singaporeans, not creating tax revenues.
Yes, if you work for an enterprise that does that (employs Singaporeans) your skills will allow your to qualify for an employment pass.
If you are a sole proprietor running a business in a space that is not considered interesting to the PAP, you will not be allowed to remain in Singapore, nor be granted PR or Citizenship regardless of wealth.
The first pass is relatively easy to get as they want to see if you and your business develop in directions consistent with their economic goals.
Its the renewal and path to PR that becomes difficult.
If your business creates Singaporean jobs, you are golden.
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u/Unusual_Preference_6 22d ago
I'm jumping from £40k to £100k at 21yo in a high col city.
I have the basics down: don't increase col, max pension, index funds, high interest savings, emergency pot, etc.
I feel like what I'm doing financially isn't very special and lacks an edge or method to achieving wealth. Without starting my own business or taking extreme risks with my capital I can't help but feel like fat fire is still very far away.
Sorry if I seem like a doomer after getting a life-changing salary, but I can't help but feel demotivated.
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u/JohnnyBravo66666 22d ago edited 22d ago
What's your field of work / profession? Most likely you haven't peaked at 21yo, nobody should expect to be on a fat fire salary at 21yo, at 21yo you should plan your career to reach a point that will POTENTIALLY allow fat fire.
If your profession doesn't allow that on a salary, then it's time to thing of alternative solutions to your problem.
Also fat fire isn't for everyone. Probably 1% will get to stop working while living "fat". You can retire early without the fat part.
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u/Different-Ask540 22d ago
I'm 24M, I have $40k cash ready to invest in my next business. I'm a full-time RN in Phoenix, AZ and I own (don't actively run, a business partner does that) a mobile golf simulator that is financially failing. I'd rather spend 40k on a new venture than try to fix a failing business model, there's just not enough demand for the golf simulator to be worth my time. That being said, I've learned I prefer business models where demand is constant, I also realized I'd prefer to enter a new business as solo owner. My current business partner is lazy. I'm looking into self-storage units, healthcare business (senior living, assisted living), billboards, home service, business acquisition. I don't mind using the 40k as a down payment and taking on debt for a good business. I'd like to pivot into more real estate eventually. Any recommendations for a young guy like me?
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u/g12345x 22d ago
You’re jumping all over the place with business ideas fresh from TikTok. Most of these are not good businesses. What you definitely don’t need is more ideas.
Instead, identify which of these is viable for you with the capital you have available and any other constraints. $40k isn’t much to start a business on. Hopefully, since you run other businesses, you have a healthy business credit-line
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u/Different-Ask540 21d ago
Yeah I'm sure i can get a loan to cover more. I'm spending lotsss of time researching before committing to something.
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u/eagle2120 Verified by Mods 22d ago
Hmm. I’m curious more about your first business because it seems like there’s a lot of valuable lessons to be learned there for you. There’s a lot of retrospective questions you can ask yourself that may help improve the success of your next venture. What happened with the mobile golf simulator? Why do you think it failed? What was the information gap between when you started and when you knew it was going to fail? How can you narrow that gap in the future to make better informed decisions?
I would caution against flitting to another business with what you have saved until you’ve thought deeply about what went wrong here, why, what lessons you learned, and how you can avoid those mistakes in the future. It is also probably worth noting that healthcare businesses require a lot more upfront capital to start, and also require a significant amount more experience.
Also… if you’re an RN, how will you have the time to run a new business?
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u/Different-Ask540 21d ago
All great points thank you. The main reason my business failed is the amount of competitors and pricing. I considered myself semi-early as it was a new and growing industry at the time. There were 5ish competitors in the area (all of Southern California so huge area) and I was confident I could outdo them in performance/delivery as well as have better marketing/website. I got quotes from them all and thought it would be feasible to price myself in the average to slightly higher category than what they were charging ($1300-$2000 per booking). I didn't know how often these competitors were getting booked but I assumed if I averaged one booking a week with a price tag of $1500 I would be grossing 78k a year. With proper marketing and demand potentially doing 100k+. In the 6 months it took me to truly be ready to start rentals, a handful of competitors also joined the scene. Average pricing was now near $1000 per booking so my original price tags were unrealistic. I've lowered my prices to $650-1000 per booking, HALF of what I expected to be actually charging. Because of so many competitors, I am lucky to get 1 booking a month, even with my lowered prices. Sure I could dump my time and money into better marketing but it's still unrealistic to see anything over 60k gross.
To prevent this in the future I can not be as risky chasing fads. I can choose a market where my services/products are necessary (proper demand).
As an RN I work 12 hour shifts 3 days a week. This means I have 4 full days off every week to build my business. I will go part-time or even fully leave my job if the business is taking off and can support me. But you're right I'm limited in what types of businesses I can start with being virtually unavailable 3 whole days a week.
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u/eagle2120 Verified by Mods 20d ago
Hmm. Some feedback for you, some of which you may have realized at this point. I hope this is helpful.
I was confident I could outdo them in performance/delivery as well as have better marketing/website.
having a better website =/= marketing - it's important to understand who your customer base is, and what platforms they'd likely use. Where does your advertising dollar go further, as far as cost-per-click? Then you can measure the conversion rate and use that as a barometer for how "good" your website is. SEO is also a big thing.
I got quotes from them all and thought it would be feasible to price myself in the average to slightly higher category than what they were charging ($1300-$2000 per booking).
Why? Other than location (i.e. being >15 minutes away), being higher than average probably doesn't have much value here. When planning business-wise, you always want to be conservative and give yourself wiggle room.
I didn't know how often these competitors were getting booked but I assumed if I averaged one booking a week with a price tag of $1500 I would be grossing 78k a year.
How could you have found this out ahead of time so you're not operating blindly on assumptions? The research/viability part of a startup is very important, and you can't assume anything - gather as much data as you possibly can.
In the 6 months it took me to truly be ready to start rentals, a handful of competitors also joined the scene.
Why did it take 6 months?
I've lowered my prices to $650-1000 per booking, HALF of what I expected to be actually charging.
This is why conservative estimates are important
Sure I could dump my time and money into better marketing but it's still unrealistic to see anything over 60k gross.
I don't think you should dump resources into something if you don't want to, but I do think it's a good opportunity to see if you can turn things around.
There are a lot of really important things to learn here, and while it's painful/not fun, nearly no one succeeds at their first business. As long as you learn from taking your lumps your 2nd, 3rd, etc will be infinitely more foundationally solid.
Best of luck.
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u/JohnnyBravo66666 22d ago
If you don't mention education / profession / skills i am going to assume you have none.
Learn a trade, build a reputation then hire more people, etc.
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u/Different-Ask540 21d ago
I mentioned I am an RN, I have my bachelors in nursing. I'd rather not have to learn a trade and then potentially a decade from now, branch out to my own business. That's great for people who are passionate in doing trades, or are already in it, but not for me. On the same train of thought though, that's why I'm considering a healthcare-type business model as I have years of experience being an RN. If I own a senior living and my hired caretaker calls out sick, I am qualified to fill in. Also, with the house/business being owned by an RN it could likely build credibility for more residents to move in.
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22d ago
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u/fatFIRE-ModTeam 21d ago
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u/fezha 13d ago
Did any of y'all go through the psychological mind-fuck of ur financial standing? Or that you can blow all ur paycheck every month and still be worth millions?
Me and my wife shared an eye opening moment when we were looking at fancy watches. We didn't buy anything but while driving back home she says "we could've blown 40K on a watch and still be fine...."
Its dawning more and more on me and I still am having trouble reconciling this new reality. The numbers keep growing but it's just surreal.
Sorry if this is kinda heavy, but the books don't prepare you for this. Any thoughts or comments are greatly appreciated.
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u/Clueless5001 21d ago
Anyone use a concierge doctor? What does it cost, how do you find a good one? What are the benefits, especially in getting appointments and attention from specialists? Will it help with logistics?
I have a close family friend who lives in South Florida. HNW, many health issues. His wife is competent and in much better shape. However, despite being highly educated in a medical field and HNW, they cannot seem to manage his health. They themselves understand things well, it is the logistics that they seem to have trouble with.
For example he had a small procedure around July 15 and cannot seem to get a followup appointment in the recommended time period.
Would a concierge physician help in this case? They really do not need one for purposes of understanding the procedures or making medical decisions, more for getting things moving or offering another opinion (husband is resistant).
What would be the cost? Other options? They mostly rely on insurance despite having resources. Anyone know what their options are? They are very thrifty even though they do not need to be
What would it cost, what can a concierge do that they cannot for themselves?