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Old 06-22-2010, 08:57 PM   #1
Confused about dryer sheets
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24, Single- Plan on FIE, normal R

Last year I graduated with my masters in accounting with no debt and about $10k in savings. I got a government job at GS-9 (~$47k) which goes to GS-11 (~$57k) after a year, which is exactly today. All future grade promotions have to be earned.


With one year on the job, my current assets are:
$20k cash
$5k roth (sitting in cash as I anticipate a market drop- dumb idea?)
$4k TSP
Spending over the last year was about $20k.



I have only been doing 5% in my TSP while I increase my cash savings, but due to the raise I plan to increase that to 22.7% ($500 per pay period) before my next paycheck. I considered maxing it out but decided to wait another year or two for that. I have contributions set to go 1/3 each into the C, S & I funds. I have zero interest in the hassles and restrictions of home ownership, nor do I think it's the amazing investment most people seem to think. However, entrepreneurship has always fascinated me, and I dabbled in college.


I don't see myself ever fully retiring until health requires it. My post-polio grandpa worked full-time until 70, part-time until almost 80, and not out of necessity. I feel I've been given so many advantages in life that I have a need to give away a substantial amount. ESR with fewer hours and lots of vacation time by the government retirement of 57 would be nice though. I think I should be able to retire on either a pension if I stay in government work, or the real interest on my savings, both supplemented by part time work, and give away the rest.



I've read a lot of the old threads over the last couple weeks. I'll probably lurk here semi-regularly but rarely post.


That's me. I don't know what advice I need, but feel free to give it.
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Old 06-22-2010, 10:29 PM   #2
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Welcome, RetireAt80.

My current fiscal situation is very similar to yours, actually.

So while I might not have any beneficial insights or wisdom to add, I will be following this thread with great interest! Best of luck.
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Old 06-22-2010, 11:29 PM   #3
Confused about dryer sheets
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Eager Beaver- I read your introductory thread and liked your comment that the first half of FIRE = freedom. When you aren't bound by debt or eventually even the necessity to earn income, you have the freedom to do what you want, whether that means retiring, doing the same job you've been doing, or something completely different.
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Old 06-23-2010, 05:45 AM   #4
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Originally Posted by RetireAt80 View Post
$5k roth (sitting in cash as I anticipate a market drop- dumb idea?)
How long are you going to wait for that drop? I'd have it 100% in stocks until you're 35 or more, or at least until it's an amount of money where a substantial loss would be the price of a car or something substantial.

A useful thing to consider is where your "human capital", defined as your personal ability to produce wealth from your time, is situated. This is an analogy, caveats apply: people with secure government jobs could be said to hold their human capital in the form of bonds whereas people who work in the private sector hold their human capital in stocks (and entrepreneurs doubly so). That means that for two people of the same age and net worth, the one who works for the government should have a bigger portfolio exposure to stocks, whereas the one who works for a private company or themselves should have a more conservative portfolio since they already have more uncertainty (typically on the upside as well as downside) in their future revenue stream.
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Old 06-23-2010, 06:50 AM   #5
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Sounds like an OK plan, but I think you are missing one thing. Life has a way of throwing you curveballs, so do not be surprised when it happens. You are in decent shape to adjust, with some assets and no debt. However, I see lots of gubmint workers lock themselves into a 30 year plan that does not allow for significant flexibility without heavy costs, so be wary of long term plans that require you to surrender flexibility.
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Old 06-23-2010, 06:28 PM   #6
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I must admit, what attracted me to this post was the word FIE in the title. At first I thought someone was looking for a scolding But you seem like far too nice a person to scold!

I started out with a B.A. as a GS-7 intern (with zero savings) and didn't even reach GS-9 until 2 years out (after jumping through many hoops) - it took me 4.5 years to get promoted to 11, so from my perspective, you're doing quite well.

I do agree with others that at your young age, with a secure job, you need to max your TSP ASAP, and I'd put it all in the stock funds. That way you can put your stock investing on Automatic, and be as cautious/generous as you like with the rest. By the way, if you are in need of ideas as to where to give it away, I can supply the address of two orphans in suburban Maryland

Best of luck,

Amethyst

Quote:
Originally Posted by RetireAt80 View Post
Last year I graduated with my masters in accounting with no debt and about $10k in savings. I got a government job at GS-9 (~$47k) which goes to GS-11 (~$57k) after a year, which is exactly today. All future grade promotions have to be earned.


With one year on the job, my current assets are:
$20k cash
$5k roth (sitting in cash as I anticipate a market drop- dumb idea?)
$4k TSP
Spending over the last year was about $20k.



I have only been doing 5% in my TSP while I increase my cash savings, but due to the raise I plan to increase that to 22.7% ($500 per pay period) before my next paycheck. I considered maxing it out but decided to wait another year or two for that. I have contributions set to go 1/3 each into the C, S & I funds. I have zero interest in the hassles and restrictions of home ownership, nor do I think it's the amazing investment most people seem to think. However, entrepreneurship has always fascinated me, and I dabbled in college.


I don't see myself ever fully retiring until health requires it. My post-polio grandpa worked full-time until 70, part-time until almost 80, and not out of necessity. I feel I've been given so many advantages in life that I have a need to give away a substantial amount. ESR with fewer hours and lots of vacation time by the government retirement of 57 would be nice though. I think I should be able to retire on either a pension if I stay in government work, or the real interest on my savings, both supplemented by part time work, and give away the rest.



I've read a lot of the old threads over the last couple weeks. I'll probably lurk here semi-regularly but rarely post.


That's me. I don't know what advice I need, but feel free to give it.
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Old 06-23-2010, 07:22 PM   #7
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I don't see myself ever fully retiring until health requires it. My post-polio grandpa worked full-time until 70, part-time until almost 80, and not out of necessity.
I feel I've been given so many advantages in life that I have a need to give away a substantial amount.
That's me. I don't know what advice I need, but feel free to give it.
Why not both ER and give away a substantial amount?

I'll point out that the two guys in your avatar can give away 99% of their net worth without risking running out of money. I doubt the rest of us are in a position to emulate their percentage example.

If you're not motivated to ER then I'm not sure how this board can help. SimpleLiving.net or YMOYL, sure. But not E-R.org.
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