24 year old feeling like a 44 year old wanting a 64 year old portfolio

[Stripes]

I couldn’t think of a clever title so I just started rolling with the age and took it away.

Hello all. I am 24 and from the mid-west.

My portfolio consists of:

12k Roth 401k
7k High Yield Savings
6.5k Roth IRA
4k in 3 different Brokerage Accounts
1.5k in HSA
Not relevant as I am not investing it but 225k in home equity.
No loans.

I started working for a small family business around age 12 or 13. Yes, labor laws...I know. I suppose it was mostly volunteer and more importantly damn good for my work ethic. I was raised in a family with a tight budget so I learned the value of a dollar fairly early. I started my own tech repair business around 14, but didn’t really have it take off until I could drive at 16. I pushed my own business more my sophomore year in high school and also worked for another company 40 hours between afternoons/evenings and weekends. Summers I put in as much overtime as they could use, so I was getting about 45 to 50 hour weeks and then ran my business on the side of that. Typically late evenings. I missed out a lot on the social aspect of high school and friends. This was both good and bad. I was able to stash away a lot of money but I was considered “boring” by my classmates. However come senior year I was able to balance a little and made some good friends I still have today.

I stashed away about 125k up until I was 20. I bought land and built a house on it with about 75% of the labor being done by me. It took 18 months and I moved in, shortly after realizing I needed to ditch the house because of high costs in the money I borrowed, the property taxes, and the land upkeep that would require a lot of equipment and time I didn’t have. So come 10 months later after moving in I had a "For sale" sign out front of it and was able to sell for profit and decided to go right back to building another one at a lot more modest angle. I also did 95% of the labor on this one to save a lot of money and surprisingly was able build faster because the only delay was myself - so I moved into this one about 11 months after breaking ground. I built the house assuming it would be a forever home, Lord willing. So it’s sizeable enough for a family but definitely not too big to heat and cool when single or empty nested.

All of that probably is irrelevant but I wanted to introduce myself and give you a feel for my personality and how I am where I am today. As you may have guessed it, I spent a lot of my savings on this house build making it so I would not have to “remodel” or “upgrade” it later on when it would cost more to do so between inflation of material prices, the waste from undoing something already done, and of course the amount of time it takes. I left the basement unfinished and some other things untouched so that I can finish them to my financial allotments.

The only benefit to the home equity is that it’s a new home and it offers a stable and predictable amount of maintenance cost these next 10 to 15 years. With everything being brand new, efficient, and under warranty, I should not see any surprise 4k or 5k big ticket items! Woohoo! Any home costs will be ones I plan for this way.

As of this month I finally got my savings rate to about 45%. It was 0% during construction and only 15-20% during the past 6 months. I can see having a comfortable savings rate of about 55% for most months of the year next year. Some months will be less due to big expense items for finishing parts of construction or starting basement projects. My savings rate considers my paycheck contributions to Roth 401k as an expense since I consider what I save the money I get AFTER paying taxes and covering the month expenses. Therefor I would be savings more per net income if I factor in the 401k contributions.

I live in a LCOL area and wouldn’t change it for a thing. I am a simple person and have settled into a 40-45 hour work week. Before taxes I would say salary of about $42k plus another 5k in benefits (401k match and HSA contributions) plus a decent chunk of health insurance premium is paid (not accounted for in wages or the benefits above) My side gig has mostly gone on the wayside as I did not have time during construction and my current ‘salary’ is sufficient enough to make me not as hungry for side work? This is a personal battle I have - and I figure when I reach a certain portfolio size, I will quit the day job and then work part time with my own business again with my own schedule.

That gets me where I am now. A mid-twenty year old on an early retirement forum. With a passion to learn more, sharpen my mind, and truly retire early so I can live the life I want.

My goal on here is to continue lurking and hopefully meet those of all stages. It’s hard to discuss FIRE or ER with friends who are not like minded. I have a goal to become my own boss as soon as possible. Some may say this is not possible, while others may say “What are you waiting for? Start tomorrow!” and I tend to be in the middle of the two ideas. It would not be feasible, in my current situation, with my level finances. However, I can see after building up enough portfolio that I would be able to put in my notice.

I will likely be married in the next couple years and have a spouse working full time. This is from our discussions, not from me demanding a certain type of woman of course! I believe I would be covered by her employer insurance if I did not have mine(i.e. Quit my dayjob and pushed my own business), but I will not plan on this just to be on the safe side. Right now my biggest concern is health insurance premiums. They are the largest wrench in the gears of my planning. It’s easy to assume they will be going up and could double or triple each decade due to 1.) Age based premiums (older age means I pay more) 2.) The current trend of expenses vs insurance companies. Right now I have settled on a premium number of $175 for young twenties with no health issues. I will double this per ten years up to $500/mo. I do not intend on my income increasing more than 2 to 5% per year for the next 10 years. My expenses will stay about the same, factoring in inflation. It will even probably drop if/when self employed. Because of this one key factor, I hope to meet MAGA requirements for insurance premiums *if* they exist and *if* spousal insurance is not an option. My understanding is there are no subsidies if someone else’s ins. can cover you. I don’t want to take advantage of a system, but I can not see raising my income more than enough to cover full cost premiums when I live in a LCOL area that also means lower income!

Writing this all out has been a chore but it is good to finally get it in text.

Lastly : My expenses.

Currently I have a calculated budget of 1,606 which includes a health insurance premium of 175/mo (that I do not pay). It also covers $200 savings for unexpected expenses (repairs, random issues, etc) but does NOT include retirement contributions. After marriage and living with a partner, I have calculated this will drop down to right at $1,100 after calculating inflation for the time period to that point, increased usage in certain utilities and supplies, and considering some costs are split and some will not be split.

At this point of the post I am not sure where I am going with this. Consider it my introduction, my hello, and my open mind for input and suggestions and of course, questions! Let me know what I am forgetting, overlooking, missing, or assuming wrongly. If questions are private or seem private I am comfortable answering them via PM. I will edit in more information if I feel I missed it. And if this post is too long please delete it (I’m saving a copy) and I will prune it up a bit for a re-post.

[Firedafter30]

Hi, welcome to the forum. I'm pretty new around her myself. My guess is that you are in better financial shape than 99% of other 24 year olds.


I just ran some quick numbers assuming the 4% withdrawal rule on your monthly budget of $1,606. So for basic FI, you need $1,606 x 12 months x 25 years to achieve a 4% withdrawal rate. That is $481,000.


You have about $30,000 saved in various accounts. If you can achieve a modest 7% growth over time, and adding $1400 a month, you would have over $500,000 in 15 years. So, boom, at 39 you retire!

[dtbach]

Unless you REALLY hate your job I wouldn't retire on $1600/mo. Unless you like sitting around the house or going on picnics. And at 24 you are wasting your youth on this? Figuring out retirement?? Yeah it's good you are thinking of it, but just save a bit every month but otherwise go out there and live life to the fullest. You could ask 9 out 10 people and they would say the 20's were the greatest time of their life. So live it and stop worrying about retiring at 35.

[Aerides]

You are 24 but sound like 54, so relax! Save, sure, live smart, but don't avoid living for the sake of retiring. Much to young for that. Worrying even 30 more seconds about your magi for ACA at this point is a waste of your energy.

You have a great start and the right perspective to avoid the pitfalls that would preclude even a reasonable on-time retirement. So you'll be fine without the hyper-focus.

Welcome! but go have more fun.

[COZICAN]

Dreams change as you get older. When i was your age all I wanted was 180K for a lake place and a bass boat and I was done. Now 33 years later its a 400K condo on the beach. With your savings attitude you should be successful. My advice......find a good wife with a good job and DINK it (double income, no kids) for a decade or so then decide.

Coz

[HI Bill]

Congrats on an awesome start! I'd suggest finding work that you ENJOY, then after another 20 years, consider ER. I'd have been bored out of my skull had I considered retiring at 24 with only $1600/mo to spend. My hobby is scuba diving, and that's only 1/2 of one week on a dive boat.

[Spiff]

Very impressive life story!!! Many of us did not have our stuff together even 1/4 as well at that point in our lives, and living well under your means. (I am a huge fan of that ). Keep doing that for a while longer. No doubt you will do well. Very best of luck!

[Gumby]

Welcome, Stripes. You are really doing well for yourself. When I was 24, my net worth consisted of whatever I could scrounge up from under the couch cushions. Keep at it, but do take time to enjoy your 20s. They go by quickly and one day you'll miss them.

[Ready2Save]

Welcome and pretty sure I had negative net worth at your age (CC bills and nothing to show for it!). Seriously, you are doing great...actually, outstanding for your age. Slow down for a minute and enjoy yourself...have some fun along the way to retiring early and there is no doubt, you will retire crazy early.

[HadEnuff]

Welcome to the forum. I have no pearls for you, but I will relate a story about a conversation between me and my dad, circa 1993. I was 40 years old at the time.

Me: Wow, I feel like I'm 60.

Dad: Naw....you just feel like 40. 60 is way worse.

I got some insight out of that. Maybe you will also.

Best of luck! Life is short, and dead is forever. Enjoy every stinking day.