Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
26 y/o with 350k income and impulse spending needs help
Old 01-16-2013, 05:49 PM   #1
Confused about dryer sheets
 
Join Date: Jan 2013
Posts: 9
26 y/o with 350k income and impulse spending needs help

As the title states, I am 26 years old. I started in the workforce at 18. I have been making over $160,000 since I was 21 and after 3 promotions I am now at a $350,000 position that I've had for over a year. I like to think I am a very responsible person however I sometimes can't control my spending. I am frugal with some things but others I have no self control. I had a home built at 21 years old which is almost paid for but I think that for as much as I make I am not putting away enough.
My biggest issue is with vehicles. I have always had a passion for cars and every time I think I learn a lesson after purchasing an expensive one and selling it, I just keep going round and round. I know, the definition of insanity! I have gone through 9 BMW's, 2 Mercedes, 2 Maserati's, 1 Infiniti, and 1 Lexus. Almost all have been new and in most cases I've owned 2 at a time. Currently I have a new 60K+ Audi and a 160K+ Ferrari. While this sounds like bragging I am just trying to make a point that I have a interest in something and because I have the means for it to be funded, well its been spiraling out of control.
I'm here to try and learn how others control spending their hard earned money especially on things they really love. I know my car buying problem is hindering my ability to retire at a very young age. Cheers!
__________________

__________________
MDC86 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-16-2013, 05:58 PM   #2
Recycles dryer sheets
 
Join Date: Jan 2013
Posts: 118
Party like a rock, party like a rock star...
__________________

__________________
AndrewJackson is offline   Reply With Quote
Old 01-16-2013, 06:00 PM   #3
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,817
Is your savings growing? Is it growing at a rate that you'll be able to continue this lifestyle when you retire? Or will you have to give up expensive hobbies, or keep on being a wage-slave.

If you don't mind my asking... what field are you in? Clearly one much more lucrative than being an enginerd.
__________________
rodi is offline   Reply With Quote
Old 01-16-2013, 06:00 PM   #4
Recycles dryer sheets
 
Join Date: Oct 2011
Location: Park City
Posts: 101
First, congratulations on making such a high salary at a young age. I was in a similar position when I was your age. However, I always looked to the time when I would have the freedom to do whatever I wanted, to work or not as I chose. It's nice to be able to earn a lot, but even better is having a choice about what kind of work to do, where to live, and how many hours to work. Considering how much money it takes to have that freedom, I always felt a strong pressure to save. Maybe it would help you to think about how much money you would need so that you didn't have to work anymore. How much would you need to save every month? When you have that number in mind, suddenly you might not feel so flush. Without a goal like that, though, it's very easy to just spend all that excess money. Anyway, that's what helped me.
__________________
sunsnow is offline   Reply With Quote
Old 01-16-2013, 06:02 PM   #5
Recycles dryer sheets
arky's Avatar
 
Join Date: Jan 2012
Location: Colorado
Posts: 236
Try to pick a percentage of your annual income (I would suggest 50%), have it deducted or otherwise saved before you "see" it in your checking account and then live it up with the rest !
__________________
Don't you know that dynamite always blows down ? --- Moe to Curly
arky is offline   Reply With Quote
Old 01-16-2013, 06:08 PM   #6
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Keep advancing at your job and grow your income, that will partly solve the problem while you look for a cure.
__________________
bondi688 is offline   Reply With Quote
Old 01-16-2013, 06:26 PM   #7
Recycles dryer sheets
 
Join Date: Jan 2013
Posts: 118
Quote:
Originally Posted by bondi688 View Post
Keep advancing at your job and grow your income, that will partly solve the problem while you look for a cure.
Disagree. Like another poster mentioned, you should just take a good % chunk out of your salary and just cash flow your spending. Without having a real lifestyle/mind change on your current spending path, that is what I would do.
__________________
AndrewJackson is offline   Reply With Quote
Old 01-16-2013, 06:26 PM   #8
Confused about dryer sheets
 
Join Date: Jan 2013
Posts: 9
I read my original post and it does sound farfetched. So incase anyone needs a bit of credibility before they can give me some advice I attached an image.

rodi- Yes, my savings grows monthly. I put away anywhere between $5k-$15k a month between 401k, employee stock purchase program (I work for a fortune 500), an annuity type acct called a 15 pay life, and Vanguard MF's. I have a very low risk tolerance with my MF's so I choose tax exempt bond funds. As far as retirement, I am unsure if I will be able to maintain my lifestyle. I work as a director of finance for a fortune 500 based in Florida, but I work in the northeast region.

sunsnow- I truthfully wouldn't have the slightest idea about how much money I would need to save and for how long to say "ok, this is enough"

arky- That is decent idea, I'm sure Vanguard can deduct it from my checking account, but I think it would work better if it came directly out of my check like my 401k and espp though. I'll have to look into that.

bondi688- I'm at the top of the ladder. Their isn't anymore growth in income where I am at nor at a competitor.
Attached Images
File Type: jpg photo.jpg (100.5 KB, 85 views)
__________________
MDC86 is offline   Reply With Quote
Old 01-16-2013, 06:34 PM   #9
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,817
Nice ride.
I've seen those through the window at the Ferrari dealership in la Jolla. The dealer must hate all the nose spots, and drool he has to clean up.
__________________
rodi is offline   Reply With Quote
Old 01-16-2013, 06:34 PM   #10
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
Quote:
Originally Posted by AndrewJackson View Post
Disagree. Like another poster mentioned, you should just take a good % chunk out of your salary and just cash flow your spending. Without having a real lifestyle/mind change on your current spending path, that is what I would do.
I should have just left the sarcasm tag in my comment.
__________________
bondi688 is offline   Reply With Quote
Old 01-16-2013, 06:40 PM   #11
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
Welcome to the forum.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 01-16-2013, 06:43 PM   #12
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Quote:
Originally Posted by MDC86 View Post
I read my original post and it does sound farfetched. So incase anyone needs a bit of credibility before they can give me some advice I attached an image.

rodi- Yes, my savings grows monthly. I put away anywhere between $5k-$15k a month between 401k, employee stock purchase program (I work for a fortune 500), an annuity type acct called a 15 pay life, and Vanguard MF's. I have a very low risk tolerance with my MF's so I choose tax exempt bond funds. As far as retirement, I am unsure if I will be able to maintain my lifestyle. I work as a director of finance for a fortune 500 based in Florida, but I work in the northeast region.

sunsnow- I truthfully wouldn't have the slightest idea about how much money I would need to save and for how long to say "ok, this is enough"

arky- That is decent idea, I'm sure Vanguard can deduct it from my checking account, but I think it would work better if it came directly out of my check like my 401k and espp though. I'll have to look into that.

bondi688- I'm at the top of the ladder. Their isn't anymore growth in income where I am at nor at a competitor.
Frankly, every single person I've ever known who had a career in finance also had personal finance issues. I don't know if it's because they pay so much attention to the finances of their employer that they are simply too tired to pay attention to their own or what......

I'm with the previous poster who said you should have a percentage of your income diverted before you can spend it. You'll really like seeing those MF's and other investments grow. Since you are at the top of your silo, you are probably tight with someone in HR/Payroll who is also at the top of their silo. If your company doesn't already have a program in place to have non-401(k) automatic deductions made, get them to start one by being the first top dog to sign up for it.
__________________
LakeTravis is offline   Reply With Quote
Old 01-16-2013, 06:43 PM   #13
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
MDC86
You should apply the same ability and drive that advanced your career to instill self discipline. The fact that you recognize that there is a problem is a good start. Do a budget, ask yourself again is this a right move before you go for your wallet. I think you can do it. But if your spending habit is so impulsive that it is pathological, then you may need to seek help.
__________________
bondi688 is offline   Reply With Quote
Old 01-16-2013, 06:44 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,370
"I can't complain but sometimes I still do"

Depends on what you want. If you want fun cars, spend it on them. If you want financial independence, "spend" it into savings. When you've amassed about 25x your annual expenses, you can kick back. At your pay rate, you can fund a decent independent lifestyle faster than most. If that's what you want.
__________________
GrayHare is offline   Reply With Quote
Old 01-16-2013, 06:49 PM   #15
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
Hi MDC86, welcome.

Sounds like you know what to do. You just have to find the will to do it.

First you need to find out how much you need in order to retire. Since you are very young, you probably would need to save 33-50 times what you spend annually before you could consider retirement (closer to 33 if you take some risk with your investments, closer to 50 if you take little risk). That's only a ballpark estimate but that will give you an idea about whether you are on track or not. Next, you need to determine how much to save every month in order to meet that goal. That will tell you how much of your income you can afford to spend.

Bottom line: we can't tell you what to do. You have to make early retirement a priority and go for it.
__________________
FIREd is offline   Reply With Quote
Old 01-16-2013, 09:35 PM   #16
Recycles dryer sheets
 
Join Date: Jan 2013
Posts: 118
ok, maybe I am just jealous, but I am calling bs on this story (even with the pictures). I mean who in their right mind would give a 25 year old a 350k job in corporate America? Am I the only one who is doubting this? Usually when something is to good to be true, it is. So where is the catch?
__________________
AndrewJackson is offline   Reply With Quote
Old 01-16-2013, 10:55 PM   #17
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 926
MDC86,
...Welcome to the forum. I am a car guy so I sort of (well not really) understand your problem. It seems to me that there are lots of much less expensive cars that can be interesting and fun and in fact make you seem like a serious car guy to other car guys rather than looking like a spoiled rich kid in a shiny new Ferrari. If you were to get a nice old Mustang or Camaro and spend a relatively small amount you could make it into a track car and actually race and be a "real" car guy rather than just another rich guy cruising around in a shiny 160K car. BTW, I drive a ten year old ZO6 Corvette. Initial cost and maintenance costs are small compared to your Ferrari. With your salary you can indulge your love for cars but you do not have to spend so much on them.
Good Luck
JC
__________________
CW4, USA-(ret)
RN, BSN-(ret)
jclarksnakes is offline   Reply With Quote
Old 01-17-2013, 12:41 AM   #18
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,130
Quote:
Originally Posted by FIREd View Post
Hi MDC86, welcome.

Sounds like you know what to do. You just have to find the will to do it.

First you need to find out how much you need in order to retire. Since you are very young, you probably would need to save 33-50 times what you spend annually before you could consider retirement (closer to 33 if you take some risk with your investments, closer to 50 if you take little risk). That's only a ballpark estimate but that will give you an idea about whether you are on track or not. Next, you need to determine how much to save every month in order to meet that goal. That will tell you how much of your income you can afford to spend.

Bottom line: we can't tell you what to do. You have to make early retirement a priority and go for it.
It's good to see a figure of 33 - 50 times annual expenditure (depending on risk) being mentioned instead of the flat figure of 25 that is often used. I'm a year shy of 50, began withdrawals about 18 months ago, and wouldn't have felt comfortable at a 4% WR.
__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is offline   Reply With Quote
Old 01-17-2013, 06:34 AM   #19
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Quote:
Originally Posted by AndrewJackson View Post
ok, maybe I am just jealous, but I am calling bs on this story (even with the pictures). I mean who in their right mind would give a 25 year old a 350k job in corporate America? Am I the only one who is doubting this? Usually when something is to good to be true, it is. So where is the catch?
I was thinking along the same lines. My brother is a VP of Finance or something at JPMorgan Chase and while he's paid very well he isn't anywhere near $350K. Took him a couple of decades to reach that level.

I've seen C-level finance positions in managed healthcare that pay very well, but they also top out around $200K.

So I'm very skeptical of a 25 yo at a Fortune anything being comped $350K a year.
__________________
LakeTravis is offline   Reply With Quote
Old 01-17-2013, 07:00 AM   #20
Thinks s/he gets paid by the post
frayne's Avatar
 
Join Date: Oct 2002
Location: 19th Hole
Posts: 2,535
Quote:
Originally Posted by LakeTravis View Post
I was thinking along the same lines. My brother is a VP of Finance or something at JPMorgan Chase and while he's paid very well he isn't anywhere near $350K. Took him a couple of decades to reach that level.

I've seen C-level finance positions in managed healthcare that pay very well, but they also top out around $200K.

So I'm very skeptical of a 25 yo at a Fortune anything being comped $350K a year.
Ditto, sounds like BS to me as well.
__________________

__________________
A totally unblemished life is only for saints.
frayne is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:29 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.