31 Year old Second time married Father of 2+2step

[avengerki]

Hi all I have been here for a few weeks now and I have finally decided to post a hi message. I am on my second marriage the first one was to my high school sweetheart who turned out to be the worst possible choice for me to marry especially financially(can you say spent paycheck in one day before buying groceries or paying bills, multiple times). I would like to FIRE in 10-15 years and think I can do it but know I need to be more aggressive.

I currently have about 20k in a 401k(5k in a ROTH 401k), 5k in a ROTH IRA. My emergency fund would maybe pay a weeks worth of expenses except for the fact that most of my bills are already paid up for about two months extra.

I currently save about 5% of my paycheck biweekly into the ROTH IRA, I am 100% equities with dividend payments. I have another 5% to my 401k(no company match per say). And my employer once a year will do a lump sum 4-12% of my gross pay into my 401k as profit sharing bonus.

I also have brokerage accounts totaling about 4k. My investing strategy so far has been to buy and hold dividend stocks and I am ranging from 8% to 14% return for each of my accounts with about a 10% average.

My DW is 41 and actually has over 50k in her 401k and no other speakable assets. Since we have gotten together I have helped her bring her debt down considerably and am aiming to really bump up the contributions once we have the debt paid off.

I own my house which is underwater 30-50k depending on where you look for the estimated home value between zillow and some other online free appraisal thing. I am looking to refinance it into a VA home loan sometime here in the future just need to finish getting my ducks in a row, the reason for not being in one to start with was my mortgage broker hosed me.

I have an estimated expenses for the year outside of the mortgage sitting at about 20k. The mortgage unfortunately adds another 22k per a year including taxes and pmi. I make roughly 50k a year plus bonuses as does my wife. I also get a small amount a month for disability from an injury in the US Army.

I enjoy spending time with my kids when I can see them, they live with their mom in Arizona while I live in Oregon. My DW has 2 kids of her own that live with us, the oldest is 16 and driving(the insurance is twice what I pay for my truck and my wifes car added together.) All three vehicles are paid off.

I recently started going back to college to work on getting a few degrees and to tap my almost expired pre9/11 GI Bill. So I am working full time and going to college full time and spending time with my loved one full time, so pretty busy.

When I can find the time I like to play video games and also am in the SCA.

 

[aida2003]

the first one was to my high school sweetheart who turned out to be the worst possible choice for me to marry especially financially(can you say spent paycheck in one day before buying groceries or paying bills, multiple times). I would like to FIRE in 10-15 years and think I can do it but know I need to be more aggressive.

Since you mentioned, I've got to ask: What did your first wife spend money for? I'm trying to get an idea since food in my belly is VERY important to me .
Do you have to pay child support and/or alimony to the ex?

In general, you'll have to be VERY aggressive saving for your retirement in order to retire in 15years. But I personally would plan my date in 20years just to be on the safe side. However, depending on how the market performs and how much you save for the next 15years, you might be able to retire earlier than later.

 

[avengerki]

Primarily I would come home from work and she would have entire outfits of new clothes. She didn't like to do laundry so she would go and buy new clothes instead. It was very frustrating.

Yep I know my outlook date is pretty aggressive. I am thinking it will be more like 15-20 years like you said but I can still try.

I do have to pay child support but I got off fairly lightly for 2 kids, she actually fought to keep the number down since she knew what I could and couldn't afford basically. We are still friends but we have found we just do not live well together and she is now on her third husband. My kids are 12 and 13 so I have at a minimum 6 years left of paying child support and I know my oldest is already talking about joining the military and has been for the last 3-5 years. It doesn't help that I was in the military and now his favorite uncle is in the military and also my brother is in the military. Its fine with me and I am trying to put good financial thoughts into his head, at least he has stopped asking for a porsche when he turns 16.

I guess I could add that I have a HDHP medical insurance through work and I take the difference in what I would pay for a premium and put that into the HSA. Currently I only have $500 in it since I used it all last year. This year has been better.

 

[aaronc879]

I would like to FIRE in 10-15 years and think I can do it but know I need to be more aggressive.

Do you have a military pension coming? If not, you'll have to save a lot more aggressively to have any chance of retiring by age 45. I'm your age, have about $100K more in savings and half the expenses and still think i'm being optimistic hoping to retire at age 49. Best of luck to ya!

 

[haha]

I do have to pay child support but I got off fairly lightly for 2 kids, she actually fought to keep the number down since she knew what I could and couldn't afford basically.

That woman has class, even if she clearly did not accept the LBYM idea. My ex also behaved reasonably during our divorce, for which I am very grateful.

Ha

 

[avengerki]

Nope no military pension. I just find if I am optimistic about something I will make it happen.

I am actually looking at the compounding of stock dividends being reinvested with the increases in stock purchases I am continually doing and have determined that I could potentially have it in 8 years with those wierd obscure numbers I seem to come up with. I don't have my numbers in front of me but its something like I it will be slow going and then after about 5 years the monthly dividend amount starts to really increase and then after a few more years it is sufficient. Which is suffice to say entirely possible that I have funny math and using funny numbers and in 15 years I will still have funny math and funny money but not anywhere near my goal.

I do have an increasingly more aggressive plan for saving more going into the future, I have been taking care of paying down debts and the getting married and paying down more debts so I have only been able to save a little. The more I get my wifes paid down will also increase the amount we can save faster. Once I no longer have to pay child support that will free up money I would switch to investing but that is a number of years down the road.

After I get my mortgage refinanced I plan to continue paying the same amount I am paying now. Since I already pay my mortgage bi-weekly it drops 7 years off of a 30 year mortgage and then I pay extra also. So basically in the 3 years I have been paying my 30 year mortgage I only have 17 more years to go and I want to lower it even more.

It hasn't been until recently that I have had my finances straightened out enough to actually start saving more. I am also looking at trying to do a few jobs on the side when I am not going back to school.

 

[avengerki]

That woman has class, even if she clearly did not accept the LBYM idea. My ex also behaved reasonably during our divorce, for which I am very grateful.

Ha

Especially considering that she had to sign extra paperwork saying that was how much she wanted since according to the courts calculations she was entitled to 3 times as much. Which was just outrageous since 2.5 times as much was equal to four fifths(4/5) of my monthly paycheck at the time. I was in the army and the courts thoughts were you have a guaranteed roof over your head and 3 meals a day you don't need a paycheck.

 

[growing_older]

My understanding is child support is for the children, not for the ex. I'm surprised the courts let the ex go along with a lower support amount for the kids. It's their support, not hers.

 

[avengerki]

The money is for the kids but it gets determined by what she makes and what I make. The courts really didn't like it but she was adamant and she was the one who would get the money. I don't think I really would of been comfortable giving her more money since her choice of apartments tends to run on the expensive side. Regardless when ever she was short money I still sent her money(at least what I could send her anyways).

How would you be able to cope if you had $500 in bills a month(car payment, insurance and telephone) and only $100 income after paying child support that was what they were asking me to do basically. As it was I still had very little money left over each month after paying my bills until a couple years later after raises.

When the courts decide the amount someone needs to pay for child support especially if the person is in the military can be outrageous. One of my buddies was paying $1200 for one child on his $1400 monthly income before taxes. Many of my army buddies with kids had similar situations for their child support. It is not supposed to be as bad now since they have really changed how things work but it can be interesting what numbers they come up with.

Edit: Also the courts say the money can be used anyway the ex wants as long as the children are cared for.

 

[avengerki]

Oh and which would you prefer a person who can pay a reasonable amount or a person who is unable to pay the amount and becomes a deadbeat?

 

[growing_older]

I don't know anything about the levels of support that might have been set in your case. Nor anything about systemic problems with formulas used to set child support for military dependents. What I do know is that courts in my state do not take the wishes of the custodial parent into consideration in setting child support amounts. There are too many possible pressures that could be applied to that parent or other agendas that they might be willing to sacrifice the interests of the children to accomplish.

Not saying that any of that applies to you. Just that I know things don't work like that here. You were fortunate (as if that's ever possible in divorce) that the courts were accommodating where you are.