Another 24 year old. Don't shoot!

[Lambda]

After reading through AirJordan's introduction and reception the past few days, I want to start off by saying, "Don't shoot!"

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I've been lurking for a little over two and a half years and decided that I would finally say hello and give the community my thanks for the inspiration everyone here has given me.

I came across The Retire Early HomePage while searching for information about investing and how to set up a 401k during my job search. All of the information there began to excite me, "Hey, this early retirement thing is possible[!], and here's a logical gameplan of how you can achieve it."

From there, I discovered dory's forums and have been soaking in all of the posts. One of the earliest posts I remember had the tip, "Live like a college student for as long as possible." I had been out of college for a year and a half trying to start my own (failed) business, and fondly remembered my very recent days at university. Living like a college student didn't seem so bad, and as I work I'd be able to buy my freedom on the installment plan. One week at a time.

I set a goal to retire in 10 years from the day I started working in the corporate world (520 weeks!). If I fail at my goal, and it takes me twice as long, I'll still be able to retire at 42. I've been at this for just shy of two and a half years, saving half my pre-tax income and have been amazed at the results. All of the little things have added up and amazingly enough, I'm on schedule. 394 weeks to go!

While most of my money is in index funds, I recently took the forum's advice and started up my testosterone driven, "I'm smarter then the market", stupid money account with a small portion of my portfolio. After last week, I'm thankful that it's only a small portion of my portfolio.

The best part is that I don't feel depraved or at a loss because of my plan, I have simple wants and am enjoying the journey. I come here for inspiration and insights.

Thank you everyone. Hopefully I can contribute back some of what I have received.

 

[lswswein]

Welcome to the board Lambda. We don't shoot, but we are prepared to dish it out if you come guns blazing.

So are you an engineer? Just asking because you picked Lambda. So what business did you start?

Welcome again!
-h

 

[DRiP Guy]

You sound like a great addition to the board! I don't think many people get the 'treatment' you saw AJ get, and I doubt you will get it yourself.

The idea of 'living like a college student' (LBYM) is a very good foundation concept!

Sounds like you have a plan, and are seeing progress already. Being able to save 1/2 of your pretax income is an awesome feat.

8)

 

[Lambda]

So are you an engineer? Just asking because you picked Lambda. So what business did you start?

Software engineer, if you count us as engineers.

And it was a computer business writing a database application for a niche market with a local entrepreneur. I would program for the cheap in exchange for a percentage of profits when the product shipped. After a year of working on the program, we had almost nothing to show for it except for some design documents and a several prototypes. I share much of the blame for the poor results. I didn't take the business as seriously as I should have, and my inexperience didn't help. My partner had difficulty communicating his "vision" and the requirements changed constantly. We ended up parting ways when both of us realized that there was no end in sight. I hope he succeeds one day and finds someone able to produce his vision, it's a great idea for a product.

 

[trixs]

Lambda,

Im curious if you know anyone in real life that actually has the same plan as you? The people I know think I am crazy to save a penny let alone try and retire young.

-trixs

 

[Lambda]

Im curious if you know anyone in real life that actually has the same plan as you? The people I know think I am crazy to save a penny let alone try and retire young.

I've actually been surprised. I'm fairly open about my plans, so when people hear about what I'm doing, they'll generally mention if they know of anyone else. "Ohh yeah, Bob in accounting is a frugal save-a-holic too!"

I recently found out that one of my close co-worker buddies has more saved then me. Considering what percentage of my income I save, I was amazed. He's slightly older, but it's still quite an accomplishment.

A different co-worker caught me browsing these forums while on a business trip and asked me, "Reading the retirement forums? What do you think of John Galt?" He recognized the forums by just the look and feel of the board from across the room.

I don't think that their goals are quite the same as mine, but there are young engineers out there saving. My personal theory is that my age group of software developers got to see the dot com bubble burst while going through college and learned that employment can be extremely temporary.

Not everyone is saving like mad, and I do get a few funny looks, but for the most part, it's been positive.

So to all my co-workers out there that recognize me, "Hi!"

On the openness part, I'll probably become more secretive the closer I get. For now, the people that don't believe in savings probably think I'm joking or just an ignorant young pup.

 

[Texas Proud]

AJ came an threw down a challenge and got bitched slapped and didn't like it... so threw a hissy fit.... and still trolls on... maybe he wil change in the future, but since he said he is a driven person I am sure he thinks he is smarter than people on this board..

Take a look at the tax thread.. there are MANY people here who paid over $40K in taxes... and since most are tax efficient in their investing... well, you get the idea... so there are many who are smarter than the average group on here... add to the forum and you will be pleased... tell people they are stupid because of their investing (and some with $10 mill!!!)... well, look at AJ...

 

[haha]

The best part is that I don't feel depraved or at a loss because of my plan, I have simple wants and am enjoying the journey. I come here for inspiration and insights.

This sounds more interesting than the usual newby story. I especially like it that you don't feel depraved. Even more so, I wonder what it is that you are doing that makes depravity an issue for you?

If you are a woman, feel free to answer in as much detail as you can recall. If a man, please keep it brief.

Ha

PS: I am struggling with insomnia tonight, so I would like to hear from anyone else who is dealing with issues of depravity. It might make me feel better.

 

[Lambda]

Take a look at the tax thread.. there are MANY people here who paid over $40K in taxes... and since most are tax efficient in their investing... well, you get the idea...

Is it possible to save $65k while making $100k?

Looking over my spreadsheet from 2005, thanks to overtime and travel that year, I made ~$60k. I put away $14k in my 401k, bringing my taxable income to $46k. If I had invested $4k in a normal IRA instead of a ROTH, that would have brought my taxable income down to $42k. Using the standard deduction, my taxes were around $11k (includes SS), leaving me with $31k in what I consider my take home pay. Since my goal was to save 50% of my pre-tax income, that means that I would have to save another $12k [ ($60k / 2) - ($14k + $4k) ]. So $19k to live off of. I live in a cheap area and paid ~$9k in rent and utilities that year. Leaving ~$800 each month. Minus food and insurance, maybe $400 in fun money each month.

Since 2005, I've found even cheaper methods of living bringing rent/utilities down to the low end of $5k.

So if I had been as frugal and as efficient as possible, I could have saved: $30k + $4k (cheaper rent) + $5k (no fun money and eating out less) = $39k with an income of $60k.

AJ's tax burden would obviously be higher, but I could potentially see saving an extra $26k out of $40k earned. If he includes company 401k matching or stock option incentives as money "saved", it makes it slightly more plausible.

A big stretch, but possible.

 

[Lambda]

This sounds more interesting than the usual newby story. I especially like it that you don't feel depraved. Even more so, I wonder what it is that you are doing that makes depravity an issue for you?

Perhaps deprived was the word I was looking for.

Good catch. I'm a male, so I'll leave the post at that.

 

[Donzo]

Hey Lambda,

Wow, talk about a solid - EARLY start! Good for you!.. I got out at 49 - if I had started like you......
Just make sure to have fun along the way - you are only young once. I have alot of great memories of my 20s - enjoy the process...not just the plan.

Congrats at getting your stuff together so young

Donzo

 

[haha]

Since 2005, I've found even cheaper methods of living bringing rent/utilities down to the low end of $5k.

Could you elaborate on that?

Ha

 

[kendofire]

Since 2005, I've found even cheaper methods of living bringing rent/utilities down to the low end of $5k.

Could you share how you did this? I live in a large midwestern city and the best I can do is just less than $8k.

 

[Lambda]

Could you share how you did this? I live in a large midwestern city and the best I can do is just less than $8k.

I was previously living in a nice apartment complex by myself. But it was far too large for my tastes. My hobbies don't take up much space, and I was used to a dorm room existence. It was also lonely.

In addition, I had been reading way too many Young Dreamer threads were people mentioned full time travel jobs. I'm still young, and I thought it would be a grand adventure.

Because of the combination of the above, I didn't renew my lease, and didn't want to sign another one if at all possible. I went to Craigslist and found a room to rent from a local family. I didn't have to sign a lease, rent is cheaper compared to an apartment, I only pay a fraction in utility costs, and I get the company of the other people at the house. It was a great win.

Of course, as soon as I mention that I would like to travel more at work, they locked me down in cube-ville and didn't let me leave for over a year. I'm happy anyways, and am glad I found my current place.

 

[Texas Proud]

Lamda,

My point was there are a lot of people who pay over $40K in taxes each year.. you don't pay that much unless you make a lot of money... it was not directed at AJ for his savings rate which your post seem to think I was talking about..

To be clear... there are many people on this board who are smart, rich, good investors and the polls show that... why would you come in and tell people who are SUCCESFUL that they don't know what they are talking about when you are 24 and have not been in a major down market, lost more than a years salary in a down market in less than a month... and think you know more.... do you understand

 

[Lambda]

My point was there are a lot of people who pay over $40K in taxes each year.. you don't pay that much unless you make a lot of money... it was not directed at AJ for his savings rate which your post seem to think I was talking about..

To be clear... there are many people on this board who are smart, rich, good investors and the polls show that... why would you come in and tell people who are SUCCESFUL that they don't know what they are talking about when you are 24 and have not been in a major down market, lost more than a years salary in a down market in less than a month... and think you know more.... do you understand

Thank you for clearing that up. I misread it as "People in AJ's position pay over $40k in taxes each year. Therefore, saving $65k on his income is impossible. Therefore, everything else AJ is saying is untrue."

I do understand why people came off disliking him. Before joining any community, I sit back and observe the customs and beliefs of the community at large. Only then do I decide if I want to join or understand if I have something to contribute. If AJ had done that, he would have read the hundreds of posts about indexing, De Gaul, drier sheets, and the reasoning behind all of it. His odds of slapping down a gauntlet and insulting everyone, intentionally or not, would have gone way down.

I'm thankful to be indexing. My "stupid money" account got slapped last week. If I had sold at the peak of both of my picks, I would have been up 12.5% for the year. Instead, I'm barely breaking even after trading fees.

Hmmm.... maybe I'm a master stock picker if I only hold each stock for one month. It's holding stocks for two months that get me. Let's see... 12.5% each month, compounded over 5 years... I'LL MAKE BILLIONS!

I'm also still thankful for my testosterone driven account too. It's fun to dream.

 

[laurence]

I had a testosterone account, too. After a couple of years I gave up on that too and invested in a vanguard value fund per a tip from CuteFuzzyBunny, and it's up about 20% over the last 18 months since then, even with last weeks bang up. I think I'm officially cured. Welcome to the board!

 

[DRiP Guy]

There is something in a lot of us that makes us want to 'play the stocks', and I am glad that I actually got smacked down pretty hard, pretty early, and in a way that made me understand the river is always stronger than the yachtsman. The DRiPs I bought and held served me well. But when I got a brokerage account, and traded, it was too easy to 'research' some hot new prospect, pull out of one dog and try to ride a new one... I never was a day trader or into TA, I thought I was a picker based on fundamentals.

Sheesh.

I was so foolish. I believed that an excellent new product concept, that had new applications of good science, to fill a need in a clearly large potential market, where no other competition existed, led by managers who had 'done' start-ups before, was a route to success. The reality is that the VCs and the inside parties and pretty much everyone but you and your fellow neophytes on whatever board you go speculate and commiserate are the last ones to know, and therefore the ones who hold the bag at the end. Even if you see evidence of malfeasance, the odds of an SEC action or shareholder action are almost nil, and even if you had a class action, guess what happens? You lose even if you prevail. The lawyers are the only ones who clean up.

Anyway, let's just say I scratched that particular itch, and will not be likely to ever forget my lessons learned.

 

[laurence]

I have similar sentiments. I'm just glad I had a 50% loss when my account was 12k, not 120k! Cheap lesson.

 

[AirJordan]

Loads up my .22

 

[DRiP Guy]

Loads up my .22