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Hello, 30 year old FI seeker
Old 02-10-2019, 10:00 AM   #1
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Hello, 30 year old FI seeker

Hi there. You may be able to see our stats in the biography field but thought I’d introduce myself and family as we’re new to the forum. I’m a 30 year old financial advisor married to a 28 year old registered nurse and we have a young child.

Our “why” for FI is to gain stability for our family and to control the little time that we get on this planet. I experienced some financial hardships when my parent’s seemingly otherwise middle class life went up in flames around ‘07/‘08. I want to provide security for my loved ones so that they’re less likely to go through something similar.

I’ve never been a high earner during the 6 years post-college though we’ve done a nice job of bringing home a combined salary north of $100k the last few. I received a raise recently that makes me feel like I’m finally in the “good earner” club. Hopefully I can reach six figures soon. Just three years ago I accepted an entry level position for $40k. Now my base is roughly $90k with bonus potential bringing it upwards of $110k. Spouse works part time post-baby, making $25k-$30k.

Our current financial situation: our house is valued at ~$400k with a $268k mortgage (3.375% fixed 15 year) outstanding. No other debts. We have $290k-$300k in retirement accounts (401k, IRA, HSA) and a few thousand in a 529. Our cash is lighter than usual at $15k thanks to some recent home improvements. May bump this back to $25k or keep it there since we have two income streams. All that said, net worth, with our $5k car included, comes to about $450k.

Our base expenses are $51k each year. Without the mortgage payment (PI) it drops to roughly $25k. This is our sustainable FI spending number.

We’re contributing $19k to my 401k, $12k to IRAs, $4k to spouse’s 403b, $4k to child’s 529, $2k to HSA, and paying off $20k-$30k of mortgage principal (depending on bonus) thanks to the recent bump in pay. I receive 5% employer match, spouse gets a match but it’s minimal. If returning to FT work in the future, the match would be more significant and the 403b could be maxed out.

My numbers have our FI date roughly 8-10 years out. This is mostly tied to the mortgage payoff timing. We could reach base FI sooner if knocking that out quickly became top priority but it’d be at the expense of investing. I’m not sure that’s wise given our time to college (16 years) being a short runway.

We’ve considered reaching FI as soon as possible and having my spouse pick up some travel nurse gigs once or twice a year for health insurance and bare expense coverage. We’ll see what we decide as life happens. We’re also in a state where housing is relatively expensive. Downsizing to a cheaper locale to be near family and reduce debt could be an option in a few years as well.

That’s my wall of text. Thanks for welcoming me to the forum. Happy to read your situations as well!
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Old 02-10-2019, 10:22 AM   #2
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Welcome! Sounds like you have a great jump start.
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Old 02-10-2019, 11:10 AM   #3
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Hi and welcome! You are way ahead than we were at your age. There's a thread here about tax free home appreciation (primary home) under $250K. I keep going back to that because the more I think about it, the nicer it is. You're in beautiful Colorado. Seems housing would appreciate there.


Anyway, $25K spending without mortgage is phenomenal, especially with a child. Is that total spending-mortgage? Property insurance and all the insurances? I sure would like to know how you do that. DH/me can't get below $58K and we don't have a mortgage or car payment. We're pretty frugal.
Keep that up and you're in great shape!
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Old 02-10-2019, 11:32 AM   #4
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Originally Posted by LivingTheory View Post
We’re contributing $19k to my 401k, $12k to IRAs, $4k to spouse’s 403b, $4k to child’s 529, $2k to HSA,
Hello, and it sounds like you're doing well. Is there a reason you're not maxing out HSA contributions? Done via payroll, you also save on FICA and Medicare taxes.
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Old 02-10-2019, 11:39 AM   #5
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Hi and welcome! You are way ahead than we were at your age. There's a thread here about tax free home appreciation (primary home) under $250K. I keep going back to that because the more I think about it, the nicer it is. You're in beautiful Colorado. Seems housing would appreciate there.


Anyway, $25K spending without mortgage is phenomenal, especially with a child. Is that total spending-mortgage? Property insurance and all the insurances? I sure would like to know how you do that. DH/me can't get below $58K and we don't have a mortgage or car payment. We're pretty frugal.
Keep that up and you're in great shape!
Yeah we’ll see about home appreciation. If it happens, great. If not, no sweat. Since we’re married we can shield $500k in primary residence capital gain. Agree that it’s a huge benefit.

That is total spending. Homeowners insurance and property tax is $250/month. Food is $250 (groceries) + $80 (work lunches). Entertainment is $100. Etc. I’m sure there are places that we’re less frugal than we should be but overall we’ve done a great job of avoiding lifestyle creep. The one exception being the house. 25 year old me wanted to stick to a $200k-$250k home.
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Old 02-10-2019, 11:43 AM   #6
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Is there a reason you're not maxing out HSA contributions? Done via payroll, you also save on FICA and Medicare taxes.
It’s just further down the list of priorities right now. No huge reason other than the flow chart of which buckets we want to fill first. Our contributions are through payroll so they’re avoiding FICA and FUTA. If we made another few thousand then we’d likely increase the 403b and then the HSA.
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Old 02-10-2019, 11:47 AM   #7
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Welcome! You’re doing great! Congrats on the progress. I look forward to following your story.
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Old 02-10-2019, 02:49 PM   #8
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Welcome! You’re doing great! Congrats on the progress. I look forward to following your story.
Thanks you too! Looks like we’re on pretty similar timelines. Best of luck to you.
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Old 02-10-2019, 02:50 PM   #9
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Thanks! You too.
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Old 02-10-2019, 06:35 PM   #10
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Welcome!
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Old 02-11-2019, 04:06 PM   #11
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Best wishes! What do you project your net investable assets to be when you hit 10 years from now? What will your budget be? I'm guessing you'll hit ~$1M. By then, inflation will have cut your spending power, and you'll need ~40% more to live on than today. And you'll only be 40, with a 60-year retirement horizon.

For me, at 53, $1M wasn't enough to secure my future and cover my travel spending plans. In my OMY syndrome, I started with a goal of $1M, and after marrying then looking at costs of travel for 2, worked its way up to $1.5M, and then $2M. By working longer, I'll be able to take twice as long/many vacations per year.

Besides wanting to retire early, what do you want to do with your time at 40?
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Old 02-11-2019, 04:12 PM   #12
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You are off on a great start. Just keep it up and you will have success, barring any unforeseen problems. You may want to work a little longer to put some cushion into your FI numbers. Stay the course and let compounding work for you.
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Old 02-11-2019, 08:35 PM   #13
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Best wishes! What do you project your net investable assets to be when you hit 10 years from now? What will your budget be? I'm guessing you'll hit ~$1M. By then, inflation will have cut your spending power, and you'll need ~40% more to live on than today. And you'll only be 40, with a 60-year retirement horizon.

For me, at 53, $1M wasn't enough to secure my future and cover my travel spending plans. In my OMY syndrome, I started with a goal of $1M, and after marrying then looking at costs of travel for 2, worked its way up to $1.5M, and then $2M. By working longer, I'll be able to take twice as long/many vacations per year.

Besides wanting to retire early, what do you want to do with your time at 40?
Invested assets (excluding 529) should be about $1.1MM in 10 years. This is in current dollars so that comparing against expenses is apples-to-apples. Actual balance in future dollars would be closer to $1.3MM. I'm not cocky enough to think I know what age 40 looks like though (having seen how much life changes from 20 to 30). Assuming 7% growth with 2% inflation and mortgage payoff at year 8, with newly freed up cash flow going to investments. Retirement spending will be a bit looser with at least $5k per year dedicated to travel. All of this is very fluid and I'm more focused on FI than RE. I'll step back when it's the right time for our family but having the option is what matters.

Hope that answers your questions. I know the OMY syndrome is very real and can add up quick. Heck, some LeanFIRE types would pull the trigger already in our shoes. To each their own.

As for time spent in retirement, I'd like to be outside when it's a nice day and hang at home when it's not. Time with family is what matters to me and always has. Hopefully we'll take trips to various towns and experience lots of different views. My spouse and I are from very different places so having an open timeline to take in a multitude of things is important to us. I guess all of that is to say that I'll be able to focus on the sweetness of the journey more than my schedule allows now.
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Old 02-11-2019, 08:41 PM   #14
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You are off on a great start. Just keep it up and you will have success, barring any unforeseen problems. You may want to work a little longer to put some cushion into your FI numbers. Stay the course and let compounding work for you.
Thank you. The RE date is very fluid, I'm more focused on crossing the FI line for security and peace of mind. I have a good deal of increased earning potential in the next 2-5 years so modeling at our current income is a bit of a conservative approach. Yes, layoffs and reduced income can still occur but it's a rather realistic picture given our fields and professional ceilings.

Some part of me loves the thought of reaching FI and just piling on the money during our highest earning years when the mortgage is completely gone. That may be my greed showing though. I bet I'd look for RE or a lighter workload before actually doing that. Nice to dream still. Good luck to you!
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Old 02-12-2019, 04:08 PM   #15
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The 25K non-mortgage burn rate sounds light (to me)... I'm in a LCOL area and squeeze each penny till it screams and I burn 33K for just the 2 of us. Have you factored in spending for the occasional big ticket item like replacing the car? A new roof? etc.
You're an FA so you know all the tools and the math involved. I'm a terminal conservative/pessimist bias so the plan sounds thin to me and I'm only trying to cover 27 years post retirement whereas you're shooting for almost double that.
Regardless, you're in better shape than the vast majority of people who have to spend 2x what they take home. LBYM and worst case you can weather a storm along the way to your goal... I'd just beef up the after-tax/cash savings for that storm.
Good luck!
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Old 02-15-2019, 11:46 PM   #16
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The $25k spend is mostly just where our regular spending puts us today. Our number to actually RE includes more buffer and I've run comprehensive plans using $30k - $33k with varying probabilities of success. Not much point getting hung up on the difference between 80% and 95% when you're almost a decade away though so we're just making as much as possible and pushing forward.

How we handle healthcare will play a huge role in what the first few years of retirement look like. Private insurance is an option and so is my spouse working 2 or 3 shifts per month to maintain benefits as a part time employee. We may reach FI with zero desire to pull back on work, leading to us padding the nest egg considerably over a few short years. Who knows. We also keep some sinking funds for home repairs, car maintenance, etc. in actual cash so they aren't reflected in the $15k savings/checking accounts.

My philosophy is to do the best I can with anything that I receive day to day and let the big picture work itself out. Getting to $1mm net worth in our mid-30s and having $1mm invested by 40 are both positions of strength that have zero downside. As for the rest, that's the fun part of getting to tweak and adjust as life happens.
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Old 02-16-2019, 12:01 AM   #17
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On a side note, I just found out that I'm going to make six figures for the first time in my life. With my annual bonus amount known, I'm now on track to finish the year just above $100,000! That's so satisfying to write.

I haven't been a high earner ever in my life even though our household income has been up there some years. To go from $44,000 to $100,000+ in a matter of three years is a huge accomplishment of which I'm very proud. Hopefully you can indulge me this brag as I celebrate passing a very meaningful benchmark.

One of my goals when I turned 30 a few months ago was to make a six figure income before 40. I was earning $60,000 at the time. In the few short months since, I've received a sizeable promotion and exceeded what I thought was my bonus potential at year end. All of this has me on track to meet my 10-year goal in year 1!

Thank you for the kind words and encouragement in this thread so far. I can see a path to $200,000 as a household within five years. Lots of unknowns in order to get there but I think I found my new "30s goal", at least financially.
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Old 02-16-2019, 07:35 AM   #18
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^ the power of goal-setting and grit. Well done!
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Old 02-19-2019, 02:25 PM   #19
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On a side note, ...finish the year just above $100,000! That's so satisfying to write.

Wait until you see it show up as over 100k of reported earnings on SocialSecurity.gov



Don't end up in this weird place where I am...where I am constantly evaluating my BS vs Financial reward scale. Seems as I age, I am willing to accept less BS for Less Money.



You are doing well and are at least 6 or 7 years ahead of most of your peers so early in life.
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Old 02-23-2019, 10:00 AM   #20
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Congrat's on your situation. Celebrate/enjoy clearing 6 figures, but as you are doing I suggest you continue to live below your means as that is the only path to FI. I got too focused on that the last 15 years that when I hit FI after bumping up # several times, I find myself a little confused about what's next. My advice would be to not let FI be a singular focus. Continue to think about what you want out of your career and make sure to enjoy the ride (not talking about spending $, but how you spend your time).
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