I recently found these forums and thought I would introduce myself. I am 23 and just beginning my adventure. I am not necessarily aiming for early retirement. I would love the financial independence though. That must be a truly awesome feeling to know that if you were fired from your job or simply decided you didn't want to work you could maintain your lifestyle with little hiccups.
Anyway, here is where I currently am.
401(k) - $5,300 (Vanguard Target retirement 2045)
Roth IRA - $9,100 (Vanguard Target retirement 2050)
Savings - $4,000
2007 was my first year with a real job so I learned a lot. I was only contributing 10% pretax and had the rest of my cash in a high yield savings account. I planned to use the money for a house. Then I read and after countless hours of analyzing I realized the money was better spent in an IRA. So at the beginning of this year I dumped $9,000 into my 2007/8 Roth IRA. I also got serious about my finances and realized that I could up my 401k contribution to the maximum allowed and still save around $1,000 a month for a home.
So my plan is to continue maxing out 401k and saving for a home. At the beginning of each year I will rob my home savings to fund my Roth IRA for that year. According to my calculations I should be able to purchase a home in May of 2009 with my savings (and $10,000 from my company for completing my masters degree). That's if it makes sense financially. My rent is pretty cheap and is supposedly locked in to increasing only 3% per year as long as I stay here. It may make more sense financially at the time to continue to rent and invest the money. I really don't know.
I am fortunate to make good money at work, but I have really been thinking of starting some kind of small business to bring in extra revenue. Something where I could invest less than $5,000. I think I have a good idea. I have a relative that owns a carpet cleaning business. There's little capital to buy. It could all be purchased for a few thousand dollars and she makes good money. Anyone have any ideas like this where you can invest a little capital and with "elbow grease" can actually make a little decent change? My brother wants a restaurant. I have little doubt that he could actually handle something like that. We both have experience and he is the type of person who would be a good manager with my financial backing, but that's a lot of money to come up with up front. So I may continue to plan and start something this summer when another one of my brothers will be available to help oversee things.
According to some retirement calculators with me investing $20,000 annually when I retire at 65 I should have somewhere around $10,000,000 depending upon interest rate. I suppose this number will actually be higher since my pay should increase along with maximum Roth and 401k contribution limits.
I also don't count on any pension, matching 401k contribution, or SS because:
1) I don't trust the company I work for to still be providing pensions in 40 years when I retire let alone in 60 years when I would be in the 70s and 80s and need it
2) My company matching contributions stink. They match like 4% in company stock and you aren't vested until after 3 years. I would rather not worry about it. If I get it, great. I guess it could actually be nice that they do company stock though. It means I can contribute more to my 401k and essentially "double up" my retirement savings.
3) I don't rely on SS because I would rather not rely on the government for my financial well being in retirement. From a lot of the things I have read, a slight reduction in benefits will allow SS to be funded for many more years so I could still catch a part of it. But, realistically, I will be 65 in 2050. We can't even imagine what the world will be like then. Lets just hope the stock market still averages about a 10% rate of return
Anyway, that's where I am at in my life. A single guy with no kids renting a house. I look forward to reading more on here.
Anyway, here is where I currently am.
401(k) - $5,300 (Vanguard Target retirement 2045)
Roth IRA - $9,100 (Vanguard Target retirement 2050)
Savings - $4,000
2007 was my first year with a real job so I learned a lot. I was only contributing 10% pretax and had the rest of my cash in a high yield savings account. I planned to use the money for a house. Then I read and after countless hours of analyzing I realized the money was better spent in an IRA. So at the beginning of this year I dumped $9,000 into my 2007/8 Roth IRA. I also got serious about my finances and realized that I could up my 401k contribution to the maximum allowed and still save around $1,000 a month for a home.
So my plan is to continue maxing out 401k and saving for a home. At the beginning of each year I will rob my home savings to fund my Roth IRA for that year. According to my calculations I should be able to purchase a home in May of 2009 with my savings (and $10,000 from my company for completing my masters degree). That's if it makes sense financially. My rent is pretty cheap and is supposedly locked in to increasing only 3% per year as long as I stay here. It may make more sense financially at the time to continue to rent and invest the money. I really don't know.
I am fortunate to make good money at work, but I have really been thinking of starting some kind of small business to bring in extra revenue. Something where I could invest less than $5,000. I think I have a good idea. I have a relative that owns a carpet cleaning business. There's little capital to buy. It could all be purchased for a few thousand dollars and she makes good money. Anyone have any ideas like this where you can invest a little capital and with "elbow grease" can actually make a little decent change? My brother wants a restaurant. I have little doubt that he could actually handle something like that. We both have experience and he is the type of person who would be a good manager with my financial backing, but that's a lot of money to come up with up front. So I may continue to plan and start something this summer when another one of my brothers will be available to help oversee things.
According to some retirement calculators with me investing $20,000 annually when I retire at 65 I should have somewhere around $10,000,000 depending upon interest rate. I suppose this number will actually be higher since my pay should increase along with maximum Roth and 401k contribution limits.
I also don't count on any pension, matching 401k contribution, or SS because:
1) I don't trust the company I work for to still be providing pensions in 40 years when I retire let alone in 60 years when I would be in the 70s and 80s and need it
2) My company matching contributions stink. They match like 4% in company stock and you aren't vested until after 3 years. I would rather not worry about it. If I get it, great. I guess it could actually be nice that they do company stock though. It means I can contribute more to my 401k and essentially "double up" my retirement savings.
3) I don't rely on SS because I would rather not rely on the government for my financial well being in retirement. From a lot of the things I have read, a slight reduction in benefits will allow SS to be funded for many more years so I could still catch a part of it. But, realistically, I will be 65 in 2050. We can't even imagine what the world will be like then. Lets just hope the stock market still averages about a 10% rate of return
Anyway, that's where I am at in my life. A single guy with no kids renting a house. I look forward to reading more on here.
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