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Old 03-12-2016, 06:59 AM   #41
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What about your daughter's college expenses and future wedding? You seem to be planning no more expenses once she hits 18. Is that your plan for your child/children with your current wife as well?
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Old 03-12-2016, 08:08 AM   #42
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Just remember your real estate holdings and income will likely increase as you age. From my perspective, I don't think your in bad shape for someone your age. I would target 15-20% of your income for retirement savings and budget the remaining $s to live on within reason.
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Old 03-12-2016, 08:24 AM   #43
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What about your daughter's college expenses and future wedding? You seem to be planning no more expenses once she hits 18. Is that your plan for your child/children with your current wife as well?
..teenagers are expensive and you make an excellent wage. In this day and age very few 18 year olds can get by without parental money of some kind.

Child support is not the main issue in your household. Your spouse payed and trained for an advanced degree and is working outside her field for peanuts. As as a matter of fact if you have kids of your own and need daycare, your wife's job will almost go negative. Considering the high cost of housing in CA a successful agent should make a lot of money.....I imagine a teacher in CA will make more then the national average.
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Old 03-12-2016, 08:54 AM   #44
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How am I doing for retirement?

What Papadad111 said. Like everyone else, you've made choices, those choices resulted in consequences and responsibilities, and life events happened beyond your control but nevertheless cost you money. In your case, as in mine, these things mean we cannot sit on a beach with a cooler and fishing rod everyday in our 40s. So what? My dad just retired at 75 and has no idea what to do all day, so your story could play out in an infinite number of unpredictable ways. Look around you and notice that your assets are already vastly larger than most Americans. That head start is worth something to you. Study personal finance, carve out half or more of every raise going forward and shove it in pre-tax accounts. Setbacks will happen but just stay out of needless debt and build your stash. Teach those kids in your life to start early, show them how to do it, and live by example, too. Age 59.5 will be on the horizon sooner than you can possibly imagine, yet you will have a large pile that your friends won't, which means you will have OPTIONS and can figure things out at that point. For example, maybe you won't be able to sit all day with your cooler at Malibu but you could in Mexico or Costa Rica, and invite all of your friends who will work till 70 to come visit during their vacations.
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Old 03-12-2016, 09:12 AM   #45
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How did you get to 550? Were there any major cash in-flows like inheritances or bonuses that helped speed things up? Is that inclusive of real estate?

No realestate in that number, just savings and investments. No inheritances. It's just years of putting savings before all else, putting it all in stock index funds, and working hard at increasing my salary.


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Old 03-12-2016, 09:13 AM   #46
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How am I doing for retirement?

And, I don't even have a degree, which also means I didn't have any debt.

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Old 03-12-2016, 09:18 AM   #47
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PS Because I can't help myself: There is some typical American Consumer Nonsense above implying your retirement plan is miscalculated because you must pay for kids' expensive weddings. LOL! We paid for our own, had a blast without in-law interference, and are still married 20 years later. My brother just got married at the courthouse. And who says your kids' educations must cost you your retirement plans? Read some Dave Ramsey and think through your options for yourself.
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Old 03-12-2016, 09:24 AM   #48
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I'm often considered an outlier on this forum so take this with a gain of salt. When I was your age, I made far less than you (inflation adjusted), was in debt, had a negative net worth, didn't live below my means and my wife was a stay at home mom. Less than 30 years later, I retired with millions and zero debt. Wife never worked, I didn't win the lottery, no inheritance, etc.

Life is somewhat a gamble and series of personal choices for most of us. I never practiced LBYM (still don't), but I did find a better paying job with great benefits and growth opportunities. Between that, hard work, "reasonable savings" and maxing out my 401k seemed to work pretty well for me. YMMV.....
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Old 03-12-2016, 09:39 AM   #49
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PS Because I can't help myself: There is some typical American Consumer Nonsense above implying your retirement plan is miscalculated because you must pay for kids' expensive weddings. LOL! We paid for our own, had a blast without in-law interference, and are still married 20 years later. My brother just got married at the courthouse. And who says your kids' educations must cost you your retirement plans? Read some Dave Ramsey and think through your options for yourself.
I agree with what you wrote but there is a difference between paying for ALL those extras and assuming the day your kid turns 18 your child expenses will be over!
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Old 03-12-2016, 09:43 AM   #50
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I agree with what you wrote but there is a difference between paying for ALL those extras and assuming the day your kid turns 18 your child expenses will be over!
Yes. Thank you Ivinsfan. I did not mean to imply that he should, but that the concept of no more expenses once a child hits 18, is not typical. And it is unclear to me if he has or will have children with his current wife. I thought I saw a reference to a fiancee as well as current wife.
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Old 03-12-2016, 10:58 AM   #51
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I think you are doing quite well. At 32 you are probably only 6 to 8 years into your career. In the early stages you usually need to save for a home, cars and furnishings. It's harder to max out retirement accounts when you are young.

You have a good income and your assets will grow substantially over time. I'm a big saver, but I wouldn't sacrifice everything just to save more. Set a reasonable budget, be efficient with your money and you will be fine.
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Old 03-12-2016, 11:09 AM   #52
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Betterment / Wealthfront / Acorns all charge about .25% year in fees.
Most of my Fidelity is in FIDELITY FREEDOM 2050 which has .75% expense ratio.
You may want to take a look Fidelity's index funds to lower your expense ratio.

https://www.fidelity.com/mutual-fund...hy-index-funds

I'd take a long look at the advantages of a pension that can come from a teaching position.

The important thing here is that you're young and you recognize that you need to pay attention to retirement savings. You're farther ahead than I was at your age.
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Old 03-12-2016, 11:27 AM   #53
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In the post # 3, Masterblaster provided one measure to test how you are doing. Another interesting data point is Scott Burn's Wealth Scoreboard developed from government data.


ref: The Wealth Scoreboard: chasing the big dogs | Dallas Morning News

The more to the right of this table you are....the more frugal you would need to be to retire early. More to the left makes retirement easier. Also gives a pretty good view of how much a person's net worth would need to increase over the years to improve your chances of retirement. Another way to generate ideas on where you are would be to run tools such as FIRECalc: A different kind of retirement calculator with whatever assumptions you feel realistic in terms of salary increases, expenses, etc...
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Old 03-12-2016, 12:25 PM   #54
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OP: You wrote you had $5000 in credit card debt to be paid off "soon." I suggest you change that to "now." It seems to me that most people carrying credit card debt never get out from under that, despite their best intention.
I don't see why you just don't take $5000 from your Money Market and pay it off. From my perspective, you should also pay off the student debt, but I don't want to see this get into an off-thread discussion about "good debt."
Paying off the credit card - and then paying in full each month thereafter - sets the right tone for your overall finances of Living Below Your Means.
Just my 2 cents, FWIW.
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Old 03-12-2016, 12:57 PM   #55
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+1 mystang52 it's a mindset thing... in the 1st post he said "no debt" ..I think that was because he doesn't have car or house payments..but debt is debt....
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Old 03-12-2016, 02:52 PM   #56
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Good discussion here that can apply to many younger persons. I do agree the pay yourself first is very important. LBYM on the rest, get rid of credit card and student loan debt. Once you have 401k eligibility, max that out. The value of compounding can not be dismissed. For now until you have 401k, do an IRA and get some deductibility.

Look at all areas of your budget. Starbucks for morning coffee? No, make your own, as an example. Every dollar you don't spend is one you can save.

Overall, I don't think you are in bad shape. You do need to increase savings though to be able to retire early, in my opinion. Also given your timeframe, you should be in pretty aggressive portfolio choices, and high percentage in stocks to maximize potential growth. Your role is to just keep putting money in, then let the market roller coaster do its thing; all that really matters is the price you buy and the price you sell. What happens between does not matter, so do not panic and sell off when it turns low, just ride it out. You will be better off in the end the less you interfere. Just pick good solid investments or funds and let it accumulate over time.
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Old 03-13-2016, 10:09 AM   #57
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Quote:
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You may want to take a look Fidelity's index funds to lower your expense ratio.

https://www.fidelity.com/mutual-fund...hy-index-funds

I'd take a long look at the advantages of a pension that can come from a teaching position.

The important thing here is that you're young and you recognize that you need to pay attention to retirement savings. You're farther ahead than I was at your age.

That is definitely true. Each individual teacher pensions systems are different though and need to be examined. However, I assume you are just thinking yearly salary, but not the retirement benefit of a pension that the teaching degree would provide. I have several friends who were teachers who retired with literally no money and live great on their pensions alone.
Although I drifted into administration later in my career thus increasing my pension, I could literally take my all investment cash today and throw it all out with the trash and it wouldn't effect my retirement lifestyle one bit.


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Old 03-13-2016, 05:05 PM   #58
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FWIW I think you're doing way better than the typical household at your age, and the input from the previous posts backs this up, but I don't think that's the kind of question you're asking. You're probably wondering how long it will take to reach FI so that you can RE. In my opinion this depends on how long it will take you to accumulate an investment portfolio value, including financial assets and real estate except for what you live in, of 33x your total net annual expenses after pensions, social security, etc. This would put you at a 3% withdrawal rate which should be sustainable for life.

There are two ways to accelerate this process, and each household has to decide for themselves whether either is worth the effort-- one is to increase savings, and the other is to decrease expenses. Note that income won't matter in and of itself because if it doesn't increase savings, it doesn't help. In fact if savings increases less than expenses, a higher income could actually impede progress.

Your OP mentioned investment strategy, and I think the consensus here is that at your age a 100% allocation to low-cost widely diversified stock index funds available from Vanguard or Fidelity is the best home for your paper assets. Dollar cost averaging by regularly putting your savings into these funds will for most people outperform active trading over the long term. Since these kinds of assets tend to correlate, the breakdown of what percentages in which funds won't matter very much, I think what got most of us here was an unusually high savings rate.
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Old 03-13-2016, 05:10 PM   #59
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I think you're doing just fine, geoffblinks. Heck, when I turned 32, I was not employed, and my net worth was just about zero. And when I did get a job, almost two years later, I made substantially less than you are making now, even adjusted for inflation. 25 years later, things are working out pretty well.

So my advice is simple -- stick with it, work hard and smart, advance in your career, watch your spending, save a reasonable amount, invest simply but wisely, live an honorable life. That's all it really takes.
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Old 03-13-2016, 07:58 PM   #60
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The numbers might not be there right now, but if your DW is doubling her closings, she is on the right track. Real Estate is a tough market, but if she is enjoying it and moving up, it is more important that you to support her than to get to RE a bit earlier. That is something you and her need to decide. I think it is much more important than a specific RE date years in the future. If she continues to be more successful, her earnings will more than make up the difference later on.
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