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Forbes Article: 28-Year-Old Retires in NYC With $2 Million
Old 11-16-2016, 02:20 PM   #1
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Forbes Article: 28-Year-Old Retires in NYC With $2 Million

Was reading this story in forbes today:

Forbes: How This 28-Year-Old retired In NYC With A Net Worth of More Than 2 Million


A 28 year old woman is retired in NYC. Had a career in finance for seven years, now lives on $33k per person/$65k per couple in Manhattan and they amassed over $2 million.

She talks about a 60-40 split of her nest egg coming from saving vs investing.

There are quite a few elements of the lean FIRE movement in the story (they live in a really small walk-up apartment, do their furniture shopping on Craigslist, etc.)

Not everything is applicable for me, but I thought there were some interesting ideas. I'm closing in on the million dollar mark, so I'm taking it as more encouragement to keep going. I'm also currently living in a major city in CA, so how they're navigating the HCOL element was intriguing. Anyone else here FIRE'd in a high cost of living city? Curious how you keep costs down.
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Old 11-16-2016, 04:01 PM   #2
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She says: "When was I going to go on the Europe river cruise with them we’d been talking about for years but which I kept pushing back because I couldn’t find four weeks of vacation time?"

I am not seeing how she's going to do that kind of travel and live for the other 11 months of the year on $32.5K. She's got a pretty frugal lifestyle going for NYC, and I hope she's thought carefully about whether she'll really be happy with it for the next 20 years (which seems like an awfully short planning horizon for a 28-year old, regardless of the family's longevity history.)

Aside from that, if she amassed 60% of her $2.25M nest egg by saving for 7 years, that's $193K/year in savings. Good for her for getting a job that pays over $200K/year straight out of college, but that's not something most new grads can count on. She had a fairly unique opportunity to amass a lot of money in a short amount of time and was able to turn it to her advantage.

As for FIRE in a high CoL area in CA -- yes, we are in that situation. Our strategy was to buy the smallest home that was comfortable in the place we wanted to live, even if it meant we had to work a few more years. We also purchased as early as we could in order to take advantage of the property tax breaks for long-time owners (prop 13). Otherwise, we just made it a point that savings came first. We maxed out our 401Ks and IRAs every year; never took out a loan for a car or took equity out of our home for a vacation. If we couldn't save up for it, we didn't buy it.

DH retired after being laid off at 52, and I retired this year at age 53, so it took us a lot longer than the woman in the article, but we like having a nicer lifestyle and we're satisfied with our situation.
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Old 11-16-2016, 04:11 PM   #3
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She says: "When was I going to go on the Europe river cruise with them we’d been talking about for years but which I kept pushing back because I couldn’t find four weeks of vacation time?"

I am not seeing how she's going to do that kind of travel and live for the other 11 months of the year on $32.5K. She's got a pretty frugal lifestyle going for NYC, and I hope she's thought carefully about whether she'll really be happy with it for the next 20 years (which seems like an awfully short planning horizon for a 28-year old, regardless of the family's longevity history.)

Aside from that, if she amassed 60% of her $2.25M nest egg by saving for 7 years, that's $193K/year in savings. Good for her for getting a job that pays over $200K/year straight out of college, but that's not something most new grads can count on. She had a fairly unique opportunity to amass a lot of money in a short amount of time and was able to turn it to her advantage.

As for FIRE in a high CoL area in CA -- yes, we are in that situation. Our strategy was to buy the smallest home that was comfortable in the place we wanted to live, even if it meant we had to work a few more years. We also purchased as early as we could in order to take advantage of the property tax breaks for long-time owners (prop 13). Otherwise, we just made it a point that savings came first. We maxed out our 401Ks and IRAs every year; never took out a loan for a car or took equity out of our home for a vacation. If we couldn't save up for it, we didn't buy it.

DH retired after being laid off at 52, and I retired this year at age 53, so it took us a lot longer than the woman in the article, but we like having a nicer lifestyle and we're satisfied with our situation.
"they amassed over $2 million".

If there were two of them, then $100K each, no?
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Old 11-16-2016, 05:36 PM   #4
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Since her DH still works although they don't need the $ to pay the bills they will probably use some of the $ he earns for vacations.
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Old 11-16-2016, 05:52 PM   #5
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She writes successful blog. She probably makes more money in "retirement" than 10's of millions make working a full time job. Not that she/they need that income but they do have it and that makes a big difference.
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Old 11-16-2016, 05:55 PM   #6
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I did not realize she had a blog.
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Old 11-16-2016, 06:41 PM   #7
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Yes. It sounded like a publicity push for the blog. Either there was a really really big bonus, an astoundingly high salary for a new grad, an inheritance, or some other unusual circumstance to amass $2 million in 7 years. Details are not given, but they clearly want you to infer it's due to the frugal lifestyle. That likely helps, but it cannot be the whole story.
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Old 11-16-2016, 06:54 PM   #8
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Yes. It sounded like a publicity push for the blog. Either there was a really really big bonus, an astoundingly high salary for a new grad, an inheritance, or some other unusual circumstance to amass $2 million in 7 years. Details are not given, but they clearly want you to infer it's due to the frugal lifestyle. That likely helps, but it cannot be the whole story.
She was a Harvard grad working as an investment banker in Manhattan. I don't think it's unreasonable to assume she averaged over $200K/yr income for those 7 years. She was saving loads of money during one of the biggest bull markets ever and only spending around $24K/yr. Seems very doable to me.
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Old 11-17-2016, 05:49 AM   #9
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She was a Harvard grad working as an investment banker in Manhattan. I don't think it's unreasonable to assume she averaged over $200K/yr income for those 7 years. She was saving loads of money during one of the biggest bull markets ever and only spending around $24K/yr. Seems very doable to me.
LOL, but a whole lot of "Ifs".

Does the average college grad get a job making 200K? I don't know grown adults making that salary.

These articles are so unrealistic to me, reminds me of a tongue in cheek article I saw in a sports magazine about how your kid also could be like Steph Curry.
the article was basically saying about only 1.3% of NCAA seniors are drafted by the NBA. so have a backup plan.

these "you can do it too" articles are the same IMO. sure you could retire in Manhattan at 28....IF.......
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Old 11-17-2016, 06:13 AM   #10
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Does the average college grad get a job making 200K? I don't know grown adults making that salary.
The average college grad does not get $200K right out of college. This person was a Harvard grad who went into one of the highest paying jobs in the highest paying city. Her job should have paid her $100-150K her first year out of school and as much as $350K/yr by the time she was a third year analyst. She estimates 60% of her $2M came from savings(the rest from investment returns) so she only had to save $1.2M or around $170K/yr on avaerage. With her profession and willingness to live frugally, it is very doable. Considering the years in which she was investing(2009-2015), she was probably underestimating the amount of her investment returns. She probably didn't even save $1.2M of her own money to reach $2M.
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Old 11-17-2016, 06:43 AM   #11
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The average college grad does not get $200K right out of college. This person was a Harvard grad who went into one of the highest paying jobs in the highest paying city. Her job should have paid her $100-150K her first year out of school and as much as $350K/yr by the time she was a third year analyst. She estimates 60% of her $2M came from savings(the rest from investment returns) so she only had to save $1.2M or around $170K/yr on avaerage. With her profession and willingness to live frugally, it is very doable. Considering the years in which she was investing(2009-2015), she was probably underestimating the amount of her investment returns. She probably didn't even save $1.2M of her own money to reach $2M.
Definitely but I think that's my point living off a 100k while saving 170 is very doable BUT a world away from the typical college grad. My niece is a teacher, makes about 45k. So yeah write an article about the 28 year old teacher who lived off of 17k a year in NYC. THAT'S the kid who'd impress me.
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Old 11-17-2016, 07:07 AM   #12
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I agree with others that there's quite a few information gaps here. Kudos to her for amassing that nest egg, and living frugally. But with a full-time working husband (not knowing his salary), it's much more comforting to "retire." She also mentioned she is not averse to returning to work at the right job; I think this is a significant comment and implies she is actually on some sort of sabbatical vs actual retirement.
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Old 11-17-2016, 07:12 AM   #13
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I agree with others that there's quite a few information gaps here. Kudos to her for amassing that nest egg, and living frugally. But with a full-time working husband (not knowing his salary), it's much more comforting to "retire." She also mentioned she is not averse to returning to work at the right job; I think this is a significant comment and implies she is actually on some sort of sabbatical vs actual retirement.
Seems to me she simply quite working full time and now is self employed as a writer. Call it a career change or semi-retired. She must be spending at least 8-10 hours a week on writing the blog.
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Forbes Article: 28-Year-Old Retires in NYC With $2 Million
Old 11-17-2016, 10:01 AM   #14
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Forbes Article: 28-Year-Old Retires in NYC With $2 Million

If you've ever read "Bonfire of the Vanities", which describes how most investment bankers live (spend it all, including the bonus you USUALLY get except they can take it away in bad years), she's done an admirable job of LBYM. I'd be shaky about a $2 million nest egg at age 28 in a very HCOL area, but if her husband is still working they don't have to depend on that alone.

ETA: in the first sentence, "her and her husband and dog share..."should be "she and her husband and dog share...". Ack! Don't they have editors anymore?
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Old 11-17-2016, 10:13 AM   #15
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ETA: in the first sentence, "her and her husband and dog share..."should be "she and her husband and dog share...". Ack! Don't they have editors anymore?
I think that should be "don't they teach English anymore?" DW likes to watch those Ghost Hunter-type shows, and almost without fail every one of them uses "Joe and myself did this or that." Drives me nuts! One of my old teachers told me the easy way to figure out the right usage is to try it singularly instead of plural. So it's easy to see that no one would say "myself went upstairs." I can understand it once or twice, but every single show in the entire genre? Aargh!
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Old 11-17-2016, 10:20 AM   #16
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Old 11-17-2016, 12:41 PM   #17
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Just another fluff article by forbes. Absolutely no details how she made her money. For nyc those expenses are really low. Im not buying it.
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Old 11-17-2016, 12:53 PM   #18
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Old 11-17-2016, 01:01 PM   #19
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Old 11-17-2016, 01:05 PM   #20
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I used to subscribe to Forbes. That is until one issue a few years ago had two articles that made me reconsider. One was on the "somewhat rich" at $40mm net worth and the other was on a couple graduating from college with $1.6mm in net worth, wondering how to invest. I told them by letter that the issue made me realize as a mere millionaire, they were catering to people out of my league and to cancel my subscription.
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