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32 and finally working towards early retirement
Old 07-26-2016, 02:02 AM   #1
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32 and finally working towards early retirement

It is encouraging to see there are people who are not only dreaming but close to realizing their goals of early retirement!

Not too long ago I was truly was right in the thick of the rat race. I was making a middle class income yet I had the not so fun kind of debt (15K credit cards + 35K student loans) with no emergency savings. I said the heck with that! Quickly curbing spending on things that were outright wasteful and wasn't truly contributing to any happiness I was recently able to become debt free. A trip to the Bahamas couldn't come close to giving you the peace of mind you get when knowing you don't owe anybody anything!

Now that my "Dear Diary" phase is over I can work towards what this forum is about. Early retirement!

Now please try to keep your seat as I divulge my massive current financial standing.

Currently:
Savings - 15K emergency fund
Roth IRA - 12K
Vehicle Paid For
Zero Debt

I also said the heck to my past employer who really, really sucked! Enough said. My new job has me on a 76K salary with another 30K in tax free per diem. My goal for the next calendar year is to live off the per diem and save 100 percent of my after tax salary. Doing so should allow me to max out a Roth IRA and 401K, as well as put another 25K in a brokerage account.

That's my story and I am sticking to it. Any feedback on my plan would be much appreciated. Looking forward to building some wealth!
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Old 07-26-2016, 06:01 AM   #2
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What do you do for work now?

Being 32 you still plenty young to rack up some cash in the IRA. I started mine when I was 26. You have a nice salary and can save a lot of money if you stick to your low standard of living. Dedication will be key.
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Old 07-26-2016, 06:02 AM   #3
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Good for you for thinking of your future. If you can accumulate enough non retirement assets to support an early retirement you can do anything you want and let the other accounts grow. Good luck!
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Old 07-26-2016, 06:22 AM   #4
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I think your plan is great and you are already doing well. You are in complete control of your spending, and your assets are going to grow well. It does work. I will FIRE in 8 months at 57.
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Old 07-26-2016, 06:44 AM   #5
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I see nothing wrong with the OPs plan going forward. However, most people would say that buying a modest house is better financially in the long term than renting so maybe he should consider saving for a house.
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Old 07-26-2016, 09:15 AM   #6
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30K in tax free per diem how does that work,do you travel a lot?
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Old 07-26-2016, 09:58 AM   #7
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Congrats on paying off your debt and focusing on your goals. You're young enough that the changes you're making now will have lots of time to pay off. You're also young enough that you may well have a lot of changes in your life (medical challenges, family changes, job changes when/if you tire of traveling for work) that could impact your plans. But being on solid financial footing will let you handle those changes when they come.

You're also young enough that you're likely to want some fun in your budget and some travel. That's also fine as long as you're also saving for your future and not incurring debt for the "fun".

Congrats and welcome!
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Old 07-26-2016, 05:39 PM   #8
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Originally Posted by Tykimeister View Post
What do you do for work now?

Being 32 you still plenty young to rack up some cash in the IRA. I started mine when I was 26. You have a nice salary and can save a lot of money if you stick to your low standard of living. Dedication will be key.

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Originally Posted by ivinsfan View Post
30K in tax free per diem how does that work,do you travel a lot?
On site construction supervision that can be anywhere in the country. Projects vary from 9 months to 3 years. They pay a living allowance based on the cost of living of an area. 2,500/month is about average and it is tax free. It is set up so you can still own property and keep a family in your hometown while you pay for a second residence where the project is located as well as cover meals. I just live where the project is, and when it is done I get to pack up and move wherever work takes me after that. Some people have families and they travel with them full time, others keep them at home. It's super easy for myself as a single person.
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Old 07-26-2016, 05:50 PM   #9
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Originally Posted by aaronc879 View Post
I see nothing wrong with the OPs plan going forward. However, most people would say that buying a modest house is better financially in the long term than renting so maybe he should consider saving for a house.
Right now owning a home does not work well with a traveling job as a single person. Though, having some money saved up through a stock brokerage account could be utilized as a down payment for a future home.
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Old 07-27-2016, 04:40 PM   #10
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Right now owning a home does not work well with a traveling job as a single person. Though, having some money saved up through a stock brokerage account could be utilized as a down payment for a future home.
I'd have to agree with this too. Traveling a lot and being single, owning a house might be an anchor that you later want to shed, perhaps at a loss. And whether home values will go up is a crap shoot.
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Old 07-27-2016, 06:18 PM   #11
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Had a similar situation where for a couple years in my late 20's, I was doing consulting work overseas for my company and provided a per diem. I also was able to save 100% of my salary and even some of my per diem. Needless to say, that really jump started my nest egg and I suspect it will for you too!
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Old 07-27-2016, 07:02 PM   #12
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Sounds ambitious to do this, but you got to have goals, good luck and welcome to the site. If you can keep that up for a few years you will be well on your way.
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Old 07-27-2016, 09:37 PM   #13
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Op, you have excellent opportunity to jump start savings, if you stick to your plan it will work.
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Old 08-22-2016, 01:18 PM   #14
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My megacorp has a similar per diem policy for the construction guys. Quite a few of them live full time out of campers and stash the rest. However, if you are in one place for over a year, the per diem becomes taxable. I think this might be an IRS policy, but I'm not the expert. In this case, our megacorp increases the perdiem to cover the tax liability. Just something you should look into if you get a long project.
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Old 08-26-2016, 02:10 PM   #15
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Sounds like you have a solid plan. Just remember to enjoy life. Its not all about retiring early. Find a balance...take some vacations, buy some things you want...do not deprive yourself. As far as we know you're only young once...make the most of it.

Im 33 and my wife and I take a couple nice trips every year. We like to spend money on life experiences rather than material things....though we love to hit up thrift stores and goodwill!
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