Hello to all and how did you do it

[Todd-O]

Hey Guys
First off its great to see a bunch of other like minded people regarding money and finances-sometimes I feel like I'm the only 32 yo that could care less about Britney or Blackberry's. Anyway, I've been lurking here for a while and had a question:

I've read in some posts that some of you had a NW around 200-300k in your 30's. How?? That's the biggest question. I understand it requires savings, but WOW that's alot to have accumulated in your 30's.

[REWahoo]

Inheriting big or winning the lottery will work, but LBYM, saving and investing is the tried and true formula.

[seabourne]

I'm 31, and in the low end of that range. Did it by
1. getting a degree that tends to pay fairly well (engineering and economics). I studies philosophy a bit, but did it off the books and on my own time instead of paying for it.
2. getting a job in a solid industry (civil engineering) which has managed to do well.
3. living well below my means (~50% gross or less)
4. I've been working part time sailing for 6 years - I have people paying me to mostly follow my hobby all summer long. It also stops me spending in the summer (too busy), and it's been great for my social life and stress levels.
5. getting very lucky in returns on company stock (total return due to that approaches $100k of my ~250k total). I also bought a condo in an unusually good deal, which has left me ahead despite the real estate crash, but don't count it in any numbers - if anything I'd be wealthier if I were still renting because I'd be consuming less living (my rent in a place I was happy was << than my mortgage and costs, but it was a smaller, less nice space for a shorter time outlook).

Recognize that the ones that were strongly to the good were only available (investment and buying condo) due to having lived well below my means and being able to take advantage of good luck when the opportunity came along.

The boat work - I helped the guy build his business, work as a second job, and teach other people and learn more myself in the process. I don't sleep enough in the summer. It takes a lot of work, even though there is a lot of pleasure associated with it too.

[Todd-O]

Thanks for the replies so far. I think my original question was probably too broad, this is why I hate typing on forums, I'm better in a conversation. But yeah, I guess a better question is what % of your take home do you invest? Do you DRIP the dividend or take as cash? etc.

I have a good paying job too, but if my calc's are correct, even in 10 years I won't have that much and I don't specnd that much either. I max out my Roth and put 10% into my 401k (no match) so about 6k/year. Even after what's left over from my roomates half of the expenses...IDK

[seabourne]

I never payed more than $700 a month rent living in Chicago, maxed out my Roth, contributed to match for 401k even when money was tight, and max it out when I can. I have never had to buy a car - I rent one if I need, ride public transportation and cabs, and spend a lot of time walking/riding a bus or train. I've never paid for cable (but I pay for high-speed internet). I eat very well at home (and spend a lot on good ingredients, and shop for good wine under ~$10 when bought as a case - use the internet and magazines) and have become a fairly good cook (makes for great dates too, especially after a long day out sailing). I probably only eat dinner out once or twice a month, and don't buy my lunch more than once or twice a week. I bought a lightly used treadmill and weight set for my place, but still belong to a martial arts school that I suspend in the summer when I'm too busy. When dating, I found that women who liked to do things were more interesting than those who wanted to buy things anyway, and it's not a bad filter to start with. Plus, because I'm sailing, doing martial arts, etc, with my time, I have tended to only meet the active ones - partial self selection for fit and active people. There is more, but a lot of it is just structure of your life. I'm lazy, so I set my life up so that I'm not in the position of having to always resist temptation, or work against people around me. I set it up so that just following through with things I enjoy pushes me to where I want to go when I step back and plan for it.

[Todd-O]

Quote:

Originally Posted by seabourne When dating, I found that women who liked to do things were more interesting than those who wanted to buy things anyway, and it's not a bad filter to start with.

=) Yeah and I found that out the hard way. Where in Chicago did you live? I think the "better" or at least family oriented areas (well, nowadays anyway) are 800+/month. I do have a car that I'm paying off, till next Nov, but my commute is 25 mi one way and public would likely double or triple my time now. I go to the gym 5 days/week and really (and I mean really) enjoy my time to myself so a longer commute is out of the question.

i do the whole LBYM thing, but starting next month I'm going to do a detailed list of expenses and soon I wanna buy some individual stocks.

[brewer12345]

Very simply, save your pennies, try to make good decisions, and hope you are in the right place in the right time. I am 37 and well above your range, but I had a few critical things going for me:

- I intentionally put myself in a career that has the potential of outsized compensation. I only really had 3 high income years, but since I saved most of it it made a big difference.

- Start saving early and aggressively. There is no substitute.

- I bought my first condo before the housing bubble got going. $20k in downpayment turned into $140k in 4 years. The house we bought afterwards has slightly more than held its value.

[MichaelB]

We had about what you had when I was 30. Our cost of living grew as the family size did. But once our third child reached school age we put a lid on the budget and from that point it grew along with inflation but not faster. In my late 30's income began to grow much more quickly than ever before and we were able to save most of the increase for an extended period.

[REWahoo]

Quote:

Originally Posted by Todd-O ... and soon I wanna buy some individual stocks.

*Alarm Bells*

While some folks have done very well investing in individual stocks, many of us learned the hard way that we either didn't have the knack, dedication (it takes a lot of study and analysis) or intestinal fortitude to build a nest egg buying individual stocks.

To each his own, but I'd strongly recommend you read some of the investment material found here and consider mutual funds, bonds and/or maybe real estate as an alternative.

[Todd-O]

Well the stocks I'm interested in are (how do I put this) from "good" companies. I DO NOT expect to make millions off of them even in the long run. Most seasoned investors (aka guys from work and the gym) I've talked to hate mutual funds. I have some and they've essentially gone nowhere. Really I've broken even from last year when I initially invested in them after fees. So in reality they're down and don't produce a dividend.

Bonds. IDK. Paltry return, Real estate maybe. But in what form. An apartment, a REIT?

I do appreciate the advice though. I'd like to read through more of the posts on the link when i get the time. I have done some research on investing in general and while I dont consider myself a pro, I don't think I'm completely green either.

[FreqFlyer]

When I turned 30 I probably had a net worth of zero (student loans, big car loan, fancy apartment paying *gasp* 1,400/mo).

Fast forward to today when I'm 38. My NW exceeds your figure by a healthy margin. I spend less now than when I turned 30 and earn more than twice as much. I still have the same car but it's paid for (liability-only insurance, much lower car property tax which is value-based).

The key is to get a couple of promotions while maintaining the same lifestyle. At least that's how I did it.

[seabourne]

In Chicago, I spent about 3 years in lakeview/"boystown" area in a large studio. Didn't realize it when I signed the lease, but enjoyed it immensely - lots of single women move there because they feel safe (then move away a year or so later due to the one way mirror effect - all the pretty boys they are looking at who don't even seem to see them). For a single straight guy, it was great. I had a grocery store about 100yds away, right off the lake, 3 blocks from the bars by wrigly and the L stop, but the drunks are afraid of "the gays" so you don't have the wriglyville issues with drunks. Also, you have many DINK couples supporting stores, so there are lots of interesting little places that would never survive if 30-something professionals there all had kids.

I also lived in the south loop (and I'd look there if you work downtown now), which was right by an arts college (pretty girls, some decent bars, etc), and was able to walk to the office from there. I'd still be there (rented second bedroom from a sailor who lives in Vail all winter - best roommate ever! - had the place to myself half the year).

I line in Uptown now. Good place long-term, crime issues now, but close to the lake and the L, and not too terrible. Would probably look elsewhere if you aren't buying/looking for a deal. North lakeview or south loop would be my recommendations - but I also really enjoy living by the lake. Good options inland might be bucktown or urkrainian village areas - a little rough around the edges, not nearly as bad as uptown, reasonably close to downtown for work.

[Todd-O]

Quote:

Originally Posted by FreqFlyer When I turned 30 I probably had a net worth of zero (student loans, big car loan, fancy apartment paying *gasp* 1,400/mo). Fast forward to today when I'm 38. My NW exceeds your figure by a healthy margin. I spend less now than when I turned 30 and earn more than twice as much. I still have the same car but it's paid for (liability-only insurance, much lower car property tax which is value-based). The key is to get a couple of promotions while maintaining the same lifestyle. At least that's how I did it.

Well in all fairness I haven't mentioned my NW, investments, liablities, etc. My question was how this happened:

I've run over my numbers a million times while at work and I think retiring before 45 is realistic. I would like feedback from you guys as to whether it is or not.

-Home paid for. Very possible that I'll downsize to a condo and pocket 50Kish
Home value about 375K conservatively but this is irrelevant as not interested in living in apartment
-Save 70K a year which includes dividends but not market return. I assume another 4% return from the market over time with my investments.
-I assume my salary will grow by 2% a year. Basically just inflationary increases if any as I don't have any interest in promotions, increased stress.
-Have 275K saved - 25% bonds and cash (mainly cash waiting to be invested) and 75% equity. Will be fully invested by end of year hopefully
-Base expenses 20 - 23K per year
-Another 10K a year for vacations, home repair and car replacement assumed
-Not married, no kids. Might get married but very likely not to have kids

So, can I do it at 45? I feel I am doing alot better than others at saving so I think this is realistic. I am aiming for around 1M to 1.5M in assets. Really not sure how much I need. Ideally I would feel safe with a SWR UNDER 3.

Maybe I should have asked directly but the question is open to whomever it applies.

[REWahoo]

Quote:

Originally Posted by Todd-O I have done some research on investing in general and while I dont consider myself a pro, I don't think I'm completely green either.

Based on personal experience, I'd describe that particular status as "dangerous".

[Todd-O]

Quote:

Originally Posted by seabourne In Chicago, I spent about 3 years in lakeview/"boystown" area in a large studio. Didn't realize it when I signed the lease, but enjoyed it immensely - lots of single women move there because they feel safe (then move away a year or so later due to the one way mirror effect - all the pretty boys they are looking at who don't even seem to see them). For a single straight guy, it was great. I had a grocery store about 100yds away, right off the lake, 3 blocks from the bars by wrigly and the L stop, but the drunks are afraid of "the gays" so you don't have the wriglyville issues with drunks. Also, you have many DINK couples supporting stores, so there are lots of interesting little places that would never survive if 30-something professionals there all had kids. I also lived in the south loop (and I'd look there if you work downtown now), which was right by an arts college (pretty girls, some decent bars, etc), and was able to walk to the office from there. I'd still be there (rented second bedroom from a sailor who lives in Vail all winter - best roommate ever! - had the place to myself half the year). I line in Uptown now. Good place long-term, crime issues now, but close to the lake and the L, and not too terrible. Would probably look elsewhere if you aren't buying/looking for a deal. North lakeview or south loop would be my recommendations - but I also really enjoy living by the lake. Good options inland might be bucktown or urkrainian village areas - a little rough around the edges, not nearly as bad as uptown, reasonably close to downtown for work.

Hot women in "boystown". Really =) Kewl didn't know you currently live in Chicago. I'm in the north Mayfair area. Close to the 94 for work. I don't work downtown

[CuppaJoe]

What others have said and I left all tax-deferred amounts in my IRA. I received five unexpected payouts from discontinued pension and profit-sharing funds. Keeping them untouchable until retirement was easier said than done. I often wonder where a former co-worked is; he took a profit sharing payout in cash and paid the tax and 10% penalty to buy a slightly used gas guzzler. Mine is worth 8.5 times it's original amount, 20 years later.

[seabourne]

Quote:

Originally Posted by Todd-O I have done some research on investing in general and while I dont consider myself a pro, I don't think I'm completely green either.

I'm assuming that you aren't in the finance industry. I briefly was (bored playing with other people's money), but if you want to invest in individual stocks, create a seperate account with aobut 10% of your investments with which to trade. Put the others into something simple and reasonable (balanced target fund, wellsely, vanguard total stock market + vanguard total bond fund, etc.). You can trade the 10%. You might make some incredible trades, you might tank, and you might take a two week vacation and find you lost 50% of it's value, but it won't kill you. I honestly don't find analysis and investing to be all that HARD, but it is labor intensive, and requires monitoring. If you don't spend the time and attention, and KEEP spending the time and attention, it's a great way to really screw yourself. That doesn't mean I don't do some of it myself. Just make sure that you don't put yourself in a position where you CAN really screw yourself. There are professionals that you can pay for that.

[REWahoo]

What seabourne said...

[kombat]

The big thing in our case was not having kids.

By being DINKs, we've built our net worth up to just shy of $300k. I'm 35, DW is 34.

[Todd-O]

Quote:

Originally Posted by seabourne I'm assuming that you aren't in the finance industry. I briefly was (bored playing with other people's money), but if you want to invest in individual stocks, create a seperate account with aobut 10% of your investments with which to trade. Put the others into something simple and reasonable (balanced target fund, wellsely, vanguard total stock market + vanguard total bond fund, etc.). You can trade the 10%. You might make some incredible trades, you might tank, and you might take a two week vacation and find you lost 50% of it's value, but it won't kill you. I honestly don't find analysis and investing to be all that HARD, but it is labor intensive, and requires monitoring. If you don't spend the time and attention, and KEEP spending the time and attention, it's a great way to really screw yourself. That doesn't mean I don't do some of it myself. Just make sure that you don't put yourself in a position where you CAN really screw yourself. There are professionals that you can pay for that.

Exactly not hard but you need to investigate and do the leg work. Which I've done and again I haven't named any pics that I have or will have be it an IF, MF, individual stock etc.