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Old 10-11-2009, 02:02 PM   #21
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I am wondering what type of career track a young professional could be in to earn enough to save $30K per month at age 23!

Fantasm can't be a high priced brain surgeon, because he would still be in med school at 23, and I don't know any lawyers who have finished their articling at that age.....so perhaps he's in professional sports. If that's the case, how long will the income stream last?
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Old 10-11-2009, 02:15 PM   #22
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Originally Posted by samclem View Post
Maybe you'll get 8% going forward, but the consensus seems to be against anything like that rate in the near term (next 5 or so years). I'm hoping for 5% real return over the next 15 years.

From the OP:
It's probably just me, but this didn't sound like somebody looking at a 25+ year timeframe.


Okay, so that's a different story. If we get to count inflation as return, then all one has to do is maybe buy TIPS (1% real return) and hope that inflation takes off at 7%. "I'm rich!!"

If you're counting inflation as "return" then maybe 8% is possible. But I don't know why anyone would do that.
If you are retired and continue to LBYM, you should pray for high inflation. If you have 2M saved and inflation runs up to 5%, you are getting a $100K return each year assuming you have RRB's with no premium above inflation. Sure your expenses are also going up 5% but the spread between your nest egg and yearly expenses X 25 metric just gets bigger and bigger.
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Old 10-11-2009, 02:25 PM   #23
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If you are retired and continue to LBYM, you should pray for high inflation. If you have 2M saved and inflation runs up to 5%, you are getting a $100K return each year assuming you have RRB's with no premium above inflation. Sure your expenses are also going up 5% but the spread between your nest egg and yearly expenses X 25 metric just gets bigger and bigger.
And my required withdrawals also go up by 5% each year (to keep the same spending power with devalued dollars), so when I multiply by 25X to find my necessary portfolio value I see that I make exactly zero progress due to inflation. Except it's not that good--the US government DOES see all that phantom growth as "gains," so I get to pay taxes on it.

Sorry--your math doesn't make sense.

Try it yourself. Imagine you retire with a 1 million CDN portflio, and you plan to withdraw 40,000 CDN the first year (4%). You've got the whole thing temporarily in RRBs that earn 0% real return, but keep up perfectly with inflation. Unfortunately, you slip on some of that Canadian ice leaving your retirement party, hit your head and are unconscious for ten years (but, no cost for care--Canadian health care!). During that time, inflation has been running at 7% annually, and you are amazed to see that your portfolio is now worth 2 million CDN! Great! Then, take your first annual withdrawal (80,000 CDN). You're loaded! But, everything you want to buy costs twice as much. So, inflation hasn't helped you a bit. And, if you have to pay tax on this phantom increase in value, it has hurt you a lot.
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Old 10-11-2009, 04:53 PM   #24
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I am wondering what type of career track a young professional could be in to earn enough to save $30K per month at age 23!

Fantasm can't be a high priced brain surgeon, because he would still be in med school at 23, and I don't know any lawyers who have finished their articling at that age.....so perhaps he's in professional sports. If that's the case, how long will the income stream last?
I hear that upper management in the distribution of recreational pharmaceutical products can make excellent money at a young age. Although most aren't overly concerned about saving for retirement.
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Old 10-11-2009, 05:38 PM   #25
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I hear that upper management in the distribution of recreational pharmaceutical products can make excellent money at a young age. Although most aren't overly concerned about saving for retirement.
Agreed -- I have noticed a marked absence of big time drug dealers here on the forum. With no SS, no 401K, and no pension they just don't seem to be drawn to our forum in great numbers (poor fellows!). Given the scarcity of such members, it doesn't seem probable that Fantasm is engaged in that particular business.

I would guess that perhaps Fantasm meant to say that he might save $20K - $30K per year, instead of that amount per month.
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Old 10-11-2009, 09:33 PM   #26
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Perhaps but he said that he $300K save and he is only 23.. Tough to have that kind of money saved at 20-30K a year at his age, unless he shorted the market last year.
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Old 10-11-2009, 09:38 PM   #27
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Perhaps but he said that he $300K save and he is only 23.. Tough to have that kind of money saved at 20-30K a year at his age, unless he shorted the market last year.
Correct, he did say he had saved $300K (not won it or inherited it or made a bundle in the market).
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Old 10-11-2009, 09:50 PM   #28
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OK, then apparently he is saving $20K-$30K/month. His profile gives his occupation as VP.
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Old 10-11-2009, 09:55 PM   #29
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Hi,
No, I'm not a drug dealer nor am I involved in any illegal activities. I have simply worked hard since I was 15 and I am an executive at a technology company. I spent (lost) a good sum of cash in the past few years on mostly cars and toys due to depreciation and the cost of the places I've been living. I'm on my 13th or 14th car now and I'm only 23! It is sort of an obsession for me, but I've been trying to control it harder.

Being so young is actually quite a bit harder to plan for, because of how many years I do have left (God willing, knock on wood). So that's a lot of ifs and maybes to plan for on top of just the general amount of funds I would need if I were to just stop working in a few years.
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Old 10-11-2009, 09:55 PM   #30
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OK, then apparently he is saving $20K-$30K/month. His profile gives his occupation as VP.
Joe Biden is in our Forum?
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Old 10-11-2009, 10:01 PM   #31
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Joe Biden is in our Forum?
Who knew?
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Old 10-11-2009, 10:02 PM   #32
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I spent (lost) a good sum of cash in the past few years on mostly cars and toys due to depreciation and the cost of the places I've been living. I'm on my 13th or 14th car now and I'm only 23! It is sort of an obsession for me, but I've been trying to control it harder.
At 23 you are entitled to have splurged a lot of your money. Many of us have done the same - we just didn't have the same disposal income at that age

It's great that you are now planning for an early retirement - 2016?
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Old 10-11-2009, 10:04 PM   #33
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Hi,
No, I'm not a drug dealer nor am I involved in any illegal activities. I have simply worked hard since I was 15 and I am an executive at a technology company. I spent (lost) a good sum of cash in the past few years on mostly cars and toys due to depreciation and the cost of the places I've been living. I'm on my 13th or 14th car now and I'm only 23! It is sort of an obsession for me, but I've been trying to control it harder.

Being so young is actually quite a bit harder to plan for, because of how many years I do have left (God willing, knock on wood). So that's a lot of ifs and maybes to plan for on top of just the general amount of funds I would need if I were to just stop working in a few years.
Thanks for satisfying our curiousity - - you are doing wonderfully well for someone just 23 years old. Yes, it must be much more difficult to plan as you could have 50-75 more years ahead of you.
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Old 10-11-2009, 10:13 PM   #34
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At 23 you are entitled to have splurged a lot of your money. Many of us have done the same - we just didn't have the same disposal income at that age

It's great that you are now planning for an early retirement - 2016?
Yes, my goal and my fathers opinion is that I should try to be retired by 30, or at least in a position where I am FI.
I see that its going to take a lot of work on my own outside of my current employment responsibilities, to ensure that I make the best choices on a continuous schedule (like CD Laddering) to make the most of the saved income and continuing earned income. I definitely want to start taking advantage of compounding as soon as possible.

Perhaps in a few years I will get lucky and we will sell the company and I will get a part of it, hehe. Here's hoping to 'getting a part of it'.
I know I could be FI a lot sooner than 30 if I accepted living on a smaller amount every year ($30,000 maybe?) but I'm attempting to go for at least $120K yearly budget so I don't make too many sacrifices.
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Old 10-12-2009, 06:50 AM   #35
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Yes, my goal and my fathers opinion is that I should try to be retired by 30, or at least in a position where I am FI.
I see that its going to take a lot of work on my own outside of my current employment responsibilities, to ensure that I make the best choices on a continuous schedule (like CD Laddering) to make the most of the saved income and continuing earned income. I definitely want to start taking advantage of compounding as soon as possible.

Perhaps in a few years I will get lucky and we will sell the company and I will get a part of it, hehe. Here's hoping to 'getting a part of it'.
I know I could be FI a lot sooner than 30 if I accepted living on a smaller amount every year ($30,000 maybe?) but I'm attempting to go for at least $120K yearly budget so I don't make too many sacrifices.
Have you used any RE calculators to see what you need to do be FI at 30, with an annual budget of $120K? I would expect that you'd need about $4M to generate $120K/year at a 3% withdrawal rate, before taxes, so you are going to have to be extremely aggressive in saving and/or cut back on your spending targets or work a few more years.
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Old 10-12-2009, 08:46 AM   #36
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Alan raises a good point. While an annual budget of 120k is no sweat for you now, if you want to maintain that into retirement it would require a hefty nest egg.
While 'getting a part of it' would also be a wonderful windfall (it sounds like) don't plan on that being there. It is far easier to fold that into your planning if it does come through, than readjust your plan if it fails to come through.
Congratulations on your success and bright future
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Old 10-12-2009, 11:23 AM   #37
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I see that its going to take a lot of work on my own outside of my current employment responsibilities, to ensure that I make the best choices on a continuous schedule (like CD Laddering) to make the most of the saved income and continuing earned income. I definitely want to start taking advantage of compounding as soon as possible.

Hi there, Fantasm!

I bolded part of your post -

Remember, the 'dither factor' can kill you - a pretty good choice, made, followed up on, and tweaked as needed, is better than perfection late-late-late!

Get what you can into tax-advantaged accounts, including a ROTH IRA.

Save the rest in funds that aren't churned, generating excessive taxes.

Have some fun - but maybe find a cheaper hobby than really neat cars. But I will admit they are shiny and cool!!


ta,
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Old 10-12-2009, 11:37 AM   #38
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Hi,
No, I'm not a drug dealer nor am I involved in any illegal activities. I have simply worked hard since I was 15 and I am an executive at a technology company. I spent (lost) a good sum of cash in the past few years on mostly cars and toys due to depreciation and the cost of the places I've been living. I'm on my 13th or 14th car now and I'm only 23! It is sort of an obsession for me, but I've been trying to control it harder.

Being so young is actually quite a bit harder to plan for, because of how many years I do have left (God willing, knock on wood). So that's a lot of ifs and maybes to plan for on top of just the general amount of funds I would need if I were to just stop working in a few years.
Well, good for you! One thing though.....you are definitely an outlier (in a good way) when it comes to personal income and net worth for your age. I'm sure you have worked very hard for this and are very talented, but luck must also have played a part. It would be amazing to remain equally lucky in the long term. You need to plan for lean years and reversion to the mean, both during and after your working life. Heck, how many cars does one person need?
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Old 10-13-2009, 12:26 AM   #39
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Have you used any RE calculators to see what you need to do be FI at 30, with an annual budget of $120K? I would expect that you'd need about $4M to generate $120K/year at a 3% withdrawal rate, before taxes, so you are going to have to be extremely aggressive in saving and/or cut back on your spending targets or work a few more years.
Saving $25k/month over 7 years gives us $2.1MM. Adding in the $600k (doubled over 7 years, if you're lucky), gives us $2.8MM. A 3% withdrawal rate gives about $80k income before taxes. Yep, Fantasm, you'd better hold off on a new car or 2.
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Old 10-13-2009, 02:18 AM   #40
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Hi there, Fantasm!

I bolded part of your post -

Remember, the 'dither factor' can kill you - a pretty good choice, made, followed up on, and tweaked as needed, is better than perfection late-late-late!

Get what you can into tax-advantaged accounts, including a ROTH IRA.

Save the rest in funds that aren't churned, generating excessive taxes.

Have some fun - but maybe find a cheaper hobby than really neat cars. But I will admit they are shiny and cool!!


ta,
mew
Isn't fantasm's income a wee bit over the limit for Roth IRA eligibility?
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