A brief summary of my history and a good lesson for those in their 20's. I've hit a lot of rather large speed bumps along my path (dream) towards FIRE. I've done a lot of foolish things, and I've learned a lot...
Life Events and Salary
- Engaged at 22
- Married at 23
- Moved into $500K house 2 days later
(stated income thing, fascinating how they worked in 2005, horrifying really)
- Income started at $75,000, 2 weeks after moving into house
(this actually makes me laugh now, I am dumbfounded that I could actually get into that house when we did, luckily my job market was extremely stable despite the recession that started a year later)
- Had first child
- Income crossed the $100K income range
- Wife stopped working and moved into her dream job (Stay at home mom)
- Had second child
- Income crossed the $150,000 range
- Uncovered wife in an affair
- Decided to move, build new larger house (foolish, foolish)
- Income reached $175,000 range
- after months of marriage counselling found out wife is serial cheater, and there were other men, spanned entire marriage.
- sold house ($40K mistake, luckily that was it)
- swept up the mess. Split everything.
- Income reached $200,000
I am so fortunate that the company I started working for in 2005 set aside (fully vested) 20% in top of my income into 401k. Despite the horrible performance in the market, by 2014 (divorce) my 401K had reached $300K
About $175,000 of that became mine by the time it was split. Long story there is that the ex is dragging her feet filing a QDRO (why I have no idea, I think because she knows she will spend it all the second she gets it). So my $175,000 is locked (frozen) in a 401K with my old employer. For the last 2 years psst divorce I continued to invest about 25% of my income into it. Which is why my share is more than 50%
Started new job this summer. Amazingly they have the same 20% towards retirement model for 401K contributions. On top of this I am contributing my max as well. My company is contributing $32,000 and I'm adding $18,000 on top of that. Three months later I'm at $15,000 in my new Vanguard 401k account.
So retirement sitting at approximately $190,000 right now, and I'm adding $50,000 to that a year. I am renting for the moment (which is painful), but the smart thing while looking at where to buy when it makes sense. Living way more modestly today, with a perfect amount of room for myself and my daughters when I have them. Perspective: my current rent is 30% less than my mortgage was on that house I bought in 2005 - and it's plenty of room for me, and a nice neighborhood. I estimate in 4 years my new 401k should surpass the other account, which will be a small (moral) victory in my path towards FIRE.
I really put myself into saving overdrive coming out of this. I suddenly feel so free. I have so much income, and I'm able to really save. Child support is $1400 a month, but I keep my own sanity there viewing that as for my daughters (not my ex). Piece of mine is that I'm no longer living paycheck to paycheck, in a family life that seemed destine to never pull itself from that cycle. Despite the aggressive 401K contributions I'm still taking home $10K cash every month. Only about half of which is going towards living expenses.
My path seems on a great trajectory... I am thankful that I had the 401K contributions through the 8 year marriage. Now to just stay the path and avoid the next speed bump
I am 33... and I certainly haven't taken the easiest path here, but I'm proud of where I am despite everything:
- Retirement $190,000
- Savings: $52,000
- Debts: $25K auto loan ($600 a month)
10 years ago I had a vision to reach $1,000,000 by 42 (did a lot of math and excel play to come up with that). I think I may still make it. Hope is to FIRE by 55...