Lost Newcomer...Need Help!

[BigNick]

My point is that while LBYM may be one of the "worst" ("least efficient?") ways to build FI, it's also one of the most common. LBYM may not be as fast or as productive as landlording but not everyone can handle that occupation, let alone invest like Buffett or Soros.

There are many roads to ER.

+1... in fact LBYM is necessary in any case, pretty much by definition. Renting out property is just another way to increase your M if you can't do it by getting a better paid job.

In my case, I started my current job 20 years ago on 80K net (in today's money) and realised that because of the combination of security and pay scales in our organisation, that I would likely be making 140K net in 20 years time (ie, today). On the other hand, I didn't trust our pension scheme, so I decided to plan for retirement on the basis of its complete and utter default. Since that now seems unlikely (appropriate measures were taken), I have the choice of waiting for a decent (70K) pension at 60 with a pot of money on the side to spend, or leaving earlier with a smaller pension (20K if I went in November on my 50th birthday, increasing 5K/year for every year I stay) and living off the portfolio. In about 4 years, the income from that combination will exceed what we currently spend...

So living within our means came down to pretending, all this time, that I was still "only" making 80K, and putting the rest away. Given that even 50K net is more than 95% of households in France make(*), it wasn't too hard to do that. So if you have a "good, professional" income, like what a lawyer or doctor makes, and can avoid spending it all on clothes or sailing or cocaine, simply saving can work.

On the other hand, there's the case of my first girlfriend, who I bumped into on Facebook recebtly. She married an American, moved to the US (from England), and has made herself independently pretty well off *only* through property. I don't think she's ever had a salaried job.




(*) Of course, we have the massive advantage of not having to factor in anything for health insurance.

 

[stoutboy]

agreed. Kiyosaki is the last person to whom to look for advice. Those real estate 'gurus'. with their no money down scams, are responsible for getting many people in real estate who had no business being there. It's part of the reason for the real estate bubble and mortgage derivative fiasco that ruined our economy.

He's pretty vague in the areas of "ethics" and "truth", too.

My point is that while LBYM may be one of the "worst" ("least efficient?") ways to build FI, it's also one of the most common. LBYM may not be as fast or as productive as landlording but not everyone can handle that occupation, let alone invest like Buffett or Soros.

There are many roads to ER.

 

[stoutboy]

So living within our means came down to pretending, all this time, that I was still "only" making 80K, and putting the rest away. Given that even 50K net is more than 95% of households in France make(*), it wasn't too hard to do that. So if you have a "good, professional" income, like what a lawyer or doctor makes, and can avoid spending it all on clothes or sailing or cocaine, simply saving can work.
(*) Of course, we have the massive advantage of not having to factor in anything for health insurance.

Your overall strategy is a good one, but I don't know why the shot at France. It's ranked first in International Living's quality of life index for five years running. Overall, based on my own experience, I would say that the French, and for that matter almost all western Europeans, with the exception of the British, are a good deal more happier and content than Americans.

And I doubt not having to factor in health insurance is a 'massive' advantage. If you adjust for that, it pretty much evens out the differences in per capita income between the US and France.

 

[Westernskies]

Welcome to the forum.

I landed my first job ever at a major financial corporation, which I've been at for about 9 months now.....

I am not in any debt whatsoever except for the aforementioned education loan, but it seems impossible to contribute money to savings, 401k, bonds, etc when I have no knowledge. I don't even know where to begin.

Exactly what kind of major financial firm is this? Surely there must be many qualified financial professionals who can offer help and advice to a new graduate...

 

[FreeAt30]

agreed. Kiyosaki is the last person to whom to look for advice.

Add me to the growing numbers who have this sentiment...

Lots of great advice given already. The saving and financial defence side is very important, but it seems that not getting paid what you are worth is your biggest issue right now. Sometimes it's better to choose the right battle. Making $1500 net and trying to save shave another 10% in expenses is no match for finding a job that pays 50% more and keeping your expenditures exactly where they are.

I'll echo those who have said to get your resume out there.

 

[Letj]

Trying2plan,

I have a different take than most on this forum about setting up for FIRE. I know a few on here are critics of Rich Dad Poor Dad, but honestly that book made me look at money completely different. Throughout our entire lives we are told to live below our means and save. The problem with this is that it takes 10 times as long to become FIRE using your own capital. If you simply put money into a bank account or even stocks, your are trying to get rich off of yourself.

You need to try and harness the power of other people's money. My plan involves using real estate (rental properties). Here you leverage your money at least 10:1. You put down 10% (in some cases less or none) and have someone else pay the mortgage and expenses. Eventually you will own these properties outright and you truly never had to put much of your own money into them. If you truly want to retire young (meaning in your 40's or younger) this is the way to do it in my opinion.

Living your whole life below your means so you can put a couple extra dollars in a completely unpredictable stock market is not my idea of living. I know it goes against the grain so take it for what it's worth. Working harder and spending less will not necessarily make you wealthier.

I agree with you to a certain extent but real estate is not for everyone. It takes quite a bit of savy and a tremendous amount of hardwork in the shortrun. I own a lot of rental properties and while it's made financial independence possible after 5 years for me, most people will lose their pants. I made my share of mistakes in the beginning but I learned quickly and had luck on my side when the bottom dropped out of the market. I also invest in marginal areas and my SO puts a lot of sweat equity into the property. If you're skilled at what you do and are in the right market, landlording can be one of the easiest ways to make money and make money fast.