I have been reading these forums from 1 week and now i am really tensed about our retirement and other financial aspects.
DW and myself have saved about 150k in taxable and around 70k in various tax defered accounts. I am self employed and hence 401k is less and taxable income is more.
I am 28 yrs and DW is 25 yrs old.
We have a mortgage on our house which we bought last year in the 500k range. Nowdays that is the norm. I am not sure when we will have a positive networth bcs its going to be a long time to have one with the current market.
How did other ppl manage to get a positive networth before 33 if someone graduates in the 25 yrs range . I cant seem to understand that and that is keeping me awake big time.
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 10,535
Unless your house is worth zero or you have some kind of massive non-mortgage debt you arent telling us about, it sounds like you already have positive net worth (and have done very well). The mortgage amount is offset by what the house is worth in the calculation of net worth.
Thanks for replying. The issue i am having is that the house was bought in the last 2 years and as we now know the house prices are decreasing rather than increasing so there is no equity built except for the 25% that has been put down. I am not sure how i have a positive nw unless i am missing something.
which is actually a fabulous position to be in at your age.
2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
Thanks for explaining this. I didnt know how to compute networth and since right now if I sell the house i wouldnt make a dime i didnt consider it part of my networth.
Atleast now i can concentrate on getting to a better position faster.
How did other ppl manage to get a positive networth before 33 if someone graduates in the 25 yrs range . I cant seem to understand that and that is keeping me awake big time.
Your housing situation is regrettable...your other savings are quite good...My impression is that many here dont consider home equity of much value in net worth calculations (and many have argued that point due to the situation that you are now in) and the value comes more from having it paid off....
On the issue of age, there are a lot of engineers, computer science, etc. folks on these boards...I am an engineer and certainly graduated with a degree before age 25....I am also in the midwest where housing is considerable cheaper and 150-200k gets a pretty decent place...
Your doing fine. Keep doing whatever you have been to save what you have so far and the 25% downpayment and you will be in great shape at age 33 or beyond.
I am self employed and hence 401k is less and taxable income is more.
honkydonk
Are you eligible to use a Solo 401K? That can allow you to stash a way quite a bit money before taxes, but you have to have no other employees (except for a spouse).
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
It is tough to get ahead in the first few years but as has been pointed out, you are doing well. Hopefully the house will bounce back and you'll have some positive equity in that soon.
Also keep in mind that presumably your income will increase through the years, usually faster than your expenses go up especially with a fixed rate mortgage assuming you don't keep upgrading homes and mortgages. Any time you make more money (salary increase for us who are not self-employed), put a lot of that towards your investments. Finished paying off a car? Put the car payment amount away in savings, so when you replace that car you can put a considerable amount of cash down on it and eventually don't even need to take out car loans. And of course keep credit card debt away.
If you keep add it, in another 5-10 years you will find yourself in a lot better shape, as you have less debt, are saving more, and your home and investments appreciate. Right now you want to position yourself for this.
If you have over $200K already saved, you are way ahead of your peers.
My advice is to live below your means for the next few decades and continue to increase your savings in both taxable and nontaxable accounts as you see fit and you and DW will be in fine shape and ready for ER in a timely manner.
__________________ Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx In dire need of: faster horses, younger woman, older whiskey, more money.
If you have over $200K already saved, you are way ahead of your peers.
My advice is to live below your means for the next few decades and continue to increase your savings in both taxable and nontaxable accounts as you see fit and you and DW will be in fine shape and ready for ER in a timely manner.
I agree. Seems like you are doing fine. Just remember the 8th wonder of the world. "Compounding"
Wanted to thank everybody here for the support and kind words. I jumped into the housing market at the wrong time but i am sure everything will work out in time. Lot of commercial buildings coming near by so when the market recovers i am expecting a lot but lets c.
I am aiming to save a lot more and we LBYM , DW doesnt like it but if we need enjoy later we need to struggle now.
I am looking to reach the 200k mark by year end and that is definitely doable I hope.
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 9,539
Quote:
Originally Posted by donheff
Heck, if you are even thinking about this stuff at 28 you are ahead of your peers.
Amen to that........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
Wanted to thank for the kind words and encouragement. Can someone show me a calculator that based on a retirement figure and a return of 7% how much of principal do we need to putting into the market . That would give a very good figure to aim for and based on the market condition we may need to increase the principal.
Congrats on the savings so far, you have time on your side, you may be surprised to see the numbers that the above calculator will toss out. It makes LBYM all that more enjoyable!
Hi,
..... Can someone show me a calculator that based on a retirement figure and a return of 7% how much of principal do we need to putting into the market . ....
I like the Fidelity free calculators, but they are one of many (search Google "retirement calculator ")
Quote:
Linear Mode
