What do you do for a living-for inspirational purposes?

[mudbuddha]

I would like to be inspired and hopefully help to inpire others along the way.  I am new here and would like to know what you folks are/were doing for your profession before/after retirement.  Do you like what you are doing, is it financially rewarding, and how does it help your FIRE goals etc?  As far as FIRE goes, i would like to know if i am on the right track or am behind and need to catch up.  Your thoughts...

Let me start:

I have over 10 years in the hopsitality industry, working while in school from the ground up- literally!  Park car, scrub floors, you name it, i've done it.  I went to a few colleges but did not finish with a degree.  Currently, I work in one of the biggest company in MD for the last 5 years, at corporate HQ.  Starts out as a Payable Specialist then HRIS analyst, then 8 months ago was promoted to the youngest PeopleSoft HRMS trainer in the company as a Training & Dev. analyst.  With new system implementations, i would go out to the field offices and train GM and Senior mgrs. on the new system process flow- train the trainers if you will.  There are perks but the pay at least right now is only average.  According to my boss, i am within 10% of the market reference point so i guess that's not too bad plus i am only in the position for 8 months.  And an increase is due to me in 2 weeks!

More importantly though, for my FIRE is the fact the i am maxing out my 401K contribution not counting safe harbor from the company ($15K/year + saving in a VUL).   I have a house that's 2 years old and a mortgage to match.   In 10-15 years, i know the house will be in the $800s to $1M range so that will be my fall back plan with at least in $500K in equity.  However, my current net worth is approx. $330K with roughly $60K in retirement savings and another $33K in emergency fund included.  Beside the mortgage, i have no other debts so my expense is relatively low at less than $5000/month including the mortgage.   My ER goal is between 50-55 with at least $1.5-2.0M. I just turned 31. 

I know that i am still far away from my FIRE goal but just for curiosity; what would you give up, money or things of value wise if you could retire today with financial security and independence?

Duke

Duke

 

[brewer12345]

I+ saving in a VUL

Gahhh! No, really? Why? Who did this to you?

 

[mudbuddha]

HAHAHA I was young and innocent back then...Seriously though, the policy has a cash value now so what should i do with it...it does provide for protection unless I dont make it to ER :

Duke

 

[brewer12345]

HAHAHA I was young and innocent back then...Seriously though, the policy has a cash value now so what should i do with it...it does provide for protection unless I dont make it to ER  :

Duke

What is it? Which company issued it? How much does it cost (expense ratios, not premium)? What is the cash balance? Face amount? Still under surrender charges?

Do you have any dependents? Any other possible actual neeed for life insurance?

Inappropriately sold insurance products are a pet peeve of mine.

 

[mudbuddha]

I have had it for a while now, like 7 years.  It doesn't have a surrender charge anymore-  cash value is like $12K and face amount is $400K.  WRL - Western Reserve Life is the company and I've got the money on growth/emerging/ and international companies accounts.  Did i mentioned that i am married?  DW also has one and we both set aside $250 each into the policy monthly.  My wife has a pet rabbit but no, she would be the only dependent if i go south today and the face amount would ensure that she doesn't have any or very little if any mortgage to pay. 

Back in the mid 90's VUL was a big thing, or so i am told and a friend of mine sold us the product.  We were sold on it becuase of the investment vehicle that it offers while providing protection.

Duke

 

[brewer12345]

You'll have to decide what you want to do, but based on what you have said, I would cash it in as soon as I had set up a 20 year level term policy for ~$500k or so. If you go this route, get a policy that has a "conversion option" and is with a good company (AA-/Aa3 rating or better). All those policy fees add up to a LOT of money over the years. The cash value and additional contributions will grow to much more in low cost index mutual funds vs. the policy.

 

[mudbuddha]

You know, that sounds like a project for me to look into.  I am starting to worry about the fees that's going into the policies.  Every month, approx $50 bucks each, is going into the insurance coverage not counting some administrative fees.     

Duke

 

[brewer12345]

You know, that sounds like a project for me to look into.  I am starting to worry about the fees that's going into the policies.  Every month, approx $50 bucks each, is going into the insurance coverage not counting some administrative fees.     

Duke

Heh, and go look at the expense ratios on the funds the money is invested in. I bet they are a LOT higher than Vanguard.

 

[HobbyDave]

I have a house that's 2 years old and a mortgage to match. In 10-15 years, i know the house will be in the $800s to $1M range so that will be my fall back plan with at least in $500K in equity. However, my current net worth is approx. $330K with roughly $60K in retirement savings and another $33K in emergency fund included. Beside the mortgage, i have no other debts so my expense is relatively low at less than $5000/month including the mortgage. My ER goal is between 50-55 with at least $1.5-2.0M. I just turned 31.

Slightly off the question you were asking, just wondering, what is your home valued now? How do you "know" the home will be 800-1M range? We just moved into a new neighborhood, and it's amazing how many people are confident that their home values will skyrocket. I'm thinking "new construction, we'll be lucky if our value increases at all over the next 10 years", and others in the community are saying "This will be great, our homes will be worth at least double within 5-10 years"..

Anyway, just wondering what your current home is worth, and why you seem so sure of it increasing in value?

 

[HobbyDave]

I would like to be inspired and hopefully help to inpire others along the way. I am new here and would like to know what you folks are/were doing for your profession before/after retirement. Do you like what you are doing, is it financially rewarding, and how does it help your FIRE goals etc? As far as FIRE goes, i would like to know if i am on the right track or am behind and need to catch up. Your thoughts...

...

I know that i am still far away from my FIRE goal but just for curiosity; what would you give up, money or things of value wise if you could retire today with financial security and independence?

I'm not sure exactly what you're asking. If I'm guessing right, are you saying: "Would you rather save more, or spend less?" To me, I'd like to spend the amount I think is "enough". It's a nice house (but not a huge house), it's restaurants sometimes (not often), it's steak some nights (pasta others), it's occasional foreign vacations (but not every year).

As for work, it is sometimes "ok", and sometimes tough. The purpose of work is to make me money. I doubt many people would keep doing their jobs if they weren't paid for them That's fine though, as long as I don't spend too much of my life doing this job, it makes me enough money to have fun, and eventually retire.

If that's what you're asking, it's all a personal thing. I might suggest reading "Your money or your life". It's a good book, and focuses heavily on "Is this money worth the time I put into it". That may answer your question if that's what you're asking.

 

[mudbuddha]

[Anyway, just wondering what your current home is worth, and why you seem so sure of it increasing in value?]

Hi there...Well there are a few determining factors.   First, there just isn't much land to build around here anymore and planned communities are far in between.  With that said, we were lucky to be able to get in right before the market was getting hot last couple of years and now that it slows, brand name builders like Centex, Pulte, Ryan etc...are still building like crazy- - 3 huge planned communities within 5-10 minutes to ours.   These communities will not be done for another 3-5 years.  Second factor is looking at the proposed master plan for the next 10 years of our community and more expansion is called for-- a small town of several thousand will balloon to 35-50 thousand in 10 years.  Elementary and High schools are being built as we speak.  Third, we moved in a condo 5 years ago 10 minutes from where we are now and witness the area's expansion in a few short years.  It's just amazing!  I have no doubt that we will experience the population shift again in the next few years.  Then there is job demand in the IT and Accounting, and Bio-tech sectors and areas close proximity to those corridors are already expensive-- 400K for 1 br condo?!  Our community is about half an hour away so it make sense to folks to eventually finding new homes where we settled and still find it sensible to live.

A couple years ago, you can get a 4 br 2500 sq. ft. SFH in the mid 400's.  The same one now base starts at 600's.   There are other scenarios that i have been dwelling on because they all tie into our FIRE.  Maybe the property will fetch $1M in 20 yrs, but 800-900 is definitely possible.  Our SFH is already in the mid 600's and that a conservative guess based on a few comps in the neighborhood.

Duke

 

[rw86347]

My name is Rodger. I am 33 years old, and have been working for 8 years now. I am a software engineer. I think it has been a great profession. I can avoid spending lots of money on clothing and such. Yet I still make a healty wage.

Today with my match I am placing $20,000/yr in my 401k. After each job I roll over the $$ into an IRA. As of Today I have $125,000 put away. It seems that after I hit $100,000 in November things have been just taking off.

I feel like I have been lax about post-tax savings. I am hoping to really make up for lost time this year. Right now I am placing $300/mo in a post-tax mutual fund. Although I hope to increase this to $1000/mo by the end of the year. Once this hits $200,000 I hope to buy some commercial real estate with it.

I own a small house in the country that I built with my own two hands. Thus have owe almost nothing on the place. Feeling that I needed to own more realestate, I also bought a douplex in town. Between the two of them I own about $500,000 in real estate, and owe about $290,000.

RW

 

[mudbuddha]

Hi RW,

What area are you from?  Builder of your own house now that is a great achievement that you can tell your kids in the future!  I am a car guy- well sort of, and would like to be able to build my own race car from scratch one day.  Looks like you are on your way to FIRE too if you keep socking away like that.  I know about catching up too because i made a mistake in a business venture in late 97 that costs me, well a lot of money and lost time.  Now a days, i feel like i have to play catch up every day.  We would have had a golden opportunity to retire in our mid forties and now it'll have to be by 50 if things goes as planned.  Time value of money and the discipline to save early and often- wish i was taught that while in school.  :  Better late than never though...
Duke

 

[rw86347]

I am in colorado.

You can see pictures of my house on my website.

http://www.rtebb.net/~rwilson/

I love to save, I just wish I could quit working now.

RW

 

[mudbuddha]

[You can see pictures of my house on my website.]

Hey nice place...kind of cool actually.

brewer12345,
 
A closer look at the VUL reveals 6% fees and more hidden fees!    So have stop the monthly draft and just keep enough in there to keep the insurance current.  I am also looking at other options like the convertible term life like you suggested.   The $400 or so monthly will be allocate to my wife's Vanguard Target Retirement fund where I think most of us here can breath easier with.    We have one more year to go before the surrender charges drop off and by then we'll cancel the policies. 


Have a great day folks! 8)

Duke

 

[brewer12345]

That sucks, duke. What it the surrender penalty if you kill it now? More or less than 6%?

BTW, to aid you in your shopping, I would go price term policies at www.insure.com plus hit the websites of or call TIAA-CREF, Ameritas Direct, and USAA. If you have a question about any particular life company, just ask. I used to evaluate the creditworthiness of these companies for a living.

 

[mudbuddha]

Yeah tell me about it... :  I kind of knew about the charges being high but really didn't know better.    Now armed with this forum i feel a little better about term insurance. 

The policies have about $21K in cash values since policy inception in 1998.  Surrendering them now will yield about approx.  $13K.  We are required to keep the policy for at least 10 years before the surrendering without penalties.

How are Nationwide Insurance with their term policies?  Any way to keep the cash value from the VUL and roll it into a term or something to that affect?

Your thoughts...

Duke

 

[brewer12345]

Yeah tell me about it... :  I kind of knew about the charges being high but really didn't know better.    Now armed with this forum i feel a little better about term insurance. 

The policies have about $21K in cash values since policy inception in 1998.  Surrendering them now will yield about approx.  $13K.  We are required to keep the policy for at least 10 years before the surrendering without penalties.

How are Nationwide Insurance with their term policies?  Any way to keep the cash value from the VUL and roll it into a term or something to that affect?

Your thoughts...

Duke

Nope. But if you wpuld pay significant taxes on cash out of the VUL, it might be worth rolling it over into a variable annuity offered by TIAA-CREF (cheap).

Nationwide should be OK for term, but make sure you do your shopping on price, too.