New guy, 30 years old

[ShortInSeattle]

You're doing quite well!

 

[dvalley]

Nice progress overall- congrats on sticking to your FI goals. Which state are you in, that makes a difference. I'm about where you want to be in age and approx your target number. However, I don't feel I'm FI - I need at least twice the amount if not more for a long retirement. So my goal is to be FI by 50 with at least 1.2MM for approx $42k per year expenses.

 

[YoungSaver]

1 year later check-in. 36 years old a couple days ago. Girlfriend is going good. Had non-emergency surgery last year. Cheap insurance = high deductible. Maxed out 401(k) to lower my AGI and can deduct some medical expenses. Business I invested in should open in a couple months. Net worth has been going up quickly. Thanks Obama/Trump.

$235k in 401(k)
$77k in Roth IRA
$73k in non-qualified
$(60k) mortgage
$(13k) in second mortgage

Total savings minus mortgage is about $312k.

$179k in 401(k)
$64k in Roth IRA
$64k in non-qualified
$(65k) mortgage
$(17k) in second mortgage

Total savings minus mortgage is about $226k.

 

[YoungSaver]

Summary:
March 2012, Total savings minus mortgage is about $110k
2013
2014
March 2015, Total savings minus mortgage is about $244k
March 2016, Total savings minus mortgage is about $226k
March 2017, Total savings minus mortgage is about $312k

 

[KevinC]

"1 year later check-in. Girlfriend moved in with me."
I kinda giggled alittle here ! I'm picturing your 2018 check-in post to begin something like this.........
Wedding went great , wife is talking about having a bunch of babies !!!


Good job having a plan in place !

 

[Golden sunsets]

Why do you subtract your mortgage from your savings? That makes little sense, unless the home the mortgages are on is worthless. Your net worth conservatively, would be your total savings without accounting for any equity in your home.

 

[pb4uski]

Agree... if he is going to include mortgages then he should include value of collateral as well... or better yet, just exclude mortgages.

 

[exnavynuke]

Why do you subtract your mortgage from your savings? That makes little sense, unless the home the mortgages are on is worthless. Your net worth conservatively, would be your total savings without accounting for any equity in your home.

If he doesn't want to sell the house, then counting the mortgage as a negative balance but not counting the value as a positive balance reflects the "liquid" worth of his money minus debt. I.e. he could use his monetary assets to pay off the mortgage and have the house paid for and the amount of his calculation remaining in his portfolio.

I wouldn't include my home equity (for a house I plan to live in and keep) as part of my investment balance for determining withdrawal rates. I would, however, include any payments required for owning the home in my calculations for expenses. This just seems to be a different way to do that imo.

 

[nash031]

If he doesn't want to sell the house, then counting the mortgage as a negative balance but not counting the value as a positive balance reflects the "liquid" worth of his money minus debt. ...

I wouldn't include my home equity (for a house I plan to live in and keep) as part of my investment balance for determining withdrawal rates. I would, however, include any payments required for owning the home in my calculations for expenses. This just seems to be a different way to do that imo.

We've discussed plenty of times how NW including home equity is a somewhat erroneous number if you're looking to calculate how much you can spend off of it. That said, I think in your mid-30s, or 40s, or really any time before you're definitely settled in your "forever" home, neglecting the value of that asset is a mistake that could lead you to work too long.

In our case, DW and I are late 30s. We have roughly 60% of the value of our home in equity, and owe ~40% on the mortgage. Relative to our investable assets, that equity which we could realize on the sale of our home would increase our available assets by another 40%.

That's not insignificant, especially if we were to move from our high COL area to a lower COL area.

So I agree with others that subtracting the mortgage from your savings is conservative to a fault, and more conservative than anyone in their 30s probably needs to be.

 

[Katiek]

Thanks for the updates - love hearing how things are going. Glad you're on track, and whether or not you eventually RE, FI gives you a lot of options.

 

[pb4uski]

I guess I would frame what nash031 said differently... home equity is always part of net worth... by definition since net worth is total assets less total liabilities and the house is part of total assets and the mortgage is part of total liabilities.

However, you can only live off a subset of your net worth... so your house would be excluded from the assets you can live off of unless selling and renting or selling and downsizing is part of your plan. Even if you exclude the house it is included in a backwards way in that your expenses don't include the cost of rent but do include taxes, maintenance, etc.

But nonetheless, I think it is inappropriate to include debt in measuring what you have to live off... a better approach is to exclude debt but include debt service in your expenses. That is what we would do in Firecalc... exclude the debt in calculating our portfolio number but include the debt service in cash outflows.. preferably as off-chart spending with an offset when the debt service ends.

 

[YoungSaver]

1 year later check-in. 37 years old. Girlfriend is still going good. Setting aside cash for engagement ring and future wedding expenses. Girlfriend had a medical issue last year, so we have really been trying to lower expenses. Minimal trips/vacations, no concerts, staying home more. Business I invested in opened last year. The business is doing good. My car is again not doing good and requires some major surgery. "Drive it until the wheels fall off"....yeah, I've done that like 3 times now. I'm really getting tired of all the major work the car requires every year or two. I'm debating selling the car as-is or getting it fixed and driving it for another year.

Thanks Trump for the massive increases in my accounts.

$298k in 401(k)
$93k in Roth IRA
$83k in non-qualified
$15k in cash
$(55k) mortgage
$(8k) in second mortgage

Total savings minus mortgage is about $426k.

1 year later check-in. 36 years old a couple days ago.

$235k in 401(k)
$77k in Roth IRA
$73k in non-qualified
$(60k) mortgage
$(13k) in second mortgage

Total savings minus mortgage is about $312k.

 

[YoungSaver]

My quote below was from 2012. Life was different back then.

"40 years old is the "I'm dreaming" age".
Realistically, 40 could be my BaristaFI level. $500k will most likely not be enough. Health care is crazy expensive. After my GF and I both had to deal with the max-deductible in our high-deductible plans, it's really been an eye opener how much one little mistake can cost. I should be at $500k by 40 years old, so at that point I could just coast for a decade or two.

50 years old and retired seems realistic.

I actually rarely browse this forum anymore. I'm usually on reddit. I seem to be the minority demographic on this site, but I'm in the majority on reddit (young, male, IT workers).

Hi everyone. I've browsed this forum for several months and decided to join after hitting a personal milestone. I finally made it to $100k in my 401(k).

$400k is my current magic number, however $500k is probably more realistic. $500k * 4% = $20k annual. 40 years old is the "I'm dreaming" age, however retirement at 50 is very realistic. I eventually see myself living overseas 4-5 months out of the year and coming back to the US to work part time for 7-8 months. So ideally I need to accumulate $400k in 20 years. That's possible, but I enjoy my freedom and am not motivated to work extra hard to make it happen by age 40. The extra hard route involves a night job and a roommate.

That's me. I look forward to being a member of this website.

 

[exnavynuke]

My quote below was from 2012. Life was different back then.

"40 years old is the "I'm dreaming" age".
Realistically, 40 could be my BaristaFI level. $500k will most likely not be enough. Health care is crazy expensive. After my GF and I both had to deal with the max-deductible in our high-deductible plans, it's really been an eye opener how much one little mistake can cost. I should be at $500k by 40 years old, so at that point I could just coast for a decade or two.

50 years old and retired seems realistic.

I actually rarely browse this forum anymore. I'm usually on reddit. I seem to be the minority demographic on this site, but I'm in the majority on reddit (young, male, IT workers).

50 Seems pretty good imo. I'm shooting for my late 40's myself (41 now). You seem to be doing pretty well either way

 

[YoungSaver]

1 year later check-in. 38 years old. GF is still going good.
I can forsee that healthcare expenses are a HUGE unknown for the future. Started an HSA. Car was repaired, still driving it, almost at 200k miles. Business I invested in is going good. Expanding but no profits yet. Last year I upped my 401k due to much higher taxes last year.

$321k in 401(k)
$92k in Roth IRA
$84k in non-qualified
$7k in HSA
$7k in cash
$(49k) mortgage

Total savings minus mortgage is about $462k.

1 year later check-in. 37 years old. Girlfriend is still going good. Setting aside cash for engagement ring and future wedding expenses. Girlfriend had a medical issue last year, so we have really been trying to lower expenses. Minimal trips/vacations, no concerts, staying home more. Business I invested in opened last year. The business is doing good. My car is again not doing good and requires some major surgery. "Drive it until the wheels fall off"....yeah, I've done that like 3 times now. I'm really getting tired of all the major work the car requires every year or two. I'm debating selling the car as-is or getting it fixed and driving it for another year.

Thanks Trump for the massive increases in my accounts.

$298k in 401(k)
$93k in Roth IRA
$83k in non-qualified
$15k in cash
$(55k) mortgage
$(8k) in second mortgage

Total savings minus mortgage is about $426k.

 

[MBAustin]

Good for you, YoungSaver! Thanks for the update!

 

[HI Bill]

All I can say is, plan for the unexpected (or at least have some contingency in place). I was single until 47, and that derailed my age 50 goal, to age 53, and that was without adding a kid to the mix!

 

[Foodie]

If you find a partner make sure he/she is financially compatible with you.

 

[db79]

I actually rarely browse this forum anymore. I'm usually on reddit. I seem to be the minority demographic on this site, but I'm in the majority on reddit (young, male, IT workers).

I'm the same age but more of a browser than poster.

My goal is slightly different as I'm planning for RE at 55 with $2.3M. I tend to be overly conservative, but I'm on track to be mortgage free (HCOL), son graduated from college and paid for (if he goes) at 55. My wife is 7 years younger so she can provide healthcare coverage during my gaps years plus we should be largely able to live off her single income. For those first several years money I would pull out of investments would serve to cashflow traveling and pocket money for my hobbies.

 

[YoungSaver]

Needless to say, things have been thrown way off. I didn't post an update in March due to the market going crazy due to Covid. I went back and found my numbers for March 1st. I believe these numbers should work well for year-to-year comparisons. Also I wanted to update to see how it has been growing. Girlfriend still going well, saving for an engagement ring.

March 1 2020, approximate numbers:
$355k in 401(k)
$184k in Roth IRA & non-qualified
$20k in HSA & non-qualified
$(44k) mortgage

Approx Total savings minus mortgage is about $515k.

Summary:
March 2012, Total savings minus mortgage is about $110k
2013
2014
March 2015, Total savings minus mortgage is about $244k
March 2016, Total savings minus mortgage is about $226k
March 2017, Total savings minus mortgage is about $312k
March 2018, Total savings minus mortgage is about $426k
March 2019, Total savings minus mortgage is about $462k
March 2020, Total savings minus mortgage is about $515k


As I'm typing this in August, my numbers now are wildly different due to the Covid crisis (about 625k). I refinanced my mortgage and got about $40k cash back. This was planned in 2019 for house maintenance. My company laid off 95% of our staff, but I was lucky to keep my job, but have my salary lowered 20%. I've cut back spending everywhere. I work from home now. I sold my beater Honda. I've been day trading a bit to help raise some money. I've rebalanced one account a bit to try and get out from under an advisor. I closed an account at one bank, and opened at a new bank. The business I invested in has been doing well during the Corona crisis.
Basically my current financial numbers are completely different from what they were on March 1. It will be interesting to see my numbers in March of 2021.

Current retirement goal is 1.2-1.4 million. I will be 40 in March 2021. Hoping to retire by 45 at the latest.

 

[ut2sua]

Maybe, but if I was the OP I wouldn't harbor any illusions that its an even split. A recent study showed that 75% of women admitted they would not marry an unemployed guy (and that's just the people who admitted it).

The only thing OP needs to do is to search among the other 25% of women for someone with ~1.8mil in saving, and he can FIRE anytime. I should have thought about this years ago

 

[YoungSaver]

2021 update. It's been a wild ride. My main goals have been to reduce spending as much as possible and being much more active in one of my investment accounts. I stopped day-trading and now trade just a few times a month. The last year has consisted of mostly staying at home. Fast food maybe twice a week and no restaurants, bars, etc. A few domestic trips to visit gravely ill family members.

$531k in 401(k)
$249k in Roth IRA & non-qualified
$88k in HSA & non-qualified
$(77k) mortgage

Approx Total savings minus mortgage is about $791k.

Summary:
March 2012, Total savings minus mortgage is about $110k
March 2013, Total savings minus mortgage is about $170k
March 2014, Total savings minus mortgage is about $227k
March 2015, Total savings minus mortgage is about $244k
March 2016, Total savings minus mortgage is about $226k
March 2017, Total savings minus mortgage is about $312k
March 2018, Total savings minus mortgage is about $426k
March 2019, Total savings minus mortgage is about $462k
March 2020, Total savings minus mortgage is about $515k
March 2021, Total savings minus mortgage is about $791k

A 53.5% increase from last March

The growth has just been amazing. I am now semi-actively planning for retirement. We are starting to purchase items in the anticipation that we will use them for a very long time. We are getting rid of things we really don't need and have plans for a few upgrades around the house. I can see the light at the end of the tunnel!

 

[38Chevy454]

Keep up the good work, you are getting there. The big question is will the nice bull run stock returns of the past 10 years go on for how long? That's the only part that could derail your age 45 retirement target. However the worse case is you have to add a little more years and wait for recovery, while at the mean time increasing savings and buying when investments are on sale.

 

[Love This Community]

Nice progress there. Snowball effect will kick in and continue. Good luck!

 

[RxMan]

Well done YoungSaver! Keep up the good work and you will have lots of options and flexibility with your life plans.