Young, Fortunate, & Eager (27-year old's dream to give back))

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nerdyJON

Dryer sheet aficionado
Joined
Aug 6, 2015
Messages
33
Good morning fellow FIRErs,

I am a 27 year-old from Chicago. I am new to the FIRE community, however, have been on the site quiet often. I found this site by chance a couple years ago while searching how to live my dream: retire and enjoy life. I live a big lifestyle and unfortunately I have big dreams in retirement (sailing), helping others, and putting future kids through school. I plan on retiring at 55-60 (that is still young to me).

My soon to be wife have been together since high school. We are both employed by megacorps and make a combined income of $130K + Bonuses. We are very fortunate and lucky for the opportunities that we have had over the last couple years and are always looking for how we can make more of an impact on our community, our work, and our lives. We are looking forward to advice and hopefully this will help us in developing a plan for our journey.

I track and update most of our financials through networthiq just to ensure that we are headed in the right direction.

Combined Financials:

Debt

  • No credit card debt or student loans
  • 1 Car loan (low interest, we make more interest in our bank account), 1 car paid in full
  • Rental Property ($95K equity, $140K loan)
  • Main Property ($60K equity, $220K loan)
Cash/Investments


  • $29K in cash ($15K in Bank Account with 3% interest :))
  • $65K in investments (15% addition for ESPP)
  • $33K in ROTH IRAs (Max every year)
  • $97K in 401k (15%, 4% match)
Future Goals


  • Increase passive income (rental properties, any other ideas?)
  • Getting married (finally bought the ring and just waiting for a surprise trip)
Glad I am taking the first step and introducing myself after reading so much on this forum. I am looking forward to learning from everyone here. :dance:
 
Welcome aboard, nerdyJon. It looks like you're off to a decent start with your savings and investments. I don't think I had attained your level of net worth when I was 27, yet I was able to partially retire (I'm just working part-time now, off and on, mostly for "fun") at the ripe old age of 45. So keep up the good work and I'm sure you'll achieve your early retirement goals.

Just out of curiosity, where are you getting 3% interest on a bank account?
 
Thank you! And I know I have a long road ahead with ups and downs so hopefully I can sustain a nice pace.

Credit Union - Raining Savings Fund, unfortunately there are some rules (1.5% for the first year, $500 max deposit a month, and max 2 withdraws a year).

So as long as I manage the money appropriately, it is a great vehicle for investment right now.
 
Welcome. Sounds like you're off to a great start.
 
Welcome, nerdyjon! You are on track for FIRE well before 55 if you stay the LBYM course. And what's really important is FI - that means you are in the driver's seat to decide when to ER (or not).

One piece of advice - DH and I agreed before we married that we would live on one salary in case one of us decided to stay home with the kids when they were young. That was instrumental in keeping us LBYM and enabling ER (even though I went back to work within weeks as I would have been a horrible SAHM).

We'll look forward to the news when you pop the question!
 
MBAustin said:
Welcome, nerdyjon! You are on track for FIRE well before 55 if you stay the LBYM course. And what's really important is FI - that means you are in the driver's seat to decide when to ER (or not).

One piece of advice - DH and I agreed before we married that we would live on one salary in case one of us decided to stay home with the kids when they were young. That was instrumental in keeping us LBYM and enabling ER (even though I went back to work within weeks as I would have been a horrible SAHM).

We'll look forward to the news when you pop the question!
Click to expand...

1 month away from big day and thank you for the advice. We will have to try that and may be hard with 15% going to 401k, 15% going to ESPP, 6% going to ROTH IRA and 6% going to the rainy day savings fund.
 
Bravo, sir. Sounds like you have it figured out. Life will keep throwing curveballs, but I think having your future plans laid out so well will allow for much more flexibility and a lot more well rested nights than so many of your peers.
 
Unfortunately, I have strayed away from my original plan. My now fiance and I have been doing a lot of home remodeling (I would like to say it adds value, but in the long run it would have been better to save that money).

Combined Financials (6 month update):

Debt

  • No credit card debt or student loans
  • Repaid Car loan, 2 cars paid in full
  • Rental Property ($100K equity, $140K loan)
  • Main Property ($120K equity (increased value due to recent sales), $220K loan)
Cash/Investments

  • $45K in cash ($12K in Bank Account with 3% interest :) (decreased for trip/property tax bill))
  • $70K in investments (15% addition for ESPP)
  • ~$40K in ROTH IRAs (Max every year, going to be $45K with fiance's investment)
  • $110K in 401k (15%, 4% match)

This is a slow moving process with little to "show" for progress.
 
nerdyJON said:
1 month away from big day and thank you for the advice. We will have to try that and may be hard with 15% going to 401k, 15% going to ESPP, 6% going to ROTH IRA and 6% going to the rainy day savings fund.
Click to expand...

Wow! So you're saving 42% of your income? You should be giving me advice :) I FIRE'D at 46 but this kind of savings rate, sustained for a few decades, would have helped even more!

Is this before or after taxes?? Either way, sounds like you're doing great. The challenge will be sustaining this over a couple of decades by controlling the upward creep in lifestyle.

A few thoughts:

- I agree that financial independence (FI) is a great goal for a younger couple. You can decide on ER later.

- How frugal is your wife? What are your plans for kids and how much $$ do you plan to throw at them? Obviously, the challenge is to balance reasonable comfort and fun in the present while still saving enough to do whatever you want one day when you reach FI.

- Have you guesstimated how much money would be needed to reach FI?? I'd suggest approx 25x (4%) to 33x (3%) of actual expenses. Since you're a nerd, you can use Firecalc (retirement savings & income simulator) to fine-tune this a bit, although keep in mind this is just an estimate. Still this is much better than many retirement calculators that assume you need to replace 80% of income; EXPENSES are what matter.

- What percent of your savings are you planing to hold in employer stock thought the ESPP? I'm not a big fan of holding lots of employer stock because a) I'm not a stock picker and b) employer trouble often correlates with layoffs and c) I'd rather diversify in low-cost passive index funds. Be careful about the lure of "free money" (discounted stock) that can pull your total investment plan in an undesired direction. If ESPP remains a significant part of your plan, please keep watch your allocation and have a plan to deal with tax consequences of any changes.

Good luck, you're well on you way!

FB
 
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I would say we roughly save
FreeBear said:
Wow! So you're saving 42% of your income? You should be giving me advice :) I FIRE'D at 46 but this kind of savings rate, sustained for a few decades, would have helped even more!

Is this before or after taxes?? Either way, sounds like you're doing great. The challenge will be sustaining this over a couple of decades by controlling the upward creep in lifestyle.

A few thoughts:

- I agree that financial independence (FI) is a great goal for a younger couple. You can decide on ER later.

- How frugal is your wife? What are your plans for kids and how much $$ do you plan to throw at them? Obviously, the challenge is to balance reasonable comfort and fun in the present while still saving enough to do whatever you want one day when you reach FI.

- Have you guesstimated how much money would be needed to reach FI?? I'd suggest approx 25x (4%) to 33x (3%) of actual expenses. Since you're a nerd, you can use Firecalc (retirement savings & income simulator) to fine-tune this a bit, although keep in mind this is just an estimate. Still this is much better than many retirement calculators that assume you need to replace 80% of income; EXPENSES are what matter.

- What percent of your savings are you planing to hold in employer stock thought the ESPP? I'm not a big fan of holding lots of employer stock because a) I'm not a stock picker and b) employer trouble often correlates with layoffs and c) I'd rather diversify in low-cost passive index funds. Be careful about the lure of "free money" (discounted stock) that can pull your total investment plan in an undesired direction. If ESPP remains a significant part of your plan, please keep watch your allocation and have a plan to deal with tax consequences of any changes.

Good luck, you're well on you way!

FB
Click to expand...

Great questions, I would say us combined we save around 25-30% pre-tax. Some of the savings are stocking money away for home improvements/emergencies.

How frugal is your wife... My fiance has come a long way but she likes the comforts of life. We plan on having kids once we are financially stable (2-4 years). I would like to be able to put money in a savings account once they are born for college and then the rest we will adjust our lifestyle. Once again we could definately save more but we still like the comfort of our lifestyle (hence why I am on here to see if we can push it further.)

Have you guesstimated how much money would be needed to reach FI?? Not yet, will definitely do as we start a routine of savings.

As for ESPP, I rarely hold more than 10% of my taxable investments in the employee stock. I usually hold 3-6 months and then sell if I find a better investment vehicle. My company's stock is a stable, dividend paying, and strategic so it may be one of the best investments right now...
 
Its been a while, but thought an update was needed to see where I have come from and where I am going:


Combined Financials (24 month update):

Life Update


Finally married :) to the most amazing wife
Wife promoted
Promotion & transferred companies

Debt


  • No credit card debt or student loans
  • 1 Car paid in full, sold a car due to wife having company car
  • Sold the rental property
  • Refinanced main property to 15 year loan (hoping to pay off in 9 years)
  • Main property ($210K equity)
Cash/Investments


  • $55K in cash ($40K in Bank Account with 3% interest)
  • $80K in investments (sold ESPP, focus is on ROTH/Retirement)
  • ~$67K in ROTH IRAs (Main focus)
  • $191K in 401k (Focus, 15%-25%, 4% match)

Continued focus on health and wealth :)
 
Couple questions for you:

1) What exactly is the $80k in "investments"? It looks like this could be your ESPP balance? If so, does this mean you have $80k of your company's stock? That's pretty risky from an asset allocation standpoint. I would look to diversify out of that over time, so that it comprises less than 15% of your overall portfolio.

2) Did you really grow your 401(k) balance from $97k to $191k in two years? Even assuming you maxed out your contributions and your employer matched 4%, and even with fantastic market performance, adding $94k in 24 months seems almost too good to be true. But, if it is, congrats!
 
Sojourner said:
Couple questions for you:

1) What exactly is the $80k in "investments"? It looks like this could be your ESPP balance? If so, does this mean you have $80k of your company's stock? That's pretty risky from an asset allocation standpoint. I would look to diversify out of that over time, so that it comprises less than 15% of your overall portfolio.

2) Did you really grow your 401(k) balance from $97k to $191k in two years? Even assuming you maxed out your contributions and your employer matched 4%, and even with fantastic market performance, adding $94k in 24 months seems almost too good to be true. But, if it is, congrats!
Click to expand...

1) $80K was split with ESPP and taxable investments. Only 15% was ESPP (hindsight wish it was more at the time ;)) This is really just my play money for picking stocks as a hobby.

2) My 401K was grown from $83K to $139K, I now included my wife's finances and she grew/saved from $14K to $52K.
 
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Web developers have stopped updating the site I used to track progress so I will post here every 4-6 months just my records.


Life updates

  • Received company bonus
  • Just got back from a international vacation (WOOOHOOO!)
Debt

  • No credit card debt or student loans
  • Main property, 15 year - $140K loan (We are guessing it is now around $210K-$230K in equity)
Cash/Investments

  • $65K in cash ($49K in Bank Account with 3% interest)
  • $82K in investments (sold most stocks, just sitting on the sideline although GE looks very tempting)
  • ~$70K in ROTH IRAs
  • $217K in 401k (Focus, 15%-25%, 4% match, first year completely maxing out)
Total NW: ~$700K with personal property
 
Way to go ! Like you I started planning my early exit when I was 22 years old ! I started saving for retirement my first day of full time post college employment. I always saved half my raises (which helped me avoid lifestyle creep) and all my bonuses (except for 2 - one for a big "bucket list" vacation and one to buy a small boat). I retired at 53. I now use my time and talents to serve others. I do also donate money, but I do it within my means, keeping to my 3% withdrawal rate.

The first million is the hardest and you are well on your way. Congrats !!
 
Live And Learn said:
Way to go ! Like you I started planning my early exit when I was 22 years old ! I started saving for retirement my first day of full time post college employment. I always saved half my raises (which helped me avoid lifestyle creep) and all my bonuses (except for 2 - one for a big "bucket list" vacation and one to buy a small boat). I retired at 53. I now use my time and talents to serve others. I do also donate money, but I do it within my means, keeping to my 3% withdrawal rate.

The first million is the hardest and you are well on your way. Congrats !!
Click to expand...

Exactly where I want to be when I am 53, retired with a small boat, and serving others. Thank you for the extra motivation!
 
Life updates
Busy past 1448 days according to the warning of an old thread
2 kids added to the mix (put a damper on savings due to childcare costs)
Multiple job movements
Continued goal and path to FI
Moved to a new house

Debt
No credit card debt or student loans
Main property, 15 year - $220K loan ($450K+ in equity)

Cash/Investments
$45K in cash (slight decrease due to other saving methods)
$231K in taxable investments
$10K in HSA investments
$131K in ROTH IRAs
$40K in Kids college 529s
$570 in 401ks (maxing out)

Total NW: ~$1.47M with personal property
 
Thanks for following up, nerdyJON, it's always good to see other forum members making progress towards their goals!

Now you've got me wondering what I said in my "Hi, I am..." post. I do comment in the Milestones thread, but it would be interesting to see where I was when I joined!
 
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You are doing great! Congratulations.

Have you picked an income level for retirement that you will be happy to live on yet? The often suggested number of 25 X, however you're very young and have two kids that may go to college, so I would shoot for higher than that. Also, do you plan on staying in that house? If you are, would not count it as part off my net worth. I dropped mine out of my net worth about the time I reached $1M.
 
The Cosmic Avenger said:
Thanks for following up, nerdyJON, it's always good to see other forum members making progress towards their goals!

Now you've got me wondering what I said in my "Hi, I am..." post. I do comment in the Milestones thread, but it would be interesting to see where I was when I joined!
Click to expand...

Perfect! Moving to Milestones thread.
 
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