Hello! 33, Father-to-be, Lawyer, Looking for ER in 15 years

[B0bL0blaw]

In reality you probably do have enough to do what I outlined even if you paid off the student loans but I see no advantage to cutting it that close.... especially at only 3% and you'll likely have sold your condo within a year anyway so the interest savings is small potatoes.

Hopefully, your cash is earnng you something like 2.4% or so... so the marginal cost of a 3% student loan is peanuts.

Yup, that's our thinking. Although the numbers are a smidge worse.

 

[B0bL0blaw]

After a two year hiatus, I am back to report on our journey. I kind of forgot about my little journal here, what with the pandemic and all, but here we are after a move to a new house and a new job for my spouse.

Here is our status as of Jan 1, 2022 (with the 2 year change since last update in parenthesis):

Retirement Accounts: 1,080,000k (+610k wow!)
Brokerage Account: 522k (+391k)
Mortgage Debt: -708k (-290k yikes! bought a new house and took on a bigger mortgage)
Student Debt: -37k (+11k)
Cash: 54k (-106k)
529s: 74k (+53k)

The markets have obviously been extraordinary over the last 2 years, and we're thankful to have made hay while the sun was shining. Buying a bigger house has left us with more mortgage debt, and we took most of our equity from our old home and just put it into our brokerage, rather than using it to pay down the mortgage or student loans. I realize that may raise some alarms among the debt-wary folks on here, but it was a conscious decision based on the low interest rates on our debts.

Total nest egg is sitting at about $1.6M, which I calculate is close to the halfway mark (in dollars not in time). Hoping to make it for 2030, but I know I'm only one market crash away from a worse outlook. Fingers crossed and happy new year to all! Cheers!

 

[Bigdawg]

After a two year hiatus, I am back to report on our journey. I kind of forgot about my little journal here, what with the pandemic and all, but here we are after a move to a new house and a new job for my spouse.

Maybe you were too busy arguing with the nuts on GH. Glad to see you have been making progress. Best of luck in 2022 and your continued FIRE journey. Go Gophers!

 

[Blue65]

Hi! How old are your kids now?

My only little advice is that kids are very expensive especially as they get older. College, undeclared/switching majors, dropped classes, 5-7 year college plan, unsure of career path, sports, summer camp, weddings, helping them move out, student debt, crashed cars, old cars, it just goes on and on.
We are blessed that our kids are happy and grounded but we know a lot of families whose child had issues that rehab or therapy had to resolve. It can be a derailment to any best laid plans.
A spouse that plans on a career that gets derailed is a bummer too.

 

[street]

I think you are doing fine. You are working for a goal and having a plan at your age and with your income you will have a lot of options in 15 years, if you keep saving.

 

[B0bL0blaw]

Hi! How old are your kids now?

My only little advice is that kids are very expensive especially as they get older. College, undeclared/switching majors, dropped classes, 5-7 year college plan, unsure of career path, sports, summer camp, weddings, helping them move out, student debt, crashed cars, old cars, it just goes on and on.
We are blessed that our kids are happy and grounded but we know a lot of families whose child had issues that rehab or therapy had to resolve. It can be a derailment to any best laid plans.
A spouse that plans on a career that gets derailed is a bummer too.

Yes kids are still young, 5 and 3. I think the advice was just that life can thrown you curve balls, right? If so, thanks for the reminder. Definitely true that even the best laid plans don't matter if reality has other ideas. Hopefully we have enough resilience (in our plans as well as our constitutions) to weather those bumps in the road, but you're right that one should never act certain about how the future will turn out.

 

[B0bL0blaw]

I think you are doing fine. You are working for a goal and having a plan at your age and with your income you will have a lot of options in 15 years, if you keep saving.

Thanks. Cheers!

 

[mystang52]

....

Here is our status as of Jan 1, 2022 (with the 2 year change since last update in parenthesis):

Mortgage Debt: -708k (-290k yikes! bought a new house and took on a bigger mortgage)
Student Debt: -37k (+11k)
Buying a bigger house has left us with more mortgage debt, and we took most of our equity from our old home and just put it into our brokerage, rather than using it to pay down the mortgage or student loans. I realize that may raise some alarms among the debt-wary folks on here, but it was a conscious decision based on the low interest rates on our debts.....

Nothing wrong with this new mortgage/new home obligation. But remember this; as you journey towards your ultimate goal, you will likely encounter other financial detours. It's call "life." Congrats on your progress to date.

 

[B0bL0blaw]

Back for my annual update, and boy was this year a doozy!

Here is our status as of Jan 1, 2023 (with the year-to-year change since last update in parenthesis):

Retirement Accounts: 940k (-140k, moving in the wrong direction this year, as I'm sure a lot of us did)
Brokerage Account: 563k (+41k)
Mortgage Debt: -790k (-80k -- refi and changed things here a bit)
Student Debt: 0! (closed out our last 35k in student loans as rising interest rates made sense to do it)
Cash: 15k (-40k)
529s: 73k (roughly even)

The markets have obviously had a rough year, but we're trying to keep our focus on gratitude for all we have. Also, the market was so incredible over the last 12 years, and we're thankful to have made hay while the sun was shining.

Total nest egg is sitting at about $1.5M, which is about $100k behind where we were last year at this time, and still close to the halfway mark (in dollars not in time). Combined with higher expenses this year (is it inflation or is it lifestyle creep? not sure tbh), has me a little less optimistic about our 2030 goal.

Still hoping to make it for 2030, but we may have pushed ourselves off course this year. Fingers crossed for a better 2023 and happy new year to all! Cheers!

 

[ivinsfan]

B0b did you pull cash to refi your house..your cash or emergency fund is a little low. Seems as though your house purchase wasn't the best timing but oh well. You're still doing fine so carry on!

 

[MarieIG]

Portfolio performance was pretty normal for 2022 and really not a concern, and glad to see the student loans are finally gone.

I hope you got a good fixed rate on your mortgage - you didn't mention that.

These are suggestions only: build up your emergency fund from your earnings; support your lifestyle from the remaining earnings after you fund your retirement accounts replenish your emergency funds; and stop pulling equity out of the family home.

 

[B0bL0blaw]

B0b did you pull cash to refi your house..your cash or emergency fund is a little low. Seems as though your house purchase wasn't the best timing but oh well. You're still doing fine so carry on!

Cash looks a little lower than it really is because of the way I've presented it -- I actually have a smallish cash position in my investment account. You are right on the bad timing though -- it was a necessity for family reasons but not optimal for financial ones. Good to have the option to make financially suboptimal choices, sometimes. Cheers and thanks for the feedback!!

 

[B0bL0blaw]

Portfolio performance was pretty normal for 2022 and really not a concern, and glad to see the student loans are finally gone.

I hope you got a good fixed rate on your mortgage - you didn't mention that.

These are suggestions only: build up your emergency fund from your earnings; support your lifestyle from the remaining earnings after you fund your retirement accounts replenish your emergency funds; and stop pulling equity out of the family home.

Yes, I was always happy paying 2.5% student loans sloooowly, but with the interest rate climbing it did feel good to pay it off. Fixed rate 30 year mortgage at a great rate -- 3.75%. Not as low as some of the past couple years but very good from a long term pov.

Thank you for the suggestions, which all sound very wise.

 

[MarieIG]

Yes, I was always happy paying 2.5% student loans sloooowly, but with the interest rate climbing it did feel good to pay it off. Fixed rate 30 year mortgage at a great rate -- 3.75%. Not as low as some of the past couple years but very good from a long term pov.

Thank you for the suggestions, which all sound very wise.

Glad to hear you locked in a good, fixed, rate. If gives you some flexibility/ security. I have two friends, who are not young, with expiring ARMS . . .

 

[Bigdawg]

Great job Bob. Stay with your plan and I'm confident that 2030 will work out for you. Thanks for the updates.

 

[38Chevy454]

Great job Bob. Stay with your plan and I'm confident that 2030 will work out for you. Thanks for the updates.

I agree with above. You are doing great, stick with the plan and don't get tripped up over the past year.

 

[Life_by_Fire]

I can align almost perfectly with this thread, so thank you for posting. I am in similar position as your first post. I'm an attorney who is 33, married, with two toddlers (3 and 4).

My wife and I also decided to upsize from our small house once we had both kids and we took on a much larger mortgage (~$600k). Too bad I bought at the peak and my interest rate is 4.75%. However we moved to a higher COL area and, boy, the daycare cost stings. It is almost as much as our mortgage payment! Like you, we were fortunate to ride the good stock market while living below our means, and are sitting at ~1.1mil net worth excluding the house.

I recently started an in-house role, no more law firm life for me!! You have kept me motivated that maybe I can also retire early in my 40s if I choose. Keep it up!

 

[MarieIG]

I can align almost perfectly with this thread, so thank you for posting. I am in similar position as your first post. I'm an attorney who is 33, married, with two toddlers (3 and 4).

My wife and I also decided to upsize from our small house once we had both kids and we took on a much larger mortgage (~$600k). Too bad I bought at the peak and my interest rate is 4.75%. However we moved to a higher COL area and, boy, the daycare cost stings. It is almost as much as our mortgage payment! Like you, we were fortunate to ride the good stock market while living below our means, and are sitting at ~1.1mil net worth excluding the house.

I recently started an in-house role, no more law firm life for me!! You have kept me motivated that maybe I can also retire early in my 40s if I choose. Keep it up!

Congrats on going in-house especially while your children are so young! You can let your former co-workers know what day light is.

You are doing great! Consider obtaining (you could probably print one out online) an amortization chart for your mortgage, and see if payments of additional principal at any point would benefit your long term plan. When my kiddos were small we moved across the street from my parents - which almost eliminated daycare expenses, although most don't have that option. Maybe you will be able to access an all-day kindergarten program for your oldest next year (with on premises aftercare) and dedicate "the savings" to your ER plan.

One of the reasons I suggested looking at pre-payments, would be that in the event interest rates drop (and home values drop from your purchase price as of that time) that you would have sufficient equity in the home to obtain a lower interest rate, if this is something that you wanted to do. There tends to be a drop in child related expenses between K - 3rd grade, after which point it slowly starts to ramp up with activities, tutors, etc. Also, from what I have seen a large percentage of law-yas send their progeny to high end colleges/ universities. I'm not saying that is your intention, but if so, keep that in mind.

 

[Life_by_Fire]

Congrats on going in-house especially while your children are so young! You can let your former co-workers know what day light is.

You are doing great! Consider obtaining (you could probably print one out online) an amortization chart for your mortgage, and see if payments of additional principal at any point would benefit your long term plan. When my kiddos were small we moved across the street from my parents - which almost eliminated daycare expenses, although most don't have that option. Maybe you will be able to access an all-day kindergarten program for your oldest next year (with on premises aftercare) and dedicate "the savings" to your ER plan.

One of the reasons I suggested looking at pre-payments, would be that in the event interest rates drop (and home values drop from your purchase price as of that time) that you would have sufficient equity in the home to obtain a lower interest rate, if this is something that you wanted to do. There tends to be a drop in child related expenses between K - 3rd grade, after which point it slowly starts to ramp up with activities, tutors, etc. Also, from what I have seen a large percentage of law-yas send their progeny to high end colleges/ universities. I'm not saying that is your intention, but if so, keep that in mind.

Thank you! More time with the kids was a big motivator. We are starting to look at kindergarten options (didn't even think about all day programs!) but really considering when to send him because of his birthday. Unfortunately we moved several hundred miles away from my parents so we lost the free babysitters haha. I can't wait to not spend some of that money on daycare and bank it up instead in the brokerage account. We started preparing for future college expenses hoping we can handle those without loans.

My mortgage guy actually went over an amortization chart with me and recommended I make extra principal payments. His hope is the interest rates come back down in the near future and then refi.

Thank you for the comments and recommendations! The all day kindergarten had not been one we thought of.

 

[B0bL0blaw]

Happy new year folks. I started this thread just about 8 years ago, and I am just past the halfway point of my stated original goal of FI in 15 years.
After a bit of worry last year, I think 2023's rebound has me feeling somewhat optimistic that we are on track for our goal. As always appreciate any feedback, comments, or questions. Here is our status as of Jan 1, 2024 (with the year-to-year change since last update in parenthesis):

Retirement Accounts: 1.25M (+306k, due to a nice rebound in the market)
Brokerage Account: 670k (+107k, same)
Mortgage Debt: -775k (+15k)
Cash: 15k (-0-)
529s: 100k (+27k)

The markets have obviously had a nice rebound after a bad 2022. Total nest egg is sitting at about $1.9M, which is about $400k more than where we were last year at this time. Goals for 2024? Staying the course. Happy new year to all! Cheers!