29 (now 38) - Long Way to Go, But Digging In

[Standard Staples]

Quote:

Originally Posted by Exit 2024 Staples, wanted to ask why you are not maxing out HSA? Looks like you have money for that and it will cut your taxes also. Curious about reasons as for us HSA is basically one more IRA, we never take anything out. 2019 contribution limit for single is $3500 and for family coverage it is $7000, all inclusive employer match if any offered.

This is a good question. Since we rarely use any of the money, I guess I mentally wanted to shift some of it to the taxable accounts, foregoing some of the tax savings for other vehicles. I've also been a bit protective of the funds, treating the HSA as more of a savings account than an IRA. I need to do more research on this part of it.

That being said, I will likely go back to maxing out in 2020.

[Standard Staples]

Quick quarterly update. Q2 was another amazing quarter. Net worth dipped in May and shot back up almost $50K in June. The two comma club is even a potential stretch goal.

Everything is moving in the right direction, and we're green on every metric. It's going to get a bit better, as my wife was recently promoted with a raise taking effect after a 60-day evaluation.

INCOME & SPENDING
Annual Combined Income: $240,000
End Q1 Tracking @ $257,000
Tracking @ $264,000

Annual Expenses: $100,000
End Q1 Tracking @ $97,000
Tracking @ $94,000

Annual Savings: $86,800
End Q1 Tracking @ $101,000
Tracking @ $114,000

Annual Savings Rate: 46%
End Q1 Tracking @ 51%
Tracking @ 55%

Net Worth: $850,000 => Modifying to $900,000
End Q1 Tracking @ $890,000
Tracking @ $950,000

GOALS
$42,000 401k (including Company Matches)
End Q1 Tracking @ $45,000
Tracking @ $45,000

$5,200 House Principal Payoff
End Q1 Tracking @ $5,700
Tracking @ $5,700

$15,000 Reinvested Dividends
End Q1 Tracking @ $16,000
Tracking @ $20,000

$12,000 Roth (Combined)
End Q1 ON TRACK
DONE

$3,400 HSA
ON TRACK
________________________________________
$77,600 TOTAL
End Q1 Tracking @ $82,100
Tracking @ $86,100

On to Q3.

[Exit 2024]

Excellent progress, Staples!!!
You are getting close to big $1M in NW, keep it up and you will be there in no time!!!

[23isme]

No idea how I missed this thread before. I started at the beginning, and it reads like a suspense novel. So glad to see it has a happy ending so far. Great work, and keep it up!

[nwtractor]

This is a great post. Thanks for sharing your adventure through the years. I am currently 28 and am a very similar situation to where you started. It is inspirational to where you started and where you are now. My goal is to hit 1mil in 5 years and I see how it could be achieved by simply investing and see where the market takes you.

One question I do have is, why did you get out of your rental property? If you were to go back in time would you purchase a rental property again.

[WhenIsItTime]

Great to see this journey with (1) couple gainfully employed, (2) living below means, (3) power of compounding. Congrat’s!

[HI Bill]

Quote:

Originally Posted by WhenIsItTime (1) gainfully employed, (2) living below means, (3) power of compounding.

Maybe this should be the site's new tag line, at least for the FIRE planners!

[Standard Staples]

Quote:

Originally Posted by nwtractor This is a great post. Thanks for sharing your adventure through the years. I am currently 28 and am a very similar situation to where you started. It is inspirational to where you started and where you are now. My goal is to hit 1mil in 5 years and I see how it could be achieved by simply investing and see where the market takes you. One question I do have is, why did you get out of your rental property? If you were to go back in time would you purchase a rental property again.

Not sure how I missed this when you first posted, but I'll answer now.

We got out for two reasons:

1) Our tenants asked to purchase the property, and they had been such fantastic tenants and friends over the course of several years, I thought it was only fair to consider it. They presented a reasonable offer, and I gladly accepted.

2) We had moved out of state, and I never loved the idea of being an out of state landlord. If my existing tenants had decided to move, it would have been a major headache to get it reoccupied.

Financially, it likely would have been wise to hold on to the property, as it was cash flow positive. But as with many things personal finance, this one landed more on the personal side than the finance side. I feel good about the people that bought the property, I know they're extremely happy to own that home, and it takes something off my plate of potential concerns. So, to answer your question, if I could go back in time, I'd make the same decision.

I think I'd consider a local rental in the future, but it's not on the immediate horizon.

[Standard Staples]

Q3 update. This is my 5 year anniversary since first posting. It's weird to look back and see the old numbers, thoughts, goals, etc. The good news is, we couldn't be happier with where everything has landed, and we feel completely on track to at least have the option of an early retirement. I appreciate anyone that has followed and commented, as it's nice to have a community of like minded individuals.

I feel like a broken record, but this was another amazing quarter. Net worth is tracking up. I think I'll have to wait for 2020 to hit $1M, but I'll admit I'm slightly embarrassed that $850K was the original goal for the year.

We're still green on every metric, and my wife's promotion/raise took hold on 9/1. The late surprise this quarter is that I was also promoted with a raise in salary and annual bonus, which took effect on 9/15.

INCOME & SPENDING
Annual Combined Income: $240,000
End Q2 Tracking @ $264,000
Tracking @ $268,000

Annual Expenses: $100,000
End Q2 Tracking @ $94,000
Tracking @ $92,000

Annual Savings: $86,800
End Q2 Tracking @ $114,000
Tracking @ $119,000

Annual Savings Rate: 46%
End Q1 Tracking @ 55%
Tracking @ 56.5%

Net Worth: $850,000 => Modifying to $900,000
End Q2 Tracking @ $950,000
Tracking @ $975,000

GOALS
$42,000 401k (including Company Matches)
End Q1 Tracking @ $45,000
Tracking @ $45,000

$5,200 House Principal Payoff
End Q2 Tracking @ $5,700
Tracking @ $12,000

$15,000 Reinvested Dividends
End Q2 Tracking @ $20,000
Tracking @ $21,000

$12,000 Roth (Combined)
End Q1 ON TRACK
DONE

$3,400 HSA
ON TRACK
________________________________________
$77,600 TOTAL
End Q2 Tracking @ $86,100
Tracking @ $93,400

Hoping for a strong finish to the year! Thanks again for following along.

[Exit 2024]

Awesome progress, Staples !!!! If markets will cooperate just a little - you might join two comma club by end of this year will be waiting for your next update

[Standard Staples]

Another year in the books, this time with a stellar finish.

Here's how the end of 2019 looked, when compared with the end of 2018.

================================================== ============

$264,600 Annual Combined Income - $281,100

$93,940 Roth - $124,820
$73,430 Taxable Brokerage - $90,300
$52,110 Rollover IRA - $71,180
$274,960 401k (Combined) - $399,800
$48,450 IRA/Roth IRA (College Savings) - $70,640
$76,920 Cash/HSA - $81,530

Primary Residence: $340,000 Debt ($195,000 Equity)

NET WORTH END 2014: ~$354,100
NET WORTH END 2015: ~$489,300
NET WORTH END 2016: ~$657,100
NET WORTH END 2017: ~$805,000
NET WORTH END 2018: ~$783,810
NET WORTH END 2019: ~$1,033,270

2014 Annual Expenses: $57,600
2015 Annual Expenses: $57,300
2016 Annual Expenses: $71,715
2017 Annual Expenses: $76,690
2018 Annual Expenses: $84,820
2019 Annual Expenses: $95,520

2014 Annual Savings: $71,850
2015 Annual Savings: $90,120
2016 Annual Savings: $81,560
2017 Annual Savings: $98,830
2018 Annual Savings: $121,710
2019 Annual Savings: $125,570

2014 Annual Savings Rate: ~55%
2015 Annual Savings Rate: ~61%
2016 Annual Savings Rate: ~53%
2017 Annual Savings Rate: ~56%
2018 Annual Savings Rate: ~59%
2019 Annual Savings Rate: ~57%

================================================== ============

2019 Goals & Results

Annual Combined Income: $240,000 - Beat by $41,100
Annual Expenses: $100,000 - Beat by $4,480
Annual Savings: $86,800 - Beat by $38,770
Annual Savings Rate: 46% - Beat by 11%
Net Worth: $850,000 - Beat by $183,270

$42,000 401k (including Company Matches - No match at the new company, yet) - DONE - $44,590
$5,200 House Principal Payoff - DONE - $15,000
$15,000 Reinvested Dividends - DONE - $23,770
$12,000 Roth (Combined) - DONE
$3,400 HSA - DONE__________________________
$77,600 TOTAL - DONE - $98,760

Could not feel better about these goals, and I'm slightly embarrassed by the $850K NW goal. That goal was left in the dust months ago, and we have found ourselves on the right side of the two comma club. The $250K increase from last year is a tremendous number to see as a reality on the screen.

================================================== ============

2019 Recap

This was a really great year. We went on several nice vacations, continued to advance in our careers and the kids are happy and doing well in school.

In my last update, I mentioned the surprise of a promotion at work. Only one quarter later, I can mention another surprise, as I have accepted and started a new job. I wasn't looking and had no intentions of leaving, but this was just good of an opportunity to pass up, with strong upward mobility. The 35% raise in base salary didn't hurt, either.

As a Christmas present to ourselves, we got around to one of the projects we have been discussing since before we even closed on our home. We found a great contractor and had a built-in entertainment wall installed in our great room, with a combination of cabinets, bookshelves and lighting. It has completely transformed the feel of the room, and it was a dramatic step forward in making this house a home.

================================================== ============

2020 Notes & Goals

2020 is poised to be one of our best years yet. We're going on another cruise for my little girl's birthday next month, and we booked an 8-day for the holiday season.

Having completed our first full year in this house, I feel like I have a good grip on the overall budget. We're planning another one or two projects with the same contractor, which will take a bite out of the budget, but we know it will be well worth it.

I'll be focused on finding my groove with the new job, but one month in, I'm already confident it was a good move.

Annual Combined Income: $300,000
Annual Expenses: $95,000
Annual Savings: $135,000
Annual Savings Rate: 58%
Net Worth: $1,200,000

$45,000 401k (including Company Matches)
$10,000 House Principal Payoff
$23,000 Reinvested Dividends
$12,000 Roth (Combined)
$4,800 HSA__________________________
$94,800 TOTAL


On to 2020! Thanks for following along.

[Bryan Barnfellow]

Staples, just read through your entire thread and am feeling dizzy! :-) Congrats for the excellent planning and execution. You and your wife are building a fortress (with entertainment wall) against anything the future can throw at you. Kudos!!

I remember the day, about twenty years ago when our plan brought us to the $1M mark. I had done the numbers the night before and woke my wife up with the news. We had a nice lunch that day and then went back to our LBYM habits.

Today we live in blissful early retirement in a lovely spot in the world. We couldn't be happier.

Best of luck to you and your family going forward and please continue your updates.

-BB

[Standard Staples]

Quote:

Originally Posted by Bryan Barnfellow Staples, just read through your entire thread and am feeling dizzy! :-) Congrats for the excellent planning and execution. You and your wife are building a fortress (with entertainment wall) against anything the future can throw at you. Kudos!! I remember the day, about twenty years ago when our plan brought us to the $1M mark. I had done the numbers the night before and woke my wife up with the news. We had a nice lunch that day and then went back to our LBYM habits. Today we live in blissful early retirement in a lovely spot in the world. We couldn't be happier. Best of luck to you and your family going forward and please continue your updates. -BB

Wow, thank you so much for your kind words. We're certainly trying our best to give ourselves the option to FIRE, while enjoying the present.

It's really great to hear from others in this forum that have long since reached the goal, especially in a society that generally loves debt and accepts that they'll have to work forever. My wife and I often joke about how we couldn't dare tell some of the folks in our own family about our financial position, so it's good to have an outlet with like minded individuals.

Enjoy your RE!

[Exit 2024]

Staples, congrats on blockbuster year end results!!!! You killed every single target with good margin! And of course welcome to the 2 comma club, next million should come much faster

[Standard Staples]

So, I missed my Q1 update... can't imagine why.

But here we are at the halfway point through the year, and I know I'm not alone in saying it has been an unusual first 6 months! I looked at what I wrote in January, to reflect on how the year has been, so far:

2020 is poised to be one of our best years yet.
While I'll be hard pressed to call this one of our *best* years yet (financially or emotionally), this may be the year when I best learn to appreciate what we have. Throughout the pandemic, everyone in my family has remained healthy, my kids have adjusted spectacularly and both my wife and I have not faced any type of layoff, furlough or reduction in pay. Being isolated from much of the world for such a long period of time has led me to really appreciate things we used to take for granted, and I am positioning that as my silver lining to this situation.

We're going on another cruise for my little girl's birthday next month, and we booked an 8-day for the holiday season.
We did go on the winter cruise, which was tremendous, but the 8-day is certainly in jeopardy. Even if they sail, will it be the same experience? More importantly, will we even be willing to go? Again, appreciating things that we had and enjoyed that are changing temporarily, if not permanently.

Having completed our first full year in this house, I feel like I have a good grip on the overall budget. We're planning another one or two projects with the same contractor, which will take a bite out of the budget, but we know it will be well worth it.
We have completed a medium project and a small project, with landscaping looming large next. We're still moving forward with these plans.

I'll be focused on finding my groove with the new job, but one month in, I'm already confident it was a good move.
I still feel the same, and my resolve is even stronger. This was, without a shadow of a doubt, the right move in terms of career and long term financial goals.

Now, on to the original goals and current results:

INCOME & SPENDING

Annual Combined Income: $300,000
Tracking @ $308,000

Annual Expenses: $95,000
Tracking @ $94,000

Annual Savings: $135,000
Tracking @ $146,000

Annual Savings Rate: 58%
Tracking @ 60%

Net Worth: $1,200,000
Tracking @ WHO REALLY KNOWS


GOALS
$45,000 401k (including Company Matches)
Tracking @ $45,000

$10,000 House Principal Payoff
Tracking @ $10,000

$23,000 Reinvested Dividends
Tracking @ $23,000

$12,000 Roth (Combined)
DONE

$4,800 HSA
ON TRACK
__________________________
$94,800 TOTAL
Tracking @ $94,800

Jokes aside, our NW has zigged and zagged throughout the year, for obvious reasons. We peaked around $1.08M, bottomed out around $900K and currently sit around $1.04M. I'm not confident in getting to the goal of $1.2M, but with the amount of global uncertainty combined with a U.S. presidential election cycle, I repeat... who really knows? I'll just keep moving forward, investing and working hard.

On to Q3!

[Exit 2024]

Thanks for updates, Staples, always looking forward to your posts.
Despite all zig zags you are green on all positions! Market is a a wild card right now, all we can do is "keep moving froward, investing, working hard" and hope it will all work out at the end...

[cnocmmz]

Quote:

Originally Posted by Standard Staples Long time lurker, but I thought it couldn't hurt to get actively involved in this forum, with so much great support going back and forth. Here's our situation: Me (29), DW (29) and DS (20 Months) $155,000 Combined Annual Income $60,000 Roth $50,000 Taxable Brokerage $43,000 Rollover IRA $37,000 401k (Combined) $13,000 IRA (College Savings) $33,000 Cash/HSA Primary Residence: $222,000 Debt ($128,000 Equity) Rental Property: $142,000 Debt (-$35,000 Equity) - Currently generates $250/month in profit. NET WORTH: ~$329,000 Average Annual Expenses: $55,000-60,000 Average Annual Savings: $70,000 ($35,000 401k - $20,000 Brokerage - $5,500 Roth - $5,500 IRA - $4,000 HSA) We are planning to have another baby within the next two years, and we are strongly considering having my wife stay home at that point (a fairly rare instance of looking beyond the financial aspects of the decision). I'm also in line for a new job that will match, if not exceed, our current combined income. We have a fairly long horizon, as I don't see us moving/retiring until our second heads to college. With that in mind, we're currently eyeing 2035 as a retirement date. So what do you think? How are we looking?

You guys are doing great for your age/s. Keep the focus on and save save save. So, from my old perspective (31 years your elder) I am worried not in your ability to to stay the course, but in the overall future of our country? Future of Taxes on your hard earned income, the political divide in this nation will factor in.
-Rental properties are great until they are not! meaning housing markets change and then so does employment for folks.
-I too had planned on ER at 50, and then life happened. Again, keep the focus!

[Standard Staples]

Quote:

Originally Posted by cnocmmz You guys are doing great for your age/s. Keep the focus on and save save save. So, from my old perspective (31 years your elder) I am worried not in your ability to to stay the course, but in the overall future of our country? Future of Taxes on your hard earned income, the political divide in this nation will factor in. -Rental properties are great until they are not! meaning housing markets change and then so does employment for folks. -I too had planned on ER at 50, and then life happened. Again, keep the focus!

I believe you're commenting on my original post from 5 years ago, as we have since sold the rental property, but thank you very much for the feedback. I completely agree with your sentiments on taxes and the future. My general philosophy is to control what I can and prepare for what I can't. We'll see how it goes!

[Standard Staples]

Quote:

Originally Posted by Exit 2024 Thanks for updates, Staples, always looking forward to your posts. Despite all zig zags you are green on all positions! Market is a a wild card right now, all we can do is "keep moving froward, investing, working hard" and hope it will all work out at the end...

Thanks, Exit 2024. Your comments are always appreciated. Feels like even though we have never met, nor spoken, we're on this journey together.

Glad to see you're still racing along and down to a paltry 16 quarters!

[djfiii]

I'm pretty active in real-estate investing in general, both on the land development side, as well as rentals. I own a 10x unit building in Long Beach, CA. It's not inexpensive - it's probably a $2.8M asset. A worrisome turn of events is not simply the economic impact on folks that rent (it was implied above that we'd have to worry about rental demand drying up, and thus our income could go down); it's actually worse - the State has imposed an eviction moratorium entirely!

On the one hand, I'm quite liberal leaning in my political stance, so I'm willing to absorb more of a financial hit because, frankly, I can and it only means a dip in numbers on a spreadsheet for me. My lifestyle, by and large, remains unchanged. If I visualize the pyramid of economic wealth distribution in the country, the folks that rent in my building are near the bottom, and I'm near the top. So I'd rather let someone slide a month here or there, than put someone out onto the street because the absence of that one rent payment really does me no noticeable harm, and evicting them potentially does them great harm. That said, I also have to pay for the building, so I can't let someone (or multiple someone's) stay who perpetually don't or can't pay.

A broad-based eviction moratorium then, is damaging to me at a scale that is unacceptable. My mortgage & taxes on that building are $11k/mo. If everyone stopped paying and I no longer have any recourse, I am personally accountable for a $1.5M loan on top of my own personal expenses (mortgages, etc.). The State has arbitrarily deprived me of my rights as a property owner, and shifted the financial burden entirely to me, instead of continuing the upward slide, and forcing the banks to absorb the losses. As liberal as I tend to be, this turn of events should be alarming for anyone who is currently, or considering being an owner of rental properties.