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Hello, Atlanta pharmacist checking in
Old 06-08-2020, 06:35 PM   #1
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Hello, Atlanta pharmacist checking in

Hey guys, I'm rezz. I just discovered this community by chance. It's a perfect fit for me because I love personal finance and I want to become financially independent. I don't really have anybody to talk to about this in my personal life because my methods go over their heads. My goal is to at least semi-retire within 15 years.

A little background... I'm 31 years old and single with no kids. I've been working as a retail pharmacist for almost 5 years. I started off making around $110k but I've gotten several promotions and regular raises since then. I paid off my student loans (~$180k) extremely quickly because I'm uncertain about the future of this career.

Income:
$175k projection for 2020 ($153k salary and bonuses at main job + $20-30k at a prn hospital gig)

Assets:
$40k cash
$88k in stock brokerage accounts
$120k in cryptocurrencies
$88k in 401k plans
$53k in free company stock (8% of pay annually)
$8k value of car

Liabilities:
$2k for credit card that I use for cash reward bonuses. I pay off the balance each month.
$70k personal loan @7.45% interest. Long story, but I was stupid and took out a huge loan in 2018.

Monthly budget:
$1700 personal loan repayment
$1000 rent for 1 br apartment
$400 groceries and eating out
$150 utilities
$121 car insurance
$80 gas
$100 miscellaneous
I also spend about $5000 a year on a couple of big domestic and international vacations. Probably not happening this year though.

I don't have a set savings plan outside of my 401k paycheck deductions. I usually spend a big chunk of money on stocks or cryptocurrency when my cash reaches $70k or $80k. I think one big thing I'm missing is an IRA but I'm not sure how I'd benefit since I wouldn't get a tax deduction.

Please feel free to ask questions and give me advice.
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Old 06-08-2020, 06:42 PM   #2
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Hay Rezz. Another Georgia guy here (from LA). From my view u have a fantastic start at 31!!. Stay off the CC debt and LBYM's. Welcome. At 31 to have your vision and assets speaks volumes about your success. Stay the course.
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Old 06-08-2020, 06:51 PM   #3
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Hay Rezz. Another Georgia guy here (from LA). From my view u have a fantastic start at 31!!. Stay off the CC debt and LBYM's. Welcome. At 31 to have your vision and assets speaks volumes about your success. Stay the course.
Thanks. I only use the CC for my regular monthly expenses. I pay off the statement every month and never accrue interest. And I get 3% cash back with the card I'm currently using.
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Old 06-08-2020, 07:46 PM   #4
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Welcome. Recommend that you kill the $70K loan asap. Also, if you have the ability to sell the company stock and diversify, that might be a good option to explore.
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Old 06-08-2020, 08:08 PM   #5
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An IRA, even if not deductible, gives tax free *growth*

Contribute to a traditional IRA then immediately convert to a Roth - Boom tax free growth & tax free withdrawal at 59 1/2 or after 5 years take Contributions penalty free.
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Old 06-09-2020, 12:15 AM   #6
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I would say you need to track your expenses more closely. No way in the world I can see you spend $150 for utilities. That would not cover electricity for me much less, gas, water, trash, internet, phone. . . (Unless of course your rent covers that).

I think you probably know the personal loan is kind of crazy and should be dealt with . . .
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Old 06-09-2020, 05:05 AM   #7
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Welcome to our site. Good start to your financial career.
I would look to pay off that personal loan as soon as you can.
Think of it this way, are any of your assets earning 7.45% returns?
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Old 06-09-2020, 05:25 AM   #8
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I know nothing about cryprocurrency, its value, stability of that value, etc. With that caveat, I'd suggest selling it to pay off that 7+% personal loan. Beyond that, you seem to be doing very well; kudos.
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Old 06-09-2020, 05:37 AM   #9
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Originally Posted by badatmath View Post
I would say you need to track your expenses more closely. No way in the world I can see you spend $150 for utilities. That would not cover electricity for me much less, gas, water, trash, internet, phone. . . (Unless of course your rent covers that).

I think you probably know the personal loan is kind of crazy and should be dealt with . . .
Hey, badatmath. I track every single expense with mint.com.

Water and trash is free
Mobile phone is $25 (currently $15 because of covid19 promotion) through Cricket
Internet is $60 through Comcast
Electric is $39.74 per month average so far this year
Gas is $41.37 per month average

Keep in mind that I live in a 1 br apartment.
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Old 06-09-2020, 05:57 AM   #10
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I know nothing about cryprocurrency, its value, stability of that value, etc. With that caveat, I'd suggest selling it to pay off that 7+% personal loan. Beyond that, you seem to be doing very well; kudos.
The crypto is incredibly unstable. It made me a ton of money in 2017, killed my net worth throughout 2018/2019, and now it's doing well in 2020. It might be my ticket to ER so I'm hesitant to let it go.

I'm thinking about paying off the personal loan ASAP but I would like to do it with cash savings. Maybe next year. Or I could stretch it out to June 2024 and pay the relatively small $11k in interest.
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Old 06-09-2020, 06:12 AM   #11
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The crypto is incredibly unstable. It made me a ton of money in 2017, killed my net worth throughout 2018/2019, and now it's doing well in 2020. It might be my ticket to ER so I'm hesitant to let it go.

I'm thinking about paying off the personal loan ASAP but I would like to do it with cash savings. Maybe next year. Or I could stretch it out to June 2024 and pay the relatively small $11k in interest.

Currently your assessed value of cryptocurrency is roughly 40% of your net worth, but you also mention how it wiped you out previously. General mantra for speculative investments is to only do it with money you can afford to lose.
Based on that, you may want to rethink selling enough to pay off that loan.
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Old 06-09-2020, 08:08 AM   #12
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Currently your assessed value of cryptocurrency is roughly 40% of your net worth, but you also mention how it wiped you out previously. General mantra for speculative investments is to only do it with money you can afford to lose.
Based on that, you may want to rethink selling enough to pay off that loan.
+1
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Old 06-09-2020, 08:18 AM   #13
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Originally Posted by mystang52 View Post
Currently your assessed value of cryptocurrency is roughly 40% of your net worth, but you also mention how it wiped you out previously. General mantra for speculative investments is to only do it with money you can afford to lose.
Based on that, you may want to rethink selling enough to pay off that loan.
EDIT: Currently your assessed value of cryptocurrency is roughly 40% of your ASSETS. As a % of net worth is even higher, yet more reason to at least pay off the loan with this volatile asset.
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Old 06-09-2020, 08:36 AM   #14
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Originally Posted by mystang52 View Post
Currently your assessed value of cryptocurrency is roughly 40% of your net worth, but you also mention how it wiped you out previously. General mantra for speculative investments is to only do it with money you can afford to lose.
Based on that, you may want to rethink selling enough to pay off that loan.
+2

And you have a lot in your company stock too. Is it through ESPP? I would diversify this position also - too much risk for such big % of your assets.
BTW,
I would not count car as asset, it is more like expensive personal use item with diminishing value, those are usually excluded from NW calculations.
Also would exclude credit card from Liabilities, if you pay it monthly - it is just your monthly living expense.
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Old 06-09-2020, 08:39 AM   #15
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EDIT: Currently your assessed value of cryptocurrency is roughly 40% of your ASSETS. As a % of net worth is even higher, yet more reason to at least pay off the loan with this volatile asset.
I know. It looks crazy but I wanted to put a lot into crypto early and allow it to mature over time. I still have a lot of earning power left for my remaining working years, so I plan on investing in safer asset classes going forward.
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Old 06-09-2020, 08:44 AM   #16
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+2

And you have a lot in your company stock too. Is it through ESPP? I would diversify this position also - too much risk for such big % of your assets.
BTW,
I would not count car as asset, it is more like expensive personal use item with diminishing value, those are usually excluded from NW calculations.
Also would exclude credit card from Liabilities, if you pay it monthly - it is just your monthly living expense.
The company stock is not ESPP. It's given to full time employees annually as a contribution towards retirement. I have the option to sell it but I'd have to pay taxes and (I think) an early withdrawal penalty fee.
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Old 06-09-2020, 08:47 AM   #17
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Welcome rezz! Thanks for sharing. First, you chose a great career. Your job will not be in jeopardy and you're making great $$. At 31, we were in debt, I was the sole bread winner and DH just finished his degree. We knew so little about finance, the stock market or where we'd be in 5 years. You are way ahead. Make sure you pick the right partner when you're ready to commit. Your goals have to be in line.

We did not start seriously saving and investing until our mid-late 30's. And we RE at 56. DH has a small consulting business at home (he enjoys but we are fine without it) earning ~ $42K/year.

Our perspective is no debt. We own our home, cars and hate to pay interest to anyone. We take/took great vacations overseas and domestically and do not have kids (not by choice).

Your NW is $389K and you spend ~$48K/year. Keep the vacations in there. That seems high for a single person but your salary covers it nicely. It all boils down to how you see your future. Most of our posters LBYM, meaning live below your means. That seems to be the special sauce that got most of us to ER. And it depends how early you want to retire. Healthcare is a huge topic here. That will be a major hurdle depending how early you retire.
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Old 06-09-2020, 08:48 AM   #18
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The company stock is not ESPP. It's given to full time employees annually as a contribution towards retirement. I have the option to sell it but I'd have to pay taxes and (I think) an early withdrawal penalty fee.
Understood, with you income I would also try to avoid any taxable transactions as much as possible.
Are you maxing out 401k?
Would look into contributing to to Roth IRA through conversion of non-deductible Traditional IRA contributions.
Do you have access to HSA? if yes- I would max out and treat it as additional retirement saving account.
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Old 06-09-2020, 09:00 AM   #19
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Welcome rezz! Thanks for sharing. First, you chose a great career. Your job will not be in jeopardy and you're making great $$. At 31, we were in debt, I was the sole bread winner and DH just finished his degree. We knew so little about finance, the stock market or where we'd be in 5 years. You are way ahead. Make sure you pick the right partner when you're ready to commit. Your goals have to be in line.

We did not start seriously saving and investing until our mid-late 30's. And we RE at 56. DH has a small consulting business at home (he enjoys but we are fine without it) earning ~ $42K/year.

Our perspective is no debt. We own our home, cars and hate to pay interest to anyone. We take/took great vacations overseas and domestically and do not have kids (not by choice).

Your NW is $389K and you spend ~$48K/year. Keep the vacations in there. That seems high for a single person but your salary covers it nicely. It all boils down to how you see your future. Most of our posters LBYM, meaning live below your means. That seems to be the special sauce that got most of us to ER. And it depends how early you want to retire. Healthcare is a huge topic here. That will be a major hurdle depending how early you retire.
Hi Rianne. Thanks for the words of encouragement. I'm happy that you and your DH were able to meet your goals.
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Old 06-09-2020, 09:06 AM   #20
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Understood, with you income I would also try to avoid any taxable transactions as much as possible.
Are you maxing out 401k?
Would look into contributing to to Roth IRA through conversion of non-deductible Traditional IRA contributions.
Do you have access to HSA? if yes- I would max out and treat it as additional retirement saving account.
I've never been able to max out my 401k for 2 pesky reasons. My main job until this year only allowed a max contribution of 10% of pay. So the max I ever contributed was $14k-$15k. On top of that, I kept getting screwed by the highly compensated employee rule. My company 401k servicer has had to deduct $4k-5k out of my 401k contributions for the past 2-3 years and mail me a check.

2020 may the first time that I can max out on 401k contributions. I'm contributing only 7% from my main job (~$10k). And I'm contributing about half of the pay from my side hospital job (~$9.5k) into a 403b.
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