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Hi from dukebound85
Old 12-20-2020, 10:56 PM   #1
Confused about dryer sheets
 
Join Date: Dec 2020
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Hi from dukebound85

Been following this forum for a few months after being shown the firecalc and got inspired. Got the FIRE bug from watching youtube channels (ie OurRich Journey) and following websites like MMM.

Like many others here, I am wanting to not live my life working for a living and hope to retire early and have work be "optional".

Some background, I am 35, recently married with my wife (36) and a little one on the way!

I keep a spreadsheet of my amounts and projections. As of this month, we have:

Combined Income:
~160k/year (110k for me; 50k for wife)

Retirement accounts:
Tax Advantaged Accounts (401k/Roth/HSA):
Me: 112k; Wife: 55k

Taxable and Savings Accounts:
Me: 106k; Wife: 16k
Of the above 122k, We have ~30k in liquid bank accounts as our EF

Pension Accounts:
Me: 31k in my contributions (not including state contributions)

Properties
Primary:
~100k in equity (350k left on mortgage)

Rental 1:
~150k in equity (250k left on mortgage)

Rental 2:
~50k in equity (170k left on mortgage)

Net Worth

Net Worth Without Real Estate Equity:
~320k

Net Worth With Real Estate Equity:
~620k

We do not have any debts aside from mortgages. I wish I was aware of FIRE before the last few years and am hoping to reach a 1 million net worth (without houses factored) by 2025 (we would be 40) and 2.5 million by 2034 (would be 49) and have work optional. Our current savings rate is ~55-60% combined

I hope we are on the right track!

Anyways, that is me and I welcome any and all advice. Very much looking forward to this community and following along.
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Old 12-21-2020, 05:45 AM   #2
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Welcome to our wonderful forum.
It sounds like you are off to a good start in your pursuit of ER.
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Old 12-21-2020, 07:11 AM   #3
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Welcome aboard and congratulations on such a great savings rate at your ages.

That was a similar rate that the DW and I maintained although we had no kids and it worked out well.
I use to look at it in real simple terms that if we saved half(or more) of our income then we would only have to work half as long
Of course it's not that simple with inflation, taxes.recessions, bad returns etc. etc. but the very discipline of saving that much and trying to control lifestyle creep made all the difference for us.


You are so far ahead of so many 30 somethings I know that I think you will do well.
Most people are not wired to be such great savers.
Having a household income comfortably more than 2x the median but only living a little above the median will bode well for the future.
Good luck
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Old 12-21-2020, 10:15 AM   #4
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Welcome aboard!
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Old 12-21-2020, 11:25 AM   #5
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Welcome to the forum. Doing good on where you are at currently. Your high savings rate is great. I assume the rentals are basically self-supporting so you don't have much out of pocket for them.


You didn't mention much about investments, but at your age and timeframe the general recommendation is to be nearly all in equities. Beware of fees, try to limit those as they negatively affect your accumulation due to compounding. Keep up the good work you have started.


I never focused on net worth, just concentrate on the savings and the net worth will follow. NW is a nice comparison tool for some, but what really matters is your savings and the income producing part of NW. Rentals can be a nice source of income, and tax advantages in your accumulating phase.
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Old 12-21-2020, 12:02 PM   #6
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Welcome!

And congrats on the recent marriage/baby on the way! There's nothing better. And what a gift it will be to retire early and spend lots of time together.

Keep up the great work.
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Old 12-23-2020, 05:19 PM   #7
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Quote:
Originally Posted by dukebound85 View Post
We do not have any debts aside from mortgages. I wish I was aware of FIRE before the last few years and am hoping to reach a 1 million net worth (without houses factored) by 2025 (we would be 40) and 2.5 million by 2034 (would be 49) and have work optional. Our current savings rate is ~55-60% combined
Welcome! A 55-60% savings rate puts you at the head of the class! To do that at your ages is awesome! I wasn't able to hit 50% saving rate until I turned 47, had a salary bump, sold my condo, and moved into my wife's condo. Does your savings rate include the income from the rentals, less expenses?

Equities and real estate earnings are, unfortunately, subject to ups and downs. If we continue to see returns similar as 2008-present, you may well make your goal! Have you tried inputting your info into FIRECALC? I did a quick run with a starting spending rate of $80K annually, a starting portfolio value of $490K (included rental equity, since I'm assuming it generates a rate of return similar to equities, after costs), a 41-year retirement period, and a retirement year of 2034, and did not include SS. I got a 100% success rate!
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Old 12-23-2020, 06:01 PM   #8
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Welcome!

I suggest that you consider getting Quicken Deluxe and using their Lifetime Planner to develop your plan. You can also use it to track your finances, cash management, your progress towards your goals and the info that you need at tax time for those rentals.
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Old 06-07-2021, 08:18 PM   #9
Confused about dryer sheets
 
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Update!

DD finally welcomed us 5 weeks early and it has been an adjustment. However, I am excited at our net worth update!!

We recently reached:
- investable assets of 410K
- property equity of ~380k (two rentals and primary)
- total NW is almost 795k (or ~650k not including primary home)

Our net worth has JUMPED 170k in 5 months?? This is fun to watch and is even more motivating
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Old 06-07-2021, 08:47 PM   #10
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Congratulations on the addition to the family - how sweet to have a DD in the house!
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Old 06-07-2021, 09:06 PM   #11
Confused about dryer sheets
 
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Originally Posted by CindyBlue View Post
Congratulations on the addition to the family - how sweet to have a DD in the house!
It is!

Definitely makes us view life in a different perspective
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Old 06-08-2021, 05:45 AM   #12
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Congrats on DD. I donít usually post but your post resonated with me as my DD was born last month also 5 weeks early. As other folks have mentioned in this forum, you may want to forecast your your expenses to increase going forward. Iíve already seen this starting with the hospital bill which includes an almost 2 week stay in the NICU. Yikes. Luckily insurance kicked in after I met my out of pocket max.
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