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Just getting started on ER goals
Old 01-07-2013, 10:09 AM   #1
Confused about dryer sheets
Join Date: Jan 2013
Location: Houston
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Just getting started on ER goals

Mid 20s been working for almost 5 years. Net worth is about equal to my annual salary, but just now realizing it could have been many many times that

I'm in good shape to retire by the time I'm 65, but unfortunately many of my older relatives have been passing away early and haven't been able to enjoy their retirement. I want to make sure that doesn't happen by retiring as early as possible!

My wife recently began working and we are now together earning a very nice salary (combined >170 k), so we are looking into maximizing our savings before we start a family.

Looking for general support/advice from people who have retired in their 40s and maybe a kick in the pants once in a while to keep me on my goals.
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Old 01-07-2013, 10:32 AM   #2
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Congrats! You're light years ahead of your peers as well as too many of your elders. Achieving FI (a goal apart from retiring early IMO) should be a priority for every one at any age. By starting now there is no reason you can't reach FI in your 40's. I only began to wise up at about 30, and had really gotten with the program by age 40 (good thing my income was lower during my young & stupid years).

While too many people think there's some trick to FI and RE - no matter what your income, it comes down to LBYM (living below your means). The further below your means you choose to live, the faster you will reach FI. Establishing an investment plan is also key to having your savings grow.

Once you reach FI, a world of wonderful options, including but not limited to early retirement, open up to you.

And you don't have to encourage members here to provide a 'kick in the pants' - they're already empowered to encourage as well as providing a kick...
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 30% bond funds / 20% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 01-07-2013, 10:52 AM   #3
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I was in my early 30's before my net worth was equal to my salary. Congratulations! I kind of wish I had wised up as early as you obviously have.

It doesn't sound like you need too much in the way of a kick in the pants. I take it you're maximizing your opportunities to put money into tax-deferred options (like IRA's and 401K's)? Do you have a rough idea of what to do with the money you're saving, as in which funds/stocks/bonds etc and what sort of asset allocation? At your age, the most important thing IMO is simply to make sure you save it. Thinking about exactly what the investment vehicle is can come second.

Congratulations once again!
Contentedly ER, with 3 furry friends (now, sadly, 1).
Planning my escape to the wide open spaces in my campervan (with my remaining kitty, of course!)
On a mission to become the world's second most boring man.

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Old 01-07-2013, 11:40 AM   #4
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Welcome GB08,

Good income, significant savings for your age = solid foundation for reaching FI in your 40's. The key is to live well below your means. My wife and I have been able to save about 60% of our take home pay since our late 20's and we are now comfortably FI in our late 30's. The more you save, the quicker you'll get there. The way you invest your savings matters of course, but on such a short time scale, how much you save is more important.
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Old 01-09-2013, 05:14 AM   #5
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Originally Posted by geauxbears08 View Post
... we are now together earning a very nice salary (combined >170 k), so we are looking into maximizing our savings before we start a family. Looking for general support/advice...
Several have already suggested living below your means, so here's another tip: pay yourself first. In other words, put savings on autopilot so that savings happen automatically, monthly.
"It is better to have a permanent income than to be fascinating". Oscar Wilde
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Old 01-09-2013, 06:10 AM   #6
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Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 01-09-2013, 08:22 AM   #7
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My biggest mistake was investing timidly and getting into stock mutual funds late. I still ER'd by 54, but it could have been earlier.

You are miles ahead of where I was at your age, so good for you.
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Old 01-09-2013, 08:27 AM   #8
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Congratulations, you're off to a great start. There is an uneasy balance between enjoying today and saving for the future and IMO it is important to do both.

Sounds like you have a propensity to save so keep up the good work.
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
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