New guy, 30 years old

[YoungSaver]

Hi everyone. I've browsed this forum for several months and decided to join after hitting a personal milestone. I finally made it to $100k in my 401(k).

I try not to check my balances too often, but on days with big swings in the markets I like to see how I fared. I track my status graphically without using numbers. So I have a graph of my 401(k) value, a graph of my investment accounts and a graph of my mortgage value. I then combine all those numbers together and have my "wealth health" graph. I enter in the values at the end of every month.

I like this website because we are all striving for the same goal and it is anonymous. My friends generally don't agree with saving money and plan to work forever. Sometimes I feel my savings is not very good, but then I read articles saying something like the average American over 50 has $75k saved up. To me that's unbelievable and actually kind of sad.

I come from a middle class upbringing. I'm a single male, never married and no kids. I live in a house. I recently refinanced to 3.375% for 15 years. Using my appraisal from last month, my house is 38% paid off.

Total savings minus mortgage is about $110k. I have about $150k in retirement accounts and have decided that's enough. I'm now trying to accumulate funds in my non-qualified account.

$400k is my current magic number, however $500k is probably more realistic. $500k * 4% = $20k annual. 40 years old is the "I'm dreaming" age, however retirement at 50 is very realistic. I eventually see myself living overseas 4-5 months out of the year and coming back to the US to work part time for 7-8 months. So ideally I need to accumulate $400k in 20 years. That's possible, but I enjoy my freedom and am not motivated to work extra hard to make it happen by age 40. The extra hard route involves a night job and a roommate.

That's me. I look forward to being a member of this website.

 

[GrayHare]

welcome aboard, sounds like you are off to a fine start, plus have a realistic plan... keep up the LBYM and you'll get there

 

[Texas Proud]

You will need to adjust your numbers for inflation for the next 20 years...

IOW, $20K today will be a lot more in 20 years when you plan to retire.. so your planned $500K might need to be $1 million... for the same buying power...

PS... when I was a teen I had planned to have $1 mill and retire when I was 50... great idea... but my expenses are higher (have a family) and I now need twice as much....

 

[YoungSaver]

You will need to adjust your numbers for inflation for the next 20 years...

IOW, $20K today will be a lot more in 20 years when you plan to retire.. so your planned $500K might need to be $1 million... for the same buying power...

PS... when I was a teen I had planned to have $1 mill and retire when I was 50... great idea... but my expenses are higher (have a family) and I now need twice as much....

Awwww yes, the family. That would definitely change the plan!

Yeah I basically try to LBYM, but still try to have fun and do some traveling. It is hard to be absolutely dedicated when you still want to have fun.

I've pretty much minimized all my expenses because I thought I was going to be let go from my job a couple years ago. Current average monthly expenses are about $1400 of which $650 is mortgage. Refinancing and adjusting my car insurance has saved me $250 per month!!!

I'm usually able to invest about $10k per year. I don't think I will *need* 1 million, but 400-500k would be bare minimum.

Here's my current thought process.
I have $150k in retirement accounts and $40k in my non-qualified account. I cannot access that retirement money until I'm 60 years old. In 30 years that $150k should be worth around $500k. I actually believe SS will still be around in 30 years, but I believe the benefits will shrink. If I were to retire at the age of 45, then I basically need enough money in my non-qualified account to last me until the age of 60. Does that sound right or am I missing something? Obviously I wouldn't plan to arrive at 60 with zero dollars, but at age 60 I would then have access to much more money.

 

[Midpack]

Welcome aboard and congrats on being ahead of the curve. Way too many people don't wake up to saving & investing until 40-50 yo if then, when it's probably too late. Don't worry about ER, make FI the goal and worry about what to do then when you'll have options few others do...

 

[YoungSaver]

Welcome aboard and congrats on being ahead of the curve. Way too many people don't wake up to saving & investing until 40-50 yo if then, when it's probably too late. Don't worry about ER, make FI the goal and worry about what to do then when you'll have options few others do...

Thanks. Yeah I just dream about having the ability to travel more and work less. I know that day will come some day. It's nice to at least have goals.

 

[Live And Learn]

Don't worry about ER, make FI the goal and worry about what to do then when you'll have options few others do...

+1 !

You remind me of me 20 years ago ! Congratulations on your milestone

I'm looking to ER in a year or two or three or four but knowing that I have the OPTION and am making the decision based upon what I WANT rather than the minimum I NEED is a nice problem to have.

If you have the dream and want it you CAN make it happen !!!

 

[scrabbler1]

Here's my current thought process.

I have $150k in retirement accounts and $40k in my non-qualified account. I cannot access that retirement money until I'm 60 years old. In 30 years that $150k should be worth around $500k. I actually believe SS will still be around in 30 years, but I believe the benefits will shrink. If I were to retire at the age of 45, then I basically need enough money in my non-qualified account to last me until the age of 60. Does that sound right or am I missing something? Obviously I wouldn't plan to arrive at 60 with zero dollars, but at age 60 I would then have access to much more money.

The bolded part of your post is what I can address.

As someone who ERed in late 2008 at age 45, I split my ER budget into two pieces. The first part is the "Can I make it age ~60 intact?" and the second part is "How do things change/improve after age ~60?" [As a Fidelity client, I used Fidelity's Retirement Planning software to see if my plan made sense.]

Right now, I am living off the dividends from my non-IRA investments and have been doing so quite well for the last 3.5 years. When I hit age ~60, I can begin tapping into my 3 "reinforcements" which are (1) unfettered access to my IRA, (2) my frozen company pension, and (3) Social Security.

My plan was to not touch the principal in my non-IRA accounts, at least at the beginning, and live off only the dividends. To do that, however, I needed somewhere in the $500k-$600k range and have some of it in stocks to act as an inflation hedge. You seem to be far away from having that amount but have a lot of time to build up to that. You can probably get by with less than that but a lot depends on what your expenses will be at that time. Will you remain single and childfree (like I am)? Will you be debt-free, also keeping your expenses low (like I did)?

Another thing you have to consider is health insurance. Right now, the status of Obama's health insurance reform act is not 100% certain, but by the time you near age 45 we will know a lot better how it is working. Finding an affordable individual policy was the last piece of my ER plan which fell into place in 2008.

But it is great that you are well on your way to an early retirement.

 

[Texas Proud]

Awwww yes, the family. That would definitely change the plan!

Yeah I basically try to LBYM, but still try to have fun and do some traveling. It is hard to be absolutely dedicated when you still want to have fun.

I've pretty much minimized all my expenses because I thought I was going to be let go from my job a couple years ago. Current average monthly expenses are about $1400 of which $650 is mortgage. Refinancing and adjusting my car insurance has saved me $250 per month!!!

I'm usually able to invest about $10k per year. I don't think I will *need* 1 million, but 400-500k would be bare minimum.

Here's my current thought process.
I have $150k in retirement accounts and $40k in my non-qualified account. I cannot access that retirement money until I'm 60 years old. In 30 years that $150k should be worth around $500k. I actually believe SS will still be around in 30 years, but I believe the benefits will shrink. If I were to retire at the age of 45, then I basically need enough money in my non-qualified account to last me until the age of 60. Does that sound right or am I missing something? Obviously I wouldn't plan to arrive at 60 with zero dollars, but at age 60 I would then have access to much more money.

Yes, a family can throw a big monkey wrench into your plans.... it did for me... I married a few years ago and got a wife and two kids... but I am willing to work the extra years needed...

My point about your plans is they seem to be talking in today's dollars... and using an online inflation calculator, you should plan for inflation...

The Inflation Calculator

If you had planned to retire with $500,000 20 years ago... you would actually need more... from the site "What cost $500000 in 1990 would cost $823345.95 in 2010."

Just me, but do not try to be so minimalistic that you do not enjoy life... I have met people who have not taken a vacation in 5 or even 10 years... they do not have any interests (not that I have a lot myself)....


Anywho... it is good to plan and to keep after your goal, just be realistic on what you can do and adjust as needed...

 

[alexbalex]

I reiterate what has been said about family really changing the equation. To show you in some concrete numbers: when it was just me, my "magic number" was about $625,000. When I got married, and convinced my wife to retire early with me to Panama, it was around $900,000. Then we had two kids and are stuck living in the US, our "magic number" is $1.8 million (which includes college savings plans).

The point is, if there is any chance you will get married and have kids, it is likely you will need a whole heck of a lot more than you are planning for now. Once you retire, it might be hard to get back into the work force and get a decent job again.

Also, of some consideration, poll numbers of women reveal that they strongly value qualities linked to men being income-earners, e.g. "his ability to provide for me" or other such euphemisms. The point is that by retiring when you are single and committing yourself to a fairly frugal lifestyle, you may be making it hard on yourself in the dating world.

 

[obgyn65]

Welcome to the board, YoungSaver.

 

[militaryman]

Welcome YoungSaver! You appear to have the right mindset to be able to reach your goals ... Adjusting things as time goes by will be key --- Having a spouse/family is not always to be viewed in a negative cashflow sense --- being clear of your future desires will attract some people you date and drive others away .... Might as well hook up with someone who is likely to be on the same page as you concerning these issues. Heck, you could also end up marrying into money ! Anyways LBYM within reason is as important as continuing to ramp up savings and truly try to practice living a year or so on your projected retirement budget before you jump ship to make sure you are being realistic.
Cheers

 

[alexbalex]

being clear of your future desires will attract some people you date and drive others away .... Might as well hook up with someone who is likely to be on the same page as you concerning these issues.

Maybe, but if I was the OP I wouldn't harbor any illusions that its an even split. A recent study showed that 75% of women admitted they would not marry an unemployed guy (and that's just the people who admitted it).

Nor is the fact that a woman is attracted to good providers a negative personality trait, its just human nature, in the same way men are attracted to pretty women. We're hardwired that way.

So my own thought on it is there is no sense ruling out the large majority of women who are attracted to money/security, etc., because you could be throwing out some great people, who while they may be attracted to good providers, are also quite responsible with their finances.

 

[Texas Proud]

Maybe, but if I was the OP I wouldn't harbor any illusions that its an even split. A recent study showed that 75% of women admitted they would not marry an unemployed guy (and that's just the people who admitted it).

Nor is the fact that a woman is attracted to good providers a negative personality trait, its just human nature, in the same way men are attracted to pretty women. We're hardwired that way.

So my own thought on it is there is no sense ruling out the large majority of women who are attracted to money/security, etc., because you could be throwing out some great people, who while they may be attracted to good providers, are also quite responsible with their finances.

Heck, I know that...

There are times when I get tired of my wife wanting this or that and will say... 'we could be living in a small apartment or a trailer'.... to show that not all people have it as well as we do...

Her response "no, I would not have married you".... kind of puts you in your place...

 

[militaryman]

Nor is the fact that a woman is attracted to good providers a negative personality trait.

Oooo, I hope I did not imply that the OP should not be interested in women who want a "good provider" -- That would rule out most -- On the otherhand finding a woman that values the OP's LBYM lifestyle and saving aspirations as a crucial part of being a good provider vs. as a bother to her lifestyle would provide a good trait in a partnership that would benefit the OP in reaching his ER/FI goals while also having a spouse.

 

[alexbalex]

Heck, I know that...

There are times when I get tired of my wife wanting this or that and will say... 'we could be living in a small apartment or a trailer'.... to show that not all people have it as well as we do...

Her response "no, I would not have married you".... kind of puts you in your place...

hahaha my wife refuses to let me move us into a small condo apartment. Apparently having a lawn is some sort of crucial family need I was not aware of

Oooo, I hope I did not imply that the OP should not be interested in women who want a "good provider" -- That would rule out most -- On the otherhand finding a woman that values the OP's LBYM lifestyle and saving aspirations as a crucial part of being a good provider vs. as a bother to her lifestyle would provide a good trait in a partnership that would benefit the OP in reaching his ER/FI goals while also having a spouse.

True, I would just worry that a fair amount of potential romantic dates would consider an early retired, frugal-by-necessity person to be too big a threat to their family stability and welfare to risk pursuing.

 

[YoungSaver]

True, I would just worry that a fair amount of potential romantic dates would consider an early retired, frugal-by-necessity person to be too big a threat to their family stability and welfare to risk pursuing.

As the OP, I have a long way to go before I'm retired. I do appreciate the advice in this thread. I understand that life changes, but it's good to have goals and positive things to dream about.

 

[Texas Proud]

hahaha my wife refuses to let me move us into a small condo apartment. Apparently having a lawn is some sort of crucial family need I was not aware of

YES!!! And my wife continues to spend a LOT of money on plants and flower that DIE.... heck, spend the money on ones that will LIVE a few years...

We will be buying a lot of mulch over the next month... also, our water bill is outrageous because she then says that we have to water them all or they will die... probably $30 more a month just to water the yard...

But, I do have to admit that it does look good...

OK, back to the original thread...

 

[ronocnikral]

from a fellow whipper snapper, welcome young saver. Good job on your progress towards your financial goals. I look forward to hearing about your experiences.

 

[YoungSaver]

from a fellow whipper snapper, welcome young saver. Good job on your progress towards your financial goals. I look forward to hearing about your experiences.

Sup Bro.

Basically I try to watch what I spend on food and alcohol. Those seem to fluctuate pretty easily. All it takes is one night out with the buddies and you can easily blow $100 on beer/food/girls. I'm not much of a cook, but I do eat a lot of chicken, grow veggies in my garden (in my freezer now), and eat a lot of $1 tacos or $2 double cheeseburgers. Exercise is key for health in older age, so I hit the gym very regularly.

We are young, and still want to go out and have fun, but we just need to think about those things and the money they cost.

Also I like to research the heck out of big purchases. Then ask myself, "Do I really need this?" The answer is usually no (after you already have a TV, laptop and cellphone, haha).

I think the name of the game is just finding good bargains and items that have a high utility value to them.

 

[YoungSaver]

Hi everyone. I've browsed this forum for several months and decided to join after hitting a personal milestone. I finally made it to $100k in my 401(k).

Total savings minus mortgage is about $110k. I have about $150k in retirement accounts and have decided that's enough. I'm now trying to accumulate funds in my non-qualified account.

3 years later...34 years old now.
$183k in 401(k)
$66k in Roth IRA
$65k in non-qualified
$(70k) mortgage

Total savings minus mortgage is about $244k.

Been doing the minimum to get company match in the 401(k). Have not contributed to Roth or non-qualified lately. Stock market has gone way up in the past few years (Thanks Obama /sarcasm). I still travel often.

Everything seems to be on track. Trying to build up my emergency fund currently since I had some pretty major unexpected automotive expenses last year.

Still hoping to be FI by 40. I know I will need to start saving more, but the wild fluctuations (gains) in the market lately make it seem like I'm progressing faster than I thought I would be.

 

[REWahoo]

New guy, 30 years old

3 years later...34 years old now.

Maybe you need to adopt my sig line...

 

[YoungSaver]

New guy, 30 years old

Maybe you need to adopt my sig line...

Naw, I posted the original post about a week before my birthday. I guess I should have called the thread "New guy, nearly 31 years old." Sorry for the confusion.

 

[petershk]

$400k is my current magic number, however $500k is probably more realistic. $500k * 4% = $20k annual. 40 years old is the "I'm dreaming" age, however retirement at 50 is very realistic. I eventually see myself living overseas 4-5 months out of the year and coming back to the US to work part time for 7-8 months. So ideally I need to accumulate $400k in 20 years. That's possible, but I enjoy my freedom and am not motivated to work extra hard to make it happen by age 40. The extra hard route involves a night job and a roommate.

That's me. I look forward to being a member of this website.

I wish I found this forum YEARS ago. I'm turning 40 this year and between 30 and 40 a lot changed... mostly married, family... and that changes EVERYTHING. However LBYM will pretty much always work so keep that up and you can achieve your goal.

Luckiest thing I ever did was marry an SO that has the same goals I do. We NEVER fight about money and I've seen friends and family ripped apart by this. We just live a good life, value experience over stuff, drive older cars, take cheap vacations and avoid environments where there is a lot of conspicuous consumption.

When I was 24 I had an internet company that was doing pretty well, I bought a new BMW and thought I was the SH*T. Then the market crashed and it all went bye bye. That BMW was like a noose around my neck for 2 years. After that I became a dedicated LBYMer and started making much better financial and career choices.

But I'm amazed at how much the right counterpart (or if you can't/don't want one) no counterpart matters in the equation.
Maybe there should be a FIRE dating site

 

[YoungSaver]

1 year later check-in. Girlfriend moved in with me. Pays some rent. Otherwise, nothing has really changed except for some more automobile expenses (engine replacement) and I took out a second mortgage to invest in a business opportunity. Net worth has been all over the place.

$179k in 401(k)
$64k in Roth IRA
$64k in non-qualified
$(65k) mortgage
$(17k) in second mortgage

Total savings minus mortgage is about $226k.

$183k in 401(k)
$66k in Roth IRA
$65k in non-qualified
$(70k) mortgage

Total savings minus mortgage is about $244k.