Hi all! I am 30, Married with 2 kiddos. Net worth is around 230k including home equity & savings. I am really wanting to get to a place where I can retire. We probably live off of 3000 a month or so, and the house is paid off. As I own my own business, I don't have a high pressured situation as it is, but I am always constantly worrying about what if business comes in or not, so I would like to just be done with it, and be ok financially if nothing comes in again. Ideally, I'd like to *be able* to retire by 40 or sooner! I have a life insurance deal I kick $100/mo in with NWM, but that is about all the investing I do, aside from having a high yield checking account which brings in $200 a month.
What do you all recommend I do to get to my goal of retirement? I would like to invest to get my money to a point where it grows as quickly as possible on its own. Thanks!
You live off of 3000/mo
but how much do you gross per month?
the difference between those two numbers will help you find your way.
Here are some basic tips for starters
1) Spend less than you earn.
2) save at least 20% of gross pay every paycheck and every month
2a) put at least 15% of the gross pay into an account marked for retirement
2b) put 5% of gross pay into short term savings (savings means pay down debt or find others ways to save- for next car, for next vacation, for next XXX so large expenses are not a burden)
3) The earlier you want to retire, the more you want to focus and increase #2 (retiring at 40 means save 50% and not 20% for example)
The single most important factors (in order) to success will be
1) spend less than you earn
2) the percentage you save
3) the risks you take investing
4) the expenses and fees incurred from saving and investing
Focus on the risks associated with investing. NOTHING is risk free- if someone says it is risk free, ask yourself what they don't know or are not telling you.
Risks takes many forms. There is market risk (the market moves up and down), there is inflation risk (cost of good goes up), interest rate risk (interest rates change value of investments and the return you get) and business risk (your liability in your business, the fact the economy tanking might change your income etc).
Nothing is risk free... so when you analyze an investment, you want to look at the risk it gives you vs the rewards it provides. Everyone's tolerance for a given risk is different, and never (EVER!) let anyone tell you how much risk to take.
Educate yourself so you know the risks and are comfortable with every risk you take.